Sarich v Delta Legal Pty Ltd - [2020] WASC 269

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   SARICH -v- DELTA LEGAL PTY LTD [2020] WASC 269
CORAM:   REGISTRAR FATHARLY
HEARD:   ON THE PAPERS
DELIVERED          :   21 JULY 2020
FILE NO/S:   LPA 2 of 2020
BETWEEN:   IVAN JOSIP SARICH
Applicant
AND
DELTA LEGAL PTY LTD
Respondent

Catchwords:

Costs - Solicitor and own client costs - Termination of retainer - Whether concluded agreement by accord and satisfaction for payment of costs in a particular sum upon termination - Affidavit evidence of accord and satisfaction - Striking out

Costs - Solicitor and own client costs - Assessment of interim bills and final bills - Whether application for assessment of some bills out of time - Application within 12 months of interim bill or final bill

Legislation:

Legal Profession Act 2008 (WA), s 271, s 282, s 293, s 295(6)
Rules of the Supreme Court 1971 (WA), O 37 r 6

Result:

No concluded agreement for payment of costs in particular sum
All invoices may be assessed as within time
Application to strike out affidavit successful in part

Category: B

Representation:

Counsel:

Applicant	:	Mr G E Metaxas
Respondent	:	Mr M Strbac

Solicitors:

Applicant	:	Metaxas Legal
Respondent	:	Delta Legal

Case(s) referred to in decision(s):

Challen (t/as Hawthorn Cuppaidge & Badgery) v Golder Associates Pty Ltd [2012] QCA 307
Federal Commissioner of Taxation v Orica Ltd [1998] HCA 33, (1988) 194 CLR 500
Fremantle Lawyers Pty Ltd, Ashley David Wilson, Nicholas Emil Gvozdin and Ante Zorotovic v Ivan Josip Sarich as executor of the estate of Ivan Branimir Saric [2019] WASCA 48
Hakuna Matata Corporation Pty Ltd v McDonald Pynt Lawyers [2012] WASC 513
Homeguard Products (New Zealand) Ltd v Kiwi Packaging Ltd [1981] 2 NZLR 322
McDermott v Black [1940] HCA 4, (1940) 63 CLR 161
McDonald Pynt Lawyers v Hakuna Matata Corporation Pty Ltd [2013] WASC 223
McGready v Lavan Legal [2014] WASC 124
Sarich v Sarich [2017] WASC 222
Scaffidi (by her next friend Public Trustee) v Perpetual Trustees Victoria Ltd [2011] WASCA 159
Turner v Mitchells Solicitors [2011] QDC 61

REGISTRAR FATHARLY:

Application for costs assessment

On 20 January 2020 the applicant applied for an assessment of costs under the Legal Profession Act 2008 (WA) (LPA) in relation to 38 invoices dated between 2 February 2017 and 24 May 2019 for the provision of legal services by the respondent law practice to the applicant as the client of the firm.
There are three filed affidavits relating to the assessment from which the evidence relevant to this decision is drawn:
(a)affidavit of service of Gregory Emerson Metaxas sworn and filed 31 January 2020 on behalf of the applicant which relates only to service of documents;
(b)affidavit of the applicant Ivan Josip Sarich sworn and filed 6 March 2020; and
(c)affidavit of Mario Strbac sworn and filed 9 March 2020 on behalf of the respondent.
There are three issues the subject of this determination on the papers arising from the applicant which need to be determined, being:
(a)whether there is a concluded agreement for payment of costs in a particular sum such that it is said that there is no need for assessment, or otherwise;
(b)whether, and on what basis, the costs the subject of the invoices prior to 20 January 2019 should be the subject of assessment; and
(c)whether Mr Strbac's affidavit in relation to the first two issues should be uplifted and removed from the court record or struck out in part.
For the reasons set out below, I find that:
(a)There was no concluded agreement for payment of costs in a particular sum such that there is no need for assessment.
(b)All of the invoices rendered by the respondent to the applicant may be the subject of assessment, the bills in question being interim bills but for the final bill on each file, issued 24 May 2019. In accordance with s 293 and s 295(6) of the LPA, all of the legal costs may be assessed now as part of the application for assessment filed within 12 months of the final bills.
(c)Mr Strbac's affidavit should not be uplifted and removed from the court record but the parts identified below should be struck out.

