Wilson v Mirus Australia Pty Ltd

JUDGMENT

1. THE COURT: The applicant, Simon Wilson, seeks leave to appeal from a judgment of Campbell J in the Common Law Division delivered on 24 November 2023. [1] The proceedings in the Common Law Division involved an appeal by the present respondent, Mirus Australia Pty Ltd (Mirus), from a determination of a costs assessment review panel. That appeal was brought pursuant to the Legal Profession Uniform Law Application Act 2014 (NSW) (Application Act), s 89(1)(b) and was limited to the failure of the review panel to make an order as to the costs of the review assessment. The appeal to the review panel had been brought by Mirus, which had been ordered to pay Mr Wilson's costs of the original proceedings between the parties.
2. The costs assessor had determined the costs payable by Mirus in an amount of $222,259.66. The review panel set aside the costs assessor's determination and substituted their own determination in the sum of $128,715.93 and issued a certificate for that amount. The reduction was approximately $93,500. The cost of the review claimed by Mirus was, in round terms, $16,000. [2] However, the applicant required leave to appeal because the judgment below was "a judgment or order in proceedings of the Court with respect to the … assessment of costs", within s 101(2)(q) of the Supreme Court Act 1970 (NSW).

Proceedings below

1. The judgment in the Common Law Division also dealt with a summons commencing a cross-appeal brought by Mr Wilson. The primary ground of the cross-appeal (indeed the only ground pursued at the hearing) was that the review panel had failed to provide adequate reasons for its determination. The primary judge recorded that other grounds identified in the cross-appeal were not pursued. [3] The complaint with respect to the reasons given by the review panel was directed to a particular issue, namely whether (as the review panel found), Mirus had not been given an adequate opportunity to present a case in response to the original costs assessment application. The primary judge inferred that Mr Wilson was also challenging the correctness of the panel's finding of procedural unfairness and addressed that issue.
2. The primary judge followed the course taken by the parties, which was to address first the cross-appeal. That course was taken on the basis that, if the review panel decision were to be varied or set aside, that would affect any order as to the costs of the review assessment.
3. It was common ground that Mirus did not present material or submissions in opposition to the initial costs assessment. In seeking a review of the costs assessment, Mirus' complaint that it had not been afforded a reasonable opportunity to participate in the costs assessment process was identified as Part A of its application. That, it claimed, arose from a failure to be served with the application for assessment as filed with the Manager, Costs Review. A second set of grounds (Part B) set out substantive errors in the assessment.
4. In dealing with Mr Wilson's cross-appeal, the primary judge found that the reasons given by the review panel were legally adequate. [4] The judge also accepted Mirus' submission that, even if the reasons had been inadequate, the application to the review panel required that it carry out a reassessment of the costs, which it did. Accordingly, any inadequacy of reasons with respect to the procedural unfairness ground could not have affected the outcome. [5] Further, on the basis that there was, nevertheless, an issue as to whether there had in fact been a denial of procedural fairness to Mirus, the judge reviewed the evidence of service and concluded that the review panel did not err in finding that there had been procedural unfairness. [6]
5. With respect to Mirus' appeal, the judge noted that the appeal involved a pure question of law, namely whether the review panel had erred in concluding that it did not have power to award costs of the review application.
6. Section 85 of the Application Act provided for the conduct of reviews by a review panel. So far as relevant, s 85 reads as follows: 85 Conduct of reviews (1) A review panel may, on an application made under section 83 or 84, review the determination of a costs assessor and may - (a) affirm the costs assessor's determination, or (b) set aside the costs assessor's determination and substitute the determination that, in its opinion, should have been made by the costs assessor. (2) The review panel has, in relation to the application for review, all the functions of a costs assessor in relation to the assessment concerned and is to determine the application, subject to this Part and the costs assessment rules, in the manner that a costs assessor would be required to determine an application for costs assessment.
7. Section 78(1) of the Application Act provides that, "[s]ubject to any order or rules of the court or tribunal concerned, a costs assessor is to determine the costs of an assessment of ordered costs and by whom they are payable". The short issue raised by the appeal was whether the review panel, in exercising "all the functions of a costs assessor" pursuant to s 85(2), was empowered to make an order with respect to the costs of the assessment it undertook. The primary judge held that it had that function. [7] The primary judge therefore allowed the appeal and remitted the application for review to the Manager, Costs Assessment for referral to a review panel for determination of the "sole question" of the costs of the review and by whom they are payable.

