Stevenson v Zafra Pty Ltd

[2022] WASC 445

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   STEVENSON -v- ZAFRA PTY LTD [2022] WASC 445

CORAM:   MASTER SANDERSON

HEARD:   8 DECEMBER 2022

DELIVERED          :   22 DECEMBER 2022

FILE NO/S:   LPA 39 of 2019

BETWEEN:   CANDICE MARGARET STEVENSON

Applicant

AND

ZAFRA PTY LTD

First Respondent

WILSON & ATKINSON PTY LTD

Second Respondent

Catchwords:

Practice and procedure - Application for extension of time to tax costs - Turns on own facts

Legislation:

Legal Profession Act 2008 (WA)

Result:

Application dismissed

Category:    B

Representation:

Counsel:

Applicant	:	In Person
First Respondent	:	P G McGowan
Second Respondent	:	P G McGowan

Solicitors:

Applicant	:	In Person
First Respondent	:	Zafra Legal
Second Respondent	:	Zafra Legal

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

Frigger v Murfett Legal Pty Ltd [2012] WASC 447

MASTER SANDERSON:

1. On 17 September 2019, the applicant's then solicitors filed an originating process seeking to have assessed certain bills of costs rendered to her by the first respondent between 10 November 2015 and 3 October 2016.  The second respondent was joined to the proceedings by amended originating process filed on 4 October 2019.  An extension of time to apply for the assessment of costs was required and sought by the applicant's then solicitors.  This was opposed by the respondents.  In opposition to the application, the respondents relied on an affidavit of Shayne Graham Leslie sworn 28 October 2019.  The applicant relied upon her two affidavits sworn 17 September 2019 (first affidavit) and 13 November 2019 (second affidavit).  On 21 November 2019, the respondents filed a notice of objection to certain paragraphs of the applicant's first affidavit.  I will deal with those objections below.  For the present I should note that submissions in support of the application were filed by the applicant's then solicitors on 12 November 2019 and the respondents' submissions were filed 21 November 2019.

2. It is apparent there has been a significant delay in dealing with this application.  That delay has been occasioned in large measure by the applicant's attempts to set aside the underlying costs agreement.  I dismissed that application and the applicant's appeal against that decision was dismissed.  An application for special leave to appeal to the High Court was also dismissed.  Of course, it made no sense to deal with this application when the question of whether or not the costs agreement pursuant to which the bills were rendered would be set aside was still extant.  Given the time that has passed, it is now appropriate to deal with the outstanding issues.

3. Dealing then with the objections taken by the respondents to the applicant's first affidavit, the paragraphs complained of are pars 14, 40, 44, 55, 56, 58.1 and 58.2.  Objection is taken to all of those paragraphs.  The nature of the objection varies slightly from one paragraph to the next.  By way of example, paragraph 14 of the applicant's first affidavit reads as follows:

   Had I transferred the shares to Atrum my loss would have been $1,500.

4. The objection taken to that paragraph is that it is 'speculation, conjecture, vague, argumentative and irrelevant to assessment of costs'.  There is some substance in the objection.  But on balance, while the paragraph could have been better framed, it is not so mischievous as to warrant it being struck out.  Furthermore, this is an application for an extension of time.  That paragraph and the others complained of is really addressed to the assessment of costs.  Then so far as the application for the extension of time is concerned, I would allow par 14 and the other paragraphs complained of to stand.

5. The relevant background facts can be summarised as follows.  In October and November 2015, proceedings were issued against the applicant and others in the Federal Court.  In her written submissions, the applicant describes the two separate but interrelated proceedings as the 'delivery up action' and the 'account action'.  Collectively, she refers to these two separate proceedings as the 'Federal Court proceedings'.  The applicant notes that she was one of seven parties who were defendants in the Federal Court proceedings.  It is her position she was a 'minor player' in the Federal Court proceedings.  At least for the purposes of this application, that characterisation of the applicant's part in the Federal Court proceedings was not disputed by the respondents.  Ultimately the Federal Court proceedings were settled.  It was subsequent to the settlement of the Federal Court proceedings the accounts in question were rendered to the applicant.

6. The power of the court to extend time which a client may have a solicitor's costs assessed is found in s 295(7) of the Legal Profession Act 2008 (WA). That section reads as follows:

   However, an application that is made out of time, otherwise than by —

   (a)a sophisticated client; or

   (b)a third party payer who would be a sophisticated client if the third party payer were a client of the law practice concerned,

   may be dealt with by the taxing officer if the Supreme Court, on application by the taxing officer or the client or third party payer who made the application for assessment, determines, after having regard to the delay and the reasons for the delay, that it is just and fair for the application for assessment to be dealt with after the 12 month period.

