New South Wales Supreme Court CITATION : Lawrence v Ramensky Lawyers & Ors [2006] NSWSC 175 HEARING DATE(S) : 15 March 2006 JUDGMENT DATE : 24 March 2006 JURISDICTION : Common Law Division JUDGMENT OF : Associate Justice Harrison DECISION : (1) The appeal is dismissed; (2) Leave to appeal is refused; (3) The costs assessor's decision of 11 November 2004 is affirmed; (4) The amended summons is dismissed; (5) The plaintiff is to pay the defendants' cost as agreed or assessed. CATCHWORDS : Review decision of Costs Assessor and Review Panel LEGISLATION CITED : Legal Profession Act 1987 - s 208L & M Chapmans Ltd v Yandell [1999] NSWSC 361 Coulter v Regina (1987) 164 CLR 350 CASES CITED : Kioa v West (1985) 159 CLR 550 Re Minister for Immigration & Multicultural Affairs; ex parte Lam (2003) 214 CLR 1 S H Lock & Co (Australasia) Limited v Rudders Ltd (1932) 49 WN(NSW) 65 Wentworth v Wentworth (NSWCA unreported 21 February 1996, 40374/95) Wayne Lawrence (Plaintiff) Gisela Ramensky (First Defendant) PARTIES : Carol Marjorie Hatzantonis (Second Defendant) Roma Rachel Lawrence (Third Defendant) FILE NUMBER(S) : SC 15744/2005 COUNSEL : Mr S A Benson (Defendants) Wayne Lawrence (Plaintiff in person) SOLICITORS : Ramensky Lawyers (Defendants) LOWER COURT JURISDICTION : Costs Assessor LOWER COURT FILE NUMBER(S) : 90162/2005 LOWER COURT JUDICIAL OFFICER : Mr G A Salier IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ASSOCIATE JUSTICE HARRISON FRIDAY, 24 MARCH 2006 15744/2005 - WAYNE LAWRENCE v RAMENSKY LAWYERS & ORS JUDGMENT (Review decision of Costs Assessor and Review Panel) 1 HER HONOUR: By amended summons filed 14 February 2006 the plaintiff seeks orders firstly, that the determination of costs assessor G.A. Salier and the cost of the assessment in proceedings be set aside; secondly, that the decision of the Review Panel be set aside; thirdly, that the Review Panel's determination be adjusted and the cost of review be paid by the respondents. The plaintiff relied on his three affidavits namely those sworn 7 December 2005, 1 February 2006 and 14 February 2006. The defendants relied upon the affidavit of Gisela Ramensky sworn 14 March 2006. The first defendant is Gisela Ramensky. The first defendant is the second and third defendants' solicitor. The second defendant is Carol Marjorie Hatzantonis. The third defendant is Roma Rachel Lawrence. 2 The plaintiff appeared at this hearing unrepresented. In oral submissions the plaintiff's grounds of appeal became somewhat clearer. The grounds of appeal are set out in detail in his amended summons. I refer to that document but will not reproduce it here as it is too lengthy. The alleged error of law is that both the costs assessor and Review Panel wrongly interpreted the costs order made by Bryson J on 29 November 2004. Background 3 Wayne Lawrence (Lawrence) is one of four children of the late James Cushlar Lawrence, of Willoughby, who died on 20 May 1992 (the deceased). The defendants Coral Hatzantonis and Roma Raquel Lawrence (Hatzantonis), were the plaintiffs in proceedings 1898/2003 against Lawrence and are the only surviving daughters of the deceased. Margot Lawrence, another daughter of the deceased, died in about 1987. Margot's three children, Alison Brenda Cox, Julie Ann Cox and Stuart James Cox (the Cox plaintiffs) were the plaintiffs in proceedings 3324/2003 against Lawrence. The construction suit 4 On 29 September 2003, 7 October 2003 and 16 October 2003 Bryson J heard the two sets of proceedings brought by the defendants to this appeal and the Cox plaintiffs together, and gave a judgment in both matters in relation to the construction of the deceased's will (the Construction Suit). The administration suit 5 In the administration suit, Hatzantonis sought an order that Lawrence perform his duty under the terms of the deceased's will, namely to realise the assets of the deceased's estate and to distribute those assets to the beneficiaries in accordance with the terms of the will. The administration suit was commenced in about April 2003. 6 The principle asset of the deceased's estate was a house at Crabbes Avenue, Willoughby. On 27 May 2003 Hatzantonis obtained an order from Bryson J that Lawrence sell the Willoughby property. Lawrence eventually placed the property on the market and settlement of the sale of that property occurred on 25 September 2003. As Lawrence failed to distribute the proceeds of sale to the beneficiaries, there were various subsequent proceedings before Bryson J to determine what constituted the balance of the estate for distribution. The costs orders 7 On 29 November 2004 Bryson J made the following costs orders: 3. Order that the defendant Wayne James Lawrence pay to Coral Marjorie Hatzantonis and Roma Rachel Lawrence seventy five percent of their costs of the proceedings on 25 February 2004. 