Estate of Allwood v Benjafield

[2009] NSWSC 1383

CITATION:	THE ESTATE OF ROSALIND ALLWOOD v PETER VIVIAN BENJAFIELD [2009] NSWSC 1383
HEARING DATE(S):	18/09/2009
JUDGMENT DATE :	25 November 2009
JURISDICTION:	Common Law Division
JUDGMENT OF:	Mathews AJ at 1
DECISION:	1.I decline to make orders as sought in paragraphs 1, 3 and 5 of the Summons herein 2.In relation to paragraph 2, (relating to memoranda numbers 2, 3, 6, 8, 9, 10 and 11 in Schedule 1 to the Summons), the Court has no jurisdiction to make the order sought, and I thus decline to make the order. 3.Pursuant to paragraph 4, I order that the defendant provide to the plaintiff’s solicitors an itemised bill of costs in respect of the services rendered in memoranda 1, 4, 5 and 7 in Schedule 1 to the Summons, such bill or bills to be delivered within 42 days 4.I order that the defendant allow the plaintiffs to have access to the files relating to the costs referred to in Schedule 1 to the Summons 5.I reserve the question of costs. 6.The defendant is to file written submissions regarding costs by Monday 30 November 2009 and the plaintiff by Thursday 3 December 2009. Any subsequent submissions in reply must be received by Friday 4 December 2009.
CATCHWORDS:	Application for extension of time for assessment of costs - Inherent jurisdiction of the Court - s 209C of the Legal Profession Act 1987 - Discretionary factors
LEGISLATION CITED:	Legal Profession Act 1987 Legal Profession Act 2004 Protected Estates Act 1983
CATEGORY:	Principal judgment
CASES CITED:	Selosse v Whitten (1997) NSWSC 355 BIL (NZ Holdings) Ltd v Era House Ltd (1991) 23 NSWLR 280 Parramatta River Lodge Pty Ltd v Sunman (1991) 5 BPR 12,038 Re Morris Fletcher & Cross' Bill of Costs [1997] 2 Qd R 228 Bechara t/as Bechara & Co v Atie & Anor [2005] NSWCA 268
PARTIES:	The Estate of Rosalind Allwood (Plaintiff) Peter Vivian Benjafield (Defendant)
FILE NUMBER(S):	SC 2008/16377
COUNSEL:	Mr. J Armfield (Plaintiff) Mr C Bolger (Defendant)
SOLICITORS:	Makinson & d'Apice Lawyers (Plaintiff) Benjafield & Associates (Defendant)
LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

MATHEWS AJ

Wednesday 25 November 2009

16377 of 2008

The Estate of Rosalind ALLWOOD v Peter Vivian BENJAFIELD

JUDGMENT

:

Background

These proceedings were commenced by Summons issued by the Protective Commissioner in his capacity as tutor of Rosalind Allwood. It sought various orders which I shall describe later. On 4 April 2009 Mrs Allwood died and her son and daughter, Peter Allwood and Judith MacDonald, were substituted as plaintiffs.

2 The defendant is a solicitor of this Court who has been acting for Mrs Allwood for a number of years. Her husband, the late Alan Allwood, died in February 2002. Mrs Allwood was the sole beneficiary and one of the executors of his Estate. The defendant acted for Mrs Allwood in obtaining Probate and in a number of matters relating to the administration of the estate.

3 On 10 February 2006 the Guardianship Tribunal made an order that Mrs Allwood be placed under the limited guardianship of the Public Guardian, whose functions were to determine where she might reside and to determine the health care and treatment she should receive. At that time Mrs Allwood was 99 years old and was said to have mild cognitive impairment.

4 Subsequent proceedings were commenced before the Guardianship Tribunal, seeking a financial management order for Mrs Allwood. Before these proceedings were finally determined, the Tribunal dealt with lengthy applications by which Mrs Allwood sought leave to be legally represented by the defendant’s firm at the hearing of the financial management application. The application for leave for legal representation was finally declined on 20 July 2006. In its decision, the Tribunal noted that there was a “significant question” about Mrs Allwood’s capacity to instruct a legal representative. On 28 September 2006 the Tribunal ordered that Mrs Allwood’s estate be subject to management under the Protected Estates Act 1983 and that the management of her estate be committed to the Protective Commissioner.

5 Between October 2006 and June 2007 there was considerable correspondence between the Protective Commissioner and the defendant, as I shall detail later. On 21 June 2007 the defendant wrote to the Protective Commissioner enclosing trust account statements relating to Mrs Allwood and copies of memoranda of costs and disbursements. The letter indicated that the total of all costs of disbursements billed to Mrs Allwood amounted to $149,725.32. All these costs, with the exception of the most recent account, had been paid out of monies held by the defendant in Mrs Allwood’s trust account.

