Fordyce v Leung as executor of the estate of the late Robert Ho; Fordyce v Leung as executrix of the estate of the late Robert Ho [2023] NSWSC 778 (10 July 2023)

Last Updated: 10 July 2023

Supreme Court New South Wales

Case Name:	Fordyce v Leung as executor of the estate of the late Robert Ho; Fordyce v Leung as executrix of the estate of the late Robert Ho
Medium Neutral Citation:	[2023] NSWSC 778
Hearing Date(s):	3 July 2023
Date of Orders:	10 July 2023
Decision Date:	10 July 2023
Jurisdiction:	Common Law
Before:	Harrison J
Decision:	(1) Grant leave to Mr Fordyce for the limited purpose of arguing what I shall describe as the s 368(2) grounds notified in the Amended Summons in each case. (2) Dismiss the appeals relying on those grounds. (3) Otherwise refuse leave to rely upon the balance of grounds notified in the Amended Summons in each case.
Catchwords:	APPEALS – costs – costs assessments – “interim” or “pre-completion” certificates – ability of assessor to issue such certificates – whether certificates “on account of” liability or “for” specific items – whether parties given a reasonable opportunity to be heard
Legislation Cited:	Costs Rule – Certificates of Determination 1997 (NSW) Legal Profession Act 2004 (NSW) ss 359, 368, 371, 372, 384, 385 Legal Profession Act 1987 (NSW) s 208J Legal Profession Amendment Act 1996 (NSW) Legal Profession Reform Act 1993 (NSW) Rules of the Supreme Court (Costs) 1916 (NSW) r 46 Supreme Court Rules 1970 (NSW) Part 52 r 59 Legal Profession Uniform Law Application Act 2014
Cases Cited:	Ackerman v Morgan [2019] NSWSC 1250 Claudia Leung in her capacity as Executrix of the Estate of the late Robert Ho v Paul Mervyn Fordyce t/as Pmf Legal Trading [2019] NSWSC 18 Claudia Leung in her capacity as Executrix of the Estate of the late Robert Ho v Paul Mervyn Fordyce t/as Pmf Legal Trading (No 2) [2019] NSWSC 175 Fordyce v Leung [2022] NSWCA 55 Harper v Firbank [1918] 2 KB 509 Mars UK Limited v Teknowledge Limited [1999] EWHC 226; [2000] FSR 138 Ryan v Hansen t/as Hansens Solicitors (2000) 49 NSWLR 184; [2000] NSWSC 354
Texts Cited:	Explanatory Note to the Legal Profession Amendment Act 1996 (NSW) New South Wales Legislative Council, Parliamentary Debates (Hansard), 16 September 1993 Supreme Court of New South Wales, Report of the Chief Justice’s Review of the Costs Assessment Scheme (12 March 2013), at [3.8.1], [3.8.2]
Category:	Principal judgment
Parties:	Paul Mervyn Fordyce (Plaintiff) Claudia Leung (First Defendant) Rhodium NSW Pty Ltd (Second Defendant) The Trading House Pty Ltd (Third Defendant)
Representation:	Counsel: L D Corbett (Defendants) Solicitors:
File Number(s):	2022/292026 and 2022/292722
Publication Restriction:	Nil

JUDGMENT

1. HIS HONOUR: Paul Mervyn Fordyce once acted as the solicitor for the defendants. In 2014, a dispute arose between them concerning his bill for legal costs and disbursements. On 17 June 2014, the defendants applied for assessment of approximately $760,000 worth of those costs. Despite their antiquity, those assessments have not been finalised, and Mr Fordyce has appealed from some of the determinations that have been made. Those assessments are not the subject of these reasons.
2. However, also in 2014, the defendants commenced proceedings in this Court in relation to disputed costs disclosures and retainers relied upon by Mr Fordyce in the assessments. Those proceedings were heard by Kunc J: Claudia Leung in her capacity as Executrix of the Estate of the late Robert Ho v Paul Mervyn Fordyce t/as Pmf Legal Trading [2019] NSWSC 18. Following that decision, on 1 March 2019, his Honour ordered Mr Fordyce to pay the defendants’ costs: Claudia Leung in her capacity as Executrix of the Estate of the late Robert Ho v Paul Mervyn Fordyce t/as Pmf Legal Trading (No 2) [2019] NSWSC 175. No appeal was taken from either of his Honour’s judgments. These proceedings are concerned with assessments of the costs that Kunc J ordered Mr Fordyce to pay to the defendants.
3. There are two separate costs assessments in relation to the 1 March 2019 costs order. The first is assessment number 2019/236020, which relates to disbursements. The second is assessment number 2012/313928 and relates to professional fees. The Costs Assessor issued what he described as a “pre-completion certificate” and statement of reasons in 2019/239020 on 28 October 2020. Mr Fordyce commenced an appeal from that decision in the District Court on 29 March 2021. The Costs Assessor later issued another “pre-completion certificate” in 2020/313928 on 21 May 2021. Mr Fordyce commenced an appeal from that decision in the District Court on 25 May 2021.
4. On 30 September 2022, almost 2 years after the first pre-completion certificate was issued and 18 months after the second was issued, Mr Fordyce commenced the present proceedings by summons in each case seeking leave to appeal under s 385(2) of the Legal Profession Act 2004. The entire provision is as follows:

385 Appeal against decision of costs assessor by leave

(1) A party to an application for a costs assessment relating to a bill may, in accordance with the rules of the District Court, seek leave of the Court to appeal to the Court against the determination of the application made by a costs assessor.

(2) A party to an application for a costs assessment relating to costs payable as a result of an order made by a court or a tribunal may, in accordance with the rules of the court or tribunal, seek leave of the court or tribunal to appeal to the court or tribunal against the determination of the application made by a costs assessor. [Emphasis added]

(3) The District Court or court or tribunal may, in accordance with its rules, grant leave to appeal and may hear and determine the appeal.

(4) An appeal is to be by way of a new hearing and fresh evidence, or evidence in addition to or in substitution for the evidence received at the original proceedings, may be given.

(5) After deciding the questions the subject of the appeal, the District Court or court or tribunal may, unless it affirms the costs assessor's decision, make such determination in relation to the application as, in its opinion, should have been made by the costs assessor.

5. The appeals commenced by Mr Fordyce in the District Court in accordance with s 384(1) of the Act relate to the same pre-completion certificates. Those proceedings remain on foot. They are confined by s 384(1) to questions of law. A judicial review application by Mr Fordyce to the Court of Appeal in relation to these issues was dismissed upon the basis that the decision appealed from did not decide the issue on a final basis and that the review procedures in the 2004 Act are a more appropriate process: Fordyce v Leung [2022] NSWCA 55.
6. The Amended Summons in each case filed by Mr Fordyce on 4 November 2022 in this Court seeks the following orders or relief:

“1. Leave to appeal from the whole of the Cost Assessment in Proceedings Supreme Court of New South Wales No.2019/236020 (‘Cost Assessment’) dated 28 October 20209, the decision below, pursuant to UCPR 50.12(c).

2. An order granting leave to bring this appeal pursuant to s 385(2) of the Legal Profession Act 2004 (NSW) (‘LPA’).

3. Appeal allowed.

4. That the evidence in District Court proceedings Fordyce v Leung No.2021/38080, Fordyce v Leung (as executor of the deceased estate of the Late Robert Ho) No.2021/87811 and Fordyce v Leung No.2021 be evidence in these proceedings.

5. Pre-Completion Reasons for Determination of Christopher Phillip Wall (‘Cost Assessor’) made in the Cost Assessment on 28 October 2020 be set aside.

6. Pre-Completion determination of costs, made in the Cost Assessment, on 28 October 2020 be set aside. Both these determinations and the Pre-Completion Reasons for the Determination are hereafter collectively called ‘the Pre-Completion Determination’.

7. A declaration that on the Cost Assessor issuing ‘the Pre-Completion Determination’, he was functus officio.

8. The defendants pay the costs of the Cost Assessor.

9. The plaintiff be given leave to examine Wilson Wong and Claudia Leung, and to obtain by Notice to Produce or subpoena, for the purposes of enabling the amount of costs to be, the extent of micro management by them, relevant to the Cost Assessment and whether costs, as defined in the LPA, incurred by reason of their micro management, are recoverable or not.

10. The determination of this Court is that the Cost Assessment be payable in the sum specified by this Court.

11. Alternatively this Court make any determination that is outside the powers of the cost assessor that need to be made so that the cost assessor can make the determination in the Cost Assessment.

12. The defendants pay the costs of the Cost Assessor.

13. In the alternative to the order in Par.10, the Cost Assessor be removed as cost assessor of the Cost Assessment matter.

14. In the alternative to the order in Par.10, the Manager Costs Assessment of the Supreme Court of New South Wales appoint another cost assessor in the place of the Cost Assessor.

15. In the alternative to the order in Par.10, the newly appointed Cost Assessor undertake, de novo, the determination of the Costs determination in the Cost Assessment in accordance with any determinations by this Court relevant to how the cost assessor should proceed with the Cost Assessment.

16. The defendants pay the plaintiff’s costs thrown away by the Cost Assessment undertaken by the Cost Assessor.

17. The defendants pay the plaintiff’s costs of these proceedings.”

7. Mr Fordyce’s principal complaint relates to the interpretation and operation of s 368(2) of the Act. Section 368 is in these relevant terms:

368 Certificate as to determination

(1) On making a determination of costs referred to in Subdivision 2 or 3 of this Division, a costs assessor is to issue a certificate that sets out the determination.

