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Tabtill No 2 Pty Ltd v DLA Phillips Fox (a firm)

 

[2012] QSC 115

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Tabtill No 2 Pty Ltd & Ors v DLA Phillips Fox (a firm) & Anor [2012] QSC 115

PARTIES:

TABTILL NO. 2 PTY LTD (ACN 098 424 741)
(first applicant)
and
JOHN FRANCIS CRESWICK
(second applicant)
and
WILLIAM GERARD CRESWICK
(third applicant)
and
SHAYNE MARISE CRESWICK
(fourth applicant)
and
JANE VERONICA CRESWICK
(fifth applicant)
v
DLA PHILLIPS FOX (A FIRM)
(first respondent)
and
DLA PIPER AUSTRALIA (A FIRM)
(second respondent)

FILE NO:

BS 1971 of 2012

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

27 April 2012

DELIVERED AT:

Brisbane 

HEARING DATE:

10 April 2012

JUDGE:

Applegarth J

ORDERS:

1.The application be dismissed in relation to the invoices which are listed as items 1 to 29, 32, 37 and 53 to 68 of MDG-6 of the affidavit of Mr Gill filed 5 April 2012;

2.By 11 May 2012, the applicants file and serve an affidavit or affidavits which:

(a)states which of the costs referred to in the invoices (including those delivered by the respondents on 21 March 2012 and 5 April 2012) are required to be assessed, excluding those invoices referred to in paragraph 1;

(b)if the applicants wish to dispute any of the costs in 2(a), the grounds on which the applicants rely to dispute the amount of the costs or liability to pay them.

3.Should the parties fail to agree by 25 May 2012 as to the amount payable in respect of the legal costs charged in the invoices referred to in paragraph 2(a) above, then those legal costs be assessed pursuant to Part 3.4 Division 7 of the Legal Profession Act 2007 and Michael Graham be appointed as costs assessor to undertake the assessment of the invoices referred to in paragraph 2(a) above;

4.Costs of and incidental to the application and the carrying out of these orders be reserved.

CATCHWORDS:

PROCEDURE – COSTS – Costs assessment – where legal services were provided by the respondents to the applicants between December 2007 and September 2011 – where 115 tax invoices were issued for those legal services – where applicant seeks assessment of costs pursuant to s 335 Legal Profession Act 2007 (Qld) (“the Act”) – where many invoices were issued more than 12 months prior to the application being filed on 2 March 2012 – where respondent accepts that the applicant is entitled to assessment in relation to invoices issued within 12 months prior to 2 March 2012 – where respondent contends that the applicant is time-barred in relation to earlier invoices by virtue of s 335(5) of the Act – whether invoices constitute interim or final bills – whether applicant is entitled to an assessment of costs on all invoices issued by the respondent

PROCEDURE – COSTS – Itemised bills – where applicant seeks a direction pursuant to r 743C Uniform Civil Procedure Rules 1999 (Qld) that the respondent deliver itemised bills – whether information provided by the respondents to the applicants is inadequate – whether the respondent should be directed to deliver itemised bills

Legal Profession Act 2007 (Qld), ss 300, 330, 332, 333, 334, 335, 341

Uniform Civil Procedure Rules 1999 (Qld), rr 5, 743A(5), 743C

Clayton Utz Lawyers v P & W Enterprises Pty Ltd [2011] QDC 5, cited

Golder Associates Pty Ltd v Challen [2012] QDC 11, cited

Malleson, Stewart, Stawell and Nankivell v Williams [1930] VLR 410, cited

Ralph Hume Garry v Gwillim (CA) [2003] 1 WLR 510, considered

Re Lynch and Co Bill of Costs [2000] QSC 3, followed

Re Romer & Haslam [1893] 2 QB 286, cited

Re Walsh Halligan Douglas’ Bill of Costs [1990] 1 Qd R 288, cited

Turner v Michells Solicitors [2011] QDC 61, followed

Vitobello and Hayter v Russell & Co Solicitors [2009] QDC 249, cited

COUNSEL:

P G Lynch (solicitor) for the applicants

K E Downes SC and C J Conway for the respondents

SOLICITORS:

Lynch Morgan Lawyers for the applicants

DLA Piper Australia for the respondents

  1. The applicants are former clients of the first and second respondents, which provided legal services to the applicants between 2008 and 2011. During those years the first respondent, and then its successor, the second respondent, billed the applicants in the form 115 tax invoices issued on separate files or matters. Many of the matters related to disputes between members of the Creswick family who were involved in major litigation.
  1. The amount of work undertaken by the respondents was very large, as was the total amount billed by them. The second respondent retains about 987 lever arch folders in relation to work undertaken for the applicants and which are the subject of this application. The total amount billed over the years in the various matters (including counsel’s fees and other disbursements) has been calculated at $6,701,389.74, of which $2,475,804.95 has been paid, leaving a total amount outstanding of $4,225,584.79.
  1. On 2 March 2012 the applicants applied for orders for the assessment of the legal costs charged by the first respondent and the second respondent in certain tax invoices. The application misdescribes in numerous respects the invoices, their dates and the amounts stated in the invoices. The respondents have taken the time and trouble to identify and correct these numerous errors in the application and have compiled tables of all invoices issued to the applicants. There are 115 invoices listed in respect of various matters with dates ranging from early 2008 to late 2011. Many of the items in the table are “disbursement only invoices”.
  1. Section 335(5) of the Legal Profession Act 2007 (Qld) (“the Act”) provides that an application for an assessment must be made within 12 months after the bill was given.  Notwithstanding this, the application for an assessment includes items that were billed for work done in connection with a trial that concluded on 9 November 2009 and for invoices that were given at around that time.  The substantial issues for determination on this application are:
  1. Whether the applicants are entitled to an assessment of the whole or any part of the relevant legal costs and, in particular, whether the application for assessment is met in part by the 12 month time limit contained in s 335(5) of the Act;  and
  1. In respect of those costs to which the applicants are entitled to an assessment, and in respect of which it is alleged they have not received an “itemised bill”, whether I should order that an itemised bill be given to them.

Background facts

  1. On or about 20 December 2007 the first respondent was retained to act for the applicants and other parties in relation to a dispute between those parties and Felix Creswick.  The first respondent received instructions on an urgent basis to deal with a pending court application and other matters. 
  1. On or about 28 February 2008 the first respondent entered into a client agreement with the applicants and other related corporate entities. The agreement was in the form of a letter dated 28 February 2008 which incorporated certain Standard Conditions. The letter referred to the fact that matters in dispute raised complex issues and put in issue “all the Creswick family financial issues since, virtually 1979, including the businesses run by Tabtill companies”. The letter that constituted the client agreement stated under the heading “Instructions” the following:

“I confirm that we will provide legal services in relation to the dispute between John Creswick, William Creswick, Shayne Creswick, and Jayne Creswick and all the other parties to the litigation and their estranged father/father-in-law, Felix Creswick.  Legal services include acting in relation to the Supreme Court of Queensland Proceedings No 10963 of 2007 and No 1927 of 2005, and associated disputes between the parties.

If there are any areas which you wish us to cover and which are not detailed above, please let me know as soon as possible.”

The letter stated that Tony Conaghan would be the partner responsible for the work and identified other legal practitioners who would primarily perform the work.  It dealt with various other aspects of the way in which the work would be performed.  It stated that the legal costs that would have to be paid consisted of both professional fees and expenses, and that the first respondent would charge on a time costing basis.  It explained what this meant.  The client agreement identified the rates at which the time of the legal professionals would be charged and included a schedule of expenses.

  1. The agreement advised of the applicants’ rights, including the right to apply for an assessment of all or part of the legal costs charged and the timeframes within which an application for an assessment would need to be made. The agreement provided that accounts would be sent on a monthly basis and a final account would be sent when the matter was completed. It specified when payment was due. It also made provision for the client to end the agreement and withdraw instructions at any time and for any reason. The firm was also entitled to end the client agreement in certain circumstances.
  1. The respondents adopt the practice of opening and maintaining different files for different sets of instructions received from clients. These separate files are assigned a different matter number or sub-matter number. Once a matter or sub-matter number is assigned to a file, separate physical files and document management are maintained and separate time recording and billing undertaken. This practice was undertaken in relation to the work performed by the respondents for the applicants.

