Lewis Blyth and Hooper v Dennis
[2007] WASC 177
•3 AUGUST 2007
LEWIS BLYTH AND HOOPER -v- DENNIS [2007] WASC 177
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WASC 177 | |
| Case No: | LPA:49/2006 | 13 JULY 2007 | |
| Coram: | NEWNES J | 3/08/07 | |
| 17 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed Application for extension of time dismissed | ||
| B | |||
| PDF Version |
| Parties: | LEWIS BLYTH AND HOOPER JOHN RAYMOND DENNIS |
Catchwords: | Costs Appeal against grant of extension of time to tax solicitors' bills of costs Extent of delay in seeking taxation of costs Whether prejudice to solicitors by delay Whether solicitors' retainer was entire contract Consideration of application of doctrine of entire contract to solicitors' retainer to conduct litigation Effect of costs agreement |
Legislation: | Legal Practice Act 2003 (WA), s 229, s 231 |
Case References: | Baltic Shipping Co v Dillon (1993) 176 CLR 344 Cachia v Isaacs (1985) 3 NSWLR 366 Clairs Keeley (A Firm) v Treacy [2005] WASCA 86 Cresswell v Byron (1807) 14 Ves 271 Del Borrello v Friedman and Lurie (A Firm) [2001] WASCA 348 Harris v Osbourn (1834) 2 Cr & M 629; 149 ER 912 Monopak Pty Ltd v Maxim Litigation Consultants [2007] WASC 112 Re Hall & Barker (1878) 9 Ch D 538 Re Romer & Haslam [1893] 2 QB 286 Retail Equity Pty Ltd v Murie and Edward, unreported; SCt of WA (White J); Library No 940163; 31 March 1994 Underwood Son & Piper v Lewis [1894] 2 QB 306 Webb v Bateman, unreported; SCt of WA; Library No 6305; 27 May 1986 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- CHAMBERS
- Appellant (Practitioner)
AND
JOHN RAYMOND DENNIS
Respondent (Party Charged)
Catchwords:
Costs - Appeal against grant of extension of time to tax solicitors' bills of costs - Extent of delay in seeking taxation of costs - Whether prejudice to solicitors by delay - Whether solicitors' retainer was entire contract - Consideration of application of doctrine of entire contract to solicitors' retainer to conduct litigation - Effect of costs agreement
Legislation:
Legal Practice Act 2003 (WA), s 229, s 231
Result:
Appeal allowed
Application for extension of time dismissed
(Page 2)
Category: B
Representation:
Counsel:
Appellant (Practitioner) : Mr D J Garnsworthy
Respondent (Party Charged) : Mr S V Forbes
Solicitors:
Appellant (Practitioner) : Lewis Blyth & Hooper
Respondent (Party Charged) : Stewart Forbes
Case(s) referred to in judgment(s):
Baltic Shipping Co v Dillon (1993) 176 CLR 344
Cachia v Isaacs (1985) 3 NSWLR 366
Clairs Keeley (A Firm) v Treacy [2005] WASCA 86
Cresswell v Byron (1807) 14 Ves 271
Del Borrello v Friedman and Lurie (A Firm) [2001] WASCA 348
Harris v Osbourn (1834) 2 Cr & M 629; 149 ER 912
Monopak Pty Ltd v Maxim Litigation Consultants [2007] WASC 112
Re Hall & Barker (1878) 9 Ch D 538
Re Romer & Haslam [1893] 2 QB 286
Retail Equity Pty Ltd v Murie and Edward, unreported; SCt of WA (White J); Library No 940163; 31 March 1994
Underwood Son & Piper v Lewis [1894] 2 QB 306
Webb v Bateman, unreported; SCt of WA; Library No 6305; 27 May 1986
(Page 3)
1 NEWNES J: This is an appeal against the decision of a taxing officer under s 229 of the Legal Practice Act 2003 (WA) (the "Act") enlarging the time within which the respondent (client) may require the appellant (solicitors) to itemise its bill of costs and for the bill of costs to be taxed.
The background
2 The respondent was the defendant in proceedings in the District Court in which, until about September or October 2001, he was represented by other solicitors. The respondent says by that stage the proceedings had progressed to the point that the pleadings were closed, the matter had been entered for trial and a pre-trial conference had been scheduled.
3 In September or October 2001 the respondent instructed the appellant to act on his behalf in the proceedings. Mr Blyth, a partner in the appellant, undertook the conduct of the matter. The appellant was retained until 3 April 2006, following which the respondent engaged other solicitors. As at 3 April 2006, the District Court action had been listed for the trial of a preliminary issue on 11 April 2006.
4 Although the respondent says he does not recall doing so, it was not in issue that he signed a costs agreement with the appellant. The costs agreement is dated 2 October 2001. The legal services covered by the costs agreement are the defence of the District Court action and advice as to the lease of a farming property.
5 By the costs agreement, it was agreed that the appellant could charge by reference to hourly rates, the partner rate being an amount of $220 an hour, the senior lawyer rate being $170 an hour, the junior lawyer rate being $130 an hour, the articled law clerk rate being $100 an hour and a clerk being chargeable at $80 an hour. It was agreed that those rates could be varied "on notice". The respondent agreed to pay a sum of $1500 in advance on account of legal costs.
6 Relevantly for present purposes, the costs agreement included the following terms:
"3 Payment
You must pay for the Lawyer's services in accordance with invoices sent by the Lawyer even though all of the legal services referred to in Part 2 of the Schedule have not been performed.
(Page 4)
- …
6 Non-Payment
If you do not pay an invoice sent by the Lawyer or comply with a request for payment in advance within 14 days after the invoice is sent or the request is made, the Lawyer may immediately stop acting for you. If litigation has begun, the Lawyer may inform the Court that he or she is no longer representing you."
7 It is necessary, as something was sought to be made of it by the respondent's counsel, to comment briefly on the nature of the proceedings in the District Court.
8 Put very generally, the action involved agreements made between the plaintiffs and the defendant in relation to the storage, and the preparation for racing and the mechanical servicing, of a number of racing cars between July 1999 and March 2000. The plaintiffs claimed an amount of some $250,000, among other things, for storage charges and for mechanical work done and parts provided to the defendant. The specific items of work carried out by the plaintiffs, the quality of that work, and the amounts charged for numerous items of it, were disputed by the defendant. The defendant denied the plaintiffs' claim and counter-claimed an amount in the order of $150,000 to $175,000, alleging that the first and second plaintiffs had wrongfully retained two racing cars and various tools and automotive parts belonging to the defendant.
9 It appears that the writ of summons was issued on 27 June 2000. The statement of claim was filed on 18 July 2000 and a defence and counterclaim on 11 August 2000. A reply was apparently filed on 14 September 2000. Further and better particulars of the statement of claim were sought and provided, as were further and better particulars of the defence. There was then, in June 2001, a proposed amended defence and counterclaim filed.
10 The appellant filed a notice of change of solicitors on 9 October 2001. According to the index to the file at the District Court (a copy of which was put into evidence), that was the twenty-first document filed in the proceedings. Thereafter, up to the point at which the appellant ceased to act for the respondent, a further 110 documents were filed.
11 It appears that while the appellant was acting for the respondent a number of amendments were made to the pleadings and a variety of other
(Page 5)
- applications to the Court were made. It also appears that substantial efforts were made to prepare the case for trial. During that time the respondent also commenced proceedings in the Supreme Court for contempt of court against the solicitor for the plaintiffs in the District Court action and the plaintiffs themselves. The appellant acted for the respondent in the contempt proceedings, which were eventually settled at mediation.
12 A copy of the substituted Papers for the Judge in the District Court action, filed in December 2003, were put in evidence on this application. The pleadings and particulars ran to 81 pages. There were, in addition, Scott schedules which ran to 40 pages. The plaintiffs' claim of some $250,000 was particularised in 10 schedules to the statement of claim. The schedules occupied 15 pages and contained numerous items in respect of which claims were made. The respondent's counterclaim of some $150,000 to $175,000 also comprised a large number of discrete items.
13 It is not possible, and it is unnecessary for present purposes, to comment on the manner in which the litigation was conducted, although I would note in passing that it was obviously litigation which, from the material before me, involved an enormous amount of detail and was hard fought.
14 In the period from November 2001 to 7 March 2006 the appellant's time costs were in the sum of $125,435.92 (plus GST) and there were disbursements of $30,467.16 (plus GST). There is currently owing to the appellant an amount of approximately $20,000 and that amount has been owing since March 2006. Some 36 invoices were produced by the appellant over the period of its retainer, totalling $171,492.24 (including GST). It was common ground that at least seven of those invoices, in the total sum of some $11,500, were not received by the respondent, three of those invoices being for counsel fees and the other four for other disbursements. The last invoice rendered by the appellant to the respondent was dated 7 March 2006.
