Moloney v Collins

[2011] NSWSC 628

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Moloney v Collins [2011] NSWSC 628

Hearing dates:

8 June 2011

Decision date:

28 June 2011

Jurisdiction:

Common Law

Before:

Johnson J

Decision:

1. Appeal dismissed.

2. The Plaintiff is ordered to pay the Defendant's costs in the form of a gross sum costs under s.98(4)(c) Civil Procedure Act 2005 in the sum of $4,000.00.

Catchwords:

APPEAL - Local Court civil claim and judgment - claim by barrister against solicitor for fees - requirements for costs agreement and bill of costs under Legal Profession Act 1987 - appeal on question of law - whether compliance with statutory scheme - whether failure to provide adequate reasons - reasons not adequate but correct result - desirability of use of gross sum costs order for costs of appeal

Legislation Cited:

Local Court Act 2007
Legal Profession Act 1987
Supreme Court Act 1970
Civil Procedure Act 2005
Legal Profession Regulation 2002
Supreme Court Rules 1970

Cases Cited:

Burbidge v Wolf [2008] NSWSC 60
Conder v Silkbard [1999] NSWCA 459
Robinson v Becata Pty Limited [2004] NSWSC 310
Ford Motor Company of Australia Limited v Arrowcrest Group Pty Limited [2002] FCA 115
First East Auction Holdings Pty Limited v Ange [2010] VSC 72
Giliberto v Kenney (1983) 48 ALR 620
Dennis v Cameron [2007] NSWCA 228
Pettitt v Dunkley [1971] 1 NSWLR 376
Soulemezis v Dudley (Holdings) Pty Limited (1987) 10 NSWLR 247
Pollard v RRR Corporation Pty Limited [2009] NSWCA 110
Stoker v Adecco Gemvale Constructions Pty Limited [2004] NSWCA 449
Director of Public Prosecutions v Illawarra Cashmart Pty Limited [2006] NSWSC 343; 67 NSWLR 402
Qushair v Raffoul [2009] NSWCA 329
Sun v Hatoum [2011] NSWSC 516
Motel Federation of Australia Limited trading as Best Western Australia v Lenarbo Pty Limited [2010] NSWSC 806
Harrison v Schipp [2002] NSWCA 213; 54 NSWLR 738
Sherborne Estate (No. 2) [2005] NSWSC 1003; 65 NSWLR 268

Category:

Principal judgment

Parties:

Patrick John Moloney (Plaintiff)
Jeffrey David Collins (Defendant)

Representation:

Mr JM Ireland QC (Plaintiff)
Mr D Moujalli (Defendant)
Moloney Lawyers (Plaintiff)
Micah Legal Services (Defendant)

File Number(s):

2010/392839

Judgment

1. JOHNSON J : The Plaintiff, Patrick John Moloney, appeals under s.39 Local Court Act 2007 from a judgment in civil proceedings in favour of the Defendant, Jeffrey David Collins, in a total amount of $16,011.06 inclusive of interest and costs.

Factual Background

1. Mr Moloney is a solicitor. In March 2004, Mr Collins practised as a barrister in Sydney.

1. In March 2004, Mr Collins was retained by Ms Vidakovic, a solicitor employed by Mr Moloney, to act for a client in proceedings then pending before the Family Court of Australia sitting in Sydney. On 18 March 2004, Mr Collins provided a written costs agreement dated 15 March 2004 to Ms Vidakovic.

1. As counsel, Mr Collins carried out certain work under the instructions delivered. Mr Collins' instructions related to three Notices of Motion fixed to be heard on 18 March 2004 in the Family Court proceedings. The hearing of the Notices of Motion did not proceed on that day and were eventually listed for hearing on 5 July 2004. On that day, Mr Collins was informed that instructions had been withdrawn by the client from Mr Moloney's firm and that Mr Collins was no longer briefed to appear. By that time, Mr Collins had undertaken substantial work in preparation for the hearing.

1. Under cover of a letter dated 28 July 2004, Mr Collins rendered to Mr Moloney a tax invoice seeking payment of fees in a total sum of $13,860.00 inclusive of GST.

1. A dispute arose between Mr Moloney and Mr Collins concerning payment of those fees and eventually, in March 2010, Mr Collins commenced proceedings in the Local Court against Mr Moloney claiming the sum of $20,160.41, comprising the primary sum of $13,860.00 together with interest and other fees.

