Franklin v Barry & Nilsson Lawyers (No 3)
[2011] QDC 112
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- Unreported Judgment
- Franklin v Barry & Nilsson Lawyers (No 3)[2011] QDC 112
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Franklin v Barry & Nilsson Lawyers (No 3)[2011] QDC 112
Franklin v Barry & Nilsson Lawyers (No 3)[2011] QDC 112
DISTRICT COURT OF QUEENSLAND
CITATION: | Franklin v Barry & Nilsson Lawyers (No 3) [2011] QDC 112 |
PARTIES: | EYLECE PATRICIA FRANKLIN AND BARRY & NILSSON LAWYERS |
FILE NO/S: | 2607/09 |
DIVISION: | Civil |
PROCEEDING: | Application |
ORIGINATING COURT: | District Court, Brisbane |
DELIVERED ON: | 10 June 2011 (final written submissions received on 6 May 2011) |
DELIVERED AT: | Brisbane |
HEARING DATE: | 21 April 2011 |
JUDGE: | Irwin DCJ |
ORDER: | 1. The respondent pay the applicant the costs of the application, reserved by the order of Samios DCJ on 24 June 2010. |
CATCHWORDS: | PROCEDURE – COSTS – application for order that reserved costs of an application for bills delivered by respondent to be assessed under s 335(1) of the Legal Profession Act 2007 (Qld) be paid by the respondent – where the application under s 335(1) sought that the time for making the application be enlarged under s 335(6) to the date on which application filed – where the reasons for the delay were explained on the return date, apart from the 12 month period from when the last bill was delivered – where the application was adjourned to enable evidence to be filed to explain the reasons for the delay for that period – where the court held this explanation to be satisfactory and reasonable – where the respondent sought an order that the applicant pay its costs thrown away by the adjournment – where the court found that the respondent was aware of the applicant’s concerns about her costs – where the court found that to have filed this evidence would have added cost to the original application – where the court ordered the bills to be assessed – where the court ordered the costs of the application including the costs of the adjournment be reserved – where as a result of the costs assessment the respondent was ordered to pay the applicant $37,195 and the respondent’s application to review the costs assessor’s decisions was dismissed – where the costs assessor’s decision reduced the legal costs by in excess of 15% – whether the applicant was entitled to an order that the reserved costs of the original application be resolved in her favour by ordering that the respondent pay her costs of the application Legal Profession Act 2007 (Qld), s 319(1)(c), s 335(1), s 335(5), s 335 (6), s 342 (2)(a) Uniform Civil Procedure Rules 1999 (Qld), r 681, r 743H Franklin v Barry & Nilsson Lawyers (No 2) [2011] QDC 55, cited Oshlack v Richmond River Council (1998) 193 CLR 72, cited |
COUNSEL: | G.A. Robinson for the applicant A.K. Cooper (solicitor) for the respondent |
SOLICITORS: | Neumann & Turnour Lawyers for the applicant Barry & Nilsson Lawyers for the respondent |
HIS HONOUR: The applicant, Ms Franklin, seeks an order that the issue of costs reserved by the order of Samios DCJ on 24 June 2010 be resolved in her favour by an order that the respondent firm of solicitors pay her costs of that application.
It is important to understand the context in which this order was sought. Some of the relevant background is set out in my decision in Franklin v Barry & Nilsson Lawyers (No 2) [2011] QDC 55.
The firm were retained to act for Ms Franklin in a matrimonial property settlement from June 2003 to late 2008. The parties entered into a costs agreement in 2003. In 2005 Ms Franklin filed an application in the Family Court. On 21 February 2007 the proceedings were ordered to be transferred to the Federal Magistrates Court. The parties did not make a fresh costs agreement. Between July 2003 and September 2008 38 interim accounts were prepared in accordance with the original costs agreement and sent to Ms Franklin. She paid them all. She sought to recover part of what she had paid the firm.
On 13 November 2009, on Ms Franklin's application, Clare SC DCJ declared there was no valid costs agreement between her and the firm in respect of the work conducted in the Federal Magistrates Court. However, her application for an itemised bill of costs was refused.
