Minarovic v Unique Living Australia Pty Ltd (in liq)

1. [1]

   This is an appeal from a determination made by a decision of a costs review panel.

2. [2]

   By amended summons filed 1 December 2022, the plaintiff seeks leave to appeal and, if leave is granted, orders allowing his appeal and setting aside a determination of a costs assessor and a costs review panel decision in respect of an order in Supreme Court proceedings 2017/310144.

3. [3]

   The plaintiff is Mr Radoslav Minarovic. He is a builder and a director of Europlex Pty Ltd (‘Europlex’): See Europlex Pty Ltd v Unique Living Australia Pty Ltd; Unique Living Australia Pty Ltd v Europlex Pty Ltd [2018] NSWSC 1291 (‘the equity proceedings’). Unique Living Australia Pty Ltd (in liquidation) (‘Unique’) is in liquidation. There was no contradictor for reasons I will explain later in this judgment.

Background

1. [4]

   Dr Saif Hayek was a property developer and a director of Unique ([1], [4] of the equity proceedings).

2. [5]

   Dr Hayek and Mr Minarovic were friends, although they ultimately fell out ([3] of the equity proceedings).

3. [6]

   On 15 July 2015, Unique and Europlex executed a building contract relating to a property to Terrigal ([10] of the equity proceedings).

4. [7]

   Europlex and Mr Minarovic brought proceedings against Unique claiming that the building contract was a sham. Unique brought a cross-­claim against Europlex and Mr Minarovic personally, seeking monies due pursuant to the building contract ([10], [52] of the equity proceedings).

5. [8]

   Stevenson J held that the building contract was not a sham and that Unique was entitled to judgment against Europlex for the monies it sought ([46] - [51], [56] of the equity proceedings).

6. [9]

   Europlex also claimed for money said to be due from Unique in respect of a proposed joint venture to develop property at East Gosford. That claim was also dismissed ([103] - [109] of the equity proceedings).

7. [10]

   In its cross-claim, Unique alleged that Europlex, Mr Minarovic, and Mr Minarovic’s co-director, Mr Roman Cerny, made a number of representations concerning works on the Terrigal property which constituted misleading or deceptive conduct ([57] of the equity proceedings).

8. [11]

   On 13 October 2017, the proceedings were originally commenced by way of Summons in the Equity Division of this Court.

9. [12]

   Europlex was the first plaintiff and Mr Minarovic was the second plaintiff and second cross-defendant in the equity proceedings.

10. [13]

    On 7 November 2017, Unique filed a cross-claim in the equity proceedings against Europlex, Mr Minarovic and Mr Cerny. By the cross-claim, Unique sought damages for breach of contract against each of Europlex and Mr Minarovic, in addition to damages for statutory misleading or deceptive conduct jointly and severally against Europlex, Mr Minarovic and Mr Cerny.

11. [14]

    On 9 November 2017, Lindsay J made the following orders by consent:

    1. (1)

       Mr Minarovic be joined in the proceedings as a plaintiff.

    2. (2)

       The plaintiffs be designated as follows:

    3. (3)

       The plaintiffs file and serve, no later than 16 November 2017, an amended statement of claim (‘ASC’) accommodating the fact of joinder of the second plaintiff (namely, Mr Minarovic).

12. [15]

    On 29 November 2017, an ASC was filed. The plaintiff was named as Europlex and Unique was named as the first defendant.

13. [16]

    I have sighted and invited Mr Minarovic’s legal representatives to inspect the ASC placed on the equity court file, but they have elected not to do so. The plaintiff, Europlex, was named as the sole plaintiff, appearing on the title page of the ASC. This is incorrect. However, under the heading ‘relief sought’, the ASC referred to the first plaintiff, Europlex, or alternatively the second plaintiff, Mr Minarovic. This reference to Mr Minarovic as the second plaintiff reflects the order made by Lindsay J on 9 November 2017. Thus, the parties to the equity proceedings may properly be summarised as follows:

14. [17]

    Mr Minarovic, in his affidavit dated 25 September 2019 at [7] admitted that in November 2018, pursuant to court orders in proceedings 2017/310144, he was joined as a plaintiff to the proceedings and at all material times, was represented by Mr Ekes.

