Supreme Court New South Wales Medium Neutral Citation: Foundas v Wright Lawyers [2021] NSWSC 1165 Hearing dates: 2 September 2021 Date of orders: 14 September 2021 Decision date: 14 September 2021 Jurisdiction: Common Law Before: Harrison AsJ Decision: The Court Orders: (1) The plaintiff's application to extend time to file her application for a review of the Costs Assessor's decision dated 20 June 2020 is refused. (2) The summons filed 11 June 2021 is dismissed. (3) No order as to costs. Catchwords: COSTS — Costs assessment — Review Costs Assessment – Extension of time to file review application – Application refused Legislation Cited: Legal Profession Act 2004 (NSW), ss 350, 373 Legal Profession Uniform Law (NSW), s 198 Cases Cited: Foundas v Wright Lawyers [2020] NSWSC 354 Category: Costs Parties: Cassani Foundas (Plaintiff) Wright Lawyers (Defendant) Representation: Counsel: Solicitors: Mr D. Allan (Defendant) File Number(s): 2021/168804 Publication restriction: Nil Judgment 1. HER HONOUR: By summons filed 11 June 2021 the plaintiff seeks an extension of the time to lodge a Review Costs Assessment in 2019/252616 Cassani Foundas v Wright Lawyers Pty Ltd. 2. The plaintiff is Cassani Foundas. The defendant is Wright Lawyers ("The Law Firm"). Ms Foundas is a former client of The Law Firm, she appeared in person and was articulate. Mr D. Allan appeared on behalf of the defendant. The hearing was conducted by audio visual link. The defendant neither opposed nor consented to the orders sought in the summons. Thus there is no active contradictor. 3. In Foundas v Wright Lawyers [2020] NSWSC 354, Wilson J helpfully outlined the history of the matters that gave rise to Ms Foundas application to extend time to file an application for a costs assessment at [12] to [30]. I have gratefully adopted and agree with this history. It is as follows: "[12] In September 2014 the plaintiff instructed the defendant firm to advise and act for her in a dispute with her brother over two Sydney properties. She signed a standard costs agreement with her solicitor on 22 September 2014. At cl 7.1, the costs agreement contained information as to the plaintiff's rights under the Legal Profession Act 2004 (NSW) ("the LP Act"), in the event of a dispute as to the legal costs incurred. [13] The plaintiff also executed a costs agreement with counsel who was to be briefed in the matter, on 22 September 2014. On the first page of that agreement a statement of the plaintiff's rights in relation to counsel's fees was set out, including her right to: Apply for the costs to be assessed within 12 months if you are unhappy with my costs. [14] The defendant and counsel subsequently undertook work for the plaintiff directed to the resolution of the dispute between Mrs Foundas and her brother. It is clear from some of the material relied upon by the defendant that the plaintiff was unhappy with the advice that she received from her lawyers, and rejected it. The dispute with her brother remained unresolved. [15] On 20 November 2014 an itemised tax invoice for $17,398.76, not including counsel's fees, was issued to the plaintiff by the defendant. The invoice on its face provided advice as to the client's rights if unhappy with the fees claimed. [16] On 24 February 2015 a further itemised tax invoice (for $8,206.28) was issued by the defendant to the plaintiff. Again, the invoice included information as to the costs assessment process available to the plaintiff if she disputed the costs. [17] On 24 April 2015 the defendant issued a further itemised invoice to the plaintiff (for $5174.40) which contained the same advice as to the availability of a process for costs assessment. [18] On 19 May 2015 the plaintiff's husband submitted a complaint to Office of the Legal Services Commissioner about the work done for the plaintiff by the defendant and counsel, and the cost of that work. [19] A month later, on 17 June 2015, the complaint was dismissed by the Legal Services Commissioner ("LSC" or "the Commissioner") as without foundation. The letter sent to the plaintiff's husband by the LSC provided advice as to the operation of the Supreme Court Costs Assessment Scheme, together with a Fact Sheet concerning the process for seeking a costs assessment. The twelve month time limitation for the submission of a request for costs assessment that applied by operation of s 350(4) of the LP Act was specifically referred to by the Commissioner. [20] On 10 June 2015, following receipt of advice from the defendant that the plaintiff had "cut communication" with her legal advisers, counsel issued his invoice, for $17,805. [21] A fortnight later, on 24 June 2015, the defendant terminated the agreement with the plaintiff and issued three invoices, being counsel's invoice and two from the defendant, consolidating all outstanding legal fees, payable within 14 days. [22] The following day the plaintiff's husband made a further complaint on the plaintiff's behalf to the OLSC concerning the defendant. The