Coadys (a firm) v Getzler
[2007] VSCA 281
•10 December 2007
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No 3722 of 2006
| COADYS (a firm) v DATIVA GETZLER and KOMPOT PTY LTD (ACN 005 982 016) |
| AND BETWEEN |
| DATIVA GETZLER and KOMPOT PTY LTD (ACN 005 982 016) v COADYS (a firm) |
---
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 | |
---
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.
---
| 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 about the merits or otherwise of the issues raised.
The matter was tried in November 2005 and the learned trial judge published reasons for decision in late January 2006. Judgment was not entered, pending argument as to the form of orders, and as to costs. Then reasons were delivered by Byrne J in Equuscorp Pty Ltd v Wilmoth Field and Warne.[2] They dealt with the operation of ss 97-99 and 102 of the Act. In the event, his Honour heard further argument, particularly directed to claims in respect of counsel’s fees in the context of s 102(3). That led on to him publishing further reasons on 29 March 2006.
[2][2006] VSC 28.
His Honour found that the agreement did contravene s 98(2) and (3), but not s 99. He concluded also that Coadys had not breached s 97(5). He held that Coadys was precluded from recovery of professional costs, but not from recovery of disbursements; and that the firm was liable to repay professional costs which Ms Getzler and Kompot had already paid it. In the event, he made an order in favour of Coadys for $86,746.12 for outstanding disbursements – mainly counsel’s fees; and he made an order on the counter-claim for repayment by Coadys to Ms Getzler and Kompot of professional fees amounting to $75,496.16, plus interest.
By this appeal, Coadys argue that the learned trial judge erred in finding that there was a breach of s 98(2) and (3) of the Act.
By cross appeal, Ms Getzler and Kompot contend that the judge erred –
· In failing to hold that the agreement, rather than merely clause 4 thereof, was void by operation of s 102(2).
· In holding that s 102(3) did not preclude recovery of counsel’s fees.
· In making an inappropriate costs order having regard to their Calderbank letter of offer dated 26 October 2006.
Pertinent circumstances
Although all but one of the issues raised on the appeal and cross appeal concern the proper construction of provisions of the Act, and their application to the agreement, we should very briefly refer to the background circumstances. In 1993 or thereabouts some persons in Australia entered into a kind of joint venture with other persons based in Poland. Ms Getzler was a party to the venture, although initially her involvement was through the medium of Kompot and a person named Rudzki. By 1998 the parties to the venture had fallen out. The Australian venturers, in the words of the learned trial judge, ‘apparently took the view that they had been duped in many respects by [the Polish venturers] and proffered serious allegations as to [one] person’s dealings with the venturers’ finances and assets.’ That same year, 1998, Coadys commenced a Supreme Court proceeding for damages on behalf of two of the Australian joint venturers. The Polish-based joint venturers were the main defendants in the proceeding. Ms Getzler, also, was originally a defendant. Later she became a plaintiff. She instructed Coadys to act on her behalf. That was in 2002.
The agreement central to the dispute was dated 24 June 2002. It seems that Ms Getzler or her partner - a lawyer - and the other plaintiffs had a part in drafting the agreement. Just what part was not investigated in the evidence. In any event, the agreement applied to the prosecution of the proceeding on and from 21 March 2002 and each of the three plaintiffs were responsible thereunder for one-third of the professional costs and disbursements incurred in conducting the proceeding.
The matter went to trial in November 2002. One of the Australian joint venturers gave evidence which reflected adversely upon him. It seems that the trial was interrupted, that a mediation ensued, and that the proceeding was settled for $100,000 inclusive of costs. The settlement, apparently entered into on the advice of senior counsel, was in an amount which was evidently much less than Ms Getzler had hoped for. It was thereafter that a dispute arose about costs.
The costs clauses
The principal clauses in the agreement touching costs were as follows:
3.Payment and Application of Money on Account of Professional Costs and Disbursements
3.1The firm will render to the clients interim bills of costs for professional fees, disbursements and other charges on a monthly or other regular basis during the performance of the client’s work. Each of the clients Glover, Branicki and Getzler must each pay one third of each interim bill in full within fourteen days of its receipt.