6 Further correspondence ensued between the Protective Commissioner and the defendant in an endeavour to clarify the amounts which the defendant had received by way of costs and disbursements for acting on behalf of Mrs Allwood. On 17 July 2008, the solicitors for the Protective Commissioner wrote to the defendant again seeking a copy of all retainers or costs agreements entered into with Mrs Allwood and a copy of all tax invoices issued to Mrs Allwood. The defendant was also requested to provide the files relating to Mrs Allwood. None of these documents was produced.

7 On 28 November 2008 the present proceedings were commenced by way of Summons. The relief claimed is in the following terms:

“1. An order that the time for an application by the plaintiff for assessment of costs referred to in Schedule 1 hereto pursuant to s199 of the Legal Profession Act 1987 be extended to a date determined by this honourable Court.

2. An order that an application by the plaintiff for assessment of costs referred to in Schedule 1 hereto pursuant to s350 of the Legal Profession Act 2004 be extended to a date determined by this honourable Court.

3. An order that the defendant provide to the plaintiff’s solicitors within 14 days a copy of the defendant’s costs disclosures and costs agreements relating to the costs referred to in Schedule 1 of this Summons.

4. An order that the defendant provide an itemised bill for each of the costs referred to in Schedule 1 of the Summons to the plaintiff’s solicitors within 28 days.

5. An order that the defendant deliver the files relating to the costs referred to in Schedule 1 of this Summons to the plaintiff after the preparation of itemised bills of costs.

6. An order that the defendant provide the plaintiff access to the files relating to the costs referred to in Schedule 1 of this Summons forthwith

7. Further or other orders as this Honourable Court sees fit.

8. Costs..”

8 Schedule 1 to the Summons set out eleven memoranda of costs and disbursements issued by the defendant between March and October 2006. In summary they are as follows:

1. 20 March 2006 $58,981.45

2. “ $7,465.15

3. “ $4,994.00

4. 26 May 2006 $663.30

5. “ $11,902.00

6. 26 June 2006 $5,846.00

7. 4 August 2006 $5,377.50

8. 7 August 2006 $16,644.40

9. 20 September 2006 $2,408.90

10. “ $3,286.00

11. 20 October 2006 $2,350.00

9 I was informed by counsel that, as a result of pre-trial discussions, the essential matter in dispute between the parties is whether the court can or should grant leave for the costs sought by the defendant to be submitted for assessment, given the time which has elapsed. In this regard the memoranda listed in Schedule 1 to the Summons fall into two discrete categories.

10 The first category comprises memoranda relating to work for which the defendant was retained prior to the commencement of the Legal Profession Act 2004. Those memoranda fall within the provisions of the Legal Profession Act 1987 (the 1987 Act). The second category comprises memoranda relating to work performed pursuant to later retainers, which are subject to the Legal Profession Act 2004 (the 2004 Act).

11 It is common ground that memoranda numbers 1, 4, 5 and 7 fall within the first category. These relate to work done by the defendant in relation to Mrs Allwood’s late husband’s estate. The retainer in each case pre-dated October 2005 and they therefore fall within the provisions of the 1987 Act. Although smaller in number, the total amount claimed in these memoranda, $76,924.25, significantly exceeds the total amount claimed in the second category.

12 The second category, which comprises all other memoranda, relates to accounts totalling $42,994.45.

13 I propose to deal first with the second category of memoranda. Both counsel agree that the situation in relation to these memoranda is relatively simple. The same cannot be said in relation to the memoranda which fall under the 1987 Act.

Legal Profession Act 2004

14 The relevant provision of the 2004 Act is s 350. As at the time we are concerned with here, that section relevantly provided as follows:

350 Application by client or third party payers for costs assessment

(1) A client who is given a bill may apply to the Manager, Costs Assessment for an assessment of the whole or any part of legal costs.

(2) An application for a costs assessment may be made even if the legal costs have been wholly or partly paid.

(3) If any legal costs have been paid without a bill, the client may nevertheless apply for a costs assessment and for that purpose, the request for payment is taken to be a bill.

(4) An application under this section must be made within 60 days after the bill was given or the request was made or after the costs were paid in full (whichever is earlier or earliest).

(5) However, a costs assessor must deal with an application made out of time unless the costs assessor considers that the law practice has established that to do so would in all the circumstances, cause unfair prejudice to the law practice.

15 It is clear from the terms of s 350 that any application for a costs assessment must be made in the first place to a costs assessor. Even if the application is made out of time, the assessor is obliged to deal with the application unless he or she is satisfied that to do so would cause unfair prejudice to the law practice. Mr Armfield, who appeared for the plaintiffs, conceded that, given the terms of this section, I have no power to order a costs assessment. He suggested that a declaration to that effect might be made by the court. However, no such declaration was sought in the Summons. Ultimately, both Counsel agreed that it would be sufficient for me to make a formal finding that I lack jurisdiction under the 2004 Act to order an assessment, at least at this stage. An application can then be made to a costs assessor, who will exercise his or her discretion under s 350(5).

