Astills Lawyers v Young [2009] QMC 8

MAGISTRATES COURTS OF QUEENSLAND CITATION: Astills Lawyers v Young [2009] QMC 8 PARTIES: ASTILLS LAWYERS (plaintiff) v PETER RICHIE YOUNG (defendant) FILE NO/S: M13716/08 DIVISION: Magistrates Courts PROCEEDING: Application for summary judgement ORIGINATING COURT: Magistrates Court at Brisbane DELIVERED ON: 10 August 2009 DELIVERED AT: Brisbane HEARING DATE: 8 May 2009, 24 July 2009 MAGISTRATE: Springer BL ORDER: Judgment is awarded in favour of the plaintiff against the defendant in the sum of $26201.84 plus the costs as agreed between the parties, being the costs of and incidental to the proceeding on the standard basis, other than for the last appearance, which is on an indemnity basis. Failing agreement, the costs will be fixed by the magistrate pursuant to UCPR 683(2), on the filing by the plaintiff of a list of items claimed. CATCHWORDS: PROFESSIONS AND TRADES – LAWYERS – FEES – claim for unpaid fees Legal Profession Act 2007, s 319, s 734, s 735 Uniform Civil Procedure Rules 1999, r 292, r 683(2), r 710, r 738, r 742, r 743A, r 743B, r 743F, r 743G, r 743H, r 743I COUNSEL: Cooper (sol) for defendant SOLICITORS: Barry and Nilsson Solicitors for defendant Background [1] The plaintiff in this matter seeks summary judgement against the defendant. The nature of the claim involves unpaid solicitors‟ fees for work apparently done in connection with a matrimonial dispute between the defendant and his spouse. The -- 1 of 8 -- 2 amount claimed is $22,468.65 plus interest of $116.14 (said to be claimable pursuant to the Legal Profession Act 2007) and costs. [2] The matter came on before me on 8 May 2009. On that date, the defendant appeared without a lawyer. He was at the time represented by Barry & Nilsson. I ruled that despite his application for an adjournment, given the period of notice about the application, and the large number of lawyers at Barry & Nilsson (as could be discerned from their website) that the application was to proceed on that date. [3] The application as it stood before on 8 May 2009 was for summary judgment or in the alternative an order to have the costs assessed. [4] I took the view that a costs assessment should be ordered and I did so. I proceeded under Rule 743F of the Uniform Civil Procedure Rules (UCPR) and pending the assessment, I ordered that the application for summary judgment be adjourned to a date to be fixed and to be brought on before me on not less than 7 business days notice. [5] The matter came back before me on Friday, 24 July 2009. On that day, the defendant was represented by Mr Cooper of Barry & Nilsson. By that time, the costs had been assessed and a „Costs Assessor‟s Certificate‟ dated 3 June 2009 had been filed. I shall return to the effect of that. The total amount of the assessor‟s certificate was $32,556.65. [6] The plaintiff‟s counsel sought an order for summary judgment for the amount of the assessment less $5516.00 – it being common ground that that sum had been paid in respect of the earlier invoice (dated 31 January 2008) prior to the commencement of proceedings. Thus, the amount assessed, allowing for that deduction was in excess of the original claim. [7] Not surprisingly, the defence rejected that course, and submitted in the alternative that the dispute between the parties should be referred to mediation and the application for summary judgment should be adjourned. [8] The costs agreement between the parties in this matter was signed by the defendant on 16 September 2007. The UCPR and other legislation [9] The client agreement which is referred to in the Statement of Claim refers to the Law Society Act 1952. Although the Queensland Law Society Act 1952 (1952 QLS Act) was repealed by the Legal Profession Act 2007 (LPA 2007) transitional provisions permitted the entering into of the costs agreement ostensibly under the 1952 QLS Act for a period of 6 months after the commencement date of 1 July 2007 (see s 734 and s 735 LPA 2007). [10] The UCPR in Chapter 17A deals with costs. The rules draw a distinction between assessment of costs other than under the Legal Profession Act 2007 and assessment of costs under that Act. On my reading of the UCPR, costs can be assessed pursuant to one of the following bases: -- 2 of 8 -- 3 After an applicant has made a request for a costs assessment (but prior to any litigation relating to the allegedly unpaid fees commencing): see UCPR 710. That Rule does not apply to this matter because UCPR 710 appears in Part 3, which (with some exceptions) does not apply because that Part deals with assessments of costs other than under the Legal Profession Act 2007; further, there has never been an application by the defendant in these proceedings to have the costs assessed. Pursuant to an application made to a relevant court under UCPR 743A (in Part 4 of the UCPR, dealing with assessment of costs under the Legal Profession Act 2007); or Pursuant to an application in a proceeding already commenced for recovery of unpaid costs (UCPR 743B). [11] Section 319 of LPA 2007 sets out the basis on which legal costs are recoverable, being: under a costs agreement (which includes a client agreement made under the repealed 1952 QLS Act); under the applicable scale