Basis for legal costs and scope of legal services

A written costs agreement may be made between a law practice and client under s 282 of the LPA. If there was no written costs agreement, legal costs would be recoverable under the applicable costs determination, or, if there were no such applicable determination, then according to the fair and reasonable value of the legal services provided[1].
[1] Legal Profession Act 2008 (WA), s 271.
It is not in issue that there was a written costs agreement signed by the parties, dated 31 January 2017, a copy of which is filed upon affidavit. The hourly rates stated as being chargeable under the costs agreement relied upon are the hourly and daily rates applicable under the Legal Profession (Supreme Court) (Contentious Business) Report 2016.
The applicant states that he had engaged the respondent to act for him in:
(a)a claim commenced by the applicant's brother under the Family Provision Act 1972, being Supreme Court CIV 1995 of 2016;
(b)an application for directions regarding the proper construction of the applicant's father's will in CIV 1589 of 2017, in which the will was declared void on 27 July 2017, the subject of the decision in Sarich v Sarich;[2] and
(c)the appeal from the decision in Sarich v Sarich.[3]
[2] Sarich v Sarich [2017] WASC 222.
[3] Fremantle Lawyers Pty Ltd, Ashley David Wilson, Nicholas Emil Gvozdin and Ante Zorotovic v Ivan Josip Sarich as executor of the estate of Ivan Branimir Saric [2019] WASCA 48.
Mr Strbac states that the matters in which the respondent was instructed to act under their retainer also related to a possible negligence claim against the drafter of the will and any other advice relating to, or arising from, those claims such as consideration of the effect of the Planning & Development Act 2005 (WA) provisions. To the extent that any difference exists in the scope of the retainer, it is not necessary to determine it for the purpose of this decision.
It is not in dispute that the applicant terminated the retainer by email to the respondent on 22 May 2019. In that email the applicant requested the respondent send him a final settlement account and transfer the file to Metaxas Legal.
The respondent submits that by the applicant accepting and banking a cheque, there was a full and final settlement between the parties and the right to further action was extinguished. For the reasons set out below, I do not accept that submission.

Should the affidavit of Mario Strbac sworn 9 March 2020 be uplifted or struck out in part?

