Reynolds Jeanette v Whittens and Reynolds Stuart v Whittens

STATUTORY REGIME 16 The Legal Profession Act 1987 (the Act) sets up a regime for the assessment of costs both as between parties to an action in a court and as between clients and their legal representatives. It provides for the making of costs agreements (s 184) and permits costs agreements to be made under which the payment of a legal practitioner's costs is contingent on the successful outcome of the matter in which the legal services are provided (s 186). Whilst Division 3 of Part 11 of the Act permits a premium to be charged on costs otherwise payable where the payment of fees is contingent, it specifies that the premium is not to exceed 25% (s 187). 17 Under Division 2 of Part 11 of the Act, an obligation is cast on legal practitioners to disclose to their clients the basis of the costs they will charge for the legal services they will render (s 175). Legal practitioners are obliged to disclose to clients an estimate of the likely amount of the costs of the legal services to be provided (ss 176, 177) and any significant increase in those costs after the legal practitioners become aware of a likely increase in such costs (s 178). However, a failure to make a disclosure of the estimate of the likely amount of costs does not of itself amount to a breach of the Act, but is capable of amounting to unsatisfactory professional conduct or professional misconduct (s 183). 18 An obligation is imposed on legal practitioners to render a bill of costs before costs can be recovered (s 192). Such bill must be in a form prescribed by the regulations (s 193), signed by the relevant legal practitioner (s 194) and be delivered in one of the manners prescribed in Division 4 of Part 11 of the Act. 19 A client who has been served with a bill of costs may apply to the Supreme Court for an assessment of such costs (s 199), whereupon the Supreme Court is required to refer the application to a Costs Assessor to be dealt with in accordance with Division 6 of Part 11 of the Act. Costs Assessors are appointed by the Chief Justice (s 208S) and when assessing a bill are bound by the provisions of Subdivision 2 of Division 6 of Part 11 of the Act. Relevantly, the provisions by reference to which the assessment is made are in Subdivision 2 of Division 6. These include ss 208A, B, C and D, the provisions of which are as follows: 208A Assessment of bills generally (1) When considering an application relating to a bill of costs, the costs assessor must consider: (a) whether or not it was reasonable to carry out the work to which the costs relate, and (b) whether or not the work was carried out in a reasonable manner, and (c) the fairness and reasonableness of the amount of the costs in relation to that work. (2) A costs assessor is to determine the application by confirming the bill of costs or, if the assessor is satisfied that the disputed costs are unfair or unreasonable, by substituting for the amount of the costs an amount that, in his or her opinion, is a fair and reasonable amount. (3) Any amount substituted for the amount of the costs may include an allowance for any fee paid or payable for the application by the applicant. (4) If the barrister or solicitor is liable under section 182(3) to pay the costs of the costs assessment (including the costs of the costs assessor), the costs assessor is to determine the amount of those costs. The costs incurred by the client are to be deducted from the amount payable under the bill of costs and the costs of the costs assessor are to be paid to the proper officer of the Supreme Court. (5) A costs assessor may not determine that any part of a bill of costs that is not the subject of an application is unfair or unreasonable. 208B Additional matters to be considered by cost assessors in assessing bills of costs. In assessing what is fair and reasonable amount of costs, a costs assessor may have regard to any or all of the following matters: (a) whether the barrister or solicitor complied with any relevant regulation, barristers rule, solicitors rule of joint rule, (b) where the barrister or solicitor disclosed the basis of the costs or an estimate of the costs under Division 2 and any disclosures made, (c) any relevant advertisement as to the barrister's or solicitor's costs or skills, (d) any relevant costs agreement (subject to section 208C), (e) the skill, labour and responsibility displayed on the part of the barrister or solicitor responsible for the matter, (f) the instructions and whether the work done was within the scope of the instructions, (g) the complexity, novelty or difficulty of the matter, (h) the quality of the work done, (i) the place where and circumstances in which the legal services were provided, (j) the time within which the work was required to be done. 208C Costs agreements not subject to assessment (1) A costs assessor is to decline to assess a bill of costs if: (a) the disputed costs are subject to a costs agreement that complies with Division 3, and (b) the costs agreement specifies the amount of the costs or the dispute relates only to the rate specified in the agreement for calculating the costs. (2) If the dispute relates to any other matter, costs are to be assessed on the basis of that specified rate despite section 208A. The costs assessor is bound by a provision for the payment of a premium that is not determined to be unjust under section 208D. (3) This section does not apply to any provision of a costs agreement that the costs assessor determines to be unjust under section 208D. (4) This section does not apply to a costs agreement applicable to the costs of legal services if a barrister or solicitor failed to make a disclosure in accordance with Division 2 of the matters required to be disclosed by section 175 or 176 in relation to those costs. 208D Unjust costs agreements (1) A costs assessor may determine whether a term of a particular costs agreement entered into by a barrister or solicitor and a client is unjust in the circumstances relating to it at the time it was made. (2) For that purpose, the costs assessor is to have regard to the public interest and to all the circumstances of the case and may have regard to: (a) the consequences of compliance, or non-compliance, with all or any of the provisions of the agreement, and (b) the relative bargaining power of the parties, and (c) whether or not, at the time the agreement was made its provisions were the subject of negotiation, and (d) whether or not it was reasonably practicable for the applicant to negotiate for the alteration of, or to reject, any of the provisions of the agreement, and (e) whether or not any of the provisions of the agreement impose conditions that are unreasonably difficult to comply with, or not reasonably necessary for the protection of the legitimate interest of a party to the agreement, and (f) whether or not any party to the agreement was reasonably able to protect his or her interests because of his or her age or physical or mental condition, and (g) the relative economic circumstances, educational background and literacy of the parties to the agreement and of any person who represented any of the parties to the agreement, and (h) the form of the agreement and the intelligibility of the language in which it is expressed, and (i) the extent to which the provisions of the agreement and their legal and practical effect were accurately explained to the applicant and whether or not the applicant understood those provisions and their effect, and (j) whether the barrister or solicitor of any other person exerted or used unfair pressure, undue influence or unfair tactics on the applicant and, if so, the nature and extent of that unfair pressure, undue influence of unfair tactics. (3) For the purposes of this section, a person is taken to have represented a person if the person represented the other person, or assisted the other person to a significant degree, in the negotiations process up to, or at, the time the agreement was made. (4) In determining whether a provision of the agreement is unjust, the costs assessor is not to have regard to any injustice arising from circumstances that were not reasonably foreseeable when the agreement was made.

