MJ Arthurs Pty Ltd v QS Law Pty Ltd trading as Quinn and Scattini Lawyers

[2018] QDC 150

DISTRICT COURT OF QUEENSLAND

CITATION:

MJ Arthurs Pty Ltd & Anor v QS Law Pty Ltd trading as Quinn & Scattini Lawyers  [2018] QDC 150

PARTIES:

MJ ARTHURS PTY LTD ACN 145 344 056

(first applicant)

AND

MICHAEL JAMES ARTHURS
(second applicant)

AND

QS LAW PTY LTD ACN 151393654 trading as QUINN & SCATTINI LAWYERS
(respondent)

FILE NO/S:

3491/16

DIVISION:

Civil

PROCEEDING:

Application

ORIGINATING COURT:

District Court at Brisbane

DELIVERED ON:

10 August 2018

DELIVERED AT:

Brisbane

HEARING DATE:

23 July 2018

JUDGE:

Smith DCJA

ORDER:

1.   The parties are to prepare a draft order in accordance with these reasons within 14 days failing which the matter is to be listed for further argument.

2.   The parties are given liberty to apply.

CATCHWORDS:

PROFESSIONS AND TRADES- LAWYERS- BILLS OF COSTS - review of assessment of costs assessor - whether the costs assessor accorded procedural fairness to the respondent - whether the procedure was fair- whether there should have been an oral hearing- whether there was disclosure of changes to the amount of costs estimated - whether particular items should have been disallowed by the costs assessor

Evidence Act 1977 (Q) ss 83, 84, 85, 87, 95

Legal Profession Act 2007 (Q) ss 308, 314, 315, 316, 340, 341

Uniform Civil Procedure Rules 1999 (Q) rr 720, 721, 742

Arthurs v Queensland Building Construction Commission [2014] QCATA 155

Australian Coal and Shale Employees Federation v The Commonwealth (1953) 94 CLR 621

Bethscheider v CMC Lawyers [2018] QDC 133

Chandra v Queensland Building and Construction Commission [2014] QCA 335

Connollys Lawyers v Davis [2013] QCA 231

Farrar v Julian-Armitage & Anor [2015] QCA 289

Franklin v Barry & Nilsson Lawyers [2011] QDC 55

Hannover International Ltd v Robson [2012] QSC 47

Kioa v West (1985) 159 CLR 550

Marriage of Stanistreet (1987) 89 FLR 419

Marshall v Cooper Grace and Ward [2013] QDC 205

Minister for Immigration and Citizenship v SZGUR (2011) 241 CLR 594

MJ Arthurs Pty Ltd v Heaysman and Anor [2015] QCA 113

MJ Arthurs Pty Ltd v Portfolio Housing Pty Ltd [2015] QCA 86

MJ Arthurs Pty Ltd v Portfolio Housing Pty Ltd [2014] QSC 86

MJ Arthurs Pty Ltd v Heaysman and Anor [2014] QDC 160

Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation (1963) 113 CLR 475

Naidoo v State of Queensland [2015] QDC 68

Nashvying Pty Ltd v Giacomi [2009] QSC 31

Paroz v Gouldson [2014] QDC 125

Queensland Building Construction Commission v Arthurs [2014] QCA 307

R (West) v Parole Board [2005] 1 WLR 350

Radich v Kenway [2014] QCA 301

Re Baker Johnson’s Bill of Costs [1995] 2 Qd R 234

Re Blyth and Fanshawe (1882) 10 QBD 207

Redfern v Mineral Engineers Pty Ltd [1987] VR 518

Schwepps v Archer (1934) 34 SR (NSW) 178

Southwell v Jackson [2012] QDC 65

Swaffield v R (1998) 192 CLR 159

SZBEL v Minister of Immigration (2006) 228 CLR 152

Williams v R (1986) 161 CLR 278

Dal Pont “Law of Costs” 2013 3^rd ed. Lexis Nexis

COUNSEL:

Mr D Atkinson for the Applicants

Solicitors for the Respondent

SOLICITORS:

Irish Bentley for the Applicants

Quinn & Scattini for the Respondent

TABLE OF CONTENTS

Introduction

Background

Principles relating to a costs assessment review

Procedural Fairness/Unfairness/Inefficiency

Submissions

Relevant evidence

Relevant Statutory Provisions

Conclusion on the procedural fairness point

Covering the whole file issue/Affinity - Page No 1 items 2 and 4

Submissions

Discussion

Submissions

Discussion

Page 7 item 2

Submissions

Discussion

Submissions

Discussion

Item 84 item 19

Submissions

Discussion

Page 57 Item 1

Submissions

Discussion

Page 57 item 2

Submissions

Discussion

Page 860 item 25

Submissions

Discussion

Page 570 item 30 and page 578 item 38

Submissions

Discussion

Solicitor’s error – page 41 item 2

Discussion

Submissions

Discussion

Non-disclosure as to the level of costs

Introduction

1. The respondent (“Quinn & Scattini”) has applied for a review of a costs assessment of a solicitor and own client bill. 

1. On such a review the court has the powers listed in Rule 742(6) of the Uniform Civil Procedure Rules 1999 (Q) (“UCPR”).

Background

1. The background to this matter is that Quinn & Scattini acted for the applicants (“Arthurs”) in some 25 Supreme and District Court proceedings. 

1. The costs assessor noted the background of the matter in his reasons.[1]

   [1]Cost assessor’s reasons filed 12 March 2018, document 22, at [1]-[12].

1. Michael Arthurs was a builder. MJ Arthurs Pty Ltd was the corporate entity by which Arthurs carried out building works. 

1. Since about 2005 Arthurs and Mr Davison, who was a cabinet maker, had been doing business together.  Mr Davison would identify building projects and the first applicant would do the building.  After construction was complete the net profits would be shared equally.  The arrangement was in the nature of a joint venture. 

1. Quinn & Scattini at the relevant time became Arthurs’ second firm of solicitors.  The first firm JHK Legal acted for Arthurs until December 2013 at which time Quinn & Scattini agreed with Arthurs to take over the conduct of various pieces of Supreme Court, District Court and QCAT litigation. 

1. The assessment of costs in this case involved assessing costs that Quinn & Scattini charged Arthurs while Quinn & Scattini was acting for Arthurs.

1. In 2012, the joint venture that Arthurs and Mr Davison were involved in concerned the construction of a number of residential houses in Mackay.  By that time Mr Davison had lost his builder’s license and was not permitted by legislation to become involved in building projects.  For that reason the Mackay project involved an external marketeer called Optima Homes Pty Ltd.  Optima sold house and land packages to members of the public.  Under previous projects between Arthurs and Mr Davison, third party home owners had paid progress payments to Arthurs but under the Mackay project the progress payments were paid to a joint account in the name of Optima and the company controlled by MJ Arthurs Pty Ltd and Mr Davison called Portfolio Housing Pty Ltd.  In November 2012 the Mackay project involved approximately 25 houses in various stages of construction. 

1. In November 2012 Arthurs and Mr Davison fell out, the joint venture was terminated and Arthurs engaged JHK legal to act for them. 

1. In the District Court at Brisbane, Arthurs made claims against approximately 25 third party home owners and caveated the titles of each in order to preserve Arthurs’ rights to payments. 

1. In the Supreme Court, Arthurs made a claim against Mr Davison and Portfolio Housing seeking damages and an account.  Mr Davison and Portfolio Housing counterclaimed. 

1. One of the questions to be determined by the Supreme Court was how the profits of the joint venture in respect of unfinished building contracts should be shared. 

1. At about the same time the Queensland Building and Construction Commission (“QBCC”) had suspended the building licence of MJ Arthurs Pty Ltd and MJ Arthurs sought leave to appeal that decision out of time.  That suspension was overturned on appeal[2] but in late 2015 the QBCC sought to appeal that decision.

   [2]Arthurs v QBCC [2014] QCATA 155.

1. Arthurs changed solicitors to Quinn & Scattini in respect of all matters in December 2013.  On 19 December 2013 the respondent opened file number 135097 “MJ Arthurs general filing.” Before the files were delivered to Quinn & Scattini from JHK Legal Quinn & Scattini sent Arthurs an email dated 8 January 2014 which stated that Quinn & Scattini would not charge for “redoing any work that has already been done or to review the files to bring ourselves up to speed on what has been done” but would charge “once new work is done on your files.”[3]

   [3]Cost assessor’s reasons filed 12 March 2018, document 22, at [8].

1. The costs agreement attached to that email estimated “total costs” of between $2,000 to $60,000 for each District Court matter, between $20,000 and $100,000 for the Supreme Court matter, stated that Quinn & Scattini would charge hourly rates calculated in units of two minutes for each unit, stated that Mr Kake’s time would be charged out at $495.00 plus GST per hour, that there would be a service charge of four per cent plus GST on fees payable and Quinn & Scattini would charge for disbursements which would include  barristers’ fees.  The work was to “act for you in all of the matters described in the attached schedule”.  The schedule included 25 pieces of litigation in which MJ Arthurs Pty Ltd was involved of which one was Supreme Court matter BS1897/13, 15 were current District Court matters, and 9 were District Court matters to be commenced. 

1. MJ Arthurs Pty Ltd v Heaysman & Anor was one of the more advanced cases in terms of preparation. On 20 March 2014 Mr L Bowden, a barrister, appeared for the applicants and McGill SC DCJ ordered that MJ Arthurs Pty Ltd v Heaysman & Anor be heard first and all other District Court actions be stayed.

1. The Supreme Court litigation (BS1897/13) was heard between 2 June and 6 June Daubney J.[4]  As part of Daubney J’s judgment a special referee was appointed to carry out an account.  Arthurs appealed this judgment in March 2015 successfully[5] and the matter was remitted to Daubney J for further directions.  The dispute was eventually settled in late 2015 by a deed a settlement between Arthurs and the liquidators of Portfolio Housing Pty Ltd.  Some adverse cost orders made against Arthurs in the course of that action were resolved by deed of settlement.

   [4]MJ Arthurs Pty Ltd v Portfolio Housing Pty Ltd [2014] QSC 151.

   [5]MJ Arthurs Pty Ltd v Portfolio Housing Pty Ltd [2015] QCA 86.

1. MJ Arthurs Pty Ltd v Heaysman & Anor[6] was heard on 23 June and 25 June 2014.  Arthurs lost.  Arthurs appealed this judgment, the appeal being heard on 23 April 2015 but it was dismissed[7].

   [6][2014] QDC 160.

   [7][2015] QCA 113.

1. In respect of the QCAT matter the first applicant obtained leave to appeal out of time and ultimately the QBCC failed to obtain leave to appeal the decision of QCAT.[8]

   [8]QBCC v Arthurs [2014] QCA 307.

1. The following amounts were billed on each file:[9]

   (a)        File No 135097 “District Court”- $150,631.59

   (b)        File No 140412 “QBCC”- $37,282.15

   (c)        File No 140413 “Supreme”- $585,833.77

   (d)        File No 140684 “Ziyad”- $7,409.52

   (e)        File No 143226 “QCAT Appeal”- $19,058.67

   [9]Cost assessor’s reasons filed 12 March 2018, document 22, at [12].

2. However further invoices revealed greater billings as follows:[10]

   (a)        File No 140412- $40,364.50

   (b)        File No 140413- $616,946.94

   [10]Cost assessor’s reasons filed 12 March 2018, document 22, at [14].

3. Thus the total billings were $834,411.22.

1. After an itemised bill was delivered the total costs claimed were:[11]

   (a)        File No 135097- $136,972.76

   (b)        File No 140412-$36,958.36

   (c)        File No 140413- $591,930.68

   (d)        File No 140684- $6,845.52

   (e)        File No 143226- $18,026.06    

Total - $790,733.38 (excluding GST)

[11]Cost assessor’s reasons filed 12 March 2018, document 22, at [146].

