New South Wales District Court CITATION: Legal Employment Consulting and Training Pty Ltd v Patterson [2009] NSWDC 357 HEARING DATE(S): 29 Sept 2009 JUDGMENT DATE: 2 October 2009 JURISDICTION: Civil JUDGMENT OF: Williams DCJ at 1 DECISION: i. The summons is dismissed ii. The appellant is to pay the respondent's costs of the notice of motion and the proceedings. CATCHWORDS: District Court - Declarations - Costs - Costs Review Panel - Equitable Jurisdiction Legal Profession Act 2004 LEGISLATION CITED: District Court Act 1973. Local Courts Act 1982 UCPR Turner v Pride [1999] NSWSC 850 CASES CITED: Poole v Turner 2004 NSWSC 708. Coshott v Woollahra M.C. 2008 NSWCA 176, Dyktynski v BHP Titanium Minerals P/L 2004 60 NSWLR 203 PARTIES: Legal Employment Consulting and Training Pty Ltd Lisa & Joanne Patterson FILE NUMBER(S): 2610/09 COUNSEL: Mr Gower (Solicitor) Ms McDonald (Barrister) SOLICITORS: Legal Employment Consulting & Training P/L Blake Dawson Waldron 1. Patterson has filed a Notice of Motion seeking a number of orders but primarily to have the summons commencing the appeal struck out. 2. The summons was filed on 17/06/2009. 3. The orders sought were : 1 To the extent necessary leave to appeal granted. 2 Appeal Allowed. 3 The Certificates of Determination of the Review Panel in Costs Review 7922 of 2008, issued on 22 April 2009, sent by the Manager, Costs Assessment on 20 May 2009 (and received by the Plaintiff on 22 May 2009), being: a. Certificate of Determination of Costs by Costs Review Panel (Form 10); and b. Certificate of Determination of Costs of Review (Form 11) be set aside. 4 A declaration that the Review Panel erred in law in not acceding to The Plaintiff's request to reduce the Certificate of the Assessor to $900.00. 5 To the extent necessary, the Certificate of Determination of costs assessor Mark Campbell issued on 29 September 2008. be set aside. 6 A declaration that, at all relevant times, there was no retainer between the First and Second Defendants ("the Defendants") and the law firm known as William Roberts Lawyers Ply Ltd trading as William Roberts Lawyers ("William Roberts Lawyers"). 7 A declaration that, at all relevant times, the Defendants had no, and have no liability to pay costs in respect of legal services to William Roberts Lawyers. 8 A declaration that the Plaintiff is not liable to pay to the Defendants any costs as a result of orders of the Local Court on 22 and 23 August 2007 (in matter number 4914 of 2006). 9 Costs of the Assessment, the Review and this Appeal. 10 Any such further order as the Court considers appropriate. The grounds of appeal were : 1 The Panel erred by failing to properly distinguish those cost actually incurred by the Defendant from those costs not associated with the Motion the source of the order. 2 The Panel erred in not reducing Counsels fees to nil where those fees were not incurred as a result of or connected with witness expenses. 3 The Panel erred in its application of the indemnity principle in respect of this assessment and the Panel's determination will result in an undue enrichment of the Respondent, or the making of a profit by the Respondent when acting for himself. 4. Legal Employment Consulting & Training (Legal) appeals against a costs assessment of the Review panel constituted under the provisions of the Legal Profession Act 2004. The Review Panel's decision was the result of an appeal by Legal against the assessment of the Costs Assessor. 5. Appeals from the Review Panel are governed by ss 384 and 385 of the LP Act. ss 384 provides as follows: - (1) A party to an application for a costs assessment who is dissatisfied with a decision of a costs assessor as to a matter of law arising in the proceedings to determine the application may, in accordance with the rules of the District Court, appeal to the Court against the decision. (2) After deciding the question the subject of the appeal, the District Court may, unless it affirms the costs assessor's decision: (a) make such determination in relation to the application as, in its opinion, should have been made by the costs assessor, or (b) remit its decision on the question to the costs assessor and order the costs assessor to re-determine the application. (3) On a re-determination of an application, fresh evidence, or evidence in addition to or in substitution for the evidence received at the original proceedings, may be given. ss 385 provides as follows: - (1) A party to an application for a costs assessment relating to a bill may, in accordance with the rules of the District Court, seek leave of the Court to appeal to the