Re the Legal Practitioners Act 1995
[1997] QSC 75
•23 April 1997
IN THE SUPREME COURT
OF QUEENSLAND
O.S. No. 872 of 1997
Before the Hon. Mr Justice Muir
[Re The Legal Practitioners Act 1995]
IN THE MATTER of LIPPIATT & CO's BILL OF COSTS
- and -
The Legal Practitioners Act 1995
CATCHWORDS: Taxation of solicitors Bills of Costs – circumstances in which bills of costs may be withdrawn – delivery of bills of costs subject to a condition.
Counsel:Mr R. Douglas for the respondent
Solicitors:Lippiatt & Co for the respondent
Hearing date: 16 April 1997
REASONS FOR JUDGMENT - MUIR J.
Judgment delivered 23 April 1997
In this matter, commenced by originating summons, the applicant seeks the following relief -
That a bill of costs dated 8 December 1994 delivered by Lippiatt & Co (the respondent) be "referred for taxation".
That Magistrates Court Plaint No. 2772 of 1995 be stayed.
That there be discovery and that pleadings be delivered.
That there be a trial of the issue "as to which party was responsible for termination of the retainer/contract between" the applicant and the respondent on 5 December 1994, and as to the legal consequences of such termination.
That the respondent pay the costs of the application.
A declaration that the Magistrates Court Plaint is invalid.
Matters leading up to delivery of the bill of costs
Paradise Grove Pty Ltd obtained a costs order against the applicant in proceedings in the Supreme Court. Those costs were taxed and a certificate obtained from the Deputy Taxing Officer of the Supreme Court dated 22 December 1993 certifying that the costs of the proceedings had been taxed and allowed in the sum of $6,583.68. Paradise Grove Pty Ltd demanded payment of the sum. Payment was not made and the judgment creditor proceeded to have issued a bankruptcy notice. It subsequently presented a bankruptcy petition.
The applicant deposes that he retain the respondent to oppose the petition. The matter was set down for hearing on 5 December 1994 and counsel was briefed to appear. The counsel briefed became unavailable. The applicant deposes that on 2 December 1994 he was informed that another counsel had been briefed to replace the counsel first briefed and that such counsel held an opposite opinion to that of the counsel first briefed concerning the applicants' prospects of success on the hearing of the petition. The applicant and the respondent appear to have divergent views as to the extent to which the advice of the second counsel departed from that of the first.
The applicant swore an affidavit in the bankruptcy proceedings on 5 December 1994 in which he referred to the conflicting advice and the circumstances in which it was said to have had occurred. He swore:"6.Given the circumstances imposed upon me at the last possible hour, I can have no confidence in Mr Lippiatt to act in my interest and the protection of my assets."
In these proceedings, the applicants swore:
"14.On the matter being adjourned on the 5/12/94 until 16/12/94, I returned to the office of Mr Lippiatt and I requested my file, required to prepare my own defence, which was refused, correspondence between the parties ensued."
In a letter of 6 December 1994 to the applicant the respondents wrote:
"If it is acceptable to you and in order to facilitate any transition to other solicitors:
1.They are free to photocopy the documents we hold and we will offer every reasonable facility for them to do that.
2.We will prepare an estimate of our costs and outlays and will render you an account up on the clear understanding that if you dispute our costs and the matter has to proceed to taxation in the Federal Court of Australia, then our account will be rendered subject to the outcome of the taxation and shall have the benefit thereof. If you ask for the costs to be taxed, then our bill shall be and be deemed to be withdrawn and this firm shall be entitled to whatever amount is allowed to it upon the taxation of the costs in the Federal Court."
The applicant in a letter of 7 December 1994, replied to the respondent's letter stating, inter alia:
"At no time did I request the return of the funds you are holding, I am well aware of the solicitors lien procedure, I consider the $3,200.00 ample security for any work and expenditure you are likely to receive from taxation of any bill submitted.
. . . . .
Please supply a bill of costs in taxable form as requested on the 5th instant. ."
The respondents wrote to the applicant on 8 December 1994:
"Again, and in order to resolve this matter without incurring unnecessary costs, we enclose herewith a memorandum of our costs and outlays in acting in the matter thus far. We are prepared to limit our costs and outlays to the amount we hold in our trust account. We have no doubt that upon taxation of our bill, the costs we are entitled to be paid would be considerably in excess of that which we are charging.
. . . . .
You would realise that if a client calls upon a solicitor to tax his costs, it is incumbent upon the solicitor to deliver a bill in taxable form within twenty-eight (28) days of the request being made. We have no desire to inconvenience you in any manner and if the enclosed bill is to your satisfaction, please return to us immediately the enclosed authority and we will forthwith release your files.
If on the other hand, you insist on our costs being taxed, the enclosed bill will be withdrawn immediately and we will proceed to prepare a bill in taxable form and have the same available to you within twenty-eight (28) days of your request. In that event, and we make this perfectly clear, the costs that we seek will be the full costs we are entitled to upon the taxation of our bill. In the meantime, we have a lien over all documents until the bill is taxed and our costs are paid."
