Kulevska v Coshott

Conder v Silkbard [1999] NSWCA 459 CASES CITED : Minerals Corporation Ltd v Abbot [2004] NSWSC 246 Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 R v Hickman; Ex parte Fox (1945) 70 CLR 598

Milica Kulevska - Plaintiff PARTIES : Robert Gilbert Coshott - Defendant

Mr M N Thompson - Plaintiff COUNSEL : Mr R G Coshott in person - Defendant

SOLICITORS : Stanefska & Associates - Plaintiff N/A - Defendant

• 8 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

JUDGMENT 1 HIS HONOUR: This is a dispute about an assessment of costs. The plaintiff, Mrs Milica Kulevska, seeks to set aside a determination of a costs assessor in two cases in which the defendant, Mr Robert Gilbert Coshott, had been the plaintiff's solicitor. 2 The relevant facts may be briefly described. From 16 September 1985 until a date in 1989 Mr Coshott acted for the plaintiff in two separate claims for damages for personal injury. In 1989 the plaintiff transferred her instructions to another solicitor. In December 1989 Mr Coshott served bills of costs in the two matters on the plaintiff. In December 1990 the plaintiff sought and was granted leave by the Court to refer the two bills for taxation out of time, but for some unknown reason the taxation did not occur. 3 Mr Coshott revived the matter in September 2005. On 20 September 2005 Registrar Walton decided that Mr Coshott needed no further order and that he could apply for the two bills to be assessed under the procedure provided by the Legal Profession Act 1987. On 27 September 2005 Mr Coshott made an application for assessment of the two bills of costs. 4 Mr Michael Eagle was appointed as costs assessor. Written submissions by the plaintiff were made to the costs assessor on 11 October 2005, by Mr Coshott on 13 October 2005, and further submissions by the plaintiff on 19 October 2005. In particular, the plaintiff submitted that the bills did not conform with reg 45 of the Legal Profession Regulation 2002 (required by s 193 of the Legal Profession Act 1987) and accordingly were not bills of costs which could be the subject of an assessment under that Act. 5 On 23 December 2005 the costs assessor issued his certificate of determination in respect of one case and on 23 January 2006 he issued his certificate of determination in respect of the second case. The assessment in each case contains the following statement: …

2. Information requested from Applicant By Notice to the Applicant solicitor I required documents and information on 31 August 2005. The bill did not comply with regulation 22A of the 1987 Act and the applicant was asked to number each item of the bill, the identity of the person carrying out work, the time each item took to execute and the number of pages involved in any photocopies or faxes. The applicant then resubmitted the bill which numbered each item and identified the person who carried out the work. The applicant did not specify how long each item took or the number of pages of photocopies which were being claimed.

… (I note that reg 22A in the Legal Profession Regulation 1994 was to the same effect as reg 45 in the Legal Profession Regulation 2002 .) 6 The plaintiff was never served with the resubmitted bills referred to by the costs assessor in the quoted paragraph. 7 I note that Mr Coshott says that the only difference between his original bills and the resubmitted bills was that in the latter each item was individually numbered and the person carrying out the work was stated as being himself. 8 On 20 February 2006 the plaintiff's present solicitor made an application for a review of the costs assessor's determinations. The application for review was rejected by the Court for failure to give notice of the application to the other party not less than seven days before the application was made, as required by s 373(5) of the Legal Profession Act 2004 (and s 208KA(5) of the Legal Profession Act 1987). 9 On 17 March 2006 Mr Coshott gave notice of an intention to serve a bankruptcy notice on the plaintiff claiming a total debt of $5,645, being the total amount of the two costs certificates plus $65 fee for entering judgment. 10 On 9 May 2006 the plaintiff commenced the present proceedings. On 19 May 2006 judgment was formally ordered that the plaintiff pay Mr Coshott the sum of $5,580.

The plaintiff's submissions 11 Mr M N Thompson, appearing for the plaintiff, relies upon the following submissions:

(a) Mr Coshott brought the application for assessment of the two bills of costs under the Legal Profession Act 1987 (even though the bills are dated 8 December 1989 and were served in December 1989). That section provides that a legal practitioner " who has given a bill of costs in accordance with this Part " may apply for an assessment of those costs.

(b) Section 193 of the Act states that the regulations may make provisions for or with respect to, the form of, and the particulars to be included in, bills of costs.

(c) The Legal Profession Regulation 1994 , reg 22A, prescribed the particulars which must be included in a bill of costs. That Regulation was superseded by the Legal Profession Regulation 2002 , reg 45. The Regulation stated that a bill of costs must include the following particulars: …. (e) the work done in providing the legal service, (f) the period over which that work was done, (g) the identity of the persons who did that work (including the position of the persons, for example, partner, associate), (h) the basis on which the costs have been calculated and charged (whether on a lump sum basis, an hourly rate basis, an item of work basis, a part of proceedings basis or other basis), (i) the facts relied on to justify the costs charged by reference to the above, the practitioner's skill, labour and responsibility, the complexity, novelty or difficulty of the matter, the quality of the work done or any other relevant matter.