complaint also expressed dissatisfaction with the Commissioner's rejection of the first complaint. [23] On 1 July 2015 the plaintiff sent an email to the defendant, asking the defendant to "forward and lodge a detailed bill of costs to the Supreme Court for assessment by a [sic] independent court". [24] On 3 July 2015 the LSC responded to the plaintiff's second complaint, sending a letter to Mr Foundas declining to re-open the OLSC file. The Commissioner reiterated his earlier advice as to the procedure for seeking an assessment of legal costs, warning, Bear in mind that applications must be filed within 12 months of receiving the bill. [25] The defendant also wrote to the plaintiff, on 9 July 2015, with similar advice as to the process for seeking an assessment of costs. The defendant reminded the plaintiff that his invoices and that of counsel were "immediately due and payable". The correspondence suggested, If you are unwilling to pay please make application to the Supreme Court to have them assessed and I encourage you to do so. Go to the website of SCNSW or go into the registry at Queen square Sydney to obtain the form. [26] There followed a repeat of the information endorsed on the earlier invoices as to the plaintiff's "rights in relation to legal costs", including having the costs assessed, and a referral to a Fact Sheet on the topic. [27] On 1 July and again on 13 July 2015 the plaintiff sent an email to the defendant saying "I have requested you to go to the Supreme Court and submit your bill of costs to them for assessment". The defendant responded on 14 July 2015 pointing out clearly that "if you do not pay it is your responsibility to apply for cost assessment". The defendant also referred to the prospect of issuing a Statement of Claim if necessary. [28] Ultimately, that was the course taken when the plaintiff neither paid the outstanding invoices, nor applied for a costs assessment. On 10 November 2016 the defendant obtained a default judgment from Penrith Local Court against the plaintiff for the unpaid legal costs. Attempts to recover the monies were unsuccessful and, on 11 March 2019, the plaintiff obtained a stay of enforcement pending her motion to set aside the default judgment. [29] The default judgment was set aside on 3 April 2019. [30] Proceedings continued before the Local Court at Penrith, where they remained outstanding as at the date of the hearing of the plaintiff's Motion before this Court. The Local Court was prepared to adjourn the proceedings before it, pending resolution of the question of leave to the plaintiff to file a costs assessment application out of time." 1. Her Honour continued at [34] where she stated: "[34] Although it was not without some misgivings, given the extreme delay by the plaintiff in seeking the costs assessment, on the basis of the defendant's concession I made an order granting leave to the plaintiff to file a costs assessment application out of time." 1. Also at [47] her Honour stated: [47] Section 350 of the LP [Legal Profession] Act [2004] is the relevant provision. Although the Act was repealed from 1 July 2015 the invoices in question were issued prior to the replacement of the Act with the Legal Profession Uniform Law. Section 350 of the LP Act is relevantly in these terms: 350 Application by client… for costs assessment (1) A client may apply to the Manager, Costs Assessment for an assessment of the whole or any part of legal costs. … (3) An application for a costs assessment may be made even if the legal costs have been wholly or partly paid. (3A) If any legal costs have been paid without a bill, the client or third party payer may nevertheless apply for a costs assessment. (4) An application by a client… for a costs assessment under this section must be made within 12 months after: (a) the bill was given or the request for payment was made to the client…, or (b) the costs were paid if neither a bill was given nor a request was made. (5) However, an application that is made out of time, otherwise than by: (a) a sophisticated client, or … may be dealt with by the costs assessor if the Supreme Court, on application by the costs assessor or the client or third party payer who made the application for assessment, determines, after having regard to the delay and the reasons for the delay, that it is just and fair for the application for assessment to be dealt with after the 12-month period." 1. The costs assessment has now taken place. The proceedings in the Penrith Local Court still remain outstanding. 2. The plaintiff now applies for an extension of time to apply for a review of the cost assessment. 3. Section 373 of the Legal Profession Act 2004 (NSW) reads: 373 Application for review of determination (1) A party to a costs assessment who is dissatisfied with a determination of a costs assessor may, within 30 days after the issue of the certificate under section 368 (Certificate as to determination) or 369 (Recovery of costs of costs assessment) that sets out the determination of the costs assessor or within such further time as the Manager, Costs Assessment may allow, apply to the Manager, Costs Assessment for a review of the determination. (2) The application must: (a) be made in accordance with the regulations (if any), and (b) be accompanied by the fee prescribed by the regulations. (3) The Manager, Costs Assessment may waive or postpone payment of the fee either wholly or in part if satisfied that the applicant is in such circumstances that payment of the fee would result in serious hardship to the applicant or his or her dependants. (4) The Manager, Costs Assessment may refund the fee paid under this section either wholly or in part if satisfied that it is appropriate because the application is not proceeded with. (5) A party who applies for a review under this Subdivision must ensure that notice of the application is given to the other parties to the assessment not less than 7 days before the application is made or as prescribed by the regulations. Assessment of Law Practice and Client Costs 1. In proceedings number 87221/20 (Foundas v Dean Stuart and Wright t/as Wright Lawyers and Associates), Ms Foundas is the Costs Applicant, and former client of the Costs Respondent. 2. The client instructed the law firm to act for her about commercial ligation and disputes in relation to property. Both parties provided written submissions and the client also provided specific objections in relation to certain items for consideration by the costs assessor. 3. The law firm rendered 6 invoices between 10 June 2015 and 20 November 202 in the total sum of $45,629.44. The client disputed $37,132.83 of the costs. 4. The Cost Assessor's reasons dated 24 June 2020 relevantly read: 6.3 Ms Foundas instructed the Law Practice to advise and act for her in relation to a dispute involving two properties and her family. The significant, but not the only, issue in the dispute was who was or were the beneficial owners of the properties. There were also issues as to whether and if so, how the properties should be sold. The Commonwealth Bank was the Mortgagee of the properties and took steps to take possession and sell at least one of them. 6.4 While not the client, the husband of Ms Foundas was instrumental in giving instructions. 6.5 The dispute was complex including allegations of forged documents and dishonest behaviour. The history stretched over many years and the factual matrix was complex. There were many documents to be considered and multiple players, including banks, were involved. 6.6 Ms Foundas and her husband were emotionally invested in the disputes that ultimately were the subject of Supreme Court and Court of Appeal proceedings, 6.7 The Law Practice briefed Matthew Hogg to advise and represent Ms Foundas. 6.8 The dispute involved complex issues of fact and law. 6.9 The properties were of significant value. 6.10 The properties and parties were in Sydney and the practice of the Law Practice located in Drummoyne in Sydney. 6.11 The preceding paragraphs are the matters that I have considered pursuant to Section 363 of the LPA. 6.12 Ms Foundas (or her husband) and the Law Practice had a falling out, and instructions were ultimately withdrawn from the Law Practice. 1. The Cost Assessor provided detailed reasons. At [9.2] the Costs Assessor assessed the fair and reasonable costs payable by the Cost Applicant to the Cost Respondent as $39,500.55. 2. On 17 July 2020, the certificate for determination of the Managers Assessment of Costs in the sum of $2,476.65 was sent to the parties. The Law Practice had to pay the Costs of the assessment including the assessor fees and the filing fee. Costs Managers decision dated 6 January 2020 1. On 18 November 2020, the plaintiff lodged a review application dated 18 November 2020 under s 373 of the Legal Profession Act 2004 (NSW) (reproduced earlier in this judgment). Under that section, the review application had to be lodged 30 days after the certificate being sent to the parties. At the latest, the review application had to be lodged by 17 July 2020. It was lodged about 3.5 months late but I accept that the costs manager said it was 3 months late. The application included grounds of review and a supporting affidavit of the Costs applicant dated 13 November 2020. The Costs Manger stated in his reasons dated 6 January 2020 [should be 6 January 2021]: "Decision In cases where the review application is late and the required notice has not been provided, it is a matter of discretion for the MCA to allow additional time, where a properly made review application is lodged late. The delay in making the application is significant, 3 months. The review applicant asserts they had only a couple of days to lodge their review application. That claim would not appear to be correct. The costs assessor's determination was sent to the parties including the review applicant on 17 July 2020. In must be said, the costs assessor's determination was sent to the same address