Gye v Laughton

1. [1]

   HER HONOUR: By notice of motion filed 7 September 2018, the plaintiff seeks that leave be granted to file a second amended summons in or substantially in the form annexed to his affidavit dated 12 September 2018.

2. [2]

   The plaintiff is Clement Anthony Gye. The first defendant is Gregory Allan Laughton. For convenience, I shall refer to him as the defendant, as he is the only active defendant. The second defendant is Michael William Robinson. The third defendant is John Bartos. They were the two members of the Appeal Panel. The fourth defendant is the Manager of Costs Assessment of the New South Wales Supreme Court. Mr Gye was cross examined at the hearing.

3. [3]

   The plaintiff relied Court Book 10 (Ex A). The defendants relied upon their Court Book Volume 1 (Ex 1).

Background

1. [4]

   The plaintiff, Mr Gye, was admitted as a solicitor (now lawyer) in 1976. He has been practicing for some 40 years.

2. [5]

   The plaintiff is also a director of Hume Weir Trout Farm Pty Limited. Farm Properties Pty Limited owns the real estate. Fine Food Marketing Pty Limited owns the licenses, and takes the gravity through the Hume Dame on the Murray River. The property is located near Albury (T23.21-33).

3. [6]

   Until about February 2011, Hume Weir Trout Farm was licensed under the Water Management Act 2000 (NSW) to take water from the Murray River for the purposes of its business, and then return the water to the Murray River. It held approvals issued under that Act to do so. Effective on and after February 2011, the Department of Primary Industries refused to allow Hume Weir Trout Farm to take any water from the Hume Weir or the Murray River. This had the immediate consequence that the business of Hume Weir Trout Farm was destroyed. As the director of the Hume Weir Trout Farm Pty Limited, Mr Gye appointed himself as the solicitor to act on its behalf.

4. [7]

   In December 2014, the plaintiff, as a solicitor acting on behalf of Hume Weir Trout Farm, retained the first defendant, a barrister, to provide legal services. Between December 2014 and January 2016, the first defendant provided legal services to the plaintiff in relation to Hume Weir Trout Farm.

5. [8]

   Between December 2014 and January 2016, the first defendant forwarded to the plaintiff three invoices dated 4 May 2015, 16 November 2015 and 13 January 2016 (“the invoices”) for the work he undertook pursuant to the costs agreement. The invoices totaled $102,520 inclusive of GST. The plaintiff paid some moneys on account of those fees, but failed to pay the fees claimed in full.

6. [9]

   On 7 September 2016, the defendant applied to have his fees assessed pursuant to the Legal Profession Act 2004 (NSW) (“LPA”), now repealed. The defendant’s fees were assessed by a costs assessor. On 17 May 2017, the costs assessor issued a certificate of determination of costs with reasons, which was sent to the parties on 25 May 2017.

The Appeal Panel

1. [10]

   On 26 June 2017, Mr Gye applied for a review of the decisions of the costs assessor. On 8 August 2017, Mr Laughton also applied for a review.

2. [11]

   On 20 September 2017, the Appeal Panel issued its reasons concerning the review of the costs assessment. The Appeal Panel upheld parts and disagreed with others of the costs assessor's reasons, but ultimately upheld the costs assessor’s determination of the fees properly payable to, and recoverable by, the defendant from the plaintiff.

3. [12]

   On 11 April 2018, Mr Laughton filed a notice of motion seeking to set aside the summons on the basis that the Court did not have jurisdiction in respect of the subject matter. That notice of motion was heard on 17 April 2018. The notice of motion was dismissed.

4. [13]

   On 14 May 2018, Mr Gye filed an amended summons.

5. [14]

   On 2 July 2018, Campbell J, following an application by Mr Gye, ordered a stay of the judgment in proceeding 2018/00003028 until the disposition of this proceeding, on condition that the amount of that judgment, being $19,620.07, was paid into the Registry. That sum has been paid into Court. In his ex tempore judgment, Campbell J stated at [6] and [7]:

6. [15]

   On 14 September 2018, the Registrar noted that the hearing of the notice of motion filed 7 September 2018 was to be treated as the simultaneous hearing of the proposed second amended summons.

