Picamore Pty Ltd v Challen
[2015] QDC 67
•31 March 2015
DISTRICT COURT OF QUEENSLAND
CITATION:
Picamore Pty Ltd v Challen [2015] QDC 67
PARTIES:
PICAMORE PTY LTD
(applicant)
v
PETER LESLIE CHALLEN
(respondent)
FILE NO/S:
D 2479/13
DIVISION:
Civil
PROCEEDING:
Review of costs assessment
ORIGINATING COURT:
District Court, Brisbane
DELIVERED ON:
31 March 2015
DELIVERED AT:
Brisbane
HEARING DATE:
4, 5 September 2014
JUDGE:
McGill DCJ
ORDER:
Assessment varied by increasing the amount allowed for professional costs by $20,304.00.
CATCHWORDS:
COSTS – Solicitor and client – assessment – whether legal service performed – whether reasonable to do work, and whether done in reasonable way – some items adjusted.
Legal Profession Act 2007 s 341(1).
Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621 – distinguished.
Clayton Utz Lawyers v P & W Enterprises Pty Ltd [2011] QDC 5 – cited.
Pryles & Defteros v Green [1999] WASC 34 – distinguished.
Radich v Kenway [2014] QCA 301 – cited.
Southwell v Jackson [2012] QDC 65 – distinguished.
Tabtill No 2 Pty Ltd v DLA Phillips Fox (a firm) [2012] QSC 115 – cited.
ReWalsh Halligan Douglas’ Bill of Costs [1990] 1 Qd R 288 – followed.COUNSEL:
D de Jersey for the applicant
D J Topp for the respondent
SOLICITORS:
Plastiras Lawyers for the applicant
Hawthorn Cuppaidge and Badgery for the respondent
This is a review of a costs assessment conducted pursuant to the Legal Profession Act 2007 (“the Act”). The applicant retained the respondent to act as its solicitor, in particular in relation to a dispute with another company over some land in New South Wales, and a costs agreement was entered into on 6 October 2011.[1] The respondent continued to act until September 2012 when his instructions were withdrawn.[2] The respondent rendered seven invoices to the applicant between October 2011 and August 2012, totalling $286,923.55, all of which were paid in full.[3] On 18 September 2013 a further invoice was sent for other costs not previously charged.[4] On 9 July 2013 however the applicant applied for the costs in respect of the first seven invoices to be assessed under the Act, and another judge made such an order on 9 August 2013. The respondent subsequently applied to set aside that order, and its operation was stayed by another judge, but on 28 November 2013 I lifted the stay, and ordered that the costs the subject of the invoice of 18 September 2013 also be assessed.
[1]Affidavit of Johnston filed 9 July 2013 (“Affidavit 1”), Exhibit ATJ-01.
[2]Affidavit 1, para 14; affidavit of Johnston filed 14 November 2013 (“Affidavit 2”), para 32; item 1081. I address the date below.
[3]Affidavit 1, para 11, 13; Exhibit ATJ-02. They cover work done from 24 March 2011 to 22 August 2012.
[4]Affidavit of Smith filed 25 September 2013 para 32, Exhibit KFS-23.
The costs assessor filed a certificate of the assessment on 6 March 2014 by which she certified that professional costs were assessed at $106,378 and disbursements at $704.83. The assessor’s fee of $19,247.27 and the applicant’s costs of the assessment, assessed at $5,651.20, were both payable by the respondent. Taking into account the amount already paid, there was a balance payable by the respondent to the applicant of $204,739.19. On 13 March 2014 a deputy registrar made an order that that amount be paid to the applicant. On 22 April 2014 the respondent filed an application to review the assessment. That came before another judge who gave some directions, and adjourned the matter for hearing on the civil list, and it came again before me. Over two days I heard submissions on behalf of the parties, and looked at a number of documents from the solicitor’s file, during which time about half of the list of items being challenged on the review were worked through. The balance I have worked through on the papers.
Ordinarily in a review of a costs assessment I would look at the costs statement, look at the notice of objection, and look at the reasons of the assessor (if provided) in relation to those items of the assessment which were challenged on the review, hear submissions on the point and deal with the matter raised. In the present case, however, there is the difficulty of there was no costs statement. The respondent provided an invoice accompanied by what was described as an itemised invoice in each case, but this was simply a list of amounts charged with the date, a brief description of what was done (for example “perusing email from X”) the relevant person was identified, the time taken in hours to one decimal place, and the charge made. Because these items did not explain the justification for the work being done, or contain very much information about its content, the provision of these particulars did not make the invoice an itemised bill as defined in s 300 of the Act.[5]
[5]Clayton Utz Lawyers v P & W Enterprises Pty Ltd [2011] QDC 5 at [21]-[30]; Tabtill No 2 Pty Ltd v DLA Phillips Fox (a firm) [2012] QSC 115 at [78]-[84].
The applicant was entitled under s 332 to ask for an itemised bill and did,[6] but it was never provided. When the order for assessment was made, unfortunately no order was made for the preparation of an itemised bill covering the costs to be assessed. This would normally be in the form of a costs statement, and it is usual for the party seeking the assessment to be given the opportunity to identify any particular objections to the items in the statement. It is still necessary however for the assessor to assess the whole bill, if that is what is ordered by the court: Radich v Kenway [2014] QCA 301 at [36]. If the practitioner has already provided an itemised bill, that can usually stand, but if not it is appropriate to direct that one be provided, so as to form the basis of the assessment. That however was not done in the present case.[7]
[6]Affidavit 1 para 15; Exhibit AJT-03.
[7]This was at the suggestion of the applicant’s solicitor, that the costs assessor perform the assessment from the file: affidavit 1, Exhibit ATJ-08. It was done to save costs, but I think it has increased complexity in the long run.
What happened was that the assessor prepared a schedule of claims and reductions which was in form something like a costs statement, with various items of work identified by number and dated, and columns for the outlays and amounts of costs allowed, with another column containing comments on the amounts claimed where that was different (at least sometimes) and some explanation for why the amount claimed had not been allowed.[8] The document runs to 182 pages, and is a combination of a costs statement, a schedule of adjustments and a statement of reasons. The document was prepared by the assessor after she had had access to the respondent’s file for the matter, but it was sometimes difficult to identify an item in the schedule of claims and reductions with a particular entry in an itemised invoice of the respondent. There were a couple of occasions during the review where there was argument about the appropriateness of the costs assessor having not allowed a particular amount and it emerged that the particular amount had not in fact been charged to the client.
[8]Filed on 7 April 2014. There were also reasons filed on 9 April 2014, dealing specifically with the decision on items 656 and 681.
What it appears the costs assessor did was identify some documentation on the file which suggested that a particular person had done something, which under the costs agreement would on the face of it have given rise to a charge of x dollars, and then decided whether that charge was properly made, but the obligation of the assessor was to assess the legal costs in fact charged by the respondent, so only something which turned up in the itemised invoices could properly be assessed, and indeed needed to be assessed; the respondent was confined to what he had charged, the question being whether he was entitled to all of that. One can sympathise with the difficulty the costs assessor faced due to the absence of an itemised bill, and perhaps some difficulty in reconciling the solicitor’s documentation with the invoices, but it might have been better to have numbered the items on the itemised invoices and then assessed by reference to those items. I suppose this just emphasises the importance of having a proper itemised bill at the time when an assessment is carried out.
