McSweeney v GDG Legal Pty Ltd
[2018] VSC 792
•19 December 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2018 01135
| TIMOTHY McSWEENEY | Appellant |
| v | |
| GDG LEGAL PTY LTD and DSG LEGAL PTY LTD | Respondents |
---
JUDGE: | Daly AsJ |
WHERE HELD: | Melbourne |
ORIGINATING PROCESS: | Notice of Appeal dated 28 March 2018 |
DATE OF HEARING: | 5 December 2018 |
DATE OF JUDGMENT: | 19 December 2018 |
CASE MAY BE CITED AS: | McSweeney v GDG Legal Pty Ltd and anor |
MEDIUM NEUTRAL CITATION: | [2018] VSC 792 |
---
JUDICIAL REVIEW AND APPEALS – Appeal by a former client of a firm of solicitors against a Magistrate’s order that the solicitors be entitled to recover their fees pursuant to a costs agreement – Whether costs agreement between client and solicitor evidenced in writing – Whether solicitors have complied with disclosure obligations under s 174 of the Legal Profession Uniform Law Application Act 2014 (Vic) – No error of law established - Appeal dismissed
---
APPEARANCES: | Counsel | Solicitors |
| The Appellant in person | ||
| For the Respondents | Mr A Sandbach RFD | Goldsmith Lawyers |
HER HONOUR:
The appellant, Mr Timothy McSweeney, is a former client of the respondents, which trade as Goldsmiths Lawyers (‘Goldsmiths’). Goldsmiths were retained by Mr McSweeney and his former de facto partner, Ms Kerry Reardon in May 2016, in relation to a proceeding brought against them in this Court by the Commonwealth Bank of Australia (‘recovery proceeding’). The recovery proceeding was settled a few months after Goldsmiths were retained. Mr McSweeney and Ms Reardon refused to pay the accounts rendered by Goldsmiths, and on 19 January 2017, Goldsmiths issued a proceeding in the Magistrates’ Court at Melbourne seeking to recover fees in the sum of $22,954.06. Mr McSweeney and Ms Reardon defended the proceeding. After a hearing spanning some four days, on 26 February 2018 Magistrate Smith ordered that Mr McSweeney and Ms Reardon pay Goldsmiths the sum of $21,854.06 upon its claim, plus interest of $2,409.30, and costs fixed at $22,500.00. Mr McSweeney appeals from those orders (‘orders’). Ms Reardon did not appeal the orders.
Goldsmiths’ claim in the Magistrates’ Court relied upon a costs agreement with Mr McSweeney and Ms Reardon dated 12 May 2016 (‘costs agreement’), invoices rendered on 24 June 2016, 19 July 2016, 20 September 2016, and 3 November 2016, and demands made on 2 November 2016 and 29 November 2016.
Mr McSweeney defended the proceeding in the Magistrates’ Court on the basis that:
(a) the named plaintiffs (the respondents to this appeal) were never disclosed to him;
(b) Goldsmiths did not comply with the terms of its retainer;
(c) Mr McSweeney and Ms Reardon were billed for services provided prior to them being provided with the costs agreement;
(d) Goldsmiths did not disclose the fee schedule for the barrister retained on Mr McSweeney’s and Ms Reardon’s behalf;
(e) queries relating to billing and invoicing remained unanswered;
(f) Goldsmiths had not acted in accordance with the Legal Profession Uniform Law Application Act 2014 (Vic) (‘Act’); and
(g) Goldsmiths were not entitled to charge for services not performed professionally.
Ms Reardon defended the proceeding on the basis that:
(a) Mr Gary Goldsmith advised her on 12 May 2016 that he would have a conflict of interest if he represented both her and Mr McSweeney;
(b) she was persuaded by Mr Goldsmith to sign the costs agreement;
(c) it was not until she received an itemised account on 24 June 2016 that she realised she had been charged for the meeting held on 12 May 2016;
(d) Mr Goldsmith did not represent her interests, was belittling and dismissive of her, and was self-serving in creating billable work for himself and others; and
(e) Mr Goldsmith and the barrister engaged by him failed to meet key deadlines, and gave erroneous advice.
As noted above, the hearing before the learned Magistrate was heard over four days. I do not have a transcript of the hearing before me, but I can glean from the learned Magistrate’s reasons and the other materials before me that the main issues in the hearing below were:
(a) Goldsmiths’ compliance with its disclosure obligations under the Act;
(b) whether Goldsmiths overcharged Mr McSweeney and Ms Reardon; and
(c) whether the work carried out by Goldsmiths was done in accordance with the terms of the retainer.
