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[2008] QSC 172
General information, not legal advice.
Supreme Court of Queensland
2008-08-21
McMeekin J
Original judgment source is linked above.
[1] McMEEKIN J: The applicant, Mr Remely, brings four applications:
(b) to set aside the appointment of a costs assessor;
(c) to set aside a default assessment of costs and costs orders;
[2] Before turning to the issues it is necessary to say something as to the background facts. The dispute between the parties first came before this court by way of an application for judicial review of a decision of the first respondent concerning three things - a notice to quit the second respondents' caravan park, various charges that Mr Remely alleged were illegally levied by the second respondents, and his bond. On 28 August 2007 Dutney J dismissed the application and ordered Mr Remely to pay the second respondents' costs.[1] The costs owing pursuant to that Order are the subject of the various applications now before me.
On 5 December 2007 the solicitors acting for the second respondents sent by prepaid post a costs statement to the applicant's address for service - the Bundaberg East Post Office.[2]
Mr Remely says that he did not receive that statement. He acknowledges receipt of a letter of 19 December 2007 sent to the same address in which the solicitors sought a response to their communication of 5 December and indicating that failing a response they would make application to the court for the appointment of an independent assessor.[3] Mr Remely did not respond to that letter.
On or about 12 February 2008[4] Mr Remely received the second respondents' Application for Costs Assessment and Costs Statement filed 5 February 2008 which included the costs statement. The application was initially set for hearing on 4 March 2008. The matter came on for hearing on 7 March following a request for an adjournment by Mr Remely.[5] The Acting Registrar dealt with the application, dismissing Mr Remely's application for a further adjournment[6], granting him 21 days in which to serve any objections to items claimed in the costs statement, appointing a costs assessor, and ordering that if no objections were received the matter proceed by way of default assessment pursuant to rule 708.
On the day prior to the hearing before the Acting Registrar Mr Remely filed the first of the applications before me. That application seeks the dismissal of the application that came before the Acting Registrar on the 7th March 2008 and was then dealt with by him as I have indicated.
No objections to the costs statement were filed by Mr Remely within the 21 days allowed (ie by 28 March 2008).
On 31 March 2008 Mr Remely filed the second of the applications before me - to set aside the appointment of the costs assessor appointed by the Acting Registrar on 7 March.
Pursuant to the Order of the Acting Registrar of 7 March 2008 and in accordance with the Rules[7] the matter proceeded by way of a default assessment. The Certificate of the Costs assessor was filed on 22 April 2008 and on the 28 April 2008 an Order was made in the following terms: "The costs payable by the applicant to the second respondent pursuant to the Order of the Supreme Court dated 28 August 2007 have been assessed and fixed in the amount of $13,224.86."
On 30 June 2008 Mr Remely filed his third application - to set aside the default assessment (certified by the costs assessor on 22 April) and the Order made on 28 April.
Subsequently the second respondents obtained a warrant to enforce the court's Order of 28 April 2008 and on 14 July 2008 Mr Remely filed his fourth application to stay the execution of the warrant and set that aside.
The First Application - Dismiss the Application for Costs Assessment
[12] Mr Remely's complaint is that the application of 5 February and the Costs Statement did not comply with the provisions of the Uniform Civil Procedure Rules. He contends that each is therefore a nullity and that I now have the power to dismiss the application despite it having been dealt with by the registrar and orders having been made.
[13] Mr Remely is right that the application and costs statement did not comply with the UCPR. The rules changed between the time the costs statement was initially sent on 5 December 2007 and the time the application was filed on 5 February 2008. Rule 705 in its present form was introduced on 10 December 2007[8] - 5 days after the solicitors had served the costs statement. By February 2008 r 705 required that the costs statement be in the approved form which by then was Form 60A. The second respondents' solicitors did not use that form. They persisted with the costs statement already served. Nonetheless the costs statement provided contained the particulars as required by Form 60A. The approved form for the application had become Form 9. The solicitors used the form approved for the application at the time of service of the costs statement - the then Form 60, which is substantially similar to Form 60A.
