Johnston v Boyd

Court of Appeal (NSW)|2024-03-15|Before: Adamson JA, Fagan J

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

JUDGMENT

THE COURT: On 2 March 2023 Fagan J dismissed an application brought by the applicant, Daryl Lindsay Johnston, seeking orders by way of judicial review of a costs assessment. [1] The summons seeking leave to appeal to this Court was filed on 22 December 2023, more than nine months after the impugned orders were made in the Common Law Division, and more than six months out of time. [2]
Only the first respondent, Abigail Boyd, was represented at the hearing of the leave application on 15 March 2024. At the conclusion of the hearing the Court made orders dismissing the application with costs, but reserved leave to the first respondent to provide evidence to allow the quantification of costs by the Court. Reasons were reserved. These are the Court's reasons for the orders made and the quantification of the costs.

Extension of time

It is convenient to consider first the applicant's explanation for the delay. Absent a reasonable explanation and a basis for granting leave to appeal, there is no purpose in granting an extension of time.
The applicant's explanation of the delay depended on two broad propositions. First, he was seeking to negotiate a settlement of the cost judgment. Secondly, he did not understand that leave would be required until the total costs were reduced below $100,000, by a contribution paid by another party in the same interest.
Neither of these explanations was offered in the summary of argument, nor are they entirely consistent with his own evidence filed in support of the application for leave to appeal. According to his affidavits of 22 December 2023 and 27 February 2024, he filed a notice of intention to appeal on the day judgment was delivered (5 March 2023), with an application for postponement or waiver of the filing fee. That was granted on 29 March 2023. He then served a sealed copy of the notice of intention to appeal on the respondent. Although she asserted that service occurred three days out of time, she was on notice from a month after the judgment of the proposed appeal.
On 17 April 2023, the applicant received a letter of demand from a debt collection agency seeking payment of outstanding debts owed to the State in respect of fees incurred in earlier proceedings. There were lengthy exchanges in relation to that matter which concluded on 9 June 2023 when the Registrar approved a fee waiver of the bulk of the amount owing, conditioned on payment of $200. The applicant accepted the offer.
However, that did not dispose of the outstanding debts to the State. On 19 June 2023, the collection agent emailed the applicant advising that while part of the outstanding debt had been compromised, there were remaining items in separate proceedings totalling some $4,066. The relevant issue for present purposes, however, was the applicant's pursuit of a fee waiver with respect to the filing fees for a notice of appeal or summons seeking leave to appeal, and with respect to a copy of the transcript before the primary judge and a certified copy of the judgment. It is clear from the correspondence with the Registrar that the applicant was aware of the three-month limitation period: in a letter to the Registrar on 14 July 2023 (corrected by email on 16 July 2023) he wrote that he was "ready to file [the notice of appeal] as soon as I can obtain the transcript and the certified copy of the judgment". His fee waiver applications were dismissed in July 2023 and a review application was dismissed in August. On 22 December 2023, he paid the filing fee for the summons.
Settlement negotiations seem to have commenced on 15 July 2023 when the applicant's co-plaintiff, Mr Harris, commenced proceedings in the Local Court claiming contribution from him with respect to the costs sought by Ms Boyd. The applicant sent a lengthy email to the parties proposing a settlement on 28 July 2023. On 11 August 2023 Ms Boyd settled with Mr Harris upon payment of $60,000. Thereafter, Ms Boyd pursued the applicant for an amount of some $41,460.
However, no negotiations with respect to costs took place between 11 August 2023 and 20 September 2023. There were negotiations between 20 September and 8 November 2023, which were unsuccessful.
For present purposes, it is sufficient to make an assumption that this history would permit an extension of time if there were merit in the application for leave to appeal. The respondent had been served with the notice of intention to appeal and had been in communication with the applicant on numerous occasions in the second half of 2023. Apart from the six-month delay, there is no evidence of actual prejudice. Nor was there any suggestion that the attempts to obtain fee waivers were other than genuine.
It is necessary, then, to turn to the merit of the application.

