Crisp v Qld Law Group - A New Direction Pty Ltd [2018] QDC 42

DISTRICT COURT OF QUEENSLAND CITATION: Crisp v Qld Law Group – A New Direction Pty Ltd [2018] QDC 42 PARTIES: ABBY CRISP (Appellant) And QLD LAW GROUP – A NEW DIRECTION PTY LTD ABN 57 064 877 425 (Respondent) FILE NO/S: 207/17 DIVISION: Civil PROCEEDING: Appeal ORIGINATING COURT: Magistrates Court at Southport DELIVERED ON: 23 March 2018 DELIVERED AT: Southport HEARING DATE: 12 March 2018 JUDGE: Kent QC DCJ ORDER: (a) Extension of time in which to appeal allowed; (b) Appeal allowed and judgment below set aside; (c) In lieu thereof, an order that the application for an assessment of costs which was filed the 12th April 2017 be returned to the Magistrates Court at Southport to be dealt with according to law; CATCHWORDS: MAGISTRATES – APPEAL AND REVIEW – QUEENSLAND – APPEAL – WHEN APPEAL LIES – where the applicant applied for an order to extend the time to appeal against a decision of a Magistrate – where the Notice of Appeal was filed 15 days after the appeal period had expired – where the respondent resists the appeal – where there is no prejudice to the respondent – whether the applicant should be given leave to appeal. STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – GENERAL APPROACHES TO INTERPRETATION – PURPOSIVE APPROACH – where the applicant sought to challenge a final bill of costs pursuant to s 335 of the Legal Profession Act 2007 – where the Act provides for a person to make a costs application within 12 months after the delivery of a bill – where the applicant -- 1 of 11 -- 2 requested an itemised bill within the 12 month period – where the 12 month period expired before the delivery of the itemised bill – where the Legal Profession Act 2007 has a consumer protection purpose – whether the proper construction of s 335 of the Legal Profession Act 2007 entitles the applicant to make a costs application in respect of the itemised bill. LAWYERS – REMUNERATION – BILLS OF COSTS – ACTIONS TO RECOVER COSTS – OTHER MATTERS – where the applicant sought to challenge a final bill of costs pursuant to s 335 of the Legal Profession Act 2007 – where the Act provides for a client to make a costs application within 12 months after the delivery of a bill – where the applicant requested an itemised bill within the 12 month period – where the 12 month period expired before the delivery of the itemised bill – whether the applicant was entitled to make a costs application in respect of the itemised bill. Uniform Civil Procedure Rules 1999, Rules 748,785 Legal Profession Act 2007, Sections 330, 332, 335 Acts Interpretation Act 1954, Section14A(1) Beil v Mansell (No. 1) [2006] 2 Qd R 199 Attorney-General (Qld) v Barnes & Anor [2014] QCA 152 Creswick v Creswick [2011] QCA 381 Tabtill Pty Ltd v Creswick [2011] QCA 66 Gallo v Dawson [1990] 93 ALR 479 Gallo v Dawson (No.2) [1992] 109 ALR 319 Williams v Griffiths [2017] QDC 079 Queensland Trustees Ltd v Fawckner (1964) Qd R 153 Mackowiak v Hagipantelis [2015] NSWSC 1087 Bermingham v Corrective Services Commission of New South Wales (1988) 15 NSWLR 292 R v Young (1999) 46 NSWLR 681 COUNSEL: C C Wilson for the Appellant M J Lazinski for the Respondent SOLICITORS: Byrne & Lovel Lawyers for the Appellant Qld Law Group for the Respondent Introduction [2] In this matter the applicant/appellant seeks an order pursuant to Uniform Civil Procedure Rules 1999, r 785 and r 748, extending time to appeal against a decision of a Magistrate made on 16 June 2017. The application is necessary because the -- 2 of 11 -- 3 applicant filed a Notice of Appeal on 3 August 2017, 15 days outside the period allowed. Various considerations impact on the exercise of this discretion. The application to extend time, and the appeal itself, are resisted by the respondent. Background [3] The applicant was a plaintiff in a personal injuries action in which she was represented by the respondent and its predecessor which was a partnership. The action was settled at mediation on 17 February 2015 at which time proceedings were pending in court. Settlement moneys were paid to the respondent’s trust account and the solicitors paid themselves therefrom, having received a signed authority to that effect from the applicant. It is agreed that the solicitors were paid $104,533.04 for their work. It is the bill for this amount which was sought to be challenged by the applicant in an application in the Magistrates Court at Southport which resulted in the judgment, the subject of this appeal. [4] The application was heard on 16 June 2017 when the Magistrate dismissed the application. This prompted the Notice of Appeal, which as outlined above, was