Trinity Law Pty Limited v Krishinan
[2009] ACAT 45
•28 October 2009
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
TRINITY LAW PTY LIMITED v KRISHINAN (Civil Disputes) [2009] ACAT 45
XD 397 of 2009
Catchwords: Civil Dispute – Legal costs assessments; the Tribunal’s jurisdiction
Legal Profession Act 2006, Pt 3.2
ACT Civil and Administrative Tribunal Act 2008, Pt 4
Trade Practices Act 1974, Pt IVAMiller ‘Millers Annotated Trade Practices Act’ 25th ed at [1.51AA.10
Tribunal: Mr A Anforth Senior Member
Date of Orders: 28 October 2009
Date of Reasons for Decision: 28 October 2009
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) XD 397 of 2009
BETWEEN:
TRINITY LAW PTY LIMITED Applicant
AND:
KRISHNA KRISHINAN
Respondent
Tribunal:Mr A Anforth Senior Member
Date: 28 October 2009
INTERIM ORDERS
The Tribunal has jurisdiction to hear and determine the Applicant’s claim;
The matter is to be listed part heard before Senior Member Anforth for finalisation; and
The Respondent is to file and serve any relevant defence with particulars of the defence by 30 October 2009.
………..……………………………..
Mr A Anforth
Senior Member
REASONS FOR DECISION
Overview of the dispute:
The Applicant is a firm of solicitors practicing in the ACT and the Respondent is a former client of the Applicant.
It is common ground that on or about 15 October 2008 the Respondent contracted with the Applicant to render legal services and a costs agreement was drawn and executed. The fees agreement contained an interest clause for interest to accrue at 11% pa on any invoice unpaid for more than 30 days.
The Applicant contends that it carried out the tasks required of it under the fees agreement. It is common ground that the Applicant rendered two invoices dated 29 October 2008 and 30 January 2009 in the sums of $3250.50 and $1284.80 respectively. Itemised bills in the same amounts were subsequently rendered by the Applicant.
It is common ground that the Respondent has paid only $1000.00 of the sums set out in the invoices. The Respondent disputes his liability to pay any greater sum.
On the 1 May 2009 the Applicant filed an application in the Tribunal for an order that the Respondent pay legal costs said to have been incurred by the Applicant on the Respondent’s behalf. The costs claimed were:
(a)$3535.30 for costs
(b)$177.19 for interest continuing the rate of $1.40 per day
(c)$112.00 for the filing fee in the Tribunal.
On 27 May 2009 the Respondent filed his Response which read:
By way of background, on 15 October 2008, a meeting was held at Trinity Law Present were Morris, Kate Mahoney, Yoges Kashyap and myself. The reason I went to Morris was because Yoges told me that Trinity Law had other proceedings with Mr lyengar (Raisha Projects). Yoges informed me that Morris’s costs were very reasonable when he (Morris) acted for Yoges. Yoges told me that it would cost me less than $1000.00 (as we are asking Mr lyengar to supply us documents, in relation to his claim)
One of the matters that was discussed was the issue of costs. Morris explained to us that it is likely that proceedings will be delayed and given the nature, the costs will be approximately $3,000 to $5,000 (if it went to trial). It was also discussed at the meeting that security of costs would be useful to apply pressure on Mr lyengar. So far I had one meeting with Greg Walker and he appeared in court once.
Given that Mr lyengar has been declared bankrupt, no further proceedings can take place. I had to burrow an extra $80,000 to complete my house extension. I will not be able to recoup my costs from Mr lyengar. This has increased my loan to $350,000. The bank has refused to lend me any more money as I have exceeded the borrowing capacity.
I consider that the costs are excessive, given that very little has been done so far. Morris charged far less than $1000.00 for more work done for Yoges Kashyap. This was discussed with Morris. I appeal to you for a more reduced cost.
The matter was listed for a conciliation conference on 6 July 2009 but was not resolved.
The matter was then listed for hearing on 30 July 2009. On that occasion Ms Mahoney appeared for the Applicant and the Respondent appeared in person.
