Drakos & Castrisos, Re [1997] QSC 157

IN THE SUPREME COURT OF QUEENSLAND Brisbane Before Mr Justice Ambrose [Re Connor & Anor] O.S. No.7659 ofl997 IN THE MATTER OF The Costs Act 1867 (As amended) AND: IN THE MATTER OF The Legal Practitioners Act 1995 AND: IN THE MATTER OF A Bill of Costs delivered on 14 July 1995 by HAROLD STANLEY DRAKOS and CONSTANTINE GEORGE CASTRISOS trading under the name of MESSRS. H. DRAKOS & COMPANY SOLICITORS , to BARRY EDWARD CONNOR and PENELOPE JAYNE CONNOR REASONS FOR JUDGMENT - B.W. AMBROSE J. Judgment delivered 9 September 1997 CATCHWORDS: APPLICATION - to have bill of costs referred to taxation - s.8(3) Legal Practitioners' Act 1995 - bill of costs delivered 2 years ago - whether special circumstance exists - whether bill "redolent of overcharge" - whether redolent overcharging constitutes a "special circumstance" - whether misleading advice constituted a special circumstance Counsel: Mr M. Liddy for the applicants Mr G. Cross for the respondents Solicitors: Quinn & Scattini for the applicants H. Drakos & Company for the respondents Hearing Date: 3 September 1997 -- 1 of 9 -- IN THE SUPREME COURT OF QUEENSLAND Brisbane Before Mr Justice Ambrose [Re Connor & Anor] O.S. No.7659 of 1997 IN THE MATTER OF The Costs Act 1867 (As amended) AND: IN THE MATTER OF The Legal Practitioners Act 1995 AND: IN THE MATTER OF A Bill of Costs delivered on 14 July 1995 by HAROLD STANLEY DRAKOS and CONSTANTINE GEORGE CASTRISOS trading under the name of MESSRS. H. DRAKOS & COMPANY SOLICITORS to BARRY EDWARD CONNOR and PENELOPE JAYNE CONNOR REASONS FOR JUDGMENT - RW. AMBROSE J. Judgment delivered 9 September 1997 This is an application made on 27 August 1997 for reference for taxation of a Bill of Costs in taxable form delivered on 14 July 1995. A period in excess of two years has elapsed since the delivery ofthe Bill. Under s.5 of the Legal Practitioners Act the respondent solicitors were unable to sue for the fees itemised in the Bill of Costs until the expiration of one month from its delivery. Under s.7(1) of the Act, the applicants in this case were entitled within one month to obtain an appointment for taxation of the Bill without any order of this Court. Under s.8(1) of -- 2 of 9 -- 2 the Act after the lapse of a month from time of delivery it was necessary for them to obtain leave of a judge of this Court for reference of the Bill for taxation. Leave could be given conditionally. Section 8(3) provides - "(3) However no such reference as aforesaid shall be directed upon an application made by the party chargeable with such --- after the expiration of twelve months after such Bill shall have bee'll delivered, sent or left as aforesaid except under special circumstances to be proved to the satisfaction of the Supreme Court or a judge thereof to whom the application for such reference shall be made." . It is clear from the terms of s.8(3) that the onus is on the applicants in this case to show that there are "special circumstances" justifying reference of the Bill for taxation more than two years after its delivery. In fact it was on 29 August 1995 that the respondents instituted proceedings in the District Court for recovery of their costs in respect of which the Bill had been delivered. There have been a number of interlocutory steps in that action. Eventually it was transferred to the Magistrates Court where it is listed for trial shortly. In interlocutory proceedings the respondents complained on 27 October 1995 that the applicants had not taken any steps to have taxed the Bill of Costs delivered in July. This led to the first applicant deposing to the fact that he understood he had the right to apply to the Federal Court for taxation. It seems therefore that as early as November 1995 and well within the period of twelve months of delivery of the Bill of Costs that applicant was aware of or at least had the belief that he might apply to the Federal Court for taxation of the Bill delivered in July. It is unnecessary to consider what the consequences would have been of his attempting to have the Bill of Costs taxed in the Federal Court. It seems likely that ultimately any taxation of the Bill would have been conducted in this Court. Indeed the Bill of Costs itself delivered on 14 July -- 3 of 9 -- 3 1995 is one for taxation by the Taxing Officer of this Court. As a matter of interest, professional costs total $25,739.33 and disbursements $18,949.60 making a total of$44,688.93. The Bill of Costs contains 981 items and extends over 103 pages. The applicants engaged the respondents as solicitors to appear for them and other persons in the Federal Court in September 1993. Proceedings were instituted and were eventually settled as far as the substantive relief sought was concerned to the advantage of the applicants. There was a great deal of complaint however as to the care with which the respondent carried out their professional duties in providing legal services. It is contended that there was considerable negligence on the part of the respondents and indeed that some steps taken were taken without the authority of the applicants. It is unnecessary upon this application for me to embark upon a consideration of those matters which were greatly canvassed upon the hearing of the application before me. lt suffices to say that when the respondents