MATTER : Legal Practice Act 2003

Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA

Costs - Appeal against grant of extension of time to tax solicitor's bill of costs - Extent of delay in seeking taxation of costs - Whether prejudice to solicitors by delay - Whether appellant bound by the acceptance and payment of the bills by the previous management of the appellant

Legal Practice Act 2003 (WA), s 229

Legal Profession Act 2008 (WA), s 598, s 616

Rules of the Supreme Court 1971 (WA), O 59 r 9, O 60A r 6(1)

Bosco v Solomon Brothers [2006] WASC 307 (S)

Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194

Hay v Butler and Crooks (1991) 7 WAR 333

Lewis Blyth and Hooper v Dennis [2007] WASC 177

Markopoulos v Wedlock [2008] WASC 3; (2008) 26 ACLC 129

Monopak Pty Ltd v Maxim Litigation Consultants [2007] WASC 112

Project Planning and Management (WA) Pty Ltd v Kinrade Australia Pty Ltd [2003] WASC 25; (2003) 27 WAR 194

Webb v Bateman (Unreported, WASC, Library No 6305, 27 May 1986)

JENKINS J: (This judgment was delivered extemporaneously on 19 March 2009 and has been edited from the transcript).

1 This is an appeal against the decision of a taxing officer under the Legal Practice Act 2003 (WA) (the Act) s 229 to enlarge the time within which the respondent may require the appellant to itemise its bills of costs.

2 There are 12 bills which were the subject of the respondent's application to the taxing officer. The parties agree that, given the entire contract rule is not applicable and although there was one application and there is only one appeal from the decision made on it, each bill and the matters related to it should be the subject of separate consideration on appeal.

3 Further, the parties are in agreement that the appeal is competent and that it is to be heard de novo. I am prepared to proceed on the assumption that the appeal is competent.

4 As to whether the appeal is to be heard de novo the parties appear to rely on Sanderson M's decision in Project Planning and Management (WA) Pty Ltd v Kinrade Australia Pty Ltd [2003] WASC 25; (2003) 27 WAR 194. That was an appeal from a registrar's decision pursuant to the Rules of the Supreme Court 1971 (WA) (SCR) O 60A, as is this appeal. SCR O 60A r 6(i) states, '[a]n appeal from a registrar shall be by way of rehearing'.

5 Nevertheless, the learned master found that appeals under that order were appeals by way of a hearing de novo. Similar statements, without explanation, have been made in other cases, for example Monopak Pty Ltd v Maxim Litigation Consultants [2007] WASC 112 [16]. Given that the parties are in agreement on this issue, I am prepared to proceed on the basis that the appeal is by way of a hearing de novo. However, it seems to me that the matter is not without doubt given the express terms of O 60A r 6(1) and the commonly accepted interpretation of an appeal by way of rehearing as being an appeal in which the court entertaining the appeal can only exercise its appellate powers if it is satisfied that there was error on behalf of the primary decision-maker: Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194 at 14.

6 The Act was repealed by the Legal Profession Act 2008 (WA) (Legal Profession Act) s 598, when the latter act came into force on 1 March 2009. Despite this repeal, the Act continues to apply to the matter under appeal as the respondent first instructed the appellant before 1 March 2009: Legal Profession Act s 616(1).

7 The respondent is a publicly listed corporation. The appellant is a firm of legal practitioners. The appellant acted for the respondent in relation to various matters from 23 February 2004 until 15 February 2008. In particular, these bills cover work done in respect to general meetings of shareholders of the respondent, general corporate and commercial legal matters, advice in relation to mining and associated matters and work done from 4 September 2007 until 18 February 2008 in relation to a takeover bid by Fairstar Resources Ltd (Fairstar).

8 There is a dispute between the parties as to the nature of the retainer and any costs agreement between them. The appellant asserts that since 1 July 2007 it acted on behalf of the respondent pursuant to a retainer agreement which is annexed to the affidavit of Philip Andrew Lucas sworn 16 January 2009. It appears from that annexure that the retainer was sent to the respondent with an invoice for professional fees dated 29 June 2007. Underneath the terms of the invoice there is a highlighted statement which says, 'Important: please find attached our revised retainer agreement effective 1 July 2007'.

9 The attached retainer, which the appellant's counsel advised me also constituted a costs agreement between the parties, states that it is effective from 1 July 2007. It contains hourly rates and other matters which one would expect to see in a retainer and costs agreement. It commences by stating that if the client continues to use the appellant's services after receipt of the document they will be deemed to have accepted the revised rates and terms. There is no express agreement by the respondent to the retainer agreement in evidence before me.

