Frumar v The Owners of Strata Plan 36956

Frumar v The Owners of Strata Plan 36956 - [2006] NSWSC 224 - NSWSC 2006 case summary — Zoe

[19]

(ii) if the panel determines that a term of a costs agreement is unjust, the basis for doing so, (iii) a statement of any determination under section 208E of the Act that interest is not payable on the amount of costs (or any part of the amount) assessed, or, if payable, of the rate of interest payable . (2) A statement of reasons to which this clause applies may be accompanied by such further information as the costs review panel concerned considers is necessary to clarify the review of a costs assessor's determination." 14 As Burchett AJ in Cachia v Colaco [2004] NSWSC 1043 [5] stated: "It will be seen at once that reg 68 distinguishes, in expressing the obligation of the panel in relation to the reasons it gives, between "disbursements" and "costs". In respect of disbursements, as well as stating "the total amount of disbursements determined to be fair and reasonable", the panel is required in terms only to set out "each disbursement varied by the determination". But, as regards costs, the panel's determination must be accompanied by information complying with para (1)(d), that is to say: in respect of any disputed costs, an explanation of: (i) the basis on which the costs were assessed, and how the submissions made by the parties were dealt with." 15 Further Master Malpass stated in Madden v NSW IMC [1999] NSWSC 196 at [16] and [17]: "Since the decision of Attorney-General of NSW & Anor v Kennedy Miller Television Pty Ltd (1997-1998) 43 NSWLR 729, there is binding authority that a costs assessor should provide reasons. The Court has been referred to authorities containing dicta concerning the matter of what will discharge an obligation to give reasons (including Kennedy Miller and Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247). It must be borne in mind that the Court is dealing with a decision made by a costs assessor and not a judicial officer. Many of the cases concern the discharge of the duty owed by a judicial officer. In the cases, observations have been made as to what is required of a decision maker. It has been said that lengthy or elaborate reasons are not required; in most cases, a word or two may suffice and it is necessary that the essential ground upon which the decision rests should be articulated. Whilst there is a plethora of dicta, it may be that ultimately the question has to be dealt with on a case by case basis.

[24]

21 The solicitor at [11] in his document entitled "Grounds for making the application [sic] for review" said: "Notwithstanding Objections raised by the Applicant as to the relevance, appropriateness, excessiveness, fairness and reasonableness of many items of both professional costs and disbursements, most of which appear to have been disregarded or rejected by the Costs Assessor without reference, reason or justification, in respect of one of several Objections relating to Counsel's fees being Item 636, although the Applicant drew to the Costs Assessor's attention the discrepancy of $7,000 between Counsel's fee note of 9 September 2002 in the sum of $2,000 which had been produced and the Respondent's Bill of Costs seeking recovery for this Item in the sum of $9,000, the Costs Assessor determined this disbursement to be excessive and 'not included in the Bills provided' whereas comparison with the actual fee note would have revealed the error and falsity of this finding. Alternatively, perhaps the Costs Assessor intended that his finding of an excessive sum should have been applied to another Objection of the Applicant relating to Items 627-631 inclusive of the Respondent's Bill of Costs in respect of which the Applicant submitted that, at Counsel's hourly rate of $250, his fees of $4,500 for preparing submission between 27 March 2002, the 8th day of the trial, and 29 April 2002, the 9th day of the trial, over the course of 5 separate days constituted 18 hours and did appear to be excessive, unfair and unreasonable." 22 In response, the Review Panel stated: "Notwithstanding the language used by the Costs Assessor in his reasons it is clear to the Review Panel that the total sum of $9,000.00 was disallowed as being excessive preparation. As to the balance of the ground for review the Review Panel does not propose to speculate on what was in the mind of the Costs Assessor. In relation to disbursements however, the Review Panel was of the mind that 7.5% of assessed costs is a fair and reasonable amount to allow to the cost consultant engaged by the Review Respondent. Accordingly Item 717 is reduced by $2,649.20." 23 The Review Panel set out each disbursement varied by the determination - see Cachia. 24 At the outset the Review Panel stated at [3.3] "Section 208KC(2) of the Act provides the Review Panel with all of the functions of an assessor and requires the Review Panel to review an application in thew same manner as an Assessor would be required to determine an application for assessment,"

[25]

and at [3.5], quoting Master Malpass in Kells v Mulligan & Anor [2002] NSWSC 769, "the function of the panel is to conduct a review (as opposed to entertaining an appeal)" 25 At [5.1] the Review Panel stated: "Having carefully considered all the relevant matters the Review Panel is of the view that the fair and reasonable costs of the Review Respondent is the sum of $122,802.67." This amount includes the total amount of disbursements. 26 This statement will suffice. 27 The plaintiff's counsel also submitted that the plaintiff, a solicitor, could not work out how the Review Panel assessed the professional costs because, that if one examined the bill, the partner whose charge out rate was allowed did not carry out the majority of the work. 28 In relation to hourly rates the Costs Assessor said: "This is a matter where I think that the best method of assessment is to assess an overall fee for professional costs. I assess that fee as $65,000.00 or about 215 hours at the partners hourly rate." 29 The Review Panel said: "The Review Panel accepts that the Costs Assessor refers to his assessment of the professional costs at $65,000.00 or about two hundred and fifteen hours (215) of the partners' hourly rates. Having regard to this ground the Review Panel conduced its own assessment and finds that in all the circumstances a fair and reasonable amount of costs would be the sum of $63,833.00." 30 The Review Panel was to explain the basis upon which the professional costs were assessed. It did so. It is my view that the Review Panel provided adequate reasons. 31 None of the issues raised, namely firstly, the assessment of disbursements, or secondly, the calculation of professional fees and thirdly, the cross claim costs merit leave being granted under s 208M of the Act. 32 Leave to appeal is refused. The appeal is dismissed. The decision of the Costs Review Panel dated 31 August 2005 is affirmed. The summons is dismissed. 33 Costs are discretionary. Costs normally follow the event. The plaintiff is to pay the defendant's costs as agreed or assessed.

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