Edwards v Bray & Anor [2011] QCA 72 [2011] 2 Qd R 310

SUPREME COURT OF QUEENSLAND CITATION: Edwards v Bray & Anor [2011] QCA 72 PARTIES: DAVID EDWARDS (applicant) v CHRISTOPHER JOHN BRAY (first respondent) BEVERLEY LORRAINE BRAY (second respondent) FILE NO/S: Appeal No 5012 of 2010 DC No 76 of 2009 DIVISION: Court of Appeal PROCEEDING: Application for Leave s 118 DCA (Civil) ORIGINATING COURT: District Court at Mackay DELIVERED ON: 15 April 2011 DELIVERED AT: Brisbane HEARING DATE: 25 February 2011 JUDGES: White JA, Margaret Wilson AJA and Ann Lyons J Separate reasons for judgment of each member of the Court, each concurring as to the orders made ORDERS: 1. That the application for leave to appeal be dismissed; and 2. That the applicant to pay the respondents’ costs of and incidental to the application. CATCHWORDS: PROFESSIONS AND TRADE – LAWYERS – REMUNERATION – costs agreements – generally – where applicant solicitor retained by the respondents – where applicant delivered itemised account to respondents – where costs assessor appointed by Solicitors Complaints Tribunal – where costs assessment given on 9 May 2006 – where applicant filed a claim for fees in Magistrates Court – where respondents applied for summary judgment – where judgment was entered – where respondents unsuccessfully appealed to the District Court – where applicant sought leave to appeal to the Court of Appeal – whether a statutory debt came into being on the costs assessment becoming binding pursuant to Queensland Law Society Act 1952 ("QLS Act") s 6ZE(2) – whether QLS Act s 6ZE(2) provides an alternative source of the solicitor‘s entitlement to fees or costs – applicable limitation period pursuant to Limitation of Actions Act 1974 (Qld) -- 1 of 12 -- 2 Acts Interpretation Act 1954 (Qld), s 14A Builders Licensing Act 1971 (NSW) Civil Justice Reform Act 1998 (Qld) Corporations Act 2001 (Cth), s 267 District Court of Queensland Act 1967 (Qld), s 118(3) Legal Profession Act 2007 (Qld), s 767 Limitation of Actions Act 1974 (Qld), s 10(1)(a), s 10(1)(d) Queensland Law Society Act 1952 (Qld) Reprint 4G, s 6ZA, s 6ZC, s 6ZD, s 6ZE, s 6ZF, s 48, s 48A, s 48J, s 48L Uniform Civil Procedure Rules 1999 (Qld), r 293 400 Lonsdale Nominees Pty Ltd v Southern Cross Airlines Ltd (in liq) (1993) 10 ACSR 739, cited Bluebottle UK Ltd v Deputy Commissioner of Taxation (2007) 232 CLR 598; [2007] HCA 54, cited Builders Licensing Board v Inglis (1985) 1 NSWLR 592, cited Coburn v Colledge [1897] 1 QB 702, cited Do Carmo v Ford Excavations Pty Ltd (1984) 154 CLR 234, [1984] HCA 17, cited Letang v Cooper [1965] 1 QB 232; [1964] EWCA Civ 5,cited Mallinson v Scottish Australian Investment Co Ltd (1920) 28 CLR 66; [1920] HCA 51, cited Pickering v McArthur [2005] QCA 294, cited R v Bates [1982] 2 NSWLR 894, cited Rawley v Rawley (1876) 1 QBD 460, cited Re Devy; Ex parte BBC Hardware Limited (1996) 67 FCR 355, cited Re Feez Ruthning’s Bill of Costs [1989] 1 Qd R 55, cited Read v Brown (1888) 22 QBD 128, cited Sullivan v Oil Company of Australia Ltd [2002] 2 Qd R 94; [2001] QCA 252, cited The Commonwealth v SCI Operations Pty Ltd (1998) 192 CLR 285; [1998] HCA 20, cited Thomson Hannan v McDonald & Anor [2002] QDC 258, cited COUNSEL: B W J Kidston for the applicant S J Williams for the respondents SOLICITORS: Hartwell Lawyers for the applicant Murphy Schmidt (as town agents for Taylors Lawyers) for the respondents [1] WHITE JA: I have read the reasons for judgment of Margaret Wilson AJA and agree with those reasons and the order proposed by her Honour that the application for leave to appeal be dismissed and the applicant pay the respondents‘ costs of and incidental to the application. -- 2 of 12 -- 3 [2] MARGARET WILSON AJA: The applicant seeks leave to appeal against a decision of the District Court dismissing an appeal from a Magistrates Court.1 The facts [3] The applicant was a solicitor retained by the respondents. His retainer was terminated in late 1999. [4] On or about 28 April 2004 the applicant delivered an itemised account for $31,647.02 to the respondents. [5] On 19 January 2005 the respondents applied to the Solicitors Complaints Tribunal for the appointment of a costs assessor to assess the account.2 [6] The clerk of the Tribunal appointed a costs assessor, who issued a costs assessment in the sum of $26,696.07 on 9 May 2006. [7] On 6 July 2006 the applicant filed a claim in a Magistrates Court for ―Professional costs and outlays as specified in the Statement of Claim‖ together with interest and costs. So far as presently relevant, he claimed this relief in his pleading – ―a) the sum of $26,696.07 being monies owing pursuant to the Written Assessment …. dated 9 May, 2006.