Robinson v Jones (No 4)
[2016] VSC 160
•15 April 2016
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROBATE LIST
S PRB 2014 11075
| JAMES WILLIAM ROBINSON (in his capacity as executor of the will and estate of BRUCE DESMOND ANDREWS, deceased) | First Plaintiff |
| SIMON JOHN RALEIGH (in his capacity as executor of the will and estate of BRUCE DESMOND ANDREWS, deceased) | Second Plaintiff |
| v | |
| JENNIFER LEE JONES | First Defendant |
| VICTORIAN ANIMAL AID TRUST | Second Defendant |
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JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 14 August 2015 |
DATE OF JUDGMENT: | 15 April 2016 |
CASE MAY BE CITED AS: | Robinson v Jones (No 4) |
MEDIUM NEUTRAL CITATION: | [2016] VSC 160 |
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COSTS — Where plaintiffs’ application to propound informal document refused — Where the Court requested parties to provide particulars of costs — Whether costs are reasonable and proportionate to the issues in dispute — Civil Procedure Act 2010, s 24.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S Horgan QC with | Best Hooper |
| Mr G S Baker | ||
| For the First Defendant | Ms U Stanisich | Henderson & Ball Lawyers |
| For the Second Defendant | Mr Wallace | Hentys Lawyers |
HER HONOUR:
Background
On 3 April 2014, the plaintiffs filed an application for a limited grant of administration ad colligendum bona in the estate of the deceased, who died on 8 March 2013. The application for the limited grant included a copy of the deceased’s will dated 26 June 2012 (‘the June 2012 will’) and an unexecuted draft document (‘the informal document’) said by the plaintiffs to have been verbally approved by the deceased in a telephone call with his solicitor, the first plaintiff (‘Mr Robinson’), on 1 March 2013. Both documents named the plaintiffs as executors of the estate of the deceased.
Jennifer Lee Jones (‘Ms Jones’) is named as a beneficiary under the June 2012 will, receiving 20 per cent of the residue of the estate, but is not named in the informal document. The Victorian Animal Aid Trust (‘the VAAT’)[1] and Ms Jones’ son-in-law, Mr Robert Alan Couzens (‘Mr Couzens’), are named as beneficiaries in the informal document receiving between them the 20 per cent share that was previously left to Ms Jones. Mr Couzens is to receive the sum of $500,000 and the VAAT is to receive the balance of the 20 per cent share. Neither Mr Couzens nor the VAAT are named as beneficiaries in the June 2012 will.
[1]The VAAT was added as a defendant to the proceeding pursuant to orders made by the Court of Appeal in Victorian Animal Aid Trust v Robinson [2014] VSCA (Unreported, ex tempore judgment, 28 November 2014) [8]-[15] (Neave JA, Ginnane and Sloss AJJA). Supreme Court proceeding S APC 2014 0140.
By application filed 29 July 2014, the plaintiffs made application for a grant of probate of the informal document, pursuant to s 9(1) of the Wills Act 1997, alternatively, the June 2012 will (‘the probate proceeding’).[2]
[2]Supreme Court proceeding S PRB 2014 11075.
The probate proceeding was commenced by originating motion filed 29 July 2014. Initially, the plaintiffs filed seven affidavits in support of the application, then two further affidavits in September 2014 and one affidavit in October 2014.
At the first directions hearing on 20 October 2014, the VAAT made an oral application to be added as a defendant to the probate proceeding. That application was rejected and the VAAT appealed that decision by summons filed 3 November 2014. The appeal was determined on the papers, with no appearance by the parties required. The Court of Appeal determined that the VAAT be added as a defendant (‘the appeal proceeding’).[3] In respect of the costs of the appeal, the Court said whilst the joinder of the VAAT may add to the costs of the probate proceeding the question of whether those costs should be borne by the estate is a matter to be dealt with when the question of which will should be probated is finally determined. In the meantime, the Court ordered that the costs of the application and the determination of the interlocutory appeal be costs in the probate proceeding.[4]
[3]Supreme Court proceeding S APC 2014 0140. Victorian Animal Aid Trust v Robinson [2014] VSCA (Unreported, ex tempore judgment, 28 November 2014) [8]-[15] (Neave JA, Ginnane and Sloss AJJA).
