Bevan v Bingham

This judgment initially involved an appeal from a costs order made by Bellew J on 7 February 2023. There has been a sad history of litigation between the parties. This judgment is confined to the issue of the costs of this appeal.

At the outset of the hearing before me, the plaintiff’s counsel advised that the plaintiff would discontinue the appeal or in the alternative, that the appeal should be dismissed. I made an order that the appeal be dismissed as that was the preferable course because it means that this appeal could not be relitigated. Therefore, the only argument was one as to costs of the proceedings. These are my reasons for my decision.

The plaintiff is Christopher John Bevan (Mr. Bevan). He is a practicing barrister. The first defendant is John David Bingham (Mr. Bingham). He is a practicing solicitor. The second defendant is Marilyn Filewood and the third defendant is Kerry Ross-Jones, the second and third defendants constituted the Costs Review Panel. They have filed submitting appearances except as to costs. The plaintiff was represented D Robertson of counsel. The first defendant was represented D Robinson and M Hazan of counsel.

Mr. Bevan seeks that there be no order as to costs such that each party pay their own costs of the appeal. Mr. Bingham seeks that Mr. Bevan pay his costs of the appeal until 20 June 2024 on an ordinary basis and as of 21 June 2024 on an indemnity basis.

On 7 February 2023 Bellew J in Bevan v Bingham & Ors [2023] NSWSC 19 (the Bellew J proceedings) made a costs order flowing from an appeal of a Costs Review Panel. The costs order was that Mr. Bevan, a barrister in those proceedings, pay the costs of the defendants as agreed or assessed.

In the Bellew J proceedings, the plaintiff was Mr. Bevan. The first defendant was Mr. Bingham. The second defendant was Angelina Francesca Kessly (Ms. Kessly). She was the client of the Mr. Bingham, as solicitor, Mr. Bevan was retained as counsel. Both Mr. Bevan and Mr. Bingham acted for Ms. Kessly in bankruptcy proceedings. She was self-represented at the hearing before Bellew J. The third defendant was John Anthony Livingston. The fourth defendant was Francesca Alexandra Hutley. The third and fourth defendants, who collectively constituted the Review Panel (the Review Panel), filed submitting appearances.

On 17 November 2023, costs assessor Maurice Castagnet (the Costs Assessor) issued two Certificates of Determination:

On 19 April 2024, the Review Panel affirmed the Costs Assessor’s determination under ss 70 and 71 of the Legal Profession Uniform Law Application Act 2014 (NSW) (the Application Act).

On 30 May 2024, the Review Panel issued two further certificates, being a Certificate of Determination of Review in the amount of $2,200, and a Certificate of Determination of Review Panel Costs in the amount of $6,688.00. Those certificates were sent by the Manager, Costs Assessment to the parties.

On 31 May 2024, Mr. Bevan filed his summons commencing the current appeal in these proceedings.

On 28 June 2024, Mr. Bingham wrote to Mr. Bevan’s solicitors to advise that he objected to the competency of the appeal as the amount of costs in dispute was less than $100,000. The correspondence invited Mr. Bevan to consent to orders dismissing the appeal, failing which Mr. Bingham would file a motion seeking to dismiss the proceedings on the basis that they were incompetent.

On 2 July 2024, Mr. Bingham filed a notice of motion objecting to the competency of the proceedings.

On 26 July 2024, Mr. Bevan filed an amended summons, seeking that leave to appeal be granted, and in the alternative, an order transferring the proceedings to the District Court of New South Wales. Mr. Bevan is no longer seeking to have these proceedings be transferred to the District Court.

On 16 September 2019 Mr. Bevan and Mr. Bingham entered into a costs agreement and retainer that included the following relevant clauses:

In Davidson v Seachange Living NSW Pty Ltd [2023] NSWSC 292 at [50]-[51], I said:

So far as leave to appeal is concerned, Mr. Bingham submitted that no issues of principle in respect of the assessment of costs arise with respect to the subject matter of Mr. Bevan’s amended summons, nor do they raise any point of public importance.

