Slattery v Fordyce; Fordyce v Slattery

BACKGROUND

1. The plaintiff is the sole director and shareholder of two companies: 1. Dee-Tech Pty Ltd ("Dee-Tech") (the third defendant in the appeal before this Court); and 2. Bright Star Laundry Pty Ltd ("Bright Star") (the fourth defendant in the appeal before this Court).
2. Dee-Tech operates an internet café and computer consultancy business, which is run by Mr Bennett Joseph Slattery, the plaintiff's husband (and the second defendant in the appeal before this Court), with the assistance of the plaintiff. Bright Star operates a commercial laundry business, which is run by the plaintiff, with the assistance of Mr Slattery. (Dee-Tech and Bright Star shall hereinafter be collectively referred to as "the plaintiff's companies").
3. The plaintiff's companies operated their respective businesses from the premises leased by Neddam Holdings Pty Ltd ("Neddam") at 3, 217 The Entrance Road, Erina ("the premises"), with Dee-Tech as lessee and Bright Star as sub-lessee.

Proceedings before Gzell J

1. On 24 April 2007, the plaintiff's companies commenced proceedings in the Supreme Court.
2. By a statement of claim filed on 7 March 2008, they sought a vaguely worded declaration that "at all material times [Dee-Tech] has validly exercised any option to renew registered lease number 63994Q [sic] (as varied)". In the alternative, they sought a more precisely worded declaration that Dee-Tech had "validly exercised the option to renew registered lease number 63994Q [sic] (as varied) for a term of three years commencing from 1 February 2008 and terminating on 31 January 2011". In the further alternative, the plaintiff's companies sought an order that Dee-Tech "be relieved of forfeiture of the lease of the premises". Bright Star also sought relief from the forfeiture of its sub-lease.
3. By an amended cross-claim filed on 19 December 2008, Neddam sought an order against the plaintiff's companies for possession of the premises (the plaintiff and Mr Slattery were cross-defendants in the proceedings). Neddam also sought an order for rectification of the variation of lease, in order to change the date that from which Dee-Tech was required to pay outgoings in respect of the premises.
4. The matter was heard before Gzell J of the Equity Division of this Court on 12-13 October 2009.
5. In a judgment given on 8 December 2009 Gzell J held, in substance, that Neddam was entitled to the relief it sought and that Dee-Tech's claim for relief against forfeiture of the lease of the premises should be rejected: Dee-Tech Pty Ltd v Neddam Holdings Pty Ltd (No 2) [2009] NSWSC 1355.
6. On 17 December 2009, his Honour made orders dismissing the plaintiff's companies' statement of claim and granted the relief sought by Neddam.

The Appeal Matter

1. The plaintiff's companies sought to appeal the decision of Gzell J and stay the orders, with respect to possession, of 17 December 2009.
2. On 1 December 2010, the appeal was brought before the Court of Appeal. In a judgment given on 22 December 2010, Sackville AJA (with whom Campbell and Young JJA agreed) allowed the appeal and, inter alia, remitted the matter to the Equity Division of the Supreme Court to be determined in accordance with law: Dee-Tech Pty Ltd v Neddam Holdings Pty Ltd [2010] NSWCA 374.
3. The proceedings before the Court of Appeal, together with the application for a stay of judgment, shall hereinafter be referred to as "the Appeal Matter".

The Taking of Accounts Matter

1. Further proceedings were brought and listed before White J in the Equity Division of the Court, which concerned the taking of accounts on the moneys owed by Dee-Tech for outstanding contributions to outgoings (matter number 2007/254642, which shall hereinafter be referred to as "the Taking of Accounts Matter"). (For completeness it should be noted, the Taking of Accounts Matter was heard together with matter number 2010/393169, which concerned the validity of notices purportedly given under s 133E of the Conveyancing Act 1919 (NSW) and a claim by Dee-Tech for relief under s 133F of the Conveyancing Act for relief against the effect of such breaches as are found).
2. The matter was heard over three days: 14, 16 and 17 June 2011.
3. On 3 May 2012, White J made the following orders with respect to the Taking of Accounts Matter: 1. Give judgment for Neddam against Dee-Tech in respect of outgoings and interest payable up to and including 30 April 2012 under the renewals of lease no 639942Q dated 23 November 1999 as varied by a variation of lease dated 28 May 2002 (after deduction of $4,000 payable by Neddam to Dee-Tech pursuant to the orders of 9 June 2005 and interest thereon at the prescribed rates), in the sum of $51,912.09. 2. Order that the Dee-Tech pay two-thirds of Neddam's costs of the account ordered by Gzell J on 17 December 2009 on the ordinary basis. 3. Order that all moneys held in the escrow account of LJ Hooker Commercial Central Coast in respect of the payment of outgoings, including any interest earned thereon, be paid to Neddam. 4. Order that, except as has been otherwise ordered, Dee-Tech's claims for relief in its Statement of Claim and Neddam's claims for relief in its amended cross-claim be dismissed.
4. Reasons for decision were published on 22 March 2012: Dee-Tech Pty Ltd v Neddam Holdings Pty Ltd [2012] NSWSC 251. A subsequent judgment was also issued, with respect to the orders that followed and costs, on 18 May 2012: Dee-Tech Pty Ltd v Neddam Holdings Pty Ltd (No 2) [2012] NSWSC 517.

The Plaintiff's engagement of Paul Mervyn Fordyce

1. On 8 February 2010, the plaintiff first met with the first defendant in relation to the Appeal Matter.
2. On 18 February 2010, the plaintiff received a draft engagement letter via email (the document received included tracked changes). The draft engagement letter, together with the Schedule of Fees and Expenses and the Terms of Engagement, set out the proposed agreement in relation to the costs of the legal services to be provided by the first defendant ("the proposed agreement"). The proposed agreement concerned the provision of legal services by the first defendant in relation to the Appeal Matter.
3. On 22 February 2010, following further amendments to the proposed agreement, the plaintiff signed the third page of engagement letter ("the First Costs Agreement"). The plaintiff's signature appeared three times: once above the words "Dee-Tech Pty Ltd"; once above the words "Bright Star Laundry Pty Ltd"; and once above the words "Rhonda Slattery". Two further handwritten notations featured on the third page, namely, the date "22/2/10" next to the first recording of the plaintiff's signature, and the first defendant's signature above the words "Paul Fordyce". It was a point of contention between the parties to these proceedings as to whether the First Costs Agreement also engaged the plaintiff's companies (this will be discussed later in the context of the first defendant's cross-summons). The First Costs Agreement, signed by the plaintiff, was sent to the first defendant by email on 23 February 2010.
4. The First Costs Agreement provided an estimate of the "likely amount" of costs to be of "approximately $50,000.00 (not including GST)", which included $15,000 for counsel's fees.
5. On 26 February 2010, the first defendant sent documents to secure charges over the plaintiff's companies to the value of $250,000 each.
6. On 8 March 2010, the plaintiff requested by email that the first defendant "review, prepare and provide an invoice to me soon", as she wanted to make a drawing from her loan facility. By the same communication, the plaintiff also requested an updated "estimate of costs and timeframe". On the plaintiff's submission, there was no reply from the first defendant as to the request for an updated estimate nor an indication that the security for charge documents should be viewed as an updated estimate.
7. On 19 April 2010, the first defendant prepared a subsequent engagement letter concerning the provision of legal services in relation to the Taking of Accounts Matter ("the second proposed agreement"). It provided for an estimate of the "likely amount" of costs to be of "approximately $15,000.00 (not including GST)". The second proposed agreement was never received or signed by the plaintiff or Mr Slattery. Notwithstanding that fact, it is not disputed that the first defendant provided legal services in relation to the Taking of Accounts Matter. It may also be noted that it was not disputed that the first defendant provided legal services with respect to the Appeal Matter.
8. During the course of the retainer, from 22 February 2010 to 4 August 2010 ("the retainer"), the first defendant issued 29 invoices, totalling $149,639.10. Of that amount, $56,016.50 was for counsel's fees and the remainder was for professional fees and other disbursements.

Engagement of Counsel

1. Over the course of the retainer, the plaintiff retained four barristers, which were briefed by the first defendant as instructing solicitor to act for the plaintiff. They were as follows: 1. Mr Todd Alexis SC; 2. Mr David Mackay; 3. Mr Luca Shipway; and 4. Mr Imtiaz Ahmed.

Mr Alexis

1. Mr Alexis first appeared for the plaintiff on an urgent basis, prior to the retainer, in December 2009, with respect to the Appeal Matter. Mr Alexis was being briefed by the plaintiff's previous solicitor at that stage. Those fees were paid through another law firm and are not relevant to the present matter.
2. On or around 2 and 4 February 2010, the plaintiff approached Mr Alexis to run the Appeal Matter. It would appear that Mr Alexis proposed to accept instruction directly from the plaintiff, as a person who is not a solicitor or officer of a government department or agency whose usual duties include engaging lawyers, with a payment of $12,000 made directly into his account (via two separate bank transfers of $10,000 and $2,000, respectively) (see r 22 of Legal Profession Uniform Conduct (Barristers) Rules 2015 (NSW)).
3. On 10 February 2010, an agreement was reached between the plaintiff, the first defendant and Mr Alexis, that Mr Alexis would transfer the $12,000, received from the plaintiff as payment for counsel's future fees, into the PMF Legal Trust Account. It would appear by this agreement that Mr Alexis accepted a brief by the first defendant as instructing solicitor.

Mr Mackay, Mr Shipway and Mr Ahmed

1. Mr Mackay and Mr Shipway were also briefed as junior counsel, it would appear, to assist Mr Alexis.
2. On 10 March 2010, Mr Mackay was briefed to assist Mr Alexis with the Appeal Matter.
3. On 23 March 2010, the first defendant advised the plaintiff to notify Mr Mackay directly that she did not propose to utilise Mr Mackay's services for the Taking of Accounts Matter but would be using the services of Mr Shipway.
4. On 6 April 2010, Mr Shipway was briefed to assist the plaintiff in preparing her evidence in relation to the falsifications and surcharges for the Taking of Accounts Matter. (Mr Shipway was also previously briefed to assist Mr Alexis in relation to a security for costs matter, which was heard on or about 29 March 2010).
5. On 22 June 2010, Mr Shipway arranged for Mr Ahmed, a reader on the floor, to be briefed, in an effort to reduce costs to the plaintiff, in relation to the Taking of Accounts Matter.
6. On 25 June 2010, the first defendant advised the plaintiff that "[a]s far as dealing with the junior counsel it is more expedient for you to deal directly with him than go through [the offices of the first defendant]".

Payment of Counsels' Fees

1. On the submission of the plaintiff, counsels' fees were paid in full. First, with respect to Mr Alexis, the money held on trust was ultimately released to Mr Alexis in payment of his services. Over the course of the retainer, further amounts were paid by the plaintiff, with respect to counsels' fees, into the PMF Legal Trust Account.
2. Following the termination of the retainer on 4 August 2010, the plaintiff paid $25,006.60 ($23,769 and $1,237.50, respectively) directly to counsel in respect of liabilities which had been included in invoices issued by the first defendant.
3. A total of $31,010 was paid to the first defendant, to satisfy counsels' fees of $56,016.50, with the balance of $25,006.50 having been paid directly to counsel by the plaintiff.

Termination of the retainer

1. On 4 August 2010, the first defendant filed and served Notices of Ceasing to Act with respect to the Appeal Matter and the Taking of Accounts Matter.
2. That same day, after receiving the first defendant's notices, the plaintiff wrote to the first defendant to confirm she "will meet the costs of the Barristers fees that have not been paid" and "hopes" to resolves the first defendant's fees by agreement. In the event agreement could not be reached, the plaintiff advised she would "submit your fees for costs assessment scheme and will meet them in due course pending determination".

The Local Court Proceedings and the Judgment Below

1. By a statement of claim filed in the Local Court on 26 June 2014, the first defendant commenced proceedings against the plaintiff, the plaintiff's companies and Mr Slattery, for unpaid legal costs incurred during 2010 ("the statement of claim"). The total relief claimed was $116,807.05.
2. The first defendant pleaded that there was a breach of contract with reference to both the First Costs Agreement and the second proposed agreement (collectively, "the agreements"). (It should be noted, the first defendant pleaded that the second proposed agreement constituted "the Second Agreement").
3. As to the First Costs Agreement, it was pleaded: On or about 8 February 2010, by an agreement between the plaintiff and defendants, the plaintiff agreed to act as solicitor for the defendants and the defendants agreed to pay for legal services in accordance with the Engagement Letter and Schedule of Fees and Expenses.
4. As to the second proposed agreement, it was pleaded: On or about 19 April 2010, by an agreement between the plaintiff and defendants, the plaintiff agreed to act as solicitor for the defendants and the defendants agreed to pay for the legal services in accordance with the Engagement Letter and Schedule of Fees and Expenses.
5. The first defendant did not distinguish between the plaintiff, Mr Slattery or the plaintiff's companies (collectively described as "the defendants" in the statement of claim): each was considered party to both agreements. Further, as to start date of the First Costs Agreement, the first defendant relied upon the date the plaintiff first met with him (as opposed to the date of the written agreement).
6. The first defendant also pleaded that the total amount invoiced for the provision of legal services (including disbursements) was $149,639.10 and that "the defendants" had only paid $55,657.35.
7. On 27 January 2015, the matter commenced in the Local Court before Pierce LCM. The hearing of the matter, whilst not initially intended, was ultimately divided into two separate hearings for the purposes of determining liability and quantum, respectively. They shall be addressed in turn below.

Liability

1. The liability hearing was heard over three days: 27 January, 30 March and 24 June 2015. His Honour handed down his reasons for decision on 12 October 2015 ("the liability decision").
2. Pierce LCM held the First Costs Agreement was constituted by the engagement letter dated 22 February 2010 "and its return duly executed [by the plaintiff] on 23 February". His Honour described the agreement as follows: The [first defendant's] letter of engagement of 22nd February provided for a fee of $500.00 per hour, and $350.00 for work done by an employed solicitor. It estimated fees for the work at $50,000.000, although $15,000.00 of that figure was for counsel's fees. The $35,000.00 which represented estimated fees of the [first defendant] was exceeded when work in the first few weeks after engagement became the subject of three invoices issued together or in rapid succession. [The plaintiff] had been the person with whom the [first defendant] had most contact, and she had from the beginning been extremely cautious and concerned about the need to contain fees. The [first defendant] sought security for costs in an amount of $250,000.00, and in an early email she responded indicating that she thought $150,000.00 was enough.
3. His Honour made the following findings, inter alia, with respect to liability under the First Costs Agreement: 1. the plaintiff was bound by the First Costs Agreement; 2. the first defendant had met his disclosure obligations under ss 316 and 317 of the Legal Profession Act 2004 (NSW) ("the LPA"), vis-à-vis the plaintiff; 3. the plaintiff was the sole director of the plaintiff's companies; 4. that despite the plaintiff signing the First Costs Agreement for the plaintiff's companies, the plaintiff's companies were not liable under the First Costs Agreement; 5. as to the contended liability of Mr Slattery, there was no evidence of agreement by conduct and absent the necessary disclosures, as required by the LPA, "it is not possible to hold Mr Slattery liable"; 6. the first defendant "was entitled to be paid for the work done in relation to the first agreement (the appeal and stay)"; 7. as to work completed prior to First Costs Agreement, it was held that such work "must have been pursuant to [an] earlier (if tacit) agreement". However, it was also noted that the plaintiff acknowledged the work completed prior to the First Costs Agreement and did not take issue with the first defendant's entitlement to be paid for that work. Hence, Pierce LCM made the following recommendation to the first defendant: … even at this late stage, amended prior to the formal entry of judgment to plead quantum meruit for the earlier work (by pleading restitution for unjust enrichment) and so regularise the record, and I invite the parties to agree to such an amendment. … It is a preferable course, but in spite of what I perceive to be an incorrect pleading (failure to pick up what ought to be seen as a quantum meruit (even in the absence of amendment the [first defendant's] claim must be regarded as extending that far. 1. that the amount for which the first defendant was entitled to succeed on, with respect to the claim brought before the Local Court, was the total of the invoices appearing on a table that had been handed up, (but unmarked), which related to the Appeal Matter, but not those related to the Taking of Accounts Matter.
4. As to the above finding with respect to disclosure obligations under the First Costs Agreement, in light of the matters raised on appeal, further elaboration is required.
5. First, his Honour referred to email correspondence sent from the first defendant to the plaintiff on 2 March 2010, which advised: "the needed stay of proceedings had been achieved and indicat[ed] quite explicitly that $125,000.00 would be likely to 'cover the matter'". His Honour found, notwithstanding its form, the email "sufficiently conveyed that [the first defendant's] fees would be in that vicinity, and more to the point certainly conveyed that there had been a substantial change to the fees likely to be incurred".
6. Second, in another email dated 17 March 2010, the first defendant cautioned against the uncertainties of litigation and indicated, "if pressed to its conclusion, the appeal proceedings could attract additional costs of about $300,000.00". His Honour found "[i]t is therefore a yet further advice as to costs which made it plain that there had been a substantial change in the likely estimated costs".
7. Turning to the second proposed agreement, his Honour found: 1. the first defendant relied upon a second proposed agreement, however "there was no agreement and no disclosure in relation to that matter" with any of the named parties, as the second proposed agreement had not been received by them; 2. however, the first defendant did do work in relation to the second proposed agreement, and the plaintiff was aware he was doing that work; and 3. as to the fees, with respect to the Taking of Accounts matter, notwithstanding no agreement was found, the first defendant "will have to await assessment".
8. Thus, his Honour rejected that aspect of the first defendant's claim, with respect to the Taking of Accounts Matter: he found it "cannot succeed" in the absence of a costs agreement. (For completeness, it should be noted, the first defendant did not ultimately amend its claim to include quantum meruit as suggested by Pierce LCM).
9. In summary, with respect to liability under the agreements, Pierce LCM held: • There was agreement (and disclosure) with [the plaintiff] in relation to the work regarding the appeal and stay (the first agreement), but not the work in relation to the taking of accounts (the second agreement), • There was no agreement or disclosure with [the plaintiff's companies or Mr Slattery] in relation to either agreement.
10. Following his Honour's findings with respect to liability, in light of difficulties identified with respect to the determination of quantum (which included confusion as to the identification of invoices issued by the first defendant, namely, being mistakenly noted as relating to the Appeal Matter but, in fact, properly concerning the Taking of Accounts Matter), Pierce LCM, concluded that further "evidence and submissions would be needed" and directed the parties to advise the Court, "if the matter need[ed] to be set down for further hearing for that purpose".
11. Pierce LCM concluded: Once the total of the payments is arrived at it may be deducted from the total of invoices relating to the appeal and stay matter, and apart from interest the result will be the amount for which the plaintiff will succeed. I will need the parties to agree on that figure before entering judgment, and failing agreement I will have to set the matter down for further argument. … The judgment to be entered will be only against [the plaintiff in respect of the Appeal Matter].
12. No orders were entered at this stage, owing to the need to determine quantum.

