Segui v Stewart-Rattray - [2021] SADC 100

District Court of South Australia
(Civil: Application for Review)
SEGUI v STEWART-RATTRAY
[2021] SADC 100
Reasons for Decision of his Honour Judge Slattery (ex tempore)
20 August 2021
MAGISTRATES - APPEAL AND REVIEW
Application for review of a decision of a magistrate in a minor civil action by a solicitor for recovery of professional fees.
Held:
Application dismissed.
Uniform Civil Rules 2020 (SA) R 217; Magistrates Court Act 1991 (SA) s 38; Legal Practitioners Act 1981 (SA), referred to.

SEGUI v STEWART-RATTRAY
[2021] SADC 100

Under UCR 217.12, the hearing and determination of a minor civil review is governed by s 38(7) of the Magistrates Court Act 1991. Under s 38(7) of that Act, I may inform myself as I think fit, and I am not bound by the rules of evidence. I may, if I think fit, rehear evidence taken before a Magistrates Court. In determining the matter, I may affirm the judgment or rescind it; and in hearing and determining the review, I must act according to equity, good conscience, and the substantial merits of the case, without regard to legal technicalities and forms.
The respondent is a solicitor. At the outset, I informed Mr Segui that I was briefed by the respondent some 12 or more years ago. This caused him no difficulties and he was happy for me to proceed to hear the matter. He was aware that he could appoint solicitors to act for him but he had no intention to make any such appointment.
The matter before me concerns the relationship between a solicitor and client. I have before me a notice of review issued by Mr Segui, which is undated and I will hereafter call him ‘the applicant’. The respondent is Mr Justin Stewart-Rattray, a solicitor whom I will hereafter refer to as ‘the respondent’ or the ‘respondent solicitor’.
The material before me discloses that on 3 April 2020, the respondent brought an application for a debt recovery action against the applicant for unpaid professional fees. There was no defence filed. On 1 June 2020, there was an application by the solicitor to the registrar for a default judgment, and on 2nd June 2020, a judgment in favour of the respondent was recorded.
On 4 June 2020, there was an investigation summons served upon the applicant. On 29 July 2020, there was an interlocutory application brought by the applicant for the setting aside of the judgment because, he said, he had not been served with the claim. That interlocutory application was listed before Magistrate Chin, and it was set for hearing on 21 August 2020. Under the then applicable rules, it was necessary for the applicant to satisfy Magistrate Chin about why he said that he was not served with the particular claim; and secondly, whether he had a meritorious defence.
The application was heard before Magistrate Chin on 21 August 2020, and his Honour dismissed the application and ordered costs to be paid by the applicant. On 15 September 2020, a further investigation summons was issued, and was set for hearing on 6th October 2020. The applicant attended the hearing of that investigation summons on that date, and it was adjourned until 8 December 2020. This was to allow the applicant debtor to obtain legal advice from a Mr Matthew Deller.
On 4 January 2021, an application was brought by the applicant, by interlocutory application of the same date, apparently for the setting aside of the judgment. It was supported by an affidavit of facts. On 5 January 2021, Magistrate Nitschke in the Elizabeth Magistrates Court rescheduled the hearing of the matter to 8 February 2021. It was adjourned further, and was eventually heard by Magistrate Kennewell on 26 February 2021.
On that day, her Honour made orders dismissing the application of the applicant, on the basis that the matter had been previously determined by the magistrate, Mr Chin. Her Honour found that the application had been dismissed on its merits on 24 August 2020. The interlocutory application was dismissed, and Magistrate Kennewell noted that the appropriate avenue for the judgment debtor was to seek a review of the decision of Magistrate Chin of 24 August, in the District Court.
That is the history of how the matter has come before me. Therefore, the notice of review dated 22 April 2021 was brought some six months after the orders made by Magistrate Chin on 21 August 2020 (see Exhibit R9 for a history of the proceeding). In the notice of review, the grounds for review are set out as a letter. In it, the applicant says that he never received the original summons issued by the respondent, saying that the summons was issued to his rental property and not his residential property. He does not reside in the rental property.
