Giuseppe Portale v Law Society of New South Wales

Uniform Civil Procedure Rules 2005 P28 LEGISLATION CITED: Legal Profession Act 2004 s 4, s 382, s 384, Sch 9 Legal Profession Act 1987 P10

PARTIES: Giuseppe Portale Law Society of New South Wales

SOLICITORS: Mr Portale in person Mr Pierotti for the defendant

1. The Law Society took proceedings against Mr Portale in the Administrative Decisions Tribunal ("ADT"). The Law Society eventually won the case. Mr Portale, who was a solicitor, was struck off the role and the ADT ordered Mr Portale to pay the Law Society's costs.

2. Some years passed before the Law Society sent its bill to Mr Portale which Mr Portale disputed. Accordingly, the Law Society followed the procedure of applying to have the costs assessed. However, between the costs orders made by the Administrative Decisions Tribunal ("ADT") and the assessment the law had changed.

3. Mr Portale argues that one of the changes in the law was that the definition of costs had changed and the Law Society could no longer recover its costs. Whether that argument is correct is the essential question for me to determine this morning.

4. The proceedings which I am asked to determine were commenced on 9 June 2009 by Mr Portale issuing a summons as plaintiff, naming the Law Society of New South Wales as the defendant. After hearing the case on 9 February 2010 it was agreed that under P28 of the Uniform Civil Procedure Rules I would make an order for the decision of some questions separately from other questions. It was agreed that I would determine as separate questions the grounds of appeal set out numbered 1 and 2 in Mr Portale's summons. Ground 1 reads as follows: " 1. The Costs Assessor and Costs Review Panel erred in law with regard to the definitions of 'legal costs', 'law practice' and 'legal services' contained within s 4 of the Legal Profession Act 2004." Ground 2 reads as follows: " 2. The Costs Assessor and Costs Review Panel erred in law in still applying Commonwealth Bank of Australia v Hattersley (2001) 51 NSWLR 333, an authority which has been specifically overwritten by definitions of 'legal practice' and 'legal costs' within s 4 of the Legal Profession Act 2004."
5. The legislation which was the subject of change was the Legal Profession Act 1987 - I will refer to it as the 1987 Act - which applied at the time that the proceedings were brought by the Law Society in the ADT against Mr Portale. That Act was repealed by the Legal Profession Act 2004, which I will refer to as the 2004 Act.

The material events which I will record are these. The Law Society filed an information in the ADT on 24 February 2000. That was under the 1987 Act. On 4 May 2001 the ADT ordered Mr Portale's name to be removed from the roll of legal practitioners. It also ordered on the same day that he pay the costs of the Law Society. Mr Portale lodged an appeal which was heard by an Appeal Panel of the ADT. That Appeal Panel published its decision on 7 March 2003. It granted some relief to Mr Portale and there was a rehearing by a differently constituted Appeal Panel which, after a hearing, ordered that Mr Portale's name be struck off the roll and ordered him to pay costs. That order was made on 20 November 2003.

It was not until 2008 that the Law Society sought payment of its costs which had been ordered by the ADT and the Appeal Panel. It forwarded its bills to Mr Portale with a letter dated 10 June 2008. Itemised bills were sent under cover of a letter 5 September 2008. Mr Portale objected to both itemised bills and the Law Society applied for an assessment of its costs. The costs assessor made a determination and issued a certificate. Mr Portale asked for the determination to be reviewed and it was accordingly reviewed by a panel of two assessors which generally affirmed the decision of the costs assessor.

It is from the determination of the review panel that Mr Portale appeals to this Court under s 384 of the 2004 Act. That section provides that a party who is dissatisfied with a costs assessment "as to a matter of law arising in the proceedings to determine the application may, in accordance with the rules of the District Court, appeal to the Court against the decision". Section 382 of the 2004 Act provides that s 384 applies in relation to the determination of a review panel as well.

The matters of law which are for determination by me at this stage as separate questions are those which I earlier identified as listed as grounds 1 and 2 in Mr Portale's summons.

I will turn now to determine those questions of law. It seems to me that the first question is which legislation I apply to determine this summons. Mr Portale argues that the relevant legislation to apply is the 2004 Act. In due course he relies upon the definition of "legal costs" in the 2004 Act to argue that the Law Society is not entitled to recover its costs. As I have said the proceedings in which the costs orders were made against Mr Portale were determined under the 1987 Act. By the time the application for a costs assessment was made the 2004 Act had commenced, in fact it commenced on 1 October 2005.

Clearly what occurred under the 1987 Act were the disciplinary proceedings under Part 10 of that Act which resulted in a determination by the ADT and the costs orders which are the subject of these proceedings. What about the proceedings concerning the topic of legal fees and other costs? Were they also under the 1987 Act or were they under the 2004 Act?

