Running Account on Debts similar to that of interim bills under the Legal Profession Act.

Stockley Furlong (a firm) v Hyde [2022] QSC 285

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – JOINDER OF CAUSES OF ACTIONS AND OF PARTIES – MATTERS RELATING TO LIMITATION PERIOD

Facts.

In October 2016, the Plaintiff commenced proceedings against the Plaintiff for outstanding monies owed concerning legal services provided regarding a matrimonial property dispute. The services were provided between October 2005 and 12 October 2016. As is normal with matters involving litigation, especially over such a length of time this results in a fluctuating balance with various invoices (presumably issued and paid) during this time[4]. The Defendant counterclaimed instead that the Plaintiff was indebted to the Defendant for the charging of interest on interest and overcharging [6].

In January 2021 by consent the matter was transferred to the District Court as with the Counterclaim the matter now (presumably) exceeded the jurisdiction of the Magistrate Court. Several revised Defences and counterclaims were issued with the one now being in dispute dated 02 November 2022. However, it was noted that the claims in the Counterclaim remained unchanged from the original version. [7]

Consideration.

The Plaintiff contended that the claims in the Counterclaim were statute barred by operation of s 10(2) of the Limitation of Actions Act 1974 (Qld) and leave was required under s376 of the Uniform Civil Procedure Rules 1999 (QLD) to amend the Pleading. The fees incurred with respect to October 2005 and 2010 are the first of two cost agreements. The Plaintiff contended a new cause of action of limitation period stated when a payment was made in respect to an outstanding debt. However, His Honour followed Re Footman Bower & Co Ltd [1961] Ch 443 at 452 (Footman) who stated that “The much more acceptable view seems to me to be that by making a payment generally on account the debtor makes it on account of the whole of his indebtedness, that is to say, on account of the balance outstanding and due at the date of payment”

Determination

His Honour accepted that the new cause of action (that being fees incurred in respect to the second costs agreement) arose “out of the same facts or substantially the same facts as a cause of action for which relief has already been claimed in the proceeding by the party applying for leave to make the amendment” [13]. He granted leave to amend under rule 376 (UCPR) following Draney v Barry [2002] 1 Qd R 145, 164 [57]. The limitation for the Counterclaim ran from March 2016 [12] as the last payment made by the Defendant to the Plaintiff as against October 2010 date contended by the Plaintiff [9]

Can the Defendant apply for a Costs Assessment.

Interesting the balance of the running account as referred to in Re Footman reflects the same determination in respect to the operation of s335 of the Legal Profession Act 2006 (the Act). The Plaintiff would likely argue that any application for costs assessment runs from the date of when the invoice was issued that being October 2010 (of their abouts) for the First Costs Agreement or October 2016 (or their abouts) for the Second Costs Agreement. However, the Defendant would likely contend that all invoices issued were “interim bills” by operation s333(2) of the Act unless there was a natural break and that the 12 months ran from October 2016. (see Seymour & Anor v WJ Markwell & Associates [2023] QDC 112

As the 12 months has clearly expired as of the date of the Judgment the Plaintiff would argue that the Defendant is out of time to apply for a Costs Assessment. However, the Defendant would argue as the matter has been litigated since October 2016 the Defendant has not had the opportunity to formally apply for a Costs Assessment.