THE APPLICATION LODGED BY RIGBY COOKE UNDER THE FAIR TRADING ACT 1999 (VCAT application C1507 of 2009):
[2]
Rigby Cooke lodged a counterclaim in the application brought by Mr. Shaw under the Legal Profession Act, being the application numbered J102 of 2007 that I have been dealing with up to this point. On 2 March 2009, I ruled that Rigby Cooke could not lodge a counterclaim in that application because the amount of the counterclaim exceeded the jurisdictional limit: see Shaw v Rigby Cooke Lawyers[2009] VCAT 319.
The following day, 3 March 2009, Rigby Cooke lodged an application under the Fair Trading Act, which does not have a jurisdictional limit. The application sought an order that Mr. Shaw pay $29,851.55, and interest thereon, for legal costs said to remain unpaid in the Supreme Court proceedings.
I have found that Rigby Cooke terminated its retainer on 15 August 2006. In the letter sent to Mr. Shaw on that date, Rigby Cooke stated that the amount of costs owing by Mr. Shaw was $24,910.72. However, the particulars annexed to the application state that a further account for $4,940.83 was rendered to Mr. Shaw on 12 September 2006. That brings the amount unpaid up to the amount claimed in the application, namely $29,851.55.
Mr. Shaw maintained that the costs charged by Rigby Cooke for its attempts to obtain the file from Gadens were excessive. The bills of costs rendered by Rigby Cooke indicate that between 15 and 27 April 2005 Mr. Shaw was charged for the sending of a facsimile to Gadens seeking the file, the perusal of its response, four telephone attendances upon Gadens (in three of which only a message was left), and three telephone attendances upon Mr. Shaw. The relevance of 27 April 2005 is that on that date Mr. Shaw instructed Rigby Cooke not to take further action. No charge seems to have been made after that date for work associated with the collection of the file. I find that the amounts charged by Rigby Cooke for its attempts to obtain the file were not excessive.
Mr.Whitelaw of Rigby Cooke negotiated with Mr. Shaw on numerous occasions from 26 July 2006 until 16 August 2006 about the outstanding costs. Mr. Tatarka, who appeared for Rigby Cooke, said that the work carried out by Mr. Whitelaw was an attempt to resolve differences between Rigby Cooke and Mr. Shaw, and that Rigby Cooke did not intend to charge for that work. Mr. Tatarka accepted that a charge of $71.50 (including GST) made on 14 August 2006 should not have been made in the account of 12 September 2006. That reduced the amount claimed to $29,780.05.
No evidence was given at this hearing which indicated to me that the amounted claimed should be further reduced. Consequently, I will make an order in application C1507 of 2009 that Mr. Shaw pay $29,780.05 to Rigby Cooke for the provision of legal services.
Some amounts claimed for interest upon the unpaid accounts were not calculated at appropriate interest rates. The calculations in the application appear to overlook amendments made to s.3.4.21 of the Legal Profession Act2004. The amendments came into operation on 8 November 2007, although the amendments adopted interest rates prescribed by the Legal Profession Regulations 2005 which applied only from 6 December 2007.
I have calculated interest from 30 days after the date of each account up to 5 August 2009 to be $9,146.85, and I will make an order for payment of that amount.
[3]
THE APPLICATION LODGED BY MR. SHAW UNDER THE FAIR TRADING ACT 1999 (VCAT application C3826 of 2009):
[4]
Mr. Shaw filed a defence to the counterclaim lodged by Rigby Cooke in the Legal Profession Act application, being the counterclaim that I ruled could not be lodged under that Act because it exceeded the jurisdictional limit. As I have mentioned, Rigby Cooke then lodged application C1507 of 2009 under the Fair Trading Act. The hearing proceeded, with Mr. Shaw's defence to the counterclaim lodged under the Legal Profession Act being treated as a defence to Rigby Cooke's application under the Fair Trading Act.
The defence repeated most of the claims made by Mr. Shaw in his application under the Legal Profession Act. I have dealt with those claims, and I see no reason to deal with them differently when put as part of a "consumer and trader dispute" as defined by s.107 of the Fair Trading Act. Consequently, I will say no more about those claims.
The defence made three claims against Rigby Cooke that were not included in Mr. Shaw's application under the Legal Profession Act. The first new claim was that Rigby Cooke should pay the costs charged to him by Coadys for acting in respect of his appeal, plus the costs charged to him by Blackstone Legal Costing for handling taxations of costs on his behalf. Mr. Shaw did not provide any particulars of the claim, and no evidence was given that might support it.
The second new claim was that Rigby Cooke should pay exemplary damages for "inconvenience, wasted time, anxiety, worry and distress ... unconscionable and misleading conduct ... loss of and enjoyment of apartment ... loss of capital gain/investment return of apartment". I will assume that the apartment concerned is the unit the subject matter of the Supreme Court proceedings.
Mr. Shaw contended that the claim was based upon s.8 (unconscionable conduct) and s.9 (misleading or deceptive conduct) of the Fair Trading Act. Contravention of those sections can lead to an award of damages under s.159. Mr. Shaw did not provide particulars of the conduct alleged to amount to a contravention of the sections 8 & 9. That has not deterred me from giving consideration to all of the evidence given during the course of this hearing.
I find that the evidence as a whole did not establish that any conduct on the part of Rigby Cooke amounted to unconscionable conduct or misleading or deceptive conduct, and that there was no contravention of sections 8 or 9 of the Fair Trading Act 1999.
The third new claim was that Rigby Cooke contravened s.12 of the Fair Trading Act by making a false representation in relation to the provision of legal services. The claim concerned the engagement of Mr. Harrison of counsel. Mr. Shaw provided particulars of this claim, namely that Rigby Cooke "misrepresented the terms of the retainer by arranging with counsel that [Mr. Shaw] would be responsible for direct payment of invoices to Mr. Harrison despite the fact that [Rigby Cooke] directly engaged counsel. ... [Rigby Cooke] advised [Mr. Shaw] that this was the standard practice".
Mr. Shaw gave evidence as to the representation alleged in the particulars. I understand that Mr. Shaw entered into a costs agreement with Mr. Harrison, but the agreement is not in evidence. The brief delivered by Rigby Cooke to Mr. Harrison is in evidence. It states in large bold print "Rigby Cooke acts as the agent for John Shaw in retaining your services in this matter. John Shaw remains solely responsible for your fees and Rigby Cooke acts in the capacity as an agent on the instructions of John Shaw".
I am satisfied that Mr. Shaw, not Rigby Cooke, was solely responsible for payment of Mr. Harrison's fees. I find that to be a standard practice, although an arrangement whereby a solicitor is primarily liable for counsel's fees also is a standard practice. I find that the representation, if made, was not false and that there was no contravention of s. 12 of the Fair Trading Act. In any case, Mr. Shaw does not appear to have suffered any loss, as he would have been required to pay Mr. Harrison's fees either to Mr. Harrison or to Rigby Cooke.
