Jarvie v Insolvency & Trustee Service Australia - [2008] FMCA 1511

FEDERAL MAGISTRATES COURT OF AUSTRALIA

JARVIE v INSOLVENCY & TRUSTEE SERVICE AUSTRALIA & ORS

[2008] FMCA 1511

BANKRUPTCY – Application under s.104 of the Bankruptcy Act 1966 (Cth) against decision of Trustee to accept proof of debt – review of the decision to admit a proof.

Bankruptcy Act 1966 (Cth) s.104
Family Court Rules 2004 (Cth)
Family Law Act 1975 (Cth)
Family Law Regulations 1984 (Cth)
Federal Magistrates Court Rules 2001 (Cth), r.13.03A(c)
Legal Profession Act 1987 (NSW), Part 11
Legal Profession Act 2004 (NSW), Part 3.2
Property (Relationship) Act 1984 (NSW)

Boensch v Pascoe [2006] FMCA 1396
Wilson (dec’d) Re Wilson v Official Trustee in Bankruptcy [2000] FCA 1251

Applicant:

RUSSELL ALAN JARVIE

First Respondent:

INSOLVENCY & TRUSTEE SERVICE AUSTRALIA

Second Respondent:

C M JEWELL & ASSOCIATES PTY LTD

Third Respondent:

DIMOCKS FAMILY LAWYERS

File number:

SYG 221 of 2008

Judgment of:

Lloyd-Jones FM

Hearing date:

15 September 2008

Delivered at:

Sydney

Delivered on:

7 November 2008

REPRESENTATION

The Applicant:

Mr Russell Alan Jarvie appeared on his own behalf.

Counsel for the First Respondent:

Mr S.M. Golledge

Solicitors for the Second Respondent:

Mr A Benatatos of Benatatos White Solicitors

Solicitors for the Third Respondent:

Ms V.M. Jackson of Dimocks Family Lawyers

ORDERS

That the Proof of Debt filed by C M Jewell & Associates Pty Ltd be withdrawn and a fresh Proof of Debt be tendered.
The claim against the acceptance of the Proof of Debt filed by Dimocks Family Lawyers is dismissed.
The first and third respondents’ costs be taxed and paid from the estate of debtor in accordance with the Bankruptcy Act 1966 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 221 of 2008