15. [18]

    On 1 and 2 August 2018, the proceedings were heard by Stevenson J. As his honour pointed out: “the significance [of Unique’s] misleading or deceptive conduct claim is that it is directed also to Mr Minarovic and Mr Cerny personally” ([59] of the equity proceedings).

16. [19]

    The representations pleaded in the cross-claim ranged over three years. Some were oral and others written. Some were also the subject of cross-examination ([84], [93], [99] of the equity proceedings).

17. [20]

    On 14 September 2018, Stevenson J delivered judgment and made final orders in the equity proceedings, as follows (‘the final orders’):

    1. (1)

       Amended Summons dismissed with costs;

    2. (2)

       Judgment for the cross-claimant (Unique) against the first cross-defendant (Europlex) in the sum of $4,997,824.26;

    3. (3)

       Order that the first cross-defendant pay the cross-claimant’s costs of the cross-­claim against it;

    4. (4)

       Cross-claim is dismissed with costs as against the second and third cross-defendants (Mr Minarovic and Mr Cerny).

18. [21]

    Thus, the result is that ASC was wrongly referred to as the “Amended Summons” and the record referred to the “Amended Summons” as dismissed. Europlex and Mr Minarovic were ordered to pay the costs. So far as the cross-claim is concerned, judgment was entered in favour of Unique as against Europlex in the sum of $4,997,824.26. Otherwise, the cross-claim was dismissed as against the second cross-defendant, Mr Minarovic, and the third cross-defendant, Mr Cerny. Unique was ordered to pay Mr Minarovic and Mr Cerny’s costs of the cross-claim.

19. [22]

    It is now convenient to refer to the cost assessor’s decision here.

20. [23]

    On or about 22 October 2018 Unique served an application for assessment of ordered costs against Mr Minarovic. His “costs respondent'’ named in the application were Europlex and Mr Minarovic.

21. [24]

    The costs application sought payment of costs and disbursements totalling $187,290.81.

22. [25]

    In its bill of costs, Unique claimed the sum of $187,290.81. The costs assessor, Michael Eagle (‘the costs assessor’) in his reasons recorded at [3] that on 18 December 2018, Europlex as the first costs-respondent and Mr Minarovic as the second costs-respondent were requested to supply any information they so desired. The costs respondents did not supply any information to the costs assessor.

23. [26]

    At [7]-[12], the costs assessor stated:

24. [27]

    On 8 May 2019, the costs assessor issued:

25. [28]

    It is convenient that I now briefly refer to the decision of the review panel, comprised of Stephen Lancken and Michael Robinson (‘the review panel’) dated 1 April 2020.

26. [29]

    On 4 June 2019, Unique obtained a judgment against Europlex and Mr Minarovic in the District Court in the amount of $162,944.90 ('the District Court judgment'). This judgment was obtained upon on the filing of two certificates of the cost assessor on 20 May 2019.

27. [30]

    On or about 27 May 2019, Europlex was placed into liquidation. On 9 June 2020, Europlex was deregistered.

28. [31]

    In or about July 2019, Mr Minarovic was served with a bankruptcy notice issued by Unique. Mr Minarovic deposes that this was the first he had heard of the District Court judgment or the outcome of the costs assessment, the conduct of which he says had been left with his then solicitor. On 27 August 2019, Mr Minarovic filed a review application in respect of the costs assessment, together with submissions and an application to extend time for the review. Mr Minarovic, in his affidavit dated 25 September 2019, deposed that he corresponded with his former solicitor, Mr Ekes, by email. Mr Ekes acted for the plaintiff up until 15 March 2019. Unique opposed any extension.

29. [32]

    On 11 November 2019, Mr Minarovic’s application for an extension of time to file the review application was granted.

30. [33]

    On 23 December 2019, Unique’s solicitor emailed the review panel, stating:

31. [34]

    On 30 January 2020, the review panel wrote to the parties inviting the liquidator of Unique to make submissions. No submissions were forthcoming.