16 This being the case, I have no alternative but to order, in relation to memoranda numbers 2, 3, 6, 8, 9, 10 and 11, that by reason of s 350 of the Legal Profession Act, 2004, the Court has no jurisdiction to make the order sought in paragraph 2 of the Summons.

Legal Profession Act 1987

17 I now turn to discuss the issues relating to the first category of memoranda, namely those falling within the Legal Profession Act 1987. As will become apparent, the situation in relation to these memoranda is much more complicated.

18 The primary provision is s 199. That section provides as follows:

199 Applications by clients for assessment of costs in bills

(1) A client who is given a bill of costs may apply to the Manager, Costs Assessment for an assessment of the whole of, or any part of, those costs.

(2) An application relating to a bill of costs may be made even if the costs have been wholly or partly paid. If the costs have been wholly or partly paid, the application is to be made within the period prescribed by the regulations for the purposes of this subsection.

(3) If any costs have been paid without a bill of costs, the client may nevertheless apply for an assessment. For that purpose the request for payment by the barrister or solicitor is taken to be the bill of costs.

(4) …

19 The relevant regulation for the purpose of s 199(2) is regulation 52 of the Legal Profession Regulations 2002. That regulation is in the following terms:

52 Limitation period for applications by clients for cost assessment where bill paid or part paid

For the purposes of section 199 (2) of the Act, the prescribed period for making an application for an assessment of a bill of costs is:

(a) except as provided by paragraph (b), the period of 12 months after the bill was given to the client, or

(b) if a Council or the Commissioner applies for an assessment of costs for the purpose of investigating a complaint as referred to in section 153 (1) of the Act, the period of 12 months after the complaint was made.

20 All costs sought in the relevant memoranda were paid from monies held in trust for Mrs Allwood. Accordingly, s 199(2) applies, and the application for an assessment is to be made within the time prescribed in regulation 52. This time limit has now long passed.

21 It is common ground that the Court has no direct power under the 1987 Act or the applicable regulations to extend time for this purpose. Accordingly, Mr Bolger, who appeared for the defendant, urged that this constitutes a complete answer to the plaintiff’s application in relation to these memoranda.

22 However Mr Armfield, for the plaintiffs, submitted that there were three avenues whereby the apparently peremptory terms of s 199 might be circumvented in the particular circumstances of this case. Those three avenues, according to the plaintiff’s submissions, are as follows:

1. None of the memoranda provided by the defendant were “bills of costs” within the meaning of s 199(2);

2. The Court has inherent jurisdiction to order an assessment of costs;

3. The Court has both inherent and statutory power to order the delivery of an itemised bill of costs, thereby setting a new time limit under s 199.

23 I shall discuss each of these in turn.

Were the memoranda “bills of costs”?

24 Mr Armfield submitted that none of the memoranda provided by the defendant was a “bill of costs” within the meaning of the 1987 Act in that none of them contained the information which, pursuant to regulation 45, were required to be included in a bill of costs.

25 It is unnecessary for present purposes to detail the requirements of regulation 45. It is acknowledged by Mr Bolger that the memoranda, which were in extremely general terms, did not comply with the requirements of that regulation. However there is a fundamental difficulty with this submission, arising from the terms of s 199 itself. For s 199(3) presupposes precisely the situation which occurred here, namely that the costs were paid without a bill of costs having been given or received. In that situation, the request for payment by the solicitor is deemed to constitute a bill of costs. In this respect, the very general memoranda submitted by the defendant must be taken to constitute “requests”, and therefore to activate the deeming provision of s 199(3).

26 Mr Allwood referred me to a passage in the judgment of Graham AJ. in Selosse v Whitten (1997) NSW SC 355 which appears to assume that the statutory limitation does not apply in relation to memoranda which are “taken to be” bills of costs under s 199(3). However this observation was made by way of an aside, and without any supporting authority or argument. In the circumstances of the present case I cannot regard it as affecting what appears to me to be a clearly mandated legislative outcome.

27 In my view, s 199(3) constitutes a complete answer to Mr Armfield’s first submission.

28 I turn now to consider the two remaining avenues suggested by Mr Armfield, at least one of which has very considerable substance, as I shall explain shortly.

The Court’s Inherent Jurisdiction to order that costs be assessed

29 The plaintiffs’ primary submission is that the Court has inherent jurisdiction to give leave to apply for an assessment of costs, notwithstanding that the statutory time limit has expired. Alternatively it is submitted that the Court has inherent jurisdiction to order that a bill of costs be delivered to the plaintiffs, and that that bill should then, if requested by the plaintiffs, be subject to assessment.