4. Order that the defendant Wayne James Lawrence pay to Coral Marjorie Hatzantonis and Roma Rachael Lawrence their costs of the proceedings on 18 May 2004, 11 June 2004, 2 July 2004 and 29 November 2004. 5. Order that the defendant Wayne James Lawrence pay to Allison Brenda Cox, Julie Ann Cox and Stuart James Cox fifty percent of their costs of the proceedings on 25 February 2004, 2 July 2004 and 29 November 2004. 6. Direct that Wayne James Lawrence is not to be indemnified out of the estate of the late James Cushlar Lawrence for the costs ordered to be paid by orders 3, 4 and 5 of these orders. 8 I should add that Bryson J ordered Lawrence not to be indemnified from the estate because each stage had been a combative process. Bryson J observed that the documents Lawrence brought forward were unduly difficult to understand and unduly open to objection and debate. As Bryson J stated, this is not the way almost all estate business, particularly amongst closely related persons, should resolved and is resolved. The appeal 9 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 and Chapmans Ltd v Yandell [1999] NSWCA 361. An appeal under s 208L of the Legal Profession Act 1987 (the Act) is confined to law. 10 On 24 May 2005 the costs assessor issued a certificate of determination of costs. It assessed as fair and reasonable costs to be paid by the applicant at $45,197.24. On 11 November 2005 the Costs Review Panel reduced costs and disbursements from $45,197.24 to $41,219.67. 11 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." Procedural fairness 12 Lawrence submitted that as the bill of costs was not in proper form, neither the costs assessor nor the Review Panel were able to conduct a proper assessment of the costs. In my view the bill of costs was sufficiently detailed for the assessor and the Panel to carry out their tasks. Lawrence also submitted that he was denied procedural fairness. 13 Lawrence submitted that the "Costs Assessment Act" does not provide or protect public in the same manner of the recovery of moneys from service provisions in the professional business and the Act breaches the Constitution of Australia. 14 According to Lawrence, the current legislation has not been drafted in accordance with natural justice. Rather, Lawrence says, it has been drafted to bypass the court system and tribunals that all other professions in New South Wales are required to use. Further, according to Lawrence, the appeal court needs to ensure that assessment of costs is not being used as a denial of natural justice and the court needs to define what is fair and reasonable. Lawrence is of the opinion that the current situation is that a costs assessor not being a judicial officer is determining law without evidence and the rules of the court thus making it impossible to appeal on an error of law. 15 In Kioa v West (1985) 159 CLR 550 the High Court held that the duty to accord natural justice is a duty to act fairly. In the normal course, a party to judicial proceedings (as are those in a tribunal) could expect to be apprised of the nature of the case sought to be made against it, and of the date and time fixed for hearing so as to give it a reasonable opportunity to meet that case and to advance its own. 16 In relation to procedural fairness, Mason J stated in Kioa at 584-585 that the law had now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention. Procedural fairness is a notion of a flexible obligation to adopt fair procedures, which are appropriate and adapted to the circumstances of the particular case. Whether there is a denial of procedural fairness depends on the circumstances in each case. 17 In Re Minister for Immigration & Multicultural Affairs; ex parte Lam (2003) 214 CLR 1 the High Court discussed the manner in which procedural fairness cases are approached by the courts, and Gleeson CJ said (at 14, [37]): "Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice." 18 It is necessary to examine the relevant statutory provisions of the Act. 19 Section 208(1) and (2) of the Act read: "Consideration