Kehoe v Williams

Supreme Court of NSW|2008-08-05|Before: McClellan CJ

Background 3 Between 3 and 6 April 2006, proceedings between the parties were heard before McClellan CJ at CL. His Honour found in favour of Mr Williams. On 26 April 2006, his Honour ordered that Mr Kehoe pay Mr Williams's costs. In March 2007, an application for leave to appeal this decision was heard by the Court of Appeal. This application was dismissed and Mr Kehoe was ordered to pay Mr Williams's costs. It is the proceedings before the Court of Appeal that are the subject matter of the costs assessment and of this appeal. On 21 May 2007, Mr Williams filed an application for assessment of costs in the Supreme Court. Mr Kehoe did not furnish a statement of objection to the costs assessor, but I shall return to discuss this issue in more detail later in this judgment. On 25 July 2007, the costs assessor, Mr Mansfield issued a Certificate as to Determination of Costs, Certificate as to Determination of Costs of Costs Assessment and Statement of Reasons.

The Costs Assessor's reasons 4 In his reasons, the costs assessor stated that the charge out rates for the solicitors and the disbursements were fair and reasonable and they were allowed. One item on the bill of costs was disallowed as it occurred after the court order and some other items were reduced as the costs assessor concluded they were unreasonable. The reasons given by the costs assessor further stated: "I have determined and certified the total amount of party/party costs which was fair and reasonable and in favour of the Costs Applicant to be $9,960.28. As this sum was only marginally less than claimed, this fact should be taken into account when determining the issue at hand.

The only effort to negotiate settlement of the costs issue came from the Costs Applicant on 8 March 2007. The offer to settle was for a figure considerably less than the sum determined to be fair and reasonable. No response came from the Costs Respondent.

I note the filing fee in respect of this Application was $107.77 which was paid by the Costs Applicant. I have concluded that in all the circumstances the Costs Applicant should be entitled to recover this fee amount from the Costs Respondent.

There were no unreasonable delays occasioned to the cost assessment by either party.

I consider in all the circumstances the Costs Respondent should pay the costs of the Costs Assessor calculated to be $962.50. I therefore certify that the Costs Respondent should pay the costs of the cost assessment totalling $1,070.27." 5 The bill of costs was in the sum of $10,777.03 and the amount assessed as being affair and reasonable was in the sum of $9960.28.

Extension of time to lodge the appeal 6 Rule 51.10 Uniform Civil Procedure Rules states: "(1) A summons seeking leave to appeal must be filed and served on each necessary party: (a) … (b) in any other case - within 28 days after the material date.

(2) The Court may extend time under subrule (1) (b) at any time.

(3) An application under subrule (2) may be included in the summons seeking leave to appeal.

(4) …" 7 Mr Williams submitted that as s 385 of the Legal Profession Act 2004 nor any of the relevant rules provide a material date, it should be taken as the date of the decision of the cost assessor, that is, 25 July 2007. I do not agree. The certificate of assessment did not issue until 15 August 2007. Hence, the material date is 15 August 2007. On 28 March 2008, this summons was filed. The application was filed about 7½ months out of time. 8 In Gallo v Dawson (1990) 93 ALR 479 at 480 McHugh J provided principles as to the matters to be considered in an application for leave to bring an appeal out of time;

"The grant of an extension of time under this rule is not automatic. The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262. This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: see Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86 at 92; Jess v Scott (1986) 12 FCR 187 at 194 5 ; 70 ALR 185 When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal: see Burns v Grigg [1967] VR 871 at 872; Hughes, at 263 4; Mitchelson v Mitchelson (1979) 24 ALR 522 at 524. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has "a vested right to retain the judgment" unless the application is granted: Vilenius v Heinegar (1962) 36 ALJR 200 at 201." 9 McHugh J continued at 481;

