Marshan v Steele

Reasons for Decision 1Mr Marshan, who is a solicitor, is suing Mr Steele for payment of legal costs. 2The issues for determination by me are whether Mr Steele retained Mr Marshan on or after 22 December 2009, and if so, what the terms and extent of that retainer were. Mr Steele denies the existence of any retainer by him of Mr Marshan to perform any legal work. 3In the event that I find a retainer did exist, I am invited to either give judgment in the amount of costs assessments that have been made under the Legal Profession Act, or judgment in the amount of the claim plus costs and disbursements, or judgment for such lesser amount as I consider fair and reasonable (pursuant to s 319(1)(c) Legal Profession Act). 4The Legal Profession Act NSW 2004 (hereafter "LPA") provides a regime of disclosure of legal costs, which is intended to protect consumers of legal services from unexpected and unjustified expenses in relation to their legal matters. Generally speaking disclosure of fees is required to be in writing (section 311) and to be given as soon as practicable after the law practice is retained in the matter. 5In this case there was no such disclosure. Mr Steele says that he expected to be told what the costs would be before he retained Mr Marshan to act for him. He says that all his dealings with Mr Marshan were preliminary to his deciding whether to retain Mr Marshan's legal services. Mr Marshan had acted for him about two years before. In that case he had been given disclosure of fees, a fixed estimate of the costs, and had been required to pay that amount in advance of the court hearing. 6Mr Marshan says that he was retained on 22 December 2009 to act for Mr Steele in relation to both an upcoming criminal matter in the Local Court, and possible civil proceedings in the Supreme Court concerning certain things the Uniting Church in Australia had done concerning Mr Steele, and issues internal to the church that had been raised by him. 7There was no written disclosure by Mr Marshan of his proposed fees, nor of the basis on which they would be calculated, until 29 January 2010. It is not suggested that that disclosure was made as soon as practicable after his practice was, he says, retained. 8That being the case, the effect of failure to disclose is set out in section 317 LPA. Any costs need not be paid unless they have been assessed under Division 11 of the Act. There is a bar on maintaining proceedings for the recovery of legal costs unless the costs have been assessed (section 317(2)). These proceedings were commenced before that assessment had taken place. 9The assessment has now taken place. The assessment has been made in the sum of $1,612.01. The costs of the review of the cost assessment were $962.50. 10These proceedings were transferred from the Small Claims Division of this court, the amount of the claim being well within that jurisdiction, because the defendant says that he never retained the plaintiff to perform legal services for him. It appears to have been agreed that only the procedure in the General Division would permit the evidence to be fully tested in relation to that claim. These proceedings have taken a day in evidence and half a day in submissions. The goal of the Civil Procedure Act to provide mechanisms for resolution of disputes that are "just, quick and cheap" has not been achieved in this matter, having regard to the amount in dispute. It appears that both the plaintiff and the defendant regard the maintenance and defence of the proceedings as matters of principle. 11The amount of time and energy that has been expended on these proceedings is completely out of proportion to the amount of money that is in issue. Many of the matters put in issue by Mr Steele, in particular in his final written submissions, which run to 39 paragraphs, are irrelevant to the issues for determination. To the extent that I have not dealt with anything raised in those submissions in this judgment, it is because I do not consider it to be relevant to the issues. That applies particularly to the background to Mr Steele's dispute with the Uniting Church in Australia and the ultimate outcome of the criminal proceedings in the Local Court. 12Mr Marshan has deferred filing the two certificates of cost assessments in this jurisdiction in order to permit evidence in these proceedings, so as to give the defendant an opportunity to argue that there was never any retainer. Had the certificates of assessment been filed, they would operate as judgments of this court, and would make these proceedings futile. This has been done in the context of allegations by Mr Steele in April 2010 and continuing that Mr Marshan has behaved deceitfully and unethically. In oral submissions Mr Marshan indicated that he would not have pursued this matter had those accusations not been made. 13There is a factual dispute as to what was said between Mr Marshan and Mr Steele in a telephone conversation between them on 21 December 2009, a conference of more than one hour at Mr Marshan's office between them on 22 December 2009, a conversation at and outside the Downing Centre Local Court on 11 January 2010, and a telephone conversation on 16 January 2010. 