(2) A costs assessor may issue more than one certificate in relation to an application for costs assessment. Such certificates may be issued at the same time or at different stages of the assessment process.

(3)...

8. Mr Fordyce maintains that, despite the wording of s 368(2), a Costs Assessor may not “issue more than one certificate in relation to an application for costs assessment”, whether at the same time or at different stages of the assessment process or, on Mr Fordyce’s case, at any time at all, if the certificates arguably deal with the same items. The parties agree that s 368(2) has not been the subject of any judicial consideration on the questions raised by Mr Fordyce.
9. Mr Fordyce’s submissions outlined his contentions in the following ways. The wording of s 368(2) of the Act has been the same since an amendment made introducing a provision to like effect was inserted into the Legal Profession Act 1987. The terms “pre-completion” or “pre-completion certificate” are not defined. Apart from making what he referred to as a pre-completion determination, Mr Fordyce submitted that the Cost Assessor, in December 2021, purported to make a second and final determination of all of the same costs that he had made in his pre-completion determination. Mr Fordyce further submitted in writing in these terms:

“9. It is submitted that a cost assessor is only empowered by the Act to make one and only one determination of each amount of costs claimed and that determination can only be a final determination.

10. It is not disputed that s 368(2) of the Act empowers a cost assessor to issue more than one certificate of determination in respect of some of the costs being assessed, but not to make more than one determination of the costs that he has already made a determination in respect of.

11. The only type of determination that a cost assessor can make of any of the costs that he assesses is a final determination of those costs the subject of the cost assessment in accordance with s 372 of the Act.

12. Once the cost assessor has made a determination and issued such a certificate even if only of some of the items of costs claimed, as will be seen below, the cost assessor is then functus officio in respect of the costs the subject of the certificate that has been issued with one very limited exception that gives a cost assessor a power to re-visit any of the costs that he has determined. Even the power contained in that exception was not one that a cost assessor had until 1998 when the 87 Act was amended to give a cost assessor a power equivalent to the slip rule – to amend an inadvertent error in a determination. The provision, equivalent to s 368(2) of the Act, had been inserted in 1996, before this ‘slip rule’ provision, as discussed below was inserted.”

10. Mr Fordyce’s submissions continued in these terms:

17. Notwithstanding this situation, it is submitted that that interpretation of s 368(2) is clearly wrong. Once the Cost Assessor had made what he thought was a pre-completion determination of the amount of costs to be awarded to the cost applicant in respect of all costs claimed in both assessments, the Cost Assessor was functus officio. He had no further power to continue to alter the pre-completion determination certificates except as provided in s 371 for an inadvertent error pursuant to the slip rule.

18. Section 371 of the Act, unsurprisingly, only allows a cost assessor to correct an inadvertent error that was made in a determination. It is submitted that once the Cost Assessor had made his determination of the costs in each matter, in these cases which he called “Pre-Completion Determinations”, those determinations were the only determinations he was capable of making and were in fact the only sort of determination that can be made in respect of costs that he determines – a final determination, regardless of the fact that he thought, wrongly, that he could continue with the cost assessments and reach a different conclusion, unrestrained by the limitations applicable to the slip rule, as he purported to have the power to do.

19. After he had issued those pre-completion determination certificates, the Cost Assessor continued to purport to act as the cost assessor in each of those matters. This included purporting to call for further submissions and evidence from the parties, as he believed that when he issued what he called pre-completion determination certificates, he could consider de novo the amount of costs that he would allow based on the new submissions and evidence. He purported to continue to act as the cost assessor in both matters for a further period of nearly a year receiving extensive submissions from the parties...He did so over the vehement objections of the appellant on the basis that the appellant believed that he was functus officio.

20. Section 372 of the Act...clearly operates with, and subject to s 371 of the Act to bring finality to a cost assessment matter once each item of costs claimed have been determined once, and once only, by a cost assessor.

21. Logically, if one accepts for present purposes the interpretation of the Cost Assessor regarding the operation of s 368(2) of the Act, then there is nothing in the wording of that section, to prevent a cost assessor making as many pre-completion determinations of the same costs, as he thinks fit. Here he only purported to make one interim determination and then to proceed to make a final determination but there is nothing in the Act that would limit the number of interim determinations that could be made if the Cost Assessor’s interpretation is right.”

11. Mr Fordyce contended that despite the otherwise clear and unambiguous words of s 368(2), the only power to vary or amend a costs determination was in the case of inadvertent error for which s 371 of the Act provided and which, on this submission, covered the field. Mr Fordyce said that such a conclusion was reinforced by s 372, which provides as follows:

372 Determination to be final

A costs assessor’s determination of an application is binding on all parties to the application and no appeal or other assessment lies in respect of the determination, except as provided in this Division.

