Riordan J provides pithy summary of some of the more difficult costs principles

Riordan J delights me with his helpful summaries of the law in many of his judgments.  Here is his latest, in relation to costs, particularly in multi-party cases of mixed success and success only as to nominal damages, and contractual promises to indemnify against costs, from Saafin Constructions Pty Ltd v MAG Financial and Investment Ventures Pty Ltd [2021] VSC 702 at [27] et seq:  Continue reading “Riordan J provides pithy summary of some of the more difficult costs principles”

Litigant’s solicitor tells Supreme Court his client may not have capacity; Court refers a question to VCAT

In Sangen v Sangen [2021] VSC 590, the executor of his late mother’s will sold her house, but refused to settle.  His brother, the co-beneficiary, sued him.  The executor’s solicitor filed an affidavit attesting to doubt about his client’s capacity, and remained on the record.  The executor filed no medical evidence.  In yet another contemporary reminder of the breadth and vigour of the Court’s inherent jurisdiction to regulate its own procedure, Moore J recognised that he had the Court’s inherent power to order the executor to be medically examined to report on his capacity.  His Honour appointed counsel to appear as amicus curiae, instructed by the executor’s solicitor.  The executor represented himself, from a public phone box.

The litigant vigorously opposed the course which Moore J settled upon, a referral under s. 179 Guardianship and Administration Act 2019.  His Honour relied on both the executor’s solicitor’s affidavit, the submissions of amicus curiae, and his own analysis of the executor’s communications with the Court, including a hand-written letter explaining his objections to settling the sale of his late mother’s house.  His Honour noted that a litigant is entitled to be heard before an order is made under s. 179, and said: Continue reading “Litigant’s solicitor tells Supreme Court his client may not have capacity; Court refers a question to VCAT”

More on hire car costs as damages for loss of the use of a chattel in motor vehicle property damage cases

Kinkhead v Rositani [2021] VMC 009 is a case about crash and bash litigation, a field of endeavour for lawyers which is fertile as a generator of professional misconduct prosecutions. That is because the Victorian Legal Services Commissioner has a fascination with the lawyers who act for plaintiffs who elect to sue the other driver in the courts rather than claim on their insurance. And it is because the big insurers are merciless in their pursuit of the plaintiff lawyers whom they loathe for using the law to interfere with their preferred way of dealing with things, and because they are canny in their lobbying of regulators. RACV will not be amused by this very civilised judgment by Her Honour Meghan Hoare.

Continue reading “More on hire car costs as damages for loss of the use of a chattel in motor vehicle property damage cases”

On the interpretation of ‘exceptional circumstances’ provisions re costs

Di Lorenzo v The Magistrates’ Court of Victoria [2021] VSC 475 was a case in which the Supreme Court spent 2 hearing days on a judicial review of a costs order worth $5,000.  One paragraph of it piqued my interest, about the interpretation of provisions which say there should be no order for costs of the proceeding, absent special or extraordinary circumstances.  Horrible members of that species of provisions are to be found inside s. 303 of the Legal Profession Uniform Law.

Continue reading “On the interpretation of ‘exceptional circumstances’ provisions re costs”

How taxation is obtained out of time under the LPUL in NSW

In the last post, Justice Quigley extended time in which to seek taxation under the Legal Profession Uniform Law (Vic) in unusual circumstances, by consent.  Curiously, a funny little case from NSW provides an echo: Stoltz v Peter Skidmore of Phoenix Legal Consulting Pty Limited [2021] NSWSC 1063 (funny choice of defendant, I must say, but Ms Stolz was unrepresented). Continue reading “How taxation is obtained out of time under the LPUL in NSW”

Supreme Court sets aside default judgment in Magistrates’ Court and refers the fees to taxation instead of remitting suit for fees

Davey v Costanzo Lawyers Ltd [2021] VSC 449 is episode # c. 898 in my series  about suits for fees, ‘Many a Slip Twixt Cup and Lip’.

A family law firm whose website modestly explains that they are the ‘best family lawyers’ sued its former client for professional costs and barristers’ fees for work done in 2018.  They got default judgment for about $40,000 in June 2019, but they forgot to plead that they did the work set out in the bill, that being left to be inferred from the fact that they gave a bill.

In July 2019, a judicial registrar refused an application to set the default judgment aside.  A Magistrate at Heidelberg, reviewing that decision, came to the same conclusion in August 2019.  Then the plaintiff hired counsel and applied again to the same Magistrate to set aside the judgment, and she said no, again, in February 2020.

