Ruddy Tomlins and Baxter v Dooley and Dooley Investments Pty Ltd

[2012] QMC 15

MAGISTRATES COURTS OF QUEENSLAND

CITATION:

Ruddy Tomlins & Baxter v Dooley and Dooley Investments Pty Ltd [2012] QMC 15

PARTIES:

RUDDY TOMLINS & BAXTER

(Plaintiff/Respondent)

v

JOHN CHARLES DOOLEY

(First Defendant/Applicant)

and

DOOLEY INVESTMENTS PTY LTD ACN 080 920 323

(Second Defendant/Applicant)

FILE NO/S:

M582 of 2011

DIVISION:

Magistrates Court

PROCEEDING:

Claim - Interlocutory Application

ORIGINATING COURT:

Magistrates Court at Townsville

DELIVERED ON:

26 June 2012

DELIVERED AT:

Townsville

HEARING DATE:

15 June 2012

MAGISTRATE:

Ryan K

ORDER:

1.   Ruddy Tomlins & Baxter deliver an itemised bill with respect to the legal services performed for Dooley within two (2) months;

2.   The proceedings be otherwise stayed to a date which is thirty (30) days from the delivery of such itemised bill

CATCHWORDS:

LEGAL PRACTITIONERS – COSTS – whether bill constitutes ‘itemised bill’

Legal Profession Act (Qld) 2007

Costs Act (Qld) 1867

Re Walsh Halligan Douglas’ Bill of Costs (1990) Qd R 288

Malleson Stewart Stawell and Nankivell v Williams (1930) VLR 410

Stevens v Keogh [1996] VicSC 578 (3 December 1996) unreported

Turner v Mitchells Solicitors [2011] QDC 61

COUNSEL:

V Keegan for the Respondent/Plaintiff

A Hockings for the Applicants/Defendants

SOLICITORS:

Crosby Brosnan and Creen for the Respondent/Plaintiff

Williams Graham and Carman for the Applicants/Defendants

Background

1. The legal firm, Ruddy Tomlins & Baxter were engaged by Mr Dooley on behalf of Dooley Investments Pty Ltd to undertake legal work from 11 December 2009.

1. On 25 March 2011, Ruddy Tomlins & Baxter rendered an account for services performed, which account remained unpaid resulting in Ruddy Tomlins & Baxter commencing legal proceedings in this court to recover the amount owing. Such proceedings commenced on 14 November 2011. A Notice of Intention to Defend and Defence was filed, in the proceedings on 16 December 2011, a Reply was filed on 2 February 2012 and an Amended Reply filed on 7 February 2012.

1. Mr Dooley and Dooley Investments Pty Ltd (“Dooley”) have applied to the court for an interlocutory order that Ruddy Tomlins & Baxter deliver an itemised bill as defined in s 300 of the Legal Profession Act 2007 and that the proceedings for recovery of legal fees be stayed.

1. Ruddy Tomlins & Baxter resist the application arguing that Dooley is attempting to delay or be excused from paying the account. They argue that the only reason Dooley is seeking the order for an itemised account is so that Dooley can apply for a cost assessment pursuant to s 335 of the Legal Profession Act 2007, an application which they say is barred because of effluxion of time.

1. It would appear from correspondence which has been exhibited to affidavits filed on behalf of all parties that Dooley withdrew instructions from Ruddy Tomlins & Baxter in about February or March 2011, shortly before the account in question was rendered. The costs agreement was allegedly entered into on 25 March 2010 and was to include all work completed by Ruddy Tomlins & Baxter on behalf of Dooley from 11 December 2009.

1. Whilst it is not contained in any affidavit material before me, it would appear from the pleadings filed in the current proceedings in this court, that Dooley contests the existence of any costs agreement between the parties at all and further alleges that Ruddy Tomlins & Baxter failed to disclose the basis upon which legal costs were to be calculated (pursuant to s 308 of the Legal Profession Act 2007) and also failed to provide an estimate of the total legal fees that Dooley could reasonably anticipate paying for the work undertaken. It is alleged in the Defence that a consequence of this failure to disclose is that Dooley is not required to pay any legal costs until such costs have been assessed under Division 7 of the Legal Profession Act 2007.[1]

   [1] S 316 Legal Profession Act 2007

1. The Defence goes on to allege that the account rendered by Ruddy Tomlins & Baxter is not rendered in accordance with the Legal Profession Act 2007 as being an itemised account as it fails to provide sufficient particularity of the work undertaken on the basis of the costs charged[2]. It is further alleged that until an itemised bill of costs is delivered, Ruddy Tomlins & Baxter are precluded from recovering on any account until a properly itemised bill of costs is rendered. Dooley expressly states that the plea for an itemised account is made without prejudice to each and every matter raised with regard to the other allegations contained in the Defence.

