Eagle Lawyers v Career Education Consultants Australia Pty Ltd
[2013] VCC 1263
•4 October 2013
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE | Revised (Not) Restricted |
COMMERCIAL LIST
GENERAL DIVISION
Case No. CI-12-02086
| EAGLE LAWYERS | Plaintiff |
| v. | |
| CAREER EDUCATION CONSULTANTS AUSTRALIA PTY LTD & ANOR | Defendants |
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JUDGE: | His Honour Judge Anderson | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 28 & 29 August 2013 | |
DATE OF JUDGMENT: | 4 October 2013 | |
CASE MAY BE CITED AS: | Eagle Lawyers v. Career Education Consultants Australia Pty Ltd & Anor | |
MEDIUM NEUTRAL CITATION: | [2013] VCC 1263 | |
REASONS FOR JUDGMENT
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Catchwords: Solicitor – Action for the recovery of legal costs – Basis upon which costs agreed to be charged.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms S. Cherry | Eagle Lawyers |
| For the Defendants | Mr S. Metaxas | Kawakami Lawyers |
HIS HONOUR:
1In 2011, the first defendant, Career Education Consultancy Australia Pty Ltd (“CECA”) was in the business of recruiting students for educational institutions in Victoria. The second defendant, Mr Rahul Singh, is a director of CECA with primary responsibility for its management.
2A downturn in the private education sector at that time obliged CECA to pursue recovery proceedings against a number of schools and colleges for whose courses it had recruited students. In March 2011, CECA engaged the plaintiff, Eagle Lawyers, in relation to two colleges with whom it was in dispute. Later in 2011, CECA engaged Eagle Lawyers in other matters. Eagle Lawyers is operated by Ms Felicity Tseng who has been a practicing lawyer for about 10 years.
3Ms Tseng provided to CECA, and in one case to Mr Singh as well, disclosure statements and costs agreements in purported compliance with the Legal Practice Act 2004 (Vic). Legal work was undertaken and bills were submitted in certain matters by Eagle Lawyers. In some cases, Ms Tseng accepted payment of a discounted sum and in others she accepted the amount paid by the colleges as part of a settlement with CECA.
4In December 2011, a dispute arose between Eagle Lawyers and CECA about the fees to which the solicitors were entitled. CECA transferred their work to other lawyers and in January 2012, the plaintiff served bills of costs on CECA and Mr Singh in relation to nine outstanding matters. The bills claimed lump sum amounts.
5No requests were made for itemised bills, although in this proceeding:
a.the plaintiff has provided as part of its further and better particulars of claim, itemised bills prepared according to the County Court Scale of Costs and the Practitioners Remuneration Order;
b.the plaintiff filed an expert report of Catherine May Dealehr which contained the opinion that “the professional fees and disbursements claimed by the plaintiff are reasonably incurred and of a reasonable amount”.
6The principal issue in dispute between the parties is an assertion by the defendants that the plaintiff in July 2011 orally agreed in relation to all the outstanding cases that it would not charge fees in accordance with the costs agreements, court scales or the Practitioners Remuneration Order, but rather, that the plaintiff would:
a.recover costs from the other party (that is, the particular college with whom CECA was in dispute); or
b.if that party went into liquidation or perhaps was unable or unwilling to pay, charge a fixed fee of $5,000 if the case proceeded to mediation, a further $2,000 if the case proceeded to trial and thereafter on the basis of a daily fee, together with all court costs.
7The questions for determination in the proceeding are:
a.whether the plaintiff was entitled to recover its costs in accordance with the relevant costs agreement, or where there no such agreement, in accordance with the Practitioners Remuneration Order;
b.whether the plaintiff was bound by the oral agreement as to its costs, as alleged by the defendants;
c.the quantum of any costs the plaintiff should recover and whether the costs are recoverable from only CECA or from Mr Singh as well;
d.whether any sum should be set off in relation to the costs the plaintiff would otherwise be entitled to recover.
Evidence and admissions
8The plaintiff makes the following claims for costs relating to CECA’s disputes with other parties, as follows:
a.$28,021.72 – Southern Cross Education Institute Pty Ltd;
b.$58,838.97 – Training and Development Institution Australia Pty Ltd and FIRA Pty Ltd;
c.$10,586.32 – Kontea Pty Ltd;
d.$2,231.00 – Kontea Pty Ltd;
e.$10,611.90 – Hospitality Training Victoria Pty Ltd;
f.$4,799.09 – Modern Communications Australia Pty Ltd;
g.$271.10 – Australian Institute of Technology and Education;
h.$1,578.50 – Australian Education Academy Pty Ltd;
i.$590.80 – Carrick Institute of Education Pty Ltd.