[4]Ibid [17]
On 5 December 2014 the plaintiffs filed an amended originating motion adding the VAAT as a defendant to the proceeding. Also in December 2014, the first plaintiff filed an affidavit of documents and a supplementary affidavit concerning further evidentiary matters and inviting the Court to consider whether another document should be admitted to probate together with the informal document.
In January 2015, the first and second defendants each filed affidavits. Ms Jones opposed the informal document being propounded and the VAAT supported it.
In February 2015, further directions were made and the proceeding was set down for trial on 20 April 2015. After the directions hearing, the plaintiffs filed one further affidavit in support of the application.
On 16 April 2015, as a result of a mediation (‘the mediation’), the plaintiffs purported to enter into a deed of settlement with Ms Jones, the VAAT and Mr Couzens dealing with the distribution of the twenty per cent of the estate between them and, in respect of Ms Jones, a release by her of any claim she may have against the estate of the deceased under Part IV of the Administration and Probate Act 1958 (‘the deed of settlement’).
On 17 April 2015, the Court was informed that Ms Jones withdrew her opposition to the informal document being propounded and would not appear at the trial.
At the trial on 20 April 2015, the plaintiffs submitted that there was adequate evidence to support a grant of the informal document, alternatively, the June 2012 will. The VAAT supported the grant of the informal document. The trial was heard and concluded on 20 April 2015
On 1 June 2015, the Court refused the application for a grant of probate of the informal document. Orders were made granting probate of the 26 June 2012 will to the plaintiffs.[5]
[5]Robinson v Jones [2015] VSC 222 (1 June 2015) [136].
In the judgment, the Court expressed its concerns regarding the quality of the admissible evidence in some of the affidavits filed in the proceeding and asked the parties to provide submissions as to costs, taking into account the overarching obligation of the parties to ensure that the costs are reasonable and proportionate under s 24 of the Civil Procedure Act 2010.[6] The Court also queried the basis of and the power of the plaintiffs to enter into the deed of settlement.[7]
[6]Ibid [137].
[7]Ibid [138].
On 17 July 2015, the Court published its reasons concerning the basis of and power of the plaintiffs to enter into the deed of settlement, determining that the plaintiffs’ response to the Court’s enquiry regarding the basis of and power of the plaintiffs to enter into the deed of settlement was inadequate.[8] Pursuant to orders, the plaintiffs filed an affidavit on 7 August 2015 that exhibited the deed of settlement and subsequently filed written submissions dated 12 August 2015.
[8]Robinson v Jones (No 2) [2015] VSC 334 (17 July 2015).
On 14 August 2015, the parties made further submissions in respect of the basis of and the power of the plaintiffs to enter into the deed of settlement under a limited grant.
On 20 November 2015, the Court delivered judgment on the issue of the basis and power of the plaintiffs under a limited grant to enter into the deed of settlement.[9] The Court held that entering the deed of settlement was beyond the power of the plaintiffs; it should not have been entered into and should not be approved or ratified by the Court upon a grant of probate being made of the June 2012 will.[10]
[9]Robinson v Jones (No 3) [2015] VSC 508 (20 November 2015).
[10]Ibid [37].
In its reasons published on 17 July 2015 in respect of the reasonableness and proportionality of the costs, the Court found that it was no better informed on these aspects of the costs after considering the plaintiffs’ written submissions. As a result the parties were ordered to file affidavits setting out the details of their respective professional costs and disbursements, including the basis of their charges.[11] Subsequently, the solicitors for each party filed affidavits setting out the professional fees and disbursements claimed by them, in all amounting to $318,493.37: the plaintiffs’ costs total $141,294.88; Ms Jones’ costs total $60,796.81 and the VAAT’s costs total $116,402.38.
[11] Ibid [39]–[40].
The costs being claimed by the parties include the work done for the probate proceeding, the appeal proceeding and the mediation and resulting deed of settlement.
In further written submissions made on 14 August 2015 as to the costs, the plaintiffs submitted that the evidence filed in respect of the application to propound the informal document was important in determining whether or not it represented the last testamentary wishes of the deceased.[12] Insofar as the Court raised issues about the evidence advanced by the plaintiffs, their proper role in the proceeding should be considered. Otherwise, the plaintiffs believe the costs claimed by all parties are reasonable and proportionate and should be paid from the estate on the standard basis. The VAAT supported the plaintiffs’ submissions on costs and Ms Jones took a neutral position.