12. It is convenient to deal with these propositions now. Section 371 in terms deals with the separate and distinct issue of inadvertent error. It does so in words that make it clear that an assessor should have the ability in the case of an inadvertent error to correct it. So much is hardly controversial. However, the section does not expressly, and in my view does not by implication, say or suggest anything by way of limitation upon the interaction between or among two or more certificates issued by a costs assessor in accordance with the power given by s 368(2). Section 371 in fact has nothing to say about the relationship between or among such certificates at all. It is to my mind a stand-alone section in the nature of a slip rule provision dealing with the power to correct errors. I cannot accept that s 371 operates to constrain the issue of certificates at the same time or at different stages of the assessment process which are then accommodated according to their terms in the final determination.
13. Nor does s 372 have any similar effect. That provision does not in express language, and does not by implication, say or suggest that section 368(2) can have no operation unless the certificates that are issued deal with discrete matters. Indeed, the fact that they are binding on all parties and that no appeal or other assessment lies in respect of the determination “except as provided” elsewhere in the Act, is a clear indication that the reference in the chapeau to the section to the determination being final, is itself a qualified reference. Mr Fordyce’s contention that this must mean that every certificate issued as a pre-completion certificate could then be the subject of an appeal, with potentially multiple proceedings in the same assessment process, is no more than a statement made in terrorem. The prospect that the legislature could not have intended, or possibly did not anticipate, such a cumbersome outcome is not a reason to conclude that the words of s 369(2) should be read down or ignored.
14. Reduced to simple terms, the real and only issue is whether a costs assessor has the power to issue an interim certificate that is, or may be, later qualified by a final certificate. Put another way, can a costs assessor legitimately issue a certificate for payment of an amount that is to be treated as issued on account of the final liability for all costs ultimately assessed to be payable?
15. The defendants submitted that the answer to these questions is “yes”, that the practice of making interim assessments is one of very long standing in Australia and that there are very good reasons why this is so. I was referred to the following matters by Mr Corbett of counsel, who appeared for the defendants, in support of those general submissions. First, Mr Corbett submitted that s 368(2) is clear and unambiguous, but that if resort to extraneous materials were necessary, such material does not support Mr Fordyce’s contentions. Secondly, Mr Corbett submitted that the particular facts in these cases show that the pre-completion certificates issued by the Costs Assessor do not establish or demonstrate the existence of the harm that Mr Fordyce maintains a literal interpretation of s 368(2) would produce. These are dealt with in turn.

Interpretation of s 368(2)

16. Is there a need to cure an ambiguity by reference to extraneous materials? Mr Fordyce maintains that this provision cannot be read literally to mean what it says. Mr Corbett says that the provision is clear and unambiguous. Against the contingency that there is doubt about the correct meaning of the sub-section, the following materials were drawn to my attention as a possible aid to interpretation.
17. The power to issue “separate or interim” certificates for costs has existed in New South Wales since at least 1916. Rule 46 of the Rules of the Supreme Court (Costs), which came into effect on 1 January 1916, was as follows:

“Powers of Taxing Officers

46. The taxing officers of the Court, in any of its jurisdictions, shall, for the purpose of any proceeding before them, have power and authority to summon and examine witnesses either orally or upon affidavit, to administer oaths, and to require the production of books, papers and documents, and for such purposes to issue subpoenas, and to make separate and interim certificates or allocaturs...”.

18. The power to “make separate and interim certificates” was also set out in the Supreme Court Rules 1970, Part 52, Division 7, rule 59, which was in the following relevant terms:

59 Certificate

(1) A taxing officer may make separate and interim certificates.

(2) Where, in the course of the taxation of a solicitor’s bill to the solicitor’s own client, it appears to the taxing officer that in any event the solicitor will be liable in connection with the bill to pay money to the client, he may make an interim certificate specifying an amount which in his opinion is payable by the solicitor to the client.

(3) ...

(7) A taxing officer may make a separate or interim certificate in respect of any item in a bill notwithstanding an objection under rule 60 to his decision on any other item in the bill, or any reconsideration or review consequent on such an objection.

19. This rule distinguished between “interim” and “final” certificates, and confirmed that the taxing officer “may make a separate or interim certificate in respect of any item of a bill.”
20. In 1993, amendments were made to the Legal Profession Act 1987 with the introduction of the Legal Profession Reform Act 1993. These reforms replaced the system of taxation under the 1970 Rules with a system of “costs assessment”, intended to reduce complexity and time, and to introduce a faster, easier and cheaper system”: The Hon. J.P. Hannaford, NSW Legislative Council Parliamentary Debates, Hansard, NSW Legislative Council, 16 September 1993, 3269ff. The new s 208J headed “Certificate as to determination” provided that “On making a determination, a costs assessor is to issue to each party a certificate that sets out the determination.” Any doubt that may have existed about the power of the costs assessor to make interim determinations would appear to have been dispelled by the introduction of s 208J(1A) by the Legal Profession Amendment Act 1996 which said:

(1A) A costs assessor may issue more than one certificate in relation to an application for costs assessment. Such certificates may be issued at the same time or at different stages of the assessment process.