previously used in the assessment and none of the correspondence sent to it, appears to have been returned as being unsuccessfully delivered. On that date, the statutory timeframe for either party to seek a review of the costs assessor's assessment began, and as at 17 July 2020, the review applicant seems to be aware of the determination, yet the review application was not lodged for substantial time thereafter. From the grounds of review identified above it would seem the Ms Foundas' dissatisfaction appears to stem from the amount of costs [s]he has been charged, for the work performed. That view is not uncommon. In conducting the assessment the role of an assessor, or review panelist, is to consider what legal costs are reasonable for the work identified in the invoices provided and, whether that work was done in a reasonable manner. Having examined the documentation provided by both parties including Ms Foundas, in accordance with the relevant criteria, the costs assessor made the findings he did, clearly setting out his view of Ms Foundas' submissions across 4 pages under the following headings. "7. Ms Foundas' generalised objections and submissions in regard to the costs and disbursements. 8. Specific Objections." This demonstrates the opportunity Ms Foundas had to provide the documentation required to substantiate her claims, and the material they did provide was clearly considered and identified with the costs assessors Statement of Reasons. This appears to lead to an underlying concern of weight the costs assessor gave towards her submissions and documentation. In light of that, the MCA believes the review applicant was given a reasonable opportunity to provide written submissions pursuant to section 359 of the Act, and the approach adopted by the costs assessor does not appear to be inconsistent with the Act. The underlying issue appears to Ms Foundas' concern of weight the costs assessor gave towards Ms Foundas' objections, which is an exercise of discretion and judgment for the assessor in conducting their assessment. Clearly the review applicant disagrees with the determination of the costs assessor, but that in itself does not found an error by the costs assessor. That dissatisfaction appears to stem from the amount of legal costs they have been charged, for the work performed. That view is not uncommon. With Ms Foundas appearing to repeat in this review application the same, if not similar, concerns and objections already made, and considered by the original costs assessor, seemingly without fresh supporting material, this review application can best be described as a generalised objection to the assessor's determination, that the items they continue to objected to, were not reasonable. When considering an application for additional time, compelling submissions addressing the grounds of review are required. Also, or in the alternative, fresh supporting material substantiating the grounds of review. It is important to appreciate dissatisfaction with an outcome; want for a further assessment; or taking an opposing view to the objective assessment undertaken by an assessor, as that is insufficient to address or demonstrate merit in support of the delay. Having said that, it is difficult to see what, merits this review application may have or how a review panel could reach a different outcome to that of the original costs assessor, considering the same available material. Likewise, how in those circumstances, the review applicant would not be liable for the costs of the review panel's assessment. Without additional material being provided to support the claims they make, this review application seems to lack merit. Those comments do not support the request for additional time. Regardless of whether or not an extension is given, one party will experience some form of prejudice. Given the MCA's above comments, the greater prejudice would appear to be experienced by the review respondent, if an extension of time was granted, causing ongoing delay to the costs dispute, noting the need for the parties to have certainty in the outcome and finality of their costs dispute. In conclusion, Ms Foundas' grounds of review can be best described as dissatisfaction with the costs assessor's determination, towards the amount determined as being proportionate and reasonable. When considering an application for additional time, compelling submissions addressing the grounds of review are required. Also, or in the alternative, fresh supporting material substantiating the grounds of review. It is important to appreciate, dissatisfaction with an outcome; want for a further assessment; or taking an opposing view to the objective assessment undertaken by an assessor, are not sufficient to address or demonstrate merit in support of the delay. With those comments in mind, and having considered the available material, the MCA is not satisfied, that it would be just and fair in the circumstances to grant an extension of time for filing the