KEKATOS LAWYERS PTY LTD trading as Kekatos Lawyers v Dana Rahme

1. [1]

   On 28 April 2023, Kekatos Lawyers Pty Ltd trading as Kekatos Lawyer ABN 604 211 789 (“the plaintiff”) filed a Summons, in which the plaintiff sought to secure the payment of legal costs incurred by Dana Rahme (“the defendant”) by claiming a lien over money paid into the Supreme Court by Benjamin & Khoury Pty Ltd (“B&K”).

2. [2]

   On 9 August 2023, the plaintiff sought leave to amend the Summons, which was granted by Lonergan J on 15 November 2023. On 8 December 2023, the plaintiff filed an Amended Summons. The amendments sought to secure the payment of further legal costs due from the defendant to the plaintiff.

3. [3]

   On 11 December 2023, the defendant filed a Cross-Summons seeking orders and declaratory relief. However, the parties agreed that the Cross-Summons should proceed by way of pleadings and directions were made by consent on 8 April 2024 with respect to the filing of the Statement of Cross-Claim, Defence to the Cross-Claim and Reply to the Defence of the Cross-Claim.

4. [4]

   On 19 April 2024, the defendant filed a Statement of Cross-Claim (“the CC”) seeking, in the broad, damages for breach of contract, duty of care, fiduciary duty and statutory consumer protections by the plaintiff. I will return to the pleadings in detail, later in this judgment.

5. [5]

   No defence to the CC was filed by the plaintiff in accordance with the Court’s timetable. However, on application by the plaintiff, on 18 December 2024 Registrar Hedge ordered that:

6. [6]

   On 18 December 2024, the plaintiff filed a Notice of Motion (“the motion”) seeking the following orders:

   1. (1)

      That pursuant to r 14.28 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”), the whole of the CC be struck out.

   2. (2)

      That the defendant be estopped from pursuing the matters set out in the CC.

   3. (3)

      That the CC be dismissed or summarily dismissed.

   4. (4)

      That the CC be permanently stayed.

   5. (5)

      That the defendant pay the plaintiff’s costs of the motion.

7. [7]

   This judgment concerns the determination of the motion.

8. [8]

   At the outset of the hearing, the Court addressed the fact that the motion appeared to expand into something beyond what was contemplated by the Registrar when leave was granted on 18 December 2024. That is, leave was granted for the plaintiff to file and serve any motion seeking to strike out the CC. However, the motion also sought an estoppel, dismissal, or summary dismissal and permanent stay of the CC.

9. [9]

   In answer to this, the plaintiff submitted that one basis for the strike out application was that the CC is an abuse of process, and if the CC is struck out on the basis of abuse of process, then the only consequential order that arises is either a permanent stay or dismissal. Essentially, the plaintiff submitted that the orders sought for the CC to be dismissed, summarily dismissed or permanently stayed arise on that basis.

10. [10]

    The contest before the Court on the motion went forward on that basis, and accordingly, I propose to determine whether to grant any such form of relief for an abuse of process.

Background to the Amended Summons

1. [11]

   This matter has a significant and complex procedural history. There are a multitude of proceedings which have come before and been determined by this Court. To the extent relevant for the purpose of determining the motion, I set out a brief procedural history, below.

2. [12]

   In 2015 the defendant and her husband, Mr Gabriel Rahme (collectively, “the Rahmes”), retained the services of the plaintiff [1] to bring proceedings in the Supreme Court against B&K, Paul Satouris, and Solon Lawyers: Rahme v Satouris [2018] NSWSC 1753 (“the substantive proceedings”). In 2018 the substantive proceedings were expanded to include a claim against Dieb Peter Khoury, the sole director of B&K.

3. [13]

   I pause at this juncture, to note that, in what are unusual circumstances, Solon Lawyers are now the instructing solicitors for the defendant. While the issue was not raised by the parties, there appears to be, at least at first glance, some conflicts of interest with that arrangement. However, I do not propose to pass upon that topic any further, given it is not an issue to which I have been directed, except to note that it may explain the significant level of animosity between the instructing solicitors in this matter, which the Court was, unfortunately, witness to. I note that such conduct is far from the conduct which is expected of officers of this Court.

4. [14]

   The Rahmes settled the claims against Paul Satouris and Solon Lawyers, on terms which involved no order as to costs. Hence, what remained in the substantive proceedings was the claim against B&K and Mr Khoury.

5. [15]

   The substantive proceedings were heard in late 2018 by Emmett AJA. The Rahmes claim failed at first instance before Emmett AJA. However, on appeal (“the appeal proceedings”) the defendant succeeded against B&K: Rahme v Benjamin & Khoury Pty Ltd (2019) 100 NSWLR 550; [2019] NSWCA 211; Rahme v Benjamin & Khoury Pty Ltd (No 2) [2019] NSWCA 239. The plaintiff acted for the defendant in the appeal proceedings.