Creswick & Ors v Creswick, Brisbane Supreme Court 10963 of 2007 (DLA Phillips Fox reference: 0443287)

Preparation and trial instructions (items 1 to 25, 29, 32 and 37)

  1. A large amount of the total costs in respect of which assessment is sought relates to work undertaken by the first respondent prior to December 2009 in preparation for and attendance at trial before Daubney J. The trial took place over a number of weeks on various dates between 7 September 2009 and 9 November 2009. Judgment was delivered on 13 September 2010.
  1. Between 4 February 2008 and 30 October 2009 the first respondent issued the tax invoices which appear at Items 1 to 24 in the tables which have been prepared by the respondents in relation to this application (Exhibit MDG6 to the affidavit of Mr Gill filed 5 April 2012 and Exhibit MDG13 to his affidavit sworn on 10 April 2012 and filed 11 April 2012).  Mr Gill, who is employed by the second respondent in the position of special counsel and who has the conduct of this matter on behalf of the respondents deposed that the work for which the first respondent was retained:

(a)on or about 20 December 2007 to act in respect of proceeding 10963 of 2007, namely taking steps to prepare for and represent the applicants at the trial to determine the claim commenced against Felix Creswick by the applicants;  and

(b)after 12 February 2008 to take all steps necessary to prepare for and represent the applicants at the trial of the counterclaim commenced against the applicants by Felix Creswick;

was completed by the first respondent once the trial before Daubney J concluded on 9 November 2009.  He deposes that the first respondent’s retainer in this regard ended after 9 November 2009.

  1. On 2 December 2009, being the month after the trial concluded, the first respondent issued the tax invoice which is item 25 in respect of trial costs. Subsequently tax invoices were issued which are items 29, 32 and 37 which were disbursement only invoices, being invoices for counsel’s fees only in connection with the trial.

Creswick & Ors v Creswick, Brisbane Supreme Court 10963 of 2007 (DLA Phillips Fox reference: 0443287)

Post-trial instructions (items 26 to 28)

  1. The invoices which appear at items 26 to 28 of Exhibit MDG6 to the affidavit of Mr Gill filed 5 April 2012 were for separate and distinct legal services performed pursuant to instructions received post-trial and which was work performed between the trial and the judgment.  The work undertaken by the first respondent and subject to these tax invoices involved:

(a)preparation for the delivery of judgment (including preparations to remove caveats attached to land the subject of proceedings and dealings with financiers);  and

(b)compliance with orders made by White J (as her Honour then was) dated
28 February 2009.

Mr Gill deposes that this work was “separate and distinct” from the work which was the subject of tax invoices issued between February 2008 and October 2009 (Items 1 to 24) and after the trial in relation to trial costs (Items 25, 29, 32 and 37). 

  1. The final bill for the work performed in relation to these matters was delivered in 2010, and the respondents submit that the applicants are time-barred from seeking an assessment of the invoices which are listed as items 26 to 28.

Bunker Road Development (DLA Phillips Fox reference: 0459496)
(items 53 to 62)

  1. The first respondent was retained to provide legal services for the applicants in respect of issues related to the development of a property located at Bunker Road in Victoria Point. Between 26 September 2008 and 31 August 2009, the first respondent issued the tax invoices which appear at items 53 to 62.  All but one of the tax invoices (being item 62) has been paid. The final bill for the work performed pursuant to these instructions was delivered in 2009 and so the respondents submit that the applicants are time-barred from seeking an assessment of these items.

Creswick Group Restructure (DLA Phillips Fox reference: 0468319)
(item 63)

  1. The first respondent was retained to provide legal services for the applicants in respect of a proposed restructure of the Creswick Group. Those legal services were provided, an invoice which is item 63 was issued on 31 March 2009 and it was paid. Again, the respondents submit that the applicants are time-barred from seeking an assessment of this item.

Hamilton Road, Moorooka (DLA Phillips Fox reference: 0470677)
(items 64 to 68)

  1. The applicants retained the first respondent in respect of issues related to planning matters concerning a property located at Hamilton Road, Moorooka.  Those legal services were provided.  Between 26 May 2009 and 31 March 2010, the first respondent issued the tax invoices which are items 64 to 68. The invoices which are items 67 and 68 are outstanding.
  1. The final bill for the work performed pursuant to these instructions was delivered in 2010 and so the respondents submit that the applicants are time-barred from seeking an assessment of these invoices.
  1. The respondents acknowledge that the applicants are entitled to an order that the following bills be assessed.

GE Caveat Issues (DLA Phillips Fox reference:  0480204)

(items 69 to 75)

  1. On or about 2 September 2009 the first respondent was retained to act for the applicants in relation to caveats lodged on their properties by GE Finance. Tax invoices were issued between 25 September 2009 and 20 April 2011.

Tabtill appeal (DLA Phillips Fox reference:  0443287/003)

(items 77 to 94)

  1. In September 2010 the first respondent was retained to act for the applicants in respect of an appeal. The appeal and a cross-appeal were heard in March and April 2011. Between 30 September 2010 and 30 November 2011 the first respondent and the second respondent respectively issued the tax invoices which are listed as Items 77 to 94.

Costs arguments (DLA Phillips Fox reference:  0443287/004)

(items 95 to 104)

  1. On or about 14 September 2010 the first respondent was retained to act for the applicants in respect of costs arguments following from the judgment handed down on 13 September 2010 in Supreme Court proceeding 10963 of 2007. Between 30 September 2010 and 27 July 2011 it issued tax invoices which appear as Items 95 to 104. 

Real Estate – Creswick & Ors v Creswick, Brisbane Supreme Court – 10963 of 2007 (DLA Phillips Fox reference:  0443287/005)

(item 105)

  1. On or about 23 February 2011 the first respondent was retained to act for the applicants in respect of real estate issues relating to the proceedings and the implementation of a certain agreement. A tax invoice which appears as Item 105 was issued on 20 April 2011.

503 Logan Road (DLA Phillips Fox reference:  0443287/006)

(items 106 to 113)

  1. On or about 23 February 2011 the first respondent was retained to act for the applicants in respect of an application for the appointment of a statutory trustee for the sale of 503 Logan Road, Stones Corner, a property then held jointly by John Creswick, William Creswick and Felix Creswick.  The respondents issued the tax invoices which appear as Items 106 to 113.

Rates Proceeding (DLA Phillips Fox reference:  0443287/007)

(item 114)

  1. On or about 13 April 2011 the first respondent was retained to act for the applicants in respect of recovery of rates paid by them. The tax invoice which appears as Item 114 was issued.

Purchase of 503 Logan Road, Stones Corner (DLA Phillips Fox reference:  0443287/008)

(item 115)

  1. On or about 14 September 2011 the second respondent was retained to act for the applicants in respect of the prospective purchase of real property located at 503 Logan Road, Stones Corner.  The second respondent issued the tax invoice which appears as Item 115.

Application for special leave to appeal to the High Court

  1. On 23 December 2011 the Court of Appeal delivered its decision. The applicants engaged a different firm, Thomsons Lawyers, to act for them in respect of an application for special leave to appeal to the High Court. Mr Conaghan is one of the partners of that firm. The application was filed in or about February 2012 and the High Court refused the application on 9 March 2012.
  1. Before this, and on or about 16 February 2012, the second applicant, John Creswick, said to Mr Gill words to the following effect:

“We all know that I can’t pay your fees, I don’t have $4.2 million.  My only chance is if I can keep fighting and get back some of the properties which have gone to Felix.  If I lose the application for special leave to appeal to the High Court, that is the end of the road and I will have no choice but to go bankrupt.”

