Vincent Francis Stanizzo v Karina Vivianna Fregnan

1. [1]

   By summons filed on 14 October 2019, Vincent Francis Stanizzo, the plaintiff, seeks leave to appeal a decision of the Costs Assessment Review Panel dated 3 December 2018 under s 89 of the Legal Profession Uniform Law Application Act 2014 (“LPULAA”). The assessment pertained to cost orders made against Mr Stanizzo by the Court of Appeal on 22 September 2016: Fregnan v Stanizzo [2016] NSWCA 264. Ms Fregnan was the successful party in the Court of Appeal and is the defendant in the proceedings before me.

2. [2]

   The background to the Court of Appeal decision is that in April 2012 Ms Fregnan commenced proceedings in the District Court against Mr Stanizzo, her then solicitor, claiming damages arising out of allegations of sexual assault and false imprisonment in 2008 and 2009. In the same proceedings, Mr Stanizzo filed a cross-claim against Ms Fregnan for malicious prosecution.

3. [3]

   On 3 December 2015, Judge Olsson SC summarily dismissed the District Court proceedings on the application of Mr Stanizzo. The proceedings were dismissed on the basis that Ms Fregnan had not provided particulars in a timely manner. On 11 December 2015, her Honour ordered Ms Fregnan to pay Mr Stanizzo’s costs of the proceedings, including the notice of motion, on an indemnity basis.

4. [4]

   Ms Fregnan appealed against the decision of Judge Olsson to the Court of Appeal. She was initially unrepresented but then briefed Mr Ashok Kumar of counsel to appear for her on a direct access basis. The appeal was heard on 29 August 2016. The court reserved its decision and delivered its judgment on 22 September 2016 quashing the decision of Judge Olsson. Relevantly, the following two costs orders were made that day:

   1. (1)

      Dismiss Mr Stanizzo’s Notice of Motion dated 19 October 2015 and order him to pay Ms Fregnan’s costs of that Motion on an indemnity basis.

   2. (2)

      Order Mr Stanizzo to pay Ms Fregnan’s costs of the proceedings in this Court.

5. [5]

   It is the ongoing dispute as to the reasonable amount of costs owed by Mr Stanizzo to Ms Fregnan under these two orders which forms the basis of Mr Stanizzo’s appeal.

6. [6]

   It is to be noted that, following the decision of the Court of Appeal, the District Court proceedings were transferred to this Court on 13 March 2017. The final hearing was conducted before Harrison J on 12, 13, 14, 15, 18, 19, 20, 21 and 22 February, 16, 20, 24, 27, 28 and 29 May, 3, 4, 7, 13, and 25 June 2019 and 28 February 2020.

7. [7]

   On 30 April 2020, his Honour gave judgment for Ms Fregnan on her claim in the amount of $135,000, judgment for Ms Fregnan on the cross-claim and ordered Mr Stanizzo to pay Ms Fregnan’s costs of the proceedings: Fregnan v Stanizzo; Stanizzo v Badarne; Stanizzo v State of New South Wales [2020] NSWSC 402. At [6] of his Honour’s judgment, after setting out the issues for determination, his Honour described the state of the relationship between Mr Stanizzo and Ms Fregnan as “frankly poisonous” and went on to observe that:

8. [8]

   Having regard to the material before me on this appeal, I am in a position to agree with these observations by his Honour.

9. [9]

   The costs dispute, the subject of this appeal, has already been through an Assessor and a Costs Review Panel. Every issue is in dispute and every paragraph of the reasons of the Review Panel is the subject of a ground of appeal. Mr Stanizzo’s position is that he should not be required to pay any of Ms Fregnan’s legal costs because of his belief that Mr Kumar and the solicitor who represented Ms Fregnan for the Notice of Motion in the District Court, were acting on a strictly pro bono basis and have conspired against him by fraudulently claiming for legal costs they never expected to be paid. Mr Stanizzo made this allegation of fraud before the Assessor, the Review Panel and in this Court. It is to be noted that the allegations of fraud are made against two persons who are not parties to this appeal: Mr Kumar and Mr Donnelly. Mr Kumar is now deceased and Mr Donnelly no longer practices as a legal practitioner: Council of the Law Society of NSW v Donnelly [2017] NSWCATOD 34.

10. [10]

    Mr Stanizzo has been represented at all times by Mr Rollinson of counsel with himself as instructor. Ms Fregnan has been unable to afford legal representation and has appeared for herself in relation to the costs disputes, of which, it emerged during the hearing, there are apparently many.

11. [11]

    At the hearing of this appeal, Ms Fregnan informed me that she suffers from Post Traumatic Shock Syndrome (PTSD). A symptom of this, she explained, was that if she did not say something as soon as she thought of it she would forget it. The practical result of this, it emerged, was that Ms Fregnan was prone to interrupt when either counsel or I was speaking. In addition, it made it difficult for her to respond to some of my questions.

12. [12]

    Ms Fregnan’s submissions were directed at allegations of poor conduct by Mr Stanizzo and his counsel. Although she was unable to answer some of my questions responsively, I am satisfied that this was because of her concern to put certain matters before the Court rather than because she was unable to answer the question. The simple fact is that Ms Fregnan has been involved in so many court appearances since this litigation commenced that it is perhaps understandable that she was unable to recall many of the procedural details. I am ultimately satisfied that Ms Fregnan was able to put her arguments to me in a manner in which I was able to understand them.

13. [13]

    At the commencement of the hearing, in response to a question by me, Mr Rollinson indicated that the appeal was brought under s 89 of the LPULAA. Although no significant court time was spent on this jurisdictional issue, it seems to me that the issue is not as straightforward as was suggested at the hearing. This is because the statutory regime governing appeals from costs assessments in NSW has had a relatively complex history.

14. [14]

    Under the Legal Profession Act 1987 (NSW), there was appeal by leave to the Supreme Court for practitioner/client costs or to the court or tribunal that had ordered costs for party-party assessments: s208M. An appeal also lay to the Supreme Court for an error of law: s208L.