Quantum

1. Following the liability hearing, the parties were unable to reach agreement on quantum. The quantum hearing was heard over 12 days, commencing on 19 October 2016, with judgment reserved on 8 March 2017. As earlier mentioned, his Honour delivered two sets of reasons as to "quantum" and "disbursement, interest and costs", respectively, to which I now turn.
2. It should be noted that the day before the delivery of the quantum decision the plaintiff filed a written submission on costs that contended s 355(b) of the LPA (as set out and discussed below) had the effect that the proceedings before the Local Court should not have been brought and could not be maintained. It was argued that, accordingly, the first defendant should be ordered to pay costs of the proceedings. No submission was made that the provisions would otherwise effect the disposition of the proceedings below.

Reasons re Quantum

1. On 18 May 2017, Pierce LCM delivered a "note of reasons on quantum" (the quantum decision).
2. The first paragraph of the quantum decision reads as follows: After I gave reasons in the substantive proceedings dealing with liability, deciding in favour of the [first defendant] against [the plaintiff] only, and only in respect of the claim for work relating to the appeal and stay, the parties were unable to reach agreement on quantum. An attempt was made to persuade them to have the quantum assessed, but they could not agree on that course, and I was left to determine quantum on a disputed basis. Other than very brief determinations, that is the only time in thirty years on the bench that I have had to perform anything even remotely like such a large exercise when determining the quantum of damages on an action by a solicitor for unpaid costs. It is like an old-fashioned taxing of costs, and it is most regrettable that it had to occur.
3. Pierce LCM set out the procedure he adopted, with respect to the determination of quantum, in summary, as follows (at 1): to "improve the chances of dealing with quantum more expeditiously" his Honour required the parties to prepare a "Scott Schedule" and, ultimately, a second supplementary schedule ("the schedules"). The schedules were prepared and used during oral submissions. The matter then proceeded "on the basis that we went through the line items in the first schedule one by one" (at 9).
4. His Honour noted (at 10): Eventually, after many days hearing, we reached a point where [the plaintiff's] interruptions, over-talking and repetitions became so great that I could no longer conduct an oral hearing. She did eventually apologise, indicating that she had been tired and not well. I provided for written submissions. There were delays and some extensions, but some material was eventually provided.
5. On 8 March 2017, following the difficulties proceeding with an oral hearing - "occasioned by intemperate behaviour on [the plaintiff's] part" - Pierce LCM made orders for the filing of written submissions. Those orders were set out at the start of the quantum decision (at 1). In summary, the parties were directed to provide a series of written submissions, within the specific parameters defined by the Court, that included references to line items in the schedules.
6. At the same juncture, Pierce LCM made the following observations as to the written submissions provided by the plaintiff: "Her submission did not deal with each line item seriatim but made global submissions in relation to groups of items. In the process she did in fact seek to re-agitate issues already decided". Further, as to a note relating the supplementary schedule, it was provided "unreasonably late" and was not had regard to by Pierce LCM.
7. The quantum decision then turned to explain the approach Pierce LCM took to the allowance or disallowance of items, which he marked on the schedules. Pierce LCM also determined the extent of counsels' fees and the extent to which such fees were paid, by the first defendant, or directly by the plaintiff.
8. The following observations of Pierce LCM in the quantum decision are also relevant to the arguments of the parties with respect to ground 5 (which will be discussed below): 1. "There were a great deal of submissions back and forth as to each line item. Many line items and part of items were conceded by the [first defendant] as unrelated to the appeal and stay with which we are concerned, being concerned rather with the taking of accounts matter on which the plaintiff did not succeed" (at 9); 2. "As we went, I made rulings on a large number of items, finding amounts proved relating to them, and I made notes on the schedule of the amount disallowed in relation to each item. In addition to those items not reached in the hearing I also made some notes in red or green ink when preparing these reasons, a small number of which had not been correctly noted at the hearing. They are items where the [first defendant] had made a concession as to an item not being owing, but that concession had not been noted on the schedule and perhaps was not addressed" (at 10); 3. "When I gave written reasons in the substantive hearing I expressly indicated that the [first defendant] would succeed in respect of the work done in relation to the appeal and the stay. It is too late now to seek to go behind the findings I made. I also made it quite clear that I would not in the present quantum hearing permit the re-canvassing of findings already made" (at 12); 4. "[I]t is not necessary to address much of [the plaintiff's] submissions. Where I do not address them it is because they amount to no more than general criticisms or they fail to identify line items in the Scott schedule or fail to explain why she was not able to address them at the hearing. In each and every case I have considered all the line items and where not expressly addressed find that it is apparent on their face that they are reasonable. When throughout these reasons I have not addressed any item I have accepted it, without taking up time expressly identifying the reasons - which in each case will be obvious on the face of the item. I have not however, addressed those items in respect of which [the plaintiff] had an opportunity to put her submissions orally in the hearing and did not do so)" (at 19); 5. "[The plaintiff] did not address the supplementary schedule within the allowed time. Several times in the course of the matter it was necessary to allow her additional time. She was accommodated, but as the matter ground on it became apparent that she was making little effort to comply with timetables… I declined to allow further time" (at 27);
9. As to a determination with respect to the payment of counsels' fees, Pierce LCM had regard to the following: 1. The plaintiff's submission of 11 April, which included a table showing what the plaintiff contended to be "all the payments made to counsel" ("Table AA"). A copy of the table was extracted in the judgment (at 29); and 2. The first defendant's summary as to the allocation of monies, which included two tables: Table A (set out amounts paid by the plaintiff directly to counsel, as well as amounts paid by the plaintiff directly to the first defendant, as prepared by the plaintiff) and Table B (outlining "Payments to Barristers" and refers to "Proof of Payment" vis-à-vis "Exhibit 9", without reference to the source of payment to counsel (i.e. the first defendant or the plaintiff).
10. Pierce LCM proceeded to make observations with respect to the payment of counsels' fees in light of the submissions of the parties: 1. "[The plaintiff] says that by the [first defendant's] summary the [first defendant] is intentionally misleading the Court. She says that Table B identifies all the memos of fees provided by counsel to the [first defendant] but does not record payments by the [first defendant]. However, that is an incorrect submission because the table, as can be seen above, provides references to proof of payment. If all she meant to say was that counsel had been paid but perhaps by her personally or by other defendants rather than by [the first defendant], she does not say so. Moreover, the [first defendant's] summary… does not purport to say who paid counsel, but rather cites the table to show that there are no monies outstanding to counsel" (at 32); 2. As to the $15,000 paid to the first defendant on 23 March 2010 that the plaintiff contended concerned counsels' fees, his Honour found, with reference to Table A, "that the money came in originally for the [first defendant's] fees" and hence probably appeared in the first defendant's general ledger as opposed to the trust account. He also found: "the records and evidence do not show that the [first defendant's] trust account records were unreliable" (at 33). 3. As to amounts paid to counsel that do not appear in either Table A or B (or Table AA), his Honour also made reference to the probability of payments to counsel via the general account as opposed the trust account. His Honour found: I have reached a view that on the balance of probabilities neither have the defendants been charged for fees of counsel which were separately met by them, nor is there any amount related to counsels' fee unaccounted for by the plaintiff 1. As to direct payments made by the plaintiff to counsel: 1. Pierce LCM referred to the first defendant's submission that "a total of $69,969.00 [was] paid by [the plaintiff] of which $23,769.00 was paid by her directly to counsel. He then says that the total payments to counsel of all outstanding fees was $56,016.15, which he concludes means that the $13,952.50 deference (presumably sitting in trust), subject to the present determination of quantum, should be available for his fees" (at 34); 2. "The total sums paid to Mr Alexis, as appearing form Table B, come to about $32,000.00. The payment direct to Mr Alexis [by the plaintiff] on Table 1 [also referred to as Table A] only, at items 1, 2, 9, and 11, come to $26,400.00. It must follow that there were other payments made to Mr Alexis to bring the total described in Table B as having been paid to the sum of about $32,000.00" (at 35); 3. "It is extremely improbable that the extra amounts which must have been paid to Mr Alexis were paid by the defendants; given her attention to detail [the plaintiff] would certainly have produced a note of them if they had. It is therefore highly likely that those payments came from the [first defendant], whether paid from trust or from his trading account. As I said above, we know of at least one payment of $15,000.00 which very likely went through the trading account" (at 35); 4. As to direct payments made to Mr McKay, the plaintiff made a direct payment of $12,375.00, but the invoices record approximately $15,800, which matches the amount paid per Table B (at 35); and 5. "What all that boils down to is that counsel were paid, some payments must have been made beyond those set out in Table 1 [also referred to as Table A], and the difference can only have come from [the first defendant]" (at 35).
11. By the quantum decision, Pierce LCM made the following findings: 1. that of "the work set out in the first Scott Schedule, and subject to any payments that may have been made, the [first defendant] is entitled to succeed in an amount of $40,806.61, which excludes counsel's fees and disbursements, [being] items 259-262, 267,268, 270, 271 and 275"; 2. that the amount to be allowed for items in the supplementary schedule totalled $8,272.00; 3. that the first defendant was owed an amount of $402.50 for items 259-262, 267,268, 270, 271 and 275; and 4. that the first defendant would succeed in the sum of $49,481.11.
12. By the same note, his Honour directed: "[t]he parties can address costs and interest separately". No orders were entered on that occasion.

Disbursements, Interest and Costs

1. Following the quantum decision, the matter of "costs and interest" was dealt with on the papers.
2. The first defendant provided written submissions together with a spreadsheet listing invoice numbers and the items claimed for within each, as well as calculations of interest broken down by invoice.
3. The plaintiff was initially directed to provide her written submissions by 19 July 2017. An extension was sought and granted to 27 June 2017. A further extension of 4-6 weeks was sought and denied. Notwithstanding her unsuccessful application, the plaintiff emailed her "Written Final Submissions" (dated 4 July 2017) to the Chief Magistrate's Office on 5 July 2017 ("the plaintiff's written final submissions").
4. On 10 July 2017, Pierce LCM delivered a "note of reasons on disbursement, interest and costs" and, by the same note, pronounced orders.
5. As to the plaintiff's written final submissions, Pierce LCM confirmed that the Court did not have regard to them (at 2). He also referred to a subsequent email sent by the plaintiff to the Chief Magistrate's Office on 6 July 2017, which requested that Pierce LCM "take into account a number of arguments related to the 2015 Legal Profession Act. … [h]er request required confirmation from me that I would take those arguments into consideration. I did not take them into consideration… Without any application to re-open it was and is much too late in the day to have fresh legal arguments raised (in spite of the fact that there had been a passing reference to the new legislation in the course of the hearing)".
6. His Honour also noted: [The plaintiff] was given ample time to provide her submissions, and her failure to do so within the extended time (27th June) is unacceptable. There has to be an end to litigation. The additional four to six weeks she then sought is completely unacceptable. … The litigation has been very complex and has occupied a huge amount of time. A high proportion of the time used up was occasioned by [the plaintiff] having repeatedly ignored directions not to continue raising and repeating arguments which had been the subject of adverse rulings, and be her failure to couch her earlier submissions in a way that would address the Scott Schedule relating the [first defendant's] fees. Moreover, there was a later supplementary schedule provided by [the first defendant], and she missed the deadline to respond to it also, as a result of which I had regard only to what was put by [the first defendant]. [The plaintiff] has continued to send me emails, through the Chief Magistrate's Office, the last one being two days ago, 8th July.
7. After assessing the claims for disbursements, determining interest and correcting some errors of additions in the Scott Schedule, Pierce LCM pronounced judgment for the first defendant as follows (at 13): There will be judgment for [the first defendant] on the amount of professional costs as set out in the reasons on quantum, $49,481.11, plus disbursements as set out in these reasons, $3,345.94 and contractual interest as set out in the totals in blue in the appendix, the total of all those amounts being $65,750.90. The statutory post judgment interest will accrue from today. There will, of course, be judgment for the [Mr Slattery], [Dee-Tech] and [Bright Star] against the plaintiff.
8. The above figures as set out by Pierce LCM, due to a mathematical error discovered before the entry of orders, were subsequently reduced: namely, $49,481.11 to $47,119.61, which reduced the total amount from $65,750.90 to $63,389.40.
9. Thus, in respect of the first defendant's claim as to payment for the provision of legal services with respect to the Appeal Matter, a total of $63,389.40 was awarded to the first defendant (following a subsequent amendment, to rectify a mathematical error, to the calculation of professional costs).
10. Turning to costs, the Magistrate was of "no doubt that the [first defendant] is entitled to his costs against [the plaintiff]". He then proceeded to consider the effect of the various offers of settlement that had been made by the first defendant during the course of the proceedings. His Honour stated (at 14): Most of the early offers were to take amounts higher than the amount the plaintiff had succeeded on. But the offer of 23rd January, 2015, which was both a Rules and Calderbank offer, was to take $50,000. Although it was only open for four days, in my view that was a very reasonable offer and plainly a genuine offer of compromise. Applying UCPR 42.14, I will make an indemnity costs order in favour of the [first defendant] from 28th January, 2015. … On 20th September, 2016 the [first defendant] offered to take $35,000.00, which again was a Rules and Calderbank offer. It was open for six days. That was a most reasonable offer, and if I wrong in taking the view that the 2015 offer entitled the [first defendant] to indemnity costs I would certainly order them from 28th September, 2016.
11. The plaintiff was also ordered to pay "90% of the [first defendant's] costs to which [the first defendant] would otherwise be entitled".

Judgment Entered

1. Final orders were subsequently entered on 20 July 2017, as follows: TERMS OF JUDGMENT/ORDER Judgment: Rhonda Daily Slattery, First Defendant is to pay PAUL MERVYN FORDYCE trading as PMF Legal, First Plaintiff the sum of Claim amount: $63389.40 … TOTAL: $63389.40 Verdict for Plaintiff Judgment given for Plaintiff for $63389.40 (which includes contractual interest to date) Court Costs Professional Costs 1st Defendant (Mrs. Slattery) to pay Plaintiff's costs, on the ordinary basis up to and including 27.1.15, and thereafter on an indemnity basis Order, however, that the Plaintiff have only 90% of costs otherwise payable. All payable forthwith. Judgment for the 2nd, 3rd and 4th Defendants. [The above classification of the parties reflects their respective roles throughout the Local Court proceedings.]