His Honour provided written reasons for his decision (‘reasons’). His key observations and findings were as follows:
(a) he was satisfied that the costs agreement complied with the Act;
(b) the proceeding was not a taxation proceeding: rather, the proceeding was a claim for services rendered and disbursements incurred in accordance with the retainer;
(c) Mr McSweeney and Ms Reardon were given every opportunity to fully examine Goldsmiths’ files and records;
(d) he was satisfied that all of the work charged for in Goldsmiths’ invoices reflected work actually carried out by Goldsmiths, that the work was done in accordance with the retainer, and disbursements, including counsel’s fees, were properly incurred; and
(e) Goldsmiths ‘exercised a proper professional standard of conduct and acted conscientiously in the best interests of Mr McSweeney and Ms Reardon during the course of the retainer’.
The reasons then went on to discuss specific objections raised with respect to the quantification of Goldsmiths costs. His Honour found as follows:
(a) Goldsmiths was bound by the hourly rate referred to by its principal, Mr Gary Goldsmith, in his first meeting with Mr McSweeney, being $400 per hour, rather than the $450 per hour specified in the costs agreement; and
(b) apart from some minor items, he rejected the assertion that certain items of work were charged for wrongly because the time expended was caused by the poor organisation of Goldsmiths, or because the particular work was not done in a proper and professional manner.
His Honour also found that Goldsmiths took all reasonable steps to satisfy itself as to the consent and understanding of Mr McSweeney and Ms Reardon regarding the terms of the retainer as required by s 174(3) of the Act. His Honour then referred to s 172 of the Act, which specifies the factors to be taken into account when determining whether legal costs charged by a legal practice are fair and reasonable. His Honour stated as follows:
There is however in the evidence of this matter nothing that serves to displace the prima facie presumption that such costs were fair and reasonable in their terms. In my view, the attendance rates charged … and the charging by reference to the Practitioner Remuneration Order are reasonable within the context of the matters for which [Goldsmiths] was retained and the necessary level of skill and expertise to be employed.[1]
[1]Reasons [65].
His Honour then deducted then sum of $1,000 plus GST from the sum claimed by Goldsmiths, and entered judgment in favour of Goldsmiths.
The Notice of Appeal filed on 28 March 2018 identified the following questions of law and grounds of appeal:
QUESTIONS OF LAW
1.The Cost Agreement Deed is not executed by Goldsmiths Lawyers in accordance with the Corporations Act 2001 particularly Section 127. As such this does not comply with all requirements of law as outlined in paragraph 2 of His Honours reasons for decision.
2.The Legal Profession Uniform Law Application Act 2014 disclosure obligations have not been complied with in the Cost Agreement Deed.
GROUNDS OF APPEAL
1.The invalid execution of the Cost Agreement Deed by Goldsmiths lawyers is by a single unidentified party. For a company deed to be valid it needs to have been executed in accordance with the Corporations Act 2001. No deed document can be provided with written signatures as Goldsmith Lawyers provided an electronic copy via email. This deed document is void and therefore should not have been relied upon.
2.Paragraph 43 of the reason for decision finds that s 174(3) of the Act was complied with. Comments by His Honour during the decision hearing contradict this finding. The recording of the day of this decision has been applied for to support this as evidence.
Mr McSweeney filed an affidavit in support on 6 April 2018. As this affidavit (‘6 April affidavit’) formed the basis of his submissions at the hearing of the appeal, the 6 April affidavit is reproduced in full below. Mr McSweeney deposed as follows:
1.That I am the PLAINTIFF/APPLICANT/APPELLANT in this matter and I make this affidavit from my own knowledge unless otherwise stated.
2.The defendants were at all times companies duly incorporated pursuant to the Corporations Act 2001 trading as Goldsmiths Lawyers.
3.The Corporations Act 2001 sets out, amongst other things, the execution of Deeds.
4.In the reasons for the decision given by Magistrate M. Smith in the Magistrates’ Court 26 February 2018 paragraph 2 it is stated “I am satisfied that the Disclosure Statement and the Costs Agreement complied in its form with all requirements of law.’
5.The Cost Agreement Deed dated 12 May 2016 has not been executed in accordance with the Corporations Act 2001 or common law relating to deeds.
