//
[2014] QDC 194
General information, not legal advice.
District Court of Queensland
2014-09-11
Original judgment source is linked above.
Uniform Civil Procedure Rules 1999 Rules 715, 717, , , , , , ,
Paroz v Clifford Gouldson Lawyers [2012] QDC 151
Connolly Lawyers Pty Ltd v Davis [2013] QCA 231
Wolfe v Willis [1911] HCA 51; (1911) 13 CLR 23
Body Corporate for Sunseeker Apartments v Jasen [2012] QDC 51
Southwell & Kennedy v Jackson [2012] QDC 65
Woolf v Willis [1911] HCA 51; (1911) 13 CLR 23
D.G. Ogle Pty Ltd v Bowdens (1979) Qd. R 507
Kennedy Miller Television Pty Ltd v Hancken, unrep, NSWSC 1.8.1997
Cassegrain v CTK Engineering (2008) NSWSC 457
Freeman v McNally & Anor [2003] NSWSC 780
Franklin v Barry & Nilsson Lawyers [2011] QDC 55
Willis v Edgar [1963] NSWR 664
COSTS - ASSESSMENT - Review of decisions of costs assessor in relation to a barrister and a solicitor - nature and extent of disclosure obligations under Legal Profession Act 2007 - consequences for non-compliance with disclosure obligations - whether barrister retained by a solicitor has an ongoing disclosure obligation under s 315 - onus of proof on assessment under s 341 - nature and extent of costs assessor's duty to give reasons - whether oral hearing should have been held - costs of the costs assessment.
[1] This is an application under r 742 of the Uniform Civil Procedure Rules 1999 ("UCPR") by Gregg Lawyers Pty Ltd ("the solicitor") and Ms Angela Julian-Armitage ("the barrister") for the review of decisions in respect of each included in two costs assessor's certificates of assessment.
[3] Both practitioners acted for the respondent ("the client") in property settlement proceedings instituted in the Family Court of Australia by her former husband.
[4] The retainers of the barrister and the solicitor were terminated by the client on 17 March 2011. Their fees relate to the work done up to then. Other practitioners acted for the client thereafter including the hearing of the matter in the Family Court in April/May 2012. Judgment was delivered by Murphy J on 6 July 2012.[3]
[5] The client entered into a costs agreement with the solicitor on 10 March 2010 which contained, as Schedule 5, a disclosure notice and offer to enter into a costs agreement, addressed to the solicitor by the barrister dated 9 March 2010 (The solicitor's disclosure notice refers to this schedule as the barrister's "fee disclosure and costs agreement").[4] Each agreement provided for an uplift fee.
[6] The solicitor's costs agreement was with the client and the barrister's was with the solicitor at rates accepted by the client in her agreement with the solicitor. This is consistent with s 322(1)(a) & (c) LPA. The client could have entered into a costs agreement with the barrister retained by the solicitor (s 322(1)(b)) but this wasn't how it was done here.
[7] The solicitor sent two bills to the client dated 30 September 2010 and 7 April 2011 respectively. The first did not claim the uplift fee but the second did for both bills.[5]
[8] The barrister sent two bills dated 26 October 2010 and 1 April 2011 respectively. The first was for the period 6 October 2009 to 18 October 2010 and was addressed to the client. The second was for the period 20 October 2010 to 24 March 2011 and was addressed to the solicitor and charged the uplift fee for both bills.[6]
[9] The client objected to these bills and her new solicitor, Michael Lynn of Lynn & Rowland, requested itemised bills from each practitioner.[7] These were not forthcoming and by application filed 22 July 2011 the client applied for an order for assessment of the costs charged by each and for directions.[8]
[10] Before the application was heard each practitioner, on 31 August 2011, delivered an itemised account based on their costs agreements.
[11] The solicitor's itemised account was for 22 October 2009 to 24 March 2011 and claimed[9]
[12] The barrister's fees were not included as a disbursement.
[13] The barrister's itemised account was for 6 October 2009 to 24 March 2011 and claimed[10]
[14] On 5 September 2011 at Southport, Judge Newton appointed a costs assessor in respect of both bills on the basis that the grounds of dispute related only to the amount of costs.[11] No other orders were sought or were made.
[15] On 30 January 2012 before the assessment commenced the solicitor withdrew the claim for an uplift fee and indicated that what was then claimed was $74,003.33 including GST and outlays.[12]
[17] The costs assessor concluded that costs were not recoverable by either practitioner under the costs agreements and assessed the costs payable by the client as follows
The client had already paid the solicitor $85,522.99 which meant the solicitor had a liability to repay the client $47,708.42.
The client had already paid the barrister $208,492.60 which meant the barrister had a liability to repay the client $154,031.21.
[18] These assessments are the subject of the combined Further Application for Review by the solicitor and barrister. On 14 September 2012 I ordered that the costs assessor deliver marked up itemised bills[17] and reasons for his decision in respect of each bill.[18] He did so, and for each of the solicitor and barrister it is necessary to read each of these documents together to gain an understanding of the costs assessor's approach.
[19] To also understand the issues raised on the review it is necessary to list the material which was before the costs assessor for the purposes of the costs assessment.
[20] The following documents were provided to the costs assessor by the parties
1. The solicitor's itemised bill dated 31 August 2011[19]
2. The solicitor's disclosure notice and costs agreement dated 10 March 2010[20]
3. The barrister's itemised bill dated 31 August 2011[21]
4. The barrister's costs agreement dated 9 March 2010[22]
5. The client's outline of argument dated 15 November 2011[23]
6. Notice of Objection by client to items in the solicitor's itemised bill dated 15 November 2011[24]
7. Notice of Objection by client to items in the barrister's itemised bill dated 15 November 2011[25]
8. Reply by the solicitor to 5 and 6 dated 30 January 2012[26]
9. Reply by the barrister to 5 and 7 dated 27 January 2012[27]
10. Client's response to solicitor's Reply (8) dated 1 March 2012[28]
11. Client's response to barrister's Reply (9) dated 1 March 2012[29]
12. The Gregg Lawyers file provided by Lynn and Rowland[30] described by the costs assessor as "the complete file"[31] and "the relevant file".[32] It was the cost assessor who described this as "the complete file of Gregg Lawyers Pty Ltd". In their letter forwarding it to the assessor Lynn and Rowland described it as "original file and documents of Gregg Lawyers Pty Ltd".[33]
15. Affidavit of John De Blonk Smith, the client's accountant and business advisor, sworn 22 February 2012.[34]
16. Affidavit of solicitor sworn 30 January 2012.[35]
17. Affidavit of client sworn 22 February 2012 responding to 16.[36]
18. Affidavit of barrister sworn 30 January 2012.[37]
19. Further affidavit of client sworn 22 February 2012 responding to 18.[38]
20. Further affidavit of barrister sworn 9 April 2012.[39]
21. A further affidavit of the solicitor sworn 10 April 2012.[40] This is not referred to by the costs assessor as one of the documents he received but there is a letter addressed to the costs assessor sending him the affidavit. The letter is incorrectly dated 24 January 2012 but the parties agree its correct date was 10 April 1012. The parties have proceeded on the basis that the costs assessor probably did receive the affidavit.[41]
[21] Document 37 is the client's folder of documents for the review and document 48, the lawyers.
[22] The costs assessment was governed by UCPR r 720 which provides, so far as is relevant
(1) A costs assessor appointed to carry out a costs assessment is to decide the procedure to be followed on the assessment.
(a) appropriate to the scope and nature of the dispute
(b) consistent with the rules of natural justice; and
_(4) Without limiting subrule (1) or (2), the costs assessor may decide to do all or any of the following - _
(b) carry out the costs assessment on the papers without an oral hearing;
(c) not be bound by laws of evidence or procedure applying to a proceeding in the court;
(d) be informed of the facts in any way the costs assessor considers appropriate;
[23] The costs assessor proceeded on the basis of written objections, outlines and responses. At no stage after he commenced his assessment did he seek further submissions, written or oral, nor was he asked to.
[24] Soon after 5 September 2011 the parties commenced to forward their material to the costs assessor. He advised the barrister (and presumably the other parties) by letter dated 19 December 2011[42] that he intended
to commence the assessment of this matter on the morning of 19 January 2012 (and) will not be receiving any further material after that date.
[25] By letter to the costs assessor written on behalf of the barrister and solicitor dated 18 January 2012[43] a request was made for
an extension of 7 days to deliver a response to objections before the assessment commences.
[26] This was opposed by the client.[44]
[27] By letter to the costs assessor dated 19 January 2012[45] the barrister and solicitor requested
an extension of time" (8 weeks) to "deliver their outline of argument and response to the client's notice of objection.
[28] By letter to the parties dated 23 January 2012[46] the costs assessor gave the lawyers until 30 January 2012 to make "further submissions", and gave the client until 13 February 2012 to make "submissions in response" and advised that
the assessment will commence when the further submissions of the client are received or alternatively on 13 February 2012.
[30] By letter dated 12 March 2012[49] Lynn & Rowland requested that "the costs assessment now commence".
[31] By letter to the parties dated 19 March 2012[50] the costs assessor gave the lawyers 21 days to make further submissions and advised that
at the conclusion of that period I propose to commence the assessment.
[32] It would appear that the costs assessment commenced on about 10 April 2012. This date is important because of Mr Amerena's submissions about what was then in issue or dispute, in particular, whether the "uplift fee' charged by the solicitor but withdrawn on 30 January 2012 was "legal costs" for the purposes of s 342(2)(a).
[33] The court's powers on review are in UCPR r 742 which so far as is relevant provides
(1) A party dissatisfied with a decision included in a costs assessor's certificate of assessment may apply to the court to review the decision.
_(2) An application for review must be filed within - _
(a) if reasons are requested under rule 738(1) - 14 days after the party receives those reasons; or
(b) otherwise - 14 days after the party receives the certificate.
(a) state specific and concise grounds for objecting to the certificate; and
(b) have attached to it a copy of any written reasons for the decision given by the costs assessor; and
(c) state any other matter required by a practice direction made in relation to this rule.
(4) The applicant must serve a copy of the application on all other parties to the assessment within 14 days after the application is filed.
_(5) On a review, unless the court directs otherwise - _
(a) the court may not receive further evidence; and
(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.
