Autore t/as Autore and Associate Solicitors and Barristers v Folino-Gallo

[2014] NSWSC 777

Supreme Court

New South Wales

Medium Neutral Citation:

Autore t/as Autore & Associate Solicitors & Barristers v Folino-Gallo [2014] NSWSC 777

Hearing dates:

21/05/2014

Decision date:

13 June 2014

Jurisdiction:

Common Law

Before:

Harrison AsJ

Decision:

The Court orders that:

(1) The appeal is dismissed.

(2) The decision of her Honour Magistrate Robinson dated 2 December 2013 is affirmed.

(3) The amended summons filed 21 May 2014 is dismissed.

(4) The plaintiff is to pay the defendant's costs as agreed or assessed.

Catchwords:

APPEAL FROM LOCAL COURT - barrister sues solicitor for unpaid fees - whether a barrister can comply with the Legal Profession Act 2004 (NSW) provisions, mandating disclosure of estimates of costs to the client, including updates of costs estimates, by the expedient of general costs disclosure and reliance upon the instructing solicitor working out the anticipated costs

Legislation Cited:

Interpretation Act 1987 (NSW), ss 34, 35
Legal Profession Act 2004 (NSW), Pts 1.2, 3.2, ss 4, 301, 302A, 309, 310, 311 312, 316, 317, 351, 352
Local Court Act 2007 (NSW), ss 39, 40, 41

Cases Cited:

Branson v Tucker [2012] NSWCA 310
Certain Lloyd's Underwriters v Cross [2012] HCA 56; [2012] 248 CLR 156
Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404
Swain v Waverley Municipal Council [2005] HCA 4; (2005) 220 CLR 517

Texts Cited:

New South Wales Legislative Assembly Parliamentary Debates (Hansard) 7 December 2004 at 13404

Category:

Principal judgment

Parties:

Anthony Autore trading as Autore & Associate Solicitors & Barristers (Plaintiff)
Paul Folino-Gallo (Defendant)

Representation:

Counsel:
M G McHugh SC (Plaintiff)
G George (Defendant)
Solicitors:
Autore & Associate Solicitors & Barristers (Plaintiff)
Pateman Legal (Defendant)

File Number(s):

2013/378197

Publication restriction:

Nil

 Decision under appeal 

Date of Decision:

2013-12-02 00:00:00

Before:

Robinson LCM

File Number(s):

2012/80562

Judgment

1. HER HONOUR: A barrister successfully sued his instructing solicitor for unpaid fees in the Local Court without first having those fees assessed. The plaintiff says that this appeal involves, a novel point of law, and that is, whether a barrister can comply with the Legal Profession Act 2004 (NSW) ("the Act") provisions, mandating disclosure of estimates of costs to the client, including updates of costs estimates, by the expedient of general costs disclosure and reliance upon the instructing solicitor working out the anticipated costs.

1. By amended summons filed 21 May 2014, Anthony Autore trading as Autore & Associate Solicitors & Barristers, seeks leave to appeal the whole of the decision of her Honour Magistrate Robinson, in Paul Folino-Gallo v Anthony Autore trading as Autore & Associates Solicitors & Barristers. While this amended summons seeks leave only, the earlier summons (filed 17 October 2013) sought to bring an appeal under ss 39 and 40 of the Local Court Act 2007 (NSW) but no leave was sought, I grant leave to the plaintiff to seek both leave to appeal under s 40 and to bring an appeal under s 39 as of right.

1. The plaintiff is Anthony Autore trading as Autore & Associate Solicitors & Barristers ("Mr Autore"). The defendant is Paul Folino-Gallo ("Mr Folino-Gallo"). In the proceedings below, Mr Autore was the defendant and Mr Folino-Gallo was the plaintiff. For convenience, I will refer to the parties by name. Mr Autore is a solicitor and Mr Folino-Gallo is a barrister. Mr Autore relied on the affidavit of Anthony Autore sworn 22 April 2014.

1. On 2 December 2013, the Magistrate entered judgment in favour of Mr Folino-Gallo as against Mr Autore in the sum of $29,571.29.

The appeal

1. Section 39 of the Local Court Act2007 (NSW) provides that a party who is dissatisfied with a judgment or order of the Local Court may appeal to the Supreme Court, but only on a question of law.

1. Section 40(1) of the Local Court Act provides that a party who is dissatisfied with a judgment or order of the Local Court may appeal to the Supreme Court on a ground that involves a question of mixed law and fact, but only by leave of the Supreme Court.

1. Section 41 of the Local Court Act provides that this Court may determine an appeal either by (a) varying the terms of the judgment or order, or (b) setting aside the judgment or order, or (c) setting aside the judgment or order and remitting the matter to the Local Court for determination in accordance with the Supreme Court's directions, or (d) dismissing the appeal.

