KEKATOS LAWYERS PTY LTD trading as Kekatos Lawyers v Dana Rahme [2025] NSWSC 1320 | Case summary

KEKATOS LAWYERS PTY LTD trading as Kekatos Lawyers v Dana Rahme [2025] NSWSC 1320 | Case summary | Zoe

This matter has a significant and complex procedural history. There are a multitude of proceedings which have come before and been determined by this Court. To the extent relevant for the purpose of determining the motion, I set out a brief procedural history, below.
In 2015 the defendant and her husband, Mr Gabriel Rahme (collectively, “the Rahmes”), retained the services of the plaintiff [1] to bring proceedings in the Supreme Court against B&K, Paul Satouris, and Solon Lawyers: Rahme v Satouris [2018] NSWSC 1753 (“the substantive proceedings”). In 2018 the substantive proceedings were expanded to include a claim against Dieb Peter Khoury, the sole director of B&K.
I pause at this juncture, to note that, in what are unusual circumstances, Solon Lawyers are now the instructing solicitors for the defendant. While the issue was not raised by the parties, there appears to be, at least at first glance, some conflicts of interest with that arrangement. However, I do not propose to pass upon that topic any further, given it is not an issue to which I have been directed, except to note that it may explain the significant level of animosity between the instructing solicitors in this matter, which the Court was, unfortunately, witness to. I note that such conduct is far from the conduct which is expected of officers of this Court.
The Rahmes settled the claims against Paul Satouris and Solon Lawyers, on terms which involved no order as to costs. Hence, what remained in the substantive proceedings was the claim against B&K and Mr Khoury.
The substantive proceedings were heard in late 2018 by Emmett AJA. The Rahmes claim failed at first instance before Emmett AJA. However, on appeal (“the appeal proceedings”) the defendant succeeded against B&K: Rahme v Benjamin & Khoury Pty Ltd (2019) 100 NSWLR 550; [2019] NSWCA 211; Rahme v Benjamin & Khoury Pty Ltd *(*No 2) [2019] NSWCA 239. The plaintiff acted for the defendant in the appeal proceedings.
The Court of Appeal gave judgment for the defendant against B&K in the sum of $302,040.30 including interest, and also ordered that B&K pay:
the costs of the defendant (but not Mr Rahme) of the proceedings in the court below on an ordinary basis; and
the costs of the defendant in the Court of Appeal on an ordinary basis.
Following judgment in the appeal proceedings, the defendant sought assessments of her ordered legal costs against B&K, on a party-party basis. As part of those cost assessment proceedings, the defendant asserted that she had a liability to pay legal costs to the plaintiff, pursuant to the written costs agreements. The defendant asserted the quantum of costs which she asserted was owed to the plaintiff, which mirrored an itemised tax invoice dated 9 April 2020, issued by the plaintiff to the defendant for legal costs incurred in the substantive proceedings and the appeal proceedings.
The assessments of the defendant’s party/party costs were finalised, and those assessments were registered as judgments of this Court.
A necessary step in the determination of those assessments was a finding of a liability for the defendant to pay legal costs to the plaintiff, and a quantification of those costs.

