Pott v Clayton Utz[2012] QSC 167

SUPREME COURT OF QUEENSLAND

[1] By Originating Application filed 30 March 2012, the applicant seeks orders in relation to legal costs charged by the respondent in acting for the applicant’s late husband and the applicant, as executor of his estate, in legal proceedings.

[2] At the hearing of the application, the applicant’s claim for a declaration in accordance with paragraph 1 of the Originating Application was dismissed.  The respondent also conceded that, except in relation to eight identified invoices, the applicant is entitled to further relief in relation to fees issued to her by the respondent.  The respondent proposed a series of Orders by which that process could effectively progress.  The applicant accepted those proposed orders provided a practical progression of that aspect of the applicant’s application.

[3] The remaining issue for determination relates to the eight identified invoices.  The applicant seeks similar further relief in respect of these invoices.  The respondent contends the applicant is not entitled to any further relief in relation to these invoices.  Each of these invoices was the subject of earlier challenges by the applicant, and subsequent agreements between the applicant and the respondent for a reduction in the amount to be paid in relation to those invoices.  The respondent submits that in those circumstances the applicant has not discharged her onus to establish a basis to challenge the invoices in question.

[4] The background to the application may be summarised briefly.  The applicant’s late husband, Mr Pott, was a defendant in Supreme Court proceedings commenced in 1998.  In 2004, he retained the respondent to act on his behalf in that litigation.  A costs agreement was entered into in 2004.  Thereafter, invoices were sent from time to time by the respondent to Mr Pott for legal work performed on his behalf.

[5] Mr Pott died in 2008.  Following his death, the respondent issued an invoice dated 31 July 2008 for work to date.

[6] In September 2008, the applicant, as executor of Mr Pott’s estate, instructed the respondent to act for the estate.  On 15 October 2008, the applicant, as executor of Mr Pott’s estate, entered into a costs agreement with the respondent.  Thereafter, invoices were sent by the respondent to the applicant for legal work performed on behalf of the estate.

[7] In July 2010, the applicant raised concerns about invoices issued by the respondent in February, March, April and May 2010.  These invoices represent four of the eight invoices in dispute.  A meeting was held between the applicant and representatives of the respondent on 16 July 2010.  Thereafter, correspondence was forwarded by the applicant identifying specific issues of concern in relation to these four invoices.  These concerns were responded to by the respondent.  Ultimately, the respondent agreed to issue credit notes in respect of the disputed amounts.  At that time, the respondent sought confirmation that the applicant was “otherwise satisfied” with the accounts rendered to date and that no further issues in respect of those accounts would be raised in the future.  In response, the applicant, by email dated 25 August 2010, confirmed satisfaction with the accounts rendered to date and that “there are no other issues with these accounts”. 

[8] The respondent issued the remaining four invoices the subject of the application, in September, October, November and December 2010.  In February 2011, the applicant raised queries in respect of those four invoices.  These queries, which were specific and detailed, were answered by the respondent in correspondence.  The respondent also provided documents which had been requested by the applicant as part of her query.

[9] Ultimately, a meeting was held in relation to the outstanding invoices.  At that meeting, the respondent offered a reduction in the fees charged in those invoices.  Subsequent to that meeting, the applicant confirmed by email that she accepted the offer of the respondent, although there was to be an alteration in respect of the proposed method of crediting the reduction in question.

Legislative scheme

[10] The Legal Profession Act 2007 (Qld) provides a procedure by which a client may request an itemised bill from a legal practitioner.  Relevantly, a person who is entitled to apply for an assessment of legal costs in respect of a bill given in the form of a lump sum bill may request the law practice give an itemised bill.[1]  An itemised bill is a bill stating, in detail, how the legal costs are made up in a way that would allow the legal costs to be assessed under the Act.[2] 

[11] To satisfy these requirements, a bill must contain such detail as will enable the client to make up his or her mind on the subject of assessment, and so as to enable those advising the client to advise effectively on whether assessment is desirable or not.[3]  This requirement is not to be determined in a vacuum.  The sufficiency of a bill must be assessed in the context of the knowledge of the client.  As such, the test is not that another solicitor should be able to look at the bill and see on its face all requisite information in order to enable an assessment of whether the charges were reasonable.  The test is whether the information in the bill, supplemented by what is subjectively known to the client, enables the client, with advice, to take an informed decision whether or not to exercise a right of assessment.[4]

[12] The relevant principles have recently been considered by Applegarth J in Tabtill No 2 Pty Ltd & Ors v DLA Phillips Fox (a firm) & Anor.[5]  After referring to the relevant principles, as considered by Reid DCJ in Clayton Utz Lawyers v P & W Enterprises Pty Ltd,[6] Applegarth J observed that an applicant seeking to establish an entitlement to an itemised bill pursuant to s 332 of the Legal Profession Act 2007 (Qld), and the making of directions pursuant to s 743C, carries an onus to demonstrate that the legal practice has not provided an itemised bill in accordance with the statutory entitlement.[7]

[13] It is this onus the respondent contends the applicant has not satisfied in the present case.  The applicant swears in her affidavit material to a concern that Mr Pott’s estate may have been overcharged for work undertaken by the respondent and, further, that she has received advice that further particularisation is required before any reasonable assessment could be made as to whether the accounts ought to be challenged in the circumstances.  There is no further elaboration of particular concerns.  The respondent contends these stated concerns are insufficient, having regard to the test to be applied as to the sufficiency of the itemised bill. 

[14] The applicant contends the applicant has discharged this onus.  Her previous queries were raised without the assistance of independent legal advice or advice from a suitably qualified costs assessor.  It is contended that in those circumstances the queries cannot properly be seen as constituting a detailed and considered analysis of issues of concern. 

[15] The fact the applicant has previously raised detailed queries in relation to the contents of the eight invoices remaining in dispute assumes particular significance in the present case.  That significance stems from the detailed responses provided by the respondent to the applicant’s queries.  These responses were not only specific, they were accompanied by an acknowledgement that adjustments should be made.  The responses provided by the respondent to those detailed queries form part of what is subjectively known to the client. 

[16] Having considered the detailed email communications forwarded by the applicant to the respondent in respect of the eight invoices remaining in dispute, and the detailed responses provided by the respondent in relation thereto, there is substance in the respondent’s contention that to satisfy the requisite onus imposed upon the applicant, namely, that the information received by her in respect of each of the eight invoices remaining in dispute is inadequate to make an informed decision whether or not to exercise the right to seek assessment after taking advice on the subject – the applicant must do more than raise a general concern.  It is insufficient for the applicant, in seeking to discharge the onus required of her under the Act, to simply swear to a general concern as to overcharging and of advice that further information is required to allow a proper assessment of those invoices.  More specific detail as to the basis for her concern, notwithstanding earlier acceptance of agreed reductions in these invoices, is required to satisfy the onus.

[17] The applicant has not discharged her onus in relation to establishing an entitlement to an itemised bill in respect of the eight invoices remaining in dispute.  The application is dismissed in relation to each of those invoices.

[18] The parties have reached agreement in relation to the steps to be taken in respect of the remaining invoices the subject of the application.  The parties have also agreed that the costs of the application ought to be reserved. 

[19] The parties are to prepare minutes of orders in accordance with these reasons, and my earlier reasons.