Terms of Summons

1. By a summons filed on 5 March 2024, the applicant sought leave to appeal from "the whole of the decision below". However, the application is in an unusual form and it is necessary to set out the proposed orders in full: "1 Grant leave to file this summons without the supporting documents prescribed by UCPR 51.12, on the undertaking to the Court by each of the applicant, counsel and the solicitor for the applicant, to file those documents on or before Monday, 11 March 2024. 2 On the undertaking to the Court by each of counsel and the solicitor for the applicant to act pro bono publico without fee or reward except for the reimbursement of disbursements. a) pursuant to UCPR 42.4, the Court specify the maximum costs that may be recovered by any party to these proceedings from any other party at an amount of nil b) the Registrar remit to the applicant payment of court fees already made and waive payment of all future court fees in these proceedings. 3 Leave to appeal from whole of the decision below."
2. On 15 March 2024 (that is, four days after the deadline for filing documents pursuant to proposed order 1), the applicant filed a summary of argument supported by an affidavit by Christopher Phillip Wall, legal practitioner, dated 11 March 2024. (Mr Wall was not the solicitor on the record for the applicant; Nathan Thomas Mattock was the solicitor on the record.) Mr Mattock filed an affidavit dated 19 March 2024, stating, under the heading "Agreement with Mr Wilson": "5 I am informed by Mr Wilson and verily believe that: (a) he has reached an agreement with Philippe Doyle Gray of counsel whereby Mr Doyle Gray has agreed not to charge Mr Wilson any legal fees for the work required to determine these proceedings and without seeking a reward from any cost order made in Mr Wilson's favour; and (b) if the Court were not minded to make an order capping the costs of these proceedings to nil, Mr Wilson will not pursue his appeal of the Judgment as he does not wish to risk being the subject of an adverse cost order [if] his appeal of the Judgment is dismissed."
3. Returning to the orders sought in the summons, proposed order 1 is otiose. On 19 March 2024, a white folder was filed containing the usual documents required under Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 51.12(2). If there were some concern that the need to provide a white folder would result in the application being out of time, that was misconceived, because the application was already out of time. (The three-month period from the date of the entry of the orders below expired on 23 February 2024, but no point is taken in relation to that delay.)
4. As to proposed order 2, there was some ambiguity as to its purpose in so far as it seeks to have the Registrar remit the court fees already paid, as well as waiving payment of all future court fees. It is, of course, open to an applicant for leave to appeal to seek, as his counsel does, an order that there be no order as to costs (and that the court fees already paid be remitted) in the event that leave is refused. However, it is not appropriate to purport to condition the application for leave to appeal on the court first making such order. It would rarely be appropriate to make a capping order of "$nil", let alone retrospectively in circumstances where the respondent will already have incurred costs. It will also generally be inappropriate to make such an order with respect to a foreshadowed appeal, if leave be granted. In the ordinary course of events (to which it is not easy to imagine any exception) an application for a limit on payment of costs will follow, not precede, a grant of leave. If the proposed order were not made, and the result was unacceptable to the applicant, then the appeal could be abandoned. A grant of leave to appeal is made on the merits of the case, and is not to be the subject of bargaining between an applicant and the court as to orders with respect to costs. Unsurprisingly, Mirus opposed the costs orders proposed by the applicant, submitting that costs should follow the event. [8]

