Aulich Civil Law Pty Ltd v Pappas
[2022] ACTSC 345
•9 December 2022
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Aulich Civil Law Pty Ltd v Pappas |
Citation: | [2022] ACTSC 345 |
Hearing Date: | 7 December 2022 |
DecisionDate: | 9 December 2022 |
Before: | Mossop J |
Decision: | See [23]-[24] |
Catchwords: | CIVIL LAW – PRACTICE AND PROCEDURE – Appeal – appeal from decision of Senior Deputy Registrar assessing legal fees owed by legal practice to barrister – application for leave to appeal out of time – where applicant misunderstood the relevant provision under which to have the decision reviewed – conditional grant of leave to appeal |
Legislation Cited: | Court Procedures Rules 2006 (ACT), rr 5(4), 1800, 1852, 1854, 1855, 5012, 5014, 5082, 5100, 6250(3)(l), 6256, Pt 2.17, Divs 2.17.5, 2.17.6, 2.17.7, Sch 4 Legal Profession Act 2006 (ACT), ss 270, 277(4), 279, 296, 300, 300C(2), Div 3.2.7 Legislation Act 2001 (ACT), s 151C |
Cases Cited: | Kelly v Director of Public Prosecutions (ACT) [2015] ACTCA 55 |
Parties: | Aulich Civil Law Pty Ltd ( Applicant) John Pappas ( Respondent) |
Representation: | Counsel B Anderson ( Applicant) Self-represented ( Respondent) |
| Solicitors Aulich Civil Law Pty Ltd ( Applicant) Self-represented (Respondent) | |
File Number: | SCA 40 of 2022 |
Decision under appeal: | Court/Tribunal: ACT Supreme Court Before: Senior Deputy Registrar Barker-Mitchell Date of Decision: 16 September 2022 Case Title: Pappas v Aulich Civil Law Pty Ltd Court File Number: SC 424 of 2021 |
MOSSOP J:
Introduction
This matter is an application for an extension of time in which to appeal from a decision of the Senior Deputy Registrar (the SD Registrar). It arises out of what was accurately described in submissions as an “unseemly dispute” between a barrister (Mr John Pappas) and a company through which a legal practice (known as Aulich Civil Law) is conducted over the barrister’s fees. The dispute arose at a time when the relationship between the barrister and one of the principals of the legal practice, Mr Aulich, had broken down. Fees claimed by the barrister were not paid in full by the legal practice. This led the barrister to seek assessment of his fees pursuant to s 296 of the Legal Profession Act 2006 (ACT) (LP Act). An assessment was made by the SD Registrar. The legal practice wishes to appeal against that decision.
At all relevant times the legal practice was conducted through a company, the applicant. The legal practice acted through one of the partners in that legal practice or through solicitors employed by the legal practice. In these reasons I refer simply to the applicant rather than distinguishing between the applicant, the partners in that legal practice or the solicitors who were employed in the legal practice.
The need for an extension of time arises because the applicant misunderstood which was the relevant provision under which to seek to have the decision of the SD Registrar reviewed. The applicant thought that the relevant provision permitting an appeal was r 1852 of the Court Procedures Rules 2006 (ACT) (the Rules). In fact, the relevant provision was r 6256. The former permitted a period of 14 days in which to make an application for reconsideration of a costs assessment decision. The latter only permitted five days in which to lodge an appeal: see r 5014(1)(a). Because the applicant thought that the relevant provision was r 1852, it only sought to file an application for reconsideration on day 14 after the costs assessment decision. Because the application was made pursuant to the wrong provision, the application was not accepted for filing.
The applicant now accepts that the application pursuant to r 1852 was properly rejected. The reasons that r 6256 and not r 1852 is the correct provision are as follows.
The dispute between the barrister and the applicant related to the quantum of fees owed by the applicant to the barrister in a particular case. While the barrister had been briefed on many occasions by the applicant in the past, by the time for payment of the barrister’s fees in this particular case, the relationship with Mr Aulich had soured. Unfortunately, there was no costs agreement between the barrister and applicant. For reasons that it is not necessary to recite here, the applicant and the barrister, did not agree as to the amount that the barrister should be paid. Because of the absence of a costs agreement, under s 279 of the LP Act, the barrister was only entitled to “the fair and reasonable value of the legal services provided”. Pursuant to s 296 of the LP Act, which falls within Div 3.2.7 of that Act, the barrister was entitled to apply for assessment of those fees by making an application to the Supreme Court. The power of the court to make such an assessment is permitted, by r 6250(3)(l) of the Rules, to be exercised by the registrar. The reference to the registrar includes a deputy registrar: r 5(4). Where the power of the court is invested in the registrar then there is an entitlement to appeal from the registrar’s decision to a judge or the Associate Judge under r 6256. Such an appeal must be filed within 5 days of the court’s decision “or any further time the Supreme Court allows”: r 5014(1)(a). An application for further time may be made before or after the expiry of the five-day period: Legislation Act 2001 (ACT), s 151C. The appeal is a hearing de novo: r 6256(4). As a consequence, the approved form for the filing of such an appeal (Court Procedures Rules 2006 - Form 5.1) does not require the specification of grounds of appeal.