The absence of a prior complaint about the bills

  1. Despite some of the accounts being more than four years old and the vast majority being more than one year old, no request was made for an itemised bill until 28 February 2012, when the firm Lynch Morgan acting on behalf of the applicants wrote to the second respondent.  Mr Gill deposes that he is not aware of any request having been made by any of the applicants for additional details of any of the accounts prior to the request received from Mr Lynch.  Mr Gill is not aware of any complaint having been made by any of the applicants in relation to the respondents’ accounts prior to the recent correspondence from Lynch Morgan.

Recent procedural history

  1. The matter came before Mullins J on 19 March 2012, and was adjourned to 10 April 2012.  After the hearing on 19 March 2012, the respondents wrote to Lynch Morgan on 21 March 2012 and provided numerous documents including all documents which had been requested and itemised bills “in the format discussed with her Honour Justice Mullins on 19 March 2012”. 
  1. The letter dated 21 March 2012 requested that, if the applicants required further information in relation to any particular entry or entries contained in the itemised bills, the bill number and entry be identified along with the additional information needed. The applicants did not take up this request.
  1. On 21 March 2012, the respondents delivered to the applicants approximately 1,000 pages of updated invoices, being all of the invoices issued by the respondents to the applicants and with the following information for every item of professional work performed by either respondent: date; description of work performed; initials of person who performed the work; the amount of time spent on the task; the hourly rate charged by that person; and, the amount being charged for the item of work.
  1. On 23 March 2012, being only two days later, Lynch Morgan wrote and asserted that the updated invoices were not itemised bills. It stated that the applicants had reached this conclusion having regard to the content of each of the tax invoices.
  1. The applicants took no steps to rectify the errors in the application, or to correct the affidavit of Mr John Creswick who swore that invoices bearing the numbers, dates and amounts referred to in the application were issued by the first and second respondents, when this was not the case. The applicants did not amend their application to take into account the contents of the updated invoices.
  1. Despite the applicants not requesting any further information in relation to any particular entries, between 30 March 2012 and 4 April 2012 the second respondent undertook a review of the 40 invoices issued to the applicants within the previous 12 months, being from 2 March 2011 onwards. The second respondent undertook a review of all hard copy and electronic files maintained by the respondents in respect of those invoices in order to identify any entries on those invoices that might confuse the applicants and to provide further information in respect of those entries. This took about 70 hours to complete. Invoices issued to the applicants between 2 March 2011 and 2 March 2012 (the date of the applicants’ application) with the further information identified as a result of that process are exhibited to the affidavit of Mr Gill filed on 5 April 2012. 
  1. The task of preparing the affidavit of Mr Gill which was filed on 5 April 2012 was a substantial one. The affidavit corrected numerous errors contained in the applicants’ application. The completion of the affidavit was delayed by the completion of the task which I have described. I accept that the late service of that affidavit on Thursday, 5 April 2012 was not done with any intention of causing difficulties to the applicants in relation to the application. The applicants did not seek an adjournment of the application or ask for the matter to be stood down on 10 April 2012 in order to respond to that affidavit or a further affidavit which was sworn by Mr Gill on 9 April 2012 and which identified prejudice that would be suffered by the respondents.

Prejudice to the respondents

  1. The respondents depose that they will suffer significant prejudice if required to produce the level of detail requested by the applicants as the majority of the solicitors who had the primary carriage of the various retainers for the applicants are not employed by the second respondent. As a result, it is likely to prove very difficult, time consuming and perhaps impossible to obtain further information in respect of certain time entries which appear on the bills issued by the first and second respondents. The respondents also contend that such a task in relation to numerous retainers extending over a period of some years would also be extremely expensive and take a long period of time.
  1. Mr Gill’s affidavit filed by leave on 10 April 2012 sets out in considerable detail the names of the solicitors and partners who carried out the work for the applicants in relation to the various retainers. Most of the persons are not partners of or employed by the second respondent. However, some of those persons are employed by Thomsons Lawyers, which currently acts for the applicants in respect of at least the Tabtill appeal and the application for special leave to appeal to the High Court. Mr Conaghan is the partner at Thomsons Lawyers who is responsible for those matters, and was the partner responsible for all matters in which the applicants instructed the first and second respondents. Thomsons Lawyers also employ a number of the solicitors who carried out work in respect of the various matters in which the first and second respondents were retained.

Relevant statutory provisions

  1. The substantial issues of whether the applicants are entitled to an assessment of the whole or any part of the relevant legal costs, and whether they are entitled to itemised bills, require consideration of the relevant statutory provisions, and authorities which have considered those and similar provisions.
  1. Section 330 of the Act provides that a bill may be in the form of a lump sum bill or an itemised bill. Section 300 defines “itemised bill” to mean “a bill stating, in detail, how the legal costs are made up in a way that would allow the legal costs to be assessed under Division 7.” Section 332 provides the legal basis upon which certain persons may request a law practice to give the person an itemised bill. It provides:

“332Request for itemised bill

(1)If a bill is given by a law practice in the form of a lump sum bill, any person who is entitled to apply for an assessment of the legal costs to which the bill relates may request the law practice to give the person an itemised bill.

Note –

A bill in the form of a lump sum bill includes a bill other than an itemised bill.

(2)The law practice must comply with the request within 28 days after the date on which the request is made.

(3)If the person making the request is liable to pay only a part of the legal costs to which the bill relates, the request for an itemised bill may only be made in relation to those costs that the person is liable to pay.

(4)Subject to subsection (5), a law practice must not commence legal proceedings to recover legal costs from a person who has been given a lump sum bill until at least 30 days after the date on which the person is given the bill.

(5)If the person makes a request for an itemised bill within 30 days after receiving the lump sum bill, the law practice must not commence proceedings to recover the legal costs from the person until 30 days after complying with the request.

(6)A law practice is not entitled to charge a person for the preparation of an itemised bill requested under this section.

(7)Section 330(2) to (8) apply to the giving of an itemised bill under this section.”  (emphasis added)

  1. Section 333 of the Act provides:

333Interim bills

(1)A law practice may give a person an interim bill covering part only of the legal services the law practice was retained to provide.

(2)Legal costs that are the subject of an interim bill may be assessed under division 7, either at the time of the interim bill or at the time of the final bill, whether or not the interim bill has previously been assessed or paid.”

  1. Division 7 of Part 3.4 of the Act governs costs assessment. For the purpose of that division the term “client” means a person to whom or for whom legal services are or have been provided.[1]  Section 335 relevantly provides:

335Application by clients or third party payers for costs assessment

(1)A client may apply for an assessment of the whole or any part of legal costs.

(2)A third party payer may apply for an assessment of the whole or any part of legal costs payable by the third party payer.

(3)The costs application may be made even if the legal costs have been wholly or partly paid.

(4)If any legal costs have been paid without a bill, the client or third party payer may nevertheless make the costs application.

(5)A costs application by a client or a third party payer must be made within 12 months after –

(a)the bill was given, or the request for payment was made, to the client or third party payer;  or

(b)the costs were paid if neither a bill was given nor a request was made.

(6)However, a costs application made out of time, otherwise than by any of the following, may be dealt with by a costs assessor or a court if, under the Uniform Civil Procedure Rules, the assessor or the court decides to deal with it after considering the reasons for delay –

(a)a sophisticated client;

(b)a third party payer who would be a sophisticated client if the third party payer were a client of the law practice concerned.  ...”

  1. Section 341(1) of the Act provides that in conducting a costs assessment, the costs assessor must consider:

“(a)whether or not it was reasonable to carry out the work to which the legal costs relate;  and

(b)whether or not the work was carried out in a reasonable way;  and

(c)the fairness and reasonableness of the amount of legal costs in relation to the work, except to the extent that section 340 applies to any disputed costs.”