[12]Counsel relied on In the Will of Steward, deceased [1964] VR 179, where the executors filed evidence in respect of two validly executed wills to determine if the later will was tainted by a lack of testamentary capacity.
Consideration of the reasonableness and proportionality of the costs of the parties
The Court’s concern as to the reasonableness and proportionality of the costs arises from the quantum of costs. The parties’ costs of $318,493.37 are sought to be paid from the estate and, considering the limited issues in dispute, the Court considers that they are not reasonable and proportionate. The legal principles to be applied for a grant of representation of an informal document, alternatively, the June 2012 will, are well settled. The trial took one day and involved the application of settled principles to the facts set out in the various affidavits. Although Ms Jones did not appear at trial, her written submissions were filed.
In support of their costs to be paid from the estate, the parties rely on the accepted probate costs rule that where probate litigation has been caused, or contributed to, by the way in which a testator made his or her testamentary intentions known, costs are usually ordered to be paid out of the estate.[13]
[13]Murdocca v Murdocca (No 2) [2002] NSWSC 505 (25 June 2002); Warton v Yeo [2015] NSWCA 115 (7 May 2015) (Basten JA, Ward JA, Emmett JA); Fielder v Burgess [2014] SASC 98 (7 August 2014); Re Buckton; Buckton v Buckton [1907] 2 Ch 406, 414.
In respect of trustees’ costs, trustees are entitled as of right to indemnity out of the trust for expenses properly incurred. [14] Costs incurred improperly, for example, where a trustee has acted beyond power, are not recoverable.
[14]National Trustees Executors & Agency Company of Australasia Ltd v Barnes [1941] HCA 3; (1941) 64 CLR 268; Dimos v Skaftouros [2004] VSCA 141 (20 August 2004), Dodds Streeton AJA.
The power of the Court to order costs under s 24 of the Supreme Court Act 1986[15] is exercised subject to and in accordance with Order 63 of Supreme Court (General Civil Procedure) Rules 2005 (‘the Rules’).[16] Pursuant to r 63.07, the Court may order that costs be taxed, or a portion of the moneys specified in the order be taxed or that the party pays a gross sum instead of taxed costs.
[15](1) Unless otherwise expressly provided by this Act or by the Rules, the costs of and incidental to all matters in the Court, including the administration of estates and trusts, is in the discretion of the Court and the Court has full power to determine by whom and to what extent the costs are to be paid.
[16]Supreme Court (General Civil Procedure) Rules 2005, r 63.02. Note that these Rules have been superseded by the Supreme Court (General Civil Procedure) Rules 2015.
Where professional fees and disbursements are to be paid from a fund, such as an estate, the costs payable are governed by Part 3 of Order 63 of the Rules. Part 3 applies to costs in a proceeding that, by or under any Act or the Rules or any order of the Court, are to be paid to a party to a proceeding either by another party or out of a fund. The default position set out in r 63.31 provides that the basis of taxation is the standard basis, that is, costs reasonably incurred and of reasonable amount, and not the indemnity basis.
Pursuant to r 63.34, whether the basis of taxation is the standard basis or the indemnity basis, a legal practitioner for a party to whom costs are payable is entitled to charge and be allowed costs in accordance with the scale in Appendix A of the Rules, unless the Court or the Costs Court otherwise orders. Whilst the Court has a broad discretion in relation to the costs of a proceeding, the usual position is that costs be on the standard basis in accordance with the Supreme Court scale.
All the parties, including the plaintiffs who would ordinarily be entitled to indemnity from the estate for their reasonable costs and expenses of the proceeding, seek that their professional fees and disbursements be paid from the estate on the standard basis. The standard basis is assessed in accordance with the Supreme Court scale unless the Court otherwise orders.
Having stated that their claims for costs are on the standard basis, the parties’ professional fees have been quantified on the basis of hourly rates.
In the case of the solicitors for the plaintiffs, Best Hooper, it is not clear on what basis it has charged hourly rates. In the case of Ms Jones’ solicitors, Henderson & Ball, it has charged on the basis of an unsigned costs agreement[17] and, in the case of the VAAT’s solicitors, Hentys Lawyers, it has charged on the basis of a conditional costs agreement, that is, professional fees are only payable by the VAAT based on a successful outcome in the proceeding.