20 The Costs Assessor is required to give a certificate as to the determination made (s 208J) and reasons for such determination (s 208JAA). Such certificate is binding on all parties, subject only to the power to correct inadvertent errors (s 208JB) and to the appeal rights created under Subdivision 4B of Division 6 of Part 11 of the Act. (s 208L - 208NB). 21 Section 208L provides for an appeal to the Supreme Court "as to a matter of law arising in the proceedings". Section 208M confers on a dissatisfied party a right to "seek leave of the Court to appeal against the determination". This right is not limited to matters of law. 22 Part 51A Rule 2(6) of the Rules of the Supreme Court requires that a summons seeking leave to appeal must be filed within 14 days of the material date or within such extended time as may be allowed by the Court. The material date in the present matter was 29 August 1999. 23 It is incumbent upon an appellant, in this case the plaintiffs, to show why they should have an extension of time in which to apply for leave to appeal. It is well established by authority that an applicant for such extension should show why the summons was not filed within time and that there is some practical utility in granting an extension of time for the filing of an application for leave to appeal. 24 Whilst s 208L gives an appeal as a right as to a matter of law arising in proceedings, s 208M involves the exercise of a judgment which in turn involves a discretion. 25 It was common ground between the parties that in the exercise of its function under s.208M and the discretion that is involved, the criteria to be applied by the Court are:

(i) An obvious error on the face of the record; and

(ii) Substantial injustice to the plaintiff if the determination of the Costs Assessor is allowed to stand.

Both counsel pressed for the application of this test, which was propounded by Master Greenwood in Busuttil v Holder & Anor (1996) NSWSC 9 August 1996 (unreported), and has been applied in a number of cases since such test was propounded. I have applied it as it was submitted I should. However, if the formulation of the first criterion were "an error" rather than as agreed between the parties, the outcome would not be different. I have not been called upon in this case to make a determination in relation to that. 26 In pressing her and her husband's cases, Mrs Reynolds argued that s.208B of the Act was, in effect, mandatory and that the Costs Assessor was obliged to consider each of the matters specified in its ten sub-sections in relation to each item. Her argument was that the word "may" in that section had the same meaning as the word "must" in s.208A. She argued that each of the detailed provisions in s.208B(2)(a-j) had to be considered by the Costs Assessor and a determination made by him in respect of each heading qua each item in each bill. Furthermore, she argued that by virtue of s.208P(2) the Costs Assessor was obliged to disallow a number of costs, again on the basis that the word "may" when appearing in that sub-section also bore the meaning "must". 27 Various verbs are used in Sub-division 2 of Division 6 of Part 11 of the Act when dealing with the functions of a Costs Assessor. "May" is used in ss.199 (may apply), 200 (may apply), 201 (may apply), 207 (may require) and 208E (may determine). "Must" is used in ss.206(2) (must refer), 208 (must not) … and 208A (must consider). A compound verb is used in ss.206(1) (is to refer), 208C (is to decline) 208D(2) (is to have regard). This last mentioned section contrasts such compound verb with the verb "may" as applicable to a series of matters enumerated in the sub-section. 28 In Director of Public Prosecutions v Sinton [2000] NSWSC 473, I had occasion to consider the use of the compound verbs "is to produce", "is to order" and "is to deal" in ss.34A, 35 and 36 respectively of the Criminal Procedure Act 1986. For the reasons set out therein I concluded that such compound verbs were used in the sense of a command, an imperative stating a requirement or imposing an obligation or a restriction. In short they were used in the emphatic sense of "shall" or "must". Although the ultimate conclusion in that case was reversed on appeal (Director of Public Prosecutions v Sinton (2001) 51 NSWLR 659, the reasoning concerning the compound verbs used in the statute was not (supra at 671). In my opinion the compound verbs in Sub-division 2 of Division 6 of Part 11 of the Act referred to above are used in an emphatic, imperative sense similar to the compound verbs considered in Director of Public Prosecutions v Sinton (supra). 29 The word "may" can be used in statutes in a number of senses. It can be used as a word of empowerment or as connoting a discretion, but sometimes it is used in the mandatory sense of "shall" (Ward v Williams (1953) 19 LGR 190 (Full Court of NSW); (1954 - 1955) 92 CLR 496 at 504 - 506). The meaning and effect to be ascribed to the word "may" in the particular statute will depend upon the context in which it occurs and the purpose of the provision in which it occurs. 30 Section 9 of the Interpretation Act 1987 provides that: "In any Act or instrument the word "may", if used to confer a power indicates that the power may be exercised or not, at discretion" 31 This section enacts what had previously been both the common law and the effect of the equivalent statutory provision in the legislation antecedent to the Interpretation Act 1987, namely s.23 of the Interpretation Act 1897. In addition s.9 is to be read and understood in the light of s.5(2) which provides that the provisions of the Interpretation Act 1987 apply "except insofar as the contrary intention appears" in the act being interpreted. 32 In Julius v Lord Bishop of Oxford (1880) 5 App. Cas. 214, Lord Selborne said: "The question whether a Judge, or a public officer, to whom a power is given by such word is bound to use it upon any particular occasion, or in any particular manner must be solved aliunde, and, in general, it is to be solved from the context, from the particular provisions, or from the general scope and objects of the enactment conferring the power" (at 235) 33 In Smith v Watson (1906) 4 CLR 802 Griffith CJ said: "Whenever the word "may" is used to confer a power, it must be read as if it were 'may at his or their discretion' but it cannot be disputed that the particular Act may, from its general scope, show that the duty must be exercised, and that there is not an arbitrary discretion. In that respect the Interpretation Act 1897 does not alter the general rule of construction, which was much discussed in the case of Julius v Lord Bishop of Oxford " (supra at 811) 34 Judicial opinion may differ on the application of the above rule, as is apparent from the disagreement between Hardie J in Re Jackson and the Conveyancing Act (1951) 52 SR (NSW) 42 on the one hand and McLelland J in Re Fettell (1951) 52 SR (NSW) 221 in relation to the meaning of the word "may" as used in s.66G of the Conveyancing Act 1919. 35 When regard is had to s.9 of the Interpretation Act, the structure of Sub-division 2 of Division 6 of Part 11, the contrast between the legislative use of the word "must" in some sections and the word "may" in others, the use of both a compound verb and "may" in the introductory portion of s.208D(2), I am of opinion that the word "may" when used in s.208B is not used in the sense of "must". In s.208B "may" means "may". 36 For the foregoing reasons I reject the argument advanced on behalf of the plaintiff based upon the construction referred to in paragraph 26 above. THE PLAINTIFFS' CASE 37 When the matter was initially listed for hearing on 18 October, 2000 Mrs Reynolds appeared in person. She sought leave to appear on behalf of her husband also. This leave was granted. As the matter proceeded Mrs Reynolds made a number of serious allegations against the defendant. In broad terms she claimed that the material produced to the Court was not the same as the material that had been forwarded to the Costs Assessor, that material that was detrimental to her and her husband and/or advantageous to the defendant had been added to the files produced to the Court. Because her allegations were made in quite general terms, she was requested to go through the material and to designate those items or matters which she said had been added to the file and had not been before the Costs Assessor at the time he made the assessments in the matters. 38 The files which were produced to the Court and were said to have been before the Costs Assessor were voluminous. They consisted of four large boxes. They were in a state of disarray. They had obviously been gone through a number of times. During the course of an adjournment they were sorted into order. Mrs Reynolds went through all the files and marked 23 documents which she claimed had been wrongly included after the files had been to the Costs Assessor. She maintained that this had been done by the defendant to worsen the position of the plaintiffs and improve his own position. There is no evidence that this was the situation. Furthermore, the evidence of Mr Whitten, is to the contrary. I accept that evidence. 39 After some days of hearing the matter was adjourned because of the exigencies of the Court's lists. When the hearing resumed on 10 September, 2001 the plaintiffs were represented by counsel who cut through the morass of argumentative, essentially factual matters which Mrs Reynolds had sought to argue and relied upon four essential bases of claim as constituting matters of law under s.208L or as being matters which, if not amounting to questions of law, were sufficient reason for leave to appeal being given under s.208M as follows:

1. The first basis was that the Costs Assessor had made a finding that the defendant had not complied with s 177 of the Act. However the Costs Assessor had not done anything with or as a result of such finding. The implication of the submission was that as a matter of law at least the premium and perhaps some other items should not have been allowed in the bill.

2. The second basis was concerned solely with the contingency premium. The argument was that in all the circumstances of the various matters raised in the case "no reasonable Costs Assessor would have allowed the 25% premium" charged by the defendant or any premium. This raised a question of law in the same way as the third basis relied upon.

3. The third basis was that the decision arrived at by the Costs Assessor was such as could not reasonably have been arrived at having regard to the material before the Costs Assessor, and that as a consequence the Wednesbury Principle ( Associated Provincial Picture House Ltd v Wednesbury Corporation (1948) 1 KB 223 at 228, 229) applied. This meant that there was a question of law involved in the determination which gave rise to an appeal as of right pursuant to s 208L. In support of this basis it was argued that in the circumstance that objections were submitted to the Costs Assessor and that the defendant did not make a detailed reply to each of the objections, the Costs Assessor "was bound in effect to … find that in relation to the out of pocket expenses, the economic loss expenses and final review preparation expenses, that …no conclusion other than that the plaintiffs should not be paying for such items is possible."

4. The fourth basis was that there was negligence on the part of the defendant which brought into play s 208P of the Act and as a consequence those items of work performed by other than Mr Whitten himself, should, as a matter of law, have been disallowed.

