Mulcahy v MacDonnells Law
[2016] QCAT 208
•13 July 2016
| CITATION: | Mulcahy v MacDonnells Law [2016] QCAT 208 |
| PARTIES: | CATHERINE MULCAHY (Applicant) | |
| v | ||
| MacDONNELLS LAW | ||
| APPLICATION NUMBER: | OCR238-14 | |
| MATTER TYPE: | Occupational regulation matter |
| HEARING DATE: | 7 April 2016 |
| HEARD AT: | Brisbane |
| DECISION OF: | Justice Carmody |
| DELIVERED ON: | 13 July 2016 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | IT IS THE DECISION OF THE TRIBUNAL THAT: 1. The application to set aside the costs agreement is dismissed. 2. The costs agreement is to be assessed by the nominated costs assessor as provided in the costs agreement, with costs of the assessment to be paid as determined by the assessor, but in the first instance by the applicant. 3. The parties are at liberty to file submissions as to costs. | ||
| CATCHWORDS: | PROFESSIONS AND TRADES – LAWYERS – REMUNERATION – COSTS AGREEMENTS – REASONABLENESS – where the applicant retained a law firm on a deferred payment basis – where the applicant claims she was induced to enter an unfair costs agreement – where the applicant claims the law practice went against her instructions in preferring litigation over negotiation – whether the applicant claims the law practice breached its fiduciary duties to her – whether full and fair disclosure of the practice’s costs was made pursuant to the Legal Profession Act 2007 (Qld) – whether the costs agreement should be set aside for being unfair or unreasonable. Legal Profession Act 2007 (Qld) ss 308, 312, 314, 315, 316, 321, 327, 328
Kasmeridis v McNamara Business & Property Law (2006) 245 LSJS 31 Law Society of NSW v Foreman (1994) 1 NSWLR 408 Re P’s Bill of Costs (1982) 8 Fam LR 489 Turner v Macrossan and Amiet Pty Ltd [2016] QCAT 5 | ||
APPEARANCES and REPRESENTATION (if any):
APPLICANT Self-represented.
RESPONDENT D MacPherson, instructed by MacDonnells Law.
REASONS FOR DECISION
This case is about how much the applicant is liable to pay a law practice for legal services provided to the applicant in matrimonial property proceedings under a costs agreement (CA). The answer to that question depends entirely on the validity of the CA.
The CA is in the firm’s standard form for deferred payment matters, apart from the scope and estimated costs of work in sub-paragraph 1.1 and section 3.1, which vary case-by-case.
The applicant challenges the CA as “unfair and unreasonable” and seeks to have it set aside under s 328(1) of the Legal Profession Act 2007 (Qld) (LPA) on the basis of the allegation that it is oppressive both in its inception and effect because the law practice acted in breach of its fiduciary and professional duties by allowing its own financial interest to override hers.
Overall, she complains that the law firm did not act judiciously or in a way that would have resulted in more “realistic” professional fees for her situation and claims that no adjustment was made or attempt to accommodate her fragile state of physical and mental health.
Additionally, the applicant claims the billed amount (of just over $33,000) is excessive compared with the quality and dollar value of the services provided – as well as being over three times what she says was quoted.
The legal practice defends both the integrity of the CA and the quantum of the final bill. It asks for the application be dismissed with costs plus an order that the CA be assessed by a nominated costs assessor as provided in the CA on the District Court Scale or such other scale as nominated by the tribunal with the costs of the assessment to be paid as determined by the costs assessor but in the first instance by the applicant.
The context
The applicant separated from her spouse of 23 years in early 2014. The net assets of the marriage consisted mainly of mortgaged real estate including rental properties, superannuation of $40,000, the distributable property pool was around $491,000. The applicant claimed 80 per cent of the proceeds on the basis that her overall contributions to the value of the matrimonial property was significantly more than the husband’s.
On 14 January 2014, the applicant contacted the law practice’s principal partner in charge of family law litigation, Don MacPherson, after she (says she) was induced to believe by website advertising that as a specialist the practice was able to offer cost-efficient and competent representation to resolve her issues preferably via mediation or if needs be litigation and make necessary adjustments to accommodate “her mental health problems and financial hardship because of her inability to work”.