On 18 March 2009, the last day of hearing, Mr. Shaw lodged an application under the Fair Trading Act, numbered C3826 of 2009. The application sought an order, to be made pursuant to s.108(2)(b) of the Fair Trading Act, that Rigby Cooke pay damages of $750,000.00 to Mr. Shaw.
With one exception, the application was a repetition of claims made by Mr. Shaw in his application under the Legal Profession Act, and claims made by him in his defence to the counterclaim lodged by Rigby Cooke under the Legal Profession Act. I have dealt with those claims, and I have nothing to add.
The exception was an allegation that Rigby Cooke failed to provide Mr. Shaw with information about legal costs, and other matters, which Rigby Cooke had a statutory obligation to provide. The allegation is not properly categorised as a new claim. It is a defence to the claim made by Rigby Cooke for payment of legal costs.
Mr. Shaw alleged that "Costs disclosure doesn't comply with the Legal Practice Act 1996 or Legal Profession Act2004".
As I have mentioned, Mr. Shaw engaged Rigby Cooke on 14 April 2005. At that time, the statutory obligations of legal practitioners to provide information to clients about costs and other matters appeared in Division 1 of Part 4 of the Legal Practice Act 1996.
Mr. Shaw alleged, first, that Rigby Cooke " failed to warn the applicant [Mr. Shaw] of the range of costs the applicant would have to pay if unsuccessful". Mr. Shaw put into evidence information in writing given to him by Rigby Cooke on 14 April 2005. The information appeared to me to include all of the information that Rigby Cooke was obliged to provide. The information states "If you are unsuccessful, then you will be obliged to pay the other party approximately 50% of the total fees paid to Rigby Cooke".
Rigby Cooke regularly rendered tax invoices to Mr. Shaw, and those tax invoices are in evidence. I find that the tax invoices gave Mr. Shaw up to date information about the legal costs that he was incurring and, as a consequence, up to date information from which he could calculate approximately 50% of the costs of the developer.
The tax invoices rendered by Rigby Cooke to Mr. Shaw are in evidence. However, evidence was not given as to the amounts that Mr. Shaw was required to pay to the developer under orders made at different stages in the Supreme Court proceedings. Consequently, I am unable to determine whether the 50% estimate needed to be brought up to date at some stage in those proceedings.
Mr. Shaw alleged, secondly, that Rigby Cooke failed to provide "a fee letter, or costs disclosure information" when he gave instructions for the appeal. Section 89 of the Legal Practice Act 1996 required Rigby Cooke to notify Mr. Shaw of "any substantial change" in the information provided. The section obliged Rigby Cooke to provide information to Mr. Shaw as to the estimated costs of the appeal. Rigby Cooke continued to render regular tax invoices to Mr. Shaw. It sent an email to Mr. Shaw on 19 June 2006 asking for "a setting down fee" of $2,701.20, which Mr. Shaw promptly paid. The correspondence that passed between Mr. Shaw and Rigby Cooke from April to August 2006, much of it already dealt with by me in relation to the dispute which led to the termination of the retainer, implored Mr. Shaw to make arrangements with counsel for payment of their fees for the appeal.
It is possible that Rigby Cooke contravened s.89 by failing to fully inform Mr. Shaw of the estimated costs of the appeal. Nothing else was brought to my attention that might have required Rigby Cooke to notify Mr. Shaw of changes to information given to him on 14 April 2005.
However, I will not make any finding as to contravention, partly because the issue was not properly addressed by either party during the present hearing and partly because, even if there was a contravention, the contravention could not lead to the making of an order adverse to Rigby Cooke.
The effect of a failure to provide information is set out in s.91. In substance, upon an assessment of costs by the Taxing Master or upon determination of a costs dispute pursuant to the Legal Practice Act 1996, the costs charged by a legal practitioner may be reduced by an amount proportionate to the seriousness of the failure to provide information. The present costs dispute is being determined pursuant to the consumer and trader dispute provisions in the Fair Trading Act 1999. Section 91 does not apply to a costs dispute that is being determined under the Fair Trading Act: Heaton v Burlock[2006] VCAT 2196.
Mr. Shaw did contend that Rigby Cooke was not entitled to bring a claim under the Fair Trading Act until its costs are reviewed by the Taxing Master. He relied upon s.3.4.17 of the Legal Profession Act2004. However, that section has no application. The commencement day of the 2004 Act was 12 December 2005. Clause 3.1 of Schedule 2 to the Legal Profession Act2004, which contains transitional provisions concerning client information and legal costs, provides that the 1996 Act "continues to apply to a matter if the client first instructed the law practice in the matter before the commencement day". Mr. Shaw first instructed Rigby Cooke on 14 April 2005, before the commencement day. The 1996 Act did not have a provision akin to s.3.4.17 of the 2004 Act.
I acknowledge that Mr. Shaw submitted, in substance, that the appeal was a different "matter" for the purposes of Clause 3.1. His submission was not without merit, but I reject it. I regard the Supreme Court proceedings as a whole to have been "the matter". I do not regard the application for summary judgment, the trial, the appeal and the various interlocutory applications to have been separate matters.
As Mr. Shaw has not succeeded in any of the claims made in his defence, or in his largely repetitious claim under the Fair Trading Act, I will make an order dismissing application C3826 of 2009.
[5]
Mr. Shaw made 17 claims in the application brought by him under the Legal Profession Act2004, although many of those claims were in reality several claims. I have awarded compensation of $1,240.00 in the claim concerning the preparation of witness statements. I have awarded compensation of $5,000.00 in the claim concerning the costs order made on 25 May 2006. The other claims are dismissed.
In the application brought by Rigby Cooke under the Fair Trading Act 1999, I have ordered that Mr. Shaw pay $38,926.90 to Rigby Cooke, being $29,780,05 for the provision of legal services, plus interest thereon of $9,146.85 calculated up to 5 August 2009. I will order that the compensation awarded to Mr. Shaw be offset, thus reducing the amount payable by Mr. Shaw to $32,686.90.
The application brought by Mr. Shaw under the Fair Trading Act 1999 was in large measure a repetition of claims made by him in the other applications, and is dismissed.
Parties
Applicant/Plaintiff:
Shaw
Respondent/Defendant:
Rigby Cooke Lawyers
Cases Cited (14)
Shaw v Rigby Cooke Lawyers (Legal Practice) [2009] VCAT 1604 (5 August 2009)
Mr. Shaw was dissatisfied with the way in which Gadens acted on his behalf. He lodged an application to VCAT, seeking compensation. That application was dismissed on 6 November 2008: see Shaw v Gadens Lawyers[2008] VCAT 2643. Mr. Shaw obtained leave from the Supreme Court to appeal against that decision on two questions of law. As far as I am aware, the appeal has not yet been determined.
