DISTRICT COURT OF QUEENSLAND

1. [1]
   This is an application to strike out an amended statement of claim filed by the plaintiff on 21 August 2002. By that statement of claim the plaintiff, a firm of solicitors, sought to recover costs and outlays in respect of professional work undertaken by the plaintiff pursuant to a retainer from the second defendant, or in the alternative pursuant to a retainer from the first defendant, acting by the second defendant as his agent, to act on behalf of both defendants. The plaintiff alleged that it performed professional work including outlays to the value of $37,223.52, and after giving credit for a payment of $10,000 the balance remains payable by the second defendant or the first defendant or both to the plaintiff.

Legislation

2. [2]
   The applicant first defendant relies on the proposition that this proceeding was commenced in breach of s 48J(1) of the Queensland Law Society Act 1952.  That subsection provides:  “A practitioner or firm may start a proceeding in a court to recover fees or costs from a client only if the practitioner or firm has given the client an account that – (a) is in a form agreed to in a client agreement between the practitioner or firm and the client;  or (b) clearly sets out all items of work done for the client and the amount charged (whether by way of fees or costs) for each item.”  Subsection (2) goes on to provide that the leave of the court is required to start a proceeding if it is one month or less since the account was given, or if the client has applied for an appointment of a costs assessor by the clerk of the tribunal under s 6ZA of the Act.

3. [3]
   It is common ground that no account complying with ss (1) was given by the plaintiff to either defendant prior to 19 August 2002. It follows that, at the time when this proceeding was commenced, there had not been an account provided in compliance with the subsection.

Arguments

4. [4]
   However, the plaintiff submitted that, once the account of 19 August 2002 had been delivered, the requirement of s 48J(1) had been satisfied, and, subject to the time delay in ss (2), the plaintiff was able to sue to recover any costs properly payable. By the time the application came on for hearing, the period of one month had elapsed, and no request had been made by either defendant for the appointment of a costs assessor by the clerk of the tribunal, so as at the date of the hearing the plaintiff was entitled to commence proceedings without leave against the defendants seeking the precise relief sought by the amended statement of claim. In circumstances where a point had been reached where exactly the same cause of action could be pursued in a fresh proceeding, it was submitted that there was no point in striking out the existing proceeding and any deficiencies should be treated as an irregularity which ought to be waived.

5. [5]
   The court has jurisdiction to allow an amendment by which a claim could be added pursuing a cause of action which had arisen only after the proceeding had been commenced (r. 375(2)), and accordingly there was jurisdiction to amend the existing proceeding to add the claim which the plaintiff could now pursue in a fresh proceeding. But that would merely serve to amend the proceeding to include the claim which has already been inserted by the amendment filed on 21 August 2002. At that time, ss (1) had been satisfied, but ss (2) had not been satisfied. However, leave under ss (2) can be given nunc pro tunc:  Jackson & Anor v Creswick Middleton Solicitors [2000] QDC 46.  Since the requirements of ss (2) have now been satisfied, there is no reason why the proceeding should not be regularised.

6. [6]
   In response it was submitted on behalf of the defendants that the existing action is a nullity because of the failure to comply with s 48J(1), and that that deficiency in the existing proceeding could not be cured by amendment or any other power of the court, so that it had to be struck out.

Analysis

7. [7]
   Broadly speaking, statutes which prevent persons from pursuing a cause of action otherwise good at law can do so in a variety of ways. The statute may have barred the remedy but not right, as with a statute of limitations.^[1]  The fact that a claim is out of time does not mean that a proceeding cannot be commenced to pursue it, and it is necessary for the issue to be raised by the defendant in the pleading.^[2]  It is therefore not a ground upon which a statement of claim can be struck out.^[3]  Summary determination of a proceeding on the ground that the cause of action sought to be enforced was not litigated within time can in a clear case be the basis of an application under r. 293, or the issue of whether that is a good defence might be decided separately in advance of the trial:  UCPR Chapter 13 Part 5.  Otherwise the question is simply one of a number determined at the trial.  The position where the statute imposes procedural requirements before an action can be commenced, but does not affect the cause of action, is similar.^[4] 