_(6) Subject to subrule (5), on the review, the court may do any of the following - _
(a) exercise all the powers of the costs assessor in relation to the assessment;
(b) set aside or vary the decision of the costs assessor;
(c) set aside or vary an order made under rule 740(1);
(d) refer any item to the costs assessor for reconsideration, with or without directions;
(e) make any other order or give any other direction the court considers appropriate.
[34] Upon the review a further affidavit of the solicitor sworn 1 April 2013 was allowed as further evidence excluding paras 12-36 and 38-40.[51]
Basis for assessing costs - costs agreements or s 341 LPA?
[35] If a costs agreement complies with relevant provisions of the LPA[52] it can be relied upon as the basis for charging, otherwise it can't be and the practitioner is restricted to costs assessed under s 341 LPA on the basis of what is a fair and reasonable amount. See s 319(1)(c) & s 340(1)(c). The costs assessor found both costs agreements to be non-compliant and the applicants contend he was wrong in that conclusion. The respondent contends his decision in each case was correct.
The structure of Part 3.4 LPA
_(1) A law practice must disclose to a client under this division - _
(a) the basis on which legal costs will be calculated, including whether a scale of costs applies to any of the legal costs; and
(i) negotiate a costs agreement with the law practice; and
(iii) request an itemised bill after receipt of a lump sum bill; and
(iv) be notified under section 315 of any substantial change to the matters disclosed under this section; and
(c) an estimate of the total legal costs if reasonably practicable or, if that is not reasonably practicable, a range of estimates of the total legal costs and an explanation of the major variables that will affect the calculation of those costs; and
(d) details of the intervals, if any, at which the client will be billed; and
(e) the rate of interest, if any, that the law practice charges on overdue legal costs, whether that rate is a stated rate of interest or is a benchmark rate of interest as mentioned in subsection (2); and
_(f) if the matter is a litigious matter, an estimate of - _
(i) the range of costs that may be recovered if the client is successful in the litigation; and
(ii) the range of costs the client may be ordered to pay if the client is unsuccessful; and
(g) the client's right to progress reports under section 317; and
(h) details of the person whom the client may contact to discuss the legal costs; and
_(i) the following avenues that are open under this Act to the client in the event of a dispute in relation to legal costs - _
(ii) the setting aside of a costs agreement under section 328;
(1) If a law practice intends to retain another law practice on behalf of a client, the first law practice must disclose to the client the details mentioned in section 308(1)(a), (c) and (d) in relation to the other law practice, in addition to any information required to be disclosed to the client under section 308.
(2) A law practice retained or to be retained on behalf of a client by another law practice is not required to make disclosure to the client under section 308, but must disclose to the other law practice the information necessary for the other law practice to comply with subsection (1).
(1) Disclosure under section 308 must be made in writing before, or as soon as practicable after, the law practice is retained in the matter.
(2) Disclosure under section 309(1) must be made in writing before, or as soon as practicable after, the other law practice is retained.
A law practice must, in writing, disclose to a client any substantial change to anything included in a disclosure already made under this division as soon as is reasonably practicable after the law practice becomes aware of that change.
[38] In the context of the present case, under div 3 of Part 3.4 LPA, before or as soon as practicable after the solicitor was retained by the client the solicitor was required to make written disclosure to the client of the matters referred to in s 308 so far as concerned the solicitor and the details mentioned in s 308(1)(a), (c) & (d) so far as concerned the barrister. The barrister was required to disclose those details to the solicitor but no time is specified for that disclosure, but it can be assumed that the barrister would have to provide them in time for the solicitor to comply with his obligation under s 310(2).
[39] A barrister directly briefed or retained by a client has the same disclosure obligations to the client as a solicitor, namely those specified in s 308.
[40] Leaving aside for the moment the question of whether s 315 applies also to a barrister retained by a solicitor, the LPA imposes certain adverse consequences on a law practice for "failing to disclose".
[41] In the present case the lawyers maintain that the solicitor was retained by the client on about 5 October 2009 and the solicitor (at the request of the barrister) retained the barrister on about 6 October 2009. The lawyers accept that they failed, until 10 March 2010, to comply with their div 3 disclosure obligations.
[42] Regardless of whether there is a costs agreement (as to which see div 5) if the solicitor and barrister did not make the disclosure to the client required by div 3, the client need not pay the legal costs unless they have been assessed under div 7 and the legal practitioner may not maintain proceedings against the client for the recovery of legal costs unless the costs have been assessed under div 7 (s 316 (1) & (2)). For present purposes this requires assessment by a costs assessor pursuant to s 341 and on such an assessment the amount of costs may be reduced by an amount considered by the costs assessor to be proportionate to the seriousness of the failure to disclose (s 316(4) & (5)(a)).
(4) If a law practice does not disclose to a client or an associated third party payer anything required by this division to be disclosed, then, on an assessment of the relevant legal costs, the amount of the costs may be reduced by an amount considered by the costs assessor to be proportionate to the seriousness of the failure to disclose.
_(5) If a law practice retains another law practice on behalf of a client and the first law practice fails to disclose something to the client solely because the retained law practice failed to disclose relevant information to the first law practice as required by section 309(2), then subsections (1) to (4) - _
(b) do apply to the legal costs owing to the retained law practice.
(7) Failure by a law practice to comply with this division is capable of constituting unsatisfactory professional conduct or professional misconduct on the part of any Australian legal practitioner...
[44] In the present case the client contends that the disclosure made by the barrister and solicitor on 9 and 10 March 2010 respectively was not "as soon as practicable after" each was retained and therefore all of their costs must be assessed by reference to what is a fair and reasonable amount and not partly also by reference to their costs agreements. The client also contends that all of the work the barrister did was pursuant to a direct brief from the client (that is, she was directly retained by the client) or alternatively that some was direct brief work and some was performed pursuant to a traditional retainer by the solicitor.
[45] The barrister and solicitor contend that the costs agreements by their terms cover fees from 10 March 2010 onwards and concede that because there was no complying costs agreement before then their legal costs for October 2009-10 March 2010 are to be assessed according to the fair and reasonable value of the legal services provided by them during that period.
[46] Each practitioner needs to be considered separately in the first place.
[47] Mr Coulsen submitted that the barrister at all times was retained directly by the client and as such, was herself required to, but did not, comply with the disclosure requirements of s 308 and has never complied with them. Mr Amerena submitted that there was no ongoing direct briefing after the solicitor was retained by the client, which he initially submitted occurred on or about 22 October 2009[53] but later agreed was about 6 October 2009.
[48] Mr Coulsen referred to the following evidence
• the barrister's first memorandum of fees (dated 26 October 2010) is addressed to the client at her home address and is for 6 October 2009 to 18 October 2010 which, he submitted, is suggestive of a direct brief for that period. The barrister's second memorandum of fees (dated 1 April 2011) is addressed to the solicitor and is for the period 20 October 2010 to 24 March 2011
• the barrister's fees were not included as a disbursement in the solicitor's itemised account
• a letter from the solicitor to the barrister dated 16 December 2009[54] gives the impression that each were acting independently for the client, with the solicitor attending to matters such as drafting documents, carrying out searches and the like. In that letter the solicitor asked the barrister to obtain certain details and particulars from the client and also enclosed a client agreement for signing by the client and asked the barrister "if Mrs Sweeney could put us in funds of $10,000 to cover initial search enquiry fees to be incurred". The letter concluded saying "We thank you for your instructions to date"
• many emails from the Gregg Lawyers file, ex 7A, some of which are also referred to in ex 6, were relied upon as supporting the fact that the barrister was acting directly for the client after the solicitor was retained and also after the barrister's disclosure letter to the solicitor of 9 March 2010 and was doing work normally done by a solicitor; in particular the following
• emails barrister to husband's solicitors 17.2.10, 19.3.10, 10.6.10, 15.7.10, 22.7.10, 4.8.10, 12.8.10, 8.9.10, 18.2.11, 21.2.11 and 22.2.11;
• emails barrister to solicitor 25.3.10, 29.4.10, 13.9.10, 5.10.10 and 16.2.11;
• email barrister to client's p.a. 20.1.11[55]
• the emails ex AJA1 to the barrister's first affidavit.[56] In her email to the solicitor dated 25 March 2010 the barrister refers to certain matters needing "to be done and sent tomorrow at the latest" and then says "If you can't do it let me know and I will attend to it just send me a letterhead"
• in her first affidavit[57] the barrister says that despite the solicitor being also engaged the client continued to deal personally with her and would call her direct. She says she received some 300 emails from the husband's solicitors, accountants, valuers and the like; professionals dealt with her not the solicitor; the client preferred to deal with her and not the solicitor and would "specifically and directly instruct her"
• in her second affidavit the barrister says that from the outset the client wanted to deal with her directly and the husband's solicitors "would also resort to me and cc Mr Gregg"[58]
• in his second affidavit the solicitor agreed that the client chose to deal with the barrister by contacting her directly and he received few direct communications from the client [59]
• in her Reply[60] the barrister said the client "...elected to direct brief (me) on many occasions" and she referred to her first affidavit at 48/240
• the fact that whilst the client initially denied "a direct dealing with the barrister as alleged" she then said the barrister "commenced acting for me on 6 October 2009 and the solicitor on 22 October 2009".[61] She said "the initial appointment for me to see the solicitor was made by the barrister. I was advised by the barrister that I needed a solicitor". She also said she "only met the solicitor three times, once when he attended a conference with the barrister at my home and on the Gold Coast and once in Brisbane with the barrister in late 2010". On one occasion the barrister said to her, with reference to the solicitor, "we don't have to use him, but he's good behind the scenes".[62] She also said the barrister was "insistent, saying she could not act for me unless a solicitor was engaged, however once engaged, she would act for me direct without requiring the services of Mr Gregg who would remain in the background... (She) made it clear to me that I was to deal with her alone and that I should not be concerned about Mr Gregg".[63] The barrister agreed she initially acted for the client without a solicitor being involved but matters reached a stage where "she felt it best that the client engage the services of an experienced solicitor" and the client "agreed instructing me to contact Mr Gregg".[64] This, she said, happened on 22 October 2009.[65] In her earlier Outline of Argument the client said "to a large extent the barrister dealt directly with (me) rather than on the instructions of the solicitor"[66]
• in his first affidavit[67] the solicitor said that the client "originally dealt with the barrister but I believe this was on an informal basis as the barrister contacted me in approximately October 2009 and requested that I become the lawyer for the (client) and under the (client's) instructions, engage the barrister to be counsel in the matter"
[49] Mr Amerena maintained that the barrister was retained by the solicitor on about 6 October 2009 but conceded "that she may have performed some minimal work (most of which was not charged) before she introduced the client to the solicitor.[68] He denied any direct briefing rather he submitted there was direct contact which did not change the nature of her retainer by the solicitor.