At VCAT, Shaw v Gadens Lawyers was heard and determined by me. Mr. Shaw appeared on his own behalf in that case, as he does in the present proceedings. Mr. Tatarka of counsel appeared for Gadens, and now appears for Rigby Cooke.
As the background to the present application is set out in detail in Shaw v Gadens Lawyers, the parties agreed that no evidence need be given in the present proceedings about events that took place prior to Rigby Cooke commencing to act for Mr. Shaw on 14 April 2005. The parties also agreed that it was not necessary for any finding to be made about any event that took place prior to that date.
The events that occurred prior to 14 April 2005 are set out in paragraphs 1 to 57 of the decision in Shaw v Gadens Lawyers, and I will not repeat them here.
Rigby Cooke lodged a defence and counterclaim to the first application. The counterclaim sought an order for payment of legal costs of $29,851.55, alleged to be the balance owing by Mr. Shaw to Rigby Cooke for legal services provided in the Supreme Court proceedings.
I ruled that Rigby Cooke could not bring a counterclaim for that amount in proceedings brought under the Legal Profession Act: see Shaw v Rigby Cooke Lawyers[2009] VCAT 319 [6] to [16]. The substance of the ruling was that a "costs dispute" is defined by s.4.2.2(2)(a) of the Act as "a dispute in relation to legal costs not exceeding $25,000.00 in respect of any one matter". The costs charged in the one matter by Rigby Cooke far exceeded both the statutory limit of $25,000.00 and the $29,851.55 sought in the counterclaim.
The outcome of the ruling was that Rigby Cooke lodged the second application to VCAT [C1507 of 2009]. The application was made pursuant to the consumer and trader dispute provisions in Part 9 of the Fair Trading Act 1999. Those provisions are not subject to a monetary limit. The application under the Fair Trading Act simply annexed the same counterclaim that Rigby Cooke had purported to make under the Legal Profession Act.
The response of Mr. Shaw to the Fair Trading Act application was to lodge a counterclaim to that application, which was the third application lodged with VCAT [C3826 of 2009]. The counterclaim was made by Mr. Shaw under the Fair Trading Act, but it repeated many of the claims made by Mr. Shaw in his application under the Legal Profession Act. It also accused Rigby Cooke of unconscionable and misleading conduct in contravention of sections 8 & 9 of the Fair Trading Act, and of making a false representation in contravention of s.12 of that Act.
The compensation sought in the third application as lodged by Mr. Shaw was $750,000.00, but particulars provided by Mr. Shaw sought compensation of $830,272.69 plus $319,216.52 for other claims made "further and alternatively".
The claims made by Mr. Shaw under the Legal Profession Act are claims "that a person has suffered pecuniary loss as a result of an act or omission by a law practice ... in the provision of legal services to the person": s.4.2.2(2)(b) [my emphasis in italics]. The Tribunal may award compensation for pecuniary loss: s.4.3.17(1)(a).
Mr. Shaw submitted that he is entitled to compensation for all pecuniary losses incurred by him as a result any act or omission on the part of Rigby Cooke. Put another way, Mr. Shaw contended that it is not necessary for him to establish negligence, breach of contract, breach of a fiduciary duty or breach of a statutory obligation before becoming entitled to compensation. In paragraph 136 of a written submission, Mr. Shaw said "It is not necessary to prove negligence; the acts might only be honest mistakes or questionable judgments that fall short of the tests for negligence".
In relation to this issue, I will say something about the history of the dispute resolution provisions now contained in Parts 4.2 and 4.3 of Chapter 4 of the Legal Profession Act, being the provisions relied upon by Mr. Shaw.
The claim as it appears in the particulars is "Rigby Cooke were negligent in that they failed to adequately investigate whether transferring the case to VCAT would affect any immunity afforded by the retrospective legislation".
The reference to retrospective legislation is a reference to the Domestic Building Contracts (Amendment) Act 2004 ("the amending Act").
In substance, Mr. Shaw submitted that he was given incorrect advice as to the effect of the amending Act upon his case.
This is part of Mr. Shaw's recurring theme that his building dispute should have been transferred to VCAT. Again, the pecuniary loss claimed is the higher legal costs incurred by him in the Supreme Court, the legal costs that he was ordered to pay to the developer in the Supreme Court, and the loss of use of money over and above the costs that he believed he would incur at VCAT.
Mr. Shaw had contended in the Supreme Court proceedings that he was not obliged to pay the balance of purchase money because construction of the unit had not been completed in accordance with the contract. He relied upon s.42 of the Domestic Building Contracts Act1995 ("the Act") which provided that "A builder must not demand final payment under a major domestic building contract until ... the work carried out under the contract has been completed in accordance with the plans and specifications set out in the contract".
By way of response, the developer contended that the contract was not a domestic building contract, that s.42 had no application, that Mr. Shaw was obliged to comply with the notice of intention to rescind by paying the balance of purchase money, and that his failure to pay led to rescission of the contract.
The issue whether a contract to purchase a unit "off the plan" was a domestic building contract had given rise to a significant amount of litigation, some of which is referred to in Shaw v Gadens Lawyers @ [46] to [50]. The Domestic Building Contracts (Amendment) Act 2004 was enacted in order to resolve the issue: see sections 1 and 3 of that Act.
In substance, the amending Act provided that a contract to purchase a unit from a developer "off the plan" was not a domestic building contract if the developer entered into a separate contract with a builder which was a major domestic building contract: s.3(4). Mr. Shaw had purchased a unit from a developer who, in turn, had entered into a major domestic building contract with a builder. If the amending Act applied to Mr. Shaw's contract, he would not have been entitled to rely upon s.42. Furthermore, he would not have been able to have his dispute with the developer resolved at VCAT in accordance with s.53 of the Act, which confers jurisdiction upon VCAT to hear and determine domestic building disputes.
The claim as it appears in the particulars is "Rigby Cooke were negligent in that they prepared and submitted an inappropriate agreed list of facts and failed to fully prosecute my claim against my instructions".
During the course of this hearing, Mr. Shaw gave evidence that he was not consulted about the agreed list of facts. He said that he no longer maintained that the alleged failure to fully prosecute his claim was against his instructions.
In the Supreme Court proceedings, as I have mentioned, Mr. Shaw sought a declaration that the contract had not been rescinded because s.42 of the Domestic Building Contracts Act entitled him to withhold the balance of purchase money until the unit was completed in accordance with the contract.
At the commencement of the trial, Bell J suggested that the applicability of s.42 be determined as a preliminary point. His reasoning was that, if the contract had been rescinded, it would not be necessary to determine whether the unit had been completed in accordance with the contract. Mr. Harrison of counsel, who appeared for Mr. Shaw, and counsel for the developer agreed to follow the course suggested by Bell J.