Merits of proposed appeal

The primary judge dismissed the applicant's judicial review application primarily on the basis that there was a statutory right to a fresh costs assessment before a review panel, [3] which would, if pursued, have cured any procedural, substantive or discretionary error or misjudgment on the part of the original costs assessor. [4] The basis on which judicial review had been sought was a breach of procedural fairness, attributed to the refusal (after a number of extensions) of the applicant's last request for a further extension of time. As the primary judge rightly noted, that would no longer have been relevant on a fresh assessment. The applicant was well aware of the right to seek a review, the manner in which to do it, and the potential for incurring further costs, although of a much lower order than the costs of an unsuccessful application for judicial review in the Supreme Court. Seeking a review of the costs assessment would have opened the gate-way to an appeal to the District Court, for a further hearing in which that Court would have had "all the functions of the review panel". [5]
In dismissing the proceeding on discretionary grounds, the primary judge applied the reasoning of Beech-Jones J in Bobb v Wombat Securities Pty Ltd: [6] "However, all the forms of relief available in this Court in this context are discretionary. In many cases, the terms and existence of a statutory scheme for appeals will warrant the discretionary rejection of claims for relief which seek to invoke the Court's supervisory jurisdiction (see, for example Kennett v Muc t/as GH Healey & Co [2013] NSWSC 119; Gorczynski v Leichhardt Council [2007] NSWSC 202 [16] to [25] per Hidden J; and Currabubula Holdings Pty Ltd v State Bank of New South Wales Ltd [2000] NSWSC 232 at [54] to [69] per Einstein J)."
The primary judge did not decline to consider the applicant's claims of procedural unfairness. He set out in detail the course of communications between the applicant and the costs assessor, noting his reliance on assessments of his mental health by a psychologist and a general practitioner. The primary judge stated: "17 According to the assessor's reasons for assessment, as subsequently issued, she regarded these medical reports as inadequate for their failure to specify what, if any, loss of function the plaintiff may be experiencing that would be relevant to his providing a response to the bill of costs that he had first received on 21 December 2021. Nevertheless, on 2 May 2022 the assessor notified the plaintiff of an extension of time for his objections and submissions to 4:00pm on 7 May. The email of 2 May 2022 conveyed the decision in these terms: 'Having considered this and noting Mr Deutsch's reply, the prior requests for extension which have been afforded, the nature of the assessment and the nature of the further medical grounds raised and general evidence in support of those extensions, I afford Mr Johnston a further week to reply to 4.00pm on 7 May. I will not be affording further extensions and note that my only obligation is to afford an opportunity to reply. I consider that I have done that. Please don't email me again on this matter. If you are dissatisfied with my decision then I suggest you look at appealing the matter. I have no issues with that course, but I will not be responding again on the matter.' 18 The last paragraph of this email reflected that Mr Johnston had inundated the assessor, since her first contact with him in March 2022, with an almost constant stream of emails, none of them articulating objections to the bill, or responding to it in substance, but all communications persistently pressing for extensions. I will not list or quote from that extensive body of Mr Johnston's email correspondence. Much of it was critical of the costs applicant's solicitor, often in vituperative terms and without apparent cause."
The primary judge held: "23 The plaintiff's repeated requests for extensions of time, as earlier referred to, were kept up throughout the period from early March 2022 until the expiry of the assessor's final time limit on 7 May. Although he asserted that his need for more time arose from disabling mental illness, the plaintiff supported his claims with long and reasoned emails. At the same time he vigorously articulated quarrelsome complaints about the conduct of the costs applicant's solicitor. All of this voluminous correspondence has been placed before me in exhibits and as annexures to affidavits. It appears on its face to disclose no incapacity to deal with contentious legal business. Its content suggests that the plaintiff had the time and the ability for the task at hand, of responding to the bill of costs, if he had chosen so to direct his efforts. Lodging objections to the bill and making submissions in support would have been more straightforward and less taxing than arguing for extensions, complaining about the costs applicant's solicitor, requesting production of documents and asking the assessor to make an interim partial assessment. 24 It is clear from the assessor's reasons that she was not satisfied the applicant had demonstrated or independently proved any significant incapacity that might warrant further extension of time for the modest task of objecting to the bill. The plaintiff filed what he termed interim objections on 7 May. The assessor proceeded to determine the assessment after that date and the plaintiff did not file any further objections, only two more emails on 9 May requesting further extensions."
The primary judge then found at [41]: "(6) At a prima facie level, there appears to be very little, if any, arguable matter in what the plaintiff wishes to raise about lack of opportunity afforded to advance submissions and objections before the assessor. The time that was allowed to him in the end extended over nearly two months from 11 March to 7 May 2022. During that period, far from demonstrating an incapacity to lodge objections, due to mental condition, he demonstrated a significant capacity for contentious correspondence and procedural applications."
Indeed, the primary judge also found at [41]: "(4) The plaintiff was under no personal impediment or disability to pursue his right of referral to a review panel. He would have been well able to make such an application to the Manager Costs Assessment. It would have been considerably simpler than preparing his summons, lodging it with the Court and negotiating a fee waiver, being the steps he took at exactly the time when he would have been seeking referral to a panel, had he taken the statutory course."
The applicant's submissions in support of leave to appeal did not condescend to identifying error on the part of the primary judge. Rather, at a generic level they asserted, based on his medical reports, that the applicant was at "[a]ll material times during the costs assessment process … suffering from one or more of the disorders" within the definition of "disability" in the Anti-Discrimination Act 1977 (NSW). [7] He complained that "[i]t is likely costs assessors generally, although highly skilled in making line by line decisions on what is a reasonable cost, lack the insight and the time to perform an objective test to determine whether an unrepresented litigant is suffering an impairment to do work". [8]

