Vumbaca v Sultana

Vumbaca v Sultana - [2012] NSWDC 237 - NSWDC 2012 case summary — Zoe

[2]

Introduction 1The plaintiff ("Mr Vumbaca") by amended summons filed 25 October 2012 appeals from the decision of the Costs Review Panel of 23 May 2012 affirming the certificate of determination of the Costs Assessor with respect to the substantive costs the subject of assessment and review in the sum of $17,112.81. 2The costs were incurred in the course of an application by the defendant ("Mrs Sultana") in the Dust Diseases Tribunal. Mrs Sultana had been diagnosed with mesothelioma. The source of her disease was exposure to asbestos during renovations to the property in which she lived as a child. She commenced proceedings against Amaca Pty Ltd on 3 May 2010. She sought access to a property in Kellyville, her former childhood home, to take samples of asbestos cement sheeting and other building materials for the purpose of those proceedings. Mr Vumbaca, the registered proprietor of that property, refused to permit this inspection. Mrs Sultana's solicitors issued a summons on 25 October 2010. There was an extensive request for further and better particulars. Affidavit material was prepared. 3The application came before O'Meally P in the Dust Diseases Tribunal on 6 December 2010 and was adjourned part heard to 8 December 2010. The application was unusual, as O'Meally P noted at the time. In his Honour's ruling granting access, dated 8 December 2010, stated (at [6]-[8]): "6. The basis upon which the application is made is that the plaintiff is unable to identify the manufacturer of the asbestos cement sheeting which she alleges was the source of asbestos dust and fibre to which she was exposed unless an inspection is carried out and a sample taken. These, it is hoped, would enable the product to be identified and its composition ascertained. It is hoped they will identify the manufacturer. 7. Applications of this sort are not infrequent, and in 21 years of presiding over cases in the Tribunal, this is the first occasion in which such an application has been resisted, and in my view, unreasonably so. 8. There are several bases upon which the application has been resisted and in my view, none is with merit." 4O'Meally P made orders for inspection of the property, and ordered Mr Vumbaca to pay Mrs Sultana's costs of the motion. By letter of 11 April 2011, Mrs Sultana's solicitors served Mr Vumbaca with a lump sum bill for $17,378.22, consisting of $8,490.22 for disbursements and $8,889 for professional fees. On 13 April 2011, Mr Vumbaca's solicitors requested an itemised bill, as they had "some serious objections to your client's account". An itemised bill of costs was then prepared. The itemised bill of costs totalled $21,351.75, of which $9,225 was for disbursements and $12,125.85 for professional costs. This bill was then filed with the application for assessment of party/party costs. 5Following the lodgement of this bill on 22 July 2011, there was an argument, in the course of the costs assessment, as to whether the solicitors for Mrs Sultana had a right to recovery of costs prior to the main proceedings resulting in judgment. The solicitors for Mr Vumbaca challenged whether Mrs Sultana had a right to recovery of costs prior to that stage, submitting that the right to reimbursement of costs would not crystallise until the litigation between Mrs Sultana and the respondent in the Dust Diseases Tribunal proceedings were complete. The Costs Assessor held the assessment in abeyance (for what turned out to be only a matter of some days) pending the outcome of the proceedings in the Dust Diseases Tribunal. The proceedings in the Dust Diseases Tribunal settled. When the Costs Assessor was advised of this, he completed the assessment and issued certificates of determination in relation to Mrs Sultana's solicitors' costs. 6On 29 March 2012 Mr Vumbaca applied for a review of the decision. On 23 May 2012 the Costs Review Panel issued its reasons and a certificate of determination of costs by the Panel. The Panel, in a 16-page review, affirmed the certificate of determination of the cost assessor in relation to the costs the subject of assessment and review. The Panel noted its costs were higher than usual because the number of matters raised, including complaints that the costs were "grossly excessive" and that the Costs Assessor failed to give reasons, which meant that the Panel had to conduct item-by-item reassessment. Mr Vumbaca was ordered to pay Mrs Sultana's costs of the review.

[3]

The appeal before this court 7On 17 July 2012 a summons appealing the determination of the Costs Review Panel and affidavit in support was served on Mrs Sultana's solicitors. That summons did not disclose any grounds of appeal. On 1 August 2012, the solicitors for Mrs Sultana wrote pointing out that the summons was in incorrect form and contained no statement of grounds as required by r 50.4(2) Uniform Civil Procedure Rules 2005 (NSW). A notice of motion was filed on 30 August 2012. There was no appearance on behalf of Mr Vumbaca when the matter came before the Judicial Registrar. It was relisted again on 11 September 2012 when a further extension of time to file an amended summons (by 18 October 2012) was given, and the matter was fixed for hearing on 29 November 2012. This 29 November 2012 hearing date had to be adjourned due to availability problems in relation to the parties' legal representatives. 8The matter came before me on 23 November 2012 to fix a new hearing date. I listed the matter for hearing on Tuesday 11 December 2012, this being the only date convenient to counsel. A timetable was put in place for submissions on behalf of the plaintiff to be provided by midday Monday 3 December 2012 and for the defendant's submissions in reply by midday Monday 10 December 2012. The purpose of the timetable was to enable the matter to be heard and resolved as expeditiously as possible, taking into account that the hearing was to take place in the last week of term. 9Submissions totalling 28 pages were received from the plaintiff's counsel on 3 December 2012. On 5 December 2012, Mr Sweet provided a revised version of his written submissions, totalling 33 pages. The covering letter identifies the changes as having been underlined and including additional material; the letter states that further submissions would be provided "as soon as time permits". On the afternoon of 7 December 2012, Mr Sweet provided 60 pages of written submissions. This was double the length of the previous submissions, and the contents were difficult to read by reason of the extensive underlining, use of bold and/or italicised print, and use of capital letters, all for emphasis purposes. As my associate and I were in court all afternoon, and there had been no notification that submissions would be sent on Friday 7 December 2012, these submissions were not seen by me until the morning of Monday 10 December 2012. 10At 4pm on Monday 10 December 2012, when the submissions of the defendant had not been received, my associate forwarded an enquiry to the parties as to whether the matter would be ready to proceed by reason of the service of so much material so far out of time in accordance with the timetable. In reply, Ms Castle, counsel for Ms Sultana, provided draft submissions totalling 30 pages, in which she set out as many of the matters as she has been able to answer in the intervening weekend between service of Mr Sweet's enlarged submissions on Friday afternoon and Monday 10 December 2012. Ms Castle advised that her client, who is seriously ill with mesothelioma, was anxious for these proceedings to be finalised and that in the circumstances she did not propose to seek any adjournment of these proceedings. 11When the matter came before me for hearing on 11 December 2012, Mr Sweet told me he had been unable to provide his submissions in full by the due date due to pressure of work. Although he received a draft of Ms Castle's submissions shortly after 4pm, a delay of four hours in accordance with the timetable, he said he was unable to meet them. He asked for an adjournment. 12While I told the parties it was my wish to continue with the hearing, as I had read all of these submissions which I had been provided, Mr Sweet told me he needed a further day to complete written submissions in reply. He provided me with a further seven pages of submissions which he had already prepared, and told me the matter was "complex". 13In the circumstances, I had no alternative other than to adjourn the proceedings to Friday 14 December 2012 at 2pm, this being the last day of term, as this was the only date available to counsel and the only way to accommodate the need of both parties to provide me with further submissions (Ms Castle having candidly acknowledged she had not dealt with all the issues raised by Mr Sweet). I told the parties it would not be possible for me to give an ex tempore judgment on Friday afternoon, and that this restricted my ability to give judgment before the end of term. I told them it would have to be handed down in the vacation, but as this is as inconvenient for the parties as it is for the court, I have had to do my best to prepare a written judgment (there being insufficient time to deliver an ex tempore judgment) to hand down this afternoon. As a result, there will be informalities and repetition in the presentation of my reasons. 14This problem has been compounded by Mr Sweet's failure to comply with the second timetable. I provided a further timetable for Mr Sweet to provide his submissions in reply by midday 12 December 2012. Since there would only be two hours on Friday afternoon to hear the matter, counsel for the defendant, Ms Castle, said she would provide submissions in reply by 9am Friday. 15Although Mr Sweet provided submissions by midday 12 December 2012, once again these were revised and further submissions were received on 12 December 2012 at 12:37pm and again on 13 December 2012 at 7:57am. 16I shall first set out a brief outline of the issues of law raised by the plaintiff, taken from Mr Sweet's submissions.

