THO & L FIRM - [2012] FamCA 384

FAMILY COURT OF AUSTRALIA

THO & L FIRM

[2012] FamCA 384

FAMILY LAW – COSTS AGREEMENT - Dispute as to whether agreement existed - Original document cannot be found - Application determined on the evidence - Finding that a costs agreement existed - Dispute as to the terms of the agreement - Strict compliance required - Hourly rate accepted by client but no understanding of additional terms and conditions - Finding that the scale of costs relating to everything other than the hourly rate applied - Extension of time for applicant to request itemised account granted.

Family Law Act 1975 (Cth)

Bear v Waxman [1912] VLR 292
Budziszewski (1981) FLC 91-038
Clare v Joseph [1907] 2 KB 369
Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41 referring to Phipps v Boardman [1967] 2 AC 46
Gallo v Dawson [1990] HCA 30
J and B [2004] FamCA 667
Jones v Dunkeld (1959) 101 CLR 298
QCoal P/L & Anor v Cliffs Australia Coal P)/L [2010] QSC 479
Re P’s Bill of Costs (1982) FLC 91-255
Schiliro v Gadens Ridgeway (1995) FLC 92-608
Twigg and Twigg, practising as Adrian Twigg & Co v Rutherford (1996) FLC 92-691; (1996) 133 FLR 46
Weiss v Barker Gosling (1993) FLC 92-399
Weiss v Barker Gosling (No. 2) (1994) FLC 92-474
Whitcombe and Dobinson, 28 July 2006, Faulks DCJ

APPLICANT:

Mr Tho

RESPONDENT:

L Firm

FILE NUMBER:

MLC

992

2008

DATE DELIVERED:

24 May 2012

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Cronin J

HEARING DATE:

14, 15, 16 & 17 November 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Crofts

SOLICITOR FOR THE APPLICANT:

Harris Cost Lawyers

COUNSEL FOR THE RESPONDENT:

Mr Tatarka and Mr Warne

SOLICITOR FOR THE RESPONDENT:

L Firm

Orders

That the costs agreement between the applicant and the respondent executed on 22 April 2008 be varied such that the respondent be entitled to charge the applicant for work done by Mr C at the rate of $460 per hour but that otherwise, save as to disbursements reasonably incurred, Schedule 3 (Part 1) of the Family Law Rules 2004 shall apply.
That by 4.00pm on 11 June 2012, the applicant have liberty to request from the respondent itemised costs accounts prepared according to Order 1 hereof in relation to all work undertaken by the respondent on behalf of the applicant.
That upon receipt of any such request as set out in paragraph 2 hereof, the Family Law Rules 2004 shall otherwise apply in respect of the provision of such itemised accounts and in respect of any dispute relating to them.
That there be liberty to apply in respect of the implementation of these orders.
That should any party seek costs arising out of these orders, such application be made by written submission and filed and served by no later than 11 June 2012 with such submission being endorsed with the fact that it has been so served on the other party and any recipient of such submission have until 25 June 2012 to file and serve any response and such response be endorsed with the fact that it has been so served on the other party and upon receipt of any such application for costs, it or they be determined in chambers.
That the applicant in a case filed 23 April 2010 and the response thereto filed 11 November 2011 be otherwise dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Tho & L Firm has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 992 of 2008

Mr Tho

Applicant

And

L Firm

Respondent

REASONS FOR JUDGMENT

Mr Tho (“the applicant”) was represented by the firm L Firm (“the respondent”) in a dispute with his wife. Mr C (“the lawyer”) of the respondent was the responsible principal.
The present dispute is about what costing arrangements prevailed or should now prevail between solicitor and client.
Largely, the case was about who was telling the truth as to what occurred in relation to a costs agreement. Ironically, there was common ground about many facts. Despite that, the arguments in this case were extensive and dependent upon a succession of findings. Those findings have been determined on the balance of probabilities.

The issues and the outcome

The main issues considered in these reasons are:
a)Did the applicant sign a costs agreement with the respondent at all?
b)If there was such an agreement, what were its terms and generally was it valid?
c)If there was a valid agreement, when was it signed and from when was it operative?
d)If there was such an agreement, was it fair and reasonable anyway?
e)If the applicant was bound by such an agreement and wants to dispute some of the consequent bills of costs, can he do so? And should he be allowed to do so if he is well out of time after the delivery of the bills?
I find there was a valid costs agreement and that the applicant should be bound by some, but not all, of its terms. To the extent that the applicant is not bound by some of the terms, the scale of costs regulated by the Court should be applied. Because the applicant is out of time to challenge the costs, I propose to give him an extension of time.

The onus of proof

The starting point to note is that the respondent, as a firm of legal practitioners, bears the onus of proving that the costs agreement was entered into freely in an informed and independent way after it was explained and accepted by the client.(see Schiliro v Gadens Ridgeway (1995) FLC 92-608). Properly explained, the terms and conditions of the professional fees should be well understood. If not, the agreement cannot be seen to be reasonable.
The relationship between solicitor and client is a fiduciary one. The unique feature of that relationship is that the solicitor agrees to act and advise the client and thus, decisions made by the solicitor and the advice so given, affect the interests of that client. The client is in a vulnerable position and the solicitor must therefore only act in the client’s interests. (see Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41 referring to Phipps v Boardman [1967] 2 AC 46)

Is the costs agreement just another commercial arrangement?

