On 14 May 2020, the law firm commenced these proceedings by way of summons, with an affidavit in support by Mr Byrnes describing the matters already set out. On 29 May 2020, 2 June 2020 and 27 July 2020, directions were made for Mr Quinn to file an appearance and evidence. These orders were not complied with and, on 6 August 2020, a second affidavit was filed by Mr Byrne expressing his belief that Mr Quinn had no defence.
On 24 August 2020, Mr Quinn sent an email to Mr Byrnes, noting that he had obtained advice in respect of the costs said to be owed to the law firm.
Following this advice, I note Section 331 of the Legal Profession Act 2004 (the Act) provides that a law practice must not commence legal proceedings to recover legal costs until at least 30 days after the law practice has given a bill in accordance with sections 332 and 333 of the Act.
I further note that neither the invoices that your law practice purported to issue to me, nor the correspondence enclosing such invoices, included a notification of client's rights despite such notice being required by section 333 of the Act. Accordingly, your legal practice was not entitled to commence these proceedings, and the proceedings must be stayed in accordance with s 331(3) of the Act, until the costs you claim to be owing to you have been assessed by a costs assessor.
In view of these circumstances, I propose that we inform the court that the parties consent to the Court ordering that the proceedings be stayed until such time as your law practice has assessed the costs you claim are owing by me.
Further directions hearings took place on 25 August 2020, 15 September 2020 and 17 September 2020, at which the proceedings were simply stood over. The law firm said that the proceedings were stood over at its request - and effectively stayed - so that it could consider and attend to Mr Quinn's suggestion that the bills were not in proper form.
On 1 October 2020, the law firm re-served the bills on Mr Quinn, attaching the General Terms of Business, clause 6 of which set out Mr Quinn's rights in relation to a dispute concerning costs. The law firm considered it had thereby provided the disclosure required under section 333 of the Act.
Further directions hearings took place, by which the motion for summary judgment was listed before me for hearing on 14 December 2020. At 12.39pm that day, moments before the hearing began, Mr Quinn served written submissions, including:
The Plaintiff now submits that it has remedied such defects by re-issuing bills on 1 October 2020 which retain their original issue date. However, these newly issued bills also fail to comply with s333 LPA. Namely, the reissued bills:
a. Fail to notify of all of the client's rights in respect of the bill mandated by s333, namely the avenue available to the client of setting aside costs agreement or a provision of a costs agreement under s328 LPA;
b. Do not set out all the required time limits which apply in respect of a client's rights, being a requirement of s333 … ;
c. Are not signed or enclosed with a letter signed by a legal practitioner director.
As Mr Quinn informed the Court, "I was lucky enough to obtain [legal advice] last Friday afternoon".
As noted in John Byrnes at [5], in light of the further matters raised in Mr Quinn's written submissions, the law firm accepted that it would need to amend and re-serve the bills to comply with the Legal Profession Act. At the conclusion of the hearing, I made directions for the bills to been re-served and for the matter to be stood over before the Registrar for directions to be made depending on how the parties decided to proceed thereafter.
On 21 December 2020, according to the affidavit of Jose Byrnes, the plaintiff served amended bills on Mr Quinn. The plaintiff said that the bills then served fully complied with the Act:
1. The date of issue was amended to 21 December 2020.
2. Each of the bills were sent with the General Terms of Business, which referred to Mr Quinn's right to apply to the Costs Assessor to set aside some or all of the terms on the grounds that they are not fair or reasonable: clause 6(c). The General Terms of Business also stated that Mr Quinn may apply to the Manager Costs Assessment for an assessment of our costs, with any such application to be made within 12 months after the bill was provided or request for payment made or after the bills were paid: clause 6(b).
3. Each of the bills was signed by the legal practitioner.
On 2 February 2021, the proceedings came before the registrar for directions, when Mr Quinn informed the registrar that he had not received a copy of the revised bills. On 4 February 2021, the plaintiff sent the bills to Mr Quinn again, this time by email, together with a copy of the Australia Post delivery confirmation in respect of the hard copy bills sent on 21 December 2020.
