Firm secures legal bill after client ignores advice

The District Court heard that the firm and counsel sought leave to withdraw from the client’s case midway through the Supreme Court hearing because there was a “clear conflict in terms of the advice being given and the instructions being provided”.

In submissions to the Supreme Court, counsel said there was a “clear lack of confidence in not only myself but my instructing solicitor’s ability to appear and act on her behalf in prosecuting her claim”.

In October 2021, Birchgrove Legal issued a memorandum of costs and disbursements in the sum of $58,317.09, including GST.

The following March, a further memorandum of costs and disbursements for a further $30,552.36 was issued, including GST.

When neither payment was made, Birchgrove Legal made an application to a costs assessor, who rejected the client’s argument that the costs agreement was for a lump sum.

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The costs assessor also found Birchgrove Legal failed, on an ongoing basis after a settlement conference, to disclose the changing estimate of legal costs, and the costs agreement was found to be void.

Nevertheless, professional fees of $56,106, plus GST and disbursements of $3,032.44 were allowed, as well as a filing fee of just over $880.

The client attempted to review this decision but was dismissed.

On appeal before the District Court, the client did not dispute the quantum of costs, but sought a determination that Birchgrove Legal had no entitlement to claim costs from her at all.

The first ground alleged that the costs agreement was “non-existent”, although it was found to be void under the Uniform Law.

The review panel undertook an analysis of the terms of the costs agreement and disclosure statement and concluded that, if Birchgrove Legal had reasonably terminated the costs agreement, which dealt with termination, then it was entitled to be paid its costs.

The District Court was also of the view the costs agreement was not an entire contract, finding it was clear from its terms that it “was not intended that an entitlement in Birchgrove Legal to payment of its fees was to arise only if it continued to act until the proceedings were completed, or a judgment was obtained”.

The review panel was found to not have erred in this finding.

The client’s second ground, which alleged the firm was not entitled to terminate its costs agreement when it withdrew, was also rejected.

The case: Paul v Birchgrove Legal Pty Ltd trading as Birchgrove Legal ABN 83161158532 [2025] NSWDC 175