She made it clear to Mr MacPherson that she had no capacity to pay legal bills until the property settlement was finalised and proposed a deferred fee payment plan.
On 15 January 2014, the applicant saw Catherine Ross, an accredited family law specialist with the firm’s Cairns office, who told her that “the firm was not acting for me at that time and that nothing could be done for me until after I’d signed the (CA)”.
A week or so later, the law practice informed the applicant that it would only act for her if she agreed to accept a “cash settlement” in lieu of a real estate property division.
The applicant wrote to Ms Ross on 28 January 2014 accepting a cash over land settlement and agreeing to the terms of a deferred payment proposal subject to a 20 per cent uplift to cover additional business risk, but says she was not informed in writing of the basis of calculations of fees or uplift nor her right to renegotiate.
The law practice claims the CA and standard disclosure notice was sent by post on 24 February 2014.[1] However, the applicant deposes to not receiving a copy of the CA and disclosure notice until around 11 March 2014 – or six and a half weeks after the initial consultation with Ms Ross.
[1]LPA s 308 identifies what must be disclosed to a prospective client in writing to allow the client to make a fully informed decision.
Later in March (the parties do not agree on the precise date) the applicant advised the law practice that she was moving to New South Wales and planned to engage other solicitors there.
In fact, she moved to Brisbane, and being unable to find another firm there willing to act on a deferred payment basis, she signed the CA on 1 April 2014, she says, “in desperation” without obtaining the independent advice she wanted but could not afford and “under significant personal stress and financial pressure”.
The parties disagree about whether a decision for the practice’s Brisbane office to take over the conduct of the matter was agreed to or imposed. The applicant says she only ever wanted the Cairns office to act and preferred not to deal with anyone other than Ms Ross because she was an accredited specialist.
The file was assigned to Katherine Black from the Brisbane office under Mr McPherson’s personal supervision. She is not an accredited specialist, but he is, and any letters to the husband’s solicitors were signed by him.
On 10 or 11 April 2015, the applicant delivered “10kg of disclosure documents” to Ms Black.
The applicant says she gave telephone instructions to Ms Black to seek urgent spousal maintenance on 28 April 2014. The law practice claims the applicant only gave instructions to issue spousal maintenance proceedings on 15 May 2014 (see Ms Black’s affidavit[2] at [18]-[48]). The average hearing date from the date of filing is 10 weeks. The applicant did not ask for (or give any reason justifying) a speedy trial.
[2]Filed 10 March 2015.
The final property interim spousal maintenance application and supporting financial affidavit was drafted on 20 May 2014 and filed a week later.
The weekly spousal maintenance claim was for $1,312.66, based on the applicant’s figures, but apparently did not factor in the amount of past rent the applicant received from 7 May 2014 which, according to the law practice, may have had the effect of reducing the claim to as low as $200.
The interim maintenance application was adjourned on 28 July 2014 until 12 August 2014 by a Federal Circuit Court Judge to allow for further material concerning the parties’ respective means and needs.
Ms Black recorded a series of meetings with the applicant about filing an amended spousal maintenance application and supplementary material between 29 July 2014 and 4 August 2015.
The law firm’s instructions to act were terminated on 8 August 2014 before any further step was taken in the proceeding.
A new interim spousal maintenance application filed for the applicant by another law firm on 4 August 2014 and was dismissed by consent on 12 August 2014.
The principles
Speaking professionally, lawyers do for clients what they cannot do for themselves. They are also the client’s fiduciary agent, and because of the inherently unequal nature of the professional relationship, must scrupulously avoid conflicts of interest and interest or interest and duty.
The main duties owed when engaged to act are: competence, diligence, loyalty and confidence.
Competence is measured by academic learning, knowledge, qualification, experience, any specialist skills re expertise and overall capability, efficiency and effectiveness.
A core element of efficiency and effectiveness is resolving disputes in the client’s overall best interests in the least stressful and best value for money way as possible including exploring resolution alternatives to fully contested hearings. Settling out of court will generally be preferable to adversarial litigation and a client – even a reticent or implacably opposed one – should still be encouraged (even pressured within appropriate limits) to compromise.[3]
[3]See the comments of Lindenmayer J in Inthe Marriage of Anderson (1982) Fam LR 506, 508-9.