[4]

The nature of the appeal 17Mr Sweet says that this was a difficult and complex matter. The nature of these complexities is best illustrated by Mr Sweet's general overview in relation to grounds 15 and 16 of the appeal. 18At paragraph 3.15.1 of his written submissions, Mr Sweet summarises his client's complaints as follows: "it appears that some error has been made by the Costs Assessor and/or the Costs Review Panel, in exercising their discretion and that, having regard to the volume of material in the Interlocutory proceedings, the assessments (by both the Costs Assessor and the Costs Review Panel) are unreasonable or plainly unjust and that, in these circumstances, the Court may infer that there has been a failure to properly exercise the discretion which the law reposes in both the Costs Assessor and the Costs Review Panel" (written submissions, paragraph 3.15.1) 19Mr Sweet adds that while this is a case where "the nature of the error may not be readily discoverable, the exercise of the discretion is to be reviewed by this Court on the ground that a substantial wrong has in fact occurred; House v The Queen [1936] HCA 40; (1936) 55 CLR 499" (written submissions, paragraph 3.15.2). 20I am also invited to view "the size of the pile of paper" to conclude that "the Costs Assessor and/or Costs Review Panel have erred (which affirmed the determination of costs by the Costs Assessor, Mr Hartstein, issued on 15 February 2012) in determining that the appropriate amount for costs was $17,112.81". 21These submissions, and the proposals for what orders should be made, indicate misconceptions by the plaintiff concerning the decision appealed from, the jurisdiction and power of the court, and the nature of the appeal process. Mr Sweet has conflated the determinations by "the Costs Assessor and/or the Costs Review Panel". The shifting grounds of appeal which are discussed at length in the written submissions are described here as "some error" which "may not be readily discoverable". Reliance is placed on the history of the matter, claims of wrongful failure to provide documents and a failure to prove (such as tendering a resumé of the solicitors whose costs were claimed) rather than identifying with precision the specific errors of law in the decision making process. 22The first problem the plaintiff faces is the manner in which his summons has been framed. The nature of the costs assessment system, the limited issues upon which Mr Vumbaca may bring this appeal, and the identification of which decision the plaintiff is appealing from are matters about which the parties are at odds.

[5]

The nature of the costs assessment system 23The costs assessment system is fundamentally different from court proceedings. The costs assessment procedure is not intended to operate along the lines of a court, for the reasons explained by Johnstone DCJ in Bellevarde Constructions Pty Ltd v CPC Energy Pty Ltd (2011) 12 DCLR (NSW) 304; [2011] NSWDC 55. Counsel for the defendant has helpfully set out these differences in her written submissions (at page 15): Differences in the structure of the costs assessment system (a)Costs assessors are not judicial officers or officers of the Court; (b)Costs assessors are appointed from the ranks of practicing solicitors and barristers and are part-time; (c)The costs assessor's costs are paid by the parties; (d)The system is paper driven: there is no provision made in the Act for face-to-face appearances, or oral advocacy, before costs assessors; (e)There are no "rules of procedure" which regulate the procedural aspects of costs assessments, whereas rules in relation to Court procedure are extensive and specific (eg, the UCPR); (f)There is no formal system of pleading, in terms of a claim and a reply to the claim. There is an application made to the Manager, Costs Assessment, on a prescribed form, which requires the filling out of rudimentary details about the dispute; (g)Costs assessors do not have power to take sworn evidence or to compel the attendance of witnesses; (h)Costs assessments are not court proceedings; (i)Costs assessor's reasons are not published. They remain a private ruling between parties. 24In the Legal Profession Reform Bill 1993, Second Reading Speech, Hansard, 16 September 1993, p 3277, the Attorney-General explained the reason for replacement of taxation of costs as being to avoid a system which had become "overly formal, legalistic and complex". He went on to describe the taxation system as "adversarial, requiring an application to the court and often representation by a solicitor to seek taxation of costs. The system is unnecessarily complex and artificial with court officials spending lengthy periods going through piles of documents to determine a "winner" and "loser" on the issue of what is a "fair bill for service". The Attorney-General concluded, in the Second Reading Speech, that there was a need for "a faster, easier and cheaper system of review of bills of costs". 25The costs assessment process is "neither wholly judicial, nor wholly adversarial, as there are strong elements of an inquisitorial nature involved" (Bellevarde Constructions Pty Ltd v CPC Energy Pty Ltd, supra, at [31]). In the case of party/party costs assessments, a determination is made about the entitlement to costs following court orders, and the quantification of those costs. In particular, the function of a Costs Review Panel is to conduct an entirely fresh assessment of the costs. This means that fresh matters, such as the remedying of deficiencies or defects, can be taken into account. For example, in grounds 3, 4 and 6 the plaintiff submits that the Costs Assessor should have given a nil result to the plaintiff because the bill was submitted too soon (i.e. an interlocutory bill prepared before the triggering event of final judgment). However, this final judgment had been obtained when the Costs Review Panel (whose decision is the one appealed from, not the Costs Assessor's) reviewed the assessment of costs. The objections the plaintiff makes to the Costs Review Panel show a lack of understanding both of the identity of the decision appealed from and the nature of the appeal process. 26In addition to establishing an error of law, a party must also demonstrate that the error made justifies disturbing the assessment. Johnstone DCJ explained the importance of this requirement in (Bellevarde Constructions Pty Ltd v CPC Energy Pty Ltd, supra, at [16] as follows: "[16] Not only must a party who is appealing under s 384(1) establish an error of law, that party must also demonstrate that the error made justifies disturbing the assessment: Gorczynski v AWM Dickinson & Son [2005] NSWSC 277 at [22]. Thus it has been said by Associate Justice Malpass: The onus borne by the plaintiff is not merely to demonstrate error as to a matter of law arising in the proceedings to determine the application but also to demonstrate that any such error is material to the determination": Honest Remark Pty Ltd v Allstate Explorations NL [2008] NSWSC 439 at [24]. ... [whilst there has been an attack on the expression of the reasoning process, it has not been shown that the determination itself was erroneous and should be disturbed ... The onus borne by [the plaintiffs] has not been discharged": Skalkos v Assaf [2002] NSWSC 1221 at [17]-[18]." 27This is of particular importance in these proceedings, as one of the principal objections is that the Costs Assessor erred in deferring consideration of the costs against Mr Vumbaca until after Mrs Sultana's proceedings in the Dust Diseases Tribunal for compensation from the defendant responsible for the asbestos sheets was finalised.

[6]