The lawyers had thrice claimed successfully that there was no merit at all in the client’s defence.  But the client got a barrister, sought judicial review in the Supreme Court and jumped the arguable defence hurdle on the fourth attempt, clearing House v R in the same leap though it was strictly unnecessary to do so, and won on the basis that the complaint had been so badly pleaded that it did not make out a cause of action in debt, so that the default judgment was irregular and should have been set aside ex debito justitiae.  Then she got costs.

The decision is also of interest in relation to the circumstances in which a second application to set aside a default judgment might succeed.  Quigley J observed in dicta:

’36 The new or additional material argued before her Honour is set out above at [16]. Her Honour was sceptical that the matters identified were new or different. However, insofar as it is necessary to make any observation in this regard, it is apparent that a more cogent formulation of the basis of the potential defence(s) [was] articulated in this second application before her Honour. In my view, this may be sufficient to provide a change in circumstances from the situation which pertained before the Court on the first occasion.’

In other words, if you’re represented competently the second time and you self-represented the first time, that might be enough. Continue reading “Supreme Court sets aside default judgment in Magistrates’ Court and refers the fees to taxation instead of remitting suit for fees”

Taxation of costs of litigious matters where there is no valid costs agreement at all or where the costs agreement is void

In this post, I look at the law governing taxations of costs between lawyers and their clients, charged in litigation.  It used to be that where the costs agreement was void, or it was disregarded for the purposes of the taxation because of material costs disclosure defaults, or there was no costs agreement which covered the relevant work, the taxation would proceed according to the relevant court scale.

In two cases (Shi and Re Jabe), the Court has found that scale is the appropriate basis for taxing costs in this situation.  In others, where the Court considers that the client would not have done anything much differently had they obtained proper costs disclosure, and the costs charged were much the same as scale, or in accordance with what was being charged in a well-worked out market for a common kind of work, the Court has at an interlocutory stage told the lawyers that they can draw the bill of costs in taxable form by reference to the hourly rates in the void costs agreement, but that at the end of the day, the enquiry is what is fair and reasonable according to the criteria in s. 172 of the Legal Profession Uniform Law, noting also the considerations which may be taken into account in s. 200.

In other words, though the bill need not necessarily be drawn on scale anymore, nor is there the comfort that the lawyers will get at least scale.  They might get significantly less than scale.  Indeed, though I don’t know of it having been argued yet, they might get nothing, because, had the client been given proper disclosure they would never have embarked on the expensive exercise from which they gained no advantage.

Another thought: if the costs agreement is void, then though the hourly rate might still be able to be used for the purposes of the bill of costs in taxable form, the pernicious rounding up provisions in many costs agreements will be unavailable.  A bill where many one, two or three minute attendances are charged at one ‘unit’ of 6 minutes or part thereof, would only be able to claim a fraction of the fees which were actually billed.  Continue reading “Taxation of costs of litigious matters where there is no valid costs agreement at all or where the costs agreement is void”

Legal discipline and the model paedophile

If there were such a thing as a model paedophile, the respondent in Legal Services Commissioner v Ferguson [2021] QCAT 205, a gentleman in his early 60s, might be it.  He had psychiatric ill health and other life difficulties and turned to booze and porn, a small fraction of which was child pornography.  (No one suggested that his collection of presumably legal non-child porn was relevant in any way to his fitness to practice.) Continue reading “Legal discipline and the model paedophile”

Supreme Court flexes inherent jurisdiction of its own motion to require both parties’ lawyers’ costs to be taxed by the Costs Court on Scale

Pity the dozy lawyer who wanders innocently into Justice Cate McMillan’s court, bringing attitudes from days of yore about fees charged out of a great big fund.  Re Jabe; Kennedy v Schwarz [2021] VSC 106 should in my opinion be reported in the Victorian Reports as indicative of the breadth of and resilience to statutory incursion of the Court’s inherent jurisdiction.  The Court of its own motion sent both parties’ lawyers’ costs off to the Costs Court to be taxed on Scale, at the conclusion of a case, having found, on an inquiry initiated by Justice McMillan, disclosure defaults and void costs agreements governed by the Legal Profession Uniform Law, and legal costs that were not fair, reasonable and proportionate as required by that Law and the Civil Procedure Act 2010. Continue reading “Supreme Court flexes inherent jurisdiction of its own motion to require both parties’ lawyers’ costs to be taxed by the Costs Court on Scale”

Solicitor who went off the record for party restrained from giving assistance to former client

Lee v MK Trading Co Australia Pty Ltd [2021] VSC 343 is a decision of Sloss J which takes the law relating to the restraint of lawyers for acting for a party in litigation a step further in that she restrained a solicitor who had already gone off the record from providing legal assistance behind the scenes.  The decision  was made in the Court’s exercise of its inherent jurisdiction to restrain lawyers where ‘the proper administration of justice requires that a solicitor be prevented from acting in the interests of the protection of the integrity of the judicial process and appearance of justice’ articulated in Grimwade v Meagher [1995] 1 VR 446, 452. Continue reading “Solicitor who went off the record for party restrained from giving assistance to former client”

Party-party, solicitor-client, indemnity, special indemnity, scale costs: where are we at?

