District Court New South Wales Medium Neutral Citation: Ferkovic v Kioussis [2022] NSWDC 326 Hearing dates: 3 and 4 (written submissions) August 2022 Date of orders: 5 August 2022 Decision date: 05 August 2022 Jurisdiction: Civil Before: P Taylor SC DCJ Decision: (1) Leave to appeal is refused. (2) Summons dismissed. (3) Order the plaintiff to pay the defendant's disbursements in respect of the summons. Catchwords: COSTS — Costs assessment — Determination — Review/appeal COSTS — Solicitor/Client — Costs disclosure — Effect of non-disclosure Legislation Cited: Civil Procedure Act 2005, s 3, s 4, Sch 1 Legal Profession Uniform Law Application Act 2014, s 11, s 89 Legal Profession Uniform Law (NSW), s 6, s 70, s 71, s 174, s 178, s 194, s 198, s 204, s 206, s 208 Local Court Act 2007, s 39, s 40 Uniform Civil Procedure Rules 2005, r 1.5, r 36.15, r 36.16, Sch 1 Cases Cited: Ada Evans Chambers Pty Ltd v Santisi [2014] NSWSC 538 Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29 Cachia v Hanes (1994) 179 CLR 403 Guss v Veenhuizen (No 2) (1976) 136 CLR 47 London Scottish Benefit Society v Chorley, Crawford and Chester (1884) 13 QBD 872 Preston v Commissioner for Fair Trading [2011] NSWCA 40 Spencer v Coshott (2021) 106 NSWLR 84; [2021] NSWCA 235 Wang v Farkas (2014) 85 NSWLR 390 Texts Cited: Judicial Commission of New South Wales, Civil Trial Bench Book Category: Principal judgment Parties: Tony Ferkovic (plaintiff) Penelopy Kioussis (defendant) Representation: Solicitors: Kioussis Lawyers (defendant) File Number(s): 2022/00054285 Publication restriction: None Decision under appeal Court or tribunal: Local Court Jurisdiction: Civil Date of Decision: 15 October 2021 Before: Registrar A Giles File Number(s): 2021/00292330 Judgment A. Introduction 1. Tony Ferkovic filed a summons seeking leave to appeal from a decision of the Local Court giving judgment in favour of his former solicitor, Penelopy Kioussis, for $6,882.70, in consequence of her filing a certificate of assessment of legal costs in that amount. He also seeks an order that the judgment be set aside, [1] and a declaration that he has fully paid the amount of assessed costs. [2] Mr Ferkovic says the judgment is in error in failing to take into account $5,150 he says he has paid, and maintains he is entitled by reason of this asserted error to appeal against the decision of the review panel in respect of the assessment. 2. Both Mr Ferkovic and Ms Kioussis were self-represented. B. Issues 1. The first issue is to ascertain what, if any, appeal rights Mr Ferkovic possesses, and whether he can satisfy the requirements for a valid appeal. There is also an underlying question about whether Mr Ferkovic is entitled to a credit against the assessed costs for the $5,150 he paid against an earlier bill that was not assessed. That issue depends on the proper construction of s 178 of the Legal Profession Uniform Law (NSW) ("Uniform Law"). C. Background 1. Mr Ferkovic retained Ms Kioussis as solicitor in relation to NSW Civil and Administrative Tribunal ("NCAT") proceedings. She issued a tax invoice for $6,605 on 16 April 2020, and Mr Ferkovic paid $5,150 by 11 May 2020. The residual amount of $1,455 remained outstanding. By 15 May 2020, the relationship between Ms Kioussis and Mr Ferkovic had broken down, and Ms Kioussis served a Notice of Ceasing to Act. She released the file to another solicitor and the NCAT proceedings were finalised on 12 August 2020. 2. In September 2020, Mr Ferkovic lodged a complaint against Ms Kioussis which was dismissed on 31 March 2021. 3. On 26 April 2021 Ms Kioussis served an itemised bill of costs for the period 18 April to 15 May 2020, in the sum of $8,048, and on 25 May 2021 she served a Costs Assessment Application in relation to the original tax invoice and the subsequent itemised bill of costs, together totalling $14,653. 4. A further complaint by Mr Ferkovic against Ms Kioussis was made and dismissed in July 2021. 5. On 11 October 2021 the Costs Assessor determined the Costs Assessment Application. The Assessor determined that Ms Kioussis did not give the required disclosures under s 174 of the Uniform Law, [3] and applied s 178 of the Uniform Law as to the consequences of non-disclosure: in particular, that any costs agreement is void and not relevant to an assessment of the fair and reasonable amount of legal costs; and that s 204 renders Ms Kioussis generally liable to pay the costs of the costs assessment in the event of non-compliance with the disclosure requirements. 