Strudwick & Baker Johnson

[1996] FamCA 122

STRUDWICK v BAKER JOHNSON

(1996) FLC ¶92-683

Other publishers' citations: (1996) 20 FamLR 789 (1996) 130 FLR 113

Family Court of Australia at Brisbane 

Judgment delivered 7 March 1996 

Appearances: Mr N McGregor of counsel (instructed by Brian McMahon & Co) for the Respondent Husband; Mr Matthews of counsel (instructed by Baker Johnson) for the Applicant Solicitors.

Before: Lindenmayer J.

Full text of judgment below

Lindenmayer J:

1 Introduction

1.1 This matter comes before me by way of review of a Registrar's decision, that of Senior Registrar Dittman of 6 December 1995, whereby he granted the respondent husband an extension of time for service of a Notice Disputing Costs upon the applicant solicitors.

1.2 The husband brought two applications before the Registrar. The first application, filed on 9 October 1995, sought orders that the time limit for the filing of the Notice Disputing Costs in respect of the account of Baker Johnson dated 25 August 1995 be extended. The second application, filed by leave on 15 November 1995, sought orders, firstly, that the time for service on Baker Johnson of the Notice Disputing Costs be extended or, in the alternative, that compliance with requirements of Order 38, Rule 7 [sic] be dispensed with, and, secondly, that Baker Johnson pay the husband's costs of and incidental to this application.

2 Background Facts

2.1 The respondent husband had instructed the firm of Baker Johnson, Lawyers, the applicant Solicitors, to act on his behalf in matrimonial proceedings instituted by his former wife. The husband terminated the Solicitors' services on 22 August 1995. He then received correspondence from the Solicitors on 28 August which included a Memorandum of Costs and Outlays incurred in acting on the husband's behalf, amounting to $7210, and a Notice of Rights in the form approved by the Principal Registrar of the Court pursuant to Order 38, Rule 38(2) of the Family Law Rules. The notice details the right of a client to request a detailed account from the solicitor and the procedures that must be followed in order to dispute an account for costs given by a solicitor.

2.2 Upon receiving the Memorandum of Costs, the husband decided to dispute the amount owing. He consulted another solicitor, Daryl Barker of Barker Duffy, who assisted the husband to complete the required form and, on 29 August 1995, the husband presented for filing at the Family Court Registry in Brisbane a Notice Disputing Costs in the prescribed Form 57 disputing the whole of the account for costs. Pursuant to Order 38, Rule 38(7), a copy of the notice must be served on the solicitor who rendered the disputed account on the day on which it is filed. However, notwithstanding this requirement, the Registry did not return a sealed copy of the Notice Disputing Costs to the husband on that day. The husband was advised that the form would not be processed immediately and that sealed copies of the notice would be posted to him in seven to ten days.

2.3 The husband did not receive the notice within that time and, on 25 September 1995, the last day on which the husband could have filed and served a Notice Disputing Costs within the 28 day time limit under Order 38, Rule 38(6), he inquired at the Registry as to the whereabouts of the form presented on 29 August 1995. The information received by the husband was that the form had been lost within the Registry, there being no record on the file of the notice.

2.4 On 29 September 1995, the Solicitors filed a plaint in the District Court of Queensland claiming the sum of $7210 for the provision of legal services. At the same time, they issued a summons for a Mareva Injunction and a Judgment Summons on the basis that there had been no indication from the husband that he would be disputing the amount of their Memorandum of Costs.

2.5 The proceedings seeking the Mareva Injunction were pursued as the solicitors were aware that the husband was to receive a sum by way of damages from a personal injuries action brought by the husband and which had been settled. Those proceedings were adjourned in the District Court on the giving of an undertaking by the husband that he would not dispose of or deal with his assets wherever situated other than for ordinary living expenses until 4.30 p.m. on 10 October 1995 or earlier order.

2.6 The husband instructed his present solicitor on 2 October 1995, following service of the District Court proceedings on 30 September 1995 returnable on 3 October 1995. It was not until this date, 3 October 1995, that the Solicitors had any degree of knowledge that the husband intended to dispute the Memorandum of Costs delivered on 28 August 1995. Notice to the solicitors was given by way of an affidavit in the District Court filed on 3 October 1995, to which the Notice Disputing Costs was annexed, some eight days after the expiration of the time allowed for filing and service of a Notice Disputing Costs under Order 38, Rules 38(6) and (7).