It seems that Mukhtar AsJ found Bougainville Copper Ltd v RTG Mining Inc [2021] VSC 231 fascinating and rewarding.  It was an application for preliminary discovery to find out whether the applicant had a cause of action for damages for bribery and corruption by the respondent.  The respondent had a ‘resounding victory’; the applicant got no discovery at all, unable to establish the threshold suspicion to warrant such an order.

His Honour dismissed the respondent’s application for indemnity costs nevertheless in reasons published as [2021] VSC 348.  The indemnity costs application was based in part on allegedly unfounded allegations of wrongdoing insinuated by the applicant.  But it is one thing to make unfounded allegations in a case proper and another to insinuate them for the purposes of establishing whether there is such a case in a preliminary discovery application which is inherently fishing.

It is a beautifully written set of reasons, but I draw your attention to the costs judgment principally because it sets out crisply in one place the differences between the old party party costs and the new standard basis costs, and the old solicitor-client and indemnity costs and the new indemnity costs.  If you are after authority that the new standard basis is akin to the old solicitor-client basis, this is it (though the theory will not necessarily be reflected in Costs Court practice).

And the judgment re-iterates that which is much mis-understood, namely that when you get common garden variety indemnity costs, they are still calculated by reference to Scale, not by reference to what the winner was actually billed.  It is a while since this little newsletter has made that point.

One other mis-understood bit of the law of costs, to complete the picture, is the difference between taxation as between solicitor and own client and taxation as between parties on the solicitor-client basis, two different but dangerously similarly named enquiries.   The new taxonomy of costs as between party and party should reduce confusion since there will be no taxations on the solicitor-client basis as between parties.  But it is as well to remember that even where costs have been taxed as between party and party on Scale, and the winner’s solicitor was charging the winner on the same Scale, the results of the two enquiries will not necessarily be the same.  Indeed, the same may be said, even where the costs have been taxed as between party and party on the indemnity basis.  Because as between party and party, the question is what is reasonable as between the parties, whereas as between solicitor and own client, the question is what is reasonable between the solicitor and the solicitor’s own client, a test which is generally more generous to the solicitor.

The bits of Mukhtar AsJ’s reasons which I think will be of general interest to those who do not already have this stuff front of mind are as follows:

Continue reading “Party-party, solicitor-client, indemnity, special indemnity, scale costs: where are we at?”

Costs Disclosure Obligations Under the Legal Profession Act 2004 (Vic)

The legendary foundation author of Quick on Costs, Roger Quick, has asked me to put this old workmanlike paper on my blog so that he can cite it and link to it in the second edition of that monumental text which he is kindly working on for all our benefits.

What follows does not deal with any developments in the law since 2010, or indeed anything I have learnt since 2010, when I delivered the paper, and so it is out of date, but it might still be of use in some jurisdictions which have not adopted the Legal Profession Uniform Law or by analogy in some cases which are governed by that law.  Sorry about the formatting, which is the product of copying and pasting a Word document into WordPress.

1. Summary

This paper does not deal with contingent, or no-win no-fee retainers.  In relation to all other matters, the take-home points are these: Continue reading “Costs Disclosure Obligations Under the Legal Profession Act 2004 (Vic)”

2019: Not Such a Good Year (Environment, Part II)

The endangered greater glider, nearly a metre long, one of the biggest gliding mammals in the world, lives for 15 years, eats gum leaves, glides for 100 m between, ideally, tall old trees with hollows to bunk down in.

Today is World Environment Day.  It prompted me to tidy up, in a minimal kinda way, and publish this hitherto unfinished and unpublished blog post from the ‘2019, Not Such a Good Year’ series.  Of course, 2020 brought a new perspective on things.  But the environment has kept going to shit, as I will no doubt expand upon in a future post.

After 2.2 million other Australian homes went solar, I eventually got an army of solar panels in 2019, the biggest ever year for solar installations in Australia, and greatly enjoyed harnessing the sun to defeat itself through airconditioning. (Two great long reads about the pernicious cycle of (non-solar powered) airconditioning here and — damn Qatar’s bad — here.)

