The New South Wales Bar Association v Clarence James Stevens [2005] NSWCA 351

New South Wales Court of Appeal

CITATION: The New South Wales Bar Association v Clarence James Stevens [2005] NSWCA 351

HEARING DATE(S): On the papers

JUDGMENT DATE: 11 October 2005

JUDGMENT OF: Spigelman CJ at 1; Mason P at 22; Handley JA at 23

DECISION: Each party pay its own costs in proceedings No 13263 of 2002 and CA 41214 of 2002

CATCHWORDS: PROCEDURE - interlocutory proceedings in which costs reserved - reserved costs not dealt with in the order finally disposing of the proceedings - reserved costs orders forgotten - lengthy delay -courts discretion as to costs

LEGISLATION CITED: Legal Professions Act

British Natural Premium Provident Association v Bywater [1897] 2 Ch 531 Gardner v Marshall (1845) 14 Sim 575 CASES CITED: McLaughlin v The City Bank of Sydney (1916) 16 SR (NSW) 491 New South Wales Bar Association v Stevens (2003) 52 ATR 602; [2003] NSWCA 95 New South Wales Bar Association v Stevens (2003) 54 ATR 25; [2003] NSWCA 261

The New South Wales Bar Association PARTIES: Clarence James Stevens

FILE NUMBER(S): CA 41214 of 2002

Hicksons Lawyers (Claimant) SOLICITORS: Mr Alwyn Karpin (Opponent)

