New South Wales Supreme Court CITATION : Dunn v McCarthy QC [2007] NSWSC 1336 HEARING DATE(S) : 14 November 2007 JUDGMENT DATE : 23 November 2007 JURISDICTION : Common Law Division - Administration Law List JUDGMENT OF : Associate Justice Harrison DECISION : (1) Leave to grant an extension of time to lodge the appeal is refused; (2) The appeal is dismissed; (3) Leave to appeal is refused; (4) The summons filed 24 July 2007 is dismissed; (5) The plaintiff is to pay the defendant's costs as agreed or assessed. CATCHWORDS : Leave to appeal - appeal decision of Costs Assessor LEGISLATION CITED : Legal Profession Act 2004 (NSW) - ss 328, 350, 361, 367, 384, 385 Jackamarra v Krakouer (1998) 153 ALR 276; (1998) 195 CLR 516 CASES CITED : Larsen v Vile [1999] NSWCA 397 Motor Trade Finances Prestige Leasing Pty Ltd v Eldersie Finance Group Corporation Ltd & Ors [2006] NSWSC 1348 PARTIES : Craig Dunn - Plaintiff John McCarthy QC - Defendant FILE NUMBER(S) : SC 30074/2007 COUNSEL : Mr J M Miller - Plaintiff Mr A R Davis - Defendant SOLICITORS : Noble Lawyers - Plaintiff M J Lawyers - Defendant LOWER COURT JURISDICTION : Costs Assessor LOWER COURT FILE NUMBER(S) : 00002701/06 LOWER COURT JUDICIAL OFFICER : Mr G A Salier AM LOWER COURT DATE OF DECISION : 20 June 2007 - 10 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ADMINISTRATIVE LAW LIST ASSOCIATE JUSTICE HARRISON FRIDAY, 23 NOVEMBER 2007 30074/2007 - CRAIG DUNN v JOHN McCARTHY QC JUDGMENT (Leave to appeal; appeal decision of Costs Assessor) 1 HER HONOUR: By summons filed 24 July 2007, the plaintiff firstly, seeks leave to appeal the determination of costs, dated 20 June 2007, in costs assessment number 00002701/06, pursuant to s 384 of the Legal Profession Act 2004 (NSW) (LPA); and secondly, an order setting aside the Certificate of Determination of Costs dated 20 June 2007, or in the alternative, a declaration that the costs payable by the application in costs assessment number 00002701/06 is assessed at 'nil'. 2 The plaintiff is Craig Dunn. The defendant is John McCarthy QC. Mr Dunn was a shareholder and director of Motor Trade Finances Prestige Leasing Pty Limited. Mr McCarthy QC was briefed to appear at trial in proceedings 50065/2005 between Motor Trade Finances Prestige Leasing Pty Ltd (Prestige Leasing) v Eldersie Finance Group Corporation Ltd & Ors. Those proceedings were heard by White J in this Court between 14 November 2005 and 23 November 2005. On 8 December 2006, White J delivered judgment in Motor Trade Finances Prestige Leasing Pty Ltd v Eldersie Finance Group Corporation Ltd & Ors [2006] NSWSC 1348. Extension of time to lodge the appeal 3 The defendant submitted that the appeal was filed out of time and no leave has been sought, or granted to the late filing of such an application. The defendant does not consent, given the late filing of the application. No evidence has been provided justifying an extension. Accordingly, the defendant submitted that these proceedings are defective. 4 The appeal was filed 24 July 2007. Time for filing the summons expired on 18 July 2007, 28 days from the date of the costs determination on 20 June 2007. The appeal and application for leave to appeal is about six days out of time. 5 Although the time limits prescribed by the Rules may be extended, a case for such extension must be made. An extension of the time provided for appealing or seeking leave to appeal is not to be had merely for the asking. The decision to grant or refuse such an extension involves the exercise of discretion. The fact of delay is a relevant consideration in this regard. Time limits for appeal are fixed for good reasons. 6 It is for the party seeking the extension to persuade the Court that it is in the interests of justice that it should be granted. Such persuasion will usually depend upon the provision of an acceptable or satisfactory explanation as to why the time limits were not complied with – see Jackamarra v Krakouer (1998) 153 ALR 276 at 294; (1998) 195 CLR 516 at 540. 