New South Wales Supreme Court CITATION : Muriniti v Lyons [2003] NSWSC 79 HEARING DATE(S) : 11 February 2003 JUDGMENT DATE : 25 February 2003 JURISDICTION: Common Law JUDGMENT OF : Master Harrison DECISION : (1) Leave to grant an extension of time for the plaintiff to sek leave to appeal and/or appeal is refused; (2) The plaintiff is to pay the defendant's costs as agreed or assessed CATCHWORDS : Extension of time to appeal decision of costs assessor LEGISLATION CITED : Legal Profession Act ss 208M & L Donnelly & Anor v Ross Mining NL [1999] NSWSC 960, Sully J Chapmans Ltd v Yandell [1999] NSWCA 361 CASES CITED : Coulter v The Queen (1988) 164 CLR 350 CDJ v VAJ (1998) 197 CLR 172 Baker v Kearney [2002] NSWSC 746, Master Malpass Leonardo Carlo Muriniti (Plaintiff) PARTIES : Janice Lyons (Defendant) FILE NUMBER(S) : SC 20210/2001 Mr C J Stevens QC with Mr A Porthouse COUNSEL : (Plaintiff) Ms E Cohen (Defendant) L C Muriniti SOLICITORS : (Plaintiff) LOWER COURT Costs Assessor JURISDICTION : LOWER COURT N/A FILE NUMBER(S) : LOWER COURT Peter J McNally JUDICIAL OFFICER : - 8 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION MASTER HARRISON TUESDAY, 25 FEBRUARY 2003 20210/2001 - LEONARDO CARLO MURINITI v JANICE LYONS JUDGMENT (Extension of time to appeal decision of costs assessor) 1 MASTER: These proceedings have been unnecessarily protracted and complicated. There are two sets of proceedings, namely suit 10315/2003 and these proceedings. In these proceedings there are three outstanding notices of motion. However, at this hearing it was agreed between the parties that there is only one short issue to be determined namely, should the plaintiff be granted an extension of time within which to seek either leave to appeal under s 208M or to appeal under s 208L of the Legal Profession Act (the Act). 2 The plaintiff is a practising solicitor. The defendant's husband Robert Lyons was a barrister who died in May 1995. The defendant is the widow of Robert Lyons. On 7 November 2000, the defendant obtained a certificate as to determination of costs in the Supreme Court in proceedings No. 91106 of 1999 in the sum of $24,550 (the first certificate). On 21 November 2000, the defendant obtained an amended certificate as to determination of costs in the sum of $24,855.10 (amended certificate). The defendant registered the first certificate in the local court, as a judgment in proceedings No. 12391 of 2000, and judgment was entered against the plaintiff in the sum of $25,605 on 10 November 2000 (the first judgment). 3 On 25 January 2001, proceedings in relation to the first judgment were stayed by consent in the local court. The stay of those local court proceedings remains in effect pending the determination of all matters in issue between the Judgment Creditor and the Judgment Debtor in the Supreme Court of New South Wales. 4 On 27 March 2001, the plaintiff filed a statement of claim in these proceedings the contents of which are very difficult if impossible to distil. Fortunately, the plaintiff's pleadings were refined and on 24 May 2002 he filed an amended statement of claim (ASC). In the ASC, the plaintiff alleges that the actions taken by the defendant firstly, in obtaining the first and amended certificate; secondly, in registering those certificates so as to obtain each of the first and second judgments in the local court; and thirdly, in obtaining and enforcing a garnishee order, constitute an abuse of process. The plaintiff claims that the certificates, the judgments and the garnishee order were obtained for the collateral purpose of proving conclusively the indebtedness of the plaintiff to the defendant and enforcing judgment, in circumstances where the defendant knew the certificates represented no such thing, and in circumstances were the defendant knew there was a genuine dispute as to the liability of the plaintiff to pay the "Mather" fee which at the time of the registration of the certificates had not been the subject of any judicial determination. Extension of time to appeal 5 In Donnelly & Anor v Ross Mining NL [1999] NSWSC 960, Sully J, at para 33, held that the time within which an application for leave to appeal under s 208M of the Act is to be filed is 14 days. 6 The costs assessor issued a determination on 21 November 2000, at the latest. An application for leave to appeal under s 208M of the Act should have been filed by 6 December 2000. The application for an extension of time was filed on 25 September 2002. Thus, the application was filed almost two years out of time. 7 In Chapmans Ltd v Yandell [1999] NSWCA 361, Fitzgerald JA (with whom Mason P and Davies AJA agreed) stated, at para 11, 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 cannot be brought with the attendant demands which they place upon the resources of the court and the burden which they place upon other parties and the delays which they cause to other litigants. - see Coulter v The Queen (1988) 164 CLR 350 at 359. In Chapmans, Fitzgerald JA also stated, at 12, 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 Master when considering whether to grant leave to appeal obviously has a very wide discretion - see CDJ v VAJ (1998) 197 CLR 172 (per McHugh, Gummow and Callinan JJ at 190-224). Other discretionary factors to be taken into account are whether the plaintiff has a real case to advance and the prejudice that will be suffered by the defendant is such an order is granted. The plaintiff submitted that the cost assessor erred when he failed to determine whether the pre-conditions of the Mather agreement had been met because if they were not the debt would not become due and owing. 