15 It appears that after the appellant ceased to act for the respondent there was a short hiatus before the respondent engaged other legal representation. By letter dated 13 April 2006 his new solicitors sought an itemised account from the appellant. A further request was made on 4 July 2006. On 18 August 2006, the respondent's current solicitors pressed for an itemised account and referred to the taxation of the
(Page 6)
- appellant's costs. The application for an enlargement of time for the taxation of those costs was filed on 6 September 2006.
The application for an enlargement of time
16 The application for an enlargement of time was heard by a taxing officer on 14 February 2007 and written reasons for decision were delivered on 16 April 2007.
17 The learned taxing officer granted the application. He concluded that the agreement between the appellant and the respondent for the provision of legal services by the appellant was an entire contract, so that the time within which the respondent was entitled to request an itemised account, and then taxation of that account, ran from the appellant's final account of 7 March 2006. As the application for an enlargement of time was filed on 6 September 2006, there was, at most, a delay of five months and, having regard to the request for itemised accounts in the letters of 13 April and 4 July 2006, the delay might be regarded as substantially less than that.
18 It was against that background that the learned taxing officer turned to the principles to be applied on an application for an enlargement of time, which he took as those set out in Webb v Bateman, unreported; SCt of WA; Library No 6305; 27 May 1986 and Retail Equity Pty Ltd v Murie and Edward, unreported; SCt of WA (White J); Library No 940163; 31 March 1994.
19 The learned taxing officer considered that the evidence suggested the possibility that excessive charges have been made by the appellant. He also considered that, in the absence of prejudice, a practitioner should always be seen as willing to subject his accounts to taxation when requested to do so out of time and that in all but the most unusual circumstances a practitioner ought always to provide an itemised account when requested to do so.
20 On the question of delay, the learned taxing officer, having noted that the delay was of no more than five months and possibly only a few weeks, referred to the reasons for the delay given by the respondent - namely, that the respondent trusted Mr Blyth implicitly in view of their long-standing personal relationship, that the respondent did not realise there was a time limit for taxation, and that he believed that any necessary adjustment of fees could be carried out when the court proceedings were over - and said (at [61]):
(Page 7)
- "Whilst the reasons for delay advanced by the [respondent] are not particularly profound they are in my view acceptably plausible in the overall circumstances revealed by the affidavits and sufficient to meet the relevant criterion. My conclusion is reinforced having regard to:
(a) the relatively short period of delay (if there is any delay);
(b) the other considerations weighing in favour of the [respondent] which I have already outlined; and
(c) the fact that any failure to adequately explain the delay is not fatal of itself to the application of the [respondent]."
21 The learned taxing officer considered there was possible injustice to the respondent by depriving him of the opportunity to have the appellant's costs scrutinised in circumstances where the evidence suggested that it was possible they were excessive.
22 The learned taxing officer did not accept that there was any real prejudice to the appellant. In respect of the appellant's contention that taxation of its costs may require the adjustment of GST payments made over a period of some five years, the learned taxing officer said that taxation of the bills was not necessarily the outcome of the application and, if it was, that result would only come about if the bills were reduced or altered in some way in the taxation process.
23 Nor did the learned taxing officer consider that there was any weight in the complaint that the payments made by the respondent in respect of the appellant's costs had been distributed as earnings within the appellant firm and utilised to pay operating and other expenses of the firm for the past four or five years, and that any adjustment to those costs as a result of taxation would require adjustment to the personal taxation returns of the partners of the firm. The learned taxing officer said that whilst obvious inconvenience, time, effort and cost might be involved if an enlargement of time led ultimately to a change in the amount to which the appellant was entitled, that did not amount to real prejudice. Those consequences were inherent in any application of this kind and could not be regarded as a legitimate cause to deny an otherwise proper request for an enlargement of time.
24 The learned taxing officer also rejected the proposition that a factor weighing against the respondent was that he was legally represented in the period after the appellant ceased to act for him and before the current
(Page 8)
- application was made. The learned taxing officer concluded that the circumstances and attendant difficulty surrounding the change in representation were adequately explained and of a relatively brief nature.
25 The learned taxing officer ordered that the "time for the [respondent] to require the [appellant] to provide itemised accounts and/or taxation of costs, the subject matter of the Application, be enlarged to 7 May 2007."