His Honour found that the contract was not a major domestic building contract within the meaning of the Domestic Building Contracts Act, with the result that s.42 did not apply and the contract had been rescinded. The caveat lodged by Mr. Shaw was set aside, his proceedings were dismissed, and he was ordered to pay the developer's costs.
In the present proceedings, Mr. Shaw made several allegations about Rigby Cooke's involvement in the determination of the preliminary point on an agreed list of facts.
First, he alleged that he was not consulted by Rigby Cooke about the agreed list of facts. He said that he would not have agreed to Fact 27, that "the Contract was validly rescinded unless s.42 of the applies to that Contract". He said that he would not have agreed to Fact 19, to the effect that a building surveyor had issued an occupancy permit which certified that the tower as a whole was suitable for occupancy. Mr. Shaw said that the alleged defects rendered the unit purchased by him not suitable for occupancy. [He also said that Rigby Cooke should have applied to have the occupancy permit set aside, although a claim of that kind was not included in his particulars of claim in the present proceedings.]
The claim as it appears in the particulars is "Rigby Cooke were negligent in that they failed to advise me [Mr. Shaw] of Calderbank offers, the consequences of refusal of Calderbank offers and the possible defences to claims for indemnity costs. Negligent in the preparation of the appeal which did not include appealing the indemnity costs orders awarded in favour of the defendants [the developer]".
The claim arises from the fact that on 8 March 2006 Bell J ordered Mr. Shaw to pay the developer's costs of the Supreme Court proceedings on a party/party basis up to 19 March 2004 and on an indemnity basis after that date.
In substance, the offer made by the developer on 19 March 2004 was that the developer would return the deposit to Mr. Shaw if Mr. Shaw withdrew his caveat and allowed the developer to retain the unit: see page 349 of the transcript of the hearing before Bell J on 8 March 2006 [Exhibit R3]. Mr. Shaw rejected the offer, and the developer obtained a better outcome at trial. That was the main reason why costs were awarded on an indemnity basis.
The offer of 19 March 2004 was made to Gadens, which then acted for Mr. Shaw. However, Mr. Shaw alleged that Rigby Cooke failed to make a submission to Bell J that the offer was vague and incomplete, and therefore not reasonably capable of acceptance. Mr. Wyatt of Rigby Cooke gave evidence that he appeared before Bell J on the hearing of the costs application on 8 March 2006, and made a submission to that effect. His evidence was verified by the transcript, which caused Mr. Shaw to withdraw his allegation that Rigby Cooke failed to make such a submission.
Mr. Shaw alleged that another offer of settlement, and possibly more than one, subsequently was made on behalf of the developer to Rigby Cooke. He gave evidence that Rigby Cooke did not inform him of any offer of settlement. He added that he would not have accepted any offer. In the light of that evidence, I find that Mr. Shaw has not suffered any loss for which he should be compensated, even if Rigby Cooke failed to inform him of an offer of settlement made before trial, or failed to inform him of the possible consequences of rejection of an offer of settlement.
Mr. Shaw appealed to the Court of Appeal against the orders made by Bell J at trial. Mr. Shaw alleged that Rigby Cooke did not inform him that he could appeal against the indemnity costs order made by Bell J shortly after the trial. Mr. Shaw said that he would have appealed against the indemnity costs order had he known of his right to appeal.
Mr. Shaw did not maintain that Bell J took irrelevant factors into account. He simply maintained that Bell J, in the exercise of his discretion, should not have awarded costs on an indemnity basis. The Court of Appeal is extremely unlikely to grant leave to appeal a decision about costs made in the exercise of discretion by the judge who conducted the trial, unless the judge has taken irrelevant factors into account: If Mr. Shaw lost an opportunity to appeal the indemnity costs order, because he was not informed by Rigby Cooke that he could appeal, I find that the lost opportunity was so slight, and its value so small, that it should be disregarded as being speculative: see ; @ 643.
The claim as it appear in the particulars is "Rigby Cooke were negligent in preparing witness statements, failed to brief witnesses and failed to comply with RSC 44".
Order 44 of the Supreme Court (General Civil Procedure) Rules relates to expert evidence, and in particular reports prepared by expert witnesses.
Despite the claim referring in the plural to "statements" and "witnesses", Mr. Shaw said when he gave evidence that the claim related solely to a witness statement prepared by Rigby Cooke for Mr. Paul Raptopoulos, a building surveyor.
Mr. Raptopoulos sent a report dated 13 October 2003 to Gadens, then acting for Mr. Shaw. The report concerned the alleged defects in the construction of the unit. It took the form of a letter, sent by facsimile.
On 10 August 2005, after Rigby Cooke commenced to act for Mr. Shaw, an order was made by Master Kings that required Mr. Shaw to file and serve statements of his witnesses by 14 October 2005.
Rigby Cooke prepared a Statement of Expert Evidence relating to the evidence of Mr. Raptopoulos. The statement is dated both 14 October 2004 [presumably 2005 was intended] and 19 October 2005. The statement comprised a coversheet which referred to attachments, the attachments being a resume of Mr. Raptopoulos' qualifications and experience and a copy of the report provided by Mr. Raptopoulos to Gadens on 13 October 2003. The statement did not comply with Order 44 of the Supreme Court Rules, because it did not include a statement by Mr. Raptopoulos that he had read the expert witness code of conduct and that he agreed to abide by the code.
The order made by Master Kings on 10 August 2005 also re-fixed the trial for 8 February 2006, with an estimated duration of 4 to 5 days. On about 4 January 2006, Rigby Cooke engaged Mr. Harrison to appear for Mr. Shaw at the trial.
Mr. McPhee acknowledged during cross-examination that he did not provide Mr. Raptopoulos with copies of expert reports served by the developer, concerning the alleged defects, until 25 January 2006.
On 27 January 2006 Mr. Harrison and Mr. McPhee conferred with Mr. Shaw and Mr. Raptopoulos. The evidence of both Mr. Harrison and Mr. McPhee was that Mr. Raptopoulos recanted, and was not prepared to give evidence in accordance with his report of 13 October 2003. This led to a decision being made by Mr. Shaw, Mr. Harrison and Mr. McPhee, either on 27 January 2006 or shortly afterwards, to endeavour to find an expert witness prepared to give favourable evidence about the alleged defects.
Mr. Shaw found Mr. Garry Cross, a building surveyor who was prepared to give favourable evidence about the alleged defects. Mr. McPhee found Mr. Mark Dohrmann, a consulting engineer, who also was prepared to give evidence favourable to Mr. Shaw.
The claim as it appears in the particulars is that Rigby Cooke acted "Negligently in incorrectly advising me that I would have to wait for the matter to be finalized before making a costs claim for party/party costs awarded in my favour".