‖3 [8] In their defence the respondents pleaded that $18,718.00 of the claim was satisfied between 15 August 1996 and 13 October 1999, and that the balance was not recoverable because the relevant limitation period had expired. [9] In his reply the applicant pleaded that he did not know if and when payments alleged to have been made were in fact made, and denied that the claim was statute barred. [10] The respondents then applied for summary judgment pursuant to r 293 of the Uniform Civil Procedure Rules 1999. A magistrate ordered that judgment be entered for them with costs. [11] The applicant appealed to the District Court. The appeal was dismissed. [12] The applicant now seeks leave to appeal to this court. Leave to appeal [13] Leave to appeal is necessary by reason of s 118(3) of the District Court of Queensland Act 1967. As Keane JA observed in Pickering v McArthur,4 leave will usually be granted only where an appeal is necessary to correct a substantial injustice to the applicant and there is a reasonable argument that there is an error to be corrected. Other factors which may be relevant to the exercise of the 1 District Court of Queensland Act 1967 s 118(3). 2 Queensland Law Society Act 1952 Reprint 4G, s 6ZA. 3 He made a further claim for moneys owing pursuant to a litigation loan agreement, but that is not the subject of the present application. 4 [2005] QCA 294 [3]. -- 3 of 12 -- 4 discretion include whether the appeal would raise a point of general importance, the amount in issue, and the conduct of the parties in relation to the litigation. [14] At the commencement of the hearing the Court indicated that it would determine the application for leave to appeal after consideration of the merits of the proposed appeal. Counsel concurred in this course. Bankruptcy [15] The applicant became bankrupt in 2000. The bankruptcy was subsequently annulled, and his property revested in him. Accordingly, his bankruptcy is no impediment to his bringing and prosecuting these proceedings. Summary judgment [16] This matter was an appropriate one for determination on an application for summary judgment. It involved only questions of statutory interpretation, and was not one where further evidence could be expected to be adduced on a trial. Why the District Court dismissed the appeal [17] The learned District Court Judge said – ―[12] In essence then s 48J permitted the appellant to render an account in compliance with s 48J(1)(a) or (b) to commence proceedings pursuant to s 48J(2)(a) if more than one month had elapsed. [13] Because no proceedings had commenced and the respondents had applied for an assessment, the appellant had the capacity to apply to the Court pursuant to subsection 2 of s 48J to start the proceeding. [14] It can be seen that the appellant had the capacity by reference to s 48J to commence proceedings before 19 January 2005 subject to some limitations as to form had the capacity to apply for leave to commence proceedings after 19 January 2005. [15] I think it has to be accepted that the Appellant has a cause of action at the end of 1999. I do not find the notion that there are two potential dates to create a cause of action appealing. [16] I have considered the references to Sullivan v Oil Company of Australia Ltd5 and particularly at paragraphs 40 to 44 as requested by counsel for the Appellant. [17] The QLSA provisions at the time did have its own scheme for fixing the quantum of claims. Nonetheless, I am not persuaded that the more general provisions of the Limitations of Actions Act do not apply nor that a second 5 [2002] 2 Qd R 94. -- 4 of 12 -- 5 cause of action arose on and from the 9th May 2006 so the time is extended for a six year period beyond that date. [18] I cannot think of any reason to permit an application for leave to institute proceedings in the absence of an assessment unless it was to deal with the contingency that a limitation period was about to expire. [19] In these circumstances the appeal is dismissed.