out of time. The issues argued on the hearing of the appeal on 12 March 2018 were somewhat narrowed from those originally outlined. It was agreed that a significant factor in the question of the grant of leave in the application for extension of time to appeal was the strength of the case for which an extension was required. Accordingly, the arguments dealing with the extension of time and the merits of the appeal itself have been heard simultaneously. The respondent resists the extension of time and the appeal proper. The applicant’s arguments [5] As to the question of the extension of time, the applicant refers to Beil v Mansell (No. 1)1. Muir J. said: “The court’s discretion to extend time is unfettered, but like any discretion of this nature it must be exercised judicially. Mere lapse of time, of itself, is not generally regarded as imposing an insuperable obstacle to an extension of time, nor is the lack of satisfactory explanation for the delay, and the merits of the substantive application are a relevant consideration.” 1 [2006] 2 Qd R 199 at [40]. -- 3 of 11 -- 4 [6] Further considerations include the respective prejudice likely to be suffered by each party if an extension is granted; and the interests of a court in the administration of justice.2 It is also relevant if there has been any informal notice of the appeal given – this seems not to arise in this case – as well as overall fairness.3 Length of delay [7] In the present case, the length of delay between the time expiring for appealing the judgment and the application for an extension is 15 days. This is, in comparison with some other cases, minimal and there is, it is submitted, no particular prejudice occasioned to the respondent by that delay. By comparison, in Biel v Mansell the delay was some 3 and a half years. In Williams v Griffiths4, it was a few days short of a year. Explanation for the delay [8] The explanations are set out in the affidavit of Ms Crisp filed 11 September 2017 in paras 5 onwards and summarised in para 21. In essence, the explanations are: (a) from 16 June 2017 to 28 June 2017, she believed she had sufficient time to consider an appeal and provide her then solicitors with instructions; (b) on 28 June 2017, the applicant changed her representation from Byrne & Lovel to Coast to Coast Legal due to Mr Lovel saying he did not have time to attend to the matter; (c) from 27 June 2017 to 5 July 2017, the applicant, a single mother of a 9 month old son, was searching for new residential accommodation, i.e. she had considerable unavoidable competing claims on her time; (d) from 28 June 2017 to 14 July 2017, she believed that Mr Byrne was obtaining a transcript to advise her on an appeal but this did not occur; (e) from 14 July 2017 to 24 July 2017, the applicant was packing up and moving home; (f) from 27 July 2017 to 3 August 2017, she instructed and was awaiting Byrne & Lovel Lawyers to commence an appeal, which occurred on 3 August; 2 See Attorney-General (Qld) v Barnes & Anor [2014] QCA 152; Creswick v Creswick [2011] QCA 381; Tabtill Pty Ltd v Creswick [2011] QCA 66 at [15] per Fraser JA, citing Gallo v Dawson [1990] 93 ALR 479 per McHugh J (affirmed in Gallo v Dawson (No.2) [1992] 109 ALR 319). 3 See Hunter Valley Developments Pty Ltd v Cohen (1984) 7 ALD 315. 4 [2017] QDC 079. -- 4 of 11 -- 5 (g) at all times the applicant has been engaged in caring for her infant son and household duties. [9] The respondent submits that the reasons for delay are unsubstantial and unsatisfactory, and that this is a significant factor against the grant of leave. [10] The interest of the applicant in prosecuting the appeal is said to be established or indicated by the email to Mr Byrne of 11 July 2017 at 10.35am5 in which she sought to clarify his opinion as to her prospects of success on appeal and including the sentence “if you think we may have a chance then I’m all for you giving it a shot”. [11] In Queensland Trustees Ltd v Fawckner,6 Skerman J said: “… in my view the absence of explanation of the delay is not in itself an insuperable obstacle to extending time for appeal, though failure to explain the delay as well as the length of time which has elapsed before an application is made are circumstances to be taken into account by a judge in deciding whether in the exercise of his discretion the time for appeal should be extended.” [12] The explanations offered, whilst not beyond criticism, are in my view reasonable. The applicant’s counsel argues that Ms Crisp “fell between two stools” having assumed that one solicitor had responsibility for filing the appeal when that solicitor evidently assumed that another had it in