Cameron v Dennis

[2006] NSWDC 32

Reported Decision: Appeal dismissed [2007] NSWCA 228

District Court

CITATION:	Cameron v Dennis [2006] NSWDC 32 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	20 September 2006
JUDGMENT DATE:	26 September 2006
JUDGMENT OF:	Johnstone DCJ at 1
DECISION:	Judgment for the plaintiff; Defendant to pay plaintiff's costs on the ordinary basis
CATCHWORDS:	LEGAL PROFESSION ACT 1987 - Barrister's invoices (bills) - Liability of solicitor - Legal Profession Act not applicable as the proceedings not for the recovery of costs, but brought to enforce a subsequent deferral arrangement - Whether the bills complied with the Act: signature and other particulars required by Clause 22A of the Legal Profession Regulation 1994 - Particulars not required if solicitor already aware of relevant matters
LEGISLATION CITED:	Legal Profession Act 1987: s 192(1) and s 194(1) Legal Profession Regulation1994: Clause 22A
CASES CITED:	Hogarth v Gye [2002] NSWSC 32 at [25]. Koutsourais v Metledge & Associates [2004] NSWCA 313
PARTIES:	Robert William Cameron (Plaintiff) Bruce Vernon Dennis (Defendant)
FILE NUMBER(S):	5480/2005
COUNSEL:	Mr D F Rofe QC (Plaintiff) Mr J Johnson (Defendant)
SOLICITORS:	McLaughlin & Riordan (Plaintiff) Dennis & Co (Defendant)

JUDGMENT

HIS HONOUR

Introduction

1. Mr Cameron was a barrister who was regularly briefed by Mr Dennis, a solicitor, on behalf of clients of Mr Dennis.

2. In August 1997 Mr Dennis briefed Mr Cameron to advise and appear for clients in respect of proceedings in the Federal Court, which included an appeal, from 1997 to 2000. Mr Cameron rendered several invoices for his fees to Mr Dennis, totalling $79,158.95.

3. Early in 2001, after completion of the litigation, Mr Dennis asked Mr Cameron to agree to defer payment of his fees for a period of a year or more to allow a subdivision and sale of property by the clients of land at Menangle Park, on the basis that Mr Cameron’s fees were to be paid out of the proceeds, with interest, and secured by a mortgage. Mr Cameron agreed.

4. Although the land at Menangle Park was subsequently subdivided and sold, Mr Cameron has not been paid. He claims payment, pursuant to that agreement, of $79,158.95 plus interest from the date of sale.

5. Mr Dennis disputes any liability to Mr Cameron.

6. Mr Dennis says first that Mr Cameron agreed, at the time he was retained in 1997, to defer his fees until Mr Dennis received payment from the clients. Mr Dennis has never received payment from the clients.

7. Secondly, Mr Dennis says that Mr Cameron’s claim is for the recovery of costs and not maintainable because his invoices did not comply with the Legal Profession Act 1987: s 192(1).

8. Mr Cameron says, in response, that his claim is not for the recovery of costs, based on the invoices, but for the amount agreed under the 2001 agreement.

9. Mr Cameron says, alternatively, that his invoices did comply with the Legal Profession Act 1987.

10. The first issue for determination is whether or not Mr Cameron’s claim is for the recovery of costs, because if not, the defences fail.

11. If, however, the claim is for the recovery of costs, the issues for determination are:

1. Did Mr Cameron agree to defer his fees when briefed in 1997.

2. Did his invoices comply with the Legal Profession Act 1987,namely:

(a) the requirement that they be signed: s 194; and

(b) the requirements of Cl 22A of the Legal Profession Regulation.

Are these proceedings for the recovery of costs?

12. It was submitted on behalf of Mr Dennis that these proceedings are for the recovery of costs by a barrister, and because the invoices relied upon do not constitute bills which comply with the Legal Profession Act 1987,the proceedings are not maintainable: s 192(1).

13. Mr Dennis relies on a decision of the Court of Appeal in Koutsourais v Metledge & Associates [2004] NSWCA 313. He argues that the 2001 agreement with Mr Cameron was a deferral arrangement in respect of a barrister’s costs for providing legal services. There has been no change by reason of the 2001 agreement: the amount claimed is still the precise amount, and the person identified as liable is still the same person. In substance, it remains the recovery of costs that is being sought in these proceedings: Koutsourais v Metledge at [9].

14. Hodgson JA delivered the majority judgment in Koutsourais v Metledge. He acknowledged a distinction between proceedings for recovery of costs, on the one hand, and proceedings ultimately based on a lawyer’s entitlement to costs, on the other hand: at [11]. The question of the sufficiency of the connection between the legal costs and the proceedings is often a ‘difficult question of degree’: at [4]. In that case, in his view, notwithstanding a new arrangement for payment by instalments, in substance it was still the recovery of costs that was being sought. He gave two reasons. First, the amount to be paid was still the precise amount claimed for the costs. Second, the entity identified as liable was previously liable for the costs: at [9].

15. Bryson JA, however, came to a different view on the facts. He considered that the new arrangement in that case lost the character of an obligation to pay costs for providing legal professional services. A new array of obligations, considerations, advantages and burdens came into existence in substitution for the previous claims for costs, which were so extensive that the proceedings for recovery did not have the character such that they could only be maintained if a bill had been given: at [52].

16. Hodgson JA went on to identify factors which he considered would tend to change the character of the proceedings from being proceedings for the recovery of costs: at [11].

17. Beazley JA agreed with Hodgson JA but only as to the orders proposed and the reasons for those orders. She expressly refrained from expressing an opinion as to when proceedings might not be proceedings for recovery of costs: at [1].

