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[2026] NSWSC 310
Supreme Court of NSW
2026-04-01
Elkaim AJ
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Frisken v Bitar Pty Ltd (No 2) [2026] NSWSC 310
Hearing dates: 26-27 March 2026
Date of orders: 1 April 2026
Decision date: 01 April 2026
Jurisdiction: Common Law
Before: Elkaim AJ
Decision: 1. The appeal is allowed.
2. The amount determined in the Certificate of Determination of Review dated 17 February 2025 is set aside.
3. In lieu of the figure assessed in the Certificate of Determination of Review, the amount to be determined in the assessment is $475,000.
4. The Certificate of Determination of Review Panel Costs dated 17 February 2025 is confirmed.
5. Each party is to pay its own costs of the summons.
6. The plaintiffs and the second defendant have leave to request any further orders, consistent with these reasons, to assist in the progress of any related proceedings.
Catchwords: COSTS — Costs assessment — appeal from determinations made by Review Panel — where court referred claim to a costs assessment pursuant to Pt 4.3 of the Legal Profession Uniform Law 2014 (NSW) — whether s 172(4) required compliance with disclosure obligations — whether Review Panel made an error in voiding the costs agreement between the law firm and the receiver due to failure to comply with disclosure obligations and then assessing costs on a quantum meruit basis
Legislation Cited: Civil Procedure Act 2005 (NSW), s 56
Legal Profession Uniform Law Application Act 2014 (NSW), ss 85, 89
Legal Profession Uniform Law 2014 (NSW), Pt 4.3 Div 3, Div 7, ss 170, 171, 172, 200(1)
Supreme Court Act 1970 (NSW), s 75A
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Frisken v Bitar Pty Ltd [2026] NSWSC 10
Hebbel Constructions Pty Ltd v Bitar Pty Ltd [2021] NSWSC 810
McInnes v Rheem Australia Pty Ltd [2021] NSWCA 89
Wiltrading (WA) Pty Ltd v Lumley General Insurance Ltd (2005) 30 WAR 290; [2005] WASCA 106
Category: Principal judgment
Parties: Daniel Frisken (First Plaintiff)
ACN 640 543 979 Pty Ltd (Second Plaintiff)
Bitar Pty Ltd (First Defendant)
Hebbel Constructions Pty Ltd (Second Defendant)
Representation: Counsel:
A F Fernon SC (Plaintiff)
P Speed (Second Defendant)
Solicitors:
Yates Beaggi Lawyers Pty Ltd (First & Second Plaintiffs)
Speed And Stracey Lawyers Pty Ltd (Second Defendant)
File Number(s): 2025/326200
Publication restriction: No
“a. Certificate of Determination of Review issued by the Review Panel on 17 February 2025, sent to the parties on 28 July 2025;
b. Certificate of Determination of Costs issued by the Costs Assessor on 8 August 2022 sent to the parties on 27 September 2022; and
c. Certificate of Determination of Manager’s Assessment Costs, issued by the Costs Assessor 8 August 2022 sent to the parties on 27 September 2022.”
The proceedings are an appeal brought pursuant to s 89 of Legal Profession Uniform Law Application Act 2014 (NSW) (the LPULAA). The amount in dispute is more than $100,000 so leave to appeal is not required.
Section 89(4) states:
An appeal is to be by way of a rehearing, and fresh evidence or evidence in addition to or in substitution for the evidence before the review panel or costs assessor may, with the leave of the Court, be given on the appeal.
“I am the director of Bitar and at the last moment, for whatever reason, there was some confusion. I had been ill for about five days. I had no contact with my barrister or anybody, knew nothing about anything that was going on so it was a huge misunderstanding. Again, I apologise and I came in today – only reason I came in today is because I didn’t know what was going on.”
Then, after stating he did not have any information with him, he requested an adjournment. Objection to an adjournment was taken by both the plaintiffs and the second defendant.
Mr Katter then said:
“I have a barrister and everybody. That's not the issue. The issue is I took ill for a week, never spoke to anyone, I didn't know what was going on. There was some misunderstanding between us and I don't know what happened. So I have yet to work out what's happened, your Honour, so I have been left in confusion.”
“Well, that's ‑ at the moment you are correct, because there was a discussion over the phone and it didn't come out quite correctly so at the last moment, what was I to do, your Honour? I did not have any time to do anything.”
It appears that the barrister was probably acting on direct instructions from Mr Katter. As stated above, no appearance had ever been filed by a solicitor.
Mr Speed, who acts for the second defendant, then told me that Mr Katter had “gone through 16 different lawyers or more, in the various proceedings.” The various proceedings include the proceedings which led to the costs assessment which are the subject of the summons.
Mr Speed then added:
“This application for adjournment is par for the course. We have had this before Justice Black on multiple occasions where, when we appear on the day, we find out Bitar indicates that it is not represented and it seeks a late adjournment, despite the fact that all of the parties have prepared all of the evidence and have got themselves ready.
In these proceedings alone, originally there was a solicitor on the record ‑ well, there was a solicitor acting for Mr Katter ‑ who then ceased acting shortly after commencing. I'm not sure whether they filed a notice of appearance.
Since that date, Mr xxx has been representing Mr Katter, or Bitar, on numerous occasions without a solicitor representing him.
We have sent through correspondence continually and submissions through to Mr xxx and it was ‑ and I would have to find the date, but it was a week or two ago, more than a week ago ‑ probably two weeks ago that Mr xxx indicated first to us that he was no longer representing or acting in the matter and we could not, therefore, get instructions from Mr xxx, nor Mr Katter and Mr Katter would not respond to any of our emails or communications. When we attempted to have discussions about what sensibly might be done about this matter, we received no response, despite calls, et cetera.
This is the first occasion that we have been notified that the first defendant is seeking this adjournment application.”
“The other point that I should make is that on numerous occasions when Mr Katter has sought to appear on behalf of Bitar, as a director without legal representatives, Black J has not permitted him to do so.”
“1. Direct that Bitar (‘Bitar’) cause to be filed and served a Notice of Appearance of a solicitor by 4pm on 30 April 2025.
- In default of the filing of a Notice of Appearance of a solicitor acting for Bitar by that date, Bitar not be heard in the proceedings unless and until such notice of appearance is filed and served.”
