Vitobello v Russell and Company Solicitors
[2009] QDC 249
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- Vitobello v Russell and Company Solicitors[2009] QDC 249
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Vitobello v Russell and Company Solicitors[2009] QDC 249
Vitobello v Russell and Company Solicitors[2009] QDC 249
[2009] QDC 249
DISTRICT COURT
CIVIL JURISDICTION
JUDGE ROBIN QC
No 1620 of 2009
MICHAEL VITOBELLO and RICHARD MELVYN HAYTER | Applicants |
and | |
RUSSELL AND COMPANY SOLICITORS | Respondent |
BRISBANE
DATE 22/06/2009
ORDER
CATCHWORDS: | Legal Profession Act 2007 s 335, s 300 - order for assessment of legal costs by clients against former solicitors - whether order should include invoices already paid - whether information in solicitors' ledger was an "itemised bill" |
HIS HONOUR: The Court has spent more time than might have been expected on this application to the Court for an order for assessment of invoices emanating from the defendant solicitors seeking payment of legal costs. That's been possible given the light list today.
It's been instructive to spend time on considering the implications of the situation which, I suppose typically, generates concern at the prospect of parties, solicitors or otherwise, becoming involved in a proceeding of relatively large dimensions in respect of costs.
Much of the discussion has concerned the appropriateness of the respondent solicitors having to start again and prepare itemised bills in respect of work described in considerable detail in a ledger kept by the firm, a copy of which the applicant former clients' new solicitors have. It's exhibited to Mr Nase's affidavit.
It is in spreadsheet form indicating the date attributed to an item, the person in the firm involved, a brief description, which appears to be allied with a coding system recording the kind of work done (for example, telephone call, checking and sending a letter, perusing a document, a meeting in the office) and identification of the person, pleading or document in relation to whom something was done. There's then a column for the number of time charging units attributed to the work which, I understand, is done on the basis of each five minutes or part thereof attributed to the work. The remaining columns place a value on a particular item and then identify the balance expected from the client. As payments have been made, those are acknowledged in the ledger.
I would assume that the charging has occurred on the basis of the retainer which is entitled "Costs agreement" and exhibited to Mr Hancock's affidavit.
The respondent firm are resistant to the making of what I'll accept from Mr Nase is an order, which may be coming to be a customary one, that itemised bills be prepared in the circumstances. Mr Somers presented the firm's argument. His preference is for Mr Nase to be required to move next and indicate what items as referred to in the ledger are going to be contested.
This is all happening against a background where most of the firm's invoices have been paid, the total of those paid being $47,724.26; outstanding invoices seek $10,462.02.
Mr Somers didn't cavil at the Court's entitlement to order assessment in respect of the unpaid invoices but submitted that, at least as a discretionary matter, the Court ought to pause before ordering assessment in respect of those that have been paid. He relied on what appears in dal Pont, Law of Costs (2003) in paragraph 4.49: "Statute limiting taxation of paid bills. Prima facie payment by a client of his or her solicitor's bill of costs is treated as evidence of the client's implied acceptance of the reasonableness of the account. It is for this reason that the legislation governing taxation traditionally placed a time limit on the availability of taxation according to whether or not the bill has been paid. Though the English model from which this was derived no longer operates in any Australian jurisdiction, its vestiges remain in New South Wales, Tasmania and Victoria. In the other jurisdictions the payment of a bill is not a factor relevant to the issue of seeking a taxation."
As the author effectively acknowledges, there are jurisdictions in which the fact of payment doesn't matter. Queensland is one; see now section 335(3) of the Legal Profession Act 2007.
The section authorises a client to apply for assessment of legal costs. No detailed listing of the Court's powers appears in the Act nor, indeed, any clear identification of the "court" that may be found referred to in section 335(6). This Court has been selected as the appropriate venue on the basis that the amount of costs sought by the firm is something in excess of the upper limit of Magistrates Court jurisdiction.
