Keogh & Co Pty Ltd (ACN: 151 143 083) t/a Keogh & Co

Pless v Keogh & Co Pty Ltd (Costs) (Legal Practice List) [2021] VCAT 1352

Under section 109(2) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic), Keogh & Co must pay the specified costs of Peter Maximillian Pless (as set out in the Schedule to these orders) on the County Court costs scale on a standard basis, to be assessed by the Costs Court if the parties cannot agree on an amount.

1 All costs associated with the application for the summons issued by the registrar on 17 November 2020 (Summons), including (without limitation) the costs of the Summons itself and the costs of preparing for and attending the directions hearing on 13 November 2020.

2 All costs of preparing for and attending the directions hearing on 19 January 2021 in relation to the respondent's objections to the release of the summonsed documents to the applicant, including (without limitation) the costs of preparing the applicant's outline of submissions dated 5 January 2021.

3 All costs of any correspondence from RND Lawyers Pty Ltd to Muir Legal or the Tribunal between 14 December 2020 and 20 January 2021 in relation to the delay in compliance with the Summons, including (without limitation) the letter from RND Lawyers Pty Ltd to Muir Legal dated 15 January 2021.

4 All costs associated with pursuing the missing file relating to the property at 7 Robertson Street, Toorak between 20 January 2021 and 4 March 2021, including (without limitation) the costs of preparing the applicant's costs submissions of 2 February 2021 and the correspondence from RND Lawyers Pty Ltd to Muir Legal dated 17 and 26 February 2021 and from RND Lawyers Pty Ltd to the Tribunal dated 1 March 2021.

1 This decision concerns an application by Mr Peter Pless (Applicant or Mr Pless) that the respondent, Keogh & Co Pty Ltd (Keogh & Co), pay him the costs he has incurred in the period between 7 February 2020 and 7 June 2021 in connection with access to the files maintained by Keogh & Co for the Applicant's late father, Mr Roland Pless (Mr Pless Snr).

2 The proceedings, which have yet to progress to a final hearing, have an unusual and complicated history. By an application (originally made in the Civil Claims List) on 11 October 2018, Mr Pless Snr was claiming an amount of $90,821 from Keogh & Co concerning its 2015 advice regarding litigation brought by his son, Mr Pless (in his capacity as executor of his mother's estate), in respect of a property located at 7 Robertson Street, Toorak (Toorak Property). In particular, the substance of the claim relates to issues with an undertaking given by Mr Pless Snr to resolve the litigation. (Some further background relating to the litigation is contained in the recent Tribunal decision in Peter Pless as Executor of The Estate of Roland Pless, Deceased and Anor v Rathey.[1])

3 Mr Pless Snr died on 16 September 2019, and probate was granted to Mr Pless on 22 January 2020. By order dated 5 October 2020, the name of the applicant was amended to Mr Pless, in his capacity as executor of the estate of Mr Pless Snr.

4 It is accepted by Mr Pless that there were inadequacies in the manner in which the claim had been pleaded in points of claim filed on 30 January 2019 by Mr Pless Snr, and an amended version filed by Mr Pless' (former) wife, Ms Janne Palthe, on 3 May 2019.

5 In order to address those inadequacies, and submit amended points of claim, the solicitors for Mr Pless wrote to Keogh & Co on 20 February 2020 seeking access to the files maintained by Keogh & Co for Mr Pless Snr. In making that request, reliance was placed on rule 14.1 of the Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 (Rule 14.1) which provides that a solicitor must provide its client with any client documents it holds as soon as reasonably possible, when requested to do so by the client upon completion of the engagement.

6 Keogh & Co resisted providing the files on the basis that they had acted for Mr Pless Snr in defending the action concerning the Toorak Property in respect of which Mr Pless was the plaintiff. Further, the respondent insisted the deficiencies in the points of claim should be addressed first.