3.2If the bills of costs rendered to the clients by the firm remains unpaid (or partly unpaid) after 30 days of the date on which payment is demanded in each case, the firm may charge the client who has not made payment, interest on the amount outstanding and due from that client, from that time until payment in full at the rates set out in s.2 of the Penalty Interest Rates Act 1983 (currently 12.3% pa).
…
3.6The firm may request payments to be made to its trust account by the client on account of costs and disbursements to be incurred in performing the client’s legal work. The clients will each pay one third of all amounts reasonably requested within seven days of the request. …
3.7Subject to the following, each of Glover, Branicki and Getzler will pay to the firm, $33,500 on account of costs and disbursements. Glover agrees to make his payment on the signing of this agreement. Each of Branicki and Getzler agree to pay $10,000 on the signing of this Agreement and each pay $23,500 on or before 30 July 2002.
4.Basis of Charging
4.1Hourly Rate – The firm will record professional time in performing the client’s legal work on the basis of six minute units of time at the hourly rate of:
(a)Until 30 June 2002, Mr Coady $440, Mr Lambros $200, Articled Clerk $130, Other solicitor, $200, Admin Assistant $70.
(b)Next financial year, Mr Coady $480, Mr Lambros, $220, other solicitor $220, Articled Clerk $140, admin assistant $75.
4.2Whilst the firm will record time at the above mentioned rates, it will charge the client for the time expended by any qualified lawyer, or articled clerk, at the rate of $100 per hour, and for admin assistance at the rate of $50 per hour, for all work performed after 20 March 2002.
4.3If the proceedings the subject of the retainer, result in a recovery the amount of, or less than, all fees rendered pursuant to past Fee Retainers from time to time, and this new costs agreement, (inclusive of counsels fee and disbursements), no further fees will be sought by or will be payable to this Firm. The term “recovery” means the receipt of amounts whether by way of enforcement of judgment sums on the claim, or for costs, or by way of settlement before or during action.
4.4If the proceedings result in a recovery (as referred to in clause 4.3) of amounts in excess of all fees rendered pursuant to the Fees Retainers (as well as counsel fees and disbursements) the Firm shall be entitled to reassess its fees at the rates recordable from time to time during the retainer and earlier retainers. For clarity, those hourly rates are set out in the following table. The Firm also agrees that liability for payment at the increased rate extends only to the extent of funds recovered in the proceedings.
4.5It is acknowledged by the clients that the Firm does not need to make separate arrangement for the costs that might be applicable to differing claims of the parties. The Clients agree that they will share any outcome in a manner provided for in a costs Sharing Agreement executed on even date …
4.6It is agreed that the Firm be permitted to raise the fee rates referred to in paragraph 4.4, on the 1st day of July in each calendar year …
7.Payment of Disbursements
The clients hereby authorises (sic) the firm to act as their agent in incurring any disbursements in the course of performing the legal work.
10.Termination of Agreement
10.1This Agreement may be terminated by the Firm or any of the parties by reasonable written notice to the other. …
…
10.3Termination of the Agreement does not affect the right of the firm to payment of all amounts due to it in connection with the clients’ legal work, the firm’s lien, and any charge or security held by the firm in connection with that payment.
An explanatory letter dated 14 June 2002 was also provided to, and signed by, Ms Getzler. Relevantly, it added nothing to the retainer agreement – that is, the ‘client service agreement’.
Submissions
Counsel’s arguments concerning the meaning of ss 97-99 and 102 of the Act were very similar to the submissions advanced in Equuscorp Pty Ltd v Wilmoth Field & Warne (simply ‘Equuscorp’). We have summarised those arguments in our reasons for judgment in that matter,[3] and there is nothing to be gained by recapitulating them. We will refer only to submissions specific to this matter, and submissions otherwise additional to those advanced in Equuscorp.
[3][2007] VSCA 280. The two appeals were heard consecutively, and counsel in the present appeal were present during all or most of the argument in the Equuscorp matter, which was heard first.