9The solicitor Ms Tseng, a barrister Mr Patrick Noonan and the costs expert Ms Dealehr gave evidence on behalf of the plaintiff. Mr Singh and his wife Mrs Pretti Singh, CECA’s office manager, gave evidence on behalf of the defendants. Ms Jasneet Kaur, an employee of CECA in 2011 who had dealings with Ms Tseng, did not give evidence. Although she is no longer employed by CECA, no further explanation was given as to her absence as a witness.
10On 12 August 2013, the plaintiff served a Notice to Admit on the defendants. A Notice of Dispute was filed by the defendants on 26 August 2013. Certain matters were not disputed and were accordingly deemed to have been admitted, as follows:
a.the plaintiff rendered services and paid certain disbursements, as instructed, to the following values in the following matters:
$32,641.82 Southern Cross Education Institute Pty Ltd $66,936.60 Training and Development Institution Australia Pty Ltd and Fira Pty Ltd $12,713.31 Kontea Pty Ltd $2,247.15 Kontea Pty Ltd $11,623.27 Hospitality Training Victoria Pty Ltd $6,705.80 Modern Communications Australia Pty Ltd $278.40 Australian Institute of Technology and Education $1,914.40 Australian Education Academy Pty Ltd $707.70 Carrick Institute of Education Pty Ltd The amounts set out in the Notice to Admit as the value of the plaintiff’s services rendered and disbursements paid, and not disputed by the defendants, were the totals of the itemised bills of costs prepared by the expert costs lawyer Ms Dealehr. The claims made by the plaintiff were in each case less and were calculated generally in accordance with detailed itemised bills attached to the Further and Better Particulars of the Statement of Claim delivered 7 January 2013;
b.the defendants did not dispute that disclosure statements and costs agreements were sent by the plaintiff to the defendants in relation to the following matters:
Date Other Party 18 March 2011 Southern Cross Education Institute Pty Ltd 18 March 2011 Spice Telecom Australia Pty Ltd 22 March 2011 Training and Development Institution Australia Pty Ltd and FIRA Pty Ltd 21 June 2011 Kontea Pty Ltd (CI-11-02962) 12 July 2011 Hospitality Training Victoria Pty Ltd 15 August 2011 Modern Communications Australia Pty Ltd c.the fact of, and authenticity of, an email dated 12 January 2012 attaching disclosure statements and costs agreements relating to Kontea Pty Ltd (pre-litigation matter), Australian Institute of Technology & Education and Carrick Institute of Education Pty Ltd.
First dealings between the plaintiff and the defendants
11The first matter in respect of which the solicitors were engaged, involved commission owed by TK Melbourne. On 10 March 2011, Ms Tseng sent an email to Mrs Singh which materially read, “I have attached the cost agreement as requested. We will send bill of costs approximately once a month or two months. As requested, we will cost $150 per hour initially for attendance with you in our bill of costs. According to the County Court Scale of Costs, costs for attendances are $38 or $52 per quarter hour. If you win the case, we can seek a costs order against the other party according to the County Court Scale of Costs”.
12The attached costs agreement named the “client” as CECA. The document noted, “You accept the costs agreement by signing and returning the copy of this document, or by continuing to give instructions to us in this matter”. The document indicated that charges would be in accordance with the County Court Scale of Costs.
13Mrs Singh said in evidence that the initial discussions with Ms Tseng took place in CECA’s offices. Mr Singh was also present. Mrs Singh told Ms Tseng that CECA had two colleges which owed money. Ms Tseng and Mrs Singh agreed that the solicitors would “charge $150 per hour for looking after the cases”. Shortly after in a phone call, Ms Tseng told Mrs Singh that the charge included GST and that the solicitors would charge “on a minute basis”, that is, for the time the actual work took to complete, not in minimum time blocks like other solicitors. Mrs Singh said that although Ms Tseng sent through costs agreements for the various work the solicitors were engaged to undertake, she believed that the basis for the solicitors’ remuneration would be $150 per hour as discussed with Ms Tseng and as set out in the email on 10 March 2011.
