Supreme Court New South Wales Medium Neutral Citation: Mohareb v Jankulovski & Another [2013] NSWSC 1300 Hearing dates: 2 September 2013 Decision date: 13 September 2013 Jurisdiction: Common Law Before: Barr AJ Decision: 1.Summons is dismissed. 2.The plaintiff to pay the defendants' costs of the Motion. Catchwords: PRACTICE AND PROCEDURE- review of costs assessment - allegation of fraud - allegation of error of fact - no reasonable cause of action disclosed - summons dismissed. Legislation Cited: Legal Profession Act 2004 Uniform Civil Procedure Rules Category: Principal judgment Parties: Nader Mohareb (Plaintiff) Emil Jankulovski Emil & Sons Pty Limited (Defendants) Representation: Counsel: Plaintiff in person M Dulhunty (Defendants) Solicitors: Plaintiff in person C Jankulovska (Defendants) File Number(s): 2012/379659; 2012/68684 Publication restriction: None Judgment 1This is a motion by the defendants, Emil Jankulovski and Emil & Sons Pty Limited trading as Inducta Engineering, for an order dismissing the plaintiff's summons. By his summons the plaintiff, Nader Mohareb, seeks leave to appeal against the decision of a Costs Assessor, Mr Ian Dwyer. Mr Dwyer's assessment was made pursuant to an order by Harrison J. The History of the Matter 2The plaintiff commenced proceedings against the defendants by filing a Statement of Claim. On 27 March 2012 he amended it. The defendants moved the Court for an order summarily dismissing the claim. Harrison J heard the motion and gave judgment on 4 May 2012. His Honour observed that the Amended Statement of Claim was not in proper form, was potentially if not actually embarrassing and did not on its face disclose a cause of action. Even so, his Honour concluded by reference not only to the Amended Statement of Claim but to the defence and to certain correspondence to which His Honour's attention was directed that the plaintiff was attempting to sue in defamation and that it could not be said that no cause of action existed. His Honour declined to dismiss the proceedings summarily and instead struck out the Amended Statement of Claim and granted the plaintiff leave to amend on terms. One of the terms was that he pay the defendant's costs of the Motion. 3On 8 February 2013, Hidden J dismissed as incompetent the plaintiff's Motion for an order that aspects of the conduct of the legal representatives for the defendants be referred to the police for investigation. His Honour ordered the plaintiff to pay the defendants' costs. 4The dispute next came before Johnson J. His Honour's judgment of 12 February 2013 includes the following history at [5] - [10] - 5. Also before [Hidden J] on 8 February 2013 were other Motions which were adjourned to the Registrar's list this morning, and then referred to me. 6. The first is a Motion by the Defendants filed on 14 December 2012 seeking an order that the costs order made by Harrison J on 4 May 2012 against the Plaintiff, and assessed in the sum of $8,325, be payable forthwith, an order that the claims by the Plaintiff (either in whole or in part) be summarily dismissed or, alternatively, an order that the claims of the Plaintiff (either in whole or in part) be struck out. 7. Further, in the alternative, the Defendants sought an order that, if the Court did not summarily dismiss or strike out the Plaintiff's action, the Plaintiff pay the sum of $20,000 into Court by way of security for costs. Other orders were sought of a consequential type. 8. There is a further Motion filed by the Plaintiff on 22 August 2012, in which he sought that certain paragraphs of the Amended Defence be struck out. It was accepted that it was the Defendants' Notice of Motion filed 14 December 2012 that would be appropriately heard first today if the hearing proceeded. 9. In addition, there was referred to the Court a Summons filed on 6 December 2012, whereby the Plaintiff seeks leave to appeal with respect to the costs assessment made arising from the costs order made by Harrison J on 4 May 2012. The Court has been informed that that Summons, although filed on 6 December 2012, was served only recently on the Defendants. The only document (on that file) is the Summons. 10. It will be seen that there is an interrelationship between the various applications which have ended up before the Court today. 5His Honour went on to observe that in the meantime the plaintiff had presented and wished to proceed with an unfiled and unsealed Notice of Motion supported by an unfiled affidavit, the substance of which was that the outstanding issues between the two sides had been settled by agreement and that specific performance of that agreement was sought. 6Johnson J was of the view that the plaintiff should have leave to file and proceed with that motion and that it should take precedence over all outstanding issues between the parties. His Honour ordered the plaintiff to pay the costs of that day and adjourned all outstanding matters for hearing. 7The Motion for specific performance was heard by Harrison AsJ on 7-8 May 2013. Her Honour gave judgment on 27 June 2013 dismissing the Motion and ordering the plaintiff to pay the defendants' costs. Her Honour made other orders concerning amendment of the pleadings and the provision by the plaintiff of security for costs. The Present Motion 8The plaintiff filed the present Summons on 6 December 2012. He seeks these orders- 1. Leave to appeal from the whole of the decision below 2. Appeal allowed. 3. Order of Ian Dwyer, Costs Assessor is set aside. 