Obviously, taking financial advantage of a dependant client beyond charging reasonable fees for essential services is unprofessional, and because the high cost of access to justice is so contentious these days,[4] CAs for legal work are regulated in a way that other commercial contracts are not, and one of the ways the law protects vulnerable consumers against the risk of being disadvantaged by the inevitable conflict of financial interests and duty is via the tribunals statutory jurisdiction under s 328(1) LPA to review costs agreements and set them aside if satisfied that the agreement is not fair or reasonable”.
[4]See the comments of Kirby J in Law Society of NSW v Foreman (1994) 1 NSWLR 408,422.
Thus, a costs agreement may be unreasonable because of the circumstances in which it came into existence, or the unreasonableness of its terms or the overall effect on the client.
Fairness relates mainly to the circumstances leading up to the conclusion of or method of obtaining a cost agreement. The requirement of fairness is met if the client agrees to a cost agreement on full information and understanding.[5] “Reasonableness”, by contrast, focuses more on its terms and effect;[6] predominantly at the time of entering into the agreement especially as to the method and rate of charging possibly including any significant disparity between the agreement and the scale.
[5]Gino Dal Pont, Lawyers’ Professional Responsibility (5th ed, Thomson Reuters, 2013) [14.165].
[6]Ibid [14.185].
As I said in Turner v Macrossan and Amiet Pty Ltd[7] (Turner):
[102]… The adjectives “unfair or unreasonable” qualify the defined phrase “costs agreement”. Therefore, it must be the costs agreement, and not some other aspect of the circumstances or relationship between the parties, which is “unfair or unreasonable”.[8]
[104]Fairness denotes a different, but related, concept to reasonableness. It does not refer to the subjective perceptions of “fairness” of the legal practitioner or client. Nor is it an unbounded discretion that permits the Tribunal to apply idiosyncratic conceptions of “fairness” or “justice”. Fairness, in s 328(1) of the LP Act, means fairness according to law. It invites the Tribunal to evaluate the costs agreement against equitable principles and statutory requirements prescribed by the LP Act. This will ordinarily require cautious examination of the circumstances within which the agreement was formed, although it is not limited to such matters.[9]
[105]Reasonableness is a more objective concept. It requires the Tribunal to examine the language and practical operation of the costs agreement to ascertain whether a fair-minded, independent and disinterested observer, familiar with legal industry standards and the subject matter of costs agreement, would regard the disputed terms of the agreement as “unreasonable”.
[108]Although the notions of “fairness” and “reasonableness” are discrete, they are not mutually exclusive. As one examines the margins of each concept, it will be clear there are certain cases that appear to fall within both categories. Much like artists might compare different shades of colours, jurists will dispute whether certain instantiations of conduct fall in the rubrics of “unfairness” or “unreasonableness”. The uncertain margins of the concepts do not diminish their practical efficacy.
[7][2016] QCAT 5.
[8]Kasmeridis v McNamara Business & Property Law (2006) 245 LSJS 31 [4].
[9]Ibid [15].
The balance of authority appears to strongly favour placing the onus to establish that a costs agreement is fair and balanced on the law practice. However, as I also pointed out in Turner:
[64] There must be a point at which the ordinary member of the community, who should be presumed to contract of their own volition for legal services, unless there is some aspect of the transaction or quality of the client militating to the contrary, is held to the terms of their agreement, unless that person can show that the costs agreement is unfair or unreasonable.
(...)
[68]… If the evidential onus is discharged, the persuasive onus rests with the respondent to establish that the costs agreement is (actually) fair and reasonable. If the respondent fails to discharge the persuasive onus, the Tribunal may set aside the costs agreement under s 328(1) of the LP Act.
Without limiting the matters to which the tribunal may have regard in deciding whether or not a costs agreement is fair and reasonable (including relevant common law principles),[10] s 328(2) LPA identifies matters (mainly procedural rather than substantive) that may invalidate a CA, which in summary are:
[10]See Brown v Talbot & Olivier (1993) 9 WAR 70, 77-80.