RUSSELL ALAN JARVIE

Applicant

And

INSOLVENCY & TRUSTEE SERVICE AUSTRALIA

First Respondent

CM JEWELL & ASSOCIATES PTY LTD

Second Respondent

DIMOCKS FAMILY LAWYERS

Third Respondent

REASONS FOR JUDGMENT

The proceedings

This is an appeal under s.104 of the Bankruptcy Act 1966 (Cth) (“the Act”). It is a hearing de novo and the question before the Court is whether the creditors do or do not have claims capable of proof against the estate.
The applicant, Russell Alan Jarvie, is a self represented litigant and has initiated proceedings in this Court that contain a number of defects in the pleadings. The first respondent, Insolvency & Trustee Service Australia (ITSA), has briefed Mr Golledge of Counsel to appear in the proceedings and I will return to that issue below. Neither the original application, nor the amended application, make any reference to the section of the Act under which these proceedings commenced. However, it appears that it is an application under s.104, as the applicant is seeking a review of a decision of the Trustee in bankruptcy in accepting a proof of debt from two creditors.
The application was filed on 31 January 2008. The Trustee’s decision in respect to the proof of debt filed by C M Jewell & Associates Pty Ltd was made at some time prior to 22 March 2007, because that is the date that the Trustee notified Mr Jarvie of its decision to accept the proof of debt. Section 104(3) of the Act provides that:
(3) Subject to the power of the Court to extend the time, an application under this section to review a decision shall not be heard by the Court unless it was made within 21 days from the date on which the decision was made.
On the material available to the Court, it is apparent that the application was not filed within that time limit. The first question is then whether the Court should grant an extension of time for the filing of the application. The language in this subsection strongly indicates that an extension of time should not be granted lightly. Bankrupt estates need to administered effectively and promptly. Time limitations are provided so that Trustees and creditors are not left in doubt for significant periods about what the claims are. Unfortunately, there is nothing before the Court to indicate the status of the administration of the estate and whether the Trustee is in a position to make distributions to the creditors.
In considering whether to grant an extension of time, I must take into account the prospects of the review application and the interests of the administration of justice. The Court does not have the benefit of having the Trustee of the bankrupt estate present in Court, and I will address that situation shortly. None of the respondents in these proceedings have raised any issue in respect to the extension of time. Further, Mr Jarvie, having no legal training or experience in the conduct of proceedings, is labouring under this disadvantage and does not appear to have any knowledge that a time limit, or an extension of time provision, applies to this type of application.
The affidavit of Mr C M Jewell indicates that there was an error in the Proof of Debt filed with the Trustee in bankruptcy and that this error only became apparent in the preparation of affidavits for these proceedings. This persuades me that the matter should proceed in the interest of the administration of justice. To further complicate the matter, the application to date has been disjointed in its passage through the Court.
The initial application was filed on 31 January 2008 with a first return date of 15 February before a Registrar. On that date the matter was adjourned to 25 March 2008. Orders were made permitting the applicant to file an amended application and further affidavit evidence before 15 April 2008 and the respondents to file and serve any affidavit evidence in reply on or before 29 April 2008. During that hearing the question was raised as to why the first respondent in proceedings was ITSA and not the Official Trustee. There was an explanation provided to the Registrar on that occasion, but there was no change to the pleadings. The matter was listed for hearing on 6 May 2008 before the Registrar.
On that date, the matter was transferred to this Court. The three respondents were represented but there was no appearance by Mr Jarvie. I adjourned the hearing to 13 May 2008 so that Mr Jarvie could be notified. On 13 May 2008 the three respondents were represented, but there was no appeared for Mr Jarvie, so I dismissed the application under the provisions of r.13.03A(c) of the Federal Magistrates Court Rules 2001. On 22 May 2008, Mr Jarvie filed an interim application seeking that the matter be reinstated on the grounds that the applicant was not notified of the hearing date by the Court. As there was considerable doubt as to the correct notification of the hearing, the matter was reinstated and listed for hearing on 15 September 2008.
The passage of this matter and all of the previous litigation has been further complicated by the refusal by Mr Jarvie to provide direct contact details. This is an issue in his communications with Dimocks Family Lawyers and is expanded on below. Dimocks Family Lawyers could only communicate with Mr Jarvie via an ex-employee of his, Ms Lesley Ness. More recently Ms Ness has become seriously ill and the Court was advised of her passing on the day prior to the final hearing of this matter. In the period that Mr Jarvie has been before this Court, communication with him has been via email transmission or the addressing of correspondence to his mother’s residence.
No clear explanation has been provided to the Court by Mr Jarvie as to the reason for his reluctance to provide direct access to him for the service of documents. This has resulted in some adjournments of the matter as Mr Jarvie did not appear at the correct time at the scheduled hearing. Despite these numerous problems with the pleadings and with the attendance at the hearings, I believe Mr Jarvie should be provided with the opportunity to put his claim before the Court. As I pointed out in Boensch v Pascoe [2006] FMCA 1396 at [33]:
[33] The Federal Magistrates Court is a Court of original jurisdiction in all matters arising under the Bankruptcy Act. When the Court was created, the objects set out in the Act state that the Court is to “operate as informally as possible in the exercise of judicial power”, use “streamlined procedures” and operate without undue formality. In other words, it was established to deal quickly, simply and cheaply with less complex litigation …
In the circumstances I have permitted Mr Jarvie to proceed with his claims in a formal hearing despite a number of omissions and failures in his pleadings and dealings with the Court.
Mr Golledge, who appeared for ITSA, submitted to the Court that the first respondent ought to have been the Official Trustee in bankruptcy as this matter is an appeal against the Trustee’s decision and not that of ITSA. However, Mr Golledge advised the Court that he was instructed not to challenge the pleadings in this respect and in effect appears as an observer. Mr Golledge indicated to the Court that there is authority that says that the Trustee plays a minimal role in these proceedings and referred the Court to the decision Wilson (dec’d) Re Wilson v Official Trustee in Bankruptcy [2000] FCA 1251 per Emmett J at [67], where his Honour states:
In my view the role of the Trustee in the proceedings should have been limited to ensuring that all relevant evidence was available and that all appropriate arguments were going to be advanced for the benefit of the estates. That would entail something more than merely filing a submitting appearance and nothing more. On the other hand, it may be that so long as reasonable opportunity was afforded to the Trustee, with the benefit of legal advice, to consider the evidence that was to be relied on by both parties and the arguments to be advanced, that is the extent of the necessary involvement of the Trustee. Some presence in the proceedings may be required so that the Court could be informed of the Trustee's position. For example, it may be that the Court would require to be satisfied that the Trustee had taken the view that all appropriate arguments had been advanced on behalf of the estates. On the other hand, there would not normally be any need for counsel or solicitor to participate in the substance of the proceedings at first instance.
Mr Golledge indicated that he would tender the Proof of Debts of the two creditors: C M Jewell & Associates Pty Ltd and Dimocks Family Lawyers. There was third Proof of Debt which had now been withdrawn but that should not be taken to be an admission.
In the circumstances, I am satisfied that although the Trustee is not present, the relevant Proof of Debt that is the subject of this application had been placed before the Court and the basic requirements of the Trustee have been fulfilled.
The original application was filed on 31 January 2008 and an amended application being filed on 16 April 2008 which relies on the grounds stated in the original supporting affidavit filed on 31 January 2008. Mr Jarvie seeks the following orders.
1. That the Trustee in Bankruptcy stands aside whilst the Proof of Debts filed by
1. C M Jewell & Associates Pty Ltd is dismissed.
2. Dimocks FamilyLawyers is dismissed.
2. That the Court dismiss the Proof of Debt filed by C M Jewell & Associates Pty Ltd due to C M Jewell not following Court orders issued by the Land & Environment Court regarding his remuneration as a Court Appointed Expert.
Therefore the most appropriate forum for these costs to be considered would be the Land & Environment Court where the initial proceedings commenced.
3. That the Court takes into consideration orders made in the Land & Environment Court regarding the costs submitted to the Court by C M Jewell & Associates Pty Ltd and orders stating that costs be reserved.
4. That the Court takes into consideration Dimocks have NO signed agreement or judgment in there (sic) favour and any preliminary work carried out has been paid.
No appearance to the Federal Magistrate Court on 2 occasions when the registrar made special comment on them to appear. Costs against RESPONDENTS No2 and No 3.

Evidence

The following evidence was relied upon by Mr Jarvie:
a)Exhibit “A1” – affidavit of Russell Alan Jarvie sworn 29 January 2008;
b)Exhibit “A2” – affidavit of Russell Alan Jarvie sworn 15 April 2008; and
c)Exhibit “A3” – facsimile transmission from C M Jewell & Associates Pty Ltd addressed to the Land & Environment Court of NSW.
The following material was tendered by the Insolvency & Trustee Service Australia:
a)Exhibit “R1” – proof of debt submitted by C M Jewell & Associates Pty Ltd; and
b)Exhibit “R2” – proof of debt submitted by Dimocks Family Lawyers.
The following material was tendered on behalf of the second respondent:
a)Exhibit “R3” – orders of Susan Dixon, Registrar of the NSW Land & Environment Court dated 23 January 2006; and
b)Exhibit “R4” – affidavit of Christopher Jewell sworn 1 May 2008.
The following material was filed on behalf of the third respondent:
a)Exhibit “R5” – affidavit of Christopher John David Dimock sworn 29 April 2008.
Each of the affidavits were read and no objections were raised as to their content.
The following subpoenas were issued on 20 January 2008:
a)To C M Jewell care of C M Jewell & Associates Pty Ltd to produce documents described as:
All documents, emails, faxes, phone correspondence and any other form of correspondence between the Respondent and Abbott Tout Lawyers and the Land & Environment Court of New South Walews from January 2006 onwards.
b)Dimocks Family Lawyers to produce documents described as follows:
All documents, emails, faxes, phone correspondence and any other form of correspondence between the local court Sydney, Child support solicitors & mothers solicitor.

