Tucker and Cowen v Donoghue

[2010] QMC 15

MAGISTRATES COURTS OF QUEENSLAND

CITATION:

Tucker and Cowen v Donoghue & Ors [2010] QMC 15

PARTIES:

DAVID ROBERT TUCKER AND RICHARD TERRICK COWEN TRADING AS TUCKER AND COWEN

(plaintiff)

v

SANDRA L DONOGHUE AS TRUSTEE FOR THE DONOGHUE FAMILY TRUST

(first defendant)

LEANNE MAREE AVERY

(second defendant)

GARY DONOGHUE

(third defendant)

FILE NO/S:

M13491/09

DIVISION:

Magistrates Courts

PROCEEDING:

Claim – Application for costs assessment

ORIGINATING COURT:

Magistrates Court at Brisbane

DELIVERED ON:

30 June 2010

DELIVERED AT:

Brisbane

HEARING DATE:

15 June 2010

MAGISTRATE:

Springer BL

ORDER:

The applicant/first defendant’s application is dismissed. The applicant is to pay the plaintiff’s costs in the application fixed in the sum of $520.

CATCHWORDS:

LEGAL PRACTITIONERS – COSTS – costs assessment - interim bills

Legal Profession Act 2007, s 333, s 335

Uniform Civil Procedure Rules 1999, r 743B

COUNSEL:

CR Cooke for plaintiff

Thomae for first defendant

SOLICITORS:

Tucker and Cowen for plaintiff

Bennett & Philp for first defendant

1. Tucker and Cowen Solicitors have commenced a legal proceeding in relation to unpaid legal fees associated with the legal work they claim to have done for the defendants.

1. The first defendant has applied for the appointment of a costs assessor “in accordance with sub-sections 335(5)(a) and (6) of the Legal Profession Act 2007 (LPA) and rule 743B of the Uniform Civil Procedure Rules 1999”.  

1. The respondent/plaintiff opposes the appointment of an assessor. If an assessor is not appointed, it will be up to the court to determine on the evidence provided to it at trial whether any, and if so, what amount claimed is recoverable from the defendants.

1. After some initial confusion, the applicant/first defendant to whom I hereafter refer to as “the applicant” made clear that the tax invoices in respect of which assessment was sought were only those the subject of the substantive proceedings between the parties. The statement of claim identifies the following invoices as unpaid by the applicant: 31 October 2008, 29 November 2008, 24 December 2008, 30 January 2009, 27 February 2009 and 22 July 2009. As the application before me is only the first defendant’s application I take it those are the only invoices in respect of which the assessment is sought. Different invoices are alleged to be unpaid and the amounts for those are claimed against other defendants.

1. The applicant relies on section 333 of the LPA which reads:

333 Interim bills

(1) A law practice may give a person an interim bill covering part only of the legal services the law practice was retained to provide.

(2) Legal costs that are the subject of an interim bill may be assessed under division 7, either at the time of the interim bill or at the time of the final bill, whether or not the interim bill has previously been assessed or paid.

1. Section 335 of the LPA permits a client to apply for an assessment of the whole or any part of legal costs. The application must be made within 12 months after “the bill was given, or the request for payment was made”.

1. The applicant refers to the existence of a tax invoice dated 22 July 2009, being a date less than 12 months ago. That invoice is directed to Mr and Mrs Donoghue at 52 Langside Road, Hamilton Queensland. Having regard to the existence of the earlier invoices, the total amount in that invoice (excluding accounts previously rendered) totals $5249.11. The invoice notes towards the bottom:

At date of issue:

Account previously rendered $41,393.71

Total amount due and owing $46,642.82

1. Further down the page it has the words “Terms 14 days”. Earlier invoices also included a similar expression, by which I understand to mean that the amount claimed in the invoice is payable within 14 days.

1. The applicant submits that she is entitled to an assessment because the most recent of the invoices, that of 22 July 2009 incorporates the amount outstanding from all earlier invoices and therefore I should view the earlier invoices as interim bills which may be assessed as referred to in s 333. If I were to take the view that is the case, that would dispose of the application, as there would be a clear legislative basis permitting the assessment.

1. The costs agreement was exhibited to the affidavit of Sandra Donoghue filed in support of her application. I note the costs agreement signed by the applicant and on behalf of the respondent states in item 10:

Itemised accounts, payable in full in 14 days, will be sent to you at regular intervals, usually monthly in arrears. …

1. I am told that there is little Queensland case law on the legislative provisions under consideration. I was referred to the decision of Justice Newnes in Lewis Blyth and Hooper v Dennis [2007] WASC 177 where he considers the issue of ‘entire contracts’ in relation to provision of legal services. He cited extracts from various old authorities and noted the distinction drawn historically between legal services provided in relation to common law claims and those in equity, those different jurisdictions producing different results. Historically, the contract with a solicitor retained to conduct common law claims was regarded as an entire contract. In contrast, in actions in equity, the notion of an entire contract was not supported, apparently because of the expected lengthy delay in having a matter finalised.

1. His Honour considered that in view of the current state of litigation, there should be a narrower scope for when “the obvious implication of the entire contract rule in the retainer of a solicitor to conduct litigation” would occur. He states at paragraph 52:

It is obvious that litigation has undergone very great changes since 1894, and particularly in the last 30 or 40 years or so with the enactment of a plethora of new or expanded rights of action and remedies, and substantial developments in the common law and in equity. All that, together with rapid advances in technology and fundamental changes in the nature of commercial life (including seemingly exponential increases in the amount of documents generated), have inevitably changed the face of litigation. Contested litigation nowadays is more often than not protracted and all too rarely simple. It is a very long way indeed from common law litigation of the nineteenth century.