·any other form of unconscionable, misleading or deceptive conduct of or on behalf of the legal practice or any action having the intended or practical consequence of overriding or vitiating consent such as dishonesty urging pressure or inducing mistakes about the nature or effect of the document;[11]
[This reflects the idea that it is wrong for a lawyer to take unfair advantage of a client or to receive any undue benefit from an agreement a dependant or vulnerable client was induced to make on trust.
What the tribunal is looking for here is a “real and genuine choice”.[12]]
·a finding of related professional misconduct involving adverse costs implications for the client;
·material non-disclosures about its terms; especially those dealing with the incidence, calculation (by reference to time or event) and amount of costs;[13]
[This goes to reasonableness and emphasises the close relationship between full and frank disclosure and the fairness principle but the paramount consideration is still the level of a client’s understanding of what is disclosed. The quantum will be unreasonable if it is excessive having regard to scale costs, the degree of complexity, skill, risk, responsibility and urgency, failure to discount for work done by junior lawyers or paralegals, and the quantity and quality of work done.]
·circumstances and conduct before, when or after its commencement that takes advantage of the client’s lack of capacity, knowledge, understanding or experience to the relative advantage of the law practice;[14]
·giving inadequate or confusing information about the ongoing effect of predictable future changes of circumstances on the nature of legal services provided under the CA and the impact on costs;[15] and,
·failure to fulfil the statutory disclosure requirements of an enforceable costs agreement relieves the client of any obligation to pay the costs and the lawyer cannot sue to recover them unless they have been assessed under ss 335 and 340 LPA.[16]
[11]LPA s 328(2)(a).
[12]Above n 5 [14.185]; Re P’s Bill of Costs (1982) 8 Fam LR 489, 497.
[13]LPA s 328(2)(b).
[14]Ibid ss 328(2)(c)-(d).
[15]Ibid ss 328(e)-(f).
[16]Ibid ss 327(1)-(3).
The applicant invokes all of the above to a greater or lesser degree, and if the CA is set aside the costs payable are as provided by the applicable scale or assessed by the tribunal.[17]
Was the applicant induced to enter into the agreement by the fraud or misrepresentation of the law practice or its representative?
[17]Ibid 328(4), (5)(a).
The applicant contends that she was in a position of special vulnerability when she first contacted the law practice and signed the CA. She describes her position as a typical one of “unequal bargaining power” due to her limited knowledge of the law, mental illness and emotional suffering.
She says that “forcing” her to agree to take a cash settlement instead of property “demonstrates that (the law firm) recognised from the outset, an opportunity to take advantage of me and gain a benefit from my situation”.
For this purpose, she says the law firm provided her with a CA which was tailored to allow it to exploit her situation and put its interests above her own and did not comply with its disclosure duties.
However, having read the affidavits and evaluated the oral testimony of the parties and the legal firm’s employed witnesses, I am reasonably satisfied that the applicant was not induced to enter into the CA by any improper conduct by the respondent or its representatives. The applicant admits[18] to receiving and reading the CA (but not the disclosure notice), obtaining some legal advice from a friend and making her own enquiries before signing it three or so weeks after receipt.
[18]At [49] – [51] of the applicant’s affidavit dated 19 January 2015.
As the law practice points out, the applicant had little practical choice but to accept the deferred payment terms of the CA in order to access her share of the marital property and could not find another lawyer willing to act for her on that basis.
Ms Mulcahy may have felt forced by her circumstances to sign it, but she was not induced to do so by non-disclosures or false advertising. There is no credible evidence that the practice took advantage of the applicant’s circumstances or acted unprofessionally or unfairly or unreasonably at any material time or that any other circumstance vitiates the CA.
Was there any related professional misconduct?
This factor is not applicable. None of the lawyers involved have been found guilty of unsatisfactory professional conduct or professional misconduct. A complaint made by the applicant to the Legal Services Commission was dismissed.
Did the law practice fail before or after it entered into the CA[19] to adequately[20] meet its ongoing obligation to disclose any substantial material change in circumstances as soon as practicable?[21]
[19]LPA s 316(3).
