Milward and Mr B Trading As C Lawyers
[2019] FamCA 850
•18 November 2019
FAMILY COURT OF AUSTRALIA
| MILWARD & MR B TRADING AS C LAWYERS | [2019] FamCA 850 |
| FAMILY LAW – COSTS – Review of Registrar’s Decision – Where the applicant filed an application to set aside a costs agreement between herself and her former lawyers –Where this was rejected as proceedings had commenced in State Courts – Where it is not necessary for the Family Court to intervene in that process – Application dismissed. |
| Family Law Act 1975 (Cth) Family Law Rules 1984 Ch 19. Legal Profession Uniform Law 2014 (NSW) ss 178, 185. |
| Johnston v LDA Legal Pty Ltd [2019] VSC 462 |
| APPLICANT: | Ms Milward |
| RESPONDENT: | Mr B Trading as C Lawyers |
| FILE NUMBER: | SYC | 4543 | of | 2017 |
| DATE DELIVERED: | 18 November 2019 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Rees J |
| IN CHAMBERS: | 18 November 2019 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Holmes Donnelly & Co Solicitors |
| SOLICITOR FOR THE RESPONDENT: | C Lawyers |
Orders
IT IS ORDERED
That the application filed 16 October 2019 to review a decision of a registrar be dismissed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Milward & Mr B trading as C Lawyers has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 4543 of 2017
| Ms Milward |
Applicant
And
| Mr B Trading as C Lawyers |
Respondent
REASONS FOR JUDGMENT
This is an application to review the registrar’s refusal to file an application.
The applicant, Ms Milward, is the wife in proceedings under the Family Law Act 1975 (Cth) (“the Act”) relating to parenting. Those proceedings are ongoing.
The prospective respondent is the applicant’s former solicitors (“the solicitors”).
The application, which was rejected for filing on 11 October 2019, seeks, relevantly to this determination, to set aside the costs agreement between the applicant and her former solicitors; restrain the former solicitors from charging any fees to the applicant other than work reasonably done and at no other rate than the scale; cause the former solicitors to deliver their file to her new solicitors and costs against the former solicitors in relation to the application.
The registrar refused to accept the application for filing because proceedings in relation to the applicant’s costs charged by her former solicitors are already on foot in the Supreme Court of New South Wales (“the Supreme Court”) and the District Court of New South Wales (“the District Court”).
On 21 October 2019 I directed that each party file written submissions in relation to the issue of the jurisdiction of the Family Court of Australia (“the Family Court”) to hear and determine the original, rejected application. Both parties have filed submissions. It has been agreed that the matter will be determined in Chambers without oral submissions.
The applicant, in her affidavit sworn 10 October 2019, gave the following history:
· The applicant executed a retainer agreement with the solicitors on 15 August 2017. Although, it is not specifically stated, I infer that the terms of the agreement were that the solicitors would charge at a rate higher than the scale set by the Family Law Rules.
· The applicant was charged costs which were, in total, more than she was led to expect.
· On 16 May 2019 the applicant was served with a Statement of Claim filed by the solicitors in the District Court seeking payment of their costs.
· On 11 June 2019 the applicant lodged an assessment of costs in the Supreme Court.
· On 14 June 2019 the applicant filed a Notice of Motion in the District Court seeking to stay the solicitor’s proceedings until costs were assessed.
· On 19 June 2019 the District Court stayed its proceedings until 28 June 2019.
· On 27 June 2019 the District Court proceedings were further stayed until 6 December 2019.
· On 16 July 2019 an assessor was appointed by the Supreme Court.
· The solicitors have filed written submissions in the costs assessment.
· The applicant has filed written submissions in the costs assessment.
· The assessment has not yet been published.
On behalf of the applicant, it is submitted that the applicable provisions of the Legal Profession Uniform Law 2014 (NSW) (“the Uniform Law”) do not permit the applicant to challenge and seek to set aside the retainer agreement and that the only place where the applicant can challenge the agreement is in the Family Court. They note that the Uniform Law provides for legal costs to be fair and reasonable, and any dispute of costs is to be referred to the Supreme Court for an assessment.