Ms Mahoney tendered a document that set out the claim made and contained a chronology of the relevant events. It read:
The Applicant respectfully requests that the Member of the ACT Civil and Administrative Tribunal make the following orders:
1. That the applicant be awarded judgment in the sum of $3,951.89 including interest and filing fee.
2. That the respondent pay the full amount within 30 days of judgment,
Or in the alternative,
3. That the respondent pay the full amount by instalments, as determined to be reasonable by the Tribunal.
4. Any other orders that the Tribunal considers appropriate.
THE APPLICANT'S SUBMISSIONS
1. The applicant seeks leave to tender evidence in the form of documents which are marked 'Bundle of Documents'.
Background
2. By way of background, the applicant submits that the respondent approached them in respect of providing legal services in relation to a claim made against him by Raisha Projects Pty Ltd ("Raisha") in the Magistrates Court for unpaid monies in a Construction Dispute.
3. On or about 15 October 2009, the respondent visited the applicant's office to provide instructions. The respondent provided documentation, in relation to the Construction Dispute. The respondent instructed the applicant in relation to the dispute in the Magistrates Court, and the preparation of an application for security for costs.
4. On or about 20 October 2009, the applicant confirmed the instructions in writing with the client. The applicant also made specific reference to the fact that Raisha was an unrepresented litigant and in their experience Raisha had caused considerable delays and frustrations to other clients and that this may increase legal fees.
5. Further solicitors are regulated by the Legal Profession Act 2001. Specifically, Division 3.2 provides that solicitors must provide costs disclosure. Enclosed with the letter dated 20 October 2009, the applicant provided the respondent with the Costs Agreement. The applicant also provided an estimate of $5,000 to complete the work under those instructions, stating that the actual cost would depend on whether the applicant gave further instructions, the attitude of Raisha and time spent on the matter.
Work completed6. The applicant refers to the Bundle of Documents and submits that it provided advice in relation to the matter in accordance with the instructions and within the scope of the retainer by doing the following:
a. Taking and confirming instructions from the respondent, providing advice, initially, and continually during the course of the retainer;
b. Perusal of relevant documents provided by the client, including pleadings and evidence;
c. Re-listing the matter in the Magistrates Court, which included drafting letter and supporting affidavit;
d. Attendance at the Magistrates Court in respect of directions to be made in respect of the defence;
e. Various letters to Raisha including correspondence requesting further and better particulars in respect of the claim made against the respondent, in accordance with the Orders of the Magistrates Court, offers of settlement;
f. Review of the law and grounds for an application for security for costs and in ascertaining whether such an application would be appropriate, investigating a winding up application which had been previously made against Raisha by a third party;
g. Obtaining garage truss plans, for the respondent.
7. It is submitted that despite receiving the invoice dated 29 October 2008 the respondent continued to provide further instructions to the applicant in relation to the matter in November and December.
8. In late January 2009 the respondent attended the applicant's office and requested advice in relation to his overall position with respect to the matter. The applicant gave written advice in response, disclosing further costs to progress the matter and provided this advice without any further charges to the defendant.
Offers to settle
9. In early February 2009, and March 2009 the respondent made some objection to the amount owed to the applicant which was approximately $4,535.30.
10. On or about 4 March 2009, the applicant responded to the applicant, indicating that the bill had already been discounted by approximately $800.00
11. On or about 13 March 2009, the applicant met with the respondent in an attempt to resolve the matter. The applicant offered to settle the matter for a total $3,655.00 (less the payment of $1,000 which was later paid), which meant that the respondent would need to pay a further $2,655.00. The applicant offered the respondent the opportunity to retain an independent costs assessor at the applicant's cost and agreed to be bound by that determination.
12. On or about 16 March 2009, the applicant offered a further settlement which included options for the respondent included a further discounted fee if the money was paid within 14 days or payment of the account by instalments.
13. The respondent has offered $1,000 (in addition to the already paid $1,000) as full and final satisfaction of the account, which has been refused by the applicant.
14. All offers made by the applicant have been refused by the respondent.
Applicant's Claim
15. The applicant's claim is a liquidated demand relating to a debt owed to it for services provided in accordance with the instructions given to it by the respondent.
Respondent's defence/response
16. The respondent admits that money is owing to the applicant but objects to the quantum.
17. The respondent is required to provide the applicant with some defence and/or counterclaim. It is not enough for the defendant to simply deny the debt. Instead the defendant must deny the matters of fact from which the defendant's liability is alleged to arise that are disputed: Rule 442 Court Procedure Rules.
