Vella v Bechara

Background 2 In July 1996 the plaintiff instructed Bechara & Company to act on her behalf in relation to injuries sustained during her employment up to and including May 1996. On 5 August 1996 the defendant prepared a conditional costs agreement (see Annexure 'A' to the affidavit of Maria Bechara sworn 30 January 2004). Ms Vella did not sign the agreement but the defendant acted in accordance with the agreement. At paragraph one the agreement defined the work as: "The Work 1. The Work you require us to do is as follows: To act for you in your workers compensation/common law claim arising out injuries sustained during the course of your employment with GMS Fulfilment Services. The work we will conduct on your behalf includes (but is not limited to) corresponding with the insurer and your employer, briefing Counsel, obtaining medical reports, commencing proceedings if instructed by you and to all matters incidental thereto." 3 Ms Vella was obliged to pay the solicitor's costs if there was a successful outcome. Under this agreement she is not obliged to pay the solicitor's costs if her workers compensation/common law proceedings do not have a successful outcome. She was also required to pay expenses incurred on her behalf. The plaintiff has already paid approximately $7,500.00 in disbursements. There remain some outstanding disbursements, namely Ergonomics Australia Pty Ltd in the sum of $1,755.00, District Court filing fees postponed for a notice of motion of $388.00, District Court filing fees for notice of motion of $51.00 and T & T Interpreting Services of $283.50, totalling $2,477.50. 4 Paragraph 11 of the agreement provides for termination and states: "Termination 11. We will not continue to do the Work if you fail to pay our bills, if you fail to provide us with adequate instructions, or if you indicate to us that we have lost your confidence. We will give you at least fourteen (14) days' notice of our intention to terminate our Agreement, and of the grounds on which the notice is based. You will be required to pay our charges for work done, and for expenses incurred, up to the date of termination. You may terminate this agreement in writing at any time. If you do so you will pay our charges and expenses incurred up to the time of termination." 5 On 10 June 1999 proceedings were commenced in the District Court. On 14 March 2000 a notice of motion seeking to extend the limitation period under the Workers Compensation Act 1987 (NSW) was filed. On 5 May 2000 this motion was heard by his Honour Acting Judge Bowden who refused to extend the limitation period. The defendant then sought to have the proceedings struck out. On 28 July 2000 his Honour Acting Judge Sinclair QC struck out the proceedings. 6 On 12 February 2001 a further notice of motion was filed seeking to extend time pursuant to s 151D(2) of the Workers Compensation Act. On 28 and 29 June 2001 this motion was heard by his Honour Acting Judge Downs. On 12 October 2001 his Honour Acting Judge Downs delivered judgment and dismissed the application for leave to commence proceedings out of time and ordered that the applicant pay the respondent's costs of both motions. A holding summons seeking to appeal this decision was filed in the Court of Appeal. This holding appeal has been discontinued. 7 The plaintiff terminated the retainer. On 18 December 2001 the plaintiff instructed Turner Freeman to act on her behalf as she was not happy with the way her claim had been handled by the defendant. On 9 January 2002 Turner Freeman wrote to the defendant requesting that the file held by them relating to the plaintiff be transferred to Turner Freeman. To date the defendant has not transferred the file. 8 The plaintiff's current solicitor seeks the file in order to advise the plaintiff in relation to any rights that she may have in relation to her work injury and in relation to the bills of costs served on her by GMS Fulfilment Services Ltd (the plaintiff's employer and the defendant in the District Court proceedings). Both parties are aware of the possibility of a professional negligence claim against the defendant for failing to file the statement of claim within the limitation period. 9 The plaintiff is prepared to offer a limited undertaking, namely to pay the defendant's reasonable costs and disbursements as agreed or assessed upon successful resolution of the plaintiff's workers compensation claim and a further undertaking to protect the defendant's costs of the workers compensation files in the event the file is transferred to subsequent solicitors. The plaintiff is not prepared to give any undertaking in relation to the common law proceedings. 10 The defendant is prepared to release the file upon payment of the outstanding disbursements and upon receipt of an irrevocable authority from the plaintiff to her solicitor's firm to attend to payment of the defendant's costs as agreed or assessed from verdict or settlement monies received by the plaintiff's solicitor, such payment to be the first payment made from the verdict or settlement monies. Alternatively, if Ms Vella does not agree to pay the defendant's costs as claimed in the solicitor/client bill of costs, then the defendant requires Ms Vella's irrevocable authority to her solicitor to retain in their trust account from the verdict or settlement monies received up to an amount of $83,152.86 pending assessment or agreement as to costs. The irrevocable authority is to include an undertaking from the plaintiff to attend to payment of all third party accounts and her acknowledgement that she was personally liable for payment of such accounts. 11 Section 209C of the Legal Profession Act provides: "290C Supreme Court may order delivery up of documents etc (1) On the application of a barrister's or solicitor's client, the Supreme Court may order the barrister or solicitor: (a) to give to the client a bill of costs in respect of any legal services provided by the barrister or solicitor, and (b) to give to the client, on such conditions as the Supreme Court may determine, such of the client's documents as are held by the barrister or solicitor in relation to those services. (2) Subsection (1) does not affect the provisions of Division 6 of Part 11 with respect to the assessment of costs. (3) This section does not apply to the client of a barrister or solicitor retained on the client's behalf by another barrister or solicitor. (4) In this section, a reference to a barrister or solicitor includes a reference to a former barrister or solicitor. (5) In this section, legal services has the same meaning as in Part 11. (6) In this section, a reference to a solicitor includes a reference to an incorporated legal practice in connection with legal services provided by the practice." 12 This Court is not in a position to determine whether there has been any negligence by the plaintiff's former solicitor in failing to lodge the statement of claim within the limitation period. It is most unlikely that there will be any further legal action taken by Ms Vella in order to continue to pursue her common law claim against her employer. There have been two unsuccessful applications in the District Court that she be granted an extension of time to file her statement of claim pursuant to s151D of the Workers Compensation Act. An application for leave to appeal against the second application has been discontinued. She is facing a large bill for payment of the employer's costs in those District Court proceedings. In the unlikely event Ms Vella does succeed in her common law action against her employer, the defendant is still entitled to have her bill of costs assessed. 13 An order pursuant to s 209C(1)(b) of the Legal Profession Act is discretionary. Having considered the factors set out above, it is my view that Ms Vella should be required to pay the outstanding disbursements prior to release of the file and the plaintiff should provide the undertakings referred to earlier in this judgment, being those in relation to the workers compensation proceedings only. 14 Costs are discretionary. Costs normally follow the event. The plaintiff is to pay the defendant's costs as agreed or assessed. 15 The Court orders: