Foundas v Wright Lawyers [2021] NSWSC 1165

Supreme Court New South Wales

Medium Neutral Citation: Foundas v Wright Lawyers [2021] NSWSC 1165 Hearing dates: 2 September 2021 Date of orders: 14 September 2021 Decision date: 14 September 2021 Jurisdiction: Common Law Before: Harrison AsJ Decision: The Court Orders:

(1) The plaintiff's application to extend time to file her application for a review of the Costs Assessor's decision dated 20 June 2020 is refused. (2) The summons filed 11 June 2021 is dismissed. (3) No order as to costs. Catchwords: COSTS — Costs assessment — Review Costs Assessment – Extension of time to file review application – Application refused Legislation Cited: Legal Profession Act 2004 (NSW), ss 350, 373 Legal Profession Uniform Law (NSW), s 198 Cases Cited: Foundas v Wright Lawyers [2020] NSWSC 354 Category: Costs Parties: Cassani Foundas (Plaintiff) Wright Lawyers (Defendant) Representation: Counsel:

Solicitors: Mr D. Allan (Defendant) File Number(s): 2021/168804 Publication restriction: Nil

Judgment 1. HER HONOUR: By summons filed 11 June 2021 the plaintiff seeks an extension of the time to lodge a Review Costs Assessment in 2019/252616 Cassani Foundas v Wright Lawyers Pty Ltd. 2. The plaintiff is Cassani Foundas. The defendant is Wright Lawyers ("The Law Firm"). Ms Foundas is a former client of The Law Firm, she appeared in person and was articulate. Mr D. Allan appeared on behalf of the defendant. The hearing was conducted by audio visual link. The defendant neither opposed nor consented to the orders sought in the summons. Thus there is no active contradictor. 3. In Foundas v Wright Lawyers [2020] NSWSC 354, Wilson J helpfully outlined the history of the matters that gave rise to Ms Foundas application to extend time to file an application for a costs assessment at [12] to [30]. I have gratefully adopted and agree with this history. It is as follows: "[12] In September 2014 the plaintiff instructed the defendant firm to advise and act for her in a dispute with her brother over two Sydney properties. She signed a standard costs agreement with her solicitor on 22 September 2014. At cl 7.1, the costs agreement contained information as to the plaintiff's rights under the Legal Profession Act 2004 (NSW) ("the LP Act"), in the event of a dispute as to the legal costs incurred. [13] The plaintiff also executed a costs agreement with counsel who was to be briefed in the matter, on 22 September 2014. On the first page of that agreement a statement of the plaintiff's rights in relation to counsel's fees was set out, including her right to: Apply for the costs to be assessed within 12 months if you are unhappy with my costs. [14] The defendant and counsel subsequently undertook work for the plaintiff directed to the resolution of the dispute between Mrs Foundas and her brother. It is clear from some of the material relied upon by the defendant that the plaintiff was unhappy with the advice that she received from her lawyers, and rejected it. The dispute with her brother remained unresolved. [15] On 20 November 2014 an itemised tax invoice for $17,398.76, not including counsel's fees, was issued to the plaintiff by the defendant. The invoice on its face provided advice as to the client's rights if unhappy with the fees claimed. [16] On 24 February 2015 a further itemised tax invoice (for $8,206.28) was issued by the defendant to the plaintiff. Again, the invoice included information as to the costs assessment process available to the plaintiff if she disputed the costs. [17] On 24 April 2015 the defendant issued a further itemised invoice to the plaintiff (for $5174.40) which contained the same advice as to the availability of a process for costs assessment. [18] On 19 May 2015 the plaintiff's husband submitted a complaint to Office of the Legal Services Commissioner about the work done for the plaintiff by the defendant and counsel, and the cost of that work. [19] A month later, on 17 June 2015, the complaint was dismissed by the Legal Services Commissioner ("LSC" or "the Commissioner") as without foundation. The letter sent to the plaintiff's husband by the LSC provided advice as to the operation of the Supreme Court Costs Assessment Scheme, together with a Fact Sheet concerning the process for seeking a costs assessment. The twelve month time limitation for the submission of a request for costs assessment that applied by operation of s 350(4) of the LP Act was specifically referred to by the Commissioner. [20] On 10 June 2015, following receipt of advice from the defendant that the plaintiff had "cut communication" with her legal advisers, counsel issued his invoice, for $17,805. [21] A fortnight later, on 24 June 2015, the defendant terminated the agreement with the plaintiff and issued three invoices, being counsel's invoice and two from the defendant, consolidating all outstanding legal fees, payable within 14 days. [22] The following day the plaintiff's husband made a further complaint on the plaintiff's behalf to the OLSC concerning the defendant. The complaint also expressed dissatisfaction with the Commissioner's rejection of the first complaint. [23] On 1 July 2015 the plaintiff sent an email to the defendant, asking the defendant to "forward and lodge a detailed bill of costs to the Supreme Court for assessment by a [sic] independent court". [24] On 3 July 2015 the LSC responded to the plaintiff's second complaint, sending a letter to Mr Foundas declining to re-open the OLSC file. The Commissioner reiterated his earlier advice as to the procedure for seeking an assessment of legal costs, warning, Bear in mind that applications must be filed within 12 months of receiving the bill. [25] The defendant also wrote to the plaintiff, on 9 July 2015, with similar advice as to the process for seeking an assessment of costs. The defendant reminded the plaintiff that his invoices and that of counsel were "immediately due and payable". The correspondence suggested, If you are unwilling to pay please make application to the Supreme Court to have them assessed and I encourage you to do so. Go to the website of SCNSW or go into the registry at Queen square Sydney to obtain the form. [26] There followed a repeat of the information endorsed on the earlier invoices as to the plaintiff's "rights in relation to legal costs", including having the costs assessed, and a referral to a Fact Sheet on the topic. [27] On 1 July and again on 13 July 2015 the plaintiff sent an email to the defendant saying "I have requested you to go to the Supreme Court and submit your bill of costs to them for assessment". The defendant responded on 14 July 2015 pointing out clearly that "if you do not pay it is your responsibility to apply for cost assessment". The defendant also referred to the prospect of issuing a Statement of Claim if necessary. [28] Ultimately, that was the course taken when the plaintiff neither paid the outstanding invoices, nor applied for a costs assessment. On 10 November 2016 the defendant obtained a default judgment from Penrith Local Court against the plaintiff for the unpaid legal costs. Attempts to recover the monies were unsuccessful and, on 11 March 2019, the plaintiff obtained a stay of enforcement pending her motion to set aside the default judgment. [29] The default judgment was set aside on 3 April 2019. [30] Proceedings continued before the Local Court at Penrith, where they remained outstanding as at the date of the hearing of the plaintiff's Motion before this Court. The Local Court was prepared to adjourn the proceedings before it, pending resolution of the question of leave to the plaintiff to file a costs assessment application out of time." 1. Her Honour continued at [34] where she stated: "[34] Although it was not without some misgivings, given the extreme delay by the plaintiff in seeking the costs assessment, on the basis of the defendant's concession I made an order granting leave to the plaintiff to file a costs assessment application out of time." 1. Also at [47] her Honour stated: [47] Section 350 of the LP [Legal Profession] Act [2004] is the relevant provision. Although the Act was repealed from 1 July 2015 the invoices in question were issued prior to the replacement of the Act with the Legal Profession Uniform Law. Section 350 of the LP Act is relevantly in these terms: 350 Application by client… for costs assessment (1) A client may apply to the Manager, Costs Assessment for an assessment of the whole or any part of legal costs. … (3) An application for a costs assessment may be made even if the legal costs have been wholly or partly paid. (3A) If any legal costs have been paid without a bill, the client or third party payer may nevertheless apply for a costs assessment. (4) An application by a client… for a costs assessment under this section must be made within 12 months after: (a) the bill was given or the request for payment was made to the client…, or (b) the costs were paid if neither a bill was given nor a request was made. (5) However, an application that is made out of time, otherwise than by: (a) a sophisticated client, or … may be dealt with by the costs assessor if the Supreme Court, on application by the costs assessor or the client or third party payer who made the application for assessment, determines, after having regard to the delay and the reasons for the delay, that it is just and fair for the application for assessment to be dealt with after the 12-month period." 1. The costs assessment has now taken place. The proceedings in the Penrith Local Court still remain outstanding. 2. The plaintiff now applies for an extension of time to apply for a review of the cost assessment. 3. Section 373 of the Legal Profession Act 2004 (NSW) reads: 373 Application for review of determination (1) A party to a costs assessment who is dissatisfied with a determination of a costs assessor may, within 30 days after the issue of the certificate under section 368 (Certificate as to determination) or 369 (Recovery of costs of costs assessment) that sets out the determination of the costs assessor or within such further time as the Manager, Costs Assessment may allow, apply to the Manager, Costs Assessment for a review of the determination. (2) The application must: (a) be made in accordance with the regulations (if any), and (b) be accompanied by the fee prescribed by the regulations. (3) The Manager, Costs Assessment may waive or postpone payment of the fee either wholly or in part if satisfied that the applicant is in such circumstances that payment of the fee would result in serious hardship to the applicant or his or her dependants. (4) The Manager, Costs Assessment may refund the fee paid under this section either wholly or in part if satisfied that it is appropriate because the application is not proceeded with. (5) A party who applies for a review under this Subdivision must ensure that notice of the application is given to the other parties to the assessment not less than 7 days before the application is made or as prescribed by the regulations.