New South Wales Supreme Court CITATION : Biffin v Ulan Coal Mines Pty Ltd [2000] NSWSC 173 CURRENT JURISDICTION: Common Law FILE NUMBER(S) : SC 12982/98 HEARING DATE(S) : 14 March 2000 JUDGMENT DATE : 20 March 2000 John Biffin (Plaintiff) PARTIES : Ulan Coal Mines Pty Limited (Defendant) JUDGMENT OF : Master Harrison Mr B Guest (Plaintiff) COUNSEL : Mr N Chen (Defendant) Ms R Dimaridis of Maurice May & Co (Plaintiff) SOLICITORS : Mr A Carter of Sparke Helmore (Defendant) CATCHWORDS : Leave to appeal decision of costs assessor - s 208M - cl 26D LEGISLATION CITED : Legal Profession Act 1987 (NSW) Legal Profession Regulation 1994 Larsen v Vile [1999] NSWCA 397 Chapmans Ltd v Yandell [1999] NSWCA 361 Coulter v Regina (1988) 166 CLR 350 CASES CITED : CDJ v VAJ [1998] HCA 67 Coal & Allied Operations Pty Limited v Clifton & Anor & Nova Coal Australia Pty Limited v Ward & Anor (NSWSC, unreported Master Harrison 27 August 1997) Attorney General for New South Wales v Kennedy Miller Television Pty Limited (1998) 43 NSWLR 729 Ilic v Radin (NSWSC, unreported Finlay J, 18 December 1994) DECISION : See para 21 10 THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION MASTER HARRISON MONDAY, 20 MARCH 2000 12982/98 - JOHN BIFFIN v ULAN COAL MINES P/L JUDGMENT (Leave to appeal decision of costs assessor) 1 MASTER: By summons filed 7 December 1998 the plaintiff seeks an order that leave be granted to appeal the determination of costs assessor Raymond John Moyle dated 20 November 1998 pursuant to s 208M of the Legal Profession Act 1987 (NSW) (the Act). An appeal is not brought pursuant to s 208L. The plaintiff relied on the affidavits of Michael John Magee sworn 10 February 1999 and Katherine Barton sworn 1 March 1999. 2 The grounds of appeal are as follows: (1) The costs assessor erred in relation to his application of the hourly rate of $40. (2) The costs should have disallowed a component for care, skill and attention when the bill of costs had not been presented on a time costing basis. (3) The costs assessor should have had regard for determinations and reasons issued by other costs assessors in the interest of uniformity and consistency. (4) Whether the costs assessor can assess costs with reference to the judgment obtained and when it does not reach expectations validly held purport to reduce the costs on that basis. (5) The costs assessor should have had regard to former taxation principles when exercising his discretion under cl 26D of the Legal Profession Regulation 1994. 3 A short history of the matters is as follows: (1) On 30 August 1993 the plaintiff commenced proceedings against the defendant in the District Court claiming damages for noise-induced hearing loss. (2) On 24 March 1998 the matter was heard before Acting Judge Bowden with a jury. The jury returned a verdict of $10,000 plus interest of $1,000. The defendant was ordered to pay the plaintiff's costs up to 26 May 1997 on a party/party basis. (3) A bill of costs was submitted by the plaintiff's solicitor which totalled $55,996.05. This amount was made up of $23,244.50 for professional costs and $32,751.55 for disbursements. The defendant filed a notice of objection which conceded only $780. The plaintiff filed a reply. (4) On 20 November 1998 the costs assessor Mr Moyle, issued a certificate as to determination which assessed a fair and reasonable amount of costs was $38,805.33. This amount was made up of $12,377.82 for professional costs and $27,378.55 for disbursements. The costs assessor allowed half the plaintiff's costs in relation to the assessment and adjustments were made accordingly. 4 The approach that should be taken by the court in an appeal from a costs assessor was set out in Larsen v Vile [1999] NSWCA 397. An appeal under s 208L is confined to law, whereas an appeal under s 208M (provided leave is granted) is a complete new hearing (at para 31). 5 Section 208M of the Act provides: "Appeal against decision of costs assessor by leave (1) A party to an application relating to a bill of costs may, in accordance with the rules of the Supreme Court, seek leave of the court to appeal to the court against the determination of the application made by a costs assessor. (2) A party to an application 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 a costs assessor. (3) The Supreme 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 Supreme 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 In Chapmans Ltd v Yandell [1999] NSWCA 361, Fitzgerald JA (with whom Mason P and Davies AJA agreed) stated that it is important to keep in mind that the purpose of a requirement of leave to appeal is that it is intended to act as a filter to ensure that unsuitable appellant proceedings are not able to be brought with the demands which that places upon the resources of the court and the burden which it places upon other parties and the delays which it causes to other litigants. - see also Coulter v Regina (1988) 166 CLR 350 at 359. 