In an unreported decision of Whitcombe and Dobinson, 28 July 2006, Faulks DCJ observed that on a daily basis in Australian society, individuals enter into agreements with finance companies, banks, “even dry-cleaning firms” which are frequently documented in convoluted and difficult prose without an opportunity or attempt to have the other party to the transaction explain unusual terms. His Honour referred to the legal practitioner’s privileged position which created a higher duty towards a client but added that a measure of realism needed to be introduced into the limits and bounds of such duty. Have we moved to the situation where relationships between lawyers and their clients are simply just another commercial arrangement? In my view, we have not.
Traditionally, the authorities have treated cost agreements between solicitor and client cautiously if not suspiciously. Most of the authorities were discussed in submissions in the proceedings but many of them set out principles that have been superceded by the rules of Court (See Clare v Joseph [1907] 2 KB 369 at 376, Bear v Waxman [1912] VLR 292 at 298)
In Re P’s Bill of Costs (1982) FLC 91-255, the issue was the enforceability of a costs agreement. The Full Court observed that the onus was on the solicitor to prove that the agreement was entered freely after making an independent and informed estimate of the matter. Their Honours said the solicitor had to explain the charge-out rate difference from the scale rate and that the client had to not only understand it but accept it. A simple statement that the solicitor held a signed costs agreement would not suffice. The Full Court referred to a statement of Baker J in Budziszewski (1981) FLC 91-038 wherein his Honour said a court should consider the complexity of the work and also competence and experience of the solicitor to decide whether the agreement was reasonable. The Full Court doubted whether that was an equitable requirement if the entry into the agreement was found to have been voluntary. Reasonableness was said to have relevance at the point at which the court was examining whether the client was fully aware of what was being proposed by the solicitor. If so, the question needed to be whether the client accepted the agreement.
Fogarty J in Weiss v Barker Gosling (1993) FLC 92-399 took a different view. His Honour was examining the 1984 rules which have been largely replicated in the 2004 rules. His Honour rejected the necessity to compare scale and charge-out rate. However, his Honour held that the document and its contents had to be brought to the attention of the client in a meaningful way. Importantly, that exercise depended upon the level of the client’s understanding and capacity to absorb information. Caution needs to be the rule here because intelligent people may be affected by, if not inflicted by, emotional distress associated with the very litigation upon which they are embarking. Emotional distress comes in many forms including bitterness and anger.
Fogarty J also held that compliance had to be real not token. The onus of proving that lay with the solicitor. His Honour described the solicitor/client relationship as a fiduciary one and one that attracted a presumption of undue influence because the solicitor stood to gain from having the client enter the agreement which was (usually) remunerating the solicitor at a rate higher than the scale set down by the Court.
Thus, whilst the commercial vagaries of life might suggest that a measure of “realism” needs to be factored into these situations, the long-standing rules and authorities together with the replication of those principles in the 2004 rules of court mean otherwise. The legal practitioner knows the limits and bounds of the duty and is in a privileged and self-interested position and extra caution must be taken about not only compliance but also ensuring that the client understands the distinction between the solicitor’s proposal and the court’s regulations. That does not mean that there has to be a comparison of scales but rather a clear statement understood by the client that the agreement is different from the rules of the court and the client has the opportunity to obtain legal advice about it.

Is this case simply a commercial dispute?

These disputes revolve around findings on evidence. I am very conscious that here, as in most disputes like this, there is a client who is not accustomed to the processes undertaken by legal practitioners. Thus, the oral evidence and particularly evidence which was based on usual practices uncorroborated by any written document, must be cautiously approached. That is relevant here because, as will be seen below, a signed agreement cannot be produced. It is said to have been lost and the solicitors are a busy firm dealing with many clients.
To the solicitors, this was one of their many clients and their position was that they followed their usual practice whereas the client had not been in this position before and was emotional and distraught about the ending of a significant relationship in his life.
The burden of proof falls to the legal practitioners to prove the very existence of the agreement because it cannot be found. They have to prove that the relevant lawyer explained terms and conditions at least to the extent that their remuneration was different from the regulated scale. In my view, that exercise must draw to the attention of the client that there is not only an hourly rate but also rates for things associated with preparing and reading documents along with administrative tasks such as photocopying if those things are different from the scale. They must prove that objectively examined, the applicant knew that what he was signing was a costs agreement with its ramifications and terms and that he accepted those terms and conditions.
In respect of both the proving of the agreement and its fairness and reasonableness, the respondent also bears the burden of rebutting the presumption of undue influence.

The application and response

The relevant application of the applicant was filed on 23 April 2010. The relevant response of the respondent was filed on 11 November 2011.
The applicant sought orders that:
i.there be a declaration that there was and is no valid costs agreement;
ii.the respondent serve itemised accounts pursuant to the scale attached to the Family Law Rules 2004;
iii.in the alternative, the applicant have leave to file a notice disputing invoiced costs for a variety of invoices he had received.
The respondent sought orders that:
i. the application be dismissed;
ii.alternatively, the costs agreement be varied to remedy any identified unfairness or unreasonableness;
iii.dispensation with any rules found to have been breached;
iv.that the applicant pay the respondent a specified sum of $126,231 plus interest;
v.that the applicant provide security for payment of whatever was found to be owing.
The documents relied upon in evidence are referred to in the Schedule annexed to these reasons.
Because of the nature of the proceeding which appeared to me to be largely of a commercial nature, in the early stages I directed the parties to adopt a pleading approach and accordingly, this case has been conducted on the basis of the applicant’s points of claim to which the respondent filed a defence.

Witnesses generally

I heard from a number of witnesses. Witnesses who were legal practitioners had dealt with many clients. They had to rely mostly on files and notes along with practices that they normally followed. Understandably, they had a limited recollection of specific incidents.
The applicant holds a doctorate. He had been a highly successful and sought after consultant. His talents were varied and not just confined to his professional work. He was described by the respondent as demanding and prescriptive about the conduct of his case. He did not really challenge that description. I accept the applicant had not been involved in any similar litigation process previously and I have taken into account that the courtroom and litigation are not part of his life as they would be for the lawyer and the various legal practitioners who were involved in the case.

Background leading to the applicant attending the respondent

Just prior to 13 August 2007, the applicant who had been in China for six to eight days, learned from his wife about the ending of his marriage. Consequently, he returned home. With a telephone number provided by his employer, the applicant telephoned the respondent where some details were taken by a solicitor Ms D who handed them to the lawyer. The applicant asked the lawyer to come and see him.
On 13 August 2007, the lawyer went to the applicant’s work premises for a meeting of about an hour during which there was a discussion about the hourly rate of charges of the respondent for professional attendances. The applicant took no issue at that time with the hourly rate nor did he indicate at any time thereafter that he was offended by the hourly rate. In cross-examination, the lawyer agreed that at this first meeting, the applicant was stressed and emotional.

