New South Wales Supreme Court CITATION : Attard v James Legal Pty Ltd [No 2] [2009] NSWSC 901 This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S) : 25 August 2009 JUDGMENT DATE : 2 September 2009 JURISDICTION : Common Law JUDGMENT OF : Simpson J DECISION : (i) Statement of claim dismissed. (ii) Verdict and judgment for the cross-claimants against the first and second cross-defendants in the sum of $903,450.00 plus interest in the sum of $534,174.69. (iii) Verdict and judgment for the cross-claimants against the third cross-defendant in the sum of $300,000 plus interest in the sum of $126,196.24. (iv) Verdict and judgment for the cross-claimants against the fourth cross-defendant in the sum of $300,000 plus interest in the sum of $126,196.24. (v) Note that the verdict and judgment amounts in paragraphs 3 and 4 are included in the amount in paragraph 2. (vi) The plaintiffs to pay the defendants' costs of the proceedings and cross-claim. CATCHWORDS : PROCEDURE – judgments and orders – effect of judgments – plaintiffs claim unsuccessful – defendants successful on cross-claim – quantification of moneys owing to defendants – whether plaintiff entitled to invoke assessment of costs regime – whether Court has power under Legal Profession Act to order assessment – in the alternative, whether Court should refer to referee – plaintiffs outside period stipulated by Legal Profession Act for assessment application – reasonableness of claim – verdict and judgment for defendants LEGISLATION CITED : Legal Profession Act 1987 Uniform Civil Procedure Rules CATEGORY : Consequential orders CASES CITED : Attard v James Legal Pty Ltd [2009] NSWSC 811 Alfred Michael Vincent Attard (First Plaintiff/Cross-Defendant) Michael Anthony Henry (Second Plaintiff/Cross-Defendant) Glowmint Pty Ltd (Third Plaintiff/Cross-Defendant) PARTIES : Elzac Properties Pty Ltd (Fourth Plaintiff/Cross-Defendant) Construction Management Group Pty Ltd (Fifth Plaintiff/Cross-Defendant) James Legal Pty Ltd (First Defendant/Cross-Claimant) Peter James trading as James Solicitors (Second Defendant/Cross-Claimant) FILE NUMBER(S) : SC 20044 of 2004 COUNSEL : P Newton (Plaintiffs/Cross-Defendants) M Southwick (Defendants/Cross-Claimants) SOLICITORS : Lazarus Tomko Lawyers (Plaintiffs/Cross-Defendants) James Legal Pty Ltd (Defendants/Cross-Claimants) IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Simpson J 2 September 2009 20044/2004 Alfred Attard & Ors v James Legal Pty Ltd & Anor [No 2] JUDGMENT 1 HER HONOUR: On 14 August 2009 I delivered reasons for judgment in the substantive proceedings: Attard v James Legal Pty Ltd [2009] NSWSC 811 ("the principal judgment"). To obviate unnecessary repetition in this judgment, it will be necessary to read these reasons in conjunction with those. The question that now arises is what final orders ought to be made as a consequence of the findings of fact and my reasons in the principal judgment. 2 In short, the substantive proceedings were commenced by the plaintiffs. In those proceedings, as they were finally conducted, the plaintiffs claimed that the defendants (James Legal Pty Ltd and Peter James trading as James Solicitors, to whom I will refer compendiously as "James"), in providing legal representation to them in various forms of litigation, acted negligently and in breach of contract. By cross-claim James sought orders for payment by the plaintiffs of fees said to be owing. 3 In the principal judgment I rejected the claims made by the plaintiffs. I indicated that James were entitled to orders in their favour on the cross-claim. I was not satisfied that I was then in a position to quantify the amount owing. There was a question in my mind as to whether, the fees claimed being legal professional fees, the plaintiffs were entitled to invoke the assessment regime provided by the legislation regulating the legal profession (I put it in that way because there was, initially, an issue as to which legislation was applicable. Eventually, it was agreed that the relevant legislation is the Legal Profession Act 1987.) The facts 4 There was no real issue that James had provided legal services to the plaintiffs over a period of time, and in respect of various pieces of litigation in which the plaintiffs were involved, and that the parties had entered into a succession of retainer or costs agreements; in the light of my reasons in the principal judgment, it could hardly be contended that James were not entitled to payment. 5 The question is how that payment is to be quantified. 6 James proved that they had issued invoices totalling $1,323,033.76 for professional fees and disbursements. The plaintiffs have paid $543,345.82 leaving a balance of $779,687.94. 7 In January 2003 the plaintiffs entered into an arrangement for the payment of outstanding fees. The arrangement was embodied in a Deed dated 5 February 2003 (see principal judgment, [152]-[157]). No payments have been made in accordance with that arrangement. 8 At some stage James sought, pursuant to the Legal Profession Act, assessment of some of the invoices. On the application of the plaintiffs, Bell J stayed the assessments (see principal judgment, [151]). 9 No other application for assessment has been made by the plaintiffs. 10 The plaintiffs filed a defence to the cross-claim. They admitted some allegations, traversed others, and declined to admit or traverse others. They raised some additional matters. For example, in response to para 11 of the cross-claim (in which James asserted breach of an agreement to pay a specified sum the subject of an invoice in respect of proceedings in the Fair Trading Tribunal) the plaintiffs pleaded: "11 … the Cross-Defendants do not admit that [they] were liable for the moneys referred to, say that [James] have not provided an overall accounting of payments made by [the plaintiffs] to [James] such as to enable [the plaintiffs] to ascertain how [James] have credited all payments made by [the plaintiffs] and otherwise do not admit the allegations." 11 A similar pleading was made in respect of other specific allegations in the cross-claim. Indeed, this assertion was something of a theme throughout the defence. 12 In paras 25 and 26 of the defence, the plaintiffs asserted that James had agreed with, or alternatively represented to, the plaintiffs that they (James) would arrange for the assessment of all bills and that the liability of the plaintiffs would be limited to the amount of the bill or the amount of the assessment, whichever was lower, and that they (the plaintiffs) relied upon that representation in refraining from taking any step to bring about assessment. No evidence was called to support this allegation. 13 It is of some interest that the defence to the cross-claim contains no express pleading raising any issue as to the fairness or reasonableness of the costs claim. 14 Notwithstanding this, I was concerned that the plaintiffs have the opportunity, if available to them, to have the fairness and reasonableness of the costs assessed. Being doubtful as to my power at this stage to make such an order, I invited the parties to consider an arrangement by which, in return for and as a condition of referral for assessment, the plaintiffs pay a proportion of the costs claimed. The parties were not able to reach any such agreement. 15 I am satisfied that the Legal Profession Act 1987 does not enable me to make an order for assessment. 16 Section 199(1) enabled a client who was given a bill of costs to apply for assessment thereof. By sub-s (2), however, an application made in relation to a bill of costs which has been wholly or partly paid must be made within the period prescribed by the regulations for that purpose. The regulations prescribe a period of 12 months. The plaintiffs are well out of time to seek assessment of any of the costs concerned. Further, s 174 provided that a client had no right to have a bill of costs covered by a costs assessment assessed unless some inequality affecting the agreement as set out in Div 6 existed. There was no such inequality established. 17 As an alternative, it was suggested on behalf of the plaintiffs that I utilise the provisions of UCPR 20.14, which permits reference to a referee for determination of any question arising in the proceedings. The referee would, on this scenario, be a costs assessor. That had some initial attraction. But, on reflection, the course proposed is not available, or if it is, it is not appropriate. That is because the Legal Profession Act provides specifically for assessment of costs, and imposes restrictions upon the manner in which assessment is to be undertaken, and the circumstances thereof. 18 James have been denied money to which they are entitled for several years. The plaintiffs stood in the way of assessment of some invoices by applying for, and obtaining, a stay of those assessments. 19 They have never formally queried the fairness or reasonableness of the charges. 20 I have concluded that it is now too late to raise these issues. 21 I propose to enter judgment for James in the appropriate amount. 22 The orders I make are: (i) Statement of claim dismissed. (ii) Verdict and judgment for the cross-claimants against the first and second cross-defendants in the sum of $903,450.00 plus interest in the sum of $534,174.69. (iii) Verdict and judgment for the cross-claimants against the third cross-defendant in the sum of $300,000 plus interest in the sum of $126,196.24. (iv) Verdict and judgment for the cross-claimants against the fourth cross-defendant in the sum of $300,000 plus interest in the sum of $126,196.24. (v) Note that the verdict and judgment amounts in paragraphs 3 and 4 are included in the amount in paragraph 2. (vi) The plaintiffs to pay the defendants' costs of the proceedings and cross-claim. ********** 04/09/2009 - Correction to orders - Paragraph(s) 22 04/09/2009 - Correction to orders - Paragraph(s) Coversheet DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.