The CC contained 28 pages of purported pleadings and particulars, with a vast array of different claims made against the plaintiff. I set out below, in broad terms, the main contentions advanced by the defendant in this respect.
The CC pleaded that the retainer between the parties (“the oral retainer”) was made orally on a no-win-no-pay and pay-if-paid basis, whereby the plaintiff agreed to accept as the costs for the performance of its retainer, the net amount recovered by the Rahmes as ordered costs (but not damages) in the event they were successful in the substantive proceedings. The same terms were said to apply in relation to the plaintiff’s engagement to conduct the appeal proceedings.
The CC pleaded that the oral retainer contained the following express terms:
That the Rahmes would receive any damages recoverable from B&K or Solon Lawyers without any deduction for the professional costs or disbursements of the plaintiff.
That the plaintiff would act for the Rahmes to recover such costs as were payable by B&K, Paul Satouris, Solon Lawyers and Mr Khoury and accept, as its professional costs, the net amount payable to the Rahmes as their recovered ordered costs from those defendants, that is, the net amount recoverable by the Rahmes or either of them after all countervailing costs orders made in their favour or against them (where they were partially successful against one but not both defendants) were assessed and paid.
The CC pleaded that the oral retainer also contained the following implied terms:
That the plaintiff would co-operate with the Rahmes to take, or otherwise to not impede them taking, all necessary steps to recove any damages and ordered costs payable to them by B&K, Paul Satouris, Solon Lawyers and/or Mr Khoury.
That operation of the pay-if-paid terms of the oral retainer and the first implied term of the oral retainer as executory promises by the plaintiff to the Rahmes would survive termination of the retainer to conduct the substantive proceedings.
In summary, the CC pleaded that those express and implied terms gave rise to a duty of care and fiduciary duty owed by the plaintiff to the defendant, and that the plaintiff had breached those duties, the terms of the oral retainer, as well as a number of statutory provisions relating to solicitor conduct by:
Demanding payment of its legal costs from the defendant in an email dated 3 November 2020.
Applying money received on trust on behalf of the defendant toward the payment of professional costs, disbursements and counsel fees without the defendant’s informed consent.
Lodging an application for assessment of the defendant’s ordered costs of the substantive proceedings and the appeal proceedings.
Representing that the defendant had entered into a statutorily compliant costs agreement with the plaintiff.
Claiming various liens over, inter alia, the ordered costs and damages payable to the defendant.
Asserting that B&K had a duty to account to the plaintiff in respect of the ordered costs and damages payable to the defendant.
The CC also pleaded that the plaintiff acted in contravention of s 18 of the Australian Consumer Law (Sch 2 of the Competition and Consumer Act 2010 (Cth)) as a result of the representations made by the plaintiff with respect to the costs agreement.
For the purposes of the present proceedings, what is at least implicit in the CC, is a denial by the defendant of the existence of the written costs agreements as having legal effect. So much is clear from the CC that the retainer between the parties was only oral and that it was conditional, with, in broad terms, no-win-no-pay and pay-if-paid terms.

“[22] Three forms of estoppel have now been recognised by the common law of Australia as having the potential to result from the rendering of a final judgment in an adversarial proceeding. The first is sometimes referred to as "cause of action estoppel". Estoppel in that form operates to preclude assertion in a subsequent proceeding of a claim to a right or obligation which was asserted in the proceeding and which was determined by the judgment. It is largely redundant where the final judgment was rendered in the exercise of judicial power, and where res judicata in the strict sense therefore applies to result in the merger of the right or obligation in the judgment. The second form of estoppel is almost always now referred to as "issue estoppel". Estoppel in that form operates to preclude the raising in a subsequent proceeding of an ultimate issue of fact or law which was necessarily resolved as a step in reaching the determination made in the judgment. The classic expression of the primary consequence of its operation is that a "judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies". The third form of estoppel is now most often referred to as "Anshun estoppel", although it is still sometimes referred to as the "extended principle" in Henderson v Henderson. That third form of estoppel is an extension of the first and of the second. Estoppel in that extended form operates to preclude the assertion of a claim, or the raising of an issue of fact or law, if that claim or issue was so connected with the subject matter of the first proceeding as to have made it unreasonable in the context of that first proceeding for the claim not to have been made or the issue not to have been raised in that proceeding. The extended form has been treated in Australia as a "true estoppel" and not as a form of res judicata in the strict sense. Considerations similar to those which underpin this form of estoppel may support a preclusive abuse of process argument.

