New South Wales Supreme Court CITATION : Koffel v Tropeano & Anor [2001] NSWSC 118 CURRENT JURISDICTION: Administrative Law FILE NUMBER(S) : SC 10283/2001 HEARING DATE(S) : 2 March 2001 JUDGMENT DATE : 12 March 2001 Ross Carl Koffel (Plaintiff) PARTIES : Antonio Tropeano (First Defendant) Mark Campbell (Third Defendant) JUDGMENT OF : Master Harrison Mr G A Sirtes (Plaintiff) COUNSEL : Mr R Campbell (First Defendant) Ms T Middleton of Koffels (Plaintiff) SOLICITORS : de Mestre & Company (First Defendant) Mr Croucher State Crown Siolicitors Office CATCHWORDS : Appeal against costs assessor's decision LEGISLATION CITED : Legal Profession Act Larsen v Vile [1999] NSWCA 397 Gilberto v Kenny Co Ltd (1920) 28 CLR 66 at 75 CASES CITED : Wilson v Hart (1817) 7 Taunt 295 at 304; 129 ER 188 at 122 Coldelfa Constructions (1982) 149 CLR 337 at 352.4 Prenn v Simmonds [1971] 1 WLR 1381 at 1383-4) DECISION : (1) The decision of the costs assessor Mr Mark Campbell dated 19 January 2001 is affirmed; (2) The summons is dismissed; (3) The plaintiff is to pay the first defendant's costs 10 THE SUPREME COURT OF NEW SOUTH WALES ADMINISTRATIVE LAW DIVISION MASTER HARRISON MONDAY, 12 MARCH 2001 10283/2001 - ROSS CARL KOFFEL v ANTONIO TROPEANO & ANOR JUDGMENT (appeal against a costs assessor's decision - s 208L LPA) 1 MASTER: By summons filed 1 February 2001 the plaintiff seeks firstly, an order setting aside the certificate as to determination of costs by the costs assessor Mr Mark Campbell issued on 19 January 2001; and secondly, that the assessment be remitted to the costs assessor to determined the matter according to law. The plaintiff relied on his affidavit sworn 1 February 2001 and the affidavit of Tracey Gail Middleton sworn 1 February 2001. The first defendant relied on his affidavit sworn 28 February 2001. The second defendant Mark Campbell is the costs assessor. 2 The plaintiff Ross Koffel is a solicitor practising in the State of New South Wales. The defendant Antonio Tropeano is a legal practitioner in the State of South Australia. The issue is whether the plaintiff acted as agent for the first defendant's solicitors in Adelaide or acted directly for the client, Australia Wide Management and Finance Service Pty Limited (Australia Wide). The person responsible for giving instructions in Australia Wide was Mr Korallis. The bill of costs sought payment of about $40,000 from the respondent. 3 The grounds of appeal are, firstly, that the costs assessor erred in law in holding that there was no costs agreement between the plaintiff and the first defendant pursuant to the Legal Profession Act 1997; secondly, the costs assessor erred in law in holding that the costs agreement dated 1 March 2000 was a draft costs agreement; and thirdly, in holding that there was no costs agreement between the plaintiff and first defendant, the costs assessor further erred in holding that the first defendant was the agent of a disclosed principal. 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. 5 Section 208L of the Act provides: "Appeal against decision of costs assessor as to matter of law (1) A party to an application 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 Supreme Court, appeal to the Court against the decision. (2) After deciding the question the subject of the appeal, the Supreme 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." 6 Section 208B provides that in assessing what was "a fair and reasonable amount of costs, a costs assessor may have regard" to any or all of the matters then listed in following paragraphs (a) to (j). For present purposes the following of those paragraphs are particularly relevant: " … (a) whether the barrister or solicitor complied with any relevant regulation, barristers rule, solicitors rule or joint rule, (b) whether the barrister or solicitor disclosed the basis of the costs or an estimate of the costs under Division 2 and any disclosures made, (c) … (d) any relevant costs agreement (subject to section 208C), ..." 7 On 19 January 2001 the costs assessor gave reasons. The costs assessor determined that the respondent, Anthony Tropeano was not liable for the costs incurred. On 19 January 2001 the costs assessor issued a certificate stating that the amount owing to the respondent to the applicant is nil. 8 The costs assessor's reasoning for his decision is as follows: "The earliest correspondence between the parties is a letter from the Cost Respondent to the Cost Applicant dated 24 January 2000 and headed 'RE: INSTRUCTIONS TO ACT'. The first sentence states ' I confirm our telephone conversation of today whereby you accepted instructions to act for out client Austwide Management Services Pty Ltd.' Next there is a letter from the Applicant to the Respondent dated 1 March 2000. It does not refer to the letter of 24 January but to a ' telephone conversation/meeting with you' . Given that the Respondent is in Adelaide together with the language adopted, suggests to me that the 1 March 2000 is a standard form letter for the engagement of lay clients and did expressly contemplate the engagement of another practitioner on the basis that that practitioner is to be directly liable for costs. The March letter encloses what is referred to as an original Costs Agreement. The letter goes on to say: 'The Legal Profession Act requires disclosure of various information to you including details of our costs, terms of trade etc. We have incorporated all of those matters that we are required to disclose together with all of our trading terms in our costs agreement. We attach an original together with a duplicate costs agreement. Would you kindly read the agreement carefully and if you are happy with the terms and conditions sign the duplicate where indicated and return it to us. Please attend to the return of the duplicate costs agreement immediately. If you have any queries would you kindly telephone Tracey Middleton or Ross Koffel.' Although the letter refers to a costs agreement, I think it could only be regarded at this stage as a draft costs agreement, given the terms of the 24 January 2000 letter and the fact that it was contemplated that it was to be signed. The document was not signed by the Respondent thus raising the assumption that he was not "happy with the terms and conditions' . Annexed to the letter is a document entitled "Costs Agreement and Fee Disclosure". It is signed by the Applicant (but not, as I said by the Respondent) and in turn annexes a document entitled "Terms of Engagement". Set out in these documents is the