of costs; or if neither of the preceding applies “according to the fair and reasonable value of the legal services provided”. [12] When I made the order on 8 May 2009 that the costs the subject of the proceedings should be assessed, I proceeded under Rule 743F of the UCPR, which deals with assessment of costs under the LPA 2007. Although the power is conferred on the registrar in that Rule, I see no impediment to a Magistrate exercising that power. [13] Despite the client agreement referring to the 1952 Act, I consider that it is an agreement under the LPA 2007, because the wording in section 734 of the 2007 Act permits the making of an agreement “as if [the 1952 QLS Act] had not been repealed.” Therefore Part 4 of Chapter 17A of the UCPR, together with those in Part 3 that have extended application are relevant to the matter before me: see UCPR 743I. The issues in dispute [14] The Defence alleges breaches of the 1952 QLS Act in the completion of the client agreement and that, in essence, because of those breaches, the client agreement signed by the defendant is void. [15] The client agreement when read as a whole describes the work to be performed as “Matrimonial Separation”. It is reasonable to imply into that words along the lines of “attendances, correspondence, inquiries, communication (oral, written and electronic) court documents, court appearances as may be reasonably required in relation to …”. The client agreement also provided a (perhaps unhelpful) broad range of estimates of fees and costs of “$2,000.00 - $20,000.00”. A schedule of the hourly rates and costs of work performed by different classes of the plaintiff‟s employees and outlays paid on behalf of the defendant is also provided. No specific lump sum amount is stated. -- 3 of 8 -- 4 [16] Item 7 in the Schedule to the Client agreement lists the “significant matters” which may affect the estimates. Items 10 and 11 list in percentage terms the estimates of fees and costs which may be recovered if litigation is successful which permits, by a simple mathematical calculation, a person to ascertain the percentage of fees for which the client would remain liable. [17] The client agreement schedule refers to an applicable scale of fees stipulated as Family Law Court of Australia and states “copy provided”, although no copy was attached to that schedule. [18] I respectfully adopt the approach taken by Fryberg J in Herald & Ors v. Worker Bee (Brisbane) Pty Ltd [2004] 2Qd.R 263 at 265 where he took the view that to have included the schedule of fees with the documents sent out with a solicitor‟s agreement would be “to create confusion” as it would to be likely to convey to the client: that the solicitor‟s fees would be calculated on the basis of it. If the scale is anything, it is certainly not that. [19] Further, His Honour took the view that the inclusion of any such scale would not assist a client to determine “the difference between what he might recover if successful on a party and party basis and what he is liable to pay his solicitor”. [20] Fryberg J continued: Moreover, there is no reason why the scale should be included for this purpose because the solicitor is, in any event, obliged to include an explanation of and an estimate of the range of costs which may be recovered from another party if the client is successful, or which the client might be required to pay if unsuccessful … That fact, together with the misleading effect which the inclusion of the scale would have, leads me to think that it is most unlikely that the Act requires the scales to be included with the agreement. It is much more likely that the Act was drafted with scales in mind which fixed solicitor and client costs. Until the 1990s, such scales were common in the District and Magistrates Court, and in other inferior courts. [21] In the current action, there does not seem to be a contest about the work relating to a proceeding in the Federal Magistrates Court rather than the Family Court of Australia. [22] The Rules of Court made under the Family Law Act 1975 (Rule 123 (1A)) expressly excludes the Federal Magistrates Court from any such rules. The Federal Magistrates Court Rules 2001 state in Rules 21.09 sub-rule (3) that unless otherwise provided, those Rules “do not regulate the fees to be charged by lawyers as between lawyer and client in relation to proceedings in the Court” (emphasis added). The language is clear. That rule includes a note that for any dispute between a lawyer and a client about the fees charged by the lawyer, parties are referred to the state legislation governing the legal profession in the state where the lawyer practises. [23] Accordingly, I am satisfied as a matter of law that neither the Rules of Court under the Family Law Act nor the Federal Magistrates Court Rules have any applicability -- 4 of 8 -- 5 to the dispute between the parties in this proceeding. Notwithstanding that the Schedule forming part of the client agreement refers to a scale of fees which is not attached to the client agreement, given that the work that was done under the costs agreement was in the Federal Magistrates Court and there being no applicable FMC rules, I am not persuaded that that constitutes a failure to comply with