This appeal does not raise any issue of principle or question of public importance. The only basis upon which leave could have been granted to Mr. Bevan is if there was an injustice that goes beyond what is arguable.

Mr Bingham submitted that the amount of costs in dispute in these proceedings is, at its highest, is the sum of $88,505, and having regard to Mr. Bevan’s concession that,

The plaintiff’s written submissions do not address why leave ought to be granted. Mr. Bevan maintained his position that the costs are $126,443.46.

The requirement for leave to appeal depends upon the operation of s 127 of the District Court Act 1973 (NSW), which relevantly states:

The jurisprudential discretion regarding appeals under $100,000 is well settled. Mr. Bingham also submitted that leave under s 89 of the Application Act ought not to be granted.

Mr. Bingham further submitted that no order should be made transferring the proceedings to the District Court on the basis that the appeal lacked merit. It is true that Mr Bevan could have commenced the appeal, as of right, in the District Court, however that is no longer the issue.

In Amirbeaggi v EB [2023] NSWCA 108 (Amirbeaggi), after setting out the statutory framework, Basten JA (with whom Kirk JA and Simpson AJA agreed) said,

It is my view the amount of costs in dispute in this Appeal is $88,505.00 Therefore, the plaintiff requires leave to appeal the determination of the Review Panel.

The central point of contention in this appeal was the issue of the indemnity principle. On the facts which are not in dispute, the indemnity principle is covered by binding authority. The remaining issues raised by Mr. Bevan fell well within the parameters of the discretion of the Review Panel.

Mr. Bevan accepts that there is no longer any issue in respect of the indemnity principle, that issue having been cured by Mr. Bingham’s late payment of the costs that are the subject of this appeal.

That being the case, Mr. Bevan accepts that grounds 1, 2, 4, 7, 8 and 9 of the Amended Summons cannot succeed.

The plaintiff had not provided any reasons as to why leave should be granted in circumstances where the costs were under $100,000.

It is my view that Mr. Bevan commenced the proceedings in the wrong jurisdiction as the amount in dispute is $88,505. This is below the $100,000 threshold so there is no right of appeal to this court as set in Amirbeaggi. However, Mr. Bevan explained that there was a change in circumstances after he filed a notice of appeal and an amended notice of appeal.

The indemnity principle does not require that the costs have been paid, but it does require that there be a legal liability to pay costs: Wentworth v Rogers [2006] NSWCA 145; (2006) 66 NSWLR 474 (Wentworth v Rogers) at [126]; Foundas v Arambatzis (No 4) [2023] NSWSC 1648 at [151]. There is not only a clear legal liability for Mr. Bingham to pay the costs, but in any event they have now already been fully paid by him (Monteith Affidavit sworn 2 August 2024 at [8]). The fact that the sum in dispute has now been paid is common ground. Mr. Bevan as applicant filed an application for costs assessment against the respondent on 6 June 2023.

If I am wrong, I will briefly address as to whether Mr. Bevan’s grounds of Appeal demonstrated an injustice in that it goes beyond what is arguable.

On 17 November 2023 the Costs Assessor addressed the indemnity principle in his reasons and he stated,

On 19 April 2024, the Review Panel also gave their reasons why the assessor did not make an error regarding the indemnity principle. The Review Panel relevantly stated its reasons for determination,

Mr Bevan’s argument that “where a contract that is intended to comply with a statutory regime for that class of contracts fails to comply with that statutory regime, there is no contract at all in existence for the purposes of common law contractual principles”, ought to be rejected for the reasons set out in Bolton v Atanaskovic Hartnell [2024] NSWSC 833 (Bolton). There, at [66]-[89] Faulkner J said,

Associated third party payer (ATPP) is defined in s 171 of the Legal Professional Uniform Law (NSW). (LPUL).

What order should be made as to costs of this appeal? Mr. Bevan submits that there should be no order as to the costs of the appeal, with the effect that each party bears their own costs. Mr. Bingham seeks his costs of the appeal.