4. That the Plaintiff appeal is upheld and the order for costs against the Plaintiff is reassessed and revised accordingly in light of the information and details submitted. 5. That the Defendants be made liable for the Plaintiffs costs. 9The appeal grounds are stated thus- 1. In reaching his decision, I believe that the costs assessor has erred in relation to the facts of this matter. 2. I have irrefutable evidence that the Defendants in collusion with their barrister Ms. Marina Dulhunty are fraudulently claiming costs for work they have undertaken themselves while declaring under false pretences that the work was undertaken by Ms. Dulhunty. 10On the Motion Ms Dulhunty read the affidavit of her solicitor Cvetanka Jankulovska, affirmed 23 July 2013. The plaintiff read his own affidavit affirmed on 26 July 2013. On the most part, the plaintiff's affidavit comprised comment and submissions and I received it as submissions. 11The Motion is brought under R13.4 Uniform Civil Procedure Rules (UCPR). Rule 13.4 is concerned with proceedings that are generally or in relation to any claim for relief frivolous or vexatious, which disclose no reasonable cause of action or which are an abuse of the process of the Court. In such circumstances the Court may dismiss the proceedings generally or in relation to the relevant claim for relief. 12The Motion purports also to rely on R51.41 UCPR, the defendants asserting that the appeal is incompetent, though that rule seems to relate to appeals to the Court of Appeal. It seems to me that the Motion may be disposed of by reference to R13.4. Review of Costs Assessments 13Division 11 of the Legal Profession Act 2004 deals with costs assessment. Subdiv 5 provides for review for an assessor's determination by a panel. Subdiv 6 deals with appeals. Relevantly, the portions of the Act are as follows- Subdivision 5 Review of determination by panel 373 Application by party for review of determination (1) A party to a costs assessment who is dissatisfied with a determination of a costs assessor may, within 30 days after the certificate under section 368 (Certificate as to determination) or 369 (Recovery of costs of costs assessment) has been forwarded to the parties that sets out the determination of the costs assessor or within such further time as the Manager, Costs Assessment may allow, apply to the Manager, Costs Assessment for a review of the determination. Note. Section 328 (10) provides that a party to a costs agreement may apply to the Manager, Costs Assessment under this section for a review of a determination to make, or not make, an order under section 328 to set aside the costs agreement or a provision of the costs agreement. (2) The application must: (a) be made in accordance with the regulations (if any), and (b) be accompanied by the fee prescribed by the regulations. (3) The Manager, Costs Assessment may waive or postpone payment of the fee either wholly or in part if satisfied that the applicant is in such circumstances that payment of the fee would result in serious hardship to the applicant or his or her dependants. (4) The Manager, Costs Assessment may refund the fee paid under this section either wholly or in part if satisfied that it is appropriate because the application is not proceeded with. (5) A party who applies for a review under this Subdivision must ensure that notice of the application is given to the other parties to the assessment not less than 7 days before the application is made or as prescribed by the regulations. ... 374 Referral of application to panel (1) The Manager, Costs Assessment: (a) in the case of an application duly made under section 373-is to refer the application to a panel, or (b) in the case of an application prepared under section 373A-may refer the application to a panel. (2) The panel is to be constituted by 2 costs assessors. (3) A costs assessor whose determination is the subject of an application for a review under this Subdivision may not be a member of a panel to which the application has been referred. (4) A member of a panel who has an interest in an application must, as soon as practicable after becoming aware of that fact, inform the Manager, Costs Assessment of that interest. (5) If the Manager, Costs Assessment is satisfied that a member of a panel has an interest in the application, the Manager must refer the application to a differently constituted panel that does not include that member. 375 General functions of panel in relation to review application (1) A panel constituted under this Subdivision may review the determination of the costs assessor and may: (a) affirm the costs assessor's determination, or (b) set aside the costs assessor's determination and substitute such determination in relation to the costs assessment as, in their opinion, should have been made by the costs assessor who made the determination that is the subject of the review. (2) For the purposes of subsection (1), the panel has, in relation to the application for assessment, all the functions of a costs assessor under this Part and is to determine the application, subject to this Subdivision and the regulations, in the manner that a costs assessor would be required to determine an application for costs assessment. (3) However, the assessment is to be conducted on the evidence that was received by the costs assessor who made the determination that is the subject of the assessment and, unless the panel determines otherwise, the panel is not: (a) to receive submissions from the parties to the assessment, or (b) to receive any fresh evidence or evidence in addition to or in substitution for the evidence received by the costs assessor. (3A) A panel reviewing the determination of a costs assessor may determine that the amount of fair and reasonable costs is the amount agreed to by the parties to the review if during the course of the review the parties notify the panel that they have agreed on the amount of those costs. (4) If the costs assessors who constitute the panel are unable to agree on a determination in relation to an application, the panel is to affirm the determination of the costs assessor who made the determination that is the subject of the review. ... 