30 I should say at the outset that, for reasons which I shall give shortly, I am not satisfied that the Court has the inherent jurisdiction primarily urged by the plaintiffs. However I am firmly of the view that it does have inherent jurisdiction, in appropriate cases, to order the delivery of a bill of costs. There is a corresponding statutory power to the same effect. Moreover the effect of exercising this power and ordering the delivery of a bill of costs will be to provide a further opportunity for the plaintiffs to seek an assessment of those costs.

31 The following, briefly, are my reasons for rejecting the plaintiffs’ primary submission, that the Court has inherent jurisdiction to grant leave to apply for an assessment of costs, notwithstanding that the statutory time limit has expired.

32 A number of authorities were referred to by both parties on this issue. It is fair to say that divergent views have been expressed as to the extent of the Court’s inherent jurisdiction in this respect. Most of the judicial pronouncements have been expressed in tentative terms, and often without any supporting authority. The jurisdiction has never been invoked in the manner primarily sought by the plaintiffs here. It is necessary, therefore, to go back to first principles relating to the possible coexistence of the Court’s inherent powers and statutory provisions. In this respect the defendant referred me to BIL (NZ Holdings) Ltd v Era House Ltd (1991) 23 NSWLR 280. Rogers, CJ at Com D said at 286:

“No reference was made in the submissions to well-settled principles as to the circumstances in which it should be held that the inherent power has been displaced by statute. In Harrison v Tew [1990] 2 AC 523, the speech of Lord Lowry commanded the assent of the other Law Lords. Dealing with a submission that the statute there in question did away with the inherent power, Lord Lowry said (at 536):

“One must distinguish between affirmative and negative provisions: the common law can co-exist with a statutory provision with which it is not inconsistent. Mr Newman, for the respondent, as well as introducing the quotation from Wade & Bradley , referred your Lordships to Coke, Institutes of the Laws of England (1817), cap 20, p 200 (Co 2 Inst 200):

‘it is a maxim in the common law, that a statute made in the affirmative, without any negative expressed or implied, does not take away the common law: …’”

33 On its face, s 199 appears to be affirmative in its terms: it grants a right to apply for an assessment of costs. However insofar as subs (2) provides that an application “is to be made” within the prescribed period, it is peremptory in its terms. So also is its negative corollary, namely that an application is not to be made outside that period. There is no statutory entitlement to apply for leave to extend the prescribed period.

34 It is therefore at least arguable that the granting of leave to apply for an assessment outside the statutory time limit is inconsistent with the clear terms of the legislation. If that be the case, the Court’s inherent jurisdiction must be taken to be displaced by the legislation.

35 In the end, I am not persuaded that I can or should invoke the Court’s inherent jurisdiction in the manner primarily sought by the plaintiffs.

36 Had my finding in this regard been determinative of the issues between the parties, I would have explored the matter in greater detail. However I propose in any event to make orders which will ultimately lead to the plaintiffs receiving the relief which they seek.

37 This takes me to the plaintiffs’ alternative submission, namely that the Court has inherent jurisdiction to order that a bill of costs be delivered, and that the bill should be subject to assessment if requested by the client.

The Court’s power to order delivery of a bill of costs

38 As to this matter, there is abundant and consistent authority supporting the proposition that the Court has inherent jurisdiction to order a solicitor to render a bill of costs. Nor is there any inconsistency between the existence of such a power and the legislative scheme. To the contrary, there is a statutory power contained in s 209C of the 1987 Act, to precisely the same effect. I shall be discussing this provision shortly. In the meantime I shall briefly refer to two of the cases in which this inherent jurisdiction has been invoked. The first in point of time is Parramatta River Lodge Pty Ltd v Sunman (1991) 5 BPR 12,038. In that case Young J, (as he then was), referred to the provisions of the 1987 Act relating to the provision of bills of costs. He said at 12,040: “apart from all these statutory powers, the Court has an inherent power in respect of solicitors to order the giving of a bill and the taxation of that bill if the circumstances warrant such action”. Later, his Honour said at 12,041:

“It must be remembered that the whole purpose of the provisions in Division 5 of Pt11 are to give the person liable to pay the bill sufficient information to decide whether or not he or she will pay the bill or refer it for taxation. Accordingly, the law, either in legislation or by the use of the inherent power of the court , has always required there to be a detailed statement from the solicitor both as to costs and disbursements…” ( emphasis added ).

39 Later again, he said at 12,046:

“I cannot see any discretionary grounds which would apply in this case to induce me not to make an order for delivery of a bill. The whole tone of most of the cases has been that a solicitor is the officer of the court and, no matter how inconvenient it might be, the court expects that in accordance with the highest standard of the profession the solicitor will give a fully detailed list of charges to the person liable to pay the bill and if asked will submit the bill for moderation by an officer of the court. That is the price of being a member of an honourable profession: that is the price of being admitted by this Court to practise law in this State”.

