Applicant Seeks Assessment of Legal Fees

Menzies v Capital Lawyers Pty Ltd [2022] ACTSC 120 (25 May 2022)

The applicant, a barrister, has sought assessment of the fees he has charged to the respondent, a law practice.  The conduct complaint against the applicant is ongoing in New South Wales.  The Court, in making its final orders, assessed the application of s 194 Legal Profession Uniform Law (NSW).

Facts:

The applicant, a barrister, has sought assessment of the fees he has charged to the respondent, a law practice.  The respondent acted for a client.  The respondent engaged the applicant and another barrister to act in proceedings involving the client in the ACT Civil and Administrative Tribunal, the ACT Supreme Court, and the High Court.  The applicant provided tax invoices relating to his fees.  In aggregate, the amount charged exceeded $200,000.

The amount outstanding is in the order of $160,000.  After the tax, invoices had been provided and an amount paid, the respondent wrote to the applicant disputing its costs liability. 

The applicant then applied to the ACT Supreme Court for the assessment of the legal costs claimed in the tax invoices.  After that occurred, the client lodged a complaint with the New South Wales Legal Services Commissioner (New South Wales Commissioner).

The New South Wales Commissioner referred the complaint to the New South Wales Bar Council.  On 5 May 2020, the New South Wales Bar Council referred the complaint back to the New South Wales Commissioner. 

On 11 May 2020, the New South Wales Commissioner referred the complaint to the ACT Bar Association for investigation.  The ACT Bar Council then investigated the complaint and in May 2021 provided a report and its investigation file to the New South Wales Commissioner. 

The New South Wales Commissioner then referred the complaint again to the New South Wales Bar Council to be dealt with under Chapter 5 of the Legal Profession Uniform Law (NSW) (Uniform Law).  

The applicant wishes that the costs assessment proceeds notwithstanding the pendency of the investigation.  The respondent wishes that the assessment be stayed until the New South Wales Bar Council had reached a conclusion in relation to the complaint.  

The respondent submitted that s 194 of the Uniform Law must be applied to the assessment of the applicant’s fees because the proper law of the contract was New South Wales law, the applicant was a New South Wales practitioner and the respondent’s complaint was referred to the Bar Council which consented to the complaint being dealt with under New South Wales law.

Issues:

I. Whether or not s 194 Legal Profession Uniform Law (NSW) is applicable, and if applicable, whether or not proceedings of cost assessment must be stayed pursuant to the court’s inherent jurisdiction.

Applicable law:

Court Procedures Rules 2006 (ACT), r 6015 - relied upon in holding that if a stay is to be granted it would be pursuant to the inherent powers of the court rather than pursuant to r 40(1)(g) of the Court Procedures Rules which applies at an early stage of proceedings in circumstances where there is an objection to jurisdiction or similar. 

Legal Profession Act 2006 (ACT), Pt 3.2 - applies to a matter if the client first instructs the law practice in relation to the matter in the ACT.

Legal Profession Act 2006 (ACT) s 46(1)(d) - provides that a local practising certificate is subject to any conditions imposed under chapter 4 (Complaints and discipline) or under provisions of a corresponding law that correspond to chapter 4. 

Legal Profession Act 2006 (ACT) s 265 - applies if this part applies to a matter because of section 263 (Application of pt 3.2—first instructions rule) or section 264 (Pt 3.2 also applies by agreement or at client's election). 

Legal Profession Act 2006 (ACT) s 266 - provides that a client first instructs a law practice in relation to a matter in a particular jurisdiction if the law practice first receives instructions from or on behalf of the client in relation to the matter in that jurisdiction, whether in person or by post, telephone, fax, email or other form of communication. 

Legal Profession Act 2006 (ACT) s 268 - applies if this part applies to a matter for a period and a corresponding law applies for another period. 

