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Emprove Holdings Pty Ltd v Tucker & Cowen Solicitors QDC 233
DISTRICT COURT OF QUEENSLAND
Emprove Holdings Pty Ltd v Tucker & Cowen Solicitors  QDC 233
EMPROVE HOLDINGS PTY LTD
TUCKER & COWEN SOLICITORS
1775 of 2016
Application for leave to appeal
5 September 2016 – delivered Ex Tempore
RS Jones DCJ
C Wilson for the applicants/appellant
G Dietz for the respondents
Byrne Lovell Lawyers for the applicants/appellants
Tucker & Cowen Solicitors for the respondent
- HIS HONOUR: I am concerned here with an application seeking leave to appeal orders made by his Honour Shearer on 15 April 2016. The parties named in that order are one Emprove Holdings Proprietary Limited and Tucker & Cowen Solicitors, and I will come back to the terms of that order in due course.
- Leave to appeal is required because the amount involved is less than the “minor civil dispute limit”, and in this proceeding, as I understand it, the total of the amount involved is just under seven and a-half thousand dollars.
- Section 45 to which I was referred to in subsection (2) prescribes that before granting leave, the court should be satisfied that there is some important principle of law or justice involved. I must say while harbouring some genuine reservations about whether an important principle of law or justice is involved, I have come to the conclusion, that in circumstances where the point was not strongly pressed against the applicants that leave ought be granted because it also appears to me that it is the most expeditious way to deal with this matter, that is, address the merits raised here and now.
- The relevant players, if I can put it in those terms, in this proceeding are Emprove Holdings Proprietary Limited, Tucker & Cowen solicitors and a Mr James Lovel, who is a solicitor, but perhaps more relevantly, the sole director of the company.
- On or about 23rd September 2015, Tucker Cowen forwarded to Mr Lovel a client agreement which, relevantly, identified Tucker Cowen as being solicitors, one of the clients being James Lovel and the other client being Emprove Holdings Proprietary Limited. The address of James Lovel, the contact phone number and email address are identical to that provided for Emprove Holdings Proprietary Limited. Under that client agreement, the agreed work to be performed is:
To advise you and (if applicable) to act on your behalf with respect to a potential claim for insolvent trading as against the directors of Freecity Proprietary Limited (in liquidation) including obtaining a transfer of relevant files from Small Myers Hughes (solicitors who have previously advised you) advising as to any potential claim, liaising with – liaising with the liquidators (if necessary), commencing proceedings, taking further steps in the proceeding up to and including a trial or earlier settlement and such other incidental work as is reasonably required for the proper conduct of the matter.
- A dispute has arisen about the fees owed to Tucker Cowen and on 15 April 2016, the company Emprove Holdings filed an application which, relevantly, provided:
Take notice that the applicant is applying to the court for an order for the assessment of the following legal costs:
- All legal costs of the bill issued by the applicant – by the respondent for $2309.42 and dated 31 October 2015.
- All legal costs on the bill issued by the applicant to – issued to the applicant by the respondent for $5072.67 and dated 24 December 2015.
There will be a directions hearing in relation to the application at --
- And thereafter a time and place for the hearing is set out.
- The matter came on before the court below on 15 April 2016 and after hearing from the parties, his Honour made orders in the following terms:
- The legal costs referred to in the bills issued by the respondent and contained in exhibits JAL2 and JAL3 of the affidavit of James Andrew Lovel sworn and filed on 1 March 2016 be assessed by reference to the client agreement contained in exhibit DHS1 to the affidavit of David Hiner Schwartz sworn 5 April 2016 under division 7 of part 3.4 of the Legal Profession Act 2007.
- Jeffery Karl Peterson (the cost assessor) be appointed the cost assessor to conduct the assessment.
- Pursuant to rule 715 of the Uniform Civil Procedure Rules, the cost assessor is empowered to give directions about the conduct of the assessment process.
- The applicant pay the respondent’s cost of the application to be assessed on an indemnity basis.
- That order is said to be by consent, but from the material I have been taken to, that would seem to be very much an error. In any event, it is the substance of the orders that are in issue here. The exhibits JAL2 and JAL3 referred to are memorandum of fees and outlays issued by Tucker Cowen and addressed to Mr Lovel and Emprove Holdings Proprietary Limited.
- At the commencement of the proceedings on 15 April 2016 when the matter came before the court below, Mr Lovel announced that he appeared on behalf of the applicant, Emprove Holdings. At that stage, Mr Lovel was not appearing as a party, but as an agent for that company. It is clear indeed from the face of the application that he was at that time not a party to that proceeding.
- At the hearing, Mr Lovel, after announcing that he was appearing on behalf of the applicant company, also indicated that he had prepared a written outline of argument that was then handed up to the Bench. That document is of some significance for the reasons I will come to in due course. Under the heading Applicant’s Outline of Submissions, it is asserted in the first four paragraphs:
- The applicant seeks an assessment of legal costs pursuant to section 335 of the Legal Profession Act 2007 (LPA).
