Del Monaco v Velos & Velos Lawyers
[2022] VSC 160
•13 April 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PRACTICE COURT
S ECI 2021 02219
| FIORELLA DEL MONACO | Applicant |
| v | |
| VELOS & VELOS LAWYERS | Respondent |
S ECI 2021 02220
| FIORELLA DEL MONACO | Applicant |
| v | |
| THOMAS FLITNER OF FLITNER & COMPANY LAWYERS | Respondent |
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JUDGE: | Gorton J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 28 March 2022 |
DATE OF RULING: | 13 April 2022 |
CASE MAY BE CITED AS: | Del Monaco v Velos & Velos Lawyers |
MEDIUM NEUTRAL CITATION: | [2022] VSC 160 |
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COSTS - Costs assessment – Out of time/limitation period – Whether just and fair in all the circumstances to deal with application under Legal Profession Uniform Law s 198 – Application refused where applicant did not provide a sufficient reason for delay – Where fees charged were modest – Where complaint was in negligence not in excessive costs – Where more than three years since final bill – Where delay arises in circumstances of real and prompt attempts to challenge costs – Where complaint lodged with Legal Services Commissioner within limitation period – Where response to complaint occurred outside of limitation period – Where applicant had commenced VCAT proceedings within the limitation period.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Self-represented litigant | |
| For Velos & Velos Lawyers | Ms PF Robertson of Ethical Costing and Legal Services | |
| For Thomas Flitner of Flitner & Company Pty Ltd | Self-represented litigant |
HIS HONOUR:
A. Introduction
Ms Fiorella Del Monaco, the applicant, used to work at Telstra. She contends that she was bullied at Telstra and suffered a mental injury as a result. She applied for no-fault benefits from Telstra under the Safety, Rehabilitation and Compensation Act 1988 (Cth), commonly known as Comcare. On 6 July 2018, Telstra denied liability to pay benefits, on the basis that any injury that Ms Del Monaco suffered was a result of reasonable disciplinary action undertaken against her.[1]
[1]Cf the definition of ‘injury’ in s 4(1) of the Safety, Rehabilitation and Compensation Act 1988 (Cth).
As a consequence of this, she sought advice from two law firms, Flitner & Company Pty Ltd, and then Velos & Velos Lawyers. Both firms rendered bills, and Ms Del Monaco has paid those bills. Ms Del Monaco has now applied by separate summonses filed in the Costs Court in accordance with s 198 of the Legal Profession Uniform Law[2] to have their costs assessed. She is out of time, and the Costs Court has referred to me applications by her for a determination, made under s 198(4) of the Legal Profession Uniform Law, that would permit the assessments to be ‘dealt with by the costs assessor’. Ms Del Monaco represented herself. Mr Thomas Flitner appeared for his firm, and Ms Robertson, a solicitor with costs expertise, appeared for Velos & Velos Lawyers.
[2]Which is schedule 1 to the Legal Profession Uniform Law Application Act 2014 (Vic) and, pursuant to s 4, applies as if it were an Act.
It was agreed that the applications in each proceeding would be heard together, and that the affidavit material filed in each proceeding could be used as evidence in the other proceeding. Ms Del Monaco tended, understandably, to refer to Mr Flitner and to Mr Velos, rather than to Flitner & Company Pty Ltd and Velos & Velos Lawyers. Nothing turns on that. I will, for the most part, use the firm names.
B. The legal test
Section 198 of the Legal Profession Uniform Law allows a client of a law practice to apply for an assessment of legal costs payable by them to that law practice. However, an application under that section must be made within 12 months after the bill was given or the request for payment was made.[3] Under s 198(4), an application made out of time may be dealt with by the costs assessor if the ‘designated tribunal’ (here, a judge of this Court) determines
after having regard to the delay and the reasons for the delay, that it is just and fair for the application for assessment to be dealt with after the 12-month period.