[50] The barrister's itemised account has her first chargeable contact with the solicitor as occurring on 22 October 2009 when she drafted an email to the solicitor,[69] but she in fact charged for two earlier items of work namely
This work was charged pursuant to the rates specified in her costs agreement.
[51] The solicitor's itemised account commences on 22 October 2009 with two items, namely
(1) perusing the email from the barrister requesting that he act for Ms Sweeney; and
(2) letter to Cassandra Pullos Lawyers (CPL) advising that Gregg Lawyers now act for the client and requesting they provide "us with a copy of their file".[70]
[52] The solicitor's file, ex 7A, indicates that the solicitor was in fact retained earlier in October 2009. On 5 October 2009 the client signed an authority for CPL to send the file to Mr Gregg. On 12 October 2009 the solicitor sent the authority to CPL and requested the file. I think the barrister is also mistaken about the date her retainer by the solicitor commenced.
[53] Any earlier direct brief by the barrister appears to have been for such a very short time as to be inconsequential. In any event the barrister does not appear to have charged for anything before 6 October 2009 and, if her affidavits are any indication, she seems to have had some dealings with the client before then. Notwithstanding the stated commencement date in the solicitor's itemised account, the documentary evidence supports the barrister's retainer by the solicitor as having commenced on about 6 October 2009. The barrister in fact purported to charge, pursuant to the costs agreement, from 6 October 2009[71] and her costs agreement is predicated on a retainer by the solicitor commencing in October 2009. The barrister's costs agreement is expressed to be pursuant to s 322(1)(c) LPA[72] i.e. one made between the barrister and the solicitor, not between the barrister and the client.[73]
[54] In my view the barrister was not acting within Rule 83 of 2007 Barristers Rule (the direct brief rule). She was not accepting "instructions directly from" the client but from the solicitor; she was conferring with, contacting or speaking directly to the client, the husband's solicitor and experts within the scope of her retainer by the solicitor. Rule 83 requires a barrister who proposes to accept instructions from a person who is not a solicitor to inform the prospective client in writing of certain specified matters and to obtain written acknowledgment, signed by the prospective client, that he or she has been informed of those matters.
• negotiate for the client with the opposing solicitor to compromise the case and carry out work properly incidental to that objective
• confer with the client, the instructing solicitor, prospective witnesses and experts
• examine documents provided by the instructing solicitor or the client, as the case may be and
• view things by arrangement with the instructing solicitor or the client as the case may be
[56] It is in this sense that the documents in ex 6 should be understood. They do not, in my view, evidence a direct brief rather they show the barrister acting as she was entitled to do pursuant to current rules. Mr Amerena correctly points out that every document referred to in ex 6 is found in the solicitor's file. They variously show the barrister keeping the solicitor informed of developments,[74] directly contacting the client,[75] negotiating with the husband's solicitor[76] and conferring with experts in the absence of the solicitor.[77] There is no rule prohibiting a barrister from having direct contact with the client in the absence of instructing solicitor.
[57] As to the barrister's statement in her Reply that the client elected to "direct brief me" on many occasions, I agree with Mr Amerena that what she was in fact referring to her was direct contact which is explained by her in her first affidavit.[78] Such direct contact did not change the nature of her retainer by the solicitor. I am unable to accept Mr Coulsen's submission that some of the work the barrister did was pursuant to a traditional retainer and some was pursuant to a direct brief.
[58] I think the barrister erred in sending her first account direct to the client, the mistake occurring probably because of the more direct personal relationship which she had with the client than with the solicitor. In the circumstances I am unable to conclude that it meant the barrister was directly briefed by the client for the period covered by her account. The barrister did much work for the client on her own initiative and had much ongoing direct contact with the client but, in my view, this was with the concurrence of the solicitor and was encompassed by her retainer by the solicitor notwithstanding the somewhat non-traditional way in which the barrister went about her work. She didn't comply with r 83 of the Barristers Rule for the simple reason that she was not directly briefed by the client.
[59] Once retained by the solicitor, the barrister was not required to make disclosure to the client under s 308 LPA[79] but was required to disclose to the solicitor in writing before, or as soon as practicable after, being retained,[80] the information necessary for the solicitor to disclose to the client the details mentioned in s 308(1)(a), (c) & (d) LPA in relation to the barrister.
[60] The barrister made disclosure of these details to the solicitor by letter dated 9 March 2010, which was included as a schedule in the solicitor's costs agreement with the client.[81] Of particular relevance to the present review are the following details
• all preparation including conferences and consultations would be charged at an hourly rate of $550 plus GST
• she reserved the right to charge an uplift fee of one third of the amount billed from time to time due to the complex financial nature of the matter
It is not reasonably practicable on the material presently to hand for me to estimate the total fees payable to me under this retainer. Doing the best I can, and having regard to my hourly rates, my daily rates, my expectation that a range of 10 to 15 days of preparation may be required, and my expectation that the hearing may take from 5 days, I estimate that the total fees payable to me under this retainer will be in the range $60,000.00 (plus GST) to $100,000.00 (plus GST.
Major variables affecting the calculation of these amounts were then specified.
[61] By itself s 316(4) seems to apply only to the solicitor because it is the solicitor who has the disclosure obligation to the client, including an obligation under s 315 to make ongoing disclosure. The barrister's disclosure obligation is to the solicitor who then passes it to the client.
[62] So far as a barrister retained by a solicitor is concerned s 316(5) extends the sub-section (4) consequence to the barrister limited though to a failure by the barrister to disclose to the solicitor what the barrister was required to do under s 309(2), namely, the basis on which legal costs would be calculated, an estimate or range of estimates of total legal costs and details of billing intervals.
[63] In the case of the barrister the costs assessor assessed all of her costs under s 341 (i.e. what was fair and reasonable) and he seems to have assumed there was also an ongoing disclosure obligation under s 315.
[64] In his reasons in relation to the barrister[82] the costs assessor said
I accepted the submissions in paragraphs 22-31 of the Outline of Argument and for the period to 6 October 2009 to 9 March 2010 assessed the (barrister's) fees according to what may be regarded as fair and reasonable...
I ... adopted ...$350 per hour plus GST as a reasonable rate.
This rate was adopted throughout the assessment for the reasons specified in para 19 and because of the (barrister's) breach of her continuing disclosure obligations.
[65] Paragraphs 22-31 of the client's Outline of Argument concede a retainer by the solicitor of the barrister commencing in October 2009 and contend there was then no compliance by the solicitor with s 310(2) and no disclosure "as required by the barrister until 9 March 2010, some 6 months after the barrister was retained in the matter" (see also para 54 of the Outline). The client submitted, for these reasons, that the barrister's fees for this period should be limited to what was fair and reasonable.
[66] In paras 19-21 of her Outline of Argument the client contended that she directly retained the barrister but only between "6 and 22 October 2010" [sic]. 2010 is obviously a mistake and should read 2009 (the mistake being confirmed in paras 1 and 2 of the Outline).
[67] In paras 32-36 of her Outline of Argument the client contended that the barrister was subject to an ongoing disclosure obligation and breached it by not disclosing the substantial increase in her estimated fees. This was the only reason the client contended the barrister could not rely on her costs agreement from 10 March 2010 onwards.[83]
[68] If the costs assessor accepted the client's submissions, which I have summarised, he was clearly wrong in thinking that a direct brief was contended for 6 October 2009-9 March 2010. Further, his reliance on para 19 takes the matter no further and if anything, highlights the flaws in his reasoning process (para 19 of his reasons merely recites s 341 LPA and para 19 of the client's Outline of Argument, if he meant that, refers to a direct retainer for 6-22 October 2009).
[69] Mr Coulsen's argument as to a direct brief for the entirety of the barrister's retainer or alternatively until 10 March 2010 is inconsistent with the client's case to the costs assessor that any direct brief was only between 6 and 22 October 2009.
[70] The costs assessor did not specifically identify the nature of the "barrister's continuing disclosure obligations" or particularise the manner in which the obligation was breached by her but the breach seems to have been failing to update the estimated fees payable under her retainer. This assumes that s 315 applies to a barrister retained by a solicitor.
[71] On its face s 315 seems to apply to a law practice, here the solicitor, which has a direct disclosure obligation to the client rather than the disclosure which a barrister retained by a solicitor is required to make to the solicitor.
[72] Whilst a barrister is clearly a law practice the disclosure "already made" by the barrister under div 3 is that required to be made to the solicitor under s 309(2) and not directly to the client.
[73] Mr Coulsen submitted that s 315 required the barrister to update the solicitor on any material change to the disclosure she had previously made under s 309(2) so that the solicitor could then update the client accordingly. This, he contended, required the barrister
(a) to disclose in writing the upward change in her fee estimates. Her first bill totalled $109,333.29[84] which far exceeded her original estimate; and
(b) to disclose in writing what Mr Coulsen referred to as the barrister's "creeping retainer", highlighting her appointment as a director of companies involved in the property settlement and related work which was not the subject of her initial retainer or of further disclosure by the barrister. Her work as a company director commenced early in her retainer. Her first charge for this work was for work done on 10 November 2009.[85] In her first affidavit[86] she says that "not long after being engaged in the matter the client told her she wanted her to be her alternate company director which she agreed to do and agreed to attend all board meetings". She did "this work in order to protect the client's legal interest in the Coral Homes companies..." (assets for the purposes of the property proceedings). In this capacity she contributed her "extensive legal and company directorship experience" charged at her legal costs rate. Exhibit AJA2 to her affidavit[87] contains emails relating to this work which she would have expected to perform from the time she became an alternate director.
[74] In one sense, because the company work performed by the barrister was not legal work and the fees charged were not legal costs, the work was not encompassed by her retainer or later costs agreement in which case it was not subject to the disclosure requirements of the LPA even if s 315 applied to a barrister retained by a solicitor. The barrister's bills included charges totalling $42,626.50 for this type of work. The barrister was entitled to charge for this work according to her normal fees as a barrister but was wrong, as I will mention later, to charge the work as legal costs in her bills to the client.
