Bell Lawyers Pty Ltd v Pentelow

• Jurisdiction: Australia Federal only
• Judge: Kiefel CJ,Bell,Keane,Gordon JJ.,Gageler J.,Nettle J.,Edelman J.
• Judgment Date: 04 September 2019
• Neutral Citation: [2019] HCA 29
• Court: High Court
• Docket Number: S352/2018
• Date: 04 September 2019

Bell Lawyers Pty Ltd

Appellant

and

Janet Pentelow & Anor

Respondents

[2019] HCA 29

Kiefel CJ, Bell, Gageler, Keane, Nettle, Gordon and Edelman JJ

S352/2018

HIGH COURT OF AUSTRALIA

Practice and procedure — Costs — Legal practitioners — Barristers — Where self-represented litigant may not obtain any recompense for value of his or her time spent in litigation — Where exception commonly referred to as “ Chorley exception” exists for a self-represented litigant who is a solicitor — Where first respondent is a barrister — Where first respondent undertook legal work in litigation in which she was represented — Where first respondent incurred costs on her own behalf and for legal services provided by herself — Whether Chorley exception operates to benefit barristers — Whether Chorley exception recognised as part of common law of Australia.

Words and phrases — “anomalous”, “ Chorley exception”, “common law of Australia”, “costs”, “costs payable”, “creature of statute”, “employed solicitors”, “equality before the law”, “exception to the general rule”, “exercise of professional skill”, “incorporated legal practice”, “indemnity”, “judicial abolition”, “professional legal services”, “prospective overruling”, “remuneration”, “rule of practice”, “rules committees”, “self-represented litigants”, “statutory power”.

Civil Procedure Act 2005 (NSW), ss 3(1), 98(1).

Representation

B W Walker SC with M Castle for the appellant (instructed by Bell Lawyers)

G O'L Reynolds SC with D P Hume for the first respondent (instructed by Castagnet Lawyers)

Submitting appearance for the second respondent

ORDER

• 1. Appeal allowed.

• 2. Set aside orders 1 to 4 of the Court of Appeal of the Supreme Court of New South Wales made on 13 July 2018 and, in their place, order that:

  • (a) the summons for judicial review be dismissed; and

  • (b) the first respondent (Ms Pentelow) pay the costs of the appellant (Bell Lawyers Pty Ltd) in the District Court of New South Wales and the Court of Appeal of the Supreme Court of New South Wales.

• 3. The first respondent pay the appellant's costs of the appeal to this Court.

1 Kiefel CJ, Bell, Keane AND Gordon JJ. As a general rule, a self-represented litigant may not obtain any recompense for the value of his or her time spent in litigation 1. Under an exception to the general rule, a self-represented litigant who happens to be a solicitor may recover his or her professional costs of acting in the litigation. This exception is commonly referred to as “the Chorley exception”, having been authoritatively established as a “rule of practice” by the Court of Appeal of England and Wales in London Scottish Benefit Society v Chorley2.

2 One issue raised by this appeal is whether the Chorley exception operates to the benefit of barristers who represent themselves. Another, more fundamental, issue is whether the Chorley exception should be recognised as part of the common law of Australia.

3 The Chorley exception has rightly been described by this Court as “anomalous” 3. Because it is anomalous, it should not be extended by judicial decision 4 to the benefit of barristers. This view has previously been taken by some courts in Australia 5. Dealing with the matter more broadly, however, the Chorley exception is not only anomalous, it is an affront to the fundamental value of equality of all persons before the law. It cannot be justified by the considerations of policy said to support it. Accordingly, it should not be recognised as part of the common law of Australia.

The proceedings

4 The appellant, an incorporated legal practice, retained the first respondent (“the respondent”), a barrister, to appear in proceedings in the Supreme Court of New South Wales in a matter under the Family Provision Act 1982 (NSW). Following the conclusion of those proceedings, a dispute arose as to the payment of the respondent's fees 6.

5 The appellant paid only a portion of the bill rendered by the respondent for her services, and the respondent sued the appellant for the balance of her fees in the Local Court of New South Wales. She was unsuccessful in that proceeding, but appealed successfully to the Supreme Court of New South Wales. The appellant was ordered to pay the respondent the balance of her unpaid fees. Orders for costs were also made in the respondent's favour in relation to both the Local Court and the Supreme Court proceedings 7.

