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The law of lawyers bills in Queensland

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Introduction

For a very long time in Commonwealth legal systems, the legal profession has been regulated for the benefit of clients of lawyers and the public at large. Among other things, there has been a recognised public interest in protecting those liable to pay legal fees from overcharging by lawyers. One of those protections is and has been the legal requirement for a bill to be provided so that the client can seek advice on the fees and charges.

As a result, one of the many modern obligations that lawyers in English legal systems have to comply with in the course of legal practice is to provide clients and any other persons liable for their fees with proper bills before such persons can be liable for or sued for such fees.

This article will outline the development of the law in respect of the requirements for solicitors’ bills in England and Australia, with a particular focus on Queensland and the Legal Profession Act 2007 (Qld).

Definitions/terminology

For the sake of clarity, it is important to define key concepts and identify changes in the terminology that have developed between England and Australia:

“bill of costs” or “bill” means a bill by a solicitor/law practice provided to a client or other person liable to pay legal costs.

“contentious business” meant work performed by a lawyer in a matter where there is a contest between the parties involved, typically litigation.

“itemised bill of costs” or “itemised bill” in Australian state jurisdictions, means a bill provided by a solicitor/law practice setting out the charges claimed for in detail, with separate items for each piece or continuous period of work performed, normally containing the date, the time spent and the name of the person for each item.

“gross sum bill” or “lump sum bill” means a bill by a solicitor/law practice describing the services for the charges claimed but which is not in the form of an itemised bill.

“non-contentious business” meant work performed by a lawyer which is not contentious business, eg conveyancing.

“taxation” or “costs assessment” between lawyer and client in Australian state jurisdictions, means/refers to a process by which someone independent to the lawyer and the client (called a taxing officer or costs assessor) is appointed by the Court to review the lawyer’s bill, consider the client’s objections to it (if any) and determine what is a proper charge for the amounts claimed by the lawyer.

“taxing officer” or “costs assessor” in Australian state jurisdictions, means/refers to the person who conducts the taxation or costs assessment. Traditionally, this person was a registrar or other officer of the Court, however under the Legal Profession Act 2007, costs assessors in Queensland are eligible lawyers who have been appointed by the Supreme Court.

When narrating/summarising the various cases, this article will use the same terminology that appears in each case. However, for the sake of clarity, the parties in the cases will be generally referred to as the solicitor/law firm and the client respectively where applicable.

BACKGROUND

Development of the law in England

The law of lawyers bills in Commonwealth jurisdictions originated and developed from England. The earliest legislation with respect to the bills of lawyers was passed in England, and from there emerged the early case law which interpreted the legislation. In order to understand the purpose of the early legislation as interpreted by the English Courts, it is important to understand the earlier existence and nature of taxation of lawyers’ bills.

Taxation

The Attorneys and Solicitors Act 1729 introduced a statutory right for clients to have the costs between solicitor and client assessed (taxed) by a court officer. That is, the court officer at the election of the client could review the solicitor’s charges contained in the bill and determine whether the client had been charged properly, and what the proper charge was.

Importantly, section 23 of the Attorneys and Solicitors Act 1729 provided that if as a result of taxation the bill was reduced by more than one sixth, the solicitor would have to pay for the taxation, whereas if the bill was reduced by a lesser extent, the burden of the costs of the taxation was a discretion of the Court. In such event, the client would be at real risk of bearing the costs of taxation and ending up worse off than if they had not sought taxation. It was therefore highly desirable for a client to have knowledge of their prospects of reducing the bill by more than one sixth on taxation.

Bill before suing

The Solicitors Act 1843 in England was the first statute which required solicitors to deliver bills to clients before they could sue for non payment of their costs. Section 37 of the Solicitors Act provided that a solicitor could not commence any action or suit for unpaid fees until one month after the delivery of a “Bill of such Fees, Charges, and Disbursements” to the client.

It is from this statutory requirement that the early case law developed on the requirements for solicitors’ bills. These early cases held that the bill needed to contain sufficient information about the charges for the client to be able to obtain advice from another lawyer about taxation of the bill, and in particular their prospects of reducing the bill by more than one sixth. The Courts held that this was the intention of parliament, because if the client reduced the bill by less than one sixth of the amount charged, it would be a costly exercise if they were also ordered to pay the costs of the taxation. A similar situation exists to this day in Queensland, where if the client reduces the bill by more than 15% on an assessment, the ordinary rule is that the law practice will have to pay the costs of the assessment, and otherwise the client will have to pay for it, unless the costs assessor otherwise orders.

Statutes ever since the Solicitors Act of 1843 have imposed requirements for the delivery of lawyers’ bills, which must be met before lawyers can sue for recovery for their fees. Such provisions primarily exist for the protection of consumers of the services of the legal profession.

As the rest of this article will show, the requirement that solicitors issue bills one month before having a right to recover their costs by suing for them exists to this day in England and Australia. Furthermore, the law continues to recognise that clients have the right to obtain sufficient information (which ordinarily is contained in the bill) to obtain advice about applying for a costs assessment and their prospects of having the solicitor bear the costs of the assessment.

Legal Profession Act 2007 (Qld)

The Legal Profession Act 2007 is the in-force statute in Queensland that regulates the legal profession of that Australian state. Other Australian jurisdictions have very similar regulatory regimes.

Section 300 of the Legal Profession Act 2007 (Qld) defines the following terms:

“itemised bill” means a bill stating, in detail, how the legal costs are made up in a way that would allow the legal costs to be assessed under division 7.

“lump sum bill” means a bill that describes the legal services to which it relates and specifies the total amount of the legal costs.

Section 301(1) of the Legal Profession Act 2007 (Qld) defines a third party payer as a person who is not a client but is nevertheless liable to pay legal costs:

(1) A person is a “third party payer”, in relation to a client of a law practice, if the person is not the client and—

(a) is under a legal obligation to pay all or any part of the legal costs for legal services provided to the client; or

(b) being under that obligation, has already paid all or a part of those legal costs.

Section 330 of the Legal Profession Act 2007 (Qld) provides for two types of proper bills and imposes requirements for such bills:

330 Bills
(1) A bill may be in the form of a lump sum bill or an itemised bill.
(2) A bill must be signed on behalf of a law practice by an Australian legal practitioner or an employee of the law practice.

(3) It is sufficient compliance with subsection (2) if a letter signed on behalf of a law practice by an Australian legal practitioner or an employee of the law practice is attached to, or enclosed with, the bill.

(4) A bill or letter is taken to have been signed by a law practice that is an incorporated legal practice if it—

(a) has the practice’s seal affixed to it; or

(b) is signed by a legal practitioner director of the practice or an officer or employee of the practice who is an Australian legal practitioner.

(5) 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; or

(d) if the legal costs or the basis on which they have been calculated have or has been agreed as a result of a tender process—in a way provided as part of the tender process or by later agreement between the client and the law practice.

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

(7) Despite anything in subsections (2) to (6) , a bill may be given to a client electronically if the client consents to the bill being given electronically.

In addition to the requirements of Section 330, Section 331 of the Legal Profession Act 2007 (Qld) provides that:

331 Notification of client’s rights

(1) A bill must include or be accompanied by a written statement setting out—

(a) the following avenues that are open under this Act to the client in the event of a dispute in relation to legal costs—

(i) costs assessment under division 7;

(ii) the setting aside of a costs agreement under section 328; and

(b) any time limits that apply to the taking of any action mentioned in paragraph (a).

(2) Subsection (1) does not apply in relation to a sophisticated client.

(3) A law practice may provide the written statement mentioned in subsection (1) in or to the effect of a form approved by the chief executive for this subsection, and if it does so the practice is taken to have complied with this section in relation to the statement.