In 2004, the developer lodged an application for summary judgment in the Supreme Court proceedings seeking an order that the caveat lodged by Mr. Shaw be removed prior to trial. Hollingworth J decided on 5 April 2005 that the issue about removal of the caveat should be determined at trial, not summarily. Her Honour ordered the developer to pay Mr. Shaw's costs of the application for summary judgment: Shaw v Yarranova Pty Ltd[2005] VSC 94.
The claim is that Rigby Cooke did not tax the costs of the application for summary judgment, with the result that Mr. Shaw suffered pecuniary loss. Mr. Shaw sought an order that Rigby Cooke tax the costs, free of charge. He also sought an order that Rigby Cooke pay compensation equal to the interest that he could have earned upon the money if the costs had been taxed promptly.
Mr. Shaw engaged Rigby Cooke on 14 April 2005, nine days after Hollingworth J delivered her judgment. Mr. Shaw gave evidence that he repeatedly asked Rigby Cooke to pursue recovery of the costs, but was told that an application to tax the costs could not be made until the proceedings as a whole were "finalised".
As I have mentioned, Mr. Shaw was seriously injured in a motorbike accident on 29 April 2005, hospitalised for eight or nine weeks, and unable to give proper instructions during that period. As I have also mentioned, Rigby Cooke then concentrated upon an application brought by Mr. Shaw seeking vacation of the trial date of 24 August 2005. The application led to the order of 10 August 2005, which vacated the trial date, fixed a new trial date of 8 February 2006, and gave directions concerning witness statements.
On 11 October 2005, Mr. Shaw sent an email to Rigby Cooke, asking "Please let me know the appropriate time to pursue costs on Hollingworth decision". Mr. Shaw sent a similar email to Rigby Cooke on 20 October 2005, and received a two word response from Mr. McPhee saying somewhat equivocally "Will do".
On 27 October 2005, Mr. Shaw sent a quite different email to Rigby Cooke, saying "If it is not necessary ... no need to press ... costs issues until you are ready ... but how long should we wait?" Mr. Shaw received a reply from Mr. McPhee on 4 November 2005 saying "I think we should move on the costs in December, 2005, but John [Bolton of counsel] may see a tactical benefit in keeping our powder dry until closer to the hearing". The hearing was the trial fixed for 8 February 2006.
(1906) 7 CLR 277
(2005) 223 CLR 1
(1990) 169 CLR 638
(1989) 16 NSWLR 713
(2006) 15 VR 289
I will deal with the three applications separately.
So far as the claims under the Legal Profession Act are concerned, I will commence by dealing with a submission made by Mr. Shaw on several occasions during the course of the hearing.
The 1989 Act gave clients the right to claim from solicitors "pecuniary loss that the client or former client believes he or she has suffered ... arising out of the action or inaction of the solicitor in a professional capacity": s.9 of the 1989 Act introducing s.38O of the 1958 Act [my emphasis in italics].
The 1989 Act also created a Solicitors' Board, created the position of Registrar of the Solicitors' Board, and provided that most disputes between clients and solicitors were to be heard and determined by the Registrar: s.9 of the 1989 Act introducing sections 38A, 38J and 38P of the 1958 Act.
The 1958 Act was repealed by the Legal Practice Act 1996, which came into operation on 1 January 1997.
The 1996 Act gave clients the right to claim compensation from legal practitioners on the basis that they had "suffered pecuniary loss as a result of an act or omission by a legal practitioner or firm in the provision of legal services": sections 122 and 123 [my emphasis in italics].
The 1996 Act also created the Legal Profession Tribunal, created the positions of Registrar and Deputy Registrar of the Tribunal, and provided that all disputes between clients and legal practitioners were to be heard and determined by the Registrar or Deputy Registrar: sections 393, 395, 132 and 400.
The 1996 Act was repealed by the Legal Profession Act2004, which came into operation on 12 December 2005.
As I have mentioned, persons may make compensation claims under the 2004 Act on the basis that "a person has suffered pecuniary loss as a result of an act or omission by a law practice ... in the provision of legal services to the person": s.4.2.2(2)(b). If the Legal Services Commissioner is unable to assist the parties to resolve a dispute that includes a claim of that kind, the person concerned or the law practice may apply to VCAT for the hearing and determination of the dispute: s.4.3.15.
I return to Mr. Shaw's submission that he is entitled to compensation for any pecuniary loss suffered by him as a result of an act or omission on the part of Rigby Cooke.
I acknowledge that the Legal Profession Act does not say that the act or omission must amount to negligence, breach of contract, breach of a fiduciary duty or breach of a statutory obligation before a client becomes entitled to compensation.
However, since 1989 the words "action or inaction" in the 1958 Act, and the words "act or omission" in the 1996 and 2004 Acts invariably have been interpreted (by the Solicitors' Board, the Legal Profession Tribunal and VCAT successively) as requiring the "action or inaction" or the "act or omission" to amount to negligence, breach of contract, breach of fiduciary duty or breach of a statutory obligation before a person may receive compensation.
I am obliged to point out that I was the only Registrar of the Solicitors' Board, the only Registrar of the Legal Profession Tribunal, and that since 12 December 2005 I have sat almost exclusively in the Legal Practice List at VCAT hearing disputes between clients and legal practitioners. I estimate that I have heard, since 1989, about 70% of the several thousand disputes determined under the relevant legislation. Put another way, in saying that the words concerned have invariably been interpreted as requiring proof of negligence, breach of contract, breach of fiduciary duty or breach of a statutory obligation before compensation may be awarded, I am saying that I have invariably interpreted the legislation in that way, as have other tribunal members who may have been influenced by my interpretation of the legislation.
I continue to hold the same view. It is a fundamental legal principle that persons are liable for loss caused by their negligence, breach of contract, breach of a fiduciary duty or breach of a statutory obligation. There is a presumption against the alteration of common law doctrines by the legislature, unless the clearest words are used: Pearce & Geddes Statutory Interpretation in Australia 4th edition 141-142 where the following passage from the decision of the High Court in Potter v Minahan[1908] HCA 63; (1906) 7 CLR 277 @ 304 appears:
The amending Act provides that it "does not apply to a contract for the sale of land that is the subject of proceedings commenced in a court or tribunal before 16 March 2004 but not completed before that date in which it was alleged, before that date, that the contract was, or formed part of, a domestic building contract": s.3(5) of the amending Act. The Supreme Court proceedings commenced by Mr. Shaw fit that description in every respect, with the result that the amending Act did not apply to Mr. Shaw's contract. As was said by Bell J when he heard Mr. Shaw's case, "The amendment was expressed not to apply to contracts the subject of proceedings commenced in a court before 16 March 2004. Because Mr. Shaw's proceedings were commenced before that date, the contract at issue in the present case is not covered by the amendments": Shaw v Yarranova Pty Ltd[2006] VSC 45 @ [79].