Counsel for Coadys submitted that the case had been conducted below, correctly, on the footing that the agreement was relevantly a conditional costs agreement. Clause 4.2 set out the basis upon which Coadys’ professional fees would be charged out unless there was a successful outcome. Clause 4.3 specified the limit upon the fees which Coadys were able to charge if there was an unsuccessful outcome to the litigation; such an outcome being defined by reference to whether the amount recovered was no more than the amount of fees thus far rendered. Clause 4.4, the counterpart of clause 4.3, defined what was to be regarded as a successful outcome, and provided for the rate at which costs should then be assessed. The agreement, so analysed, made no provision for payment of a premium – which by s 98(1) was a premium on the amount of costs payable in the event of a successful outcome to the proceeding.
Concerning s 99(1), counsel for Coadys submitted that the provision was not intended to prohibit an agreement by which the amount payable might differ having regard to the amount recovered. If it was not so, a conditional costs agreement which specified recovery of a particular amount as the criterion for success would breach the sub section.
Concerning s 102, counsel for Coadys conceded difficulty in maintaining the position that the learned trial judge had been correct in concluding (assuming breach of a provision of Division 3 of Part 4 of the Act) that only the breaching clause, and not the entire agreement, was rendered void. But, counsel submitted, his Honour had nonetheless been correct in concluding that disbursements (including counsel’s fees) were recoverable.
In developing that submission, counsel said this:
32.It would be peculiar indeed to regard the amount payable by a client to a legal practitioner for the reimbursement of a filing fee, for payment of the airfare of a witness from interstate, and other disbursements including counsel’s fees as amounts payable to the legal practitioner for the provision of legal services. They are reimbursements for payments made on the client’s behalf, not for the provision of services.
33.Whilst the words “for the provision of legal services including disbursements” in the definition of “legal costs” in s.3 of the Act might indicate that disbursements are included within the meaning of “legal services”, the context, general purpose and policy of the provisions of the Act as a whole, and its consistency and fairness, indicate that while the amount charged or payable to a legal practitioner for disbursements constitute “legal costs”, they do not constitute legal costs payable to the legal practitioner for the provision of legal services. …
34. … clause 7 of the Agreement provided that the clients authorised the firm to act as their agent in incurring any disbursements in the course of performing … (Footnote omitted)
Counsel for Ms Getzler and Kompot put at the forefront of his argument concerning ss 97 and 98 the following propositions:
… If the submissions of the Appellant are right then:
(a)the English Court of appeal was wrong to conclude that the agreement under consideration in Awwad v Geraghty [2001] QB 570 was a champertous “uplift agreement” that was void for public policy. That was an agreement that, for all material purposes, is identical to the Client Service Agreement here under review (the “Agreement”);
(b)the agreement stuck (sic) down by Byrne J in Equuscorp Pty Limited v Wilmoth Field Warne [2006] VSC 28 was wrongly struck down;
(c)section 98 of the Legal Practice Act 1996 (the “Act”) and its successor provision, section 3.4.28(1) of the Legal Profession Act 2004, were and are wholly ineffective to regulate what were, prior to the introduction of the Act, champertous “uplift agreement” (sic) that were void for public policy;
(d)the Victorian legislature, far from introducing a limited reform, introduced an unregulated regime or, unbeknownst to it, a regime that can be avoided by mere contrivance because Victorian legal practitioners, by the device of differential hourly rates (the lower payable absent success and the higher payable contingent on success), may now enter into champertous “uplift agreements” without any restraint whatsoever.
He submitted that s 98(1) should be read as if it followed this form:
A conditional costs agreement may provide for the payment of a premium (on the legal costs otherwise payable under the agreement) on the successful outcome of the matter …
At the heart of his argument was the proposition that –
Section 98 imposes certain restrictions on conditional costs agreements that are “uplift agreements”. That is, agreements whereby the legal practitioner gets a base rate of professional charges irrespective of success and is permitted an uplift in fees contingent on success.
In the present case, counsel submitted, there was a premium, and in breach of s 98(2) it was not a specified percentage of the legal costs otherwise payable. Further, it was a breach of s 98(3) because, translated into a percentage, it was more than 25 per cent of the costs otherwise payable.
