JURIS COR GROUP PTY LTD -v- PRICE [2020] WASC 308 (28 August 2020)

1. Part 10 of the Act governs the obligations of legal practitioners in relation to disclosure of their costs and the assessment of their costs.
2. Section 260 of the Act sets out the obligations of disclosure of a law practice to their client. Specifically:

(1) A law practice must disclose to a client in accordance with this Division -

(a) the basis on which legal costs will be calculated, including whether a costs determination applies to any of the legal costs; and

(b) the client's right to -

(i) negotiate a costs agreement with the law practice; and

(ii) receive a bill from the law practice; and

(iii) request an itemised bill after receipt of a lump sum bill; and

(iv) be notified under section 267 of any substantial change to the matters disclosed under this section;

(c) an estimate of the total legal costs if reasonably practicable or, if that is not reasonably practicable -

(i) a range of estimates of the total legal costs; and

(ii) an explanation of the major variables that will affect the calculation of those costs;

(d) details of the intervals (if any) at which the client will be billed.

1. Where a law practice intends to retain another law practice on behalf of a client, the disclosure obligation is governed by s 261 of the Act. Relevantly, this provides that:

(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 specified in section 260(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 260.

(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 260, but must disclose to the other law practice the information necessary for the other law practice to comply with subsection (1).

1. Pursuant to s 267 of the Act:

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.

1. The effect of a law practice's failure to disclose a substantial change in the cost disclosure to a client is set out in s 268 of the Act. Where there has been a failure to disclose any substantial change to the disclosure, the legal costs are not required to be paid unless they have been assessed under div 8 of the Act,[27] the legal practice cannot maintain proceedings for recovery of the costs,[28] an application 'may' be made under s 288 of the Act to set aside the costs agreement,[29] and on an assessment of the costs, the amount of costs may be reduced by the amount considered by the taxing officer to be 'proportionate to the seriousness of the failure to disclose'.[30]
2. Where a law practice retains another law practice and fails to disclose something to a client solely because the retained practice failed to disclose the information required by s 261(2) of the Act, s 268(1) to s 268(4) apply to the legal costs owing to the retained law practice.

1. The question of whether the respondent was required to provide an updated disclosure to the applicant and, if so, what impact this has on the assessment of the bill of costs is a matter of statutory construction.
2. The starting point in considering the meaning of s 267 of the Act is to consider the ordinary and grammatical sense of the statutory words to be interpreted having regard to their context and legislative purpose.[31] Extrinsic materials can be considered to confirm the ordinary meaning conveyed by the text of the provision, or to determine the meaning of a provision where the provision is ambiguous or obscure, or where the ordinary meaning gives rise to a result that is manifestly absurd or unreasonable.[32]
3. The approach to statutory construction was summarised by Buss JA (as he then was) in Caratti v Mammoth Investments Pty Ltd as follows:[33]

The modern approach to statutory construction is purposive. The statutory text is the surest guide to Parliament's intention. A decision as to the meaning of the text requires consideration of the context, in its widest sense, including the general purpose and policy of the provision.

The context includes the existing state of the law, the history of the legislative scheme and the mischief to which the statute is directed.

The purpose of legislation must be derived from the statutory text and not from any assumption about the desired or desirable reach or operation of the relevant provisions. The intended reach of a legislative provision is to be discerned from the words of the provision and not by making an a priori assumption about its purpose. (footnotes omitted)