The starting point is s 98 of the Civil Procedure Act 2005 (NSW). It relevantly reads,

Rules 42.1 and 42.15A of the Uniform Civil Procedure Rules 2005 (UCPR) are relevant. They read,

Mr. Bevan submitted that it was appropriate that there be no order as to costs in circumstances where:

Where a plaintiff discontinues proceedings, the Court retains the discretion to not make any order as to costs, with the effect that each party bears their own costs. One circumstance where it may be appropriate to exercise the costs discretion is where the plaintiff has acted reasonably in commencing the proceedings and there is a subsequent change in circumstances which makes it reasonable for the plaintiff to discontinue the proceedings: see Newcastle Walisend Coal Co Pty Ltd v Industrial Relations Commission (NSW) [2006] NSWCA 129 at [21]-[26] and [38]-[39]; see also Bingham v Bevan [2024] NSWSC 1045 at [62]-[69].

The facts of the present Appeal before this Court are very similar to those in Bingham v Bevan [2024] NSWSC 1045, (the Rothman J decision) was to make no order as to costs in circumstances where Mr Bingham had commenced proceedings against Mr. Bevan, and where during the proceedings there were some related legal controversies which were resolved and which had the effect of rendering the proceedings otiose. In these circumstances, Rothman J decided that each party should bear their own costs of the proceedings.

Similarly, in the present case Mr. Bevan acted reasonably in commencing his appeal of the Review Panel’s determination. However, since the commencement of the appeal there has been a material change in circumstances: namely, the late payment by the first defendant of the costs the subject of the appeal, which has cured the indemnity principle problem that was the primary challenge to the costs determinations. The indemnity principle issue was the main issue of law raised by the appeal which warranted the grant of leave to appeal, which raised for the first time the issue of whether a costs agreement purportedly made under the Uniform Law but to which the Uniform Law did not apply nevertheless satisfied the indemnity principle in a party-party Costs Assessment. Now that issue been resolved, and acting reasonably as an officer of the court, the plaintiff recognises that the remaining matters in dispute would not warrant the Court granting leave to appeal and would not warrant him further prosecuting his appeal. That being the case, the plaintiff has taken the reasonable course of seeking to have the proceedings discontinued or alternatively dismissed. In those circumstances, the Court should not make any order as to costs, with the effect that each party bears their own costs of the proceedings.

On 8 May 2024, he registered the certificates of determination of the Costs Assessor and Review Panel as judgments of the Local Court as he was entitled to do pursuant to r 36.10 of the UCPR, crystalising his entitlement to post judgment interest.

On 31 May 2024, Mr. Bevan filed his summons commencing the appeal in these proceedings.

On 20 June 2024, a solicitor for Mr. Bingham sent a Calderbank offer to Mr. Bevan. Mr. Bingham offered to accept the sum of $100,000 in full and final settlement of his entitlement to the certificates. The letter continued,

Mr. Bevan did not reply to the Calderbank letter.

Mr Bingham seeks his costs of the proceedings until 20 June 2024 (the serving of the Calderbank offer) on a normal basis and as of 21 June 2024 on an indemnity basis. In oral submissions, counsel for Mr Bingham stated, “That leaves then the consideration of the Calderbank letter against that background for which we seek indemnity costs from that date.” (T20 [30])

On 26 July 2024, Mr. Bingham received funds which he applied in satisfaction of the judgments registered from the certificates of the Costs Assessor and Review Panel.

On 12 August 2024, Mr. Bevan filed his written submissions which consisted of 27 pages. He pressed all of the 11 grounds of appeal and further argued that he did not need leave of the Court to continue the prosecution of his summons. As set out earlier and addressed in this judgment Mr. Bevan claimed that $126,443 was in issue in the appeal. This was his principal submission on the grant of leave.

On 20 June 2024, Mr. Bingham sent a Calderbank offer to Mr. Bevan, the terms of which were set out above.

