Hurst-Meyers v Aulich Civil Law Pty Ltd ACN 155 746 777 (Appeal)
[2020] ACAT 93
•13 November 2020
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
HURST-MEYERS v AULICH CIVIL LAW PTY LTD ACN 155 746 777 (Appeal) [2020] ACAT 93
AA 10/2020 (XD 694/2019)
Catchwords: APPEAL – civil dispute – unpaid legal fees – client did not sign two of four fee agreements provided for different stages of Supreme Court proceedings – whether fee agreements complied with s 282 of Legal Profession Act 2006 – whether by his conduct the client had accepted the unsigned fee agreements – whether client had given instructions to cap legal fees – whether solicitors had exceeded fee cap – whether solicitors had been negligent in advice to client about Supreme Court proceedings – whether Original Tribunal erred in relation to those issues – appeal dismissed – whether an order for costs should be made in favour of respondent
Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 48, 82
Legal Profession Act 2006 s 282
Cases cited:Aulich Civil Law Pty Ltd ACN 155 746 777 v Hurst-Meyers [2020] ACAT 26
Hurst-Meyers v Aulich Civil Law ACN 155 746 777 [2020] ACAT 56
Hurst-Meyers v Public Trustee and Guardian for the ACT [2018] ACTSC 61
CIC Australia Ltd v Australian Capital Territory Planning and Land Authority [2013] ACTSC 96
Smith v J&C Whyte Family Trust & Anor [2016] ACAT 132
Tribunal: President G Neate AM
Senior Member K KatavicDate of Orders: 13 November 2020
Date of Reasons for Decision: 13 November 2020
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) AA 10/2020
XD 694/2019
BETWEEN:
RALPH HURST-MEYERS
Appellant
AND:
AULICH CIVIL LAW PTY LTD ACN 746 777
Respondent
TRIBUNAL:President G Neate AM
Senior Member K Katavic
DATE:13 November 2020
ORDER
The Tribunal orders that:
1.The appeal is dismissed.
2.The respondent’s application for costs of the appeal is dismissed.
………………………………..
President G Neate AM
For and on behalf of the Tribunal
REASONS FOR DECISION
Introduction
1.The parties in this appeal were in a solicitor-client relationship. The appellant terminated the respondent’s retainer on 19 June 2017. The main issue in this appeal relates to the fees payable to the firm of solicitors in respect of legal services rendered to the appellant.
2.The respondent commenced proceedings in the ACT Civil and Administrative Tribunal seeking to recover unpaid professional fees it claimed the appellant owed. The respondent had represented the appellant in relation to proceedings in the ACT Supreme Court (the Supreme Court Proceedings) although not at the hearing. The appellant disputed that he owed the respondent any fees above $21,000 on the basis that he instructed the respondent cap its fees. By way of counterclaim, the appellant also sought to recover the full amount of professional fees and disbursements he had paid to the respondent on the ground that the respondent had given him negligent advice regarding the Supreme Court Proceedings.
3.On 21 April 2020, two members of the Tribunal (the Original Tribunal) made orders that:[1]
(a)the appellant pay the sum of $24,258.32 to the respondent;
(b)the appellant’s counterclaim is dismissed; and
(c)the respondent’s application for an order for costs is dismissed.
[1] Aulich Civil Law Pty Ltd ACN 155 746 777 v Hurst-Meyers [2020] ACAT 26
4.The appellant has appealed that decision. The appellant applied to adduce additional evidence at the hearing of this appeal. The respondent also applied, out of time, to appeal the Original Tribunal’s decision dismissing its application for an order for costs. On 17 July 2020, the President of the Tribunal refused both applications.[2]
Background
[2] Hurst-Meyers v Aulich Civil Law ACN 155 746 777 [2020] ACAT 56
5.The Original Tribunal set out the history of the relationship and dealings between the appellant and the respondent in extensive detail in paragraphs [12] to [123] of its reasons for decision.[3] The salient features of the history are as follows:
[3] Aulich Civil Law Pty Ltd ACN 155 746 777 v Hurst-Meyers [2020] ACAT 26
(a)The appellant signed two costs agreements with the respondent for legal services regarding the declaration of a trust over property in Fisher in the ACT in the name of his mother.
(b)The matter progressed from the provision of advice to the commencement of legal proceedings in the ACT Supreme Court.
(c)Two further costs agreements in respect of the Supreme Court Proceedings were given to the appellant, neither of which he signed, but the respondent continued to perform work in respect of those proceedings on instructions from the appellant.
