Jefferis v Gells Pty Ltd

Referral for Costs Assessments

1. During the course of the proceedings, issue was taken as to whether the quantum of fees sought by the plaintiff was fair and reasonable. This resulted in the proceedings being held in abeyance while the barrister's tax invoices were referred for costs assessment by an assessor under the Legal Profession Act 2004 (the Act).
2. On 5 December 2016 at a Directions Hearing the court noted as follows: "The court notes that the costs claimed by the plaintiff, the subject of the plaintiff's claim, are in the process of being assessed and the parties are seeking to adjourn the matter while the assessor determines facts within their powers. The parties will then continue proceedings in this Court on the remaining issues between them raised in the pleadings."
3. By May 2017 the costs assessments had been finalised and a determination made in favour of the plaintiff for $74,330.90.
4. On 20 June 2017 at a Directions Hearing the following notations and orders were made by consent: "The court notes that the costs the subject of the plaintiff's claim have been assessed. The plaintiff will amend his pleadings to incorporate the results of the assessments. The parties will then continue proceedings in this Court on the remaining issues between them raised or that may be raised in the pleadings."
5. By consent leave was given to file a Further Amended Statement of Claim. This is the document referred to above. The amendment was to refer to the outcome of the assessments.
6. During the course of the costs assessments, the defendant wrote to the costs assessor in each matter. By a letter dated 2 December 2016 the defendant advised the costs assessor of the adjournment of the District Court proceedings and said: "The purpose of the adjournment was to allow time for the Plaintiff to seek an assessment of costs to establish the quantum of the claim for fees, interest and costs of the assessment. A further adjournment will be necessary. The remaining issues pleaded in a Defence are for determination by the District Court. … The issue of a Certificate of Determination does not determine liability between the parties: it simply determines the fair and reasonable amount of costs: (see Calandra). It follows from Calandra that a costs assessor's powers are confined to determining fair and reasonable costs, not entering into questions of liability or payment of monies." (Emphasis added)
7. The plaintiff did not dispute these matters, or ask the costs assessor to determine the issue of whether or not the plaintiff was retained on a contingency or speculative basis.
8. Neither party sought a review under the Act of the decisions of the costs assessor. Nor did the plaintiff seek to simply file the certificates of the assessor which could then be taken to be judgments under s 268(5) of the Act.

