CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – ILLEGAL AND VOID
CONTRACTS – EFFECT OF ILLEGAILITY OR INVALIDITY –
IN GENERAL –
where the applicants engaged the respondents in litigation spanning a six year
Source
Original judgment source is linked above.
Catchwords
CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – ILLEGAL AND VOIDCONTRACTS – EFFECT OF ILLEGAILITY OR INVALIDITY –IN GENERAL –where the applicants engaged the respondents in litigation spanning a six yearperiod – where the applicantsnever signed a client agreement –where the applicants called for a bill to be delivered pursuant to s 84Queensland Law Society Rules 1987 – whether there exists a writtenclient agreement pursuant to s 48 of the Queensland Law Society Act1952CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – ILLEGAL AND VOIDCONTRACTS – EFFECT OF ILLEGALITY OR INVALIDITY –IN GENERAL –where the applicants engaged the respondents in litigation spanning a six yearperiod – where the applicantsnever signed a client agreement –where the applicants called for a bill to be delivered pursuant to s 84Queensland Law Society Rules 1987 – where respondents continued toact for applicants – where applicants continued to pay respondents’
accounts
– whether, in the absence of a signed client agreement, the
applicants have compromised their rights
Queensland Law Society Act 1952, s 48, s 48F, s 48I, s 48J, s
48K
Queensland Law Society Rules 1987, r 84
Atlantic 3-Financial (Aust) P/L & Anor v Marler & Anor
[2003] QCA 529, applied
Brooks v Burns Philp Trustee Co Ltd [1969] HCA 4, cited
Herald
v Worker Bee (Brisbane) Pty Ltd [2003] QSC 223
[2004] 2 Qd R 263,
cited
Merrin v Cairns Port Authority [2002] QCA 290, applied
Judgment (131 paragraphs)
[1]
[1] The applicants, who are all members of the same family, engaged the respondents, a firm of solicitors, to prosecute a dispute that they had concerning land at Springbrook which had been purchased by the family in 1969 but had not been registered in the purchasers' names at the Titles Office. The reason for this would appear to be that whilst the transfer documents were lodged at the Titles Office, a requisition had issued and because it had never been attended to, the registration process had never been completed.
[2]
[2] The land therefore had remained in the name of the vendor for over thirty years and the applicants' prosecution of the action against the executors and trustees of the estate of the vendor resulted in three applications to the court and one hearing in the Court of Appeal. The litigation commenced in mid 2000 and concluded in about September 2005 when the applicants' interest in the land the subject of the application was registered by the Registrar of Land Titles.
[3]
[3] Instructions were first obtained by the respondent firm in April 2000 and an initial meeting with Mr Errol Gilbert, a representative of the applicants, was held on 3 May 2000. There were then further attendances on Mrs Denice Gilbert when she was subsequently nominated as the contact point for the family. On 16 May 2000 a letter was sent to Mrs Gilbert by the respondent firm which referred to a number of matters as well as to an enclosed client agreement. The letter continued:
[4]
"... we are required as a result of Law Society Regulation, to forward you a client agreement. This agreement sets out the terms of our fees and charges and will need to be signed by each of those parties responsible for the payment of our costs and outlays. For present, you will observe that we have requested that you pay to our trust account a sum of $2,000.00 being made up of a $1,000.00 bond and $1,000.00 on account of our professional costs and outlays."
[5]
[4] It is clear that despite the request for the document to be signed no such document was ever signed by the applicants and neither is there a copy of the document said to have been enclosed in the letter of 16 May 2000 on the respondents' file. The affidavit of Peter George sworn 4 June 2007 indicates that it was the standard practice of the firm to enclose the Legal Services Contract together with other attachments in all letters to new clients and the standard client agreement in use at the time of the letter is exhibited to the affidavit.
[6]
[5] The firm's standard Legal Services Contract consisted of some 25 general clauses which included a dictionary and then set out or explained matters such as the acceptance of the retainer, the basis for the charging of professional fees, costs, GST, an estimate of professional fees, the recovery of costs, the requirement of a performance bond, monthly accounts, the payment of costs and outlays, an explanation of a trust account authority, the duties of the firm and the client, the different types of personnel providing the legal services as well as explanations of such matters as termination, independent advice and acceptance of the terms of the contract.