Nature of the Review
A review under UCPR r 742 is a form of appeal from the decision of the costs assessor to the court. Given that an application of the tests in the Legal Profession Act by the costs assessor is largely a matter of judgment, the approach on appeal will be similar to the approach on any other appeal from a matter of judgment, which is like the approach on appeal from a matter of discretion. When costs were taxed by taxing officers who were part of the court staff there was a tendency for the court to repose a very high level of confidence in the judgment of those officers: Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621 at 628. There is now the difference that the costs assessors are not part of the court staff, though they are appointed to the position by the principle registrar under r 743(L). The formal qualifications are fairly limited, though I understand that in practice some significant practical experience in matters of costs is required for appointment. The reasons filed by the assessor in this matter on 9 April 2014 give details of the experience of the assessor, and in a number of areas courts recognise that it is appropriate to respect the expertise of a specialist tribunal when dealing with something in the nature of an appeal. Nevertheless, I do not think that the appropriate level of difference to costs assessors is quite as high as that adopted by Kitto J.
In practice it is necessary to show that there has been some specific error made by the assessor, or that the outcome is in the light of the evidence so obviously inappropriate that there must have been some undisclosed error in the exercise of the assessor’s judgment. It is not sufficient just for me to take the view that if I had been performing the assessment I would have assessed at a different amount, but if persuaded that there has been an error it is appropriate for me to exercise the relevant judgment for myself. Unless an error can be shown in one of those ways, the decision of the assessor will stand. In the present case I do not have detailed reasons in respect of all of the items which were raised in the review, though the schedule prepared by the costs assessor does usually give some brief indication of why the decision was reached. In some instances this makes it possible for me to identify that a decision has been reached on what I regard as a wrong basis. The absence of detailed reasons does mean that, in some cases where the decision strikes me as inappropriate in the light of the material I have seen, there is a risk that there will be factors unknown to me, or a process of reasoning not readily apparent, which may have justified the conclusion reached by the assessor. I do not consider however that I should assume that to be the case; rather I decide the review on the basis of such material as is available to me.
Background
The applicant Picamore Pty Ltd was a shelf company in 1993 which was obtained by a property developer, Mr Freeman, to acquire a parcel of land in Bangalow in New South Wales, which was to be subdivided. The transaction settled in 1994 but in the meantime in 1993 there was an arrangement entered into between Mr Freeman, Mr Johnston, and some other people under which the shareholding in Picamore would be transferred to companies associated with Mr Johnston and the other people, and an agreement was entered into between those companies and another company associated with Mr Freeman under which that other company would subdivide and sell off parts of this land progressively, with the proceeds of that subdivision to be distributed in accordance with the agreement. The agreement was expressed to be executed as a deed, but the respondent was of the opinion that the document had not been properly executed as a deed.
In 1997 there was a further agreement entered into, apparently because Mr Freeman was no longer prepared to continue to progress the subdivision of the land under the 1993 agreement. This further agreement purported to supersede the 1993 agreement, and was again expressed to be executed as a deed although again the respondent considered that it had not been properly so executed. One of the changes affected by the 1997 agreement was to substitute a different company associated with Mr Freeman. Mr Johnston and the other people involved alleged that they had been pressured by Mr Freeman into entering into the 1997 agreement, but it does not appear that any attempts were made to unwind the 1997 agreement on this basis. The applicant also executed a mortgage over the land, or what was left of it by this time, to secure its obligations under the 1997 agreement.
It seems that Mr Johnston became dissatisfied with the progress being made under the 1997 agreement, and in December 2003 purported to terminate the agreement, on the ground that a sum due to be paid to Picamore on 30 November 2003 by Mr Freeman’s company had not been paid.[9] Mr Freeman did not accept this, and there was a dispute between them which at one stage involved proceedings in the Supreme Court of Queensland to satisfy a statutory demand on Mr Freeman’s company. It appears that that dispute was not resolved at that time, but eventually the parties ceased actively to pursue it. Picamore was left with the residue of the land, which remains subject to a mortgage in favour of Mr Freeman’s company.
[9]See generally Affidavit 2 para 4. I also obtained information from documents prepared by the respondent at the time.
In 2011 solicitors acting for Mr Freeman’s company wrote to Picamore seeking to reopen negotiations, and Mr Johnston consulted the respondent. Mr Johnston had in the earlier dispute consulted another solicitor, Mr O’Donoghue, who had sold his practice to the respondent, although he remained as a consultant to the respondent. Mr Johnston wanted proceedings brought to have the mortgage removed from the applicant’s land, but before such proceedings were commenced Mr Freeman’s company began a proceeding in the Supreme Court of New South Wales challenging the purported termination of the 1997 agreement, and seeking to have it continue.[10] The respondent acted for the applicant in that proceeding, and for the other parties to the 1997 agreement; a town agent was engaged in Sydney to enable that litigation to be carried on there, and a separate town agent was engaged in respect of the other defendants to that proceeding.
[10]Ibid, para 13.
On 6 October 2011 Mr Johnston received a costs agreement addressed to him and Picamore from the respondent which he executed and returned on behalf of the company and himself. There was also a separate costs agreement addressed to Picamore and two other companies, also entered into by the respondent but in the name of a different legal practice; it appears that for my purposes the second agreement, however curious, is irrelevant. The respondent issued the invoices for the costs in issue in respect of that proceeding until eventually his instructions were terminated in about September 2012.[11] Thereafter the applicant instructed directly the solicitors who had previously been the Sydney town agents. The New South Wales proceedings went to trial in March 2013, but were settled in April 2013.[12]
[11]There was some dispute as to this before me, which I will deal with more fully below.
[12]Affidavit 2, para 40.
One of the issues considered by the costs assessor was whether the respondent had complied with his obligations of disclosure under the Act. The assessor found that he had not, and that finding was not challenged on the review. That has certain consequences under the Act, but it appears that generally speaking the costs assessor assessed the costs in accordance with that costs agreement. Before me neither party challenged that approach.
The respondent has challenged the decisions of the costs assessor on the basis of a document filed on 15 July 2014, giving particulars of the matters sought to be raised on the review.[13] There were a number of matters dealt with in those particulars, which were grouped together under headings raising common issues, and it is convenient to deal with these reasons in the same way. One hazard with this approach was that a few items appeared under more than one heading, which should not have occurred.
[13]This was an amended version of a document which was filed on 13 June 2014 pursuant to the order of the other judge dated 16 May 2014.
Legal research
A number of matters disallowed by the costs assessor related to time spent, either by the respondent or by some employee, undertaking legal research into various matters which were relevant to the dispute, either directly or indirectly. For example, item 187 was a claim to have spent five hours on 20 September 2011 researching the law of trusts, including in relation to constructive and resulting trusts. This was largely disallowed (one hour was allowed) on the basis that it was essentially self-education rather than being attributable to the presentation of the case. Reference was made by the assessor to ReWalsh Halligan Douglas’ Bill of Costs [1990] 1 Qd R 288 where Dowsett J at page 290 noted that it might be difficult for a client “to know whether the hours worked in preparation were fairly attributable to the presentation of his case or whether they might more accurately be described as self-education on the part of an inexperienced or ill-educated practitioner-solicitor or barrister.”
The distinction is, broadly speaking, between those things that a particular solicitor is expected to know, the degree of legal expertise which may be said to constitute the stock in trade of a solicitor, and legal research undertaken to ascertain matters of law which are specific to the needs of a particular client, which are reasonably necessary for the purpose of discharging the solicitor’s retainer, and which cover matters which the client could not reasonably expect the solicitor already to know. It is relevant to consider the particular solicitor concerned, whether practicing as a generalist or a specialist, and if a specialist the extent of expertise held out. For this reason, the charge rate is relevant; an expensive solicitor might reasonably be expected to have a greater fund of legal expertise.