BASIS 1 40 The argument in support of Basis 1 was that once the Costs Assessor found that there had been a breach of s 177, it was incumbent upon him to make a finding that the costs agreements were unjust (s 208D) and that as a consequence the provisions of s 208C (2) did not operate to preserve the premium payable under the costs agreements and that such finding had the further effect that the Costs Assessor was bound to disallow other costs pursuant to s 208P. 41 In my opinion this argument is not correct. Whilst s 177 imposes obligations on a barrister and a solicitor to disclose to a client an estimate of the likely amount of costs (s 177(1)) and any significant increase in that estimate (s 177(3)) and to do so as soon as practicable after becoming aware of the likely increase (s 178(4)), a failure to make such a disclosure does not of itself amount to a breach of the Act (s 183(1)), notwithstanding that it is capable of being either unsatisfactory professional conduct or professional misconduct (s 183(2)). It is relevant to note in this context that whilst a particular failure to comply with s 177 may be capable of being either unsatisfactory professional conduct or professional misconduct, the fact that there was such a failure does not of itself constitute either unsatisfactory professional conduct or professional misconduct. The form of the section clearly contemplates that whether the particular failure does or does not have either of the results that this section allows for, will depend upon the circumstances of the particular case. This means that a finding that there has been a failure to comply with s 177 does not necessarily give rise to any consequences under s 183(2). 42 Furthermore unsatisfactory professional conduct or professional misconduct will not necessarily mean that costs have been incurred improperly or without reasonable cause or have been wasted by undue delays or by any other misconduct or default, as is required in order to enliven the powers conferred on a Costs Assessor by s 208P. 43 The Costs Assessor made no finding that the costs agreements between the plaintiffs and the defendant were unjust. That he did not make any such finding is significant particularly in relation to any possible consequences under s 183 or s 208P of the Act. Having made the finding that there had been a failure to comply with s 177, he was not required to go any further, absent a finding that the costs agreements were unjust or a finding that the circumstances prescribed in s 208P(1) had been established. He made no such findings. 44 The fact that he did not make a finding that the costs agreements were unjust meant that he was bound by the provision for the payment of the premium set out in the agreements. This is the effect of s 208C(2). Moreover the absence of notice to the barristers concerned in the cases or to the defendant, as required by s 208P(3), makes it clear that the Costs Assessor did not form the view required to enliven the powers set out in s 208P(2). Had he done so, notice would surely have been given pursuant to s 208P(3). Furthermore the basis does not support a grant of leave to appeal under s 208M of the Act. 45 The submission that the finding of the Costs Assessor under s 177 resulted in an error of law when he allowed the 25% premium or any premium or other costs is rejected.

BASIS 2 46 It was argued that the circumstances of the cases were such that no reasonable assessor would have allowed 25% as the premium; indeed in the circumstances the allowance of any premium, was manifestly unjust and constituted an error of law within the meaning of s 208L or alternatively provided a basis for giving leave to appeal under s 208M. 47 Each action was one in which there was a major dispute about the nature and extent of the injuries sustained by the plaintiffs. Those issues had been resolved in the arbitrations adversely to the plaintiffs, indeed in a manner which was considered by them to be dismissive of their claims. The actions were thereafter undertaken by the defendant on a contingency basis. The terms of the costs agreements provided for a contingency premium of 25%, being a percentage expressly permitted by the Act (s 187(3)). The Costs Assessor did not find that the costs agreements were unjust. Absent such findings, the findings made by the Costs Assessor did not permit of the percentage of the premium to be reviewed (s 208C(2)). I do not agree that in these circumstances there was anything unreasonable in the Costs Assessor allowing such premium and certainly the allowance of such premium was not such as to give rise to the application of the Wednesbury principle; nor does it constitute a basis on which to grant leave to appeal under s 208M. This submission fails.