7 No explanation has been given for the delay, albeit a minor one. The requirement for the plaintiff to seek an extension of time and the defendant's opposition to such an order was set out in the defendant's submissions filed on 8 November 2007. This has not been addressed by the plaintiff. In these circumstances and without any explanation, it is my view that an extension of time ought not be granted. Had I been minded to grant the appeal, or alternatively, granted leave to appeal, the Court would have relisted this matter to give the plaintiff the opportunity to explain the delay. Grounds of appeal 8 The grounds of appeal are firstly, that the costs assessor erred in law by failing to determine, pursuant to s 328(8) of the LPA 2004, whether a costs agreement was in place between the plaintiff and defendant; secondly, the costs assessor erred in law by purporting to assess costs without first determining, pursuant to s 328(8), whether a costs agreement was in place between the plaintiff and defendant; thirdly, the costs assessor erred in law in purporting to assess costs payable by the plaintiff, pursuant to s 361 of the LPA 2004, without first determining the identity of the parties to the purported costs agreement issued by the defendant; fourthly, the costs assessor erred in law in failing to find that Motor Trade Finances Prestige Leasing Pty Ltd was the client referred to in the purported costs agreement; and fifthly, the costs assessor erred in law in failing to find that the costs assessable under the purported costs agreement should be assessed at 'nil'. The relevant statutory provisions for an appeal 9 Section 384 of the LPA 2004 reads: "Appeal against decision of costs assessor as to matter of law (1) A party to an application for a costs assessment 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." 10 And s 385 reads: "Appeal against decision of costs assessor by leave (1) A party to an application for a costs assessment relating to a bill 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 for a costs assessment 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." 11 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 384 is confined to law. An appeal under s 385 (provided leave is granted) is a complete new hearing (at para 31). 12 The issue in these proceedings is whether the Costs Assessor was obliged to consider and give reasons as to the true identity of the client. There was one written costs agreement between Mr McCarthy QC and the client dated 4 November 2005. The relevant duties of a Costs Assessor under the LPA 13 Section 328(8) of the Act provides that the Costs Assessor may determine whether or not a costs agreement exists. It was not disputed that a costs agreement existed. 14 Division 11 of the Act deals with costs assessments. Subdivision 1 of Division 11 is headed "Applications" and is made up of ss 349A to 356A. Section 349A defines "client". "Client" means a person to whom or for whom legal services are or have been provided. But is it not just a client who can apply for a costs assessment to be carried out. 15 Section 350(1) and (2) read: "Application by client or third party payers for costs assessment (1) A client may apply to the Manager, Costs Assessment for an assessment of the whole or any part of legal costs. (2) A third party payer may apply to a costs assessor for an assessment of the whole or any part of legal costs payable by the third party payer." 16 Mr Dunn was entitled to make an application for a costs assessment if he was either the client or a third party payer. 17 The "application by the client for assessment of costs" (Aff, Craig Dunn, 8/8/2007 - T 7) names "Craig Dunn" as applicant. He then says "I wish to object to listed bills of costs given to me by my legal practitioner. I apply to have this matter referred to a costs assessor." Further down the application form Mr Dunn stated, "There is a costs agreement between myself and my legal practitioner". He signed the application. When the application was lodged it was clear that Mr Dunn considered himself to be the client and the applicant and he considered that the costs agreement was between himself and Mr McCarthy QC. 18 Section 361 of the Act reads: "Assessment of costs by reference to costs agreement (1) A costs assessor must assess the amount of any disputed costs that are subject to a costs agreement by reference to the provisions of the costs agreement if: (a) a relevant provision of the costs agreement specifies the amount, or a rate or other means for calculating the amount, of the costs, and (b) the agreement has not been set aside under section 328 (Setting aside costs agreements), unless the assessor is satisfied: (c) that the agreement does not comply in a material respect with any applicable disclosure requirements of Division 3 (Costs disclosure), or (d) that Division 5 (Costs agreements) precludes the law practice concerned from recovering the amount of the costs, or (e) that the parties otherwise agree. (2) The costs assessor is not required to initiate an examination of the matters referred to in subsection (1) (c) and (d)." 