Singh v Slater and Gordon
[2018] VSC 363
•2 July 2018
| IN THE SUPREME COURT OF VICTORIA |
AT MELBOURNE
COSTS COURT
S CI 2017 01986
| GURWINDER SINGH | Applicant |
| v | |
| SLATER & GORDON | Respondent |
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JUDGE: | Wood AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 15 June 2018 |
DATE OF DECISIONS & REASONS: | 2 July 2018 |
CASE MAY BE CITED AS: | Singh v Slater & Gordon |
MEDIUM NEUTRAL CITATION: | [2018] VSC 363 |
DECISION & REASONS
APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Applicant in person | |
| For the Respondent | Ms A Austin | Slater & Gordon |
HIS HONOUR:
On 15 June 2018 I heard the parties in this matter and reserved my decision. I now publish the decision and reasons.
The relevant history of the matter commences on 25 May 2017 when the applicant filed a Summons for Review of Costs pursuant to section 3.4.38(1) of the Legal Profession Act 2004 (‘the Act’) to review legal costs charged by the respondent when acting for the applicant as plaintiff in a personal injury involving the TAC in the Supreme Court (‘substantive proceeding’) arising from a motor vehicle accident on 28 October 2011. The substantive proceeding was a jury trial that ran to judgment in favour of the applicant in the sum of $1,314,238.70. The defendant in the substantive proceeding was also required to pay the applicant ‘party and party’ costs on a standard basis. The respondent’s itemised bill of costs payable by the applicant to them for acting for him in the substantive matter were claimed at $312,210.05 for professional costs and $339,204.57 for disbursements. A total of $651,414.72.
With the consent of the parties, Judicial Registrar Gourlay conducted an assessment pursuant to Rule 63.88 of the Supreme Court (General Civil Procedure) Rules 2015. That procedure involves the provision by the court, of an estimate of the likely figure the bill would be taxed at. The procedure is conducted in the absence of the parties and without determinations necessarily being made on individual items.
The Judicial Registrar completed the estimate on 21 November 2017. The estimate of $553,058.74 comprised a figure of $217,253.50 for professional costs and $335,805.24 for disbursements. An analysis was also provided which explained why the 25% uplift fee should be excluded from professional costs which were significantly reduced. There was a small reduction for the disbursements.
The Assessment Notice from the Court helpfully advised the parties of their option of filing with the Court, and serving on the other party, a notice of objection within 21 days as required by Rule 63.88(3). The Assessment Notice also advised that in the absence of a Notice of Objection (‘Notice’) the Court could make an order on taxation for the estimated figure. That is in fact what occurred. No Notice was filed and served by either party and after the expiry of the mandated 21 day period an order was made on 15 December 2017 for the estimated sum. This necessitated a refund by the respondent to the applicant of $121,756.34 which has since occurred.
On 21 February 2018 the applicant filed a document entitled ’Review of order made on 15 December 2017 by Judicial Registrar Honourable Gourlay (under 63.56.2)’. The December date was the date of the order that transformed the estimated figure into the final taxed figure. The date of the estimate, being the date from which the 21 day time limit commenced to run, was actually 21 November 2017.
Rule 63.56.2 (referred to in the Notice) applies where a Judicial Registrar makes rulings on individual items in a taxation and reconsideration of those rulings is sought. The time limit prescribed in that rule is 14 days. The applicable rule in this matter however is 63.88(3) and the applicant’s document filed on 21 February 2018 should be construed as a Notice under that rule. It was filed outside the time limit set, after the taxation order was subsequently made, and after payment by way of refund by the respondent to the applicant.
The applicant was overseas from 19 December 2017 to 1 February 2018 and seeks an extension of time. The applicant was not overseas during the 21 day period running from 21 November 2017. However, at the hearing on 15 June 2018 the respondent did not oppose the application to extend time and was prepared for the Notice to be dealt on its merits.
The Notice takes no issue with the estimated figure attributed to professional costs. It states ‘I would like to object certain items in bill which I believe were unreasonably charged to me. I would also like to make it clear the disbursement part that I am objecting. I am satisfied with costs assessed in relation to solicitor/client which is payable to Slater and Gordon.’ In fact the Notice states elsewhere ‘I would like to thank again to the costs court for finding the respondent guilty of overcharging me’. At the hearing on 15 June 2018 the applicant made a submission that was inconsistent with, and diametrically opposed to the position in his own Notice. The submission was made that the respondent should refund all his legal costs due to their ‘fraud’.