Section 332 of the Legal Profession Act 2007 (Qld) provides that:

332 Request for itemised bill

(1) If a bill is given by a law practice in the form of a lump sum bill, any person who is entitled to apply for an assessment of the legal costs to which the bill relates may request the law practice to give the person an itemised bill.

A bill in the form of a lump sum bill includes a bill other than an itemised bill.

(2) The law practice must comply with the request within 28 days after the date on which the request is made.

(3) If the person making the request is liable to pay only a part of the legal costs to which the bill relates, the request for an itemised bill may only be made in relation to those costs that the person is liable to pay.

(4) Subject to subsection (5), a law practice must not commence legal proceedings to recover legal costs from a person who has been given a lump sum bill until at least 30 days after the date on which the person is given the bill.

(5) If the person makes a request for an itemised bill within 30 days after receiving the lump sum bill, the law practice must not commence proceedings to recover the legal costs from the person until 30 days after complying with the request.

(6) A law practice is not entitled to charge a person for the preparation of an itemised bill requested under this section.

These provisions allow a client or third party payer to obtain an itemised bill upon request and without being further charged. They also make a law practice’s right to sue for its costs conditional upon waiting one month after delivering a bill, and complying with any request by a client or third party payer for an itemised bill if made within 30 days after a lump sum bill is issued.

Section 339 of the Legal Profession Act 2007 (Qld) provides that:

“A law practice must not start legal proceedings to recover legal costs from a person until at least 30 days after the law practice has given a bill to the person under sections 330 and 331 or under provisions of a corresponding law that correspond to sections 330 and 331.”

ENGLISH CASES

The English cases are where the law on costs and lawyers’ bills in Australia originates from. The principles developed in those early cases are the foundation of the modern law. It is from these cases that a client’s right to sufficient information contained in the bill to obtain advice about taxation was established. A failure to provide sufficient information would mean that there had not been bona fide compliance with the statute requiring the delivery of a bill of charges, and the solicitor would be consequently nonsuited because he had no right to sue the client in the first place.

The earliest cases dealt with bills that failed to state the court(s) in which the solicitor performed the work they had changed for. This was important because such information would reveal which Court the client could seek taxation, and some Courts had different charges to others. Initially, the English courts held that solicitors’ bills must identify the court(s) in which the business was done in, otherwise they were inadequate for that reason alone, however this requirement was relaxed over time. One reason for this change was that it was increasingly found that such information should normally already be within the client’s knowledge. Another cause was a subtle change to the statute regulating lawyers’ costs. Initially, a bill had to be referred to taxation by the Court “in which the business contained in such bill, or the greatest part thereof in amount or value, shall have been transacted”. The amended enactment provided that a number of English Courts had jurisdiction to order taxation of a bill “in case any part of such business shall have been transacted in any other Court” than a Court of Equity. As a result, it no longer became necessary for a client to know in which court or courts the work was done, so long as they knew that it was not in a Court of Equity.

The following are the most significant cases in chronological order.

Ivimey v Marks (16 M. & W.) 843

The Facts

The solicitor sued the client for his outstanding fees. The bill contained charges for business done in a Chancery suit and charges for work done in another suit for which the bill failed to state the Court in which the work for that suit was done. It was however apparent that the suit was in one of the Superior Courts of law, as the charges were the same in each of the Superior Courts.

The Decision

The client sought a nonsuit, on the ground that the bill that had been sued on did not comply with section 37 of the Solicitors Act 1843, which required that a bill of fees, charges and disbursements be delivered at least one month prior to commencing the suit. Farrer for the solicitor argued that although in Engleheart v Moore it was held that section 37 was intended to provide the client with a full opportunity of determining whether the work was performed and the charges were reasonable, and that generally the bill should state in which court the business was transacted, this was because in that case the charges in the Courts were different. Farrer submitted that requirement to state the Court did not apply here because the common law charges were the same in all of the courts.

Parke B held that the bill had to state the Court not only for the client to judge the charges, but also so that he would know where to apply for taxation of the bill.

Pollock CB held that the rule that a solicitor’s bill should state in which courts the business was transacted was absolute, because otherwise an attorney looking at the bill would not have been able to advise the client on the propriety of having it taxed. Parke B, Rolfe B and Platt B concurred.

The Exchequer of Pleas therefore entered a nonsuit against the solicitor.

Waller v Lacy, 1 Scott’s N. R. 186

The Facts

The solicitor sued for a number of bills for charges and disbursements from 1828 and 1836, and the client pleaded various defences of non assumpsit, a statute of limitations, payment, set-off, no signed bill being delivered and also had a cross-demand for articles. The bill contained seven charges only stated in the aggregate for each matter. For four of those matters separate bills had previously been rendered by the solicitor but had not been duly signed by him. An arbitrator referred the matter for various questions for determination by the Court of Common Pleas.

The Decision

Tindall CJ (with Coltman Bosanquet & Erkskine JJ agreeing), held that a sufficient bill had been delivered for some portions of the plaintiff’s demand. With respect to the seven charges only stated in the aggregate, two of them were found to be insufficient/ have had no sufficient bill delivered as required by the statute. However, for the remainder of the aggregate items no such objection existed because the work for them did not apply to matters in law and equity, and were therefore not subject to the requirement of the statute. The solicitor was criticised for providing ‘disjoined particulars’, which disclosed no grounds for the judgment of the taxing officer. It was also held that the solicitor’s note at the bottom of one of his bills was an admission of the defendant’s alleged set-off, which was not barred by statute.

Keene v Ward [1849] EngR 1210

The Facts

Appeal by the client against judgment for the plaintiff, a solicitor who had sued for his outstanding fees. The bill was for acting for the client/defendant in 12 different actions, where for 11 matters the bill disclosed the court that the actions were conducted in, and one whose items were for a smaller amount, did not. The client alleged that this rendered the entire bill invalid and sought to rely on Ivimey v Marks (supra).

The Decision

The Court held that Ivimey v Marks is distinguishable because in that case the client had insufficient information about in which jurisdiction to seek taxation, however in this case the client had that information because in ordinary course taxation is sought in the Court where the principal part of the business was done. Rule discharged.

Pattison J opined that:

“In requiring the delivery of an attorney’s bill, the Legislature intended that the client should have sufficient materials for obtaining advice as to taxation; and we think that we fulfil that intention by holding the present bill sufficient within that principle; whereas, if we required in respect of every item a precise exactness of form, we should go beyond the words and meaning of the statute, and should give facilities to dishonest clients to defeat just claims upon a pretence of a defect of form in respect of which they had no real interest.”

Importance of this case: This case confirms that exactness of form is not required. What the Court was interested in was whether there is sufficient information for the client to know what he was being charged for, and in which Court the client should apply to for the costs to be assessed.

Cozens v. Graham (1852), 12 C. B. 398 (16, Jurist 952)

The Facts

The solicitor issued a bill for work done which contained the name of the cause and described the work done but not the Court. When the solicitor sued for outstanding fees, the client (who was also an attorney) inter alia pleaded that no signed bill had been delivered. The solicitor to prove his case gave in evidence correspondence he had sent to the client which enclosed some court documents and therefore showed the business was done in one of the common law courts.  The undersheriff nonsuited the solicitor, who then obtained a rule nisi.

The Decision

Jervis CJ held that although the rule requiring that solicitors disclose the name of the court should be applied strictly, the correspondence showed that the solicitor had done so. Maule J agreed, noting this was not a case where the client could have been confused about the Court, because the correspondence to him made it clear. Cresswell and Talfourd J concurred. Verdict was granted to the solicitor.

Cook v Gillard (1852) 1 E & B 26

The Facts

Appeal by client against a judgment for the plaintiff, a solicitor who sued for outstanding fees. The client alleged that the first and last parts of the bill were insufficient as they did not show in which Court the business was transacted, making the whole bill invalid under statute.