7. The section requires the court to take a staged approach to an application for an extension.  First, the court must have 'regard to the delay'.  That is to say, the length of the delay after the 12 month period is the first factor to be considered.  Second, the reasons for the delay must be considered.  Looking at the text and the context of the subsection, it seems clear these two elements must be considered together but a failure to satisfy one or the other is not necessarily fatal to the application.  So if the delay was lengthy but it was adequately explained, then time may be extended because it was just and fair to do so.  In other words, it is a matter of weighing both considerations in the balance.

8. The question then arises as to whether any other considerations are to be taken into account in determining whether to extend time.  For instance, if it appeared on the face of it the costs were excessive, would this in and of itself justify an extension of time?  In Frigger v Murfett Legal Pty Ltd [2012] WASC 447, Hall J noted he was not satisfied the applicant's argument the bill of costs in question was excessive was made out. At least by implication, his Honour seemed to consider the question of whether the bill was prima facie excessive could impact upon the discretion to extend time. For my part, I have some difficulty seeing how, given the wording of the subsection, factors beyond the length of the delay and the reasons for the delay could be relevant. It may be the broad concept of the 'interests of justice' make this and other considerations relevant. If that is the case, it is certainly necessary first and foremost to consider the length of the delay and the reasons for the delay.

9. As the respondents submit, the delay in seeking assessment is lengthy.  Of the 11 bills rendered by the respondents in relation to the first in time, there is a delay two years and 10 months and the last in time one year and 11 months.  In par 24 of the applicant's written submissions, the delay in relation to each bill is set out.  The respondents accept the table is accurate.  By any measure, the delay in this case is substantial.

10. To understand the applicant's submissions in relation to the reasons for the delay, it is necessary to say something more about the Federal Court proceedings.  These proceedings were settled pursuant to a Deed of Settlement which is attachment 'SGL15' to the affidavit of Mr Leslie.  Immediately prior to the Deed of Settlement, the position of the applicant in these proceedings was as set out in attachment 'SGL13' to Mr Leslie's affidavit.  She sought a contribution of $250,000 towards her legal fees from another party to the Federal Court proceedings.  That claim for contribution was rejected by the other parties.

11. The settlement of the Federal Court proceedings involved a payment to the applicant of $50,000 within 28 days and the issue to her of shares in Atrum Coal to the value of $100,000.  This was represented by the issue of just over 203,000 shares in Atrum Coal.  These shares were to be held in escrow for a period of three months. 

12. It seems clear that the applicant intended to use the proceeds of the sale of these shares to settle the respondents' accounts.  On the day the shares came out of escrow, they had a trading value of 71 cents.  The sale of the shares as at that date would have allowed the applicant to discharge her debt to the respondents.  But the applicant did not sell the shares.  Three months after the shares came out of escrow, their price fell below the price required to pay the applicant's indebtedness to the respondents in full.  In fact, the Atrum Coal shares continue their downward spiral.  By 8 March 2019, the trading price was 22 cents.  It is the respondents' position that the applicant visited upon herself the circumstances which lead to her inability to pay the respondents' bills.  Certainly at this stage, there had been no suggestion by the applicant she thought the bills were too high or that she would not ultimately make payment.  The applicant does not deal with this in her affidavit material.  In any event, what can be said is that the delay up until the end of September 2016 (a date after which the escrow period had ended and which allows a reasonable period for the sale of the shares) is explained.  It is the period thereafter which needs explanation.

13. The applicant offers two reasons for the delay and these are found in pars 59 and 60 of her first affidavit.  The first reason is an assumption that all costs would be paid by a third party.  But by December 2016, the applicant was aware the third party would not meet her costs.  In other words, the applicant knew well within the time within which she could have had the costs assessed.  They were to her account and her account alone.  It is difficult to see how this could provide a reason for the delay.

14. The second reason offered is that the respondents - and in particular the first respondent, did not pursue payment.  In fact, the evidence shows the first respondent was in frequent contact with the applicant and was seeking payment of their bills.  In any event, the fact the respondents were not pressing the applicant for payment of their accounts (assuming that be the case), is no reason for the applicant not to move to have the costs assessed.  She either thought those costs were unreasonable or she was sufficiently concerned about whether they were reasonable to take steps for an assessment.  Either way, that decision could not be informed by inaction on the part of the respondents.  The alleged inaction by the respondents even if made out, does not explain the applicant's delay.

15. In par 3.1 of her first affidavit, the applicant claims the respondents' costs were excessive.  I would note however, that the Federal Court proceedings were listed for a 10 day trial in the Federal Court on liability only.  The trial was listed and commenced just over eight months after the originating process was filed.  That suggests significant work was undertaken by the respondents.  But it is unnecessary for me to develop this issue any further.  It is sufficient if I say I am not satisfied on the evidence presented by the applicant I could make a finding it was arguable the bills rendered were unreasonable. 

16. In the circumstances then I will dismiss the application for the extension of time.  The applicant ought pay the respondents' costs of the application including the reserved costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

TM

Court Officer

22 DECEMBER 2022