18. It is submitted that the respondent has simply denied the debt without reference to any facts relevant in issue. Specifically, the respondent in his response refers to the following:
a. Work provided for other clients of the applicant;
b. Cost estimates for legal services for which no documentation can be provided;
c. The respondent's personal financial situation.
19. It is submitted that the work provided for other clients is irrelevant to these facts in issue; that the costs estimates do not reflect the correspondence and that the respondent's financial situation is irrelevant, but that the applicant has offered the opportunity for the respondent to pay by instalments.
20. The applicant submits that this does not constitute a valid defence or response which the applicant can create a meaningful reply to.
21. In the event that the respondent seeks to be relieved from paying the amount in the claim on the basis that the work completed by the applicant was unreasonable and unnecessary, the applicant submits the following:
i. That the applicant gave the respondent the opportunity to have the costs assessed, either by an independent assessor (at the applicant's cost); and/or
ii. That the respondent has the right to apply to the Supreme Court to have the bill assessed: section 294A Legal Profession Act 2001.1. It should also be noted that the respondent has been notified of this right (invoices)
22. The respondent has refused to take any action.
10. The Bundle of documents tendered by the Applicant included the following:
(a) A letter of 20 October 2008 from the Applicant to the Respondent setting out the instructions provided. In relation to costs the letter stated:
‘At this point our estimate of costs of relisting the matter and making the application for the security for costs will be approximately $5,000. We should stress that this is an estimate only …’
(b) A copy of the Fees Agreement showing the estimate only of $5,000.00.
(c) A copy or various correspondence and court documents associated with the action in the Magistrates Court.
(d) An itemised bill for work performed between 14 October 2008 and 29 October 2008 dated 29 October 2008 in the sum of $3250.50 (inclusive of GST).
(e) A Notice of Client’s Rights to have the itemised bill assessed under Part 3.2 Legal Profession Act 2006.
(f) An itemised bill for work performed between 28 October 2008 and 16 December 2008 dated 30 January 2009 in the sum of $1284.80 (inclusive of GST).
11. At the hearing the Respondent informed the Tribunal that he was in fact a legal officer in the employ of the Commonwealth.
12. At the hearing the Tribunal raised the issue of its jurisdiction to hear and determine this claim. The Applicant was of view that the jurisdiction arose from the contractual nature of the claim and that it was a ‘civil dispute’ within the meaning of Part 4 ACT Civil and Administrative Tribunal Act 2008. The Respondent expressed no view on the matter.
13. Because of its own concerns regarding jurisdiction the Tribunal determined to resolve this issue before embarking on an exploration of the merits of the claim. The Tribunal informed the parties that it would be assisted by submissions on the jurisdictional point. To this end the matter would be adjourned to 10 August 2008 which may also provide time for a commercial resolution of the matter.
14. On 7 August 2009 the Applicant advised the Tribunal in writing that no commercial resolution had been reached, that it would not appear on 10 August 2009 but would file and serve submissions on the jurisdictional point by 24 August 2009.
15. On 10 August 2009 there no appearance of the parties and the Tribunal made orders for the filing and serving of submissions. The Applicant was to file and serve by 24 August 2009 and the Respondent by 24 September 2009. The orders further provided that unless the parties notified their wish to be heard orally on the submissions, the Tribunal would proceed to a decision on the jurisdictional question on the papers.
16. On 24 August 2009 the Applicant filed its submissions on the jurisdictional issue, which read:
1. The applicant seeks leave to refer to the partial hearing of the matter before Senior Member Anforth on 30 July 2009.
2. During the course of the hearing Senior Member Anforth raised a jurisdictional question in respect of costs assessments as referred to in Division 3.2.7 Legal Profession Act 2006 (ACT) ("the LPA").
3. The jurisdictional issue is whether section 296 of the LPA establishes a 'code' for legal professionals, meaning that in order for a law practice to recover legal fees, that only the Supreme Court has jurisdiction to decide those types of matters.
4. Section 279 of the LPA provides that legal costs are recoverable under a costs agreement made in accordance with division 3.2,5.