2.7 On 10 October, the proceedings in the District Court were heard by Her Honour Judge O'Sullivan. The application for summary judgment was adjourned to a date to be fixed and the summons for a Mareva Injunction was dismissed. The costs of both of those proceedings were reserved. At approximately the same time, the wife in the proceedings against the husband in the Family Court also sought orders to restrain the husband from dealing with the proceeds of his personal injuries action.

2.8 On approximately 28 October 1995, the husband received a sealed Notice Disputing Costs from the Family Court, being the Form 57 he had presented for filing on 29 August 1995. However, it bore a filing date of 24 October 1995. The husband's solicitor received correspondence from the Family Court Registry confirming that the Notice Disputing Costs was in fact received in the Registry on 29 August 1995 although not filed until 24 October 1995. No explanation was provided by the Registry for the delay in filing the Notice, the conclusion being drawn that the form had been lost within the Registry.

3 Delivery of an ``account''

3.1 Counsel for the husband has argued that no account for costs was, in fact, received by the husband. Order 38, Rule 38(9) prevents a solicitor from commencing an action to recover costs until twenty-eight days after they have served an ``account'' for those costs and a notice of rights. The account forwarded by the Solicitors was a lump sum account, giving no detail of costs incurred with respect to individual items. Counsel referred to two decisions of the Court which related to the same case; Rehfeld and Rehfeld (1986) FLC ¶91-725, at first instance, and Gillis Delaney v Rehfeld (1986) FLC ¶91-750, where the Full Court on appeal upheld the decision of Hogan J at first instance. These decisions, dealing with accounts in taxable form under the former Order 38, Rule 20, established that an account must comply with certain requirements, including sufficient details for taxation, and sufficient details to enable the client to make a conclusion whether to dispute all, or any, of the account.

3.2 However, the relevant rules, following amendments in 1990, no longer require a detailed account to be delivered in the first instance as a pre-condition of recovery. Instead, pursuant to Order 38, Rule 38(3) and (4), if a detailed account is not given, the client may request a detailed account of the work done and disbursements incurred within 28 days of service upon the client of the notice of rights or the account, whichever is the later event. Therefore, it is sufficient for a lump sum account to be served upon the client, and it is only if the client requests a detailed account that one is required to be provided by the solicitor.

4 ``Filing'' of a Document

4.1 Under Order 1, Rule 4(1) of the Family Law Rules, ``filed'' means ``filed in accordance with Order 2, Rule 4'' and ``file'' and ``filing'' have a corresponding meaning. The relevant provision of the Family Law Rules dealing with the filing of documents is therefore Order 2, Rule 4. The Senior Registrar found that, within the meaning of Order 2, Rule 4(1), once a document was lodged in the appropriate Registry of the Court, it was filed. However, this rule has been amended recently by SR 1995 No. 371, Rule 7 which took effect from 8 January 1996.

Relevant rule to be applied

4.2 The rules of the Court, at Order 36A, Rule 7(4), require that the review of an exercise of delegated power by a Registrar be a hearing de novo. The facts and law the court must have regard to are those existing at the date of the rehearing and not at the original hearing: Harris and Caladine (1991) FLC ¶92-217 per McHugh J at 78,509; and c.f. Robinson and Willis (1982) FLC ¶91-215 per Fogarty J at 77,163. Therefore, the relevant rule to be applied is not the rule that applied when the matter came for determination before the Registrar. Instead, the rule as it stands at the date of the review must be applied. The relevant rule now states:

``4(1) A document is filed in, or in connection with, proceedings if:

(a) it is delivered to the filing registry; or

(b) with the leave of a court or a Registrar — it is delivered to a registry that is appropriate in the circumstances;

and the document is accepted for filing by the court or a Registrar.''

4.3 The remainder of the rule, as relevant to these proceedings, states:

``4(2)...

4(3) The Registrar shall cause the date of filing to be marked on every document that is filed.