1. After assessment the costs allowed were:[12]

   (a)        File No 135097- $92,564.31

   (b)        File No 140412-$17,753.42

   (c)        File No 140413- $342,122.61

   (d)        File No 140684- $2,267.37

   (e)        File No 143226- $12,781.30

Total - $467,489.01 (including GST)

[12]Cost assessor’s reasons filed 12 March 2018, document 22, at [146]-[153].

1. The initial cost estimates to the client by Quinn and Scattini on the files were:

   (a)        File No 135097- $20,000- $50,000[13]

   (b)        File No 140412- $20,000-$80,000[14]

   (c)        File No 140413- $50,000- $100,000[15]

   (d)        File No 140684- $3,000-$10,000[16]

   (e)        File No 143226- $19,000[17]

   [13]Cost assessor’s reasons filed 12 March 2018, document 22, at [60].

   [14]Cost assessor’s reasons filed 12 March 2018, document 22, at [80].

   [15]Cost assessor’s reasons filed 12 March 2018, document 22, at [83].

   [16]Cost assessor’s reasons filed 12 March 2018, document 22, at [123].

   [17]Cost assessor’s reasons filed 12 March 2018, document 22, at [119].

2. With respect to file No 135097 this estimate was later varied to $85,060.[18]

   [18]Cost assessor’s reasons filed 12 March 2018, document 22, at [66].

1. With respect to file no 140413 this estimate was later varied to $156,565.00[19]. The costs assessor found this to be a serious non-disclosure when it came to consider the actual costs.[20] 

   [19]Cost assessor’s reasons filed 12 March 2018, document 22, at [91] and [97].

   [20]Cost assessor’s reasons filed 12 March 2018, document 22, at [97].

1. With respect to the appeal from the Supreme Court judgment and the special referee the costs assessor found that the cost estimate was $38,500 and yet the end sum billed was $131,694.73.[21] Again he considered this a serious failure to disclose.[22]

   [21]Cost assessor’s reasons filed 12 March 2018, document 22, at [114] and [149].

   [22]Cost assessor’s reasons filed 12 March 2018, document 22, at [114] and [149].

1. By the end of 2015 Arthurs had been billed $834,411.22 in costs to Quinn & Scattini.

1. In February 2016 Arthurs sought an itemised bill from Quinn & Scattini. 

1. On 14 December 2016 Quinn & Scattini provided a costs statement. 

1. On 28 September 2016 an order was made by consent appointing Peter Arthur as costs assessor. 

1. On 24 October 2017 Peter Arthur certified as follows:

   (a)        Professional fees $147,568.26

   (b)        Service fees $3,639.82

   (c)        Disbursements $316,218.73

   (d)        Total $467,489.01

   (e)        Less costs of the assessment $35,200.00

   (f)         Total $432,289.01

2. The amount of the reduction by the costs assessor is said to be $348,519.56.[23]

   [23]Affidavit of Russell James Leneham filed 22 May 2018, document 35.

1. On 21 December 2017 the deputy registrar ordered Arthurs to pay $432,289.01 in costs.

1. On 22 December 2017 Quinn & Scattini applied for a review of the assessment. 

1. On 17 January 2018 Quinn & Scattini applied to set aside the deputy registrar’s order.

1. On 12 February 2018 Porter DCJ QC set aside the orders made by the deputy registrar and made orders concerning the costs review. 

1. On 11 February 2018 the costs assessor provided his reasons. 

1. On 15 March 2018 Quinn & Scattini applied for a costs review.

1. On 16 April 2018 Rackemann DCJ ordered Quinn & Scattini to deliver its objections which were delivered on 17 May 2018. 

1. On 24 May 2018 Arthurs applied for judgment against Quinn & Scattini in an amount of $514,081.94.

1. Finally on 25 May 2018 Koppenol DCJ ordered that Quinn & Scattini file grounds for the review, further material to be relied on and listed the matter for a two day hearing.[24]

   [24]Order of Koppenol DCJ dated 25 May 2018, document 37.

Principles relating to a costs assessment review

1. Rule 742 of the UCPR provides:

742 Review by court

(1)        A party dissatisfied with a decision included in a costs assessor’s certificate of assessment may apply to the court to review the decision.

(2)        An application for review must be filed within—

(a)        if reasons are requested under rule 738(1)—14 days after the party receives those reasons; or

(b)        otherwise—14 days after the party receives the certificate.

(3)        The application must—

(a)        state specific and concise grounds for objecting to the certificate; and

(b)        have attached to it a copy of any written reasons for the decision given by the costs assessor; and

(c)        state any other matter required by a practice direction made in relation to this rule.

(4)        The applicant must serve a copy of the application on all other parties to the assessment within 14 days after the application is filed.

(5)        On a review, unless the court directs otherwise—

(a)        the court may not receive further evidence; and

(b)        a party may not raise any ground of objection not stated in the application for assessment or a notice of objection or raised before the costs assessor.

(6)        Subject to subrule (5), on the review, the court may do any of the following—

(a)        exercise all the powers of the costs assessor in relation to the assessment;

(b)        set aside or vary the decision of the costs assessor;

(c)        set aside or vary an order made under rule 740(1);

(d)        refer any item to the costs assessor for reconsideration, with or without directions;

(e)        make any other order or give any other direction the court considers appropriate.

(7)        Unless the court orders otherwise, the application for review does not operate as a stay of the registrar’s order.

1. The role of the court in reviewing the decision of a costs assessor has been the subject of judicial discussion. 

1. In Redfern v Mineral Engineers Pty Ltd[25] it was noted:

   “The courts’ surveillance over costs as between solicitor and client is assumed with a view to preventing any unfair advantage by solicitors in their charges to their clients.  It stems, it seems, from the notion that ordinarily a solicitor is presumed to be in a position of dominance in relation to his client as a result of his presumed knowledge of the law and of what may and may not be properly charged by way of fees.  Were a strict view not taken it might be open to a solicitor to overreach his client or otherwise act oppressively towards him on the matter of costs.  Considerations of public policy and undue influence combined to shape the attitude of the courts of equity, by which the general rules in relation to taxation of costs were formulated.”

   [25][1987] VR 518 at page 523.31 per Tadgell J.

2. In Hannover International Ltd v Robson[26] Ann Lyons J (as she then was) noted the following:

   “There is no doubt that a costs assessor appointed pursuant to the UCPR has a very broad discretion and the court, on review of such an assessment, has similarly wide discretion. [And further with reference to Nashvying Pty Ltd v Giacomi[27]]… the discretion conferred by the subrule is a wide one.  But it is to be exercised with a consciousness that it is effectively an appeal against the exercise by the costs assessor of a discretion.  In general, the court will interfere only where the discretion appears not to have been exercised at all or to have been exercised in a manner which is manifestly wrong.”

   [26][2012] QSC 47 at [17]-[18].

   [27][2009] QSC 31 at [3]-[4].

3. Her Honour also referred to Australian Coal and Shale Employees Federation v The Commonwealth[28] where it was noted:

   “It was held that the court would review a decision of a costs assessor or taxing officer where it is contended the assessor proceeded on a wrong principle either in determining whether an item should be allowed or in determining how much would be allowed.  However, the court held that where there is no error of principle involved, the court should be reluctant to interfere particularly where the question is one of “amount only”.  An applicant must therefore show that the discretion has not been exercised at all or that it was exercised in a manner which was clearly wrong.”

   [28](1953) 94 CLR 621 at pages 627-628.

4. Further Her Honour noted at [47] that in her view it was the applicant to satisfy the court that the assessor had conducted the assessment in a way which is manifestly wrong and:

   “It may well be that I and indeed the trial judge might well have reached a different calculation and indeed a calculation which was significantly less than the assessor’s calculation.  However, that factor is irrelevant.  Minds may differ as to what is considered to be “not unreasonable”.  The actual calculation was a matter entirely within the assessor’s discretion.”[29]

   [29][2012] QSC 47 at [47].

5. In Farrar v Julian-Armitage[30] the Court of Appeal held at [15]:

   “Those powers fall to be exercised cognisant that an assessment of costs involves evaluative determinations and discretionary decisions about questions to which there is not only one correct answer, with the result that the courts should generally be unwilling to interfere in the absence of clear error.  In Schweppes Ltd v Archer[31] it was said “the court will always review a decision of a taxing officer where it is contended that he has proceeded upon a wrong principle, for the purpose of determining the principle which should be applied, and an error in principle may occur both in determining whether an item should be allowed and in determining how much should be allowed.  When no principle is involved, and the question is whether the taxing officer has correctly exercised a discretion which he possesses and is purporting to exercise, the court is reluctant to interfere.  It has undoubted jurisdiction to review the taxing officer’s decision even where an exercise of discretion only is involved, and will do so freely on a proper case, using its own knowledge of the circumstances… but it will in general interfere only where the discretion appears not to have been exercised at all, or to have been exercised in a manner which is manifestly wrong; and where the question is one of amount only, will do so only in an extreme case.”

   [30][2015] QCA 289 at [15].

   [31][1934] 34 SR (NSW) 178 at pages 183-184.

1. Indeed Quinn & Scattini acknowledge that I should treat this review as like an appeal against the exercise of a discretion.[32]

   [32]Quinn & Scattini’s submissions filed 16 April 2018, document 28, at [7].

1. I now turn to an examination of the groups of issues which have arisen during this process.  The parties agreed that this was an appropriate course which the court should adopt. This was because the issues with which I will deal in this judgment cover the bulk of the items the subject of the assessment. 

1. With respect to the balance of the matters I adjourn consideration of those to a date to be fixed, if the parties have not agreed upon them.

Procedural Fairness/Unfairness/Inefficiency

1. The first issue I need to determine is whether a lack of procedural fairness was accorded to Quinn & Scattini. This is because if that is so this “infects” the whole of the procedure conducted and may require the entire matter to be remitted for another assessment.

1. There is no doubt of course that procedural fairness applied to the assessment and it had to be fair and efficient.[33]

   [33]UCPR 720(2) and Radich v Kenway [2014] QCA 301 at [38]-[39].

Submissions

1. Quinn & Scattini submit in their grounds for review of the assessment that the assessment procedure was not fair.  They submit that the procedure was not consistent with the rules of natural justice and the refusal to conduct an oral hearing deprived Quinn & Scattini of the opportunity to be fully and clearly apprised of the arguments the assessor considered relevant and to fully respond to those arguments.[34]

   [34]Respondent’s grounds for review of the assessment filed 17 May 2018, document 33, at [18]-[22].

1. It is submitted that the assessor gave Quinn & Scattini no real or practical opportunity to put in evidence or make submissions on issues that came to the mind of the assessor.[35]

   [35]Quinn & Scattini’s submissions filed 16 April 2018, document 28, at [14.4].

1. In terms of the unfairness point Quinn & Scattini submits that the assessor should have sought the court’s direction in light of the file changing hands. The details of this are in their submissions.[36]

   [36]Respondent’s grounds for review of the assessment filed 17 May 2018, document 33, at [1]-[13]. 

1. It is submitted by Quinn & Scattini that the procedure was inappropriately conducted in private,[37] and it was inefficient.[38]

   [37]Respondent’s grounds for review of the assessment filed 17 May 2018, document 33, at [14]-[17]. 

   [38]Respondent’s grounds for review of the assessment filed 17 May 2018, document 33, at [23]-[28]. 

1. Arthurs on the other hand submits that in this case the assessor took a number of steps prior to the assessment including:[39]   

   (a)        writing to the law firm asking it for suggestions on how the matter might be resolved;

   (b)        inviting the law firm to inspect the boxes delivered; 

   (c)        informing the law firm that if they did not inspect the boxes he would proceed on the basis that he had a full copy of the files;

   (d)        asking the law firm to provide electronic data especially all emails but the law firm declined do so; and

   (e)        the assessor then reached a factual finding on the available information and on the assumption that the boxes did constitute the whole of the file.