[7]
[6] Attached to the standard contract were 10 schedules which specifically set out the matters which were particular to the individual client. The schedules referred to matters such as the actual commencement date, the amount of the performance bond, the actual hourly charge out rate, costs to be charged for such matters as research, photocopying, typing, emails and telephone calls as well as the specific names of the personnel who would be working on the file. Four attachments marked A, B, C and D were also included. Whilst Attachment A was marked "Copy Supreme Court Scale" no scale was attached. Attachment B was a "Sample Account" and Attachment C was "Important Notice to Client" which gave important information about who to contact if there were problems as well as information about client agreements and agreements about fees and costs. Attachment D "Form of Guarantee and Indemnity" was not applicable in this case
[8]
[7] Despite the fact that the Client Agreement enclosed in the letter dated 16 May 2000 was not signed and returned, the amount requested in that letter was paid. Indeed between June 2000 and September 2005 some 49 invoices were sent and paid for by the applicants. During the course of the action the respondents sent accounts to the applicants which were paid. The fees charged and paid were fees as set out in the client agreement which was said to have been forwarded on 16 May 2000.
[9]
[8] On 20 March 2003 a letter was forwarded to the applicants noting that the hourly charge out rate for the firm had changed but the firm would continue to charge the applicants the same charge out rate that had been agreed upon previously. In particular the letter indicated that the applicants had been charged the higher rate in error and they were going to be refunded an amount of $2,816. In October 2003 there was further correspondence in relation to accounts, some of which were outstanding. On 20 July 2004 Mr Errol Gilbert again took over the conduct of the litigation on behalf of the applicants and he requested a copy of all the outstanding accounts and found that an amount of $32,725.64 was outstanding. On 18 August 2004 Mr Errol Gilbert authorised payment to the respondents. There were further letters in relation to fees and accounts from August 2004 until
[10]
[9] On 16 February 2005 the respondents wrote to Mr Errol Gilbert proposing a change in the billing rates. This letter elicited the response dated 28 February 2005. In it there was an objection to the change in the billing rates and the letter stated:
[11]
"Re: 'The variation of fees suggested by you on the Services Contract'
[12]
As this litigation is approaching the 6th year, it is our feeling that the existing fee structure should remain in force for the completion of the case, and therefore no change should be made as from 1 March, 2005. Furthermore, our records indicate that no services contract exists."
[13]
[10] On 23 March 2005 a further letter was sent by Mr Gilbert indicating that he had never signed a cost agreement with the firm and:
[14]
"We have ascertained from the Law Society what a cost agreement is and what the situation is when there is no agreement.
[15]
It is now obvious that we have not been charged on the correct basis throughout these proceedings and we call for a bill to be delivered on the proper basis under Rule 84 of the Law Society Rules."
[16]
[11] It would appear that there was no specific reply to Mr Gilbert's request but that the respondents attended to receive the reserved decision of Justice McMurdo which concluded the matter in favour of the Gilbert family. The respondents then received instructions on 20 April 2005 to attend to the registration of the land and on
[17]
15 June 2005 received further instructions from Mr Errol Gilbert to undertake further work in relation to the registration of the land in the names of the Gilbert family.
[18]
[12] On 10 June 2005 the respondents replied in relation to the costs issue raised by
[19]
Mr Gilbert and stated that all of the parties had proceeded on the basis that the parties had entered into the legal services agreement sent on 16 May 2000. The letter further provided that there was now an outstanding amount of $12,785.80 as at 10 June 2005 and that that amount had been calculated on the basis of the agreement that had been sent on 16 May 2000 and as agreed in writing pursuant to the letter dated 28 February 2005. The letter further stated that as the matter had reached conclusion without the need for a trial, the respondents were prepared to conclude the matter in accordance with the rates as per the agreement sent on 16 May 2000.
[20]
[13] On 15 June 2005 Mr Gilbert gave instructions to the respondents to register the land in the name of the family and further correspondence then ensued on
[21]
22, 23 and 25 June 2005. On 29 June 2005 a further letter was sent from the respondents which stated:
[22]
"In Errol's recent correspondence he indicated that the Legal Services Contract attached to our letter of 16 May 2000 was not received. We confirm that same was sent by us so perhaps the agreement has become separate due to the large amount of documents and correspondence you undoubtedly hold on the matter. In any event we confirm that, in light of the resolution of the matter, we are happy to continue our financial arrangements in accordance with that Agreement as has previously occurred."