BASIS 3 48 The third basis advanced on behalf of the plaintiff was that the amount allowed in the assessments was so unreasonable as to indicate an error of law on the part of the Costs Assessor. In this regard, counsel for the plaintiffs submitted that when compared with the original estimate of $10,000 - $15,000 for each case, the figures allowed by the Costs Assessor bespoke an error of law in that the disparity fell within the principle referred to in House v The King (1936) 55 CLR 499, namely: "It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. (supra at 505 per Dixon, Evatt and McTiernan JJ.) 49 The application of this principle, so it was argued on behalf of the plaintiffs, "is really a matter of inference" and the fact that "the actual cost vastly exceeds the estimate … enlarges the public interest" as specified in s.208D(2) with the effect that the disparity itself bespeaks the conclusion that the costs agreements were unjust. 50 The exercise that was called up for performance by the Costs Assessor involved a consideration of the matters dealt with in Part 11 of the Act, particularly Division 6 of such Part. As already indicated some of the matters referred to in Subdivision 2 of Division 6 must be considered by the Costs Assessor; other matters may be had regard to. There is nothing on the face of the assessments nor acceptable evidence or otherwise to indicate that the Costs Assessor failed to consider a matter which he was required by the Act to consider, or that he did not have regard to matters which were appropriate to have regard to for the purposes of his assessments. Furthermore, the size of the initial estimates made by the defendant and disclosed to the plaintiffs suggests that they were likely to have been based on a run-of-the-mill case. Whilst the plaintiffs' cases were run-of-the-mill in the sense that they were District Court actions for damages for personal injury, and run-of-the-mill in the sense that the ultimate issues were related to the quantum of damages, they were not run-of-the-mill in other senses. For example, the feeling of grievance by the plaintiffs in relation to the outcomes in the arbitrations made them, or at least made Mrs Reynolds, very sensitive to the need to dot every "i", cross every "t" and otherwise ensure that nothing was left undone that would help to bring about success in the hearings before the Court. As a result the demands of the clients which were reflected in the number of consultations, the amount of correspondence and the attention that was called for by them meant that a great deal of additional work, not contemplated at the time of the giving of the initial estimates, had to be undertaken. A perusal of each of the bills demonstrates this in graphic detail. 51 The nature of the client demands in the cases is illustrated by the notes of a conference in which, having been informed of the difficulties involved in the cases, Mrs Reynolds said she wanted Mr von Muenster and counsel to tell her how her case was to be fought, not bad news about whether or not the cases would reach the required threshold of damages so as to avoid adverse cost consequences. She also wanted them to hear her views in relation to the case. 52 Another way in which the cases were not run-of-the-mill related to the credibility of both plaintiffs. For example, in a conference held between the plaintiffs, Mr von Muenster and counsel, the plaintiffs were warned that the credit of Mr Reynolds was at issue and "at a serious low" for a number of reasons. These included the receipt by Mr Reynolds from 1985 until the date of his accident in 1989 of large amounts of unemployment benefits. Indeed, during such time he had worked for only a few months. Furthermore, the legal advisers pointed out that the fact that Mr Reynolds was largely unemployed prior to the date of the accident would not assist him in his claim that "he would have run a successful business or in fact would have been employed" but for the accident. In addition, the psychological assessment prepared in support of Mr Reynolds' claim was said to be at risk because medical notes procured from a psychiatric hospital by the defendant in the action suggested that from 1982 onwards Mr Reynolds was suffering from the same complaints before the accident as he claimed had been caused by the accident. Further difficulties as to his credit arose out of a workers' compensation claim made by him whilst he was working at Otis Elevators in 1986. He apparently suffered an injury to his back in that employment, yet was claiming in respect of the back injury in the District Court. He had recorded on the claim form submitted to Otis Elevators: "right lower back out". He was quite unable to explain why he had done so although this was of considerable relevance in the light of the history given to doctors in connection with the action. 53 Difficulties with Mrs Reynolds' claim as to the injuries sustained by her were also raised and discussed in conference. The lack of congruence between the early medical material concerning Mrs Reynolds' injuries and the later theories developed by one of the doctors to support her claim was pointed out. This was especially important in the light of the orthopaedic opinion in the defendant's case that Mrs Reynolds was in fact suffering from no long term injury. 54 From the foregoing it can be seen that, far from the cases being run-of-the-mill in relation to damages, both had problems, both involved real questions as to the credibility of each of the plaintiffs. As a consequence of this and in the light of the outcomes at arbitration, it was necessary to take particular care in the preparation of the cases and to try to ensure that the evidence available for each was adequate to overcome the problems involved in each case. 55 The argument based on a mere comparison of the initial estimates of costs with the ultimate outcomes of the assessments made by the Costs Assessor is flawed. It does not compare like with like. Nor does it give rise to a situation of the kind contemplated in House v The King (supra). 56 It was further argued on behalf of the plaintiffs under this heading that the Costs Assessor erred, as a matter of law, in allowing any amount for work done in connection with the out-of-pocket expenses. The Costs Assessor, so the argument proceeded, "could not have reasonably concluded other than (that) there should have been no allowance for out-of-pocket expenses work at all". This argument involved a total for both bills of approximately $3,000. In respect of this amount it was submitted that: "What is said by the plaintiffs in relation to that is in the circumstances where they prepared the out-of-pocket schedule themselves and then the solicitor for whatever reason chose to repeat the exercise. That is unnecessary work in the sense used in s.208P and that circumstance should have been disallowed in full." 57 The very submission accepts that the relevant work was carried out in the office of the defendant. Furthermore, an examination of the bills shows that the Costs Assessor considered the items in question and made adjustments in favour of the plaintiffs in a number of them. His allowance of amounts in respect of work done in connection with out-of-pocket expenses is inconsistent with the stance taken on behalf of the plaintiffs that the costs in that regard were improperly incurred or incurred without reasonable cause or were wasted by misconduct or default (s.208P). He did not make a finding that the work fell into one of the categories referred to in s 208P. Instead he allowed amounts under this heading. To do so does not, in my opinion, bespeak an error of law even of the residual category referred to in House v The King (supra). This further argument is without substance. 58 In my opinion the third basis advanced on behalf of the plaintiffs does not reveal a matter of law arising in the assessments as required by s.208L nor does it reveal a basis which provides grounds for the Court to grant leave to appeal pursuant to s.208M of the Act.

BASIS 4 59 The fourth basis on which it was argued that the assessment should be reviewed for error of law was an allegation of negligence on the part of the defendant. This was said to arise out of "specific instructions as to who was to deal with what matter". This argument harkened back to matters advanced by Mrs Reynolds when she was arguing the matter herself. It was based on a claim that Mr Whitten himself should have dealt with all aspects of the matter personally and to the extent that he did not do so this constituted negligence on his part as a consequence of which all items which had not been personally dealt with by him should have been disallowed. In particular it had been argued that costs incurred in respect of those items in the Bills of Costs that had been dealt with by one of the solicitors employed in the defendant's office, Mr von Muenster, should not have been allowed. A number of items fell into this category since various employed solicitors, being Messrs Winship, C D Higginbotham and S von Muenster, were shown in the files as having carried out work in respect of each case. 60 The Costs Agreements themselves provided for a charge out rate for Mr Whitten, with lower charge out rates for Messrs Winship and Higginbotham. Charges in respect of work undertaken by Mr Winship were claimed and allowed at a rate lower than that applicable to work undertaken by Mr Whitten. Charges for work done by Mr von Muenster were claimed and allowed at a lower rate again, since he had been admitted to practice at a date later than either Mr Winship or Mr Higginbotham. 61 The Costs Agreements also provided that Mr Winship would be responsible for the work under the supervision of Mr Whitten, but they did not preclude the engagement of another solicitor from within the defendant's firm or for the provision of specialist advice and/or services. 62 All of the solicitors who were involved in the preparation of the cases for presentation in Court were legally qualified. Each had experience in practice. Each worked under the supervision of Mr Whitten. In these circumstances I am unable to agree that it was negligent on the part of the defendant to have various items of work undertaken by such solicitors, including Mr von Muenster. Mrs Reynolds was critical of Mr von Muenster. However, her criticisms appear to be related more to matters of personality than to matters of competence, although his alleged lack of competence was adverted to by Mrs Reynolds. However, no event or circumstance that would constitute negligence was isolated on behalf of the plaintiffs. Furthermore, the outcomes in the two cases were, as I have indicated above, substantially better as a consequence of the work undertaken by the defendant and those in the employ of the defendant than the outcomes achieved in the arbitrations which preceded the take-over of the actions by the defendant. 63 In the bills as assessed the amounts allowed for work undertaken by solicitors other than Mr Whitten resulted in the bills being less than would have been the case had Mr Whitten undertaken all the work personally. The plaintiffs thus had two advantages that accrued from the conduct of the action under the control of the defendant: first, a substantially better monetary return in each case; second, a bill that was lower by virtue of the use of employed solicitors. 64 In my opinion, this fourth basis on which it is asserted that there was a question of law involved in the assessments of costs fails. Furthermore, the matters raised do not constitute grounds on which the court would grant leave to appeal under s 208M of the Act.