On 3 June 2010 an application was filed on behalf of Ms Franklin under section 335(1) of the Legal Profession Act 2007 (Qld) (LPA) for eight bills delivered by the firm to her to be assessed and that Mr Kerr be appointed to assess them. The application included a paragraph that it be ordered "the costs of and incidental to the application be reserved."
The applicant also sought an order that the time for making it be enlarged pursuant to section 335(6) of the LPA to the date in which the application was filed. This was because under section 335(5) the time for making the application expired
12 months after the last bill sought to be assessed was given. It was accepted that the date of the last bill was 15 September 2008. Therefore, pursuant to those provisions Ms Franklin had to demonstrate her reasons for not seeking an assessment by 15 September 2009, the application not being consented to.
When the application came before Samios DCJ on 17 June 2010, as his Honour said in an ex tempore judgment on 24 June 2010, the reasons for the delay were explained, apart from the 12-month period from when the last bill was delivered on 15 September 2008. These reasons were that the parties had been engaged in the litigation before Clare SC DCJ; there had been a delay in obtaining Ms Franklin's file from her former solicitors; and her counsel Mr Robinson was unable to give the matters any more priority because of other priority matters.
As put by the firm in its outline of argument relevant to my decision: "It being conceded by Ms Franklin that no evidence existed to explain the delay for the 12-month period from 15 September 2008 the matter was necessarily adjourned."
As a consequence, on 23 June 2008 an affidavit from Ms Franklin was filed which, in the opinion of Samios DCJ when the adjourned application was heard by him on the following day, gave reasons for the delay for that period which was not covered by the evidence that was already available at the hearing one week earlier. His Honour considered the explanation to be satisfactory and reasonable. It was on that date, 24 June 2010, that his Honour ordered, pursuant to section 335 of the LPA, the eight bills be assessed by Mr Kerr pursuant to section 319(1)(c) of that Act. By implication, he enlarged time for making the application.
His Honour did this by making an order in terms of the first three paragraphs of the firm's draft order which had been presented to him. Having come to the view, in fairness to both parties, that the costs of the 17 June 2010 adjournment would be reserved, he deleted paragraph 4 which read: "that the applicant pay costs of the respondent thrown away by the adjournment on 17 June 2010 fixed in the sum of $750." This paragraph was consistent with Mr Cooper's argument on behalf of the firm before his Honour that the firm should have the costs thrown away by the adjournment. His Honour then amended paragraph 5 of the draft order which had read: "that otherwise the costs of the application be reserved" and substituted the order that costs of the application, including the costs of the adjournment of 17 June 2010, be reserved. It is in relation to this order that the issue before me arises.
Mr Kerr subsequently assessed the bills and his certificate was filed on 7 December 2010. He assessed the costs payable by the firm to Ms Franklin, pursuant to the order made by Samios DCJ of 24 June 2010, as $23,426.26. As the firm had acknowledged receipt of payment of the costs referred to in the eight invoices ordered to be assessed of $50,358.13 he certified that the balance owing to the respondent was $26,931.87.
The costs of the assessment being payable by the firm pursuant to section 342(2)(a) of the LPA the fee of $8,910 which had been paid by Ms Franklin was payable as a refund by the firm to her. This was because that section provides if, as in this case, the legal costs are reduced by 15 per cent or more, unless the costs assessor otherwise orders, the law practice to which the legal costs were paid must pay the costs of the assessment. Accordingly, Mr Kerr certified the total repayable by the firm to Ms Franklin to be $35,841.87.
On 14 February 2011 an application was filed on Ms Franklin's behalf seeking an order that within 14 days the respondent pay to the applicant the sum of $37,195. The basis of the application was to give effect to the cost assessor's certificate plus an additional sum of $1,353.13 relating to a fee which the cost assessor noted was paid twice. The claim for this fee was not in dispute.