Conclusions

Those statements failed to engage with the reasoning of the primary judge as to the discretionary basis for refusing leave. The applicant has not established a "more than merely arguable case of error", as the standard statements of the test for a grant of leave require. [9] Indeed, no arguable case has been established. Nor, as counsel for the respondent submitted, has the applicant raised any issue of principle or question of public importance. Accordingly, this not being an appropriate case to grant leave to appeal, no purpose is served by granting the extension of time.
There was no reason why costs should not follow the event. The first respondent sought a gross sum costs order, pursuant to the Civil Procedure Act 2005 (NSW), s 98(4). That order was not opposed and is, in any event, appropriate.
The Court made the following dispositive orders at the conclusion of the hearing: 1. Refuse the applicant an extension of time in which to file the summons seeking leave to appeal. 2. Dismiss the summons purportedly filed on 22 December 2023. 3. Order that the applicant pay the first respondent's costs in this Court, calculated as a gross sum.

Gross sum costs order

At the hearing the first respondent presented no figures to allow a gross sum to be determined, but was given leave to do so. The Court gave the following directions: 1. Grant the first respondent leave to file and serve within 7 days an affidavit and brief submissions (not exceeding 3 pages) in relation to the quantum to be fixed under order (3). 2. Grant the applicant leave to file and serve within 7 days of receiving the first respondent's submissions under order (4), brief submissions (not exceeding 3 pages) in response.
In accordance with the directions given at the hearing, the respondent filed brief written submissions and an affidavit of her solicitor. The affidavit revealed that the solicitor had charged an amount of $11,088 with respect to the proceedings in this Court; counsel had invoiced an amount of $7,150.
The applicant's response, provided on 5 April 2024, raised a number of issues which were, in substance, a challenge to the order that he pay the respondent's costs in this Court. These submissions included that (i) the respondent was seeking to "punish" him by pursuing her costs; (ii) he had made various offers to settle; (iii) "no appeal would have been commenced if a defensive response to the adverse costs order was not required"; and (iv) he was impecunious. These matters were raised at the hearing, but were irrelevant to the costs order, which is, in any event, no longer in issue. With respect to the assessment of gross costs, he submitted that fair and reasonable costs should be "no more than the equivalent of the costs of filing a submitting appearance". In circumstances where the respondent was entitled to resist his application for leave to appeal, and did so successfully, that submission cannot be accepted. It is therefore a matter for the Court to determine what is fair and reasonable in the circumstances.
A perusal of the solicitor's bill indicated that some amounts included items which were properly chargeable as between solicitor and client, but should not be allowed on a party and party assessment. There should be a discount on that account. Because no proper assessment is undertaken by the Court, it is appropriate to err on the conservative side. The respondent submitted that, if a discount were thought appropriate, it would be at the lower end of a range from 10% to 30%. A discount of 20% is appropriate, allowing an amount of $8,870 for solicitor's fees. Counsel's fees should be allowed in full, in the amount of $7,150. Accordingly, the appropriate order is for payment of costs in an amount of $16,020 (inclusive of GST).
Accordingly, the Court makes the following additional order: Fix the gross sum payable pursuant to order (3) made on 15 March 2024 in an amount of $16,020.

Endnotes

Johnston v Boyd [2023] NSWSC 194.
Uniform Civil Procedure Rules 2005 (NSW), r 59.10(1).
Legal Profession Uniform Law Application Act 2014 (NSW) ("Application Act"), s 83.
Application Act, s 85(2).
Application Act, s 89(2).
[2013] NSWSC 757 at [23].
Applicant's summary of argument, 20 December 2023, par 13.
Applicant's summary of argument, par 19.
Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28] (Gleeson JA, Macfarlan and Payne JJA agreeing); Choi v University of Technology Sydney (No 2) [2020] NSWCA 342 at [40] (Bell P, Emmett AJA). See also Gibson v Drumm [2016] NSWCA 206 at [19] (Beazley P and Simpson JA). DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 April 2024

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