DLA Piper Australia v Triclops Technologies Pty Ltd
[2020] VSC 93
•16 March 2020
| IN THE SUPREME COURT OF VICTORIA |
AT MELBOURNE
COSTS COURT
S ECI 2019 04502
IN THE MATTER OF:
Section 198 of the Legal Profession Uniform Law 2014
BETWEEN
| DLA PIPER AUSTRALIA (A Firm) | Applicant |
| v | |
| TRICLOPS TECHNOLOGIES PTY LTD | Respondent |
| (ACN 117 350 464) |
JUDGE: | Wood AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 20 February 2020 |
DATE OF DECISION & REASONS: | 16 March 2020 |
CASE MAY BE CITED AS: | DLA Piper Australia v Triclops Technologies Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2020] VSC 93 |
DECISION & REASONS
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LEGAL COSTS – Scope of retainer – Final bill for legal services – Section 193(2) Legal Profession Uniform Law Act 2014 – Standing of law practice to seek review out of time – Section 198(4) Legal Profession Uniform Law Act 2014
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Ms L Dawson | DLA Piper Australia |
| For the Respondent | Mr P Lovell | MNG Lawyers |
HIS HONOUR:
There was a hearing in this matter on 20 February 2020. At the conclusion I reserved my decision and I now publish my decision and reasons.
On 25 September 2019 the applicant commenced this current proceeding in the Costs Court pursuant to s 198(1)(c) of the Legal Profession Uniform Law Act 2014 (‘Uniform Law’) to assess some of their own bills of costs rendered to the respondent. The Summons describes the relevant bills to be assessed as being dated between 27 February 2017 and 27 September 2018. There are sixteen of these, thirteen of which are unpaid. The unpaid component amounts to $466,121.21. The three bills that fell between these dates that had been paid only total $18,180.27.[1] Thirteen more bills had been previously rendered and dated between 29 February 2016 and 27 February 2017 and they were not sought to be assessed in this proceeding on the basis that those particular bills had been paid.
[1]E.g. Invoices dated 30 April 2018 ($14,397.92), 27 June 2018 ($2,367.75) and 27 September 2018 ($1,414.60).
In relation to the applicant’s bills that are sought to be assessed in this current proceeding all but the last one in time are headed ‘Alleged patent infringement by Lazer Safe Pty Ltd and Pilz GmbH & Co.’ The one last in time, dated 27 September 2018, is headed ‘Appeal of Federal Court decision.’
The applicant commenced proceedings in the County Court on 8 February 2019 to recover the unpaid sum of $466,121.21 referred to in paragraph 2 above. The respondent’s Defence in that proceeding alleged, inter alia, that the applicant had not complied with the Uniform Law. That proceeding is presently stayed by consent pending the outcome of the current proceeding in this Court.
On 22 October 2019 an order was made for the applicant to file and serve an affidavit in relation to any Costs Agreements and compliance with disclosure obligations contained in the Uniform Law by 19 November 2019. In purported compliance with that order the applicant filed an affidavit of Robynne Lyndsay Sanders sworn 28 November 2019. The affidavit exhibits an Engagement Letter dated 14 September 2015 (‘First Engagement Letter’), the signed signature clause dated 25 September 2015 and three updated costs estimates dated 19 May 2016, 27 February 2017 and 19 June 2018. The First Engagement Letter refers to the need to enter a Services Agreement (which includes a costs agreement) and Terms of Business. The Terms of Business define the ‘Service Agreement‘ as comprising the Engagement Letter and the Terms of Business. To avoid confusion these reasons will refer to Engagement Letters but that term incorporates a reference to a Costs Agreement.
The order of 22 October 2019 also required the respondent to file and serve a Notice of Preliminary Issues, any affidavits, and written submissions by 17 December 2019. On 19 December 2019 the respondent filed a document containing both the Notice of Preliminary Issues and Written Submissions and an affidavit of Stefan Otto Alteruthemeyer sworn 19 December 2019.
