The letter continued by identifying 22 of the 230 items which the assessor said were allowed by him as dealing with the common law proceedings. These items all related to work connected with a notice of motion in the common law proceedings, and were plainly not connected with the workers compensation claims. The costs assessor said the total value of those items was $615. He issued his Certificate of Determination as to Costs in that amount.
16 Appeal against assessment by costs assessor.
Section 208L is as follows:
" (1) A party to an application who is dissatisfied with a decision of a costs assessor as to a matter of law arising in the proceedings to determine the application may, in accordance with the rules of the Supreme Court, appeal to the Court against the decision.
(2) After deciding the question the subject of the appeal, the Supreme Court may, unless it affirms the costs assessor's decision:
(a) make such determination in relation to the application as, in its opinion, should have been made by the costs assessor, or
(b) remit its decision on the question to the costs assessor and order the costs assessor to re-determine the application.
(3) On a re-determination of an application, fresh evidence, or evidence in addition to or in substitution for the evidence received at the original proceedings, may be given. "
17 Subsection (3), read in association with the previous subsections, indicates that a s 208L appeal is not only limited to being an appeal against a decision made by a costs assessor on a matter of law but also that in such an appeal no materials beyond (a) what was before the assessor and (b) the assessor's reasons for decision, will be before the Supreme Court. By contrast, the appeal under s 208M, if leave is given for it to be brought, is a new hearing in which the evidence need not be limited to that received at the original proceedings. Section 208M is as follows:
" (1) A party to an application relating to a bill of costs 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 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. "
18 The solicitor started appeal proceedings against the costs assessor's decision by summons filed in the Supreme Court on 4 August 1998. Paragraph 2 sought relief because of error of law by the costs assessor, that is, relief pursuant to s 208L. Paragraph 3 sought leave to appeal, that is, pursuant to s 208M, and alleged errors of fact by the costs assessor.
19 Presumably because of the possibility that leave might be granted under s 208M, the evidence before the Master included both the materials which had been before the costs assessor, and affidavit evidence and other materials which had not been before him.
20 Master Harrison's decision.
Master Harrison's decision on the solicitor's summons was confined to a conclusion that the costs assessor had erred in law. She accepted some submissions for the solicitor to this effect but rejected others which contended that some of the cost assessor's procedural steps in the course of reaching his determination involved errors of law. The procedural submissions asserted that not all the material put by the client before the costs assessor had been made known to the solicitor for her to reply to. This was said to have been the case in regard to documents 2 and 5 in the list I have set out above. There were a number of reasons why the Master could properly reject this submission, but it is unnecessary to refer to them because no point of this kind was made on behalf of the solicitor in the appeal proceedings in this court.
21 The Master stated the basis of her conclusions in favour of the solicitor in two separate parts of her reasons.
22 In the first part she said: (1) she was of the view that a large part of the solicitor's work in seeking to recover the file from the previous solicitor should have been allowed as fair and reasonable costs: these were "not costs which could have been considered costs of or relating to the Workers Compensation proceedings", and in not allowing any of those costs the costs assessor had "made an error of principle"; (2) the client had asked the solicitor to look over a letter she was sending to the Bar Association complaining about the conduct of the counsel who had returned his brief in July 1993; the costs assessor had allowed nothing in regard to this letter; but (the Master said) the relevant costs "should have been allowed as fair and reasonable"; (3) she thought something should have been allowed for item 1 in the bill of costs, the initial consultation.
23 In dealing with item 1, the Master accepted a submission on behalf of the solicitor that a solicitor may be under a duty to do more than fulfil the client's express instructions. She referred to Hawkins v Clayton (1988) 164 CLR 539 and Waimond Pty Ltd v Byrne (1989) 18 NSWLR 642. In the latter case Kirby P, referring to what Deane J had said in Hawkins, said that the contract of retainer did not chart exclusively the parameters of the solicitor's duty and that depending on the circumstances of the particular case, the duty could require the taking of positive steps beyond the specifically agreed professional task or function when necessary to avoid a real and foreseeable risk of economic loss to the client.