21. The Explanatory Memorandum to the Bill that introduced s 208J(1A) said this:

“Certificates of determination. Section 208J provides for the issue of a certificate of determination, setting out the determination of a costs assessor. That section is amended to make it clear that the costs incurred by a costs assessor are not included in a Certificate of determination (See Schedule 2 [14]) and that no further action is required for the enforcement of the amount of costs (See Schedule 2 [13]). Also, the section is amended to provide for the issue of more than one certificate in relation to a costs assessment. This would permit a certificate to be issued in respect of that part of the costs that are agreed to, allowing the costs assessor to continue the assessment in respect of the disputed costs only. A further certificate could be issued in respect of such costs. (See Schedule 2 [12])”

22. Mr Fordyce embraces this explanation as indicating that the reference to “costs that are agreed to” constrains the power to issue more than one certificate. Mr Corbett submitted that the reference to agreed costs was no more than an example of one situation in which an interim certificate might issue.
23. Section 368(2) was the successor to s 208J(1A). It remains in the Legal Profession Uniform Law Application Act 2014 in s 70(2).
24. The Costs Assessors Rules Committee, of which by way of complete disclosure I note I was an original member, was established under the 1987 Act to make rules of procedure for costs assessment. It produced a bulletin containing guidelines for assessors: see Ryan v Hansen t/as Hansens Solicitors (2000) 49 NSWLR 184; [2000] NSWSC 354 at [27]. That bulletin referred to the practice of interim certificates being issued. The Committee also later produced in 1997 the “Costs Rule – Certificates of Determination”, which provided standard forms, including Form 6, which was to be used when the assessor “has determined part of the costs...shall be paid as an interim payment”. Form 6 described the interim payment as “an interim payment...pending the final assessment”.
25. The defendants submitted that the power conferred by s 368(2) of the 2004 Act should be understood against the background of the legislative and regulatory history authorising, and the practice of issuing, interim certificates pending a final assessment.

The present case

26. In Harper v Firbank [1918] 2 KB 509, the Court of Appeal expressly endorsed the power of a Taxing Master, in certain circumstances, to issue an “interim certificate” and to vary an “interim” determination by a further certificate. The Court of Appeal concluded that, if a certificate was expressed to be “interim” or “on account of” a liability, that would not preclude variation by a later certificate. Provided a later decision to disallow a particular cost allowed on an interim determination was made on account of the assessment of remaining items in the bill on a final basis, an interim determination could be revisited. Pickford LJ at 516-518 said this:

“The question is whether the interim certificate was such a certificate or allocatur that any objection to the disallowance of the items in question should have been carried in before it was signed and could not be carried in afterwards. The answer depends upon Order LXV., r. 27, regs. 17(b) and 39, and upon the terms of the interim certificate which was issued by the taxing Master under these regulations. Reg. 17(b) provides that ‘The taxing officers ... shall have power and authority to make one or more interim certificate or certificates, allocatur or allocaturs, in any taxation for any portion or portions of the taxed costs ... without waiting until a certificate for the full amount can be made.’ Reg. 39 provides that ‘Any party who may be dissatisfied with the allowance or disallowance by the taxing officer, in any bill of costs taxed by him, of the whole or any part of any items, may, at any time before the certificate or allocatur is signed ... carry in before the taxing officer, an objection in writing to such allowance or disallowance ... and may thereupon apply to the taxing officer to review the taxation in respect of the same. The taxing Master may, if he shall think fit, issue, pending the consideration of such objections, a certificate of taxation or allocatur for or on account of the remainder of the bill of costs, and such further certificate or allocatur as may be necessary shall be issued by the taxing Master after his decision upon such objections.’ The interim certificate issued by the taxing Master was as follows: ‘Objections to my taxation have been lodged by the plaintiff, and pending my consideration thereof I certify that the defendants are entitled to the sum of 280l. on account of the items of the defendants’ said costs which are not the subject of objections, and I make this my interim certificate at the request of the defendants.’ The argument on behalf of the plaintiff is that the taxing Master by signing that interim certificate has signed a certificate which under reg. 39 has concluded the taxation of the bill of costs except of items which formed the subject of the then pending objections; and that he has irrevocably disallowed all such items including those now in question as then appeared disallowed in the bill of costs, that certificate thus being equivalent to a certificate specifically certifying the disallowance of those items. Whether the signing of the certificate had that effect depends entirely upon the terms of the certificate. Though the conclusion does not, perhaps, appear so clear to me as to my brothers, I think, looking at the terms of the certificate, that it is not such a certificate as prevents a subsequent objection from being taken in respect of an item previously disallowed on the bill without objection. I do not say that under reg. 39 an interim certificate might not be made which dealt with certain items allowed or disallowed up to that time without objection in such a way that it would be a certificate or allocatur the signing of which would preclude the taking of any other objection to those items. The certificate may be made wither in the form of allowing a sum ‘for’, or allowing I ‘on account of’, the remaining items in the bill which have not been objected to by either party. If the certificate were made in the form which allows a certain sum ‘for’ the remaining items which were not the subject of objections, I am inclined to think that it would preclude the taking of any subsequent objections as to these items. In this case, however, the interim certificate has not been made in that form, but in the form allowing a sum ‘on account of’ the remaining items in the bill which were not the subject of objections. The sum for which it has been issued, namely, 280l., is much less than the sum payable in respect of all the items in the bill which were not then the subject of objection and which were eventually allowed by the taxing Master. It, therefore, seems clear that that certificate cannot have been issued in respect of all these items. The taxing Master might no doubt have issued a certificate certifying the allowance or disallowance of all the items which were not the subject of objections up to the time when the certificate was signed, and if he had done so I might have agreed with counsel for the plaintiff. I do not, however, think that the certificate which the taxing Master has issued is a certificate of that kind either in form or effect. That being so, I think that the certificate which the taxing Master has signed is not a certificate which prevents the carrying in of objections at any time after it has been signed, but that it is open to the parties to carry in objections up to the time of the signing of the final certificate.” [Emphasis added]

