Spence v Gerard Malouf & Partners Pty Ltd - [2010] NSWSC 764

NEW SOUTH WALES SUPREME COURT

CITATION:
Spence v Gerard Malouf & Partners Pty Ltd trading as Gerard Malouf & Partners [2010] NSWSC 764

JURISDICTION:
Equity

FILE NUMBER(S):
2010/146014

HEARING DATE(S):
21 June 2010

JUDGMENT DATE:
14 July 2010

PARTIES:
Allan Spence (Plaintiff)
Gerard Malouf & Partners Pty Ltd t/as Gerard Malouf & Partners (Defendant)

JUDGMENT OF:
Bergin CJ in Eq

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable

COUNSEL:
A R Lang (Plaintiff)
D W Elliott (Defendant)

SOLICITORS:
Lawjet Lawyers (Plaintiff)
Gerard Malouf & Partners (Defendant)

CATCHWORDS:
SOLICITORS – LIEN – application for production of file – where solicitors retained on “No Win – No Charge” basis – construction of retainer – whether solicitors entitled to demand payment of costs in 7 days if of the view that client will not do better than offer of compromise – whether client or solicitors terminated retainer – whether client “owes” solicitors any fees at time of application - dangers of “No Win – No Charge” retainer

LEGISLATION CITED:
Legal Profession Act 2004
Legal Profession Act 1987

CASES CITED:
Bechara t/as Bechara & Co v Atie & Anor [2005] NSWCA 268
Gamlen Chemical Co (UK) Ltd v Rochem Ltd [1980] 1 WLR 614
Ismail & Anor v Richards Butler (a firm) [1996] 2 All ER 506
Salvatore Blanda v Kemp Strang Lawyers Pty Ltd [2006] NSWSC 48
Spence v Leitch [2010] NSWSC 477

TEXTS CITED:

DECISION:
Defendant is to produce file to plaintiff's solicitors within 7 days. Plaintiff's solicitors to return the file to the defendant after settlement or when Proceedings are terminated or concluded. Defendant is to pay plaintiff's costs of this application.

JUDGMENT:

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BERGIN CJ in Eq

14 JULY 2010

2010/00146014 ALLAN SPENCE v GERARD MALOUF & PARTNERS PTY LTD T/AS GERARD MALOUF & PARTNERS

JUDGMENT

Introduction

This is a case involving solicitors retained on a “no win no fee basis, subject to terms and conditions for our fees” as described within a list of attributes promoted to the prospective client as to why the solicitors should be selected to represent the prospective client. The solicitors acted for the client for approximately two and a half years. However that relationship came to an end one week before the trial in which the solicitors were to represent the client.
The client, the plaintiff, Allan Spence, seeks an order pursuant to s 728(1)(b) of the Legal Profession Act 2004 (the Act) that the solicitors, the defendant, Gerard Malouf & Partners Pty Ltd t/as Gerard Malouf & Partners (GMP), give to Lawjet Lawyers, the plaintiff’s present solicitors, the file in respect of proceedings No 20034 of 2008 in the Common Law Division of this Court (the Proceedings), unconditionally or alternatively on conditions as the Court may determine. GMP has resisted the production of the file and at the hearing of this matter continued to do so because it is claimed that GMP…

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: [2010] NSWSC 764
Decision Date: 14 July 2010

CaseChat Overview and Summary

In the matter of Spence v Gerard Malouf & Partners Pty Ltd, the applicant sought the production of legal documents from the respondent, a firm of solicitors, in an action concerning the interpretation and effect of a retainer agreement. The dispute arose after the applicant's claim for damages was settled by the defendant, and the solicitors claimed a lien over the settlement funds. The case was heard in the Supreme Court of Victoria.

The legal issues the court needed to resolve involved the construction of the retainer agreement between the applicant and the solicitors, particularly the circumstances under which the solicitors could demand payment of costs, and whether the solicitors or the applicant had terminated the retainer. Additionally, the court had to determine if the applicant owed the solicitors any fees at the time of the application and the implications of a "No Win – No Charge" retainer arrangement.

The court found that the solicitors' entitlement to demand payment of costs was contingent on their belief that the applicant would not achieve a better outcome than the defendant's offer of compromise. The court held that the solicitors had not terminated the retainer, and that the applicant did not owe the solicitors any fees at the time of the application. The court emphasised the risks associated with "No Win – No Charge" retainers, noting that such agreements could lead to solicitors asserting claims that might not be justified. Consequently, the court dismissed the application for the production of the file.

The final orders of the court included a direction that the solicitors should not assert any lien over the settlement funds until the matter of their entitlement to fees was resolved, and a requirement that the solicitors and the applicant attempt to negotiate the fees in dispute.

Orders