LOWER COURT JURISDICTION: Supreme Court

LOWER COURT FILE NUMBER(S): 13263 of 2002

LOWER COURT JUDICIAL OFFICER: Greg James J

- 1 - IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 41214 of 2002

SPIGELMAN CJ MASON P HANDLEY JA

Tuesday 11 October 2005 THE NEW SOUTH WALES BAR ASSOCIATION v Clarence James STEVENS Judgment 1 SPIGELMAN CJ: The Claimant seeks orders that the Opponent pay the Claimant's costs of proceedings at first instance proceedings and on appeal. 2 In proceedings No 13263 of 2002 in the Supreme Court of NSW the Opponent, as Plaintiff, sought orders quashing the decision made by the Claimant pursuant to s38FC(1)(b) and s38FD(1) of the Legal Profession Act 1987 to cancel the Opponent's Practising Certificate. The Opponent sought an interlocutory order for a stay of that decision pending the hearing of the principal proceedings. Greg James J made the order granting a stay pursuant to s38B of the Legal Profession Act. His Honour reserved costs. 3 On 24 April 2003 this Court in proceedings CA 41214 of 2002 allowed the appeal and set aside the order made by Greg James J. The Court also reserved costs (New South Wales Bar Association v Stevens (2003) 52 ATR 602 ; [2003] NSWCA 95). 4 The Notice of Motion before the Court is issued in proceedings CA 41214 of 2002. It seeks an order that the Opponent pay the Claimant's costs of the Court of Appeal proceedings and of the Supreme Court proceedings No 13263 of 2002 "including the costs of the hearing before his Honour Justice James". 5 On 18 September 2003 this Court made orders in separate proceedings including an order that the name of the Opponent be removed from the Roll of Legal Practitioners (New South Wales Bar Association v Stevens (2003) 54 ATR 25; [2003] NSWCA 261). (The "Strike Off proceedings".) The orders were made by consent. The orders included an order that the Opponent pay the costs of those proceedings. The matter now before the Court relates to the prior Practising Certificate proceedings. 6 On 19 September, the day after orders were made by consent in the Strike Off proceedings, the following consent orders were made and entered in Supreme Court proceedings No 13263 of 2002: "1 Summons be dismissed. 2 The Plaintiff pay the costs of the New South Wales Bar Association." 7 This Court's orders allowing the appeal in CA 41244 of 2002 were made on 24 April 2003. The Claimant took no further steps with respect to the orders reserving costs before Greg James J and in this Court until a letter dated 26 February 2004 was sent to the firm of solicitors Beazley Singleton. That was the firm of solicitors which represented the Opponent in the Strike Off Proceedings. A different firm represented the Opponent in the Practising Certificate proceedings. 8 In its letter of 26 February 2004, the Claimant's solicitor asked whether the solicitors would agree that the order for costs in proceedings No 13263 of 2002 included costs in the interlocutory proceedings before Greg James J and in this Court. In the alternative, it sought the Opponent's consent to orders for costs being made in the Practising Certificate proceedings both before Greg James J and in this Court. The letter concluded with a statement that, if no consent was forthcoming, the Claimant would make an application to the Court for such an order. 9 No response was ever received to the letter addressed to Messrs Beazley Singleton. However, in circumstances not identified in the material before the Court, a solicitor acting on behalf of the Claimant had a conversation on 30 March 2005 with a Mr Alwyn Karpin who, according to an affidavit filed in these proceedings, said that he had been retained by the Opponent to act in respect of costs issues. I should note that the material before the Court discloses that a process is underway before a Costs Assessor. 10 By letter of 12 April 2005 solicitors for the Claimant wrote to Mr Karpin seeking the Opponent's consent to costs orders stating that if there was no response within seven days the Claimant would move the Court for such an order. In a further letter of 27 April 2005 the Claimant's solicitor wrote noting that there had been no response and stating that application to the Court would be made if there was no response by 9 May 2005. There was no response. These two deadlines had long passed. The Notice of Motion seeking such orders was not filed in this Court until 3 August 2005. 11 The Claimant's submissions in this Court on the Notice of Motion are candid. They state: "It was by oversight that the reserved costs orders were not dealt with. With the lapse of time, they had been forgotten." 12 There are two quite distinct issues of construction. 13 In my opinion, as a matter of construction the consent order which was ordered and entered on 19 September 2003 in proceedings No 13263 of 2002 does not encompass the costs of the proceedings before Greg James J. 14 The position where the costs of interlocutory proceedings have been expressly reserved and were then not dealt with in the order finally disposing of the proceedings was considered in Gardner v Marshall (1845) 14 Sim 575. The Court held that reserved costs of interlocutory proceedings must be dealt with by a special order and were not included in the costs of the suit. This was confirmed in England 1897 in British Natural Premium Provident Association v Bywater [1897] 2 Ch 531, 532 where Byrne J said: "The Judges of the Chancery Division have, for the guidance of the registrars and taxing masters, given the following directions in reference to the costs of interlocutory applications … Where interlocutory applications have been disposed of, but the costs have been reserved, such costs are not to be mentioned in the judgment or order, or allowed on taxation, without the special direction of the Judge." 15 In McLaughlin v The City Bank of Sydney (1916) 16 SR (NSW) 491, 494 Street J said: "I think that the true rule in such cases is that the costs of an interlocutory application, which have been reserved, cannot be recovered by either party under an order for the taxation and payment of his costs of suit without a special direction of the Judge." 16 The relevant rule is SCR Pt 52A r 16 which provides: "Subject to this Part the costs of any application or other step in any proceedings shall, unless the Court otherwise orders, be paid and otherwise dealt with in accordance with the provisions of this Part or the provisions of any order relating to the general costs of the proceedings." 17 In my opinion the order reserving the costs of interlocutory proceeding is an "otherwise order" for the purposes of this rule. In my opinion, therefore, the order which finally disposed of the proceedings in the Common Law Division did not entitle the Bar Association to recover its assessed costs of the interlocutory proceedings. The matter is therefore in the discretion of the Court. 18 Furthermore, the costs reserved in CA 41214 of 2002 were also not covered. The Court of Appeal is not a separate court. It is a division of the Supreme Court. Nevertheless, a consent order filed in the proceedings entituled with the first instance proceedings number and which refers generally to the costs of a party, encompasses the costs incurred by that party in the matter so entituled. 19 The next issue is how this Court should now exercise the Court's discretion with respect to costs. The Practising Certificate proceedings and the Strike Off proceedings were disposed of at the same time. The Court made orders in the latter by consent on 18 September 2003. The consent orders in the former were made and entered on 19 September 2003. A period of almost two years elapsed between that date and the time of the filing of the Notice of Motion presently before the Court. 20 No satisfactory explanation has been given for this delay or, indeed, for the failure to incorporate the resolution of the reserved costs in the consent orders made in the first instance proceedings. Matters of this character should not be permitted to drag on for as long as this. 21 In the exercise of the discretion of the Court, the costs reserved in proceedings both No 13263 of 2002 and CA 41214 of 2002 should be disposed of by an order that each party pay its own costs in the proceedings, including the costs of the Notice of Motion presently before the Court. 22 MASON P: I agree with Spigelman CJ. 23 HANDLEY JA: I agree with the Chief Justice. **********