27. Warrington LJ was of the same opinion. Scrutton LJ also agreed and said this at 521-522:

“I agree that in certain events the issuing of a certificate would prevent the taxing Master from changing his mind. If he issues a certificate dealing specifically with certain items for a specified amount covering these items, I can understand that it is not open to him to reconsider the question whether or not these items should be allowed. It may also be, if the taxing Master has under reg. 39 fixed a time for the carrying in of objections to particular items by the parties and they have not brought in objections within that time, that he would be prevented from considering subsequent objections in regard to these items. Here, however, the taxing Master did not issue a certificate dealing specifically with particular items, or fix a time for the bringing in of objections to particular items. He merely issued a certificate which allowed a round sum of 280l. ‘on account of’ the items in the defendants’ bill of costs which were not the subject of objections. As I understand the argument, it is that a certificate for 280l. on account of items not the subject of objection is the same as a certificate for 280l. and no more in respect of these items. I cannot take that view. It seems to me that this certificate did not prevent the defendants from raising the objection to the disallowance of the items in question, or the taxing Master from entertaining the objection and allowing the items, but that the objection could be taken and considered at any time before the final certificate or allocatur was made.

The provision in this interim certificate that the defendants are entitled to the sum mentioned on account of their costs is a provision in the defendants’ favour, and why an interim certificate which is in the defendants’ favour should prevent them from taking an objection to other items, or the taxing Master from considering the objection, I cannot understand.” [Emphasis added]

28. In the present case, the costs assessor wrote to the parties on 19 August 2020 indicating that the assessment of costs had been assigned to him. He made some preliminary and general comments and observations to which it is unnecessary to refer. However, the costs assessor referred specifically to Mr Fordyce’s concern about separately assessing expenses and fees and to the “severe prejudice” to the Fordyce parties claimed by Mr Fordyce if this were to occur. The costs assessor went on to outline what he proposed, and later under the heading SUMMARY indicated that he was inclined to do certain things, including the following:

“13.4 I will issue probably two interim determinations, each relating to expenses claimed pursuant to the first and second costs orders respectively, so that if need be, adjustments can be made later to the total amount, in the event that either the Ho parties or the Fordyce parties seek assessment of fees. Any such interim certificates would be enforceable in the same way as a final certificate.”

29. On 15 September 2020, Mr Fordyce wrote to the costs assessor in terms that included the following:

“My understanding of your present position is that you propose to issue an interim certificate for the disbursements to which no objection has presently been made. The Costs Respondents’ position is that they may have objections to make to those disbursements that are not presently challenged but they may have objections when they see the Costs Applicant’s response to the New Costs Assessment. If objections are then lodged by the Costs Respondents in the New Costs Assessment that would require a reduction of the disbursements that you are going to rule on now without any further delay, then you will adjust the disbursements that have been the subject of your interim order in the New Costs Assessment.”

