Re Rose and Jensen
[1998] QSC 99
•22 May 1998
IN THE SUPREME COURT
OF QUEENSLAND
No. 4041 of 1998
Brisbane
Before the Hon. Mr Justice Shepherdson
[Re Rose and Jensen]
IN THE MATTER of the Legal Practitioners Act
- and -
IN THE MATTER of Rose and Jensen
CATCHWORDS: COSTS - solicitors - application for bill in taxation form and order for taxation
Legal Practitioners Act (Qld) 1995
Counsel:Mr Bland for the applicant
Mr Robinson for the respondent
Solicitors:Nicholsons for the applicant
Jon Kent for the respondent
Hearing date: 19 May 1998
REASONS FOR JUDGMENT - SHEPHERDSON J.
Judgment delivered 22 May 1998
This is an application by John Joseph Richardson for orders that:-
The respondents Rose and Jensen deliver bills of cost in taxable form in relation to all work charged to the applicant in their memoranda of fees dated 27 September 1994 and 23 February 1996.
The bills in taxable form be taxed.
The application is opposed although the right of the applicant to seek the orders is not challenged.
The material read before me shows that on or about 22 September 1989 the applicant instructed the respondents in relation to a dispute with and possible action against Australian Mutual Provident Society concerning a claim under a policy.
At the time a solicitor named Drew Lauchland was employed by the respondents and he had the conduct of the matter in their office.
In September 1990 action by the applicant against Australian Mutual Provident Society and AMP Superannuation Pty Limited began in this Court (Action No. 1513 of 1990).
In or about August 1994 the action (save as to costs) was settled.
On 27 September 1994 the respondents sent to the applicant a document described as “memo of costs and estimated disbursements”. This was a 15 page document the first of which showed (inter alia) the name and address of the applicant and the name of the respondents.
The first 13 and one-third pages listed various matters attended to by the respondents with a date assigned to each matter. No charge was assigned to each matter. Most of these matters concerned correspondence and perusals. The first matter was the receipt of “initial instructions” on 22 September 1989 and the last was a letter dated 21 September 1994. It is fair to say that at the end of these 13 and one-third pages the words “and all due care and consideration” appear.
Court documents drawn and engrossed are listed on p.13 of the memo of costs - again no fee is assigned to each document. Perusal of documents from the solicitors for the defendants appears on pp.13 and 14 of the memo of costs - these documents (which are listed) appear to be court documents and again no fee is assigned to each one.
On p.14 after all the above items have been listed the following appeared:-
“OUR FEE, INCLUDING CARE AND CONSIDERATION THROUGHOUT - EXCEEDING, BUT TO YOU SAY: $43,000.00.”
The memo of costs then went on to list disbursements totalling $7,072.80 and “anticipated disbursements” totalling $15,822. Most of these anticipated disbursements were counsel’s fees. The total of the memo was then $65,894.80. Payments received from legal aid and the applicant on four occasions between 1991 and 1993 totalling $2,775 were credited and a balance of $63,119.80 remained. The memo of costs shows that the sum of $63,119.80 was “available in trust” and deducted. The balance due and owing was shown to be “nil”.
Mr Robinson who appeared for the respondent solicitors does not contest that the 15 page document dated 27 September 1994 which is called a memo of costs was not a bill of costs. In my view this attitude is correct, and is reinforced by the following printed words appearing at the foot of p.1 of the memo of costs:-
“... In the event that this account is not paid within 14 days from the date hereof we reserve the right to withdraw this account and substitute a bill of costs in taxable form. You will be liable to pay the costs of preparation of a bill of costs ... .”
Thus far, it appears that the respondents “memo of costs” was paid in full on or about 27 September 1994.
However, the matter of costs of the action No. 1513 was still to be dealt with. The applicant’s affidavit shows that he continued to deal with Lauchland during 1995. During this year, according to the applicant, Lauchland told him on or about September 1995 that AMP had agreed to pay his costs of the action subject to the bill being taxed, that in October or November 1995 Lauchland told him that AMP had withdrawn its offer to pay his costs subject to taxation, that in late 1995 Lauchland informed him that [the present respondents] had decided to stop doing litigation work and that as it was only a few weeks before the matter would finally settle, the applicant should send his file to his new firm and that in late January 1996 Lauchland told him that he was employed by Niren Raj, a firm which specialised in insurance litigation and that he would take all the applicant’s files from [the present respondents].
Towards the end of February 1996 the respondents (apparently by Lauchland) caused to be sent to the applicant a bill of costs “re: AMP Society”. This was a bill for $1,315 for costs “since our last memorandum of costs since September 1994" and showed $45 outlays.
It appears that the applicant agreed to Lauchland taking the applicant’s file to Niren Raj.
The applicant became concerned at lack of action on the matter of costs, and his affidavit shows this concern during 1996 and early 1997. This situation obtained until about February 1997 when he engaged his present solicitors Nicholsons to act for him.
The issue of costs of the action against Australian Mutual Provident Society was settled in or about February 1998.