15. [15]

    The Legal Profession Act 1987 was replaced by the Legal Profession Act 2004 (NSW) (“LPA”) which maintained a similar system for appeals in ss 384-385; namely, there was an appeal by right for an error of law to the Supreme Court. Appeal by leave was permitted for client/practitioner costs to the Supreme Court and ordered costs were appealed by leave to the court or tribunal that made the order. In 2008, Schedule 14 of the Courts and Crimes Legislation Amendment Act 2008 (NSW) changed the references in ss 384-385 from the Supreme Court to the District Court (see [1]-[3]).

16. [16]

    The LPULAA commenced on 1 July 2015 and again altered the appeal regime. Appeals on matters of law remained with the District Court. Further, re-hearings with fresh or additional evidence were heard in the District Court with leave.

17. [17]

    Only five months after the LPULAA was enacted, further changes were made to the appeal regime in NSW with the enactment of the Courts and Other Justice Portfolio Legislation Amendment Act 2015 (NSW) on 23 November 2015. That change resulted in the current appeal provision being s 89 of the LPULAA, which is in these terms:

18. [18]

    The amendment made in November 2015 was in response to the recommendations made by Brereton J in the Report of the Chief Justice’s Review of the Costs Assessment Scheme (12 March 2013) (“the Report”). The Report noted that the provisions in the LPA were “complex and confusing”, especially in relation to the distinction between appeals requiring the applicant to show an error of law and those requiring leave. The review was also critical of the removal of the Supreme Court’s traditional supervisory jurisdiction over appeals from costs assessments under the LPULAA. As such, the Report recommended that (footnotes omitted):

19. [19]

    There are two threshold questions for consideration in this matter. First, is s 89 the correct appeal provision for both costs orders; and, if so, is this a matter in which leave ought to be granted to bring this appeal to the Supreme Court rather than the District Court given that the amount involved is below $100,000.

20. [20]

    Dealing with the question of the relevant appeal provision first, on the face of it, s 89 of the LPULAA would appear to be the relevant provision under which to bring this appeal. Furthermore, the relevant transitional provision is reg 59 of the Legal Profession Uniform Law Application Regulation 2015 (NSW) which provides the following:

21. [21]

    The District Court proceedings were commenced in April 2012. The Court of Appeal proceedings were commenced on 22 March 2016. The Court of Appeal made two separate costs orders on 22 September 2016: that Mr Stanizzo pay the costs of the appeal to the Court of Appeal and also that he pay Ms Fregnan’s costs of the Notice of Motion in the District Court on an indemnity basis

22. [22]

    Having regard to reg 59, the LPA appeal scheme continues to apply to ordered costs where the “proceedings” to which the costs relate were commenced before 1 July 2015. This raises the question of which were the relevant “proceedings” to which the order that Mr Stanizzo pay Ms Fregnan’s costs of the District Court Motion relate. If the relevant “proceedings” are the District Court proceedings then that order is still governed by the LPA because the District Court proceedings were commenced in 2012. On the other hand, if both costs orders relate to the Court of Appeal proceedings then the relevant appeal regime is under the LPULAA. I have been unable to find any decision concerned with the approach to be taken under reg 59 of the Regulation when an appellate court orders that costs be paid both in relation to its proceedings and in relation to proceedings in the court below. There are, however, a number of Court of Appeal decisions in which the question of the applicable appeal regime has been considered.

23. [23]

    In Voicu v Owners-Strata Plan No 1624 [2020] NSWSC 296 (“Voicu”) proceedings were commenced on 5 June 2015 in the Local Court and then appealed to the District Court by summons on 16 October 2015. Costs were the subject of several assessments, which were then appealed during 2018-2019. An application for judicial review was then brought to the Court of Appeal against a decision of the Manager of Costs Assessment refusing to extend the time for which a further review could be sought.

24. [24]

    Basten JA held that the relevant proceedings to which the costs related were the two notices of motion filed after the dismissal of the proceedings in the District Court. As such, the relevant “proceedings” was the summons filed on 16 October 2015, rather than the original originating process filed on 5 June 2015. As such, the applicable legislation was the LPULAA.

25. [25]

    The question of whether the wrong assessment scheme was applied was considered by the Court of Appeal in Ferella v Stomo [2017] NSWCA 268. In that matter the applicants had sought judicial review of a decision of the District Court relating to a costs assessment carried out for costs orders made in the Supreme Court and the Court of Appeal in March and November 2014. White JA found that the LPA scheme for appeals applied by virtue of reg 59. His Honour went on to make the following comment as to the relative similarity of the two provisions at [33] as follows:

26. [26]

    In a separate judgment, Sackville AJA commented that:

27. [27]

    Although it is to be accepted that there is little difference between the schemes, the distinction is a significant one in the present matter given the changes made to the regime at relevant times during the procedural history of the primary proceedings in this matter.

28. [28]

    As will be seen below, both the Costs Assessor and the Review Panel proceeded on the basis that the LPULAA applied to both of the costs orders because the Court of Appeal proceedings were commenced after 1 July 2015.

29. [29]

    It seems to me that there is some doubt as to whether the costs order that Mr Stanizzo pay Ms Fregnan’s costs for the District Court Notice of Motion is in fact an order in which the “proceedings” to which the costs relate commenced before 1 July 2015 (as per reg 59) but I propose to proceed on the basis that s 89 of the LPULAA applies for three reasons. First, both the Assessor and the Review Panel have proceeded on the basis that the LPULAA applied and no point has ever been taken as to that approach; secondly, the relevant costs orders were both made by the Court of Appeal and the proceedings in that court were commenced after 1 July 2015; and thirdly, there is support for the approach I have taken to be found in the decision of Basten JA in Voicu.

30. [30]

    For these reasons, although the matter is not straightforward, I am satisfied I have jurisdiction to hear this appeal. In doing so, I make the observation that reg 59 does not appear to have been drafted with the contemplation that costs orders might be made in relation to more than one “proceedings” at the same time.

31. [31]

    The next question is whether I would grant leave to bring the appeal. The effect of s 89(1) of the LPULAA is that a party to a costs assessment that has been the subject of a review by the Review Panel has four options on appeal:

    1. (1)

       To the District Court, as of right if the amount of the costs in the dispute is over $25,000 but under $100.000;

    2. (2)

       To the District Court, but only with the leave of the Court if the amount of costs in dispute is less than $25.000;

    3. (3)

       To the Supreme Court, as of right if the amount of the costs in the dispute is over $100.000;

    4. (4)

       To the Supreme Court, but only with the leave of the Court if the amount of costs in dispute is less than $100.000.

32. [32]

    Two certificates of determination were issued by the Review Panel: a Certificate of Determination of Review in the amount of $37,963.93 (inclusive of filing fees) and a Certificate of Determination of Review Panel Costs in the amount of $8,036.88 (half of which to be paid by Mr Stanizzo). Mr Stanizzo had an appeal as of right to the District Court. He did not appeal to the District Court. Rather, he appealed to this Court and requires leave to do so.

33. [33]

    No authorities were provided by Mr Rollinson as to what discretionary factors are relevant to the consideration of whether leave should be granted to appeal to the Supreme Court rather than to the District Court. Ms Fregnan did not address the issue in her written submissions and I did not invite her to do so at the hearing.

34. [34]

    Although I have found no authority directly on point, I note that the following was stated in the Report on this issue at 5.3.8:

35. [35]

    At 5.3.4, the Report also indicated that the principles for granting leave were outlined by Fitzgerald JA in Chapmans Ltd v Yandell [1999] NSWCA 361 at [12] in relation to the appeal regime in place at that time. In that case his Honour observed that:

36. [36]

    Recently, in Gazecki v McCabes Lawyers Pty Ltd [2020] NSWCA 98, Basten JA (with whom Leeming JA and Simpson AJA agreed) cast doubt as to whether courts applying s 89 of the LPULAA should apply principles from decisions under the previous appeal regimes. After discussing the history of the provisions preceding s 89, his Honour noted at [43]

37. [37]

    I am satisfied that no questions of law arise in the present matter nor any particular matter of principle. No other reason was identified as one warranting leave to appeal to this Court when an appeal lay as of right to the District Court. Despite the fact that Mr Stanizzo put forward no cogent basis for leave being granted in this matter, I am prepared to grant leave to appeal to this Court in this matter for three reasons. First, as a matter of procedural fairness, this was not a matter that was addressed at the hearing. Secondly, the unfortunate and protracted principal proceedings were heard in this Court. This provides some jurisdictional nexus with this Court. Thirdly, serious allegations are made by Mr Stanizzo as part of this appeal.

38. [38]

    In being satisfied that leave should be granted in the circumstances of this case, I wish to make it clear that just because principal proceedings are heard in this Court does not mean that leave would inevitably be granted to appeal a costs decision of a Review Panel concerning a costs order made in this Court; I am simply satisfied that the interests of justice warrant it in this case.

39. [39]

    On 7 April 2017, Ms Fregnan filed an application for assessment of party/party costs following the Court of Appeal costs order. She did so without the assistance of a lawyer and it is common ground that she did not provide a copy of the bill to Mr Stanizzo before she did so.

40. [40]

    The assessment of ordered costs is provided for under Divisions 2 and 3 of the LPULAA. Applications for costs orders can be made by persons liable to pay or receive such costs or as referred by a court or tribunal: s 74. The costs assessor is to have regard to what is fair and reasonable: s 76.

41. [41]

    After the application was received, the Assessor, Mr McIntyre, wrote to Mr Stanizzo inviting submissions which he subsequently supplied. He also made other inquiries, as set out in his reasons.

42. [42]

    Ms Fregnan put in bills totalling $212,527.85. This amount was significantly reduced by the Assessor. On 4 October 2017, he issued a Certificate of Determination of Costs under ss 70, 78 of the LPULAA headed:

43. [43]

    The amounts determined by the Assessor are as follows:

    1. (1)

       Amount of costs assessed (inclusive of any GST component allowed) $44,728.36;

    2. (2)

       Interest on costs to date (Civil Procedure Act 2005, s 101) $3,446.53;

    3. (3)

       Total of items above $48,174.89;

    4. (4)

       Add costs of costs assessment (proportion of filing fee) $447.28;

    5. (5)

       Nil;

    6. (6)

       Total amount specified in the certificate, payable by costs respondent to costs applicant $48,622.17.

44. [44]

    The Assessor noted that attached to the application was a bill of costs, dated 22 November 2016, from Donnelly Lawyers to the costs applicant in the sum of $110,490.85, a tax invoice dated 31 January 2016 from Mr Kumar, barrister, in the sum of $32,736 addressed to both Donnelly Lawyers and Ms Fregnan (in relation to the District Court proceedings) and a tax invoice dated 6 December 2016 from Mr Kumar in the sum of $63,558 addressed to Ms Fregnan (in relation to the Court of Appeal proceedings). He then recounted the documents and material he had received during the course of the assessment. That material included letters from Mr Stanizzo on 9 May 2017 (2 letters), 10 May 2017, 11 May 2017, 12 May 2017, 16 May 2017, 22 May 2017, 24 May 2017, 8 June 2017, 15 June 2017, 28 June 2017 (two letters) and 6 July 2017. He also received letters from Mr Stanizzo’s barrister, Mr Rollinson, on 16 June 2017 and 29 June 2017.