hand. This is given more substance by the affidavit of Mr Lovel filed 11 September 2017 at paras [6] to [20]. Whilst the submission outlined above may be something of an oversimplification, in my view the explanation given, although not beyond criticism, is satisfactory. Prejudice to the respondent [13] The applicant submits that while prejudice to the respondent would be a material fact militating against the grant of an extension, there is in fact no prejudice of a general or specific kind to the respondent due to the delay in filing the Notice of Appeal. The respondent conversely submits that there is prejudice in having had its costs assessed pursuant to the order of the Magistrate; however this was somewhat premature, having been done prior to the expiration of the time for commencement of the appeal. This is not a weighty factor and could be addressed by an order for costs depending on the circumstances. 5 Exhibit 5 to the affidavit of Ms Crisp. 6 (1964) Qd R 153 at 163. -- 5 of 11 -- 6 The strength of the case for which the extension is sought – merits of the appeal [14] The merits of the appeal are relevant to both the application for extension of time and also the disposition of the appeal if the extension is granted. The first argument is a point of statutory construction, as to whether the application before the magistrate was out of time. Section 335 of the Legal Profession Act 2007 (“LPA”) provides that a client may apply for an assessment of the whole or any part of legal costs and, importantly, in ss (5): “A costs application by a client… 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…” [15] This time limit was fatal for the applicant before the learned Magistrate. It was concluded that a bill to the applicant from the respondent dated 28 April 2015 was a relevant bill for the purposes of s 335(5)(a) of the Act and thus, the application having been made more than 12 months thereafter, the application for the costs assessment was out of time.7 A further alternative submission was advanced that, in consequence of that ruling, there should nevertheless be a consideration of the costs application made out of time pursuant to s 335(6) of the Act, considering the reasons for the delay. This application was also unsuccessful. [16] The relevant chronology is:  28 April 2015 – respondent gave the applicant a tax invoice which is properly understood as a lump sum bill.8 The applicant thereupon signed a Trust Authority authorising the respondent to distribute the settlement moneys and pay itself its fees and charges;  29 April 2015 – respondent part paid itself;  1 May 2015 – respondent paid itself a further amount;  8 May 2015 – respondent paid itself the balance of its fees and charges;  March 2016 – applicant engaged Byrne & Lovel to request an itemised bill; 7 Magistrate’s Decision, p 3. 8 See s 330(1) of the Legal Profession Act 2007. -- 6 of 11 -- 7  21 March 2016 – applicant requested an itemised bill as was her right under the legislation;9  28 April 2016 – the time limit under the LPA, s 335(5) for a costs application in respect of the tax invoice of 28 April 2015 expired;  19 May 2016 – respondent gave the applicant an itemised bill of costs totalling $119,014.05 (including disbursements) which it advised later that day was overstated by $4,400. This was outside the 28 days required by s 332(2);  12 April 2017 – applicant filed the application for costs assessment of an itemised bill of costs to be prepared or alternatively, assessment of the itemised bill delivered 19 May 2016;  19 May 2017 – time limit under LPA s 335(5) for a costs application in respect of the itemised bill expired;  16 June 2017 – applicant’s application dismissed by the Magistrate. Was the applicant out of time? [17] The applicant submits that in truth she was not out of time as at the date of the hearing before the Magistrate and in this way the Magistrate fell into error. On a proper construction of s 332(1), either a lump sum bill or an itemised bill, and both, are within the meaning of the term “bill” as used in the Act, which is not otherwise more precisely defined. Under s 335 a client is entitled to make a costs application within 12 months after the bill was given. This is not confined, so the argument is presented, to the first lump sum bill in April 2015. It is acknowledged by the applicant that delivery of that bill enlivened a jurisdiction for the client to pursue a costs application in respect thereof. However, it is also said that the itemised bill, received on 19 May 2016, was equally a bill for the purposes of the legislation. Thus, despite the 12 month time limit in s 335(5) running in respect