MINERALS CORPORATION LIMITED v ANTHONY NORMAN ABBOT TRADING AS PIPER ALDERMAN LAWYERS

MINERALS CORPORATION LIMITED v ANTHONY NORMAN ABBOT TRADING AS PIPER ALDERMAN LAWYERS - [2004] NSWSC 246 - NSWSC 2004 case summary — Zoe

[7]

1 BELL J: The plaintiff commenced proceedings no. 20094 of 2003 in the Common Law Division of the Court by filing a statement of claim on 17 April 2003 claiming damages in contract and in negligence arising out of the conduct of legal work on its behalf by the first defendants, the partners of a firm of solicitors, Piper Alderman Lawyers (the professional negligence proceedings). 2 By motion in the professional negligence proceedings that was filed on 15 August 2003 the plaintiff claimed orders, including an order staying proceedings 91714 of 2002 in the Common Law Division of the Court. 3 The hearing of the plaintiff's motion came before me on 3 November 2003. On that occasion the plaintiff was granted leave to file in court an amended notice of motion. By its amended notice of motion the plaintiff claimed an order: "That proceedings 91714 of 2002 in the Common Law Division of this Court be stayed pending final orders in the herein proceedings." 4 In support of the motion the plaintiff read the affidavit of Bryan Robert Belling, sworn on 17 June 2003, together with two affidavits of Damian Gregory Ward, sworn on 29 September 2003 and 3 November 2003. The plaintiff tendered its notice of objection to the first defendants' bill of costs, which was an exhibit to Mr Ward's first affidavit. 5 The first defendants read two affidavits sworn by Michelle Kay Bain on 10 July 2003 and on 8 September 2003. Tendered in their case were the pleadings in proceedings in the District Court of New South Wales commenced by them against the plaintiff in May 2002, which were an exhibit to the first affidavit sworn by Ms Bain. 6 The first defendants contended that the plaintiff's motion was misconceived. The "proceedings" that were the subject of the application for a stay were a costs assessment under Pt 11 Div 6 of the Legal Profession Act 1987 (NSW) (the Act). The conduct of a costs assessment was submitted not to constitute proceedings in the Court: Ryan v Hansen t/as Hansens Solicitors [2000] NSWSC 354; 49 NSWLR 184 per Kirby J at 192 [32]. At the conclusion of the hearing I reserved my decision and gave the parties leave to file written submissions on this issue. 7 The proceedings were re-listed before me on 6 November 2003 by consent and on that occasion the plaintiff sought and was granted leave to file a summons in court. By its summons the plaintiff claimed orders against the first defendants and a second defendant, Gordon Salier, the costs assessor to whom the first defendants' bill of costs had been referred pursuant to s 206 of the Act. By its summons the plaintiff claimed: "1. An order that the first and second defendants be restrained from further conducting or taking any steps in the costs assessment constituted by application 91714 of 2002 (the application) currently referred to the second defendant as costs assessor pursuant to s 206 of the Legal Profession Act 1997. 2. An order, until further order, that the first and second defendants be restrained from further conducting or taking any steps in the application currently referred to the second defendant as costs assessor pursuant to s 206 of the Legal Profession Act 1997. 3. An order that the application be stayed pending final orders in proceedings 20094 in the Professional Negligence List including any appeal therefrom." 8 By consent the parties agreed that the affidavits read on the hearing of the amended notice of motion were to be taken as read in the summons proceedings.

[24]