There is however a further consideration which is relevant to legal research, and that is the question of whether the particular research was within the scope of the retainer. In the present case, the costs agreement was very widely drawn, as to the work to be done by the respondent, but generally by reference to the provision of legal services “as requested from time to time”. Accordingly the question becomes in this case whether the client had requested the legal research.[14]
[14]Some of the research items occurred prior to the time when the costs agreement was entered into. The agreement does not purport to be retrospective, but in the absence of a specific agreement the position remains in substance the same, that the respondent is only entitled to charge for work that has been requested by the client.
If a solicitor is asked to investigate a particular legal topic or area which is in fact beyond the solicitor’s fund of expertise, that ought to be disclosed to the client, and the client should be asked whether the solicitor is to undertake research on the point in order to advise the client. It may be appropriate to negotiate a limit to the cost of the research. Alternatively, the client may prefer to seek other advice, or to instruct the solicitor to brief counsel, which may prove to be a less expensive option. If the client has requested legal research by the solicitor, it would still be open to a costs assessor to consider whether the subject matter of the research was something which ought to have been within the reasonable expertise of the solicitor, but the first issue is whether the client actually wanted the research done.
In the present case, I therefore indicated to counsel for the respondent that if the respondent was seeking to establish an entitlement to charge for research it was necessary for the respondent to show the research had been requested by the client, either expressly or by his being requested to do something which impliedly involved the undertaking of legal research, and pointed out that this was something which ought to have been either in writing from the client or evidence by a contemporaneous document. Once I raised this point, the respondent did not press any of the challenges in relation to the question of charges for legal research: p 3-44.[15]
[15]The applicant’s position was that the respondent had conducted research on his own initiative: Affidavit 1, para 32(a)(v).
Incomplete telephone calls
There were a number of items in the schedule where charges had been made for what were described as incomplete telephone calls; that is to say, where the solicitor telephoned but was unable to speak to the person concerned, and, generally, left a message, presumably ordinarily for that person to return the call. An example of this was item 383, where there was an attempt to telephone counsel but a message was left for counsel to return the call, which subsequently occurred the same day: item 384. An allowance was made in respect of that call, though not the full amount claimed by the solicitor, on the basis that there was not sufficient evidence in the file to justify allowing the amount claimed.
With regard to item 383 however this raises a question of principle of whether any legal service has actually been provided for the purposes of the costs agreement. I was not referred to any authority on the point, and am not aware of any.[16] In a sense something was achieved by leaving the message, because counsel subsequently telephoned back and in that way the solicitor was put in communication with counsel, when presumably some relevant legal service was provided. Attempting to telephone someone in this way does take some time, not just for the actual call, but because it is necessary to prepare for the call and be ready in case the person concerned is there and does speak immediately; it cannot be known in advance that the person concerned will not be available. Reference was made to my comment in Southwell v Jackson [2012] QDC 65 at [52], but that occurred in the context of a discussion of the term “attendance”; it did not reflect a considered conclusion that such an attendance necessarily involved the provision of a legal service.
[16]Solicitors’ charges for failed attempts to attend on the client have long been the stuff of legal humour: see e.g. Megarry, RE, “Miscellany at Law”, (Stevens & Sons Ltd, 1955) p 259; Leon, H.C. (“Henry Cecil”), “Daughters-in-Law”, (Michael Joseph, 1961) chapter 10.
It appears to me that in principle something of this nature cannot properly be charged for under the costs agreement. That agreement is concerned with the provision of legal services, and not simply spending time doing things in connection with the matter. I do not think it is enough simply to say that the solicitor was at the time attempting to provide a legal service, and it was not his fault that the provision of that service did not materialise. It is not to the point that the fact that the attempt was made to contact the solicitor opposite on this occasion might have become relevant at a later date. I agree with the costs assessor that, if nothing was achieved, no legal service has been provided, and so no charge can be made in accordance with the costs agreement. Accordingly I conclude that in relation to item 383, and other similar items,[17] the costs assessor’s decision was correct.
[17]Including items 267, 288, 315, 325, 383, 477, 528, 591-3, 776, 807, 810, 925, 930, 975, 986, 828, 1032.
Amount of time charged for
There was a general objection in relation to a large number of items in the invoices that the amount of times claimed to have been spent on a particular task was excessive and unreasonable, and many of the items were reduced on this basis, although a number of items were reduced on the related basis that the material on the file did not adequately demonstrate that the amount of time claimed had in fact been spent on that item. That is really a separate point. The onus is on the practitioner to show that there is an entitlement to charge the amount sought to be recovered for the legal services performed, and to justify by file notes or other appropriate means the amount of the charge by showing that it does reflect legal services actually provided. If the amounts claimed are not adequately documented, it follows that the claims must be disallowed, or allowed only to the extent that they are properly documented, unless it is apparent from other material or the logic of the situation that some amount of time must have been spent on the task in question.
Assuming however that the material available on the file does document adequately that particular time has been spent on a particular task, it remains relevant for the costs assessor to consider whether or not it was reasonable to carry out that work and whether or not that work was carried out in a reasonable way: s 341(1). If the costs assessor concludes that the amount of time applied to a particular task was excessive, it is appropriate for the costs assessor to reduce the amount claimed to an amount which reflects the charge under the costs agreement for the time that would have been taken had the work been carried out in a reasonable way. In the case of a number of items it was submitted that the amount allowed by the assessor was too restrictive.
Court documentation – pleadings
The assessor reduced the amount claimed on item 271, partly on the basis that there was no sufficient evidence to support the time of 90 minutes claimed in the invoice,[18] and on the basis that there had previously been a claim for perusing the summons in New South Wales, and the commercial list statement, at item 249. That item included a charge for perusal, so someone had perused them, and it appears that the respondent had already discussed the pleadings with the client (item 261). On the same day as item 271 there were three telephone calls discussing the matter including one specifically discussing pleadings and issues (item 268 – four units claimed), though that may have occurred after this perusal. Assuming that the full amount claimed was in fact spent in the way described, in my opinion it has not been shown that the assessor erred; I regard 30 minutes as adequate for the work described.
[18]A diary note was produced to me, one page of analysis of the summons.
Item 343 was a claim for 1.8 hours for receiving and reading an email and 24 pages of enclosures, the amended summons and the amended commercial list statement as filed, for which perusal was claimed. One hour was allowed, which seems to me to be ample. There were extensive amendments, but several pages required little in the way of perusal.
Item 881 was a total of nine and a-half hours claimed in respect of amendments to the responses of the first defendant and second to the fifth defendants, and amendments to the commercial list statement and cross-claim. It was said that this was not properly supported by documentation, many of the amendments were things that ought to have been done correctly in the first place, and there were further errors which still had to be corrected later. The costs assessor allowed just under three hours, plus the secretarial rate for typing up the changes. As counsel for the applicant noted, these amendments were a work in progress at that time, being subsequently sent to counsel. The response of the first defendant was sent for filing on 12 December 2011 (item 391) and almost at once there were discussions with counsel about amendments: items 407, 418, 419, 442, 449, 467, 471, 472, 476. There were phone calls to the client about this (item 473, 475) and the pleadings were revised and errors detected: item 474. Then item 479 claimed 1.8 hours for drafting the amendments, reduced to 48 minutes which, given the work already done by counsel, strikes me as adequate. There was in item 790 a claim of 2.5 hours to review the pleadings to identify any need for amendment, which was disallowed. Later item 881 claimed 9.5 hours for drafting further amendments, after the affidavits had been prepared. Just under 3 hours was allowed. The respondent was able to produce for the review a diary note which did appear to support the time claimed, but this does not get over the question that a very large amount of time does seem to have been spent on these amendments, and I am not persuaded to differ from the amount allowed by the costs assessor.