24 The Master was of opinion that at the initial conference "it would have been essential" that the solicitor be provided with information about the common law proceedings. She again thought it was "an error of principle" that in those circumstances costs had not been considered as fair and reasonable and allowed.
25 In the second part of her reasons (the last two paragraphs), which directly stated the basis for her conclusions, the Master was perhaps more limited than she had been in the first part. She said:
" At first glance, the reduction of a bill of costs between a solicitor and her client from $16,523.55 to $615 seems harsh particularly when the work done by a solicitor in personal injury matters can overlap between the workers compensation and common law proceedings. The items the costs assessor allowed appear to be the work done to lodge the notice of motion to extend the limitation period in the common law proceedings. This work was conceded by the respondent. It appears that counsel's fees for drafting the motion and giving advice in relation to the Limitation Act in September 1993 were disallowed.
With respect the costs assessor has taken a narrow view of which costs are fair and reasonable as between solicitor and client. I have reached the conclusion that the costs assessor has erred in law in not considering the costs of obtaining the file from the former solicitor's initial conference and carrying out the respondent's instructions as fair and reasonable. The certificate of assessment should be set aside. I uphold the appeal. The matter should be referred to a new costs assessor for assessment. As the appellant was successful in her appeal she should be awarded costs of the appeal and the costs of the assessment. "
26 Assuming that the foregoing two parts of the Master's reasons were intended to be read cumulatively, and putting them together in terms of the relevant words in s 208L(1), it seems to me clear that necessarily involved in her conclusions was the opinion that the costs assessor was bound as a matter of law to decide, and erred in law in not deciding:
(a) some amount must be allowed to the solicitor for item 1;
(b) some amount must be allowed to the solicitor for reading the client's letter (items 15 and 16);
(c) some amount must be allowed for the costs of obtaining the file from the client's previous solicitors (various items).
27 Application for extension of time for seeking leave to appeal against judgment of Master Harrison.
For the client, an application for leave to appeal against the judgment of Master Harrison was filed. Technical difficulties arose in regard to the prosecution of this application in that there was some non-compliance with times within which various steps were required to be taken by the rules. The non-compliance with the rules led to the situation where it was necessary for the client to seek leave for extensions of time before the application for leave to appeal could be regularly heard. Objection was taken on behalf of the solicitor to any extension of time. However, the times involved in the non-compliance with the rules by the client were small, and were, in a fashion, explained. Counsel for the solicitor frankly said there was no relevant prejudice which he could rely on in opposing the extension of time applied for. In the circumstances it seems to me that the necessary extension of time should be granted.
28 Application by Attorney-General to appear as amicus curiae.
I mentioned in the first paragraph of these reasons that Master Harrison ordered the client to pay the solicitor's costs of the appeal to her and also of the assessment by the costs assessor. Leave was sought on behalf of the Attorney-General to appear as amicus curiae in order to argue that Master Harrison had no power to make those costs orders. The argument the Attorney-General wished to put was that on the proper construction of the Act the costs assessor had no power to make costs orders (with certain exceptions not applicable in the present case) and that the same lack of power applied also to the Master when exercising Supreme Court jurisdiction to hear an appeal against the costs assessor's determination.
29 This point arises in the case whether or not the order made by Master Harrison setting aside the costs assessor's assessment remains intact after the appeal. If that order should remain undisturbed, the Attorney-General would argue that Master Harrison's costs orders should be set aside, either wholly or partly. If this court sets aside Master Harrison's orders setting aside the costs assessor's assessment, then this court will have to decide what to do about the costs orders below and in this court; the Attorney-General would wish to argue that this court had no power either to make costs orders against the unsuccessful party.
30 I will return to the costs question after considering the merits of the arguments put on behalf of the client for overturning Master Harrison's decision to set aside the costs assessor's assessment.