A second meeting occurs

On the morning of the following day, 14 August 2007 (the second meeting), the lawyer sent an email to the applicant “confirming” that $5000 would be transferred to the respondent’s trust account. The wording of that email makes it clear that the subject had been discussed the previous day. In other words, it was not a request for the first time for the payment of $5000. That afternoon, the applicant went to the respondent’s premises where he again met the lawyer and Ms D was also present. On 17 August 2007, the applicant paid the $5000 into the respondent’s trust account for future costs.
At the second meeting, the applicant recalled asking about overall costs and being told that as each case was different, the lawyer was unable to give that estimate. Having said that, an estimate of the fee ranges was set out in a letter to the applicant which the lawyer maintained was included in a controversial package of advice documents mentioned again below. That estimate was not an overall estimate but rather an estimate for specific tasks.
There was otherwise little dispute between the parties about what was discussed at these meetings but the first contentious issue arises now.
The respondent maintained that at the second meeting, a package was given to the applicant containing brochures and a costs agreement. The applicant denied that he was given anything. A copy of this information package was, in part, exhibited to the affidavit evidence of the lawyer and he was not specifically questioned about it. The first thing to note was the package contained a covering letter with documents including costs notices, pamphlets and sections of the Family Law Act 1975 (Cth) (“the Act”). It purported to confirm verbal advice given about costs and made mention that once the letter and costs agreement had been read, the applicant should sign the costs agreement on each page and return it to the respondent together with a cheque for the initial pre-payment of $5000. This $5,000 was a reference to the money that had already been requested.
The applicant’s evidence was that no such document or package of documents was given to him at all. That places his evidence in stark contrast to that of two witnesses. The first was the lawyer himself and the second was Ms D. The amount of material given to the applicant could only be described as large and I take into account that he was consumed and very upset about what was happening in his parenting dispute with his wife.
The lawyer’s evidence was that this information pack was given to the applicant towards the end of the conference and that he discussed its contents with him. The lawyer said that the applicant took away the documents. In his evidence, the lawyer said the steps he took were part of his “invariable practice”.
The “invariable practice” was described as telling the client to take the package of documents away because it was policy not to allow the agreement to be signed in the respondent’s office. There might be a temptation to say that the usual practice broke down this day. Counsel for the applicant cross-examined on the basis that the lawyer had no independent recollection of the events. However, the lawyer gave evidence of specifically telling the applicant about costs matters. I am not convinced on the balance of probabilities that anything other than the hourly rate was discussed.

The evidence of Ms D

At that same meeting, it was common ground that Ms D was present. Her evidence was that the lawyer gave the applicant the information pack and discussed it with him although she did not recall the time in the conference that the pack was given. Other than she was working from the “invariable practice”, it was not put to Ms D by counsel for the applicant that she was lying or part of some conspiracy to assist the respondent.
In cross-examination, Ms D was asked about notes she had taken. She confirmed that she had drawn her affidavit from notes that she had made but she also acknowledged the affidavit was prepared from the “invariable practice”. Her notes contained no reference to the information pack. Ms D was confident in her evidence that at the meeting there were two folders present in the room. The first was the applicant’s physical file retained by the respondent and the second was for the client which was the information pack. The “invariable practice”, according to Ms D was followed. Her evidence about the two folders had a ring of reality about it. I accept her evidence.

The lawyer’s evidence about the second meeting

When the lawyer was cross-examined about this meeting, suggestions were put to him that his notes made no reference to the discussion about the information pack. The applicant’s counsel put that not only did he not have specific recollection of the discussion but that his evidence was underpinned by what he normally did in practice. The lawyer’s response was emphatic in that he had a very specific recollection of the incident.

The applicant’s evidence about the second meeting

The applicant was equally emphatic in cross-examination that he did not receive anything from the respondent and about what he had with him when he left the office on 14 August 2007. His evidence was that there was nothing about his visit that stood out. He said he went back to work which was only two blocks away. His recollection was that he then went straight into a meeting and that he would not have taken personal paperwork with him.
In addition to the costs agreement one of the critical issues is the question of whether at that second meeting, estimates of costs were discussed and it was the applicant’s position that they were not.
Only three days after that second meeting, the applicant wrote to his father-in-law setting out what he described as his legal practitioner’s estimates of costs for the weeks and months ahead. For someone who maintained no such estimates were given to him, that letter must be viewed as odd. When challenged about it, the applicant said he made up one of the amounts and as for the long term costs that he anticipated, he said that he received that estimate from a barrister who is connected to his family. According to the applicant, this member of counsel told him “the range” was $100,000 to $350,000 so he chose $250,000 as the “mid” point. This was the first time this barrister had been mentioned in the proceedings. It is significant evidence where the applicant said he recalled what was said at the second meeting about the inability of the lawyer to estimate costs. The email sent by the applicant to his father in law refers not to a barrister but to his own lawyers.
The email also refers to his “lawyer’s estimate” as distinct from “lawyers’” estimate and it was his evidence that he was meaning the barrister. The issue of the barrister was not raised until cross-examination and only when the applicant was challenged about where the emailed estimate and the words he had used, came from. Counsel for the respondent argued the absence of the barrister in these proceedings meant that I should conclude that the barrister’s evidence would not support the applicant’s case (relying on Jones v Dunkeld (1959) 101 CLR 298). I do not draw that inference but, added to a number of other issues to which I shall refer below, the credibility of the applicant becomes questionable in circumstances where he was emphatic that he was right and others were wrong or, as his counsel agreed, someone was lying.

Finding about what occurred

The parties’ positions on this first issue were diametrically opposed. To the lawyer and to the respondent, this was a commercial arrangement that had been undertaken many times. To the applicant, it was a unique situation and he was emotional. Because of the subsequent events upon which conclusions could be drawn, I accept that the lawyer’s version and that of Ms D, is correct. I find the applicant was given the costs agreement as part of the information pack but absent it being signed, it cannot operate retrospectively.

The period after the second meeting

Despite the absence of a signed costs agreement, the respondent continued to represent the applicant in the proceedings in this Court. The lawyer said it was the respondent’s practice for a junior lawyer to pursue the execution of a costs agreement given to a client. That makes sense having regard to the respondent’s policy of not having costs agreements signed in their office. Ironically, that is exactly what later happened. Normally Ms D would have had the responsibility of chasing up the agreement but the lawyer said that the applicant declined to deal with her and a new junior lawyer did not become involved until some four months later. That evidence was not challenged by the applicant.
On 24 September 2007, the applicant received his first account from the respondent which, without argument, he paid within about two weeks. In cross-examination, when asked whether he would have signed a costs agreement if he had been given one in August 2007, the applicant said he would. That evidence was given in the context of the applicant’s unequivocal statement that not only was he not given the documents to which I have referred but that he never saw a costs agreement until he engaged the lawyers who are now acting for him. The new lawyers commenced their retainer in March 2010. He said he became aware of a “costs agreement” when the new lawyers discussed it with him. Thus, his position in evidence was that he was ignorant of such a document. I reject that evidence because of what follows.
On 31 December 2009, that is long after these meetings and after the applicant’s family law litigation was finished, the lawyer wrote to the applicant to say that he was confident about getting his costs because he had taken security. His confidence was based upon a lien pursuant to the firm’s costs agreement. On 1 January 2010 by way of reply, the applicant sent an email to the respondent in which he complained about a number of things. Amongst other things, the applicant said:
If you are trying to intimidate or threaten me with law suits, I do not believe it is productive and I am also aware there are sufficient grounds to set aside part or all of our costs agreement so let us not play games about this.
This letter was written before the applicant met his current lawyers and hence, before he would have known about cost agreements. His email does not sit comfortably with his professed ignorance.
When challenged in cross-examination about the concepts in his January 2010 letter, the applicant said his reference to a costs agreement related to a “general term” that he obtained from “Googling” the Legal Services Commission. When asked what agreement he was referring to, the applicant said he assumed there was an agreement for fee for service with the respondent relating to the hourly rate. He confirmed the Commission’s website did not describe what a costs agreement was. Hence, he said, his reference to setting aside an agreement was a reference to his right to dispute the hourly rate because of a delay in getting bills of accounts. Until cross-examination, this knowledge or understanding had never been raised.

