Peter Francis Gorczynski v Leichhardt Council & Anor [2007] NSWSC 202 | Case summary

JUDGMENT 1 HIS HONOUR: The plaintiff, Peter Francis Gorczynski, was involved in litigation with the first defendant, Leichhardt Council, in the Land and Environment Court and the Court of Appeal. A number of costs orders were made against him and, as a result, the Council is claiming costs in an amount in excess of $200,000. On 9 June 2006 the Council lodged with the Manager, Costs Assessment an application for costs assessment under s353 of the Legal Profession Act 2004. On 21 June 2006, pursuant to s357 of that Act, the Manager referred the application to a costs assessor, Mr R P Mallik. Mr Mallik is the second defendant in the present proceedings, and has entered a submitting appearance. 2 Regulation 125(1)(a) of the Legal Profession Regulation 2005 requires that, before an application is made to the Manager, it should be sent to the person liable to pay the costs with a notice informing that person that any objection to the application must be lodged with the applicant within 21 days after receipt of the notice. Any objection received is to be attached to the application before it is lodged with the manager or, if no objection is received, the applicant must certify to that effect before lodging the application: pars (b) and (c). The application may not be lodged until after any objection is received or the 21 day period during which objection may be made expires, whichever first occurs: par (d). 3 It is the Council's case that, in compliance with reg 125(1)(a), the plaintiff was personally served with the application on 17 March 2006. The plaintiff denies this, contending that the first he knew of the application was after it had been lodged with the Manager. I received evidence on this issue. The plaintiff also contends that the application lodged on 9 June 2006 was defective in form, in that it was neither signed nor dated and a number of items in the prescribed form were not completed. 4 Between June and August 2006 the plaintiff wrote on a number of occasions to the Council's solicitors, to the Manager and to the assessor, Mr Mallik, complaining about these matters and challenging the validity of the application. Over that same period the following steps, relevant to the proceedings before me, were taken: (a) On 22 June the Council's solicitors wrote a letter to the plaintiff which was said to enclose the application (that is, the prescribed form of application and the bill of costs). The plaintiff says that he received the bill of costs but not the application itself. (b) On 27 June the Council's solicitors forwarded to the Manager a formal application which was signed, dated 26 June, and appropriately completed. This document does not appear to suffer from any of the defects of which the plaintiff complained in the original application of 9 June. (c) On 28 June the Manager forwarded to the plaintiff what appears to be a copy of the original application. (d) On 4 August Mr Mallik forwarded to the plaintiff a copy of the application which the Council's solicitors had sent to the Manager on 27 June. 5 By summons, the plaintiff seeks declarations that neither the original application of 9 June nor any of the other documents to which I have referred was made in accordance with the Legal Profession Act and that each of them is of no legal effect. 6 In the letter of 4 August to which I have referred, Mr Mallik noted the plaintiff's complaints that the application had not been served on him before it was lodged on 9 June and that the document lodged on that day was defective in form. However, he expressed his conclusion that those complaints had been addressed by the subsequent filing and service of an application, appropriately completed. As I have said, he enclosed a copy of that application with the letter, and he expressed his intention to deal with the application upon the basis that any defect in it had been cured. He also allowed the respondent until 1 September to file and serve any objection he wished to make (clearly a reference to objections under reg 125). 7 The plaintiff also seeks the declarations to which I have referred "in place of the determination" by Mr Mallik that the form of application forwarded by the Council's solicitors to the Manager on 27 June and by Mr Mallik to him on 4 August cured the defects in the other documents. 8 Counsel for the plaintiff, Mr Skinner, argued that the application lodged with the Manager on 9 June was invalid and that the jurisdiction of the Manager to refer the matter to an assessor, purportedly exercised on 21 June, had not been enlivened. He argued that service of the application upon the plaintiff before its lodgement with the Manager, as required by reg 125(1)(a), was an essential prerequisite to the invocation of that jurisdiction, because the application could not be lodged until an objection had been received or the time to make one had expired: reg 125(1)(d). The application lodged on 9 June purported to certify, in accordance with par (c), that no objection had been received from the plaintiff. However, it is obvious that that certification would be nugatory, and the requirement of par (d) could not be met, if the application had not been served. 9 Mr Skinner also argued that the application lodged on 9 June was invalid because it was defective and that, for that reason alone, the statutory jurisdiction had not been enlivened. As I have said, the defects are said to be the failure to complete relevant parts of the prescribed form. The application was not signed or dated. (Nor, it is said, was the attached bill of costs.) In addition, the following items in the prescribed form were not completed: (a) Item 4, which requires the amount of costs in dispute to be specified; (b) Item 5, which requires the total amount of costs payable to be set out; (c) Item 6, which requires the date on which the application was sent to the respondent to be specified.