   [39]Exhibit 3, Arthurs’ submissions, at [7]-[27].

2. It is submitted in those circumstances that there was no denial of procedural fairness.  With respect to the oral hearing point, it is submitted that the assessor invited submissions.  It is further submitted the assessor had an explicit discretion under UCPR 720 to hear the assessment in private without an oral hearing.  It is submitted that the oral hearing would have taken 12 days with no gain.  It is submitted the assessor was a qualified costs assessor appointed by a consent order, capable of assessing the file.  Arthurs was self-represented and would have been of minimal assistance in the oral hearing, also the oral hearing would have involved inviting a practitioner with no personal experience of the file to make submissions over a lengthy period about matters which the assessor could have resolved.  It is submitted that it cannot be shown the assessment procedure was manifestly wrong. 

1. Ultimately Arthurs submit that an oral hearing would have been inappropriate, inefficient and unfair.

Relevant evidence

1. In order to consider this ground, it is necessary to consider the correspondence leading up to the assessment. 

1. Now it is common ground Mr Arthur was appointed as costs assessor by the District Court on 28 September 2016. 

1. On 12 October 2016 the assessor emailed both parties requiring Arthurs to provide copies of the relevant invoices; requiring Quinn & Scattini to email written costs agreements and disclosure notices and he would then be in the best position to form a view as to how the procedure was to be carried out.[40]  At that stage Quinn & Scattini had no objection to that procedure.[41] 

   [40]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 2.

   [41]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 3.

1. The costs agreements and disclosures were sent by Quinn & Scattini to the assessor on 22 October 2016.[42] 

   [42]Affidavit of Russell James Leneham filed 22 December 2017, document 11, pages 15-19.

1. On 25 October 2016 the assessor emailed Mr Leneham noting he had looked at the costs agreements and disclosures but did not see any disclosures made under section 309 of the Legal Profession Act 2007 (Q) (“LPA”) and he required a copy of those.[43] 

   [43]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 26.

1. Mr Leneham replied on 25 October 2016 advising him it was not possible to comply with that request by close of business the next day.  He said:

   “The extraction of section 309 disclosures from the file is an enormous undertaking which is not justified in the circumstances. Rather than undertaking that exercise I call on Mr Arthurs to acknowledge that Mr Kake was always diligent in disclosing to the clients the details of counsel’s fees that would be incurred. Mr Arthurs knows this to be true as he was always being pressed by Mr Kake to pay money to our trust account to cover counsel’s fees. As most of the file was released to Mr Arthurs when we ceased acting Mr Arthurs bears some responsibility to deliver section 309 disclosures to you. I cannot say what was released to Mr Arthurs as compared to what we have retained as I was not involved in the release of file and Mr Kake is no longer employed by Quinn & Scattini. I would think that your first direction should be one, for the delivery of the file to you (most of the file is held by Mr Arthurs’ current lawyers), two, for the delivery of objections to the itemised bill. Mr Arthurs insisted an itemised invoice is being provided. We have complied with that request with more than one hundred bills within the prescribed timeframe. As yet Mr Arthurs has not identified any objection to any of the items on the bills despite our repeated invitations for him to do so. Any such objection should contain number into cross with reference with the itemised bills. We are entitled to know what are the clients’ objections to the bills and you are surely entitled to know that before you get too deeply into the assessment process.”[44]

   [44]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 27.

2. The assessor replied to Quinn & Scattini the same day suggesting it was not difficult to find the section 309 disclosures and asked what extension was necessary.[45] 

   [45]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 28.

1. On 26 October 2016 the assessor wrote to Arthurs pointing out that Quinn & Scattini had suggested there should be a notice of objections. The assessor did not agree with Quinn & Scattini’s suggestion but having said this, he pointed out he would assess the file by reference to section 341 of the LPA and he would need a copy of the file and the assessment might take many months to complete and if the assessment was confined to limited objections, this might significantly reduce the time and cost of it.[46] 

   [46]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 29.

1. Arthurs on 28 October 2016 replied to the assessor’s email noting that they were self-represented and requested directions as to the procedure.[47]

   [47]Affidavit of Russell James Leneham filed 22 December 2017, document 11, pages 31-32.

1. On 5 November 2016, Quinn & Scattini sent 35 documents concerning disclosures as to counsel’s fees.[48] 

   [48]Affidavit of Russell James Leneham filed 22 December 2017, document 11, pages 34-37.

1. On 5 November 2016, Mr Leneham emailed the assessor enclosing an acknowledgement receipt and undertaking signed by JHK Legal (the previous solicitors for Arthurs) noting that Mr Auliff on 11 September 2015 had collected all of the Arthurs’ files, namely 32 large archive boxes and one DVD.[49] 

   [49]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 40.

1. On 9 November 2016, Arthurs advised the costs assessor that a detailed list of objections was being prepared.[50] 

   [50]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 42.

1. On 18 November 2016, the assessor by email proposed that Quinn & Scattini be given 21 days to prepare a costs statement and Arthurs 28 days to list their objections.  He asked Quinn & Scattini whether all of the files had been sent to JHK and whether Quinn & Scattini had in its possession files or relevant notes.[51] 

   [51]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 45.

1. Quinn & Scattini by email on 22 November 2016 replied stating they did not retain copies of any files that were sent to JHK, there might have been scans made of some of the files but Mr Leneham was unable to find any.  The original files were sent to JHK.  Quinn & Scattini had retained invoices and related documents, original file notes, and internal emails and two arch lever files relating to Supreme Court matter 1897/13.  With respect to the costs statement, Mr Leneham had prepared an attached document which he had found useful in another large costs assessment had asked whether that would be helpful and he enclosed this example.[52] 

   [52]Affidavit of Russell James Leneham filed 22 December 2017, document 11, pages 47-52.

1. The assessor replied on 22 November 2016 stating that he found the costs statement format useful. He also wanted Quinn & Scattini to satisfy themselves that the content of the 32 boxes was the same as when they were handed to JHK.  He said “do you have a suggestion as to how that difficulty can be overcome?” He said he thought he could carry out the assessment provided he was given a hard copy of the documents identified.[53] 

   [53]Affidavit of Russell James Leneham filed 22 December 2017, document 11, pages 53-54.

1. On 22 November 2016, Mr Leneham replied noting that he retained print outs of internal emails.  He said there were many electronic documents and the documents they were holding were contained in two archived boxes.  He said the hard copy files (the 32 boxes) should be a more accurate representation of the file than the documents Quinn & Scattini held electronically.  He said they had no idea whether the current files would be the same as when they were released.  He thought that it would be difficult for a person to verify the contents of the boxes. He said “I suppose that is a problem that can be addressed if it arises.”[54] 

   [54]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 55.

1. On 23 November 2016, the assessor gave directions that Quinn & Scattini was to send a costs statement within 21 days; Quinn & Scattini was to deliver the two boxes of documents within 21 days and he would make further directions after looking at these documents.[55] 

   [55]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 56.

1. By email dated 9 December 2016 Mr Leneham advised he had placed all of the documents into a single archive box and had given instructions they be posted.[56] 

   [56]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 57.

1. On 14 December 2016, Quinn & Scattini forwarded a single costs statement to the assessor.[57] 

   [57]Affidavit of Russell James Leneham filed 22 December 2017, document 11, pages 58-59.

1. On 4 January 2017, the assessor by email gave directions to Quinn & Scattini for them to send any additional emails to him.[58] 

   [58]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 60.

1. By reply, Quinn & Scattini on 18 January 2017 noted they had sent all of the hard copies of emails they had, it was also noted:

   “Having looked at the electronic files tonight I estimate that it would take many dozens of hours for us to go through the electronic files and print out all of the emails one by one.  Given that we have already printed hard copies that will be in the file, we respectfully submit that it is impractical and unfair to require use to perform that exercise again.  We submit that a more appropriate direction would be for Mr Arthurs to deliver the existing file (our file) to you.  Then, if it appears during the assessment process that an email is missing from the hard copies, it will be a simple process for us to locate the specific electronic copy of that email and print it out, rather than requiring us to print countless duplicates of emails now.”[59]

   [59]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 63.

2. By email dated 19 January 2017, the assessor noted that in order for him to assess the costs he needed the complete file which he understood were in the 32 boxes in Arthurs’ possession and he requested those.[60] 

   [60]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 64.

1. By email dated 20 January 2017, Arthurs noted he held a great many storage boxes which were not provided direct to him by Quinn & Scattini.  He said he did not say the records were complete and accurate but he would cooperate with any reasonable direction made.  He noted he had been preparing the objections.[61] 

   [61]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 65.

1. The costs assessor requested the boxes on 20 January 2017 and requested an electronic copy of Quinn & Scattini’s files.[62] 

   [62]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 66.

1. Arthurs by email dated 20 January 2017 stated that they held 28 storage boxes but a large majority of these did not contain any material which would assist in the costs assessment process.  In addition, documents in two of the remaining storage boxes were not in any order.[63] 

   [63]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 67.

1. Quinn & Scattini by email dated 21 January 2017 noted that they could provide the electronic files but did not consider this was an efficient method of examination enclosing a screenshot in that regard.  With respect to the assortment of 28 boxes, Quinn & Scattini said that was not the file, he needed to provide the 32 boxes that were released to him.[64] 

   [64]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 68.

1. The assessor on 23 January 2017 by email to the parties stated he needed the full copies of the files to carry out the assessment.  He asked Quinn & Scattini whether the 32 boxes given to JHK contained all parts of the files (aside from the one box Quinn & Scattini had sent to him).  He asked Arthurs whether he or his representative collected 32 boxes and for an explanation as to why he only now had 28 boxes.[65] 

   [65]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 69. 

1. By email dated 23 January 2017 Arthurs advised the assessor that his former lawyers JHK Legal had collected/received 31 boxes from Quinn & Scattini on 11 September 2015.  He was unsure who accessed the boxes and what material may have been removed when the boxes were in the possession of JHK Legal.  He said his present firm Construct Law received 22 boxes from JHK legal on 26 July 2016 and another 5 boxes were received from JHK Legal on 30 August 2016.

1. A final box was picked up from Quinn & Scattini on 12 February 2016.[66]

   [66]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 70.

1. On 24 January 2017, Mr Leneham wrote to the assessor noting that the parties were in agreement that full copies of the files were needed to carry out the assessment.  It was noted that the trial exhibits in addition to the 32 boxes of files may be relevant to the assessment.  It was noted “as the 32 large archived boxes were released to the representatives of the present applicants it is incumbent upon the present applicants to deliver those boxes (the 32 large archive boxes to you for the purposes of the assessment)”.  It was submitted that without this there would not be a fair assessment.[67]

   [67]Affidavit of Russell James Leneham filed 22 December 2017, document 11, pages 72-73.

1. The assessor on 24 January 2017 requested the CD which was given to JHK Legal in September of 2015.[68] 

   [68]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 79.

1. Arthurs on 24 January 2017 advised the costs assessor they were prepared to authorise JHK Legal to release the disc but also that he had a copy of it and could send it to the assessor.  He did not agree with Quinn & Scattini’s contention that the assessment was not able to proceed.[69] 

   [69]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 80.

1. The assessor directed Arthurs to send him the boxes of documents and the disc in his possession within 10 days and his written objections within 10 days.[70] 

   [70]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 82.

1. On 23 February 2017 the assessor noted he had received 30 boxes of documents from Arthurs.  In addition he had received one box of documents from Quinn & Scattini.  He directed Arthurs to forward the CD or a copy of it or documents on it and a copy of the objections.  He allowed Quinn & Scattini the opportunity to inspect the 30 boxes and allowed Arthurs the opportunity to inspect the one box.[71] 

   [71]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 83.

1. On 2 March 2017, Arthurs noted it had delivered arch lever folders and a USB stick relevant to the matter to the assessor.[72]  Additionally Arthurs sent a USB stick to Quinn & Scattini.[73]  Arthurs, in these documents, delivered also a number of objections to the bill of Quinn & Scattini.[74]  Arthurs noted the following points:

   [72]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 84.

