Aulich Civil Law Pty Ltd ACN 155 746 777 v Hurst-Meyers (Civil Dispute)
[2020] ACAT 26
•21 April 2020
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
AULICH CIVIL LAW PTY LTD ACN 155 746 777 v HURST-MEYERS (Civil Dispute) [2020] ACAT 26
XD 694/2019
Catchwords: CIVIL DISPUTE – claim for unpaid legal costs relating to conduct of litigation – whether written offer to enter into costs agreement accepted by conduct – whether fees chargeable by solicitors were subject to a cap – whether fees could not exceed cap without prior written authorisation – whether all work done was properly chargeable – claim for costs allowed in full – whether solicitors negligent in giving advice in relation to proceeding in which client was successful – whether costs paid to solicitor wholly wasted – error in formulating grounds of originating application established – loss not established – quantum of damages not established – jurisdiction to make a costs order under section 48(2) of the ACAT Act not established
Legislation cited: ACT Civil and Administrative Tribunal Act 2008 s 48
Civil Law (Property) Act 2006 s 201
Law Reform (Miscellaneous Provisions) Act 1955 (repealed) s 51
Legal Profession Act 2006 s 282
Cases cited:CIC Australia Ltd v ACT Planning and Land Authority and Ors [2013] ACTSC 96
Director-General Community Services Directorate v HJ [2018] ACTSC 6
GJ v AS (no 4) [2017] ACTCA 7
Hurst-Meyers v Public Trustee and Guardian for the ACT [2018] ACTSC 61
Smith v J&C Whyte Family Trust & Anor [2016] ACAT 132
Williams Love & Nicol Lawyers Pty Ltd v Wearne [2016] ACAT 123
Tribunal:Presidential Member G McCarthy
Senior Member M Orlov
Date of Orders: 21 April 2020
Date of Reasons for Decision: 21 April 2020
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) XD 694/2019
BETWEEN:
AULICH CIVIL LAW PTY LTD ACN 155 746 777
Applicant
AND:
RALPH HURST-MEYERS
Respondent
TRIBUNAL:Presidential Member G McCarthy
Senior Member M Orlov
DATE:21 April 2020
ORDER
The Tribunal orders that:
1.The respondent pay the sum of $24,258.32 to the applicant within 28 days.
2.The respondent’s counterclaim is dismissed.
3.The applicant’s application for an order for costs is dismissed.
…………………………………..
Presidential Member G McCarthy
For and on behalf of the Tribunal
REASONS FOR DECISION
Synopsis
1.This proceeding concerned a dispute over fees between the applicant, a firm of solicitors and the respondent, a former client of the firm. The applicant provided legal services to the respondent in connection with a proceeding in the ACT Supreme Court, in which the respondent sought a declaration that the Public Trustee and Guardian (Public Trustee) held a property in Fisher, registered in the name of the respondent’s mother, Eileen Hurst-Meyers (Mrs Hurst-Myers), on an express trust for the respondent. The applicant’s retainer commenced on 25 November 2016 and terminated on 19 June 2017 when the respondent failed to make satisfactory arrangements for payment of outstanding fees. The respondent represented himself at the hearing before McWilliam AsJ on 12 December 2017 and 2 February 2018 and was successful.[1]
[1] Hurst-Meyers v Public Trustee and Guardian for the ACT [2018] ACTSC 61
2.The applicant claimed payment of unpaid fees for legal services, enforcement costs, interest and an order pursuant to section 48(2) of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act) that the respondent pay the applicant’s costs of the application.
3.The respondent resisted the applicant’s claim on the grounds that he gave the applicant express instructions to ‘cap’ his fees at $20,000 (plus GST and disbursements), and not to exceed the cap without his prior written authorisation. The respondent contended that where he has paid the applicant $20,000 (plus GST and disbursements) and never gave authorisation for the applicant to exceed the cap, he is not liable to pay the applicant’s fees in excess of the cap, which are the subject of the applicant’s claim.
4.The respondent also counterclaimed for repayment of $20,940.50, being the amount the respondent paid to the applicant for professional fees and disbursements, on the grounds that the applicant gave him negligent advice in relation to the conduct of the Supreme Court proceeding and his prospects of success in that proceeding.
5.For the reasons that follow, the applicant’s claim for payment of fees, enforcement costs and interest succeed, the respondent’s counterclaim fails and the applicant’s application for a cost order against the respondent fails.
The issues raised by the claim and counterclaim
6.It is common ground that the applicant made four separate written offers to enter into a costs agreement with the respondent between 25 November and 12 December 2016. The respondent accepted the offers made on 25 and 29 November 2016 by signing the offer documents. The respondent did not sign either of the offers made on 9 and 12 December 2016.
7.The applicant contended that the respondent accepted either or both of the offers made in December 2016, by conduct, and is therefore liable for the full amount of the applicant’s claim.
8.The respondent’s answer was that, even if he accepted either of the December offers by conduct, which he denies, the applicant exceeded its instructions by incurring professional costs of more than $20,000 without the respondent’s prior written authorisation.
9.With respect to the respondent’s counterclaim, the first issue was whether, in light of the respondent’s instructions and circumstances known by the applicant at relevant times, the applicant failed to exercise reasonable care and skill when giving advice to the respondent regarding his claim that the Fisher property was held on an express trust for him, the evidence necessary to prove his claim and his prospects of success.
10.If we found for the respondent on the first issue, the next issue was whether the respondent suffered any loss, and if so, how much, as a result of the applicant’s advice. Although the respondent did not articulate this expressly, the respondent claimed that the costs he paid to the applicant ($20,940.50) were entirely wasted or unnecessary.
11.Consideration of these issues necessarily invited close attention to the parties’ conduct towards each other during the course of the retainer in particular, the content of their written and, to a lesser extent, oral communications at relevant times, which were extensive. All documents upon which either party relied were tendered without objection.
Background
12.On 25 November 2016, the respondent contacted the applicant seeking urgent advice in relation to an application to the Supreme Court for a declaration that a property in Fisher, of which the respondent’s mother was the registered owner, was held on trust for the respondent. The initial consultation was by telephone with Mr Douglas Dawson, an employed solicitor of the applicant (the solicitor). The solicitor’s file note of his telephone attendances on the respondent that day was in evidence.[2] The respondent’s instructions included that his mother suffered from dementia, as a result of which the Public Trustee had been appointed as his mother’s guardian and manager, and that the Public Trustee had said that it would not oppose the application.
[2] Exhibit A3 Tab 1
13.On 25 November 2016, the applicant made the first of four written offers to enter into a costs agreement with the respondent.[3] As all of the offers were made on identical terms, except in respects that we identify later in these reasons, it is convenient to refer to the material terms of the first offer, which were as follows:
This and the following 8 pages is an offer by us to you pursuant to the Legal Profession Act 2006 (ACT) (“the Act”) to enter into a costs agreement. If accepted by you, this offer will set out the agreement between you and us as to how our legal costs (made up of our professional charges and our disbursements) are to be calculated and paid plus the additional charges if our legal costs are not paid on time.
You may accept this offer either by signing and returning this document (or a copy of this document) to us, or by giving or continuing to give us your instructions in this matter after you receive this offer – in which case you will be deemed to have accepted the terms of this offer.
If this offer is accepted by you, it will become a costs agreement which may be enforced in the same way as any other contract, subject to the provisions of the Act. [our emphasis]
[3] Exhibit R8 Tab 2
14.Under a heading ‘Acceptance of Costs Agreement’ the offer stated:
By signing this agreement, you acknowledge that you have read, understood and agreed to be legally bound by this agreement including the following 7 pages. You have authority from all directors where signing on behalf of a corporation.