19 On 23 January 2007 the Costs Assessor wrote to the parties seeking pursuant to s 359 of the Act submissions inter alia as to the identity of the costs applicant and the effect of s 350(4) and s 350(5) of the Act with respect to the application for assessment (these sections have been reproduced earlier in this judgment). On 12 February 2007, Mr McCarthy QC replied that the costs applicant was a director of the plaintiff company, Motor Traders Finance Prestige Leasing Pty Limited and stated that he had dealings with Craig Dunn at times during 2006 regarding his (Dunn's) arrangements to pay his fees. 20 On 30 May 2007, in a document headed "Submissions and Objections to Items Set Forth in the Bill of Costs" there was a change of approach in the applicant's camp. The applicant was now described as "Motor Trade Finances Prestige Leasing Pty Ltd". The "applicant" then submitted that the costs agreement dated 4 November 2005 was between John McCarthy QC and itself and that invoices for service pursuant to that agreement were issued by Mr McCarthy QC to Motor Trade Finances Prestige Leasing. The "applicant" did not submit that because the wrong applicant commenced the proceedings the Costs Assessor was obliged to identify the parties to the costs agreement and if it [the applicant] was not Prestige Leasing the costs should be assessed at nil. Mr Dunn on appeal has raised this submission which is somewhat different from what was raised in the costs assessment. 21 Even if Mr Dunn was not the client he would be entitled to have the bill of costs assessed on the basis he was the third party payer. The Costs Assessor's reasons 22 In his reasons, the Costs Assessor stated "Notwithstanding statements by the solicitor for the Cost Applicant that the Cost Applicant was Motor Trade Finances Prestige Leasing Pty Ltd, there can be no doubt that the Costs Applicant is Craig Dunn. The application for assessment was brought in the name of Craig Dunn. An Assessor has no power to amend an application for assessment." 23 Division 11 subdivision 4 of the Act is headed "Determinations" and is made up of ss 367 to 372. Section 367 reads: "Determinations of costs assessments (1) A costs assessor is to determine an application for a costs assessment relating to a bill by confirming the bill or, if the assessor is satisfied that the disputed costs are unfair or unreasonable, by substituting for the amount of the costs an amount that, in the assessor's opinion, is a fair and reasonable amount. (2) The costs assessor may include an allowance for any fee paid or payable for the application by the applicant. (3) A costs assessor may not determine that any part of a bill that is not the subject of an application is unfair or unreasonable. (4) A costs assessor may determine that the amount of fair and reasonable costs is the amount agreed to by the parties if during the course of the assessment the parties notify the costs assessor that they have agreed on the amount of those costs." 24 The Costs Assessor in his reasons addressed the issues raised by the costs applicant and considered whether the bill of costs and various items in the bill were fair and reasonable. The Costs Assessor discharged his statutory function. 25 On 20 June 2007, Mr G A Salier AM issued a Certificate of Determination of Costs, between Craig Dunn as the costs applicant and John McCarthy QC as costs respondent, by confirming for the disputed costs, as a fair and reasonable amount of costs to be paid to the costs respondent, the sum of $103,400 plus interest (Aff, Craig Dunn, 8/8/2007 - T 9). In other words, the Costs Assessor did not reduce the bill of costs. 26 It is my view that the Costs Assessor did what was required of him under s 367 of the Act. He was entitled to proceed with the application. The Costs Assessor did not have power to amend the name of the applicant. Mr Dunn could have discontinued his application and a fresh application could have been lodged by Prestige Leasing for determination. That did not happen. There was no error of law. 27 In relation to the claim for leave under s 385 of the Act and if the issue of the identity of the client was properly raised and if it was a matter to be properly determined by a Costs Assessor, the preponderance of evidence establishes that Mr Dunn was the client and the third party payer of the legal costs. In these circumstances leave ought not to be granted. 28 The appeal is dismissed. Leave to appeal is refused. The summons filed 24 July 2007 is dismissed. 29 Costs are discretionary. Costs normally follow the event. The plaintiff is to pay the defendant's costs as agreed or assessed. The Court orders: (1) Leave to grant an extension of time to lodge the appeal is refused. (2) The appeal is dismissed. (3) Leave to appeal is refused. (4) The summons filed 24 July 2007 is dismissed. (5) The plaintiff is to pay the defendant's costs as agreed or assessed. ********** 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.