45. [45]

    In addition to all of this correspondence from Mr Stanizzo, he also received letters from Ms Fregnan on 17 May 2017, 7 June 2017 and 20 June 2017, as well as the following three letters:

    1. (1)

       30 June 2017, letter from Paul Donnelly, the solicitor who acted for Ms Fregnan.

    2. (2)

       10 July 2017, letter from Mr Kumar.

    3. (3)

       13 July 2017, letter from Mr Donnelly.

46. [46]

    After setting out this extensive list of correspondence, the Assessor then added the following at [2.4]:

47. [47]

    At [4] the Assessor observed that the proceedings in which the costs order was made were commenced on or after 1 July 2015 and, thus, the Uniform Law applied. After referring to the relevant order of the Court of Appeal, the Assessor observed the following at [6.4]:

48. [48]

    The Assessor then set out the background to the application, in doing so he observed at [7.1]:

49. [49]

    In setting out the history he further observed at [7.2]:

50. [50]

    At [8.3] the Assessor observed the following:

51. [51]

    The Assessor noted that Mr Kumar of counsel had a cost agreement dated 29 August 2015 with Donnelly Lawyers in relation to the District Court proceedings which provided for a daily rate of $3,000 on an hourly rate of $400, both amounts plus GST. The Assessor then stated the following in relation to the costs agreement between Ms Fregnan and Donnelly Lawyers, dated 10 February 2015. He noted that it did not state the manner that it related to and disclosed a charge rate of $500:

52. [52]

    The Assessor then addressed the general objections and submissions of the parties, before observing the following at [11.7]:

53. [53]

    The Assessor then noted that the amount that he allowed for costs and counsel’s fees including GST is $38,926.36 made up of the following:

54. [54]

    The Assessor then noted that he had not been provided by either party with any offers made in relation to the costs and observed the following:

55. [55]

    On 4 December 2017, Ms Fregnan registered the Certificates of Determination in the Local Court and obtained a judgment in the amount of $50,783.55 and a Garnishee Order.

56. [56]

    On 5 December 2017, Mr Stanizzo filed an application for a review to a Costs Review Panel.

57. [57]

    On 15 January 2018, Mr Stanizzo filed a summons in this Court seeking a stay of the enforcement of the two costs certificates.

58. [58]

    On 12 February 2018, Johnson J made an order staying the Garnishee Order issued on the application of Ms Fregnan until further order of the Court.

59. [59]

    On 6 March 2018, Latham J made orders including that the enforcement of the Determinations, the Costs Judgment and the Garnishee order be stayed until the final disposal of the principal proceedings.

60. [60]

    Mr Stanizzo sought a review of the decision of the Assessor to the Review Panel. A party may, within 30 days after receiving a certificate of determination, appeal to the review panel under s 83 of the LPULAA. The Manager of Costs Assessment can also apply for a review of a decision by the costs panel: s 84. When conducting the review, the panel has, in relation to the application for review, all the functions of a costs assessor in relation to the assessment concerned: s 85(2).

61. [61]

    If, on review of a costs assessor’s determination, a review panel sets aside and substitutes the determination, the panel issues a certificate that sets out its determination: s 87.

62. [62]

    Mr Stanizzo relied upon the following grounds of complaint to the Review Panel (by reference to the paragraphs of the decision of the Assessor):

63. [63]

    On 3 December 2018, the Review Panel confirmed the Certificate of Determination of the Manager’s Assessment Costs, lifted its suspension and issued two certificates: a Certificate of Determination of Review in the amount of $37,963.93 to be paid by Mr Stanizzo to Ms Fregnan and a Certificate of Determination of Review Panel Costs in the amount of $8,036.88 to be paid as to $4,018.44 (50%) by Mr Stanizzo and as to $4,018.44 (50%) by Ms Fregnan.

Reasons of the Review Panel

1. [64]

   The Panel set out the process to be undertaken under the Act. It was noted that, although there were no decisions concerning the current legislation, a number of judicial views have been expressed in relation to the previous legislation. Reference was made to the decision of the Court of Appeal in Wende v Horvath (NSW) Pty Limited [2014] NSWCA 170 and the observations by Barrett JA (with whom Beasley and Basten JJA) agreed at [158]-[163].

2. [65]

   The background of the review was then set out. The Panel then itemised the material that it had considered which included all of the material in the Assessor’s file and further correspondence and submissions.

3. [66]

   It was identified that the central allegation by Mr Stanizzo is that Ms Fregnan’s solicitor, Paul Donnelly, and barrister, Ashok Kumar, were retained on a pro bono basis and that the costs agreements and associated documents relied upon by Ms Fregnan were recent creations to remove the pro bono arrangement and to make Mr Stanizzo liable for her costs.

4. [67]

   The Panel considered ground A first, which complained that Mr Stanizzo had not been given any prior notice of the application and was denied procedural fairness. Although the Panel accepted that it would appear that he was not given such notice, he had been asked to identify with precision any prejudice that he may have suffered as a result. The highest that he could identify any prejudice was to assert that he had been denied the opportunity to take legal advice and lodge objections and/or attempt to settle the claim before the assessment process began. The Review Panel was satisfied, on the information available to it, that there was no reasonable prospect that the matter would have settled. In any event, he was given the opportunity to make submissions in relation to the application and did so. The Panel was of the view that this complaint was without substance and failed.

5. [68]

   The second ground, ground B, was a complaint about the failure to provide certain correspondence to Mr Stanizzo, specifically letters sent to the Assessor from Mr Donnelly and Mr Kumar. The Panel noted that the usual practice is that other parties are copied into correspondence to observe the requirements of procedural fairness, but if an Assessor writes to a third party it is not standard practice to do so. It was accepted that there are no hard and fast rules in relation to third parties. The Panel concluded that no prejudice was caused to Mr Stanizzo and, thus, there was no substance to this complaint. The Panel then went on to observe this about Mr Stanizzo:

6. [69]

   It was noted that counsel for Mr Stanizzo had submitted to the Panel that it was required to conduct a “proper investigation” of the material. In response to this argument, the Panel stated that it had written to Ms Fregnan and both her lawyers on this issue and all of them had denied in writing any pro bono arrangement. Both Mr Donnelly and Mr Kumar had sent a copy of the costs agreements to the Assessor. The Panel was of the view that they were inconsistent with the existence of any pro bono arrangement. It was accepted that the Assessor had not been supplied with the correspondence which may have accompanied the costs agreement but the Panel did not accept the suggestion that the Assessor had failed to follow this up or that he was obliged to do so. The Panel then observed the following:

7. [70]

   The Panel went on to observe that:

8. [71]

   As for ground C, the Panel considered Mr Stanizzo’s complaint that the Assessor appears not to have enquired as to the basis upon which Mr Kumar acted and merely accepted his version. He also submitted that the rates of $350 per hour for the solicitor and $3,000 per day or $300 per hour for the barrister were not fair and reasonable.