(d)The appellant paid a total of $20,940.50 to the respondent before the retainer was terminated on 19 June 2017 by which time he had not paid the respondent’s outstanding fees of $18,515.32.
(e)The appellant denied he owed the respondent any fees beyond $20,000 because he claimed he had expressly instructed the respondent to ‘cap’ its fees at $20,000 plus GST and disbursements.
(f)The appellant represented himself in the Supreme Court Proceedings and was successful.
The grounds of the appeal and orders sought
6.In accordance with procedural directions made on 15 June 2020 by a Presidential Member of the Tribunal, the hearing of the appeal proceeded as a review of the original decision[4] unless the Appeal Tribunal ordered otherwise. It did not. The Appeal Tribunal decided the appeal by reference to the evidence before the Original Tribunal. Both parties filed written submissions in advance of the hearing.
[4] See ACT Civil and Administrative Tribunal Act 2008 section 82(b)
7.The respondent submitted that the appellant did not precisely identify questions of fact or law upon which he claims the Original Tribunal erred. The respondent also submitted, correctly, that the Appeal Tribunal is confined to reconsidering the conclusions of fact reached by the Original Tribunal on the evidence before the Original Tribunal.
8.While it is true the appellant did not articulate questions of fact or law with the precision that might be expected of someone legally qualified, it is not uncommon for this Tribunal to encounter claims or even appeals expressed in terms similar to those which the appellant has advanced in these proceedings. In those circumstances, the Tribunal endeavours to understand the essence of the claim or appeal so that it is capable of being fashioned into appropriately precise grounds or issues raised in the proceedings.
9.The Appeal Tribunal has undertaken that exercise in this appeal. Following his oral submissions, the appellant confirmed at the hearing[5] that his appeal raised the following issues/grounds.
(a)In relation to the whether there was a fee limit set, including a requirement that the respondent seek written approval from the appellant to exceed any limit set, the Original Tribunal:
(i) failed to consider properly or at all, the appellant’s evidence that a fees limit was set, including the appellant’s request that the respondent seek written approval from the appellant to exceed the limit;
(ii) erroneously rejected the appellant’s evidence which, he contends expressly provided instructions regarding the fee limit and the consent that was required;
(iii) incorrectly concluded on the evidence before it that the appellant’s express instructions were overridden by his conduct.
(b)The Original Tribunal erroneously considered and applied section 282 of the Legal Profession Act 2006 (the LPA).
(c)The Original Tribunal wrongly concluded that the respondent had not been negligent in respect of any advice given regarding the Supreme Court Proceedings.
[5] Transcript of proceedings 3 August 2020 pages 3-7
10.The Appeal Tribunal has considered the issue of whether a fee limit was set and whether any such limit was permissibly exceeded as one ground of appeal (Ground 1). We have considered the issue regarding the costs agreement and section 282 of the LPA as a separate ground (Ground 2). The final issue relates discretely to advice given by the respondent in the context of the Supreme Court Proceedings (Ground 3).
11.In addition, the appellant argued at the hearing of the appeal that Mr Doug Dawson, a solicitor employed by the respondent, breached certain provisions of the LPA by acting contrary to or inconsistently with instructions given by the appellant. This ground was not set out in the Application for Appeal dated 19 May 2020 nor in the appellant’s written submissions. The appellant was invited to identify where this ground arose on the material lodged by the appellant. None of the references and pages the appellant identified to the Appeal Tribunal related to this issue. Therefore, we do not consider such a ground arises on the material lodged by the appellant for the purposes of this appeal.
12.In relation to the orders sought by the appellant, the Notice of Appeal stated:
The original orders be set aside and the following orders be substituted with:
Ralph Hurst-Meyers be compensated as requested in this application or as the Tribunal sees fit.
13.The appellant’s written submissions sought the following:
The Appeal upheld and the former Orders dismissed.
AU [the respondent] to pay $25,000.00 compensation to RHM [the appellant] for improperly withholding RHM’s [the appellant’s] evidence.