[20]Ibid s 314 re: the required form of disclosure.
[21]Ibid s 315.
Unless exempt under s 311 LPA, the mandatory disclosure requirements, located in s 308 (1) in Division 3 Part 3.4 LPA, relevantly include:
·the basis of calculating costs and whether according to scale;
·the client’s right to negotiate a CA;
·receive a lump sum or itemised bill;
·written notification of any substantial change for the disclosed matters as soon as practicable;
·an estimate of the total legal costs and explanation of major variables;
·the applicable rate of interest chargeable on overdue accounts;[22]
·the range of costs recoverable by or against the client depending on the outcome of the litigation;
·right to request and receive progress reports about the matter and legal costs already incurred and likely to be;
·details of a contact person; and
·the availability of costs assessment and other avenues for resolving disputes over costs.
[22]Ibid s 321.
Failure to fully disclose a matter required by the LPA would result in the client being absolved from (and protected against pursuit over) the payment of the legal costs unless they have been independently and expertly assessed at the law practice’s expense.[23] Non-disclosure can also result in denial of fees, a full or partial refund, disciplinary action, and, in the worst case, voiding of the CA under s 327(1) or s 328(1) LPA.
[23]Ibid s 316.
The disclosure must be clearly and plainly expressed so it is likely to be understood by most English speaking clients without detailed explanation.[24] To be fair the legal practice may have to carefully explain the terms of the agreement and their implications to satisfy or even arrange for independent advice to be given.
[24]Ibid s 314.
Ongoing disclosure must be made in writing before or soon after being retained,[25] and additional disclosure is required about settlement of litigation and (except for sophisticated clients) the reasons why proposed uplift fees are warranted and how they are calculated.[26]
[25]Ibid s 315.
[26]Ibid s 312.
Based on [11] and Annexure F of Ms Ross’ Affidavit dated 10 March 2015 and [40] of the applicant’s own submissions dated 19 January 2015, I find that the law firm sent the applicant a CA and that (in the absence of any evidence of any irregularity in the law firm’s mail procedures) she probably received and read a compliant disclosure notice as she admits doing in relation to the CA itself.
Did the practice take unfair advantage of any circumstances and conduct of the parties before, when and after the costs agreement was made?
It is unclear what of what specific subsequent circumstances or conduct make a CA unfair or unreasonable.
The applicant focuses on the general conduct of her file after the CA was made but it is submitted on behalf of the law practice that only circumstances and conduct with reference to the agreement are within the scope of subparagraph 328(2)(d) LPA which is not enough to cover, aside from a fundamental breach, non-specific competency or general performance complaints are matters for assessment of the itemised account not whether the CA of itself is enforceable.[27].
[27]Moleirinho v Talbot & Oliver Lawyers Pty Ltd [2014] WASCA 65.
At [61] of her affidavit,[28] the applicant states that it became evident to her soon after signing and returning the CA that the law practice was not going to conduct itself and her matter in accordance with its website or the agreed terms and that it specifically failed in its fiduciary duties by “not clearly bringing to her attention the aspects of the CA which placed it in a position of advantage” over her. She points especially to Item 9 of the CA identifying Ms Ross as the person to contact to discuss legal costs and the statement in cl 2.1(e) that Ms Ross was “likely” to perform work on her matter.
[28]Dated 19 January 2015.
The law practice’s right to terminate the agreement under cl 13.2(f) if she failed to accept its legal advice regardless of whether it was fair or reasonable it the circumstances was, she says, relied on by the firm to run her matter as it pleased taking a physical and mental toll on her health as well as financially.
On this basis, the post-CA conduct in this case potentially caught by subsections (d)-(e) is:
·not conducting the work solely through an accredited specialist and through the Cairns office;
·not adequately appraising the applicant of the effect on her cost liability or its calculation of material changes as the matter progressed;
·ignoring the applicant’s instructions to apply for urgent interim spousal maintenance as a matter of priority and failing to do so between 15 January 2014 (the date of the first consultation) or 1 April 2014 (when the CA was signed) and 26 May 2014 (the date of filing);
·breaching clause 15.2(b) of the CA by not regularly informing the applicant about her matter or why applying to the court for financial orders was slower than she had hoped and instructed; and
·choosing litigation over negotiation despite contrary instructions and compounding the situation by failing to disclose the husband’s letter of response dated 16 May 2014 that indicated he was not averse to paying maintenance. The applicant says the law practice should have taken more care with a person with a disability and adopted best practice (by mediating rather than litigating the dispute).