- The relevant legal costs on the bills appearing as exhibits JAL2 and JAL3 to the affidavit of James Andrew Lovel sworn and filed 1 March 2016.
- The parties have not agreed on which particular cost assessor should conduct the cost assessment.
- Where the parties have not agreed on a cost assessor, rule 743G(3) of the UCPR provides that the Court may:
(a) order that a particular cost assessor carry out the assessment, or
(b) order that the application be heard by this court.
- Thereafter, what is described as a summary of information is set out and, in particular, identifies three nominated cost assessors: a Mr Eastwood, a Mr Graham Robinson and a Mr Jeffery Peterson.
- Emprove had advanced and obtained the consent of Mr Eastwood and Mr Robinson and nominated them as appropriate assessors. The respondent had obtained the consent, albeit some time later, as it would appear, of Mr Jeffery Peterson and advocated for Mr Peterson to be the assessor. Mr Eastwood practises on the Gold Coast, Mr Robinson, it is agreed, practises in Brisbane, and Mr Peterson practises in Ipswich.
- The respondent, Tucker Cowen, indicated to the applicant that they – although Mr Eastwood was not to their nominated choice, they would agree to him being the cost assessor.
- Returning to Mr Lovel’s written submissions, three objections to the appointment of Mr Peterson are set out and at the end, the orders sought are as follows:
- That Graham Robinson be appointed as cost assessor to carry out a cost assessment of all legal costs on the following bills issued to the applicant by the respondents
(a) dated 31 October 2015 for $2309.42 and
(b) dated 24 December 2015 for $5072.67
- That the costs of and incidental to this application be reserved.
- At this stage, it should also be pointed out that in this written outline, the liability of Mr Lovel under the client agreement was not raised, let alone addressed. Nor did it seek directions in any express way, and indeed, no directions were sought. What was sought was the relief to which I have already referred.
- As indicated, notwithstanding that Mr Eastwood was not Tucker Cowen’s first choice, they agreed to him being appointed, and, in fact, had prepared consent orders to that effect in the hope of avoiding having to have the matter heard before the court, presumably to be dealt with on the papers. That offer was not accepted.
- As I have already referred to, the terms of the orders made by the court below, save for the final orders concerning costs on an indemnity basis, effectively provide for relief which would be substantially in the form originally sought by the applicant, save, of course, for the substitution of Mr Peterson’s name for that of Mr Robinson.
- The cost assessor will, of course, have regard to the costs and outlays identified in the two exhibits JAL2 and JAL3 to which I have referred by reference to the client agreement, that identified Mr Lovel as the first client and the company as the second client. At least as I understand it, it is not in dispute that the company considers itself bound by the client agreement, but Mr Lovel strongly contests that he is or ever was a client under that agreement and accordingly denies any liability or obligation under it.
- Turning, then, to the issues in the appeal, they are out in the amended notice of appeal and are stated as follows:
1A. The learned Magistrate acted beyond power in appointing the said Jeffery Karl Peterson as cost assessor at the said directions hearing on 15 April 2016 before a court had tried and determined the question whether the second applicant/appellant was liable to pay the respondent’s cost under the said costs agreement.
1B. Further or alternatively to the appeal ground 1B, the learned Magistrate acted beyond power, or alternatively, erred in the exercise of his discretion in determining at the said directions hearing on 15 April 2016 that the second applicant/appellant was liable to pay the respondent’s cost under the said costs agreement.
2. The learned Magistrate erred in concluding that the location of the assessors proposed by the parties was not of significance in his direction and his discretion miscarried accordingly.
2A. Further or alternatively to appeal ground 2, the learned Magistrate erred in concluding that the hourly rate of the assessors proposed by the parties was the only proper basis for distinguishing between them and his discretion miscarried accordingly.
- The notice of appeal then went on in paragraph 4 to say:
The Magistrate erred in failing to give any or any proper reasons for making the findings and orders referred to at appeal grounds 1A, 2, 2A and 3 above.
- I suppose in that context I should also quote ground 3:
The learned Magistrate erred in ordering that the first applicant pay the respondent’s cost of the application on an indemnity basis in circumstances where none of the usual discretionary factors governing the exercise of the court’s discretion were alive and his discretion miscarried accordingly.
- The relief that is sought is not surprising, namely, that the appeal be allowed and the offending paragraph of the orders made be set aside. A further grant of relief was, in effect, seeking declaratory relief.
- In appeals such as this, it is recognised that this court is required to make its own determination concerning the facts in issue from the evidence, but, of course, giving due deference and attaching due weight to the findings of the Magistrate below, but, of course, it is recognised that if the material reveals an error, this court should not hesitate in rectifying that error.