In Cat Media Pty Ltd v Allianz Australia Insurance Ltd [2006] NSWSC 790, Bergin J at [9] confirmed the relevant principles in relation to Calderbank offers by reference to Leichhardt Municipal Council v Green [2004] NSWCA 341. Her Honour stated that the costs consequences attendant under the general law upon an offer of compromise made in a Calderbank letter are in the court’s discretion, to be exercised having regard to all of the relevant circumstances of the case. Firstly, there is not a prima facie presumption in favour of an award for indemnity costs if the Calderbank offer is not accepted and is not bettered; secondly, a Calderbank offer that has no real element of compromise in it, which is designed merely to trigger costs sanctions, will not be treated as a genuine offer of compromise; thirdly, there is no rule that an optimistic offer is not a genuine offer. Whether or not it was reasonable to reject an offer is a question that may figure in the discretionary balance, but it is not a question which affects the genuineness of the offer; and fourthly, an applicant for an order for indemnity costs consequent upon an unaccepted Calderbank offer must show that the rejection of the offer was unreasonable. Thus, the questions for the court are (a) whether the offer was a genuine offer of compromise; and (b) whether it was unreasonable for the recipient of the offer not to accept the offer: see Miwa Pty Ltd v Siantan Properties Pty Ltd (No. 2) [2011] NSWCA 344 at [8].

It is my view that the offer was a genuine offer of compromise and it was unreasonable for Mr. Bevan not to accept the offer.

The usual order upon dismissal is that the plaintiff pays the defendant’s costs: r 42.20 UCPR.

In Fordyce v Fordham & Anor (2006) 67 NSWLR 497, a case concerning an umbrella tree, Santow JA observed at [3]:

In support of departing from the usual order as to costs, Mr. Bevan argued two matters:

As was stated by the Court of Appeal in Wentworth v Rogers at [126]

The actual payment by Mr. Bingham of costs for which he had a liability is not a relevant consideration in the Court’s determination of whether the indemnity principle has been breached. At the time of the assessment there was either a legal liability in existence or there was not. Whether or not there has been a payment by Mr. Bingham does not resolve the relevant inquiry. If Mr. Bingham has paid an amount that was not owed, then that is simply a gratuitous payment and Mr. Bevan would not need to reimburse Mr. Bingham for that payment. It must be noted here that it was found by each of the Costs Assessor and the Review Panel that Mr. Bingham had a clear contractual liability to pay his own legal costs. It is therefore untenable for Mr. Bevan to argue that he has sought to discontinue the proceedings only by reason of the intervention of some supervening event, the actual payment Mr. Bingham of his liability.

Put simply, Mr. Bevan, since his application for assessment, has always maintained that the indemnity principle had been breached. Both the Costs Assessor and Review Panel found that it had not. Mr. Bevan nonetheless pursued the appeal to this Court, which he now abandons. By reason of Wentworth v Rogers at [126], the argument advanced by Mr. Bevan is contrary to binding authority.

Mr. Bevan always required leave to commence this appeal, as he accepted at [2] of his reply to submissions. Mr. Bevan’s position is that his ground of appeal concerning the indemnity principle was the only ground of appeal which warranted a grant for leave. There was nothing novel about the application of the indemnity principle to a liability incurred but not yet paid. The case of Wentworth v Rogers puts the matter beyond doubt. The proceedings should never have been commenced in this Court, when Mr. Bevan had an appeal, as of right, to the District Court pursuant to s 89(1)(a) of the Application Act.

On 24 June 2024, Mr Bingham made an offer of compromise to Mr. Bevan. As I have already set out, I find that the offer was a genuine offer of compromise and it was unreasonable for Mr. Bevan to not accept the offer of compromise. Therefore, from 21 June 2024, Mr. Bevan is liable to pay costs on a indemnity basis.

On 28 June 2024, Mr. Bingham invited Mr. Bevan to consent to orders dismissing his appeal on the basis that each party pay their own costs. That offer was rejected. Instead, Mr. Bevan filed an amended notice of appeal and in excess of 700 pages of documents annexed to his affidavit of 19 July 2024 or otherwise contained in the plaintiff’s tender bundle.

On 24 July 2024, the Registrar ordered that Mr. Bevan notify Mr. Bingham, by 29 July 2024 as to the pages of Mr. Bevan’s tender bundle to be relied upon in support of the grounds of Appeal. The written notification provided by Mr. Bevan confirmed that he relied on the majority of the bundle.