[17]Note that a costs agreement can be accepted in writing or by other conduct: Legal Profession Act 2004, s 3.4.26.
A costs agreement determines the professional fees chargeable as between solicitor and client, not the costs of a proceeding payable from the fund, unless the Court otherwise orders.
In quantifying their claims on an hourly rate, all the solicitors for the parties have charged a relatively high hourly rate for work done by a solicitor compared with that allowed in accordance with the Supreme Court scale under Appendix A. The hourly charges have been applied by the solicitors irrespective of whether that work required legal skill or knowledge or the nature of the work performed as set out in their respective claims.
In addition, the Court found that some of the affidavits filed by the plaintiffs and the affidavit filed by the VAAT contained irrelevant material. Whilst the plaintiffs submitted that their proper role in the proceeding to produce evidence in respect of both the June 2012 will and the informal document is a necessary consideration, the proper presentation of evidence also remains a consideration in assessing the quantum of costs. The client ought not be charged any costs for including irrelevant and inadmissible material in the affidavits. This consideration also applies to the affidavit relied on by the VAAT. It is not reasonable or appropriate for Best Hooper or Hentys Lawyers to claim the costs of including irrelevant and inadmissible material in their affidavits from the estate.
Professional fees and disbursements of Best Hooper, solicitors for the plaintiffs
The total of the costs and disbursements claimed by Best Hooper comprises professional fees of $78,167.65 and disbursements of $63,127.23
Best Hooper acts as the solicitors for the plaintiffs, Mr Robinson and Mr Simon Raleigh, the administrators and now the executors of the estate of the deceased. Both Mr Robinson and Mr Raleigh are principals of Best Hooper. In addition, Mr Robinson has acted in a number of other capacities:
(a) as the solicitor for the deceased prior to his death, he prepared the informal document and was a witness in the proceeding deposing to the deceased’s verbal approval of the informal document in a telephone call with him on 1 March 2013;
(b) as the joint administrator of the estate, he filed affidavits in the proceedings on his own behalf and on behalf of Mr Raleigh; and
(c) as the responsible solicitor at Best Hooper acting for the administrators in the probate proceeding, the appeal proceeding and the mediation.
As a fiduciary, administrators and executors owe a duty to act in the best interests of the beneficiaries of an estate and must avoid any situation that may lead to a conflict between their interests and that of the beneficiaries.[18] Given the potential for conflict arising between the interests of the estate and the interests of Messrs Robinson and Raleigh as principals of Best Hooper, it may have been preferable for them as the administrators of the estate to engage another law practice to act as the solicitors for the estate. In this regard, competent solicitors that were prepared to charge on the basis of Supreme Court scale allowances or a more reasonable hourly rate that that charged by Mr Robinson could have been retained to act for the estate. Although it may be said that the provisions of the June 2012 will may exclude such a course, it is always preferable for administrators in the position of the plaintiffs to avoid the possibility of a conflict of interest.[19]
[18]See, eg, Dal Pont GE and Chalmers DRC, Equity and Trusts in Australia and New Zealand (2nd ed, LBC Information Services, 2000) p 429, citing Mackenzie v Mackenzie (1998) 16 FRNZ 487; Meagher RP and Gummow WMC, Jacob’s Law of Trusts in Australia (6th ed, LexisNexis Butterworths, 1997) at [202]; Bhojani S, ‘Professionals’ Fiduciary Relationships – An ACCC View’ (2003) 23 (11) Proctor 22. See also Noble v Victoria [2000] 2 Qd R 154; [1999] QCA 110 (CA).
[19] Clause 2 of the June 2012 will appears to allow the trustee of the estate ‘who is a lawyer to charge for work done by him or his firm as if he were not one of my trustees but had been engaged to act on behalf of my trustees and he may claim commission in addition’.