The Notice then outlines specific objections to some identifiable disbursements. These are dealt with below. However, the Notice contains requests and allegations that cannot be considered as part of the review of the quantum of the bill of costs. For example – ‘I would like the costs court to please provide me direction how I can file charges against this law firm for acting in manner which is fraudulent, and misleading and have caused me additional suffering.’ It appears that the applicant has been charged with a criminal offence and he states the ‘chain of causation links to Slater and Gordon’s unethical conduct which led me to all this trouble’. A general assertion is also made that the respondent acted ‘unethically and illegal and also an act of fraud’. Individuals have the option of taking conduct concerns to the Legal Services Commissioner and from the material filed it is apparent that he has already exercised this right on 29 April 2017 when he made wide ranging allegations of negligence, misrepresentation, duress, undue influence, fraud, unethical conduct and the charging of unreasonable costs. The material filed included a letter dated 19 April 2017 from the respondent which appears to attempt to discourage the applicant from initiating this proceeding. Conduct issues are matters for the Legal Services Commissioner.
There are however five component parts of the Notice which can be dealt with. Three relate to disbursements (counsel fees, the fees of a costs consultant, and the fee of Dr Justin Hunt). The remaining two items relate to an alleged entitlement to interest on the refund, and a claimed allowance for his own work involved in this proceeding.
It is trite to say that not all costs are recoverable from another party to litigation even when you are favoured by a costs order. There will inevitably be a non-recoverable gap and the respondent’s estimates communicated to the applicant throughout the conduct of the substantive matter put the applicant on notice about this concept.
Counsel fees – These are items 1800 and 1801 in the bill. The costing arrangements with counsel were in place at the relevant time for $9,900 for senior counsel and $4,950 for junior counsel. These sums were in the disclosure material provided to the applicant immediately prior to trial. On 2 March 2017 the Honourable Justice Cavanough certified fees at $7,700 and $3,850 respectively as appropriate amounts as between the parties to the litigation. This appears from the transcript of 1 March 2017 to be by consent. In other words, it was agreed between the parties to the litigation that this was an appropriate allowance that the defendant should contribute to the applicant’s costs. An assumption is made that senior counsel had instructions on behalf of the applicant to consent in those terms. The applicant does not allege this was without instructions.
Any judge always has the option of not making an order in the terms proposed by parties in a consent order agreed as between themselves. The particular Judge in the substantive proceeding had the option of not making the order and making a different order in the certification of counsel fees that fixed the liability as between the defendant in the substantive proceeding and the applicant. That did not occur in this particular case.
The basis of the charging by counsel as between the applicant and themselves is a separate matter. The applicant was advised of the rates for both senior and junior counsel in the respondent’s letter dated 10 February 2017 provided immediately prior to trial. The validity of the respondent’s costs agreement does not affect counsels’ entitlement to recover fees at the rates disclosed. In oral submission at the hearing on 15 June 2018 the applicant contended that he should not be liable for any counsel fees on two bases. First, the disclosure of the proposed charges came just before the trial and he had insufficient time to consider the issue. Secondly, counsel advised him to accept the defendant’s offer of $1,100,761.30 (which he refused to accept) and the jury gave him more. On that basis the advice was wrong and therefore he should not be liable for counsel fees.
In relation to the first basis, it is clear the applicant was determined to run the action to judgment and therefore whether the charges were $7,700 and $3,850 or $9,900 and $4,950 it is unlikely his decision to continue was influenced by the daily rates of counsel fees. At the hearing on 15 June 2018 the applicant provided a copy of his letter of 19 December 2016 to the respondent. The letter contains his emphatic justification for not accepting the defendant’s offer made at that time.
In relation to the second basis, it is difficult to accurately predict what a jury will decide. The advice to accept the offer on the basis it was within the range expected from a jury was appropriate given the vagaries of litigation. To deny counsel any fees would also ignore the obvious fact that the only reason the applicant was able to achieve the successful judgment that he did was due to the skill and endeavour exhibited by the legal team on his behalf. These were reasonable charges for a 12 day jury trial given the nature of injuries and economic loss claimed.
At the hearing on 15 June 2018 the applicant also took issue with the fact he had been charged full daily fees for days that did not occupy the full day. There was an adjournment of the trial on one day due to the ill health of the applicant. There was also a half day on another occasion due to the trial Judge’s unavailability. Counsel is clearly entitled to charge a full day in those circumstances as they have made themselves available for the full day, are unable to take on other cases and would have utilised the time in trial preparation. Further, the judge certified twelve full day fees for senior counsel and eleven for junior counsel. Some of these included half days.
The applicant also made the oral submission at the hearing on 15 June 2018 that as a minimum, he should be refunded the difference between what counsel fees were certified for and what he was charged. As outlined in paragraph 12 above he was on notice about a potential shortfall between what he is charged and what he can recover from the other party. What a judge is prepared to certify as a defendant’s liability is often less than what is contracted for.
Cost consultant – These are items 1913 and 1914 in the bill and are two disbursements for Blackstone Legal Costing conducting assessments of the party and party costs. The applicant’s Notice refers to them being ‘unreasonable, and I was informed that it should be paid by the defendant, as my acting lawyer it was the duty of Slater and Gordon lawyers to claim it on my behalf’.