5. Subsection 296(1) of the LPA relevantly provides:
(1) A law practice that has given a bill in accordance with division 3.2.6 (Billing) may apply to the Supreme Court for an assessment of all or any part of the legal costs to which the bill relates, (emphasis added).
6. Section 300C of the LPA relevantly provides:
300C Recovery of assessed costs
(1) This section applies if the Supreme Court assesses an amount of legal
costs.(3) If an amount of the legal costs has not been paid—
(a) the assessment is taken to be a judgment of the Supreme Court for the amount of the unpaid legal costs and may be enforced accordingly: and
(b) the rate of interest payable on the amount is the rate applying
under the Court Procedures Rules 2006, schedule 2, part 2.2 (Interest after
judgment), (emphasis added).
7. It is submitted that if section 296 of the LPA establishes a 'code', it would mean that if a law practice wanted to obtain a judgment to recover its costs, it would be required to do so by assessment in the Supreme Court rather than being able to proceed in the ACAT or some other court having jurisdiction to grant judgment for unpaid debts.
8. The determination of that issue may well depend upon the meaning to be applied to the word 'may' in subsection 296(1) of the LPA. If the meaning of 'may' represents a discretion to exercise a particular right in the Supreme Court, or to commence proceedings in a different court or tribunal which otherwise has jurisdiction, then the it follows that the ACAT would have jurisdiction in these types of matters.
9. Chapter 15 of the Legislation Act 2001 ("the LA") provides an aid to statutory interpretation. Specifically section 146 deals with the meaning of the words 'may' and 'must'. Relevantly subsection 146(1) of the LA relevantly provides:
146 Meaning of may and must
(1) In an Act or statutory instrument, the word may, or a similar term, used in relation to a function indicates that the function may be exercised or not exercised, at discretion.Note Function is defined in the diet, pt 1 to include authority, duty and power.
10. When used in relation to a 'function' that function may be exercised or not exercised at discretion. It follows that if the right to refer the matter to the Supreme Court is a function, then it is discretionary and the cost assessment provisions of the LPA cannot constitute a code.
11. The term ‘function’ is defined in the Dictionary, Part 1 to include 'authority duty and power'. The term 'duty' is probably irrelevant for these purposes and the term ‘authority’ suggests something more in the nature of authority vested in a public official although could conceivably be construed as meaning a ‘right’. The word 'power' is defined in the Macquarie Australian Dictionary 2009 as follows:
'Ability to do or act; capability of doing or effecting something'
12. The word 'power' suggests that it may be almost co-extensive with the term 'right'. In those circumstances it should follow that the power to do something (which it is submitted is what is granted to the law practice under section 296 of the LPA), gives it a right but not an obligation to proceed in that way to recover its costs. That would suggest that section 146 is applicable to the determination of the word 'may' and imports discretion.
13. Section 298 of the LPA relevantly provides that:
298 Consequences of application for costs assessment
If an application for a costs assessment is made in accordance with this division'—•
(a) the costs assessment must take place without any money being paid into court on account of the legal costs the subject of the application; and
(b) the law practice must not start a proceeding to recover the legal costs until the costs assessment has been completed.
14. This section suggests that there is an alternative to the institution of an application to the Supreme Court in the recovery of legal costs.
15. Section 300A of the LPA appears to be a contingent provision. Only when an application is filed in the Supreme Court, will the provision come into effect. If no application is filed, then the section will not apply.
16. There are also public policy considerations and it is submitted that it would be onerous for law practices to be obliged to apply to the Supreme Court to have their costs assessed, in the event that the defendant did not dispute the debt but could or would not pay it.
Summary
17. It is submitted that the ACAT has jurisdiction to hear this and other similar matters, and that it discretionary for the client, law practice or relevant third party payer to make an application to the Supreme Court for an assessment of costs.
18. It is further submitted that the defendant in these proceedings has not made an application to the Supreme Court for a costs assessment, and has not provided the applicant with a defence for the outstanding accounts, leaving the applicant to conclude that the defendant simply does not wish to pay the amount.