7. [16]

   This present application by the plaintiff contends that the Appeal Panel decision is based upon errors of law, and/or has misconstrued the costs agreement. The plaintiff seeks orders setting aside the Appeal Panel decision and consequential orders.

The second amended summons

1. [17]

   The second amended summons seeks the following: firstly, an order pursuant to rule 59.10 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) extending the time for the plaintiff to institute these proceedings until the date of the filing of the summons on 29 March 2018; secondly, an order setting aside the whole of the decision of the Appeal Panel in proceedings 2016/269176 dated 20 September 2017; thirdly, an order remitting the application for assessment made in 2016/269176 to the Manager Costs Assessment to be allocated to a costs assessor not previously involved in this costs assessment process, to be assessed consistently with this Court’s decision and the reasons therefor; and fourthly, an order that the first defendant pay the plaintiff’s costs of the assessment process in 2016/269176 to the date of the order.

2. [18]

   The grounds of review are as follows:

Judicial review

1. [19]

   The judicial remedies available under s 69 of the Supreme Court Act are discretionary.

2. [20]

   In Craig v State of South Australia (1995) 184 CLR 163 at 179, the High Court stated that an administrative tribunal falls into error if it makes an error of law:

3. [21]

   In Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd (2010) 78 NSWLR 393; [2010] NSWCA 190, McDougall J at [158] referred to Kirk v Industrial Relations Commission [2010] HCA 1:

4. [22]

   It is not necessary for the Tribunal to make findings with respect to each piece of that evidence. The failure of the Tribunal to refer to each piece of evidence does not, in and of itself, constitute a legal error: see Applicant A169 of 2003 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 8 at [24] and [28]; Applicant WAEE v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 75 ALD 630; [2003] FCAFC 184 at [47]; and Collins v Urban [2014] NSWCATAP 17.

5. [23]

   It is common ground between the parties that their relationship was governed by the LPA. As a result, it was open to Mr Gye under ss 382 and 384 of the LPA to appeal the decision of the Appeal Panel, in respect of matters of law, to the District Court. He has not done so.

6. [24]

   The parties agree that, pursuant to rule 59.10(1) of the UCPR, these proceeding should have been instituted by 20 December 2017, more than three months before it was actually instituted.

Should leave to extend time be granted?

1. [25]

   UCPR 59.10 reads:

2. [26]

   In Dyason v Butterworth [2015] NSWCA 52 at [65], McColl JA (with Gleeson JA agreeing) stated:

3. [27]

   The above paragraph was referred to with approval in O’Connor v State of New South Wales [2017] NSWCA 335 at [23] per curiam.

(i) Any particular interest of the plaintiff in challenging the decision

1. [28]

   The plaintiff submitted that if his application for judicial review should be successful, he will not be obliged to pay $19,620.07.

(ii) Possible prejudice

1. [29]

   The additional delay caused by this proceeding being commenced out of time has already extended the period of time for which the defendant has been deprived of the proceeds of the decision of the Appeal Panel. It has also meant that the defendant has incurred additional cost in obtaining a judgment in respect of the decision of the Appeal Panel and taking steps to attempt to recover money from the plaintiff in respect of that judgment, which the defendant would not have incurred if this proceeding was commenced on time.

(iii) When the plaintiff should have and became aware of the decision

1. [30]

   Mr Gye became aware of the decision of the Appeal Panel on 21 November 2017.

(iv) Any relevant public interest

1. [31]

   No matter of public interest is raised by these proceedings.

(v) Reasons for and length of the delay

1. [32]

   It is the plaintiff’s responsibility to commence a proceeding on time and in the appropriate manner, particularly as he is a solicitor of 40 years standing. He has briefed counsel in at least 50 matters.

