SMITH v. DWYER [1999] NSWSC 114

SMITH2 -11- IN THE SUPREME COURT OF NEW SOUTH WALES NAME OF DIVISION

THOMAS EDWIN CURTIS SMITH v. IAN FRANCIS DWYER & ORS THOMAS EDWIN CURTIS SMITH v. IAN FRANCIS DWYER & ANOR

HIS HONOUR: 1 These proceedings consist of two actions, each commenced by summons. Each summons claims an order in the nature of mandamus directed to the first defendant, a costs assessor under the Legal Profession Act (1987) s.206, requiring that first defendant to deliver within 28 days a document specifying the reasons for which he has disallowed or reduced, as the case may be, the various items in the bills of costs assessed by him in proceedings in this court. 2 In each case the order claimed, notes that the costs assessor has stated grounds for the disallowance or reduction of the relevant item as:- "(a) not reasonably necessary in whole or in part; (b) not reasonable as to amount; or (c) not reasonable as not covered by the court order." 3 In addition in each summons orders are sought extending the time for appeal under s.208L(1) of the Legal Profession Act or for an application under s.208M of the said Act for leave to appeal. Alternatively an order granting leave to the plaintiff to file a notice of appeal from the assessments made by the first defendant is sought. 4 No additional ground is advanced for the extension of time application, for leave to appeal or for appeal other than that which is relied on to support the application for the order in the nature of mandamus under s.69 of the Supreme Court Act, or for an order under s.65 of the Supreme Court Act which the plaintiff prayed in aid in addition in argument 5 The basis for the plaintiff's contention that it is entitled to the relief sought is simply that the reasons given by the costs assessor are in each case inadequate. 6 It is accepted, on the authority of the Attorney General & Anor v. Kennedy Miller Television Pty. Limited & Anor (1998) 43 NSWLR 729 that costs assessors are required to give reasons. 7 Section 208F of the Legal Profession Act (1987) provides:- "Assessment of bills generally:- (1) When considering an application relating to a bill of costs, the costs assessor must consider; (a) whether or not it was reasonable to carry out the work to which the costs relate, and (b) whether or not the work was carried out in a reasonable manner, and (c) the fairness and reasonableness of the amount of costs in relation to that work." 8 By s.208F(2) the costs assessor is to determine the application by confirming the bill of costs, or if satisfied that the disputed costs are unfair and unreasonable, to substitute the amount that in his or her opinion is a fair and reasonable amount. The costs assessor may have regard to a number of enumerated matters pursuant to s.208G additional to those referred to for the purposes of ascertaining what is a fair and reasonable amount of costs, ie, the criterion under s.208F(1)(c). 9 The appeal provided by s.208L to a party who is dissatisfied with a decision of the costs assessor is as to a matter of law arising in the proceedings to determine the application. It has not been suggested here that any particular matter was raised on the determination of the application other than as I will turn to later when referring to the letters of the costs assessor and the solicitors for the plaintiff with respect to the adequacy of the reasons given. Further, that appeal is to be dealt with by the Supreme Court under s.208L by either affirming the costs assessor's decision or making such determination in relation to the application as in its opinion should have been made by the costs assessor (this could not possibly relate to the failure to give reasons) or by remitting its decision on the question to the costs assessor and ordering the costs assessor to re-determine the application. (The re-determination of the application is hardly appropriate to a suggested inadequacy of reasons). 10 An appeal by leave is given under s.208M, but this is an appeal against the determination of the application made by the costs assessor. It is inappropriate where no challenge is made, as here, to the correctness of the quantum finally decided as appropriately assessed but to the reasons for the assessor in reaching that determination. In any event, no evidence has been put before me to suggest any reason whatsoever why the appeals in the applications for extension had not been otherwise launched than by the filing of the summonses herein. 11 Having regard to what appears in the judgment of Master Harrison in Stacks the Law Firm v. Bogeosvki (unreported 19 November 1998) citing the unreported decision of Master Greenwood in Busuttil v. Holder & Anor (9 August 1996) in which that Master referred to the criteria for the extension of time and the grant of leave under the Legal Profession Act, unless I were of the view that the reasons were materially inadequate, and unless I were further of the view that the matters could appropriately be dealt with by way of appeal no extension would be appropriate and no grant of leave appropriate. As will appear I am not of that view. 12 The argument that the costs assessor was required to give more reasons than he has, needs to be examined in each case from the starting point of looking at what has so far been provided. In the course of the argument the plaintiff tendered and had admitted into evidence three bundles of exhibits, exhibits 1, 2 and 3. Each supplemented the material annexed to the affidavit in each case of A.G. Cameron, the solicitor for the plaintiff, which affidavits annexed correspondence to and from the costs assessor. I was not taken to any particular matter in any of the exhibits in argument. Those exhibits were supplemented by certificates of assessment which were admitted in the case for the defendant, and each setting out either the assessment of costs of the relevant action or the assessment of the costs assessor's costs. 