Costs Assessor or Costs Review Panel? 28A party may appeal from a decision of a Costs Assessor to this court without recourse to the Costs Review Panel, or alternatively seek a review of the decision of the Costs Assessor by the Costs Review Panel: Bellevarde Constructions Pty Ltd v CPC Energy Pty Ltd, supra. Where a party has made the election of a review by the Costs Review Panel, any appeal is from the decision of that Panel, and not from the Costs Assessor, contrary to the submissions of Mr Sweet (first written submissions, paragraphs 2.1-2.4). 29The appeal from the decision of the Costs Review Panel is governed by s 382 Legal Profession Act 2004 (NSW). Mr Sweet concedes (paragraphs 2.8-2.9 of his written submissions) that the appeal must be brought pursuant to s 384, and not s 385, of the Legal Profession Act 2004 (NSW). This means that the entitlement to appeal is restricted to errors of law. 30The need to identify with precision the errors of the Costs Review Panel on issues of law needs to be seen in the context of other analogous statutory appeals to this court. The District Court's power, as an inferior court, is statutory (Dayeian v Davidson (2010) 76 NSWLR 512; [2010] NSWCA 42 at [38]). It does not have jurisdiction to grant prerogative relief. The Court of Appeal explained these powers in Dayeian v Davidson, supra, at [38] as follows: "[38] Indeed, the bringing of an appeal under s 67(1) is inconsistent with alleging jurisdictional error in the proceedings below, (unless a jurisdictional question was raised before the Tribunal and decided by it (67(8)), which was not the case here). An appeal under s 67(1) proceeds on the basis that there has been a decision of the Tribunal with respect to a matter of law, and that the appellant contends that that decision is wrong. In contrast, an applicant for judicial review on the basis of jurisdictional error alleges that there has been a purported decision, that in the eyes of the law is not a valid decision because a legal requirement for exercise of the Tribunal's jurisdiction has been breached. When the appeal under s 67(1) lay to the Supreme Court, it was open to a litigant dissatisfied with a decision of the Tribunal to bring proceedings under s 67(1) and in the alternative seeking relief in the nature of prerogative relief, eg Bahadori v Permanent Mortgages Pty Ltd [2008] NSWCA 150; (2008) 72 NSWLR 44. Now that appeals under s 67(1) lie only to the District Court, which has no jurisdiction to make orders in the nature of prerogative relief, it will be necessary for a person dissatisfied with a decision of the Tribunal to analyse carefully the reasons for dissatisfaction, as those reasons will affect the choice of the appropriate forum in which to challenge the decision." District or Supreme Court? 31In submissions in reply, Mr Sweet responds to Ms Castle's submissions concerning the District Court's lack of jurisdiction to grant prerogative relief or to entertain a submission about a general error of law. Mr Sweet concedes that under s 384 Legal Profession Act 2004 (NSW) the District Court's jurisdiction does not permit the plaintiff to seek prerogative relief or invest this court with plenary jurisdiction but submits that a plaintiff may be able to argue a "general error of law" referring to Larsen v Vile [1999] NSWCA 397. That was a summons filed in the Supreme Court, a court which does have such jurisdiction. The question of the more limited jurisdiction of the District Court was not considered by the Court of Appeal and this decision should not be taken to have extended the District Court's powers. Mr Sweet also refers me to the description, in Gorczynski v AWM Dickinson and Son [2005] NSWSC 277 at [14] of the need to establish "some error of law" as indicative that a general error of law is sufficient for an appeal. Mr Sweet also refers me to the discussion of errors of law in Kostas v HIA Insurance Services Pty Ltd t/as Home Owners Warranty (2010) 241 CLR 390; (2010) 270 ALR 228; (2010) 84 ALJR 663; [2010] HCA 32. Mr Sweet submits that the High Court in Kostas v HIA Insurance Services Pty Ltd t/as Home Owners Warranty, supra, did not conclude that the term "question with respect to a matter of law" excluded any submissions being made as to an "error of law". 32At paragraph 2.4.9(e), Mr Sweet notes that the High Court at [73] noted the Tribunal was "not bound by the laws of evidence" and "may inquire into and inform itself on any matter as it thinks fit subject to the rules of procedural fairness" was to "act with as little formality as the circumstances of the case permit", "without regard to technicalities or legal forms" and "as expeditiously as possible". Mr Sweet goes on to say that this clear differentiated the Tribunal from "the procedure in this Honourable Court" (at paragraph 2.4.9(e)). However, as Basten JA goes on to note at [84], this does not mean that if an error of law can be established that the door was open to the determination of other questions of fact or law (or mixed fact and law). Nor does it mean that this court should superimpose, on appeal, the very technicalities that the costs assessment process was designed to avoid. 33Mr Sweet acknowledges the bifurcated jurisdiction (namely, the right to an appeal to this court under s 384, and a parallel jurisdiction to seek relief under s 69 Supreme Court Act 1970 (NSW) in the Supreme Court) at pages 14 to 15 of the submission without further comment. However, the purpose of including the text of s 69 Supreme Court Act 1970 in full becomes clear at paragraphs 2.9.1 and 2.9.2 where Mr Sweet states: "2.9.1 Counsel for the Defendant submits [para 59 CDS] a complaint that a Tribunal of Fact has "failed to accord procedural fairness", is an error in respect of which "prerogative relief" would be granted. 2.9.2 It is respectfully submitted that, whilst that may be the case, that does not prevent such a matter being dealt with under what has been referred to as the "bifurcated jurisdiction", in that this decision, as to a matter of law, attracts the jurisdiction of this Court pursuant to Section 384 of the Legal Profession Act 2004." 34Essentially what Mr Sweet is saying is that while a lack of procedural fairness may be grounds of seeking prerogative relief, it can just as easily be regarded as a decision as to a matter of law, and thus a matter falling within s 384 Legal Profession Act 2004. A similar submission is made at paragraphs 2.10.2, 2.11.2, 2.14.2 and 2.15.2. 35As I have indicated in relation to each of these grounds, I am satisfied that there has in fact been no lack of procedural fairness, or failure to consider issues, or failure to give proper reasons, for factual reasons. However, I do not accept the submission that issues which properly belong within the jurisdiction of the Supreme Court by reason of the bifurcated jurisdiction can be recast in this fashion, or dressed up as errors of law, in order to confer upon this court a jurisdiction which ought properly to be exercised elsewhere. Since this is an appeal in relation to the relatively modest sum of $17,112.81, and this is an ex tempore judgment given on the last day of term, I shall do no more than note these observations. 36Ms Castle submits, and I accept, that the court's power under s 384 is a narrow one, in that it is restricted to those aspects of the decision of the Costs Review Panel which deal with matters of law. This need for precision has been discussed in the context of Consumer, Trader and Tenancy Tribunal (CTTT) proceedings by French CJ in Kostas v HIA Insurance Services Pty Ltd t/as Home Owners Warranty, supra, at [33] as follows: "[33] An appellant invoking s 67 should identify the decisions of the Tribunal of questions with respect to matters of law which are the subject of the appeal. A decision of a question with respect to a matter of law is not merely a condition of the jurisdiction conferred by s 67, it is the subject matter of that jurisdiction. The requisite identification did not happen in this case. Nevertheless, the grounds of appeal to the Supreme Court asserted errors of law and of mixed law and fact on the part of the Tribunal constituting, or reflective of, decisions amenable to appeal under s 67. They raised a number of questions including that which is dispositive of this appeal, namely, whether there was any evidence before the Tribunal upon which it could make particular findings. That is a question of law." 37The only valid subject matter of this appeal is a consideration of those parts of the Costs Review Panel which relate to matters of law. Whether a question is a matter of law is not a matter of form or drafting but of substance: Edyp v Brazbuild Pty Ltd [2011] NSWCA 218 at [37]. 38In particular, as Basten JA noted in Obieta v Consumer, Trader and Tenancy Tribunal (NSW) [2009] NSWCA 220 at [6], the subject matter of an appeal must be on a matter of law and it is not sufficient that there may have been some error of law such as procedural unfairness in the manner in which the tribunal determined the case before it. Basten JA expressly noted the applicability of these principles to "other similar provisions" (at [6]) in other legislation. Only in specific circumstances such as procedural error (for example, the denial of an adjournment) could there be said to be procedural unfairness. In Yazbeck v Abreu (2010) 11 DCLR (NSW) 43; [2010] NSWDC 113, Truss DCJ carefully and clearly sets out and explains the applicability of Dayeian v Davidson, supra, in such matters, and the decision of Knox SC DCJ in Strangas & Son Building Contractors Pty Ltd v Lim (2012) 14 DCLR (NSW) 222; [2012] NSWDC 72. Although both decisions deal with other legislation, the same principles apply. 39In summary, for there to be an appeal under s 384 as to a matter of law, there must be a decision as to a matter of law identified, which is established to be erroneous. Alternatively, prerogative relief should be sought under s 69 of the Supreme Court Act 1970 (NSW), but such relief must be sought in the Supreme Court, and not form part of this application. 40Although many of the grounds of appeal sought to appeal from errors made by the Costs Assessor, the plaintiff now concedes (written submissions received on 13 December 2012, paragraph 2.2.6) that it is "technically correct" for the appeal to lie only from the Costs Review Panel. Mr Sweet submits, however, that in "affirming" that decision, the Costs Review Panel should be taken to have made "exactly the same errors of law" (paragraph 2.2.6), and that his submissions should be read in this light. 41This brings me to a consideration of the 16 grounds of appeal.

[7]

Grounds of appeal 42The 16 grounds of appeal are as follows: (1)That the Costs Assessor and the Costs Review Panel both erred in law, in proceeding to assess the costs contained in a document, dated 20 July 2011, headed "PARTY/PARTY BILL OF COSTS", including 136 numbered claims for fees, expenses and GST amounting to $21,351.75, in that this Bill of Costs was not submitted thirty (30) days before the Application for Assessment of Costs was filed, that Application having been filed in the Supreme Court of New South Wales on 22 July 2011. (2)That the Costs Review Panel erred in law in that it did not find that the Costs Assessor had erred in failing to expeditiously proceed with the assessment of the costs, contained in a document headed, "Assessed Tax Invoice", dated 8 April 2011, claiming costs of $17,378.22. (3)That the Costs Review Panel erred in law in that it affirmed the decision of the Costs Assessor not to expeditiously proceed to an assessment of costs, on or about 24 October 2011, in circumstances where the Costs Assessor had formed a view that, at that stage, that the Costs Applicant could not be liable to pay any costs or disbursements in that its Application for Assessment of Costs would fail by reason of the indemnity principle in circumstances where: (a)The Plaintiff requested the Costs Assessor to immediately proceed to an assessment; and (b)Rule 42.7 of the Uniform Civil Procedure Rules 2005 provides that costs in interlocutory proceedings do not become payable until the conclusion of the proceedings. (4)That the Costs Assessor, having commenced to deal with the Application for the Assessment of Costs on or about 24 August 2011, whilst correct in reaching: (a)The "preliminary view" that the "triggering event", required by paragraph 5 of the Costs Agreement between the Defendant and Turner Freeman, had not occurred; (b)with the result that "the Costs Applicant cannot be liable to pay any costs or disbursements" in "relation to her claim or the investigation of her claim"; and (c)that because of "the application of indemnity principles" which would "dictate that the Application for Assessment cannot be maintained", erred in law in not thereupon proceeding to issue a Certificate of Determination of Costs, pursuant to section 368 of the Legal Profession Act 2004, and a Certificate of Costs of the Assessment, pursuant to section 369 of the Legal Profession Act 2004. (5)That the Costs Review Panel erred in affirming the Certificate of Determination of the Costs Assessment of Costs Assessor, David Bernard Hartstein, issued on 15 February 2012, in circumstances where that Costs Assessor did not proceed to an Assessment of Costs at the earliest possible opportunity and having declined to do so, gave an assurance that an adjustment would be made in favour of the Defendant pursuant to section 369 of the Legal Profession Act 2007. (6)That the Costs Review Panel erred in law in affirming the decision of the Costs Assessor to delay the assessment of costs until such time as the Defendant had settled and/or conducted its claim in the Dust Diseases Tribunal. (7)That the Costs Assessor and/or the Costs Review Panel erred in law in failing to accord to the Plaintiff procedural fairness in that it did not provide the Plaintiff or order the Defendant to provide the Plaintiff with the following documents: (a)A copy of the Costs Agreement it entered into with Turner Freeman, dated 4 March 2010; (b)A copy of the Costs Agreement between Turner Freeman and Mr Spiro Tzouganatos, the Barrister it briefed to conduct the Defendant's case in the Dust Diseases Tribunal; (c)A copy of the Terms of Settlement that the Defendant entered into in the substantive proceedings in the Dust Diseases Tribunal on 31 October 2011. and erred in law in failing to properly consider those documents. (8)That the Costs Review Panel erred in law in not reversing the findings of the Costs Assessor, in circumstances where there was no evidence, before either the Costs Assessor or the Costs Review Panel, that the Defendant had paid the costs the subject of assessment or that a bill had been rendered to it for those costs, given that, in not doing so, it ignored the indemnity principle, namely that a party cannot recover from another party more costs than he or she has paid or is liable to pay to its own legal practitioner. (9)The Costs Assessor and the Costs Review Panel both erred in law failing to take into account the contents of the "Assessed Tax Invoice", dated 8 April 2011, issued by the Defendant to the Plaintiff in that, as a matter of law, regard should have been had to this earlier Bill of Costs. (10)The Costs Assessor and the Costs Review Panel erred in law in that they each assessed the costs by an "item by item" approach to the document headed, "PARTY/PARTY BILL OF COSTS", in that a Costs Assessor is required to assess the entirety of the costs the subject of the Application and not each individual item. (11)The Costs Review Panel erred in law in concluding that the Costs Agreement, dated 1 March 2010, did not apply to the "access proceedings". (12)That the Costs Assessor and the Costs Review Panel erred in law, in that both failed to properly consider, pursuant to section 364 of the Legal Profession Act 2004, whether or not: (a)The work was carried out in a reasonable manner in that they both failed to consider, (b)what a fair and reasonable amount was for the costs of the work performed, in that no reasons were given to support any such finding. (13)That the Costs Review Panel erred in law in concluding that: (a)The hourly rate for the Partners, Ms Judith Horobin and Mr David Taylor, of $475.00 per hour was "fair and reasonable", in that Ms Horobin was a Partner with "long experience in the specialised work in dust diseases", when there was no evidence, before either the Costs Assessor or the Costs Review Panel, as to the extent of her experience or specialty and the Costs Agreement, dated 4 March 2010, indicated the rate for "Partners" was "$380.00 to $475.00"; and (b)In concluding that the rate of $350.00 per hour for Ms Pascoli was a reasonable rate when there was no evidence before the Tribunal of her qualifications or experience, given that the Costs Agreement, dated 4 March 2010, indicated that the rate for "Associates" was "$275.00 to $350.00". (14)That both the Costs Assessor and the Costs Review Panel erred in allowing for the cost of work done by clerical assistants and paralegal assistants when such work would have been covered by a professional hourly rate. (15)That the Costs Review Panel erred in concluding that, having examined the original material including the "Summons and Affidavits" and "some correspondence passing between the parties and the Panel", that the amount of costs, allowed by the Costs Assessor was "in an overall sense", "fair and reasonable". (16)That the Costs Review Panel erred in law in affirming the determinations made by the Costs Assessor. 43I will deal with each of these grounds of appeal in numerical order.