[75] In her Outline of Argument, the client said "no further disclosure (by the barrister) was made to (her) or the solicitor", other than that made on 10 March 2010[88] and that is clearly so.
[76] Section 315 does not seem to impose an ongoing obligation to disclose "any substantial change to anything included in a disclosure already made under div 3" on a barrister retained by a solicitor.
[77] A barrister retained by a solicitor "is not required to make disclosure to the client under s 308".[89] The barrister's disclosure obligation is to the solicitor and is limited to the details mentioned in s 308(1)(a), (c) & (d). There would appear to be no requirement that the barrister disclose to the instructing solicitor any substantial change to the disclosure already made by the barrister to the solicitor under s 309(2). Mr Amerena submitted that s 315 does not apply to a conventionally retained barrister and I am inclined to agree. He submitted that
a conventional barrister being under no obligation in the first place to disclose anything in writing or otherwise to the client, can hardly have an 'ongoing' obligation of disclosure to the client[90]
[78] Mr Coulsen was unable to identify any statutory provision requiring a barrister retained by solicitor to make ongoing disclosure, either to the instructing solicitor or the client.
[79] The barrister's disclosure obligation under div 3 ("this division- s 315") was that required by s 309(2) and included the basis on which the legal costs would be calculated and an estimate or range of estimates of the total legal costs. This was done by the letter to the solicitor which became schedule 5 to the solicitor's costs agreement[91] and was followed by her costs agreement which was between her and the solicitor, not her and the client.
[80] The solicitor is required by s 308(1)(b)(iv) to disclose to the client the client's right to "be notified under s 315 of any substantial changes to the matters disclosed under this section". This is not also part of the disclosure a barrister retained by a solicitor is required to make. The barrister's obligation is to disclose to the instructing solicitor those details mentioned in s 308(1)(a), (c) & (d) and not also (b). A barrister retained by a solicitor is not, as a result of s 309(2), required to make disclosure to the client under s 308.
[81] The only disclosure which the barrister had made (and was required to make) under div 3 for the purposes of s 315 was that which she had made under s 309(2) and that did not include an obligation such as is imposed on a solicitor under s 308(1)(b)(iv).
[82] Of importance, for present purposes, the solicitor's costs agreement provided as follows
(a) should the matter settle: $30,000 - $50,000 plus GST;
(b) should the matter go to trial: $100,000 - $150,000 plus GST;
3. circumstances which could cause these estimates to vary;
4. that the solicitor reserved the right to charge an uplift fee calculated at one third of the amount billed due to the complex financial nature of the matter.[92]
5. the solicitor would notify the client of any substantial changes to any matters disclosed under this notice.[93]
[83] In relation to 2 and 3, the costs agreement was in these terms
The estimated total amount of fees and outlays payable for the work to be performed for the client is between:- Due to the complexity and size of the matter we are unable to advise of what our professional fees will be but we approximate $30,000 - $50,000 should the matter settle and $100,000 - $150,000 should the matter go to trial.
The figure will vary depending on the amount of time that is required to complete the work, and that can vary depending on how frequently the client contacts the lawyers, how complex the matter becomes as a result of the actions of any other party, the need to gather additional evidence or unforeseen developments. The lawyers will provide the client with an updated estimate upon request during the course of the matter, and the lawyers shall notify the client of any substantial changes to any matters disclosed under this notice. Your Lawyers are not bound by the estimates given in this Notice.
[84] The matter did not settle. The solicitor initially rendered two bills,[94] the first dated 30 September 2010 for $53,619.33 and the second dated 7 April 2011 for $31,903.66, a total of $85,522.99. Neither bill charged an uplift fee. The first bill claimed:
[86] His retainer was terminated on 17 March 2011, well before the trial took place.
[87] In her Outline of Argument[95] the client submitted
[88] This is not entirely fair to the solicitor bearing in mind the qualified nature of his costs estimates. In his first affidavit[96] the solicitor said that his estimated professional fees "did not allow for the issues highlighted in de Blonk Smith Young's forensic report and the time and effort of working through all the financial records which was required after receiving the report" and the estimate "was delivered to the (client) without any contemplation of the complexities that were encountered." He also said "irregularities" were discovered and that it was "a large estate with voluminous relevant financial material and information that had to be assessed." In his second affidavit[97] he again said the "matter had unforseen complexities and difficulties unforseen by all parties". The impression I also get is that the client would have been aware of these emerging complexities and difficulties.
[89] Mr Amerena conceded that timely disclosure was not made by the barrister and the solicitor before 10 March 2010 thereby rendering each subject to s 316(4) in respect of charges for the period leading up to then. He conceded that they did not, as required by s 310(1) & (2), make disclosure "as soon as reasonably practicable" after being retained.
[90] By s 340(1)(c) a costs assessor
must assess any disputed costs that are subject to a costs agreement by reference to the provisions of the costs agreement... unless the costs assessor is satisfied that the costs agreement does not comply in a material respect with any disclosure requirements of div 3.
[92] Section 316 does not provide that non-compliance with any disclosure requirements (here that disclosure must be made as soon as practicable after the law practice was retained) prevents a costs agreement entered into later, after complying disclosure, from having effect. It provides certain other consequences such as non-recovery of costs unless first assessed under div 7 (i.e. what's fair and reasonable),a reduction in costs (because of non-disclosure), and/or the risk of a finding of unsatisfactory professional conduct or professional misconduct.
[93] For present purposes this has the consequence that the costs agreements so far as they concern the period between early October 2009 and 10 March 2010, do not comply in a material respect with the disclosure requirements of div 3, in particular s 310(1) for the solicitor, and s 310(2) for the barrister, in which case their costs for that period are to be assessed under s 341 according to what is fair and reasonable (and not the costs agreements) with the risk also of a reduction under s 316(4) and sanctions under s 316(7).
[94] Because of disclosure on 10 March 2010, the costs agreements ceased to be non-compliant for charges thereafter. The client was then informed in proper detail of what fees the practitioners would charge. That seems to be the purpose of div 3. The practitioners are penalised in respect of their charges before that date. If it were otherwise the practitioners would, for the entirety of their retainer, be prevented from the benefits associated with making proper disclosure to the client. Faced with that consequence, it is artificial to suggest, as Mr Coulsen did, that the practitioners should terminate their retainer and start afresh. The fact is that the barrister and solicitor are not able to charge pursuant to their costs agreements for the period up to 10 March 2010 not because there was no costs agreement covering charges for that period but because they did not until then comply with their div 3 disclosure obligations. The costs agreements are valid once the div 3 disclosure obligations were satisfied but only for fees from then on, not before. Those before are to be assessed according to what was fair and reasonable.
[95] The client appears to have accepted that this is how the disclosure requirements should be understood. In her Outline of Argument to the costs assessor[98] she submitted that the solicitor "made no disclosure as required until 10 March 2010, some 6 months after the solicitor was retained" and no "further disclosure was made to the client subsequent to 10 March 2010 despite the estimates initially provided and proving to be wholly inadequate". Also, Mr Lynn in his letter to the barrister dated 27 May 2011, ex 12, "noted" that her costs agreement commenced on 9 March 2010.
[96] It follows from what I have said, that I am unable to accept Mr Coulsen's argument that a failure to comply with disclosure requirements as soon as practicable after the practitioners were retained forever means they cannot charge pursuant to a subsequent costs agreement made after compliant disclosure.
[97] For the barrister the costs assessor correctly assessed her costs for the period 6 October 2009 to 9 March 2010 according to what was fair and reasonable, but for the wrong reasons; she was not in fact directly briefed for that period, rather her disclosure was non-compliant. His decision to effectively do the same for the balance of the retainer because of the barrister's "breach of her continuing disclosure obligations" was wrong. If he reached that conclusion because she continued to be directly briefed, he was wrong. If he did so because she was in fact retained by the solicitor after 9 March 2010 and was subject to continuing disclosure obligations, which she breached, he was also wrong. It follows that the barrister's costs for 10 March 2010 onwards should have been assessed according to her costs agreement and the costs assessor's decision to the contrary must be set aside.
[98] Mr Amerena also argued that up to March 2010 there should be no discounting under s 316(4) because no legal costs were "owing to the barrister" as they had already been paid and he referred to s 316(5).[99] What was owing by the client was what the costs assessor determined regardless of whether the amount initially charged by the barrister had been paid. There is no substance in Mr Amerena's argument.
[99] For the solicitor, the costs assessor, without saying why, assessed all of the costs claimed according to what was fair and reasonable and adopted the rate in fact charged by the solicitor of $400 per hour plus GST. He first specifically dealt with "work done prior to disclosure agreement" and found that between 22 October 2009 and 9 March 2010, the solicitor provided legal services "without having complied with its costs disclosure obligations under the LPA". He seems to have distinguished between work done before and after 9 March 2010, but has given no reasons for not assessing costs pursuant to the costs agreement after that date.
[100] Despite the submissions made to him by the client that he should, the costs assessor made no finding that the solicitor had breached his ongoing obligation of disclosure under s 315.
[101] His decision to assess costs for the solicitor up to 9 March 2010 according to what was fair and reasonable was correct but his apparent decision not to assess them pursuant to the costs agreement from 10 March 2010 was not and must also be set aside. Curiously in his reasons in relation to Items 1-57 of the solicitor's bill of costs (i.e. items up to and including 10 March 2010) he seems to have assumed a valid costs agreement thereafter even though he didn't give effect to it.[100]
[102] In any event I am not satisfied that the fees charged by the solicitor for the period after 10 March 2010 necessarily indicate that the very qualified estimates given by him on 10 March 2010 for a very large property settlement had substantially changed and that his costs agreement was non-compliant "in a material respect" (s 340(1)(c)). The matter was heading for a trial.
[103] In deciding on a fair and reasonable hourly rate the costs assessor reduced the barrister's rate from $550 p/h to $350 p/h but left the solicitor's at $400 p/h. Presumably (though this is by no means clear because he made no finding to this effect and gave no reasons), he considered such a reduction for the barrister to be "an amount... proportionate to the seriousness of the (barrister's) failure to disclose" (s 316(4) & (5)(b)). The absence of an equivalent reduction for the solicitor is consistent with the fact that the costs assessor made no finding that the solicitor breached his ongoing obligation of disclosure.