In his affidavit sworn 5 August 2015, Mr Robinson deposed that the costs of Best Hooper are calculated on the basis of the Practitioners’ Remuneration Order (‘the PRO’) and the scales under Chapters I and III of the Rules, as in force from time to time, except in two respects:
(a) Instead of hourly or quarter hour charges allowed under the PRO and Chapter I of the Rules, Mr Robinson’s time has been charged at $500 per hour plus GST, noting that most charges in the professional fees charged by Best Hooper are time based; and
(b) Best Hooper do not charge an additional loading for instructions although the invoices refer to ‘skill, care and attention’.[20]
[20]Although the exhibited invoices include the item ‘skill, care, attention’ as of 1 April 2013, the Supreme Court scale removed any loading for instructions.
The PRO provides a set of scales and orders providing for the costs that may be charged by solicitors for a range of non-litigious legal work and non-contentious general administrative work, including general estate administration that might precede or flow from a decision of the Court. In this proceeding, prima facie the costs are chargeable in accordance with the Supreme Court scale as costs payable from a fund (being in this case the estate of the deceased). Both the PRO and the Supreme Court scale have a variety of task based allowances for drawing and engrossing documents and correspondence; receiving, filing, perusing, scanning or examining documents and correspondence and other matters.
Mr Robinson has exhibited Best Hooper’s time sheet records for the costs claimed in six invoices for the period 30 June 2014 to 24 June 2015.[21] These invoices do not charge the scale fees.[22] Most of Best Hooper’s professional fees have been charged on the basis of Mr Robinson’s hourly rate of $550 per hour (incl. GST) calculated in six minute units of $55 per unit. A relatively small amount of work was performed by ‘AS’ at a rate of $165 per hour or $16.50 per unit with a few units performed by ‘TH’ at the same rate and ‘MDF’ at a rate of $220 per hour or $22 per unit. There are also some additional charges for ‘printing and photocopying’ although the basis on which these amounts have been calculated is unclear.
[21]Affidavit of Mr Robinson sworn 5 August 2105 [12]; exhibit ‘JWR-14’.
[22]Affidavit of Mr Robinson sworn 5 August 2105 [3]; exhibits as ‘JWR-1’- ‘JWR-6’.
Best Hooper did not enter into a costs agreement with Mr Robinson and Mr Raleigh, who are Best Hooper’s clients in their capacity as administrators of the estate of the deceased. Mr Robinson maintains that, as they are both Australian legal practitioners as defined by s 1.2.1 and 1.2.3(a) of the Legal Profession Act 2004 (‘the LPA’), pursuant to s 3.4.12(c)(i) of the LPA, the usual costs disclosure was not required. Whilst such disclosure might technically not be required as both Mr Robinson and Mr Raleigh would qualify as ‘sophisticated clients’, this does not obviate the requirement of entering into a costs agreement pursuant to Division 5 of Part 3.4 of the LPA where Best Hooper purported to charge a client on a rate otherwise than as specified in the applicable scale of costs.
How Mr Robinson considers that Best Hooper is entitled to quantify its professional fees on the basis of its usual hourly rates is not relevant because pursuant to s 3.4.19 of the LPA, a law practice is entitled to charge in accordance with:
(a) a costs agreement; or
(b) if paragraph (a) does not apply, in accordance with an applicable practitioner remuneration order or scale of costs; or
(c) if neither paragraph (a) nor (b) applies, according to the fair and reasonable value of the legal services provided.
Thus, in the absence of a costs agreement with its clients, Best Hooper is limited to charging in accordance with the applicable practitioner remuneration order or scale of costs.
As Best Hooper’s invoices quantify the fees on the basis of hourly rates, it is difficult to find a basis for Mr Robinson to depose that Best Hooper is charging on the basis of the PRO and the scales under Chapters I and III of the Rules or, considering the provisions of s 3.4.19 of the LPA, entitled to charge the estate on the basis of Mr Robinson’s usual hourly rates.
Even if Best Hooper should somehow be entitled to charge the estate on the basis of its usual hourly rates, notwithstanding the absence of a costs agreement, the costs claimed are unreasonable. Best Hooper has charged almost entirely on the basis of Mr Robinson’s hourly rate of $550 per hour. This is a relatively high hourly rate for work done by a solicitor, particularly if applied irrespective of whether that work performed actually required the exercise of legal skill or knowledge. Some examples from the time sheet records illustrate this point:
(a) on 26 February 2015, an amount of $935 (incl. GST) was charged for ‘attending at Ms Moreland’s rooms and taking her oath (including travel)’;
(b) on 3 March 2015, an amount of $220 was charged for ‘attending to collect papers from Mr Phillips [of counsel] and deliver them to Mr Marantelli’s [of counsel] clerk’;
(c) on 15 April 2015, an amount of $440 was charged ‘searching files and deed packet for initialed (sic) document, email to counsel’; and
(d) on 27 April 2015, an amount of $55 for reviewing a fee-slip from Foley’s list – an administrative task that is not chargeable on any basis.
