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[2014] NSWDC 143
District Court of NSW
2014-08-01
Original judgment source is linked above.
Judgment 1The plaintiff / costs applicant by summons filed on 5 December 2013 brings an appeal from the decision of Costs Assessor M G Filewood of 25 September 2013 pursuant to s 384(1) Legal Profession Act 2004 (NSW) ("the Act"). 2The grounds identified in the summons are set out in a narrative form in six paragraphs. In the course of the plaintiff's opening, I endeavoured to identify what those grounds were. I am satisfied that the plaintiff's grounds of appeal are as set out in the defendant / costs respondent's outline of submissions at paragraph 29, namely: (a)That the document entitled "Respondent's objections (part 1)" was not considered by the Assessor; and (b)That, because of the unexpected finalisation of the assessment, the plaintiff was precluded from submitting further objections. 3The costs in question arise from proceedings commenced by the plaintiff against the State of New South Wales by statement of claim filed on 2 December 2009 arising out of events in which he was arrested. The plaintiff's mother also brought proceedings of a similar kind, but the defendant did not pursue an application for costs or for assessment of costs in her proceedings. Finnane QC DCJ handed down judgment on 24 May 2011 and the following orders were made in both claims: (1)Verdict for the defendant in each action. (2)The plaintiff in each case to pay the costs of the defendant on an ordinary basis up to 16 March 2011 and on an indemnity basis after 16 March 2011. 4No appeal was brought from the decision of Finnane QC DCJ, although the plaintiff told me, from the bar table, he could still bring an application for review, and that he intended to do so. 5As the appeal grounds raise issues of procedural fairness, I shall set out the relevant correspondence exchanged between the parties and the Costs Assessor during the costs assessment process.
The assessment process 6An application for costs assessment was filed by the defendant on 5 February 2013 (Annexure ZB1 to the affidavit of Zarina Dara Braybrooke affirmed 14 May 2014, Exhibit 1). On 24 April 2013, Maxwell Connery, Costs Assessor, wrote to both parties advising that he was calling for objections from the plaintiff within 21 days and stating that: "unless I call for further material I will then proceed with my determination and not receive any further written submissions from either party". 7On 14 May 2013 the Crown Solicitor's Office wrote to Ms Filewood who took over the role of Costs Assessor in relation to the costs respondent's notice of objection dated 10 May 2013, stating that the issues referred to by Mr Reznitsky were of no relevance to the assessment of costs in these proceedings and provided no basis for objecting to the assessment of costs. This was because the orders entered by the District Court on 7 July 2011 borne no relationship with other proceedings commenced by Mr Reznitsky on 21 November 2012. 8On 24 May 2013, the Costs Assessor wrote to the plaintiff (Annexure I, Exhibit 1) inviting the provision of objections to the bill for costs assessment stating: "Would both parties please note I intend to proceed with this application." 9In her separate letter to the plaintiff, the Costs Assessor stated that if he had "any further objections whatsoever to the bill" they should be notified within 14 days (Annexure I, Exhibit 1). 10Mr Reznitsky wrote on 5 June 2013 asking "how the applicant would justify, that the expenses or costs actually occurred at that time, as it [sic] mentioned in the bill?" (Annexure K, Exhibit 1). He asked for a copy of the bill in electronic form so that he could verify it. He said that his health conditions required him to work "at small pace [sic]" and indicated he would reply to the application for assessment "within 5 - 6 weeks". 11The Costs Assessor wrote to the plaintiff on 17 June 2013 providing some general statements of advice to Mr Reznitsky, but advising that the assessor's role did not include the provision of advice or information. Information was, however, provided by the defendant to the plaintiff in response to his letter to the Costs Assessor, including the names of the solicitors working on the file. 12On 28 June 2013 the Costs Assessor again wrote to the plaintiff as follows: "Further to my letter dated 17 June 2013 you will undoubtedly have received the correspondence of the Crown Solicitor's Office dated 25 June 2013 setting out further details as to the various practitioners in question. If you have any further specific objections in relation to the bill, you will need to let me have the same within 21 days of the date hereof." (Annexure N, Exhibit 1) 13The plaintiff replied stating that he would be able to reply "at about 28 of July 2013, the earliest" (Annexure O, Exhibit 1), as he needed to review about 500 items in the bill. 14On 22 July 2013, the Costs Assessor wrote: "Thank you for your letter dated 15 July 2013. There has already been ample time in which to file responses. However I look forward to receipt of final responses no later than Monday 5 August 2013. Would the applicant kindly let me have any response they wish to make within 14 days thereafter." (Annexure P, Exhibit 1) 15The plaintiff replied saying that he had medical certificates which would cover the period up to 9 August 2013 and that work restrictions included work which he described as "the mental, disturbed, type of work" (Annexure Q, Exhibit 1). He asked for an extension to 19 August 2013. 