‖ Recovery of payment for work performed by solicitor [18] At all material times provisions of the Queensland Law Society Act 1952 ("the QLS Act"), as amended by the Civil Justice Reform Act 1998), were applicable to the dispute between the parties.6 The QLS Act contained the following – Part 2A Solicitors complaints tribunal Division 6A Application for assessment of account under client agreement (ss 6ZA – 6ZF) Division 7 Other jurisdiction not affected (s 6AA) Part 4A Client agreements Part 4B Payment for work Division 3 Legal proceedings (ss 48J – 48M) Division 4 Other provisions about costs assessors (ss 48N – 48T) [19] Sections 48 (so far as presently relevant ) and 48A provided – “48 Usual client agreement (1) This section does not apply to urgent work or work if the maximum amount a practitioner or firm charges as fees for the work is $750 or less. (2) Within a reasonable time after starting work for a client, a practitioner or firm must make a written agreement with the client expressed in clear plain language and specifying the following matters— (a) the work the practitioner or firm is to perform; (b) the fees and costs payable by the client for the work. 6 Queensland Law Society Act 1952 Reprint 4G. That legislation was subsequently repealed by the Legal Profession Act 2007, s 767. -- 5 of 12 -- 6 (3) The fees and costs payable by the client for work must specify— (a) a lump sum amount; or (b) the basis on which fees and costs will be calculated (whether or not including a lump sum amount). ... 48A Enforcement of client agreement A client agreement may be enforced in a court of competent jurisdiction in the same way as another contract‖ [20] The relationship between a solicitor and his or her client was contractual, and on the termination of the retainer, the solicitor had a cause of action for moneys owing pursuant to the contract. He or she would have to prove the facts entitling him or her to payment, including the terms of the client agreement, the work performed and quantum. [21] A client wishing to challenge the validity or enforceability of the client agreement could do so in Court proceedings. Such a challenge might be initiated by the client or mounted in defence to a claim by the solicitor for moneys owing pursuant to the agreement. But for the provisions of Part 2A division 6A, a client who disputed only quantum would be put to the expense of defending a Court proceeding in order to do so. [22] The enforcement of the solicitor‘s cause of action was regulated by Part 4B division 3 of the QLS Act,7 which included s 48J – “48J Prerequisite to legal proceeding to recover payment for work (1) A practitioner or firm may start a proceeding in a court to recover fees or costs from a client only if the practitioner or firm has given the client an account that— (a) is in a form agreed to in a client agreement between the practitioner or firm and the client; or (b) clearly sets out all items of work done for the client and the amount charged (whether by way of fees or costs) for each item. (2) Further, the practitioner or firm must obtain the court‘s leave to start the proceeding if— 7 See Coburn v Colledge [1897] 1 QB 702 and Re Devy; Ex parte BBC Hardware Limited (1996) 67 FCR 355, 356-358. -- 6 of 12 -- 7 (a) it is 1 month or less since the account was given; or (b) the client has applied for an appointment by the clerk of the tribunal of a costs assessor to assess the account and the assessment has not concluded.‖8 [23] The solicitor‘s cause of action accrued when he or she completed the work, rather than upon the expiration of one month from the delivery of the account.9 The applicable limitation period was six years from the accrual of the cause of action.10 [24] If the limitation period were about to expire, the solicitor might protect his or her position by obtaining the Court‘s leave to start a proceeding.11 [25] Division 6A provided a procedure for resolution of costs disputes where only quantum was in issue.12 [26] By s 6ZA the client might apply to the Solicitors Complaints Tribunal for the appointment by the clerk of the Tribunal of a costs assessor to assess the solicitor‘s account. A client who did so was taken to dispute only the amount payable under the client agreement, and he or she might not subsequently challenge the validity or enforceability of that agreement.13 [27] Section 6ZE provided – “6ZE When costs assessment binding (1) A costs assessment by an assessor appointed by the clerk of the tribunal is binding on the client and practitioner or firm only if— (a) the client and practitioner or firm have agreed in writing that it will be; or (b) at the end of 30 days after the assessment, no application has been made to a court to decide the reasonableness of the fees and costs charged in the assessed account. 