MENYHART vy GOLOTTA and GALLUZZO T/as GALLUZZO and GOLOTTA SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MEAGHER, HANDLEY and CRIPPS JJA 27 November 1992, 27 November 1992 [1992] NSWCA 152 This was an action by a solicitor for costs. The appellant claimed the judge at first instance erred in law in the findings made and in denying procedural fairness at the hearing. In particular, it was alleged his Honour erred in allowing proceedings to be commenced without the serving of an itemised bill of costs and without waiting for 30 days to elapse after such service. Held: His Honour had not erred and had gone out of his way to help the appellant. The issue of service of a bill of costs was never raised in the pleadings before his Honour, it was clear from the evidence that the appellant knew the contents of the bill and did not raise it. There can be no claim that a trial judge denied procedural fairness unless the point raised as evidencing unfairness formed no part of the hearing. Legal Practitioners Act (1898) s21 Cripps JA This is an appeal from the decision of Judge Johnson published on 5 December 1989 in which he gave a verdict and entered judgment for the plaintiff for an amount, in all, of $31,282.86, being made up as to $16,441.05, the amount owing to the plaintiff in circumstances which I will come back to and the amount of $14,841.23 with respect to interest claimed since the date referred to in the District Court Act. When the appeal was originally lodged, it was alleged that his Honour erred in three ways. Later, that was amended to allege that his Honour erred in nine ways and it is now alleged that his Honour erred in four ways. Before I come to the errors alleged, I will give a brief history of the litigation. The appellant, Mr Menyhart, was injured in two motor vehicle accidents. He sued in negligence. He was then represented by Mr Sankey of Norbert and Lipton, Solicitors. He sued the defendants, who were presumably insured by the GIO. He recovered damages. He did not think they were sufficient and he wished to appeal. He went to another firm of solicitors and that firm of solicitors included Mr Golotta who is the plaintiff in the present proceedings and the respondent to this appeal. Mr Golotta handled his appeal which resulted in a new trial and the litigation which finally came on before the late Reynolds J in the Supreme Court in 1982. Ultimately, he recovered an amount of $260,000 approximately, in December 1982. After the litigation was concluded, Mr Menyhart went back to his former solicitor, Mr Sankey. Thereafter, letters passed between the two solicitors concerning the amount of costs the appellant was required to pay Mr Golotta. From 1983 through to 1986, letters passed between the solicitors concerning whether or not, amongst other things, the appellant knew how much was owing under the party and party costs rule and how much was owing under solicitor and client costs rules. It is submitted by Mr Nagy Horty who has been permitted to 2 UNREPORTED JUDGMENTS represent the appellant, Mr Menyhart, in the unusual circumstances of this case, that a bill of costs was not forwarded. At all events, in 1986 Mr Golotta, the solicitor, not having been paid what he understood to be his reasonable remuneration for acting for the appellant, commenced proceedings in the District Court. A defence was put on by Mr Menyhart and that defence raised one issue, in effect, and that was that Mr Golotta had agreed to act for the appellant in the appeal and in the subsequent re-hearing in the Supreme Court upon the basis that for his services he would recover no more than party and party costs from the appellant and that is the way the matter proceeded to trial and was conducted before Judge Johnson. Judge Johnson found, as I have said, in favour of the plaintiff. In the course of doing so, he expressly rejected the assertion that an agreement had been made by Mr Golotta confining his remuneration to a party and party basis. His evidence was accepted and Mr Menyhart's evidence was not. The grounds of appeal that were relied on are that, firstly, his Honour erred in law in applying what his Honour referred to as the "normal fees" to the facts of the present case; that he erred in the exercise of his discretion in failing to grant an adjournment on 4 December; that he erred by interrupting Mr Menyhart repeatedly and prevented him from making suitable answers and commanded him or suggested to him his preferred version of the answer which he says he accepted under duress or because he was in awe of the court; and finally, that he erred by ignoring the balance of credit between the two parties and the defendant was confused and he claims that his confused state was in great part caused by the judge not behaving properly. It can be seen that grounds four, five and eight, being three of the four grounds now relied on, amount to an allegation that, during the course of the hearing, Judge Johnson denied procedural fairness to Mr Menyhart in the steps he took during the case. I might say, for my part, it is a somewhat astonishing submission bearing in mind, on my understanding of the transcript, the patience and perseverance and, I have to add, help that Judge Johnson gave to Mr Menyhart who was then appearing in person with the assistance of Mr Nagy Horty. Firstly, he