   [73]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 90.

   [74]Affidavit of Russell James Leneham filed 22 December 2017, document 11, pages 91-108.

   (a)        The inclusion of a claim in the bill is evidence of nothing more than there was such a claim.  The cost assessor is required to satisfy himself on the balance of probabilities that the claim is a valid one and should be allowed and in this regard should rely on evidence of the work in the file to be satisfied that the work was done. 

   (b) In assessing the claim the assessor should have regard to section 341 of the LPA.

   (c)        The assessor should consider whether the time claimed was reasonable having regard to the work undertaken.

   (d)        If the assessor was not satisfied as to this, the claim should be disallowed.

   (e) The cost agreements dated 8 January 2014, 29 January 2014 and 27 August 2014 (except the QBCC appeal) referred to a minimum time charge increment of two minutes per unit. Mr Kake assured Arthurs that the agreements were similar to the earlier cost agreement. At no stage did Mr Kake provide any warning or disclosure that the minimum time charge increments of two minutes per unit in the original costs agreement had materially been varied in the last cost agreement to six minute increments.[75]

   [75]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 92.

   (f) Arthurs did not receive any written variation of the original cost agreements under section 315 of the LPA and Quinn & Scattini were therefore in breach of that section as the provision materially altered.[76] As a result by reason of section 316(4) the assessment should proceed on the basis of two minute increments.

   [76]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 93.

   (g)        Costs incurred by Quinn & Scattini that were paid by Arthurs were unnecessarily or improperly incurred and the progress report by Quinn & Scattini was misleading in several respects.[77]

   [77]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 94.

   (h)        That there was demonstrated inadvertent misleading and deceptive conduct or negligence on the part of Quinn & Scattini with respect to which costs should not be recovered.[78]

   (i)          Any progress reports claims were not fair and reasonable.[79]

   (j)         Quinn & Scattini had incorrectly charged Arthurs for professional costs when no cost disbursements were properly claimable.[80]

   (k) Quinn & Scattini retained third party legal service providers but failed to provide disclosure information in accordance with section 308, 309 and 310 of the LPA.[81]

   (l)          Quinn & Scattini overly relied on counsel when Mr Kake was an accredited commercial litigation specialist.[82]

   (m)       Arthurs had inspected all file notes, emails, letters and telephone receipts in their possession and were not in a position to confirm or deny that the item of costs were genuine or correct.  If Quinn & Scattini failed or refused to provide any correspondence with respect to the costs claimed Arthurs asserted their entitlement to a full refund of the item of costs.[83]

   (n)        There was an item of costs claimed for professional services based on administrative or secretarial work.

   (o)        Professional costs had been claimed for more than one unit of time when it would have taken much less than one unit of two minutes.[84]

   (p)        Quinn & Scattini failed to account to Arthurs for GST.[85] 

   (q)        The detailed tax invoice of Quinn & Scattini was unreliable.[86] 

   [78]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 95

   [79]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 95.

   [80]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 97.

   [81]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 98.

   [82]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 100.

   [83]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 101.

   [84]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 103.

   [85]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 106

   [86]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 107.

1. On 9 March 2017, the costs assessor wrote to Quinn & Scattini noting “Dear Russell if you want to inspect the boxes of documents delivered to me by Michael to ascertain whether they do or do not contain a full copy of the files please let me know within 7 days.  If you do not want to inspect then I intend to proceed on the basis that the boxes of documents and the USB stick do in fact contain the full copy of the files.”[87] 

   [87]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 110.

1. On 16 March 2017, Arthurs advised the costs assessor and Mr Leneham as to the fact that a USB stick had been sent to the cost assessor and to Mr Leneham and as to the documents contained therein.[88] 

   [88]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 112-113.

1. On 28 March 2017, Arthurs via email enclosed the detailed list of objections to both the cost assessor and Mr Leneham.[89] 

   [89]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 114.

1. The costs assessor on 9 June 2017, by email to Mr Leneham, requested copies of tax invoices sent to Quinn & Scattini by Mr Bowden and Mr Cooper QC.[90]

   [90]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 118.

1. Mr Leneham, via email dated 10 June 2017, said that he would forward those invoices shortly.[91]  These invoices were forwarded by Mr Leneham on 10 June 2017.[92] 

   [91]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 119.

   [92]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 120-125.

1. On 13 June 2017, Mr Leneham wrote an email to the costs assessor noting that the file had been released to Arthurs and it did not appear to have a complete copy of counsel’s invoices.[93] 

   [93]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 127.

1. On 14 June 2017, the costs assessor requested more of the tax invoices.[94] 

   [94]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 128.

1. On 15 June 2017, the costs assessor emailed the parties noting he was using the 1,083 page cost assessment sent by Arthurs on 28 March 2017 to mark up any reductions.  He noted:

   “If either of you believe that the 1,083 page cost statement is not an accurate copy of the 272 page document that Russell sent to me on 14 December 2016 expanded to 1,083 pages to accommodate Michael’s reasons for objection please let me know by 4pm on Monday 18 June 2017.  Russell – the applicant’s objections are mostly general ones and for that reasons I have assumed that you have not sought a direction that the respondent be permitted to complete the column titled ‘solicitors responses’.  If I assume incorrectly please let me know by 4pm on Monday 18 June 2017.  If the respondent wants to serve a general response to the objections again please let me know by 4pm on Monday 18 June 2017.  Russell and Michael one of the applicant’s objections is that the GST component of counsel’s invoices should be remitted to the applicant.  Can both of you please let me have brief submissions on that point within the next 10 days.”[95] 

   [95]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 130.

2. Mr Leneham by email on 15 June 2017 replied.  He submitted that the end result was the invoice was properly payable.  He pointed out he was not involved in the billing process.[96]

   [96]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 131.

1. Mr Leneham by letter dated 20 June 2017 to the assessor submitted that the objections made by the applicants were not of assistance in defining the issues and were a waste of time.  He submitted he would put together a response to the general objections.[97]

   [97]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 137.

1. Further, by email dated 26 June 2017, Mr Leneham told the assessor he would find whatever disbursement invoices he had in electronic form.  It is possible some were not scanned and would be in the paper file.[98]

   [98]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 139.

1. On 18 July 2017, Mr Leneham attached a response to the general objections submitting that:

   (a)the objection was a pointless, timewasting exercise;

   (b)it was a gross overstatement that the inclusion of a claim on the bill is evidence of nothing other than the fact there was such a claim;

   (c)at a hearing on 28 September 2016 Arthurs was asked by the Judge if he wished to challenge the cost agreements and he has not done so;

   (d)his reference to section 315 and 316 of the LPA were misleading as each of the cost agreements had a self-contained disclosure provision;

   (e)Arthurs had elected not to challenge any of the cost agreements.[99]

   [99]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 142.

2. On 16 August 2017 the cost assessor via email advised the parties that he had nearly finished the assessment but needed some further documents and an answer concerning a costs questions.[100]

   [100]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 143.

1. Further documents were sent by Quinn & Scattini to the assessor on 16 August 2017.[101] 

   [101]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 144.

1. The assessor via email on 28 August 2017, noted to Quinn & Scattini that there were many disbursements in respect of which no invoice had been produced, he asked for copies of these.  He also asked Arthurs for information about costs order made against him.[102] 

   [102]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 151.

1. Mr Leneham by email on 28 August 2017 advised that he was pretty sure that copies of all invoices in electronic form had been sent to the assessor but he would have one more look and send him anything else he can find,

   “However we do not have a complete copy of the file in electronic form.  If there are any disbursement invoices missing, they were nevertheless held in hard copy on the paper file which was released to Mr Arthurs.  If any disbursement invoices have gone missing, they have gone missing from the hard copy file while it was in the possession of Mr Arthurs or his solicitors… in these circumstances, it will be unjust to disallow any claim for disbursement on the basis that you have not sighted the relevant invoice.”[103]

   [103]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 152.

2. The assessor advised the parties via email on 28 August 2017 of the following:

   (a)        The costs orders made against Arthurs according to Arthurs were caused by the unreasonable way in which the work was carried out by Quinn & Scattini.  “The content of the file indicates to me that the applications may have had no reasonable prospects of success because they were not supported with any affidavit material going to the prospects of success, little on whether the appeal would be rendered nugatory and none of irremediable harm.”

   (b)        If he formed the view the adverse cost orders arose because of unreasonable work then this will affect the assessment.

   (c)        Pursuant to UCPR 720 he considered the assessment should be conducted in private as he was not bound by the laws of evidence and could inform himself the facts in such a way as he considered appropriate.

   (d)        If Quinn & Scattini or Arthurs believed he should carry out the assessment on a different way, he should be advised with the reasons.

   (e)        His preliminary view was that the ongoing disclosure did not by “a considerable margin disclose the total costs that were charged to the applicants in re the District Court appeal in file 135097 (approximately 50 per cent underestimate of total costs), the Supreme Court trial (approximately 100 per cent underestimate) and the Supreme Court special referee appeal in file 140413 (approximately 250 per cent underestimate).”  He asked for submissions on whether there was a failure to properly disclose.

   (f)         He requested a submission from Quinn & Scattini as to whether there could be a claim for costs not evidenced by a memo of time, he gave some instances of that and requested submissions on this point.

   (g)        He noted that there was no evidence he could find on the files that the counsel provided details of their legal costs and billing arrangements in the form of a costs agreement and required disclosure of this.

   (h)        He requested submissions concerning judgments, bankruptcy notice and notice of statutory demands.

   (i)          He requested submissions concerning items 30 to 43 of bill 17843.

   (j)         It was his preliminary position that the stay applications had no reasonable prospects of success and requested submissions on this.

   (k)        He requested further submissions as to the setting aside point.

   (l)          He requested submissions concerning the unsuccessful stay applications.

   (m)       He requested submissions relating to an adjournment on 28 April 2014.[104]

   [104]Affidavit of Russell James Leneham filed 22 December 2017, document 11, pages 153-155.

3. Arthurs provided their submissions by email dated 29 August 2017.[105]

   [105]Affidavit of Russell James Leneham filed 22 December 2017, document 11, pages 156-158.

1. Mr Leneham via email dated 29 August 2017 advised he was unable to comply with the deadline.  “I have made some progress but I still have some substantial work to do.”  He did provide ledgers verifying various disbursements.[106] 

   [106]Affidavit of Russell James Leneham filed 22 December 2017, document 11, pages 161-175.

1. Arthurs via emails dated 30 August 2017 provided some further documents to the assessor.[107] 

   [107]Affidavit of Russell James Leneham filed 22 December 2017, document 11, pages 167-177.

1. Mr Leneham provided some further ledger evidence on 31 August 2017.[108] 

   [108]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 178.

1. On 1 September 2017, Quinn & Scattini wrote to the assessor submitting the following:[109]

   (a)        If Arthurs wanted to allege no work had been done, then a proper proceeding should have been brought with pleadings and particularisation.

   (b)        Arthurs had not applied to set aside the costs agreement.

   (c)        The costs assessor had no jurisdiction to determine issues of un-pleaded alleged negligence.

   (d)        It was not agreed that the assessment should proceed in private on the papers because of the size and complexity of the file and they would like a face to face hearing.

   (e) There were significant hurdles in the applicant’s relying on section 315 of the LPA.

   (f)         The Affinity software was evidence of the relevant entry.

   (g)        There should be no reduction concerning default assessments, the amended statement of claim and statement of claim and the stay applications bearing in mind that Arthurs was an experienced party to litigation.

   [109]Affidavit of Russell James Leneham filed 22 December 2017, document 11, pages 181-183.

2. Arthurs provided further submissions dated 4 September 2017.[110]  He submitted:

   [110]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 184.

   (a)        He consented to the costs assessment being carried out in the prescribed manner.

