KHERA v JONES [2006] NSWCA 85

New South Wales Court of Appeal

CITATION: KHERA v JONES [2006] NSWCA 85

HEARING DATE(S): On the papers

JUDGMENT DATE: 21 April 2006

JUDGMENT OF: Mason P at 1; Ipp JA at 1

DECISION: Leave to appeal refused.

CATCHWORDS: COSTS - self-represented litigant - professional costs - Chorley exception - recovery by solicitor litigant - solicitor unemployed when litigation takes place. (ND)

LEGISLATION CITED: Legal Profession Act 1987

Atlas v Kalyk [2001] NSWCA 10 Cachia v Hanes (1994) 179 CLR 403 Dobree v Hoffman (1996) 18 WAR 36 CASES CITED: Garcia v National Australia Bank Limited (1998) 194 CLR 395 Guss v Veenhuizen (No 2) (1976) 136 CLR 47 Khera v Jones & Ors [2005] NSWSC 122 London Scottish Benefit Society v Chorley (1884) 13 QBD 872 Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue of the State of Victoria (2001) 207 CLR 72

PARTIES: Jaswant KHERA v Ian R D JONES

FILE NUMBER(S): CA 40230/2005

COUNSEL: Claimant: Jaswant Khera Opponent: Ian R D Jones

SOLICITORS: Claimant: Self Opponent: Self

LOWER COURT JURISDICTION: Supreme Court - Common Law Division

LOWER COURT FILE NUMBER(S): SC 11588/2004

LOWER COURT JUDICIAL OFFICER: Harrison M

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40230/2005 SC 11588/2004

MASON P IPP JA

Friday 21 April 2006 Jaswant KHERA v Ian R D JONES JUDGMENT 1 THE COURT: This application involves a question of general importance, namely the scope of the rule of practice that a self-represented solicitor in litigation is entitled to professional costs in a taxation or its equivalent (see generally Guss v Veenhuizen (No 2) (1976) 136 CLR 47). That rule of practice is itself an exception to a general rule that a self-represented person is not entitled to recover compensation for time spent in preparing and conducting the case (Cachia v Hanes (1994) 179 CLR 403). The exceptional rule for solicitors is often referred to at the Chorley rule since it was most clearly stated in London Scottish Benefit Society v Chorley (1884) 13 QBD 872. 2 In Cachia, the Chorley rule was described (at 411) as "somewhat anomalous" and resting upon a "somewhat dubious" justification. Indeed, the majority hinted (at 412-413) that the exception ought perhaps to be abandoned. The Full Court of the Supreme Court of Western Australia took this step in Dobree v Hoffman (1996) 18 WAR 36, dismissing an appeal from the judgment of Ipp J at first instance. 3 If the "rule of practice" deserves continuing application, the present case is a most undeserving applicant for inclusion. Indeed, it casts further doubt on the sustainability of the Chorley rule. 4 The claimant and respondent are both solicitors who represented themselves in acrimonious District Court proceedings that resulted in costs orders in favour of the opponent. The costs have been assessed by a costs assessor in the sum of $22,099.71, based on an hourly rate of $250. The claimant's appeal against that assessment (under s208L of the Legal Profession Act 1987) was dismissed by Master Harrison in the judgment that is subject to this application for leave to appeal (see Khera v Jones & Ors [2005] NSWSC 122). The appeal to the Supreme Court that was determined by the Master is limited to matters of law and the only such matter is the application of the Chorley exception. At the time the opponent was conducting the relevant litigation in the District Court he was no longer working as a solicitor although he held a practising certificate. His letter to the costs assessor stated: I was last employed as a senior solicitor until 26 April 2002. My charge out rate at that time was $300 per hour plus GST. I have been unemployed since that time but have been working 10 to 30 hours per week as a solicitor in acting for myself in a number of legal proceedings and disputes, in collecting debts from my old Avalon practice, in carrying out my duties as Receiver and Manager of Kheras The Law Firm, in seeking employment and following up practices for sale or partnership opportunities, and in other activities associated with being a solicitor. Much of the time spent in acting for myself has been in the current District Court proceedings with Mr Khera, or in other litigation or disputes involving Mr Khera or his wife. 5 This application for leave to appeal is a fight between two self-represented solicitors over a comparatively small sum of money but a significant question of legal principle. A major impediment for the claimant is the unanimous decision of this Court (Meagher JA, Handley JA and Sheller JA) in Atlas v Kalyk [2001] NSWCA 10. It was held that Guss obliged this Court to follow the Chorley exception despite the decision of the Western Australia Full Court in Dobree. The leading judgment of Handley JA cited the High Court's admonition in Garcia v National Australia Bank Limited (1998) 194 CLR 395 at 403. 6 Were the matter uncluttered by authority we would favour the approach in Dobree. But there is little reason to think that this Court would depart from its firm and comparatively recent decision in Atlas. Nor are the prospects of engrafting an exception on the Chorley exception, relating to "unemployed" solicitors, of sufficient weight to merit a grant of leave that would add a further costly chapter to this litigation. These matters could only be addressed by the High Court. 7 Leave to appeal is refused. We order that the summons for leave be dismissed with costs. In doing so, we take into account our assessment that the claimant's right to take the matter further is not itself foreclosed (see generally Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue of the State of Victoria (2001) 207 CLR 72, especially the discussion of Lane v Esdaile [1891] AC 210).