9. [72]

   The Panel considered this ground and stated that there was a flaw in Mr Stanizzo’s understanding of the relevance of the costs agreement and his allegations were “mere conjecture”. It was stated that Mr Stanizzo simply disagreed with the approach taken by the Assessor. The Panel was satisfied that the issues in question were ones upon which reasonable and informed opinions might differ from time to time. It concluded that the Assessor was entitled to reach the conclusions which he did. No error was found in the Assessor’s approach.

10. [73]

    As for ground D, the Panel was satisfied that they repeat the allegations already made alleging denial of procedural fairness and fabrications. The Panel stated the following:

11. [74]

    As for ground E, this complaint related to the fact that the bill did not contain item numbers. Although the Review Panel accepted that there was some merit in that complaint, the Assessor set out the basis of the reductions so there was no merit in the suggestion that Mr Stanizzo could not ascertain the reason for the reductions. The Panel noted that there are 141 individual items claimed for professional costs in the solicitor’s bill and 44 individual items of work claimed in the two bills rendered by counsel. The Panel re-examined all three bills and noted some arithmetic and other errors on the Assessor’s part, which would be dealt with below. Accordingly, the Panel varied those amounts slightly in Mr Stanizzo’s favour.

12. [75]

    As for ground F, there was an overlap with ground E. The complaint related to the Assessor’s failure to apply a charging basis that was set out in the costs agreement and instead allowed charges on an hourly basis reducing them to what he regarded to be a fair and reasonable amount. The Panel determined that Mr Stanizzo misconceived the relevant issues and that the Assessor was not required to specifically make time estimates for each item and that the approach taken by the Costs Assessor was correct. This ground failed.

13. [76]

    As for ground G, this was a repeat of the claim that the counsel’s fee should not have been allowed at $3,000 a day. The Panel determined that, apart from an arithmetic error, a further error arose due to the fact that the counsel’s invoice did not total $32,736 but actually totalled $37,136, which was an excess of $4,400. After some further calculations, a reduction of $3,300 to the Assessor’s amount was arrived at.

14. [77]

    As for ground H, it concerned individual items in counsel’s fees. The panel was satisfied that, in addition to arithmetic errors, a further error arose due to the fact that the counsel’s invoice did not total $63,558 but actually totalled $63,118 ($440 less). The Panel was otherwise of the view that the findings of the Assessor were fair and reasonable and the issues in question ones upon which minds might differ. After some further calculations, a reduction of $3,960 in the amount allowed by the Assessor for this bill was arrived at.

15. [78]

    As for ground J, this was a claim that the Assessor had failed to set off costs owed to Mr Stanizzo by Ms Fregnan and that she should not have put “N/A” in paragraph 5 of the application. The Panel concluded that this was enforceable as a discrete matter and that the question posed at paragraph 5 of the application is concerned with applications made by the person liable to pay the costs and that it had no application in the present circumstances. As such, that ground failed.

16. [79]

    As for ground K, a complaint was made as to the Assessor’s costs. The Panel said this in relation to this complaint:

17. [80]

    As for ground L, objection was made to the allowance of interest since the date of the court order on 22 September 2016. The Panel referred to s 101 of the Civil Procedure Act 2005 (NSW). The Panel determined that it would not allow any interest on the amount it determined to be fair and reasonable. Consequently, the amount of $3,444.53 would not be included in the final amount determined by the Panel.

18. [81]

    As for ground M, it was submitted that the Assessor had disregarded the fact that Ms Fregnan’s claim was found to be manifestly excessive. It was concluded that the Review Panel had reduced the Assessor’s determination by a significant amount. It was noted that there was no evidence that the parties attempted to settle the matter and that Mr Stanizzo’s bald assertion that he had never refused to pay any costs is disingenuous. It then noted this in relation to Mr Stanizzo:

19. [82]

    Following the review of the decision of the Assessor the assessed amount of Ms Fregnan’s reasonable costs pursuant to the Court of Appeal orders were reduced from $48,622.17 to $37,963.93.

The appeal to this Court

1. [83]

   On 14 October 2019, Mr Stanizzo filed a summons in this Court seeking leave to appeal against the Review Panel’s Reasons for Determination dated 3 December 2018. The Grounds of Appeal as described in the summons were precisely the same grounds relied upon in the appeal from the decision of the Assessor to the Review Panel, save for the different paragraph references:

2. [84]

   The hearing came before me on 24 June 2020. Mr Rollinson of counsel appeared for Mr Stanizzo and Ms Fregnan appeared for herself.

3. [85]

   The plaintiff relied on the affidavit of Mr Stanizzo filed on 14 October 2019 with annexures and the defendant relied on her affidavit dated 18 June 2020 with annexures. I ruled that a number of the annexures of that affidavit were irrelevant. I note that following the hearing, Ms Fregnan copied my Associate on five separate occasions into email correspondence concerning other costs assessments and Mr Stanizzo’s appeal to the Court of Appeal against the decision of Harrison J. I have not had regard to any of that material.

4. [86]

   The eight separate grounds of appeal are directed at specific paragraphs of the decision of the Review Panel. In that sense, this is a global appeal and this Court is invited to find error in every matter decided upon by the Panel. There is a significant degree of overlap as between the respective grounds.