The law practice says the applicant’s dissatisfaction, although genuine, is misplaced, possibly due to her admitted health issues and post-traumatic stress disorder which, as she concedes in her own material, causes helplessness and lack of concentration.
However, the applicant denies that her mental health issues affect her memory and says her evidence should be preferred over the other witnesses because of their employment connection with the law practice.
Was the work supposed to be conducted by an accredited specialist?
There is no clause in the CA specifying that the work would be performed by an accredited specialist and, impliedly contemplates the use of other persons throughout the course of the matter. And the applicant does not even argue that it was a condition of the agreement that the work be conducted by an accredited specialist.
Was transferring the file to Brisbane within contemplation?
The applicant deposes that, contrary to her wishes, Ms Ross was not the main person working on her matter because Mr MacPherson unilaterally decided to use Ms Black (who was not an accredited family law specialist) to undertake the work on the matter.
She also contends that Ms Ross’ failure to undertake more than minimal work on the matter, or for Mr MacPherson to do more than occasionally settling documents and properly supervise his staff, amounts to a significant breach of the CA.
At no time does the applicant contend that it was a condition of the CA that the work be conducted in the Cairns office. Nor does she claim that she said to anyone – even after her move to Brisbane – that she only wanted the work conducted by the Cairns office. At the very least, the applicant acquiesced in the Brisbane office commencing and taking over conduct of her matter and only complained about it belatedly.
I find that the change of lawyers from Ms Ross in Cairns to Ms Black in Brisbane, under the supervision of an accredited specialist family law partner was a reasonable, efficient and common sense modification of the CA clearly within the contemplation of the parties rather than prejudicial unilateral conduct by the law practice. In any case, the move did not evidently result in the provision of substandard legal services under the CA.
Was the applicant updated about hourly rate changes?
The applicant was advised as of 1 July 2014 of the increase in charge-out rates for Katherine Black and Tahlia Butler pursuant to the CA. At no time does the applicant raise an objection to the new changes.
Does the final balance of the bill exceed the costs estimate in the CA or did any reasonably foreseeable “changed circumstances” arise to affect costs or the extent and nature of legal services provided under the CA?
These factors appear to be directed at how well the agreement addresses the effect on costs and informs a client about the consequences of likely variables and addresses changed circumstances.
As already found, the respondent provided costs disclosure in accordance with the LPA.
Section 3 of the CA sets out the respondent’s fee estimates and the circumstances that may lead to a change in those estimates. The prediction for the work completed up to termination of the retainer was between $25,000 - $30,000 exclusive of GST and outlays of around $5,000 and well within the range of $33,000 - $42,000 quoted in the CA and the final bill. Those figures did not change and the itemised account delivered to the applicant are consistent with those estimates.
There was no need to update disclosure as to forward estimates because the work performed and charged for were within the original range.
The change to hourly rates was in line with the provision in the CA and was not disputed by the applicant when she was billed.
Were the costs of the interim maintenance claim “thrown away” due to the firm’s neglect?
The applicant complains that the material filed in support of her interim maintenance application was deficient, that she was never provided with “substantive advice” as to her entitlement to spousal maintenance and the firm provided the court with inadequate financial information to decide the matter.
I find that the interim spousal maintenance application was adjourned because the judge was not satisfied in default of any material filed by the husband as to his means and because insufficient information about the applicant’s health issues and their impact on her gainful employment and earning capacity was given. However, neither shortcoming was the law practices fault. The deficiencies in the applicant’s financial statement about her medical situation and work history were due to her own unwillingness to provide it.
Moreover, the delay did not apparently result in any significant loss having regard to the applicant’s actual rental income and the consensual dismissal on the adjourned date.
