Bickford v Briley[2006] QDC 187

[2006] QDC 187

DISTRICT COURT

CIVIL JURISDICTION

JUDGE McGILL SC

Appeal No 4316 of 2005

BRISBANE

DATE 01/03/2006

ORDER

HIS HONOUR:This is an application to extend time within which to appeal from a judgment given in the Magistrate's Court on 12 August 2004 when the Magistrate gave summary judgment for the defendant in an action by a solicitor to recover what was said to be unpaid fees.

That action had been commenced in the Magistrate's Court in March 2002 and claimed an amount of a little over $16,000.  What started out as quite a small claim in the circumstances has now managed to accumulate a burden of legal costs which would, I think, substantially dwarf the amount of that claim, and the appellant, in effect, seeks the opportunity to add further to those legal costs.

I should say something about the basis of the claim.  The plaintiff, who is the appellant before me, had pleaded that the defendant retained the plaintiff to act in the provision of legal services and advice pursuant to a cost agreement entered into between them.  It was alleged that at the request of the defendant the plaintiff provided legal services and advice to the defendant's satisfaction, and that it was a term of the cost agreement that the defendant would pay all reasonable professional costs and outlays expended during the course of the retainer.

It was alleged that bills were sent and that these had not been paid and that "Pursuant to the agreement the plaintiff claims a total daily rate of accommodation charge and interest charge" in a particular amount in addition to the amount claimed in the bill.

On the face of it, it is an action to enforce the cost agreement.  There was a cost agreement but it was one which the Magistrate found was void under section 48F of the Queensland Law Society Act 1952 on the basis that the agreement did not comply with section 48 of the Act.  Relevantly, the agreement did not contain an estimate of the total fees and costs likely to be payable for the work or a range of estimates likely to be payable and an explanation of the significant variables that would affect the calculation of the amount.

Clause 11 of the form of notice in the schedule to the Act states that the client agreement must state this and it follows that if the client agreement does not do so there has been a failure to comply with section 48(5) of the Act which provides that the client agreement must not be inconsistent with the notice in the schedule.  On the face of it, therefore, the Magistrate found correctly that the client agreement did not comply with section 48, and it was therefore void under section 48F.

I think it necessarily follows that it was not open to the appellant to sue in the Magistrate's Court on the client agreement.  That does not mean that the appellant could not sue at all but it did mean that he could not sue on the client agreement.

The proceeding seems to have gone rather slowly and the Magistrate, at one point, later in his reasons, commented on some difficulty in obtaining disclosure from the appellant, but was said to have been virtually ready for trial when the defendant's application for summary judgment was filed, and it was that application which came on before the Magistrate on 12 August 2004.  The Magistrate gave summary judgment for the defendant and also ordered the defendant to pay the costs of the action including that application to be assessed on the indemnity basis.

There were no reasons recorded apparently and there is certainly no transcript of reasons or any note of the reasons with the Magistrate's Court file.  It does appear, however, from an affidavit of Mr McNeil that there were reasons given.  The Magistrate accepted that, in the circumstances, the client agreement was void and, therefore, could not be sued on and that the existing proceeding was one suing on the client agreement.  He decided, therefore, that it followed that the existing proceeding must fail and, accordingly, gave judgment under Rule 293.

The appellant would seek to challenge that judgment on three grounds.  Firstly, the Magistrate erred in determining that the agreement was void.  For the reasons that I have already given, I think there is no substance to that ground.  The second was that the Magistrate erred in entering judgment rather than, in effect, giving leave to amend the claim or rather the statement of claim so that the appellant could recover fees on the alternative basis contemplated by section 48I of the Act.

Section 48I provides relevantly that if there is no client agreement and there is a scale for the work provided under an Act the maximum amount of fees and costs the practitioner or firm may charge and recover is an amount calculated in accordance with the scale, and that if there is no client agreement and no scale the maximum amount of fees and costs the practitioner may charge and recover is an amount assessed as reasonable for the work by a Tribunal costs assessor.

The appellant submits that even if the costs agreement is void there is still a right to a restitutionary claim to recover reasonable remuneration for the work done, and that that right could be quantified in the manner specified in section 48 to comply as I have indicated.