Court against the determination of the application made by accosts assessor. (2) A party to an application for a costs assessment relating to costs payable as a result of an order made by a court or a tribunal may, in accordance with the rules of the court or tribunal, seek leave of the court or tribunal to appeal to the court or tribunal against the determination of the application made by accosts assessor. (3) The District Court or court or tribunal may, in accordance with its rules, grant leave to appeal and may hear and determine the appeal. (4) An appeal is to be by way of a new hearing and fresh evidence, or evidence in addition to or in substitution for the evidence received at the original proceedings, may be given. (5) After deciding the questions the subject of the appeal, the District Court or court or tribunal may, unless it affirms the costs assessor's decision, make such determination in relation to the application as, in its opinion, should have been made by the costs assessor. 6. As can be seen, appeals under s384 can only relate to a matter of law arising out of the assessor's decision. 7. Under s385 appeals are of two types. Ss (1) relates to an application for a costs assessment relating to a bill. A bill is defined in s302 as a bill of costs for providing legal services. An appeal under s385(1) requires the leave of the court. Having regard to s385(2) and s350(1) I am satisfied that s385(1) relates to a bill of costs prepared by a solicitor for a client. 8. Section 385(2) however, applies to a bill of costs that comes about as a result of a court order to pay costs. Both are bills of costs but the appeal rights are quite different in each case and understandably so. Where the costs result from an order of a court or tribunal, a party to the assessment can seek leave to appeal to the court or tribunal that made the costs order. If leave is granted the appeal is by way of a rehearing of the costs application not, I would point out, a re-hearing of the issues giving rise to that original litigation. 9. The costs assessment presently appealed against is one arising out of orders by the Local Court against Legal, or rather it's predecessor in title Insight Litigation and Legal Services (Insight). Subject to any supervisory jurisdiction of the Supreme Court, the appeal is one that should be dealt with in the Local Court and the District Court. The District Court has no jurisdiction to deal with such an application, at least at first instance. That position is supported by two decisions of Master Malpass in the Supreme Court:- Turner v Pride [1999] NSWSC 850 and Poole v Turner 2004 NSWSC 708. 10.The practical sense behind the different avenues of appeal is that a client's dissatisfaction with a solicitor's bill of costs, now appellable ultimately to the District Court instead of the Supreme Court, is best dealt with at a uniform level now being the District Court, whereas dissatisfaction with bills of costs arising out of court orders are best dealt with by the court that made the order in the first place, because that court is going to be best placed to resolve any contentious issues. 11. It is also apparent that the summons for leave does not comply with the rules in that it does not comply with either UCPR 50.12(4) or UCPR 50.4(2). Whether such a failure warrants summary dismissal, in accordance with some authority, is debateable as it is possible that an adjournment could be granted to enable the party to comply with the rules. The summons in this matter does not set out briefly or at all the grounds relied on in support or the particular the error of law said to have occurred. In the present case I would not dismiss the summons on that ground alone, given that the appellant is some sort of incorporated legal practice. 12.The grounds themselves are difficult to understand. Ground 1 seeoms to relate to an issue of fact by the Costs Review Panel. Ground 2 is incomprehensible. Ground 3 raises a potential issue of law, but also contains an error of fact in that the respondents never acted for themselves as alleged. 13.The Pattersons were sued in the Local Court for property damage arising out of a motor vehicle accident. Legal or its predecessor in title, Insight, were the solicitors for the plaintiff, someone called Latuharhary. 14. An issue arose as to the authority of Insight to commence proceedings on behalf of the plaintiff and a notice of motion was filed for the Pattersons. 15. The Pattersons, being comprehensively insured by NRMA Insurance (IAL) were legally represented by solicitors for the NRMA under the policy of insurance. The NRMA indemnified them as to both damages and costs. 