All fees paid to AU [the respondent] be refunded to RHM [the appellant]. (emphasis added)
14.The Appeal Tribunal asked the appellant whether the claim for $25,000 compensation was before the Original Tribunal and, if so, whether there was evidence before the Original Tribunal in support of such a claim. After hearing from the appellant and reviewing the counterclaim dated 31 July 2019, we are not satisfied the claim for compensation in the appeal was before the Original Tribunal. It is not necessary to consider this issue further. For completeness, the appellant claimed that the amount sought was supported by an invoice tendered before the Original Tribunal. We have reviewed the transcript of the hearing before the Original Tribunal and we are satisfied that the invoice the appellant sought to rely upon was rejected by the Original Tribunal as it did not form part of the appellant’s counterclaim. The counterclaim was confined to repayment for fees paid to the respondent, being $20,940.50.
15.At the hearing of the appeal, the respondent made the general submission that the appellant had simply repeated the same arguments he made to the Original Tribunal.
Ground 1
16.Ground 1 captures the appellant’s contention with the Original Tribunal’s findings in respect of whether he set a fee limit and whether the respondent impermissibly exceeded that limit. In his oral submissions, the appellant stated that the Original Tribunal did not consider the proper chronological sequence of events regarding the costs agreements, his instructions and the invoices issued by the respondent. In essence, he claims that if the Original Tribunal had proper regard for his evidence and the instructions he said he gave regarding fees it should not have reached the conclusion it did. He also considers the Original Tribunal erred in finding his instructions were overridden by his conduct.
Did the Original Tribunal properly consider the appellant’s evidence and instructions?
17.As we have observed, the Original Tribunal set out in extensive detail the history between the parties. It is apparent from the Original Tribunal’s meticulous approach to the history that it paid close attention to the various documents and exchanges between the appellant and the respondent over the course of its retainer. We have been asked to decide whether the Tribunal properly considered the appellant’s evidence and the instructions he gave in order to determine whether a different conclusion should have been reached.
18.At the hearing of the appeal, the Tribunal asked the appellant whether there was anything in evidence before the Original Tribunal that was not considered in the Original Tribunal’s reasons for decision and is relevant to this appeal. The appellant did not identify any such evidence.[6]
[6] Transcript of proceedings 3 August 2020 pages 6 and 11
19.For the reasons that follow we are satisfied the Original Tribunal properly considered the appellant’s evidence and instructions. We see no basis upon which to form a different conclusion from that reached by the Original Tribunal in particular at [151] and [153]:
151. The fact that the respondent continued to give instructions in relation to the matter for many months after he received the fourth costs offer on 12 December 2016, in our view is decisive. The respondent’s conduct amounted to unqualified acceptance of the fourth costs offer and gave rise to a costs agreement which was not subject to a $20,000 ‘cap’ (final costs agreement).
…
153. For these reasons, we are satisfied that all of the work that the solicitor did from December 2016 to the end of May 2017 was done in accordance with the respondent’s instructions and was properly chargeable by the applicant.
20.We refer to some of the history to explain the conclusion we have reached.
21.In total, the respondent sent four costs agreement documents to the appellant over the course of its retainer. Each costs agreement set out the scope of works the respondent was instructed to undertake and a costs estimate for that work based on the rates charged by the respondent. The terms of those costs agreements show how the scope of the respondent’s retainer evolved over time.
22.The first costs agreement dated 25 November 2016 was signed by the appellant (CA1).[7] The matter title was “Advise on trust declaration and property transfer”. It described the scope of work under the heading “work we are instructed to do” as “review documents provided and advise in conference”. It estimated the costs for that work to be $1,500 to $2,000 plus GST plus disbursements.
[7] Exhibit A2, tab 1.1
23.The second costs agreement dated 29 November 2016 was also signed by the appellant (CA2).[8] It described the scope of work under the heading “work we are instructed to do” as “prepare brief to counsel; correspond with the public trustee; draft originating application; and appear in the ACT Supreme Court (if necessary)”. It estimated the costs for that work to be $10,000 to $20,000 plus GST plus disbursements.
[8] Exhibit A2, tab 1.2
24.The appellant contends that what occurred after this point was inconsistent with instructions he had given.
25.On 8 December 2016, the appellant and Mr Dawson exchanged emails and had two telephone conversations. The exchanges are set out at [31] to [39] of the Original Tribunal’s reasons. The appellant’s email sent at 12:04pm on 8 December 2016 relevantly states:
I meant please notify me when the total chargeable fees for both you and Jamie reach $21,000, and if this needs to be exceeded, please seek written authorisation.[9]
[9] Exhibit A2, tab 2.3
26.On 9 December 2016, the respondent provided the appellant with the third costs agreement (CA3).[10] The appellant did not sign this agreement. He says he rejected it. It described the scope of work under the heading “work we are instructed to do” as “act in ACT Supreme Court proceedings to declare the existence of a trust and advise generally”. It estimated the costs for that work to be $30,000 plus GST plus disbursements (this estimate included work completed to date).