of the first lump sum bill, a similar time limit nevertheless began running from 19 May 2016 in respect of the properly requested 9 The applicant was entitled to do so under s 332(1), being at that stage entitled to apply for an assessment of the costs to which the first lump sum bill related, having requested the itemised bill within the 12 months described in s 335(5). -- 7 of 11 -- 8 itemised bill. If this proposition is correct, the applicant’s application of 12 April 2017 was within time. [18] It is submitted by the applicant that there is nothing in the legislation to contradict this construction; that is, that the running of the time period under s 335(5) for the first lump sum bill does not prevent the period re-starting when the later itemised bill is delivered. Moreover, it is said that the phrasing “the bill’ in the subsection supports the applicant, referring to the itemised bill now under challenge. [19] This argument was agitated before the Magistrate.10 Although the arguments before the Magistrate included others of a different character (indeed, her Honour had to sift and resolve a number of questions in a short timeframe), namely, that for various reasons the first bill should be disregarded, the above construction was pressed below and is repeated on this application, namely that whatever the status of the first lump sum bill, nevertheless the second itemised bill was equally effective in commencing the time limit pursuant to s 335(5) running. [20] The Magistrate concluded at p 3 of her Decision that the applicant was out of time. Having canvassed some of the history summarised above, her Honour continued: “I am of the opinion that the material to which I have referred sets out in sufficient detail the legal services to which the bill relates and the total amount of the legal costs involved. In the circumstances, I am of the opinion that the bill dated 28 April 2015 is a relevant bill for the purposes of s 335, ss (5)(a) of the Act and that the application by the applicant is out of time in that respect”. [21] It is this conclusion which is attacked by the applicant in the present application. Central to the argument is the idea that, although her Honour was no doubt correct in concluding that the lump sum bill was a “bill” and that time had expired in relation to it, this did not invalidate the later itemised bill as having the same status, and in respect of which the applicant was within time. Her Honour did not seem to deal with that issue. Discussion [22] There are features indicating that the co-existence of two valid “bills” with differing dates is possible under the scheme of the legislation. Firstly, the lump sum bill, as the description suggests, does not descend to detail of the legal costs involved. This 10 See, for example, T1-9, l 40; T1-11, l7-16; T1-14, l35-43. -- 8 of 11 -- 9 is the separate function performed by the itemised bill. It is possible to envisage, as indeed seems to have occurred on this occasion, that a client might initially not challenge a lump sum bill (particularly in the heady aftermath of a successful mediation), but on reflection decide to seek, and thereupon challenge some portion of, an itemised bill. A lump sum bill is by its nature opaque and difficult for a lay person to analyse as to whether it is fair and reasonable.11 The re-commencement of the time limit from the time of the itemised bill may thus be a fair and reasonable operation of the legislation. [23] If each separate (i.e. separate in nature; lump sum v itemised, as well as separate in time) bill is given the benefit of the 12 month time limit in s 335(5)(a), this can, as occurred in the present case, aggregate to a time limit of up to 2 years within which the solicitor’s bill may be challenged; perhaps an unattractive period of uncertainty. It must be borne in mind, however, that the main purposes of the Act (s 3) include to provide for the “regulation of legal practice… in the interests of the administration of justice and for the protection of consumers of the services of the legal profession and the public generally”. It is this consumer protection purpose to which the applicant points as informing the construction of the interplay of the sections of the legislation; the legislation is in that sense beneficial. It is also relevant that during the period described, the respondent has not been kept out of its money – it was paid promptly. [24] Secondly, the applicant’s construction may simply more appealing as legally correct. The words of s 335 provide that a client may apply for an assessment of the whole or any part of the costs, even if paid, within 12 months after the