Mishra v Bennett & Philp Pty Ltd
[2021] QSC 158
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- Unreported Judgment
- Mishra v Bennett & Philp Pty Ltd[2021] QSC 158
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Mishra v Bennett & Philp Pty Ltd[2021] QSC 158
Reported at (2021) 8 QR 306
Mishra v Bennett & Philp Pty Ltd[2021] QSC 158
Reported at (2021) 8 QR 306
SUPREME COURT OF QUEENSLAND
CITATION: | Mishra & Anor v Bennett & Philp Pty Ltd [2021] QSC 158 |
PARTIES: | ANIL CHAND MISHRA and WISE INVESTMENTS PTY LTD ACN 143 656 848 (applicants) v BENNETT & PHILP PTY LTD ACN 132 284 372 (respondent) |
FILE NO: | BS 11092 of 2020 |
DIVISION: | Trial Division |
DELIVERED ON: | 25 June 2021 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 11 March 2021 |
JUDGE: | Holmes CJ |
ORDERS: |
|
CATCHWORDS: | PROFESSIONS AND TRADES – LAWYERS – REMUNERATION – TAXATION AND ASSESSMENT OF COSTS – APPLICATIONS AND REFERENCES – where the applicants applied pursuant to s 335(1) of the Legal Profession Act 2007 (“the Act”) for an assessment of costs charged in a number of bills delivered to them by the respondent, their former solicitor, in respect of trial and appeal proceedings – where s 335(5) of the Act requires that an application for an assessment of costs be made within 12 months after the bill was given to the client – where the respondent held a general retainer to act in the proceedings – where the respondent delivered its last bill in respect of its preparation for and representation of the applicants in the trial proceedings on 31 May 2018, after the trial hearing concluded – where some months later the applicants instructed the respondent to act on their behalf to make costs submissions and subsequently to conduct an appeal in respect of the same matter – where the respondent’s last bill was delivered to the applicants on 17 October 2019 – where this application for an assessment of costs was filed on 16 October 2020 – where the respondent contends that the applicants are out of time to seek an assessment of those costs which relate to the trial proceedings – whether the bill delivered on 31 May 2018 was an interim bill or a final bill – whether the applicants are out of time within which to seek an assessment of the costs contained in the bills rendered up to and including the 31 May 2018 bill – whether there were separate retainers for the work done prior to and at trial and that done subsequently – whether the conclusion of the trial hearing represented a ‘natural break” in the proceedings – whether, if the applicants are out of time, the court should exercise the discretion conferred on it by s 335(6) of the Act in deciding to deal with the application for assessment of costs PROFESSIONS AND TRADES – LAWYERS – REMUNERATION – TAXATION AND ASSESSMENT OF COSTS – MATTERS RELATING TO BILL – where r 743A(5) of the Uniform Civil Procedure Rules 1999 requires that a party applying for a costs assessment state on affidavit whether he or she disputes or requires assessment of all or part of the costs, and, if all or part are disputed, the grounds on which their amount, or the liability to pay them, is disputed – where the respondent argues that the application is deficient because the affidavit does not identify what part of the costs are to be assessed or state “proper” grounds of dispute substantiated by evidence – whether the affidavit meets the requirements of r 743A(5) Legal Profession Act 2007 (Qld), s 333, s 335 Uniform Civil Procedure Rules 1999 (Qld), r 742, r 743A(5), r 743G Challen v Golder Associates Pty Ltd [2012] QCA 307, considered Cupo & Anor v Anderssen Lawyers [2015] QSC 202, cited Dart Mining NL v Foster Nicholson Jones [2016] VSC 836, cited Mango Boulevard Pty Ltd v Whitton [2019] FCA 490, cited Radich v Kenway & Anor [2014] QCA 301, considered Radich v Kenway & Anor [2014] QDC 60, considered Re: Lynch & Co Bill of Costs [2000] QSC 3, cited Re Romer & Haslam [1893] 2 QB 286, cited Robertson v Boe Williams Lawyers [2013] QCA 252, considered Tabtill No. 2 Pty Ltd & Ors v DLA Phillips Fox (a firm) & Anor [2012] QSC 115, considered Turner v Mitchells Solicitors [2011] QDC 61, considered |
COUNSEL: | G J Robinson for the applicants P D Hay for the respondent |
SOLICITORS: | Alex Mackay & Co for the applicants Bennett & Philp Pty Ltd for the respondent |
- [1]The applicants, Wise Investments Pty Ltd and its director, secretary and shareholder, Mr Anil Chand Mishra, applied pursuant to s 335(1) of the Legal Profession Act 2007 for an assessment of costs charged in 33 bills delivered to them by the respondent, their former solicitor, between 14 April 2016 and 17 October 2019, in respect of proceedings in the trial division of this court and on appeal in the Court of Appeal.
- [2]Section 335(1) appears in pt 3.4 of the Act, which deals with costs disclosure and assessment. It permits a recipient of legal services to
“…apply for an assessment of the whole or any part of legal costs”.