In support of his submission that Coadys’ argument about the operation of ss 97 and 98 was obviously wrong, counsel gave an example of an agreement which provided for payment of costs at $400 per hour in the event of failure and $800 per hour in the event of success. This, he contended, would be permitted avoidance of s 98(3). It would involve, in substance, a premium of 100 per cent.
Counsel submitted, concerning s 99(1), that its operation was not limited to percentage contingency fees. So much was made clear by s 99(2). The present agreement breached sub-s (1) because, by clause 4.4, Coadys was entitled to reassess its fees if the amount recovered exceeded (bills for) fees and disbursements already rendered. So it was that the amount payable under the agreement, or part thereof, was calculated by reference to the amount of the award, settlement or value of property recovered. The matter was made even clearer by the last sentence of clause 4.4, which limited recovery of the ‘uplift’ by the amount of the award or settlement.
Concerning the operation of s 102, counsel submitted that –
· ‘Legal costs’ includes disbursements. ‘Retention of a barrister is, in part, satisfaction of the provision of legal services by the solicitor’.[4] Counsel’s fees are disbursements properly included in a bill of costs. They are professional disbursements.
· The prohibition by s 102(3) on recovery of any amount in respect of the provision of legal services, contrasted with recoverability of ‘legal costs’ in the circumstances set out in s 102(2), showed an intent to deny recoverability of disbursements including counsel’s fees. Had the intent been otherwise, s 102(3) could have been simply redrafted to exclude disbursements.
· The phrase ‘in respect of’ in s 102(3) is of the widest application.[5]
· If Coadys’ argument was correct, s 86(3)(d) of the Act would lack utility. There would be no need for solicitors to deal with disbursements at all.
· Section 102 struck at champertous agreements, ‘a particularly obnoxious form of maintenance’. It was unsurprising that the legal practitioner would be denied recovery of legal costs, including disbursements.
· It was wrong to say that Coadys was seeking reimbursement of payments made on the client’s behalf. The prohibition upon champerty was based on the premise that the litigation was being conducted, in part at least, for the unlawful gain of the solicitor.
· In any event, it might be the case that counsel could recover any unpaid fees directly from the clients.
· The decision of Patten AJ in Wentworth v Rogers[6] in fact supported his clients’ position. The circumstances and the relevant legislation differed from those in the present case.
· The bare conclusion of Byrne J in Equuscorp[7] that the prohibition in s 102(3) ‘presumably’ did not attach to disbursements was not fully considered. His Honour’s conclusion was of ‘no real assistance’ to Coadys.
[4]Dimos v Hanos & Egan [2001] VSC 173, [100].
[5]Citing O’Grady v Northern Queensland Co Limited (1990) 169 CLR 356, 376 (McHugh J) and Nordland Papier AG v Anti-Dumping Authority (1999) 93 FCR 454. The cited authorities were not very useful in establishing the proposition, often stated, for which counsel contended. In O’Grady, McHugh J was referring to the phrase ‘in relation to’. In Nordland, the key observation of Lehane J is at 462, [30] where his Honour emphasised the importance of context in giving meaning to the phrase ‘in respect of.’ Counsel also cited Pearce and Geddes, Statutory Interpretation in Australia (5th ed), para [12.7].
[6][2005] NSWSC 143.
[7][2006] VSC 28, [31].
The proper construction of ss 97-99
No submission of counsel additional to those advanced in Equuscorp has caused us to alter our opinion as to the proper construction of ss 97-99. We adhere to the reasons which we there expressed.[8] We should refer, however, to a few additional submissions that were advanced on this appeal.
[8][2007] VSCA 280 [103]-[127].
Counsel for Ms Getzler laid considerable stress on Awwad v Geraghty,[9] and upon what he repeatedly submitted would have been – subject to the intervention of the Act – a champertous uplift agreement that was void for public policy.
[9][2001] QB 570.