32. [35]

    The review applicant was Mr Minarovic and the review respondent was Unique. The review panel comprised of Stephen Lancken and Michael Robinson (‘the review panel’). On 30 January 2020, Mr Minarovic supplied lengthy submissions to the review panel in which he detailed what he claims are multiple errors in the costs assessment process including those relied on in this appeal as substantive grounds.

33. [36]

    The liquidator did not provide any submissions to the review panel. After discussing its role, the review panel stated at [6]-[9]:

34. [37]

    On 13 October 2022, this Court’s manager, costs assessment sent to Mr Minarovic the following documents:

35. [38]

    On 9 November 2022, Mr Minarovic filed an appeal in this Court.

36. [39]

    The appeal is brought pursuant to s 89(1)(b) Legal Profession Uniform Law Application Act 2014 (NSW) (‘LPUL Act’) which relevantly provides: “[a] party to a costs assessment that has been the subject of a review under this Part may appeal against a decision of the review panel concerned to the Supreme Court, in accordance with the rules of the Supreme Court, but only with the leave of the Court if the amount of costs in dispute is less than $100,000.” The amount of costs in dispute is the entire award, which exceeds the sum of $100,000.00.

37. [40]

    On appeal, the Supreme Court has all the functions of the review panel and may make such other orders in relation to the appeal as it sees fit. The appeal is by way of a rehearing, and fresh evidence or evidence in addition to or in substitution for the evidence before the review panel or costs assessor may, with the leave of the Court, be given on the appeal.

38. [41]

    The first issue to be dealt with is whether leave under s 500(2) of the Corporations Act 2001 (Cth) should be granted for Mr Minarovic to bring the present appeal with Unique as respondent. Leave is required as Unique is in liquidation.

39. [42]

    Section 500(2) of the Corporations Act 2001 (Cth) reads:

40. [43]

    In Huang v Hua Cheng International Group Pty Ltd [2019] NSWCA 155 (‘Huang’), the Court of Appeal (Basten, Payne and McCallum JJA) stated at [22]:

41. [44]

    First, the interests of justice favour leave being granted where Mr Minarovic has suffered judgment in favour of a corporation which has entered voluntary liquidation while Mr Minarovic’s rights of appeal have not expired.

42. [45]

    Secondly, the liquidator of the defendant has filed a submitting appearance and therefore does not contend that leave should not be granted. As a practical matter, the proceedings will not therefore involve a distraction to the liquidator (Zervas v Burkitt [2019] NSWCA 112 at [18] (Gleeson JA)), which is a consideration in favour of granting leave.

43. [46]

    Thirdly, the liquidator of the defendant has, through and on the advice of his solicitors stated “the Company and Liquidator are not liable to and will not take part in the Proceedings”. The liquidator further advised that he has “assigned the Company’s cause of action against the plaintiff (the subject of the Summons) to [Dr] Saif Hayek.”

44. [47]

    Dr Hayek has been on notice of the appeal since its outset and has been attempting to enforce the District Court judgment as the purported assignee. He contends, through his solicitor, that “[i]n the absence of any stay, Dr Hayek is within his rights to enforce the judgement (sic) debt as the Assignee”.

45. [48]

    Therefore, the interests of justice do not favour Mr Minarovic being subjected to such enforcement at the hands of Dr Hayek (who contends he has obtained the assignment of the District Court judgment “for valuable consideration”), while simultaneously preventing Mr Minarovic from exercising his appeal right to set aside the underlying subject matter of that judgment. The purpose of s 500(2) Corporations Act 2001 (Cth) does not extend to the protection of third party purported assignees for value. This is particularly so where Dr Hayek “expressly agreed, and acknowledged that neither the Company, nor the Liquidator … warrant or represent the accuracy, enforceability, recoverability or commerciality, or any other matter concerning the [District Court] judgment.”

46. [49]

    Fourthly, if it be relevant, Dr Hayek does not oppose leave being granted.

47. [50]

    For the above reasons, Mr Minarovic submitted that leave should be granted nunc pro tunc pursuant to s 500(2) Corporations Act 2001 (Cth) to begin and proceed with this appeal.

