Ljiljana Coshott v Stephen Michael Barry

The Court of Appeal's costs orders

1. The costs orders were made in respect of three separate proceedings which were instituted in the Court of Appeal by Ms Coshott and which were heard and decided together. The Appeal proceedings were decided partly in her favour.
2. Order (6) was for the costs of two of the proceedings (Nos 2014/217301 and 2014/109540) which concerned a decision of Bradd LCM in the Local Court. One of those proceedings had been commenced in the Court of Appeal by a notice of appeal purporting to appeal as of right certain orders the magistrate: see Coshott v Barry [2015] NSWCA 257 at [62] and [65]. The second of the two proceedings which is the subject of order (6) had been commenced by summons filed in the Court of Appeal seeking leave to appeal his Honour's decision and claiming an extension of time for this application: Coshott v Barry at [66].
3. Order (11) made by the Court of Appeal was for the costs of a third proceeding brought by Ms Coshott (No 2014/217333) which concerned a decision of Taylor DCJ in the District Court. This proceeding was commenced by a summons filed in the Court of Appeal seeking judicial review of two decision made by his Honour. An extension of time for that application was also claimed: see Coshott v Barry at [67] and [68].
4. Notwithstanding that the last mentioned proceeding had been irregularly commenced in the Court of Appeal rather than in the Common Law Division, the Court disposed of all of the proceedings on their merits and, relevantly, made the two costs orders to which I have referred. In the proceedings arising from the Local Court's decisions (Nos 2014/217301 and 2014/109540), the terms of order (6) were that Messrs Barry and Board pay 50% of Ms Coshott's costs in the Court of Appeal of those two matters.
5. Likewise in the proceedings arising from the District Court's decision (No 2014/217333) the Court of Appeal's order (11) was that Messrs Barry and Board to pay 50% of Ms Coshott's costs in the Court of Appeal of that matter.

Legislation applicable to assessment of costs under the orders

1. The provisions of the now repealed Legal Profession Act 2004 (NSW) are applicable to the assessment of costs under these orders: see cl 59 of the Legal Profession Uniform Law Application Regulation 2015 (NSW). Clause 59 applies because each of the three Court of Appeal proceedings to which the two costs orders relate was commenced before 1 July 2015, being the date upon which the Legal Profession Uniform Law Application Act 2010 (NSW) commenced. (Part 7 of that last mentioned Act now governs the assessment of costs under orders made in proceedings commenced on or after 1 July 2015).
2. Hereafter in these reasons all sections referred to are sections of the now repealed Legal Profession Act 2004, unless otherwise indicated. Section 353(1) provides that either the party who is liable to pay or the party who is entitled to receive costs under a costs order may apply to the Manager for an assessment of the whole or any part of those costs. The Manager is a person holding office in the Attorney General's Department and in 2015 and 2016 this person was a registrar of the Court.
3. An application for assessment must be made "in accordance with the regulations": see s 354(1). The operative regulations under the Legal Profession Act 2004 were cll 123 - 128 of the Legal Profession Regulation 2005 (NSW) (which has also now been repealed). Clause 124 required that an application to the Manager for assessment under a court order should be made on an approved form.

The 2015 assessment of costs under Court of Appeal order (11)