   (b)        Quinn & Scattini repeatedly failed to refuse to keep Arthurs fully aware or informed of the litigation and did not provide an updated costs disclosure and revised cost estimates following changes to the work described in the costs disclosure document.

   (c) Section 315 of the LPA was thereby breached.

   (d)        Quinn & Scattini did not act competently which led to an increase significantly and unnecessarily in legal fees.

   (e)        If a true and correct original estimate was provided in respect of fees, a different commercial decision would have been reached by Arthurs.

   (f) There was also a breach of section 316 of the LPA.

   (g)        Quinn & Scattini was unable to recover or sustain costs with respect to demonstrated inadvertence, misleading and deceptive conduct or negligence.

   (h)        Quinn & Scattini had not produced contemporaneous notes or other evidence of the actual time spent with respect to perusals.  A four minute cost to claim for a 25 word email cannot realistically be justified.  This should be reduced to one minute.

   (i)          No contemporaneous note or other evidence had been given with respect to conferences with counsel.  Absent such evidence the claim should be refused.

   (j)         A six minute costs claim for a one minute phone call cannot be realistically be justified.  The charge should be limited to one minute.

   (k)        A six minute cost claim for a 25-word email cannot realistically be justified and should be reduced to a minute and absent any evidence the claim should be refused.

   (l)          Quinn & Scattini failed or refused to respond to requests for information to the defendant’s lawyers in matter 140413 which led to an adverse costs order against Arthurs.

   (m)       The details of this litigation were set out at page 108.

   (n)        The stay application by Quinn & Scattini on behalf of Arthurs was refused by McMurdo J and was lost as a result of the negligence of Quinn & Scattini, in particular Mr Kake. 

3. The costs assessor via email dated 5 September 2017[111] noted that in his opinion he had the power to disallow certain costs if they were incurred negligently referring to Dal Pont on the Law of Costs:[112]

   (a)        He was not persuaded that a face to face hearing should be conducted.  Both Arthurs and Quinn & Scattini could adequately respond to request for submissions.

   (b)        Arthurs were pursuing an argument that disclosure was inadequate and he requested further submissions from Quinn & Scattini on this point by the end of the week.

   (c)        “You will recall that you have not produced to me… on this assessment an electronic version of your file on the basis that they will not afford me an efficient method of examining the file and that I should instead rely on the boxes of files produced to me (your email to me dated 21 January 2017 refers).  You know your electronic file better than me – if you think it would have assisted me then it should have been produced when it was called for.  If you now want to produce it please let me have submissions on the point by the end of the week.”

   (d)        The file indicated to him that Quinn & Scattini were not to charge for having default assessment set aside.

   (e)        It appeared that with respect to the applications there was no material put before the court and Arthurs was not warned of the risk of not succeeding and he requested submissions on this point.

   [111]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 191.

   [112]2013 3^rd ed. Lexis Nexis.

4. Quinn & Scattini on 11 September 2017 replied by letter.[113]  In that letter the following was noted:

   [113]Affidavit of Russell James Leneham filed 22 December 2017, document 11, pages 195-203.

   (a)        Nobody presently employed by Quinn & Scattini had personal knowledge of the conduct of the matters and Quinn & Scattini did not have the files.

   (b)        A hearing on the papers restricts the parties in developing and responding to arguments.

   (c)        Arthurs had made a mockery of the procedure by objecting to every item of costs.

   (d)        It would be consistent with the rules of natural justice to gather the parties together.

   (e)        There were numerous letters where Mr Kake gave updated costs estimates.

   (f)         The electronic files were a collection of documents managed by the Affinity software.  The Affinity software was explained.  Affinity takes the time entries and puts them into the bill.

   (g)        They did not contest that the consequences the default assessments ought not to have been charged for.

   (h)        All costs concerning their amended claim and statement of claim should be included.

   (i)          The costs assessor had no authority to “disallow” costs where they have allegedly been incurred negligently.

   (j)         It was impossible for Mr Arthurs to have thought that an application for a stay would have been certain to have succeeded.

   (k)        It is not the lawyers’ fault if the case is not strong enough to succeed.

   (l)          Various emails in this regard were pointed out.

   (m)       There was no additional cost in briefing Mr Cooke of counsel.

5. The assessor on 15 September 2017[114] noted the submissions and noted his decision was to conduct the assessment on the papers.  He considered Arthurs’ allegations of non-disclosure were sufficiently articulated.  The submissions concerning time recording were noted as were the submissions concerning the default assessments, the amended statement of claim and the stay applications.

   [114]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 204.

1. On 2 October 2017 Mr Leneham by email[115] put on record that the allegations by Arthurs of non-disclosure were not sufficiently particularised.

   [115]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 207.

1. On 12 October 2017 the assessor replied to this.[116]  The assessor pointed out:

   “In my opinion the respondent knows the case that it has to meet as regards the allegations of non-disclosure.  The respondent has been given the fair opportunity to provide submissions on the points.  If you do not provide submissions by the end of this week I will conclude my assessment without them.”

   [116]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 208.

2. By letter dated 13 October 2017 Quinn & Scattini provided further submissions as regards the disclosure issues.[117]

   [117]Affidavit of Russell James Leneham filed 22 December 2017, document 11, pages 210-214.

1. On 23 October 2017 the costs assessor’s certificate was filed in the court.

Relevant Statutory Provisions

1. In order to assess the allegation that there was a lack of procedural fairness here one needs to look at the statutory provisions relevant.  This is because the requirements of natural justice depend on the circumstances of the case, the nature of the enquiry, the rules under which the Tribunal is acting and the subject matter that is being dealt with.  What is fair in a given situation depends on the circumstances.[118]

   [118]Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation (1963) 113 CLR 475 at page 504 per Kitto J.

1. It is clear law that a person liable to be affected by an administrative decision to which rules of procedural fairness are to apply must be given the opportunity of putting information or submissions to the decision-maker.[119]

   [119]Kioa v West (1985) 159 CLR 550 at pages 628-629; SZBEL v Minister of Immigration (2006) 228 CLR 152 at page 162; Minister for Immigration and Citizenship v SZGUR (2011) 241 CLR 594 at page 599. Also see Marshall v Cooper Grace and Ward [2015] QDC 205 at [26].

1. Section 341(1) of the LPA provides:

(1)        In conducting a costs assessment, the costs assessor must consider –

(a)        Whether or not it was reasonable to carry out to carry out the work to which the legal costs relate; and

(b)        Whether or not the work was carried out in a reasonable way; and

(c) The fairness and reasonableness of the amount of legal costs in relation to the work, except to the extent that section 340 applies to any disputed costs.

1. Rule 720 of the UCPR provides:

(1)        A costs assessor appointed to carry out a costs assessment is to decide the procedure to be followed on the assessment.

(2)        However, the procedure must be—

(a)        appropriate to the scope and nature of the dispute and the amount in dispute; and

(b)        consistent with the rules of natural justice; and

(c)        fair and efficient.

(3)        Also, if the costs are payable out of a fund—

(a)        the applicant must serve on the person having charge of the fund a notice—

(i)          identifying the fund; and

(ii)        stating that the costs in the costs statement to be assessed are payable out of the fund; and

(iii)        stating when the costs are to be assessed; and

(iv)       containing or attaching any other information the costs assessor requires to be included in or with the notice; and

(b)        the person having charge of the fund may make submissions to the costs assessor in relation to the assessment.

(4)        Without limiting subrule (1) or (2), the costs assessor may decide to do all or any of the following—

(a)        hear the costs assessment in private;

(b)        carry out the costs assessment on the papers without an oral hearing;

(c)        not be bound by laws of evidence or procedure applying to a proceeding in the court;

(d)        be informed of the facts in any way the costs assessor considers appropriate;

(e)        not make a record of the evidence given.

1. UCPR 721 provides:

In assessing costs, a costs assessor must consider the following—

(a)        any other fees and allowances payable to the solicitor or counsel for other items in the same proceeding;

(b)        the nature and importance of the proceeding;

(c)        the amount involved;

(d)        the principle involved;

(e)        the interests of the parties;

(f)         the person who is to pay the costs, or the fund or estate out of which the costs are to be paid;

(g)        the general conduct and cost of the proceeding;

(h)        any other relevant circumstances.

1. I also note that it has been previously held that it is the duty of the costs assessor to consider the whole of the bill.[120]

   [120]Radich v Kenway [2014] QCA 301 at [36].

Conclusion on the procedural fairness point

1. It is my opinion bearing in mind the relevant statutory provisions and the evidence to which I have referred, procedural fairness was accorded here.  The assessor, in my view, took a number of reasonable steps here.  Firstly, he wrote to Quinn & Scattini asking for suggestions as to how the matter might be resolved.  Secondly, he invited Quinn & Scattini to inspect the boxes delivered.  Thirdly, he informed the law firm that if it did not do so, he would proceed on the basis that he had a full copy of the files.  Fourthly, he asked Quinn & Scattini to provide electronic data including all emails which Quinn & Scattini declined to do so.  Finally, he reached factual findings on all available information. 

1. In addition, he provided Quinn & Scattini the full opportunity to make submissions regarding to the matters raised by way of objection.[121]  In my view the complaints raised by Arthurs were sufficiently articulated so that meaningful responses could be given.[122]

   [121]In this regard I refer to the assessor’s correspondence see footnotes 87, 107 and 114 above.

   [122]In this regard I specifically refer to Arthurs’ complaints see footnotes 66, 81 and 102 above.    

1. Contrary to the submissions of Quinn & Scattini in my view they were sufficiently apprised of the non-disclosure issues, the 6 minute point, the timing issues, the absence of document issues, the Affinity issues, the negligence issues and the payment issues.

1. In my view, the assessor had a broad discretion as to how to conduct this assessment.[123]  It is my view that the resolution he came to was a sensible and practical way in which to proceed. 

   [123]UCPR 720 (2)(c).

1. In my view it has not been shown on the balance of probabilities that there was a denial of procedural fairness here.  The fact is Quinn & Scattini ought to have gone to inspect the files as offered to by the assessor, to check whether relevant documents were or were not in the files delivered. They had that opportunity. They had the opportunity to put their case on each item and the general points.     

1. In those circumstances, I do not consider any error occurred in the general approach of the assessor in this case and dismiss this as a ground of review.

1. Further or alternatively, by reason of the findings I have made I dismiss Quinn & Scattini’s arguments that the assessment was not fair.[124]  The concept of “unfairness” has been said to “lack precision and involves an evaluation of the circumstances”.[125]

   [124]See respondent’s grounds for review of the assessment filed 17 May 2018, document 33, at [1] to [13].

   [125]Swaffield v R (1998) 192 CLR 159 at [53].

1. Further, I dismiss Quinn & Scattini’s arguments that the assessment procedure was not appropriate.[126] 

   [126]See the respondent’s grounds for review of the assessment filed 17 May 2018, document 33, at [14]-[17].

1. I also dismiss Quinn & Scattini’s argument that the assessment procedure was not efficient.[127]

   [127]UCPR 720 (2)(c). See the respondent’s grounds for review of the assessment filed 17 May 2018, document 33, at [23]-[28].

1. In so far as the oral hearing is concerned, as I have already noted, there was a very broad discretion as to how the assessment was to be conducted. The assessor had an explicit discretion under rule 720 of the UCPR to hear the assessment in private and without an oral hearing. The assessor considered submissions on this point but despite the submissions the assessor decided to proceed with the determination on the papers and advised Quinn & Scattini accordingly.

1. In paragraph 46 of the assessor’s reasons he set out the basis for not considering an oral hearing was appropriate namely:

   (a)        There were about 3,000 items in dispute, it was his experience that oral hearings proceeded at a pace of 250 items per day so that an oral hearing would lead to a very long assessment.

   (b)        In his experience there was no utility in an oral hearing where the solicitor wanting to attend (Mr Leneham) was unfamiliar with the litigation.

   (c)        The parties could provide written submissions if they chose to do so. 

