Vizovitis v Ryan t/as Ryans Barristers and Solicitors [No 2] [2012] ACTSC 206

3. The matter comes before me by application under r 6201 of the Court Procedures Rules 2006 (ACT) which provides that:

6201 Order that jurisdiction in proceeding be exercised by judge instead of master

(1) If the jurisdiction of the court is to be, or is being, exercised in a proceeding by the master, a judge may order that the jurisdiction of the court in the proceeding be exercised by a judge.

(a) on application by a party to the proceeding; and

(b) at any time before the end of the proceeding before the master.

(3) If a judge makes an order under this rule, the judge may -

(b) decide an issue in the proceeding and refer the proceeding back to the master and give the directions (if any) the judge considers appropriate in relation to the proceeding.

4. Those rules were, until 2006, part of the Supreme Court Act 1933 (ACT) s 15, which had been introduced as s 8AD by the Statute Law (Miscellaneous Provisions) Act 1988 (Cth), when this Court, then still under the jurisdiction of the Commonwealth of Australia, had, as an addition to its compliment, a Master for the first time.

5. At that time, the Master's powers were quite limited. Since then, the Master's powers, which are granted by rule, have extended so that, except in the case of criminal proceedings, the Master's powers are almost coextensive, if not co-extensive, with those of a judge.

6. Rule 6201, previously s 15 and earlier s 8AD of the Supreme Court Act, has not, in substance, been varied since it was introduced, though some drafting changes have been made.

7. The application seeks, first of all, to waive such rules as may be necessary to allow the hearing of this application today and I am prepared to waive those rules so that the matter can be heard.

8. The effect of the application is to invite me to exercise the jurisdiction of the Court which is currently being exercised by the Master. The purpose of that is that a challenge has been made to the admissibility of evidence in reply to the evidence of the costs consultant. It is said that such evidence is not truly in reply and that the evidence is fresh evidence that ought to have been adduced in chief and, as such, results in case splitting which causes an unfairness in the proceedings.

9. The Master has not made a decision on that, but his Honour has indicated that he is minded to allow the evidence to be adduced by the plaintiff, and it is in that circumstance that the defendant has appeared before me and sought that I exercise the jurisdiction by making a decision to refuse to allow the report to be admitted as evidence in reply. The application does not, however, request that I take over the conduct of the whole proceedings and there would be obvious and formidable obstacles to that being a sensible course of action. It is notable that the application requests that the proceedings be then remitted to the Master with any directions, presumably directions about the issue of reply.

10. The question of whether this material is properly admissible in reply is not one that is of an easy answer, and I have had helpful submissions by Mr O'Donnell of counsel for the defendant and Mr Hausfeld of counsel for the plaintiff on the matter.

11. I do note that rules about admission of evidence in reply are generally strictly applied, particularly in criminal cases, so that evidence to be adduced rebutting the defendant's case must be what was called by the Divisional Court in Gilbert v Comedy Opera Co (1880) 16 Ch D 594 as "strictly in reply". In Butterworths, Cross on Evidence: Australian Edition, vol 1 (at service 125) 17,240, the learned authors point to the fact that there are exceptions to the general rule and they do point out that

in general it may be said that the court has a discretion, the exercise of which is difficult to overturn on appeal, to admit further evidence either for its own satisfaction or where the interests of justice require it. Thus a possible mistake arising from ambiguous evidence may be cleared up. Evidence which is fresh may be admitted. Evidence not led by inadvertence may be permitted to be called late, for the laxity of counsel should not, generally, rebound to the detriment of the client, but not evidence which was deliberately not led at the correct time. (footnotes omitted)

Evidence may be let in late if no prejudice is caused to the party against whom it is tendered. It may be led late where the interests of justice require it, it is material, and it could not with reasonable diligence have been discovered before. Evidence may be led late even if it could have been led with due diligence earlier where justice requires it. Evidence may be admitted, even after judgment. But application at so late a stage is a factor weighing heavily against success. (footnotes omitted)

13. It is clear that there is a wide discretion in the Court, but that it must be exercised in accordance with fairness and so as not to prejudice a party, even if that party has made forensic decisions which may result in some difficulties for them in the circumstances.

14. It seems to me that the issue here is complicated because there are misunderstandings about the nature of the way in which the calculation of the costs payable by a client to his or her solicitor should be made. The expert called by the defendant has calculated the work done by reference, firstly, to the cost agreements and, secondly, by the scale set out in sch 4 of the Court Procedures Rules.