10 The appellant's counsel told me that the respondent was deemed to have agreed to the revised terms in the retainer agreement by virtue of the fact that it continued to use the appellant's services and paid for them after receipt of the retainer agreement. The retainer agreement also states, 'Any work which we do for you on or after 1 July 2007 will be done on the basis outlined in this document unless otherwise agreed'.

11 The respondent points to a letter from the appellant to it dated 30 January 2008 and to a subsequent email chain between the offices of the respondent. It says that on the basis of that material the current management of the respondent is unsure as to whether the retainer agreement was in effect when the bills were rendered. The letter of 30 January 2008 states that it 'serves to confirm the terms' upon which the appellant has previously and continues to act for the respondent in respect to the Fairstar takeover bid. It says that the appellant has been acting on the basis of the terms since September 2007. This is when the appellant commenced work on the Fairstar takeover bid. The letter of 30 January 2008 attached the retainer agreement and asked the respondent to confirm its acceptance of the retainer terms by signing a copy of the letter and returning it. There is no evidence before me that the retainer agreement was ever signed or returned to the appellant.

12 The email chain, a copy of which was sent to Mr Lucas of the appellant on 2 February 2008, commences with an email from the respondent's 'admin' to Mr Gary Hutchinson, its then managing director, bringing to his attention the appellant's letter of '31' January 2008.

13 Whilst the date specified is not the same date as the appellant's letter it seems to be the letter the subject of the email chain. I draw this inference on the basis of the description of the letter in the email chain.

14 Mr Hutchinson then sent the email and attachment to Mr Geoff Wedlock, Mr Peter Thompson and Mr John Palermo, persons then involved in the management of the respondent. Mr Hutchinson advised them that the appellant had been the respondent's lawyers since 2004. However, he said, 'I'm not sure whether this is ideal time to start refreshing appointments. Also the interim court orders say do nothing until the EGM. Any thoughts?'

15 Mr Palermo replied that his understanding was that the appellant wanted 'to include this letter in the panel submissions re the application made by the [respondent] and the decision to have [the appellant] prepare the application to the panel on behalf of the [respondent]'.

16 Mr Hutchinson responded to Mr Palermo, again with a copy of the email chain being sent to Mr Lucas, Mr Thompson and Mr Wedlock. He asked Mr Palermo to check the company minutes for, 'about 12 to 18 months ago,' where he said he thought that the respondent had 'refreshed' the appellant's contract.

17 Mr Hutchinson continued, 'I would really prefer to work off a mandate already in place. There is absolutely no question that the appellant Phil Lucas has been the respondent's solicitors since inception. Refer prospectus and annual report'.

18 On the basis of the evidence there is no doubt that the appellant was retained at all relevant times to provide legal services to the respondent on various matters including the Fairstar takeover bid. As to the terms of that retainer and associated costs agreement there equally does not seem to be any doubt that the appellant had provided the retainer and costs agreement to the respondent and that on the face of it the respondent had accepted the terms of the retainer agreement by continuing to instruct the appellant and by paying its bills when they were presented.

19 The only question is whether that position in any way changed after the appellant sent the letter of 30 January 2008 to the respondent and subsequently, by Mr Lucas receiving the email chain, the appellant became aware that Mr Hutchinson at least understood that the 'contract' between the appellant and the respondent had been 'refreshed' 12 to 18 months prior when in fact the retainer agreement had been in effect generally only since July 2007 and in respect to the Fairstar takeover bid from the time that the appellant commenced to work for the respondent in respect to it.

20 Further, as of 30 January 2008 the appellant requested the respondent to sign and return the retainer agreement as a way of confirming its acceptance of it. There is no evidence before me that this was ever done and, to the contrary, Mr Hutchinson's email put any such agreement in issue.

21 An alternative means of confirming the agreement was suggested in the appellant's letter. That was by emailing a confirmation and acceptance of the terms of the appellant's letter. There is no evidence before me that this was ever done. There may be then thought to be an issue raised between the parties as to the terms of the retainer and any costs agreement, particularly in respect to the Fairstar takeover bid from 2 February 2008 when Mr Lucas received the email chain. However, that issue is really a side issue to this appeal as this appeal is simply in respect to an application for an itemisation of the bills.

22 The appellant invoiced the respondent separately for general corporate advice, services in relation to rights issues, services in respect to the Fairstar takeover bid and services in relation to particular Supreme Court proceedings.

23 The reference to the Supreme Court proceedings refers to proceedings brought by three then directors of the respondent, Mr Michael Wilson, Mr Alan Rudd and Mr Constantino Markopoulos. The proceedings were brought against Mr Wedlock, Mr Palermo and the respondent itself. The history of the proceedings can be ascertained from Hasluck J's decision in Markopoulos v Wedlock [2008] WASC 3; (2008) 26 ACLC 129.