5. [87]

   A number of Mr Stanizzo’s submissions were directed at the terms of the relevant costs agreement. In order to understand those and some of the other complaints made in this Court, it is necessary to set out the terms of that costs agreement and the correspondence between the Assessor, Mr Donnelly and Mr Kumar.

Cost agreement documents

1. [88]

   The costs agreement with Donnelly Lawyers was signed by Ms Fregnan and dated 10 February 2015, and was in these terms:

2. [89]

   Attached to that agreement was a list of itemised charges as follows:

3. [90]

   On 17 June 2017, Mr Kumar sent the following email to Ms Fregnan:

4. [91]

   On 20 June 2017, Mr Donnelly sent the following email to Ms Fregnan:

5. [92]

   On 10 July 2017, Mr Kumar wrote a letter to the Assessor, Mr McIntyre, in which he stated the following:

Grounds A, K and M: The Review Panel erred in finding that Mr Stanizzo should pay a proportion of the costs of both the Assessor and the Panel

1. [93]

   Mr Stanizzo’s submissions dealt with these three grounds together. He contended that the fact that he was not provided with a copy of Ms Fregnan’s bill prior to her filing an application for costs assessment on 7 April 2017 means that the entire expense of the assessment process was created by Ms Fregnan and she should pay for it all. Mr Stanizzo contended that had Ms Fregnan served her proposed application on him he could have provided objections and there was a likelihood that the matter could have settled. It was submitted that it was not open to the Review Panel to find that there was no reasonable prospect that the matter would settle.

2. [94]

   In her written submissions Ms Fregnan relied upon the findings of the Assessor and the Review Panel as being correct. She pointed out that the Assessor had corresponded with Mr Stanizzo as early as 5 May 2017 and he was invited to make submissions. She relied upon the fact that the Assessor is under no obligation to provide the parties with details as to how his or her fees are made up. She observed that it was Mr Stanizzo who sought the review; not her. She noted the observation of the assessor that Mr Stanizzo had been extremely active in providing as many submissions as possible including a plethora of objections which provided as much work for the assessor as she did. She submitted that this was a valid reason for the ruling made in this regard.

Consideration grounds A, K and M

1. [95]

   It is to be accepted that Ms Fregnan, who was unrepresented at the time, did not comply with reg 35 of the Legal profession Uniform Law Application Regulation 2015. The Panel did not find otherwise. The difficulty with ground A, as the Panel observed, is that Mr Stanizzo was unable to identify any prejudice arising from this oversight besides some generalised assertion that the matter would have settled in part or in full if he had been provided with such notice.

2. [96]

   The background of hostility between Ms Fregnan and Mr Stanizzo is such that it is speculative in the extreme to suggest that the parties could have settled some or all of the matters in contention if Mr Stanizzo had been on notice of the application.

3. [97]

   Once the application was filed, Mr Stanizzo was invited to make any submissions in relation to the application he wished to and he did. There was no suggestion that after becoming aware of the application he was not provided with sufficient time to make submissions. Thus, although the procedure was not strictly complied with, it could not be said that he was denied procedural fairness as a result.

4. [98]

   As for Mr Stanizzo’s claim that he should not have to pay any of the costs of the assessment, the reasons for ordering that those costs be paid in the proportion they were is clearly set out in the reasons of both the Assessor (extracted above at [54]) and the Panel (extracted above at [79]). Although it is to be accepted that Ms Fregnan’s solicitor put in an inflated claim, the fact remains that it was Mr Stanizzo who created much of the work that the Assessor was required to undertake. Mr Stanizzo asserts that the fact that the amount claimed was significantly reduced necessarily means that Ms Fregnan should have to pay all of the assessment costs; this ignores his own contribution to the significant amount of time required to assess the matter.

5. [99]

   I would dismiss these grounds.

Grounds B and D: the barrister and solicitor acted pro bono

1. [100]

   Mr Stanizzo’s position was that none of the professional costs in the District Court or counsel’s fees in the Court of Appeal should be paid by him because they are sought on a fraudulent basis.

2. [101]

   He relied upon inconsistencies on the face of the costs agreement that I will address below. He relied upon the fact that Ms Fregnan had no funds to pay a lawyer so posed the question, why would she sign a full indemnity costs agreement? He submitted that the fact that Ms Fregnan had no funds, and the costs agreement was not drafted on a contingency basis led to the only conclusion that her lawyers had conspired against him to pretend that they were not acting pro bono when they in fact were.

3. [102]

   Ms Fregnan submitted in writing that there was no contradiction in the terms of the costs agreement. On the issue of any pro bono agreement she submitted:

4. [103]

   In her oral submissions at the hearing of the appeal Ms Fregnan explained how it was that Mr Kumar came to be retained:

5. [104]

   And later:

Consideration grounds B and D

1. [105]

   Ground B is a complaint that Mr Stanizzo should have been provided with the correspondence from Mr Kumar and Mr Donnelly whilst the matter was still before the Assessor. When Mr Stanizzo first made the fraud allegation, the Assessor wrote to Ms Fregnan, Mr Donnelly and Mr Kumar about this and they all replied in writing. They all denied that the agreement was a pro bono one. Their replies form part of the material before me and are summarised in the reasons of both the Assessor and the Panel.

2. [106]

   The Review Panel considered Mr Stanizzo’s complaint on this issue and distinguished this situation from the situation where a party is not copied into correspondence with another party. It was noted that there is no particular policy that all such third party correspondence must be provided to the parties.

3. [107]

   In hindsight, it seems to me that had the Assessor provided the correspondence and costs agreement to Mr Stanizzo before the initial assessment was finalised it may have permitted him to address this issue squarely before the Assessor. But he had the relevant documents by the time of the Review. Thus, even if I was satisfied that there was a requirement for such documents to be provided to him by the Assessor, which I am not, the question arises as to what flows from such a finding. I propose to deal with this ground as being part of the more general complaint that the Review Panel should have been satisfied that the relevant costs agreements were fraudulent.