31 Consideration of arguments that Master Harrison was wrong in setting aside the determination of the costs assessor.
In considering whether the Master was right in the view which was implicit in her upholding of the appeal that the costs assessor had been bound as a matter of law to allow some costs to the solicitor for the work she specified, it is necessary to bear in mind the sharp distinction made by the Act between appeals under ss 208L and 208M. Some effect must be given by the court to the statutory statement that, under the earlier section, the appeal is against the decision as to a matter of law, and, under the following section, if leave is granted, is a complete new hearing. With that in mind it is necessary to consider what the costs assessor was required by the Act to do, and what he actually did, in the present case.
32 Section 208A(1) obliged the costs assessor to consider:
" (a) whether or not it was reasonable to carry out the work to which the costs relate, and
(b) whether or not the work was carried out in a reasonable manner, and
(c) the fairness and reasonableness of the amount of the costs in relation to that work. "
33 Section 208A(2) provided:
" A costs assessor is to determine the application by confirming the bill of costs or, if the assessor is satisfied that the disputed costs are unfair or unreasonable, by substituting for the amount of the costs an amount that, in his or her opinion, is a fair and reasonable amount. "
34 Section 208A(5) was as follows:
" A costs assessor may not determine that any part of a bill of costs that is not the subject of an application is unfair or unreasonable. "
35 Section 208B provided that in assessing what was "a fair and reasonable amount of costs, a costs assessor may have regard" to any or all of the matters then listed in following paragraphs (a) to (j). For present purposes the following of those paragraphs are particularly relevant:
" ...
(e) the skill, labour and responsibility displayed on the part of the barrister or solicitor responsible for the matter,
(f) the instructions and whether the work done was within the scope of the instructions,
(g) the complexity, novelty or difficulty of the matter,
(h) the quality of the work done,
(i) the place where and the circumstances in which the legal services were provided,
... "
36 I now come to the question whether the errors which the Master said she thought had been made by the costs assessor were errors of law.
37 The materials before the costs assessor when he made his assessment gave rise to a basic issue. Although the client in some parts of her materials said she had never given instructions to the solicitor in relation to the common law proceedings, it appears from all her materials read together that in substance she was saying that although both matters had been put before the solicitor, it was the workers compensation proceedings which she wanted attended to first and in respect of which almost all the work done by the solicitor was done in the approximately fourteen months in which the solicitor was retained by her. The solicitor on the other hand was contending that "the thrust was always towards the Common Law claim" and the greater part of the work was, as a result, done in regard to the common law proceedings.
38 On this basic issue, on the materials before him, the costs assessor formed the opinion that "most of the legal services provided by" the solicitor to the client were "properly attributable" to the workers compensation claims. I cannot see any error of law in this finding, or even any question of law. In the light of that finding, the costs assessor formed an opinion about the amount to be allowed to the solicitor in respect of the services provided by the solicitor which the costs assessor thought were properly referable to the common law proceedings "with respect to which" his opinion was that the solicitor "had little input". In deciding what was fair and reasonable, the costs assessor had to consider the matters in s 208A(1) set out above, and was entitled to have regard to the paragraphs in s 208B, also set out above. Taking all those matters into account, and on the materials before him, it seems to me it was well within the boundaries of reasonable judgment to allow the amount which he did allow to the solicitor. Depending on the view he took of the materials before him, he could have allowed more and could have allowed less. The decision to fix the amount which he fixed does not seem to me, in the circumstances of the present case, to have involved any question of law. His decision was a matter for his judgment in the light of his experience, applied to the facts and arguments concerning those facts which were before him.
