15 It is argued that the legislature has set out to ensure clients know where they stand in relation to costs and puts in place important protections if they have not, in effect, been put in that position. It is submitted that a consequence of non-compliance with s182(2) is that a legal practitioner is put in the position of having to have the costs assessed at the practitioner's expense before requiring the client to pay. There is an intent to protect clients from litigation by legal practitioners, "absolutely" it is said, unless either the disclosure provisions have been complied with or the costs have been assessed. It is argued that the protection is not really adequate if the client is put at the peril of having to get legal advice or "be smart" enough in the client's own interests when the practitioner chooses to bring legal proceedings.
16 S182(2) does not, it is argued, offer it a "defence"; but non-compliance with it goes to the validity of the proceedings as a whole. It would be inimicable to the scheme of the Act if the position were otherwise than that the proceedings were invalid if the condition precedent had not been complied with.
17 The "novelty" of the matter (and, thus, importance, for the reasons referred to) arises from what is said to be the approach taken by the Court of Appeal in an early decision and more recent ones.
18 In Zizza v Seymour [1976] 2 NSWLR 135, the Court principally was concerned with a point not taken below. The litigant in person had not raised what was described as a "complete" defence pursuant to s21(1) of the Legal Practitioners Act 1898 - the solicitor's "memoranda" were not "bills". It is in that context that the remarks of Moffitt P are to be understood, at 137B-C:
"The respondent before us does not argue that, if the defence had been raised at or before the trial, he could have mended his hand … He does not argue that, by some amendment or other evidence he could have succeeded upon some different basis. This concession was correct. The defect in his case, by reason of the absence of a proper bill, could, not be corrected by delivery of a proper bill after the commencement of the proceedings. The client or party to be charged is entitled to have the proper bill before proceedings against him are commenced, as the express words of s. 21 (1) show".
19 Mr Molomby made a brief reference to the decision of the Court of Appeal in Graham v Aluma Lite Pty Ltd (1996) 39 NSWLR 58. The Court was concerned with the operation of s7(1) of the Credit (Home Finance Contracts) Act 1984 which proscribed the institution of proceedings or the exercise of a right under contract by a credit provider until after the expiration of one month after service of a notice in prescribed form, specifying the proceedings or the right. Service of such a notice was held to be a condition precedent to any action being "instituted" in court (at 66C per Clarke JA). His Honour did remark that failure to comply with s7 was "inimicable" to the scheme of the Act.
20 In my opinion s182(2) is not in terms quite cognate with the section of the legislation with which the Court was concerned in Aluma Lite Pty Ltd.
21 Conder v Silkbard [1999] NSWCA 459 concerned, inter alia, the operation of s192(1) of the Legal Profession Act and its mandatory quality in requiring that a bill be given at least 30 days prior to the commencement of proceedings to recover costs. It was held, per Beazley JA at paragraph [29], that failure to comply with that section is a defence to an action bought by a solicitor to recover legal costs, citing Zizza v Seymour. It is interesting to observe that the factual background to Conder was the institution by the legal practitioner of proceedings in the Local Court to recover legal costs. Prior to the determination of the Local Court proceedings the respondent brought proceedings in this court that ended in the Court of Appeal, seeking an order under s209C of the Legal Profession Act that the solicitors provide a bill of costs and that the proceedings in that court be stayed.
22 Beazley JA remarked (paragraphs [32] and [33]) to the effect that the defence that no bill of costs was given as required by the section under consideration was pleaded in the proceedings and should have been, "and still should be", dealt with by the Local Court (see also Fitzgerald JA at paragraph [46]).
23 It was acknowledged in the course of submissions that there were certain factual issues outstanding, not least as to whether there had been "disclosure". It could not be gainsaid that the very matter that was thought to be made an issue in this court had been raised by the plaintiff client in the Local Court by way of verified Defence. Interestingly, it was also argued that this court should entertain to conclusion the Amended Summons to avoid "proliferation of proceedings": I am puzzled by this as it was the initiative of the plaintiff herself that brings the matter here.
24 Whilst there may be some force in what Mr Molomby advanced as to the series of Court of Appeal decisions to which I have referred, not giving consideration to any distinction between "creating a defence" and "making the proceedings invalid", I do not see what were described as "public policy" considerations compelling the relief sought. On the one hand, the plaintiff client has put on a substantive defence to a Statement of Claim and not sought to set aside a default judgment, inter alia, based upon that substantive defence to permit the litigation of issues of fact essential (and to some extent, acknowledged) to the resolution of s182(2) and its effect. On the other, the plaintiff client seeks to have determined in this court, and in a vacuum as far as fact finding is concerned, not the validity of a defence relied upon in the Local Court, but the invalidity of the proceedings to which that defence was filed, which issue, as I have said, is dependent on fact finding.
25 The issue could be important insofar as it involves the legal profession and this court's role vis-à-vis that profession. The current proceedings are, however, like those in Conder, in my view misconceived.
26 It is open to the plaintiff client to seek relief in relation to the default judgment under Part 26 of the Local Court (Civil Claims) Rules and without definitively pronouncing upon it, a consideration might well be whether there in fact was any requirement for the plaintiff, as a defendant in the Local Court, to amend her Grounds of Defence merely by reason of the plaintiff having amended in that court his Statement of Claim: Pt 16 r2(4).
27 Without a full and proper examination of the evidence, at the very least, this court is in no position to declare the proceedings in the Local Court a "nullity" in the circumstances outlined above. The remedy for the plaintiff presently lies in that jurisdiction.
28 Accordingly, order 2 in the Amended Summons is continued until further order of this court or the Local Court, otherwise, the Summons is dismissed.
29 The plaintiff is to pay the first defendant's costs, otherwise I make no order as to costs.
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