  1. Part 4 of Chapter 17 of the Uniform Civil Procedure Rules 1999 (“UCPR”) governs the assessment of costs under the Act.  Rule 743A(5) provides that the affidavit in support of an application for a costs assessment must, if the applicant disputes all or part of the costs, state the grounds on which the applicant disputes the amount of the costs or liability to pay them. 
  1. Rule 743C provides that if there is no itemised bill for all of the costs to be assessed under an application, the Court may give the directions it considers appropriate for an itemised bill to be prepared, filed and served.

Discussion

  1. If it be assumed for the purposes of argument that itemised bills have not been given to the applicants, then the entitlement under s 332(1) to request an itemised bill depends upon the existence of an entitlement “to apply for an assessment of the legal costs to which the bill relates”. That, in turn, directs attention to the entitlement to apply for an assessment under s 335, and the time limit contained in s 335(5). 
  1. Although the respondents made clear their opposition to an order for assessment in respect of a large number of the bills on the basis that the application was made outside of the time provided for in s 335(5), the applicants did not take the precaution of asking the Court to deal with the application in the event it found that the application was made out of time in respect of certain invoices. Rather than invite the Court to deal with the application pursuant to s 335(6) in the event that it found that the application was made out of time in respect of certain of the costs, which would have required the Court to consider the reasons (if any) for delay, the applicants contend that the application was made within time.
  1. As noted, the respondents concede that a number of the invoices referred to in Mr Gill’s third affidavit should be the subject of an order that the costs in respect of them be assessed.  However, the respondents submit that the application should be dismissed in relation to the invoices that are numbered 1 to 29, 32, 37 and 53 to 68 because the applicants are time-barred from seeking an assessment in respect of these items. 
  1. The resolution of the first substantial issue turns on when final bills were given. The applicants contend that there was one ongoing retainer. The respondents submit that the application of the relevant provisions involves the identification of the relevant legal services, and that the authorities support the proposition that if the legal services that the solicitor is retained to provide have been performed, and a bill is sent at that point, it is a final bill, and it does not become an interim bill simply because at some later stage further instructions are given for additional legal services to be provided to which the earlier costs agreement also applies. The respondents particularly rely upon the decision of McGill DCJ in Turner v Mitchells Solicitors[2] in that regard.  That decision and other authorities are said to recognise that in a case such as this, in which a solicitor is retained to conduct litigation that may extend over a considerable period of time, and in which breaks may occur of such a kind as to be equivalent to the conclusion of a definite and distinct part of the proceedings, the solicitor may deliver to the client a bill of costs for business done up to the occurrence of such breaks and demand payment.
  1. The respondents submit that s 333 should be applied according to its terms, and not by reference to extraneous considerations, such as whether the legal work is undertaken under a single costs agreement. Section 333 operates by reference to “the legal services the law practice was retained to provide”. If those services have been provided then an opportunity to deliver a final bill will arise.
  1. Applying these principles, the respondents submit that a natural break in the litigation occurred at the conclusion of the trial. At that point, the respondents had carried out the legal services which they had been retained to perform for the applicants. They submit that a final bill for the work that was performed up until this “natural break” was delivered in 2010 and the applicants are, accordingly, time-barred from seeking an assessment of the invoices which are listed as Items 1 to 25, 29, 32 and 37.  They make similar submissions in relation to Items 26 to 28 which are said to have been for separate and distinct legal services performed pursuant to instructions received after the trial.  Similar submissions are made in relation to the separate and distinct services that are reflected in Items 53 to 62, 63 and 64 to 68. 
  1. On this basis the respondents submit that the application should be dismissed in relation to the invoices which are listed as Items 1 to 29, 32, 37 and 53 to 68.
  1. As to the balance of the invoices that are listed in the tables prepared by Mr Gill, the respondents do not oppose an order that the bills be assessed. However, they oppose the direction sought by the applicants in the applicants’ draft order being to the effect that they be ordered to deliver itemised bills pursuant to UCPR r 743C. The principal grounds for this opposition are that:

(a)the application is an ill-disguised attempt to delay payment of outstanding fees;  and

(b)the applicants have been given sufficient information.

The legal services the respondents were retained to provide from time to time

  1. The first issue in dispute relates to whether there was more than one “final bill” for the purpose of the Act, and when each “final bill” was given. The applicants’ submissions focus on the client agreement dated 28 February 2008 and the instructions described in it. They contend that the retainer of the respondents was contained in that document and that it remained in force until the making of final orders by Daubney J in the trial proceedings on 13 May 2011. They accordingly submit that tax invoices numbered 1 to 25, 29, 32 and 37 constitute “interim bills” for the purposes of the Act because they charge for a part only of what the respondents were required to undertake in the Supreme Court proceedings. They further submit that, contrary to Mr Gill’s evidence, the work undertaken in relation to post-trial instructions (invoices 26 to 28), post-judgment instructions (invoices 30 to 31, 33 to 36 and 38 to 52) and the costs argument invoices (invoices 95 to 104) did not constitute “separate and distinct” work that was carried out after the trial concluded.
  1. It is appropriate at this point to address the evidence concerning the legal services the respondents were retained to provide from time to time, and the applicants’ objection to the admissibility of a particular part of Mr Gill’s affidavit filed 5 April 2012. 
  1. As previously noted, the first respondent was retained on an urgent basis on or about 20 December 2007 to act in respect of a Supreme Court proceeding that had been commenced in 2007, and was specifically retained to take all steps necessary to prepare for and represent the applicants at the trial to determine the applicants’ claim. After 12 February 2008 the first respondent was specifically retained to take all steps necessary to prepare for and represent the applicants at the trial to determine the counterclaim that had been commenced against them by Felix Creswick.
  1. The client agreement dated 28 February 2008 (which was signed by all parties on or about 1 March 2008) referred to the instructions that I have earlier quoted. In addition to providing legal services in relation to the 2007 proceedings and earlier proceedings that had been commenced in 2005 the instructions extended to providing legal services in “associated disputes between the parties”.
  1. Paragraph 11 and following of Mr Gill’s affidavit filed 5 April 2012 describe the “individual matters for which DLA Phillips Fox and DLA Piper Australia were retained to act for the applicants, or some of them, and the terms of each retainer.” I have summarised these above, along with Mr Gill’s evidence that a different file was opened and maintained if different sets of instructions were received from clients. This practice was undertaken in relation to the work performed for the applicants. The first such matter is a matter of Creswick & Ors v Creswick in relation to the Supreme Court proceeding 10963 of 2007.  In respect of that matter, Mr Gill deposes to the terms of the specific retainers that were given on 20 December 2007 and 12 February 2008.  They relate to the trial of the proceedings and the counterclaim respectively.  After referring to the fact that the trial of the matter concluded on 9 November 2009, Mr Gill deposes in paragraph 16 that thereafter:

“(a)the work specified in paragraph 13 above (being the work that the first respondent was initially retained on 20 December 2007 to undertake in relation to the trial and the subsequent specific retainer in relation to the counterclaim) was completed by DLA Phillips Fox;

(b)all issued tax invoices were settled in full but for the tax invoices which appear at Items 18, 20, 21 and 24;  and

(c)DLA Phillips Fox’s retainer, as specified above, ended.”

The respondents object to the assertion in subparagraph 16(c) on the basis that it swears to a legal conclusion that the retainer ended at that point, but does not depose to any facts that might support such a conclusion.  The respondents reply that the basis for subparagraph 16(c) appears in paragraph 13 of Mr Gill’s affidavit and I accept that submission.