1. On 21 September 2015, Ms Coshott lodged with the Manager an application for assessment which nominated only the costs of Court of Appeal proceedings No 2014/109540. That is, one of the two Court of Appeal proceedings the subject of that court's costs order (6). The Manager assigned to this referral the number 2015/305470. I will refer to this as "the 2015 referral" and to Mr Wall's actions in respect of it as "the 2015 assessment". Mr Wall wrote to both parties (that is Ms Coshott on the one hand, and Messrs Barry and Board on the other) on 2 November 2015 to advise his understanding of his task and to set a timetable for the provision of information and responses which he would require. At item 7.2 of this letter he indicated that he understood he would be assessing costs under both order (6) and order (11). In this letter Mr Wall acknowledged that he had received Ms Coshott's bill of costs for assessment, claiming $163,525.82 for fees, expenses and GST.
2. Mr Barry replied by letter of 4 November 2015 pointing out the application for assessment which Ms Coshott had lodged with the Manager, "purports to be in relation to proceedings 2014/109540, which is only one of the proceeding numbers in respect of which cost orders were made". By letter of 9 November 2015 at item 3 iii, Mr Wall requested Ms Coshott to clarify which Court of Appeal proceedings were intended to be the subject of the costs assessment. Mr Bruce Hocking of Martin Place Lawyers responded on Ms Coshott's behalf on 12 November 2015. His letter stated: "The application for assessment before you is for the assessment of the costs order in CA2014/21733 only, [that is, order (11)]. It is Ms Coshott's intention that a separate application for the [assessment of] the costs under the other costs order be prepared and lodged after this assessment is completed".
3. Mr Wall acknowledged this in a reply of 12 November 2015 at item iii.
4. Mr Hocking on behalf of Ms Coshott also wrote a letter dated 11 November 2015 which was emailed to Mr Wall on 27 November 2015 stating that the 2015 assessment "is for the costs order in CA2014/217333 only". That is Court of Appeal order (11). Mr Wall acknowledged receipt of this reiteration of the position by his letter of 8 December 2015. Notwithstanding this apparently clear position, correspondence continuing into 2016 revealed ongoing confusion and uncertainty as to which Court of Appeal proceedings (and therefore which Court of Appeal costs order) was the subject of the 2015 assessment.
5. In early December 2015 there was correspondence between the assessor and the parties in which clarification was sought from Ms Coshott of whether the 50% factor in the Court of Appeal's order had been applied to yield the figures in her bill. A letter from Mr Hocking of 9 December 2015 stated that the total claimed was $154,658.82. This was said to take account of the 50% reduction. Implicitly this meant that Ms Coshott's full costs under the Court of Appeal's order (11) concerning one of three proceedings before that court were alleged to have been $309,000 in round figures.
6. On 14 December 2015, Mr Wall required Messrs Barry and Board to lodge any objection to Ms Coshott's bill by 21 January 2016. He required Ms Coshott to supply by 19 February 2016 certain supporting documentation. On 18 January 2016 Mr Barry delivered to the assessor very detailed and extensive objections comprising 23 pages of general contentions illustrated with reference to examples amongst the items on the applicant's bill and a further 33 pages of item by item responses to the bill. These documents were accompanied by a statutory declaration of Mr Barry in which he swore to facts which if accepted, would show that some items of work claimed for in the bill had not been done, or did not relate to the subject proceedings.
7. The matters deposed to included that Ms Coshott's solicitor had not in fact appeared at court on numerous occasions for which fees for appearance were claimed; that documents said to have been prepared had not been prepared at all; that mentions and directions hearings had occupied significantly less time than was claimed for and that work claimed to have been done by Mr Hocking was actually done by Ms Coshott's husband. He had been a practising solicitor up until 1997 but it was said that his name was struck from the roll that year and that he was not at material times permitted to practice.
8. Annexed to Mr Barry's statutory declaration were a significant volume of documents which prima facie gave some support to the matters which he declared. Mr Barry's objections also included that items claimed for in the bill would be attributable both to the proceedings in the Court of Appeal in which order (11) was made (the order under which costs were being assessed in the 2015 assessment) and to the proceedings in which order (6) was made. It was said that despite this the bill did not limit Ms Coshott's claim to that proportion of such items which could fairly be attributable to the particular proceedings, the costs of which were under assessment pursuant to the 2015 referral.
9. Ms Coshott responded to these objections in an undated document. It commenced with an assertion that it was not open to the assessor to determine disputed questions of fact. Following the delivery of this response there were a series of subsequent requests for information sent by the assessor to the parties. He also sought supporting documentation. Without tracing this in detail, it is sufficient to say that by 12 August 2016, the assessor was able to determine what he considered a fair and reasonable amount of costs payable under Court of Appeal order (11) and to send his certificate to the manager, accompanied by his reasons as required by s 370.
10. Pursuant to s 369 Mr Wall also assessed an amount of his own costs of having carried out the assessment and he determined that they should be paid by Ms Coshott. Subsection (6) of s 368 of the Legal Profession Act 2004 provides as follows: (6) If the costs of the costs assessor are payable by a party to the assessment as referred to in section 369, the costs assessor must: (a) forward a copy of the certificate to the Manager, Costs Assessment only, and (b) advise the parties that the certificate has been so forwarded and will be available to the parties on payment of the costs of the costs assessor.
11. To enable the applicant to litigate her application for judicial review in the proceedings now before me, she sought from the registrar and was granted leave to obtain a copy of the assessor's determination of the 2015 assessment and the accompanying reasons. The determination and reasons were tendered on the hearing of the further amended summons. The assessor's assessed costs of carrying out the assessment have not yet been paid, as counsel for Ms Coshott acknowledged to the Court. I therefore required and received an undertaking to the Court from counsel on behalf of Ms Coshott and her solicitor, Mr Prassas, that no step would be taken to lodge or register the certificate for the purpose of obtaining judgment on it against Messrs Barry and Board until the assessor's costs of the assessment have been paid.

