KNPW Lawyers v Waldmann [1999] NSWSC 910

New South Wales Supreme Court CITATION : KNPW Lawyers v Waldmann [1999] NSWSC 910 CURRENT JURISDICTION : Common Law FILE NUMBER(S) : 10814/1999 HEARING DATE(S) : 24 August 1999 JUDGMENT DATE : 9 September 1999

Marcel I Kalfus, George B Newhouse, Leslie M S Pozniak, Peter Wise and Anna Nanos PARTIES : practising as KNPW Lawyers (Plaintiffs) v Otto Waldmann (Defendant) JUDGMENT OF : Master Malpass

LOWER COURT JURISDICTION : Costs Assessment LOWER COURT FILE NUMBER(S) : 90581/1998 LOWER COURT JUDICIAL OFFICER : Leonard S Hattersley

Mr P Strasser (Plaintiffs) COUNSEL : N/A (Defendant)

SOLICITORS : KNPW Lawyers (Plaintiffs) In Person (Defendant) CATCHWORDS : Appeal as to matter of law; no question of principle. Legal Profession Act 1987, s 182 (3), s 208A, s 208B, s 208L, s 208M. ACTS CITED : Suitors' Fund Act 1951. Legal Profession Regulation 1994. CASES CITED : Hook v Simpsons (1999) NSWSC 667. DECISION : See paragraphs 22-24.