6. The Assessor made no adjustment to Ms Kioussis' hourly rates as they were found to be "significantly below" the market rate at the time. [4] 7. The Assessor dismissed the first five objections and the seventh objection of Mr Ferkovic. [5] None of those matters are the subject of challenge in the summons, which was limited to the failure of the assessment, the review, and the Local Court judgment to give credit to Mr Ferkovic for the $5,150 that he had paid. [6] 8. The sixth objection of Mr Ferkovic was that Ms Kioussis was out of time to file the costs assessment in respect of the first tax invoice, because s 198(3) of the Uniform Law requires the application to be made within 12 months of the bill. This objection was upheld, and no assessment was made in respect of the first tax invoice. [7] The circumstance that the first tax invoice was not assessed is relied upon by Mr Ferkovic, with the finding of inadequate disclosure under s 178 to assert that he is entitled to rely on the payment of $5,150 in respect of that tax invoice as a credit against the assessment of the subsequent itemised bill of costs, in the eighth objection to which I will come. 9. The Assessor reasoned that "only the designated tribunal … has [the power to extend time] which in this case, is the Supreme Court of NSW not the costs assessor or even the Costs Assessment Manager". [8] 10. In fact, it appears that the designated tribunal under s 198(4) of the Uniform Law is, [9] pursuant to Table 2 in s 11 of the Legal Profession Uniform Law Application Act 2014 ("Application Act"), the "Manager, Costs Assessment". In the result, time could have been extended under s 198(4) of the Uniform Law on the application by the costs assessor or Mr Ferkovic to the Manager, Costs Assessment. Neither party makes any direct complaint about this reasoning of the Assessor. 11. The eighth objection of Mr Ferkovic before the Assessor was that because the first tax invoice cannot be assessed, Ms Kioussis must refund $5,150 paid by Mr Ferkovic, [10] so he is entitled to a set-off of this amount. The merit of this argument is relevant to the application for leave to appeal. The Assessor did not determine whether the refund and set-off were applicable. She reasoned, in my view correctly, that the purpose of the assessment was to assess the reasonable legal costs, not to determine whether there had been payment of them. 12. The final objection was that the fees were grossly excessive. The Assessor rejected this claim but did adjust some of the items. [11] 13. In the result, the Assessor assessed the itemised bill of costs at a sum of $6,882.70, and determined that, because of the inadequate disclosure, Ms Kioussis should pay the costs of the assessment, being $2,978.25. 14. There was no dispute that Ms Kioussis paid the costs of the assessment. 15. On 15 October 2021 Ms Kioussis filed the certificate [12] in the Local Court with an affidavit swearing that none of the assessed costs had been paid, [13] and obtained an order for judgment [14] in the sum of $6,882.70. 16. On about the day of the filing of the certificate, [15] Mr Ferkovic paid Ms Kioussis the sum of $1,732.70 in respect of the assessment, leaving a residue of $5,150, the amount Mr Ferkovic asserts he is entitled to as a credit against the assessment. If this were so, the judgment would be fully paid. Whilst that alone does not establish an error in the judgment, an earlier payment of $5,150 does mean that the judgment should have been for a sum of $1,732.70, if Mr Ferkovic's argument about the $5,150 prior payment being a credit is correct. 17. Mr Ferkovic initially sought to challenge the Local Court's judgment on the assessment in two ways: he filed a notice of motion in the Local Court seeking to set aside the judgment, [16] and he filed a District Court summons to do likewise. The District Court summons was dismissed, apparently because on an assessment of costs, an appeal only lies to this Court from a decision of the review panel under s 89 of the Application Act, [17] not from the decision of the assessor, and no application for review had then been made by Mr Ferkovic. 18. On 4 January 2022 Mr Ferkovic lodged an application for an extension of time for a review of the costs assessment. The extension was denied, on the basis that: "The grounds of review assert the costs assessor erred in not providing any recognition for the prior payments they had made towards the legal services provided by the review respondent," [18] and that "there is no statutory power for a costs assessor to make that determination", [19] indicating that this was a matter for the "registration process" of a certificate becoming a judgment rather than the correctness of the assessment. [20] In this respect, the Review Panel agreed with the Assessor's decision to make no determination about a set-off or payment made by Mr Ferkovic. 19. Mr Ferkovic's Local Court motion was subsequently dismissed on the basis of his failure to obtain a favourable result on the application in respect of the review. [21] D. Appeal jurisdiction (a) Appeal in costs assessment 1. This Court has jurisdiction to hear an appeal on matters of law and fact from a decision of a review panel under s 89 of the Application Act. Leave of the court is required if the amount of costs in dispute is less than $25,000. Here the amount of costs in dispute is $5,150. 