14On 18 March 2011, Ms Tseng sent through a further costs agreement in relation to commission owed to CECA by Spice Telecom Australia Pty Ltd (“STA”). The document was similar to the earlier form of agreement. The matters involving STA and TK Melbourne are not the subject of claims in this proceeding.
15On 22 March 2011, Ms Tseng sent a revised costs agreement to Mrs Singh in relation to the TK Melbourne matter, amending the costs agreement so that the costs would be charged on the “professional remuneration order scale” (presumably the practitioner’s remuneration order), “if the Court orders the other party to pay your costs on solicitor/client basis”; and for costs ordered on a party/party basis, on the County Court Scale. The email enclosing the revised agreement noted that the other party was, pursuant to its agreement with CECA, “liable for indemnifying you for costs” to recover outstanding commissions.
16Between March and July 2011, the solicitors were instructed by the defendants in relation to other matters and carried out legal work. Costs agreements were forwarded by Ms Tseng to CECA in relation to the following matters:
Other Party Date of
Costs AgreementBasis for Costs Recovery Southern Cross Education Institute Pty Ltd 18 March 2011 County Court Scale of Costs Training and Development Institution of Australia Pty Ltd 22 March 2011 If solicitor/client –
Professional Remuneration Order
If Party/Party –
County Court Scale of CostsKontea Pty Ltd [1] 21 June 2011 County Court Scale of Costs Hospitality Training Victoria Pty Ltd 12 July 2011 Professional Remuneration Order
17The defendants allege that in July 2011 the parties agreed on a different basis for the charging of costs for the legal work performed by the solicitors. The discussion took place on 6 July 2011 in a meeting between Ms Tseng and Mr Singh at CECA’s premises. Mrs Singh was not present at the meeting. Mr Singh said that at the meeting, he told Ms Tseng that an increasing number of CECA’s clients were not paying and it was likely that there would be more legal work required. Mr Singh said that he and Ms Tseng agreed that in future, legal fees would be claimed from, and paid by, the other parties (that is, CECA’s debtors).
18In a further discussion the following day, Ms Tseng had asked what was to happen if CECA could not claim its costs from the other party or if that party was unable to pay the costs. Mr Singh said that he had proposed, and it was agreed, that for cases resolving prior to mediation CECA would pay $5,000, if prior to trial, a further $2,000 and thereafter CECA would pay the daily court costs. Mr Singh said that he had discussed these matters at the time with his wife. Mrs Singh said that before the meeting between her husband and Ms Tseng, she and her husband had discussed the fact that the number of cases was increasing and that what would be proposed to Ms Tseng was that “she must fight for her own legal costs”. After the meeting with Ms Tseng, Mr Singh said to his wife that Ms Tseng had agreed to this proposal.
19On 7 July 2011, an email drafted by Mrs Singh was sent in the name of Jasneet Kaur to Ms Tseng as follows:
“Following to our meeting: if we are unable to recover legal cost from defendant then,
·from the start of the case till mediation (inclusive of mediation date) CECA will pay $5,000
·if case goes further till trial (exclusive of trial days) CECA will in addition pay $2,000
·for trial days CECA will pay day cost (ie if trial takes place for one day then one day cost will be in addition and if two days then two days in additional)
This is valid for all cases inclusive of TIV, MITT, AISI, HTA/HTB, SCEI, TK & MITC and any future legal case”.
20On 11 July 2011, at 8.32 am, Ms Tseng responded as follows:
“I will accept the payment provided in this email if the other parties go into liquidation and you are unable to recover legal costs.
I request that:
1You do not agree with or negotiate with any other parties to reduce our legal costs.
2If any of the colleges may be unable to pay commission and/or our legal costs in full you require them to pay commission to you as soon as possible and take actions to prevent them from disposing their assets.
I look forward to assisting you further and wish you receive the commission in full from all colleges”.
21Mrs Singh said that paragraph 2 in the letter reflected her understanding that in any costs negotiation with another party, CECA was not to interfere.
