Baldwin Lawyers & Anor v Simala [2014] QDC 21

DISTRICT COURT OF QUEENSLAND CITATION: Robert James Baldwin Trading as Baldwin Lawyers & Anor v Simala [2014] QDC 21 PARTIES: ROBERT JAMES BALDWIN TRADING AS BALDWIN LAWYERS and ROBERT JAMES BALDWIN AND SELINA CARTRIGHT TRADING AS BALDWIN CARTRIGHT LAWYERS (plaintiffs/applicants) v SHARON ANN SIMALA (defendant/respondent) FILE NO/S: 10/09 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: District Court at Gympie DELIVERED ON: 18 February 2014 DELIVERED AT: Reasons published 18 February 2014 at Maroochydore HEARING DATE: 31 January 2014 (at Maroochydore) JUDGE: Long SC, DCJ ORDER: Application dismissed with an order for costs assessment and further directions. CATCHWORDS: PRACTICE AND PROCEDURE – MEDIATION –where plaintiffs apply for referral of claim to mediation – where application is opposed by the defendant – discretion to order – relevant considerations PRACTICE AND PROCEDURE– COSTS – where plaintiffs claim recovery of legal costs under the Legal Profession Act (Qld) 2007 – power of the court under UCPR 743B to make an order for costs assessment in the absence of any application by the parties and as the more appropriate process Uniform Civil Procedure Rules (Qld) 1999, 320, 743G(2)(c) -- 1 of 7 -- 2 Legal Profession Act (Qld) 2007 Part 3.4, s 332 District Court Act (Qld) 1967, s145 Magistrates Court Act (Qld) 1921, s 60 COUNSEL: A. Wallace for the first and second plaintiffs/applicants J. Mould for the defendant/respondent SOLICITORS: Baldwin Lawyers for the first and second plaintiffs/applicants Chris Reeve & Co Solicitors for the defendant/respondent [1] In this matter the plaintiffs claim the recovery of legal costs incurred in the representation of the defendant (over a period of time and involving a change in the constitution of the engaged legal practice) in respect of a family law matter and also a de facto property settlement issue. [2] This application by the plaintiffs seeks a referral of that claim to mediation, which may be ordered by this court pursuant to UCPR 320 or s 43 of the Civil Proceedings Act (Qld) 2011. Such an order is made as an exercise of discretion. [3] The application is opposed by the respondent and the curious position that has emerged is that the plaintiffs’ application comes subsequently to and notwithstanding that claims made in respect of accounts provided to the respondent in respect of the family law matter in 2004 and also in February 2009 in respect of the de facto property settlement issue and the filing of the applicant’s claim and statement of claim on 6 May 2009 and the progression of those proceedings to the point that on 8 February 2013, the applicant provided a notice of certificate of readiness for trial. There has been no response by the defendant to that. However the defendant’s response to the letter sent by the plaintiffs on 5 March 2013 to suggest alternative dispute measures, such as mediation, was met by the response that indicated only that the defendant would continue to defend the claim and will seek costs on the indemnity basis. [4] Curiously it can be seen that this application is made notwithstanding the expressed desire of the applicants to take this matter to trial in February 2013 and that in resisting it and taking a position that the matter should be promptly brought to trial -- 2 of 7 -- 3 in this court, it is the defendant who failed to act to take advantage of the offer to do so, made by the applicant in February 2013. It can also be observed that despite the defendant’s position on this application and perhaps consistently with the lack of action to bring the matter to trial, on the hearing of the application some unspecific suggestions were made as to the possibility of an application to the Supreme Court pursuant to s 328 of the Legal Profession Act (Qld) 2007 (“LPA”). However no such application has been made. [5] On the hearing of the application reference was made to a number of instances of this and other courts dealing with similar applications for referral to mediation.1 An essential feature of each of those cases is that they necessarily relate to their own particular circumstances and in essence represent exercises of discretion having regard to those circumstances. For the reasons which follow, it is unnecessary, in this instance, to attempt any more detailed examination of any of those cases, except to note that as a matter of the principle or approach to such applications, it is necessary to note that the potential advantages of the processes of alternative dispute resolution are specifically recognised under the UCPR and the general principles which underpin those rules and also in the objects to Part 6 of the Civil Proceedings Act (Qld) 2011.2 Further and in assessing relevant considerations for the exercise of discretion, it is not necessary to assume that alternative dispute resolution should not be considered or ordered in the face of the opposition of a party to such a referral and that ultimately it may be a matter of assessment as to whether there are sufficient prospects of settlement or some other advantage being obtained by such a referral. Usually, the timing of the application and the nature of the issues in dispute, will be appropriate considerations. [6] Whilst the plaintiffs correctly point out that the parties have not had the benefit of the involvement of a third party such as a mediator, in any attempt to resolve this dispute and that there is nothing provided by the defendant by way of evidence, as 1 Simic v LTH Investments (Qld) Pty Ltd [2013] QDC 240, Higgins v Higgins [2002] NSWSC 455, Wade v Gargett & Anor [2010] QDC 27, Stevenson v Landon Pty Ltd & Anor [2005] QDC 011, Skalski & Anor v Brown & Anor [2008] QDC 263, McLure v Australian Independent Wholesalers Pty Ltd [2006] QDC 281, Idoport Pty Ltd & Anor v National Australia Bank Limited & Ors [2001] NSWSC 427, Barrett v Queensland Newspapers Pty Ltd & Brennan & Ruddiman [1999] QDC 150, Morrow v chinadotcom [2001] NSWSC 209, Remuneration Planning Corp Pty Ltd v Fitton; Fitton v Costello [2001] NSWSC 1208, Trelour v J H McDonald Pty Ltd [2001] QDC 053 2 See UCPR 5 and s 37 of the Civil Proceedings Act (Qld) 2011 -- 3 of 7 -- 4 to any particular reasons for her opposition to the application, the fact remains that she remains opposed and a further difficulty with the application is that this matter is apparently well advanced towards trial and as the plaintiffs’ affidavit in support of this application asserts there has been a considerable time that has gone past without any ability to resolve this matter between the parties and “it may well be necessary that it proceeds to trial”. The expressed basis for the application is “in the interests of insuring efficiency of the court system and minimising costs”. However that essentially raises the question as to whether or not the costs and effort that may be put towards a process of mediation, might not, in the circumstances, be equally directed towards a determination of some essential issues that are involved in this matter, at an early time. [7] There is also a difficulty in the apparent readiness of this matter to proceed to a trial, in the deficiencies of the pleadings. The statement of claim filed in support of the plaintiffs’ claim does not plead material facts as to the terms of any costs agreement or the breach of such a contract. In essence, it merely asserts a failure to meet demands for the payment of or provision of security for amounts of legal costs incurred and ultimately a failure to meet demand for payment of $90,601.80, in that regard. [8] On the other hand, in the defence and in addition to taking issue with the amount claimed, allegedly due to excessiveness and on the basis of charging for re- familiarisation by different lawyers, a number of additional points are taken: (a) It is asserted that there is an absence of a “costs statement”. That may mean that there is no itemised bill, but, there appears to be no suggestion of any request pursuant to s 332 of the Legal Profession Act 2007 (“LPA”)3; (b) There appears to be an assertion that the costs agreement allowed for the deferral of the obligation to pay the costs, until and subject to the proceeds of the sale of the property which was the subject of the de facto property settlement issue, were realised and there is a contention that due to a lack of diligence of the plaintiffs in arranging 3 It should otherwise be noted that the application of UCPR 705 in requiring a costs statement does not apply to costs payable or to be assessed under the LPA: See UCPR 678(2)(b). -- 4 of 7 -- 5 the sale of that property, they were responsible for the position that there was insufficient funds for them to receive their costs; (c) Otherwise, it is also asserted that no costs are payable, on the basis that the agreement was to act on a “speculative basis” and that agreement was terminated by the plaintiffs’ breach of the agreement, in circumstances which did not allow for recovery of any costs for any work earlier performed4; and (d) There is also a contention that there is no entitlement to charge interest.5 [9] The position on the pleadings is further complicated by the absence of any reply to the matters specifically raised by the defence. [10] As has been noted above and despite these obvious shortcomings in the pleadings, the matter has otherwise progressed beyond the close of pleadings to disclosure and the previously noted assertion by the plaintiffs in February 2013, that the matter is ready for trial. [11] A pertinent consideration is that this claim relates to costs that may be assessed under the LPA. Although the applicant points out that the respondent has not made any such application and that the time limit expressed in s 335(5) of the LPA for making any such application, has now long expired. However that position does not take into account that: (a) Section 335(6) of the LPA would otherwise allow for the possibility of such an application being considered; and (b) Section 337 specifically allows for an application for such assessment by the applicant. 