Section 335(10) requires that a costs application[1] be made in the way provided for by the Uniform Civil Procedure Rules 1999, and s 335(5) that it be made
“…within 12 months after –
- (a)the bill was given, or the request for payment was made, to the client…”
However, s 335(6) permits the court to deal with an application after “considering the reasons for delay”, provided that the client is not “a sophisticated client”.[2]
- [3]Two issues arise. The first, which concerns bills delivered in relation to the trial division proceeding, is whether the applicants have brought the application within time, or if not, whether the court should exercise its discretion to deal with the application in any event. The second, in relation to all the respondent’s bills, is whether Mr Mishra’s affidavit, filed on behalf of the applicants, meets the requirements of r 743A(5) of the Uniform Civil Procedure Rules; which are that the applicant state whether he or she disputes or requires assessment of all or part of the costs, and, if all or part are disputed, the grounds on which their amount, or the liability to pay them, is disputed.
The respondent’s billing of the applicants
- [4]Two witnesses swore affidavits on behalf of the respondent: Mr Lambros, a solicitor and director of the respondent, and Mr Thorburn, a solicitor employed by it at associate level. Their evidence was not challenged. The history of events as it emerges from their affidavits is as follows. According to Mr Lambros, on 24 March 2016, Mr Mishra engaged the respondent to take a Supreme Court action to trial. Some days later, the respondent furnished a costs agreement which was signed by Mr Mishra on behalf of the applicants. It described the scope of the work as
“[to] act in Supreme Court proceeding No. 8216/2014”.
The costs agreement set out the hourly rates of charging. In particular, they were, for directors, $495 per hour plus GST and for associates $340 per hour plus GST. The agreement provided for the respondent to increase its hourly rates on giving 30 days’ notice to the applicants.
- [5]The respondent delivered a number of bills to the applicants over the course of the proceedings.[3] Mr Lambros in his affidavit said that the directors’ hourly rate increased to $525 per hour as of 1 July 2017, and Mr Thorburn’s (as an associate) to $395 per hour plus GST.[4] He deposed that those rates remained unchanged throughout the matter apart from an “uplift” applied to the rates charged on the appeal. (That does not appear quite correct, as will shortly appear.) In late March 2018, the applicants and the respondent entered a deed by which legal fees payable were to be treated as an advance on a loan guaranteed by a company associated with Mr Mishra and secured by a mortgage of a property in New South Wales. The respondent was, however, unable to register the mortgage because Mr Mishra had given the certificate of title to another lender.
- [6]The trial took place over 8 days in April 2018, and the respondent’s professional fees and most of the disbursements relating to it were charged in bills dated 27 April 2018 and 1 May 2018. Some remaining trial-related disbursements were itemised in a bill dated 31 May 2018. A further bill was rendered on 29 June 2018, but that, Mr Lambros deposed, related to work undertaken in respect of Mr Mishra’s family law proceedings and matters in relation to the loan and mortgage; entries for which were also contained in the 31 May bill. (The work in relation to the family law proceedings seems to have been directed to obtaining the release of sufficient funds from Mr Mishra’s assets to meet the costs of the Supreme Court action.)
- [7]The trial judge delivered his reasons for judgment on 4 October 2018. By email that day, Mr Thorburn advised Mr Mishra that he would be required to provide costs submissions by 19 October, and that an advice on appeal prospects should be sought. In a telephone conversation on 9 October 2018, Mr Mishra gave instructions for the preparation of costs submissions. The respondent then prepared submissions on costs and the form of orders, for which it rendered bills in November and December 2018. The entries in the November bill which relate to preparation for the giving of the judgment are readily distinguished; they begin with charges for telephone calls made on 2 October 2018. That invoice also contains entries relating to the family law proceedings. In the November bill, Mr Lambros’ time began to be charged at $535 per hour, which is at odds with what is contained in his affidavit and is unexplained. It had been agreed that Mr Mishra would pay all the respondent’s fees in respect of the work for the trial by June 2018, but he did not in fact do so until November 2018, when an appeal was in contemplation. The trial judge made final orders in the trial proceedings, including costs orders, on 17 January 2019. The respondent prepared for and attended the costs hearing on that day, billing for those services on 17 October 2019.
- [8]On 31 January 2019, the applicants gave the respondent instructions to act on their behalf in an appeal against the decision. The respondent agreed to wait for payment of its fees for the appeal, subject to increasing its charging rates by 20% and registering the mortgage it already held by way of security for its fees, the certificate of title having been retrieved. (However, caveats had by then been lodged which prevented the registration of the mortgage.) On 9 July 2019 the respondent gave notice that it would now be charging for directors’ work at $545 per hour and for associates at $420 per hour. The appeal was heard on 23 July 2019. The respondent delivered its last invoice to the applicant on 17 October 2019. That bill charged for work done from 3 July 2019 at the higher rates announced in the letter of 9 July 2019 and in addition added 25% to the total amount of the fees charged, rather than the agreed 20%. On 2 February 2020, the respondent’s fees were paid in full and the mortgage was discharged.
- [9]In his affidavit, Mr Mishra (who is a practising accountant) expressed his understanding that there was only one retainer governing the entirety of the work, the last bill for which was that of 17 October 2019. He did not articulate any basis for that understanding and at this hearing there was no dispute, at least, that the work done for the trial and that for the appeal were the subject of separate retainers. Under cross-examination, Mr Mishra conceded that between the end of the trial in April 2018 and the delivery of the judgment, there was no work for the respondent to do in the proceedings.