Application for leave to appeal

1. As to proposed order 3, the applicant did not in written submissions, nor orally, directly address the criteria for a grant of leave to appeal. However, the submissions focused on two issues, namely the alleged error on the part of the primary judge and a contention that there were inconsistent judgments of single judges in the Division which needed to be reconciled.
2. While both matters were material, they did not adequately address the established principles with respect to a grant of leave to appeal. These principles were summarised in Secretary, Department of Family and Community Services v Smith [9] in the following terms: "28 Only if the decision is attended with sufficient doubt to warrant its reconsideration on appeal will leave be granted: Sharpe v Heywood [2013] NSWCA 192 at [34]; McMahon v Permanent Custodians Ltd [2013] NSWCA 275 at [57]. Ordinarily, it is only appropriate to grant leave where there is an issue of principle, a question of general public importance, or an injustice which is reasonably clear, in the sense of going beyond what is merely arguable: Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 at [46]. It is well established that it is not sufficient merely to show that the trial judge was arguably wrong: Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]."
3. Further, there is a proper reticence on the part of the Court to grant leave to appeal in matters relating to costs alone. [10] A challenge to a costs assessment is one step further removed from the substantive issues in dispute which gave rise to the litigation. It is a form of "satellite" litigation. [11] This is the fourth hearing in relation to the question of assessment of costs. If the judgment below stands, there will be a fifth hearing, though dealing with a limited issue. There should be strong grounds for concluding that a fifth hearing may be avoided, to justify a grant of leave to appeal.
4. It may be accepted that where it is shown that there are inconsistent judgments in a lower court which require reconciliation, the appeal will usually be more than "merely arguable" and will involve an issue of principle, as there can only be conflict in circumstances where each case has precedential value. However, satisfying two criteria will not necessarily warrant a grant of leave to appeal. The judgment in question may provide an inappropriate vehicle for considering the issue of principle, or the amount in issue may be such that the additional expense should not be incurred.
5. As to inconsistent judgments, the summary of argument alleged that Ramsay v Gatland [12] was authority for the proposition that, if the review panel were correct in determining that the respondent was denied a reasonable opportunity to make submissions to the assessor, then it should have remitted the matter to the costs assessor. [13] That case stands for no such proposition. The closest it came to any question about the powers of a review panel was the observation that if, on a review, the review panel concluded that the application was brought out of time, with the result that it could not be assessed, the review panel did not assess costs as fair and reasonable and its decision would therefore not be a "costs determination" to which s 73 of the Application Act applies. [14] There was, in that case, therefore, no costs determination to be binding on all the parties, as provided by s 73.
6. Not only did Ramsay not stand for the proposition for which it was said to be authority but that proposition was not found in any proposed ground of appeal. Further, the proposition was not reasonably arguable in circumstances where the review application alleged particular errors in respect of the assessment undertaken by the costs assessor. Indeed, the review panel may have failed to exercise its function had it not undertaken a reassessment having regard at least to those grounds. This was, in substance, the point made by the primary judge in stating that the question of procedural unfairness was not determinative. Indeed, it may not have been a matter for the review panel.
7. The only evidence of uncertainty as to the law appears to be found in a series of statements in Mr Wall's affidavit to the effect that assessors take different views as to whether a review panel can award costs of a review assessment. If that were so, the uncertainty has been resolved by the judgment of the primary judge.

