In Victoria, solicitors have only a non-extendable 60 days in which to seek taxation of counsel’s fees, but clients have 12 months in which to seek taxation of solicitors’ fees, and clients other than ‘sophisticated clients’ as defined may seek an extension of time in which to apply. Where the greatest uncertainty exists, in my mind at least, is in the case of suits for taxation by third party payers — non-clients who promise to pay others’ legal fees, and most particularly non-associated third party payers — non-clients whose promise to pay others’ fees is made to the client rather than to the lawyers. I imagine that solicitors do not generally give bills to non-associated third party payers, such as the mortgagors to whom their clients lend money under documents which require the mortgagor to pay the mortgagees’ costs. Rather, I imagine that the mortgagees generally just demand a sum from the mortgagor as an adjustment at settlement, and hand over the bill from their lawyers only upon demand. Yet non-associated third party payers are entitled to seek taxation, and the question is — when does the time in which such a taxation may be applied for begin to run?
I must warn you that the rest of this post is likely to be extremely boring for most people, and understanding it, despite my attempt to state it as clearly as I can, is likely to involve considerable mental effort.
In Viscariello v Oakley Thompson  VSC 351, Justice Ferguson decided a dispute between an individual who guaranteed his company’s obligation to pay the company’s legal fees, and the company’s lawyers. The individual was presumed for the purpose of argument to be an associated third party payer, which seems like a very reasonable assumption to me. The dispute was about when the time limits commenced. But the judgment does not resolve many mysteries, because it seems that the company and the director received the bills simultaneously, and though no bills were addressed to the guarantor qua guarantor, since he in fact received the bills at the time the company received them, time started to run from then. Continue reading “When does the 12 months in which to seek taxation commence?”