Cyngler v Crawford
[2011] VSC 654
•19 August 2011
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2011 2814
| JACK CYNGLER trading as CYNGLER KAYE LEVY | Plaintiff |
| v | |
| GILBERT CRAWFORD | First Defendant |
| MELBOURNE MAGISTRATES' COURT | Second Defendant |
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JUDGE: | RANDALL AsJ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 19 August 2011 | |
DATE OF JUDGMENT: | 19 August 2011 | |
CASE MAY BE CITED AS: | Cyngler v Crawford and anor | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 654 | Revised 15 December 2011 |
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LEGAL PRACTITIONERS - Costs - Plaintiff sued for costs in the Magistrates’ Court – Plaintiff failed to make costs disclosure to the first defendant - Plaintiff can not maintain proceedings without a costs review - First defendant made complaint to the Legal Services Commissioner regarding costs and disciplinary issues - Legal costs subject to a civil complaint precluded a review under s 3.4.48 - Plaintiff ought to have proceeded in the Victorian Civil and Administrative Tribunal as per notice from the Legal Services Commissioner - Plaintiff submitted costs ought to be assessed according to a fair and reasonable value of the legal service provided – Originating Motion dismissed - Legal Profession Act 2004, s 4.3.7, 3.4.17 and 3.4.48.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms J Mauras, a trainee solicitor (who appeared by leave) | Cyngler Kaye Levy Lawyers |
| For the First Defendant | Appeared on his own behalf | |
| For the Second Defendant | No appearance |
HIS HONOUR:
The plaintiff is a solicitor trading as Cyngler Kaye Levy.
The plaintiff sued the first defendant in the Magistrates’ Court of Victoria at Melbourne with respect to legal costs in the sum of $3,000.
On 12 May 2011, the Magistrate made the following order:
Order that this complaint is stayed until the plaintiff’s bill of costs has been reviewed by the Costs Court under Division 7 of Part 3.4 of the Legal Profession Act 2004 (‘the Act’).
The question of the costs of this proceeding are reserved.
Liberty to either party to re-list this proceeding before me upon reasonable notice to the other party.
The plaintiff filed an originating motion between parties and a summons thereon filed 31 May 2011. The summons of 31 May 2011 came on for hearing before Mukhtar AsJ on 21 June 2011. Mukhtar AsJ gave leave to the plaintiff to file an originating motion which deleted reference to an appeal but properly stated that the relief sought and the grounds in accordance with the rules. Subsequently, an amended originating motion between parties was filed on 6 June 2011. The relief sought in the amended originating motion was for:
An order for certiorari setting aside the decision of His Honour Magistrate Lauriston … on the basis of mistake of law and, in substitution thereof, final orders in this Court that the First Defendant is liable to pay the Plaintiff the sum of $3,000 plus costs and interest calculated pursuant to the Penalty Interest Rates Act 1983.
The amended originating motion was referred to the Practice Court on 19 August 2011. By order made by the Honourable Justice Hargrave pursuant to r 77.05(1) the originating motion was referred back to an associate justice for determination.
Mr Crawford did not object to leave being granted to Ms Mauras to appear on behalf of the plaintiff. Leave was granted as it was evident that Ms Mauras was the person best placed to assist the Court. Ms Mauras remained subject to the supervision of her principal who sat at the Bar table.
The grounds for relief set out in the amended originating motion were:
(a)Failing to apply the principles enunciated in Fahey v Hutchinson Legal (Legal Practice) [2007] VCAT 2399 (10 December 2007) to the question of whether there had been a failure to disclose under s 3.4.11 of the Act;
(b)staying the proceeding under 3.4.17(2) of the Act pending a costs review in the Supreme Court, because s 3.4.48 of the Act applies to prevent the legal practitioner from bringing an application for costs review in the Supreme Court;
(c)failing to determine the fair and reasonable value of the legal services provided by the plaintiff to the first defendant pursuant to s 3.4.19 of the Act, and failing to make final orders for the recovery of such fair and reasonable amount by the plaintiff against the First Defendant.
The reasons for decision made on 12 May 2011[1] were transcribed but not the evidence or argument before the Magistrate.
[1]JC-1 to the affidavit of Jack Cyngler sworn 6 July 2011.
Background
The first defendant attended upon the plaintiff on Friday, 27 November 2009. The first defendant had attended pursuant to a Law Institute of Victoria referral. However the Magistrate accepted the plaintiff’s evidence that the defendant did not tell him that the basis of his attendance upon him, in relation to costs, was that the first half hour was free and thereafter he needed advice or must be given advice as to the charge that the solicitor would be paid.
The first defendant instructed Mr Cyngler about two matters. The first was with respect to a piece of litigation in the court listed for 7 December 2009 where the first defendant was suing a liquidator for damages to the limit of the jurisdiction of the Magistrates’ Court for the tort of malicious prosecution. The other matter was not so pressing and sought relief in the Federal Court. Mr Cyngler told Mr Crawford that he would need to brief a barrister to represent Mr Crawford and he would try to arrange a conference between the barrister and Mr Crawford for the following Monday.
