Morgan v DW Fox Tucker Pty Ltd - [2022] SASC 3

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
MORGAN v DW FOX TUCKER PTY LTD
[2022] SASC 3
Judgment of Judge Dart a Master of the Supreme Court
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - TAXATION AND OTHER FORMS OF ASSESSMENT
Applicant has commenced solicitor/client taxation against respondent - applicant was Director of a company - the company was a client of the respondent - company went into voluntary administration - respondent says the applicant was also a client - terms of the retainer - applicant seeks a declaration that he was never a client of the respondent.
Held: Applicant not a client of the respondent.
Real Property Act 1886 (SA) s 191(f), (k); Legal Practitioners Act 1981 (SA) Schedule 3, clause 31, clause 44(b), referred to.
Toll (FGCT Pty Ltd) v Alpha Pharm Pty Ltd (2004) 219 CLR 165; Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; Carr v Blade Repairs Australia Pty Ltd (No 2) [2010] FCA 688, considered.

MORGAN v DW FOX TUCKER PTY LTD
[2022] SASC 3

These reasons deal with an issue arising in a taxation of costs. The applicant asserts that he was never personally a client of the respondent and asks the Court to make a declaration to that effect. The applicant is entitled to the declaration sought.
Background
It is not in dispute that the respondents acted for TS Morgan Developments Pty Ltd (“the Company”) in 2016 and 2017. The Company got in to a dispute with Morgan Residential Developments Pty Ltd (“Morgan Residential”) about the companies’ respective involvement in the sub-division of land at Happy Valley. The applicant was a director of the Company. His father was a director of Morgan Residential.
The matter came before the Court on short notice. The Company had lodged a caveat on the land at Happy Valley. Morgan Residential warned the caveat. The Company sought urgent advice from the respondent about obtaining an order to extend time for removal of the caveat. Such matters are always urgent. The Real Property Act 1886[1] requires a Court order to be obtained and lodged at the Lands Titles Office within 21 days. If that does not occur, the caveat is removed. It is not possible to lodge a further caveat unless the Court gives permission to do so.[2]
[1] Real Property Act 1886, s 191(f).
[2] Real Property Act 1886, s 191(k).
An order extending time for removal of the caveat was obtained. The dispute between the Company and Morgan Developments then became a normal civil dispute. The matter progressed over a period and the respondent continued to act for the Company.
The Company went into voluntary administration in March 2017. Since that time, the respondent has been seeking to recover unpaid legal costs from the applicant personally. On 20 December 2018 the respondent issued proceedings against the applicant in the District Court. A default judgment was obtained in the amount of $193,392.78 on or about…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] SASC 3
Decision Date: 17 January 2022

CaseChat Overview and Summary

In the matter of Morgan v DW Fox Tucker Pty Ltd, the applicant, Morgan, sought a declaration that he was not a client of the respondent, DW Fox Tucker Pty Ltd, and therefore not personally liable for the costs incurred during legal proceedings. The dispute arose from a legal engagement where DW Fox Tucker acted for TS Morgan Developments Pty Ltd in a property dispute with Morgan Residential Developments Pty Ltd. Morgan, a director of TS Morgan Developments, was not directly involved in the engagement but was subsequently pursued for costs after his company entered voluntary administration. The legal issues before the Court centred on whether Morgan was personally liable for the costs incurred by DW Fox Tucker in its representation of TS Morgan Developments.

The Court examined the nature of the engagement and the relationship between Morgan, the company, and DW Fox Tucker. It was clear that while Morgan was a director of the company, he did not have a direct retainer with DW Fox Tucker. The Court found that the costs incurred by DW Fox Tucker were related to the company's affairs and not to any personal legal services provided to Morgan. Given that Morgan was not a direct client of DW Fox Tucker, the Court held that he was not personally liable for the costs.

The Court's decision was based on the principle that costs should only be charged to a client with whom there is a direct retainer. As Morgan did not have such a retainer, he was not liable for the costs. The Court granted the declaration sought by Morgan, stating that he was not a client of DW Fox Tucker. This determination effectively absolved Morgan of personal liability for the costs incurred during the legal proceedings.

Orders

Orders of the court

Held: Applicant not a client of the respondent.

Background

Background to the litigation

These reasons deal with an issue arising in a taxation of costs. The applicant asserts that he was never personally a client of the respondent and asks the Court to make a declaration to that effect. The applicant is entitled to the declaration sought.Background It is not in dispute that the respondents acted for TS Morgan Developments Pty Ltd (“the Company”) in 2016 and 2017. The Company got in to a dispute with Morgan Residential Developments Pty Ltd (“Morgan Residential”) about the companies’ respective involvement in the sub-division of land at Happy Valley. The applicant was a director of the Company. His father was a director of Morgan Residential. The matter came before the Court on short notice. The Company had lodged a caveat on the land at Happy Valley. Morgan Residential warned the caveat. The Company sought urgent advice from the respondent about obtaining an order to extend time for removal of the caveat. Such matters are always urgent. The Real Property Act 1886[1] requires a Court order to be obtained and lodged at the Lands Titles Office within 21 days. If that does not occur, the caveat is removed. It is not possible to lodge a further caveat unless the Court gives permission to do so.[2][1] Real Property Act 1886, s 191(f).[2] Real Property Act 1886, s 191(k). An order extending time for removal of the caveat was obtained. The dispute between the Company and Morgan Developments then became a normal civil dispute. The matter progressed over a period and the respondent continued to act for the Company. The Company went into voluntary administration in March 2017. Since that time, the respondent has been seeking to recover unpaid legal costs from the applicant personally. On 20 December 2018 the respondent issued proceedings against the applicant in the District Court. A default judgment was obtained in the amount of $193,392.78 on or about 11 February 2019. Shortly thereafter, a bankruptcy notice was served on the applicant. Late in 2019 an application was filed by the applicant seeking to set aside the default judgment. A Master of the District Court set aside the judgment on 13 February 2020. A defence was then filed in those proceedings. The institution of the application to tax costs has the effect of staying the District Court proceedings. [3] [3] Legal Practitioners Act 1981 – Schedule 3 Clause 44(b)The legal issue This is a slightly unusual application. Normally, applications to tax costs concern issues such as whether a retainer was fair and reasonable, or simply fixing the quantum of the costs. Here, the applicant seeks to establish that he was not personally liable to pay the costs of the respondent. The issue is set out in the originating application as follows:1. A declaration pursuant to clause 30(8) of Schedule 3 of the Act that no costs agreement exists between the plaintiff and the defendant in respect of the legal assistance provided by the defendant to TS Morgan Developments Pty Ltd (TSMD) in around 2016 and 2017 in relation to a dispute between Morgan Residential Developments Pty Ltd and TSMD regarding the purchase and development of land at 203 Chandlers Hill Road, Happy Valley SA 5159 (TSMD Engagement).

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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