JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA CITATION : McGREADY -v- LAVAN LEGAL [2014] WASC 124 CORAM : MASTER SANDERSON HEARD : 12 MARCH 2014 DELIVERED : 10 APRIL 2014 FILE NO/S : LPA 36 of 2013 BETWEEN : JOANNE LESLEY JANE McGREADY Applicant
AND
LAVAN LEGAL
Respondent
Catchwords:
Costs - Application for extension of time to have bills of costs assessed - Turns on own facts
Legislation:
Nil
Result:
Application dismissed
Category: B
Representation:
Counsel:
Applicant : Ms J L McGready
Respondent : Mr D P Butler
Solicitors:
Applicant : In person
Respondent : Lavan Legal
Case(s) referred to in judgment(s):Monopak Pty Ltd v Maxim Litigation Consultants [2007] WASC 112Webb v Bateman (Unreported, WASC, Library No 6305, 27 May 1986)1 MASTER SANDERSON: By chamber summons filed 29 November 2013 the applicant sought an extension of time in which to have accounts for legal services rendered by the respondent assessed out of time. The accounts were rendered between May 2007 and May 2010. The respondent opposed the application. 2 The facts giving rise to the application are conveniently set out in the affidavit of Robert David Shaw sworn 17 January 2014. They can be summarised in this way. In or around April 2007 the applicant engaged the respondent to provide legal representation in respect of Supreme Court of Western Australia proceedings. On or about 3 April 2007 the respondent sent to the applicant a 'contract for services'. This document was referred to by both parties as the 'costs agreement' and that is the description I will use. The costs agreement was executed by the applicant on 12 April 2007. In or around October 2007 the applicant instructed the respondent to act in respect of proceedings in the District Court of Western Australia. It is in relation to both these matters accounts were rendered by the respondent.
3 A copy of the costs agreement appears as part of attachment RDS 1 to Mr Shaw's affidavit. It is in what might be described as a standard form. It anticipates charging by a time costing method. The hourly rates for particular persons are specified. On the first page of the costs agreement under the heading 'estimate of costs, scale costs and recoverable costs', there is a clear explanation of what is meant by various terms and by reference to a schedule an estimate of the costs is given. In this case the estimate was $5,000 plus GST. The applicant takes no issue with the terms of this costs agreement nor does she suggest she did not understand the agreement she was entering into.
4 Although it was not required to do so by the costs agreement, from time to time the respondent did update its costs estimates. In particular the respondent wrote to the applicant on 19 March 2010 providing an updated estimate of costs which significantly increased the amount the respondent estimated the actions would cost the applicant. A copy of this letter appears as attachment RDS 7 to Mr Shaw's affidavit.
5 The respondent has continually sort to recover from the applicant their outstanding legal fees. On 31 October 2013 the respondent commenced proceedings against the applicant in the District Court claiming payment of fees. It was subsequent to the commencement of this action the present application was made.
6 Section 295 of the Legal Profession Act 2008 (WA) governs the assessment of costs on an application of a client of a legal practice. Pursuant to s 295(6) of the act, an application by a client must be made within 12 months of the bill being given or, if a bill was not given nor a request made for one, when the costs were paid. Pursuant to s 296(7) of the act an application to assess costs out of time may be dealt with by the taxing officer if the Supreme Court determines after having regard to the delay and the reasons for the delay it is just and fair for the application to be assessed.
7 In Webb v Bateman (Unreported, WASC, Library No 6305, 27 May 1986) Franklyn J set out the principles that are applicable to an application for an extension of time to tax a bill of costs. They are:
(1) the reasons for the delay; (2) whether there are valid reasons for believing that a refusal to enlarge time might result in injustice to the client;
(3) whether there is evidence that the bill might be excessive;
(4) the nature and degree of prejudice to the practitioner; and
(5) the practitioner's reasons for opposing the enlargement of time.
8 This decision has been consistently followed. However, in Monopak Pty Ltd v Maxim Litigation Consultants [2007] WASC 112 Master Newnes (as his Honour then was) while adopting principles set out by Franklyn J in Webb determined two further matters should be taken into account. First, the master noted the purpose of the relevant provisions of the act is to protect the client against excessive charges by a practitioner and to enable a client to be satisfied that bills of costs are not excessive whilst imposing time limits to prevent a client from unfairly taking advantage of the provisions to delay the obligation to pay proper costs and to avoid frivolous objection. Second, he noted the criteria set out by Franklyn J in Webb were not immutable or exhaustive and in each case it will be a question of determining what is in the interests of justice in the particular circumstances of the case. 9 In support of the application the applicant filed a lengthy affidavit which was sworn 14 November 2013. She also filed a supplementary affidavit on 14 February 2014. I have taken both of these affidavits into account in determining the application. Turning first to the question of delay, between par 5 and par 12 of her first affidavit, the applicant sets out a number of reasons for the delay. I will quote those paragraphs of her affidavit in full.
5. My delay in applying for an assessment of Lavan Legal's (Lavan) costs is closely related to the reasons in no order of importance. 6. The delays caused throughout the litigation itself on which those costs are based.
7. My understanding of how I thought those costs could/would be recovered, if I was ultimately successful.
8. My understanding of the firms expectations of how the initial and agreed payment arrangement would be applied if and as, the action unfolded.
9. My time and energy being focussed on attempts to have the costs awarded to me enforced.
10. The demands of having to defend a second action in which the same plaintiff is attempting to re-litigate the claim that was dismissed in the first action.