The order of 22 October 2019 required the applicant to file and serve written submissions and affidavits by 28 January 2020. A second affidavit of Ms Saunders sworn 4 February 2020 and the Applicant’s Response to the Preliminary Issues were filed on 4 February 2020.
The First Engagement Letter was dated 15 September 2015[2] and was addressed to ‘Kevin Davies, Triclops Technologies Pty Ltd’. The respondent company is described as the ‘client’ and it is designated as ‘you’ in the letter.[3] The letter is therefore addressed to the respondent, the respondent is the entity instructing,[4] and the respondent is the entity to be charged.[5] All invoices are then addressed to the respondent.
[2]Exhibit ‘RLS 1’.
[3]Paragraph numbered as 1 of the First Engagement Letter.
[4]First line on page 1 of the First Engagement Letter.
[5]Third line of page 1 of the First Engagement Letter.
The scope of the retainer is described as the patent infringement by Lazer Safe Pty Ltd in Federal Court proceedings in Perth,[6] ‘advise, prepare and appear ‘ in relation to those foreshadowed proceedings[7] and ‘any other issues that may arise in relation to’ these two matters.[8] Those proceedings were issued on 17 November 2015 on behalf of the respondent and Mr Davies in the Federal Court.
[6]Paragraphs 2.2 and 2.2.1 of the First Engagement Letter.
[7]Paragraph 2.2.1 of the First Engagement Letter.
[8]Paragraph 2.2.2 of the First Engagement Letter.
The basis for charging is said to be the hourly rates set out in paragraph 9.2 of the First Engagement Letter with the ability of the applicant to review them from ‘time to time and at the end of the financial year.’[9] The rates were $615 per hour exclusive of GST for a Partner and $465 per hour exclusive of GST for a Senior Associate. In reality they were Ms Sanders and Mr McMaster and their rates remained the same throughout. As a point of comparison the Federal Court scale rate was $580 per hour exclusive of GST with a discretion for a loading commonly up to 15%.[10]
[9]Paragraph 9.4 of the First Engagement Letter.
[10]Item 11.1 - Federal Court Scale and ‘Guide to Discretionary Items in Bills of Costs’ (1 October 2014).
Paragraph 9.1 of the First Engagement Letter describes an ‘attached Capped Fee Arrangement’. That document contains estimates of various stages but any reference to ‘Capped Fees’ is confined to ‘up to and including mediation.’[11] Thereafter the fee estimates are said to apply ‘from mediation onwards’.
[11]Second dot point at foot of the first page of the attached ‘Capped Fee Arrangement’.
Taking the maximum of the ranges of the estimates for the various stated stages the total of the estimates up to the end of a three day hearing was $236,000. This did not include counsel fees.[12] The Uniform Law requires an estimate of total legal costs at the outset of the retainer and this has to include disbursements which would include counsel fees.[13]
[12]First dot point at foot of the first page of the attached ‘Capped Fee Arrangement’.
[13]Section 174(1)(a) and definition of ‘legal costs’ in s 6 of the Uniform Law.
The first attempt to comply with an updated estimate as required by section 174(1)(b) of the Uniform Law was 19 May 2016 when an estimate of total costs of $200,000 to $300,000 was provided.[14] The next attempt was 27 February 2017 when a figure of $191,339 exclusive of GST had been billed with a future estimate of $255,000 provided.[15] That is a total of around $465,000 once GST is added in. It is worth noting here that the total of all legal costs as pleaded in the County Court proceeding was ultimately $764,657.48.
[14]Exhibit ‘RLS-3.’
[15]Exhibit ‘RLS-4.’
The next significant document was a letter dated 19 June 2018 (‘Second Engagement Letter’). This was created in relation to a foreshadowed appeal of the Federal Court judgment published on 18 May 2018. There was no estimate provided in that letter in spite of reference to one being contained.[16] At that point Kevin Davies was named as an additional ‘client’ (along with the respondent) and as the additional person liable for the costs of the respondent.[17]
[16]Paragraph 9.7 of the Second Engagement Letter dated 19 June 2018.
[17]Paragraph 1 in the Second Engagement Letter dated 19 June 2018.