2. [33]

   Mr Gye filed his summons seeking judicial review on 29 March 2018. As previously stated, these proceedings should have been instituted by 20 December 2017. As such, they were instituted three months out of time.

3. [34]

   Mr Gye’s reasons for delay are set out in his three affidavits dated 15 July 2018, 12 September 2018 and 21 December 2017. He was briefly cross examined.

4. [35]

   On 6 December 2017, Mr Gye returned from holidays. On that day, he received several messages and correspondence asking him to undertake tests and medical review of a serious nature. These were undertaken during much of the week prior to 6 December 2018.

5. [36]

   On 14 November 2017, he wrote to the Executive Director of the Supreme Court, seeking:

6. [37]

   There is no power for the Executive Director to reopen and commence a full assessment of objections and application for review. The plaintiff’s application was misconceived.

7. [38]

   On 19 December 2017, the plaintiff says that he completed the paperwork to file a review application of the decision of the Appeal Panel. On 21 December 2017, he attended the Supreme Court registry to file his application for review. He had a conversation with a registry clerk, where he was told that he could not file these documents because he had written to the Executive Director. Apparently, he was advised that nothing was able to be done with the file until Prothonotary Kenna had carried out a “review”.

8. [39]

   On 17 January 2018, the Executive Director replied to Mr Gye.

9. [40]

   On 29 January 2018, judgment was entered in proceedings 2018/3028 in respect of the decision of the Appeal Panel.

10. [41]

    On 12 February 2018, a bankruptcy notice addressed to Mr Gye was issued in respect of the judgment.

11. [42]

    From February to March 2018, Mr Gye explained as follows (Aff 15/7/2018 [10]):

12. [43]

    On 5 March 2018, Mr Gye emailed Mr Laughton (Ex 2). It reads:

13. [44]

    On 19 March 2018, a creditor’s petition was filed by Mr Laughton in respect of the bankruptcy notice.

14. [45]

    Despite advising Mr Laughton that he was going to file his summons “this week”, the plaintiff did not do so.

15. [46]

    In my view, the plaintiff’s explanation for delay is unsatisfactory. He had no real excuse for not filing his application for judicial review within the requisite time period. The impetus for the plaintiff to lodge an application for judicial review was to attempt to stave off the impending bankruptcy proceedings.

(vi) Whether Mr Gye has a fairly arguable case

1. [47]

   The plaintiff submitted that he has a fairly arguable case. The defendant submitted that the plaintiff does not have a fairly arguable case.

2. [48]

   The first issue is whether the Appeal Panel provided adequate reasons.

Duty of Appeal Panel to give reasons

1. [49]

   The Appeal Panel’s duty to give reasons for determination is set out in s 380 of the LPA. It reads:

2. [50]

   In BVT v Office of Children’s Guardian [2017] NSWSC 1763 (“BVT”) at [99]-[101], Beech-Jones J made the following observations in relation to the limits of the statutory obligation to provide reasons:

3. [51]

   In Thang Van Pham v NRMA Insurance Limited [2014] NSWCA 22; 66 MVR 152 at [29], Leeming JA stated:

The Appeal Panel’s reasons

1. [52]

   The Appeal Panel in its reasons at 6.8 to 6.20 stated:

2. [53]

   So far as disclosure is concerned, the Appeal Panel had this to say at 7.5 to 7.13:

3. [54]

   The Appeal Panel set aside the determination of costs made by the costs assessor. It determined the application by assessing legal costs in the amount of $43,800 (the same amount as the costs assessor) to be fair and reasonable, and at this amount by reducing the amounts for the hours of work performed and claim in the invoices by 50%, in accordance with clause 2.2.3 of the costs agreement.

4. [55]

   To understand the plaintiff’s grounds of appeal, I include “A” of the statutory disclosure and costs agreement for counsel’s fees. It states:

5. [56]

   Mr Gray of counsel for the plaintiff referred to clause A where it says “the proposed retainer is set out in Item 1”, and Item 1 itself (set out above).

6. [57]

   Ground 1 has been set out more fully earlier in this judgment.