6 The respondent was represented by a solicitor in the Local Court proceeding, and by solicitors and senior counsel in the Supreme Court proceeding. In each proceeding, the respondent had undertaken preparatory legal work which included, among other things, compiling written submissions, drawing her affidavit evidence, legal research, reviewing submissions in reply, and advising senior counsel on various issues. The respondent also attended court in person on a number of directions hearings and for the purpose of taking judgment 8.

7 The respondent forwarded a memorandum of costs to the appellant pursuant to those costs orders. The total sum claimed was $144,425.45, which included $22,605 for “Costs incurred on her own behalf” in the Local Court proceeding and $22,275 for the “Provision of Legal Services Provided by herself” in the Supreme Court proceeding 9.

8 The appellant refused to pay the costs claimed for the work undertaken by the respondent herself. Pursuant to s 353 of the now-repealed Legal Profession Act 2004 (NSW), the appellant made an application for assessment of the costs

claimed by the respondent. The costs assessor rejected the respondent's claim for the costs of the work she had performed herself on the ground, among others, that in New South Wales the Chorley exception does not apply to barristers 10

9 The costs assessor's decision was affirmed on appeal by the Review Panel 11. The respondent appealed against the decision of the Review Panel to the District Court of New South Wales, but her appeal was dismissed by the primary judge (Judge Gibson) 12.

The Court of Appeal

10 The respondent sought judicial review of the decision of the District Court in the Court of Appeal of the Supreme Court of New South Wales 13. The primary issue was whether the respondent could rely upon the Chorley exception 14. A subsidiary issue arose as to whether the respondent was a “self-represented” litigant, but this issue was held not to be amenable to judicial review as it concerned a finding of fact 15. That subsidiary issue need not be further considered. The Court of Appeal proceeded on the basis that the issue was whether the Chorley exception applied to the respondent as a barrister, in circumstances where she had undertaken legal work in litigation in which she was represented 16.

11 The Court of Appeal held by majority (Beazley A-CJ and Macfarlan JA, Meagher JA dissenting) that the respondent was entitled to rely upon the Chorley

exception for the same reason that a solicitor is so entitled, namely, that her costs were quantifiable by the same processes as solicitors' costs 17

12 Meagher JA, in dissent, expressed reservations as to the continued application of the Chorley exception to solicitors, but accepted that he was bound by authority to hold that the exception still exists. Nevertheless, his Honour rejected the “extension” of the Chorley exception to barristers 18.

The power to order costs

13 The power to make an order for costs is conferred on the courts of New South Wales by s 98(1) of the Civil Procedure Act 2005 (NSW), which provides:

“Subject to rules of court and to this or any other Act:

• (a) costs are in the discretion of the court, and

• (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and

• (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.”

14 Section 3(1) of the Civil Procedure Act defines “costs” as follows:

“ costs, in relation to proceedings, means costs payable in or in relation to the proceedings, and includes fees, disbursements, expenses and remuneration.”

15 On one view, the reference to “costs payable” in this definition is an indication that an order for costs may be made only in respect of costs payable by the party in whose favour the order is made to another person for services rendered. On this view the Chorley exception is inconsistent with the statutory definition of costs and, costs being a creature of statute, the Chorley exception has been displaced by the Civil Procedure Act.

16 This view, which commended itself to Meagher JA below 19, was advanced by the appellant in argument in this Court. The respondent argued that the legislature did not intend to abrogate the Chorley exception by ss 3 and 98(1) of the Civil Procedure Act in the absence of clear words to that effect. It is preferable to address the proper effect of ss 3 and 98(1) of the Civil Procedure Act in the context of a discussion of the broader question whether the Chorley exception should be recognised as part of the common law of Australia. The examination of that question may conveniently proceed by reference to the principal authorities referred to by the parties in the course of argument in this Court.

Chorley

17 One may begin with a consideration of the reasons said to support the Chorley exception. In that case, Brett MR stated the general rule, and the exception to it, in the following terms 20:

“When an ordinary party to a suit appears for himself, he is not indemnified for loss of time; but when he appears by solicitor, he is entitled to recover for the time expended by the solicitor in the conduct of the suit. When an ordinary litigant appears in person, he is paid only for costs out of pocket. He cannot himself take every step, and very often employs a solicitor to assist him: the remuneration to the solicitor is money...