There is no doubt, as we said in Equuscorp, that before the enactment of s 98 of the Act a conditional fee agreement of the uplift kind was unlawful at common law, just as was an arrangement of the percentage fee type. According to the Sackville report[10] agreements of the two kinds were unlawful as involving maintenance and champerty. They continued to be unlawful although in Victoria, as in some other Australian jurisdictions, maintenance and champerty ceased to be both criminal offences and discrete torts.[11] Such continuance no doubt reflected s 32(2) of the Wrongs Act1958 (Vic), which was inserted in 1969.
[10]Access to Justice an Action Plan, 1994, para 6.8.
[11]See, in Victoria, s 2(2) of the Abolition of Obsolete Offences Act 1969 – which abolished ‘any distinct offences under the common law of maintenance (including champerty but not embracery), or of being a common barrator, a common scold or a common night walker’; and s 32(1) of the Wrongs Act 1958, inserted by s 4(1) of the Abolition of Obsolete Offences Act.
The current status of maintenance and champerty in the Australian legal firmament was extensively discussed in Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd.[12] But it is not necessary to seek to apply what was there said. The short point is that, even allowing that uplift fee agreements were unlawful until 1996, they were no longer unlawful after the enactment of s 98, so long as they did not infringe either of sub-ss (2) or (3). In the event, there is nothing to be gained by analysing the nature of the agreement in Awwad, and considering whether or not agreements of that kind continued to be unlawful at common law in England, being not relieved from unlawfulness by primary or subordinate legislation. This is not to say that such an analysis would have aided Ms Getzler. According to the categories described by Schiemann LJ in Awwad,[13] an agreement of the present kind would not be described as a success uplift case. The solicitor in Awwad failed because, her fee arrangement being of the speculative fee kind, such arrangements were not permitted at common law in England; and her position was not rescued by Solicitors’ Practice Rules made pursuant to legislation.
[12](2006) 80 ALJR 441, 1457-1463, [68]-[95] (Gummow, Hayne and Crennan JJ), 1491-1495, [250]-[265] (Callinan and Heydon JJ – who dissented on the issue in point of fact).
[13][2001] QB 570, 576 B-C.
So one returns to the essential questions: Was the agreement in the present case an agreement of the kind described in s 98(1)? If so, did it contravene either or both of s 98(2) and (3)?
In submitting that this agreement was of the s 98(1) kind, counsel for Ms Getzler submitted that the reference to ‘the legal costs otherwise payable’ was a reference to such costs as might be payable under conditional costs agreement in the event of failure. It was the ‘two tier’ argument which was advanced in Equuscorp. We reject it for the reasons which we there gave.
The example which counsel gave to highlight the alleged vice of Coadys’ submissions concerning ss 97 and 98 seems to us not to aid the construction for which he contended. It will be remembered that counsel postulated an agreement by which $400 per hour was payable in any event, and $800 per hour in the event of success. That, he asserted, disclosed a premium of 100 per cent in the event of success. But it would only do so if the construction of s 98(1) advanced for Ms Getzler was correct. Further, we do not think that it casts doubt on the construction contended for by Coadys. For according to Ms Getzler’s position, it would not have been a breach of s 97(1), and could not have been a breach of s 98(2), for a solicitor to charge nothing in the event of failure and $800 per hour in the event of success, but it would have been a breach of s 98(2) to charge $1 per hour in the event of failure and $800 per hour in the event of success. The logic of such an outcome is not evident, despite the soundness of the arithmetic which says that one cannot make a premium building upon zero. Indeed, on the construction of s 98 advanced for Ms Getzler, any payment required by an agreement in the event of failure must have been quite close to the costs payable on success if a breach of sub-s (2) was to be avoided. In the case of a fee on success of $800 per hour, the fee on failure must have been $640 per hour, or more – a significant inhibitor, we should have thought, on access to justice, which was a rationale for making fee uplift arrangements lawful.
We turn to s 99. We accept the submission for Ms Getzler that s 99(1) rendered unlawful agreements other than agreements by which fees were made a percentage of moneys recovered. Section 99(2) shows that this must be so. But the key criteria of s 99(1) remain as we identified them in Equuscorp.[14]
[14][2007] VSCA 280 [126]-[127]; and see also [132]-[133].
