Lawrence v Nikolaidis

COUNSEL : Mr J K Chippindall (Defendant) Mr W Lawrence (Plaintiff in Person) SOLICITORS : M D Nikolaidis & Co (Defendant) CATCHWORDS : Review decision of costs review panel and costs assessor LEGISLATION CITED : The Legal Profession Act 1987 - s 208 Larsen v Vile [1999] NSWCA 397 Chapman Ltd v Yandell [1999] NSWCA 361 Atlas v Kalyk [2001] NSWCA 10 (12 February 2001) CASES CITED : Guss v Veenhuizen [No 2] (1976 136 CLR 47 Cachia v Hanes (1994) 179 CLR 403 Dobree & Ors v Hoffman (1996) 18 WAr 36 Coulter v Regina (1988) CLR 350 CDJ v VAJ [1998] HCA 67 DECISION : (1) The apeal is dismissed; (2) Leave to appeal is refused; (3) The costs assessor's decision of 22 May 2001 is affirmed; (4) The summons is dimissed; (5) The plaintiff to to pay the defendant's costs as agreed or assessed.

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

10090/2002 - WAYNE LAWRENCE v M D NIKOLAIDIS & CO & LEON NIKOLAIDIS

JUDGMENT (Review decision of costs review panel and costs assessor) 1 MASTER: By amended summons filed 22 March 2002 the plaintiff seeks orders firstly, that the determination of costs assessor Mr M W Robinson in proceedings 92058/2000 made on 22 May 2001 be set aside; secondly, that the decision of the review panel by members Mr Jeremy Cockle and Mr John L Sharpe dated 12 December 2001 be set aside. The plaintiff relied on his four affidavits namely those dated 14 January 2002, 11 March 2002, 20 March 2002 and 30 April 2002. The defendant relied on his affidavit sworn 18 April 2002. As there have been various legal proceedings between the parties, I shall refer to Wayne Lawrence as the plaintiff and Leon Nikolaidis as the defendant. 2 The plaintiff commenced proceedings against the defendant in the Local Court Manly for alleged work done in relation to the building of the defendant's home at Newport between 1988 and 1992. Initially the defendant filed a defence which was struck out but costs were ordered to be costs in the cause. The defendant filed an amended defence which alleged that the plaintiff never did any building work whatsoever and alternatively pleaded the expiration of the Limitation Act and s 45 of the Builders Licensing Act. On 10 May 1999 after a hearing the Magistrate ordered that the claim be struck out and that there be verdict for the defendant. At the conclusion of the Local Court hearing Mr Hale, Counsel representing the defendant, sought costs in the amount of $20,000. The Magistrate did not accede to awarding costs in the sum of $20,000 but ordered that the plaintiff is to pay the defendant's costs to be assessed pursuant to s 34(1) on the basis of two full days hearing. The plaintiff appealed from the decision of the Local Court, Manly to this court. On 6 September 1999 Sully J dismissed the appeal and ordered the plaintiff to pay the defendant's costs. It is the costs in the Local Court and the costs order in the Supreme Court that form the basis of the costs assessment. 3 In these current proceedings the plaintiff seeks orders firstly that the court make a determination that it considers that the costs review panel should have made or affirmed the report of D G Thompson and objections as party/party costs; secondly, remit the determination to the costs review panel for determination in accordance with law; thirdly, that the defendant pay the costs of this summons together with the costs incurred by the plaintiff in the costs assessment 92058/2000; fourthly, that the bill of costs be referred to a Master for re-determination; fifthly, an order that the determination of costs by the costs assessor dated 22 May 2001 be set aside; sixthly, that the review panel's decision dated 12 December 2001 be set aside; and seventhly, that the defendant provide a bill in proper form as per a party/party basis and based on a two day hearing in a local court.

The costs review panel 4 Section 208KC of the Legal Profession Act 1987 (the Act) states: "General functions of panel in relation to review application

(1) A panel constituted under this Subdivision may review the determination of the costs assessor and may: (a) affirm the costs assessor's determination, or

(b) set aside the costs assessor's determination and substitute such determination in relation to the costs assessment as, in their opinion, should have been made by the costs assessor who made the determination that is the subject of the review. (2) For the purposes of subsection (1), the panel has, in relation to the application for review, all the functions of a costs assessor under this Part and is to determine the application, subject to this Subdivision and the regulations, in the manner that a costs assessor would be required to determine an application for costs assessment.