Arising from a directions hearing, on 10 February 2020 I directed that each party file and serve submissions and any necessary supporting documents, redacted so as to obscure any monetary amounts shown, addressing the first two issues so that they could be determined on the papers. The applicant objected to the content of Mr Strbac's affidavit filed for that purpose, giving rise to the third issue, namely, whether it should be uplifted and removed from the court record or struck out in part.
Following further directions made on 19 May 2020, the applicant filed a schedule on 25 May 2020, setting out the objections to the affidavit. The respondent filed a reply on 3 June 2020.
Mr Strbac's affidavit was filed as a 'necessary supporting document' as to whether there was a concluded agreement for payment of costs in a particular sum such that it is said that there is no need for assessment, or otherwise (the Purpose), pursuant to the orders of 10 February 2020.
Given that it is not common for detailed affidavits and submissions to be filed for costs assessments pursuant to the LPA, it is even less common, and not desirable, to have an interlocutory dispute regarding whether paragraph of the affidavit should be struck out.
The applicant proposes orders that Mr Strbac's affidavit be uplifted from the court file, alternatively that paragraph 6 ‑ 17, 19, 21, 23, 24, 25 and 28 ‑ 30 be struck out.
Paragraphs 6 - 17, 21, 24, 28 and 30 are said not to be relevant.
Paragraphs 19 and 25 are said to be conclusions without the actual words used and the material facts respectively.
Paragraph 21 is said to relate to matters postdating the alleged agreement. Paragraphs 21 and 23 are said to be submissions.
Paragraph 29 is said to be opinion.
The objections are as to content not form. In that regard, the provisions of O 37 r 6(1) and (2) of the Rules of the Supreme Court 1971 (WA) are relevant. An affidavit must be confined to such facts as the deponent is able of his or her own knowledge to prove. It may contain statements of information and belief in this case as the affidavit is made for the purposes of interlocutory proceedings. In making a statement of information or belief, the source or grounds of that information must be provided unless one of the exceptions in O 37 r 6(3A) applies. Further, by O 37 r 6(3), the costs of an affidavit which unnecessarily sets forth matters of hearsay, argumentative matter or copies of or extracts of documents, shall be paid by the party filing the affidavit.
In relation to the paragraph objected to:
(a)Paragraph 6: The only issue is relevance to the Purpose. The paragraph is within the knowledge of Mr Strbac. It goes to the background and potential prejudice of any extension of time. To the extent that it briefly explains why the solicitor having conduct of the file has not filed the relevant affidavit, it bears some relevance. I do not consider it necessary or appropriate to strike it out. It does not, in any event, impact my decision regarding whether there was a concluded agreement or the basis for assessment of costs prior to 20 January 2019.
(b)Paragraph 7: The paragraph refers to and attaches the costs agreement. It is directly relevant to the Purpose. It is not objectionable and should not be struck out. If I am wrong in that regard, paragraph 3 - 5 of the applicant's affidavit sworn 6 March 2020 refer to the scope of the retainer and attachment IJS-1 is the costs agreement.
(c)Paragraph 8: The paragraph refers to the applicant being university educated, his senior employment role and not being new to litigation. That may have a bearing in circumstances where there is an application to extend time and there is a weighing up of factors for the extension of time: see for example McGready v Lavan Legal.[4] It is not directly relevant to the Purpose but may be said to go to whether the applicant knew and understood his contractual and statutory rights and obligations, the communications between the parties and whether there was an accord and satisfaction as alleged by the respondent. In that context, it should not be struck out for not being relevant. However, Mr Strbac has not complied with O 37 r 6(3A) by failing to state the basis for that belief. Accordingly, the paragraph should be struck out.
(d)Paragraphs 9 - 17: While paragraph 9 in isolation is not grammatically well constructed, commencing 'The matters included …' before listing the legal work said to have been required to be undertaken, the reference to 'the matters' appears to be a reference to 'matters relating to the grant of probate of the Will' in paragraph 7. That understanding is supported by paragraph 10 – 17, which set out work that is said to have been undertaken. Those matters broadly arose out of the drafting of the will, the proper construction of the will, a Family Provision Act 1972 (WA) claim and related advice. While each paragraph is not directly tied to the Purpose, those matters set out the scope of the work said to have been undertaken and are relevant to why there were two files for the applicant and scope of the work undertaken relevant to the assessment. Despite seeking to strike out those paragraphs , the applicant has stated in paragraph 3 and 5 of his affidavit a shorter form summary of the scope of the matters for which the respondent was retained to act for him. The applicant therefore considers such information to be relevant. To the extent that my decision regarding the other issues relies upon affidavit evidence, the full scope of the work undertaken and the manner in which it is stated in paragraphs 9 ‑ 17 does not impact whether there was an accord and satisfaction, or which invoices should be assessed. Whether certain work was undertaken or charged for beyond the scope of the retainer is a matter for the assessment. I would not strike out paragraphs 9 ‑ 17.
(e)Paragraph 19: The objection to this paragraph is based upon it being a conclusion without setting out the words alleged to have been said. The first two sentences are not a conclusion. The third and fourth sentences are. The third and fourth sentences should be struck out.
(f)Paragraph 21: Despite the objections to paragraph 21, it sets out matters relevant to the alleged accord and satisfaction. The matters are not a submission but words alleged to have been said and the nature of what was said where not the actual words. I do not consider that they should be struck out.
(g)Paragraph 23: This paragraph is a submission and should be struck out.
(h)Paragraph 24: The paragraph and attachment MS‑9 are not relevant to the Purpose and should be struck out. If I am incorrect in that regard, the reference to 'settlement' in the paragraph and attachment takes the matter no further than the statement regarding outstanding invoices in paragraph 21, which have not been struck out.
(i)Paragraph 25: The objection is on the basis that the statement is a conclusion devoid of material facts. I do not strike it out as a conclusion; it is within the knowledge of Mr Strbac. However, the lack of material facts and the relationship to the alleged accord and satisfaction make the paragraph of limited weight even if relevant.
(j)Paragraph 28: To the extent that Mr Strbac states that the applicant was receiving monthly detailed invoices (cover letter, invoice, schedule A - list of billable units with description, schedule B - reimbursable costs) and Trust Account statements, and the document being attachment MS‑10 as true copies of an invoice i1570 dated 2 February 2017, those are relevant to explain the billing, disclosures provided and nature of information regularly received by the applicant. To that extent the paragraph should not be struck out. The words 'and had ample opportunities to raise any issues regarding the billing including the amount or reasonableness of any invoice but had never done so' are irrelevant and should be struck out. This is not an application for an extension of time.
(k)Paragraph 29: Mr Strbac states being 'at a loss as to why the applicant, if he had any concerns, had never brought up the issue of cost especially in a first year where the most cost occurred.' The statement is irrelevant to the Purpose, has the effect of a submission, and should be struck out. It does not go to the issue of any accord or satisfaction or which of the invoices should be assessed.
(l)Paragraph 30: To the extent that paragraph 30 repeats paragraph 8, it should be struck out for the reasons relating to paragraph 8. The paragraph also refers to the applicant having obtained legal advice from the time of termination of the retainer to the time of cashing the cheque from his current lawyers. The basis for Mr Strbac having the knowledge in that last sentence is not stated and that sentence should also be struck out as being non‑compliant with O 37 r 6(3A). Again, having obtained legal advice at the time may have a bearing in circumstances where there is an application to extend time and there is a weighing up of factors for the extension of time, see for example McGready v Lavan Legal,[5] but there is no application to extend time before me.
[4] McGready v Lavan Legal [2014] WASC 124 .
[5] McGready v Lavan Legal [2014] WASC 124 [10] (Sanderson M).
Accordingly, the following should be struck out:
(a)the whole of paragraph 8, 23, 24 and attachment MS-9, 29, 30;
(b)the third and fourth sentences of paragraph 19; and
(c)the words in paragraph 28 'and had ample opportunities to raise any issues regarding the billing including the amount or reasonableness of any invoice but had never done so'.
While those paragraph should be struck out, the whole of the affidavit should not be uplifted and removed from the court file. For the purpose of the determining the remaining issues I disregard those parts of the affidavit struck out.
While certain other paragraphs are not be struck out, their relevance to the Purpose and the weight to be attributed to them is a matter I have taken into consideration in relation to the reasons for the remainder of the decision.

Circumstances of finalisation of the retainer and alleged accord and satisfaction

