Frigger v Murfett Legal Pty Ltd
[2012] WASC 447
•30 NOVEMBER 2012
FRIGGER -v- MURFETT LEGAL PTY LTD [2012] WASC 447
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2012] WASC 447 | |
| Case No: | LPA:26/2012 | 15 OCTOBER 2012 | |
| Coram: | HALL J | 30/11/12 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Application refused | ||
| B | |||
| PDF Version |
| Parties: | HARTMUT FRIGGER ANGELA FRIGGER MURFETT LEGAL PTY LTD |
Catchwords: | Costs Application for an extension of time for an assessment Factors to be considered Significant delay Whether satisfactorily explained Whether evidence that bill excessive Whether respondent would be prejudiced by an extension of time Whether it would be just and fair for an assessment to be dealt with out of the 12month period |
Legislation: | Legal Profession Act 2008 (WA), s 295 |
Case References: | Monopak Pty Ltd v Maxim Litigation Consultants [2007] WASC 112 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First-named Applicant
ANGELA FRIGGER
Second-named Applicant
AND
MURFETT LEGAL PTY LTD
Respondent
Catchwords:
Costs - Application for an extension of time for an assessment - Factors to be considered - Significant delay - Whether satisfactorily explained - Whether evidence that bill excessive - Whether respondent would be prejudiced by an extension of time - Whether it would be just and fair for an assessment to be dealt with out of the 12month period
Legislation:
Legal Profession Act 2008 (WA), s 295
(Page 2)
Result:
Application refused
Category: B
Representation:
Counsel:
First-named Applicant : No appearance
Second-named Applicant : In person
Respondent : Mr D Markovich
Solicitors:
First-named Applicant : In person
Second-named Applicant : In person
Respondent : Murfett Legal Pty Ltd
Case(s) referred to in judgment(s):
Monopak Pty Ltd v Maxim Litigation Consultants [2007] WASC 112
(Page 3)
- HALL J:
Introduction
1 On 9 July 2012 the applicants filed an application for an assessment of a bill for legal costs under pt 10 div 8 of the Legal Profession Act 2008 (WA) (the LPA). The bill in question was from the applicants' former solicitors, Murfett Legal Pty Ltd, the respondent in these proceedings. The bill was dated 18 October 2010.
2 An application by a client for a costs assessment must be made within 12 months after the bill was given or the request for payment was made to the client or the costs were paid if neither a bill was given nor a request made: s 295(6) of the LPA. There is a dispute as to when the bill was effectively given. The respondent claims that the bill was given on or about 18 October 2010 when it was sent to the applicants. The applicants claim that they did not receive the bill in a proper form until 7 January 2011 and that this is the relevant date from which the 12-month period for seeking an assessment should be calculated. On either view the application for an extension was filed out of time and cannot proceed unless an extension is granted. However, the extent of any delay is relevant to whether an extension should be granted. I will return to the issue of when the bill was given when dealing with the question of delay.
3 A client may make an application for an assessment to be made out of time. This court may grant an application for an assessment to be made out of time if, after having regard to the delay and the reasons for the delay, it determines that it is just and fair for the application to be dealt with after the 12-month period: s 295(7) of the LPA.
4 The procedure for applications for costs assessment made out of time is dealt with in cl 4.7.5 of the Consolidated Practice Directions. An applicant is required to file a chamber summons and an affidavit supporting the application. The affidavit should include details of:
(a) the delay;
(b) the reasons for the delay;
(c) whether there is evidence that suggests that the bill may be excessive;
(d) whether the legal practice has indicated it would oppose the application; and
(Page 4)
- (e) why it would be just and fair for the assessment to be dealt with out of the 12-month period.
5 The respondent does oppose the application for an extension of time. The applicants have filed three affidavits, each sworn by Mrs Angela Frigger, dated 6 July 2012, 20 August 2012 and 12 October 2012. The respondent has filed an affidavit from Mr Jason DeSilva sworn on 7 August 2012. Mr DeSilva is a solicitor and a director of the respondent.
Background
6 It is unnecessary to detail the long history of the litigation in which the applicants have been involved. It is sufficient to note that in September 2010 the applicants retained the respondent to represent them, somewhat ironically, at a costs hearing that was listed for two days in October 2010.
7 A costs agreement was entered into between the applicants and the respondent on 29 September 2010. The costs agreement contained a term to the effect that the applicants agreed to secure payments of all money payable to the respondent under the agreement by providing a charge over all their interests in real and personal property.
8 The agreement contained a schedule setting out an estimate of the costs of taking a statement from Mrs Frigger. The costs agreement also noted that the estimate was not a quote, it was based on information available at the time it was prepared and at a time when it may be difficult to predict all the work that would be required.
9 Following discussions, it was agreed that the respondent would retain counsel who had previously appeared for the applicants to appear for them at the October 2010 costs hearing. This was done because it was considered that counsel's familiarity with the matter would result in savings for the applicants.