The appellant's submissions
26 On the appeal, the appellant's principal attack was on the finding of the learned taxing officer that there had not been substantial delay by the respondent because the time within which the respondent might require the provision of an itemised account or taxation of costs ran from the date of the last invoice rendered by the appellant.
27 Counsel for the appellant submitted that it was clear from the costs agreement that the doctrine of "entire contract" was rebutted and that the time within which the respondent was entitled to require an itemised account, or taxation of an account, ran from the date of each of the invoices rendered by the appellant to the respondent. That was consistent with the endorsement on each invoice rendered by the appellant of the notice required by s 231(1) of the Act.
28 It was submitted that having incorrectly concluded that the time ran, not from the date of each invoice but from the date of the last invoice, the learned taxing officer had failed to give appropriate weight to the delay by the respondent and to the reasons given for that delay.
The respondent's submissions
29 It was argued on behalf of the respondent that there was no provision of the costs agreement which displaced the general rule that only a final bill will start time running against the client in respect of a request for itemisation or taxation of an account. The various invoices were not final bills but intermediate bills, or parts of a running account.
30 Counsel for the respondent also argued that there was sufficient evidence to suggest that the appellant's bills were excessive, including by the charging by six-minute units and at an hourly rate in excess of that provided for in the costs agreement. It was also submitted the mere fact that an amount of $171,000 had been billed in a matter which had already reached the stage of a pre-trial conference when the appellant assumed the conduct of it and was in fact not taken to trial by the appellant, was a clear indication of the excessive nature of the charges.
(Page 9)
31 Counsel submitted that the delay in requesting taxation had been adequately explained, the respondent having trusted the practitioner concerned in the light of a long-standing relationship between them and in circumstances where the respondent did not realise there was a time limit within which to request taxation. The respondent was not a commercially sophisticated person, but a butcher.
32 It was argued that the contempt proceedings brought in the Supreme Court fell outside the terms of the costs agreement and, whatever might be the position in relation to the District Court proceedings, the contempt proceedings were a separate and entire contract for which the appellant was not entitled to charge until the retainer had been completed. I should interpose that it appears from the correspondence in evidence that the contempt proceedings were settled by mediation in about March 2006.
33 Counsel submitted that if the respondent's application was not successful the respondent would not be able to obtain itemisation of the appellant's accounts or to tax the bills, in circumstances where there was a strong prima facie case that the bills were excessive and where there was no genuine prejudice to the appellant except that which was inherent in any application for an enlargement of time.
Should the decision of the taxing officer be set aside?
34 A threshold issue was raised by counsel for the respondent as to whether the appeal was by way of rehearing or a hearing de novo. I concluded in Monopak Pty Ltd v Maxim Litigation Consultants [2007] WASC 112 that an appeal of this kind was by way of a hearing de novo. I remain of that view.
35 It is convenient to turn first to the issue of delay by the respondent in seeking an itemisation of the appellant's bills and the taxation of its costs. As I have mentioned, that turned essentially on the question of whether or not the appellant's retainer was an entire contract.
36 In Baltic Shipping Co v Dillon (1993) 176 CLR 344, an entire contract was described by Mason CJ as follows:
"An entire contract or, perhaps more accurately, an entire obligation is one in which the consideration for the payment of money or for the rendering of some other counter-performance is entire and indivisible ... The concept of an entire contract is material when a court is called upon to decide whether complete performance by one party is a condition precedent to the other's
(Page 10)
- liability to pay the stipulated price or to render an agreed counter-performance."
37 The rule that the contract of a solicitor retained to conduct a common law action is an entire one is one of considerable antiquity. Its origins are commonly traced back to Cresswell v Byron (1807) 14 Ves 271, and to Harris v Osbourn (1834) 2 Cr & M 629; 149 ER 912.
38 In the Chancery Division, however, the notion that a solicitor's retainer was an entire contract did not find favour. In Re Hall & Barker (1878) 9 Ch D 538, Jessel MR (at 543, 545) roundly rejected it:
"Of course, if it is the law, I am bound by it, but I say most emphatically, unless it be the law, I will not endeavour to make it so, because I cannot imagine a state of law more injurious. The theory would be, that a solicitor, having undertaken to dispose of any matter of business, however complicated, for however many years it may possibly last, would not be entitled to get one single penny of profit from the client until that business was finally disposed of. It does not commend itself as a doctrine which would appear to me to be reasonable.