[10] Exhibit A2, tab 1.3
27.Following this, on 9 December 2016, the appellant sent an email to Mr Dawson and the two had a telephone conversation.[11] Also, on 9 December 2016, the matter was listed in the ACT Supreme Court before Penfold J and directions to progress the matter were made. Various notices for non-party production had been issued, which after production the respondent would be required to review in order to prepare and compile the appellant’s evidence in the proceedings. The appellant was also required to file and serve evidence by 23 January 2016 which required work by the respondent.
[11] Aulich Civil Law Pty Ltd ACN 155 746 777 v Hurst-Meyers [2020] ACAT 26 at [44] and [45]
28.On 12 December 2016, the respondent provided the appellant with the fourth costs agreement (CA4).[12] It was described as an “updated” costs agreement.[13] The appellant did not sign this agreement. He says he rejected it. It described the scope of work under the heading “work we are instructed to do” as “act in ACT Supreme Court proceedings to declare the existence of a trust; and advise generally”. It estimated the costs for that work to be $53,373 including costs to date of $16,988 plus GST. It was based on a detailed costs estimate schedule included in CA4. While CA4 was for a separate stage in the matter, it differed in that the $53,373 of estimated costs was both retrospective and prospective. That is, it included an estimate of the cost of work that had been performed and work to be done, as well as counsel fees. The difference was that the estimated costs moving forward were $36,385.
[12] Exhibit A2, tab 1.4
[13] Exhibit A2, tab 2.6
29.We have concluded that CA4 was substituted for CA3, based on the discussion which took place on 9 December 2016 between the appellant and Mr Dawson and the covering email attaching CA4. In relation to the respondent’s claim for payment before the Original Tribunal, it was from this point that CA4 came into effect in terms of work that was expected to be performed in respect of the Supreme Court Proceedings, the terms of the respondent’s retainer and the appellant’s instructions and conduct.
30.By the time CA4 was sent, work to the value of $16,988 had been completed in accordance with the terms of CA2, and there was $20,000 in the respondent’s trust account. Further work was required to progress the Supreme Court Proceedings and comply with the directions made by the Court on 9 December 2016. That work was described in CA4. On the appellant’s argument, he expected that work to be performed, but for no more than $21,000 (which total included work done to date under the previous costs agreements).
31.The appellant did not deny receiving the email from the respondent on 12 December 2016 or that he saw and read the fourth costs offer. Nor did the he deny having a telephone conversation with the solicitor in the afternoon on 13 December 2016. At 2:22pm on 13 December 2016, the solicitor telephoned the appellant. The solicitor’s file note records that there was a discussion about preparation of evidence and includes the following note about costs:
R – ok to costs agreement – will transfer another $6K Jan.
32.We note that, before the Original Tribunal, the appellant denied that the words “ok to costs agreement”, recorded in the solicitor’s file note, related to the fourth costs agreement.
33.On 13 December 2016, the respondent transferred $4,274.50 from its trust account into its office account in payment of the respondent’s invoice No. 9084. The invoice was not in evidence, but the appellant did not dispute that he received it.
34.At 3:03pm on 18 January 2017, the appellant said in an email to the solicitor:
I hope you had a Merry Christmas and a good New Year. I’m still putting together the evidence and I’ll be in contact about the relatively soon. Did Margaret Reid and Stephen Whybrow also managed to generate their affidavits? Also I want to apply cost cutting measures going forward as understand a lot of the $20,000 paid to you as being used already and I don’t want to go past that amount at this stage. [Errors in original]
35.At the time he sent this email, the appellant knew, or should have known from his agreement to pay the two invoices numbered 9084 and 9283 dated 13 and 20 December 2016, respectively, that the money he had paid into the respondent’s trust account was close to exhausted.
36.To put the above in context, on 8 December 2016 the solicitors for the Public Trustee and Guardian (PTG) wrote to the respondent. A copy of that correspondence is not in evidence. On 19 January 2017, the respondent wrote to the PTG seeking orders in favour of the appellant by consent.[14] The solicitors for the PTG responded on 23 January 2017 advising that it intended to reserve its position until such time as the parties completed their investigations and all supporting evidence had been lodged.[15]
[14] Exhibit R5 tab 17
[15] Exhibit A2 tab 18
37.As a consequence of this exchange it was apparent the matter was proceeding to hearing and further evidence was required to support the application.