Mr Fernon of senior counsel, who appeared for the plaintiffs, adopted Mr Speed’s submissions and added that his client had paid $50,000 into court by way of security for costs in anticipation of the hearing and that the first defendant “through Mr Katter and through its counsel, have at all times known that this matter was listed for today. It is not correct for Mr Katter to say he didn’t know this was going on, because the matter has been listed for hearing for some considerable period of time during the course of proceedings in which he appeared.”
Mr Fernon continued:
“His Honour [Black J] I think in fact made an order in relation to the point that Mr Speed raised ‑ and Mr Katter has also been a party to emails in relation to directions and orders that have been made ‑ but his Honour made an order that Mr Katter not be entitled to appear on behalf of a company because the company required under the rules a solicitor to appear and no such solicitor ever did lodge an appearance and, therefore, Mr Katter was required to go off and obtain alternative representation. But there was an order in relation to the substantive proceedings which have caused these proceedings to be created that Bitar not be entitled to appear through Mr Katter.”
After hearing from the parties, I refused the adjournment. Mr Katter then produced an affidavit (MFI 1A) in which he, as sole director and shareholder of the first defendant, authorised himself to appear for the company. The affidavit had been prepared the day before (25 March 2026) but never sent to the other parties nor was any notice given to them of an application that would be made by Mr Katter either to seek an adjournment or seek leave to appear on behalf of the first defendant.
I refused the adjournment because:
No appearance had been filed on behalf of the first defendant.
No evidence or written submissions have been filed on behalf of the first defendant. The other parties would have been completely unaware of the case to be put by the first defendant.
The hearing date was set some time ago and obviously known to Mr Katter.
No evidence of a recent illness was provided by Mr Katter.
Mr Katter had a history of presenting “on the day” and stating he was not represented and required an adjournment.
His history included previously having at least 16 different lawyers acting for him, but none of them were retained in respect of the current matter.
Mr Katter initially stated that he had a barrister. The barrister told my associate he was not retained and told the other parties that he was not retained at least a week before the hearing.
Mr Katter was clearly aware of the possibility that an adjournment would not be granted as indicated by him preparing an affidavit on 25 March 2026, but then he did not serve it, or give any indication to the parties that he was seeking the adjournment or asking to appear on behalf of the company.
The plaintiffs had provided security for costs and, together with the second defendant, came to court ready and prepared for a hearing.
After refusing the adjournment the hearing continued and went into the following day (27 March 2026). Early on 27 March Mr Katter wrote to my Associate (copying in the other parties) again asking for an adjournment. In his email (MFI 1B) Mr Katter said that his “legal counsel was unable to attend”. Assuming this to be the same counsel he had earlier retained, this counsel had made it quite clear that he was not in fact retained.
In his email Mr Katter made some assertions concerning the involvement of the first defendant in the proceedings and its assistance to the second defendant. The other parties maintained their objections to the adjournment. Mr Speed disputed the assertions made by Mr Katter in his email. I could see no new reason to change the decision I had made the day before to refuse an adjournment. Accordingly, I refused Mr Katter’s second application.
On the second day of the hearing the plaintiffs stated they had made an open offer of settlement (of the costs appeal) to the second defendant. The second defendant was not able to promptly obtain instructions on the offer. When I reserved my judgment the plaintiffs and the second defendant asked me to hold preparation of the judgment in abeyance until 4pm on 31 March 2026. This was to enable the second defendant to obtain instructions on the plaintiffs’ open offer.
At 10.08am on 31 March 2026 Mr Katter emailed my Associate asking about the time I had allowed for the plaintiffs and second defendant to continue their negotiations. Then at 10.45am Mr Katter, obviously undeterred by earlier rulings, again emailed my Associate, this time asking “if he could forward documents in this matter relevant to Bitar.” My Associate responded telling Mr Katter that my refusal to allow him to participate in the proceedings remained in place and I would not consider any material that he sent.
There are 21 grounds of appeal. Central to the grounds are orders made by Black J on 25 June 2021, and then repeated in his judgment of 4 July 2021 (Hebbel Constructions Pty Ltd v Bitar Pty Ltd [2021] NSWSC 810)
Before setting out Black J’s orders, I think some background is necessary to the very long-standing dispute, primarily between the defendants. The two defendants, Hebbel Constructions Pty Ltd (Hebbel) and Bitar Pty Ltd (Bitar), entered into a partnership. I gratefully adopt this summary as to what ensued, given by Black J at [5]-[6] of the above judgment:
“5. By way of background, the Partnership developed a building comprising residential units and commercial shops in Petersham, New South Wales. By about October 2014, a dispute arose between Hebbel and Bitar in relation to the Partnership, a company named Hebbel & Bitar Pty Ltd (“HBPL”) and the development, which was the subject of subsequent proceedings in the Commercial List. On 4 July 2017, Rein J ordered that the Partnership be dissolved under s 35 of the Partnership Act 1892 (NSW) and appointed Mr Frisken as receiver of the Partnership’s assets and the shares in HBPL without security and with specified powers. Rein J also appointed a referee to determine several questions arising from the dissolution of the Partnership including the amount of monies owed by or to Hebbel and Bitar.
6. Bitar subsequently brought several applications, largely unsuccessful, in respect of conduct of the receivership. For example, by my judgment delivered on 25 May 2018 ([2018] NSWSC 758), I dismissed an application brought by Bitar for the discharge of Mr Frisken as the receiver appointed by the Court to the assets of the Partnership and the shares in HBPL and also declined to order an interim distribution which Bitar then sought to have made by the Receiver. By my judgment delivered on 8 June 2018 ([2018] NSWSC 859), I ordered that Bitar pay the Court-appointed receiver’s costs of and incidental to that motion on an indemnity basis, and also pay Hebbel’s costs of and incidental to the motion on the ordinary basis. By my further judgment delivered on 19 June 2018 ([2018] NSWSC 1089), I held that an attempt by Bitar to reagitate these issues by the exercise of liberty to apply was outside the scope of that liberty and declined to hear it. A successful application was subsequently brought by Hebbel in April 2019 which resulted in orders that the Receiver pay monies into Court and certain sums be paid out to Hebbel and Bitar respectively. The amount of $5.5 million has subsequently been paid to Hebbel and Bitar and into Court, pursuant to those orders from the realisation of Partnership property.”