The 2016 assessment under Court of Appeal order (6)

1. Before turning to the alleged jurisdictional error in the assessor's determination of the 2015 assessment, I will record the essential dates and events with respect to the assessment of costs under the other order of the Court of Appeal, order (6). Mr Barry evidently desired that the costs under both orders should be assessed at the same time. He therefore lodged with the Manager on 18 April 2016 an application for assessment in respect of the order (6). The Manager assigned to this application the number 2016/119050 and referred it to Mr Wall. I refer to this as "the 2016 referral" and to Mr Wall's work in respect of it as "the 2016 assessment".
2. By letter of 9 May 2016 from Ms Coshott's solicitors to the Manager, it was asserted that cl 125.2 of the Legal Profession Regulation 2005, which stipulates prerequisites to the lodging of an application, had not been complied with and inquiring why this assessment had been referred to the same assessor as the 2015 assessment. The letter urged that the Manager should reject Mr Barry's application for assessment of costs under Court of Appeal order (6). It was submitted that there was no statutory warrant for "consolidation of applications" and Wende v Horwath NSW Pty Ltd [2014] NSWCA 170 was cited. This appears to have been misconceived, as the fact that one assessor would deal with separate assessments under discrete costs orders, albeit between the same parties, would not in any sense amount to "consolidation" and would not infringe any principles or statutory constraints identified in Wende v Horwath NSW Pty Ltd.
3. By letter of 16 May 2016 to Mr Barry, Ms Coshott's solicitor requested that the application for the 2016 referral be withdrawn within seven days, "failing which, prerogative relief will be sought from the Supreme Court." In the event, no application for judicial review of the Manager's decision was made. The time limit for such an application was three months from the making of the decision: Uniform Civil Procedure Rules 2005 (NSW), r 59.10. The exact date on which the manager decided to send the 2016 assessment to Mr Wall does not appear on the evidence but it must have been before 19 May 2016. That is the date of a letter from Mr Wall to the parties seeking information regarding the costs claimed by Ms Coshott under order (6).
4. Mr Wall was made aware of Ms Coshott's objection to him undertaking the 2016 assessment. He wrote to her care of her solicitors on 19 May 2016 pointing out that the objection was not a matter for him but for the Manager and that as the assessment had been sent to him it was his duty to proceed with it. He also suggested that the alleged non-compliance of Mr Barry with prerequisites for an application for assessment as prescribed in reg 125.2 of the Legal Profession Regulation 2005 would not appear to cause Ms Coshott any prejudice. He made it clear that he would not purport to "consolidate" the 2015 and 2016 assessments but would find it practical to deal with them at the same time as "there is a common substratum of facts." By further letter of 21 June 2016 Mr Wall gave notice under s 358 of the Legal Profession Act 2004 certain information he required for the 2016 assessment, to be supplied by 21 July 2016.
5. The 2016 assessment in respect of Court of Appeal order (6) does not, on the materials tendered, appear to have made significant progress. Before provision of the documents and information requested by Mr Wall the proceedings now before the Court were commenced. So far as the evidence shows the 2016 assessment has, for practical purposes, been on hold pending disposition of the further amended summons.

