Murrell Stephenson, Solicitors, Re v Sulzberger

[2000] QDC 257

DISTRICT COURT OF QUEENSLAND

CITATION:	In the Matter of Murrell Stephenson v Kevin John Sulzberger [2000] QDC 257
PARTIES:	IN THE MATTER OF MURRELL STEPHENSON, SOLICITORS (A FIRM) Appellant v KEVIN JOHN SULZBERGER Respondent
FILE NO/S:	Appeal No. 3131 of 1998
PROCEEDING:	Appeal
ORIGINATING	Magistrates Court
COURT:
DELIVERED ON:	15 September 2000
DELIVERED AT:	Brisbane
HEARING DATE:	7 September 2000
JUDGE:	Judge Brabazon QC
ORDER:	Appeal dismissed
CATCHWORDS:	APPEAL AND NEW TRIAL – COSTS – Appellant seeks enforcement of costs agreement between themselves and their client – whether the Magistrates Court has jurisdiction to determine the issue
The Solicitors Act 1891 ss. 3-15 Legal Practitioners Act 1995 s. 2, s. 28 Attorneys and Solicitors Act 1870 The Small Debts Courts Act 1867 The Costs Act 1867
Re Walsh Halligan Douglas’ Bills of Costs (1991) Qd. R. 288 Re Henderson Trout’s Bills of Costs (1995) 1 Qd.R. 160 Connolly Suthers v Frost (1995) 2 Qd.R. 117 Re Jones (1896) 1 Ch. 222 R v The Justices of South Brisbane Ex parte Zhagami (1901) 11 QLJR 81
COUNSEL:	Mr R. Dickson for the appellant Mr G. Robinson for the respondent
SOLICITORS:	Murrell Stephenson for the appellant Dale & Fallu for the respondent
JUDGMENT

1. From 5 November 1891 until 30 June 1998, ss. 3 to 15 of The Solicitors Act 1891

   dealt with the enforcement of costs agreements between solicitors and their clients.

   Some difficulties of interpretation, especially arising out of s.3, have recently been

   dealt with by the Supreme Court and the Court of Appeal. See the decisions in Re

   Walsh Halligan Douglas’ Bills of Costs (1991) Qd. R. 288; Re Henderson Trout’s

   Bills of Costs (1995) 1 Qd.R. 160 and Connolly Suthers v Frost (1995) 2 Qd.R. 117.

2. On 1 July 1998 the new regime of costs assessment came into place. This dispute

   arose before then. This decision adds a postscript to the above decisions. It

   considers the proper interpretation of s.7 of the 1891 legislation.

3. Section 7 was relocated, in 1995, to become s.28 of the Legal Practitioners Act

   1995. Section 2 of that Act explains that it is a consolidating Act, that the provision

   was relocated and not re-enacted, and that there has been no repeal or amendment

   of the old provisions. It is said that their meaning has not been affected, and that

   the relocation did not affect any jurisdiction or power of a court or judge - see

   s.2(4)(a).

4. Section 28 says that, with respect to a costs agreement made between a solicitor and

   a client, that :

   “Examination and enforcement of agreements
   28. No action shall be brought or instituted upon any such
   agreement, but every question respecting the validity or effect of any
   such agreement may be examined and determined, and the
   agreement may be enforced or set aside on motion or petition of any
   person, or the representative of any person, a party to such
   agreement, or being or alleged to be liable to pay, or being or
   claiming to be entitled to be paid the costs, fees, charges, or
   disbursements in respect of which the agreement is made, by the
   court in which the business, or any part thereof, was done, or a judge
   thereof, or if the business was not done in any court, then where the
   amount payable under the agreement exceeds $100, by the Supreme
   Court or a judge thereof, and where such amount does not exceed
   $100 by the judge of a District Court which would have jurisdiction
   in any action upon the agreement ”

5. In this case, the firm of Murrell Stephenson entered into a costs agreement with Mr

   Sulzberger on 11 September 1996. Following that agreement, the firm commenced

   proceedings in the Magistrates Court, designed to recover damages for personal

   injury that Mr Sulzberger had suffered. The matter progressed, but was not

   concluded, until 3 October 1997. The solicitors then ceased acting for Mr

   Sulzberger, as they perceived that “the necessary mutual relationship of trust and

   confidence required for a workable solicitor/client relationship no longer exists

   between us”.

6. A bill in taxable form was prepared and sent to Mr Sulzberger. It was for a total of

   $7,324.92. He made no objection to any part of it. He did not pay it. Then, on 3

   February 1998, Murrell Stephenson applied to the Magistrates Court for two orders:

“(a)	that the costs agreement dated 11 November 1996 ... may be enforced by the Magistrates Court at Brisbane; and
(b)
K.J. Sulzberger pay Murrell Stephenson, a firm, costs pursuant other amount as may be determined by this honourable court ...”