2. Additionally, it was open to Quinn & Scattini to copy the files if they wish to do so and further, Quinn & Scattini could have responded to the notice of issues delivered by Arthurs on 28 March 2017 but did not do so. The costs assessor invited submissions on this.  In my opinion, the costs assessor was a qualified one.  He was clearly capable of assessing the files.  The clients were self-represented and would have been of minimal assistance in any oral hearing and Quinn & Scattini for its part could not offer anybody with first-hand experience.[128]  An oral hearing would have invited a practitioner with no personal experience of the file to make submissions over a lengthy period about matters which the assessor could resolve especially after the invitation to make written submissions.

   [128]See letter from Mr Leneham dated 11 September 2017; Affidavit of Russell James Leneham filed 22 December 2017, document 11, pages 195-203.

1. In my view, applying the relevant legal principles, in particular that which was stated by Ann Lyons J in Hannover International v CW Robson,[129] the applicant has not satisfied the onus that the assessor conducted the assessment in a way which is manifestly wrong. 

   [129][2012] QSC 47.

1. Quinn & Scattini referred me to the House of Lords’ decision of R (West) v Parole Board[130]  in its submissions[131] and submitted this case applied by analogy.  In my respectful view, West is distinguishable.  First, the House of Lords was concerned with the application of the Human Rights Act.  Secondly, the case was concerned with the liberty of the subject.[132] Also in West, it was found the parole board could not properly reject West’s explanation without hearing from him.[133]  That is not the case here.  It is my view Quinn & Scattini were given the full opportunity of making submissions justifying each item. 

   [130][2005] 1 WLR 350.

   [131]Quinn & Scattini’s submissions filed 16 April 2018, document 28, [11].

   [132]Rights in this area are jealously guarded see Williams v R (1986) 161 CLR 278 at page 292 and in R (West) v Parole Board [2005] 1 WLR 350 at [30].

   [133]R (West) v Parole Board [2005] 1 WLR 350 at [45].

1. Quinn & Scattini also referred to the decision of Chandra v QBCC[134]. Again, in my respectful view, that case is distinguishable.  In that case the senior member dismissed Mr Chandra’s application for leave to appeal without hearing from him in any meaningful way.[135]  In this case, the assessor in my opinion, gave the full opportunity for submissions to be made and he considered them.[136] 

   [134][2014] QCA 335.

   [135]Chandra v QBCC [2014] QCA 335 at [41]-[43].

   [136]See cost assessor’s reasons filed 12 March 2018, document 22, at [12]-[50].

1. As Long SC DCJ said in Naidoo v State of Queensland,[137] rule 720 does not express a particular preference for the procedure to be adopted.

   [137][2015] QDC 68 at [56].

1. With respect to the allegation of non-efficiency, it is my view that whilst it is true Arthurs delivered a document of 1,083 pages on 28 March 2017 objecting to every item, such a course is not prohibited.  It is for the assessment procedure to be efficient not the client.  Quinn & Scattini do not suggest the client was not entitled to challenge each item.  The approach taken by Arthurs permitted Quinn & Scattini to comment on each item but Quinn & Scattini declined that invitation.[138]  The assessor found that in circumstances where the client was self-represented it was his duty to consider all items in the bills identified.  In my view this is an approach supported by authority.[139] 

   [138]See cost assessor’s reasons filed 12 March 2018, document 22, at [32] and [33].

   [139]See cost assessor’s reasons filed 12 March 2018, document 22, at [125] and Radich v Kenway [2014] QCA 301 at [13] and [36].

1. In Radich v Kenway[140] it was noted that a process of delivery of notices of objection and for submissions in response is a fair and efficient way of dealing with these matters.

   [140][2014] QCA 301 at [34].

1. Having considered the general matters of complaint raised, I now specifically turn to various heads of challenge made by Quinn & Scattini.[141]

Covering the whole file issue/Affinity - Page No 1 items 2 and 4

[141]See pages 1 of 152 of the attachment to the respondent’s grounds for review of the assessment filed 17 May 2018, document 33.

Submissions

1. Quinn & Scattini have submitted that the assessor in this case did not assess the entire file.[142] It is also submitted that there was an “Affinity” entry which was evidence of the claim. They also submit that the Affinity entries should be treated as a “book of account” under the provisions of the Evidence Act 1977 (Q).[143]

   [142]See Exhibit 1, pages 1 and 2. This relates to the issues covered List No 1 (page 1 item 2) and List No 4 (page 1 item 4).

   [143]Sections 83 and 84. See Quinn & Scattini submissions filed 16 April 2018, document 28, at [19]-[23].

1. Arthurs on the other hand submits that there was no demonstrable error taken in the approach of the assessor[144]. It submits there was ample time for the documents to be located if they existed and there was good reason to suspect the accuracy of the Affinity entries[145].

   [144]Exhibit 3, Arthurs’ submissions dated 20 July 2018 at [8].

   [145]Exhibit 3, Arthurs’ submissions dated 20 July 2018 at [29].

Discussion

1. The following findings and evidence are relevant.

1. The assessor in his reasons stated:[146]

   “My proposed direction that the respondents send me hard copies of its files was met by the respondent writing to me on 25 October 2015 and 5 November 2016 to the effect that the solicitor who had had the conduct of the files was no longer employed by the respondent and that that person had sent the files in 32 large archive boxes to the applicant’s new solicitors on or about 11 September 2015 and had not kept copies.  The respondent said that it had however retained and not sent to the applicant’s new solicitors, copies of file names and letters that it considers belong to it and not to the applicants.”

   [146]Cost assessor’s reasons filed 12 March 2018, document 22, at [17].

2. On 22 November 2016 the assessor wrote to Quinn & Scattini noting:[147]

   “A practical difficulty in me assessing the content of the 32 boxes is that you, Russell, will need to first satisfy yourself that the content of the boxes is the same as when you handed them to JHK.  Do you have a suggestion as to how that difficulty can be overcome?”

   [147]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 53.

3. On 22 November 2016 Quinn & Scattini provided clarification as to what parts of its files it still had in its possession by stating it had sent to Arthurs’ new lawyers, all of them saved two archive boxes being “the documents that belong to QS” which are “invoices and related documents, original file notes and internal emails and the trial bundle in BS1897-13.”[148]

   [148]Costs assessor’s reasons filed 12 March 2018, document 22, at [20].

1. It is also to be noted that on 23 November 2016 the assessor had written to Quinn & Scattini asking for inter alia “incoming and outgoing emails stored on [the law firm’s] data base”.[149]

   [149]Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 56.

1. Mr Leneham responded on 18 January 2017:

   “We have sent you all the hard copies of emails that we have.  No doubt there are many more hard copies in the file which is in the possession of Mr Arthurs.  Having looked at the electronic files tonight, I estimate that it would take many dozens of hours for us to go through the electronic files and print out all the emails one by one.  Given that we have already printed hard copies that would be in the file, we respectfully submit that it is impractical and unfair to require us to perform that exercise again.”

2. Quinn & Scattini delivered the material in its possession to the assessor on 4 January 2017.[150]

   [150]Costs assessor’s reasons filed 12 March 2018, document 22, at [21].

1. On 19 January 2017 the assessor directed Arthurs to deliver to him the 32 boxes of documents.[151]  Arthurs delivered 32 boxes as well as USB stick to him in February-March 2017.[152]

   [151]Costs assessor’s reasons filed 12 March 2018, document 22, at [22].

   [152]Costs assessor’s reasons filed 12 March 2018, document 22, at [27]-[28].

1. On 9 March 2017 the assessor wrote to Quinn & Scattini[153] noting:

   “Russell – if you want to inspect the boxes of documents delivered to me by Michael to ascertain whether do or do not contain a full copy of the files, please let me know within seven days.  If you do not want to inspect then I intend to proceed on the basis that the boxes of documents and the USB stick do in fact contain a fully copy of the files.”

   [153]Costs assessor’s reasons filed 12 March 2018, document 22, at [29] and the Affidavit of Russell James Leneham filed 22 December 2017, document 11, page 110.

2. The assessor noted that Quinn & Scattini did not “accept the invitation” and he proceeded on the basis that the boxes contained the full files.[154]

   [154]Costs assessor’s reasons filed 12 March 2018, document 22, at [29].

1. The assessor appears to have satisfied himself that he had a complete file because at [127] of the reasons he held:

   “The boxes of document appear to comprise the whole of the files in the sense that they contain client documents, disbursements, and trust ledgers, invoices, correspondence files etc.”

2. Quinn & Scattini do not allege in their material that they responded to the last emails from the assessors in particular the email dated 9 March 2017.

1. Further there was an email dated 5 September 2017 from the assessor to Mr Leneham[155] which stated:

   “You’ll recall that you have not produced to me cc Michael on this assessment an electronic version of your file on the basis that they will not afford me an efficient method of examining the file and I should instead rely on the boxes of files produced to me (your email to me dated 21 January 2017 refers).  You know your electronic file better than me – if you think it would have assisted me then it should have been produced when it was called for.  If you now want to produce, please let me have submissions on the point by the end of the week.”

   [155]Affidavit of Russell James Leneham filed 22 December 2017, document 33, page 191.

2. There was no response to this.

1. It is my finding that no error can be taken in the approach concerning the “full file” point.

1. I find the assessor took a number of entirely appropriate steps namely:

   (a)        First, he wrote to the law firm asking it for suggestions on how this might be resolved.

   (b)        Second, he invited the law firm to inspect the boxes delivered.

   (c)        Third, he informed the law firm that if it did not do so he would proceed on the basis that he had a full copy of the files.

   (d)        Fourth, he asked the law firm to provide electronic data especially all emails – but the law firm declined to do so.

   (e)        Fifth, the assessor reached a factual finding on the available information that the boxes did, indeed, appear to constitute the whole of the file.

2. I also consider the assessor gave full and justifiable reasons on this point.

   (a)        He noted that no confidence could be relied on concerning Affinity.[156]

   (b)        The assessor was left with a situation where the legal practitioner handling the file was no longer working for the firm.[157]

   (c)        He was hampered by the fact there were very few typed memos.[158]

   (d)        He noted that even if a memo was produced he considered he still had to form a view as to how much time should reasonably be spent.[159]

   [156]Costs assessor’s reasons filed 12 March 2018, document 22, at [49], [62], [126], [128c] and [136]. These are set out below.

   [157]Costs assessor’s reasons filed 12 March 2018, document 22, at [17] and [44].

   [158]Costs assessor’s reasons filed 12 March 2018, document 22, at [63].

   [159]Costs assessor’s reasons filed 12 March 2018, document 22, at [62a].

3. I consider the assessor acted consistently with section 341 of the LPA and UCPR 720- he determined the fairness and reasonableness of the costs charged. He also in some cases even where there was no memo allowed a claim if it was reasonable.[160]

   [160]See e.g. Matter 135097 invoice 17838 item 13; invoice 17540 item 20 and matter 143226 invoice 20142 items 1, 2 and 3. 

1. In my view Quinn & Scattini have not proved on the balance of probabilities there was any error taken in the approach by the assessor.

1. Quinn & Scattini failed to inspect the documents held by the assessor to work out which ones he did not have.   

1. In those circumstances I uphold the cost assessor’s findings concerning list numbers: 2, 5, 6, 7, 8, 9, 10, 13, 14, 15, 16, 17, 18, 19, 21-23, 26-29, 33, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 51, 54, 55, 60, 64, 65, 66, 74, 75, 84, 86, 101, 102, 168, 209, 241, 247, 255, 263, 271, 286, 287, 290, 291, 293, 294, 411, 429, 430, 431, 499, 631, 633, 738, 739, 745, 746, 747, 748, 749, 750, 752, 761, 799, 800, 805, 809, 869, 881, 903, 1012, 1014, 1017, 1019, 1024, 1034, 1035, 1038, 1041, 1043, 1096, 1100, 1129, 1135, 1137, 1143, 1144, 1154, 1156, 1210, 1175, 1163, 1164, 1165, 1249, 1268, 1269, 1289, 1291, 1293, 1296, 1308, 1311, 1322, 1323, 1326, 1364, 1389, 1390, 1391, 1397, 1398, 1404, 1413, 1420, 1423, 1473, 1474, 1481, 1517, 1537, 1539, 1558, 1631, 1701, 1820, 1823, 1840, 1846, 1865, 1888, 1898, 1905, 1927, 1945, 1951, 1967, 1968, 1970, 1972, 2023, 2030, 2039, 2125, 2287, 2408, 2427, 2498, 2537, 2551, 2621, 2692, 2701, 2702, 2703, 2706, 2749 and 2752.