Item 1913 was for $2,295.70 which was incurred 17 November 2016. This was just prior to the mediation held on 9 December 2016. Under the Act the respondent was unable to settle the applicant’s litigious case without disclosing to the applicant a reasonable estimate of costs payable if the matter is settled and a reasonable estimate of any likely contribution towards those costs by the defendant.[1] Blackstone Legal Costing (‘Blackstone’) was engaged to provide that independent expert costing advice.
[1]Section 3.4.13(1)(a) and (b).
Item 1914 was for $12,650 on 12 April 2017. The jury decision was 1 March 2017. This was for the ‘updated assessment and costs conferences’. Again, the engagement of an independent costs expert was for the purpose of maximising costs recovery from the defendant. The applicant was advised of their engagement in a letter dated 14 March 2017. The party and party costs were settled on 12 April 2017 in the sum of $508,111.11 with the assistance of the costs consultant.[2] It was reasonable to engage a costs expert in that process and the fees are reasonable. It is apparent from the respondent’s letter of 19 April 2017 and ’Schedule of Disbursements recovered from the TAC’ enclosed that these sums were requested from the TAC but the TAC refused to make an allowance for them. An overall settlement of costs was achieved and this obviated the necessity for a full taxation which would have involved further delay and cost.
[2]See respondent’s letter of 19 April 2017.
In oral submission at the hearing on 15 June 2018 the respondent also made the valid point that if the costs consultant had not been engaged the work would have been performed in house. This is so and I am satisfied that the work would have been performed at a rate equal to or higher than the hourly rate charged by Blackstone.
Fees of Dr Hunt – This is item 1849 in the bill. The fee of $10,000 was charged. Dr Hunt had been a treating orthopaedic surgeon. The accident was 28 October 2011. The report from Dr Hunt in the list of disbursements was dated 11 July 2012. He was obviously treating the applicant contemporaneously with the accident and could give the best evidence of the severity of the initial injuries. On a party and party basis there was a recovery of $3,244.20 under the scale as per the Schedule referred to in paragraph 20 above. There was a rescheduling of witnesses brought about by the alterations to the trial schedule outlined in paragraph 17 above. The doctor gave evidence at the trial and from his invoice additional components included ‘pre interview and court attendance (inclusive of administration and staff paid coverage, cancellation and rescheduling of full consulting sessions on consecutive days including post operative patients)’.
At the hearing on 15 June 2018 the applicant took issue with the necessity to call Dr Hunt to give evidence as he was not the current treating orthopaedic specialist. The decision of who to call as witnesses is the purview of the legal practitioners. They obviously came to the view that his evidence was supportive of the applicant’s case and particularly helpful given he treated him close to the accident date. The jury result is testament to the value of the witnesses called. As a general comment the absence of a treating specialist as a witness can often result in submissions that adverse inferences can be drawn from the failure to call them on the basis that their evidence is assumed to be unsupportive of the applicant’s case.
There is no reason for the respondent to be penalised and have its cost entitlement reduced just because the applicant is dissatisfied with the charge by the doctor supporting his case.
Interest – There is no provision for interest to be paid on refunded fees after a review in the Act. An analysis of the Supreme Court Act 1986 and the relevant Rules in Weingart v Leanne Cain & Associates (No 2)[3] concluded that there is no entitlement to interest where a refund is warranted after review.
[3](2018) VSC 245.
Costs of the proceeding – The applicant seeks ‘some of the recovery for my hard work’. The applicant initiated this proceeding, paid no filing fee and was self-represented. There is no entitlement for his time and trouble in accordance with the High Court authority of Cacchia v Hanes.[4]
[4](1994) 179 CLR 403.
As a final matter, at the hearing the applicant provided a copy of the letter dated 19 December 2016 (referred to in paragraph 15 above) to draw attention to the highlighted part of the letter. This was to demonstrate that there had been a failure to claim all he was entitled to in the substantive proceedings. This is not a valid criticism. The matters raised in that part of the letter could not have been part of the case. His complaint was that had the TAC made this much increased offer of $1,100,761.30 the year before (and he had accepted) property prices would have been less, his legal costs would have been less and he would have derived income from potential investment. That offer could not have been adduced as evidence in the proceedings as such offers are ‘without prejudice’ and cannot be disclosed during the running of the case.
It is of note that the applicant was advised on 10 February 2017 that the estimate for total costs after a ten day trial was between $531,962.67 to $548,212.67. The applicant instructed the respondent to run the trial knowing that was the estimate. The exact taxed figure allowed by the Judicial Registrar was $553,058.74, a figure that was remarkably close to the estimate given the vagaries of litigation and the fact it subsequently occupied twelve days and not ten days.
The time within which to file and serve a Notice of Objection provided for in Rule 63.88(3) is extended but the Notice is dismissed on its merits.
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