Smith v Binet [2000] NSWSC 464 | Case summary

10883/99 THOMAS EDWIN CURTIS SMITH v RICHARD GRAHAM KENT BINET (LIQUIDATOR FOR YUSEN DALY SMITH INTERNATIONAL PTY LTD) & ANOR JUDGMENT 1 Disputes between the parties have generated a prodigious body of litigation. Two separate proceedings have been brought in the Equity Division of this Court. The first proceedings were brought in 1994. The second proceedings were brought in 1995. There was further litigation in the Court of Appeal. 2 Each of those two proceedings has spawned proceedings both in the Common Law Division and Court of Appeal of the court. The plaintiff was successful in both proceedings and obtained an order for costs in each of them. 3 The costs orders have led to the commencement of proceedings by way of application for assessment of costs. There were two common law proceedings. The applications were referred to a Costs Assessor (Mr Dwyer). It appears that submissions were made to him (but the relevant material is not before the court). Each application was determined by the issue of a Certificate as to Determination. The certificates were issued respectively in July and August 1998. The certificates came with correspondence which disclosed certain of the Costs Assessor's reasoning process (inter alia as to charge-out rate). 4 A complaint was made by the plaintiff that the Costs Assessor had not disclosed his reasoning process. This complaint saw the Costs Assessor provide information as to that process. It has been said to have been provided by way of a code (using expressions such as inter alia "not reasonably necessary in whole or part" and "not reasonable as to amount"). This information was regarded as being unsatisfactory by the plaintiff. 5 Further proceedings were then commenced in the Common Law Division of this Court. There were two proceedings. Each was brought by Summons. In each proceedings, the plaintiff sought inter alia prerogative relief, an extension of time for seeking relief under s 208L and s 208M of the Legal Profession Act 1987 (the Act) and in the alternative leave to appeal under s 208M. The prerogative relief was directed towards obtaining further disclosure of the reasoning process of the Costs Assessor. 6 Both Summonses were heard by James J. He refused each of the three claims for relief and dismissed the Summonses with costs. 7 An appeal was then instituted in the Court of Appeal. The grounds of appeal challenged the refusal of each of the three claims for relief. 8 At the time of the hearing before James J, questions of mathematical error were raised. These were not agitated before the Judge and were left to be resolved by the parties. 9 These matters were then raised with the Costs Assessor. This led the Costs Assessor to issue a further certificate which dealt with the mathematical errors and also added a component for "skill, care and responsibility". This amended certificate was issued on 17 March 1999. 10 This certificate led to complaint from the defendant as to the addition of the component. Following this complaint, the Costs Assessor issued yet a further certificate which deleted the amount that had been added for that component. This further amended certificate was issued on 23 March 1999. 11 The plaintiff then commenced these proceedings. The Summons was filed on 14 April 1999. It propounds an appeal pursuant to s 208L together with an application for extension of time for the bringing of that appeal. The purported appeal seeks to challenge what are described as the decisions made in July and August 1998, the decisions made on 17 March 1999 and the decisions made on 23 March 1999. 12 The defendants filed a Notice of Motion on 8 February 2000. It seeks summary disposition of the proceedings pursuant to Pt 13, r 5 of the Supreme Court Rules 1970. This application was allocated a special fixture to be heard on 11 May 2000. 13 Before these proceedings came on for hearing, the plaintiff made a decision to discontinue the proceedings in the Court of Appeal. At the time of the hearing of the defendants' application, the proceedings in the Court of Appeal had been discontinued. 14 The principal thrust of the defendants' case is that these proceedings are an abuse of process. Reliance is also placed on the Anshun principle. Detailed submissions have been made by the parties both in writing and orally. For present purposes, it is not necessary to reproduce that material in detail. 15 The court has a discretionary power to grant summary relief. The defendants accept that they bear the onus and that such relief is only granted in what might be described as clear cases. 16 The opportunity to agitate all of the alleged merits of any appeal against the decisions made in 1998 was had in the hearing that took place before James J. He received submissions on those matters. In his judgment, he observed that no evidence was adduced to suggest any reason whatsoever existed to justify an appeal. 17 In those proceedings, the Judge has dealt with the question of the sufficiency of the disclosure of the reasoning process of the Costs Assessor. He has refused to extend time for the seeking of relief under either of two sections 208L and 208M. He has refused the grant of relief pursuant to 208M. A further opportunity to agitate those matters was had in the now discontinued Court of Appeal proceedings. 18 Section 208L provides a limited avenue of appeal. It is restricted to matters of law arising in the application for assessment. It lies against a decision made by a Costs Assessor. 19 In so far as the Summons seeks to bring an appeal against the decisions made in 1998, any such appeal is presently incompetent. This situation is accepted by the plaintiff. 20 It emerged during the course of submissions that the plaintiff now seeks to challenge only what is said to be the Costs Assessor's error in dealing with the matter of care, skill and responsibility. He no longer presses any complaint in relation to mathematical errors. 21 At this stage, it is convenient to look at some detail of certain of the matters forming part of the narrative that has already been provided. 22 Although the bills contained an item headed "Skill, Care and Responsibility", the charge made therein for such item was $0.00. There was a claim for increase of profit costs by 25% pursuant to clause 4 of Costs Agreement with the Client. The Costs Assessor was later notified that this part of the claim had been abandoned (in fact it represented a premium payable by the client pursuant to a contingency fees agreement). 23 The solicitors for the plaintiff corresponded with the Costs Assessor by facsimile transmitted on 25 February 1999. This communication dealt with the matter of the mathematical errors. Also, it contained inter alia the following:- "We respectfully note that it appears to us that no amounts have been included in relation to professional costs in line with the bills". 