The Costs Assessment

1. On 22 July 2016, following the liability decision and prior to the quantum hearing, the first defendant made an application for an assessment of costs with respect to the Taking of Accounts Matter ("the application"). For the purposes of the application, the first defendant was listed as "the costs applicant" and the plaintiff, together with the plaintiff's companies, as "the costs respondents".
2. The application was lodged in light of Pierce LCM's conclusion that the first defendant had not met its disclosure obligations, with respect to the second proposed agreement (namely, the Taking of Accounts Matter) and, in the result, his Honour remarked that the first defendant "will have to await assessment" as to the same.
3. The costs to be assessed were identified on the application as follows: Costs of acting for the Costs Respondent in relation to 2007/254642 in the Equity Division of the Supreme Court of New South Wales - being the taking of accounts in respect of claims by Neddam Holdings Pty Ltd - the landlord of the premises known as Unit 3, 3 Mandina Road, West Gosford NSW 2250.
4. The application also provided the costs assessor with an explanation as to the Local Court proceedings. First, it cited and attached the liability decision given on 12 October 2015. Second, it noted the quantum hearing fixed for 27 September 2016 (that was ultimately vacated and the proceedings adjourned to 19 October 2016). As to the latter, the following information was identified on the application as "further information that is relevant to the assessment of costs": … Magistrate Pierce has set down for quantum determination hearing by him on 27 September 2016 the question of which costs relate to the taking of accounts proceedings. His Honour will not determine if those amounts are payable or not. He will simply determine if those claimed costs should not form part of his judgment as to what costs the Cost Respondent, Rhonda Slattery, has to pay to the Costs Applicant. These proceedings are therefore necessary to make that determination. The decisions of the Costs Assessor need to be consistent with the determination of the Magistrate in that regard. The more appropriate course may be for the Cost Assessor to make this determination and then provide it in a form that can be tendered to the Magistrate. Given the wide ranging scope of objections by Rhonda Slattery to the costs claimed in the Local Court Proceedings, the course adopted here has been to include all costs and disbursements incurred in the appeal and the taking of accounts matter to avoid any errors being made.
5. On 25 July 2016, the first defendant wrote to the plaintiff, suggesting that the quantum hearing should be "held over" until the costs assessment had been completed. Following that communication, the plaintiff wrote to the then costs assessor, Mr Chris Plummer. By an email dated 15 August 2016, she advised that "[t]hese proceedings are continuing for final determination before the Court", and contended that the application should be dismissed. In the alternative, the plaintiff submitted that the application "should be stayed pending the conclusion of the Local Court Proceedings between the parties".
6. On 24 August 2016, the plaintiff wrote to the manager of the costs assessor. She again contended that "assessment should be stayed until final determination is reached in the Local Court matter". The manager responded to the plaintiff's letter that any stay of the application was a matter for the costs assessor.
7. On 1 September 2016, the first defendant wrote to the Mr Plummer, providing further explanation as to the quantum hearing and made a submission, in that light, as to the necessity of the costs assessment: [T]his matter should be concluded as quickly and as prudently as possible [as] we believe that an assessment of the Taking of Accounts matter is necessary. Once the assessment process is complete it will, by immense measure, curtail the quantum process in relation to the costs for the Appeal matter. Plainly, whatever costs are assessed as belonging to the Taking of Accounts matter will mean that the remainder of all other costs can be attributed to the Appeal matter, thereby resulting in very little need for the Local Court quantum hearing process.
8. On 9 September 2016, the application was assigned to an alternate costs assessor, Mr Bruce Bentley, due to the initial costs assessor, Mr Plummer, having a conflict of interest.
9. On 13 September 2016, the first defendant wrote to Mr Bentley to inquire whether he had received copies of all the relevant documents. The letter contained the following: There is some urgency to the matter as Magistrate Pierce in the Local Court has set down on 26 September 2016 for hearing 10 days of submissions and argument over the costs incurred in relation to what is called the "Appeal Matter"- which is not the subject of the costs assessment that has been referred to you, those being in relation to the "Taking of Accounts Matter". [Original emphasis.]
10. On 16 September 2016, Mr Bentley confirmed receipt of the first defendant's email but advised that "[t]he current position of the costs respondents is not so clear but it appears to be that I should not proceed to assess those costs".
11. On or around 21 September 2016, the first defendant applied to have the quantum hearing adjourned, pending the costs assessment. By email from the Chief Magistrate's Office, the parties were advised that the matter was listed for hearing, commencing on 19 October 2016, and that the first defendant's "request for a mention date for directions regarding the Costs Assessment has been refused. His Honour has indicated that he has no issue with the Costs Assessment & Local Court proceeding running at the same time".
12. On 22 September 2016, the first defendant wrote to Mr Bentley and provided further information in relation to the dispute in the Local Court and suggested the following: [T]hat prior to proceeding with the actual assessment process of the Taking of Accounts items, the Costs Assessor should differentiate the Disputed Items as being owed between the two matters (the Differentiation Process). This would give certainty as to exactly which items belong to which matter prior to proceeding with the Assessment and the Quantum Hearing processes. This would also certainly assist in alleviating an unnecessary wastage of court time.
13. The letter also enclosed a spreadsheet, referred to as the "Adapted Spreadsheet", which listed the items which required differentiation by the costs assessor.
14. On 30 September 2016, the Mr Bentley advised that he would proceed with the costs assessment if the proceedings before the Local Court were adjourned.
15. Between 11 October 2016 and 10 July 2017, the costs assessment remained stayed, with the first defendant providing updates to the costs assessor, over the course of that period, as to the status of the Local Court proceedings.
16. On 12 July 2017, following the delivery of reasons in the quantum hearing and the delivery of judgment, the first defendant wrote to the costs assessor requesting that the costs assessment process continue. A copy of the liability decision, the quantum decision and costs decision were enclosed, together with a copy of the Scott Schedule, the supplementary schedule and the disbursements schedule.
17. On 7 August 2017, the plaintiff filed a summons commencing appeal. A copy was sent to the costs assessor on 8 August 2017.
18. On 23 August 2017, in light of the decision of Pierce LCM, the costs assessor confirmed that he proposed to proceed with the costs assessment. By the same communication the costs assessor requested: If I am to proceed, I will require the applicant to prepare a single composite schedule of all individual items of billing claimed in respect of the Taking of Accounts matter, individually numbered and send it to me and the respondent.
19. On 29 August 2017, the plaintiff wrote to the costs assessor advising that her appeal was listed for hearing on 8 November 2017 and requested that he hold the matter in abeyance pending the appeal.
20. On 2 November 2017, Harrison J vacated the hearing date for the appeal on the basis that the matter was not ready.
21. On 14 November 2017, following the decision of Harrison J, the plaintiff wrote to the costs assessor advising of the vacation of the hearing date but maintained her request that he hold the assessment in abeyance pending the determination of the appeal and the first defendant's cross-appeal (filed on 28 August 2017).
22. On 16 November 2017, the costs assessor wrote to the parties advising that he was reluctant to continue to hold the file in abeyance and repeated the request set out in his letter dated 23 August 2017 (extracted above). The first defendant responded to the costs assessor by a letter dated 29 November 2017, requesting the costs assessor proceed with his determination and seeking some additional information regarding the nature of the schedule he required.
23. On 30 November 2017, the plaintiff wrote to the costs assessor stating that he was not at liberty to proceed with the assessment due to her appeal.
24. On 14 December 2017 the costs assessor wrote to the parties setting out his preliminary view that: 1. the costs of the Appeal Matter were not before him; 2. Magistrate Pierce's decision that the first defendant "had no agreement with [the plaintiff], or any of the other defendants, for the work in relation to the taking of accounts" and that "no disclosure was made by the applicant in relation to that work" in circumstances where his Honour decision in relation to that matters had not been appealed "creates a res judicata and issue estoppel with respect to this determination" and accordingly he "is unable to find that there is a costs agreement between the applicant and the respondents for the taking accounts work or that the applicant made proper disclosure in accordance with s 316 of the LPA in relation to that work"; and 3. nevertheless, the first defendant is entitled to costs of the Taking of Accounts Matter by virtue of s 319 of the LPA.
25. The costs assessor invited the parties to make submissions in relation to his preliminary views and requested the first defendant provide further documents.
26. The cost assessment, as at the hearing of this appeal, was yet to be completed.

THE APPEAL

1. The plaintiff appeals the decision of Pierce LCM to find her liable with respect to the First Costs Agreement and to pay indemnity costs from 23 January 2015.
2. By the further amended summons, the plaintiff seeks the following orders: 1. Appeal allowed. 2. Judgment and orders of the Court below be set aside against the plaintiff. 3. Judgment for the plaintiff against the first defendant. 4. Order that the first defendant pay the plaintiff's costs of and incidental to the entire hearing in the Court below. 5. Order that the first defendant pay the plaintiff's costs of and incidental to this appeal.

Grounds of Appeal

1. The grounds of appeal are set out below (with adjustment reflecting the parties' roles in these proceedings, as opposed to their respective roles in the Court below): 1. Pierce LCM erred in law, after the first defendant applied on 22 July 2016 for a costs assessment under s 352(1) of the LPA, by hearing and determining that part of the action in the Court below that related to the First Costs Agreement, as the costs which were the subject matter of that agreement were also the subject matter of the costs assessment. 2. Section 355(b) of the LPA prohibited the first defendant from maintaining the action in the Court below until the costs assessment had been completed. 3. The costs assessment has not been completed. 4. As a result, after 22 July 2016, the plaintiff was immune from suit in the Court below until the costs assessment is completed, and the Court below lacked jurisdiction to continue to hear the action in that court. 5. Further, or in the alternative, Pierce LCM erred in law by failing to determine the defence of payment pleaded by the plaintiff on the basis of evidence tendered and admissions made before him. In particular, His Honour failed to make any finding: 1. as to the total amount of all payments made by the plaintiff to the first defendant and/or to counsel; and 2. as to the total amount of counsel's fees payable. Accordingly, Pierce LCM failed to provide any reasons for finding that the plaintiff was not entitled to credit for the difference between the total amount of such payments and the total amount of counsel's fees payable. In the premises such failures amounted to errors of law. 1. Further, or in the alternative, Pierce LCM's order for indemnity costs was bad in law because the UCPR r 42.14 did not entitle him to make such an order on the basis of the Offer of Compromise dated 23 January 2015 made by the first defendant. 2. Pierce LCM erred in determining that he had jurisdiction to hear the matter as a result of his determination that the first defendant had made disclosure of costs to the plaintiff as required by the LPA.

Evidence

1. The Court received in evidence a substantial amount of documentary material, tendered by the first defendant without objection, as follows: 1. Affidavit of Mr Davor Dadic sworn 13 October 2017, annexing exhibit DD1 (consisting of three volumes - 1077 pages); and 2. Affidavit of Mr Davor Dadic sworn 14 February 2018, annexing exhibit DD2 (consisting of two volumes - 669 pages).
2. A further bundle of material was adduced by the respective parties, without objection, consisting of, inter alia, email correspondence from the Chief Magistrate's Office, correspondence with the costs assessor, as well as copies of exhibits to affidavits previously filed by the plaintiff (which were not separately marked for purpose of these proceedings).

The LPA

1. The LPA was repealed by s 167(a) of the Legal Profession Uniform Law Application Act 2014 (NSW) ("the Application Act") as of 1 July 2015. By s 4 of the Application Act, the Legal Profession Uniform Law set out in Sch 1 to the Legal Profession Uniform Law Application Act 2014 (Vic) applies as a law of the State of New South Wales and may be referred to as the "Legal Profession Uniform Law (NSW)" (and so applies as if it were an Act). The Legal Profession Uniform Law commenced on 1 July 2015 ("the commencement date").
2. The relevant transitional provisions under the Legal Profession Uniform Law are set out in Sch 4 of that Act. Clause 18 of Sch 4 is extracted below: 18 Client information and legal costs (1) Subject to subclause (2) - (a) Part 4.3 of this Law applies to a matter if the client first instructs the law practice on or after the commencement day; and (b) the provisions of the old legislation relating to legal costs (other than provisions prescribed by the local regulations) continue to apply to a matter if the client first instructed the law practice in the matter before the commencement day. (2) If a law practice is retained by another law practice on behalf of another client on or after the commencement day in relation to a matter in which the other law practice was retained by the client before the commencement day - (a) Part 4.3 of this Law does not apply in respect of the other law practice in relation to that matter; and (b) in that case the provisions of the old legislation relating to legal costs (other than provisions prescribed by the local regulations) continue to apply. (3) Until a Uniform Rule prescribing an amount for the purposes of section 174(4) of this Law takes effect, the lower threshold is $750 for those purposes. (4) Until a Uniform Rule prescribing an amount for the purposes of section 174(5) of this Law takes effect, the higher threshold is $3000 for those purposes.
3. For present purposes, in the light of cl 18(1)(b), as the plaintiff first instructed the first defendant prior to the commencement date of the Legal Profession Uniform Law, namely, in February 2010, the LPA, continues to apply to these proceedings.
4. Division 9 of Pt 2.4 of the LPA is entitled "Practice as a barrister or solicitor". Section 83(3) falls under that division and provides as follows: 83 Client access … (3) Contracts A barrister or solicitor may enter into a contract for the provision of services with a client or with another legal practitioner. The barrister or solicitor may accordingly sue and be sued in relation to the contract.
5. A client is defined in s 4(1) of the LPA as including "a person to whom or for whom legal services are provided".
6. Part 3.2 of the LPA provides for the regulation of costs disclosure and assessment concerning legal services. Section 301 provides that the purpose of the LPA, in that respect, is as follows: (a) to provide for law practices to make disclosures to clients regarding legal costs, (b) to regulate the making of costs agreements in respect of legal services, including conditional costs agreements, (c) to regulate the billing of costs for legal services, (d) to provide a mechanism for the assessment of legal costs and the setting aside of certain costs agreements.
7. Legal costs are defined in s 4(1) to mean "amounts that a person has been or may be charged by, or is or may become liable to pay to, a law practice for the provision of legal services including disbursements but not including interest".
8. Section 309 deals with mandatory disclosures to a client by a legal practice. Section 309(1)(c) provides: (1) A law practice must disclose to a client in accordance with this Division: … (c) an estimate of the total legal costs if reasonably practicable or, if that is not reasonably practicable, a range of estimates of the total legal costs and an explanation of the major variables that will affect the calculation of those costs, …
9. It is also appropriate, having regard to some of the grounds of appeal to make reference to ss 316 and 317, which are in the following terms: 316 Ongoing obligation to disclose A law practice must, in writing, disclose to a client any substantial change to anything included in a disclosure already made under this Division as soon as is reasonably practicable after the law practice becomes aware of that change. 317 Effect of failure to disclose (1) Postponement of payment of legal costs until assessed If a law practice does not disclose to a client or an associated third party payer anything required by this Division to be disclosed, the client or associated third party payer (as the case may be) need not pay the legal costs unless they have been assessed under Division 11. Note. Under section 369, the costs of an assessment in these circumstances are generally payable by the law practice. (2) Bar on recovering proceedings until legal costs assessed A law practice that does not disclose to a client or an associated third party payer anything required by this Division to be disclosed may not maintain proceedings against the client or associated third party payer (as the case may be) for the recovery of legal costs unless the costs have been assessed under Division 11. (3) Setting costs agreement aside If a law practice does not disclose to a client or an associated third party payer anything required by this Division to be disclosed and the client or associated third party payer has entered into a costs agreement with the law practice, the client or associated third party payer may also apply under section 328 for the costs agreement to be set aside. (4) Reduction of legal costs on assessment If a law practice does not disclose to a client or an associated third party payer anything required by this Division to be disclosed, then, on an assessment of the relevant legal costs, the amount of the costs may be reduced by an amount considered by the costs assessor to be proportionate to the seriousness of the failure to disclose. (5) Effect on legal costs where law practice retains another law practice that fails to disclose If a law practice retains another law practice on behalf of a client and the first law practice fails to disclose something to the client solely because the retained law practice failed to disclose relevant information to the first law practice as required by section 310 (2), then subsections (1)-(4): (a) do not apply to the legal costs owing to the first law practice on account of legal services provided by it, to the extent that the non-disclosure by the first law practice was caused by the failure of the retained law practice to disclose the relevant information, and (b) do apply to the legal costs owing to the retained law practice. …
10. Division 4 of Pt 3.2 provided for the recovery of legal costs. Given recovery was sought pursuant to a costs agreement said to constitute a contract, reference should be made to s 319(1)(b), which is in the following terms: 319 On what basis are legal costs recoverable? (1) Subject to the provisions of this Part, legal costs are recoverable: … (b) if paragraph (a) does not apply, under a costs agreement made in accordance with Division 5 or the corresponding provisions of a corresponding law, …
11. Division 5 concerns costs agreements. Section 322(1)(a) provides for the making of such agreements: 322 Making costs agreements (1) A costs agreement may be made: (a) between a client and a law practice retained by the client, …
12. Section 326 deals with the effect of a costs agreement as follows: 326 Effect of costs agreement Subject to this Division and Division 11, a costs agreement may be enforced in the same way as any other contract.
13. Division 11 of Pt 3.2 concerns costs assessment. Section 352(1) and (3) appear in Subdiv 1 and provides: 352 Application for costs assessment by law practice giving bill (1) A law practice that has given a bill may apply to the Manager, Costs Assessment for an assessment of the whole or any part of the legal costs to which the bill relates. … (3) An application for a costs assessment may be made even if the legal costs have been wholly or partly paid.
14. Section 354 deals with how to make an application for costs assessment. Subsections (1) and (2) provides as follows: (1) An application for a costs assessment: (a) must be made in accordance with the regulations (if any), and (b) subject to subsection (4), must be accompanied by the fee prescribed by the regulations. (2) The application must authorise a costs assessor to have access to, and to inspect, all documents of the applicant that are held by the applicant, or by any law practice, Australian legal practitioner or Australian-registered foreign lawyer concerned, in respect of the matter to which the application relates.
15. Section 355 falls within the same division and is central to grounds 1-4. That provision is in the following terms: 355 Consequences of application If an application for a costs assessment is made in accordance with this Division: (a) the costs assessment must take place without any money being paid into court on account of the legal costs the subject of the application, and (b) the law practice must not commence or maintain any proceedings to recover the legal costs until the costs assessment has been completed.
16. Finally, s 366 falls within Div 11 and provides: 366 Court or tribunal may determine matters This Division does not limit any power of a court or a tribunal to determine in any particular case the amount of costs payable or that the amount of the costs is to be determined on an indemnity basis.

The Local Court Act

1. Section 39(1) of the Local Court Act provides an appeal is a right to a party who is dissatisfied with a judgment or order of the Local Court to this Court "on a question of law".
2. Such an appeal must be predicated upon "an identified question of law" or "an erroneous answer in respect of a question of law": see B & L Linings Pty Ltd v Chief Commissioner of State Revenue (2008) 74 NSWLR 481; [2008] NSWCA 187 at [75] (per Allsop P) and [150] (per Basten JA).
3. It may be observed, an appeal lies to the Supreme Court against a judgment or order of the Local Court sitting in its General Division, by leave, on a ground which involves a question of mixed law and fact (s 40(1)) or which is an interlocutory judgment or order, a consent judgment or order or an order for costs: s 40(2). That provision is in the following terms: 40 Appeals requiring leave (1) A party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court on a ground that involves a question of mixed law and fact may appeal to the Supreme Court but only by leave of the Supreme Court. (2) A party to proceedings before the Court sitting in its General Division who is dissatisfied with any of the following judgments or orders of the Court may appeal to the Supreme Court, but only by leave of the Supreme Court: (a) an interlocutory judgment or order, (b) a judgment or order made with the consent of the parties, (c) an order as to costs.
4. Pursuant to s 41(1) of the Local Court Act, the Supreme Court may determine an appeal made under ss 39(1) or 40: (a) by varying the terms of the judgment or order, or (b) by setting aside the judgment or order, or (c) by setting aside the judgment or order and remitting the matter to the Local Court for determination in accordance with the Supreme Court's directions, or (d) by dismissing the appeal.
5. Sections 29, 29A and 30(1) of the Local Court Act provide: 29 Jurisdictional limit of Court (1) For the purposes of this Part, the jurisdictional limit of the Court is: (a) $100,000, when sitting in its General Division, and (b) $10,000, when sitting in its Small Claims Division. (2) However, the jurisdictional limit of the Court, when sitting in its General Division, in relation to a claim for damages arising from personal injury or death is $60,000. 29A Money claim - meaning In this Part, money claim means a claim for recovery of any debt, demand or damages (whether liquidated or unliquidated). 30 Conferral of jurisdiction (1) Subject to this Part, the Court sitting in its General Division has jurisdiction to hear and determine: (a) proceedings on any money claim, so long as the amount claimed, whether on a balance of account or after an admitted set-off or otherwise, does not exceed the jurisdictional limit of the Court when sitting in that Division, and (b) proceedings to recover detained goods, or to recover the assessed value of detained goods, so long as the value of the goods, together with the amount of any consequential damages claimed for their detention, does not exceed the jurisdictional limit of the Court when sitting in that Division, and (b1) proceedings involving company title home unit disputes under section 34A, and (b2) substituted proceedings within the meaning of Part 3A of the Civil and Administrative Tribunal Act 2013, so long as the amount of any money claim, or the value of any goods or property, to which the proceedings relate does not exceed the jurisdictional limit of the Court when sitting in that Division, and (c) proceedings that, pursuant to any other Act, are required to be dealt with by the Court sitting in that Division.