Item 885 claimed for drafting a subpoena, a standard form except for the schedule, two folios, which was drafted, together with a file note, for which 1.5 hours was charged. Again it was said there was no contemporaneous documentation, and that the amount of time spent was unreasonable, and the charge was reduced to 12 minutes of drafting and 12 minutes of typing at a secretarial rate. That strikes me as reasonable for drafting the two folios of the schedule to the subpoena.
Item 902 was for engrossing changes proposed by counsel, for which the solicitor claimed one hour. There had been the previous claim for drafting the amendments and the solicitor had discussed these by telephone with counsel (item 899)[19] and received comments from counsel, for perusing which a separate charge was made: item 901. It seems to me that there was no entitlement to charge extra for further drafting at this point, as it was simply a matter of performing the mechanical exercise of making the changes to the document proposed by counsel. The allowance by the costs assessor was reasonable.
[19]After sending them to counsel: item 889.
Item 905 was 1.5 hours for drafting amendments to the response of the second to the fifth defendants to reflect changes to the first defendant’s response. Again the work involved seems excessive in circumstances where there had been already some charge made in relation to amendments to that response under item 881, and the changes ought to have been reasonable obvious in circumstances where they were essentially responsive to changes already made to the other response. In these circumstances the reduction made by the costs assessor seems to me to be appropriate although I accept that there is a file note showing 1.5 hours spent on this.
Item 972 was a claim for two hours for amending the pleadings, said to be unsupported by evidence on the file, and in any event to be simply an exercise in overcoming previous errors. It may be that this item was associated with another item the same day, perusing an email from the client concerning errors in the affidavit material and the pleadings. I note that almost a week earlier the final drafts of amended pleadings had been forwarded to counsel: item 953. It does appear to me on the material available that this was fixing mistakes in the pleadings which ought not to have been made, and for which it was therefore not reasonable for the solicitor to charge. I agree with the costs assessor’s conclusion to that effect.
– Affidavits
Item 368 was for a paralegal spending 1.5 hours drafting an affidavit by the client, and was disallowed on the ground that it duplicated subsequent claims, and item 127. There were a lot of claims for preparing Mr Johnston’s statements and affidavits. Item 45 was for preparing a six-page statement by the client for which 96 minutes was allowed, and at item 48 another 18 minutes was allowed for amending the statement. The client vetted a six-page statement and returned it at item 52. At item 108 1.5 hours was allowed for notes for the affidavit of the client. Item 115 claimed for consolidating the earlier drafts of the statement, but this was disallowed and notes for the affidavit at item 116 were also disallowed. At item 127 a paralegal claimed seven units for reviewing and consolidating the notes and statements for the affidavit into a master affidavit by the client, which was disallowed as duplicating other claims, as were claims in item 217 for 2.5 hours for a paralegal for the same thing, item 359, for one hour for the same thing, and item 368, for 1.5 hours for the same thing. Item 372 was further work on this statement for which 24 minutes were allowed, although a claim the following day in item 374 for the solicitor to spend one hour drafting and amending the statement was disallowed on the ground that it duplicated item 372.
One of the matters covered by item 568, on 11 April 2012, was notes for the affidavit during a long conference with the client. On 12 April 2012 there was another conference with the client which produced some further notes for the affidavit, and various other notes, for which eight hours was claimed and 5.7 hours allowed: item 577. On 24 April the solicitor claimed three hours 45 minutes and later seven hours for drafting the affidavit and arranging the material into categories and files, 1.8 hours was allowed,[20] and a further 1.9 hours for drafting updates to the affidavit (19 folios). On 29 April item 678, the solicitor claimed another 2.5 hours for reviewing the affidavit with notes from the client and some further notes by the solicitor after a conference the previous day with the client for three hours redrafting segments of the affidavit, for which three hours was claimed and 1.9 hours allowed.
[20]Item 656; I have read the reasons of the assessor in relation to this item.
There was a further 12.2 hours claimed on 30 April for drafting and redrafting this affidavit (item 681), and some amendments and further amendments, a small part of which was allowed, and on 2 May there was a further claim of 4.5 hours for reviewing amendments to this affidavit, of which 1.7 hours was allowed: item 691. On 3 May there was a further 5.4 hours spent with the client reviewing and executing the affidavit (item 695), which ended up at 22 pages together with 45 pages of exhibits, but the following day there was a phone call from the client pointing out further mistakes in the affidavit, which had to be rectified: item 703. Neither of these claims was allowed.
I was told that the statement covered wider ground than the affidavit, and no doubt it is helpful to have a full statement from the client, but once there is a full statement the process of drafting an affidavit should not be difficult, and overall the amount of time apparently spent on this affidavit seems to me to be quite extraordinary. I cannot accept that anything like that amount of time was reasonably spent on this process. I was somewhat concerned about whether part of the problem might have been that the client kept changing his version, but that matter was not specifically advanced and there was certainly no material put forward to show that that was the cause of the difficulty in preparing and finalising the affidavit. Overall, it is difficult to resist the conclusion that the amount of time claimed to have been spent on this by the solicitor and others was largely the product of inefficiency.
I was also a little concerned that there might have been a cumulative effect of disallowing items here which may have operated unfairly, in that so many items were disallowed because of the existence of other items that ultimately very little time was actually allowed. However there was one substantial amount of time, 5.7 hours allowed under item 577, and it is difficult to see why a 22-page affidavit was not properly drafted in accordance with the client’s instructions simply on the basis of that length of time. On the whole I am not persuaded that the amounts disallowed in respect of the affidavit were incorrectly disallowed, or that the amount ultimately allowed in relation to the statement and affidavit was inadequate.
Item 550 was two hours spent by the solicitor perusing an affidavit by the principal witness on the other side, which had been served under cover of a letter to Mr Choy (item 546) and emailed on by him: item 549. The affidavit was 25 pages long, and the amount claimed was two hours. The solicitor made notes on the affidavit, and had also prepared eight folios of handwritten notes and comments, nine folios of notes for cross-examination and a further six folios of other notes. Given the extensive note‑taking, it does appear that this affidavit, which would have been of considerable importance, did receive a good deal of attention from the solicitor. The costs assessor appears to have proceeded on the basis that the claim of two hours was not specifically supported by documentation, and to have made what was described as a sufficient allowance of 48 minutes, but given the volume of notes, and the importance of this affidavit, the time of two hours does not strike me as obviously unreasonable. It does appear that the affidavit was subjected to detailed scrutiny and analysis by the solicitor and it may be that the assessor has applied a standard formula for perusal time, without taking this into account. In this case I conclude the costs assessor was being unduly restrictive, that the time allowed was inadequate for the work done, and that the two hours claimed ought to have been allowed.
Item 558 was a claim for eight hours for the solicitor’s perusing 193 pages of exhibits to this affidavit, on which he made 23 folios of notes. This was reduced to 2.3 hours on the basis that there was no documentation of eight hours and the principal of the firm was unlikely to spend eight hours uninterrupted. The latter does not strike me as a particularly compelling reason; if someone in his position decides to spend eight hours in that way, presumably he would be able to do so. It does not appear that the costs assessor was able, by cross-referencing other claims, to demonstrate that he had not spent eight hours uninterrupted on this task. Nevertheless, eight hours does seem a long time for 193 pages of exhibits. As pointed out by counsel for the applicant, not all of this would have been material not seen before, although it would have been appropriate for the material to have been checked to see whether the use made of it in the affidavit was correct, and whether there were other relevant documents which had been omitted. Overall my impression is that eight hours was too long, but 2.3 hours was just too short, and the approach of the assessor must have been wrong. I vary the assessment by allowing four hours for this item.
