New South Wales Supreme Court CITATION : McNEILE & ANOR v CLUSTER 3 [1999] NSWSC 655 CURRENT JURISDICTION : COMMON LAW FILE NUMBER(S) : 13113/1998 HEARING DATE(S) : 20 May 1999 JUDGMENT DATE : 1 July 1999 EDMUND PATRICK HUGH McNEILE AND ANOR PARTIES : v CLUSTER 3 PTY LIMITED JUDGMENT OF : Master Malpass LOWER COURT JURISDICTION : Costs Assessment LOWER COURT FILE NUMBER(S) : 91678/97 LOWER COURT JUDICIAL OFFICER : Richard Hughes COUNSEL : PLAINTIFF: MR P WALSH DEFENDANT: MR M LAWSON SOLICITORS : PLAINTIFF: FRANK WILSON DEFENDANT: WAYNE J BOOM CATCHWORDS : Appeal from decision of costs assessor; construction of cost order made by Master; no question of principle. ACTS CITED : Legal Profession Act 1987, s 208L. CASES CITED : N/A DECISION : SEE PARAGRAPH 19 THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION MASTER MALPASS THURSDAY 1 JULY 1999 13113/98 EDMUND PATRICK HUGH McNEILE & ANOR v CLUSTER 3 PTY LIMITED JUDGMENT 1 The proceedings were commenced by Summons filed on 21 December 1998. In substance, it brings an appeal pursuant to s 208L of the Legal Profession Act 1987 (the Act). The hearing took place on 20 May 1999. No affidavits were read. The material placed before the Court consisted of exhibits (A-K). 2 The plaintiffs had earlier brought proceedings to restrain the defendants from removing certain earthworks and a culvert to the entrance to their property. The matter was heard by Master Macready. At the conclusion of the addresses in the hearing of that claim, the defendant sought leave to put on a Cross-claim. The application was opposed. The defendant was given leave to file a Cross-claim in respect of one of the two orders sought. The leave was given on 14 May 1997. 3 The matter then proceeded to final hearing. A judgment was delivered on 28 May 1997. In that judgment, the Master expressed the view that the plaintiffs claim for relief should be dismissed. Further, he expressed the view that the declaration sought in the Cross-claim should be granted. 4 A further judgment was delivered on 19 June 1997. By that time, the plaintiffs had filed a Notice of Motion seeking to set aside the declaration and for leave to re-open their case. The leave to re-open was sought so as to enable the leading of further evidence from Mr Dart. Although the Master saw the application as an attempt to have a second chance at running their case, the Master granted the relief sought. He took this course "Bearing in mind the possibility of the conflict of findings, notwithstanding criticisms I have made of the plaintiffs". In the judgment, the Master further said "I would give leave to re-open and set aside the order I have made subject to the plaintiffs paying the costs thrown away and in particular the costs of the last hearing". 5 It is convenient to observe at this stage that what had then been said by the Master about the matter of costs did not constitute the costs order actually made by him. It seems to me that it was intended as preliminary observations to indicate the course proposed to be taken by the Master in relation to the application for leave. Further it seems to me that he had in mind that the granting of the leave to re-open was to be conditional on the plaintiffs paying certain costs. 6 The judgment concluded with the following paragraph "I order the plaintiffs to pay the costs of the prior hearing before me. I set aside the order when I dismissed the plaintiffs' claim for relief and, so there is no confusion, I also order the plaintiff to pay the costs involved in the application to reopen". 7 It is convenient to observe also at this stage that such paragraph sets forth the actual orders (including the actual cost order) made by the Master. There can be no doubt that the plaintiffs had been ordered on 19 June 1997 to pay "the costs of the prior hearing" and "the costs involved in the application to re-open". In construing the order, it needs to be borne in mind that the matters litigated up to that stage had been resolved in the defendant's favour and that no other order had been made in respect to costs incurred up to that time. The order itself does not use the expression "the costs thrown away". It may be that some lack of harmony can be seen between the preliminary observations and the terms of the order actually made. Be that as it may, it is the terms of the actual order that are material. It can be added that, to the extent that it may be material, the Master appears to have regarded the costs of the last hearing as "costs thrown away". 8 A further judgment was delivered on 20 June 1997. In that judgment, the Master expressed the view that "So far as costs are concerned, my view in respect of the hearing before me to-day and yesterday is that there has been some success on both sides in respect of the hearing on that day". He observed that "I have already made cost orders in respect of the earlier hearing before me and I do not intend to disturb that costs order in respect of the present matter". He then made an order that each party pay its own costs. 9 The matter came before Master Macready once again on 27 May 1998. The parties were inter alia seeking clarification concerning the extent of the costs order made in the judgment of 19 June 1997. In a further judgment delivered on 27 May 1998, the Master observed as follows:- "It has been submitted that in effect the change of the case presented really meant if it had been presented properly there would be no costs of the trial because the only issue would have been authority. That may be so but I think I should restrain myself to what I had in mind at that stage and I clearly first indicated that the costs thrown away should be paid by the plaintiffs and then I added some explanation to indicate that the costs thrown away included the costs of the last hearing. So there was no doubt at that stage I then went on to say I order the plaintiff to pay the (sic) of the hearing before me. So, the order I made is that first the plaintiff pay the costs of the application to reopen; second, the plaintiff pay the costs thrown away by the reopening of such case to include the costs incurred in the actual hearing before me on 14 May 1997. By way of explanation for the costs assessor, any preparation costs in the hearing of 14 May should be paid by the plaintiff if they are correctly described as costs thrown away as a result of his application to reopen." 