8 At paragraph 3 in the costs assessor's letter dated 16 August 1999 to the plaintiff, he stated: "3. As regards the claim of $24,550.00 you and the clients assert the late Robert Lyons agreed to provide the legal services and payment of his fees was subject to three conditions. In a letter dated the 28th June, 1996 written to Mrs. J. Lyons, you stated inter alia: "I took the matter to Robert and both he and I agreed to take our chances because of the highly meritorious nature of the case. Robert expressly agreed to accept the brief on the following terms: (i) We would be paid if the clients succeeded and, (ii) The clients managed to sell their lock patent. (iii) If condition (i) and (ii) did not eventuate we would have to write off our fees."" 9 From this letter, the costs assessor was aware of the conditions precedent that had to be fulfilled. The costs assessor then quoted from the plaintiff's statutory declaration dated 27 July 1999 where the plaintiff stated that the proceedings were completed successfully, so one of the pre-conditions had been satisfied. That meant that there was one condition to be fulfilled, namely the sale of the lock patent. The costs assessor noted that this condition was unlimited as to time. There was conflicting evidence before the costs assessor as to whether the sale of the lock patent had been effected. The defendant in her letter dated 23 February 1998, (which was before the costs assessor), stated that the sale of the patent had been effected. The plaintiff asserted that the sale had not been effected. In cross-examination at the hearing before this court, the plaintiff admitted that there was no written document, which sets out the conditions upon which the defendant's husband accepted the retainer. As there is a conflict between the parties, if leave was granted they would each need to produce evidence as to whether the sale of the lock patent had been effected. 10 Relevantly, in his reasons for determination dated 7 November 2000 the costs assessor referred to the conditions precedent issue and stated: " The third of the submissions related to the alleged conditions to which the brief to Mr Lyons was subject I consider the role of a costs assessor is to assess the bills of costs assigned to him and to determine a fair and reasonable amount for costs or fees to be paid to a practitioner. When the costs the subject of the determination are payable is not a matter for a costs assessor to determine." 11 However, subsequent to the costs assessor's decision in Baker v Kearney [2002] NSWSC 746, Master Malpass stated, at para 14, that he had not been referred to any authority as to whether or not an assessment should proceed in cases where there is no liability to pay the costs. Master Malpass continued: "However, for a number of reasons, it seems to me that a Costs Assessor should not proceed with an assessment of costs where there is no liability to pay those costs. As a practical matter, it could be expected that any such assessment would be an exercise in futility throwing away costs. There are provisions in the Act which support the view that a task of the Costs Assessor is to quantify the costs payable under a bill or an order. A determination of an amount payable may place the applicant in a position to file the certificate pursuant to s 208J (3). It is then taken to be a judgment of the court in which it is filed. The applicant is then at liberty to take enforcement action. I do not consider that the legislature intended that such a result should follow in a case where there is no liability to pay the costs." 12 From the decision of Master Malpass, it is my view the plaintiff has an arguable case that the costs assessor should not have proceeded with the assessment. Unless he was satisfied that the pre-conditions had been satisfied. Otherwise the liability to pay costs had not arisen. It is arguable that the costs assessor erred in law. 13 However, it is difficult to accept the plaintiff's explanation for delay, namely that he did not know the correct procedure to follow to challenge the costs assessor's decision. Prior to the costs assessor making a determination the plaintiff attempted to have him (Mr McNally, the costs assessor) restrained. 