16. As appears from the respondent's helpful summary, what then occurred was that at a mention of the matter on 3 November 2006 Mr Gower, on behalf of the Insight Legal alleged that William Roberts, Holman Webb (being lawyers engaged by Ms Latuharhary) and IAL had formed a conspiracy against Insight Legal. These allegations were subsequently repeated in correspondence that was provided to Blake Dawson Waldron who acted as IAL's legal adviser in general corporate matters. IAL subsequently applied, successful, to be joined as a Defendant in the proceedings and as a third applicant on the Motion for dismissal of the proceedings. They were represented at all times by Blake Dawson Waldron. 17. The Motion was heard on 22 and 23 August 2007 by Dillon LCM who found in favour of the Applicants on the motion, found that there was no basis for the allegations of conspiracy and made the following orders: 1. The proceedings brought in the name of Madonna Latuharhary were dismissed. 2. The respondent [Insight Legal] is to pay the defendants costs of the dismissed proceedings in a sum agreed or assessed on an indemnity basis. 3. The respondent [Insight Legal] is to pay the applicant's, Insurance Group Australia's, costs of the motion seeking to be joined in the proceedings in a sum agreed or assessed on the indemnity basis. 4. The respondent [Insight Legal] is to pay the costs of each applicant in relation to the motion seeking to dismiss the proceedings brought in the name of Madonna Laturharhary in sums agreed or assessed on the indemnity basis. 18. The Defendants duly lodged an Application for Assessment of the costs ordered to be paid by Insight Legal to the Defendants and on 29 September 2008 the Costs Assessor Mr Mark Campbell issued a Certificate of Determination of Costs in which he determined that the fair and reasonable amount of costs to be paid by Insight Legal to the Costs Applicants was $52,700. That decision was appealed to the Review Panel and is now appealed to this court. 19. As I understand Mr Gower's argument it is that because the NRMA indemnified the Pattersons and as the costs assessment order by the Panel was made in favour of the Pattersons, they would therefore be unjustly enriched. Whilst it is not necessary for me to go into the facts, the argument is that there is no evidence of any agreement between the Pattersons and the NRMA enabling costs paid to the former to be recoverable by the latter. 20. However, as was pointed out by Ms McDonald for the Pattersons, Coshott v Woollahra M.C. 2008 NSWCA 176, has held that is irrelevant. Handly AJA said "subrogation is an equitable right which does not depend on a contractual entitlement." That being the case, the existence or not of any formal retainer between the Pattersons and the NRMA is unnecessary given that they were indemnified by NRMA in regard to the claim for property damage in the litigation by Latuharhary. 21. In any event, the NSWCA in Dyktynski v BHP Titanium Minerals P/L 2004 60 NSWLR 203 has held at 220 that costs are understood to be an indemnity to the real party bringing the action, without regard to the liability of the nominal party who appears on the court record. In such a case, the indemnity principle operates on the substance rather than the form to produce a sensible and just result. (Per McColl JA, Mason P and Davies AJA agreeing). 22. The application of the Legal Practitioners Act ss384 & ss385 and the issue re subrogation essentially disposes of this matter. However, I feel I should also comment on some of the orders sought in the summons. Orders 4, 6, 7, and 8 in the summons seek declarations by the District Court. 23.The courts jurisdiction in equity proceedings is governed by s134, and s46 of the District Court Act 1973. The District Court is a statutory court and its equitable jurisdiction is confined by the Act. It does not include the power to grant declaratory relief and nothing has been placed before me to persuade me otherwise. I would also point out that as far as I have been able to ascertain the Local Court is likewise unable to grant declaratory relief, under s65 of the Local Courts Act 1982 as would then have applied. In any event, as the hearing is a re-hearing the declarations sought are unnecessary surplusage. 24.This court has no jurisdiction to deal with the summons. 25.1 make the following orders: - i. The summons is dismissed ii. The appellant is to pay the respondent's costs of the notice of motion and the proceedings. 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.