Further finding about the costs agreement

Whilst the January email of the applicant evinces clear unhappiness about a number of things, the complaint was mostly about the respondent’s accounting practices. If there had never been a discussion about a costs agreement and no such document sighted, it seems remarkable that the applicant would comment as he did. Nowhere had he previously mentioned any understanding of costs agreements that he had learned about from an internet site. The reference to his explanation about a costs agreement came out in cross-examination in the same way as his answer about where he ascertained the costs’ estimate in his letter to his father-in-law. I generally reject his evidence because of the precise words he used. He is a man of high intelligence and as can be seen from a number of letters that he wrote not only to the lawyers but also to his own spouse, he is very articulate. I find the applicant knew exactly what a costs agreement was and in this case that he understood one existed.
It is clear on the evidence however that the applicant did not sign the costs agreement that was inside the information pack given to him at the second meeting and, consistent with there not being a junior lawyer for some months chasing up such matters, nothing occurred.
The lawyer gave evidence that he became aware of the absence of a signed costs agreement in late March 2008. By this stage, bills had been rendered in November 2007, January 2008, and February 2008. The applicant had paid the respondent about $34,000 which was about half of what he had been billed.
There is some significance in those bills. They are in evidence. They are detailed in the sense that they use jargon such as “telephone attendance”, “perusing”, “letter to” and then there were “taxable supplies” after which entries appeared which might more readily be understood to be disbursements incurred by the respondent on behalf of the applicant.
It was the applicant’s evidence that he understood he was being charged on an hourly basis regardless of the task and that words such as those italicized above meant nothing to him. He was cross-examined about “perusing” and “engrossing” and he said that he did not understand them. There had been discussion between the lawyer and the applicant about the use of other and perhaps more junior lawyers. It is implausible that the applicant would consider that everything in his case was being charged out at the one hourly rate including for junior lawyers bearing in mind that he was not at all troubled about the rate that the lawyer was demanding. That is another reason why I have difficulty accepting the applicant’s evidence.
It was not until just before April 2008 that the respondent ascertained that the usual practice of having a junior lawyer chase up the costs agreement had not been followed.

The evidence of Mr P

In addition to the lawyer’s evidence, I have the evidence of Mr P. Mr P’s evidence was contained in an affidavit filed on 4 April 2011. He was not required for cross-examination. To the extent that it could be said the evidence was self-serving, no probing of it was undertaken. Mr P said that he “vividly” recalled a “debtors’ meeting” at which the lawyer told him that the costs agreement had been signed. At a previous meeting, the lawyer had conceded to his partner the absence of the costs agreement had not been detected by the respondent’s staff for several months. This evidence clashes with that of the applicant who denies he ever signed anything. It was also at a time when there were “substantial fees” unpaid. I conclude therefore that it would have been a matter of some concern to the respondent. The evidence of Mr P supports the evidence of the lawyer as to the timing of the signing of the costs agreement at a meeting on 22 April 2008.

The evidence of Mr Z

Although not directly related to the issue of the existence of the costs agreement, I heard the evidence of Mr Z a barrister of senior counsel rank. He was called by the respondent having been briefed as counsel for the applicant, he had had a conference with the applicant and ultimately appeared for him in the litigation.
Mr Z’s evidence was that at the conference at which the lawyer was present, he discussed his hourly and daily rates of charge. Apart from asking Mr Z whether he knew the applicant denied any conversation about fees having been discussed, it was not put by the applicant’s counsel that he was making up his evidence nor that he had entered into some arrangement with the respondent to bolster their evidence.
The applicant was clear and unequivocal that no discussion ever occurred with Mr Z about fees. He quibbled about the initial meeting with Mr Z maintaining it was a “business development” meeting and by inference, that no fees should be charged. On 13 November 2009 when the applicant wrote to the respondent disputing charges on various invoices, he described the “almost full day initial conference with [Mr Z]” as being one in which Mr Z was getting to know him and “probing” him on some of the issues in the brief. I find that that is quite different from a business development meeting and that the applicant knew it.
The applicant conceded that he knew roughly what Mr Z’s fees would be because the lawyer had told him before the conference. The evidence of the applicant and Mr Z therefore directly conflict.
The approach of the applicant about the first meeting being some sort of meet and greet arrangement seems unrealistic. The applicant conceded that the lawyer (as distinct from Mr Z) did discuss not only the costs but also issues such as whether Mr Z would appear without a junior barrister and also names of other barristers. The applicant was described by Mr Z and also by the lawyer as being argumentative and challenging.
It is understandable that after some years, there would be difficulties about recalling specific conversations about matters such as costs. However, Mr Z’s evidence was not significantly challenged. On balance, I find that the discussions occurred as he described.