The power of the court under the LP Act to assess the fees owed to a lawyer by another lawyer or by a client is distinct from the power of the court to assess the costs owed by one party to another party in court proceedings. Costs as between parties to court proceedings are addressed in Pt 2.17 of the Rules. The procedure for assessment of costs by the registrar appears in Div 2.17.5 – Procedure for assessing costs, and Div 2.17.6 – Procedure on costs assessment. It is clear from the context in which these divisions appear, as well as the language of r 1800, that these divisions apply where costs are to be paid to a party to a proceeding by another party, by a non-party or out of the fund. They do not apply to costs as between lawyer and client or between lawyer and another lawyer. Reconsideration and review of costs assessment is dealt with by Div 2.17.7 (rr 1850-1855). Where an assessment is completed then there is an entitlement to apply for reconsideration of that assessment by the registrar. That is provided by r 1852. Such an application must be filed within 14 days of the assessment decision: r 1852(2). The registrar is obliged to reconsider the assessment: r 1854. A party dissatisfied with the decision of the registrar on reconsideration may apply to the court for review of the decision: r 1855. Such an application for review must be filed within 14 days of the registrar’s decision on reconsideration: r 1855(3). There are limitations on the matters which may be raised in a review by the court which prevent the adducing of evidence and confine parties to objections raised before the registrar.
The applicant filed an application for reconsideration within the timeframe prescribed under r 1852. The SD Registrar decided that this was not an available course of action and that any appeal needed to be filed pursuant to r 6256.
Evidence
In resisting the application for leave to appeal out of time, the barrister sought to rely upon an affidavit which he relied on before the SD Registrar. Notice had been given of an intention to rely upon that affidavit in written submissions provided in advance of the hearing of the application for leave. That affidavit provided copies of the tax invoices the subject of the dispute and correspondence relevant to the dispute over the payment of those tax invoices.
Although it is not necessary for the purposes of this application to go too deeply into the merits of the SD Registrar’s decision, the material in the affidavit is relevant to an understanding of the respective positions adopted over time by the parties in relation to the dispute as well as the basis for the factual conclusions reached by the SD Registrar that formed the basis for her decision. The affidavit is therefore relevant. Having regard to its relevance and the confined nature of the material within it, there is no reason for it not to be admitted on the application. I therefore admit it as Exhibit 2.
Relevant chronology
Although the history of the matter is more detailed and described in the affidavits read or admitted into evidence for the purposes of this application, a basic chronology is as follows. References to the plaintiff and defendant are references to the parties in the underlying civil proceedings to which the fees claimed by the barrister relate.
(a)23 April 2019: Date of barrister’s invoice for $8717.50.
(b)18 February 2020: Date of barrister’s invoice for $63,049.80.
(c)18-22 March 2021: Applicant asks barrister to accept “the amount we can recover for your fees”. Barrister indicates he is not prepared to reduce his fees. Respective positions confirmed in writing.
(d)29 March 2021: Applicant accepts, on plaintiff’s behalf, defendant’s offer in relation to costs of personal injury proceedings ($380,000 inclusive of disbursements). Assessment had been due to occur on 31 March 2021.
(e)May-July 2021: Correspondence between barrister and applicant concerning fees which indicates an offer by the applicant to pay $51,262 in settlement of the invoices which offer was rejected by the barrister.
(f)12 October 2021: Barrister files an application for costs assessment dated 8‑October 2021.
(g)19 April 2022: Costs assessment hearing.
(h)16 September 2022: SD Registrar assessed the respondent’s costs in the sum of $68,178.94 and gave reasons for her decision. The evidence does not disclose why it took five months for a decision to be made on the costs assessment.
(i)30 September 2022: Notice for reconsideration of costs assessment lodged for filing with the court.
(j)4 October 2022: Applicant emails barrister notifying him that a notice for reconsideration under r 1852 had been filed on 30 September 2022, although a sealed copy had not been received from the registry. Also on that day, the applicant received a notice from the registry notifying it that the registry was unable to process the document for the following reason: “Please refer to rule 6256 of the Court Procedures Rules 2006”.
(k)5 October 2022: Applicant writes to the registry asserting that application under r 1852 was available.
(l)10 October 2022: The SD Registrar writes to the applicant advising that the reconsideration and review process under Div 2.17.7 is not available to the parties. Instead, because a costs assessment was filed under s 296 of the LP Act, it involved the exercise of jurisdiction under r 6250(3)(l) of the Rules and an appeal should be filed under r 6256.