1. Interrelated to the above is the “Affinity” issue. Quinn & Scattini submit that the assessor should have “fully” relied on the Affinity entries.[161]

   [161]Respondent’s ground for review of the assessment, document 33, page 1 of 152. Exhibit 1 at [2].

1. In those circumstances I am not satisfied that Quinn & Scattini has demonstrated any error in the approach of the costs assessor based on the evidence before him.

1. This is particularly considering there were a number of costs agreements referring to two minute increments and Arthurs alleged that Mr Kake said there was no change to the previous agreements.

1. I also note that Judge McGill SC in Bethscheider v CMC Lawyers Pty Ltd[230] took the view that a construction of the costs agreement was not that a six minute unit is the minimum amount chargeable but it was the way in which the time was spent on a file is calculated. My reading of this costs agreement however is different to His Honour’s view.

   [230][2018] QDC 133.

1. I also do not consider that the availability of an application to set aside the costs agreement debarred the costs assessor from considering this issue. Indeed the provisions of the LPA specifically allowed him to.

1. I dismiss this ground of review.  

1. This ruling relates to list numbers: 242, 243, 246, 248, 251, 253, 256, 259, 272, 285, 287, 288, 289, 290, 292, 293, 294, 295, 296, 297, 298, 299, 305, 306, 308, 309, 310, 312, 315, 316, 317, 318, 320, 322, 323, 324, 325, 327, 328, 329, 334, 336, 337, 338, 339, 340, 344, 345, 347, 349, 355, 356, 358, 359, 360, 361, 364, 365, 366, 367, 376, 377, 379, 380, 381, 382, 385, 386, 387, 391, 392, 393, 395, 398, 403, 404, 407, 408, 409, 410, 412, 413, 415, 419, 420, 421, 422, 423, 424, 425, 426, 427, 432, 435, 436, 439, 441, 442, 444, 445, 447, 448, 450, 451, 452, 453, 454, 457, 459, 460, 461, 462, 463, 466, 468, 469, 470, 471, 472, 473, 476, 477, 478, 479, 480, 481, 482, 483, 484, 486, 489, 490, 492, 493, 494, 496, 498, 500, 501, 503, 504, 505, 507, 509, 510, 511, 513, 515, 518, 519, 520, 521, 522, 524, 525, 527, 530, 533, 535, 536, 537, 539, 540, 541, 542, 543, 545, 547, 549, 550, 551, 552, 553, 554, 559, 560, 561, 562, 563, 565, 567, 568, 569, 570, 572, 575, 576, 583, 584, 585, 589, 590, 591, 592, 593, 594, 595, 596, 597, 599, 600, 601, 602, 603, 604, 605, 607, 608, 609, 612, 615, 616, 618, 619, 622, 623, 624, 625, 627, 632, 634, 636, 637, 638, 640, 641, 643, 645, 653, 656, 658, 663, 664, 667, 673, 674-678, 680, 684, 686, 687, 688, 689, 694, 696, 698, 699, 700, 702, 704, 706, 709-713, 715, 804, 805, 806, 807, 814, 816, 820, 821, 822, 824, 828, 829, 830, 831, 835-841, 843-846, 849, 852, 859, 860, 863, 864, 867, 869, 870, 871, 875, 877, 878, 880, 881, 882, 883, 885, 886, 887, 889, 890, 893, 894, 895, 896, 897, 898, 900, 901, 903, 906, 907, 909, 913, 916, 920, 922, 923, 924, 925, 927, 929, 934, 937-943, 946, 949, 953-956, 1159, 1162, 1166, 1167, 1169, 1170, 1171, 1172, 1173, 1174, 1175, 1176, 1177, 1178, 1180, 1181, 1182, 1183, 1189, 1204-1206, 1209,  1211, 1213, 1216, 1217, 1218, 1220, 1221, 1223, 1226, 1229, 1230, 1231, 1232, 1233, 1234, 1235, 1237, 1239, 1400, 1401, 1402, 1403, 1406, 1407, 1408, 1409, 1411, 1412, 1414, 1415, 1419, 1420, 1421, 1422, 1426, 1427, 1428, 1429, 1430, 1431, 1433, 1434, 1435, 1440, 1441, 1443-1452, 1459, 1460, 1461, 1467, 1468, 1469, 1471, 1472, 1475, 1477, 1478, 1480, 1482, 1484, 1485, 1486, 1487, 1488, 1493, 1494, 1495, 1496, 1497, 1498, 1499, 1500, 1501, 1502, 1503, 1504, 1505, 1506, 1507, 1509, 1510, 1511, 1512, 1513, 1514, 1515, 1516, 1518, 1520, 1527, 1529, 1530, 1531, 1532, 1533, 1534, 1535, 1536, 1540, 1541, 1542, 1543, 1548, 1549, 1550, 1553, 1563, 1564, 1566, 1567, 1569, 1570, 1574, 1575, 1580, 1581, 1584, 1586, 1587, 1591, 1592-1599, 1601, 1618, 1620, 1621, 1622, 1624, 1625, 1637, 1639, 1640, 1645, 1647, 1652, 1657, 1661, 1667, 1668, 1669, 1670, 1672, 1673, 1674, 1681, 1682, 1683, 1686, 1687, 1688, 1690, 1691, 1692, 1693, 1695, 1696, 1700, 1709, 1710, 1711, 1712, 1713, 1715, 1717, 1718, 1722, 1724, 1725, 1726, 1727, 1728, 1729, 1732, 1733, 1734, 1737-1744, 1747-1751, 1753, 1754, 1756, 1759, 1761-1765, 1767, 1773-1775, 1777-1780, 1784-1786, 1788-1795, 1797-1806, 1808-1812, 1814, 1815, 1816, 1819, 1821, 1822, 1827, 1828, 1829, 1831, 1832, 1837, 1838, 1839, 1844, 1847, 1851, 1860, 1861, 1864, 1866, 1875, 1886, 1887, 1889, 1891, 1892, 1893, 1894, 1896, 1897, 1901, 1904, 1908, 1911, 1913-1924, 1927-1929, 1931, 1932, 1934, 1936,-1941, 1943, 1946-1950, 1952, 1953, 1955, 1956, 1958-1962, 1965, 1966, 1969, 1971, 1972, 1973, 1978, 1979, 1980, 1982, 1984, 1985, 1986, 1995, 1996, 1997, 1998-2004, 2009, 2010, 2012-2015, 2021, 2024, 2026, 2027, 2032, 2034, 2045, 2047-2054, 2056, 2057, 2059, 2060, 2061, 2065-2068, 2073-2083, 2084, 2086, 2088, 2091, 2092, 2094, 2097, 2098, 2101-2104, 2107-2113, 2115, 2116, 2118, 2121, 2122, 2123, 2124, 2126-2135, 2137, 2138, 2140-2143, 2145-2150, 2152-2157, 2159, 2163, 2164, 2170-2171, 2173, 2175, 2176, 2178, 2179, 2181-2188, 2191, 2193, 2194, 2195, 2198-2201, 2203, 2205, 2206, 2207, 2211, 2212, 2213, 2214, 2215, 2217, 2218, 2219, 2221, 2224, 2225, 2226, 2227, 2228, 2230, 2233-2255, 2257-2258, 2261-2268, 2270-2274, 2277, 2278, 2281-2284, 2288, 2289, 2291, 2293, 2295, 2297, 2299-2305, 2307-2312, 2316, 2320, 2321, 2323, 2328-2335, 2337, 2339, 2341, 2342, 2343, 2344, 2345, 2349, 2350, 2353-2360, 2362-2364, 2371-2374, 2376-2377, 2379, 2385-2388, 2390, 2391, 2393, 2394, 2395, 2397-2399, 2405, 2409-2411, 2415, 2425, 2426, 2428, 2429, 2432-2444, 2446-2447, 2460, 2471, 2477, 2478, 2480, 2481, 2482, 2485-2492, 2494-2498, 2501, 2504-2508, 2518, 2520, 2523, 2525, 2531-2536, 2538, 2552, 2553, 2555-2561, 2563, 2568, 2569, 2574, 2579, 2581, 2584, 2586, 2589, 2601, 2602, 2605, 2606, 2607, 2609, 2610, 2616, 2618, 2620, 2621, 2637, 2641, 2643, 2645, 2646, 2651, 2658, 2659, 2662-2672, 2678, 2681 and 2684.

Non-disclosure as to the level of costs

1. An ancillary point to the six minute point is the issue of disclosure concerning the level of cost.

Submissions

1. In this case, Quinn & Scattini submit with respect to items numbered 958-2687[231]  that the assessor incorrectly refused these claims. It submits there were attempts made by Mr Kake to make disclosure. It submits generally that the costs assessor erred in his findings.[232]  

   [231]Respondent’s grounds for review of assessment filed 17 May 2018, document 33, pages 52-151 of 152.

   [232]Respondent’s grounds for review of assessment filed 17 May 2018, document 33, at [18]-[28].

1. On the other hand, Arthurs submits[233] that there was no ongoing disclosure by Quinn & Scattini as required by section 315 of the LPA, the assessor’s reasons were sound, no error can be shown and the challenge should be dismissed. It relies on [141] of the costs assessor’s reasons in particular.

   [233]Exhibit 3, Arthurs’ submissions dated 20 July 2018 at [44].

Discussion   

1. The assessor noted at paragraph 40 of his reasons[234] that he asked both Quinn & Scattini and Arthurs to provide submissions on whether Quinn & Scattini had complied with its obligations as to ongoing disclosure and why Quinn & Scattini should not be held to its estimates, particularly bearing in mind the considerable difference in costs i.e. the total costs charged to Arthurs in the District Court appeal file 10357 were a 50 per cent underestimate of total costs, the Supreme Court trial a 100 per cent underestimate and the special referee process of appeal an approximate 250 per cent underestimate.  He noted he asked for submissions on whether Quinn & Scattini had complied with its ongoing obligations as to the disclosure. 

   [234]Costs assessor’s reasons filed 12 March 2018, document 22, at [40].

1. The assessor noted at paragraph 41[235] that Quinn & Scattini had provided him with relevant submissions. 

   [235]Costs assessor’s reasons filed 12 March 2018, document 22, at [41].

1. At paragraph 42[236] the assessor noted that on 4 September 2017 Arthurs provided further submissions making it clear that one of their complaints was Quinn & Scattini’s failure to make proper initial and ongoing disclosures. 

   [236]Costs assessor’s reasons filed 12 March 2018, document 22, at [42].

1. At paragraph 43 the assessor by email notified Quinn & Scattini that this was clearly an issue to be considered.[237] 

   [237]Costs assessor’s reasons filed 12 March 2018, document 22, at [43].

1. By way of reply, the assessor noted at paragraph 44[238] that Quinn & Scattini sent an email providing submissions that:

   (a)        No one in the office had personal knowledge of the conduct of the matter.

   (b)        It would not provide submissions regarding ongoing disclosure obligations until particulars were provided.

   (c)        The Affinity software was an entry of time.

   (d)        The default assessments ought not to have been charged.

   (e)        It would not provide submissions concerning a costs order.

   (f)         Mr Arthurs must have known the stay application might not succeed.