40 In Re Morris Fletcher & Cross’ Bill of Costs [1997] 2 Qd R 228, Fryberg J described the court’s jurisdiction to order the delivery of a bill and the taxation of a bill of costs as both inherent and enhanced by the legislation. He cited both passages of Young J, quoted above, with approval, and noted that the same situation applied in Queensland as in New South Wales. His Honour was in no doubt that the court had inherent power to order the delivery of a bill of costs. The major question was whether, as a matter of discretion, that power should be exercised.

41 The discretionary considerations, assuming the existence of the power, also loom large in the present case. I shall be discussing them shortly. In the meantime I must advert to the other source of the Court’s power to order the delivery of a bill of costs, which is to be found in s 209C of the 1987 Act. That section provides as follows:

209C Supreme Court may order delivery up of documents etc

(1) On the application of a barrister’s or solicitor’s client, the Supreme Court may order the barrister or solicitor:

(a) to give to the client a bill of costs in respect of any legal services provided by the barrister or solicitor, and

(b) to give to the client, on such conditions as the Supreme Court may determine, such of the client’s documents as are held by the barrister or solicitor in relation to those services.

(2) Subsection (1) does not affect the provisions of Division 6 of Part 11 with respect to the assessment of costs.

(3) This section does not apply to the client of a barrister or solicitor retained on the client’s behalf by another barrister or solicitor.

(4) In this section, a reference to a barrister or solicitor includes ` a reference to a former barrister or solicitor.

(5) In this section, legal services has the same meaning as in Part 11.

(6) In this section, a reference to a solicitor includes a reference to an incorporated legal practice in connection with legal services provided by the practice.

42 Mr Armfield has pointed out that s 209C and/or the Court’s inherent jurisdiction can be invoked in order to achieve the final result sought by the plaintiffs, namely that the defendant’s costs be submitted for assessment. This occurs through the application of s 199(2) together with regulation 52. If the Court orders the delivery of a bill of costs, then pursuant to regulation 52(a) the twelve month period for applying for the assessment of those costs will commence when the bill is given to the plaintiffs. It is for this reason that the plaintiffs are seeking an order under s 209C and/or the Court’s inherent jurisdiction, as an alternative to the relief primarily sought. The defendant however vigorously opposes the making of such an order.

43 There is no doubt that the Court has power to make this order. The only issue is whether, in the exercise of my discretion, the order sought by the plaintiffs should be made. This, in many respects, goes to the heart of these proceedings. I turn now to discuss the relevant discretionary considerations.

Discretionary considerations

44 Mr Bolger, on behalf of the defendant, submitted that it would be inappropriate to exercise the power under s 209C in the present case. He noted that this power appears to have been exercised only in circumstances where there has been a lien exercised over a file or documents. Numerous authorities were cited in support of this proposition. In particular, Mr Bolger referred to Bechara t/as Bechara & Co v Atie & Anor [2005] NSWCA 268 where McColl JA (with whom Ipp and Tobias JJA agreed), said at [69]:

“The Court will, in the ordinary case, only exercise the s 209C(1)(b) power in favour of a former client where such a course is required in the interest of justice and on conditions designed to protect the interests of the solicitor so far as possible: Doyles Construction Lawyers v Harsands Pty Ltd & Ors (McLelland CJ in Eq, Supreme Court of New South Wales, unreported, 24 December 1996; BC9606389 at 5).”

45 Mr Bolger pointed out that the time limit imposed by s 199 and regulation 52 is mandatory. Given that s 209C does not directly provide for the Court to order or allow an assessment of costs, that section should not be invoked so as to allow costs assessments to occur in circumstances where the time limit for making an application has already expired. In other words, section 209C should not be permitted to circumvent the operation of s 199 and the time limitation prescribed by regulation 52.

46 In written submissions furnished after the hearing of this matter, Mr Bolger listed the following additional reasons in support of his submission that the Court should not exercise its discretion and order the defendant to provide a bill of costs to the plaintiffs:

i. “The bills were received and paid by the late Mrs Allwood.
ii. No objection or complaint was made by Mrs Allwood at the time of payment.
iii. There is no evidence of any objection or complaint from Mrs Allwood.
iv. The OPC had control of Mrs Allwoods financial affairs from 28 September 2006.
v. When the OPC took over Mrs Allwood’s financial affairs the 12 month time period for making a cost assessment under s.199 of the 1987 had not expired (Invoice 1 having been paid on or about 25 May 2006 and the remainder after that date).
vi. Ordering the provision of a bill of costs be provided would have no effect as the time limit to have the legal services to which a bill of costs relates has expired and there is no discretion to extend time.
vii. The plaintiffs (or the OPC) could have made an application to have the bill of costs assessed within the prescribed time limit.
viii. No plausible reason is provided by the plaintiffs as to why an application was not made in time.
ix. The OPC does not say that it was not aware of any time limitations.
x. The preparation of a bill of costs by the defendant will be costly and the defendant should not be burdened with such costs in circumstances where the actual relief sought by the plaintiffs of assessing the defendant’s costs can not be achieved.”