[23]
[14] On 8 July 2005 there was further correspondence with the applicants in relation to the recovery of costs in the action from the defendants in relation to the Springbrook land when it became clear that there were no assets in the estate of the defendants to satisfy a costs order. Further correspondence then ensued in July, August, September, November 2005 and January 2006 in relation to the transfer of the land and the settlement of outstanding accounts as well as recovery of costs from the defendants in the action.
[24]
[15] On 15 March 2006 the applicants instructed new solicitors. Their instructions were that at no stage was a client service agreement entered into and they requested a copy of any agreement alleged to have been entered into. The applicants requested a fully itemised account within two months.
[25]
[16] Cost Orders were obtained in relation to the two Supreme Court Claims being number 5632/2000 and 5720/2000 as well as in the Court of Appeal number 11160/2003. The costs as assessed on a standard basis, or as agreed between the parties, totals $37,151.03.
[26]
[17] The affidavit of Errol Gilbert indicates that the total accounts rendered by the respondent firm to the applicants amounts to $233,627.33.
[27]
[18] The Gilbert family now make application for the following orders;
[28]
"1. A declaration that there does not exist any written client agreement pursuant to s 48 of the Queensland Law Society Act 1952 ('the Act').
[29]
A declaration that pursuant to Section 481 of the Act the maximum amount payable by the Applicants to the Respondents is:
[30]
2.1 an amount calculated for the litigation conducted by the Respondents in accordance with the Supreme Court Scale relevant from time to time; or in the alternative
[31]
2.2 an amount assessed as reasonable for the work by a Tribunal Cost Assessor.
[32]
An order that the Respondents do within twenty-eight (28) days deliver to the Applicants' [sic] bill of costs in assessable form in compliance with Section 48J(1)(b) of the Queensland Law Society Act 1952.
[33]
An order that in the event the said bill of costs totals an amount less than that paid by the Applicants to the Respondents then the Respondents pay to the Applicants upon delivery of the said bill of costs the amount representing the said overpayment.
[34]
Such further or other orders as to this Honourable Court may seem meet.
[35]
The Respondents pay the Applicants [sic] costs of and incidental to this application including costs on an indemnity basis."
[36]
[19] The applicants at this hearing are only seeking declarations in terms of paragraphs 1, 2 and 3. The respondents oppose the declarations sought.
[37]
[20] Section 48 of the Act required the firm to make "a written costs agreement with the client" specifying the work the firm was to perform and the fees and costs payable by the client for the work.
[38]
(1) This section does not apply to urgent work or work if the maximum amount a practitioner or firm charges as fees for the work is $750 or less.
[39]
(2) Within a reasonable time after starting work for a client, a practitioner or firm must make a written agreement with the client expressed in clear plain language and specifying the following matters-
[40]
(a) the work the practitioner or firm is to perform;
[41]
(b) the fees and costs payable by the client for the work.
[42]
(3) The fees and costs payable by the client for work must specify-
[43]
(b) the basis on which fees and costs will be calculated (whether or not including a lump sum amount).
[44]
(4) The notice in the schedule must be completed by the practitioner or firm and given to the client, together with a copy of any scale for the work provided under an Act, before the client signs the client agreement.
[45]
(4A) If the practitioner or firm must complete a notice mentioned in subsection (4) and that practitioner or firm is or includes an interstate legal practitioner engaged in legal practice in this jurisdiction, the notice must be changed to reflect that fact.
[46]
(5) The client agreement must not be inconsistent with the notice in the schedule.
[47]
(6) Subsections (4) and (5) do not apply if the client is 1 of the following-
[48]
(a) a public company, a subsidiary of a public company, a foreign company or a registered Australian body (within the meaning of the Corporations Law
[49]
(c) a partnership if 1 of the partners is an entity mentioned in paragraph (a) or (b);
[50]
(d) a joint venture if 1 of the joint venturers is an entity mentioned in paragraph (a) or (b)."
[51]
"48F Effect of non-compliance or prohibited provision
[52]
(1) If a client agreement to which section 48 applies does not comply with that section, the client agreement is void.
[53]
(2) If a provision is included in a client agreement and inclusion of the provision is prohibited by this part, the provision is void."
[54]
[21] Each of the applicants has sworn an affidavit that they have not seen or signed a client agreement. Despite the fact that it was the solicitor's standard practice to send such an agreement there is no copy of what was alleged to have been sent contained on the file but rather an example of the standard agreement at the time.
