The Four Judgments
30 On 14 September 2005 the respondent commenced an action in the Adelaide Magistrates Court seeking to recover from the appellant the sum of $4,235.21 for unpaid legal fees. Although the appellant attended a directions hearing in the action on 26 October 2005, he failed to attend at the trial of the action on 23 February 2006. A default judgment for $4,578.21 was entered against the appellant. That sum included further legal costs.
31 On 4 June 2010 the appellant issued an application in the Magistrates Court to have the default judgment set aside. His application was heard on 7 July 2010 and it was dismissed.
32 On 8 July 2010 the appellant commenced an action in the District Court for a review of the decision to dismiss his application to set aside the default judgment. On 17 August 2010 a judge of the District Court set aside the default judgment obtained in the Adelaide Magistrates Court on discretionary grounds. On 24 August 2010 the judge, having heard submissions and having received evidence from both the appellant and the respondent, found that the appellant was liable to the respondent for legal fees, but that the quantum of those legal fees had to be determined by the Supreme Court. The judge held that the Supreme Court had exclusive jurisdiction to determine the legal fees which were payable by the appellant to the respondent. The application for review was adjourned to allow the taxation of costs to occur.
33 The judge made the following observations during the course of delivering her reasons:
Accordingly, in circumstances where he was not notified of the application for a new trial or the new trial date, or that default judgment had been entered, it is my view the court should exercise its discretion and set aside the default judgment allowing Mr Kedem an opportunity to argue his case, which is what I did last week.
It is to be noted Mr Kedem disputes he is liable to pay legal fees at all. Mr Kedem agrees he signed a retainer agreement with Johnson Lawyers. He maintains that he paid money in cash to Mr Johnson, some money by way of cheque and some directly to Mr Lazarevich. He also maintained that he obtained an agreement from one of the solicitors employed by Johnson Lawyers, namely Mr Leventis, to reduce legal fees. I adjourned the hearing last week in order that Johnson Lawyers could provide the court with copies of the relevant entries in the trust account and practice accounts together with retainer letters.
Amongst the further documents forwarded by Johnson Lawyers under cover of letter dated 18 August 2010 to Mr Kedem is a copy of the signed retainer letter between Johnson Lawyers and Mr Kedem dated 30 June 2005.
After hearing submissions from Mr Kedem and Mr James, for Johnson Lawyers, and considering documents handed to me during the course of the hearing, and having regard to the copy of the retainer agreement signed by Mr Kedem dated 30 June 2005, there is no doubt there is a liability to pay Johnson Lawyers' legal fees.
Having determined that Mr Kedem is liable to pay the legal fees, the issue now is the quantum or how much of those legal fees he has to pay. Now, the Supreme Court is the only forum, that is it is the only court that can determine disputes regarding quantum of legal costs between client and solicitor. So, that is the only court that can consider how much of that bill you have to pay.
…
So, in my view, it is now appropriate I adjourn these proceedings allowing either Johnson Lawyers or Mr Kedem the opportunity to apply for taxation in the Supreme Court and once taxation has taken place, the matter is to be brought back on before me for judgment to be entered for the amount of the legal costs certified by the Supreme Court taxing master.
(Emphasis added.)
34 The passages which I have emphasised are important because they make it clear that after a contested hearing the District Court held that the appellant was liable to pay legal fees to the respondent. It will be seen that that circumstance underpins all the events which follow and it means the appellant can only succeed in his argument that the Federal Magistrates Court should have refused to recognise the final judgments if there was evidence that they were obtained as a result of fraud, collusion or a miscarriage of justice.
35 On 10 December 2010 the respondent commenced proceedings in the Supreme Court for the taxation of its outstanding accounts. On 17 May 2011 the respondent's application for the taxation of its costs was heard. The appellant did not attend the hearing. Judge Lunn QC made a summary determination of the quantum of the fees payable by the appellant to the respondent in the sum of $2,800. His Honour certified that the fees were payable in that amount. Judge Lunn also made an order on 17 May 2011 that the costs of the taxation be fixed in the sum of $1,000 and be payable by the appellant to the respondent. This is the first judgment. It is an order for costs made by a court. Assuming the result of the taxation is correct, there is nothing to suggest that any error attends the order for costs.
36 On 26 May 2011 there was a further hearing of the appellant's application for review in the District Court. The appellant did not attend the hearing. Judgment was entered in favour of the respondent against the appellant in the sum of $2,800 plus interest of $735.29 and costs of the review fixed in the sum of $1,000. This is the second judgment. As will become clear, the appellant's complaint relates to his liability to pay legal costs to the respondent, not to the fixing of the sum of $2,800. There is no reason to think that any error attends the order for interest of $735.29 or the order for costs of $1,000.
