London Chambers Pty Ltd Trading as Legal on London v Saburova (Civil Dispute)

[2018] ACAT 3

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

LONDON CHAMBERS PTY LTD TRADING AS LEGAL ON LONDON v SABUROVA (Civil Dispute) [2018] ACAT 3

XD 607/2017

Catchwords:             CIVIL DISPUTE – legal costs – whether there was a cost agreement between the parties – whether the Tribunal has jurisdiction

Legislation cited:      ACT Civil and Administrative Tribunal Act 2008 ss 16, 22
  Legal Profession Act 2006 ss 261, 279, 282

Cases cited:Law Society of the ACT v Goodman Law Pty Ltd [2013] ACTSC 204

Tribunal:                  Senior Member G Lunney SC

Date of Orders:  15 January 2018

Date of Reasons for Decision:         15 January 2018

AUSTRALIAN CAPITAL TERRITORY          )

CIVIL & ADMINISTRATIVE TRIBUNAL     )          XD 607/2017

BETWEEN:

LONDON CHAMBERS PTY LTD TRADING AS LEGAL ON LONDON

Applicant

AND:

SVITLANA SABUROVA

Respondent

TRIBUNAL:Senior Member G Lunney SC

DATE:15 January 2018

ORDER

The Tribunal orders that:

1.The application is dismissed.

2.There be no order as to costs that order is to come into effect 21 days after publication of this decision.

3.Should either party wish to agitate the issue of costs further, they should file and serve an application for a stay of the previous order specifying the orders sought with a chronology and a written submission specifying the reasons for seeking the orders and the evidence relied on within 14 days of the date of this decision.

4.The other party shall have 28 days from the date of this decision to file and serve any response or material in response.

………………………………..

Senior Member G Lunney SC

REASONS FOR DECISION

1.This is a civil dispute application by a firm of solicitors of 29 May 2017 seeking to recover legal fees with interest.

2.In this decision:

‘the applicant’ refers to the applicant in these proceedings London Chambers Pty Ltd.

‘the respondent’ refers to the respondent Svitlana Saburova.

‘ACAT Act’ refers to the ACT Civil and Administrative Tribunal Act 2008.

‘MC Act’ refer to the Magistrates Court Act 1930.

‘LPA’ refers to the Legal Profession Act 2006.

3.The matter has been prepared for hearing, and a preliminary legal issue has been reserved for determination.

Details of the application

4.The application claimed $4,619.35 together with filing fees of $290. It recited the making of a costs agreement; the performance of work referred to in the agreement; the rendering of invoices for the work; their non-payment; and accumulation of interest.

Details of the response

5.The response asserts that the fees agreement provided by the applicant to the respondent was not signed by her. There was no acceptance of an offer by conduct since there was not compliance with subsections 282(4)(b) or (c). In the absence of a contractual basis of a claim for work done the ACAT lacks jurisdiction to make any assessment of costs.

6.The issue is whether on the evidence and pleadings, the Tribunal has jurisdiction to make any order.

7.Section 16 of the ACAT Act defines a ‘civil dispute’ to include a contract application and provides that such an application may be made to the Tribunal.

8.Section 22 of the same Act provides that the tribunal has, in relation to civil dispute applications, the same jurisdiction and powers as the Magistrates Court has under the MC Act.

9.In the present proceedings, the application that has been made may be classified as a contract application.

10.Section 261 of the LPA defines ‘costs agreement’ as meaning an agreement about the payment of legal costs.

11.Section 279 regulates the recovery of legal costs.

279 On what basis are legal costs recoverable?

Subject to division 3.2.2 (Application—pt 3.2), legal costs are recoverable—

(a)     under a costs agreement made in accordance with division 3.2.5 or the corresponding provisions of a corresponding law; or

(b)     if paragraph (a) does not apply—in accordance with an applicable scale of costs; or

(c)     if neither paragraph (a) nor (b) applies—according to the fair and reasonable value of the legal services provided.

Note See s 300 (2) for the criteria that are to be applied on a costs assessment to decide whether legal costs are fair and reasonable.

12.Section 282 of the LPA regulates the making of costs agreements.

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.