8. [8]
   On the other hand, the statute may operate to modify the requirements for a cause of action, so that the cause of action will not be complete unless and until certain additional steps have been taken by the plaintiff. In such circumstances, if a proceeding is commenced without taking those additional steps, the plaintiff is in a position where there is no good cause of action to be litigated. In a sufficiently clear case, where the General Steel test^[5] can be satisfied, the proceeding can be struck out under r 171.  If it emerges that the plaintiff has no real prospect of succeeding, summary judgment can be given for the defendant under r 293.  If there is no summary determination of the issue, the matter simply goes to trial, where there is judgment for the defendant.  But that does not mean that the proceeding, or the claim by which it was commenced, is a nullity.  It is a valid proceeding pursuing a cause of action which is bad, and is no different in principle from a valid proceeding pursuing a cause of action which is bad because there is not the required factual basis for it.

9. [9]
   A modified version of either situation is one where the statute requires some additional step to be taken before the cause of action can be sued on, but gives the court power to remove that requirement, that is, give leave to pursue the cause of action although that requirement has not been satisfied.^[6]  It will be a matter of construction of the statute to determine whether in a particular case such leave can be given notwithstanding that the proceeding has already been commenced, but, because there was a valid proceeding commenced, if the statute does permit leave to be given after the proceeding has commenced there is no conceptual difficulty in the grant of leave resulting in the valid proceeding continuing, to enforce a cause of action which was or has become a good one (subject to the other requirements of the cause of action being made out).

10. [10]
    But there is another possibility: the legislature may provide in effect that a person having a good cause of action is not permitted to take proceedings to enforce it, either at all or unless some particular step has first been taken, which may be the grant of leave by the court (or someone else). Here the legislature is not doing anything in relation to the cause of action at all: the legislature is really regulating or restricting access to the courts to enforce a cause of action which is presumably otherwise good. The legislature has in a sense closed the door of the court to the plaintiff, and may or may not provide him with a key in the form of leave which must be used to open the door before access may be had to litigation. But because the real door of the court will remain open, the plaintiff may disregard that prohibition, and a proceeding may be commenced notwithstanding. In such circumstances however the proceeding is a nullity, and will be struck out either under r 171 or under the inherent or implied jurisdiction of the court to control its own process, although strictly speaking it would be just as much a nullity if no such order were made. There can in such circumstances be no question of leave nunc pro tunc:  until the key has been used to unlock the door of the court no valid proceeding can be taken by the plaintiff.  Accordingly the use of the key cannot validate a proceeding already issued.

11. [11]
    It is a general principle of statutory construction that there is a presumption that parliament does not intend to deprive a citizen of access to the ordinary courts for the litigation of disputes. It may be that the legislature makes it clear that that is the intention, and of course effect must be given to a clear provision. In some circumstances the context may justify the inference that that was the intended construction.^[7]For example, rules barring commencement of proceedings without leave by persons who have been declared vexatious litigants are an example of the prohibition which closes the door to the court in the face of a particular litigant.^[8]A proceeding commenced without leave by a vexatious litigant would be a nullity.  The reasoning in Fitzpatrick v Jackson [1989] 2 Qd R 542 indicates that the court there considered that the words used by the legislature and the context of the legislation combined to support a conclusion that the legislation in that case was in the same category.^[9]  It may be noted that both of these are cases where the prohibition operates with reference to some feature of the prospective plaintiff rather than by reference to the particular cause of action sought to be enforced.

12. [12]
    In the present case, the prohibition is in relation to a particular cause of action, an action by a solicitor to recover costs and fees. There is nothing in the context to suggest that the legislature intended to fall into the final category referred to above. The words used would be consistent with a prohibition in the final category, but it is necessary to bear in mind the presumption of interpretation referred to earlier.

13. [13]
    The provision in s 48J is not a new provision, although it was inserted into the Queensland Law Society Act 1952 by the Civil Justice Reform Act 1998.  Similar provisions had appeared for many years in s 22 of the Costs Act 1867, although the provision was briefly moved to the Legal Practitioners Act 1995 s 5 before being inserted into the Queensland Law Society Act.  Even the provisions of s 22 of the Costs Act were copied from earlier English legislation.  I have however been unable to find any authority which held that a proceeding commenced contrary to any of those legislative prohibitions was a nullity.  If provisions of this nature produced the result that a proceeding commenced contrary to it was a nullity, I would have expected some authority to say so after all these years.

