Elringtons Pty Ltd v Dee (Civil Dispute) - [2016] ACAT 87

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

ELRINGTONS PTY LTD V DEE (Civil Dispute) [2016] ACAT 87

XD 51/2016
Catchwords: CIVIL DISPUTE – recovery of legal fees – no costs agreement – recovery on grounds of implied contract of retainer – sufficiency of evidence – ex parte hearing – default judgment

Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 22, 23, 44

Subordinate
Legislation:ACT Civil and Administrative Tribunal Act Procedural Directions 2010 (No 1) direction 43
Court Procedures Rules r 4, 1115 – 1120, 1505, 1619, 1620

Cases cited:Banque Commerciale SA (In Liquidation) v Akhil Holdings Ltd (1990) 169 CLR 279
MY Distributors Pty Ltd v Omao Pty Ltd (1992) 36 FCR 578
Pires v DibbsBarker Canberra Pty Ltd [2014] ACTSC 283
Williams Love & Nicol Lawyers Pty Ltd v Wearne [2016] ACAT 18

Tribunal: President G C McCarthy

Date of Orders: 5 August 2016
Date of Reasons for Decision: 5 August 2016

AUSTRALIAN CAPITAL TERRITORY
CIVIL & ADMINISTRATIVE TRIBUNAL XD 51/2016
BETWEEN:
ELRINGTONS PTY LTD
Applicant

AND:
ANTOINETTE DEE
Respondent

TRIBUNAL: President G C McCarthy

DATE: 5 August 2016

ORDER

The Tribunal Orders that:

Within 28 days from the date of this order, the respondent pay the applicant $8,148.06 comprised of:
(a)$7,347.70 a debt due and owing for legal fees;
(b)$280 for the filing fee; and
(c)$520.36 for interest.
……………………………..
President G C McCarthy

