Patrick Smith Lawyers v Green
[2024] VSC 446
•30 July 2024
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
PRACTICE COURT
S ECI 2024 01258
| PATRICK SMITH LAWYERS | Applicant |
| v | |
| JANE GREEN (a pseudonym) | Respondent |
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JUDGE: | Gorton J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 16, 23 July 2024 |
DATE OF JUDGMENT: | 30 July 2024 |
CASE MAY BE CITED AS: | Patrick Smith Lawyers v Green |
MEDIUM NEUTRAL CITATION: | [2024] VSC 446 |
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COSTS – Unpaid legal costs – Application for costs assessment – Where applicant is the law practice – Whether having regard to the delay and reasons for the delay it is just and fair for application for assessment to be dealt with outside of 12-month period – Where dispute as to when respondent was sent invoices – Where applicant acted reasonably in sending invoices and seeking recovery – Where respondent unlikely to suffer specific prejudice – Where respondents’ health condition would have been present if applicant had brought application within time – Extension of time granted – Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 – Legal Profession Uniform Law (Schedule 1 of the Legal Profession Uniform Law Application 2014 (Vic)) s 198.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr A Richardson | Patrick Smith Lawyers |
| For the Respondent | Self-represented |
HIS HONOUR:
A. Introduction
On 19 March 2024, the applicant, Patrick Smith Lawyers, a law firm in Ascot Vale, applied by summons for a taxation (or ‘assessment’ – I will use the words interchangeably) of costs for work performed for its former client, Jane Green (a pseudonym). The relevant invoices are for work performed in the period prior to the end of June 2020. Section 198 of the Legal Profession Uniform Law[1] (‘the Uniform Law’) entitle a law firm to apply for an assessment of legal costs payable to it, but requires that the application be made within 12 months after the bill was given to, or the request for payment was made, to its client. Section 198(4) allows an application that is made out of time to be dealt with by the costs assessor if the ‘designated tribunal’ (here, a judge of this Court[2]) determines, after having regard to the delay and the reasons for the delay, that it is just and fair for the application for assessment to be dealt with after the 12-month period. On 3 April 2024, Judicial Registrar Conidi referred that question to a judge of this Court (the ‘designated tribunal’).[3] The application has been argued on the assumption that, if the costs are not able to be assessed, the applicant will not be able to recover them.[4]
[1]Being Schedule 1 of the Legal Profession Uniform Law Application 2014 (Vic).
[2]A ‘designated tribunal’ is defined in s 6(1) of the Uniform Law to be a court or tribunal specified or described in a law of this jurisdiction for the purpose of a provision, or part of a provision, of the Uniform Law in which the term is used.
[3]See, eg, Marshalls & Dent & Wilmoth v Tandos [2024] VSC 44, [39] (Quigley J).
[4]As to which, see s 198(7)(b) of the Uniform Law.
I am not to determine whether the costs the applicant seeks to recover are fair or excessive or whether it provided services of an adequate standard. The only issue before me is whether, after having regard to the delay and the reasons for the delay, it is just and fair for the application for assessment to be dealt with after the 12-month period.
B. Background
The respondent was the applicant’s client from late 2019 to June 2020. The applicant prepared two ‘tax invoices’ for its work. The first was dated 20 August 2020 and was for work done between (it asserts) 29 October 2018 and 2 April 2020 in relation to an application for an intervention order. That invoice was for $5,665. The second was dated 3 June 2021 and was for work done (it asserts) between 28 October 2019 and 17 June 2020 in relation to family law disputes. After crediting $11,220 from moneys in trust, that invoice was for $19,491.49. Neither invoice has been paid.
On 8 May 2024, Mr Smith of the applicant swore an affidavit in which he deposed that:
(a) He sent both invoices to ‘both of [the respondent’s] available email addresses’ on 3 June 2021. The invoices were also posted to an address that the respondent had provided as her domicile. He also sent various reminder emails and texts, none of which were responded to;
(b) On 15 June 2022, he attempted to commence a proceeding in the Magistrates’ Court of Victoria at Melbourne for the unpaid fees. That Court ‘rejected’ that ‘filing’. On 11 August 2022, the proceeding was commenced in the Magistrates’ Court at Kyneton (because he thought the respondent lived in Gisborne);[5]
[5]The Complaint itself was dated 22 July 2022, but was filed on 2 August 2022.