380 Reasons for determination (1) The panel must ensure that a certificate issued under section 378 (Certificate as to determination of panel) or 379 (Recovery of costs of review) that sets out the determination of the panel is accompanied by: (a) a statement of the reasons for the panel's determination, and (b) such supplementary information as may be required by the regulations. (2) The statement of reasons must be given in accordance with the regulations. 381 Correction of error in determination (1) At any time after making a determination, a panel that conducts a review may, for the purpose of correcting an inadvertent error in the determination: (a) make a new determination in substitution for the previous determination, and (b) issue a certificate under section 378 (Certificate as to determination of panel) or 379 (Recovery of costs of review) that sets out the new determination of the panel. (2) Such a certificate replaces any certificate setting out the previous determination of the panel that has already been issued by the panel and, on the filing of the replacement certificate in the office or registry of a court having jurisdiction to order the payment of the amount of the new determination, any judgment that is taken to have been effected by the filing of that previously issued certificate is varied accordingly. ... Subdivision 6 Appeals 384 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 District Court, appeal to the Court against the decision. (2) After deciding the question the subject of the appeal, the District 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. 385 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 District 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 District 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 District 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. 386 Effect of appeal on application (1) If a party to an application for a costs assessment has appealed against a determination or decision of a costs assessor, either the costs assessor or the court or tribunal to which the appeal is made may suspend, until the appeal is determined, the operation of the determination or decision. (2) The costs assessor or the court or tribunal may end a suspension made by the costs assessor. The court or tribunal may end a suspension made by the court or tribunal. ... 389 Court may refer unreviewed determination to review panel (1) If an appeal is made under section 385 (Appeal against decision of costs assessor by leave) against a determination of a costs assessor and the determination to which the appeal relates has not been reviewed by a panel in accordance with Subdivision 5 (Review of determination by panel), the court or tribunal to which the appeal is made may refer the appeal to the Manager, Costs Assessment for a review by a panel under that Subdivision. (2) For the purposes of Subdivision 5 (Review of determination by panel), the referral of an appeal by a court or tribunal under subsection (1) to the Manager, Costs Assessment is taken to be a duly made application for a review under that Subdivision. Consideration 14I shall deal first with the second stated ground of appeal. The plaintiff provided no further particular of his claim of fraud and no evidence of fraud, notwithstanding the exaggerated way in which the ground of appeal was framed. When asked whether he pressed the ground he said that he did not. 15In my opinion the plaintiff's action in grounding his process on an assertion of fraud and then, when required to account for it, in abandoning it without further explanation is reprehensible. The assertion was scandalous. It had no basis in fact. The ground should be struck out. 16As to the first ground of appeal it was submitted for the defendants that a statement of belief that the Costs Assessor had erred on the facts disclosed no reasonable cause of action. It could not be understood by the defendants and responded to in dealing with the question whether the plaintiff should be granted the leave he needed to appeal against the assessment. 17The plaintiff submitted, by reference to the arguments set forth in his affidavit, that he wished to argue on appeal that there were two issues before Harrison J, namely whether the proceedings should be summarily dismissed and whether in the alternative the Statement of Claim should be struck out. The defendants contended for the first as well as the second, but succeeded only on the second. The Costs Assessor should therefore have allowed for that in assessing costs. Instead he assessed costs as if the defendants had succeeded on both issues. 18Counsel for the defendants responded by submitting that the plaintiff was trying to go behind the order of Harrison J. His Honour was aware that there had been the two issues and could have made a more limited costs order with that in mind, but did not do so. The Costs Assessor referred to the matter in his reasons. The Assessment followed his Honour's order. 