14 On 1 September 1999, the plaintiff issued a summons in proceedings Muriniti v Lyons and McNally and Ruggero No 12152/1999. The plaintiff sought to restrain the costs assessor from continuing with assessment. He joined the defendant, the costs assessor and Ms Ruggero, a member of the Supreme Court staff as defendants in these proceedings. 15 Davies AJ dismissed the summons in proceedings No.12152/1999 and ordered that the plaintiff pay the defendants' costs. In his judgment (paras 12 and 13) his Honour said that it was a matter for the costs assessor to find whether there had been oral agreements as pleaded in the plaintiff's statement of claim in these proceedings. His Honour held that the summons before the court were misconceived. Davies AJ pointed that that it was not the function of the court, at that stage, to hear witnesses, find facts and assess costs. The legislature had established processes for the assessment of costs. 16 At paragraph 13, Davies AJ stated: "Counsel for the plaintiff submitted that the subject process of assessment of costs was futile and an abuse of process. But whether the plaintiff's contentions, as to the oral agreement and as to the agreement to undertake pro bono work, are successful and whether reg 78(1) applies to all the services provided by Mr Lyons, are not matters to be determined at this stage by this Court. They are matters to be determined in the first instance by the costs assessor to whom the matter has been referred. Once the costs assessor has brought down his determination, any party dissatisfied with it may appeal to the Court on a point of law in accordance with s 208L of the Act or on the merits by leave in accordance with s 208M of the Act. The Act has laid down this procedure for the assessment of costs. The Court should not shortcut the procedure at the whim of a solicitor who wishes to dispense with the statutory process." 17 Still prior to the costs assessor making his determination, on 12 October 2000, the plaintiff wrote to him (the costs assessor) wherein he (the plaintiff) specifically referred to his appeal rights. The plaintiff, perhaps unwisely, stated: "We note your observation that we are asserting that you should not proceed with the application, the writer advises that it is not cavilling with His Honour's finding. However we respectfully submit that His Honour has not ruled that you would be right in dealing with the matter but only that you should be allowed to deal with the matter and that following your determination the issues arising from you determination could then be the subject of an appeal under Section 208L of the Legal Profession Act. In the circumstances we respectfully submit that we should be given the opportunity to make such submissions to you as we consider appropriate. Whether or not you choose to give consideration to those submissions is, with respect, a matter for yourself. Nevertheless we should be given the opportunity to make our submission to you. Whether you are then correct in respect of any decision which you make concerning our submissions or in choosing not to give any consideration to our submissions, (if that is your choice) may be a matter to be decided on appeal." [emphasis added by the plaintiff] 18 The plaintiff filed an appeal against the decision of Davies AJ but later withdrew it. In view of the judgment of Davies AJ and the plaintiff's own legal advice to the costs assessor about his appeal rights, it is difficult to accept that the plaintiff was not aware that in order to challenge the costs assessor's decision he should seek leave to appeal under s 208M or appeal under s 208L of the Act. The plaintiff did attempt to file an application for review but it was rejected. It was after the defendant sought to enforce the judgment for costs in the local court that the plaintiff was moved to file the original misconceived statement of claim, rather than follow his own unsolicited advice given to the costs assessor, and the appeal to this court. The plaintiff's convoluted explanations for delay contained in his affidavits are most unconvincing. If the plaintiff was to be granted an extension of time, the defendant would be put to the expense of trying to prove that a former client of her deceased husband had effected the sale of a lock patent after many years have elapsed. 19 In the exercise of my discretion, justice is best served if the application for an extension of time to seek leave to appeal and/or appeal is refused. Costs follow the event. The plaintiff is to pay the defendant's costs as agreed or assessed. 20 The court orders: (1) Leave to grant an extension of time for the plaintiff to seek leave to appeal and/or appeal is refused. (2) The plaintiff is to pay the defendant's costs as agreed or assessed. ********** Last Modified: 02/27/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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