…
If a man engages to carry a box of cigars from London to Birmingham, it is an entire contract, he cannot throw the cigars out of the carriage half way there, and ask for half the money; or if a shoemaker agrees to make a pair of shoes, he cannot offer you one shoe and ask you to pay one half the price. That is intelligible. In my opinion, in the case of a solicitor there is not an implied contract of that kind. It bears no fair relation to the doctrine of entire contract."
39 Jessel MR acknowledged that it had been decided at common law that a solicitor's retainer to bring an action was a retainer to do one single thing, to bring the action to an end. He observed that actions at common law had not in the past occupied a very long time and were comparatively simple matters. Jessel MR declined to apply the principle of entire contract to the suit in equity before him, which was complicated and lengthy, concluding that it would be unreasonable to find that the solicitor had entered into such a contract.
(Page 11)
40 The Master of the Rolls went on to say that, in any event, where there were natural breaks in the proceedings the solicitor was entitled to bill the client for the work carried out to that point and to be paid for it.
41 In Re Romer & Haslam [1893] 2 QB 286, the solicitors had sent four bills to their client over the course of lengthy arbitration proceedings. Statements of account were sent with the second and subsequent bills showing the balance carried forward from the preceding bill and payments by the client being credited to them. The solicitors did not seek payment of the bills but treated the payments as being on account. The client sought to have the total costs taxed, arguing there was one continuous bill. The solicitors argued that the bills were each separate final bills and the client was out of time.
42 Lord Esher MR held that where a solicitor is retained to conduct litigation, other than an ordinary action at common law, which may extend over a considerable period of time and in which breaks may occur of such a kind as to be equivalent to the conclusion of a definite and distinct part of the proceedings, he may deliver to his client a bill of costs for business done up to the occurrence of any such breaks in the litigation, and demand payment.
43 The Master of the Rolls said it was a question of fact whether, in the case of a series of bills, each bill is sent as a final bill or whether they are mere statements of account showing how far the expenses have gone up to the time they are sent. His Lordship concluded that, on the facts, both sides had treated the bills as being the latter so there was only one bill and the taxation was not out of time.
44 The other members of the Court agreed with Lord Esher MR. Bowen LJ drew a distinction between a common law action and the protracted arbitration that had taken place in that case, concluding that in the latter there may be natural breaks at which the solicitor is entitled to render a final bill for the work to that point.
45 Kay LJ, having stated that a solicitor's retainer in a civil action, whether at common law or in equity, was prima facie an entire contract, said that in complicated litigation which may last a considerable time the rule must be applied differently, and there the solicitor may send a bill at a reasonable break in the proceedings and demand payment of it.
46 In Underwood Son & Piper v Lewis [1894] 2 QB 306, the Court of Appeal affirmed the rule that a contract between a client and a solicitor who accepts a retainer in a common law action is, in the absence of
(Page 12)
- agreement to the contrary, an entire contract to conduct the case of the client until the action is finished. Lord Esher MR said (at 309 - 310):
"When one considers the nature of a common law action, it seems obvious that the law must imply that the contract of the solicitor upon a retainer in the action is an entire contract to conduct the action to the end. When a man goes to a solicitor and instructs him for the purpose of bringing or defending such an action, he does not mean to employ the solicitor to take one step, and then give him fresh instructions to take another step, and so on; he instructs the solicitor as a skilled person to act for him in the action, to take all the necessary steps in it, and to carry it on to the end. If the meaning of the retainer is that the solicitor is to carry on the action to the end, it necessarily follows that the contract of the solicitor is an entire contract - that is, a contract to take all the steps which are necessary to bring the action to a conclusion. When it is shewn that there were no special terms, but only the ordinary retainer for the purposes of the action, the implication I have mentioned is that which every reasonable person would make, and therefore the implication which the law makes in such a case."
48 The other members of the Court of Appeal reached the same conclusion. AL Smith LJ held that prima facie the contract of a solicitor who accepts a retainer in a common law action is an entire contract and distinguished Re Hall & Barker on the same basis. Davey LJ agreed with Lord Esher MR and AL Smith LJ.