Claims against C M Jewell & Associates Pty Ltd

The Proof of Debt lodged by C M Jewell & Associates essentially depends upon whether an entitlement arises on the terms of the NSW Land & Environment Court’s orders that were made and the agreement between the parties made which formed the basis for the Court’s order. The claim being made by Mr Jarvie is in effect that the part of work performed by Mr Jewell fell outside the scope of the Court order and thus there was no underlying entitlement that might arise from the retainer. The question for this Court is to interpret the scope and construction of the Court order.

Mr Jarvie’s submissions

Mr Jarvie advised the Court that Mr C M Jewell was a Court appointed expert by the Land & Environment Court in relation to hydrogeology in proceedings No 11350 of 2004 between Jarvie and the Hawkesbury City Council (“the Council”). In those proceedings Mr Jarvie was appealing against the deemed refusal of a development application for a commercial water bore on his property on the Bell Line of Road, Kurrajong Heights. Mr Jewell was appointed to provide expert advice on hydro-geological matters in relation to issues in the Council’s Statement of Issues dated 14 December 2004. The responsibility for the payment of C M Jewell & Associates fees was divided equally between Mr Jarvie and the Council.
The affidavit of Mr Jarvie sworn 21 January 2008 sets out the essential elements of his dispute with C M Jewell & Associates:
1. On the 8 March 2007 the Respondent (CM Jewell & Associates) lodged a Proof of Debt in the amount of $5,410.63.
2. On the 23 March 2007 I wrote to the Trustee in Bankruptcy disputing the amount of $5,410.63. A copy of the letter dated 23 March 2007 is annexed to this affidavit and marked “A”.
3. On the 2 January 2008 I wrote to the Trustee in Bankruptcy again disputing the amount lodged by the Respondent (C M Jewell & Associates). A copy of the letter dated 2 January 2008 is annexed to this affidavit and marked “B”.
4. On the 16 January 2008 I was advised by Joyce Fu of ITSA that she generally agreed with the decision made to allow the Proof of Debt from the Respondent (C M Jewell & Associates).
5. On the 11 August 2006 the Respondents (C M Jewell & Associates) solicitor wrote to the Land & Environment Court stating that “as there is no contract between the parties and our client undertook the work by appointment of the Court”. A copy of the letter dated 11 August 2006 is annexed to this affidavit and marked “C”.
6. I dispute the amount as the Respondent (C M Jewell & Associates) had orders made from the Land & Environment Court regarding their costs which detailed the amount payable between the two parties. A copy of the orders dated 23 January 2006 is annexed to this affidavit and marked “D”.
7. The Respondent (C M Jewell & Associates) did not carry out the “Site visit” task as indicated in their costs therefore the Respondents costs should have been reduced by $1,650.00 and equally divided and reduced between the two parties.
8. On the 28 March 2006 a hearing was to be conducted on property between myself, the Land & Environment Court and Hawkesbury City Council but no court experts. On the 22 March 2006 orders stated that the on-site hearing be vacated. There was no request from me for Mr C M Jewell to appear at court on the 28 March 2006 but his invoice dated 30 March 2006 states an amount for appearing in court on 28 March 2006.
9. The Respondent (C M Jewell & Associates) on the 19 January 2006 before Chief Judge Preston in the Land & Environment Court Mr C M Jewell was asked for a quote to conduct more work in the case. Chief Judge Preston stated “Mr Jewell understands this is a cap he just has to work within that and cut his losses”. A taped transcript of the statement made by Chief Judge Preston can be submitted to the Court.
10. The Respondent (C M Jewell & Associates) has deviated from the orders set down in the Land & Environment Court dated 23 January 2006.
11. On the 22 March 2006 Court orders were made and at point 4 of those orders it states that the on-site hearing be vacated and at point 3 of those orders it states “Costs reserved”. A copy of the orders dated 22 March 2006 is annexed to this affidavit and marked “E”.
12. On the Respondents (C M Jewell & Associates) invoice number 00011919 dated 23 March 2006 it has an amount of $4,400.00 dated 3 February 2006. The orders dated 23 January 2006 state at point 4 that the amount of $1,815.00 be deducted – this amount to be paid by the other party.
13. The Respondents (C M Jewell & Associates) invoices dated the 23 March 2006 and 30 March 2006 varies from the amounts stated on orders dated 23 March 2006. A copy of those invoices is annexed to this affidavit and marked “F”.
14. The Respondent (ITSA) has not taken into account the orders issued by the Land & Environment Court regarding C M Jewell & Associates costs and I therefore ask the Court to review their decision.
15. The amount payable to the Respondent (C M Jewell & Associates) by me is as follows: -
Total Costs     $11,220.00    as per orders 23/1/06
Less              $1,815.00       payable by other party
Total            $9,405.00
Equal Portions $4,702.50
Less site visit     $825.00        $1,650.00 divided by 2
Less court appearance   $1,375.00     $2,750.00 divided by 2
Total payable $2,502.50
16. Orders made in the Land & Environment Court on 22 March 2006 state that costs are reserved which includes costs claimed by C M Jewell & Associates.
17. Court orders filed on 30 May 2007 state that proceedings in the Land & Environment Court are stayed until the Trustees in bankruptcy makes an application to the Court to proceed with the matter or when I make an application to the Court following discharge from the bankruptcy. A copy of the orders dated 30 May 2007 is annexed to this affidavit and marked “G”.
On 15 April 2008 Mr Jarvie filed a further affidavit and in effect substantially repeats the contents of his first affidavit which is reproduced above.
Mr Jarvie in oral submissions submits that the NSW Land & Environment Court required C M Jewell & Associates to prepare a quote for their professional work. This quotation was delivered and was capped by the Court and if Mr Jewell needed to change the cap he was required to go back to Court for new orders. Mr Jarvie submits that no new orders were sought but Mr Jewell departed from the work that he quoted to perform. Mr Jewell was also required to appear in Court for a three day hearing.