Hence, it was the plaintiff’s contention that a decision as to the validity of a costs agreement is not an "anterior or incidental question of fact or law" within the meaning of s 93C(3) of the Uniform Law Application Act. Rather, such a decision is a necessary step in the assessment of legal costs, and as such, no restriction on issue estoppel (under s 93C(3) of the Uniform Law Application Act) arises in relation to a decision of that nature. Thus, the plaintiff contended that the defendant was thereby estopped.
The arguments advanced by the defendant, in response to this contention, were as follows:
The defendant’s interpretation of s 93C of the Uniform Law Application Act is wrong. In making a costs assessment, a costs assessor is simply undertaking a quantification exercise by an administrative process because liability has already been determined by the court. The role of a costs assessor is simply to determine the amount of an order, which is an exercise in quantification not liability. The defendant relied on ss 75(1), 76 and 77 of the Uniform Application Act to support this construction of s 93C. As such, the defendant argued that the costs agreement is simply a discretionary factor in a costs assessment which is used for the purposes of quantifying an order for costs.
With respect to s 199 of the Uniform Law, the jurisdiction of the costs assessor is simply to determine the validity of a costs agreement rather than its interpretation. This is, it is an exercise in determining whether there was a costs agreement, and if so, whether it was valid. This determination is for the sole purpose of determining the quantification of costs, that is, what is a fair and reasonable amount of the costs.
I accept that these arguments were advanced in order to demonstrate that a costs assessor’s determination as to whether a valid costs agreement exists, is an “anterior or incidental question of fact or law” for the purpose of s 93C(3) of the Uniform Application Act. As such, it was the defendant’s contention that she is not bound by the findings of the costs assessor with respect to the existence and terms of the written costs agreements, even if those findings were made in conformity with her conduct of those proceedings.
Before turning to the authorities relied on by the parties, I will first address the question of statutory construction.
Section 93C(3) of the Uniform Law Application Act provides that:

It is evident that the provisions of s 93C(3) and s 199(2) are dealing with different functions of a costs assessor. This conclusion may be arrived at on two bases. The first is the nature of the function conferred.
The power conferred upon the costs assessor under s 93C(3) is ancillary to any other substantive function engaged in by the costs assessor.
It is clear that the function conferred on the costs assessor under s 199(2)(a) is, in contrast, a substantive power as illustrated by the use of the word “determine” on two occasions in subs (2).
The second indicator of the difference is that the legislature has drawn a distinction between the scope of the functions of the costs assessor in each such provision as between the conferral of a discretion under s 93C(3) and the mandatory requirement to assess the validity of a costs agreement under s 199(2)(a).
In s 199(2)(a), the legislature has used the word “must” to govern the function of the costs assessor. Normally the use of the word “must” involves the legislature entrusting a function which is to be taken prima facie as imposing an obligation to exercise that function: Grunwick Processing Laboratories Ltd v Advisory Conciliation & Arbitration Service [1978] AC 655 at 690 (per Lord Diplock) and 698 (per Lord Salmon).
There is an even stronger inference that the word “must” in s 199(2)(a) creates a mandatory requirement in this case as the legislative scheme plainly indicates an intention that the assessment under s 199(2)(a) is a pre-requisite to the ultimate determination of the costs assessor. So much is also clear from the terms of s 199(2)(b) which, in my view, involves a discrete step for which a conclusion must be reached after the determination made under subs (2)(a). Under subs (2)(b), the cost assessor must determine whether the legal costs are reasonable, and if not, what legal costs (if any) are payable.
Before turning to s 93C of the Uniform Law Application Act, I note that this is not a case where, strictly speaking, the legislature has within the one statute used the words “shall” or “must” in juxtaposition to the word “may”; this representing an aid to construction. However, it should be noted that there is clearly different language being employed between these related statutes by the use of the words “may” and “must”.
It was not suggested by the defendant that the use of the word “may” in s 93C(3) of the Uniform Law Application Act did not confer a discretion. In any event, the language of the provision is consistent with any presumption of permissiveness that comes with the use of the word “may” because the provision is plainly permissive or facultative. This is illustrated by the function of the costs assessor being such that the costs assessor may determine an anterior or incidental question without creating an issue estoppel. [5]
It is plain then that in exercising the function under s 199(2)(a) of the Uniform Law, the costs assessor is engaged in a different function from that reposing on the costs assessor, in the exercise of the costs assessor’s discretion, under s 93C(3) of the Uniform Law Application Act, such that, the costs assessor is not engaged in the determination of a anterior or incidental question of fact or law when making a determination under s 199(2)(a). This is further illustrated by the fact that the function exercised under s 93C(3) expressly excludes the establishment of an issue estoppel in the resolution of the question of fact or law when no such limitation operates with respect to the exercise of the function under s 199(2)(a).
The different approaches to the conferral of power by the legislature under s 93C(3) and s 199(2) demonstrate the legislative intention to treat those functions as separate and discrete functions, such that the function exercised under s 199(2) is not an anterior or incidental question under s 93C(3).
The plaintiff is correct to submit that, whilst a costs assessor may determine an anterior or incidental question of fact or law for the purposes of s 93C of the Uniform Law Application Act, but without establishing an issue estoppel for that question, that must also mean that a costs assessor may determine a non-anterior or non-incidental question of fact or law, which may have the effect of establishing an issue estoppel for that question. That is given effect under s 199(2) of the Uniform Law.
It follows that a determination made under s 199(2)(a) of the Uniform Law may, in fact, create an issue estoppel. The remaining question, as properly posed by the plaintiff, is whether the question raised by the CC as to whether an agreement existed falls within the remit of the costs assessor under s 199(2)(a) of the Uniform Law.
On one view of s 199(2)(a), the question may be resolved by the reference to the word “exists”, but that word appears in a phrase “a valid costs agreement exists” and hence, the question arises as to whether the use of the word “valid” might suggest that the provision was not intended to deal with the question as to whether there existed a costs agreement per se.
In my view, the legislative intention is clear that the legislature contemplated that the costs assessor will determine whether, in law, a costs agreement exists and that the issue of validity is consistent with the costs assessor examining whether a costs agreement exists simpliciter: Judd v McKeon (1926) 38 CLR 380 at 386 (per Isaacs J).
This conclusion is reinforced by the use of the word “exists” in the provision.
The provisions of s 75(1), 76 and 77 of the Uniform Law Application Act do not alter, in my view, the above construction of s 93C(3) of the Uniform Law Application Act or s 199(2) of the Uniform Law. It is true that s 75(1) of the Uniform Law Application Act contemplates that an assessment of costs must be made in accordance with the terms of any order under which the costs are payable and that the terms of, inter alia, any order made (for example by a court). However, the assessment of costs in those circumstances will ordinarily be made by a costs assessor unless a lump sum order is made. In any event, the issue here is what costs are payable by the defendant to the plaintiff in accordance with the retainer for legal work engaged in by the plaintiff.
Similarly, s 76 of the Uniform Law Application Act really corresponds to the s 199(2)(b) of the Uniform Law. The provisions of s 77(2) of the Uniform Law Application Act are similarly concerned with whether a costs agreement is conclusive of what is the fair and reasonable amount of costs for the work concerned.
The defendant relied on the judgment of the Court of Appeal in Doyle at [55] – [62] (per Hodgson JA, with whom Mason P (as to the subject paragraphs) and Campbell JA agreed). The relevant passages of the judgment of Hodgson JA were as follows:

