Applicant v Respondent

3 The serious injury application, and any common law proceeding which may have resulted from it, were settled when the application was listed for hearing in the County Court on 30 January 2009.

4 In the context of settlement discussions, Mr Moussageas was informed by Mr Bektas that:

(1) he would have to pay, from the settlement proceeds, the amount by which his solicitor/client costs exceeded the party/party costs which would be payable by the Victorian WorkCover Authority in addition to any settlement sum agreed to be paid ('solicitor/client gap'); and

5 Mr Moussageas told Mr Bektas he believed the figure of $63,000 was too high. Mr Betkas agreed to reduce the amount of the solicitor/client gap to $48,000. Negotiations proceeded on that basis, and Mr Moussageas instructed Mr Bektas to settle.

6 Mr Moussageas remained concerned that the costs he was being charged for the solicitor/client gap were too high.

7 By letter dated 9 February 2009, he requested the solicitors to provide him with an itemised bill. That request was made pursuant to s 3.4.36 of the Legal Profession Act 2004 ('the Act').

8 As a result of the request, the solicitors were obliged by s 3.4.36(2) of the Act to provide Mr Moussageas with an itemised bill within 21 days. It is common ground that no itemised bill has ever been provided.

9 There was no formal response to the request for an itemised bill. Instead, on 21 February 2009, when Mr Moussageas attended at the solicitor's office to collect a cheque for the balance of the settlement moneys, he had a discussion with Mr Bektas. There is a dispute, on the affidavit material, about certain aspects of this discussion. On application such as this, where there was no cross-examination, it is not possible to resolve that dispute.

10 It is common ground that, during this discussion, Mr Bektas raised the request by Mr Moussageas for an itemised bill. In his affidavit, Mr Bektas deposed that Mr Moussageas was provided with what he described as 'a written authority to prepare an itemised account' and that Mr Moussageas declined to sign that document. So much is agreed.

11 The so-called 'authority' was in the following terms:

I, Theodosios Moussageas, of 50 Anderson Street, Pascoe Vale hereby agree that I will pay any difference in fees between the amount agreed with my solicitors, Victorian Compensation Lawyers ($48,000.00 including GST) and any greater amount assessed by the itemization of my solicitor/client account at my request.

12 What is not agreed, and which cannot be resolved on this application, is whether Mr Moussageas, after Mr Bektas explained to him that he may have to pay more than the $48,000 figure if the itemised bill sought a higher amount, withdrew his request for an itemised bill. Mr Bektas says this is what happened. Mr Moussageas denies this.

13 Viewing the uncontested facts in the best light for Mr Bektas, he may have asked Mr Moussageas to sign the so-called 'authority' as a means of explaining to Mr Moussageas the risk that he may have to pay more in legal costs if an itemised bill justified that amount. But, even if that was Mr Bektas' purpose, it was a wholly inappropriate way for him to proceed. My reasons follow.

14 First, there was a legal obligation to provide an itemised bill. No authority was required.

15 Second, it was inappropriate for Mr Bektas to seek a written agreement from Mr Moussageas to pay the amount of any excess, if that transpired, as a condition of proceeding to prepare an itemised bill.

16 Third, although I accept that a prudent solicitor faced with a request for an itemised bill by a client may in appropriate circumstances bring to the client's attention the possibility that the itemised bill could lead to the client paying a higher sum, it was wrong to bring that issue to Mr Moussageas' attention by proffering to him, without notice, the unnecessary and misleading 'authority' during the course of a meeting arranged for a different purpose.

17 Fourth, it was inappropriate to ask Mr Moussageas for oral instructions if he decided to withdraw his request for an itemised bill in these circumstances.

18 A solicitor who wishes to give a client the opportunity of considering whether to maintain a request for an itemised bill should, in my opinion, correspond with the client pointing out the possible ramifications; and seek written instructions from the client as to how he or she wishes to proceed.

19 The procedure which was adopted in this case should not be repeated.

20 By s 3.4.38(5) of the Act, as it then stood, a client may apply to the Costs Court for a costs review of a bill within 12 months of the giving of the bill.

21 The time commenced on 30 January 2009, or perhaps a few weeks later on 21 February 2009. It is unnecessary to decide which is the applicable date. In any event, the 12 month period expired by 21 February 2010 at the latest.

22 Much time passed, during which Mr Moussageas made a complaint to the Legal Services Commissioner in respect of his costs dispute with the respondent solicitors.

23 During the course of correspondence with the Legal Services Commissioner, Mr Moussageas was informed that the Commissioner did not have jurisdiction to deal with the complaint as to the quantum of fees, because it exceeded the statutory amount of $25,000.

24 On 16 November 2009, Mr Moussageas was informed that if he wished to dispute the amount of the costs, he should do so by way of review before an associate judge of this Court. He was given the relevant contact details, and told that there were strict time limits for making an application for review.

25 Delay continued. Eventually, Mr Moussageas obtained legal representation. By summons filed 17 May 2011, he sought to review the costs which he had paid to the solicitors by deduction from the settlement amount. The delay after the expiration of the 12 month period approximates 15 months.