38.Each costs agreement was in the same general terms using a standard form. They are indistinguishable apart from what is described in each as “work we are instructed to do” and the estimated cost for that work.
39.The appellant submitted that, based on his emails at 12:04pm on 8 December 2016 and at 3:03pm on 18 January 2017, the Original Tribunal should have accepted that he had instructed the respondent he was only paying a total of $21,000 and that amount was only to be exceeded with his approval. He says he gave no such approval.
40.However, as at 18 January 2017 the appellant knew the respondent was continuing to work on preparing the evidence which was due on 13 February 2017. He expressly inquired as to the status of that work on 18 January 2017. Further, the PTG’s position as at 23 January 2017, a copy of which was sent to the appellant on 23 January 2017[16] made it clear the evidence was required. What followed was the respondent’s preparation of that evidence including affidavits and briefing counsel. This is supported by emails from the solicitor to the appellant on 30 January 2017,[17] and between 3 and 9 February 2017.[18] On 7 February 2017,[19] a file note of a telephone call with the appellant records:
Ralph will amend words slightly email to DD then DD will amend + Ralph in to swear.
Invoices – Ralph will have $8k w[ith] in a week to pay.
Then will have access to “$1.5mil” w[ith] in a month it will be no problem.
[16] Exhibit R5 tab 18
[17] Exhibit R5 tab 19
[18] Exhibit R5 tab 20
[19] Exhibit A2 tab 3.8
41.This was not the last promise to pay. Similar statements to payment being made by the appellant and a ‘big pay out’ were made on 3 March 2017,[20] 5 April 2017,[21] and 1 June 2017.[22]
[20] Exhibit A2 tab 3.9
[21] Exhibit A2 tab 2.11
[22] Exhibit A2 tab 2.14
42.There were also further exchanges regarding the evidence and preparation for hearing after 27 March 2017 when the PTG filed its evidence. These occurred on 30 March 2017,[23] 31 March 2017,[24] 5 April 2017,[25] and 31 May 2017.[26]
[23] Exhibit A2 tab 3.10
[24] Exhibit A2 tab 2.9
[25] Exhibit A2 tab 2.10
[26] Exhibit A2 tabs 2.13 and 2.14
43.The combined effect of the exchanges set out at paragraphs [40] to [42] above is that the appellant instructed the respondent to do things which were all encompassed by the scope of CA4.
44.The appellant’s argument is, in essence, that he expected to obtain a wide range of legal services for no more than $21,000 and that he could do so by not signing CA4.
45.Realistically, and given the terms of CA4, that was not possible. The respondent had set out the work to be performed in CA4, and the estimated cost of such work encompassed by CA4. The appellant’s ongoing instructions and promises to pay were consistent with CA4. CA4 did not have to be signed by the appellant. It could be accepted by the appellant continuing to provide instructions. Consequently, the appellant’s argument must fail. Whether he considered he had rejected CA4 by reason of his instruction that fees be ‘capped’ at $20,000 or regarded it to be a counter-offer to the scope of CA4 is irrelevant. The terms upon which the respondent offered to provide legal services and the means by which that offer might be accepted were clear. This is discussed further below.
46.We therefore agree with the conclusions reached by the Original Tribunal and do not find that the Original Tribunal failed to properly consider the appellant’s evidence or erroneously rejected it.
Did the Original Tribunal err in finding the appellant’s instructions were overridden by his conduct?
47.The appellant submitted that he only signed CA1 and CA2. He disagreed with the Original Tribunal’s finding that, by virtue of his conduct in continuing to provide instructions to the respondent, he accepted CA3 and CA4. He argued that because he had given instructions to cap the fees at $21,000, any further work that was required to be done was to be performed within that limit. He characterised his instructions as “not instructing Mr Dawson to stop work, but instructing him to not charge any more fees beyond $21,000”. He submitted that any relevant conduct on his part was the act of not signing CA3 and CA4. He considered the only relevant instruction he gave was to limit the fees.