19In my opinion the stated ground of appeal does not disclose a reasonable cause of action. No error on the facts is identified and the Defendants cannot respond to it on its face. The ground is therefore liable to be struck out unless the Court gives the plaintiff the opportunity to replead. I have considered whether the plaintiff should have that leave. 20The plaintiff has chosen to proceed by seeking the leave of the Court to appeal rather that by applying for a review of the assessment under S 373, a simple and quick process in which no reasons for the application for review are required to be stated. No reason appears why the plaintiff has chosen to proceed by this more difficult and expensive route. 21The Court is not dealing with the plaintiff's application for leave to appeal, of course, but it is appropriate in my view to consider the likelihood of a grant of leave as well as to consider what might follow in deciding whether to give the plaintiff the opportunity to plead the first ground of appeal again. 22First, it seems to me that a real question would arise on the leave application whether the plaintiff were seeking to go behind the order of Harrison J. Secondly, it appears that submissions were made to the Costs Assessor about the separate issues before Harrison J and the Assessor referred to them in his reasons. See particularly para (ix) in this extract- (vii) As the Costs Respondent was ordered to pay the Costs Applicant's costs of the Notice of Motion the filing fee of $680.00 on the filing of the Notice of Motion is clearly fair and reasonable and I have allowed that amount. (viii) In relation to the fees of Ms Dulhunty I note that the Costs Respondent filed two affidavits both dated 16 April 2012, one of which was 30 pages long plus annexures and the other which was four pages long. The Costs Respondent now seeks to suggest that the Costs Applicant should not be entitled to costs claimed in respect of Ms Dulhunty on the basis that it was clear that the Amended Statement of Claim did not comply with the provisions of the Uniform Civil Procedure Rules 2005. If the Amended Statement of Claim did not comply with the provisions of the Uniform Civil Procedure Rules the Costs Respondent could have easily consented to an Order that the Amended Statement of Claim be struck out on the basis that he replead it to comply with the provisions of the Rules. Instead he chose to fight the Motion vigorously. (ix) It is extremely difficult to have a Court summarily dismiss a plaintiff's claim and although the Costs Applicant was not fully successful on his Notice of Motion the outcome was reasonable in all the circumstances and the Costs Applicant is entitled to all his fair and reasonable costs of the Notice of Motion. It is noted that the Court did not place any restriction on the Costs Order limiting the costs to any particular issue. (x) I considered that as the Notice of Motion was vigorously fought and that the Costs Applicant was substantially successful on the Motion. On that basis the Costs Applicant is entitled to Ms Dulhunty's fees of preparing the Notice of Motion and the Affidavits in support including obtaining instructions from the Costs Applicant and is entitled to her costs of perusing the affidavits of the Costs Respondent, preparing affidavit in reply, preparing for the Motion and appearing on the hearing of a defended Motion. Her charge out rates are fair and reasonable for the work done at the time the work was carried out and having regard to the nature of the work. I did not consider however that the directions hearing of 29 March 2012 related to the Motion as it related to the substantive action, in those circumstances I disallowed the account of 24 April 2012 in the sum of $220.00. (xi) I noted that the Costs Applicant in his letter of 8 May 2012 offered to accept the sum of $7,500.00 in full satisfaction of his claim for costs of the Motion. I have allowed an amount greater than that amount. Further, there is no evidence that the Costs Respondent has made any substantial offer in respect to the costs of the Motion, in those circumstances the Costs Respondent is to pay the costs of the Motion. 23Thirdly, even if the plaintiff obtained the leave he sought, he might face an order under s 389 referring the matter under subdiv 5 to the Manager, Costs Assessment for review by a panel. If the matter went so far, I think it probable that the Court would make an order under s 389 in order to achieve a quicker and cheaper solution by putting the matter before an expert panel. 24I consider in the circumstances that the plaintiff's prospects of obtaining leave to appeal and having the issue determined on appeal are poor. I do not therefore intend to grant him leave to amend the first ground of appeal. It should be struck out. 25The effect of my order will be that the Summons will fall. If the plaintiff still wishes to have the costs assessment reviewed he may proceed under s 373. The 30 days allowed for an application to be made have expired, but the Manager, Costs Assessment has discretion to allow an application to be made nonetheless. Orders 26The Summons is dismissed. I order the plaintiff to pay the defendants' costs of the Motion. ********** Amendments 18 September 2013 - Solicitor amended Amended paragraphs: cover sheet 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. Decision last updated: 18 September 2013