Montgomery v Egan Simpson Solicitors

LEGISLATION CITED : Legal Profession Act 1987 (NSW) - s 208M

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 BHP Petroleum Pty Ltd v Oil Basins Ltd [1985] VR 756 Busuttil v Holder & Anor (NSWSC, unreported Master Greenwood, 9 August 1996 122000/96) BC9603488 Chapmans Ltd v Yandell (t/as Yandells) [1999] NSWCA 361 Coulter v Regina (1988) 164 CLR 350 CASES CITED : Darrel Lea (Vic) Pty Ltd v Union Assurance Society of Australia Ltd [1969] VR 401 Kioa v West (1985) 159 CLR 550 Larsen v Vile [1999] NSWCA 397 Neimann v Electronic Industries Ltd [1978] VR 431 Perry v Smith (1901) 27 VLR 66

Brett Charles Montgomery & Leonie Gai Montgomery PARTIES : (Plaintiffs) Jeffrey Francis Egan & Margaret Anne Simpson t/as Egan Simpson Solicitors

Brett & Leonie Montgomery (Plaintiffs in person)

SOLICITORS : Ms K Newell, Egan Simpson Solicitors (Defendant)

LOWER COURT JURISDICTION : Costs Assessor & Costs Review Panel

LOWER COURT JUDICIAL OFFICER : Costs Assessor T E Kitamura, Review Panel Members G A Salier & M J Robinson

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

12152/2005 - BRETT & LEONIE MONTGOMERY v JEFFREY FRANCIS EGAN & MARGARET ANNE SIMPSON t/as EGAN SIMPSON SOLICITORS

JUDGMENT (Leave to appeal decision of Costs Assessor and Review Panel) 1 HER HONOUR: By summons filed 24 May 2005 the plaintiffs seeks leave to appeal the decisions of the Costs Assessor T E Kitamura dated 22 September 2004 and the Review Panel dated 18 March 2005 pursuant to s 208M of the Legal Profession Act 1987 (NSW) (the Act). The plaintiffs relied on their affidavits sworn 14 May 2005, 10 June 2005, 18 July 2005, 29 July 2005. The defendant relied on the affidavits of Margaret Anne Simpson sworn 12 July 2005. 2 The plaintiffs are Brett Charles Montgomery and Leonie Gai Montgomery. The defendants are Jeffrey Francis Egan and Margaret Anne Simpson t/as Egan Simpson Solicitors. The plaintiffs appeared unrepresented. They were well prepared. Both plaintiffs actively participated in the hearing.

Grounds of appeal 3 The plaintiffs appeal the whole of the decisions the Costs Assessor and the Review Panel on the grounds that neither the Costs Assessor nor the Review Panel addressed all of the items pertaining to this assessment. In addition, it emerged during oral submissions that the plaintiffs' main areas of concern were firstly, that the plaintiffs did not receive a document forwarded by the defendant to the Costs Assessor; secondly, the Costs Assessor's reasons did not specially give reasons in relation to 26 items in the bill; thirdly, they were not reimbursed for the costs of the advice of a costs consultant; and lastly, that they were obliged for the solicitor's work which was not of a standard acceptable them.

Leave for an extension of time to lodge an appeal 4 The defendant submitted that both the application to appeal the decision of the Costs Assessor and the Review Panel were lodged out of time. The plaintiffs sought review of the Costs Assessor's decision by a Review Panel and when that decision was given, they were not satisfied with the outcome so sought leave to appeal to this Court. It is my view they should not be penalised for seeking to have their matter resolved by means of review. 5 The determination of the Review Panel was made on 18 March 2005. The appeal should have been lodged by about 4 April 2005. On 24 May 2005 the summons seeking leave to appeal was actually filed. The appeal was lodged about 20 days late. The explanation is that the plaintiffs were under the misapprehension that they had 28 days in which to take these proceedings. They had sought the advice of the Manager, Costs Assessment. On 22 April 2005 the Manager of Costs Assessments replied to the plaintiffs email dated 11 April 2005.On 24 May 2005 this application was filed. There is no prejudice to the defendant. In these circumstances, it is my view that an extension of time to lodge this appeal should be granted.