- It is well recognised that in appeals such as this very much involving an exercise of a discretion, that an error or errors of the type identified in the well-known case of the House v The King need be considered – the reference to that particular case is (1936) 55 CLR 499 – where Dixon, Evatt and McTiernan JJ, as Dixon then was, stated the well-known passage:
It is not enough that judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determine should be reviewed and the appellate court may exercise its own discretion in substituting for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure to properly exercise the discretion which the law reposes in the court of first instance.
- Returning, then, to the grounds of appeal that I have identified and which were agitated by Mr Wilson of counsel for the applicant, I will address them in order. The first matters to be addressed are those raised in paragraphs 1A and 1B. The first matter to be addressed in respect of those two paragraphs is the assertion that what occurred on 15 April 2016 was “a directions hearing”. The court was clearly not dealing with a directions hearing. The court below, clearly on the material, was dealing with an application by the applicant company, who was represented by Mr Lovel, and I have already referred to Mr Lovel’s outline of submissions and relief sought that was handed up to the court that day.
- At page 3 of the transcript, Mr Lovel stated his client’s position in these terms between lines 16 and 20:
The applicant is looking to have a cost assessment. We’ve – well, the appellants have put forward – the applicant has put forward two cost assessors. In this contest – in this consent order, the respondents have put forward a third cost assessor. In the outline of submissions, there are three objections to that particular assessor.
- Thereafter, some discussion ensues about the objections raised against the assessor contended for by the respondent.
- Then, at page 4 of the transcript, Mr Lovel says at about lines 20 to 25:
Well, your Honour, it’s the applicant’s application and two cost assessors were put forward back in February. This third costs assessor provided consent a little over a week ago and this consent order has been handed over today. It’s my submission that why are the first two cost assessors not any more appropriate than the third or less appropriate than that.
- And then the court intervenes. Thereafter, the – Mr Lovel continues to argue his client’s case. Up until page 8 at about line 43, Mr Lovel says:
I’ve been – there’s an allegation that’s been raised that I’m venturing into what is potentially professional misconduct simply because there is a factual dispute as to whether there is a client agreement. Now, is that a triable issue? It is the
- And then the Bench intervenes, and then at about line 12, Mr Lovel goes on:
No, no, no, no, your Honour, I’m saying that there’s authority, which I don’t presently have with me, which says that when a sole director assents to an agreement, there’s a question of fact as to whether they’re assenting in their personal capacity or in the capacity as a sole director.
- His Honour then uses some rather intemperate language saying:
Boy oh boy, Mr Lovel, you’re just digging your hole deeper and deeper, I’m afraid.
- Then Mr Lovel responds:
Your Honour, this is a directions hearing. I wasn’t.
- The Bench intervenes:
No, it isn’t. It’s an application.
MR LOVEL: It’s listed as a directions hearing. I’ve prepared as if it’s a directions hearing.
- To suggest at such a late stage in the proceeding, particularly having regard to the written submissions handed up and having regard to the submissions that had been made up to date, to assert that it was only a directions hearing and that that was the basis upon which Mr Lovel prepared himself for the proceeding that day is at best a disingenuine assertion. There is no merit in the directions point.
- The matters raised in paragraphs 1A and 1B are related in that it is asserted that the court below went beyond its jurisdiction in determining that Mr Lovel was liable to pay the respondent’s legal fees under the costs agreement as an identified client. After the exchanges to which I have just referred, a following exchange took place at page 11 of the transcript. It really commences at 10, but it commences at about line 6 with the Bench saying:
No, there doesn’t seem to be any issue so far as I’m concerned either, Mr Lovel.
- Mr Tucker submits:
So could I invite your Honour to make the order in those terms?
- His Honour makes some observations and Mr Lovel intervenes:
Your Honour, the point is – that I’m seeking to agitate on the cost agreement is whether I am personally a party to which it was asserted in correspondence from the respondents earlier this week.
- Mr Tucker submits from the bar table:
It’s not a live issue, you know.
- His Honour says:
This is an application for a costs assessment, that’s all.
- And Mr Tucker reinforces that by saying:
Which is not in issue, namely, the liability point.
- I must say I agree with the submissions made by Mr Wilson that it would appear that the learned Magistrate had formed a view, perhaps even a very strong view, about Mr Lovel’s situation under the cost agreement, that is, it would appear from the language used from the court below that the learned Magistrate had reached a very strong view that Mr Lovel was a client for the purposes of that agreement. However, that said, it has to be observed, as I have already identified, that nowhere in the orders made by the court is there any determination made about the liability of Mr Lovel under the cost agreement. Nothing is said about whether Mr Lovel was in fact a client for the purposes of that agreement. In his reasons, his Honour said:
An application for a costs assessment filed on 1 March – on 1st of March, the application says heading ‘Application for Cost Assessment’. To take notice that the applicant is applying to the court for an order for the assessment [indistinct] costs particularised in 1 and 2, Mr Tucker in his affidavit has exhibited correspondence and the client agreement between his firm and the – and Mr Lovel in his [indistinct] capacity as a director of a company, that is, the applicant, and Mr Lovel’s own affidavit contains evidence also of his depositing money into the respondent’s trust account. That corresponds with the email of 24 September sent by him to the respondent accepting the client agreement.