22On 11 July 2011 at 5.46pm, a further email was sent to Ms Tseng, apparently drafted by Mrs Singh. She said that CECA was going to be suing for millions of dollars and they wanted to know what would be the limit of their costs liability. The email reads:
“So as to make earlier mention payment structure more clearer:
If Career Education Consultancy Australia Pty Ltd (CECA) due to below mention reasons, CECA will still pay you $5,000 till mediation (incl. mediation) and additional $2,000 if goes further to trial followed by per day cost for trial.·if defendant’s company liquidates
·if we do not recover legal cost
·or if we recover legal cost less than $5,000 (prior to mediation or mediation inclusive) or less than $7,000 (if case goes further to trial). Then the difference will be paid”.
23On 15 July 2011, Ms Tseng responded by email as follows:
“I will accept the fees stated in this email if:
1the defendants go into liquidation;
2you are unable to recover legal costs through no fault of yours;
3if you can only recover less than $5,000 prior to mediation or at mediation or less than $7,000 before trials through no fault of yours.
I request that you do not negotiate with or agree with the other parties to reduce our legal costs.
I wish all the cases go well and you will recover commission and legal costs in full from all the other parties”.24The costs agreement in the Hospital Training Victoria dispute and the costs agreements forwarded by Ms Tseng to CECA in relation to the remaining disputes, as set out below, did not incorporate the matters discussed in July 2011.
| Other Party | Date of Costs Agreement | Basis for Costs Recovery |
| Modern Communications Australia Pty Ltd | 15 August 2011 | Professional Remuneration Order |
| Australian Education Academy Pty Ltd | 23 December 2011 | Professional Remuneration Order or Magistrates’ Court Scale |
| Kontea Pty Ltd [2] | 12 January 2012 | Professional Remuneration Order |
| Australian Institute of Technology and Education | Undated | Professional Remuneration Order |
| Carrick Institute of Education Pty Ltd | Undated | Professional Remuneration Order |
25Mrs Singh said that the email dated 15 July 2011 set out her understanding of the varied arrangement for the payment of the solicitors’ costs. She said further that the way in which Ms Tseng billed for costs reflected the varied agreement that had been reached in the discussion and correspondence between 6 and 15 July 2011.
Bill relating to Spice Telecom Pty Ltd
26On 15 July 2011, Ms Tseng sent a bill of costs to CECA in relation to the dispute with Spice Telecom Australia Pty Ltd. The bill claimed that the costs were, “in excess of $12,800” but “less discount”, the “total due and payable” was $8,488. Mrs Singh said in evidence that this account confirmed the arrangement reached between the parties in July 2011 that the plaintiff “had to claim costs from the other party”. Mrs Singh said that at the meeting with Ms Tseng, which Mrs Singh had not attended, her husband had asked Ms Tseng to “fight for her own legal costs” and that it had been agreed she would charge “whatever she gets”. At the mediation concerning the Spice Telecom matter, Mrs Singh said that Ms Tseng negotiated her costs of $8,488 and had sent CECA the account for that sum. Ms Tseng said that she did not always charge the full amount that she was entitled to under the costs agreement and sometimes she “gave discounts”. Ms Tseng said that in these instances she was “being generous” and there was “no agreement outside the costs agreement”.
Bill relating to Melbourne Institute of Training and Technology Pty Ltd
27On 2 August 2011, Ms Tseng sent a bill of costs to CECA in relation to the dispute with Melbourne Institute of Training and Technology Pty Ltd. The bill claimed that the costs were, “according to costs agreement in excess of $6,715” but “less discount $2,715”, the total due was $4,000.
28Earlier on 2 August 2011, Ms Kaur of CECA had written to Ms Tseng stating, “We have received the cheque from MITT today. Kindly send us the invoice of agreed amount and as soon as cheque is cleared we can make the payment to you. Thanks for your support!!!” Mrs Singh said in evidence that Ms Tseng had “negotiated her legal fees with MITT” and that “when they paid to us we told her and she sent the invoice”.
29Ms Tseng said that Mr Singh had telephoned her and told her that he “only wanted to pay her $4,000”. She said she had not negotiated this figure and that it had been offered by MITT.
Bill relating to Kontea Pty Ltd
30On 9 August 2011, Ms Tseng wrote to the solicitors acting for Kontea Pty Ltd in response to an offer they made the previous day. Ms Tseng said that CECA “will accept payment by instalments in the total sum of $79,915 plus GST” ($87,906.50). The email noted, “Our client is happy not to charge legal costs which is in excess of $4,000 plus court and other fees”. The email concluded by reiterating that, “Our client has waived their legal costs”.