2. I do not propose to grant leave to appeal against the decision of the review panel for a combination of four reasons. 3. First, the decision is plainly correct. There is no challenge to the assessment or the review panel's decision. Rather, Mr Ferkovic's challenge is that he has paid, or is to be treated as having paid, $5,150. That is not a matter for assessment. It is a matter for the Local Court when making an order for judgment. That is why filing of the certificate requires an affidavit as to the amounts paid. Leave to appeal the review panel's decision is of no utility when there is no challenge to the correctness of the review or assessment. 4. Secondly, the amount in dispute is $5,150. This is a relatively minor amount, and the costs involved in this application are disproportionate to the modest amount in dispute. On the summons before me alone, there is a 99-page affidavit by Ms Kioussis, and a 499-page affidavit by Mr Ferkovic. [22] The circumstance that there has already been an assessment, an appeal to this Court, an appeal to the Local Court, and an application for a review informs the question of the appropriateness of leave in view of the disproportionate costs. 5. Thirdly, the underlying argument of Mr Ferkovic is weak. His assertion is that he has paid $5,150 in respect of the assessed costs because he paid $5,150 in respect of another invoice that has not been assessed. 6. This question turns on the proper construction of s 178 of the Uniform Law. Section 178(1) provides: "178 Non-compliance with disclosure obligations (1) If a law practice contravenes the disclosure obligations of this Part— (a) the costs agreement concerned (if any) is void; and (b) the client or an associated third party payer is not required to pay the legal costs until they have been assessed or any costs dispute has been determined by the designated local regulatory authority; and (c) the law practice must not commence or maintain proceedings for the recovery of any or all of the legal costs until they have been assessed or any costs dispute has been determined by the designated local regulatory authority or under jurisdictional legislation; and (d) the contravention is capable of constituting unsatisfactory professional conduct or professional misconduct on the part of any principal of the law practice or any legal practitioner associate or foreign lawyer associate involved in the contravention." 1. As Ms Kioussis contravened the disclosure obligations of the Uniform Law, s 178 provides that Mr Ferkovic is not required to pay unassessed legal costs, and Ms Kioussis cannot sue to recover any legal costs without an assessment. And there is no assessment because the application was made out of the time prescribed by s 198. 2. But s 178 of the Uniform Law does not expressly provide for a refund of monies paid where there is a non-disclosure and no assessment. This textual reason, and other contextual reasons, appear to me to favour a construction that a refund is not an unstated consequence of inadequate disclosure and the absence of an assessment. The alternative may have the practical effect of requiring an assessment of all costs before 12 months have elapsed after provision of a bill, even in the absence of any dispute, as a precaution against a later finding of inadequate disclosure and an obligation to refund. That would be a most inconvenient and, in my view, unintended result. The words of s 178 should not be extended beyond their plain meaning. If a refund were intended, it would have been a relatively simple matter for the legislation (or the rules) [23] to so state. 3. Other provisions give some support for this construction: a solicitor cannot sue for costs unless a bill in proper form has been provided. [24] The purpose of this provision could hardly be to provide for a refund, but to require the solicitor to serve a bill in proper form before suing. 4. In addition, a solicitor is entitled to take reasonable security in respect of fees. [25] That would presumably include money, so that additional funds could be held pending invoices, bills in proper form, and assessments. That militates against requiring monies to be refunded. 