In the summons now before the court, Mr Frisken is the first plaintiff. The second plaintiff (ACN 640 543 979 Pty Ltd but referred to as YBL) is the firm of solicitors that acted for the first plaintiff in carrying out his duties as a receiver and in related litigation.
Mr Frisken paid YBL for the services they rendered to him. He is seeking indemnity from the defendants for the amounts he paid. In this matter, the work done was described by Mr Frisken in his affidavit of 6 October 2020 in this way:
“29.71 Instructing YBL and Counsel in relation to my application filed 4 September 2019, for the passing of accounts and my remuneration.
29.72 Preparing application for passing of accounts and remuneration including my affidavit in support, and locating, collating and drafting supporting documents, preparing excel spreadsheets detailing work carried out on the Receivership and lists of payments and receipts, preparing accounts, carrying out extensive review of my affidavits and the file, communications and correspondence with Toni Mossman of DGT Costs Lawyers in relation to DGT expert reports, research of applicable case and statute law, considering draft reports of DGT.
29.73 Instructing YBL in relation to directions hearings in these proceedings and directions hearings in the associated Court of Appeal proceedings and considering updates from YBL in relation to directions hearings and tasking staff accordingly.
29.74 Preparing and updating chronology of work carried out on the receivership.”
The total amount paid by Mr Frisken to YBL for the above work was $549,536.90. The defendants asserted that this amount was unreasonable, so that it initially fell to Black J to adjudicate on the reasonableness of the claimed costs.
Mr Frisken, on the basis of undertakings he was prepared to give, proposed that the costs be assessed by a costs assessor.
Black J thought the proposal was sound and said at [43] and [45] in the judgment of 4 July 2021:
“43. By contrast, the proposal now put by the Receiver allows the reasonableness of the costs charged by YBL in this application to be determined, by a costs assessment in which Hebbel and Bitar will have the opportunity to be heard as third party payers, without incurring the costs of further hearing days in this application or the costs of reference to a Court-appointed referee. Importantly, that proposal is accompanied by an undertaking offered by the Receiver, and a further undertaking offered by the Receiver and Mr Amirbeaggi of YBL, which have the consequence that any determination that YBL has been overpaid will lead to repayment of the amounts overpaid to the Partnership estate. As I noted above, that result could not be achieved in this application, absent a cross-claim brought by the Receiver against YBL, a consequential change of solicitors and additional hearing time. For these reasons, I was comfortably satisfied that the approach proposed by the Receiver was of significantly greater advantage to the parties, including Hebbel and Bitar, than the alternative of continuing a determination of that issue in the Court.
…
45. I am satisfied that the Receiver is entitled to indemnity as to his disbursements, subject to the assessment process as to the Disputed Legal Costs and Disbursements (as deferred), and should be authorised to pay his approved remuneration and any unpaid disbursements apart from the Disputed Legal Costs and Disbursements from the Partnership assets the subject of the receivership.”
“1 Pursuant to UCPR r 26.5(2), the Court certifies the accounts filed by the Receiver apart from
a. the professional fees, excluding counsel’s fees, charged by the firm Yates Beaggi for the work described in the Invoices described in Schedule A to these Orders; and
b. the photocopying charges included in those invoices.
(the Disputed Legal Costs and Disbursements)
2 Pursuant to UCPR r 26.4, the Receiver be allowed remuneration for the period from 4 July 2017 to 23 June 2021 in the amount of $369,857.05 inclusive of GST.
3 Upon the Undertaking of the Receiver in the form of Annexure B to these orders, the Court Directs that the Receiver would be justified in paying his remuneration for the period from 24 June 2021 to the completion of the Receivership and his discharge from office in an amount calculated by reference to the same hourly rates as were applied in respect of the work the subject of the Determination in paragraph 2 above but capped, absent any further order of the Court, in the sum of $33,000 inclusive of GST.
4 The Receiver be authorised to pay his approved remuneration and any unpaid disbursements apart from the Disputed Legal Costs and Disbursements, from the partnership assets the subject of the receivership.
5 Upon the Undertaking of the Receiver and Farshad Amirbeaggi/Yates Beaggi in the form of Annexure C to these Orders, the Court gives a direction to the Receiver that he would be justified in paying, in respect of the Disputed Legal Costs and Disbursements, no more than the lesser of:
a. the sum determined upon an assessment of the Disputed Legal Costs and Disbursements which is conducted pursuant to Part 4.3 of the Legal Profession Uniform Law (NSW) 2014 on the solicitor and client basis and with each of the First Plaintiff and the First Defendant to be parties to that application on the basis that they are third party payers within the meaning of s 171 of that Law and that they would have the opportunity to identify and be heard as to any objections to those costs and disbursements in that assessment; or
b. such other amount as is agreed between the Receiver, the First Plaintiff and the First Defendant.
6 Upon payment of the remuneration, and the Receiver’s outstanding and estimated future legal expenses as identified in the Receiver’s affidavit of 24 June 2021, the Receiver is to pay the balance, if any, of the monies he holds on trust for the partnership into Court in these proceedings or as otherwise directed by the Court.
7 Pursuant to UCPR r 55.11, direct the sum of $373,789.48 from the funds paid into Court in these proceedings be paid out to the Receiver in partial satisfaction of his entitlement to remuneration pursuant to orders 2 and 3 above and his expenses other than the Disputed Legal Costs and Disbursements.
8 With effect upon compliance with the Order in paragraph 6 above, the Receiver forthwith be discharged from his appointment as the Receiver of the partnership between the Plaintiff and the First Defendant.
9 Daniel Frisken be released from any and all claims held by the Plaintiff and the First Defendant and their related parties (including in the case of the First Defendant, Mr Joseph Katter) whatsoever and howsoever arising from his appointment made pursuant to the Orders of 4 July 2017, unless such claim is instituted within three months of the date of this Order, or within such longer period as the Court may on application made before the expiry of that period allow.
