Scope Data v David Goman

LOWER COURT Costs Review Panel & Costs Assessor JURISDICTION : LOWER COURT 90747/2003 FILE NUMBER(S) : LOWER COURT Messrs John Bartos & Ian Dwyer (Costs Review Panel) and Mr P J Johnstone (Costs Assessor) JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

10441/2004 - SCOPE DATA SYSTEMS PTY LIMITED (ACN 001 384 381) v DAVID GOMAN (AS REPRESENTATIVE OF THE PARTNERSHIP OF BDO NELSON PARKHILL)

JUDGMENT (Appeal determination of Costs Assessor and Review Panel) 1 MASTER: By amended summons filed 3 May 2004, the applicant claims: firstly, an order pursuant to s 208L of the Legal Profession Act 1987 (NSW) (LPA) setting aside the determination of Messrs John Bartos and Ian Dwyer, costs review panel dated 21 January 2004, Matter No. 90747 of 2003 and Mr P J Johnstone, costs assessor dated 25 September 2003; secondly, and in the alternative, an order granting the applicant leave to appeal pursuant to s 208M of the LPA from the determinations and for the court to hear and determine the appeal; thirdly, a redetermination of the respondent's costs application; and fourthly, stay the proceedings in this court arising out of either or both certificates of determination issued by the costs assessor and the costs review panel. For convenience, in this judgment I shall refer to Scope Data Systems Pty Limited (Scope Data) and David Goman (Goman) by name. The applicant relied on the affidavit of Mr Peter Gorczynski, the director of the applicant, sworn 15 June 2004.

Extension of time to appeal 2 On 25 September 2003 the costs assessor issued the certificate of costs. On 21 January 2004 the review panel made its determination. On 18 February 2003 the summons was filed. The summons was filed shortly after the review panel's decision. No prejudice caused by the delay has been occasioned to Goman. In these circumstances it is my view that as it is desirable that the matter go to the review panel before an appeal is lodged to this court, an extension of time to file the appeal should be granted. I do so.

Grounds of appeal 3 There are three main grounds of appeal firstly, the costs assessors' reasons do not provide adequate explanation as required by s 61, cl 2 and s 68, cl 1 of the Legal Profession Regulations 2002 (NSW); secondly, the cost assessor erred by failing to grant a further extension of time for Scope Data to file its submissions; thirdly the costs assessor erred failing to request the costs agreement to be produced and thereby denying Scope Data procedural fairness; and fourthly, the costs assessors failed to fulfil their statutory obligation under ss 208A(2) and 208F of the LPA.

The costs order in the Local Court 4 On 29 July 2002 Dillon LCM ordered firstly, that in relation to Goman's motion to strike out Scope Data's defence, each party was to bear its own costs; secondly, in relation to Scope Data's motion to strike out the statement of liquidated claim, each party was to bear its own costs; in relation to the subpoenas the Scope Data's associated motion, Goman was to pay Scope Data's costs; and thirdly, in relation to the costs of the hearing, Scope Data was to pay Goman's costs on the party/party basis in a sum agreed or assessed. 5 At the costs hearing before the Magistrate, Goman handed a copy of a bill of costs to the Magistrate and Scope Data's legal representatives (J 42). That bill of costs totalled $30,024.30 (TA 3-18). The Magistrate commented that the work performed for the interlocutory matters constituted a large portion of the costs ultimately incurred in the matter (J para 16). The Magistrate also observed that it seemed clear that by the time the proceedings were instituted, Goman's patience had worn thin with Scope Data and Mr Gorczynski and as things turned out, there was a justified sense of grievance on the part of Goman. The Magistrate reported that it was also evident that Goman's solicitors took an unbending attitude in their dealings with Scope Data particularly when he was unrepresented (J para 32). Thus as in the interlocutory strike out applications, both parties were to bear their own costs and in relation to a subpoena Goman was to pay Scope Data's costs it is the costs Goman incurred in the matter (not including these interlocutory skirmishes) that are the subject of this bill of costs. The costs assessor's decision 6 Section 208L of the LPA provides: "208L Appeal against decision of costs assessor as to matter of law (1) A party to an application who is dissatisfied with a decision of a costs assessor as to a matter of law arising in the proceedings to determine the application may, in accordance with the rules of the Supreme Court, appeal to the Court against the decision. (2) After deciding the question the subject of the appeal, the Supreme Court may, unless it affirms the costs assessor's decision: (a) make such determination in relation to the application as, in its opinion, should have been made by the costs assessor, or (b) remit its decision on the question to the costs assessor and order the costs assessor to re-determine the application. (3) On a re-determination of an application, fresh evidence, or evidence in addition to or in substitution for the evidence received at the original proceedings, may be given." 7 The approach that should be taken by the court in an appeal from a costs assessor was set out in Larsen v Vile [1999] NSWCA 397 and Chapmans Ltd v Yandell (t/as Yandells) [1999] NSWCA 361. It is incumbent upon the applicant to establish in relation to any relief claimed under s 208L of the LPA that there has been some error of law in respect of the determinations made by the costs assessor and subsequently the costs review panel. As such, an appeal under s 208L of the LPA is confined to law. 8 Goman's bill of costs claimed a total of $26,515.13. On 25 September 2003, Mr. Peter Johnstone, the costs assessor delivered a statement of reasons and a certificate. The certificate assessed as fair and reasonable costs to be paid by the applicant at $24,963.13.