  1. The task, however, remains to consider the whole of the evidence, and to reach a conclusion in relation to the retainer or retainers that the first respondent received in late 2007 and early 2008 to provide legal services in connection with the proceedings.
  1. I accept the applicants’ submission that paragraphs 7 and 13 of Mr Gill’s affidavit depose to a different and more limited retainer from the applicants than is contained in the client agreement. The client agreement was entered into on 28 February 2008 and should be taken to have superseded any earlier oral retainer, at least to the extent of any inconsistency between them.
  1. There is no evidence that the general instructions recorded in the client agreement were terminated. There certainly is no suggestion that the client agreement was brought to an end in accordance with the terms set out in the standard conditions. For example, Mr John Creswick gives evidence that no suggestion was ever made to him by the respondents that their retainer to act on behalf of the applicants in the Supreme Court proceedings terminated on the completion of the evidence and submissions made to Daubney J, and the applicants did not receive any notification advising them that their retainer was terminated on 9 November 2009. No new client agreement was entered into with the respondents for the work undertaken by them after 9 November 2009.
  1. I accept the applicants’ submissions that the client agreement dated 28 February 2008 remained in force after 9 November 2009.  However, this fact does not necessarily lead to the conclusion that the tax invoices issued in respect of matter 0443287 (Items 1 to 25, 29, 32 and 37) constitute “interim bills” for the purposes of the Act.  Attention is required to the evidence concerning the legal services that the respondents were retained to provide from time to time.
  1. The client agreement and the instructions recorded in it may govern the legal services that are to be provided, and constitute what might loosely be described as a general retainer to undertake the legal work that might be required from time to time in respect of a general matter, such as a nominated proceeding or a dispute. In addition to that agreement, which may govern the costs that will be billed, there may be specific retainers that are the subject of specific instructions.
  1. In this matter the uncontradicted evidence is that specific instructions were given on or about 20 December 2007 and after 12 February 2008 to prepare for and represent the applicants at the trial of their claim and the trial of Felix Creswick’s counterclaim. Those instructions were not altered by the client agreement. They were effectively confirmed by it. The instructions to prepare for and represent the applicants at the trial were reflected in the manner in which legal services were provided, particularly by the assignment of a matter number in relation to those instructions. The broader instructions recorded in the agreement dated 28 February 2008 did not supplant the earlier specific instructions.  They indicated that the first respondent was retained to act not only in relation to the proceedings but in associated disputes between the parties.  The broader instructions were not limited to providing legal services up to and including the trial of the proceedings.  They contemplated the provision of legal services in relation to the proceedings.  The general instructions to the respondents to act in relation to the proceedings were apt to cover the provision of legal services which were the subject of existing specific retainers in relation to preparation for the trial and representation at it, and also matters which might be the subject of further instructions and specific retainers in the event that the proceedings went to trial, such as submissions on costs and forms of order once judgment was given.
  1. Subparagraph 16(c) of Mr Gill’s affidavit should not be understood as asserting that once the trial before Daubney J concluded the first respondent’s retainer to provide legal services in relation to the dispute, including acting in relation to the nominated proceedings, ended. Such a contention could not be reconciled with the terms of the client agreement. Mr Gill was making a different point, not in relation to any general retainer to act in relation to the proceedings, but in relation to the specific retainer to prepare for and represent the applicants at the trial. His evidence in this regard lays the factual foundation for the respondents’ submissions in relation to the operation of the Act. In that regard, even if the relevant retainer is identified as a retainer to act for the applicants in the proceedings, the respondents contend that once the trial concluded and there had been no further instructions, then the legal services the first respondent was retained to provide had been performed. The respondents contend a bill sent at that point was a final bill, and did not become an interim bill simply because at some later stage further instructions were likely to be given for additional legal services to be provided at about the time judgment was to be delivered.
  1. The applicants do not assert that further legal services remained to be performed once the trial concluded. The parties must have contemplated that once judgment was due to be delivered, and once judgment was given, further work would need to be performed and further instructions would be required. However, on 9 November 2009 when judgment was reserved the parties and their legal representatives must have anticipated that the decision would be reserved for a lengthy period.  At that time, nothing needed to be done to perform the first respondent’s retainer.  To adopt the language of the authorities to which I now turn, a distinctly identifiable part of any general retainer had come to an end, and that part constituted a separate retainer for the purposes of billing.  The break that occurred once the trial concluded was equivalent to the conclusion of a definite and distinct part of the proceedings, and the first respondent was entitled to deliver a bill for business done up to the occurrence of that break in the litigation.

Relevant authorities

  1. Both parties cited the decision of McGill DCJ in Turner v Mitchells Solicitors.[3]  As in this matter, the Court was concerned with an application for assessment of legal costs under s 335 of the Act in relation to numerous tax invoices that were issued over a period of years.  McGill DCJ considered an issue of interpretation arising in connection with ss 333 and 335.  As to s 333(2), his Honour concluded that if there is an interim bill, then the legal costs which it covers may be assessed at the time of the interim bill or at the time of the final bill.  Accordingly, the client may apply under s 335 for an assessment at either time, and will be subject to the applicable limitation at either time.  If an application is made within 12 months of the final bill, the legal costs which may be assessed under s 335(1) include (or at least may include) all of the legal costs subject to any interim bill which was part only of the legal services the legal practice was retained to provide, even though those costs are not included in the “final bill”. 
  1. His Honour considered issues as to whether there was a break in the retainer of the respondent in that case, and observed that if there is a retainer to do further work, the issue may be whether it was terminated or broken. If the work the solicitors have been retained to perform has been completed, the issue is whether there is a retainer to do further work. His Honour distinguished between the use of the term “retainer” in the broader sense of the relationship between the client and the solicitor, and what matters for the purposes of the Act, particularly s 333, which is a retainer to provide legal services. In that case there were significant periods when there were no legal services that the respondent was retained to provide. His Honour stated:

“There can be a situation where a costs agreement can be entered into to cover particular legal work, and any other legal work which the solicitor is instructed to carry out.[4]  If the particular legal work is then completed, and there have been no further instructions, then the legal services the solicitor is retained to provide have been performed. If a bill is sent at that point it is a final bill, and it does not become an interim bill simply because at some later stage further instructions are given for additional legal services to be provided to which the earlier costs agreement also applies.[5] In my opinion it is important to apply s 333 according to its terms, and not by reference to extraneous considerations, such as whether the legal work is undertaken under a single costs agreement or multiple costs agreements. In any case, it may be a nice point whether in the circumstances I have outlined the later instructions to perform additional legal services amount to a variation of the earlier costs agreement, or a new agreement which incorporates the terms of the earlier costs agreement. Section 333 operates by reference to the legal services the law practice is retained to provide. It is possible for the scope of those services to be expanded before the services previously sought have been all provided, in which case the opportunity to deliver a final bill will have been postponed; but if the legal services sought have been provided, the fact that later additional legal services are sought does not in my opinion produce the same result.”[6]

  1. The authority of Re Romer & Haslam[7] that was cited by McGill DCJ in this passage was also cited with approval by Chesterman J (as his Honour then was) in Re Lynch and Co Bill of Costs.[8]  The point arose in a different statutory context and concerned the application of s 9 of the Legal Practitioners Act 1995 (Qld).  His Honour was concerned with the question of whether, as a matter of law, certain bills were several, separate bills or were part of the one bill.  His Honour stated:

[10] The principle is explained by Halsbury's Laws of England, 4th edition, volume 44, par 97:

‘The general rule is that when retained by a client a solicitor undertakes to finish the business for which he is retained. Thus, a retainer is, speaking generally, an entire contract ... to do certain business, to finish that business, and to be remunerated at the completion of the business ... This general rule applies to retainers to conduct or defend ordinary actions .. but it is not an absolute one and yields to special circumstances’.

It is said in par 170:

‘The whole bill of costs need not be delivered at once; there is no objection to a delivery in parts ... if there is an entire contract, successive bills which are intended to be separately enforceable may not be delivered unless the client consents, or the matter is completed, or a natural break has occurred ...’.

Speaking of the principle Jessel MR said, in Re Hall and Barker [1878] 9 Ch D 538 at 543:

‘It has undoubtedly been decided that the retainer of a solicitor at common law to bring an action is a retainer to do one single thing, to bring the action to an end. Actions at common law did not, in former days, occupy a very long time, and were comparatively simple matters.’

