Johnson, Marija --- "Notes on legal costs" [1997] LawIJV 48; (1997) 71(2) The Law Institute Journal 52

• Notes on legal costs
• Costs ruling - lease

Notes on legal costs

Costs ruling - lease

Solicitors requested the Costs Policy Committee to rule in relation to costs claimed for preparation of a lease.

By clause 1(y) in the lease, the lessee agreed: "To pay to the Lessor the costs charges and expenses including the Lessor's Solicitor's costs of and inci¬dental to the preparation completion execution and stamping of this Lease and counterpart and all stamp duty payable thereon ... ".

The Committee ruled as follows.

The following items of work are not included in the preparation, completion, execution and stamping of the lease and counterpart:

• negotiations of tenancy terms;
• retail tenancies disclosure statement; guarantee;
• solicitor's certificate of identity; notice to tenant of final option date; certificate of title search; and
• credit search of tenant.

If the lessor wishes to pass on the costs of the above work, it should be expressly stated in the lease or otherwise agreed to. There was no such express clause in the lease.

The appropriate ad valorem charge in the Third Schedule of the Solicitors' Remuneration Order should be made for preparation, completion, execution and stamping of the lease and counter-part. Column B is charged if there is no material amendment to the lease sub¬mitted. Column A is charged if the lease is amended and the amendment is a material alteration. The amendment en-visaged is in the settling of the wording of the lease and not amendments which result from the parties negotiating terms of the tenancy. The Committee did not have sufficient information to rule on the appropriate charge to be made in this matter.

FID and BADT on trust money re¬ceived and paid on behalf of the lessor are appropriate disbursements.

There may also be passed on under clause 1(y) items of work which are associated with the preparation etc. of the lease and which are not usual and necessary in normal circumstances but are usual and necessary in the circumstances of this particular transaction. See clause 5(4)(a) of the General Order of the Solicitors' Remuneration Order. The following items were claimed by the lessor:

• company search. As the lessee is a company it is usual and necessary to undertake a company search. The professional fee in the First Schedule is charged, plus the disbursement.
• delivery of documents by facsimile and courier. Delivery by post would be usual and necessary in normal cir¬cumstances but delivery by facsimile or courier may be usual and necessary in particular circumstances, e.g. at the request of the lessee. The Commit-tee did not have sufficient informat¬ion to rule whether delivery by facsimile and courier was necessary in the circumstances of this matter.

Please direct inquiries to Marija

Johnson, LIV Costing Service on (03)

9607 9405 between 2-5pm, Monday to

Friday. General information about

costing is given during the above hours

as a free service to members. 

MARIJA JOHNSON

Manager, LIV Costing Service