In my view, there is no triable issue there. I don’t accept the so-called objections as to the costs [indistinct] being proposed by the respondent, which is the cheapest of those that have been proposed. There just seems to me – there just seems to be no basis at all for the – no proper basis for the objections that have been raised by Mr Lovel. Accordingly, I intend to make the order as per the draft given to [indistinct] by Mr Tucker.
- It seems tolerably clear to me, and in this context I agree with the submissions made by Mr Wilson, the reference to so called no triable issue, when regard is had to the exchange between the Bench and Mr Lovel, that the reference to there being no triable issue is indeed a reference to whether Mr Lovel was a client for the client agreement.
- That said, though, that is not determinative of that issue in any way shape or form. The order speaks for itself. Mr Lovel is in no way estopped or otherwise prevented from putting in contest his legal obligations or lack of any legal obligations under the cost agreements. To put it another way, Mr Lovel, in the event that Tucker Cowen seeks to recover costs against him, is as free today to contest that liability as he ever was, and certainly is in no worse position to defend his case than he was prior to the proceedings below. The proceedings below simply have not altered his ability to raise any defences concerning liability.
- Had the learned Magistrate made a determinative factual finding, and here I emphasise determinative, that he was liable under the agreement, that would have been clearly an appealable error as Mr Lovel would have been denied, at the very least, natural justice, including the right for him to be fully heard on the matter and to call evidence. The learned Magistrate’s observations were intemperate and ill-advised, in my view, but at the end of the day, he has made no appealable determination concerning liability.
- In paragraph 7 of Mr Wilson’s submissions, reference is made to section 339 of the Legal Profession Act 2007. Subsection (2) of the Act that, relevantly, provides:
A person given notice of the cost application under subsection (1)
(a) is entitled to participate in the cost assessment process, and
(b) is taken to be a party to the assessment, and
(c) if the cost assessor so decides, is bound by the assessment.
- That section in no way denigrates the position that I have already stated that Mr Lovel will be a party to the assessment but he is still able to defend his position as to liability, and indeed both he and the company would have the right to have any assessment reviewed.
- As to paragraph 2 and 2A of the outline of argument, the Magistrate did not err in concluding that location was of no significance. Location was a matter agitated. It could be fairly said, I readily accept, that the Magistrate gave the argument short shrift, but that has to be seen in context. There is certainly no express finding that he considered location to be irrelevant, and in my view, when reference is had regard to the material, such an inference could not be reasonably inferred.
- At page 3 of the transcript, the following relevant exchange took place – after Mr Lovel gave his client’s position, the Bench says:
Distance, how does that matter?
- Mr Lovel responds:
There’s distance. Well, this particular cost assessor is in Ipswich at Raceview. The applicant is in Southport. The respondents are in Brisbane.
- The Bench says:
Well, they don’t have to go to him.
- Mr Lovel says:
Well, it may be that documents urgently need to be provided.
- The Bench intervenes:
Well, they can be scanned and emailed, can’t they?
MR LOVEL: I’m unsure, your Honour.
MR TUCKER: Yes, your Honour.
- The court then intervenes again:
Well, what year are we in? 2016, people don’t normally hand-deliver documents any more.
MR LOVEL: Your Honour, we would be at the mercy of the assessor in what method he’s deemed he’s willing to accept the documents.
- His Honour responds:
That’s just a silly objection. What’s your next one?
- Locality was clearly a matter that the Magistrate turned his mind to. He clearly considered it to be a matter of no material significance in the scheme of things, but that has to be seen in the overall context of the matter.
- First, one of the proposed assessors advanced by the applicants, Mr Eastwood, practises on the Gold Coast. He was not the respondent’s choice or nominee, but the respondent agreed to have him as the assessor. That would have solved the locational issues agitated by the applicants, but that arrangement was later rejected by the applicants, who then proposed Mr Robinson, who practises in Brisbane. One could rhetorically ask what the practical differences would be between Ipswich and Brisbane.
- To put it bluntly, in my view, this ground of appeal is not made out and, with respect, is an issue which could only be described as being nonsensical in its consequence.
- As to paragraph 2A, again, it is wrong to say that the Magistrate concluded that the hourly rate of the assessors proposed by the parties was the only proper basis for distinguishing them. Having dealt with the locational issue, there is a discussion about the cost of the respective assessors. All of the assessors appear to have been – there is no dispute that they are appropriately qualified and experienced.