The principles in Doyle do not, in my view, assist the defendant. The question relevantly considered in Doyle was whether the costs assessor had jurisdiction to determine a question of construction of the costs agreement (Doyle at [40]).
The primary judge in Doyle dealt with a contention that the appeal before him was incompetent because the determination of the costs assessor had merged into a judgment, so that the underlying basis of the appeal had disappeared because the judgment itself was conclusive (Doyle at [37]). The primary judge expressed the view that the construction of the contracts was not an exercise contemplated by the Legal Profession Act 1987 (NSW) as being within the jurisdiction of the costs assessor (Doyle at [38]).
However, on appeal, both parties to the proceeding submitted that a costs assessor did have jurisdiction to construe an agreement and determine its effect (Doyle at [55]).
Hodgson JA did not find otherwise, but determined that where the existence of the terms of the agreement were in dispute “in a way that would require the hearing of evidence to resolve, it may be appropriate for the costs assessor to decline to resolve the dispute” (Doyle at [61]).
A further consideration, in my view, is that the circumstances discussed in Doyle may be distinguished from the present matter. In the present matter, there was no dispute in both party/party cost assessment proceedings as to the terms of the written costs agreements. Rather, in the party/party cost assessment proceedings the defendant provided a copy of the written costs agreement to the costs assessor and asserted that she had a liability to pay the costs of the plaintiff on the basis of that written agreement.
Accordingly, in this matter, there was no dispute in fact or in law raised by the defendant before the costs assessor in that respect. As such, there was no reason the costs assessor was precluded from making the assessment and issuing a certificate which could take effect as a judgment. Of course, the situation would be different if the defendant (as was the case in Doyle) had raised a dispute, such that the costs assessor ought to have declined to make a determination or issue a certificate unless and until that issue was resolved. However, that is not what occurred.
The defendant also referred to the following extract from Bingham at [36]-[37] (per Basten AJA, with whom Meagher JA and White JA agreed):