6.There is a single signatory to the Cost Agreement Deed purporting to represent Goldsmiths Lawyers. This signatory is not identified.
7.The unidentified signatory is not witnessed.
8.The Cost Agreement Deed is not sealed.
9.Goldsmith Lawyers have not provided evidence to show how this Deed has been executed correctly.
10.At no time have I ever received a signed original paper of the Cost Agreement Deed.
11.I have been advised by Kerry Reardon, an individual party to the Magistrates’ Court proceeding, that she has never in any form returned the Cost Agreement Deed to Goldsmith Lawyers.
12.The Cost Agreement Deed has never been executed in accordance with the law. Therefore it is invalid and cannot be relied upon.
13.Cost Agreements must be in writing.
14.If no valid written agreement exists there is not a Cost Agreement.
15.For a Cost Agreement to be valid it must also meet disclosure obligations of the Legal Profession Uniform Law Application Act 2014.
16.On the witness stand under oath, Mr Gary Goldsmith acknowledged that Goldsmith Lawyers did not have a written Cost Agreement with their engaged Second law practice Gordon and Jackson Barrister’s Clerk. This is contrary to Section 175 of the Legal Profession Uniform Law Application Act 2014 – Schedule 1 and also Goldsmith Lawyers own Cost agreement Deed.
17.The conduct of Goldsmith Lawyers did not follow the Cost Agreement Deed.
18.The disclosure obligations for any Cost Agreement Deed need to be met for it to be valid.
19.Section 178 of the Legal Profession Uniform Law Application Act 2014 should be applied for the non-compliance with disclosure obligations.
20.I met with Gary Goldsmith on May 11 2016 at his King St offices. No Cost Agreement Deed or pro form was made available for review or discussion at this meeting.
21.On 12 May 2016 at 11.48am I received an email with attachments from Krys Zgudka, Secretary to Gary Goldsmith, instructing me to sign and return a Deed document. This email was addressed to me only.
22.Also on 12 May 2016 at 5.00pm I received a second email with attachments again from Krys Zgudka with an instruction to sign and return the Deed. This email was addressed to myself and also to Kerry Reardon.
23. So on the same day I had 2 Cost Agreement Deeds put to me without any explanation of how they were formed or exactly what was included. Just instructions to sign and return them.
24.At no point have I ever been asked by Goldsmith Lawyers if I understood the Deed. No one from Goldsmith Lawyers has ever discussed the Cost Agreement Deed with me.
25.I do not understand how the conclusion was reached in the reasons for the decision given by Magistrate M. Smith in the Magistrates’ Court 26 February 2018 paragraph 43 “Firstly, I find that the Plaintiff at all times complied with its obligations in respect of costs disclosure with reference to s. 174 of the Act. In so finding, I accept that the Plaintiff took all reasonable steps to satisfy itself as to the Defendants’ consent and understanding required by s. 174(3)”.
26.Magistrate M Smith in his remarks in handing down his findings statements that conflicted with his written findings about understanding and consenting. It was acknowledged that Goldsmiths Lawyers did not explain or seek to discuss the Cost Agreement Deed.
27.I have requested a copy of the transcript of the hearing from the Magistrates’ Court as evidence. I am still awaiting receipt of the recording.
28.In the reasons for decisions paragraph 36 it is further acknowledged that the Cost Agreement Deed has not been disclosed and consented to correctly.
29.In the court process the Magistrate, Goldsmiths Barrister, and instructing solicitor could not determine how costs were calculated and charged in accordance with the Cost Agreement Deed. This is noted in paragraph 33 of the reasons for decision document. If the Goldsmiths Lawyers themselves did not understand how costs and invoices are tallied, then it is not possible to have been satisfied that my consent and understanding was achieved without discussion.
30.With regards to the reasons for decision document’s reference to Section 177 of the Act “Legal costs must be fair and reasonable” paragraphs 62 and 63 there can be no prima facie evidence considered as disclosure obligations have been neglected.
31.All three of the tax invoices sued upon were found to have been overcharged. Therefore the amounts and the incorrect GST components to be reported to the ATO are incorrect. These invoices therefore are invalid tax invoices.
32.For the record, in paragraph 21 of the reasons for decision document it states that the invoice dated 24 June 2016 “was paid in full by the Defendants”. This is incorrect. It was confirmed in the hearing that Goldsmith Lawyers withdrew trust fund monies without authorisation and paid it to their own account prior to providing an itemised account tax invoice as had been requested. A further breach of Goldsmiths Cost Agreement Deed.