1. In Swain v Waverley Municipal Council [2005] HCA 4; (2005) 220 CLR 517, Gleeson CJ at [2] reiterated that in the common law system of civil justice, the trial process determines the issues between the parties. The system does not regard the trial as merely the first round in a contest destined to work its way through the judicial hierarchy until the litigants have exhausted either their resources or their possibilities of further appeal.

1. Mr Autore appeals the Magistrate's decision on the following grounds:

(1) The Magistrate erred in law in failing to apply s 317 of the Act to the admitted facts.

(2) The Magistrate erred in law in failing to apply s 317 of the Act to the facts incontrovertibly established on the evidence.

(3) Her Honour should have found that the plaintiff was precluded from bringing his claim by s 317(2).

(4) The Magistrate erred in law in giving judgment on the plaintiff's claim in the circumstances contrary to s 317(1).

(5)   The Magistrate erred in finding that the plaintiff accepted the defendant's bill in its entirety.

(6)   The Magistrate erred in finding that the defendant's bill was reasonable.

(7) Her Honour failed to find the defendant did not comply with the disclosure provisions of Part 3.2.

The proceedings in the Local Court

1. Mr Autore, a solicitor, engaged the services of Mr Folino-Gallo, a barrister, to provide legal services in relation to three of his clients: Great Wall Resources, Gregory Williams ("Mr Williams") and Advanced Lifting Pty Ltd ("Advanced Lifting").

1. In the Local Court, there were three issues in dispute. They were firstly, were there agreements for Mr Folino-Gallo to provide services to Mr Autore? Secondly, if so, what were the terms of those agreements? Finally, if money was found to be payable to Mr Folino-Gallo by Mr Autore, was there any bar against payment of the same?

1. On appeal, it is only the third issue that remains in dispute. The main issue is whether the barrister has complied with the disclosure requirement in accordance with s 309(c) of the Act. If he has not, can he recover his costs from the solicitor or is he required under s 317 to have his costs assessed? This argument involves the interplay, if any, between ss 309, 310 and 317 of the Act.

(i) Great Wall Resources

1. The first client that Mr Folino-Gallo provided services for was Great Wall Resources. On about 6 March 2010, Mr Autore asked if Mr Folino-Gallo could perform work for him. On 16 March 2010, Mr Folino-Gallo prepared a costs agreement that was faxed the following day to Mr Autore. Mr Folino-Gallo provided Mr Autore with five invoices regarding work that he performed for Great Wall Resources, being invoices of 24 March 2010 for $10,312.50; 15 April 2010 for $1,567.50; and three invoices dated 1 November 2010 for the respective amounts of $2,475, $3,465 and $1,567.50. All of these invoices were faxed to Mr Autore and followed up with hardcopies.

1. On 13 March 2010, Mr Folino-Gallo received initial instructions from Mr Autore on an urgent basis to advise and appear on an application by Great Wall Resources, in a matter concerning Lewis and McKinnon Solicitors in the Federal Court. On or about 15 March 2010, Mr Folino-Gallo received a bundle of documents under cover of a letter from Mr Autore dated 12 March 2010. Also on 15 March 2010, Mr Folino-Gallo was asked to send a bundle of documents to Lewis and McKinnon Solicitors on behalf of Mr Autore. On 16 March 2010, Mr Folino-Gallo commenced drafting a costs agreement between Mr Autore on one part and him on the other, in respect of matters involving Great Wall Resources. On 17 March 2010, Mr Folino-Gallo printed the costs agreement and sent it by way of facsimile. A hard copy of the costs agreement was sent that day.

1. Between 13 March 2010 and 21 September 2010, Mr Autore provided Mr Folino-Gallo with instructions to undertake work in proceedings involving Great Wall Resources, in the Supreme and Federal Courts. Mr Folino-Gallo provided professional legal services, including advice, preparing and settling pleadings, affidavits and Court appearances.

(ii) Mr Williams

1. The second client was Mr Williams. The Magistrate made findings that a conversation took place between Mr Folino-Gallo and Mr Autore at Mr Autore's office in Wollongong, where Mr Autore handed Mr Folino-Gallo a brief. On 7 April 2010, when they attend Mr Williams' premises, Mr Folino-Gallo handfed the costs agreement dated 6 April 2010 to Mr Autore. The costs agreement is in similar terms to that involving Great Wall Resources. Mr Folino-Gallo asserted that he was given instructions by Mr Autore to do work for Mr Williams, which included the drafting of the statement of claim. Mr Autore admitted that Mr Folino-Gallo did the work. On 1 November 2010, Mr Folino-Gallo rendered an invoice to Mr Autore in the amount of $2,805.50. This invoice remains unpaid.