The husband’s letter of response
The applicant cites the law practice’s failure to inform her of a letter from his solicitor dated 15 May 2014 in response, advising he “was keen to resolve all issues without the need to go to court” and “not adverse to paying maintenance” as a prime example of the breach of professional duties.
She suggests an opportunity to settle amicably was lost as there was no “first step” prior to the first procedural hearing (such as a directions hearing or Case Assessment Conference as stated on the respondent’s website).
The applicant says that instead of disclosing the letter to her, the law practice led her to believe that there had been no response from him and that he was not contactable.
Ms Black’s evidence at [22] and Annexures I and J, however, is more credible and consistent with objective facts; including the three hours billed 26 May 2014, (four days after the letter from Porta Galea Lawyers on behalf of the husband) was received.
A preference for litigation over negotiation?
The applicant says the firm did not encourage the parties to mediate a resolution. Instead it took a hard-line adversarial stance – in that it did not engage her former husband in any settlement discussions prior to filing and serving of the maintenance application.
The applicant further argues that the law practice did nothing to attempt to “arrive at a legal solution (she) could afford” and, conversely, attempted to maximise fees at every opportunity (for example, not seeking an exemption from court fees even though the applicant met the exemption test).
I accept the contrary evidence of Ms Ross at [33] and of Ms Black at [45] and [63] of their respective affidavits[29] on this point.
[29]Filed 10 March 2015.
Was the overall performance of the CA substantially sub-standard?
I am reasonably satisfied that the work carried out by the firm generally, and in connection with the interim spousal maintenance application in particular, was:
·in accordance with the CA; and
·competent and professional.
I make the following specific findings:
·the applicant freely engaged the legal practice’s services on a deferred payment basis with the benefit of adequate disclosure and time for consultation, reflection and comparison shopping;
·the applicant was given appropriate and timely advice and gave instructions that were acted on (including drafting documents filing applications and supporting material);
·the applicant, on occasion, refused to accept or follow the respondent’s advice;
·there are no circumstances or conduct of the parties capable of supporting a finding that the respondent acted contrary to the terms of its CA and Disclosure Notice;
·transferring the file to the Brisbane office after Ms Mulcahy left Cairns was not only understandable, but not objected to;
·assigning Ms Black to the file under Mr MacPherson’s supervision was within the reasonable contemplation of the parties, not inconsistent with the CA and not prejudicial to Ms Mulcahy in any significant way;
·Ms Black’s management of the file was up to scratch and adequately supervised by Mr MacPherson, an accredited family law specialist;
·the husband’s letter of response of 15 May 2014 from Porta Galea Lawyers was received by the law practice in the post on 22 May 2014 and that it was discussed in detail as well as shown to the applicant by Ms Black on 26 May 2014. Accordingly, the alleged non-disclosure of that letter is not a basis for voiding the costs agreement under s 328(2)(e) LPA based on substantial non-performance;
·any “litigate rather than negotiate” approach taken by the firm was on instruction and justified in the circumstances; and
·delays in relation to the spousal maintenance issue were due to Ms Mulcahy’s tardiness in giving instructions and providing up-to-date and accurate financial information, and were otherwise the result of court processes and ordinary litigation exigencies.
Ms Mulcahy’s multiple complaints do not withstand scrutiny. Moreover, she did not impress me as a witness in her own cause. Her expectations were clearly disappointed; but, to me, that is because they were unreasonable and unrealistic in the first place – not because her lawyers were shoddy or unprofessional. There is no objective merit in the allegation that the law practice exploited her vulnerability or charged excessively for substandard legal services.
Within reasonable limits, Ms Mulcahy got what she has not yet paid for. She no doubt entered into a CA because she was under financial pressure, could not get another firm to act on a deferred payment basis and (rightly) thought the law practice was a competent and professional outfit. But her motives for accepting the CA do not make its terms and conditions unreasonable or unfair. It was in standard format for the most part.
ORDERS
It is the decision of the tribunal that:
1. the application to set aside the costs agreement is dismissed; and
2. the costs agreement is to be assessed by a nominated costs assessor as provided in the costs agreement on the District Court Scale with costs of the assessment to be paid as determined by the assessor, but in the first instance by the applicant.
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