48.We are satisfied that:
(a)each of the costs agreements was for a separate stage in the matter;
(b)CA4 encompassed progressing the Supreme Court Proceedings;
(c)the instructions given by the appellant in the period after 12 December 2016 were consistent with the work to be performed under CA4; and
(d)any instruction to ‘cap’ the fees was overridden by the appellant continuing to give instructions to perform the work covered by CA4 well after he gave such instructions and after he was [or should have been] aware that the amount he owed the respondent exceeded $20,000.
49.The estimate of fees referrable to such work was clearly set out in CA4. Any notion that the work under CA4 was to be performed for no more than $21,000 was inconsistent with the terms on which the respondent offered to provide the services and the history of the services provided previously.
50.We do not consider the Original Tribunal erred in concluding that the appellant’s express instructions were overridden by his subsequent conduct.
51.For these reasons Ground 1 fails.
Did the Original Tribunal incorrectly interpret and apply section 282 of the LPA? (Ground 2)
52.Section 282 of the LPA sets out the legal requirements governing a costs agreement. It states:
282 Making costs agreements
(1)A costs agreement may be made—
(a)between a client and a law practice retained by the client; or
(b)between a client and a law practice retained on behalf of the client by another law practice; or
(c)between a law practice and another law practice that retained that law practice on behalf of a client; or
(d)between a law practice and an associated third party payer.
(2)A costs agreement must be written or evidenced in writing.
(3)A costs agreement may consist of a written offer in accordance with subsection (4) that is accepted in writing or by other conduct.
NoteAcceptance by other conduct is not permitted for conditional costs agreements (see s 283 (3) (c) (i)).
(4)The offer must clearly state—
(a)that it is an offer to enter into a costs agreement; and
(b)that the offer can be accepted in writing or by other conduct; and
(c)the kind of conduct that will be acceptance.
Example for par (c)
continuing to instruct the law practice in the matter after receiving the offer
NoteAn example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132).
(5)Except as provided by section 300A (Assessment of costs by reference to costs agreement), a costs agreement cannot provide that the legal costs to which it relates are not subject to costs assessment under division 3.2.7.
Note If it attempts to do so, the costs agreement will be void (see s 287 (1)).
(6)A reference in section 288 (Setting aside costs agreements) and in any prescribed provisions of this part to a client is, in relation to a costs agreement that is entered into between a law practice and an associated third party payer as mentioned in subsection (1) (d) and to which a client of the law practice is not a party, a reference to the associated third party payer.
53.It is clear from section 282(3) that a costs agreement containing a written offer may be accepted in either of two ways: in writing or by other conduct. For the purposes of acceptance by conduct, any such offer must clearly state the kind of conduct that will be acceptance.
54.As mentioned earlier, the costs agreements were clear as to their terms and the manner in which they could be accepted. All four costs agreements contained the following:[27]
You may accept this offer either by signing and returning this document (or a copy of this document) to us, or by giving or continuing to give us your instructions in this matter after you receive this offer – in which case you will be deemed to have accepted the terms of this offer.
[27] Exhibit A2 tabs 1.1 – 1.4
55.We are satisfied that this statement in each costs agreement complies with the requirements of section 282(4).
56.Having regard to the conduct of the appellant referred to above at [40] to [42], we are satisfied that such conduct constituted acceptance of the offer as provided in section 282(3) and the terms of each costs agreement.
57.Critically, the appellant did two things. First, he continued to provide instructions to the respondent to progress the matter and he expected the respondent to take steps consistent with those instructions. Second, he promised payment of outstanding invoices together with payment of future fees to be incurred. He did this on 5 April 2017 and 1 June 2017.[28]
[28] Exhibits A2 tab 2.11 and tab 2.14
58.We therefore conclude the Original Tribunal did not err in its interpretation and application of section 282 of the LPA. Ground 2 of the appeal fails.
Did the Original Tribunal wrongly conclude the respondent was not negligent in the advice given to the appellant in relation to the Supreme Court Proceedings? (Ground 3)
59.The appellant claims he is entitled to a refund of the fees paid to the respondent for work performed in relation to the Supreme Court Proceedings because he was advised incorrectly that he would not succeed and yet he ultimately succeeded without legal representation. He characterised the respondent as being unskilled in the law governing trusts such that the Originating Application drafted by the respondent required amending. He claimed further evidence was not required because the Affidavit of Eileen Hurst-Meyers sworn on 2 October 2008 was sufficient. He also submitted that the respondent advised him to brief Mr Steven Whybrow of Counsel to appear in the Supreme Court Proceedings, which was wrong as Mr Whybrow was the appellant’s ‘star witness’. This last allegation was not argued before the Original Tribunal and not particularised in the appellant’s material in the appeal.