24 The plaintiffs in that matter commenced proceedings seeking interlocutory injunctions in respect to concerns they had about the management of the respondent. It seems that there were disputes between those parties going back to at least the beginning of December 2007. When the matter first came on for hearing on 24 December 2007 programming orders were made for the matter to be returned to court on 4 January 2008.

25 I have been told from the bar table that interim orders were made by Hasluck J which required the then management of the company to act in a caretaker role until the matters the subject of the litigation were resolved. The exact terms of the order are not in evidence.

26 The litigation concerned the validity of the purported appointment of Mr Wedlock as a director of the respondent, the validity of the removal of Mr Palermo as company secretary and the validity of resolutions, if any, passed at a purported directors' meeting on 24 December 2007. On 4 January 2008 Hasluck J refused the application for the interlocutory injunctions.

27 I note that, consistent with a term in the retainer to the effect that the appellant does not undertake litigation, the appellant did not represent the respondent in the Supreme Court litigation. The respondent's present lawyers represented the plaintiffs and another firm of solicitors represented the respondents including the present respondent. However, it does appear that the appellant provided advice to the respondent concerning some of the issues raised in the litigation.

28 It is relevant at this point to refer in more detail to the issue of the Fairstar takeover bid. In early September 2007 the respondent received notice of an off-market takeover bid for it from Fairstar. As Hasluck J states in his reasons [25], 'this gave rise to an issue as to whether certain directors of the respondent had conflicts of interest given that Mr Rudd was a director of Fairstar and Mr Wilson was a shareholder in it. Hasluck J notes [26] that in mid-November 2007 Mr Wedlock, Mr Hutchinson, Mr Thompson and Mr Markopoulos had resolved to reject the Fairstar takeover bid.

29 On 23 November 2007 Mr Markopoulos, Mr Hutchinson and Mr Thompson each voted in favour of a resolution that Mr Wedlock be appointed a director and chairman of the respondent. Mr Rudd and Mr Wilson abstained from voting on that occasion. However, prior to a board meeting held on 19 December 2007 Mr Rudd informed the attendees that Mr Wedlock was not validly appointed due to a clause in the respondent's constitution which purportedly provided that the company could only have a maximum of five directors. The board meeting continued without further objection [29] - [30].

30 Prior to the Fairstar takeover bid Messrs Markopoulos, Wilson, Rudd, Thompson and Hutchinson were the respondent's directors. Mr Hutchinson was its managing director and Mr Palermo was its secretary. Mr Wedlock was purportedly appointed a director in late November 2007.

31 As a consequence of the failure of the takeover bid and related disputes, Messrs Thompson, Wedlock and Hutchinson resigned as directors on or about 21 February 2008. In their stead, Mr John Lester and Mr Martin Bennett were appointed directors on 4 March 2008 and 29 August 2008 respectively. Mr David Sanders replaced Mr Palermo as company secretary.

32 The first bill rendered that is the subject of this appeal is invoice number 18435 dated 31 October 2007 in the amount of $625. It includes professional fees of $470. The professional fees are the subject of an attached schedule. That invoice is stamped and apparently signed by Mr Hutchinson. The stamp is titled 'Payment and approval of invoice'. There is a reference to a cheque number and the date of 26 November 2007. It is agreed that this is the date that it was paid. That invoice has a reference of 'General'.

33 The next invoice is dated 31 October 2007 and it has a reference of 'Fairstar Resources Takeover Bid'. It is for a total of $75,093.12. This includes professional fees of $67,355.50 and the balance being GST and disbursements. The invoice is number 18495.

34 There is again a schedule to the invoice in respect to the professional fees. It is seven pages in length. Each bill the subject of this appeal has attached to it a schedule in the following form: the left-hand column is the date of the services rendered; the next column to the right includes the initials of the person who rendered the services and the next column provides a general description of those services. The final column is headed Total. There are no costs given for individual items and no subtotals. There is simply a final figure at the bottom of the last page of each schedule.

35 The description of the work done varies in its particularity. They typically state something like 'various discussions' on a particular topic or 'discussions with' particular persons or 'reviewing' a topic or documents.

36 The third bill is tax invoice number 18444, also dated 31 October 2007, in the sum of $1757.80. It is said to be for '2007 AGM'. It includes GST of $159.80 and disbursements of $30. It has a stamp on it which indicates that it was approved for payment by Mr Hutchinson on 26 November 2007. The fourth bill is tax invoice number 18664 dated 27 November 2007. It is also said to be in respect of '2007 AGM'. It is in the amount of $605 including GST of $55. It also includes disbursements of $30. It also is approved by Mr Hutchinson and is stamped as paid on 17 December 2007.