7 Fitzgerald JA also stated that if leave to appeal should be granted where there is some other matter which in justice required that leave to appeal be granted to allow that matter to be relitigated, the party seeking leave to appeal obviously bears the burden of establishing that justice does require that leave to appeal be granted. Further, the court when considering whether to grant leave to appeal obviously has a very wide discretion - see CDJ v VAJ [1998] HCA 67 (per McHugh, Gummow and Callinan JJ). 8 As previously stated the bill of costs claimed $55,996.05 and the sum of $38,805.33 was allowed, that is, $17,190.72 was deducted. Only $5,373 was deducted from the amount claimed for disbursements. If one looks at the amount involved, it is my view that there is no substantial injustice to the plaintiff if the decision of the costs assessor is allowed to stand. For this reason alone I would dismiss the appeal. If I am wrong, I turn to consider the grounds of appeal. 9 In relation to the amount allowed for the hourly rate of work performed by Mr Magee a clerk, the plaintiff referred to Coal & Allied Operations Pty Limited v Clifton & Anor and Nova Coal Australia Pty Limited v Ward & Anor (NSWSC, unreported Master Harrison, 27 August 1997). Those cases were decided before a costs assessor was obliged to give reasons - see Attorney General for New South Wales v Kennedy Miller Television Pty Limited (1998) 43 NSWLR 729. 10 In Clifton and Ward the verdicts were $57,963 and $49,000 respectively. They were claims for hearing loss. In Clifton costs were awarded on an indemnity basis. In those cases, the costs assessor allowed Mr Magee's hourly rate at $140 per hour. The defendants in those cases submitted the amount allowed was too high. In those cases, I referred to Ilic v Radin (NSWSC, unreported Finlay J, 18 December 1994) and stated: "It is my view that the taxing officer and costs assessor have a discretion as to whether or not they apply the rates set out in the District Court schedule. The schedule is a guide only. The hourly rate appropriate for a managing clerk was not contested. The argument in Ilic proceeded on the basis that it was common ground that the rate for a clerk was half of that allowed for a solicitor but it may be more. Finlay J in Ilic notes that there was some doubt as to whether the taxing officer can determine whether or not the hourly rate was allowed on the basis of the person being legally qualified. If the person was not qualified, Finlay J said that the taxing officer may set such rate in his or her discretion was appropriate. The costs assessor and for that matter, the taxing officers were not obliged to adhere to the scale of costs. It may be that the costs assessor, in his discretion, was of the view that the "senior managing clerk" did the job as well as a solicitor and accordingly remunerated him at the same rate." 11 The costs assessor had regard to the Clifton and Ward decisions and applied them correctly. In his reasons, the costs assessor stated that although Mr Magee had conduct of the matter, there had been a heavy reliance on counsel in the matter. The costs assessor allowed nearly all of counsel's fees but assessed Mr Magee's hourly rate at $40. While this hourly rate would seem on the low side, it was a discretion matter and the sum of $40 was well within the costs assessor's discretion. 12 In relation to care, skill and consideration (item 531 in the bill of costs) the plaintiff submitted to the costs assessor that 15% of the professional costs should have been allowed for that item whereas the defendant submitted to the court that an appropriate amount was 5%. The costs assessor awarded 5% of professional costs for skill, care and consideration. The plaintiff's hearing loss was not substantial. The plaintiff submitted that even though the verdict was low, the same amount of work was involved as that of a case involving significant hearing loss. The costs assessor took into account the limited role that Mr Magee played. It was counsel who gave the advice and had the running of the case. In these circumstances, although 5% was on the low side, it was within the costs assessor's discretion to arrive at that figure. 