9A. Without limiting the Receiver’s right to indemnity for remuneration and disbursements, the First Defendant pay the Receiver’s and the First Plaintiff’s costs of this application on an indemnity basis up to and including 26 April 2021, excluding the Receiver’s costs of the preparation of evidence as to his remuneration, as agreed or as assessed.
9B. Reserve the question as to whether any of the Receiver’s legal costs and disbursements incurred after 5 May 2021 should not be chargeable to the partnership estate.
10. Costs (other than costs prior to 27 April 2021 and costs as between Hebbel and Bitar) be otherwise reserved.
11. Reserve liberty to all parties to apply limited to:
(a) the determination of claims against the monies to be paid into Court;
(b) if an assessor declines to, or does not, conduct the assessment on the basis contemplated by paragraph 5(a).”
“4. Within 28 days of the making of the Orders to which this undertaking is attached I will file an application for assessment of each of the invoices identified in annexure A to these orders in accordance with Part 4.3 of the Legal Profession Uniform Law 2014.
- Within 28 days of the making of paragraph 5(a) of these orders, I will pay, or cause to be paid, on a without admission basis, the sum of $67,206.22 into a Controlled Monies Account to be held pending the outcome of the assessment as security for the payment of any amount pursuant to paragraph 1 of the undertakings given by me and Mr Amirbeaggi of the … (illegible) of this undertaking.”
An important element of the background is that a costs agreement (the Costs Agreement) was made between the plaintiffs on 10 July 2017. It seems to be in a standard form and sets out scales of fees and refers to various obligations of disclosure.
An initial estimate of fees was $750 plus GST. This related to a restricted “Scope of Work”. An updated schedule of fees was sent to Mr Frisken on 9 March 2018. On 7 April 2021, a further estimate of fees in the sum of $180,000 plus GST was provided to Mr Frisken and then followed, on 3 May 2021, with further estimates based on alternatives of a two-day hearing ($116,000 plus GST) and a three-day hearing ($135,000 plus GST). A final estimate was given on 17 June 2021 relating to a one-day hearing ($46,900 – $48,900 plus GST).
The costs assessment contemplated by Order 5 made on 25 June 2021 was carried out by Ms Dulhunty (the Assessor). The determination was delivered on 8 August 2022.
The claim before the Assessor was for the $549,536.90 stated above, being the costs said to lie within Schedule A (referred to in Order 1(a)). The Assessor assessed the costs in the sum of $271,375.50 plus disbursements of $2,304.06 (attributed to photocopying).
The plaintiffs were unhappy with the assessment. They said the Assessor had not assessed all of the invoices in Schedule A and the assessment had been made on the wrong basis. The Assessor had conducted her assessment on a quantum meruit basis because she found the Costs Agreement between the plaintiffs was void.
In addition, the plaintiffs complained, the Assessor had imposed a cut-off date of 5 May 2021 (derived from Order 9B of 25 June 2021), but this meant she did not assess those invoices in Schedule A which post-dated 5 May 2021.
Finally, the plaintiffs disputed the Assessor’s finding that YBL had not complied with its disclosure obligations under Pt 4.3 of the Legal Profession Uniform Law (NSW) (the LPUL).
“(a) Whether the definition of ‘Disputed Legal Costs and Disbursements’ to be assessed pursuant to order 5(a) of the orders dated 25 June 2021 includes the Receiver’s costs and disbursements referred to in annexure A to those orders which were incurred after 5 May 2021 (noting that order 9B expressly reserved ‘the question as to whether any of the Receiver’s legal costs and disbursements incurred after 5 May 2021 should not be chargeable to the partnership estate’).
(b) Whether the words ‘the sum determined upon an assessment … conducted pursuant to [Part 4.3] of the Legal Profession Uniform Law (NSW) 2014 on the solicitor and client basis’ in order 5(a) of the orders dated 25 June 2021 encompasses those costs being assessed on the ordinary basis” where the costs assessor is satisfied that the solicitor’s costs disclosure requirements in [Pt 4.3 Div 3] of the Legal Profession Uniform Law (NSW) 2014 (as it relates to third-party payers) has not been complied with so as to render void their costs agreement pursuant to s 178(a) of that Division.”
“It is clear that, as objectively construed, there is no inconsistency between order 5(a) and order 9B of the orders dated 25 June 2021. The first is directed to a matter which was referred to the assessment process, namely the amount of the ‘Disputed Legal Costs and Disbursements’, and the invoices which fell within that referral were all of the invoices listed in Annexure A, and extended further to any invoices issued following the hearing on 25 June 2021, which included a charge for work done in connection with the notice of motion filed by the Receiver. There is no basis, on the objective construction of the orders, to limit that order by order 9B of the orders, which was directed to an entirely different question, which was a matter reserved for the Court and not referred to the assessor, as to the extent to which such legal costs and disbursements incurred after 5 May 2021 should not be chargeable to the partnership estate.”
“The second issue of construction in dispute between the parties, at least as the Review Panel understands the position, is whether the words ‘the sum determined upon an assessment ... conducted pursuant to Part 4.3 of the Legal Profession Uniform Law (NSW) 2014 on the solicitor and client basis’ in order 5(a) of the Court's orders require those costs to be assessed on the ordinary basis where the costs assessor is satisfied that the solicitor's costs disclosure requirements in Div 3 of Pt 4.3 of the Legal Profession Uniform Law (as it relates to third-party payers) has not been complied with so as to render void their costs agreement pursuant to s 178(1) of that Division.
I have not neglected the fact that Mr Langshaw submits that Hebbel has not put that position to the costs assessor, or at least has not put that position to the Review Panel, and accepts that it is incorrect, so that, Mr Langshaw contends, there is now no dispute between the parties about the fact that that is not the position. Obviously, that submission does not explain how it is that the Review Panel now seeks to require a clarification of that matter, or understand that issue to be in dispute before it.
I should first note that Hebbel makes clear that it does not now contend that costs should be assessed other than on the ordinary basis, even if the costs assessor is satisfied of the matter noted above. Nonetheless, it seems to me to be appropriate to determine the objective construction of the Court's orders, where there appears to have been a dispute as to this issue which has troubled the costs assessor and now troubles the Review Panel.