[9]

Ground 2 45This ground, like ground 1, spins a web of facts which bear little relation to what actually happened. As is set out in the introduction to these proceedings, the 8 April 2011 bill was served on 11 April 2011 and was followed by a request on 13 April 2011 for an itemised bill. That itemised bill, 20 July 2011, was the subject of assessment, not the original bill to which objection had been taken. The sole relevance of the 8 April bill is the fact that the itemised bill was for a higher amount, which meant that the Panel had to take this into account when considering the 20 July bill, this being a relevant factor for consideration. 46As Ms Castle points out in her submissions in reply at [17], the short answer to this complaint is that the Costs Assessor and the Panel both did this; they made reference to the lump sum bill, and took it into account. The costs assessor expressly listed the April bill as a document he had (paragraph 1.4.4) and the claim that he "completely disregarded" and "should have made reference to" the April bill is incorrect. 47The decision of the Costs Review Panel (which is the decision which should be before me for consideration, and not the Cost Assessor's findings, a point which I note is relevant to all the plaintiff's submissions concerning the alleged shortcomings of the Cost Assessor) refers to the April bill between paragraphs 8.1-8.8, in some detail. This was in part in relation to the "estoppel" argument raised by Mr Vumbaca, namely that Mrs Sultana is estopped from making any further claims for items which were not included in the assessment of the April bill which, at $17,378.22, was $3,973.53 less than the July bill, and also for the reasons explained in both Florence Investments Pty Ltd v HG Slater & Co [1975] 2 NSWLR 398 at 407 and Gorczynski v AWM Dickinson and Son [2005] NSWSC 277. The Costs Review Panel considered there was no reason why a party should not include additional items or amounts prior to submitting a claim for party/party assessment. Although an assessor should be cautious in the examination of itemised costs that are greater than the amounts previously claimed in an earlier bill, the Costs Review Panel was satisfied that in examining each of the 136 numbered items, the Costs Assessor had exercised the appropriate caution. 48Professor G. E. Dal Pont in Law of Costs, 2nd ed., identifies the correct approach 2009 at [5.55]. Professor Dal Pont refers to Florence Investments Pty Ltd v HG Slater & Co, supra (at 404 per Bowen CJ in Eq) where the court held that, on taxation of an itemised bill, an earlier lump sum bill for a lesser amount does not limit the amount allowable, although weight should be given to that earlier bill. Although this decision relates to the taxation of costs regime in place at the time, the same approach has been held to apply under the present assessment of costs regime: Gorczynski v AWM Dickinson and Son, supra, at [19] per Harrison M. Professor Dal Pont notes there are cases where a judge has found error in a Costs Assessor's failure to give sufficient or any weight to a later bill, and draws attention to the helpful article by costs consultant Susan Pattison, "Does a lump sum bill act as an estoppel?", September 1999, 37 Law Society Journal 31. 49Professor Dal Pont goes on to note that each item in a bill must be considered according to the circumstances that applied to it, one of which may be an earlier bill. At [5.56]-[5.60], he sets out an analysis of cases where bills of costs were revised. In one of these, Re Lippiatt & Co Bill of Costs [1998] 1 Qd R 69, a subsequent and larger bill in taxable form was delivered after the client rejected the first bill, a situation analogous to the present. 50Ms Castle notes in her submissions in reply that it is difficult to see how any "practical injustice" was caused to the plaintiff by the way in which the Costs Assessor dealt with the April bill, given its detailed consideration by the Review Panel. I accept this submission, which conforms to the requirement for a ground of appeal explained by Johnston DCJ in Bellevarde, supra. 51Finally, it is important to note the difference between legal practitioners/client costs and party/party costs. A party/party bill can be amended until the conclusion of the determination of those costs: Davis v Dysart (Earl) (No 2) (1855) 21 Beav 124; (1855) 52 ER 805; M Wilson, "How to deal with bills under the new legal costs regime", (2006) 44(9) Law Society Journal 32. This decision was approved and applied in Moon v Woodward [1991] TASSC 35; Woodward v Moon [1991] Tas R 93, where an amendment to a bill during a taxation was permitted both at first instance and appeal. (This ability to amend the bill during the assessment process is another reason for rejecting grounds 3 - 6, concerning the deferring of the assessment while judgment was obtained against Amaca Pty Ltd, which is discussed below). 52For these reasons, Ground 2 of the appeal fails. 53The reference to "expeditiously" in this ground appears to overlap with the grounds of appeal in paragraphs 3, 4 and 6 and I have dealt with the question of asserted delay by the Costs Assessor in those grounds.

[10]