(c) On 9 February 2023, there was a compulsory pre-hearing conference at the Kyneton Magistrates Court in Kyneton that was ‘unsuccessful’. The clear implication from the affidavit is that the respondent was present at the pre-hearing conference;
(d) On 17 August 2023, the Magistrates’ Court in Kyneton ruled that the proceeding had to be ‘re-filed’ at the Magistrates’ Court in Melbourne. This was done;
(e) On 8 November 2023, the Magistrates’ Court at Melbourne ordered that the matter be referred to the Costs Court in the Supreme Court of Victoria because the proceeding was a dispute about fees; and
(f) On 5 March 2024, the Costs Court raised the question as to whether the proceeding was ‘out of time’.
As noted above, on 19 March 2024 the applicant filed a summons for taxation of costs. The summons was returnable on 3 April 2024, and on that day Conidi JR ordered that the applicant’s application for an extension of time pursuant to s 198(4) of the Uniform Law be referred to a Judge of this Court for hearing.
On 7 June 2024, the respondent, who was a police officer with the rank of Senior Sergeant but on sick leave from January 2021 until her retirement on 22 March 2022, swore that:
(a) The applicant did not have her sign a costs agreement or disclosure statement;
(b) She ‘concluded all matters and services’ with the applicant on 20 June 2020 due to dissatisfaction with the work it was doing;
(c) She provided the applicant with her home address in Altona (where she had continually resided at all relevant times), her mobile phone number, her home land-line number and a professional and private email address;
(d) She had ‘never resided’ at the Gisborne address and had ‘no contact with or connection to it or any person residing therein’ – the affidavit conveys the impression that the address was completely unknown to her;
(e) In September 2022, she found some emails from the applicant that had been sent to her personal email address but had been placed in her ‘junk’ folder that, among other things, attached a complaint lodged at the Magistrates’ Court at Kyneton on 2 August 2022. The complaint indicated that the respondent resided at an address in Gisborne but she had never resided at that address. She filed a notice of defence;
(f) She had not received any correspondence from the applicant sent to her home address or any calls to her mobile or home phones;
(g) At a case conference on 8 February 2023, it was ‘determined’ by the Registrar that she had not received the ‘documents’ and that the applicant was given seven days to provide them to her. She was provided with the documents on 14 February 2023 and that was the first time she had seen the two invoices;
(h) In July 2023, it was ‘determined’ by the Magistrate that the applicant had received ‘out of office’ replies from her work email address, had not contacted the person nominated in those out of office replies, and had not attempted to provide the documentation to her at the (correct) home address and contact phone numbers they had on their file; and
(i) At hearings in the Magistrates’ Court in July 2023, it was otherwise ‘determined’ that the applicant had at all relevant times her correct home address and contact numbers on their file but did not attempt to contact her on that address or on those numbers. The matter was subsequently heard by the Magistrates’ Court on 8 November 2023 and then transferred to this Court.
The respondent, in her affidavit, also exhibited an affidavit sworn by Mr Smith for the applicant on 9 August 2022 that was prepared in support of an application for substituted service in the Magistrates’ Court. In that affidavit, Mr Smith swore that:
(a) The respondent’s ‘last known residential address’ the applicant had on file for her was the Gisborne address, but that correspondence sent to that address had been returned and he did not know where the respondent then resided; and
(b) He had sent correspondence to the respondent’s work and private emails, and texted her mobile phone, but none of those ‘attempts at contact’ had ‘yielded a response’ from the respondent.
On 16 July 2024, Mr Smith swore another affidavit, in this proceeding, in which he produced the complaint and respondent’s notice of defence and his reply filed in the Magistrates’ Court, and said that the issue of ‘non-compliance’ was first raised on 8 November 2023. In its reply, the applicant had accepted that it had not sent the invoices until 3 June 2021, but ‘utterly refuted’ the respondent’s denial that she received them.