[3]Legal Profession Uniform Law Application Act 2014 (Vic) sch 1 s 198(3)(a).
The section requires me to form a view as to what is just and fair in all the circumstances, including matters such as the period of the delay, the reasons for the delay, and whether there is any prejudice to the respondent. It requires a consideration of the right of one party to seek an assessment against the legitimate expectation of the other party that any request for an assessment will be made within the statutory period.[4] As with any limitation period, the evaluation must acknowledge that the imposition of the default 12-month period is the legislature’s recognition that the welfare of society is best served by claims for an assessment being brought within that period even if that may result in good claims not being able to be pursued.[5] The onus is on Ms Del Monaco to persuade me that it is just and fair for the application for an assessment to be dealt with after the 12-month period.
[4]See, eg, Rohowskyj v S Tomyn & Co [2015] VSC 511, [3]–[5] (John Dixon J), citing Standford v Standford (2012) 247 CLR 108, The Concept Developer Pty Ltd v Conroy [2015] VSC 464, Gavriliuc v Geron [2013] VSC 263 and Tomasevic v Nowicki Carbone [2015] VSC 302.
[5]Cf Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, 553 (McHugh J).
C. The background circumstances
On 20 June 2018, Ms Del Monaco sought legal advice from Flitner & Company Pty Ltd in relation to her claim against Telstra. Some of the legal work performed for Ms Del Monaco was performed by an employee lawyer, Kara Bramham. Proceedings were commenced in the Commonwealth Administrative Appeals Tribunal (‘the AAT’) in which Telstra’s decision to reject Ms Del Monaco’s claim for no-fault benefits was challenged. The matter resolved at a mediation at the AAT on 10 October 2018. As part of that resolution, Ms Del Monaco signed a ‘separation agreement’ with Telstra, and consent orders were made by the AAT affirming Telstra’s decision.
Under the ‘separation agreement’, Ms Del Monaco’s position was made redundant, and Telstra agreed to pay her $125,503, $5,952 in relation to her legal costs and disbursements, and the balance of any accrued entitlements to annual leave and long service leave which were estimated to be approximately $12,564. By cl 3.2 of that agreement, Ms Del Monaco released Telstra
from all claims and liability arising directly or indirectly out of the [e]mployment or [s]eparation, excluding any claim or liability in respect of workers’ compensation under the applicable legislation.
By cl 3.3 of that agreement, Ms Del Monaco agreed not to make any claim, complaint or proceeding against Telstra arising directly or indirectly out of the employment or separation. Read together, it seems that Ms Del Monaco agreed to receive the identified figure as a redundancy payment, agreed not to bring any common law damages action, and retained the right to bring a claim for no fault benefits under Comcare. But the consent order made affirming the reviewable decision by Telstra may have operated to prevent Ms Del Monaco from obtaining any such no fault benefits.
Ms Del Monaco confirmed to me orally that if she had not signed this agreement, Telstra could have terminated her employment on medical grounds, in which case she would not have received the $125,503, although she would have been entitled to $4,000.
Flitner & Company Pty Ltd sent four invoices to Ms Del Monaco, dated respectively 26 July 2018 (for $1,075), 2 October 2018 (for $5,619), 12 October 2018 (for $5,952), and 20 February 2019 (for $925). I observe that the first two invoices were for work done prior to the AAT mediation, the third invoice was for attending the AAT mediation and was in the same amount as the amount Telstra agreed to pay in relation to her costs and disbursements, and the fourth invoice was for work done after the mediation. Each invoice included a statement to the effect that Ms Del Monaco had the right to have the invoices assessed. Ms Del Monaco paid each invoice, or had moneys applied in satisfaction of them from moneys she had placed in trust.
On 31 October 2018, which was after the mediation but before Flitner & Company Pty Ltd’s final invoice, Flitner & Company Pty Ltd wrote to Ms Del Monaco, presumably in response to a complaint by her, and asserted that Ms Del Monaco had signed the separation agreement after it had been explained to her, and that at the mediation Ms Del Monaco had expressed satisfaction with the result. In the letter, they also said that they would make their file available to her by 7 November 2018.