review application." Explanation for delay 1. The review applicant's explanation for delay in lodging her review, as deposed in her affidavit sworn on 1 February 2021 is as follows: "5 Both the Defendant and I have come to the agreement on the 21st June 2019 that these costs be assessed before a Magistrate at Penrith Local Court NSW. 6 Following from my original Costs Assessment of the legal costs by Wright Lawyers P/L I seek to have this reviewed. The Costs Reviewer made assumptions that were not true. Like for example but not limited to, acceptance of many large folders of information as a picture to the assessor of the work involved and the details that were collected but, failed to show the internals of those folders that they were indeed mine and indeed material relevant to my case. As I recall I never saw any folders at my appointments. 7 The Costs Assessment was originally completed on 24th June 2020 but I was only given a copy late afternoon on the 17th July 2020 by email which had time lapsed as the Respondent knew and delayed the process so that a review could not happen. 8 On 25th November 2020, Senior Deputy Registrar sent an email for the Respondents asking to provide their submissions/objections in response for additional time and the review application by 9th December 2020. The respondent did NOT respond. Yet I get accused of being prejudiced towards the Respondent. They had their time and chose not to deal with the issues. 9 Senior Deputy Registrar stated that under Legal Profession Act 2004 s373 I was out of time but that ruling act has been repealed to Legal Profession Uniform Law NSW s204(2)(c) which states that if professional fees are reduced by more than 15% then those costs are on the lawyer and not on me. So why was I asked to pay the Cost Assessment and delayed in getting the Report when the Respondent knew of his responsibilities? Further to that Legal Profession Uniform Law NSW s 198(4) states that after a delay my application can still be dealt with. 10 My submission of this review first happened on the 13th October 2020 but then I was asked to get legal help and complete the form correctly which I did but then resubmitted it on the 13th November 2020. In between this I have had other urgent matters that I needed to deal with for my house and was at one point very ill with COVID-19. I had delays from the Respondents and delays in the Courts emailing me on what was happening. I have included emails of the details and the fact that I was consistent in dealing with this issue. I had to wait until the Local Court at Penrith before I was given further instructions. So for me being delayed between two Courts is confusing at best and prejudiced by the Respondent as they could have just informed me straight off rather than delaying the situation. Since I had cc'ed them in all correspondence as required. Delays and approvals for extensions of time by the Local Court and the Respondents (Plaintiffs in the Local Court) agreeing to have that matter adjourned and then granted of extra time confused me as to which time is right and which is OK for my Review. 1. In oral submissions, the plaintiff says that s 198 of the Legal Profession Uniform Law (NSW) should apply (T6.20-24). 2. Section 198(3) of the Legal Profession Uniform Law allows for an application for review of a costs assessor's decision. It states that an application under the section must be made within 12 months after the bill was given. Section 198(4) states that an application made out of time may be dealt with by the Cost Assessor if it is deemed that it is just and fair that the application for assessment be dealt with after the 12-month limitation period. 3. As Wilson J explained in Foundas v Wright Lawyers [2020] NSWSC 354 at [47], the Legal Profession Act 2004 (NSW) is applicable here. Although the Legal Profession Act 2004 was repealed from 1 July 2015, the invoices giving rise to the costs assessment process were issued prior to the Legal Profession Uniform Law. The time limit under s 373 Legal Profession act 2004 is 30 days. 4. She also says that she does not want the cost assessment process to have any bearing on this review (T7.31-33). She complained about the Law Firm failing to put in an objection to the review which she finds "highly offensive and unfair" (T7.49-T8.17). 