Informal service of lawyers’ bills

Recently, the County Court’s Practice Court accepted that where a client admitted having received a bill given by email, service in accordance with the Legal Practice Act, 1996 had been effected, so that various deadlines which are counted from that date then commenced to run.  That is so even though the commencement of the running of time was predicated on a bill having been ‘given in accordance with’ a service regime which was very specific and did not include service by email.  This post considers the law in that regard, the only authority on the point being consistent with the Practice Court’s decision.  It also notes the deemed service provisions in the 1996 and 2004 Acts, and their interpretation.

The provisions relating to the service of bills (the language of the Acts is the ‘giving’ of bills) in the Legal Practice Act, 1996 and the Legal Profession Act, 2004 are set out below.  They are to be given to the person billed personally, or by post.  They can be delivered only to agents who are authorised to accept legal process, a class probably limited in reality to solicitors who have agreed to accept service of a writ.  Neither emailing nor faxing is specified as a good way of service (compare NSW, where bills can be emailed).  These are state acts, and s. 109X of the Corporations Act, 2001 (Cth.) probably provides an alternative service regime for the giving of bills to corporate clients, but it does not provide for service by email or fax either.

The giving of a bill of costs is a critical step in the law’s ordering of the solicitor’s and client’s competing interests in a dispute about fees.  The solicitor may not sue for a specified period after giving it.  The client has only a specified period after receiving it to institute a costs dispute or seek taxation or request an itemised bill.  Interest runs from a period after giving it.

There is a question about how to interpret these provisions, and it is this: if it may be proved that a person actually received the bill by email or fax, or via an agent not authorised to accept service of legal process, has the bill been ‘given in accordance with’ the provisions, so that the deadlines referred to above then begin to run?  In Hope v Hope (1854) 4 De G M & G 328 at 342, Lord Cranworth said:

“The object of all service is of course only to give notice to the party to whom it is made, so that he may be made aware of and may be able to resist that which is sought against him; and when that has been substantially done, so that the Court may feel perfectly confident that service has reached him, everything has been done that is required.”

This sensible golden rule was applied in Pino v Prosser, a handy little authority I cottoned onto at the very start of my career.  A writ was left with a man’s wife.  Personal service was required, and service on the wife was not personal service on the husband.  But when the wife gave the writ to the husband, he was personally served.  Both authorities were applied in Guss v Magistrates’ Court of Victoria [2003] VSC 365, where Justice Osborn found a summons to answer a criminal charge to have been served on a famously litigious solicitor in accordance with s. 34(1) of the Magistrates’ Court Act, 1989 (read the ‘tortuous’ history of the ultimately successful prosecution in Guss v Jacotine [2007] VSC 446).  Section 34(1) said:

‘Every summons to answer to a charge, except where otherwise expressly enacted – (a) must be served [in accordance with a precise regime]’.

The summons had been left at the premises of a company to which the solicitor was a paid consultant who attended several part days a week.  The company seems to have been associated with his son. The premises were not the solicitor’s principal place of business, and accordingly, at that moment there was no service in accordance with s. 34(1). However the solicitor admitted having received a copy of the summons a few days after it had been left at the premises, and Justice Osborn held that at that point, there had been service in accordance with s. 34(1).

The cases disclose that the words of some statutory regimes do not allow for such a substance over form approach: see Rochester Communications Group Pty Ltd v Lader Pty Ltd (1997) 143 ALR 648. Exactly how the provisions which are the subject of this post ought to be interpreted, remains to be authoritatively determined, it seems.  Other authorities about service may not apply directly because of the stipulation in s. 107 of the old Act and s. 3.4.33 of the new one that lawyers may not sue on their bills until a certain period after giving a bill in accordance with [section] 3.4.38‘.  Do the italicised words indicate a legislative intention to alter the proposition referred to in Hope v Hope?

I think not, wherever the decision of a single judge of the Supreme Court of Victoria approved by the NSW Court of Appeal is binding or persuasive.  Guss’s Case has been followed or cited approvingly in Murdoch v Smith [2006] VSC 468 (Cavanough J), Italiano v Carbone [2005] NSWCA 177 (which says Howship Holdings Pty Ltd v Leslie (1996) 41 NSWLR 542 (service by DX), and Ketrim Pty Ltd v AS&L Pty Ltd (2004) 52 ACSR 252 at [16]-[18] took a similar approach, as did, in relation to service by fax, Parklands Blue Metal Pty Ltd v Kowari Motors Pty Ltd [2004] 1 Qd R 140 and Emhill Pty Ltd v Bonsoc Pty Ltd [2004] VSC 322; (2004) 50 ACSR 305).  See too Polstar Pty Ltd v Agnew [2007] NSWSC 114, Mogensen v Premium Grain Handlers Pty Ltd [2008] WASC 145, and James v Ash Electrical Services Pty Ltd [2008] NSWSC 1112.