37 The fifth bill is tax invoice number 18748, dated 27 November 2007 in the sum of $100,932.61. This includes GST of $8983.33 and disbursements in the sum of $2,260.28. It is also stamped but not said to be approved by any particular person. It does not have a date of payment. The parties appear to be in agreement that it was paid on or about 20 December 2007.

38 The sixth bill is tax invoice number 18921, dated 20 December 2007 in the sum of $5,170. This includes GST of $470 and disbursements of $30. It is said to be in respect to 'Rights issue'. It is also stamped for payment but it does not have the signature or name of Mr Hutchinson on it. The bill was paid on 15 January 2008.

39 The seventh bill is tax invoice number 18903 in the sum of $247.50. It is for work done on an 'Executive Service Agreement'. It was paid on 15 January 2003.

40 The eighth bill is tax invoice number 18914 dated 24 December 2007 for the sum of $60,527.50. This bill includes GST of $5,502.50 and disbursements of $30. It is stamped and initialled for payment. It was also paid on 15 January 2008. It is said to be in respect to 'Fairstar Resources Takeover Bid'.

41 The ninth bill is tax invoice number 18958, dated 30 January 2008, in the sum of $112,130.93 including GST of $10,001.54. It includes disbursements of $2,246.14. It is said to be in respect to 'Fairstar Resources Takeover Bid'. It is stamped for payment with Mr Hutchinson's name printed on the stamp. It was paid on 31 January 2008.

42 The tenth bill is tax invoice number 18959 dated 30 January 2008 in the sum of $6,994.65. It includes GST of $635.87 and disbursements of $44.28. It is said to be in respect to 'Supreme Court Proceedings'. It contains a stamp with Mr Hutchinson's initials. The bill was paid on 31 January 2008.

43 The eleventh bill is tax invoice number 19030 dated 31 January 2008 in the sum of $3,675.10. This bill includes GST of $334.10 and disbursements of $30. It contains a stamp without an initial on it. The bill was paid on 19 February 2008. It is said to be in respect to 'Rights Issue'.

44 The twelfth bill is dated 15 February 2008 and is tax invoice number 19195 in the sum of $69,942.44. It contains GST of $6,175.67 and disbursements of $5,086.14. It contains a stamp with initials for approving payment on it. The bill was paid on 15 February 2008. It is said to be in respect of 'Fairstar Resources Takeover Bid'.

45 All the bills the subject of the appeal were paid prior to Messrs Lester, Bennett and Sanders' appointments. Mr Lester has deposed that on 21 February 2008 the respondent's chief financial officer also resigned. Mr Lester says that once he was appointed he was requested by the other directors to undertake a review of all the respondent's service providers and the fees charged preceding his appointment. He has deposed to specific anomalies he has discovered in the bills and generally says that from examining the bills he is unable to determine how much time the appellant's staff spent providing services to the respondent, the rate at which they charged and how much the respondent was charged for each service. So much is apparent from even a brief inspection of the bills and the schedules thereto.

46 Consequently, Mr Lester says that he is unable to form an assessment of the reasonableness of the fees and costs charged by the appellant to report to the respondent's board as to whether the fees and costs charged by the appellant were properly incurred and to account to the shareholders in respect to the same issues.

47 The appellant submits that the respondent has already reported to its shareholders in respect to the relevant accounting period without qualification. It also relies on letters which Messrs Hutchinson, Thompson and Palermo provided to it apparently for use by it in respect to the respondent's request for itemised bills.

48 The letters from Mr Hutchinson and Mr Palermo are in similar terms. They say that the respective authors saw the bills when they came in, thought they were reasonable and either submitted them for approval, that is Mr Palermo, or received them for approval, that is Mr Hutchinson. They also state that they were aware that the respondent had 30 days to request further information about an account but did not do so because they were satisfied with them. Mr Thompson did not say that he had seen the bills; rather he said the appellant's charges were reasonable. Thus, the appellant says no director or officer of the respondent who was involved in the running of the respondent at the time the legal services were provided and the bills were rendered has expressed any disquiet about the amount of the bills or their form. The appellant says that it is too late now for the respondent to do so. I will deal with this submission after I have finished relating the facts.

49 On 5 March 2008 Mr Simon Theobald and Mr Brendon Rew of PPB Chartered Accountants were engaged to perform the respondent's chief finance officer functions. After a handover period of approximately five days PPB began to review payments made to the respondent's previous advisers. At a board meeting on 4 April 2008 PPB advised that the appellant had charged the respondent approximately $437,701.65 for legal services rendered during the period 1 October 2007 to 15 February 2008.

50 Mr Lester has deposed that as a result of his examination of the invoices provided by the appellant he became aware of the following matters.