Flitner & Company Pty Ltd’s 20 February 2019 invoice included charges for emails and communications with Ms Del Monaco after it was apparent that she was dissatisfied with the result achieved at mediation and, it seems, after she may have terminated the retainer. But, as Ms Del Monaco accepted, she had, after the mediation, continued to call and to email Flitner & Company Pty Ltd to talk about her case and to seek advice, and she had continued to receive communications and advice from Flitner & Company Pty Ltd.
At least by March 2019, Ms Del Monaco was dissatisfied with the service that she had received from Flitner & Company Pty Ltd. In March 2019, Ms Del Monaco sent a complaint to the Victorian Legal Services Commissioner in relation to Flitner & Company Pty Ltd’s work. I was not provided with a copy of that complaint. It seems the complaint included the costs incurred on the last invoice dated 20 February 2019.
On 15 April 2019, through the Victorian Legal Services Commissioner, Flitner & Company Pty Ltd offered to resolve the issue by reimbursing $500. Ms Del Monaco did not accept that offer. Flitner & Company Pty Ltd submitted that the ‘file was closed by the’ Victorian Legal Services Commissioner in April 2019. Ms Del Monaco told me, however, that as far as she knew this claim was still technically open.
On or about 16 May 2019, Ms Del Monaco commenced proceeding J41/2019 in the Victorian Civil and Administrative Tribunal (‘VCAT’) against Flitner & Company Pty Ltd. The VCAT documentation was not before me. VCAT has jurisdiction to hear costs disputes if they are for less than $29,160,[6] but also to hear claims for damages.[7] It emerges from the material that the VCAT claim against Flitner & Company Pty Ltd included a claim for damages said to have been suffered as a result of its allegedly negligent conduct of Ms Del Monaco’s Comcare claim. The claimed damages were for the lost opportunity to claim workers compensation from Telstra. Flitner & Company Pty Ltd’s defence was handled by its insurer and external lawyers retained by that insurer.
[6]Legal Profession Uniform Law Application Act 2014 (Vic) s 99.
[7]Australian Consumer Law and Fair Trading Act 2012 (Vic) s 184.
In June 2019, Ms Del Monaco retained Velos & Velos Lawyers to assist with her VCAT claim against Flitner & Company Pty Ltd. A letter from Velos & Velos Lawyers dated 5 June 2019 confirms that Ms Del Monaco contended that she had not given instructions to Flitner & Company Pty Ltd to have her case against Telstra in the AAT dismissed, and that Velos & Velos Lawyers would be assisting with the VCAT claim but not with any attempt to reinstate the no-fault benefits claim or any claims made to the Victorian Legal Services Commissioner.
There is no material before me that establishes that Ms Del Monaco otherwise sought to have Flitner & Company Pty Ltd’s costs assessed, or to challenge its bills on the basis that its fees were excessive or contrary to the arrangement between them and her.
On 7 October 2019, there was a VCAT compulsory conference at which the matter did not resolve. Ms Del Monaco appeared by counsel engaged by Velos & Velos Lawyers. On 8 October 2019, Velos & Velos Lawyers wrote to Ms Del Monaco and referred to the possibility of retaining an expert, possibly a Queen’s Counsel, to advise in relation to the potential of her AAT claim and the quantum that she might have been awarded if she had been successful, with a view to being able to call that person as an expert witness in the VCAT proceeding.
On 9 October 2019, Ms Del Monaco emailed Velos & Velos Lawyers. It is apparent that in the meantime counsel had prepared a memorandum setting out his views and had asked Ms Del Monaco to sign it. The memorandum was not in evidence. But Ms Del Monaco was not prepared to sign that document. The email concluded with Ms Del Monaco telling Velos & Velos Lawyers that if they were not willing to take on her ‘complex legal matter’ she would ‘pick up my files and pursue my matter with another lawyer’.