Consideration

1. Both parties referred me to the decision of the Court of Appeal in Calandra v Murden [2015] NSWCA 231. In that case a Local Court judgment was entered upon the filing of two certificates from a costs assessor issued under the Act. A magistrate in the Local Court set aside the judgment entered following the filing of the certificates. In the Local Court the applicants did not seek to set aside the determinations of the costs assessor or the certificates. The applicants simply attacked the entry of judgment.
2. The parties had been in litigation over an alleged assault. This claim was settled and a Deed of Release and Indemnity was executed to record the settlement. That document released the parties from any claim for costs. The magistrate found that the subject matter of the release included the costs which had been assessed by the assessor. The applicants had objected to the assessment going ahead on the basis that the entitlement to costs had been released. The costs assessor considered that objection but effectively declined to so find, on the basis that her jurisdiction was limited to determining the fair and reasonable amount of the costs.
3. The magistrate set aside the judgment, finding that it had not been entered in good faith, because the entitlement to payment of costs had been released and that fact had not been disclosed to the court. The party claiming costs appealed from that decision to a single judge of the Supreme Court on a question of law. The Supreme Court allowed the appeal. It held that the Local Court had no power to set aside the determinations of the costs assessor.
4. The Court of Appeal disagreed with the decision of the Supreme Court judge and agreed with the analysis of the magistrate. The Local Court had not been asked to, and did not, set aside the determinations of the costs assessor as to the fair and reasonable amount of the party/party costs. The order setting aside the judgment did not affect the binding nature of the assessor's determination as to the fair and reasonable amount of the relevant costs. The Court of Appeal found that the magistrate plainly had power to set aside the judgment because it was entered against good faith and was also entered irregularly. Because of the release, there was no entitlement to a judgment for costs.
5. On this Motion counsel for the plaintiff submitted that the costs assessor could have decided the issue of the terms of the costs agreement and the retainer i.e. whether they were contingent or speculative briefs. A reading of the assessor's Statement of Reasons in each matter shows that neither party put that issue before the assessor for determination.
6. Counsel for the defendant conceded that a costs assessor could have determined that issue if asked to. However, a costs assessment is done "on the papers" and where a costs assessor comes to the view that there are questions of law or fact that are complex or difficult, or that oral evidence and cross-examination are required, the costs assessor should not proceed to determine such issues.
7. Both parties referred me to the recent decision of Justice Kunc in the Supreme Court in WKA Legal Pty Ltd v Gleeson [2018] NSWSC 318. That was a case concerning an allegation that fees were not due because the lawyers had been engaged by the client on a speculative basis.
8. His Honour found that issues about the terms of the costs agreement could not be adequately determined by a costs assessor in the absence of sworn testimony and cross-examination. The issues could not be dealt with by way of written submissions in a way that accorded procedural fairness to the parties. There was a clear dispute between the parties as to the existence and terms of any costs agreement.
9. His Honour said that the costs assessment regime under the Act is not the exclusive means to ascertain the reasonableness of solicitor's costs, which can also be addressed by a court if necessary - Branson v Tucker [2012] NSWCA 310.
10. His Honour granted an order restraining any further steps in the costs assessment.
11. I accept the submission by counsel for the plaintiff that if the parties had put the issue of determination of the precise terms of the retainer between barrister and solicitor before the costs assessor, the costs assessor would have had power to determine it. However, it is plain from the notations on the court file and the material put before the costs assessor that a more limited issue was before the assessor. The assessor was only asked to certify as to the fair and reasonable quantum of costs and was not asked to determine whether such costs were payable or whether the costs agreements between barrister and solicitor were on a speculative or contingent basis.
12. The notations made on the court file, recited above, are a plain indication that the parties were leaving the issue of whether or not the Steiner retainers were speculative or contingent to be determined in the District Court.
13. Further, even if the assessor had been asked to determine whether or not the Steiner retainers were speculative or contingent, because determination would have required oral evidence and cross-examination, the assessor would have at least raised this problem with the parties by calling for further submissions or witness statements. Neither party put anything before the assessor to indicate that she had been charged by the plaintiff and the defendant with the task of deciding the terms of the retainers.
14. In those circumstances, I find that the issues raised by the defendant of the terms of the Steiner retainers, waiver and estoppel, have clearly been left for determination by the District Court, and in relation to the Steiner retainers the plaintiff is not entitled to summary judgment. There are still real questions to be tried - Fancourt v Mercantile Credits Limited.
15. I do note that these proceedings are listed for hearing on 18 June 2018 for two days, so the parties will not have to wait long to have these issues determined. They will be determined upon a full and contested hearing. The fair and reasonable quantum of costs will not be in issue on that hearing.

The Wong Retainer

1. The matters of defence pleaded in relation to the Steiner retainers were not pleaded in relation to the Wong retainer. The assessor certified that the fees payable for the Wong case amounted to $1,540, plus costs of the assessment in the amount of $1,000, a total of $2,540.
2. During submissions on the Motion I raised with counsel for the defendant whether there was really any defence left to litigate in relation to the claim for the Wong retainer. Counsel frankly and properly conceded that there was no defence and that this amount was due and payable. I will make an order that the defendant pay to the plaintiff the sum of $2,540, as in my view the plaintiff is entitled to summary judgment for that amount and there is no defence left to be litigated at the forthcoming hearing.

Costs

1. While the plaintiff has had a small victory on the Motion, he has failed on the larger parts of his claim, being the Steiner retainers. The lack of any real issue between the parties on the Wong retainer was only identified during an exchange between the bench and counsel for the defendant. There was nothing in the plaintiff's written submissions concerning the lack of a pleaded defence to the Wong claim.
2. The plaintiff has substantially failed on its Motion. However, it is entitled to summary judgment for $2,540 in relation to the Wong retainer. Costs normally follow the event, but the court has a discretion to order costs of separate issues. The defendant has been largely successful in opposing the Motion. Given the relatively minor success of the plaintiff on the Motion, which could have been dealt with by correspondence instead of a contested Motion, I am disinclined to award any costs to the plaintiff. However, it is unsatisfactory that the concession about the monies due for the Wong fees was only extracted during oral submissions on the Motion. Ideally, that payment should have been volunteered a lot earlier.
3. To do justice between the parties I will order that the plaintiff pay 80% of the defendant's costs of the Motion.

Orders

1. My orders are: 1. Summary judgment for the plaintiff for $2,540 in relation to paragraphs 3-15 of the Further Amended Statement of Claim filed on 1 July 2017. 2. Plaintiff's Notice of Motion filed on 22 December 2017 otherwise dismissed. 3. Order the plaintiff to pay 80% of the defendant's costs of the Motion, as agreed or assessed.

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