48. [51]

    The actual decision that Mr Minarovic appeals is that made by the cost assessment review panel. A cost certificate per se is not an order of the Court by virtue of r 36.16 of the Uniform Civil Procedure Rules 2005 (‘UCPR’). The costs assessment can be registered as a judgment of the Court in accordance with Pt 36, r 10 of the UCPR. This did occur when the judgment certificates, issued by the appeal panel, were registered in the District Court.

49. [52]

    In the circumstances, the plaintiff is entitled to leave pursuant to s 500(2) of the Corporations Act 2001 (Cth). I grant Mr Minarovic leave to proceed against Unique.

50. [53]

    Faced with an application for assessment of costs, the first task for a costs assessor is to identify the costs orders relied on. The second task is to construe these orders. In my view, the onus was upon Mr Minarovic to correct the record which referred to an “Amended Summons” rather than an “Amended Statement of Claim”. He did not do so. In any event, it would have not made any difference to the assessment of costs.

51. [54]

    If there was an amended summons to which Mr Minarovic was a party, the costs order did not require him to pay the costs of Europlex’s failed action.

52. [55]

    The third threshold ground of appeal assumes, contrary to the above, both that the costs assessor should have been satisfied that there was an amended summons and that it was one to which Mr Minarovic was a party. If so, it is submitted that, on its true construction, order 1 did not require Mr Minarovic, as second plaintiff, to pay Unique’s costs of Europlex’s failed action as first plaintiff.

53. [56]

    It is well established that court orders should not be read in isolation from the reasons which gave rise to them. In Yates Property Corporation Pty Ltd v Boland (1998) 89 FCR 78 (‘Yates’) Drummond J (with whom Sundberg and Finkelstein JJ agreed), said at 78-79:

54. [57]

    In Athens v Randwick City Council (2005) 64 NSWLR 58; [2005] NSWCA 317 (‘Athens’), Santow JA (with whom Tobias JA agreed) observed at [129]:

55. [58]

    These statements in Yates and Athens continue to be cited by intermediate appellate courts as authority for the propositions extracted above: for example Slea Pty Ltd v Connective Services Pty Ltd [2018] VSCA 180 at [30] (Ferguson CJ, Whelan and McLeish JJA) and Lim v Comcare [2019] FCAFC 104 at [40 ]- [41] (McKerracher, Markovic and Snaden JJ).

56. [59]

    The judgment of Stevenson J was attached to the costs application. With respect, the text of the judgment does not refer in any way to a claim brought by Mr Minarovic as a plaintiff. Rather his Honour refers only to, and carefully considers, the claims brought and relief pressed by Europlex, concluding that Europlex’s (multiple) claims “should be” and “must be” dismissed, at [23], [29], [118].

57. [60]

    The “second plaintiff” is not mentioned by that label in the text of the judgment; indeed the only use of this phrase is in the “parties” field of the judgment.

58. [61]

    Mr Minarovic is however personally mentioned over 60 times in his capacity as a witness and director of Europlex in respect of the claims brought and defended by Europlex. His potential personal liability as a cross-defendant is also carefully referred to in the reasons: “[t]he significance of [Unique’s] misleading or deceptive conduct claim is that it is directed also to Mr Minarovic and Mr Cerny personally. For the reasons that follow, I am not satisfied that Unique has any entitlement for relief against either Mr Minarovic or Mr Cerny on this basis.”

59. [62]

    What is not stated is any suggestion that Mr Minarovic brought a claim as second plaintiff, that he might have had a liability having done so or that any such claim was judicially considered and rejected. There is no reference to an “Amended Summons”.

60. [63]

    In the language used by Santow JA in Athens, the effect of the judgment, insofar as plaintiff’s claim was concerned, was that Europlex failed in its claims against Unique. Those claims being the claims by Europlex, which were precisely identified, extensively considered and, ultimately, rejected by Stevenson J for the reasons stated in his Honour’s judgment.

61. [64]

    Such an effect is also reflected in the “decision” stated in the heading of the judgment: “plaintiff’s claim to be dismissed; cross-claimant entitled to contractual damages”.