4 Although this is not clear this may be intended to be a reference to a “conditional costs agreement” within the meaning of s 323 of the LPA and which may accordingly raise consideration of s 327 of the LPA to the extent that any such agreement relates to proceedings under the Family Law Act 1975. 5 Although it is not at this stage clear as to what extent interest is claimed and regard would be necessary to s 321 of the LPA. -- 5 of 7 -- 6 [12] Issues of the kind raised in the defence would not preclude the making of an application for a costs assessment and UCPR 743G specifically contemplates direction as to trying issues such as these, in the court and before the costs are assessed. This specifically includes issues as to whether the costs agreement is void, whether the lawyer was negligent and/or in breach of the contract of retainer. It is apparent that from the applicant’s perspective, all that may now be required is the prospect of assessment of the claimed costs, although and as has been noted it is not clear as to the precise response of the applicant to the issues that are raised by the respondent and which may require determination before costs assessment. In particular, there may be a need to determine the terms of any relevant costs agreement and whether there remains any liability for payment due to breach or termination of that agreement, or otherwise pursuant to the LPA.6 [13] Further, UCPR 743B has specific application to this proceeding and by sub-rule (3) allows the court to order an assessment of costs in the absence of any application by the parties. What might, in different circumstances, present as a potential problem because of the connection of the remainder of the provisions of Part 4 of Chapter 17A of the UCPR and that part generally, with the definition of “relevant court” in UCPR 743, is not in issue here. This is because this proceeding was commenced prior to 1 November 2010 and when the monetary limits on the jurisdiction of both the District and Magistrates Courts were amended and increased respectively to $750,000 and $150,000 and because of the effect of the respective transitional provisions (s 145 of the District Court Act 1967 and s 60 of the Magistrates Court Act 1921), which each have the consequence of negating the effect of these increases and preserving the effect of the previous jurisdictional limitations on each court and as far as such proceedings are concerned. Accordingly and on the basis that the relevant monetary limits were then, respectively, $250,000 and $50,000, this court is the relevant court for the purposes of the application of Part 4. [14] Whilst it can be noted that even upon an application for costs assessment, UCPR 743G(2)(c) specifically contemplates consideration of the appropriateness of a referral to mediation, it would usually be expected that issues relating to the 6 Although it may be noted that s 340(1)(d) of the LPA appears to contemplate that determination of an issue as to whether a costs agreement is void under Division 5, may be raised before and considered by a costs assessor. -- 6 of 7 -- 7 assessment of costs are typically and most efficiently resolved by conducting the assessment. Such an assessment is conducted within the overview of the relevant court and to the extent that there may be issues here that potentially go beyond the scope of an assessment, provision may be made for such questions to be tried before the costs are assessed and in order to clarify the basis upon which any such costs remain to be assessed. [15] Moreover, the recovery of legal costs is something over which the courts retain particular oversight, not the least because any assessment of such costs necessarily occurs within the purview of the courts and the assessment may only become enforceable by judgment given by a relevant court.7 [16] In the circumstances of this case this is a preferable approach in respect of the immediate utilisation of resources, rather than a referral to mediation. In particular, there are issues raised here that appear likely to require the resolution of a court. Further and in the interests of an efficient resolution of these questions at an early time, that may be done at a one-day hearing which can be offered in the relatively near future, particularly if, as appears to be appropriate to this type of matter, written materials are prepared by way of evidence in affidavit form and written statements of contention in order to succinctly and properly define the issues to be decided in respect of each relevant question. [17] Accordingly it is appropriate to order that the costs which the plaintiffs seek to recover from the defendant be assessed by a costs assessor and to dismiss the application for mediation. I will hear the parties as to the appropriate further directions or orders. 7 See Part 4 of Chapter 17A of the UCPR generally and particularly UCPR 740, 742 and 743I. -- 7 of 7 --