(In the correspondence to which I have referred the plaintiff also complained that item 8 was incomplete, in that it did not specify his address for service. That matter was not pressed in submissions.) 10 In all these respects, Mr Skinner submitted, the application of 9 June failed to comply with s354 of the Act, subs(1)(a) of which provides that an application for costs assessment "must be made in accordance with the regulations …". He also submitted that no step taken after the purported referral of the matter to Mr Mallik on 21 June could cure lack of service under reg 125(1)(a) or the formal defects in the application, because the legislation confers no power upon the Manager or a costs assessor to dispense with any of the statutory requirements or to cure any irregularity. 11 Mr Skinner relied on the decision of the Court of Appeal in Brierley v Reeves (2001) 51 NSWLR 689, a case dealing with the procedure for costs assessment under the predecessor to the present Act, the Legal Profession Act 1987. In that case the appellant had applied for assessment of costs and the matter had been referred to an assessor. The assessor had determined that he had no jurisdiction to deal with the referral because of a procedural defect in the application. The appellant appealed against that determination under s208L of the 1987 Act, but Master Malpass (as he then was) dismissed the appeal. An appeal against that decision was, in turn, dismissed by the Court of Appeal. 12 The appellant had applied for assessment of costs under s199 of the 1987 Act, which required the application to be made within the period prescribed by the regulations. That period was twelve months. At issue was s203 of the Act, the effect of which was that the application for assessment was to be in the prescribed form and was to be accompanied by the prescribed fee, subject to a discretion conferred by subs (4) on the proper officer of the Supreme Court to waive or postpone payment of the fee, wholly or in part, in certain circumstances. There is no need to recount the subsequent history of the pursuit of the application. It is sufficient to say that the appellant made the application within the twelve month period, but it was not accompanied by the prescribed fee and the proper officer had not waived or postponed payment of it in accordance with s203 (4). 13 The Court of Appeal held that in the circumstances the application was invalid. The leading judgment was delivered by Rolfe A-JA. Speaking of s203, his Honour said (at 695): The clear words require, subject only to s203(4), that the application for assessment is to be accompanied by, that is have with it, the prescribed fee. It is the making of the application in the form required together with, once again subject to s203(4), the required fee that enlivens the jurisdiction under the Act to have the assessment referred to a costs assessor to be dealt with under the Act. 14 Mr Trebeck, for the Council, submitted that I would be satisfied that the application had been served in accordance with reg 125(1)(a), although he contended that for the purpose of these proceedings the plaintiff bore the burden of proving that he had not. He argued that, in any event, there is nothing in the Act which provides that an application is vitiated by a failure to comply with that regulation. The requirement in s354(1)(a) that the application be made in accordance with the regulations, he said, is a reference to the form of the application, not to the preliminary processes set out in reg 125. He referred to reg 124(1), which provides: For the purposes of section 354(1)(a) of the Act, an application for assessment of party/party costs under section 353 of the Act is to be made in the approved form. 15 As to the defects in the application of 9 June, Mr Trebeck pointed out that the prescribed form had been used and that the only complaint was that it was neither signed nor dated and that it did not set out all the required information. The information which was not supplied could be gleaned from the bill of costs itself or would have been within the knowledge of the plaintiff. That being so, he argued, there had been substantial and, hence, sufficient compliance with the prescribed form: s80(1) of the Interpretation Act 1987. He also relied upon the fact that a completed application, duly signed and dated, was subsequently lodged and served. 16 While I can see the force of these arguments, it is neither necessary nor desirable to decide them because I am persuaded by Mr Trebeck's alternative submission that the relief the plaintiff seeks in the summons is inappropriate. I have referred to Mr Mallik's letter to the plaintiff of 4 August 2006 in which he conveyed his decision to continue with the assessment, and his conclusion that any defect in the application on 9 June had been cured by the subsequent application and that any failure to serve the application under reg 125 had been remedied by service of the amended application and the allowance of time to make any objection. Mr Trebeck argued that the present proceedings are effectively a challenge to that decision or determination by Mr Mallik, and that the plaintiff should pursue one or other of the remedies available to him under the Legal Profession Act. 17 Subdivision 5 of Div 11 of the Act provides for review of a cost assessor's determination by a panel of two assessors. Subdivision 6 provides for appeals to this Court against decisions or determinations of an assessor. Section 372 provides: A costs assessor's determination of an application is binding on all parties to the application and no appeal or other assessment lies in respect of the determination, except as provided by this Division. 