14Mr Steele had been served with a Court Attendance Notice alleging an offence contrary to section 4(1)(b) of the Inclosed Lands Protection Act 1901, allegedly committed on 6 December 2009 at [an address in] Sydney. That address is the premises of the Wesley Mission. The court attendance notice required Mr Steele to attend Downing Centre Local Court at 9:30am on Monday 11 January 2010. Mr Steele was bailed to appear on that date, with conditions of bail that required him not to enter or be within 50m of the premises known as Wesley Mission situated at [the address in] Sydney. 15Mr Marshan had previously acted for Mr Steele in respect of criminal appeal proceedings that took place in the District Court in November 2007 against a penalty imposed in the Local Court on a driving offence (coincidentally I was the Magistrate whose decision was successfully appealed in that case, however, neither party took any issue with my hearing these proceedings). In that matter Mr Steele received a letter from Mr Marshan, which is exhibit 2 in these proceedings which amounted to a fee disclosure, and which effectively required him to pay Mr Marshan $1,133 before the hearing, being a fixed rate for the work. The agreement also set out how Mr Marshan's normal costs were calculated, and particularly the hourly rate at which his professional fees were charged. 16Given that that disclosure was more than 12 months before this matter, Mr Marshan cannot and does not rely on it as constituting an exception to the requirement for fee disclosure in the Legal Profession Act. 17Mr Steele telephoned Mr Marshan on 21 December 2009; he says purely for the purpose of finding out whether the date of 11 January 2010 was a date on which a plea of "not guilty" could be finalised at a hearing. He says that it was at Mr Marshan's insistence that he went to see him the next day. An appointment was made for him to do that. Mr Steele emailed various documents to Mr Marshan that evening (not, Mr Marshan agrees, on 24 December as deposed to in para 10 of his affidavit). 18On 22 December 2009 Mr Steele attended Mr Marshan's office and spent more than an hour in conference with him. Mr Steele says that the conference began with Mr Marshan telling him he had to plead "guilty" to the offence. Mr Marshan denies that. Mr Steele agrees that notes were being taken during that conference although he did not know what Mr Marshan was writing down. He also gave Mr Marshan a lever arch folder containing material on which he sought to rely in defending the "remain on inclosed lands" charge. That material apparently included some history of Mr Steele's dealings with the Uniting Church. It was his assertion as I understand it that that material was relevant to the circumstances which led to him having been asked to leave the premises at the Wesley Mission on 6 December. 19Mr Steele argues that when he telephoned Mr Marshan, and went to his office on 22 December 2009, he was intending to plead "not guilty" to the charge of "remain on inclosed lands". He says that Mr Marshan told him that he had to plead guilty, with mitigation. He says that Mr Marshan told him that at the beginning of their conference, notwithstanding that Mr Marshan also told him that he had not read documents that had been forwarded to him the preceding evening. 20It is not disputed that the conference on 22 December 2009 went from 4:15pm to 5:40pm, and that Mr Marshan took extensive handwritten notes during it. Those notes form exhibit a D to Mr Marshan's affidavit, and a typewritten copy is exhibit D1. The notes contain factual material, which is not disputed to have been supplied by Mr Steele to Mr Marshan. There are a number of matters in it however, which are in significant dispute. After paragraph 13 of the notes the following appears: "he wants me to apply to vary the bail so that he can attend that meeting or to remove the restriction of going within 50 m of the Wesley Mission". Mr Steele says he never gave those instructions. He submits the handwritten notes are analogous to a police "verbal", although I do not understand him to suggest that they were not made at the time. 21Following that conference on 23 December 2009 Mr Marshan wrote to the police concerning a proposed variation of bail. He sent Mr Steele a copy of that letter by email. Although Mr Steele says he did not instruct Mr Marshan to take any action concerning variation of his bail, he did not communicate with Mr Marshan, by return email or otherwise, after receiving a copy of that letter. It was put to him in cross-examination that he could have rung up and told Mr Marshan that he didn't want the letter written. His reason for not doing this was given in cross-examination as "I was giving you the benefit of the doubt. I had to wait to see if you were prepared to fight. If you wouldn't, I would do it myself. I delayed making judgment, or taking precipitate action at that point." (my notes of evidence, transcript not available at time of preparation of this decision). In his later letter dated 16 April 2010 Mr Steele described his reaction to the sending of this letter as "I was annoyed by your unilateral, unnecessary 'make work' exercise ...". On his own case Mr Steele had never communicated that annoyance to Mr Marshan before the end of January 2010 when he received the fee disclosure letter. 22On 7 January 2010 (during his leave period) Mr Marshan made a file note in which he asserts that he read the material left with him by Mr Steele, and also made other notes concerning the matter. 