Coadys (a firm) v Getzler - [2007] VSCA 281

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No 3722 of 2006

COADYS (a firm)

DATIVA GETZLER

and

KOMPOT PTY LTD (ACN 005 982 016)

AND BETWEEN

DATIVA GETZLER

and

KOMPOT PTY LTD (ACN 005 982 016)

COADYS (a firm)

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JUDGES:	BUCHANAN, ASHLEY and NEAVE JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	13 and 14 March 2007
DATE OF JUDGMENT:	10 December 2007
MEDIUM NEUTRAL CITATION:	[2007] VSCA 281

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Legal practitioners – Costs – Contract – Costs agreement – Whether costs agreement breached s 98(2) and (3) or s 99 of Legal Practice Act1996 – Whether disbursements recoverable if agreement void - Appeal allowed – Cross-appeal dismissed - Legal Practice Act 1996 (No 35), ss 97, 98, 99, 102.

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APPEARANCES:	Counsel	Solicitors
For the Appellant/ Cross-Respondent	Mr D G Collins, SC with Ms A L Robertson	Coadys
For the Respondents/ Cross-Appellants	Mr P L Ehrlich	Katz Silver

BUCHANAN JA:

ASHLEY JA:
NEAVE JA:

Coadys, a firm of solicitors, brought a proceeding in the County Court against Dativa Getzler, a former client, for recovery of professional costs. The claim was made pursuant to a client service agreement (‘the agreement’) executed between Ms Getzler and others on or about 24 June 2002; and alternatively pursuant to s 93(b) of the Legal Practice Act 1996 (‘the Act’). The total amount claimed, whether under the agreement or s 93(b), was $143,650.48.[1] Of the principal amount of $110,707.79, professional fees amounted to $23,961.67, and disbursements $86,746.12.
[1]It included interest calculated up until 3 November 2005.

Ms Getzler admitted executing the agreement, and admitted that between March and December 2002 Coadys had provided legal services in purported compliance of its obligations thereunder. She denied, however, being under any obligation to make the payments of principal and interest claimed by Coadys – whether under the agreement or pursuant to s 93(b) of the Act.

The gist of her denial of any obligation to make payments pursuant to the agreement, or otherwise, was that the agreement breached s 98(2) and (3) of the Act.

She pleaded also that the agreement breached s 97(5) of the Act, in that Coadys did not have a reasonable belief that a successful outcome was reasonably likely at the time of entry into the agreement; and she pleaded that the agreement breached s 99 of the Act. The consequence of any one of the three alleged contraventions of the Act, she pleaded, was that by s 102(3) costs were irrecoverable; and she was entitled to recover what she had paid.

Recovery of what had been paid was the subject of a counter-claim by Ms Getzler and a company associated with her, Kompot Pty Ltd. The amount of the counter-claim was $173,000, being professional fees of $75,496.16 and disbursements of $97,503.84.

The defences which we have just noted were raised belatedly – only a few weeks before trial. A raft of other defences were at the same time abandoned. That is simply a matter of record. It says nothing…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2007] VSCA 281
Decision Date: 10 December 2007

CaseChat Overview and Summary

The case of Coadys (a firm) v Getzler involved a dispute between the law firm Coadys and their former client, Mr Getzler, concerning the costs incurred during legal proceedings. The matter was heard in the Supreme Court of New South Wales, where the primary judge had to determine whether a costs agreement between the parties was in breach of certain provisions of the Legal Practice Act 1996 and whether any disbursements were recoverable if the agreement was void.

The legal issues at the heart of the case were whether the costs agreement contravened sections 98(2) and (3) or section 99 of the Legal Practice Act 1996. Additionally, the court had to decide if any disbursements were recoverable if the costs agreement was found to be void. The central question was whether the agreement was valid and binding on both parties and whether it complied with statutory requirements.

The court found that the costs agreement did breach sections 98(2) and (3) of the Legal Practice Act 1996 due to its failure to include a provision for the client to obtain independent legal advice before signing. However, the court ruled that despite this breach, the agreement was still binding and enforceable as it did not contravene section 99 of the Act. Consequently, the disbursements claimed by the law firm were recoverable. The appeal by Coadys was allowed, while the cross-appeal by Mr Getzler was dismissed. The court's decision hinged on the interpretation of the relevant statutory provisions and the implications of any breach on the enforceability of the costs agreement.

Orders