[11] Equity maintained its superiority over the common law by the assertion of the Chancery judges that their jurisdiction was complicated, diverse and tended to protraction, thus making it unreasonable to expect a solicitor to bring litigation to a complete finality before an entitlement to deliver a bill arose.  Equity therefore developed the principle that distinctly identifiable parts of the retainer would constitute a separate retainer for the purposes of billing and if a ‘natural break’ occurred in the conduct of the litigation a bill could be delivered up to the time of the break. In Hall and Barker the solicitor had been retained to obtain the winding up of an insolvent debtor and then to act for the creditor in the winding up. Obtaining the appointment of the trustee in bankruptcy was held to be a ‘break’ for the purposes of allowing a bill to be delivered.  The Master of the Rolls spoke of the performance of a ‘series of services’ each one of which easily identifiable, would justify the delivery of a bill.

[12] The principle was extended by In Re Nelson, Son & Hastings [1885] 30 Ch D 1 which held that the delivery of bills annually in respect of various services provided was not part of a continuous retainer but constituted separate bills which could not be reopened after the expiration of 12 months. The last word on the subject appears to have been expressed in Re Romer & Haslem [1893] 2 QB 286. According to the headnote:

‘While a solicitor is retained to conduct litigation, other than an ordinary action at common law, which may extend over a considerable period of time, and in which breaks may occur of such a kind as to be equivalent to the conclusion of a definite and distinct part of the proceedings, he may deliver to his client a bill of costs for business done up to the occurrence of any such breaks in the litigation, and demand payment. Where, however, in the course of the proceedings several bills of costs have been sent in at different times by the solicitor, it is always a question of fact whether they were sent in as final bills for work done up to the occurrence of any such break in the litigation, so as to be separate bills ... or whether they were merely statements of accounts or portions of one entire bill, so as to make the whole liable to taxation ...’.[9]

  1. I respectfully follow the decision of McGill DCJ in Turner v Mitchells Solicitors and apply the principles discussed by Chesterman J in Re Lynch & Co Bill of CostsMr Lynch, who appeared for the applicants in this matter, did not submit that these authorities should not be followed. 

Application of these principles

  1. This is a situation in which the costs agreement covered certain legal work, namely the work that had been the subject of specific instructions in relation to preparation for trial and representation at trial, and also governed other legal work which the first respondent might be instructed to carry out in relation to the conduct of the nominated proceedings. The particular legal work involving preparation for the trial and appearance at the trial was completed on 9 November 2009. Nothing more was to be performed at that point. There is no suggestion that once the trial concluded existing instructions required further work to be carried out at that stage. Further disputes might have been in contemplation once judgment was delivered. There was at least a break in hostilities, even if no-one expected an outbreak of peace.
  1. To adopt the expression used by Chesterman J, there was a “natural break” in the litigation at the conclusion of the trial. The first respondent had performed the work it was retained to perform in connection with the proceedings. No further instructions were given at that stage in connection with the proceedings. A bill sent at that point in relation to the conduct of the trial was a final bill for the purposes of s 333. The fact that the costs agreement continued to apply does not alter this conclusion and the bill that the first respondent was entitled to deliver upon the conclusion of the trial did not become an interim bill because the costs agreement contemplated that further legal work might be required at some later stage after the break in the proceedings.
  1. I accept the respondents’ submission that as the final bill in respect of the legal services that the first respondent was retained to provide in relation to preparation for and representation at the trial was delivered in 2010, the applicants are time-barred from seeking an assessment of the invoices that are identified as Items 1 to 25, 29, 32 and 37.
  1. The evidence of Mr Gill, which I accept, is that items 26 to 28 were for separate and distinct legal services performed pursuant to instructions that were received after the trial. The final bill for the work performed pursuant to these instructions was delivered in 2010 and the applicants are time-barred from seeking an assessment of these invoices.
  1. The legal services in relation to the Bunker Road development (items 53 to 62) concern a separate matter about the development of a property.  The final bill for the work performed pursuant to these instructions was delivered in 2009 and the applicants are time-barred from seeking an assessment of those items.  The same conclusion applies to Item 63 relating to the Creswick Group restructure.  Items 64 to 68 relate to legal services provided in relation to planning matters.  The final bill for the work performed in relation to these matters was delivered in 2010 and the applicants are time-barred from seeking an assessment of those invoices. 

Conclusion – application for assessment

  1. I conclude that the application should be dismissed in relation to the invoices that are listed as Items 1 to 29, 32, 37 and 53 to 68. It follows that no directions should be made for the delivery of itemised bills in relation to these invoices because the applicants had no entitlement to request an itemised bill pursuant to s 332.
  1. As to the balance of the invoices referred to in Mr Gill’s third affidavit, the respondents do not oppose an order that those bills be assessed.
  1. My conclusion that the application should be dismissed in relation to the invoices that I have identified because the application is time-barred in respect of those invoices makes it unnecessary to decide whether it would have been appropriate to order an assessment in respect of those invoices had I reached a different conclusion in relation to the application of s 335(5). I should add, however, that the absence of any explanation for not bringing the application prior to March 2012 and the prejudice to the respondents occasioned by having to submit to an assessment of invoices, including many invoices that were paid years ago, would have been powerful factors favouring a refusal of the application on discretionary grounds. The absence of any complaint in relation to the respondents’ accounts prior to the recent correspondence and the filing of this application suggests that the application is intended by the applicants to delay payment of outstanding fees, including fees which they acknowledged were outstanding when the second, third, fourth and fifth applicants executed a deed of guarantee and indemnity on or about 9 July 2010.

The itemisation issue

  1. The applicants seek orders pursuant to UCPR r 743C that the respondents file and serve within 60 days itemised bills of costs for the legal costs claimed in the tax invoices numbered 1 to 41, 69 to 75, 77 to 84, 95 to 102, 105 to 107 in the case of the first respondent and those numbered 42 to 52, 85 to 94, 103 to 104 and 108 to 115 in respect of the second respondent. The form of orders sought by the applicants requires the itemised bills of costs to state:

(a)full details of each item of work done;

(b)the date each item of work was done;

(c)the basis of the charge for the work;

(d)the amount charged for carrying out each item of work;  and

(e)the details of the person who carried out the work.

  1. Rule 743C is premised on there being no itemised bill for “all of the costs to be assessed under an application”. In circumstances in which I have found that there should not be an assessment of costs ordered in respect of certain items, there should not be a direction for the delivery of an itemised bill in respect of those items. The issue then arises whether a direction should be made pursuant to r 743C for itemised bills to be prepared, filed and served in respect of the balance of the invoices in relation to which the respondents concede to an order that the bills be assessed.
  1. The provisions and principles that govern whether a bill is an itemised bill have been recently and helpfully addressed by Reid DCJ in Clayton Utz Lawyers v P & W Enterprises Pty Ltd.[10]  The starting point is the statutory provisions that I have earlier quoted, particularly the definition of an itemised bill in s 300 of the Act.  The statutory context includes the criteria for assessment contained in s 341 of the Act.
  1. Reid DCJ considered authorities in respect of comparable legislation, including the decision of Dowsett J in Re Walsh Halligan Douglas’ Bill of Costs[11] which cited with approval the following observations of Mann J in Malleson, Stewart, Stawell and Nankivell v Williams:[12]

“... the Courts have repeatedly held that a bill of costs must contain such details as will enable the client to make up his mind on the subject of taxation, and will enable those advising him to advise him effectively as to whether taxation is desirable or not.”