6. [16]

   The Court of Appeal gave judgment for the defendant against B&K in the sum of $302,040.30 including interest, and also ordered that B&K pay:

   1. (1)

      the costs of the defendant (but not Mr Rahme) of the proceedings in the court below on an ordinary basis; and

   2. (2)

      the costs of the defendant in the Court of Appeal on an ordinary basis.

7. [17]

   Following judgment in the appeal proceedings, the defendant sought assessments of her ordered legal costs against B&K, on a party-party basis. As part of those cost assessment proceedings, the defendant asserted that she had a liability to pay legal costs to the plaintiff, pursuant to the written costs agreements. The defendant asserted the quantum of costs which she asserted was owed to the plaintiff, which mirrored an itemised tax invoice dated 9 April 2020, issued by the plaintiff to the defendant for legal costs incurred in the substantive proceedings and the appeal proceedings.

8. [18]

   The assessments of the defendant’s party/party costs were finalised, and those assessments were registered as judgments of this Court.

9. [19]

   A necessary step in the determination of those assessments was a finding of a liability for the defendant to pay legal costs to the plaintiff, and a quantification of those costs.

The costs agreements relied on by the plaintiff

1. [20]

   The plaintiff tendered as evidence on the motion, two written costs agreements:

   1. (1)

      a written costs agreement dated 2 June 2015 between the Rahmes and the plaintiff, which was the costs agreement for the substantive proceedings (“the trial costs agreement”); and

   2. (2)

      a written costs agreement which is undated, between the Rahmes and the plaintiff, which was the costs agreement for the appeal proceedings (“the appeal costs agreement”),

2. [21]

   The written costs agreements contained the following identical terms:

3. [22]

   Both written costs agreements also contained the following “General Terms of Business”, which were contained in a Schedule (“the general terms”):

Pleadings in the Amended Summons

1. [23]

   The Amended Summons noted that as of 27 April 2023, the amount of $579,449.00, paid into the Supreme Court by B&K, was currently held in the Supreme Court (“the held funds”).

2. [24]

   In substance, in making the claims under the Amended Summons, the plaintiff relied upon the written costs agreements as constituting the retainer between the plaintiff and the defendant for the substantive proceedings and appeal proceedings. [2]

3. [25]

   The Amended Summons sought, inter alia, an order to the effect that:

   1. (1)

      The plaintiff holds an equitable right to the entirety of the held funds, or in the alternative, to such amount as the Court deems fit.

   2. (2)

      The plaintiff holds a lien over the entirety of the held funds, or in the alternative, to such amount as the Court deems fit.

   3. (3)

      The quantum to which the right over the held funds extends to are the costs of the plaintiff in relation to its retainer with the defendant in the substantive proceedings, the appeal proceedings, and costs incurred with respect to the Caveat Retainer.

   4. (4)

      That money be paid out of the held funds to the plaintiffs in the amount determined in cost assessment.

   5. (5)

      The held funds remain in Court, until determination of the Notice of Motion dated 8 August 2023 in both the trial and appeal cost assessment proceedings between B&K and the defendant, and the Amended Summons. [3]

Pleadings in the CC

1. [26]

   The CC contained 28 pages of purported pleadings and particulars, with a vast array of different claims made against the plaintiff. I set out below, in broad terms, the main contentions advanced by the defendant in this respect.

2. [27]

   The CC pleaded that the retainer between the parties (“the oral retainer”) was made orally on a no-win-no-pay and pay-if-paid basis, whereby the plaintiff agreed to accept as the costs for the performance of its retainer, the net amount recovered by the Rahmes as ordered costs (but not damages) in the event they were successful in the substantive proceedings. The same terms were said to apply in relation to the plaintiff’s engagement to conduct the appeal proceedings.

3. [28]

   The CC pleaded that the oral retainer contained the following express terms:

   1. (1)

      That the Rahmes would receive any damages recoverable from B&K or Solon Lawyers without any deduction for the professional costs or disbursements of the plaintiff.

   2. (2)

      That the plaintiff would act for the Rahmes to recover such costs as were payable by B&K, Paul Satouris, Solon Lawyers and Mr Khoury and accept, as its professional costs, the net amount payable to the Rahmes as their recovered ordered costs from those defendants, that is, the net amount recoverable by the Rahmes or either of them after all countervailing costs orders made in their favour or against them (where they were partially successful against one but not both defendants) were assessed and paid.

4. [29]

   The CC pleaded that the oral retainer also contained the following implied terms:

   1. (1)

      That the plaintiff would co-operate with the Rahmes to take, or otherwise to not impede them taking, all necessary steps to recove any damages and ordered costs payable to them by B&K, Paul Satouris, Solon Lawyers and/or Mr Khoury.

