D.M. Wright and Associates v Murrell (No 2)

Case [2021] QDC 141

DISTRICT COURT OF QUEENSLAND

CITATION:

D.M. Wright & Associates v Murrell (No 2) [2021] QDC 141

PARTIES:

D.M. WRIGHT & ASSOCIATES
(Appellant)
v

MURRELL

(Respondent)

FILE NOS:

BD 2586/2020

BD 280/2021

DIVISION:

Appeals

DELIVERED ON:

16 July 2021

DELIVERED AT:

Brisbane

HEARING DATE:

29 March 2021, 17 May 2021

JUDGE:

Barlow QC DCJ

ORDERS:

In BD2586 of 2020:

1.   The appeal be allowed in part.

2.   The decision of the Magistrate be set aside.

3.   The Certificate of Costs dated 30 October 2018 be varied by:

(a)   altering the figure in the chapeau of paragraph 3 to $20,987.36;

(b)  altering the figure for professional fees, in paragraph 3a to $34,248.68;

(c)   altering the figure for the total, where it first appears in paragraph 3, to $36,607.66;

(d)  altering the figure for the total, where it appears the second time in paragraph 3, to $20,987.36; and

(e)   altering the final figure in paragraph 5 to $23,830.13.

4.   The appeal otherwise be dismissed.

5.   The parties, by 23 July 2021, provide written submissions of no more than 5 pages about the costs of the appeal.

In BD280 of 2021:

1.   The appeal be dismissed.

2.   The appellant pay the respondent’s costs of the appeal.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – TAXATION AND OTHER FORMS OF ASSESSMENT – APPEAL, REVIEW OR REFERENCE – RELEVANT PRINCIPLES – GENERALLY – application made for assessment of costs by costs assessor pursuant to Legal Profession Act – costs assessor completed assessment – appellant sought review of costs assessor’s decision on various grounds – Magistrate dismissed review application – appellant appealed – whether the magistrate applied wrong principles – whether magistrate failed to consider grounds of review – whether cost’s assessor’s reasons were inadequate – whether short charges could be claimed by the appellant – whether reductions made were based on errors of law or fact.

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – TAXATION AND OTHER FORMS OF ASSESSMENT – APPEAL, REVIEW OR REFERENCE – PROCEDURE AND EVIDENCE – COSTS OF APPEAL, REVIEW OR REFERENCE – appellant sought review of cost’s assessor’s decision on various grounds – orders were made in interlocutory hearings reserving costs of interlocutory issues – Magistrate ordered that some reserved costs be paid by the appellant – whether Magistrate erred in exercising discretion in making such an order.

Legal Profession Act 2007, ss 340, 341, 342
Magistrates Court Act 1921, s 45
Uniform Civil Procedure Rules 1999, rr 720, 737, 738, 742, 765, 785

Allesch v Maunz (2000) 203 CLR 172, cited
Casey v Quabba & Anor [2005] QSC 356, cited
Chapman v Harris [2019] QDC 47, cited
CSR Ltd v Della Maddalena (2006) 224 ALR 1, cited
Hughes v O’Kane [1994] QSC 123, followed
Jezer Construction Group Pty Ltd v Conomos [2004] QSC 440, considered
King v Allianz Australia Insurance Ltd [2015] QCA 101, applied
Leneham v Legal Services Commissioner [2017] QCA 137,…

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Details
AGLC
D.M. Wright and Associates v Murrell (No 2) [2021] QDC 141
Case
[2021] QDC 141
Decision Date

CaseChat Overview and Summary

In D.M. Wright and Associates v Murrell (No 2), the appellant, D.M. Wright and Associates, appealed against the decision of the Magistrate to dismiss their review application regarding the assessment of costs conducted by a costs assessor. The dispute primarily revolved around the legality and adequacy of the costs assessor's assessment and the subsequent review by the Magistrate. The appellant argued that the Magistrate applied incorrect principles, failed to consider certain grounds of review, and that the assessor's reasons were inadequate. Additionally, the appellant contested the disallowance of certain short charges and the reductions made in the assessment. The Magistrate had ruled that the costs assessor's process, though lengthy, was fair and efficient, and in line with the rules of natural justice.

