Robinson v Baker

Supreme Court of NSW|2011-03-22|Before: Harrison J

Judgment 1HIS HONOUR : The plaintiff retained the defendant in late May 2009 as her solicitor to perform legal work with respect to a claim under the Family Provision Act 1982 . The defendant performed legal work for the plaintiff over a period of approximately two months until her retainer was terminated in late July 2009. The defendant sent the plaintiff a tax invoice for her fees on 4 August 2009 in the sum of $9,943.87. On 12 August 2009 the plaintiff asked the defendant to provide her with an itemised bill of costs. The defendant provided that itemised bill to the plaintiff on 9 September 2009 in the sum of $20,228.87. The plaintiff did not make an application to the Court for an assessment of those costs within 12 months of receiving the itemised bill and now seeks an order pursuant to s 350(5) of the Legal Profession Act 2004 that her application for assessment be dealt with after the 12 month period for which the section provides. 2Section 350 of the Legal Profession Act is in these relevant terms: " 350 Application by client or third party payers for costs assessment (1) A client may apply to the Manager, Costs Assessment for an assessment of the whole or any part of legal costs. (2) A third party payer may apply to a costs assessor for an assessment of the whole or any part of legal costs payable by the third party payer. (3) An application for a costs assessment may be made even if the legal costs have been wholly or partly paid. (3A) If any legal costs have been paid without a bill, the client or third party payer may nevertheless apply for a costs assessment. (4) An application by a client or third party payer for a costs assessment under this section must be made within 12 months after: (a) the bill was given or the request for payment was made to the client or third party payer, or (b) the costs were paid if neither a bill was given nor a request was made. (5) However, an application that is made out of time, otherwise than by: (a) a sophisticated client, or (b) a third party payer who would be a sophisticated client if the third party payer were a client of the law practice concerned, may be dealt with by the costs assessor if the Supreme Court, on application by the costs assessor or the client or third party payer who made the application for assessment, determines, after having regard to the delay and the reasons for the delay, that it is just and fair for the application for assessment to be dealt with after the 12-month period. (6)..." 3For the reasons that follow, I consider that it is just and fair for the plaintiff's application for assessment of the defendant's costs to be dealt with after the 12 month period that expired on 9 September 2010.

Background 4The plaintiff instructed the defendant to act on her behalf from 29 May 2009 until 29 July 2009, on which day she transferred her instructions to Mrs Jane North at a firm of solicitors in Dubbo. The defendant later sent the plaintiff a tax invoice for the legal work she had performed. The plaintiff said that she did not agree with the amount of this bill. She said that she had never signed a costs agreement with the defendant and had been assured by her both verbally and in writing that the defendant was acting for her on a contingency basis. In this last respect she referred to the terms of a letter that the defendant had sent her on 29 July 2009, which the plaintiff says confirmed that fact. The letter is in these relevant terms: "Thank you for your recent correspondence. We act on a contingency basis, but will require payment of disbursements. As Richard Bell discussed, it will be a matter entirely for you as to which stage you elect not to proceed further. Richard Bell advised that you should proceed up to the compulsory mediation stage at which time his fees would be limited and as set out in his costs agreement. If you decided not to proceed at that time then we would not be claiming professional costs, but would require payment of out of pocket expenses." 5By letter dated 12 August 2009 Mrs North requested the defendant to furnish an itemised bill in accordance with s 332A of the Act. The defendant provided that to the plaintiff on approximately 9 September 2009. The plaintiff sought advice from Mrs North about the bill. She said that Mrs North advised her that she would be able to have the defendant's costs assessed and that to do so she needed to lodge a complaint with "costs assessment" at the Supreme Court. Mrs North told her that she could have the bill assessed within 12 months. 6The plaintiff said that in mid-September 2009 she also phoned an organisation called Law Access on their hotline to discuss what she should do. The plaintiff said that the person she spoke to gave her the address details for the costs assessment at the Supreme Court. She agreed that she had been told that she had 12 months to do it. The plaintiff said that she was not advised by Mrs North or anyone else that she specifically needed to file a Form 1 when lodging a complaint about costs. She said that she had never disputed a legal bill of costs previously and was unaware of the process. 7The plaintiff said that on 13 April 2010 she sent a letter by pre-paid express post with a bundle of supporting documents to the Supreme Court's postal address. She produced a receipt from the Parkes Post Office for the envelope that she had purchased for that purpose. The letter that she sent is dated 8 April 2010 and extends to four pages. Some of it is important for present purposes and is as follows: "I am writing to ask could I have the costs assessed for the attached account I have from Victoria Baker...