The UCPR

1. The question of leave to appeal is also addressed in Pt 50 Div 4 of the UCPR. Rules 50.12 and 50.13 are extracted below: 50.12 Leave to appeal (1) A summons seeking leave to appeal must be filed: (a) within 28 days after the material date, or (b) if the appeal relates to the decision of a judicial officer, within such further time as the judicial officer may allow so long as the application for such further time is filed within 28 days after the material date, or (c) within such further time as the higher court may allow. (2) An application for an extension of time under subrule (1) (c) must form part of the summons seeking leave to appeal. (3) The summons must be in the approved form and must contain a statement as to: (a) whether the appeal relates to the whole or part only, and what part, of the decision of the court below, and (b) what decision the plaintiff seeks in place of the decision of the court below. (4) The summons must also contain a statement of: (a) the nature of the case, and (b) the reasons why leave should be given, and (c) if applicable, the reasons why time to apply for leave should be extended, setting out briefly but specifically the grounds relied on in support of the appeal including, in particular, any grounds on which it is contended that there is an error of law in the decision of the court below. (5) This rule does not apply to an appeal under section 39 of the Victims Support and Rehabilitation Act 1996. Note. See instead rule 50.23. 50.13 Leave to cross-appeal (1) A cross-summons seeking leave to cross-appeal must be filed: (a) within 14 days after service of the summons commencing the appeal or the summons seeking leave to appeal, or (b) within such further time as the higher court may allow. (2) An application for an extension of time under subrule (1) (b) must form part of the summons commencing the appeal. (3) The cross-summons must contain a statement as to: (a) whether the cross-appeal relates to the whole or part only, and what part, of the decision of the court below, and (b) what decision the defendant seeks in place of the decision of the court below. (4) The cross-summons must also contain a statement of: (a) the nature of the case, and (b) the reasons why leave should be given, and (c) if applicable, the reasons why time to apply for leave should be extended, setting out briefly but specifically the grounds relied on in support of the cross-appeal including, in particular, any grounds on which it is contended that there is an error of law in the decision of the court below.
2. The requirements for the bringing of a cross-appeal are set out in r 50.10. That rule provides for the following: 50.10 Cross-appeal (1) If a defendant to an appeal wishes to appeal from the whole or part of a decision, that defendant must file a cross-summons. (2) The defendant must file the cross-summons: (a) within 28 days after service of the summons commencing the appeal on the defendant, or (b) if the appeal relates to the decision of a judicial officer, within such further time as the judicial officer may allow so long as the application for such further time is filed within 28 days after service of the summons commencing the appeal on the defendant, or (c) within such further time as the higher court may allow. (3) An application for an extension of time under subrule (2) (c) must form part of the cross-summons. (4) Subject to subrules (1), (2) and (3), Division 2 applies to the cross-appeal and cross-summons. (5) This rule does not apply to proceedings that are entered in the Commercial List in the Supreme Court.
3. I will now turn to a summary of the parties' submission with respect to each ground. The issue of leave to appeal will be dealt with separately in that respect, as well as issues concerned with whether the appeals were commenced within time and, if not, whether time should be extended.

Grounds 1-4

1. For the purposes of the appeal, the submissions advanced by the parties dealing with grounds 1-4 by and large did not distinguish between the respective grounds and constituted a composite submission. I will approach the summary of the parties' submissions in the same way, even though the grounds of appeal do potentially raise different issues in law.
2. The plaintiff advanced the following general submissions in support of these grounds: 1. The application lodged by the first defendant on 22 July 2016 for costs assessment was made pursuant to Div 11 of the LPA; this was not a point of dispute between the parties. 2. The relevant provision for the purposes of grounds 1-4 is s 355(b), namely, following an application for a costs assessment being made in accordance with Div 11 of the LPA, "the law practice must not commence or maintain any proceedings to recover the legal costs until the costs assessment has been completed". It was contended that the application before the costs assessor concerned the costs associated with both the Appeal Matter and the Taking of Accounts Matter. That contention was supported with reference to the first defendant's provision of "all of the costs" associated the two matters and inviting "a differentiation process of differentiating between the costs". It was submitted that the provision of material, which related to two separate matters, invited the costs assessor to allow them in the costs assessment. Thus, upon that analysis, it was contended s 355(b) was engaged and, it followed, if any of the costs the subject of the costs assessment were sought to be recovered in the Local Court proceedings, then pursuant to that provision, those proceedings could not be maintained. 3. The plaintiff contended that a jurisdictional proposition was enlivened. It was submitted that, in proceedings in which s 355(b) is engaged, "then the Court in which the proceedings are taking place has no jurisdiction to hear the matter because the matter must not be … maintained". 4. During the course of oral submissions, whilst maintaining the argument with respect to jurisdiction, a second and alternative proposition was also advanced: that the magistrate acted beyond his power vis-à-vis the costs order made whilst the costs assessment was being undertaken. 5. The plaintiff advanced its submissions on what it described as the narrow and wide construction of the section, with the former concerning the power of the magistrate and the latter the jurisdiction of the Court below. Those constructions were as follows: 1. First, adopting a narrow construction, if accepted the provision applied to the first defendant, being the party who instituted proceedings in the Local Court, it was submitted that the first defendant "was not entitled to continue to seek the relief and the magistrate did not have the power to grant the relief" whilst the costs assessment was undertaken. 2. In alternative, upon a wider construction, if accepted the provision applied to a person who commences proceedings or maintains the proceedings in any court, it was submitted that it followed, "[w]hen one considers that a person can't commence or maintain, that must mean that the Court does not have authority to decide… it has no jurisdiction to hear and determine it". Reference, in this respect, was also made to the judgment of McCallum J in Colbron v Freeman [2014] NSWSC 1210 ("Colbron") (at [7]), which was described as "lend[ing] weight" to the jurisdictional argument (although, it was conceded, the judgment provided minimal assistance as to the complex issues raised before this Court). 1. As to the proper construction of the provision, reference was also made to the decision of Elkaim SC DCJ in O'Connor v Soul [2015] NSWDC 294 ("O'Connor"). That District Court decision concerned s 317 of the LPA and, whilst not binding precedent, it was submitted to be relevant by analogy (particularly in an area of law within which there is a "scarcity" of authority) for the following reasons: 1. Section 317 of the LPA is in similar terms to s 355: Bar on recovering proceedings until legal costs assessed A law practice that does not disclose to a client or an associated third party payer anything required by this Division to be disclosed may not maintain proceedings against the client or associated third party payer (as the case may be) for the recovery of legal costs unless the costs have been assessed under Division 11. 1. Elkaim SC DCJ considered the meaning of "maintain" at [11]-[12]: [11] … It was submitted by the plaintiff that the Master's comments in paragraphs 25 and 26 involve a construction by which the word 'maintain' is taken to include commencement of proceedings. The plaintiff submitted that this could not be so on any interpretation of the word 'maintain'. The relevant paragraph in Martinez is paragraph 6. [12] The plaintiff was at pains to urge upon me that the word 'maintain' did not mean that proceedings could not be commenced. In support of this submission the plaintiff made the following points: (1) As a matter of simple interpretation 'maintain' did not mean 'commence'. (2) If the legislature had wished to prohibit the commencement of proceedings it would have been specifically stated. (3) Other sections of the LPA supported the plaintiff's contentions. For example, Section 331 refers to commencement of legal proceedings, as does Section 355. (4) It was pointed out that Section 331(1) gives an express power to commence proceedings and then in subsection (4), this applies even where there has been no costs agreement. If proceedings were commenced without there being a costs agreement the proceedings would be stayed until the issue of a costs certificate under Section 368. (5) In relation to Section 355 it was submitted that subsection (b) specifically contemplates proceedings being commenced after an application has been made for a costs assessment. It was submitted that the phrase "must not commence or maintain" contemplated proceedings being commenced after an application for assessment. (6) UCPR 36.10(1)(a) and (b) supported the plaintiff's position because they contemplated a costs assessor's certificate being filed in existing proceedings. Support for the submission was derived from the decision of McCallum J in Coshott v Barry [2012] NSWC 850 at paragraph 47. 1. His Honour found that because s 317 only said "maintain", that provision, therefore, did not prohibit "commencement". The plaintiff sought the Court as presently constituted adopt, by analogy, Elkaim SC DCJ's approach at [17]: [17] The issue, in my view, is not whether 'maintain' means 'commence', rather it is whether a proceeding which has been commenced can remain on foot while the condition remains outstanding. In other words, the real question is whether there is a consequence of not being able to maintain proceedings rather than whether or not they can be filed in the first place. I think this interpretation is consistent with the definition provided by the plaintiff from the Macquarie Dictionary in that proceedings cannot be kept "in existence" as long as there is a contravention of Section 317(2). 1. If the Court was minded to accept that the consequence of a proceeding not being "maintainable" is that it is not permitted to be in existence, then the plaintiff contended: "the magistrate didn't have the power to hear it, not just not to pronounce orders, but didn't have the power to allow it to continue in existence and that… seems to be more a matter going to the root of his authority to decide or his jurisdiction". However, the plaintiff ultimately relied, as earlier mentioned, upon both strains of argument with respect to power (the narrow construction) and jurisdiction (the wider construction). 2. The issues of jurisdiction and power were raised in written submission before Pierce LCM dated 17 May and 4 July 2017, respectively, but, it was submitted, that his Honour did not address those questions. 3. During the course of oral submissions, it was put to the plaintiff that the effect of the jurisdictional proposition, as framed by the plaintiff, was that the Local Court proceedings should properly "hold over" until the determination of the costs assessment. The plaintiff, with respect, rejected that summation. Counsel for the plaintiff clarified its position: "[t]here is no basis for the [first defendant] to commence or maintain these proceedings". In this respect, counsel for the plaintiff made reference to the plaintiff's "Written Final Submissions" dated 4 July 2017 (which were provided, albeit out of time, to Pierce LCM prior to his final determination in the Local Court proceedings).
3. The first defendant's submissions were as follows: 1. Section 355 does not remove the Court's jurisdiction to determine the contractual entitlement of a solicitor to be paid his fees or to determine the reasonableness of those fees. Reference was made, in that respect, to the Court of Appeal decision in Branson v Tucker [2012] NSWCA 310. That decision, it was submitted, confirmed that the Courts generally retain a jurisdiction to determine disputes between a barrister and client (and by extension, it was submitted, "a solicitor and client"). It follows, the Court has a jurisdiction to determine legal costs and "the costs assessment regime does not oust that jurisdiction". It was contended that such an operation was not intended by the provision, which would more appropriately be "raised in defence to the claim but it is not something which removes the court's jurisdiction to proceed". 2. It was contended, that the matter before the Local Court is not jurisdictional because s 355(b) is not engaged in the matter as "the costs assessment was never in relation to the recovery of costs that were the subject of the Local Court proceedings". Reliance, in this respect, was place upon the following facts: 1. On 22 July 2016, Pierce LCM delivered the liability decision and that decision made clear that the first defendant's claim for legal costs with respect to the Taking of Accounts Matter was rejected and thereby dismissed. 2. Notwithstanding the decision of Pierce LCM, by virtue of s 319 of the LPA, the first defendant was entitled to pursue costs of the Taking of Accounts Matter through costs assessment and commenced to do so. 3. At no time did the first defendant "commence or maintain any proceedings" to recover legal costs which were the subject of an application for costs assessment. The only proceedings it continued to maintain after lodging the application for assessment were the Local Court proceedings for the costs of the Appeal Matter, namely, the quantum hearing. 1. Further, as to the plaintiff's submission that the "differentiation process" before the costs assessor required an assessment of the costs of the Appeal Matter and the Taking of Accounts Matter, it was contended that was an incorrect characterisation of the task before him for the following reasons: 1. The application and subsequent correspondence by the first defendant to the costs assessor made clear that the legal costs the subject of the application were exclusively the costs of the Taking of Accounts Matter. 2. The first defendant instructed the costs assessor, "that prior to proceeding with the actual assessment process of the Taking of Accounts items", he should undertake the differentiation process. 3. Further, in the preliminary view of the costs assessor, the parties were advised that the costs of the Appeal Matter were not before the costs assessor. 4. Reference was also made to the task a costs assessor is required to undertake as set out at s 363 of the LPA, namely, "the costs assessor must consider [inter alia] … the fairness and reasonableness of the amount of legal costs in relation to the work". 1. As to the proper construction of s 355, the first defendant made the following submission: 1. Turning to operation of the provision: "it is simply something which the [first] defendant, who has been requesting the money but is the subject of the costs assessment, can call that in aid to prevent the proceedings from being maintained against them so they could raise it in a defence, they could seek to have the proceedings stayed pending the finalisation of the costs assessment". 2. Thus, in the circumstances where the proceedings were already on foot, the next step is to consider the second part of the provision, namely, "maintain[ing] any proceedings… until the costs assessment has been completed". It was submitted, the provision "is something that simply can be called in aid to defend those proceedings or seek some other relief, perhaps to have them stayed". Reference, in that respect, was made to the relief sought in O'Connor. The facts of that case were also distinguished from the present matter, namely, in O'Connor relief was sought by a notice of motion properly brought as opposed to "a situation where submissions are made late in the day with no relief sought from the Local Court in respect of it". 3. It was also submitted, by the use of the word "maintain" (in addition to "commence") in s 355, if the proceedings did become governed by s 355 by means of an application for a costs assessment, they did not become, as a matter of construction, a nullity. 1. Reliance was also placed upon the conduct of the plaintiff, with respect to grounds 1-4, as defeating the appeal: 1. Any jurisdictional issue should have been raised by the plaintiff at the time of the first defendant's filing of the application for costs assessment. It was submitted that issue was first raised before Pierce LCM in a submission dated 4 July 2017, which was after the completion of the quantum hearing and the day before Pierce LCM was initially scheduled to deliver his reasons on 5 July 2017. Further, the issue was not raised in an appropriate form, for example: "by way of a notice of motion or some amendment to her defence". 2. It was open to the plaintiff to rely on the jurisdictional proposition as a defence to the ongoing claim or in aid of the proceedings being stayed, the very course which the first defendant had contended for and the plaintiff repeatedly resisted. Reference was made to, inter alia, the plaintiff's correspondence to the costs assessor and the manager to the costs assessor, by which she expressed she wanted the Local Court proceedings to proceed and requested the costs assessment process, which she described as "an abuse of process", be stayed or dismissed. 3. In light of the above conduct, it was contended, the plaintiff's claim that the Local Court proceedings should not have been maintained in the face of the assessment is to approbate and reprobate. 1. A submission with respect to estoppel was also advanced. Reference, in this respect, was made to the Court of Appeal decision in Coshott v Barry [2015] NSWCA 257 (at [96]), in particular, as to issue that "there can be no estoppel in the face of that statute" and the Court of Appeal's brief consideration of "whether a statute has the effect of precluding an estoppel… [which, it was observed,] must turn on a consideration of the relevant legislation". In light of aforementioned conduct of the plaintiff, it was submitted: "If the statute had the effect that there was no jurisdiction in the court at that point in time, no matter what her actions were we could not raise an estoppel. But that's not what's actually occurring in this case because there is no removal of the jurisdiction of the court". 2. Finally, it was submitted, if the appeal were to succeed the perverse result would be that, notwithstanding the liability decision with respect to the Appeal Matter, the costs of the Appeal Matter "would be wholly lost to PMF Legal who are now out of time to apply for an assessment of those costs".
4. In reply the first defendant's contentions, the plaintiff made the following submissions: 1. Turning to the contentions that the plaintiff was "estopped" because of a failure to raise an argument under s 355 of the LPA and that the plaintiff "approbated and reprobated", the plaintiff contended that both arguments were immaterial to the issue of jurisdiction. The plaintiff relied upon its written submissions and provided brief elaboration during oral submissions. 1. First, as to the argument the plaintiff is estopped from raising the jurisdictional proposition, it was submitted that an estoppel cannot lie against a statutory prohibition. Reliance, in that respect, was placed upon the authority of Minister for Immigration & Ethnic Affairs v Polat (1995) 57 FCR 98. In that case, Davies and Branson JJ observed: "[e]stoppel will not operate so as to contradict a statute or to extend the authority of a decision-maker beyond that given by statute" (at 403). A related principle is that "a court of limited jurisdiction cannot acquire additional jurisdiction by estoppel": Air Tahiti Nui Pty Ltd v McKenzie [2009] NSWCA 429 at [61]. Further, the plaintiff submitted that jurisdiction cannot be conferred by agreement and referred to the following authorities: Australian Education Union v Lawler [2008] FCAFC 135; Neil v Legal Profession Complaints Committee [2011] WASCA 48 and Pantorno v The Queen (1989) 166 CLR 466; [1989] HCA 18. 2. Thus, in light of the above authorities, it was contended an estoppel could not be raised against the provision of the LPA and, further, the conduct of either party could not impact upon the jurisdiction of the Court. The plaintiff emphasised, the relevance of s 355 of the LPA to the jurisdiction of the Local Court "is determined by whether it is engaged or not and that the conduct of the party… cannot give the Court jurisdiction if it did not have it". 3. Second, as to the argument of approbation and reprobation, whilst not conceding the relevance of that submission to the proceedings, it was submitted the description the plaintiff "changed her mind" might be "more accurate". However, counsel for the plaintiff contended, nonetheless, "that is an immaterial consideration and it would be erroneous to consider that conduct in the context of asking whether section 355 [was] engaged and whether the Court had jurisdiction to hear the claim once the application for assessment has been made". 1. As to the proper purpose of provision, the plaintiff contended it operated as an "unqualified prohibition" to prevent any inconsistency that may arise in circumstances where "the costs assessor may have allocated to the taking of accounts matter costs which the magistrate at the very same time allocated to the appeal matter". Further, as to the approach to be adopted by the Court in its consideration, it was submitted: The question is not: What happened after and can it be relevant? The question is: Was the section engaged and what is the consequence? The matters occurred on costs assessment are relevant to demonstrate to the Court that the section was engaged, but not to disengage the section, because no harm was done, it is said, in the costs assessment. 1. Finally, as to the contended "prejudice and unfairness" that would arise if the appeal succeeded, the plaintiff turned to the conduct of the first defendant and submitted, "The first choice was to sue four years after the limitation period arose and the second choice was to go to costs assessment whilst the Local Court proceedings were still going". It was submitted that the fact it was open to the first defendant to seek costs assessment prior to litigation is a relevant consideration "because in a sense it offsets the complaints of unfairness that are raised by [the first defendant]".

Ground 5

1. Ground 5 is expressed in terms of a failure by Pierce LCM to determine a defence raised by the plaintiff in the proceedings below. On the face of the ground and as developed in the submissions advanced on behalf of the plaintiff in the appeal the attack upon the quantum decision, in this respect, was that Pierce LCM had failed to address the submissions advanced by the plaintiff concerning discount or deduction required for payments made by the plaintiff to the first defendant or to counsel to such an extent that Pierce LCM had failed to exercise his jurisdiction. In this light, it is not clear how the second component to the ground vis-à-vis reasons should be then understood, particularly when introduced by the word "Accordingly". It is difficult to see how the issue of inadequate reasons might arise in the context of a ground which pleads that there was a failure to deal with a defence constituting a failure to exercise jurisdiction to determine an issue raised by a party in that way. The pleading for this ground did not involve the failure to adequately address the issue of defence of payment.
2. Three brief additional observations may be made. The first is that the plaintiff did not explain what payments were made by her to the first defendant, which were not taken into account by Pierce LCM. Nor was it explained what the difference was between sub-paras (a) and (b) of the ground, insofar as it concerned counsels' fees.
3. Secondly, whilst not expressly pleaded in the ground, it was also contended that Pierce LCM failed to exclude in the assessment of quantum (and orders made accordingly) the costs or payments arising in the Taking of Accounts Matter.
4. Thirdly, there was, however, no pleading that, if Pierce LCM did provide discount at whatever level, as to the matters referred to in ground 5, that the determination made was erroneous.
5. As to the failure to allow discounts for payments to the first defendant and counsels' fees, the plaintiff made reference to "unchallenged" factual evidence listed in paras 60-62 of the plaintiff's written submissions, which included a list of payments made by the plaintiff to the first defendant and counsel. That material, it was accepted, had no bearing upon the contended error of law. Rather it was submitted, it served to demonstrate there was more than a de minimis proposition and the issue was of substance to the proceedings. Thus, Pierce LCM was required to resolve it and erred in law by failing to do so. However, the submission did not make abundantly clear just how the judgments below were deficient in that respect.
6. As to the contentions made with respect to the Taking of Accounts Matter, which was described as the "fundamental" error, reference was made to the liability and quantum decisions of Pierce LCM. In the liability decision, Pierce LCM said: "the amount for which [the first defendant] might succeed is the total of his invoices appearing on the table and related to the appeal and stay … less payments made and credit given attributable to that matter rather than the taking of accounts matter" (original emphasis). This task, it was contended, was not carried out in either of the decisions, with respect to the quantum hearing, that followed. In particular, that contention was supported with reference to the quantum decision and the absence of any evidence of delineation between the two matters. The plaintiff submitted such an error constituted an error of or around $20,000.
7. During oral submissions, counsel for the first defendant expressed confusion as to the ground. The primary submission raised, in this respect, concerned the appeal being made out of time and without leave (which I will return to under a separate heading). The first defendant also contended, notwithstanding the aforementioned asserted errors, that the ground should nonetheless be dismissed as it appears to essentially "wrong in fact".
8. Turning to the quantum decision, it was submitted that Pierce LCM devoted over 8 pages of his decision setting out his consideration of counsel's invoices and payments made and received by the first defendant. An example was provided (at 36): [S]ome funds for counsel came from [the first defendant] ... and not all by the [plaintiff, etc]. It must also be the case that [the plaintiff's] figures showing what she understood to be paid to counsel, particularly at table 1, are incorrect - in that counsel was paid more than the total of these amounts. [The first defendant] has therefore defused any suggestion by the [plaintiff, etc] that some of the monies paid by them towards counsels' fees were wrongly diverted to him... For the reasons set out above there will be no credit against the fees for which [the first defendant] succeeds deriving from the payments said by [the plaintiff] to have been made by her … and not accounted for.
9. Counsel for the first defendant accepted that Pierce LCM's remarks, in that respect, "[are] not necessarily the most clear… but nevertheless he has clearly considered the payments, what the evidence showed in terms of the payments made, what the evidence showed in terms of the invoices that were rendered by counsel and rendered by [the first defendant], which listed what counsel's fees were". It was also submitted "there has been no attempt by [the plaintiff] to now explain to your Honour where the error lies in his decision".
10. In written submissions in reply, the plaintiff submitted: "[a] failure to deal with a pleaded defence is a failure to exercise jurisdiction and is an error of law. It is not the case that the Magistrate dealt with payments in relation to the Taking of Accounts matter but made incorrect finding of fact: he failed to make any findings at all in relation to the amounts paid for the Taking of Accounts matter, a matter which was, by the October 2015 decision, outside of the case before him". The failure to undertake that task, it was submitted, was a legal error - not a factual one.

Ground 6

1. By ground 6, the plaintiff appealed against the indemnity costs order of Pierce LCM, namely, that the plaintiff pay the first defendant's costs, on an indemnity basis from 28 January 2015. It was pleaded: Further, or in the alternative, Pierce LCM's order for indemnity costs was bad in law because UCPR r 42.14 did not entitle him to make it on the basis of the Offer of Compromise dated 23 January 2015 made by the first defendant.
2. The offer of compromise upon which Pierce LCM awarded indemnity costs (it was submitted that his Honour also classified the letter as a Calderbank offer) was dated 23 January 2015. It is extracted below: 1. That a Consent Judgment be entered into in favour of the Plaintiff as against the First, Third and Fourth Defendants in the sum of $50,000.00 within fourteen days from 27 January 2015. 2. The proceedings against the Second Defendant are discontinued with no order as to costs in the event that said sum of $50,000.00 is paid within fourteen days of 27 January 2015.
3. His Honour described the it as "a very reasonable offer and plainly a genuine offer of compromise" and made an indemnity costs order pursuant to r 42.14.
4. Rule 42.14 of the UCPR applies in circumstances where "[an] offer is made by the plaintiff, but not accepted by the defendant, and the plaintiff obtains an order or judgment on the claim no less favourable to the plaintiff than the terms of the offer". Rule 42.14(2) set out, inter alia, the entitlement to indemnity costs as follows: (2) Unless the court orders otherwise, the plaintiff is entitled to an order against the defendant for the plaintiff's costs in respect of the claim: (a) assessed on the ordinary basis up to the time from which those costs are to be assessed on an indemnity basis under paragraph (b), and (b) assessed on an indemnity basis: (i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and (ii) if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made.
5. As to this ground of appeal, the plaintiff contended Pierce LCM made a House v The King error, namely, that his Honour purported to award indemnity costs based upon the strength of a "UCPR compliant offer of compromise" - as opposed to the strength of a Calderbank letter or any behaviour of the plaintiff in the Local Court. The plaintiff submitted, in this respect, "the jurisdiction to award indemnity costs is only ever engaged by the outcome for the successful party being no less favourable, or no worse than the offer". Further, such a determination as to the favourability of an offer requires, it was contended, "taking all the terms of the offer into account, not simply monetary offer". In particular, the plaintiff noted the offer sought judgment be entered against three parties, whereas by the final outcome, the plaintiff only had judgment entered against the plaintiff. Thus, the outcome was "less favourable" than the terms of the offer made by the first defendant, as only the plaintiff was ultimately held to be liable for costs (as opposed to being jointly liable with the plaintiff's companies and Mr Slattery).
6. During oral submissions, counsel for the plaintiff confirmed that no submissions as to indemnity costs were advanced by the plaintiff to Pierce LCM. As earlier mentioned, the plaintiff was provided the opportunity to provide written submissions, following the grant of an extension of time, by 27 June 2017. However, the plaintiff failed to provide submissions by that date and no further extension was granted by his Honour.
7. The first defendant submitted that the Court should deny the relief sought for the following reasons (upon the basis that leave was required to bring this ground): 1. no explanation as to why leave should be given was provided; 2. the matter concerns a small amount of costs; 3. no submissions were made to the Pierce LCM by the plaintiff, as were advanced before the Court as presently constituted, despite being given an opportunity to put on written submissions about it; 4. there is no evidence before the Court as to any alleged "gross injustice" to the plaintiff that supports a determination that leave should be given; and 5. There is no evidence before the Court as to what the costs are likely to be and what the difference between indemnity costs and ordinary basis costs would be.
8. Further, whilst the first defendant accepted that the precondition as set out by the plaintiff - namely, "the offer is made by the plaintiff, but not accepted by the defendant, and the plaintiff obtains an order or judgment on the claim no less favourable to the plaintiff than the terms of the offer" (emphasis added) -must occur before a plaintiff is "entitled" to a special costs order under the UCPR did not arise, it was submitted that, in any event, the failure to meet that precondition did not preclude the Local Court from awarding indemnity costs from the date of the offer, in its general discretion as to costs (see s 98 of the Civil Procedure Act 2005 (NSW)). As was noted by Pierce LCM in the note of reasons, the offer was both a "Rules" and a "Calderbank offer". Hence, it was submitted, his Honour was well within his discretion in awarding costs as he did.
9. As for the impact of interest accrued post the date of the offer, it was submitted, this only directly affects a Rule based offer, not a Calderbank offer". The relevance of that submission, as to the ground of appeal, is not entirely apparent.
10. In reply to the above contention, the plaintiff submitted that "[w]hilst the Court can award indemnity costs outside a UCPR-compliant Offer of Compromise, the discretion must be exercised judicially". The plaintiff contended that there is also no precedent for the awarding of indemnity costs on a Calderbank offer where the result was "less favourable" than the offer.

Ground 7

1. By ground 7, the plaintiff pleaded Pierce LCM erred in determining that he had jurisdiction to hear the matter as a result of his determination that the first defendant had made disclosure of costs, with respect to the Appeal Matter, to the plaintiff as required by the LPA.
2. The plaintiff submitted this ground of appeal goes to jurisdiction and concerned an error of law.
3. The plaintiff contended that the proceedings before the Local Court to recover costs in relation to the Appeal Matter were not able to be maintained because the first defendant had not made adequate disclosure of cost. It was contended that the first defendant made "only one estimate of costs", which appeared in the First Costs Agreement.
4. Reliance was placed upon s 309 of the LPA. That provision requires that certain matters be disclosed, namely, an estimate of costs must be provided (see s 309(1)(c)). Further, a law practice must, in writing, further disclose "any substantial change to anything included in a disclosure already made": s 316. In the event disclosure required is not made, the law practice "may not maintain proceedings against the client for the recovery of legal costs until the costs have been assessed" (s 317(2)).
5. The first defendant submitted that, notwithstanding the argument that the appeal is out of time, the ground raised either a question wholly as to a finding of fact (or lack thereof) for which no appeal lies, or is a mixed question of law and fact for which leave is required but has not been sought. However, putting issues of leave to the side, it was contended the plaintiff's characterisation of disclosure and Pierce LCM's finding, with respect to the same, was plainly wrong.
6. In disputing the plaintiff's contentions, the first defendant set out the relevant findings of Pierce LCM in the liability decision: 1. That the first defendant gave an estimate of fee for work at $50,000 with $15,000 of that being counsel's fees (at 2 and 11); 2. The estimate was exceeded when work in the first few weeks, following the execution of the First Costs Agreement, became the subject of three invoices issued in rapid succession, which "implicitly conveyed [the necessary advice about fees] (because their content necessarily put [the plaintiff] on notice that work beyond the initial estimate $35,000.00 was being done)" and that the requirement for express notice was "supplemented by notice implicit in the detailed invoices" (at 9); 3. "[T]here was express notice that complied with the section, notice which was to a substantial degree fleshed out by means of the information contained in the invoices" (at 10-11); 4. On 2 March 2010, the first defendant emailed the plaintiff "advising her that the needed stay of proceedings had been achieved and indicating quite explicitly that $125,000.00 would be likely to 'cover the matter'" (at 11); and 5. On 17 March 2010, by an email addressed to the plaintiff, the first defendant sent a "letter of advice cautioning against the uncertainties of litigation, and indicat[ing] a likelihood that if pressed to its conclusion the appeal proceeding could attract additional costs of about $300,000" (at 12).
7. Thus, in light of the above factual findings, it was submitted that the plaintiff's contention that only one estimate of costs was made is plainly wrong. Pierce LCM determined that disclosure had been made, a finding that cannot now be challenged. As such, the first defendant submitted, Pierce LCM "was appropriately seized with jurisdiction to determine [the first defendant's] claim for costs".

Grounds 1-4

1. No issues of leave were raised with respect to grounds 1-4. It is accepted that grounds 1-4 concerned an error of law and were brought as an appeal as of right.

Ground 5

1. The plaintiff characterised this ground of appeal as an appeal of right, properly concerning a question of law and not requiring leave. The first defendant disputed such a characterisation and submitted it is either a question arising wholly as to a finding of fact (or lack thereof) for which no appeal lies, or is a mixed question of law and fact for which leave is required, but had not been sought: ss 39(1) and 40(1).

Ground 6

1. During the course of submissions, the plaintiff sought leave pursuant to s 40(2)(c) to bring this ground. It was conceded that such leave was not pleaded upon the first introduction of the ground via the amended summons filed 31 October 2017 nor that issue rectified with the filing of the further amended summons on 28 May 2018. However, notwithstanding its bad form, the first defendant has been on notice since 31 October 2017 and could not properly be said to have suffered any prejudice in the face of the plaintiff seeking leave at the hearing.
2. As to the same, the first defendant submitted that in the circumstances leave should not be granted because, as conceded by the plaintiff, the matter was not raised before the Court below; leave was not properly sought and no explanation as to why should be given was provided; and, it should be further denied in light of the small quantum of the subject matter of the proceedings below.

Ground 7

1. At the hearing of the matter, counsel for the plaintiff conceded that leave to appeal was required as the appeal, with respect to ground 7, was out of time. Counsel for the plaintiff submitted that leave was sought "on the basis that there's no relevant prejudice to the first defendant, given that it arises out of precisely the same issue that the appeal arises out of. It's another ground arising out of the same judgement".
2. It may be noted, that the plaintiff characterised this ground in the same light as grounds 1-4, namely, an appeal as of right.
3. The first defendant disputed the plaintiff's characterisation. The ground challenges the findings, it was submitted, that the first defendant had fulfilled its disclosure obligations. It was contended, once Pierce LCM had made that determination, there is no error of law arising from that. It was once again submitted, either the ground concerns a question arising wholly as to a finding of fact (or lack thereof) which no appeal lies, or is a mixed question of law and fact for which leave is required, but has not been sought (save for an oral application at the hearing).
4. Counsel for the first defendant also submitted that leave would need to be sought in two respects: first, leave to bring an application out of time, and the second, which was not sought by the plaintiff, leave pursuant to s 40(1).