7 As the parties were unable to resolve these matters between themselves, in an attempt to cut the 'Gordian knot', I suggested (at a directions hearing on 13 August 2020) that the parties seek an opinion from the Ethics Committee of the Law Institute of Victoria (Ethics Committee) as to whether Keogh & Co was required to provide Mr Pless Snr's files to Mr Pless, as executor of his father's estate, under Rule 14.1.

8 By a letter dated 24 September 2020, the Ethics Committee advised its opinion that Keogh & Co was required to provide the files, but Keogh & Co maintained its refusal to hand them over. As a result, Mr Pless applied for a summons for the production of the files which, after a further directions hearing on 13 November 2020, was issued by a registrar of the Tribunal on 17 November 2020 (Summons). An additional directions hearing was held on 19 January 2021 to deal with Keogh & Co's objections to the release of the summonsed files to Mr Pless.

9 An electronic version of the files was finally provided to RND Lawyers Pty Ltd on 20 January 2021. However, it is noted that:

• the electronic files that were provided did not include all of the summonsed material, resulting in the Tribunal making orders, in chambers, on 4 March 2021 requiring a complete and accessible copy of the files to be produced to the Tribunal by 12 March 2021; and
• although the complete electronic files were provided to Mr Pless, they were never actually produced to the Tribunal in an electronic format that was accessible to the Tribunal. The summons was ultimately set aside by consent by orders made at a directions hearing held on 27 August 2021.

10 Under section 109(1) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic), the general rule is that each party bears its own costs in respect of VCAT proceedings. However, under sections 109(2) and (3), the Tribunal may, at any time,[2] order that one party 'pay all or a specified part of the costs of another party' where 'it is fair to do so', having regard to certain considerations. Those considerations are:

(a) whether a party has conducted the proceeding in a way that unnecessarily disadvantaged another party to the proceeding by conduct such as -

(i) failing to comply with an order or direction of the Tribunal without reasonable excuse;

(ii) failing to comply with this Act, the regulations, the rules or an enabling enactment;

(iii) asking for an adjournment as a result of (i) or (ii);

(v) attempting to deceive another party or the Tribunal;

(b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceeding;

(c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law;

(e) any other matter the Tribunal considers relevant.

11 For the reasons set out below, I am of the view that:

• Mr Pless' costs associated with requesting the files from Keogh & Co, and pursuing the Ethics Committee ruling, are not 'costs' of the proceeding within the scope of section 109; and
• in dealing with the Summons, Keogh & Co has 'unnecessarily disadvantaged' Mr Pless by its conduct of the proceeding,[3] and has otherwise been 'responsible for prolonging unreasonably the time taken to complete the proceeding',[4] such that it is fair for Keogh & Co to be ordered to pay the associated costs claimed by Mr Pless.

12 Mr Pless filed his costs submissions on 2 February 2021 (in relation to costs incurred between 7 February 2020 and 1 February 2021) (Applicant's Submissions) and 30 September 2021 (in relation to costs incurred between 1 February and 7 June 2021) (Applicant's Further Submissions).

13 Mr Pless contends that it is fair for Keogh & Co to be ordered to pay his costs for the period between 7 February 2020 and 1 February 2021 on the basis that Keogh & Co failed to comply with Rule 14.1 for over eight months and, in doing so, failed to comply with the Tribunal's orders without reasonable excuse and otherwise unreasonably prolonged the proceeding, in circumstances where Keogh & Co:[5]

• is a firm of solicitors and 'should be held to higher standards, than self-represented litigants';
• is experienced in undertaking litigation and 'ought reasonably to know the litigation process around exchange of documents';
• is 'professionally required to abide by' Rule 14.1; and
• has 'not provided any substantive reason of merit which has found any favour with either the [Ethics Committee], or the Tribunal as to why it should not have to provide the documents'.

14 In relation to the failure to comply with the Tribunal's orders, Mr Pless relies on Keogh & Co's failure to comply with the Summons, which required an electronic version of the files to be produced to the Tribunal by 14 December 2020.[6] As previously noted, the files were not produced electronically to Mr Pless until 20 January 2021 (and, in any event, were not complete).