4(4) Where a document has been filed, each copy of the document for service shall bear the seal of the court in which the document was filed.

4(5)...''

Meaning of ``filing''

4.4 Counsel for the Solicitors submitted that there is a distinction within the rule between the act of lodgement or lodging a document in the Registry and the act of filing, which is the act of the Registrar to accept and formalise a document as part of the record of the court. This distinction was also made, when applying the rule as it then stood, by Butler J in Gornalle and Gornalle (1993) FLC ¶92-334.

4.5 That case concerned an application under section 44(3) of the Family Law Act 1975. On the last day for filing an application under section 79 of the Act, the husband consulted a solicitor who had the husband sign and declare an application under that section. This was required to be supported by an affidavit. However, even though there was no affidavit in support of the application, the application was accepted by the Registry on the solicitor's oral undertaking to file one, and a date stamp placed on the application. The affidavit was not filed until some five weeks later, although a Registry officer confirmed that the filing and content of the application was proper. The application then remained dormant for some time and was not served on the wife until over one year after presenting the application in the Registry. The husband later applied for an extension of time for service and that the service effected upon the wife be deemed to be good service.

4.6 Butler J found that, upon a careful reading of the Family Law Rules, there is a distinction between the act of lodging a document and the act of filing a document. Lodgment was found to be a necessary act for filing but the Registrar may or may not accept a document for filing. The duty of the Registrar to accept the application for filing did not arise until it was accompanied by the required supporting affidavit. Therefore, Butler J found that there was no act of ``filing'' the application until it was accepted by the Registrar and it bore the seal of the court as required by subrule (4).

4.7 That case differs from the present application in several respects. The relevant rule, as it now stands, also states that the document must be delivered to the filing registry and accepted for filing by the court or a Registrar before it will be technically filed. However, the rule, as amended, no longer expressly provides for a distinction, on the face of the rule, to be drawn between the act of lodging a document for filing and the act of filing a document. In addition, in Gornalle and Gornalle (supra), the application to be filed under section 79 of the Act was defective in that it was not supported by an affidavit. The duty of the Registrar to file the document did not arise at that time but only arose when the affidavit was also lodged. In the present case, the application tendered by the husband for filing was not defective. It was only due to the Registry's lapse that the application was lost.

4.8 Under the rule, a document must be accepted for filing by ``the court or a Registrar''. In this case, the document was handed over the counter at the Family Court Registry to a filing or counter clerk. The reference to ``a Registrar'' causes some difficulty. On its face, and giving a strict definition to the term, it appears to be a reference to a person who holds the office of Registrar only. However, ``Registrar'' is defined in section 4(1) of the Family Law Act, and, in relation to a court, means ``the principal officer of the court or any other appropriate officer of the court''. Order 36, Rule 1(2) also states that ``where a Registrar is required or able to do an act, not involving an exercise of a power of the court, it is sufficient if it is done on behalf of the Registrar by another officer of the court or by a clerk in the office of the Registrar''.

4.9 The practice of the Court, in relation to the filing of documents, is that most documents presented for filing are accepted for filing, or a decision made as to whether to accept a document for filing, by the filing or counter clerk. In addition, some counter clerks have delegated authority under the Rules to accept specific types of documents, such as applications to abridge time or applications for the enforcement of orders. It is only if a matter is complex, difficult or unusual that it is referred to a Registrar, in the strict sense of the word, or if dissatisfaction is expressed with the manner in which a counter clerk has dealt with a particular document when it is presented for filing. In particular, in relation to Notices Disputing Costs, the practice of the Court is to accept automatically all Notices, to which an account served by a solicitor is affixed, at the counter itself.

4.10 The practice of the Court is, therefore, that filing is not necessarily undertaken by an actual Registrar. Indeed, it is rare for a matter to be referred to a Registrar. Instead, in accordance with the practice of the Court, it appears that ``Registrar'', for the purpose of the filing of documents, is treated as a generic term and does not mean only those persons who hold the office of Registrar but extends to those persons acting under the authority of a Registrar. This also accords with the definitions given by both the Family Law Act, and the Rules made under the Act, which provide for the exercise of certain functions of a Registrar to be undertaken by another officer of the Court. The effect of this is that, in relation to most documents, excluding certain specific examples, some of which are mentioned above, the act of filing is carried out completely by a counter clerk acting under the delegated authority of a Registrar, and not a Registrar him or herself. Therefore, ``filing'' is generally completed once the document is ``accepted for filing'' by a clerk who has authority under the Rules to carry out that function.

