Dart Mining Nl v Foster Nicholson Jones - [2016] VSC 836

IN THE SUPREME COURT OF VICTORIA

AT MELBOURNE
COSTS COURT

S CI 2015 05737

DART MINING NL	Applicant
v
FOSTER NICHOLSON JONES (ABN 58 133 023 426)	Respondent

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JUDGE:	Wood AsJ
WHERE HELD:	Melbourne
DATE OF HEARING & DECISION:	27 June 2016
DATE OF REASONS:	30 June 2016
CASE MAY BE CITED AS:	Dart Mining NL v Foster Nicholson Jones (ABN 58 133 023 426)
MEDIUM NEUTRAL CITATION:	[2016] VSC 836

REASONS FOR DECISION

APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr J White	Cooper Grace Ward
For the Respondent	Ms D Paver	Debra Paver

HIS HONOUR:

This proceeding relates to legal costs charged for work performed by the respondent. The applicant seeks to review the costs pursuant to the Legal Profession Act 2004 (‘the Act’). The Summons was filed 6 November 2015 and attaches a number of invoices claiming gross sums. They are divided into five groups, the first four of which, designated (a) to (d), totalling $91,146.07, are not relevant to these reasons. There is no dispute as to the applicant’s standing to seek to review those costs. The fifth group, designated (e), contains ten gross sum invoices dated between 3 March 2014 and 14 August 2015 totalling $149,894.53. They are all headed ‘General Advice’ and were managed under one file by the respondent.

A preliminary issue has arisen in relation to this fifth category. The question is whether the ‘General Advice’ file constitutes one retainer to provide general advice from time to time when matters arose or whether there are separate retainers for discrete issues which arise from time to time and are just conveniently run under the ‘General Advice’ file. I determined this issue at a hearing on 27 June 2016 and now publish my reasons.

The determination of this issue settled any controversy about whether the applicant is out of time to review some of the legal costs in group (e) as a result of the provisions in section 3.4.38(5) of the Act on the basis that final bills were rendered prior to 6 November 2014.

There are three affidavits filed. The respondent relies on affidavits of Leath John Nicholson and John Cornelius both sworn 7 April 2016. Mr Cornelius was the interim CEO of the applicant at the time the respondent was engaged to perform work for the applicant and was intimately involved in discussions and negotiations. In actual fact he supports the respondent’s position in relation to the issue that falls to be determined.

The applicant relies on an affidavit of James Chirnside sworn 21 June 2016. He is described as the Managing Director of the applicant and the affidavit merely identifies aspects of the documentation relied upon which are relevant to the applicant’s legal argument. He does not challenge the facts contained in the respondent’s affidavits. A paragraph which merely conveyed a legal conclusion was struck out at the hearing on 27 June 2016.[1]
[1]Paragraph 7 of the affidavit.

Both parties filed written submissions dated 22 June 2016. The applicant contends there…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] VSC 836
Decision Date: 30 June 2016

CaseChat Overview and Summary

The Supreme Court of Victoria dealt with a proceeding brought by Dart Mining NL seeking to review legal costs charged by Foster Nicholson Jones, a law firm. The dispute centred on ten invoices totaling $149,894.53, all labelled as 'General Advice', managed under one file by the respondent. The key issue was whether these invoices represented one overarching retainer or multiple separate retainers for discrete issues. This issue was crucial because it determined the timeliness of Dart Mining's challenge to the costs under the Legal Profession Act 2004.

The court found that the work was managed under one file at Dart Mining's request, but this arrangement did not equate to one retainer. Instead, the evidence showed that the respondent provided specific estimates for each category of work and billed separately for each. The court concluded that the contracting parties intended for there to be separate retainers for discrete issues, which aligned with the intention of the Act to encourage timely review of interim and final bills by sophisticated clients. The court also considered the marketplace norms where sophisticated clients prefer not to have multiple costs agreements and separate bills for a general retainer.

As a result of this finding, some of the costs were time-barred from review under the Act as they were billed before 6 November 2014. The court provided a detailed analysis of when final bills were rendered for each category of work, determining that Dart Mining could review around 70% of the total costs of $241,040.60. The court ordered the law firm to draw itemised bills for the allowable work and set timelines for filing objections and taxation.

This decision highlights the importance of clearly defining retainers and providing specific estimates and billing for discrete legal services, particularly when managing work under a general retainer. The court's ruling ensures that costs can be reviewed in a timely manner, in line with the provisions of the Legal Profession Act 2004.

Orders