- As to the question of the cost of the assessor, the objections seem to initially indicate that Mr Lovel was concerned that there might have been, if I could be so bold as to call it a sweetheart deal between that law firm and Mr Peterson. At page 5 at about line 4, Mr Tucker, in effect, advocated for Mr Peterson because he had a cheaper hourly rate than that of Mr Robinson. Mr Tucker refers to Mr Peterson as being “the cheapest bloke”.
- In so far as his fees or his cost arrangements are concerned, after some again robust discussion between he and the Bench, Mr Lovel says:
I’m not asking for that, your Honour. I’m not asking for that. The third objection is that there is a register of approved cost assessors which assessors have to submit their particulars to. They have to set out their hourly rate and various other details. The consent provided by the third assessor is significantly below what’s provided on the register and the submission
- And the Bench intervenes:
What does that mean?
- Mr Lovel continues:
The objection is that it’s begging for an explanation as to why the respondents have been able to secure a better rate. There’s an adverse inference.
- Then the Bench intervenes, and as I said, the reference to an adverse inference would suggest that what might have been going to be developed was some sort of argument that there might have been some arrangement – an inappropriate arrangement between the respondents and Mr Peterson, but that argument was simply not advanced and Mr Lovel abandoned that point and then began to readdress the location point.
- It is clear that the court below decided on Mr Peterson because he was cheaper than Mr Robinson, but it is not open, when regard is had to all the material, to say that the Magistrate proceeded on the basis that the hourly rate was the only proper basis. The learned Magistrate had very little to work with, but with what he did have to work with, he could see no sound reason for distinguishing any of the assessors and thereafter, chose Mr Peterson on the basis that he would be the cheapest. I am not able to infer that the Magistrate made any appealable error, and indeed, if I was dealing with the matter on the same material, I would have undoubtedly reached the same conclusion.
- As could be detected, I can see no merit in the grounds of appeal or the appeal points raised in paragraphs 1A, 1B, 2 and 2A. That, then, brings me to the question of costs.
- The learned Magistrate ordered that the applicant – bearing in mind at that time that the applicant was Emprove Holdings Proprietary Limited pay the respondent’s costs on an indemnity basis. His Honour, in reaching that conclusion, gave his reasons. They were in these terms:
Having regard to circumstances in which this application came to be made, the respondent indicated its consent to the appointment of one of the cost assessors that the respondent had proposed and then proposed a – when that wasn’t accepted, proposed a further alternative and cheaper cost [indistinct] two days [sic]. That matter was not attended to. In my view, the applicant has proceeded with this application in circumstances where he must have known it was going to fail and accordingly, in my view, it’s appropriate that costs be assessed on the indemnity basis. Accordingly, I order the applicant to pay the respondent’s costs of and incidental to the application on an indemnity basis to be agreed or assessed.
- It seems to me that there are three underlying reasons for his Honour reaching the conclusion that he did. The first is that the applicant company had unreasonably rejected as unacceptable the initial agreement nominating Mr Eastwood as a cost assessor, second, had behaved unreasonably in failing to accept Mr Peterson as the alternate cost assessor and, third, that the application was doomed to fail from the outset.
- To his credit, Mr Dietz, counsel for Tucker Cowen, did not place much reliance on the second of those matters and that is to his credit, and I agree that it is a matter of little weight bearing in mind that, at least as I understood it, as far as Mr Lovel was concerned, he was only made aware of Mr Peterson’s assent some two days prior to the proceedings commencing.
- However, it does seem to me that in this context, his Honour very much had in mind his earlier finding that there was no triable issue and, as I have already indicated, it seems tolerably clear to me that that triable issue was referrable to Mr Lovel’s legal obligations under the solicitor/client agreement, and that that was a matter that was at the back of his Honour’s mind when he made the orders that he did. It is quite clear that the Bench adopted an extremely robust approach to Mr Lovel on that day. I have already indicated that I consider a number of his remarks to be intemperate at best. His Honour referred to the objections made by Mr Lovel as being silly in respect of location. They were indeed, in my view, weak arguments, but to describe them as silly is unnecessarily pejorative. He referred at one stage during Mr Lovel’s submissions to the effect that:
You have got to be kidding, haven’t you?
- It is also clear that the learned Magistrate, as far as he was concerned, considered that Mr Lovel could not be serious when he said that there was an issue about his liability. I refer there to pages 9 and 11 of the transcript.
- While it is not expressly stated, it appears to me that the learned Magistrate, when determining the question of costs, was acting on the basis that there was no scope for there being a genuine triable issue concerning Mr Lovel’s liability under a client under the client agreement. His assessment about that issue was an irrelevant consideration in the sense that it was not a matter that should have influenced his decision as to costs. Whilst not expressly stated, it seemed tolerably clear to me that that was a factor that his Honour took into account and that was an irrelevant consideration and therefore reveals a reviewable error.