In order to explore these issues further, it is necessary to say something more about the factual background of this case.

47 The four memoranda of costs with which we are concerned here are dated respectively: 20 March 2006, 26 May 2006 (two on this date), and 4 August 2006. As Mr Bolger’s submissions note, the Protective Commissioner took control of Mrs Allwood’s financial affairs from 28 September 2006. At that time the twelve month time period for seeking a costs assessment under s 199 had not yet expired. The submissions suggest that the twelve month period commenced when the respective invoices were paid. However the time limit prescribed under regulation 52 commences when the bill is given to the client. There is no evidence as to when these memoranda were “given” to Mrs Allwood. However it must be assumed that it was within a short time after the date which they bear. Accordingly, it must be taken that the time for seeking assessment in relation to the major bill of $58,981.45 had expired by the end of March 2007, and in relation to the other bills at a time shortly after the date which they bear.

48 With this background it is appropriate to turn to the correspondence between the Protective Commissioner and the defendant after the 28th September 2006.

49 On 18 October 2006 the Protective Commissioner wrote to the defendant’s firm seeking information on a number of matters relating to Mrs Allwood’s affairs and asking whether the defendant had previously acted or was presently acting for Mrs Allwood. On 20 October 2006 the defendant responded, confirming that “we act for, and have previously acted for, Mrs Allwood in a number of matters.” As to the other information requested by the Commissioner, the defendant sought costs of $500 in order to extract the information from the firm’s files.

50 The next letter which was in evidence before me was nearly five months later, on 2 April 2007. That was a letter from the Protective Commissioner to the defendant. However it is apparent that there must have been some correspondence in the meantime, for the letter of 2 April 2007 referred to a previous letter from the Commissioner dated 19 February 2007. In the letter of 2 April 2007 the Protective Commissioner sought the following documents:

“1. A copy of our client’s trust account statements in respect of all matters conducted by your firm on her behalf from July 2002;

2. A copy of all the retainers or costs agreements entered into by your firm with our client;

3. A copy of all the tax invoices issued by your firm to our client; and

4. Our client’s files with your office.”

51 On 17 May 2007 the Protective Commissioner again wrote to the defendant noting that no response had been received to the letter of 2 April 2007. The letter again sought Mrs Allwood’s files as well as the defendant’s tax invoices for costs and the relevant costs agreement. On 21 May 2007 the defendant responded in the following terms:

“We are instructed not the release our files to you. Our client is exercising her legal privilege in this regard. We are not aware of any term of the Office of the Protective Commissioner’s appointment or Office of the Protective Commissioner’s statutory powers which entitles you to demand all of our client’s files and past accounts, even prior to your appointment. Nor are we aware of your entitlement to assert, as in your letter dated 19 February 2007, that our client has no capacity to give us instructions. If you are able to advise us to the contrary, we will of course reconsider our decision in this regard.”

52 Further correspondence ensued between the parties. These included a letter dated 1 June 2007 from the Protective Commissioner, again seeking all tax invoices issued to Mrs Allwood with respect to work conducted by the defendant, as well as costs agreements entered into with her. Finally, on 21 June 2007, the defendant wrote to the Protective Commissioner enclosing trust account statements relating to the estate of the late Alan Allwood and the affairs of Mrs Allwood, and copies of various memoranda of costs and disbursements. The total amount which appeared to have been claimed in these memoranda was $274,813.89. However by letter dated 7 August 2007 the defendant conceded that a number of draft invoices had been erroneously included in the documents previously sent to the Commissioner. The letter noted “we trust this clarifies matters.”

53 On 9 August 2007 the Protective Commissioner wrote to the defendant in terms which included the following:

“With respect, this matter is far from clarified. Despite repeated requests, you have failed to provide itemised accounts and any costs agreements you have entered into with our client. As you know, our client no longer has the capacity to challenge or dispute transactions that she may have entered into or seek any entitlements she may have. It is therefore incumbent upon this office to ensure that our client’s rights and protected and that she receives her entitlements. Given your lack of co-operation and assistance to date, the writer will now seek instructions to force the production of our client’s files with your office and to make an application to the court for a full and proper accounting.”

54 The next letter in evidence before me was almost twelve months later. That was a letter to the defendant dated 17 July 2008 from Makinson and d’Apice, the solicitors for the Protective Commissioner, requiring production of all documents which had been sought in the Commissioner’s letter of 2 April 2007 (see paragraph [47] above). The defendant’s reply dated 22 July 2008, included the following paragraph:

“We confirm our telephone advice that our instructions from Mrs Allwood are not to further provide the documents to which you refer. We hold instructions that in particular the costs we have rendered are approved and accepted by our client and that such instructions were given prior to the appointment of the Protective Commissioner.”