7. [58]

   Counsel for the plaintiff submitted that in the disclosure of estimated costs (clause 3), the barrister says near the middle, “I will notify you from time to time of any significant increase in the then current estimate.” At page 186, the then current estimate was $100,000. There was no evidence that it was ever changed (T30.44-50; T31.1). The Appeal Panel fully addressed this issue at 7.5 to 7.13 of its reasons, which have been set out earlier in this judgment.

8. [59]

   The Appeal Panel disagreed with the costs assessor in respect of his analysis of the disclosure requirements set out in s 310 of the LPA. In brief, the Appeal Panel did disclose rates and basis of charging, the estimate of his costs, when Mr Laughton would render the costs, and referred to clause 3 of the costs agreement where it commences, “I am not prepared to accept a retainer for a fixed sum, and I do not presently know the amount which will be charged by me in the matter.” Nevertheless, the costs estimate provided by Mr Laughton was $100,000 plus GST. By the time he did the last item of work (the draft letter of 13 January 2018) his fees were $93,200 plus GST, that is, $102,520.

9. [60]

   Mr Laughton was required to satisfy and give conclusions in that regard, and the Panel finds that Mr Laughton was not in breach of his disclosure obligations.

Conclusion

1. [61]

   For the reasons explained by the Appeal Panel above, the defendant was not in breach of his disclosure obligations. The Appeal Panel did not make an error of law on the face of the record nor did it make a jurisdictional error.

2. [62]

   Counsel for the plaintiff submitted, in a nutshell, that in a contract retainer between a solicitor and a barrister to “draft documents and appear”, those documents relate to court proceedings for which the barrister will thereafter be retained to appear for the client. “Draft documents and appear” can have no other meaning (T30.3342) (“the nutshell argument”). Judicial grounds 2 and 3 have been set out more fully earlier in this judgment.

3. [63]

   According to counsel for the plaintiff, the work for which this payment was claimed came under the heading of “negotiations”, that is, drafting this letter. Counsel for the plaintiff submitted it is singularly significant that the word "negotiations" nowhere appears in the scope of the retainer at page 186 and, on the contrary, where it does appear in clause 2.2.3 on page 184, it is negotiations about the use of electricity, not about obtaining water. In the plaintiff’s submission, the defendant has clearly demarcated precisely what the cost disclosure is to cover, and what it is not (T31.35-44).

4. [64]

   It is my view that the nutshell argument is not only not fairly arguable, it is wrong. The words in schedule 1 are clear. It reads, “Draft documents and appear on achieving the rights of Hume Weir Trout Farm to obtain water from the Hume Weir or the Murray River; use existing pipeline infrastructure and obtain electricity”. It does not say “Draft court documents”. If the work was only to relate to court documents, Item 1 of the schedule would have included the word “court”. It does not. The word court cannot be read into schedule 1.

5. [65]

   The Appeal Panel disagreed with Mr Gye’s submission that Mr Laughton was specifically briefed to institute proceedings. There were no documents produced to the Appeal Panel to support it, despite the Appeal Panel’s request on 27 July 2017. Mr Laughton’s costs agreement clause 2.2.3 refers to negotiations, and then presumably if not successful, “Possible applications to the Supreme Court of NSW for the declarations of the rights of the Gye companies and applications to the Supreme Court of NSW or the Federal Court about the administrative decisions which are made by the Government authorities” (Appeal Panel’s reasons at 7.11 & 7.12).

6. [66]

   The Appeal Panel has provided adequate reasons in relation the construction of the costs agreement (the nutshell argument). There is no error of law on the face of the record. Nor is there any jurisdictional error. These grounds of judicial review fail.

7. [67]

   Ground 4 of judicial review has been set out more fully earlier in this judgment. It concerns whether the Appeal Panel failed to comply with s 380 of the LPA when it arbitrarily determined the period of 25 hours as reasonable for charges made to a draft letter, when the charges were actually made by the plaintiff.