REASONS FOR DECISION

Background

The applicant, Elringtons Pty Ltd, seeks an order that the respondent, Antoinette Dee, pay the sum of $7,347.70, plus the Tribunal filing fee plus interest. The claim is made as a debt due and owing; in the alternative, damages for breach of contract; or in the further alternative, on a quantum meruit basis.
The claim arises from the respondent’s non-payment of two invoices for legal fees charged in relation to legal services that the applicant provided to the respondent.
The first invoice was rendered on 11 August 2014 for the sum of $3,127.30. The applicant states that it transferred $609 of the respondent’s money held in trust in part payment of the first invoice. On 1 October 2014, the respondent paid $400 towards payment of the first invoice, leaving a balance owing of $2,118.30.
The second invoice was rendered on 3 September 2015 for the sum of $5,229.40. The applicant states that despite demands for payment the second invoice remains unpaid.
On 27 January 2016, the respondent filed a response in which she admitted liability in part. She stated that judgment should be entered for the balance owing under the first invoice ($2,118.30) and asked for an order that the judgment debt be paid by instalments of $20 per week. In relation to the second invoice, she disputed the claim on the grounds that “no further work was ever performed. I have been charged for lawyers’ mistakes” and then set out details of those alleged mistakes. She also detailed her limited financial means on which she relied for an order that she be able to pay the balance owing under the first invoice by instalments.
On 24 February 2016, the Tribunal conducted a preliminary conference. Mr Drazen Kozaric, solicitor, attended for the applicant and the respondent attended by telephone.
The parties were not able to reach an agreement and a number of procedural directions were therefore made requiring them to file and serve documents in preparation for the hearing. The respondent did not file or serve any documents in compliance with the Tribunal’s orders. On 10 May 2016, the Tribunal Registry sent an email to the respondent noting that she had not filed any documents and asked of her intentions. The Tribunal did not receive a reply. I am satisfied that the respondent received the email: it was the address provided by the respondent and the same email address with which the applicant had corresponded with her when performing legal services on her behalf.
I heard the matter on 23 May 2016. The respondent’s name was called before the hearing started, but she did not appear. She had not applied to attend the hearing by telephone. Attempts were made to telephone her at the commencement of the hearing but were unsuccessful. In circumstances where the respondent attended the preliminary conference on 29 February 2016, was notified of the hearing date and had not contacted the Tribunal regarding her inability to attend the hearing, I concluded that she had decided not to attend.
Section 44 of the ACT Civil and Administrative Tribunal Act 2008(the ACAT Act) sets out the Tribunal’s options, when a party fails to appear at the time set for the hearing of an application. It provides:
44 Procedure in absence of party
(1) This section applies if, at the time set for the hearing of an application, a party fails to appear either personally or by a representative.
(2) The tribunal may—
(a)     order that the application be set down for hearing at another time; or
(b)     order that stated other steps be taken before the hearing proceeds as the tribunal directs; or
(c)     adjourn the hearing; or
(d)     proceed with the hearing in the absence of the party either generally or in relation to any relief claimed in the application; or
(e)     if the party is the applicant—dismiss the application; or
(f)     if the party is not the applicant or respondent—remove the party from the application.
In this case, where I was satisfied that the respondent was aware of the hearing date and had elected not to attend, I proceeded with the hearing. Mr Kozaric agreed with that course.
Ex parte hearing
In response to my concerns about deficiencies in the applicant’s evidence, as discussed below, Mr Kozaric submitted:
before we get into that, isn’t it the case that if the respondent does not wish to defend the application that’s deemed that she doesn’t have any defence to present.
The submission appeared to be that because of the respondent’s non-attendance, the Tribunal could and should make the orders that the applicant sought without having to consider evidence that proved the claim.
The submission, with respect, displayed a misunderstanding of the Tribunal’s process and court process generally.
Direction 43 of the ACT Civil and Administrative Tribunal Act Procedural Directions 2010 (No 1) permits an applicant to apply for default judgment where the respondent to an application does not file a response or the response is withdrawn. That is materially the same as the procedure in the courts.[1] That situation is not applicable in this case. The respondent filed a response as detailed in paragraph 5 above.
[1] Court Procedures Rules 2006, rules 1115 – 1120
I add that the pathway of default judgment is only an option. A default judgment does not entail any consideration of the evidence or the merits, and is at risk of being set aside under direction 45 of the Procedural Directions (as periodically occurs in the Tribunal), for example if the respondent later gives good and sufficient reason for why a response was not filed.
Another option, even where a response has not been filed, is to proceed with the hearing and to call evidence in support of the claim.
Where a response has been filed, as in this case, default judgment is not available. The options are those set out in section 44 of the ACAT Act set out above.
In my view, where the Tribunal proceeds with a hearing under section 44(2)(d) of the ACAT Act, it remains necessary for an applicant to prove their case. The ‘evidentiary bar’ may not be high in the absence of evidence to the contrary, but it is still incumbent on the applicant to provide sufficient evidence referenced to the applicable law to prove their claim.[2]
[2] MY Distributors Pty Ltd v Omao Pty Ltd (1992) 36 FCR 578
In Banque Commerciale SA (In Liquidation) v Akhil Holdings Ltd (1990) 169 CLR 279, the High Court per Toohey J (referring to the Supreme Court Rules 1970 (NSW)) said:
Part 34, r.5(1) of the Rules deals expressly with the position if, when a trial is called on, "any party is absent". Rule 5(1)(b) empowers the Court to "proceed with the trial generally or so far as concerns any claim for relief in the proceedings". The plaintiff may prove his claim so far as the burden of proof lies on him; having done so, he is entitled to the relief claimed and to any relief consistent therewith: Barker v. Furlong (1891) 2 Ch 172; Gee v. Bell (1887) 35 ChD 160; Stone v. Smith (1887) 35 ChD 188; Jamaica Railway v. Colonial Bank (1905) 1 Ch 677. The character of the trial does not alter because of the defendant's absence. (emphasis added)
The rule considered by the High Court is materially identical to section 44(2)(d) of the ACAT Act. It also accords with rule 1505 of the Court Procedures Rules ACT, which provides:
If a defendant does not appear when the trial starts, the plaintiff may call evidence to establish an entitlement to judgment against the defendant in the way the court directs.
The Tribunal is of course not bound by the Court Procedures Rules, which apply to proceedings in the Supreme Court and the Magistrates Court.[3]
[3] Court Procedures Rules, rule 4
Section 23 of the ACAT Act provides instead:
The tribunal may decide its own procedure in relation to a particular matter in a hearing or a step in dealing with an application if no procedure is prescribed under this Act or an authorising law for the application or the rules.