The Decision

The Court discussed the authorities that stated it was necessary for a bill to state in which Court the business was conducted because the Court in which business was transacted had jurisdiction for the taxation of charges for that business, fees were different in different courts, and also to allow the client the opportunity to ascertain whether the business was done and whether the charges were reasonable. However, the solicitor relied on Keene v Ward, a more recent case where it was held it was not necessary for a bill to state in which Court business was transacted as the scale of costs was now the same in all superior courts.

Campbell CJ, who delivered the judgment of the Court, noted that the earlier cases had proceeded according to the assumption (contrary to fact) that clients know nothing about the litigation that has been engaged on their behalf. Campbell CJ held that the judgment of Cozens v Graham (16 Jurist, 952) gives effect to the principle that a client cannot object to a bill on the basis that a lack of information contained in it if it appears that he is already in possession of such information. Further, while the Act gives clients a right to reasonably request more information, a bill intended and providing all requisite information should be considered compliant unless a client shows that information they really wanted had been withheld. The client’s complaint was dismissed and verdict entered for the solicitor.

Importance of this case: A former client cannot claim not to know things and then complain about the adequacy of the bill if it appears they already have the information required to obtain advice about taxation. The client bears the onus of proof of showing they do not have sufficient information.

Pigot v. Cadman. 1 H. N., Exch. Kep., 837

The Facts

The solicitor issued a bill for three separate transactions which specified extra costs to those which were taxed but not the items that were taxed. Two further bills were issued after the solicitor sued, because the client had requited the solicitor to state whether he had any further claims against him. At trial, the jury found in favour for the client, save for the first division of the first bill. The client then appealed, contending he should have had full judgment in his favour because the first bill failed to disclose the whole of the solicitor’s claim and which items had been allowed on taxation, only those for which the solicitor claimed extra costs.

The Decision

Bramwell B held that the rule should be absolute. Relying on Ivimey v Marks, the failure to state the items on the taxed costs meant that a bad part of the bill rendered the whole bill bad, despite the jury finding that the client was partly liable for the bill.

Haigh v Ousey (1857) 7 El. & Bl. 578 119 EngRep

The Facts

Motion for a non-suit by a client on the basis that no signed bill of costs had been delivered because the bill that had been provided did not include sufficient information. The client objected to part of the bill, namely the charges under the heading “yourself ats Walker”, which contained descriptions of “Attending on the charges of plaintiff’s attorneys herein”, “writing for particulars”, “instructions to defend” and “Agent perusing correspondence, and attending plaintiff’s attorneys; conferring and inspecting original writ; arranging amount of costs; when, under the circumstances, plaintiff’s attorneys agreed to accept 19s. 6d. in discharge of debt and costs”.

The Decision

The Court held that the bill was not inadequate because it was reasonably clear to the client that the business was conducted in one of the Superior Courts at Westminster. Applying Keene v Ward, it was held that the test was whether there were sufficient materials for the client to obtain advice about taxation, and even if the section of the bill objected to had been bad, it would not have invalidated the rest of the bill.

Erle J said that Keene v Ward and Cook v Gillard established that a client does not have a right “to use astuteness perversely to misunderstand” the information contained in a bill, and that “The true principle, it seems to be, that the bill should give such reasonable information as would easily enable the client to ascertain if the charges are right”. Erle J also made the following observations:

“The principle laid down in Ward v Keene that all that is required is that the bill should supply sufficient materials for advice, is not, I think, any where disputed; but it is said that in applying it, we must consider it indispensable that a solicitor on reading the bill may be able without asking for further information, to advise whether the items are overcharged; and that for this purpose if any of the items are for business in court, it is indispensable that the court should be named. Now I am sure no bill that contained charges for anything beyond mere steps in a cause ever did contain this full information. No person on earth by reading a bill of costs without further information can tell what is a fair charge for such an item as “advising you”. It may have been a minute’s work; it may have required a week’s careful consideration. No man, unless there were interminable prolixity in the bill, could tell from the bill alone what is the fair charge for matters depending on the quantum meruit, that is, for almost everything except mere steps in a cause. It seems to me that the statute with regard to solicitors’ bills ought to be construed on the principle on which we act with regard to particulars of demand. The bill should give reasonable information; if the client wants more he may demand it. Formerly, the law has been administered as if it were the object of the Act to enable a fraudulent client to defeat his solicitor on a mere matter of form which it would be ludicrous to suppose to have misled in point of fact. But in Cooke v Gillard, after an elaborate review of the law, a rule was laid down, applying which to this bill I find no item insufficient. But I am further of the opinion that, supposing there was one bad item, it would not prevent the plaintiff from recovering for the rest. The doctrine that it would is founded on what was thrown out in Ivimey v Marks that a solicitor applied to for advice cannot tell whether the sums which he thinks overcharged form one−sixth of the whole, unless he sees all the items. It may be desirable that he should be able to tell this; but the evil arising from enabling a client to lie in wait with a formal objection, and dispute the whole bill because of the absence, as to some one item, of information which he never asked for or needed, greatly outweighs this. To decide that one bad item vitiates the whole bill is to affirm that the legislature intended a fraudulent client might lie in ambush with a technical point until the moment of trial.”

Lord Campbell CJ said that “the bill must disclose on the face of it sufficient information as to the nature of the charges”. He went on to say that “I do not think that the Legislature intended to throw on a solicitor the burthen of preparing a bill such that another solicitor on looking at it should, without any further statement, see on the face of the bill all information requisite to enable him to say if the charges were reasonable”.

Crompton J said of a solicitor’s bill that “I think it would be a very dangerous rule to require the description to be such as to enable a person of competent skill on reading the bill to say, ex facie, whether it is reasonable. I think it should be sufficient if it contains such reasonable information as, coupled with what the client must be able to tell him, would be sufficient to enable him to judge.”

Importance of this case: This case emphasises that a bill will be adequate as long as it is reasonably clear what the client is charged for. The idea that another person viewing the bill should be able to assess whether the charges are reasonable was rejected. The Court affirmed the principle that it is not simply by looking at a bill that a lawyer can advise whether to seek taxation, but rather than the client must provide the lawyer with information about the work performed in order to obtain advise about the charges.

Philby v Hazle [1860] EngR 868

The Facts

The solicitor entered onto an agreement for a fixed fee of 50L for business done and subsequently sued the client for non-payment of that amount. The client inter alia pleaded that no sufficient bill had been delivered by the solicitor. The bill delivered charges 50L for one item, with the remaining items left blank, save for disbursements. The trial judge refused to enter a nonsuit against the solicitor and the jury subsequently entered a verdict in his favour. However, Mellor QC obtained a rule nisi to enter a nonsuit on the ground that no signed bill had been delivered.

Counsels for the solicitor shewed cause by submitting that solicitors were entitled to enter into fixed fee agreement with clients, subject to the Courts interfering. Mellor QC and H Lloyd found in support of the rule nisi that no signed bill had been delivered because it was not in taxable form.

The Decision

Erle J held that the statute required that the signed bill be drawn and framed in order for the client to be able to have it taxed. Because of an attorney’s superior knowledge of professional costs, the law should prohibit solicitors from reaching agreements with their clients that may entitle them to more than they otherwise would, as this would deprive clients of the protection that the statute intended. Williams J agreed with Erle J, holding that such agreements were void as manifestly contrary to the general policy of the law. Willes and Bryles concurred. The solicitor was nonsuited.

In re Baylis [1896] 2 Ch. 107

The Facts

The solicitor acted for client at an agreed price and sent him bills which the client then expressed satisfaction with and signed. Many of the bills merely contained descriptions of “costs” or “account of costs”. The client then changed solicitors and sought the delivery of bills of costs.