- As to the assertion that the application was doomed to fail, in fact, the substantive relief achieved was materially what was always contended for with, as I have already indicated, the obvious difference being that it was not the assessor pressed by the applicants, who was named. On the material before me, it is again tolerably clear that while the applicant’s case advanced for Mr Robinson, whilst it might have been able to be described as a relatively weak one, it is not one that I would describe as being doomed to fail.
- The failure of the respondent to abide by the original agreement to appoint Mr Eastwood is certainly a strong point in favour of the respondent in this context and had the respondent continued to maintain their acceptance of Mr Eastwood, costs on an indemnity basis could hardly have been resisted. In my view, notwithstanding the reviewable error to which I have referred, that is, had that situation persisted, I might well have been inclined to simply make orders in identical terms to that made by the court below, but the respondent did not continue to press for Mr Eastwood, but changed horses in the sense that it then pressed for its original choice of Mr Peterson.
- The applicant’s case might, as I have already said, been described as being a particularly weak one, but it was not one doomed to fail in all the circumstances. Mr Peterson’s consent was only advised some two days prior to the proceeding to Mr Lovel. That said, though, the applicant’s conduct, including the fact that it failed in the proceeding below, in its argument pressing for Mr Robinson and without good cause for reneging on its agreement to have Mr Eastwood appointed as the assessor being identified, warranted orders in favour of the respondent below. However, for the reasons given, it is my view that the costs that ought to have been ordered should have been on a standard basis.
- For the reasons given, which I have already indicated I will tidy up before being published, it seems to me that the appropriate orders would be as follows:
- Leave to amend the notice of appeal is granted.
- Leave to appeal is granted.
- Save as to the question of costs, the appeal is dismissed.
- In respect of costs, the orders made by the court below be set aside. In lieu thereof, it be ordered that the applicants pay the respondent’s costs of those proceedings on 15 April 2016 on a standard basis.
- Now, is there any – any misunderstanding about what I have ordered and why I have ordered it?
- MR DIETZ: No, your Honour, but – sorry, can I draw a potential slip, which is your Honour has made reference during your reasons to grounds 1A and 1B, but your Honour hasn’t expressly addressed ground 1. I think that your Honour’s reasons cover that as well, but I ought raise that before we go any further.
- HIS HONOUR: The reason I did not address that is because Mr Wilson did not address me on it, I must say. It is essentially the same point, isn’t it, Mr Wilson?
- MR WILSON: It is, your Honour. I’m content that in – I’m content with the reasons you’ve given in relation to 1A and 1B extend into
- HIS HONOUR: All right. Well, what I might do in my final reasons is point out
- MR WILSON: Yeah.
- HIS HONOUR: that when I was addressing 1A and 1B, I was also proceeding on the basis that with your concession, it also included the ground in 1.
- MR WILSON: Your Honour, there is – that satisfies, Mr Dietz?
- MR DIETZ: Yes. I – just one point. Thank you.
- MR WILSON: Your Honour, might I just seek clarification. Your Honour – your Honour’s determination is that the proceeding below was not a directions hearing, as a result of which it follows that rule 734G is not engaged. Oh, I beg your pardon, 743G is not engaged.
- HIS HONOUR: I tagged 743G, but did not mention it. Well, it is the court may hold a directions hearing, and then it follows that at that directions hearing, the court may considering – consider the following matters. How – why do you say I need to make some specific reference to this particular section or this rule?
- MR WILSON: Your Honour, I was simply trying to understand the significance of your finding that the proceeding below was not a directions hearing in terms of the argument this morning which devoted a lot of time to the rule – the rule itself.
- HIS HONOUR: Well, I – I understood your submission to be to this effect that the Magistrate made the orders that he did in circumstances where he ought not have done so because what he was confronted with or what he was really dealing with was a directions hearing when, for the reasons I have already expressed, it is tolerably clear that the whole of the proceeding was clearly not a directions hearing, and indeed, it would – I do not see any need to incorporate this into the – into the judgment, but if it was a directions hearing and [indistinct] Mr Lovel prepared submissions along those lines, he may well have agitated for directions along those lines, but I found that it wasn’t a directions hearing.
- MR WILSON: Right. I understood. Thank you.
- HIS HONOUR: Is there anything you want to say about any of that, Mr Dietz?
- MR DIETZ: No, your Honour.
- HIS HONOUR: Right. What about the question of costs of this appeal?