62. [65]

    In these circumstances it is submitted that, on its true construction, order 1 required Europlex to pay Unique the reasonable costs caused by Europlex as first plaintiff, and Mr Minarovic to pay Unique the reasonable costs (if any) caused by Mr Minarovic as second plaintiff. In other words, liability under order 1 was several.

63. [66]

    This is not to deny meaning to any costs order against Mr Minarovic. Rather, it is to ensure, as required by Athens, that the order conform to the judgment as the source of the order. If there were any lurking reasonable costs occasioned by conduct of Mr Minarovic as second plaintiff, Unique would be entitled to them. What Unique would not be entitled to is to bring a claim against Mr Minarovic for all the costs of Europlex’s failed action against Unique, which was the subject of the judgment. By reference to the primacy of the judgment as a source of the interpretation of the order, those costs were a matter for Europlex.

64. [67]

    Not only is this interpretation consistent with the intent of the judgment, it is also consistent with principle in circumstances where Mr Minarovic was the director of Europlex. There is no reason a director should be required to, in effect, personally indemnify a company for a costs award when the company has failed in commercial litigation. The Court made no finding that the corporate veil ought to be pierced. An interpretation of order 1 to that effect is neither necessary nor warranted.

65. [68]

    The costs application identifies no costs caused to Unique, reasonable or otherwise, by Mr Minarovic as second plaintiff. The costs should therefore be assessed at “nil”.

66. [69]

    The order made on 14 September 2018, that the “Amended Summons” be dismissed is incorrect. No amended summons was ever filed. However, as previously explained on 29 November 2017, an ASC was filed. The mistake as to the name of the document should have been corrected by virtue of the slip rule (UCPR r 36.17). Had a party brought the “slip” to the attention of the Trial Judge, it would have been corrected.

67. [70]

    However, although Mr Minarovic was not named as a party in the description of the ASC, Mr Minarovic was the second defendant. In the ASC it was pleaded at [1] that:

68. [71]

    Mr Minarovic’s liability arose by virtue of him being a director of Europlex. This ground of appeal fails.

69. [72]

    If I am wrong, I shall briefly deal with the alternative grounds of appeal in this Court. The grounds of appeal are that the review panel erred in law:

    1. (1)

       In affirming the costs assessor's determination, contrary to the obligation in s 70(3) Legal Profession Uniform Law Application Act 2014 (NSW), to issue one certificate in relation to a single application for an assessment of costs payable under multiple orders made between the same parties in proceedings without such certificate separately specifying the amount determined for each order.

    2. (2)

       In failing to provide any or any adequate reasons for its decision.

    3. (3)

       By failing to give any or any proper consideration to, and to assess costs in accordance with, the Plaintiff's Additional Submissions dated 30 January 2020.

    4. (4)

       To determine (correctly or at all) what was a fair and reasonable amount of costs for the work claimed as required by s 76 Legal Profession Uniform Law Application Act 2014 (NSW).

70. [73]

    In summary, the plaintiff’s counsel submitted that the appeal should be allowed. First, because there was no evidence before the costs assessor that the proceedings actually involved an “Amended Summons”. Secondly, if the existence of an amended summons could be assumed, the likelihood was that Mr Minarovic was not a party to it. Thirdly, if there was an amended summons to which Mr Minarovic was a party, the costs order should not have been construed to require him to pay the costs of another party’s unsuccessful claim, when proper regard was had.

71. [74]

    If the appeal is allowed for any of the substantive reasons, the Court ought also to set aside the determination of the costs assessor and substitute an assessment of “nil” for the amount determined bv the costs assessor. This follows for three reasons: (i) Unique (which has the onus) submits to the orders of the Court and makes no submission as to the quantum of the costs order; (ii) the evidence supports an inference that Unique has not paid, and has no liability to pay any costs of the order, meaning any quantification greater than "nil” would breach the indemnity principle; and (iii) the evidence before the costs assessor was insufficient to quantify any reasonable costs and disbursements in respect of the putative “Amended Summons”.

72. [75]

    Ancillary relief should be granted to set aside the judgment debt entered by filing the certificate of assessment and to set aside the certificates of the assessor and panel.