He also says that, having received the debt recovery details, he questioned the amount sought, thinking it was excessive for one adjournment and one letter to the courts. He also says that it was his understanding that after his instructions to the respondent, he had a good legal claim against Bunnings, such an action was to be taken against Bunnings and that all moneys associated with loss of income and the solicitor's fees would be recovered through any proceedings against Bunnings.
The rhetorical question is then set out as to why the respondent did not follow the instructions of prosecuting Bunnings, so that fees could have been covered within the counterclaim. He says:
I would have thought that there were sufficient grounds for Mr (for the solicitor) to make claim, under defamation of character, once the case had been won. It is for these reasons I would like for this action to be reversed.
Therefore, in summary, the applicant contends that he did not receive the summons; second, that he thinks that the amount claimed is excessive; and third, that he gave instructions to the solicitor for the professional fees owing by him, to be recouped from Bunnings on a claim against Bunnings, allegedly for defamation of character.
There are some very obvious difficulties with this approach. In no particular order they are:
(a)The applicant may seek to “maintain” an action for the benefit of his solicitor;
(b)Implicitly he accepts that he is indebted to the solicitor but is not prepared to make payment;
(c)Without giving instructions to the solicitor or entering into a costs agreement and retainer agreement, he expects the solicitor to commence proceedings of a speculative nature based upon a cause of action in tort that belongs to him, the success of which determines whether he will be paid and if so, for what.
This is a curious approach. It is fraught particularly when the primary question here is whether I would grant an extension of time to commence this review. That question, in turn, requires a review of the merits.
I have also kept firmly in mind that there has been no request for these claimed costs to be assessed. As this matter developed, it became clear that the applicant did not genuinely challenge the quantum of the costs claimed.
In that background, I asked the applicant to go into the witness box and to give evidence. In that evidence, he confirmed that he appointed the respondent as his solicitor. That retainer concerned an issue he had with Bunnings. In 2014, he was accused of stealing some lights from Bunnings which he says he did not do; he was accused of theft by the store detective. He says that he was charged and ultimately the charges were dropped. However, before the charges were dropped he had gone broke because he could not do work for the government with whom he had a very large contract. He could no longer hold the necessary security clearance because of the criminal charge. He says that he lost his business and went through a divorce. He says that he was advised by the solicitor/respondent, that he could not sue Bunnings in relation to the claim in the criminal case and that as a result of that he dropped the case.
He also says that the costs claim for $3000 by the respondent is extortionate. He said he heard nothing about the matter until five years later when he finds that he had a judgment against him. He was then told that he was out of time to appeal and on that basis, he has entered into an agreement to make payments of $20 a month. He said that the fees were only for a letter and an adjournment and he is unhappy with the amount of the bill. He has received some separate advice from a solicitor. In cross-examination, it was put to him and he denied that no instructions were given to the respondent to sue Bunnings.
I then heard evidence from the respondent.
He is the principal of a firm of solicitors. On 16 July 2014, he was contacted by the applicant requesting that he act for him in relation to criminal proceedings pending in the Magistrates Court connected with an allegation of theft from Bunnings. He said that all correspondence with the applicant was sent through an email address. Earlier in his evidence the applicant denied that that was an applicable email address. However, I am satisfied from the evidence that this denial is incorrect and although it is not necessary for me to decide whether the applicant was being deliberately evasive about this email address, I make a finding that as at July, August, September and October 2014 there was one email address operated upon by the applicant through which the applicant and the respondent corresponded. I refer in particular to Exhibit R1 which sets out the exchange of emails to and from the applicant at that email address.
On 28 July 2014, the applicant gave instructions to the solicitor that he would enter pleas of not guilty. On 31 July, there was a further conference between the applicant and the respondent. There were instructions to make an appearance at the Elizabeth Magistrates Court on 7 August. On 12 August 2014, a letter of retainer was prepared in accordance with the solicitor's professional obligations. It is Exhibit R2. Under para.1 in the third sub-paragraph, the respondent solicitor informs the applicant that if the offence is contested to trial, then the costs are likely to fall within the range of $4400-5500 inclusive of GST. That followed a request that the applicant provide an amount of $1650 to be held in the trust account towards anticipated initial legal fees and disbursements. That sum was not paid into the trust account of the respondent solicitor.
