SC 972 of 2009 Goodman Law Pty Ltd v Nationwide Capital Pty Ltd (ACN 102 629 078)

[2010] ACTSC 154

SC 972 OF 2009 GOODMAN LAW PTY LTD  v NATIONWIDE CAPITAL PTY LTD (ACN 102 629 078)
[2010] ACTSC 154 (10 December 2010)

COSTS – costs between solicitor and client – Legal Profession Act 2006 (ACT) – assessment by Registrar of solicitor-client bill – appropriate parties – principles to be applied

Court Procedures Rules2006 (ACT)
Legal Profession Act 2006 (ACT)
Supreme Court Act 1933 (ACT)

No. SC 972 of 2009

Judge:             Master Harper
Supreme Court of the ACT

Date:              10 December 2010

IN THE SUPREME COURT OF THE     )
  )          No.  SC 972 of 2009
AUSTRALIAN CAPITAL TERRITORY           )

BETWEEN:GOODMAN LAW PTY LTD

Plaintiff

AND:NATIONWIDE CAPITAL PTY LTD (ACN 102 629 078)

Defendant

ORDER

Judge:  Master Harper
Date:  10 December 2010
Place:  Canberra

THE COURT ORDERS THAT:

1. Goodman Law Pty Ltd be substituted as plaintiff in place of Tom Elvin Pty Ltd.

1. The bill of costs filed on 27 November 2009 be referred to the Registrar for assessment.

1. The defendant’s costs of the application be paid by Goodman Law Pty Ltd.

1. This proceeding has been wrongly commenced and wrongly titled. On 27 November 2009, Goodman Law, describing themselves as acting for the “costs applicant”, filed a bill of costs, described as a solicitor-client bill, in itemised form pursuant to section 296 of the Legal Profession Act 2006 (ACT). The registry accepted the document for filing on the same day, and the bill was set down for assessment on 3 March 2010.

1. The matter came before me by reason of an application in proceeding filed on 6 August 2010 by Goodman Law seeking an order that Goodman Law Pty Ltd be substituted as plaintiff in place of Tom Elvin Pty Ltd.  The grounds for the application were stated to be:

a)   That the issuing of proceedings in the name of Tom Elvin Pty Ltd was a mistake; and

b)   That the substitution of the plaintiff was necessary to enable the court to adjudicate effectively and completely on the issues in dispute in the proceeding.

1. The application was supported by an affidavit by Mr S J Gavagna, the principal director of the law firm Goodman Law Pty Ltd.  He deposed that his firm had received instructions in March 2007 to act on behalf of both Tom Elvin Pty Ltd and Nationwide Capital Pty Ltd with respect to their joint interests as lenders to another company.  He said that the two companies from whom he had received instructions had entered into an agreement by way of a deed of priority in March 2007 with respect to repayment of the funds lent.  The agreement provided that the present defendant, Nationwide Capital Pty Ltd, was to indemnify Tom Elvin Pty Ltd with respect to any legal costs expended in the enforcement or recovery of securities provided by the borrower as collateral for the loan. 

1. It is apparent that the intention of Mr Gavagna and of Goodman Law was to apply to the court for assessment of its legal costs under a bill given to Nationwide Capital Pty Ltd. 

1. Section 296(1) of the Legal Profession Act 2006 (ACT) provides as follows:

296 Application for costs assessment by law practice giving bill

(1)        A law practice that has given a bill in accordance with division 3.2.6 (Billing          ) may apply to the Supreme Court for an assessment of all or any part of the legal costs to which the bill relates.           

1. The parties to the dispute are clearly Goodman Law Pty Ltd, being the party claiming relief, and Nationwide Capital Pty Ltd, being the party against whom relief is sought. Rule 20 of the Court Procedures Rules2006 (ACT) provides that they are to be named as plaintiff and defendant in the proceeding, and I shall order that the name of the plaintiff be changed to reflect this. Tom Elvin Pty Ltd should not have been made a party to the matter. Part 3.2 of the Legal Profession Act 2006 (ACT) provides for an application to this court for quantification of costs by a party liable to pay the costs, and also by a law practice, but not by some other entity which might be entitled to indemnity in relation to its own costs.