17. After some delays the Respondent filed his submissions on 2 October 2009 which read:
I do not have any comments to make in respect of the jurisdictional question. I further submit a defence in relation to the outstanding accounts claimed by Trinity Law and provide the following:
1. On 15 October 2008, a meeting was held at Trinity Law. Present were Morris Falcetta, Kate Mahoney, Yoges Kashyap and myself. The reason I came to Morris was because Yoges told me that Trinity Law had other proceedings with Mr lyengar. Yoges informed me that Morris' costs were very reasonable when he (Morris) acted for Yoges.
2. Section 269 of the Legal Profession Act 2006 (ACT) ('the Act') states that all costs specific to the matter detailing:
a. The scope of the work;
b. The costs associated with the work;
c. The timing likely to occur; and possible variables.3. One of the matters that were discussed was the issue of costs. Morris explained to me that it is likely that proceedings will be delayed and given the nature, the costs will be approximately $3,000 to maximum $5,000. It was also discussed at the meeting that security of costs would be useful to apply pressure on Mr lyengar. So far I had one meeting with Greg Walker and he appeared in court once.
4. The first matter that we had to deal is getting a copy of the claim of costs from Mr lyengar.
5. Further instructions were to follow once a copy of the claim of costs from Mr lyengar was received. However, no copy of the costs has been produced.
6. I received a letter dated 20 October 2008 detailing about the meeting of 15 October 2008 and discussions held. The options that were discussed:
a. arranging matter to be re-listed in the Magistrates Court; and
b. security of costs7. On 29 October 2008 I get a Bill for $3,250. I immediately ring Morris and he informed me that he would 'sort' the matter as to the costs. I took his word as a gentleman and assumed that he would discuss the matter with his staff and deal with the legal cost.
8. As stated above, my instructions were only in relation to a quite narrow scope of work, i.e, getting a copy of the claim of costs from Mr lyengar.
9. On 30 January 2009 at a meeting with Greg Walker, I informed him that there were rumours that Mr lyengar was about to be declared bankrupt. He informed me that he would get back to me. The next thing that happened was that a Bankruptcy proceeding was taking place against Mr lyengar.
10. On 4 March 2009, I wrote the following letter to Trinity Law:
"Given that Mr lyengar has been declared bankrupt, no further proceedings can take place. I had to borrow an extra $80,000 to complete my house extension. I will not be able to recoup my costs from Mr lyengar. This has increased my loan to $350,000. The bank has refused to lend me any more money as I have exceeded the borrowing capacity.
I consider that the costs are excessive, given that very little has been done so far.
I appeal to you for a more reduced cost. I am not trying to worm my way out paying the costs (as Greg stated). All I am asking is that that costs be fair and reasonable."
11 .The Deputy Registrar informed me that Maurice Falcetta and Greg Walker would be present at the conference where I would be able to verify the disputed claim. Neither Maurice Falcetta nor Greg Walker was prepared to appear in front of you the Senior Member. At the conference I would have been in a position to cross examine them to verify their claim.
12. I also explained to Maurice earlier in our discussions, that due to my financial difficulties, I was willing to pay another $1000 to make this matter go away. I further explained to him that I had other ongoing monthly medical expenses which are affecting my financial difficulties, (copies attached)
All I am seeking is a fair and equitable understanding in relation to the legal costs.
The legislative scheme in the Legal Profession Act 2006 (the Act):
18. The costs disclosure rules are contained in Part 3.2 of the Act. The present matter falls within the ambit of section 263 and so the provisions of Part 3.2 apply.
19.
Section 269 contains the content required of a costs agreement which, for present purposes relevantly include:
(a) the clients right to receive an itemised bill for work done
(b) an estimate of total likely future costs
(c) the interest rate on unpaid bills
(d) notification of review rights
20. There are a range of exceptions to the duty of disclosure in section 269 that are set out in section 272. One of those exceptions pertains to a client who is an “Australian legal practitioner”. This term is defined in section 8 to be a person who holds a local or interstate practicing certificate. The Respondent informed the Tribunal that he is a government lawyer. It is not known whether he also holds a local or interstate practicing certificate. For present purposes only the Tribunal assumes that the Respondent does not hold a local or interstate practicing certificate and therefore the disclosure provisions of section 269 apply to him. Ultimately this may need to be a matter for evidence.