1. The proceedings were heard before Magistrate O'Shane at the Downing Centre Local Court on 7 October 2010 and 4 November 2010, with judgment being given on 18 November 2010. By that time, Mr Collins had abandoned that part of his primary claim which exceeded the sum of $8,500.00 plus GST. As mentioned, her Honour gave judgment in favour of Mr Collins against Mr Moloney in a total sum of $16,011.06, of which the professional costs' component was $2,339.93.

1. By Summons filed on 25 November 2010, Mr Moloney appealed to this Court under the Local Court Act 2007 .

Issues on Appeal

1. A number of issues of fact and law were determined in the Local Court proceedings. The Summons filed in this Court sought to challenge both the final judgment of the Magistrate on areas said to raise questions of law, and also an interlocutory judgment (refusing an application by Mr Moloney to reopen the hearing), as to which leave to appeal was required under s.40(2)(a) Local Court Act 2007 .

1. At the hearing of the appeal, Mr Ireland QC, for Mr Moloney, confined the grounds of appeal to those which contended that the Magistrate had misdirected herself as to law concerning the requirements of provisions in the Legal Profession Act 1987 ("LP Act 1987") and the Legal Profession Regulation 2002 ("LP Regulation 2002"). It was submitted for Mr Moloney that her Honour erred in law in rejecting his arguments concerning the statutory requirements which, if accepted, would have resulted in the complete rejection of Mr Collins' claim.

1. Further, Mr Moloney submitted that her Honour failed to give reasons or adequate reasons in respect of Mr Collins' non-compliance with these statutory requirements, and as to why the submissions of Mr Moloney on these issues were rejected. It was said that this constituted a further error of law.

1. Having regard to the narrowing of the grounds of appeal in this Court, it is not necessary to recite in any detail the evidence given in the Local Court nor the findings of the Magistrate on issues going beyond those which are in issue on appeal.

1. It may be stated shortly that her Honour found, in substance, that an implied agreement was concluded between Mr Moloney and Mr Collins in terms of the costs agreement dated 15 March 2004. In oral evidence, Mr Collins said that he signed the letter in that form which he handed to Ms Vidakovic at the Family Court of Australia on the morning of 18 March 2004. Her Honour held that, by inference, the terms set out in the costs agreement dated 15 March 2004 were accepted by conduct. That finding was not challenged at the hearing of the appeal.

1. In written submissions provided to the Local Court, counsel then appearing for Mr Moloney advanced a number of propositions concerning the applicable costs regime under the LP Act 1987.

1. The submissions advanced in the Local Court by counsel for Mr Moloney were developed as follows:

(a) s.182 LP Act 1987 prevented Mr Collins from maintaining proceedings against Mr Moloney unless he had made a disclosure to Mr Moloney which satisfied the requirements of that Act;

(b) Mr Collins had failed to comply with cl.45 LP Regulation 2002;

(c) it was common ground that Mr Collins had not made application for assessment of his fees prior to instituting the proceedings in the Local Court;

(d) s.192 LP Act 1987 prohibited the commencement or maintenance of proceedings by Mr Collins against Mr Moloney because a bill of costs in compliance with that Act had never been delivered by Mr Collins, with reliance being placed upon the judgment of Nicholas J in Burbidge v Wolf [2008] NSWSC 60 and of the Court of Appeal in Conder v Silkbard [1999] NSWCA 459.

Submissions on Appeal

1. On appeal, Mr Ireland QC (who did not appear below), submitted that her Honour's failure to deal with the submissions advanced on behalf of Mr Moloney as to the sufficiency of the disclosure or compliance with cl.45 LP Regulation 2002 constituted an error of law. In particular, it was submitted that the bill of costs submitted by Mr Collins was clearly deficient in that it did not contain:

(a) notification of Mr Moloney's right to an assessment of costs; and

(b) notification of Mr Collins' claim for interest on unpaid fees.

1. Mr Ireland QC submitted that her Honour did not deal with these arguments in her judgment, and thus erred in law.

1. He submitted that, on a reconsideration of the arguments by this Court on appeal, an examination of the costs agreement and the tax invoice rendered by Mr Collins ought lead to a conclusion that there was non-compliance with the relevant statutory requirements, so that they operated to prevent Mr Collins from maintaining the proceedings in the Local Court.

1. Mr Ireland QC submitted that the orders made by the Magistrate should be set aside and judgment given in favour of Mr Moloney with a consequential costs order being made in favour of Mr Moloney.