endeavoured to have Mr Menyhart receive legal aid. He allowed him the assistance of Mr Nagy Horty which was an unusual step and the step, I would add, so far as I am concerned, that swung the balance in allowing Mr Nagy Horty to appear in this appeal. For my part, I can see nothing in the way his Honour conducted the trial that showed that he did not give to the appellant procedural fairness as is required to be given. What is now being argued is that Judge Johnson should have considered that, contrary to the provisions of s21 of the Legal Practitioners Act (1898) which was in force at the relevant time, the respondent, Mr Golotta, commenced proceedings without serving within thirty days or of serving what was described as the bill of costs. Indeed, that is the essential argument that is now being put other than the argument that there was a lack of procedural fairness. There are two criticisms of the argument. The first, and perhaps the most important, is that this issue was simply never raised on the pleadings. It does not appear to have been raised in any way other than tangentially in the proceedings. The second is, it would seem, on that material that I have seen in the case, that, in any event, the content of the bill that was sued on was known to Mr Menyhart, the appellant, throughout 1983, 1984, 1985 and part of 1986. It was certainly URMENYHART v GOLOTTA and GALLUZZO T/as GALLUZZO and GOLOTTA (Handley) 3 known to his solicitor, Mr Sankey, throughout this time. The clear inference is, I think, that it must have been received. Mr Golotta did not commence the litigation until 1986 and, it would seem to me therefore, that there can be no legitimate criticism of the learned trial judge for not considering a matter which was not raised on the pleading and which, if he had considered it, would have led to the same result in any event. That leaves, I think, the only other issue which, by implication, is that we should not accept the learned judge's conclusions concerning who he believed and who he did not believe. That argument is tied up with the natural justice argument. Having dismissed the natural justice argument, it is disposed of by observing merely that he had the opportunity to see and hear the parties and his conclusions should not be departed from by this Court unless there are good reasons for doing so and they have not emerged in this appeal. Iam of the opinion, therefore, that this appeal should be dismissed with costs. Meagher I agree entirely with Cripps JA. I would only add one thing: that at the commencement of the appeal this Court waived its rules so as to permit the appellant to be represented in court by Mr Nagy Horty, a gentleman who had no right of audience. It is a pity this course was taken as it hardly assisted the presentation of the appellant's case. Handley I agree with the reasons for judgment which have been given by CrippsJA. I would only add, for myself, that cases must be heard and decided on the issues which have been raised for decision by the parties. In this case the issues presented by the Statement of Liquidated Claim filed on behalf of the respondent was whether the sum of approximately $16,500 was owing by the appellant, Mr Menyhart, to the solicitors in April 1986 when the proceedings were commenced. Mr Menyhart filed and served a sworn defence in April 1986, shortly after the proceedings were commenced. In those grounds of defence, he raised a question as to the contract between himself and the solicitors. No issue was taken in the grounds of defence relating to the procedural requirements in the Legal Practitioners Act (1898) in force at the time which prevent solicitors from suing their clients for legal fees unless and until an itemised signed bill of costs has been prepared and delivered to the client and thirty days has elapsed. There were extensive negotiations over some two years on the question of costs between the plaintiffs and Mr Menyhart and Norbert, Lipton and Sankey who had also acted for Mr Menyhart in relation to some aspects of his common law proceedings. It is clear therefore that Mr Menyhart was not unaware in 1986 of the legal requirements affecting solicitors and the recovery of their costs and the issue that he chose to raise as a defence in the proceedings was, as I have said, an issue based on the terms of the contract between him and the solicitors. That issue was decided by Judge Johnson after a lengthy trial in which he heard evidence from Mr Golotta and from the appellant. Having heard and seen the witnesses, the judge decided the question of fact as to the terms of the contract in favour of the solicitor and there is nothing in the material before this Court which would indicate that the appellant has denied natural justice or procedural fairness at any stage of the proceedings or which gives rise to any doubt as to the correctness of the decision of Judge Johnson on the only issues which were raised before him for his decision. For those additional reasons, I agree that the appeal fails and must be dismissed with costs. 4 UNREPORTED JUDGMENTS Meagher JA: The order of the Court, therefore, is that the appeal is dismissed with costs. Counsel for the Appellant: Mr Nagy Horty (by leave of the Court) 5 Counsel for the Respondent: D McGovern, R Bottley, Instructed by: Galluzzo and Golotta