John Nicholl & Company Pty Ltd T/as Nicholl & Company v Donald Frederick Turner

• Jurisdiction: Australian Capital Territory
• Judge: Mossop M
• Judgment Date: 03 March 2015
• Docket Number: File Number(s): SC 352 of 2014
• Court: Supreme Court of ACT
• Date: 03 March 2015

[2015] ACTSC 42

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Before:

Mossop M

File Number(s): SC 352 of 2014

John Nicholl & Co Pty Ltd T/AS Nicholl & Co

(Plaintiff)

and

Donald Frederick Turner

(First Defendant)

Susan Jane Turner

(Second Defendant)

Representation:

Counsel:

Mr J Nicholl (Plaintiff)

Mr R Travers (Defendants)

Cases Cited:

Fazzolari v Parramatta CC (2009) 237 CLR 603

Law Society ACT v Goodman Law (2013) 279 FLR 383

Legislation Cited:

Court Procedure Rules 2006 (ACT)

Legal Profession Act 2006 (ACT)

Texts Cited:

D Pearce & R Geddes Statutory Interpretation in Australia (8 ^th ed) (LexisNexis Butterworths, 2014)

Australasian Parliamentary Counsel's Committee, Legal Profession – Model Laws Project Model Bill (2 ^nd ed, August 2006)

STATUTES — Interpretation — legal words and phrases in Legal Profession Act 2006 (ACT) s 304: ‘consumer dispute’ and ‘are or have been’ — effect of s 304 on the entitlement of a solicitor to have costs assessed

PROCEDURE — Costs — costs assessment — whether the making of a complaint to the Law Society operates to stay costs assessment proceedings — whether proceedings to recover costs may be brought — Legal Profession Act 2006 (ACT) ss 304, 409

Introduction

1 The plaintiff is attempting to recover fees said to be owed by the defendants, former clients of the plaintiff. The defendants are presently resisting the recovery of those fees.

2 After an application was filed for the assessment of the costs charged by the plaintiff, the first defendant made three complaints to the Law Society, including complaints relating to the costs that he was charged. The issue in these proceedings is whether s 304 of the Legal Profession Act 2006 (ACT) ( LPA) means that the assessment of the costs cannot proceed.

Background

3 The defendants engaged the plaintiff to provide legal services in relation to a dispute with a bank. Proceedings were subsequently commenced by the plaintiff in the Magistrates Court to recover unpaid fees from the defendants. Those proceedings were ultimately discontinued. On 7 August 2014 the plaintiff applied by originating application for an assessment of its costs pursuant to Division 3.2.7 of the LPA. The filed documents were sent by email to the defendants on 11 August 2014. By letter dated 18 August 2014 the defendants made a complaint by letter to the Law Society of the ACT. That letter contained some complaints in relation to costs. A further complaint was given to the Law Society by letter dated 2 September 2014. That letter included a complaint that the plaintiff was relying upon a bill drawn in accordance with a scale of costs rather than in accordance with the rate set in the fees agreement between the parties. A third complaint was made by letter dated 3 October 2014 relating to the commencement of Magistrates Court proceedings by the plaintiff in circumstances where costs had not been assessed.

4 The position adopted by the Complaints Committee of the Law Society in relation to the first complaint was that because there were proceedings on foot in the Supreme Court, namely, the proceedings seeking assessment of costs, it was not appropriate to consider the complaint of the defendants. As a result, the Law Society indicated that it would not commence an investigation at that time. In response to the second complaint the Law Society, in its letter dated 9 September 2014, adopted the same position.

5 In a further letter dated 16 September 2014 to the Law Society, the first defendant referred to the operation of s 304 of the LPA and requested that the Law Society ‘take [his] complaint seriously’ or ‘please explain to [him] exactly and pursuant to what authority [the Law Society] will continue to ignore [his] complaint’.

6 In a letter dated 23 September 2014 addressed to the first defendant the Law Society's Professional Standards Manager, Mr Reis, quoted the terms of s 304(1) and continued:

The provision suggests that costs assessment cannot be sought in circumstances where a complaint is or has previously been subject of a complaint. The material provided by you indicates that the application for assessment was lodged on 7 August 2014. Your complaint to the Law Society was written on 18 August 2014. In other words your complaint post-dated the application for assessment and does not fall within the proscription in section 304(1).