- [10]On 9 September 2020, Mr Mishra gave instructions to his present solicitors to write to the respondent, advising that the applicants
“…would now like to ascertain whether the fees charged to them by your firm for work done in the abovementioned matter are proper in all the circumstances”.
That was, to the best of his recall, the first occasion on which he had sought advice about the respondent’s charges. This application was filed on 16 October 2020, just before the expiry of 12 months from the respondent’s last invoice. Soon after, the applicants’ new solicitors collected the applicants’ file from the respondents.
Statutory provisions relevant to an application for assessment of costs
- [11]Division 7 of pt 3.4 of the Legal Profession Act deals with costs assessment. There is no specific provision for the court to order an assessment, although it follows from the existence of s 335(1) that the power to do so exists.[5] Nor are there criteria to be applied before doing so. The only requirements of a costs application made by a client (other than a sophisticated client) are that it be made within the specified 12 month time period, or a longer period if the court decides to deal with it in the exercise of its discretion, and in the way provided for by the Uniform Civil Procedure Rules.
- [12]Chapter 17A pt 4 of the Rules provides for assessment of costs under the Legal Profession Act. Rule 743A deals with applications for costs assessment and requires that the application be made in the appropriate court (which, in this case, involving costs in the region of $792,000, is the Supreme Court) in the approved form and with the names of any persons entitled to be notified; that, if practicable, it nominate a costs assessor and his or her hourly rate; and that it be accompanied by an affidavit which sets out the matters in r 743A(5), the nominated costs assessor’s consent and the prescribed fees, and exhibits any itemised bill, or, if there is none, provides the applicant’s best information as to the costs to be assessed. The requirements in r 743A(5) are to:
“(a)state whether the applicant disputes or requires assessment of all or what part of the costs; and
(b)if the applicant disputes all or part of the costs, state the grounds on which the applicant disputes the amount of the costs or liability to pay them.”
- [13]Rule 743G enables the holding of a directions hearing on an application for a costs assessment:
743GDirections hearing
- (1)The relevant court may hold a directions hearing in relation to an application for a costs assessment.
- (2)At a directions hearing, the relevant court may consider the following matters—
- (a)whether the application has been properly filed and served;
- (b)whether notice has been given as required under the Legal Profession Act 2007, section 339(1);
- (c)whether it is appropriate to refer the application to mediation;
- (d)whether it is appropriate for any question to be tried before the costs are assessed, including, for example—
- (i)whether a person claimed to be liable to pay costs is liable to pay those costs; and
- (ii)whether any costs agreement relied on by the lawyer concerned is void; and
- (iii)whether the lawyer concerned was negligent; and
- (iv)whether the lawyer concerned was in breach of the contract of retainer; and
- (v)whether the lawyer concerned acted without the instructions of, or contrary to the instructions of, the client;
- (e)whether anything else should be done before the costs are assessed.
- (3)Also, the relevant court may—
- (a)if the grounds of dispute relate only to the amount of costs—order that a particular costs assessor be appointed to carry out the costs assessment; or
- (b)otherwise—order that the application be heard by the relevant court.
The contentions as to whether the application is in time
- [14]There was no dispute that the application, so far as it seeks an assessment of the costs associated with the appeal, is within time. The respondent contends, however, that the applicants are out of time to seek an assessment of those costs which relate to the trial proceedings. After the conclusion of the trial on 18 April 2018, it says, it held no instructions to carry out any further work in the trial proceedings and there was then a “natural break” in the litigation, no more work being carried out for another five and a half months. The final bill in respect of the retainer to act in the trial proceedings, on their argument, was delivered on 31 May 2018.
- [15]The applicants, on the other hand, argue that the 31 May bill was an interim bill. The bill delivered on 17 October 2019, after the appeal, contained charges made for activities on 16 and 17 January 2019 in relation to the orders to be made by the trial judge; that was the final bill for the trial (as well as the appeal). It followed, it was argued, that the application for an assessment was brought within a period of 12 months of the final bill in relation to both trial and appeal.
Interim or final bill?
- [16]The first question, then, is how the 31 May 2018 bill ought to be characterised. Section 333(1) of the Legal Profession Act permits delivery of an interim bill which covers only part of the services the subject of the relevant retainer. Section 333(2) provides that costs which are the subject of an interim bill may be assessed either at the time it is delivered, “or at the time of the final bill”. In Turner v Mitchells Solicitors,[6] McGill DCJ considered s 333(2) and concluded that it enabled a costs application to be made either at the time an interim bill was delivered or at the time the final bill was rendered, with the limitation period running accordingly. His Honour went on to make this observation:
“There can be a situation where a costs agreement can be entered into to cover particular legal work, and any other legal work which the solicitor is instructed to carry out. If the particular legal work is then completed, and there have been no further instructions, then the legal services the solicitor is retained to provide have been performed. If a bill is sent at that point it is a final bill, and it does not become an interim bill simply because at some later stage further instructions are given for additional legal services to be provided to which the earlier costs agreement also applies.”[7]
He cited for this proposition the 1903 English case of Re Romer & Haslam,[8] in which the Court of Appeal recognised that, other than in ordinary common law actions (which were then typically of short duration), there might be “natural breaks” justifying the delivery of a final bill for the work done up to such a break.