(iii) Advanced Lifting

1. The third client was Advanced Lifting. Mr Autore is no longer challenging this bill that was rendered in the sum of $330, because s 317 of the Act does not apply to bills of $750 or less. The Magistrate held that pursuant to s 312(1)(a) of the Act, there was no requirement for a costs agreement given the amount of the bill.

1. There are two relevant documents. They are the letter forwarding the costs agreement and the costs agreement itself. I shall reproduce the relevant portions of those documents.

The forwarding letter and costs agreement

1. In relation to both Great Wall Resources and Mr Williams, Mr Folino-Gallo sent a forwarding letter, together with the costs agreement to Mr Autore. The forwarding letters are similar in terms. They read:

"As various Counsel have been briefed to appear in these proceedings, it is difficult to determine with any precision what the likely costs of the litigation will be. I expect, however, that the information set out above and in the Costs Agreement will suffice to enable you to comply with section 310(1) of the Act, having regard to your knowledge of the matter and your own professional expertise and experience."

1. Paragraph [4] of the costs agreements set out the fees that counsel would charge. Once again, the costs agreements are in similar terms. They read:

"4. Fees

4.1 The Solicitors propose to retain Counsel on behalf of a client or clients of the Solicitors. This is a costs agreement between Counsel and the Solicitors under the Legal Profession Act 2004 (NSW) ('LPA'), section 322(1)(c).

4.2 This agreement applies to legal services provided by Counsel under retainer from the Solicitors in connection with or arising out of the above-mentioned matter. Part 3.2 of the LPA applies correspondingly.

4.3 Counsel shall charge and the solicitor shall pay for all work carried out by counsel at the following rates:

4.3.1 $300.00 per hour for all time properly spent (including waiting and travelling time, if any), with items or daily totals rounded up or down to the nearest quarter hour, but subject to the following minimum charges:

4.3.2 $300.00 for a short appearance in a Court or Tribunal; $1,250.00 for an interlocutory hearing before a duty judicial officer not exceeding ½ day; otherwise $2,000 for every day or part thereof occupied by, listed or set aside for any hearing, mediation or arbitration; but if a matter is settled or de-listed more than seven and not more than 14 days before such a day, the daily fee is reduced by 50%; or if more than 14 days before, or if the Barrister is subsequently briefed to appear in another case and entitled to charge a daily fee for that day, the fee is waived.

4.4 Interest is charged from date of invoice until payment at the rate referred to in LPA section 321(4), but interest is waived if fees are fully paid within 30 days of invoice.

4.5 Counsel shall send invoices from time to time

(a) at Counsel's discretion and

(b) when requested by the Solicitors.

Each invoice is payable within 30 days.

4.6 The Solicitors' obligations are personal and do not depend on their being put in funds by any person."

The relevant statutory provisions

1. "Client" and "law practice" are defined in Part 1.2, s 4 of the Act. "Client" includes a person to whom or for whom legal services are provided.

1. "Law practice" means an Australian legal practitioner who is a sole practitioner, or a law firm, or a multi-disciplinary partnership, or an incorporated legal practice, or a complying community legal centre. There is no definition of "another law practice" in s 4.

1. Part 3.2 of the Act is entitled "Costs disclosure and assessment". It runs from ss 301 to 400 inclusive and provides some regulation of costs disclosure and assessment concerning legal services. Section 301 states that the purpose of Part 3.2 of the Act is "to provide for law practices to make disclosures to clients regarding legal costs". Section 302A defines third party payers. It relevantly reads:

"302A Terms relating to third party payers

(1) For the purposes of this Part:

(a) a person is a third party payer, in relation to a client of a law practice, if the person is not the client and:

(i) is under a legal obligation to pay all or any part of the legal costs for legal services provided to the client, or

(ii) being under that obligation, has already paid all or a part of those legal costs ..."

1. Division 3 is headed "Costs Disclosure". It contains most of the sections relevant to this appeal and runs from ss 309 to 318A. Sections 309, 310, 311, 316, 317, 351 and 352 of the Act are relevant to this appeal.

1. Sections 351 and 352 appear in Part 3.2, Division 11, which is headed "Costs assessment". I have interpolated the words "barrister" and "solicitor" where appropriate so as to make these easier to understand. These sections read:

"309 Disclosure of costs to clients

(1) A law practice [solicitor] must disclose to a client in accordance with this Division:

(a) the basis on which legal costs will be calculated, including whether a fixed costs provision applies to any of the legal costs, and

...