[14] The rules require the application to be returnable before the registrar: r 710(3). As I have indicated the Acting Registrar heard and determined the application on 7 March 2008.
[15] The issues then are: what effect does a failure to use an approved form have on a proceeding; and what power does the court have to dismiss an application after it has been heard and determined by the duly constituted officer of the court.
Mr Remely was unable to direct me to any provision giving me power to dismiss an application that had already been heard and determined by an officer of the court acting within power. His proper course was to appeal the Orders made. That he did not do.
[17] It should be appreciated that this was not an application to set aside an order of the court duly entered but in respect of which a change in circumstance might warrant relief from enforcement of the order. I received no submissions on the point but I apprehend that I have power to do that: Woods v The Sherriff of Queensland[9]. The assumption in such a case is that the order was rightly made. The basis here is the assumption that the order ought not to have been made.
Alternatively Mr Remely's argument might be construed as being that an Order made on a defective application is itself a nullity and a declaration to that effect should therefore be made. The premise however is wrong - r 371 UCPR expressly provides that a failure to comply with the rules (for example by using the wrong form) does not render "a proceeding, a document, step taken or order made" a nullity. As well, even if the application had been a "nullity" such that there was no proper proceeding before the court, an order of this court, once made, is not a nullity or invalid - it must be obeyed until set aside or quashed: Berowra Holdings Pty Ltd v Gordon.[10]
[19] Whilst in my view it is not relevant to consider the merits, in deference to the submissions made I will briefly refer to them. Mr Remely contended before me that the practical effect of using the wrong form was to misinform him of his true position. It is evident that was not so or, at least, that any misunderstanding was quickly corrected. Mr Remely promptly looked up the rules, annexed a copy of the correct form to his affidavit of the 6th March[11], and advanced this argument concerning the defective nature of the forms to the Acting Registrar on 7th March. The Acting Registrar determined that any prejudice brought about by the use of the outdated forms could be met by the directions that he gave including giving Mr Remely 21 more days to file his objections.
If it be relevant I agree with the Acting Registrar's approach. The costs statement used was in the appropriate form when it was served in December 2007. The Form 60 used for the application provided almost the same information as the Form 60A required in the costs statement. The most significant practical difference between the two forms is that the former version required objections to be lodged 2 business days before the directions hearing (ie on or before 2nd March on the initial hearing date and 5th March once the adjournment was obtained) whereas the later form required service of the objections within 21 days of service (the date of posting is not known nor the precise date of receipt but depending on which of Mr Remely's versions is accepted then the 2nd, 3rd or 4th March at the latest). There was no disadvantage to Mr Remely by the use of the wrong form. In any case if Mr Remely was confused as to the due date of his objections then that was entirely cured by giving him 21 more days from 7th March in which to file any notice of objection.
According to the application used by the second respondents Mr Remely's objections notice was required to comply with r 717 (referring to the rule as it existed prior to the amendments introduced along with Form 60A) rather than r 706 referred to in Form 60A, but r 706 replaced r 717 and the two rules are substantially the same. In the amended form the reference to the registrar was replaced by a reference to the costs assessor. All of this was clear to anyone aware of the amendment to the rules - as Mr Remely plainly was - and was cured by the directions made by the Acting Registrar.
Finally Mr Remely argues that there was short notice - r 710 required 21 days at least to elapse between service of the costs statement and the filing of the application for costs assessment. He says that service was affected on 12 February. The application was filed on 5 February. There are two difficulties with the submission - firstly, according to the evidence, service was properly affected upon posting to the address for service (see rr 112(1)(d) and 112(3)) which occurred in December. Mr Remely asserts that there is no proper evidence of posting but that is simply wrong - see the affidavit of Mr Dalton filed 5 February 2008. Secondly, a failure to comply with the rules is an irregularity which does not render the proceedings or consequent order a nullity: r 371.
The Second Application - to Set Aside the Appointment of the Costs Assessor
[23] Mr Remely's second application does not make plain, and nor did his submissions make plain, the source of my power to set aside the appointment of the costs assessor.