- MR DIETZ: We would ask for our costs on the standard basis. Costs generally follow the event, and there’s been very substantial success, save for one issue in relation to costs. There – I have to be frank with your Honour there is a lot of authority which says that to the extent that an appellant succeeds on any point in an appeal, it ought have some costs to the extent that it has succeeded. There’s a recent decision of this court, and I can hand it up to your Honour, where there was success by an appellant, but only on the question of costs, which were a very small part of the argument, and in that case the judge ordered that the appellant pay the respondent’s costs, that is, the appellant pay the respondent 95 per cent of the costs of the appeal, five per cent being allowed for the fact that there was a successful costs order. That was a decision of Judge Dorney of this court as recent as the 26th of April this year. I’m not sure if your Honour wishes to – it’s a very short decision. I think it’s about four pages.
- HIS HONOUR: Hand it up and I’ll have a look at it while I’m hearing from Mr Wilson. Mr Wilson. So you want – you’re – just to be clear, Mr Dietz, are you saying
- MR DIETZ: I’m – I’m
- HIS HONOUR: Are you asking for the whole of the cost of today, but if I am going to reduce them, I would be reducing them by in the order of five per cent?
- MR DIETZ: Yes, your Honour. There is one other point which is relevant to the transcript in relation to costs and that is as regards the indemnity costs order at first instance, if one reads the transcript, Mr Tucker in fact doesn’t seek an indemnity costs. He seeks a costs order. It’s the Magistrate who leaps to the decision to make it an indemnity costs order.
- HIS HONOUR: Oh, that is – that is something that I wanted to include in my reasons and I will, something to the effect that the decision to order costs on an indemnity basis seems to be – create – a creature of the – very much of the making of the Magistrate himself.
- MR DIETZ: Yes.
- HIS HONOUR: Well, does anyone mind if I include that in my
- MR DIETZ: No.
- HIS HONOUR: Because I had made a note of it, but
- MR DIETZ: I don’t.
- HIS HONOUR: overlooked it in the
- MR DIETZ: And that, in my respectful submission, is another reason why we, at least in the – on my first submission, ought not be declined costs having regard to that point. It was not something that we don’t
- HIS HONOUR: Yes.
- MR DIETZ: assert in the first instance.
- HIS HONOUR: Yes.
- MR DIETZ: Thank you. I’m sorry.
- HIS HONOUR: Mr Wilson.
- MR WILSON: Your Honour, the appropriate order is that each party pay their costs of the appeal because – because
- HIS HONOUR: On what basis?
- MR WILSON: On the basis that – on the basis that if the Magistrate’s decision had provided for the more appropriate costs order, the application and the appeal would never have been brought.
- HIS HONOUR: What? Where is there any material to support that?
- MR WILSON: The only material that there is is there’s a letter between solicitors in relation to efforts to settle the appeal.
- HIS HONOUR: Without prejudice?
- MR WILSON: Or without prejudice
- HIS HONOUR: Or without prejudice, save as
- MR WILSON: Or without prejudice, save as to costs.
- HIS HONOUR: Save as to costs?
- MR WILSON: Save as to costs.
- HIS HONOUR: Should I have a look at that? Mr Dietz, is there any reason why I should not have a look at it?
- MR DIETZ: I’m sorry, your Honour, it’s the first time I’ve seen it.
- HIS HONOUR: Do you want an opportunity to get some instructions about it?
- MR DIETZ: No, that’s not necessary, your Honour.
- HIS HONOUR: Do you have any objection if I have a copy of it?
- MR DIETZ: No, I don’t, your Honour.
- HIS HONOUR: Take a seat, Mr Wilson.
- MR WILSON: Thank you.
- HIS HONOUR: I take it you are seeking leave to file this affidavit, are you?
- MR WILSON: I’m
- HIS HONOUR: Or has it already been filed?
- MR WILSON: No, it hasn’t been filed, so I do seek leave to
- HIS HONOUR: Sorry. You are seeking leave to file it?
- MR WILSON: I seek leave to file and read the affidavit of Mr Lovel sworn the 3rd of September 2016 on the matter of costs.
- HIS HONOUR: Well, I suppose I should hear from Mr Dietz first seeing as though he’s just been – had it drawn to his attention.
- MR DIETZ: Well, your Honour, even on the basis of the appeal, we’ve done better than that. We obtained costs on the standard basis of the application at first instance. That’s going to be in excess of $220.
- HIS HONOUR: Mr Wilson.
- MR WILSON: Your Honour, the offer was for 220 or such other amount as may be agreed. My point is this that if there’d been some effort to settle costs on a standard basis, then the appeal wouldn’t have been brought, but the – that’s my submission in relation to the offer that’s been made. The appropriate order in all of the circumstances is that each party pay their own costs of the appeal.
- HIS HONOUR: All right. I will deal with the question of costs now and I will reserve my right to tidy up these reasons as well. The submission was made on behalf of the respondents to the appeal that the applicants should pay their costs of the appeal on the standard basis – essentially on the basis that costs ought follow the event in proceedings such as this, or alternatively, having regard to the very limited nature of the success of the appellants, any cost orders should be reduced only marginally.