You expressly authorise us to deal with trust monies in accordance with clause 2.
15.Clause 2 of the Terms of Engagement, which formed part of the offer, stated:
Should we receive money into our trust account on your behalf:
(i) You direct us to withdraw from that money (if applicable) any amounts required to pay disbursements in advance, and
(ii) You authorise us to immediately withdraw from that money any amounts owing for our professional charges and/or disbursements in this matter, and for which we have given or sent you a request for payment including without limitation a tax invoice.
16.Clause 9 of the Terms of Engagement, included, relevantly:
If you…fail to pay any of our costs within 30 days of our giving you a bill of costs for same…you agree that we may at our discretion decide not to continue to perform any further work on your matter until:
(a) Our costs are paid…or
(b) Satisfactory alternative arrangements have been entered into for the payment of our costs…
…
You also agree that we will not be liable for any loss, damage, disadvantage or harm that you may suffer as a result of us deciding not to continue to perform any further work on your matter in accordance with this clause.
17.Clause 10 of the Terms of Engagement, stated:
Our payment terms are strictly 14 days. If you do not pay our professional charges and/or disbursements within 30 days of our giving you an invoice you agree to pay the Late Payment Fee. The Late Payment Fee is $2000 including GST. This has been calculated based on our usual administrative and staffing costs in seeking payment of the outstanding invoices, the costs to us of issuing a letter of demand and preparing and issuing proceedings against You. [Original emphasis]
18.Clause 12 of the Terms of Engagement provided for interest on amounts that remained unpaid after 30 days to be charged at the rate prescribed from time to time under the Court Procedures Rules 2006, Schedule 2, Part 2.2, Table 2.3.
19.The ‘Matter Title’ for the first offer was “Advise on trust declaration and property transfer” and the ‘Work to be done’ was described as follows:
The work we have been instructed to do is:
(a) Review documents provided; and
(b) Advise in conference.
20.The offer gave an initial cost estimate of $1,500-$2,000 plus GST and disbursements. It requested that the respondent deposit $1,000 into the applicant’s trust account by 29 November 2016. The respondent did so on 25 November 2016.[4]
[4] Exhibit R8 Tab 15
21.The respondent accepted the offer on 28 November 2016 by signing the agreement (first costs agreement).[5]
[5] Exhibit R8 Tab 2
22.On 29 November 2016 at 10:00 am, the respondent, his former wife, Liza Hurst-Meyers, and the respondent’s mother, Mrs Hurst-Meyers, attended a conference with the solicitor and a senior associate of the firm, Erin Taylor. The solicitor’s file note of the conference was in evidence.[6] The file note evidences that the respondent gave further instructions with respect to the factual background and that Ms Taylor gave advice recommending that the firm write to the Public Trustee, setting out the relevant circumstances and inviting the Public Trustee to consent to the transfer of the property to the respondent without the need for an application to the Supreme Court.
[6] Exhibit A3 Tab 2
23.On 29 November 2016, the applicant made a written offer to enter into a second costs agreement with the respondent.[7] The offer described the ‘Work to be done’ as follows:
The work we have been instructed to do is:
(a) Prepare brief to counsel;
(b) Correspond with the Public Trustee;
(c) Draft originating application; and
(d) Appear in the ACT Supreme Court (if necessary).
[7] Exhibit R8, Tab 6
24.The offer gave a revised cost estimate of $10,000-$20,000 plus GST and disbursements and requested that the respondent deposit a further $9,000 into the applicant’s trust account by 2 December 2016. The respondent did so on 29 November 2016.[8]
[8] Exhibit R8, Tab 15
25.The respondent accepted the offer on 29 November 2016 by signing the agreement (second costs agreement).
26.The applicant wrote to the Public Trustee on 30 November 2016, explaining the reasons for the creation of the trust, noting that in previous communications the Public Trustee appeared to accept that the property was held on trust for the respondent, and inviting the Public Trustee to execute a transfer of the property to the respondent.[9] Included with the letter was a copy of an affidavit sworn by the respondent’s mother, Eileen Hurst-Meyers, on 2 October 2008 in an earlier proceeding in the ACT Supreme Court under the Family Provision Act 1969. Among other things, the letter drew specific attention to the contents of paragraph 7.2 of the affidavit, in which Mrs Hurst-Meyers said the following with respect to the status of the property in Fisher: [10]
This property was purchased in my name in 1998 but beneficially belongs to my son Ralph. At my son’s request I bought this property in my name but he provided the money. Ralph has lived in this property since it was purchased. The mortgage and other expenses relating to this property are and have been paid for out of my accounts but Ralph has and continues to reimburse me these expenses. There is a mortgage of not more than $99,000 on this property.
[9] Exhibit A3, Tab 3
[10] Exhibit R3
27.The Public Trustee was not persuaded by the letter. As a result, on 5 December 2016 the applicant caused an originating application[11] and supporting affidavits, including the above mentioned affidavit of Mrs Hurst-Meyers, to be filed in the Supreme Court, seeking a declaration that the Fisher property was held on an express trust for the respondent as sole beneficiary.
[11] Exhibit A5
28.On 6 December 2016, the respondent deposited $5,000 into the applicant’s trust account, bringing the balance up to $15,000.
29.At 4:52pm on 7 December 2016, the respondent’s counsel sent an email to the solicitor, commenting on deficiencies in the plaintiff’s evidence and advising that the matter should not proceed the next day, which was the first return date of the originating application. After referring to the lack of corroborative documentary evidence, counsel advised:[12]
There is also evidence that after Mrs Hurst-Meyers de facto husband dies (sic) in 2008, she used the proceeds of his estate to pay out the balance of the mortgage on the Fisher house, which was about $99,000. This turn of events gives rise to some difficulty, as there is no direct evidence that this payment was a gift to the plaintiff or rather a contribution by Mrs Hurst- Meyers that may diminish the proportion of the value of the property that may be attributed to the plaintiff.
I understand that there is some possibility that Mrs Hurst-Meyers (sic) solicitor from 2008, Margaret Reid, may be able to provide an affidavit that would assist in proving the matters set out in Mrs Hurst-Meyers 2008 affidavit, as well as in relation to the nature of the $99,000 payment. I also understand that Mr Whybrow, barrister, may also be able to assist with an affidavit.
It is my advice that the matter should not go forward without the evidence of Ms Reid and Mr Whybrow. I note, however, that Mr Whybrow was originally briefed to appear. Of course, if he becomes a material witness in the case he will not be able to do so.
In my view, corroborative evidence from each of those lawyers will be crucial to establishing that the terms of the trust was such that the whole of the Fisher house was to be held beneficially for the plaintiff. It seems to me that if such evidence can be obtained relatively quickly, it will help to reduce the risk that the court determine that the value of the plaintiff’s interest is as little as 10% of the value of the Fisher home.
[12] Exhibit R8, tab 7
30.At 5:39pm on 7 December 2016, the solicitor forwarded counsel’s advice to the respondent, adding:
There is a risk that the Court will find only a portion of the Property is beneficially owned by you on the current evidence.
Jamie would like both Margaret’s and Steve’s evidence before proceeding.
I have discussed with Jamie the possibility of adjourning the application if any issue arises. He advised that is a possibility.
