New Wave Australia P/L v Botten Levinson Lawyers; SJ Coggins & SL Marks & Marks Family Trust v Botten Levinson Lawyers - [2020] SASC 70

Supreme Court of South Australia
(Appeals to a Single Judge: Civil)
NEW WAVE AUSTRALIA P/L v BOTTEN LEVINSON LAWYERS; SJ COGGINS & SL MARKS & MARKS FAMILY TRUST v BOTTEN LEVINSON LAWYERS
[2020] SASC 70
Judgment of The Honourable Chief Justice Kourakis (ex tempore)
19 March 2020
PROFESSIONS AND TRADES - LAWYERS - SOLICITOR AND CLIENT - RETAINER
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT
Appeal against the judgment of a Magistrate and the judgment of a Judge of this Court.
The Magistrate found that Botten Levinson Lawyers (Botten Levinson), the plaintiff in the Magistrates Court action and the respondent on appeal to this Court, had entered into a retainer with the partnership ‘New Wave Constructions’. Judge Bochner dismissed an application by the appellants to change the name of a party in proceedings to fix legal costs. The appellants sought to change the name of the second plaintiff, from S.J Coggins & S.L Marks & Marks Family Trust & Stephen Coggins Family Trust t/a New Wave Constructions, to New Wave Marine Services Pty Ltd as trustee for the Marks Family Trust and Foodforce Australia Pty Ltd as trustee for the Stephen Coggins Family Trust.
When Botten Levinson instituted the Magistrates Court action, it made its claim against New Wave Australia Pty Ltd as the only defendant. In an affidavit of the principal of New Wave Australia Pty Ltd, he deposed that the retainer was between Botten Levinson and the partnership ‘New Wave Constructions’. Exhibited to the affidavit was an email from Mr Levinson informing the principal that he would proceed on the basis that ‘New Wave Constructions Pty Ltd’ was the entity responsible for fees unless the principal advised otherwise. The principal never corrected Mr Levinson’s mistaken premise that New Wave Constructions was incorporated and not simply a partnership. In light of the affidavit, Botten Levinson amended its claim to include a second defendant described as ‘S.J COGGINS & S.L MARKS & Marks Family Trust & Stephen Coggins Family Trust t/a NEW WAVE CONSTRUCTIONS (ABN 68 895 347 368)’.
Held, dismissing the appeals:
1. There is nothing which would necessarily or even strongly suggest that the judgment that New Wave Constructions, comprising Mr Coggins and Mr Marks personally, and the trustees of their respective trusts, were not properly included in the description of the second defendant, New Wave Constructions. The appeal against the judgment of the Magistrate is dismissed.
2. It must follow that the appeal against the decision of Judge Bochner is also dismissed.
Legal Practitioners Act 1981 (SA) sch 3 cl 37, referred to.

NEW WAVE AUSTRALIA P/L v BOTTEN LEVINSON LAWYERS; SJ COGGINS & SL MARKS & MARKS FAMILY TRUST v BOTTEN LEVINSON LAWYERS
[2020] SASC 70
Civil