31Mrs Singh said that Ms Tseng had negotiated the settlement of the claim against Kontea Pty Ltd and had wanted $4,000 for her costs. Ms Tseng said that CECA had instructed her that it would “waive its right to claim legal costs from Kontea”.
Bill relating to Training and Development Institution Australia Pty Ltd
32On 20 September 2011, the dispute between CECA and Training & Development Institution Australia Pty Ltd and FIRA Pty Ltd (trading as TK Melbourne) was listed for trial. Mr Patrick Noonan of Counsel was briefed by Ms Tseng, after she had discussed a number of different counsel with CECA. Mr Noonan performed work between 12 and 20 September 2011. Ultimately, the trial was adjourned. There is a dispute between the parties as to the reasons for the adjournment and as to whether it was CECA’s or Ms Tseng’s fault.
33Mr Noonan rendered an account for his fees totalling $10,796.50. Ms Tseng forwarded the account to CECA on 7 October 2011. CECA did not pay the account. Apart from part of the account waived by Mr Noonan, the fees have been paid by Ms Tseng. I shall further discuss below the question of whether CECA should be liable for Mr Noonan’s fees, and the other costs charged by Ms Tseng.
Discussions after December 2011
34In December 2011, relations between Ms Tseng and CECA deteriorated. Mr Noonan’s fees had not been paid by CECA. In the Southern Cross Education Institute (“SCEI”) matter, there was a dispute about an agreement reached in relation to the costs Ms Tseng would accept.
35On 19 December 2011, Ms Tseng wrote to CECA both in relation to the SCEI dispute and generally about the basis upon which she proposed she would charge in the future. For the costs of the SCEI matter, Ms Tseng said that, “The total costs in this matter is in excess of $23,000 plus the costs for reading a big bundle of documents”. She said that SECI had “offered to pay approximately $8,250 for your costs”.
36In discussions with Mrs Singh, Ms Tseng said Mrs Singh told her that unless she “accept $7,000 as my legal costs, [Mrs Singh] will inform the judge that she would not accept SCEI’s offer for $35,959”. Mrs Singh “advised that she will get SCEI to make payment within 24 hours”. Ms Tseng said that she would accept $7,000 “only if I receive it in full within 24 hours”.
37Later, Ms Tseng said she was told by Mrs Singh that SCEI would pay by two instalments and that Ms Tseng “will be paid 50% upon receipt of the 1st instalment”. Ms Tseng said that she therefore “declined” the offer by CECA to pay $7,000 for her costs in the CECA matter.
38In the email dated 19 December 2011, Ms Tseng set out her reasons for proposing that in the future she would “charge 80% of the County Court scale for County Court matters and 90% of the Magistrates’ Court scales for Magistrates’ Court matters regardless of whether or not you agree to waive legal costs”.
39The email made the following assertions:
“I have given you much discount, approximately 50%-75%, in many matters. No other lawyers will give this much discount. Many law firms charge according to their own hourly rates, which is higher than court scales. I have only charged much less than court scales. Further, in some cases, I did not cost the work I can charge according to the court scales, such as reading documents.
For your convenience and cash flow, I let you pay me after you received payment from the other parties. It does not mean that my fees should be negotiated if the other parties do not wish to pay our legal costs. As we have proved that you are successful in your cases, you are entitled to legal costs against the other parties. I respect that you would like to settle matters as early as possible. However, the other parties’ unwillingness to pay our legal costs is different from ‘you cannot recover legal costs’”.
40On 23 December 2011, Ms Tseng submitted Bills of Costs to CECA for the Kontea (AISI) matter totalling $8,008.28 and for the SCEI matter for “$24,000 less discount, total $8,300”.
41On 30 December 2011, Ms Tseng wrote to CECA about the SCEI bill and other related matters. The email included the following statements:
“Thank you for the payment in the sum of $6,500 dated 28/12/11.
During the negotiation with SCEI, I was instructed that if I do not accept the fees offered by SCEI, you will tell the judge that you would not accept their offer. I advised you that I do not accept SCEI’s offer.
Although I offered to accept instalments at a different amount, you advised that you will pay $8,300 as a lump sum. You called me several times and wrote to me and asked me to amend my bill to $8,300 urgently because you would pay me $8,300 on 23 December 2011. You informed me that the cheque from SCEI was cleared before 23/12/11. It was only on those bases, I amended the bill.