Mr. Shaw gave evidence that, accompanied by Mr. McPhee, he conferred with Mr. Harrison of counsel in January 2006. He said that he was advised by Mr. Harrison that the amending Act prevented him from making an application to VCAT. Mr. Shaw submitted that the advice given by Mr. Harrison was incorrect.
As I understood Mr. Shaw, he contended that Rigby Cooke was negligent in accepting the advice of Mr. Harrison and not further investigating the effect of the amending Act upon his proceedings. The evidence of Mr. McPhee was that he discussed the matter with Mr. Harrison, and agreed with Mr. Harrison's advice that the amending Act prevented the commencement of proceedings at VCAT.
The thrust of Mr. Shaw's submission was that the amending Act, because it did not apply to his case, did not prevent him transferring the Supreme Court proceedings to VCAT and, alternatively, did not prevent him discontinuing the Supreme Court proceedings and lodging a new application to VCAT.
I do not read s.3(5) of the amending Act in that way. The sub-section allowed him to pursue his contention in the Supreme Court proceedings that he had entered into a domestic building contract and that he was entitled to rely upon s.42 of the Domestic Building Contracts Act. The sub-section did not introduce a statutory procedure for the transfer of proceedings from the Supreme Court to VCAT.
As to Mr. Shaw's contention that the amending Act did not prevent him discontinuing (or as he put it "staying") the Supreme Court proceedings and lodging a new application to VCAT, the new application would have been subject to the amending Act. The amending Act was deemed to have come into operation on 1 May 1996: s.2. Mr. Shaw entered into his contract on 12 April 2000, so after the amendment his contract would not have been a domestic building contract for the purposes of the Act. Because it was not a domestic building contract, VCAT could not have exercised the power granted to it by s.53 to hear and determine a dispute arising out of a domestic building contract.
Bearing in mind that the allegation made by Mr. Shaw was that Rigby Cooke "failed to adequately investigate ... transferring the case to VCAT", I find that Rigby Cooke did adequately investigate the effect of the amending Act upon the transfer to VCAT proposed by Mr. Shaw. Rigby Cooke obtained advice from Mr. Harrison of counsel. To the extent that Rigby Cooke relied upon that advice, I find that it relied upon correct advice and was not negligent in doing so.
Secondly, he alleged that he was not informed by Rigby Cooke that, if he was unsuccessful on the preliminary point, he would not obtain a determination about the alleged defects. He gave evidence that, if fully informed, he would not have agreed to the applicability of s.42 being determined as a preliminary point as that might have led (as it did) to no decision being made about the alleged defects.
Thirdly, he alleged that four other claims made by him in his statement of claim did not depend upon the applicability of s.42, and should have been pursued by Rigby Cooke.
Mr. Shaw maintained that Rigby Cooke should have pursued a claim that the alleged defects constituted a defect in title, thus removing his obligation to pay the balance of purchase money. I am unable to find a claim of that kind in the statement of claim, even by inference. However, the alleged defects clearly were defects as to quality not defects in title.
Mr. Shaw maintained that Rigby Cooke should have pursued a claim that Mr. Shaw and the developer entered into a variation of the contract whereby the developer was to remedy the alleged defects (paragraphs 12 to 14 of the statement of claim). It is common ground that the developer purported to remedy the alleged defects, but that led to a dispute whether the defects had been remedied in accordance with the contract as varied.
Mr. Shaw maintained that Rigby Cooke should have pursued a claim that the developer misrepresented that it would remedy the alleged defects, leading to a contravention of s.52 of the Trade Practices Act1974, and that he relied upon the representation (paragraphs 18 to 22 of the statement of claim).
Mr. Shaw maintained that Rigby Cooke should have pursued a claim that the developer had acted unconscionably in relation to the transaction as a whole, and that he should "be relieved from any forfeiture of the Contract of Sale" (paragraphs 31 & 32 of the statement of claim). The legal basis of this claim was not set out in the statement of claim, but Mr. Shaw informed me that it was a claim of the kind made in Tanwar Enterprises Pty Ltd v Cauchi[2003] HCA 57; (2003-2004) 217 CLR 315.
It is common ground that Mr. Harrison, in response to a question asked by Bell J at the commencement of the trial, accepted that a decision that s.42 did not apply to the contract would be "fatal" to Mr. Shaw's case as a whole. It also is common ground that the trial came to an end when his Honour found that s.42 had no application.
The evidence given at this hearing by Mr. Shaw, Mr. Harrison and Mr. McPhee was to the effect that consultation with Mr. Shaw about determination of the preliminary point on an agreed list of facts was at best minimal. I find that neither Mr. Harrison nor Mr. McPhee fully informed Mr. Shaw about the likely consequences of failure upon the preliminary point, or that the other claims in the statement of claim would not be pursued if the preliminary point was lost.
The same evidence leads me to find that the decision to conduct the trial in that way was made mainly by Mr. Harrison, but with some input from Mr. McPhee on behalf of Rigby Cooke.
Rigby Cooke claimed immunity from suit in respect of the decision to proceed with the preliminary point, and the decision not to proceed with the other claims after the preliminary point was lost. The decisions were made during the course of the trial, and concerned the case to be put on behalf of Mr. Shaw during the trial. I find that Rigby Cooke was entitled in the present proceedings to claim immunity from suit in respect of those decisions, as it did: see D'Orta-Ekenaike v Victoria Legal Aid[2005] HCA 12; (2005) 223 CLR 1.
Mr. Shaw also put substantially the same claim in a different way. He said that the grounds of appeal should have included an appeal against the manner in which Bell J had exercised his discretion as to costs. The grounds of appeal were drawn by Mr. Harrison, and settled by Mr. J.D. Merralls QC. Rigby Cooke claimed immunity from suit in relation to its participation as instructing solicitor in the formulation of the grounds of appeal. I find that Rigby Cooke was entitled to claim immunity from suit, as it did: see Keefe v Marks(1989) 16 NSWLR 713 and D'Orta-Ekenaike v Victoria Legal Aid[2005] HCA 12; (2005) 223 CLR 1.
Rigby Cooke prepared witness statements for Mr. Cross and Mr. Dohrmann, both dated 6 February 2006. A copy of each statement was served upon the solicitor for the developer on 7 February 2006, the day before the trial was due to commence.
Mr. Shaw claimed that Rigby Cooke was negligent in four respects. First, he alleged that Rigby Cooke was negligent in preparing a witness statement for Mr. Raptopoulos that did not contain an acknowledgement by Mr. Raptopoulos that he had read the expert witness code of conduct and would comply with the code. The witness statement is in evidence, and it does not contain an acknowledgement of that kind. However, I am not satisfied that Mr. Shaw suffered loss as a consequence. The omission could have been rectified promptly by Rigby Cooke at its own expense, although rectification became unnecessary when a decision was made not to rely upon the report prepared by Mr. Raptopoulos.