The applicant has now conceded in the their Response to the Respondent’s Notice of Preliminary Issues filed on 4 February 2020 that the ‘costs agreements are void for non-compliance with the disclosure requirements.’[18] This is not surprising. The applicant then contends for the assessment of costs to occur based on the hourly rates contained in the void agreements.[19] The respondent contends for the same.[20] As noted in paragraph 10 above they are comparable with the Federal Court scale anyway.
[18]Paragraph 1.a.
[19]Paragraph 1.b.
[20]Transcript – 20 February 2020 – page 1, lines 19 to 22 and page 1 of the Respondent’s Notice of Preliminary Issues and Submissions dated 19 December 2019.
The respondent’s Notice of Preliminary Issues and Submissions is broken into two parts - ‘Principal Preliminary Issues’ and ‘Alternative Preliminary Issues’. In summary there are two principal ones, being whether the applicant is out of time to apply for an assessment of their costs and, if so, whether an extension of time is available to them. The respondent contends that the applicant is out of time and no extension of time is open to them. There are three alternative preliminary issues, being whether the Cost Agreement is void and, if so, the basis that the unpaid bills ought to be assessed and finally whether fully paid bills, not part of the current proceedings, can be included.
The issues that are disputed in the ‘Applicant’s Response to the Notice of Preliminary Issues’ are the contention that the applicant is out of time but even if it is, the applicant can seek an extension of time, that an extension of time ought to be granted and that the paid bills ought not be included in the extension process.
Dealing with the first Principal Preliminary Issue identified by the respondent - namely, whether the applicant is out of time to review nearly all their own unpaid costs, the point is a simple one. The argument is that the intial retainer was contained in the First Engagement Letter in relation to the foreshadowed patent infringement proceeding in the Federal Court. Judgment was handed down in that matter on 18 May 2018 and the final bill relating to that matter was dated 31 July 2018. Therefore the 12 month period within which to file a review elapsed on 30 July 2019. This review proceeding in the Costs Court was not filed until 21 September 2019. The only bill issued after 31 July 2018 was the bill dated 27 September 2018 and that arose from, and related to, the Second Engagement Letter and the prospective appeal of the single judge Federal Court decision to the Full Federal Court.
The applicant’s submission is that the respondent seeks to fragment the work performed by the applicant into two distinct matters – namely the Federal Court proceedings before a single judge and a prospective appeal to the Full Court. It is submitted that it is essentially ‘the same matter founded on the same facts’ and the argument is unduly technical.[21]
[21]Paragraph 6 of the Applicant’s Response to Notice of Preliminary Issues.
The primary reason for the Second Engagement Letter was said to be the applicant’s obligations under the Uniform Law.[22] However, if the applicant was of the view there was one retainer there would have been no need for this Second Engagement Letter (ie, a new Costs Agreement). If there was only one retainer the obligation would have been merely to update estimates of total legal costs if there has been a significant change in previous disclosure[23] and written confirmation that Mr Davies was also liable for the applicant’s costs from that point onwards.
[22]Ibid at paragraph 6.
[23]Section 174(1)(b) Uniform Law.
Consideration of what constitutes a ‘matter’ for the purpose of Transitional provisions of the Legal Profession Act 2004 was discussed in Marriner v Meerkin & Apel (‘Marriner’).[24] Neither party made reference to that case in their initial written material or at the hearing, but the respondent contacted the court (and the applicant) nine days after this decision was reserved seeking leave to provide further written submissions. This was granted and the parties filed further material by 6 March 2020.
[24](2019) VSC 36 (Wood AsJ).
The respondent filed Short Further Submissions on 5 March 2020 and an Amended Short Further Submissions on 6 March 2020. The applicant filed Further Written Submissions on 6 March 2020.
The case of Marriner is not directly on point but both parties rely on different aspects of it to support their position. In that case the law firm was first consulted in relation to a myriad of matters involving numerous corporate entities and it was not clear who would initiate proceedings, in what court, and against who. The scope of the retainer was therefore broad. There was one file, one costs agreement with the one individual liable for costs throughout. The bills contained a mixture of work without differentiation. The conclusion was reached that the word ‘matter’ was to be given a broad interpretation and the underlying disputes constituted the matter.