[24] The same considerations apply as previously - a valid Order of this court has been made and I have no power to go behind it. Again it was a matter for appeal if Mr Remely was dissatisfied with the decision of the Acting Registrar. Again there was no appeal.
[25] Reference is made in the application to r 453 which provides that "[T]he court as constituted by a judge, may order or direct that a relevant application ... cannot be heard by the court as constituted by a ...registrar". Mr Remely asserts that he referred the Acting Registrar to r 453. The Acting Registrar had the power to decline to hear the matter and refer it to a judge under r 455 but it was a matter for the Acting Registrar as to whether the interests of justice required the referral to a judge. Again any review of the exercise of his discretion is not a matter for me, but an appeal court. I do not mean by that to suggest that I see the slightest merit in any review.
[26] Again the merits are not relevant in the view I take but I will mention the points argued. Mr Remely complains that the effect of the procedure adopted was to prematurely appoint a costs assessor and further deprived him of the opportunity to apply to have an alternative assessor appointed. That is not so - r 710(2)(c) required the second respondents to nominate a costs assessor in their application which they did. A Consent was filed indicating the hourly rate charged.[12] Rule 713 then required Mr Remely to apply to the registrar for appointment of an alternative assessor or for directions. He did neither. If his referral of the Acting Registrar to r 453 should be construed as an application for directions then the Acting Registrar has dealt with the matter.
Finally Mr Remely asserts that the Acting Registrar "may find it difficult to remain objective"[13] and submits that the second respondents' solicitor and the Acting Registrar had privately conferred to achieve the outcome desired by the second respondents. There is no proper basis shown for this allegation. In any case it is properly a matter for appeal.
The Third Application - to Set Aside the Default Assessment and Costs Orders
(1) If a costs assessor is appointed under rule 708 to assess costs, the court may, on the application of the party liable for the costs, by order, set aside or vary a decision of the costs assessor or any order made under rule 740.
(i) the party's failure to file a notice of objection to the costs statement; and
(b) a notice of objection in accordance with rule 706(2) to(5), as an exhibit to the affidavit.
'(3) Rule 722 applies to any reassessment of costs on an application made under this rule.
[29] Rule 708 applies where, as here, no notice of objection is filed. The costs assessor appointed is required to proceed with a default assessment. He or she is required to allow each item subject to correcting "an obvious error". That was the process adopted here. Thus r 709 is engaged and the discretion given by it enlivened in this case.
[30] No explanation for the failure to file a notice of objection is contained in the affidavit in support of the application. If one gathers together the potential explanatory matters from the various affidavits filed then the following might be said:
(b) Further annexures to the affidavit material indicate that on 12 February 2008 Mr Remely had an appointment with Dr Bontchev when appointments were made for procedures to be performed for 27 February, 4 March, and 7 April.[16] These appointments were put off by Mr Remely.
(c) There is no costs assessor in Bundaberg, where Mr Remely apparently resides - I believe I have no evidence as to his residential address save that his most recent affidavit says that he is "of Bundaberg East Post Office".[17] Two costs assessors were approached. They resided at Brisbane and the Gold Coast. It was not possible "within the time allowed by the Acting Registrar" to travel to either of them "with the required documents" and explain "the details of the costs claimed".[18]
(d) Mr Remely is a layman and had "absolutely no idea which costs could be claimed" and "it took considerable time to verify that the costs statement was substantially different from the costs that could be claimed".[19]
[31] There are several difficulties with these possible explanations. Firstly, Mr Remely's ignorance of the proper level of costs is good reason for him to act promptly to protect his rights, not to delay. It affords no explanation whatever.
[32] Secondly, no medical evidence is advanced to show that in the material time - that is in the 21 days from 7 March - Mr Remely was unable by reason of any medical condition to make the necessary enquiries to locate a costs assessor or to post to him the necessary documents and to obtain back and file a notice of objection.
[33] Thirdly, no evidence is provided showing that a costs assessor, briefed in a timely way, could not have prepared a notice of objection within the time allowed.
