Respondent Seeks Review of Costs Order

CGA Law Pty Ltd & Anor v Diane Lawyers Pty Ltd & Anor [2022] QSC 92 (13 June 2022)

The respondents sought to review a decision of a costs assessor.  The costs assessed were costs ordered in favour of the respondents on an application brought by the applicants for the appointment of a provisional liquidator.  The Court, in resolving this dispute, relied upon Uniform Civil Procedure Rules 1999(Qld).

Facts:

The respondents sought to review a decision of a costs assessor pursuant to r 742, UCPR.  The costs assessed were costs ordered in favour of the respondents on an application brought by the applicants for the appointment of a provisional liquidator.  Applegarth J dismissed that application on 25 June 2021.  The applicants took the point that the application before the Court was filed 52 days after the original costs certificate was given, and at least 17 days after the corrected costs certificate was purportedly given.

The respondents made an oral application to extend the time for compliance with r 742(2) pursuant to r 7 of the UCPR if necessary.  On their behalf, it was contended that it was not necessary because time under r 742(2)(b) had never begun to run.  The costs assessor sent an unsigned copy of the certificate to the respondents pursuant to r 737(2).  Therefore the respondents said, the time limit in r 742(2) did not apply.

On 22 June 2021, the applicants filed an originating application seeking that the first respondent be wound up on the just and equitable grounds; an account from the first respondent, and a declaration that the second respondent has contravened the directors’ duties imposed by the Corporations Act 2001 (Cth).  That was Court Document 1.  The first applicant carries on business as a lawyer and to do so relies upon the second respondent’s being admitted to practice as a legal practitioner.  The second respondent owns 30% of the shares in the first applicant and was, or is, an employee of the first applicant. 

The director of the first applicant, Alistair Bell, alleges that the second respondent has registered her own law firm, the first respondent, and has caused the Queensland Law Society (QLS) to remove the first applicant as a law firm registered with the QLS.  He alleges that the second respondent has transferred the clients of the first applicant to the first respondent and closed the first applicant’s trust account.

An interlocutory application seeking the appointment of a provisional liquidator to the first respondent was also filed.  That was Court Document 2.  The interlocutory application came before Applegarth J on 25 June 2021.  Mr. Coulsen of counsel appeared for the applicants and Mr. Morris QC leading Mr. Trewavas of counsel appeared for the respondents.  Applegarth J made an order dismissing the interlocutory application on undertakings given by the second respondent not to adversely deal with the assets of the first respondent, and to keep proper books of accounts and records of the first respondent.

No transcript of the hearing before Applegarth J was available to the costs assessor.  Mr. Morris QC raised s 462(4) of the Corporations Act to say that the applicants had no standing to bring a winding up application unless security for costs had been given, and a prima facie case for winding up the company had been established. The order of Applegarth J dated 25 June 2021 provides that the applicants pay the respondents' costs of the hearing of 25 June 2021 and that costs of the application are otherwise reserved.  The respondents’ solicitors engaged a costs assessor, Mr. Paul Cameron, to cause a costs statement to be prepared in the amount of $22,160.  The costs assessor determined that the respondents should bear 75% of the costs of the assessment.

Issues:

I. Whether or not time under r 742(2)(b) UCPR begins to run where the respondents did not receive a signed certificate.

Applicable law:

Analysis:

R 737(2) does require a costs assessor to send a copy of the signed certificate to the parties.  Unless the original certificate is signed, the Court cannot see that it is a certification by the costs assessor, and it is a copy of the certificate which must be given to the parties.  Nonetheless, this does seem a fairly technical point and where a party receives an unsigned certificate and thus knows of the assessment, they would be foolish to delay filing an application for review because: (a) r 740 allows only 14 days before a judgment in the amount certified is effective, and (b) on an application under r 742, an applications judge might well regard a failure to give a signed copy to the parties as an irregularity – r 371.

The costs assessor produced reasons which no one requested on what should have been a small, relatively simple assessment.  Those reasons show that he spent time considering various matters which were irrelevant to the assessment which was before him.  Other matters, if not strictly irrelevant, were considered at such length as to become irrelevant.  The costs assessor proceeded on a mistaken factual and legal basis.  The costs assessor did not allow the parties the opportunity to make submissions on the costs of the assessment.

Conclusion: