The court was told McCullough Robertson assisted Progressive Partners in November 2019 and again in September 2021 for a matter concerning the Australian Taxation Office.

After receiving the invoice, the client responded by insisting there was a “huge/massive difference” from what was originally quoted.

The client asked for MRL to look through the invoices to understand the “revised scope of invoices”, but this did not occur.

Instead, the statutory demand was issued.

In response, Progressive Partners filed an application for an assessment of costs and for the demand to be set aside.

It took 39 days for the demand to be withdrawn.

Justice Glenn Martin said it “should have been immediately obvious” to McCullough Robertson it could not proceed with the demand when an application for a costs assessment had been made.

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The firm said it was reasonable to issue the demand given the client was indebted for some time and a December 2023 request for an itemised bill was “the first time the applicant formally raised the issue”.

Justice Martin disputed this, finding instead Progressive Partners “had been complaining and seeking more details” from July 2022.

Considering the length of time it took for McCullough Robertson to withdraw the demand and its knowledge the client was disputing the fees, Justice Martin ordered the firm to pay costs on a standard basis.

“It should have realised it had no choice but to withdraw,” Justice Martin said.

“That consideration is particularly important given that McCullough Robertson did not need, as a lay client would, time to seek advice.

“Further, the delay in withdrawing was inordinate. A timely withdrawal would have obviated the need to incur costs on the application. No reason was given for the delay.”