10 On 6 October 2010 the respondent wrote to the applicants enclosing draft submissions in respect of the costs hearing. The letter also canvassed the issue of the respondent's costs and included a revised estimate. The revised estimate included an amount which it had been agreed would be paid to counsel who was to appear at the hearing.
11 On 18 October 2010 an email was sent by Mr Kevin Morgan, a consultant with the respondent, to the applicants. The email contained a number of attachments. Those attachments were a letter of the same date,
(Page 5)
- the relevant tax invoice, a letter from counsel, counsel's tax invoice and a trust transfer authority. At that time the respondent held a sum of money in trust on account of fees. The trust monies were insufficient to pay the full amount of the respondent's tax invoice (which included counsel's fees). The respondent's letter sought that the applicants authorise the use of the existing trust funds to make part-payment and that further funds be deposited into the trust account to meet the balance.
12 The tax invoice dated 18 October 2010 includes a detailed itemisation of the work done and costs incurred by the respondent. It also includes, as a final page, a form notifying the applicants of their rights in respect of the bill, including the right to have the costs assessed. A similar statement also appears on the copy of counsel's invoice.
13 At the hearing of this application Mrs Frigger, who appeared for herself and her husband, claimed that she had not received the email of 18 October 2010. That is not clearly stated in her affidavits. In her affidavit of 6 July 2012 Mrs Frigger stated as follows:
17. After the hearing in October 2010 I dismissed the respondent. On 22 November 2010 I received a letter from the respondent attached and marked ('AF10').
18. On 29 November 2010 I emailed the respondent and asked that it lodge its bill for taxation ('AF11').
19. On 3 December 2010 the respondent respondent [sic] in which it stated that if we did not apply for assessment by 10 December 2010 it would commence proceedings to recover balance ('AF12').
20. On 7 December 2010 and 4 January 2011 I asked for the bill to be issued to me to enable me to lodge it for taxation ('AF13' and 'AF14').
21. On 5 January 2010 I received an email from the respondent advising the bill is being emailed to me.
22. On 7 January 2010 I received a bill from the respondent dated 18 October 2010 ('AF15').
14 The implication of these paragraphs is that the applicants did not receive the email sent by Mr Morgan on 18 October 2010. That, however, is at odds with an email sent by Mrs Frigger on the same day to Mr Morgan authorising payment of counsel's invoice. Mr Morgan responded on the same day asking Mrs Frigger what she proposed to do in regard to the request that additional funds be paid into the trust account (see affidavit of Jason DeSilva pars 25 - 26). Furthermore letters were
(Page 6)
- sent by the respondent to the applicants on 17 November and 22 November 2010 noting that the invoice was issued on 18 October 2010, that counsel's fees had been paid as authorised and that a balance remained outstanding (affidavit of Jason DeSilva pars 28 - 29). That balance was $12,772.96.
15 On 29 November 2010 Mrs Frigger responded by email to Mr DeSilva in respect of the letter of 22 November 2010. She stated that she required the respondent's bill, including counsel's fees, to be lodged with the Supreme Court for taxation. She stated that she authorised the respondent to use the money held in trust to part-pay their bill. However this authorisation was made 'under protest'. She referred to the respondent not having given 'any, or any proper, disclosure' (affidavit of Jason DeSilva, par 30).
16 On 7 December 2010 Mrs Frigger sent an email to Mr DeSilva stating:
The form of the bills which you have issued to me are not acceptable to the Supreme Court for taxation. I am sure you already know this. As well, I simply do not have time this week to file them by 10 December 2010. I require you to issue me with bills in a format acceptable to the Supreme Court. I will then lodge them for taxation (affidavit of Jason DeSilva, par 32).
17 Mr DeSilva responded the same day pointing out that an itemised invoice had already been provided and suggesting that Mrs Frigger obtain legal advice in regard to her proposed application for assessment. On 9 December 2010 Mrs Frigger sent a further email to Mr DeSilva stating that the respondent's bill would be filed for taxation on 13 December 2010.
18 It is impossible to reconcile the email exchanges with the claim by Mrs Frigger that she did not receive the bill on or about 18 October 2010. In fact those emails are entirely consistent with the applicants having received the bill and having formed an intention to seek an assessment of costs.
19 It was also suggested by Mrs Frigger at the hearing of this application that the respondent's invoice did not contain the notice setting out the client's rights required by s 291 of the LPA. However the copy of the attachment provided in the affidavit of Mr DeSilva (JKD9) does include the required notice and there is no reason to doubt that what has been provided is a true copy of what was sent.