(c) an estimate of the total legal costs if reasonably practicable or, if that is not reasonably practicable, a range of estimates of the total legal costs and an explanation of the major variables that will affect the calculation of those costs, and

(d) details of the intervals (if any) at which the client will be billed, and

...

310 Disclosure if another law practice is to be retained

(1) If a law practice [solicitor] intends to retain another law practice [barrister] on behalf of the client, the first law practice [solicitor] must disclose to the client the details specified in section 309 (1)(a), (c) and (d) in relation to the other law practice [barrister], in addition to any information required to be disclosed to the client under section 309.

(2) A law practice [barrister] retained or to be retained on behalf of a client by another law practice [solicitor] is not required to make disclosure to the client under section 309, but must disclose to the other law practice [solicitor] the information necessary for the other law practice to comply with subsection (1).

...

Note. An example of the operation of this section is where a barrister is retained by a firm of solicitors on behalf of a client of the firm. The barrister must disclose to the firm details of the barrister's legal costs and billing arrangements, and the firm must disclose those details to the client. The barrister is not required to make a disclosure directly to the client.

311 How and when must disclosure be made to a client?

(1) Disclosure under section 309 must be made in writing before, or as soon as practicable after, the law practice is retained in the matter.

(2) Disclosure under section 310 (1) must be made in writing before, or as soon as practicable after, the other law practice is retained.

(3) Disclosure made to a person before the law practice is retained in a matter is taken to be disclosure to the person as a client for the purposes of sections 309 and 310.

...

316 Ongoing obligation to disclose

A law practice must, in writing, disclose to a client any substantial change to anything included in a disclosure already made under this Division as soon as is reasonably practicable after the law practice becomes aware of that change.

317 Effect of failure to disclose

(1) Postponement of payment of legal costs until assessed

If a law practice does not disclose to a client or an associated third party payer anything required by this Division to be disclosed, the client or associated third party payer (as the case may be) need not pay the legal costs unless they have been assessed under Division 11.

Note. Under section 369, the costs of an assessment in these circumstances are generally payable by the law practice.

(2) Bar on recovering proceedings until legal costs assessed

A law practice that does not disclose to a client or an associated third party payer anything required by this Division to be disclosed may not maintain proceedings against the client or associated third party payer (as the case may be) for the recovery of legal costs unless the costs have been assessed under Division 11.

...

(5) Effect on legal costs where law practice retains another law practice that fails to disclose

If a law practice [solicitor] retains another law practice [barrister] on behalf of a client and the first law practice [solicitor] fails to disclose something to the client solely because the retained law practice [barrister] failed to disclose relevant information to the first law practice [solicitor] as required by section 310 (2), then subsections (1)-(4):

(a) do not apply to the legal costs owing to the first law practice [solicitor] on account of legal services provided by it, to the extent that the non-disclosure by the first law practice [solicitor] was caused by the failure of the retained law practice [barrister] to disclose the relevant information, and

(b) do apply to the legal costs owing to the retained law practice.

..."

And finally ss 351 and 352 of the Act read:

351 Application for costs assessment by law practice retaining another law practice

(1) A law practice [solicitor] that retains another law practice [barrister] to act on behalf of a client may apply to the Manager, Costs Assessment for an assessment of the whole or any part of the legal costs to which a bill given by the other law practice in accordance with Division 7 (Billing) relates.

(2) If any legal costs have been paid without a bill, the law practice may nevertheless apply for a costs assessment.

(2A) An application for a costs assessment may be made even if the legal costs have been wholly or partly paid.

(3) An application under this section must be made within 60 days after:

(a) the bill was given or the request for payment was made, or

(b) the costs were paid if neither a bill was given nor a request was made.

(4) An application cannot be made under this section if there is a costs agreement between the client and the other law practice.

352 Application for costs assessment by law practice giving bill

(1) A law practice that has given a bill may apply to the Manager, Costs Assessment for an assessment of the whole or any part of the legal costs to which the bill relates.

(2) If any legal costs have been paid without a bill, the law practice may nevertheless apply for a costs assessment.

(3) An application for a costs assessment may be made even if the legal costs have been wholly or partly paid.

(4) An application may not be made under this section unless at least 30 days have passed since:

(a) the bill was given or the request for payment was made, or

(b) the costs were paid if neither a bill was given nor a request was made, or

(c) an application has been made under this Division by another person in respect of the legal costs."

1. The note referred to at the foot of s 310 is not to be taken into account. While s 34 of the Interpretation Act 1987 (NSW) permits the use of extrinsic material that does not form part of the Act, which is capable of assisting in ascertaining the meaning of an Act and statutory rule, s 4(2) of the Act provides that notes included in the Act "do not form part of this Act".