13 The costs assessor has provided letters which whilst different in some respects refer to the general scheme whereby he undertook his task. He has disallowed the charge out rate of the solicitors and reduced it to $250 per hour including clerical work. He has allowed photocopying at a particular basis. He has expressed the view that some of the attendances on counsel and the applicant were not reasonably necessary or were unreasonably long. He disallowed certain items as being outside the ambit of the order, including, for example, the obtaining of advice relating to capital gains tax. 14 Subsequent to his assessments he was requested, in consequence of the decision of Sperling, J. at first instance in Attorney General & Anor v. Kennedy Miller Television Pty. Limited (unreported 1 August 1987), to provide reasons for the assessment. He provided in respect of the two bills referred to in matter No. 11994 of 1998 markings in the margin of the relevant exhibits being exhibits 2 and 3, in effect by way of a code, setting out the bases on which the reductions or disallowances had occurred. 15 In matter No. 12086 of 1998, the other of the two proceedings before me, he similarly marked that bill of costs, which is exhibit 1, and referred to the basis on which he dealt with items either generally or in some cases specifically in a letter dated 4 August 1998, which is annexure A to the affidavit of Mr. Cameron sworn 24 August 1998. 16 Annexure C to that affidavit sets out the costs assessor's response to the request for reasons and the code dealing with each item in relation to the bill of costs. 17 The extent to which a body which is required by law to furnish reasons, whether it be an administrative body or a judicial body, is to be ascertained firstly from the nature of the particular function the body is performing and secondly the purpose for which the reasons are provided. Often it will be necessary to furnish reasons so that an appeal might be brought. 18 In Pettit v. Dunkley (1971) 1 NSWLR 376 is to be found a classic illustration of the necessity to furnish reasons to enable the basis for a judicial determination to be ascertained. That, however, does not mean that the reasons have to provide a justification entirely sufficient in law for the conclusion or that the whole of the reasoning process must be set out in all cases to avoid quasi-prerogative relief. Indeed the very absence of a relevant finding might well constitute a sufficient basis for an appeal, but not for mandamus and in that sense it cannot be said that the reasons are defective, although the conclusion might be. 19 The extent of the necessity to deliver reasons can vary from that high standard imposed by law on a trial judge conducting a judge alone criminal trial as was noted recently by the High Court in Mark Fleming v. The Queen (1998) HCA 68 dealing with the construction of Part 9 of the Criminal Procedure Act in the context of an appeal under the Criminal Appeal Act. (That decision has recently been applied in this court in Regina v. Brian William Maxwell (CCA, unreported 23 December 1998).) 20 The submissions of the plaintiff, however, in this case did not descend beyond the simple contention that what was put by the costs assessor on the bills of costs and in the correspondence was inadequate. No real assistance was offered as to why those reasons were inadequate as reasons except the proposition that they were conclusions. Implicitly the argument suggested that in respect of each item the costs assessor should have to give in writing some detail exposing the reasoning process. To do so would mean that the task of a costs assessor would become not only onerous but in most substantial cases immensely difficult to complete. 21 There is a distinction between furnishing a short notation of the basis for the conclusion that the item should be disallowed or reduced and furnishing judicial reasons. In Attorney General v. Kennedy Miller (supra), Sperling, J., after noting what had been said in Soulemezis v. Dudley (Holdings) Pty. Limited (1987) 10 NSWLR 247 by Kirby, P. at 259 and McHugh, JA. at 280 to 281 concerning the extent of judicial reasons to be given in the context of a statutory right of appeal proposed that the obligation on the part of a costs assessor to provide reasons was such at least as would enable the exposure of simple errors of principle or mistake. His Honour at p.34 held that it was necessary to specify the items which have been reduced by what amount and for what reason in each instance. His Honour held that:- "Having regard to the purpose to be served by such reasons and the sources of the requirement - implied statutory obligation and procedural fairness - the obligation should be no higher than is necessary for the purpose. It would in my view be sufficient if reasons were provided on request by each party. The request could be limited in some way if the agreed party was so minded, for example, to particular items. The costs assessor would be entitled to make a supplementary charge for the time required to provide reasons as part of the cost of the assessment. It does not seem to me that what I propose would be particularly onerous or that it would materially increase the cost of the process. It may be preferable for assessors to anticipate the possibility of a request for reasons when processing the bill. In the ordinary course the assessor would need to note against any item reduced the amount of the reduction or the reduced amount in order to be able to tally up the result. It would be easy enough to record the reason for the reduction in each instance at the same time. In each case the reason must be readily to mind. Otherwise the item would not have been reduced. In most instances, a word or two would suffice. A code could be devised for recurring reasons. I doubt that this would add much to the cost of the assessment. It would, in my view, be a reasonable incident of the assessment and chargeable as part of the assessment. If a request for reasons were made at a later time, little extra work would be required to produce the reasons in suitable form. The provision of reasons which was required on request under the earlier scheme, is not inconsistent with the stated objectives of the amending legislation, namely, to speed up and to reduce the cost of taxation of costs, having regard to other features of the scheme in particular, the elimination of herrings and oral argument before a taxing officer." 22 His Honour's proposal was not the subject of disapproval in the Court of Appeal. The court held that there was a necessity to provide reasons. It did so particularly as the court had regard to the rights of appeal incorporated in the new assessment system. 