Jamie and I would like to meet with you tomorrow morning at 9am. Please meet me at my office at 8:55am and we will go to Jamie’s office together.[13]
[13] Exhibit R8 Tab 7
31.At 11:44am on 8 December 2016, the solicitor emailed a copy of counsel’s costs agreement to the respondent, noting that the estimate was $5,000 plus GST, and requesting that the respondent confirm his agreement to pay counsel’s fees.[14] The solicitor noted:
I have spoken to Phelps Reid. Margaret is willing to provide an affidavit, however she will charge at her hourly rate for work completed ($480 plus GST).
I do not anticipate this will exceed an hour of her time. Please confirm you are willing to proceed and obtain the affidavit from Margaret based on her fees.
I need to note our fees with you as well. Our fees invoiced so far are $5823.50 and the time not invoiced to date (that will be chargeable) totals $9115.00.
Together with Counsel’s fees (which is a disbursement not included in our estimate) that totals approximately $20,000.00.
I estimate that our fees from this time to completion of the matter will be $5000.00 to $8000.00. I note that should the remaining fees exceed $5000.00 then the fees will exceed my initial estimate.
I do note, however, that I did not anticipated (sic) the further work required to ensure the evidence in your matter is sufficient.
I think it best I raise this with you sooner rather than later so that you are aware of the state of play.
Please give me a ring if you wish to discuss.
[14] Exhibit R8 Tab 9, 10 (Exhibit A2, Tab 2.1)
32.At 11:52am on 8 December 2016, the respondent telephoned the solicitor. The solicitor’s file note records the following:[15]
R – Fees – Cap at $21,000 – If gets close then please advise so I can re-assess – Aulich’s fees – Disbursement on top.
DD – ok – will do - …expect to be another $5K - $8K.
[15] Exhibit A2 Tab 3.3
33.At 12:00pm on 8 December 2016, the solicitor sent an email to the respondent, confirming his understanding of the respondent’s instructions:[16]
As discussed, and for clarity, please confirm:
1. You would like me to continue work and advise when our fees are approaching $21,000; and
2. You agree to Counsel fees of $5,000.
These are separate fees, which means the fees will total $26,000.
[16] Exhibit R8 Tab 9 (Exhibit A2, tab 2.2)
34.At 12:04pm on 8 December 2016, the respondent replied by email:[17]
I meant please notify me when the total chargeable fees for both you and Jamie reach $21,000, and if this needs to be exceeded, please seek written authorisation.
[17] Exhibit R8 Tab 9 (Exhibit A2, tab 2.3)
35.At 12:13pm on 8 December 2016, the solicitor replied by email:[18]
Thank you for clarifying, Ralph.
My fees are currently at $15,000.
Counsel’s fees will be in the vicinity of $5,000 plus GST. I am unaware of Counsel’s current fees to date. However, it is vitally important that Counsel is retained in this matter. I recommend that you proceed with Jamie Ronald based on the $5,000 estimate.
Therefore, it will only take another, approximately, $1,000 of my time to reach $21,000 (My fees plus Counsel fees).
I anticipate a further $5,000 to $8,000 for my fees. This will mean the total cost of the matter will be in the vicinity of $25,000 to $28,000.
I note the cost estimate provided ($10,000 to $20,000) was only for my fees. Counsel fees were in addition to this estimate. My fees should therefore be approximately the same as the upper end of the original estimate.
Please confirm if you wish to continue, noting that Counsel and my fees will exceed $21,000. [original emphasis]
[18] Exhibit R8 Tab 9 (Exhibit A2, tab 2.4)
36.At 12:33pm on 8 December 2016, the respondent replied by email:[19]
I have to set the standing limit at $25,000 total. Please advise that this is enough funds to complete the matter next week and that you are confident that you can run the hearing next Tuesday and aim for a conclusion based on this limit. There may be scope for an additional 2 to 3 grand but I’d like to have that in reserve. So let’s agree that you are confident that we can complete this process for $25,000 total with the total upper limit being $28,000.
I will transfer another $5000 into your Trust account which should total $20,000 to date. When you near this I’ll transfer the final $5,000 next week.
[19] Exhibit R8 Tab 9
37.A file note prepared by the solicitor records his attendance on the respondent at 12:52pm on 8 December 2016, although it is not clear whether the attendance was by telephone and, if so, who initiated the call. Viewed in the context of the other communications that day, we infer that the file note is of a telephone call from the respondent to the solicitor. The file note records the following communications:[20]
R – Got my email – Can do $25,000 & at most $28K.
R – Confident it can be done by next week?
Possibly – if the evidence is sufficient – if PT fight maybe not.
[20] Exhibit A2 Tab 3.4
38.We infer that the respondent was seeking the solicitor’s agreement to the proposal he put in his email sent 20 minutes earlier about fees and a “total upper limit” of $28,000. It is apparent from the file note that the solicitor did not agree that the matter could be “done” in the following week or to the $28,000 cap: all would depend on whether the Public Trustee opposed the application.
39.At 2:54pm on 8 December 2016, the solicitor reported to the respondent about the outcome of his appearance at 2:00 pm before Penfold J, which was the first return of the originating application. The file note records that Penfold J was “not happy” and did not consider the matter to be urgent.[21] We infer from the solicitor’s file note that the Public Trustee gave late notice of its intention to oppose the application and raised issues with respect to the lack of supporting documentation, particularly bank records. The file note also records, among other things, the following communications about costs and the respondent’s instructions:
R – Contain costs to $35K? DD to give costs estimate.
– evidence – DD to get Steve and Margaret.
– Ralph to get bank records.
Want to proceed – DD to send Costs Agreement – DD to look into getting PT out as Guardian.
[21] Exhibit A2 Tab 3.5
40.On 8 December 2016, the respondent deposited a further $5,000 into the applicant’s trust account, bringing the balance to $20,000.
41.At 9:03am on 9 December 2016, the applicant emailed a further written offer to enter into a costs agreement with the respondent (third costs offer).[22]
[22] Exhibit R8 Tab 11 and 12
42.The third costs offer described the ‘Work to be done’ as follows:
The work we have been instructed to do is:
Act in ACT Supreme Court proceedings to declare the existence of a trust; and
Advise generally.
43.The offer included a revised cost estimate of $30,000 plus GST and disbursements, including the work completed to date.
44.The respondent did not sign the offer. However, at 9:58am on 9 December 2016 the respondent sent an email to the solicitor which said:[23]
Because there will be no hearing next week, I want to cap the current work to the $20,000 that I have transferred to your company to date. As the $25,000 to $28,000 quoted included a hearing with the Barrister next week which will not happen now.
What I want to achieve with this in the near future is the affidavits for Margaret Reid and Steve Whybrow and within those affidavits I would like them to confirm the work they saw me do for my mother and I also want to see the affidavits before they are released to them for signing. Then set directions for the 23rd of December whilst I compile the rest of my evidence. I understand that you believe my matter will not be heard until the New Year sometime between February and April. This blows out the Caloola Farm acquisition completely. There will be financial consequences unless I can negotiate a solution.
I believe this should be pointed out to the Court so that my matter is treated as urgent if this hasn’t been done already.
If we can negotiate an agreement with the Trustee based on the new evidence then great, but if not I want to give notice that we will seek costs.
I sincerely appreciate the excellent work you have done to date, but because there will be no short term resolution, I have to apply a budget in line with my circumstances.