I am assisted in determining this question by Sch 9 of the 2004 Act which contains savings, transitional and other provisions. Clause 3(1) of Sch 9 provides as follows: "If anything of a kind required or permitted to be done under a provision of this Act was done under a corresponding provision of the old Act and still had effect immediately before the commencement day, the thing continues in effect on and after that day as if :

(a) this Act had been in force when it was done, and (b) it had been done under this Act."

It seems to me that the costs orders made under the 1987 Act by the ADT were something "of a kind...permitted to be done under a provision" of the 2004 Act: see s 566 of the 2004 Act. The corresponding provision of the 1987 Act was s 171E. The orders still had effect immediately before the commencement day, 1 October 2005. Hence the costs orders continued in effect after the commencement of the 2004 Act "as if" the 2004 Act had been in force when the costs orders were made and "as if" the costs orders had been made under the 2004 Act.

I am also assisted by clause 3(3) of Sch 9 of the 2004 Act which provides as follows: " Without limiting subclauses (1) and (2), if a provision of the old Act that corresponds to a provision of this Act would, but for its repeal by this Act, have applied in relation to anything done or being done or in existence before the commencement day, the provision of the new Act applies in relation to that thing, and so applies with any necessary adaptations."

What was in existence before the 2004 Act were the costs orders. The provisions of the 1987 Act (s202) enabled the Law Society to apply for an assessment of the costs which it had secured from the ADT. That provision it seems to me corresponds to a provision in the 2004 Act, namely s 353. It follows that the 2004 Act applies "with any necessary adaptations".

That conclusion seems to be somewhat confirmed by cl 18 of Sch 9. I do not think cl 18(1) applies because this is not a case where a client has instructed a law practice and there is a dispute over the bill. This is a case which became a costs matter only after the party/party costs orders were made by the ADT. No referral for assessment was made under the 1987 Act. It seems to me to be envisaged by cl 18(3) that if the application for assessment was made under the 2004 Act then it should be dealt with under that Act. In my opinion, for the above reasons, the legislation which applies for my determination of these questions of law is the 2004 Act.

Turning to the first question of law specifically raised, Mr Portale argues that the definition of "legal costs" in the 2004 Act precludes the Law Society from recovering its costs because they are not "amounts" charged by a "law practice" for the "provision of legal services". He argues, correctly I think, that the institution which is the Law Society does not fall within the definition of "law practice" contained within s 4 of the 2004 Act. I myself cannot see that any of the five specified categories applies to the Law Society.

The effect of Mr Portale's argument is this. Unless a party/party costs order is obtained by a party for whom a law practice acted then those party/party costs are not recoverable by that party. It would follow that institutions such as the Law Society and corporations - large or small - which employ their own lawyers to act for them in litigation, are precluded from recovering any party/party costs in that litigation. I would be surprised if the legislature intended to bring about such a radical change in the day to day conduct of litigation without making such a change unambiguously clear.

It seems to me that the definition "legal costs" in the 2004 Act attempts a generic definition of the kinds of payments that can be classified as "legal costs". It does this by adopting a very broad classification. Such costs are amounts of money which fall into one of two categories. One category is amounts which a law practice has actually charged a person or which a person has actually become liable to pay to a law practice. The other category comprises amounts which are of a kind which "may be charged" by, or which a person "may become liable to pay" to a law practice for the provision of legal services. Mr Portale argued that "may be charged" or "may become liable to pay" referred to a future event as distinct from the past event of having been charged or having become liable. I do not think the definition attempts to fix a point of time and look backwards and forwards. I think the definition attempts to define legal costs in a global way by reference to what a lawyer has actually charged for and what a lawyer is entitled to charge for.

Another way of describing the latter category is amounts of a kind which may be charged by a law practice or of a kind which a person may become liable to pay to a law practice. Such a reading of the definition would encompass both bills actually charged by a law practice to a client and party/party bills where the provision of legal services has not been made to the person receiving the bill but to someone else. The way of determining whether or not such a party/party bill is one for "legal costs" is to ask whether the amounts in the bill are amounts of a kind that "may be charged by a...law practice" or of a kind which "a person...may become liable to pay to a law practice for the provision of legal services".

Another reason for rejecting Mr Portale's interpretation argument is that it would result in depriving the Law Society of its remedy for recovering its costs to which it became entitled as a result of the ADT orders. That would be simply because it delayed its application for assessment of those costs until, as it happened, after the legislation changed. If it had applied for an assessment and that application had been referred to a costs assessor before 1 October 2005 but the assessment was not commenced, then it would have a remedy. If it applied after 1 October 2005 it would have no remedy because the "costs" to which it was entitled were no longer classified as "legal costs". Section 30 of the Interpretation Act 1987 has the effect that the repeal of the 1987 Act does not affect the Law Society's right to costs acquired under the 1987 Act nor its remedy in respect of such right: see s 30(1)(c) and (e). I see no contrary intention or provision in the 2004 Act (s 5(2) and s 30(3) of the Interpretation Act).