section 48 of the 1952 QLS Act. [24] Further, having regard to the whole of the client agreement, I am satisfied that there has not been a failure to comply with section 48 of the 1952 QLS Act. [25] UCPR 743B states that if a law practice who has started a proceeding in a court to recover costs, any application for assessment of all or part of those costs must be made by application in the proceedings. Here, the application for the assessment of the costs was the alternative relief sought in an application for summary judgment. The defendant had sufficient notice that was the application that the court was being asked to consider. [26] UCPR 743G permits, but does not require, a court to a hold a directions hearing. [27] By the inclusion of various rules from Part 3 as listed in 743I, the defendant had a right (but was not obliged) to seek reasons for decision in relation to the costs assessment and to seek a review: see UCPR 738 and 742. He did not do so. [28] When he appeared on 24 July, Mr Cooper for the defendant raised various aspects of the costs assessment which he submitted showed there were errors in that assessment. These included different numbers of units of work calculated by the assessor and that the basis on which the assessment had been conducted was not clear. Mr Cooper also raised the issue of there being a running account of work between the parties and it was that submitted that any assessment should have covered all previous invoices. [29] The Legal Profession Act 2007 specifically permits an „interim bill‟ – assuming for the moment that the previous invoices could be regarded as such – to be the subject of an assessment under division 7 of the Act either at the time of the interim bill or at the time of the final bill, whether or not the interim bill has previously been assessed or paid. However, the raising of the earlier invoices at this time suggests an attempt at delay. Although the pleadings refer to the earlier work, there is no evidence that the defendant has previously had any issue earlier with the invoices rendered from time to time. [30] In my view, the same approach taken in relation to an application for itemised accounts which included accounts which had already been rendered and paid should be adopted (see Atlantic 3-Financial (Aust) P/L & Anor v Marler & Anor [2003] QCA 529), where Jones J said (at paragraph [29]): [1] The request, in this instance, is in general terms, and impermissibly (on my construction) includes matters in which costs have been paid and matters in respect of which accounts have been rendered. [31] At paragraph [21] His Honour noted: The evident purpose of the rule is to ensure that a client will be made aware of his or her financial obligation to a practitioner. This will be achieved by the rendering -- 5 of 8 -- 6 of an account which complies with s 48J of the Act. Thereafter challenges to the account may be made pursuant to various sections of the Act. The exclusion of work for which costs have already been rendered, or in fact paid, is consistent with that purpose. It would make little sense to provide for the surrender of a lien by making a request for a different type of accounting on an account that had already been paid. A client's position is protected by being able to require an account to be presented in a form agreed or as required by the Act before payment. If the legal costs are paid without recourse to such opportunity then it seems to me to be a prima facie waiver of the right and the position should not be reversed by the simple expedient of sending a request in writing. (Footnotes excluded and emphasis added). [32] It appears that the costs assessor may have misunderstood the basis of his appointment. This was raised by Mr Cooper for the defendant who handed up, as part of his submissions, a letter from the assessor, Mr Hartwell. In that letter, the assessor referred his assessment as ostensibly being under Rule 740(4). Despite his apparent misunderstanding on the basis of his appointment, I am not satisfied that the assessor has misunderstood the actual basis on which he was to conduct the assessment. He has conducted his assessment on the basis of the figures set out in the client agreement. [33] For example, he clearly identifies the units of work that he has counted in his calculations using the dollar amounts set out in the client agreement. The reference to a unit is a 6 minute period; where the charge for the unit is $32.00 that equates to $320 per hour, which is referable to the “Legal Practitioner” category set out in the “Client Agreement Schedule” forming part of the client agreement. [34] The costs assessment particularises the various units of work done between the periods 4 January 2007 to 30 January 2008 and 12 February 2008 to 2 September 2008. These periods are consistent with the invoices referred to in the Statement of Claim. [35] The total number of the units of work referred to in the details of the assessment is more than originally calculated in the detailed provided by the plaintiff. In my view, merely because a costs assessment identifies additional work done but not included in the original account does not make the assessment defective. There may have been a