KOURAKIS cJ: This is an appeal against the judgment of a Magistrate on 12 February 2018 in action AMCCI-17-920. In that action, Botten Levinson Lawyers (Botten Levinson) claimed their legal costs in a planning appeal. The planning appeal concerned a proposed development by the company New Wave Australia Pty Ltd or at least on its property.
When Botten Levinson instituted the action on 17 March 2017, it made its claim against New Wave Australia Pty Ltd as the only defendant. Botten Levinson subsequently moved for summary judgment. In an affidavit affirmed on 11 December 2017 opposing summary judgment, Mr Marks deposed that the fee retainer was between Botten Levinson and a partnership or business entity called ‘New Wave Constructions’. Mr Marks exhibited to his affidavit a letter from Mr Levinson to Mr Marks, as the principal of New Wave Constructions Pty Ltd, setting out the terms of Botten Levinson’s retainer.
Mr Marks also exhibited to his affidavit an email from Mr Levinson dated 3 June 2016 in which Mr Levinson informed Mr Marks that he would proceed on the basis that New Wave Constructions Pty Ltd was the entity responsible for Botten Levinson’s fees unless Mr Marks advised otherwise. Mr Marks never corrected Mr Levinson’s mistaken premise that New Wave Constructions was incorporated and not simply a partnership.
In light of Mr Marks’ affidavit, on 21 December 2017, Botten Levinson amended its claim to include a second defendant described as follows:
S.J COGGINS & S.L MARKS & Marks Family Trust & Stephen Coggins Family Trust t/a NEW WAVE CONSTRUCTIONS (ABN 68 895 347 368) …
The party was identified by Mr Marks himself in an email he sent to Botten Levinson on 29 November 2016 with the subject heading ‘New Wave Constructions’ to which was attached an extract with a heading ‘Current details for ABN 68 895 347 368’. That extract stated that the persons S J Coggins and S L Marks and the trust entities Marks Family Trust and Stephen Coggins Family Trust operated as a partnership. The email was sent in the context of Mr Marks enquiring whether the judgment in the planning appeal matter had been handed down on 22 November 2016. The emails were in evidence before the Magistrate.
That extract is consistent with a more recently obtained extract headed ‘ABN Lookup’ concerning the same trading name and ABN number, which was placed in the proceedings for the adjudication of the quantum of the legal costs brought in this Court and heard by Judge Bochner.
The amendment joining New Wave Constructions was made on 21 December 2017, without first obtaining permission to do so. However, that omission was regularised in a directions hearing on 11 January 2018 and the matter proceeded to hearing with Mr Marks appearing in person for all defendants. The hearing was heard on 12 February 2018 and the Magistrate delivered judgment on the same day.
Her Honour’s reasons record that the only issue before her was whether New Wave Australia Pty Ltd was also liable for the legal costs alongside the partnership New Wave Constructions. Her Honour found, in accordance with submissions made by Mr Marks, that New Wave Constructions alone was responsible for the legal costs. Her Honour’s reasons record no submission, nor refer to any evidence, that any other entity might have been contractually bound to pay Botten Levinson’s fees.
The failure of New Wave Constructions to dispute it was the contracting party is, in itself, a strong reason not to set aside the judgment. In any event, the evidence strongly supports that conclusion. No error is shown on the face of the material before the Magistrate.
I recognise and acknowledge that there is an issue in this case as to whether the sending of the business name extract after the work was done is admissible to identify the responsible contracting party. This issue was not raised before the Magistrate or before me. It must, in any event, be resolved against the appellant. On all of the evidence, Mr Levinson’s addition of ‘Pty Ltd’ after the name New Wave Constructions in his letter of 3 June 2016 was a slip, which remained uncorrected by Mr Marks. The reasonable bystander would so conclude and accept that Botten Levinson and the partnership New Wave Constructions were the contracting parties. No reasonable bystander would find that Botten Levinson had agreed to do work for a non-existent corporate entity. The best evidence as to the partnership in existence at the time that agreement was made is the extract, which operates as an admission by Mr Marks and Mr Coggins, as to the identity of the contracting party.
Moreover, it appears that the business of the partnership New Wave Constructions was building developments. Only natural persons, I am told, can hold a builder’s licence, or at least that appears to have been Mr Marks’ belief because he repeated it today. That is an explanation for both natural persons and the trustee entities carrying on business as New Wave Constructions.
On the appeal, Mr Marks seeks permission to adduce further evidence. That further evidence shows that the trustees of the trusts were never Mr Marks and Mr Coggins respectively. That can be accepted. It can also be accepted that the entities which formed the partnership included at least the trustees of those trusts. It does not follow though that the partnership only comprised the trustees of their respective trusts. There is no reason why the partners could not also have included Mr Marks and Mr Coggins personally, and I have just adverted to the reason why that might have been so. Accordingly, the further evidence which shows that the trustees were corporate entities does not necessarily show that Mr Marks and Mr Coggins were not also engaged in the partnership.
Mr Marks also relies on a document that appears to have its origins in the Australian Taxation Office. It appears that the business activity statements or taxation returns filed for the partnership record the entities incurring costs and earning income out of the partnership New Wave Constructions were the corporate entities alone, as trustees. Mr Marks has not demonstrated that that treatment of profit and loss for the purposes of taxation is inconsistent with the proposition that Mr Marks and Mr Coggins had made themselves liable for the liabilities should they not be met by the corporate trustees even if they did not draw any income from the partnership. There could be little doubt that they would not have been so liable for, for example, faulty building work.
So in short, there is nothing which would necessarily or even strongly suggest that the judgment that New Wave Constructions, comprising Mr Coggins and Mr Marks personally, and the trustees of their respective trusts, were not properly included in the description of the second defendant, New Wave Constructions. I would, therefore, dismiss the appeal against the judgment of the Magistrate.
It must follow that I also dismiss the appeal against the decision of Judge Bochner. Indeed, the simple proposition on the hearing as to who the proper party was before Judge Bochner ought to have been that it was res judicata having been determined in the Magistrates Court and could not, therefore, be revisited unless and until that decision was set aside. I note in passing that as it transpires, the evidence before Judge Bochner, and indeed Mr Marks’ own evidence including his cross-examination, makes that conclusion even clearer.
The question which now arises is what amendments should be made to the orders in the Magistrates Court staying the judgment for 14 days to allow New Wave Constructions and its component entities to apply for an adjudication. As the Magistrate noted, even at the time of her judgment handed down some two years ago, New Wave Constructions was out of time for the bringing of such an application. Much more time has since passed. It is important that this matter be brought to an expeditious conclusion.
This Court has power to consider an application for an adjudication by a client or third party payer to adjudicate and settle a bill for legal costs. The application can be made even if the legal costs have been wholly or partly paid. That jurisdiction is given by clause 37 of Schedule 3 to the Legal Practitioners Act 1981 (SA) (the LPA).
Clause 37(4) of the LPA provides that an application must be made by the client or third party payer within six months after the bill was given or the request for payment made or after the costs were paid if neither a bill nor a request was made. Clause 37(5) of the LPA allows an application to be made out of time by someone other than a ‘sophisticated client’ or third party payer. I proceed on the basis that the defendants in the Magistrates Court action are not sophisticated clients as defined.
If an order extending time has not been made, I will proceed to make one. If it has been made, I revoke it and make an order in the following terms: the basis I would revoke it is because of the passage of time and what has since transpired.
I would order that this Court proceed to an adjudication despite the delay if, within a period of time on which I will hear the parties in a moment, New Wave Constructions pays the interim allocaturs that have been issued by Judge Bochner and the costs of the hearing of today’s appeals, in an amount which I will fix in a moment. I will make those orders on the basis that if those payments are made within the time that is fixed, then it would be fair for the application for adjudication to be dealt with notwithstanding the lapse of time, holding, therefore, by implication, that if those payments are not made, it would be unfair to prolong the matter and add to Botten Levinson’s expenses on the adjudication.