Note Acceptance 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

Note An 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).

13.In Law Society of the ACT v Goodman Law Pty Ltd [2013] ACTSC 204, Master Mossop explained the following.

24. Relevantly, the requirements that must be established for there to be a “costs agreement” are that:

(a)there is an agreement;

(b)the agreement is “about the payment of legal costs”;

(c)the agreement is, relevantly, between a client and a law practice retained by the client;

(d)the agreement is “written or evidenced in writing” which may include a written offer that is accepted in writing or by other conduct;

(e)if it is a written offer accepted in writing or by other conduct the offer “must clearly state”:

(i) that is an offer to enter into a costs agreement;

(ii) that the offer can be accepted in writing or by other conduct; and

(iii) the kind of conduct that will be acceptance.

14.His Honour went on to examine the dealings between solicitor and client and referred to section 287 at [33] and [34].

33. Section 287 clearly sets out the consequences of non-compliance with s 282.  It provides:

287          Certain costs agreements void

(1)     A costs agreement that contravenes, or is entered into in contravention of, any provision of this division is void.

(2)     Subject to this section and division 3.2.7 (Costs assessment), legal costs under a void costs agreement are recoverable as set out in section 279 (b) or (c) (On what basis are legal costs recoverable?).

(3)     However, a law practice is not entitled to recover any amount in excess of the amount that the practice would have been entitled to recover if the costs agreement had not been void and must repay any excess amount received.

...

34. Hence even if, as appears to be common ground, an agreement about the payment of legal costs was reached in accordance with the ordinary rules of contract, because the offer contravened s 282(3)–(4) it is rendered void by s 287. That means that the question posed for my determination must be answered “No”.

Consideration

15.Written submissions were filed by both the applicant and respondent and reflected the issues raised in the application and response. Counsel declined an opportunity to expand or otherwise speak to them. I was greatly assisted by those submissions, but will make only limited reference to them.

16.At [6] of its written submissions, the applicant submitted that there was a written component to the costs agreement as well as an oral one. It referred to the use of the word ‘may’ in section 282 and submitted that there was no strict requirement that an offer must be in writing.[1] The applicant also referred to the passage set out above and submitted that the offer made by the applicant to the respondent was an oral one and section 282(4) did not apply to it.

[1] Submissions at [10]

17.These submissions must be rejected. Section 282 deals with the way costs agreements are made or formed. In the section, ‘may’ qualifies ‘a costs agreement’ and provides two alternatives for formation: firstly a written, (usually) one document agreement; or, secondly, a written offer with acceptance either in writing or by other conduct. The offer must be a written one and it necessarily must comply with subsection 282(4).

18.In this case there was no agreement complying with subsection 282(2) being in writing or evidenced in writing. There was also no written offer which complied with subsection 282(4) which was accepted in writing or by conduct. Following Master Mossop’s line of reasoning, if there was an agreement as defined in section 261, it was rendered void by section 287.

19.Pursuant to section 279, there being no costs agreement any costs would only be recoverable by the respondent under subsections 279(b) or (c) under which ACAT does not have jurisdiction.

20.The Tribunal does not have jurisdiction since there is no costs agreement and therefore no contract which it would have jurisdiction to enforce. The application must be dismissed.

21.Submissions were made as to costs, and having regard to them I will provisionally make no order as to costs that order is to come into effect 21 days after publication of this decision. Should either party wish to agitate the issue of costs further, they should file and serve an application for a stay of the previous order specifying the orders sought with a chronology and a written submission specifying the reasons for seeking the orders and the evidence relied on within 14 days of the date of this decision. The other party shall have 28 days from the date of this decision to file and serve any response or material in response.

………………………………..

Senior Member G Lunney SC

HEARING DETAILS

FILE NUMBER:	XD 607/2017
PARTIES, APPLICANT:	London Chambers Pty Ltd t/as Legal on London
PARTIES, RESPONDENT:	Svitlana Saburova
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	Legal on London
SOLICITORS FOR RESPONDENT	Farrar Gesini Dunn
TRIBUNAL MEMBERS:	Senior Member G Lunney SC
DATES OF HEARING:	25 August 2017