14. [14]
    There is however some authority to the contrary. In Coburn v Colledge [1897] 1 QB 702 it was held that the then English equivalent of s 48J did not touch the cause of action, but only the remedy for enforcing it.^[10]  That decision was followed and applied in Re Devy;  ex parte BBC Hardware Ltd (1996) 67 FCR 355, by Hill J.  It was also cited with apparent approval by the Court of Appeal New South Wales in Kinzett v McCourt (1999) 46 NSWLR 32.  It has also been held in New South Wales that the right to have a bill in accordance with the statute delivered before the solicitor can sue for costs is one capable of being waived by the client:  Dodd v Gillis (1989) 16 NSWLR 623.  That is consistent with the position that applies when a cause of action is barred by the statute of limitations.

15. [15]
    There is however some authority in New South Wales to the effect that failure to comply with the equivalent of s 48J is not something which can be remedied by delivering a bill in proper form after the action has been commenced. In Zizza v Seymour (1976) 2 NSWLR 135, a solicitor sued to recover costs in the District Court without having first delivered a bill in compliance with the statute.  The client defended on the ground that there had been no relevant retainer, but did not raise any issue either as to the amount of the charges or as to the failure to deliver a bill as required by the statute.  Judgment was given against him and he appealed.  It appears that on appeal, although he did not dispute the quantum of the fees, he wanted to take the point that there had been a failure to comply with the statute.  By majority that position was upheld.  Moffitt P (with whom Hutley JA agreed) said at p. 137:  “The defect in his case, by reason of the absence of a proper bill, could not be corrected by delivery of a proper bill after the commencement of the proceedings.  The client or party to be charged is entitled to have the proper bill before proceedings against him are commenced, as the express words of s 21(1) show.”  His Honour would have overruled the decision in Lewis and Davies v Burrell (1897) 77 LT 626.^[11]  However, Mahoney JA dissented, saying at p. 140 that there was nothing in the statute which required the defence established by s 21 to be applied whether or not the defendant desired to avail himself of it.

16. [16]
    The position adopted by the majority was followed and applied by the New South Wales Court of Appeal in Conder v Silkbard Pty Ltd [1999] NSWCA 459, where Beazley JA with whom the other members of the Court agreed cited with approval the statement by Moffitt P.  That was a case where a solicitor had sued two companies without first delivering a bill, a point which was taken by the defendant who however then applied to the Supreme Court seeking an order that a bill be delivered.  The Court of Appeal, after dealing with an issue as to the adequacy of the reasons of the Supreme Court judge who heard the application, held that it was inappropriate to order that the bill be delivered because the effect of the failure to deliver a bill could be determined as an issue in the other proceedings, and that delivery of a bill would achieve nothing in the circumstances.

17. [17]
    In neither Zizza nor Conder is there any reference to Coburn v Colledge or the latter cases where it has been applied.  Strictly speaking, neither of them dealt with the particular issue I have to consider, which is whether the claim which can now be made can be added by amendment to an existing proceeding where there has been a good defence previously under the statute.  Indeed, the decision in Conder, to the effect that the issue could properly be determined in the court where the action had been brought by the solicitor, presupposes that that proceeding was not a nullity, although to be fair to the court there was nothing in the reasons which suggest that their Honours turned their minds to the specific issue of whether a failure to comply with the New South Wales provision then under consideration rendered the proceeding a nullity.  It seems to me with respect to the reasoning of Mahoney JA in Zizza is more consistent with the way in which that or the equivalent statutory provisions have been treated in other cases.  Indeed, in Conder their Honours did not question the decision in Dodd v Gillis or the proposition that the right to a bill as required by the statute could be waived by the client.