... She told me that both her and Richard Bell, a Barrister that she recommended, both worked on a contingency basis and that I would not be up for anything, unless they got a satisfactory result, and I would only pay if we lost the case...

... I have paid Mr Richard Bell's account and I have now engaged Mrs Jane North...to act on my behalf in the matter of the Family Provision Act Claim which we have made on the Estate and 'notional estate'...

I have enclosed copies of letters that I have given to Victoria Baker on 27 th June 09, 12 th July, 09 and the 20 th July, 09 - asking her to advise me of her costs - I had enquired, many times regarding the costs, when I had telephone conversations with her - with no result - so I decided I needed to put this in writing to get some response.

I cannot afford to have anyone represent me in this costs assessment matter, but have had Jane North ... contact Victoria Baker re: this account...

Also attached to Victoria Bakers account is a clause stating that 'the Interest will be charged pursuant to section 190 of the Act if the costs are not paid within 28 days. The current interest rate is 10% per annum.' My understanding of the regulation is that the interest rate applicable to this bill is 5%.

At all times throughout my dealings with Victoria Baker I was of the understanding that I did not have to pay - until she got a result that I was satisfied with, and I was originally told that her and Richard Bell both worked on a contingency basis. I repeatedly requested costs disclosure from Victoria Baker - when this was not forthcoming I was forced to seek further legal action." 8The plaintiff said that she "waited for some time but did not hear from anyone at the Supreme Court". She said, "I concluded that the Courts were slow moving". On 12 November 2010 she was served with a statement of claim issued out of the Local Court by the defendant seeking payment of the costs. The plaintiff said that she spoke to a clerk at the Supreme Court that same day but was advised that there was no record of her letter having been received. On the same day the plaintiff "faxed the original letter and bundle of documents to the Supreme Court Costs Assessment Scheme". On 15 November 2010 she sent another letter to what she described as the senior registrar. That letter was relevantly as follows: " Re: Costs Assessment of Legal Practitioner's Costs on request of Client I refer to the above and to previous communications between us. Please confirm that your office received the documents that I faxed to you on Friday 12 November 2010, at about 4.45pm. Also, please note that I have a postal record which shows that I initially posted a request for cost assessment to your office on 13 April 2010 by express mail, within the 12 month time limitation for costs assessment, contained within the Legal Profession Act 2004 . Since that date I have heard nothing, however I spoke to someone from your office twice on Friday, who stated that he had no record of receiving the initial request for cost assessment. As I only have a single page fax machine, it is difficult to know whether the fax on Friday actually went through to your office, and just how many pages you received. In any event, I will post a further copy to your office today. Please contact me as a matter of urgency in regard to this matter, as I have received a 'Statement of Claim' on Friday morning and have had three sleepless nights since. I did not realise that your office hadn't received my paperwork, presumably, until I called your office on Friday, and I assumed that these matters were taking some time to be assessed. With respect, I do not think that it is just for me to be prejudiced as a result of what appears to be a mix up in the mail. Alternatively, if my documentation was received but was incomplete, I would be very disappointed that I was not informed of this fact by your office. Please note that I intend to seek a stay of the Local Court matter here in Parkes, pending costs assessment." 9On 16 November 2010 Senior Registrar Howard called the plaintiff. She wrote a letter to him the next day in terms that included the following: "My sincere apologies for 'my breakdown' on you yesterday - I am just so upset by this whole situation and the pressure this matter has caused me.