8. [68]

   At 8.29 to 8.31, the Appeal Panel stated:

9. [69]

   The Appeal Panel referred to the invoices dated 13 January 2016 which record that further substantial work did go into the submissions between 4 December 2015 and 13 January 2016. The Appeal Panel, made up of costs assessors relying on their experience and skill, determined 35 hours could not be justified and determined that 25 hours was reasonable. The Appeal Panel has provided adequate reasons. Not only is this ground of judicial review not fairly arguable, it is wrong. This ground of judicial review fails. The panel did not make an error of law on the face of the record, nor did it make a jurisdictional error.

10. [70]

    The last ground of judicial review is that the Appeal Panel was wrong in law in failing to allow the plaintiff his costs of the assessment of the defendant’s legal costs.

11. [71]

    Section 379 of the LPA provides:

12. [72]

    Mr Gye improved his position slightly, but by less than 15%, and Mr Laughton has somewhat worsened his position. In the circumstances, the Appeal Panel determined that the costs of the review were to be shared by the parties equally.

13. [73]

    The Appeal Panel stated that Mr Gye improved his position, but by less than 15%. Therefore s 379(3) does not apply. It also stated that Mr Laughton had somewhat worsened his position. In these circumstances, the Appeal Panel determined in accordance with s 379(4) that the costs were to be shared by the parties equally. There is no error of law on the face of the record, nor is there a jurisdictional error. This ground of judicial review fails.

Conclusion – Leave to appeal

1. [74]

   So far as leave to appeal is concerned, in challenging the Appeal Panel’s decision, the plaintiff had a modest financial burden to pay $19,620.07. The defendant suffered additional delay in receiving the proceeds of the decision of the Appeal Panel, and incurred expense in proceedings to bankrupt the plaintiff. The plaintiff became aware of the decision on 21 November 2017. There is no public interest raised by these proceedings. There is also no explanation as to why the plaintiff did not pursue an appeal in the District Court. However, during the time period in which he might have filed his summons for judicial review, he misguidedly wrote to the Executive Director of the Supreme Court requesting that his application for review be reopened and a full assessment be carried out. It should have been clear to an experienced practitioner that the Executive Director could not review a decision of an Appeal Panel.

2. [75]

   In my view, there was no real explanation for failing to initiate an application for judicial review within the requisite time period. Rather, it is apparent that the plaintiff was attempting to stave off bankruptcy proceedings, as set out in his letter to the defendant dated 5 March 2018. As to whether the plaintiff has an arguable case, I have briefly considered the grounds of judicial review and concluded they cannot succeed. In these circumstances and in the exercise of my discretion, the interests of justice favour leave being refused. I make an order that leave to extend time to commence proceedings for judicial review is refused.

3. [76]

   Finally, if I am wrong, the final consideration to be taken into account is a discretionary factor.

Discretionary factor

1. [77]

   Counsel for the defendant submitted, consistent with the observations at [25] of Basten JA (with whom Beazley P relevantly agreed) in Wende v Horwath (NSW) Pty Limited [2014] NSWCA 170:

2. [78]

   Counsel for the plaintiff submitted that Parliament has provided in s 69 of the Supreme Court Act 1970 (NSW) that any person has a free choice between the two. At the relevant time that Mr Gye initiated his application for judicial review, he did not have a right to appeal to the District Court. The reason that he did not have a right to appeal was that he let the time period for the appeal expire.

3. [79]

   There are no proceedings on foot in either the District Court or this Court, so there was no abuse of process. There was no reason given for not commencing an appeal in the District Court, and in the exercise of discretion, this provides yet another reason for relief on the basis that the statutory appeal right should have been exercised in the District Court.

Costs

1. [80]

   Costs are discretionary. Costs usually follow the event. The plaintiff is to pay the defendant’s costs on an ordinary basis.

2. [81]

   I also make an order that in these proceedings, the sum of $19,620.07 that was paid into Court by the plaintiff (together with interest accrued) be paid out to the defendant.