The assessor's reasons for his determination of the 2015 assessment

1. It is apparent from the assessor's reasons for his determination of the 2015 assessment that there were claimed in the bill of costs amounts in respect of numerous items of work which, on their face, related to more than one of the proceedings in the Court of Appeal and which were assessable in part under both orders. This called for an apportionment of the amount claimed for such items between the three proceedings so that only part of each such item would be assessed as an element of the costs under order (11), which the assessor was endeavouring to finalise.
2. The assessor's reasons include the following paragraphs. 8.8 As I wrote in my letter of 25 May 2016, notwithstanding the assertion made until then on behalf of Ms Coshott that the bill only claimed for [proceedings No 2014/217333], the bill clearly referred to all 3 sets of proceedings [examples were given]. […] 8.11 Having started by asserting that the bill only contained items relating to [proceedings No 2014/217333], finally by letter of 10 June 2016 Mr Hocking for Ms Coshott indicated that certain items related only to [that proceeding], certain items related only to the Local Court appeal, and the balance was indicated to be "joint (50%/50%)" between [proceedings No 2014/217333] and the Local Court appeal. It seems to me the balance should be split 3 ways between [the three proceedings before the Court of Appeal], but I will deal with that later. 8.12 I noted several times in correspondence with the parties that it would have been more sensible to seek assessment of costs in respect of all 3 proceedings. Separate certificates would have to be issued because of the decision in Wende v Howarth (NSW) Pty Ltd [2014] NSWCA 17, but there was nothing to stop the application being made. In the letter of 10 June 2016, Mr Hocking submitted "further, knowing what items are allowed or disallowed in whole or in part in this assessment will allow the preparation of the other bill. Its [sic] not possible to properly prepare the next itemised bill until [the 2015 assessment] has been completed". This was and is incorrect. That approach has wasted a lot of time and money, particularly when combined with the fact that the bill and the application were very poorly prepared. […] 8.14 There was no reason at all to avoid making an application in relation to the 3 sets of [Court of Appeal] proceedings. There were very good reasons to do so. […] 8.16 Having to separate out the costs relating to [proceedings No 2014/217333] as very greatly increased the costs of the assessment. As I observed in my letter of 21 June 2016, Ms Coshott should bear those costs regardless of the outcome of the assessment. 8.17 As I also observed, my role is to assess what the costs applicant, Ms Coshott, seeks that I assess. 8.18 Thus, I assessed only the costs of [proceedings No 2014/217333]. […] 8.21 In respect of the balance of the costs, those costs that I have allowed as reasonable in connection with the court of appeal proceedings, are costs that relate to [the three proceedings]. Thus I have divided those costs by 3, to arrive at the costs for [proceedings No 2014/217333], and then added the amount of $3,562.50 as indicated above. That is the amount that is then divided by 2 in accordance with the Court's order [to achieve application of the 50% factor]. It is the whole of the [2014/217333] proceedings costs that have to be divided by 2. Mr Hocking for Ms Coshott did finally acknowledge that in the letter of 10 June 2016 when after indicating which costs related solely to the [proceedings No 2014/217333] and which costs related solely to [the other two proceedings], he then wrote, "The other items are joint (50%/50%) between the [proceedings No 2014/217333] and the Local Court appeal." However as there were 3 sets of proceedings, and there may well be 2 further assessments, the only way I can see to deal with the matter is to divide the costs that are in common by 3 rather than by 2.
3. Evidently by this last sentence, the assessor referred to dividing the costs of items of work which were common to all proceedings by three to make an apportionment as between each of the three Court of Appeal matters. He distinguished that from dividing it by two, which might be done if one were simply attributing apportionable items of work between the two costs orders, orders (6) and (11). The further division by two to achieve the Court of Appeal's 50% factor was a separate matter.
4. It is the last sentence of par 8.21 which is impugned as disclosing a jurisdictional error on the part of Mr Wall. It is asserted that apportioning the costs of items of work common to all three proceedings so that one third of the cost of such items would be attributed to the 2015 assessment under order (11) involved construing and interpreting the Court of Appeal's orders. The answer to this is a factual one. Contrary to the applicant's submissions on this sole ground, the assessor has not undertaken any interpretation or construction of the Court of Appeal's orders at all. On the contrary, adopting the plain terms of those orders and being required to assess costs only of the Court of Appeal proceedings in which order (11) was made he has assessed what those costs were. His apportionment approach is a technique of assessment which was open to him in circumstances where some measure of estimation and attribution was necessary. The adoption of this technique does not involve a process of legal interpretation of orders and hence does not give rise to the excess of jurisdiction alleged. This kind of apportionment of items of legal work and of their costs as between separate proceedings will be a commonplace in assessments of costs. It is precisely the kind of technique or method which falls within the scope of judgment of the assessor in carrying out his task.