I greatly appreciate any assistance you can give me in getting this matter resolved as I cannot afford to engage a Solicitor to deal with this matter. I am terrified of what this could cost. I trusted Victoria Baker and I am extremely upset in the way she has acted, I feel there has to be some 'Duty of Care' - when things like this happen - you just lose any faith you have in our Legal System. How can someone give you an account, and when you are not satisfied, ask for it itemised, and it comes back almost double the costs... I have run a small business for 35 years, which has been struggling due to my personal circumstances (losing my son and husband) and also we have had nine years of drought - I have just had to borrow a further $50,000 from the bank to keep this business running - I employ three people and I just can't close it down - that is why I continually told Victoria Baker I could not afford to pay excessive legal fees, that is why I am extremely upset." 10Finally the plaintiff said that she had never disputed a legal practitioner's bill of costs before. She said that she believed that the Court Registry would contact her concerning the status of her 'application'. She said that she expected that if the application could not be accepted in its original form that it would have been returned to her as being unable to be filed. The plaintiff reiterated that she was 'unaware of the process' and had found it to be 'difficult to navigate'. She has since instructed her current solicitors to assist her.

Consideration 11The present proceedings were commenced by summons filed on 2 December 2010. The relevant period of delay is therefore the period from 9 September 2010 until 2 December 2010 or a total of 12 weeks. 12It is not in issue that the plaintiff is not a "sophisticated client". Her case is simply that she believed that she had applied for assessment within 12 months as required by sending her letter dated 8 April 2009 on 13 April 2009. Whether or not that letter was actually sent arose for consideration as an issue before me, and the plaintiff went to some considerable lengths in her evidence by reference to postal records and the like to establish, if it could be established, that the letter had in fact been sent. However, the plaintiff was never confronted in cross-examination with the suggestion that she did not send the letter in the way that she described. It is therefore difficult to proceed to any conclusion that it was not sent in the way the plaintiff asserts without either evidence establishing or suggesting the contrary or some other reliable or persuasive basis for rejecting her version. No such evidence emerged. 13If that version cannot be discounted, it follows that the plaintiff in her own way did apply for an assessment of the defendant's costs within the time provided by the Act. The defendant submitted that I should be slow to accept that what the plaintiff did, in sending a letter and a collection of miscellaneous documents to the Supreme Court, but without filing the requisite form, was sufficient to trigger the exercise in her favour of the discretion called up by s 350(4). Counsel for the defendant described this as likely to create a dangerous precedent. 14I am required to take into account the delay and the reasons for the delay in coming to a view about whether or not it is just and fair that the time be extended. The reason for the delay has been explained. It is at one level quite unsatisfactory for someone in the plaintiff's position to do nothing by way of follow up or further inquiry after writing a letter in April, until served with a statement of claim in December, and instead to rely upon and proceed in accordance with her unverified impression or assumption that the courts were "slow moving". There is some force in the defendant's submission that I should be reluctant to accept an explanation of that type. However, that evidence remains uncontradicted. It is difficult to see how it could effectively have been challenged in any event. 15I do not consider the delay to be long or significant. Indeed, the defendant's statement of claim commencing the proceedings in the Local Court to recover the amount of her costs was itself not served on the plaintiff until 12 November 2010, which takes account of slightly in excess of the first eight weeks of the 12 weeks delay that I have identified. The plaintiff commenced these proceedings relatively quickly thereafter and I do not understand any criticism to be directed at her level of alacrity in this regard. 16The question of whether or not it is just and fair to extend the time requires a consideration of the prejudice that may be occasioned to the plaintiff if the extension is not granted as well as a consideration of the prejudice that may be occasioned to the defendant if it is. If no extension is granted, the plaintiff will be confronted with a bill of costs that she says is excessive, particularly having regard to the dual contentions that the defendant agreed that she would only charge the plaintiff on a contingency basis in the first place and that the itemised bill somewhat curiously more than doubled the costs of the original bill in the second place. I am not asked to decide and I express no concluded view on the available material whether the defendant agreed only to charge on a contingency basis. The fact that the plaintiff has pointed to some material that suggests that that was the arrangement, and arguably should be given an opportunity to make that proposition good if she can, tends to support the exercise of the discretion in her favour. Moreover, the way in which the costs increased from $9,943.87 to $20,228.87 is also on one view something that she is entitled to have explained before her liability to pay the costs crystallises. The amount for which the defendant has sued in the Local Court is now $23,228.87. Both of these matters would no doubt be ventilated if assessment of the defendant's costs were now to occur. 