8 Section 48J was part of a raft of amendments to the QLS Act made by the Civil Justice Reform Act 1998, s 9. For many years there was a similar provision postponing a solicitor‘s right to commence proceedings for his or her fees in s 22 of the Costs Act 1867. It was moved to the Legal Practitioners Act 1995, s 5 before being inserted into the QLS Act. These provisions can be traced to English legislation passed in 1729 – the Act for the better Regulation of Attorneys and Solicitors 1729 2 Geo 2, c 23. See Re Feez Ruthning’s Bill of Costs [1989] 1 Qd R 55, 90 – 91; Thomson Hannan v McDonald & Doolan [2002] QDC 258 [13]. 9 See Coburn v Colledge and Thomson Hannan v McDonald & Doolan [2002] QDC 258. 10 Limitation of Actions Act 1974 s 10(1)(a). 11 QLS Act s 48J(2). 12 QLS Act s 6ZB. 13 Section 6ZB. -- 7 of 12 -- 8 (2) A binding costs assessment may be enforced as a debt for the assessed amount and the parties may not subsequently challenge the amount payable.‖ The 30 day time period in s 6ZE(1)(b) might be extended by the Court, and the Court might make any order it considered appropriate, including an order that despite s 6ZE(1)(b) the costs assessment was not binding.14 [28] A costs assessment under Part 2A division 6A might also have a role in Court proceedings in which a solicitor sought to recover fees or costs. [29] In determining quantum the Court might be assisted by a costs assessment. If the client and the solicitor were not bound by an assessment by a costs assessor appointed by the clerk of the Tribunal,15 the Court might appoint a costs assessor to assist it.16 Otherwise it might have regard to an assessment obtained by the client pursuant to s 6ZA. This was the effect of s 48L, which provided – “48L Court may have regard to assessor’s assessment In a proceeding to recover the fees or costs, the court may— (a) receive in evidence a written costs assessment by an assessor appointed under this Act by the clerk of the tribunal or a court; and (b) have regard to a matter contained in the assessment.‖ The costs assessment received into evidence might be one binding on the solicitor and the client pursuant to s 6ZE, or it might be non-binding (because it was an assessment made pursuant to a Court appointment, or because it was an assessment made pursuant to an appointment by the clerk of the Tribunal in relation to which the client had sought review by the Court, or because under s 6ZF(2) the Court had declared an otherwise binding assessment non-binding). If faced with a non-binding assessment, the Court could consider it and derive whatever assistance it could in determining the reasonableness of the fees and costs charged. If faced with a binding assessment, then it seems the only way the Court could take it into account would be by treating it as conclusive evidence of fair and reasonable quantum. More than one right? [30] The applicant contends that by force of s 6ZE(2) a statutory debt came into being on the costs assessment becoming binding. He contends that he had an alternative cause of action for which the applicable limitation period was that in s 10(1)(d) of the Limitation of Actions Act – six years from 9 June 2006 (the date one month after the bill was delivered.) If this contention is correct, the claim was filed within time. 14 See s 6ZF(2) and (5). 15 See s 6ZE. 16 QLS Act s 48K. -- 8 of 12 -- 9 [31] The respondents contend that there was only one cause of action, and that the limitation period expired before the proceedings were commenced. They contend that s 6ZE(2) provided merely a procedural mechanism for the recovery of the assessed amount. Discussion [32] Was there more than one source of a solicitor‘s entitlement to payment? [33] In Bluebottle UK Ltd v Deputy Commissioner of Taxation17 the High Court said – ―A duty or obligation to pay a liquidated sum may be enforced by the action of debt.18 The availability of that action does not identify, however, either the source, or the full content, of the duty or obligation that is enforced.