After initialling denying receipt of that letter, the applicant later accepted that he had acknowledged receipt of that letter in an exchange of emails through the email address to which the letter was sent; Exhibit R6 is an exchange of emails between the applicant and respondent. In the first email of 12 August 2014 addressed to the respondent, the applicant says:
Am going on holiday for three weeks, so I can sign the letter when I get back. However, I accept your terms and conditions. Still no summons or letter from police, so maybe they won't press charges and then I won't need your services. So do I still have to pay all the fees or just what you done to date.
The letter referred to is the letter of retainer, Exhibit R2. The respondent responds on the same day at 5.50 p.m. in the following terms:
Thanks but they may still issue a complaint so don't get your hopes up too high. Have they got back to you at all? You are liable for fees incurred to date but I usually get money in trust so that would be appreciated before you go. Thanks. Will you be contactable by phone or by email when away.
The applicant responded at 11.32 a.m. on the following day, 13 August 2014, in the following terms:
They have not contacted me at all, I shall transfer money later next week, you can contact me by email. Regards.
I am satisfied that the evidence given by the applicant in relation to the communications between he and the solicitor and the method of communications is wrong. I am satisfied that the applicant received the letter of 12 August 2014 but he deliberately did not sign it and he again did not sign it following sending an email to the solicitor saying that he accepted those terms and conditions. I am satisfied that under the terms of the Legal Practitioners Act, the exchange of emails on 12 August 2014 is a sufficient form of writing agreed to by the client, the party to be charged fees, advising the solicitor of the acceptance of the terms. I am also satisfied that the letter, Exhibit R2, complies with the professional obligations of the respondent.
At that time, in August 2014, the applicant did inform the respondent solicitor that he had formed a view that he had lost a very large amount of money and he expressed a view that his claim was in millions.
Subsequently a summons relating to a charge of theft from Bunnings was issued to the applicant and that appears to have occurred sometime on or about 13 October 2014. This required attendance at the court on 28 October 2014. An arrangement was made that the applicant attend on that day, in the absence of the respondent solicitor. The matter was adjourned off until the 25th of October 2014, and it was expected that the respondent solicitor would attend on that day. The purpose of the adjournment was so that the applicant could find the receipts for the lights allegedly stolen, and that would be a complete answer. The matter was again adjourned by agreement to 25 November 2014.
I am satisfied, on balance, that the applicant did not attend as arranged with his solicitor on 25 November 2014 as a result of his own oversight. A conviction was recorded in his absence. It then became necessary on 28 November 2014 for the respondent solicitor to fax to the Elizabeth Magistrates Court, at 10.45 a.m., an application for a rehearing. The application for a rehearing arises because there had been a conviction entered by a magistrate of the Elizabeth Magistrates Court because of the applicant’s failure to attend. As a result, the respondent solicitor was required to undertake further professional work to arrange for the rehearing. This and other matters significantly undermines the applicant’s contentions about the question of the quantum of costs claimed by the respondent solicitor. The application to rehear appears to have been called on for hearing on the 4 December 2014.
On 16 December 2014, the respondent sent to the applicant his first account for professional fees. It refers to attendances upon the client, two long attendances at the Elizabeth Magistrates Court, consideration of material, drafting, documents - including the application for rehearing - consideration of material sent from the Elizabeth Magistrates Court, drafting letters to the prosecution, preparing for hearing, reporting to client, and all incidental matters. The charge was $2,100. There was GST added, plus some disbursements. The total amount of the bill was $2,322.00; that was a reduction from $2,624.00. The account covered two lengthy court attendances at the Elizabeth Magistrates Court.
That letter was sent to the same email address as all other email correspondence, on 17 December 2014. It was accompanied by a letter from the solicitor of 16 December 2014, and all of those documents are Exhibit R3.