[34] Fourthly, what is known of Mr Remely's activities is that he was far from disabled by any medical condition. On 13 March 2008 he appeared in person before the Court of Appeal on an application for leave to appeal the decision of Dutney J. Judgment dismissing that application was delivered on 4 April 2008.[20] The Court of Appeal subsequently received submissions from Mr Remely as to costs. The judgement of the court on costs was delivered on 20 May 2008.[21] On that day Mr Remely appeared before the court to seek a stay of the court's orders pending an appeal to the High Court, which application was dismissed.[22] Mr Remely has since filed an application for special leave to the High Court.
Thus Mr Remely was plainly in Brisbane in March to argue his case before the Court of Appeal and fit enough to appear. It would seem that Mr Remely was more than fit to locate and brief a costs assessor. There are many assessors in Brisbane.[23] No reason is advanced why Mr Remely could not have taken time to consult an assessor at that time.
Further it is evident that Mr Remely did make contact with costs assessors long before he brought this application. The material read before me includes an affidavit of Mr Remely sworn 26 May 2008 and filed in the Court of Appeal in which Mr Remely annexes affidavits by two costs assessors, one by a Mr Campbell sworn 23 April 2008 and one by a Mr Pike sworn 22 May 2008 annexing a notice of objection, responding apparently to another costs statement. I am not told when Mr Remely first made contact with a costs assessor. Plainly it was some time before 23 April 2008. No explanation is offered for the delay in obtaining and filing the notice of objection. Presumably it would not assist Mr Remely's cause for me to know the facts.
[37] Fifthly, it is worth noting that in the appeal heard on 13 March 2008 Fraser JA, who delivered the substantial reasons of the court, observed that Mr Remely had failed on "all issues", that he had pursued some "hopeless contentions", and that the "purported appeal from the trial judge's order [as to costs] is incompetent".[24] In its judgment on the issue of the costs incurred on appeal the Court referred to "the unmeritorious litigation so aggressively promoted by [Mr Remely]".[25] The Court noted that only about $200 was in fact in dispute.[26]
The true explanation then for the failure to file a notice of objection, as he was obliged to do under the Acting Registrar's order, is that Mr Remely was busy pursuing unmeritorious litigation over $200 against the second respondents, so unmeritorious that the Court of Appeal ordered that he pay indemnity costs.
[39] In my view there is no good explanation for the failure to file a Notice of Objections. That is of course but one factor, albeit an important one.
[40] The same considerations are relevant to the question of delay. Again no affidavit was filed offering any explanation. The relevant delay was at least from 28th March when the notice of objections was due to 30th June when this application was filed. Arguably the period from the admitted receipt of the costs statement on 10th, 11th or 12th February up until 28th March is relevant as well. The complete lack of diligence in pursuing any application for relief is explained only by Mr Remely's decision that the Acting Registrar's order could be safely ignored. Again this factor is strongly against an exercise of discretion in Mr Remely's favour.
[41] The matters relevant to the exercise of the discretion granted by the rule are not limited to the two matters mentioned in the rule but will include any other relevant factor. The most significant of those other factors include any prejudice suffered by the second respondents in reliance on the order of the court having been entered and the merits of a review of the default assessment and that in turn would depend on the cogency of the objections to that assessment.
[42] As to the merits of a review Mr Remely has filed as Exhibit A to his affidavit of 30 June 2008 an affidavit sworn 18 June 2008 by a costs assessor, a Mr Pike, to which is exhibited a notice of objection. The notice is compliant with rr 706(2)-(5) as required by r 709(2)(b), or at least it was not suggested by Mr Dickson, who appeared for the second respondents, that it was not.
[43] Mr Remely argued that the notice of objections prepared by Mr Pike demonstrated that there was substantial overcharging by the second respondents' solicitors and that it was unjust that he should be exposed to that. He pointed to the total of the objections which amounts to $6,895.82 out of a total bill of $13,224.86. Mr Remely led no evidence to support any objection taken.
[44] No submissions were addressed by either party as to the validity of the objections. The onus of course lay on Mr Remely to persuade me that there was merit or at least potential merit in the objections taken. The mere fact that Mr Pike queries items in the statement does not mean that the items were not properly allowable. Mr Pike has not seen or assessed the file of the second respondents' solicitors.