23On 11 January Mr Marshan attended at the Downing Centre Local Court. He appeared before the Registrar. Mr Steele had not arrived at court at 9.30am and it appears that the matter was dealt with almost immediately. Mr Marshan appeared for Mr Steele in his absence, his bail was varied in accordance with the police agreement, and the matter was adjourned to 22 February 2010 for plea or mention. The defendant was excused if legally represented on that date. A very short time after, Mr Marshan saw Mr Steele outside the courtroom. His note of what happened is as follows "Robert turned up. I told him what happened and he gave me some fresh corr from and with W./M." 24Mr Steele says that the arrangement in relation to 11 January was that they would meet at court. He says that he understood that Mr Marshan was to go over his material before that date in order to indicate to him whether he would represent him on the plea of not guilty. He says he still did not know whether the matter could proceed to a hearing on that date. He says he did not instruct Mr Marshan to appear for him on that date. He says that they had a conversation after Mr Marshan had appeared in which he gave him documents concerning the Spanish Inquisition printed from Wikipedia, but denies that he gave him any other documents. 25In relation to why Mr Steele behaved in this way given that on his case what had happened at court was contrary to his wishes and indeed his instructions, Mr Steele says that he was still reserving judgment. He does not suggest he communicated his displeasure in any way to Mr Marshan. 26Essentially it is Mr Steele's case that Mr Marshan was operating from a position of power in relation to questions of fees, that he essentially misused that power in performing legal work he had not been instructed to do, without any proper fee disclosure or agreement, and that he never retained Mr Marshan to do legal work. In his letter to Mr Marshan of 16 April Mr Steele accused him of acting contrary to instructions, acting arbitrarily, and speaking on his behalf without his consent. He described his own attitude on 11 January as "I had not accepted your representation, nor had any intention to accept it, if you continued with your adamant opinion that I had no defence and must plead guilty." (p 1) In the written submissions filed on 23 June 2011 he put it this way in para 31: "There was no 'implied agreement' other than that the defendant would consider retaining the plaintiff as sole advocate at his criminal trial; conditional upon the total fee being accepted as affordable when disclosed, and the delivery, prior to entering court on 11 January 2010, of the plaintiff's 'considered opinion' as he had volunteered. That 'opinion' necessarily required the plaintiff to accept the defendant's instructions to fight for an acquittal, without equivocation, by exposing Wesley Mission's perverse motive (the cover-up of misconduct by UCA clergy) for misusing the Police. And the view that any such issue could, and should have, been dealt with internally according to UCA regulations." 27Mr Steele draws attention to several inaccuracies in the affidavit sworn by Mr Marshan in these proceedings. Mr Marshan accepted that his assertion that he received an email from Mr Steele on 24 December 2009 was wrong, and that the emails he was referring to had been received on 21 December 2009 after the telephone conversation. He also accepted that in paragraph 18 of his affidavit he was incorrect in stating that "the defendant telephoned me", but rather agreed that he had telephoned the defendant. He explained these inaccuracies by the fact that he did not have access to his file at the time of swearing the affidavit, due to it being with the cost assessor in the proceedings in the Supreme Court. It does seem to me that those inaccuracies are not such as to reflect generally on Mr Marshan's credibility. He struck me as a witness who was doing his best to tell the truth in relation to what was clearly a matter on which he has some recollection but on which his recollection was certainly assisted greatly by the notes, which I accept he did make at the time he says he did. 28The only matter on which there was any real issue was his file note of 11 January 2010, in which he stated that Mr Steele had given him fresh correspondence by/with Wesley Mission. In cross-examination he appeared to accept that this correspondence was emailed by Mr Steele on 16 January, not received on 11 January. If that is so, it does suggest that this note was either not contemporaneous, or not accurate. It is not in dispute that Mr Steele did give Mr Marshan some documents on 11 January, but Mr Marshan now accepts that these related only to items of general interest concerning the quality of justice afforded during the Spanish Inquisition. Mr Marshan did say in his evidence that as this was his first day back at work after the summer break he had many matters to attend to. I am unable to make any finding as to how this note came to be made. It was not explored at any length in cross-examination. However, there is no suggestion on either case that Mr Steele had indicated in any way that he was unhappy with what had happened so far in the proceedings. 