(d) The only documents which Mr Coshott had served on the plaintiff were the two original bills dated 8 December 1989. These bills did not contain all of the prescribed particulars. They did not particularise - (i) the identity of the person who did the work; (ii) the status of that person; (iii) the basis on which the charges were made; and (iv) the facts relied upon to justify the charge.

(e) Accordingly, the costs assessor had no jurisdiction - he was dealing with bills which were not bills required by s 193 of the Legal Profession Act 1987 and the Regulation . The assessment was made without jurisdiction.

(f) Section 192 of the Act provides that proceedings for the recovery of costs must not be commenced or maintained against any person until at least 30 days have passed since the bill for those costs was given to the parson. The resubmitted bills were not given to the plaintiff at all. Section 192 is a mandatory provision ( Conder v Silkbard [1999] NSWCA 459), and therefore the costs assessor had no jurisdiction to deal with the resubmitted bills.

(g) The provision of s 208K of the Act, which stated that a costs assessor's determination is binding and no appeal or other review lies (except by a review panel under the Act), cannot apply to protect a jurisdictional error (citing R v Hickman; Ex parte Fox (1945) 70 CLR 598).

(h) Alternatively, although the costs assessor had been furnished with resubmitted bills, these bills had not been served on the plaintiff, so that she had no opportunity to make submissions thereon, amounting to a denial of procedural fairness.

The defendant's submissions 12 Mr Coshott, appearing for himself, relies upon the following submissions:

(a) Section 208K of the Legal Profession Act 1987 is a privative provision which prevents any appeal or other review of a costs assessor's determination, other than by a review panel (ss 208KA to 208KL) or by an appeal to the Supreme Court on a question of law or by leave (ss 208L and 208M). The plaintiff had sought to have the determinations reviewed by a review panel but that application was out of time.

(b) These proceedings are an attempt to circumvent s 208K and are prohibited by that section.

(c) Section 192 is not relevant. It applies only to " proceedings for the recovery " of costs and does not apply to a costs assessment. A costs assessment does not constitute proceedings in this or any other court: Minerals Corporation Ltd v Abbott [2004] NSWSC 246. A costs assessment is an administrative and not a judicial proceeding.

(d) The provisions of the Regulation relied upon by the plaintiff were inserted by the Legal Profession Amendment Act 1993 which took effect in 1994. They post-date the delivery of the bills and cannot apply retrospectively to a bill which was valid and served in 1989.

(e) There was no denial of procedural fairness in relation to the resubmitted bills. The only changes made the defendant made to the resubmitted bills were to number each item consecutively and to identify himself as the person who did the work. The plaintiff had previously made submissions on the original bills and thus suffered no prejudice in not receiving copies of the resubmitted bills.

(f) The relief now claimed by the plaintiff is discretionary. The plaintiff had a statutory right of appeal to a review panel and she is now attempting to circumvent the statutory scheme.

Conclusion 13 The bills of costs in the present case were prepared and delivered under the regulatory scheme that applied in 1989, before the commencement of reg 22A of the Legal Profession Regulation 1994. Accordingly the bills were apparently valid when served and could be relied upon by Mr Coshott in the costs assessment that was undertaken: s 30(b)(c), Interpretation Act 1987. 14 It follows that I must reject the plaintiff's submission that there was no jurisdiction on the part of the costs assessor to consider and determine the application for assessment. 15 Moreover, it seems to me that the provisions of reg 22A of the 1994 Regulation (and reg 45 of the 2002 Regulation) are directory rather than mandatory. Although the distinction is now in disfavour, it is a convenient way of ascribing the legislative purpose. The fundamental question is whether it was a purpose of the legislation that an act done in breach of the provision should be invalid: Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 at 390 [93]. That is, the provision is complied with if there has been "substantial compliance" with it: Project Blue Sky at 390 [92]. This conclusion is reinforced by the fact that the costs assessor may require further particulars to be furnished by the applicant (s 207(2) of the Act) and, in considering an application is not bound by the rules of evidence and may inform himself or herself on any matter in such manner as he or she thinks fit (s 208(2) of the Act). As was said in another context: "The machinery of government would not work unless there was a little flexibility in its joints"'. In the present case the bills of costs substantially comply with the Regulation and substantial compliance is sufficient. 16 The costs assessor in the present case, as he was entitled to do, required Mr Coshott to provide further particulars (s 207 of the Act), which resulted in the bills being resubmitted. The resubmitted bills did not make any change of substance to the original bills. I have noted that the plaintiff was afforded the opportunity of making submissions on the original bills and did so. 17 Accordingly it does not seem that there was any denial of procedural fairness to the plaintiff. None of the items of costs in the bills were changed and the total amount claimed remained unchanged. 18 It follows that even if I were wrong in my conclusion the bills are valid, I would not in the exercise of the Court's discretion be prepared to grant the relief which the plaintiff seeks. The plaintiff is simply delaying the inevitable. 19 The formal order of the Court is that the summons be dismissed. The exhibits may be returned.

I hereby certify that the preceding 19 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice D H Lloyd.

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.