QCA: Limitation period for an application for costs assessment runs from the date of delivery of a lump sum bill

In the matter of QLD Law Group – A New Direction Pty Ltd v Crisp [2018] QCA 245, the Queensland Court of Appeal held that the limitation period for an application for costs assessment by a client runs from the date of delivery of a lump sum bill of costs and not a later itemised bill.

Background and the proceeding below

The respondent, Ms Crisp, had been a plaintiff in a personal injuries proceeding, represented by the appellant in that proceeding.

After the conclusion of that proceeding, the appellant issued a lump sum bill to the respondent on 28 April 2015.

Almost 11 months later in March 2016, the respondent requested that the appellant provide an itemised bill pursuant to section 322 of the Legal Profession Act 2007 (Qld) (the LPA).

The itemised bill was provided by the appellant on 19 May 2016 and almost a year after that (i.e. almost 2 years after the initial lump sum bill was delivered in April 2015), the respondent applied to have the appellant’s costs assessed pursuant to section 335 of the LPA.

Section 335(5) of the LPA provides that a client may make a costs application within 12 months after

  • the bill was given, or the request for payment was made, to the client or third party payer; or
  • the costs were paid if neither a bill was given nor a request was made.

The central issue of contention was whether the 12-month period commenced from the delivery of the lump sum bill on 28 April 2015 (and therefore expired in April 2016) or from the delivery of the itemised bill on 19 May 2016 (and therefore not expiring until May 2017).

At first instance, the Magistrate applied the former interpretation and found that the respondent’s costs application had been made out of time.  The Magistrate also dismissed the respondent’s application to extend time to bring the costs application and accordingly, dismissed the costs application.

On appeal to the District Court of Queensland, Judge Kent QC preferred the latter interpretation and granted the appeal, overturning the decision of the Magistrate.

The appellant then applied to the Queensland Court of Appeal for leave to appeal the decision.

The appeal

Sofronoff P (with whom Morrison and Philippides JA agreed) analysed the wording of the relevant provisions in Part 3.4 of the LPA and noted that section 335 provided for the assessment of costs, not the assessment of a bill (or bills) of costs.  His Honour stated:

The statute does not make the delivery of an itemised bill, or indeed the delivery of any kind of bill, a condition precedent to the right to make a costs application. This is consistent with the absence of an idea that it is a bill that is to be assessed. Section 335 does not refer to an assessment of a bill but to “an assessment of the whole or any part of legal costs”. The legal costs may be those referred to in a lump sum bill or an itemised bill. But they may also be the legal costs that have been the subject of the “request” or the payment that are also referred to in s 335(5). It is not only the delivery of a bill that triggers the beginning of the limitation period; it is triggered by a solicitor’s request for payment or by a client’s payment of costs. It can therefore be concluded that there is nothing in s 335 that, for the purposes of an application for an assessment of legal costs, promotes the importance of an itemised bill over a lump sum bill or even that distinguishes between them. [1]

His Honour also noted that section 332 of the LPA distinguished between the effect of delivery of a lump sum bill and delivery of an itemised bill in respect of a law practice’s ability to commence legal proceedings to recover legal costs[2], stating further that:

These express provisions that distinguish between the legal effects of the delivery of one kind of bill from the legal effects of the delivery of another kind of bill suggest strongly that the absence of any similar distinction in s 335 means that, for the purposes of s 335(5), there is no distinction.[3]

As a result, his Honour determined that the 12-month period within which a client may apply for costs assessment under section 335(5) of the LPA commenced from the delivery of a lump sum bill and did not restart upon the provision of a later itemised bill at the request of a client.

Accordingly, the application for leave to appeal was granted and the appeal was allowed[4].  The proceeding was remitted back to the District Court for the respondent’s appeal against the decision of the Magistrate to refuse to extend the time within which the application for costs assessment could be brought to be determined (determination of this issue was not previously required given that Judge Kent QC had found that the application for costs assessment was made within time).

Conclusion

The decision is of interest to practitioners because it clarifies just when the 12-month limitation period for an application for costs assessment by a client commences and confirms that the later delivery of an itemised bill after the delivery of an initial lump-sum bill does not restart the limitation period afresh.

The decision also has application near nationwide given that the terms of section 335 of the LPA have similar counterparts in most other states, including in New South Wales and Victoria where similar wording to that contained in section 335(5) is to be found in section 198(3) of the Legal Profession Uniform Law, the successor in those jurisdictions to the legislation arising from the Legal Profession Model Bill formulated by the Standing Committee of Attorneys-General and implemented in most Australian states in the mid-2000s upon which the Queensland LPA is based.

 

Adrian Robins
Adrian Robins (Director)
About the Author

Adrian Robins is a Special Counsel at James Conomos Lawyers, where he practices in the areas of commercial litigation, insolvency, bankruptcy and legal costs disputes. Adrian is committed to achieving positive outcomes for his clients and is celebrated for his prompt and practical legal advice.

If you or your business needs assistance navigating a complex legal dispute, please call us on 1800 JCL LAW to speak with one of our friendly staff.

 

[1] QLD Law Group – A New Direction Pty Ltd v Crisp [2018] QCA 245 (QLD Law Group v Crisp) at [17].

[2] QLD Law Group v Crisp at [19].

[3] QLD Law Group v Crisp at [20].

[4] QLD Law Group v Crisp at [32].