Followes v Knight Frank

Appeal - Practice and procedure - Application for extension of time to appeal - Unfair contract - Costs - Application for costs on indemnity basis refused - Claim by solicitors for costs on a solicitor/client basis - Particular circumstances of matter - Court's discretion as to costs - Costs order made. LEGISLATION CITED : Industrial Relations Act 1996 s 181 CASES CITED : Followes v Knight Frank (NSW) Pty Ltd [2003] NSWIRComm 41 Followes v Knight Frank (NSW) Pty Ltd (2002) 118 IR 468 HEARING DATES: DATE OF JUDGMENT: 08/06/2003

APPLICANT/APPELLANT Ms J J Followes - in person

LEGAL REPRESENTATIVES: RESPONDENT Mr G K J Rich of counsel Solicitors: Deacons

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

Matter No IRC 6538 of 2002 JUDIE JANINE FOLLOWES v KNIGHT FRANK (NSW) PTY LIMITED Application by Judie Janine Followes for extension of time to appeal against a decision of Staunton J given on 31 October 2002 in Matter No IRC 847 of 2002

1 On 12 March 2003 judgment was delivered in this matter: Followes v Knight Frank (NSW) Pty Ltd [2003] NSWIRComm 41. The proceedings involved an application by Ms Judie Janine Followes for an extension of time in which to lodge a notice of appeal against the decision of Staunton J given on 31 October 2002: Followes v Knight Frank (NSW) Pty Limited (2002) 118 IR 468. The extension of time sought by the applicant was refused.

2 The respondent had made an application that its costs of the appeal be ordered on an indemnity basis. That application was also refused. As to the issue of costs otherwise, the judgment dealt with the issue in the following way: [34] ... On the other hand the respondent has been successful in the proceedings and should therefore prima facie have an order for its costs. Nevertheless, the circumstances of the proceedings have a number of elements which may make it appropriate that any order for costs in favour of the respondent should have some limit placed upon them. Further, it would be inappropriate for either party, in the event that the respondent proceeds with an application that its costs be assessed, that the issue be deferred for the normal assessment process to occur or that either party, particularly the applicant, should be liable for any significant additional costs in respect of the assessment process.

[35] Accordingly, and to ensure that any order for costs in favour of the respondent is reasonable having regard to all the particular circumstances of the case, I consider that it is appropriate that a sum certain be fixed. The Court therefore orders that, should the respondent wish to proceed further with its application for costs it shall, within 14 days of today, file with the Registrar an itemised assessment of its costs and ensure that a copy of the assessment is provided simultaneously to the applicant. The applicant shall, within seven days of that assessment being served upon her, advise the Registrar in writing of any objections she has to the assessment filed. The Court will then determine the amount that is to be ordered for the respondent's costs.

3 A facsimile from the solicitors for the respondent was received on 24 March 2003. Accompanying the facsimile was a letter enclosing an itemised assessment of legal expenses incurred by the respondent "in defence of the applicant's application for an order extending time to appeal". The documentation comprised a six page itemised account together with a one page Memorandum of Fees from counsel. The six page account concluded with a list of items as a summary of the solicitor's costs and disbursements (including counsel's fees). The list of the solicitor's costs, including the total, may be tabulated as follows: Solicitor's fees $10,927 Disbursements: facsimile $ 48 photocopying 111 counsel's fees 2,250 Sub-total re disbursements 2,409 Total solicitor' costs and disbursements $13,336 _______

4 It is to be assumed that the above items do not include GST as there is no reference to GST in respect of the $10,927 solicitor's costs. As to counsel's fees, although the solicitors' summary included the amount as $2.250, the Memorandum of Fees is for that amount plus GST at 10 per cent, resulting in the total amount of counsel's fees as $2,475.

5 Turning then to the solicitor's fees, as noted earlier, it is a detailed and itemised account covering the period 1 November 2002 to 12 March 2003. It has plainly been prepared on a solicitor and client basis and thus represents the amount that may well have been ordered to be paid in respect of solicitor's fees if the respondent had been successful in its application for costs to be paid on an indemnity basis.

6 The applicant raised a number of objections to the respondent's itemised costs including: "Internal discussions between Deacons' people should be in-house costs and not chargeable ... Too many people have their 'fingers in the pie' and many tasks are duplicated ... Application to Extend Time to Appeal was just that, an application ... why the need to involve Counsel?"

As to a number of the names or initials in the document which referred to solicitors the applicant had not dealt with, she said: "What is his involvement? Don't we have enough people in this small matter ... How can he/she substantiate $480 on 30/12/02 for the preparation of an email and letter of advice."