37 On 10 June 2011 the appellant applied to have the summary determination of costs made by Judge Lunn on 17 May 2011 set aside. On 14 July 2011 Judge Lunn dismissed his application and he awarded costs against the appellant in favour of the respondent. On 3 November 2011 those costs were quantified in the sum of $814.65 and that is the third judgment. The following passages in his Honour's reasons outline the nature of the appellant's application and the reasons his Honour refused it:
On 10 June 2011 the respondent issued an application FDN6 in this action which in effect sought to set aside the taxation and to have a further hearing of it. He had apparently earlier on 31 May 2011 attempted to have it issued in the District Court, but this had been rejected. The application was supported by an affidavit of the respondent deposing that he had attended late on 17 May and shortly after the hearing was completed. He said that he had been in an accident and was affected by medication.
…
Subject to two possible exceptions mentioned below, all of the issues raised by the respondent as grounds why he is not liable to pay the applicant's charges for legal costs are issues of liability and not of quantification of the costs. Thus, they are to be dealt with by the District Court under s 38(7)(d) of the MCA and not by this Court under s 42 of the LPA.
The respondent's position is summarised in the last sentence of paragraph 13 of FDN8 where he deposes, "The amount of Johnson Lawyers accounts totals an amount equal to the sum of $3,975 and by the calculations above this amount has been settled in full either by direct payment or write off". Questions of incorrect appropriations of payments made, waiver of liability for costs and whether there was any agreement with Mr Lazarevich, as alleged by the respondent in FDN8, are all questions of liability.
The respondent alleges that he was charged $660 for an attendance at Court which he says was a gross overcharge. However, he then alleges that the applicant waived this charge. If the District Court was to find that it was waived, then there would be no liability of the respondent for it and no basis to have it quantified. It would only be if the District Court sets aside the judgment of 10 June 2011, re-opens the issue and finds that liability for the $660 has not been waived that this Court would be called upon to quantify whether $660 was a proper charge for the work in question.
…
Accordingly on the evidence put before the Court on FDN6, even if the lump sum taxation was set aside, there is no reasonable prospect that any taxation of the costs would result in a better outcome for the respondent than the previous lump sum taxation. Hence FDN6 is to be dismissed.
It is for the respondent whether he now applies to the District Court to set aside its judgment of 10 June 2011 and determine the issues of liability raised in FDN8. Whether the District Court will set aside that judgment is entirely a matter for the District Court. However the respondent should be aware that if he applies and fails he will almost certainly be liable for the costs of the application and those thrown away by him not having properly articulated the issues at an earlier time in the action.
(Emphasis added.)
38 The passages I have emphasised make it clear that the appellant's complaint relates to the finding of the District Court on his review that he was liable to the respondent for legal costs. There is no suggestion that any error attended the award of costs or their subsequent quantification in the sum of $814.65.
39 On 28 July 2011 the appellant made an application in the District Court to have the orders made by the District Court on the review set aside. That application was heard by another judge of the District Court on 23 August 2011. It was dismissed on that day and the respondent was awarded $250 in costs against the appellant. This is the fourth judgment. Again, there is nothing to suggest that any error attends the awarding of costs or the quantum of those costs.
40 The result of this analysis is that the appellant's complaint relates to the finding of the District Court on the review that he was liable to the respondent for legal costs. Unless that finding can be impeached, there is no reason to think there is any error attending the other judgments. That is significant because the finding was made after a contested hearing in the District Court and was the subject of an unsuccessful application by the appellant to set it aside. It follows then that the Federal Magistrates Court was correct to refuse to go behind the judgments unless there was evidence that the finding of liability for legal costs and subsequent judgments was obtained by fraud or collusion or resulted from a miscarriage of justice.
41 The evidence before the Federal Magistrates Court and the further evidence the appellant sought to adduce on the appeal went to two matters, namely, his liability to the respondent for legal costs and his alleged claim against the respondent. The latter matter may be put to one side until later in these reasons.
42 The affidavit material put forward by the appellant asserts that the respondent's accounts were paid or cancelled. As will be apparent from the passages from the reasons set out above (at [33] and [37]) the appellant seeks to agitate again matters that he agitated in 2011 before the District and Supreme Courts. There is nothing to suggest that the Federal Magistrates Court erred in declining to go behind the four judgments.