5. Finally, a right to recover overpaid legal fees is the subject of a provision: an amount paid in excess of a certificate of assessment may be recovered as a debt, [26] so if Mr Ferkovic's payment of $5,150 is in excess of reasonable legal fees, he can seek an assessment of that bill (with an extension under s 198(4) of the Uniform Law) and ultimately recover the excess. But the refund does require an assessment first. That the law provides for a refund in that circumstance militates against a refund in another circumstance not mentioned, under the expressio unius maxim of construction. [27] 6. Mr Ferkovic asserted in written submissions, after the conclusion of the hearing, that it would be unconscionable to allow Ms Kioussis to retain moneys paid for costs if he was "not required to pay" those costs by reason of s 178(1)(b). That argument was not fairly ventilated before the Court. Had it been raised earlier, it may have led to a different response by Ms Kioussis, including evidence of other facts relevant to unconscionability. It might be thought that retention of the funds is not unconscionable if Mr Ferkovic retains a right to have assessed the tax invoice that he has partly paid, if he thinks he has paid an unreasonable amount for legal costs. 7. I am not satisfied that here, even though there has been a non-disclosure, Ms Kioussis retaining costs paid freely and voluntarily in response to a bill would be unconscionable merely because, had they not been paid, they would not yet be required to be paid. 8. Fourthly, there seems to be other appropriate avenues to challenge the judgment and registration of the certificate, that do not involve the unnecessary and inappropriate process of appealing the review of the assessment. In particular, r 36.16 of the Uniform Civil Procedure Rules 2005, which applies to the Local Court, [28] allows Mr Ferkovic, if he has a proper claim for set-off, to seek to set aside or vary the judgment under r 36.16(2)(b) because he was absent when the judgment was given. 9. In written submissions, Mr Ferkovic argued that r 36.16 provides a power in this Court to "set aside or vary a judgment or order" of the Local Court, on the basis that "Court" in the Uniform Civil Procedure Rules includes the District Court and the Local Court. In other words, r 36.16 provides another avenue for an appeal, that a litigant can avail himself of the power in r 36.16(2)(b) in any court, in respect of a judgment or order of any court. 10. I do not accept this argument. If it were correct, a court lower, as well as one higher, in the hierarchy could set aside or vary the order of another court. That cannot have been intended, and, of course, no authority was cited to support it. The circumstance that r 36.16 does not exclude such a result is a reason why "The court" in subr (2) must be read as the court that made the judgment or order. This construction finds support in r 36.15, where the primary or general power of a court to set aside a judgment is found. In that provision, the repeated reference to "the court" confines the court to that court which made the original order or judgment. Rule 36.16 is a "Further power", [29] somewhat ancillary to r 36.15, and the reference to "The court" should be read in the same way. 11. Accordingly, r 36.16(2)(b) does not empower this Court, or any court other than the Local Court, to amend or set aside a judgment or order of the Local Court. Such a power in another court exists only if there is an avenue of appeal or other right of challenge, such as for prerogative relief, to that court. (b) Other avenues of appeal 1. The Local Court Act 2007 makes provision for appeals from orders and judgments of that court. Section 39(2) of the Local Court Act gives the District Court a limited appeal jurisdiction: an appeal to this Court lies from a judgment or order in proceedings in the Small Claims Division, "but only on the ground of lack of jurisdiction or denial of procedural fairness". None of those three features are apparent in the challenged judgment given by the Local Court: there is no basis or evidence to conclude that the judgment involved proceedings in the Small Claims Division; there is clear jurisdiction conferred on the court to grant a judgment on a certificate; [30] and although the judgment was granted in the absence of Mr Ferkovic, in accordance with the usual procedure for the filing of certificates, this is not procedurally unfair if Mr Ferkovic retains a right to challenge the contents of a judgment obtained in his absence, under UCPR r 36.16 as mentioned. For these reasons, I am not satisfied that the circumstances of this case enlivened a right of appeal to this Court under s 39(2) of the Local Court Act. 2. Further, an appeal is available to the Supreme Court on a question of law under s 39(1) of the Local Court Act. That provision may be applicable given that there appears to be no factual dispute, and the real issue is whether s 178 of the Uniform Law creates an unstated right to a refund in respect of unassessed costs paid. There is also a right of appeal from the Local Court to the Supreme Court, but by leave, under s 40 of the Local Court Act on a mixed question of fact and law, and in other circumstances. The reference to these provisions is not to encourage Mr Ferkovic to take such a step: even if Mr Ferkovic can challenge the Local Court judgment, his argument depends on a right to a refund under s 178 of the Uniform Law, and I have indicated the difficulties of establishing that right. E. Costs 1. Mr Ferkovic has failed in his application for leave and should pay the costs of the application. However, costs of a self-represented litigant are limited to disbursements, [31] even where the litigant is a solicitor, [32] and so that limitation should be a component of the costs order. 