Re Lynch & Co's Bills of Costs
[1998] QSC 258
•16 November 1998
IN THE SUPREME COURT
OF QUEENSLAND No. 8827 of 1998
Brisbane
[Re Lynch & Co’s Bills of Costs]
IN THE MATTER OF THE LEGAL PRACTITIONERS ACT OF 1995
-and-
IN THE MATTER OF MESSRS LYNCH & CO’S BILLS OF COSTS
CATCHWORDS: COSTS - solicitor’s bills of costs - taxation of bills after payment - inherent jurisdiction of court to order taxation - abrogation of inherent jurisdiction by statute - amendment of Legal Practitioners Act 1995 by Civil Justice Reform Act 1998.
Solicitors:Clarke & Kann for the applicant
Lynch and Company for the respondent
Hearing Date: 6 October 1998
REASONS FOR JUDGMENT - CHESTERMAN J
Judgment delivered 16 November 1998
1 The applicant is the plaintiff in an action pending in the District Court in which he claims damages against Handy Gardeners At Work Pty Ltd (“Handy”), Paul Geoffrey Seils and Lyndall Patricia McVey. The essence of his claim is that he was induced to become a franchisee from Handy pursuant to a franchise agreement. He was to perform gardening services and the franchisor was to procure business for him. The inducement took the form of representations as to the profitability of the franchise business. The representations are said to have been misleading or deceptive and therefore in contravention of section 52 of the Trade Practices Act 1974.
2 The respondent is a firm of solicitors which represented the applicant in the action until its retainer was terminated in July this year. The applicant seeks an order that a number of bills of costs rendered by the respondent be referred for taxation in accordance with the District Court scale. The bills of costs are:
(a)bill of costs dated 6 August, 1996 delivered in respect of Federal Court action no. QG93 of 1996;
(b)bill of costs dated 16 October, 1996 delivered in respect of Federal Court action no. QG93 of 1996;
(c)bill of costs dated 13 November, 1996 delivered in respect of District Court action no. 3649 of 1996;
(d)bill of costs dated 23 December, 1996 delivered in respect of District Court action no. 3649 of 1996;
(e)bill of costs dated 22 January, 1997 delivered in respect of District Court action no. 3649 of 1996;
(f)bill of costs dated 13 March, 1997 delivered in respect of District Court action no. 3649 of 1996;
(g)bill of costs dated 9 May, 1997 delivered in respect of District Court action no. 3649 of 1996;
(h)bill of costs dated 29 May, 1997 delivered in respect of District Court action no. 3649 of 1996;
(i)bill of costs dated 18 September, 1997 delivered in respect of District Court action no. 3649 of 1996;
(j)bill of costs dated 15 October, 1997 delivered in respect of District Court action no. 3649 of 1996;
(k)bill of costs dated 16 December, 1997 delivered in respect of District Court action no. 3649 of 1996; and
(l)bill of costs dated 15 July, 1998 delivered in respect of District Court action no. 3649 of 1996.
3 The applicant’s action was commenced in the Federal Court on 5 July, 1996 but was transferred by consent to the District Court on 12 September, 1996. Two and a half years after the action was commenced it is still not ready for trial. The bills rendered by the respondent for its conduct of the action on the applicant’s behalf total $37,260.97.
4 The applicant resides in Victoria. On the material he is a young and unworldly man inexperienced in the ways of the law and lawyers. He has paid the amounts requested in each of the respondent’s bills of costs.