29There is no corroborating evidence in respect of any of the conversations between Mr Steele and Mr Marshan that are in dispute. Mr Marshan did make extensive file notes in relation to his attendances upon Mr Steele, and his recollection he says has been assisted by reference to those notes. Mr Steele does not assert that he had made any notes of any of the conversations, however on 16 April 2010 he wrote to Mr Marshan after receiving the standard costs and retainer agreement. A copy of that letter is annexure L to Mr Marshan's affidavit, and references have been made to it as it appears to be essentially consistent with the arguments put in these proceedings by Mr Steele, and reiterated in written submissions forwarded by him and received by me on 23 June 2011. 30Mr Marshan relies on the letter of 23 December 2009 as indicating his understanding of the instructions he had received the day before. He also relies on Mr Steele's lack of response to receiving a copy of it as indicating that he accepted that Mr Marshan's action at that time was both appropriate and in accordance with his instructions. 31Mr Steele's evidence in relation to why he did not do anything having received that letter, if indeed he had not given Mr Marshan instructions to write it, was that he thought Mr Marshan was "making work" but was giving Mr Marshan the benefit of the doubt. He said that he thought that after reading the material he had left him the preceding day that he would wait to see if Mr Marshan was prepared to fight for him. He said, "If I couldn't rely on him to do that I would do it myself". He said "I delayed making judgement or precipitate action at that point" 32I consider it to be a very clear inference from the contents of the notes made on 7 January 2010, which I accept on balance of probabilities were in fact made on that date, that at that stage Mr Marshan considered himself to have been retained by Mr Steele to perform legal services for him. In particular, note (4) reads "send Robert usual letter with retainer/fee agreement etc" a note in the margin next to it reads "check if already dictated". This intention is consistent with Mr Marshan's obligation to disclose his fees as soon as practicable after retained. It is noted that on 7 January 2010 Mr Marshan was on holidays, and his office did not reopen until 11 January. The explanation for the delay in sending the fee disclosure appears in para 26 of Mr Marshan's affidavit, which refers to pressure of other work. 33Mr Steele says that he had not retained Mr Marshan to act. Mr Marshan relies on the establishment of an implied retainer. The onus is on him to prove that this existed on the balance of probabilities. He has referred me to Riley Solicitors Manual para [3020.5], and to Pegrum v Fatharly (1996) 14 WAR 92. In particular, he refers to the following: "A contractual relationship of solicitor and client will therefore be presumed it if is proved that the relationship of solicitor and client existed de facto between a solicitor and another person. ...the de facto relationship of solicitor and client has to be a necessary and clear inference from the proved facts before a retainer will be presumed." (at 95) 34He relies on the following matters as proving the creation of the solicitor/client relationship and retainer: Mr Steele knew him to be a solicitor/advocate; he consulted him in that capacity; he attended him in conference; he arranged for him to attend court on 11 January; he provided documents for consideration; those documents were considered; the appearance at court on 11 January; the letter to the Law Society library on 29 January 2010; the letter to Mr Steele of 29 January 2010; the telephone call of 16 February. 35In addition, he relies on Mr Steele's actions and in particular that he did not take any action to correct any possible misunderstanding when he received a copy of the letter written concerning variation of bail on 23 December 2009 which commences "I am the solicitor for the abovenamed ..." and refers to Mr Steele throughout as "my client". The letter also made reference to his proposed appearance at court. Nor did Mr Steele do anything after 11 January, nor in an email sent to Mr Marshan on 16 January, to correct any misunderstanding if that is what it was. It was not until after Mr Steele had been billed that he sought to deny any retainer. 36Mr Steele argues that there was never any agreement, and that none should be implied. He argues that he was trapped into Mr Marshan appearing at court. He says that any agreement was conditional on Mr Marshan agreeing to represent him on a "not guilty" plea and fight for an acquittal, and on disclosure and agreement about fees. He says that he would never have agreed to a "blank cheque". 37Mr Steele also argues that there is an equitable estoppel operating to prevent Mr Marshan claiming against him, given that he stood by and allowed Mr Steele to act to his detriment. It is not clear to me how this argument could be made out on the evidence. I do not accept that there was any deliberate delay in Mr Marshan sending Mr Steele notice of his fees, even though his disclosure did not comply with the requirements of the Legal Profession Act. It seems Mr Steele is arguing that by delaying he was denied the opportunity to get another lawyer, and subpoena witnesses. Given that the fee disclosure was made well before the second mention of the case in the Local Court, that simply cannot be made out on the evidence. Mr Marshan did not make any secret of the work he was doing, nor of how he saw the relationship of solicitor/client, as evidenced by the copy of the emailed letter to police the day after he first saw Mr Steele. 