Allen v Ruddy Tomlins & Baxter

Case [2019] QCA 103

SUPREME COURT OF QUEENSLAND

CITATION:

Allen v Ruddy Tomlins & Baxter [2019] QCA 103

PARTIES:

KIM MARIE ALLEN
(applicant)
v
RUDDY TOMLINS & BAXTER
(respondent)

FILE NO/S:

Appeal No 3998 of 2018
DC No 367 of 2008

DIVISION:

Court of Appeal

PROCEEDING:

Application for Leave s 118 DCA (Civil)

ORIGINATING COURT:

District Court at Townsville – Unreported: 21 March 2018 (Durward SC DCJ)

DELIVERED ON:

28 May 2019

DELIVERED AT:

Brisbane

HEARING DATE:

10 September 2018

JUDGES:

Philippides and McMurdo JJA and Henry J

ORDERS:

1.   The application for leave to appeal be granted.

2.   The appeal be allowed.

3.   The order of 21 March 2018 be set aside.

4.   The parties provide written submissions as to costs within 21 days of the date of these orders.

CATCHWORDS:

STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – GENERAL APPROACHES TO INTERPRETATION – GENERALLY – where the applicant client and the respondent, a firm of solicitors, entered into a costs agreement in August 2005, which was terminated in August 2007 – where the applicant objected to the respondent’s bill of costs and applied for a costs assessment under the Legal Profession Act 2007 (Qld) s 335(1) – where the costs assessor filed an “interim decision” in the District Court in March 2009, and subsequently a Costs Assessor’s Certificate in July 2017 – where the registrar made orders pursuant to that certificate in 2017 – where the respondent submitted that the Legal Profession Act 2007 (Qld) and the Uniform Civil Procedure Rules 1999 (Qld) gave rise to an independent “codified regime for the quantification and recovery of legal costs between a law practice and client” that exists outside the ambit of the regime under the LAA, such that it was not time barred from claiming its costs from the applicant – whether the respondent was time barred from claiming its costs from the applicant

Legal Profession Act 2007 (Qld), s 3, s 299, s 316, s 326, s 335, s 337, s 338
Limitation of Actions Act 1974 (Qld), s 10
Uniform Civil Procedure Rules 1999 (Qld), r 743G, r 743H

Coshott v Barry [2012] NSWSC 850, considered
Edwards v Bray [2011] 2 Qd R 310; [2011] QCA 72, considered
Footscray City College v Ruzicka (2007) 16 VR 498; [2007] VSCA 136, cited
Preston v Nikolaidis [2017] NSWSC 1527, considered

COUNSEL:

S Hartwell for the applicant
R B Dickson for the respondent

SOLICITORS:

Corporate First Lawyers for the applicant
CBC Lawyers for the respondent

PHILIPPIDES JA:

The application

  1. The applicant, Kim Allen, brought an application pursuant to s 118(3) of the District Court of Queensland Act 1967 (Qld) (DCA) for leave to appeal against orders made on 21 March 2018 by Durward DCJ that the respondent, Ruddy Tomlins & Baxter, a firm of solicitors, was not barred by operation of the Limitation of Actions Act 1974 (Qld) (LAA) from recovering its legal costs from the applicant. If leave to appeal is granted, the applicant seeks…

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AGLC
Allen v Ruddy Tomlins & Baxter [2019] QCA 103
Case
[2019] QCA 103
Decision Date

CaseChat Overview and Summary

In the matter of Allen v Ruddy Tomlins & Baxter, the applicant, who had entered into a costs agreement with the respondent, a firm of solicitors, in August 2005, objected to the respondent’s bill of costs and applied for a costs assessment under the Legal Profession Act 2007 (Qld) s 335(1). The primary issue the court was required to decide was whether the respondent was time barred from claiming its costs from the applicant under the Limitation Act 1986 (Qld). Specifically, the court had to determine whether the combined provisions of the Legal Profession Act 2007 (Qld) and the Uniform Civil Procedure Rules 1999 (Qld) gave rise to an independent "codified regime for the quantification and recovery of legal costs between a law practice and client" that existed outside the ambit of the regime under the Limitation Act 1986 (Qld). The court’s reasoning and outcome revolved around the interpretation of the relevant statutes and their legislative purposes. The court found that the statutory provisions provided a procedural mechanism for the resolution of quantum and the enforcement of the right to recover legal fees, rather than establishing a separate statutory cause of action. Consequently, the court concluded that the underlying cause of action remained contractual, and an application for assessment under the Legal Profession Act 2007 (Qld) was not an "action" for the purposes of the Limitation Act 1986 (Qld). Therefore, the appeal was allowed, and the order of 21 March 2018 was set aside.