‖ [34] The process of interpreting s 6ZE(2) begins with consideration of the ordinary meaning of the words used. The subsection must be considered in the context of the QLS Act as a whole, and in particular those provisions relating to solicitors‘ accounts. The interpretation which will best achieve the legislative purpose is to be preferred to any other.19 [35] Section 6ZE(2) provided that ―a binding costs assessment‖ might be ―enforced as a debt for the assessed amount‖. [36] There was no definition of ―costs assessment‖. The costs assessor‘s function was ―to assess [the solicitor‘s] account‖.20 He or she might ―reduce‖ the account.21 It follows that the ―costs assessment‖ was his or her quantification of the amount payable by the client for the work performed by the solicitor. Section 6ZE(1) set out the circumstances in which the cost assessor‘s determination became binding on the solicitor and the client, although the Court retained power to order that it nevertheless not be binding.22 [37] In R v Bates23 Samuels JA said that the ordinary meaning of ―enforce‖ is ―to compel the observance of‖ and that it does not naturally include the notion of taking proceedings.24 But in other cases enforcement has been found to include bringing proceedings. 17 (2007) 232 CLR 598, 618, [53]. 18 Mallinson v Scottish Australian Investment Co Ltd (1920) 28 CLR 66, 70, citing Shepherd v Hills (1855) 11 Ex 55, 67; 156 ER 743, 747. See also The Commonwealth v SCI Operations Pty Ltd (1998) 192 CLR 285, 313; [65] per McHugh and Gummow JJ. 19 Acts Interpretation Act 1954 s 14A. 20 QLS Act s 6ZC(1). 21 QLS Act s 6ZD(2). 22 QLS Act s 6ZF(2). 23 [1982] 2 NSWLR 894, 895 – 896. 24 In Bates the New South Wales Court of Criminal Appeal considered the meaning of ―…the provisions of this Act…shall be enforced by the Commissioner of Police and members of the police force‖ in s 2C of the Motor Traffic Act 1909 (NSW). Observing that there was another section which contemplated that an information or complaint might be laid or made under the Act by a person other than a member of the police force, Samuels JA concluded that s 2(c) did not vest in the Commissioner of Police and members of the police force an exclusive right to take proceedings under the Act, but dealt rather with those with responsibility for seeing that the Act was complied with in the more dynamic sense. -- 9 of 12 -- 10 [38] In 400 Lonsdale Nominees Pty Ltd v Southern Cross Airlines Ltd (in liq)25 Hayne J considered whether in the events which had happened the plaintiff had purported to ―take a step in the enforcement of [a] charge‖ within the meaning of s 267 of the Corporations Act (2001) (Cth). His Honour said26 – ―There is no doubt that as a matter of ordinary English usage the ‗enforcement‘ of a charge refers to compelling the observance of the rights asserted.‖ His Honour concluded that the institution of legal proceedings would commonly constitute the taking of a step in enforcement, but the making of a threat to begin them would not.27 [39] The definitions of ―enforce‖ and ―enforcement‖ in Jowitt’s Dictionary of English Law28 include – ―Enforce; enforcement. (1) In the civil context, to compel observance (of a legal obligation by way of legal proceedings; the act or process of such compulsion. There are two stages – before and after judgment – to both of which the term ‗enforcement‘ can be applied. (i) Before judgment, enforcement describes the bringing of legal proceedings to compel observance of, for example, the terms of a contract (by way of an order for the payment of a debt or for specific performance…), a property right, the rights of a holder of a bill of exchange… or an obligation to pay taxes. (ii) After judgment, enforcement means action to compel observance of a court judgment where the person against whom it is given has not complied with it. …‖ (Emphasis added) [40] The meanings of ―debt‖ in the Macquarie Dictionary29 include – ―1. that which is owed; that which one person is bound to pay to or perform for another 2. a liability to pay or render something,‖ and those in New Shorter Oxford English Dictionary30 include– ―Something owed or due, something (as money, goods or service) which one person is under an obligation to pay or render to another.‖ [41] In Builders’ Licensing Board v Inglis31 the New South Wales Court of Appeal considered the meaning of the phrase ―recovered as a debt‖ in s 34(3) of the Builders Licensing Act 1971 (NSW). Kirby P said32 – 25 (1993) 10 ACSR 739. 26 (1993) 10 ACSR 739 at 746. 27 (1993) 10 ACSR 739 at 747. 28 Jowitt, William Allen, Jowitt's Dictionary of English Law, (Sweet & Maxwell, 3rd ed, 1985) 804. 