Background
Christopher Adamson, a solicitor acting for himself, commenced proceedings by summons challenging the Manager, Costs Assessment’s referral of a solicitor-client costs assessment to costs assessor Marilyn Filewood. He alleged apprehended bias and conflict, including because the assessor was located in the same area as him, and sought to prevent or alter the assessment. The dispute arose from earlier estate litigation involving Gregory and Isaac Chalik.
While the summons was pending, the assessor completed the assessment. Adamson was determined to owe more than $36,000 in assessment costs, but did not pay the invoice. Under the applicable regulation, the certificates could not be released to the parties until those costs were paid, leaving Gregory unable to use the substantive costs determination—which apparently found that more than $52,000 had been overpaid—to register a judgment.
Adamson later sought leave to file a statement of claim adding different allegations, including bias, injurious falsehood and $1 million damages against Isaac Chalik. He had repeatedly failed to serve applications, file evidence or comply with procedural directions. Isaac sought dismissal and gross-sum indemnity costs.
The Court’s Holding
Lonergan J refused leave to file the proposed statement of claim. Proceedings begun by summons could not be converted into an entirely different damages and declaratory claim after the original relief had become ineffective. The proposed repleading was an abuse of process, and the court also noted that similar defamation proceedings against Isaac had subsequently been summarily dismissed.
The Court dismissed the summons because the referral had been acted upon and the assessment completed, so events had overtaken the limited relief originally sought. Continuing the case was an abuse of process. Although the Court sympathised with Gregory’s inability to obtain the assessment certificate while Adamson’s assessment costs remained unpaid, it held that the statutory provisions did not override the regulation requiring payment before release. It suggested the Manager or assessor consider whether the separate certificate for assessment costs could be filed as a judgment, while noting statutory ambiguity on that question.
Isaac was awarded indemnity costs in a gross sum of $25,426 inclusive of GST. Adamson should have known the claim against Isaac had no prospects of success, had been warned promptly that indemnity costs would be sought, and had caused Isaac to incur unnecessary costs in litigation to which he was only peripherally relevant.
Key Takeaways
- A party cannot use an amendment application to transform a summons proceeding into a new claim for damages and different causes of action.
- A costs-assessment challenge may be dismissed as an abuse of process once the assessment has been completed and the original relief is spent.
- Regulation 44 prevented release of the costs certificates until assessment costs were paid, despite the practical prejudice to the successful client.
- Indemnity, gross-sum costs may be appropriate where a party persists against a defendant with no viable claim and has been warned of the costs consequence.
Why It Matters
The decision is a firm procedural warning against using interlocutory steps, unserved motions and proposed amendments to avoid the consequences of adverse rulings. It also illustrates the court’s willingness to use abuse-of-process powers where litigation has become pointless and is being conducted without compliance with court orders.
For costs practitioners, the case exposes a practical issue in the NSW costs-assessment scheme: a party entitled to recover money under an assessment may be unable to obtain the certificate while the party liable for assessment costs refuses to pay them.