District Court New South Wales Medium Neutral Citation: John Christopher Gazecki v McCabes Lawyers Pty Limited [2019] NSWDC 566 Hearing dates: 3 October 2019 Date of orders: 11 October 2019 Decision date: 11 October 2019 Jurisdiction: Civil Before: Weber SC DCJ Decision: (1) The plaintiff's application for leave to commence the proceedings out of time is refused. (2) The amended summons is dismissed. (3) The plaintiff is to pay the defendant's costs of and incidental to the proceedings. Catchwords: COSTS – Costs assessment – Solicitor/Client - Determination – Review/appeal CIVIL PROCEDURE – Time – Extension of time to appeal decision of review panel – where appeal lodged some 30 days out of time – plaintiff's explanation for the delay inadequate – prospects of appeal's success low – where costs agreement addressed to plaintiff – where parties contemplated scope of work would evolve over time – no error demonstrated by review panel – prejudice demonstrated by defendant – little/no prejudice suffered by plaintiff on account of plaintiff's right to continue professional negligence proceedings against defendant – application for leave refused - amended summons dismissed Legislation Cited: Legal Profession Uniform Law (NSW) Legal Profession Uniform Law Application Act 2014 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Allesch v Maunz (2000) 203 CLR 172 Amos v Monsour P/L [2009] QCA 65 Australian Coal & Shale Employees' Federation v Commonwealth (1953) 94 CLR 621 Farrar v Julian-Armitage [2015] QCA 289 Jackamarra v Krakouer (1988) 195 CLR 516 Jingalong Pty Ltd v Todd [2014] NSWCA 330 Schweppes' Ltd. v Archer (1934) 34 SR (NSW) 178; 51 WN (NSW) 71 Tomko v Palasty (No 2) (2007) 71 NSWLR 61 Category: Procedural and other rulings Parties: John Christopher Gazecki (Plaintiff, Applicant) McCabes Lawyers Pty Limited (Defendant, Respondent) Representation: Counsel: Mr R. Notley (Plaintiff, Applicant) Mr E. Finnane (Defendant, Respondent) Solicitors: HG Law (Plaintiff, Applicant) McCabe Curwood (Defendant, Respondent) File Number(s): 2019/00151954-001 Publication restriction: None Judgment 1. The plaintiff seeks an extension of time within which to commence an appeal pursuant to the provisions of s 89 of the Legal Profession Uniform Law Application Act 2014 (NSW) (the "Act"). Section 89(1) of the Act provides a limited right of appeal to this Court by a party aggrieved by the costs decision of a review panel. 2. The proposed appeal is an appeal against the rejection of an appeal by the costs assessment review panel (the "Panel"). That is to say, having failed at first instance before a costs assessor, and on appeal, the plaintiff now seeks to appeal the Panel decision to this Court. 3. The decision of the Panel was communicated to the plaintiff's agents, a firm of costs assessors, on 18 March 2019. Pursuant to the provisions of rule 50.3(1)(a) of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"), the plaintiff had 28 days within which to lodge his appeal, that is to say, until 15 April 2019. The plaintiff failed to do so. In fact, he did not do so until 15 May 2019, some 30 days out of time. The Relevant Principles 1. The principles which govern the grant of indulgence extending time are not in dispute. The factors of general relevance to an application to extend time within which to appeal are: 1. the length of the delay; 2. any explanation for the delay; 3. whether the applicant has a fairly arguable case; and 4. the extent of any prejudice suffered by the respondent to the application (See Jingalong Pty Ltd v Todd [2014] NSWCA 330, at [39]-[40]). 1. A different emphasis on the weight to be placed on these factors has emerged in the authorities, where the explanation for the delay is less than satisfactory, or if there is a substantial case of prejudice suffered by the respondent to the application. In cases such as those, the person seeking the indulgence must show that his or her case has more substantial merit than merely being fairly arguable (Tomko v Palasty (No 2) (2007) 71 NSWLR 61, at [14] per Hodgson JA (Ipp JA agreeing)). 2. It has been pointed out that the four general factors referred to above are not the only factors that may arise in an extension of time application. In Jackamarra v Krakouer (1988) 195 CLR 516, Kirby J said at 543 ([66]-[67]): "…But they are by no means exhaustive. Several others have from time to time been thought relevant. These include whether the delay was intentional or contumelious; or merely the result of a bona fide mistake or blunder; and whether the delay is that of the litigant or of its lawyers, with which the litigant should not be saddled. It may also be relevant, where the default is that of a party's legal representatives, to take into account any considerations personal to the party which might have affected its ability to safeguard its own interests, for example, by applying pressure to its lawyers. Similarly, the extent to which any such prejudice may be remedied by an appropriate costs order is another consideration that has sometimes been treated as relevant." Period of the Delay 1. The plaintiff contends that the period of delay, being 30 days, is not of significance. I do not accept this proposition. The delay was for a period greater than the appeal period. In any event, in my view, the extent of the delay can only be relevantly considered by reference to the reasons for it. Reasons for the Delay 1. In his affidavit of 25 July 2019, the plaintiff Mr Gazecki says: Explanation for Delay 9 I received a copy of the Determination from the costs consultants acting for me on the Costs Review, QCA Coast [sic] Assessors ("QCA"), on 21 March 2019. 