55 On 6 August 2008 Makinson and d’Apice responded, drawing the defendant’s attention to s 23A(1) of the Protected Estates Act 1983 which provides that the power of a protected person to deal with his or her estate is suspended when committed to the management of the Protective Commissioner. It was therefore not open for the defendant to rely upon “instructions” from Mrs Allwood to deny the Commissioner access to documents or information which it had requested. The letter continued in the following terms:

“Substantial costs appear to have been charged by your office in relation to the administration of Mrs Allwood’s late husband’s estate and in relation to the proceedings before the Guardianship Tribunal. Our client wishes to ascertain whether those costs were properly disclosed and incurred in relation to those matters. We note your submission that you hold instructions that the costs were rendered, approved and accepted by Mrs Allwood prior to the appointment of the Protective Commissioner. In the absence of any evidence of any proper disclosure by way of costs agreement and records in relation to correspondence and communications and instructions between yourself and Mrs Allwood our client in not in a position to accept your assertion. In any event, any rights or causes of action attaching to the estate are not extinguished by our client’s appointment. Section 24(2)(o) of the Act provides that the Protective Commissioner may bring and defend actions, suits and other proceedings, on behalf of the protected person.”

56 On the evidence before me, no further documents or information were provided by the defendant. On 28 November 2008 the present proceedings were commenced. In an affidavit filed on 12 February 2009 the defendant annexed a costs agreement signed by Mrs Allwood in March 2005. This was the first occasion upon which the costs agreement was provided by the defendant, notwithstanding the various requests which had been made over a period of almost two years.

57 With this background I return to the matters relied upon by the defendant in submitting that the Court should not exercise its discretion to order the delivery of a bill of costs.

58 The first matters relied upon relate to the failure of Mrs Allwood to raise an objection or complaint in relation to the bills at the time of payment. It must be remembered that Mrs Allwood at that stage was 99 years old, and had been found to have mild cognitive impairment. The “payment” did not involve any voluntary action on her part, but consisted of the defendant transferring the relevant funds from the trust account which was held on her behalf. In these circumstances I can attach no weight whatsoever to Mrs Allwood’s failure to complain about the defendant’s fees.

59 The next matters relied upon by the defendant relate to the Protective Commissioner’s failure to seek a cost assessment within the period prescribed under s 199. However, as Mr Armfield pointed out, when one examines the timing at which the various events occurred, when the Protective Commissioner first came into a position to seek an assessment under s 199, the prescribed time had already expired in relation to all but the last memorandum. It is not physically possible for a client, or a client’s representative, to seek an assessment of costs when he or she has no information as to the amount of those costs or how they have been made up. But this was precisely the Protective Commissioner’s situation until he received the defendant’s letter dated 21 June 2007 enclosing trust account statements and copies of memoranda of costs, brief and general as these memoranda were. By that time, as Mr Armfield pointed out, the time limit had already expired in relation to three of the memoranda.

60 In these circumstances there is no basis whatsoever for the defendant’s criticism of the Protective Commissioner’s failure to seek an assessment within the prescribed time limit.

61 Two further matters need to be considered under this head. The first relates to Mr Bolger’s submission that the Court should not use its discretionary power to order the provision of a bill of costs in the circumstances where this will involve circumscribing the peremptory requirements of s 199 and regulation 52. In many situations this submission would carry very significant weight, given the discretionary nature of the Court’s power. However the situation here is a most unusual one. First, no relevant bills of costs have even been given by the defendant to the client. Mr Bolger acknowledges that the memoranda did not comply with the requirements of regulation 45. As Young J said in Sunman (incorporating part of the citation from para [37] above):

“It must be remembered that the whole purpose of the provisions in Division 5 of Pt11 are to give the person liable to pay the bill sufficient information to decide whether or not he or she will pay the bill or refer it for taxation. Accordingly, the law, either in legislation or by the use of the inherent power of the court, has always required there to be a detailed statement from the solicitor both as to costs and disbursements. The authorities show that unless there is such a detailed statement, what is provided by the solicitor is not to be regarded as a bill of costs within the meaning of the Division. This is so even though some of the cases which have been decided thereby throw considerable hardship on a solicitor in having to set out and prepare a bill years after he or she has done the work; see eg Swane v Marsh, NSW Court of Appeal, 18 October 1978, unreported.”

