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- Unreported Judgment
MAGISTRATES COURT OF QUEENSLAND
Jones Leach Lawyers Pty Ltd ACN 164 332 647 v Crosby (No 2.)  QMC 15
JONES LEACH LAWYERS PTY LTD
ACN 164 332 647
MICHAEL LEE CROSBY
M3899 of 2019
30 October 2020
30 October 2020
Legal Profession Act 2007
Uniform Civil Procedures Rules 1999, rr 292, 743A, 743B, 743G, 743H
Bell Lawyers Pty Ltd v Pentelow (2019) 372 ALR 555;  HCA 29.
Re Sebasio (No. 2)  QSC 312
R B Dickson for the Plaintiff
N P Hiscox for the Defendant
Jones Leach Lawyers for the Plaintiff
- The history of this matter was set out in written reasons delivered by the court on 29 October 2020, in which the defendant’s application to review a costs assessor’s decision was dismissed (the ‘Review Application’). The issues remaining for determination are:
- The plaintiff’s application for judgment under r. 292 and/or r. 743(H) of the Uniform Civil Procedure Rules 1999 (UCPR);
- The dispute as to whether the plaintiff’s entitlement to recover its fees remains deferred under terms of the costs agreement (the ‘Deferment Question’);
- Costs of the both the interlocutory Review Application and these proceedings more generally.
- Having dismissed the defendant’s Review Application, the plaintiff seeks judgment under r. 292 and/or r. 743H of the UCPR in the sum of $78,425.06 together with interest in the sum of $1,372.79 and costs.
- The basis upon which the plaintiff seeks judgment under both rr. 292 and 743H is to ensure that the proceedings, as a whole, come to an end.
- Whilst this approach may seem unnecessary, it is born out of the way in which the relevant provisions of the UCPR hang together with the Legal Profession Act 2007. Put simply ,unless an application for a costs assessment is brought before a firm brings its proceedings to recover those costs, the application for the costs assessment must brought as an interlocutory application within the recovery proceedings: r. 743B. That is what has occurred here.
- Accordingly, my decision to dismiss the interlocutory Review Application does not, as of right, give rise to judgment on the claim where there remains an issue in dispute – in this case the Deferment Question. I note that under r. 743G of the UCPR, the Court would usually determine any other significant issues, such as the Deferment Question, before making orders for the assessment of costs. Up until today, both parties contended that were no issues remaining in dispute between them. After further consideration, the Deferment Question, originally raised on the pleadings, was re-enlivened by the defendant.
- In these proceedings, not much turns on whether I give judgment under r. 743H(4) or r.292 of the UCPR. Both rules simply found the power by which the court can grant final relief. An order under either provision will necessarily bring the proceedings as a whole to an end. Given that these proceedings are generally governed by Ch.17A Pt 4 of the UCPR, I find that it is appropriate to proceed under r. 743H within that Part of the UCPR.
The Deferment Question
- As already mentioned, at the commencement of the hearing, the defendant’s counsel conceded that, for the purposes of r. 743H(4), there were no issues in dispute. However after an opportunity to consider the matters more fully, it was argued for the defendant that the plaintiff was not entitled to judgment because it was a term of the client agreement that the requirement to pay legal fees incurred would be deferred until the proceedings, in which the plaintiff had been acting for the defendant, were resolved.
- It is accepted that when the costs agreement was signed by the defendant on 22 January 2019, it was the final agreement reached by the parties (Costs Agreement). The defendant, initially submitted the possibility of there having been an oral agreement, however ultimately conceded that those discussions pre-dated the written agreement signed by him. This accords with a plain reading of the Costs Agreement. Accordingly, I find that the Costs Agreement encompasses all of the terms of the agreement between the parties. To be clear, I find that there were no other collateral agreements or variations to the terms of the Costs Agreement.
- The Costs Agreement does contain a provision by which the plaintiff agrees to defer recovery of its fees until the proceedings for which the firm was representing the defendant had been concluded. However the Costs Agreement relevantly provides that in the event it is terminated by the defendant, the defendant “will become liable to pay us professional fees for all the work performed on your behalf and to pay all disbursements incurred by us on your behalf up until termination as calculated under this Agreement.”
- I find that the defendant did terminate the Costs Agreement.