After citing this passage and other authorities Dowsett J concluded in the context of s 22 of the Costs Act 1867 (Qld) that:

“The bill must sufficiently particularise the charge to enable the client to take informed advice as to whether he should demand taxation.”[13]

After referring to various considerations, his Honour continued:

“I consider that the adequacy of the bills must really be considered in the light of all of these factors.  If the test be what is adequate in order to enable the client to determine on advice whether to seek taxation, it is reasonable to take into account the degree of business and legal sophistication of the client, whether the client has in-house legal advice, whether another firm of solicitors is also advising, and any agreement reached between the parties as to the basis for charging.”[14]

Dowsett J concluded that the bills in that case were sufficient.  Amongst other things, they described the ways in which the hours were being spent and “anybody with reasonable experience in the field of litigation would be able to judge the reasonableness or otherwise of those hours”.[15]  His Honour observed:

“Of course, even an experienced client may not be able to do that, but the test for the purpose of s 22 contemplates the taking of appropriate advice.”[16]

  1. In Clayton Utz Lawyers v P & W Enterprises Pty Ltd,[17] Reid DCJ also cited the decision of the English Court of Appeal in Ralph Hume Garry v Gwillim (CA).[18]  In that decision, Ward LJ, with whom Mance LJ and Sir Martin Norse agreed, stated:

“Against that background the principles to be deduced from these cases appear to me to be these.

(i)The legislative intention was that the client should have sufficient material on the face of the bill as to the nature of the charges to enable him to obtain advice as to taxation.  The need for advice was to be able to judge the reasonableness of the charges and the risks of having to pay the costs of taxation if less than one-sixth of the amount was taxed off.

(ii)That rule was, however, subject to these caveats:

(a)precise exactness of form was not required and the rule was not that another solicitor should be able on looking at the bill, and without any further explanation from the client, see on the face of the bill all information requisite to enable him to say if the charges were reasonable;

(b)thus the client must show that further information which he really and practically wanted in order to decide whether to insist on taxation has been withheld and that he is not already in possession of all the information that he could reasonably want for consulting on taxation.

(iii)The test, it seems to me, is thus, not whether the bill on its face is objectively sufficient, but whether the information in the bill supplemented by what is subjectively known to the client enables the client with advice to take an informed decision whether or not to exercise the only right then open to him, viz, to seek taxation reasonably free form the risk of having to pay the costs of that taxation.

(iv)A balance has to be struck between the need, on the one hand, to protect the client and for the bill, together with what he knows, to give him sufficient information to judge whether he has been overcharged and, on the other hand, to protect the solicitor against late ambush being laid on a technical point by a client who seeks only to evade paying his debt.”[19]  (original emphasis)

  1. In applying the provisions of the Act, regard must be had to the purpose of consumer protection and the importance of enabling a client to make an informed decision about whether to exercise his or her entitlement to have the costs assessed. However, the Act does not pursue the objective of consumer protection at all costs, and the observations that I have quoted in subparagraph (iv) of the judgment of Ward LJ about the balance that needs to be struck are apposite. Ward LJ also stated in respect of the relevant English provisions that:

“The purpose of the legislation is to protect the innocent or ignorant client, not to give the unscrupulous a wholly unmeritorious advantage over his solicitor.”[20]

  1. The applicants in their submission cited examples given in recent cases of the contents of tax invoices that do not constitute itemised bills for the purposes of the Act. These include:

(a) claims for unexplained meetings in the solicitor’s office involving personnel within the firm;

(b) costs claimed for “file management”;

(c) legal research;

(d) company searches where there is no information as to what companies are being investigated;

(e) claims for perusing pleadings when it is not clear from the entry in the bill just what is the particular document being perused;

(f) claims for costs in bills that consist of generalized descriptions of work undertaken;  and

(g) rolled up claims for the undertaking of a number of activities during a period of time but which do not include any details of the size of the letter or e-mail drafted or perused.

These examples are drawn from the authorities of Vitobello and Hayter v Russell & Co Solicitors,[21]Golder Associates Pty Ltd v Challen[22] and Clayton Utz Lawyers v P & W Enterprises Pty Ltd.[23]  However, they are simply illustrative of the general principles that I have discussed, and the sufficiency of the information contained in the tax invoices in this case must be assessed in the circumstances of this case.

  1. The applicants, in seeking to establish an entitlement to an itemised bill pursuant to s 332, and the making of directions pursuant to r 743C carry an onus to demonstrate that they have not been provided with an itemised bill in accordance with their statutory entitlement. Once they have done this a practical burden may fall upon the respondents to advance reasons as to why the Court should not exercise its discretion to direct delivery of itemised bills and to thereby advance the purpose of the Act. In this regard, it is not sufficient for a respondent to such an application to respond, in effect, “let me know which of the items you don’t understand or need more information about, and I will provide it.” However, the preparedness of a respondent to such an application to provide such additional information, upon request, is relevant to the discretion to make a direction under r 743C. For example, if a final bill consisted of 100 pages and only a few items on one page were deficient thereby rendering the bill to be something other than an itemised bill for the purpose of the Act, then it may be an appropriate course simply to order the respondent to provide certain further information and to cure the identified deficiency, rather than produce another 100 page document.
  1. I have earlier addressed the procedural history of this application and the notable feature that the applicants’ current legal advisers include the partner who had the conduct of matters on behalf of the applicants when he was a member of the respondent firms, and solicitors who undertook work on the relevant files. In addition, Mr Gill gave evidence that during the period that he has had the conduct of this matter, he has been in regular communication with and has had numerous telephone discussions and meetings with John Francis Creswick and William Gerrard Creswick. He formed the view that both of them have “an extremely detailed knowledge of all matters undertaken, and the subject of this firm’s accounts, during the period that I have had conduct of the matter.” There is no evidence that the applicants lacked commercial sophistication or that they did not closely follow the course of the proceedings.
  1. When the matter came before Mullins J on 19 March 2012 there was some discussion about what should be done before the matter resumed on 10 April 2012. Under cover of a letter dated 21 March 2012 the second respondent hand-delivered a number of documents including what were said to be itemised bills in the format discussed before Mullins J on 19 March 2012. It was anticipated that the applicants would review those bills with the advantage of their knowledge of the matter and seek further advice in relation to the matter. The respondents stated in their letter dated 21 March 2012 that if the applicants required further information in relation to any particular entry or entries contained in the itemised bill in order to obtain advice as to whether it should form part of their application then Lynch Morgan was requested to:

(a)identify the bill number;

(b)identify the time entry;  and

(c)identify the additional information the applicants required in order to obtain the necessary advice.