62 Were it not for the fact that the defendant’s memoranda were paid from Mrs. Allwood’s trust account, the time for applying for an assessment of those costs would not yet have commenced, as the memoranda are not “bills of costs” within the meaning of s 199(1). It is only as a result of the deeming provision in s 199(3) that the period for seeking assessment was taken to commence when the memoranda were given to Mrs Allwood. In the normal course of events this would wreak no injustice. For the client, in paying the costs, must be taken to have approved the memorandum, at least in principle. In this case however, the payment of the costs involved no voluntary action at all on the part of Mrs Allwood. The costs were simply deducted by the defendant from the trust account in her name. Nor, given her state of health at the time, could she be expected to have been able to make any analytical or critical assessment of the memoranda.

63 In these circumstances, I consider that there is every reason for using the Court’s power to order the delivery of bills of costs with the result that the time limit in s 199 will re-commence, and the plaintiff’s will, if they wish, be able to have the defendant’s costs assessed.

64 The final matter which requires to be considered under this head relates to any prejudice flowing to the defendant from an order that he deliver bills of costs to the plaintiffs. This was referred to during the hearing and also in Mr Bolger’s written submissions. The only prejudice which has been pointed to is the additional expense to the defendant, given the time which has elapsed since the work was carried out.

65 In the particular circumstances of this case, I cannot regard this as a significant factor, given that the delay was caused by the defendant’s failure to produce itemised bills in the first place, followed by his resistance to any request that he provide such bills or have them submitted for assessment.

66 I should note in this regard that Mr Bolger indicated at the hearing of the matter that if the Court were to grant leave for the plaintiffs to obtain an assessment out of time, the defendant had agreed that he would provide itemised bills. I find this concession extremely difficult to reconcile with the stance which the defendant has taken throughout these proceedings, which has involved a steadfast resistance to any order that itemised bills be delivered.

67 It is abundantly clear from all I have said that I have formed the strong view that all discretionary considerations favour the making of an order that the defendant provide bills of costs which comply with the relevant regulations. I do so in full knowledge and expectation that the time limit specified in s 199 and regulation 52 will commence upon delivery of the various bills.. I therefore propose to make the order as sought in paragraph 4 of the Summons. However I will extend the time for compliance to 42 days.

68 This takes me back to the other orders sought in the Summons. For reasons already given, I decline to make the order sought in paragraph 1. In relation to paragraph 2, I propose to make the orders referred to above (paragraph [16]). The costs disclosures and costs agreements which are sought in paragraph 3 have now been provided to the plaintiffs, and there is no utility in making this order. No argument was addressed in relation to paragraph 5. The defendant will require the files for the purpose of any assessment. In the circumstances, I propose to decline to make this order. In relation to paragraph 6, I understand that the defendant has already offered access to these files. Accordingly it must be taken that this order is not opposed.

69 The only matter which remains is the question of costs. Somewhat surprisingly, this matter was not adverted to by either counsel, either at the hearing or in their written submissions. Nevertheless an order for costs was sought in the Summons.

70 The effective dispute between the parties during the course of the hearing and submissions related to the plaintiffs’ entitlement to seek an assessment of the defendant’s costs. Insofar as the Summons sought an extension of time for costs to be assessed pursuant to the 2004 Act, the application was misconceived, as Mr Armfield conceded early in the hearing. By far the bulk of argument and submissions then related to the memoranda submitted under the 1987 Act. The plaintiffs’ primary application in this regard was for the Court to order an extension of time for the assessment of these costs, as sought in paragraph 1 of the Summons. As already indicated, I consider that the Court has no power to make that order. Once it was realised that an order under s 209C, as sought in paragraph 4 of the Summons, might have the effect of providing the plaintiffs with the relief they seek, attention became focused on this issue, which then occupied the bulk of the time and submissions. The plaintiffs have been successful in this regard. In the circumstances I propose to give the parties an opportunity to make further submissions as to costs if they wish to do so. In the absence of any such submissions I propose to order that the defendant pay half of the plaintiffs’ costs of these proceedings.

Orders of the Court

71 The formal orders I make are as follows:

1. I decline to make orders as sought in paragraphs 1, 3 and 5 of the Summons herein

2. In relation to paragraph 2, (relating to memoranda numbers 2, 3, 6, 8, 9, 10 and 11 in Schedule 1 to the Summons), the Court has no jurisdiction to make the order sought, and I thus decline to make the order.

3. Pursuant to paragraph 4, I order that the defendant provide to the plaintiff’s solicitors an itemised bill of costs in respect of the services rendered in memoranda 1, 4, 5 and 7 in Schedule 1 to the Summons, such bill or bills to be delivered within 42 days

4. I order that the defendant allow the plaintiffs to have access to the files relating to the costs referred to in Schedule 1 to the Summons

5. I reserve the question of costs.

6. The defendant is to file written submissions regarding costs by Monday 30 November 2009 and the plaintiff by Thursday 3 December 2009. Any subsequent submissions in reply must be received by Friday 4 December 2009.

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