   2. (2)

      That operation of the pay-if-paid terms of the oral retainer and the first implied term of the oral retainer as executory promises by the plaintiff to the Rahmes would survive termination of the retainer to conduct the substantive proceedings.

5. [30]

   In summary, the CC pleaded that those express and implied terms gave rise to a duty of care and fiduciary duty owed by the plaintiff to the defendant, and that the plaintiff had breached those duties, the terms of the oral retainer, as well as a number of statutory provisions relating to solicitor conduct by:

   1. (1)

      Demanding payment of its legal costs from the defendant in an email dated 3 November 2020.

   2. (2)

      Applying money received on trust on behalf of the defendant toward the payment of professional costs, disbursements and counsel fees without the defendant’s informed consent.

   3. (3)

      Lodging an application for assessment of the defendant’s ordered costs of the substantive proceedings and the appeal proceedings.

   4. (4)

      Representing that the defendant had entered into a statutorily compliant costs agreement with the plaintiff.

   5. (5)

      Claiming various liens over, inter alia, the ordered costs and damages payable to the defendant.

   6. (6)

      Asserting that B&K had a duty to account to the plaintiff in respect of the ordered costs and damages payable to the defendant.

6. [31]

   The CC also pleaded that the plaintiff acted in contravention of s 18 of the Australian Consumer Law (Sch 2 of the Competition and Consumer Act 2010 (Cth)) as a result of the representations made by the plaintiff with respect to the costs agreement.

7. [32]

   For the purposes of the present proceedings, what is at least implicit in the CC, is a denial by the defendant of the existence of the written costs agreements as having legal effect. So much is clear from the CC that the retainer between the parties was only oral and that it was conditional, with, in broad terms, no-win-no-pay and pay-if-paid terms.

LEGAL PRINCIPLES

1. [33]

   The court has the power to strike out the whole or parts of a pleading pursuant to r 14.28 of the UCPR, which provides as follows:

2. [34]

   While the motion sought a strike out of the CC on the basis of subs (a), (b) and (c), the submissions of the plaintiff proceeded on the basis that the pleading was both an abuse of process, and, embarrassing in the sense described in r 14.28(b) of the UCPR.

3. [35]

   A pleading is embarrassing where it “is unintelligible, ambiguous, vague or too general, so as to embarrass the opposite party who does not know what is alleged against him”: Meckiff v Simpson [1968] VR 62 at 70 (per Winneke CJ, Adam and Gowans JJ); Gunns Ltd v Marr [2005] VSC 251 at [14]-[15] (per Bongiorno J); McGuirk v University of New South Wales [2009] NSWSC 1424 (“McGuirk”) at [30] (per Johnson J).

4. [36]

   This particular principle has been elaborated on a number of times, and I note the following more recent statement of principle from Owners - Strata Plan No 82089 v Omaya Holding Pty Ltd [2024] NSWSC 992 at [70] to [72] (per McGrath J), which the plaintiff relied upon:

5. [37]

   However, as was accepted by the plaintiff, where a pleading defect can be cured by amendment, the court ought to grant leave to amend the pleadings rather than exercise the power to strike out: Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 536-537 (per Kirby P, with whom Hope and Samuels JJA agreed).

6. [38]

   I also accept, as was submitted by the defendant, that the power to summarily dismiss a matter should be used sparingly, where it is clear that the cause of action is so obviously untenable that it cannot possibly succeed: General Steel Industries Inc v Commissioner of Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69 at [8] (per Barwick CJ). Hence, the test is not whether the claim is arguable, but whether the claim is clearly incapable of success.

7. [39]

   In respect of the doctrines of abuse of process and estoppel, the plaintiff relied on the following statement of principle by the High Court in Tomlinson v Ramsey Food Processing Pty Limited (2015) 256 CLR 507; [2015] HCA 28 (“Tomlinson”) at [22] – [26] (per French CJ, Bell, Gageler and Keane JJ):

8. [40]

   The plaintiff also relied on the decision of Kuligowski v MetroBus (2004) 220 CLR 363; [2004] HCA 34 at [21]-[22] (per Gleeson CJ, McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ) as authority for the proposition that:

9. [41]

   Lastly, reliance was also placed on the decision of Reichel v Magrath (1889) 14 App Cas 665 (‘Reichel”). This case concerned two proceedings, whereby the appellant sought to put on a defence (in the second proceeding) that resembled the case he lost when he was the plaintiff in the first proceedings. The Privy Council held that the defence was an abuse of process as the controversy had already been resolved. Lord Halsbury LC made the following remarks (at 668):

10. [42]

    It is also necessary to set out those sections of the Legal Profession Uniform Law 2014 (NSW) (“Uniform Law”) and Legal Profession Uniform Law Application Act 2014 (NSW) (“Uniform Law Application Act”) which the parties relied on.