(1) the schedule to invoice 18914 contains an entry for 19 December 2007 which states that DB reviewed s 249D meeting procedure and drafted s 249D notice. The only s 249D notice of any relevance was directed to the directors of the respondent and was made by ANZ Nominees Ltd as custodian for Palak Holding LLC. The respondent says that it does not understand how its solicitors could have received instructions from it to prepare the s 249D notice.

(2) in the schedule to the tax invoice 18958 there are entries for 10 January 2008 indicating that at least four persons from the appellant attended at the respondent's board meeting. Another person's time was charged for discussions with the respondent regarding the same board meeting. The respondent submits that it does not understand how the appellant could have received instructions for four persons to attend the board meeting and for an additional person to give advice in respect to it.

(3) in the same schedule there is an entry for 17 January 2008 which indicates that the respondent was charged by the appellant for telephone attendance on the Legal Practice Board regarding an admission. The respondent says that it could not possibly have given instructions to the appellant in respect to such a matter.

51 Since the respondent sought itemised bills, there has been a refund of some $700-odd from the appellant to the respondent in respect to the bills the subject of this appeal. This perhaps indicates that the appellant has acknowledged that there were some, what it has described as, typographical errors in the bills.

52 Mr Lester says that in view of what he regarded to be discrepancies in the bills he instructed the respondent's then solicitors to write to the appellant and request itemised bills. This was done on 15 April 2008. The letter referred to the 30-day time limit for requesting itemisation of bills and stated that the practitioner writing the letter believed that extenuating circumstances existed that caused the delay in seeking itemised bills.

53 The letter further said that should the appellant not be willing to provide the itemised bills the practitioner was instructed to apply to the court to seek an extension of time. The appellant was asked to confirm whether it was willing to provide the itemised bills before close of business on 16 April 2008.

54 On that date the appellant replied, requesting further information in writing. The information requested included the identity of each person on whose behalf the request was made, the reason why the request was now being made, the matters which were considered to constitute extenuating circumstances and the reason that it was considered necessary to respond to the request within one day.

55 The letter continued that the appellant expected the respondent to refrain from making any application to the court for an enlargement of time before the respondent had responded to the appellant's queries and afforded the appellant a reasonable period of time in which to consider the respondent's answers.

56 It was also noted that in any event there had to be conferral pursuant to SCR O 59 r 9 prior to making any such application. The letter then said that if the respondent did seek to apply to the court for an extension of time the application would be opposed. The appellant's counsel submitted to me that, thus, the appellant had from the very first indicated that it would oppose the application for an enlargement of time and, thus, there was no justification for the respondent delaying making any application to the court. I disagree. The letter quite clearly indicated to the respondent that the appellant was considering the respondent's request but that it could not do so until certain information had been provided to it. In my view the latter reference in the letter to opposition to any application can only be read as being in respect to an application made at that time prior to the appellant being given an opportunity to further consider the respondent's request.

57 What ensued was what I describe as an exchange of unflattering correspondence between the parties where they exchanged unproductive tit-for-tat allegations of various sorts including allegations of inadequate time to provide responses, unreasonable requests and being deprived of information necessary for one party or the other to respond to the correspondence of the other party.

58 As I said to the parties at the hearing, the exchange of such correspondence is contrary to the efficient and economical disposition of disputes between parties. I will not lay the blame for the exchange of the correspondence at the feet of either party. Both parties appear to have engaged in it. However, as a result of the exchange the resolution of the issues between the parties with respect to itemisation of the bills was not resolved and many months passed.

59 On 30 October 2008 the respondent filed a notice of originating motion for an enlargement of time within which to request itemised bills pursuant to the Act s 229(a). Even by that time the appellant does not appear to have categorically refused to provide the itemised bills.

60 The respondent's delay in requesting the appellant to provide itemised bills after the 30 day time limit expired ranges from 167 days in respect of the invoice dated 31 October 2007 to 30 days in respect to the invoice dated 15 February 2008. Mr Lester deposes that at the time he became a director of the company he was not aware that there was a 30 day time limit. He does not indicate when he became so aware.

61 The Act s 229(a) provides that the taxing officer may enlarge the time prescribed for the taking of any step in that division including the time to seek an itemised bill of costs. Consolidated Practice Direction 4.7.4 says that when the court is considering an application to extend the time within which a party charged may request an itemised bill of costs it may consider all or some of the following matters:

(a) the reason for the delay in question;

(b) whether a refusal to allow an extension of time may cause injustice to the applicant;

(c) whether there is evidence that that suggests that the bill may be excessive;

(d) whether, and to what extent, extending the time would cause prejudice to the practitioner; and

(e) the practitioner's reasons for opposing the application.

However, the Court will not be limited to those matters.