39 An argument which appears to have impressed the Master, and which was repeated in this court, was that in regard to item 1, since there is no doubt that in the initial conference both the compensation claims and the common law proceedings were referred to, and since the costs assessor allowed nothing for this item, the costs assessor must have been both (a) wrong and (b) wrong in law. I do not agree that the costs assessor made either error, but I need only deal with the second, the alleged error of law. As to the first alleged error, my view is that it was open to the costs assessor to have taken the view that the common law proceedings played so little part in the initial conference that he could arrive at the overall figure which he thought fair and reasonable by reference only to those items which he specified. If I am wrong in that however, in the sense that other minds would regard my opinion and that of the costs assessor as mistaken, I do not think that it could be said that the costs assessor's mistake was any other than a mistake either of a factual kind or one of judgment upon facts not involving any error of law. I do not think, to use one of Lord Radcliffe's formulations in Edwards v Bairstow [1956] AC 14 at 36, that the materials on which the costs assessor arrived at his decision were "inconsistent with and contradictory of" his decision, or that there was a "true and only reasonable conclusion" contradictory of the opinion he formed. This way of approaching the distinction between questions of law and of fact was adopted by Gibbs J in Aafjec v Kearney (1976) 180 CLR 199 at 207, and a substantially similar approach was, in my opinion, adopted by this court in Mahony v Industrial Registrar of NSW (1986) 8 NSWLR 1. The matter has recently been very usefully examined in an article "Questions of Law" (1998) 114 LQR 292 (Timothy Endicott). The article's conclusions, if I understand them correctly, are to the same effect.
40 What I have said about the solicitor's argument concerning item 1 applies also to what was essentially the same line of argument in regard to items 15 and 16. Similar also is my view about the costs which accumulated in the course of obtaining from the client's previous solicitors the file or files they held concerning her case. Additionally, in regard to these costs, it seems to me that it was open to the costs assessor to take the view that there were much less expensive ways than those adopted by the solicitor of obtaining the essential information contained in the previous solicitor's files, also, that in any event the need for obtaining those files was much more directly related to the compensation claims than the common law proceedings and that the combination of these factors, upon his reading of the materials before him provided the factual foundation justifying the overall conclusion he eventually arrived at that $615 was in the circumstances fair and reasonable.
41 It is my opinion therefore that the Master was in error in holding that the costs assessor had made a decision as to a matter of law arising in the course of his assessment which was a wrong decision. I would therefore propose that leave to appeal be granted and the orders made by the Master set aside so that the costs assessor's certificate of determination will stand as the determination of the application for assessment of costs made by the solicitor binding upon the parties.
42 The costs argument.
The Attorney-General sought to argue that the general discretion concerning costs conferred upon the court by s 76 of the Supreme Court Act 1970 should be read subject to the regime instituted by Pt 11 of the Legal Profession Act 1987, which has the general heading " Legal fees and other costs ". Part 11 runs from s 173 to s 208V. To see what regime it institutes it is necessary to look through its seven Divisions.
43 Division 1 contains definitions and confers rights upon clients as against barristers and solicitors in regard to various matters concerning costs. Division 2 contains provisions obliging barristers and solicitors to make specified disclosures to clients concerning matters relating to costs. Division 3 provides for the making of costs agreements between clients and barristers or solicitors. Division 4 makes miscellaneous provisions relating to bills of costs. Division 5 provides that regulations may be made fixing costs. Division 5A provides for mediation of costs disputes. To this point there is only one reference to the costs of the assessment itself. Division 6 is the only Division which makes any further provision for payment of the costs of assessments.
44 Division 6 deals with assessment of costs and has five subdivisions. Subdivision 1 makes provision for applications for assessment of costs by clients, barristers, solicitors and parties to proceedings which resulted in orders for costs. Section 206 in subdivision 1 provides for the referral of matters to costs assessors. Subdivision 2 provides for the assessment of bills of costs. Subdivision 3 makes further provision for assessment of costs when the costs were ordered by a court or a tribunal. Subdivision 4 deals with the enforcement of assessments once made and, in ss 208L and 208M, for the two different kinds of appeal against a costs decision of a costs assessor which have been discussed earlier in these reasons. Subdivision 5 deals with some miscellaneous matters.