[23] Exhibit A2 Tab 2.5
45.At 11:58am on 9 December 2016, the solicitor telephoned the respondent. The solicitor’s file note records him telling the respondent that the Court made directions for non-party production to be completed by 23 December 2016, service of the plaintiff’s evidence by 30 January 2017 and service of the defendant’s evidence by 28 February 2017.[24] The file note records the following matters in relation to costs and the respondent’s instructions:
[24] Exhibit A2 Tab 3.6
Spoke to partner of firm
legal fees - $50K
not type of matter that costs are awarded in – DD explained in detail
R – should be able to get NAB records and City Bank records
Best case is $35K now
Worst case is $50K or more
DD – will get out detailed costs disclosure & agreement for each step
R – should we get alternate counsel? A bulldog?
DD – No – I recommend Jamie – methodical – need him
R – want to put in affidavit all my work I did for her in family case
46.At 11:19am on 12 December 2016, the applicant emailed a further offer in writing to enter into a costs agreement with the respondent (fourth costs offer).[25] The covering email described the fourth costs offer as an “updated” costs agreement, presumably to apply in substitution for the third costs offer sent three days earlier. The ‘Work to be done’ was described in identical terms.
[25] Exhibit R8 Tab 13 (Exhibit A2, Tab 2.6)
47.The fourth costs offer provided a revised cost estimate of $53,373 (excluding GST), including stated costs incurred to the date of the offer ($16,988). The cost of work going forward was estimated at $36,385 plus GST, comprising professional costs of $29,280, counsel’s fees of $5,000 and other disbursements of $2,105. The offer included a detailed cost estimate for each stage of the work to be done by the applicant up to the hearing, as follows:
Work Hours Person Cost (Excl GST) Consider and Answer Request for Particulars DD 3
LB 1DD
LB$1,050
$600Directions Hearings DD 3 DD $1,050 Issue notices for non-party productions DD 3 DD $1,050 Draft and finalise evidence DD 10 DD $3,500 Listing Hearing DD 1 DD $350 Prepare for Hearing DD 10 DD $3,500 Hearing DD 8 DD $2,800 General Correspondence with other side DD 10 DD $3,500 General Correspondence with Counsel DD 10 DD $3,500 General Correspondence with Client DD 10 DD $3,500 Plus 20% $4,800 SUB-TOTAL $29,280 ex GST 48.The solicitor stated, in the covering email forwarding the fourth costs offer:[26]
You will note page 3 has a detailed estimate of each step that must occur in the matter.
You will note the estimated costs for preparing and finalising evidence, issuing notices for non-party production and answering a request for particulars. These costs are the costs that will be incurred in the near future (prior to 30 January 2017). I have also included and [sic] estimate for general correspondence. Part of those estimates will be incurred prior to 30 January 2017. However, I do not expect a large amount of correspondence with the other side prior to 30 January 2017.
The remainder are likely to be incurred if the matter goes to hearing.
[26] Exhibit A2 Tab 2.6
49.At 2:22pm on 13 December 2016, the solicitor telephoned the respondent. The solicitor’s file note records that there was a discussion about preparation of evidence and includes the following note about costs:[27]
R – ok to costs agreement – will transfer another $6K Jan.
[27] Exhibit R4 (Exhibit A2, Tab 3.7)
50.We consider later in our reasons what significance should be given to this note.
51.On 13 December 2016, the applicant transferred $4,274.50 from its trust account into its office account in payment of the applicant’s invoice No. 9084.[28] The invoice was not in evidence, but the respondent did not dispute that he received it.
[28] Exhibit R8 Tab 15
52.At 12:09pm 19 December 2016, the solicitor updated the respondent by email on the progress of the matter, as follows:[29]
1. The Defendant[30] has issued Notices of Non-Party Production (“Notices”) to Clayton Utz; CitiGroup; and Westpac Banking Corporation. There is now no need for us to issue Notices as we will be provided the documents which are produced.
2. Margaret Reid’s affidavit is drafted, however, I will need to review Phelps Reid’s file to ensure that the way it is drafted actually represents what occurred and to ensure that I maximise the evidence in the affidavit.
3. I have asked Steve to contact me regarding details for his affidavit, however, understand he is now on leave. I will talk to him in January 2017.
There is nothing more to do until January 2017, once the documents from the Notices are provided; Margaret has returned; and Steve has returned.
I will be in touch with you in January to progress the matter. I return on 9 January 2017.
[29] Exhibit R8 Tab 14
[30] ‘The Defendant’ is a reference to the Public Trustee and Guardian, meaning the defendant in the Supreme Court Proceedings.
53.The respondent replied “Thanks mate” in an email sent at 12:51pm on 19 December 2016.[31]
[31] Exhibit R8 Tab 14
54.At 4:00pm on 19 December 2016, the applicant emailed invoice No. 9283 to the respondent. The invoice amount was $15,188.32.[32] The invoice was not in evidence, but the respondent did not dispute that he received it.
[32] Exhibit R8 Tab 15
55.At 6:00pm on 19 December 2016, the respondent instructed the applicant by email to pay the invoice out of funds held in its trust account.[33]
[33] Exhibit R8 Tab 15
56.On 20 December 2016, the applicant transferred $15,188.32 from its trust account to its office account in payment of invoice No. 9283, leaving a balance in trust of $537.18 from the total of $20,500 that the respondent had paid into the applicant’s trust account. This was confirmed by a trust ledger that the applicant emailed to the respondent at 9:06am on 20 December 2016.[34]
[34] Exhibit R8 Tab 15
57.At 3:03pm on 18 January 2017, the respondent said in an email to the solicitor:[35]
I hope you had a Merry Christmas and a good New Year. I’m still putting together the evidence and I’ll be in contact about the relatively soon. Did Margaret Reid and Stephen Whybrow also managed to generate their affidavits? Also I want to apply cost cutting measures going forward as understand a lot of the $20,000 paid to you as being used already and I don’t want to go past that amount at this stage. [Errors in original]
[35] Exhibit A2 Tab 2.7
58.At the time he sent this email, the respondent knew, or should have known from his agreement to pay the two invoices numbered 9084 and 9283 dated 13 and 20 December 2016, respectively, that the money he had paid into the applicant’s trust account was close to exhausted.
59.The next day, at 8:09am on 19 January 2017, the solicitor replied in an email:[36]
I have discussed this matter with Ben Aulich, partner, and we have agreed that we would like Whybrow back in the matter.
We both do not think an affidavit from him is absolutely necessary, however, I will discuss this with Whybrow.
Please give me a call today to discuss this.
In regard to costs, I note our costs agreement sent to you on 12 December 2016. I will be unable to limit the costs to under $20,000 to get the job done, or progress the matter much further at all. Our costs as billed to date are $16,120.00 and there is approximately $3,000 of unbilled costs.
I will, of course, be as economical as possible to limit the costs.
We can discuss this further when we speak today.
[36] Exhibit A2 Tab 2.8
60.The solicitor and the respondent did not speak by telephone that day. The next time they spoke by telephone was on 23 January 2017.[37]
[37] See particulars of professional fees in invoice 9627 – Exhibit A1, Tab (c)
61.On 19 January 2017, [38] the solicitor wrote a letter to the Public Trustee’s solicitor replying to an earlier letter from them dated 8 December 2016. The earlier letter was not in evidence. However, we infer from the tenor of the solicitor’s reply that the Public Trustee had questioned aspects of the respondent’s evidence, including, it would appear, his reliance on paragraph 7.2 of the affidavit sworn by his mother in 2008, to which we have referred earlier. The relevant parts of the solicitor’s letter are reproduced below:
3. No. Please note paragraph 7.2 of the Affidavit was filed in ACT Supreme Court proceedings 854 of 2008. We understand the Affidavit was read and relied upon. There is no suggestion that the Affidavit, in particular paragraph 7.2, was not taken entirely properly and truly reflects the wishes of the deponent. The Affidavit was sworn at a time when issues around the trust could not have been foreseeable. Further, we will rely on the contents of paragraph 1 of the affidavit of Ralph Hurst-Meyers sworn 5 December 2016. Where both parties clearly agree and swear a trust exists, it is our view affidavits from Mr Whybrow and Ms Reid are not necessary.