10 I was informed by QCA on 25 March 2019 that the Costs Appeal was required to be filed within 28 days from 18 March 2019, however, they further informed me that they do not act on District Court Costs Appeal matters and they suggested that I retain a barrister. 11 I contacted a few barristers who said that they required an instructing solicitor. 12 I was very busy in the month leading up to 6 April 2019 as that is when we have our Polo in the Vines event in the Hunter Valley. The month leading up to an event is always very intense with work. Then there was the event itself that took up approximately a week of being onsite in the Hunter Valley. 13 Nonetheless, during that period I attempted to come to terms with determination of the Costs Review Panel and I acted to collate and review documents from the Costs Assessment and Costs Review Panel Assessment with a view to retaining a new solicitor and barrister to progress the Costs Appeal. 14 On 17 April 2019 I first contacted Heathfield Grosvenor ("HG"), the solicitors currently acting for me in these Costs Appeal Proceedings, and provided them with a brief with a view to receiving a costs proposal and scope of work from them. 15 On 18 April 2019 HG provided me with a costs proposal. 16 On 22 April 2019 I went camping with my wife and children for approximately 10 days during school holidays, where there was poor telephone and internet reception. It had been planned for months and there were at least 5 families attending. As we had organised the whole trip, we had to be there and could not cancel. 17 On 23 April 2019 I sought further clarification from HG in relation to their costs proposal and the scope of work. 18 On 30 April 2019 I instructed HG to proceed with the Costs Appeal. 19 On 1 May 2019 HG provided me with their formal costs agreement and costs disclosure. 20 On 1 May 2019 I returned from the camping trip. 21 HG filed the Summons commencing these Costs Appeal Proceedings on 15 May 2019. 1. This rather glib attempt to explain the delay justifies closer analysis. 2. The first matter which must be borne in mind is that the plaintiff is a former practising solicitor, who was indeed employed by the defendant. This is relevant when considering the fact that the Panel's published decision had time for appeal quite prominently displayed on it. Moreover, it is inconceivable that as a former practising solicitor, the plaintiff was not aware that, inevitably, an appeal is required to be made within a relatively short timeframe. It is also inconceivable that he was not aware that the indulgence of an extension of time is not granted on a routine basis, but rather must be justified. 3. The plaintiff annexed a chronology to his affidavit. It is set out below. EF= Email from third party ET= Email to Plaintiff LF= Letter from third party HG= Heathfield Grosvenor Date Item Description 06-03-19 Heavy Workload Preparing for Polo in the Vines event on 6 April 2019 – 1 month away 21-03-19 EF QCA (costs consultant) Attaching Determination 21-03-19 ET QCA (costs consultant) Asking what is next stage of Appeal 25-03-19 EF QCA (costs consultant) Summary of Appeal legislation & that must be filed 28 days from 18 March 25-03-19 ET QCA (costs consultant) Correspondence regarding appeal 26-03-19 EF QCA (costs consultant) Provide list of Barristers with experience for advice 26-03-19 ET QCA (costs consultant) Seeking more information about Appeal 03-04-19 Hunter Valley Onsite in the Hunter Valley preparing for 'Polo in the Vines' event which I produce 06-04-19 Hunter Valley Onsite in Hunter Valley for 'Polo in the Vines' event 07-04-19 Hunter Valley Onsite in Hunter Valley for bump-out 09-04-19 ET QCA (costs consultant) Seeking copies of Submissions & filed documents 11-04-19 EF QCA (costs consultant) Receive all documents 15-04-19 LF McCabes Attaching letter from McCabes regarding enforcement 16-04-19 ET Michelle Castle (barrister) Approach regarding taking on brief 16-04-19 ET Michelle Castle (barrister) Replies in affirmative, but will need to be retained by solicitor 16-04-19 ET Marina Dulhunty (barrister) Approach regarding taking on brief 16-04-19 ET HG Approach regarding taking brief as solicitor 16-04-19 EF HG Replies in Affirmative. Seeks documents 16-04-19 ET Kirralee Young (barrister) Approach regarding taking on brief 16-04-19 EF Kirralee Young (barrister) Replies in affirmative, but will need to be retained by solicitor 17-04-19 EF Marina Dulhunty (barrister) Replies in Affirmative 17-04-19 ET HG Send documents to HG plus further instructions 18-04-19 ET HG Provide cost estimate 18-04-19 ET HG In response to estimate 22-04-19 Camping Go camping with family during school holidays. No reception at campground. Have to drive 15 minutes to check messages on phone 23-04-19 EF HG Reply to request for further information 30-04-19 ET HG Instruct HG to proceed with Appeal & claim against McCabes 01-05-19 EF HG Attaching Costs Agreement 01-05-19 Return from Camping Return from camping with kids 07-05-19 EF HG Draft Summons attached 14-05-19 ET HG Instruct to file Summons 15-05-19 Summons Filed 1. The following should be noted, bearing in mind that the plaintiff had until 15 April 2019 to lodge his appeal : 1. The plaintiff was provided with the costs assessment on 21 March 2019. 