More significantly, on 18 July 2024 Mr Smith swore another affidavit that responded to and disputed some of the assertions that Ms Green made in her affidavit. Mr Smith swore that:
(a) In 2019, he provided a disclosure statement and the respondent signed a fees agreement. He produced a copy of both with signatures of the respondent dated 1 November 2019. A 2020 disclosure statement was also produced that the respondent had not signed. He swore that the 2020 disclosure statement had been posted to the respondent at her Altona address, and he produced the covering letter and a page from his mail records indicating that a letter was sent to the respondent on the date on which he signed both this disclosure statement and the covering letter, and that no response was received;
(b) Ms Green had communicated with him in 2020 using two email addresses, a work address and a personal address. He produced emails from Ms Green from both of those addresses;
(c) On 9 May 2020, he had asked the respondent, as a condition of the applicant continuing to act, to transfer $250 each week or each fortnight into his account for her ‘payment plan’ in order to keep her fees from ‘growing out of control’ and that she agreed to do so. He produced these emails. On 11 May 2020 the respondent said that after the first $250 payment she would arrange to have $500 transferred on the 15th of each month. She also said: ‘Just so you know I would have continued to pay you even if you chose not to represent me – I am honest – I would never leave monies owned to anyone especially someone who stepped in to help’. Mr Smith said that only $500 in total was paid in this way;
(d) In June 2020, the respondent told him that she was moving to a Gisborne address to be closer to her children’s school. He produced:
(i) an email from Ms Green of 3 June 2020 in which she said: ‘my residence [in] Gisborne is secured and I will commence residing there this week’;
(ii) an email from Ms Green of 11 June 2020 in which she said: ‘I have moved to Gisborne’ and ‘currently am residing there the required 5 nights’; and
(iii) an email from Ms Green of 16 June 2020 that identified the actual address in Gisborne.
These emails were sent from both Ms Green’s nominated work email address and her personal email address;
(e) On 3 June 2021, he posted the invoices, a trust statement and a ‘notification of rights’ to Ms Green at the Gisborne address and by email to Ms Green’s personal email address. He produced the emails and covering letter;
(f) He said the delay in forwarding invoices until 3 June 2021 was due to a combination of administrative difficulties associated with the COVID pandemic and his awareness of the respondent’s difficult financial position;
(g) On 3 July 2021, he emailed the invoices again, this time to both Ms Green’s personal and work email addresses. He received an automated response from the work email address, but, contrary to what the respondent said, the automated response gave the name of, but no contact details for, the police inspector to whom he could speak if required, and he chose, in any event, not to send the invoices to some other police officer out of concerns for the respondent’s privacy. He produced a copy of these emails;
(h) On 3 August 2021, he sent a text message to Ms Green (presumably to her mobile phone) referring to the outstanding invoice and asking for payment, offering a ‘payment plan’, and asking that she call. He produced a screenshot of the text message;
(i) On 16 September 2021, he again emailed reminders of the unpaid invoices to the two email addresses. He produced that email;
(j) On 10 December 2021, he again emailed reminders of the unpaid invoices to the two email addresses with a covering letter of demand. He produced that email and the letter of demand;
(k) On 15 August 2022, he obtained an order for substituted service of the Magistrates’ Court proceeding that permitted service by email sent to the two email addresses;
(l) On 23 August 2022, he sent another text message to Ms Green advising that proceedings had been commenced and that the initiating documents had been sent by email to the two email addresses, and he produced a screenshot of that text message; and
(m) He never obtained any communication indicating that any emails had gone to the respondent’s ‘junk’ folder and was not aware of that assertion until the respondent made that assertion in the Magistrates’ Court.
Ms Green then filed another affidavit, sworn on 20 July 2024, in which she:
(a) Explained that she had become psychiatrically unwell during 2021 and had little money;
(b) Repeated her assertion that the reply email from her work email address gave the contact details for someone who could be contacted;
(c) Repeated her assertion (not denied by Mr Smith) that the applicant at all times had an Altona address, her mobile phone number, and a home phone number for the Altona address;
(d) Asserted that she had not received the 2020 disclosure statement. She did not repeat her assertion that she had never received or signed any disclosure statements;
(e) Noted that remarks about the Gisborne address were ‘taken out of context’ as she said she had at one point sought the Gisborne address to facilitate proposed orders being accepted by another court, but then told the applicant by phone on 20 June 2020 that she would not be moving to Gisborne after unfavourable court orders were made on 18 June 2020; and
(f) Set out further complaints about the applicant’s representation, including the result she received from the Family Court.