The April 2008 discussion and meeting

That leads to an examination of what happened at the April meeting and what the applicant was then told about the costs arrangement.
With a conciliation conference pending on 28 April 2008, the lawyer spoke to the applicant on 16 April 2008. His evidence was that apart from the outstanding costs due at that time, he raised the subject of the absence of the costs agreement. It was the applicant’s evidence that no such conversation occurred. The lawyer produced his notes which referred to the applicant having been asked to make arrangements about the outstanding costs and to “sign CA”. The same notes make reference to various accounts.
Counsel for the applicant put to the lawyer that he did not have an independent recollection of that discussion. The lawyer not only denied that suggestion but gave a specific example of the applicant maintaining that he did not want to be charged for the time spent on conversations about costs. There were conversations about not wanting to be charged for work by the lawyer in perusing the work of other lawyers and later in 2008, a complaint about not being charged for “processing paperwork”. I conclude that the applicant is a very precise person who carefully monitored his costs albeit that he was somewhat cavalier about their payment.
In his evidence in chief, the applicant said that he did not recall being advised that he had to sign the costs agreement. That evidence needs to be contrasted with his answer in cross-examination where he was very confident in saying that he did not discuss a costs agreement with the lawyer at that time. Curiously, other issues noted in the lawyer’s notes were confirmed by the applicant to have occurred. In cross-examination of the applicant, counsel for the respondent raised the issue of this discussion about the respondent wanting the applicant to sign but the applicant said that he was absolutely certain that no mention was made of it.
The lawyer’s evidence was that he went into the conference on 22 April 2008 with a copy costs agreement printed. He was unable to say whether it was printed from the respondent’s system or that he photocopied the earlier one. There was no evidence as to the distinction. That is, no evidence was presented about whether a subsequently computer-generated copy had or would have specific dates placed in it.
The purpose of the conference on 22 April 2008, was to prepare the court document required for the conciliation conference. The lawyer said that apart from discussing the financial details that went into that document, future costs were discussed and the prospect of a litigation funding application was raised. The applicant denied that that conversation occurred at all and maintained that security for funding was definitely not explained to him.
The lawyer’s evidence was that in the course of the conference and towards its end, he produced the respondent’s costs agreement, asked the applicant to sign it and he did so without quibbling. The applicant’s evidence was that that did not happen. Further, he said that the costs agreement was never raised. Because I generally accept the lawyer’s evidence, I find his version here is correct.
The lawyer’s evidence was that no surprise was shown by the applicant when he was given the document. Whilst the applicant apparently did not read the document line by line, the lawyer said that he signed each page. Significantly, there was no evidence that any explanations of the terms were given to the applicant. That was because the lawyer concluded that the applicant was familiar with the document having seen it in the initial package but also because he had received accounts from the respondent.
In this conference, it would appear that another legal practitioner was present for some of the time. That became evident from the time-billing account which showed the presence of that practitioner but for which the applicant was not charged. Quite precise times were shown for the attendance of that practitioner and from the account, it was difficult to tell when both practitioners were with the applicant. This legal practitioner was not called as a witness. In cross-examination of the lawyer, counsel for the applicant inquired whether this practitioner saw the signing of the costs agreement and he replied that from his inquiries she did not. It was not suggested that I should draw any adverse inference by her absence from giving evidence. It was explained by counsel that the position was that the practitioner was in and out of the room.
The lawyer’s evidence was also that he learned of the applicant relying upon loans from his parents in this conference. That came about because the applicant’s liability position was being contemplated for the conciliation conference. The lawyer exhibited his notes to his evidence. In the six pages, the liability of the applicant to his parents appears on page 4 and on page 6. The lawyer noted the parents’ funding of the case and there was a cryptic note about “a Barro” and the “need” to “exhibit CA”. Each of those notes is consistent with the concept of gathering material for a litigation funding order application. The production of an executed costs agreement is important to the success of a litigation funding application.
No assertion was made that the notes of the lawyer had not been made as alleged or in some conspiratorial way, had been doctored. No suggestion was made that he made up these conversations about the costs agreement. I find it is too much of a coincidence that some of the things were discussed and others not. In relation to those matters, I therefore and for reasons earlier set out, prefer the evidence of the lawyer.

What did the applicant understand

The onus is on the respondent to satisfy the Court that the applicant understood the terms of an agreement if costs other than the regulated scale costs are to be applied. It will be remembered that the lawyer said that the applicant did not carefully read the document. It is difficult to know what the applicant understood because his evidence is that the cost agreement was never raised. The matter must be determined objectively. The applicant was very much focussed on his litigation and he was emotional. I could not be satisfied on the evidence however, that the applicant accepted any more than he was being charged an hourly rate. I do not accept that by April 2008, his understanding and acceptance of the professional charges had altered from a simple hourly rate. In the emotional environment, I do not accept that it was sufficient to give the applicant an overview of the respondent’s fee structures, give him a package of information to take away and read and then conclude that he had understood what it all meant even accepting that the applicant is an intelligent man.
By the end of 2008, the litigation had not concluded.
On 13 December 2008, the applicant wrote to the respondent to say that it looked like there was no choice other than for the substantive proceedings with his wife to go to trial and that he anticipated incurring significant legal costs. The significance in the December letter was that it was an unashamed attempt by the applicant to negotiate legal fees with the respondent. He said that he had “worked with” other law firms and they had a particular “policy” about reductions where there was a lot of work involved. When tested about this in cross-examination, the applicant said that he had overheard another person talking about this concept. It was put to the applicant in cross-examination that in his attempt to get such a discount, he lied about the “policy”. He agreed that is exactly what he had done. I found this manipulative process disconcerting because it raised the question of whether the applicant was willing to lie when it suited his own purpose. A variety of questions was also put to the applicant about jargon he used such as “WIP”, “6 minute units” and “perusals” because the latter of these would have indicated an acknowledgement of what was in the costs agreement. When questioned, his position was that he did not know the terminology and maintained that his understanding was that he was being charged by the respondent at an hourly rate only. The word “WIP” clearly appears in the applicant’s email to the respondent on 13 December 2008 and his explanation was that he was using it in the “[applicant’s field of expertise] sense”. That unexplained cryptic answer along with the manipulative approach convinces me that the applicant did have a better understanding of costs than he was maintaining but not necessarily the detail of how he was being charged.

That same manipulative approach can be seen just prior to the final hearing of the proceedings. There was a dispute about costs to the conclusion of the litigation and what it would amount to. The applicant said that the lawyer did not tell him about the prospective costs. The lawyer said that he did and that payment required of the applicant had to include past as well as future costs. The applicant set out his calculation of where he would get the necessary costs money and it was based on money advanced from the home sale, a tax refund and some “odds and sods”. A four day estimate had been given which would have meant much more costs than what the applicant was calculating. His response when questioned about how he would have funded the case with a lack of resources was that the case might have settled and if it had not, he would have gone to his parents for the money. I do not accept the applicant’s evidence on that issue. I am satisfied that he had no intention of settling the legal fees.

What happened to the costs agreement?

The lawyer said he placed the signed costs agreement in a box that held other materials belonging to the applicant relating to the proceedings. He said he both handled it and saw it on numerous occasions thereafter. After the delivery of final invoices, the applicant requested a copy of the costs agreement but it could not be found. The lawyer was not challenged about when he saw the costs agreement on the “numerous occasions”.
In relation to the costs agreement, the lawyer thought that he had made a copy for the applicant. Importantly, the lawyer conceded that he made no mention at that April meeting about the applicant getting independent legal advice. He was precise about saying that he had not told the applicant to obtain it before signing the agreement.