1. Mr Moujalli, counsel for Mr Collins, submitted that the costs agreement and tax invoice provided by Mr Collins complied with the statutory regime. He submitted that the Magistrate had given adequate reasons for this conclusion but that, even if the reasons were deficient, Mr Moloney had not demonstrated any failure on the part of Mr Collins to comply with the statutory requirements. In the result, Mr Moujalli submitted that the appeal should fail.

1. In particular, Mr Moujalli submitted that it was appropriate to read the costs agreement and the tax invoice together and that terms contained in one document could be incorporated by reference in the other document. He submitted that, where notice of a matter is to be given to a person, the real question is how the disclosure would have been interpreted by a reasonable reader in the position of the recipient: Robinson v Becata Pty Limited [2004] NSWSC 310 at [49].

1. He submitted that Mr Moloney was a practising solicitor and that he should be taken to have been aware of the provisions for the assessment of costs in the LP Act 1987, which was the only relevant regime for the assessment of costs. Mr Moujalli submitted that Mr Moloney had been notified of the existence of that regime by the costs agreement, which ought reasonably be read together with the tax invoice. He submitted that a reasonable reader in the position of Mr Moloney could not have misapprehended the matter that was being disclosed in the costs agreement. He observed that Mr Moloney had not given any evidence that the form of the disclosure which was given caused any confusion on his part as to the applicable regime for costs assessment.

1. With respect to the suggested deficiency concerning interest, Mr Moujalli submitted that the costs agreement and tax invoice, when read together, complied with the relevant statutory requirements.

1. Mr Moujalli accepted that the grounds pressed by Mr Moloney raised questions of law for the purpose of s.39(1) Local Court Act 2007 , but submitted that no error had been demonstrated with respect to the construction and application of the LP Act 1987 and LP Regulation 2002.

Relevant Statutory Provisions

1. It was common ground that the statutory scheme contained in the LP Act 1987 and the LP Regulation 2002 applied to these proceedings.

1. The relevant provisions of the LP Act 1987 are those concerning the obligation of a legal practitioner to disclose the basis of costs to an instructing practitioner. The statutory extracts appearing below were those applicable in March 2004.

1. Section 176 LP Act 1987 provided as follows:

"176 Obligation to disclose basis of costs to instructing practitioner

(1) A barrister or solicitor who is retained on behalf of a client by another barrister or solicitor must disclose to that other barrister or solicitor in accordance with this Division the basis of the costs of legal services to be provided to the client by the barrister or solicitor.

(2) The following matters are to be disclosed to the other barrister or solicitor:

(a) the amount of the costs, if known,

(b) if the amount of the costs is not known, the basis of calculating the costs,

(c) the billing arrangements,

(d) any other matter required to be disclosed by the regulations."

1. Section 181 LP Act 1987 provided:

"181 Regulations, rules and guidelines as to disclosure

The regulations and, subject to the regulations, the barristers rules, solicitors rules or joint rules may make provision for or with respect to:

(a) the information to be disclosed under this Division, and

(b) with the approval of the Attorney General, when it would not be reasonable to require a disclosure to be made under this Division."

1. Section 182 LP Act 1987 which provided:

"182 Effect of non-disclosure of matters related to basis of costs

(1) If a barrister or solicitor fails to make a disclosure to a client in accordance with this Division of the matters required to be disclosed by section 175 in relation to costs, the client need not pay the costs of the legal services unless the costs have been assessed under Division 6.

(2) A barrister or solicitor who fails to make a disclosure in accordance with this Division of the matters required to be disclosed by section 175 or 176 in relation to costs may not maintain proceedings for the recovery of the costs unless the costs have been assessed under Division 6.

(3) The costs of any assessment referred to in this section (including the costs of the costs assessor) are payable by the barrister or solicitor seeking to recover costs.

(4) Any failure referred to in this section does not of itself amount to a breach of this Act. However, the failure is capable of being unsatisfactory professional conduct or professional misconduct."

1. Section 189 LP Act 1987 provided:

"189 Rights may not be waived

(1) Any provision of a costs agreement or other agreement that is inconsistent with this Division is void to the extent of the inconsistency.

(2) In particular, any provision of a costs agreement or other agreement that purports to waive rights to an assessment of costs under this Part, or the right to receive a bill of costs in the form required for assessment under this Part, is void."