The Magistrate's reasons

1. As to whether or not Mr Folino-Gallo is barred from recovering his fees on the basis that he failed to comply with ss 309 and 317 of the Act, the Magistrate in her ex tempore judgment dated 2 December 2013 stated:

"...

The argument appears to be put on basis. The first is that pursuant under section 317 of the Legal Profession Act. The plaintiff did not properly disclose his fees as required under the Act and that he did not provide an estimate for his fees. The second is that the relevant bills have not as yet been assessed by a costs assessor and therefore are not liable to be paid.

The requirement for disclosure is set out in section 309 of the Act.

Subsection 1 of section 309 lists the items that must be disclosed by a law practice to a client. Noteworthy in this scenario section 309 applies as in-between the defendant and Great Wall Resources.

Section 310 is the applicable section for the plaintiff's responsibilities. The effect of that section, as I understand it, is that the plaintiff must provide sufficient information to the defendant to enable the defendant's client's with section 309 (sic).

The plaintiff asserts that he has done so in the detail provided in the costs agreement. Further he relies upon a covering letter of 17 March 2010 wherein he refers to the difficulty, or rather the impracticality of providing an estimate given the variety of matters in which he is briefed and the various stages of proceedings.

I'm not of a view that the plaintiff has not disclosed sufficient information to the defendant as required under s 310 of the Act. I note that the defendant at no stage sought any additional information from the plaintiff to assist him to comply with s 309 of the Act, if in fact he was having such difficulties.

The defendant asserts that s 317 applies in that due to the plaintiff's failure to provide an estimate he has not properly disclosed and as such cannot commence proceedings until a cost assessment takes place. For the above mentioned reasons I am of the view that the plaintiff has provided sufficient disclosure and accordingly s 317 does not apply.

The second argument raised by the defendant is that payment of the invoices is not required as the bills have not yet been assessed by a costs assessor. It is said that ss 351 and 352 of the Legal Profession Act apply. As submitted by the plaintiff I note that there are time restrictions, and any implication to have a bill assessed, and that those time restriction periods have now well and truly passed.

In those circumstances, as I understand it, there is no basis upon which the bills need to be assessed prior to payment. I therefore find that the bills rendered by the plaintiff, as referred to by for work done by him for the client Great Wall Resources, are due and payable by the defendant."

[My emphasis added]

1. Allowing for the double negative, her Honour made a finding that Mr Folino-Gallo had disclosed sufficient information to Mr Autore as required under s 310 of the Act.

1. The same arguments were raised and rejected by the Magistrate in relation to the second client, Mr Williams. The Magistrate made a finding that the bills rendered by Mr Folino-Gallo for the work done by him in relation to Mr Williams, were due and payable by Mr Autore.

Mr Autore's submissions

1. Mr Autore says that it appears that a great deal of the work was carried out by the barrister before he sent a costs agreement and disclosure, see [7] and [11] of the affidavit of Mr Folino-Gallo [CB 217]; fax [CB 224] dated 15 March 2010; and tax invoice [CB 232]. This is relevant to the ability (or not) of the solicitor to comply with his obligations under s 309, noting 311(2).

1. The covering letter enclosing the barrister's costs agreement [CB 230] stated that he had complied with his obligations under s 310(2). The solicitor's submission is that it does not and cannot because:

(1) As noted this correspondence came after much of the work had already been done. On any view the barrister simply could not comply with his disclosure obligations.

(2) The second sentence of the last full paragraph refers to "the information set out above". There is no such information 'above' relevant to any costs disclosure. It should also be noted that this letter concerns the client Great Wall Resources and three other parties - making it even harder to know what work was to be done.

(3) That sentence refers to the information in the costs agreement as being sufficient to enable the solicitor to comply with s 310(1). That obligation in 310(1) is mandatory and includes the matter in 309(1)(c):

"An estimate of the total legal costs if reasonably practicable or, if that is not reasonably practicable, a range of estimates of the total legal costs and an explanation of the major variables that will affect the calculation of those costs."

(4) There is no estimate of the total legal costs in the letter or the costs agreement. Assuming that was not reasonably practicable, nor is there an applicable range of estimate of the total legal costs. Nor is there an explanation of the major variables that will affect the calculation of those costs disclosed in the costs agreement. Rather, the barrister purports to assert the mandatory compliance by the solicitor is still possible "having regard to your knowledge of the matter and your own professional expertise and experience".

1. According to Mr Autore, this cannot be the required disclosure, as the barrister must disclose to the other law practice the information necessary for the other law practice to comply with subsection (1). The obligation to disclose under s 310(2), he says, is the barrister's alone and the legislation makes no provision on any construction to cast this obligation onto a solicitor by simple expedient.