60.The respondent submitted that, regardless of any amendments subsequently made to the Originating Application, the relief sought remained the same. The appellant was granted that relief by the Court. Therefore, any defects in the drafting were inconsequential. Further, the respondent submitted that much of the evidence relied upon by McWilliam AsJ in granting the relief sought came to light at the last minute (in the course of the hearing in the Supreme Court), despite previous and repeated advice from the respondent regarding the evidence that was required.
61.We are not satisfied the respondent’s advice regarding prospects was incorrect. At paragraphs [78] and [100], the Original Tribunal set out the respondent’s advice to the appellant regarding prospects and the evidence required. The respondent’s advice regarding poor prospects of success is qualified by the need to obtain further evidence in support of the appellant’s claim. In other words, the respondent advised that the appellant’s prospects of succeeding were dependent upon obtaining further evidence and a failure to do so could result in the appellant losing.
62.As he did before the Original Tribunal, the appellant argued on appeal that the only evidence required was the Affidavit of Eileen Hurst-Meyers. We disagree. At paragraphs [9] and [10] of her Honour’s judgment,[29] reproduced at paragraph [162] of the Original Tribunal’s reasons, McWilliam AsJ stated that the “totality of the evidence filed by the appellant established his beneficial interests in the Fisher property”. This was more than the affidavit of Mrs Hurst-Meyers. It is impossible to know whether the appellant would have succeeded had the additional evidence not been forthcoming. It is, however, apparent from her Honour’s judgment that she relied upon more than that affidavit to find, on the balance of probabilities, that a beneficial interest lies with the appellant.
[29] Hurst-Meyers v Public Trustee and Guardian for the ACT [2018] ACTSC 61
63.The respondent identified the importance of the evidence as early as 23 January 2017 following correspondence from the PTG set out above at paragraph [36]. This was after the hearing before Penfold J on 9 December 2016 and after the PTG had declined to consent orders in the appellant’s favour. It was apparent that evidence supporting the appellant’s case was critical to his success and the PTG’s position. The evidentiary dilemma became apparent after the PTG filed and served its evidence on or about 27 March 2017. At this point the respondent raised its concerns as to the sufficiency of the evidence with the appellant. It did so in emails dated 29 and 31 March 2017.[30] On 30 March 2017, the appellant also provided commentary and instructions regarding the PTG’s evidence in an email to the solicitor and Mr Whybrow.[31]
[30] Exhibit R5 tab 23 and Exhibit A2 tab 2.9
[31] Exhibit R5 tab23
64.The respondent’s advice on 31 March 2017 regarding additional evidence was mainly procedural advice as opposed to specific advice requiring knowledge of the law of trusts. The problem with the state of the appellant’s evidence was illuminated by the evidence relied upon by the PTG and the respondent reacted properly by advising the appellant how the evidentiary deficiency could be remedied. It gave that advice on several occasions. After 29 March 2017, the respondent’s advice could not be regarded as incorrect. It was apparent the appellant’s prospects of success were poor in the absence of additional evidence.
65.We are not satisfied that the Original Tribunal erroneously rejected the appellant’s counterclaim based on the evidence before it. The Original Tribunal correctly concluded the respondent was not negligent in respect of advice given to the appellant. Ground 3 of the appeal fails.
Costs
66.The respondent sought costs of the appeal in the event the appellant was unsuccessful. The order was sought on the basis that the whole appeal was run in the same way as the defence to the original claim. The respondent submitted that the appellant highlighted no error of fact or law and in running an appeal that was hopeless, the appellant caused obstruction for the purposes of section 48 of the ACT Civil and Administrative Tribunal Act 2008 (the ACAT Act). The respondent further submitted that this was consistent with decided case law. The respondent did not refer the Tribunal to any authorities.
67.The application for costs falls to be decided by reference to the terms of section 48 of the ACAT Act as interpreted by the ACT Supreme Court.
68.Section 48(1) provides:
Costs of proceedings
(1)The parties to an application must bear their own costs unless this Act otherwise provides or the tribunal otherwise orders.