   [238]Costs assessor’s reasons filed 12 March 2018, document 22, at [44].

2. At paragraph 47[239] the assessor disagreed with Quinn & Scattini’s submissions and ultimately, Quinn & Scattini did provide submissions on disclosure on 12 October 2017 which he considered.

   [239]Costs assessor’s reasons filed 12 March 2018, document 22, at [47].

1. At paragraph 115 the assessor found[240] that it was difficult to understand and follow the written costs estimates provided by Quinn & Scattini to Arthurs.  On only a few occasions in its correspondence to Quinn & Scattini use words like “additional costs” or “extra” or “unexpected costs”. 

   [240]Costs assessor’s reasons filed 12 March 2018, document 22, at [115].

1. He noted at paragraph 116[241] that he sent an email to Quinn & Scattini to the effect that his preliminary opinion was that the ongoing disclosure was not sufficient and he requested submissions on this point.  It was his view Quinn & Scattini knew which case they had to meet. 

   [241]Costs assessor’s reasons filed 12 March 2018, document 22, at [116].

1. Ultimately, at paragraph 132[242] the assessor found:

   “This is an objection relating to the respondent having allegedly failed to comply with its obligations under sections 308(1)(f), 315 and 317 of the LPA and rather vague objections relating to disclosure generally. In my opinion para 34 of the respondent’s “standard terms” satisfies the requires of s 308(1)(f). Section 315 contains the obligation to provide ongoing disclosure. For the reasons expressed above, it is my opinion that the respondent’s attempts to provide ongoing disclosure were frequently incoherent and not satisfactory. Section 317 relates to the content of progress reports. The emails dated 25 March 2014, 11 April 2014, 9 May 2014, 27 June 2014, 21 July 2014, 14 August 2014, 29 September 2014 and 4 March 2015 were progress reports. Each described the costs estimates and facts contained within them as ‘providing an updated cost estimate in all of your matters considering their present state and to request further funds as interim step to ensure that we are able to continue advancing your matters in the most cost effective manner and bring them to the most favourable resolution possible’. In my opinion the progress reports mostly gave a written report on the progress as required by s 317(1)(a) but they failed to provide a written report of the legal costs incurred by the client to date or since the last bill as required by s 317(1)(b).”

   [242]Cost assessor’s reasons filed 12 March 2018, document 22, at [132].

2. I have already referred to the cost assessors’ particular findings with respect to the disclosure issue early in this judgment.

1. Whilst the assessor found that there were regular monthly emails to the applicants on 25 March 2014, 11 April 2014, 9 May 2014, 27 June 2014, 21 July 2014, 14 August 2014, 29 September 2014, and 4 March 2015,[243] the costs assessor noted he could not see any costs agreements entered into between counsel and Quinn & Scattini, nor did he see any correspondence between Quinn & Scattini and Arthurs regarding the terms and conditions of counsel’s retainer.[244]  

   [243]Cost assessor’s reasons filed 12 March 2018, document 22, at [61].

   [244]Cost assessor’s reasons filed 12 March 2018, document 22, at [63B].

1. He did not see any emails from the solicitor to the barrister asking for fee disclosure, emails from the barrister to the solicitor providing disclosure, or emails from the solicitor to Arthurs asking Arthurs to agree to the barrister’s disclosure and subsequent copies of counsel’s invoices.  He did not see any evidence that Quinn & Scattini sought obtained and passed on fee disclosures from counsel.[245]  

   [245]Cost assessor’s reasons filed 12 March 2018, document 22, at [63C].

1. As at 25 March 2014, an email was sent by Quinn & Scattini to Arthurs but there was no variation concerning the $50,000 cost estimate for the Heaysman matter.[246]  A second email was sent by Quinn & Scattini to the applicants on 25 March 2014, which noted at page 1 “we had made no allowance in the estimate for the hearing of an application to strike out the counter-claim” and an additional $35,090.00 ought to be allowed for costs to strike out the counter-claim i.e. a total of $85,060.00.[247]  A further email was sent to Arthurs on 11 April 2014, estimating the costs of briefing counsel but not varying the estimate of $85,060.00.[248]

   [246]Cost assessor’s reasons filed 12 March 2018, document 22, at [65].

   [247]Cost assessor’s reasons filed 12 March 2018, document 22, at [66].

   [248]Cost assessor’s reasons filed 12 March 2018, document 22, at [67].

1. Further emails were sent on 27 June 2014 and 21 July 2014 not varying the cost estimate.

1. With respect to file number 140413 the assessor made the same comments as he made concerning file number 135097.[249]

   [249]Cost assessor’s reasons filed 12 March 2018, document 22, at [82].

1. The costs assessor noted that on 29 January 2014, Quinn & Scattini sent a fresh costs agreement to the applicants estimating total costs between $50,000 to $100,000.  The assessor formed the opinion that $50,000 to $100,000 as an estimate was unreasonably optimistic.  This involved a three day Supreme Court trial of a joint venture dispute with multiple parties, all of whom were separately represented, where the main assets of the joint venture were dozens of houses and by third party home owners in varying stages of construction and the luminous documentation should be anticipated.  The assessor found that solicitor ought to have estimated three to five days on liability alone and allowed at least one day’s preparation for each day of the trial.  Including counsel’s fees this should have been an estimate of between $186,000 and $236,000.[250]  Upon reviewing the files on 16 January 2014, solicitor and counsel realised within a week that the statement of claim would need to be amended and an application should be made to adjourn the trial.  An additional $10,000 to $20,000 should have been allowed for those steps.  Further, additional costs of $50,000 should have been allowed on the basis the action became a supervised case requiring a number of supervised case reviews and $50,000 to $100,000 for the cost of an incidental to the court appointed trustee or special referee assessing quantum in respect of the houses under construction.  The assessor found “the initial total estimate given on 29 January 2014 really ought to have been on the region of $300,000 to $400,000 plus GST if Mr Cooper QC and Mr Bowden were to be engaged.”[251] 

   [250]Cost assessor’s reasons filed 12 March 2018, document 22, at [83B].

   [251]Cost assessor’s reasons filed 12 March 2018, document 22, at [83B].

1. The assessor then analysed various correspondence concerning the matter and noted at [94]:

   
   
   

   “The trial went for five days between 2 June 2014 and 6 June 2014… at the conclusion of the trial the respondent’s invoices totalled $345,994.71 (add detailed bills number 1-19) which exceeded the original 29 January 2014 estimate of $50,000 to $100,000 by approximately $245,000 and exceeded the 6 March 2014 estimate of $135,090 by approximately $200,000 and  then the $156,565 for a five day trial estimate by approximately $189,000. The component of $345,994.71 that was billed for solicitor’s fees, service fee and miscellaneous disbursements was approximately $171,652.35.”

1. The assessor noted counsels’ fees totalled $177,237.

1. At paragraph 97 the assessor noted:

   “In my opinion the disparity between the costs estimates of $50,000 to $100,000, $135,090 and $156,565 and the end cost of $345,994.71 is serious and I have on page 47 of these reasons considered whether to reduce the cost claimed in a sum proportionate to the seriousness of the failure to disclose.  In particular I have considered whether I should hold the respondent’s entitlement to costs in respect of trial preparation and the trial to no more than its estimate of $156,565.”[252]

   [252]Cost assessor’s reasons filed 12 March 2018, document 22, at [97].

2. With respect to the appeal and special referee, the assessor at paragraph 114[253] noted

   “Between the end of the trial and the date the respondent’s instructions came to an end in August 2015 the respondent billed the applicants $131,694.73 for solicitor’s fees (and professional fees, service charges, miscellaneous disbursements and GST and bills 20-41) for work carried out in the appeal, the special referee process, the stay applications and the assessments of costs.  This is to be compared with the cost estimates for solicitor fees that were given up to 4 March 2015 of $7,700 for solicitor’s fees for the appeal, $20,900 (special referee process), $5,500 (stay applications) and $4,400 (cost assessments).  I cannot see any evidence that the cost estimates were ever updated after 4 March 2015.  The estimates as at 4 March 2015 for solicitor’s fees totalled $38,500.  The $131,694.73 exceeded the $38,500 estimate by $93,194.73 and it needs to be borne in mind that the special referee process had hardly started before it was put on hold by the parties after the successful appeal and never resumed.  In my opinion the disparity between the cost estimate of $38,500 and the end sum of $131,694.73 is serious and I have on page 47 of these reasons considered whether to reduce the costs claimed in a sum proportionate to the seriousness of the failure to disclose.  In particular I have considered whether I should hold the respondent’s entitlement to costs in respect of the special referee process and the appeal to no more than its estimate of $38,500.”

   [253]Cost assessor’s reasons filed 12 March 2018, document 22, at [114].

3. Ultimately paragraphs 140 to 143, the assessor found there was inadequate disclosure. 

1. The assessor noted at paragraph 149:

   “In respect of file 140413 those three sums totalled $342,122.61[254]. That total exceeds the $156,565 plus $38,500= $195,065 estimates given by the respondent to the applicants in respect of this file by $147,057.61. I have taken into account the fact that the costs agreements described the initial estimate and those that would follow as “estimates only and we are not bound by those estimates”, that the solicitor made efforts to provide ongoing disclosure albeit in a form that it was unclear. I take into account that the $78,311 and $2,918= $81,229.02 that I have allowed for solicitor’s fees and service charges is not too far removed from the sums of $41,470 (para 86 above) and $28,600 (paras 106 and 108)= $70,070 that the respondent estimated for solicitor’s fees. For the above reasons I’ve not under section 316(4) LPA further reduced the solicitor’s costs that have been allowed.  However if my assessment of the solicitor’s costs for file 140413 had been higher than the sums that had been allowed, I would have reduced the sum allowed to the sum that has been allowed, on the basis that such reduction would be proportionate to the seriousness of the failure to provide ongoing disclosure.”[255]

   [254]For costs, service charges and disbursements.

   [255]Cost assessor’s reasons filed 12 March 2018, document 22, at [149].

2. It is my opinion based on the evidence placed before the assessor and indeed in this court, the disclosure was inadequate. I consider there was a requirement to provide written updates on revised cost estimates. This is bearing in mind the strict disclosure requirements contained in the LPA. Again I note Mr Kake was not called to give evidence on this point nor was Mr Arthurs cross examined.

1. It is my opinion no error can be shown in the approach of the assessor and I dismiss the ground of review.

1. This ruling relates to list numbers 958-2687.

Conclusion

1. I am conscious I have not dealt with all of the matters raised and if the parties cannot settle the remaining matters the matter can be relisted for further hearing.

1. For example Quinn & Scattini submit that the assessor erred in disallowing some disbursements. For example Mr Leneham swears that there was a reduction of $12,292.50 for counsel’s fees on the basis that it was already claimed and allowed.[256] It is submitted this is not correct and it was not claimed twice. This is repeated in their submissions to me.[257] There has been no response by Arthurs to this. Subject to hearing further argument, if this can be proved by Quinn & Scattini my preliminary view is this would be claimable, subject to any other ruling I have made.

   [256]Affidavit of Russell James Leneham filed 7 February 2018, document 13, at [20]-[23].

   [257]Exhibit 1 at [4].

1. Other disbursements are at list numbers: 238, 280, 416, 690, 691, 1107, 1139, 1140, 1141, 1242, 1368-1377, 1139, 1140, 1141, 1604-1611, 1909, 1992, 2324, 2325, 2422, 2526 and 2675.

1. I would have thought these items could readily be sorted out by the parties.

1. Another example is list number 959. Quinn & Scattini submit this was written off and there was no charge.

1. I order that the parties prepare an order reflecting the reasons I have given within 14 days.

1. If agreement cannot be reached then the matter can be listed for further argument. I would be minded to refer the matter back to the costs assessor for an updated assessment in accordance with these reasons.

1. I give the parties liberty to apply under the slip rule concerning any of the item numbers which I have missed or which appear to be in error and generally.