1. Section 190 LP Act 1987 provided:

"190 Interest on outstanding costs

(1) A barrister or solicitor may charge interest on the unpaid costs for legal services provided by the barrister or solicitor, if the costs are unpaid 30 days or more after the barrister or solicitor has given a bill of costs for those services in accordance with this Division.

(2) A barrister or solicitor may not charge interest on the unpaid costs for legal services unless the bill of costs for those services contains a statement that interest is payable and of the rate of interest.

(3) A barrister or solicitor may also charge interest on the unpaid costs for legal services in accordance with a costs agreement.

(4) A barrister or solicitor may not charge interest under this section or under a costs agreement at a rate that exceeds:

(a) except as provided by paragraph (b - the rate prescribed under the Supreme Court Act 1970 in respect of unpaid judgments of the Supreme Court, or

(b) the rate prescribed by the regulations."

1. Mr Moloney placed particular reliance upon the terms of s.192 LP Act 1987 which provided:

"192 Bill of costs to be given before costs can be recovered from client

(1) Proceedings for the recovery of costs by a barrister or solicitor for providing legal services must not be commenced or maintained against any person unless at least 30 days have passed since a bill for those costs was given to the person in accordance with this Division.

(2) The Supreme Court may make an order authorising a barrister or solicitor to commence or maintain proceedings against a person sooner, if the Supreme Court is satisfied that the person is about to leave New South Wales."

1. Section 193 LP Act 1987 provided:

"193 Form of bill of costs

(1) The regulations may make provision for or with respect to the form of, and the particulars to be included in, bills of costs.

(2) A bill of costs may be described as a memorandum of fees or in any other way authorised by the regulations."

1. Clause 45 LP Regulation 2002 was in the following terms:

"45 Particulars in bill of costs

(1) For the purposes of section 193 (1) of the Act, the following particulars are to be included in a bill of costs:

(a) a description of the legal service provided,

(b) the total amount of the costs charged,

(c) any intended claim for interest under section 190 of the Act if the costs are not paid (including the rate of interest),

(d) a statement:

(i) in a case where the bill of costs is given to a client - that the client may apply to have the costs assessed under Part 11 of the Act, but that if the costs have been wholly or partly paid, the application must be made within 12 months after the client is given the bill of costs, or

(ii) in a case where the bill of costs is given by a barrister or solicitor who was retained by another barrister or solicitor to act on behalf of a client and the bill of costs is given to that other barrister or solicitor - that the barrister or solicitor who is given the bill of costs may apply to have the costs assessed under Part 11 of the Act within 30 days after the bill of costs is given,

(e) the work done in providing the legal service,

(f) the period over which that work was done,

(g) the identity of the persons who did that work (including the position of the persons, for example, partner, associate),

(h) the basis on which the costs have been calculated and charged (whether on a lump sum basis, an hourly rate basis, an item of work basis, a part of proceedings basis or other basis),

(i) the facts relied on to justify the costs charged by reference to the above, the practitioner's skill, labour and responsibility, the complexity, novelty or difficulty of the matter, the quality of the work done or any other relevant matter.

(2) However, the particulars referred to in subclause (1) (e)-(i) need not be included in the bill of costs if:

(a) the total amount of costs charged is the amount, or an amount calculated on the basis, set out in a costs agreement for the legal service made under Division 3 of Part 11 of the Act or disclosed in accordance with Division 2 of that Part, and (b) the bill of costs refers to the relevant costs agreement or disclosure document.

(3) A bill of costs may comprise more than 1 document."

Resolution of Competing Submissions

1. The focus of attention at the hearing of the appeal has been the suggested deficiencies whereby it is said that the tax invoice (bill of costs) did not comply with s.193(1) LP1987 and cl.45 LP Regulation 2002 because it did not include the following particulars:

(a) any intended claim for interest under s.190 LP Act 1987 if the costs are not paid (including the rate of interest): cl.45(1)(c) LP Regulation 2002;

(b) a statement that the solicitor who was given the bill of costs may apply to have the costs assessed under Part 11 of the LP Act 1987 within 30 days after the bill of costs is given: cl.45(1)(d)(ii) LP Regulation 2002.

1. I approach the resolution of these arguments upon the basis that a bill of costs may comprise more than one document: cl.45(3) LP Regulation 2002.