The Decision

The Court held that no bill had been delivered, and therefore there was no entitlement to payment of the solicitor’s bill. The solicitor was ordered to deliver bills of costs.

Cobbett and others v. Wood [1908] 1 K.B. 590

The Facts

The client had been served with and paid an account for party-party costs after an unsuccessful petition in the High Court and a costs order against him. The Plaintiff firm delivered a bill for its costs omitting the items allowed on the party-party taxation of costs. The client’s defence to the firm’s claim was that no proper bill of costs had been brought before the action because the party-party costs were missing from the bill.

The Decision

Referring to the cases of Cook v Gillard and Haigh v Ousey (supra), the Court held that the firm’s bill gave all the information that can reasonably be required in the circumstances. Although the costs recoverable in subsequent proceedings before justices were not recoverable because of the binding precedent of Cale v James [1897] 1 QB 418, the fact that the bill contained items for such work did not make the bill bad.

Importance of this case: This case reinforces the fact that it is not just the bill itself that establishes whether the client has sufficient information about the fees and charges, because the documents and knowledge that a client is presumed to have are also relevant. A client cannot rely on a defect of form in a bill if they know enough from other sources of the work that was performed on their behalf.

Osborn v Osborn [1913] 3 K.B. 862

The Facts

The firm had acted for the client in a successful action in which the other party was ordered to pay party-party costs, which he subsequently did following taxation. Upon request, the firm later delivered to the client a bill which included the party-party costs. The bill was made out in two columns so as to shew in the first column the several items of the taxed bills amounting in the aggregate to the above-mentioned sum of 1289l. 11s. 6d., and in a second column the additional items claimed by the solicitor as between solicitor and client.

The client by summons then sought that the bill, insofar as it related to solicitor-client items be taxed, and initially a Master made an order for taxation. The client contended to the Master that the party-party items were not part of the bill to be taxed, as they had already been taxed. The Master disagreed. The client then sought delivery of bills by the firm for the solicitor-client costs excluding the party-party items which had already been allowed on taxation. The Master dismissed this summons with costs, and an appeal to Channell J. was also dismissed with costs.

The Decision

The Court of Appeal held that if and in so far as this taxation was to take place under the Solicitors Act, 1843, the Master did right in refusing to make the order asked for, as the earlier taxation of party-party costs did not form a ground for making a special order for taxation. Whilst there was jurisdiction to order taxation of part of a bill, that jurisdiction existed not under s. 37 of the Solicitors Act, but under the inherent jurisdiction of the Court apart from the statute.

Buckley LJ observed that:

“A solicitor’s bill against his client for costs in an action in which party and party costs are recoverable against the opposite party ought to contain the whole bill of the fees, charges, and disbursements in reference to the business to which it relates and not merely a bill of the extra costs chargeable as between solicitor and client.”

Buckley LJ held that the bill was sufficient because it complied with that requirement.

Re a Solicitor: In Re a taxation of costs [1955] 2 Q.B. 252

The Facts

The client consulted solicitors to advise her on questions of domicile, custody of her children and maintenance from her husband. They took counsel’s opinion and settled a draft petition for judicial separation. She then changed solicitors. The first solicitors delivered a bill in lump sum form containing a very detailed description of the work they had done on her behalf.

The Decision

Lord Denning held that the bill for non-contentious business is sufficient so long as it states what work was performed for the client. However, because of the Court’s finding that the work was partly in respect of contentious business, the bill was held to be insufficient.

Eversheds v Osman (2000) 1 Costs Law Reports 54

The Facts

The firm had acted for the client in a drawn-out extradition matter. The firm sued for ten unpaid bills. The aggregate amount claimed was £214,979.86 plus interest. The client alleged that the bills were inadequate. The bills were in the form of an amount charged for fees in the costs column with the description of “general services”, followed by a number of itemised disbursements. However, the bills delivered were accompanied with print−outs of computerised time records of the firm that stated the various forms of activities engaged in by the firm together with the names of persons engaged in them, the date of their engagement, the time occupied and the consequential cost.

The parties agreed that the test to be applied was that enunciated by Crompton J in Haigh v Ousey. At first instance, it was held the bills did not provide sufficient information for the client to obtain advice and make up his mind on taxation.

The firm appealed with respect to the first nine invoices.

The Decision

On appeal, it was held that as the client did not deny receiving the print−outs of the firm’s computerised time records and it was not in dispute that all or nearly all of the work was in respect of the one matter, the bills combined with the computerised time records would have been sufficient for the client to obtain advice as to taxation. Nourse LJ commented that:

“Against that, Mr Reid, for the defendant, makes a number of points. First, he says that the bills themselves, which simply refer to “General Matters”, are entirely insufficient. Had there been nothing more than the bills, I would have seen great force in that submission. Secondly, Mr Reid says that the defendant, although he knew that the plaintiffs had devoted an immense amount of time to his affairs, did not know whether the fees which they were charging were reasonable. As to that point, I am bound to say that this is not a case where the defendant is unable to judge as to the justice of the amount of the fees which are charged. He had been told from the start that he would be charged at hourly rates attributable to the particular grade of person who transacted the business on his behalf.”

Importance of this case: If the bill is accompanied by further information such as the computerised printouts of the firm, if it states the various forms of activities engaged in by the firm, the dates, the time spent and therefore the cost, it may be held to make the bill sufficient. Also, if it is not in dispute that significant time was spent on the client’s matter, this case seems to indicate that a client can’t claim they are unable to judge the fairness of the charges, presumably because they would already know enough about those charges.

Ralph Hume Garry (a firm) v Gwillim 2002 EWCA Civ 1500

The Facts

The firm acted in a partnership dissolution dispute and rendered 23 bills to the client, who was himself an experienced solicitor. The client paid some of the bills, but failed to pay others, and the firm sued him. At first instance, the client applied shortly before trial to strike out the claim against him on the basis that most of the bills did not bona fide comply with section 64 of the Solicitors Act 1974, as they failed to disclose sufficient details of what he was being asked to pay for. The application at first instance in the Queens Bench division was dismissed, as it was found that the evidence showed the firm had a real prospect of showing that the client had sufficient information about the fees and charges referred to in the bills. The client appealed.

The Decision

The judgment contains a lengthy discussion by Ward LJ of the statutory history and the development of the case law with respect to the requirements for solicitors’ bills.

The Court of Appeal reaffirmed the requirement that the client has sufficient information to decide whether to seek taxation and held that the proper principle to be that there must be something in the written bill to indicate the ambit of the work, but that inadequacies of description of the work done may be redressed by accompanying documents. The adequacy of a bill is not to be considered on the face of the bill alone, and exactness of form is not required. The knowledge of the client is also central in determining whether a bill is adequate. The Court of Appeal held that in order to show the firm’s bill has not bona fide complied with the Solicitors Act 1974, the client must show that there is no sufficient narrative to identify what he is being charged for and also that he does not have sufficient knowledge to take advice on whether or not to apply for taxation.

Quote:

“The sufficiency of the narrative and the sufficiency of his knowledge will vary from case to case, and the more he knows, the less the bill may need to spell it out for him. The interests of justice require that the balance be struck between protection of the client’s right to seek taxation and of the solicitor’s right to recover not being defeated by opportunistic resort to technicality.”

The Court of Appeal held that in this case each bill was obviously and latterly expressly for professional charges, and identified the matter and the periods of time they applied to. Therefore, the claim should not be struck out as the issue of adequacy of the bills (together with the client’s knowledge) was a triable matter and the appeal had to be dismissed.

Importance of this case: This case highlights the principles that a bill must contain sufficient information to receive advice about taxation, the client’s knowledge is central to this question, exactness of form of a bill is not required and the onus is on the client to show they have not been provided with or have sufficient information to obtain advice.