But other things to bring cheer were mainly predictions, proposals and plans (see this post).

An area bigger than Scotland, more than a Denmark in NSW alone, was burnt, much of it forests, estimated to result in the deaths of billions of birds, mammals and reptiles alone, possibly resulting in several species’ extinctions. Maybe three trillion beetles from just one family, Staphylinidae, were incinerated. Some species of much-loved Christmas beetles may have been extinguished. Some shocking images of the detritus of Mallacoota’s once-cacophany of birds were published by The Age, but I managed to get 80 kg of wild bird seed to my mates in Mallacoota by boat to help feed the many birds he says have returned.

It was in fact an extravagantly bad year for the environment, especially Australia’s bits of it. Japan even recommenced whaling (though only in Japanese waters) after Australia single-handedly had them banned only a couple of years ago by the International Court of Justice from the Southern Ocean.

Continue reading “2019: Not Such a Good Year (Environment, Part II)”

Think twice before agreeing to punt an appeal where you and the other side are unpaid in relation to round one

Update, 19 March 2021: My Sydney colleague, Andrew Bailey, drew my attention to Longjing Pty Ltd v Perpetual Nominees Ltd [2017] NSWSC 1690 at [40]ff, which is to similar effect.

Original post: In Carter v Mehmet [2021] NSWCA 32, the Court granted the respondents’  security for costs application in part because the appellant’s solicitors had much to gain from the appeal’s success and had agreed to do it no win no fee, and so were creditors associated with the proceeding, but the appellant had not proven that the solicitors could not contribute funds in order to provide security.  Since it was not suggested that they could not provide funds to enable the appellant to give security in the order of scores of thousands of dollars (though there was evidence that they would not do so), it could not be said that the appeal would be stultified by virtue of the inability of the appellant and those who stood behind him to provide the security.

If you are a lawyer whose fees are unpaid from round one, consider very carefully whether you agree to do the appeal no win no fee, as opposed to entering into an orthodox retainer in the knowledge that payment may be difficult unless the appeal succeeds.  If you are an impecunious appellant in that situation, think even harder about accepting or proposing such a retainer, since — good as it sounds — it may effectively preclude you from pursuing the appeal.

Continue reading “Think twice before agreeing to punt an appeal where you and the other side are unpaid in relation to round one”

Chaplin v Hicks

Seymour Hicks

Chaplin v Hicks [1911] 2 KB 786 is often cited as the first loss of a chance case. I thought it was more or less a case about a lottery in which the plaintiff missed out on a, say, 10% chance of winning a prize and recovered 10% of the prize monies.  But by reading it I discovered it is actually a case in which the plaintiff missed out on competing by audition with 49 others for twelve three year jobs as an actress.  So about one in four of the 50 would get a job the total average pay for which was £624.  Miss Chaplin recovered £100 at first instance, but how that figure was arrived at was not explained, because this was an appeal from a jury decision in a case presided over by Pickford J. Evidently, £100 is not about a quarter of £624, though.

If anyone can point me to the first instance decision, original newspaper advertisement, or a photo of Miss Chaplin, I would be most grateful. Continue reading “Chaplin v Hicks”

2020: Not Such a Good Year (Deaths)

Takna Jigme Sango

Cars Holden

Americans  A grotesque pathogen the actions of which had at the time already killed 200,000 Americans contracted COVID-19, and described it as ‘a blessing from God’.  Though thoughts and prayers around the world were with the virus, Trump prevailed.  By the end of the year, one in every thousand Americans had died of COVID-19, more than a 9-11’s worth — more than 3,000 — a day some days.  COVID-19 is predicted to kill more Americans than died in the second world war, up to 450,000.  One of its probable victims was Rommel Broom, who was on death row following a failed attempt to kill him by lethal injection in 2015.

Lawyers Arch conservative Antonin Scalia’s progressive opera buddy Ruth Bader Ginsburg‘s end of life ambition to survive the end of the Trump administration so as to prevent her replacement by an ultra-conservative Trump appointee was cruelled by pancreatic cancer.  Truth be told, his incompetence was so great that he didn’t really actually do much, compared to the opportunity he had to do it, but POTUS did manage to stack SCOTUS with three new conservatives.  The third was Catholic cult member Amy Coney Barrett, previously appointed to the Seventh Circuit by Trump, hurriedly confirmed in the last days before the US election.  The composition of the Court is a matter for Congress and there is talk of increasing the number of justices in the Biden term so as to allow Democratic appointments.  But the composition of the Supreme Court is not the only issue, since intermediate appeal judges provide ultimate resolution for most cases, and Trump has appointed 51 of 179 active circuit court judges, mostly white blokes, lifetime appointments, with a mediation age of 48, nearly one-third of the entire bench in four years (c.f. Obama 55 and Bush 62 each over 8 years and I suspect Trump’s appointments were far less meritocratic than even Bush’s). Continue reading “2020: Not Such a Good Year (Deaths)”

What the Gobbo royal commission recommended about regulation of the legal profession

Here is Commissioner McMurdo’s Summary and Recommendations from the Final Report, published yesterday, of the Royal Commission into the Management of Police Informants.