11. My initial experience with legal representation and costs in 2005-2007.
12. My limited and as it were inaccurate, understanding of the assessment of legal costs and how it is applied to solicitor/client costs as opposed to party/party costs.
10 Between par 13 and par 391 of her first affidavit the applicant expands upon her reasons for the delay in applying for a costs assessment. With respect to the applicant (who drafted the affidavit herself and represented herself at the hearing) it is somewhat difficult to make out a consistent thread in her evidence. What the affidavit does is recount a fairly lengthy history of the engagement of the respondent. There can be no doubt the dispute in which she was involved with a Mr Alvaro took a great deal of her time and the delays which appear to have happened from time to time engendered a good deal of frustration. But none of that explains why, when accounts were received between May 2007 and May 2010 the applicant took no steps to have the costs assessed. The evidence shows she was in frequent contact with various members of the respondent firm. Furthermore, from time to time the applicant appears to have taken advice from solicitors other than the respondent in relation to the fees. At par 295 of her first affidavit the applicant says she obtained advice from Ms Sonia Edwards. In January 2011 she engaged Mr Arthur Metaxas to advise her in relation to fees. In her affidavit she says nothing as to the advice she was given about her right to have the bills assessed. 11 Having considered all of the applicant's evidence, I am not satisfied there is any satisfactory explanation for the delay. While I accept the litigation in which she was involved captured her attention and was time consuming that does not in and of itself explain why she took no action in relation to the bills. She did receive independent legal advice. There is no explanation as to why armed with this independent advice she did not move to have the costs assessed. The failure to adequately explain the delay is a factor which, weighed in the balance, tells against the applicant.
12 The second question then, is whether a refusal to enlarge time would visit an injustice on the applicant. It is difficult to see how that can be the case. She entered into the costs agreement with the respondent and she was aware of the basis upon which she was to be charged. From time to time the respondent updated its assessment of the costs. It is apparent the respondent made some attempts to negotiate payment of its accounts with the applicant: see Mr Shaw's affidavit, in particular par 31 - par 39. Furthermore, the applicant has had ample opportunity to apply for an assessment. The last of the bills was rendered in May 2010. It was over three years from the date the last bill was rendered that she made this application - and it was only made after proceedings were issued in the District Court. From time to time she has had advice in relation to the bills rendered by the respondent. Repayment options were canvassed by the respondent and these options would have eased the burden on the applicant.
13 There is one further matter which should be mentioned. The respondent maintains that it has performed work for the applicant for which it has not charged her. It puts the value of this work at approximately $30,000: see par 10 of Mr Shaw's affidavit. There is no evidence from the applicant challenging this position and it should be accepted. Taking that into account and all of the other matters I have mentioned it seems to me there is no basis for concluding the refusal of this application would visit an injustice on the applicant. Consideration of this matter favours the respondent.
14 The third matter to consider is whether the bills rendered by the respondent are excessive. There is nothing in the evidence to suggest that is the case. It must be acknowledged that the amount of the bills given the nature of the litigation is significant. It would also appear that at least three solicitors consulted by the applicant reached the view, at least by implication, the accounts might be excessive. But there is nothing in the evidence which is definite. Furthermore the independent solicitors when consulted appear not to have been able to indicate precisely why the bills might be regarded as excessive. On the other hand when updated estimates were provided by the respondent an explanation for the increased costs was provided. The applicant appears never having to have challenged those explanations. On balance then there is nothing to indicate the costs might be excessive. Once again, this is a factor which favours the respondent's position.
15 There is nothing in the evidence to suggest an assessment of costs now will prejudice the practitioner. They appear to have maintained proper records and although there may have been some change in personnel that should not adversely affect their position. If an assessment is undertaken it will prevent the District Court action proceeding. But given the delay up to this point a further limited delay is unlikely to make much difference one way or another. Consideration of this matter favours neither one side nor the other.
16 On the evidence the respondent opposes the application because it says the applicant has had ample opportunity to have the bills assessed and any extension of time is simply unwarranted. That is not an unreasonable position to take. It cannot be suggested for instance the respondent has anything to hide - there is no evidence to that effect. Consideration of this issue once again does not favour one side or the other.
17 This does not appear to be a case where the objections taken by the applicant are frivolous. It is difficult to see on the evidence what her complaint about the bills might be. But it must be acknowledged the accounts are significant and the litigation in which she was involved does not appear to have achieved its end. The applicant obtained independent legal advice in relation to the bills and there is nothing in the evidence to suggest the bills are excessive. There has been a lengthy delay in making this application and the respondent is entitled to rely on what might be described as the limitation provisions in the legislation. In assessing the matter in the light of the first principle enunciated by Master Newnes there would not seem to be any compelling factor which would lead an extension to be granted in the interests of justice.
18 Nor is there any other factor which should be taken into account in assessing the application. The applicant appears to be both intelligent and articulate. She presented her case both in her written and oral submissions with admirable clarity. She clearly understood the process and how the system operated - perhaps lessons learned through bitter experience. But it could not be said she was naïve or that she did not understand her entitlement to have these accounts assessed.
19 Weighed in the balance this is a clear case where an extension ought be refused. The most important factor is the delay and the lack of explanation for that delay. Furthermore, there is no evidence the bills are excessive - indeed the evidence suggests they are conservative. Against those factors there is nothing weighing in the applicant's favour which would suggest an extension is warranted. I am satisfied it would not be in the interests of justice to grant such an extension.
20 The application will be dismissed. The applicant should pay the respondent's costs of the application.