Secondly, Mr. Shaw alleged that Rigby Cooke was negligent in not asking Mr. Raptopoulos to confirm the contents of his report several months before the commencement of the trial. It is common ground that Rigby Cooke did not ask Mr. Raptopoulos to confirm his report at that stage. However, most competent legal practitioners would not have asked an expert witness to confirm his or her report several months prior to trial, and I find that Rigby Cooke was not negligent in that respect.
Thirdly, Mr. Shaw alleged that Rigby Cooke was negligent in engaging Mr. Harrison only five weeks prior to the commencement of the trial, with the result that it did not become apparent until Mr. Harrison conferred with Mr. Raptopoulos two weeks prior to the trial that Mr. Raptopoulos was not prepared to give evidence in accordance with his report of 13 October 2003. It is common ground that Mr. Harrison was engaged on about 4 January 2006. However, solicitors are reluctant to brief counsel well in advance of a trial lest, in the event of adjournment or settlement, they are accused by their clients of incurring the fees of counsel unnecessarily. I find that Rigby Cooke was not negligent in engaging Mr. Harrison on about 4 January 2006. It left Mr. Harrison with ample time to prepare for the trial.
Fourthly, Mr. Shaw alleged that Rigby Cooke was negligent in not providing Mr. Raptopoulos, until 25 January 2006, with copies of expert reports served by the developer concerning the alleged defects.
Mr. Harrison gave evidence about the conference with Mr. Raptopoulos on 27 January 2006. He said that discussion took place about a report obtained by the developer from Mr. Philip Chun. I understood Mr. Harrison to be referring to a report dated 27 May 2002 prepared by Mr. Greg du Chateau of Philip Chun & Associates Pty Ltd. That report is in evidence, and it expresses an opinion about the windows not in accord with the opinion expressed by Mr. Raptopoulos in his report. Mr. Harrison said that Mr. Raptopoulos then "recanted". I accept the evidence of Mr. Harrison. I record that Mr. Raptopoulos did not give evidence in the present proceedings.
Mr. McPhee acknowledged in cross-examination that Rigby Cooke received the reports from the developer in November or December 2005. The reports should have been provided to Mr. Raptopoulos at that stage, to allow him to consider whether he should respond. Bearing in mind that the trial was fixed for 8 February 2006, I find that Rigby Cooke was negligent in not providing copies of the reports to Mr. Raptopoulos shortly after they were received.
So far as loss is concerned, Mr. Shaw contended that delay in providing the reports caused him to incur the expense of the conference with Mr. Harrison and Mr. McPhee on 27 January 2006. The contention requires consideration of a contingency, namely that Mr. Raptopoulos may or may not have changed his mind in November or December 2005 if he had received the reports in November or December 2005. He might have changed his mind only after he discussed his evidence with Mr. Harrison on 27 January 2006.
A memorandum of fees prepared by Mr. Harrison is in evidence. It records alongside the date 27 January 2006 "Confer with Paul Raptopoulos 1-2.15pm, confer by telephone with J Shaw and N McPhee and draft expert statement of reply of Raptopoulos to 5.30pm. 4½ hours."
A tax invoice rendered by Rigby Cooke to Mr. Shaw records that on 27 January 2006 Mr. McPhee conferred with "Counsel and expert witness" for 1½ hours. It is clear from the evidence of Mr. McPhee that he conferred with Mr. Harrison and Mr. Raptopoulos.
These records, and the evidence of Mr. Shaw, Mr. Harrison and Mr. McPhee, lead me to make three findings. The first finding is that the conference on 27 January 2006 dealt solely with the opinions of Mr. Raptopoulos, the contrary opinions expressed by experts engaged by the developer, the fact that Mr. Raptopoulos recanted from at least one of his opinions, and the course to be adopted because Mr. Raptopoulos changed his mind.
The second finding is that at the conclusion of the conference it remained a possibility that Mr. Raptopoulos would give evidence on behalf of Mr. Shaw, although his evidence might have required modification to deal with the opinions expressed by experts engaged by the developer. It is significant that Mr. Harrison spent 4½ hours on the matter, including "draft expert statement of reply of Raptopoulos". It also is significant that Mr. McPhee spent 1½ hours on the matter. This was not a conference where Mr. Raptopoulos promptly recanted an opinion, and promptly was discarded as a witness.
The third finding is that Mr. Raptopoulos almost certainly would not have promptly recanted an opinion if he had been provided with the reports of the experts engaged by the developer in November or December 2005. Put another way, the conference between Mr. Harrison, Mr. McPhee, Mr. Shaw and Mr. Raptopoulos was necessary, although it might have taken place at an earlier date if the reports had been provided in November or December 2005. I conclude that the failure to provide the reports in November or December 2005 did not cause Mr. Shaw to incur the costs of a conference that otherwise would have been avoided.
The other item of pecuniary loss claimed by Mr. Shaw was the legal costs incurred by him on 8 February 2006, including the costs that he was ordered to pay in respect of that date to the developer as part of the costs of the Supreme Court proceedings. Mr. Shaw contended that delay in conducting the conference with Mr. Raptopoulos led to delay in the engagement of Mr. Cross and Mr. Dohrmann; that delay in the engagement of Mr. Cross and Mr. Dohrmann led to their witness statements not being prepared until 6 February 2006 and not being served until 7 February 2006; and that delay in service of their witness statements led to the trial commencing on 9 February 2006 instead of 8 February 2006.
Both Mr. Shaw and Mr. Harrison gave evidence that the trial was fixed to commence on 8 February 2006, but did not commence until 9 February 2009. Mr. Shaw gave evidence that he was ordered to pay the costs thrown away in respect of 8 February 2006, although he did not tender an order to that effect. On the other hand, he did tender a bill of costs for the proceedings as a whole, prepared by the developer after the conclusion of the proceedings. The bill contains several items in respect of 7 February 2006. Four items relate to "signed consent orders". One item refers to "Letter to Counsel advising trial adjourned one day with costs thrown away ordered to be paid by the Plaintiff [Mr. Shaw]". Another item states "Paid Mr. T. Kelly of Counsel [counsel for the developer] his fee (for costs thrown away on 8 February 2006". The matter is not without doubt, but I find that the parties signed consent orders that provided for an adjournment to 9 February 2006, with Mr. Shaw to pay the costs thrown away because the trial did not commence on 8 February 2006.