4. [108]

   Ground D is the nub of the appeal. Mr Stanizzo contends that both the Assessor and the Panel erred in finding that Mr Stanizzo should have to pay any costs at all because Mr Kumar and Mr Donnelly were acting on a pro bono basis. Complaint is also made that the Panel failed in its task by not enquiring further as to whether there had in fact been a fraud.

5. [109]

   Although I am not satisfied that Mr Stanizzo has established that Mr Kumar and Mr Donnelly were acting pro bono, I do have some doubt as to the genuineness of the costs agreement and subsequent bill provided by Donnelly Lawyers to the Assessor for the following reasons.

6. [110]

   First, it was common ground that Ms Fregnan had no resources to pay for her legal fees upfront. She had sought pro bono assistance through the Bar Association in June 2014. As I have extracted above, her understanding was that Mr Kumar and Mr Donnelly expected to be paid but knew that she did not have any money until the matter was finished. In those circumstances, I accept that it seems unlikely that she would be required to sign a fully indemnifying costs agreement with no contingency clause.

7. [111]

   Secondly, there is an inconsistency on the face of the costs agreement as it refers to an hourly rate of $500 on the first page and then attaches a list of itemised rates.

8. [112]

   Thirdly, Mr Donnelly’s bill was clearly inflated. It repeats entries and does not always reconcile with the court record which shows Ms Fregnan being unrepresented at various times where she was charged for legal services.

9. [113]

   Fourthly, the tax invoice Donnelly Lawyers sent to Ms Fregnan on 22 November 2016 was sent after the decision of the Court of Appeal, whereas the costs agreement contemplated bills to be rendered on a monthly basis. This is the only invoice ever issued to Mr Fregnan (contrary to the terms of the agreement) and it was not calculated on the hourly rate (contrary to the terms of the agreement).

10. [114]

    Fifthly, Ms Fregnan submitted that Mr Kumar wanted to be paid and repeatedly asked to be paid. As the extract above makes clear, this pertains to the time after the Court of Appeal hearing when Mr Kumar was going to appear for her in the proceedings before Harrison J, (which, that record shows, he did until part way through the proceedings at which time he withdrew). Her account is consistent with the agreement being a “no win no pay” one. She had won in the Court of Appeal thus he wanted to be paid. Despite this, the late Mr Kumar denied that the matter was pro bono or “spec” in his correspondence with the Assessor.

11. [115]

    Having had regard to these matters it is clear that not all of this evidence can stand together. I am left with some doubt as to whether the agreement as between Mr Donnelly/Mr Kumar and Ms Fregnan in the District Court and as between Mr Kumar and Ms Fregnan in the Court of Appeal was on an indemnity basis or on a spec basis. The difficulty for Mr Stanizzo, however, is that even if I was not satisfied that it was on a “spec” basis, that does not necessarily mean that it must have been on a pro bono basis. I am satisfied that Ms Fregnan’s lawyers expected to be paid at some time and, more significantly, that they did do legal work on her matter as claimed.

12. [116]

    As the Review Panel pointed out, Mr Stanizzo’s focus on the costs agreement on this issue is misplaced: the question for the Assessor, for the Review Panel and for this Court is to determine what party/party legal costs Ms Fregnan incurred in her appeal to the Court of Appeal and in defending Mr Stanizzo’s notice of motion in the District Court. The relevance of the costs agreement in this matter was to protect Ms Fregnan. As Bell J noted in Russells v McCardel [2014] VSC 287 at [10]:

13. [117]

    Under the LPULAA the consequences of a legal practitioner not arranging a costs agreement is that the client (or an associated third party payer) are not required to pay the legal costs until they have been assessed or any costs dispute has been determined by the designated local regulatory authority: s 178(1)(b) of the LPULAA. The effect of any incomplete disclosure on behalf of Mr Donnelly’s law practice does not affect Mr Stanizzo’s obligation to pay costs to Ms Fregnan.

14. [118]

    I am not satisfied of any error on the part of the Review Panel in failing to find, as a positive fact, that the arrangement between Ms Fregnan and her lawyers was necessarily a pro bono one. Any doubts I might have as to the documents provided to the Assessor do not mean that Mr Stanizzo has established that Ms Fregnan’s lawyers must have been acting pro bono.

15. [119]

    Finally, as to the complaint that the Review Panel failed to make further inquiries to determine whether the arrangement was in fact a pro bono one, it is difficult to see what inquiries could have made. All the relevant actors denied any pro bono arrangement. The suggestion that the Assessor and the Panel should have required the legal practitioners to provide other examples of their standard costs agreements for comparison purposes misunderstands the role of the Assessor.

16. [120]

    I would dismiss these grounds.

Grounds C, G and H: Complaint as to the barrister’s rates

1. [121]

   This complaint is twofold. First, it is contended that the Panel should have enquired as to the basis upon which Mr Kumar appeared for Ms Fregnan on the appeal, rather than assuming that it was under the relevant costs agreement. The second complaint is that the rates of $350 an hour and $3,000 were not fair and reasonable.

2. [122]

   Ms Fregnan submitted that no error was disclosed in the Review Panel’s finding in this regard.

Consideration

1. [123]

   This ground can be dealt with shortly. Although Mr Kumar was under the belief that the disclosure he made for the District Court proceedings applied to the Court of Appeal proceedings, the Assessor came to the conclusion that this could not have been the case as his disclosure in the District Court was to Mr Donnelly, who no longer acted for Ms Fregnan in the Court of Appeal. The Assessor and the Review Panel both proceeded on the basis that Ms Fregnan was aware of Mr Kumar’s costs from the previous disclosure via Mr Donnelly and that Mr Kumar acted for her on a direct access basis. I see no error in that approach. This complaint appears to be another way of contending that the Panel should have found that the arrangement was on a pro bono basis.