5. She also stated at T8.43-T9.28: "I feel that the lawyers' actions with the initial costs agreement – when the initial costs agreement was drawn up, the agreement was that he – he had mediation. There was no legal action to be carried forward, and he was preparing for legal action, and the costs show that he was preparing the documents for court when there was no court in the original well, there was no court mentions on the original costs agreement. So it was from 5,000 to 20,000. That's all I agreed to, up to that amount, but the defendant is claiming up to $56,000, which is not in the original costs agreement. The costs agreement was only for mediation and in my view mediation never happened. So I don't see why I should have to pay in excess of the $20,000 that was in the initial costs agreement. Secondly, the barrister was never required and I've been charged for a barrister on each and every occasion. Well, it was not necessary for him to be present. And I don't know I mean, I may have initially I may be charged for the initial consult with a barrister, which I'm willing to wear, but I'm not willing to wear each and every cost that I've incurred with a barrister from thereon in. … And I can also note that he's been excessively charging for reading emails which are not even ten sentences more, and he's charged two hours for that, and I don't think that the costs assessor has taken that into consideration." 1. Further, she alleges that at times when her husband represented her due to her suffering from anxiety, the lawyer did work for her husband and the costs agreement did not say "did work for your husband and charged you." That is unfair. The lawyer should have signed a different costs agreement with her husband (T10.5-12). In so far as costs are concerned, she submitted that should not have to pay costs in relation to this matter including those incurred during the hearing on the basis that if the lawyer had replied on 9 December 2020 she would not be incurring costs (T10.31-40). Resolution 1. I have carefully read the Cost Assessor's decision and the Manager of Costs Assessments reasons for refusing to extend time for the plaintiff to lodge her review application. 2. The cost assessor received and considered the following documents and material from the parties : "2.2.1 The application for Assessment of Costs referred to above which include the clients Objections to the costs claimed by the Law practice and their invoices. 2.2.2 Submissions of the Law Practice undated including 135 pages of supporting documents. 2.2.3 The files of the Law Practice being 6 folders of documents. 2.2.4 A bundle of 32 pages of correspondence from the files of the Law Practice sent to me on 17 June 2020. 2.2.5 Emails from Ms Foundas dated 27 May and 29 May 2020." 1. As to the retainer between the costs applicant and the Law Firm, the costs assessor stated at 7.2.3 that the instructions were broader than to simply advise in relation to the Commonwealth Bank. The Law Firm provided advice that was far broader than that issue. The Law Firm was instructed to provide and advise and prepare and act in "any litigation as necessary." 2. At 8.4-8.6 the costs assessor stated the Law Firm's hourly rate of $350.00 per hour was applied to all reductions of professional costs. He also stated that it is clear from his consideration of the files that the Law Firm did considerable work on the matter, pursuing a strategy of attempting to negotiate an early outcome. There were many documents that had to be considered by them and the history of the matter stretched over many years. There were serious family differences about history. The client wanted the matter pursued vigorously and some issues were urgent. It would appear that a later falling out between the Law Firm and the client coloured some of the submissions of Ms Foundas. 3. The Manager of costs assessment in his decision dated 6 January 2021 considered the delay of 3 months in lodging the review application significant. It is my view that the review applicant provided the Costs Assessor with generalised objections and specific objections in her submissions to the Costs Assessor which were considered by him. She has not demonstrated that the costs assessor erred in his reasons, but rather has expressed her dissatisfaction with the result. This too was the opinion of the Manager Costs Assessor. In my view the review applicant has not provided a satisfactory explanation for her delay in filing her application for review, particularly as she was aware that there was a time limit imposed on lodging a costs assessment application. She had to lodge a summons seeking to extend time for a cost assessment. The Court, with "some misgivings", granted her an extension of time. The costs are for legal work carried out in November 2014 to 24 April 2015, some of which was urgent. It has been some 6 years since the Law Firm provided its legal services and they are entitled to be paid for them. For these reasons, and in the exercise of my discretion, I decline to grant the review applicant an extension of time to file to review of the Costs Assessor's decision. Costs 1. As the Law Firm neither consented nor opposed the order sought by the costs review applicant, I make no order as for costs. The Court Orders: 1. The plaintiff's application to extend time to file her application for a review of the Costs Assessor's decision dated 20 June 2020 is refused. 2. The summons filed 11 June 2021 is dismissed. 3. No order as to costs. ******** Amendments 14 September 2021 - Changed from procedural ruling to costs. 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: 14 September 2021