My rejection of Mr Portale's interpretation argument is also confirmed in my view by the fact that there was no reference by the Attorney General in introducing the Legal Profession Bill to Parliament during his second reading speech to any radical change in the law concerning the definition of legal costs.

I turn now to the question of law which is the subject of the second ground in Mr Portale's summons. Had Mr Portale been right in his argument about the meaning of "legal costs" in s 4 of the 2004 Act then there might have been some substance in this second matter of law which arose, namely, the application of the Commonwealth Bank of Australia v Hattersley (2001) 51 NSWLR 333. But this second matter depends for its success on him winning on the first matter. The ground is so stated in its terms and I did not understand Mr Portale to be arguing otherwise. In my opinion the Commonwealth Bank of Australia v Hattersley is still good law and was correctly applied in this assessment.

Accordingly I decide separately from any other questions arising in this summons the following two questions in the following way:

1. Did the costs assessor and the costs review panel err in law with regard to the definitions of "legal costs", "law practice" and "legal services" contained within s 4 of the Legal Profession Act? Answer: In my opinion, no.
2. Did the costs assessor and the costs review panel err in law in still applying Commonwealth Bank of Australia v Hattersley (2001) 51 NSWLR 333, an authority which has been specifically overridden by definitions of "legal practice" and "legal costs" within s 4 of the Legal Profession Act? Answer: In my opinion, no.

There are the determinations of the separate questions, so what's next, Mr Portale and Ms Webster?

WEBSTER: Your Honour, could I mention just one matter a date in your Honour's judgment.

HIS HONOUR: Yes, please. Mr Portale, you too. If there are any slips which I should correct now, then please draw my attention to them at this stage. Ms Webster?

WEBSTER: Your Honour referred to if the bill has been referred before 1 October 2001 it would have had a remedy, and then in the next sentence your Honour said if referred after 1 October 2005 it would have no remedy. The 2001 reference, as your Honour would have seen in revising this--

HIS HONOUR: That's correct, yes. The first mention of 1 October 2001 referred to by Ms Webster just then should read 1 October 2005, thank you. Mr Portale?

HIS HONOUR: No, okay. Well, where to from here? One thing I - tell me about this that when I was reading this legislation about what matters are determined by me and what aren't - it seems to me that I determine matters of law. Was there a suggestion the other day that I determine matters of fact or merit as well by leave?

WEBSTER: There is a provision in s 385 for an appeal by leave.

WEBSTER: In accordance with rule seek leave to appeal against the determination of the application, that's in a broader sense than a question of law.

HIS HONOUR: No, but that's not me, that's the court or tribunal which - I think that's the ADT. There is the District Court in subs 1 - me, and Court with a capital "C". Whereas subs 2 it's the court or tribunal. My reading of that is that other matters go back to the ADT. Now, tell me if I'm wrong, have a look at it.

WEBSTER: Yes, no, I looked at it. I think that might have been a point that was mentioned by his Honour Judge Johnstone and the decision in Randall.

WEBSTER: No, it's one of the decisions that I'd put in the bundle and referred to you briefly.

HIS HONOUR: My apologies. I had focused my attention on what I needed to, but my reading - without the assistance of any authority - is that I determine--

WEBSTER: Your Honour determines matters of law under s 384.

WEBSTER: And other matters are not specifically put - for this court.

WEBSTER: Because that is not what the statute provides, your Honour.

WEBSTER: That appears to be so on the fact of 385(2) and indeed I recall reading a statement by his Honour Judge Johnstone to that effect in the Randall decision that's in the bundle.

WEBSTER: There are questions of law Mr Portale raised.

WEBSTER: One thing that had been suggested on Tuesday, your Honour, if I might, as I'm on my feet, say just this. Your Honour noticed that there were not written submissions in Mr Portale's outline that had been provided last year in relation to grounds after ground number 2, and there was some discussion of those grounds. Your Honour may think - and Mr Portale may wish to suggest - that he prepared a short written outline of those other grounds in light of your Honour's judgment so that he can do that having considered your Honour's judgment. I don't know whether that is something Mr Portale would wish to do, and in light of what your Honour has said about matters of law and matters otherwise than matters of law. Or I should say, in terms of the section, a matter of law arising in the proceedings being matters for your Honour and other matters being for the court or tribunal which made the costs order.

HIS HONOUR: All right. Mr Portale, that's one issue I'd like to hear from you about. The other one is the notice of motion. Before I ask, Mr Portale, it's your notice of motion, Ms Webster, but it may be that it's affected by the determination I've just made.

HIS HONOUR: And it may be that - I guess it's back to Mr Portale that he no longer presses the notice to produce. I don't know. Mr Portale, what follows from all - what do you want to say?