Then, on 21 July 2024, Ms Green swore an affidavit in which she deposed that she was diagnosed with psychiatric illnesses in early 2021 and on sick leave from that time until her retirement in March 2022. She produced a report from her current treating psychologist in which the psychologist explained that the ‘ongoing legal process has exacerbated’ her chronic post-traumatic stress disorder and major depressive disorder and that her health had deteriorated over the ‘past couple of months’.
B. The statutory framework
The role of the cost assessor (here, the Costs Court) is to ‘determine whether legal costs are fair and reasonable and, to the extent they are not fair and reasonable, determine the amount of legal costs (if any) that are to be payable’.[6]
[6]Uniform Law s 199(2).
Under s 198(3) of the Uniform Law, the 12-month period dates from when ‘the bill was given’ or ‘the request for payment was made’, rather than by reference to, say, the time the work was performed. Presumably, this is because it will ordinarily be the client, rather than the law practice, who will be applying for costs to be assessed. In the absence of some obligation on a legal practice to give a bill or request payment within a specified time after the performance of the work, this is quite surprising. The Legal Profession Uniform General Rules 2015[7] relevantly provides that a bill is to be given by a law practice to a client by personal delivery, sending it by post or leaving it at the usual or last known business or residential address of the client or at the address nominated to the law practice for that purpose by the client, or, in the case of a client who has consented to receiving bills sent electronically, by means of the client’s usual email address or mobile phone number or another email address specified by the client.
[7]The Uniform Rules are the Rules promulgated in New South Wales – see s 431 of the Uniform Law.
A complication in this case is that the respondent contends that she was not aware of the claim for fees until she found the Magistrates’ Court complaint in her junk email box in September 2022 and that she did not receive the invoices until 14 February 2023. She does not accept that the applicant sent the invoices to her usual or last known business or residential address or to an address nominated by her. Potentially, therefore, the 12-month period did not expire until at least September 2023 and perhaps February 2024. This is because it can hardly be said, it seems to me, that a bill is ‘given to’ a client, or a ‘request for payment is made to’ a client if the bill or request is sent in a manner that never in fact reaches that client and is known never to have reached that client. On the other hand, the applicant contends that he did send the invoices to an address nominated by the respondent or what was said to be her residential address in June 2021, which could mean that the 12-month period expired in June 2022.
As noted above, the applicant filed a summons for the taxation of costs on 19 March 2024. Depending on whether time has started to run from when the invoices were sent in June 2021, or from the time when the respondent first saw the Complaint (on the grounds that the discovery of the Complaint meant that the ‘request for payment’ was then made), or when the respondent first received the invoices in February 2023 (if that is the case), the extension of time required ranges between just over a month to two years.
C. Should time be extended?
It is not necessary to determine whether time expired in June 2022 or in September 2023, because the delay under consideration is not limited to the time after the period has expired. As is well established in applications for extensions of time, once time has expired, the Court is concerned with all periods of delay (and associated prejudice) including delays within the relevant time period and is not only concerned with any additional prejudice that may be associated with the effluxion of time after the expiration of the limitation period.[8] Accordingly, it makes little real difference whether the 12-month period expired in June 2022 or in September 2023 (or some other time in between).
[8]Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, 548 (Toohey and Gummow JJ).
It is accepted that the applicant performed work for the respondent, at her request, for which she has not paid.
The respondent has sworn, and I accept, that she developed a psychiatric illness causing her to cease work in early 2021 and has little income. I accept that the taxation of costs would cause her distress and that the payment of legal fees to the applicant would cause her hardship. Those matters, however, are not decisive. As noted above, it is not my role to determine what level of costs are properly payable, and merely being faced with a claim that would otherwise not be able to be made is not the sort of prejudice with which an application for an extension of time is principally concerned. Significantly, and although the respondent contends that the applicant provided poor service for which she ought not to pay and she does not accept the reasons the applicant has put forward for the delay, she has not identified any specific prejudice that she would suffer in the taxation by reason of the delay.[9] Her main concern was that the explanations put forward for the delay were poor, that she was unwell and under stress, and that if the invoices had been sent in 2021 then this issue would have been ‘done and dusted’ then and she would have ‘healed and moved on’.