This case highlights the importance of correctly interpreting statutory provisions and understanding the relationship between different legal regimes. In this instance, the court found that the Legal Profession Act 2007 (Qld) and the Uniform Civil Procedure Rules 1999 (Qld) did not establish a separate statutory cause of action for the recovery of legal costs, and therefore, the limitation period under the Limitation Act 1986 (Qld) applied to the respondent’s claim. This decision underscores the need for careful consideration of the legislative purpose and the interplay between different legal regimes when determining whether a statutory provision creates a separate cause of action.

Orders

Orders of the court

1. The application for leave to appeal be granted.

2. The appeal be allowed.

3. The order of 21 March 2018 be set aside.

4. The parties provide written submissions as to costs within 21 days of the date of these orders.

Background

Background to the litigation

The notice of appeal thus raises whether the combined provisions of the LPA and UCPR give rise to an independent “codified regime for the quantification and recovery of legal costs between a law practice and client” that exists outside the ambit of the regime under the LAA.Factual background On 19 August 2005, the applicant and the respondent entered into a costs agreement. In August 2007, the applicant terminated the respondent’s retainer. On 30 August 2007, the applicant received a letter from the respondent requesting signed acknowledgement that the applicant owed $145,000 to the respondent for fees and costs. In September 2007, the applicant requested that the respondent send an itemised bill. On 20 March 2008, the respondent sent an itemised costs statement in the sum of $145,180 (also enclosing a notice that it ceased to act for the applicant). On 26 August 2008, the applicant objected to the respondent’s bill and, on 26 September 2008, she filed an application for a costs assessment. On 20 October 2008, by consent orders, it was ordered that a costs assessor be appointed to conduct the costs assessment according to the provisions of the UCPR and, by para 10 of those orders, that the costs certificate issued by the costs assessor “be filed in the Court within seven days of the completion of the assessment and upon filing will take effect as an order of the Court”. On 26 November 2008, the respondent provided the costs assessor’s response to the applicant’s objections and purported to submit an amended revised bill in the amount of $139,822.12. On 7 December 2008, the applicant emailed the costs assessor, enclosing the applicant’s rebuttal response to the costs assessor’s response. The costs assessor subsequently requested further information from the parties. On 9 March 2009, the costs assessor filed an “interim decision” in the District Court. Thereafter, some eight years later on 21 July 2017, the costs assessor filed a Costs Assessor’s Certificate in the amount of $83,031.62. On 12 October 2017, the registrar made orders for costs pursuant to the certificate. On 6 November 2017, the applicant filed an application to set aside the order of 12 October 2017 and for a permanent stay of proceedings. In the alternative, an extension of time was sought in which to seek a review of the costs assessor’s decision. On 10 November 2017, the parties signed consent orders setting aside the orders of 12 October 2017.[1][1]That consent order was not filed but the parties have proceeded as if it had been and the primary judge referred to the consent order as having been set aside (AB2 at 808). Transcript 1-6.15. An application for directions under r 743H of the UCPR was brought before the primary judge. At the hearing of the application, the parties agreed that the primary judge should determine, as a preliminary issue, whether the limitation period in s 10(1)(a) of the LAA applied to preclude the recovery of the assessed costs. His Honour proceeded accordingly.The decision at first instanceThe submissions at first instance