Since then, Mr Quinn has made enquiries with this Court in March 2021 as to filing a costs assessment application and requesting a fee waiver for the application. In addition, Mr Quinn has lodged a notice of intention to appeal my earlier judgment. The email correspondence attached to Mr Quinn's submissions before the Court today indicate that his application for a fee waiver was rejected on 8 April 2021. In addition, there is further email correspondence between Mr Quinn and this Court asking what documents need to be filed to apply to extend the time to file a costs assessment application.
[2]
SUMMARY JUDGMENT
In John Byrne, I declared that the law firm had an equitable lien over the costs ordered by Judge Taylor to be paid to Mr Quinn in the District Court proceedings. As to the relief in respect of which summary judgment is now sought, the law firm seeks an order that the monies now held in Court be paid to the law firm, on the basis that the law firm is entitled to be paid these monies for its fees, and Mr Quinn has no defence to the law firm's claim: rule 13.1(1), Uniform Civil Procedure Rules.
As Mr Quinn submitted on the last occasion, and I accept, a case must be very clear to justify summary judgment: General Steel Industries v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69. The real issue is whether there is an underlying defence that has a real, not fanciful, prospect of success. This is distinct from whether such a defence is actually pleaded: O'Brien v Bank of Western Australia Ltd [2013] NSWCA 71 at [3] per Macfarlan JA, at [66]-[68] per Ward JA; Commonwealth Bank of Australia v Invest Pty Ltd (in liq) [2014] NSWSC 1257 at [32] per Campbell J. As Campbell J stated, "An applicant for summary judgment is required to demonstrate that the outcome of the litigation is so certain that it would be an abuse of the process of the Court to require the action to proceed to a full hearing on the merits". In respect of the application for summary judgment, the plaintiff bears the onus of demonstrating that there is no triable or arguable issue in defence of its claim.
[3]
COSTS DISCLOSURE
The plaintiff's counsel submitted that the costs agreement complied with section 309 of the Legal Profession Act, save potentially for the obligation in section 311(1), which provides: (emphasis added)
Disclosure under section 309 must be made in writing before, or as soon as practicable after, the law practice is retained in the matter.
The plaintiff's counsel acknowledged that, as the costs agreement had not been provided until six weeks after the law firm was retained, it was open for Mr Quinn to contend that disclosure had not been made as soon as practicable after the law firm was retained. However, as the law firm had been retained by Mr Quinn for some 4 years already in the same tenancy dispute in other jurisdictions, it was submitted that any delay was not unreasonable, nor could it be suggested that it caused any prejudice to Mr Quinn. Nothing was said to turn upon providing the costs agreement a short time after the law firm was retained in related proceedings, as the law firm's retainer was effectively ongoing.
Mr Quinn submitted that the late provision of the costs agreement clearly breached the law firm's obligation under section 311(1) such that the law firm must have its costs assessed before he is obliged to pay the firm's fees. In addition, the law firm had incurred $5,500 in fees before the costs agreement was provided. (As to this, as I noted at [7]-[8], the $5,500 was an estimate of the costs whilst the fees rendered for the time between the law firm's retained and provision of the costs agreement was some $1,750.)
Section 317(1) of the Legal Profession Act provides:
Postponement of payment of legal costs until assessed
If a law practice does not disclose to a client or an associated third party payer anything required by this Division to be disclosed, the client or associated third party payer (as the case may be) need not pay the legal costs unless they have been assessed under Division 11.
The law firm submitted that once the costs disclosure was made, the Act had been complied with and any earlier non-compliance with section 311(1) - if that is what had occurred - did not have a consequence under section 317(1) that the law practice needed to have its costs assessed before seeking payment. But see Burrell Solicitors Pty Ltd v Reavill Farm Pty Ltd (No 2) [2011] NSWSC 1615 per White J at [70], [72]; Farrar v Julian-Armitage [2015] QCA 289 at [68]-[70].
Section 317(1) provides that "the client or associated third party payer (as the case may be) need not pay the legal costs unless they have been assessed under Division 11." Division 11 of the Act, entitled "Costs assessment", concerns all types of costs assessment, including on the application by a client (section 350), on the application by another law practice (section 351), on the application by the law practice giving the bill (section 352) and an application for assessment of party/party costs (section 353).