11. [43]

    Section 199 of the Uniform Law provides as follows:

12. [44]

    Section 64 of the Uniform Law Application Act provides as follows:

13. [45]

    Section 70(5) of the Uniform Law Application Act provides as follows:

14. [46]

    Section 75 to 77 of the Uniform Law Application Act provides as follows:

15. [47]

    Section 93C of the Uniform Law Application Act provides as follows:

CONSIDERATION

1. [48]

   The bases for the orders sought by the plaintiff on the motion were as follows:

   1. (1)

      The CC denied the defendant's liability for costs and the quantum of those costs, which was contrary to previous positions she had taken in these and other proceedings, and contrary to judgments of this Court. The defendant is debarred from pleading those denials by reason for litigation estoppels or abuse of process.

   2. (2)

      The CC is unintelligible, ambiguous, vague or too general so as to embarrass the plaintiff who does not know what is alleged against them.

2. [49]

   I will address each of these issues, in seriatim, below.

Abuse of process and estoppel

1. [50]

   The first issue for consideration is whether the CC should be stuck out on the basis of an abuse of process, and ancillary to this, whether the defendant ought to be estopped from bringing further claims on the same subject matter of the CC.

2. [51]

   As noted above, the abuse of process arises from the fact that the pleadings contained in the CC are contrary to previous positions which the defendant has taken, and contrary to previous judgments of this Court. [4]

3. [52]

   The terms of the written costs agreements are entirely at odds with what is pleaded by the defendant in the CC. In particular, that contradiction relates to both the fact of the existence of the written costs agreements and the conditions contained in any retainers.

4. [53]

   At this juncture, it should be emphasised that irrespective of whether the written costs agreements were signed by the defendant and returned to the plaintiff, acceptance of the terms could have been satisfied by the defendant continuing to instruct the plaintiff in relation to both the substantive proceedings and the appeal proceedings (in accordance with cl 2 of the general terms).

5. [54]

   As will become evident below, the terms of the written costs agreements assume relevance for present purposes, by reason of the fact that the defendant relied on the written costs agreements in support of its applications for party/party costs against B&K. However, the defendant now denies the existence of those agreements and pleads that the retainer between the parties was made orally on a no-win-no-pay and pay-if-paid basis.

6. [55]

   The defendant relied on the written costs agreements when applying for party/party costs following the substantive proceedings and the appeal proceedings.

7. [56]

   On 3 August 2020, the defendant filed two applications for assessment of party/party (ordered) costs, following the orders made by the Court of Appeal in the appeal proceedings. For clarity, there were two separate but related costs assessment applications, one which related to the legal costs of the substantive proceedings and one which related to the legal costs of the appeal proceedings.

8. [57]

   Relevantly, for present purposes, the reasons given by the costs assessor in their determination of costs for the substantive proceedings, stated that:

   1. (1)

      The total legal costs claimed by the defendant (for payment of, inter alia, the plaintiff’s costs) was $518,366.27.

   2. (2)

      The defendant “provided a copy of the costs agreement [to the costs assessor] and asserted there is a liability to pay the costs sought.”

   3. (3)

      The costs assessor “examined the Costs Agreement between [the plaintiff] and [the defendant]”, and made a determination based on that written agreement in the defendant’s favour.

9. [58]

   Similar reasons were given in relation to the determination of costs for the appeal proceedings, namely, the defendant provided a copy of the appeal costs agreement to the costs assessor and asserted a liability to pay the costs sought, and the costs assessor examined that costs agreement before making a determination in the defendant’s favour.

10. [59]

    Both costs determinations were affirmed on review, and the appeals by B&K of the review panel’s decisions were dismissed by Justice Chen on 24 February 2023, pursuant to consent orders entered into between the parties.

11. [60]

    On 30 May 2022, the plaintiff filed an application for assessment of solicitor/client costs, as between the plaintiff as costs applicant and the defendant as costs respondent.

12. [61]

    In response to that application, the defendant filed submissions dated 30 June 2022 in which the defendant submitted, inter alia, that:

    1. (1)

       there was no written retainer entered into between the parties;

    2. (2)

       the written costs agreements were never given to the Rahmes; and

    3. (3)

       the costs arrangements between the parties was an oral arrangement, which was said to be a conditional costs agreement within the meaning of s 323 of the Legal Profession Act 2004 (NSW).

13. [62]

    As is evident, the submissions advanced by the plaintiff were entirely inconsistent with the position taken by her in the earlier proceedings regarding the assessment of party/party costs.

14. [63]

    However, regardless of those submissions, the costs assessor in its ‘statement of reasons’, made the following findings (amongst others):

15. [64]

    The certificate of determination dated 4 November 2022 ultimately assessed the costs owed by the defendant to the plaintiff as $288,590.74.