less rigorous approach in mathematical terms in calculating the number of units. When should summary judgment be given [36] The UCPR permits a court to give judgment for the plaintiff against a defendant if the court is satisfied that the defendant has no real prospect of successfully defending all or part of the plaintiff‟s claim and there is no need for a trial of the claim or part of the claim (UCPR 292). [37] The philosophy of the UCPR is set out in Rule 5 and includes “to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense”. The rule continues: “these rules are to be applied by the courts with the -- 6 of 8 -- 7 objective of avoiding undue delay, expense and technicality and facilitating the purpose of these rules”. [38] Rule 743H applies when a certificate of assessment has been filed in the relevant court, as has now occurred in this matter. Sub-rule (3) permits to the court to give directions or to decide the issue where there is any dispute between the parties or, if there are no issues to give judgment it considers appropriate having regard to the certificate (sub-rule (4)). In sub-rule (5) the court may delay giving a judgment pending a review by the court of a decision of the costs assessor. [39] There were comments from the bar table about the existence of an amended statement of claim to increase the amount claimed to be the amount of the assessed costs. An amended Statement of Claim has not been filed, and leave to file it has not been sought or given. Were such an application brought before me I would at this stage be disinclined to grant leave. The claimant was, up to the time of the costs assessment ordered by the court, prepared to pursue only the amount of the claim, namely $22,468.65 plus interest at the rate of 9.25 per cent as claimed in paragraph 2 of the statement of claim, plus costs. [40] Noting the philosophy of the UCPR, in my view, the claim should be disposed of at this stage, so as to avoid further costs. The assessment of the professional costs the subject of the claim by a costs assessor appointed under the UCPR, who is a person independent of the plaintiff produces a figure for the professional services performed in excess of the original claim. This confirms that the amount originally claimed, calculated on the figures in the client agreement, was not excessive. [41] The certificate of assessment states that the assessor‟s fees were $2032 and were payable by the defendant. I see no reason to interfere with that approach. [42] In my opinion the defendant has no real prospect of successfully defending all of part of the plaintiff‟s claim and there is no need for a trial for any part of the claim. Judgment for the plaintiff. The defendant‟s counter-claim is dismissed. [43] Before setting out the judgment amount, I turn to the issue of whether costs should be awarded on other than a standard basis. Written submissions provided on 24 July 2009 refer to a series of offers and counter offers. The defence raised the issues about the assessment after the certificate of assessment had been provided to both parties. The defendant did not avail himself of the opportunity to seek reasons for decision or for applying for a review (UCPR 738 and 742(2)) which may have avoided the need for a further court appearance. While I am not persuaded that indemnity costs should be ordered generally in the proceeding, in my view they should be payable by the defendant in respect of the appearance on 24 July 2009, by which stage it ought to have been clear to the defendant that any dispute as to the amount was unlikely to be resolved in his favour. [44] Judgment is awarded in favour of the plaintiff against the defendant in the sum of $26,201.84 (calculated as set out below) plus the costs as agreed between the parties, being the costs of and incidental to the proceeding on the standard basis, other than the costs of an incidental to the last appearance on 27 July 2009, which are payable on an indemnity basis (see the preceding paragraph). Failing agreement, the costs will be fixed by me pursuant to UCPR 683(2), on the filing by -- 7 of 8 -- 8 the plaintiff not later than 31 August 2009 of a list of items claimed and provision by either party of any written submissions (not exceeding 2 pages) on the question of costs only. Calculation of Judgment Amount 1. Invoice amount for professional services and disbursements - invoice rendered 30 January 2008 $ 7443.70 Less payment credited to invoice 30 January 2008 $ 5516.00 Balance: $ 1927.70 2. Plus Invoice amount for professional services and disbursements - invoice rendered 18 September 2008 $20,540.95 3. Plus interest at the rate of 9.25% (being target cash rate plus 2% in accordance with the Legal Profession Act 2007 from 30 days after the date each unpaid invoice was rendered - Invoice 30 January 2008 (9.25% of $1927.70 = $178.31 per annum ÷ 365 days = 49 cents per day x 511 days from and including 1 March 2008 – 24 July 2009) $ 250.39 - Invoice 18 September 2008 (9.25% of $20,530.95 = $1900.03 per annum ÷ 365 days = $5.20 per day x 279 days from and including 19 October 2008-24 July 2009) $1450.80 Total Interest $ 1701.19 4. Costs of assessment $ 2032.00 ________ Judgment Amount $26201.84 -- 8 of 8 --