1. Justice Newnes adopted the approach taken in the NSW decision of Cachia v Isaacs (1985) 3 NSWLR 366 at 377-8:

The decisions as to what are or are not entire contracts of retainer, and in which circumstances they may be terminated, involve no more than the application to solicitor-client contracts of principles generally applicable to contracts, except to the extent that questions of public policy intrude. Whether a contract in respect of the conduct of proceedings … is an entire contract must be determined by reference to the circumstances of the particular case, as must the question of what terms are to be implied as to the right of the solicitor or the client to terminate the retainer upon due notice or otherwise.

1. I accept that is the correct approach.

1. In relation to the matter before him, Justice Newnes took the view that the invoices were not part of a running account with one bill for the client to tax at the end of the relationship. There – as here – the retainer agreement:

entitled the appellant to charge from time to time for the work done to that date and provided that the respondent must pay for that work within 14 days of an invoice for it being rendered. That is, it provided for separate and distinct bills, each bill creating a separate and final liability of the respondent for the work to which it related.

1. He noted in passing that the invoices in question made no reference to any running total but were for separate and distinct amounts. While in the matter before me the invoice of 22 July 2009 did include the amount outstanding (representing the total of all unpaid invoices), in my view that does not alter the relevance of clause 10 of the costs agreement that I quoted earlier. In my view, the client agreement did not create an entire agreement, such that payment for the services performed only became payable at the conclusion of the work. Accordingly, the rendering of the accounts with payment required within 14 days – as specifically stated by the agreement – created a separate and final liability for the work to which each invoice related. The earlier invoices were not, in my view, interim bills, and accordingly, reliance on section 333 is not open to the defendants.

1. Section 335 of the LPA refers to a 12 month period. Subsections (5) and (6) of section 335 read:

(5) A costs application by a client or a third party payer must be made within 12 months after—

(a) the bill was given, or the request for payment was made, to the client or third party payer; or

(b) the costs were paid if neither a bill was given nor a request was made.

(6) However, a costs application made out of time, otherwise than by any of the following, may be dealt with by a costs assessor or a court if, under the Uniform Civil Procedure Rules, the assessor or the court decides to deal with it after considering the reasons for delay—

(a) a sophisticated client;

(b) a third party payer who …

1. I turn now to the power to consider the application out of time. Section 335 provides no guidance in considering the reasons for delay. The applicant deposes to various matters that I shall not repeat in full here. However I note that she deposes to:

v  Having no recollection of signing any document authorising one John Henderson to act as her agent in a share dispute

v  Mr Henderson took full control of the matter on her behalf and gave instructions to the plaintiff

v  Earlier invoices were sent to Mr Henderson, but those dated 31 October 2008 and later were addressed to the applicant at her residential address

v  Those invoices (as exhibited to the applicant’s affidavit) include a Form 2 under the LPA which includes the words:         

§   The following avenues are available to you if you are not happy with this bill

·     …

·     Discussing your concerns with us

·     Having our costs assessed …

v  Concerns over the number of hours or units spent on tasks for which invoices have been sent by the respondent.

1. Despite the applicant not recalling signing an authority to have others act on her behalf in the litigation which prompted the rendering of invoices that are the subject of this claim, there is no suggestion that the written authority is fraudulent.

1. Reliance on an agent requires the reposing of trust and confidence in the agent. In my view, a party engaged in litigation – as the first defendant was at material times – ought not simply abandon any interest in litigation in the fond hope that the agent will do all that is necessary to protect her interests.

1. I would agree with the description as submitted by the respondent that the agents were ‘sophisticated’, having regard to their respective backgrounds. They could therefore be expected to appreciate the consequences of their action or inaction. If important matters were not drawn to the principal’s attention by her agent, the principal is responsible for the consequences (subject to any claim she may have against the agent).

1. However, once the invoices were being forwarded to the applicant’s residence, she should have taken notice of them. The invoices were addressed to her and the third defendant (presumably) her husband and they contained the notice about an entitlement to assessment.

1. The earliest of the subject invoices dated 31 October 2008 includes “Account previously rendered $12,550-61”. If the applicant had concerns about the amount owing at that time, her options would have been clear to her.

1. Having regard to the information which I am satisfied was available to the applicant, as deposed to in her affidavit including the exhibits attached to that, and the affidavit of Richard Cowen for the respondent, I am not persuaded that the delay in bringing the application for assessment of the invoices that pre-date the July 2009 invoice justifies the application being made out of time as permitted by rule 335(6). Although the applicant refers in her affidavit to concerns over the number of hours or units spent on tasks for which invoices have been sent by the respondent, proper pre-trial preparation including inspection of the plaintiff’s file will enable testing at trial of the reasonableness of the number of units charged and the invoice amounts.

1. The application is dismissed. Given only 1 invoice is within the past 12 months, the court need make no order in relation to that. The applicant has essentially been unsuccessful in her application. Although the respondent plaintiff submitted for indemnity costs, I see nothing in the nature or conduct of the application that persuades me indemnity costs should be awarded.

1. The applicant/first defendant is ordered to pay the plaintiff/respondent’s costs of the application fixed by me at $520.

1. I will hear submissions about whether any directions are sought to progress the claim generally.