16. [65]

    In its application for review filed by the defendant in March 2023, the defendant did not challenge the findings made by the costs assessor regarding the existence of a written costs agreement between the parties. Rather, the defendant, in fact, relied on the terms contained within the written costs agreements to found certain grounds of its application. For example, one ground relied upon included:

17. [66]

    I accept that this extract demonstrates that the defendant understood and accepted that the trial costs agreement was found to be valid and enforceable between the parties, and in consequence of that finding, the defendant relied on the terms contained within the trial costs agreement to buttress her own argument.

18. [67]

    A letter from the defendant’s legal representative, Solon Lawyers, to the plaintiff dated 28 February 2023 further confirmed that “[t]he only issues raised in the Application for Review relate to the payment and allocation to the costs billed for your firm’s two retainers to ensure that [the defendant] receives full credit for all costs paid from your trust account in accordance with emails to and from her and the costs agreements.”

19. [68]

    Again, this clearly demonstrates an acceptance by the defendant that the written costs agreements governed the retainer between the parties, a fact which the defendant seeks to dispute in the CC.

20. [69]

    In my view, having regard to the defendant's conduct in prior proceedings of this Court, the CC is clearly an abuse of process in the sense described in Tomlinson at [26]. I also find that the circumstances set out above are sufficient to raise an estoppel, such that the defendant should not be permitted to raise matters, including as to the existence of the written costs agreements, which have already been raised and determined by this Court.

21. [70]

    Subject to the questions of law discussed below, the defendant cannot now deny a liability for costs, or deny the quantum and substance of that liability, when that position is directly contrary to the position she has taken, and contrary to determinations made on the basis of that position, previously in this Court. To allow that course would be contrary to the principles of finality and fairness which underpin the law of abuse of process and would “bring the administration of justice into disrepute”: Tomlinson at [25].

22. [71]

    However, the analysis does not end here. The defendant submitted that the statutory provisions of the Uniform Law and Uniform Law Application Act precluded an issue estoppel in this matter. Essentially, they submitted that an issue estoppel was not available in law. As such, it is necessary to consider that argument.

23. [72]

    Counsel for the plaintiff submitted that the estoppel which the plaintiff seeks to invoke does not arise pursuant to the law, namely, the statutory regime for the determination of costs. Reliance was placed on the following Court of Appeal authorities by both parties:

    1. (1)

       Doyle v. Hall Chadwick [2007] NSWCA 159 (“Doyle”);

    2. (2)

       Bingham v Bevan (2023) 111 NSWLR 287; [2023] NSWCA 86 (“Bingham”); and

    3. (3)

       Rahme v Kekatos Lawyers Pty Ltd [2024] NSWCA 31 (“Rahme Appeal”).

24. [73]

    As such, it is necessary to address those sections of the Uniform Law and Uniform Law Application Act which form the basis of this argument, and address matters of construction raised by the parties.

25. [74]

    In written reply submissions, counsel for the plaintiff made a succinct submission as to what the relationship was between the relevant statutory provisions engaged with by the parties, particularly, ss 199 of the Uniform Law and s 93C of the Uniform Law Application Act and the plaintiff’s reliance on an abuse of process to defeat the CC.

26. [75]

    The plaintiff’s submissions in that respect were in the following terms:

27. [76]

    Hence, it was the plaintiff’s contention that a decision as to the validity of a costs agreement is not an "anterior or incidental question of fact or law" within the meaning of s 93C(3) of the Uniform Law Application Act. Rather, such a decision is a necessary step in the assessment of legal costs, and as such, no restriction on issue estoppel (under s 93C(3) of the Uniform Law Application Act) arises in relation to a decision of that nature. Thus, the plaintiff contended that the defendant was thereby estopped.

28. [77]

    The arguments advanced by the defendant, in response to this contention, were as follows:

    1. (1)

       The defendant’s interpretation of s 93C of the Uniform Law Application Act is wrong. In making a costs assessment, a costs assessor is simply undertaking a quantification exercise by an administrative process because liability has already been determined by the court. The role of a costs assessor is simply to determine the amount of an order, which is an exercise in quantification not liability. The defendant relied on ss 75(1), 76 and 77 of the Uniform Application Act to support this construction of s 93C. As such, the defendant argued that the costs agreement is simply a discretionary factor in a costs assessment which is used for the purposes of quantifying an order for costs.

    2. (2)

       With respect to s 199 of the Uniform Law, the jurisdiction of the costs assessor is simply to determine the validity of a costs agreement rather than its interpretation. This is, it is an exercise in determining whether there was a costs agreement, and if so, whether it was valid. This determination is for the sole purpose of determining the quantification of costs, that is, what is a fair and reasonable amount of the costs.