18. [18]
    It seems to me with respect that it was not necessary in order to deal with the point that had to be decided in Zizza for the court to decline to follow Lewis and Davies.  There was no question in that case of dealing with the situation which would arise if a bill had been delivered and the appropriate time had elapsed.  Strictly speaking if the point had been taken at the trial in Zizza it could not have been remedied at the trial, although neither in Zizza nor in Conder was it said that it would not have been open to the solicitor to deliver the required bill, wait the month and then commence a fresh proceeding.  Neither case is an  authority for the proposition that a proceeding commenced contrary to the statute is a nullity.  Neither requires me to arrive at that conclusion in the present case.

19. [19]
    In Currie v Robinson [1968] QWN 25, a solicitor had obtained default judgment in an action against a client, which was set aside on the ground that no bill of costs as required by s 22 of the Costs Act 1867 had first been delivered.  The substantial issue debated was whether a purported bill was in compliance with requirements of s 22.  Interestingly for present purposes Douglas J gave leave to deliver a fresh bill “insofar as it may be necessary” and did not strike out the action as being a nullity.  Although the report does not suggest that the issue arose, his Honour does not seem to have foreseen any difficulty in the plaintiff’s proceeding in the action after a fresh bill had been delivered and the statutory period had expired or any taxation had occurred.  In Vilensky v Banning (No 960325, Full Court Western Australia, 20.6.96, unreported, BC9602641), the court held that a solicitor was not entitled to recover fees which were not covered by a bill which had been delivered under the Western Australian equivalent, in circumstances where the bill covered some fees but not all of the fees which had been recovered at trial, but it does not seem to me that anything said in that judgment supports the proposition that the action was a nullity, either generally or in respect of those fees and costs not covered by the bill which was delivered.

20. [20]
    In Morgan v Meissner [1975] 1 NSWLR 614, Taylor CJ at CL held that a magistrate’s decision that a bill delivered by solicitors satisfied the requirement of s 21 of the New South Wales Act was in error, so that there had not been a bill delivered in compliance with the statute.  His Honour was determining a point of law reserved by a magistrate, and he determined the point of law, set aside the verdict in the Magistrates Court in favour of the solicitor, and remitted the matter to be dealt with by the magistrate in accordance with his judgment:  p. 616.  That suggests that he did not regard the proceedings in the Magistrates Court as having been a nullity because of the failure to comply with the statute.

21. [21]
    In my opinion the effect of the authorities overall is that a proceeding commenced contrary to s 48J(1) is not a nullity, although the proceeding may well be one which ought to be struck out under r. 171 if it is clear that there has been a breach of the requirements of that statute. The effect of the prohibition is similar to the effect of the statute of limitations, in that it does not affect the cause of action but affects the enforceability of it. In a sense it is the converse of the Limitation Act, in that the latter affects the time after which an action cannot be brought, whereas the former affects the time before which action cannot be brought.  But in other respects they are similar.  Of course the limitation defence is ordinarily not able to be overcome, whereas it will generally be possible for a solicitor simply to deliver an account in compliance with the statute and start again.  The issue presently before me is whether the solicitor should be allowed in effect to start again in the present action.

22. [22]
    It may be however that if I were wrong about the effect of the statute, and the current proceeding was properly regarded as a nullity, it would not be beyond validation, because of the court’s power of amendment. Counsel for the first defendant relied on the decision of Francis v National Mutual Life Association of Australasia Limited [1999] 2 Qd R 355, where a writ which had been issued by a former bankrupt purporting to enforce a cause of action which arose prior to his bankruptcy was struck out, notwithstanding that subsequently he obtained from his trustee an assignment of the cause of action purportedly as and from the day before the writ was issued.  Any cause of action the plaintiff might have had would have vested in his trustee on the bankruptcy and did not revest in the plaintiff merely by virtue of his discharge.  His Honour proceeded on the basis that the plaintiff had no standing to pursue any cause of action against the defendant, and that a proceeding commenced without standing was incurable as a nullity: p. 357.  His Honour then concluded that it was not open to amend the proceeding to add the cause of action which had been assigned to the plaintiff after it had been issued.   His Honour said that such a course could not be followed because “one would have to have a valid writ issued to pursue an existing cause of action before it would be possible to add another cause of action.”  It does appear that the argument for the plaintiff may have been somewhat confused because it was presented as one of substituting a new plaintiff, rather than as adding a cause of action which had arisen after the writ was issued, but his Honour concluded at p. 660:  “I am unpersuaded by the arguments advanced on behalf of the plaintiff that there exists any power under either O. 3 r. 11 or O. 32 to breathe life into the plaintiff’s writ of summons issued on 22 December 1995.  Due to the absence of any cause of action in the plaintiff when he issued his writ it was simply a nullity and in my view it remains a nullity.”