16The plaintiff sent a further letter dated 11 August 2013, stating that only 10-15% of the entries in the bill of costs could be justified, that the entries were "defective" and that the amounts claimed by the costs applicant had "no ground [sic]". He requested further particulars from the costs applicant and concluded by saying: "Once we received the reply, we would be able to provide your [sic] with our submissions / the objections to the bill of costs." 17A request for particulars dated 11 August 2013, covering six closely-typed pages, was then sent. That was replied to, albeit somewhat briefly, on 27 August 2013. 18On 2 September 2013, the Costs Assessor replied to the plaintiff as follows: "Dear Sir/Madam RE: APPLICATION FOR ASSESSMENT OF COSTSSTATE OF NEW SOUTH WALES -V- BORIS REZNITSKYCOSTS ASSESSMENT FILE NUMBER - C/A 00035354 of 2013I have received what purports to be a "request for particulars" addressed to the Applicant. This Application was received by me on 21 May 2013 and is overdue for completion. I propose to make the following comments, at this point in time with respect to certain aspects of the correspondence referred to:-
Grounds of appeal 21The grounds of appeal are essentially the absence of procedural fairness afforded to the plaintiff by reason of the Costs Assessor having failed to consider the document "Respondent's objections (part 1)" and the asserted unexpected finalisation of the assessment. For the purposes of these proceedings, the defendant agrees that the issue of lack of procedural fairness should be considered as a "matter of law" for the purposes of s 384 Legal Profession Act 2004 (NSW) and accordingly it is unnecessary for me to consider the controversy as to whether an appeal should be brought under s 384 or s 385. 22The plaintiff has not established to my satisfaction that the Costs Assessor received the document entitled "Respondent's objections (part 1)" and made a decision to ignore it. The dates of the correspondence make it clear that, to put the plaintiff's case at its highest, his belated submissions would have crossed with the reasons for determination given by the Costs Assessor, and that in those circumstances, given the repeated request from the Costs Assessor for the plaintiff to provide objections and the plaintiff's failure to keep to previous proposed timetables he had proposed, the Costs Assessor would not have been expecting the provision of these submissions. 23The plaintiff did refer to an intention to submit further objections in his letter to the Costs Assessor dated 16 September 2013. However, he had proposed such timetables to the Costs Assessor in previous correspondence and failed to comply with them. The Costs Assessor was entitled to determine the application without waiting to see if submissions would be sent by this further date. The application had been before the Costs Assessor for over seven months, and I am satisfied, having regard to the correspondence set out above, that the plaintiff had been given ample opportunity, notwithstanding his health problems, to submit objections. In addition, over this period, the plaintiff supplied submissions and objections to the Costs Assessor as well as a lengthy request for particulars. 24The Costs Assessor has set out a history of the costs assessment procedure in her reasons for determination and these disclose each of the objections and submissions made by the plaintiff. It is clear from the content of the reasons for determination that these matters have been addressed, although the relevance of much of this material is tenuous. "Due consideration" (s 359 Legal Profession Act 2004 (NSW)) need only be given to submissions made within the "reasonable opportunity" period. Seven months is an ample period, notwithstanding the plaintiff's health. 