I was told from the bar table that AMP Society agreed to pay some of the applicant’s costs but the exact amount has not been disclosed.
The applicant did not receive any memorandum of fees from Raj Lawyers, (apparently Niren Raj) but did receive memoranda of fees from counsel, Messrs White and Egan and copies of these memoranda are exhibited before me.
The evidence before me shows that the applicant had been a client of the respondents since the early 1980's and was well known to the members of that firm on a “very personal basis”. Indeed, the respondents agreed from time to time to employ his son Paul Richardson as a clerk. There appears to be no dispute that Paul Richardson “worked on his father’s file in assisting Mr Lauchland from time to time”. Furthermore, the respondents believed that Paul Richardson collected the applicant’s file from their offices when the file was taken to Niren Raj Solicitors, and that Paul Richardson subsequently worked with Lauchland and continued to work with him after Niren Raj had begun to act. The respondents believe that Paul Richardson collected the whole of the applicant’s file for the benefit of Lauchland and Niren Raj.
To complete the picture there is before me a copy of a letter dated 7 September 1994 written by “Ryan Cost Consultant Pty Ltd” legal cost assessors, addressed to the respondents. The letter is dated 7 September 1994 and is marked “your reference: A Lauchland”.
The heading reads “re Richardson v AMP Society assessment of costs”. The letter reads:-
“I return herewith your file and advise I have assessed your “Solicitor and Own Client” professional costs in respect to this matter on the Supreme Court scale for the period from 22.09.89 to date, in the sum of $28,424.50 plus outlays
I thank you for your instructions and enclose herewith my memorandum of fees in respect to the compilation of this assessment.”
The applicant’s solicitor, Peta Gwen Stilgoe, has sworn that on 19 May 1998 she telephoned the applicant who informed her and she verily believed that he did not see a copy of the above letter dated 7 September 1994 until early 1997 when the conduct of his action had been taken over by Nicholsons.
As will be seen there is a gross disparity between the memo of costs dated 27 September 1994 (in respect of work done from 22 September 1989 to 21 September 1994) for which a charge of $43,000 was made and the assessment by Ryan Cost Consultant Pty Limited of the respondents “solicitor and own client” professional costs for the period from 22 September 1989 to 7 September 1994 at $28,424.50.
The disparity excites concern. The respondents, in a joint affidavit said that the applicant was elated with the successful conclusion of the action, that at the time of the negotiations for settlement they specifically recalled that the applicant was “unequivocally clear as to the net amount he would receive” and in relation to costs an estimate was specifically provided to him of approximately $50,000 plus outlays having regard to the matter having been conducted on a speculative basis. The respondents further swear:-
“We specifically say that Mr Richardson and Mr Lauchland with our knowledge and consent agreed to an amount of $43,000 for professional costs and further Mr Richardson was well aware of the amount for professional costs before the account was actually rendered to him. The agreement as to costs rendered resulted in the account being in running form and not in taxable form as the amount had already been agreed.”
The matter of alleged agreement on the quantum of costs was, on the affidavit evidence, disputed. I informed counsel that if that matter were to be resolved oral evidence would be required. However, neither counsel appeared to think this issue was important and in my view rightly so. To begin with, no date is assigned to the alleged agreement. Next, and more importantly it was in my view impossible for the applicant to assent to a bill of $43,000 for professional costs without his first being properly informed as to the reasonableness or otherwise of that sum. He was apparently being advised by Lauchland, and I should have thought that as between Lauchland and the applicant there was a conflict of interest such that, before any worthwhile advice as to the reasonableness of the charge could be given some documents should have been given to the applicant so that he could properly consider, possibly with independent advice, whether or not the amount charged was reasonable.
In an often quoted statement Mann J in the Supreme Court of Victoria had observed in Malleson Stewart Stawell and Nankivell v Williams (1930) VLR 410:-
“These authorities show that the courts have repeatedly held that a bill of costs must contain such details as will enable the client to make up his mind on the subject of taxation, and will enable those advising him to advise them effectively as to whether taxation is desirable or not.”
Furthermore, whether the alleged agreement pre-dated or post-dated the 27 September 1994 memo of costs is not known. If it post-dated 27 September 1994, that memo of costs did not suffice to enable the applicant to be properly informed by independent advice as to the reasonableness of the $43,000 charge. Furthermore, it is not known whether the alleged agreement pre-dated or post-dated the letter dated 7 September 1994 from Ryan Cost Consultants Pty Limited. If the agreement was after receipt of that letter then because, on the respondents evidence both the respondents and Lauchland were involved in the agreement, the quantum agreed upon namely $43,000 requires to be properly and satisfactorily explained, particularly if as the applicant asserts, he did not see that letter or a copy of it until some years later. The applicant says nothing concerning the action being speculative. The speculative point was not argued before me.
Mr Robinson properly recognises that I have a discretion as to whether to grant the relief sought. He argues principally that I should refuse the application because of prejudice to the respondents in the following respects:-
The solicitor Lauchland is no longer employed by the respondents. If a bill is to be prepared and taxed and an item is challenged on taxation it is said Lauchland is the person who should be present on taxation to argue justification and his likely absence on such an occasion will prejudice the respondents.