2. As the Civil Trial Bench Book records, [33] previously legal practitioners acting on their own behalf in legal proceedings were not in the same position as a litigant in person in respect of the recovery of costs because of the "Chorley exception" [34] that allowed self-represented legal practitioners (or at least solicitors) to recover their costs of acting. However, in Bell Lawyers Pty Ltd v Pentelow , [35] the High Court said that the exception was not only anomalous, but exalted the position of legal practitioners in the administration of justice to such an extent that it was an affront to the fundamental value of equality of all persons before the law. As such, it was held that the Chorley exception should not be recognised as a part of the common law of Australia. [36] However, in Spencer v Coshott, [37] it was held that the abrogation of the Chorley exception by the High Court in Bell Lawyers Pty Ltd v Pentelow did not deny recovery of costs by a solicitor litigant who is represented by an incorporated legal practice of which he or she is the principal and the sole director and shareholder, because of the separate legal personality of an incorporated legal practice. 3. Ms Kioussis is the principal of Kioussis Lawyers, but there was no evidence that Kioussis Lawyers was incorporated, or that Ms Kioussis herself was other than the solicitor on the record in these proceedings. [38] F. Orders 1. Accordingly, the orders of this Court are: 1. Leave to appeal is refused. 2. Summons dismissed. 3. Order the plaintiff to pay the defendant's disbursements in respect of the summons. ********** Endnotes 1. Order 2 sought in the summons. 2. Order 3 sought in the summons. 3. Costs Assessment Reasons, K J Young, 11/10/21, at [7.13]-[7.15]; affidavit, P Kioussis, 10/6/22, Annexure P, at pp 74-75. 4. Costs Assessment Reasons, K J Young, 11/10/21, at [7.21]; affidavit, P Kioussis, 10/6/22, Annexure P, at p 76. 5. See Costs Assessment Reasons, K J Young, 11/10/21, at [7.24]-[7.28], [7.30]; affidavit, P Kioussis, 10/6/22, Annexure P, at pp 77-79. 6. See Appeal Grounds in summons. 7. See Costs Assessment Reasons, K J Young, 11/10/21, at [7.29]; affidavit, P Kioussis, 10/6/22, Annexure P, at p 78. 8. Ibid. 9. As defined in s 6. 10. Costs Assessment Reasons, K J Young, 11/10/21, at [7.31]-[7.33]; affidavit, P Kioussis, 10/6/22, Annexure P, at pp 79-80. 11. Costs Assessment Reasons, K J Young, 11/10/21, at [7.34]; affidavit, P Kioussis, 10/6/22, Annexure P, at p 80. 12. Affidavit, P Kioussis, 10/6/22, Annexure Q, pp 87-88. 13. Affidavit, P Kioussis, 10/6/22, Annexure Q, pp 86. 14. Exhibit A, p 226. 15. Affidavit, P Kioussis, 10/6/22 at [48]. 16. Affidavit, P Kioussis, 10/6/22, at [53]. 17. Affidavit, P Kioussis, 10/6/22, at [55]. 18. Affidavit, P Kioussis, 10/6/22, Annexure X, p 98. 19. Affidavit, P Kioussis, 10/6/22, Annexure X, p 99. 20. Affidavit, P Kioussis, 10/6/22, Annexure X, p 99. 21. Affidavit, P Kioussis, 10/6/22, at [60]. 22. Which includes Exhibit A of 495 pages. 23. See Legal Profession Uniform Law (NSW), s 208. 24. Legal Profession Uniform Law (NSW), s 194. 25. Legal Profession Uniform Law (NSW), s 206. 26. Legal Profession Uniform Law Application Act 2014, s 70(4). 27. Expressio unius est exclusio alterius, the express mention of one thing is the exclusion of another. 28. Uniform Civil Procedure Rules 2005, r 1.5 and column 1 of Sch 1; see also Civil Procedure Act 2005, ss 3, 4 and Sch 1. 29. See heading to r 36.16. 30. Legal Profession Uniform Law Application Act 2014, s 71(3). 31. Preston v Commissioner for Fair Trading [2011] NSWCA 40 at [183] applying Cachia v Hanes (1994) 179 CLR 403. See also Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29 at [1]. 32. Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29. 33. At [8-0090]. 34. London Scottish Benefit Society v Chorley, Crawford and Chester (1884) 13 QBD 872, considered in Guss v Veenhuizen (No 2) (1976) 136 CLR 47; see also Wang v Farkas (2014) 85 NSWLR 390; Ada Evans Chambers Pty Ltd v Santisi [2014] NSWSC 538 at [24]–[34]. 35. [2019] HCA 29. 36. Bell Lawyers at [3]. 37. (2021) 106 NSWLR 84; [2021] NSWCA 235 at [100]-[101]. 38. See affidavit, P Kioussis, 10/6/22 at [2], and e.g. see Annexure H in that affidavit (p 27) indicating that Kioussis Lawyers is a business name, not a corporation. 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: 10 August 2022