15 Mr Pless noted that the reasons for the delay proffered by Mr Muir (the legal representative for Keogh & Co), namely that:

• he is a sole practitioner and needed time to scan the files; and
• he needed an opportunity to review the files and provide them to the insurers for Keogh & Co, before providing it to the Tribunal,

are 'not sufficient reasons' for failing to comply,[7] noting that the return date had been agreed at a directions hearing held on 13 November 2020.

16 In relation to prolonging the time to complete the proceeding, in his submissions, Mr Pless sets out a chronology of events[8] and suggests they demonstrate a 'consistent thread throughout the proceeding' of Keogh & Co:[9]

raising new objections [to the production of the files] verbally, which have never been raised before at a direction[s] hearing, which in turn delays the orderly conduct of the proceedings and causes the Tribunal and the Applicant to have to address myriad objections, which in the end have come to [nought] and have found no merit with either the [Ethics Committee] or the Tribunal.

17 Mr Pless observes that the two files produced electronically on 20 January 2021 were 'the exact same two files' which he had sought on 20 February 2020 (ie. 11 months earlier)[10] and that, had Keogh & Co produced them when requested:[11]

(a) significant time from the Tribunal and the Applicant would have been saved;

(b) costs (on both sides) could have been avoided; and

(c) this proceeding would in all likelihood have been finalised by the late quarter of 2020 or early 2021.

18 The primary basis for Mr Pless' application for further costs to be awarded in respect of the period between 1 February and 7 June 2021 is that the documents required to be produced under the Summons:[12]

• were produced in '.xps format' which was only able to be accessed by the applicant with difficulty; and
• included 'document[s] relating to the transfer of [the Toorak Property]' which were not provided until 12 March 2021, despite an undertaking given by Mr Muir at a directions hearing on 19 January 2021.

19 In relation to the latter point, Mr Pless recounts correspondence between the parties on the subject, including a purported explanation by Mr Muir that the software used to transfer the file to a USB stick did not transfer all of the files. Mr Pless submits that explanation is inconsistent with information conveyed by an officer of the Victorian Legal Services Board that Keogh & Co 'had no intentions of providing the same to [Mr Pless] without a fight'.[13]

20 Mr Pless contends that Keogh & Co was given 'ample time and opportunity to comply with the Summons' and that the

knowing failure of [Keogh & Co] to comply with the Summons in a timely fashion without compulsion, has taken up valuable time of the Tribunal unnecessarily, incurred costs, disadvantaged the Applicant and unreasonably prolonged the proceeding.[14]

21 After noting again that time and cost would have been saved if Keogh & Co had provided the files when originally requested, Mr Pless also suggests that Keogh & Co 'has consistently failed to respond in the time required by Tribunal orders throughout the course of this proceeding' which has 'substantially contributed to the unnecessary prolonging of the proceeding and consequent incurrence of costs'.[15]

22 Keogh & Co filed its response to the Applicant's Submissions on 23 February 2021 (Respondent's Submissions).

23 In relation to failure to comply with the Summons, Keogh & Co contends that the matter 'was explained at the [directions hearing on 19 January 2021] and was quickly remedied' and that, as Mr Pless was not entitled to inspect the material prior to 20 January 2021, he was 'put to no further cost'.[16]

24 Moreover, Keogh & Co contend that no costs should be awarded to Mr Pless because:

• it was only on 5 January 2021 that Mr Pless 'for the first time filed and served Points of Claim prepared by a lawyer so as to enable the Respondent to determine with some degree of certainty the claim made against it';[17]
• other than the 'short delay' relating to failure to comply with the Summons, the costs relate to 'service of a notice under the relevant Legal Practice Rules and not any activity relating to the proceedings before the VCAT';[18] and
• it has a reasonable excuse for the delay in complying with the Summons, 'namely the difficulty in assembling a file in excess of eight thousand pages by a sole practitioner in a COVID environment', and there is no prejudice to Mr Pless given that he was 'not to see the files before that time' (in circumstances when a directions hearing as to Keogh & Co's objections had been scheduled on 19 January 2021).[19]

25 Keogh & Co rely on similar matters as pointing against it being fair to for the Tribunal to exercise the discretion under section 109 to award costs, and also suggest it would be unfair for Mr Pless 'to receive costs of issues unrelated to the issues to be determined by the Points of Claim he has filed'.[20]

26 To the extent that costs are awarded, Keogh & Co submit that they should be:[21]

• limited to the relevant scale;
• only be for attendances in January 2021, after the amended points of claim were filed by Mr Pless; or
• reserved pending the final outcome of the proceeding.