18. The question for me to determine in the current matter is whether the 2001 agreement changed the character of the proceedings from being proceedings for the recovery of costs to proceedings sufficiently removed from being for the recovery of costs, albeit ultimately based on a lawyer’s entitlement to costs.

19. In my view, Mr Cameron’s claim is not for the recovery of costs. His claim is for breach of contract, namely the 2001 agreement.

20. These proceedings have a different character from proceedings for the recovery of costs. There were various factors that remove the claim from being one for the recovery of costs.

21. The first factor was interest. Mr Cameron made no claim for interest on his fees. Part of the basis for agreeing to defer payment for a year or more was the promise by Mr Dennis to pay interest.

22. The second factor was the deferral. The period was indeterminate, but it was said to be up to a year or more. Part of the arrangement was the representation by Mr Dennis that he had a mortgage that he could register, which would protect Mr Dennis in respect of the fees owed to him by the clients.

23. Implicit in the arrangement was an acknowledgement by Mr Dennis of the entitlement of Mr Cameron to the fees. There was no question of compromise because there was no dispute as to Mr Cameron’s entitlement.

24. I find, therefore, that these are not proceedings for the recovery of costs. Rather they are proceedings for the recovery of the payment promised to Mr Cameron by Mr Dennis in the 2001 agreement, payable out of the proceeds of a subdivision and sale of land at Menangle Park by the clients.

25. Mr Cameron is entitled to a verdict for $79,158.95, together with interest.

Other Issues

26. The finding I have made is determinative of the plaintiff’s claim. However I make the following findings, for the brief reasons that follow, against the event that I have erred in concluding that these proceedings are other than for the recovery of costs.

27. The first question is whether Mr Cameron agreed to defer his fees when briefed in 1997.

28. Mr Dennis alleged that Mr Cameron agreed, when briefed, to defer his fees until Mr Dennis received payment from the clients. No evidence was given as to any deferral arrangement. The only evidence on this issue came from Mr Cameron who denied any such arrangement.

29. It was submitted for Mr Dennis that I should disbelieve Mr Cameron and infer, for various reasons, that he did in fact agree to accept the brief on a deferral basis.

30. The only inference I draw is from the failure by Mr Dennis to give evidence at all.

31. I am not satisfied that Mr Cameron was briefed on the basis that his fees were to be deferred until Mr Dennis was paid by the clients.

32. The second question is whether the invoices were signed, as required by s 194(1) of the Legal Profession Act 1987.

33. The invoices annexed to the affidavit of Mr Cameron were not signed. The evidence established, however, that these were amended replacement invoices, which had been sent to Mr Dennis accompanied by letters signed by Mr Cameron. In my view that was sufficient compliance with s 194(1) of the Legal Profession Act 1987.

34. The third question was whether the invoices complied with Clause 22A of the Legal Profession Regulation1994. Mr Dennis relied upon Clause 22A(1) (g) and (h), which require the following particulars to be included in a bill of costs:

(g) The basis on which the costs have been calculated and charged (whether on a lump sum basis, an hourly basis, an item of work basis, a part of proceedings basis, or other basis).
(h) The facts relied on to justify the costs charged by reference to the above, the practitioner’s skill, labour and responsibility, the complexity novelty or difficulty of the matter, the quality of the work done or of any other relevant matter.

35. In my view sub-clause (g) was satisfied. The basis of the charges in the invoices was clearly an hourly rate basis.

36. In my view sub-clause (h) was also satisfied. What sub-clause (h) requires is the facts that justify the costs charged ‘by reference to the above’ or the other matters set out. The ‘above’ is the matters in (a) to (g), all of which were included in the bills. That is sufficient compliance with sub-clause (h) if those facts justify the costs charged, which in my view they did. The other matters in sub-clause (h) need only be particularised if the costs need to be justified on some other basis, such as the practitioner’s skill, labour and responsibility, the complexity, novelty or difficulty of the matter, the quality of the work done or of any other relevant matter. Such additional justification was not required here.

37. Even if I had been of a different view, to the effect that the requirements of sub-clauses (g) and (h) had not been satisfied, I am of the view that the obligations in those sub-clauses do not require the particularisation of any information to a person who is aware of the matters supposedly to be particularised: Hogarth v Gye [2002] NSWSC 32 at [25]. Mr Dennis was such a person.

38. I am satisfied that the invoices did comply with the Legal Profession Act 1987.

39. I find , therefore, that even if these proceedings are for the recovery of costs, and covered by s 192(1) of the Legal Profession Act 1987, Mr Dennis is in any event liable to pay the invoices.

40. Mr Cameron is also entitled, on this basis, to a verdict for $79,158.95 together with interest.

Summary

41. Mr Cameron was not briefed on the basis that his fees were to be deferred until Mr Dennis was paid by the clients.

42. These are not proceedings for the recovery of costs, and s 192 of the Legal Profession Act 1987 does not apply.

43. In any event, the bills did comply with the Legal Profession Act 1987:

- they were sufficiently signed, as required by s 194(1); and
- they complied with sub-clauses (g) and (h) of Clause 22A(1) of the Legal Profession Regulation.
- furthermore, the obligations in those sub-clauses did not require the particularisation of any
information to Mr Dennis, because he was already aware of the matters supposedly to be
particularised: Hogarth v Gye [2002] NSWSC 32 at [25].

44. Mr Dennis is to pay to Mr Cameron the sum of $79,158.95 together with interest.

45. For these reasons I find for the plaintiff against the defendant.

46. I enter a verdict for the plaintiff for $79,158.95 together with interest of $20,866.88.

47. I enter judgment for the plaintiff in the sum of $100,025.83.

48. I order the defendant to pay the plaintiff’s costs on the ordinary basis.

49. I stay the judgment for 14 days, with liberty to apply.

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