[55]
[22] Whilst initially the respondents maintained that there was an agreement in writing which could essentially be construed from the correspondence between the parties and which was in accordance with the terms of the agreement forwarded by letter on 16 May 2000, this was not relied upon at the hearing. The respondents conceded that whilst it was their position that the Act had been complied with, they were not in a position to demonstrate that a compliant client agreement had in fact been sent.
[56]
[23] It is common ground therefore that there is no formal executed client agreement in this case.
[57]
[24] There should therefore be a declaration in the terms sought by the applicants in paragraph 1 of the Application.
[58]
Should there be a declaration in relation to the amount payable by the applicants to the respondents with respect to costs?
[59]
[25] In consequence of the fact that there is no client agreement between the parties the applicants are seeking further declarations in relation to the maximum costs payable by the applicants to the respondents. Essentially the applicants argue that because there is no client agreement, s 48 of the Law Society Act provides that the amount payable to the respondents is either an amount calculated in accordance with the relevant Supreme Court Scale or an amount assessed as reasonable by a Tribunal Cost Assessor.
[60]
[26] The respondents submit that s 48 has no application in the circumstances of this case as the applicants have compromised their rights under the section.
[61]
[27] The respondent's submission is that the applicants have by their own conduct entered into an arrangement whereby they have negotiated away their rights under
[62]
s 48. In this regard the respondents rely on a number of facts. The respondents state that the applicants were fully aware of the fees that were to be charged because, quite apart from the client agreement, the letter of 20 March 2003 specifically lists in great detail the hourly rates for all the categories of personnel who would be working on the file. Then on 16 February 2005 the respondents wrote to Mr Gilbert, who was then acting on behalf of the applicants, proposing a change in the billing rates. This letter elicited a response on 28 February 2005 which indicated that the applicants had not signed a services contract and that therefore the respondents should forgo any suggestion that they would increase their fees. The letter then requested that the existing fee structure should be maintained. The following month in a letter dated 23 March 2005 Mr Gilbert again asserted that there was no costs agreement.
[63]
[28] The respondents state that the effect of the two letters is that the applicants asserted that they had rights under the Act on the grounds that there was no signed costs agreement and therefore the respondents should forego any suggestion of an increase in their fees. The respondents submit therefore that it was on this basis that they allowed the existing arrangements to continue in place and they did not in fact increase their fees. Accordingly the respondents state that the applicants have negotiated away their rights in return for the agreement with the solicitors that the fee structure would be that which was charged from 16 May 2000 and would not increase. The respondents submit that had there been any dissent from these arrangements or an assertion by the applicants that the fees were not lawfully payable, they would have taken steps to decline to act any further in the matter or demanded that a signed client agreement be returned.
[64]
[29] Furthermore the respondents state that on 20 April 2005 Mr Gilbert gave further instructions. The respondents also rely on a letter dated 10 June 2005 in which they indicated they were willing to "conclude the matter on the rates as per our agreement of 16 May 2000." Accounts were then subsequently rendered on the basis of the earlier agreement. These accounts were paid by the applicants.
[65]
[30] The respondents submit therefore that since at least 10 June 2005 there has been an agreement between the parties to conclude the matter. The respondents submit that the basis of the agreement was that the respondents agreed to charge the rates that had been in place since 16 May 2000 and in response the applicants accepted an obligation to pay in accordance with these earlier rates.
[66]
[31] The respondents submit that these actions carry with them an implication that the applicants would forego their entitlements to rely on s 48 of the Act. The respondents submit that whilst correspondence from the applicants in February and March 2005 asserted that right, the applicants in fact negotiated away that right in return for the respondents agreeing to continue charging in accordance with the schedule of fees in existence as at 16 May 2000.
[67]
[32] The respondents submit that once there was an agreement that the earlier rates would apply to the work to be done, it was implied that there would be no challenge as to the validity of a costs agreement and the applicants are therefore precluded by virtue of this new agreement from raising the matter[1].
[68]
[33] Having examined this correspondence I am not satisfied that there has in fact been a compromise by the applicants or a waiver of their rights. An assertion that the existing fee structure should stay in place can not be interpreted as constituting a binding agreement that the applicants abandon their rights under the Act. I am not satisfied that the letter of 28 February 2005 constitutes an agreement that the applicants have abandoned their rights to challenge the respondents in respect to costs. It is simply a request that the fees not increase. This is reinforced by the letter of 23 March 2005 in which the applicants state a number of matters. First that there has never been a costs agreement, second that they do not consider that they have been charged on the correct basis and finally they "call for a bill to be delivered on the proper basis under Rule 84 of the Law Society Rules".