[9]The respondent accepted that she had a ’pretty good memory’ of the events associated with the applicant’s representation.
The respondent did not accept that Mr Smith sent the text messages to her phone. As noted above, the applicant produced screen shots of those messages. The screen shots indicated at the top that they were sent to a contact bearing the respondent’s name. Mr Smith identified the number associated with the respondent’s contact. It was the correct number. The respondent suggested that Mr Smith had changed the phone number in his contacts list to the correct number after he had sent the messages to a different number. In response, Mr Smith gave oral evidence to the effect that the messages were sent from a work phone and the only mobile number he had was the correct one and that he had not changed the number on his list of contacts. In light of that evidence, I accept Mr Smith’s evidence that he sent the text messages and that he sent them to the respondent’s mobile phone.
In light of the email response produced by the applicant, I reject the respondent’s evidence that the automatically-generated response from her work email gave contact details of a person whom the applicant could contact. The automatic reply sent to the applicant mentioned a name of another officer, but gave no other information. It merely stated:
I am currently unavailable. Please refer any enquiries to Inspector [name given].
Further, I reject the respondent’s submission that the applicant should have emailed the invoices to the nominated work contact. The invoices related to personal legal disputes. It would have been most unwise, in my view, without explicit permission, for the applicant to communicate with the respondent’s senior colleagues about these issues, especially when the applicant had no reason to consider that emails sent to the respondent’s personal address were not being received.
In circumstances where the respondent has been on notice of the claim for costs since September 2022, the most concerning matters, it seems to me, are:
(a) The period of delay of almost 12 months between the completion of work in late June 2020 and the sending of the invoices on 3 June 2021;
(b) The simple and powerful argument put by the respondent: ‘Why didn’t the applicant either send the invoices to my original Altona address, or give me a call when I didn’t respond?’;
(c) The general prejudice that is associated with a taxation in 2024 of work performed in 2020, in the sense that memories will have faded and there will inevitably now be difficulties in evaluating that work;[10] and
(d) The fact that the respondent is unwell and will, I am satisfied, suffer psychological distress responding to the application for taxation if leave is granted.
[10]Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, 551-2 (McHugh J).
I accept, however, the applicant’s explanation that the initial delay was contributed to by the problems associated with COVID-19 and a wish not to impose costs on the respondent during those times. It must not be forgotten just how disrupted 2020 was. In light of the evidence and documents produced by the applicant, I also conclude, in addition to the findings set out above, that:
(a) The respondent did convey to the applicant in writing that she would be residing at the identified address in Gisborne;
(b) It was reasonable for the applicant to send the invoices to the Gisborne address and to the email addresses that had been used previously to communicate with the respondent;
(c) As at June 2020, the respondent probably knew that she still owed fees to the applicant. In my view that inference flows from the email communications by which the respondent said that she would have continued to pay Mr Smith even if he had ceased acting for her at that time. In light of those contemporaneous communications, I do not accept the respondent’s assertion to the contrary;
(d) The applicant had no reason to doubt that the personal email address was an effective means of communicating with the respondent. Accordingly, the applicant was entitled to assume, in the circumstances, that the invoices had been received, at least by email, by the respondent, but were being ignored;
(e) It was reasonable for the applicant then to seek to recover its costs by commencing a proceeding in the Magistrates’ Court, albeit that the matter is now proceeding as a taxation rather than as a debt claim;
(f) The respondent was likely to suffer distress with any claim for costs, whether brought in 2021 or now; and
(g) The respondent has been fully aware of, and engaged with, the claim for costs since September 2022.
In those circumstances, on balance, having regard to the delay and the reasons for the delay, I am satisfised that it is just and fair for the application for assessment to be dealt with notwithstanding the expiration of the 12-month period.
I will hear the parties on the form of order and on the question of costs.
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