On 10 April 2018, Mr Gary Goldsmith of Goldsmiths swore an affidavit, which exhibited the following documents:
(a) a letter from Goldsmiths to Mr McSweeney dated 9 April 2018;
(b) the pleadings in the Magistrates’ Court proceeding; and
(c) the reasons.
In its letter of 9 April 2018, Goldsmiths stated, in summary, as follows:
(a) Mr McSweeney’s application for a stay was misconceived, and in any event, any stay would not affect Ms Reardon’s liability to pay Goldsmiths under the order;
(b) Mr McSweeney’s understanding of the law with respect to the execution of deeds was misconceived;
(c) the issues raised by Mr McSweeney have been or could have been dealt with by the learned Magistrate;
(d) Goldsmiths intended to seek summary dismissal of the appeal, or, alternatively, security for costs; and
(e) Goldsmiths offered to settle the appeal on a ‘walk away’ basis, and, in the event the offer was rejected, would seek costs on an indemnity basis.
The foreshadowed application for summary judgment and/or security for costs does not appear to have been pressed by Goldsmiths. On 18 June 2018, Judicial Registrar Clayton rejected an application by Mr McSweeney for a stay of the orders.
On 18 June 2018, Mr McSweeney filed a further affidavit in support of the appeal. Mr McSweeney produced a compact disc containing the digital audio recording of the hearing at the Magistrates’ Court on 26 February 2018 (the day his Honour made the orders), and noted the following statements made by the learned Magistrate during the course of that hearing:
“The law requires the solicitor to properly inform the client as to the significance of this document and to take reasonable steps to do so”
“The solicitor has the primary obligation of complying with the law”
“Goldsmith never discussed that contract with him”
“Falling short of his obligations under the Act”
On 25 July 2018, Mr Goldsmith swore a further affidavit which annexed partial transcripts of the hearing on 26 February 2018. The purpose of this affidavit was said to be to:
… address each of the quotes Mr McSweeney attributes to Magistrate Smith in his affidavit and put them in their proper context to enable the Court to adequately consider them.
Mr Goldsmith deposed that the remarks and discussion relied upon by Mr McSweeney:
… took place after judgment had been handed down in the context of submissions regarding the extent of costs to be granted in [Goldsmiths’] favour, not in the context of the merits of the plaintiff’s claim itself.
Mr Goldsmith also deposed as follows:
Firstly, the quote “Which is why the law requires a solicitor to properly inform the client as to the significance of this document and to take reasonable steps to do so” was closely following by further remarks from His Honour that “Mr Goldsmith obviously took some steps to do so” and “I would have to consider how extensive those steps were in the context of this agreement”. […]
The next passage Mr McSweeney refers to is on page 40 of the transcript. The exact quote is actually “He has the primary obligation to comply with the law”, referring to Mr Goldsmith.
The third quotes and fourth quotes are contained in the following larger paragraph:
“Goldsmith never discussed that contract with him. He said he gave a cursory outline of his fees, he emailed a contract, he signed it and he sent it back and it was never discussed thereafter. Now, on one view of it, that was falling short of his obligations under the Act [emphasis added]”
His Honour then went on to say “Let’s just say that it’s not the best – most, shall we say, exemplary performance of his obligation under the Act.”
Mr McSweeney filed his written outline of submissions on 30 August 2018. The outline is in rather unconventional form, referring to documents exhibited to an affidavit sworn by him on the same date.
The following documents were exhibited to Mr McSweeney’s affidavit sworn on 30 August 2018:
(a) an email from Goldsmiths to Mr McSweeney dated 12 May 2016 attaching an unexecuted copy of the costs agreement. The execution block referred to Mr McSweeney alone;
(b) a document described as an ‘unsworn memorandum of transcript’, which records an interview between Mr Goldsmith and Ms Reardon on 12 May 2016 (‘memorandum’);
(c) a further email from Goldsmiths to Mr McSweeney of 12 May 2016 attaching a further copy of the costs agreement signed ‘Goldsmiths’. The execution block referred to both Mr McSweeney and Ms Reardon;
(d) the copy of the costs agreement produced by Goldsmiths in the Magistrates’ Court hearing, which was signed by Mr McSweeney and Ms Reardon; and
(e) a copy of a caveat lodged by Goldsmiths over a property owned by Ms Reardon on 27 February 2018 (the day after the orders were made).
