Background
George Mavrakis acted as solicitor for Connor John Malouf in a personal-injury claim until terminating the retainer in 2021 for non-payment of disbursements. A costs assessor subsequently allowed $109,519.80 in professional fees, expenses and disbursements and issued a determination certificate for $111,274.54 including part of the assessment filing fee.
On Malouf’s application for review, a Review Panel substituted a determination of $31,158.63 for disbursements and found that Mavrakis was not then entitled to professional fees. Among other things, the Panel found failures to comply with costs-disclosure obligations and said that, if required to assess the professional fees, it would have allowed $55,000 including GST. Mavrakis appealed under s 89 of the Legal Profession Uniform Law Application Act 2014 (NSW). After Malouf’s injury claim settled for $500,000, the District Court held that the statutory personal-injury costs cap did not apply and reinstated the assessor’s determination without itself assessing whether the costs were fair and reasonable. Malouf sought judicial review.
The Court’s Holding
The Court of Appeal held that the District Court committed jurisdictional error by failing to perform the statutory task required on an appeal under s 89. Because the appeal was by way of rehearing and the District Court had all the functions of the Review Panel, it had to decide for itself whether the costs were fair and reasonable by reference to the matters specified in the Legal Profession Uniform Law. It was not permitted simply to accept the costs assessor’s figure because costs assessors possess practical advantages in assessing costs.
The error was material because there was a realistic possibility that an independent assessment would have led the District Court to accept some or all of the Review Panel’s reasons for reducing the professional fees. The Court also explained that disclosure noncompliance could be considered in assessing costs, although it rejected Malouf’s separate contention that he had been denied procedural fairness. It extended time to the extent necessary, set aside the District Court’s orders of 12 December 2025, 13 February 2026 and 5 March 2026, remitted the matter to the primary judge, and made no costs order in the Court of Appeal.
Key Takeaways
- A District Court appeal under s 89 is a rehearing requiring the court to determine for itself whether disputed legal costs are fair and reasonable.
- A court cannot discharge that responsibility merely by adopting a costs assessor’s determination based on the assessor’s expertise.
- Noncompliance with statutory costs-disclosure obligations may be relevant when assessing whether legal costs are fair and reasonable.
Why It Matters
The decision clarifies the District Court’s role in appeals from legal-costs review determinations in New South Wales. Even when the original assessor is better placed to evaluate detailed billing, the appellate court must exercise the functions conferred on it and independently address the statutory assessment criteria.
It also confirms that a material failure to undertake that task can amount to jurisdictional error reviewable by the Supreme Court, requiring the resulting orders to be set aside and the costs dispute reheard.