29. [78]

    I accept that these arguments were advanced in order to demonstrate that a costs assessor’s determination as to whether a valid costs agreement exists, is an “anterior or incidental question of fact or law” for the purpose of s 93C(3) of the Uniform Application Act. As such, it was the defendant’s contention that she is not bound by the findings of the costs assessor with respect to the existence and terms of the written costs agreements, even if those findings were made in conformity with her conduct of those proceedings.

30. [79]

    Before turning to the authorities relied on by the parties, I will first address the question of statutory construction.

31. [80]

    Section 93C(3) of the Uniform Law Application Act provides that:

32. [81]

    Section 199(2) of the Uniform Law provides that:

33. [82]

    It is evident that the provisions of s 93C(3) and s 199(2) are dealing with different functions of a costs assessor. This conclusion may be arrived at on two bases. The first is the nature of the function conferred.

34. [83]

    The power conferred upon the costs assessor under s 93C(3) is ancillary to any other substantive function engaged in by the costs assessor.

35. [84]

    It is clear that the function conferred on the costs assessor under s 199(2)(a) is, in contrast, a substantive power as illustrated by the use of the word “determine” on two occasions in subs (2).

36. [85]

    The second indicator of the difference is that the legislature has drawn a distinction between the scope of the functions of the costs assessor in each such provision as between the conferral of a discretion under s 93C(3) and the mandatory requirement to assess the validity of a costs agreement under s 199(2)(a).

37. [86]

    In s 199(2)(a), the legislature has used the word “must” to govern the function of the costs assessor. Normally the use of the word “must” involves the legislature entrusting a function which is to be taken prima facie as imposing an obligation to exercise that function: Grunwick Processing Laboratories Ltd v Advisory Conciliation & Arbitration Service [1978] AC 655 at 690 (per Lord Diplock) and 698 (per Lord Salmon).

38. [87]

    There is an even stronger inference that the word “must” in s 199(2)(a) creates a mandatory requirement in this case as the legislative scheme plainly indicates an intention that the assessment under s 199(2)(a) is a pre-requisite to the ultimate determination of the costs assessor. So much is also clear from the terms of s 199(2)(b) which, in my view, involves a discrete step for which a conclusion must be reached after the determination made under subs (2)(a). Under subs (2)(b), the cost assessor must determine whether the legal costs are reasonable, and if not, what legal costs (if any) are payable.

39. [88]

    Before turning to s 93C of the Uniform Law Application Act, I note that this is not a case where, strictly speaking, the legislature has within the one statute used the words “shall” or “must” in juxtaposition to the word “may”; this representing an aid to construction. However, it should be noted that there is clearly different language being employed between these related statutes by the use of the words “may” and “must”.

40. [89]

    It was not suggested by the defendant that the use of the word “may” in s 93C(3) of the Uniform Law Application Act did not confer a discretion. In any event, the language of the provision is consistent with any presumption of permissiveness that comes with the use of the word “may” because the provision is plainly permissive or facultative. This is illustrated by the function of the costs assessor being such that the costs assessor may determine an anterior or incidental question without creating an issue estoppel. [5]

41. [90]

    It is plain then that in exercising the function under s 199(2)(a) of the Uniform Law, the costs assessor is engaged in a different function from that reposing on the costs assessor, in the exercise of the costs assessor’s discretion, under s 93C(3) of the Uniform Law Application Act, such that, the costs assessor is not engaged in the determination of a anterior or incidental question of fact or law when making a determination under s 199(2)(a). This is further illustrated by the fact that the function exercised under s 93C(3) expressly excludes the establishment of an issue estoppel in the resolution of the question of fact or law when no such limitation operates with respect to the exercise of the function under s 199(2)(a).

42. [91]

    The different approaches to the conferral of power by the legislature under s 93C(3) and s 199(2) demonstrate the legislative intention to treat those functions as separate and discrete functions, such that the function exercised under s 199(2) is not an anterior or incidental question under s 93C(3).

43. [92]

    The plaintiff is correct to submit that, whilst a costs assessor may determine an anterior or incidental question of fact or law for the purposes of s 93C of the Uniform Law Application Act, but without establishing an issue estoppel for that question, that must also mean that a costs assessor may determine a non-anterior or non-incidental question of fact or law, which may have the effect of establishing an issue estoppel for that question. That is given effect under s 199(2) of the Uniform Law.

44. [93]

    It follows that a determination made under s 199(2)(a) of the Uniform Law may, in fact, create an issue estoppel. The remaining question, as properly posed by the plaintiff, is whether the question raised by the CC as to whether an agreement existed falls within the remit of the costs assessor under s 199(2)(a) of the Uniform Law.