VICTORIAN CASES

Malleson Stewart Stawell and Nankivell v. Williams [1930] V.L.R. 410

The Facts

The solicitor issued a bill for various matters in which we had acted for the client. The bill contained a statement in detail of the services rendered for each matter, but did not set out separate charges for each service provided. The solicitor sued the executors and trustees of the client by way of summons, and one of them entered an appearance and submitted that the bill failed to comply with section 92 of the Supreme Court Act 1928.

The Decision

It was held by Mann J that:

“Courts have repeatedly held that a bill of costs must contain such details as will enable the client to make up his mind on the subject of taxation, and will enable those advising him to advise him effectively as to whether taxation is desirable or not.”

Because the bill had failed to set out the charges for each detail or description of work, the solicitor’s summons was dismissed.

Piper Alderman v Smoel [2017] VSCA 42 (9 March 2017)

The Facts

Appeal by firm against finding that their 23 bills were itemised bills because that finding meant that the amount of their charges was limited to the amount of the bills. The Primary Judge held that “the particulars of the charges in the tax invoices and attendance schedules are sufficient to enable the applicants to obtain advice and make an informed decision on the nature of and the reasonableness of the charges and whether or not to exercise their rights to seek a review of the costs reasonably free from the risks of having to bear the costs of the taxation”.

The Decision

The Court of Appeal noted the following with respect to the statutory definition of an itemised bill:

“The text of s 3.4.43(2) and the definition of ‘itemised bill’ direct attention to the ability to use a bill for the purposes of a costs review. True it is that some of the authorities which focus on the need for sufficient detail in a bill to enable the recipient to make a decision as to the reasonableness of the charges, whether to have the bill taxed and to take advice in that regard may therefore, at first blush, seem to miss the mark for the purposes of the LPA definitions.[34] Moreover, some of those authorities speak in these terms when they are dealing with lump sum, rather than detailed or itemised bills for taxation. However, little turns on this as a bill must at least satisfy that test if the bill is in a form that may be reviewed under Div 7. Given the statutory language in the LPA, it is perhaps better to express as an overarching requirement for an itemised bill that it include sufficient detail so that, if the bill proceeded to a review, the parties would have enough information to understand what work has been charged for, the amount charged for the work performed, whether any particular charge is sustainable and to make submissions to the judicial officer presiding in the Costs Court.”

The Court of Appeal held that the bills, although for some charges inadequate, were generally sufficient. Leave granted to appeal, but Appeal dismissed.

Importance of this case: Itemised bills need not contain detailed descriptions, and even if some items are inadequate, this does not make the bill a lump sum bill.

NSW CASES

Florence Investments Pty Ltd v HG Slater & Co [1975] 2 NSWLR 398

The Facts

After acting for the client in some non-contentious business, the firm delivered a very brief account dated 1st August 1974 for $5,242.32 (the first bill). After the client asked for details, the firm delivered a detailed bill dated 26th November 1974 for $32,409 (the second bill). The client then sought that the first bill be taxed, or alternatively that the second bill be taxed, but that the amount claimable by the firm be limited to the amount of the first bill.

The Decision

Bowen CJ in Eq rejected the firm’s contention that the first bill had been rendered upon a condition of “reasonably prompt payment”.

Bowen CJ held that the authorities showed that in order to be a taxable bill under statute, the bill had to set out separate charges for items of work and also provide such reasonable information as would enable the client to take advice as to its taxation. Therefore, the first bill was not a taxable bill. Bowen CJ further opined that it was doubtful whether a lump sum bill could be referred for taxation. Bowen CJ held that the second bill was a bill in accordance with the Legal Practitioners Act. An estoppel argument advanced by the client was rejected because there was no evidence of the client having relied on the first bill in any way. As a result, Bowen CJ held that the firm was entitled to claim for the amount of the second bill.

Zizza v Seymour [1976] 2 NSWLR 135

The Facts

The solicitor sued the client in the District Court to recover the balance of his professional fees and expenses for acting in connection with the defence of the client’s son on a criminal charge of conspiracy to murder. The client defended the claim on the sole basis he had not engaged the solicitor, but that defence failed and judgment was entered in favour of the solicitor. On appeal, the client contended, and the solicitor conceded that due to a lack of itemisation the bills were not bills within s. 21(1) of the Legal Practitioners Act 1898.

The Decision

Moffitt P (with Hutley JA agreeing) held that the client should not be prevented from raising this new argument on appeal, because the solicitor was not entitled at law to recover his fees, the client was ignorant and self-represented, and all the relevant material was before the District Court. The appeal should be allowed with costs, however the client should pay the solicitor’s costs up to trial and the solicitor should receive a certificate under the Suitors’ Fund Act.

Mahoney JA dissented, noting that the client had accepted a bill had been delivered at trial, and had never disputed the quantum. Because he had not availed himself of a defence with respect to the bill, it could not be later relied on.

Henchman v Hannes BC9302176 (unreported) (14 September 1993, 22 October 1993)

The Facts

The Plaintiff firm sought various declarations against their former client, whom they had acted for in proceedings against her husband over a number of years. The basis of the defence was that the accounts sent to the defendants did not constitute bills of costs, and therefore the firm had contravened s198(1) of the Legal Profession Act (NSW) by commencing proceedings before issuing bills of costs.

Most of the bills had very brief entries such as “attendance”, “conference”, “review documents”, “letter” etc. However, bills from August 1991 to June 1992 were more detailed, eg “letter to client”, “telephone Family Court re file”, “attend collating files” and “peruse letter from husband’s solicitors”.

The Decision

The Court held that the bills from August 1991 to June 1992 did constitute bills of costs but that the balance did not. The Court also held that there’s a difference between requirements of a bill and what may be required on assessment:

“Care must be taken to differentiate between what is required in a bill and what might be necessary for the purpose of carrying out a taxation of that bill. The latter may require further detail and particulars to be given in order to satisfy a taxing master that the nature of the work justified the charge which was made. As the judges in Haigh v Ousey, above, said, it is not expected that the detail given in the bill will supply sufficient information in order to say if the charges are reasonable. Nevertheless there must be enough detail to enable the client to know what was done during the time for which a charge was made.”

Importance of this case: This case shows that in NSW, an itemised bill only needs to state enough information to say what was done and with/to whom. 1-3 word descriptions of work performed are generally inadequate because they say very little about the specific items of work done. However, brief descriptions are fine if they provide clients with sufficient information to know what they are being charged for.

McGrath v Roe BC9601315 (unreported) (22 March 1996)

The Facts

The firm had obtained judgment against the clients. The clients sought delivery of bills from the solicitors and consequential relief by summons, alleging that five of the bills were not in proper form. The firm alleged that three of the bills were proper bills of costs.

The Decision

Referring to the cases of Haigh v Ousey and Henchman v Hannes and other cases, it was held that the case law of whether a bill is a bill of costs is a question of whether there is sufficient information for the client to obtain advice as to taxation.

The Court held that a client should know about letters written to them, but may not recall the substance of telephone calls many years later.

The Court also held that the last part of one bill containing generalised headings for charges for preparation was “quite inappropriate” as it offended the principle in Henchman v Hannes and would make it difficult to assess whether it should be taxed. Another bill had no identification of phone calls and letters which consisted of about 20% of the bill. The third bill contained generalised descriptions without listing the activities. Held that the bills were inadequate.

The firm was ordered to deliver bills of costs to the clients and a stay on enforcement of most of the judgment was granted.