25In the course of conducting the appeal, the plaintiff identified the following complaints about the costs assessment procedure which related to issues of procedural unfairness: (1)The itemised bill was not served for 18 months. (2)The costs assessment should have been deferred until the criminal proceedings were finalised. (3)The costs orders were invalid as the conviction has been set aside. (4)There was no need for the claimed work to be performed. (5)The Costs Assessor did not consider the plaintiff's objections to the items charged. (6)The Costs Assessor failed to take into account that fact that the plaintiff's submissions on many issues were unopposed. (7)There was no need for the claimed work to be performed. (8)The Costs Assessor did not consider the plaintiff's objections to the items charged. (9)The Costs Assessor failed to take into account that fact that the plaintiff's submissions on many issues were unopposed. (10)The plaintiff was not given an opportunity to object to the second half of the bill. (11)The defendant failed to provide a costs disclosure or to set out how the bill was calculated. (12)The Costs Assessor failed to comply with s 363 Legal Profession Act 2004 (NSW). (13)The Costs Assessor failed to comply with s 359 Legal Profession Act 2004 (NSW). (14)The Costs Assessor failed to comply with s 371 Legal Profession Act 2004 (NSW). (15)The Costs Assessor erred in failing to take into account the costs respondent's indigence. 26The plaintiff also submitted that his ill health should have been taken into account, and that he should have been granted the further extension sought. The nature of a costs appeal 27A right of appeal under s 384 of the Act has been described as "narrow": Bellevarde Constructions Pty Ltd v CPC Energy Pty Ltd (2011) 12 DCLR (NSW) 304 at [12]; Gorczynski v AWM Dickinson & Son [2005] NSWSC 277 at [22]. An error of law, as opposed to an error of fact or mathematics, must be established. The Court of Appeal explained, in Arnott v Glissan [2013] NSWCA 316 at [6], that "[a] challenge to the assessment in terms of its quantification, either in totality or in respect of certain items would rarely, if ever, give rise to a matter of law". 28This means that the plaintiff's objections to the amounts allowed by the Costs Assessor (which I apprehend to be his principal complaint) cannot be challenged under s 384 merely on the basis that they are excessive. In particular, it is not open to the court to consider the justice of the case generally, or to take into account factual matters of the kind raised by the plaintiff, such as the defendant's alleged delay in serving the bill, or whether the plaintiff was successful in other claims or proceedings: B & L Linings Pty Ltd v Chief Commissioner of State Revenue (2008) 74 NSWLR 481. If no question of law can be identified, the appeal should be dismissed: Lang v Kirkness (New South Wales Supreme Court, Harrison M, 22 October 1997). 29The onus lies on the plaintiff to establish the evidence necessary for a finding of procedural unfairness. The defendant submits that this means the plaintiff must establish that the Costs Assessor received the document entitled "Respondent's Objections to the Bill (part 1) and made a decision to ignore it, and to proceed to assessment without it. However, procedural unfairness may occur where there is no fault by the fact finder, but merely inadvertence: Lang v Back & Schwartz [2009] NSWDC 180 at [30]. 30This brings me to the relevant issue of fact in relation to procedural unfairness. First, I am satisfied that, following a series of generous extensions given in the correspondence set out above, a final date given by the Costs Assessor, this being "within twenty one (21) days of the date hereof, or earlier if possible", namely prior to 23 September. When that date arrived, the Costs Assessor proceeded with the assessment, which was completed on 25 September. 31It is unclear why the plaintiff's objections were delivered to the Supreme Court on 23 September rather than directly to the Costs Assessor. The defendant received a copy of the plaintiff's objections from the Supreme Court on 25 September, and the likelihood is that the Costs Assessor received them on or about the same date, which was not only after the cut-off date given by the Costs Assessor, but also, I am satisfied, after completion of the assessment. 32Additionally, as the name of the plaintiff's document makes clear, the document he sent to the Supreme Court on 23 September was by no means the complete list of objections. It was only "part 1". It is unclear to me how many more parts were to follow. Even if the document had reached the Costs Assessor in time, it would only have dealt with some of the issues for determination, and further extensions of time would be necessary. 33The costs assessment process is "neither wholly judicial, nor wholly adversarial, as there are strong elements of an inquisitorial nature involved": Bellevarde Constructions Pty Ltd v CPC Energy Pty Ltd, supra, at [31]. In the Legal Profession Reform Bill, 1993 Second Reading Speech (Hansard, 16 September 1993, p. 3227), the Attorney-General explained that the reason for the replacement of the taxation of costs system was to avoid the "unnecessarily complex and artificial" system of costs assessment with "a faster, easier and cheaper system of review of bills of costs". The reference to "faster" is of some relevance here, given that the costs assessment procedure had been commenced on 5 February 2013 by the defendant, and the plaintiff was still asking for extensions of time on 16 September 2013, despite having been given four opportunities to provide documents, instead of which he supplied three separate submissions or objections to the Costs Assessor (as well as the "part 1" document he submitted on 23 September 2013). 