   [2] Para 6, Defence of the First and Second Defendants filed 16 December 2011

1. Ruddy Tomlins & Baxter’s Reply and Amended Reply put all allegations contained in the Defence in question.

1. As stated previously, there is nothing in the affidavit material to show when instructions were withdrawn from Ruddy Tomlins & Baxter, although the contents of Mr Dooley’s letter to them of 26 March 2011 clearly indicates that there had been some discussion as to the amount of and payment of any fees outstanding.

1. From the material before me, it would appear that the subject account dated 2 March 2011 (which is Exhibit 1 to the Affidavit of Gregory Clive Parr sworn 21 May 2012) was sent to Dooley by pre-paid ordinary post on 24 March 2011 and by email on 25 March 2011. John Dooley responded by letter dated 26 March 2011 advising he would take time to review the bill, but that his preliminary advice (was) that the bill is not in itemised form in accordance with the decided cases and that you have not delivered an itemised bill within a period of 30 days from the date that bill was requested or alternatively, from the date that you said the bill would be provided.

1. There then followed a letter dated 12 April 2011 from Dooley’s new solicitors to Ruddy Tomlins & Baxter stating –

   Assuming that you are entitled to deliver a bill in accordance with the fees set out in the costs agreement, we note that our client has requested that you deliver an itemised account.
   The bills that you have delivered are not itemised and we refer you to the decision of Clayton Utz Lawyers –v- P & W Enterprises Pty Ltd which deals with the requirements of the legislation …

1. The letter goes on to request delivery of a properly itemised account in accordance with the legislation and the appropriate decisions. The letter further reserves Dooley’s rights in respect of the matter generally and advising that if Ruddy Tomlins & Baxter attempted to take any recovery proceedings against our client… then our client will immediately seek a stay of those proceedings unless and until you deliver a properly itemised account.

1. There follows correspondence from Ruddy Tomlins & Baxter to Dooley’s solicitors on 29 April 2011 advising that the account rendered was, in their view, an itemised account pursuant to the quoted legal decisions and that they had complied with Dooley’s request for an itemised account on 25 March 2011 and that if the full amount was not paid within seven (7) days, they would institute proceedings.

1. In the event, the amount was not paid and the legal proceedings to recover the amount of the account were not commenced until 14 November 2011. Neither had Dooley taken any steps to make application for an order for an itemised account and/or an assessment pursuant to the Legal Profession Act 2007.

The Legislation

1. The regulation of the making of costs agreements relating to legal services, together with (inter alia) billing of costs for legal services and assessment of legal costs are governed by Part 3.4 of Division 7 of the Legal Profession Act 2007.

1. Relevant to the argument before me are the following sections –

S329         Legal costs can not be recovered unless bill has been served

(1)A law practice must not start legal proceedings to recover legal costs from a person until at least 30 days after the law practice has given a bill to the person under sections 330 and 331 or under provisions of a corresponding law that correspond to sections 330 and 331.

……

(3)A court of competent jurisdiction before which any proceedings are brought in contravention of subsection (1) must stay those proceedings on the application of a party or on its own initiative.

(4)This section applies whether or not the legal costs are the subject of a costs agreement.

1. Sections 330 and 331 relevantly provide that a bill may be in the form of a lump sum bill or an itemised bill, and set out the procedure for delivery of a bill and for the provision of notices relating to disputes.

S332         Request for itemised bill

(1)If a bill is given by a law practice in the form of a lump sum bill, any person who is entitled to apply for an assessment of the legal costs to which the bill relates may request the law practice to give the person an itemised bill.

(2)The law practice must comply with the request within 28 days after the date on which the request is made.

……

(4)Subject to subsection (5), a law practice must not commence legal proceedings to recover legal costs from a person who has been given a lump sum bill until at least 30 days after the date on which the person is given the bill.