On the return date of the application the respondent opposed the orders sought, in effect seeking a review of the cost assessor's decision. Pursuant to orders by the Court, the respondent filed a formal application to set aside the cost assessor's certificate. These applications were heard by me on 22 March 2011. I delivered judgment on 21 April 2011 that:
- The respondent's application to review the costs assessor's decision and to set aside the certificate of the costs assessor filed 7 December 2010 is dismissed;
- That within 14 days the respondent pay to the applicant the sum of $37,195.
I also ordered that the firm pay Ms Franklin's costs pursuant to rule 743H of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) on the standard basis to be assessed. This order was not opposed. However, the firm resisted the order sought by Ms Franklin in relation to the costs reserved by the order of Samios DCJ on 24 June 2008. I gave both parties the opportunity to file and serve written submissions in relation to this issue, the final submission to be received by 9 May 2011. Accordingly, I reserved my decision.
The firm submits that as the adjournment was occasioned entirely at the applicant's hands, it is unjust that she get costs which were occasioned as a consequence. In support of this it is submitted that the affidavit sworn by Ms Franklin in support of that application did not in any way at all address the issues required to be addressed by her pursuant to section 335(6) being the reasons for her delay in bringing the application. The firm reminds me that, pursuant to section 335(5) and (6) Ms Franklin had to demonstrate to the Court her reasons for not seeking an assessment by 15 September 2009. It says that at the date of the hearing before Samios DCJ on 17 June 2010 no such evidence existed. That was conceded on behalf of Ms Franklin and the matter necessarily was adjourned and, as section 335(6) invokes the Court's discretion, it was a matter entirely for her to provide evidence in support of the application.
It says with reference to Ms Franklin's affidavit of 23 June 2010 which was filed in support of the application, it reveals that she and the firm were in discussions regarding costs up to 30 June 2009 when the firm wrote to her with information and asking her to discuss her concerns; no further correspondence was received; and the period between July and August is explained by Mr Robinson's illness, a matter the respondent could have no knowledge about until 23 June 2010.
It is therefore submitted that in those circumstances it could not be said the firm was aware of all the issues revealed in relation to the delay and, in any event, it was a matter for Ms Franklin to appraise the Court of the evidence in support of her application.
The 24 June 2010 order by Samios DCJ reserving costs of the application has two aspects: first, there are the costs of the application which was finally determined on that date; and, second, there are the costs of the adjournment of 17 June 2010 or, as the firm expressed this in the draft order, the costs of the firm thrown away by the adjournment fixed in the sum of $750. The fact that the order involved these two aspects is confirmed by the way in which the firm originally prepared the draft order which was amended by his Honour.
That involved separate paragraphs 4 and 5. Paragraph 4 concerned the costs of the firm said to be thrown away. Paragraph 5 was expressed as "that otherwise the costs of the application be reserved." This is also clear from the language of Samios DCJ in his decision of 24 June 2010 in saying the costs of the adjournment of 17 June 2010 will be reserved as will be the other costs of the application.
It is convenient to deal first with the question of reserved costs to the exclusion of those said to be thrown away. In relation to this, I agree with Mr Robinson's submission that the reason the application sought that these costs be reserved (as did the firm's draft order) was that at the time of making the application, and for that matter at the time of making the order that the bills be assessed by Mr Kerr, the Court would not know the outcome of the assessment. This is particularly so having regard to the terms of section 342(2)(a) to which I have referred.
UCPR 743H provides that if a certificate of assessment is filed in the relevant Court, the Court or any party may relist the application. In this case, on 15 February 2011 the application to give effect to the costs certificate was filed by Ms Franklin. On 25 February 2011 the firm filed the application to set aside the certificate which, as indicate, I decided in Ms Franklin's favour.
As submitted by Mr Robinson, since section 342(1) of the LPA provides that "a costs assessor must decide the costs of a costs assessment," the Court at the time of the hearing under UCPR 743H will then know what the cost assessor has decided. The costs assessor's decision clearly provides a basis for the successful party (i.e., the party with the benefit of the costs assessor's decision as to costs of the assessment) to seek an order for costs of the application when the matter next comes before the Court pursuant to UCPR 743H.