10 These observations can be seen as no more than as a purported exposition given with the intention of clarifying the actual orders made on 19 June 1997. It may be that there is some discrepancy between what was said and ordered on 19 June 1997 and what is said in these observations. Be that as it may, I again stress that it is the terms of the actual order that are material. Once again it is made clear that the plaintiff was to pay the costs of the prior hearing and the costs involved in the application to re-open. Further, it can again be added that, to the extent that it is material, the purported exposition reinforces the view that the Master regarded the costs of the hearing as also falling within the category of "costs thrown away". I should observe also that for the first time these costs were being referred to as "the costs thrown away by the reopening of the plaintiffs' case". The purported exposition also makes it clear that the Master had in contemplation that costs thrown away (including the costs of the hearing) had the potential to pick up "preparation costs". 11 The defendant prepared a Bill of Costs. It claimed costs for all preparatory work done prior to 14 May 1997. The defendant made application to this Court for assessment of the costs on a party/party basis. The Court appointed a Costs Assessor (Mr Hughes). Objections and submissions were made to him. On 11 December 1998, he issued a Certificate as to Determination of Costs. The effect of this Determination was to allow most of the costs claimed for preparation. The Costs Assessor gave reasons for his determination. These may be found in a letter dated 11 December 1998. The letter contained the following:- "On June 20th, 1997 the Master at page 7 stated he would not disturb the orders as to the earlier hearing and then ordered each party pay its own costs. As this referred to the new hearing being that of June 20th as to the argument upon the applicability of encroachment of buildings, the order each party pay their own costs applies only to June 20th and not June 19th. To suggest (as the Costs Respondent does by the letter to me of November 7th, 1998) the reference to each party paying their own costs applies to other than solely June 20th would be to negate the very express orders the Master immediately previously made as to the proceedings of June 19th and previous to that. I reject this suggestion of the Costs Respondent. Clearly the Defendent (sic) is not entitled to costs as to the work carried out on June 20th, 1997 and as to the encroachment of buildings issue determined that day. The Costs Applicant in fact in its bill claims only for one half day on June 19th and not at all for June 20th. At issue is determining what are the limits of 'the costs thrown away by the re-opening of the plaintiff's case.' Referring to page 2 of his judgement (sic) of May 27th, 1998 which notes on June 19th, 1997 the Master set aside his earlier dismissal on May 28th, 1997 of the Plaintiff's claim, the 'throwing away' refers to the Defendent's (sic) costs in arriving at the Master's decision of May 28th, 1997 which was set aside on June 19th, 1997 when the Master gave leave to re-open the plaintiff's case. I cannot reach any clearer conclusion from this than that the costs order in favour of the Defendent (sic) includes the Defendent's (sic) costs of inter alia defending the Plaintiff's application for which judgement (sic) was given on May 28th, 1997 up to an including on June 19th, 1997. The new evidence allowed to be given for the Plaintiff when the case was agreed to be re-opened was as stated by the Master on June 20th, 1997 evidence from Mr Dart, valuers and engineers. From reading the Judgements (sic) of May 28th, June 19th and 20th 1997 it appears the nature of the questions addressed differed: the first hearing as to which judgement (sic) was given on May 28th related to acquiesence (sic), consent and equitable estoppel whereas the third hearing as to which judgement (sic) was given on June 20th, 1997 related to issues under the Encroachment of Buildings Act and further evidence of Mr Dart." 12 Section 208L provides a narrow avenue of appeal. It is restricted to a matter of law arising in the assessment proceedings. The appellant bears the onus of satisfying the Court that there is an entitlement to relief. 13 The thrust of the plaintiffs' case is that there has been an error of principle and two matters were identified. The alleged error is said to relate to the preparation costs allowed. It is said that there are such preparation costs which could not be described as "costs thrown away". The plaintiffs have informed the Court that there were some 220 preparation items. It does not point to any of these items by way of illustration of alleged error. 14 Counsel for the defendant has prepared written submissions. These were supplemented by oral argument. The thrust of the submissions is that the Costs Assessor correctly directed himself to the assessment task. He made a determination which was open to him on the material placed before him. The complaints which the plaintiffs make relate to questions of fact, and do not raise any error of law. 15 The task faced by the Costs Assessor was not an easy one. There seems to have been confusion as to the orders actually made and the effect of those costs provisions. This confusion was reflected in the manner in which issues were agitated both before the Costs Assessor and this Court. 16 In my view, the terms of the actual costs order are sufficiently clear. However, whether or not there be any ambiguity or confusion, certain matters are abundantly clear. One of these was that the plaintiffs had been ordered to pay the costs of the prior hearing. This order had the potential to pick up costs incurred prior to the actual hearing itself (including costs which may be described as being of a preparatory nature). In my view, the determination made by the Costs Assessor was open on the material placed before him. 17 I should add that there has been no appeal against the costs order. No application has been made to the Master to either vary the order or rectify any alleged error. 18 It seems to me that the submissions made on behalf of the plaintiffs are misconceived. I am not satisfied that the plaintiffs have demonstrated any error of law which would justify the disturbing of the determination. There is substance to the contention that what was argued was in reality no more than allegations as to error of fact. For completeness, it may be added that the plaintiffs have failed to identify any error of fact. 19 I dismiss the Summons. The plaintiffs to pay the costs of the Summons. The exhibits may be returned. ********** Last Modified: 07/02/1999 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.