(3) However, the review is to be conducted on the evidence that was received by the costs assessor who made the determination that is the subject of the review and, unless the panel determines otherwise, the panel is not: (a) to receive submissions from the parties to the assessment, or

(b) to receive any fresh evidence or evidence in addition to or in substitution for the evidence received by the costs assessor. …" 5 Hence s 208KC(3) provides that the review is to be conducted on the evidence that was received by the costs assessor who made the determination. The plaintiff did not make submissions as to where the costs review panel erred but rather pointed out that he availed himself of the proper avenue of review before appealing to this court. The thrust of the plaintiff's complaints were directed at the decision of costs assessor. The bills of costs totalled $49,738.40. On assessment, the amount of costs were reduced to $27,109.56. The costs review panel affirmed the decision of the costs assessor.

The costs assessor's decision 6 The approach that should be taken by the court in an appeal from a costs assessor was set out in Larsen v Vile [1999] NSWCA 397 and Chapmans Ltd v Yandell [1999] NSWCA 361. An appeal under s 208L is confined to law. 7 On 22 May 2001 the costs assessor issued a certificate of determination of costs. It assessed as fair and reasonable costs to be paid by the applicant at $27,409.56. 8 Section 208L of the Act provides: "Appeal against decision of costs assessor as to matter of law

(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." 9 The costs assessor gave reasons and relevantly stated: "The costs were assessed on the basis of the information supplied in the applicant's bills of costs and various submissions and correspondence which passed between the parties and myself. I was not assisted by the respondent's lengthy and often acrimonious criticism of the applicant's case, and I was unable to accept the objection consistently made that the applicant could recover no costs for his work because he was a solicitor litigant. The law does not prevent him from recovering his reasonable professional costs in acting for himself in litigation, see most recently Atlas Corporation Pty Limited v F G Kalyk New South Wales Court of Appeal (unreported), 12 February 2001. I considered that the proper approach to assessing costs in this case was to compensate the solicitor time properly spent in preparation of his defence both in the Court below and the appeal. Particularly in the Local Court bill there were many excessive claims. I did not consider that the hourly rate claimed by the solicitor or his secretary were reasonable. In the case of the solicitor I allowed $215.67 per hour being two-thirds of the amount claimed. In the case of the secretary I allowed three-quarters of the amount claimed namely $63.00 per hour. I enclose herewith a Schedule of all items reduced in each bill, which will clarify the extent to which I allowed the objection to each item.

I have to record that I was less than impressed with the preparation of the Local Court bill in particular. The summary page 13 contained a number of mistakes, and it is apparent that the total professional costs summarised should be reduced by $4,324.80. Despite my request to the applicant I was never provided with a copy of the bill that was correctly numbered. If this has led the applicant into further error, then he only has himself to blame." 10 The costs assessor then summarised the amounts he allowed and in relation to costs the costs assessor stated: "… A great deal of time in this unnecessarily lengthy assessment has been spent in unravelling error, and in the circumstances I considered that the applicant should recover only a part of the filing fee, and each party should pay my fees in equal proportion." 11 The plaintiff's submissions for the most part are contained in a green folder. The first alleged error of law is that the costs assessor erred in law by not ensuring that the plaintiff did not receive all the documents. 12 On 7 August 1999 the defendant prepared a bill of costs in the sum of $42,055.70. On 5 November 1999 the plaintiff prepared a bill of costs in relation to the Supreme Court proceedings totalling $7,682.70. These bills of costs were before the costs assessor, Mr Robinson. The plaintiff filed a notice of objection to the applicant's bill of costs which were prepared by D G Thompson & Company, Costs Assessors. It raised general objections to the hourly rate charged by a solicitor and secretary and then made specific objections, item by item. This document was also before the costs assessor. The initial letter written by the costs assessor to the parties which would have given direction as the filing of submissions is not in evidence before me. There were some further documents before the costs assessor namely the application for assessment of party/party costs, a reply and objections, documents including letters from the plaintiff such as that dated 14 February 2001 wherein he requested the defendant to be reported to the Legal Services Commissioner (see para 3 of the reasons for determination of the costs review panel). The costs assessor commented that he was not assisted by the plaintiff's lengthy and often acrimonious criticism of the applicant's case. 13 In particular the plaintiff has complained that the defendant forwarded a nine page letter dated 19 March 2001 to the costs assessor and did not forward a copy to him so he was denied an opportunity to respond to it. The costs assessor's initial letter dated 31 January 2001 to the parties setting out the procedure to be followed has not been placed in evidence. However, part of that letter dated 31 January 2001 read "A copy of all submissiond and correspondence with the costs assessor must be sent contemporaneously to all other parties." On 1 March 2001 the costs assessor informed the parties that perusal of the file led him to the conclusion that both parties may not be complying with his direction of 31 January 2001. The letter concluded by stating that the issues arising from non-service of correspondence on the opposing party will be dealt with firstly by way of the costs assessment. 14 On 19 March 2001 the costs assessor wrote to the defendant and stated: "I refer you to my direction to you dated 1 March 2001 to ensure that a copy of all submissions and correspondence with me be sent contemporaneously to the Cost Respondent herein. I require you to inform me whether you provided a copy of your letter to me dated 19 February 2001, together with enclosures, to the Costs Respondent, and if so on what date." 15 It is not known whether the defendant replied to the costs assessor's letter of 19 March 2001. In any event on 19 March 2001 the costs assessor also wrote to the plaintiff but the contents of this letter are not in evidence. It is not known whether the costs assessor forwarded a copy of the defendant's letter of 19 February 2001 to the plaintiff. However, the plaintiff had filed a notice of objection. The plaintiff replied on 22 March 2001 to the costs assessor's letter of 19 March 2001 and did not complain about non-receipt of the letter of 19 February 2001. 16 Section 208 (1) and (2) read: "Consideration of applications by costs assessors