30. The Costs Assessor replied to that (and other) letters on 22 September 2020, and under the heading “Pre-completion Certificate” he included the following:

“6.2 & 3 The certificate will be a pre-completion certificate. The completion of the assessment of expenses and the assessment of fees sought by the new application will be assigned to me. Thus is [sic, if] any adjustment needs to be made, I can make that adjustment in the final assessment of fees and expenses in this and the new matter. There is no reason to further delay the issue of a pre-completion certificate in this matter. I do not require agreement from the Ho parties or anyone else to waive ‘any such legal entitlement...to challenge...taking that step”.

31. Shortly thereafter, the Costs Assessor dealt with the disbursements in his first pre-completion certificate. He made it clear in his reasons, in terms redolent of the views expressed by the English Court of Appeal, that his pre-completion certificate was not to operate in a way that precluded variation of the assessed amount at a later time: the costs assessor’s certificate was, in the words of the Court of Appeal, on account of the remaining items in the bill, and did not deal specifically with certain items. His Pre-Completion Costs Assessment Reasons dated 28 October 2020 made this clear:

“9.14 The Fordyce parties submit that there would be severe prejudice to them allowing assessment of expenses only, because if it was subsequently found when assessing fees that an expense item ought to have been disallowed or reduced, the opportunity to do that would have passed. The assessment could not then be altered. In addition, the submission is that assessment of fees can depend on assessment expenses and vice versa. As an example, an issue may arise as to whether a solicitor’s rate is reasonable (which objection relates to fees), but the approach taken to expenses (such as barrister’s charges) may affect the reasonable rate for fees – if a solicitor does little of the legal work and engages barristers to do most of it, it may be that the appropriate rate for the solicitor is lower than it would otherwise have been.

9.15 I accept that there can be an interrelationship between assessment of fees and assessment of expenses, as in the example given immediately above.

9.16 In answer to the objection that the opportunity to allow or reduce costs would have passed if I assess expenses, I will issue a pre-completion certificate in relation to expenses. That certificate is enforceable, but the amount could be either increased or decreased when I complete the assessment of expenses. I can complete the assessment of expenses and issue a final certificate after I complete assessment of fees. In the unlikely event that assessment of fees is assigned to a different assessor, I can take the result of that assessment into account when I issue a final certificate.”

32. As if to re-emphasise this point, the Costs Assessor said the following in his Pre-Completion Costs Assessment Reasons dated 21 May 2021:

“5.18 I note my pre-completion costs assessment reasons in the 2019/236020 assessment dated 28 October 2020 dealt at length with the submissions of Mr Fordyce for the Fordyce parties about the criteria for assessment, the court orders, interest, whether expenses only could be assessed, travel, hourly rates, details, verification of time, the charges of Klein & Co, the charges of Mr Parker SC, the charges of Digital Forensics and the charges of Brian Knox SC. The expenses that I allowed on a pre-completion basis only came to ($273,194.64 +$4,950.00 =) $278,142.64.

5.19 Given the nature of the proceedings, recited in those pre-completion reasons, the claim for expenses in the 020 assessment, and the claim for fees in this assessment, it is extraordinarily unlikely that the total amount I will allow for expenses in the related assessment 020 on a pre-completion basis, and fees and expenses in this assessment will be less than the total of the pre-completion certificates. As I have indicated I have deliberately set the amounts on a pre-completion basis low, to try to ensure that does not happen.” [Emphasis in the original]

33. There is in the circumstances an informative symmetry between the English Court of Appeal decision and the actual result in the assessments under consideration here, particularly in light of the correspondence between the Costs Assessor and the parties and his Pre-Completion Costs Assessment Reasons.