49 In Cachia v Isaacs (1985) 3 NSWLR 366 at 377 - 378, Hope JA (with whom Kirby P agreed) said that the common law rule referred to in Underwood Son & Piper v Lewis is only a prima facie rule and is subject to numerous qualifications. His Honour said:
(Page 13)
- "The decisions as to what are or are not entire contracts of retainer, and in what circumstances they may be terminated, involve no more than the application to solicitor-client contracts of principles generally applicable to contracts, except to the extent that questions of public policy intrude. Whether a contract in respect of the conduct of proceedings at common law (or in any jurisdiction) is an entire contract must be determined by reference to the circumstances of the particular case, as must the question of what terms are to be implied as to the right of the solicitor or the client to terminate the retainer upon due notice or otherwise."
50 In Del Borrello v Friedman and Lurie (A Firm) [2001] WASCA 348, Kennedy J (at [67] - [68]) observed that the general rule that a retainer in respect of litigation is an entire contract may be overstating the position. Kennedy J referred to Cordery, "Law Relating to Solicitors" 8th ed, 1988, at 71, where the learned authors say the general rule appears to have originated in the common law courts when the cost of litigation was low and actions were speedily disposed of.
51 In Clairs Keeley (A Firm) v Treacy [2005] WASCA 86, the Court of Appeal (at [41]) said the proposition that a solicitor's retainer is an entire contract is not supported by modern authority in this State, referring to Del Borrello v Friedman and Lurie.
52 It is obvious that litigation has undergone very great changes since 1894, and particularly in the last 30 or 40 years or so with the enactment of a plethora of new or expanded rights of action and remedies, and substantial developments in the common law and in equity. All that, together with rapid advances in technology and fundamental changes in the nature of commercial life (including seemingly exponential increases in the amount of documents generated), has inevitably changed the face of litigation. Contested litigation nowadays is more often than not protracted and all too rarely simple. It is a very long way indeed from common law litigation of the nineteenth century.
53 It is then, I think, fair to say that there is now very limited scope for what Lord Esher MR referred to in Underwood Son & Piper v Lewis as the obvious implication of the entire contract rule in the retainer of a solicitor to conduct litigation. It seems to me that the nature of litigation has so changed that as a statement of general principle that is no longer apt. I would, with respect, adopt what was said by Hope JA in Cachia v Isaacs as being the proper approach.
(Page 14)
54 In my view, in order to determine whether the agreement between the appellant and the respondent was an entire contract it is necessary then to apply the principles generally applicable to contracts. When that is done I consider it is plain that it was not an entire contract. That is evident from the express terms of the retainer agreement. Clause 3 of the terms and conditions of the retainer agreement required the respondent to pay the appellant in accordance with invoices sent by the appellant "even though all of the legal services referred to in [the retainer agreement] have not been performed". Clause 6 provided that if the respondent did not pay an invoice within 14 days, the appellant was entitled immediately to stop acting for him.
55 I do not consider that the invoices were "part of a running account with one bill for the client to tax at the end of the relationship", as was found by the learned taxing officer. That is not, in my view, what was contemplated by the retainer agreement. The retainer agreement entitled the appellant to charge from time to time for the work done to that date and provided that the respondent must pay for that work within 14 days of an invoice for it being rendered. That is, it provided for separate and distinct bills, each bill creating a separate and final liability of the respondent for the work to which it related. I note in passing that the invoices in question made no reference to any running total but were for separate and distinct amounts, and each was endorsed with the notation required by s 231 of the Act.
56 I therefore consider, with respect, that the learned taxing officer was wrong in concluding that the appellant's retainer was an entire contract and that what had occurred was simply "normal intermediate billing as parts of a running account with one bill for the client to tax at the end of the relationship". I also do not agree that cl 3 of the retainer agreement "does no more than permit interim billing in an ongoing retainer necessary to keep the practitioner in funds".
57 In my view, therefore, the time within which the respondent was entitled to require provision of an itemised bill of costs or to require taxation of it ran from the time each invoice was rendered to the respondent.
58 It follows that there was very substantial delay by the respondent in the application for an enlargement of time in respect of most of the invoices rendered by the appellant. Prior to the invoice of 7 March 2006, it appears the last invoice rendered by the appellant was dated 31 October 2005. Most of the invoices were rendered between November 2001 and
(Page 15)
- November 2004. Some $116,000 of the total amount charged by the appellant was contained in invoices rendered in that period. Between March 2005 and October 2005 the appellant rendered further invoices totalling some $45,000. The balance of some $10,000 was rendered in March 2006. As I mentioned earlier, the first request for an itemised account was made on 13 April 2006 and the application for an extension of time was made on 6 September 2006.