…
7. We refer you to paragraphs 60 and 61 of Eileen’s Affidavit,[39] which evidences Mrs Hurst-Meyers’ intention to pay the mortgage over the property. On 22 November 2010, Mrs Hurst-Meyers paid off the mortgage over the property, whilst maintaining our client had beneficial ownership of the Property. There is no evidence that decision was not made entirely of the free will of Mrs Hurst-Meyers. It was made before there is any evidence there were signs, or a diagnosis, that Mrs Hurst-Meyers’ mental capacity had diminished. With respect, it does not appear to be an issue your client needs to be concerned with.
In light of the above answers, we invite your client to make the concession the property was, and is, at all material times held on trust by Mrs Hurst- Meyers in favour of our client, and consent to an order of the Court giving effect to that arrangement. If, of course, consent by your client is forthcoming, it will significantly reduce Court time and allow the matter to be finalised in a far more efficient manner.
[38] Exhibit R8 Tab 18
[39] ‘Eileen’ is a reference to Mrs Hurst-Myers
62.On 23 January 2017, the solicitors for the Public Trustee replied by letter:[40]
Please note that our client intends to reserve its position until such time as the parties have completed their investigations and all supporting evidence has been exchanged.
[40] Exhibit R8 Tab 18
63.At 7:32am on 23 January 2017, the solicitor said in an email to the respondent:
Please call me as soon as you get this email.
Any further evidence we intend to rely on must be filed by next Monday. We may need to extend this deadline.
It is important that we speak this morning.
64.It appears from the particulars of professional fees invoiced on 31 January 2017 that the solicitor and the respondent discussed the evidence deadline on 23 January 2017, although a file note of the conversation was not in evidence.[41]
[41] Exhibit A1 Tab (c)
65.At 4:54pm on 23 January 2017, the solicitor emailed a copy of his correspondence with the Public Trustee’s solicitor to the respondent.
66.At 9:37am on 30 January 2017, the solicitor reported, in an email to the respondent, that Mr Whybrow had agreed to come back into the matter as counsel. The email attached a copy of the previous counsel’s invoice for $949.50 and requested the respondent to deposit that amount into the applicant’s trust account.[42]
[42] Exhibit R8 Tabs 18 and 19
67.On or about 31 January 2017, the applicant issued invoice No. 9627 to the respondent for the work done in January. A copy of the invoice, in the form in which it was given to the respondent, was not in evidence. Instead, the applicant tendered a copy of the invoice generated by the applicant’s accounting system, presumably at or about the time that the applicant filed its evidence in the Tribunal.[43] Although the invoice total was shown as $5,467, the balance due was shown as $18,515.32, the difference being the unpaid balance of later invoices i.e. invoices generated after the date of invoice No. 9627, which was 31 January 2017. We were informed and accept that the invoice total was correct but (for this reason) the balance due was not. As copies of all later invoices were tendered by the respondent in the form in which the applicant issued them to him, this issue arose only in relation to invoice No. 9627.
[43] Exhibit A1 Tab (c)
68.The particulars of professional fees for work done on and from 19 January to 31 January 2017[44] show that the solicitor did the following work after informing the respondent by email sent on 19 January that he was “unable to limit the costs to under $20,000 to get the job done, or progress the matter much further at all” but that he would be “as economical as possible to limit the costs”:[45]
[44] Exhibit A1 Tab (c)
[45] Exhibit A2 Tab 2.8
19/01/2017-Perusing email from Ralph, replying to email from Ralph and finalising and sending letter to Defendant.
23/01/2017-Email to Ralph re evidence deadline and telephone to Ralph re same.
23/01/2017-Review of documents produced under the notices for non-party production for relevant evidence.
23/01/2017-Perusing letter from defendant re reserve position.
24/01/2017-Telephone to Counsel and email to defendant re extending timeframe for evidence.
24/01/2017-Perusing email from Defendant re consent to amend orders, drafting consent orders, telephone from S. Whybrow re matter and email to court re consent orders.
30/01/2107-Email to Ralph re counsel fees.
30/01/2017- Letter to S. Whybrow re update on matter and providing brief.
30/01/2017-Finalising letter to Counsel and sending letter to Counsel.
31/01/2017-Drafting supplementary affidavit of Ralph and affidavit of Charmaine.
31/01/2017-Drafting chronology to assist Counsel and Court.
69.At 12:49pm on 7 February 2017, the solicitor telephoned the respondent to discuss the draft of the respondent’s supplementary affidavit. The solicitor’s file note records the following communications in relation to outstanding costs:[46]
Invoices–Ralph will have $8K within a week to pay.
…then will have access to ‘$1.5 mil” within a month – so will be no problem.
[46] Exhibit A2 Tab 3.8
70.There is no evidence that the respondent queried the invoice or asked why the solicitor had done work after advising the respondent that he would be unable to limit costs to under $20,000. To the contrary, we find that the respondent said he would have $8,000 to pay towards invoice No 9627 “within a week”. There is no dispute that he did not pay anything towards invoice No 9627, although the balance in the applicant’s trust account ($537.18) was later applied in part payment of the invoice.
71.On 1 March 2017, the applicant emailed invoice No. 9891 dated 28 February 2017 to the respondent for the work done in February and requested payment by 15 March 2017.[47] The invoice amount was $11,660.50, comprising professional fees of $5,605.00 for work done during the period 3 February to 20 February 2017, disbursements of $28 and GST of $560.50, giving an invoice total of $6,193.50, plus the outstanding balance of the previous invoice ($5,467).
[47] Exhibit R8 Tab 21
72.The particulars of professional fees show that work done between 1 and 28 February 2017 included, among other things, various communications with and attendances on the respondent. A sample follows:[48]
[48] Exhibit R8 Tab 21, pages 3-4
3/02/2017-Amending Ralph’s supplementary affidavit and emailing it to Ralph.
7/02/2017-Telephone to Ralph re supplementary affidavit.t
9/02/2017-Email to Ralph re swearing affidavit and telephone to Ralph re same.
9/02/2017-Telephone to Ralph re coming in for conference.
10/02/2017-Amending Ralph’s affidavit for today’s date for swearing and preparing for conference with client.
10/02/17-Telephone from Ralph re email to Charmayne an email to Charmayne re received prior email.
10/02/2017-Telephone from Ralph re affidavit good.
13/02/2017-Peruse and settle further amended affidavit from Ralph Hurst-Meyers.
13/02/2017-Telephone from Ralph re update.
20/02/2017-Telephone from Ralph re two further people willing to testify re Ralph works completed on property.
20/02/2017-Conference with client to swear affidavit.
73.On 2 March 2017, the respondent deposited $940.50 into trust in payment of a separate invoice for counsel’s fees emailed to him on 30 January 2017, bringing the total amount that the respondent had paid to the applicant for professional fees and disbursements to $20,940.50.
