1 The main issue in this case is whether a lawyer, having rendered accounts which were appropriate for the services performed, and having informed his client when rendering the accounts that a discount will be given, can revoke the discount and insist upon payment of the total amount of the accounts.

2 The discount was given because of a longstanding friendship between the lawyer and his client. It was not given on the usual condition that the accounts be paid within a specified period of time.

3 The applicant Mr. Horesh provided legal services to Mr. Leibush Lichtenstein.

4 Mr. Horesh rendered three accounts, all dated 25 January 2005, totalling $4228.41. The accounts were in taxable form, in the sense that an amount of money was allocated to each item of work. In a covering letter to Mr. Lichtenstein of the same date, Mr. Horesh said:

"You will note that, due to our longstanding friendship, I have substantially reduced the total of my professional costs in acting for you in these matters and I would therefore appreciate payment at your early convenience."

5 After taking a minor adjustment into account, Mr. Horesh sought payment of $2109.21. Mr. Lichtenstein died a few months later, not having paid the accounts. The accounts remain unpaid.

6 Probate of the Will of Mr. Lichtenstein was granted to the respondent Mr. Cyngler, also a lawyer. On 18 November 2005, Mr. Horesh wrote to Mr. Cyngler as follows:

"You will note that my initial accounts (rendered on 25 January 2005) were substantially discounted, however these accounts remain unpaid. For this reason, the discount does not now apply and is cancelled."

7 The accounts need to be read in conjunction with the covering letter of 25 January 2005. When read together, they amount to a request for payment of $2109.21 for legal services, despite the fact that the enclosed accounts are for amounts which total $4228.41.

8 On that basis, it is necessary for me to determine whether Mr. Horesh can "cancel" his request for payment of $2109.21 and seek payment of $4228.41. If so, that would amount to an amendment of the accounts, and there is a great deal of law concerning the amendment of accounts.

9 In the classic Victorian text Phillips & Trebilco Delivery and Taxation of Bills of Costs Third edition (1932) @ 15-16 the general rule was stated in the following way:

'A solicitor cannot withdraw a delivered bill, and deliver an amended bill, unless with the consent of the client, or by permission of the Court ..... But a solicitor has been allowed by order of the Court, pending taxation, to add charges omitted by error or mistake, and to increase undercharges, but not to reduce over-charges.'

10 Oliver in his Law of Costs (1960), the next classic Victorian text on the subject, states @ 25-26 that the general rule applies only after a bill has been challenged, the rationale being that a lawyer should not be able to avoid the effect of the one-sixth rule by reducing the amount of the costs.

11 In more recent times, again in relation to Victoria, Dal Pont in his Law of Costs (2003) @ 151 states the general rule in a different way:

'At general law it has repeatedly been held that a solicitor who delivers a bill of costs to his or her client not reserving the right to withdraw or alter it upon a valid condition is, for the purposes of the taxation, bound by it, and ..... cannot alter it except with the leave of the court.'

12 However, avoidance of the one-sixth rule upon a taxation is not the only consideration, as is explained in the judgment of Tadgell J in Redfern v Mineral Engineers Pty Ltd [1987] VicRp 47; [1987] VR 518 @ 523:

'The courts' surveillance over costs as between solicitor and client is assumed with a view to preventing any unfair advantage by solicitors in their charges to their clients. It stems, it seems, from the notion that ordinarily a solicitor is presumed to be in a position of dominance in relation to his client as a result of presumed knowledge of the law and of what may and may not be properly charged by way of fees. ..... Considerations of public policy and undue influence combined to shape the attitude of the Courts of Equity, by which the general rules in relation to taxation of costs were formulated.'

13 It is apparent that the general rule is subject to exceptions. One exception is that a bill can be amended with the consent of the client. No consent is forthcoming in the present matter.