(5)If the person makes a request for an itemised bill within 30 days after receiving the lump sum bill, the law practice must not commence proceedings to recover the legal costs from the person until 30 days after complying with the request.

S335         Application by clients….for costs assessment

(1)A client may apply for an assessment of the whole or any part of legal costs.

……    

(5)A costs application by a client…must be made within 12 months after-

(a)     the bill was given, or the request for payment was made, to the client…

……

(6)However, a costs application made out of time … may be dealt with by a costs assessor or a court if, under the Uniform Civil Procedure Rules, the assessor or the court decides to deal with it after considering the reasons for delay…

1. Pursuant to s 300 of the Legal Profession Act 2007, an itemised bill means a bill stating, in detail, how the legal costs are made up in a way that would allow the legal costs to be assessed under Division 7.

Discussion

1. I have given consideration to the decision of Reid DCJ in Clayton Utz Lawyers v P & W Enterprises Pty Ltd[3] to which I have been referred by Mr Hockings on behalf of Dooley as to what is sufficient to constitute a bill of costs within the meaning of the Legal Profession Act 2007. His Honour referred to previous decisions which decided the question within the meaning of the repealed Costs Act 1867. I will not reiterate these here. Needless to say that the decided principle was 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 him effectively as to whether taxation is desirable or not.[4]

[3] [2011] QDC 5

[4] Per Dowsett J in Re Walsh Halligan Douglas’ Bill of Costs (1990) Qd R 288 at p 294, citing Mann J in Malleson Stewart Stawell and Nankivell v Williams (1930) VLR 410

1. Ms Keegan, on behalf of Ruddy Tomlins & Baxter, has argued that the account in question does constitute an itemised bill pursuant to the legislation. She takes this point no further, arguing that as Dooley are not persons who are entitled to apply for an assessment of the legal costs given that the application was not made within the 12 month prescribed period…they are not able to request an itemised bill[5]. She refers me to the decision of Applegarth J in Tabtill No 2 Pty Ltd & Ors v DLA Phillips Fox (a Firm) & Anor[6] for this contention.

   [5] Para 9, Outline of Submissions of Respondent dated 15 June 2012

   [6] [2012] QSC 115

1. It appears to me that first, I am required to decide whether the account rendered constitutes an itemised bill as defined pursuant to the legislation and the case law. Second, if it is the case that the account is not an itemised bill, then I am required to decide whether Dooley has an entitlement to request an itemised bill in these particular circumstances.

1. For the account to be an itemised bill pursuant to s 300 of the Legal Profession Act 2007, I must be satisfied that the account states in detail, how the legal costs are made up in a way that would allow the legal costs to be assessed under division 7.

1. I have had regard to the account dated 2 March 2011 and note that whilst some of the entries on the account contain sufficient detail to enable a litigation solicitor to properly advise his/her client whether an assessment of the account is required, there are a number of other entries which do not.

1. For example, I point to the following –

1.An entry on 07/01/2010 states Attending with you receiving instructions. This entry claims 28 units and an amount of $1,078.00.

2.An entry on 16/02/2010 states Conference with Andrew Lyons of Counsel. This entry claims 7.50 units and an amount of $288.75.

3.An entry on 17/03/2010 states Perusing draft Tenancy Agreement, email to you in response to earlier email and providing advices regarding various matters, further email to you regarding original Tenancy Agreement, perusing licence Agreement and Financial data, telephone call to Collins and Eales. The entry claims 13 units at a cost of $500.50.

4.There is a further entry on 19/03/2010 stating Conference with Andrew Lyons (1.5 hrs) claiming 15 units of time at a cost of $577.50.

1. It is my view that there is insufficient information contained in the description to inform Dooley, or their legal advisers, as to sufficient detail to make an informed decision as to whether to require an assessment of the costs involved. For instance, what was the subject matter of the instructions received on 7 January 2010, what was discussed with Counsel on 16 February 2010 and what were the various matters discussed with Dooley on 17 March 2010 and were the subject of further conference with Counsel on 19 March 2010? There are many more entries such as these which I will not enumerate here.

1. In my view, further detail is necessary for the account to be an itemised bill which is capable of being assessed under division 7 of the Legal Profession Act 2007. I therefore find that the account dated 2 March 2011 is not an itemised bill.