Onus of proof on costs assessment under s 341
[104] The barrister and solicitor each bore the onus of proving that
(c) the work was carried out in a reasonable way; and
(d) their costs were fair and reasonable.[101]
[105] In Wolfe v Willis [1911] HCA 51; (1911) 13 CLR 23 at 27 Griffith CJ said
The solicitor must prove that he did the work, and if the fact is denied, that it was necessary and proper to be done. That onus is usually discharged without any difficulty.
[107] Objections by the client of the nature summarised by Mr Amerena in his Outline,[104] viz
• it was not reasonable to confer for this length of time;
• work was not completed in a timely and efficient way;
• the cost of litigation has been unnecessarily increased by briefing counsel on a piecemeal basis;
• it is not reasonable to charge such a lengthy preparation fee;
• speaking with counsel on a regular basis is a luxury or over-cautious and not a reasonable cost;
• this is a claim for work which could have been done by solicitor.
raise issues to be considered in the usual way in a costs assessment, the onus being on the lawyer to establish that the work was done, that it was reasonable to do it, that it was done in a reasonable way and that a fair and reasonable amount should be allowed for it.
• insufficient details are provided to determine whether this is a reasonable charge, or
• there appears to be no evidence on the file to justify this attendance.
raise issues connected with the need for the legal practitioner to substantiate the work claimed so that the issues raised by s 341(1) LPA can be properly considered and determined. They do not, as Mr Amerena submitted,[105] shift the onus to the client, who cannot realistically say much more without first being provided with relevant details or evidence. As to "the file", it is clear that the costs assessor did not have it all but I will return to this aspect a little later.
[109] Suffice it to say that none of the objections or points taken by the client in relation to either the barrister or the solicitor shifted the onus of proof to the client. This was clearly the view taken by the costs assessor judging from his approach to the assessment even though he made no formal determination or ruling to this effect. In the case of the solicitor he referred to the client's assertion that the onus of proof was on him to justify the charges claimed[106] and to the need for an item to be "sustained by satisfactory documentary evidence" for it to be allowed.[107] Not even reasons such as these were given in the case of the barrister but it is implicit in his approach that the onus was on the barrister to prove her charges.
[110] Mr Amerena submitted that the costs assessor erred in his assessment of the solicitor's costs in that he failed to appreciate that he did not have all of the solicitor's file when he concluded that the file he did have supported the client's assertions to the effect that
there does not appear to be a file note to justify this attendance.__[108]
[111] Mr Amerena submitted that the file the costs assessor had was not "the complete file" (to use the words of the costs assessor[109]) and did not include the solicitor's file notes and WIP records which supported all of the attendances claimed. He submitted that the costs assessor "ought to have realised that he likely did not have the solicitor's documents, he only had the transferred client documents".[110]
[112] Mr Coulsen submitted that the onus was on the solicitor to provide his part of the file to the costs assessor so that his charges could be substantiated in circumstances where they were challenged by the client and if he chose not to do so he did so at his peril. [111]
[113] Mr Amerena submitted[112] that this was not done because there was no issue about whether the work was done, rather the issue was quantum only. This, with respect, confuses performance with substantiation of performance. Mr Coulsen was careful to eschew reliance on the former and submitted that the client was merely putting the practitioners to proof. He submitted that he was not contending that the work was not done, rather he said it "is a substantiation issue"; the client, by this objection, was putting the solicitor to proof that he did the work charged for.[113]
[114] In this respect the costs assessor was appointed to assess costs in circumstances where it was clearly apparent to the lawyers that the objections taken by the client were multi-faceted and raised issues beyond mere excessive charging for particular items.
[115] For those items in the solicitor's bill marked by the costs assessor with an asterisk (*),[114] the sole basis of the objection was the absence of "a file note to justify this attendance". Such an objection is a proper matter for consideration by a costs assessor.
[116] In the present case the costs assessor in conducting his costs assessment was required to consider whether or not it was reasonable to carry out the work, whether or not the work was carried out in a reasonable way and the fairness and reasonableness of the amount charged.[115] As part of his assessment the costs assessor may disallow or adjust an amount claimed or reject an objection.[116]
[117] In her response to the solicitor's Reply the client said
The onus of proof is on the solicitor to justify the charges claimed. There is no onus on the client and it is for the solicitor bears the [sic] onus of satisfying the Costs Assessor of the requisite matters to support the charges claimed with evidence acceptable to the Costs Assessor.[117]
[118] Contrary to Mr Amerena's submissions, it is clear that the costs assessor knew that the file/s he had were not in fact complete, notwithstanding that he said the client provided him with "the complete file of Gregg Lawyers Pty Ltd".[118] In her response to the solicitor's Reply the client further said
The objections were formulated and made after a detailed inspection of the solicitor's file (which has been submitted to the Costs Assessor) which file is incomplete in that there are gaps in the correspondence, no proper chronological sequence and does not contain any file note, time costing source records and scant evidence of the Applicant's instructions to the solicitor.[119]
[119] These paragraphs were reproduced in the costs assessor's reasons.[120] Notwithstanding the client's objections, of which the solicitor had ample notice, he failed to provide his file to the costs assessor. It was his to provide and a failure to do so placed him at risk of the client's objection being upheld and his claim being disallowed. However, "each case depends on its own circumstances and must be taxed accordingly".[121]
[120] The solicitor's explanation for not doing so is provided in his affidavit which was allowed as further evidence on the review.[122] He says this
[121] In ex JSG-1 the costs assessor confirmed that he "had the relevant file when conducting the assessment which was provided to me by Lynn & Rowland Lawyers".
[122] In addition, in his Reply to the client's objections, the solicitor said
The objections are robotic and boilerplate utilizing slogans without particularising any relevance to a particular item in the itemized bill of costs, e.g.
(i) 'the time claimed is excessive' slogan appears in over 200 of the objections, often as the only objection, without attempt to argue a particularised issue;
(ii) 'there appears to be no evidence on file to justify this attendance' slogan appears in over 100 of the objections, an apparent attempt to reverse the onus of proof.
In relation to (i) the parties have agreed to a unit of time as charged, and in relation to (ii) the financial and WIP records are part of the file, and from his general experience the Costs Assessor will determine from examining the totality of the file, whether a claim in the bill is sustainable.
[123] These two paragraphs were also reproduced by the costs assessor in his reasons.[123] The costs assessor was not provided with "the totality of the file" in order to enable him to determine whether claims were "sustainable" but it may be that what the solicitor said was an invitation to him to ask for the additional file if he had concerns about substantiation.
[124] The solicitor argues that the costs assessor appears to have, incorrectly, assumed that his file notes and WIP records "would be with the (file) he received from Lynn and Rowland". I don't think this is so; in fact it appears from what the costs assessor said in his reasons that he was quite aware of the fact that he had not been provided with supporting diary notes/documentary evidence.[124] He said, in relation to objections by the client because of the apparent absence of a file note to justify attendances
[125] The costs assessor did not in fact disallow the contested items because he said
[126] In effect he has accepted that the solicitor did the work but has punished him by reducing his claims because he didn't provide "satisfactory documentary evidence". Such an approach is, I consider, wrong.
[127] I agree with Mr Amerena that such a "global approach" on its face was arbitrary and had no regard to the merits of given objections to particular items.[126] When this was the sole objection a 50% reduction was made (items 30, 52, 54, 56, 119, 126, 129, 181, 184, 187, 188, 201, 210, 227, 233, 276, 278, 280, 287, 313, 318, 322, 368, 398, 399 & 407), yet when coupled with other objections less than a 50% reduction seems to have been made on this basis (see e.g. items 36, 51, 83, 91-94, 95, 96, 173, 232, 273 & 319). In some cases there was a 100% reduction (see e.g. items 65, 101, 103, 114, 115, 358-360) and in another, a one third reduction (item 32).
[128] The further evidence provided by the solicitor in his affidavit contains the necessary supporting documents sufficient to support the amounts claimed.[127] Where other reasons were also stated for reducing these amounts it is not possible to say to what extent they contributed to the reduction. These will have to be reconsidered but from the standpoint that the work has been substantiated.
[129] In relation to these the costs assessor said[128]
[130] Paragraph 18 of his reasons records what the solicitor said in his Reply[129] viz
[131] It is accepted that the solicitor mistakenly said here that his hourly rate was $300.00 when in fact it was $400.00 as is apparent from the itemised bill. The assessment by the costs assessor in fact proceeded on the basis of $400.00 per hour.
[132] In each case the objection by the client to these items was made solely in terms that the time claimed was excessive, or that objection combined with another, and in each case the objection was upheld.[130]
[133] Disallowance of Items 65, 114, 115 & 306 in their entirety is inconsistent with his earlier decision to give the solicitor the benefit of the doubt (to the extent of 50% of the amount claimed) for these items.
[134] In those other cases where the whole or part of the amount claimed was disallowed for a combination of reasons, including the absence of evidence of relevance, it has not been established that the costs assessor was wrong in the conclusion reached.
[135] Mr Amerena also criticised the blanket approach - the "total group" approach[131] - of disallowing all claims for perusal on the basis that perusing could have been done at the same time as searching. Other than to say that claims for searching and perusing were excessive and referring to para 18 of the solicitor's Reply, the costs assessor gave no reasons and in this respect I agree with Mr Amerena's submission that
Not all search results will be instantaneous. Perusal of the review of the search involves not merely reading the relevant page or pages but considering the adequacy and the significance of what the search results reveal. These are items of work where issues of complexity etc warrant greater care and consideration and time being given to ensure that there is an appropriately skilful discharge of professional duty in these tasks. As previously remarked, it does not appear Mr Campbell turned his mind to such relevant considerations.[132]
[136] Another objection taken by Mr Amerena to the "total group" approach was that it went beyond the objections taken by the client when what in fact the costs assessor should have done is approach each item by reference to the specific objection taken.[133] I think there is substance in this submission.
[137] In the case of items 3, 4, 95-96, 269, 329 & 330, these were either disallowed or reduced because the costs assessor upheld the client's objection that "the retainer is limited to investigating the affairs of the husband and not the company". This is demonstrably wrong. Beyond saying the client's objection was upheld "for reasons stated in the objection", realistically this would include the argument on the issue advanced on behalf of the client in paras 4 and 68 of her Outline of Argument.[134] Paragraph 4 alleges that the solicitor's costs agreement provided that the scope of the work was "to investigate the assets/liabilities of the husband and to take the matter to property settlement and/or trial if necessary"[135] and para 68 provides as follows
[139] Items 173, 232, 273 & 319 were subject to two objections each
• work of this nature is an administrative expense and the solicitor with the conduct of the file would be expected to be familiar with the file; and
• there appears to be no evidence on file to justify this attendance.