of applications by costs assessors (1) A costs assessor must not determine an application for assessment unless the costs assessor: (a) has given both the applicant and any barrister, solicitor or client or other person concerned a reasonable opportunity to make written submissions to the costs assessor in relation to the application, and (b) has given due consideration to any submissions so made. (2) In considering an application, a costs assessor is not bound by rules of evidence and may inform himself or herself on any matter in such manner as he or she thinks fit." 20 In deciding what was fair and reasonable the costs assessor had to consider the matters in s 208A(1) set out below and was entitled to have regard to the paragraphs in s 208B. "Section 208A Assessment of bills generally (1) When considering an application relating to a bill of costs, the costs assessor must consider: (a) whether or not it was reasonable to carry out the work to which the costs relate, and (b) whether or not the work was carried out in a reasonable manner, and (c) the fairness and reasonableness of the amount of the costs in relation to that work." (2) A costs assessor is to determine the application by confirming the bill of costs 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 his or her opinion, is a fair and reasonable amount." … (5) A costs assessor may not determine that any part of a bill of costs that is not the subject of an application is unfair or unreasonable." 21 The costs assessor gave reasons and relevantly stated: "In response to my notice to Costs Respondent the Costs Respondent provided to me three different sets of objections which were to be considered by me subject to how I determined the Bill of Costs and the orders of the Court. If I accepted the Costs Respondent's submission that the orders were simply confined to the days of actual appearance then objection number one was relevant. In my interpretation of what flows from the orders I rejected that submission. If I considered the orders were confined to the day with minimal preparation then objection two should address that situation. Again I rejected that submission. Objections 3 were applicable if I felt that the Applicant was entitled to the full bill being assessed. Whilst I did not consider each and every item in the bill was assessable I nonetheless concluded that in the circumstances objections 3 were the more relevant. The solicitor for the Costs Applicant responded to all objections. I took into account responses to objections 3. I sought further material from the solicitors for the Costs Applicant during the assessment process. That material was provided to me. The Respondent addressed certain of the material provided to me by the solicitor for the Costs Applicant in writing to me as he did on 18 May 2005." 22 The costs assessor had regard to each of Lawrence's three notices of objection. Lawrence was given and availed himself of the opportunity to make written submissions. The costs assessor discharged his statutory obligations. In these circumstances, there has been no denial of procedural fairness or natural justice. The costs order dated 24 September 2004 23 Lawrence submitted that Hatzantonis's solicitors, Ramensky Lawyers, should have been permitted to recover the legal professional costs incurred on 25 February 2004, 18 May 2004, 2 July 2004 and 29 November 2004. 24 In the reasons for judgment dated 29 November 2004 Bryson J (as he then was stated "I do order, that the executor, Mr Wayne Lawrence, pay the plaintiffs Coral Marjorie Hatzantonis and Roma Rachel Lawrence seventy-five per cent of their costs of the day of 25 February 2004." (my emphasis added). The Review Panel agreed with Lawrence and limited the costs of 25 February 2004 to that day only. Thus the interpretation of the costs order of 25 February 2004 is no longer in dispute. 25 It is the interpretation of costs orders relating to 18 May 2004, 2 July 2004 and 29 November 2004 that Lawrence still disputes. The Review Panel's view was that the effect of the balance of Bryson J's orders dated 29 November 2004 was the Lawrence had to pay the costs of and incidental to the proceedings numbered 1898/2003, including the directions hearings of 18 May 2004 and 11 June 2004 and the hearings of 2 July 2004 and 29 November 2004. 