Item 570 was one hour claimed for reviewing the affidavit of Mr Freeman “and documents”, which appears to duplicate the work in item 550, which was not all that long earlier. This followed a lengthy conference with the client the previous day where a large volume of material was worked through, and for which the solicitor claimed eight hours and 15 minutes, which appears to have been allowed: items 566, 567, 568. Presumably this was an exercise in going through the affidavit again in the light of material that had been seen in the conference. I was shown the notes which were supposed to have been prepared for this. They looked like notes of the client’s reaction when taken through the affidavit during the conference, though I was told that they were made after the conference and did involve going through the affidavit to correlate what he had been told at the conference. There was a further conference the following day, item 577, when a further eight hours was claimed, and one of the matters covered there was discussion concerning the party opposite, and a paragraph was said to be noted for cross-examination. It does look to me as though at some stage during the conference the client was taken through that affidavit, and his response noted, which strikes me as a sensible way to approach things, but if that was done in my opinion it was unnecessary to have had a separate review of the affidavit away from the client, so I would not interfere with the disallowance of item 570.
Item 680 was a further two hours claimed by the solicitor for reviewing the affidavit again on 30 April 2012, disallowed as a duplication of earlier claims, and because a further review of the affidavit at that point was unreasonable. Evidently this was an exercise in refreshing the solicitor’s memory just before he spent some 12 hours drafting and redrafting his client’s affidavit (item 681). It would have been reasonable no doubt to have made some reference to the affidavit opposite when preparing the client’s affidavit, if only because one would expect that to some extent the client’s affidavit would be responding to what was said there, but this further review for two hours before beginning work on the client’s affidavit strikes me as unnecessary, and I think it was appropriately disallowed.
The solicitor also drafted an affidavit by Ms Burlinson, but again a very large amount of time seems to have been devoted to preparing an affidavit which ultimately just ran to 13 pages. Item 715 claimed 6.5 hours for this and item 720 claimed a further nine hours, both of which were disallowed given that item 726 claimed a further 6.5 hours for this, of which three hours for drafting was allowed, plus secretarial time. In addition, on that day 1.5 hours was claimed separately for planning the structure of the affidavit and disallowed: item 725. No doubt it was appropriate to plan the matters to be covered in the affidavit, but the idea that this should take 1.5 hours separate from a very long time spent simply on drafting the affidavit just emphasises the unreasonableness of the whole claim.
It is not as though this affidavit was prepared completely from scratch. Some notes from the witness were provided on 19 July 2011 (item 53), and she attended a conference on 6 October 2011: item 218. There was an affidavit by her sworn in February 2004, and there were notes from her, both of which had been perused: item 609.[21] Then on 24 April there was a conference with the witness taking instructions for the affidavit, from which 19 folios of notes were produced, for which five hours was claimed: item 660. Item 666 claimed 10 hours for drafting affidavits of Mr Johnson, Mr Lauer and Ms Burlinson, (disallowed as duplication) but the time spent specifically on the third of these was not identified. The schedule of objections filed 15 July 2014 said in relation to item 715 that the original affidavit of Ms Burlinson was created on 27 April 2012, but I cannot find that in the schedule of claims and reductions. Item 696 was an email on 3 May 2012 to counsel which apparently noted that an affidavit by Ms Burlinson was to be prepared. In these circumstances claims of 6.5 hours on 10 May (item 715), nine hours on 25 May (item 720) and 6.5 hours on 31 May (item 726) strike me as obviously excessive.
[21]This was also disallowed, on the ground that it duplicated earlier claims.
The draft affidavit was sent to Ms Burlinson that day (item 727) and it came back with apparently a small number of changes in red (item 729). There was an exchange of emails about a couple of points before a further 7.5 hours was spent on 3 June reviewing and re-drafting the affidavit, item 736 (1.7 hours allowed). The draft was sent back to Ms Burlinson on 4 June (item 739) and returned the same day (item 742) after which there was a further 2.5 hours claimed on 6 June for re-drawing the affidavit: item 748, 1.4 hours allowed. This seems to have been consequential upon changes made by another witness in his affidavit, though it may have been in response to an email the same day from Ms Burlinson with comments as to amendments: item 750. On 8 June the solicitor claimed a further eight hours for amending Ms Burlinson’s and another affidavit (item 759 – disallowed) and on 8 June further time to re-draw her affidavit, amending eight folios: (item 760); 1.2 hours allowed, covering two affidavits amended. It appears the affidavits were ultimately executed on about 15 June: see item 784. Overall, this seems a very long time for a 13-page affidavit, and I am not persuaded that any of the conclusions of the costs assessor were not appropriate.
The position was similar with an affidavit of Mr Lauer. Mr Lauer was present at a general conference on 6 October 2011 (item 218) but it does not appear that any work was done at that stage on a statement or affidavit. Again there had been an affidavit by him in earlier proceedings (see item 299). In item 740 on 4 June 2012, eight hours was claimed for the solicitor drafting the affidavit of Mr Lauer; it was said that this produced a draft of three pages, which after subsequent review and re-drafting became seven pages. Five hours was allowed by the costs assessor. The final version as filed was 13 pages, 110 paragraphs, and had 70 pages of exhibits. On 5 June there was a further claim for eight hours for reviewing and drafting Mr Lauer’s affidavit, item 744, all of which was disallowed, and at item 746 another eight hours on the same day for reviewing and re-drafting the affidavit, now extended to 15 pages; the costs assessor allowed thirty-six minutes for the solicitor, and thirty minutes for the secretary to retype the document.
The amended affidavit was sent to Mr Lauer that day, and on 7 June there were two items, item 753, review and drafting the affidavit for which a further 8.5 hours were claimed and 1.8 hours allowed, and item 754, another forty eight minutes for reviewing the affidavit of 2004, which was disallowed. There was a claim on 8 June, item 763, apparently for executing the affidavit but this was disallowed as was an email on 11 June to Mr Lauer with a copy of the affidavit and list of exhibits (item 766), apparently because on 13 June there were some changes drafted to the affidavit of Mr Lauer for which a further three hours was claimed, and twenty-four minutes allowed: item 772. On 15 June the solicitor took the amended affidavit to Mr Lauer at home to have it executed, for which he claimed one hour; twelve minutes was allowed as this was said to be correcting errors to the earlier version: item 781. Even then it was necessary to amend at least one paragraph of the affidavit (item 804) which caused problems given that Mr Lauer was then travelling overseas: item 807. It appears that because of this the decision was taken not to amend the affidavit after all: item 840. Again a very large amount of time seems to have been devoted to drafting an affidavit which is not all that long, and which ought not to have been all that complicated, particularly in circumstances where there was some background known. On the whole I am not persuaded to depart from the approach adopted by the costs assessor in relation to this matter.
Item 768 claimed nine hours for reviewing the file and evidence and notes; nine folios of notes along with a short chronology were produced. It was said in the submissions that, following the directions from the court that evidence be given by affidavit, it was critical to conduct this review following the three major affidavits having been sworn. I would have thought that if it was necessary to check over the file to ensure that nothing had been left out, a better time to do that would be before the affidavit material was finalised, but in any event, if the task of preparing the affidavits had been done properly, this sort of review would have been covered by that process. I am not persuaded that the assessor’s decision to disallow this item as not reasonably necessary was wrong.