Save for the differences in execution, the various versions of the costs agreement were identical. The estimate of costs provided was $55,000 plus $15,000 per day if the recovery proceeding went to trial.
In part 1 of his submissions, Mr McSweeney referred to clause 1 of the costs agreement, which stated that Goldsmiths ‘will represent your interests throughout Victoria’. He submitted that the memorandum shows that Mr Goldsmith encouraged Ms Reardon to sue him, and as such, Goldsmiths was already in breach of the costs agreement. Mr McSweeney extracted further passages of the memorandum, and submitted that:
… at no point does [Goldsmiths] discuss cost (sic) during the meeting with Kerry Reardon
and
… at no point were the contents of the Cost Agreement and Disclosure Statement Deed ever discussed with myself or Kerry Reardon.
In part 2 of his written submissions, Mr McSweeney reproduced s 174 of the Act, and the reference in the costs agreement to the Practitioner Remuneration Order, and submitted that Goldsmiths had breached its obligations of disclosure. The non‑disclosure meant that he was not aware of the true costs and could not effectively give consent to the costs agreement, as required by s 174(3) of the Act.
Mr McSweeney also referred to s 178 of the Act, which sets out the consequences of failing to comply with s 174 of the Act, and submitted as follows:
[Goldsmith has] contravened [its] disclosure obligations, so that the Cost Agreement Deed is void.
Magistrate Smith offered [Goldsmiths] opportunity to go to cost court (sic) which was declined by [Goldsmiths]. The plaintiff requested that the matter be set aside and direct (sic) to Cost Court. Every invoice was reduced because [of] overcharging, which [Goldsmiths] acknowledged.
In Part 3 of Mr McSweeney’s written submissions, he referred to s 52 of the Property Law Act 1958 (Vic), which requires all conveyances of land to be made by deed, and the clause of the costs agreement which provided an equitable charge and a right to lodge a caveat over any real property owned by him and Ms Reardon. Mr McSweeney also referred to s 74 of the Property Law Act, and the execution clauses of the deed, in support of his contention that the costs agreement was intended to be executed as a deed, but that the formal requirements for execution as a deed had not been complied with.
Goldsmiths filed brief written submissions on 30 November 2018. In relation to ground one, Goldsmiths submitted that whether or not the costs agreement was a deed was immaterial, as the Act requires only that a costs agreement be evidenced in writing. In relation to ground two, there was no inconsistency with the findings of the learned Magistrate in the reasons regarding Goldsmiths’ compliance with the disclosure requirements of the Act and the discussion which took place after judgment was delivered regarding to the costs of the proceeding. Finally, to the extent that Mr McSweeney’s submissions deal with other matters, this Court should disregard matters which do not relate to the grounds of appeal.
In his oral submissions at the hearing, counsel for Goldsmiths noted that Mr McSweeney relied solely upon the alleged contradictory remarks made by the learned Magistrate in the context of Goldsmiths’ application that it be paid its costs of the proceeding in accordance with the terms of the costs agreement. His Honour never retracted what he said about Goldsmiths’ compliance with its disclosure obligations in the reasons; rather, he considered Goldsmiths’ conduct to be relevant to his discretion with respect to costs.
Counsel for Goldsmiths submitted that the other matters raised by Mr McSweeney in his affidavit and submissions (and in the pleadings below) related to Goldsmiths’ compliance with the costs agreement and the regulations governing trust accounts, not the question of whether there had been adequate disclosure. He submitted as follows:[2]
What is material on the – in the appeal is whether or not what the Magistrate said in the course of a costs debate nullifies the considered reasons to be given in relation to compliance with the costs agreement and the short answer is that they most certainly do not.
[2]T30, 19-24.
Mr McSweeney filed the following written submissions in reply:
1.The defendants have not contested that the document sued upon in the original statement of claim is invalid as a deed as it has not been duly executed. Throughout these proceedings the defendants have been insisting that the document relied upon was in fact a deed rather than an agreement.
In the defendants Exhibit GDG-1” (Goldsmiths Lawyer letter to the appellant dated 9th April 2018) Mr Gary Goldsmith wrote to the appellant stating on page two
“In terms of determining whether a document is a deed or an agreement, the courts have said that it depends on whether the person executing the deed intends for the document to be immediately binding on that person. If so, the document is more likely going to be construed as a deed rather than an agreement.