18 Mr Trebeck submitted that Mr Mallik's letter of 4 August amounted to a "determination", as that expression is used in Div 11 of the Act. In particular, he argued that it was a determination for the purposes of s373, the section enabling an application for review under Subdivision 5. By s373(1), the right to apply for a review is conferred upon a "party to a costs assessment who is dissatisfied with a determination of a costs assessor…". He relied in part upon the fact that in the plaintiff's summons, as I have said, Mr Mallik's letter is referred to as a "determination". 19 Whether the letter was a determination in the relevant sense is a matter of statutory construction, which is not assisted by any apparent admission by the plaintiff. I doubt that it was. In the context of Div 11, it seems to me that the expression "determination" in s373 is a reference to the final disposition of an application for assessment, rather than a decision made in the course of dealing with it. This was accepted to be the case in Currabubula v State Bank of New South Wales [2000] NSWSC 232 at [76]. That was a decision of Einstein J under the 1987 Act, in which his Honour was considering provisions for appeal to this Court from decisions or determinations of a costs assessor identical to those in Subdivision 6 of the present Act. 20 Of course, the issues raised by the plaintiff in his summons are at the threshold of the Council's application. If they were to be resolved in the plaintiff's favour, the application could proceed no further. Obviously, it would cause great inconvenience and expense if they could not be dealt with until Mr Mallik had completed his assessment. However, that is not the case under the legislation and, in the event, I find it unnecessary to express a firm conclusion about the scope of the term "determination". 21 Subdivision 6 begins with s384, which confers a right of appeal to this Court against "a decision of a costs assessor as to a matter of law arising in the proceedings to determine the application". Section 385 provides for an appeal by leave of the Court against the "determination" of an application by a costs assessor. It was the predecessors of those provisions, respectively ss208L and 208M of the 1987 Act, which Einstein J was considering in Currabubula v State Bank of New South Wales. At [70] - [80] his Honour examined authorities on the meaning of the word "decision", which establish that the scope of the expression is to be gleaned from its statutory context. He concluded that s208L contemplated an appeal from a ruling made by an assessor in the course of assessment and prior to final disposition of it. As he put it at [80]: To my mind, the Act clearly contemplates that a decision is something different from and anterior to a determination of the assessment. The use of the present tense in s208L(1) - 'arising in the proceedings to determine' - rather than the past tense - 'arose in the proceedings to determine' - demonstrates that the statute intended to create an appeal right while proceedings to determine the application were extant. 22 I respectfully agree with his Honour's reasoning and with his conclusion. It follows that in the present case Mr Mallik's decision of 4 August would be appealable under s384, quite apart from any right of appeal or review which might be pursued upon completion of the assessment. The question whether the plaintiff was served with the application on 17 March 2006 is one of fact, but that is not to the point. Mr Mallik's decision was that any irregularity relating to service of the application or the form of it was cured by steps subsequently taken and, clearly, that is a matter of law. 23 Let me return, then, to s372, which confines any appeal or other assessment "in respect of" a determination to the procedure provided by Div 11. In Currabubula Einstein J examined the predecessor of that provision, s208K of the 1987 Act, at [54] - [61]. His Honour considered the declaratory jurisdiction of this Court, together with authorities on the approach to legislation which purports to limit the exercise of that jurisdiction. He expressed his conclusion at [61] as follows: Despite the strength of the presumption against this Court being deprived of its declaratory jurisdiction, I see no escape from the conclusion that this is the effect of s208K. The germane words of the section are simple: 'no appeal lies in respect of a determination, except as provided by this Division.'

Peter Francis Gorczynski v Leichhardt Council & Anor

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