The Court's order, objectively construed, required that costs should be determined on the ordinary basis, and there was no qualification or reservation to that order to permit that question to be further agitated before the costs assessor. I note, first, that that order was made by the consent of the parties, where they had the opportunity to contend to the contrary before the Court. The parties are bound by that order and there is no ambiguity in it or room to revisit it in any other forum.
Second, as now appears to be common ground between the parties, Hebbel, and for that matter Bitar, were each not a third-party payer in relation to a client of a law practice for the purposes of s 171 of the Legal Profession Uniform Law, because neither Hebbel nor Bitar was at any point under a legal obligation to pay all or any part of the legal costs for the legal services provided to the client, namely the Receiver. They also could not have already paid any part of those legal costs under such an obligation, because such an obligation to pay did not exist. Mr Langshaw accepts that Hebbel was also not ‘an associated third-party payer’ for the purposes of s 171(b) of the Legal Profession Uniform Law. At the time the costs agreement was entered into between the Receiver and his solicitors, Hebbel and Bitar were under no obligation in respect of the legal costs for the legal services provided, because any obligation of any kind arose only from the Court's later determination that the Receiver was entitled to indemnity as to those costs.
Third, as Mr Golledge rightly points out, Hebel or Bitar were never under a positive legal obligation to pay all or any part of the legal costs, because what was established by my judgment was only a right of indemnity against the assets of the partnership for those costs. To the extent that those assets were insufficient to meet that right of indemnity, the Receiver had no right against or recourse against HebbeI or Bitar for those costs.
Fourth, order 5(a) made by the Court on 4 July 2021 and the further clarification of that order provided by my extempore judgment on 25 October 2021, was objectively directed to recognising a right to be heard on behalf of the third parties, and not to conferring substantive rights that they did not, in law, have under s 171 of the Legal Profession Uniform Law. It may be that, as Mr Golledge now points out, the same result could have been achieved more neatly by those orders in different form, rather than the orders to which the parties then consented. I would likely vary the orders, if it ultimately becomes necessary in order to avoid any waste of the work and costs incurred in the assessment to date.
At this stage, it seems to me that, particularly where Hebbel makes clear that it does not contend for the position that costs be assessed other than on the ordinary basis, which has caused difficulty in the assessment and in the Review Panel, no more is required than to determine the proper construction of the orders which have previously been made, as I have done above.”
Armed with Black J’s clarifications, the Review Panel conducted its review and issued a Certificate of Determination on 17 February 2025. The Review Panel assessed costs after 5 May 2021, thereby raising the assessed costs to $364,266.76, but say the plaintiffs, made its assessment on the wrong basis.
The plaintiffs allege the Review Panel, like the Assessor, erroneously considered the disclosure obligations of YBL, found they had not been met, voided the Costs Agreement, and then assessed costs on a quantum meruit basis.
In other words, the Review Panel correctly assessed costs after 5 May 2021 but then incorrectly assessed them according to the wrong scale.
“However, they all primarily concern the Review Panel’s determination that YBL had disclosure obligations, had waived its rights to not give disclosure, and therefore the costs should be assessed on the party / party quantum meruit basis and not on the solicitor/ client and indemnity basis. These issues arise from Appeal Grounds 1-5, and 13-15. Should these appeal Grounds be upheld, then it is clear the costs need to be reassessed, and the remaining Appeal Grounds fall away.”
The issues were further refined during the hearing, to the following:
The relevance of apparent changes of ownership of YBL.
Which sections of Pt 4.3 of the LPUL were applicable?
If s 172(4) of the LPUL was applicable, would the apparent conditions to the presumption of costs prevent the use of the presumption?
The relevance of the Costs Agreement; was it open to be found void, and if ‘Yes’, what were the consequences?
Charges for photocopying.
The proper utilisation of 6-minute time blocks.
Is a ‘broad brush’ finding available?
Some matters which initially presented as issues, but were actually ‘red herrings’, were:
That the Assessor and the Review Panel conducted their quantum meruit assessments on a party-party basis and not on a solicitor-client basis.
That the whole of Pt 4.3 of the LPUL applied to the assessment as opposed to only Div 7 and the sections incorporated by this division.
The second plaintiff in the summons is named as ACN 640 543 979. The tax invoice rendered by YBL on 17 September 2019 lists an ACN of 627 087 030 Pty Ltd. The tax invoice dated 13 July 2021 has an ACN of 640 543 979 Pty Ltd
Close examination of the foot of the Costs Agreement refers to “Strut Master No 2 Pty Limited ABN 54 278 630 521 trading as Yates Beaggi Lawyers”. This company is apparently no longer trading, and Yates Beaggi Lawyers became the trading name of a different company. Justice Rothman, dealing with, inter alia, an application to file further evidence, said (in Frisken v Bitar Pty Ltd [2026] NSWSC 10 at [35]:
“The second plaintiff, as previously stated, no longer trades but was previously trading as the law practice of Yates Beaggi Lawyers. The evidence before the Court is that the company now trading as Yates Beaggi Lawyers is a different company from the second plaintiff in these proceedings and that different company is generating significant annual profits. There is no suggestion that the second plaintiff, who is not trading, is generating profits or has assets. Indeed, the contrary is the case as inferences available from the evidence discloses.”
The second defendant’s point was simple. The company that made the Costs Agreement was different to the company that rendered some of the tax invoices and different to the company now appearing as the second plaintiff. Therefore, the second plaintiff could not assert it was a party to the Costs Agreement and, in turn, could not claim any benefit from the Agreement’s terms.
Theoretically the point may be sound, but it has this problem. This is an appeal from a decision of the Review Panel which heard a review of the Assessor’s decision. The point about ownership of YBL was never taken before the Assessor or the Review Panel.
In McInnes v Rheem Australia Pty Ltd [2021] NSWCA 89 Gleeson JA, in the Court of Appeal stated at [44]-[45]:
“44. It is trite that a party is bound by the case he or she ran below. As the High Court said in University of Wollongong v Metwally (No 2*)* [1985] HCA 28; (1985) 59 ALJR 481 at 483, in the context of an application to reopen a case following judgment:
It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had and (sic) opportunity to do so.