13 I turn to the third ground of appeal namely, whether the costs assessor should have regard for the determination and reasons of other costs assessors. The costs assessor is obliged to determine what was a fair and reasonable amount to allow for costs. Each case is determined on its facts. The costs assessor was obliged to consider matters in s 208A(1) of the Act and was entitled to have regard to the matters set out in s 208B. The costs assessor complied with these obligations. He is not compelled to apply the hourly rate of $140. 14 It is difficult to fully appreciate what is meant by the fourth ground of appeal. However it does not appear to be a matter for which leave should be granted. It may be that the plaintiff is submitting that the costs assessor should not have taken into account the amount of costs expended in light of the amount of verdict moneys recovered. In relation to s 208Q of the Act, ie., whether the matter should be referred to the Commissioner for the deliberate charging of a grossly excessive amount. The costs assessor commented that it was difficult to comprehend. Ultimately he decided not to make such a report. There is something seriously wrong when a verdict of $10,000 plus interest of $1,000 generates costs of $55,996.05 up to the stage where an offer of compromise was served. It is appreciated that in the first trial there was a verdict for $80,000. Still $55,996.05 for costs is very high. For a verdict of $10,000, the costs assessor assessed costs at just short of $40,000. 15 I turn to the fifth ground of appeal namely whether the costs assessor should have regard to the former taxation when exercising his discretion under clause 26D of the Legal Profession Regulation 1994. 16 Clause 26D reads as follows: "Determination of costs of party/party assessment In determining under section 208F (4) of the Act by whom and to what extent the costs of the assessment of party/party costs are to be paid, the costs assessor may have regard to the following: (a) the extent to which the determination of the amount of fair and reasonable party/party costs differs from the amount of those costs claimed in the application for assessment, (b) whether or not, in the opinion of the costs assessor, either or both of the parties to the application made a genuine attempt to agree on the amount of the fair and reasonable costs concerned, (c) whether or not, in the opinion of the costs assessor, a party to the application unnecessarily delayed the determination of the application for assessment." 17 Section 208F(4) the Act provides: "(4) The costs assessed are to include the costs of the assessment (including the costs of the parties to the assessment, and the costs assessor). The costs assessor may determine by whom and to what extent the costs of the assessment are to be paid." 18 The costs assessor allowed the plaintiff half the costs of the assessment. Costs are discretionary. He was entitled to make this order. This is not a matter for which leave should be granted. 19 After considering all the grounds of appeal, on both an individual and cumulative basis it is my view that justice demands that leave to appeal be refused. The decisions that the costs assessor made concerning the items complained about were decisions he was entitled to make. Additionally, the decision was made in November 1998. The summons for leave to appeal was filed on 7 December 1998. It has taken over one year for the plaintiff to have this application determined. The plaintiff has not acted expeditiously. No explanation has been offered for this delay. This is a further reason to refuse leave to appeal. 20 The decision of the costs assessor is affirmed. Leave to appeal is refused. The summons is dismissed. Costs are discretionary. Costs should follow the event. The plaintiff is to pay the defendant's costs as agreed or assessed. 21 The orders I make are: (1) The decision of the costs assessor dated 20 November 1998 is affirmed. (2) Leave to appeal is refused. (3) The summons is dismissed. (4) The plaintiff is to pay the defendant's costs as agreed or assessed. ********** Last Modified: 09/25/2000 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.