5 Some idea of what is in dispute in this application emerges from a chronology of the proceedings in which is interspersed the occasions and amounts of the bills:-
April 1996Applicant instructs Lynch & Company to act
5 July, 1996Application and statement of claim filed in Federal Court by Lynch & Company
18 July, 1996 Application and statement of claim served on first respondent
2 August, 1996 Application and statement of claim served on second and third respondents
6 August, 1996 Applicant receives bill of costs in the sum of $5,699.00
9 August, 1996 Directions hearing at Federal Court
9 August, 1996 First, second and third respondents file notice of appearance
9 September, 1996 Directions hearing at Federal Court
12 September, 1996 Matter transferred to District Court at Brisbane by consent
10 October, 1996 Entry of appearance and defence filed by first, second and third respondents
16 October, 1996 Applicant receives bill of costs in the sum of $1,851.10
18 October, 1996 Summons filed by Lynch & Company seeking orders that entry of appearance and defence be struck out
18 October, 1996 Amended entry of appearance and defence filed by defendants
28 October, 1996 Summons dismissed by consent
13 November, 1996 Applicant receives bill of costs in the sum of $1,546.30
13 November, 1996 Notice requiring discovery on oath served on defendants
18 November, 1996 Defendants file application seeking orders for parts of statement of claim to be struck out
18 November, 1996 Notice requiring discovery on oath served on plaintiff
26 November, 1996 Applicant receives invoice in the sum of $53.70
5 December, 1996 Defendants’ affidavit of documents received
6 December, 1996 Lynch & Company file summons seeking orders that amended entry of appearance and defence be struck out and supplementary affidavit of documents be delivered
10 December, 1996 Consent orders made providing timetable for delivery of supplementary affidavit of documents, inspection of documents, and delivery of interrogatories
10 December, 1996 Defendants request further and better particulars of statement of claim
13 December, 1996 Plaintiff’s affidavit of document served
16 December, 1996 Further and better particulars of statement of claim filed
23 December, 1996 Applicant receives bill of costs in the sum of $5,928.45
15 January, 1997 Plaintiff inspects defendants’ documents
22 January, 1997 Applicant receives bill of costs in the sum of $853.39
4 March, 1997 Plaintiff inspects documents Minter Ellison
13 March, 1997 Applicant receives bill of costs in the sum of $1,496.50
7 May, 1997Plaintiff inspects documents from defendants’ supplementary affidavit of documents
9 May, 1997Applicant receives bill of costs in the sum of $2,990.43
29 May, 1997 Applicant receives bill of costs in the sum of $1,062.25
14 July, 1997 Amended statement of claim delivered
14 July, 1997 Applicant receives invoice in the sum of $5,275.35
21 July, 1997 Lynch & Company advise plaintiff (applicant) that statement of claim may require further amendments
24 July, 1997 Lynch & Company forwards certificate of readiness to defendants
18 September, 1997 Applicant receives bill of costs in the sum of $2,118.00
15 October, 1997 Applicant receives bill of costs in the sum of $1,558.57
16 October, 1997 Further amended statement of claim delivered
13 November, 1997 Defendants serve application to deal with deficiencies in further amended statement of claim
3 December, 1997 Aspects of defendants’ summons adjourned to 29 July, 1998 together with application filed by Lynch & Company seeking order to dispense with certificate of readiness
16 December, 1997 Applicant receives bill of costs in the sum of $6,269.44
8 July, 1998Clarke & Kann take over conduct of matter
15 July, 1998 Applicant receives bill of costs in the sum of $558.49
The respondent takes a preliminary objection to the application. It submits that the affidavit material relied upon by the applicant contains hearsay and that the application is for final, not interlocutory, relief because “[i]f unsuccessful the Applicant’s legal rights to tax the Respondent’s bills of costs will be exhausted”.
The respondent further objects that even, if hearsay were admissible, the applicant’s affidavits do not comply with O 41 r 3 in that the deponents do not give the sources of information deposed to nor the grounds for believing the hearsay.
8 I think the latter objection is excessively technical given the nature of the application and the contents of the affidavits. The first point, that which concerns the nature of the proceedings, gives rise to a nice debate. Rather than engage in it I think I should avoid the dilemma by having recourse to O 40 r 56. The rule provides that:
“The court may, at any time during a proceeding, dispense with the rules of evidence relating to the proof of a fact if the court considers that strict proof of the fact might cause unnecessary or unreasonable expense, delay or inconvenience in the proceeding or that the fact is not seriously in dispute.”
9 Given the nature of the present dispute and the material advanced by the applicant, I think it would be pointless to require the applicant to restate his evidence in a different form. This approach is given impetus when one remembers that the applicant’s appeal to the court is based upon the claim that he has been roughly handled by his former lawyers.
10 I therefore decline to uphold the applicant’s objections to evidence.
11 The respondent has a more substantial objection. The applicant’s summons issued on 22 September 1998. As I have said, the applicant has paid all of the respondent’s bills. Only the last four, that is, those delivered on or after 18 September, 1997, were paid less than a year prior to the issue of the summons. All the bills described in paragraph 2 hereof and identified as (a) to (h) were paid by the applicant more than twelve months before he filed his summons. The applicant relies upon section 16 of the Legal Practitioners Act 1995. It provides:
“(1) The payment of any such bill ... shall in no case preclude the court or judge from referring such bill for taxation if the special circumstances of the case shall in the opinion of such court or judge appear to require the same upon such terms and conditions and subject to such directions as to such court or judge shall seem right.