The first day was to be held on site followed by two days in Court. The site visit was vacated and the first day was re-allocated for a hearing of a Notice of Motion that had been filed by Mr Jarvie. Mr Jarvie contends that Mr Jewell’s expenses for attending Court was in the vicinity of $3,000 per day with travel. Those costs would be shared halved between Counsel and Mr Jarvie. Mr Jarvie claimed that Mr Jewell inquired with the Court on 22 March regarding the need for his attendance at Court for three days commencing 28 March. Mr Jarvie’s complaint is that Mr Jewell, when answering the subpoena issued on 20 June 2008 to produce documents, failed to supply any correspondence from the Court directing Mr Jewell to attend.
Mr Jarvie raised the question “Why do I need to pay him to appear in Court”? Mr Jarvie is challenging the Proof of Debt and in particular the invoice number 00011924 issued on 30 March 2006 which contains the entry:
Professional Services         Hrs/Items Rate Amount ex GST
28/03/2006 CMJ – attend Court 6.5    $275.00        $1.787.50
28/03/2006 CMJ – travel time    4      $275.00        $1,100.00
Total          $4,025.00
GST           $402.50
Balance due $4,427.50
Mr Jarvie brings to the Court’s attention that the Proof of Debt which was originally $5,410.63 has been reduced to $4,500. The basis for this was that Mr Jewell had originally charged both parties equally to read objection letters forwarded to the Council which should have been charged to Hawkesbury City Council.

Mr Benatatos’ submissions in respect of C M Jewell

Mr Benatatos indicated to the Court that he relied upon the affidavit of Christopher Jewell sworn 1 May 2008 and the relevant paragraphs of that affidavit are reproduced as follows:
1. On 4 March 2005, I was appointed by the NSW Land & Environment Court as a court appointed expert in relation to hydrogeology in proceedings number 11350 of 2004 between Russell Jarvie as applicant and Hawkesbury City Council as respondent.
4. On 21 April 2005, I received an email from Abbott Tout requesting that I do no further work in relation to the matter until so ordered by the Court.
5. On 30 May 2005, I received a letter from Woolf Associates Solicitors dated 30 May 2005 on behalf of Mr Jarvie, a copy of which is annexed hereto and marked with the letter “C”.
6. On 5 July 2005, the Land & Environment Court made certain orders directing me to respond to the questions put to me by Woolf Associates on behalf of Mr Jarvie in their letter dated 30 May 2005. Annexed here to and marked with letter “D” is a copy of the order of the Land & Environment Court dated 5 July 2005.
8. By way of response to the letter, a copy of which is Annexure E hereto, I prepared a quotation dated 20 January 2006, a copy of which is annexed hereto and marked with the letter “F”. A copy of this quotation was forwarded to the Land & Environment Court, Woolf Associates and Abbott Tout Lawyers.
12. Pursuant to the orders of the Court, work was undertaken by me in relation to the proceedings between Russell Jarvie and Hawkesbury City Council.
13. After undertaking such work, I prepared tax invoices. Annexed hereto and marked with letter “J” is a copy of a tax invoice dated 23 March 2006 addressed to Mr Jarvie and Hawkesbury City Council in the sum of $6,393.75. Annexed hereto and marked with the letter “K” is a copy of a tax invoice addressed to Mr R Jarvie being one-half share of the invoice number 00011919 which is Annexure I hereto.
14. Annexed hereto and marked with the letter “L” is a tax invoice dated 30 March 2006 prepared by me in the sum of $4,427.50 reflecting further work done in relation to the Land & Environment Court proceedings directed by the Court.
15. Annexed hereto and marked with the letter “M” is a tax invoice prepared by me dated 30 March 2006 being number 00011924B addressed to Mr Jarvie being one-half of the tax invoice which is referred to in the previous paragraph.
16. In preparing for these proceedings, I have been made aware Order 4(a) of the orders dated 23 January 2006 which required me to deduct the sum of $1,815.00 from my total invoice which sum was to be paid by Hawkesbury City Council. As a consequence of this deduction, I concede that the amount payable by Russell Jarvie in relation to my invoices dated 23 March 2006 and 30 march 2006, should, in fact, be:
Invoice dated 23 March 2006              $6,393.75
Invoice dated 30 March 2006              $4,427.50
TOTAL  $10,821.25
Less: Amount payable by
Hawkesbury City Council   $1,815.00
Sub-total  $9,006.25
50% share being payable by R Jarvie $4,503.13
17. All work referred to in my invoices dated 23 March and 30 March 2006 directly relates to work anticipated by the orders of the Land & Environment Court dated 23 June 2006 and 23 March 2006. Although there were some changes to the work required as follows:
(a) The meeting and discussions between myself and Mr Lee ordered by the Court on 22 March 2006 was not anticipated in the order dated 23 January 2006 and the site visit referred to in the order dated 23 January 2006 did not need to take place. Consequently, there was a deduction for the anticipated cost of the site visit being $1,650.00 but there was additional work incurred as a consequence of the order dated 22 March 2006 as detailed in the invoice dated 22 March 2006 as detailed in the invoice dated 30 March 2006 being my discussions with J Lee and preparation of joint program.
18. On 28 March 2006 the matter was originally scheduled to be listed for hearing on site but that hearing took place at Court. I attended at the Court on that date for the hearing as did all other expert witnesses relevant to the case. I attended at Court from 9.30am till 4.30pm. None of the experts in any event were called to give evidence after Mr Jarvie withdrew his appeal.
19. I say that the sum of $4,503.13 remains outstanding to me by Russell Jarvie pursuant to the orders of the Land & Environment Court dated 23 January 2006 and 22 March 2006 as detailed in my invoices dated 23 March 2006 and 30 March 2006.
Paragraph eight of Mr Jewell’s affidavit refers to the request to him by Abbott Tout for additional work to be undertaken regarding the introduction of new material. When Mr Jewell received the request, he prepared a quotation (Annexure “F”) amounting to $11,220. That included a site visit together with an allowance to attend Court to give evidence (Annexure “F”, page 2). That quote was accepted by the parties and the Court incorporated it into directions made by it (Annexure “G”). Mr Jewell undertook the additional work pursuant to that quotation and tax invoices were rendered by Mr Jewell in relation to the work performed (Annexure “J” and Annexure “L”). Individual tax invoices (Annexure “K” and Annexure “N”) were provided to Mr Jarvie representing his share of the work pursuant to the direction. In preparing the affidavit, Mr Jewell became aware that there had been an error in the way the accounts were submitted to Mr Jarvie. Mr Jewell should have deducted from the overall sum an amount of $1,815.00 which should have been paid by the Council. The balance thereafter was to be paid equally by Mr Jarvie and the Council, hence the concession in Mr Jewell’s affidavit at paragraph 16.
Mr Benatatos submits that the Court appointed Mr Jewell to undertake work on behalf of the parties as an independent expert. However, there will invariably be some ebb and flow in the way the matter is carried out. There may also be some variation from the work outlined in the quotation. An appearance in Court and a site visit was anticipated in the quotation but the site visit was cancelled. Mr Jewell attended Court on 28 March 2006 from 9.30am until 4.30pm and at no stage during that day was he informed that his attendance was not required. Mr Jewell along with other experts attended the Court in good faith to give evidence if and when required to do so.
The total value of the invoices rendered by Mr Jewell came in at $10,821.25, below the quotation of $11,220. Mr Benatatos submits that the argument raised by Mr Jarvie to cover the change in the required work to be undertaken was unreasonable in the circumstances. If the cap was to be exceeded by the change in the work undertaken, Mr Jewell would have sought a variation. However, in the circumstances where the work performed was within the overall quotation, Mr Jewell did not waste time in remitting the matter back to the Court for an approval in the reduction in the work performed and charged.