- The defendant submitted that because the plaintiff elected to secure his indebtedness by lodging caveats over real property, it was precluded from seeking to recover its fees until the conclusion of the proceedings in which the plaintiff had been representing the defendant. I do not accept that submission. When read as a whole, the use of ‘and’, when expressing the plaintiff’s right to secure its costs and require payment of them, militates against that interpretation. I find that the words of the Costs Agreement are clear and do not preclude the plaintiff from both securing the debt and pursuing recovery of it. The plaintiff’s right to hold the security subsists until such time as the debt is paid.
- As to costs, the plaintiff seeks:
- no order as to costs of and incidental to the interlocutory Costs Assessment Application brought under r. 743A of the UCPR;
- costs of and incidental to the Review Application on an indemnity basis to be assessed, if not agreed; and
- costs otherwise of and incidental to the proceedings on a standard basis to be assessed, if not agreed.
- Given the history of this matter, it is trite but necessary to observe that where costs orders have already been made in these proceedings, those costs will not be caught by any orders made today.
- I have had regard to the reasons of the High Court in their recent decision of Bell Lawyers Pty Ltd v Pentelow wherein the common law ‘Chorley exception’ was held not to apply in Australia:
“The Chorley exception has rightly been described by this Court as ‘anomalous’... Dealing with the matter more broadly, however, the Chorley exception is not only anomalous, it is an affront to the fundamental value of equality of all persons before the law… Accordingly, it should not recognised as part of the common law of Australia.”
- In obiter, the majority decision of the High Court distinguished between incorporated legal practices and those where the incorporated practice was, in truth, a sole practitioner operating through a corporate structure of which the practitioner is the sole director and shareholder, relevantly stating:
“Where a … corporate litigant has been represented by an employed solicitor, the courts have proceeded on the footing that the actual cost to the … corporation of the legal services provided by its employed solicitor would not exceed, in any substantial amount, the sum recoverable by it for professional legal costs.
- It is relevant to note that Mr Billimoria, the solicitor who has had the conduct of these proceedings for the plaintiff is an employed solicitor and is neither a director nor shareholder of it. Accordingly I find that the plaintiff is entitled to its costs as the successful party in these proceedings.
- I accept the plaintiff’s submission that the defendant has, for the most part, been legally represented. Accordingly I agree that the principles espoused in Re Sebasio (No. 2) are of limited relevance to my assessment of whether costs should be awarded on an indemnity basis rather than the standard basis. Whilst I have previously found that the Review Application was doomed to fail, orders for costs are to compensate the successful party, not to punish the unsuccessful one. I am not satisfied given the overall complexity of the matter, and having regard to the consumer focus of the Legal Profession Act 2007, that the circumstances of this matter are such that they give rise to an award of costs on an indemnity basis. Accordingly, whilst I will award the plaintiff its costs, they will be on a standard basis only.
- Accordingly, I order:
- judgment for the plaintiff in the sum of $78,425.06 plus interest in the sum of $1,372.79;
- no order as to costs of and incidental to the interlocutory Costs Assessment Application filed 13 November 2019;
- the defendant otherwise pay the plaintiff’s costs of and incidental to the proceedings, including the Review Application, on a standard basis to be assessed, if not agreed.
Affidavit of defendant filed 10 December 2019; Court doc no. 12 at .
Affidavit of defendant filed 10 December 2019; Court doc no. 12 at  and Exhibit ‘MLC-2’.
Clause 5 of the Costs Agreement.
The letter from the plaintiff to the defendant dated 21 January 2019 under the heading ‘Moving Forward’ per cl. 1.2 of the Costs Agreement. See also cl. 14.2 and 14.3 of the Costs Agreement.
Clause 13.1 of the Costs Agreement.
Defence filed 20 November 2019; Court doc no. 12 at [3(a)]; See also affidavit of J Billimoria filed 12 December 2019 at  – .
Clauses 11, 13.2 and 14.2 - 14.4 (inc) of the Costs Agreement.
 (2019) 372 ALR 555;  HCA 29.
Supra at .
Supra at .
Affidavit of J Billimoria filed 29 October 2020; Court doc no. 39 at .
 QSC 312.
- Published Case Name:
Jones Leach Lawyers Pty Ltd ACN 164 332 647 v Crosby (No 2.)
- Shortened Case Name:
Jones Leach Lawyers Pty Ltd ACN 164 332 647 v Crosby (No 2.)
 QMC 15
30 Oct 2020