"A case would need to be exceptional before a court would enlarge by many months the time for lodging an appeal simply because the applicant had refrained from appealing until he or she had researched the issues involved." 10 On 21 May 2007, the application for costs assessment was filed. On 12 June 2007, Mr Kehoe received a letter from Mr Mansfield, the costs assessor that requested Mr Kehoe raise any objections he wished to make in relation to the bill of costs within 21 days, that is, by 3 July 2007. Mr Kehoe forwarded a memo to the costs assessor acknowledging receipt of his letter dated 12 June 2007 and simply stated "I will seek advice and communicate further with you." On 12 July 2007, Mr Kehoe forwarded a further memo to the costs assessor which stated: "I require a short extension of time to formalize my objections to the subject Bill of Costs. Not only do I need to find a firm of solicitors to advise on this matter, but, in terms of observations of His Honour Mr. Justice Santow at the Appeal, I require advice as to reinstituting the actual Appeal." 11 On 12 July 2007, the costs assessor responded by granting an extension of time within which to lodge objections to 23 July 2007 and added: "Given that this material was apparently sent to you on 10 April 2007, I am of the view that the assessment should be completed shortly after 23rd instant in the absence of compelling reasons to further delay the process." 12 On 18 July 2007, Mr Kehoe forwarded a further memo that firstly acknowledged receipt of the costs assessor's letter dated 12 July 2007 and continued: "In view of recent events involving an article about me in the Sydney Morning Herald on 14 July 2007, I am unable to address the issue of the quantum on the legal costs in the immediate future. In that article, the Costs Applicant is said to have made certain comments regarding the issue before you. I am with Counsel this morning and will further communicate with you." 13 It is common ground that a copy of this faxed memo does not appear on the costs assessor's file. The costs assessor in his reasons stated that he did not receive any communication from Mr Kehoe after 12 July 2007. In these circumstances I accept that the costs assessor did not receive the fax dated 18 July 2007. Mr Kehoe submitted that because the contents of this fax had not been considered by the costs assessor, he had been denied procedural fairness. I shall refer to this later in this judgment. 14 On 25 July 2007, the costs assessor issued the certificates of determination. On 15 August 2007, the manager of costs assessment forwarded copies of the certificates to the parties. 15 On 19 September 2007, Mr Williams filed and application to register the costs assessor's determination as a judgment in the Local Court and a judgment in the sum of $11,099.55 was issued. 16 On 2 October 2007, Mr Kehoe received a letter from the Supreme Court advising him of the process of costs review and appeal. 17 On 5 December 2007, Mr Williams issued a bankruptcy notice. Mr Kehoe then sought to have this set aside by the Federal Magistrates Court. An extension of time for compliance with the requirements of the bankruptcy notice was granted. Several adjournments have been granted. On 1 July 2008, the bankruptcy proceedings were adjourned to 26 August 2008. 18 After receipt of the letter dated 2 October 2007 from the Registry of the Supreme Court setting out in the procedure to appeal a costs assessor's determination, a period of five months elapsed before Mr Kehoe commenced proceedings. Mr Kehoe filed the summons shortly after he was served with a bankruptcy notice. In his submissions, Mr Kehoe explained that his reason for not commencing an appeal after he received the letter from the Supreme Court was he "did not see the need to implement further litigation as there was no indication from the defendant that he intended to enter judgment". The explanation, in my view, is not a satisfactory one. 19 Mr Kehoe has still not outlined the basis of his objections to the amounts claimed in the bill of costs. When the Court asked him what this objections were he stated that firstly, there were costs incurred in searching an earlier court file that should not be allowed because Mr Williams should have had these documents in his possession; and secondly, that costs were charged for the period prior to the commencement of those proceedings. 20 The application is brought under section 385 of the Legal Profession Act 2004 which provides: "385 Appeal against decision of costs assessor by leave

(1) A party to an application for a costs assessment relating to a bill may, in accordance with the rules of the Supreme Court, seek leave of the Court to appeal to the Court against the determination of the application made by a costs assessor.

(2) A party to an application for a costs assessment relating to costs payable as a result of an order made by a court or a tribunal may, in accordance with the rules of the court or tribunal, seek leave of the court or tribunal to appeal to the court or tribunal against the determination of the application made by a costs assessor.

(3) The Supreme Court or court or tribunal may, in accordance with its rules, grant leave to appeal and may hear and determine the appeal.

(4) An appeal is to be by way of a new hearing and fresh evidence, or evidence in addition to or in substitution for the evidence received at the original proceedings, may be given.

(5) After deciding the questions the subject of the appeal, the Supreme Court or court or tribunal may, unless it affirms the costs assessor's decision, make such determination in relation to the application as, in its opinion, should have been made by the costs assessor." 21 These oral grounds of appeal raise factual matters. As the bill of costs is a modest one and the sum claimed seems reasonable, the chance of Mr Kehoe being granted leave to appeal on these issues is very unlikely. 22 So far as the allegation of procedural unfairness is concerned, on 12 July 2007, the costs assessor granted an extension of time from 3 July 2007 until 23 July 2007 but he indicated that he would not grant a further extension of time save for compelling reasons. 23 Mr Kehoe referred to Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 214 CLR 1 in which Gleeson CJ concluded at [37]: "A common form of detriment suffered where a decision-maker has failed to take a procedural step is loss of an opportunity to make representations. Attorney-General (Hong Kong) v Ng Yuen Shiu was such a case. So, according to the majority, was Haoucher v Minister for Immigration and Ethnic Affairs . A particular example of such detriment is a case where the statement of intention has been relied upon and, acting on the faith of it, a person has refrained from putting material before a decision-maker. In a case of that particular kind, it is the existence of a subjective expectation, and reliance, that results in unfairness. Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice." 24 In my view, Mr Kehoe failed to comply with procedural directions prior to sending the fax dated 12 July 2007. The costs assessor had already indicated to him that he would not accede to any further delay in filing his notice of objections. In these circumstances there was no practical injustice occasioned to Mr Kehoe. In any event, Mr Kehoe has still not prepared written objections to the items contained in the bill of costs. 25 An extension of time, it is submitted by Mr Williams, will further delay the bankruptcy proceedings in the Federal Magistrates Court. Mr Williams has expended legal costs in commencing bankruptcy proceedings. 26 It is my view that Mr Kehoe has not provided a satisfactory explanation for the seven month delay, nor has he ever drawn up his objections to the bill of costs. He has been afforded procedural fairness. The interests of justice favour that the application for an extension of time to appeal be refused. I make such an order. 27 Costs are discretionary. Costs normally follow the event. The plaintiff is to pay the defendant's costs as agreed or assessed.

(1) The application to grant an extension of time to appeal is refused.

(3) The plaintiff is to pay the defendant's costs as agreed or assessed. **********

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.

CITATION : Kehoe v Williams [2008] NSWSC 807

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