45. [94]

    On one view of s 199(2)(a), the question may be resolved by the reference to the word “exists”, but that word appears in a phrase “a valid costs agreement exists” and hence, the question arises as to whether the use of the word “valid” might suggest that the provision was not intended to deal with the question as to whether there existed a costs agreement per se.

46. [95]

    In my view, the legislative intention is clear that the legislature contemplated that the costs assessor will determine whether, in law, a costs agreement exists and that the issue of validity is consistent with the costs assessor examining whether a costs agreement exists simpliciter: Judd v McKeon (1926) 38 CLR 380 at 386 (per Isaacs J).

47. [96]

    This conclusion is reinforced by the use of the word “exists” in the provision.

48. [97]

    The provisions of s 75(1), 76 and 77 of the Uniform Law Application Act do not alter, in my view, the above construction of s 93C(3) of the Uniform Law Application Act or s 199(2) of the Uniform Law. It is true that s 75(1) of the Uniform Law Application Act contemplates that an assessment of costs must be made in accordance with the terms of any order under which the costs are payable and that the terms of, inter alia, any order made (for example by a court). However, the assessment of costs in those circumstances will ordinarily be made by a costs assessor unless a lump sum order is made. In any event, the issue here is what costs are payable by the defendant to the plaintiff in accordance with the retainer for legal work engaged in by the plaintiff.

49. [98]

    Similarly, s 76 of the Uniform Law Application Act really corresponds to the s 199(2)(b) of the Uniform Law. The provisions of s 77(2) of the Uniform Law Application Act are similarly concerned with whether a costs agreement is conclusive of what is the fair and reasonable amount of costs for the work concerned.

50. [99]

    The defendant relied on the judgment of the Court of Appeal in Doyle at [55] – [62] (per Hodgson JA, with whom Mason P (as to the subject paragraphs) and Campbell JA agreed). The relevant passages of the judgment of Hodgson JA were as follows:

51. [100]

    The principles in Doyle do not, in my view, assist the defendant. The question relevantly considered in Doyle was whether the costs assessor had jurisdiction to determine a question of construction of the costs agreement (Doyle at [40]).

52. [101]

    The primary judge in Doyle dealt with a contention that the appeal before him was incompetent because the determination of the costs assessor had merged into a judgment, so that the underlying basis of the appeal had disappeared because the judgment itself was conclusive (Doyle at [37]). The primary judge expressed the view that the construction of the contracts was not an exercise contemplated by the Legal Profession Act 1987 (NSW) as being within the jurisdiction of the costs assessor (Doyle at [38]).

53. [102]

    However, on appeal, both parties to the proceeding submitted that a costs assessor did have jurisdiction to construe an agreement and determine its effect (Doyle at [55]).

54. [103]

    Hodgson JA did not find otherwise, but determined that where the existence of the terms of the agreement were in dispute “in a way that would require the hearing of evidence to resolve, it may be appropriate for the costs assessor to decline to resolve the dispute” (Doyle at [61]).

55. [104]

    A further consideration, in my view, is that the circumstances discussed in Doyle may be distinguished from the present matter. In the present matter, there was no dispute in both party/party cost assessment proceedings as to the terms of the written costs agreements. Rather, in the party/party cost assessment proceedings the defendant provided a copy of the written costs agreement to the costs assessor and asserted that she had a liability to pay the costs of the plaintiff on the basis of that written agreement.

56. [105]

    Accordingly, in this matter, there was no dispute in fact or in law raised by the defendant before the costs assessor in that respect. As such, there was no reason the costs assessor was precluded from making the assessment and issuing a certificate which could take effect as a judgment. Of course, the situation would be different if the defendant (as was the case in Doyle) had raised a dispute, such that the costs assessor ought to have declined to make a determination or issue a certificate unless and until that issue was resolved. However, that is not what occurred.

57. [106]

    The defendant also referred to the following extract from Bingham at [36]-[37] (per Basten AJA, with whom Meagher JA and White JA agreed):

58. [107]

    In reliance on this authority, the defendant submitted that the entire legal and factual substratum for the plaintiff’s abuse of process case must necessarily fail, as “the scheme of this legislation is that a litigant in the position of [the defendant], cannot be bound by what her former solicitor has told a costs assessor in order to make his costs orders, because that was the limit of what he was entitled to recover, particularly if there is no evidence, and there is no evidence, that his client knew about that or authorised it.”

59. [108]

    I do not accept the plaintiff’s contentions in this respect, for the following reasons:

    1. (1)

       The defendant’s submission is not factually accurate. The defendant is said to be “bound by what her former solicitor has told a costs assessor”. However, the party/party costs assessment proceedings in question were between the defendant and B&K, and on the face of the record, it was the defendant that provided the costs agreement to the costs assessor and asserted a liability to pay costs on the basis of that agreement. There is no reference to the plaintiff having any involvement, let alone making submissions to the costs assessor, in the party/party cost assessment proceedings.