The court had to determine whether the Magistrate erred in their application of legal principles, whether they failed to consider relevant grounds of review, and if the costs assessor's reasons were sufficient. Furthermore, the court assessed the validity of the disallowance of short charges and whether the reductions were based on errors of law or fact. The court also needed to decide whether the Magistrate correctly exercised their discretion in ordering some reserved costs to be paid by the appellant.

The court found that while the costs assessor's process was thorough and adhered to the rules of natural justice, certain aspects of the assessment and the Magistrate's review were flawed. The court concluded that the Magistrate did not apply the correct principles and failed to consider some grounds of review. Additionally, the disallowance of short charges and certain reductions were deemed to be based on errors of law or fact. Consequently, the appeal was allowed in part, and the decision of the Magistrate was set aside. The court varied the Certificate of Costs and ordered the appellant to pay the respondent's costs of the appeal. The parties were also directed to submit written submissions regarding the costs of the appeal within a specified timeframe.

Orders

Orders of the court

In BD2586 of 2020:

1. The appeal be allowed in part.

2. The decision of the Magistrate be set aside.

3. The Certificate of Costs dated 30 October 2018 be varied by:

(a) altering the figure in the chapeau of paragraph 3 to $20,987.36;

(b) altering the figure for professional fees, in paragraph 3a to $34,248.68;

(c) altering the figure for the total, where it first appears in paragraph 3, to $36,607.66;

(d) altering the figure for the total, where it appears the second time in paragraph 3, to $20,987.36; and

(e) altering the final figure in paragraph 5 to $23,830.13.

4. The appeal otherwise be dismissed.

5. The parties, by 23 July 2021, provide written submissions of no more than 5 pages about the costs of the appeal.

In BD280 of 2021:

1. The appeal be dismissed.

2. The appellant pay the respondent’s costs of the appeal.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

I have read much of the correspondence generated in the process and I have scanned the balance of it. My rough calculation of the number of pages of correspondence devoted to various issues reveals the following.(a)Most of the first 111 pages concerned the delivery issue, all before the assessor had the file or even, for most of it, the order appointing him to assess the costs.(b)He gave procedural directions by letter of 9 February 2018 (p 62ff).(c)Pages 112 to 161 concerned disputes about the solicitor having access to the file and, in part, the disclosure issue.(d)The client provided lists of particular objections to the bills under short covering letters of 23 March 2018 (pp 181, 183 are the covering letters).(e)The solicitor provided her responses to the objections on 10 May 2018 (p 195 is the covering letter). (f)On 21 May 2018, the assessor sought submissions on a number of items that were not the subject of objections. He also informed the parties that he had decided that the solicitor had not given sufficient disclosure on one file. However, he did not consider it to be a material non-disclosure and therefore he would still assess costs on the basis of the relevant costs agreement. He did say, though, that he would make an appropriate reduction of costs at the time the assessment was completed (pp 196-203).[41] He told the parties that he would give reasons for that decision, if requested, at the end of the assessment. (g)That led to a flurry of correspondence (pp 207-260), mostly from the solicitor, in which, among other things, she demanded that the assessor give his reasons then and she accused him of failing to provide natural justice if he did not give his reasons immediately. In the end, the assessor gave reasons on 26 June 2018 (pp 261-267). (h)On 10 July 2018, the solicitor made submissions on matters that had been raised by the assessor in his letter of 21 May 2018 (pp 290-309). It appears that, at the end of that letter, the solicitor gave notice that she would provide a schedule of “short charges” that she intended to claim.[42](i)On 13 July 2018, the assessor responded to a number of issues raised by the solicitor (including an alleged apprehension of bias) and sought submissions on whether the solicitor should be permitted to claim “short charges” (p 311). The parties made submissions and exchanged correspondence about that issue over the following few weeks (pp 314-373). On 15 August 2018, the assessor gave his decision and reasons for not allowing short charges and explained or responded to a number of other issues that the solicitor had raised in her correspondence (pp 374-378).(j)The solicitor then wrote again to the assessor, including debating his decision not to allow short charges (pp 380-383).(k)On 4 September 2018, the assessor asked whether the solicitor’s costs had been paid, which led to another flurry of correspondence on that straightforward question (pp 392-401, 404-408). The solicitor contended that it was irrelevant, notwithstanding that r 737 requires the assessor to certify the amount payable by whom and to whom, having regard to the amount at which costs were assessed and the costs of the assessment. (It is a reasonable construction of this requirement, in my view, that the question of who is to pay whom depends in part on whether any part of the solicitor’s fees had already been paid.)(l)On 5 September 2018, the assessor informed the parties that his assessment would reduce the solicitor’s costs by more than 15% and he sought submissions on the costs of the assessment. He later determined that the solicitor should pay those costs and, in effect, assessed those costs by seeking a bill from the client’s solicitors, the solicitor’s objections to the bill and a response from the client. This generated considerable correspondence and submissions (pp 402, 409-541).(m)The assessor sent his certificate to the parties and the Magistrates Court on 30 October 2018.[41]I shall refer to this as the “disclosure adequacy issue”.[42]The last page of the letter is not in the agreed bundle but, in his reasons for not allowing short charges, the assessor said, “At the end of this letter [of 10 July 2018] I was advised that a schedule of short charges is being prepared and would be provided in the future.”Conclusions on costs and fees for assessment