1. I accept Mr Moujalli's submission that the costs agreement dated 15 March 2004, the tax invoice dated 28 July 2004 and the covering letter from Mr Collins dated 28 July 2004 which enclosed the tax invoice may be read together, in a manner permitted by cl.45(3) LP Regulation 2002. The covering letter from Mr Collins dated 28 July 2004 referred back to one aspect of the costs agreement. The tax invoice of 28 July 2004 itself stated, at one point, "as previously agreed" and, a little later, "as per costs agreement" referring to a fee charge for 5 July 2004. I accept the submission for Mr Collins that the terms contained in the costs agreement may be incorporated by reference into the tax invoice or bill of costs in this case. The statutory purpose is met by this approach.

1. This was a straightforward arrangement involving two documents, provided within four months of each other, with the latter document referring to the former document. The incorporation by reference of words in one document into another document relieves the need to rewrite the words in the latter document: Ford Motor Company of Australia Limited v Arrowcrest Group Pty Limited [2002] FCA 1156 at [6]. Reasonably sufficient steps were taken in this case to give notice to Mr Moloney of terms contained in the other document: First East Auction Holdings Pty Limited v Ange 2010] VSC 72 at [136]; Giliberto v Kenney (1983) 48 ALR 620 at 623.

1. I accept as well the submission for Mr Collins that, where notice of a matter is to be given to a person, the real question is how the disclosure would have been interpreted by a reasonable reader in the position of the recipient: Robinson v Becata Pty Limited at 49]. The fact that Mr Moloney was a practising solicitor, and ought be taken to have been aware of the provision for the assessment of costs in the LP Act 1987, is relevant. This approach is supported by passages in the judgment of the Court of Appeal in Dennis v Cameron [2007] NSWCA 228, where an argument was advanced, in the context of a dispute as to fees between a barrister and solicitor, that non-compliance with certain statutory requirements barred the claim under s.192 LP Act 1987. Hoeben J (McColl JA and Handley AJA agreeing) said at [32]:

"The solicitor's submission fails to have regard to the reality of the transaction. The amended memoranda of fees should not be looked at in isolation but as part of the total billing process which took place. Accordingly one needs to have regard not only to the amended memoranda of fees but also those originally sent."

1. Other passages in Dennis v Cameron assist the resolution of the present appeal. Hoeben J referred, at [25]-[26], to the trial Judge's conclusion which relied on the long-standing professional relationship between the barrister and the solicitor in that case:

"25 In relation to compliance with clause 22A of the Regulations, his Honour noted that the only challenge to the memoranda of fees related to sub-clauses (g) and (h) of the Regulation. On his Honour's reading of the memoranda of fees they complied with those sub-clauses.

26 His Honour observed that even if he had reached a different conclusion in relation to those sub-clauses, the particularisation of such information was not required when the person receiving the memoranda of fees was a person who was aware of the matters to be particularised. In that regard his Honour relied on the long-standing professional relationship which had existed between the barrister and the solicitor before the presentation of these memoranda of fees and the decision of Bryson J in Hogarth v Gye [2002] NSWSC 32 at [25]."

1. These statements fortify a conclusion that a practical and realistic approach ought be taken to requirements of the LP Act 1987 and the LP Regulation 2002, in the areas of technical compliance with statutory requirements, where the communications are between barrister and solicitor. This is especially so, in a case such as this, where there are two documents only, provided four months apart.

The Interest Issue

1. The tax invoice dated 28 July 2004 contained the following express statement:

"Please pay the above amount within 30 days.

If this invoice is not paid in full within 30 days, interest may be charged on any outstanding amount in accordance with the provisions of the Legal Profession Act 1987."

1. The costs agreement dated 15 March 2004 contained the following special condition:

"(k) All accounts rendered are to be satisfied within thirty (30) days. All accounts not satisfied within thirty (30) days will attract interest in accordance with Schedule J of the Supreme Court Rules."

1. As at March 2004, Schedule J to the Supreme Court Rules 1970 provided for an interest rate, after 28 February 2002, of nine percent. The interest specified in Schedule J remained at this level as at 28 July 2004 and for an extended period thereafter until interest rates were removed from that Schedule.

1. Section 193 LP Act 1987 provided that the Regulations may make provision for or with respect to the form of, and the particulars to be included in, bills of costs. Clause 45(1)(c) LP Regulation 2002 provided that, for the purposes of s.193(1), amongst the particulars to be included in the bill of costs was any intended claim for interest under s.190 LP Act 1987 if the costs are not paid, including the rate of interest.