4.11 Here, the document was tendered to the counter clerk and accepted by the clerk, although the husband was told that it would not be processed immediately. It is beyond dispute that the document was delivered to the filing registry by the husband. No indication was given to him by the Registry of a need to refer the Notice to a Registrar. Therefore, having regard to the advice given to the husband and the practice of the Court, I am satisfied that the document was filed on the date that it was handed to the counter clerk and taken without reservation, notwithstanding that the filing stamp was not affixed until a later date.

4.12 In ordinary cases, acceptance for filing will be implicit in the act of handing over a document and having it received by the filing staff without reservation. However, this general rule must be qualified. Acceptance for filing will not be implied if the person tendering a document for filing is advised that it will be referred to a Registrar or some other advice is given that it is not accepted for filing, such as if the document is defective in some way. Therefore, I conclude that the document was filed on 29 August 1995 when it was received into the Registry.

4.13 Order 2, Rules 4(3) and (4) prescribe procedural requirements in relation to documents which have been filed. Subrule (3) states that the date of filing is to be marked on every document filed. Under subrule (4), where a document has been filed, each copy of the document is to bear the seal of the court. However, these are merely rules for, respectively, record keeping and the authentication of documents. Although the document delivered by the husband to the Registry did not receive the filing stamp or the seal of the court at that time, both of which are generally affixed contemporaneously, the affixing of these stamps is not an integral part of the act of filing. They are consequences of the filing of a document but do not form part of the act of filing itself. Therefore, notwithstanding that the Notice Disputing Costs was not stamped at the time it was accepted for filing, it was nonetheless ``filed'' within the meaning of Order 2, Rule 4(1).

5 Application for extension of time for service

5.1 Although the Notice Disputing Costs was filed within the time limit prescribed by Order 38, Rule 38, a copy of the Notice must, under subrule (7), be served on the solicitor who rendered the account, on the day on which it is filed. In the present case, the document was filed on 29 August 1995. However, the Registry did not return a sealed copy at that time and, indeed, a copy was not returned to the husband for service until 28 October 1995. Therefore, the husband seeks orders that the time for service on the Solicitors be extended or that compliance with the requirements of Order 38, Rule 38(7) be dispensed with.

5.2 The Court is given no specific power by Order 38 of the Family Law Rules to extend the time for either filing or service of a notice disputing costs. However, there is a general provision in Order 3, Rule 3 empowering the Court or a Registrar to extend the time fixed by the Rules for doing any act or thing in relation to proceedings. This has been relied on by the Court on numerous occasions to extend the time within which certain acts or things may be done including the filing and service of Notices Disputing Costs. It was that provision which was relied upon by the Registrar in this case.

5.3 Counsel for the Solicitors has, however, argued at the review hearing (although not before the Registrar) that there is no power in the Court to extend the time to file or serve a Notice Disputing Costs on the ground that Order 38 forms a complete statutory code dealing with solicitor and client costs. By analogy, he relies on a recent decision of the High Court, David Grant & Co Pty Ltd (rec apptd) v. Westpac Banking Corporation (1995) 18 ACSR 225, dealing with the Corporations Law.

5.4 That case concerned applications to set aside statutory demands served upon the appellant companies under section 459G of the Corporations Law. The applications were filed and served after the expiration of the time limit, twenty-one days, contained in section 459G. This provision is a component of Part 5.4 which was inserted by amendment in 1992. The appellants sought an extension of the time for the making of the applications relying on section 1322(4)(d), which confers a broad authority upon the court to extend the period for the taking of any step under the Law, or, in the alternative, section 467A of the Law, which provides that an application under Part 5.4 must not be dismissed merely because of a defect or irregularity in the application.