Item 778 claimed 1.5 hours on 15 June for review of matters for cross-examination of Mr Freeman. The costs assessor disallowed this on the grounds that the client had requested that unnecessary work be not undertaken without prior consultation.[22] In any case, it seems to me that preparation for cross-examination is a matter for counsel, if counsel is going to be involved. This item was correctly disallowed.
[22]This point is considered at [79], [80] below.
Item 813 was drafting an affidavit by a Mr van Iersel, a three page affidavit for which 30 minutes was claimed, and 18 minutes allowed. There were also three pages of exhibits. The function of the affidavit was to evidence the existence of a development approval for particular land as at a particular date.[23] It appears that this affidavit was necessary because the two principal witnesses, Mr Johnston and Mr Lauer, were both overseas and not in a position to depose to this: see item 811. There had been a telephone call to him to discuss the situation (item 800, 18 minutes claimed, 12 minutes allowed) and there was a further item 824 for the draft affidavit, though this may have involved copying only. There was an email to Mr van Iersel on 21 June concerning a variation to the affidavit (item 833, six minutes allowed), and it appears that the affidavit was sent to Mr van Iersel for execution on 21 June: item 841, 12 minutes allowed. It was submitted that 30 minutes was reasonable given that the affidavit had to include two exhibits, but in circumstances where the function of the affidavit was quite limited, and where this affidavit was being prepared essentially to correct the other affidavit material which had been prepared, which could not be rectified because those deponents were away, the preparation of the relevant affidavit should have been a straightforward, almost mechanical exercise for which the 18 minutes allowed was quite adequate.
[23]The affidavit of Lauer was prepared and signed stating that neither approval had issued, but the client informed the respondent on 18 June that both had: see emails 18 June 2012 (item 791) and 20 June 2012: item 804.
Item 999 was three hours claimed for perusing an eight-page affidavit and 25 pages of exhibits of Ms S Freeman for which nine folios of notes were prepared. The assessor allowed one hour. The evidence was said to be critical on several issues involving meetings and phone calls, and it was compared with what was said about the same matters in the affidavit of Mr Freeman. There was a further 1.5 hours claimed for preparation of a critique of this affidavit said to be in accordance with Mr Johnston’s instructions to provide him with the respondent’s critique of the evidence: item 1001. This was allowed only at the secretarial rate, on the basis that it involved just typing up five pages of notes, but the notes are more extensive than those referred to in item 999. On the whole however, my impression is that the notes looked very like notes for cross-examination, which as I have said previously is a matter for counsel when counsel is engaged. It was reasonable to peruse the affidavit, and to compare what it said about matters also dealt with in Mr Freeman’s affidavit with what Mr Freeman said, and to note any inconsistency, but that I think was the limit of reasonable work and I am not persuaded that the allowance of one hour by the costs assessor was not reasonable. In relation to item 1001, it is not clear that this item was actually billed to the client.
Item 1000 involved perusing another affidavit, by Mr Jessup, with 30 pages of exhibits, and preparing notes raising cross-examination points (three folios) for which 1.75 hours was claimed and 0.5 hours allowed. It was reasonable to peruse the affidavit and to peruse any exhibits which had not since seen before, but otherwise this looks like time spent in preparing for cross-examination, which is a matter for counsel. I would not interfere with the allowance made by the costs assessor. Item 1002 then involved the preparation of a two-page critique of that affidavit; again this seemed to be largely directed to preparation for cross-examination, and in my opinion it was unnecessary, though I would not interfere with the allowance of the secretarial rate for typing this up.
Item 1008 was perusing a 22-page affidavit, a second affidavit by Mr Freeman, which also had 51 page of exhibits; two pages of notes were produced, and six hours were claimed though this was reduced to 36 minutes, which seems too low, bearing in mind that it would have been appropriate to compare what was said here with what had been said in the previous affidavit. It was said that major changes had been made to the earlier evidence, and three hours were claimed. In the case of the first affidavit, which was 25 pages and had 193 pages of exhibits, I have allowed two hours for perusing the affidavit and four hours for perusing the exhibits, more than the amount allowed by the cost assessor. It seems to me that this affidavit required much the same level of detailed examination, and may have also required some comparison with the earlier affidavit, and therefore I consider that three hours for this affidavit including the exhibits was a reasonable amount and I allow three hours for item 1008. It did strike me however that the notes that were made did not really achieve anything very much. My initial reaction, possibly prompted by my reaction to the notes, was that the costs assessor’s allowance was not unreasonable, but after having given further consideration to the amounts properly allowed for the earlier affidavit, it seems to me that the amount allowed in respect of this affidavit should be consistent with that approach, and that has led me to reconsider.
Item 1009 claimed 1.3 hours for perusing another 13-page affidavit with 89 exhibits and preparing a critique. I looked at the critique and it did not seem to me to serve any useful purpose, but it was reasonable to peruse the affidavit, for which the costs assessor allowed one hour. It was said that in fact 3.5 hours was spent on this, and that was claimed under item 1044, also disallowed. Given that the document had already been perused, that was correctly disallowed. I would not interfere with the amount allowed by the costs assessor for item 1009, or with the costs assessor’s disallowance of item 1044.
There was additional work done on the affidavit of Mr Freeman, presumably the second one, in items 1010, 1014, 1025 and 1026. The first dealt with the preparation and typing up of two pages of notes on the affidavit, for which only the secretarial rate was allowed. The second involved preparing notes on cross-examination of Mr Freeman which was disallowed as premature, and which I regard as a matter for counsel. The third and fourth are dealt with below, under the heading of Contact with Clients. This was an example of the same items being included in the schedule of claims more than once.
Mr O’Donoghue, the solicitor who had been the solicitor for the client before the respondent took over that practice,[24] swore a four-page affidavit in March 2013. An amount of $360 was allowed at Item 1092 in relation to this. There was a further claim by Mr O’Donoghue for two hours of his time in connection with the preparation of the affidavit at item 1093 which was disallowed on the ground that it was not properly documented, and a sufficient allowance had been made at item 1092. It was submitted that it was reasonable for Mr O’Donoghue to recover remuneration for the time and work he performed in preparing his affidavit for the matter, and in principle that is right, and it would probably be more efficient for Mr O’Donoghue to prepare his affidavit himself rather than for some other solicitor to work with him in that process. I am not however persuaded that the allowance in item 1092 was not sufficient. The short answer in relation to this item however is that I was unable to find anywhere in the invoices which the costs assessor was assessing that the applicant had in fact been charged anything for Mr O’Donoghue’s time. If that was the case, there was no question of any amount charged being disallowed on this basis. This is one example of where the costs assessor fell into the trap of assessing costs which could have been charged rather than costs which had been charged.
[24]In March 2011: Affidavit of respondent filed 20 November 2013 para 4.
Conferences or attendances
On 30 August 2011 there was a conference between the respondent, Mr O’Donoghue and a junior practitioner, during which there was a telephone conference with Mr Johnston. The respondent had a diary note claiming 7.8 hours for this, though the amount claimed for Mr O’Donoghue was only 6.5 hours, a matter that was not resolved. I saw two diary notes, one which seemed to be just recording a discussion between the lawyers about the legal position. The costs assessor allowed the 6.5 hours for Mr O’Donoghue, but disallowed the whole of the claim for the respondent’s time, item 122.[25] It was said that there was no entitlement to charge for a second solicitor at the conference, without obtaining the specific consent of the client, and no entitlement to charge in relation to the solicitors just talking about the legal position in the absence of some informed consent of the client to their doing so. This conference occurred before the costs agreement was signed, so the assessment was on the basis of reasonable remuneration. The costs assessor said that only activities which add value to the client’s matter were reasonably charged.