Legal Profession Act 2006 (ACT) s 269(m) - provides that a law practice must disclose information about the client's right—

              (i)     to accept under a corresponding law a written offer to enter into an agreement with the law practice that the corresponding provisions of the corresponding law apply to the matter; or

              (ii)     to notify under a corresponding law (and within the time allowed by the corresponding law) the law practice in writing that the client requires the corresponding provisions of the corresponding law to apply to the matter.

Legal Profession Act 2006 (ACT) s 296 - permits “A law practice that has given a bill in accordance with division 3.2.6 (Billing) [to] apply to the Supreme Court for an assessment of all or any part of the legal costs to which the bill relates”.

Legal Profession Act 2006 (ACT) s 316 - provides that "capping and sufficiency provisions" means:

        (a)     for the ACT—section 348 (Caps on payments from fidelity fund) and section 349 (Sufficiency of fidelity fund); or

        (b)     for another jurisdiction—the provisions of the corresponding law of that jurisdiction that correspond to those sections.

Legal Profession Act 2006 (ACT) s 454 - provides that this part is subject to any order, so far as the order prohibits or restricts the disclosure of information, made by—

        (a)     the ACAT in relation to disciplinary action taken under this chapter; or

        (b)     a corresponding disciplinary body in relation to disciplinary action taken under provisions of a corresponding law that correspond to this chapter; or

        (c)     a court or tribunal of the ACT or another jurisdiction.

Legal Profession Act 2006 (ACT) s 556(3) - provides that an Australian lawyer who is subject to—

        (a)     a requirement under section 526 (Requirements that may be imposed for investigations under ch 4); or

        (b)     a requirement under provisions of a corresponding law that correspond to that section;

must not, without reasonable excuse, fail to comply with the requirement.

Legal Profession Uniform Law (NSW), Ch 5, Div 7, Pt 4.3, s 194 - relied upon by the applicant in contending that the dispute over costs was not “before the designated local regulatory authority” or has been “closed or resolved”. 

Analysis:

The respondent submitted that the conclusions reached by the New South Wales Bar Council may be relevant to the assessment of the applicant’s fees because s 300 of the LP Act requires the court, when assessing legal costs, to consider whether or not it was reasonable to carry out the work to which the costs relate and whether or not the work was carried out in a reasonable way. 

Section 6 of the Uniform Law provides “designated local regulatory authority means a person or body specified or described in a law of this jurisdiction for the purposes of a provision, or part of a provision, of this Law in which the term is used”.

In the circumstances that must mean that there is currently a “costs dispute” before the New South Wales Commissioner or the New South Wales Bar Council.

Although [the client’s] complaint is in part a costs dispute within the meaning of s 269(2) of the [Uniform Law], the Bar Association notes that a total of $163,842.88 in respect of [the applicant’s] fees remains outstanding. Given that this sum exceeds the amounts as indexed in s 291(1) of the [Uniform Law], the Bar Council is unable to deal with any costs dispute forming part of [the client’s] complaint.

Hence, pursuant to s 291(2) of the [Uniform Law], the Bar Council is not to deal with or continue to deal with that part of [the respondent’s] complaint that constitutes a costs dispute but is to inform both [the respondent] and [the applicant] of the right to apply for a costs assessment or to make an application under the Legal Profession Uniform Law Application Act 2014 (NSW) for the matter to be determined.

It is sufficient to indicate that for the purposes of s 194, the dispute over costs was not “before the designated local regulatory authority” or has been “closed or resolved”.

Furthermore, and in the circumstances of this case, it is not a sufficient reason to stay the costs assessment proceedings. Rather, it appears that it is desirable to have those costs assessment proceedings resolved without further delay and permit the dealings in New South Wales with the respondent’s complaint to run their course.

Conclusion:

The Court directs that a registrar of the Court proceed with the costs assessment. 

The respondent is to pay the applicant’s costs of the application in proceedings dated 26 November 2021 and the application in proceedings dated 19 May 2022.