- [17]Judge McGill’s construction of s 333(2) was considered and endorsed by the Court of Appeal in Challen v Golder Associates Pty Ltd.[9] The court also considered in that case an argument that every bill a solicitor had issued for work undertaken in a proceeding over a number of years was a final bill. In that context, it was said that
“… the term ‘final bill’ must be the last bill rendered by the law practice for the legal services the law practice was retained to provide”.[10]
That, of course, leads to the question of what were the legal services that the respondent was retained to provide.
- [18]In Challen, the observation was made that the costs agreement was relevant in identifying the final bill because it specified the extent of the retainer.[11] At first blush, that would seem in the present case to suggest that one should regard the entirety of the work in the trial division proceeding as the subject of the relevant retainer, since the costs agreement described the work as acting in the proceeding. However, a number of judges sitting at first instance have taken the approach that the existence of a costs agreement containing a broad description of work to be undertaken in a proceeding does not preclude the existence of specific retainers in relation to distinct services to be provided within the larger retainer.
- [19]
“…distinctly identifiable parts of the retainer would constitute a separate retainer for the purposes of billing and if a ‘natural break’ occurred in the conduct of the litigation a bill could be delivered up to the time of the break”,[13]
applied it to the determination of whether questions of taxation in the case before him (involving the Legal Practitioners Act 1995) should be determined on the basis that there was effectively a single bill of costs for work performed pursuant to a single retainer or, alternatively, on the basis that there were three distinct bills. His Honour, concluding that there were in the case before him no distinct services being rendered and no “natural break” in the litigation justifying the delivery of separate bills, proceeded on the first basis.
- [20]In Tabtill No. 2 Pty Ltd & Ors v DLA Phillips Fox (a firm) & Anor,[14] Applegarth J was dealing with costs applications relating to work done under a client agreement for legal services which were described as acting in two specified Supreme Court proceedings and “associated disputes”. The trial of one of the proceedings having concluded in December 2009, bills had been sent then for the trial costs. After judgment was handed down nine months later, the solicitor was retained to act in respect of costs arguments, with further bills being sent between then and July 2011 for that work. The costs application was made in March 2012. Applegarth J applied the principle which Chesterman J had identified in Re: Lynch & Co Bill of Costs and McGill DCJ’s approach in Turner v Mitchells Solicitors, finding that at the time the trial ended, there was a “natural break” in the litigation and, while there was a general retainer to undertake the legal work required for the proceeding, specific instructions were given in relation to preparation for representation of the applicants at the trial. Those legal services having been performed, the bill sent once the trial was concluded was a final bill, notwithstanding that further instructions were likely to be given (and were given) in relation to preparation for the delivery of judgment and costs arguments following it.
- [21]Tabtill No. 2 was referred to in Challen as having applied Turner v Mitchells Solicitors, without further comment.[15] In Dart Mining NL v Foster Nicholson Jones[16] Wood AsJ in the Victorian Supreme Court referred to Applegarth J’s statement in Tabtill No. 2 that specific retainers the subject of specific instructions might exist within a broader general retainer; in the case before him, his Honour found, there were discrete issues giving rise to separate retainers grouped under a general retainer agreement. In Mango Boulevard Pty Ltd v Whitton,[17] Rangiah J referred to Tabtill No. 2 in accepting that a single costs agreement, depending on its terms, could apply to more than one retainer for a barrister to provide legal services.[18]
- [22]In the interests of comity, it seems to me that I should accept that instructions to prepare for, and represent clients at, trial may constitute a specific retainer within a larger retainer to act in the proceedings and that a bill given for that work at a natural break in the proceeding, in the absence of further instructions, should be regarded as final. Here, as at 31 May 2018, the specific retainer to prepare for and provide representation at the trial was complete and the respondent had no instructions to perform further work in that regard. Nothing more was required or done until 2 October 2018, when delivery of judgment was imminent. The bill rendered in May 2018 was a final bill.
The competing positions as to an extension of time
- [23]The applicants are, therefore, out of time within which to seek an assessment of the costs contained in the 31 May 2018 bill. That then raises the question of whether the discretion conferred by s 335(6) should be exercised in their favour.
- [24]Mr Mishra in his affidavit deposed that he had “an overriding concern that [he had] been grossly overcharged”. However, he had not raised his concerns in relation to bills that he received from time to time from the respondent, because he apprehended that if he complained it would affect its representation of him and the company, and he also feared that until he had made full payment of the respondent’s invoices (which he did in early March 2020), he was in a vulnerable position because he had signed a deed of loan and mortgage in favour of the respondent.
- [25]Asked in cross-examination why he did not engage new solicitors for the appeal proceedings, Mr Mishra said that although he had concerns about the respondent’s charging, he did not consider he could do so. He accepted that prior to asking him to enter the loan and provide the mortgage security in March 2018, the respondent had acted for him for two years notwithstanding his difficulties in paying its bills. It allowed his fees to remain outstanding after the trial, until they were paid in November 2018, without taking any steps to enforce its mortgage. He acknowledged that the respondent had in fact gone out of its way to assist him in difficult circumstances; nonetheless, he had a concern as to whether his representation would be compromised by raising the propriety of the fees being charged.