The bill of costs, the subject of the costs assessment 6 The bill of costs relates to solicitor's work done in both the Federal Court and the Federal Magistrates Court. Initially, the bill of costs went before the Family Court of Australia for taxation. The Family Court issued a certificate of taxation in relation to the matters where it had jurisdiction, namely the first 40 items contained in the bill. The plaintiffs applied for the balance of that bill of costs which related to work done in relation to the Federal Magistrates Court to be assessed in this Court.

The law 7 Section 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." 8 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. An appeal under s 208L is confined to law. Whereas an appeal under s 208M (provided leave is granted) is a complete new hearing (at para 31). 9 As a general rule it is safe to say that leave will only be granted where there is some error of principle which works a substantial injustice to one of the parties - see Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177 per Gibbs CJ, Aickin, Wilson and Brennan JJ; BHP Petroleum Pty Ltd v Oil Basins Ltd [1985] VR 756; Neimann v Electronic Industries Ltd [1978] VR 431 at 441; Perry v Smith (1901) 27 VLR 66; Darrel Lea (Vic) Pty Ltd v Union Assurance Society of Australia Ltd [1969] VR 401 at 407; and Busuttil v Holder & Anor (NSWSC, unreported Master Greenwood, 9 August 1996 - 122000/96) BC9603488. 10 In Chapmans Ltd v Yandell (t/as Yandells) [1999] NSWCA 361, Fitzgerald JA (with whom Mason P and Davies AJA agreed) stated that 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 are not able to be brought with the attendant 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 [11] - see Coulter v Regina (1988) 164 CLR 350 at 359. Fitzgerald JA in Chapman stated, at [12], that in considering whether leave to appeal should be granted, it is important to ascertain whether 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. 11 The balance of the bill of costs, the subject of the costs assessment, was for the sum of $5,717.00. After a number of changes to the calculations, on 22 September 2004, the Costs Assessor issued an amended certificate of assessment in the sum of $3,962.33. The Review Panel in effect confirmed the Costs Assessor's decision.

The Costs Assessor's decision 12 The Costs Assessor in his reasons dated 8 July 2004 included a heading entitled "Schedule of Professional Costs Reduced" in which he itemised certain items in the bill and gave an explanation as to the extent if any to which he considered each item in the bill exceeded what he considered was fair and reasonable in all the circumstances. 13 The 26 items that the plaintiffs refer to in their email addressed to the Costs Assessor dated 1 August 2004 are not included in that schedule. These 26 items included fax charges, photocopying charges and those engrossing letter. The plaintiffs claim that these costs were allowed and they should not have been. 14 The Costs Assessor in his reasons continued: "Explanation as to how the submissions made by the parties were dealt with. a. This is a practitioner and own client assessment in respect of proceedings where the client took the view that a modest estimate of fees at any early stage in the proceedings and some subsequent modest increases to that estimate should suffice to satisfy the solicitor's fees. The Applicant furnished two Lever Arch files of correspondence which demonstrated constant differences between the Applicant and the Respondent yet the Applicant continued to instruct the Respondent. b. This assessment flows from a Family Law dispute which was remitted to the Family Magistrate's Court from the Federal Family Court. The costing regime under the Legal Profession Act 1987 applies in respect of proceedings before the Family Magistrate's Court … c. I have carefully reviewed the material provided by both the Applicant and Respondent in the course of the assessment; I have also reviewed the basis of the Respondent's claim for fees and find it to be reasonable. d. The Applicant has objected both to individual attendances and to blocks of attendances. One such block of objections is under Objection number 36. The items in the bill have, however, been considered individually in undertaking the assessment. e. The assessment was undertaken having regard to the differences between the Applicant and the Respondent, the substance of each attendance and whether the attendance was reasonable and finally whether the amount claimed was fair and reasonable. f. There were claims for telephone calls to unavailable parties with a message to call back. Those attendances are not reasonable and have been disallowed. There were attendances for receiving facsimiles - these attendances are not reasonable and have been disallowed. Claims for dispatching faxes were generally excessive and have been allowed at the rate of $1.00 per page."