Many of the other entries have insufficient detail to enable a proper analysis to be made but considering the time sheets as a whole, the professional fees being claimed are excessive when compared with the Supreme Court scale in 2015. That scale provides for an allowance of $418.80 per hour (incl. GST) or $41.80 for each six minute unit or part thereof for attendances by a legal practitioner requiring legal skill or knowledge, although a loading may be factored in, generally calculated between 8 per cent to 12 per cent of the total of professional charges, that can be claimed pursuant to item 17 of the scale.
Other attendances, not requiring legal skill or knowledge and capable of performance by a clerk, are chargeable at a rate of $24.20 (incl. GST) per six minute unit or part thereof. Whilst there is little doubt that the Supreme Court scale is a generous scale, particularly from 1 April 2013 when the scale was substantially amended, it would be surprising if Best Hooper’s professional fees, properly quantified on scale, approached the $78,167.65 currently being claimed, particularly in view of the heavy reliance on both senior and junior counsel as set out in the disbursements.
In respect of the appeal proceeding, Mr Robinson exhibits Best Hooper’s tax invoice for $3,107.28 dated 17 December 2014, senior counsel’s fee slip for $3,600 and deposes that junior counsel’s fee of $2,400 is claimed in exhibit ‘JWR-14’ although no fee slip is attached to the invoice.[23]
[23]Affidavit of Robinson sworn b5 August 2015, [8]; exhibits ‘JWR-12’ and ‘JWR-13’.
Best Hooper’s tax invoice for $3,107.28 describes work done on specified dates with a the total sum claimed at the end of the invoice. It is not possible to understand the basis or quantum of the charges in order to ascertain the reasonableness of the amounts claimed by Best Hooper. Mr Robinson’s exhibit of his time records does not appear to include any detail of the time spent on the appeal proceeding.
The issue in dispute in the appeal proceeding was the joinder of the VAAT as a defendant to the proceeding. The plaintiffs were not the applicant in the appeal but did not oppose the VAAT’s application. The appeal was dealt with on the papers. The issues on appeal were straight forward and would not justify the retention of senior counsel. Junior counsel is said to have charged $2,400 and although his fee slip is not attached to a tax invoice, the invoice records the fee slip as dated more than four months after the work for the appeal proceeding was done. Without the fee slip and the details of the work undertaken by counsel, the reasonableness of the junior counsel’s fee cannot be determined.
The plaintiffs also retained both senior and junior counsel in the probate proceeding. Senior counsel’s fees amounted to $37,308 (incl. GST) and junior counsel’s fees amounted to $15,100 (incl. GST). As stated, the issues involved in the probate proceeding consisted of the application of well settled legal principles based on facts contained in the affidavits filed by the respective parties. There was no cross examination and the trial took one day. In my view, the retention of senior counsel for the probate proceeding was not reasonable in the circumstances. In respect of junior counsel’s fees, it is difficult to determine the reasonableness of his fees without the details of what work was done.
Professional fees and disbursements of Henderson & Ball, solicitors for Ms Jones
Henderson & Ball claim $60,796.82 being professional fees of $41,188.40 and disbursements of $19,608.41.[24] Of the disbursements of $19,608.41 the sum of $11,040 comprises counsel’s fees.
[24]Affidavit of Justin Paul Lawrence sworn 30 July 2015.
Henderson & Ball’s costs are quantified in accordance with a schedule of charge out rates annexed to the costs agreement, which agreement has not been signed by Ms Jones, although was likely consented to by her continuing to provide instructions.[25]
[25]LPA, s 3.4.26.
In his affidavit sworn 30 July 2015, Mr Justin Paul Lawrence exhibits copy ledgers showing work in progress recorded, disbursements incurred, copy first page of invoices calculated according to time records, disbursements incurred and barrister’s fee slips.
