Brown, Re; Re Gainlove Pty Ltd [1992] QSC 255

IN THE SUPREME COURT OF QUEENSLAND No. 577 of 1992 IN THE MATTER of the Costs Act of 1867 - and - IN THE MATTER of IRENE MAY BROWN and GAINLOVE PTY. LTD. JUDGMENT - RYAN J. Delivered the Twenty-first day of July, 1992. Counsel: Mr. J. Batch for the Applicant Mr. A. Stone for the Respondent Solicitors: Baker & Co. for the Applicant Welsh & Welsh for the Respondent Hearing Dates: 2, 9, and 17 July, 1992. -- 1 of 11 -- IN THE SUPREME COURT OF QUEENSLAND No. 577 of 1992 IN THE MATTER of the Costs Act of 1867 - and - IN THE MATTER of IRENE MAY BROWN and GAINLOVE PTY. LTD. JUDGMENT - RYAN J. Delivered the Twenty-first day of July, 1992 Application has been made by Irene May Brown and Gainlove Pty. Ltd. for orders: (1) That bills of costs delivered to the applicants by Baker and Company, Solicitors, be referred to the Taxing Officer of the Supreme Court for taxation; (2) That John Alexander Baker being the plaintiff in District Court No. 1135 of 1992 be restrained from prosecuting that action. By an amended summons, the applicants also seek orders that the respondent deliver bills in taxable form. Mrs. Brown, who is an applicant and a Director of the other applicant, Gainlove Pty. Ltd., has deposed that the applicants had employed the respondent firm as their solicitor for numerous transactions between July, 1991 and February, 1992 when their instructions were withdrawn. Until 28 November, 1991, no accounts had been received from the respondent for its work. On -- 2 of 11 -- 2 that day, she was presented with ten accounts. Next day, she contacted the Queensland Law Society in relation to the rates of charges of solicitors. A week later she met the respondent and had discussions with him about the costs. He told her that he would be reviewing some of the accounts and that she could meet with him the following week. At that meeting, the respondent agreed to make some adjustments to his accounts. A week later, the respondent sold certain bank guarantees belonging to her, with her authority, for $45,000. On 19 December, 1991, she executed a trust account authority in relation to the proceeds of sale. She had previously signed other authorities in favour of the plaintiff, dated 8 and 22 November, 1991. She deposes that she was told that these authorities were to enable the progressive cbsts of the litigation involving what is referred to as the "Kel.l.y matters" to be met and an advance to be made to a Mrs. Wilson. Later she discovered that the authorities had been used to pay accounts other than those which related to the Kelly matters. On 11 March, 1992, she deposes that she wrote to the respondent and asked for bills of costs in taxable form, and on 13 March, 1992, she instructed her solicitors in Nambour to write confirming this request. After further correspondence on 13 April, 1992 she received four bills of costs in taxable form relating to the Kelly matters. She has not received bills of costs in taxable form in relation to any other work carried out by the respondent on her behalf. 0 0 0 0 -- 3 of 11 -- 3 On 5 June, her solicitors wrote to the respondent reiterating its request for bills of costs in taxable form in relation to all matters other than the Kelly matters. Mrs. Brown has deposed that she had not asked for the bills of costs which were delivered in taxable form to be taxed for a number of reasons which had to do with her personal circumstances. She states reasons why certain charges which appear in the bills of costs are excessive. She states that she (; had not previously made application for the other costs to be taxed because she believed that the bills could not be taxed until they were submitted to her in taxable form. Mrs; Silcock, a solicitor who conducts the business of a legal costs assessor, has expressed cri tic ism of some of the items in the bills of costs in taxable form, and has stated that taxation of the bills is the only way of determining whether certain claims are reasonable. In relation to the other bills (, of costs, she has expressed the opinion that the accounts have been calculated either at an incorrect scale or no scale at all. I permitted cross-examination of her upon her affidavit by counsel for the respondent, Mr. Batch. Mr. Baker has deposed that on 16 March, 1992 he received a letter from Mrs. Brown's solicitors dated 13 March, 1992, noting that a request had been delivered by Mrs. Brown for bills of costs in taxable form. No such request had been received. He was unaware that instructions had been withdrawn until he received that letter. He states that it is untrue that Mrs. Brown received no accounts from the respondent for any work between July 1991 and 28 November, 1991 and gi~es details of -- 4 of 11 -- 4 accounts sent. He denies that he and Mrs. Brown had a number of discussions on costs though he told her that he would always be happy to discuss the quantum of fees. He states that at no time did he advise Mrs. Brown that the authority would be used