SUMMARY 65 For the foregoing reason, I am of opinion that none of the four basis argued on behalf of the plaintiffs raises a matter of law which confers on the plaintiffs a right of appeal under s.208L of the Act. Moreover, none of them constitutes a reason for the giving of leave under s 208M.

FURTHER ARGUMENT REGARDING LEAVE UNDER S.208M 66 It was further submitted that leave to appeal under s.208M of the Act should be given because of mathematical errors in the bills which were obvious on the face of the bills and resulted in substantial injustice to the plaintiffs. 67 In support of this submission, counsel for the plaintiffs selected a number of items from the bills. The first of these related to the bill assessed in respect of Mrs Reynolds' action. It did, on its face, involve an error in addition, which arose in the following way: on page 35 of the bill marked by the Costs Assessor there is no subtotal of the various amounts set out on that page of the bill as prepared by the defendant. This is in marked contrast to the other pages of such bill. As a consequence the assessor calculated his own subtotal for page 35, namely $1768.50. He then made deductions from a number of the items included on page 35. These deductions totalled $1175.00. The subtraction of this amount in respect of deductions resulted in a figure of $593.00 as the sub-total for the page. This amount was then included as part of the total bill. A subtotal of $2116.50 had been included on page 36 of the bill as prepared by the defendant. The Costs Assessor made a number of deductions in respect of the items included on page 36. These totalled $110.50. The subtraction of this amount from the subtotal at the foot of page 36 left a balance of $2006.00. This was included in the bill. However, the subtotal of $2116.50 that had been included on page 36 of the bill as prepared by the defendant was in fact the subtotal for pages 35 and 36, not just page 36. As a consequence, the amount to be allowed in respect of pages 35 and 36 of the bill should have been $941.00, not $2599.00, as allowed by the Costs Assessor. This meant that there had been an over-allowance of $1658.00 in the bill which, together with the 25% premium amounting to $414.50, gave a total of $2072.50 as the total overcharge. This, it was argued, was an obvious error and such an amount was substantial to Mrs Reynolds. The argument then proceeded that there would be substantial injustice to her by allowing such an error to stand. 68 As the argument proceeded, counsel for the plaintiffs produced a schedule of nine additional errors which were said to be in Mrs Reynolds' bill. Some of these were in favour of the plaintiff; some in favour of the defendant. Even with the addition of the 25% contingency premium, the net result of these additional errors amounted to $65.94 in favour of the defendant. 69 In Mr Reynolds' bill there was no item of the size that was involved in pages 35 and 36 of Mrs Reynolds' bill of costs. In the 56 pages of profit costs included in Mr Reynolds' bill, ten errors of addition were isolated. Some of these were in favour of Mr Reynolds; some in favour of the defendant. Even with the 25% contingency premium the amount involved was only $233.75 in favour of the defendant. 70 On no view could the items in Mr Reynolds' bill be said to involve any substantial injustice. Furthermore, the additional items in Mrs Reynolds' bill referred to in paragraph 68 above are so trifling in the order of things as not to warrant further time being taken on them. They are minor errors of fact which did not vitiate the result, nor give rise to any substantial injustice. 71 However, it is necessary to examine whether or not the amount of $2072.50 referred to in paragraph 67 involves any substantial injustice to Mrs Reynolds. I do not think that it does. I have reached this conclusion for two reasons: because the amount is only a small percentage of the total costs, and because s 208JB empowers a Costs Assessor "at any time after making a determination" to correct an inadvertent error in a prior determination. The power to correct an inadvertent error is akin to the power conferred on courts by the slip rule. That power may be exercised in circumstances in which the error is obvious and is such as would, had it been drawn to the attention of the assessor at the time, undoubtedly have been corrected by him at that time. 72 The power conferred by s 208JB is not extinguished by the effluxion of time, or even by the fact that the court may have affirmed the relevant assessment by dismissing an appeal under s 208L or may have refused leave to appeal under s 208M. The power may be exercised either on the application of a party to the assessment or by the assessor on his or her own motion. 73 It is thus open to Mrs Reynolds to make application to the Costs Assessor for the correction of the inadvertent error on pages 35 and 36 of her bill of costs and even to include the additional amount of $65.94 (including contingency premium). A like application could be made by Mr Reynolds in relation to the amount of $233.75 which he claims has been over-allowed as a result of certain minor errors in additions in his bill. 74 The presence of s 208JB in the Act means that there is no prejudice to either plaintiff in respect of the mathematical errors, which in any event are errors of fact. They do not give rise to a right of appeal under s 208L, nor in my opinion, would they be an appropriate basis in the circumstances for the granting of leave to appeal under s 208M. 75 This argument on behalf of the plaintiffs is rejected.