62 In Bosco v Solomon Brothers [2006] WASC 307 (S) 65 - 71, Hasluck J helpfully reviewed a number of other cases which had considered the principles which ought to be applied when a court was determining an application to extend time within which to seek an itemisation of a bill of costs. What emerges from a consideration of these cases is that, as Franklyn J observed in Webb v Bateman (Unreported, WASC, Library No 6305, 27 May 1986):

The court's obligation is to ensure that justice is done or that no injustice results between the parties.

63 In addition to the matters now referred to in Consolidated Practice Direction 4.7, Franklyn J said that the application should be determined in the context of the apparent purposes of the statutory regime. He described those purposes as being:

[T]o protect a client from excessive charges by a practitioner, and to enable a client to be satisfied that bills of costs are not excessive, whilst imposing time limits, (which in a proper case may be extended) to prevent a client unfairly taking advantage of the provisions to delay the obligation to pay proper costs, and to avoid frivolous objections.

64 See also Bosco [65]. The cases have noted that the reason why the practitioner's reasons for objecting to an enlargement of time are important is to ensure that the practitioner, as an officer of the court, is seen to be acting with proper motives and not just merely attempting to prevent taxation of the bill from taking place. In this context in Hay v Butler and Crooks (1991) 7 WAR 333 Owen J said:

If a client requests the provision of an itemised bill and the request is made within the 30-day period specified in s 65(1) the practitioner is obliged to comply. If the request is made outside that 30-day period, the practitioner is not obliged to comply unless the taxing officer extends time. On the other hand, common sense, good commercial practice and a logical extension of the nature of the relationship between solicitor and client would dictate that except in most unusual circumstances, a practitioner ought always to provide an itemised account when requested so to do. It is this element which sets a legal practitioner's claim for fees apart from normal commercial practices (339).

65 I respectfully agree with these comments. The determination of an application for enlargement of time in these circumstances is not just a decision in respect to a commercial dispute between a service provider and a customer, even where the customer is a commercially sophisticated entity. It is a decision in respect to the peculiar and significant relationship between a solicitor and client. Although I acknowledge that in applications of this kind greater attention to the requirement to seek itemisation within time is expected of clients who are legally represented, I do not accept, as the appellant suggests, that other cases regarding extensions of time to do things in the course of litigation are directly applicable to applications of this kind.

66 I do not intend to say any more in respect to the relevant law. I have taken into account the cases and the matters raised and commented on by Hasluck J in Bosco.

67 I now turn to consider those matters specifically referred to in Consolidated Practice Direction 4.7. The first is the reason for the delay in requesting an itemised bill of costs. The evidence establishes that at the time the bills were rendered the then management of the respondent considered them to be reasonable and paid them.

68 However, during the period in which the bills were rendered a dispute arose between the directors of the respondent, resulting in the resignations of some board members including the managing director and the respondent's secretary. Subsequently the respondent's chief finance officer also resigned.

69 The dispute and the resultant upheaval in the management of the respondent explains to my satisfaction why the request for itemisation was not made before 15 February 2008, the date of the board resignations I have spoken of. It also explains why there had to be some period after that for the new management of the company to consider the accounts.

70 The appellant points out that the respondent was legally represented by new solicitors from 18 February 2008 yet the application under appeal was not made until 29 October 2008. The appellant relies heavily on the delay up to 29 October 2008 as indicating that there is no justification for the delay in this matter.

71 In my opinion the most crucial period of delay is between the expiry of the relevant 30 day period and 15 April 2008, the date the respondent requested itemised bills of costs. This is because thereafter the appellant, having been put on notice that itemisation was requested and could ultimately be ordered, was in a position where it could mitigate any potential prejudice to it from the delay whereas prior to receiving that request it could not be expected to do so.

72 Although there is no explanation as to why the respondent's solicitors did not prompt the respondent to request the itemisation at any earlier time it does not appear to me that a delay of some two months between February and April is exceptional given the then recent upheavals in the company. Mr Lester explains this period as a time when he was gathering information and various personnel within the respondent were being replaced.

73 The delay after 15 April 2008 is not to the credit of either party. However, on a fair reading of the correspondence I am of the opinion that the appellant should not be able to lay all the blame for this delay between 15 April 2008 and 29 October 2008 at the feet of the respondent and its solicitors. Both sides must take responsibility for it.

74 The appellant places a lot of emphasis on the apparent willingness of the respondent to accept and pay the bills as they were rendered as indicating that there can be no reasonable excuse for the delay in seeking itemisation.

75 In my opinion the submission to some extent misses the point. That evidence explains why there were no requests for itemisation at the time the bills were rendered and paid. It is the change in the management of the company in circumstances which indicated that the directors had lost confidence and trust in each other that explains the delay.