In 400 George Street (Qld) Pty Ltd v BG International Ltd (2010) QCA 245, the Queensland Court of Appeal stated that the words used in the document “executed as a deed” and “by executing this deed” unequivocally expressed an intention that the document was a deed rather than an agreement”
As the document contains the words “Executed As A Deed” and includes a section relating to an Equitable Charge over Real Estate it is clear that the defendants intended for the document to be a Deed.
The correct execution of the document is required for it to be enforceable.
2.The defendants have not contested that the learned Magistrate contradicted himself in relation to comments concerning s 174 of the Legal Profession Uniform Law. The timing of the contradiction is irrelevant as this discussion was based on knowledge of the circumstances gained throughout the hearing. It is evident that this information was not referenced in the Reason for Decision but was considered important enough to refer to in the court.
In his oral submissions at the hearing of the appeal, Mr McSweeney submitted that he believed that most of the issues raised in his affidavits and submissions had been ventilated before the learned Magistrate. In relation to ground one, Mr McSweeney submitted that Goldsmiths relied upon the costs agreement to put a caveat upon Ms Reardon’s property, but there is no evidence that the costs agreement was executed as a deed. As such, it is invalid, and Goldsmiths should not have been able to sue upon the costs agreement.
In relation to ground two, Mr McSweeney submitted as follows:
(a) Goldsmiths never discussed the costs agreement with him;
(b) the costs agreement required the client to check the internet to find out the costs chargeable;
(c) the learned Magistrate and counsel for Goldsmiths spent hours trying to work out how costs were to be calculated;
(d) there was never any disclosure to Ms Reardon, she never returned a signed costs agreement, and there was no disclosure of the barrister’s fees; and
(e) there was no discussion of how the recovery action was to be conducted.
In my view, the appeal lacks merit and should be dismissed. The first ground of appeal is that the costs agreement was void, as Goldsmiths did not comply with the formal requirements for the execution of a deed, and as such, Goldsmiths is not permitted to bring legal action to recover its fees without an assessment being undertaken by the Costs Court. Mr McSweeney appears to have seized upon remarks made by Goldsmiths in its letter dated 9 April 2018 regarding what test a court will apply in determining whether a document is a deed or an agreement to support his contention that the costs agreement is not valid.
However, the matters raised in Goldsmiths’ letter of 9 April 2018 are, with respect, of no relevance to the determination of whether the costs agreement is valid for the purpose of Part 4.3 of the Act, such as to enable Goldsmiths to take legal action to recover any unpaid fees pursuant to the costs agreement. The question of whether the costs agreement is effective to confer upon Goldsmiths a security interest over Ms Reardon’s property is not a question that is necessary for me to consider or determine for the purposes of this appeal. In any event, Ms Reardon is not a party to this appeal.
Section 180(2) of the Act provides that a costs agreement must be written or evidenced in writing. In the current case, Mr McSweeney has exhibited a copy of the costs agreement signed by Mr McSweeney. In her defence in the Magistrates’ Court proceeding, Ms Reardon referred to her being persuaded by Mr Goldsmith to sign the costs agreement. In any event, there is no dispute that Goldsmiths had instructions to act for Mr McSweeney and Ms Reardon, and did so. The costs agreement complies with s 180(2) of the Act. The question of whether the costs agreement is enforceable as a deed is a red herring. This ground of appeal fails.
In relation to the second ground of appeal, Mr McSweeney identified the following question of law:
The Legal Profession Uniform Application Act 2014 disclosure obligations have not been complied with in the Costs Agreement Deed.
Put that way, and having regard to the wide ranging allegations made by Mr McSweeney in his affidavit in support, at first glance it appears that Mr McSweeney is seeking to impugn the learned Magistrate’s findings that there had been no breach by Goldsmiths of its disclosure obligations under s 174 of the Act, based upon the matters agitated by him below. However, the scope of the appeal is confined by the terms of the second ground of appeal, being that:
Paragraph 43 of the reason for decision finds that s 174(3) of the Act was complied with. Comments made by his Honour during the decision hearing contradict this finding.
Section 174(3) of the Act provides as follows:
If a disclosure is made under subsection (1), the law practice must take all reasonable steps to satisfy itself that the client has understood and given to the proposed course of action for the conduct of the matter and the proposed costs.
Paragraph 43 of the reasons is conclusionary in nature, stating that:
Firstly, I find that the Plaintiff at all times complied with its obligations in respect of costs disclosure with reference to s 174 of the Act. In so finding, I accept that the Plaintiff took all reasonable steps to satisfy himself as to the Defendants’ consent and understanding required by s 174(3).