LaTE Events 76 Argument in the matter concluded on 12 September 2001. The matter was then adjourned for judgment until 26 November 2001. Subsequently further material was received from the plaintiffs. It was addressed directly to me by Mrs Reynolds. The letter, under cover of which the material was forwarded, was dated 25 September 2001. 77 A quick perusal of the material accompanying the letter revealed that it had been sent in support of an application to re-open so as to argue the matter further. As a consequence, the judgment which was then close to completion was held in abeyance pending argument as to whether or not the additional material should be received and leave given to the plaintiffs to re-open both cases. 78 The matter was listed on 26 November 2001. Mrs Reynolds once again sought leave to appear on behalf of both herself and her husband. The Court was informed that counsel had been advised that he was no longer required and that a notice terminating the retainer of Mr and Mrs Reynolds' then solicitor had been sent to the Registry. No notice to this effect was in the Court file on that date. However, some time later it was found in the Registry. 79 Mrs Reynolds advised the Court that, in addition to the material forwarded by post, she wished to tender a further affidavit for the Court to consider. It then became clear that the application involved more than receiving additional submissions. Leave was being sought to re-open the cases generally. The material which had been forwarded by Mrs Reynolds and the further affidavit were admitted for the purposes of the application to re-open. 80 Counsel for the defendant advised that he had not had an opportunity to consider the material which had been forwarded by Mrs Reynolds under cover of her letter bearing date 25 September 2001. He sought an opportunity to do so. This was granted and the matter was adjourned with directions being given in relation to the service by Mrs Reynolds of the additional material to which she had adverted in Court. 81 In Urban Transport Authority v Nweiser (1991) 28 NSWLR 471, Clarke JA, with whom Mahoney and Meagher JJA concurred, considered a matter in which a trial judge refused to allow a defendant employer to re-open its case after it had been formally closed, the plaintiff having elected to adduce no evidence in reply and counsel for the defendant having commenced his final address. In the course of such address, the defendant applied for leave to re-open the case to call another witness who had been in the precincts of the Court at all material times, but whom the defendant's counsel had determined not to call. The application was opposed and was refused by the trial judge. On appeal Clarke JA said: "The first observation I would make is that the respondent (plaintiff) would not have been prejudiced in any way by the grant of the application … further, it is difficult to conceive that the grant of the application would have subjected the respondent (plaintiff) to additional costs." (at 475)

and "The principle which should guide the Court in determining whether to grant an application for leave to re-open is whether the interests of justice are better served by allowing or rejecting the application as the case may be. No doubt it is relevant to take account of a number of matters such as likely prejudice to the party resisting the application and the reasons why the evidence was not led in the first place, but there is not, in my opinion, any hard and fast rule which requires the Court to reject an application where the decision not to call the witness in the party's case was a deliberate one. Of course, that does not mean that that is not a very relevant consideration. It is where, for instance, a decision was based on tactical grounds, it may be difficult to resist the conclusion that the interests of justice were better served by the rejection of the application." (at 478). 82 In reviewing the circumstances which may be relevant to the exercise of the discretion conferred on the Court to allow or refuse leave to re-open, the deliberateness of the decision (in contrast to inadvertence in the heat of the moment), the need for finality in litigation and a limit upon the number of issues which it is open to the parties to contest at a hearing were adverted to (supra at 476). 83 In formulating the statements of principle referred to in paragraphs 81 and 82 above, regard was had to the views expressed by Sheppard J in Joyce v GIO (NSW) (Ritchie's Supreme Court Procedure, New South Wales, vol 2 [13028]) and by Jeffrey J in Henning v Lynch (1974) 2 NSWLR 254. When considering the former case, Clarke JA contrasted the situations in which the application to re-open was made before the hearing was concluded with the situation in which the application was made after judgment. The present case falls between these parameters. 84 The statement of principle by Jeffrey J (referred to below) was approved by Clarke JA (supra at 479) and had earlier been approved in Brown v Petranker (1991) 22 NSWLR 717. The evidence sought to be adduced in the case before Jeffrey J related to the machine on which a contested breath analysis had been taken. During the course of the hearing, an issue to which attention had been given was whether the analysis had been taken at 11.47am or 11.47pm. This was because the constable who was the principal witness had omitted to delete the letters "am", as a result of the volume of work on hand at the material time. However, after the prosecution case had closed the learned magistrate raised the question as to whether or not the breath test had been conducted on an approved device. The trade name of the device was already in evidence and so the prosecutor sought to adduce evidence that the device of such trade name was approved as required by the legislation. The magistrate refused leave to the prosecution to reopen to prove this fact. He then dismissed the prosecution. In the course of his decision, Jeffrey J stated that: "Where the defendant's case has not been gone into, and there is ready to be tendered some additional evidence which by accident, mistake or want of foresight has not been tendered before the prosecution case is closed it is - to use the words of Cave J in Hargreaves v Hilliam (1894) 58 JP 655 'a very fit and proper thing to allow the evidence to be given unless there is some very good reason.'" 85 It should be noted that the case before Jeffrey J was a criminal case and that the application for leave to re-open was made after the close of the case for the prosecution and before the commencement of the case for the defence. 86 In the present case the defendant relied on a number of cases that dealt with re-opening applications for special leave to appeal to the High Court. The decisions of Kirby J in Re Sinanovic's Application [2001] HCA 40, unreported 11 July 2001, and of McHugh and Hayne JJ in Magenta Nominees Pty Ltd v Webb (2000) 18 Leg Rep LS 2 were two of such cases. In the former case Kirby J, in refusing to re-open the matter, stressed that re-opening special leave matters was exceptional and that unexplained delay or other fault would be a discretionary reason for refusing to entertain the application. Furthermore he highlighted that "the law puts a high store on finality of legal proceedings … because such proceedings are inconvenient and expensive to the parties affected, costly in terms of public resources and also vexing to all parties concerned." (supra at paras 2 and 3). In the latter case McHugh J indicated that although he had previously taken the view, unlike Deane J, that it was appropriate to refuse some cases "simply because of the burden of work," he had come to the conclusion that he "may have to" accept such view. This suggests that the court lists and pressure of work on the Court may be matters material in the exercise of the Court's discretion. 87 Although the context in which the principles referred to in paragraph 86 were stated is different from the present case, absence of explanation for the failure to deal with the matters at the usual and proper time, the value of finality, expense involved and the needs of other litigants emerge as material considerations. Notwithstanding the different context, I am of opinion that they are also considerations material to the application of the test propounded by Clarke JA in Urban Transport Authority v Nweiser (supra). 88 The decision that is closest on the facts to the present case is that of the Court of Appeal (Priestley and Meagher JJA) in Planet Build (NSW) Pty Ltd v Lassgol Pty Ltd [2001] NSW CA 40, unreported 19 February 2001. In that case, the primary judge had heard argument and further argument and then reserved his decision. Between the date on which the decision had been reserved and the date of judgment, the plaintiff (builder) notified the Court that it would seek to re-open the case and place further evidence before the Court. The defendant (proprietor) opposed the re-opening. The trial judge read the affidavits which the plaintiff wished to use, but did so only for the purposes of the application to re-open. Having done so he recognised that the material in the affidavits was relevant to two matters which were significant to his assessment of the balance of convenience in relation to the grant or refusal of an interlocutory injunction. The Court of Appeal pointed out that: 1. The decision on an application to re-open involves the exercise of a discretion;