23 In the judgment of Priestley, JA. the passage set out from Sperling, J.'s judgment at pp.35-36, part of which is included in the portion I have cited, was noted with approval, in particular it deals with the recording of the reason for the reduction when reducing or disallowing. Particularly the argument was put in Kennedy Miller (supra) that to undertake this process would have caused significant problems of time and expense for costs assessors. The court did not accept that the statute did not contemplate some such process as this. Priestley, JA. held at p.736D:- "The process described by Sperling, J. in the passage in his reasons above set out seemed a workable method not involving the difficulties suggested by the appellant. The court was alive to the fact that the day-to-day expense of costs assessors might well result in me having a great deal more realistic understanding of the situation than the members of the court. (Although this feeling was to some extent lessened by the inability of counsel to point to any specific difficulties caused by the method suggested by Sperling, J.)" 24 There was in that case, as there is before me, a lack of any material in the evidence such as to suggest any particular problem with the general scheme provided in the suggestion of Sperling, J. Priestley, JA. did go on to say at 737:- "One thing that both the submissions of the hearing and those contained in the statement have made plain to me is that there is scope for policy guidelines to become established governing the way in which reasons are provided. Sperling, J.'s suggestions already go some distance towards that. Some matters mentioned in the statement (his Honour is referring to a statement provided after the argument of the appeal to the Court of Appeal in that case) indicate that something more detailed may be required in the interests of keeping costs and time wasting to a minimum. Whether or not that is so does not arise for decision in the present appeal, where the question is the general one in respect of which leave was granted, is there an obligation upon costs assessors to give reasons for their determinations? As I have already said my opinion is that the answer is clearly yes." 25 His Honour went on to hold that the primary requirement for reasons is of sufficient strength, or was of sufficient strength to overcome any of the asserted difficulties and dealt with ancillary questions. Powell, JA. agreed with him. 26 Handley, JA. expressed some dissatisfaction with the agreed basis for the submissions, ie. that the costs assessor was performing an administrative function and concluded that in his analysis it was a judicial function. He expressed a view that it was arguable that the costs assessor had a duty to give reasons as an incident of that judicial function. Subject to those remarks, which his Honour noted were necessarily tentative, he agreed with the orders proposed by Priestley, JA. He also agreed with his Honour's reasons, and, on the assumption that a costs assessor was exercising an administrative function, did not wish to add anything. 27 It cannot be said that the method used by this assessor in this matter falls so far outside what was noted by Sperling, J. and the Court of Appeal as to evidence a disregard for his statutory obligations and a jurisdictional error, in my view. It may be that more could have been done. It may be that it could have been done better. It may be that what has been done may have failed to make findings such that some appeal might lie, but I have not been taken to any such failing. What I am concerned about on the primary claim for relief is whether relief in the nature of a prerogative writ might go. I see no basis in what has been put before me and in what has been submitted for that conclusion. 28 The outline of submissions provided by the plaintiff asserts that the reasons do not speak for themselves. In my view they do. The process was intended to be expeditious and cheap. To have to expose in relation to each item or in relation to general categories of items a detailed process of reasoning goes well beyond what the Court of Appeal had held was necessary, would not be necessary to serve the purposes of the appeals provided, and would impose onerous obligations on those assessing. 29 It was further argued that in particular in relation to the reduction of the charge out rate no adequate reason was given for the difference. Reference was made to criteria, to which it was said one should have regard to when ascertaining the charge out rate. Those criteria, in particular the market rate for provision of legal services of a like kind and the circumstances of the particular matter itself, are criteria that it is expected that a tribunal of a specialist nature, such as a costs assessor appointed from the profession, would be entitled to either know or ascertain since in particular the matters under s.208G are matters which it would not be expected would give rise to a formal hearing with the tender of evidence and perhaps oral argument. Section 208(2) provides that in considering an application a costs assessor is not bound by the rules of evidence and may inform himself or herself on any matter in such manner as he or she thinks fit. Provided that the assessor affords to the parties the opportunity to make submissions and to deal with any basis which might otherwise be erroneous in principle, he does not err in doing so. The assessor is entitled to have regard to the rates commonly charged from the profession and the circumstances of the matter from what is before him and his own knowledge. 30 This was the only real particular matter to which I was taken, albeit that I was taken to it as an illustration of why the reasons were not adequate. In my view they were and consequently I see no basis for any of the orders sought in the summonses. 31 The conclusion I have reached, therefore, is that in each case the summons should be dismissed. I so order. 32 I order the plaintiff pay the costs of both sets of proceedings. It would be somewhat less, one would expect, than if they had been determined separately.

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