The applicant’s Further Written Submissions dated 6 March 2020 deals with both concepts of ‘matter’ and ‘retainer’ even though retainer was identified as being the more relevant consideration. The respondent was said to have focussed on the term ‘matter’.[25]
[25]Paragraph 2.
In relation to ‘matter’ the applicant relies on the passage in Marriner wherein it was stated that ‘matter’ was to be interpreted broadly without reference to particular litigation.[26]
[26]Paragraphs 5 to 7.
In relation to ‘retainer’ reliance is placed on the conclusion in Marriner that the scope was to resist the various demand for money from different entities across juridictions and distinct legal proceedings.[27] The applicant submits that the retainer in the current proceeding was to undertake work in relation to alleged patent infringement in Federal Court proceedings irrespective of whether it was at first instamce or appeal.[28] The applicant relies on selected terms in the First Engagement Letter and the affidavit of Ms Saunders to support that conclusion.[29]
[27]Paragargh 8.
[28]Paragraph 9.
[29]Paragraph 10 of the Further Written Submissions.
The respondent’s Amended Short Further Submissions dated 6 March 2020 outlines twenty-two bases upon which Marriner can be distinguished. There is merit in most of these. The most notable differences arise from the more specific terminology in the applicant’s own documents in the current proceedings, the necessity for a Second Engagement Letter with amended scope, requirement for the respondent to agree to the basis of the second Engagement Letter and retainer, and the heading on the bill of costs arising from the Second Engagement Letter.
In Marriner it was stated that ‘the scope of a retainer can be express or implied from surrounding circumstances and the conduct of the parties.’[30]
[30]Ibid at [35].
The most pertinent provision in the Uniform Law that deals with the central issue at hand is the reference to interim and final bills in the context of ‘legal services the law practice was retained to provide.’[31] The scope of the retainer is therefore the critical issue in relation to whether the bill dated 31 July 2018 is the final one or an interim one in the retainer. The focus should be more on ‘retainer’ than ‘matter’ and this was the applicant’s position at the hearing.[32] This position was maintained in the applicant’s Further Written Submissions dated 6 March 2020.[33]
[31]Section 193(1) Uniform Law.
[32]Transcript – 20 February 2020 – page 26, lines 10 to 18.
[33]Paragraphs 2 and 3.
Dal Pont - Law of Costs[34] provides authority for the proposition that ‘implied into every retainer is the lawyer’s duty to protect the client’s interest and to carry out by all proper means his or her instructions in the matters to which the retainer relates. Aside from express terms to the contrary, this dictates that, within the confines of the retainer, the lawyer-client relationship carries with it the implied authority to do all such things incidental to the object of the representation’.
[34]4th Edition (Lexis Nexis Butterworth) at [2.12].
At the hearing the applicant referred to a passage in Dart Mining NL v Foster Nicholson Jones[35] where it was stated that a ‘Costs Agreement and the terms of a retainer do not have to be contained in the one document.’ It is not unusual for the scope of a retainer to alter. The applicant submitted at the hearing that a costs agreement is not the retainer but it might provide some evidence of a retainer and its scope.[36]
[35](2016) VSC 836.
[36]Transcript – 20 February 2020 – page 24 , line 31 to page 25, line 4.
McMillan J in Mackie & Staff Pty Ltd v Khor & Burr[37] summarised the findings of the Queensland Court of Appeal in Challen v Golder Associates Pty Ltd[38] as follows :
The final bill is the last bill rendered for the legal services the solicitor has been retained to provide. In determining what the final bill is, the relevance of the costs agreement is that it specifies the extent of the retainer. The final bill is not necessarily the last bill in time, as the last bill in time might relate to legal services not the subject of the retainer.
[37](2013) VSC 696 at [27].
[38](2012) QCA 307 at [43] and [44].
True it is that the scope of a retainer can be contained in a costs agreement, however the scope can alter and the parties can agree that the terms of the initial costs agreement continue to apply to the amended scope. There are a number of factors in this matter that lead to the conclusion that there were two separate retainers.