(Page 7)
20 No application for an assessment was made on 13 December 2010 or at any time until the present application was filed. Mrs Frigger explains the reasons for this delay in her affidavit sworn on 6 July 2012. She states that after receiving the bill she did some research on the LPA and formed the view that the respondent had not complied with the cost disclosure requirements of s 260 of the LPA. For this reason, in her view, no further amounts were payable until the bill was assessed. She states that because she heard nothing further from the respondent between January 2010 and June 2012 she assumed that the respondent had decided not to pursue the balance of the bill. However in April 2012 she became aware that caveats had been lodged against three of her properties. The caveats were lodged by the respondent on 4 November 2011 pursuant to the costs agreement. On 22 June 2012 Mrs Frigger emailed the respondent and requested they remove the caveats and agree to an assessment of costs out of time. On 25 June 2012 the respondent replied refusing the applicants' requests.
Delay
21 In my view the evidence clearly establishes that the applicants received the bill in proper form on or about 18 October 2010. They were aware of their rights to seek an assessment and formed an intention at that time to do so. The failure to exercise those rights is said to have been caused by a particular view that Mrs Frigger took of the effect of the LPA. However she was not led to that view by the respondent nor did she ever communicate it. She appears to have decided to take no action in the hope, albeit risky, that no recovery action would be taken by the respondent.
22 The 12-month period for seeking an assessment of costs expired on or about 18 October 2011. To now seek an assessment out of time, being nine months since the time period expired and 21 months since the bill issued, is a significant delay. I do not accept that the reasons given for that delay are sufficient to justify it. Clearly, notwithstanding Mrs Frigger's own views as to whether the bill was enforceable, she was aware of the right to seek an assessment, and that would have been the prudent and obvious course to take. She made a considered decision not to take that course.
Is there evidence that the bill is excessive?
23 Mrs Frigger claims that the bill is excessive and that the work that was to be done by the respondent was limited. She says that, at least initially, all the respondent was required to do was prepare a statement from her. This is supported to some extent by the reference in the
(Page 8)
- schedule to the costs agreement. However it would appear that the work extended beyond that originally anticipated and a revised estimate was provided in the letter of 6 October 2010. There is nothing to suggest that the applicants' disputed the revised estimate at the time.
24 Mrs Frigger questioned whether the respondent had adequately complied with the requirements of disclosure as to costs required by s 260 of the LPA. Having read the costs agreement and the correspondence between the respondent and the applicants I am unable to accept that there is any deficiency in this regard.
25 It may well be that the costs rose beyond the applicants' initial expectations. That is not unusual, particularly where proceedings are complex and long-running. The applicants may well have hoped that their costs could be contained, but the possibility that the respondent's costs could rise beyond the initial estimate was raised from the outset. The evidence provided on this application does not enable me to conclude that there is a significant possibility that the costs were excessive.
Prejudice to the respondent
26 Generally speaking there are good reasons why compliance with time limits of the type relevant here should be adhered to. Legal practitioners are entitled to assume that in circumstances where the client was aware of their rights to seek an assessment and more than 12 months has elapsed since the date of the bill an assessment will not be sought. It may well be that they will arrange their businesses on the basis of such an assumption. It is also possible that a delay in seeking an assessment may prejudice a legal practice because memories may fade and the relevant legal personnel may move on to other positions.
27 However, other than the general prejudice that may flow from delay, it is relevant to note that the respondent did little to pursue the costs other than lodging the caveats. I accept that the respondent never abandoned its costs claim but the failure to actively pursue it limits the prejudice that the respondent might suffer if an extension was granted. The position might be different if the respondent had expended significant time and resources in pursuing the costs on the basis that no assessment would be sought.
28 It was suggested on behalf of the respondent that it was prejudiced because it has paid goods and services tax (GST) in respect of the costs. Depending on the accounting method used GST may be payable for services charged but not paid for. I accept that this may have occurred,
(Page 9)
- however any loss in that regard could be ameliorated if the costs were reduced on an assessment.
Conclusion
29 The decision whether to grant an extension of time is a discretionary one. It requires the consideration and weighing of the relevant factors. The factors are not immutable or exhaustive and in each case it will be a question of determining what is in the interests of justice in the particular circumstances of the case: Monopak Pty Ltd v Maxim Litigation Consultants [2007] WASC 112.
30 In the present case the delay is significant and not satisfactorily explained. I am not satisfied that there is clear evidence that the bill was excessive or that refusal to enlarge time might result in injustice to the applicants. While I am likewise not satisfied that there would be a specific prejudice to the respondent other than the general prejudice flowing from delay itself, that is only one factor that must be born in mind and in this case is not enough to persuade me that an extension would be appropriate.
31 The purpose of the provision permitting a client to apply for an assessment of costs is to protect clients against excessive charges by a practitioner, and to enable a client to be satisfied that a bill of costs is not excessive. The Act imposes time limits to prevent a client from unfairly taking advantage of the assessment provisions to delay the obligation to pay proper costs, and to avoid frivolous objections.
32 Taking all of the relevant factors into account I have concluded that the application for an extension of time should be refused. In particular, the delay is significant and there is no clear evidence that the bill is excessive. I do not consider that it would be just and fair for an assessment to now occur.
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