Grounds 3, 4 and 6 54Grounds 3, 4 and 6 relate to the circumstances in which the Costs Assessor reached a view that the costs applicant was not, prior to judgment against Amaca Pty Ltd in other Dust Diseases Tribunal proceedings, liable to the defendant for costs and deferred assessing the costs until those proceedings were concluded. It is submitted that the Costs Assessor erred in law by not immediately issuing a certificate of determination in favour of Mr Vumbaca for a nil amount by reason of the failure of the entitlement to costs to crystallise. This appears to be hinted at in ground 2 by reason of the reference to "failing to expeditiously proceed". 55These grounds conflate the decision of the Costs Assessor to defer consideration of Mrs Sultana's solicitor's fees until a "triggering event" occurred, namely the entry of judgment (see paragraph 5.3.2 of the decision under appeal), with the decision of the Costs Review Panel, which post-dated these events. By the time the Costs Review Panel was considering the assessment of costs, entry of judgment had occurred. The Panel took the view that there was a verdict in favour of Mrs Sultana in the main proceedings, which meant that any defect in the occurrence of the triggering event had been cured, these being proceedings by way of review. This means that if the plaintiff is correct, and that the costs should have been assessed at nil, rather than the Costs Assessor waiting until judgment, this problem no longer existed by the time the matter came before the Costs Review Panel. 56However, the Panel put its findings on two bases, as Ms Castle notes at [28] of her submissions in reply. One was that the triggering event had now taken place. The other was that the costs agreement did not apply to the access proceedings. This meant that there was no obligation on the solicitors for the plaintiff to wait until a successful conclusion of the main proceedings before having the costs against Mr Vumbaca assessed. This is because Mr Vumbaca was not the respondent in the proceedings for damages, but a respondent in separate proceedings, and because once access was obtained, those proceedings had reached finality. 57Mr Vumbaca was not a party to Mrs Sultana's proceedings against Amaca Pty Ltd. Professor Dal Pont deals with a number of issues arising in relation to costs and non-parties in Chapter 22 of the Law of Costs. He notes, for example, that costs orders against non-parties are supplemental in nature and irrelevant to the entry of judgment in that an order for costs may be obtained long after judgment. By analogy, the costs similarly do not depend upon the success or failure of a party in the litigation in question; they depend on the issues between the non-party and the person seeking costs. Costs against non-parties fall outside the common law rule for finality of litigation: see the cases discussed in Peter Breese & Associates Pty Ltd v CCI Holdings Ltd (2004) 2 DCLR (NSW) 157. The same principle would apply, by analogy, to proceedings against other persons for relief such as discovery before commencing action against some third party. 58The most common applications of this kind are applications in relation to subpoenae against non-parties, although these applications are generally heard in the main proceedings (as both parties are interested in the documents) and there are special costs rules. Failure to answer a subpoena is the subject of specific rules (see UCPR r 33.4 and the cases Ritchie's Uniform Civil Procedure at [33.4.50]; see the notes at [98.25(h)]). In Re Bauhaus Pyrmont Pty Ltd, supra, a person who resisted production was not formally a party but was held to be a "party" nonetheless. In Marsden v Amalgamated Television Services Pty Ltd [2001] NSWSC 510, Levine J made costs orders concerning a number of subpoenae issued by the defendant to third parties, which were set aside with costs. These costs were assessed and paid prior to judgment. To require the party seeking to set aside subpoenae, or seeking discovery before action, to wait for the "triggering event" of success in litigation, perhaps years later, because of costs agreement requirement in litigation to which they were not a party, would be contrary to principles of finality in litigation. 59There is no rule that plaintiffs in a "no win no fee" costs agreement are in a worse position than parties with costs agreements of a more traditional kind. For example, if a costs order is made that a party's costs are assessable forthwith, the person against whom such an order was made could not argue that such a costs order could not be made, and was unenforceable, because the costs agreement required the plaintiff to wait until the successful conclusion of all litigation before being permitted to claim costs. 60If I have erred in this finding, I make the following observations. Firstly, I am of the view that the Costs Assessor (and for that matter the Costs Review Panel) would have been acting in accordance with the policy behind the legislation in so doing. To dismiss the assessment of costs as premature and require it to be lodged in circumstances where (as subsequently occurred) the delay in question could be extremely short would be pedantic and inconsistent with those principles, as well as the principles discussed in Kostas v HIA Insurance Services Pty Ltd t/as Home Owners Warranty, supra, at [73]. 61Secondly, if I have erred in relation to these findings, I am not satisfied that any error made by the Costs Assessor in delaying the determination until the "triggering event", or in the Costs Review Panel's refusal to set the assessment aside, justifies disturbing the assessment: Gorczynski v AWM Dickinson & Son [2005] NSWSC 277 at [22]; Honest Remark Pty Ltd v Allstate Explorations NL [2008] NSWSC 439 at [24]; Skalkos v Assaf [2002] NSWSC 1221 at [17]-[18]; Bellevarde Constructions Pty Ltd v CPC Energy Pty Ltd, supra, at [16]. I drew this helpful passage of Bellevarde explaining these principles to the attention of Mr Sweet during the hearing of these proceedings this afternoon. 62Thirdly, I accept the submissions made by Ms Castle in her submissions in reply that if the costs agreement was applicable, then there was finality warranting assessment, because the proceedings against Mr Vumbaca were concluded. 63The plaintiff's submission that the application to have the costs of the summons against Mr Vumbaca assessed before the hearing on the merits of Mrs Sultana's claim against Amaca Pty Ltd is "foredoomed to failure" is based upon a misconception of UCPR r 42.7. UCPR r 42.7 relates to costs of interlocutory proceedings between the parties to litigation. The proceedings between Mrs Sultana and Mr Vumbaca and the Dust Diseases Tribunal were not interlocutory. In such circumstances, costs orders may be made under s 98: Re Bauhaus Pyrmont Pty Ltd (2006) 67 NSWLR 289; [2006] NSWSC 879. Mr Vumbaca was a party to other proceedings, namely the separate application brought against him in the Dust Diseases Tribunal, which bore proceedings number DDTX006 of 2010. Orders of a final nature, namely access to Mr Vumbaca's home, had been made. There was no other issue, in the relief sought by Mrs Sultana against him, to be determined. Whether she succeeded or failed in the proceedings she brought against another party had nothing to do with her claim against Mr Vumbaca. The plaintiff's submissions on this issue are misconceived. 64This brings me to what appears to be an alternative basis upon which the indemnity principle is invoked as a shield against any payment to Mrs Sultana of any legal fees. The claim appears to be that Mrs Sultana was not liable to pay any costs or disbursements at the time of this judgment, or indeed at all, unless she won the case (a "no win no fee" agreement), or alternatively she cannot recover those costs without proof of payment. The costs indemnity principle is, however, a principle resting on the presence of an agreement not to charge for the legal services provided, and not upon the existence of an enforceable obligation in a specific amount. Hodgson JA explained in Wentworth v Rogers (2006) 66 NSWLR 474; [2006] NSWCA 145 at [45]: "[45] The indemnity principle is long-established at general law. It is however not to be applied rigidly, or uninfluenced by statute or by practice recognised by statute, such as in relation to conditional fee agreements. I do not agree with the amicus' submissions that the principle has ceased to exist. Certainly there have been inroads to it brought about by the Act and by analogical reasoning from recognised exceptions. Where a party to an action has an agreement with their legal adviser that they do not have to pay any costs, then the general law principle states that that party cannot recover party and party costs against their adversary: McCullum v Ifield [1969] 2 NSWR 329 at 330 per Taylor J citing Gundry v Sainsbury [1910] 1 KB 645." 65Hodgson JA went on to note with approval (at [46]) a decision to this effect by Master Malpass in Howard & Ors v Mechtler & Ors [2000] NSWSC 455: "[46] This principle has been applied to applications for assessment of party and party costs under the Act. Thus in Howard & Ors v Mechtler & Ors [2000] NSWSC 455 at [11] Master Malpass observed: Under an order for costs, the paying party is only obliged to pay such costs as the receiving party was primarily and potentially legally obliged to pay to his solicitor. There is an indemnity only in respect of the costs covered by the order. A receiving party cannot recover a sum in excess of the liability to his own solicitor. ... It is necessary to prove that under no circumstances does the client have any liability to pay costs to his solicitors." 66The principle is that the costs indemnity principle does not require the costs have been paid, but instead that there is a liability to pay them. This much is made clear in CSR Ltd v Eddy (2008) 70 NSWLR 725; [2008] NSWCA 83 where the plaintiff's solicitors sought to recovery costs from the plaintiff without first delivering the bill of costs to the defendant. Basten JA stated at [50]: "[50] There are a number of difficulties with this submission. The first is that, as a matter of contract, a statement that the solicitors would send the client a bill is not apt to condition the existence of the legal obligation upon receipt of the bill. Although the bill would provide a quantification of the liability, the liability is incurred upon the provision of the services, although payment may not be immediately due and owing. Further, the amount or amounts identified in the bill will not necessarily constitute the legal liability of the client, who is entitled to obtain the determination of a costs assessor as to the amount of a fair and reasonable payment." 67The obligation required to satisfy the indemnity principle is a primary obligation by the client to pay the solicitors. That is the case here. 68Mr Sweet's written submissions refer to Professor Dal Pont's Law of Costs (2nd ed., 2009) (written submissions, at [3.5.6] and [3.5.7]) on the alternative ground for this submission, which is that whether or not the Costs Assessor deal with the claim immediately or delayed it, no costs were payable in any event under the costs indemnity rule. However, the statement at [7.10] is a statement of general principles. Professor Dal Pont goes on to discuss in specific terms the terms of a retainer or costs agreement providing for a "no win no fee" representation. As Professor Dal Pont points out at [7.15], outside the scenario of pro bono representation, the terms of a retainer may provide for a "no win no fee", in which case there is a subject matter over which the costs indemnity may apply in the event of a costs order in favour of the client on a successful claim. 69In addition, as is noted elsewhere, if the proceedings against Mr Vumbaca fell outside the costs agreement (which related to the proceedings against Amaca Pty Ltd) none of these arguments would be available. 70This appeal ground fails as well.