2. [124]

   There can be no doubt that Mr Kumar did appear for Ms Fregnan in the Court of Appeal and in the District Court. Some of the entries on his bill correspond with the court’s record. On 20 May 2016, for example, he appeared at a directions hearing before the Registrar. Similarly, on 11 July 2016, he appeared at another direction hearing. On 17 August 2016, he prepared written submissions and submissions in reply as required by these directions. On 29 August 2018, he appeared at the Court of Appeal hearing. There can be no doubt that he did the work necessary to prepare and appear on an appeal to the Court of Appeal. I have already concluded that Mr Stanizzo has not discharged the onus of establishing that he did so on a pro bono basis.

3. [125]

   Mr Kumar’s rates were assessed as $15,658.50 for the Court of Appeal matter (on a direct access basis) and $11,949.00 (for the District Court motion) respectively. The role of the Assessor and the Review Panel was to determine the “fair and reasonable amount of costs for the work concerned”: s 76(1) LPULAA.

4. [126]

   Section 76(2) of the LPULAA provides that in considering “what is a fair and reasonable” in these circumstances, the assessor may have regard to the factors in s 172(1) and (2) of the Legal Profession Uniform Law (NSW). These factors, as set out in 172(2), are as follows:

5. [127]

   I have had regard to these matters on the same basis as did the Assessor and, in turn, the Review Panel. As the Review Panel observed in relation to the findings of the Assessor, an assessment of counsel’s fees is one upon which reasonable minds might differ. Whether or not I would arrive at these precise figures is not the question; the question is whether I am satisfied that any error is disclosed in the Review Panel’s finding that these amounts are fair and reasonable in the circumstances. I am not satisfied of any error in the assessment of counsel’s costs.

6. [128]

   I would dismiss these grounds.

Grounds E, F and K: Complaint as to solicitor’s rates

1. [129]

   These complaints all concerned Mr Donnelly’s bill. The complaints are that the rates were too high, the bill was fabricated and that it did not contain item numbers. As stated above, these complaints have been largely upheld by the Assessor and the Review Panel already.

2. [130]

   Ms Fregnan addressed this ground in her written submission as follows:

Consideration

1. [131]

   The complaints made under these grounds overlap and, again, to a large extent, repeat Mr Stanizzo’s claim that Mr Donnelly is not entitled to anything. The Review Panel found that this complaint misunderstood the issues when dealing with court ordered costs. I am unable to find any error in the approach taken by the Panel on this issue and would not uphold this ground.

2. [132]

   Despite the discrepancies in both the costs agreement and the bill provided by Mr Donnelly, Mr Stanizzo has not discharged the onus of establishing that Mr Donnelly was acting on a pro bono basis.

3. [133]

   Mr Stanizzo has already been largely successful in his claim in this regard. An initial claim for $212,527.85 has been reduced to $37,963.93. Of that sum only $4,110.15 was referable to the solicitor’s fees. Having regard to the s 76/s 172(2) factors I have extracted above, Mr Stanizzo has not established that this is not a fair and reasonable amount to be paid for the costs of the motion.

4. [134]

   I would dismiss these grounds.

Ground J: Failure to “set off” costs

1. [135]

   Mr Stanizzo submitted that the Review Panel failed to allow a “set off” of the costs payable by Ms Fregnan to him in the amount of $4,941, as per a Certificate of Determination of Costs issued on 12 January 2016 and sent to the parties on 16 March 2016.

2. [136]

   Ms Fregnan contended that there is no remaining fee to set off, as these costs were effectively “wiped out” by the decision of the Court of Appeal.

3. [137]

   Mr Rollinson, for Mr Stanizzo, was unable to explain why the costs were still owed as he was unable to identify the event that those costs followed. He was able to submit that the costs pertained to the service of medical reports and non-attendance at a medical examination. He was otherwise unable to assist as to the date of the decision, who the judge was and why Ms Fregnan was still required to pay the costs.

4. [138]

   On the basis of a JusticeLink search conducted by my Associate during the hearing, five District Court outcomes were identified where costs orders were made against Ms Fregnan prior to the costs decision of Olsson DCJ on 11 December 2015. On 14 November 2014, she was ordered to pay the defendant’s costs of that day as agreed or assessed, on 12 December 2015 she was ordered to pay costs of her motion but not until the conclusion of the hearing, on 16 April 2015 she was ordered to pay the costs of the defendant’s motion, on 22 July 2015 she was ordered to pay the defendant’s costs of the notice of motion associated with relisting the matter on 22 July 2015, and on 20 August 2015 she was ordered to pay the defendant’s costs of the proceedings incurred since 22 July 2015 on an indemnity basis and payable forthwith.

5. [139]

   Mr Rollinson submitted that the “set off” costs order related to an interlocutory order in Mr Stanizzo’s favour against Ms Fregnan early in 2015 and prior to the decision of Olsson DCJ on 11 December 2015 and as such is unaffected by the decision of the Court of Appeal. He submitted that under the Uniform Civil Procedure Rules 2005 (NSW) Part 42, r 42.1 the court has an inherent discretion and power to allow set off costs orders if both were incurred in the same proceedings.

Consideration

1. [140]

   Despite the amount of court time spent on this issue, it is ultimately not necessary for me to make any finding as to whether Ms Fregnan still owes Mr Stanizzo $4,941 from an interlocutory order made in 2015. This is because there was no obligation on the part of either the Assessor or the Review Panel to apply a set off to the amount of Ms Fregnan’s assessed costs.

2. [141]

   Mr Rollinson could not identify any provision of the Act or rules or any authority for the proposition that a costs assessor or a review panel must “set off” costs. This is because there is no such power and it forms no part of the assessment process. To contend otherwise misapprehends the nature of the role of the Assessor and the Panel.

3. [142]

   I would dismiss this ground.

ORDERS

1. [143]

   Accordingly, I make the following orders:

   1. (1)

      The appeal is dismissed.

   2. (2)

      The plaintiff is to pay the defendant’s costs of the proceedings.