76 The appellant also places reliance on the fact that Mr Markopoulos, the respondent's present executive chairman, was a director at all relevant times and yet has not filed any evidence in support of this appeal or explained why he did not object to the bills when they were rendered.

77 I take this into account but on the other hand there is evidence from Mr Lester that he, as an independent director unassociated with the previous conflict, has been authorised by the respondent to pursue this matter. Mr Markopoulos is not the heart and mind of the respondent.

78 The appellant refers to a letter dated 21 February 2008 in which Mr Markopoulos apparently said that, 'We are happy to settle all outstanding accounts once they have been presented and in accordance with normal payment terms'. That letter is not in evidence so it is very difficult for me to judge its effect. In any event the letter was only six days after the former directors resigned and prior to the appointment of Mr Lester, thus it was in effect sent prior to the new management having had an opportunity to consider the bills.

79 In conclusion, in respect to this issue of delay I am satisfied that there is a reasonable explanation for at least some of the delay but it loses its strength the longer the period of the delay. Thus, the explanation is not as persuasive in respect to the bills rendered in October and November 2007 as it is in respect to the bills rendered in 2008.

80 Obviously this is not because the explanation changes but because the older the bill the more the respondent should have moved expeditiously in respect to it once the new management was installed. Also, the earlier the bill the less reason there is for the new management to question the judgment made by the old management as to the reasonableness of the bill, as no conflict had then emerged between the directors.

81 I will not deal directly with the issue of whether a refusal to allow an extension of time may cause injustice to the applicant at this point. I now move on to the question of whether there is evidence that suggests that the bills may be excessive.

82 The respondent submits that the appellant's reliance on the letters of Messrs Thompson, Hutchinson and Palermo that the appellant's charges were reasonable must be of little weight given the anomalies Mr Lester has discovered in the bills. The appellant submits that the letters ought to be given significant weight. As former directors and a former secretary it would not be in the authors' interests to actively mislead the court over this issue.

83 The respondent also relies on the email chain of early January 2008 as showing that Mr Hutchinson, at least, did not have a clear idea as at early 2008 what the costs agreement was between the parties so that it is difficult to see how he could assert that the bills were in accord with it. I think that there is some strength in this submission.

84 The respondent also points to the obvious error in invoices in respect to the respondent being charged for the drafting of a shareholders s 249D notice and for a telephone conversation with the Legal Practice Board regarding an admission as indicating that the bills are on their face not free from error. Consequently, it is difficult to see how Messrs Thompson, Hutchinson and Palermo could assert that they were.

85 The appellant submits that these are minor errors at best in respect to small amounts in only a small number of bills and that in any event it has now refunded some money in respect to them. There is also some truth in the appellant's submissions but the fact that the bills do not appear to be entirely free from error is one factor to weigh in favour of enlarging time when exercising my discretion. There is otherwise insufficient evidence before me to enable me to decide whether the bills are excessive or not. However, that is not a determinative issue.

86 I now move to the question of prejudice to the practitioner. The appellant submits that staff have been paid, income tax has been paid and GST has been paid on the basis that the bills have been paid without objection. Further, financial reports have been prepared based on the same facts.

87 I agree that there would be prejudice to the appellant if as a result of enlarging time the respondent sought a taxation of costs and was successful in having the costs reduced given these matters. Against this, however, the following must be taken into account:

(1) At this stage all that is sought is an itemisation of the bills.

(2) It does not automatically follow that once itemised, the bills will be taxed or that they will be reduced on taxation.

(3) The appellant has known since 15 April 2008, that is prior to preparing income tax returns for the year ending 30 June 2008, that the respondent was asking for itemised bills and had instructions, if agreement was not obtained, to apply to the court for them. Consequently the appellant was on notice that it may ultimately be ordered to provide the itemised accounts and that taxation of them could follow.

(4) Thus the appellant was aware that its various payments, taxes and reports for the year ending 30 June 2008 could be affected.

(5) Despite being aware of the potential for prejudice from an itemisation of its bills the appellant failed to reply to correspondence from the respondent's solicitors dated 27 May 2008 until 15 July 2008. Even then it said it was not in a position to properly consider the respondent's request. It requested further information and said that it would consider it. If the appellant was truly concerned about potential prejudice it surely would have refused the request at a much earlier point in time and given as a reason for doing so the need for it to avoid prejudice to it from further delay.

(6) Having been put on notice on 15 April 2008 that this application may be made the appellant has been in a position where it could mitigate at least some of the potential prejudice to it.

(7) There is no evidence before me that any potential prejudice is overwhelming.

(8) The appellant relies on judicial comment to the effect that there is prejudice simply in delay; Lewis Blyth and Hooper v Dennis [2007] WASC 177 at 68. Obviously on the face of it the quicker an issue, such as this, is resolved the better it is for all parties. That is why there are time limits. But this is not a telling point in an application of this nature.