commenced proceedings in the District Court for outstanding fees the applicants counterclaimed for damages for negligence and also raised the question as to whether some of the work for which charges had been made was authorised. Stated shortly, the proceedings of some ofthe persons joined as plaintiffs in the applicants' action in the Federal Court were struck out or discontinued. Indeed there were a number of successful interlocutory applications taken against the applicants and ultimately they were ordered to pay costs of opposing parties in the Federal Court action taxed in the sum of about $9,000 in respect of those applications. Ultimately when the action was settled (before delivery of defences of opposing parties) it was agreed that each of the applicants and the opposing parties in their action in the Federal Court should pay their own costs. -- 4 of 9 -- 4 All these matters are canvassed in the applicants' counterclaim and/or set off to the respondents' claim for legal and professional fees. Upon an application for summary judgment in the District Court on 30 October 1995 the first respondent deposed to the fact that the applicants had not taken any steps to have the Bill of Costs taxed. By affidavit sworn on 15 November 1995 the first applicant swore that he believed that he had the right to apply to the Federal Court for taxation of the plaintiff's account but for some reason which was unexplained he had not made such an application at the time of swearing his affidavit. It is clear that at some stage a letter dated 20 November 1995 was written by his then solicitor to the applicant advising that it would be necessary for him to apply to have the Bill referred for taxation with twelve months. That letter was written a little over four months after delivery of the Bill. Although the applicant has provided a copy of this letter which in some unexplained fashion appears to have come into his possession, he deposes to not seeing it until 26 August 1997. It is clear that his solicitor who wrote the letter to him, which he denies receiving, at about that time continued to act for the applicant more than twelve months subsequent to the date of that letter and one can only wonder having regard to the professional services rendered and their regularity why this matter would not have been raised with the applicant. The applicant says that the letter must have gone astray because he had changed the location of his business. He does not say that he changed the post office box to which the letter was addressed but in any event his evidepce that he did not receive the letter is uncontradicted. However his affidavit sworn on 15 November 1995 that he knew he had a right to have the Bill taxed at that time but had not bothered to take steps to do so, makes it difficult for the first applicant to explain away the great -- 5 of 9 -- 5 delay (of more than two years after delivery of the Bill) before attempting to take any steps to have it referred for taxation. Upon the hearing submissions were made concerning the effect that any order for reference for taxation might have on the determination of the action shortly to be heard in the Magistrates Court. Indeed part of the relief sought by the applicant is an order that the taxation of the Bill upon reference be stayed pending the hearing and determination of the claim and counterclaim in the Magistrates Court in Plaint and Summons No. 10206 of 1996. Interestingly the applicants seek to have the costs of this application made· costs in the taxation. It was unnecessary to consider what part in the scheme of things the determination of issues between the parties in the Magistrates Court action will play upon the ultimate taxation. Reference was made to King William Law Chambers & Williamson & Co. v Mobitel (International) Pty. Ltd (1981) 29 S.A.S.R. 316 and also to an unreported decision of Moynihan J. in Re Jeffrey John Irvine delivered on 5 August 1996. It is unnecessary and inappropriate for me to embark upon an analysis of those cases upon a hearing of this sort. In Re Norman (1886) 16 QBD 673 "special circumstances" were defined to mean those which appear to the judge considering the application to be "so special and exceptional" as to justify referring for taxation a bill which a client has made no timely effort to have taxed. There is absolutely no evidence from any expert in matters of taxation of professional costs concerning the quantum of the charges for specified professional services contained in the itemised Bill of Costs. Indeed the only expert evidence from a person experienced in legal costs was an affidavit from Allan William Adrian who is described as a "legal costs assessor". His affidavit dealt with certain assertions in an affidavit of the first applicant as to the inference that might be drawn from the amount for which the costs of interlocutory proceedings taxed against -- 6 of 9 -- 6 the applicant ($9,000) could be used in determining whether the total costs claimed in the Bill of approximately $44,000 could be said to be "redolent of overcharging". He then went on to explain why suchan inference could not be drawn. Indeed such evidence was hardly needed. The Bill of Costs delivered by the respondent was a solicitor and client bill whereas the Bill of Costs taxed in the Federal Court action