30 In submissions filed by the plaintiff in support of its amended notice of motion it was contended that there were two grounds giving rise to its entitlement to a stay of the costs assessment pending the outcome of the professional negligence proceedings. These were: "(a) Where there is a major disputed question of negligence in respect of a solicitor's work, a fortiori where it is the subject of existing Supreme Court proceedings in the Professional Negligence List, the assessment process under the Legal Profession Act is not available as a matter of jurisdiction alternatively, is not the appropriate forum; or (b) any costs assessment, if it leads to a judgment, may give rise to issues of res judicata/issue estoppel such that it would be manifestly unjust for the plaintiff to be unable to pursue its negligence action in the Supreme Court proceedings." 31 The plaintiff's submissions were recast with respect to its summons proceedings although it still sought to rely on the authorities referred to in the earlier submissions. It is the plaintiff's assertion that the Court's general supervisory jurisdiction over inferior courts and tribunals includes a supervisory jurisdiction over costs assessors prior to the issue of a determination. An order in the nature of prohibition was submitted to be appropriate in the exercise of the Court's general supervisory jurisdiction for either of two reasons: "(a) To prevent the assessor acting in excess of his jurisdiction/statutory function; (b) to prevent the costs assessment working an injustice or oppression to the plaintiff in light of its Supreme Court professional negligence proceedings no. 20094/03." 32 The contention that the second defendant would be acting in excess of his "jurisdiction/statutory function" should he proceed with the costs assessment was argued by reference to a number of authorities dealing with the taxation of costs by a taxing officer. In this respect the plaintiff relied upon re Massey v Carey (1884) 26 Ch D 459; re Baker Johnson's Bill of Costs [1995] 2 Qd R 234 at 240-241 and Abrahams v Wainwright Ryan [1999] 1 VR 102 at 119-120. In its written submissions of 28 November 2003 the plaintiff contended: "Commencing at least with the statement of principle of Baron Parke in Matchett v Parkes 9 M&W 767 at 768 through to the judgment of the Victorian Court of Appeal in Abrahams v Wainwright Ryan [1999] 1 VR 102 at 119 - 120 (other authorities already referred to in prior submissions), there is ample authority for the proposition that where a client resists a solicitor's taxation/assessment of his or her fees on the ground of professional negligence and wishes instead to commence an action (and does so) for negligence in the courts, the taxing officer/assessor loses his or her statutory jurisdiction/power to proceed. Consistent with the reasoning of the Victorian Court of Appeal and considering the Supreme Court Rules , the above principle ought be held not to have been overturned by the Legal Profession Act 1997." 33 In Ryan Kirby J reviewed the authorities upon which the plaintiff relies, together with a number of other authorities, in the context of considering the scope of the powers conferred upon a cost assessor conducting an assessment of costs under Pt 11 Div 6 of the Act. His Honour considered whether the costs assessor had jurisdiction to determine the issues of negligence raised by the plaintiff by his cross-claim at 196 and following. He noted that the terms of s 208P, which allow a costs assessor to disallow costs claimed by a solicitor against his or her client upon satisfaction: "… that costs have been incurred improperly or without reasonable cause, or have been wasted by undue delay or by any other misconduct or default."

[25]

In this context his Honour noted at [56] and following that the concept of impropriety in the context of costs had been given a broad definition. His Honour referred to re Massey and re Windeyer , Fawl & Co ; ex parte Foley (1930) 31 SR (NSW) 145; Mason-Jones v Jones (1987) 11 NSWLR 583 and Cachia v Isaacs (1985) 3 NSWLR 366. From that analysis his Honour distilled a number of principles at 199 - 200 [71]: "Fourthly, if through the solicitors negligence or ignorance, expenditure has been incurred, the assessor may disallow such expenditure on the basis that it has not been properly incurred: re Massey & Carey . Fifthly, if through negligent advice, work has been done or expenditure has been incurred, the assessor may disallow such expenditure, or the cost of that work: re Windeyer . … Ninthly, where a solicitor is negligent, there may be a number of consequences for the client. The client may be disadvantaged in having work done for which he is later charged, where there has been no benefit from that work. The consequences for the client, however, may go beyond that. The negligence may bring about the failure of the action. The client then loses what he sought to gain by the litigation. Or the client may be disadvantaged in some other way. He may, for instance, alter his position to his detriment as a result of poor advice. Where the solicitor's negligence has consequences beyond the cost of the work performed, the matter is properly one for a cross action. Tenthly, that is not to say that the client, in such circumstances, can afford to ignore an application by the solicitor to have a bill of costs assessed. The client, in such circumstances, not only has a right to claim damages in a cross-claim, but the right to resist (upon the grounds set out above) a claim for the cost of the work performed. A negligent solicitor, in such circumstances, can only recover for services which, notwithstanding his negligence, were of some real advantage to the client: Cachia v Isaacs ." 34 It does not seem to me that Ryan supports the proposition that a costs assessor to whom an application for an assessment of costs is referred pursuant to s 206 of the Act is without power to carry out an assessment in a case in which there is a "major disputed question of negligence in respect of a solicitor's work" (plaintiff's written submissions, 3/11/03).

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