The refusal of an extension of time to lodge submissions 9 Section 208(1)(a) of the LPA provides: (1) A costs assessor must not determine an application for assessment unless the costs assessor: (a) has given both the application and any barrister, solicitor or client or other person concerned a reasonable opportunity to make written submissions to the costs assessor in relation to the application." 10 Section 208A(1) and (2) of the LPA provides:

"(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." 11 On 8 July 2003 the costs assessor wrote to the parties and directed Scope Data to make written submissions by way of objection by 28 July 2003. Scope Data's then solicitors wrote to the costs assessor and stated that Mr Gorczynski was the only person in the firm with a detailed knowledge to deal with the costs application and that he had a number of court actions, the last being the preparation of grounds of appeal to the Court of Appeal by 8 August 2003. As a result of those commitments Scope Data sought a reasonable extension of time for lodging its submissions to 14 September 2003. Two days later, namely on 16 July 2003, Scope Data's solicitor advised the costs assessor that it no longer acted for them. On 25 July 2003 the costs assessor wrote to the parties stating that he was aware that he had to give Scope Data a reasonable opportunity to make written submissions and in doing so granted an extension to 14 September 2003. Goman had objected to an extension of time being granted to Scope Data. In his penultimate paragraph the costs assessor stated, "In the circumstances I propose to allow that extension, but no more." 12 On 16 September 2003 (two days after the extension period expired) Gorczynski wrote to the costs assessor stating that the Court of Appeal had expedited the appeal and he now had two more bills of costs that he was required to address. Scope Data sought a further extension until 6 October 2003. On 22 September 2004 the costs assessor advised Scope Data that he was not prepared to give any further extension of time and he would assess the costs as soon as his circumstances and commitments permitted. The costs assessor undertook the assessment process on 25 September 2003 (a date well before the further extension period would have expired). 13 It is my view that Scope Data was given a reasonable opportunity to make submissions. It did not do so. In these circumstances there is no denial of procedural fairness. 14 As Scope Data did not comply with directions, the costs assessor was obliged to conduct the assessment without the benefit of Scope Data's submissions/objections. These submissions would have drawn the costs assessor's attention to specific areas of complaint.

Costs agreement 15 Whether or not a costs assessor decides to request a copy the costs agreement would depend on the circumstances in each case. It is not obligatory and is subject to the costs assessor's discretion. Scope Data submitted that the costs assessor failed to satisfy himself that the costs indemnity had not been breached. But there was nothing in the bill of costs before the costs assessor to suggest that Scope Date would have been able to raise this issue if it has occurred but did not do so. There was nothing in the bill such as excessive charge out rates that would cause the costs assessor to require the costs agreement. The fact that one existed was referred to in the narrative in the bill of costs. It is my view that in these circumstances the costs assessor was not obliged to request the costs agreement. There is no error of law. 16 The costs assessor gave reasons and relevantly stated: "4. IN RESPECT OF THE DISPUTED COSTS (a) The basis on which costs were assessed In my opinion and I determined accordingly: The basis of the charges claimed by the solicitors was fair and reasonable. Some of the claims were for items which were inappropriate, necessary or excessive and therefore not fair and reasonable. I reduced or disallowed them. (Items: 87, 107, 109, 295, 296, 298, 299) Bulk photocopying was claimed at excessive rates and not therefore fair and reasonable. I allowed these items at commercial rates. (Items: 110, 112, 113,128, 129, 131, 132, 133, 135, 136, 137, 297) The claim for counsels' fees was fair and reasonable. The fees claimed for the Costs Consultants were fair and reasonable. The Costs Respondent should bear the costs of the assessment, the costs assessor's fees and filing fee." 17 Scope Data specified certain items in the bill which it submitted Goman was not entitled to claim. Even if this submission is right, they do not amount to an error of law. Scope Data also submitted that the costs assessor did not provide adequate reasons. In addition to the reasons the bill of costs was marked where amounts were deducted. The costs assessor gave adequate reasons.