1. This being so, I now need to decide whether Dooley has an entitlement to request an itemised bill in circumstances where an application for an assessment of the bill has not been made pursuant to s 335 of the Legal Profession Act 2007.

1. In Tabtill No 2 Pty Ltd & Ors v DLA Phillips Fox (a firm) & Anor[7], His Honour Justice Applegarth states at [45] –

   If it be assumed for the purposes of argument that itemised bills have not been given to the applicants, then the entitlement under s 332(1) to request an itemised bill depends upon the existence of an entitlement “to apply for an assessment of the legal costs to which the bill relates”. That, in turn, directs attention to the entitlement to apply for an assessment under s 335, and the time limit contained in s 335(5).

   [7] [2012] QSC 115

1. In Tabtill[8] the application was for an assessment of costs contained in interim as well as final accounts. The respondents in that case opposed an order for assessment in respect of a large number of bills rendered on the basis that the application was made outside of the time provided for in s 335(5), being 12 months after the bill was given or the request for payment was made. The respondents in that case did not ask the Court to deal with the application pursuant to s 335(6), which would have required the Court to consider the reason for the delay, they simply contended that the application was made within time.

   [8] Ibid.

1. Here, however, as Mr Hockings (for Dooley) points out, we do not have an application for assessment, but for an order that Ruddy Tomlins & Baxter provide an itemised bill.

1. S 335 clearly refers to an assessment of… legal costs (my emphasis) with the time restriction contained in sub-paragraph 5 being 12 months after… the bill was given or the request for payment was made. But which bill does the legislation contemplate – the original bill whether it is a lump sum or itemised bill, or an itemised bill as contemplated by the legislation?

1. There appears to be no enlightenment in the definitions contained in the legislation, so I have reverted to the case law in the area. As contemplated in Re Walsh Halligan Douglas’ Bill of Costs[9], taxation of costs can only be undertaken if a “bill in taxable form” (as it was then referred to) had been provided[10]. Justice Dowsett (as he then was) stated –

   The bill must sufficiently particularise the charges to enable the client to take informed advice as to whether he should demand taxation. If the bill purportedly delivered pursuant to s 22 fills this description, then time will run against the client. If there is no bill within this description, then the client may at any time, and notwithstanding payment, insist upon delivery of a bill in taxable form.[11]

   [9] (1990) Qd R 288

   [10] Also see Stevens v Keogh [1996] VicSC 578, 3 December 1996 unreported

   [11] Re Walsh Halligan Douglas’ Bills of Costs [1990] Qd R 288 at page 294

1. I am therefore satisfied that the bill referred to in s 335 must be an itemised bill and that the 12 month restriction on making an application for assessment of legal costs starts to run on the delivery of an itemised bill. As I have found that an itemised bill has not yet been delivered in this case, logically, the 12 month restriction on making the application for assessment has not begun and I am not required to consider reasons for the delay in making such an application.

1. If I were required to consider reasons for delay pursuant to s 335(6), I note there is no material before me providing any explanation for the delay, other than Mr Hockings’ verbal submission that Dooley had not received an itemised bill as requested to enable them to consider whether an assessment is necessary. In those circumstances, and applying the decision of McGill J in Turner v Mitchells Solicitors [2011] QDC 61, any such application would not succeed.

1. I am conscious of the time delays in the proceedings before the court and I have had regard to Rule 5 of the Uniform Civil Procedure Rules which sets out the philosophy of the Rules and the overriding obligations of the parties and the court.

1. In this case, neither party has applied for assessment of the legal costs, something which Ruddy Tomlins and Baxter could have done within 30 days of the rendering of the account. There was a delay of some seven (7) months before Ruddy Tomlins & Baxter commenced proceedings to recover their legal fees. It was then another seven (7) months before the present application was brought by Dooley, even though such action was mooted in correspondence between the parties as long ago as April 2011. It is only hoped that this matter will now proceed expeditiously, otherwise the parties, or one of them, may be the subject of imposed Court sanctions pursuant to the Uniform Civil Procedure Rules.

Orders

1. For the reasons given above I make the following orders –

1.Ruddy Tomlins & Baxter deliver an itemised bill with respect to the legal services performed for Dooley within two (2) months;

2.The proceedings be otherwise stayed to a date which is thirty (30) days from the delivery of such itemised bill.