Passey v Bandarage - [2002] ACTSC 105

JERRY STEPHEN PASSEY and NITA IMOGENE PASSEY v CHANAKA BANDARAGE t/as CITY FIRST SOLICITORS [2002] ACTSC 105 (28 OCTOBER 2002)

CATCHWORDS

LEGAL PRACTITIONERS – solicitor – costs agreement – action seeking declaration that costs agreement not fair and reasonable – facts admitted but allegation that costs agreement not fair and reasonable disputed – overcharging – lack of independent legal advice in relation to the proposed costs agreement – agreements unfair due to lack of informed consent and unreasonable due to their effect in producing a grossly excessive fee – agreements not binding in the circumstances – sums properly payable declared.

Legal Practitioners Act 1970 (ACT), s 190, s 191

Law Society of NSW v Foreman (1994) 34 NSWLR 408

Re Blyth & Fanshawe; ex parte Wells (1882) 10 QBD 207

Athanasiou v Ward Keller (6) Pty Ltd (1998) 122 NTR 22

Cordery’s Law Relating to Solicitors, Frederic T Horne (7^th edn, 1981, Butterworths, London)

No. SC 627 and 628 of 2001

Judge: Higgins J
Supreme Court of the ACT
Date: 28 October 2002

IN THE SUPREME COURT OF THE     )
  )          No. SC 627 and 628 of 2001
AUSTRALIAN CAPITAL TERRITORY           )

BETWEEN:JERRY STEPHEN PASSEY and
NITA IMOGENE PASSEY

Plaintiffs

AND:CHANAKA BANDARAGE t/as
CITY FIRST SOLICITORS

Defendant

ORDER

Judge:  Higgins J
Date:  28 October 2002
Place:  Canberra

THE COURT DECLARES THAT:

The Agreements entered into between the plaintiffs and the defendant are not fair and reasonable.

THE COURT ORDERS THAT:

In lieu of the sums claimed pursuant to the Agreements, the sum payable to the defendant for legal costs by Jerry Stephen Passey be fixed at $1,334.69 and by Nita Imogene Passey at $2,371.80.

The parties will be heard as to costs.

This action concerns costs agreements entered into between the plaintiffs and the defendant. The defendant is a solicitor practising in the Australian Capital Territory under the name “City First Solicitors”.

The plaintiffs, in December 1999, engaged the defendant to act for them in a claim for damages for personal injuries each had arising out of a motor vehicle accident. Costs agreements were entered into between the parties in December 1999.

In June 2001, the plaintiffs transferred their instructions to Ms Geraldine Blanch of pappas, j. – attorney, another firm of solicitors. The defendant then rendered a memorandum of costs and disbursements drawn in accordance with the fee agreements.

These actions seek declarations that the agreements are not fair and reasonable and an order, pursuant to s 191 of the Legal Practitioners Act 1970 (ACT) (LP Act), setting those agreements aside with a consequential order that the costs be calculated and taxed by reference to the Supreme Court Scale (the Scale) or, alternatively, fixed by the court. That, of course, would be a sum deemed “fair and reasonable” by the court.

It is not disputed that the agreements formally comply with s 190 of the LP Act. Section 191 then provides (relevantly):

“(1) Where, on an application by a person who had made an agreement…

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.

Continue reading Passey v Bandarage

Details

AGLC: Passey v Bandarage [2002] ACTSC 105
Case: [2002] ACTSC 105
Decision Date: 28 OCTOBER 2002

CaseChat Overview and Summary

In the matter of Passey v Bandarage, the plaintiff, represented by Jerry Stephen Passey and Nita Imogene Passey, sought a declaration that a costs agreement between the parties was not fair and reasonable. The defendant, Bandarage, disputed the allegation but admitted the facts surrounding the case. The dispute centred on whether the costs agreement was fair and reasonable, given the lack of independent legal advice provided to the plaintiffs. The case was heard in the Supreme Court of New South Wales.

The court was required to determine whether the costs agreement was fair and reasonable, and if it could be enforced. The court also needed to assess whether the lack of independent legal advice rendered the agreement voidable and whether the plaintiffs' consent to the agreement was informed. Additionally, the court had to decide if the fees charged were grossly excessive and, consequently, whether the agreements were unreasonable.

The court found that the costs agreement was not fair and reasonable due to the lack of independent legal advice, which meant the plaintiffs' consent was not informed. The court also concluded that the fees charged were grossly excessive, resulting in the agreements being unreasonable. As such, the court held that the agreements were not binding on the plaintiffs. The court then fixed the sum payable by each plaintiff for legal costs, determining that Jerry Stephen Passey should pay $1,334.69 and Nita Imogene Passey should pay $2,371.80.

The court's final orders included a declaration that the costs agreements were not fair and reasonable, were not binding, and the sums payable for legal costs were fixed at the amounts mentioned above. The court also ordered that the defendant should be paid the fixed sums for the legal costs by the respective plaintiffs.

Orders

Orders of the court

In lieu of the sums claimed pursuant to the Agreements, the sum payable to the defendant for legal costs by Jerry Stephen Passey be fixed at $1,334.69 and by Nita Imogene Passey at $2,371.80.

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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