Gorczynski v Beilby [2005] NSWSC 884 (5 September 2005)

The Facts

Appeal by clients against a determination of a costs assessor to allow the firm to withdraw its bill and issue a more detailed one for a higher amount. The accounts delivered to the clients during the retainer showed the date and service performed as well as the number of units. When a dispute arose, the firm asked the clients to pay the outstanding costs and they refused to do so. The firm subsequently issued proceedings and obtained default judgment against the clients. The clients successfully had the default judgment set aside due to the firm grossly overclaiming on the invoice and the firm later withdrew their claim with indemnity costs because of defects with the invoices, including that they were not addressed to the defendant. The firm then retained costs assessors to draw up bills of costs, which exceeded the amounts originally claimed. The firm relied on the case of Florence Investments Pty Limited v H G Slater & Co [1975] 2 NSWLR 398.

The Decision

The Court held that the original bills were not in taxable form due to lack of narrative and failures in many cases to identify who performed the work.

Importance of this case: This case establishes there is a difference between an itemised bill and a bill that may be required on an assessment. This case also indicates that in some cases short descriptions of the work may be insufficient to make the bill one in taxable form, particularly if the bill does not indicate who did the work and telephone calls made to the client were years old.

QLD CASES

Currie v Robinson [1968] QWN 25

The Facts

motion by a client to set aside judgment in default of appearance. The client contended that no bill in taxable form had been provided to him prior to the commencement of the proceedings. The bill consisted of a statement of account containing charges for each matter in respect of individual matters the solicitor had acted for the client with no particular allocation of costs for any particular actions done by the solicitor.

The Decision

Following the judgment of Malleson Stewart Stawell and Nankivell v. Williams [1930] V.L.R. 410, it was held that the bill was not a bill of fees charges and disbursements as required under section 22 of the Costs Act of 1867. The judgment was set aside, however due to the client’s inaction which led to the judgment, costs were awarded to the solicitor. The solicitor was granted leave to deliver a fresh bill of costs.

Re Walsh Halligan Douglas’ Bill of Costs [1990] 1 Qd R 288

The Facts

Application by the client, a public company, for delivery of bills in taxable form. The firm sought declarations that they had a valid and enforceable agreement within the meaning of s.3 of the Solicitors Act 1891. During the retainer, the client and firm had verbally agreed that the bills would be presented in lump sum form and then later in taxable form. There is a discussion of the cases at 292 establishing that payment of costs was no bar to client requiring delivery of bills in taxable form. The question was whether the bills were bills that fell within section 22 of the Costs Act of 1867.

The Decision

The Court held that that the information contained in the bills was sufficient because they listed the hourly rates and the time spent on each activity, in context where client was not unsophisticated, and a Sydney firm also engaged by the client was supervising the work. Therefore, the bills fell within section 22 of the Costs Act of 1867 and so the bills older than 12 months could not be taxed unless special circumstances existed. The bills were held to be not ‘redolent of overcharge’, and were consistent with the verbal agreement with the client. The Court held that the bills older than 12 months presented in lump sum form would not be assessed, but those after that time would be.

Importance of this case: quote at 294 from Malleson Stewart Stawell and Nankivell v. Williams [1930] V.L.R. 410 about clients needing bills sufficient to allow them to get advice about taxation. Also:

“if the test be what is adequate in order to enable the client to determine on advice whether to seek taxation, it is reasonable to take into account the degree of business and legal sophistication of the client, whether the client has in-house legal advice, whether another firm of solicitors is also advising, and any agreement reached between the parties as to the basis for charging.”

Re Bailey’s Bill of Costs [1994] 1 Qd R 576

The Facts

From December 1991 to May 1992 the firm acted for the client in a criminal matter. A dispute about costs arose, and the client applied to have four bills assessed. The client sought a ruling that he was not out of time because the bills did not comply with the Costs Act 1867.

The bills contained four columns and specified the date the service was said to have been provided or a cost incurred, the service or cost, the time engaged or the length of a document prepared, the basis or rate of charge and in the right-hand column concluded the charge for each item.

The Decision

Kiefel J held that:

“Here all the bills contain sufficient particulars. They set out separately the fees, charges and disbursements. Subject to the question as to the lack of signature affecting the second bill, I propose to make a declaration that they are bills under the Act.”

Kiefel J then held that the second bill should be delivered again because it had not been signed by the solicitor and that the third and fourth bills should be referred for taxation because they had been paid on the condition that they be taxed.

This case confirms that a ‘narrative’ or significant detail’ is not necessarily required at all, as long as the charges are set out separately and the service itself needs to be specified.

R G Kilner & Black, Re Costs Act 1867 [1995] QSC 307 [1997]1 Qd.R. 188 White J QSC95-307

The Facts

The firm acted for the client in the Planning & Environment Court as well as a private prosecution in the Magistrates Court followed by an appeal in the District Court and later sued for outstanding fees. The firm obtained judgment in the Magistrates Court for $3,871.76, the full amount claimed. One of the bills contained a general description of the professional fees and outlays, accompanied by timesheets setting out the work in more detail. The client sought orders that the firm “deliver signed, itemised bills of costs in taxable form” for work done by them on his behalf and that an enquiry be carried out to determine whether the costs relating to the Magistrates Court prosecution were “thrown away by the negligence, deceit or failure of duty of care of the said solicitors justifying disallowance of such costs”. Alternatively, the client sought that any bills found to have been delivered incompliance with the requirements of s. 22 of the Costs Act be referred for taxation.

The Decision

After some discussion of the relevant case law including Re Walsh Halligan Douglas’ Bill of Costs [1990] 1 Qd R 288 and Malleson Stewart Stawell and Nankivell v Williams (1930) VLR 410, White J held that the original memorandum of fees sent under cover of letter dated 17 October 1991 dealing with the Magistrates Court prosecution and that of 16 April 1992 dealing with the taxation of Peter Channell & Associates’ costs are not bills within the meaning of the Costs Act, however the documents dated 13 & 15 October 1992 were. It was found that the firm should not have been able to obtain judgment in the Magistrates Court because no bill that complied with section 22 of the Costs Act had been delivered, and “There is good reason to stay execution on the judgment obtained in the Magistrates Court”. White J opined that the account of 1 December 1992 should be taxed. The firm was ordered to subscribe the memoranda of accounts dated 1 December 1992 and 6 January 1993.

Re Rose and Jensen [1998] QSC 99

The Facts

The client sought orders that the firm deliver bills of costs in taxable form in relation to all work charged to the applicant in their memoranda of fees dated 27 September 1994 and 23 February 1996 and that those bills then be taxed. The firm had delivered a 15-page bill which listed each item, and the date assigned to each item, but with no charge assigned to each. It was found this was not a bill in taxable form. Although the client had been charged $43,000 for the work, Ryan Cost Consultant had assessed the amount allowable at $28,424.50. The firm opposed the orders sought by the client, pointing to prejudice.

The Decision

Shepherdson J ordered that the firm deliver bills of costs for taxation due to the disparity between the amount charged and Ryan Cost Consultant’s assessment.

Von Risefer v Smith [2000] QDC 32 (10 March 2000)

The Facts

The firm had acted for the client in litigation. The firm then sued for three unpaid bills of costs, and obtained summary judgment against the client in the Magistrates Court. The client appealed on the basis that the bills were not bills in taxable form as required by s.5 of the Legal Practitioners Act 1995.

The Decision

It was held that although the bills were not bills in taxable form, they were sufficient for the purposes of s.5 of the Legal Practitioners Act 1995, as they gave the client sufficient information to enable her to determine whether or not to request taxation. The appeal was therefore dismissed with costs.

Jackson & Anor v. Creswick Middleton Solicitors [2000] QDC 46 (18 May 2000)

The Facts

On 20 July 1999 the firm commenced a proceeding in the Magistrates Court at Brisbane claiming from the clients $1,094.40 for professional work done and disbursements incurred by it pursuant to an invoice dated 25 June 1999. The invoice listed particular tasks for which a charge was made at a particular rate, and specified the number of such tasks performed. For example, the first item under the heading “Correspondence” was “short letters not exceeding one folio (72 words in length), 5 @ $14.50”. The documents perused were not specified, nor what faxes were sent or received. A covering letter spoke about the purpose of an attendance on the clients.