15. There are clearly two ways to interpret that scale. One way is to simply look at the descriptor of the item and the quantum assigned to it and add up all those pieces of work that fit within the descriptor and multiply that number by the quantum that is assigned to that descriptor. It is my view that that is not an appropriate application of the scale, because there are a number of items where a discretion - an assessment or value judgement - is required to be applied to the item. Even where an express indication is shown in the item, the item nevertheless has to be interpreted in accordance with the law applying to the scale.

16. It seems to me that the evidence that is sought to be led in reply is the kind of evidence that would show the way in which the Courts in this jurisdiction have interpreted the application of the scale to the work that is done by lawyers so that, when a scale charge is made, the scale is applied in accordance with that law.

17. The defendant's position is somewhat different. The defendant says that the scale is not to be interpreted in that way, but that one simply adds up the items and multiplies it by the quantum that is assigned to the item. It is not appropriate for me to make a final finding on that matter, but I am inclined not to prefer the approach suggested by the defendant.

18. The defendant has indicated that, were the evidence to be admitted in this way, the defendant would be severely prejudiced by the adducing of the evidence because she would be unable to adduce evidence that was contrary to, or that might rebut, that evidence, because the material is being admitted in reply.

19. It seems to me that there are two answers to that. The first is that the defendant has chosen to assess the work done by reference to the scale and, in doing so, has to be taken to have understood that the scale is not a mathematical formula but is a legal document which has application and brings with it the construction that the law has placed on the items, the items that are allowable and the way in which they are allowable in the scale.

20. There are many texts and, indeed, a very large loose leaf service which sets out the law applying to the scales, and I would be very surprised if an expert of the kind that Mr Hardman (the expert retained by the defendant) appears to be did not apply that law when assessing the application of the scale to the work that was done, and when he was providing a calculation of the value of the work for the purposes of the evidence. To take it further, as appears to be suggested by the defendant, does not, in my view, take it out of the same realm of evidence as to the proper application of the scale to the issue.

21. The second matter is that the defendant submits that if, at the end of the day and when judgment is given by the Master, there is an appeal, it will be difficult to disentangle the evidence that has been given in reply if it was improperly given and ought not to have been before the Court. It seems to me, in fact, that that evidence will be easily disentangled and that a Court of Appeal, were it so minded and were the issues such that it was possible to do so, would be able to substitute a different judgment if such became clear by the setting aside of that evidence of Mr Travers (the witness whose evidence in reply is at issue) and assessing the evidence before the learned Master.

22. In my view, r 6201 is not designed for a decision in advance of a ruling on practice and procedure that the Master might make. While, even in 1988, it might be seen to have that capacity, I am not aware of, and neither counsel referred me to, any authorities which suggested the limits or the uses of that rule. It seems to me, in the context of the legislative history, that the intention was to allow the Master to be directed in relation to matters of significance and to gain guidance of the way in which what was then his Honour's very limited jurisdiction should be exercised.

23. The increase in jurisdiction of the Master may well lead to the desirability of a reconsideration of r 6201 and its applicability, because it would certainly be inappropriate for cases to be fragmented by recourse to that rule as, indeed, the Courts have been reluctant to allow the right of appeal from interlocutory decisions of the Master to interfere with the continuing conduct of cases where the fragmentation to hearings is clearly undesirable. As Higgins CJ commented in Cleary v Rinaudo [2012] ACTSC 179 at [1], "[t]hese days the Master is, in terms of appointment, appointed and removable as if a judge of the court. The appeal provisions should reflect that and do away with any extra appellate level."

24. Accordingly, while I have been urged to dismiss this application on the basis that it is an abuse of process, I am not prepared to hold so far. I do not consider, however, that, in the circumstances, this is an appropriate case for intervention under r 6201. I do not think that the Master's proposed decision is so obviously wrong or egregious, or would cause such prejudice to the defendant, that I ought to exercise the jurisdiction to interfere with the conduct of the proceedings currently pending before the Master.

26. In the circumstances, and as this application is in the nature of an interlocutory application, I will make the usual order that the defendant pay the plaintiff's costs, such costs not to be assessed or payable until judgment in the proceedings before the Master.

27. I will formally remit the matter to the Master at 2.15pm this afternoon.

I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Refshauge.

Solicitor for the applicant: Ryans Barristers and Solicitors