In reliance on this authority, the defendant submitted that the entire legal and factual substratum for the plaintiff’s abuse of process case must necessarily fail, as “the scheme of this legislation is that a litigant in the position of [the defendant], cannot be bound by what her former solicitor has told a costs assessor in order to make his costs orders, because that was the limit of what he was entitled to recover, particularly if there is no evidence, and there is no evidence, that his client knew about that or authorised it.”
I do not accept the plaintiff’s contentions in this respect, for the following reasons:
The defendant’s submission is not factually accurate. The defendant is said to be “bound by what her former solicitor has told a costs assessor”. However, the party/party costs assessment proceedings in question were between the defendant and B&K, and on the face of the record, it was the defendant that provided the costs agreement to the costs assessor and asserted a liability to pay costs on the basis of that agreement. There is no reference to the plaintiff having any involvement, let alone making submissions to the costs assessor, in the party/party cost assessment proceedings.
In substance, the defendant relies on Bingham as authority for the proposition that the Uniform Law and Uniform Law Application Act permit the defendant to dispute the existence and terms of the written costs agreement, notwithstanding that the defendant had previously relied on those agreements, on the basis that they, in terms, existed. I do not agree with that submission.
In Bingham, while the Court of Appeal held that the primary judge was required to give independent consideration to the force and effect of provisions within a costs agreement (regardless of a cost assessors determination of the issue), this was in circumstances where the determination made by the costs assessor was directly in issue and under appeal. Hence, the Court of Appeal’s finding that s 93C of the Uniform Law Application Act expressly denies that a view formed by a cost assessor will be determinative, must be understood in this context.
In my view, the decision in Bingham is not analogous to the current matter. In the current matter, the defendant has never challenged the determination of party/party costs, where she specifically relied on the existence and terms of the written costs agreements. I accept, as was submitted by the plaintiff, that the defendant never sought to challenge those decisions because, no doubt, they benefitted her. It was only once the existence and terms of the written costs agreements did not benefit the defendant (in the determination of solicitor/client costs), that she sought to dispute the existence of the written costs agreements.
The judgment in Bingham is not authority for the proposition that in those circumstances, an estoppel may not arise because of an abuse of process.
In my view, the conduct of the defendant as discussed in (4) of the preceding paragraph, goes to the heart of abuse of process, as is exemplified in the authorities relied on by the plaintiff: Reichel and Rahme Appeal.
In Rahme Appeal, the Court of Appeal upheld a decision of Schmidt AJ that the defendant’s defence to a claim by the plaintiff in the Local Court for caveat costs constituted an abuse of process, on the basis that the matters raised in her defence had already been the subject of a claim determined in her favour.
Directly analogous to the issues in these proceedings, the issue in Rahme Appeal was the fact that the defence filed by the defendant in the Local Court pleaded, inter alia, that the defendant did not enter a costs agreement with the plaintiff. It was held by Schmidt AJ that this constituted an abuse of process, by reason of the fact that the defendant had previously successfully claimed a legal obligation to pay the plaintiff its invoiced costs, pursuant to a valid costs agreement.
It therefore followed that the defendant resiling from the case she had successfully pursued involved an impermissible abuse of process, and in the circumstances, the defendant’s success in the Local Court was inexplicable: Rahme Appeal at [24].
As noted by Schmidt AJ in Kekatos Lawyers Pty Ltd v Rahme [2023] NSWSC 528 (at [64]):

KEKATOS LAWYERS PTY LTD trading as Kekatos Lawyers v Dana Rahme

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment

JUDGMENT

BACKGROUND

Background to the Amended Summons

The costs agreements relied on by the plaintiff

Pleadings in the Amended Summons

Pleadings in the CC

LEGAL PRINCIPLES

CONSIDERATION

Abuse of process and estoppel

Party/party cost assessment proceedings

Solicitor/client cost assessment proceedings

Is there a basis upon which the Court might conclude there is an abuse of process?

Do the provisions of the Uniform Law and Uniform Law Application Act preclude a finding as to an issue estoppel?

Pleading argument on the basis of embarrassment

CONCLUSIONS

ORDERS AND DIRECTIONS

Endnotes

Parties

Legislation Cited (16)

Cases Cited (13)

Cited By (1)