[13]

The costs agreements (documents (a) and (b)) 74The Costs Assessor by letter 9 September 2011 to Russo & Partners noted he had not received the costs agreement (which had been omitted from the letter of Turner Freeman of 31 August 2011) and went on to say: "Ordinarily, documents are provided by the parties to each other. However, in relation to costs agreements, in my experience, if the costs applicant claims privilege and/or confidentiality in relation to the costs agreement, the usual practice is that a copy of the agreement is provided only to the costs assessor and the submission/request from the Costs Respondent is that the costs assessor be satisfied that there is no breach of the indemnity principle. I understand that the present proceedings were brought prior to the institution of the proceedings claiming damages against Amaca and for the purpose of identifying a defendant to sue in those proceedings. I anticipate that the Costs Respondent queries whether the Costs Applicant had a costs agreement with Turner Freeman Lawyers which applies to these proceedings or whether, if the agreement is on a "no win no fee" basis (such as is commonly the case with plaintiff lawyers in personal injury matters), the "win" event has (yet) occurred to trigger the obligation in the Costs Applicant to pay costs in these proceedings. If I have anticipated correctly, I note that submissions along such lines are commonly made and addressed by costs assessors and I do not propose to provide a copy of the Costs Agreement or to request Turner Freeman Lawyers to provide a copy of their Costs Agreement to the Costs Respondent. If I have anticipated incorrectly and there are other reasons that the Costs Respondent alleges he needs access to the Costs Agreement, I allow the Costs Respondent until Monday 19 September 2011 to provide those reasons." 75The Costs Assessor was inviting the plaintiff to indicate reasons for requiring the costs agreement. The plaintiff's response, set out in the objections dated 27 September 2011 (Exhibit SR1, pages 45-56) showed that the plaintiff changed his approach in relation to the provision of the costs agreement. He no longer asserted that he required it in order to make objections; instead, he requested the Costs Assessor ensure that the costs indemnity principle had not been breached. This is made clear by the contents of the Notice of Objection: "This is a party/party Bill of Costs and Vumbaca request the Costs Assessor call for the production of the Cost Agreement, disclosure documents and bills to the client to ensure that the cost indemnity principle has not been breached. Party/party costs are awarded by way of indemnity to the party entitled to the costs order Gundry v Sainsbury (1910) 1 KB 645, Carson v Pickersill (1885) 14 QB 859. The solicitors are only entitled to an indemnity for legal costs actually incurred. On the basis of the agreement as we understand it with persons who deal with Turner Freeman in respect of these types of claims; there has been no trigger to entitle Turner Freeman to any costs at all." 76The defendant submits, and I accept, that the plaintiff had abandoned the earlier request to see the costs agreement, and was instead requesting the Costs Assessor to ensure that the costs indemnity principle had not been breached. The Costs Assessor would have been entitled to consider at that point that the request for the copy of the costs agreement had been abandoned. (I note no submissions have been made as to issues arising from failure to provide the costs agreement from Mr Tzouganatos.) 77Both parties refer me to CSR Ltd v Eddy, supra, where a party failed to provide a costs agreement in circumstances where an objection was raised as to whether liability to pay costs had arisen. The court held at [38]: "[38] Once it has been accepted that the costs assessor had power to deal with the objection, which was based, at least in part, on the content of the costs agreements, it would seem that the appellants were entitled to be provided with copies of those agreements, so that they could make appropriate submissions in support of their objection. That they were unable to do, but that alone is insufficient to establish procedural unfairness. They still need to establish that the failure to provide them with the costs agreements caused them "practical injustice": see Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6, at [37]-[38] (Gleeson CJ); see also the reference to an "entirely speculative" adverse reaction, at [59] (McHugh and Gummow JJ) and see [149] (Callinan J). The appellants must demonstrate that they have in a practical sense lost an opportunity to make some submission material to the question in issue because they did not have access to the costs agreements." 78The court went on to explain that there are three categories of complaints of unfairness (at [39]): "[39] Care must be taken in relation to the application of phrases such as "practical injustice" which can, taken out of context, appear to have a broad and indefinite scope of operation. There is a distinction to be drawn between a complaint of unfairness where, on proper examination, it may be perceived that the unfairness is not established, and a case where unfairness has been established but the decision was inevitable, so that a grant of relief would be futile. In Lam a departmental officer told the applicant that he intended to make certain inquiries, but did not in fact do so. The failure to inform the applicant of the change of plan could have been unfair if the applicant had omitted to take some step in reliance upon the officer's intention, as originally communicated. Because the applicant was not deprived of any opportunity to put his case as fully as he wished and because he did not in fact rely upon the stated intention to his detriment, there was no unfairness in a practical sense. It is only when unfairness has been established that a second question arises, namely whether the lost opportunity could possibly have made any difference to the outcome. In Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 ; [2000] HCA 57, the Tribunal wrongly told the applicant that it had certain material before it. The existence of the material was relevant to the credibility of the applicant. The applicant gave evidence on an application for judicial review that he had been misled by the statement and that, had he known it to be incorrect, he would have taken certain steps which he did not take, to demonstrate the consistency of his position and hence bolster his credibility. As explained by Gleeson CJ at [4]: It is possible that, even if the prosecutor had been given an opportunity to deal with the point, the Tribunal's ultimate conclusion would have been the same. But no one can be sure of that. Decisions as to credibility are often based upon matters of impression, and an unfavourable view taken upon an otherwise minor issue may be decisive." 79Not only did the plaintiff not lose any opportunity to make submissions (a relevant issue in relation to procedural fairness), but the Costs Assessor decided this point in favour of Mr Vumbaca, as is set out in his letter of 24 October 2011. The Costs Assessor in fact deferred (wrongly, in my view) consideration of the costs until such time as there was finality in the main proceedings. The error identified in CSR Ltd v Eddy, supra, was a denial of procedural fairness, not denial of the right of inspection of a document. This was a denial of an opportunity to put submissions on a relevant point. That is not the case here. The Costs Assessor himself took up the substance of complaint and agreed with it, and in those circumstances, whether the plaintiff's legal advisors saw the document or not, there was no denial of procedural fairness or legal error by the Costs Assessor resulting from the failure to see the document. In addition, not only was the decision favourable to Mr Vumbaca but, once again, it was a decision of the Costs Assessor, not the Costs Review Panel. This ground of appeal must also fail.

[15]

Ground 8 83Ground 8 and ground 6 overlap to a degree, in that both arise from an application of the "no win no fee" provisions in the costs agreement. The plaintiff submits that the Costs Assessor correctly noted that clause 5 of the costs agreement meant that the solicitors for the defendant were not entitled to render a bill to the defendant until the substantive proceedings in the Dust Diseases Tribunal were either settled or had proceeded to a final hearing. Although this was correct, it was submitted that the Costs Review Panel erred by not reversing the decision of the Costs Assessor to delay the assessment of the proceedings until the substantive proceedings in the Dust Diseases Tribunal had either settled or been resolved. This is despite the fact that the "triggering event" in question had occurred by the time the matter came before the Costs Review Panel. In addition, it is submitted that any intentional delay by a judicial officer until some indeterminate date in the future, notwithstanding a request from the recipient of that application for the matter be dealt with expeditiously, is "unquestionably an error of law" (paragraph 3.8.12). No authority is cited for this submission. 84The entitlement of Mrs Sultana to costs pursuant to the costs order is not challenged. The Costs Review Panel considered that the costs agreement was irrelevant to the recovery of costs and, in my view, this was correct. They also considered that, if the costs agreement did apply, the "triggering event" had now happened and, in my view, this finding was also correct. 85In the defendant's written submissions, Mr Sweet draws to my attention in relation to this ground, as well as the lack of procedural fairness ground that a "no evidence" claim cannot amount to a decision as a matter of law (paragraphs 82 and 83). If the basis upon which this ground is put is that there is no evidence that the bill rendered on behalf of Mrs Sultana's solicitors had been or would be paid, then this would clearly be an erroneous claim, as all that is required is a liability to pay the costs, not that the costs had been paid, nor is proof of actual delivery of the bill to the client necessary other than in the restricted circumstances discussed in CSR Ltd v Eddy, supra. As Basten JA pointed out in [50], the liability is incurred upon the provision of the services, although payment may not be immediately due and owing. Not only was there a successful outcome to the access proceedings, which required extensive legal work, but also the access proceedings were an essential prerequisite to the success of the plaintiff's main claim. 86Accordingly this ground must fail.

[17]