[45] Subject to one item that I will mention perusal of the notice of objections does not fill me with any confidence that there is any significant miscarriage of justice in allowing the bill to stand. Many of the objections are merely argumentative. It is apparent that several objections have been taken on grounds that depend solely on Mr Remely's version as to the facts. Examples include allegations that the time taken at a hearing was less than that claimed (objection nos. 50, 71), that attendances claimed did not occur (objection no. 52), or that typed transcripts did not exist where the solicitor claimed for reading them (objection no 60). No evidence was sought to be advanced by Mr Remely to demonstrate any inaccuracies in the facts assumed by the drawer of the costs statement.
[46] As well many proposed reductions make plain that Mr Pike cannot really justify any objection until he has seen the solicitor's file (eg objection nos. 7, 12, 13, 35, 36, 37, 62, 75, 103).
[47] Of considerable concern however are the introductory reasons to the notice which include: "The costs statement was not properly served. It was not within the time stipulated in the UCPR....The order of McMurdo J were unjust (sic) in ordering that Vandenberg's costs be on an indemnity basis". These legal arguments have nothing to do with the costs assessor's function and call into question the reliability of the assessor's approach.
[48] That last statement is particularly puzzling - the order the subject of the costs statement and the notice of objection was made by Dutney J not Phillip McMurdo J and was on the standard basis not the indemnity basis. McMurdo J has not been involved in any of the orders made against Mr Remely. McMurdo P presided at the appeal hearing on 13 March and joined in the orders made which included an order that Mr Remely pay costs of the appeal on an indemnity basis. But this costs statement has nothing to do with that order. Thus even if otherwise pertinent the comment is erroneous and irrelevant to this costs statement.
[49] Quite apart from those errors a comment on the justice of an order made by a court has no business appearing in a notice at all. It is not for a costs assessor to call into question the orders of the court. The comment reflects either Mr Pike's views or Mr Remely's views. If they are Mr Pike's views then he totally misconceives his function and duty. If they are Mr Remely's views then I query to what extent the notice of objection merely reflects what Mr Remely would like to say as opposed to the considered opinions of a qualified assessor as to the areas of legitimate concern.
[50] Further, in relation to some significant items it seems to me highly doubtful that the proposed reduction can possibly be right. For example objection 81 proposes a reduction to nil of amounts totalling $968.20 set out in Items 128 and 129 of the costs statement. Item 128 concerns the second respondents' claim for $775.50 for the costs of drawing the female second respondent's affidavit. Item 129 is for producing that affidavit. The reason given for the objection is that the work was partially done under Item 122 - which is a claim for $29 for a letter sent enclosing a draft affidavit - and that the charge should be reduced to amendments only.
[51] $1,380.20 is disputed in objections 119-120 on the ground that a solicitor is not entitled to claim for preparing his own account (Items 203-204). No authority was cited for the proposition. Mr Dickson informed me that the costs statement had been drawn by a costs assessor.
[52] The one item that is of concern is objection 122 which relates to items 209 to 235. Those items are headed "Anticipated Future Costs", and are in the sum of $1,386.55. The costs anticipate receipt of a notice of objection and the steps then likely to be required. Whilst such claims are commonly made in the preparation of a bill in anticipation of the necessary work to come, so that they are not later overlooked, they should not have been allowed on a default assessment when it was known that the costs had not been incurred. I know of no principle that would permit such a claim to be made.
[53] The only prejudice to the second respondents I can identify are the costs incurred in issuing the enforcement warrant in reliance on the Order and the cost of being kept out of the money due to them under the order. The second respondents are substantially out of pocket, even on Mr Remely's best case, by more than $6,300, and probably up to about $11,800, and have been so for a very long time now. Justice Dutney awarded costs on 28 August 2007. It is not irrelevant to this consideration that I bear in mind that the dispute is over $200. In my assessment these are cogent factors.
