Equuscorp Pty Ltd v Wilmoth Field Warne (No 3)

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IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL LIST

No. 6284 of 2003
F5559

EQUUSCORP PTY LTD (ACN 006 012 344)	Plaintiff
v
WILMOTH FIELD WARNE (a firm)	Defendant

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JUDGE:	BYRNE J
WHERE HELD:	Melbourne
DATE OF HEARING:	1, 2, 3, 4 December 2003, 26 February, 25 March 2004
DATE OF JUDGMENT:	25 June 2004
CASE MAY BE CITED AS:	Equuscorp Pty Ltd v Wilmoth Field Warne (No. 3)
MEDIUM NEUTRAL CITATION:	[2004] VSC 164	First Revision: 11 October 2005

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Barristers and solicitors – contract – fees agreement – construction – implied terms – whether breaches – whether agreement terminated – solicitor's entitlement to fees following termination.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr F. George A Beaumont QC with Mr S. Maiden	Phillip Kotsanis
For the Defendant	Mr R. M. Garratt QC with Mr Mark Moshinsky	Wilmoth Field Warne

Table of Contents

Introduction......................................................................................................................................... 1

The terms of the Deed of Costs....................................................................................................... 5

Equus Implied Terms................................................................................................................... 8
WFW Implied Terms as to the proceeds of Litigation............................................................ 9
Equus Implied Term as to the Time for Costs Payment....................................................... 14

The Beagle Litigation...................................................................................................................... 17

New South Wales Supreme Court Proceeding...................................................................... 18
WA Supreme Court Proceeding............................................................................................... 18
Western Australian Federal Court Proceeding...................................................................... 19
The Targridge Proceeding......................................................................................................... 19
The Bailey Proceeding............................................................................................................... 20
The cl. 5.1(j) Claim....................................................................................................................... 24

WFW's Breaches of the Deed of Costs......................................................................................... 28

The Beagle Settlement Money................................................................................................... 28
The Failure to Cease Work........................................................................................................ 38
The Failure to Conduct File Review Meetings and to Provide Task Lists........................ 41
The Worts Litigation................................................................................................................... 46

Termination of the Deed of Costs................................................................................................. 48

The contractual provisions........................................................................................................ 49
Termination by Equus on 27 May 2002................................................................................... 54
Termination by Equus on 2 June 2003..................................................................................... 56
Termination by Equus on 25 August 2003.............................................................................. 57
Termination by WFW on 3 June 2003...................................................................................... 58
Termination by WFW on 29 May 2003.................................................................................... 62
Conclusion................................................................................................................................... 64

WFW's Entitlement to Legal Fees.................................................................................................. 64

The Beagle matter....................................................................................................................... 65
Clause 17(b).................................................................................................................................. 66
Clause 16...................................................................................................................................... 66
Waiver........................................................................................................................................... 67
Termination under cl. 2.............................................................................................................. 68
Quantum meruit......................................................................................................................... 68
Other matters............................................................................................................................... 69

WFW Disbursements....................................................................................................................... 70

HIS HONOUR:

1. The plaintiff, Equuscorp Pty Ltd (“Equus”), is a general financier.  Since 1992, when all of its shares were purchased by the family interests of its present managing director, Nicola Russo, Equus has concerned itself with recovering debts and enforcing rights under other choses in action stemming from its past lending activities.  This has involved it in much litigation and, for the purpose, it has had need of professional legal assistance.  This assistance was, according to Mr Russo, provided up to July 1999 by its in-house “litigation department comprising of 5 solicitors, a barrister and support staff”.  From about 1998, Equus has also retained outside solicitors, including the defendant Wilmoth Field Warne (“WFW”).

1. In the course of their professional relationship, Equus and WFW entered into three formal retainer agreements whereby WFW in some way shared with its client the risks of the litigation it was conducting on the client's behalf.  The first is contained…