23. [23]
    His Honour in the course of arriving at that conclusion quoted from judgment in Ingall v Moran [1944] KB 160 where Scott LJ at p. 164-5 made some remarks about a proceeding which was a nullity.  That was a case where a person who was subsequently appointed administrator had purported to commence proceedings as administrator of an estate prior to the grant to him of letters of administration.  It has been consistently held that a person cannot as personal representative take such a step until grant of administration, so that any such purported step is a nullity:  Minister of State for the Interior v R T Co Pty Ltd (1962) 1 CLR 1 at 7 per Taylor J.  His Honour’s comment in that case was dicta; what he actually decided was that an action by a plaintiff in respect of a cause of action which had not accrued until after the writ had been issued was not maintainable and it should be dismissed:  p. 8.  No issue arose in that case about amendment after the proceeding was commenced to add a fresh cause of action.

24. [24]
    It seems to me with respect that the true situation in Francis was not that the action was a nullity simply that the cause of action being pursued was bad.  I have difficulty in distinguishing between the situation there and the situation where a plaintiff does not have a cause of action because there is some factual defect in his claim.  If a plaintiff has issued a claim for damages for personal injury and has not in fact suffered personal injury then he does not have a good cause of action, but that does not mean that his claim is a nullity.

25. [25]
    It may be however that subsequent events have overtaken the decision in Francis.  In Thomas v National Australia Bank Ltd [2000] 2 Qd R 448 it was argued that an action was a nullity and had been properly dismissed by the primary judge, but it was held by the Court of Appeal that the action could be amended under s 81.  McMurdo P said:  “The respondents claim that an amendment cannot cure the situation here which is a nullity not a mere irregularity, but such distinctions have become blurred in the civil jurisdiction in recent years.  As this appeal is by way of rehearing, s 81 of the Supreme Court of Queensland Act 1991 and UCPR r. 375(1) permit amendment even though the cause of action arose after the proceeding started.  The statutory force of s 81 would seem to overcome the nullity argument.”  The other members of the Court concluded that the proceedings were not a nullity, so it was unnecessary to consider the point, but Pincus JA at p. 458 noted that the authority of Ingall v Moran (supra) was in doubt in Queensland in view of the decision of the Court of Appeal in Noble v State of Victoria [2000] 2 Qd R 154.

26. [26]
    Subsequently in Ebbage v Manthey [2002] QSC 4, Helman J held that the proceedings before him were a nullity, but acceded to an application to substitute as plaintiff a company which had standing for a plaintiff who lacked it.  His Honour referred to the passage in the judgment of McMurdo P in Thomas (supra) in which he regarded as weighty persuasive authority for the proposition that the power in s 81 of the Act can be availed of where the claim is a nullity.  His Honour continued at [13]:  “An example of the more rigid approach to such matters may be found in Francis v National Mutual Life Association of Australasia Limited (supra) decided on 26 June 1998, ie, over a year before s 81 came into force.”  His Honour appears, with respect, to regard the decision in Francis was no longer good law.

27. [27]
    Whether or not in Queensland now life can be breathed into an action which is a nullity by the power of amendment conferred by s 81, in my opinion this proceeding was not a nullity and there was and is no obstacle to its amendment.

28. [28]
    The proposition that provisions like s 48J bar the remedy rather than the right is also supported by authorities to the effect that, where the client is a company which goes into liquidation, the solicitor may bring an action against the directors of the company for insolvent trading without first complying with that requirement: Re Bechwith;  ex parte Power & Power (1993) 43 FCR 256;  FAI Traders Insurance Co Ltd v Ferrara (1996) 41 NSWLR 91.  The latter decision of the Court of Appeal referred expressly to Coburn v Colledge (supra) with approval, and described a failure to deliver a bill as required by the Act as something giving rise to a procedural defence, which was said not to apply to other remedies.  It was said that the solicitor could for example prove in a bankruptcy, although the solicitor could not be the petitioning creditor in bankruptcy proceedings:  Udovenko v Mitchell (1997) 160 ALR 161, Re Devy (supra).