5.5 As stated in the explanatory memorandum, which accompanied the bill for the 1992 amending Act, the function of Part 5.4 was to solve disputes relating to the service of statutory demands on the basis of commercial justice, and not technical deficiencies. It establishes a method whereby a creditor may serve a statutory demand upon a company under section 459E. If the company fails to comply with the demand within the period of twenty-one days, as prescribed by section 459F(2), or fails to apply for an order setting aside the demand in accordance with section 459G within twenty-one days after service of it, such failure may found an application that the company be wound up under section 459P. The Part also provides for a rebuttable presumption of insolvency to be raised if the failure of the company to comply with the demand occurred during the three months immediately preceding the filing of the application for winding up, or after its filing: section 459C(2). In so far as the application for winding up is based upon the failure to comply with the demand, it may not be opposed by the company except in very limited circumstances prescribed by the Law.

5.6 The High Court held that the provisions contained in Part 5.4 constitute a legislative scheme to deal quickly with issues that arise in relation to the solvency of a company without the interposition of disputes about debts, unless they are raised promptly, and at 231, confirmed the general principle, citing Gavan Duffy CJ and Dixon J in Anthony Hordern and Sons Ltd v. Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 at 7, that:

``When the Legislature explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised and the conditions and restrictions which must be observed, it excludes the operation of general expressions in the same instrument which might otherwise have been relied upon for the same power.''

5.7 In the case before the High Court, provision was made by the later and more specific sections contained in Part 5.4 for the making of this particular class of application. These provisions also attached a specific time limit within which such applications might be made.

5.8 The Court held that, as the legislation provided that the application ``may only'' be made within the 21 day period, it was inappropriate to treat the requirement in section 459G as supplemented or qualified by the operation of either section 1322(4) or section 467A and that, at 232:

``... the temporal requirements in sub- sections (2) and (3) of section 459G operate to define the jurisdiction of the court in respect of an application to set aside a statutory demand.''

Therefore, the Court found that there was no power to extend the period within which an application could be made to set aside the demand.

5.9 Counsel for the Solicitors in this application argued that, by analogy with the reasoning of the High Court, there is no power in this Court to extend the time for either filing or service of a Notice Disputing Costs in the absence of a specific provision contained within Order 38, on the basis that a substantive right is created in the solicitor if such a notice is not filed within time.

5.10 However, subrule (9) does not create a statutory right to sue in the solicitor. It merely curtails the right a solicitor has to recover his or her costs, stating that a ``solicitor shall not commence an action'' to recover costs unless certain requirements are met. In effect, Order 38, Rule 38(9) establishes a hurdle to be overcome and places a procedural limitation upon the right of a solicitor, in addition to the limitations prescribed by Rules 38(10) and (11). Once a solicitor has complied with these requirements, the Rules are silent with respect to the method by which the solicitor may seek to recover his or her costs and provide no rights in the solicitor with respect to taking action in the Family Court, except as provided by Order 38, Rule 42(4) following a taxation of a disputed bill.

5.11 The Family Court is not the exclusive Court for recovery of debts between solicitor and client arising out of family law proceedings. But, it is only after the requirements of the Rules have been satisfied that the solicitor may sue upon the account in the appropriate court of competent jurisdiction: see Re P's Bill of Costs (1982) FLC ¶91-255. For these reasons, the Rules do not create a substantive right in the solicitor to commence an action for the recovery of his or her costs. It merely prescribes the procedures which must be followed before recovery of costs may be sought, albeit in another court.

5.12 The other ground sought to be relied upon for denying the power in the Court to extend time for either filing or service of a Notice Disputing Costs under Order 3, Rule 3, is that Order 38 forms a similar exclusive code to that held to exist under the Corporations Law, in David Grant & Co Pty Ltd (rec apptd) v. Westpac Banking Corporation (supra). As stated above, the High Court in that case was dealing with a legislative scheme in relation to insolvency issues under the Corporations Law. The scheme involved a careful interrelationship of provisions by which a creditor could apply to have a company wound up if it failed to comply with a demand within a specific limitation as to time. The Court found that the right of the company to apply to set aside a demand served upon it was inherently subject to its being made within the time specified under the Part. Based on the relationship of all aspects of the scheme, found exclusively in Part 5.4, there was no power in a court, based on a general provision outside the Part, to extend the time specified.