2. Having been told that the costs assessors were not prepared to undertake the appeal in this Court and that he should obtain legal advice, the plaintiff sought a list of barristers with relevant experience. This occurred on 26 March 2019. 3. It was not until 16 April 2019 that the plaintiff made any contact with any legal practitioners, which contact was limited to a two sentence enquiry as to whether they possessed expertise in costs review matters. 4. The plaintiff was only at the polo in the Hunter Valley for three days, there being no explanation as to why this absence from Sydney precluded him from progressing the appeal. 5. It was not until 9 April 2019 that he apparently contacted his costs assessors in order to obtain documents relevant to a possible appeal. These were provided on 11 April 2019. 6. Notwithstanding that he was apparently aware of the urgency attaching to the filing of the appeal, he considered it appropriate to go camping for 10 days to a location with poor mobile telephone and internet access. It should be noted in this regard, that he says that he only had to drive 15 minutes to access mobile phone coverage. The Court is left with no evidence as to whether internet access was also achievable at that spot. 1. Mr Finnane of counsel, who appeared for the defendant, submitted that in truth, the plaintiff has supplied no explanation for the delay at all. He says that the plaintiff's affidavit merely shows what he was doing in the relevant period, as distinct from explaining how what he was doing precluded him from attending to the appeal. 2. Taking a more charitable view perhaps, and describing Mr Gazecki's evidence as an explanation, then on any view of it, the explanation is inadequate. At best, it shows that in the context of other work commitments (the proposed appeal itself also being a work activity) and 10 days of camping, the plaintiff afforded the task of attending to the appeal, little or no priority. The Prospects of the Appeal 1. The authorities to which I have earlier referred, demonstrate that if the applicant seeking the Court's indulgence provides a less than satisfactory explanation for delay, it becomes incumbent on that party to demonstrate that his or her appeal prospects are more substantial than merely being described as arguable. The starting point in consideration of the appeal prospects must be consideration of the nature of the appeal. This is an appeal by way of rehearing (s 89 of the Act). 2. An analysis of the authorities in relation to costs appeals, reveals the following: 1. The powers of an appellate court on an appeal by way of rehearing are exercisable only where the appellant can demonstrate that the decision below is the result of error, whether legal, factual or discretionary: Allesch v Maunz (2000) 203 CLR 172, at [23]. 2. A further matter affecting the scope of appeal and thus its prospects, arises from the nature of the decision below. The costs assessor's task, pursuant to s 76(1) of the Act, is to determine what is a fair and reasonable amount of costs for the work concerned. 3. The determination of what is fair and reasonable is an evaluative determination, which invites the same appellate restraint as decisions involving the exercise of discretions. 4. So far as the need for appellate restraint is concerned, there is no distinction between the costs assessment regime and older regimes of costs taxation. In relation to the latter, in Schweppes' Ltd. v Archer (1934) 34 SR (NSW) 178; 51 WN (NSW) 71, at 73, Jordan CJ (Harvey CJ in Eq. and Street J concurring) said: In appeals as to costs, the principles to be applied are these. The Court will always review a decision of a Taxing Officer where it is contended that he has proceeded upon a wrong principle, for the purpose of determining the principle which should be applied; and an error in principle may occur both in determining whether an item should be allowed and in determining how much should be allowed. Where no principle is involved, and the question is, whether the Taxing Officer has correctly exercised a discretion which he possesses and is purporting to exercise, the Court is reluctant to interfere. It has undoubted jurisdiction to review the Taxing Officer's decision even where an exercise of discretion only is involved, and will do so freely on a proper case, using its own knowledge of the circumstances : Western Australian Bank v. Royal Insurance Co. (7 C.L.R. at 388); Clark, Tait & Co. v. Federal Commissioner of Taxation (47 C.L.R. 142, at 145-6), but it will in general interfere only where the discretion appears not to have boon exercised at all, or to have been exercised in a manner which is manifestly wrong; and where the question is one of amount only, will do so only in an extreme case. 1. That statement of principle was adopted by Jordan CJ in Australian Coal & Shale Employees' Federation v Commonwealth (1953) 94 CLR 621, at 628. 