Also, the objects of the ACAT Act, as set out in section 6, require access to the Tribunal to be “simple and inexpensive” and “that applications to the Tribunal are resolved as quickly as is consistent with achieving justice.”[4]
[4] Section 6(b) and (c)
However in my view, when determining matters of procedure, particularly matters that concern procedural fairness to the parties and consistent with achieving justice, the Tribunal may properly refer to the Court Procedures Rules as a guide to an appropriate way to proceed. This is particularly so in civil dispute applications, where the Tribunal has under section 22 of the ACAT Act:
the same jurisdiction and powers as the Magistrates Court has under the Magistrates Court 1930, part 4.2 (Civil jurisdiction).
These considerations persuade me that the need to achieve justice at a Tribunal hearing obliges an applicant to prove their case irrespective of the non-attendance of the respondent. It is illogical that this is required in the courts but such a fundamental aspect of procedural fairness would not be required in the Tribunal.
I turn then to the question whether the applicant has proved its case.
The applicant’s claim
The balance owing under the first invoice is easily dealt with. The applicant tendered an email from the respondent dated 24 October 2015 that states among other things:
I am more than willing and not disputing the amount of $2,118.30 be collected from me.
The only issue raised in the respondent’s response is whether the amount should be paid under a plan of weekly payments. The Tribunal received no evidence regarding this issue, and accordingly is not persuaded that it should order the debt be paid in this manner or in any variation of it. Accordingly, the Tribunal is satisfied it should order this amount be paid within 28 days in the ordinary way. If the respondent does not comply and the applicant takes enforcement action in the Magistrates Court, questions concerning a payment plan can be dealt with in that context.
The amount owing under the second invoice is more difficult.
Mr Kozaric submitted:
Basically there was a written agreement which was signed by both parties, which was actually entered into by both parties and which was sent to the respondent on about 4 March [2014]. (emphasis added)
That submission was contrary to the evidence. The costs agreement tendered in evidence was not signed by anyone.
Mr Kozaric then submitted:
That wasn’t signed but it doesn’t have to be signed to be accepted. It was accepted by conduct because the respondent then continued using us after this, after receiving the costs agreement. (emphasis added)
That submission too was contrary to the evidence. The applicant sent the costs agreement to the respondent under cover of an email dated 4 March 2014, but to an incorrect email address. In answer to my inquiry, Mr Kozaric could not produce any evidence, direct or otherwise, that the respondent ever received the costs agreement.
He then submitted “She did know about it”, but (again) could not produce any evidence to that effect.
In Pires v DibbsBarker Canberra Pty Ltd [2014] ACTSC 283 Refshauge J commented on the law concerning acceptance of a costs agreement by conduct. At [35] said:
While it is correct to say that a costs agreement may be made notwithstanding that the written agreement is not signed, there must be relevant conduct, specified in the agreement (s 282(4)(c) of the Legal Profession Act), such as continuing to instruct the lawyers after receipt of the agreement to constitute an acceptance of the offer contained in the agreement . There was, however, no such conduct in this case. Thus, there was no binding costs agreement in this case.
Where there was no evidence to show that the respondent ever received the costs agreement or knew anything about it, I am not persuaded that there was acceptance of it by conduct.
The absence of a costs agreement does not preclude the applicant from recovering its fees for work done. In Pires v DibbsBarker at [36] Refshauge J continued:
… costs can be claimed without a costs agreement. Even if the costs claimed were calculated in accordance with the costs agreement, they are still liable to be assessed by the Supreme Court if challenged by Mr Pires. That they were calculated in this way does not prevent them from being fair and reasonable even if there is no costs agreement or the agreement is set aside: s 288(6) of the Act. As I have noted above, there was no request by Mr Pires for the costs to be assessed by the Supreme Court under the Legal Profession Act, though he may since have done so.
In this case, as in Pires v DibbsBarker, there was clear evidence of a contract under which the respondent retained the applicant to provide her with legal services. Her agreement to pay the first invoice for those services, and a file note of a conversation with her after receiving the first invoice that she was “happy [for the applicant] to continue to act” is clear evidence of a recognition that she would have to pay fees for the applicant’s legal services. There was, therefore, good consideration for the contract of retainer. In the absence of a costs agreement, the question arises as to what those fees should be. This too was dealt with in Pires v DibbsBarker at [63] where Refshauge J said:
It seems to me that, on the evidence, there was a contract of retainer. The terms may not have been those set out in the costs agreement; instead there may have been what may be regarded as the “statutory terms”, that the fees be fair and reasonable (s 300(1)(c) of the Legal Profession Act).
For this reason, in my view the respondent was contractually required to pay the applicant’s fair and reasonable costs for the legal services it provided.
For several reasons, I am satisfied that the fees rendered in the second invoice were fair and reasonable.
First, the applicant provided with the second invoice a chronology itemising the work done on each of the relevant dates. I also received in evidence copies of numerous letters, file notes and other documents which evidence the work done by reference to the chronology. Read together, the chronology and the documents satisfy me that the fees were within the range of what may properly be regarded as fair and reasonable.
Second, the evidence makes clear that the respondent was aware of the fees charged under the first invoice and the work described in that invoice, and then instructed the applicant to continue to act. Implicit in that action was her acceptance that the scale of fees under the first invoice were fair and reasonable. That scale was markedly the same with the second invoice.
Third, in her response to the application filed in the Tribunal the respondent does not allege that the fees were not fair and reasonable. Rather, she contends that “no further work was ever performed” and that she had been “charged for lawyers’ mistakes”. That is a materially different claim from a claim of excessive fees.[5]
[5] Williams Love & Nicol Lawyers Pty Ltd v Wearne [2016] ACAT 18
My conclusion that the fees were fair and reasonable does not entail any assessment of quantum. Rather, it is a subjective conclusion that the amount claimed under the second invoice was within the range of what can be properly regarded as fair and reasonable and therefore payable in accordance with the ‘statutory term’ of the contract of retainer. The Tribunal does not have jurisdiction to assess costs in the sense of arriving at a precise figure as to the ‘fair and reasonable’ costs that are payable. An assessment of that kind is exclusively the work of the Supreme Court. The respondent has never sought a costs assessment.
The Tribunal did have jurisdiction to hear the respondent’s claim that the applicant had not done any further work or made mistakes, in the sense of being a breach of the contract of retainer, as opposed to a claim that the fees were unfair or unreasonable.[6] However, the respondent did not appear or present any evidence in support of that claim. Accordingly, I reject it.

