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King v Mahoneys (a firm) QDC 23
DISTRICT COURT OF QUEENSLAND
King v Mahoneys (a firm)  QDC 23
Mahoneys (a firm)
15 February 2016, ex tempore
15 February 2016
The application for leave to appeal is dismissed.
APPEAL – APPLICATION FOR LEAVE TO APPEAL AGAINST SUMMARY JUDGMENT GRANTED IN MAGISTRATES COURT – where subject matter is a minor civil dispute – s 45 Magistrates Court Act – whether important principle of law or justice involved – ss 310 and 316 of Legal Profession Act – where disclosure statement in relation to costs agreement not given promptly – whether that affected claim for costs incurred after disclosure statement given (albeit late)
Jerome King (self-represented) for the applicant
M Walker (solicitor) for the respondent
Mahoneys Law Firm for the respondent
- The appellant seeks leave to appeal against a summary judgment which was given in favour of the plaintiff in the Magistrates Court on 12th of October 2015. The claim upon which judgment was given was a claim for the recovery of legal fees said to have been owing pursuant to a costs agreement. The moneys the subject of the claim were those which were invoiced to the second defendant. The total amount, including the outlays and GST, was $4446.55. Four fortnightly part payments of $60 had been made by the first defendant, but otherwise there was no dispute that the balance of the moneys had remained unpaid.
- The first defendant, who acted for himself, had filed a defence which annexed some documents. The defence did not in all respects comply with the rules. In particular, it failed to give an explanation for non-admissions. That, however, was not influential in the decision of the learned magistrate. As appears from the reasons for judgment, the magistrate acknowledged that the defendant, if given an opportunity, would have amended the pleading so as to plead the matters which were, in fact, referred to in the seven paragraphs of the counter-claim, as matters of defence. The matter was approached on the basis that if those matters would provide a defence such as to justify a refusal of the application for summary judgment, then the application for summary judgment would be refused and the defendant given an opportunity to amend the pleading.
- The substantive matters raised by the defendant related firstly, to an alleged failure of the plaintiff to have complied with section 310 of the Legal Profession Act 2007, by failure to give a costs disclosure in writing before, or as soon as practicable after, the law practice was retained in the matter. Secondly, it was alleged that there had been an agreement entered into for the payment of the outstanding fees by way of instalments, which the plaintiff had unilaterally ignored in demanding the outstanding balance and in commencing its claim.
- In this case leave to appeal is required because the amount in dispute in such that it is a minor civil dispute. Pursuant to section 45 of the Magistrates Court Act leave cannot be granted unless the court or a judge is satisfied that some important principle of law or justice is involved. The approach to granting leave is that which was discussed by McGill DCJ in Ramzy v Body Corporate for GC3 CTS38396 and another (2012) QDC 397 para as 41 to 42.
- The issue to which the learned magistrate gave greatest attention in his reasons for judgment was the suggestion that there had been an agreement entered into for the payment of the outstanding amount over time. Insofar as any point of principle is concerned, the magistrate appears to have proceeded on the correct basis, namely, that if an agreement had been entered into, whether or not in writing, then there would have been grounds for refusing the application for summary judgment. Ultimately, however, the learned magistrate found that at its highest all Mr King could point to was an agreement to agree rather than an enforceable contract. .
- It is unnecessary for me to descend to whether, on the facts, that was a correct finding or not. It is sufficient for me to observe that his Honour’s finding in that regard does not raise any important principle of law or justice in terms of an appeal. It was simply a matter of his Honour looking at the material before him in the context of the application of settled principle.
- On the hearing of this application for leave to appeal, the appellant, in recognising that some important principle of law or justice needed to be raised, concentrated on the argument in relation to section 310 of the Legal Profession Act. Section 310(1) requires the disclosure statement to be made in writing before, or as soon as practicable after the law practice is retained in the matter. Section 305 provides that a client first instructs a law practice in relation to a matter in a particular jurisdiction if the law practice first receives instructions from or on behalf of the client in relation to the matter in that jurisdiction.
- In this case the documentation which was before the learned magistrate showed that the law practice had first received instructions in July. In particular, at least by the 16th of July, the solicitor who had the carriage of the matter on behalf of the appellant was writing, on the appellant’s behalf, relaying instructions. It was pointed out, on behalf of the appellant, that the disclosure statement was not given until the 6th of August 2014, and it was submitted that, in the circumstances, there was at least an issue as to whether the disclosure had been given as soon as practicable in accordance with section 310 (1).
- A failure to give prompt disclosure pursuant to section 310 (1) has a number of potential consequences. Those relied upon by the appellant appear in section 316(1) and (2). The interplay between those provisions in a case where disclosure has been given, but not promptly, was considered by Judge Wall QC in Gregg Lawyers Pty Ltd and another v Viki Maree Farrar (formerly Sweeney)  QDC 194. In that case, work had been done from October 2009 pursuant to a retainer, but there had not been disclosure made in relation to the costs until the 10th of March 2010. His Honour concluded that had consequences for the recovery of costs for the period from October 2009 until when disclosure had been given, but did not affect the ability to recover costs incurred pursuant to instructions given after disclosure. In particular, his Honour said as follows:
For present purposes this has the consequence that the costs agreement, so far as they concerned the period between early October 2009 and 10 March 2010, did not comply in a material respect with the disclosure requirements of division 3, in particular section 310(1) for the solicitor, and section 310(2) for the barrister, in which case the costs for that period are to be assessed under section 341 according to what is fair and reasonable (and not the costs agreements) with the risk also of a reduction under section 316(4) and sections under 316(7).
Because of disclosure on 10 March 2010, the costs agreements ceased to be non-complaint for charges thereafter. So the client was then informed in proper detail of what fees the practitioners would charge. That seems to be the purpose of division 3. The practitioners are penalised in respect of their charges before that date. If it were otherwise the practitioners would, for the entirety of their retainer, be prevented from the benefits associated with making proper disclosure to the client. Faced with that consequence, it is artificial to suggest, as Mr Coulsen did, that the practitioners should terminate their retainer and start afresh. The fact is that the barrister and solicitor are not able to charge pursuant to their costs agreements for the period up to 10 March 2010, not because there was no costs agreement covering charges for that period, but because they did not, until then, comply with their division 3 disclosure obligations. The costs agreements are valid once the division 3 disclosure obligation was satisfied, but only for fees from then on, not before. Those before are to be assessed according to what is fair and reasonable.
- The appellant submitted that whilst in this case the invoices were purported to be for work done substantially for the period after the disclosure statement had been given (only one entry for the day prior was included, the majority of the work had for which he was charged was done in July.
- The learned magistrate appears to have proceeded on the basis that the work for which the appellant was invoiced was only that work which was done in the days referred to in the invoice, rather than work that was done earlier in July. Whatever be the true factual position about that, the difficulty for the appellant in relation to leave is that it raises at best a factual issue rather than any important principle of law or justice.
- Accepting the correctness of the approach of Judge Wall, the question became not one of principle, but rather one of fact as to when the work for which the appellant was invoiced was carried out. Whether that was correctly identified as being only after the disclosure obligations had been complied with, or whether it predated that may, no doubt, be a matter of significance to the appellant, but it does not establish some important principle of law or justice justifying a grant of leave pursuant to section 45 of the Magistrates Court Act 1921.
- There is no other basis upon which it could be said that the appeal raises an important point of a kind which would justify the grant of leave. Accordingly, the application for leave to appeal is dismissed.
- Published Case Name:
King v Mahoneys (a firm)
- Shortened Case Name:
King v Mahoneys (a firm)
 QDC 23
15 Feb 2016