I have not received $8,300 in full. As you have not kept your word in your dealings even the huge discount was given, I will charge fees according to the court scale. The bill in the sum of $8,300 is not valid any more because you have not kept your promise”.
42In early January 2012, Ms Tseng forwarded further bills of costs to CECA. Mrs Singh responded, “The way you are writing is not acceptable to me. I was there with you in hearing for SCEI and whatever you have written about that day is not right”. Mrs Singh sought an urgent meeting with Ms Tseng.
43There was a further email exchange on 10 January 2012. Mrs Singh concluded her response to Ms Tseng’s email as follows: “This is my last try and still if you will refuse to come for the meeting to discuss then I expect you to hand over all the cases to me so that cases can be looked after further”. On 12 and 19 January 2012, Ms Tseng sent to CECA bills of costs in respect of the remaining outstanding matters.
Conclusions
44Although denied in the defence, it is not disputed by the response to the Notice to Admit, and the evidence also establishes, that:
a.the plaintiff served disclosure statements and costs agreements in accordance with the statutory requirements in relation to each relevant matter;
b.legal services were provided to the value alleged.
45The defendants raise a number of matters in their defence:
a.prior to the commencement of any services, the first defendant and the plaintiffs agreed to a fixed fee for legal services to be rendered by the plaintiff to the first defendant;
b.a specific defence relating to the SCEI matter that the first defendant agreed to increase the legal fees above the agreed fixed fee from $5,000 to $8,300, which sum had been paid.
The particulars provided by the defendants of the agreement for “fixed legal fees” referred to the conversations and emails between the parties in mid-July 2011;
c.the standard of legal services provided by the plaintiff failed to be provided or rendered with due skill and attention or to the standard of the reasonable and prudent solicitor.
Particulars of this allegation include:
i.failure to follow instructions;
ii.litigation not properly prepared or conducted;
iii.attending Court on trial dates on two occasions inadequately prepared for trial;
iv.drafting inadequate terms of settlement which, upon a default, required the proceeding to be reinstated;
v.not having the skills or not attending to matters with the standards of a reasonable and prudent solicitor.
46I consider that, apart from the deemed admissions resulting from the Notice to Admit process, there is clear evidence that:
a.the appropriate disclosure statements and costs agreements were served;
b.the bills of costs were appropriately served;
c.the plaintiff has established that services were rendered and disbursements paid to the value claimed.
47The allegations of the defendants that the services were not rendered to an appropriate standard by the plaintiff were not particularised or supported by expert evidence filed in accordance with the Rules or with the defendants’ stated intention in their defence. Defendants’ counsel did not cross-examine Ms Tseng on these matters and the evidence of Mrs Singh that referred to these issues was only referred to whilst dealing with other matters. There is no basis for concluding that any of the matters raised by way of set-off have been established.
48The only matters of substance raised by the defendants were:
a.whether the parties had agreed in mid-July that the plaintiff would thereafter charge a fixed fee according to the stage at which the matter resolved;
b.whether the second defendant, Mr Singh, was a party to the costs agreements and had a separate liability as well as CECA.
Variation agreement in July 2011
49There are a number of matters relevant to the determination of the question whether the parties agreed in July 2011 to vary the basis upon which costs would be charged by the plaintiff:
a.the plaintiff had sent, and continued to send, costs agreements and disclosure statements to CECA for each dispute as it arose;
b.there is little evidence apart from the assertion by Mrs Singh, that the agreement by Ms Tseng to limit her hourly charge to $150 indicated that the rates set out in the costs agreement had only been “agreed” so that costs could be recovered at these rates from the third parties with whom CECA was in dispute, and were not to form the basis for recovery of costs from CECA. This assertion ignores the fact that CECA, and particularly Mrs Singh, does not allege any alternative basis for agreement prior to July 2011;
c.it is clear that in July 2011, CECA, through both Mr Singh in a meeting with Ms Tseng and Mrs Singh in correspondence, discussed an alternative basis for the plaintiff to charge for its legal services;
d.the defendants did not articulate the terms of the agreement in their defence. Ms Tseng denies that a concluded agreement was reached. The onus is upon the defendants to establish that the parties agreed on an alternative basis for the charging of costs and that the terms of that agreement, if otherwise enforceable, were sufficiently certain;
e.the correspondence between the parties in July 2011 discusses the following issues:
i.a fixed charge for matters disposed of at or before mediation ($5,000) and for matters disposed of before trial (extra $2,000). Matters proceeding to trial would include daily charges and disbursements;
ii.costs were, if possible, to be recovered from the other party to the dispute;
iii.the agreed charges in (i) would be paid by CECA if costs could not be recovered from the other party.