for the purpose of paying Kelly accounts and the advance to Mrs. Wilson. He states that by agreement with Mrs. Brown and Mrs. Wilson he made the advance of $7,500 to Mrs. Wilson on 19 December, 1992 as soon as the funds on account of Gainlove Pty. Ltd. were transferred to his general account. ~ Mr. Baker deposes that all ten accounts referred to by Mrs. Brown were submitted in a form "which I believed satisfied the test in the Walsh Halligan & Douglas case", but as Mrs. Brown's solicitors had not conceded that that was so, on 10 April, 1992 bills of costs were prepared in the Kelly matter in haste to ensure that any lien he might have was preserved. He sets out his answer to her claim that certain charges were excessive and to the criticisms made by Mrs. Silcock. I permitted cross-examination of Mr. Baker upon his affidavit. On 11 June, 1992, His Honour Judge Boulton made orders in an action between John Alexander Baker as plaintiff and the applicants as defendants. The plaintiff had claimed $40,308.36 for work done and services rendered, moneys paid and liabilities incurred as a solicitor in the period from November 1991 to February 1992 inclusive. This was in respect to the "Kelly bills". The plaintiff sought summary judgment for the sum of $30,437.88. His Honour gave leave to the defendants to defend on condition that they pay into Court that sum. He ordered that ~ ~ ~ -- 5 of 11 -- 5 the defendants pay the plaintiff's costs of and incidental to the application to be taxed. An employee of the respondent Miss Anderson has deposed that no explanation was given to Mrs. Brown that the authority to which she had referred would be used for the purpose of paying the Kelly accounts and the advance to Mrs. Wilson, or that the other authorities to which she referred were to enable the progressive costs of the litigation involving the Kelly matters to be met. It is deposed by Mr. Baker that Mrs. Brown's financial position is such that he will recover none of the costs ordered by His Honour Judge Boulton, and that if leave is granted for her to tax the Bills of Costs which were settled and paid in 1991, it will cost approximately $5,000 to prepare bills of costs in taxable form. In relation to the Kelly bills, which it is accepted have ( already been delivered in taxable form it is necessary to have regard to s. 25 of the Costs Act of 1867 under which the court may refer the bills for taxation, in the case where an application for an appointment for taxation has not been made within one month, with such directions and subject to such conditions as the court may think proper. It is submitted that I should exercise my discretion to order taxation having regard to the following matters: (i) the applicant protested about the bills and complained to the Law Society about the charges shortly after she was presented with the accounts; (ii) the defendant requested bills in taxable form; -- 6 of 11 -- ,, 6 ( iii) evidence has been given by a costs assessor and the applicant raising serious queries about the extent of charging in the bills; and (iv) the bills in taxable form were only delivered on 13 April, 1992. It was submitted for the respondent that, having regard to the proceedings before His Honour Judge Boulton, a proviso to s. 25 was applicable. This is to the effect that such a reference shall not be directed upon an application made by the party O chargeable with the bill after a judgment has been signed in an action by the attorney for the recovery of his demand. I am unable to accept that judgment has been signed when conditional leave to defend has been given, and I reject that submission. In relation to the other bills, it was submitted for the applicants that these bills are not in taxable form nor are they bills within s. 22 of the Costs Act. Requests had been made for delivery of these bills in taxable form. It was claimed that the Court should make an order pursuant to s. 26 of the Costs Act for delivery of bills of costs. For the respondent it was submitted that the ten bills of September and November 1991 were in a form sufficient to comply with s. 22 of the Costs Act. It was also submitted that the bills other than the Kelly bills had been paid, the payments being made in accordance with s. 8(1)(c) of the Trust Accounts Act of 1973, by authorisation in writing. It was said that the payments were made on 5 September, 17 and 23 October, 8 November, 12 December and 19 December 1991, and that before the time when the last two payments were made, Mrs. Brown had retained a solicitor, Mr. Rudz who advised her that he 0 0 0 -- 7 of 11 -- 7 thought the bills were high. It was further submitted that the special circumstances of the case did not require the Court to refer the paid bills for taxation. After I had heard evidence and received submissions on behalf of the parties, an application was made on behalf of the respondent to put before me fresh evidence. I allowed evidence to be given in the form of an affidavit by Mr. Baker to the effect that