The clients alleged the Court lacked jurisdiction because one month had not elapsed since the bill was issued, and the Magistrates Court granted leave nunc pro tunc. The clients appealed.

The Decision

McGill DCJ held that leave to commence proceedings can be granted nunc pro tunc. McGill DCJ also held that the Civil Justice Reform Act 1998 contemplates that some detail would be provided as to the basis upon which charges were being made, so as to enable the client to identify objectionable items, and to formulate meaningful grounds for objection, on the basis of the contents of the account. McGill DCJ held the bill was not sufficient because there was no means by which the appropriateness of that work to the instructions given and the nature of the objective sought to be achieved by the efforts of the solicitors could be assessed, because the purpose of the various steps taken was not revealed. As the firm did not comply with s.48J(1) the appeal was allowed and the judgment set aside.

Importance of this case: This case confirms that further information not contained in a bill can be provided if required on a costs assessment. However, the purpose of the work performed must be apparent on the face on the bill, or in combination with a covering letter.

Queensland Mushrooms Pty Ltd & Ors v Hawthorn Cuppaidge and Badgery [2002] QSC 76

The Facts

The clients sought orders for the delivery of their files pursuant to the inherent jurisdiction of the Supreme Court. The firm was requested by the clients’ new solicitors to remit “copies of any unpaid invoices and a comprehensive general and trust account statement with respect to” the firm’s representation of the clients. The firm delivered invoices for outstanding costs and asserted a lien over the files for unpaid costs. The clients asserted the lien did not apply because of alleged negligence and the firm allowing a conflict of interest. However, because these claims were disputed, they could not be relied on. The clients also alleged their request for invoices was one for bills of costs under the Queensland Law Society Act 1952, however this was held not to be the case given the client’s history of being billed by the firm by lump sum bills.

The Decision

White J held that a clear request from the clients was required and that none was provided. The Application was hence dismissed.

Importance of this case: This case highlights the need for a client to provide a clear request for an itemised bill/bill of costs.

Thomson Hannan v McDonald & Doolan [2002] QDC 258

The Facts

The firm sued for outstanding fees and the clients claimed that by doing so the firm had contravened s 48J(1) of the Queensland Law Society Act 1952. The firm contended that their initial noncompliance had been remedied by a later bill delivered by it.

The Decision

After a long general discussion of prohibitions and bars to suing, McGill DCJ held that a proceeding brought contrary to s 48J(1) was not a nullity but the firm could not have a good cause of action until one month after it had been complied with, and that leave could be granted nunc pro tunc. The clients’ application to strike out an amended statement of claim filed by the plaintiff firm on 21 August 2002 was dismissed, but the firm was ordered to pay their costs of the part of the proceeding that contravened s 48J(1).

Atlantic 3-Financial (Aust) & Anor v Marler & Anor [2004] 1 Qd R 579

The Facts

Appeal by members of a firm against a decision of the Supreme Court to deliver the firm’s files to the client, and in effect forfeit their lien of the files. The appeal was based on a challenge to the validity of the client’s request, a point not raised at first instance but which the Court entertained because the point had not received previous judicial consideration.

The firm acted for the client over a five year period (1996-2001) until the client terminated the retainer and made the following request to the firm:

“TAKE NOTICE that we request you to render to us within 30 days bills of costs concerning all work undertaken by you for us since January 1996.”

Rule 84 of the Queensland Law Society Rules 1987 provided that a firm had to provide an itemised bill of costs on request within a reasonable time, and if failing to do so within one month the firm would have to provide the client with all documents and moneys held on the client’s behalf, notwithstanding any lien. Section 48J of the Act provided that such bills are in accordance with a costs agreement entered into between the client and the firm, or that the bill “clearly sets out all items of work done for the client and the amount charged (whether by way of fees or costs) for each item”.

The Decision

The Court of Appeal held that the purpose of Rule 84 was for a client to be made aware of his or her financial obligations to a practitioner, and that payment of the bill waives that right. The Court of Appeal also held that there is a requirement for requests for bills of costs to substantially comply with the wording of Rule 84 and identify the substance of the matter which is the subject of the retainer because of the significant consequences which flow from non-compliance with the request, and the practitioner should not be left to speculate as to the true focus of the request. The Court of Appeal held that because the request was in general terms and impermissibly included old accounts which had already been paid, the request was not a proper request.

Evidence as to the client’s solvency was also admitted. Appeal allowed.

Importance of this case: This case highlights the need for requests to be sufficiently detailed and coherent in order for them to be proper, and for a party to be later allowed to rely on it.

Clayton Utz Lawyers v P & W Enterprises Pty Ltd 2011 QDC 5

The Facts

Application by client for delivery of itemised bills. The firm was the Plaintiff in an action for recovery of its costs and had sought an order for the assessment of its costs. A disagreement arose between the parties as to whether more detailed bills provided by the firm were itemised bills.

The Decision

Referring to Ralph Hume Garry (a firm) v Gwillim, Re Walsh Halligan Douglas’ Bill of Costs [1990] 1 Qd R 288 and Malleson Stewart Stawell and Nankivell v Williams (1930) VLR 410, Judge Reid held that the question is whether the client has sufficient information to obtain advice about desirability of taxation, however exactness of form is not required and that the client must show that further information which they require but do not have has been withheld.

Reid DCJ held that the bills in question were not itemised bills because of vague generalised descriptions given for items of several hours in quantity which were of little assistance, and that the client’s lawyers would not be able to advise the client on the reasonableness of the time charged for the work due to insufficient information. Delivery of itemised bills was ordered and firm’s application for a costs assessment dismissed.

Importance of this case: This case confirms the relevance of English authorities on the question of the adequacy of bills, as well as the principle that the fundamental question is whether the bill contains sufficient information for the client to obtain advice about taxation. In this case, generalised descriptions for large blocks of time charges were held to be insufficient.

Tabtill No 2 Pty Ltd & Ors v DLA Phillips Fox (a firm) & Anor [2012] QSC 115

The Facts

The client sought the delivery of itemised bills and costs assessments of numerous bills provided by the respondent firms for various matters.

The Decision

Applegarth J held that many of the bills were out of time due to “a natural break” at the conclusion of a trial. Therefore, the client had no right to request itemised bills and no costs assessments were to be ordered for those bills.

In respect of the remaining re-issued bills, Applegarth J held that the few examples of allegedly inadequate details of the work performed were not numerous enough to show that they are not itemised bills or that itemised bills should be ordered. No affidavit evidence of a lack of information to advise on taxation or how much information the solicitor acting for client previously who had carriage of their matter with the firm was able to provide. Held that for these reasons, itemised bills should not be ordered.

Applegarth J also held that that discretion of a Court in ordering itemised bills should be in accordance with r5 UCPR, and emphasised the need to avoid a technical ambush by a client. Applegarth J found that client was seeking an advantage over firm by insisting on delivery of itemised bills. Therefore, no order for itemised bills and bills not out of time submitted for assessment.

Importance points to note in this case: Paragraph 77 outlines the Factors relevant to the exercise of discretion in whether to order a costs assessment. Paragraphs 80-83 outline the principles relating to whether a bill is an itemised bill. Paragraph 85 outlines the client’s onus of establishing they have not been provided with an itemised bill. The preparedness of a firm to provide further information is a relevant consideration in the court’s discretion of whether to order the firm provide itemised bills. Numerous discussions and meetings with client evidence that client did follow the proceedings closely. Paragraphs 90 & 93 indicate that a lack of affidavit evidence of insufficient information to advise on taxation is significant.