The applicant himself decided to transfer to Niren Raj the respondents’ file relating to the matter and did so before the matter of party and party costs of the action had been concluded.
The $43,000 had been paid in September 1994 after the memo of costs of 27 September 1994 had been received by the applicant.
The applicant’s son, Paul Richardson who had “worked on” the applicant’s file when assisting Lauchland was “well aware of the amount of the account to be rendered before in fact it was rendered as he was working in [the respondents’] office at that time”.
The applicant’s son Paul had physically collected the file from the respondents.
Part of the file of the respondents has been lost.
I shall deal with these matters seriatim.
The first matter in my view is not one which should of itself cause me to exercise the discretion against the applicant. It is however a matter I take into account.
The second matter is in my view of no consequence.
As to the third matter - the payment of the $43,000 - I have already expressed certain views. Here no bill of costs has been delivered by the respondents - a fact conceded by Mr Robinson - and even though the applicant has apparently agreed to the payment of the $43,000 from moneys held in trust for him, that does not mean that thereafter the applicant cannot demand a bill of costs (re Walsh Halligan Douglas’ Bills of Costs (1990) 1 Qd.R 288.
As to the fourth matter, I regard that as of no weight. It appears that Paul Richardson was not a lawyer nor an articled clerk, but a young man working in the respondents’ office in order to gain some work experience. Accepting that he did work with Lauchland on his father’s file relating to the action, Paul Richardson was far from qualified to express any view on the reasonableness or otherwise of the $43,000.
The fifth matter may have some bearing on the claim for loss of part of the file.
The sixth matter is the only significant one raised. On 19 March 1997 the applicant’s solicitors wrote to the respondents a letter (Exhibit 1) which said in part:-
“Parts of our clients file were forwarded to us by Raj Lawyers on 7 February 1997 pursuant to our clients authority. We are unable, however, to locate a complete set of the pleadings, Order 26 offers referred to in correspondence are not on the file, and correspondence leading up to settlement of the matter in August 1994 is also incomplete. Raj Lawyers have today informed us that all files and documents that were in their possession have been delivered to us and that “the balance of all documentation” is held by your firm. Our client is most anxious to progress this matter and we are unable to properly advise our client until we have received the full file. Would you kindly advise as a matter of urgency whether your firm does hold any of the aforementioned documentation, or any part of our clients file.”
Exhibit 2 is a copy of a letter dated 14 April 1997 in response and the respondents say:-
“We wish to advise we have conducted a thorough search of our archives and have been unable to locate any files relating to Mr Richardson’s matter.”
The memo of costs of 27 September 1994 lists all court documents, and I should have thought that there was a decided capacity to identify the relevant documents and view them for the purposes of preparing a bill of costs. The firm acting for the defendants - Corrs Chambers Westgarth - can I believe supply the missing pleadings if they are not available on the court file. Furthermore, on p.13 of the memo of costs is the reference “08/07/94 offer pursuant to Order 26".
The whole of p.12 and the first third of p.13 of the memo of costs lists (inter alia) letters and facsimiles bearing date between 27 July 1994 and 21 September 1994. In my view, even if the missing documents cannot be located it will be possible for the respondents, relying on the file as it presently exists to prepare a bill of costs in respect of all work done by them from 22 September 1989 up until early July 1994. As for work performed after that date, in my view most of the missing documents and details of attendances and the like can be obtained from Corrs Chambers Westgarth and this view has been confirmed by an affidavit from Peta Gwen Stilgoe filed after hearing argument in which she deposes to an agreement by Mr Abernethy of Corrs Chambers Westgarth, subject to his clients consent.
It is in my view highly desirable that the respondents be able to prepare a bill in an amount which properly remunerates them for the work which they have done.
During argument suggestions were made as to possible sources of the missing documents and at that stage no enquiry has been made from Lauchland himself nor from Paul Richardson. The respondents have since sworn and filed a further affidavit from which it appears:-
(a)further searches by them of their office and storage facility have failed to locate the missing part of the file;
(b)attempts to speak to Lauchland and Abernethy have proved unsuccessful;
(c)the missing file will not be capable of reconstruction;
(d)proper and complete taxation will be impossible.
In the view which I take of the matter before me, the disparity between the assessment of Ryan Cost Consultant and the memo of costs dated 27 September 1994 is so great that, notwithstanding some prejudice which may be suffered by the respondents because part of the file is missing and may not be found, I have reached the very firm view that this is a case where the orders sought should be made. Accordingly, I exercise my discretion in favour of the applicant and I order:-
That the respondents do within 42 days deliver bills of cost in taxable form in relation to all work charged to the applicant in its memoranda of fees dated 27 September 1994 and 22 February 1996.
That the bills in taxable form so delivered be taxed.
That the costs of each party of and incidental to this application be their costs in the taxation.
Liberty to apply.
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