45. It would be inimical to the interests of justice to allow Ms McInnes to make an entirely new and different costs application on appeal, after having failed on a different basis before the primary judge: Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631 at 645-646; Water Board v Moustakas (1988) 180 CLR 491 at 487; [1988] HCA 12. Ms McInnes should be precluded from seeking to rely on proposed ground 2.”
The constitution of YBL being raised before Rothman J does not cure its absence from either of the assessment proceedings from which the summons is an appeal. There was no suggestion that the point could not have been taken in either of the assessment proceedings.
I therefore reject the second defendant’s reliance on this issue.
"If you go through our submissions, your Honour, you will note that all we look at is the provisions of division 7 and the ones that have specifically been referred to. We don't refer to any other sections, we only refer to section 172(4) and refer to section 174 and 178 which are the division 3 ones that have been brought in by 172(4) so I think we are at idem as to which the provisions are but they were all referred in.”
(1) In considering whether legal costs for legal work are fair and reasonable, the costs assessor must apply the principles in section 172 so far as they are applicable.
(1) A law practice must, in charging legal costs, charge costs that are no more than fair and reasonable in all the circumstances and that in particular are—
(a) proportionately and reasonably incurred; and
(b) proportionate and reasonable in amount.
(2) In considering whether legal costs satisfy subsection (1), regard must be had to whether the legal costs reasonably reflect—
(a) the level of skill, experience, specialisation and seniority of the lawyers concerned; and
(b) the level of complexity, novelty or difficulty of the issues involved, and the extent to which the matter involved a matter of public interest; and
(c) the labour and responsibility involved; and
(d) the circumstances in acting on the matter, including (for example) any or all of the following—
(i) the urgency of the matter;
(ii) the time spent on the matter;
(iii) the time when business was transacted in the matter;
(iv) the place where business was transacted in the matter;
(v) the number and importance of any documents involved; and
(e) the quality of the work done; and
(f) the retainer and the instructions (express or implied) given in the matter.
(3) In considering whether legal costs are fair and reasonable, regard must also be had to whether the legal costs conform to any applicable requirements of this Part, the Uniform Rules and any fixed costs legislative provisions.
(4) A costs agreement is prima facie evidence that legal costs disclosed in the agreement are fair and reasonable if—
(a) the provisions of Division 3 relating to costs disclosure have been complied with; and
(b) the costs agreement does not contravene, and was not entered into in contravention of, any provision of Division 4.
The plaintiffs’ argument was as follows:
Under s 172(4) of the LPUL the costs regime in the Costs Agreement was prima facie evidence that the regime was fair and reasonable.
The proviso in s 172(4)(a) did not apply because the provisions of Div 3 relating to costs disclosure were not applicable to Mr Frisken because he was a Receiver. This is a product of s 170(2)(ii) of the LPUL.
Therefore, the Review Panel should not have found that the Costs Agreement was void because of a failure in the obligations of disclosure by the law practice to Mr Frisken and should have treated the costs regime in the Costs Agreement as prime facie evidence that the regime was fair and reasonable. The Assessor and the Review Panel were in error in applying a quantum meruit scale and in ignoring the presumption stated in s 172(4) of the LPUL.
The plaintiffs submitted that the errors described in the previous paragraph are evident from the Review Panel’s reasons, in particular as expressed in the following paragraphs:
“75 The Assessor and the Review Panel have conducted the assessment by determining what are fair and reasonable costs in accordance with the provisions of Part 4.3 LPUL which applies to legal costs payable on a solicitor-client basis.
76 The Assessor took the view that the Receiver and YBL purported to contract out of the provisions of s170 of the LPUL and then determined that the costs agreement was void because of the failure to comply with the disclosure requirements. The issue of quantifying the costs was before the court in the 2021 hearing. It is apparent that the court was aware that the fact that the Receiver was a commercial client prevented the costs being assessed by the Supreme Court scheme. The judge said that it was sought to avoid the costs of the court or a court appointed referee determining the quantum. That led to order 5.a. The court did not qualify the order nor specify whether any provisions of Part 4.3 were excluded nor is it for the Assessor or Panel to speculate on that issue,
77. Black J was aware that the Receiver was a commercial client and ordered that Part 4.3 was to be applied. Neither the 2021 orders nor the 2023 judgment said that only some provisions of part 4.3 applied. His Honour did not qualify the application of Part 4.3 by excluding the disclosure provisions nor order that the provisions relating to the disclosure etc were to be disregarded by the Assessor. If the whole of Part 4.3 applies, then the disclosure provisions apply. If the disclosure requirements apply, they were breached as determined by the Assessor and the costs agreement is void. The Panel determines that the costs are to be assessed on the quantum meruit.”
Error by the Review Panel is I think evident from para 77 of its reasons. The referral by Black J was for an assessment under Pt 4.3 of the LPUL. It is Div 7 of the LPUL that deals with a “Costs assessment”. It is to be recalled that the referral for the assessment was effectively a “mechanism” engineered to refer the detailed assessment to the costs assessors.
The Review Panel assumed the whole of Pt 4.3 was applicable, including the disclosure provisions. But that is not correct because, as seen above, receivers are exempted from the disclosure provisions.
The second defendant endeavoured to bring the disclosure provisions back into play by reference to the first condition in s 172(4) of the LPUL, namely the requirement that the Costs Agreement is only prima facie evidence of being fair and reasonable if “the provisions of Div 3 relating to costs disclosure have been complied with …” The second defendant submitted that this condition was to be applied regardless of whether or not the disclosure provisions were otherwise not applicable because Mr Frisken was a Receiver. This was a plain reading of s 172(4).
The plaintiffs described the second defendant’s response as “nonsense”. The plaintiffs submitted that the condition was simply inapplicable because the costs disclosure requirements under Div 3 did not apply as Mr Frisken was a Receiver. If Div 3 did not apply because of s 170(2)(ii) of the LPUL, then there had not been an obligation for disclosure and there was nothing to comply with under s 172(4)(a).
While I do not accept the plaintiffs’ description of the second defendant’s argument as being “nonsense”, I do agree with the plaintiffs’ interpretation of s 172(4). If the disclosure obligations were not applicable to the Costs Agreement, then I cannot see how they could be brought back in by the condition in the subsection. The exemption created by s 170 of the LPUL (for receivers) meant there were no cost disclosure provisions to be complied with.