The law firm's legal costs "have been assessed under Division 11", albeit on a party/party basis rather than a solicitor/client. Thus, on one view of the matter, the law firm's costs have been assessed under Division 11 and it is entitled to be paid. A sensible construction of section 317(1) is that the client need not pay the legal costs "unless they have been assessed under Division 11" on the basis of assessment which the client is obliged to pay the fees.
The problem I have, however, is the utility of any costs assessment on a solicitor/client basis. First, assuming without deciding that the law firm did not comply with its obligation under section 311(1) of the Act, experience suggests that costs assessment on a solicitor/client basis will almost certainly exceed the costs already assessed on a party/party basis. Second, even if a costs assessor arrives at a lower figure, then the 'indemnity principle' means that any excess in costs paid by NSW Housing would need to be repaid to NSW Housing, not to Mr Quinn: Wentworth v Rogers (2006) 66 NSWLR 474; [2006] NSWCA 145 at [46]-[47] per Santow JA and [102]-[103] per Basten JA.
It is, of course, possible that a costs assessor could assess the law firm's fees on a solicitor/client basis at less than $73,000, although the plaintiff's evidence does not support such a result. Whilst the onus of proof on this application is not on Mr Quinn, it is worth considering whether the material on which he relied indicates that such a result has a real, not fanciful, prospect of success. The answer is, resoundingly, that it does not.
On the last occasion, Mr Quinn submitted that the result of such an assessment may be less than that already assessed as work claimed by the law firm was performed outside of the scope of the costs disclosures and without his consent. However, as the law firm submitted, and I agree, the material relied upon by Mr Quinn on the last occasion, being an undated affidavit and annexures comprising 188 pages, does not assert with any degree of focus what exactly is the work performed outside the scope of the disclosure and without his consent. The law firm submitted that the 188 pages of annexures was "a vague and incoherent attempt … to traverse historical grievances between him and the plaintiff with little or no relevance to these proceedings and the legal costs incurred by him in the District Court Proceedings." I respectfully concur.
Before this hearing, Mr Quinn submitted five bundles of material, being essentially submissions and a collection of correspondence and documents. Much of the material formed part of the 188 pages already reviewed. The contents of this bundle were helpfully summarised in the plaintiff's written submissions (at [37]-[44]), suffice to say that there was nothing illuminating as to what the law firm is said to have done that was beyond its retainer, nor which costs are said to have been unreasonable.
One specific complaint was made in respect of costs rendered in relation to a pre-trial conference on 4 November 2014, the same date as the Melbourne Cup. The law firm submitted - and it appears to be so - that a closer perusal of the items complained about indicates that the plaintiff organised for counsel to appear at the pre-trial conference and that counsel sought amendments to the orders as proposed by NSW Housing on that occasion. The law firm submitted that there was nothing unreasonable in arranging Mr Zhu to appear at the pre-trial conference; the various costs associated with that item would withstand scrutiny under a solicitor and client assessment.
Mr Quinn also submitted that the assessment of the law firm's costs on a party/party basis did not detect some $22,000 in amounts which Mr Quinn says are double-billing. (The law firm's counsel submitted that this was nothing more than the law firm attending to multiple tasks on the same day such as telephone calls and correspondence). Whilst it may be thought surprising that any such double-counting would not have been detected or taken into account by the costs assessor, I note that there is effectively a $30,000 'buffer' between the law firm's costs as assessed on a party/party basis and the money which the law firm is prepared to accept in full satisfaction of its outstanding fees which more than covers the suggested double-billing.
The law firm does not seek to have its fees paid beyond what remains of the costs assessed after payment of counsel. It is difficult to see what will be achieved if the law firm has its costs assessed on a basis for which it does not seek remuneration, beyond incurring filing fees, costs assessor's fees together with the further passage of time the costs assessment process entails. The evidence adduced by the plaintiff indicates that Mr Quinn does not have an arguable defence based on section 317(1). The material relied upon by Mr Quinn confirms rather than undermines that conclusion.
[4]
BILLS
The law firm submitted that it has now fully complied with its disclosure and other obligations under section 333 of the Act in respect of the bills. Section 331(1), and the requirement that the plaintiff not commence legal proceedings to recover its costs until after the expiration of 30 days, has been complied with in circumstances where the bills were served on 21 December 2020 or alternatively, on 4 February 2021. Section 332 has been complied with as the bills have all been signed by the legal practitioner and served in accordance with the Act. Section 332A is not in issue as the bills and the re-issued bills were always in an itemised form, and in any event Mr Quinn had never requested an itemised bill.