21. Section 277 provides for the consequences of a failure by a lawyer to comply with the costs disclosure rules. Relevantly, in such circumstances:
(a) section 277(1) provides that the client is not required to pay any bill rendered until it has been assessed under division 3.2.7 of the Act;
(b) section 277(2) provides that the lawyer is not to commence proceedings against the client for recovery of the costs unless the costs have been assessed under division 3.2.7 of the Act.
22. Section 279 provides that if a valid costs agreement exists then it forms the basis upon which costs are to be recovered.
23. Section 281 limits the right of lawyers to recover interest on unpaid costs to circumstances where the costs agreement expressly provides for interest and only after the bill remains unpaid for 30 days.
24. Section 286 provides that a cost agreement may be enforced in the same way as any other contract.
25. Section 288 provides that costs agreement may be set aside by the Supreme Court on application by a client on the basis that the costs agreement is not fair or reasonable.
26. Section 289(1) provides that a lawyer cannot start legal proceedings to recover legal costs from a client until at least 30 days after a bill was rendered. Subsection 289(3) provides that if such proceedings are commenced in breach of section 289(1) the court or tribunal in which the proceedings are commenced must stay the proceedings.
27. Section 290 provides that the bill can be either in lump sum form or itemised form. If a lump sum bill is served, the client has 90 days to request a bill in itemised form (s292(3)).
28. If the bill upon which the lawyer relies to commence proceedings is a lump sum bill then the proceedings must not be commenced for 90 days after service of the bill (s292(6)). If the bill relied upon is an itemised bill then the proceedings may be commenced within 30 days (s292(7)).
29. Section 291 requires a Notification of Client’s Rights to be attached.
30. Division 3.2.7 of the Act is headed “Costs assessment”.
31. Section 294A provides that a client may apply to the Supreme Court for an assessment of legal costs. The application to the Supreme Court must be made within 12 months from when the bill was rendered or when the bill was paid.
32. Section 296 provides for the legal practice to apply to the Supreme Court for an assessment of its own bill, which must be conducted by reference to the fees agreement (s300A).
33. Where the legal practice applies to the Supreme Court for an assessment it must not commence proceedings to recover the legal costs until the assessment is complete (s298). The criteria for the assessment are set out in section 300.
34. The outcome of an assessment by the Supreme Court is taken to be a judgment of the Supreme Court (s300C). The costs of the cost assessment itself are dealt with in section 302.
Consideration of the issues:
35. For present purposes it appears to the Tribunal that:
(a) The Applicants costs agreement complies with Part 3.2 and thus section 277(2) has no application;
(b) The Applicants have rendered itemised bills;
(c) The itemised bills were rendered more than 30 days prior to the commencement of proceedings in the Tribunal; and
(d) Neither the Applicant nor the Respondent have commenced proceedings in the Supreme Court to assess the bills
36. The present cases involves a claim in contract by the Applicant for unpaid legal costs and a defence by way of complaint by the Respondent that the Applicant’s costs are unfair or unreasonable in terms of the work done. The Respondent has not alleged that the costs agreement itself is defective in any way or that there is any dishonesty in the description of the work set out in the itemised bills, he simply asserts that the costs associated with those items of work is unfair or unreasonable. The Respondent’s defence is squarely in the nature of a costs assessment.
37. The initial problem that exercised the Tribunal’s mind over jurisdiction was whether it had jurisdiction over the Applicant’s claim or the Respondents defence given that Division 3.2.7 of the Act expressly limits actions for assessment of costs to the Supreme Court irrespective of the quantum involved and irrespective of the court or tribunal in which the litigation occurred that gave rise to the costs dispute.
The Applicant’s claim:
38. Absent any application by either party to the Supreme Court for a costs assessment, then it seems that Division 3.2.7 of the Act is not enlivened. In these circumstances section 286 of the Act provides that a costs agreement can be enforced in the same way as any other contract.
39. The only limit imposed on the right of a law practice to commence proceedings to enforce its costs agreement are those that require an itemised bill to be rendered and for the passing of 30 days thereafter. In the present case both these requirements have been satisfied.
40. Section 289 of the Act specifically envisages that proceedings for recovery of costs may be brought in a court or tribunal of competent jurisdiction.
41. It therefore appears to the Tribunal that, absence any application by either party to the Supreme Court for assessment of the costs, the Applicant is entitled to commence the present proceedings in the Tribunal.