- [26]A little inconsistently with that position, counsel for the applicants submitted that Mr Mishra had in fact raised concerns about the respondent’s charging. When, having agreed to defer payment of its fees until after the appeal, the respondent proposed a 20% increase in its charging rate, he expressed a preference for it to charge interest on the amounts outstanding instead. However, when Mr Lambros said he saw no prospect of the respondent’s agreeing, he accepted the proposal, saying that he had “no choice”. And despite that agreement, counsel pointed out, in the October 2019 bill, the respondent had charged an additional 25%, notwithstanding that it had indicated that the increase would be 20%; although it had subsequently refunded the overcharge. That showed that there could not be confidence in the respondent’s charging and that justice required that the bills be assessed.
- [27]Mr Lambros deposed that Mr Mishra had at various times negotiated with the respondent in relation to the payment of fees, without making any complaint about their quantum. He had also sought to negotiate with the respondent as to the terms on which it would carry out the work entailed in the appeal of the trial judge’s decision. The respondent was now in difficulty in having to respond to the applicants’ broadly expressed complaints because staff members who had contributed to the work had left its employment, and that, combined with the passage of time, made it very difficult to reconstruct the work performed in the matter.
- [28]By way of submission, the respondent pointed out that Mr Mishra was a professional person who was capable, at least, of negotiating means of payment. If he genuinely had some concern about the amounts he was being charged, he could simply have sought clarification. The respondent had been accommodating to him in various ways and he had no reason to suppose that making such a query would compromise its representation of the applicants. Mr Mishra’s professed long-standing concern as to overcharging was not credible in light of his inaction and the form of his solicitors’ inquiry in September 2020, saying that the applicants
“would now like to ascertain whether the fees….[were]…proper”,
which suggested that his interest was both recent and tentative.
- [29]There was no reason for the applicants not to make a costs application once the appeal was completed; if they had done so, the respondent could not have proceeded with recovery and there would have been no risk of the mortgage being enforced. No discretion should be exercised in the applicants’ favour because they had offered no adequate explanation for their delay, and the respondent would be prejudiced by an assessment conducted out of time because of the lapse of time and the departure from its employment of some of the staff involved in the work.
Whether the discretion to extend time should be exercised
- [30]The discretion accorded to the court by s 335(6) differs in its terms from the equivalent provision in the uniform legislation for regulation of the legal profession adopted in some states. The model provision in that legislation makes the discretion exercisable if a judge determines, after having regard to the delay and the reasons for the delay, that it is “just and fair” for the application to be dealt with out of time.[19] Notwithstanding the absence in s 335(6) of any reference to justice or prejudice, one can infer that the rationale for the time limit is disadvantage to the opposing side caused by the effluxion of time in circumstances where it has not been put on timely notice of the application; and any exercise of discretion will ordinarily seek to achieve a just outcome. But the fact that the Queensland provision specifies consideration only of the reasons for delay, not its effect, suggests that the focus is intended to be more on the difficulties faced by the applicant in making the application than those which will face the respondent should it be granted. That is consistent with the character of pt 3.4 of the Legal Profession Act as consumer protection legislation.
- [31]I do not think that the mistaken charging of a 25% fee increase in the October 2019 bill, preceded by a letter expressing the intention to charge at that rate, rather than the agreed 20%, provides a very powerful basis for supposing that all the respondent’s bills should be regarded as so suspect that justice requires their assessment. As to the reasons for delay, taking the best view for the applicants, it is plausible that Mr Mishra might have been hesitant to raise complaints about the respondent’s charging, although forced by his financial circumstances to ask it to accept different arrangements for payment. After the trial had concluded, he was in the position of having given the respondent a mortgage, which, at least as far as he knew, it might seek to enforce. But nothing prevented him from seeking advice then. Had he done so, he would have been told that the respondent could not commence proceedings to recover the costs until the completion of the costs assessment.[20]
- [32]However that may be, as at the beginning of February 2020, the applicants had paid the respondent and were entitled to a discharge of the mortgage. Yet Mr Mishra identified no concerns from that point which might explain the further delay until September 2020, when he first raised in general terms with the respondent his qualms about its fees, not filing the costs application until a month later. (Mr Mishra’s expressed preference in early 2019 for the charging of interest rather than a 20% increase in the charging rate seems to me to have been more an attempt to arrive at a more favourable payment arrangement than an expression of concern about over-charging.) For the period from February 2020, when the costs had been paid, until October 2020 when the present application was filed, there is simply no explanation for the delay. The only available conclusion is that for some reason which he has not articulated, Mr Mishra decided well out of time to make the application.
- [33]As to prejudice, the departure of some staff members from the respondent’s employ seems unlikely to be of major significance, given that Mr Lambros and Mr Thorburn, who seem principally to have been engaged in the matter, remain available. (The applicants provided a schedule which indicated that those solicitors had between them undertaken about 97% of the items of work charged.) There is, however, undoubtedly some general prejudice in attempting to account for tasks performed and fees charged for them up to five years later. But more important is the inadequacy of the reasons offered for the delay in bringing the application. That unexplained delay leads me to conclude that the r 335(6) discretion should not be exercised in the applicants’ favour.