(1) A costs assessor must not determine an application for assessment unless the costs assessor: (a) has given both the applicant and any barrister, solicitor or client or other person concerned a reasonable opportunity to make written submissions to the costs assessor in relation to the application, and

(b) has given due consideration to any submissions so made. (2) In considering an application, a costs assessor is not bound by rules of evidence and may inform himself or herself on any matter in such manner as he or she thinks fit." 17 In addition to the plaintiff's notice of objection, the plaintiff had forwarded unsolicited correspondence to the costs assessor, some of which the costs assessor found unhelpful. It is my view that in these circumstances the costs assessor gave each party a reasonable opportunity to make written submissions to him and he gave due consideration to those submissions in accordance with s 208(1) of the Act. 18 The second ground of appeal is that the costs assessor did not review the file when making the assessment on the defendant's bill of costs and that the costs assessor did not give due and proper consideration to the plaintiff's objections and submissions. 19 In deciding what was fair and reasonable the costs assessor had to consider the matters in s 208A(1) set out below and was entitled to have regard to the paragraphs in s 208B, also set out below.

"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." 20 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." 21 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." 22 The costs assessor does refer to matters that were raised in the plaintiff D G Thompson's drafted objections and gave them due consideration. There is no error of law. 23 The plaintiff then submitted that the costs assessment scheme is in breach of the Australian Constitution for reasons I cannot fully appreciate. Further, it was submitted that a costs assessor is not accountable to any authority or government department. These submissions are noted. Neither of these submissions has led me to conclude that the costs assessor erred in law. 24 The next ground of appeal is that the costs assessor erred in law as he did not report the defendant to the Legal Services Commissioner. 25 Section 208Q reads: "Referral of misconduct to Commissioner

(1) If a costs assessor considers that any conduct of a barrister or solicitor involves the deliberate charging of grossly excessive amounts of costs or deliberate misrepresentations as to costs, the costs assessor must refer the matter to the Commissioner.

(2) For the purposes of this Act, the deliberate charging of grossly excessive amounts of costs and deliberate misrepresentations as to costs are each declared to be professional misconduct.

(2A) A costs assessor may refer any failure by a legal practitioner to comply with a notice issued under section 207, or with any other provision of this Part, to the Commissioner.