The circumstances relating to the finalisation of the retainer and alleged accord and satisfaction extracted from the applicant's and respondent's affidavits are as follows:
(a)The applicant terminated the retainer by email dated 22 May 2019 requesting a file transfer and a final settlement statement, being attachment IJS-2 to the applicant's affidavit and MS-3 to Mr Strbac's affidavit;
(b)An email dated 23 May 2019, being attachment IJS-3 to the applicant's affidavit, from Dr Craig Edwards, solicitor of the respondent, to the applicant stated:
I understand that Mario [Strbac] will be sending the final invoice today. We are preparing your file for collection. It will be available pending settlement of your final invoice, from 3pm tomorrow.
(c)A file note made by Mr Strbac of 24 May 2019, which is partly redacted and difficult to read, refers to what appears to record that the applicant was 'told there will be no review of the account and not charge [sic] for some unpaid invoices [redacted] will be paid (returned) to [unclear] in full and final settlement client agreed, said no problems'. That note is attachment MS-4 referred to in paragraph 19. While the third and fourth sentences of paragraph 19 have been struck out the attachment remains part of the affidavit.
(d)Mr Strbac's email of 24 May 2019 at 12.30 pm to the applicant, being attachment IJS-4 to the applicant's affidavit and part of attachment MS-5 to Mr Strbac's affidavit, states:
Good morning Mr Sarich
We refer to our [sic] email dated 22 May 2019 terminating our services and requesting final settlement account and request for transferring your file to Metaxas Legal. We are in the process of organising the transfer with your new legal representatives.
Attach [sic] our invoices i2017 & i2018 together with your Trust Account Statements.
Please note there is [redacted] to be refunded to the Estate.
If you have any question please do not hesitate to call us.
Could you please advise whether you accept cheque or direct transfer to the Estate's bank account in full and final settlement and if so, could you please provide us with the Estate's bank account details.
We thank you on your business and wish you and your family all the best in the future.
…
(e)The invoices i2017 and i2018 sent under cover of a letter signed by Mr Strbac, being part of attachment IJS-4, show in relation to each of two files the charges for fees and disbursements, the total outstanding, the trust balance held, and the refund payable to the applicant after deduction of the outstanding amount to return remaining trust funds held.
(f)The applicant's response of 24 May 2019 at 4.29 pm, being part of attachment IJS-5 to the applicant's affidavit and part of attachment MS-5 to Mr Strbac's affidavit, simply states:
Hi Mario
Cheque is best.
I can collect next week from your office.
Please let me know.
Thank you
(g)The respondent states that he met with the applicant at a coffee shop on 29 May 2019 for about 30 minutes. He states that he advised the applicant again that there had been some billable units that were not recorded and some billable units recorded at a lower rate. He states he told the applicant that the respondent would not require any payments for outstanding invoices because of the full and final settlement, and the applicant was told that the respondent would have the right to review the file and bill for any work done but not recorded. Mr Strbac states that the applicant said he did not want to burn any bridges, took the cheque and walked away.
(h)Mr Strbac says he made a file note of the meeting on 29 May 2019, which is attachment MS-6 to his affidavit. While very brief, it refers to handing the applicant 'cheque 220 [amount redacted] in full & final settlement'.
(i)A copy of the cheque was attached to Mr Strbac's affidavit as attachment MS-7, being a cheque drawn on Delta Legal Law Practice Trust Account.
(j)A bank transaction history being attachment MS-8 to Mr Strbac's affidavit records that the cheque was presented 30 May 2019.

There is no evidence that the applicant had previously raised any concern about the invoices rendered to him, which he had paid in full, that he was intending to apply or considering applying for an assessment of costs, or to take any legal proceedings against the respondent at the time the retainer was terminated.
The cheque provided to the applicant was the balance of monies held in trust after final invoices were rendered and paid from funds held.

Submissions as to whether there was concluded agreement for payment of costs in a particular sum such that it is said there is no need for an assessment

The respondent law firm submits that:
(a)there was accord and satisfaction between the applicant and respondent giving rise to an issue estoppel serving as a res judicata where the original dispute is quelled by contractual agreement, namely a settlement, rather than by judicial determination;
(b)email correspondence and communications of 22, 23 and 24 May 2019 between the applicant on the one hand and Dr Craig Edwards and Mr Mario Strbac of the respondent (the Communications) on the other, constitute the accord and satisfaction relating to the costs of provision of legal services by the respondent to the applicant;
(c)the applicant:
(i)is highly educated, in a senior employment role and not new to litigation;
(ii)had the benefit of legal advice in reaching that accord;
(iii)paid each invoice without challenge until the application for assessment of costs;
(iv)is estopped from now denying the accord and satisfaction; and
(d)the application for assessment of costs should be rejected with costs in favour of the respondent.
Of course, having struck out paragraphs 8 and 30 of Mr Strbac's affidavit, there is no evidence of his education, employment role and litigation experience other than in relation to the matters for which the respondent acted for him, and there is no evidence of the applicant having the benefit of legal advice in reaching that accord. While the applicant's current solicitors were to receive the files from the respondent, that of itself does not mean they provided advice to the applicant regarding costs issues with the respondent at the time or with respect to the alleged accord.
The respondent submits that there was an accord and satisfaction and for that proposition relies on the following:
(a)On 22 May 2019 the applicant emailed the respondent terminating the retainer and asking for a final settlement of account.
(b)The applicant had been sent monthly invoices up to and including a final invoice of May 2019 and the respondent advised the applicant that he would not be charged for the previous outstanding amounts on some unpaid invoices and was promised not to be charged for the work undertaken and not yet billed.
(c)The offer for full and final settlement was clear and not open to any ambiguity.
(d)The applicant was fully aware that he was not charged for the previous unpaid invoices and a review would not be conducted for work undertaken and not yet billed, instances when a lower rate was charged by mistake rather than the appropriate rate for a senior solicitor, and instances where the work was simply not billed by omission.
(e)The essence of the accord and satisfaction was the acceptance by the plaintiff of something in place of his cause of action, with a discharge which extinguished that cause of action.
(f)The role of the accord was to replace the former contract, being the retainer, with a new contract to settle the issues on a full and final basis including the taxation of costs.
(g)By accepting, then banking, a cheque for the balance of funds held by the respondent in trust, after deduction of the final invoiced expenses, the applicant agreed to something in place of the full remedy to which the applicant is entitled and this constituted accord and satisfaction.
By way of summary, the applicant former client submits:
(a)the Communications do not constitute an accord and satisfaction relating to the costs of provision of legal services by the respondent to the applicant;
(b)all of the invoices issued by the respondent to the applicant were interim invoices issued to the applicant pursuant to the costs agreement, but for the last one which was a final invoice issued on 24 May 2019, two days after the termination of the retainer.