Pott v Clayton Utz [2012] QSC 167

The Facts

The firm sought taxation of its own bills, and the client sought the delivery of itemised bills in respect of eight of the bills. Client had confirmed that her queries with respect to four of the invoices had been met, and she held a meeting with the firm in respect of the other four bills.

The Decision

Boddice J held that a client asserting the information they have with respect to a bill is inadequate for them to seek advice concerning taxation must provide specific details of their concerns rather than just swear to general concerns of overcharging in order to satisfy the onus on them. The client had failed to do so, and therefore the bills were referred for assessment.

Importance of this case: This case highlights the need for a client to show that the information they have is incomplete if they allege that is the case. The onus is on them, and can only be satisfied by descending to particulars. Otherwise, there will be no entitlement to an itemised bill and the bill will be considered an itemised bill if it appears to be so.

Legal Services Commissioner v King [2013] QCAT 260 (2 July 2013)

The Facts

The Commissioner filed 7 charges against the solicitor. Charged 5 was dismissed by consent, and the remaining charges that were found to be proven alleged the solicitor had breached an undertaking, unlawfully drawn on trust monies, failed to comply with a written notice issued by the Commissioner and failed to comply with provide itemised account. Charges of making a false statement to the Queensland Law Society and failing to fulfil a representation to QLS were found to be not proven.

In relation to the charge of unlawfully drawing on trust monies, the solicitor’s defence relied in an invoice allegedly issued in August 2007. The invoice was as follows:

RE: MATRIMONIAL MATTERS

TO OUR PROFESSIONAL COSTS of and incidental to acting on your behalf in this matter and any and all other sundry matters not herein mentioned, and general care and consideration in your case. This invoice can be itemised if required.

The Decision

Fryberg J found that this invoice was not sent to the client, but even if it had, it was not a lump sum bill because it failed to describe the services to which it related. As a result, it was not a “bill” within the meaning of section 58(4)(a) of the Legal Profession Regulation which would have made the withdrawal of trust monies lawful. The solicitor was struck off.

Murdock v Sterling Law (Qld) Pty Ltd [2019] QDC 226

The Facts

The client had become uncontactable to the firm, so the firm terminated the retainer and issued a bill for its work over the previous 20 months. The bill generally contained very short descriptions for each item of work, but specified the date, the person who performed the work and the time each took. The firm then sued for the unpaid bill and obtained summary judgment against the client in the Magistrates Court for the entire bill.

The client then appealed, primarily on the basis that the bill was a lump sum bill because brief descriptions for numerous items in the bill such as “attendance with you” and “telephone attendance with you” rendered the bill insufficient to be an itemised bill. Because the client had purportedly requested an itemised bill, and the firm had subsequently failed to provide a more detailed bill, it was contended that the firm was not entitled to sue in the first place because it had contravened subsection 332(5) of the Legal Profession Act 2007 and judgment should not have been granted against her.

The Decision

Judge Porter QC held that although there had been a proper request for an itemised bill, the firm was not prohibited from suing because the bill specifically identified all the work performed and the names of other persons involved, most of the unparticularised attendances involved relatively short periods of time, and that the client would have been expected to know much about the work performed for her, given that it was a matter which concerned her personal affairs and which she was closely involved in. Significantly, the client had failed to adduce any evidence of the extent of her own knowledge, so there was no evidence that she did not have sufficient knowledge to provide to her advisors. Consequently, the bill was an itemised bill. The appeal was dismissed with costs.

Importance of this case: this case shows that concise descriptions per item can suffice, particularly if they are specific and the client was intimately involved in the matter, and therefore can be presumed to recall enough about the charges.

CONCLUSION

The issue of whether a bill provided by a law practice is sufficient is important in a few ways. First, an inadequate bill may affect a law practice’s right to recover its fees. In Queensland, a lump sum bill must at the very least provide some description of the legal services provided as well as comply with the requirements of section 330 and 331 of the Legal Profession Act 2007. Second, if a proper request for an itemised bill is made within 30 days of receipt of the lump sum bill, the law practice may not sue until 30 days after providing an itemised bill. However, if an itemised bill has been provided at first instance, there is no requirement to deliver a further bill. Third, if a lump sum bill is provided, the client may then request or seek an order for the delivery of an itemised bill (before or after proceedings are commenced), so that they may then receive advice about whether to pay the bill, settle the claim for fees or apply for a costs assessment. Fourth, a lump sum bill can in some circumstances be withdrawn, and an itemised bill provided for a higher amount. For these reasons, much can turn on whether a bill is sufficient, as the lengthy case law outlined in this article demonstrates.

As can be shown, the case law in England, Victoria, NSW and Queensland has been consistent for a very long time that a bill of costs/itemised bill needs to contain sufficient information in order for the client to be able to obtain advice about the desirability of applying for a costs assessment. Hence a bill in a lump sum format, even if it provides a long and detailed narrative of the services performed, will often be held insufficient, as the cases of Malleson Stewart Stawell and Nankivell v. Williams, In Re a taxation of costs and Currie v Robinson (supra) demonstrate. Furthermore, bills in an itemised format with very brief or generalised descriptions for each item listed may also be vulnerable to challenge, as the cases of Henchman v Hannes, McGrath v Roe and Gorczynski v Beilby (supra) show. On the other hand, brief descriptions may suffice if they are sufficiently specific, particularly if the client may be expected to know more than what is stated in the bill itself: see Henchman v Hannes, Re Bailey’s Bill of Costs, Piper Alderman v Smoel and Murdock v Sterling Law (supra). And as the case of Ralph Hume Garry v Gwillim (supra) indicates, in some cases it may not be necessary for a bill to say much at all if the client’s knowledge of the services performed is substantial. The level of detail required in a bill varies from case to case, and can depend on the knowledge, personal involvement and/or sophistication of the client.

As the history of the law demonstrates, often clients will object to the sufficiency of a bill for the sole or primary purpose of defeating or significant delaying a just claim for unpaid fees. As a result, the Courts have since Keene v Ward (supra) held that an exactness of form is not required, and since Cook v Gillard (supra) have not merely considered the contents of the bill itself. Any lack of information or detail contained in a bill can be remedied by accompanying or other documents, subsequent meetings/communications with the client/third party payer or additional information which is or would presumably be within the client’s own knowledge.

Notably, it is ordinarily the client who bears the onus of proving that a bill is insufficient, because normally they would have some knowledge or familiarity with their own matter, and they are the only person who could provide evidence as to the state or extent of their knowledge of the work performed for them. As the case of Pott v Clayon Utz (supra) demonstrates, it is not acceptable for a client to merely depose to a concern that they may have been overcharged: the client must descend into particulars, identifying what information they require but do not have in order to obtain advice about their prospects of sufficiently reducing the amount owed if they get the costs assessed. Such steps are required in order to show on the balance of probabilities that the client genuinely requires further information in order to get advice about the fees and charges, and is not simply raising a technical point in order to avoid or delay paying fees that are legitimately owed. The bill need not set out full details of the work performed, so long as overall the client has sufficient information to obtain advice about their likely success in reducing the bill on an assessment. In this way, the Courts have struck a common sense balance between the right of the client to know enough about what they have been charged for, and the right of lawyers to recover their fees without becoming victims of technical ambushes by opportunistic clients motivated by a desire to not pay fees owed.

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3 thoughts on “The law of lawyers bills in Queensland”

  1. Thanks Sterling Law for this long article! It certainly highlights the great contribution made by Queenslanders to the law of costs: I think of John Britton the former Legal Services Commissioner and his team, Roger Quick, the author of ‘Quick on Costs’ and the District Court and Supreme Court judges who have contributed by thoughtful and reported reasons for decision.

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