Quite understandably, Mr McSweeney considers that the findings above are directly contradicted by the observations made by his Honour at the hearing when the orders were made, as extracted at paragraph 15 above. However, Mr Goldsmith’s evidence, including the extracts from the transcript of the hearing on 26 February 2018 (see paragraph 18 above), provides an understanding of the context in which the remarks were made. The remarks were made in the course of argument about what amount of costs ought to be awarded in favour of Goldsmiths. Essentially, read together with paragraph 43 of the reasons, what the learned Magistrate could be understood to have said was that, notwithstanding that he had found that Goldsmiths had established sufficient compliance with s 174 of the Act in order to avoid the consequences of non‑compliance with the disclosure provisions of the Act, as provided for under s 178 of the Act, the standard and quality of compliance was insufficient to justify a generous award of costs in favour of Goldsmiths. The learned Magistrate’s finding that Goldsmiths had met the threshold of compliance in order to enable it to recover its costs in the proceeding still stands, otherwise he would not have made the orders. The remarks made by his Honour, given the context in which they were made, do not invalidate the findings made in the reasons to justify the orders. This ground of appeal also fails.
Given the above, and the limited scope of the appeal, strictly speaking, it is not necessary for me to address the other complaints made by Mr McSweeney in his affidavits and submissions, but I will do so briefly.
Paragraphs 15 to 30 of the 6 April affidavit refer to the alleged failure of Goldsmiths to comply with its disclosure obligations under s 174 of the Act. To the extent that Mr McSweeney relies upon the apparently conflicting statements during the course of the hearing at which the learned Magistrate handed down his decision and heard submissions as to the costs of the proceeding, that issue has been dealt with at paragraph 39 of these reasons. To the extent that Mr McSweeney’s allegations relate to the question of whether Goldsmiths complied with its obligations under s 174 of the Act (see paragraphs 20 to 30 of the 6 April affidavit) it is not apparent from the evidence before me, including the reasons, whether all of these matters were before the learned Magistrate. No copy of the transcript of the Magistrates’ Court hearing (apart from some extracts of the hearing on 26 February 2018) is in evidence. Accordingly, even ignoring the limited scope of the appeal, I am in no position to determine whether the learned Magistrate erred in law in reaching his conclusion that Goldsmiths had complied with its disclosure obligations under the Act. It is apparent that Mr McSweeney takes issue with this finding, but, noting that an appeal under s 109 of the Magistrates’ Court Act1989 (Vic) must be brought on a question of law, there is nothing before me to advance an argument that, for example, the learned Magistrate made factual findings as to what transpired that were not open to be made on the evidence, or that his Honour had failed to take into account relevant considerations, or had misconstrued the terms of s 174 of the Act. While some leeway must be granted to Mr McSweeney given he is self‑represented, it is still incumbent upon an appellant to put before this Court material which supports an argument that there has been an error of law below.
The reasons do not provide any support for Mr McSweeney’s submissions in support of the appeal, as his Honour’s findings to the effect that Goldsmiths had complied with its obligations under s 174 of the Act were largely conclusionary in nature. It is apparent from the reasons that the costs agreement and the memorandum were in evidence, and that Mr McSweeney and Ms Reardon had had an opportunity to review Goldsmiths’ file, but there was no other reference in the reasons as to what discussions Goldsmiths had with Mr McSweeney (or Ms Reardon) regarding costs. However, the question of the adequacy of his Honour’s reasons was not raised as an issue on the appeal.
In the 6 April affidavit, Mr McSweeney referred to paragraphs 33 to 36 of the reasons in support of his contention that his Honour’s finding that there had been adequate disclosure on the part of Goldsmiths was wrong. In my view, paragraph 36 of the reasons does not amount to an acknowledgement that the costs agreement ‘has not been disclosed and consented to correctly’. Rather, his Honour found that it was a term of the costs agreement that Goldsmiths was not entitled to charge the hourly rate referred to in the costs agreement, but was only entitled to charge a lower rate, by reason of a representation said to have been made by Mr Goldsmith to Mr McSweeney prior to the parties’ entry into the costs agreement. Further, the observations made by his Honour in paragraph 33 of the reasons express some difficulty his Honour had in reconciling the amounts charged by Goldsmiths with the terms of the Practitioner Remuneration Order. They do not support the submission that ‘if … [Goldsmiths] themselves did not understand how costs and invoices are tallied, then it is not possible to have been satisfied that my consent and understanding was achieved without discussion’, or lead to a conclusion, contrary to the finding made by the learned Magistrate that the costs charged by Goldsmiths were charged pursuant to the retainer, and were fair and reasonable, as required by s 172 of the Act.