Consideration in respect of C M Jewell & Associates proof of debt

The orders made in the Land & Environment Court of NSW in proceedings number 11350 of 2004 by Registrar Susan Dixon on 23 January 2006 in the matter of Russell Jarvie (applicant) v Hawkesbury Shire Council (respondent) state:
1. Mr Chris Jewell of C M Jewell & Associates remains the Court Appointed Expert in hydrogeology in these proceedings.
2. Mr Jewell has advised his further total costs to complete the following tasks are as follows:
Review of Lee Report and preparation of supplementary report
16 hrs @$275.00            $4,400.00
Office Support staff
4hrs @$300.00  $300.00
Site visit
6hrs @$275.00  $1,650.00
Preparation and responding to pre-hearing questions from parties
4hrs @$275.00          $1,100.00
Attend Court to give evidence
6hrs @ $275.00     $1,100.00
Sub-total                $10,200.00
GST  $1,020.00
Total  $11,220.00
3. The estimate of the portion of the first item in paragraph 2 above concerns reviewing objector’s written matters is 6 hours, or $1815.00 with GST.
4. (a) The parties are to pay an amount equal to the total cost in paragraph 2 above less $1815.00, namely $9405.00 in equal portions.
(b) The Council is to pay the cost in paragraph 3, namely $1815.00/
Further orders made in the Land & Environment Court of NSW – proceeding No 11350 of 2004 by Registrar Susan Dixon on 22 March 2006 state:
1. The hydrogeological experts Jewell and Lee confer on 27 March 2006 in accordance with the Expert Witness Practice Direction and :-
a) Identify the matters upon which they agree;
b) Identify the matters upon which they disagree and provide reasons for any disagreement;
c) A record of the conference including the matters agreed and disagreed be reduced to writing in the form of a joint report to be filed by 4.00pm on 27 March 2006.
2. Order 1 of the Applicant’s Notice of Motion filed 20 March 2006 stood over to hearing.
3. Costs reserved.
4. The on-site hearing be vacated. Matter to commence in Court at 10.00am 28 March 2006.
5. A copy of these directions be served on the experts.
As I understand and this does not appear to be disputed by the parties Mr Jewell and other experts attended the Land & Environment Court of NSW on 28 March 2006 in accordance with the Court order referred to above. Mr Jewell in his affidavit (paragraph 18) indicates that none of the experts were called to give evidence as Mr Jarvie during the course of that day had withdrawn his appeal and the matter did not proceed past that point.
Orders 4 and 5 of Registrar Dixon’s orders made on 22 March 2006 clearly set out the re-arrangement of the hearing before the NSW Land & Environment Court. The matter was originally scheduled for a three day hearing with the first being on-site and the following two in Court. The on-site hearing was cancelled however the remainder of the hearing was to commence on 28 March 2006. Order 5 requires the court appointed experts to be notified of the new arrangements for the hearing. In the absence of any order excusing the court appointed experts from the hearing, it must be assumed that they were required to attend on the re-scheduled hearing dates.
It was during the hearing on 28 March that Mr Jarvie withdrew his appeal and the matter came to a conclusion. That course of the proceedings was unknown to the parties other than Mr Jarvie. Consequently, the experts were required to attend as they did and are entitled to the payment of their expenses. In the circumstances, based on the material placed before me I am satisfied that Mr Jewell had a legitimate claim for expenses incurred for his attendance and travel to the Land & Environment Court on 28 March 2006.
The admission made by Mr Jewell in his affidavit (paragraphs 16-19 inclusive) identifies an error in the preparation of the Proof of Debt. That should be corrected and I order that the Proof of Debt be withdrawn and a fresh proof tendered.

Claim against Dimocks Family Lawyers

Dimocks Family Lawyers’ are entitled to fees for representing Mr Jarvie pursuant to the Family Law Rules governing the entitlement of a solicitor to be paid in family law matters. Dimocks Family Lawyers rely upon the provision of the rules which entitle a lawyer or solicitor to be paid. They provide a cost agreement in accordance with the Family Law Rules and instructions are given to proceed in a matter notwithstanding the absence of an executed cost agreement.
Part 11 of the Legal Profession Act 1987 (NSW) and more recently Part 3.2 of the Legal Profession Act 2004 (NSW) control the means by which all lawyers in NSW are remunerated for their professional services. Provision 2 of Part 11 and Division 3 of Part 3.2 contains the provision in respect of cost disclosure directed to ensure that a lawyer informs the client as to the costs that will be charged and the amount or if that is not known, an estimate of the costs. The Family Law Act 1975, the Family Law Rules & Regulations prescribe a code of practice and procedure in respect of costs relating to family law proceedings.