1. Moreover, s 309(1)(c) goes further than just an estimate if that is not reasonably practicable and requires "... a range of estimates of the total legal costs and an explanation of the major variable that will affect the calculation of those costs".

1. The importance of costs disclosure to clients is self evident and by virtue of s 317(7), a failure can be a breach of the professional conduct rules. It could hardly be suggested where the barrister's own Association suggest a similar compliance is enough. However, it was submitted that this is wrong and the law clearly provides that estimates must be given and indeed, updated when necessary.

1. In construing these provisions, Mr Autore says that the first purpose set out in s 301 is apposite. In support of this proposition, senior counsel for Mr Autore referred to Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 423-424.

1. More recently in Certain Lloyd's Underwriters v Cross [2012] HCA 56; [2012] 248 CLR 156, the High Court (per French CJ and Hayne J) set out some basic principles of statutory construction at [23] to [26]. They read:

"Some basic principles

23 It is as well to begin consideration of this issue by re-stating some basic principles. It is convenient to do that by reference to the reasons of the plurality in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue:

"This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, n particular the mischief it is seeking to remedy."

24 The context and purpose of a provision are important to its proper construction because, as the plurality said in Project Blue Sky Inc v Australian Broadcasting Authority, "[t]he primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute" (emphasis added). That is, statutory construction requires deciding what is the legal meaning of the relevant provision "by reference to the language of the instrument viewed as a whole", and "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed".

25 Determination of the purpose of a statute or of particular provisions in a statute may be based upon an express statement of purpose in the statute itself, inference from its text and structure and, where appropriate, reference to extrinsic materials. The purpose of a statute resides in its text and structure. Determination of a statutory purpose neither permits nor requires some search for what those who promoted or passed the legislation may have had in mind when it was enacted. It is important in this respect, as in others, to recognise that to speak of legislative "intention" is to use a metaphor. Use of that metaphor must not mislead. "[T]he duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have" (emphasis added). And as the plurality went on to say in Project Blue Sky:

"Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning."

To similar effect, the majority in Lacey v Attorney-General (Qld) said:

"Ascertainment of legislative intention is asserted as a statement of compliance with the rules of construction, common law and statutory, which have been applied to reach the preferred results and which are known to parliamentary drafters and the courts." (footnote omitted)

The search for legal meaning involves application of the processes of statutory construction. The identification of statutory purpose and legislative intention is the product of those processes, not the discovery of some subjective purpose or intention.

26 A second and not unrelated danger that must be avoided in identifying a statute's purpose is the making of some a priori assumption about its purpose. The purpose of legislation must be derived from what the legislation says, and not from any assumption about the desired or desirable reach or operation of the relevant provisions. As Spigelman CJ, writing extra-curially, correctly said:

"Real issues of judicial legitimacy can be raised by judges determining the purpose or purposes of Parliamentary legislation. It is all too easy for the identification of purpose to be driven by what the particular judge regards as the desirable result in a specific case." (emphasis added)

And as the plurality said in Australian Education Union v Department of Education and Children's Services:

"In construing a statute it is not for a court to construct its own idea of a desirable policy, impute it to the legislature, and then characterise it as a statutory purpose." (footnote omitted)

1. Senior counsel for Mr Autore also referred to the second reading speech of the Act (New South Wales Legislative Assembly Parliamentary Debates (Hansard) 7 December 2004 at 13404), where Mr Bob Debus noted:

"Part 3.2 sets out the requirements in relation to the costs disclosure and assessment. This includes what must be included in a costs disclosure statement, billing, and having legal fees assessed. Generally, the provisions in the bill apply if a client first instructs the law practice in the matter in New South Wales. When the client first instructs the practice, the law practice must give the client a costs disclosure statement detailing the information specified in clause 309(1). This includes an estimate of the total costs, an estimate of the amount the client will be able to recover and how the costs can be assessed. There are certain exceptions from the requirement to disclose as outlined in clause 312. These include a client who has already received a disclosure notice and who has waived further disclosure, a public company and the holder of a financial services licence. As a general rule a client will not be required to pay legal costs in respect of matters that have not been disclosed unless the costs have been assessed under division 11."

1. This part of the second reading speech, in my view, does not assist in the interpretation of ss 309 and 310 of the Act.

1. Finally, Mr Autore submitted that there was no costs agreement in relation to the fees of $16,912.50. This submission is incorrect. There is a costs agreement dated 16 March 2010, addressed to Great Wall Recourses v Davidovic; Great Wall Resources v Bell Morgan (Anthony Kosseris); Great Wall Resources v Raffeletos; and Great Wall Resources associated matters. That costs agreement is referable to the fees of $16,912.50.

1. I should also record that in his submissions, Mr Autore referred to Branson v Tucker [2012] NSWCA 310. Both parties have agreed that Branson is not of assistance because what was said by Campbell JA at [29] to [32] was obiter dicta.