f.the dispute about what was agreed between the parties revolves around the question of the circumstances in which the fixed rate charges would apply. There were different positions advanced:
i.Mrs Singh said that what was proposed was that Ms Tseng “must fight for her fees”;
ii.Ms Tseng was concerned that, if CECA were to negotiate with the other party, it should not settle without taking proper account of CECA’s obligations to pay the plaintiff’s costs in accordance with the costs agreement;
iii.the fixed rate charges should not apply simply if recovery of the costs was not obtained from the other party. Ms Tseng said the costs might only be reduced if one of the other parties went into liquidation or some other similar circumstance made recovery from that party impossible;
iv.in that case, Ms Tseng said she was prepared to “help” CECA by moderating the costs charged to CECA;
v.CECA did not respond to the plaintiff’s email dated 15 July 2011 and there is no other evidence of circumstances from which it can be implied that CECA agreed to the counter proposal by Ms Tseng in the email.
g.in about three instances, Ms Tseng had reduced the legal costs she charged CECA. In each instance, however, this seemed to be:
i.in circumstances where that was the amount agreed with the other party as the portion of the settlement applicable to costs;
ii.Ms Tseng was not necessarily involved in the negotiations with the other party and she said the costs figure was agreed without first referring the matter to her;
iii.the agreed costs figure bore little relationship to what was said to be the “fixed rates” which had been agreed between the plaintiff and CECA;
iv.Ms Tseng said she agreed to fixed sums, which involved significant reductions from what she would have been entitled to charge under the costs agreement, because she was told that otherwise settlements would break down, and/or after promises of speedy payment.
50Mr and Mrs Singh were not convincing witnesses. Both Mrs Singh and Ms Tseng seemed quite stressed at times whilst giving their evidence. Mr Noonan’s evidence was supportive of Ms Tseng’s evidence of the events concerning the preparation for the trial date on 20 September 2011 in the matter involving Training & Development Institution of Australia Pty Ltd (“Training and Development”) and FIRA Pty Ltd.
51I am not satisfied that Mrs Singh’s assertions in relation to the work carried out for the Training and Development matter were correct. I accept the evidence of Ms Tseng and Mr Noonan, as more probable, that the preparation work for the trial was necessary and was, after advice from Mr Noonan, carried out upon CECA’s instructions. The matter did not proceed at trial following an application for an adjournment by the defendant in the proceeding.
52In circumstances where the defendants have the onus of proof in relation to the varied agreement they assert, I consider that it has not been established that Ms Tseng and CECA, through Mr and Mrs Singh, reached agreement upon an alternative basis for the plaintiff to charge costs for the matters in which CECA instructed it to act or the circumstances in which such an alternative basis for charging would apply.
Separate liability of Mr Singh
53Mr Singh is a director of CECA and the person primarily responsible for its management. It was alleged by the plaintiff that he should be personally liable for the plaintiff’s legal costs in relation to each of the disputed matters because he was a party to the retainers.
54The evidence does not bear out this assertion. Only in relation to the matter involving Carrick Institute of Education Pty Ltd was Mr Singh named as a “client” with CECA in the costs agreement. This agreement was probably forwarded to CECA in January 2012, at about the same time as the bill of costs. The plaintiff does not rely upon the costs agreement to recover from CECA, submitting that as the amount sought to be recovered is less than $750, the formalities of the Legal Profession Act 2004 need not be complied with (see s3.4.12(1)(a)).
55In the circumstances, there is no basis for the plaintiff to recover from Mr Singh personally in respect of the claims also made against CECA.
Proposed orders
56Subject to hearing further submissions regarding the form of the orders and questions of interest and costs, the following orders would seem appropriate:
a.judgment for the plaintiff against the first defendant that the first defendant pay to the plaintiff $106,979.40 together with appropriate interest;
b.judgment for the second defendant against the plaintiff that the plaintiff’s claim against the second defendant be dismissed.
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Certificate
I certify that these 17 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 4 October 2013.
Dated: 4 October 2013
Philippa Gilkes
Associate to His Honour Judge Anderson
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