Mr Jarvie’s submissions

Mr Jarvie informed the Court that he was not aware of his child at the time of the proceedings in the St James Local Court. The Court found that he owed unpaid child support payments. Mr Jarvie states that he approached Dimocks Family Lawyers and gave them instructions to seek a stay on the proceedings so that he could apply to have a DNA test issue performed to confirm paternity. Mr Jarvie states that he had only one encounter with this particular woman and he wanted to know if he was the father of the child requiring him to pay child support payments.
Apparently, Mr Jarvie did not attend the hearing at the St James Local Court when a stay on proceedings was obtained and the mother agreed to a DNA test. However the DNA test issue was transferred to the Federal Magistrates Court in Parramatta. Dimocks Family Lawyers provided their quote to appear for Mr Jarvie in that Court. Mr Jarvie indicated that he disagreed with their quotation and did not retain Dimocks Family Lawyers to appear for him in the DNA proceedings.
Mr Jarvie indicated that he appeared in the Federal Magistrates Court in Parramatta on his own seeking orders for the DNA test. Mr Jarvie tested positive and acknowledged that he owed the child support payments which he has subsequently paid. As a result of the proceedings in the St James Local Court, Mr Jarvie owed Dimocks Family Lawyers an amount of $4,922 which has been subsequently amended by the Trustee to include an interest and payment resulting in a debt of $4,960.
Mr Jarvie states that he has no signed agreement with Dimocks Family Lawyers for the work that they performed. However, it was his understanding that the cost for finalising the matter including the stay proceedings and the DNA test would be in the vicinity of $3,000-$3,500 to finalise the whole matter. Mr Jarvie complained that Dimocks Family Lawyers did not appear for him in respect of the DNA testing. These proceedings were moved to the Federal Magistrates Court in Parramatta in effect resulting in two matters.
Mr Jarvie states that Dimocks Family Lawyers have not supplied any documents under the subpoena issued to them on 20 June 2008. He indicated that he had appeared before the Registrar on two occasions but nothing was produced despite paying them conduct money. Mr Jarvie seeks to have the Dimocks Family Lawyers Proof of Debt reviewed by reviewing their costs item by item to determine Mr Jarvie’s obligation to pay.

Ms Jackson’s submissions

Ms Jackson submits that she relies on the affidavit of Christopher John David Dimock sworn 29 April 2008 which details the history of communications between Mr Jarvie, a third party contact point and Dimocks Family Lawyers. The uncontested affidavit evidence of Mr Christopher Dimock is as follows:
1. I am the Principal Solicitor of Dimocks Family Lawyers (“the firm”).
2. The Applicant instructed the firm to act on his behalf on 8 November 2005, during an initial conference with my then employed Solicitor, Leah Georgakis (“Ms Georgakis”). Ms Georgakis assumed carriage of the conduct of the matter until the firm ceased to act on behalf of the Applicant on 21 April 2006.
3. The Applicant instructed the firm to act on his behalf following orders made in the Local Court Proceedings No.98 of 2005 commenced by the Australia Government Solicitor, who act on behalf of the Child Support Agency, against the Applicant for unpaid child support liability. Orders were made on 25 October 2005 against the Applicant to pay arrears of child support plus interest in respect of the purported child support liability.
4. During the initial conference, the Applicant paid to the firm the sum of $1,000 being an account of future costs and disbursements. The amount was deposited into the firm’s trust account.
5. Despite our request, the Applicant would not provide the firm with any of his personal landline or mobile telephone numbers in the even the firm needed to contact him for further instructions and advice. Instead, the firm was only able to obtain the Applicant’s instructions indirectly through his former secretary, Ms Lesley Ness (“Ms Ness”). The Applicant provided the firm with Ms Ness’ email address and mobile telephone number for the purpose of communicating with her to obtain the Applicant’s instructions. The firm was only provided with the Applicant’s postal address.
6. Consequently, numerous email correspondences were exchanged between the firm and Ms Ness in relation to obtaining the Applicant’s instructions and to advise him as the matter progressed. In short, the firm would cause an email to be sent to Ms Ness seeking instructions from the Applicant. Ms Ness, in turn, would reply to the firm by way of email advising the firm of the Applicant’s instructions. On numerous occasions, the initial instructions were unsatisfactory to efficiently conduct the Applicant’s matter and therefore, the firm was required to further correspond with Ms Ness by way of email, to advise and seek the Applicant’s further instructions.
7. Annexed hereto and marked with the letter “A” is a true copy of an email sent to Ms Ness on 14 November 2005, indicating that the firm was to communicate with her with respect to obtaining the Applicant’s instructions in his family law matters.
8. On 17 November 2005, the firm caused a letter to be sent to the Applicant, which confirmed the firm’s instructions to act on his behalf. The letter enclosed recent correspondence to other parties; our initial tax invoice and costs agreement which the firm proposed to enter with the Applicant. The costs agreement set out the following information:
(a) The conditions under which the firm will provide legal services to the Applicant;
(b) An estimate of legal costs;
(c) The firms charges in respect of acting on his behalf;
(d) Payment of fees and the firm’s right to charge interest on outstanding fees;
(e) The Applicant’s right to dispute an itemised account within 28 days of receiving the account;
(f) Basis upon which the firm may cease to act;
(g) Family Court Costs notice
9. Annexed hereto and marked with the letter “B” is a true copy of our letter to the Applicant enclosing the firm’s Costs Agreement dated 17 November 2005.
10. Annexed hereto and marked with the letter “C” is a true copy of the tax invoice sent by the firm to the Applicant on 17 November 2005.
11. Annexed hereto and marked with the letter “D” is a true copy of an email sent to Ms Ness on 18 November 2005 seeking to obtain the Applicant’s further instructions to proceed with drafting the necessary documents to commence proceedings at the Local Court.
12. Annexed hereto and marked with the letter “E” is a true copy of an email received from Ms Ness on 18 November 2005 confirming the applicant’s instructions to commence Court proceedings.
13. Annexed hereto and marked with the letter “F” is a true copy of an email sent to Ms Ness on 30 November 2005, enclosing documents drafted in accordance with the applicant’s instructions. The firm also sought further instructions.
14. Annexed hereto and marked with the letter “G” is a true copy of an email sent to Ms Ness on 7 December 2005, attaching letters of correspondence to the applicant for his urgent attention.
15. On 12 December 2008 Ms Georgakis had a second conference with the applicant. During the conference, Ms Georgakis requested certain additional information before an Application to the Local Court could be filed, including a copy of the Applicant’s passport.
16. This request were confirmed in an email sent to Ms Ness on 16 December 2005. Annexed hereto and marked with the letter “H” is a true copy of an email sent to Ms Ness sent on 16 December 2005.
17. After 12 December 2005, the Applicant made no contact with the firm. We were unable to contact the Applicant, except via Ms Ness.
18. On 16 January 2006, the Applicant deposited a further sum of $1,000 into the firm’s trust account, being for legal costs.
19. Annexed hereto and marked with the letter “I” is a true copy of an email received from Ms Ness on 9 March 2006, providing the firm with the Applicant’s further instructions. The instructions were inadequate and consequently Ms Georgakis respondent to Ms Ness by email on 10 March 2006 providing advice to the Applicant and seeking his further instructions. A copy of that email sent to Ms Ness on 10 March 2006 is also annexed at “I”.
20. On 17 April 2006, the Applicant deposited a further sum of $2,500 into our trust account, being for legal costs.