Was there a concluded agreement for payment of costs in a particular sum such that it is said there is no need for an assessment?

I do not accept the respondent's submission that there was an accord and satisfaction.
The respondent relied in its submissions upon the decisions of McDermott v Black,[6] Homeguard Products (New Zealand) Ltd v Kiwi Packaging Ltd,[7] and Federal Commissioner of Taxation v Orica Ltd.[8] None of those decisions related to the issue of costs.
[6] McDermott v Black [1940] HCA 4, (1940) 63 CLR 161, 183 (Dixon J).
[7] Homeguard Products (New Zealand) Ltd v Kiwi Packaging Ltd [1981] 2 NZLR 322.
[8] Federal Commissioner of Taxation v Orica Ltd [1998] HCA 33, (1988) 194 CLR 500 per Gummow J [116] citing McDermott v Black (183 ‑ 185).
The legal principles relating to accord and satisfaction stated by the High Court of Australia are conveniently summarised by the Court of Appeal in Scaffidi (by her next friend Public Trustee) v Perpetual Trustees Victoria Ltd.[9] Simplifying the detailed statements of principle for the purpose of this decision, those principles are as follows. Without a deed under seal, the release of an obligation can be brought about for valuable consideration if it amounted to an accord and satisfaction. The accord and satisfaction requires something in place of the full remedy to which the recipient is entitled, coupled with the provision of consideration agreed upon which discharges and extinguishes the obligation. Equity would enforce an agreement for value to release an obligation, operating as a release and discharge. The essence of accord and satisfaction is the acceptance by the plaintiff of something in place of his cause of action. What he takes is a matter depending on his own consent or agreement.
[9] Scaffidi (by her next friend Public Trustee) v Perpetual Trustees Victoria Ltd [2011] WASCA 159 from [14].
The decision of McDermott v Black related to a dispute regarding misleading and deceptive conduct in the context of issuing shares with allegations made, litigation and an agreement not to sue upon particular allegations.
As stated by Gummow J in Federal Commissioner of Taxation v Orica Ltd,[10] 'the matter was explained by Dixon J in McDermott v Black in terms which indicate that the essence of accord and satisfaction 'is the acceptance by the plaintiff of something in place of his cause of action', that the accord is the agreement or consent to accept the satisfaction and that, upon provision of the satisfaction, there is a discharge which extinguishes the cause of action.' In McDermott v Black there was clearly a cause of action being pursued, the subject of which an agreement was reached not to sue upon particular allegations.
[10] Federal Commissioner of Taxation v Orica Ltd [1998] HCA 33, (1988) 194 CLR 500 [116].
The respondent relies upon the finding of Homeguard Products (New Zealand) Ltd v Kiwi Packaging Ltd,[11] a decision of the High Court of New Zealand, by which one party sent a cheque to another party in 'full settlement' of their account. Homeguard Products disputed the total amount owing to Kiwi Packaging and sent a cheque for what they considered the correct amount, being lower than the amount claimed. Kiwi packaging gave no reply, banked the cheque, and it was held that the banking of the cheque in those circumstances along with the absence of any other action amounted to full settlement of the account.
[11] Homeguard Products (New Zealand) Ltd v Kiwi Packaging Ltd[1981] 2 NZLR 322.
The Homeguard Products decision is distinguishable from the present circumstances in which the respondent had provided the services, determined of itself what was to be invoiced, paid itself for the invoiced fees from monies held on trust and merely provided statements and invoices which reflected the charges and deductions before providing a cheque to the applicant for the balance of trust funds held by the respondent.
The very purpose of the provisions of the LPA relating to costs is to ensure that clients are properly informed of their rights, can question whether costs were reasonable and appropriately incurred, can have a costs agreement set aside in appropriate circumstances and can have the costs assessed.
I do not accept the respondent's submission that the receipt and banking by the applicant of the balance of trust funds from the respondent was an agreement amounting to a full settlement of the account or a receipt of his part of a bargain. It was simply a return to him of his funds placed upon trust with the respondent upon the respondent determining that they were not required to be applied towards fees and disbursements. Whether certain items were not charged for at all, certain unpaid amounts were not to be recovered or whether some items had been invoiced at lower rates than they might have been, were not matters within the control of the applicant.
The intention that there would be an accord, and terms of any accord, are certainly not clear on the evidence:
(a)There is no evidence that the applicant had previously raised any concern about the invoices rendered to him, or that he was intending to apply or considering applying for an assessment of costs. There was no dispute or claim as to costs or conduct existing at the time the retainer was terminated for which legal proceedings against the respondent may be commenced. There was no obvious cause of action the application was giving up in contemplation at the time, and no reference to any cause of action in the correspondence.
(b)There is no evidence of the value of the undercharges or non-charges the respondent alleges it gave up as part of the agreement to justify it being valuable consideration for an agreement, or that the applicant knew the value of such at the time. Even if there was an intention to reach an agreement for a settlement, that there was a cause of action being given up, and terms of settlement otherwise clear, it was not possible for the applicant to make an informed decision about settlement of claims for any further charges not then raised against him in invoices.
(c)There is an assertion by the respondent that the terms are clear and not open to ambiguity and in the nature of a full and final settlement of all issues between the parties including the taxation of costs. Despite references to settlement, or full and final settlement, there is no email or other document which clearly and unambiguously sets out the terms of agreement, including as to the applicant foregoing statutory rights regarding costs.
(d)The original request by the applicant for a 'final settlement statement' and the request from the respondent to 'please advise whether you accept cheque or direct transfer to the Estate's bank account in full and final settlement' are not clear unambiguous statements of intention to resolve a dispute by agreement. The respondent's request is ambiguous and confusing if it is sought to be relied upon as evidence of an accord and satisfaction.