Conclusion

[6] Ibid

For these reasons, I am satisfied that the respondent owes the sum of $7,347.70 as a debt due under the contract of retainer. I have therefore not needed to consider the alternative grounds upon which the applicant seeks relief.
The applicant seeks interest on the debt to the date of my decision. Under section 22 of the ACAT Act, the Tribunal has “in relation to civil dispute applications, the same jurisdiction and powers as the Magistrates Court.” These powers include the power to award interest up to judgment and interest after judgment under rules 1619 and 1620, respectively, of the Court Procedures Rules 2006.
For interest up to judgment, under rule 1619(1)(a)(i) of the Rules, the Tribunal may set the rate of interest that “it considers appropriate”. The applicant sought interest pursuant to the costs agreement. I reject that claim where the costs agreement was not enforceable. However, rule 1619(5)(b) permits the Tribunal to set a rate of interest “having regard to the rate of interest applying, from time to time, under schedule 2, part 2.1 (interest up to judgment)” of the Rules. Under clause 2.2 of schedule 2, the rate of interest up to judgment for a period after 30 June 2010 is “the rate that is 4% above the cash rate last published by the Reserve Bank of Australia” during six monthly periods.
Referenced to that changeable six monthly rate, the Tribunal orders the respondent to pay interest on the balance owing under the first invoice ($2,118.30) from 26 August 2014, being $256.02, and the amount owing under the second invoice ($5,229.40) from 2 October 2015, being $264.34.
The Tribunal also orders the respondent to pay the filing fee of $280.
………………………………..

President G C McCarthy

HEARING DETAILS

FILE NUMBER:	XD 51/2016
PARTIES, APPLICANT:	Elringtons Pty Ltd
PARTIES, RESPONDENT:	Antoinette Dee
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	Mr D Kozaric, Elringtons
SOLICITORS FOR RESPONDENT	N/A
TRIBUNAL MEMBERS:	President G C McCarthy
DATES OF HEARING:	23 May 2016