Ms Jackson drew the Court’s attention to Annexure “B” in Mr Dimock’s affidavit. A cost agreement is attached as well as an acknowledgment by Mr Jarvie that the cost agreement was received by him. However, Mr Jarvie indicated that he did not agree to the contents and therefore declined to sign it. Ms Jackson noted that no communication was received from Mr Jarvie in relation to his refusal to sign the costs agreement. Further there are a number of email communications to the third party contact point, Ms Lesley Ness throughout the various annexures attached to the affidavit of Mr Dimock.
Ms Jackson also referred to Annexure “E” of the affidavit where there is an email communication attached. An email was received from Ms Ness which confirms Mr Jarvie’s instructions to “please proceed”.
On the basis of that communication a number of documents were drafted on behalf of Mr Jarvie, namely an affidavit, application in a case, an application for final orders and two affidavits. These were then forwarded to Ms Ness pursuant to the instructions given by Mr Jarvie. In that email transmission, Dimocks Family Lawyers requested that the costs agreement be signed by Mr Jarvie and returned to Dimocks.
There are a number of further email communications from Ms Georgakis of Dimocks Family Lawyers to Ms Ness in which instructions were sought by Mr Jarvie in relation to a number of matters. This included accepting service of documents from Australian Government Solicitor, instructions that Mr Jarvie had not previously given. Requests were also made for instructions in relation to finalising the documents that had been prepared on his behalf.
Ms Jackson submits that, as a result of the difficulty in obtaining documents from Mr Jarvie, Dimocks Family Lawyers later filed a Notice of Ceasing to Act. This was served on him as Dimocks Family Lawyers were unable to properly conduct litigation on his behalf. In Annexure “M” of Mr Dimocks’ affidavit is correspondence drawing Mr Jarvie’s attention to the Family Court’s brochure on costs, which was forwarded to him with the costs agreement. That costs notice sets out, pursuant to r.19 of the Family Law Rules, various remedies or rights that Mr Jarvie has in relation to the tax invoice issued by Dimocks Family Lawyers. The notice particularly included remedies or rights for disputing tax invoice or requesting an itemised account. Ms Jackson submits that Mr Jarvie did not undertake any of those options and, on that basis, Dimocks Family Lawyers rely on the proof of debt that was tendered and seeks payment of the amount of $4,922.70.