88 Lastly, if a subsequent taxation of the bills discloses that the appellant has been overpaid, then the appellant would have had no right to render the account in that amount and no right to keep money which had been wrongly paid to it. Any prejudice to it in that respect would be of its own making.

89 The appellant submits that it will be prejudiced in the preparation of the bills because the respondent has its files. The respondent submits that the files are in the same form they were in when the appellant delivered them to it and it is prepared to return the files to the appellant so that the bills can be prepared.

90 I am of the view that if an enlargement of time is granted it should be conditioned on the respondent returning the files to the appellant so that the bills can be prepared. In this way, this particular form of prejudice can be overcome.

91 The appellant submits that it will suffer prejudice as two staff members who worked on the files have left its employ. In response, the respondent says that the preparation of itemised bills is a clerical act requiring disclosure of the records kept by the appellant and thus it is not necessary for the appellant to revert to its former staff members. However, I accept that whilst it is primarily the case that the preparation of the bills is a clerical act I also accept that particularly in the case of large bills there may be some items which require clarification or confirmation by the staff member who provided the service.

92 However, there is no evidence before me as to when these members of the appellant's staff left its employ and why, if it was after 15 April 2008, the appellant did not ensure that full records of their work on these files was completed before they left.

93 Thus, whilst I accept that there is potentially a prejudice to the appellant to be taken into account in this respect, the extent of any actual prejudice in respect to this matter is not able to be determined by me.

94 I next move to the question of the explanation by the practitioner for opposing the application. The respondent submits that the appellant has not put forward any cogent reason for opposing the application. The appellant on the other hand says that it has. I am not prepared to make any findings against the appellant in this regard. There are some valid bases for the appellant's opposition to the application, although I am not sure that the appellant has properly taken into account in opposing the application Owen J's comments that 'except in most unusual circumstances a practitioner ought always to provide an itemised account when requested to do so'.

95 The last matter for me to take into account under Consolidated Practice Direction 4.7 is whether a refusal to allow an extension of time may cause injustice to the applicant. This issue in effect involves the same issues that the respondent has relied upon in respect to delay. It seems to me that there is potentially some injustice to the respondent if an extension of time is refused in that very substantial sums of money were paid to the appellant for legal fees during a time when the directors of the respondent were in conflict.

96 A number of people who were involved in the respondent during that time have now resigned and it is not unnatural that the respondent would now wish to be satisfied that the legal fees rendered and paid during the period of conflict in its management were properly rendered, were reasonable and were in accordance with the costs agreement between the appellant and the respondent. The only way the respondent can be satisfied of these matters is if an enlargement of time is granted.

97 I now draw these threads together in my conclusion. In my opinion this application should be dealt with in light of the dispute that occurred between certain directors of the respondent in late 2007 and the resultant upheaval in the management of the respondent.

98 It is implicit in the respondent's application that the principal reason for the application is so that it can satisfy itself that during this time of conflict and upheaval it was rendered and it paid legal bills which were not excessive in respect to its needs and instructions of and to the respondent during that period.

99 In my view there is insufficient evidence to satisfy me that this explains why the respondent is seeking itemisation of the bills of 31 October 2007 and 27 November 2007. I am also of the view that given the age of those bills the respondent should have acted more quickly to seek itemisation of them and to apply to this court for an enlargement of time in respect to them. Consequently, I am not prepared to enlarge time in respect to the bills of 31 October 2007 to 27 November 2007 inclusive.

100 In my view the circumstances are significantly different enough in respect to the balance of the bills to draw a distinction between them and the earlier bills. First, the delay in seeking itemisation is not as significant. Second, the disputes between the directors which arose in December provides a cogent reason for the present management to seek itemisation of those bills, despite them having been paid.

101 Third, by 2 January 2008 the appellant should have been put on notice by the email chain of 2 January 2008 that there may have been some misunderstanding by its client as to the terms of its costs agreement with it, yet it appears not to have followed this matter up with the client. Lastly, the bills in this latter period of time includes invoices in which the apparent anomalies which Mr Lester has identified were noted.

102 Having said this, however, even in respect to these bills I would not enlarge time in respect to invoice 18903 for $247.50 as it is sufficiently itemised already. It is only said to be in respect to one area of work, that is a preparation of an executive agreement. In my view there is insufficient justification for requiring further itemisation of that bill.

103 For these reasons in my opinion in order to ensure that justice is done between the parties, time within which the respondent may require the appellant to itemise its bills of costs, numbers 18921, 18914, 18958, 18959, 19030 and 19195 ought to be enlarged, conditional upon the respondent providing the appellant with the original files so that it can prepare the bills of costs. Otherwise the appeal is dismissed.