The Review Panel's reasons 15 The Review Panel in their reasons for determination of costs dated 18 March 2005 found: "1. The total amount of costs for providing legal services determined to be fair and reasonable by the Review Panel: Four thousand three hundred dollars and thirty-one cents ($4,300.31) inclusive of GST. 2. The total amount of disbursements determined to be fair and reasonable: Two hundred and sixty-seven dollars and fifty-eight cents ($267.58) inclusive of GST, 3. Each disbursement varied by the determination: NIL." 16 The Review Panel dealt with the grounds for review as follows: "… 2. Items objected to and not addressed by the Assessor There seems to be some confusion on the part of the Review Applicants in this regard. It seems to the Review Panel the Review Applicants are addressing items included in the first forty items set forth in the bill. The Review Respondent conceded no charge could be raised for these first forty items because they were included in a bill which was previously published in the amount of $441.00 and paid by the Review Applicants. It therefore follows that neither the Costs Assessor at first instance nor the Review Panel considered the first forty items or objections thereto. 3. Family law charges were assessed and allowed and should not have been allowed The Review Panel believes it has dealt with this ground in carrying out its task. 4. Paragraphs 4-6 (inclusive) of the Grounds for Review The Review Panel has, as it is empowered to do, carried out its own assessment of the practitioner's bill and the Certificate of Determination of Costs issued by the Review Panel is published on that basis. In taking this step, which it is empowered to do, the Review Panel believes it has addressed any issues of bias and procedural fairness. 6. Costs incurred by Review Applicants The Review Panel has addressed this particular ground. It has required the Review Respondent to pay the costs of the Costs Assessor at first instance. It has deducted from the amount for which it would otherwise issue a Certificate of Determination of Costs the filing fee paid by the Review Applicants on the original application for assessment and the fees charged by Gold Coast Legal Costs. It has not allowed the costs claimed in respect of referral to Dr Pesce. In the view of the Review Panel this was an overkill on the part of the Review Applicants as Gold Coast Legal Costs had adequately addressed matters on behalf of the Review Applicants in carrying out the work which it did. Regrettably the provisions of Section 208KH(3) of the Legal Profession Act 1987 leave the Review Panel with no alternative but to required the Review Applicants to pay the costs of the review." 17 The plaintiffs had filed a notice of objection and submitted two folders of material to the Costs Assessor for his consideration. The defendant in turn filed a general response accompanied by a reply which identified each of the disputed items in the bill and commented upon the objections. I accept that the plaintiffs did not receive the itemised reply that the defendant forwarded to the Costs Assessor. The plaintiffs submitted that as they did not receive this document they were denied procedural fairness. 18 Section 208 of the Act, where relevant, reads: "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." 19 However, whether there is a denial of procedural fairness depends on the circumstances in each case - see Kioa v West (1985) 159 CLR 550. The plaintiffs sought legal assistance in the preparation of their documents. They forwarded to the Costs Assessor two folders of documents. The plaintiff had the opportunity to forward a notice of objection together with submissions to the Costs Assessor. The plaintiff has had the opportunity of forwarding a reply to the objections to the Costs Assessor. The parties have been given a reasonable opportunity to be heard. No further documents were required from the parties after the objections and reply. By that stage the issues in dispute were covered by the parties. 20 The plaintiffs submitted that at paragraph 2 of the reasons it was the Review Panel who was confused not them. The extra 26 items appear in a letter addressed to the Costs Assessor dated 1 August 2004. These items were drawn to the attention of the Costs Assessor who by that time had given his decision. They refer to items from 42 to 291. Those items were not reduced. I have perused those items as particularised in the bill of costs together with the corresponding objections. These items were considered by the Costs Assessor to be fair and reasonable. While the plaintiffs are correct in saying that those 26 listed items are not referable to the proceedings in the Family Court, it was open to the Costs Assessor to consider those items to be fair and reasonable. 21 In relation to the complaints about the solicitor being requested to chase up matters, this was disputed by the solicitor. The Costs Assessor made his decision in the light of the submissions from both parties. In relation to the costs the plaintiffs incurred preparing their objections, the Costs Assessor allowed one such disbursement of $495.00 being the costs of Gold Coast Legal but he did not allow the additional costs of Dr Giuseppe Pesce, Barrister. It was open to the Costs Assessor to do so. 22 It is my view that the plaintiffs' application for leave to appeal should be refused as the plaintiffs have not demonstrated any error of principle which works a substantial injustice to them. 23 Costs are discretionary. Costs normally follow the event. The plaintiffs are to pay the defendant's costs as agreed or assessed.

(1) An extension of time to file an application for leave to appeal is granted.

(4) The plaintiffs are to pay the defendant's costs as agreed or assessed. **********

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