There was then further attendances by the solicitor, on the instructions of the applicant. As I have earlier said, there was an application to rehear listed for the 4 December 2014; there was an attendance of some one-and-a-half hours in relation to that matter. There were then further attendances, and the matter was then adjourned to the 5 February 2015. Those orders were made by Magistrate Forrest in the Elizabeth Magistrates Court.
In the course of those matters occurring, there were a number of discussions between applicant and respondent. I am satisfied that during these discussions there were a number of requests made for money to be placed into the respondent solicitor’s trust account, and there was no objection raised to that.
On 3 February, there were attendances between the applicant and the respondent solicitors about the draft of a letter to prosecution about the charge against the applicant being withdrawn. It was at that time that the applicant indicated to the solicitor that he had an intention to sue somebody for what he perceived he had suffered. He was informed at that stage, however, that any negotiations about the withdrawal of the matter were occurring on the basis that he does not seek costs.
In Exhibit R7, there is an email from the solicitor to the applicant which says:
I refer to recent communications. Please see attached for your review and completion a draft letter to Police Prosecutions. I welcome any comments or input.
There was a response made by the applicant about the letter from the same email address. This further satisfies me that the evidence given by him about that email address and its continued use was not true.
On 3 February 2015 at 4.40 p.m., the respondent's solicitor thanked the applicant for his input and said:
Please note that you are offering to have the complaint withdrawn on the basis that you do not seek costs. Could you take care of my account? Many thanks.
Then, on 31 March 2015 (Exhibit R4), the respondent's solicitor sends to the applicant a letter with a final account dated 31 March 2015. The applicant is invited to respond with any queries. That account relates to professional attendances upon the applicant, drafting emails, letters to prosecution, consideration of documents, telephone attendances, drafting facsimiles to the Magistrates Court, drafting emails to the prosecution, consideration of emails from the prosecution, reporting. The amount of $750 for the account is reduced from $945. There was no payment of that account or the previous account. On the evidence before me, they are demonstrably reasonable accounts.
On the 17 March 2015, there was a conversation between the police and the respondent solicitor, in which the police said that the charges were being withdrawn because there was no CCTV footage. The respondent solicitor contacted the applicant to seek instructions. Those instructions were that the applicant accepted the offer. In the course of obtaining those instructions, the respondent solicitor again raised with the applicant client the non-payment of his bills. I am satisfied, on the evidence, that the applicant said that he would pay that account in a couple of weeks. There was no challenge to the quantum of the accounts and I am satisfied that his present challenge to quantum is not genuine.
The whole of the issues the subject of the applicant’s instructions to the respondent were resolved on 31 March 2015 and following that the final account was rendered. The total of the two accounts is $3,159.20. It was put to me by the respondent that the total is within the range of $4,400 to $5,000 within the letter of retainer. However, the letter of retainer says that if the offence is contested to trial they are likely to fall within 4,400 to $5,500. The matter did not get that far which explains why the costs did not rise to that level.
Following the delivery of the final accounts and the absence of any follow-up (see Exhibit R5), there were then telephone attendances upon by the respondent solicitor upon the applicant seeking payment of these accounts. The applicant informed the solicitor that he had not paid because he was waiting on the sale of “Hancock Road” and that once that is sold he would pay in three instalments. There had been no instructions to the respondent solicitor to issue any proceedings against Bunnings or, for example, against the police alleging malicious prosecution. There was no threat to sue Bunnings made by the applicant: he did say that someone owed him millions.

Proceedings were issued by the respondent solicitor against the applicant seeking orders for the payment of cost on 9 August 2016 and they were addressed to the applicant at his usual address of Blenheim Court, Golden Grove. Those proceedings could not be served and they lapsed. On 30 April 2020, there was a second set of proceedings issued. They were delivered to a P.O. Box address in Golden Grove. That address was obtained from the applicant's LinkedIn page, which is Exhibit R8. It shows that the applicant is in fact continuing to trade as an electrician and electrical supervisor (Exhibit R8). Those proceedings were served by the court. They were not returned. No defence was filed.