[140] I have already dealt with the second of these objections. As to the first objection, I agree with Mr Amerena that "the objection was all or nothing" and that by partially allowing the amount claimed (which is what the costs assessor did) the costs assessor accepted that each attendance was justified,[138] in which case there was no logical reason for reducing the amount claimed.
[141] Items 95, 96, 253 & 333 relate to charging for examining Coral Homes Pty Ltd information (95, 96), perusing financial reports (253) and perusing company tax returns (333). The objections taken for each are
It is an unnecessary duplication to peruse company records when a forensic accountant has been instructed to review the same. The review of company accounts is strictly in the professional capacity of an accountant and not in the professional capacity of a lawyer. The retainer is limited to that of reviewing the affairs of the husband and not the affairs of the company. This attendance is outside the scope of the retainer. There appears to be no evidence on file to justify these attendances. In the alternative the time claimed is excessive.
This claim was reduced from $3,200.00 to $1,600.00.
It is an unnecessary duplication to peruse these documents when a forensic accountant can be instructed to review the same. The review of these documents is strictly in the professional capacity of an accountant and not in the professional capacity of a lawyer. There appears to be no evidence on file to justify this attendance. In the alternative the time claimed is excessive.
This attendance is unrelated to the retainer. This attendance is not related to the professional services of lawyer but is rather in the capacity in the Accountant [sic]. The time claimed is excessive. There appears to be no evidence on file to justify this attendance.
I have already dealt with the objection alleging an absence of evidence on file to justify the claims.
In my view the claims of the solicitor were not unreasonable in the circumstances, there was no unnecessary duplication, it was reasonable for the solicitor to do the work and the solicitor's retainer was not limited as alleged. There was therefore no basis upon which the amounts claimed should have been reduced.
[142] This ground was raised in relation to the reasons given by the costs assessor for reducing the costs charged by each of the solicitor and the barrister.
[143] The reasons given by the costs assessor in some respects are difficult to understand and follow and Mr Amerena submitted that they are inadequate for three reasons
• the costs assessor did not refer to relevant evidence;
• he did not set out material findings of fact and any conclusions or ultimate findings of fact reached; and
• he did not provide reasons for making relevant findings of fact (and conclusions) and reasons in applying the law for the facts found.[139]
[145] Where the only objection to the solicitor's bill was that "the time claimed is excessive" this inevitably led to the amounts claimed being reduced, mainly by half with no reasons given in each case so it is not possible to say why this was done. All one can do is see what was done, not why. The following represents the costs assessor's decisions where the sole basis for the client's objection to the solicitor's claim was "the time claimed is excessive" (the costs assessor accepted as reasonable $400.00 hour for the purposes of his assessment and the actual assessment recognised that the figure of $300.00 per hour advanced by the solicitor was a mistake):[142]
Items 38-40, 53, 55, 56, 76-78, 80-82, 84, 85, 88, 97, 98, 104, 106, 109-112, 121, 127, 183, 207, 208, 213, 220-226, 228, 230, 242-244, 246, 248, 272, 274, 281-283, 285, 286, 291, 301-303, 308, 311, 312, 314, 315, 320, 334, 335, 337, 338, 340-343, 349, 351, 353, 365-367, 370, 371, 373, 378, 380, 383, 386, 387, 389, 391, 392, 394, 400-404, 408, 409, 411-417.
Claim disallowed entirely (even though the objection didn't go that far)
[146] No reasons were given for these reductions other than that the costs assessor said he relied on "the reasons stated in the objection" and "the matters referred to in paras 32 and 46 of my reasons". This is not particularly enlightening as all that is said in the client's objection is "the time claimed is excessive"; para 32 merely recites s 341 LPA; and para 46 effectively says the costs assessor adopted a rate of $300.00 per hour (actually $400.00 was adopted which was the rate actually charged by the solicitor) as a fair and reasonable rate. No other reasons are given. No reference, e.g., was made to number of pages, subject matter or complexity.
[147] For the barrister the equivalent objection was that "an hourly rate of $350.00 is more appropriate in the circumstances". In his reasons[143] the costs assessor referred to the upper limit of the Family Court party and party scale of $336.10 per hour (including GST) and adopted the rate contended for by the client of $350.00 per hour plus GST "as a fair and reasonable rate". He also relied on the barrister's "breach of her continuing disclosure obligations"[144] in arriving at the figure of $350.00 per hour but didn't state the amount of discounting for that. It may be that he considered that an amount more than $350.00 per hour would have been a fair and reasonable rate but because of the "breach of her continuing disclosure obligations" the rate was reduced to $350.00; it is not possible to say. I have already concluded that there was no breach by the barrister of any continuing disclosure obligation. The costs assessor gave no reasons for why he allowed a lesser hourly rate for the barrister compared to the solicitor or why he penalised the barrister but not the solicitor for breaching disclosure obligations.
[148] The costs assessor was of course entitled to draw on his own experience and expertise in the assessment of costs and was entitled to refer to the Family Court party and party scale (the original proceedings having been in that court)[145] but he was obliged to explain, in the assessment of lawyer and client costs as opposed to party and party costs, how he arrived at $350 per hour plus GST for a practitioner of the barrister's seniority and experience in a case of the size and complexity that this was.
[149] The following represents the costs assessor's decision where the sole objection was that the amount claimed was excessive and $350.00 per hour was more appropriate:
Items 16, 27, 40, 57, 81, 82, 99, 120, 136, 143, 145 (10 minutes each)
$92.00 (10 minutes at $550.00 per hour) was reduced to $33.67 rather than $58.33 (10 minutes at $350.00 per hour). $33.67 represents about $202.00 per hour.
$91.33 and $91.66 respectively were each reduced to $33.33 rather than $58.33.
Items 35, 52, 68, 95, 103, 109, 132, 148, 207 (20 minutes each)
Each was reduced to $67.33 or $67.83 or $66.67 rather than $116.66.
Items 22, 23, 31, 41, 62, 139, 150, 174, 178, 189 (15 minutes each)
Items 39, 42, 94, 96, 130, 156, 171, 177, 182, 185, 212 (30 minutes each)
Reduced to $187.50 which is more than half of $350.00.
Reduced to $1,500.00 rather than $2,625.00 (i.e. $200.00 per hour).
Reduced to $1,400.00 rather than $2,450.00 (i.e. $200.00 per hour).
Items 153, 159, 169, 170, 172, 173, 179, 180, 183, 190 (12 minutes each)
[150] I am at a complete loss to understand the costs assessor's reasoning process in relation to these items and I think Mr Coulsen also had difficulty fathoming the costs assessor's reasoning. The reductions bear no relationship to $350.00 per hour (or $350 plus GST per hour). His reasons were the same for each item, namely
The objection was acceded to or partially acceded to for the reasons stated in the objection and after consideration of the matters referred to in paras 19 and 23 of my reasons.
[151] In each case all the client's objection said was that "an hourly rate of $350.00 per hour is more appropriate in the circumstances"; para 19 merely recited s 341 LPA and para 23 referred to how he arrived at $350.00 per hour, which I have already mentioned. No other reasons are given.
[152] Where a costs assessor disallows or adjusts an amount claimed or accepts or rejects an objection he should, if asked (as he was here), set out in a form comprehensible to others "his reasons for each decision taken", otherwise an error of principle exists. "In most instances a word or two would suffice". The costs assessor should specify which "items have been reduced, by what amount and for what reason in each instance."[146] What is required in each case are brief succinct reasons explaining the costs assessor's decision. In the present case the costs assessor initially marked the result of his decision next to each item on the itemised bills and later gave his reasons. From what I have said so far his reasons are inadequate.
[153] In Body Corporate for Sunseeker Apartments v Jasen[147], the assessor gave no reasons and Judge McGill SC
• couldn't imagine how a deduction could have been arrived at, therefore whatever the assessor's reasons the decision was likely to be wrong; and
• couldn't work out the basis upon which some reductions were made from the amounts of the reductions
and I am basically in the same position. These conclusions were amongst those sufficient to justify interference in the costs assessor's decision in that case as they are in the present.
[154] I recognise that "a costs assessor is not a judicial officer and disclosure of his reasoning process is not required to meet what is expected of a court in a judgment".[148] Reasons though must be sufficiently precise to give meaningful content to the right of appeal.[149] "Uncertainty" about a reduction of costs may be a sufficient basis to interfere with an assessment.[150]
[155] Where an assessor disallows a particular item and gives no reason - "an unfortunate omission" - the disallowance may stand where the actual decision is not shown to be wrong or where such deficiency in the reasons is "not of such seriousness as to justify otherwise interfering in the assessment".[151] I am unable to put the present case into either of these categories.
[156] The errors in the costs assessor's reasons in relation to the solicitor are compounded by his apparent misunderstanding of the effect of non-disclosure.[152] Initially he seems to have indicated a different approach for the period before and the period after the costs agreement. His reasons in this section are headed "Work done Prior to Disclosure Agreement". He said he applied a fair and reasonable rate for the period 22 October 2009 to 9 March 2010 "which the solicitor conceded to be $300 p/h +GST". This concession was admittedly a mistake. In prefacing his reasons for assessing items 1-57 in the solicitor's Bill of Costs for this period he said
Refer to the comments in the Outline of Argument relating to the hourly rate that should be allowed prior to the commencement of the Costs Agreement.
[157] I have already referred to the fact that he assessed costs for the period after "the commencement of the costs agreement" by reference to what was fair and reasonable ($400 p/h + GST) and not by reference to the costs agreement.
Complexity and difference in rates allowed for solicitor and barrister
[158] This is no longer an issue in the solicitor's case because the costs assessor accepted the solicitor's charged rate of $400.00 per hour.
[159] For the reasons which I have already mentioned[153] he reduced the barrister's hourly rate from $550.00 p/h + GST to $350.00 p/h + GST. In doing so he said he accepted the submissions made in the client's Outline of Argument, paras 22-31, "according to what may be regarded as fair and reasonable" [sic].[154] These referred to the barrister's non-compliance with disclosure requirements, the Family Court party and party scale and, in particular
• the absence of any complexity in the issues to be considered;
• counsel's seniority and experience in the area of family law; and
• the fees ordinarily charged by counsel at the Queensland bar at the time.