(2) However, the application for such reference be made within 12 calendar months after payment.”
12 Something is missing from subsection 2 which is needed to give the verb its imperative mood. Section 16 of the Legal Practitioners Act appeared formerly as section 33 of the Costs Act 1867. The form in which subsection 2 appeared in the Costs Act was as a proviso to section 33. It there read:
“Provided always that the application for such reference be made within twelve calendar months after payment.”
13 When the language was modernised and the lawyerly archaic “Provided always” was forced to make way for the modern, plain “However” and the proviso was given added status as a subsection, the draftsman quite overlooked the need for sentences to be complete. I will proceed on the basis that the draftsman did not intend to violate the fundamental rules of grammar and that the subsection has the same meaning as the proviso to section 33 of the Costs Act.
14 The Court of Appeal in In re Wellborne [1901] 1 Ch 312 accepted that the proviso had come to mean that “after payment of a bill, there can be no taxation if twelve months have expired” (per Rigby LJ at 316).
15 The applicant’s only answer was to rely upon the court’s inherent jurisdiction to order an examination or taxation of a solicitor’s bill. No specific arguments were addressed to the court on the nature or extent of the court’s inherent jurisdiction.
16 I discussed this question in my judgment in Re Watling Roche’s Bill of Costs (No. 6211 of 1998; judgment delivered 16 October, 1998). I venture to repeat what I said:
“The applicant did not argue that, apart from the provisions of part 2 of the Legal Practitioners Act, the court had any power to order a taxation of costs. She did not submit that the court had an inherent jurisdiction to control solicitors’ charges which in the present case might support her application. There is no doubt that the Supreme Court has had an inherent power which Dixon J in Woolf v. Snipe (1933) 48 CLR 677 at 678-9 described as “the general jurisdiction of the Court” which was “founded upon the relation to the Court of attorneys and solicitors considered as its officers”. The jurisdiction “enables (the court) to regulate the charges made for work done by attorneys and solicitors of the Court ... and to prevent exorbitant demands”. The jurisdiction was exercised both by the Court of Chancery and the courts of law. The inherent jurisdiction co-existed with the statutory jurisdiction conferred by provisions such as those found until lately in the Legal Practitioners Act. See In re Johnson and Weatherall [1888] 37 Ch D 433 at 442-3; on appeal Storer & Co v. Johnson and Weatherall [1890] 15 AC 203 at 206.
Inherent jurisdiction may, of course, be modified or abrogated by Act of parliament. But it must appear clearly from the words of an Act that it has that effect. Whether the Civil Justice Reform Act should be construed as diminishing that inherent jurisdiction is a question which was not argued and on which I express no opinion.
The circumstances in which the court would exercise its inherent power and the nature of that power are not now easy to ascertain. The first reference given by Dixon J is to Beames, Doctrine of the Courts of Equity with respect to Costs (1840), pp 168 and following. Particular instances in which the jurisdiction was exercised are collected in Daniell’s Chancery Practice, 5th edition, volume 2, pp 1713-15. It appears from this discussion that, as one would expect, the court exercised the discretion depending upon the circumstances of each case. The order made against a solicitor whose misconduct or neglect had occasioned his client expense varied to suit the justice of the particular case. Taxation was not invariably ordered. Sometimes an enquiry into the propriety of particular items in a bill was directed.”
17 This case is different in that section 16(2) of the Legal Practitioners Act expressly precludes the taxation of a bill of costs more than twelve months after the bill has been paid. This express prohibition is inconsistent with the existence of an inherent power to order taxation in circumstances where the statute forbids it. As Lord Lowry pointed out (the other Law Lords agreeing) in Harrison v. Tew [1990] 2 AC 523 at 536:
“... the common law can co-exist with a statutory provision with which it is not inconsistent.”
18 His Lordship then set out the terms of section 41 of the (English) Solicitors Act 1843 which is identical to section 33 of the (Queensland) Costs Act 1867 and therefore to section 16 of the Legal Practitioners Act. Lord Lowry continued:
“That provision impliedly ... (was a) negative (enactment) which in my clear opinion ousted the inherent jurisdiction to refer a bill for taxation in conflict with what (it) laid down.”