It's well known, I hope, that a proceeding in this Court ought to show how it comes within the Court's jurisdiction. Startune Pty Ltd v Ultra-Tune Pty Ltd [1991] 1 QdR 192. Ideally, there might have been a reference to that in the originating application which was filed on the 12th of June 2009 and thus in time for purposes of the limitation in section 335(5), the date of the first invoice being the 16th of June 2008.
The affidavit filed in support of the application exhibits the ledger I referred to and in that way establishes that the matter is within the Court's jurisdiction. Mr Somers took no point in that regard, in any event, although indicating that should the Court reach the view that only the unpaid invoices ought to be scrutinised by an assessor, there would have been argument that the Magistrates Court was the appropriate one to resort to.
Accepting only for the sake of argument that Mr Somers is correct that some basis must be shown for the Court acceding to a client's application under section 335, rather than the circumstances being ones as Mr Nase submits in which a client has a right to assessment, Mr Nase in his affidavit in paragraph 5 deposes that his clients seek an assessment of all the costs of the firm "on the ground that the fees charged are excessive and do not bear any reasonable proportion to the work performed."
I'm of the view that that provides a sufficient basis and that Mr Somers' suggested approach of the Court checking the charges against the costs agreement with a view to refusing the application is unsound.
I didn't understand any suggestion to be made that the ledger is in any way setting out to be misleading or to conceal anything. The purpose of the document is doubtless an accounting one in which no one would expect the kind of elaboration encountered in an "itemised bill" which is defined in section 300 of the Act in fewer words than but probably with effect similar to the definition in dal Pont's text.
In the end, I've determined to make what I accept from Mr Nase is the customary order referring to itemised bills, rather than require him to take the next step and indicate what items are challenged. In principle the solicitors ought to go first and provide the equivalent of an "itemised bill". One has to ferret about within the ledger to find items that might cause concern but there are some to do with unexplained meetings in the office involving only personnel within the firm, something called "file management" which appears several times and the like. Similarly, there are, in my view, insufficient particulars in respect of at least some of the legal research referred to and other activities such as "company searches", there being no indication as to what companies were being investigated. I have given examples only.
The stakes are high in the sense that whoever does badly in the assessment may have to bear the costs of it. The clients should be given a clear idea of what is involved in items they contemplate challenging.
I emphasise that there's no suggestion that anything is being hidden. The mystery that exists flows from the nature of the documentation which the firm prepared and apparently elected to transmit to the client to justify the fees charged.
There are instances of the same defence or defences being processed in some way multiple times on the same day. There are other instances of perusing documents simply called "pleadings" in respect of which it's not at all clear what pleading in a Supreme Court proceeding which had at least eight defendants, at least half of whom were not in the present applicants' camp. Mr Somers didn't assert that the ledger document should be used as a model of what is to be expected whenever a solicitor has to produce an "itemised bill". He was simply making submissions focused on what seems appropriate in this case where, in his submission, what had been provided should, in all of the circumstances, be accepted as sufficient.
I have found it a close question but in the end think that something more easily recognisable as an "itemised bill" as defined should be provided. Although Mr Summers sought to press the Court to give some indication of what was required in respect of an itemised bill, also sought to press Mr Nase to do that, I do not think that is something the Court ought to set out to do in this application. It is better to leave that commonly used term as it is, I think, without explication from the Court (necessarily offered in a vacuum) which might produce a mischievous precedent.
I am going to make an order in terms of the draft propounded by Mr Nase, which reserves the costs of and incidental to this application. It has been amended in a couple of respects to permit the firm, if they wish to do it, to shorten the time taken for the assessment process and see the unpaid accounts attended to sooner rather than later, by allowing him the possibility of using up less than the time the order allows for delivering itemised bills or a single itemised bill. If the firm does then, the applicant former clients will have to respond sooner rather than later.
Order as per initialled draft.