Etl v Lennon Settle (a firm)

[2005] VSCA 272

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 3752 of 2004

KARL ETL	Appellant
v.
LENNON SETTLE	Respondent

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JUDGES:	ORMISTON, CHARLES and ASHLEY, JJ.A.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	21 November 2005
DATE OF JUDGMENT:	21 November 2005
MEDIUM NEUTRAL CITATION:	[2005] VSCA 272

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Solicitors – Claim for fees and disbursements – Issues not raised below sought to be raised on appeal – No issue of general significance.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr G. Nash, Q.C.	Goldsmiths
For the Respondent	Mr P.D. Corbett	Lennon Settle Mazzeo

ORMISTON, J.A.: 

1  This appeal arises from a proceeding in which the respondent firm, Lennon Settle, brought proceedings for the recovery of its professional fees and disbursements to counsel while acting as solicitors for the appellant, Mr Etl in litigation between the appellant and his former wife in the Family Court.  By way of answer, the appellant now alleges breach of his contract of retainer with the respondent firm and that the respondent had acted negligently in carrying out its professional duties, in particular, by the alleged wrongful termination of the retainer about a month before the final hearing of the Family Court proceedings.  That termination was in part due, so far as one can gather, to a refusal by the appellant to see to the payment of counsel's fees in advance.  The ground which is presently made and which is the principal basis, or one of the three principal bases, for the appeal, was that the agreement of 12 July and an accompanying deed of charge constituted an entire contract and that, because of the respondent's conduct, the appellant was not liable upon that entire contract.

2  The present action proceeded in the County Court on some seven sitting days and in the result the respondent recovered all the fees and disbursements except for a relatively minor sum in respect of junior counsel's fees.  In addition the appellant's counterclaim was dismissed.  As a result, judgment was entered in the sum of $87,488.98 together with some $14,127.06 interest.  The amount of the judgment, including the relevant amount of interest, exceeded an amount which the respondent as plaintiff offered to accept by way of compromise in the action so that there was, after further argument, an order for costs against the appellant which included an order for costs on an indemnity basis from the time for acceptance of the offer up to the time of judgment.

3  Although the notice of appeal contained some 21 grounds, the appellant's argument raises effectively only three matters; the other grounds were not pursued.  It is said in the first place that the retainer contract was an entire contract which required the solicitor to complete its work for the appellant before becoming entitled to recover payment and that in the circumstances there had been an unjustifiable termination of that retainer before the Family Court proceedings were heard, which took place without reasonable notice to the appellant and otherwise without any good cause, such that there was a total failure of consideration.  Secondly, it is said that it was not open on the evidence for the judge to include within the judgment sum the fees or disbursements paid by the respondent to counsel.  Thirdly, it has been argued that the order for indemnity costs was inappropriate in that the learned judge failed to exercise his discretion by taking into account the fact that the award of costs was being made in favour of a firm of solicitors in respect of effectively its own professional costs.

4  Otherwise, the facts and circumstances leading to this appeal are more than adequately set out in the admirable judgment of Judge Howie given in the County Court on 14 July 2004, together with the reasons he subsequently gave for awarding indemnity costs which appear in the transcript at pages 437 to 454, especially at 449 to 451.  The matter and the issues raised by the appeal are of no general significance for they do not raise matters of general principle other than in the context of their application to the particular facts of this case.  I had thought of appending the judge's excellent reasons to this judgment but the parties are fully aware of the circumstances and of what appears in his Honour's reasons so that I do not think that any good purpose would be served by taking that course or by otherwise repeating or summarizing those facts.[1]

[1]The judgment can, in fact, be read on the County Court website sub. nom., Settle v. Etl (4 July 2004).

5  As to the arguments advanced on behalf of the appellant, they can be dealt with similarly, for, with one exception, each of the matters raised at the trial and on appeal was carefully considered by the learned judge and dealt with in detail in his judgment, which again I see no reason to repeat for the same reasons.  The principal exception to this is that the first general issue argued on appeal appears to raise an issue which was not pursued at the trial, namely the contention that this was an entire contract and that there was an absence of reasonable notice or of any other good cause for terminating the appellant's retainer in December 2002.  The appellant can proffer no explanation as to why the matter was not pursued before the learned judge who fairly and clearly identified the issues raised at trial by counsel who then appeared on behalf of the appellant, and which accurately represented what counsel had stated in his opening of the appellant's case.  The matter now raised is essentially a question of fact and although the general circumstances seem clear on the evidence, the choice not to pursue the point at first instance should and does preclude the appellant from raising it afresh on this appeal.