The Plaintiff

1. As of right, an appeal lies to the Supreme Court against a "judgment or order" of the Local Court sitting in its General Division, but only on a question of law: s 39(1) of the Local Court Act.
2. The plaintiff submitted that an appeal lies against the judgment or order, not the reasons for judgment. That submission was supported with reference to two Court of Appeal decisions: TriCare (Hastings) Ltd v Allen [2015] NSWCA 344 ("TriCare") and Wang & Liu v State of New South Wales [2011] NSWCA 321("Wang & Liu").
3. In TriCare, the Court of Appeal observed (at [10]): [10] It is well established that a "judgment or order" in the context of s 101(1)(a) of the Supreme Court Act refers to an operative judicial act, i.e., the formal judgment or order which when entered is binding on the parties and definitive of legal rights: Driclad Pty Limited v Federal Commissioner of Taxation [1968] HCA 91; (1968) 121 CLR 45 at 64; and see the other authorities referred to by Campbell JA, with whom Handley AJA agreed, in Wang & Liu v State of New South Wales [2011] NSWCA 321 at [23] noting his Honour's observation that while error in a judgment or order might be demonstrated on an appeal by showing error in a judge's reasons for judgment, the appeal is against the judgment or order, not the reasons for judgment.
4. In Wang & Liu, Campbell J (with whom Handley JA agreed) observed (at [23]): [23] Appeals from the Supreme Court in a Division are against a "judgment or order": s 101(1) Supreme Court Act 1970. A " judgment or order " in this context means an operative judicial act, ie the formal judgment or order which when entered is binding on the parties and definitive of legal rights: Driclad Pty Ltd v Federal Commissioner of Taxation (1968) 121 CLR 45 at 64; Lake v Lake [1955] P 336 at 343; Moller v Roy (1975) 132 CLR 622 at 625, 632, 639; Universal Tape Wholesalers Pty Ltd v AMP Fire and General Insurance Co Ltd (NSWCA, 8 March 1991, unreported); Legal Practitioners Complaints Committee v A Practitioner (1987) 46 SASR 126 at 127; Johnston v Nationwide News Pty Ltd [2005] NSWCA 17; (2005) 62 NSWLR 309 at [30], [39]; Ah Toy v Registrar of Companies (1985) 10 FCR 280 at 285-6. While error in a judgment or order might be demonstrated on an appeal by showing error in a judge's reasons for judgment, the appeal is against the judgment or order, not the reasons for judgment: Driclad at 64; Lake v Lake at 344; Ah Toy at 286.
5. Both matters concerned the construction of s 101(1) of the Supreme Court Act 1970 (NSW). However, in light of the similar wording, "an appeal shall lie to the Court of Appeal from … any judgment or order", the approach of the Court of Appeal in the above authorities, it was submitted, may be instructive to the construction of s 39 of the Local Court Act. Neither provision, s 101(1) or s 39(1) indicate that the appeal regime established, by the respective provision, extends to appealing "reasons" in relation to law - which have no operative effect. The plaintiff, in this respect, also noted, "until an order is entered it is still possible for a court to recall it or to change the basis upon which it makes the finding and, furthermore, any findings of fact made".
6. Following the liability decision, Pierce LCM did not enter any orders. Thus, those reasons for decision did not lead to "an operative judicial act". The plaintiff submitted, therefore, the reasons were not appellable, only the orders entered following the judgment on 10 July 2017 (and entered on 20 July 2017) were appellable. Thus, the plaintiff submitted, the appeal was brought within time (save for ground 7).
7. Further, by the remarks of Pierce LCM on 6 July 2016, at a directions hearing with respect to the quantum hearing, his Honour stated: You won't be out of time for appealing simply because the way in which the matter went, which is the way I usually do it, nearly always do it when I give a reserved decision, is that the reasons for decision I hand down and indicate that there will be a judgment but of course, we have to resolve quantum yet so the time hasn't started to run yet.
8. The plaintiff contended that the approach adopted by the first defendant as to the construction of s 39 is incorrect. It was submitted that "the right of appeal" does not arise out of an "opinion, direction or determination", noting the omission of such words from the provision, only a "judgment or order". Further, as to the application of Pt 50 of UCPR, it was submitted that being delegated legislation, those rules "are subject to any Act that makes provision to the contrary" (see UCPR r 50.3), and the Local Court Act "has ascendency over the procedural rules made really for the machinery of the running of the appeal in this Court". Hence, reliance is placed upon the above noted absence within s 39 (cf s 101(1) of the Supreme Court Act). The right of appeal arises from the date of the determining act - the "judgment or order" - namely, the date the order was entered.
9. Reference, in that respect, was also made to Daley v Hughes [2014] NSWCA 268 ("Daley") at [9]-[11], extracted below: [9] There was no provision in the LP Act permitting a costs assessor or panel to make a separate decision as to any question of law or providing a right of appeal in relation to the making of such a decision: cf the provisions of s 20 of the Commercial Tribunal Act 1984 (NSW) considered in Custom Credit Corporation Ltd v Commercial Tribunal of New South Wales (1993) 32 NSWLR 489. In the absence of such a provision, a view reached by an assessor or review panel on a question arising in the determination of the costs assessment application does not take on the character of a decision having an effect between the parties until a binding determination is made. Until then it remains an expression of opinion or intention which may be altered or abandoned. However, as French CJ observed in Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; 241 CLR 390 at [23], where the final or operative determination has been made, a right of appeal against a decision on a question of law extends to any decision, whether or not made explicit, which was a necessary step in the reasoning to the conclusion on which that determination is based. [10] The purported "decision" of the costs assessor was not one which of itself had any immediate operative effect as between the parties. Nor was it a decision which had been made as a necessary step in the process of reasoning leading to a binding determination of any aspect of the application because no such determination was made. That there can be no "decision" within s 208L unless there has been such a "determination" in relation to the application is confirmed by the provisions of sub-sections 208L(2) and (3) which assume that such a "determination" has been made. They provide that after deciding the question the subject of the appeal, the Supreme Court may make "such determination in relation to the application as, in its opinion, should have been made" or remit its decision on that question to the assessor and order him or her to "re-determine the application". [11] The present is not a case where the language of the statute clearly authorises the bringing of what effectively would be an interlocutory appeal on a question of law so as to involve the Supreme Court in close supervision of the assessment proceedings. On the contrary, that language limits the rights of the parties to appeals by leave against binding determinations of an assessor or panel and as of right from any decision on any matter of law involved in those binding determinations: cf Custom Credit Corporation Ltd at 493 (Gleeson CJ) and 497 (Kirby P), the latter passage referring to the decision of Samuels JA in Bromley v Housing Commission of NSW (1985) 3 NSWLR 407 at 425 where his Honour emphasised the need for caution in adopting an interpretation of provisions such as these which would facilitate the bringing of interlocutory appeals.
10. First, it was submitted that the judgment in Daley, in particular at [9], reinforced the plaintiff's submission "that the statement at the end of the 12 October reasons was an intention of what the judge intended to do, but which may have been recalled, reopened or changed before the entry of final orders". Second, as to the first defendant's reliance upon Currabubula v State Bank NSW [2000] NSWSC 232 (31 March 2000) ("Currabubula"), that decision was in part overturned by Court of Appeal in Daley (albeit with respect to a different legislative scheme, namely, overruled as to the construction of s 208L of the Legal Profession Act 1987 (NSW) (at [78])) . The plaintiff submitted it would, nonetheless, be erroneous for the Court to rely on Einstein J in Currabubula as that decision "allowed an appeal on a decision of law arising on a decision arising in a determination of a costs assessment. The Court has effectively overruled that [in Daley]".
11. With respect to grounds 5 and 6, the plaintiff submitted that the material date was 20 July 2017, namely, the date that orders and judgment were entered. No application was brought for an extension of time with respect to either ground.
12. Turning to ground 7, during the oral hearing, the plaintiff conceded that the appeal was out of time and an application for an extension of time was required and sought pursuant to UCPR r 50.3.
13. It may be noted, the power to extend time conferred by r 50.3 overcomes the common law principle that generally an extension of time could not be granted after the original period had expired: Zobel v Croudace (1899) 16 WN (NSW) 32; Banner v Johnston (1871) LR 5 HL 157 at 170.

The First Defendant

1. The first defendant submitted, being an appeal governed by Pt 50 of the UCPR, the rules, therefore, are relevant to the Court's determination as to time, namely, the "material date" from which time starts to run.
2. Rule 50.3(1)(a) provides, "[a] summons commencing an appeal must be filed…within 28 days after the material date". The term "material date" is defined in UCPR r 50.2. If the appeal is from a judicial decision the material date is when the decision was "pronounced or given". The term "decision" is defined to include "a judgment, order, opinion, direction or determination": UCPR r 50.29. Ordinarily the material date is when the court makes formal orders in the proceedings: see r 51.2. But if the orders have not been formally made, the material date may be when the court published its reasons for decision and proposed orders: Russo v Acebond Pty Ltd [2012] NSWSC 300 ("Russo") at [22].
3. In Russo, it was found that the material date was the date upon which the reasons of the Local Court Magistrate were given, as opposed to at the time the order dismissing the cross-claim was made. The issue of the construction and application of rr 50.2 and 50.3 was also dealt with Gabriel v Grech [2018] NSWSC 1652 at [73]-[83].
4. The first defendant submitted that the liability decision falls within the definition of "decision" under Pt 50 of the UCPR. This construction, it was contended, is supported by Pierce LCM concluding the decision by stating: "[t]he judgment to be entered will be only against [the plaintiff in respect of the Appeal Matter]". It was submitted that that decision raised a res judicata with respect to that issue. If accepted, that would render the liability decision an "operative" judicial act for the purposes of s 101 of the Supreme Court Act. It was submitted, "[t]he relevant section here, is of course s 39 of the Local Court Act, but there is nevertheless that operative judicial act has taken place, as his Honour has determined it. There was no going back on that decision".
5. Reference was also made to the judgment of Einfield J in Currabubula. By brief summary, that decision involved an appeal from a decision of a costs assessor midway through a costs assessment. The first defendant sought to rely upon his Honour's analysis of "decision" within the Legal Profession Act 1987 (NSW), which appears at [76]-[77]: [76] Currabubula concedes that no determination has yet been made by the costs assessor. Accordingly, Currabubula seeks to appeal only under s208L (1) of the Legal Profession Act. The question of the jurisdiction of this Court under the section turns on whether the letters of the assessor of the 20 October and 10 November 1999 amount to a decision' within the meaning of the Legal Profession Act. The word decision' is, as Deane J once said, a word of indeterminate meaning: Director General of Social Services v Chaney [1980] FCA 87; (1980) 47 FLR 80 at 100. In the context of a curial decision, its meaning is settled: it refers to a formal decision of a Court which disposes of the matter before it, not a conclusion of law included in the reasons for the making of an order - see David Syme & Co Ltd v Lloyd (1985) 1 NSWLR 416 at 428 per Glass JA. The word decision' also has currency in the context of the judicial review of administrative action in the Federal sphere, where the leading authority is to be found in the judgment of Mason CJ in Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321, where the Chief Justice took the view that in the context of the Administrative Decisions Judicial Review Act 1977 (C'th) the word decision' meant a decision which is final, or operative and determinative' and not merely a step taken in the course of reasoning on the way to the making of the decision' (at 336, 337). One matter which exercised the mind of the Chief Justice in that case was the undesirability of the fragmentation of administrative decision making attended by a broader interpretation; much the same consideration that occurred to Ireland J in Ganke v Somerset (supra). [77] Nevertheless, as was made clear by Mason CJ in Bond, the meaning of the word decision' must be determined by the context in which the word is found (at 335). A statutory context contrasting with that found by Mason CJ in Bond confronted the Court of Appeal in Bruce v Cole (1998) 45 NSWLR 163 where Spigelman CJ interpreted the word decision' in the Judicial Officers Act 1986 as `encompassing all forms of deliberative process, including the formation of an opinion'.
6. Counsel for the first defendant accepted that "one can't appeal the reasons, one must appeal judgment, an order, something that is operative". Turning to the liability decision, it was submitted that decision was "operative in that sense, and there was no going back on that part of the matter".
7. By its submissions, the first defendant contended that the plaintiff's appeal must fail, at least with respect to ground 5-7, as it was brought out of time.
8. As to ground 5, the first defendant submitted the material date was 18 May 2017, given the argument concerned "a challenge to his findings about the payments that have been made in the matter", namely, a part of the quantum decision. Thus, the appeal is time barred.
9. As to ground 6, which was introduced by the amended summons filed 31 October 2017, the first defendant advanced the following submission: In my submission that one was not time barred, save for the fact that it actually is because it was only included in the amended summons which was filed in November of last year and no application for an extension of time has been made in respect of that. Then once we actually look at, well, should there be an extension of time, that is also dealt with.
10. The general principles as to the an extension of time application were also summarised in Currabubula at [87]: [87] … An extension of time in which to appeal is not granted automatically or as of right: the Rules of Court governing time steps for pursuing an appeal are to be complied with. However, those Rules of Court are not to be used to effect an injustice: the object of the power of the Court to extend time is to do justice as between the parties. The Court will extend time where not to do so would work an injustice. Relevant considerations in exercising the discretion include the history of the proceedings, the conduct of the parties, the nature of the litigation, the consequences to the parties of the grant or refusal of the extension of time, the prospects of the appeal's success and any prejudice caused to the respondent by extending the time. The trend of recent authorities is towards a growing liberality in granting extensions of time in which an appeal can be lodged: Moulieux v Girvan NSW Pty Ltd(unreported, Court of Appeal, 20 September 1991), Gallo v Dawson [1990] HCA 30; (1990) 93 ALR 479 at 480-481,Jess v Scott (1986) 12 FCR 187 at 194-195, Morris v Public Transport Commission of NSW (unreported, Court of Appeal, 28 May 1984).
11. The basic consideration is whether the strict application of the time limitation will or may occasion injustice: Anthony v Chris Savage Pty Ltd [2003] NSWSC 698.
12. Turning then to ground 7, in light general principles as to the an extension of time application summarised in Currabubula, the first defendant submitted that the Court should have regard to the following in exercising the discretion: 1. the parties collectively were given so many opportunities to voice any grievance they had in this matter before the learned magistrate; 2. the numerous directions made to put on submissions, including in relation to costs; 3. the written submissions before the learned magistrate, significantly, did not address the issues raised by ground 7; 4. the history of the matter; 5. the objective of finality, particularly in circumstances "when there have been a number of opportunities to raise issues before and they have not been properly raised"; 6. the conduct of the parties, including the late filing of submissions by the plaintiff, with respect to costs, which the magistrate did not take account of because of the fact that they were filed so late after being given an opportunity to be heard on the matter; 7. the nature of the litigation - "this is about such a small amount of legal costs" of or around $20,000 and is below the jurisdictional limit of the Court; and 8. the consequence to the parties if an extension is granted - it was contended that the grant may cause detriment and prejudice to the first defendant, who may lose an action to recover professional costs (due to limitation periods), whereas the plaintiff has a considerable amount to gain.
13. In addition to the above considerations it was contended that an extension of time should not be granted because there is no formal application for that extension of time and there has been no proper attempt to put on evidence to explain the delays. Thus, it was submitted, the discretionary factors are just not present to grant an extension of time.
14. Whilst it was conceded that the application was out of time by the plaintiff, the first defendant, nonetheless, submitted that the material date, with respect to ground 7, was 12 October 2015 being the date of the liability decision. As to the issues raised by Pierce LCM's remark, with respect to judgment in the liability decision, "to be entered", the first defendant contended such a process was necessary for the purposes of enforcement and foreshadowed the need to determine quantum. However, a decision had been made on that date with respect to liability. Hence, it was submitted, time ran from that point.

THE CROSS-APPEAL

1. The first defendant filed an amended cross-summons on 19 March 2018 ("the cross-summons"). By the cross-summons, the first defendant as "Cross-Claimant" sought the following relief: 1. Declare that the Court below erred in finding that there was no agreement of disclosure with the Second and Third Cross-Defendants in relation to the Appeal matter. 2. Order that the Second and Third Cross-Defendants, together with the First Cross-Defendant, are bound to the terms of the Engagement Letter dated 22 February 2010, and are each therefore jointly and severally liable for orders made under case number 2014/189350, including orders for costs set out below. 3. [Struck.] 4. [Struck.] 5. Order that the First, Second and Third Cross-Defendants pay the Cross-Claimant's costs of these proceedings. 6. Such further Order as the Court may deem necessary.
2. The "Cross-Defendants" were identified as the plaintiff and the plaintiff's companies (Mr Slattery was not a party to the cross-summons). The cross-summons did not include any grounds of appeal or otherwise.

First Defendant's Submissions

1. The first defendant made the following submissions: 1. The cross-claim concerns the liability decision (namely, the reason for decision dated 12 October 2015); 2. The cross-claim was brought within time as the original cross-summons was filed on 28 August 2017, within 28 days of the plaintiff's summons commencing an appeal; 3. As to the error of law, the first defendant contended Pierce LCM incorrectly applied s 127 of the Corporations Act, which resulted in the second and third cross-defendants (the companies) being found not party to the First Costs Agreement. The relief ultimately being sought, in the cross-summons, was that the decision below be varied so that those two companies, together with the plaintiff, are made jointly and severally liable for the quantum that the magistrate found the plaintiff was liable for, and the costs of the proceedings below; 4. The relevant part of the Pierce LCM's reasons relied upon by the first defendant is extracted below (at 5): Section 127 of the Corporations Act, 2001 provides that a company may execute a document without a common seal if two directors or a director and secretary sign. By the combined effect of sections 128 and 129 a person dealing with the company is entitled to assume that a document that has been duly executed if signed in accordance with section 127. The engagement letter was not so signed, and so far as those provisions are concerned the plaintiff is not entitled to rely on [the plaintiff's] signature to bind the third or fourth defendants. 1. The first defendant submitted that Pierce LCM erred in his understanding of the provisions of the Corporations Act, and contended that correct conclusions, drawn from an application of ss 127 and 128, are as follows: 1. a company may execute a document without a common seal if two directors or a director and secretary sign; and 2. if the company is a proprietary company that has a sole director who is also the sole company secretary, the sole director may sign and thereby bind the company. 3. That is self-evidently the case where the company simply does not have two directors or a director and a separate secretary. 1. As the plaintiff was the sole director and secretary of the plaintiff's companies as at the signing of the First Costs Agreement, her execution of that agreement was effective to properly bind the plaintiff's companies to that agreement. Thus, it was submitted, Pierce LCM erred in not holding the plaintiff's companies liable for the legal costs incurred in respect of the Appeal Matter pursuant to the First Costs Agreement. 2. As to form of the cross-summons and the failure to set out grounds of appeal, it was contended that UCPR does not expressly require that a cross-appeal set out grounds of appeal, although, it was conceded that r 50.10(4) provides that Div 2 "applies to the cross-appeal and cross-summons". In the alternative, the first defendant relied upon s 63 of the Civil Procedure Act 2005 (NSW), that the failure be "treated as an irregularity" and "not invalidate the proceedings". 3. Notwithstanding the omission of a statement of grounds, it was submitted, in the light of the first defendant's written submissions, it is clear that the cross-appeal is brought pursuant to s 39 of the Local Court Act.