It is not clear on the evidence that the parties intended to, or did, reach any agreement relating to the full compromise of the applicant's rights not to pursue an assessment of costs or exercise other rights, or to the value of any consideration agreed upon for the discharge and extinguishment. From the available evidence that was not the intention and no agreement was reached.
Despite the respondent's submission that the accord involved the applicant giving up rights to challenge the costs, the cover letter to the final invoices dated 24 May 2019 clearly set out the existence of those rights and attached invoices that state the applicant's right to have the costs assessed. If that was not intended to be the case by agreement, then a clear statement of that agreement should have been made by the respondent in the correspondence.
Mr Strbac states on affidavit that his file note of the 24 May 2019 was regarding his discussion of a full and final settlement with the applicant. To the extent that the note is of a conversation with the applicant to the effect that the applicant was told there would be no review of the account, that of itself is ambiguous. It could mean either that the applicant sought to have the accounts reviewed and Mr Strbac would not agree to review them [which is not alleged] or that Mr Strbac said that the respondent would not review the accounts issued [perhaps to pick up undercharged or uncharged items to charge the applicant additional fees]. The fact is that it is not clear and unambiguous as alleged.
Further, in that same note it is recorded that the respondent would not ask for payment of some unpaid invoices, and a specified amount would be paid (returned) to the applicant in full and final settlement, to which the applicant agreed and said 'no problems'. There was no reason for the applicant not to agree if Mr Strbac offered not to recover certain costs and there was a balance of trust funds to be returned to him.
The question is whether in doing so he had to give up rights to challenge the costs charged including as to assessment. The file note of 24 May 2019 makes no reference to any waiver of the applicant's rights to have the costs assessed.
Further, the 24 May 2019 file note does not record whether the discussion was before or after the sending of the email, letter and final invoices of that same date. Upon the respondent's case, the applicant was agreeing to a full and final settlement in the discussion of 24 May 2019. If that discussion occurred before the invoices were sent, then it would not have been clear to the applicant what costs were being charged, what rights he was giving up and what, if any, other charges the respondent may be abandoning against him. If that discussion was after the issuing of the invoices, then there is insufficient evidence as to the terms of the full and final settlement given that phrase is used in the context of a return of trust funds and there should have been subsequent correspondence to set out the agreement reached in clear terms.
In the context of the email of 24 May 2019, I do not consider that it was clear and unambiguous that it was intended that the return of certain funds to the estate were by way of a 'full and final settlement', or what was being settled, as opposed to merely a return of surplus funds from trust to the client.
Mr Strbac refers in his affidavit to the meeting of 29 May 2019. He stated: 'I advised him again that there has been some billable units that were not recorded and some billables recorded at lower rate. He [the applicant] was also told that we [the respondent] would have the right to review file and bill for any work done but not recorded.' While there is reference to a full and final settlement, the reference to the respondent's assertion of a right at that stage, despite a full and final settlement agreement which they now assert, undermines the respondent's own argument that there was an accord and satisfaction.
It is not stated that, but for the full and final settlement, the respondent would have the right to review the file and bill for any work done but not recorded or under recorded.
On the face of the Communications there was the usual exchange of information relating to the termination of a retainer, handover of a file and finalisation of accounts including the return of surplus monies held on trust.
What is clear from the Communications was that further fees would be, and were, charged to the applicant in finalising the files on 24 May 2019, the amount of which was deducted from trust before the balance was returned by cheque.
There is no evidence before me in the Communications or otherwise in the affidavits of what work had been left unrecorded, not invoiced or invoiced at a lower rate, or remaining unpaid on outstanding invoices, by which the extent of consideration for a full and final settlement could be considered by the applicant as at 29 May 2019 or by me in determining these issues.
There is no explanation on affidavit of why the fees were left unrecorded, not invoiced, or invoiced at a lower rate, and were not charged when the final bills were issued in addition to outstanding fees being recovered. Even if Mr Strbac intended upon the issuing of the final invoices that the respondent forego some amounts as consideration for the applicant not exercising any of his rights in relation to the professional services or fees for those services, the extent of those, and why other fees were charged and recovered but not those, is not apparent from the affidavit content. The final invoices were prepared and issued 24 May 2019 by the respondent and sent in the same email asking about whether cheque or direct transfer was preferred in full and final settlement.
It is for the respondent, contending for the existence of the accord and satisfaction, to satisfy me of the terms and the existence of the accord and satisfaction said to extinguish the applicant's right to the costs assessment. I am not satisfied on the evidence of the terms or existence of an accord and satisfaction.
Section 295 of the LPA provides a statutory right for a client to apply to a taxing officer for an assessment of the whole or any part of a bill for legal costs, even if the legal costs have been wholly or partly paid. The fact that that the applicant paid each invoice without challenge until the application for assessment of costs does not establish an accord or satisfaction or deny him his statutory rights.
The Communications do not evidence an accord and satisfaction as contended for, and I find that there was no accord and satisfaction as contended for by the respondent law firm. There was therefore no concluded agreement for payment of costs in a particular sum such that it is said that there is no need for assessment.
In that regard I find in favour of the applicant. The applicant is not estopped from denying the accord and satisfaction.