2. More recently, in two cases, the Queensland Court of Appeal has considered the role of a court in an appeal against a costs assessor's certificate under the legislation in that jurisdiction. In Amos v Monsour P/L [2009] QCA 65, Fraser JA (McMurdo P and Douglas J agreeing) said: [8] Demonstration of a reasonable argument that the costs should have been fixed in a lower amount will not necessarily establish that there has been an error of the kind that might justify leave to appeal. Fixing the amount of costs under UCPR r 687(2)(c), like an assessment of costs under pt 3 of ch 17A, commonly involves evaluative determinations and discretionary decisions about questions to which there is not only one correct answer. That imposes significant limits upon the circumstances in which such decisions are amenable to review. The nature of those limits was described in Jordan CJ's well known summary of the law on the topic in Schweppes' Ltd v Archer: "In appeals as to costs, the principles to be applied are these. The Court will always review a decision of a Taxing Officer where it is contended that he has proceeded upon a wrong principle, for the purpose of determining the principle which should be applied, and an error in principle may occur both in determining whether an item should be allowed and in determining how much should be allowed. Where no principle is involved, and the question is, whether the Taxing Officer has correctly exercised a discretion which he possesses and is purporting to exercise, the Court is reluctant to interfere. It has undoubted jurisdiction to review the Taxing Officer's decision even where an exercise of discretion only is involved, and will do so freely on a proper case, using its own knowledge of the circumstances : Western Australian Bank v Royal Insurance Co. (7 C.L.R. at 388) ; Clark, Tait & Co v Federal Commissioner of Taxation [1931] HCA 26; (47 CLR 142, at 145-6), but it will in general interfere only where the discretion appears not to have been exercised at all, or to have been exercised in a manner which is manifestly wrong; and where the question is one of amount only, will do so only in an extreme case." [9] Kitto J quoted that passage with approval in Australian Coal and Shale Employees' Federation v The Commonwealth & Others and observed that "there is a strong presumption in favour of the correctness of the decision appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong". 1. To similar effect, see Farrar v Julian-Armitage [2015] QCA 289, at [15] (per Henry J, McMurdo P and Morrison JA agreeing). 2. In the proceedings before the Panel, the plaintiff sought to argue that he was not personally liable for the costs. Rather, he said that his company Premium Event Production Pty Limited ("PEP") was liable for those costs. 3. In my view, the prospects of success on this argument are very limited. The costs agreement is addressed and directed to both Mr Gazecki and PEP. Although he did not ultimately sign the costs agreement, it required acknowledgement from him that he was accepting it on behalf of both himself, and the company. 4. In addition, it is clear from the costs agreement that the parties intended that the retainer would evolve over time and most likely go beyond the immediate subject matter of the retainer, namely the voluntary liquidation of PEP. Indeed, the fact that the initial instructions were designed to achieve the liquidation of PEP, further militates against the proposition that that company was to be solely liable for its costs. 5. The retainer did evolve as both solicitor and client anticipated it would, and advice was sought by Mr Gazecki as to a proposed share sale agreement between Mr Gazecki, or a company controlled by him, and a third party Mr Ruki Baillieu. This was in respect of a shareholding in a company, Polo Enterprises Holdings Pty Limited. The contemplated share sale agreement was self-evidently a matter personal to him. 6. The Panel decided against the plaintiff in relation to this ground, and his prospects of success of an appeal in relation to the point appear very limited in my view. 7. The primary argument raised by the plaintiff before the Panel appeared to be the alleged failure by the primary cost assessor to give the plaintiff a reasonable opportunity to make detailed submissions on quantum, once it was determined that he was liable for the costs. The Panel sensibly decided to resolve this issue by giving the plaintiff that opportunity. Having done so, it rejected the substance of his point, finding that the costs claimed were calculated in accordance with the costs agreement, and based on their experience, the costs were fair and reasonable, and in proportion to the work performed. 8. In the proposed Amended Summons to be relied upon in this Court, in grounds 1 to 6, the plaintiff alleges that he was not personally liable for the costs. For the reasons set out above, I believe the prospects of success on these grounds are very limited. 