registration of the second applicant, Gainlove Pty. (\ Ltd. was cancelled and the company dissolved pursuant to s. ' " 574(1) of the Corporations Law on 10 July, 1992. The moneys transferred from trust to pay the "paid bills" in this matter were the moneys of Gainlove Pty. Ltd. , and were the result of the settlement of another dispute with third parties. They were paid to Mr. Baker's trust account by the other third parties. All relevant authorities pursuant to which Mr. Baker's bills were paid were signed on behalf of Gainlove by a director. I allowed evidence to be given also by Mr. Baker that on 17 July judgment was entered against Mrs. Brown by Mr. and Mrs. Kelly in default of entry of appearance in the amount of $20,000 to $25,000. It was submitted for the respondent that I should not consider further the applications on behalf of the former Gainlove Pty. Ltd., and that Mrs. Brown had no interest in bills which had been wholly paid by Gainlove Pty. Ltd. from its moneys. For Mrs. Brown, it was contended that the application before me by Gainlove Pty. Ltd. was property which vested in the Australian Securities Commission pursuant to s. 57 6 of the Corporations Law, and that if Gainlove Pty. Ltd. was re-registered, the property -- 8 of 11 -- 8 would revest in a it as if it had never been deregistered. An application was made for an adjournment, if necessary, to seek re-registration of Gainlove Pty~ Ltd. The first question for consideration is whether, after the dissolution of Gainlove Pty. Ltd., there remains outstanding property of the company in the form of a claim to obtain an order for taxation of a bill of costs or delivery of a bill of costs. The word "property" is defined in s. 9 of the Corporations Law to mean any legal or equitable estate or interest (whether O present or future and whether vested or contingent) in real or personal property of any description and includes a thing in action. It was suggested that such a claim was a thing in 0 action. A right of action in contract or tort is a thing in action: See Curtis v. Wilcox [1948] 2 K.B. 474, but I am unable to accept that a claim to have an order made for delivery of a bill as a result of which a person may have a less liability in respect of legal services upon taxation of a bill is property. 0 I reject the application for an adjournment, as it is uncertain whether or when an application for re-registration will be made or how such an application will fare. It appears that the authorities authorising withdrawals from funds held in the trust account of the respondent solicitor were signed by directors of Gainlove Pty. Ltd. They authorised the solicitor to make a payment to himself from his trust account of professional costs and other proper outlays. In relation to the bills other than the Kelly bills (that is, the bills being exs. 1MB1, 2, 3, 7, 8, 9 and 10 to Mrs. Brown's affidavit), I have come to the conclusion that these are 0 -- 9 of 11 -- 9 not bills for the purposes of s. 22 of the Costs Act. They are essentially claims for lump sums in respect of matters dealt with by the respondent on behalf of the applicants, without the allocation of costs to particular actions taken by the respondent, together with a statement of outlays. They are bills of the kind which Douglas J. said in Currie v. Robinson [1968] Q.W.N. 25 were not bills of costs contemplated by s. 22. The criterion as stated in Re Walsh Halligan Douglas' Bills of Costs [1990] 1 Qd.R. 288 is that the bill must sufficiently particularise the charges to enable the client to take informed advice as to whether he should demand taxation. I do not think that the summaries noted as part of the bills is sufficient to make them bills for the purposes of s. 22. If there is no bill, as I have held, payment in discharge of any liability on the bills does not preclude a client from seeking delivery of a bill. I consider therefore that Mrs. Brown \ is prima facie entitled to an order that the respondent deliver bills in taxable form to her in respect of any fees charges or disbursements which he claims are chargeable to her personally in respect of the matters being exs. 1MB1, 2, 3, 7, 8, 9 and 10 to Mrs. Brown's affidavit filed on 12 June, 1992. Such an order would however appear to be pointless in the circumstances of this case where the moneys have been paid not by her but pursuant to authorisations given by the now deregistered company, Gainlove Pty. Ltd. Accordingly, I refuse to make such an order. In relation to the Kelly bills, I consider that for the reasons stated by counsel for the applicant I should refer those bills to be settled and taxed by the taxing officer. I direct -- 10 of 11 -- 10 however that the order be discharged if Mrs. Brown does not obtain an·appointment to tax within 14 days. I order that John Alexander Baker ·be restrained from prosecuting District Court Action No. 1135 of 1992 until further order. I shall hear submissions on the form of the orders and on the question of costs. 0 0 0 0 -- 11 of 11 --