Proposed grounds of appeal

1. Ground 1 of the proposed appeal alleged that the primary judge "made an error of legal principle in finding that the respondent was not afforded a reasonable opportunity to make submissions to the costs assessor". Despite this formulation, if there were an error, it was not an error of legal principle, but rather as to an evaluative assessment of the facts. Unless there was an error of this kind which gave rise to a clear injustice, it would not warrant a grant of leave to appeal. In any event, the factual assessment was at least open to the primary judge (and the review panel) if not, indeed, the correct conclusion. As has been noted, this issue was not in fact raised in the summons as a ground of appeal from the review panel as identified in the court below, but was inferred to be an issue as a result of submissions and was addressed by the primary judge.
2. The precise complaint sought to be raised under ground 2 of the proposed appeal is not easy to summarise. In identifying the questions involved in the leave application, ground 2 was said to give rise to a question as to whether review panels are "obliged to conduct a costs assessment by way of reassessment, regardless of the grounds stated in an application for review". That was said to be the operation of s 375 of the Legal Profession Act 2004 (NSW) (2004 Act). [15] There are two points to raise in respect of that submission. First, it is by no means clear that the assumed meaning of s 375 of the 2004 Act is correct. That legislative scheme was more fully described by Barrett JA in Wende v Horwath (NSW) Pty Ltd, but not in those terms. [16] Secondly, the applicant took the primary judge to task for applying principles articulated in this Court in relation to the 2004 Act on the basis that they were not reflected in the Application Act which relevantly replaced the 2004 Act. While it is true that the language of the two sets of provisions is not identical, the applicant did not demonstrate any difference of substance which might have affected the outcome of the present case.
3. Rather, the applicant submitted that there were provisions in the Legal Profession Uniform Law (NSW) and, in particular, s 198(9)(a) which had the effective of changing in a fundamental respect the nature of a "review" under s 85(1) of the Application Act. Counsel conceded that s 85 had not materially varied the language of s 375 of the 2004 Act. It is not necessary to set out the terms of s 198 (nor ss 169 and 199 of the Uniform Law, to which reference was also made); it is sufficient to note that the submission read out of context different provisions dealing with costs payable on a solicitor-client basis. The submission had insufficient prospects of demonstrating a change in the nature of the "review" to be conducted by a review panel to warrant a grant of leave.
4. As noted above, a subsidiary point which appears to have formed part of proposed ground 2, was the proper construction of Mirus' review application. Part A (pars 1-18) identified the circumstances giving rise to the alleged lack of an opportunity to address the application for an assessment of costs as filed. Part B was more extensive (pars 19-70) and challenged specific aspects of the assessment with which Mirus took issue. However, the applicant noted that Part B was described as containing "merely examples" as to why Mirus should be afforded an opportunity to respond to the assessment application "and [did] not form the totality of the notice of objection which will be provided in due course". This, according to the applicant, meant there was only one ground of review, namely procedural unfairness. The review panel clearly saw the matters raised in Part B as matters to be taken into account in reviewing the assessment. The primary judge saw no error in that approach, which was entirely reasonable in the circumstances. (Whether the attempt to reserve a position to make further objections was effective or relied upon later is not in issue on the present application.)
5. It is doubtful that this point rises above the merely arguable, but in any event it raises no issue of principle and leave should not be granted to consider the possible readings of an informal pleading.
6. The only remaining issue (proposed ground 3) was whether the judge erred in concluding that the review panel had the power to award the costs of the review assessment as between the parties to the assessment, a power undoubtedly possessed by a costs assessor.
7. As noted at [8] above, that issue involved a straightforward question of statutory construction, namely whether the functions conferred on the review panel pursuant to s 85(2) of the Application Act, included the functions identified in s 78 of that Act, namely the determination of the costs of the assessment and by whom they were payable. Not only was no reasonably arguable error identified in the reasoning of the primary judge, but the conclusion he reached is entirely consistent with the structure of Pt 7 of the Application Act. Thus, a review panel is no more and no less than two cost assessors; the powers and functions of costs assessors are set out in terms relating to the conduct of costs assessments, and it is to be expected that the same functions would, as s 85 indicates, apply to both exercises. There is no basis to grant leave to appeal to review that aspect of the judgment below.

Conclusion

1. The proposed grounds of appeal do not raise any issue of principle, nor require the resolution of conflict between decisions in the Common Law Division. Nor do the grounds rise above the standard of being "merely arguable". It follows that leave to appeal must be refused.
2. Despite the somewhat unusual submissions with respect to costs in the event that the application were to be refused, the only matter sought to be raised in support of those proposed orders was, in the words of the applicant's solicitor, that if the cost capping order were not made he would not pursue his appeal "as he does not wish to risk being the subject of an adverse cost order". That is not a reason why costs should not follow the event.
3. Accordingly, the applicant must pay the respondent's costs of the application in this Court.

Endnotes

1. Mirus Australia Pty Ltd v Wilson [2023] NSWSC 1432 (Mirus).
2. Mirus at [6].
3. Mirus at [4].
4. Mirus at [44].
5. Mirus at [46].
6. Mirus at [70]-[75].
7. Mirus at [86].
8. Response to application for leave to appeal, 16 April 2024, pars 41, 52.
9. (2017) 95 NSWLR 597; [2017] NSWCA 206 (Gleeson JA, Macfarlan and Payne JJA agreeing).
10. No leave is required where there are also substantive issues raised: Housman v Camuglia (2021) 104 NSWLR 615; [2021] NSWCA 106 at [84] (Leeming JA, Bell P and White JA agreeing).
11. See Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303; [2013] HCA 46 at [56]-[59].
12. [2022] NSWSC 1514 (Schmidt AJ).
13. Applicant's summary of argument, 15 March 2024, par 35.
14. Ramsay at [80]-[81].
15. Summary of argument, par 8.
16. (2014) 86 NSWLR 674; [2014] NSWCA 170 at [161]-[163]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 13 May 2024