RADENKOVIC v VAUGHAN [2010] NSWSC 36

New South Wales Supreme Court

CITATION : RADENKOVIC v VAUGHAN [2010] NSWSC 36

HEARING DATE(S) : 5 February 2010

JUDGMENT DATE : 8 February 2010

JURISDICTION : Common Law

JUDGMENT OF : McCallum J

DECISION : Application dismissed

CATCHWORDS : Application to have a costs assessment dealt with out of time - prescribed limitation period of 12 months applies after bill given to client - no discretionary power under Legal Profession Act 1987 to allow an application for assessment to be dealt with out of time - application dismissed.

Legal Profession Act 1987 LEGISLATION CITED : Legal Profession Act 2004 Legal Profession Regulation 2002

CATEGORY : Principal judgment

PARTIES : Zarko RADENKOVIC (Applicant) Johnston VAUGHAN (Respondent)

FILE NUMBER(S) : SC 2008/285409

COUNSEL : Mr G Henniker (Sol) (Applicant) Mr A Dlakic (Sol) (Respondent)

SOLICITORS : Hennikers (Applicant) Johnston Vaughan (Respondent)

- 5 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

McCALLUM J

8 FEBRUARY 2010

2008/285409 Zarko RADENKOVIC v JOHNSTON VAUGHAN

JUDGMENT 1 HER HONOUR: This is an application to have a costs assessment dealt with out of time. The application relates to two bills of costs rendered to Mr Zarko Radenkovic (apparently also known as John) by Mr Michael Vaughan of Johnston Vaughan, solicitors, after he had acted for Mr Radenkovic on two matters. The summons names "Johnston Vaughan" as the defendant but should properly have been brought against Mr Vaughan and orders should be made to that effect. 2 The first matter on which Mr Vaughan acted for Mr Radenkovic was a claim in respect of personal injuries suffered by Mr Radenkovic in a motor vehicle accident (referred to as the third-party claim). The second was an application for assessment of the costs charged by Mr Radenkovic's former solicitors, Keddies, in respect of that claim before Mr Radenkovic retained Johnston Vaughan. Mr Radenkovic terminated Keddie's retainer when a dispute arose as to those fees. 3 Mr Radenkovic first approached Johnston Vaughan in March 2005, several days before the scheduled hearing of his motor vehicle accident claim. He signed a costs agreement at that time acknowledging that he would be charged for legal services at an hourly rate of $240. The costs agreement included an estimate for completing the work of approximately $5,000, not including barrister's fees. 4 It appears from the bill of costs issued by Mr Vaughan in respect of the motor vehicle accident claim that the matter was settled on the date listed for hearing, which was 14 March 2005. The solicitor who had carriage of the matter, Mr Amil Dlakic, then turned his attention to the dispute as to the fees claimed by Keddies. No separate costs agreement was entered into in respect of that matter. 5 Mr Dlakic, who appeared for Johnston Vaughan on the present application, stated from the bar table that it was known to Mr Radenkovic when he retained Mr Vaughan in respect of the third-party claim that the dispute with Keddies also had to be addressed. He submitted on that basis that the terms as to fees disclosed in the written costs agreement would also apply to any work undertaken in respect of that dispute. I note, however, that the agreement refers in terms only to the third-party claim. Accordingly, there is an issue as to whether the work undertaken by Mr Dlakic in respect of the assessment of Keddies' bills of costs was governed by any costs agreement. The suggestion appears to be that the written costs agreement in respect of the third party claim extended by implication to other matters, but there may be a dispute as to whether that is so and, even if there was such an implied agreement, whether that was sufficient for the purposes of the Legal Profession Act 1987 (especially having regard to the terms of s 184(4) of that Act). 6 On 22 April 2005, Johnston Vaughan wrote to Mr Radenkovic as follows: "We advise that the fees in relation to your Third-Party Claim and Costs Assessment would be $10,000 plus GST equating to $11,000.00. We would be pleased if you could sign the enclosed Authority to Transfer Trust Monies to enable us to debt (sic) the amount of $11,000.00 from the amount of $111,125.43 that we hold in Trust." 7 Subsequently, however, Mr Vaughan rendered the two bills of costs claiming much more than that amount. The bill of costs in respect of the third-party matter claimed $12,913.39. The bill records that amount as having been paid on 17 May 2006. The bill of costs in respect of the assessment of Keddies costs claimed $15,160.10, of which $13,305.95 was recorded as having been paid, leaving a balance of $1,854.15. 8 The bills of costs as sent were not dated. However, each has a handwritten date of 23 October 2006 in the top right-hand corner and it appears to be common ground that they were sent on or about that date. 9 On a date that is not disclosed on the evidence before me, Mr Radenkovic made a complaint to the Legal Services Commissioner seeking an explanation as to the amounts charged and the reason for the substantial increase from the estimate of $11,000 (given in the letter dated 22 April 2005) to approximately $26,000. After an exchange of correspondence, the Legal Services Commissioner ultimately wrote to Mr Radenkovic on 28 June 2007 addressing each of the allegations made by him. In respect of the allegation of excessive charges, the letter states: "If you believe the amount charged by Mr Vaughan to be excessive and unfair, then it may be of interest to contact the Supreme Court Costs Assessment Scheme to see if you are eligible to have your costs assessed by an Assessor". 10 The letter concluded: "As you are now aware, Mr Vaughan does not wish to further negotiate his costs and therefore this Office is not in a position to consider this matter further". 11 The letter was silent as to the time frame within which any application for costs assessment needed to be made. Mr Radenkovic was not legally represented at that time and may have been under a misapprehension as to the role of the Legal Services Commissioner. 12 At the time Mr Radenkovic received the letter from the Legal Services Commissioner, an application for assessment of the two bills of costs could still have been brought within time. As already noted, the bills were given to Mr Radenkovic on 23 October 2006. The application could be brought within 12 months after that date, that is, on or before 23 October 2007. 13 Although the bills were given after the commencement of the Legal Profession Act 2004, Mr Radenkovic's entitlement to assessment was governed by the Legal Profession Act 1987, since he first instructed Johnston Vaughan before 1 October 2005, the day on which the 2004 Act commenced. The transitional provisions in respect of the 2004 Act provide, at clause 18(1): "Subject to subclauses (2) and (3), Part 3.2 of this Act applies to a matter if the client first instructs the law practice on or after the commencement day, and Part 11 of the old Act continues to apply to a matter if the client first instructed the law practice in the matter before that day." 14 The limitation period of 12 months after the bill was given is prescribed in respect of both the 1987 Act and the 2004 Act: see Regulation 52 of the Legal Profession Regulation 2002 in respect of the 1987 Act and s 350(4) of the 2004 Act. 15 The 2004 Act, however, confers a discretionary power on this Court to allow an application for assessment to be dealt with after the 12-month period: s 350(5). There is no such power conferred in respect of the 1987 Act. Regulation 52 provides: "52 Limitation period for applications by clients for cost assessment where bill paid or part paid For the purposes of section 199(2) of the Act, the prescribed period for making an application for an assessment of a bill of costs is: (a) except as provided by paragraph (b), the period of 12 months after the bill was given to the client, or (b) if a Council or the Commissioner applies for an assessment of costs for the purpose of investigating a complaint as referred to in section 153 (1) of the Act, the period of 12 months after the complaint was made." 16 Had the application for assessment been governed by the 2004 Act, there may well have been grounds for exercising the Court's discretion under s 350(5) to allow the application to be dealt with although it was made out of time. However, in the absence of an express statutory power, I do not think that this Court has power to extend the time within which an application can be made under s 199 of the 1987 Act. Accordingly, the application must be dismissed. **********