On 2 June 2020, a default judgment was signed. There was an investigation summons ordered and there were no payments made on the summons.
The applicant informs me today that he has not paid on that summons because he thinks he has been unfairly dealt with, that he has been overcharged and he should not have to pay. These assertions reflect largely the content of the letter which is attached to his application. I shall deal with those matters in turn.
The first assertion in the letter attached to the application is that the applicant did not receive the original summons issued by the respondent's solicitor. I am unable to accept that assertion. It is not true. I am satisfied on the facts that in relation to the second summons issued by the respondent's solicitor, it was served at the post office box address of the applicant, it was received by him, there was no return, and it has been served. I reject the assertion of fact made by the applicant that he was not served with this summons as being either truthful or reliable.
The second is he says that after receiving the debt recovery details he questioned the amount believing it was excessive for an adjournment and one letter to the courts. First it must be said that the work done by the respondent's solicitor was far in excess of one letter to a court and one adjournment. Those matters are set out in the exhibits which reflect the actual accounts sent to the applicant. I pause for a moment to say that I am satisfied as well that having regard to the details set out in the account, that not only is the charge made appropriate, that is very reasonable on all of the circumstances. It reflects the actual work done by the respondent solicitor; the charges made are reasonable. I am unable to accept as truthful or reliable any assertion by the applicant to the contrary.
Next, the applicant says that it was his understanding that after his instruction to the respondent solicitor who implicitly is alleged to have accepted this instruction, that action was to be taken against Bunnings in the name of the applicant to claim all moneys associated with the loss of income and the respondent's solicitors associated fees would be recovered through that proceeding. I completely reject that assertion, it has no factual basis, I think it is demonstrably untrue.
To compound that position, the applicant then says he would like to know why the respondent's solicitor did not follow the instruction of prosecuting Bunnings so that his fees could have been covered within that claim, and he thought there was sufficient grounds for the respondent solicitor to make a claim under defamation of character. There is no evidence before me that such instructions were given, and in any event, even if such instructions were given, the beneficiary of any such action, if it was possible, is the applicant, and there is no evidence of any assignment of a chose in action on the benefit of an action in favour of the applicant to the respondent solicitor (even if that were possible). As a matter of law it would not be possible for the solicitor to take advantage of that action, and in any event, the suggestion is that the solicitor would maintain an action for his benefit only and not for the benefit of his client. That is a demonstrably absurd proposition.
The issue for my consideration here, is whether, in light of all that material, I am prepared to give an extension of time for the commencement of this application for review. The attitude I would take in light of the matters that I have set out earlier from s 38(7) of the Magistrates Court Act is that if a matter was of merit, then I should err on the side of an extension of time. If the matter was meritless, I would not give the extension. In my opinion, this application falls well below the description of meritless and I would dismiss it.
Mr Stewart-Rattray seeks an order for costs. In evidence, he informed me of the need for him to retrieve his file, review its contents and to attend court to give evidence. However, he also made open offers to the applicant to accept an amount of $3,000 by an email letter of offer dated 24 March 2021. The applicant did not dispute the receipt of that email letter.
The email letter was a costs offer. Although outside the rules, it was marked “without prejudice save as to costs”. The applicant has not bettered that offer and did not give any evidence about his consideration of the offer. The respondent solicitor seeks an award of costs based upon his hourly rate.
It has been held that a court may make any order as to costs on a review. So much may be accepted but I do not think that this method of reasoning extends so far as to reimburse a solicitor for his hourly rate of fees on a profit cost basis. I do not think that such an approach can withstand scrutiny. The reasons are apparent. The amount of costs which the solicitor seeks based on a full hourly rate must include an aspect of profit cost in the application of that hourly rate. The attendance of the solicitor on this action does not carry with it an element of professional services and therefore, profit costs. Accepting that costs are claimable and exercising the very broad discretion reposed in me, I consider that the appropriate order is that the applicant pay the respondent solicitor costs of the failed application, fixed in the sum of $750.