17In comparison, the delay and consequent disruption to the defendant is less apparent. It is clear, for the reasons I have just mentioned, that there is, and will continue to be, a significant dispute both about the plaintiff's liability for the payment of costs, apart from disbursements, as well as the quantum of the costs, that she may ultimately be obliged to pay. Added to this is the fact that the plaintiff has raised the issue of the defendant's entitlement to recover her costs from the plaintiff by the current proceedings in the Local Court without applying for an assessment beforehand: see s 317(2). This is for the reason that the defendant allegedly did not provide the plaintiff with a costs agreement or a proper estimate of her costs before being retained or "as soon as practicable" thereafter in accordance with the costs disclosure provisions of the Act, in particular s 311(1). The plaintiff contends that the defendant is therefore presently precluded from proceeding with her claim in the Local Court to recover the costs, and that those proceedings are liable to be stayed. I am not asked, and I am not in a position, to adjudicate upon that issue on the evidence before me. However, the prospect that the plaintiff's argument has any merit at all, and that a stay of the Local Court proceedings is at least arguable, weighs against the proposition that an assessment will cause the defendant any real or practical prejudice in the circumstances. I accept that there is presumptive prejudice supporting an exercise of discretion in favour of the defendant in opposing the orders sought by the plaintiff. 18In Dye v Fisher Cartwright Berriman Pty Ltd [2010] NSWSC 895, Studdert AJ dealt with this issue at [14] - [15]: "[14] It is to be observed then that the time for making an application for a costs assessment has been very significantly extended. On the other hand 'unfair prejudice to the law practice' as the consideration dictating whether an application made out of time ought to be considered has been replaced by the broader concept of what is 'just and fair' having regard to 'the delay and the reasons for it'. Prior to the amendment it was for the law practice to establish that dealing with an application out of time would cause unfair prejudice to it. Since the amendment the onus is on the party making the application to establish that it is just and fair for the application to be dealt with. [15] Mr Boyce is correct of course to point out that the period for the making of an application within time has been extended to a very significant extent by reason of the amendments to the section, but it is nevertheless necessary for the Court to have regard to the extent of the delay beyond the 12 month period now fixed by the statute. In this case the delay is by no means substantial." 19I observe that the delay in the present case is greater than that confronting the plaintiff in Dye , which was less than one month. 20Although McCallum J, in Ciaglia v Beilby Poulden Costello Pty Ltd [2010] NSWSC 748 at [26], considered that it is not "a prerequisite for the grant of an extension of time to establish that the assessment is likely to produce a reduction of the amount of costs claimed", the prospect that some adjustment might occur to the amount of the costs claimed following an assessment is a matter that I consider proper to take into account on the question of whether it is just and fair to extend the time. There is in my view some prospect that an assessment of the defendant's bill of costs would lead to a reduction in the amount of costs that the plaintiff may be required to pay.

Conclusion 21In my opinion, having regard to the delay of approximately 12 weeks, and the reasons for the delay, which are effectively that the plaintiff was under the misapprehension that she had commenced the costs assessment process within the period allowed, I consider that it is just and fair for the plaintiff's application for an assessment of the costs to be dealt with after the 12 month period for which s 350(4) of the Act provides.

Orders 22In the circumstances I make the following orders: (1)Order that, subject to order 2 below, the plaintiff's application for assessment pursuant to s 350 of the Legal Profession Act 2004 of the defendant's costs rendered in a tax invoice dated 9 September 2009 be dealt with by the costs assessor notwithstanding the expiration of a period of 12 months prior to the making of the application. (2)Direct that any application by the plaintiff for an assessment of the defendant's costs be filed with the Court by the plaintiff or on her behalf not later than 7 April 2011. 23At the request of the parties I will hear them on the question of the costs of these proceedings at some time convenient to them and to me, to be arranged in consultation with my Associate.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 25 March 2011

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