19 It therefore appears clear that the application to refer the bills paid before 22 September, 1997 is brought out of time and the court may not refer them to taxation.
20 In relation to the last bill, that dated 15 July, 1998, the respondent submits that the enactment of the Civil Justice Reform Act 1998 which came into force on 1 July, 1998 has abolished the applicant’s right to have the bill taxed.
21 The point was not addressed in the applicant’s written submissions. It appears that the respondent is right about the position. I addressed the point in Re Watling Roche’s Bill of Costs where I said:
“Part 2 of the Legal Practitioners Act contained the provisions on which the applicant relied for her entitlement to send her solicitors’ bill for taxation. Those statutory provisions were repealed on and from 1 July, 1998. The applicant’s argument to the contrary is misconceived. She erroneously assumes that because some parts of the Legal Practitioners Act remained unaffected by the enactment of the Civil Justice Reform Act then the whole of the Legal Practitioners Act remained in force. This is clearly wrong. The provisions of part 2 of the Legal Practitioners Act upon which the applicant bases her entitlement to taxation ceased to exist on 1 July, 1998. Unless that entitlement accrued prior to 1 July, 1998, and by reason of the Acts Interpretation Act 1954 (Qld), survived the repeal of part 2, the applicant has no right to seek a taxation.
Section 20(2) of the Acts Interpretation Act provides:
“The repeal ... of an Act does not -...
(b)affect ... anything ... begun under the Act; or
(c)affect a right ... acquired, accrued ... under the Act; or
...
(e)affect [a] ... remedy in relation to a right ... mentioned in paragraph (c) ...”.
I agree with the taxing officer that until the bill of costs was delivered to the applicant she had no right to have it taxed. That right depends upon the delivery of a bill to a person “chargeable” with payment of the bill. Part 2 of the Legal Practitioners Act had been repealed before the bill was delivered. The applicant thus, prior to the repeal, had no right to have the bill taxed which is saved by section 20 of the Acts Interpretation Act.”
The respondent’s last bill was delivered after the provisions of the Legal Practitioners Act entitling a party chargeable with a solicitor’s bill to apply to have it taxed was abolished. There was no accrued right saved by section 20 of the Acts Interpretation Act 1954. There is then no statutory basis for the court’s power to order taxation of the disputed bill. The applicant’s solicitor did refer, in very general terms, to the inherent jurisdiction of the court but no specific submissions were advanced and no authorities were referred to. In those circumstances I am not prepared to proceed on the basis that the court has a general inherent jurisdiction to order taxation of bills in circumstances where the protection afforded by the amendments to the Queensland Law Society Act are available to the applicant. Payment of a solicitor’s bill does not appear to preclude an application for a costs assessor to assess the bill pursuant to the provisions of part 4A of the Queensland Law Society Act. Even if the inherent jurisdiction were unaffected by the Civil Justice Reform Act, the discretion the court undoubtedly had to order a taxation pursuant to that inherent power would be influenced by the fact that there is a statutory scheme in force for reviewing the level of charges. The matter not having been argued, I express no concluded opinion. The applicant based his case primarily and, perhaps, entirely on section 16 of the Legal Practitioners Act. For the reasons I have explained he had no right to apply for taxation with respect to the bill delivered after 1 July, 1998.
22 This then leaves the three bills dated 18 September, 1997, 15 October, 1997 and 16 December, 1997 respectively. Section 20 of the Acts Interpretation Act preserves the right the applicant had prior to 1 July, 1998 to apply to have those bills taxed.
23 What are “special circumstances” justifying the taxation of a bill after it has been paid was considered by the Court of Appeal in In re Norman [1886] 16 QBD 673. To be precise, that case concerned the phrase “special circumstances” where it appears in the equivalent of section 8 of the Legal Practitioners Act and not in section 16, but the court appeared to think that when the phrase appears in both sections it has the same meaning. This, with respect, would appear to accord with common sense and a conventional approach to statutory construction.
24 Lord Esher MR said (at 675):
“It has been argued that an interpretation has been put upon these words, and that at least after payment of the bill these words ‘special circumstances’ must be confined to the cases of pressure and overcharge, or overcharge amounting to fraud. ... In my opinion no one has a right to put such a limitation upon the meaning of these words as has been suggested: therefore, even if the application to tax be made after payment, I should say that no long series of authorities could warrant such an interpretation as has been relied upon. Pressure and overcharge, or overcharge amounting to fraud, are no doubt ‘special circumstances,’ but they are not the only instances, in which a bill may be referred to taxation.”