[69]
[34] Furthermore the respondents response on 10 June 2005 queries this request and indicates that as the matter has resolved without going to trial asks "In the circumstances is it still your position that you wish to have the matter assessed." I consider that these letters support a finding that the letter of 28 February 2005 cannot be construed as constituting an agreement between the parties. I consider that the letter of 23 March 2005 clearly indicates that the applicants have not in fact abandoned their rights under the Act. This is further supported by the letter of
[70]
8 July 2005. Even in correspondence dated 17 November 2005 Mr Gilbert encloses a final cheque, asks the firm to close their file on the matter but adds "On perusal of the Bill Ref: 98456, it is noted that there has been a sharp increase in some of the amounts charged as well as some of the entries made to which I make a strong protest". I do not consider therefore that there has been a compromise agreement whereby the applicants agreed to abandon their rights
[71]
[35] Accordingly I am not satisfied that the correspondence constitutes a compromise agreement whereby the applicants agreed that they would abandon their rights.
[72]
Would an agreement by the Applicant to compromise their rights have assisted the respondents?
[73]
[36] The applicants also argued that if a compromise agreement was found to exist it should be declared to be void on the basis that the requirements of the Law Society Act, stipulating the requirements for a written client agreement, are of their very nature such that they cannot can be waived or abandoned and relied on the decision in Brooks v Burns Philp Trustee Co Ltd[2] where Windeyer J stated:[3]
[74]
"When a statute creates and confers rights and imposes corresponding duties, persons for whose benefit this was done may by contract waive or renounce their rights, unless to do so would be contrary to the statute. It may be seen that it would be so, because of an express provision against 'contracting out', or because the provisions of the statute, read as a whole, are inconsistent with a power to forego its benefits: or the policy and purpose of the statute may show that the rights which it confers on individuals are given not for their benefit alone, but also in the public interest, and are therefore not capable of being renounced."
[75]
[37] The respondents assert that the legislation simply regulates and gives rights to parties to certain transactions, namely a contract between a solicitor and client, and that there is no public right invoked in that particular relationship. The respondents contend therefore that there are no public policy considerations involved and such an agreement would not be void on these grounds.
[76]
[38] Having found that there is no compromise agreement it is not necessary for me to determine the issue however it is clear that s 48I limits the amount recoverable by a firm
[77]
What is the maximum amount of fees and costs the firm is permitted to receive and recover for the work?
[78]
[39] Section 48I(1) of the Act provides that if there is no client agreement, the maximum amount of fees and costs the firm was permitted to charge and recover was either an amount calculated in accordance with the relevant scale, or in the absence of a scale, an amount assessed as a reasonable amount for the work by a tribunal costs assessor.
[79]
(1) The maximum amount of fees and costs a practitioner or firm may charge and recover from a client for work done is-
[80]
(a) an amount calculated in accordance with the client agreement between the practitioner or firm and the client for the work; or
[81]
(b) if there is no client agreement and there is a scale for the work provided under an Act - an amount calculated in accordance with the scale; or
[82]
(c) if there is no client agreement and there is no scale for the work provided under an Act - an amount assessed as a reasonable amount for the work by a tribunal costs assessor.
[83]
(2) However, a practitioner or firm may only charge and recover from the client for an extraordinary item of work if the extraordinary item is expressly authorised by the client after the practitioner or firm has warned the client that the item of work may not be recoverable from another party to the action or transaction.
[84]
(3) Subsection (2) does not apply if there is a client agreement for the work specifying a lump sum amount only.
[85]
extraordinary item of work means an item of work that would not normally be incurred in doing work similar to the work done for the client."
[86]
[40] Absent a client agreement, the amount recoverable is limited by reference to a scale or an assessment. It would seem to me that the Act specifically prohibits recovery of a greater amount regardless of the agreement of the client.
[87]
Is there a scale for the work provided under the Act?
[88]
[41] The applicants seek a declaration that in accordance with s 48I (1)(b) the maximum that may be charged is the amount calculated in accordance with the relevant Supreme Court Scale on the basis that there is a scale for the work provided under the Act.
[89]
[42] Is there such a scale as envisaged by the Act? Whilst there are scales in relation to the recovery of costs from another party in litigation set out in the schedule to the Uniform Civil Procedure Rules1999 (the "UCPR") the question is whether this is the scale which is referred to in s 48I.