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

MASTER MALPASS

THURSDAY 9 SEPTEMBER 1999

10814/1999 MARCEL I KALFUS, GEORGE B NEWHOUSE, LESLIE M S POZNIAK, PETER WISE AND ANNA NANOS PRACTISING AS KNPW LAWYERS v OTTO WALDMANN JUDGMENT 1 The plaintiffs are a firm of solicitors. During 1996 and 1997, the plaintiffs performed legal work for the defendant. 2 The plaintiffs rendered five Bills of Costs to the defendant. The first bill was dated 22 April 1997 for costs in the sum of $1,350. The second bill was dated 21 February 1997 for costs in the sum of $2,978. The third bill was dated 4 March 1997 for costs in the sum of $500. The fourth bill was dated 4 March 1997 for costs in the sum of $1,672. The fifth bill was dated 19 March 1997 for costs in the sum of $2,837. 3 On 20 March 1998, the defendant made application to this Court for an assessment of costs. The application was referred to a Costs Assessor (Mr Hattersley). He completed his assessment and issued a Certificate As To Determination Of Costs on 23 March 1999. It was a protracted assessment which generated a volume of documentation. There were many communications between the parties and the Costs Assessor. 4 The certificate was accompanied by a letter dated 12 March 1999. It sets out his reasons for the determination. There is other correspondence from the Costs Assessor which provides information as to earlier decisions made by him in the assessment. 5 The Costs Assessor said that he had no authority to assess the first Bill of Costs because it was the subject of a Costs Agreement. He disallowed the costs claimed in the second and third Bill of Costs on a number of grounds, (including lack of retainer). He reduced the fourth bill to a sum of $1,248. He reduced the fifth bill to a sum of $2,145. He determined that these two amounts represented a fair and reasonable charge for the work done in relation to the fourth and fifth bills. 6 On 8 April 1999, the plaintiffs commenced these proceedings. Relief is sought pursuant to s 208L of the Legal Profession Act 1987 (the Act). Under this section, the appeal is limited to "a matter of law arising in the proceedings to determine the application". 7 The plaintiffs are legally represented. Counsel appeared on their behalf. The defendant appears in person. Despite the modest sums involved, the proceedings have been vigorously litigated. 8 At the commencement of the hearing, the plaintiffs sought leave to file an Amended Summons which sought relief also under s 208M. The application was opposed. It is the practice of the court to require the parties to proceed on the case as propounded and on the evidence then filed at the time of the giving of the special fixture. The proposed amendment was clearly going to be prejudicial to the defendant who was appearing in person. The small amount involved made any question of adjournment inappropriate. In any event, the proposed amended relief had its own problems. The application for leave was now out of time and it would have been necessary for the plaintiffs to satisfy the court that an extension of time should be granted. It appeared that the plaintiffs may not have had the evidence to address such a matter. In the circumstances, the application to add a claim for relief under s 208M was refused. By consent, an Amended Summons was filed. The purpose of this document was said to present a better statement of the grounds of appeal. 9 The plaintiffs also had in contemplation the filing of further affidavits in court. The application to rely on this additional material was not pressed. By consent, the court proceeded on the basis that it should have before it the material submitted to the Costs Assessor for consideration. 10 The case that was ultimately presented related to only the second and third bills. Although the amount in dispute was in the order of about three and a half thousand dollars, the hearing took most of the day. 11 Largely, the plaintiff contended that there were four errors of law. Firstly, it was said that the Costs Assessor erred in proceeding to assess the Bills of Costs because the application had been brought out of time. Secondly, it was said that he should not have proceeded to an assessment because both bills were the subject of a Costs Agreement. Thirdly, it was said that the Costs Assessor's findings as to lack of retainer were erroneous. Fourthly it was said that the Costs Assessor erred in exercising jurisdiction in relation to Family Law matters. 12 The scheme for assessment imposes time limitations for the making of applications by clients for assessment of costs (See Hook v Simpsons (1999) NSWSC 667). The matter of time limitations was raised by the Costs Assessor. He received submissions from both parties. The submissions generated questions of fact (inter alia as to the time of the giving of the bills). It appears that the Costs Assessor did not accept the submissions made on behalf of the plaintiffs. After considering the submissions, he proceeded with the assessment of those bills. 13 It is immaterial that other minds may have formed a different view on this question, the decision that was made was open to the Costs Assessor. I am not satisfied that there was any error of law on this question. 14 For completeness, I should refer to one other matter which is relevant to this question. It was open to the Costs Assessor to find that neither of the two purported bills satisfied the requirements of the Act and the Legal Profession Regulation 1994 (the Regulation). Bills which satisfied the requirements of the Regulation were not given until 12 February 1999 (after a request for a detailed bill had been made by the Costs Assessor). 15 Both bills are expressed to have been given pursuant to a Costs Agreement dated 28 October 1996. The submissions put to the Costs Assessor raised issue as to the making of that agreement. At the relevant time, the defendant was in Romania and contends that he did not receive a facsimile transmission from the plaintiff dated 28 October 1996 (this communication contained the alleged Costs Agreement). The Costs Assessor reached the decision that the defendant did not receive the plaintiffs' facsimile. Accordingly, he proceeded with the assessment on the basis that sections 208A, 208B and 182 (3) had application. As I have earlier said, it does not matter if other minds may have formed a different view, the decision made by the Costs Assessor was open on the material placed before him. I am not satisfied that there was any error of law on this question. 16 The Costs Assessor formed the view that no costs were payable pursuant to either of the bills. I shall now turn to the reasons presented for the reaching of that view. It was said that no retainer existed for the purported performance of services from 3 September 1996 until 6 January 1997. It was said that some of the services had been separately charged in other bills. It was said that some of the services related to matrimonial matters. It was said that there was no retainer for other aspects of the bill. 17 However it was put, both in the assessment and in these proceedings, in substance the stand taken by the defendant was that the plaintiffs had a retainer of a limited nature during the pre 6 January 1997 period. It was not said that there was no retainer at all. It appeared to be the position of the defendant that the plaintiffs were entitled to either an ex gratia payment or a nominal sum which reflected the value of the limited services provided. In the circumstances, there is no alternative but to conclude that the Costs Assessor has misdirected himself. 18 It was common ground that exclusive jurisdiction to deal with costs relating to matters of Family Law lay elsewhere. It was common ground that the Costs Assessor either lacked power or authority to assess costs relating to Family Law matters. Whilst also holding that view, the Costs Assessor has unwittingly made assessment in respect of them. Instead of declining to make any assessment in respect of them, he has in effect disallowed items relating to Family Law matters. 19 The plaintiffs identify a number of matters which they say relate to Family Law costs. They fall within a period from 21 October 1996 up to 3 March 1997. These items appear in both bills. 20 The plaintiff has demonstrated errors of law. They are entitled to some costs under each of the two bills. Whatever the quantum of that sum may be, one thing is clear, it will be modest. Despite this, the court has no option but to set aside the determination, in so far as it relates to each of the two bills, and to refer the matter of their assessment back to the Costs Assessor. 21 It is unfortunate that this course has to be taken. The end result will inevitably be disproportionate to the costs and effort involved in the exercise. It is hoped that the parties can reach some reasonable compromise and so avoid a reassessment. 22 I set aside the determination made in the assessment of the Bill of Costs dated 21 February 1997 for costs in the sum of $2,978. I set aside the determination made in the assessment of the Bill of Costs dated 4 March 1997 for costs in the sum of $500. I remit the question of the assessment of those two bills to the Costs Assessor for re-determination. 23 The question of costs is a vexed one. It appears that the Suitors' Fund Act 1951 has no application in the present case. I bear in mind the amount in issue and the fact that the plaintiffs prepared the bills. Although, the plaintiffs have been successful in having the two bills remitted for re-determination, they were successful on only two of the four questions argued. Each side has had some success. It seems to me that justice is best done if I make no order as to the costs. 24 The exhibits may be returned. **********