There is to my knowledge only one authority which bears directly on the issue: Horesh v Cyngler [2007] VCAT 527, and it is consistent with the above authorities.  In that case, the solicitor posted the bill to the client’s son, and the son gave it to the client.  Senior Member Howell, Victoria’s most experienced decision maker in relation to lawyer-client disputes, found that there had been good service.  Having found that the son was not the father’s agent authorised to accept service of legal process, Senior Member Howell concluded:

‘the accounts were delivered to the father personally, through the medium of the son, within about one month after they were posted to the father at the address of the son. Consequently, there was service of the accounts in accordance with s.107(3)(a)’.

The relevant statutory provisions

Sections 108(3) and (4) of the Legal Practice Act, 1996 say:

‘(3) A bill of costs is to be given to a person—

(a) by delivering it personally to the person or to an agent of the person; or

(b) by sending it by post to the person or agent at the usual or last known business or
residential address of the person or agent; or

(c) by leaving it for the person or agent at the usual or last known business or residential
address of the person or agent with a person on the premises who is apparently at least
16 years old and apparently employed or residing there.

(4) In this section, “agent” of a person means an agent, legal practitioner or firm that has authority to accept service of legal process on behalf of the person.’

Section 3.4.34 of the Legal Profession Act, 2004 says:

‘(4) A bill is to be given to a person-

(a) by delivering it personally to the person or to an agent of the person; or

(b) by sending it by post to the person or agent at-

(i) the usual or last known business or residential address of the person or agent; or

(ii) an address nominated for the purpose by the person or agent; or

(c) by leaving it for the person or agent at-

(i) the usual or last known business or residential address of the person or agent; or

(ii) an address nominated for the purpose by the person or agent- with a person on the premises who is apparently at least 16 years old and apparently employed or residing there.

(5) A reference in subsection (4) to any method of giving a bill to a person includes a reference to arranging for the bill to be given to that person by that method (for example, by delivery by courier).

(5A) Despite anything in subsections (2) to (5), a bill may be given to a client electronically if the client is a sophisticated client and requested the bill to be given electronically.

(6) In this section- agent of a person means an agent, law practice or Australian legal practitioner who has authority to accept service of legal process on behalf of the person.’

Deemed service

The date of service is governed under the Legal Practice Act, 1996 by s. 434(1)(b) and under the Legal Profession Act, 2004 by s. 7.2.4(b).  Each says that:

‘a notice or other document must be taken to have been served on, or given to, a person … (b) in the case of posting, 2 business days after the day on which the document was posted.’

According to Victorian Lawyers RPA Ltd v Kearney [2002] VSC 470 at [16] the words ‘must be taken’ mean what they say, creating an irrebuttable presumption.  That case said that where there is an enquiry in relation to the time a thing came to the notice of a person, the date it was delivered is not to the point.  Notice is a state of mind (see also Cosentino v Mohan Yildiz and Associates [2007] VCAT 1319). Where service, or (in the case of bills) the giving, of a document is in issue however, the presumption may not be wriggled out of.

Section 141 of the VCAT Act, 1998 is to the same effect. In Vitesnik v Macedon Ranges SC [2007] VCAT 598, Deputy President Gibson had to work out whether an application to review a mandarin’s decision had been lodged within time.  The applicant had 21 days from the date when the Council ‘gave notice’.  Kearney’s Case was not cited to VCAT. The Deputy President said ‘delivery or receipt of a notice refers to the time when it is received at the address to which it is sent, not when it may be physically collected or opened by the recipient’.  To the same effect is Deputy President Gibson’s decision in Archerduck Pty Ltd v Ballarat CC [2007] VCAT 1696.

See also:

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3 Replies to “Informal service of lawyers’ bills”

  1. Another recent decision on lawyer's bills has received some attention in the Fairfax press in the last few days, it is the decision of Justice Austin in the Supreme Court of New South Wales in the matter of Chameleon Mining NL; Chameleon Mining NL v Atanaskovic Hartnell [2009] NSWSC 602

    The interesting part of the judgment [at paras 63, 64] being that section 332A(5) of the Legal Profession Act 2004 (NSW), where a client has requested an itemised bill and a law firm has not complied with the request, may provide a basis upon which to set aside a statutory demand issued by the law firm for "some other reason" under section 459J(1)(b) of the Corporations Act.

  2. Stephen, fascinating to know the (epic) background to Guss v Magistrates' Court. (That case is aired in summary hearings fairly regularly.)

    I wonder if s 8 of the Electronic Transactions (Victoria) Act 2000 (http://tinyurl.com/md3hs7 ) might apply in cases like the one you mention? It would require consent — which presumably would require the client's agreement as part of the retainer — but might then satisfy the requirement for postal service.

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