It follows that I am of the view that the Assessor and Review Panel were in error in not giving effect to the presumption provided by s 172(4) and in finding that the Costs Agreement was void.
The next point to be considered under this heading is whether there had been a waiver by the plaintiffs of the exemption provided by s 170 of the LPUL. The Costs Assessor made this finding:
“Nevertheless the 1st Respondent [YBL] has provided a costs agreement and disclosure document to the Applicant so appears to have waived its right not to be subjected to the majority of the provisions in Part 4.3 of the LPUL. Order 5a of the orders of the Supreme Court of NSW also specifically orders the assessment to be conducted under Part 4.3 of the LPUL.”
“78. What has occurred in this instance is that YBL issued a Costs Disclosure document in which it undertook to provide updated costs estimates and conferred other rights on the Receiver. It failed to do so. The Panel agrees with the Assessor that YBL, in issuing the disclosure documents, in circumstances when it was not obliged to, waived its protections, and then failed to comply with its own undertakings to the client.”
The Costs Agreement is clearly a standard form document which includes the ‘usual’ disclosure terms. It makes no mention of being specifically tailored to the client being a receiver. The reasoning of the Assessor and the Review Panel is that simply because the agreement contains disclosure terms, and there were some disclosures, that the exemption from disclosure obligations was necessarily waived.
I disagree. As stated by the plaintiffs, there must be a “clear and unequivocal statement of waiver and there is no such thing in the costs disclosure agreement”.
In Wiltrading (WA) Pty Ltd v Lumley General Insurance Ltd (2005) 30 WAR 290; [2005] WASCA 106, the Western Australia Court of Appeal, after a discussion of the law of waiver said, at [50]:
“Whatever may be the position as regards the current operation of the doctrine of waiver, and whether the issue is looked at as one of election or waiver (although, because the discharge from liability is automatic, there seems to be no election to make, only a decision whether or not to treat the policy as having revived: see Clarke, at 516), it follows from the authorities to which I have referred that there must, at least, have been an unequivocal act with knowledge of the relevant facts.”
The waiver found in the present case by the Assessor and the Review Panel is drawn from an inference that because the Costs Agreement includes disclosure terms it must follow that exemption from disclosure has been waived. I do not think an inference meets the requirements of “an unequivocal act with knowledge of the relevant facts.”
Accordingly, I am again of the view that the Review Panel (and the Assessor) fell into error.
Although I think the findings I have made above are sufficient to allow the appeal, I will deal briefly with the remaining issues.
The plaintiffs complained that there was a “write-down” of photocopying charges by the Review Panel from $1 per page to about 20c per page.
It is difficult for me to assess the correct cost of photocopying. However, the approach I intend to take obviates the need to make an assessment. I will make no further comment on photocopying.
The Costs Agreement allows charging according to six-minute blocks. The issue is not the use of the blocks but rather whether different actions taking less than six minutes should be included in a block or can be the subject of separate blocks. The point is best illustrated with an example. If the solicitor makes three consecutive telephone calls to different persons, each of two minutes in duration, can the solicitor charge three lots of six-minute blocks or only one six-minute block because the total time spent on the phone calls was six minutes.
Senior Counsel for the plaintiffs’ said in submissions in reply:
“My learned friend yesterday made the point ‑ and it is a fair point, your Honour, I accept this ‑ that if a law firm has a phone call at minute one and another phone call at minute two, another phone call at minute three, minute four, minute five, minute six so six phone calls it shouldn't be entitled to charge for 36 minutes and that's because a whole series of work was done within that six minute unit.”
“So what has been done is that they have reduced or just excluded completely the six minute unit obligation as part of the costs disclosure agreement and just simply said, well, we say it is three minutes and then I will just exclude, forget about what is in the costs disclosure agreement, I decide it is fair and reasonable without one iota of consideration of the operation of the costs disclosure agreement and the reason why they do that is because they said it is irrelevant, it is void so they fail in their statutory obligation in relation to that particular paragraph and by the review panel just adopting it they take all the sins with it.”
As I understand the complaint it is not so much the theoretical approach to six-minute blocks but rather the Assessor and Review Panel ignoring the Costs Agreement.
Once again, the remedy I intend to impose does not contemplate a precise answer. It seems apparent anyway that the parties generally agree on the approach to be taken to the 6-minute blocks.
“My client is 90 years old, and just so that your Honour understands, this is a partnership dispute; there is money locked in Court that belongs to the partnership that cannot be distributed pending this dispute; there is costs money locked in the District Court that is given as a security for costs that cannot be paid until this dispute is determined.
So my client's position is whatever it takes to get it done and get rid of it as soon as possible so that we don't have it dragging on because it has been held out of that money and that money is, that is what is driving us being here today. If it was simply about the difference between the solicitors' rates, etc, we have made offers and we can make those public in relation to getting rid of those parts of it.
If it was simply the difference between Mr Beaggi's $700 and $600 we would not be here, it's not worth those costs to us. Particularly from my client's perspective it is not worth being here in circumstances where for most of these costs there's an indemnity costs order against the first defendant, so not the second defendant. So, most of the costs we are fighting about today relate to, will ultimately be paid on an indemnity costs order by the second defendant.
“So therefore in terms of answering directly your question, your Honour, which was what would be the orders that we would be seeking, in those two circumstances we would be seeking at worst case scenario it goes back to the review panel, so remit it back to the review panel rather than to some new costs assessors which would take a long process and may have the same problems, or alternatively much preferably, and we will try to suggest a course that can be done without your Honour having to go through numbers and crunching things or without having to go through individual items, how your Honour could deal with it on a sort of just, equitable basis in the sense of a broad brush approach in terms of the numbers that are outstanding in this dispute, I think it is common ground that the difference between what they are claiming and the difference between what the review panel has given, which we have accepted, we have not challenged ‑ in fact we didn't challenge the first initial assessment ‑ is $185,000.” (Underlining added).
I suggested to the parties, that in order to meet their anxieties and hasten the end of the litigation, they might like to resolve their differences about the assessment. I suggested, but only as an example, that splitting the difference between the assessment and the plaintiffs’ claim might be one way to proceed.