1. Part 10, div 3 of the Act governs the obligations of legal practitioners to make disclosures to their clients as to the costs of their engagement. The obligations of disclosure placed on a law practice by reason of s 260(1) of the Act are obligations owed by a law practice to their client.
2. Where a barrister is retained by a law practice, the barrister's disclosure obligations are governed by s 261, namely the retention of a law practice (barrister) by another law practice (firm of solicitors). The barrister is required to provide sufficient disclosure to their instructing solicitors so that the instructing solicitors can comply with their obligations to their client under s 260 of the Act. This requires the barrister to disclose the basis on which costs will be calculated, an estimate of the total costs, or if that is not reasonably practicable a range of estimates and an explanation of the major variables, and details of the intervals at which the barrister will submit invoices.
3. Section 267 of the Act governs the obligation of a legal practice to update their client on any substantial changes to the disclosure. On a plain reading of the text of this section, it does not apply to a retainer between a barrister and their instructing solicitors. This construction is supported by the language in pt 10, div 3 which clearly distinguishes between law practice, a law practice retained by another law practice, and client.
4. This construction is consistent with the construction of identical statutory provisions in Queensland.[34]
5. In this case, the parties and the taxing officer proceeded on the basis that s 267 of the Act applied to the retainer between the applicant and respondent. While the respondent's submissions stated that they were filed 'assuming the section applied to the respondent',[35] it does not appear that the question as to whether this section applied to the retainer was the subject of any argument or submission before the taxing officer.
6. For the reasons set out above, s 267 of the Act does not apply to the costs agreement between the applicant and the respondent. The consideration of the section by the taxing officer was, in my view, an error in principle.
7. Having found an error in principle, it is necessary for me to consider what order, if any, should be made to rectify the error that has been identified.[36] In this case, I do not consider that any order should be made to rectify the error. This is because the taxing officer found that s 267 of the Act was not breached and, as a consequence, the taxing officer's consideration of this section had no impact on her ultimate decision.
8. In their submissions filed 25 August 2020, the applicant sought to rely on cl 8 of the retainer agreement. This was not a matter that was raised before the taxing officer on the objection nor raised in the review. As was noted by Vaughan J, the making of an objection under O 66 r 53 is the foundation for the existence of the review under O 66 r 55.[37] There is no foundation for a review of the taxation on the terms of cl 8 of the retainer.

1. I turn now to the specific items raised by the applicant in its application for review.

1. Items 5 and 6 were claims for legal research and an email from the respondent to the applicant in respect of 'Strata Title Act issues'. A total of three hours is claimed for this work.
2. The applicant submits that this work was not carried out in a reasonable manner. The applicant contends there are two errors of principle in the taxing officer's decision. First, the failure to consider the respondent's email to the applicant dated 2 November 2018 and second, in finding it was reasonable for the respondent to conduct further research without explicit instructions from the applicant.
3. The applicant contends that no reasonable taxing officer would disregard this evidence, alternatively that she exercised her discretion in a manifestly incorrect manner by failing to consider this email. For these reasons, the applicant contends that a further amount should be taxed off these items.
4. The respondent submitted that the applicant's objections were essentially an objection to quantum and did not identify an error in principle. The respondent contended that the registrar made no error in principle in her assessment of these items.
5. In the objection and review before the registrar, the error of principle asserted by the applicant was advanced on a number of grounds. These were that the length of time allocated was unreasonable having regard to the respondent being an experienced barrister in this area, the same issue had already been considered and allowed in item 4, the issue only concerned three provisions of the Strata Titles Act, no further legal strategy was identified nor was there one, the notice requiring consideration was only a one page document and that the registrar should have had regard to r 57 of the Western Australian Barristers' Rules (Barristers' Rules) in assessing the respondent's costs.
6. The registrar's reasons for rejecting the applicant's contentions are set out at [70] ‑ [75] of her reasons for decision. The reasons given by the registrar on this aspect of the applicant's objection are clear and do not disclose any error in principle in the allowance she made. The registrar considered whether the work was reasonably required and carried out in a reasonable manner pursuant to s 301 of the Act. Further, an allowance of $1,782 is not so high that it can be concluded that no taxing officer acting reasonably could ever have taxed the item at that amount.
7. In my view, the applicant's objection does not identify any error of principle and is properly characterised as an objection to quantum.
8. I turn now to consider the objection in relation to r 57 of the Barristers' Rules. Rule 57 of the Barristers' Rules provides that:

A barrister must seek to ensure that work which the barrister is briefed to do in relation to a case is done so as to:

(a) confine the case to identified issues which are genuinely in dispute;

(b) have the case ready to be heard as soon as practicable;

(c) present the identified issues in dispute clearly and succinctly;

(d) limit evidence, including cross-examination, to that which is reasonably necessary to advance and protect the client's interests which are at stake in the case; and

(e) occupy as short a time in court as is reasonably necessary to advance and protect the client's interests which are at stake in the case.

1. The applicant contended that the taxing officer should have had regard to this rule as a relevant matter, as provided for in s 301(2)(j) of the Act. The registrar's reasons for rejecting the applicant's reliance on this rule is at [60] ‑ [68] and [74] of her reasons for decision.
2. The relevant provisions of the Act are s 301 and s 302. These sections relevantly provide that:
   1. Criteria for assessment

(1) In conducting an assessment of legal costs, a taxing officer must consider -

(a) whether or not it was reasonable to carry out the work to which the legal costs relate; and

(b) whether or not the work was carried out in a reasonable manner; and

(c) the fairness and reasonableness of the amount of legal costs in relation to the work, except to the extent that section 302 or 303 applies to any disputed costs.