[90]
[43] In Herald v Worker Bee (Brisbane) Pty Ltd[4] Fryberg J held that the scale in the UCPR is not a scale contemplated by that section. His Honour stated:[5]
[91]
"The scale is used for the purposes of assessing costs on a party and party basis and on the standard basis, that is, for assessing costs on the standard basis between parties.
[92]
It expressly does not apply to an assessment of costs as between a solicitor and his client."
[93]
Section 48(4) provides that a copy of any scale for the work provided under an Act must also be sent and the question was whether there was a scale which should have been sent. His Honour continued:
[94]
"To include it in the documents sent out with a solicitor's agreement would be, in my view, to create confusion. If the scale meant anything, it would be likely to convey to the client that the solicitor's fees would be calculated on the basis of it. If this scale is anything, it certainly is not that."
[95]
[44] The applicants contend that the alternative view is the correct one and that if there is no client agreement the solicitor should only be able to charge by reference to the scale that indicates the amount the client can recover form the other party. Counsel for the applicants cites no authority for this proposition but submits that at the time the provisions were introduced by the Civil Justice Reform Act 1998 there were no scales under legislation fixing solicitor-client fees and that Parliament should not be taken to be ignorant of this fact. Counsel also submits that any scale contemplated must have been a guideline scale only and that the UCPR scale is such a scale.
[96]
[45] The effect of this submission would seem to be that if there is no written client agreement then essentially a penalty applies as a consequence of such a failure. The consequence is that a solicitor could only charge his own client what could be recovered on a party and party basis which is a substantially lower figure. Such a provision would need clear and precise language. I do not consider that this is the intention of the section particularly given that s 48I(1)(c) provides that if there is no scale that applies then the amount that can be recovered is an amount assessed as reasonable by a costs assessor.
[97]
[46] I agree with the reasoning of Fryberg J that the scale referred to in s 48(1)(b) is not the scale in the schedule to the UCPR.
[98]
[47] The question still remains as to what is the maximum payment which can be claimed. The applicants seek in the alternative to a declaration that the maximum amount payable is the amount under the Supreme Court scale, a declaration that the maximum amount payable is an amount assessed as reasonable by a Tribunal Cost Assessor. It would seem clear that such an order would be appropriate in the circumstances.
[99]
[48] To facilitate such an assessment the applicants seek an order that the respondents deliver to the applicants a bill of costs in assessable form within 28 days.
[100]
Does the Court have power to order a legal practitioner to deliver a bill?
[101]
[49] The applicants seek an order that the respondents deliver a bill of costs in assessable form in compliance with s 48J(1) (b) of the Act. This section provides as follows:
[102]
"48J Prerequisite to legal proceeding to recover payment for work
[103]
(1) A practitioner or firm may start a proceeding in a court to recover fees or costs from a client only if the practitioner or firm has given the client an account that-
[104]
(a) is in a form agreed to in a client agreement between the practitioner or firm and the client; or
[105]
(b) clearly sets out all items of work done for the client and the amount charged (whether by way of fees or costs) for each item.
[106]
(2) Further, the practitioner or firm must obtain the court's leave to start the proceeding if-
[107]
(a) it is 1 month or less since the account was given; or
[108]
(b) the client has applied for an appointment by the clerk of the tribunal of a costs assessor to assess the account and the assessment has not concluded."
[109]
[50] It is clear from an examination of this section the section only applies if a legal practitioner is seeking to recover fees. This section then is clearly not the basis for the orders sought by the applicant.
[110]
[51] However, the Supreme Court retains a general jurisdiction in relation to the costs charged by solicitors and attorneys. The Court of Appeal in Merrin v Cairns Port Authority[6] stated:
[111]
"23. The question is whether this Court has power to make such an order. The procedure for taxing costs between solicitor and client in Queensland was formerly regulated by the Costs Act 1867, which has now been repealed and been replaced by the provisions in Division 6A of the Queensland Law Society Act 1952, which contemplates an assessment by a costs assessor. Section 48K(1)(a) provides that the court may itself appoint a tribunal costs assessor 'or another person' to assess a solicitor's account or bill; but the court in that context refers to the court in a proceeding by a practitioner to recover fees or costs, which is not this Court. On the other hand, a superior court like the Supreme Court, of which the Court of Appeal is part, has always, as Dixon J said, possessed:
[112]
"a jurisdiction to ascertain by taxation, moderation or fixation the costs, charges and disbursements claimed by an attorney or solicitor from his client and that jurisdiction is derived from three sources and falls under three corresponding heads."