However, the applicant submits that if a party disputes their costs in the Supreme Court, the process outlined by the Uniform Law relates only to the quantum of legal fees charged, and not the terms and execution of the retainer itself.
The solicitors submit that the Family Court has no jurisdiction and that the Supreme Court is the appropriate Court to challenge the agreement. They submit that the applicant should file an application in the Supreme Court seeking a declaration pursuant to the provisions of the Uniform Law seeking a declaration that the agreement is void for contravention of that legislation.
The act establishes a number of grounds in which a costs agreement may be deemed void. Section 178 of the Act states the following
(1) If a law practice contravenes the disclosure obligations of this Part—
(a) the costs agreement concerned (if any) is void; and
(b) the client or an associated third party payer is not required to pay the legal costs until they have been assessed or any costs dispute has been determined by the designated local regulatory authority; and
(c) the law practice must not commence or maintain proceedings for the recovery of any or all of the legal costs until they have been assessed or any costs dispute has been determined by the designated local regulatory authority or under jurisdictional legislation; and
(d) the contravention is capable of constituting unsatisfactory professional conduct or professional misconduct on the part of any principal of the law practice or any legal practitioner associate or foreign lawyer associate involved in the contravention.
…
Section 185 of the Uniform Law provides, inter alia, that:
185 Certain costs agreements are void
(1)A costs agreement that contravenes, or is entered into in contravention of, any provision of this Division is void.
Note: If a costs agreement is void due to a failure to comply with the disclosure obligations of this Part, the costs must be assessed before the law practice can seek to recover them (see section 178(1)).
The Uniform Law provides mechanisms for the challenge to a costs agreement, both in terms and execution of the retainer as well as the quantum of the legal fees charged and is, prima facie, available to the applicant in these proceedings.
However, both parties have chosen to commence costs proceedings in the State courts. The applicant has responded to the proceedings initiated by the solicitors in the District Court and sought an assessment of costs by a costs assessor.
In relation to the submission made on behalf of the applicant that the Family Court has implied jurisdiction to deal with costs as between solicitors and clients, because solicitors are officers of the Court, it is not necessary to determine that issue. Wood J, in the matter of Johnston v LDA Legal Pty Ltd [2019] VSC 462, noted:
It is arguable that the Family Law scale does not ‘fix’ an amount of costs. It is a scale against which costs can be ordered as between parties by the Family Court or Federal Circuit Court in a particular case. When considering the status of the Family Law scale, it is apparent from Rule 19.18 of the Family Law Rules 2004 (and the example that follows that particular Rule) that the scale does not ‘fix’ amounts of costs. That scale was also the solicitor/client scale up to 30 June 2008. Prior to then the Family Court itself dealt with these disputes and they were not dealt with under State legislation. However, since that date the Commonwealth has relinquished that jurisdiction and the Chapter 19 heading became ‘PARTY/PARTY COSTS.’ The ‘Summary’ that also appeared states that for disputes between a lawyer and a client about costs charged, the State legislation applies where the application, retainer or agreement occurred after 30 June 2008.
(emphasis added)
The summary attached to the Family Law Rules directs disputes between lawyers and a client towards the State or Territory legislation in the following way:
For a dispute between a lawyer and a client about the costs charged by the lawyer:
(a) for a fresh application commenced after 30 June 2008;
(b) under a new agreement between the lawyer and the client entered into after 30 June 2008; or
(c) under a new retainer entered into by a client in the client’s case after 30 June 2008, if the client instructs a new lawyer in a new firm;
see the State or Territory legislation governing the legal profession in the State or Territory where the lawyer practices.
In the present circumstances, there is, in place, a process prescribed by legislation to determine the dispute between the applicant and the solicitors. Such process has already been commenced by parties under State jurisdictions, and thus it is not necessary for the Family Court to intervene in that process.
The application for review is dismissed. The decision of the registrar to refuse to file the application was correct.
I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 18 November 2019.
Associate:
Date: 18 November 2019
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