69.Section 48 continues:
(2) However—
(a)if the tribunal decides an application in favour of the applicant, the tribunal may order the other party to pay the applicant––
(i)the filing fee for the application; and
(ii)any other fee incurred by the applicant that the tribunal considers necessary for the application; or
Examples––subpar (ii)
·a fee for a business name or company search
·a filing fee for a subpoena
·hearing fees
(b)if the tribunal considers that a party to an application caused unreasonable delay or obstruction before or while the tribunal was dealing with the application—the tribunal may order the party to pay the reasonable costs of the other party arising from the delay or obstruction; or
(c)subject to section 49, if a party to the application contravenes an order of the tribunal—the tribunal may order the party to pay the costs or part of the costs of the application to the other party; or
(d)if the application is an application for review of a decision under the Heritage Act 2004, the Planning and Development Act 2007 or the Tree Protection Act 2005, and the tribunal makes an order under section 32 (2) (Dismissing or striking out applications)—the tribunal may order the applicant to pay the reasonable costs of the other party arising from the application.
NoteA legal expense relating to a proceeding in the tribunal may be recoverable as a debt under the Unit Titles (Management) Act 2011, s 31.
(3) For subsection (2) (d), reasonable costs of the other party arising from the application include reasonable legal costs but do not include holding costs.
Examples—holding costs
· interest and lender imposed charges associated with a loan
· costs of engaging workers and subcontractors and hiring equipment for a development
70.Subsection (2)(a), (c) and (d) and subsection (3) of section 48 do not apply in the circumstances of this case, and the Tribunal’s discretionary power under subsection (1) is limited.
71.The scope and operation of section 48 of the ACAT Act was considered in detail by Penfold J in CIC Australia Ltd v Australian Capital Territory Planning and Land Authority.[32] Her Honour identified the four main elements of section 48 as:
(a) the default position is that the parties bear their own costs;
(b) the default position may be varied by provisions of the ACAT Act;
(c) the default position may be varied by an order of ACAT;
(d) in four specified circumstances, ACAT may make particular costs orders.[33]
[32] [2013] ACTSC 96
[33] CIC Australia Ltd v Australian Capital Territory Planning and Land Authority [2013] ACTSC 96 at [37]
72.Her Honour concluded that section 48 “confers a narrow power on ACAT ... to make only the orders specified in section 48(2) and only in the circumstances specified in that provision.”[34]
[34] CIC Australia Ltd v Australian Capital Territory Planning and Land Authority [2013] ACTSC 96 at [82]
73.Adopting that interpretation to the circumstances of this appeal, the respondent’s application for costs must be dismissed unless it comes within section 48(2)(b). As noted earlier, the respondent submitted that it was within the decided law that by running a case that was hopeless the appellant “caused unreasonable obstruction.”
74.The respondent made the same argument before the Original Tribunal. In the reasons for decision, the Original Tribunal wrote:[35]
195. Where costs are sought under section 48(2)(b) on the ‘obstruction’ ground, the tribunal need only be satisfied that the party against whom costs are sought caused ‘obstruction’. The meaning of ‘obstruction’ in section 48(2)(b) was considered in Smith v J&C Whyte Family Trust & Anor,[36] where the tribunal said that whether a party has caused ‘obstruction’ will depend on the facts and circumstances of the particular case, but that ‘obstruction’ did not encompass bringing an unmeritorious action, or bringing an action in circumstances amounting to bad faith or an abuse of process.
196. The applicant asserted, in essence, that the respondent attempted to obstruct the resolution of the matter by relying on a defence and counterclaim he knew to be unmeritorious. Smith makes it clear that this does not amount to causing ‘obstruction’ in the necessary sense.
[35] Aulich Civil Law Pty Ltd ACN 155 746 777 v Hurst-Meyers [2020] ACAT 26 at [195]-[196]
[36] Smith v J&C Whyte Family Trust & Anor [2016] ACAT 132 at [142]-[148]
75.We are not satisfied that the Original Tribunal misinterpreted or misapplied section 48(2)(b) in the circumstances of the original application. The same reasoning applies to the submission in the circumstances of the appeal.
76.The application for costs is dismissed.
Conclusion
77.The Appeal Tribunal has considered the parties’ submissions and the material before the Original Tribunal. For the reasons given above, we have concluded that the appellant’s grounds for appeal as stated at paragraph [9] above fail.
78.Accordingly, the appeal is dismissed.
79.For the reasons given above, the respondent’s application for costs of the appeal is dismissed.
………………………………..
President G Neate AM
For and on behalf of the Tribunal
Dates of hearing: 3 August 2020 Appellant: In person Solicitor for the Respondent: Ms E Taylor, Aulich Civil Law
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