The First Engagement Letter describes the scope of the retainer and includes the wording ‘any other issues that may arise’ in relation to the patent infringement proceeding in the Federal Court.’ The applicant relies on these words to submit that the proposed Full Court appeal is caught by that phrase and is therefore one such ‘other issue.’[39] However, the Second Engagement Letter is headed ‘Engagement Letter: Appeal of decision of Federal Court Proceeding WA 670/2015’. The letter and enclosures and Terms of Engagement are described as forming ‘our offer to enter into a Services Agreement (including a costs agreement with you)’. It goes on to describe what conduct would constitute acceptance of the terms and the respondent relied on the reference in that material to the need for such an agreement at the ‘outset.’[40]
[39]Transcript – 20 February 2020 – page 26, lines 1 to 9.
[40]Transcript – 20 February 2020 – page 6, lines 15 to 20.
Further, the Second Engagement Letter includes the ‘Terms of Business’ which state ‘Each time we agree to represent you on an individual matter we will set out in a separate letter or email (‘Engagement Letter’) the scope of the services we will provide (‘Services’) and the fee arrangements.’[41] The creation of a Second Engagement Letter which specifically refers to a Full Court appeal is consistent with that provision.
[41]Paragraph 2.1 of the Terms of Business and Transcript – 20 February 2020 - page 8, line 22 to page 9, line 11.
If the first retainer was ongoing, and bearing in mind the hourly rates have not altered, there would be no need for a fresh offer and acceptance of what is clearly a new retainer in a separate stand alone proceeding that had a different description of the scope and an additional party added as being liable for the costs. The heading on the bill of costs dated 27 September 2018 in relation to the prospective Full Court appeal changed to ‘Appeal of Federal Court decision’ to reflect the different heading in the Second Engagement Letter.
It is also of note that all the applicant’s invoices up to then contained the applicant’s internal reference of ‘RLS/00370071-000001.” The bill dated 27 September 2018 contained the reference ‘RLS/00370071-000002’ which indicates that for internal record keeping purposes the Full Court appeal was delineated from the initial patent infringement proceeding.
In reality, with the creation of the Second Engagement Letter, the parties liable changed and the scope of the retainer changed from the original proceeding to an appeal from that decision. The issues and relevant test changed. From the documentation and surrounding circumstances it seems clear that the consideration of an appeal to the Full Court was a fresh retainer. This conclusion is reached by utilising and interpreting the applicant’s own documents and actions.
The final bill as described in s 193(2) of the Uniform Law for the infringement proceeding retainer was the one dated 31 July 2018 and the final bill in relation to the prospective Full Court appeal was the one dated 27 September 2018.
Section 198(4) of the Uniform Law states ‘an application that is made out of time may be dealt with by the costs assessor if the designated tribunal, on application by the costs assessor or the client or third party who made application for the assessment, 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.’
The Supreme Court is the ‘designated tribunal’ for the purpose of s 198 of the Uniform Law.[42] The Costs Court is the ‘costs assessor’ for the purposes of s 198 of the Uniform Law.[43]
[42]‘Table 2 – Designated Tribunals’ in s 10(1) of the Legal Profession Uniform Law Application Act 2014.
[43]Section 17D(1)(ea) Supreme Court Act 1986, the definition of ‘costs assessor’ in s 6 of Uniform Law 2014. See also Leah Tomia Gallin v SC Lawyers Pty Ltd (2020) VSC 80 at [3].
The respondent argues that the applicant is unable to obtain an extension of time as they are not the client, third party payer or other law practice[44] and omitting a law practice from s 198(4) is consistent with consumer protection legislation.[45] The applicant argued at the hearing that they are not precluded from making an application to extend time.[46] This is not a matter that I am able to deal with. This would be an argument to be put at the time in the event that the applicant maintained the position that they could make an application to extend time and did so. The merits of that argument would be a matter for the relevant judicial officer at that time.
[44]Paragraph 14 of the Respondent’s Notice of Preliminary Issues and Submissions.