Other avenues providing for merit review

1. Even if I considered that the assessor had embarked upon some degree of interpretation of the Court of Appeal's orders in arriving at his conclusion and had thereby exceeded his jurisdiction, I would, in the exercise of the Court's discretion, refuse relief. The parameters for exercise of that discretion have been discussed in numerous authorities. Statements of Hely J in NAUV v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 1319 are sufficient for present purposes. His Honour said: Save in exceptional circumstances, prerogative relief will be withheld on discretionary where other suitable remedies are available and have not been used. Hely J cited Boral Gas NSW (Pty Ltd) v Magill (1993) 32 NSWLR 501 at 508 to 512 and NAJT v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 487 at [28].
2. The Legal Profession Act 2004 provides for a scheme of full review of any costs assessment by a panel of two assessors: Subdiv 5 of Div 11, ss 373 to 383. In Subdiv 6, ss 384 to 389 there is also provided an appeal from the decision of a costs assessor on a question of law to the District Court. Under subs (2) of s 384 the District Court is empowered, upon determining the question of law, either to remit the matter to the assessor or to make the determination which in that court's opinion should have been made by the costs assessor.
3. Under s 385 of the Legal Profession Act 2004 there is also a right of appeal to the District Court more generally, not limited to questions of law, by leave of that court. The pursuit of either a review by a panel of two assessors or an appeal to the District Court could provide to the applicant, if she is correct in her contention that costs related to multiple proceedings have wrongly been apportioned under the 2015 assessment, a re-apportionment on the merits. The relief that would be available under such a course would be ample. It is not as if the applicant for judicial review in this Court is seeking some outcome with respect to the costs assessor's decision which could not be granted under the other possible avenues of review or appeal.
4. Further, I consider that in the exercise of discretion relief ought be refused even if the error of jurisdiction alleged by the applicant were established because the 2016 assessment in respect of Court of Appeal order (6) has not been pursued or completed. As that assessment is before the same assessor, it may be expected that because he has apportioned one third of the costs of items of work common to all proceedings to his 2015 assessment, the other two thirds will be apportioned as part of his assessment under order (6) of the costs of the other two proceedings. By the terms of his reasons for the 2015 assessment Mr Wall has in effect committed himself to this outcome. Once the 2016 assessment has been progressed to finality, this matter of apportionment may be expected to be entirely academic.

Orders

1. For these reasons, I consider the applicant has not established any entitlement to relief under the further amended summons. The Court's orders are 1. The further amended summons is dismissed. 2. The applicant is to pay the costs of the first and second respondents. 3. The first and second respondents are to provide to my associate by 5.00 pm on Friday, 8 September 2017 written submissions of no more than 5 pages in support of an application that their costs be on an indemnity basis. 4. By 5.00 pm on Friday, 8 September 2017, the first and second respondents are to provide to my associate an affidavit substantiating costs incurred by them in a form providing sufficient detail to permit the Court to make a lump sum assessment under s 98 of the Civil Procedure Act 2005 (NSW). 5. The applicant is to file written submissions in reply of no more than 5 pages and any additional evidence by 5.00pm on 15 September 2017. 6. Any answering submissions from the first and second respondents are to be provided to my associate by 5.00 pm on 20 September 2017. I will not make an order for costs in respect of the third and fourth respondents, the assessor and the Manager, as they both filed submitting appearances.

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. Decision last updated: 12 September 2017