7 In October 2014 the plaintiff wrote to the Registrar of the Supreme Court indicating that the position of the Law Society remained that it did not propose to consider the complaint or otherwise deal with it until the Supreme Court proceedings were resolved.

8 In his email to the solicitor for the plaintiff dated 11 November 2014 Mr Reis said:

Mr Travers [the solicitor acting for the defendants] is of the view, and I accept s 304 is open to such an interpretation, that notwithstanding an application to have costs assessed has already been filed with the Supreme Court the lodging of a complaint precludes the parties from the right to have costs assessed on either party's application, The only entity permitted in those circumstances is the Law Society ( s 409 of the LPA).

I nevertheless remain of the view that s 304 is equally capable of an interpretation, and a must [sic] more consistent one, that parties in a costs dispute are precluded from applying for assessment once a complaint is made if an application has not already been filed with the Court. The preclusion does not apply if an application for assessment is filed before the complaint is made. This is supported by the words ‘are or have been’ the subject of a complaint. In other words a party's right to have costs assessed remains provided that there is not already a current complaint is being investigated or has previously been a complaint made and the investigation completed.

The latter interpretation, in my respectful view, maintains a party's essential right under the LPA to file for assessment of costs. The interpretation that arbitrarily overturns this right notwithstanding the complaint might well have no substance or in the worst case being mischievous should not be favoured. Such an interpretation does not support the proper administration of justice and could in the extreme amount to an abuse of process.

I therefore maintain my view that provided a party in dispute over costs has filed for assessment prior to the lodgement of a complaint with the Law Society s 304 does not apply to prohibit the maintenance of that right to see the assessment to conclusion or settlement.

9 Because of the issue in relation to the operation of s 304, on 3 December 2014 the proceedings now before me were referred to a judicial officer by a Deputy Registrar under r 6255 of the Court Procedure Rules 2006 (ACT) ( Rules).

Section 304

10 Section 304 of the LPA provides:

304 Legal costs subject to consumer dispute not assessable

• (1) Despite anything to the contrary in this part, legal costs that are or have been the subject of a consumer dispute under chapter 4 (Complaints and discipline) must not be the subject of a costs assessment under this division.

• (2) This section is subject to section 409 (Referral of matters for costs assessment—complaint investigation).

11 The following aspects of s 304 should be noted:

• (a) the provision prevails over ‘anything to the contrary’ in Part 3.2 ‘Costs Disclosure and Assessment’ of the LPA;

• (b) ‘consumer dispute’ is not a defined term;

• (c) Chapter 4 ‘Complaints and discipline’ (particularly Part 4.2) permits complaints to be made in relation to Australian legal practitioners and ‘solicitor employees’ (another undefined term);

• (d) the provision applies where the legal costs ‘are or have been’ the subject of a consumer dispute;

• (e) the section is subject to s 409 which is a provision in Chapter 4, Part 4.4 which deals with the investigation of complaints by, relevantly, the Law Society.

Submissions of the parties

12 The plaintiff, in effect, adopted the position articulated by Mr Reis of the Law Society. While recognising the force of the words of the section it submitted that an interpretation should not be adopted which would make any potential recovery of its fees subject to a decision of the Law Society as to whether or not to refer a matter to the Supreme Court for assessment. It suggested that such an interpretation would involve depriving it of vested rights and that it should not be adopted. It emphasised the difficulties facing a solicitor attempting to recover fees arising from a complaint being made after an application for assessment was made.

13 The defendants submitted that the words of the provision had the effect that where a complaint had been made under Chapter 4 relating to costs s 409 was the only means by which costs could be assessed. They submitted that the solicitor retained the right to enforce the costs agreement as if it was a contract subject to any other provision of the LPA that inhibited that entitlement.

Consideration

14 As I pointed out in Law Society ACT v Goodman Law (2013) 279 FLR 383 at [52], the ...