bill was given (emphasis added). This suggests that the assessment relates to a particular bill; here, the second, itemised bill, which as outlined above was given when the applicant was empowered by s 332 to request it. The construction pressed by the respondent, in my view, properly understood contends for words to be read into the legislation, i.e. as if subsection 5(a) read “the first bill in time was given… to the client”. Given the expressed purposes of the Act as outlined above, such an interpretation, with a consequent reduction of consumer protection, may not be the best purposive interpretation as required by s14A(1) of the Acts Interpretation Act 1954. “Reading in” words as an exercise in statutory construction is an exercise confined by carefully 11 Mackowiak v Hagipantelis [2015] NSWSC 1087 per Garling J at [140]. -- 9 of 11 -- 10 delineated principle, particularly where the exercise would, as here, tend to more strictly impose the operation of a time limit; see Bermingham v Corrective Services Commission of New South Wales12 and the three conditions outlined by McHugh JA at 302; and R v Young13 at [11] – [16] and further at [80] – [89] per Spigelman CJ, in particular the reluctance to “read up” the language. [25] Thirdly, the alternative construction is not attractive. If there is only one 12 month time limit – from the time of the first lump sum bill – then the position imposed on the applicant is: - that after some time, but within the time permitted, she made a proper request for an itemised bill; - the response was late, outside the permitted 28 day time period; - with the result that the first 12 month period (upon which the respondent now relies) expired while the obligation lay with the respondent, not the applicant, i.e. the respondent’s delay has contributed to the loss of the applicant’s right to a review. This is unfair, unreasonable and contrary to common sense. Nor does it have the support of an express provision in the legislation or any particular principle of statutory interpretation. Pressed as to this construction, the respondent’s counsel argued that the LPA refers, at least in s 335(1), to costs, not a bill of costs, thus one time limit runs in relation to the global issue of costs, which was expired. This is a doubtful construction – the LPA repeatedly refers to a bill of costs, particularly in s 335 (5). In my view both the lump sum and separate, itemised bill, meet this description. Alternatively – dealing with the application out of time after considering reasons for delay – s 335(6) [26] The alternative ground pressed by the applicant is that the learned Magistrate erred in refusing the applicant leave to deal with the costs application made out of time pursuant to s 335(6) of the Act. This jurisdiction, in its terms, is informed or confined 12 (1988) 15 NSWLR 292. 13 (1999) 46 NSWLR 681. -- 10 of 11 -- 11 by a decision “to deal with it after considering the reasons for delay”. The applicant argues that although the reason for delay may have primacy, it is not the only factor to be considered in the exercise of that jurisdiction. The respondent argues to the contrary. [27] It is common ground that no, or minimal, reason for the delay was advanced by the applicant at the hearing before the Magistrate. This is apparently due to the decision to focus the application on the first proposition, namely, that the applicant was not out of time; however the lack of such evidence before the Magistrate is a major obstacle for the applicant. Conclusion [28] For the reasons outlined in paragraphs [17] to [25] above, the applicant’s arguments on the first ground must be accepted. The application before the magistrate was not out of time, because the time period in s 335(5) of the LPA ran from the delivery of the itemised bill for 12 months. It is not necessary to deal with the alternative argument as to s 335(6). As a consequence, the matter should be returned to the Magistrates court for hearing of the application. This seems to be within the scope of jurisdiction conferred by s 47 of the Magistrates Courts Act 1921 and UCPR 743G (that issue has not been argued before me). [29] The orders will be: (a) Extension of time in which to appeal allowed; (b) Appeal allowed and judgment below set aside; (c) In lieu thereof, an order that the application for an assessment of costs which was filed the 12th April 2017 be returned to the Magistrates Court at Southport to be dealt with according to law; (d) Subject to any further submissions, the respondent to pay the applicant’s costs of the hearing in the Magistrate’s Court on the 16th of June and the costs of this appeal. -- 11 of 11 --