Ground 10 91The Costs Assessor examined each item, item-by-item, reducing and disallowing items 12, 26, 37, 39, 49, 53, 54, 59, 60, 70, 77, 79, 82, 83, 85, 92, 101, 117 and 120. It is submitted that the Costs Assessor adopted an "item by item" approach to the assessment, in that items were disallowed or reduced, and that in Bellevarde Constructions Pty Ltd v CPC Energy Pty Ltd, supra, at [32] and [45] this approach had been held to be impermissible. 92The first point I note is that this is an appeal from the Costs Review Panel, not the Costs Assessor. The complaint about the Costs Review Panel is that it failed to take into account that the April bill of costs (the lump sum bill) was $3,973.53 less, which meant that the Costs Review Panel failed to take into account what was "fair and reasonable" within the meaning of s 364 Legal Profession Act 2004 (NSW). 93The question of whether an "item by item" approach is acceptable was considered by Malpass M in Turner v Pride [1999] NSWSC 850 where his Honour noted (at [23]-[31]) as follows: "[23] At the outset, it has to be borne in mind that the regime established by the Act and the Regulation brings into operation an assessment process (as opposed to the taxation process which it replaced). It was the taxation process that involved an item by item consideration. There will be cases where the assessment task can be properly performed by a global approach. [24] The assessment process does not put in place any formal pleading or similar requirement. Largely, the regime involves an informal process intended to effect expedient and less costly resolution of disputes by experienced practitioners. There will be cases in which at least one party (if not all) will be acting in person. The amount in issue may be very modest. The role of the Costs Assessor is not performed in a court context. [25] In the case of assessment where there has been a costs order Form 3 requires the provision of stipulated information relating to the matter (see para5 of the Form). The attachment of a copy of a bill of costs is merely one method of giving that information. Whilst the prescribed procedure enables the lodging of an objection and a response prior to the lodging of the application, in many cases no objection is lodged. Despite the lack of objection, the procedure still sees the application being referred for assessment. [26] After the application has been referred by the Proper Officer, the conduct of the assessment is in the hands of the Costs Assessor. He has been given powers to exercise (s207). He is required to give the parties a reasonable opportunity to make written submissions and he is bound to give due consideration to any submissions so made (s208). He is required to make a decision or determination (including a determination as to the costs payable) in accordance with statutory requirements (inter alia s206). [27] The language of the Act has thrown up its fair share of problems. The history of the assessment regime has seen Costs Assessors presented with a host of contentious situations. The debate thrown up in the present case is but one of many. [28] A Costs Assessor is placed in the position where each assessment has to be conducted on a case by case basis. In some cases, the areas of dispute may be well defined by the relevant documentation. In others, it may provide little assistance. However the task may be presented to him, he is ultimately left to resolve the application by decision or determination which complies with the statutory requirements. [29] I should digress to observe that pleading processes do not confine the jurisdiction or power of a court or tribunal. Their function is to define and narrow issues. Generally speaking the parties select the issues which they wish to agitate and the court or tribunal resolves the dispute by a determination of those issues. But, this is not always the position. There are cases in which the selected issues will not be determinative of the real questions involved in the case. In those cases the court or tribunal must address the real issues, so that justice is done between the parties and the dispute is determined according to law. [30] In the case of a Costs Assessor, what is required is a performance of statutory functions and the discharging of statutory duties. It may be that in most cases the resolution of issues raised in the assessment will produce a result which discharges the duty to comply with statutory requirements. But, this will not always be the position (even in cases where issues have been well defined). [31] Without seeking to be exhaustive, I mention these matters as illustrations of situations where there may be a need for the decision maker to depart from any selected issues and address other considerations for the purpose of making a decision according to law." 94In Frumar v the Owners of Strata Plan 36957 (2006) 67 NSWLR 321; [2006] NSWCA 278 at [64] the New South Wales Court of Appeal, referring to the principles discussed in Turner v Pride, supra, noted that each case must be considered for its own circumstances, adding that in Attorney-General of New South Wales v Kennedy Miller Television Pty Ltd (1998) 43 NSWLR 729 Sperling J's description of "specifying the items which have been reduced by what amount and for what reason in each instance" was accepted as an effective explanation of deductions. See also M Wilson, "How to deal with bills under the new legal costs regime", (2006) 44(9) Law Society Journal 32. 95As the Panel points out in the concluding paragraphs of its review, the "item by item" approach was necessary in order to deal with Mr Vumbaca's complaints that the charges were "grossly excessive". Having raised these objections in this fashion, Mr Vumbaca should not now be heard to complain about an approach resulting from his own submissions. 96See also Honest Remark Pty Ltd v Allstate Explorations NL, supra, at [24] where Malpass AJ rejected a similar attack on an "item by item" review by the Costs Review Panel. 97The plaintiff's written submissions do not identify any specific error flowing from the "item by item" rather than "global" approach. Rather, their principal objection is that the Costs Review Panel failed to take into account the earlier bill and therefore failed to determine what was fair and reasonable. I refer again to the principles set out in Bellevarde at [16]. 98The Costs Review Panel did take into account these two bills, and the difference in size, as is set out in paragraphs 8.1 to 8.8 of their reasons. I can detect no error of law in their reasons. This ground must fail.

[18]

Ground 11 99The plaintiff submits that the Costs Review Panel erred when holding that the fee agreement between Mrs Sultana and her solicitors in relation to the Dust Diseases Tribunal proceedings did not apply to the access proceedings. Counsel for the plaintiff submits that "the finding by the Costs Review Panel to the contrary was clearly an error that, [sic] it failed to correct, notwithstanding the concession by the Defendant" (written submissions, paragraph 3.11.5). 100The plaintiff submits that the words of paragraph 2 of the costs agreement (including "but not exclusive to assessment negotiation, conduct and finalisation of your claim") included preliminary work such as obtaining relief by way of summons against the plaintiff for access to his home. 101The Costs Review Panel's findings were as follows: "6.7 The panel is of the view that the "No Win, No Fee" agreement applied to the substantive proceedings, but it did not apply at all to the access proceedings. The access proceedings were between Mrs Sultana and Mr Vumbaca. The main proceedings were between Mrs Sultana and two different defendants. The main proceedings were separately numbered from the access proceedings. The issues in the two sets of proceedings were different. 6.8 If the panel is correct in this view, then the "No Win, No Fee" agreement did not apply to the access proceedings at all. Mrs Sultana was liable to pay costs on the basis of what was fair and reasonable. It is most unlikely in all the circumstances that any reduction pursuant to Section 317(4) would have been made in an assessment of costs between Mrs Sultana and the solicitors". 102As O'Meally P's judgment makes clear (see paragraph 3 of this judgment), an application of this kind is exceptionally rare. His Honour had never encountered such an application before. 103Counsel for the defendant submits that, if asked whether the costs agreement would cover any necessary access proceedings, Turner Freeman would probably have said that it was a "no win no fee" proceedings in the same terms as the main costs agreement. 104When parties enter into a costs agreement, the purpose is in part to ensure that the client understands the nature and extent of liability for costs. In the course of the costs assessment proceedings, one of the submissions put on behalf of the plaintiff was that the bringing of the summons in these proceedings should have resulted in a second costs agreement, to cover the summons. After all, it was a different party, unexpected and substantial additional costs, and relief of a different nature from that which was the subject of the costs agreement. 105The solicitors for Mrs Sultana proceeded on the mistaken premise that the costs agreement on foot for the main proceedings still applied. In other words, they applied the terms of the existing contract to the work carried out by them in relation to the summons brought against Mr Vumbaca. Mrs Sultana appears to have proceeded on the same basis. The parties thought they had entered into a costs agreement which covered the costs, but the Costs Review Panel found that those costs fell outside the framework of the costs agreement. 106The Costs Review Panel considered, and I agree, that the basis upon which to assess the liability to pay costs was to determine what was fair and reasonable (at 6.8). In my view, this is correct. 107I note however that the Costs Review Panel made an alternative finding on the basis that there was now a "verdict" in the compensation proceedings. Accordingly, if I were to agree with the submissions of the plaintiff that the Costs Review Panel erred in law, I accept the submissions of counsel for the defendant (written submissions, paragraph 102) that any error of this kind would not warrant the setting aside of the Panel's determination. This ground must also fail.

[19]

Ground 12 108Insofar as there is any claim that the Assessor and/or the Panel failed to consider the test in s 364 "in that no reasons were given to support any such finding", I gratefully adopt the analysis by Ms Castle of this issue and the references to Frumar v The Owners of Strata Plan 36957 [2006] NSWCA 278 and Levy v Bergseng [2008] NSWSC 294. 109The Costs Review Panel considered that if it had erred in determining the "no win no fee" agreement did not apply there was an alternative basis for costs to be assessed, namely that the access proceedings were within the "meaning of that term" in the March 2010 costs agreement. It is submitted that the plaintiff was deprived of the opportunity of making submissions as to whether or not that costs agreement applied to the proceedings between Mrs Sultana and Mr Vumbaca. That is incorrect; submissions were made on this topic, including the submission that there should have been two costs agreements. 110The submission made by the plaintiff on this issue is that the Costs Review Panel failed to determine whether there was any distinction between the costs payable on the basis of what was "fair and reasonable" or on the "no win no fee" basis. 111I do not accept this submission. The degree to which the Costs Review Panel was required to parse and analyse the costs in question needs to be seen in light of the attachments to the Costs Review Panel decision. The Costs Review Panel had the opportunity to consider all of those matters and it was not necessary for a comprehensive review of these to be set out in their decision, for the reasons explained by Allsop P in Edyp v Brazbuild Pty Ltd, supra, at [37] and in Levy v Bergseng [2008] NSWSC 294. The Costs Review Panel had a wide discretion as to whether to accept or reject the manner in which the work was carried out. No difference of any significance has been referred to by the plaintiff as being relevant to the reasonableness of the work, such as the applicability of a different scale. 112This ground of appeal also fails.

[20]

Ground 13 113First, I note that the defendant has challenged whether or not acceptance of the hourly rates was satisfactory in circumstances where there was no evidence before the Panel as to extent of the solicitors' experience or specialty is a decision as to a matter of law. While I agree with this submission, I have dealt with this ground (as indeed with the other grounds of appeal where the grounds are matters more appropriate for prerogative relief) by dealing with them as if they were in fact grounds of appeal as to a matter of law. However, my doing so should not be seen as an acceptance of the correctness of the plaintiff's submissions on this issue. 114It was not necessary for there to be admissible evidence of the solicitors being "senior competent and experienced personal injury" practitioners, nor was it necessary to give reasons for reaching such a conclusion that the solicitors were sufficiently qualified. The Panel, like the Costs Assessor, could draw all the information needed from the narrative of costs and attached documentation, and in particular from O'Meally P's judgment. The warning about the dangers of the Panel making such inquiries on the internet is misconceived. 115At paragraph 3.13.14, Mr Sweet submits, and I agree, that the hourly rates charged are at the top of the range for both partners and associates, having regard to the costs agreement between the defendant and Turner Freeman dated 1 March 2010. Mr Sweet's reference to the "top of the range" is revealing of his own implicit drawing of inferences from the documentation. Costs assessors have a similarly wide experience of the range of costs charged, particularly in personal injury matters, and they are entitled to bring this knowledge and experience to bear in costs assessments, in the same way that such knowledge and experience is brought to bear by counsel for the plaintiff in his submissions at paragraph 3.13.14 that these costs are "top of the range". 116The Costs Review Panel noted the difficult and unusual nature of this application. They had the benefit of O'Meally P's statements about this in his Honour's judgment. They had a wide discretion as to what should be permitted. It is my view that the Costs Review Panel dealt with these costs in a fair and reasonable way. I note in particular that they rejected the submission that the fact that the firm was in Parramatta should result in a lower hourly rate (see Crooke v David Crooke Pty Ltd (Supreme Court of NSW, Master Malpass, 12 April 1996)). This was a matter upon which the Costs Assessor and Panel were entitled to use their experience and common sense, as well as to rely upon principles of the kind enunciated by Master Malpass in Crooke. 117This ground of appeal fails.

[24]

(a) Acknowledgement of the submissions forwarded by the counsel for the plaintiff 126Mr Sweet has not appreciated the basis upon which I was concerned at the late receipt of submissions. It was not a question of whether or not my associate had acknowledged receipt of these submissions, but the fact that the totality of Mr Sweet's 60 pages of submissions was not provided by the due date (Monday 3 December 2012), but was sent on the afternoon of Friday 7 December 2012 without notification, when his opponent's submissions were due on Monday 10 December, the day before the hearing. 127The first set of submissions that I received on the due date (Monday 3 December 2012), described by me as "very short", was "short" in the sense that, although 28-pages in length, it dealt with only the first few of the grounds of appeal. This was added to in the second set, but the vast bulk of the grounds of appeal (namely grounds 7-13) were dealt with in the third set of submissions, and totalled nearly 30 pages in addition to the existing 33 pages of submissions sent on 5 December 2012, which were in itself also out of time. 128My associate wrote on Friday 7 December 2012 enquiring whether this was the final version. The answer received from the solicitor for the plaintiff was: "I have received advice from Mr Sweet that the Submissions sent today are different to all other versions including the Submissions sent on 5 December 2012. Mr Sweet also advises that he has proof read this current version up to clause 3.1.11 and will attend to proof reading the remainder as soon as possible. Any minor adjustments required after proof reading will be brought to the attention of the Court by Mr Sweet." 129In other words, the submissions served on the afternoon of Friday 7 December 2012 effectively completely replaced the earlier submissions, and those submissions were not themselves necessarily in final form, in that further amendments were to be advised to the court. 130Mr Sweet told me that my associate had accepted these documents. The correspondence between my associate and these persons should not be seen as a condoning of sending a completely revised set of submissions four days after they were due, in circumstances where this left Ms Castle in a position where not only would she probably have been obliged to revised the submissions she had already drafted, but she would need to answer further 28 pages of new material as well as a revision of earlier submissions, in circumstances where her submissions in reply were due by midday Monday 10 December 2012. 131Ms Castle was unable to meet the midday Monday deadline, but she supplied a draft of her submissions to Mr Sweet by 4:07pm on Monday, four hours after the deadline for her submissions in reply. Although Mr Sweet expected Ms Castle to be able to respond to his submissions when these were four days out of time, he was not able, he told the court, to meet Ms Castle's submissions four hours after the deadline. It was for this reason that I suggested that the parties address issues of costs in their correspondence. 132Mr Sweet said he needed until midday Wednesday 12 December 2012 to provide submissions in reply. While submissions were received by midday, these were once again substantially revised after the deadline, the third copy of the submissions arriving at 7:57am on Thursday 13 December 2012. 133The hearing did not have to be adjourned because I was not ready. The hearing had to be adjourned because Mr Sweet was not ready to meet the submissions of Ms Castle. 134Mr Sweet submits that his manner of sending his submissions in instalments minimised any inconvenience likely to be caused, and that I should accept that by reason of his unforeseen commitments in a criminal trial that he was unable to comply with the timetable. I do not agree. This was a straightforward matter of providing submissions on issues of law. 135Mr Sweet also notes that I raised the issue of costs in circumstances where there was no application before the court by counsel for the defendant for costs. I raised the issue of costs for two reasons. The first was, as the only time available for the parties to complete this matter was two hours on the afternoon of the last day of term, I was anxious to have as much in writing as possible, and part of my case management role is to ensure that all issues are dealt with. The second is that the District Court does not lightly accede to requests for adjournments of a specially fixed hearing. 136Any party who seeks the adjournment of a matter which has been fixed for hearing should expect to address the issue of costs thrown away by the adjournment. That is standard practice in the District Court. It is not a matter where an application is required by the opposing party. It is not simply a question of the convenience of the parties; the convenience of the court, particularly in such a busy time as the last week of term, is just as important, for the reasons explained by the High Court in AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; (2009) 258 ALR 14; (2009) 83 ALJR 951; [2009] HCA 27. 137At pages 37 to 39 of Mr Sweet's submissions, he notes that I asked about "estoppel" and inquired if this was as a result of there being an earlier lump sum bill of costs. The use of the word "estoppel" is taken from the defendant's submissions. I have dealt with this elsewhere in this judgment. 138I also asked Mr Sweet to consider decisions contrary to his submissions that work performed by legal clerks cannot be charged for separately and should be included in the hourly rate of the solicitors. He has answered by stating that there is no reference to paralegals in the costs agreement. Ms Castle has pointed out, in her submissions in reply, that there is a provision for work performed by legal clerks in the costs agreement. I have dealt with this submission in relation to ground 13 of the appeal. 139Mr Sweet also refers to the question of whether Mr Vumbaca, who is not a party to the litigation commenced by Mrs Sultana against Amaca Pty Ltd, was a party to the costs agreement. I have dealt with that issue elsewhere in this judgment. 140Finally, Mr Sweet raises the question of whether or not a costs agreement is subject to legal professional privilege. I did not raise this as a question; the law on this is clear. My concern was whether or not the costs agreement had in fact been provided. I have dealt with this issue elsewhere in this judgment.

[25]

Conclusion 141The sum involved in this assessment is comparatively small. The plaintiff is seriously ill. A special fixture was given to ensure that the matter could be heard by this court at the earliest opportunity. Today is the last day of the court term. The parties are anxious for these proceedings to be resolved before the end of the year, and have agreed that I should hand down a written judgment at 4 p.m. today. I invited the parties to address me on any outstanding issues this afternoon in the event that there were additional matters which they wished to raise before I did so. 142Identification of an erroneous decision is a task borne by the plaintiff. The burden has not been discharged in relation to any of the grounds. Many of the grounds show a fundamental misconception as to the nature of the costs assessment review process and the degree to which this is an administrative process rather than an adversarial, evidence-based, procedure. 143The relief sought by the plaintiff (pages 59-60 of the written submissions) is similarly illuminating. It is submitted that it would be appropriate to the court to make "suitable adjustments to the determination of the Costs Review Panel or, alternatively, remit the matter back to the Costs Review Panel to be dealt with according to law, having drawn to its attention the errors of law that it and the Costs Assessor, Mr Hartstein, made in assessing the costs, which are the subject of these proceedings" (plaintiff's written submissions, paragraph 4.1). However, the real application of the plaintiff in these proceedings is as follows. First of all, there should have been a finding of nil costs owing because at the time the lump sum bill was sent, the proceedings in the Dust Diseases Tribunal between Mrs Sultana and the respondent had not yet been finalised; secondly, if Mrs Sultana had to commence proceedings all over again, she should be held to the amount in the lump sum costs; thirdly no allowance should be made for clerks and paralegals and the amounts charged by the solicitors should be reduced. It would be pointless for this court to remit the matter to the Costs Review Panel for a nil costs finding on the basis that Mrs Sultana should have to start all over again when there is now finality in the Dust Diseases Tribunal proceedings, and the submissions of the plaintiff as to what should happen if and when a second bill is lodged for assessment are misconceived and raised issues outside the jurisdiction of this court. 144All of the 16 grounds of appeal must fail. 145The plaintiff should pay the defendant's costs. As Ms Castle told me this afternoon her client did not seek any order other than costs following the event if her client was successful, I have not made any additional orders in relation to the costs thrown away by reason of the matter not proceeding on Tuesday. I have, however, granted liberty to apply in relation to costs, on the application of the parties, in the event that an application for orders other than costs following the event should be made. 146I also note that Mr Sweet tendered an affidavit of Mr Russo attaching many documents, in order to demonstrate the amount of paper-work which the review process produced. The assessment process was designed to streamline the costs process. That has not occurred in these proceedings, but it is through no fault of the Costs Assessor, or of the Costs Review Panel, that this has occurred.

At a glance

Court

Decision date

Catchwords

Source

Catchwords

Judgment (27 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (43)

Cited By (2)