1. Section 190(2) provided that a barrister or solicitor may not charge interest on unpaid costs unless the bill of costs for those services contains a statement that interest is payable and of the rate of interest. Section 190(4) provided that a barrister or solicitor may not charge interest under that section or under a costs agreement at a rate that exceeded the rate prescribed by the LP Regulation 2002 (if any) or the rate prescribed under the Supreme Court Act 1970 in respect of unpaid judgments of the Supreme Court. The latter is a reference to Schedule J to the Supreme Court Rules 1970 .

1. For Mr Moloney, it is contended that s.192 LP Act 1987 barred Mr Collins from commencing or maintaining proceedings for the recovery of costs because he had not given a bill for those costs in accordance with the provisions contained within Division 4 of Part 11 LP Act 1987 (ss.190-195).

1. It may be taken that the terms of s.192(1) LP Act 1987 are mandatory: Conder v Silkbard at [29]; Burbidge v Wolf at [44]-[47].

1. Mr Collins could not commence proceedings against Mr Moloney for the recovery of costs for providing legal services unless at least 30 days had passed since the bill for those costs had been given to Mr Moloney in accordance with ss.190-195 LP Act 1987.

1. In my view, Mr Collins complied with these requirements in this case. It is appropriate to read the bill of costs in conjunction with the costs agreement. The bill of costs stated that interest would be charged on outstanding fees in accordance with the LP Act 1987, and the costs agreement had identified that interest would be charged in accordance with Schedule J of the Supreme Court Rules 1970 . Schedule J nominated the applicable interest rate.

1. Consistent with the principles concerning incorporation by reference and the practical reality of the professional relationship between a barrister and solicitor referred to by Hoeben J in Dennis v Cameron , the Court should fairly read these two straightforward documents together to determine whether the statutory requirements have been met. Having undertaken that task, in my view, the clear answer is one in the affirmative.

1. I reject the submission of Mr Moloney that Mr Collins did not comply with the requirements of s.192 LP Act 1987 and cl.45(1)(c) LP Regulation 2002 in this case.

The Assessment of Costs Issue

1. The tax invoice dated 28 July 2004 did not contain a statement in terms of cl.45(1)(d)(ii) with respect to assessment of costs. The costs agreement dated 15 March 2004 had included the following special conditions:

"(e) The Legal Profession Act gives you (in some circumstances) the right to apply to the Supreme Court to have the costs in my memorandum assessed for their fairness and reasonableness. You should apply to the Court within 30 days of the date of my memorandum.

(f) The Legal Profession Act prevents me from taking Court proceedings to recover my fee until 30 days after I have given you my memorandum."

1. Mr Moloney is on stronger ground with his submission on this aspect of the appeal. The bill of costs did not refer to this aspect at all, although the costs agreement had mentioned it.

1. Clause 45(3) LP Regulation 2002 provided that a bill of costs may comprise more than one document. The bill of costs in this case referred to the costs agreement. As I have said, the two documents are short and straightforward and a reasonable solicitor would fairly read them together.

1. This is not a case where there was a complete failure to comply with the requirement in cl.45(1)(d)(ii) LP Regulation 2002 in either document. The relevant statement was set out clearly in the costs agreement.

1. The mandatory nature of s.192(1) LP Act 1987, and the requirement for compliance with the terms of cl.45 LP Regulation 2002, has been emphasised in cases where the dispute is between a barrister and the client. As has been seen, where the dispute is between a barrister and solicitor, the Court has regard to the reality of the professional background of the two practitioners for the purpose of assessing whether the requirements of the statutory scheme have been met.

1. I keep in mind that cl.45(1)(d)(ii) LP Regulation 2002 relates directly to a case where a bill of costs is given by a barrister who was retained by a solicitor. It is clear that the statutory scheme requires such a statement to be made so that the recipient is conscious of both the availability of assessment under Part 11 LP Act 1987, and the fact that application for such assessment may be made by the solicitor within 30 days after the bill of costs is given.

1. Had the bill of costs and the costs agreement both been silent on this aspect, then Mr Moloney may call in aid the relevant cases to contend that s.192 LP Act 1987 barred the commencement of proceedings by Mr Collins in the circumstances of this case. However, the costs agreement referred expressly to this aspect and I am satisfied that the bill of costs in this case should be read, as permitted by cl.45(3), in conjunction with the costs agreement. The statutory scheme permits, in my view, such an approach where the two documents identify clearly and directly the 30-day assessment window, and where the Court may have regard to the professional knowledge of a solicitor who receives straightforward documents such as the costs agreement and bill of costs in this case.