27 By orders made on 27 August 2021, Keogh & Co was required to file any submissions responding to the applicant's claim for further costs by 5 November 2021. It appears that Keogh & Co have chosen not to file any submissions in this regard.

28 Mr Pless' application for costs raises an issue as to the 'costs' which the Tribunal is empowered to order be paid by one party to another under section 109 of the VCAT Act.

29 While the term 'costs' is not defined in the VCAT Act, the learned author of Pizer's Annotated VCAT Act (Commentary) suggests it is generally understood to mean 'costs of the proceeding', and not other costs.[22]

30 The Commentary goes on to express doubt as to the correctness of the Tribunal's decision in Morgan v Melbourne CC (Morgan).[23] In that case, the Tribunal awarded costs against the applicants, which included costs incurred by the respondent council in dealing with the applicants' request for information under the Freedom of Information Act 1982 (Vic). This was on the basis that 'the procedures followed by the applicants were unnecessary and largely irrelevant to the proceeding'.[24]

31 The decision in Morgan has not been followed in any other case and appears to me to be inconsistent with the decision in Schutz DSL (Australia) Pty Ltd v Victorian Workcover Authority (Schutz),[25] where it was observed that relevant costs for the purposes of section 109 are those costs which 'relate to a party's conduct of a proceeding in the tribunal' and, as such, did not include the applicant's time associated with an internal review process involving the respondent, or steps taken in related Federal Court proceedings.

32 The decision in Schutz was recently applied in Commissioner of State Revenue v Tucker in rejecting the respondent's application for costs in relation to his request for documents under the Freedom of Information Act 1982 (Vic) and a subsequent application for review by the Office of the Victorian Information Commissioner.[26]

33 Having regard to these authorities, in my view, the Tribunal does not have any power under section 109 to award costs in respect of Mr Pless' original request to Keogh & Co for the files under Rule 14.1 or in seeking the opinion of the Ethics Committee. While the files may have been requested for the purposes of the proceeding, they involve separate processes outside of the Tribunal and are not costs of the proceeding itself. I consider this to be the case even though the request for the files was made while the proceedings were already on foot, and the application to the Ethics Committee was made with the imprimatur of the Tribunal.

34 However, the failure of Keogh & Co to comply with the opinion of the Ethics Committee is a relevant factor to be considered in determining whether an order for costs should be made in relation to the costs incurred by Mr Pless:

• in applying for the Summons;
• dealing with the objections raised by Keogh & Co as to the provision of the summonsed documents;
• following up the delays in the provision of the summonsed documents between 14 December 2020 and 20 January 2021; and
• following up the missing file relating to the transfer of the Toorak Property.

35 In relation to the application for the Summons, this was necessitated by the failure of Keogh & Co to accept the opinion of the Ethics Committee.

36 It appears the principal objection of Keogh & Co to the issue of the Summons was Mr Pless having been a party to the proceeding to which the files relate. I rejected that objection in ordering that the Summons be issued, and the summonsed documents be released to Mr Pless. While it cannot be said to have had 'no tenable basis in fact or law', the objection was relatively weak, particularly in light of the opinion of the Ethics Committee that Mr Pless was entitled to the files as executor of his father's estate. By doing so, Keogh & Co have unnecessarily disadvantaged Mr Pless in its conduct of the proceeding, and otherwise prolonged the proceeding.

37 As such, I consider that it is fair that Keogh & Co be ordered to pay Mr Pless his costs in respect of his application for the Summons.