(m)21 October 2022: Application for leave to appeal out of time lodged for filing. This was wrongly identified as being an application pursuant to r 5082 rather than r 5014. The Draft Notice of Appeal was in the form prescribed for the purposes of r 5100 and included grounds of appeal whereas the correct form would be that prescribed for the purposes of r 5012, form 5.1.
Submissions
The submissions of the applicant were, in summary:
(a)The failure to lodge within time involved a genuine mistake.
(b)The applicant had attempted lodgement of the application for reconsideration within the time prescribed for that process and hence did not ignore timeframes.
(c)Once aware of the mistake, the applicant took steps to file the present application.
(d)The barrister is not prejudiced because he was notified that the applicant had filed the notice shortly after it was filed.
(e)The appeal has prospects of success.
So far as prospects of success are concerned, the applicant submitted that the fees were not assessed in accordance with Sch 4 of the Rules and ought to have included a greater than five percent reduction on the basis of the respondent’s failure to disclose his fees. I interpolate that Sch 4 of the Rules does not appear to be directly relevant and it is the criteria in s 300 of the LP Act that have direct application to a costs assessment.
The barrister identified that there were only three issues agitated before the SD Registrar:
(a)The first issue was whether there was an agreement on the barrister’s part to accept whatever the plaintiff was successful in recovering for his fees from the defendants on a taxation of costs. The barrister accepted that there was such an agreement. However, he contended that as the issue of costs between plaintiff and defendant had been resolved on the basis of agreement rather than proceeding to an assessment, the agreement did not operate and he was entitled to recover his fees in full. The SD Registrar accepted that contention.
(b)The second issue was what was contended to be an excessive rate of charge, which the applicant submitted should be reduced on a global basis. The barrister contended that a large number of matters in which he had been briefed by the applicant had been charged at the same rates and paid without objection.
(c)The third issue was what consequences should flow as a result of the failure by the barrister to make the disclosures required by s 270 of the LP Act. On that issue he relied upon the history of dealings between the applicant and himself in which the same rate of charge had been adopted.
Written submissions following the hearing before the SD Registrar on behalf of the applicant adopted some earlier written submissions and identified only two issues for determination, corresponding to the first and third issues just outlined.
The barrister placed particular reliance upon the limited grounds which were agitated before the SD Registrar and submitted that the confined way in which the matter had been argued before the SD Registrar and the discretionary nature of the SD Registrar’s decision meant that the applicant’s proposed grounds of appeal “have no prospects of success”.
In relation to the considerations relevant as to whether or not to grant an extension of time, he emphasised and made submissions in relation to the following matters which reflect the considerations identified in Kelly v Director of Public Prosecutions (ACT) [2015] ACTCA 55 at [14]:
(a)Time limits are important and must prima facie be obeyed.
(b)An application to extend time should only be granted if, having regard to the important value of finality in litigation and the need for timeliness to be respected, it is proper to do so.
(c)The mere absence of prejudice is not enough to justify an extension of time.
(d)The merits of the appeal must be taken into account in deciding whether to extend time.
(e)The application should be determined by the court’s view of the demands of justice in accordance with a broader judicial discretion and not by the application of a verbal formula.
(f)The court should determine whether if leave is refused there would be a miscarriage of justice.
He emphasised the opportunity given to the applicant to agitate matters before the SD Registrar and the limited basis upon which that was done. He pointed out the apparent expansion of the matters to be agitated as reflected in the terms of the Draft Notice of Appeal. He submitted that the genesis of the dispute was the inappropriate conduct on the part of the applicant by making a unilateral decision to compromise the plaintiff’s costs of the proceedings. He submitted that, having regard to the reasons given by the SD Registrar, her consideration of relevant matters and the likely absence of additional evidence on any appeal, the prospects of the appeal were at best “marginal”. He submitted that mere dissatisfaction with the outcome of the assessment was not sufficient to indicate that there would be a miscarriage of justice if extension of time was refused.
Decision
I accept that the relevant considerations are those described in Kelly. In the present case I consider the following matters to be of principal significance:
(a)The error on the part of the applicant was a genuine mistake as to the applicable legal regime. It was, in one sense, understandable, even though it reflected a failure of legal diligence on the applicant’s part.
(b)The barrister was notified of the intention to seek review (albeit by the wrong means) of the SD Registrar’s decision shortly after the application was sought to be filed.
(c)The delay in filing an appeal is relatively modest having regard to the history of the dispute generally and the length of time taken by the SD Registrar to determine the assessment.
(d)The delay caused by the applicant’s failure to adopt the correct procedure would further delay assessment of the barrister’s fees and hence the payment of those fees.