29. [29]
    In those circumstances in my opinion the preferable construction of s 48J(1) is that a proceeding commenced contrary to it is not a nullity, but a practitioner or a firm does not have a good cause of action to recover fees or costs until the requirements of that subsection have been satisfied. It follows that the present proceeding commenced on 12 April 2002 was not a nullity, but merely a proceeding by which the plaintiff was seeking to enforce a cause of action it could not then enforce. However, once the account in compliance with s 48J(1) was delivered, and the period of one month had expired without an application being made to a clerk of the tribunal for the appointment of a costs assessor, there was no bar to an action by the plaintiff. Certainly by the time the matter came on before me, assuming the account delivered on 19 August 2002 was one in compliance with s 48J(1), the cause of action pleaded was good on its face, free from the bar in s 48J, and if the plaintiff can make out the claim it is entitled to succeed.

30. [30]
    It is of course still open to the defendants to defend, and it may well be that the plaintiff will not ultimately be able to prove the claim pleaded, or that additional facts raised by the defendants will show that the claim was not maintainable. But that is not the present issue. The cause of action now pleaded is one which the plaintiff has, and can pursue, and that was the situation either when the amended pleading was filed on 21 August 2002 (subject to leave), or on 20 September 2002.  The plaintiff could now issue a separate proceeding to enforce that cause of action, and therefore it can now be added by amendment, and it follows that in my opinion the court ought to allow the existing pleading, in which precisely that cause of action is pleaded, to stand, and the present action to proceed, even though there was no valid cause of action at an earlier time.

31. [31]
    There is also the consideration that a counter-claim has been filed by the first defendant. Whether a valid counter-claim can be filed in proceedings which are a nullity may be doubtful. Another reason for validating the existing proceedings is that it would avoid any difficulty about the counter-claim, which might otherwise have to be repleaded in any new action commenced by the plaintiff. There is no dispute as to the validity of the counter-claim, subject to the question of whether there can be a valid counter-claim in a proceeding which is a nullity. Since I am satisfied that the original proceedings was not a nullity, that question does not arise.

32. [32]
    I think that strictly speaking leave is required under s 48J(2), but there is no reason why that leave should not be given, since nothing was in fact done prior to the expiration of the month and neither defendant sought or would seek to have the costs assessed by an assessor appointed by the clerk to the tribunal. Accordingly the purpose of ss (2) is of no consequence in the present case.  It is apparent from the matters raised in the amended defences which have now been filed that the issues have to be resolved by a court rather than by a costs assessor.

33. [33]
    In these circumstances I give leave pursuant to s 48J(2), and pursuant to r 371(2)(d) I declare the amended statement of claim filed on 21 August 2002 to be effectual. I am taking that step because it achieves the same result as now giving leave to make an amendment to the statement of claim to included the cause of action which is now available to the plaintiff, because no further change would need to be made to the statement of claim in order to give effect to that cause of action. It is not necessary for the plaintiff to plead that s 48J(1) has been complied with: see UCPR r 153(1).

34. [34]
    With regard to costs, the plaintiff has not followed the requirements of s 48J, and really required the indulgence of the court to have the proceeding which had been taken regularised. But for that indulgence, the first defendant was entitled to succeed in his application. In my opinion the plaintiff should pay the costs of both defendants of the proceeding which was brought contrary to s 48J, which would include all costs for all steps up to and including the filing and serving of the amended statement of claim on 21 August 2002. The plaintiff should not have to pay the costs of the counter-claim (at least at this stage) or costs incurred in defending that amended statement of claim after 21 August 2002. The plaintiff should however also pay the costs of and incidental to the application filed on 18 September 2002, to be assessed.  Ultimately there was not much if any dispute between the parties as to the appropriateness of such orders for costs.

35. [35]
    Amended replies and answers have not yet been filed on behalf of the plaintiff, and I will extend the time for filing those documents until seven days after these orders are made. Hopefully thereafter the necessary interlocutory steps can be completed, and a request for trial date filed without much further delay.