(3) Nothing in this section limits the matters which a costs assessor may refer to the Commissioner." 26 In the plaintiff's letter dated 14 February 2002 addressed to the costs assessor he had requested that the costs assessor report the defendant to the Legal Services Commissioner. The costs assessor considered the defendant's Local Court bill contained many excessive claims but this does not amount to a finding that the defendant deliberately charged grossly excessive amounts of costs. Nor did the costs assessor find that the defendant's actions constitute a deliberate misrepresentation as to costs. Thus the costs assessor did not make the findings that would permit him to refer the conduct of the solicitor to the Legal Services Commissioner pursuant to s 208Q. In any event it is doubtful whether the reporting of a practitioner for misconduct to the Commissioner is reviewable by this court or constitutes an error of law under s 208L. 27 It also seems that the plaintiff in his written submissions was saying that the defendant should be confined to the costs of two days hearing in the Local Court. He is wrong. It is my view that the Magistrate did not seek to confine costs to two days hearing time but merely declined to quantify the amount at $20,000. 28 Another source of the plaintiff's dissatisfaction with the costs assessor's decision was that because the defendant is a legal practitioner he should not be entitled to any costs arising from when he was acting as a builder. Also the plaintiff submitted that the bill of costs does not identify the partner who carried out the legal work nor does it detail the folio number of the document perused or checked. 29 The costs assessor addressed the issue of a solicitor's entitlement to costs and referred to Atlas v Kalyk [2001] NSWCA 10 (12 February 2001): "…I was unable to accept the objection consistently made that the applicant could recover no costs for his work because he was a solicitor litigant. The law does not prevent him from recovering his reasonable professional costs in acting for himself in litigation, see most recently Atlas Corporation Pty Limited v F G Kalyk New South Wales Court of Appeal (unreported), 12 February 2001. I considered that the proper approach to assessing costs in this case was to compensate the solicitor time properly spent in preparation of his defence both in the court below and the appeal." 30 In Atlas v Kalyk, the Court of Appeal followed the decision in Guss v Veenhuizen [No 2] (1976) 136 CLR 47 which affirmed both the general principle that a litigant in person may not recover professional costs, and the exception in the case of solicitors who act for themselves. 31 In Atlas, a solicitor acting for himself and his partners was awarded costs and the assessor upheld a claim for professional costs. In Guss, a lawyer acting for himself had briefed counsel in proceedings in the High Court in which he was a party. Due to an oversight in the High Court Registry, his name had not been entered on its Register of Practitioners, which subsequently caused difficulties in relation to the taxation of his costs. The majority held that any difficulties arising from the absence of his name in the Register of Practitioners did not bar his right to recover his taxed costs including his profit costs. The majority said at 51: "The appellant did not claim costs incurred by him in retaining the professional services of a solicitor in his litigation. He appeared in person. He sought taxation of costs on the basis that he was a solicitor who acted for himself and did so according to the well-established rule of practice which entitles a person, being a solicitor, to certain professional costs in those circumstances: London Scottish Benefit Society v Chorley, Crawford and Chester (1884) 13 QBD 872. See also H Tolputt & Co Ltd v Mole [1911] 1 KB 87, 836. Those authorities establish that the litigant in person does not recover such costs in such circumstances in the capacity of a solicitor, but because, happening to be a solicitor, his costs are able to be quantified by the Court and its officers." 32 The court in Atlas also held that Cachia v Hanes (1994) 179 CLR 403 did not overrule Guss, and that statements in Cachia about the position of solicitors who acted for themselves were only dicta. In spite of the decision of the Western Australian Full Court in Dobree & Ors v Hoffman (1996) 18 WAR 36 that solicitor litigants were not entitled to costs, the Court of Appeal in Atlas refused to depart from High Court authority to the contrary. 33 The costs assessor refers to the defendant as a solicitor litigant and states that he acted for himself in litigation. The costs assessor found that the law does not prevent a solicitor litigant from recovering costs. The costs assessor did not err in law in proceeding on this basis. Much of the work was carried out by a Partner of MD Nikolaidis & Co and staff. The only work carried out by the defendant was the preparation statements and sundry matters incidental thereto including attending with Counsel and attending on the hearing. The defendant did not charge for time spent searching for records and locating documents in order to prepare the case and assemble evidence. The time charged by him was only that time in which he was actually engaged in locating witnesses and preparation of statements and evidence. He is entitled to do so, and accordingly this submission fails.

34 Overall the plaintiff has not discharged his onus and demonstrated that the costs assessor erred in law pursuant to s 208L. The plaintiff's claim pursuant to s 208L fails. 35 In the alternative s 208M of the Act provides: "Appeal against decision of costs assessor by leave (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." 36 It is important to keep in mind the purpose of a requirement of leave to appeal. It is intended to act as a filter to ensure that unsuitable appellant proceedings which are not able to be brought with the demands which that places upon the resources of the court and the burden which it places upon other parties and the delays which it causes to other litigants. See for example Coulter v Regina (1988) 164 CLR 350 at 359. 37 In considering whether or not leave to appeal is granted it must be decided whether or not, there not being a matter of law arising in the proceeding and there being an appeal as of right only as to a matter of law, there is some other matter which in justice requires that leave to appeal be granted to allow that matter to be relitigated. The party seeking leave to appeal obviously bears the burden of establishing that justice does require that leave to appeal be granted. Further, the master when considering whether to grant leave to appeal obviously has a very wide discretion: see CDJ v VAJ [1998] HCA 67 per McHugh, Gummow and Callinan JJ - see Yandell at paras 11-12. 38 As previously stated the costs assessor reduced costs and disbursements from $49,738.40 to $27,109.56. Having already examined the grounds of appeal under s 208L it is my view there is no other matter, not being a matter of law, where justice requires leave to appeal be granted to allow the matter to be relitigated. The plaintiff's claim under s 208M fails. 39 The plaintiff's claims under ss 208L and 208M have been unsuccessful. The costs assessor's decision dated 22 May 2001 is affirmed. The summons is dismissed. 40 Costs are discretionary. Normally costs follow the event. The plaintiff is to pay the defendant's costs as agreed or assessed. 41 I make the following orders:

(3) The costs assessor's decision of 22 May 2001 is affirmed.

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

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