5.13 It was recognised by Evatt CJ and Fogarty J in Re P's Bill of Costs (supra), at 77,418, that the Family Law Act and Regulations (as they then were) provided an exclusive code relating to disputed accounts between a solicitor and client incurred in proceedings under the Act. However, it is implicit in the statement of Evatt CJ and Fogarty J in that case, that the relevant regulation (now Order 38, Rule 38) must be read as part of the Rules in their entirety, not merely as one rule in isolation from the other rules enacted prescribing the entire practice and procedure of the Court.

5.14 Therefore, I consider that Order 38 cannot be read as a distinct and entirely separate provision. It must be read together with both the Act and the other rules and regulations. Despite the High Court authority discussed above, there is no proper basis on which to restrict the power in the Court to extend the time for service of a Notice Disputing Costs under Order 3, Rule 3. The case before the High Court depended upon the interpretation of the whole scheme, and the relationship that existed between the various elements of that scheme, given that it was inserted to overcome a particular problem that existed under the previous law. Order 38 was not inserted into the Rules to overcome a particular problem, nor can it be said that it forms a distinct scheme within the Rules.

5.15 Instead, in order to give meaning and context to the provision, as it operates in relation to disputed accounts between solicitors and their clients, it must be read as merely one aspect of the Rules which cannot operate independently and exclusively from the other provisions contained within the Rules, including the ability of the Court or a Registrar to extend the time for doing any act or thing under Order 3, Rule 3.

5.16 It is well established that the practice of the Court, subject to the proper exercise of discretion, is to utilise the power in Order 3, Rule 3 to extend the time for the filing or serving of a Notice Disputing Costs, see, for example, Marinko and Marinko (1985) FLC ¶ 91-609. The purpose and meaning of this rule is to provide the Court with a wide discretion to allow a party to do out of time what should have been done within time, and there have been many instances in which this provision has been used by the court in this manner. The requirements of Order 38 do not operate to circumscribe the power of the court to extend time under Order 3, Rule 3. Therefore, the Court has sufficient power to extend the period within which a Notice Disputing Costs may be served under Order 38, Rule 38(7).

6 Exercise of Discretion to Grant Leave

6.1 The discretion granted to the Court under Order 3, Rule 3 is wide and unfettered and the Court may extend or shorten time on any terms it thinks fit. However, the Court will not exercise its discretion automatically. The discretion must be exercised so as to do justice between the parties: see Prowse and Prowse (1995) FLC ¶92-557; Gallo v. Dawson (1990) 93 ALR 49. Therefore, the applicant must establish positive reasons for the exercise of the discretion: see Re O'Toole; Taylor and O'Toole (1992) FLC ¶92-285.

6.2 Order 3, Rule 3 establishes no preconditions to the exercise of the power of the Court to extend time. The rules are silent as to the matters which the court or Registrar is required to take into account upon the hearing of an application to extend time to either file or serve a Notice Disputing Costs. However, in McMahon and McMahon (1976) FLC ¶90-038, and later in Lawecki v Marcel Kalfus & Co (1985) FLC ¶91-644 at page 80,193, the Court held that certain matters are relevant to the exercise of the discretion. The matters enumerated by the Full Court as relevant are the length of delay and the reasons for it, the hardship (if any) which the applicant would suffer if the extension were not granted, and the prejudice (if any) which the respondent would suffer if leave were granted. These are merely factors relevant to the exercise of the discretion and must be considered as part of all of the surrounding circumstances of the case, including what the justice of the case requires: Tormsen and Tormsen (1993) FLC ¶92-392.

Delay

6.3 In the exercise of any discretion to extend the time for the doing of any act or thing, it has been consistently held by the Court that the extent of the delay by the applicant, and the reasons for it, are relevant matters to be taken into account. The husband, in seeking to dispute the account served upon him by the Solicitors, acted diligently and without delay. Indeed, it was due to no fault of his own that the Notice Disputing Costs was not served upon the Solicitors within the time required under Order 38, Rule 38(7), it being an undisputed fact that the Notice Disputing Costs filed by the husband was lost by the Registry.