1. Mr Moloney has not demonstrated that there was a failure to comply with s.192 LP Act 2007 and cl.45 LP Regulation 2002 with respect to the costs assessment issue.

The Reasons Ground

1. Mr Moloney has failed in his primary argument that, as a matter of law, s.192 LP Act 1987 and cl.45 LP regulation 2002 prevented Mr Collins from bringing the Local Court proceedings because of suggested deficiencies in their content with respect to interest and costs assessment. These conclusions resolve the substance of the appeal in a manner adverse to Mr Moloney.

1. However, Mr Moloney contended that error of law had been demonstrated in her Honour's failure to give reasons for rejecting the submissions made on his behalf on these issues in the Local Court.

1. Failure to give reasons as required by law may itself disclose error of law: Pettitt v Dunkley [1971] 1 NSWLR 376; Soulemezis v Dudley (Holdings) Pty Limited (1987) 10 NSWLR 247 at 278-279. However, the extent and content of the reasons required will depend upon the particular case and the issues under consideration.

1. The duty does not require the trial Judge to spell out in minute detail every step in the reasoning process or refer to every single piece of evidence. It is sufficient if the reasons adequately reveal the basis of the decision, expressing the specific findings that are critical to the determination of the proceedings: Stoker v Adecco Gemvale Constructions Pty Limited [2004] NSWCA 449 at 41. It is essential to expose the reasoning on a point critical to the contest between the parties: Pollard v RRR Corporation Pty Limited [2009] NSWCA 110 at [58].

1. Appropriate allowance should be made for the pressures under which Magistrates are placed by the volume of cases coming before them: Director of Public Prosecutions v Illawarra Cashmart Pty Limited [2006] NSWSC 343; 67 NSWLR 402 at 407-408 [15]-[18].

1. In the present case, the Magistrate came to give judgment following a hearing which had raised a range of factual and legal issues extending far beyond those which were focused upon at the hearing of this appeal. Her Honour had received written submissions from counsel appearing in the Local Court which had articulated the arguments of Mr Moloney on these issues and the response of Mr Collins with respect to them.

1. Her Honour's judgment extended over nine transcript pages (pages 52-60, 18 November 2010). Her Honour made findings with respect to a number of issues of fact and law not challenged on this appeal (pages 52-58). Having referred to a number of authorities touching other issues in the case, her Honour said (pages 58-59) (emphasis added):

"It is clear from the comments made by the Court in each of the cases cited that a party in the position of the present defendant is not entitled to receive the benefit of work done on its behalf, receive documents such as the costs agreement and subsequent tax invoice in this matter, and then sit back and silent in action for any lengthy time until the time when the disaffected party initiates proceedings such as these expecting it can take some perceived self-serving advantage. The Court, having regard to the principles set out in the cases cited, is satisfied that the defendant by its conduct accepted both the costs agreement provided by the plaintiff and his later tax invoice. This Court rejects the further defence submissions regarding the interpretation and application of the Legal Profession Act and regulations to the plaintiff's disclosure of costs.

Further to these remarks the Court accepts the plaintiff's submissions as stated in para 7. Apart from those matters, the Court notes that in circumstances where the defendant takes or took issue with the amount claimed in the tax invoice, it could have sought to have the costs assessed. That exercise in itself would have warranted an appropriate examination of the validity or propriety of the costs disclosure and whether or not it accorded with the provisions of the Legal Profession Act, that was not done."

1. The submissions made by counsel for Mr Moloney in the Local Court concerning the s.192 LP Act 1987 and cl.45 LP Regulation 2002 issues occupied some 16 paragraphs of his written submissions. Counsel for Mr Collins responded to these submissions in his written submissions, and had touched upon them as well in his oral submissions on 7 October 2010 (pages 38-39, 42-44). The reference by her Honour to acceptance of a submission at "para. 7" of the Plaintiff's submissions in the above passage concerns another submission unrelated to this topic. It appears that the full extent of her Honour's reasons for rejecting the submissions for Mr Moloney on these issues are contained in the underlined portion of the judgment set out at [67] above.