59 The respondent's explanation for the delay is, in my view, far from satisfactory. In his original affidavit, the respondent said that he had trusted Mr Blyth of the appellant as a consequence of their long association. The respondent said he had known Mr Blyth since they were at primary school together. Mr Blyth, in his responsive affidavit, pointed out that the respondent, who was then 55 years of age, is some eight years older and although they had attended the same primary school, there was no association of the sort implied by the respondent. Mr Blyth says he met the respondent after the establishment of the appellant firm in 1985 and has known him in a professional capacity.
60 In a replying affidavit, the respondent sought to explain that away by a vague reference to periodically hitting a tennis ball with Mr Blyth at a tennis club opposite the primary school and the fact that their mothers knew each other well as both their mothers were on the tennis club committee.
61 The respondent says although he was concerned about the level of fees being charged, he did not request taxation of the costs during the retainer because, apart from his implicit trust of Mr Blyth from their long-standing friendship, he did not realise there was a time limit within which to do so and believed that if any adjustments were required they could be carried out at the end of the District Court proceedings.
62 No basis for the last belief was proffered and the suggestion that the respondent did not realise there was a time limit to request taxation of the costs flies in the face of the express endorsement on each invoice sent to him. It was suggested in the course of argument that account had to be taken of the fact that the respondent was not a sophisticated businessman but a butcher. The fact that the respondent is a butcher does not explain how, over a period of more than four years, he remained unaware of the time limit despite having received almost 30 separate invoices on which the time limit was endorsed.
(Page 16)
63 On the evidence, the respondent at no stage during the course of the appellant's retainer complained about the amount or reasonableness of the invoices and until very shortly before the termination of the appellant's retainer the invoices were paid, albeit not always promptly, without query or complaint.
64 I accept there is evidence which suggests the possibility that the amounts charged by the appellant were in excess of those permitted under the costs agreement, particularly in respect of hourly rates. The extent to which the amounts charged might be in excess of those provided for under the costs agreement was not at all clear as the invoices were not in a form which enabled that to be assessed with any degree of confidence. There was also no distinction in the accounts between the costs of the District Court litigation (to which the costs agreement applied) and the contempt proceedings in this Court (to which, the respondent argued, it did not). In fact, as counsel for the respondent accepted, because the hourly rates provided for in the costs agreement were below those in the prevailing costs determination, the appellant would have been entitled to charge at higher hourly rates in respect of the contempt proceedings if the costs agreement did not apply.
65 The fact that there is evidence which suggests the possibility that the appellant's charges were excessive is an important factor to be weighed in the balance, but it is by no means decisive.
66 One of the other factors, as the learned taxing officer recognised, is the question of prejudice to the appellant if the time were to be enlarged. It is apparent, however, that the learned taxing officer considered that, despite the delay, there would be no real prejudice to the appellant. In my view, with respect, the learned taxing officer was in error in his approach to that issue.
67 The Act specifically imposes time limits, and relatively short time limits, to ensure that if itemisation of a bill or the taxation of costs is to be called for by the client, it is called for promptly. The time limits are intended to be adhered to. Once the statutory period has passed, a practitioner is entitled to assume that in the ordinary course there will be no requirement to itemise or tax a bill of costs, and no doubt practitioners, quite reasonably, arrange their affairs on that assumption once the time within which taxation may be required has passed, and certainly once it is well past and when the invoices have been paid without complaint as to their reasonableness.
(Page 17)
68 There is, moreover, prejudice inherent simply in delay. Delay of three to four years or more, as is the case in respect of some of the present invoices, is very substantial delay indeed and it is inevitable that a practitioner required to go back and itemise and tax bills of costs in respect of invoices rendered so long ago will be put to inconvenience and cost that adherence to the time limits contained in the Act would have avoided.
Conclusion
69 There has been very substantial delay by the respondent in seeking to have the appellant's costs itemised or taxed. Making all due allowances for the respondent's apparent lack of experience in litigation, the explanation for the delay is far from satisfactory. While there is some evidence which suggests that the costs might be excessive, that must be weighed against requiring the appellant now to go back and itemise and tax bills of costs which were rendered and paid over the previous four and a half years or more.
70 Having regard to all of the circumstances, I do not consider that it is in the interests of justice that the time limit should be extended. I would set aside the decision of the learned taxing officer and order that the application for an enlargement of time be dismissed.
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