On 11 October 2019, there was a telephone discussion between Ms Del Monaco and Mr Velos. Mr Velos told Ms Del Monaco that he would no longer be taking on her matter. That day Ms Del Monaco sent an email to Velos & Velos Lawyers. In the email she repeated her complaint against Flitner & Company Pty Ltd, saying that in the AAT mediation she was ‘so confused that I thought I had no choice but to sign away everything including my workers compensation‘. The email was complimentary of the work done by Velos & Velos Lawyers. Mr Velos has produced a file note that reveals that Ms Del Monaco told him that she wanted to go to another firm of solicitors to take on her case, and that he told her that counsel retained had returned the brief because Ms Del Monaco had rejected his advice as to how to prepare or conduct the case. The file note suggests that Ms Del Monaco agreed to pay a final bill, that she would collect her files, and that everything was amicable. Then, on 14 October 2019, Ms Del Monaco emailed Velos & Velos Lawyers saying that she had ‘decided to go with a larger law firm’. The email included the following:
I thank you very much for your input into my matter which has been extremely helpful especially the VCAT side of things and ascertaining the litigation. You helped confirm I am on the right track with my complaint against Mr Flitner and Miss Bramham which one year ago I had no idea where the wrong was and how to pursue it.
…
Please let me know when my files are ready to be picked up.
Velos & Velos Lawyers sent Ms Del Monaco three invoices dated respectively 1 July 2019 ($18,500), 16 September 2019 ($10,700), and 11 October 2019 ($9,700 including $2,200 in counsel’s fees). Each invoice was accompanied by a statement setting out Ms Del Monaco’s rights to have the costs assessed by the Costs Court so long as she applied within 12 months. Each invoice was paid, or met from funds that had been placed in trust. On or about 17 October 2019, Ms Del Monaco collected her file, and was paid $300 being the balance sitting in trust. She signed a document saying she received the $300 in ‘full and final settlement of this matter’, and that she would continue with the VCAT matter on her own behalf or engage another firm of solicitors.
On 13 March 2020, which was some five months later, Ms Del Monaco emailed Mr Velos saying:
May I please come and see you in person sometime next week as I have had instruction by my current lawyer to obtain clarification on the legal fees I paid you with no resolve to my matter.
The same day, Mr Velos wrote back saying that he would need to recover his file from storage, and asking her to contact him in the next seven to fourteen days to arrange a time. On 30 March 2020, Ms Del Monaco emailed Mr Velos saying:
The discussion at this point in time is with regards to your cost disclosure and the vast legal fees I paid to you with no resolve to my legal matter because in the end you advised you did not have the capacity to resolve the Comcare component and the Barrister you allocated to my legal matter did not have the capacity to put together the ‘quantum of damages’ report required to resolve this.
I have currently allocated a barrister in this field of expertise who is taking a look at my AAT file and who will give me a final consensus with regards to a ‘quantum of damages’ report if there is one with accuracy as she is an accredited specialist in this field. Changes will need to be made to my witness statement submitted to VCAT whom my current lawyer will assist me with. As mentioned in my email to you part of the damages I am seeking is the return of part of the vast legal fees paid to you.
I infer that Ms Del Monaco was at this stage, with legal advice, intending to include the costs that she had paid to Velos & Velos Lawyers as part of the damages she was seeking from Flitner & Company Pty Ltd. It is not clear to what legal advice she was referring in this email. She told me that she sought advice from AdviceLine, another firm of solicitors, in relation to the dispute with Flitner & Company Pty Ltd but was told that they could not help her because her matter had ‘been closed off at [the] AAT level’, and they ‘did not want to get involved’ in the VCAT matter against Flitner & Company Pty Ltd. Be that as it may, it is clear that at least by this stage Ms Del Monaco was indicating some concern with Velos & Velos Lawyers about the level of fees that they had charged her.