1. By virtue of section 298(8) of the Legal Profession Act 2006 (ACT), the law practice may not commence proceedings for recovery of costs until the costs assessment has been completed.

1. Other provisions of that Act, including section 299 (Procedure on costs assessment) and section 300 (Criteria for costs assessment) apply to the quantification process. Once the jurisdiction of the court is engaged under section 296, the court must proceed with the costs assessment.

1. There are no rules within the Court Procedures Rules 2006 (ACT) which deal specifically with the assessment of costs as between solicitor and client under part 3.2 of the Legal Profession Act 2006 (ACT). There are rules, contained in part 3.11, which apply to proceedings under the Legal Profession Act 2006 (ACT), but these deal only with admission to the profession and have nothing to say about assessment of costs between solicitor and client.

1. Part 2.17 of the Rules deals with costs, but deals generally with orders for costs made by the court in civil proceedings between parties. Part 2.17 does not in its terms apply to a solicitor-client assessment of costs, although some of the rules within that part may be of assistance by analogy to the officer of the court undertaking a costs assessment under section 296 of the Legal Profession Act 2006 (ACT).

1. Jurisdiction is conferred on the Registrar by subrule 6250(3)(e) to conduct a costs assessment under division 3.2.7 of the Legal Profession Act 2006 (ACT), which includes section 296. Subrule 6250(1) states that the rule applies only to the Registrar of the Supreme Court.

1. Section 8 of the Supreme Court Act 1933 (ACT) provides that the jurisdiction of the court is exercisable by a single judge, except (relevantly for present purposes) when exercised by the Registrar under the rules. The section goes on to provide that the rules may provide for the jurisdiction of the court otherwise exercisable by a single judge to be exercised by the Registrar, in the cases and subject to the conditions prescribed under the rules. Subsection 8(3) defines Registrar to include a Deputy Registrar.  Section 10 provides that for the purposes of the exercise of jurisdiction given to the Registrar under the rules the Act has effect as if the court consisted of the judges and the Registrar.  Subsection 10(2) also defines Registrar to include a Deputy Registrar. 

1. Subrule 6250(1), however, states specifically that the rule applies only to the Registrar of the Supreme Court.  Does this mean that rule 6250 does not confer jurisdiction on a Deputy Registrar? 

1. Some assistance on this question is provided by rule 6251, expressed to apply only to the Registrar of the Magistrates Court.  Subrule 7 of that rule provides that a Deputy Registrar may exercise the jurisdiction of the court under the rule only if authorised in writing by the Chief Magistrate.  There is no counterpart to this subrule in rule 6250.  It therefore seems to me, notwithstanding the wording of subrule 6250(1), that the jurisdiction conferred on the Registrar of the Supreme Court by rule 6250 may be exercised by a Deputy Registrar.  Subrule 6250(1) should be, it seems to me, read as limiting rule 6250 to the Supreme Court, in case of any suggestion that it might apply to the Magistrates Court, rather than to the Registrar of the Supreme Court in contradistinction to a Deputy Registrar.

1. It accordingly appears to me that a costs assessment under the Legal Profession Act 2006 (ACT) may be undertaken either by the Registrar or by a Deputy Registrar.

1. In the light of these reasons I propose to make orders and directions that will correct the title of the proceeding and refer the bill to the Registrar or Deputy Registrar for assessment.

1. The solicitors, Goodman Law, concede in the application in proceeding filed on 6 August 2010 that the need to change the title of the proceeding and hence the need for the application was occasioned by their mistake.  In those circumstances they should pay the defendant’s costs of the application. 

   I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master.

   Associate:

   Date:    10 December 2010

Counsel for the plaintiffs:  Mr H J Kay
Solicitor for the plaintiffs:  Goodman Law
Counsel for the defendants:  Mr R L Travers

Solicitor for the defendants:  ERA Legal by their agents Travers & Co

Date of decision:  10 December 2010