- On behalf of the applicant/appellants it was submitted that the appropriate orders would be that each party pay their own costs. It was not suggested that the ordinary course of event – or at least the starting point would be in a proceedings such as this that costs ought follow the event, but reliance was placed in particular on what was described as a save as to cost offer made on the 5th – 5 May 2016. That letter, relevantly, provides:
- We are instructed on behalf of my client company to institute an appeal against the Magistrate’s orders, including that our client pay your costs of the application to be assessed on an indemnity basis. In order to avoid time and costs of an appeal, we invite you to agree that our client pay your cost of the application fixed at $220 or such other amount as may be agreed. Your response in writing is required by this office by 3 pm, 9 May 2016, in default in which we are instructed to institute the foreshadowed appeal without further reference to you.
- The first thing to note is that the respondents were being invited to, if you like, accept an amount of $220 or some other amount that may be agreed in order to avoid the matter having to be dealt with at a hearing. I have not been taken to any material which would indicate that $220 was an reasonable amount and it seems likely to me that even in respect of the variations of the cost orders that I have made, it is likely to exceed the sum of $220. Given the background to this matter in circumstances where there was an agreement about a cost assessor, then there was no agreement about a cost assessor, and then there was an unseemly dispute about who ought be the cost assessor, I must say, I would not have held out too much hope for there being any agreement as to costs.
- On balance – firstly, whilst I give leave for the applicants to read and file the affidavit of Mr Lovel sworn 3 September 2016, the contents of that offer do not convince me that I ought make any other orders than of the type proposed by Mr Dietz. I must say if anything that the letter might be seen to highlight, if you like, the weakness of some of the other grounds of appeal, but I have already given my reasons for that and I do not need to have regard to the correspondence to bolster my reasons.
- The respondents have been successful in respect of all but one aspect of the appeal, that being in respect of the cost order where I set aside the costs on an indemnity basis and ordered that they be paid on a standard basis. Very little time was spent dealing with the question of costs in the scheme of things, and I can see no point in carrying out some artificial exercise in trying to assess, if you like, how much time was agitated in dealing with appeal and the degree of success involved. On balance, I consider that the appropriate order ought be that the appellant pay the respondent’s cost of the appeal on the standard basis.
- Anything arising?
- MR DIETZ: Only that, your Honour, you indicated earlier about making some reference to Mr Tucker and the pursuit of an indemnity costs order at first instance. Were you just going to insert some reasons to that effect, or were you intending to deliver some now?
- HIS HONOUR: No, no, I intended to include them
- MR DIETZ: In your earlier reasons. That’s fine.
- HIS HONOUR: Yes. Because I had made a note that
- MR DIETZ: No, we’re at
- HIS HONOUR: that he be
- MR DIETZ: We’re at cross-purposes, your Honour. I’m sorry.
- HIS HONOUR: I made a – I made note that – that indemnity costs seemed to have been a matter raised by the Magistrate and indeed Mr Lovel was not given very much opportunity let alone notice to address
- MR DIETZ: Yes.
- HIS HONOUR: address that matter and I intended to include that in the body of my judgment dealing with the indemnity cost point.
- MR DIETZ: Yes, your Honour. I’m sorry, that’s my misunderstanding.
- HIS HONOUR: All right.
- MR DIETZ: Thank you.
- HIS HONOUR: Anything arising?
- MR DIETZ: No, your Honour.
- HIS HONOUR: All right. My apologies to the court staff. We will adjourn the court.
- Published Case Name:
Emprove Holdings Pty Ltd v Tucker & Cowen Solicitors
- Shortened Case Name:
Emprove Holdings Pty Ltd v Tucker & Cowen Solicitors
 QDC 233
05 Sep 2016
|Event||Citation or File||Date||Notes|
|Primary Judgment||Magistrates Court (No citation)||15 Apr 2016||Applicant applied for assessment of legal costs. A Magistrate ordered appointment of cost assessor nominated by respondent and awarded indemnity costs against applicant.|
|Primary Judgment|| QDC 233||05 Sep 2016||Applicant sought leave to appeal the Magistrate's orders. Issues on appeal where whether choice of cost assessor revealed error or whether indemnity costs were ordered in error. Leave to appeal granted and appeal dismissed, save that costs be paid on a standard basis: Jones DCJ.|
|Notice of Appeal Filed||File Number: 10053/16||30 Sep 2016||Applicant sought leave to appeal against the decision of Jones DCJ in affirming the Magistrate's choice of cost assessor.|
|Appeal Determined (QCA)|| QCA 128||09 Jun 2017||Application for leave to appeal dismissed: Byrne SJA (Gotterson and Morrison JA agreeing).|