must have been for party and party costs. There is absolutely no indication in the material as to the nature of the costs incurred by the parties in the Federal Court in respect of which they got an order against the applicants upon the interlocutory proceedings in which they succeeded. The respondent was roundly criticised for not having Mr Adrian express any view in the affidavit as to whether or not the costs in the Bill of Costs delivered in July 1995 were "redolent of overcharging" to use the terminology of Bowen LJ in Re Boycott (1885) 29 Ch.D. 571. It was suggested that if! went through the Bill of Costs and looked at the various amounts charged for various professional services rendered, I would, without assistance from any expert evidence come to the conclusion that indeed some at least of the contents of the Bill could be described as "redolent of overcharging". In my view it would be quite unsatisfactory for the determination of this application for me to embark upon an investigation of 100 pages of a Bill of Costs containing hundreds of items involving professional charges without the assistance of any expert opinion as to their propriety with a view to coming to a conclusion that the total professional costs of $25,739.33 or a substantial identifiable part of them could be described as being "redolent of overcharging". No item was singled out for consideration upon the hearing. The largest item is one for $7,000 for the taking of instructions generally, briefing of counsel, sundry attendances and perusals not specifically referred to in the Bill and for care and consideration. -- 7 of 9 -- 7 I am unpersuaded the way the application was conducted that it can be said that the Bill of Costs delivered so long ago is on its face "redolent of overcharge" which ipso facto amounts to a special circumstance. The second "special circumstance" upon which the applicants relied, is based upon an affidavit from his former solicitor Mr Alexander (the author of the letter advising the applicant that he would have to refer the delivered Bill of Costs for taxation within twelve months from the date of delivery). In paragraph 7 he expresses the view "the amounts paid by Mrs Connor and the companies appeared to be more than adequate compensation to the plaintiffs for the period that those particular defendants were party to the Federal Court proceedings". In paragraphs 10 and 11 of the same affidavit he deposes: "10. I sought oral advices from counsel I believe Mr Lewis and a cost assessor Mr Les Adrian concerning whether the proceedings should be defended on the question of negligence or the Bill taxed. 11. As a consequence of the advices I received I advised Mr Connor to defend the matter on the question of whether or not the solicitors acting for him had been negligent". It was contended for the applicants that this advice in effect established a "special circumstance". In essence it was contended that the applicants may perhaps have been "misled" by the terms of the advice received from their then solicitor that in effect they should litigate the question of negligent performance by the respondents of their professional obligations in the District Court (and ultimately in the Magistrates Court) before taking steps to have the Bill delivered in July 1995 referred for taxation. If having regard to whatever advice they received the applicants decided to take this course it seems clear that when they effected a change of solicitors their new and current solicitors took a different view. This perhaps explains the urgency with which this application has been brought on after such a long delay. -- 8 of 9 -- 8 I am unpersuaded that the decision by the applicants with or without the advice of their then solicitor to "defend" the respondents' claim for unpaid costs rather than to embark upon a taxation of the Bill and indeed without taking any steps to have the Bill referred for taxation within the period specified under the legislation in force - s. 8(3) of the Legal Practitioners' Act 1995 - does constitute a "special circumstance" within the meaning of that section. In my view there has been unexplained delay in bringing this application. The material does not suggest that there is any reasonable excuse really for that delay. No effort has been made to show that there are any specific overcharges. Even if some overcharges had been demonstrated, it does not seem to me that that alone would constitute special and exceptional circumstances of the sort required to justify a reference for taxation at this late stage - see In the Matter oj Andrew Edward Brown's Bill oj Costs (unreported decision of Ryan 1. on Action 658 of 1987, delivered 24.9.87 at p. 4) where his Honour observed - "If the applicant fails to apply for taxation by reason of a view which is subsequently held to be incorrect he must bear the consequences of it". I am unpersuaded on the material and arguments advanced that the applicants have discharged the onus on them of demonstrating any "special circumstances" which justify the exercise of discretion in their favour to refer for taxation in September 1997 the itemised Bill of Costs delivered in July 1995. I dismiss the application. I order that the applicants pay to the respondents their costs of and incidental to the application to be taxed. -- 9 of 9 --