73. [76]

    The reasons and certificate for determination of costs did not distinguish between the costs potentially payable by Europlex and by Mr Minarovic. The effect of this was to fix both Europlex and Mr Minarovic with exactly the same amount of costs, notwithstanding the terms of the final orders.

74. [77]

    It is submitted that the costs assessor and appeal panel committed numerous legal and factual errors which vitiated the assessment. These are summarised below.

75. [78]

    The appeal should be allowed for the only costs order that could possibly have been made against Mr Minarovic in the final orders, order 1 that the “Amended Summons dismissed with costs.” Further, by order 4, Mr Minarovic achieved an award of costs on his cross-claim that was in his favour.

76. [79]

    In the alternative, the appeal against the decision of the review panel should be allowed for a number of substantive reasons, these can be summarised as follows: the construction of costs order, indemnity costs, costs not fair and reasonable, adequate reasons and separate identification of each costs order.

77. [80]

    All of these grounds of appeal, expressed, in various ways, centre upon the way the review panel dealt with the cost orders. Not surprisingly, the costs assessor did not address this issue as Mr Minarovic did not furnish any documents to him. Hence, I shall deal with all the alternate grounds of appeal together.

Alternate appeal grounds 1 to 4

1. [81]

   The criticisms of Mr Minarovic were directed to the costs assessor in relation to his costs assessment. The costs assessor had submissions of Minarovic before him. The appeal has been and should rightly be taken against the review panel. It had submissions by Mr Minarovic that raised the issue of separate costs orders in the same decision and detailed specific objections to the items claimed in the bill of costs.

2. [82]

   The review panel issued one certificate that related to multiple costs orders without separately specifying the amount for each order (respectfully, a well-established error of law: Wende v Horwath (NSW) Pty Ltd (2014) 86 NSWLR 674 (‘Wende’).

3. [83]

   In Wende, it was held by the majority, (Beazley P and Barrett JA (Basten JA not deciding) that it was possible to make a single application for assessment in respect of more than one costs order, see [8], [195]. The majority held that if a single application was made in relation to more than one costs order, the costs assessor was required to make a determination as to the amount that was a fair and reasonable amount for the costs that were subject of each costs order and to issue a separate certificate for each such amount: [9], [45], [197], [209]. Where an ‘omnibus’ application for the assessment of costs was made for more than one costs order, a costs assessor was not permitted to make a global determination of the fair and reasonable amount of the costs which were subject of the various costs order for which assessment was sought ([10]-[11], [45]-[47], [200]-[201]). Further, in giving reasons for its decision, it is sufficient for the review panel to say, in effect, that it shared and endorsed the reasons for the conclusions stated by the assessor that the panel, in turn, considered it to be correct ([1]; [89]; [179]).

4. [84]

   First, contrary to the obligation in s 75 of the LPUL Act (which requires that an assessment of ordered costs must be made in accordance with the terms of the costs order), the costs assessor assessed costs against Mr Minarovic on the basis that he was liable to pay the costs of a cross-claim on which, in fact, Mr Minarovic was successful and had a costs order in his favour (being order 4).

5. [85]

   Some of the professional costs, which either expressly relate to the cross-claim or do not identify whether they relate to the claim or cross-claim, total over $92,000.

6. [86]

   For example, the items allowed in full against Mr Minarovic include those such as “preparing statement of cross-claim” (item 166, $2,400) and “final review of cross-claim” (item 177, $1,200).

7. [87]

   The costs assessor also allowed 100% of the professional costs for the hearing (including all preparation and both days of the hearing) even though both the claim and cross-claim were determined in the hearing. The immediate preparation and attendance costs alone of approximately $65,000 (items 86-102, 188-196 and 207-219) were allowed.

8. [88]

   Even the filing fee for the cross-claim was awarded against Mr Minarovic (item 136, $3,014).

9. [89]

   The bill of costs totalled $33,077. The costs assessor allowed solicitor costs in the sum of $31,142.50, at a recovery rate of 94%. He allowed 100% of counsel’s fees. In effect, the costs assessor provided Unique with a full indemnity for its costs.