2. There is no principle of procedural fairness which requires a court to permit the re-opening of a case. The decision will depend on the circumstances of the particular case;

3. The exercise of the discretion is not simply a matter of granting fairness and the right to be heard to one party alone; 4. The length of time by which the proceedings would be prolonged is a material matter. 89 In applying the test adopted by the Court of Appeal in Urban Transport Authority v Nweiser (supra) to the present case, regard must be had to the following:

(a) The cases involve a relatively small sum of money;

(b) Excluding the application to re-open, the cases have already occupied 12 days of the Court's time;

(c) The re-opening of the cases is likely to give rise to a further hearing which, based on past events, is not likely to be short;

(d) The material which I admitted for the purposes of the application to re-open raises nothing new. It is lengthy, at times repetitive and ranges from the most general claims and submissions to the very particular in relation to matters of fact determined by the Costs Assessor. It is argumentative. On its face it is, in effect, an endeavour to return to a situation of putting in issue each and every item in the bills, an approach consciously abandoned by experienced counsel, who argued the matter on behalf of the plaintiffs. The additional material includes an affidavit by Mrs Reynolds sworn on 24 November 2001. It consists of 131 paragraphs. In it, she: · seeks to raise, inter alia "Whittens entire solicitor/client costs" and matters relevant to the "issue of credibility"; · revisits the evidence given by her over a number of days, endeavouring to explain further, or explain away, answers given by her, especially in cross examination; · refers to, and seeks to support her argument by reference to "without prejudice" negotiations; · complains about counsel for the defendant, eg: "The defendant's side accessed the file documents and lifted many piles of files documents onto their bar table. I approached the table whereby Mr Galvin loudly said I was to return to my seat. The defendant's side moved the piles around pulled documents out of the bundles and sifted through many piles of files on their table. …The defendants bar table was covered with a large amount of their own documentation before they placed the file documents on top of it. I believe I would be correct in saying that the mix-up of documentation occurred at that time." This and other like material has been advanced as part of an argument in support of Mrs Reynolds' credibility, the absence of credibility in the defendant's camp and in purported explanation of contrary evidence that she had given under cross examination; · further attacks the credibility of the defendant by reference to an interlocutory application disposed of by a Registrar in October 2000; · again asserts her claims about the solicitor's files, which had been examined by the Costs Assessor and produced to the Court. These are described as "unreliable"; · complains, as she had done throughout the case, of the defendant not having made "specific responses" to the argumentative matter (said by her to be factual) raised in the plaintiff's submissions to the Costs Assessor; · seeks to further argue the law by reference to a particular case which is quite different from the present case, refers to the authorities to which I have referred above and does not purport to state any new principle; · includes, and seeks to rely on, matters raised in July, 2001 and repeated in August and October 2001, by yet another solicitor employed by the plaintiffs. These times are well after the costs had been incurred, the bills assessed and the relevant certificates issued; · resiles from a concession made on her behalf and on behalf of her husband. Examples of the generality to which I have referred include the following: "I continue to rely on my documentation in evidence, including the details and the line by line objection contained in the 'schedule of items still in dispute' in evidence and my 'Objections' to solicitor/client costs in relation to the costs assessor's 'reasons'." (paragraph 104);

and "There are many line items remaining in dispute for most pertinent reasons amounting to both small and large amounts. Overall they add up to a most considerable amount. … There is no concession from my side that my case is dependent exclusively on those most relevant issues put forward by the barrister." (paragraph 105) (e) The present attempt by the plaintiffs follows upon the termination of the services of both counsel and solicitor who made a deliberate and proper decision to give some legal form and coherence to the cases by formulating focused arguments based on the grounds of appeal. The attempt to re-open involves an abandonment of such form and coherence;

(f) The defendant has already been put to very considerable expense, at the behest of a litigant in person, who has taken far more of the Court's time than was appropriate to the nature of the case or to the amounts involved. The fact that the plaintiffs have constantly asserted, through Mrs Reynolds, that they are, in effect, indigent people suggests that the defendant may not recover any costs that may be awarded in his favour. To further prolong a case in such circumstances would be likely, in my opinion, to result in an injustice to the defendant;

(g) There is no acceptable explanation as to why the bulk of the material now sought to be relied on was not argued at an earlier date, or why material which came into existence some two years after the assessments were made should now be allowed to be introduced into the case. 90 The plaintiffs have had their day in court, indeed they have now had 13 such days. The analysis of the issues by counsel for the plaintiffs in my opinion adequately raised such matters as could properly be raised in favour of the plaintiffs' cases. 91 Applying the principles to which I have referred to the circumstances as summarised above, I am of opinion that the interests of justice would not be served by allowing the plaintiffs to re-open their cases. Indeed, they would be better served by rejecting such application. 92 The application by the plaintiffs to re-open their cases is refused. 93 For the reasons set out above, I am of opinion that the summonses in each case should be dismissed with costs.

Orders 94 In each case, the summons is dismissed with costs.

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