Procedure – Costs – Costs Assessment – Itemised Bills

Tabtill No 2 Pty Ltd & Ors v DLA Phillips Fox (a firm) & Anor [2012] QSC 115.

PROCEDURE – COSTS – Costs assessment – where legal services were provided by the respondents to the applicants between December 2007 and September 2011 – where 115 tax invoices were issued for those legal services – where applicant seeks assessment of costs pursuant to s 335 Legal Profession Act 2007 (Qld) (“the Act”) – where many invoices were issued more than 12 months prior to the application being filed on 2 March 2012 – where respondent accepts that the applicant is entitled to assessment in relation to invoices issued within 12 months prior to 2 March 2012 – where respondent contends that the applicant is time-barred in relation to earlier invoices by virtue of s 335(5) of the Act – whether invoices constitute interim or final bills – whether applicant is entitled to an assessment of costs on all invoices issued by the respondent

PROCEDURE – COSTS – Itemised bills – where applicant seeks a direction pursuant to r 743C Uniform Civil Procedure Rules 1999 (Qld) that the respondent deliver itemised bills – whether information provided by the respondents to the applicants is inadequate – whether the respondent should be directed to deliver itemised bills

On or about 20 December 2007 DLA Phillips Fox were retained to act for the applicants and other parties in relation to a dispute between those parties and Felix Creswick. On or about 28 February 2008, the first respondents entered into a client agreement with the applicants. Under the heading “instructions” the agreement contained the following:

“I confirm that we will provide legal services in relation to the dispute between John Creswick, William Creswick, Shayne Creswick and Jayne Creswick and all the other parties to the litigation and their estranged father/ father in law, Felix Creswick. Legal services include acting in relation to the Supreme Court of Queensland proceedings No 10963 of 2007 and No 1927 of 2007, and associated disputes between parties.”

The total amount billed over the years in various matters has been calculated at $6,701,389.74 of which $2,475,584.79 has been paid.

The matters include:

· 10963 of 2007 – preparation and trial instructions (items 1 to 25, 29, 32 and 37) – was completed by

first respondent once trial concluded on 2 November 2009

· 10963 of 2007 – post trial instructions (items 26 to 28) – final bill for work performed was delivered

in 2010

· Bunker Road Development (items 53 to 62) – final bill for work performed pursuant to these

instructions was delivered in 2009

· Crewick Group Restructure (item 63) – invoice was issued on 31 March 2009 and it was paid

· Hamilton Road, Moorooka (items 63 to 68) – final bill for work performed pursuant to these

instructions was delivered in 2010

· GE Caveat Issues (items 69 to 75) – invoices issued between 25 September 2009 and 20 April 2011.

· Tabtill Appeal (items 77 to 94) – Invoices issued between 30 September 2010 and 30 November

2011

· Costs Arguments ( items 95 to 104) – invoices issues between 30 September 2010 and 27 July 2011

· 10963 of 2007 - Real Estate (item 105) – invoice issued 20 April 2011

· 503 Logan Road (items 106 to 113) – retained on or about 23 February 2011

· Rates proceeding (item 114) – On or about 13 April 2011 retained to act for the applicants

· Purchase of 504 Logan Road Stones Corner (item 115) – retained to act for applicants on or about 14

September 2011

For the first six matters listed the respondents submit that the applicants are time-barred from seeking an assessment. However for the rest, they acknowledge that the applicants are entitled to an order that they be assessed.

The two issues to be decided are:

(1) Whether the applicants are entitled to an assessment of the whole or any part of the costs and

whether the application for assessment is met in part by the 12 month time limit contained in

s335(5)

(2) Whether the judge should order an itemised bill be given in respect of those costs to which the

applicants are entitled to an assessment

ISSUE ONE:

The resolution for the first issue turns if and when final bills were given.

In deciding this, the judge looked at the legal services which the respondents were retained to provide from time to time. The respondents were retained on or about 20 December 2007 on an urgent basis to act in respect of the Supreme Court Proceeding that had been commenced and was specifically retained to take all necessary steps to prepare for and represent the applicants at the trial to determine their claim. After 12 February 2008, they were specifically retained to take all necessary steps to prepare for and represent the applicants at the trial to determine the counterclaim that had been commenced. The contents of the client agreement can be seen above. As such the Judge accepted there is no evidence that the general instructions were terminated and that the client agreement remained in force after 9 November 2009. However, he believed this does not necessarily lead to the conclusion that the tax invoices which are items 1 to 25, 29, 32 and 37 constitute interim bills as the applicants are alleging.

The judge referred to Turner v Mitchells Solicitors where his honour considered issues as to whether there was a break in the retainer of the respondent in that case and observed that if there is a retainer to do further work, the issue may be whether it was terminated or broken. His honour went on to say that if the particular legal work is then completed, and there have been no further instructions, then the legal services the solicitor is retained to provide have been performed. If a bill is sent at that point it is a final bill, and it does not become an interim bill simply because at some later stage further instructions are given for additional legal services to be provided to which the earlier costs agreement also applies.

In Re Romer & Haslam it was said that equity developed the principle that distinctly identifiable parts of the retainer would constitute a separate retainer for the purposes of billing and if a natural break occurred in the conduct of the litigation a bill could be delivered.

In this case, the particular legal work involving preparation for the trial and appearance at trial was completed on 9 November 2009 and nothing more needed to done at that point. As such there was a natural break in the litigation at the conclusion of the trial. As a result the judge accepted that items 1 to 25, 29, 32 and 37 were final bills and that the applicants were time-barred from seeking an assessment.

The judge also accepted that items 26 to 28, 53 to 68 were separate distinct legal services and that the applicants were time barred from seeking as assessment of those invoices aswell.

ISSUE TWO:

In Clayton Utz Lawyers v P & W Enterprises Pty Ltd the principles governing whether a bill is itemised was discussed. It that case it was stated that the courts have held that a bill of costs must contain such details as will enable a client to make up his mind on the subject of taxation and will enable those advising him to advise him effectively as to whether taxation is desirable or not.

The applicants have an onus to demonstrate that they have not been provided with an itemised bill in accordance with their statutory requirement in order to get an order pursuant to r743C. The preparedness of the respondent to provide additional information upon request is a relevant discretionary consideration under r743C. It is also notable that the applicant’s current legal advisors include the partner who had the conduct of the matters on behalf of the applicant when he was a member of the respondents firm and solicitors who undertook work on the relevant files worked at the respondents firm. Further Mr Gill gave evidence that John and William Creswick had extremely detailed knowledge of all matters undertaken and there is no evidence that they lacked commercial sophistication or that they did not closely follow the course of the proceedings.

The applicants came to the view that the invoices were not itemised bill after scanning the documents that had been delivered and outlined in broad terms that the invoices did not provide adequate description of the work undertaken.

The judge referred to the case of Ralph Hume Garry v Gfwillim (CA) where the test was described as whether the information on the bill supplemented by what is subjectively known to the client enables the client with advice to make an informed decision whether or not to exercise the only right then open to him.

The judge was not persuaded that any such additional information is required in the circumstances to enable the applicants to make an informed decision whether to seek assessment and that he was not exercising his discretion to make direction under r743C.