Whilst Henderson & Ball has charged professional fees of $41,188.40 the professional fees detailed in its Fee List exhibited as ‘JPL 5’ only total $24,990 (excl. GST), comprising 510 six minute units of work being a total of 51 hours, which were all performed by Mr Lawrence and charged at a rate of $490 per hour (excl. GST), irrespective of the nature of the work performed by Mr Lawrence. This is a relatively high hourly rate for work done by a solicitor, particularly if applied irrespective of whether that work required legal skill or knowledge.
Professional fees and disbursements of Hentys Lawyers, solicitors for the VAAT
Hentys Lawyers claim a total of $116,402.38 for professional fees and disbursements.[26] Hentys Lawyers exhibited a costs agreement with the VAAT that is a conditional costs agreement. The agreement defines a ‘successful outcome’ to mean that the VAAT receive an amount of money after payment of all liabilities, including tax, that it incurs in the matter to the solicitors and any other person including any opposing party.
[26]Affidavit of Robert Joseph Cudlipp sworn 30 July 2015.
As the application to propound the informal document was not a successful outcome for the VAAT as defined in the agreement, this may mean that the VAAT has no liability to pay any amount to Hentys Lawyers for professional fees and disbursements. This issue should be determined before any determination of whether the costs and disbursements of Henty Lawyers are reasonable and proportionate and should be paid by the estate.
The invoices exhibited to the affidavit of Mr Richard Joseph Cudlipp (‘Mr Cudlipp’) do not add up to the claimed amount of $116,402.38. Overall, the documents exhibited to Mr Cudlipp’s affidavit are difficult to understand. Exhibit RJC-2 exhibits ‘Matter Slips Summary’ for the period 15 May 2014 to 28 July 2015 and particularises the time, activities and amounts charged by Hentys Lawyers. The charges are assessed on time recording with Mr Cudlipp charging a relatively high hourly rate of $495 (incl. GST) in accordance with the conditional costs agreement, irrespective of whether the work performed by him required the exercise of legal skill or knowledge. Although the descriptions in the ‘Matter Slips Summary’ are generally inadequate, there are some entries that appear to be clearly inappropriate, for example, there are a number of entries that suggest Hentys Lawyers has charged for drafting its costs agreement and disclosure statement.
Exhibit RJC-3 exhibits ‘Anticipated Payments’ that particularise counsel’s fees and transcript costs of $52,245.05 for the period 13 June 2014 to 12 June 2015. The transcript fees are $205.05 and counsel’s fees are $52,040. It is assumed all fees are inclusive of GST. Mr Cudlipp has not attached any invoices for these charges, making it difficult to understand what work was done by counsel and at what rates but the ‘Matter Slips Summary’ and counsel’s fees suggest that Mr Cudlipp was heavily dependent on counsel. By combining the dates on the ‘Anticipated Payments’ exhibit with the dates on Mr Cudlipp’s ‘Matters Slips Summary’, counsel may have charged as follows:
(a) On 13 June 2014 there is a charge of $4,400 that coincides with Mr Cudlipp’s record of reviewing and considering counsel’s advice;
(b) On 28 October 2014 there is a charge for $2,200 that coincides with Mr Cudlipp’s record of a conference with counsel;
(c) On 7 and 11 November 2014, there are charges totalling $3,520 that coincides with the documents prepared for the appeal proceeding;
(d) On 4 and 22 December 2014, counsel charged $2,200 on each date and on 24 December 2014 counsel charged $880. Mr Cudlipp’s record indicates that within this timeframe, he considered a memorandum from counsel and reviewed counsel’s advice regarding mediation;
(e) On 3 February 2015, counsel charged $11,440 that coincides with Mr Cudlipp’s record of the preparation of the affidavit of Ms Bell to be filed on behalf of the VAAT and discussions regarding the mediation;
(f) On 5 March 2015 counsel charged $500 that coincides with Mr Cudlipp’s record of a discussion with counsel regarding the mediation;
(g) On 10 April 2015 counsel charged $500 that does not coincide with any item on Mr Cudlipp’s record;
(h) On 17 April 2015 counsel charged $10,000. As the mediation was held on 16 April 2015 and there was a short unscheduled court appearance on 17 April 2015, this fee may be for these items;
(i) On 24 April 2015 counsel charged $10,000. As the trial was held on 20 April 2015, this fee may be counsel’s appearance at trial;
(j) On 3 June 2015 counsel charged $1,500 that coincides with Mr Cudlipp’s record of considering a memorandum from counsel; and
(k) On 12 June 2015 counsel charged $500 that coincides with Mr Cudlipp’s record of a discussion with counsel.