Indeed, counsel for the appellant submitted that the existing pleading was wide enough to cover that alternative claim.  That argument is not, in my opinion, so readily dismissed.  Even if it is not correct to say that the existing pleading is wide enough to cover that claim, there is no particular reason why an application for summary judgment should be determined by reference to the existing pleadings.

An application to strike out a pleading, under Rule 171, does turn on the content of the pleadings and if there is something defective in the pleading it can be struck out, although ordinarily leave would be given to re-plead unless the situation arose where it was clear that no claim could properly be pleaded at all.

But an application for summary judgment looks to the outcome of a future trial and in doing so ought to take into account the possibility that, before the trial, or even at the trial, the pleading might be amended.  It is not, in my opinion, strictly confined to the cause of action currently expressed in the pleading.

Accordingly, if it was open in the alternative notwithstanding the voidness of the costs agreement for the appellant to pursue a restitutionary claim for some amount against the respondent, then that is something which, it would seem to me, it might be difficult for a Magistrate dealing with a summary judgment application to determine summarily.

The approach to a summary judgment application is not the same as the approach to a strike out application, but nevertheless it is a serious matter to give summary judgment.  There have been some different views expressed as to the correct approach, but the matter has now been clarified by the decision of the Court of Appeal in Deputy Commissioner of Taxation v Salcedo [2005] 2QdR 232.

It was also submitted that the Magistrate erred in exercising the discretion to award indemnity costs.  As to this an order for costs was made as a matter of discretion.  The Magistrate was conscious of and expressly referred to the reasons of the Court of Appeal in Di Carlo v Dubois, [2002] QCA 225 which is I think the leading Queensland authority on the subject, and on the face of it I think that it might be difficult to say that there were good prospects of success in relation to a challenge to the discretion in relation to costs, though of course if summary judgment ought not to have been given the costs order would necessarily fall with it.

The crucial question in relation to the merits of the matter is whether the Magistrate, having concluded the agreement was void, ought to have gone on to give summary judgment or whether he ought to have allowed the appellant to amend to claim an amount on a restitutionary basis from the defendant.

On the face of it therefore it seems to me in relation to the merits at the moment, and I must say without the benefit of having heard full argument from the respondent, the appellant has reasonably good prospects in relation to the merits.

The appellant immediately after the judgment had some discussion with the counsel who then appeared and gave some consideration to the question of appealing.  This appears in the appellant's affidavit, filed on the 15th of December.  He was informed of the decision promptly and asked counsel whether he had any prospects of appealing against the decision.

Initially counsel thought the order for indemnity costs was wrong, but cautioned, as he put it:

"He went on to caution me about appearing as a party before the Court given that I was a solicitor suing for unpaid fees."

It was his view that the appellant would be better advised to take a commercial approach to the matter.

There as also reference to the expression of the belief that the costs ordered would not be significant, and there was also apparently a suggestion that it would still be open to pursue separately a restitutionary claim.  In my opinion that was clearly not right.

The appellant says he considered the matter further and sought written advice from counsel.  That advice has not been exhibited to the affidavit material, but it is said to have been to the effect that there were no prospects of success of an appeal from the summary judgment order made by the Magistrate.  The appellant says that

"As a result of receiving that advice I did not believe that there was any basis to appeal the decision."

It seems to me that the possibility of appeal was clearly alive to the appellant at the relevant time and that it was one that he considered and, having given it consideration to the point of taking counsel's opinion on it, made a deliberate decision not to appeal.  He would have known about the time limits for appealing, and that in my opinion amounts to a clear decision not to exercise his right to appeal.

Essentially this application has been made because, about a year after the decision was given, the appellant has changed his mind.  That follows it seems indirectly from a decision of mine in an unrelated matter, although my involvement has been entirely coincidental.

The judgment, as I said, carried with it an order for costs on an indemnity basis.  Some months after the judgment was given the defendant claimed an amount of just under $10,000 pursuant to that costs order.  There were then some discussions, but that was not resolved and in July 2005 the respondent sought leave from the Magistrates Court to withdraw that costs statement. 

That was apparently as a result, at least in part, of a decision of mine last year on the question of whether there was such a thing as indemnity costs in the Magistrates Court, a matter which had been ventilated before me.  For reasons I gave in that matter, I concluded that there were indemnity costs in the Magistrates Court.