[25]At this stage Mr O'Donoghue still had management of the file: Affidavit of the respondent filed 20 November 2013 para 8(a). The respondent took over after the next conference.
It is apparent from Mr Johnston’s affidavit that he was aware that the respondent was taking over the matter from Mr O’Donoghue, and that over a period he was providing instructions to both of them. Presumably he would have been aware that both of the solicitors were involved in the conference when he phoned in. What concerns me is the risk of a large amount of time being charged for in circumstances where it is just the solicitors talking about the matter. If it were possible to show that the conference with the client went for a particular length of time, then in my opinion the client would be liable for the cost of both solicitors during that conference, in the circumstances of this matter, but I am more doubtful about whether the respondent was entitled to charge simply for talking about the matter with Mr O’Donoghue.
In circumstances where Mr O’Donoghue had been acting in the related dispute previously, and where the respondent was taking over the client from him, I consider that some reasonable level of discussion between the two of them would have been appropriate in order for the respondent to be adequately informed about the situation. There is a diary note confirming that the conference ran from 10 a.m. to 5.45 p.m., and the matter had some complexity, and in all the circumstances I have concluded that the costs assessor did not approach this matter on the correct basis, because of an assumption that the discussion between the lawyers was an internal matter which was not to be charged for. That may often be the case, but in the particular circumstances of this matter I think some discussion between the respondent and Mr O’Donoghue was reasonable in order to enable the respondent properly to take over the conduct of the matter, and the respondent was entitled to charge for that although I do not see why his time should be longer than 6.5 hours. Accordingly I allow 6.5 hours for the respondent in respect of this item.[26]
[26]It emerged that there were various occasions on which such an allowance could have been made, but I do not think it was allowed anywhere else, and for convenience allow it here.
There was a further conference on 6 September 2011 involving Mr Johnston (in person this time), Mr O’Donoghue, the respondent and the junior practitioner. Mr O’Donoghue charged for 6.2 hours (item 141) and this was allowed, but the costs assessor disallowed a claim by the respondent in respect of the conference, item 142, and by the junior practitioner: item 143. It was submitted that the function of the conference was essentially for the respondent to get instructions about the matter, but that Mr O’Donoghue’s presence was appropriate because he had been the solicitor during the 2004 litigation and he was familiar with the background of the matter. That was true, but there had not long before been a lengthy conference, part of the function of which was presumably to brief the respondent on the relevant aspects of the earlier dispute. The fact that some dealings between the solicitors at that stage were appropriate does not mean that all dealings of this nature between the solicitors were appropriate and does not justify Mr O’Donoghue and the respondent being involved in a whole series of conferences with Mr Johnston. This is so even if the respondent did not actually take over the file until 6 September 2011.[27]
[27]As claimed by the respondent, affidavit filed 20 November 2013 para 8(ba).
Item 1023 was a telephone call to the client for which four units were claimed, and three allowed. There is a diary note with a time 24 minutes on it, and the same day the respondent sent an email item 1019 which stated that they had discussed at length various matters that morning. The reply the next day, item 1027, referred to a summary of “all the knots Freeman has tied himself up in … most of which we spoke of on the phone” which also suggests a call of some length. In this case there seems to be reasonable support for the amount claimed, and the reduction looks arbitrary. Again it may be that the assessor had not seen the diary note. I increase item 1023 to 4 units, an extra $48.00.
Item 1027 was an email from the client sent 7 August 2012, not 6 August as stated in the schedule, where it was characterised as an instruction to do no further work until the mediation. It appears to be the reply to an email sent to the client on 6 August 2012 with copies of the directions order made on 3 August 2012, and registered Memorandum Q860000, item 1019, incorrectly dated 5 August. Among other things that stated that “there has not been any order made for the parties to list their documents.” The relevant part of the reply, item 1027, was: “In the meantime, since we have not been presented with any disclosure directions I instruct that you not do any work on this until we know the outcome of the mediation.” In this context, I interpret that as an instruction not to do work on disclosure until after the mediation. That this is the objective meaning is in my opinion reinforced by the fact that the client went on to request that the respondent provide a summary in writing which had been mentioned the previous day as something being worked on, so that the client could use it as a resource. That was an instruction to complete work on the process of putting that summary into writing, and to forward it. I do not consider that the wording of the subject line “Pause for breath” has the effect of extending the natural meaning of the body of the email.
As well, there was no instruction given at that stage that the respondent was not to attend the mediation, although the email of 6 August had expressed the respondent’s intention to attend the mediation. That instruction came in an email on 18 August 2012, apparently item 1068.[50] The wording of that email was consistent with that instruction having been given then for the first time. That email does not contain any instruction to stop work generally. So far as I have seen, that was first given in an email sent on 31 August 2012,[51] which I cannot identify in the schedule, and which confirmed the date of the mediation, and that the respondent was not to attend. The respondent’s instructions were therefore suspended at that point. After the mediation failed, the client on 18 September 2012 by a further email instructed that the respondent was to “remain in pause mode”.[52] That in terms extended the suspension, but it was never lifted and was tantamount to the withdrawal of his instructions.
[50]Mr Johnson said only that this instruction was given after he received the email of 6 August 2012: Affidavit 2, para 29(c). I have not identified an instruction earlier that 18 August.
[51]Affidavit of respondent filed 19 September 2013 Exhibit PLC-4.
[52]Ibid.
Items 1024 and 1025 related to the preparation of a three page critique of the Freeman affidavit and having it typed up, for which 1 hour was claimed, while item 1026 was a note collating evidence from the Freeman affidavits, for which 1.3 hours was claimed. These were disallowed, on the grounds that they duplicated earlier work, and were premature. This was said to be the work covered by the request from the client in the email item 1027 to provide the typed up summary to use as a resource. That I consider amounted to the adoption of this work by the client, so that the respondent was entitled to charge for it and for providing it, but there is the difficulty that I cannot see that this material ever was provided to the client, or to the Sydney solicitor who took over conduct of the matter. The argument that the client, having requested this resource, had to pay for it, cannot succeed if the resource was never provided, and, in circumstances where the respondent has not shown that it was, these claims cannot succeed.
Item 1033 was a claim for a telephone call with the Sydney solicitor regarding billing and also discussing the mediation, disallowed on the basis that the discussion was in relation to the question of costs. It was submitted for the respondent that the discussion also related to mediation, but in circumstances where there had been no instructions given prior to this that the respondent was to be involved in the mediation[53] I do not consider that this justified any charge to the client, and agree with the decision of the costs assessor. There were then a series of items 1035-1044, and 1049-1060, for which four hours was claimed, all of which was disallowed on the basis that the client had instructed the respondent not to do further work. As I have said, I do not consider that there had been any instruction not to do further work until 31 August, but the real question is whether this work was reasonably done at this time. Given that the matter was shortly to go to mediation, this could not be justified as preparation for trial, and there had been no instruction for the respondent to attend the mediation. Even if, prior to 18 August 2012, he was proceeding on the basis that he would be attending the mediation, and preparing for it, he had not been instructed to attend a mediation which was to be held in Sydney, and I do not consider that it was reasonable for him to be preparing to attend in the absence of such instructions. The decision of the assessor on these items was correct.
[53]There was no instruction not to attend the mediation until 18 August, as discussed above.