25 Lindley LJ said (at 676):
“Unless we are driven by authority to say that we must put a limited construction upon the words ‘special circumstances,’ we ought not to restrict their natural and ordinary meaning. The decisions in Chancery have proceeded upon a more narrow interpretation than those at common law ... but since the coming into operation of the Supreme Court of Judicature Acts ... the same interpretation ought to be adopted in all the branches of the High Court, and we must say now what is the true construction of the words ‘special circumstances.’ ... It is not right so to limit the expression ‘special circumstances,’ as to exclude from it unforeseen combinations of facts. To do so is to impose upon Courts greater fetters than the legislature has thought fit to impose on them.”
26 Lopes LJ said (at 677):
“The statute uses the words ‘special circumstances.’ Those are wide, comprehensive, and flexible words, and I think that the legislature intended them to be so, and that no Court can or ought to lay down any exhaustive definition of them. Charges which in one case would be special circumstances, in another would not be such. It is for the discretion of the judge to say what are special circumstances in a particular case. I cannot express my meaning better than by adopting the words of Bowen, L.J. in In re Boycott when he said: ‘Special circumstances, I think, are those which appear to the judge so special and exceptional as to justify taxation. I think no Court has a right to limit the discretion of another Court, though it may lay down principles which are useful as a guide in the exercise of its own discretion.’ ”
27 The respondent relies substantially on a decision of the Full Court of this Court, Re John Barry & Co’s Bill of Costs [1975] Qd R 368, for the proposition that it is only gross overcharge or undue pressure put upon a client to pay, or a combination of the two, which may amount to “special circumstances”. This, I think, is too superficial a reading of the judgment of the Full Court. It is true that the reasons of Dunn J (with whom Hanger CJ and Matthews J agreed) concentrate upon these aspects but that appears to be for the same reason that led Fry LJ to say in In re Boycott [1885] 29 Ch D 571 at 582:
“That misconduct or fraud on the part of solicitors, or pressure accompanied by overcharge or overcharges so gross as to amount to fraud, are special circumstances...has been firmly established. I do not desire to preclude myself from saying that there may be other special circumstances which would justify taxation. That question seems to me to be one which it is not necessary for us to determine in the present case, since no reason for taxation was urged, except that there had been pressure accompanied with overcharge.”
28 Such an approach would have been, of course, quite inconsistent with what Lord Esher, in particular, said in In re Norman. Dunn J did not refer to that case but did quote from the judgment of Cross J in In re A Solicitor [1961] Ch 491 in which there is a reference to In re Norman. (It may be noted that Lord Lowry thought that In re A Solicitor was wrongly decided. See Harrison v. Tew [1990] 2 AC at 537.) Nevertheless it is clear that Dunn J in quoting with approval what had been said by Cross J was in turn accepting the authority of In re Norman.
29 It is true also that Dunn J said ([1975] Qd R 368 at 371):
“The Chancery practice was that, to obtain the taxation of a bill which had been paid, ‘specific items of overcharge ought to be alleged and proved.’ ... Since the Judicature Act the Chancery practice has always been followed.”
30 This appears, with respect, not to be so. As Lindley LJ pointed out, In re Norman settled a difference in approach between the courts of chancery and those of common law by adopting the latter’s more liberal view of the legislation. While the rules of chancery prevail, in this instance the practice did not.
31 Re John Barry & Co’s Bill of Costs must be seen as a case in which the special circumstances relied upon were overcharge and pressure. The judgment of the court is to be seen in that context. It is not correct to read it as limiting the wide meaning of the phrase “special circumstances” in sections 8 and 16 of the Legal Practitioners Act, or as questioning the authority of In re Norman.
32 It is obvious that before a court will order taxation there must be evidence that in some respect the bill is excessive. It is hard to imagine circumstances in which a bill charging reasonable amounts for work actually done in a competent manner would be sent to taxation. In that sense “overcharge” is a necessary ingredient of “special circumstances”. But this is not to say that special circumstances will be made out only if an applicant can demonstrate overcharge in respect of specific items in a bill. Work which is charged for may not have been done or done properly. It may have been done unnecessarily expensively. It is not necessary that the “overcharge” answer any particular description, such as “gross” or “dishonest”, before it can amount to a special circumstance justifying an order for taxation.