6.4 The husband deposes to having limited reading ability and that he understood little of what was contained in the Notice of Rights served upon him by the Solicitors. Instead, with minimal legal advice at that time, he relied upon the advice given to him by Registry staff when they advised him that sealed copies for service would be sent to him within seven to ten days. I find that the husband has offered an adequate explanation for the short delay existing between the time he filed the documents and the time service has been sought.

Hardship to Husband

6.5 The husband must also establish that he would suffer hardship if his application for leave were not granted. Whether hardship exists is a question of degree and will depend upon all of the circumstances of the case, including the reasonableness of the husband's desire to tax the Bill of Costs and whether there is a substantial or significant prospect of success.

6.6 The Memorandum of Costs served upon the husband by the Solicitors is not a detailed account and does not enable the husband to identify readily the basis of the amounts charged or how they relate to the work specified. The husband deposes that he does not believe he signed any costs agreement with the Solicitors, and that, on the basis of interim advice given by the Solicitors as to the costs incurred on his behalf, he believes the amount charged for work following that advice is excessive. Given the circumstances of the case, there is a reasonable likelihood that the husband would suffer hardship if leave were not granted in this application.

Prejudice to Solicitors

6.7 Any prejudice arising, due to the delay by the husband in serving his Notice Disputing Costs upon the Solicitors, must also be examined. The Solicitors received no indication from the husband that he would dispute the amount of their Memorandum of Costs until 3 October 1995, when an affidavit, to which the Notice Disputing Costs was annexed, was filed by the husband in the District Court. As a result, the Solicitors had filed a plaint in the District Court on 29 September 1995 claiming the sum owing in respect of legal services provided to the husband. The Solicitors assert that they have suffered significant prejudice flowing from the husband's delay in the form of costs incurred by them in prosecuting those proceedings.

6.8 In order to be relevant, the prejudice must be of such a kind as cannot be compensated by an order of the Court as to costs or otherwise. Counsel for the Solicitors has submitted that, despite the possibility of an order for costs being made in the Solicitors' favour, costs being reserved in the District Court proceedings, the Solicitors will still suffer prejudice as they are likely to recover costs on a party and party basis only. However, any prejudice flowing to the Solicitors by way of costs has not arisen out of the husband's default. In the circumstances, the husband acted diligently and to the best of his ability.

6.9 For the reasons above, I propose to grant the husband's application. Considering all relevant factors, an adequate explanation has been offered by the husband for the delay that exists and there is a likelihood that the husband will suffer hardship if leave is not granted. To require strict compliance with Order 38 would cause injustice, given that the major cause for delay was the Registry's lapse. In these circumstances, the prejudice to the Solicitors arising from the delay is not so great as to call for an exercise of discretion adverse to the husband.

7 Costs

7.1 The Solicitors, by their application, also seek the review by the Court of the Registrar's exercise of power in relation to the costs of the proceedings before him. He ordered that the Solicitors pay the husband's costs of and incidental to his application incurred on and from 14 November 1995. He made the order in that form on the basis that, firstly, the Solicitors had been ``wholly unsuccessful'' in the proceedings (section 117(2A)(e)), and secondly, on the basis that, by letter dated 13 November 1995, the husband informed the Solicitors of the fact that he had received a letter from the Court acknowledging that he had presented the Notice Disputing Costs for filing in the Registry on 29 August 1995, and invited them to consent to an extension of time for the service of that Notice on them in light of that acknowledgment. As the Solicitors maintained their opposition to that application notwithstanding the receipt of that letter, the Registrar considered it appropriate that they pay the husband's costs of his application incurred after that date. In doing so, he appears to have treated the husband's letter of 13 November 1995 as ``an offer in writing to settle the proceedings'', within section 117(2A)(f), as he referred to that paragraph as being applicable, along with paragraph (e).

7.2 If the Solicitors' review application were to be successful in relation to the merits, it would undoubtedly also have been successful on the issue of costs. However, as I have concluded that it must fail on the substantive issue, I must consider as a separate issue whether the order for costs made by the Registrar should stand, or whether, in the exercise of my discretion, a different order should be made in relation to the costs below.