Application of ss 97-99 in the circumstances of the case
The agreement prescribed a rate of costs in the circumstances of failure and a higher rate in the event of a successful outcome to the litigation – the meaning of that term being specified. No premium was payable on the costs payable on a successful outcome. Consistently with the construction which we have placed on ss 97 and 98, the agreement was a conditional costs agreement which complied the requirements of s 97. It was not an uplift agreement to which s 98 applied. Neither was it an agreement to which s 99(1) applied. Costs in the event of success were calculable at an hourly rate which was unrelated to the amount of the award or settlement. Once the threshold which was indicative of success was reached, costs were to be re-assessed at the higher rate. The applicable rate did not increase according to, or in tandem with, the amount of the award or settlement. Coadys agreed with their clients that the liability of the latter to pay the costs as re-assessed was subject to a potential cap – the amount recovered. But that was an issue distinct from the costs payable being calculated by reference to the amount of the award.
The proper construction of s 102(3)
Because, we consider, the agreement did not contravene s 97 or 98, it is strictly unnecessary for us to resolve the argument concerning the meaning of s 102(3). For completeness, however, we should say that in our opinion the learned trial judge reached the correct conclusion on the point.[15] That was the view of s 102(3) which we took in Equuscorp.[16]
[15]Although we cannot agree with his Honour’s conclusion that the agreement was only void in part.
[16][2007] VSCA 280 [142]-[144].
In deference to the additional submissions advanced for Ms Getzler, we add the following: First, we do not accept counsel’s submission that the reference to ‘legal costs’ in s 102(2) and to ‘any amount in respect of the provision of legal services’ in s 102(3) revealed an intent of excluding recovery of disbursements under the latter provision. Rather the contrary. Since the definition of ‘legal costs’ in s 3 of the Act included disbursements, the simple use of the term in s 102(3), as it had been used in s 102(2), would logically have embraced disbursements. Bearing in mind the fact that the s 3 definition referred to ‘all amounts charged[17] for the provision of legal services including disbursements’, use of the phrase in s 102(3) ‘the provision of legal services’, shorn of association with disbursements, in our opinion contraindicated inclusion of disbursements within the content of that phrase – notwithstanding the preface ‘in respect of’.
[17]Or in respect of which there was liability to pay a legal practitioner.
Second, we respectfully agree with the conclusion of the learned trial judge that –
… it is one thing to say that the retention of a barrister is part of the legal services provided by a solicitor, it is quite another thing to say that the services actually performed by the barrister – and charged for by him or her – are services provided by the solicitor.
Third, we think that no point was to be made by reference to s 86(3)(d) of the Act. Section 86 was concerned generally with retainers to provide legal services. Subsection (3) was concerned with the provision of information to the client, inter alia as to legal costs – see sub-ss (3)(b)(c)(f). Subsection (3)(d) referred not simply to ‘legal services’, but to the range of costs – that is, legal costs – likely to be payable in the event of a successful or unsuccessful resort to litigation. The references to costs drew in the definition of ‘legal costs’ in s 3 – a definition which included disbursements.
Fourth, in our opinion it was not relevant to the issue of construction whether or not it was the case, as counsel contended, that counsel night recover unpaid fees from the client even though the solicitor could not do so.
Fifth, the view we have taken of s 102(3) does not depend upon the conclusion expressed by Byrne J in Equuscorp, nor upon the reasoning of Patten AJ in Wentworth v Rogers.[18] In the former, his Honour simply advanced a conclusion. In the latter, the question was whether costs generally were recoverable on a quantum meruit in the face of a costs agreement which was declared by legislation to be void because it was not in writing or evidenced in writing. That is not this case.
[18]Citation n 6.
Application of the s 102(3) in the circumstances of the case
In the event that the agreement had contravened any of ss 98(2) or (3) or s 99, the orders made by the learned trial judge in respect of disbursements would have been correct.
Orders
The appeal should be allowed, the judgment entered on 29 March 2006 should be set aside, and orders should be made allowing the claim and dismissing the counterclaim. The cross appeal should be dismissed. There should be orders for costs of the trial and of the appeal in favour of the appellant.
---
0
6
0