The parties obviously considered my suggestion, leading to an open offer being made by the plaintiffs to the second defendant, that $78,861.98 (inclusive of GST) be paid, or returned to, the partnership assets. The offer had these further two conditions:
“The second aspect of the open offer is that the certificate of determination as to costs by the costs assessor be set aside with a view that the defendants will meet those costs, as they have already done, that each party is to bear their own costs of this appeal and all the remaining costs in the proceedings before Justice Black, that's the third item of the offer, and if that is accepted then the parties would advise his Honour Justice Black that the matter has been resolved as between the parties, so that is the offer put on an open basis.”
Mr Speed, reasonably, was not in a position to respond to the open offer and requested that I delay preparation of my judgment until 4pm on 31 March 2026.
The open offer was not accepted, so that I now return to whether or not I can take the suggested broad-brush approach.
My initial reaction was that I did not think I could responsibly do so. It is one thing to suggest that parties split the difference but that is entirely different to me effectively guessing a figure which might be described as a fair and reasonable result. To reach such a figure would require the type of analysis, if only at a basic level, that is normally conducted by costs assessors.
On the other hand, if the matter returns to the Review Panel:
There will be another lengthy delay, both waiting for the review and then the matter going back to Black J for finalisation of the partnership dispute.
The Review Panel will charge for its services. The Review Panel’s costs for the completed review were $54,580.35.
The parties will incur the costs of the preparation for and presentation of the review.
The difference between the claim is relatively small; $549,536.90 - $364,266.76 = $185,270.14.
I strongly suspect the total costs associated with another review will exceed $185,000.
The open offer made by the plaintiffs primarily involved $78,861.98 being returned to the partnership. This figure is not far from half the difference between the claim and the assessment ($92,635.07).
Section 89(2) of the LPULAA gives the Court “all the functions of the review panel.”
Section 85 of the LPULAA dictates the conduct of a review panel. It states:
(1) A review panel may, on an application made under section 83 or 84, review the determination of a costs assessor and may—
(a) affirm the costs assessor’s determination, or
(b) set aside the costs assessor’s determination and substitute the determination that, in its opinion, should have been made by the costs assessor.
(2) The review panel has, in relation to the application for review, all the functions of a costs assessor in relation to the assessment concerned and is to determine the application, subject to this Part and the costs assessment rules, in the manner that a costs assessor would be required to determine an application for costs assessment.
(3) Without limiting subsection (2), the review panel is not bound by the rules of evidence and may inform itself on any matter in the manner it thinks fit.
(4) If the costs assessors who constitute the review panel are unable to agree on a determination in relation to an application, the panel is to affirm the determination of the costs assessor.
(1) Subject to subsections (2) and (3), this section applies to an appeal to the Court and to an appeal in proceedings in the Court.
(2) This section does not apply to so much of an appeal as relates to a claim in the appeal—
(a) for a new trial on a cause of action for debt, damages or other money or for possession of land, or for detention of goods, or
(b) for the setting aside of a verdict, finding, assessment or judgment on a cause of action of any of those kinds,
being an appeal arising out of—
(c) a trial with a jury in the Court, or
(d) a trial—
(i) with or without a jury in an action commenced before the commencement of section 4 of the District Court (Amendment) Act 1975, or
(ii) with a jury in an action commenced after the commencement of that section,
in the District Court.
(3) This section does not apply to—
(a) an appeal to the Court under the Crimes (Appeal and Review) Act 2001, or
(b) to a case stated under the Criminal Appeal Act 1912.
(4) This section has effect subject to any Act.
(5) Where the decision or other matter under appeal has been given after a hearing, the appeal shall be by way of rehearing.
(6) The Court shall have the powers and duties of the court, body or other person from whom the appeal is brought, including powers and duties concerning—
(a) amendment,
(b) the drawing of inferences and the making of findings of fact, and
(c) the assessment of damages and other money sums.
(7) The Court may receive further evidence.
(8) Notwithstanding subsection (7), where the appeal is from a judgment after a trial or hearing on the merits, the Court shall not receive further evidence except on special grounds.
(9) Subsection (8) does not apply to evidence concerning matters occurring after the trial or hearing.
(10) The Court may make any finding or assessment, give any judgment, make any order or give any direction which ought to have been given or made or which the nature of the case requires.
The important subsection is (10), and especially the words “The Court may … give any judgment ... which the nature of the case requires”.
I think this appeal almost demands a resolution which does not involve the matter being remitted to the Review Panel. Such an approach is also consistent with facilitating a “just, quick and cheap resolution’ of the dispute, as required by s 56 of the Civil Procedure Act 2005 (NSW).
Adopting the above sentiments, the question then arises as to what figure should be substituted for the Review Panel’s assessment. I first thought splitting the difference would be a fair approach, but on reflection I do not think that would adequately reflect the plaintiffs’ success in the summons. Therefore, recognising that the Review Panel would at least have a presumption in favour of the Costs Agreement scales, but factoring in that these scales are only a presumption and not a certainty, and also that items such as photocopying and the six-minute block issue could lead to a decrease in the assessment, I think a final figure of $475,000 is appropriate.
In relation to the costs of the summons, the plaintiffs have succeeded in overturning the Review Panel’s assessment, but the second defendant has succeeded in achieving a result not involving remittal to the Review Panel. I think a fair approach is that taken by the plaintiffs in the open offer, namely that each party bear its own costs of the appeal.
I think it appropriate to only amend the assessment of the Review Panel but not the costs order made in respect of the review, which I understood has already been paid.
I make the following orders:
The appeal is allowed.
The amount determined in the Certificate of Determination of Review dated 17 February 2025 is set aside.
In lieu of the figure assessed in the Certificate of Determination of Review, the amount to be determined in the assessment is $475,000.
The Certificate of Determination of Review Panel Costs dated 17 February 2025 is confirmed.
Each party is to pay its own costs of the summons.
The plaintiffs and the second defendant have leave to request any further orders, consistent with these reasons, to assist in the progress of any related proceedings.
**********
Para 31 "parties" changed to "plaintiffs"
spelling error corrected
Friskin
Bitar Pty Ltd
(2005) 30 WAR 290
(1985) 59 ALJR 481
(1997) 47 NSWLR 631
(1988) 180 CLR 491