Consideration of claim against Dimocks Family Lawyers

The affidavit of Christopher Dimock at paragraph 3 sets out the details of the proceedings in which Mr Jarvie instructed them to act. The paragraph states:
3. The applicant instructed the firm to act on his behalf following orders made in the Local Court proceedings number 98 of 2005 commenced by the Australian Government Solicitor, who acted on behalf of the Child Support Agency against the applicant for unpaid child support liability. Orders were made on 25 October 2005 against the applicant to pay arrears of child support plus interest in respect of the purported child support liability.
No evidence or submissions were made in respect of the recovery of the outstanding child support but the relevant legislation would be s.79 of the Child Support (Assessment) Act 1989 which states:
Recovery of amounts of child support
An amount of child support due and payable by a liable parent to a carer entitled to child support is a debt due and payable by the liable parent to the carer, and may be sued for and recovered in:
(a) a court having jurisdiction for the recovery of debts up to the amount of the child support; or
(b) a court having jurisdiction under this Act.
Note: Amounts covered by section 30 of the Registration and Collection Act are debts due to the Commonwealth.
Dimocks Family Lawyers have treated both matters under the jurisdiction of the Family Law Act as subject to the Family Law Rules in respect to costs. These requirements are clearly set out in correspondence from Dimocks Family Lawyers to Mr Jarvie (affidavit of Christopher Dimock) (Annexure “B”) which contains an explanatory letter and a costs agreement. The explanatory letter sets out the structure of the costs in the following way:
We think that you can appreciate that at this stage it is difficult for us to provide you with meaningful estimates as to your likely costs and disbursements especially without knowing what degree of cooperation you can expect to receive from [the child’s mother].
If the matter can be resolved amicably, with a minimum of disagreement and by the making of consent orders then we expect that your fees and disbursements will be in the range of $3,000-$4,000 plus GST, and also plus out of pocket expenses (in the nature of photocopying and facsimile charges, title searches and courier fees) of approximately $100-$125 plus GST. In addition were, the note we have advised you that your costs of paternity testing are expected to be in the order of $700-$800, plus GST.
If, on the other hand, we are required to apply to the Local Court (Family Matters, for orders then potentially your fees and disbursements, relating to the proceedings in that court, could be in the range of: -
a) $6,000-$8,000 plus GST; in addition to -
b) this firm’s out of pocket expenses (in the nature of photocopying and facsimile charges, title searches, process servers and courier fees of $500-$750 plus GST); in addition to –
c) $700-$800 plus GST in respect of costs of paternity testing.
If at any time it appears to me that these estimates as to your anticipated costs and disbursements are likely to be significantly exceeded then we will of course give you revised estimates as soon as practicable.
In this matter the Australian Government Solicitor initiated proceedings in the St James Local Court which has jurisdiction to hear cases under the Family Law Act 1975, the child support legislation and the Property (Relationship) Act 1984. The Court has a wide family jurisdiction which includes parenting and child support matters. Under the terms of the Family Law Act 1975, parties may elect to transfer applications for final orders to the Family Court of Australia. Again no evidence is before the Court as to the circumstances of the transfer but the issue of establishing paternity by a DNA test was transferred to the Federal Magistrates Court, Parramatta, exercising its family law jurisdiction.
In the cost agreement the following issue is brought to Mr Jarvie’s attention:
Our charges are in excess of the scale of fees and charges set out in Chapter 19 of the Family Law Rules (2004) and Schedule 3 of the Family Law Rules (2004).
You are no doubt able to instruct the solicitor who will act for you for less than our charges and it may be in your financial interests to do so. However, if you wish us to act for you, we can only agree to act for you on the basis that we are paid our costs as set out above.
The affidavit of Christopher Dimock then contains a series of facsimile transmissions between Leah Georgakis of Dimocks and Ms Lesley Ness. The facsimile message of 18 November 2005 contains the following request:
Could you please speak with Russell and confirm that I can now proceed with the drafting of the necessary documents so as to commence proceedings before the Local Court? (Annexure “D”).
The response on the 18 November 2005 from Lesley Ness to Leah Georgakis states:
I have spoken to Russell and he says please go ahead. (Annexure “E”)
Further correspondence raises the issue concerning the difficulty in obtaining instructions from Mr Jarvie and the refusal by him to accept service of documents from the Australian Government Solicitor.
On the information placed before me I am satisfied that Dimocks Family Lawyers fully disclosed to Mr Jarvie the cost structure for representing him in the Local Court (Family Matters). The letter disclosed that the firm charged a higher rate than the standard fee and that there may be other firms of solicitors willing to undertake the litigation at a lesser rate. The final amount charged is within the estimated fees provided in the introductory letter of 17 November 2005 and also within the cost structure set out in the Costs Agreement of the same date.
The legislative regime for a cost agreement is that it consists of a written offer that is either accepted in writing or by other conduct. The offer must clearly state that it is an offer regarding a cost agreement that the client may accept in writing or by other conduct. The final paragraph of the cost agreement states:
If you wish us to act for you, please sign the duplicate copy of this letter and return it to us. By doing so, it will give us the instructions which we require to properly attend to your matter, and will confirm your agreement to, and understanding of, the matter set out in this letter. (Affidavit of Christopher Dimock, Annexure “B”)
The duplicate copy was not signed and returned despite a number of requests being forwarded by Leah Georgakis of Dimocks Family Lawyers via Ms Ness.
The instruction to proceed (see [59] above) is the conduct that constituted acceptance. An agreement that may be accepted by conduct other than writing dictates that it is not essential that each party signs for it to be effective. In this case it is a facsimile transmission forwarded by Ms Ness. In the circumstances I am satisfied that Mr Jarvie has in fact agreed to the contents of the cost agreement evidenced by the facsimile transmission. Furthermore, Mr Jarvie is estopped from his claim that Dimocks Family Lawyers proceeded without his instructions.
The cost agreement from Dimocks contains a section headed “Disputes about costs” which states:
Our accounts will contain a summary of work covered by each account. If you wish to request an itemised costs account you may do so. The family law rules (2004) stipulate that you must request an itemised costs account no less than 28 days after service by us upon you of a costs account.
If you wish to dispute any itemised costs account received by you must within 28 days after the service on you of an itemised costs account, file and serve upon us a notice disputing that account. This notice, which is called a “Notice Disputing Itemised Costs Account”, is form 15 of the Family Law Rules (2000) and is available from the Family Court Registry.
If you do not dispute any costs account within the 28 days time limit, then you will lose your right to challenge the costs account unless you obtain an order from the Family Court extending that time period. (Affidavit of Christopher Dimock, Annexure “B” – Costs Agreement page 4)
There has been no evidence placed before the Court by Mr Jarvie who indicated that he pursued this above option available to him. I further note that the oral submission made during the hearing indicates that the outstanding child support payments and the issue of paternity were split into two distinct matters. However, I also note from the letter from Dimocks Family Lawyers to Mr Jarvie dated 17 November 2000 headed “Cost agreement” that Dimocks Family Lawyers had carried out a preliminary inquiry which included DNA testing and oral instructions to commence proceedings before the Local Court. Consequently, it is not appropriate to suggest that the costs rendered by Dimocks Family Lawyers were isolated from the proceedings in the Local Court. The proceedings concerning the DNA testing were ultimately pursued by Mr Jarvie in the Federal Magistrates Court at Parramatta. However preliminary steps in respect to establishing paternity have been taken by Dimocks Family Lawyers under instructions which they are entitled to be reimbursed.
On the material before the Court I am not satisfied that the claim brought by Mr Jarvie against Dimocks Family Lawyers that the Proof of Debt presented by that firm should be subjected to a dispute resolution at this late stage. Mr Jarvie was aware of an appropriate mechanism for obtaining an itemised account and the method for seeking a formal review under the Family Court Rules. However these options were not pursued. It is not appropriate at this late date to pursue this avenue of review.

I certify that the preceding sixty-six (66) paragraphs are a true copy of the reasons for judgment of Lloyd-Jones FM

Associate:

Date: 7 November 2008