The detail of the costs agreement

The costs agreement document tendered in evidence runs to several pages and has provision for a signature on each page. It also has a provision at its end for the signature of the applicant to be witnessed but no similar process for the respondent’s representative. The lawyer acknowledged that there were no witnesses in this case.
The recital to the costs agreement provided that it related to work done after the date in the schedule which was noted as 13 August 2007 and that same schedule notes the operative time of the agreement. It was argued by the respondent that its execution had retrospective operation. I reject that. I find its operation commenced from when it was concluded which was on 22 April 2008.
The same schedule to the agreement refers to a scale with a variety of items at fixed dollar fees such as drafting, engrossing and perusing. The terms and conditions are extensive and are not relevant at this moment. What is relevant however is that the agreement once executed, purports to amount to an acknowledgment of having been advised of the availability of independent legal advice and that it was in his interests to obtain that before signing the agreement. Albeit self-serving, the agreement concludes that the client had read and understood the agreement and the letter which accompanied it before he signed it along with the Court’s pamphlet about costs. Further, it concluded that the client had received written advice about the basis upon which he would be charged, the estimate if practicable of the total costs of the case and some other matters. However, because of the onus on the respondent relating to all things, it is not that simple.
I am satisfied that the applicant did enter into a costs agreement with the respondent on 22 April 2008 in the terms of the unsigned document in evidence.
Further, I am satisfied that on and from 22 April 2008, the applicant understood that his contractual obligation with the respondent was to be determined at the hourly rate of $460.00.
I am not satisfied that he understood the rest of the obligations in that agreement.

The Rules

Schedule 6 to the Family Law Rules 2004 sets out that lawyers may make a written agreement with a client but item 6.15 (2) provides:
(2)      The costs agreement must:
(a)specify the type and amount of work to be done by the lawyer;
(b)set out:
(i)the costs payable by the client for the work as a lump sum; or
(ii)the basis on which the costs will be calculated;
(c)state whether a partner, employed lawyer or clerk will work on the case and, if so, that person's charge out rate;
(d)      be fair and reasonable; and
(e)      be signed by the lawyer and the client.
(3)      The costs agreement may:
(a)      relate to part only of a case; and
(b)      be amended by written agreement.
Clause 6.16 of Schedule 6 of the Rules provides as follows:
Notice about costs agreement
At the time of making a costs agreement with a client, a lawyer must:
(a)give each other party to the costs agreement a costs notice; and
(b)advise those parties to obtain independent legal advice about the costs agreement.
Printed warnings on Bills of Costs subsequent to the initial agreement about entitlements and obligations do not satisfy Clause 6.16 because they occur after the events.
QCoal P/L & Anor v Cliffs Australia Coal P)/L [2010] QSC 479 is an authority raised in submissions and discussion. There, in a commercial proceeding involving a large corporation and a large well-known firm of legal practitioners, the legal practitioners produced their costs agreement after the hearing of the case had started. There was no dispute about the engagement prior to the costs agreement being produced but the corporation client later disputed the agreement. Ann Lyons J examined a number of authorities and found that the legal practitioners had been engaged to be remunerated on the basis of their fee structure. Her Honour said that both parties knew that the legal fees would have to be paid. The argument however was based upon past consideration. In my view, that decision is distinguishable.
The 6^th schedule to the Family Law Rules 2004 makes clear the obligations on the legal practitioners and as such, this dispute cannot simply be viewed as a contractual matter. In addition, the decisions of the Full Court of this Court make clear the public policy issue associated with costs (see Weiss v Barker Gosling (1993) FLC 92-399).
Schedule 6 to the Family Law Rules 2004 requires the respondent to give the applicant advisory documents “at the time of making the agreement”. That did not happen in April 2008. The respondent cannot rely upon the earlier documents albeit I accept that the applicant was given a package of documents in August 2007. The rules should be interpreted on this point strictly against the respondent. In any event, I cannot be satisfied that the applicant accepted the package of documents as relating to the costs agreement that he signed on 22 April 2008.
All of those matters become an issue about how to interpret and now determine, the applicant’s obligations to the respondent.
Without clear explanation, there would be confusion in the mind of a person not accustomed to the process of legal proceedings and dealing with legal practitioners. For example, items 1 to 9 of the scale in the costs agreement refer to specific charges for work done. Item 10 refers to charges by legal practitioners who are named. However, paragraph 10 reads:
Professional time spent by a solicitor in relation to items not referred to above (such as telephone calls and attendances, time spent in conference, receiving instructions, advising, appearing at court, negotiating, inspecting documents, instructing counsel, reviewing letters and documents, preparing briefs and research) at the rates of:
[The names of the legal practitioners and their rates are then set out.]
Just what is a perusal at item 5 or a scanning of documents at item 6 and whether that is different from the explanation above such as reviewing letters and documents is not clear.
Having accepted that the applicant did not understand the distinction between an hourly rate and specific charges in items 1 to 9, I cannot find that the applicant could be bound by that part of the costs agreement other than that he was to pay $450 per hour for the lawyer.

Waiver of non-compliance?

Order 1.12 of the Family Law Rules 2004 provides a power to dispense with the rules and thus the problem of retrospectivity could be overcome. However, in Twigg and Twigg, practising as Adrian Twigg & Co v Rutherford (1996) FLC 92-691 the Full Court said that the dispensation power whilst a discretionary one, should only be exercised sparingly and in the most unusual of circumstances. Having regard to the fiduciary relationship, exercising such a discretion in favour of a legal practitioner in a case where there had not been strict compliance with the rules would have to be very rare. This is not such a case where on the evidence, it was conceded that it was the respondent’s management practices that had contributed to the problem.
The words “making a costs agreement” cannot be construed other than in their literal meaning. Making an agreement means concluding it. Clause 6.16 is an important requirement because it underpins a fairness issue. The fiduciary relationship creates the power imbalance and to ensure the vulnerable client to that relationship is protected, strict compliance is necessary. The distinct feature of the words in Clause 6.16 is their mandatory nature.
Clause 6.17 provides both parties an opportunity to dispute and/or litigate about the validity and effect of the agreement and in considering how to determine that dispute, the Court is provided with Clause 6.18 which reads as follows:
Setting aside costs agreement
The court may set aside a costs agreement if:
(a) it is unfair or unreasonable;
(b) it does not comply with this Part;
(c)the client was subject to undue influence or misrepresentation, or was fraudulently induced to enter the agreement; or
(d)the lawyer has not complied with clause 6.03, subclause 6.15 (2) or (4) or clause 6.16.
It is noticeable that Clause 6.16 is specifically mentioned. The requirements of Clause 6.16 are important and affect the issue of retrospectivity of the agreement. The respondent argued that the execution of the costs agreement enabled the Court to allow its operation retrospectively.
If Clause 6.16 is to be read as protecting the vulnerable in a fiduciary relationship, that is, assisting them to determine whether or not it is in their interests to enter into it, the situation is distinguishable from the commercial position described in QCoal (supra) because, were it not for the costs agreement, the respondent could only charge the scale fees set out in the third Schedule to the Rules (see Clause 6.19). By the Court determining the schedule to the rules, the vulnerable are protected.
Thus, any suggestion that the costs agreement could operate retrospectively must be rejected in this case.
The costs agreement provided for the respondent to be retained in relation to “the family law matter and anything associated with it”. Although the Rule tends to suggest specificity, no issue was taken by the applicant about that. At paragraph 115 of the lawyer’s affidavit filed 20 April 2011, he set out a significant number of instructions that the respondent was given during the course of the retainer. Absent any argument by the applicant, I have concluded that he has not taken issue with the apparent vagueness of the task involved. That leaves the issue of whether it was fair and reasonable which was the subject of the applicant’s focus.