74.At 10:35am on 3 March 2017, the solicitor telephoned the respondent and, we infer, left a message that there was an amount of $11,123.32 owing for outstanding fees and that there was only $537.18 in trust. The file note records that the respondent called back at 2:44pm. The file note records the following discussion about costs: [49]
Big pay out on 21 April 2017 – earlier if possible.
[illegible] asked for accounts spoke to accounts …said there was $5K in trust.
DD – no – only $500 – Can you pay anything before 21 April 2017.
R – Not really – 21 April 17 will be able to though definitely.
DD – ok – I’ll have to talk to my partner about it – need to review D evidence & attend likely hearing before that date.
R – ok.
[49] Exhibit A2 Tab 3.9
75.In our view, it is apparent from the respondent’s statements that he was no longer seeking to cap fees at $20,000 and was seeking time to pay until 21 April 2017 when he would be getting a “big pay out”.
76.At 11:16am on 8 March 2017, the solicitor reported in an email to the respondent, that the solicitor for the Public Trustee had advised that it was not in a position to consent to the respondent’s Supreme Court application and intended to file evidence in reply by 27 March 2017. The solicitor commented to the respondent, “Unfortunately, there is nothing we can do to speed this process up now”.[50]
[50] Exhibit R8 Tab 22
77.At 3:35pm on 30 March 2017, the respondent telephoned the solicitor to discuss evidentiary matters. He did so knowing he had unpaid fees of $11,660.50. The solicitor’s file note records the following communication to the respondent about costs:[51]
DD – stop work if no (sic) paid – just putting you on notice.
[51] Exhibit A2 Tab 3.10
78.At 11:04am on Friday, 31 March 2017, the solicitor reported to the respondent by email on the outcome of a conference with Mr Whybrow of counsel earlier that day. We infer that the Public Trustee had served its evidence by then and that the solicitor and Mr Whybrow had considered it. The solicitor reported to the respondent: [52]
[52] Exhibit R2 (Ex A2, Tab 2.9)
I met with Steve this morning to discuss the evidence in your matter.
We have concerns with the evidence in your matter and given the Defendant’s evidence, if the matter were heard today, we do not think you would be successful.
The main evidence you rely on is the affidavit of Eileen sworn in 2008. This affidavit was sworn in family provision proceedings at a time that was beneficial to Eileen to assert the property was not hers. The Defendant has put on evidence that, at a time when Eileen had capacity, she made a Will asserting you would obtain her interest in Fisher only upon her passing (not as a result of a trust). There is also evidence that Eileen paid all the rates and mortgage repayments. There is no paper trail to suggest that you reimbursed Eileen for these payments.
The tenancy agreement at page 31 of the Defendant’s evidence appears to be in your handwriting. It is signed by Eileen as Lessor and you as tenant. This must be explained. This is strong evidence to suggest there was no trust.
You must provide the following urgently:
1. Your bank account statements showing regular and systematic payments to Eileen for rates and mortgage payments. It may be that you paid in cash, but there should be evidence of cash withdrawals. You cannot just provide some evidence of payments. We need everything you have.
2. An explanation of the tenancy agreement in place. It is not satisfactory to suggest it was done in error and the real intention was for a tenancy agreement between Eileen and Bianca for a separate property. Why did you draft and sign a tenancy agreement for the Fisher Property?
3. You need to provide proof (documentary evidence) that you paid for the solar panels installed at the Fisher Property. This is very important.
4. If you are unable to provide documentary evidence as above then Kim[53] will need to give evidence that accepts Fisher is held on trust by your mother for you. She would also need to address all of the matters she raised in the ACAT proceedings that suggest it is not held on trust, including the letters from Symons Phillips. Please consider contacting Kim.
We need to tip the balance back in our favour and address the above issues thoroughly. We need the trail of documents.
I have just spoken to the Defendant’s solicitor and they have agreed to allow 28 days for us to provide evidence in reply. I will seek that the orders are made by the Court on Monday.
You need to take this very seriously and provide the documents requested above, otherwise you may suffer a costs order against you and fail to establish your beneficial ownership in the Fisher Property.
I understand Steve will discuss the evidence with you later today.
[53] ‘Kim’ is a reference to the respondent’s sister
79.At 3:08pm on 31 March 2017, the solicitor informed the respondent by email that he was going to inspect the ACAT file for the proceedings in 2012 and requested the respondent to sign and date an authority to enable the solicitor to do so.[54]
[54] Exhibit R8 Tab 25
80.At 7:51am on 5 April 2017, the applicant emailed invoice No. 10203 to the respondent.[55] The balance due under the invoice was $14,467.32, comprising professional fees of $3,040 plus GST ($304), giving an invoice total of $3,344, plus the outstanding balance of previous invoices, totalling $11,123.32, reflecting the previous balance of $11,660.50 less the amount paid from the applicant’s trust account of $537.18.
[55] Exhibit R8 Tab 27
81.The particulars of professional fees show that the work done between 1 and 31 March 2017 included, among other things, the following communications with and attendances on the respondent:
6/03/2017-Telephone from Ralph re Defendant’s position.
8/03/2017-Telephone from Ralph re update and possible evidence from Defendant.
27/03/2017-Telephone from Ralph re defendant evidence.
29/03/2017-Email to client re defendant’s evidence and conference with counsel tomorrow.
31/03/2017-Email to Ralph re issues with evidence…
31/03/2017-Telephone from Ralph re evidence…
82.The solicitor wrote in the accompanying email:[56]
I note there is now a balance outstanding of $14,467.32.
Please confirm precisely when you will attend to full payment.
I note I sent an authority to access ACAT files to you on Friday. Please return that authority signed urgently. If you would like to save costs you may attend ACAT to arrange a copy of the file. This will save costs associated with me arranging this. Please confirm if you would like me to arrange a copy of the ACAT file or if you will attend to this yourself. I note it is very important that the ACAT file is obtained and I require it urgently. I do not want to leave this to the last minute.
Further, please advise how you are progressing with gathering the requested evidence. Again, it is very important that you provide all the evidence we requested. You must provide the evidence to me as soon as possible.
I note the total billed in your matter to date is $30,070.00 plus GST. My cost estimate provided to you in December estimated $53,373.00 plus GST. Depending on the breadth and detail of evidence you provide to me I note this estimate may be slightly exceeded to, say, $60,000.00 plus GST. I will, however, keep you updated on the cost estimate, as it will depend on the evidence you are able to provide to me.
Please do not hesitate to contact me if you wish to discuss. [Original emphasis]
[56] Exhibit R8 Tab 27 (Exhibit A2 Tab 2.10)
83.At 12:34pm on 5 April 2017, the respondent replied by email, instructing the solicitor to stop work:[57]
Please hold off on any more charges until I have paid the 14k out. I’ll complete the evidence including the ACAT defence and we’ll go from there. I’ll pay a lot of this, if not all in April and the rest in May.
Many thanks.
[57] Exhibit R8 Tab 27 (Exhibit A2 Tab 2.11)
84.At 12:43pm on 5 April 2017, the solicitor replied by email:[58]
I confirm I will stop work until you advise me otherwise.
This means I will not commence drafting the further evidence in reply, which is due to be filed and served on 1 May 2017.
I note the evidence may take some time to draft. So please do not leave gathering the evidence until the last minute.
The manner in which the evidence is presented is very important, and I recommend you provide instructions to me with ample time to prepare the evidence. [Original emphasis]
[58] Exhibit R8 Tab 27 (Exhibit A2 Tab 2.11)
85.At 9:32am on 11 April 2017, the solicitor said in an email to the respondent:[59]
The Defendant issued a Notice for Non-Party Production to the Kambah Medical Centre for Eileen’s medical records.
