Territory v Dirkis

[2021] ACTSC 29

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:	The Public Trustee and Guardian of the Australian Capital Territory v Dirkis
Citation:	[2021] ACTSC 29
Hearing Date:	23 February 2021
Decision Date:	23 February 2021
Before:	Elkaim J
Decision:	See [18]
Catchwords:	CIVIL LAW – APPLICATION – Indemnity Costs – Failure to provide bill of costs – whether the plaintiff is classified as a third party payer – whether the plaintiff was acting with a conflict of
interest
Legislation Cited:	Court Procedures Rules 2006 (ACT) r 1720, 1803 Legal Profession Act 2006 (ACT) ss 261, 261A, 277, 282, 289, 271(1)(c), 294A(5)
Parties:	The Public Trustee and Guardian of the Australian Capital Territory (Plaintiff) Paul Vytis Dirkis (Defendant)
Representation:	Counsel
R McCrone (Plaintiff) Self-represented (Defendant)
Solicitors
ACT Government Solicitor (Plaintiff) Self-represented (Defendant)
File Number:	SC 35 of 2021
ELKAIM J:

1. On 5 February 2021 the plaintiff filed an Originating Application seeking an order under r 1803 of the Court Procedures Rules 2006 (ACT) that the defendant file a bill of costs, arising from two proceedings, within 30 days.

2.       The plaintiff relied on an affidavit of Mr McCrone affirmed on 5 February 2021. In his affidavit he refers to costs orders made by McWilliam AsJ on 9 August 2017 in respect of matters SC 58 of 2017 and P 513 of 2011.

3.       Pursuant to the above orders the defendant is entitled to indemnity costs, to be paid from the estate of the late Kathleen Mary Dirkis.

4.       In his affidavit, Mr McCrone says that the parties have been unable to reach an agreement about the amount of costs to be paid under the above orders. Accordingly, he says, that on 27 November 2020 the plaintiff wrote to the defendant giving him notice of the application that is before the Court today.

5.       The defendant opposed the making of the order saying that he had enclosed particulars of his costs claims by emails in September and December 2019 and he should not have to provide any more.

6. He said that the plaintiff’s application was out of time by virtue of s 294A(5) of the Legal

Profession Act 2006 (ACT). Further he said that any extension of time, under

subsection (6), was not available to the plaintiff because the plaintiff is a “sophisticated
client”.

7.       The defendant said there was another reason for the application to be refused. This was because the plaintiff was acting with a conflict of interest.

8. Starting with s 294A, this section relates to an application by a “client or third party payer” for a costs assessment. A third party payer is defined in s 261A. A sophisticated

client is defined in s 261 to be read with s 272(1)(c).

9. The question here is whether or not the plaintiff is a third party payer. The plaintiff took me through the relevant part of the Act to show that a third party payer simply does not include his client. He said that a third party payer is a person who is related to the client or the law practice in such a way that an agreement might be contemplated between the third party payer and the practice. This was emphasised, for example, by sections such as ss 277, 282 and 289.

10. In my view the plaintiff does not fall within the definition of a third party payer as defined in s 261A(1). My reading of the definition of a third party payer is a person under an

obligation to pay another person’s legal costs, not by reason of being the losing party

in litigation, but by reason of some association between the client and the person. An

example might be an insurance company obliged to meet a litigant’s costs.

11.     Part 3.2, in my view, is designed to address costs issues that might arise before or during litigation. It does not contemplate costs orders made at the conclusion of litigation in favour of a particular party. The purposes set out in s 262 do not contemplate the latter circumstance and plainly are intended to regulate costs issues arising between legal practices and clients or persons under an obligation to meet the costs of legal services provided by the practice to the client.

1. The defendant countered the plaintiff’s arguments by referring to s 294A(11) which

   says that a third party payer includes an executor or administrator of a third party payer. As I pointed out to the defendant, this extension of the definition applies to the situation where the third party payer has, for example, died. It is still necessary for the third party payer to fall within s 261A.

13.     The plaintiff also referred me, in support of its argument, to the Court Procedures Rules. Rule 1720 says that absent an agreement, the party is not entitled to recover costs unless they are assessed costs.

14. In summary, I am firmly of the view that the plaintiff in this matter is not a third party payer and consequently is not bound by the time limit imposed by s 294A(5).

15.     Turning now to the conflict suggested by the defendant; as I understood the defendant, the conflict arose because if the plaintiff did not obtain the order it sought, it would be bound to pay the whole of the amount previously claimed by the defendant and would, in turn, be liable to the estate for any excess of the amount paid over what would have been the assessed amount.

16.     I cannot see any conflict. The plaintiff is endeavouring to pay the defendant’s costs in

the manner ordered by the court. It has not been able to do so because the parties have not reached any agreement as to the quantum of those costs. Accordingly, recalling that the costs must be assessed under r 1720, the plaintiff is endeavouring to achieve that purpose so that it can comply with the costs orders.

17.    Absolutely no foundation has been provided for a conclusion that the plaintiff is somehow motivated by an ulterior purpose, namely its anticipation of having to reimburse an amount of money to the estate which it represents.

1. Having rejected the defendant’s arguments, I make the following orders:

   (i) Pursuant to r 1803 of the Court Procedures Rules the defendant is to file a bill of costs in respect of his costs in proceedings SC 58 of 2017 and P 513 of 2011 within 30 days of the date of this order.

   (ii)      Each party to pay their own costs for the application.

   I certify that the preceding eighteen [18] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Elkaim.

   Associate:

   Date: 23 February 2021