The Respondents defence:
42. The Respondent’s defence is entirely based on the alleged ‘unfair and unreasonable’ extent of the Applicant’s itemised bills.
43. The defence specially seeks a costs assessment within the meaning of Division 3.2.7 of the Act. Division 3.2.7 is sufficiently clear in limiting jurisdiction over costs assessments to the Supreme Court. This Tribunal has no jurisdiction in such matter and should any costs assessment commence in the Supreme Court then this Tribunal would be required to stay any action by the Applicant to enforce its bill of costs and then the assessment by the Supreme Court will constitute a judgment in the matter such that the proceedings in the Tribunal would need to then be dismissed.
44. The Tribunal has jurisdiction over contractual disputes. The contract in question in the present matter is constituted by:
(a) the costs agreement,
(b) any subsequent oral variation of that agreement
(c) any relevant oral instructions concerning the work to be undertaken
45. If the Applicant only carried out the work as instructed, within the limit of the estimate provided in the costs agreement and does so competently, then the only remaining contractual issue is whether the bill of costs is correctly drawn by reference to the fees agreement. In such circumstances there is no defence known to the law of contract that the bill is ‘unfair or unreasonable’.
46. In this case the Respondent has not alleged that the Applicant has either exceeded its instructions, exceeded the estimate provided or lacked competence.
47. It may be that a defence based on a bill being ‘unfair or unreasonable’ might conceivably enliven equitable principles of unconscionability that are embodied in Part IVA Trade Practices Act 1974 but there are obvious reasons why such a defence would seem to have no application in the present case:
(a) It is generally not ‘unconscionable’ for a party to rely upon the terms of a contract per see (Miller ‘Millers Annotated Trade Practices Act’ 25th ed at [1.51AA.10).
(b) The Respondent is himself a lawyer who stands in no position of disadvantage relevant to the Applicant.
(c) The Respondent has a relevant remedy in the Supreme Court under division 3.2.7 of the Act.
48. If the Respondent raises a defence relevant to the law of contract then the Tribunal would be required to consider that defence. But the nature of the Respondent’s defence is not one based in contract and is one that should have been directed to the Supreme Court by way of costs assessment.
49. Section 294A permits the Respondent 12 months from the date the bills are rendered to seek a costs assessment in the Supreme Court. This period of 12 months dates from the service of the original invoices rather than from the date of service of the itemised bill but even if the Respondent is now out of time to seek the costs assessment there is power in the Supreme Court to extend that time (s294A(6)).
50. However the Tribunal cannot stay the present proceedings unless and until the costs assessment is in fact filed in the Supreme Court, which may never happen.
51. For the above reasons the Tribunal is unable to give effect to the Respondents request for a costs assessment and finds that there is no relevant defence raised by the Respondent.
Decision:
52. The proceedings were adjourned for an interim decision on the jurisdictional issue. The Tribunal is satisfied that it has jurisdiction to entertain the Applicant’s claim.
53. In the course of preparing these reasons the Tribunal has come to the conclusion that the Respondent has no relevant defence to the claim.
54. In the ordinary course of proceedings the above finding would be sufficient to enter judgement for the Applicant. However given the fact that it was only ever put to the Respondent that this decision would deal with the jurisdictional issue, it may be unfair to the Respondent to enter judgement forthwith for the Applicant and procedural fairness may require that the Respondent be given a final opportunity to articulate any relevant defence that he has.
………..……………………………..
Mr A Anforth
Senior Member
PUBLICATION DETAILS
TO BE PUBLISHED
To be completed by Tribunal Staff
PART A FILE NO: XD 09/397
APPLICANT: TRINITY LAW PTY LIMITED
RESPONDENT: KRISHNA KRISHINAN
COUNSEL APPEARING: APPLICANT:
RESPONDENT:
SOLICITORS: APPLICANT:
RESPONDENT:
OTHER: APPLICANT: No Appearance
RESPONDENT: No Appearance
TRIBUNAL MEMBER/S: MR A ANFORTH SENIOR MEMBER
DATE/S OF HEARING: 10 AUGUST 2009 PLACE: CANBERRA
DATE/S OF DECISION: 28 OCTOBER 2009 PLACE: CANBERRA
PART B
RECOMMENDATION:
FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )
COMMENTS:
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