Solicitor and Client – Whether costs of costs assessment in excess of scope and nature of dispute

Radich v Kenway & Anor [2014] QDC 60

PROCEEDURE – INFERIOR COURTS – QUEENSLAND – MAGISTRATES‘ COURTS – APPEAL AND NEW TRIAL – appeal of Magistrate‘s decision to affirm the decision of a

costs assessor

COSTS – Solicitor and Client – assessment of itemised bills – Whether costs of costs assessment in excess of scope and nature of dispute - whether whole assessment ought to be set aside

COSTS – Solicitor and Client – assessment of itemised bills – breach of natural justice – reassessment of items by magistrate – whether reassessment ought to be set aside

Introduction.

The Appellant Solicitor appealed the decisions of the Magistrate in the Southport Magistrates Court upholding the Costs Assessors Certificate of Glenn Walter that was ordered to be assessed pursuant to s 335(1) of the Legal Profession Act 2007. The Appellant/ Plaintiff filed a claim for fees owing for two matters however this was significantly decreased on assessment and the Solicitor Plaintiff was also ordered to pay the costs assessors fees and the defendant’s fess respondent’s costs. The Appellant/ Plaintiff was also required to pay the Costs Assessor’s Reasons for Decision.

The Appellant/Plaintiff appealed on four basis on the basis that the Costs Assessors review of the whole file was in excess as:

1. the costs of the assessment were greater than the costs to be assessed under r 720 of the UCPR;

2. the assessment was in excess of the scope and nature of the dispute;

3. the assessment was not in accordance with the rules of natural justice, and specifically the costs assessor failed to notify the parties that he intended to review the entire file;

The Appellant also submitted hat the Magistrate erred in the way he dealt with the evidence of Ms Davis, the Costs Assessor who prepared the bills.

Ground 1 - r 720 of the UCPR, in that the costs of the assessment were greater than the costs to be assessed.

The Appellant did not take issue of the Costs Assessors directions under which the parties’ submissions and submissions in reply where to be tendered on particular dates, nor the Costs Assessors fees stated in the letter. [20] However the Appellant contended that as the Costs Assessment fees were greater than the assessed fees the result was wrong. [21] The Appellant contended that the fees should cost less than $2,000, however this was based on an Affidavit of Ms Davis, the Costs Assessor who prepared the bills. [22] When rejecting the argument His Honour considered that when allying the interests of natural justice there was no obvious reason why the process adopted as the Costs Assessors could have been more efficient. [24]

Ground 2: Scope of the assessment

The Appellant submitted that the assessment should have been limited to those bills subject to the claim. What was in dispute was the definition of “all” or “part” of legal costs under 335(1) of the Legal Profession Act 2007. The Order dated 15 June 2010 states that “the legal costs issued by the plaintiff to the defendant on 15 June 2010 and described as” the invoices to be assessed. His Honour took the broad interpretation of “legal costs” to be “all legal costs” otherwise it would have been ordered that “part” legal costs be assessed. [26] The Respondent/ Defendant filed the Application for the assessment of “all” legal costs which the Appellant/ Plaintiff agreed to. [33]

His Honour also considered r743 when considering whether further evidence should be considered to that not included in the supporting Affidavit to the Application to appoint costs assessor. His Honour considered that as the proposition that the scope of costs (part or all costs) was not brought to the attention to the costs assessor in the assessment, was a limitation of the grounds of review. His Honour stated that Rule 742(5) “operates as a constraint on the process of the review, by providing that no further evidence is to be received, and a party may not raise any ground of objection not stated in the application for assessment or a notice of objection or raised before the costs assessor”. [30]

His Honour also considered that on Solicitor and own client assessments a taxing officer must consider the whole file in the circumstances of the determination of overcharging. [29] The Costs Assessor found serious failures with disclosure obligation and reduced the first bill in accordance with s316(4) of the act and reduced the first bill accordingly, however did not adjust the second bill due to the small quantum in the second bill and the large adjustments in the first bill. [38]

Ground 3: Breach of natural justice.

The Appellant/Plaintiff submitted that there was a breach of natural justice, not on behalf of the Costs Assessor but that of the Magistrate. It was accepted by the Magistrate that the failure to request submissions from the Appellant/Plaintiff on specific items in the bills was a breach of natural justice. [42] However His Honour found that as serious objection was made to each of the items in contention and the Magistrates dealt with them in the most efficient manner without sending the matter back to costs assessment their was no breach of natural justice on behalf of the Magistrates. [48]

Ground 4: Rejection of Ms Davis’ evidence

The Appellant/Plaintiff submitted that the Magistrate erred in not accepting the expert evidence of Ms Davis on the issue of proper costs of the assessment. [49] The Magistrate found that as the Costs Assessor who prepared the bills Ms. Davis was conflicted and not an independent expert. His Honour also rejected the submissions that the Magistrate erred when referring to items that were incorrectly claimed on the District Court Scale on the facts. [50]