[160] The costs assessor made no findings about these particular matters beyond saying he "accepted the submissions".[155]
[161] No reference was made to the barrister's argument that $550.00 p/hr was reasonable for counsel of her expertise and experience "and is comparable to the fees charged by the client's counsel, $550.00 p/h, for preparation and appearances at the hearing on 5 September 2012 before Newton DCJ".[156] Mr Coulsen conceded that counsel who appeared before Judge Newton charged $550.00 p/h. He also conceded that the costs assessor had no evidence of comparable barristers fees.
[162] Before the assessment commenced the solicitor advised the costs assessor by letter dated 5 September 2011 that the "financial records were extensive" and the property proceedings involved "great complexity in unravelling past transactions" of the client and her husband.[157] In a further letter to the costs assessor dated 19 January 2012[158] the solicitor said
[163] Lynn and Rowland asserted to the costs assessor[160] that the question of complexity was one which was to be determined by him under s 341 LPA. That was the way the matter seems to have proceeded, except that the costs assessor at no stage specifically dealt with the issue of complexity or made any finding about that issue.
[164] The solicitor also exhibited the reports of the accountants de Blonk Smith Young and Vincents to his second affidavit. Neither of these, nor what the solicitor said about complexity, were referred to by the costs assessor.
[165] The matter clearly was complex and any implicit finding by the costs assessor to the contrary is wrong.[161] The judgment of the Family Court of Australia[162] highlights this. At trial the parties were some $7m apart in their valuations of the net assets pool. By the 2004/05 financial year the relevant business had a turnover of $175m and net profit before tax of $10m within the entities comprising it. The husband was represented by senior counsel who produced a table of "comparable big money cases". Of the seven cases in the table only possibly two exceeded the assets pool of the present case.
[166] In para 23 of his reasons the costs assessor said he accepted the client's submissions in paras 22-31 of her Outline of Argument "and for the period 6 October 2009 to 9 March 2009 assessed the barrister's fees according to what may be regarded as fair and reasonable" and after referring to the Family Court party and party scale adopted the rate of $350.00 p/h contended for by the client as a reasonable rate. He referred to the Family Law Scale as "the applicable scale" without apparently recognising that it was a party and party and not a lawyer and client scale. He then said
This rate was adopted throughout the assessment for the reasons specified in para 19 and because of the barrister's breach of her continuing disclosure obligations.[163]
[167] No reasons are "specified in para 19". Paragraph 19 merely sets out s 341 LPA following which the costs assessor said (in para 19)
The assessment was made otherwise as particularised in para 23 hereof[164]
[168] I have already referred to s 341(1). Section 341(2) provides that in considering what is a fair and reasonable amount of legal costs the costs assessor may have regard to any or all of the following matters, so far as are relevant
• whether the law practice/legal practitioner complied with the Act;
• any disclosures made by the law practice under div 3;
• the skill, labour and responsibility displayed by the legal practitioner;
• the retainer and whether the work done was within the scope of the retainer;
• the complexity, novelty or difficulty of the matter;
• the work was complex, complicated and unforeseen requiring a higher degree of care, consideration and attention;
• comparable rates charged by other counsel of similar seniority supported her charges;
• not even in the initial stages was the matter simple due principally to the size of the assets pool or the level of animosity and acrimony between the parties;
• complexity was introduced by the de Blonk report.
[170] The costs agreement of junior counsel who replaced the barrister was tendered on the review.[166] His charges were
• conferences and consultations - $400.00 p/h + GST;
• minimum fee of $750.00 for any mention, conference or written advice;
• daily fee for court appearance (not on trial) - $2,400.00 - $3,600.00 + GST
• any necessary preparation, conference and consultations - $400.00 p/h + GST.
[171] $550.00 p/h + GST charged by the barrister is less that the minimum conference fee of $750.00 charged by her replacement. Suffice it to say that inadequate reasons were given by the costs assessor for concluding that an hourly rate of $350.00 p/h + GST for the barrister was fair and reasonable. A fair and reasonable hourly amount should have been no less that the $400.00 p/h + GST allowed for the solicitor. The solicitor was not penalised under s 316(4) LPA for his failure to disclose yet the barrister was. No reasons were given for this differentiation. The barrister appears to have taken the lead role in acting for the client and she was a more experienced family law practitioner than the solicitor. In fact, the solicitor said he "did not specialise in the area of family law" but had "experience in sizeable complex commercial litigation matters".[167] It was a complex matter and was much more involved than first thought. There was much material to consider. The reduction on account of s 316(4) is not necessarily from $550.00 p/h + GST but from an amount determined to be a fair and reasonable amount which may be $550 p/h or an amount less than $550.00 p/h. Section 316(4) deals specifically with the "effect of failure to disclose" whereas s 341(2)(b) provides that in considering what is fair and reasonable the costs assessor may have regard to any disclosure (in fact[168]) made by the barrister under div 3 which is not the same as disclosure required to be made but not made which is what s 316(4) deals with. I can accept that non-disclosure by the barrister could, via s 316(4), lead to a reduction in the hourly rate but the other reasons advanced by the client do not warrant a reduction to the extent determined by the costs assessor. What the reduction should be, I am not without more, able to say.
[172] I agree though with Mr Amerena's submission that the consequences of a failure to make disclosure should "not sound in arbitrary reduction of the client's liability to pay for legal costs". [169]
Natural justice - whether oral hearing should have been held
[173] Mr Amerena submitted[170] that the rules of natural justice supported an informal oral hearing by the costs assessor under UCPR r 720[171] because of the various disputed issues. Such a hearing, he submitted, would have enabled the costs assessor to resolve conflicting accounts and conflicting conclusions of fact, otherwise he risked resolving matters by making unwarranted assumptions.
[174] Mr Amerena submitted that the following matters suggested that an oral hearing should have been held
• the lack of substantiation for items in both bills;
[175] Mr Coulsen on the other hand submitted that each practitioner was "given every opportunity to put material before the assessor (and) the case now seems to be that they didn't understand the gravity of the dispute and now seek to run the case that should have been run in the first instance".[172]
[176] I agree with Mr Coulsen. Where matters seemed to require more details or information the costs assessor could have asked for that and a decision in the absence of such further material exposed his reasoning process to legitimate criticism on the basis of flawed reasoning. An oral hearing though was not necessary. The necessary information could have been obtained by other means.
[177] There was no application for any other issues to be tried before the costs were assessed or to give the costs assessor any additional powers,[173] notwithstanding that Mr Lynn deposed as follows in his affidavit filed in support of the application:
[178] This clearly gave the solicitor and the barrister notice in general terms of what was in dispute.[175]
[179] Correspondence exhibited to Mr Lynn's affidavit also put the lawyers on notice as follows:
[180] Leading up to and during the costs assessment the costs assessor did not consider he should, under UCPR r 717, decline to decide any issue or question arising in relation to the assessment, including issues such as those just mentioned.
[181] The possibility of an application under r 715 UCPR[177] was raised by the solicitor on 5 September 2011 in a letter to the costs assessor but was not pursued.[178] In a further letter to the costs assessor dated 16 April 2012[179] the solicitor advised he was proceeding with an application for a declaration in relation (inter alia) to the unforeseen complexity of the property settlement proceeding. The costs assessor responded by saying that any such application "is a matter for the parties".[180] No such application was ever made.
[182] At one point the client suggested that if the costs assessor felt he could not proceed without further documents (in particular highly confidential financial documents relating to the affairs of the client and the husband) "that could be dealt with at that time under r 720"[181] and he could ask for them.
[183] Finally, the costs assessor records in his reasons in relation to the barrister that she "was requested on three occasions to provide electronic copies of the material she relied upon" but she 'did not respond to any of the requests".[182]
[184] Section 342 provides
(1) A costs assessor must decide the costs of a costs assessment.
_(2) Unless the costs assessor otherwise orders, the law practice to which the legal costs are payable or were paid must pay the costs of the costs assessment if - _
(a) on the assessment, the legal costs are reduced by 15% or more; or
(b) the costs assessor is satisfied the law practice failed to comply with division 3.
(3) Unless the costs assessor otherwise orders if, under subsection (2), the law practice is not liable to pay the costs of the costs assessment, the costs of the assessment must be paid by the party ordered by the costs assessor to pay those costs.
[185] Mr Amerena submitted that charges by the barrister for directors fees and the charge by the solicitor of an uplift fee should be disregarded in calculating the percentage required for s 342(2(a). I will consider each separately.
[186] These are items 5, 55, 78, 112, 143a, 144, 149, 155, 161, 166, 176, 192, 203, 211 & 217 in the barrister's bill[183] and total $42,626.50 and relate to work by the barrister (after her retainer commenced) as the client's alternate director of companies involved in the property settlement at the client's request "to ensure her legal interests were protected "[184]
[187] In her Outline of Argument[185] the client objected to these charges as work done in breach of r 78 Barristers Rule and beyond the terms of her instructions. The client contended the work was not barrister's work "and was done without her instructions or knowledge and was unnecessary in the circumstances".[186] I cannot accept the statement that the barrister became an alternate director of the companies unbeknown to the client. Further details of the client's objections are contained in her Notice of Objection as follows:
Refer to Outline of Argument regarding breach of the Rules.
Refer to the Outline of Argument regarding breach of the Rules.
This is a claim for work done which could have been undertaken by the solicitors. Further, the assessor is requested to verify that Counsel had instructions to attend the Board Meeting.
In the alternative, it was not reasonable to confer at this stage or alternatively for this length of time. The conference is a mere luxury.
In any event, it is submitted that an hourly rate of $350.00 p/h is more appropriate in the circumstances.
Refer to the Outline of Argument regarding breach of the Rules.
This is a claim for work done which could have been undertaken by the solicitors. Further, the assessor is requested to verify that Counsel had instructions to attend the Strategic Planning Meeting.
In the alternative, it was not reasonable to confer at this stage or alternatively for this length of time. The conference is a mere luxury.
In any event, it is submitted that an hourly rate of $350.00 p/h is more appropriate in the circumstances.
Refer to the Outline of Argument regarding breach of the Rules.
This is a claim for work done which could have been undertaken by the solicitors. Further, the assessor is requested to verify that Counsel had instructions regarding Board matters.
In any event it is submitted that an hourly rate of $350.00 p/h is more appropriate in the circumstances.