[45]Transcript – 20 February 2020 – page 12, lines 3 to 17.
[46]Paragraphs 11 and 12 of the Applicant’s Response to Notice of Preliminary Issues and Transcript – 20 February 2020 – page 30, line 25 to page 35, line 14.
What is clear is that the application to extend time can be made on an application by the Costs Court (in the capacity of costs assessor), and granted by the Supreme Court if it was satisfied about the reasons for delay, extent of delay, and whether it is fair and just to do so.
Here the applicant is seven weeks out of time and would have been within time if the bill of 27 September 2018 was construed as part of the original retainer. The extent to which they can be said to have sat on their rights[47] and failed to comply with s 25 of the Civil Procedure Act 2010 as suggested by the respondent at the hearing,[48] would be matters for the Supreme Court to consider.
[47]Transcript – 20 February 2020 – page 22, lines 11 to 15.
[48]Transcript - 20 February 2020 – page 17, lines 17 to 26.
There is a considerable sum claimed as unpaid. The general effect of s 178(1)(c) of the Uniform Law is that where non-compliance with disclosure obligations is established the law practice is unable to maintain recovery proceedings until an assessment takes place.
As part of the consideration of what is just and fair the recoverability of the unpaid costs might be a factor. The applicant may not be able to seek to recover any unpaid costs in circumstances where it is arguable that they are unable to sue because there was non-compliance with the Uniform Law,[49] and they cannot be assessed in the Costs Court because the application was made seven weeks out of time. The respondent agreed with this as a possible scenario at the hearing.[50] The applicant’s position in their Response to the Notice of Preliminary Issues was that they can revive the County Court proceeding if a review is not open.[51] However their position in relation to this option was less certain at the hearing.[52]
[49]Section 178(1)(c).
[50]Transcript – 20 February 2020 – page 15, line 17 to page 16, line 3 & page 18, lines 3 to 8.
[51]Paragraph 18.
[52]Transcript – 20 February 2020 – page 32, lines 18 to 23.
Section 178(1)(c) of the Uniform Law states that where there has been contravention of disclosure obligations (as is the case here), ‘the law practice must not…maintain proceedings for the recovery of…legal costs until they have been assessed or the costs dispute has been determined by the designated local regulatory authority or under jurisdictional legislation.’ The Victorian Commissioner is the designated local regulatory authority for cost disputes[53] but monetary limits apply. ‘Jurisdictional legislation’ is defined as ‘legislation of a jurisdiction.’[54] This would be the Supreme Court Act 1986 which merely confers jurisdiction on the Costs Court to hear and determine applications under the Uniform Law.[55] A finding that the applicant is out of time to have the Costs Court assess the costs would mean the costs have not been ‘assessed.’ It is questionable whether the County Court recovery proceedings could continue.
[53]Table 1 in s 10(1) of the Legal Profession Uniform Law Application Act 2014.
[54]Section 6(1) of the Uniform Law 2014.
[55]Section 17D(1)(ea) Supreme Court Act 1986.
It is of note that the Legal Services Council has recently proposed an amendment to the Uniform Law to make it clear that a law practice has the same ability as others to seek a cost assessment out of time.[56] This is presumably in recognition of a perceived anomaly that exists with their exclusion from the operation of s 178(4).
[56]Recommendation 20 of the Consultation Paper on the Proposed Amendments to the Legal ProfessionUniform Law (January 2020).
As mentioned in paragraph 42 above the applicant argued that a law firm was not precluded from making application to extend time in spite of the wording in s 198(4). The previous Legal Profession Act 2004 contained a provision that a law practice could apply to review their own costs and there was no time limit.[57] The Uniform Law makes it clear that a law practice has a 12 month time limit and they appear to be excluded from making application to extend time under s 198(4). The Costs Court as ‘costs assessor’ has standing to do so under s 198(4).
[57]Section 3.4.40.