Should the whole agreement be ignored and the scale applied?

Here the applicant acknowledged at the outset of his engagement of the respondent and during the hearing, $460 per hour was an appropriate professional fee to pay for the lawyer.
Clause 6.19(1)(a) provides that without a costs agreement, the scale in the Schedule applies but that may be ameliorated by Clause 6.20(1)(c) which permits the Court to determine a different method of charging. Clause 6.20(1) refers to “a party” as distinct from a legal practitioner but in my view, because of the provisions of the other clauses, it is clearly intended to cover a lawyer and own client dispute. I see no reason in this case why the applicant should not remain obligated to that which he acknowledged during the proceedings as an hourly appropriate rate that he would pay. To do otherwise would be opportunistic.

The other issues

I return then to the balance of the applicant’s claim namely that the costs agreement should be set aside in any event because of all of the matters in Clause 6.18 of the Schedule. Each of those matters was pleaded by the applicant in his points of claim and responded to by the respondent in their defence.
In paragraph 2 of the points of claim, the applicant claimed in respect of the disputed costs agreement, he was not provided with the costs notice as required by the Rules nor was he advised to obtain independent legal advice about the costs agreement. The respondent did not dispute the facts but rather argued that the problem was overcome by the retrospective effect of the signing of the costs agreement. For reasons outlined above, I reject the defence to that paragraph.
In paragraph 3 of the points of claim, the applicant claimed that because the agreement was not signed until or about 22 April 2008, it could not have effect until that date. The respondent claimed the execution of the costs agreement occurred in April but also that it was dated August 2007 and that that was relevant to the question of whether the agreement was amenable to being set aside. I reject the respondent’s defence noting that in part, the problem is cured by Clause 6.20 of Schedule 6.
In paragraph 4 of the points of claim, the applicant claimed that the respondent had a duty of care to ensure that the applicant made a free, independent and informed decision to enter into a costs agreement and failed to do so by advising the applicant that he could seek an order for litigation funding to assist with his costs but that to do so, he was required to have a costs agreement to make such an application because it would advantage him. The respondent denied the allegation and pointed out that in any event, the applicant did not give instructions to seek litigation funding orders and signed the costs agreement anyway. Save that I accept the respondent was imposed with the obligation of complying with the requirements that would have ameliorated the applicant’s vulnerability about whether to enter into the fiduciary relationship with the respondent, for the reasons set out earlier, I reject the applicant’s claim in paragraph 4.
In paragraph 5, the applicant pleaded that the costs agreement was unreasonable by comparison to the scale of costs and the marketplace. Particulars of the comparisons were set out. In their defence, the respondent denied the claim pointing out how the costs agreement should be viewed. While the applicant’s pleading was a reference to the quantum of fees, the issue of reasonableness is much wider. In J and B [2004] FamCA 667, Brown J said:
It is settled law in this court that:
(a)there is a term to be implied in a costs agreement that its terms are reasonable;
(b) the onus rests upon the solicitor to satisfy that requirement;
(c)the term “reasonable” involves the question whether the terms of the agreement take it outside the parameters of what could legitimately be regarded as a reasonable or appropriate charge for the work, having regard to all the circumstances of the case;
(d) reasonableness is to be demonstrated objectively;
(e)the test is to be applied as at the time of entering into the agreement.
See Schiliro v Gadens Ridgeway (1995) FLC 92-608 and Weiss v Barker Gosling (No. 2) (1994) FLC 92-474.
Her Honour went on to say that the test is whether the terms of the agreement take it outside the parameters of what could legitimately be regarded as a reasonable and appropriate charge for the work, having regard to all of the circumstances. Reasonableness must be demonstrated objectively and the test is to be applied as at the time of entering into the agreement. With respect, I adopt her Honour’s words.
If the respondent cannot show the applicant understood all of the terms and conditions of the cost agreement, he could not be bound by those terms not so understood. One such example is what was described as overlap between the two charging methods. The lawyer had no problem with that when he was giving evidence. He pointed to an example where he perused tax returns and, on a payer’s basis, the applicant would have faced an horrendous fee but the respondent calculated the fee on the basis of time. Commonsense dictated that that was an appropriate way of dealing with the matter but there is nothing in the agreement that described how and when the discretionary process was to operate. Had the applicant (or for that matter the respondent) contemplated that overlap possibility, a discussion could have taken place. That did not happen. Had the applicant read the agreement and detected the potential overlap, he could have obtained independent legal advice as he should have been advised to so do. Thus without some understanding of this obligation, the applicant could not have any idea of what his liability would be. To impose such an obligation would be unreasonable.
The respondent pleaded by way of defence that the applicant had had seven months to study the respondent’s bills of accounts and “so understand” how the agreement would be applied in practice. To accept this argument would be to impute knowledge and understanding to the applicant and to effectively reverse the onus of proof. In my view, the respondent had the burden of proof to show the applicant knew all of the terms that were likely to bind both parties. The respondent has failed to prove that.
In paragraph 6 of the points of claim, the applicant pleaded the total fees were unfair and/or unreasonable in light of the scale and the marketplace. The respondent rejected that in its defence claiming that the applicant was a demanding client. More importantly and I accept, the applicant was not at all disconcerted by the $460 per hour demand of the lawyer. He said so in cross-examination. To the extent that the fees were unfair or unreasonable, it could only be in respect of the charges other than for attendances. I have already found the cost agreement cannot bind the applicant in respect of those. Thus, the marketplace and scale issue becomes irrelevant.
In paragraph 7 of the points of claim, the applicant pleaded that as a matter of law, there was a rebuttable presumption of undue influence in respect of an agreement between a lawyer and a client where the agreement was for the lawyer’s advantage. The respondent did not admit that. This issue can only go to the question of whether the cost agreement found by me to have been signed, should be set aside under Clause 6.18(c). If it is so set aside, subject to Clause 6.20(1)(c), the scale fees would apply.
There can be no argument that there is a presumption of undue influence which the respondent must rebut. Because the respondent stood to gain financially by having the applicant enter into a contract for professional fees at much higher than the otherwise restrictive rate set out in the Schedule to the Family Law Rules 2004, it must be shown that the applicant was not at any disadvantage at a point when he was asked to enter into the contract. The issue of undue influence arises because of the vulnerability of a client who could have had the work done at a scale rate albeit by someone much less experienced than the respondent. It also arises where the legal practitioner abuses the position of power by not making it clear that he, she or it stands to gain significantly more than the scale. In a disputed situation, the respondent bears the onus of proving its client understands the position each party is in. (Re P’s Bill of Costs (1982) FLC 91-255 at 77,421, and Twigg v Rutherford (1996) 133 FLR 46).