Enclosed with the letter was an account dated 8 December 1984 in the sum of $3,300.00 which showed a nil balance after the entry "less transferred from trust account as per statement herewith".
The applicant wrote back on 9 December 1994:"Be advised I reject your account as rendered 8/12/94.
Please present an account in taxable form as requested verbally on 5th December 1994 and by a letter of the 7th December 1994".
A bill, seemingly in taxable form, was forwarded to the applicant under cover of a letter from the respondent dated 22/12/94. The total of the entries in the bill was in excess of $11,000.00.
Magistrates Court proceedings commenced by the respondent
The respondent caused a plaint and summons to be issued in the Magistrates Court on 3 February 1995 in which it claimed the sum of $8,014.95 "being the balance of monies owing by the defendant for professional services rendered at his request by the plaintiff between the period from April, 1994 up to December, 1994."
The applicant filed an entry of appearance and defence dated 7 March 1995. The document included a counterclaim. Allegations in the defence included:"5.The defendant received a bill in taxable form dated 22 December 1994 for the sum of $11,314.95 . . .
6.The defendant received no demand for the claim of $8,014.95.
. . . . .
8.Under cover of a letter dated 8 December 1994 the plaintiff delivered to the defendant a `lump sum' bill of claimed costs in the sum of . . $3,300.00 in total satisfaction of such costs."
The respondent brought a summary judgment application returnable on 29 March 1995. The applicant successfully resisted the application by relying, at least in part, on an affidavit sworn on 27 March 1995. In that affidavit the applicant raised matters including:
(a)the delivery of a bill dated 8/12/1994;
(b)allegations of termination of the retainer by the respondent;
(c)allegations of negligence and wrongdoing on the part of the respondent.
In written submissions to the magistrate, the applicant relied on Re Carter Newell's Bill of Costs (1993) 2 Qd.R. 593 and 597; Re Edwin Sutherland and Co's Bill of Costs (1971) Qd.R. 318 and in Re Thompson (1885) 30 Ch.D. 441.
The written submissions included the following:"2.Prima facia plaintiff's claim is limited to $3,300 which is, and always was in his power and possession . . ".
There was an assertion that:
"The plaintiff failed to complete the purpose of the retainer/contract due to his own negligence or deliberate intent."
Further interlocutory steps were undertaken in the action. On 7 December 1995 a certificate of readiness for trial was delivered by the respondent to the applicant with the request that the applicant execute and return it to the respondent. The applicant failed to return the signed certificate and a pre-trial conference was held at the request of the respondent on 23 February 1996. At the conclusion of the pre-trial conference, the applicant informed Mr Woodbury on behalf of the respondent that should the respondent set the action down for trial he would apply for an order that the action be transferred to the Supreme Court for determination of a preliminary point of law as to whether the plaintiff had the right to deliver the bill of costs. The references was to the bill of costs in taxable form.
The applicant was served with a notice on 30 October 1996 notifying him that the trial of the action had been set down for 3, 4 and 5 February 1997. The applicant wrote to the respondent on 27 January 1997 stating inter alia:"This letter is to advise you that it is my intention to make application by way of summons for orders of the Supreme Court pursuant to the Legal Practitioners Act 1995, s.8(3) to have the bill if so decided ref ed. (sic) to taxation and for certain other and further orders in that regard."
This summons and matters concerning its hearing
This originating summons was filed on 30 January 1997 with a return date of 16 April 1997.
The matter came before me in chambers on 16 April 1997 with an estimated hearing time of 1 hour and 30 minutes. The applicant informed me that he did not wish to proceed to a substantive hearing but instead was concerned to obtain directions as to the further conduct of the matter. The respondent pressed for a hearing of the substantive issues raised in the summons contending that it could be demonstrated on the material that the relief sought could not be obtained. As the applicant may not have come prepared to argue the substantive issues I raised with him on at least two occasions the question of whether he wished to seek an adjournment. He declined to do so. At the close of his submissions I gained the impression that there were passages in the authorities which the applicant would have liked to have dealt with more fully. I then offered him the opportunity of making further submissions the following morning. He declined the offer stating, in substance, that he was tired and stressed. I then directed that he could deliver further written submissions by 5.00 p.m. on the following day. Subsequently, I had my associate inform the parties that the applicant had until 5.00 p.m. on Monday 21 April 1997 to deliver further written submissions. Further submissions were delivered.
Determination of the issues raised by the originating summons
I can see no point in ordering the delivery of pleadings in this matter. The issues have been well enough defined in correspondence, by pleadings and affidavits in the Magistrates Court and by further affidavit material in these proceedings nor does it seem to me to be appropriate to order discovery in proceedings such as these, particularly having regard to the history of the matter and the issues involved.
The application seeks an order to referring the 8 December 1994 bill of costs to taxation. The respondent contends that the 8 December bill is not a "bill" within the meaning of s.8(3) of the Legal Practitioners Act 1995. It is submitted on the authority of Re Bailey's Bill of Costs (1994) 1 Qd.R. 576 that to constitute such a bill there must be included "such details that will enable the client to make up his mind on the subject of taxation, and will enable those advising him to advise him effectively as to whether taxation is desirable or not." I find it unnecessary to decide this point.