24 In a letter dated 17 March 1999, the Costs Assessor informed the plaintiff inter alia:- "In addition, in each case I overlooked the care, skill and consideration at the end of the bill". 25 It was this thought process that led the Costs Assessor to amend his assessment by the addition of an amount for care, skill and consideration. In his letter dated 23 March 1999 he said that he had forgotten that the claim for the premium had been abandoned. He then further amended his assessment by the deletion of that addition. 26 At this stage, it is convenient to refer to certain submissions made on behalf of the plaintiff. At the outset, it may be observed that I do not accept any of them. 27 The plaintiff now looks to what was said in the letter dated 17 March 1999 as evidence of confusion by the Costs Assessor in relation to the matter of allowance for care, skill and consideration. It is said to be inter alia the fresh evidence which now justifies an extension of time for the bringing of the present appeal and the allowing of that appeal. 28 During the hearing the plaintiff seemed to advance two positions in relation to the manner in which the Costs Assessor erred in relation to his dealing with the matter of care, skill and responsibility. One position was that he failed to make any allowance for it. The other was an alternative (that in fact care, skill and responsibility had been a factor in the fixing of the quantification of charges made for various profit cost items and that certain of these items had been inter alia erroneously disallowed or reduced by the Costs Assessor in the course of the assessment). In relation to this alternative position it also seemed to be put that many items were involved and that the disclosure of reasoning process was inadequate where there had been disallowance or reduction. 29 It was also said that care, skill and consideration was a component that the Costs Assessor was required to take into account pursuant to s 208G and that he had failed to give it consideration. It was further said that it was the duty of the Costs Assessor to increase the claim for $0.00 by an appropriate amount. 30 The matters of skill, care and responsibility are merely some of the matters to which a costs assessor may have regard in making his assessment of what is fair and reasonable. There are various statutory requirements with which he must comply (see inter alia sections 208 and 208F). He is required to assess the application which is referred to him for assessment. He is required to give due consideration to the submissions that are made to him. 31 In this case, no lump sum claim was made for care, skill and responsibility in any application and it seems to be common ground that no issue concerning such a matter was agitated in the assessment. Also, it was not raised before James J nor in the subsequent Court of Appeal proceedings. 32 Further, as a general rule parties are bound by the course adopted in the assessment. In the present case, there does not appear to be any basis for departure from the general rule. Accordingly, it could be expected that the point would not be allowed to be taken in an appeal. 33 It seems to me that the approach that has been taken by the plaintiff is based on misconception. The letter dated 17 March 1999 does admit of some confusion (confusion, which at least in part, may have arisen from the manner of presentation contained in the bill). However, the confusion arose after the original determination and relates to the Cost Assessor's mistaken identification of the abandoned claim for premium as a claim for care, skill and consideration. When he became aware of that confusion the mistake was corrected. In my view, this material does not in any way assist the plaintiff in this case (whether it be contended to be fresh evidence, change of circumstances or otherwise). Further, there is no other material which would advance an extension of time application. 34 If it is the case (and that appears to be the position) that care, skill and responsibility had been a factor in the fixing of the quantification of profit cost items charged in the bill, then these matters have been considered by the Costs Assessor in assessing the fairness and reasonableness of what was allowed for profit cost items. He has given reasons for what has been disallowed or reduced and the sufficiency of that reasoning process has been upheld by James J. If there was any error, it could only be an error of fact and would not provide a basis for disturbing a decision in a claim for relief pursuant to s 208L. 35 There has been debate as to the status of the amended certificates. The arguments have been less than full. 36 The original certificates had been issued prior to the introduction of s 208JB (it came into force on 18 December 1998). This provision enables a Costs Assessor to correct error in a determination. This section has no application in the present case (it applies only to a determination made after 18 December 1998). Prior to its application, the view has been taken that a Costs Assessor had no power to correct error in a determination. He was taken to be functus officio upon issue of the certificate (see s 208K). 37 If it be necessary to make a decision on this matter, it is my view that the Costs Assessor had no power to issue the amended certificates and, if it had been necessary to take any action in respect of them, that they were liable to be set aside. It seems to me that this follows inter alia from the statute itself. 38 Be that as it may, these amended certificates lack importance in the circumstances of this case. The adjustments made in dealing with the complaints as to mathematical error have been the subject of payment by the defendants and no issue remains in respect of them. Otherwise, the certificates merely saw an ultimate correction of an error that had arisen after the original determination and by reason of the mistake as to the premium. Any relevant decision made in respect of the care, skill and responsibility component, came to pass at the time of the issue of the original certificates. In the absence of an extension of time, any appeal in relation to such matters is incompetent. 39 In the circumstances of this case, the material does not throw up any arguable case for an extension of time. Accordingly, the incompetent appeal is doomed to failure. It seeks to re-agitate matters which were ventilated before James J and in the Court of Appeal proceedings. The bringing of it is an abuse of process. It seeks to agitate matters which could have been ventilated in those earlier proceedings. There is no relevant change of circumstances. In my view, the proceedings are vexatious and an abuse of process. Accordingly, I consider that the defendants are entitled to summary relief. 40 I dismiss the Summons. The plaintiff is to pay the costs of the Summons. The Exhibit may be returned. **********

Smith v Binet

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