38Mr Steele seeks to draw parallels between this case and that of Marcus Einfeld. I am unable to see any similarity, although as I apprehend his argument it is that a person can put their career at stake over something very petty, which is what he is suggesting Mr Marshan is doing here. I do not dispute that as a general proposition, but I do not consider it has any application to this matter. 39Mr Steele went through the common law concerning the formation of contracts. He denied that he had any intention to enter into a contract, or to create legal relations, or that there was any consensus as to any terms. He submitted that he was in a situation of Mr Marshan nominating all the terms. He denied any valuable consideration, submitting that anything done by Mr Marshan was "of no value to me". 40He submitted that Mr Marshan's intention to "prevail on me to plead guilty" made the contract illegal. I do not accept on the facts that Mr Marshan had any such intention, noting that at 29 January he was seeking authorities from the Law Society in respect of possible defences to the charge Mr Steele faced. 41In para 37 of his written submissions Mr Steele submits: "The plaintiff's action in attempting to entrap, and persuade an innocent, prospective client to plead guilty to a criminal charge, or to deny his lawful defence at a defended hearing, was an attempt to pervert justice, by putting his own petty interests ahead of the integrity and well-being of the prospective client. And, as he acted to victimise the defendant, his consequential long litany of lies and perjury, as an officer of the court, is worse than the misconduct condemned by James J in R v Einfeld [2009] NSWSC 119 at 183..." 42This is a summary of many allegations in Mr Steele's written submissions of a similar nature against Mr Marshan (see for example paras 9, 11, 18, 20, 21, 26, 27). I feel compelled to say in light of these allegations that there is nothing in the evidence that suggests to me that Mr Marshan has been deliberately dishonest about anything. In relation to Mr Steele's assertion that Mr Marshan told him on 22 December that he had to plead "guilty", I accept that possibility was one of the matters discussed. However I do not accept that this was stated categorically as Mr Steele says it was. Had that been the case it would have made little sense for Mr Marshan to accept the material to read over the break. 43I accept that the relationship of solicitor and client can be implied in this matter by the conduct of both parties. Clearly there was no express agreement as to payment. 44If there was an implied contract, Mr Steele submits that it was breached by Mr Marshan ignoring his instructions by failing to wait at court and categorically denying merit in his defence. In that regard, Mr Steele appears to be under a misapprehension that a lawyer may be instructed only to argue certain matters and not to give advice. He expressed shock at the terms of Mr Marshan's standard costs agreement (as forwarded on 29 January 2010), which allowed the agreement to be terminated if the client refused to accept advice. I do not accept that there is anything unusual in such an agreement. Lawyers are not only entitled to provide advice to their clients, they are obliged to. There is no evidence as to whether an agreement in the same terms had been forwarded in the earlier matter. 45I have no doubt that Mr Steele believes everything he says to be true, and much of the dispute in this matter concerns what I consider to be his misapprehension of any agreement as to the basis on which he was asking Mr Marshan to do what he did. It is certainly regrettable that the question of fees was not directly discussed at the first conference. Neither Mr Steele nor Mr Marshan says that it was. I accept that Mr Steele had a belief about the way Mr Marshan might charge fees for a court matter, based on his previous experience, which differed from what ultimately occurred in this case. Indeed, Mr Marshan's letter of 29 January 2010 provides an estimate of likely fees on different scenarios. However, that does not mean Mr Steele did not retain Mr Marshan to perform legal services for him. It also does not mean that no agreement can be implied that he would pay for them. He does not assert any express agreement not to charge for the work done before the fee disclosure was made. Clearly there was no such agreement. There was certainly nothing in the parties' previous dealings to suggest that Mr Marshan would agree to work for Mr Steele for nothing. 