7 The applicant's more general objections included the following: My request for Discontinuance if the other party dropped all costs was met with a negative and preparation of Consent Orders. My telephone conversation and email outlined that if the party were agreeable to the Discontinuation then I would prepare the necessary documents for forwarding through to the Registrar. Instead of receiving advice, received documentation .... Charged at $400 per hour!!! ... What happened to the old fashioned way of communicating by way of collecting a number of people in the one room to discuss, clarify and resolve an issue? Perhaps if this had happened, the cross duplication of tasks and cross communication may not have taken place. Besides advising that I cannot afford the outrageous account. I object to the charges of $300 plus being used to front a 'legal' activity when actually the practice is one of 'administrative' with perhaps 10% legal expertise required. Yet all tasks have been tagged 'legal' and charged accordingly. Further detailed evidence may be required eg telephone receipts, copies of emails, copies of letters and copies of reports if the client wishes to pursue these costs.

8 It is necessary to make a number of assumptions as to the way in which the document has been compiled although the assumptions seem almost self evident in terms of the materials available. The assumptions include the following:

(a) a number of different solicitors from each of the Melbourne and Sydney offices of the respondent's solicitors performed work in the matter;

(b) different charging rates were used in preparation of the account. For example, it appears that a small number of hours were charged for the time rate for a partner of $400 per hour. $315 per hour was the rate utilised for the work performed by a senior associate; $235 for the work performed by a solicitor and $135 an hour for the rate for work performed by a paralegal. In addition, there appeared to have been a small number of hours charged at different rates. For example, there are a number of periods charged at $240 per hour and $290 per hour. Presumably these rates are, respectively, for a different associate or solicitor (that is different to the associate or solicitor who normally had carriage of the matter) and who was obliged to attend to the matter apparently in the absence or unavailability of the usual solicitor or solicitors dealing with the matter;

(c) a number of the attendances for which charges were made related to reporting by the solicitors to representatives of the client; communications between the Sydney and Melbourne offices of the solicitors and work in respect of a possible settlement of the matter (this appears to be the matter referred to in the judgment of 12 March 2003 in paragraph [23] where there was reference to certain communications between the Registrar and the parties which resulted, inter alia, in a request from the solicitors for the respondent that certain communications between the parties were to be regarded as "without prejudice" and that copies of the documentation and correspondence provided to the Registrar during the course of his communications with the parties would not be placed on the Court file).

9 It is appropriate to deal with the last matter first. Although the items may well have been reasonably incurred as between solicitor and client, nevertheless, I do not consider that they are matters appropriately considered as party/party costs for present purposes. Because of the way in which the matter was dealt with there was a certain amount of duplication of work carried out, if not in form, at least in substance. Further, because there were some quite unusual circumstances of the present application, it is appropriate that the applicant not bear the full costs of the respondent even on a party/party basis. Section 181 of the Industrial Relations Act 1996 provides that costs are within the Court's discretion. The relevant circumstances also include the fact that the application the subject of the proceedings was limited in scope; it was merely an application to extend time to appeal; it was filed prior to the time limited for a notice of appeal to be filed; the material filed and relied on by the applicant, on its face, was unlikely to lead to the application being successful.

10 I consider that the combination of these circumstances leads to a very particular situation. The respondent should have given greater consideration to the eventual proposal of the applicant that she withdraw her application on a compromised basis as to costs. In any event, I do not consider that it could be said to be reasonable in the circumstances to award costs in the sum claimed by the respondent.

11 What will be reasonable will vary with the circumstances of the particular case but the assessment of what is reasonable has not been assisted by the respondent seeking costs essentially on the basis which the Court has rejected and choosing to include costs resulting from additional steps (including extensive intra-firm dealings) occasioned by its use of interstate based solicitors notwithstanding the employment of the applicant occurred in Sydney and the respondent's solicitors have a highly regarded Sydney office or Branch. I consider that the sum awarded subsequently herein for costs may be considered, on an overall basis, to be reasonable in all the circumstances. I determine that it is appropriate to limit the solicitor's costs to the sum of $1,800 (plus GST). As to the disbursements which, as earlier noted, amounted to $159, I consider that a reasonable amount in that respect would be $90 (including GST). It is noted that the sum claimed for counsel's fees (exclusive of GST) was $2,250 involving seven hours preparation of submissions and four hours in appearing before the Court to defend the application for the extension of time. In addition, a further one and a half hours (being half an hour on three different days between 12 and 16 December) were included as referable to drafting and settling the response to the applicant's written submissions. The total number of hours was twelve and a half at $180 per hour. I consider that the amount that should be allowed is $1,600 in respect of counsel's fees plus GST, totalling $1,760. The sum of $3,830 is allowed in respect of the respondent's costs made up as follows:

Solicitor's costs 1800 GST 180 disbursements (incl GST) 90 counsel's fees (incl GST) 1760 $3830 _____

12 The Court accordingly orders that the applicant pay the respondent's costs in the sum of $3,830.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.