Whether, and on what basis, the costs the subject of invoices prior to 20 January 2019, should be the subject of assessment

There being no impediment to there being an assessment of costs due to a concluded agreement, I turn now to the issue of whether, and on what basis, the costs the subject of invoices prior to 20 January 2019, should be the subject of assessment, such invoices being issued more than 12 months prior to the commencement of the application for assessment of costs.
The application for assessment of costs was filed on 20 January 2020.
The invoices the subject of the application for assessment were dated between 2 February 2017 and 24 May 2019.
There is no issue taken that the invoices issued on and after 3 March 2019, being the invoices issued within 12 months prior to the application for assessment, are within time for assessment.
However, with respect to invoices prior to 20 January 2019, the respondent law firm submits:
(a)s 295(6) of the LPA requires the assessment by a client to be made within 12 months after each bill was given to the client;
(b)time starts to run when each bill is given;
(c)as bills were provided on a monthly basis, and without previous complaint, no extension of time should be provided in relation to invoices of over 12 months; and
(d)there would be prejudice to the respondent if an extension of time were granted due to the practitioner who had the conduct of the file no longer working with the respondent.

With respect to invoices prior to 20 January 2019, and for reasons more fully set out below, the applicant relies upon s 293 and s 295 of the LPA, submits that the application is within time and makes no application for an extension of time as it is not considered to be necessary.
Section 252 of the LPA relevantly defines:
(a)'bill' as a bill of costs for providing legal services;
(b)'itemised bill' as a bill that specifies in detail how the legal costs are made up in a way that would allow them to be assessed under div 8 of the LPA;
(c)'lump sum bill' as a bill that describes the legal services to which it relates and specifies the total amount of the legal costs;
(d)'sophisticated client' as a client to whom because of s 263(2)(c) or (d), disclosure under s 260 or s 261(1) was not required.
The applicant is a public servant. It is clear that he is not a 'sophisticated client' for the purpose of the LPA.
The applicant was given a disclosure required under s 260(5) of the LPA referring to a right to apply for costs to be assessed within 12 months. That disclosure does not specify whether it is 12 months from the issuing of an itemised interim bill, such that time separately runs on every invoice, or 12 months from the issuing of a final bill on all of the invoices.
Section 291(1) of the LPA requires a bill to include or be accompanied by a written statement setting out the avenues to dispute costs, amongst other things by costs assessment under div 8 and any time limits that apply to the taking of any such action.
In the:
(a)invoices the subject of this application no reference was made to any time limits. The wording was:
You may require us by notice in writing to submit the bill of cost to a taxing officer of the Supreme Court of WA for review of the amount of costs charged to you, the subject of this bill of costs.
(b)letter dated 2 February 2017 by way of example, being attachment MS-10 to Mr Strbac's affidavit, the wording was:
The following avenues are available to you if you are not happy with this bill: requesting an itemised bill; discussing your concerns with us; having our costs assessed; applying to set aside our costs agreement. For more information about your rights, please read the fact sheet titled Your right to challenge legal costs. You can ask us for a copy, or obtain it from the Legal Practice Board (or download it from the website of the Legal Practice Board or the Law Society of Western Australia).
Attachment MS-10 is referred to in paragraph 28 of the affidavit, referred to further below.
The effect of the respondent law firm's submission is that as an application for assessment of the 'bill' must be made within 12 months after the bill was given, without objection or extension the only bills capable of now being assessed are the six bills issued on or after 3 March 2019. However the significance of an interim bill and final bill lies in s 293 of the LPA.
Section 293 of the LPA, being part of Division 7, provides:
(1)A law practice may give a person an interim bill covering part only of the legal services the law practice was retained to provide.
(2)Legal costs that are the subject of an interim bill may be assessed under Division 8, either at the time of the interim bill or at the time of the time of the final bill, whether or not the interim bill has been paid.
By s 295 of the LPA, a client may apply to a taxing officer for an assessment of the whole or any part of a bill for legal costs, and an application may be made for a costs assessment even if the legal costs have been wholly or partly paid.
While no reference is made in this application to s 295, which is part of div 8, it is necessarily the section pursuant to which the application is made.
Section 295(6) of the LPA provides:
(6)An application by a client or third party payer under this section must be made within 12 months after -
(a)the bill was given in accordance with Division 7 or the request for payment was made to the client or third party payer; or
(b)the costs were paid if neither a bill was given nor a request was made.
It is possible under s 295(7) of the LPA for a taxing officer to deal with an application made out of time otherwise than by a sophisticated client or third party payer who would be a sophisticated client if the taxing officer determines that it is just and fair for the application for assessment to be dealt with after the 12‑month period.