26 In these circumstances, a review under s 3.4.38(5) cannot proceed unless, pursuant to s 3.4.38(6) of the Act, a judge determines 'after having regard to the delay and the reasons for the delay, that it is just and fair for the application for review to be dealt with after the 12 month period.'

27 There was further delay after the late filing of the summons for taxation; mainly because the summons was not accompanied by an affidavit explaining the delay or raising other matters relevant to the exercise of the Court's powers under s 3.4.38(6) of the Act.

28 There were four callovers before a costs registrar:

(1) At the first callover, an order was made that Mr Moussageas file and serve the relevant affidavit material by 30 June 2011. He did not do so.

(2) At the second callover, on 4 October 2011, an extension of time until 15 November 2011 was given for Mr Moussageas to file his affidavits. Again, he did not file his affidavit material by that time.

(3) By the third callover, on 6 December 2011, the affidavit material was still not filed. A further extension was granted until 23 December 2011 and the matter was adjourned to a further callover on 13 March 2012. Again, Mr Moussageas failed to file his affidavits within time.

(4) Shortly prior to the fourth callover, on 13 March 2012, Mr Moussageas finally swore, filed and served his affidavit material. At that callover, a costs registrar fixed a time limit for the solicitors to file responding material. The solicitors complied, and the matter was then ready to be referred to a judge under s 3.4.38(6).

29 The delay in providing the affidavit material approximated eight months after the affidavits were first due on 30 June 2011, or approximately nine months after the first callover.

30 The matter has been referred into the Practice Court and it falls for me to make the relevant determination under s 3.4.38(6), or to refuse to do so.

31 Each case must be dealt with on its own facts. No two cases will be alike. In Dal Pont, The Law Of Costs,[1] a summary is given of the factors which may be considered relevant in making a determination under sub-s 6. Those factors include: (a) the length of the delay, including balancing that delay against the degree of prejudice to the solicitors if the time is enlarged and comparing that prejudice with any prejudice to be suffered by the client if the application is shut out on time grounds; (b) whether the delay has been explained; (c) the client's knowledge of his or her rights; (d) whether the evidence suggests that the bill may be excessive; (e) whether the costs have been paid; (f) what reasons in opposition are put forward by the solicitors.

32 A number of cases have been referred to but each of them turn on their own facts.

33 In this case, the delay prior to the filing of the summons for taxation was long. It approximates 15 months after the expiry of a 12 month period. The delay is explained by a series of matters relied upon by Mr Moussageas.

34 First, that he was a self-represented litigant until the filing of his summons for taxation on 17 May 2011.

35 Second, that he complained about the solicitor's conduct at a relatively early stage and, in the context of that complaint, informed the Legal Services Commissioner that he was making his complaint because he wanted the solicitor's bill investigated, 'to ensure that I am only charged for the work they did on my behalf'. He contends that this led him to believe that the matter was in hand and there was nothing further he needed to do. Against that there is the letter of 16 November from the Legal Services Commissioner which put him on notice that any costs review of the bill in question needed to be by notice to this Court and that strict time limits applied. However, at this time, the information provided by the solicitors to Mr Moussageas would have led him to believe that the strict time limit had long since expired; as he was mistakenly informed by the solicitors that the relevant period was 60 days and not 12 months.

36 In that context I turn to consider what is just and fair in the circumstances of the case.

37 Although the delay is long and the explanations are in many respects unsatisfactory, I am not satisfied that there is any prejudice to the solicitors which cannot be compensated for by costs orders in respect of the wasted hearings before the Costs Court, while Mr Moussageas delayed in providing his affidavit material.

38 In my opinion, the relevant provisions of the Act are in the nature of consumer protection legislation and are designed to ensure transparency. In these circumstances, the determining factor in considering justice and fairness of this case, is the continuing lack of an itemised bill. I note that this issue has been directly raised by the Legal Services Commissioner in correspondence with the solicitors, and still no itemised bill has been forthcoming. In the absence of an itemised bill, it is in my opinion just and fair that Mr Moussageas be allowed to proceed with his review application.

39 In determining that it is just and fair to allow the summons for taxation to proceed, I have also considered the amount of the fees received or taken by the solicitors - approximately $110,000. That figure seems high in the context of a serious injury application and not a full trial.

40 However, as stated, there will be costs consequences for Mr Moussageas. The delays in relation to the extra callover hearings in the Costs Court were unexplained and unjustified. Mr Moussageas must pay the respondent's costs of callovers on 4 October 2011, 5 December 2011 and 13 March 2012.

41 For these reasons, I determine, pursuant to s 3.4.38(6) of the Act, that it is just and fair that the application for review be dealt with after the 12 month period.

42 I will hear the parties as to whether I can make directions today as to the filing of an itemised bill, the filing of itemised objections, and otherwise direct the matter proceed straight to taxation so as to avoid any further costs being wasted.