The same really applies to the phone call to the client item 1064. Item 1065 was a telephone discussion with the client about summary judgment, for which eight units were claimed and six allowed. I consider that if there was any error in this item it was allowing the time that was allowed, since I consider it clearly inappropriate to be contemplating summary judgment prior to the mediation. The respondent claimed one unit for an email on 5 September 2012 acknowledging his instructions in an email the previous day from the client to refrain from doing further work: item 1082. Although I agree it was appropriate for the respondent to acknowledge the client’s email instructing not to do further work, in my opinion the one unit allowed for item 1081 in respect of the email conveying those instructions was sufficient to cover the reply and I would not allow any additional charge for item 1082. Given the instructions to cease work, I consider that the work in items 1084, 1086 (to the extent that it did not involve a discussion about costs) and 1091 was essentially done on a speculative basis, and in circumstances where the instructions were not renewed there is no entitlement to charge for this work. I am not persuaded that there was a specific request from the client to undertake the work done in any of these items.
Other matters
There were complaints about the disallowance of a number of items under the heading of correspondence with Neive O’Donoghue Office and Hawthorn, Cuppaidge & Badgery Office. These were two firm names under which the respondent practised, having acquired the practice of John Neive O’Donoghue from Mr O’Donoghue, who remained as a consultant.[54] Mr O’Donoghue had been the solicitor for the client in the past, and he remained as a consultant and was involved to some extent in this matter, and I have made some allowance for his time in briefing the respondent on what happened in the past when he was involved in litigation for the client. I do not consider however that the respondent was entitled to charge more because he was representing the applicant under one firm name and the other defendants under another firm name. I have already said something about this matter in respect of the number of items dealt with under the heading conferences or attendances.
[54]Affidavit of respondent filed 20 November 2013 para 4, 5.
These include some earlier discussions between Mr O’Donoghue and the respondent, and an early conference with the client, in respect of which Mr O’Donoghue’s claims had been allowed but the respondent’s claims disallowed as duplication: item 24. I suspect that this might have been a conference where it was appropriate for both solicitors to be present, and to charge, but in circumstances where I have already allowed both solicitors to charge in respect of another significant conference (item 122), and I do not think that it was reasonable for the client to pay for a repeat of such conferences,[55] I would not interfere with the disallowance of the second solicitor in respect of this earlier conference.[56]
[55]This also covers the work claimed under item 20.
[56]This is in a sense an unsatisfactory outcome, since it would be better to allow earlier work and disallow later, but it is the result of the way the respondent’s case was presented.
One of the items raised in this section, item 318, has already been dealt with the heading of correspondence with New South Wales lawyers. This is another instance where the same item has been raised inappropriately more than once in this schedule. Some of the other items relate to charges for continuing work by Mr O'Donoghue, or for the respondent to peruse the results of that work, in a way which does not seem to be obviously justified by his involvement in the matter, or to have been expressly or impliedly requested by the client. Overall I think it is sufficient to say that I have considered the matters raised in the respondent’s document, but am not persuaded to change any of the decisions of the cost assessor in relation to these matters.
There were complaints about the disallowance of some items in relation to the preparation of the brief for counsel. Items 274 and 285 each claimed four hours for preparing the brief, and each was disallowed on the basis of duplication with later claims, noting the existence of an existing brief which could be updated. The work was actually done by a junior practitioner rather than the respondent personally. There was also a draft memorandum to counsel prepared at item 277, which was also disallowed on the grounds that this was allowed subsequently. Again, I find it unhelpful to be told that particular work has been covered by an allowance made under some other item where that item is not identified, but this was not provided by the assessor as reasons.
That is particularly acute in this case, where I have not been able to identify an item where there has been a charge for updating the existing brief or preparing instructions to counsel. Item 298 suggests that what actually happened ultimately was that a brief was prepared for the Sydney solicitors as agents, and they then put together the actual brief to counsel, and it was submitted that item 285 related to the preparation of the brief to the Sydney solicitors. It appears that the costs assessor was not distinguishing between a brief to the solicitors and the brief to counsel, but what has been allowed for preparation of the brief at item 298 was three hours for the respondent and no time for the more junior practitioner.
This does strike me as unduly restrictive, even in circumstances where there was an existing brief which could be built on; the schedule indicates the brief ran to two volumes with a total of 486 pages. The allowance for the respondent seems reasonable, but it does seem to me that the involvement of a more junior practitioner as well in actually assembling material and preparing the brief was reasonable, and in the circumstances I allow a further four hours for that, which can be conveniently allowed under item 285. Item 798 was instructions to counsel for which the respondent claimed 1.25 hours, and 42 minutes was allowed. The instructions were fairly detailed, and involve collecting together various issues which had been identified in relation to amendment to the pleadings up until that time. Having looked at them my view is that the allowance of 42 minutes was clearly inadequate, but the original claim was too long. I substitute a period of one hour, an increase of $144.
On 21 June the respondent went to the Supreme Court Registry to view the file for the 2004 proceedings, but when he got there he was told that the file had been sent to the wrong registry and so it was not available: item 831. The claim was significantly reduced, though that does seem hard in circumstances where he was not expected to know in advance that that had occurred; there had been a telephone call the previous day to the Registry in relation to the availability of the file: item 830. The file was obtained by the Registry later in the day, but he was not able to inspect it then because the Registry was closed due to a bomb threat: item 832, allowed. It appears that ultimately what happened was that copies of documents on the file were obtained on another visit to the Supreme Court Registry on that day, item 842 which was also reduced by the assessor. It does occur to me that on the second occasion it ought to have been sufficient to have sent a clerk or other junior practitioner and for this reason I would not interfere with the decision of the costs assessor in relation to item 842. In relation to the earlier item, although I have some sympathy with the respondent’s position, the situation is analogous to an incomplete telephone call, in that no legal service was provided, and therefore I think the respondent was not entitled to charge at all. I will not increase the amount allowed by the assessor.
Conclusion
For the reasons given above I have changed the decision of the costs assessor by allowing in respect of the following items the following additional amounts:
Item No. Amount 122
$2,925.00
143
$1,632.00
170
$48.00
183
$360.00
210
$2,205.00
220
$294.00
234
$480.00
278
$48.00
284
$96.00
285
$960.00
349
$336.00
351
$48.00
360
$48.00
364
$192.00
371
$48.00
384
$96.00
412
$96.00
426
$48.00
477
$48.00
492
$48.00
550
$576.00
551
$48.00
558
$816.00
571
$480.00
574
$480.00
577
$1,104.00
627
$144.00
640
$2,880.00
648
$144.00
761
$84.00
777
$96.00
781
$384.00
791
$48.00
798
$144.00
799
$48.00
804
$48.00
808
$48.00
811
$96.00
855
$36.00
858
$48.00
863
$48.00
867
$96.00
868
$48.00
871
$48.00
873
$48.00
879
$48.00
893
$48.00
938
$48.00
1008
$1,152.00
1017
$720.00
1020
$96.00
1023
$48.00
1062
$48.00
TOTAL
$20,304.00
Accordingly the professional costs assessed at $106,378.00 should be increased to $126,682.00; there is no adjustment to be made to disbursements. Assuming that this does not alter the outcome in relation to the payment of the assessor’s fees and the applicant’s costs of the assessment, the balance payable by the respondent to the applicant would then be reduced from $204,739.19 to $184,435.19. I shall however invite submissions from the parties as to the appropriate order to reflect the conclusions set out above, as to the costs of the review, and as to what should be done with the Deputy Registrar’s order of 10 March 2014.
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