46Even on his own case, it is clear that on 23 December 2009 Mr Steele understood that between then and 11 January 2010 Mr Marshan would be considering material in his case and undertaking what could only be described as legal work. The "delivery of his considered opinion" referred to in Mr Steele's evidence and correspondence was clearly legal work. I accept that Mr Steele may have hoped that he would not have to pay for it, particularly if he did not agree with it. However, on his own case there was no agreement that the work would be performed without payment. The agreement to meet Mr Marshan at court carries with it an inference that Mr Steele had agreed that Mr Marshan would in fact appear for him at court. Mr Steele was (or at least may have been) required to be there because he was bailed to appear. I have difficulty accepting that Mr Steele believed that there was a real possibility that the hearing of the matter after a "not guilty" plea could proceed on the very first date the case was listed, but if he did believe that it supports an argument for the existence of a retainer, not against it. 47Mr Steele's assertion that Mr Marshan was "making work" in various actions he took does not make any sense if indeed there was no agreement (express or implied) that legal work would be charged for. 48Actions such as the present are now rare due to the provisions of the Legal Profession Act and the significant financial disincentive it provides to lawyers seeking to recover fees in the absence of a costs agreement or disclosure. Actions such as this make crystal clear the desirability of such disclosure being made very early in proceedings, as required by the Act. However, the Act does not make it impossible to recover fees where a retainer can be implied by the circumstances. In my view this is a case where such a finding is inevitable. 49I have no hesitation in finding for the plaintiff in this case, so far as it concerns the retainer in respect of the criminal proceedings. That retainer is clearly evidenced by all the material referred to in the preceding paragraphs, and the implied agreement to be liable for legal fees in my view is clear. I do not accept Mr Steele's assertion that it was a "conditional" agreement. 50The position is less clear in relation to the costs of advising on possible civil proceedings in the dispute with the Uniting Church. While in Mr Steele's mind the dispute with the Uniting Church was clearly relevant to the criminal matter (see his letter of 16 April 2010, third paragraph), I do not consider that Mr Marshan has proved on the balance of probabilities a retainer in relation to advising on any possible civil proceedings, although the background dispute with the Church was clearly relevant to the issues arising in the criminal proceedings. He was therefore required to consider it to some degree in advising on those proceedings. Indeed, that is precisely what Mr Steele understood he was doing when he gave him the folder of material in December 2009. 51However, I do not think that makes any difference to the amount recoverable in these proceedings. The amount claimed is the total of the bill sent on 19 March 2010 ($2,247.00). The assessment of the original costs by the costs assessor was for $1,612.01 (the certificate is not in evidence but that does not appear to be in dispute). I am not aware of the basis on which the costs were reduced. The total amount recoverable by Mr Marshan on the two certificates is more than the amount of this claim, however one of the certificates is for a review of the costs assessment and I do not see that it has any relevance to these proceedings. I cannot give judgment for more than the claim in the absence of amendment, and Mr Marshan has not sought to amend. I consider it would be improper to give a judgment for an amount in excess of the amount assessed by the costs assessor, given that I am not in a position to assess the costs myself. An amount of $1,612.01 for the work done in respect of the criminal proceedings certainly appears fair and reasonable given the time spent in conference, considering material and at court (even though it is in the range Mr Marshan estimated he might charge if the matter were withdrawn or a plea of guilty were entered). It is certainly not unknown for solicitors not to charge defendants in criminal matters for the totality of the time spent in preparation of their cases. 52I propose to order that there be judgment and verdict for the plaintiff in the sum of $1,612.01. I do this on the basis that I have not taken into account in any way the review costs in respect of the assessment in the Supreme Court. It is a matter for Mr Marshan whether he now seeks to file that certificate in this court to allow recovery of that amount in addition to this verdict. 53Interest on the verdict should be payable only from the date of finalisation of the costs assessment process in the Supreme Court. Mr Marshan ought not to be able to recover interest on the bill where costs were required to be assessed because of his failure to disclose. I understand that date to be 23 May 2011. 54In relation to the costs of these proceedings, although both parties are unrepresented Mr Marshan is of course a solicitor. I accept that a solicitor acting for him or herself as a party to proceedings is entitled to recover professional costs where they are successful in those proceedings (Lawrence v Nikolaidis [2002] NSWSC 614). 55Costs in a matter transferred from the Small Claims Division to the General Division of the Local Court are capped at $2,500 (par 20.5 Local Court Practice Note Civ 1). The costs involved in this matter would clearly exceed that cap. Mr Marshan does not submit that any other order should be made. Mr Steele has not made any specific submissions on the question of the costs of these proceedings.