This is particularly so in the present case where the costs assessor's decision has reduced the legal costs by in excess of 15 per cent such that the firm must pay the costs of the assessment, and I have ordered the firm to pay Ms Franklin in accordance with that assessment. The usual rule is that the costs of the proceeding follow the event: UCPR 681 and Oshlack v Richmond River Council (1998) 193 CLR 72 at [67] to [70].
For the reasons I have given, as submitted by Mr Robinson it was not appropriate at the stage when the matter was before Samios DCJ to do otherwise than to reserve costs to await the outcome of the assessment. Now that the costs assessor's decision is known and has been enforced by my order in favour of Ms Franklin this clearly provides the basis for an award in her favour of the costs of the application reserved by Samios DCJ on 24 June 2010 subject to my decision on the reserved costs said to have been thrown away by the adjournment of 17 June 2010.
Mr Robinson refers me to the judgment of his Honour on that date which resulted in the order with which I am now concerned. I have read that decision in full. His Honour decided that Ms Franklin's 23 June 2010 affidavit gave reasons for the delay for the 12-month period from the delivery of the last bill in the matter on 15 September 2008 not covered by other evidence that was already available on the hearing of 17 June 2010. As I have observed, his Honour found these reasons to be satisfactory and reasonable. His Honour said that the question arose that now that there was no opposition to the bills being assessed, what was to be done about the costs thrown away by the 17 June 2010 adjournment. Having stated that nevertheless Mr Cooper said that his firm should have the costs thrown away by the adjournment, his Honour said:
"My opinion is to the opposite, because what the affidavit of the applicant has shown is that the respondent firm, by various persons, was aware of the applicant's concerns about her costs and other issues arising out of the divorce and the property settlement. In my opinion, the evidence was always there, it just had not been filed.
To do so would have added cost to the original application which came on before me on the 17th of June 2010, and to say that the applicant had the obligation to put that material on is one issue.
The other issue is was it really necessary, particularly when it appears, as I am satisfied, the respondent provides various parties, its various agents, was aware of the applicant's position."
It was having come to this view that his Honour made the order for reserved costs in fairness to both parties. In my view, his Honour had in mind in relation to both the costs of the adjournment of 17 June 2010 and the other costs of the application that they be reserved to await the outcome of the assessment and to be determined on the basis of who was to be the successful party upon the completion of that assessment.
Further, his Honour in saying that his opinion was the opposite of the position stated by Mr Cooper was clearly expressing his view that he did not agree that the firm should have the costs thrown away by the adjournment because Ms Franklin's affidavit showed that the firm, by various persons, was aware of her concerns about her costs and the other issues arising out of the divorce and the property settlement. He emphasised this by going on to say: "To say that the applicant had the obligation to put the material on is one issue. The other issue is was it really necessary, particularly when it appears, as I am satisfied, the respondent provides various parties, its various agents, was aware of the applicant's position."
In also saying that "the evidence was always there, it just had not been filed" and it "would have added cost to the original application" which came on before him on 17 June 2010 his Honour was clearly of the opinion that there was reason to believe in the circumstances that the application could have been resolved by consent orders on that date. This is also my view. In addition, Mr Cooper's submission includes a concession that the parties were in discussions regarding costs up to 30 June 2009. Accordingly, the firm was aware of Ms Franklin's position up to that date. The only matter of which the firm could not have knowledge was that the period between July and August 2009 was explained by Mr Robinson's illness.
It follows that they had knowledge of the reasons for the delay in relation to about nine months or 75 per cent of that period. In these circumstances, while this is not a mathematical exercise, the firm was in possession of information about the reasons for the substantial period of the delay.
In these circumstances, to adopt the language of Samios DCJ, I do not consider that it was really necessary to file the affidavit to explain the delay with the added cost it would have involved to the original application. Therefore, I reject Mr Cooper's argument on behalf of the firm that the adjournment of 17 June 2010 was occasioned entirely at Ms Franklin's hands and it is unjust that she get costs therefrom in the sum of $750 or otherwise.
Accordingly, I order that the issue of costs reserved by the order of Samios DCJ on 24 June 2010 be resolved in favour of the applicant, Ms Franklin, by ordering that the respondent firm of solicitors pay her costs of that application.