Plaintiff's Submissions

1. The plaintiff opposed the cross-summons and advanced the following submissions: 1. It was contended that the cross-summons was incompetent by its form, the first defendant failed to set out any ground as required by r 50.4 of the UCPR. The plaintiff also noted the late receipt of written submissions by the first defendant. 2. The complaint brought by the first defendant is not permitted by s 39 of the Local Court Act, with the primary contention being a question of fact, namely, the Court below made a finding there was no agreement or disclosure with the second and third cross-defendants in relation to the Appeal Matter. It was submitted that an appeal in relation to whether there was a finding as to the existence of an agreement is not amenable to any appeal under s 39: Pentelow v Bell Lawyers Pty Ltd trading as Bell Lawyers [2013] NSWSC 111. 3. No leave was sought pursuant to s 40 of the Local Court Act, contrary to the requirement of r 50.12 of the UCPR. However, even if leave had been sought, it was submitted there were no circumstances which would warrant a grant of leave. 4. As to the Corporations Act issue, it was submitted that the first defendant provided no authority to support the proposition that Pierce LCM misapplied the law. Further, s 129, it was contended, can only be relied upon in circumstances where the capacity of the person is stated, namely, "sole director".

Grounds 1-4

1. In substance, the subject matter of these grounds was raised before Pierce LCM immediately prior to the final judgment on disbursements, interest and costs (and final orders) on 10 July 2017 (issues of a similar character had been raised on 17 May 2017, the day before the quantum decision, but were directed only to costs). As noted earlier, his Honour refused to entertain the submissions at that late stage of the proceedings and, accordingly, there is no judgment below on the issues raised by these grounds.
2. No appeal had been brought from the determination by Pierce LCM to refuse to entertain those submissions. None of the grounds directly attacked the decision below or orders made. Rather, the challenge mounted consisted of the following categories: 1. The Court lacked jurisdiction "to continue to hear the action in that Court" and that the plaintiff was "immune from suit until the costs assessment was completed (ground 4). This related to the wider construction proposed by the plaintiff. In submissions, the plaintiff went further, it was contended that Pierce LCM did not have the power to allow the proceedings to continue in existence "or could not be kept in existence"; an issue which went to the "root of [the] authority to decide". The proceedings themselves, it was submitted, were not maintainable in that sense. 2. Pierce LCM erred in law by hearing and determining the application for costs of the Appeal Matter after an application for a costs assessment was made on 22 July 2016 as costs were subject to a costs assessment (ground 1). 3. No declaration was sought by the plaintiff, but ground 2 states that the first defendant was prohibited by s 355(b) of the LPA from maintaining an action in the Court below until the costs assessment had been completed (ground 3 simply asserted that the costs assessment had not been completed). This ground seems to relate to the aforementioned narrow construction of s 355(b).
3. That description of these grounds of appeal raises for consideration the judgment of McColl JA (with whom Meagher and Leeming JJA agreed) in Davis v NSW Land and Housing Corporation [2016] NSWCA 325 ("Davis"). The following observations of her Honour in Davis (at [77]-[79]), identifying the parameters of an application to appeal on a "question of law", are apposite in the present context. Those passages from her Honour's judgment are extracted below: [77] First, on such appeal, the existence of a question of law is not merely a qualifying condition to the right of appeal, but the question of law alone is the subject matter of the appeal. The Supreme Court cannot engage in a "review of the merits" of the decision. [78] Secondly, such an appeal is in the nature of a judicial review in which it is necessary to examine for legal error what has been done in the Appeal Panel. That will almost inevitably require consideration of the Tribunal's findings to determine whether the Appeal Panel's conclusion on the question of law identified in respect of the Tribunal's reasons was open. [79] Thirdly, on such an appeal, in certain circumstances, a new issue, not raised before the Tribunal, may be raised. In considering whether to permit that course in the exercise of the court's discretion, the court will take into account Coulton v Holcombe considerations. It will also take into account considerations specific to the limited nature of an appeal from the Tribunal on a question of law, for example that referred to by Gummow J in Federal Commissioner of Taxation v Raptis, "that there is difficulty in finding an 'error of law' in the failure in the Tribunal to make a finding first urged in this Court." [Footnotes omitted.]
4. Having regard to the first consideration raised by her Honour, it is appropriate to mention that, notwithstanding the description of the grounds of appeal (and their elaboration in submissions), the plaintiff has not clearly articulated the question of law which is said to attract the operation of s 39 of the Local Court Act.
5. Secondly, this is not a matter where the Court may have recourse to the finding of the Court below as to the issues raised by grounds 1-4 of this appeal.
6. The plaintiff may raise a new issue, as discussed in the third observation by her Honour, but that brings with it the consideration as to whether such a course is properly available in the light of the failure to take the point or points before the Court below. Those difficulties are not materially altered by the fact of the plaintiff having raised the issues at the end of the proceedings below because the Court below refused to accept those submissions and no challenge is made to that determination.
7. It may be surmised that these difficulties within these grounds of appeal resulted in the plaintiff's insistence upon demonstrating jurisdictional error, in the sense of a determination being made outside the jurisdiction of the Court below in order to sustain a proposition that, irrespective of the failure to raise the issues below, the Court must entertain the grounds due to jurisdictional error. It may be noted, in this respect, no relief is here sought under s 69 of the Supreme Court Act 1970 (NSW).
8. I do not consider that any such approach may ultimately avail the plaintiff, principally because I do not consider the plaintiff has demonstrated the determination by the Local Court as to the professional costs of the Appeal Matter fell outside its jurisdiction.
9. The remainder of the argument raised by the plaintiff under these grounds essentially raised questions as to the application of s 355(b) and do not raise jurisdictional issues per se. By their nature they do introduce factual issues not the subject of decision below, namely, whether there was an application for (or proceedings for) a cost assessment with respect to the Appeal Matter. Nonetheless, it will be convenient to address that issue in the course of considering the primary jurisdictional contention raised by some of these grounds. Ultimately, I will find the proceedings before Pierce LCM for the determination of professional costs of the Appeal Matter do not infringe the provisions of s 355(b).
10. I will turn to those considerations.
11. The first defendant commenced proceedings in the Local Court for breach of contract being, inter alia, the First Costs Agreement.
12. The Local Court had jurisdiction to hear and determine a claim formulated upon that basis.
13. Section 83(3) of the LPA provides that a solicitor may enter into a contract for services. Whilst a costs agreement may form part of a contract for legal services, it remains a distinct component: Branson v Tucker [2012] NSWCA 310 ("Branson") at [69] (per Campbell JA). However, the plaintiff raised no issue in these proceedings that there was a contract to pay for legal services as provided by that agreement. The subsection provides that a solicitor may sue in relation to the contract.
14. In any event, s 319(1)(b) provides that legal costs are recoverable under a costs agreement. There was no dispute that the First Costs Agreement was a costs agreement for the purposes of Div 5 of Pt 3.2 of the LPA. As Barrett JA observed in Branson at [126]-[127]: "A lawyer suing on a costs agreement to recover his or her remuneration brings an action in debt in the conventional way. The lawyer must plead the contract …The assessment process created by the Legal Profession Act, as it applies in a case of this kind, is no more than a means of quantification made available to the billing practitioner and the person billed".
15. A costs assessment does not thereby, in and of itself, remove the jurisdiction of the Court to resolve the dispute occasioned by a failure to pay for legal services (there is no issue a bill was properly issued in this case and hence the provisions of s 331 of the LPA are not engaged).
16. The Local Court had jurisdiction to entertain the money claims brought by the statement of claim pursuant to s 30(1) of the Local Court Act. That Court had the jurisdiction to enforce the contract, the terms of which were contained in the agreement for legal costs in the Appeal Matter (namely, the First Costs Agreement) (or by virtue of s 83(3) of the LPA).
17. The plaintiff never clearly articulated just how an application for a costs assessment may affect the jurisdiction of the Local Court, so described. It was suggested the engagement of s 355(b) meant that the proceedings could no longer continue to exist, notwithstanding that Pierce LCM had already pronounced his determination with respect to liability in relation to the Appeal Matter by the time of the application for a costs assessment, or alternatively they were no longer maintainable after the costs assessment application. In the latter case, it was contended, Piece LCM no longer had the power to hear and determine the proceedings beyond that date.
18. Those contentions cannot be accepted for the following reasons: 1. There is nothing on the face of s 355(b) pointing to the expunging of the Court's jurisdiction. The provision prohibits the "law practice" from taking certain steps. 2. It is true that the provision prohibits both the commencement and maintenance of proceedings to recover legal costs but that prohibition exists only "until the costs assessment has been completed": In the matter of Bitar Pty Ltd [2015] NSWSC 2158 ("Bitar") at [5] (per Brereton J). There is a temporal limitation on the power of the Court to exercise its extant jurisdiction. 3. The words "commence" and "maintain" plainly have different meanings. Commence means to begin. Maintain means to keep in existence or continuous. The parties did not specifically address the meaning of the word "or" in the expression "commence or maintain", but in my view it should be read disjunctively by virtue of the fact that there is no limitation under s 354 of the LPA as to when an application for a costs assessment may be made. The legislature clearly contemplated that a costs assessment may be sought after proceedings were commenced in which case the actions of the law practice will be constrained from maintaining proceedings until the condition imposed by s 355 is met. I do not consider there is any conflict in that conclusion with the obiter view expressed by Elkaim SC DCJ in O'Connor at [21] but if there was such a tension I would, with respect, not adopt his Honour's observations. 4. Both from a literal reading of the provisions of s 355 as well as from a purposive understanding, there would seem little doubt that the legislature intended that the proceedings commenced regularly without the limitations arising under s 355(b) vis-à-vis a costs assessment would be rendered, as the plaintiff submitted, out of "existence" or beyond the jurisdiction of a Court, by a costs assessment being sought during the course of the proceedings, particularly given the restraint imposed by the section only operates until the costs assessment is completed. 5. Such a construction is consistent with the costs assessment being for the purposes of quantification of the costs in circumstances where the legal practitioner has billed a client, with any proceedings being held over until that process was undertaken. It is also consistent with that overall scheme of the LPA, which provides for the recovery in the case of a breach of contract for legal service. The extinguishment of such proceedings because a costs assessment is sought would seem incongruous both with respect to the legislative right for recovery and the facilitation of the resolution of dispute over legal costs by costs assessment. 6. The judgment in O'Connor concerned the operation of s 317(2) of the LPA and found the operation of s 355 irrelevant in that respect (at [21]). Section 317(2) operates differently to s 355 as it, as Elkaim SC DCJ found, arguably acts as a "bar" having regard to the terms of s 317(2), when read as part of the scheme of the Act, particularly Pt 3.2 dealing with "Costs disclosure and assessment" (the heading of s 317, namely, "Bar on recovery proceedings until legal costs assessed" does not form part of the LPA: s 35(4) of the Interpretation Act 1987 (NSW)). The provision should be seen as a component of Pt 3.2 of the LPA, ensuring necessary disclosures are made and preventing proceedings for recovery in that context. The words "A law practice does not disclose"; "may not maintain proceedings" and "unless the costs have been assessed under Division 11", when read with the purposes of Pt 3.2 set out in s 301 of the LPA, convey that meaning and distinguish the provision from s 355.
19. In the circumstances, I accept the submission for the first defendant that the provisions of s 355(b) do not oust the jurisdiction of the Local Court, where engaged, or properly result in the extinguishment of proceedings by the terms of that provision alone, but provide a proper basis by which the proceedings may be stayed (see Bitar at [8]) or defended. The maintenance of proceedings, contrary to the provisions of s 355(b), may in appropriate circumstances result in the proceedings being struck out.
20. However, the plaintiff took no such action. Rather, as the first defendant properly submitted, the plaintiff first raised the issue in a submission to Pierce LCM dated 4 July 2017, after the completion of the quantum hearing and a day before Pierce LCM was scheduled to deliver reasons. As previously mentioned, no appeal was brought in that respect.
21. There is a second and fundamental consideration - the plaintiff has not established the central premise underpinning grounds 1-4.
22. The premise upon which grounds 1-4 of the appeal were founded was that the first defendant had made an application for a costs assessment with respect to the First Costs Agreement under s 352(1) of the LPA Act; thus, with respect to the Appeal Matter.
23. It was from this foundation it was further contended that the provisions of s 355(b) were thereby engaged such that the proceedings before the Local Court could not be maintained (and the various other formulations I have earlier mentioned).
24. The plaintiff contended that, by the first defendant's provision of "all costs" to the costs assessor (i.e. information with respect to professional costs for both the Appeal Matter and the Taking of Accounts Matter), the costs assessor was invited to allow the costs with respect to the Appeal Matter into the assessment.
25. It is correct that the first defendant provided the costs assessor with a schedule consisting of a spreadsheet that included disputed items "as being owed between the two matters" (namely, the adapted schedule). It is also true that the first defendant stipulated the adapted schedule would require the costs assessor to differentiate between the two matters, namely, as to "give certainty as to exactly which items belong to each matter" (see above at [104]-[105])
26. However, whilst that course might not have been the most prudent, I do not accept the contention of the plaintiff that such circumstances support a conclusion that the application for a costs assessment of 22 July 2016 included costs in relation to the Appeal Matter within the assessment.
27. Whatever may be the clumsiness of the approach adopted by the first defendant in the costs assessment process undertaken after the delivery of the liability decision, it is plain, by the course of the proceedings before the Local Court, that: 1. Liability had not been found with respect to the costs of the Taking of Accounts Matter. However, the first defendant was nonetheless entitled to pursue those costs through a costs assessment. There is no dispute that, at the very least, the first defendant sought such a costs assessment for those costs immediately after the liability decision. 2. Having found liability with respect to the Appeal Matter, Pierce LCM determined that the quantum of costs for that matter would be determined in the Local Court proceedings. It is axiomatic that the Court would not determine the quantum of costs for the Taking of Accounts Matter which application had been dismissed.
28. The constraint of a law practice which is provided under s 355 with respect to any proceedings is governed by the words: "to recover the legal costs". When Div 11 of the LPA is considered as a whole, the expression "the legal costs" used in that context concerns legal costs referred for assessment (see s 352(1) and (3)).
29. The recovery of the costs of the Taking of Accounts Matter could never be the subject of recovery proceedings before the Court as, by that date, the action had been dismissed. Further, it is quite improbable that the first defendant would seek an assessment of costs of the Appeal Matter before the costs assessor when the question of quantum had, at that very time, been programed for hearing before the Local Court.
30. The parameters of the assessment the first defendant sought to be conducted were clearly set out in the application (see above at [95]), which I shall extract again for convenience: Costs of acting for the Costs Respondent in relation to 2007/254642 in the Equity Division of the Supreme Court of New South Wales - being the taking of accounts in respect of claims by Neddam Holdings Pty Ltd - the landlord of the premises known as Unit 3, 3 Mandina Road, West Gosford NSW 2250.
31. Further, by the same application, the first defendant noted the extant quantum proceedings, with respect to the Appeal Matter, which would be addressing the question of costs relating to the Taking of Accounts Matter for the strict purpose of "determin[ing] if those claimed costs should not form part of his judgment [in relation to costs on the Appeal Matter]".
32. As to the plaintiff's contentions with respect to the first defendant's "suggested assessment process", namely, "the differentiation process" (referred to earlier in this judgment), two observations may be made: 1. First, the exercise was framed as a process of exclusion and not inclusion, with the parameters of the assessment already set out on the original application (see above), and reinforced within the same application by annexing of 29 invoices (namely, each bill from the first defendant to the plaintiff), which related to the Taking of Accounts Matter. The costs assessor also had a copy of the Schedules prepared in relation to the quantum hearing, as well as an adapted schedule, prepared by the first defendant, which was annexed to the letter which recommended the differentiation process. The adapted schedule identified items that were in dispute, namely, items contended to be owed between the Appeal Matter and the Taking of Accounts Matter, which also contained the parties' respective submissions as to the same. By this provision of information the first defendant suggested a process of excluding irrelevant material from the assessment process, namely, that concerning the Appeal Matter. The process neither invited nor required the costs assessor to formulate a view with respect to the costs of the Appeal Matter. 2. It is clear that the differentiation process did not engage an assessment for the purposes of s 355 of the LPA because, at its highest, the process involved the costs assessor identifying items as relevant to costs on the Appeal Matter but never for the purposes of recovery of costs with respect to that matter by the costs assessment. The process of identification, as stated above, facilitated the exclusion of unrelated costs that were not the subject of the costs assessment.
33. I accept that the abovementioned correspondence to the costs assessor, together with the information provided on the application itself, was provided with the sole purpose of assisting the costs assessor in conducting his assessment of legal costs as to the Taking of Accounts Matter (see s 363 of the LPA) (there is no information as to whether or not it did) and to avoid traversing and undertaking a costs assessment of the Appeal Matter.
34. Further, whilst the costs assessment is yet to be completed, the preliminary view of the costs assessor confirmed that the costs of the Appeal Matter were not before the costs assessor and that the first defendant was entitled to costs of the Taking of Accounts Matter by virtue of s 319 of the LPA.
35. Thus, in my view, at no time did the first defendant "commence or maintain any proceedings" to recover legal costs which were the subject of an application for costs assessment. The extant proceedings before the Local Court did not concern a determination of quantum with respect to the Taking of Accounts Matter. The only proceedings the first defendant maintained, after lodging the application for assessment, were the Local Court proceedings for the costs of the Appeal Matter, namely, the quantum hearing.
36. Whilst it is not necessary to decide, I consider the first defendant was entitled to raise the issue of estoppel. There can be no estoppel on the face of a statute (Coshott v Barry at [96]) but in this case there was, as I have found, no absence of jurisdiction.
37. I dismiss grounds 1-4.

