Murie and Edward v Elk Australia Pty Ltd

[2002] WASC 295

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   MURIE AND EDWARD & ANOR -v- ELK AUSTRALIA PTY LTD & ANOR [2002] WASC 295

CORAM:   EM HEENAN J

HEARD:   18 NOVEMBER 2002

DELIVERED          :   18 NOVEMBER 2002

FILE NO/S:   CIV 2526 of 2002

BETWEEN:   MURIE AND EDWARD

VERSCHUER EDWARD
Plaintiffs

AND

ELK AUSTRALIA PTY LTD
First Defendant

CHARLES JOSEPH LOVETT
Second Defendant

Catchwords:

Local Court - Limit of jurisdiction - Money claim and counterclaim - Application to remove proceedings into Supreme court - Counterclaim alone removed

Legislation:

Legal Practitioners Act

Local Courts Act 1904

Supreme Court Act, s 32

Result:

Claim and counterclaim severed
Counterclaim only removed into Supreme Court

Category:    B

Representation:

Counsel:

Plaintiffs:     Mr M A Detata

First Defendant             :     In person (Mr C J Lovett)

Second Defendant         :     In person (Mr C J Lovett)

Solicitors:

Plaintiffs:     Verschuer Edward

First Defendant             :     In person

Second Defendant         :     In person

Case(s) referred to in judgment(s):

Nil

Case(s) also cited:

Nil

1. EM HEENAN J:  Before the Court is an originating summons to remove into this Court an action pending in the Local Court of Western Australia (plaint No 23573 of 2001).  In that plaint Verscheur Edward and its successor Murie and Edward, firms of solicitors, have sued Elk Australia Pty Ltd, a duly incorporated company, and Mr Charles Joseph Lovett for the sum of $5,883 alleged to be moneys due and owing for professional services rendered by the plaintiff solicitors to the defendants at the defendants' requests together with disbursements, particulars whereof have been rendered.  Interest is claimed on that amount pursuant to s 32 of the Supreme Court Act.

2. The particulars of claim do not disclose whether or not a memorandum of costs by the solicitors for the amount sued upon was delivered before suit or whether or not there has been any request for taxation of those costs, whether within time or otherwise.  Those particulars may not be necessary at this stage of the proceedings although it would seem to be the case that the defendants would be entitled to demand particulars of that kind at any point up until trial.  To that summons, the defendants have entered a notice of intention to defend in the Local Court and have filed one set of particulars of defence.

3. By their defence the defendants assert that the plaintiff has refused to release essential documents, although it had contracted to do so, that the work carried out was incomplete, that the defendants have had no written advices on their position in the case as requested from the onset, and that the plaintiff did not provide advice "of their enormous costs" until after the severance of their instructions.  The defence also asserts that the plaintiff refused to detail the account.  That may or may not be a plea under the provisions of the Legal Practitioners Act to the effect that the practitioners did not supply a memorandum of costs before suit.  It is also pleaded that the plaintiff removed money from their trust account without the approval or authority of the defendants who believed that money was in place to pay for the fees to be rendered.

4. It is also pleaded that, although a formal arrangement between the parties was promised to be actioned by the plaintiff whereupon the defendant could get external legal advice regarding the contract and that it was promised that this was to be paid for by the plaintiff, no such document of advice was ever provided.  It is also pleaded that the plaintiff has some ongoing dispute with an ex‑employee, Mr McIntosh, and is for some reason, mixing the grounds of that dispute with its claim against the defendants.  It is also pleaded that the plaintiff is subject to an ongoing complaint to the Legal Practitioners Complaints Committee regarding the integrity of its dealings with the defendant.

5. None of those defences in terms denies that there is money owing; that the particular sum sued for is owing, or that there is an enforceable agreement by which the plaintiff was to provide professional services to the defendants at agreed or reasonable costs.  Nor is there any particular given of any payment said to have been made by the defendants in the past.

6. Despite these shortcomings it seems that there is enough in these particulars of defence to show that there are triable issues between the plaintiff and the defendants, if for no other cause than in relation to the existence of a memorandum of fees served and delivered before suit.  It may also be that there is some entitlement to have the plaintiff's costs taxed.  Be that as it may, I consider that there are causes of action which can and should be decided on this claim and defence and, in the ordinary course of proceedings, they are the types of disputes which can and should readily be disposed of in the Local Court with its advantages of relative informality, greater expedition and cheaper fees and costs.

7. The complicating factor is that, in addition to their defence, the defendants have added a counterclaim for $500,000 as the alleged value of the opportunity costs associated with files alleged to have been retained illegally by the plaintiff and so jeopardising the prospects of the defendants being able to commence other litigation within an applicable limitation period.  The defendants also counterclaim for a further $800 being costs incurred in terminating a case against Vita Pacific Ltd.  There does not appear to me to be anything in the counterclaim, as formulated, which discloses on its face that the plaintiffs are liable in the amount of $500,000 or any similar sum for any of the causes of action alleged.  It rather seems that there is a plea being advanced in the counterclaim for unliquidated damages on the grounds that there has been an unjustified retention of files in breach of contract and/or as an action in detinue or conversion for the value of the files.  That seems to be coupled with an assertion that the damages resulting from that unjustified detention equals the value of the subject matter of the counterclaim.  That appears to me to be a very questionable assumption.  If there are damages payable for breach of contract or for unjustified detention of the files, all the appearances are that the damages would be for a far more modest sum.  Nor is there anything in the counterclaim to disclose why costs incurred in terminating a case against Vita Pacific would be costs for which the plaintiff would be liable.

8. It is plainly the case that a claim for $500,800 is well beyond the civil jurisdiction of the Local Court.  That being the case it is not possible for the counterclaim to proceed in that Court.  Whether it is valued at more than the jurisdiction of the Local Court, presently $25,000 or, for that matter, more than the civil jurisdiction of the District Court at $250,000, simply cannot be determined from the materials available.  However, there is good reason to doubt that the subject matter is worth anywhere near the face value attributed to it in the counterclaim.

9. In these circumstances it is my conclusion that I should permit the original claim and the defence to continue in the Local Court and to remove into this Court only the counterclaim.  If the counterclaim is removed into this Court as I am about to order, it will be necessary for the counterclaiming plaintiffs, that is, Mr Lovett and Elk Australia Pty Ltd, to reformulate the claim in a manner which complies with the Rules of the Supreme Court.  It will also be necessary to retain a solicitor to represent Elk Australia Pty Ltd, to give full particulars of the cause of action and the details of the damages claimed because I am satisfied that the counterclaim, as it presently stands, is not an adequate disclosure of the causes of action which the defendants are attempting to advance.

10. In the circumstances, I would direct that the counterclaim in Local Court plaint number 23573 of 2001 be severed from the claim and that the counterclaim be removed into this Court to enable the first and second defendants to pursue it in this Court, if they wish.  But I also note that substantial revision of the pleading will be needed.  Those will be the orders of the Court.