10. [90]

    Numerous examples of costs that would not be allowed on the ordinary basis can be identified. They include using senior counsel to undertake legal research and attend on judgment; research and conferences in relation to an interlocutory injunction in circumstances where there was no evidence of one, and costs of a second set of barristers reading the brief after the first set had evidently been replaced.

11. [91]

    Contrary to the obligation in s 76 of the LPUL Act (which requires the costs assessor to determine a fair and reasonable amount of costs for the work concerned), the costs assessor awarded costs against Mr Minarovic for costs which were not fair and reasonable, including because they pre-dated the proceedings or his involvement in them, were in respect of work that did not relate to the proceedings or which related to other proceedings or which was not done at all.

12. [92]

    Some of the irrelevant matters include work in relation to a statutory demand, Local Court proceedings, an AVO, a Fair-Trading complaint and insurance work.

13. [93]

    Contrary to the obligation in reg 41 of the Legal Profession Uniform Law Application Regulation 2015 (NSW) (which requires the giving of reasons and an explanation of the basis on which the costs were assessed), the costs assessor gave no adequate reasons.

14. [94]

    The reasons of the costs assessor speak for themselves. There were no reasons given why Mr Minarovic was assessed to pay the items referred to above. With respect, it is difficult to see how there could have been.

15. [95]

    Contrary to the obligation in s 70(3) of the LPUL Act (which requires a costs assessor to separately specify the amount determined for each costs order if issuing one certificate in relation to multiple costs orders), the costs assessor did not separately specify the costs payable for each costs order.

16. [96]

    The statute prescribes what must be done. The statute requires a certificate to specify the amount determined for each order separately. The certificate does not comply with s 70(3) of the LPUL Act. This is an error of law, see Wende.

17. [97]

    Mr Minarovic and Europlex have each been fixed with exactly the same amount of costs despite having different orders for and against them on the cross-claim. This is precisely the mischief that the statute is intended to prevent.

18. [98]

    Contrary to the obligations in ss 69 and 85(2) of the LPUL Act (which requires a review panel to give due consideration to any submission made) and reg 51 Legal Profession Uniform Law Application Regulation 2015 (NSW) (which requires the giving of reasons and an explanation of the basis on which costs were assessed) the review panel failed to give due consideration to Mr Minarovic’s submissions (which included all the points raised above) and gave no adequate reasons for affirming the costs assessor’s decision.

19. [99]

    Contrary to the obligation in s 76 of the LPUL Act, the review panel failed to determine a fair and reasonable amount of costs for the work concerned. Instead, the panel affirmed the costs assessor’s quantification.

20. [100]

    For the reasons set out above, the appeal should also be allowed on the substantive grounds. The Court has jurisdiction to substitute an assessment of “nil” for the amount determined by the costs assessor. For the following reasons, such an award is appropriate.

21. [101]

    Unique, who bears the onus, makes no submissions as to quantum.

22. [102]

    The evidence suggests that the costs were never paid and that Unique is now not liable to pay them. Any award of costs would infringe the indemnity principle.

23. [103]

    As was stated by Basten JA in Wentworth v Rogers (2006) 66 NSWLR 474 at [126]: “the principle does not require that the costs have been paid, but it does require that there be a legal liability to pay costs.”

24. [104]

    The review panel construed the costs order “Amended Summons dismissed with costs” to require Mr Minarovic to pay costs of a cross-claim in respect of which Mr Minarovic in fact had a costs order in his favour (construction of costs order).

25. [105]

    The plaintiff submitted that Mr Minarovic and Europlex had each been fixed with exactly the same amount of costs despite having different orders for and against them on the cross-claim.

26. [106]

    The plaintiff submitted that contrary to the obligations in ss 69 and 85(2) of the LPUL Act (which requires a review panel to give due consideration to any submission made) and reg 51 Legal Profession Uniform Law Application Regulation 2015 (NSW) (which requires the giving of reasons and an explanation of the basis on which costs were assessed) the review panel failed to give due consideration to Mr Minarovic’s submissions (which included all the points raised above) and gave no adequate reasons for affirming the costs assessor’s decision.

27. [107]

    The review panel failed to differentiate between the costs orders of Mr Minarovic and Europlex. I would allow the appeal to be heard with due consideration to the distinction between their costs orders.