Consideration

34. Mr Fordyce maintains that while a certificate could be issued under s 368(2) or s 208J(1A) in relation to an item of costs before completion of the whole assessment, it must be a final “determination” in relation to that item, which item cannot be revisited by a later certificate. Mr Fordyce seeks to draw support for this conclusion by maintaining that the issue of a certificate by a costs assessor has the result that the costs assessor is then functus officio with respect to the items considered and assessed in the certificate. He submitted that the doctrine of finality supported his position.
35. As the defendants point out, there is nothing in the text of the Act that limits the power in the way Mr Fordyce suggests. Any such limitation on the power must therefore be implied. However, such a suggested limitation does not avail Mr Fordyce in this case, having regard to the way in which the costs assessor dealt with the items, which was in accordance with the long-established practice considered in Harper v Firbank and the express provision to be found in rule 59.7 of the 1970 rules.
36. With respect to Mr Fordyce, the conclusion he asks me to draw is not one that in my opinion flows from a consideration of the relevant provision in this case. Moreover, his purported reliance on the proposition that a costs assessor becomes functus once a certificate is issued is a tautological conclusion: it would only flow, if at all, if his argument were correct. It is, however, not a reason or factor that informs or supports his submission that his argument is correct.
37. Finally, the consequences that Mr Fordyce suggests would flow if his arguments are not accepted are illusory. So much is apparent from the dearth of judicial decisions that have considered the allegedly inconvenient or unjust results that Mr Fordyce warns a literal interpretation of s 368(2) would produce. On the contrary, provided that a full account may be taken of the competing claims in the final costs assessment process, the convenience of interim or pre-completion certificates is obvious. For example, if the party liable is required, in an appropriate case, to make an early payment of some money on account of their liability, that is a better approximation of justice than the alternative: Mars UK Limited v Teknowledge Limited [1999] EWHC 226; [2000] FSR 138; Brereton J (writing extra-judicially) in his Report of the Chief Justice’s Review of the Costs Assessment Scheme (Supreme Court of New South Wales, 12 March 2013), [3.8.1] – [3.8.2].
38. In the present case, the costs assessor’s reasons make it perfectly clear that all parties to the assessment process would be entitled to a full accounting by way of reconciliation between certificates produced by him in the event that either party wished that to occur.
39. Mr Fordyce also raises a ground of appeal contending that the assessor contravened the requirement in s 359(1) of the 2004 Act that he give each party a reasonable opportunity to be heard and to make submissions. The assessor’s reasons, however, make it abundantly clear that he was exceedingly forbearing in his approach to his task. I am unable to discern any basis that is apparent from those reasons, or the material that is otherwise before me, including Mr Fordyce’s submissions, that could faintly support a conclusion that Mr Fordyce was not given the reasonable opportunity to which the section refers.
40. In my opinion, s 368(2) is not subject to the limitations or restrictions that Mr Fordyce describes. The terms of the sub-section are clear. A costs assessor has the power to issue more than one certificate in relation to an application for costs assessment and such certificates may be issued at the same time or at different stages of the assessment process. That includes the power to issue an interim certificate that is, or may be, later qualified by a final certificate. I consider that a costs assessor may legitimately issue a certificate for payment of an amount that is to be treated, in effect, as issued on account of the final liability for all costs ultimately assessed to be payable.

Should leave be granted?

41. Mr Fordyce requires leave pursuant to s 385(2) of the Act. The considerations that inform the question of whether leave should be granted in a case such as this were helpfully considered by Walton J in Ackerman v Morgan [2019] NSWSC 1250 at [49]- [53].
42. The defendants submitted that the following matters weighed in favour of a refusal of leave.
43. First, Mr Fordyce has commenced appeals in the District Court pursuant to s 384 of the Act. Those appeal proceedings are still current.
44. Secondly, Mr Fordyce’s appeals to this Court were not commenced in a timely manner. Even though the District Court appeals were commenced within time, Mr Fordyce has not sought to transfer those proceedings into this Court.
45. Thirdly, the assessor has now completed his determinations on a final basis. Significantly in my opinion, Mr Fordyce has not demonstrated that the theoretical or hypothetical iniquities that he has maintained might flow from the issue of multiple certificates in a costs assessment process have come to fruition in his case. As I have already observed, the detailed reasons provided by the costs assessor make it plain that any disadvantage that might possibly flow from the combination of certificates that he has issued would be accommodated or taken into account by him if required. Mr Fordyce has not satisfied me that he is the beneficiary of any unfairness or misfortune in the events that have occurred.
46. Finally, Mr Fordyce has previously relied upon one of the judgments based on a pre-completion certificate that he now attacks: see Fordyce v Leung [2022] NSWCA 55 at [113]:

“[113] An additional matter supporting the dismissal of the judicial review proceedings in this Court on a discretionary basis is the approach he has taken to the garnishee order. After the primary judge refused to set aside the judgment of 21 January 2021, Mr Fordyce submitted to his Honour that the funds paid by Mrs Slattery in response to the garnishee order should be paid out to his wife. In so submitting he sought to rely on, and not attack, the judgment of 21 January 2021 that was in turn based on the costs assessment issued on 28 October 2020. In his judicial review proceedings in this Court, Mr Fordyce now seeks to set aside the judgment of 21 January 2021 without seeking to undo the payment of funds to his wife out of the funds paid into Court by Mrs Slattery.”

47. To that limited extent at least, Mr Fordyce appears to be approbating and reprobating.

Conclusion

48. Mr Fordyce’s arguments concerning s 368(2) are in my view not even superficially attractive. However, as all parties accept, there has been no judicial consideration of his contentions previously. Having regard to the view I have formed, that may not be terribly surprising.
49. In these circumstances I consider that the following orders should be made:
    • (1) Grant leave to Mr Fordyce for the limited purpose of arguing what I shall describe as the s 368(2) grounds notified in the Amended Summons in each case.
    • (2) Dismiss the appeals relying on those grounds.
    • (3) Otherwise refuse leave to rely upon the balance of grounds notified in the Amended Summons in each case.

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