Reproduced below is what it says about regulation of the legal profession.  There will be more complaints about barristers in the future.  Victorian barristers would be well advised to take out the top up insurance available to members of the Victorian Bar which includes a primary layer insurance against defence costs of disciplinary investigations including by the Victorian Legal Services Commissioner. Continue reading “What the Gobbo royal commission recommended about regulation of the legal profession”

The tariff for rudeness: a reprimand

I had to review the penalties for rudeness by lawyers recently, and what I found is that the usual penalty is a reprimand, even for very rude recidivists.  That is not surprising, since a reprimand is a serious professional sanction, not to be equated with a slap over the wrist:  Peeke v Medical Board of Victoria [1994] VicSC 7 at p. 6 (Marks J); Medical Practitioners Board of Victoria v Swieca [2009] VCAT 419 at [52] (a tribunal of three presided over by Deputy President Dwyer). This principle has been reiterated in A Practitioner v The Medical Board of Western Australia [2005] WASC 198 at [62], in LSC v Moore [2010] VCAT 742 at [44] (Member Butcher) and in LSC v Long [2011] VCAT 1164 at [24] (Deputy President Macnamara) and in LSC v Sapountzis [2010] VCAT 1124 (Member Butcher).  Most recently, see VLSC v VH at [27] et seq per Vice President Hampel [2018] VCAT 1498. Continue reading “The tariff for rudeness: a reprimand”

A case under the Uniform Law about a barrister who had no costs agreement and gave no costs disclosure

In Arya v TD [2020] VCAT 923, Member Tang, a former President of the Law Institute now a full-time member of VCAT, had to decide what were the fair and reasonable costs (in the Legal Profession Uniform Law sense of that phrase) of more than 11 hours’ work by a Victorian barrister of 18 years’ call. The work product was a 23 page memo of high quality advice in a field in which the barrister had literally written the book. He had entered into no costs agreement and had given no costs disclosure, in a direct access brief.

Because the case reached VCAT via a costs dispute before the Victorian Legal Services Commissioner, there was an additional layer of fairness and reasonableness to be considered, compared with the same analysis in a taxation: s. 99 of the Application Act associated with the Uniform Law required the Tribunal to fix the costs in an amount which was ‘fair and reasonable in all the circumstances’, an invitation to palm tree justice if ever I heard one.

The barrister’s fee slip was for $10,175 calculated at $595 per hour reduced on a but say basis to $9,900. The fair and reasonable cost of the work was just over one-third of the larger figure, or $3,500, found Member Tang.

Until 2015, solicitors and barristers were entitled in the absence of a valid costs agreement to costs on the relevant court scale or, for non-contentious business, on the Practitioner Remuneration Order. Where there was a void costs agreement that entitlement was capped at the amount which would have been recoverable under the costs agreement. Since the introduction of the Uniform Law, how a lawyer recovers fees in the case of a void costs agreement is not spelt out, but since no one can ever recover fees from persons other than ‘commercial or government clients’ which are not ‘fair and reasonable’, the fees recovered certainly have to meet that criteria.

In those Uniform Law taxations where the Costs Judge has figured that the costs disclosure defaults might have been opportunistically seized upon by clients who had not been materially prejudiced by the defaults in question, Associate Justice Wood has been finding that the fair and reasonable costs may be prima facie calculated by reference to the void costs agreement in question. See, e.g., Johnston v Dimos Lawyers [2019] VSC 462; Bennett v Farrar Gesini Dunn Pty Ltd [2019] VSC 744; Cameron v Thomson Geer [2020] VSC 75.

What this case demonstrates is that, in the case where a client really has been sucked into something they might not have signed up for if they had been given appropriate disclosure in advance, the fair and reasonable costs may be considerably less than the reasonable rate multiplied by the number of hours spent, and significant ‘penalties’ for non-disclosure and inutility may be operative.

By virtue of the direct access relationship between the barrister and the solicitor, the same law should apply in cases involving a solicitor and client.

Continue reading “A case under the Uniform Law about a barrister who had no costs agreement and gave no costs disclosure”