I have set out above the circumstances in which the two bills were rendered. The 8 December 1994 bill was rendered on a conditional or provisional basis. It was asserted in the respondent's letter of 8 December 1994 that a reduced fee limited to monies held in trust would be charged as a means of avoiding unnecessary costs. The respondent reserved the right, if the applicant insisted on costs being taxed, to withdraw the bill and to then present a bill in taxable form in which the respondent would include "the full costs we are entitled to upon the taxation of our bill". The applicant rejected the 8 December account and required a bill in taxable form. One was then rendered in accordance with the applicants' request.
In his written and oral submissions the applicant relied heavily on authorities which established that, at least as a general rule, a solicitor is bound by his bill as delivered and that he is not entitled, without leave of the court to withdraw it or substitute an amended one. A number of those cases are collected in Re Carter Newell's Bill of Costs (1993) 2 Qd.R. 593. The "rule" is referred to in 44(1) Halsbury's Laws of England 4th ed., para.199 where it is said in footnote 2–"The reason for the rule is to prevent any attempt being made by a solicitor to impose on his client who does not know what the proper charges are by sending in a bill which could not stand taxation and then when taxation is insisted upon or threatened, which might result in the solicitors being liable for the cost of the taxation, sending in another bill which he knows can stand taxation."
But there is no absolute bar against a solicitors' withdrawing a bill of costs and substituting another which is greater in amount. In Re Holroyde and Smith (1881) 43 L.T. 722 Jessel M.R. said at 723, referring to the judgment of Lord Romilly in Re Chambers 11 L.T. Rep. N.S. 726–
". . for what Lord Romilly seems to have actually decided was that there must be special circumstances to entitle a solicitor to withdraw one bill and substitute another. In my opinion under special circumstances, this might be so, that is to say, on the ordinary equitable grounds of fraud, accident or mistake – such as, for instance, when the solicitor had been entrapped into making charges by the misrepresentations of his client or in the case of accident, where a charge or a wrong page has been inserted by mistake, but special circumstances there must be. Lord Romilly says, in Re Chambers : Lord Langdale held, and I have also held, that a solicitor cannot substitute as a matter of course a second bill for the first, but I have not held that you can never do it."
Re Holroyde and Smith (supra) was followed in Re Edwin Sutherland and Co's Bill of Costs (1971) Qd.R. 318 (F.C.).
In Re Thompson (1885) 30 Ch.D. 441 (C.A.) it was held unanimously that bills of costs would be sent by a solicitor subject to a condition.
Cotton L.J. held at 450 that the Court could disallow an unpaid condition at 451 he concluded that the condition, which he held to be unfair, was in consequence, "ineffectual".
Lindley L.J., at 453, also appeared to share the view that an unfair condition was ineffectual. Fryberg J. discussed in Re Thompson when considering a conditional bill of costs rendered to this applicant in In the matter of Hill & Taylor (a firm) and the Costs Act 1867 Section 25 (29.8.95 unreported). In so doing he observed that he declined to follow Re Michie (1898) 24 V.L.R. 440 and Re Gibbons 40 W.N. N.S.W. 111 as, in his view, they were wrongly decided. I do not find it necessary to expressly consider whether they were wrongly decided or not. Their facts are readily distinguishable from the facts of this case.
There was nothing unfair, unjust or unconscionable in the condition imposed by the respondent in respect of the first bill of costs. Alternatively, as it was rendered on a provisional basis only rejected and replaced by a new bill which was expressly requested by the applicant I can see no objection in principle to the new bill of costs. As the application seeks the taxation of the old rejected and replaced bill rather than the substituted bill I have concluded that the application should be dismissed.
If it came to the question of an exercise of discretion under s.8(3) of the Legal Practitioners Act 1995 as to whether the old bill should be referred to taxation I would exercise it against the applicant for the reasons that–1.The condition imposed in relation to the first bill was not unreasonable.
2.The first bill was rejected by the applicant and the second bill presented at his request.
3.There has been considerable delay on the part of the applicant in making his request which has acted to the prejudice of the respondent.
4.The applicant has had considerable experience in relation to bills of costs and, elected, when at suited him to do so, to dispute the respondents' claims in the Magistrates Court proceedings.
5.There is little of, if any, evidence of overcharging and the question of possible overcharging appears to have been raised very late in the piece.
In the circumstances discussed above the disparity in quantum between the first bill and the second is explicable and is not sufficient to override the other considerations which I have just listed. I can see no good reason why the question of whether the retainer was lawfully terminated by the respondent, and, if not, the legal consequences which flow therefrom, can not be decided in the Magistrates Court proceedings.
In case this matter should go further I will have the following documents marked as exhibits–
The respondents' outline of submissions EX 1
The applicants' outline of submissions EX 2The respondents' outline of submissions EX 3
in reply and its covering letter
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