(e)If leave is granted, the further delay in finalising, one way or another, the recovery of the barrister’s fees will prejudice him.
(f)The entitlement to appeal is an appeal de novo in which it is not necessary to demonstrate error in the appeal and is not statutorily limited to the evidence or grounds relied upon at first instance. The intention of the Rules is to allow either party to start again before a judge or the Associate Judge. That is a very distinct process from appeals by way of rehearing involving the establishment of error and reflects the importance of complete reviewability of a registrar’s decisions as part of the delegation of power of the court under the Rules to the registrar.
(g)The issues likely to be in contest on any appeal are relatively confined, even if there is some departure from the way in which the matter was conducted before the SD Registrar.
(h)The appeal has some prospects of reaching a decision more favourable to the applicant. That arises because there are reasonable arguments that may be put in relation to the effect of the dealings between the barrister and the applicant as to how his fees could be treated and as to the reduction that should be made in recoverable fees under s 277(4) of the LP Act. Given that the appeal is a rehearing de novo there are reasonable prospects of a judge or the Associate Judge reaching conclusions different to those reached by the SD Registrar.
(i)The evidence discloses that the applicant has not paid even the amount which it had offered to pay in response to the invoices. The evidence accepted by the SD Registrar indicates that the amount of the invoices not paid is $30,473.82. That figure is arrived having regard to the following:
Date
Event
Amount
23 April 2019 and 18 February 2020
Total fees invoiced is rendered
$71,767.30.
26 April 2020
Less amount of previous overpayment agreed to be set off
$29,819.62
23 June 2021
Payment by applicant
$11,473.86
Total amount paid
$41,293.48
Amount outstanding
$30,473.82
The amount which the applicant indicated that it was willing to pay was $51,262.36. The difference between this amount and the total amount paid, $41,293.48, is $9968.88.
Ultimately, in my view, it is appropriate to grant an extension of time in which to appeal so that the substance of the dispute between the parties can be resolved. I do not accept the submission that I should presently be satisfied that there would be no miscarriage of justice if an extension of time was refused. That submission depends upon acceptance of a particular characterisation of the facts and the position adopted by the applicant and does not give appropriate weight to the availability of a de novo appeal from the decision of the SD Registrar. The applicant should not be precluded from the available de novo appeal by reason of the legal error made as to the entitlement to review the decision of the SD Registrar, so long as that can be done in a way which minimises the prejudice of the prolongation of the proceedings to the barrister and reduces any incentive that might exist on the part of the applicant to delay resolution of the matter. In my view, those goals can be achieved by the imposition of conditions upon the grant of an extension of time. Those conditions will include:
(a)a condition that the applicant pay to the respondent that part of the disputed amount representing the difference between the total already paid and the amount that the applicant had previously agreed to pay; and
(b)a condition that the balance of the disputed amount be paid into court.
The possible situation in which the assessed amount is less than the amount previously agreed to be paid and hence that the imposition of these conditions results in the barrister having been overpaid is addressed by s 300C(2) of the LP Act.
I do not consider it appropriate to require that the appeal be in the form of the Draft Notice of Appeal that is in evidence. That is because the Draft Notice of Appeal is in the wrong form and the appropriate form is Form 5.1.
Orders
The orders of the Court are:
1. The time in which the applicant may appeal from the decision of the registrar given on 16 September 2022 is extended to 16 December 2022 on the conditions that:
(a) at the time of filing any appeal the solicitor for the applicant must undertake to the registrar in writing that the amount of $9968.88 has been paid to the respondent;
(b) at the time of filing any appeal the amount of $20,504.94 must be paid into court pending further order of the court.
2. Costs of the application for an extension of time are reserved.
In order to attempt to ensure that the matter is dealt with promptly I will also make directions in the matter as follows:
(a) Direct the registrar to set a date for hearing of the appeal before a judge or the Associate Judge (estimate 2.5 hours).
(b) Direct the appellant to file and serve written submissions limited to not more than seven pages by 22 December 2022 which submissions must identify any evidence that was before the Senior Deputy Registrar that is to be relied upon in the appeal and be accompanied by any evidence that was not before the Senior Deputy Registrar which is to be relied upon in the appeal.
(c) Direct that the respondent is to file and serve written submissions limited to not more than seven pages by 20 January 2023 which must identify any evidence that was before the Senior Deputy Registrar which is to be relied upon in the appeal and be accompanied by any evidence that was not before the Senior Deputy Registrar which is to be relied upon in the appeal.
(d) Direct that the appellant file and serve any written submissions in reply limited to not more than three pages by 27 January 2023.
(e) Any evidence of a witness is to be by affidavit.
| I certify that the preceding twenty-four [24] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Mossop. Associate: Date: 20 December 2022 |
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