Mr. Bevan has not acted reasonably in commencing or continuing his appeal in the face of an invitation from Mr. Bingham to consent to the appeal being dismissed with no order as to costs or taking up the Calderbank offer. Paragraph [15] of Mr. Bevan’s 3 September 2024 affidavit is the foundation for his excuse as to why the proceedings were brought. That cannot be accepted as the funds that were applied to the judgments were first received on 26 July 2024, two months after the commencement of these proceedings. It is disingenuous to now submit that the proceedings would not have been commenced had Mr. Bevan known the funds had been received. It is also contrary to Mr Bevan’s email of 7 May 2024 (PTB p679).

Mr. Bevan has instead caused Mr. Bingham to incur costs in considering and responding to the plethora of material he sought to put before the Court. A corresponding approach was taken by Mr. Bevan in the actual proceedings in which the costs order was made.

Although the passage from the actual proceeding is lengthy, it is instructive. It is set out here for ease of reference. Justice Bellew stated at [2]-[8]:

When considering a departure from the ordinary rule, the Court should have regard to the purpose, rationale and principles of fairness which inform that rule. In particular, the award of costs should reflect the relative responsibilities of the parties for the incurring of costs. In Commonwealth of Australia v Gretton [2008] NSWCA 117 at [121], Hodgson JA (with whom Mason P agreed) observed that:

The onus lies on the unsuccessful party to demonstrate a basis for departing from the usual rule: Waterman v Gerling Australia Insurance Co Pty Ltd (No 2) [2005] NSWSC 1111 at [101].

By reason of the matters set out above, there is no basis to depart from the ordinary rule that Mr. Bevan pay Mr. Bingham’s costs of these proceedings.

It is my view that Mr Bevan incorrectly commenced these proceedings in this court rather than the District Court. These proceedings were bound to fail in this Court. If the Appeal was transferred to the District Court, I consider that they would have similarly failed there.

Even though Mr Bevan did not provide any reasons as to why leave should be granted, applying the test for leave to appeal (set out earlier in this judgment) leave would not be granted as the grounds of appeal had little merit.

Further, both the Costs Assessor and the Review Panel gave reasons as to why Mr Bevan’s submissions on the indemnity principle failed. Those reasons are uncontroversial. It is clear the appeal would have failed even if Mr Bevan had not been paid in full due to the terms of the retainer.

Further, Mr Bevan unreasonably rejected a Calderbank offer dated 20 June 2024 as it represented a 20% deduction of the monies, he was liable to pay.

Since the Rothman J decision and in his Appeal before me, Mr Bevan relied mostly on irrelevant documents and submissions. Further, On 24 July 2024, the Registrar directed Mr Bevan to notify Mr Bingham as to the pages of Mr Bevan’s tender bundle to be relied upon in support of the grounds of appeal. Mr Bevan’s reliance on voluminous and irrelevant materials had previously been the subject of criticism by Bellew J.

Despite the previous criticism by Bellew J of Mr Bevan’s approach to his Appeal dealing with costs and the subsequent direction of the Registrar in this current Costs Appeal, Mr Bevan did not take heed of either. As a result, Mr Bingham had to incur additional costs in preparing to meet the grounds of appeal and considering and addressing the voluminous material. I find that Mr Bevan’s conduct has been unreasonable. The application for leave to Appeal and the Appeal itself were always doomed to fail. The law as to indemnity costs was well settled. Mr bevan was unsuccessful both before the Costs Assessor and the review Panel. In the exercise of my discretion and in these circumstances I make an order that Mr. Bevan pay Mr. Bingham’s costs.

At the hearing before me that took place on 6 September 2024, I ordered that the appeal be dismissed. I now order that the plaintiff pay the defendant’s costs on an ordinary basis up until 20 June 2024 and from 21 June 2024 on an indemnity basis, including the costs of the defendant’s Notice of Motion filed on 2 June 2024. Even if the Appeal was discontinued, I would have exercised my discretion to make an otherwise order. Rather than having yet another round of costs assessment and possible review by the Review Panel, the parties would be best served by attempting to settle the quantum of costs. I understand that Mr. Bevan took no issue on appeal,