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

An application for directions under r 743H of the UCPR was brought before the primary judge. At the hearing of the application, the parties agreed that the primary judge should determine, as a preliminary issue, whether the limitation period in s 10(1)(a) of the LAA applied to preclude the recovery of the assessed costs. His Honour proceeded accordingly.The decision at first instanceThe submissions at first instance The respective positions of the parties before the primary judge largely reflect the arguments put before this Court. The applicant’s submissions centred on the decision in Edwards v Bray,[2] where consideration was given to the application of s 10(1)(d) of the LAA to the regime then operative for the assessment of legal costs under the Queensland Law Society Act 1952 (QLS Act). The applicant’s arguments were summarised succinctly by the primary judge as being that:[3]“… the relationship between a solicitor and the client is contractual and the Cost Assessor’s Certificate does not create a right to recover professional fees and outlays independent of that contract; that s 10(1)(a) of the [LAA] applies (an action founded on simple contract shall not be brought after the expiration of six years from the date on which that cause of action arose) and the cause of action arises when the work is completed or the solicitor’s retainer is terminated. Whilst the respondent had applied to the court for an assessment and one was conducted under the [LPA], it is not an ‘action’ for the purposes of the LAA: it is a mere procedural mechanism for resolution of the quantum and subsequent enforcement of the right to recover legal fees when there are no other issues in dispute. [The applicant] submitted that the Court was not bound to enter judgment in the amount of the Costs Assessor Certificate or at all; and it is the underlying right and title to the debt per se and not the cost assessment process, which is the subject of the limitation period. In this case there has been no acknowledgement of the debt or part payment made by the applicant in respect of the assessed costs.”[2][2011] 2 Qd R 310.[3]Reasons at [7]. The primary judge summarised the respondent’s argument that the applicant’s submissions overlooked the terms of para 10 of the 2008 orders made in accordance with Practice Direction 7 of 2007 and, additionally, that:[4]“Under rule 743 UCPR et seq. there is a new regime which fulfils the purposes said to be absent … in Edwards v Bray, particularly rule 743H UCPR which provides for the giving of judgment upon a Certificate. [The respondent] also referred to the second reading speech by the Minister on 19 April 2007 for the Legal Profession Bill 2007 which shows the intention of Parliament to set out a new compact for recovery of costs by a legal practice, including the restriction on the ability of a legal practice to start proceedings for the recovery of legal costs. He said that there is now a new compact is also clear from the relevant Explanatory Notes to the LPA.”[4]Reasons at [8].The primary judge’s findings

Ratio Decidendi

Legal Principle Established

In support of its reliance on Edwards, the applicant submitted that the conclusion reached in that case accorded with the approach of the Supreme Court of New South Wales in Coshott v Barry[31] and Preston v Nikolaidis[32] in respect of a similar scheme for costs assessment in the Legal Profession Act 1987 (NSW). The respondent argued that Coshott ought to be distinguished as it concerned New South Wales legislation that differed from the LPA. Similarly, Preston was said not to be of assistance as it concerned New South Wales legislation that was repealed in 1992.[31][2012] NSWSC 850.[32][2017] NSWSC 1527.Consideration The starting point in the construction of the provisions of the LPA is a consideration of the LPA’s legislative purpose. An interpretation which will best achieve the legislative purpose of the LPA is to be preferred to any other.[33] There is nothing in the purposes stated in s 3 or in s 299 of the LPA which support an interpretation of Ch 3 Pt 3.4 of the LPA as being directed to the establishment of a separate statutory cause of action for the recovery of costs. Chapter 3, Pt 3.4 of the LPA is not expressed to provide alone, or in combination with the provisions of the UCPR, a code for the recovery of costs outside the application of the LAA. Nor do the provisions of the LPA expressly indicate that the broadening of the costs assessment procedure to allow a legal practitioner also to bring a costs assessment application was intended to provide an alternative cause of action to that founded in contract.[33]Acts Interpretation Act 1954 (Qld), s 14A. I am not persuaded that ambiguity arises as to the legislative intention of the LPA such that regard should be had to extrinsic evidence. While it is the case, as the primary judge observed, that a law firm is no longer confined to applying to the court to commence a proceeding to recover costs, and may itself initiate the costs assessment procedure under Div 7 of Pt 4, the procedure set up under the LPA remains premised on the underlying contractual relationship resulting from a costs agreement. Indeed, the LPA states as much by recognising, in s 326, that subject to the provisions of the LPA, a costs agreement may be enforced in the same way as any other agreement. In my view, the primary judge erred in his interpretation of the introduction of an entitlement of a law firm to bring a costs assessment application that may result in a certificate and ultimately a judgment. The costs application scheme introduced by the LPA remains of an administrative nature. The costs assessment provisions of the LPA and the UCPR do no more than provide a procedural mechanism for the resolution of quantum and then enforcement of the right to recover legal fees, where there are no other issues in dispute. Where such issues arise directions may be made on the relisting of the application. The conclusion in Edwards remains relevant. While there are two avenues to judgment, one being by bringing a proceeding for moneys owing pursuant to the terminated retainer, and the other being by an assessment application, the underlying cause of action is contractual. It follows that an application to the court for assessment under the LPA is not an “action” for the purposes of the LAA. It is not surprising therefore that no period of limitation is provided as to the bringing of such an application. The failure to specify any time period in the LPA or the UCPR does not oust the operation of the LAA. Nor does this result in any injustice to the respondent. As observed in Edwards, the respondent could have protected its position by seeking leave to commence proceedings prior to the limitation period expiring pursuant to s 328 of the LPA.