1. Consistent with the principles referred to earlier (at [63]-[65]), elaborate reasons were not required. However, some explanation was necessary having regard to the significance which had been attached to these legal arguments in submissions for Mr Moloney below. Her Honour did not state that, for reasons contained in the submissions of counsel for Mr Collins, she rejected Mr Moloney's submissions on these issues. The expression of reasons on this aspect did not rise above the bare statement that the submissions for Mr Moloney were not accepted.

1. In the circumstances of the case, the failure to give reasons beyond this bare statement on these legal issues constitutes a failure to give reasons as required by law.

1. Section 41 Local Court Act 2007 provides that the Supreme Court may determine an appeal under s.39(1) by varying or setting aside the judgment or order, setting aside the judgment or order and remitting the matter to the Local Court for determination in accordance with the Supreme Court's direction or by dismissing the appeal.

1. In the context of appeals to the Court of Appeal which proceed by way of rehearing under s.75A Supreme Court Act 1 970, it has been said that where an appellate court concludes that the primary court has failed to give adequate reasons, it has a discretion as to whether a new trial should be ordered. If despite the inadequate reasons, only one conclusion is available, a new trial may not be necessary: Pollard v RRR Constructions Pty Limited at [67]; Qushair v Raffoul [2009] NSWCA 329 at [52].

1. An appeal under s.39 Local Court Act 2007 is restricted to a question of law and does not proceed by way of rehearing. This distinction may be relevant where the ground of appeal asserts failure to give reasons or adequate reasons: Sun v Hatoum [2011] NSWSC 516 at [37]-[42].

1. In Motel Federation of Australia Limited trading as Best Western Australia v Lenarbo Pty Limited [2010] NSWSC 806, Davies J observed, in the context of an appeal under s.39 Local Court Act 2007 , that "appeals are against judgments and not against reasons as such" , so that the judgment may be correct despite error being demonstrated.

1. Neither party submitted that, in the event error was established, I should remit the matter to the Local Court. In the circumstances of this case, that would plainly be undesirable given the quantum of the judgment.

1. Mr Ireland QC accepted that his client should only succeed in having the judgment below set aside, and judgment given in his favour, if the Court accepted his submissions concerning the proper construction and application of s.192 LP Act 1987 and cl.45 LP Regulation 2002. I have rejected the submissions for Mr Moloney on those aspects.

1. I am satisfied that the appropriate order in the circumstances is that the appeal be dismissed.

Costs

1. The dismissal of the appeal will leave in place the orders made in the Local Court by way of judgment inclusive of interest and costs.

1. At the hearing of this appeal, I raised with counsel the desirability of resolving to finality the question of costs of the appeal by the making of a costs order in the form of a specified gross sum, instead of assessed costs, in accordance with s.98(4)(c) Civil Procedure Act 2005 . I invited the parties to be in a position to address the question of costs of the appeal on this basis when judgment was given.

1. I will give the parties an opportunity to address on the question of costs when judgment is given.

1. In circumstances where the entire litigation springs from a dispute about legal fees as between counsel and solicitor in proceedings seven years ago, and where the judgment in the Local Court was in the total sum of $16,011.06 inclusive of interest and costs, it seems appropriate to utilise a costs determination method on this appeal which sees the just, quick and cheap resolution of the question of costs on the appeal. Given the history of this litigation, if this course is not adopted, there is a risk that any process of costs assessment may itself prove contentious, protracted and expensive so as to add further to the delay and costs already surrounding this litigation: Harrison v Schipp [2002] NSWCA 213; 54 NSWLR 738 at 742-743 [20]-[22]; Sherborne Estate (No. 2) [2005] NSWSC 1003; 65 NSWLR 268 at 274-276 [32]-[44].

Orders

1. I make the following orders:

(a) appeal dismissed;

(b) I will hear the parties on the question of costs, including the making of a specified gross sum costs order under s.98(4)(c) Civil Procedure Act 2005 with respect to the costs of the appeal.

[Submissions by the parties on the question of costs,

including the making of a specified gross sum costs order

under s.98(4)(c) Civil Procedure Act 2005].

1. The Plaintiff is ordered to pay the Defendant's costs in the form of a gross sum costs under s.98(4)(c) Civil Procedure Act 2005 in the sum of $4,000.00.

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Amendments

30 June 2011 - Name of Defendant incorrectly spelt in pleadings.

Amended paragraphs: Cover page and paragraph 1

Decision last updated: 30 June 2011