6  I should say that Mr Nash argued the case as well as could be expected having regard to the difficulties which faced him and having regard to the way in which the matter was put before the trial judge.  It was a complex and detailed trial and most matters, for the most part, were raised, but this particular matter relating to the entire contract and the alleged breach by the respondent was not pursued.  It is unnecessary to canvass the many authorities as represented by a series of cases in the High Court over the last 30 years which deny an appellant the right to raise a matter which has not been properly pursued at trial unless it is a mere question of law of the kind where the factual basis is not of a kind which "could or might possibly have been met by rebutting evidence or cross‑examination" at the trial, as the test laid down by Gleeson, C.J., McHugh, J. and Gummow, J. in Whisprun Pty Ltd v. Dixon[2].

[2](2003) 77 ALJR 1598 at 1608 [51].

7  Although counsel argued strenuously that the construction of the retainer was a matter of law, which undoubtedly it is, the issue cannot be raised without regard to where that construction would lead and the construction, if correct, would have required relevant facts to show what had been done or what had not been done by the parties at the relevant time, in alleged breach of that term of the contract of retainer.  The evidence as to those matters was not led at the trial, so that this is not a case outside the class of case represented by Whisprun Pty Ltd v. Dixon, particularly as there was no evidence of the precise events leading to and the consequences flowing from the alleged breach of the retainer.  Whatever be the legal basis for the appellant's claims, the issue as to such a breach must necessarily depend upon the facts as led at the trial and the totality of the relevant facts was simply not adduced in any form of evidence from which this court can reach any conclusions.  There can, therefore, be no basis for allowing the appeal on this aspect of the ground based on the retainer which was stated to cover grounds 1 to 7, 9, 10, 13 and 14.  No further argument was (or could have been) put to the court on those grounds and consequently, the relevant grounds must be rejected.

8  The second general set of grounds now relied upon relate to the finding that the respondent was entitled to include as disbursements the fees paid to counsel.  The judge, again, very carefully examined this issue and all aspects of it.  He distinguished the case of Mr Indivino's fees and rejected the respondent's claim for them.  On the other hand, he carefully and correctly showed why the fees of the other counsel retained were properly claimed as disbursements.  Before this court, counsel endeavoured, as best he might, to satisfy us that the fees related to a period before the respondent firm was retained by his client but, on more careful examination of the material, it appeared that the fees in question were in fact fees incurred after the appellant had first retained the respondent for the purposes of the Family Court proceedings.  It is unnecessary to say more than that I would endorse the learned judge's reasoning.  Those grounds which appear to cover grounds 8 and 14 should likewise be rejected.

9  Finally, a series of grounds have been directed towards the order made for indemnity costs on the ground that the judge failed to exercise his discretion properly because the respondent as plaintiff was a solicitor litigant.  In this case, it is clear, of course, that the respondent is a firm of solicitors.  From various remarks made in the course of the transcript, it would seem that the judge was aware of the courts’ approach to solicitors’ costs, but in truth, no argument to the effect that no order of this kind, that is for indemnity costs, should be made because of the reluctance of courts to make orders in favour of solicitors when they are their own

clients, as it were, was put to the learned judge, although it can be said that he saw that some restraint would have to be exercised, presumably upon taxation, which is undoubtedly the case.  The point as to these costs, not having been raised below, in my opinion, cannot be raised here in the way that counsel has endeavoured to do so.  The judge's reasons show that he took carefully into account all relevant factors.  He rejected a claim for indemnity costs because of the appellant's conduct before the offer was made and carefully considered the discretion relating to the right of the respondent to costs based on the offer of compromise.

10  In my opinion, the decision reached and the reasons given by the judge show that he applied his mind correctly to the issues raised before him.  These grounds should also be rejected. 

11  The other grounds raised in the notice of appeal, which are set out in grounds 11, 12, 15 and 19, were stated in the outline of submissions as grounds which would not be pursued.  In the result, notwithstanding Mr Nash's urgent and earnest submissions, the appeal should be dismissed. 

CHARLES, J.A.: 

12  I agree that this appeal should be dismissed for the reasons given by Ormiston, J.A.

ASHLEY, J.A.: 

13  I agree with the learned presiding judge for the reasons his Honour has given that the appeal should be dismissed. 

ORMISTON, J.A.: 

14  The order of the court, therefore, is that the appeal be dismissed.

(Discussion ensued re costs including a claim for indemnity costs.)

ORMISTON, J.A.: 

15  In the circumstances, the court is of the opinion that no such order should be made.  However, there will be an order of the conventional kind on a party/party basis.  The appellant will pay the respondent's costs of and incidental to the appeal.

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