Section 331 of the Act provides: (emphasis added)
331 Legal costs cannot be recovered unless bill has been served
(1) Subject to section 332A (Person may request itemised bill), a law practice must not commence legal proceedings to recover legal costs from a person until at least 30 days after the law practice has given a bill to the person in accordance with sections 332 (Bills) and 333 (Notification of client's rights).
(2) The Supreme Court may make an order authorising a law practice to commence legal proceedings against a person sooner if satisfied that:
(a) the law practice has given a bill to the person in accordance with sections 332 and 333, and
(b) the person is about to leave this jurisdiction.
(3) A court or tribunal before which any proceedings are brought in contravention of subsection (1) must stay those proceedings on the application of a party, or on its own initiative.
(4) This section applies whether or not the legal costs are the subject of a costs agreement.
The law practice conceded that it commenced legal proceedings to recover legal costs without having first given Mr Quinn a bill which complied with the Act. When Mr Quinn first raised this issue on 24 August 2020 (see [16]), the law firm re-served the bills on 1 October 2020, addressing the matter which Mr Quinn had raised. Shortly before the hearing on 14 December 2020, Mr Quinn raised additional deficiencies in respect of the re-served bills and, on becoming aware of these matters, the law firm agreed not to press to recover its legal costs from Mr Quinn until they had attended to this non-compliance. The law firm submitted that the proceedings had effectively been stayed on the application of the law firm but now that the law firm had complied with the Act, by re-serving the bills in proper form on 21 December 2020, the law firm should be entitled to press its claim.
Mr Quinn did not suggest otherwise nor, perhaps more relevantly, did his email of 24 August 2020 nor his written submissions of 14 December 2020, both of which to have been prepared by a lawyer experienced in this area of law. His email of 24 August 2020 suggested that the proceedings be stayed until the law firm had the costs assessed.
I was not taken to any authority in respect of section 331. The Act must, of course, be construed according to its terms. Subsection (3) empowers the Court to stay proceedings if a law firm seeks to recover legal costs without having complied with the requirements of the Legal Profession Act. The power to stay proceedings by reason of the existence of a particular state of affairs may, by implication or necessity, depending upon the legislative text, include a power to lift the stay once that state of affairs no longer exists. The fact that the Act does not also preclude a law firm from maintaining the proceedings (unlike its statutory predecessor, the Legal Profession Act 1987 (NSW)) supports such a construction. So does the fact that sub-s (3) empowers the court to "stay", as opposed to "dismiss", proceedings. (I note the Legal Profession Act 1987 (NSW) did not have a power to stay, nor for that matter does the comparable provision in the Legal Profession Uniform Law (NSW), which may point to case law on other legislation as being of limited use).
That the court may lift a stay also seems to me consistent with the general obligation of the Court under the Civil Procedure Act 2005 (NSW) to enable proceedings to be pursued in a just, quick and cheap manner. Otherwise, the law firm would need to commence fresh proceedings, with associated filing fees, for no apparent purpose. Thus, since the bills were re-served in December 2020, the law firm is entitled to press its claim for payment as at least 30 days has now passed.
[5]
AN ASSESSMENT BY THE CLIENT
Mr Quinn is also entitled to apply for law firm's bills to be assessed under section 350(4) of the Act, which provides:
An application by a client or third party payer for a costs assessment under this section must be made within 12 months after:
(a) the bill was given or the request for payment was made to the client or third party payer, or
(b) the costs were paid if neither a bill was given nor a request was made.
To date, Mr Quinn has not applied for a costs assessment, although it is apparent from the emails to which I have earlier referred that Mr Quinn has made some steps to do so, including seeking to have a fee waiver from this Court. It may be the case that Mr Quinn proceeds to have the law firm's costs assessed, and I understood from Mr Quinn's submissions today that he intends to do so. Mr Quinn referred to various matters which he would wish to agitate on a costs assessment. It is certainly his right under the Act to have the law firm's costs assessed if he so chooses.