Then, on 4 September 2020, Ms Del Monaco made a complaint to the Victorian Legal Services Commissioner in relation to Mr Velos. This was within a year of Velos & Velos Lawyers’ last invoice. Again, the complaint itself was not put before me. Ms Del Monaco said that this complaint was about legal fees, and that on 15 December 2020 the Victorian Legal Services Commissioner informed her that they could ‘not assist with’ her legal complaint as ‘it was a costs court matter.’
On 22 September 2020, Ms Del Monaco’s claim in VCAT against Flitner & Company Pty Ltd was ‘struck out with a right to apply to the Tribunal on proper grounds for reinstatement’. VCAT’s order makes it clear that the application was struck out because of a repeated failure by Ms Del Monaco to file and serve an expert report in accordance with the timeframes provided.
On 24 September 2020, Ms Del Monaco sent another email to the Victorian Legal Services Commissioner in relation to Flitner & Company Pty Ltd. On 15 December 2020, Ms Del Monaco received an email from the Victorian Legal Services Commissioner advising her that it could not assist further with her dispute against Flitner & Company Pty Ltd and that it was a matter for VCAT or the Costs Court.
In the meantime, on 9 October 2020, Ms Del Monaco commenced a second proceeding in VCAT, this time against Velos & Velos Lawyers. This claim was made within 12 months of Velos & Velos Lawyers’ final bill. The documents associated with this claim were not put before me by either Ms Del Monaco or by Velos & Velos Lawyers. Ms Robertson, who appeared for Velos & Velos Lawyers, very fairly accepted that this claim included a claim in relation to Velos & Velos Lawyers’ costs. That is, contrary to the situation with the VCAT claim against Flitner & Company Pty Ltd, Ms Del Monaco was challenging the fees that had been charged, rather than seeking damages for negligence. On 19 November 2020, this claim was struck out because VCAT was only able to deal with costs in an amount of $26,100 or less.
On 16 December 2020, Ms Del Monaco’s primary VCAT proceeding against Flitner & Company Pty Ltd was dismissed. It seems that she had applied to have it reinstated, but did not succeed in doing so. VCAT’s order states:
For the reasons given orally, the application for reinstatement of the proceeding is dismissed.
On 11 March 2021, Ms Del Monaco sought an itemised bill from Velos & Velos Lawyers. On 19 March 2021, Velos & Velos Lawyers responded saying that she was out of time to make such a request. On 1 April 2021, Ms Del Monaco sent a letter of demand to Flitner & Company Pty Ltd. She sought a refund of her fees, on the basis, essentially, that it had ‘mismanaged’ her claim.
On 24 June 2021, proceedings were filed in the Costs Court in which Ms Del Monaco sought assessments of the costs charged by Flitner & Company Pty Ltd and by Velos & Velos Lawyers. This was some two years and four months after Flitner & Company Pty Ltd’s last invoice dated 20 February 2019, and one year and seven months after Velos & Velos Lawyers’ last invoice dated 11 October 2019.
D. The situation with Flitner & Company Pty Ltd
I do not consider that it would be just and fair to extend time so that Ms Del Monaco can now have Flitner & Company Pty Ltd’s costs assessed. Flitner & Company Pty Ltd’s invoices informed her of the 12-month time limit for any assessment, and she has not, to my mind, provided a sufficient reason for which she did not seek to have the costs assessed within that 12-month time limit. Flitner & Company Pty Ltd’s costs were relatively modest, and the clear flavour of the complaint against Flitner & Company Pty Ltd was not that it had charged for work that it had not done, or that it had charged more than it was entitled to charge, but rather that it had acted negligently. That claim was brought in VCAT, and was dismissed by VCAT. An assessment of costs is not a forum in which that issue could satisfactorily be determined.
In my view, on balance, Flitner & Company Pty Ltd is now, after more than three years since its final bill was sent and paid, entitled to the certainty and closure that the time limit is directed at achieving.