The contentions as to whether the affidavit meets the requirements of r 743A(5)
- [34]No order, it follows, will be made for assessment of the applicants’ costs in respect of the bills up to and including that of 31 May 2018. The remaining bills delivered after that date, were, the respondent conceded, within time under s 335(5); they are properly regarded as interim bills, with the exception of the final bill delivered on 19 October 2019. However, the respondent argued that assessment should not be ordered of those bills because the application and supporting affidavit were deficient.
- [35]Mr Mishra in his affidavit asserts that he requires “an assessment of all the costs charged by the Respondent” on grounds which
“…include:
a.duplication of effort by the various charging fee-earners of the Respondent;
b.duplication of effort between the Respondent and Counsel retained by the Respondent on my behalf;
c. confusion as regards the hourly rates charged;
d.over-servicing of the Respondent;
e. over-reliance on Counsel; and
f.excessive Counsel’s fees.”
He was cross-examined about those grounds and conceded that without having access to the file at the time he filed the costs application and his supporting affidavit, he did not know whether any of them existed.
- [36]The respondent argued that the application did not meet the requirements of r 743A(5) because it did not identify what part of the costs are to be assessed or the grounds on which an assessment is sought. Not all costs could rationally require assessment, because they would include disbursements such as court fees and transcript fees and counsel’s fees at trial. That failure to state what part of the costs the applicants actually wished to have assessed, it was contended, was oppressive to the respondent and offended r 5 of the Uniform Civil Procedure Rules, which requires parties to proceed expeditiously.
- [37]Secondly (it was submitted), Mr Mishra’s affidavit did no more than make assertions, unsupported by evidence, amounting to allegations of unsatisfactory professional conduct or professional misconduct. An assessment was not granted of right; an evidentiary basis had to be established which would warrant it. The mere making of assertions was not sufficient; there had to be “proper grounds”. The decision of the Court of Appeal in Robertson v Boe Williams Lawyers[21] was relied on for those propositions. Only if proper grounds were stated could the respondent properly assess whether to oppose the application and on what basis. The inadequacy of the purported statement of grounds had prejudiced the respondent’s ability to respond to the application.
- [38]The respondent cited the first instance judgment in Radich v Kenway & Anor[22] (the applicants relied on the appellate decision) for the proposition that the requirements of r 743A(5) were designed to inform the respondent and the court of the factual basis on which assessment was sought. Those requirements were consistent with the principles of natural justice, which Reid DCJ in Pott v Clayton Utz[23] had said applied to the process by which the court determined the scope of any assessment as well as to the assessment itself.
- [39]By way of further support for its argument, the respondent adverted to r 742 of the Rules, which permits applications for review of costs assessors’ decisions. Rule 742(5)(b) provides:
(5)On a review, unless the court directs otherwise—
…
- (b)a party may not raise any ground of objection not stated in the application for assessment or a notice of objection or raised before the costs assessor.
It was significant, the respondent submitted, that the sub-rule precluded review of an assessment on a ground of objection not stated in, inter alia, the application for assessment, without the leave of the court. The efficacy of the rule depended, it followed, on the scope of the grounds being established with adequate clarity and particularity.
- [40]The applicants accepted that the grounds stated in a costs application had to have reasonable substance, but maintained that r 743A(5) did not require an applicant to be able to detail particular objections to particular items in the bill. This was consumer protection legislation, operating in an obscure area of the law with which lay clients were most unlikely to be familiar. In Radich v Kenway & Anor,[24] the Court of Appeal was considering a complaint of a costs assessor’s approach in assessing all items in the bills of which assessment was sought, rather than only those in respect of which specific objection had been made. The court held that the assessment was not restricted to those items specifically raised by the client, although natural justice required that the solicitors be given the opportunity to be heard in relation to all matters.[25] That was, the applicants said, a recognition that applicants would not be in a position to provide precise details of objections; once the court had determined there was a proper basis for ordering assessment, it was then for the costs assessor to examine all items. The mere fact that a costs assessor would have to examine disbursements did not suggest otherwise; those matters would be shortly dealt with.
- [41]Some of the grounds raised in the affidavit, the applicants contended, were in fact supported by an examination of the material. One of those grounds was “confusion as to regards the hourly rates charged”. The bills, while giving the initials of the person generating the work and their rate of charge, did not indicate their status so as to confirm their entitlement to charge in that amount. In an April 2018 bill, a director of the respondent (apparently, a Mr Duane who occasionally advised on property issues) had three times charged at a rate of $550 per hour, a higher rate than ever agreed. (This would have resulted, at the directors’ rates then being charged without objection, in an overpayment of $325.) Although the respondent was required to give a month’s notice of an increase in its hourly rate, having given such notice on 9 July 2019, it had (in the October 2019 bill) charged at the higher rate from 3 July 2019. As a result, Mr Thorburn’s time had on 62 occasions been charged at a rate not then authorised. In addition, many of the billed items were not sufficiently particularised to enable someone scrutinising them to determine whether an application for assessment ought be made. Although the file had been provided, it contained no file notes to enable the applicants to determine what had occurred at conferences.