This may have come as a surprise to some people.  It certainly came as a surprise to whoever drafted the respondent's bill of costs because after leave was given to withdraw that bill a bill for over $20,000 was substituted.  I gather that has now been assessed, but I do not know what amount was finally allowed when it was assessed.  I suppose it appears somewhere in the file.

In any event, the claim of a much larger amount led the appellant to engage a costs assessor with a view to defending the assessment.  The costs assessor suggested that the appellant might like to obtain advice from other counsel in relation to the prospects of appeal.  I think perhaps the costs assessor ought to confine his advice to the subject of costs in the future. 

However, the appellant took that advice and obtained advice, which has also not been disclosed, from other counsel in late September 2005.  Subsequently, I gather soon after that advice was given, the possibility of an appeal was foreshadowed to the respondent's solicitor. 

The notice of appeal subject to leave was filed on the 23rd of November 2005, almost two months after the advice was received.  It came on on the 19th of December before another Judge when it was simply adjourned to a date to be fixed.

...

It has finally come on before me at the beginning of March.  The appeal overall, even after there was a decision to attempt to appeal, has not been proceeded with expeditiously.Obviously the appellant requires a substantial extension of time within which to appeal and that is the first issue to be determined, the first hurdle, so to speak, and in my opinion it is the hurdle at which the appellant falls.

Ultimately the question is whether it is just to extend the time, and that involves a consideration of a number of factors, the merits of the appeal, to which I have already referred, the explanation for the delay or reason for the delay and whether it was a satisfactory reason, whether it really amounts to an excuse for the delay, whether there has been any prejudice to the respondent as a result of the delay and also, I think, consideration such as the significance of the matter, whether it has any public interest consideration, which in the present case, in my view, apparently it does not.  I think also it is relevant to consider the fact that it is only quite a small claim in the first place, as I say about $16,000.

In relation to the explanations for the delay, I accept that there can be an appeal by leave even after a very long time.  In Davies v Perpetual Trustee Company Limited [1959] 2 AC 439 the Privy Council granted special leave to appeal from a decision of the Full Court of New South Wales which had been given 39 years earlier.  That, of course, involved very special circumstances.

An issue had arisen in relation an estate which had really only emerged as an issue once some life tenancies had fallen in, in 1957.  At that point it emerged that there was some real issue flowing from the decision in 1919 and the privy counsel gave leave.  There is, of course, nothing remotely like that in the present case.  That decision was referred to in Queensland Trustees Limited v Faulkner [1964] QdR 153, a case which has some parallels with the present, where there was an application to extend time for appealing from a decision in relation to an order for costs which was given on a judgment in default of defence.  The application was for an extension of time to appeal to the Full Court, but the application came on before a single judge who considered the merits of the matter and concluded that the order for costs was wrong, but, nevertheless, dismissed the application for an extension of time in which to appeal.

Almost 15 months had elapsed since the judgment had been pronounced and there was in that case no explanation as to the reason for the delay.  Also in that case things had moved on in the sense that the judgment, which was a judgment to wind up a partnership, had otherwise progressed and indeed the point had been reached where it would have been difficult to make the order for costs which in his Honour's opinion ought to have been made.  I will not read them into the record, but I think some of the matters said at page 160 by his Honour are instructive, and to some extent also apply in the present case.

There are distinguishing features, in that of course under this judgment there was nothing more for the respondent to do except to proceed to enforce the order for costs.  That the respondent has done, including obviously having bills of costs prepared and having the costs assessed, and costs would have been incurred in relation to that.   It was submitted that this prejudice was one that could be met by an order for costs, and that may be possible, although, again, it just demonstrates the extent to which this litigation has turned it from an argument over a relatively small amount of fees into, in substance now, really, an argument about costs.

I think that it is of some significance that things have been done under the existing judgment.  I accept that an order for costs, perhaps on the indemnity basis, could largely overcome that prejudice, but not entirely, there still would be a certain amount of effort and so on.  And, I also think, frankly, that there is an importance in ordinary people being able to accept that matters have been resolved and that they are entitled to go about their business without being further troubled by litigation which is, on the face of it, over and done with.  I think that is a consideration of some significance. I also think, frankly, that the appellant as a practising solicitor has perhaps less reason to have a good excuse for calling on the Court's indulgence in relation to something like the time limit for appeal.