E. The situation with Velos & Velos Lawyers
The situation with Velos & Velos Lawyers is different. Contrary to the position with Flitner & Company Pty Ltd, Ms Del Monaco does have, I am satisfied, a genuine belief that she has been overcharged, rather than simply that the work was negligently performed. In an affidavit dated 2 August 2021 and sworn two days later, Ms Del Monaco said that the monies she had paid to Velos & Velos Lawyers ‘didn’t seem to warrant the legal work on my matter’, and that the application to this Court was so that she could ‘recoup some legal fees’. It may well be that this is a wrong impression, and that the fees charged were entirely reasonable and in accordance with the arrangements between them. But, contrary to the position with Flitner & Company Pty Ltd, I have not concluded that the desire to have them assessed has in reality developed only from a sense that the work was negligently performed.
But more importantly, there is not the same level of delay. Ms Del Monaco lodged a complaint to the Legal Services Commissioner about Velos & Velos Lawyers’ legal costs on 4 September 2020, which was within 12 months of Velos & Velos Lawyers’ last two invoices. She did not receive a communication back from the Legal Victorian Services Commissioner saying that they could not assist until 15 December 2020. By then, she was out of time. In the meantime, on 9 October 2020, which was within 12 months of Velos & Velos Lawyers’ final bill, she had commenced proceedings in VCAT that included a complaint about the level of costs charged, and that proceeding was struck out because VCAT did not have jurisdiction in light of the amounts concerned. Ms Del Monaco swore, and I accept, that she went to VCAT as she did not want to engage another lawyer, which she thought she would need to do if she were to attend the Supreme Court, and that she ‘stumbled due to limited knowledge of the legal system and got lost in the process’.
After she was told by the Victorian Legal Services Commissioner in December 2020 that they could not assist, on 11 March 2021 Ms Del Monaco requested an itemised bill from Velos & Velos Lawyers. When Velos & Velos Lawyers asserted, correctly, that she was out of time to seek an assessment, Ms Del Monaco informed Velos & Velos Lawyers by email dated 19 March 2021 that she would ‘continue to dispute the matter’. Then after, in her words, ‘a few further stumbles’, during which time she was self-represented, she ascertained how to lodge a late submission to the Costs Court, and then did so.
I appreciate, and have taken into account, that an assessment of costs will put Velos & Velos Lawyers to real inconvenience and will require them to incur expenses that may never be recovered, and that the assessment will take place well over a year after their last invoice, which is undesirable. But no specific prejudice was otherwise alleged, and the detriment to Velos & Velos Lawyers needs to be balanced against the right, subject to default time limits, given to clients to have their legal costs assessed and the public benefit, recognised by the conditional legislative entitlement, in that right. Here, Ms Del Monaco, who was for practical purposes unrepresented, put Velos & Velos Lawyers on notice of her concern about their fees and embarked on a process of having her concerns adjudicated upon reasonably promptly; she did not do nothing until the 12-month period had expired. On balance, I consider, in all the circumstances, that it would be just and fair to extend time so that Ms Del Monaco may have Velos & Velos Lawyers’ costs assessed.
F. Disposition
In proceeding S ECI 2021 02220, where Flitner & Company Pty Ltd is the respondent, I will make an order dismissing the application pursuant to s 198(4) of the Legal Profession Uniform Law referred to me by Conidi JR on 1 February 2022.
In proceeding S ECI 2021 02219, where Velos & Velos Lawyers is the respondent, I will, on the application pursuant to s 198(4) of the Legal Profession Uniform Law referred to me by Conidi JR on 1 February 2022, declare that, after having regard to the delay and the reasons for the delay, it is just and fair for Ms Del Monaco’s application for assessment initiated by summons filed on 24 June 2021 to be dealt with after the 12-month period.
I will hear the parties on the question of costs, and on the form of order.
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