In paragraph 31 of the 6 April affidavit, Mr McSweeney asserts that the tax invoices issued by Goldsmiths were invalid, as Goldsmiths was found to have overcharged Mr McSweeney and Ms Reardon. There is no legal basis for contending that the tax invoices were invalid, and no articulation of what the legal consequences might be had they been invalid. The effect of the learned Magistrate’s decision was simply that Goldsmiths was unable to recover the full amount specified in the tax invoices.
Finally, in paragraph 32 of the 6 April affidavit, Mr McSweeney takes issue with the learned Magistrate’s finding that the first tax invoice issued by Goldsmiths was paid in full, stating that Goldsmiths had breached the costs agreement by taking funds from trust to pay the amount charged in the tax invoice without authorisation. Again, it is difficult to see what the legal consequences of any such breach (if that was in fact a breach of the costs agreement) might be.
Mr McSweeney’s outline of submissions and his oral submissions raised some additional issues to those raised in his 6 April affidavit. I will only address those submissions not already dealt with elsewhere in these reasons.
In relation to Mr Goldsmith’s discussion with Ms Reardon that there may be a conflict were he to act for both Mr McSweeney and Ms Reardon, Mr McSweeney conceded during the course of the hearing that this was not an issue in this appeal.
In relation to Mr McSweeney’s contention that Goldsmiths did not discuss costs with him and Ms Reardon prior to them entering into the costs agreement, there is nothing before me to enable me to determine whether this was the subject of evidence before his Honour. Further, s 174(3) of the Act does not necessarily require a discussion to take place, in order for a law practice to be satisfied that a client understands and consents to a costs agreement, although I accept that, in many cases, a discussion will be required in order for a legal practice to be satisfied of those matters.
Mr McSweeney submitted that there was inadequate disclosure because a search of the internet was required to establish how costs would be charged under the Practitioner Remuneration Order under clause 2 of the costs agreement. I do not see how directing a prospective client to a website could amount to a breach of the disclosure requirements of the Act. In any event, I note that the costs agreement provides that hard copy of the Practitioner Remuneration Order could be provided upon request.
In relation to the question of whether the costs agreement was valid because of Mr McSweeney’s hearsay evidence to the effect that Ms Reardon had not signed and returned her copy of the costs agreement, I would make the following observations:
(a) that evidence contradicts what was said by Ms Reardon in her defence below. Further, while the copy of the costs agreement annexed to Mr McSweeney’s affidavit of 30 August 2018 is difficult to read, it does appear to have been signed by Ms Reardon;
(b) in any event, the Act requires that a costs agreement must be evidenced in writing, it does not require that a costs agreement be signed by all parties; and
(c) Ms Reardon is not a party to this appeal.
As for the submission that the learned Magistrate and counsel for Goldsmiths ‘spent hours’ on how Goldsmiths’ costs were to be calculated (and as such, Mr McSweeney could not be expected to understand how costs were to be calculated), I note that the Practitioners Remuneration Order is a scale of costs of long standing. There is no other evidence before me which suggests that Mr McSweeney or Ms Reardon did not understand the basis upon which Goldsmiths’ costs were to be calculated and charged.
Finally, as for the submission that there was no discussion between Goldsmiths and Mr McSweeney as to how the defence of the recovery action was to be conducted, this submission is unsustainable in light of the absence of any real or effective attack on the learned Magistrate’s findings that:
… the work done was done within the terms and requirements of the retainer, and that the disbursements, and counsel’s fees in particular were incurred properly within the retainer and instructions given by the Defendants to the Plaintiff.
Again, insofar as it was raised, I am satisfied that the Plaintiff exercised a proper professional standard of conduct and acted conscientiously in the best interests of the Defendants during the course of the retainer.[3] (emphasis added)
[3]Reasons [23]-[24].
To conclude, in summary:
(a) ground one of the Notice of Appeal does not raise a basis for invalidating the costs agreement; and
(b) there is no material before me to enable me to reach a conclusion that the learned Magistrate erred in law in finding that Goldsmiths had complied with the disclosure obligations under the Act.
Accordingly, the appeal will be dismissed.
---
0
0
0