33 What are the circumstances which in this application are said to be special and so justify taxation of the bills after payment?
34 The respondent submits that “in order to demonstrate special circumstances the applicant must demonstrate grossly excessive overcharging or overcharging amounting to fraud.” I reject this submission for the reasons I have set out. It appears to me to misunderstand the authorities and the principles on which courts have examined the existence of special circumstances. There is no doubt that “grossly excessive overcharging” or “overcharging amounting to fraud” are special circumstances for the purposes of section 16. It is not right that they are the only factors which may amount to special circumstances.
35 Although it is only three bills which are amenable to taxation it is, I think, permissible to view all of the bills which have been rendered by the respondent for the purpose of deciding whether special circumstances exist. To do otherwise would be to view the three bills in quite an artificial way. They would be taken out of context. Viewed in isolation they may not appear susceptible to criticism but viewed as part of the overall charging of the applicant by the respondent it may appear that the court should order taxation.
36 The applicant was twenty-two when he first retained the respondent. The failed gardening franchise was his first essay into the world of business. His action is his first experience of litigation. It has been asserted, by hearsay, that Mr Lynch, the principal of the respondent firm, assured the applicant that the costs of preparing the action to the stage where it was ready for trial would be no more than $20,000.00 to $25,000.00. Mr Lynch disputes this but himself deposes that he told the applicant that “he should budget for an expenditure of $5,000 - $8,000 as the professional costs that were likely to be incurred to the point of delivery of the Application and Statement of Claim”. As I have mentioned, the applicant has outlaid to the respondent more than $37,000 and does not yet have a fully particularised statement of claim.
37 The applicant’s solicitors depose that the amount he has been charged is excessive and that the bills are “redolent of overcharge”. The respondent criticises this characterisation of its bills and complains that the deponents should not swear to the issue before the court and certainly not in such generalised terms. There is substance in the respondent’s point but, taking an overview of the matter, the applicant has paid a very substantial amount of money to have what appears to be a fairly small District Court claim prepared over two and a half years to a stage where it is not ready for trial and the statement of claim may need further attention.
38 Exhibit KEH21 is a bundle of the bills rendered by the respondent. It is perhaps not entirely fair to criticise the respondent for preparing detailed bills when the purpose of the detail was to provide the applicant with particular information of the work done on his behalf and the charges being made for it. The respondent’s bills contain items for which modest amounts are charged but there is a very great number of items. The bills themselves were prolific. The bills are substantial in the total amounts claimed. It would be easy to form the impression (which might be wrong) that as much time and effort has gone into the preparation of the bills as into the conduct of the action.
39 Two matters concern me in particular. One is that the action was commenced in the Federal Court where the costs of litigating are higher than in the District Court. The respondent has offered no real explanation for why that choice was made. The justifications advanced do not seem to me to be convincing. They were:
(i)the case management system utilised in the Federal Court;
(ii)the familiarity of that court with franchise disputes; and
(iii)the likelihood of obtaining a much quicker trial date than in the Supreme Court of Queensland.
Mr Lynch does not appear to have advised the applicant of the cost consequences of proceeding in the Federal Court rather than the District Court. Indeed it does not seem to have occurred to him initially that the District Court was an appropriate forum. There seems no particular difficulty associated with the applicant’s case such as to make the Federal Court the most appropriate jurisdiction.
40 The second concern is that no attempt appears to have been made to assess the amount of loss or damage which the applicant might have suffered as a result of becoming a franchisee from Handy. It is this deficiency which appears to lie behind much of the complaints about the statement of claim which in turn has delayed the action and multiplied correspondence and interlocutory applications. Mr Morgan, an articled clerk employed by the respondent, seeks to place the blame for the problem on the applicant who would not authorise the preparation of an investigative accountant’s report because of its cost. But it does not appear from Mr Morgan’s affidavit that the applicant was ever given proper advice about what needed to be known before a pleading could be settled nor of the need to ascertain what, if any, loss the applicant had actually suffered to see whether litigation was justified and, if so, in what court.
41 Had the matter been given more thoughtful attention at an early stage it seems that the action might have run faster and cheaper.
42 I have a concern that the applicant may have paid the cost of the respondent’s initial oversight and lack of advice as to what should be done before the action was commenced.