Having made the findings I have above as to what occurred at the meetings on 13 August 2007, 14 August 2007 and 22 April 2008, I am satisfied that the lawyer explained to the applicant that the respondent was to gain financially because they charged in excess of the scale. The absence of the document about the scale is of little concern because of the acceptance by the applicant of the willingness to pay the hourly rate. I have already indicated my views about the other charges.
In paragraph 8 of the points of claim, the applicant argued that because of the lapse of time between August 2007 and April 2008, the circumstances under which the agreement were signed were indicative of undue influence because the applicant would have been lulled into a false sense that the respondent was acting for him anyway. It is alleged that the respondent took the opportunity to shore up their position. The respondent denied any such suggestion.
At all times after August, the applicant was prepared to pay much more than the scale hourly rate. Accounts had been rendered and he had paid some and not queried the quantum of others. I do not find that he was lulled into any false sense of security. He well-knew that the respondent wanted the agreement signed in anticipation of the conciliation conference. He wanted the lawyer to act for him and was not happy about others being involved in his case. There is no merit in paragraph 8.
In paragraph 9 of the points of claim, the applicant alleged misrepresentation by the respondent and in paragraph 10, he asserted that there was a failure on the part of the respondent to comply with Schedule 6 of the rules. Those related to a number of matters that I have earlier dealt with. The respondent complained that no particulars were provided.
There is no evidence that the applicant was under any misapprehension about what he was doing nor, for the reasons above do I accept that there was any misrepresentation on the part of the respondent.
True it is that the respondent failed to properly put to him all of the finer details of their costs agreement and in my view, they cannot hold the applicant beyond that to which he agreed even accepting the agreement was signed.
The failure to carry out all of the requirements of the rules does not mean an absolute failure of consideration in a contractual sense. That is not a basis to set aside the whole of the agreement. Clause 6.17 grants the Court a discretionary power to set aside the costs agreement if one or more of the listed matters is established. Even where those matters may be established, the Court still has to exercise its discretion and having regard to the findings here, I would not set aside the whole of the agreement.

The submissions

Many authorities were put to me by both sides. Decisions from many years back were canvassed not just as principles to be followed but as examples of how courts have treated costs agreements. In my view, this case should be determined on the principles set out in Schedule 6 of the rules. I have carefully considered all of the authorities but save for those mentioned, they have not been of great assistance.

The outcome

The applicant is bound to pay the respondent the hourly rate set out in the agreement. The schedule to the rules must otherwise be applied to matters outside of recorded attendances. Commitments made by the applicant in respect of Mr Z’s fees cannot now be challenged in circumstances where he did not dispute the charges.

Time to challenge the bills?

Chapter 19 of the rules provides that if the client desires to dispute an account which is not itemised, it must be raised within 28 days of receiving the bill by the client requesting an itemised account.
Rule 1.14 permits the Court to shorten and extend times fixed under rules. No guidance is provided in the rules about how that discretion is to be exercised. McHugh J. in Gallo v Dawson [1990] HCA 30 spoke of the rules of courts not being seen as instruments of injustice. The discretion (which is clear and obvious from the rule) to extend time is given for the sole purpose of enabling a court to do justice between the parties. His Honour went on to say that the discretion can only be exercised “upon proof that strict compliance with the Rules will work an injustice upon the applicant”. That also required consideration of the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences for the parties of a grant or refusal for the application for extension of time. Significantly in Gallo v Dawson, McHugh J. referred to the fact that it was necessary to also consider the prospects of success in that application.
Having regard to matters referred to by McHugh J and the findings above, the applicant must now have the opportunity to receive an account which sets out the charges outside of those which attract the hourly rate for the lawyer.
That exercise will be difficult not just because of the lapse of time but also because the respondent changed its billing program and older records may be difficult to provide. That is not a basis to refuse the applicant’s request. However, the applicant will need to be conscious of the other cost consequences for requiring such an exercise and then challenging the itemised account. Chapter 19 of the rules sets out clearly how the assessment process is to be conducted. The parties will have to consider, and the registrar will have to deal with, rule 19.32(2). If the applicant raises issues of the reasonableness of the work done by the lawyer in respect of those hours billed at $460 per hour, rule 19.34(1) will come into play. The applicant will need to carefully consider the evidence he has given and the correspondence sent relating to his complaints about what was done for him.

Costs of this proceeding

Rather than the parties incurring further costs should any application for costs arising from these proceedings be made, I shall make orders for written submissions and the matter can be determined in chambers.

SCHEDULE OF DOCUMENTS RELIED UPON

The Applicant

The application in a case filed 23 April 2010
Affidavit of the applicant filed 8 September 2010
Affidavit of the applicant filed 23 April 2010
Affidavit of the applicant filed 8 November 2011
Amended points of claim filed 8 November 2011

The Respondent

Amended response filed 11 November 2011
Amended points of defence filed 15 November 2011
Affidavit of Mr C filed 20 April 2011
Affidavit of Mr C filed 21 July 2010
Affidavit of Mr F filed 4 April 2011
Affidavit of Mr C filed 11 November 2011
Affidavit of Mr G filed 27 September 2011
Affidavit of Mr Z filed 10 May 2011
Affidavit of Mr P filed 4 April 2011
Affidavit of Ms D filed 4 April 2011

I certify that the preceding One Hundred and Twenty Five (125) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 24 May 2012.

Associate:

Date: 24 May 2012