38 The same position applies to the costs of preparing for and attending the directions hearing on 19 January 2021, at which I rejected the objections of Keogh & Co to the release of the summonsed documents to Mr Pless.

39 In relation to the delays in the provision of the summonsed documents, I note that it was not acceptable for Keogh & Co to simply fail to comply with the Summons. If there were issues encountered by Mr Muir with his ability to process the information, he could either have enlisted assistance from third parties (eg. a litigation support provider) or applied for an extension of time to comply. He did neither.

40 Keogh & Co have unnecessarily disadvantaged Mr Pless by failing to comply with the Summons, necessitating further action by his solicitors to pursue the files.

41 In those circumstances, I consider it fair that Keogh & Co pay Mr Pless the costs of following up on the provision of the summonsed documents.

42 While there is insufficient information before me to be comfortably satisfied that there was a 'knowing failure' to include the file relating to the transfer of the Toorak Property in the electronic files provided to Mr Pless on 20 January 2021, the obligation to comply with a Summons is strict and onerous. Keogh & Co was obliged to provide the summonsed documents to the Tribunal. It never did so, and what it did provide to Mr Pless was incomplete.

43 Again, Keogh & Co have unnecessarily disadvantaged Mr Pless by failing to comply with the Summons, necessitating further action by his solicitors to pursue the additional file.

44 In those circumstances, I consider it is fair that Keogh & Co pay Mr Pless the costs of following up on the missing file.

• under section 109(4), where the Tribunal is of the view that a party's representative 'is responsible for conduct' under section 109(3)(a) or (b), the Tribunal can order that representative to pay the costs (rather than the represented party).

However, while it might be inferred that the actions of Mr Muir have contributed to the delays in this proceeding, as I have not been asked to exercise that power and have no information as to the instructions passing between Mr Muir and Keogh & Co, I am not in a position to form the necessary opinion to make an order against Mr Muir personally; and

• other costs incurred by Mr Pless between 20 February 2020 and 7 June 2021 appear to relate to the proceedings more generally, eg. revision of his points of claim, drafting of consent timetabling orders and the like. No basis has been put forward for the making of an order of costs relating to such matters and, for the avoidance of doubt, having regard to the evidence before me, I do not consider it fair to make an award of costs except as identified at [37], [38], [41] and [44].

46 A final issue to be addressed is the basis of the award of costs. The default rule is that a party is entitled to costs based on the County Court scale.[27] Sometimes an award of costs is made on the (higher) Supreme Court scale[28] and sometimes it may be based on the (lower) Magistrates' Court scale.[29] In the present case, no basis has been put forward by either party for departing from the default rule (or for indemnity costs) and, as such, I will order the costs be paid by Keogh & Co based on the County Court scale on a standard basis.

47 It is hoped that the parties can agree on the amount to be awarded, and instead focus their attention on getting the proceeding ready for hearing at the earliest opportunity in 2022. However, having regard to the history of this proceeding, I am not necessarily confident in this regard and have provided for the amount to be determined by the Costs Court in the event the parties are unable to agree. If this transpires to be required, it will obviously come at further (arguably, unnecessary) cost.

[1] [2021] VCAT 1304.

[2] It is well established that this permits an order for costs in respect of an interlocutory application: see, for example, Chiropractic Board of Australia v Hooper [2013] VCAT 236 and GLS v PLP [2013] VCAT 1367.

[12] Applicant's Further Submissions [4].

[22] E Nekvapil, Pizer's Annotated VCAT Act (6th Ed, Thomson Reuters, 2017) [VCAT.109.120], 'eleventh' proposition at 597 (and cases cited therein).

[23] [2014] VCAT 1111.

[25] [2011] VCAT 2401 [13].

[26] [2019] VCAT 1840 [24] and [34]-[35].

[27] Victorian Civil and Administrative Tribunal Rules 2018, r 1.07_._

[28] See, for example, ISPT Pty Ltd v Valuer General Victoria [2019] VCAT 1392.

[29] See, for example, Ukunde v Australand Residential Land Holdings Pty Limited [2021] VCAT 646.