Mr Folino-Gallo's submissions

1. Mr Folino-Gallo submitted that the Magistrate's reasons must be correct for the following reasons.

1. Part 3.2 of the Act is consumer focused legislation, which is intended to assist a "client" (but not "a law practice retained or to be retained on behalf of a client by another law practice") to be informed about, and appreciate, what his or her liability for costs will be. This is made clear, as one of the Part's purposes is to make "disclosures to clients regarding legal costs". Subsection 312(1) of the Act also highlights this, because it exempts disclosure to "non-consumers" or more sophisticated parties. For instance when a "client" is a law practice, a public company or a liquidator, disclosure is not required.

1. Upon retaining the barrister, it was the solicitor who, because of the operation of s 310(1) of the Act, carried the burden of disclosing matters under s 309(1)(a), (c) and (d) to his clients. To assist this process, subsection 310(2) of the Act required the barrister to disclose to the solicitor all information "necessary" to allow the solicitor to make disclosure in accordance with s 310(1). The word "necessary" operates as a precondition to the barrister's disclosure requirements, so he was required only to make disclosure where it was "necessary" to do so.

1. Had the barrister not provided an estimate or range of estimates and the solicitor had established this had prevented him making disclosure to his clients, the section would have been enlivened. The burden of establishing this rested with the solicitor and no such evidence was adduced. As a matter of logic it would have been difficult for the solicitor to lead such evidence, because his primary contention was he did not receive written costs agreements from the barrister.

1. Counsel for Mr Folino-Gallo noted that the Magistrate did find that, the solicitor did not seek further information from the barrister so he could comply with his s 309 requirements.

1. Section 317 also does not assist the solicitor. Sections 317(2) and 317(5) read together provides, applies only to a client and not a law practice. In addition, s 317(2) only operates if s 317(5) is enlivened and there is a finding that the solicitor failed to disclose something to his client "solely" because the barrister failed to disclose "relevant information as required by section 310(2)". The solicitor did not adduce any evidence that his failure to disclose "something" resulted "solely" from the barrister's failure to disclose relevant information under s 310(2).

Conclusion

1. I have already referred to the definitions of "Client" and "law practice" at [22] to [23] of this judgment. I need not refer to them again.

1. Part 3.2 of the Act is entitled "Costs disclosure and assessment". It runs from ss 301 to 400 inclusive, which provides some regulation of costs disclosure and assessment concerning legal services. Section 301 states that the purpose of Part 3.2 of the Act is to provide for law practices to make disclosures to clients regarding legal costs.

1. Sections 309 and 317 fall within Division 3 of the Act, which is entitled "Costs disclosure".

1. Section 309 is directed to "Disclosure of costs to clients". Section 309(1) mandates that it is the law practice, the solicitor, that must disclose to the client, the basis on which legal costs will be calculated. The legal costs that are to be disclosed are defined and inclusive. The legal costs include an estimate of the total legal costs if reasonably practicable or, if that is not reasonably practicable, a range of estimates of the total legal costs and an explanation of the major variables that will affect the calculation of those costs and the details of the intervals (if any) at which the client will be billed (s 309(1)(a), (c) and (d)). The words contained in s 309 do not include a reference to "another law practice", the barrister. It is clear from the text of s 309 that the obligation of disclosure of legal costs to the client is placed upon the solicitor. In s 309, the obligation of disclosure to the client is not placed upon the barrister. [emphasis added].

1. Section 310 is directed to "Disclosure if another law practice is to be retained". This section is enlivened when another law practice, the barrister, is to be retained. Section 310(1) again places the mandatory obligation upon the first law practice, the solicitor, to make a disclosure to the client of what is set out in s 309(1)(a), (c) and (d) (referred to above). However, the obligation placed on the barrister retained, is that the barrister must disclose to the law practice, the solicitor, the information for the law practice, the solicitor, to comply with 310(1). Section 310(2) specifically states that it is the law practice, the solicitor, not the barrister who is required to make a disclosure to the client under s 309. The wording contained in both ss 309 and 310 are consistent. Those sections specify it is the solicitor who has the obligation to make the disclosures in relation to legal costs to the client. The barrister's obligation under s 310(2) is to disclose to the solicitor the information necessary for the solicitor to comply with s 310(1).

1. The Magistrate made a finding that Mr Folino-Gallo had disclosed sufficient information as required under s 310 of the Act. While the Magistrate did not use the word "necessary", her Honour was satisfied that Mr Folino-Gallo had discharged his obligation under s 310(2).