29 The Macquarie Dictionary (The Macquarie Library Pty Ltd, 2nd ed, 1987) 470. 30 Lesley Brown (ed), The New Shorter Oxford English Dictionary (Oxford University Press, 1993) 604. 31 (1985) 1 NSWLR 592. 32 (1985) 1 NSWLR 592, at 597-598. -- 10 of 12 -- 11 ―Normally a debt is a sum payable in respect of a money demand recoverable by an action: see Rawley v Rawley.33 Maitland, in his The Forms of Action at Common Law,34 describes the action of debt as an action for a fixed sum of money. An action framed in debt cannot be used for breach of contract. It serves for the recovery, for example, of statutory penalties and moneys adjudged by a court to be due. The word ‗debt‘ can seldom be construed to include damages, for example, for breach of covenant. The procedural advantages of recovery of a debt have been known to our law for a very long time. They include the entitlement to sue upon a default summons, to require a sworn defence, to secure default judgment without more proof of the claim, and so on. But for the statutory provision that the amount paid for repair of a defective building could be recovered ‗as a debt‘, it would not be susceptible to default procedures. It would require the Board, in every case, to sue for the recovery of the sums paid. The Board would then have to prove, in every case, even uncontested cases, the defects complained of, the repairs effected, the reasonableness of the costs incurred, and so on. It is this necessity to which I take s 34(3) of the Act to be addressed. In many cases the builder will not contest the Board's claim. Such claims can then be sued in debt. The costs of litigation, leading to default judgment, will thereby be reduced. And the sum recoverable from the builder will be fixed by the default judgment.‖ [42] The provisions of Part 2A division 6A of the QLS Act were intended to provide a procedure for the resolution of quantum that was alternative to and less formal and expensive than Court proceedings. This is apparent from the scheme of the provisions: it was only the client who might ask for a costs assessment under Part 2A division 6A; the client might do so only where he or she disputed only quantum; and there was the safety net of review of the assessment by the Court on the application of either the client or the solicitor. That this was the legislative purpose is confirmed by reference to the Parliamentary Debates when the provisions were introduced.35 In short, these provisions were not intended to provide an alternative source of the solicitor‘s entitlement to fees or costs; nor were they intended to alter or provide an alternative limitation period applicable to the solicitor‘s claim. Conclusion [43] Section 10(1)(d) of the Limitation of Actions Act applies where the claimant has a right of recovery sourced in a statute and a cause of action (that is, a factual situation which would support his or her right to judgment36) has arisen.37 33 (1876) 1 QBD 460. 34 (1948) at 63. 35 See Acts Interpretation Act 1954 s 14B, and see Queensland, Legislative Assembly, Parliamentary Debates (Hansard), 21 April 1998 at 759 – 760; Queensland, Legislative Assembly, Parliamentary Debates (Hansard), 4 March 1998 at 137. 36 Read v Brown (1888) LR 22 QBD 128, 131 per Lord Esher MR. See also Do Carmo v Ford Excavations Pty Ltd (1984) 154 CLR 234, 245 per Wilson J; Letang v Cooper [1965] 1 QB 232, 242 -- 11 of 12 -- 12 [44] Section 6ZE(2) of the QLS Act was not a source of the applicant‘s right of recovery. It merely provided an appropriate procedural mechanism for the enforcement of the right to recover the fees or costs (a right that had been conferred by contract and that had arisen on the termination of the retainer) in circumstances where the only issue was quantum and that was now resolved in a way that was binding on the parties. [45] In my view the learned magistrate did not err in giving summary judgment for the respondents; nor did the learned District Court judge err in dismissing the appeal. [46] I would dismiss the application for leave to appeal to this Court, and order the applicant to pay the respondents‘ costs of and incidental to the application. [47] ANN LYONS J: I agree with the reasons of Margaret Wilson AJA and with the orders proposed. – 243 per Diplock LJ; and Sullivan v Oil Company of Australia Limited & Anor [2002] 2 Qd R 94, 103-104, [41] – [44]. 37 Sullivan v Oil Company of Australia Limited & Anor [2002] 2 Qd R 94, 103; [40] per Muir J. -- 12 of 12 --