The costs review panel 18 Section 208KC of the LPA states: "General functions of panel in relation to review application

(1) A panel constituted under this Subdivision may review the determination of the costs assessor and may:

(a) affirm the costs assessor's determination, or (b) set aside the costs assessor's determination and substitute such determination in relation to the costs assessment as, in their opinion, should have been made by the costs assessor who made the determination that is the subject of the review. (2) For the purposes of subs(1), the panel has, in relation to the application for review, all the functions of a costs assessor under this Part and is to determine the application, subject to this Subdivision and the regulations, in the manner that a costs assessor would be required to determine an application for costs assessment.

(3) However, the review is to be conducted on the evidence that was received by the costs assessor who made the determination that is the subject of the review and, unless the panel determines otherwise, the panel is not: (a) to receive submissions from the parties to the assessment, or (b) to receive any fresh evidence or evidence in addition to or in substitution for the evidence received by the costs assessor." 19 Hence s 208KC(3) of the LPA provides that the review is to be conducted on the evidence received by the costs assessor who made the determination. Costs review panel members Mr John Bartos and Mr Ian Francis Dwyer constituted the costs review panel undertook a review of the determination of costs assessor Mr Peter Johnston and affirmed the decision of the costs assessor. 20 The matters drawn to the review panel's attention by Scope Data were firstly, that the assessor unreasonably refused Scope Data's application for a further adjournment; secondly, the costs assessor's reasons were insufficient and costs were allowed which were outside the terms of the Magistrate's orders. For the reasons I have already given, I agree with the decision of the costs review panel. There is no error of law. Section 208M of the LPA 21 In the alternative, the applicant relied on s 208M of the LPA which provides: "208M Appeal against decision of costs assessor by leave (1) A party to an application relating to a bill of costs may, in accordance with the rules of the Supreme Court, seek leave of the Court to appeal to the Court against the determination of the application made by a costs assessor. (2) A party to an application relating to costs payable as a result of an order made by a court or a tribunal may, in accordance with the rules of the court or tribunal, seek leave of the court or tribunal to appeal to the court or tribunal against the determination of the application made by a costs assessor. (3) The Supreme Court or court or tribunal may, in accordance with its rules, grant leave to appeal and may hear and determine the appeal. (4) An appeal is to be by way of a new hearing and fresh evidence, or evidence in addition to or in substitution for the evidence received at the original proceedings, may be given. (5) After deciding the questions the subject of the appeal, the Supreme Court or court or tribunal may, unless it affirms the costs assessor's decision, make such determination in relation to the application as, in its opinion, should have been made by the costs assessor." 22 In Chapmans Ltd v Yandell [1999] NSWCA 361, Fitzgerald JA (with whom Mason P and Davies AJA agreed) stated that it is important to keep in mind that the purpose of a requirement of leave to appeal is that it is intended to act as a filter to ensure that unsuitable appellant proceedings are not able to be brought with the demands which that places upon the resources of the court and the burden which it places upon other parties and the delays which it causes to other litigants. - see Coulter v Regina (1988) 164 CLR 350 at 359. 23 Fitzgerald JA also stated that if leave to appeal should be granted where there is some other matter which injustice required that leave to appeal be granted to allow that matter to be re-litigated, the party seeking leave to appeal obviously bears the burden of establishing that justice does require that leave to appeal be granted. Further, the Master when considering whether to grant leave to appeal obviously has a very wide discretion - see CDJ v VAJ [1998] HCA 67 (per McHugh, Gummow and Callinan JJ). 24 I have already given reasons in relation to the extension of time, adequacy of reasons given and the provision of a costs agreement. That leaves a number of items in the bill that Scope Data disagrees with and claim that they were errors or items not referrable to the costs order. These are not matters for which leave should be granted. Leave to appeal under s 208M of the LPA is refused. 25 Costs are discretionary. Costs usually follow the event. Scope Data is to pay the Goman's costs as agreed or assessed.

(2) The application for leave under s 208M of the LPA is refused.

(3) The decisions of the costs assessor dated 25 September 2003 and the costs review panel dated 21 January 2004 are affirmed.

(5) The applicant is to pay the respondent's costs as agreed or assessed. **********

Last Modified: 09/23/2004 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.