following statement. "Our Terms of Engagement are attached for you information. Please read them carefully. While we may assume by your continuing instructions that you have accepted our terms, please sign the acceptance below and return it to use so that we may be satisfied that you understand and accept them. Failure to return your acceptance may delay our commencement and completion of the work.' … I do not think that the Applicant can rely on the assumption '…we may assume that by your continuing instructions that you have accepted our term…' because the Costs Respondent is capable of continuing instructions in the capacity of agent. Given the circumstances that I have outlined in the previous paragraphs I have come to the conclusion that there is no costs agreement within the meaning of the Legal Professional Act 1987 on which the Applicant could rely to enforce the Respondent to pay the Applicant's costs. There is however a fee disclosure statement and I should state the fact that there is not a costs agreement within the meaning of the Legal Professional Act 1987 does not mean that there is not a contractual relationship between say, Australia Wide Management and the Costs Applicant. … In my opinion neither of the provisions contained in Section 176 of the Legal Profession Act or Part 11 of the Supreme Court Rules place any obligation on the Respondent to be personally responsible for the costs incurred by the Applicant and do not rebut the Respondent's argument that he is an agent for Australia Wide Management. As I have stated previously I do not come to the view that there is a Costs Agreement between the parties. With regard to arguments (d) through to (h) these matters arose after the formation of any agreement between the parties and do not assist to any great extent to rebut the Applicant's argument. With regard to (h) I do not see why an agent, being a person who can create a legally binding agreement between a principal and third party cannot terminate that agreement (with authority of the principal). If the Respondent's argument as to agency is applied then it can be said that there is probably a contract between Australia Wide Management as principal and the Applicant (as the third party). See generally International Harvester Co of Australia Pty Ltd v Carrigan's Hazeldene Pastoral Co (1958) 100 CLR 644 at 652 . In this situation there would be, in the ordinary course of events, no liability by the agent to the third party. The agency arrangement argument raised in (c) above by the Applicant, I think is a different kind. The intention of this arrangement is to overcome the fact that the South Australian solicitor had no right of appearance in NSW. It does not, in my opinion, impose an obligation on the Respondent to directly pay the costs of the incurred by the Applicant. In any event it is an arrangement that has been defined by the parties by the Respondent's letter of 24 January 200 and the subsequent disclosure statement. …" 9 The plaintiff submitted that this was not a factual dispute because the costs assessor erred in law by not considering the applicability of s 184(6) LPA. The defendant submitted that if there was no error of law then the decision of the costs assessor should stand. 10 Section 184 of the LPA appears in Part 11 Division 3 of the Act headed "Costs agreements". 11 The relevant portions of s 184 state: "(1) … (2) An agreement as to the costs of the provision of legal services may also be made between the barrister or solicitor providing the services and another barrister or solicitor who retained that barrister or solicitor on behalf of the client. … (6) A costs agreement may consist of a written offer that is accepted in writing or by other conduct. A disclosure n accordance with Division 2 under section 175 or 176 may constitute an offer for the purposes of this subsection." 12 The plaintiff submitted that the costs agreement was accepted by the defendant by his conduct, ie. he continued to instruct the plaintiff in this matter. It should be noted that the agreement dated 1 March 2000 (Ex A tab 1) was addressed to Mr Tony Tropeano, Barrister and Solicitor. It was not signed by Mr Tropeano. The covering letter and agreement have been quoted in the costs assessor's reasons and I will not repeat them. 13 The defendant submitted that the initial letter made it clear that Koffels accepted instructions to act for Austwide Management Services Pty Limited. The letter dated 24 January 2000 actually states "Whereby you (Koffels) have instructions to act for our client …" If the identity of the party to a contract is unclear, the costs assessor was entitled to examine the surrounding circumstances (see Gilberto v Kenny Co Ltd (1920) 28 CLR 66 at 75; Wilson v Hart (1817) 7 Taunt 295 at 304; 129 ER 188 at 122; Codelfa Constructions Pty Limited v State Rail Authority of NSW (1982) 149 CLR 337 at 352.4 and Prenn v Simmonds [1971] 1 WLR 1381 at 1383-4). However at all times up until the termination of instructions the plaintiff expected that Austwide would be responsible to pay its fees. 14 At no time did the plaintiff speak or directly communicate with a representative from Australia Wide. It was the respondent who terminated the applicant's instructions because "We are not in a position to accept instructions from our client" (Ex A tab 19). The costs assessor stated that the termination was still consistent with the Victorian solicitor being the agent. 15 It is my view that the costs assessor considered whether by conduct the defendant accepted the costs agreement. He determined that the respondent was capable of continuing instructions as an agent. Further, when the costs agreement was not signed the plaintiff did not try to rectify or clarify why it was not signed. The plaintiff sought payment of its fees from the client. Austwide not the solicitor in Adelaide. Minds may differ on the interpretation of facts and it may be that this court may come to a different view of the facts but that does not mean there has been an error of law. The costs assessor did not err in law. It is my view that the costs assessor's decision of 19 January 2001 is affirmed. 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. 16 I make the following orders: (1) The decision of the costs assessor Mr Mark Campbell dated 19 January 2001 is affirmed. (2) The summons is dismissed. (3) The plaintiff is to pay the first defendant's costs as agreed or assessed. ********** Last Modified: 03/13/2001 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.