1. The hearing came on before Mr Halliday SM. It is not entirely clear if there were

   then any issues about the enforceability of the costs agreement, or the

   reasonableness of the firm’s charges. In any event, only one issue was submitted to the learned magistrate – did the Magistrates Court have any jurisdiction to deal with

   the solicitors’ claim to enforce the costs agreement?

2. On 25 May 1998 Mr Halliday gave his decision. Even though the solicitor’s work

   had been done in the Magistrates Court, he found that the Magistrates Court had no

   jurisdiction to entertain the application. He dismissed the application, and ordered

   the solicitors to pay Mr Sulzberger’s costs.

3. In this appeal, it is necessary to decide if the learned magistrate was right. If he was

   wrong, it appears that the application should be referred back to the Magistrates

   Court, as counsel for Mr Sulzberger now makes it clear that he also wishes to raise

   other objections to the enforcement of the costs agreement.

4. It is convenient to start with the English authority of Re Jones (1896) 1 Ch. 222.

   The decision also reveals the origins of s.28 – it comes from s.8 of the Attorneys

   and Solicitors Act 1870. In substance, the Queensland provision has been taken

   from there, except that the reference to the County Court has become the District

   Court. In that case, the solicitor’s client was involved in proceedings at quarter

   sessions, before a magistrate. The solicitor attempted to enforce a costs agreement

   in that court. That was, indeed, “the court in which the business was done”.

   However, it was found that the magistrate had no power to deal with the matter.

   The court was a not “a court” within the meaning of s.8. The reference to “the

   court or a judge thereof” was held, because of long usage, not to include a

   magistrate, whose office was never described as that of a judge. Also, such

   solicitor and own client costs would have been taxed in the Queens Bench Division, and the Court of Appeal could not accept that Parliament intended to transfer that

   jurisdiction to the court of quarter sessions.

5. Should the same result follow here? The appellant contended that it does not,

   because of differences in the Queensland context. It was pointed out, rightly, that a

   judge of the District Court was given jurisdiction, that being a court where

   agreements (at least in 1891) could not be enforced or set aside on motion or

   petition. It was also pointed out that, in 1891, Queensland magistrates had a civil

   jurisdiction conferred by The Small Debts Courts Act 1867. That court had a

   statutory power to award costs. (For a discussion of that power, see R v The

   Justices of South Brisbane Ex parte Zhagami (1901) 11 QLJR 81)

6. In 1891 there were three courts in Queensland exercising civil jurisdiction. It was

   not until 1921 that the present Magistrates Court was constituted, again with a

   power to award costs. In 1891 there was also the District Court, with a statutory

   power to award costs, at least on a party and party basis.

7. Some other considerations should be kept in mind. Until 1 July 1998, the Supreme

   Court of Queensland had exclusive power over solicitor and own client bills of

   costs. That was the effect of The Costs Act 1867. While scales of fees, especially

   in the District Court, have contained references to solicitor and own client costs, it

   should be understood that they are meant to be a guide for the parties and the taxing

   officers, and do not reflect a statutory power in the District Court to adjudicate on

   questions between solicitor and client. The same is true of the Magistrates Court.

   Rule 319 applies to party and party costs.

8. It was suggested that s.28 should be seen as a statute of changing impact, as the

   jurisdiction and powers of the Queensland courts, apart from the Supreme Court,

   changed up until the present time. See the discussion about such an approach to the

   construction of statutes, in Pearce & Geddes, Statutory Interpretation in Australia,

   4th Ed., para. 4.6. However, in view of Parliament’s declared intentions about the

   relocation of s.28, that seems an unlikely approach in this case. It can be presumed

   that Parliament was aware of the decision in Re Jones, and did nothing to change

   the words of s.28 in 1995.

9. Section 28 should also be read in its context. Section 24 provides that, when a

   client’s business is done in the Supreme Court, the amount payable under a costs

   agreement is not even receivable by the solicitor until it has been examined and

   allowed by the taxing officer of that court. Then, in s.29, if it appears to the court

   or a judge that a costs agreement is not fair and reasonable, then the solicitors’

   claim is to be taxed in the usual way.

10. Therefore, it can be seen in that an unusual and novel power was conferred upon a

    judge of the District Court, in cases not exceeding $100. In 1891, and up to the

    present time, as in England, the important office of justices, and magistrates, has for

    historical reasons been regarded as quite separate from that held by a judge. There

    is nothing which makes the Queensland context distinguishable from the English

    context examined in Re Jones.

11. Therefore, in my opinion, the decision of the learned magistrate was correct. The

    appeal must be dismissed. If the solicitors wish to enforce the agreement, then they

    will have to proceed in the Supreme Court.

12. The parties may make submissions about costs.