The requirements of r 743A(5)
- [42]There is no basis for supposing that the identification of part, rather than the whole, of the costs for assessment is a matter of obligation, rather than choice. Section 335 of the Legal Profession Act appears to confer an unconstrained entitlement to apply for assessment of the whole or any part of the legal costs charged to the applicant. Nor is there anything in the wording of r 743A(5) which requires the applicant to specify what part of the costs he or she disputes; the rule appears to leave it open to require assessment of the whole. The fact that, as was held in Radich v Kenway, an assessor is obliged to consider all the items in a bill of which assessment is sought also suggests that there is no bar to seeking assessment of all costs charged, whether or not the applicant can identify grounds in respect of all.
- [43]And there is no statutory basis to suppose that an applicant has to substantiate the grounds of dispute that he or she may provide. Nothing in s 335 suggests a limitation on the entitlement to apply for assessment according to whether the applicant can make out a basis for the challenge. Notably, r 743A(5)(a) seems to contemplate this alternative: that the application may dispute the costs or on the other hand simply require their assessment. It is only in the former case that the grounds of dispute must be stated. That suggests that an applicant who is within time may be entitled to assessment simply on the basis of a statement that he or she requires assessment to occur; and it is only if he or she is able to identify an area of dispute that there is an obligation to state the grounds for the dispute. Again, that is consistent with the costs assessor’s being required to assess all items, with or without identification of grounds. And it is also consistent with the protective character of the Legal Profession Act as consumer protection legislation that a client should be able to obtain such a review, whether or not he or she is equipped to recognise and articulate in detail all the bases on which a bill might properly be challenged.
- [44]The decision in Robertson v Boe Williams, relied on by the respondent, does not support the proposition that an applicant for a costs assessment must provide an evidentiary foundation for the grounds of dispute stated in the supporting affidavit. In that case, the applicant had, at first instance, originally sought an assessment of costs on the basis of a trust account statement, and while disputing the costs did so, not by reference to any challenge to their amount or the liability of the client to pay them, but because of dissatisfaction with the performance of the firm of solicitors, which he accused of conspiracy with the prosecution. The primary judge held that the application was defective as based on a trust account statement, rather than any bill. It also appeared to have been brought with the aim of instituting an inquiry into the supposed conspiracy rather than because of any concern about overcharging. His Honour rejected a subsequent application for an itemised bill as made out of time, in circumstances where there was no basis to exercise the discretion under s 335(6) of the Legal Profession Act.
- [45]In the Court of Appeal, the applicant took a similar approach to that taken below, alleging conspiracy by the lawyers and failing to make any challenge to the costs charged. The expression “evidentiary foundation” was used twice in the judgment, in different contexts. The court referred to the
“…lack of any evidentiary foundation required to properly enliven a request for an itemised bill”.[26]
Only a person entitled to apply for an assessment of costs could seek an itemised bill; no costs application had been made within time; and there was no basis to exercise the discretion to permit an application out of time. But for present purposes, it is important to note that an applicant for an itemised bill does bear an evidentiary onus: to establish an entitlement to apply for a costs assessment and to demonstrate that an itemised bill has not been provided.[27] The reference in Robertson is not, therefore, readily transferable to the costs application context.
- [46]The second use of the expression did relate to the applicant’s seeking an assessment of costs before the trial judge. As to that, the court noted that his material failed to indicate “proper grounds” for disputing the costs or the liability to pay them, instead attacking every bill and the work done “under a wild series of unfounded allegations of improper practice”,[28] assertions for which there had not been “the slightest attempt at an evidentiary foundation”.[29] The observation that there was no “evidentiary foundation” for the assertions was no doubt made in fairness to the lawyers against whom the completely unsubstantiated allegations were made; but I do not think that it was intended to suggest that the absence of an evidentiary foundation for the allegations was the reason the grounds were not proper. Rather, the grounds on which the applicant relied in seeking an assessment of costs were not “proper grounds” because they did not relate to the amount of costs or the liability to pay them, as r 743A(5) requires, but were concerned with ludicrous allegations of impropriety.
- [47]The respondent’s reliance on the first instance decision of McGinness DCJ in Radich v Kenway[30] for the proposition that r 743A(5) required grounds of dispute in order to inform the respondent and the court of the factual basis for seeking assessment seems to me similarly misplaced. In fact, McGinness DCJ considered that the rule was designed to enable the court to consider the matters referred to in s 743G (2) (c), (d) and (e) of the Uniform Civil Procedure Rules. I concur, with respect, with her Honour’s view. Rule 743G(2) identifies matters for consideration by the court in determining what course should be taken. Examples are given of issues relating to the client’s liability to pay costs which might appropriately be tried before assessment. If the grounds of dispute are confined to the quantum of costs, a particular costs assessor may be appointed. Nothing suggests that the court is required to examine the grounds of dispute, except for the purposes of determining whether they raise a question of liability to pay which ought to be tried in advance of assessment, or are so confined that a costs assessor can be appointed without further court involvement.