(2) In considering what is a fair and reasonable amount of legal costs, the taxing officer may have regard to any or all of the following matters -

(a) whether the law practice and any Australian legal practitioner or Australian‑registered foreign lawyer acting on its behalf complied with this Act;

(b) any disclosure made by the law practice under Division 3;

(c) any relevant advertisement as to -

(i) the law practice's costs; or

(ii) the skills of the law practice or of any Australian legal practitioner or Australian‑registered foreign lawyer acting on its behalf;

(d) the skill, labour and responsibility displayed on the part of the Australian legal practitioner or Australian‑registered foreign lawyer responsible for the matter;

(e) the retainer and whether the work was done was within the scope of the retainer;

(f) the complexity, novelty or difficulty of the matter;

(g) the quality of the work done;

(h) the place where, and circumstances in which, the legal services were provided;

(i) the time within which the work was required to be done;

(j) any other relevant matter.

1. Assessment of costs by reference to costs agreement

(1) A taxing officer must assess the amount of any disputed costs that are subject to a costs agreement by reference to the provisions of the costs agreement if -

(a) a relevant provision of the costs agreement specifies the amount, or a rate or other means for calculating the amount, of the costs; and

(b) the agreement has not been set aside under section 288,

(c) the agreement does not comply in a material respect with any applicable disclosure requirements of Division 3; or

(d) Division 6 precludes the law practice concerned from recovering the amount of the costs; or

(e) the parties otherwise agree.

(2) The taxing officer is not required to initiate an examination of the matters referred to in subsection (1)(c) and (d).

59 The question as to when the matters provided for in s 301(2) (and its equivalent in other jurisdictions) should be considered by a taxing officer on an assessment of costs has been considered in a number of cases.[38] These cases have held that where there is a costs agreement, the taxing officer does not apply s 301(2) in considering what a fair and reasonable amount of costs is; the assessment is done by reference to the costs agreement.[39]

1. In my view, this construction is consistent with a plain reading of the text of s 301 of the Act. That is, where there is a costs agreement, s 301(1)(c) and, as a consequence, s 301(2) of the Act have no work to do. Any assessment is governed by the considerations in s 301(1)(a) and s 301(1)(b) of the Act. Accordingly, I do not consider there is any error in principle in the approach adopted by the taxing officer in respect of r 57 of the Barristers' Rules.
2. For these reasons, it is my view that the registrar made no error in principle as alleged by the applicant in allowing items 5 and 6 in the amount of $1,782.

1. Items 9 and 11 were claims for consideration and research of FIRB and preparing and settling an email to the applicant.
2. The applicant contends that the work was not carried out in a reasonable manner and that the registrar erred in principle in failing to consider the respondent's email dated 2 November 2018. The applicant contends there are four errors of principle in the taxing officer's decision. First, the failure to consider the respondent's email to the applicant dated 2 November 2018; second, in finding it was reasonable for the respondent to conduct further research without detailed facts or instructions from the applicant; third, in failing to have proper regard to r 57 of the Barristers' Rules; and fourth, the fees were not fair or reasonable. For these reasons, the applicant contends that a further amount should be taxed off these matters.
3. The respondent submitted that these objections did not identify an error in principle and were, in essence, an objection to the quantum assessed. The respondent contended that the registrar made no error in principle in her assessment of these items.
4. The registrar's reasons for rejecting the applicant's contentions are at [79] ‑ [89] of her reasons for decision. The registrar considered whether the work was reasonably required and carried out in a reasonable manner pursuant to s 301 of the Act. The reasons given by the registrar on this aspect of the applicant's objection are clear and do not disclose any error in principle in the allowance made. In addition, an allowance of $3,373 is not so high that it can be concluded that no taxing officer acting reasonably could ever have taxed the item at that amount.
5. I note that in addition to this primary reason, the registrar rejected the applicant's submissions for two further reasons: first, it was not referred to or relied upon by the applicant at the assessment of costs; and second, in assessing the costs claimed by the respondent, the respondent's experience and practice were referred to in the context of whether the work done was necessary and the time spent was reasonable.
6. In my view, the applicant's objection does not identify any error of principle and is properly characterised as an objection to quantum.