It is mandated that the Costs Court must exercise its jurisdiction with little formality and technicality.[58] At the hearing the applicant requested that the Costs Court make the application to extend time[59] or that the Costs Court exercise its discretion to refer the matter to the designated tribunal,[60] in this case the Supreme Court. The applicant submits there is no reason not to act on that request and whether an extension of time is granted will be a matter for the Supreme Court.[61] The respondent argued that the provision only enabled an application by the Costs Court to be made on behalf of a client or third party payer.[62] I do not accept that as a valid interpretation of s 198(4).
[58]Section 17D(3) Supreme Court Act 1986.
[59]Transcript – 20 February 2020 – page 31, line 26 to page 32, line 10.
[60]Transcript – 20 February 2020 – page 35, lines 10 to 14.
[61]Paragraph 12a of the Applicant’s Response to Notice of Preliminary Issues.
[62]Transcript – 20 February 2020 – page 36, line 28 to page 37, line 6 & page 37, line 23 to page 38, line 3.
The matters referred to in paragraphs 44 to 48 above comprise the justification as to why I am am prepared to make the application.
These reasons can therefore constitute an application under s 198(4). The applicant can seek leave to be heard by the Supreme Court and ought to be given an opportunity to file and serve any further affidavit (in addition to the ones filed) and any additional written submissions (over and above the contents of paragraphs 13 to 22 in their written submissions filed 4 February 2020). The respondent will be given an opportunity to file and serve an affidavit and written submission in response. The matter should thereafter to be referred to the Practice Court of the Supreme Court.
The Alternate Preliminary Issues are really only relevant in the event that an extension of time is granted. There is no dispute that the Costs Agreements (as part of the First and Second Engagement Letters) are void for non-compliance with disclosure and ongoing disclosure obligations.[63]
[63]Section 178(1)(a) Uniform Law.
The remaining final Alternative Issue is whether the paid bills can be assessed even though the applicant has not sought this in the current proceeding. The respondent has flagged this in their written submissions.[64] This would be in effect an oral application by the respondent to have these assessed if they are unsuccessful in their argument that the applicant was out of time. The earlier paid bills would be interim to the final one dated 27 September 2018 so the respondent would be out of time and would need to seek an extension. I have found that the applicant is out of time to review the ‘final’ bill of 31 July 2018 (and the unpaid bills that pre-date it) and that finding means that the respondent would similarly be out of time to seek review of the interim paid invoices that pre-date that bill and are not part of this proceeding.
[64]Paragraph 43 of the Respondent’s Notice of Preliminary Isssues and Submissions.
In the event that an extension of time is granted, prima facie, the costs should be assessed on the basis of the hourly rates in the First and Second Engagement Letters. This could be a legitimate conclusion for reasons over and above the similarity in the rates when compared with the Federal Court scale. The substantive proceeding in the Federal Court was a complex intellectual property matter that ran for 4 days and the judgment, containing 422 paragraphs, ran to 121 pages.[65] Those factors would be relevant to the considerations contained in section 172(2) of the Uniform Law when assessing ‘fair and reasonable’costs.
[65]Davies v Lazer Safe Pty Ltd (2018) FCA 702; (2018) 358 ALR 508.
The overall conclusions are as follows. The respondent has not made an application to review the paid bills within 12 months of the final bill dated 31 July 2018. They have standing as client to seek to exercise their rights to apply to the Supreme Court to extend time. Those bills are not part of this proceeding. The applicant is out of time to apply for assessment of bills named in this proceeding other than the one dated 27 September 2018. These reasons constitute an application to extend time pursuant to s 198(4) of the Uniform Law. In the event that an extension of time is granted the issue of the basis upon which the costs should be assessed will need to be finalised by the Costs Court if the parties wish to agitate the preliminary views expressed in paragraph 55 above. The respondent already appears to accept this as a legitimate basis for the assessment of costs if the rates are restricted to 2015 rates[66] and in reality the rates did not increase as noted in paragraph 10 above.
[66]Paragraph 42 of the Respondent’s Notice of Preliminary Issues and Submissions.
The parties now have an opportunity to consult each other with the goal of fashioning a timetable for the events described in paragraph 52 above. Liberty to apply is granted in the event that a consent order cannot be agreed.
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