[113]
His Honour then discusses those sources of which the first is the general jurisdiction over solicitors considered as officers of the court. He concludes by saying that after the Judicature
[114]
Act the existence of the Court's general jurisdiction was "completely established" by Re Johnson & Weatherall (1888) 37 Chancery Division 433, affirmed in Storer & Co v Johnson & Weatherall(1890) 15 App Cas 203. It concerned an application for taxation of part of a bill which, it had been held, fell outside the power to order taxation under the Costs Act 1867 or its English equivalent; but in respect of which it was nevertheless open to the court to exercise its general power of jurisdiction over the costs of the solicitors, enabling the court, as Dixon J has said, to regulate "the charges made for work done for attorneys and solicitors of the court in that capacity and to prevent exorbitant demands": Woolf v Snipes[1933] HCA 5; (1933) 48 CLR 677, 678.
[115]
The repeal of the Costs Act1867 has not removed that general jurisdiction of the Supreme Court to order taxation of the bill or account of a solicitor for the professional fees or services and disbursements rendered to a client. I consider that this jurisdiction should be exercised here to require Thompson & Royds to submit their bill of costs, charges and disbursements, referred to as a Costs Statement in the letter dated 28 August 2001 from that firm to the plaintiffs, for taxation, moderation or fixation by the Senior Deputy Registrar (Assessments) of the Supreme Court sitting in Brisbane."
[116]
[52] As this court retains its general jurisdiction in relation to costs I am satisfied that on this basis the court has power to order that the respondents deliver a bill of costs in assessable form.
[117]
[53] I am also satisfied that the court would also have power to appoint a tribunal costs assessor to assess an account and indeed s 48K(1) contemplates such an order.
[118]
[54] Whilst the court therefore has power to make either or both of these orders the question is what is the appropriate order in the circumstances?
[119]
[55] Pursuant to s 48I I consider that a declaration could be made in the terms sought in paragraph 2.2 of the application.
[120]
[56] The question then remains as to whether an order should be made that the respondents deliver a bill in assessable form to facilitate such an assessment.
[121]
Should the respondents be required to deliver a bill in assessable form or has payment of the accounts precluded a request?
[122]
[57] The applicants seek an order that pursuant to s 48J(1)(b) the respondents deliver a bill in assessable form. As previously indicated this is not the appropriate section. The question then remains whether such a request can be made by the applicants pursuant to r 84 of the Queensland Law Society Rules 1987. However it would seem clear that on the basis of Atlantic 3-Financial (Aust) P/L & Anor v Marler & Anor[7] the applicants have waived their rights to a bill of costs in assessable form being delivered by virtue of the payment of the respondents' accounts. In that decision, which related to a request to deliver a bill of costs pursuant to r 84 it was held that:[8]
[123]
"A client's position is protected by being able to require an account to be presented in a form agreed or as required by the Act before payment. If the legal costs are paid without recourse to such opportunity then it seems to me to be a prima facie waiver of the right and the position should not be reversed by the simple expedient of sending a request in writing."
[124]
[58] It is also clear that delivery of a bill in such a form will have a severe cost impact on the respondents given that the matter has been ongoing for a period in excess of seven years. It would also seem clear, having examined the nature of the accounts sent by the respondents, that they are in fact in a format which clearly sets out all items of work done for the client, the amount charged and who did the work. It would not seem reasonable in the circumstances to require further bills to be prepared given that they already contain sufficient details.
[125]
[59] The respondents submit that the declarations sought by applicants are not required given that the applicants already have entitlements under the s 6ZA(1) of the Act. I am not satisfied however that those provisions apply in the circumstances of this case where it has been held that there is no client agreement.
[126]
[60] Accordingly in all the circumstances I will make the following declarations.
[127]
(1) There is no client agreement in existence between the applicants and the respondents pursuant to s 48 of the Act.
[128]
(2) The maximum amount payable is an amount assessed as reasonable for the work by a Tribunal Costs Assessor pursuant to s 481(c).
[129]
[61] I do not consider it appropriate to make an order in terms of paragraph 4 of the application at this point in time but I will give the parties liberty to apply.
[130]
[62] I will hear the parties in relation to costs and as to the form of orders in relation to the appointment of a Tribunal Costs Assessor.