Items 22, 25 and 27: Considering cross-claim and amending defence

1. Items 22, 25 and 27 were claims for work completed by the respondent relating to the cross‑claim and amending the defence.
2. The applicant contends that the work was not carried out in a reasonable manner, the registrar erred in principle in finding that the amount spent on the amendment of the defence (12 hours after taxing off 2 hours) was fair and reasonable, and that the applicant only instructed the respondent to consider a cross‑claim on the issue of common law misrepresentation. For these reasons, the applicant contends that a further amount should be taxed off these matters.
3. The respondent submitted that these objections did not identify an error in principle and were, in essence, an objection to the quantum assessed. The respondent contended that on the review, the applicant's objections on items 22 and 25 were limited to an assertion that the work relating to the cross‑claim was not carried out in a reasonable manner having regard to the amount of time spent. With respect to item 27, the respondent's contention is that the applicant's objection is limited to the time spent to amend the defence and that the applicant should not be allowed to expand its objection. In any event, the respondent denied that the registrar made any error in principle in her assessment of these items.
4. The registrar's reasons for rejecting the applicant's contentions are at [104] ‑ [110] and [111] ‑ [118] of her reasons for decision. The registrar considered whether the work was reasonably required and carried out in a reasonable manner pursuant to s 301 of the Act. On a review of the taxation, the registrar taxed off $1,080. The reasons given by the registrar on this aspect of the applicant's objection are clear and do not disclose any error in principle in the allowance made. In addition, an allowance of $7,711.20 (for 12 hours 48 minutes) for costs associated with both the cross‑claim and defence is not so high that it can be concluded that no taxing officer acting reasonably could ever have taxed the item at that amount. Accordingly, I do not consider that there is any error in principle based on quantum alone.
5. In my view, the applicant's objection does not identify any error of principle and is properly characterised as an objection to quantum.

1. For the reasons set out above, the applicant's application should be dismissed.
2. I will hear from the parties as to the costs of the application. I consider that it would be appropriate to fix the amount to be allowed by way of costs but will hear from the parties both as to this proposal and the amount for which costs should be fixed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] City of Belmont v Saldanha [No 2] [2018] WASC 278 [30] - [43].

[2] Shire of Katanning v Bride [No 5] [2014] WASC 470 [11].

[3] City of Belmont v Saldanha [No 2] [47] citing with approval The Australasian Lawyers Group Pty Ltd t/as Butlers Barristers & Solicitors v Morgan [2018] WASC 69 [74] ‑ [78].

[18] Request for Review [29] - [30].

[19] Applicant's submissions in response [7].

[20] Request for Review [31] - [32].

[21] Applicant's submissions in response [22].

[23] Legal Profession Act 2008 (WA), s 301(1)(c), s 302, s 303.

[24] Respondent's submissions [19], [22].

[26] Applicant's further submissions filed 25 August 2020 [1].

[27] Legal Profession Act 2008 (WA), s 268(1).

[28] Legal Profession Act 2008 (WA), s 268(2).

[29] Legal Profession Act 2008 (WA), s 268(3).

[30] Legal Profession Act 2008 (WA), s 268(4).

[31] Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 [4].

[32] Interpretation Act 1984 (WA), s 19(1).

[33] Caratti v Mammoth Investments Pty Ltd [2016] WASCA 84; (2016) 50 WAR 84 [390] - [392].

[34] Farrar (formerly Sweeney) v Julia Armitage [2015] QCA 289 [53] - [55]; Gregg Lawyers Pty Ltd v Viki Maree Farrar (formerly Sweeney) [2014] QDC 194.

[35] Respondent's amended submissions in reply filed 8 July 2019 [13(i)]; Respondent's submissions in reply to applicant's objection to assessment filed 20 August 2019 [43].

[36] Rules of the Supreme Court 1971 (WA) O 66 r 55.

[37] City of Belmont v Saldanha [No 2] [35], [106].

[38] Mathieson Nominees Pty Ltd v AJH Lawyers [2013] VSC 325; Nicholson Clement Lawyers v Hewson [2014] WASC 416; LM v K Lawyers [No 2] [2015] WASC 245.

[39] Legal Profession Act 2008 (WA), s 302.