45 The regime regarding costs of assessments which the Attorney-General submits is to be found in Pt 11 is one under which clients are entitled to obtain an independent assessment of a practitioner's bill of costs without fear of having to pay further costs as the price for subjecting the bill of costs to assessment. This is said to be so notwithstanding the almost complete silence of subdivisions 1-5A of Pt 11 about costs of assessment, a silence which is broken in subdivision 6 only in regard to the possibility of particular costs orders being made in the very limited circumstances for which specific provision is made in ss 182(3), 208A(4), 208F(4) and 208JA. It is then further submitted that the regime said to be discernible in Pt 11 applies not only in regard to the power of a costs assessor to make orders for costs of an assessment, but also to the power of the court when appeals are brought to it under either s 208L or 208M.
46 I am prepared to assume, without full consideration of the question, that the submission made for the Attorney-General is right insofar as it refers to the powers of costs assessors. Part 11 makes it plain that they are in quite a different position from judicial officers of the Supreme Court. However, it does not seem to me to follow from that assumption that the language of Pt 11 requires or justifies restriction of the power of the Supreme Court to award costs in its discretion in matters before it.
47 In particular, I am of this opinion in regard to appeals under s 208L. That is the only kind of appeal with which the present case is concerned. In such an appeal all that is raised for the decision of the court is a question of law. I see nothing in the provisions of Pt 11 preceding or following s 208L which even hints at there being any reason why in regard to a disputed question of law decided by the Supreme Court the ordinary rules concerning costs should not apply. In regard to so much of the submission for the Attorney-General as contends that in a s 208L appeal, Pt 11 of the Legal Profession Act has the effect of restricting the powers of the Supreme Court in regard to costs, my opinion is that the submission should not be accepted.
48 My opinion on the Attorney-General's costs power argument is limited to what I have said in the preceding paragraph in regard to appeals under s 208L. The position is not necessarily the same in regard to appeals permitted by leave under s 208M. As it is not necessary in this case to come to a conclusion on the Attorney-General's argument in so far as it relates to such appeals, I refrain from doing so. It is possible to see some arguments why these appeals might stand in a different position from s 208L appeals, although it is also possible to see some reasons why they should be treated as being in the same position.
49 For purposes of the present case my opinion is that both Master Harrison and this court had the ordinary powers of the Supreme Court concerning costs orders in regard to the only appeal pressed by the solicitor before Master Harrison and to the appeal from her decision from which the client sought leave to appeal to this court.
50 In my opinion, applying the ordinary rules, the client should have her costs of the proceedings before Master Harrison and also of the proceedings in this court, such costs to be borne by the solicitor.
51 I appreciate that this means that the solicitor's application for an assessment of her costs imposes a more onerous burden on her in regard to her costs of the assessment process than would be the position if the Attorney-General's submissions were accepted. I appreciate also that the Attorney-General's submissions stemmed from the view that the new system of assessment of costs, replacing the old system of taxation of costs, was intended to be cheaper than the older system. That result is to some extent achieved by the procedures by which costs assessors reach their determinations. However, those procedures change when the appeal system brings a cost assessor's determination before the court, where the procedure is likely to be more costly than it was before the costs assessor. Someone has to bear these further costs. As I have already said I cannot see in the legislation any indication that it changes the ordinary position concerning costs in a s 208L appeal. If the government thinks it desirable to change that ordinary position, it seems to me that it will be necessary for the government to seek the passing of clear legislative provisions to achieve that result.
52 Orders.
In my opinion the court should make the following orders:
1. Leave to appeal against orders of Master Harrison granted.
2. Appeal allowed.
3. Orders of Master Harrison set aside.
4. The costs of the client in this court (in which she was the claimant/appellant) and in the proceedings before Master Harrison (in which she was the respondent) are to be borne by the solicitor (the opponent/respondent in this court and the appellant before Master Harrison).
53 STEIN JA: I agree with Priestley JA.
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