Ratio Decidendi

Legal Principle Established

Relevantly to this appeal, Boddice J went on to say the following.(a)The directions made by the costs assessor included a timetable for the delivery of notices of objection or submissions by the clients and for submissions in response by the solicitor. Those directions were consistent with the requirements of r 720(2). They provided for a process which was fair and efficient, having regard to the nature and scope of the dispute which related to the whole of the bills, in the context of an alleged failure to satisfy the disclosure obligations in the LPA. The provision for submissions, including in reply, met the obligation to act in accordance with the rules of natural justice.[35](b)Where a client is seeking an assessment of the whole of the bills and that is ordered, all of the costs are to be assessed, as they are the costs in dispute for the purposes of the UCPR. The assessment is not restricted to only those items specifically raised by the client. However, that assessment must be conducted fairly and efficiently, and in accordance with the rules of natural justice. Compliance with the rules of natural justice necessitates the costs assessor giving the solicitor the opportunity to make submissions on any other items of concern.[36](c)McGinness DCJ was correct in observing that the mere fact the costs of the assessment exceeded the amount being assessed did not mean the result must be wrong. Regard must be had to the nature and scope of the dispute. Where, as was the case there, a central issue in the dispute is whether the solicitor has complied with the disclosure obligations, the assessment of the issues in dispute is likely to involve considerable expense.[37][35][2014] QCA 301, [34].[36][2014] QCA 301, [36], [38].[37][2014] QCA 301, [43].Consideration of the process The amount of correspondence exchanged in the course of the assessment in this case is extraordinary. The certificate was dated 30 October 2018 and the assessor posted it to the Magistrates Court and to the parties the next day. From the date of his appointment to then, the correspondence between the parties and the assessor (not including the certificate, its attachments and the assessor’s covering letter) totalled 541 pages. Given that volume, it is not surprising that all parties’ costs and the assessor’s fees were so high.[38][38]The correspondence comprises part C of the agreed bundle, which has a total of 705 pages. As that total indicates, a further substantial volume of correspondence followed the publication of the certificate of assessment. The real issue is whether those costs and fees were justifiable. Mr Hartwell submitted that the costs of the assessment were increased substantially by the manner in which the client (by his solicitors) conducted the process. Mr Hartwell submitted that the first 153 pages of the correspondence related to two preliminary issues that were raised by the client and were determined against him. These two issues are also separately raised in another ground of appeal, arising under a ground of review which the solicitor contends the magistrate did not consider.[39] I shall not go into them at this juncture. However, I do record that the solicitor contends that the extent of correspondence and, therefore, costs generated by these issues is a clear example of the assessor’s failure to adopt a reasonable process for the assessment and, on these issues, is the fault of the client raising them.[39]See paragraph [8](c)(v) above.