43 The applicant has told his solicitors that he was not advised by the respondent that he had a right to refer the bills of costs to taxation. Neither Mr Morgan nor Mr Lynch have contested that aspect of the applicant’s account. It seems to me to be a serious omission in the advice given by Mr Lynch to the applicant on the topic of his liability to pay costs. Mr Lynch deposes that the applicant made enquiries of him about the fees he might incur in taking the action to trial. Mr Lynch had “a detailed discussion” with the applicant about the basis on which he would charge, that is, by reference to items in a prescribed scale of costs, by contrast with the more common method of time-costing. Mr Lynch recalls “informing Mr Collins that (his) charges would be lower than most other firms engaged in this type of work because they were based on the scale”. In the course of this detailed exposition which, in effect, assured the applicant that he would be charged less than if he went to a firm that engaged in time-costing, Mr Lynch did not advise the applicant (who was, as I have said, young and inexperienced in such matters) of his right to have the bills checked for the propriety of their quantum by taxation.
44 The applicant’s solicitors submit that the respondent did not provide any adequate advice to the applicant about how the preparation of the action should be conducted and how that might impact on the costs of preparing it. It is plain that the respondent kept the applicant informed of what was happening (though of course it charged him for so doing) but did not offer advice as to what should be done or how costs might be saved.
45 On 18 September, 1997 the respondent sent a bill for $2,118.00. A month later, on 15 October, 1997, another bill was sent for $1,558.57. Nothing much seems to have happened in the meantime. Nevertheless the bill consists of 103 items none of which individually or collectively seems to have done much to progress the action. Two months later, on 16 December, 1997, a further bill was sent for $6,269.44. According to the chronology all that happened since the previous bill was the delivery of a further amended statement of claim and the receipt of an application by the defendants in the action to attack the further amended statement of claim. The defendant’s summons was adjourned, apparently by consent, as was the summons taken out by the respondent for an order dispensing with the certificate of readiness.
46 Although there is an itemised bill containing much detail it is hard to see how $10,000 worth of legal work had been done in three months.
47 The overall impression I have is of a case which:
·has taken too long;
·has not been efficiently prepared; and
·has cost a very large amount of money.
Where taxation is sought after a bill has been paid, or more than twelve months have elapsed since its delivery, the court has to feel some disquiet about the bill before it is justified in making the order. The section talks about “special circumstances”. In Re Bailey’s Bill of Costs [1994] 1 Qd R 576 at 581, Kiefel J thought that:
“... what the sections require and the cases refer to is some discernible need for taxation.”
I respectfully agree. There must be something about the amount of the bill or the circumstances in which the charges have been incurred, or the bill rendered, to give rise to that “discernable need” or “sense of disquiet”. Those circumstances will then be “special”, justifying an order for taxation.
48 The “broad and flexible” requirement of special circumstances allows the court to adapt to changing times and manners. There is more general awareness now that overcharging by legal professionals occurs frequently and is of concern to the community. Courts should not restrict taxation after payment by being too demanding as to what constitutes “special circumstances”. Solicitors who have rendered proper charges should not be vexed by unmeritorious applications for taxation, but nor should solicitors who deliver bills over which a question-mark hangs be able to avoid having their bill scrutinised because a client was slow to realise his rights.
49 Ordinarily the court would not find special circumstances for the purposes of section 16 unless an applicant explained why he paid the bill which he later wishes to challenge. The applicant has not advanced much by way of explanation but that, I suspect, is due to the fact that his solicitors thought the application was governed by section 8 and did not turn their minds to section 16 until the argument commenced. The lack of explanation is outweighed by the other considerations I have mentioned. It does appear that the applicant’s youth and naivety lie behind his unquestioning belief that he was obliged to pay the respondent’s bills. In a case where the respondent did not advise the applicant of his right to have the bill taxed less importance is to be attached to the fact of payment.
50 I therefore order that the respondent’s bills of costs dated 18 September, 1997, 15 October, 1997 and 16 December, 1997 be referred to a taxing officer for taxation in accordance with the applicable District Court scale.
51 The application also concerned an order that the respondent deliver copies of diary notes or memoranda taken or prepared during its conduct of the action on behalf of the applicant. This aspect of the relief was not contested by the respondent, Mr Lynch claiming that it was due to a misunderstanding that he had not earlier given the information sought.
52 In the circumstances I think the appropriate order for costs of the application is that the party who is found liable to pay the costs of the taxation pay the other’s costs of this application to be taxed.
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