The documents have been produced to our office.
I must review the documents for evidence and also to ensure that I do not provide privileged documents to the defendant (I am compelled to provide a full copy of the documents to the Defendant).
Please confirm you are happy for me to conduct this review of documents, noting that you will incur legal fees of say, approximately $350 plus GST (1 hour of my time).
[59] Exhibit R8 Tab 27
86.At 10:10am on 12 April 2017, the respondent replied by email:[60]
I know mum [sic] full medical records as I have accompanied mum to every single medical appointment and there is no need to review this as it is all legitimate.
[60] Exhibit R8 Tab 27
87.At 10:17am on 12 April 2017, the solicitor replied by email:[61]
Unfortunately, I must review the documents and am obliged to by the Court’s rules. This is in addition to my own view, which is that I must review all the documents to ensure I am aware of any evidence the Defendant may use.
The Public Trustee is perfectly entitled to review these documents, and indeed, if I was acting for the Public Trustee, I would recommend the medical records are obtained.
If you are successful in this matter we can turn our minds to a costs order directly against the Public Trustee, but at this stage your main concern must be providing the requested evidence.
[61] Exhibit R8 Tab 27
88.At 10:52am on 12 April 2017, the respondent replied by email:[62]
Thanks for the heads up mate.
[62] Exhibit R8 Tab 27
89.At 10:13am on 19 April 2017, the respondent informed the solicitor by email that he needed more time to prepare his evidence and instructed the solicitor to request a four-week extension of the timetable.[63] Again, it is plain that the respondent continued to instruct the solicitor to perform work on his behalf, notwithstanding fees already owing.
[63] Exhibit R8 Tab 24
90.At 10:26am on 19 April 2017, the solicitor replied by email:[64]
I will email the Defendant and seek its consent to further time to file and serve evidence.
Failing its consent, I will need to appear before the Court to seek the adjournment. The Court may also take issue with a further extension on its own accord, given the number of adjournments in the matter so far.
Will 4 weeks be sufficient? It is better to seek an extension for more time now than have to seek another extension.
I will let you know how they respond.
[64] Exhibit R8 Tab 24
91.At 1:09pm on 19 April 2017, the respondent instructed the solicitor by email that he should ask the Court for an 8-week extension.[65]
[65] Exhibit R8 Tab 24
92.Despite the respondent’s assurances of receiving a “big pay out” by 21 April 2017, the applicant’s fees remained unpaid at the end of that month. At 9:56am on 3 May 2017, the solicitor said in an email to the respondent:[66]
[66] Exhibit A2 Tab 2.12
I note we still have not received payment in satisfaction of our outstanding legal fees.
I am getting pressure from the partners to ensure payment.
I have to put a stop works on the matter until our fees are brought up to date.
If you are unable to pay our ongoing legal fees we will have to cease acting for you.
I do not want to do this, however, I am caught between a rock and a hard place on this one.
I will be unable to complete any further work on your matter until our outstanding legal fees are paid.
Please ensure payment is made as soon as possible.
Please also ensure you are on track with your evidence gathering. Do not leave it until the last moment, it will be detrimental to the matter.
Please do not hesitate to call if you would like to discuss.
93.At 5:18pm on 4 May 2017, the applicant emailed invoice No. 10482 to the respondent for the work done in April and requested immediate payment.[67] The balance due under the invoice was $15,814.82, comprising professional fees of $1,225 plus GST ($122.50), giving an invoice total of $1,347.50, plus the outstanding balance of the previous invoices ($14,467.32).
[67] Exhibit R8 Tab 26
94.The particulars of professional fees showed that the work done between 4 and 26 April 2017 included, among other things, communications with and attendances on the respondent as follows:
11/04/2017-Telephone from Ralph re ACAT transcript and evidence.
12/04/2017-Perusing email from Ralph re medical records and email to Ralph re same.
19/04/2017-Perusing email from client re further time for evidence and email in reply.
26/04/2017-Email to client re orders made and email to Counsel re update.
95.At 2:05pm on 26 May 2017, the respondent emailed the solicitor to inform him that:[68]
The final plans were released just then. Council verbally agreed and we’ve asked them to confirm in writing, and with that the Banks will release the funds. Talk soon.
[68] Exhibit A2 Tab 2.14
96.We infer that the reference to “final plans” related to a subdivision in Adelaide that the respondent intended to use as security for a bank loan to enable him to pay, among other things, the applicant’s outstanding fees. [69] Again, it is apparent that the respondent was stating his intention to pay the applicant’s fees, rather than claiming he wished his fees to be kept to a cap of $20,000 or any other sum.
[69] Exhibit A2 Tab 2.14
97.At 9:49am on 31 May 2017, the solicitor said in an email to the respondent:[70]
There is now less than two weeks until evidence is due.
Please let me know how you are coming along with evidence. If you are unable to provide the evidence, you must let me know sooner rather than later. This is really important. Steve and I will need to assess whether we can continue the proceedings with the evidence you provide. If the evidence you provide is insufficient, it is best to admit defeat now, rather than drag the matter out and suffer a large costs order against you.
If you fail to provide me the evidence in time, the Defendant will likely relist the matter for non-compliance with the Court’s orders. If that occurs, I must attend Court and provide a satisfactory explanation for the delay. The Court has the discretion to dismiss the proceedings (which I do not find likely at this stage) and award a costs order against you (I find this highly likely).
Please also provide me with an update on payment of our fees. I will be unable to complete any work for you until our fees are paid.
I know this puts you in a hard position, however, we are unable to wait any longer for payment. We simply can’t do work for free and unfortunately, if we are not paid, I will need to get off the Court’s record for the proceedings.
Please get back to me urgently on all of the points I have raised.
[70] Exhibit A2 Tab 2.14
98.At 3:37pm on 31 May 2017, the solicitor said in a further email to the respondent:[71]
[71] Exhibit A2 Tab 2.13
I have spoken to the partners about the outstanding fees and your matter.
Unfortunately, in circumstances where our fees have not been paid since January we are unable to complete any work for you and unable to act for you.
As a result, we are concerned that the prospects of success in your matter will be damaged. We strongly recommend you seek alternate legal representation, and terminate your retainer with us. Alternatively, you may wish to act for yourself.
I attach a Notice that Party Acting in Person form, under Rule 2802 of the Court Procedures Rules 2006 (ACT).
I ask that you please complete and file this form with the Court in accordance with Rule 2802. If you do not complete and file the form, we will have no other option but to make an application to the Court to get off the record. If we make that application there will be costs consequences for you i.e. the Court will order that you pay our costs of the application.
I apologise, however, we are unable to do work for you in these circumstances.
I confirm the Court’s orders are:
1. The plaintiff to file and serve evidence by 12 June 2017; and
2. The matter is listed for a directions hearing at 9:30 am on 26 June 2017 at the ACT Supreme Court.
If you do not comply with the Court’s orders there are serious adverse consequences for you. This includes the matter being dismissed and a costs order being made against you. I note the Defendant’s costs incurred will be significant.
I strongly recommend you seek alternate legal advice urgently.
Please give me a call if you would like to discuss further. [Original emphasis]
99.The respondent replied by email, sent at 11:20am on 1 June 2017:[72]
Faced with events happening simultaneously which was the court case of the subdivision of the Adelaide land, it made sense to use resources to subdivide the Adelaide land because this in turn would provide all of them money required to pay you out completely which is what I chose to do.