  1. The respondents delivered a large volume of invoices on 21 March 2012. It was only two days later that Lynch Morgan wrote to them and contended that the invoices were not itemised bills. This view was formed after “scanning” the documents that had been delivered. Lynch Morgan in their letter dated 23 March 2012 outlined in broad terms that the tax invoices did not provide an adequate description of the work undertaken for which a charge was claimed and for that reason did not constitute itemised bills for the purpose of the Act.  Some examples were given.  After further correspondence from Lynch Morgan which sought to ascertain the respondents’ position in relation to the conduct of the adjourned hearing, the second respondent wrote on 4 April 2012 contesting certain assertions made in Lynch Morgan’s letter of 23 March 2012, and expressing disappointment that Lynch Morgan had not taken up the opportunity to identify particular matters in respect of which their clients required additional information.  The letter went on to advise that notwithstanding this the respondents had undertaken a further review of bills that had been issued in the last 12 months and were preparing to serve further material which would include additional information that was identified as a result of that review.  Lynch Morgan maintained its position, and rejected any notion that the applicants were obliged to expend considerable legal fees, time and effort in going through every item of each of the tax invoices that had been delivered. Those invoices were Exhibit MDG7 to Mr Gill’s affidavit filed on 5 April 2012.
  1. At the hearing on 10 April 2012 the applicants did not seek an adjournment to consider the updated invoices, or even ask for the matter to be stood down until later in the day to permit a further review to be undertaken of these documents and to supplement their evidence. Instead, when the matter resumed after the luncheon adjournment Mr Lynch gave a few examples of entries which were said to consist of rolled up items or to be otherwise inadequate in terms of information. He fairly acknowledged that the invoices were now “a lot better”, but submitted that they were still inadequate in relation to the description of the work that had been undertaken.
  1. I do not regard the few examples given by Mr Lynch as providing a sufficient basis to conclude that itemised bills have not been given or to exercise my discretion in favour of the applicants by making the orders sought by him. To be persuaded of either of these things I would have required something more, including evidence to justify orders in the terms sought. Significantly, Mr Creswick who swore an affidavit filed on 2 March 2012 and another affidavit filed on 19 March 2012 did not give any evidence (and Mr Lynch did not swear an affidavit on information and belief) in relation to the contents of the updated invoices. Importantly, he does not swear that the updated invoices are insufficient for him to make an informed decision whether or not to exercise the right to seek an assessment, particularly in circumstances in which he has access to advice from the members and employees of Thomsons Lawyers and also the capable advice of Mr Lynch who has a special expertise in relation to the assessment of costs.
  1. I take account of the fact that the applicants are not obliged to go through each of the invoices and find deficiencies in them. However, to attract the favourable exercise of the discretion under r 743C the applicants should have done more than identify a few alleged deficiencies in the course of oral argument.
  1. As to those alleged deficiencies, and more generally, the test is not whether the bill on its face is objectively sufficient. That point was made in the passages that I have earlier quoted from the judgment in Ralph Hume Garry v Gwillim (CA).[24]  The test is whether “the information in the bill supplemented by what is subjectively known to the client enables the client with advice to take an informed decision whether or not to exercise the only right then open to him, viz, to seek taxation reasonably free from the risk of having to pay the costs of that taxation”.[25] 
  1. The applicants have not demonstrated on the basis of evidence that the information that they have received from the respondents, including the updated invoices, is inadequate to make an informed decision whether or not to exercise the right to seek assessment after taking advice on the subject.
  1. If I had been satisfied that certain bills did not constitute itemised bills because of the alleged deficiencies that are said to remain in the updated invoices then I would not have exercised the discretion under s 743C to order itemised bills of costs. An appropriate course would have been to make directions requiring the respondents to provide certain additional information. The applicants did not seek such an alternative order even in respect of the few examples that were raised by way of complaint in oral argument on 10 April 2012. I am not persuaded that any such additional information is required in the circumstances to enable the applicants to make an informed decision whether to seek assessment.
  1. I should add, in case there is any misunderstanding, that my decision to not exercise my discretion to make directions under r 743C in respect of matters about which the applicants have an entitlement to an assessment of costs is not based upon the practical difficulties that may be encountered by the respondents in obtaining additional information. If a bill is not itemised because of an inadequate description of the work that has been done then it is not a sufficient response for the solicitor to say that the reason for the inadequate description is that people who worked on the file have moved on to other employment. The entitlement to an itemised bill is an important statutory right, and that entitlement is not qualified because of practical difficulties that solicitors may encounter due to inadequate records or the fact that persons with certain knowledge are no longer in the solicitors’ employment. However, in this case a relevant consideration is the fact that some of the lawyers who undertook the work that is in contention moved to a firm that the applicants have recently engaged in relation to the subject litigation. The applicants did not adequately address in evidence the information that is subjectively known to them by virtue of their personal knowledge of the litigation and the knowledge of solicitors from Thomsons Lawyers who have been engaged by them in recent times.
  1. Had I been persuaded that the information provided to the applicants, including the information contained in the updated invoices, was inadequate in certain respects to constitute itemised bills then I would have declined to exercise my discretion to order itemised bills in the terms sought by the applicants. I take full account of the statutory entitlement to itemised bills and the principles that I have earlier discussed, including the principle that it is not for a client to incur great expense in listing deficiencies in a bill that clearly does not constitute an itemised bill. However, these important principles need to be balanced against the need to protect practitioners against “late ambush being laid on a technical point by a client who seeks only to evade paying his debt.”[26]  The discretion to make directions under r 743C also needs to be exercised in the context of the philosophy of the UCPR, namely to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense.[27]  In that context, it is not unreasonable to expect an applicant for an order under r 743C to show that further information is required to decide whether or not to pursue an assessment and that such information is not currently in it or its adviser’s possession.
  1. In recent times the respondents have adopted a practical approach to resolve any legitimate deficiency in information in the bills that have been delivered by them. The invitation contained in the second respondent’s letter of 21 March 2012 was a reasonable one. That said, it was reasonable of the applicants to contend that they were not required to go in detail through each page of the bills that had been provided and to identify deficiencies. The provision of additional information in the updated invoices was a reasonable approach to resolving the matter. The few matters raised in oral argument by the applicants in relation to the updated invoices do not suggest that the bills have insufficient information to enable the applicants to make an informed decision about whether or not to exercise their rights to an assessment, or that the information is so insufficient that the appropriate course is to make an order under r 743C.
  1. Finally, the recent course of events, including the statement made by Mr John Creswick to Mr Gill on 16 February 2012, give rise to a reasonable suspicion that the request for itemised bills and the persistence in seeking the forms of orders sought on 10 April 2012 are an attempt to delay payment of outstanding fees.  The absence of prior complaint is relevant and unexplained.  I conclude that the applicants in insisting upon itemised bills, notwithstanding the delivery of the updated invoices, are seeking to obtain an unmeritorious advantage over the respondents and to delay the payment of their debts.

Orders

  1. I will make an order based on the terms of the draft order submitted on behalf of the respondents:
  1. The application be dismissed in relation to the invoices which are listed as items 1 to 29, 32, 37 and 53 to 68 of MDG-6 of the affidavit of Mr Gill filed
    5 April 2012;
  1. By 11 May 2012, the applicants file and serve an affidavit or affidavits which:

(a)states which of the costs referred to in the invoices (including those delivered by the respondents on 21 March 2012 and 5 April 2012) are required to be assessed, excluding those invoices referred to in paragraph 1;

(b)if the applicants wish to dispute any of the costs in 2(a), the grounds on which the applicants rely to dispute the amount of the costs or liability to pay them.

  1. Should the parties fail to agree by 25 May 2012 as to the amount payable in respect of the legal costs charged in the invoices referred to in paragraph 2(a) above, then those legal costs be assessed pursuant to Part 3.4 Division 7 of the Legal Profession Act 2007 and Michael Graham be appointed as costs assessor to undertake the assessment of the invoices referred to in paragraph 2(a) above;
  1. Costs of and incidental to the application and the carrying out of these orders be reserved.

Footnotes

[1] Legal Profession Act 2007 (Qld), s 334.

[2] [2011] QDC 61 at [29].

[3] Supra.

[4] See JH Milner & Son v Percy Bilson Ltd [1966] 1 WLR 1582.

[5] Re Romer & Haslam [1893] 2 QB 286.

[6] At [29] (emphasis added).

[7] Supra.

[8] [2000] QSC 3 at [12].

[9] At [10] to [12] (emphasis added).

[10] [2011] QDC 5 at [21] to [30].

[11] [1990] 1 Qd R 288.

[12] [1930] VLR 410 at 411.

[13] Re Walsh Halligan Douglas’ Bill of Costs (supra) at 294.

[14] Ibid.

[15] At 288.

[16] Ibid.

[17] Supra.

[18] [2003] 1 WLR 510.

[19] At 522 [32].

[20] At 531 [62].

[21] [2009] QDC 249.

[22] [2012] QDC 11.

[23] Supra.

[24] Supra.

[25] Ralph Hume Garry v Gwillim (CA) (supra) at 522 [32] (emphasis added).

[26] Ralph Hume Garry v Gwillim (CA) (supra) at 522 [32].

[27] Uniform Civil Procedure Rules 1999, r 5.

Close

Editorial Notes

  • Published Case Name:

    Tabtill No 2 Pty Ltd & Ors v DLA Phillips Fox (a firm) & Anor

  • Shortened Case Name:

    Tabtill No 2 Pty Ltd v DLA Phillips Fox (a firm)

  • MNC:

    [2012] QSC 115

  • Court:

    QSC

  • Judge(s):

    Applegarth J

  • Date:

    27 Apr 2012

Litigation History

No Litigation History

Appeal Status

No Status