The applicant submits that all bills other than the final bill issued 24 May 2019 were interim bills, and accordingly all of those bills rendered may be the subject of an application for assessment. They would, for the purposes of s 293(2), be assessed at the time of the final bill, and for the purposes of s 295(6)(a) within 12 months of the respondent rendering the final bill. If that is correct, then no extension is required.
The applicant relies upon the decision of Registrar Dixon in Hakuna Matata Corporation Pty Ltd v McDonald Pynt Lawyers.[12] That decision was affirmed by Master Sanderson on appeal in McDonald Pynt Lawyers v Hakuna Matata Corporation Pty Ltd.[13] That was a decision regarding when time runs in relation to a costs assessment pursuant to s 295(6) where a series of bills had been rendered for services involving representation of the client by the firm in two Supreme Court actions. For the reasons set out in detail and by reference to authority in Registrar Dixon's decision, he found that:
(a)the bills in question covered part only of the legal services that [the firm] was retained to provide, and were therefore interim bills rather than a series of separate final bills;
(b)because the final bill was rendered [less than 12 months before the application for assessment], the application was in time for assessment of the interim bills issued more than 12 months before the application and the applicant was entitled to have the bills in question assessed pursuant to the Act.
[12] Hakuna Matata Corporation Pty Ltd v McDonald Pynt Lawyers [2012] WASC 513.
[13] McDonald Pynt Lawyers v Hakuna Matata Corporation Pty Ltd [2013] WASC 223.
There is no reason for me not to adopt the approach and reasons of the learned Master and Registrar in those decisions and I do so.
There is no submission from the respondent addressing these authorities or alleging that the invoices were a series of final bills with separate limitations. Further, the argument for the invoices being separate final bills in that case arose from submission that the bills were rendered at the end of stages in the proceedings when there were natural breaks in the proceedings. In the matter before me that is clearly not the case and the invoices were simply issued under one costs agreement on a monthly basis as legal services were provided.
Accordingly, the bills in question may be considered as being interim bills but for the final bill on each file issued 24 May 2019, meaning that in accordance with s 293(2) and s 295(6) of the LPA all of the legal costs may be assessed now as part of the application for assessment filed within 12 months of the final bills.
The fact that the applicant could have, but did not, apply for a costs assessment within 12 months of each interim bill being given is addressed within the above decision of the learned Registrar at [10] ‑ [11], citing McGill DCJ in Turner v Mitchells Solicitors.[14] While an application could have been made regarding each interim bill earlier, the sections contemplate the making of an application for assessment at two different times, and for which the full benefit of the costs and the reasonableness of the costs may only be capable of full consideration upon the completion of performance of the legal work rather than by reference to some particular work in isolation. There may well also be prejudice to continuing performance of legal services under a retainer if there is a dispute regarding an interim bill. There is also a practical consideration that the need for assessment may not be apparent early on.
[14] Turner v Mitchells Solicitors [2011] QDC 61 [18]
Such prejudice which may occur to the relationship of the client and solicitor during the course of the retainer, and the ability to consider the reasonableness of the work that is the subject of the interim bill in the context of the whole retainer are also the subject of the decision of Mullins J with whom Margaret McMurdo P and Fraser JA concurred, in the Queensland Court of Appeal decision in Challen (t/as Hawthorn Cuppaidge & Badgery) v Golder Associates Pty Ltd.[15] In that case, cited by Master Sanderson in McDonald Pynt Lawyers v Hakuna Matata Corporation Pty Ltd at [4], the Court of Appeal effectively upheld the approach by McGill DJC and found that there was no error in concluding that the Queensland equivalent of s 293(2) allows additional time for the assessment of an interim bill so that they may be the subject of an application for assessment made within 12 months after the final bill.
Disposition
[15] Challen (t/as Hawthorn Cuppaidge & Badgery) v Golder Associates Pty Ltd [2012] QCA 307 [41]
Accordingly, I find that:
(a)There was no concluded agreement for payment of costs in a particular sum such that it is said that there is no need for assessment.
(b)All of the invoices referred to in the application for assessment of costs should be the subject of assessment. Those prior to 20 January 2019 were interim invoices for part of the legal services. The last two invoices, issued 24 May 2019, were final invoices on each file. The basis of the entitlement for those costs to be assessed now is under s 293(2) and 295(6)(a) of the LPA.
(c)Mr Strbac's affidavit should not be uplifted and removed from the court record but I would strike out those parts of it which are referred to in paragraph 22.
The applicant has been successful in relation to the issues as to whether there was a concluded agreement for payment of costs in a particular sum and as to the entitlement for costs the subject of the application prior to 20 January 2019 to be the subject of assessment.
The applicant has been partly successful and partly unsuccessful in relation to the striking out Mr Strbac's affidavit or parts of it.
I will hear the parties as to the need for any further directions prior to assessment of the costs the subject of the original application and as to costs arising from the issues the subject of these reasons.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
AP
Court Officer
21 JULY 2020