7.3 In support of his submission that the Registrar's order for costs was an inappropriate exercise of discretion, even in the context of an unsuccessful opposition to the husband's application, Counsel for the Solicitors submitted that an extension of time is not something which can strictly be granted ``by consent'' of the parties, as it requires an exercise of discretion by the Court to relieve a party from the consequences of non-compliance with a limitation period prescribed by the Act or Rules.

7.4 That may very well be true in respect of a limitation imposed by Statute in such terms that failure to commence proceedings within the period prescribed is an absolute bar to relief in the absence of leave granted by the Court, which leave may only be granted in specific limited circumstances (as in sections 44(3) and (4) of the Act). However, I doubt very much that the same holds true in respect of a limitation imposed by rules of court upon the time for service of a document inter partes, particularly when, as here, the rules lay down no conditions precedent to the grant of an extension of time to comply with the limiting rule.

7.5 In this case, the Registrar held (as have I, albeit on a slightly different basis) that the husband filed his Notice Disputing Costs within the time prescribed by Order 38, Rule 38(6), and all he sought, and needed to seek, was an extension of the time limited by Order 38, Rule 38(7) for the service of that document upon the Solicitors. I have no doubt that the Solicitors could have consented to such an order, and if they had done so, the Court would have made the order with little more than formal enquiry about the basis of the application and the power of the Court to make an order in the terms consented to. The fact that the Solicitors withheld their consent, and indeed actually opposed the application, which then succeeded, are strong grounds for ordering them to pay at least some part of the husband's costs of his application. At the very least, he should have the difference between the costs incurred in pursuing his application as a defended application and what his costs would have been if the Solicitors had consented to the order sought, and signified that consent upon receipt of his letter of 13 November 1995.

7.6 The remaining question is whether, as the Registrar determined, the husband should be awarded all his costs after 13 November 1995, or only the difference between his defended and undefended costs.

7.7 In respect of that issue, it is a little difficult to find circumstances justifying an order for the Solicitors to pay all of the husband's costs after 13 November 1995. After all, the Solicitors were even less responsible than the husband for his failure to comply with the relevant rules. Whilst he might be regarded as being responsible to the extent that he failed to pursue the matter vigorously enough with the court to ensure that his Notice Disputing Costs was processed within the time limit imposed by the rules so that he could then serve it in accordance with Order 38, Rule 38(7), no responsibility whatsoever can be placed upon the Solicitors for his failure to do so. Accordingly, he was bound to make an application to the Court in any event for an extension of time. Nothing the Solicitors did put him in that position, and nothing they could, or should, have done could have relieved him of that obligation. All that they could have done, once they knew the circumstances, was to consent to the order he sought.

7.8 Accordingly, I conclude that the proper order to be made in respect of the costs of the proceedings before the Registrar is that the Solicitors pay to the husband the difference between the costs incurred by him in relation to his application on and from 14 November 1995, and the costs which would have been incurred by him on and from that date if the Solicitors had signified on that date their willingness to consent to the orders sought by him and had in fact consented thereto when the matter first came before the Court thereafter.

7.9 As to the costs of the review proceedings, no submissions were made on this issue at the time of the hearing, so a determination thereon must await any application and submissions to be made after the delivery of this judgment.

8 Orders

8.1 For the foregoing reasons, I propose to make the following orders:

1. That the application by the Other Party, Baker Johnson Lawyers, for the review of the exercise of judicial power by Registrar Dittman in making order number (1) of the orders which he made on 6 December 1995, be dismissed, and the said order be and is hereby confirmed.

2. That the application by the Other Party for a review of the exercise of judicial power by Registrar Dittman in making order number (2) of the orders which he made on 6 December 1995 (as to costs) be granted, and the said order be and is hereby set aside; and,

3. That in lieu of the said order number (2) of 6 December 1995, it is ordered that the Other Party pay to the husband the difference between the taxed costs incurred by him of and incidental to the proceedings on and from 14 November 1995, and the taxed costs which would have been incurred by him on and from that date if the Other Party had signified to him on that date its willingness to consent to the orders sought by him in the proceedings and had in fact consented thereto when the proceedings first came before the court thereafter.