    2. (2)

       In substance, the defendant relies on Bingham as authority for the proposition that the Uniform Law and Uniform Law Application Act permit the defendant to dispute the existence and terms of the written costs agreement, notwithstanding that the defendant had previously relied on those agreements, on the basis that they, in terms, existed. I do not agree with that submission.

    3. (3)

       In Bingham, while the Court of Appeal held that the primary judge was required to give independent consideration to the force and effect of provisions within a costs agreement (regardless of a cost assessors determination of the issue), this was in circumstances where the determination made by the costs assessor was directly in issue and under appeal. Hence, the Court of Appeal’s finding that s 93C of the Uniform Law Application Act expressly denies that a view formed by a cost assessor will be determinative, must be understood in this context.

    4. (4)

       In my view, the decision in Bingham is not analogous to the current matter. In the current matter, the defendant has never challenged the determination of party/party costs, where she specifically relied on the existence and terms of the written costs agreements. I accept, as was submitted by the plaintiff, that the defendant never sought to challenge those decisions because, no doubt, they benefitted her. It was only once the existence and terms of the written costs agreements did not benefit the defendant (in the determination of solicitor/client costs), that she sought to dispute the existence of the written costs agreements.

    5. (5)

       The judgment in Bingham is not authority for the proposition that in those circumstances, an estoppel may not arise because of an abuse of process.

60. [109]

    In my view, the conduct of the defendant as discussed in (4) of the preceding paragraph, goes to the heart of abuse of process, as is exemplified in the authorities relied on by the plaintiff: Reichel and Rahme Appeal.

61. [110]

    In Rahme Appeal, the Court of Appeal upheld a decision of Schmidt AJ that the defendant’s defence to a claim by the plaintiff in the Local Court for caveat costs constituted an abuse of process, on the basis that the matters raised in her defence had already been the subject of a claim determined in her favour.

62. [111]

    Directly analogous to the issues in these proceedings, the issue in Rahme Appeal was the fact that the defence filed by the defendant in the Local Court pleaded, inter alia, that the defendant did not enter a costs agreement with the plaintiff. It was held by Schmidt AJ that this constituted an abuse of process, by reason of the fact that the defendant had previously successfully claimed a legal obligation to pay the plaintiff its invoiced costs, pursuant to a valid costs agreement.

63. [112]

    It therefore followed that the defendant resiling from the case she had successfully pursued involved an impermissible abuse of process, and in the circumstances, the defendant’s success in the Local Court was inexplicable: Rahme Appeal at [24].

64. [113]

    As noted by Schmidt AJ in Kekatos Lawyers Pty Ltd v Rahme [2023] NSWSC 528 (at [64]):

65. [114]

    It follows that I have accepted the plaintiff’s submissions which are predicated upon an abuse of process and estoppel.

Pleading argument on the basis of embarrassment

1. [115]

   Whilst the plaintiff’s contentions as to embarrassment do have some force, it is unnecessary to deal with this argument given the conclusion I have reached in respect of abuse of process.

CONCLUSIONS

1. [116]

   In so far as the CC asserts that the written costs agreements do not exist, and the terms of the retainer with the plaintiff for the substantive proceedings and the appeal proceedings constitute terms other than those found in the written costs agreements (that is, in the form of the pleaded oral agreement), the CC constitutes an abuse of process by the defendant for the reasons given above.

2. [117]

   The abuse of process gives rise to an estoppel which prevents the defendant pleading in the CC that the trial costs agreement and appeal costs agreement do not exist or constitute the relevant retainer between the parties as to those proceedings.

3. [118]

   Contrary to the arguments advanced by the defendant, the provisions of the Uniform Law and the Uniform Law Application Act do not alter that conclusion.

4. [119]

   Various forms of relief were sought in the motion (some of which appeared to be in the alternative). However, the exact form of relief that would follow from the conclusions I have reached in this judgment were not the subject of detailed submissions by either party.

5. [120]

   Accordingly, I will give limited opportunity for short submissions as to the appropriate form of relief before pronouncing final orders. Those submissions will be made in writing.

6. [121]

   Further, the conclusions reached by the Court on the motion make appropriate that an order of costs in favour of the plaintiff, as against the defendant, on the motion and orders should be made accordingly.

ORDERS AND DIRECTIONS

1. [122]

   The Court makes the following orders and directions:

   1. (1)

      On or before 4pm Wednesday 12 November 2025, the plaintiff shall file and serve draft orders and submissions in support thereof, not exceeding two pages, as to the disposition of the motion in accordance with this judgment.

   2. (2)

      On or before 4pm Friday 14 November 2025, the defendant shall file and serve any alternative draft orders and submissions in support thereof, not exceeding two pages, as to the disposition of the motion in accordance with this judgment.