9. Grounds 2 to 5, and 7 to 9, concern alleged failures to give further disclosures as the scope of the engagement changed. This is said to have led to the consequence that the original costs agreement was void. 10. Based on Mr Gazecki's submissions before the Panel, the essence of these complaints is that there was a failure to give an estimate of costs beyond what he described as "stage 1" and "stage 2". However, on the evidence, the costs agreement disclosed estimated costs of $10,000, and then, when the scope of instructions expanded, a series of further disclosures was given, such that the total that was disclosed by way of estimate was $33,500. This compares favourably with the assessed costs of $36,243.76 11. Further, even if the costs agreement was to be rendered void under s 178 of the Legal Profession Uniform Law (NSW) for failure to comply with s 174, the consequence would be that the costs cannot be recovered until they have been assessed (s 178(1)(b)). That has occurred. The costs have been found to be fair, reasonable and proportionate. 12. Grounds 10 to 15 are all generalised assertions of error affecting the quantum of the costs, but no specific error is raised. Having regard to the principles which I have set out above, the assertions that do not disclose error beyond generic assertions as to fairness and reasonableness, are unlikely to find acceptance in this Court following the principle stated in Schweppes' Ltd v Archer and the other cases to which I have earlier referred. 13. It follows from the foregoing that I believe that the prospects of success of the appeal are most limited. Prejudice 1. The defendant points out that it has acted to its detriment in the period prior to the commencement of the appeal proceedings, as follows: 1. obtaining a certificate of judgment and the Panel's certificate of determination; 2. serving the judgment on Mr Gazecki; 3. in light of no response being received from Mr Gazecki, on 3 May 2019 a bankruptcy notice was issued against him; and 4. numerous attempts were made to personally effect service of the bankruptcy notice on Mr Gazecki between 3 and 15 May 2019. 1. Following my comments from the bench, Mr Gazecki through his counsel, offered to pay those costs thrown away as a condition of the grant of relief which he seeks. Given that this offer was made at literally the conclusion of his counsel's submissions in reply, there was no opportunity for the defendant to put on evidence as to the quantum of these costs. Further, there was some limited evidence as to the plaintiff being in some degree of financial difficulty, and as such, there must be some doubt as to whether the plaintiff has the capacity to carry through that offer. This could not be explored given the stage of the proceedings at which the offer was made. 2. It was said by Mr Notley of counsel who appeared for the plaintiff, that such concerns as I might entertain in that regard, could be addressed by granting leave but withdrawing it, if the payment was not made. 3. I do not believe that that would be an appropriate way to resolve the matter of prejudice to the defendant, as leave to file the summons out of time, once given, may be juristically difficult to revoke. 4. More fundamentally, I do not consider it necessary to place any particular store on the prejudice said to have been suffered by the defendant. I take this view for two reasons: the first is that even absent prejudice to the defendant, in my view, for the reasons set out above, the plaintiff is not entitled to the indulgence which he seeks. The second reason is that, unusually there are prejudice considerations relevant to the plaintiff. 5. As to the second point, the plaintiff has commenced proceedings against the defendant in this Court for professional negligence, and for what he alleges were misleading and deceptive representations. These representations all went to matters relating to costs, the subject of the application before me. The plaintiff's counsel, Mr Notley confirmed that the damages claimed in the professional negligence proceedings, while not presently particularised, are the costs the subject of this appeal. 6. This raises two issues: 1. The possibility of there being in existence an abuse of process, that is to say, that the appeal seeks to have the costs assessment set aside, while the professional negligence proceedings seek to recover the same costs, inferentially on the basis that they are due and payable, and indeed if a claim for damages is to succeed, have been paid. 2. The existence of the professional negligence proceedings therefore has the effect that if the indulgence sought by the plaintiff is not granted, the plaintiff will suffer little or no prejudice, as if there is merit in the professional negligence claim in respect of the costs, such costs, when they are paid, will be recoverable from the defendant. 1. The orders which I am about to make will also have the tangential benefit of removing the possibility of an abuse of process constituted by the two sets of proceedings. Conclusion 1. For the foregoing reasons, I refuse to grant leave to the plaintiff to commence the proceedings out of time. Orders 1. The plaintiff's application for leave to commence the proceedings out of time is refused. 2. The amended summons is dismissed. 3. The plaintiff is to pay the defendant's costs of and incidental to the proceedings. ********** 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: 15 October 2019