Applicant Seeks Assessment of Costs

Del Monaco v Velos & Velos Lawyers [2022] VSC 160 (13 April 2022)

The applicant commenced VCAT proceedings contending that she suffered mental injury due to her employment.  The applicant sought advice from the respondent but delayed in payment for more than three years since the final bill.  The Court, in resolving this dispute, relied upon Legal Profession Uniform Law Application Act 2014 (Vic).

Facts:

Ms Fiorella Del Monaco, the applicant, contends that she was bullied at Telstra and suffered a mental injury as a result. She applied for no-fault benefits from Telstra under the Safety, Rehabilitation and Compensation Act 1988 (Cth), commonly known as Comcare.  On 6 July 2018, Telstra denied liability to pay benefits, on the basis that any injury that Ms Del Monaco suffered was a result of reasonable disciplinary action undertaken against her.  She sought advice from two law firms, Flitner & Company Pty Ltd, and then Velos & Velos Lawyers.

Both firms rendered bills, and Ms Del Monaco has paid those bills.  Ms Del Monaco has now applied by separate summonses filed in the Costs Court to have their costs assessed.  The Costs Court has referred to me applications by her for a determination, made under s 198(4) of the Legal Profession Uniform Law, that would permit the assessments to be ‘dealt with by the costs assessor’.  Ms Del Monaco represented herself.  Mr Thomas Flitner appeared for his firm, and Ms Robertson, a solicitor with costs expertise, appeared for Velos & Velos Lawyers.

On 20 June 2018, Ms Del Monaco sought legal advice from Flitner & Company Pty Ltd in relation to her claim against Telstra.  Proceedings were commenced in the Commonwealth Administrative Appeals Tribunal (‘the AAT’) in which Telstra’s decision to reject Ms Del Monaco’s claim for no-fault benefits was challenged.   The matter was resolved at a mediation at the AAT on 10 October 2018.  As part of that resolution, Ms Del Monaco signed a ‘separation agreement’ with Telstra, and consent orders were made by the AAT affirming Telstra’s decision.

Under the ‘separation agreement’, Ms Del Monaco’s position was made redundant, and Telstra agreed to pay her $125,503, $5,952 in relation to her legal costs and disbursements, and the balance of any accrued entitlements to annual leave and long service leave which were estimated to be approximately $12,564.  Ms Del Monaco agreed to receive the identified figure as a redundancy payment, agreed not to bring any common law damages action, and retained the right to bring a claim for no fault benefits under Comcare.  However, the consent order made affirming the reviewable decision by Telstra may have operated to prevent Ms Del Monaco from obtaining any such no fault benefits.  By March 2019, Ms Del Monaco was dissatisfied with the service that she had received from Flitner & Company Pty Ltd. 

On 15 April 2019, through the Victorian Legal Services Commissioner, Flitner & Company Pty Ltd offered to resolve the issue by reimbursing $500.  On or about 16 May 2019, Ms Del Monaco commenced proceeding J41/2019 in the Victorian Civil and Administrative Tribunal (‘VCAT’) against Flitner & Company Pty Ltd.  The claimed damages were for the lost opportunity to claim workers compensation from Telstra. In June 2019, Ms Del Monaco retained Velos & Velos Lawyers to assist with her VCAT claim against Flitner & Company Pty Ltd.     

Issue:

Whether or not it is  just and fair in all the circumstances to deal with the application under Legal Profession Uniform Law s 198. 

Applicable law:

Legal Profession Uniform Law Application Act 2014 (Vic) s 198  - allows a client of a law practice to apply for an assessment of legal costs payable by them to that law practice. 

Legal Profession Uniform Law Application Act 2014 (Vic) s 99 - provides that VCAT has jurisdiction to hear costs disputes if they are for less than $29,160.

Australian Consumer Law and Fair Trading Act 2012 (Vic) s 184 - provides that VCAT likewise has jurisdiction to hear claims for damages.

Rohowskyj v S Tomyn & Co [2015] VSC 511 - provides that the above-mentioned section requires a consideration of the right of one party to seek an assessment against the legitimate expectation of the other party that any request for an assessment will be made within the statutory period.

Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541 - provides that as with any limitation period, the evaluation must acknowledge that the imposition of the default 12-month period is the legislature’s recognition that the welfare of society is best served by claims for an assessment being brought within that period even if that may result in good claims not being able to be pursued. 

Analysis:

A letter from Velos & Velos Lawyers dated 5 June 2019 confirms that Ms Del Monaco contended that she had not given instructions to Flitner & Company Pty Ltd to have her case against Telstra in the AAT dismissed, and that Velos & Velos Lawyers would be assisting with the VCAT claim but not with any attempt to reinstate the no-fault benefits claim or any claims made to the Victorian Legal Services Commissioner.  

There is no material before the Court that establishes that Ms Del Monaco otherwise sought to have Flitner & Company Pty Ltd’s costs assessed, or to challenge its bills on the basis that its fees were excessive or contrary to the arrangement between them and her.  Flitner & Company Pty Ltd’s invoices informed her of the 12-month time limit for any assessment, and she has not provided a sufficient reason for which she did not seek to have the costs assessed within that 12-month time limit.  

Flitner & Company Pty Ltd’s costs were relatively modest, and the clear flavour of the complaint against Flitner & Company Pty Ltd was not that it had charged for work that it had not done, or that it had charged more than it was entitled to charge, but rather that it had acted negligently.  Flitner & Company Pty Ltd is now, after more than three years since its final bill was sent and paid, entitled to the certainty and closure that the time limit is directed at achieving.

Conclusion:

Contrary to the position with Flitner & Company Pty Ltd, Ms Del Monaco does have, the Court is satisfied, a genuine belief that she has been overcharged, rather than simply that the work was negligently performed. On balance, Flitner & Company Pty Ltd is now, after more than three years since its final bill was sent and paid, entitled to the certainty and closure that the time limit is directed at achieving.  The Court does not consider that it would be just and fair to extend time so that Ms Del Monaco can now have Flitner & Company Pty Ltd’s costs assessed.  The parties are to be heard on the question of costs, and on the form of order.