26 A party cannot came along to court in a vacuum so as to speak without preparing for the issues it will have to meet at the hearing. That is the rationale for the longstanding common law principle that a party is entitled to recover "the costs of" and "incidental to" the application, not just the costs of appearing in court on that day. (see Wentworth v Wentworth (NSWCA unreported 21 February 1996, 40374/95) and S H Lock & Co (Australasia) Limited v Rudders Ltd (1932) 49 WN(NSW) 65). Leave under s 208M 27 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." 28 It is important to keep in mind the purpose of a requirement of leave to appeal. It is intended to act as a filter to ensure that unsuitable appellant proceedings which 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 for example Coulter v Regina (1987) 164 CLR 350 at 359. 29 In considering whether or not leave to appeal is granted it must be decided whether or not, there not being a matter of law arising in the proceeding and there being an appeal as of right only as to a matter of law, there is some other matter which in justice requires 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. 30 Lawrence made submissions concerning the six minute interval method of time costs. There was other work included in the bill of costs and Lawrence complained that he was not furnished with a copy of the costs agreement between Hatzantonis and their solicitor. Other similar matters were raised in Lawrence's amended summons and affidavits. 31 The costs assessor disallowed items at the beginning of the bill and determined the solicitor's overall charge out rate for Ms Ramensky of $300 per hour as fair and reasonable and he did not allow any uplift from that hourly rate to $330 although he was satisfied by the material provided to him that the solicitor did in fact disclose to her clients the increased hourly rate. The costs assessor then summarised the amounts he allowed and in relation to costs the costs assessor stated: "In accordance with paragraph 61 of the Legal Profession Regulation 2002 I state as follows: (i) the total amount of costs for providing legal services determined by me to be fair and reasonable is the amount of $22,960.85 (including GST) (ii) the total amount of disbursements determined by me to be fair and reasonable is the amount of $21, 771.07 (including GST). (iii) I varied the disbursements claimed by allowing items 17, 19, 20, 22, 24, 25, 27, 30, 31, 32, 35, … . I included a claim for travel on 29 November 2004 but only allowed the amount claimed at $32.50. In respect to claims made for photocopying which I allowed I disallowed claims for GST in respect of such items and then allowed the claim at fifty cents per copy rather than a dollar per copy. I allowed item 24 at the amount of $51.26 because it was clear to me that the amount of $51.26 included GST and should not therefore be liable to a further claim for GST. I disallowed claims for GST in respect in respect to travelling so for example item 31 was allowed at $31.00 rather then $34.10. For similar reasons I reduced item 38 to $20.90. I allowed $20.90 instead of the amount claimed at item 27. I reduced item 58 to the amount of $13.20 for reasons similar to that stated in respect to item 24. I disallowed claims for GST on travel expenses, I reduced claims for photocopying and I disallowed claims facsimiles and postages because as I have already said such expenses should be absorbed within an allowed hourly rate of $300.00. I do not consider it is necessary for me to say anything further in this statement of reasons except that I allowed part of the filing fee claimed in the amount of $447.32." 32 None of the matters raised by Lawrence are ones that merit leave being granted. Rather, Lawrence is seeking to relitigate the issues determined by the costs assessor and Review Panel. It was upon to the costs assessor and review panel to reach the conclusions they did. The plaintiff's claim under s 208M fails. 33 The plaintiff's claims under ss 208L and 208M have been unsuccessful. The Costs Review Panel decision dated 11 November 2004 is affirmed. The amended summons is dismissed. 34 Costs are discretionary. Normally costs follow the event. The plaintiff is to pay the defendants' costs as agreed or assessed. The court orders: (1) The appeal is dismissed. (2) Leave to appeal is refused. (3) The costs assessor's decision of 11 November 2004 is affirmed. (4) The amended summons is dismissed. (5) The plaintiff is to pay the defendants' 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.