Ground 5

1. As earlier mentioned, the plaintiff contended, that a failure to deal with a pleaded defence is a failure to exercise jurisdiction and is an error of law. Such a ground attracts the provision of s 39 of the Local Court Act.
2. However, the foundation upon which the ground proceeds is flawed.
3. Whilst Pierce LCM's reasons, in this respect, are somewhat opaque, when considered as a whole, and having regard to the nature of the issues his Honour was required to resolve, they demonstrate that his Honour addressed the substance of the defence of payment contentions of the plaintiff in the proceedings below, so far as they were advanced, with respect to the subject payments described in ground 5 within the scope of the methodology his Honour employed (which was not challenged on appeal).
4. The plaintiff also raised, in association with this ground, a failure to take into account or exclude costs associated with the Taking of Accounts Matter. That was not the subject of the ground. The challenge brought under ground 5, by its nature, was directed to the quantum decision, which was confined to the Appeal Matter, his Honour having rejected the Taking of Accounts contention by the first defendant. It is tolerably clear that the subject matter of paras (a) and (b) in this ground concern costs in the Appeal Matter. I will, therefore, only briefly attend to the issue.
5. Before turning to those questions it is, however, useful to firstly address the manner in which those issues were ventilated before his Honour and the methodology his Honour employed in reaching a resolution. The procedure, which was not the subject of complaint on appeal, was, in my view, entirely open to his Honour having regard to the nature of the proceedings before him.
6. As previously noted, due to the inability of the parties to reach agreement, Pierce LCM adopted the laborious and painstaking process of proceeding line-by-line through the schedules, produced by the parties prior to the quantum hearing, in making his determinations as to quantum. By the same process, his Honour afforded the parties the opportunity to advance submissions with respect to each contentious item until his Honour deemed the exercise no longer profitable in assisting the Court to make its determination due to the highly repetitive and lengthy approach to submissions adopted by the plaintiff (who appeared for herself, at that stage, without the aid of counsel). His Honour decided that the balance of the matter would to be resolved on the papers and provided specific directions as to the course to be taken.
7. The plaintiff's written submissions, in that respect, were identified at the outset of the quantum decision as not being compliant with the orders made by Pierce LCM, namely, she did not adopt the appropriate style of referencing, sought to re-canvass and re-agitate issues already decided and provided submissions late and/or out of time.
8. Two further observations may be made in the resolution of this ground as follows: 1. The plaintiff's submissions with respect to ground 5 fixed upon the failure of Pierce LCM to make "any finding" as to payments made by the plaintiff to the first defendant and/or to counsel (ground 5(a)) or as to the total amount of counsel's fees payable (ground 5(b)). However, the plaintiff did not identify with any clarity just where the deficiencies in the reasons of Pierce LCM may be found (or where his Honour failed to deal with the defence of payment issue). It may be accepted that the plaintiff could not reasonably be required to deal with "a negative" but that course was not available when, in my view, Pierce LCM's judgment does indicate that he dealt with the defence both generally and by his reference to the subject matter of payments relied upon by the plaintiff in that respect. 2. Insofar as Pierce LCM dealt with the Taking of Accounts Matter costs, the appeal does not challenge Pierce LCM's decision as to merits.
9. Bearing in mind those observations and limitations, when properly analysed, I consider that Pierce LCM did grapple with the issue of payments made by the plaintiff to the first defendant and/or to counsel, and was careful to delineate matters falling within the Appeal Matter (for inclusion) and the Taking of Accounts Matter (for exclusion).
10. Pierce LCM expressly dealt with the question as to whether payment had been made by the plaintiff to the first defendant (see, for example, at [77(2)] and [78(2)] of this judgment) and by the plaintiff to counsel (see examples at [77(1)], [77(2)], [78(1)] and [78(4)] above).
11. Some further remarks should be made regarding payments made by the plaintiff to the first defendant. His Honour made it clear in the liability decision (at 27) that he was concerned to delineate between invoices and payments made (or "credits"). The methodology he ultimately adopted, as discussed earlier, was designed to systematically and comprehensively analyse monies due and monies paid (or not due) on a line-by-line basis.
12. Ultimately, the plaintiff did not wholly participate in that process. The line-by-line analysis, at the quantum hearing, had to be discontinued because of the plaintiff's approach to it. Provision was then made for written submissions but some of the plaintiff's submissions were not allowed because of lateness; no appeal was brought from that decision. Some of the submissions not received on that basis were directed to the defence of payment.
13. More fundamentally, however, and notwithstanding the heading in the quantum decision, the component of the quantum decision falling under the heading "Disbursements" deals specifically (at 29-36) with payments made by the plaintiff to the first defendant (some of which is in tabular form).
14. His Honour also expressly indicated that he had been careful to delineate between the Appeal Matter and the Taking of Accounts Matter, so as to exclude costs relating to the latter (at [76(1)]-[76(3)] above).
15. I turn to the second limb of this ground, it is true, there plainly is a requirement to give reasons: Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 at [56]-[67] (per McColl JA). However, this ground is predicated upon a failure to exercise the jurisdiction by not engaging, it was contended, with the plaintiff's submissions below. This is not an appeal predicated upon the Court below grappling with the contentions raised but providing inadequate reasons for refusing to accept those contentions. If the alternative submission is that Pierce LCM did deal with the defence of payment submissions of the plaintiff but either did not regard them and gave inadequate reasons for the same I would reject that submission based upon my aforementioned analysis as to Pierce LCM's approach to the task and his discussion of outcomes in that light.
16. If time was required with respect to this ground (which I doubt), I would grant leave to bring the ground. This ground is dismissed.

Ground 6

1. Ground 6 of the appeal concerns an appeal as to the determination of costs of the proceedings before the Local Court. The ground concerns a costs order and thereby requires leave to appeal pursuant to s 40(2)(c) of the Local Court Act. No leave was sought in the amended summons filed on 28 May 2018 or the further amended summons.
2. The ground revolves around a singular issue, namely, that Pierce LCM misapplied r 42.14 of the UCPR and was, therefore, bad in law. The failure was said to derive from the reliance upon an offer of compromise, as opposed to a Calderbank offer or general exercise of discretion and the fact that the outcome of the proceedings was less favourable than the offer made by the first defendant. The offer was less favourable, it was contended, because it was predicated upon judgment being entered against three parties (whereas orders were only made against the plaintiff).
3. It is tolerably clear that his Honour based the indemnity costs order operating form 28 January 2015 on r 42.14, even though he referred to the requisite "offer" as being both a "Rules and Calderbank" offer. The same may not be said for the alternative finding by the Local Court (providing that indemnity costs would operate from a later date) which appears to have been predicated on both a Rules and Calderbank offer, although that judgment is not the subject of this appeal.
4. If judgment was entered only against the plaintiff, there would appear to be some force in the plaintiff's contention that orders were not warranted under the provisions of r 42.14 given that the offer was predicated upon judgment against three defendants (and on that basis less than the outcome achieved), although submissions were never fully developed as to whether the same conclusion should be reached with respect to a Calderbank offer (save for the plaintiff contending that such an offer could not attract indemnity costs if the offer was less than the outcome achieved). However, in consequence of the determination of the cross-appeal (see below), the foundation for that contention is, in the result, no longer sound.
5. In any event, I consider leave to appeal should be refused.
6. Each of the factors relied upon by the first defendant for the refusal of leave set out earlier in this judgment (at [168]), in my view, are apposite.
7. Further, whether or not orders were available upon the basis of a Calderbank offer, in my view, it was entirely open Pierce LCM in the exercise of his discretion to award costs pursuant to s 98 of the Civil Procedure Act and to do so on an indemnity basis based upon the conduct of the plaintiff (see the discussion in G E Dal Pont, Law of Costs (LexisNexis, 4th ed, 2018) at [16.39]-[16.48]). This is so for the very reasons given by Pierce LCM for refusing to receive the late submissions on the question of costs; reasons that are directly applicable to the question of whether costs should be awarded on an indemnity basis. (It may be noted that the determination to further extend time for the plaintiff the costs submission had not been approved).
8. It follows that the appeal does not ultimately attract issues of principle, general public importance and there is no injustice to the plaintiff. There was a proper basis to award indemnity costs upon the basis of the plaintiff's conduct in the proceedings below resulting in a wastage of time and costs as found by Pierce LCM. Further, the principles of finality should be applied, particularly when the costs of any further proceedings would substantially outweigh, what appear to be, a small amount of costs involved in this case.
9. The first defendant's submissions as to this ground being out of time are unclear. They appear to concern the date when the amended summons was filed (this ground being introduced by that summons). However, no objection as to time was raised, as to this ground, with respect to the further amended summons. If the ground be out of time, it is appropriate to extend time to accommodate it.
10. In my view, leave to appeal should be refused with respect to this ground.

Ground 7

1. It is common ground that this ground of appeal was brought out of time. That position is, in my view, correct given the ground was brought in with the further amended summons.
2. There was a debate as to whether this ground otherwise required leave. The plaintiff contended that the determination that the first defendant had made disclosures of costs was an error of law as s 317(2) of the LPA prohibited proceedings against the plaintiff for the recovery of legal costs until costs have been assessed.
3. I consider the first defendant is correct to raise whether, as pleaded, this ground may be properly characterised as an appeal under s 39 of the Local Court Act. As framed, the question of jurisdiction raised by the ground only manifests itself if the Court were first to find that Pierce LCM was wrong in finding that the first defendant had made a disclosure of costs to the plaintiff pursuant to the requirements of Div 3 of Pt 3.2 of the LPA.
4. This ground squarely constitutes an attack on the first instance decision as to findings of fact vis-à-vis the existence or otherwise of the requisite disclosure. As framed, the ground may be properly described as a mixed question of fact and law, although, as will be developed below, such a conclusion has little practical significance for the determination of the appeal as the premise for the ground, as I will now demonstrate, is fundamentally wrong.
5. It was open to Pierce LCM to find the first defendant had given disclosure required by Div 3 of Pt 3.2 of the LPA Act to the plaintiff with respect to the costs in the Appeal Matter.
6. The findings of Pierce LCM in the liability decision, in this respect, were open to him for the following reasons (repeating that set out earlier in this judgment): 1. The first defendant gave an estimate of fee for work at $50,000 with $15,000 of that being counsel's fees (at 2 and 11). 2. The estimate was exceeded when work in the first few weeks, following the execution of the First Costs Agreement, became the subject of three invoices issued in rapid succession, which "implicitly conveyed [the necessary advice about fees] (because their content necessarily put [the plaintiff] on notice that work beyond the initial estimate $35,000.00 was being done)" and that the requirement for express notice was "supplemented by notice implicit in the detailed invoices" (at 9). 3. "[T]here was express notice that complied with the section, notice which was to a substantial degree fleshed out by means of the information contained in the invoices" (at 10-11). 4. On 2 March 2010, the first defendant emailed the plaintiff "advising her that the needed stay of proceedings had been achieved and indicating quite explicitly that $125,000.00 would be likely to 'cover the matter'" (at 11). 5. On 17 March 2010, by an email addressed to the plaintiff, the first defendant sent a "letter of advice cautioning against the uncertainties of litigation, and indicat[ing] a likelihood that if pressed to its conclusion the appeal proceeding could attract additional costs of about $300,000" (at 12).
7. Further, in my view, the plaintiff's contention that only one estimate of costs was provided cannot be sustained.
8. I turn briefly to consider whether leave should be granted to extend time to appeal.
9. Applying the general principles as to the grant of leave to extend time in Currabubula (at [87]) on the conclusions reached above and accepting, as correctly stated, the list of factors listed above at [211] of this judgment, I consider there is a proper basis to refuse leave to extend time.
10. Leave to extend time to appeal is refused. Otherwise, if time were properly to be granted, I would refuse leave to appeal under s 40 of the Local Court Act and in any event dismiss the ground.

The Cross-Summons

1. The cross-summons challenges two determinations by the Court below, both of which were to the same effect in rejecting the first defendant's claims against the plaintiff's companies ("the third and fourth defendants" in the Court below).
2. First, it was found that the plaintiff's companies were not party to the First Costs Agreement as the signature of the plaintiff above the names of those corporations in the engagement letter did not "execute" the engagement letter for the purposes of s 127 of the Corporations Act.
3. Secondly, in consequence of that fact, the first defendant's disclosure to the plaintiff's companies had not occurred - the letter of engagement was not signed and returned by the plaintiff's companies.
4. I first turn then to the circumstances in which the engagement letters were exchanged between the first defendant and the plaintiff.
5. An engagement letter was forwarded by the first defendant to the plaintiff which bore the names the plaintiff's companies, namely, the third and fourth defendants, with a provision for signature. The plaintiff's signature was entered above each company title as well as above her own name. No other description or notation appears as to the plaintiff. In particular, the words or word to the effect of "sole director/secretary" do not appear on the document either near the place allocated for signatures or in any other place on the document.
6. The parties' submissions, in this respect, were set out above. Putting aside issues as to the form of the cross-summons and whether leave was required under s 40 of the Local Court Act (and, in particular, whether a finding as to the existence of an agreement was amenable to appeal under s 39), the arguments of the parties revolved around the operation of ss 127 and 129 of the Corporations Act.
7. Section 127(1) is in the following terms: 127 Execution of documents (including deeds) by the company itself (1) A company may execute a document without using a common seal if the document is signed by: (a) 2 directors of the company; or (b) a director and a company secretary of the company; or (c) for a proprietary company that has a sole director who is also the sole company secretary - that director. Note: If a company executes a document in this way, people will be able to rely on the assumptions in subsection 129(5) for dealings in relation to the company.
8. Section 129(1) and (5) are in the following terms: 129 Assumptions that can be made under section 128 Constitution and replaceable rules complied with (1) A person may assume that the company's constitution (if any), and any provisions of this Act that apply to the company as replaceable rules, have been complied with. … Document duly executed without seal (5) A person may assume that a document has been duly executed by the company if the document appears to have been signed in accordance with subsection 127(1). For the purposes of making the assumption, a person may also assume that anyone who signs the document and states next to their signature that they are the sole director and sole company secretary of the company occupies both offices.
9. In the judgment below, Pierce LCM found that a person dealing with a company "is entitled to assume that document has been duly executed if signed in accordance with [s 127]". He relied, in that respect, upon the "combined effect of [ss 128 and 129]". However, his Honour found that the engagement letter "was not so signed" such that the first defendant could not rely upon the plaintiff's signature above the names of the plaintiff's companies to bind them.
10. The basis upon which Pierce LCM found that the engagement letter had not been duly signed in that fashion is not fully explained in the judgment but it would appear from the opening section of the earlier extract from the liability decision in this judgment that his Honour found the lacuna arose because the engagement letter was not signed by "two directors or a director and secretary", presumably a reference to two persons in each case (his Honour later referred to a "second signature" of a person purporting to be the company secretary).
11. Before resolving the cross-appeal, it is necessary to mention four further matters: 1. The first defendant pleaded in the cross-summons that the plaintiff was the sole director and secretary of the plaintiff's companies. 2. The Court below found that the plaintiff was the sole director of those companies (consistent with the evidence of the plaintiff, the first defendant and ASIC historical company extracts). 3. The evidence of the first defendant in the cross-summons was that the plaintiff was the sole secretary of the plaintiff's companies (again, consistent with the ASIC historical company extracts). 4. There was no dispute that the plaintiff's companies were proprietary companies.
12. In those circumstances, by the operation of s 127(1)(c), the plaintiff had the legal capacity to execute the engagement letter on behalf of the plaintiff's companies: Creswick v Coast RV Pty Ltd [2013] NSWSC 1078 at [33]. The plaintiff was the sole director and secretary of two proprietary companies and executed the engagement letter by signing the document above the name of the third and fourth defendant, thereby indicating that she was signing on their behalf. If it were necessary to find, it may be concluded that the first defendant was aware of the plaintiff's positions or capacity in that respect. In other words, the plaintiff had actual authority to bind the plaintiff's companies to the First Costs Agreement, namely, the agreement for the provision of legal services with respect to the Appeal Matter. Reliance upon s 129(5) is strictly unnecessary, although, in my view, there is nothing inconsistent with this conclusion and the provisions of that subsection.
13. It follows that the judgment of Pierce LCM in that respect, constituted an error of law. By virtue of s 127(1)(c), the plaintiff was able to execute the engagement letter for the plaintiff's companies without using a common seal and such execution had the effect of binding those corporations to contract for legal services with the first defendant for the Appeal Matter. No issue of disclosure arose on the decision below, in this respect, as Pierce LCM's rejection of disclosure was predicated upon there being an absence of agreement, namely, the failure to execute the letter of engagement with respect to the third and fourth defendants.
14. The cross-appeal is available as of right pursuant to s 39 of the Local Court Act. There are deficiencies in the cross-summons by virtue of the absence of grounds (see UCPR r 50.10(4)) but these should be treated as irregularities which do not invalidate the proceedings (s 63 of the Civil Procedure Act), noting that there would not appear to be any inadequacy in the notice given to all parties of the relief sought by the first defendant and the contentions advanced in support thereof (there being, therefore, no prejudice or unfairness to any party). The Court should, in my view, correct the error of law in the judgment below.
15. The cross-summons should be upheld as to the primary relief claimed.

CONCLUSION

1. In view of the findings earlier made, grounds of appeal 1-5 are dismissed; leave is refused to bring ground 6 and leave to extend time is refused with respect to the bringing of ground 7, although if it were found time should be granted, leave should be refused or the appeal dismissed. In the result, the appeal brought by the plaintiff is not upheld.
2. The primary relief in the cross-summons should be granted.
3. In the circumstances, upon the principles that costs follow the event, an award for costs of the further amended summons commencing an appeal and the cross-summons would normally be made in favour of the first defendant as against the plaintiff with no order as to costs against Mr Slattery. Any costs orders against other parties will require further submissions, having regard to that fact that Mr Slattery, together with the third and fourth defendants, entered submitting appearances save as to costs. I will make provision to hear the parties as to costs.

ORDERS

1. The Court makes the following orders: 1. The first defendant shall file and serve short minutes of order reflecting this judgment within 14 days of the publication of this judgment. 2. The plaintiff shall file and serve within a further 7 days any alternative proposed orders in the event of a dispute. In the event there is no dispute that fact shall be communicated either by the first defendant at the time of filing short minutes of order pursuant to (1) above or by a note provided by the plaintiff within the time specified in this order. 3. Any application as to costs should be filed and served within 14 days of the publication of this judgment. 4. Subject to (3) above, costs are reserved. 5. In the event that orders are filed and served pursuant to (2) above, reflecting a dispute as to the form of orders, or an application is made under (3) above, the Court shall issue further directions for the disposition of any such issues. 6. The parties have liberty to apply to the Chambers of the Court as to the disposition of those issues referred to in (1) to (5) above. 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: 28 February 2019