This process has been completed and the council has given verbal approval and they will document this in writing which in turn free up the collateral inside the land at Adelaide and I’m expecting documentation to be provided in the next few working days.
[125] Applicant’s amended submissions on costs [28]
189.The Tribunal does not have a general discretion to award costs. Its power to do so lies in section 48 of the ACAT Act, which provides as follows:
(1) The parties to an application must bear their own costs unless this act or another Territory law otherwise provides or the tribunal otherwise orders.
(2) However –
(a)if the tribunal decides an application in favour of the applicant, the tribunal may order the other party to pay the applicant —
(i)the filing fee for the application; and
(ii)any other fee incurred by the applicant that the tribunal considers necessary for the application; or
(b)if the tribunal considers that a party to an application caused unreasonable delay or obstruction before or while the tribunal was dealing with the application — the tribunal may order the party to pay the reasonable costs of the other party arising from the delay or obstruction; or
(c)subject to section 49, if a party to the application contravenes an order of the tribunal — the tribunal may order the party to pay the costs or part of the costs of the application to the other party; or
(d)if the application is an application for review of the decision under the Heritage Act 2004, the Planning and Development Act 2007 or the Tree Protection Act 2005, and the tribunal makes an order under section 32(2) (Dismissing or striking out applications) — the tribunal may order the applicant to pay the reasonable costs of the other party arising from the application.
190.The Tribunal’s ‘discretion’ to make a costs order under section 48 is not at large. In CIC Australia Ltd v ACT Planning and Land Authority and Ors,[126] Penfold J considered the tribunal’s powers to award costs and concluded by reference to section 48(1) that the words “unless … the tribunal otherwise orders” do not give the tribunal a general power to “otherwise order” in the ordinary sense of those words. The tribunal’s only source of power to make a costs order lies in section 48(2). Since then, CIC Australia has been referred to and applied in a number of Supreme Court[127] and tribunal decisions.[128]
[126] CIC Australia Ltd v ACT Planning and Land Authority and Ors [2013] ACTSC 96
[127] See for example GJ v AS (No 4) [2017] ACTCA 7 at [95]
[128] See also Williams Love & Nicol Lawyers Pty Ltd v Wearne [2016] ACAT 123 in which the tribunal noted the limits on the tribunal’s power to order costs
191.The onus, therefore, is on the party seeking an order under section 48(2) to demonstrate that its case comes within one of the circumstances set out in section 48(2)(a) to (d).[129]
[129] Director-General Community Services Directorate v HJ [2018] ACTSC 6 at [93]
192.Where costs are sought under section 48(2)(b) on the ‘unreasonable delay’ ground, the tribunal must be satisfied that the party against whom costs are sought ‘caused’ actual delay and that the delay was ‘unreasonable’ in all the circumstances. An ‘attempt’ to delay the resolution of the proceeding does not meet the requirements of the section. Further, as was said in Smith v J&C Whyte Family Trust & Anor:[130]
Delay can sometimes be minor or occur unintentionally and/or unavoidably. A party should not be penalised with a costs order in such circumstances.
[130] Smith v J&C Whyte Family Trust & Anor [2016] ACAT 132 at [140]
193.The applicant relied on the fact that the respondent requested six extensions of time and was granted seven extensions of time. It may be accepted that the tribunal would have dealt with the application at an earlier time if the tribunal had not granted the extensions of time. However, the applicant was unable to explain how those circumstances amounted to unreasonable delay caused by the respondent. The applicant submitted that “there should have been no reason for the delay”.[131] The difficulty with that submission, of course, is that the tribunal was satisfied on each occasion it extended time, that it was appropriate to do so in the circumstances.
[131] Applicant’s amended submissions on costs [12]
194.Accordingly, we were not persuaded that the Tribunal could order the respondent to pay the applicant’s costs under section 48(2) on the ‘unreasonable delay’ ground.
195.Where costs are sought under section 48(2)(b) on the ‘obstruction’ ground, the tribunal need only be satisfied that the party against whom costs are sought caused ‘obstruction’. The meaning of ‘obstruction’ in section 48(2)(b) was considered in Smith v J&C Whyte Family Trust & Anor, [132] where the tribunal said that whether a party has caused ‘obstruction’ will depend on the facts and circumstances of the particular case, but that ‘obstruction’ did not encompass bringing an unmeritorious action, or bringing an action in circumstances amounting to bad faith or an abuse of process.
[132] Smith v J&C Whyte Family Trust & Anor [2016] ACAT 132 at [142]-[148]
196.The applicant asserted, in essence, that the respondent attempted to obstruct the resolution of the matter by relying on a defence and counterclaim he knew to be unmeritorious. Smith makes it clear that this does not amount to causing ‘obstruction’ in the necessary sense.
197.All that remains, therefore, is the applicant’s submission that it was “denied procedural fairness” because of the respondent’s failure to properly identify the material on which he intended to rely in compliance with the Tribunal’s orders. We accept that the applicant may have been required to do more work closer to the hearing than possibly may have been necessary if the respondent had complied with the Tribunal’s orders. We do not accept, however, that it was either necessary or reasonable for the applicant to read all seven volumes of documents or to listen to four hours of recordings in circumstances where the Tribunal had ordered the respondent to identify the specific parts of the material (including the recording) upon which he intended to rely and the respondent, manifestly, had failed to comply with the tribunal’s orders. A cursory examination of the material should have revealed to an experienced solicitor that its relevance was highly questionable, and that the respondent would have to satisfy the Tribunal as to its relevance before any of the material was admitted into evidence. If any of the material was admitted into evidence and the applicant was prejudiced by late notice of the case it had to meet, the statutory requirement that the Tribunal observe natural justice and procedural fairness[133] would have made it essential that the applicant be given adequate time to meet that case. Experienced solicitors should have understood this and acted accordingly. In fact, the respondent accepted at the hearing that the vast bulk of the material was not necessary to his case and such material as the respondent did rely upon was admitted without objection from the applicant. In those circumstances we do not accept that the applicant was denied procedural fairness.
[133] section 7(b) of the ACAT Act
198.Accordingly, we are not satisfied that the Tribunal has power to award costs under section 48(2)(b) on the ‘obstruction’ ground.
199.Although the applicant relied on the respondent’s failure to comply with the tribunal’s timetabling orders on two occasions as evidence of unreasonable delay or obstruction, the applicant did not submit that those circumstances enlivened the Tribunal’s power to award costs under section 48(2)(c), or that it should exercise its discretion to do so in the circumstances. Accordingly, we express no view on this question.
200.For these reasons, the applicant’s application for costs will be dismissed.
…………………………………..
Presidential Member G McCarthy
For and on behalf of the TribunalHEARING DETAILS
FILE NUMBER:
XD 694/2020
PARTIES, APPLICANT:
Aulich Civil Law Pty Ltd
(ACN 155 746 777)
PARTIES, RESPONDENT:
Ralph Hurst-Meyers
COUNSEL APPEARING, APPLICANT
Ms E Taylor
COUNSEL APPEARING, RESPONDENT
N/A
SOLICITORS FOR APPLICANT
Aulich Civil Law Pty Ltd
SOLICITORS FOR RESPONDENT
N/A
TRIBUNAL MEMBERS:
Presidential Member G McCarthy
Senior Member M Orlov
DATES OF HEARING:
26 & 27 February 2020
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