Mr Quinn repeated his previous submission that I direct the plaintiff to settle the proceedings with him, which I took to be a reference to his suggestion on the last occasion that a portion of the monies now held in Court should be paid to him. As I noted in John Byrne at [32], it was not clear to me why a portion of the monies held in escrow by NSW Housing, to be used to pay Mr Quinn's legal costs as assessed, should be paid to Mr Quinn directly. The purpose of the funds is to pay Mr Quinn's legal bills, not for Mr Quinn to derive a financial benefit. This position might be different if Mr Quinn had already paid the law firm, but he has not.
[6]
Conclusion
This brings us back to what the Court should do today. As matters presently stand, the law firm's costs have already been assessed on a party/party basis. Mr Quinn's underlying defence to the law firm's claim is that, as the costs agreement was provided six weeks after the retainer, the law firm is obliged to have its fees assessed on a solicitor/client basis. Even if Mr Quinn were to succeed in that contention, the evidence adduced by the plaintiff, and not relevantly undermined by Mr Quinn, points to any such assessment being for a larger sum.
If Mr Quinn fails in his argument that the law firm is obliged to have its fees assessed, then Mr Quinn is entitled to have the law firm's bills assessed but is yet to commence a costs assessment process. Even if he exercises that right, it seems most unlikely that any assessment will result in the law firm being entitled to less legal fees than are presently held in Court. If anything, the assessment of the law firm's costs on a solicitor-and-client basis will result in a significantly higher figure. If such an assessment results in a lower figure, then Mr Quinn (or more likely NSW Housing) would be entitled to have the difference refunded.
I also have in mind sections 56 to 60 of the Civil Procedure Act, in particular, having regard to the small amount in issue.
Therefore, I am minded to do the following. Subject to receiving a written undertaking from the plaintiff to the Court that, if Mr Quinn has the law firm's costs assessed and if that assessment results in him being entitled to be repaid any of the monies held in Court, then the law firm will undertake to repay those funds together with interest, which will be at the Reserve Bank official cash rate plus 2%, within 14 days of the certificate of determination issued by the Court, I will order that the monies held in Court be paid to the law firm.
For these reasons, I make the following orders:
1. Direct the plaintiff to notify the Associate to Rees J and Mr Quinn by 4.00 pm on Wednesday 16 June 2021 if the plaintiff is prepared to give an undertaking to the Court in the terms described in the judgment of Rees J delivered today.
2. In the event that the undertaking is provided:
1. direct the plaintiff to provide any submissions in respect of the costs of proceeding by 4.00 pm on Friday 18 June 2021, limited to three pages and also indicating whether the plaintiff is prepared to have the costs determined on the papers.
2. direct the first defendant to provide any written submissions in respect of costs by 5.00 pm on 25 June 2021, also indicating whether he is prepared to have costs determined on papers.
1. Stand matter over to the Registrar's List on 29 July 2021 at 9.30 am.
2. Liberty to apply on 2 days' notice.
[7]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 09 July 2021
HER HONOUR: This is the resumption of a part-heard application by the plaintiff, John Byrnes & Associates (Legal) Pty Limited, for summary judgment against the first defendant, Robert Quinn, pursuant to rule 13.1(1) of the Uniform Civil Procedure Rules 2005 (NSW). The application was first heard on 14 December 2020, when I gave summary judgment in respect of prayers 1 and 3 of the summons but - at the law firm's request - deferred the application in respect of the remaining prayers pending the plaintiff re-serving legal bills to ensure compliance with the Legal Profession Act 2004 (NSW). This judgment assumes familiarity with my earlier decision: John Byrnes & Associates (Legal) Pty Limited v Quinn [2020] NSWSC 1840.
Since then, I made orders in Chambers on 17 December 2020 that the second defendant, New South Wales Land and Housing Corporation (NSW Housing), pay the money which it held in escrow, being $73,804.77, into Court. Those monies were paid into Court on 5 March 2021.
The evidence which was before the Court on the last occasion (see John Byrnes at [8]) was also relied upon on this resumed hearing together with a further affidavit of Jose Byrnes sworn 10 February 2021. In addition, Mr Quinn relied upon on written submissions attaching correspondence and documents.