Sainuddin v Brady Flinders Pty Ltd

[2014] VCC 1638

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted

AT MELBOURNE

COMMERCIAL LIST

GENERAL CASES DIVISION

Case No. CI-10-00976

NANCY SAINUDDIN	Plaintiff
v.
BRADY FLINDERS PTY LTD & ANOR	Defendants

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	25 September 2014
DATE OF JUDGMENT:	1 October 2014
CASE MAY BE CITED AS:	Sainuddin v. Brady Flinders Pty Ltd & Anor
MEDIUM NEUTRAL CITATION:	[2014] VCC 1638

REASONS FOR JUDGMENT

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Catchwords:              Practice and procedure - Application for payment out of monies ordered to be paid into Court pursuant to a solicitor lien – Solicitor required to give an undertaking to repay the money into Court in certain circumstances.    

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff/Respondent	Ms N. Sainuddin in person
For the Defendants	No appearance
For the Applicant	Mr W. Summons (Solicitor)	Whitehead Summons Pty Ltd

HIS HONOUR:

1The hearing on 25 September 2014 dealt with competing applications for the payment out of $49,198.30 lodged in Court by order of His Honour Judge Ginnane dated 21 June 2012. The monies were the net balance of the judgment obtained at trial by the plaintiff, Ms Sainuddin, in the present proceeding.

2After the judgment was obtained, Whitehead Summons Lawyers (“the solicitor”) successfully applied for an order for the payment into Court of the net proceeds on the basis that, as former solicitors of Ms Sainuddin with costs outstanding, they were entitled to a litigation lien. The monies were to remain in Court until the determination of the question of the solicitor’s entitlement to be paid the costs by Ms Sainuddin.

3Whitehead Summons obtained a judgment in the Magistrates’ Court on 13 February 2014. The order of the Magistrates’ Court is formally recorded as follows:

“Nancy L Sainuddin to pay Whitehead Summons Pty Ltd Claim $37,753.31 and Interest $8,402.30. Costs $0. Stay 30 days. Defendant to pay plaintiff’s costs on Magistrates’ Court Scale “E” for the period of 27/10/2011 until 12/06/2012 hereafter of Scale “G”. To be taxed in default of agreement.”

4The solicitor made application to this Court on 7 May 2014 for the payment out to it of the whole of the monies in Court. Her Honour Judge Lewitan on 22 May 2014 declined to make an order until the solicitors had taxed the costs of the Magistrates’ Court proceeding.

5On 10 September 2014, the Costs Court assessed the solicitor’s costs at $40,000, which was the sum the parties themselves had agreed at the taxation.

6Ms Sainuddin has appealed to the Supreme Court in respect of the order of the Magistrates’ Court on 13 February 2014. She has apparently been ordered to provide security for the respondent solicitor’s costs of the appeal. Ms Sainuddin seeks an order for the payment out to her of part of the money in Court, sufficient for her to meet the order for security, so that she might proceed with her appeal.

7Ms Sainuddin informed the Court that she was pursuing the appeal on two bases:

a.the fact that the Magistrates’ Court order was for the payment of $37,753.31, although the solicitor’s bills totalled only about $35,000;

b.the learned Magistrate had, in his reasons for decision, recorded in a written transcript, indicated that the costs claimed by the solicitor were to be “assessed or taxed”;

c.in the opening paragraph of the reasons for decision, the learned Magistrate stated, “In essence, the claim of the plaintiff is not the matter in dispute. There has been no taxation of the costs as claimed and the court has not been asked or required to make any determination as to quantum”. The balance of the reasons dealt with Mrs Sainuddin’s counterclaim. The reasons concluded, “the counterclaim in this matter will be dismissed and the plaintiff is entitled to recover the costs it sues for as properly assessed or taxed”.

8As regards the amount ordered to be paid for the claim, the solicitor had established its claim by service of a Notice to Admit Facts to which there had not been a response. The total of the costs claimed was $35,008.84. However, when the proceeding was issued in the Magistrates’ Court, the solicitor included in its claim the interest claimable under the Legal Profession Act 2004 (Vic) at the rate of 6.25% per annum to the date of the issue of the complaint.

9During the course of the hearing of the application, I calculated the interest to the date of issue of the complaint and the interest allowed on the judgment pursuant to the Penalty Interest Rate legislation. I am satisfied that the calculations of interest in the complaint and on the judgment were not overstated.

10In relation to any inconsistency between the learned Magistrate’s reasons for decision and the formal order of the Court, there is no clear answer. However, the relevant order to be enforced would generally be the order formally recorded by the Court.

11This order would seem to be appropriate as the facts established by the Notice to Admit included the service of bills of costs in the relevant quantum and the absence of any request for review made by Ms Sainuddin.

12In the circumstances, I considered that it was appropriate to grant the solicitor’s application for the payment out of the monies in Court and to refuse Ms Sainuddin’s application for a part-payment out to meet the security for costs order in relation to her appeal.

13I required the solicitor to give a personal undertaking to repay the monies to the Court, if that were considered appropriate following the hearing and determination of Ms Sainuddin’s appeal of the Magistrates’ Court decision to the Supreme Court.

14I imposed this requirement because Mr Summons, who appeared in support of the solicitor’s application, was unable to inform me of the statutory basis for the time limit of 60 days for seeking a review of a bill of costs that was recorded:

a.in the solicitor’s original disclosure statement;

b.on each of the bill of costs served by the solicitor.

15In these circumstances, I foresaw the possibility that, notwithstanding the order of the Magistrates’ Court for the payment of a nominated amount for the claim and for interest, and now that the costs of that proceeding have been assessed, that the quantification of the solicitor’s costs claimed in the proceeding may ultimately be a matter for assessment by the Costs Court, if the solicitor had incorrectly notified Ms Sainuddin of the time she had to seek a review of the bills of costs.

16Mr Summons informed the Court that the form of the disclosure statement was as published by the Law Institute of Victoria. In those circumstances, it is unlikely to be incorrect. However, as a cautionary measure, I required Mr Summons to give the undertaking, which he was prepared to do.

17The provisions of the Legal Profession Act 2004 which I considered were:

a.sections 3.4.9(1)(j)(i) and (k) which provide that a solicitor’s disclosure statement must contain the “avenues that are open to the client in the event of a dispute in relation to legal costs [including] costs review under Division 7” and any relevant “time limits that apply”;

b.sections 3.4.35(1)(a)(i) and (b) which impose a similar obligation in relation to a bill of costs served on a client;

c.section 3.4.38(5) [in Division 7 of the Act] which provides that “an application by a client…for a costs review under this section must be made within 12 months after…the bill was given…”;

d.section 3.4.41(1)(b) which provides that a “law practice must not commence any proceedings to recover the legal costs until the costs review [commenced under Division 7] has been completed”;

e.section 3.4.44(1)(c) which provides that, “In conducting a review of legal costs, the Costs Court must consider…the fairness and reasonableness of the amount of legal costs in relation to the work…”;

f.section 3.4.44(2)(b) which provides that “In considering what is a fair and reasonable amount of legal costs, the Costs Court may have regard to…any disclosures made by the law practice under Division 3”.

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Certificate

I certify that these 4 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 1 October 2014.

Dated: 1 October 2014

Catherine Kusiak    

Associate to His Honour Judge Anderson