- [48]It is also worth considering McGinness DCJ’s reasoning in Radich v Kenway a little further. Her Honour’s conclusion, upheld in the Court of Appeal, that the costs assessor’s obligation was to assess all the costs which the client had identified as requiring assessment, was, she considered, consistent with the history of taxation of costs. A client would not necessarily know whether particular costs were properly charged and thus would not be in a position to state definitive grounds of objection. As a matter of consumer protection, it was appropriate to interpret the legislation as providing an independent assessment of the whole bill in recognition of the limitations that a client would face in formulating grounds of objection. That view lends support to the applicants’ argument that precision should not be expected of a lay client, given the protective purpose of the Legal Profession Act provisions.
- [49]Finally, I come to the respondent’s argument that r 742(5)(b), concerning review of costs assessors’ assessments, suggested a need for precision in grounds raised on a costs application. But the point of the rule seems more to avoid the raising on review of issues which the costs assessor has not had the opportunity to consider. By permitting the raising of grounds of objection
“…stated in the application for assessment or a notice of objection or raised before the costs assessor”
the rule implies, to the contrary of the respondent’s proposition, that there is no difficulty about an applicant’s raising for the first time before the costs assessor grounds not stated in the costs application.
Whether the applicants’ grounds met the requirements of r 743A(5)
- [50]An applicant bringing a timely application for assessment of costs is, I conclude, entitled to seek assessment of all costs in the relevant bills; although the level of consideration required of the assessor obviously will depend on the nature of the items in question. Rational grounds for disputing the liability to pay, or the quantum of, costs are “proper” grounds. There is no requirement for the purposes of the costs application to provide evidentiary support for those grounds, although the costs assessor of course may seek further detail. The grounds set out in Mr Mishra’s affidavit are proper grounds of dispute as to the amount of the costs. (I note that my conclusion in relation to the adequacy of the grounds accords with that of Boddice J, in relation to similarly broadly expressed grounds, in Cupo & Anor v Anderssen Lawyers.[31])
- [51]Finally, I observe that if, indeed, there were a requirement that there be evidentiary support for the grounds stated in the costs application, there is no doubt that the assertion “confusion as regards the hourly rates charged” in the applicants’ application is justified, given the anomalies in Mr Lambros’ charging rate, which unaccountably increased by $10 per hour in the bills provided subsequent to the trial, and the premature raising, as from early July 2019, of charges for Mr Thorburn’s time.[32]
- [52]The applicants are entitled to an assessment of costs in respect of those bills in respect of which their application is within time. There was no objection to the costs assessor they proposed, Mr Gregory Ryan.
- [53]I order
- That the respondent’s professional costs and disbursements for acting on behalf of the applicants as contained in
- a.tax invoice numbered 156480 dated 29 June 2018 in the sum of $2,409.68;
- b.tax invoice numbered 158716 dated 29 November 2018 in the sum of $14,830.16;
- c.tax invoice numbered 159069 dated 19 December 2018 in the sum of $1,850.40; and
- d.tax invoice numbered 163878 dated 17 October 2019 in the sum of $313,785.18
be assessed pursuant to s 335 of the Legal Profession Act 2007.
- That Gregory Robert Ryan be appointed as costs assessor for that purpose.
- [54]Subject to submission, I would propose to make no order for costs, given the mixed success of the parties on the application.
Footnotes
[1] An application for a costs assessment is referred to as a “costs application” in this part of the Act, a term I will adopt.
[2] Neither applicant here fell within the definition of “sophisticated client” in s 300.
[3] Each contained the statement required by s 331(1) of the Legal Profession Act, advising the client of the right to have the costs assessed within 12 months.
[4] There is no evidence that notice was given of that increase, but no issue was taken about it.
[5] Acts Interpretation Act 1954 s 49A.
[6] [2011] QDC 61.
[7] At [29].
[8] [1893] 2 QB 286.
[9] [2012] QCA 307.
[10] At [45].
[11] At [45].
[12] [2000] QSC 3.
[13] At [13].
[14] [2012] QSC 115.
[15] Challen v Golder Associates Pty Ltd at [35].
[16] [2016] VSC 836.
[17] [2019] FCA 490.
[18] At [85].
[19] Section 198(4) Legal Profession Uniform Law.
[20] Rule 338(b).
[21] [2013] QCA 252.
[22] [2014] QDC 60 at [27].
[23] [2015] QDC 66 at [20]-[21].
[24] [2014] QCA 301.
[25] At [36].
[26] At [21].
[27] Tabtill No. 2 Pty Ltd & Ors v DLA Phillips Fox (a firm) & Anor (2012) QSC 115 at [82].
[28] At [29].
[29] At [18].
[30] Radich v Kenway & Anor [2012] QDC 65.
[31] [2015] QSC 202.
[32] However, I note in relation to ground f., “excessive Counsel’s fees” that when challenged about the failure to give counsel notice of the costs application (as s 339 of the Legal Profession Act requires), the applicants’ counsel disavowed any challenge to the level at which counsel had charged, but said that the issue instead was whether their services had been used unnecessarily; which would seem to fall squarely within ground e.“over-reliance on Counsel”. There plainly is no dispute concerning the rate at which counsel charged.