14 A second exception is amendment with the leave of the court. Order 63.45 of the General Rules of Procedure in Civil Proceedings 1986 provides that the Supreme Court or the taxing master may "give leave to a party to amend or withdraw a bill". Mr. Horesh sought leave from me to amend his account by removing the discount, in substance of the basis that the considerations that gave rise to the general rule have no application in this matter, and that it is unfair to be required to give a discount where there has been a long delay in payment. I do not regard VCAT as having power to grant leave of that kind in circumstances where Parliament has granted that power to the Supreme Court and the taxing master, and not to VCAT.

15 A third exception is where there is a statutory provision that allows amendment of the bill. Mr. Horesh referred to s.118(2) of the Legal Practice Act 1996 which states:

'If, before giving an itemised bill the legal practitioner or firm had previously given a lump sum bill, on an assessment the legal practitioner or firm is not bound by the amount and matters stated in the lump sum bill.'

16 This statutory provision creates an exception to the general rule, but it does not apply in the present case. Mr. Horesh rendered an itemised account from the outset, not a lump sum bill followed by an itemised bill.

17 A fourth exception is well stated by Dal Pont @ 156:

'It is permissible for a solicitor, when delivering a bill, to reserve the right to withdraw or alter it upon a condition, provided the condition is fully and clearly stated to the client, and is lawful.'

18 Mr. Horesh's account was not rendered subject to a condition, such as a condition that the discount would apply only if payment was made within a specified period of time.

19 I conclude in the present proceedings that none of the established exceptions excludes the general rule, and that Mr. Horesh cannot amend his account by removing the discount.

20 s.95 of the Legal Practice Act 1996 provides that a lawyer may charge interest on legal costs "from the period beginning 30 days after payment is demanded until the legal costs are paid".

21 There is a dispute as to when payment was demanded. Mr. Cyngler contends that the accounts were not sent to Mr. Leibush Lichtenstein, but to his son Mr. Moshe Lichtenstein. To avoid confusion, I will refer to them as the father and the son.

22 s. 107 of the Legal Practice Act 1996 deals with delivery of a bill of costs. The relevant part reads as follows:

(a) by delivering it personally to the person or to an agent of the person; or

(b) by sending it by post to the person or agent at the usual or last known business or residential address of the person or agent;'

23 An "agent" is defined by s.107(4) as a person who "has authority to accept service of legal process on behalf of the person". There is no evidence from which I could conclude that Mr. Moshe Lichtenstein was an agent as so defined for Mr. Leibush Lichtenstein.

24 I accept the following evidence of Mr. Horesh:

(a) that, when the father came to see Mr. Horesh, the father was accompanied by the son;

(b) that Mr. Horesh was provided with the addresses of the father and the son;

(c) that Mr. Horesh believed that the father might no longer reside at the address given for the father;

(d) that Mr. Horesh sent the three accounts and the letter addressed to the father, but care of the address of the son;

(e) that on 12 April 2005 Mr. Horesh sent to the father follow up letters requesting payment. These letters were addressed both to the father's address and to the father care of the son's address;

(f) that, after the son received the follow up letter sent care of the son's address, the son informed Mr. Horesh that the original accounts had been given by the son to the father. No evidence was given by the son and, the Tribunal not being bound by the rules of evidence, I am prepared to accept that the son handed the original accounts to the father.

25 I find that the accounts were delivered to the father personally, through the medium of the son, within about one month after they were posted to the father at the address of the son. Consequently, there was service of the accounts in accordance with s.107(3)(a). I will order that interest is to run from 25 March 2005, being about 30 days after the accounts were delivered personally to the father by the son.

26 Even if I am wrong as to the date for commencement of interest, I am not very wrong. The follow up letter to the father of 12 April 2005, sent to the father's address, enclosed copies of the accounts. That was good service in accordance with s.107(3)(b), and would have interest commencing to run from 12 May 2005.

The amount of the accounts:

27 I have read through the accounts, and I accept the evidence of Mr. Horesh that he carried out the work set out in the accounts. I am satisfied that the work justified the charging of $4228.41 prior to the application of the discount.

28 I will make an order that the respondent pay $2109.21 to the applicant, plus interest thereon calculated from 25 March 2005 to the date of the order.