Mulcahy v MacDonnells Law - [2016] QCAT 208

CITATION:

Mulcahy v MacDonnells Law [2016] QCAT 208

PARTIES:	CATHERINE MULCAHY (Applicant)
v
MacDONNELLS LAW (Respondent)
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

In the Marriage of Anderson (1982) Fam LR 506

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…

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: [2016] QCAT 208
Decision Date: 13 July 2016

CaseChat Overview and Summary

The applicant, Ms Mulcahy, initiated proceedings against MacDonnells Law, a law firm, seeking to set aside a costs agreement she entered into with the firm. The dispute arose from the applicant's contention that the agreement was unfair and unreasonable, and that the firm had breached its fiduciary duties by allegedly going against her instructions to prefer negotiation over litigation. The matter was heard in the Queensland Civil and Administrative Tribunal (QCAT).

The central legal issues before QCAT were whether the costs agreement between Ms Mulcahy and MacDonnells Law was indeed unfair or unreasonable and whether the firm had adequately disclosed its costs as required by the Legal Profession Act 2007 (Qld). The applicant argued that she was induced into an unfair agreement and that the firm had not provided full and fair disclosure of its costs as required by the Act. The firm, on the other hand, maintained that the costs agreement was fair and that they had complied with their obligations under the Act.

In dismissing the application to set aside the costs agreement, QCAT found that the applicant had failed to demonstrate that the agreement was unfair or unreasonable. The tribunal concluded that the firm had made full and fair disclosure of its costs in accordance with the requirements of the Legal Profession Act 2007 (Qld). The tribunal also found that the applicant had not established that the firm had breached its fiduciary duties by going against her instructions. Accordingly, the tribunal ordered that 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. The parties were also at liberty to file submissions as to costs.

Orders

Orders of the court

IT IS THE DECISION OF THE TRIBUNAL THAT:

1. The application to set aside the costs agreement is dismissed.

3. The parties are at liberty to file submissions as to costs.

Background

Background to the litigation

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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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