The next step is to determine whether the adjournment resulted from the fact that the witness statements of Mr. Cross and Mr. Dohrmann were not served until 7 February 2006. Mr. Harrison was asked in cross-examination whether, if his conference with Mr. Raptopoulos had taken place before 27 January 2006, the trial would have commenced on 8 February 2006. He replied "Don't know". The only other relevant evidence was the bill of costs to which I have just referred, which satisfies me that the parties consented to an adjournment, with Mr. Shaw to pay the costs of the adjournment. Again, the matter is not without doubt, but I am prepared to draw the inference that late service of the witness statements of Mr. Cross and Mr. Dohrmann forced Mr. Shaw to agree to an adjournment and to pay the costs of the adjournment.
That is not the end of the matter. I accept that there was very little time between 27 January 2006 and 8 February 2006 to find another expert prepared to give favourable evidence, and to obtain a witness statement from that expert. Consequently, the next step is to determine whether payment of the costs of the adjournment would have been avoided if the conference between Mr. Harrison and Mr. Raptopoulos had taken place prior to 27 January 2006. The negligence of Rigby Cooke was its failure to provide copies of the reports to Mr. Raptopoulos promptly. If the reports had been provided promptly, Mr. Raptopoulos might or might not have contacted Rigby Cooke to express concern about his own report. If Mr. Raptopoulos had contacted Rigby Cooke promptly, the response of Rigby Cooke, if it acted competently, would have been to confer immediately with Mr. Raptopoulos, with or without the involvement of counsel.
In assessing loss in respect of events that did not occur, "the court assesses the degree of probability that an event would have occurred ... and adjusts its award of damages to reflect the degree of probability": Malec v JC Hutton Pty Ltd[1990] HCA 20; (1990) 169 CLR 638 @ 643. Doing the best that I can in the absence of evidence from Mr. Raptopoulos, and taking account of the likelihood of an expert in Mr. Raptopoulos' position contacting Rigby Cooke shortly prior to Christmas, I find that there was a 30% chance, or degree of probability, that Mr. Raptopoulos, if provided with the reports promptly, would have expressed concern about his own report to Rigby Cooke, and expressed his concern to Rigby Cooke in sufficient time to enable Rigby Cooke to confer with Mr. Raptopoulos well prior to 27 January 2006, allowing sufficient time to find another expert prepared to give favourable evidence, allowing sufficient time to obtain a witness statement from that expert, and enabling the adjournment to be avoided.
The final step is to ascertain the costs thrown away. The only relevant item in the bill of costs rendered by Rigby Cooke is a charge of $32.50 on 7 February 2006 for "Telephone attendance with Craig Harrison re adjournment". The memorandum of fees prepared by Mr. Harrison does not include a charge on 7 February 2006, but shows a charge for a full day on 8 February 2006 for "Preparation for trial". I conclude that the adjournment did not lead to an increase in the fees charged by Mr. Harrison. The relevant items in the bill of costs prepared by the developer are the four items relating to consent orders which total $101.80, the charge of $39.00 on 7 February 2006 for the letter that I have mentioned, and Mr. Kelly's fee of $3,960.00. There was no evidence that an item was reduced on taxation. I calculate the costs thrown away to be $4,133.30.
I will order Rigby Cooke to pay $1,240.00 to Mr. Shaw, being 30% of the costs thrown away as a result of the adjournment.
Mr. McPhee gave evidence that he took the view that Mr. Shaw should keep his powder dry, and use it in negotiations towards settlement.
I accept the evidence of Mr. Shaw that he regularly asked Rigby Cooke to tax the costs ordered by Hollingworth J. I do not accept his evidence that Mr. McPhee responded in unqualified terms that the costs could not be taxed until the proceedings were finalised. Mr. McPhee was aware that such was not the case, as is apparent from his email to Mr. Shaw of 4 November 2004. I find that Rigby Cooke could have taken action to tax the costs during a period of about three months, August to October 2005, but took no action. In that respect, it failed to follow its instructions.
I find that it was reasonable for Rigby Cooke to concentrate upon the trial, rather than upon a taxation of costs, from November 2005 to February 2006. Mr. Shaw's email of 27 October 2005 leads me to find that Mr. Shaw consented to that course, albeit reluctantly.
The trial commenced on 9 February 2006, and judgment was delivered on 23 February 2006: Shaw v Yarranova Pty Ltd[2006] VSC 45. On 8 March 2006, Mr. Shaw was ordered to pay the developer's costs of the Supreme Court proceedings.
Rigby Cooke lodged an appeal on behalf of Mr. Shaw. The Court of Appeal dismissed the appeal on 15 December 2006: Shaw v Yarranova Pty Ltd[2006] VSCA 291; (2006) 15 VR 289. On 22 March 2007, the Court of Appeal ordered Mr. Shaw to pay the developer's costs of the appeal: Shaw v Yarranova Pty Ltd (No. 2) [2007] VSCA 48.
Rigby Cooke ceased to act for Mr. Shaw on 15 August 2006. I find that Rigby Cooke could have taken action to tax the costs ordered by Hollingworth J during a period of about five months, from about March 2006 to August 2006, but took no action. In that respect, it failed to follow its instructions.
Despite my findings that Rigby Cooke failed to follow its instructions, for the reasons which follow I will not make any order in favour of Mr. Shaw.
During the course of the present hearing, Mr. Shaw acknowledged that the costs have not been taxed. The hearing made it apparent to me that the relationship of trust and confidence, which formerly existed between Mr. Shaw and Rigby Cooke, has broken down. In those circumstances, I am not prepared to make an order that Rigby Cooke take whatever action is required to tax the costs.
There are three reasons why I am not prepared to make an order compensating Mr. Shaw for any loss of use of the money concerned. First, Mr. Shaw has not taken action to mitigate his loss, namely by taking action to tax the costs.
Secondly, mainly because the costs have not been taxed, there is no evidence before me as to the amount of the costs involved. Mr. Shaw said that he was charged about $22,500.00 to defend the application for summary judgment. If that is correct, those costs probably were calculated in accordance with the terms of Mr. Shaw's engagement of Gadens, which acted for him in defending the application. Mr. Shaw has not prepared a bill of costs calculated on a party/party basis, being the basis upon which the developer is required to pay Mr. Shaw's costs of the application.
Thirdly, Mr. Shaw's application to vacate the trial date led to the order of 10 August 2005. That order vacated the trial date, but also required Mr. Shaw to pay the developer's costs of the application. If Rigby Cooke had completed a taxation of costs between August and October 2005, the costs recovered almost certainly would have been offset against the order made on 10 August 2005 for payment of the developer's costs. To the extent of any offset, there would have been a use by Mr. Shaw of the money recovered. Similarly, if Rigby Cooke had completed a taxation of costs between March and August 2006, the costs recovered almost certainly would have been fully offset against the orders that Mr. Shaw pay the developer's costs of the trial and the appeal. Again, that would have been a use by Mr. Shaw of the money recovered. I record that Mr. Shaw did not give evidence that he paid promptly, from his own resources, the costs orders made against him on 10 August 2005, 8 March 2006 and 22 March 2007.