28. [108]

    This ground of appeal repeats some of the submissions made in appeal ground 1 but are directed to the review panel.

29. [109]

    The plaintiff has submitted that the review panel construed the costs order to require costs to be assessed on the indemnity basis.

30. [110]

    The plaintiff has submitted that there is evidence that supports an inference that Unique has not paid and has no liability to pay any costs of the order, meaning any quantification greater than "nil” would breach the indemnity principle.

31. [111]

    The indemnity principle dictates that a party is only entitled to recover the costs that they have incurred. Any additional recovery would be impermissible, as this would be perceived as both a bonus to the winning party and a penalty on the losing party.

32. [112]

    The plaintiff submitted that contrary to the obligation under UCPR r 42.2 (which requires that, absent an order to the contrary, costs payable to a person under an order of the Court are to be assessed on the ordinary basis) the costs assessor assessed costs of the claim against Mr Minarovic on the indemnity or a “full indemnity” basis.

33. [113]

    For example, the bill of costs totalled $33,077. The costs assessor allowed solicitor costs in the sum of $31,142.50, at a recovery rate of 94%. He allowed 100% of counsel’s fees. In effect the costs assessor provided Unique with a full indemnity for its costs.

34. [114]

    There is evidence that the review panel has erred by assessing costs on an indemnity basis rather than on the ordinary basis. On this fact, I would allow the ground of appeal to be heard.

35. [115]

    The review panel assessed costs which were not fair and reasonable.

36. [116]

    Contrary to the obligation in s 76 of the LPUL Act, the review panel failed to determine a fair and reasonable amount of costs for the work concerned. Instead, the panel affirmed the costs assessor’s quantification.

37. [117]

    Section 76 of the LPUL Act reads:

38. [118]

    The factors that one must have regard in s 172(1) and (2) of the Legal Profession Uniform Law 2014 (NSW) read:

39. [119]

    The use of senior counsel to undertake legal research and attend on judgment; research and conferences in relation to an interlocutory injunction in circumstances where there was no evidence of one, and costs of a second set of barristers reading the brief after the first set had evidently been replaced were not fair and reasonable.

40. [120]

    The plaintiff submitted that the review panel gave no adequate reasons (the totality of any reasoning of the assessor and panel was less than one page).

41. [121]

    The review panel stated at [7.1] that:

42. [122]

    The plaintiff argued that the reasons of the costs assessor spoke for themselves. There were no reasons given why Mr Minarovic was assessed to pay the items referred to above.

43. [123]

    As stated earlier in this judgment, the plaintiff criticises the costs assessor’s decision. The costs assessor was not supplied with any submissions or objections by Mr Minarovic. In any event, the appeal can only be brought against the review panel, who were supplied with submissions by Mr Minarovic.

44. [124]

    In Wende, at [8]-[9], Beazley P held:

45. [125]

    At [45], Basten JA held:

46. [126]

    At [195]-[209], Barrett JA held:

47. [127]

    Therefore, in relation to appeal ground 1, the review panel misconstrued its statutory obligation in assessing a fair and reasonable amount for the cross-claim (appeal ground 3 and 4). It also did not give reasons for doing so (appeal ground 2).

48. [128]

    I grant leave pursuant to s 500(2) of the Corporations Act 2001 (Cth) to Mr Minarovic to proceed against Unique. The review panel erred in law by not giving reasons as to how it dealt with Mr Minarovic favourable costs order, as explained in relation to Unique’s cross-claim against him. The decision of the Review Panel dated 21 April 2020 should be set aside. The matter is remitted to the costs manager to be dealt with according to law.

49. [129]

    It is my view that as there is no active contradictor, the appropriate orders as to costs is that there be no order as to costs.

    1. (1)

       I grant leave pursuant to s 500(2) of the Corporations Act 2001 (Cth) to Mr Minarovic to proceed against Unique Living Australia Pty Ltd (in liq)

    2. (2)

       The decision of the review panel dated 1 April 2020 be set aside.

    3. (3)

       The matter is remitted to the manager of costs assessment to be dealt with according to law.

    4. (4)

       No order as to costs.