Mr Cyngler told Mr Crawford orally that he would charge $375 an hour and Mr Crawford’s denial of that I do not accept. It is, however, common to both parties that there was no written disclosure pursuant to s 3.4.4.9 of the [Act] and there was certainly no costs agreement.[2]
[2]Reasons for Decision at paragraph 8.
Ms Kaye was briefed. Ms Kaye sent Mr Cyngler on 27 November 2009 a costs agreement between herself and Mr Cyngler which is Exhibit 5.[3]
[3]Reasons for Decision at paragraph 13.
Mr Crawford conferred with Ms Kaye on Monday, 30 November 2009.
On Wednesday, 2 December 2009, Mr Crawford terminated Mr Cyngler’s retainer.[4]
[4]Reasons for Decision at paragraph 23.
Section 3.4.9 of the Act sets out the requirement for a disclosure of costs to clients.
Section 3.4.11 is in the following terms:
How and when must disclosure be made to a client?
(1)Disclosure under s 3.4.9 must be made in writing before, or as soon as practicable after, the law practice is retained in the matter.
…
Section 3.4.17 is in the following terms:
Affect of failure to disclose
(1)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 (as the case may be) need not pay the legal costs unless they have been reviewed under Division 7.
(2)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 reviewed under Division 7.
…
Section 3.4.19 of the Act is in the following terms:
On what basis are legal costs recoverable?
Subject to Division 2, legal costs are recoverable:
(a)…
(c)If neither (a) nor (b) applies, according to the fair and reasonable value of the legal services provided.
Division 7 relating to costs review by a costs court includes:
3.4.48Legal costs subject to a civil complaint are not reviewable.
Despite anything to the contrary in this Part, legal costs that are or have been the subject of a civil complaint under Chapter 4 may not be the subject of a costs review under this Division.
The kernel of Ms Mauras’ submission was that as a complaint had been made by the first defendant to the Legal Services Commissioner in January 2010, the plaintiff was, by operation of s 3.4.48, precluded from applying for a costs review under Division 7. Accordingly, the Magistrate ought to have found that by way of the principles set out in Fahey,[5] the plaintiff ought to have been excused from the failure to provide the disclosure statement “as soon as practicable” and that, in the absence of a costs agreement the costs ought to have been assessed according to a fair and reasonable value of the legal services provider.
[5]Faye v Hutchinson Legal (Legal Practice) [2007] VCAT 2399 (10 December 2007).
On 4 June 2010, the Legal Services Commissioner wrote to the plaintiff with respect to Mr Crawford’s complaint received on 4 January 2010 which raised disciplinary issues and a civil dispute, being a costs dispute. The Legal Services Commissioner notified:
Costs Dispute
I have considered this matter and now give written notice, pursuant to s 4.3.7 of the Legal Profession Act 2004, that having taken steps to resolve this dispute and it not having been resolved within a reasonable time:
(a)the civil dispute between you and the complainant could not be resolved by me; and
(b)a party to the dispute may apply to the Victorian Civil and Administrative Tribunal (“the Tribunal”) for resolution of the civil dispute. Such application must be made within 60 days after receipt of this notice from me.
Notwithstanding the notification by the Legal Services Commissioner, the plaintiff chose to issue proceedings in the Magistrates’ Court at its peril. The Magistrate considered the exceptions to the requirement of disclosure[6] and found that none of the exceptions applied.[7]
[6]Reasons for Decision at paragraph 34.
[7]Reasons for Decision at paragraph 36.
The Magistrate then found as follows:
The question then is, given the circumstances that I have outlined, has Mr Cyngler had insufficient time to give Mr Crawford a disclosure statement? Well plainly not.[8]
[8]Reasons for Decision at paragraph 37.
That finding was a question of fact. Ms Mauras conceded that apart from what is set out in the reasons for decision, there is no evidence or submission set out in relation to that point. It was open to the Magistrate to make the finding at paragraph 37. Accordingly, there was no error on the record which could constitute jurisdictional error to give rise to relief by way of certiorari.
The effect of s 3.4.17 was that the plaintiff could not maintain the proceeding unless the costs had been reviewed under Division 7. The costs could not be reviewed under Division 7 by virtue of s 3.4.48. The plaintiff had the option to apply to VCAT, which Ms Mauras advised the Court would have included resolution of the costs dispute. The plaintiff chose not to. It was open to and proper for the Magistrate to stay the proceedings if not to dismiss the same.
Given that suit was not maintainable this Court does not need to consider upon what basis any legal costs were recoverable pursuant to Division 4 of the Act.
The amended originating motion will be dismissed.
At all times Mr Crawford has acted for himself. Accordingly, he is not entitled to costs in the usual sense.[9] There will be an order that the plaintiff pay the first defendant’s expenses (being out of pocket payment) to be assessed by the Costs Court in default of agreement.
[9]Cachia v Hanes (1994) 120 AALR 385.
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