1. Mr Autore submitted that the Magistrate's statement, "I note that the defendant at no stage sought any additional information from the plaintiff to assist him to comply with s 309 of the Act, if in fact he was having such difficulties" reversed the onus of proof. This sentence is a comment denoted by the word "note". In my view, by making this comment the Magistrate is not reversing the onus of proof in s 310.

1. Section 317(1) is directed to "Postponement of payment of legal costs until assessed". Section 317(1) applies if a law practice does not disclose to a client or an associated third party payer anything required by this Division (Division 3) to be disclosed. If there has been such a failure to disclose, the law practice may not maintain proceedings against the client or associated third party payer (as the case may be) for the recovery of legal costs unless the costs have been assessed under Division 11.

1. Leaving aside the reference to associated third party payer, s 317(1) applies in relation to a law practice and a client. It does not relate to "another law practice" and a client. The wording of s 310(2) makes it clear that the barrister is obliged to make a disclosure to the law practice, not directly with the client. Section 317 does not lend itself to be read as Mr Autore suggested, that the reference to law practice is a reference to the barrister and the reference to the client is a reference to the solicitor.

1. Section 317(2) is headed "Bar on recovering proceedings until legal costs assessed". Likewise, it refers to a law practice, client or associated third party payer. It also does include a reference to "another law practice".

1. The Magistrate recorded in her judgment that Mr Autore asserted that s 317 applied because Mr Folino-Gallo had failed to provide an estimate, he had not properly disclosed. Therefore, he could not commence proceedings until a cost assessment took place. The Magistrate was of the view that Mr Folino-Gallo had provided sufficient disclosure and s 317 did not apply.

1. Finally, s 351 of the Act provides a remedy to the law practice [the solicitor] to make an application for costs assessment of another law practice [the barrister] to have a bill of costs rendered by another law practice [the barrister] to be assessed. The time period for an application to be made is within 60 days of the bill being given or the request for payment being made, or the costs being paid if neither a bill was given nor a request was made. The Magistrate considered Mr Autore's argument that as ss 351 and 352 of the Act applied, payment of the invoices was not required because the bills had not yet been assessed by a costs assessor. The Magistrate stated that there were time restrictions and they had now passed and there was no basis upon which the bills needed to be assessed prior to payment. The Magistrate was correct in saying that there was no basis upon which the bills needed to be assessed under ss 351 and 352 of the Act.

1. Turning to Mr Autore's submission that because the costs disclosure and forwarding letter was furnished much of the legal work had been done, the barrister could not have complied with his disclosure obligation earlier. On 13 March 2010, Mr Folino-Gallo started work on the Great Wall Resources matter. On 17 March 2010, Mr Folino-Gallo furnished his costs agreement and covering letter to the solicitor. Given that the work undertaken by Mr Folino-Gallo was for an application before the duty judge to remove a lien in the Federal Court, the legal work had to be carried out on an urgent basis. In these circumstances, it was not reasonably practicable for Mr Folino-Gallo to give an estimate of the total legal costs prior to 17 March 2010.

1. Alternatively, Mr Autore submitted if it was considered that the costs disclosure was made when it was reasonably practicable, then Mr Folino-Gallo was still obliged to supply a range of estimates of the total legal costs together with an explanation of the major variables to him. The obligation of Mr Folino-Gallo was to disclose to the solicitor the information necessary for the solicitor to comply with s 310(1). The Magistrate made a finding that Mr Folino-Gallo had disclosed sufficient information to Mr Autore as required under s 310 of the Act. The costs agreement set out the rates that Mr Folino-Gallo charged for specific items of work and clause 4.5 set out when Mr Folino-Gallo would send invoices [CB 190]. Mr Autore was responsible for providing instructions to Mr Folino-Gallo as to the work he had to undertake once he obtained those instructions. In these circumstances, Mr Autore was in a position to estimate, from the items set out in clause 4 of the costs agreement, a range of estimates of the total legal costs and an explanation of the major variables that will affect the calculation of those costs, and details of the intervals (if any) at which the client will be billed.

1. In my view, the Magistrate did not err in her construction of ss 309, 310 and 317 of the Legal Profession Act. The result is that the appeal is dismissed.

1. The decision of her Honour Magistrate Robinson dated 2 December 2013 is affirmed. The amended summons filed 21 May 2014 is dismissed.

1. Costs are discretionary. Costs usually follow the event. The plaintiff is to pay the defendant's costs as agreed or assessed.

The Court orders that:

(1) The appeal is dismissed.

(2) The decision of her Honour Magistrate Robinson dated 2 December 2013 is affirmed.

(3) The amended summons filed 21 May 2014 is dismissed.

(4) The plaintiff is to pay the defendant's costs as agreed or assessed.

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Decision last updated: 13 June 2014