Refer to the Outline of Argument regarding breach of the Rules.
In any event, it is submitted that an hourly rate of $350.00 p/h is more appropriate in the circumstances.
Refer to the Outline of Argument regarding breach of the Rules.
This is a claim for work done which could have been undertaken by the solicitors. Further, the assessor is requested to verify that Counsel had instructions to attend the Strategic Planning and Board Meeting.
In the alternative, it was not reasonable to confer at this stage or alternatively for this length of time. The conference is a mere luxury.
In any event, it is submitted that an hourly rate of $350.00 p/h is more appropriate in the circumstances.
[188] The costs assessor "upheld the client's objections for the reasons stated in the Outline and the Notice of Objection" and disallowed the items claimed.[187] He gave no further reasons, which is not satisfactory or sufficient bearing in mind the various objections of the client.
[189] On 16 July 2013 I determined that these items were not "legal costs" rather they were director's fees and should have been separately claimed as such and should not have been claimed as legal costs. In div 7 "client" is defined as a person to whom or for whom "legal services" are or have been provided (s 334). "Legal services" is defined in sched 2 as "work done or business transacted in the ordinary course of legal practice". "Legal costs" for the purpose of divs 3 & 7 is not defined but realistically must mean the costs for legal services. In her Outline of Argument[188] the client agreed these charges were not "legal costs". She said they
were not related to the professional work to be done under the costs agreement.
[190] In her Memorandum of Fees dated 26 October 2009 and 1 April 2011 the barrister included, as legal fees, charges for this work as if it was legal work.[189]
[191] In her affidavits sent to the costs assessor the barrister defended the charges in her bills for director's work and sought to uphold them. She was appointed an alternate director to "protect the interests" of the wife in assets the subject of the property settlement proceedings and "it is without question that I would be paid for my attendances".[190] She also said[191]
[192] The barrister's itemised account claimed the fees as legal costs ("professional fees") and this account appears to have been prepared by the same costs consultants who prepared the solicitor's itemised account.[192] The itemised account was signed by the solicitor "for and on behalf" of the barrister and the barrister adopted it for the purposes of the costs assessment. The costs assessor was appointed to assess the costs claimed in this account. All accounts sent by the barrister claimed these fees as properly chargeable pursuant to her costs agreement. They were also included in the calculations of the uplift fee.
[193] The barrister clearly went to the costs assessment claiming her charges for director's work as legitimate legal costs, and in those circumstances it was appropriate that the costs assessor determine that the fees were not claimable as legal costs.
[194] The fees charged for director's work were, therefore, proper matters for the costs assessor to consider as part of his assessment and the determination I made on 16 July 2013 did not mean otherwise. This did not though convert director's fees claimed as legal fees into legal costs for the purposes of s 342(2) because clearly they were not and the 15% rule applies only to a reduction of "legal costs".
[195] Accordingly, the amount by which the barrister's costs were reduced because of the disallowance of these charges was not a matter which the costs assessor could, under s 342, take into account in determining who should pay the costs of the assessment.
he did not charge the uplift fee in the costs agreement to the client and hereby withdraws the claim for same ($27,002.00) inserted by its costs consultants on the last page of the itemised bill.
[198] The uplift fee was claimed when the costs assessor was appointed to assess the costs claimed by the solicitor in his itemised account.
[199] "Costs assessment" means an assessment of legal costs under Div 7. The costs assessor commenced his costs assessment on about 10 April 2012 at which time the claim for the uplift fee had been withdrawn and it was not necessary for the costs assessor to consider the matters referred to in s 341 in relation to it. The legal costs to be considered by the costs assessor on the assessment did not, in my view, include the uplift fee. That fee formed no part of his costs assessment and is not to be considered as part of any "legal costs" reduced by 15% or more for the purposes of s 342(2).
[200] In relation to the barrister, the costs assessor did not, in his determination that she pay the costs of the assessment, rely on any failure to comply with div 3 (s 342(2)(b)).
[201] In relation to the solicitor, the costs assessor made much of his claim for an uplift fee and his attempt to blame it on his costs consultant. There was also no reliance on any failure to comply with div 3.
[202] In any event an order as to the payment of costs under s 342 is discretionary and requires a consideration of the various issues involved in the assessment and the extent to which the parties have succeeded or failed on those issues.
[203] For these reasons the decision of the costs assessor in each case must be set aside, but it is not possible without further submissions to make any other orders at this stage.
1. The decision of the costs assessor in each case will be set aside.
2. Within 28 days of today the applicants are to file and serve written submissions as to what further orders should be made.
3. Within 56 days of today the respondent is to file and serve a written response to the submissions of the applicants.
4. Within 70 days of today the applicants are to file and serve a written reply to the response of the respondent.
5. Each party is given liberty to apply on 3 days notice.
6. The further hearing of the application is adjourned to a date to be fixed.
[7] Section 322(1) Legal Profession Act 2007 (LPA) and ex 12 paras 7 & 12
[13] Which he commenced in about April 2012, see letter dated 17 April 2012, 37/50
[15] See Cost Assessor's Certificate dated 23 July 2012 at 37/346, UCPR r 737
[16] See Cost Assessor's Certificate dated 20 July 2012 at 37/344-5, UCPR r 737
[17] These are at 37/278-324 (solicitor) and 37/325-343 (barrister). See UCPR r 738
[18] These are at 37/421-532 (solicitor) and 37/348-420 (barrister). See UCPR r 738
[40] The affidavit is included in 48 at pp 35-153
[41] See ex 2A and T12-26, 27 and the order of Robin QC, DCJ, ex 3 para 3(b)
[55] The Gregg Lawyers file, ex 7A, was not before the costs assessor but he could, and should have, asked for it.
[61] She used the same dates in her Outline of Argument, 37/128, para 19. I think it likely that she has merely taken these dates from the barrister's and the solicitor's itemised accounts and has no personal recollection of the dates.
[62] Affidavit, 37/226, paras 4(a), 8, 32(a) & (b)
[63] Affidavit, 37/236, paras 11(c), 23(d)
[73] The client signed the solicitor's costs agreement which included Sch 5 of the barrister's offer/agreement, 37/1-10
[74] ex 6, items 12, 13, 16-19, 21, 34, 36, 40, 51-53 and cc'd items 22, 37-39, 42-50, 54 and 55 for example, are communications between the barrister and the solicitor or vice versa and are not inconsistent with the existence of a traditional retainer
[75] ex 6, items 1, 2, 4-7, 13, 16 and 19
[76] ex 6, items 3, 20, 22, 23, 28, 31-33, 35, 38, 39, 41-47, 49, and 54-56
[77] ex 6, items 24, 25, 27, 30, 48 and 50
[78] 48/240, paras 6, 10-16, 20-22, 24 and 31
[79] Section 309(2) LPA
[80] Section 310(2) LPA
[81] 37/8. A barrister retained by a solicitor is not required to make disclosure directly to the client.
[83] See also Mr Lynn's letter to the barrister dated 27 May 2011, ex 12, referred to in para [179] hereof
[92] This was not though an "uplift" fee as defined in s 300 LPA as the costs agreement was not a conditional costs agreement. The uplift fee in the present case is better described as a complexity fee. Schedule 3 of the costs agreement reserved to the solicitor the right to charge an uplift fee "due to the complex financial nature of this matter"
[93] An equivalent para to no. 5 is not part of the barrister's costs agreement
[101] Section 341(1) LPA
[106] 37/445 para 26. He also referred at 37/444 para 16(ii) to the solicitor's assertion that in some cases the client was attempting to reverse the onus of proof.
[109] 37/425, para 12(ii) and 37/352, para 12(ii)
[116] See e.g. Body Corporate for Sunseeker Apartments v Jasen [2012] QDC 51 at [51] and Southwell and Kennedy v Jackson [2012] QDC 65 at [31]
[121] D.G. Ogle Pty Ltd v Bowdens (1979) Qd. R 507 at 513 per Lucas J
[135] See though the full extent of the retainer in Sch 1 of the costs agreement at 37/7. The barrister's agreement involved work pursuant to this retainer.
[136] Ex 13, see also 47/paras 139-142
[141] 49/paras 137, 139. The solicitor's marked up bill is at 37/278-325 and the barrister's is at 37/325-342.
[145] See by analogy Franklin v Barry & Nilsson Lawyers [2011] QDC 55 at paras [121] - [138]
[146] Body Corporate for Sunseeker Apartments v Jasen [2012] QDC 51 at [51]; Kennedy Miller Television Pty Ltd v Hancken, unrep., NSWSC, 1 Aug 1997 at pp 29-30 & 34-36 and on appeal (1998) 43 NSWLR 729 at 735-7 and Cassegrain v CYK Engineering [2008] NSWSC 47 at [90].
[148] Freeman v McNally & Anor [2003] NSWSC 780 at para 18. See also Willis v Edgar [1963] NSWR 664 at 669.
[149] Cassegrain, supra at [81]. This is so notwithstanding that Cassegrain dealt in part with the specific requirements introduced by the Legal Profession Act 2004 (NSW) that a costs assessor give relatively detailed statements of reasons.
[151] Southwell & Kennedy v Jackson [2012] QDC 65, at [31 and [32], McGill DCJ
[152] Reasons 37/455 paras 45 & 47 (Objection No. 2)
[153] Para [147] hereof. See also paras [166]-[171] hereof.
[159] See also para [88] hereof for further details of what the solicitor said about complexity.
[160] Letter dated 16 April 2012, 37/47
[161] In this respect I agree with the submissions of Mr Amerena in his Outline 47, paras 102-107
[166] ex 5. See also Mr Lynn's affidavit ex 4
[167] Solicitor's affidavit, 48/35, para 9
[173] See UCPR rr 743G(2)(d), 715, 714
[176] i.e. it was not barrister's work.
[177] For the court to give the costs assessor the powers of an assessing registrar under r 714
[184] Barrister's affidavit, 48/240, para 26
[185] 37/138-9, paras 42 and 43. See also para [137] hereof for further details
[188] 37/146, para 68 (see para [137] hereof)
[189] Affidavit of Michael Lynn, ex 12, para 10
[192] See both accounts at 37/62 and 109 and the solicitor's Reply 48/6
[194] See 37 at p108, dated 31 August 2011
Gregg Lawyers Pty Ltd & Anor
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(1998) 43 NSWLR 729
(1911) 13 CLR 23