[54] All considerations are strongly against Mr Remely save that the default assessment should not have allowed costs not yet incurred. It seems to me that it would be plainly unjust to subject Mr Remely to those costs. However I have received no submissions relating to that matter and I will give the parties a chance to make such submissions as they may be advised in relation to it.
[55] I note that r 709(1) permits me to vary a decision of the costs assessor and any order made. Subject to considering any submissions by the parties on this aspect of the matter I presently propose to vary the order made by reducing the amount of the default costs assessment by $1,386.55. Otherwise I see no merit in the application.
The Fourth Application - the Stay of the Enforcement Warrant
[56] There are two potential grounds on which Mr Remely might rely to stay the enforcement order - firstly, that he has an application for special leave before the High Court which, if the application is granted and the appeal allowed, might result in the order of Dutney J being revoked; and secondly if I had come to the view that there was no valid order that ought to be enforced.
[57] The principles relevant to a stay by reason of the application to the High Court were reviewed by Keane JA in his Honour's reasons for refusing to order a stay of the costs orders made by the Court of Appeal pending the application for special leave before the High Court.[27] The critical issue is the balance of convenience: Rapid Roofing Pty Ltd & Ors v Natalise Pty Ltd & Ors.[28] I can with respect add nothing to his Honour's analysis. Most of the considerations there are relevant here.
As to the second ground, subject to the matter just mentioned, on which I am yet to hear the parties, I am of the view that Mr Remely's various applications ought to be dismissed.
Mr Remely complains that the enforcement of the order will be a significant hardship to him. Mr Remely has placed no evidence before me as to his asset position save that he admits to owning property (a building block). On several occasions the courts before whom Mr Remely has appeared have pointed out that he will not swear to his asset position. Holmes JA made the point in October 2007.[29] The Court of Appeal repeated the observation in its judgements of 4 April 2008 and 20 May 2008. Keane JA pointed to the "evidentiary deficit" relating to hardship when determining the stay application on 20 May 2008. Mr Remely's continued refusal to reveal his asset position leads strongly to the inference that it is not in his interests to do so.
Despite that inference, and assuming that enforcement of the court's order would prove a hardship for Mr Remely, then that needs to be balanced against the second respondents' position. They have succeeded against Mr Remely before Dutney J, Holmes JA, the Court of Appeal, Keane JA and Martin J. Costs orders have been made in their favour on all occasions and on the indemnity basis in the Court of Appeal, by Keane JA and by Martin J. The Court of Appeal was informed that the second respondents were out of pocket by more than $38,000[30], and that was prior to the applications before Keane JA, Martin J and these proceedings. On any view Mr Remely owes a significant sum to the second respondents pursuant to Justice Dutney's order.
It is difficult to have much sympathy for Mr Remely's position in being forced to meet the Order for costs. The second respondents have every reason to look to this court to protect their right to recover the costs to which they are entitled.
I note that the solicitors for the second respondent have provided an undertaking that they will not seek to enforce the warrant pending the delivery of my reasons in this matter.
(b) the enforcement of the warrant dated 15 May 2008 be stayed pending further order;
(c) the second respondents file and serve on the applicant any written submission in relation to the costs and charges claimed in Items 209 to 235 of the costs statement and disputed in Objection 122 of the Notice of Objection being part of Exhibit A to the affidavit of the applicant filed 30 June 2008, and of the costs of these proceedings, as they may be advised on or before 28 August 2008;
(d) the applicant file and serve on the second respondents any written submission in relation to the costs and charges claimed in Items 209 to 235 of the costs statement and disputed in Objection 122 being part of Exhibit A to the affidavit of the applicant filed 30 June 2008, and of the costs of these proceedings, as he may be advised on or before 4 September 2008;
(e) if no written submissions be received concerning the costs and charges claimed in Items 209 to 235 of the costs statement and disputed in Objection 122 being part of Exhibit A to the affidavit of the applicant filed 30 June 2008 then the order of 28 April 2008 be varied by deleting $13,224.86 and inserting in its place $11,838.31.
[64] Following the receipt of any submissions I will determine the remaining outstanding matters on the papers.
Remely
O'Shea & Ors
(2006) 225 CLR 364