PLAINTIFF: Well, I would need some more time to prepare the submissions.

HIS HONOUR: Yes. So do you say that there are still questions of law apart from 1 and 2, or do you want to think about that?

PLAINTIFF: I'd probably have to think about it, yes.

WEBSTER: I have put down on paper, just as a very brief reference, short minutes of order as it were, that just say submissions by a period of time, we are to reply within a period of time and then we come back on a day convenient to your Honour. In addition to what's written here, the matter and the notice of motion be adjourned together so that there's nothing slipping away. There's no ground listed in that but Mr Portale may wish that to be 3 to 10 or 3 to 11.

WEBSTER: There is something in relation to ground 11 in his written submissions, but I don't know whether he would wish to supplement that or consider it further and I wouldn't want to be seen to be shutting him our of that.

HIS HONOUR: All right, thanks Ms Webster. Mr Portale, Ms Webster's proposal - the idea she proposes seems to be a good one, and I think you've agreed that you'd like some time. So should we not fill in the form that she has provided?

HIS HONOUR: I'm sitting in Civil for only two more weeks, so I'm going to push this along a little bit, otherwise I'm sitting in Parramatta in crime and I'd rather not take this with me, but by that I mean it's going to be inconvenient to you, the parties, and to me. So I'm going to suggest a timetable which brings it back before me, perhaps the week after next, the week commencing 22 February. So Mr Portale, when do you need - what grounds do you want to file further written submissions on? Do you want to cover yourself by saying 3 to 11 and then think about it?

HIS HONOUR: You do? All right, we'll put in 3 to 11. And how much time do you want? I'm thinking of a week.

HIS HONOUR: You're not going to get much more than a week because - why do you need more than a week? You came along to court ready to argue this case, and you've argued it, so why do you need more than a week? I had in mind giving you a week and then giving Ms Webster perhaps a bit less than a week, and then hearing it perhaps in a fortnight on Thursday the 25th.

WEBSTER: The 25th would be a convenient date. I couldn't do any earlier date that week for a hearing, but the 25th certainly.

HIS HONOUR: All right. I could give you until the Friday. I'm giving you a weekend, namely this weekend. I would want to give Ms Webster a weekend as well. I'd give you to Friday the 19th and Ms Webster until Wednesday the 24th.

WEBSTER: Your Honour, I have assumed - I've only written served, but may wish to have them filed or sent to your Honour's associate in some way that's convenient.

HIS HONOUR: Yes, I'll deal with that in a moment, thanks. How long do you think it will take, Mr Portale? How much will I allow? Two hours or more or less than two hours?

WEBSTER: Your Honour, could I raise one matter just before things pass on?

WEBSTER: Mr Collins had been required for cross-examination on the notice of motion. It would be our submission that the notice to produce falls away in view of what your Honour has said in relation to the separate questions this morning, and if there were to be cross-examination which, I would say in light of what has happened could not assist the court in any relevant way, two hours may not be sufficient. If he is no longer required then it would be of assistance if we were advised of that today and your Honour was assured that there's to be no cross-examination on that adjourned date.

HIS HONOUR: Mr Portale, that's a fair question about Mr Collins. I think you need to think about overnight whether you're going to require him for cross-examination or not.

HIS HONOUR: Good, thank you. I direct a transcript of my judgment on these separate questions to be prepared and made available to me tomorrow, Friday 12 February 2010. No, I'm going to be away. Have you both got notes? I can provide it next week some time, probably. Have you got notes of the judgment.

HIS HONOUR: That's what I meant. You've got enough to--

PLAINTIFF: Not really, no, but - I'd need probably a judgment or something.

HIS HONOUR: Well, I'm not going to change the timetable. You'll have to do your best with your notes. I'll ask for the judgment to be made available to me this afternoon, if possible, in draft, and I will try to revise it overnight and see if - do you have an email address Mr Portale?

HIS HONOUR: All right, then my associate will email it to you and Ms Webster, and it may be tomorrow, it may be not until Monday, but you'll just have to get on with your submissions as best you can without the judgment until it turns up, Mr Portale. Just look at this document and if you'd both initial it if you're happy with it. Just sign it if you're happy with it, Mr Portale.

22. I make the orders contained in the document Short Minutes of Order signed by the parties, initialled by me and dated today, and I list the matter for further hearing on Thursday, 25 February, 2010 at 10am and I note an estimate of two hours. That short minutes of order will be placed with the papers. Do you need a photocopy each?

WEBSTER: I did give Mr Portale a copy of the blank, so that may--

HIS HONOUR: Mr Portale, do you need a photocopy of the orders?

HIS HONOUR: Now, as to how you get the submissions, I think email is probably best. So my associate if she hasn't already will give you her card so that you can email documents to her, and I'll see if I can get that judgment back as soon as possible.

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