34The requirement for the Costs Assessor to give "due consideration" under s 359 to the submissions of the parties envisages that these will be made during the "reasonable opportunity" period. While the plaintiff did write on 16 September 2013 asking for an extension to 23 September, I am satisfied that the documents he delivered to the Supreme Court on that day did not reach the Costs Assessor until after that date, and that even if they had, the documents manifestly did not deal with all the objections. 35I am satisfied that the Costs Assessor was entitled to give a final date to the plaintiff and, when the plaintiff did not comply with that date, to proceed to assessment. The plaintiff had already been afforded a series of reasonable opportunities to lodge his objections and there was no requirement for the Costs Assessor to delay further the determination of the application to allow the plaintiff to continue to present additional submissions. The Costs Assessor gave a final date for submissions and was entitled to do so, and by proceeding to perform the assessment task after the expiry of that date did not deny the plaintiff procedural fairness. Accordingly, there having been no procedural unfairness either in failing to take into account the 23 September 2013 submissions, or in proceeding to hand down the assessment to the parties, the plaintiff's appeal must fail. 36I further note the submission of the defendant that, having regard to the contents of the "part 1" document, its contents would not have altered the outcome of the assessment as it consisted largely of repetition of previous complaints, such as that the work was not necessary and the plaintiff disputed the manner in which the costs were calculated (see Exhibit 1, pages 130 - 131). The plaintiff did not answer the defendant's submission (written submissions, paragraph 38) that there was nothing new in the "part 1" document. Although the basis of his objections to the remainder of the items in the bill was never specified, I am satisfied that those objections would have been of a similar nature. 37This additional finding is of relevance to the requirement that the party who establishes an error of law must also establish that the error made justifies disturbing the assessment. Legal error alone is insufficient 38An additional problem arising in relation to s 384 appeals is that legal error alone is insufficient. In Bellevarde Constructions Pty Ltd v CPC Energy Pty Ltd, supra, Johnstone DCJ stated at [16]: "[16] Not only must a party who is appealing under s 384(1) establish an error of law, that party must also demonstrate that the error made justifies disturbing the assessment: Gorczynski v AWM Dickinson & Son [2005] NSWSC 277 at [22]. Thus it has been said by Associate Justice Malpass: The onus borne by the plaintiff is not merely to demonstrate error as to a matter of law arising in the proceedings to determine the application but also to demonstrate that any such error is material to the determination": Honest Remark Pty Ltd v Allstate Explorations NL [2008] NSWSC 439 at [24]. ... [whilst there has been an attack on the expression of the reasoning process, it has not been shown that the determination itself was erroneous and should be disturbed ... The onus borne by [the plaintiffs] has not been discharged": Skalkos v Assaf [2002] NSWSC 1221 at [17]-[18]." 39The defendant submits that it would not be in the interests of justice for the court to intervene in circumstances where there would be no substantially different outcome. Accordingly, if I have erred in holding that there was no procedural unfairness, I would alternatively have found that the error of law would not justify disturbing the assessment. 40The appeal is accordingly dismissed with costs.
Concluding remarks 41The plaintiff advised the court that he was leaving Australia on Sunday 3 August 2014 for one month for a holiday overseas, and requested the judgment not be handed down until 15 September 2014, since he intended to appeal. The defendant, understandably, sought judgment as soon as the court was able to hand down its decision, but took the practical stance of suggesting that judgment should not be deferred for the entire period sought by the plaintiff. 42I have acceded to the plaintiff's wishes in part, by deferring the handing down of my judgment to Friday 29 August 2014. The appeal period will have just commenced to run by the date of his return to Australia, which should give him sufficient time to attend to this task.
Orders (1)Judgment for the defendant. (2)Plaintiff to pay the defendant's costs. (3)Exhibits retained for 28 days.
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 September 2014
Reznitsky
State of New South Wales