On the basis of this analysis, it may be that counsel has charged fees above the rate for junior counsel on the Supreme Court scale, alternatively, expended more time than would be expected in a single issue proceeding. On this basis, those fees could not be considered reasonable or proportionate in the circumstances of this proceeding.
Exhibit RJC-4 to Mr Cudlipp’s affidavit exhibits ‘Combined Matter Ledger’ as at 21 July 2015 and ‘Costs Recoveries’ from 28 May 2014 to 10 June 2015. The Combined Matter Ledger and Costs Recoveries lists document production costs, court filing fees and search fees. The details are in the documents but not totalled to a final sum. The main charge is $3,409.30 for the filing fee for the leave to appeal application. The Costs Recoveries totals $2,638.42 but it is unclear from the document exactly what this document actually records. It is unclear how the other charges in this ledger, mainly for document production, have been calculated although the total of charges in the document entitled ‘Costs Recoveries’ is roughly 4.5% of the professional fees billed in the ‘Matter Slips Summary’. This appears to be for incidentals referred to in the conditional costs agreement, although it is unclear on what basis this figure is calculated. The attraction of charging hourly rates to both law practices and clients is meant to be simple and the rates should take into account all overheads, office expenses and a margin for profit. For Hentys Lawyers to add a fixed rate of 4.5% calculated on professional charges for ‘incidentals’ is not reasonable and has been subject to criticism by the Courts and the regulators.[27]
The parties’ professional fees and disbursements for the mediation and the deed of settlement
[27]See, eg, see Equuscorp Pty Ltd v Wilmoth Field Warne (a firm) (No 4) [2006] VSC 28 (10 February 2006) [53]–[58] (Byrne J); GE Dal Pont, Lawyers’ Professional Responsibility (Lawbook Co, 5th ed, 2013) 470–488 [14.115]–[14.140], [14.185]–[14.230]; Queensland Legal Services Commission, ‘Charging Outlays and Disbursements’ (Regulatory Guide 1, Version 2, 20 May 2013).
As the Court has determined that the deed of settlement should not have been entered into and should not be approved or ratified by the Court upon a grant of probate being made of the June 2012 will, it would not be reasonable to allow any of the professional fees and disbursements of the parties for the mediation and any other work that culminated in the deed of settlement to be paid from the estate.
Whether those costs and disbursements are payable by the plaintiffs personally is not a matter for the Court to consider, other than to reinforce that the estate should not bear any of these costs and disbursements, including those incurred by the plaintiffs.
Conclusions
There are obvious and significant difficulties and issues with the quantum of professional fees and disbursements claimed by Best Hooper, Henderson & Ball and Hentys Lawyers that affect the quantum of the professional fees and disbursements claimed for payment from the estate.
The plaintiffs created additional difficulties given the potential for their own conflicts of interests in Mr Robinson acting as the solicitor in the probate proceeding, the appeal proceeding and the mediation as well as being one of the administrators of the estate.
The plaintiffs, as the administrators and now the executors of the estate, have duties to act in the best interests of the estate and the beneficiaries. Whilst the Court should be able to rely on the plaintiffs as the administrators of the estate to scrutinise and, if necessary, object to the professional fees and disbursements claimed by Best Hooper, Henderson & Ball and Hentys Lawyers, they simply submitted that all of the professional fees and disbursements were reasonable and proportionate.
On the basis of the affidavits filed on behalf of Best Hooper, Henderson & Ball and Hentys Lawyers, the plaintiffs had no basis to conclude that the claimed professional fees and disbursements are reasonable and proportionate to the issues in dispute.
The parties are to provide a proper assessment of their reasonable and proportionate professional fees and disbursements having regard to the matters set out in these reasons.
The VAAT is required to address whether, pursuant to the conditional costs agreement, it has any liability for the professional fees and disbursements claimed by Hentys Lawyers.
I will hear the parties as to appropriate directions to be made for these matters to be done.
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