Volmer v Morgan

[1991] TASSC 130

Serial No B16/1991
List "B"

COURT:  SUPREME COURT OF TASMANIA

CITATION:              Volmer v Morgan [1991] TASSC 130; B16/1991

PARTIES:  VOLMER
  v
  MORGAN

FILE NO/S:  983/1988
DELIVERED ON:  14 April 1991
JUDGMENT OF:  Cox J

Judgment Number:  B16/1991
Number of paragraphs:  12

Serial No B16/1991
List "B"
File No 983/1991

VOLMER v MORGAN

REASONS FOR JUDGMENT  COX J

24 April 1991

1. This is an application for summary judgment under O15, r1. The plaintiff has sued his former solicitor for $50,358.39 as money had and received by the defendant to the use of the plaintiff.

1. In broad outline, the facts are these. In March 1983 the plaintiff approached the defendant with instructions for the defendant to act on his behalf in proceedings arising out of an industrial accident in the Northern Territory wherein the plaintiff was suing the Northern Territory Electrical Commission for damages for personal injury. The plaintiff was dissatisfied with his then solicitor in Darwin and the defendant wrote to that solicitor seeking to advance the plaintiff's claim and further complained to the Northern Territory Law Society about the Darwin solicitor's conduct. With the authority of the plaintiff, the defendant requested another Darwin firm of solicitors to take over carriage of the matter in the Northern Territory. The case proceeded to trial and prior thereto it was agreed that the defendant should appear in the Northern Territory Supreme Court as junior counsel for the plaintiff, the Darwin solicitors instructing a Queen's Counsel from that city to lead him. Agreement was reached that the defendant would receive counsel's fees of $1,000.00 per day plus expenses while engaged on the case away from Tasmania.

1. Many of the medical witnesses were also resident in Tasmania and considerable expense in transporting them to Darwin was necessitated by that fact. After a hearing of some four days, the trial was adjourned in March 1984 to August 1984, as the listing procedures followed in the Northern Territory Supreme Court were such that once the allotted hearing time had passed, the case was adjourned even if it was not completed. As the defendant had not been earlier advised of that procedure, it appears that the expenses were significantly increased by the necessity for both him and several witnesses to return to Darwin for the resumed hearing. It appears that senior counsel appeared only on the first two days of the hearing and that the defendant alone represented the plaintiff for the remaining five days of the trial.

1. Ultimately the plaintiff was awarded damages of $257,896.43, less worker's compensation payments already received of $38,681.96, and the defendant Commission in that action was ordered to pay his party and party costs. The Darwin solicitors, having received the judgment debt less the worker's compensation payments, then deducted their own costs of $30,000.00 and disbursements of $40,458.56 and sent to the defendant a cheque for the balance of $148,755.91. This money was received by the defendant on or shortly prior to 25 March 1985. On that date, the defendant wrote to his client advising of the receipt of the money and how it was made up. He also advised that the plaintiff was entitled to recover costs from the defendant Commission and recommended the engagement of a costing expert from Queensland to draw and defend the bill, pointing out that as the plaintiff would know from earlier discussions with the defendant, there were "significant fees that have been incurred ... (for instance, the air fares) which the other side will argue should not be paid by them." The letter concluded:

"I have available for you an amount of slightly less than $100,000.00 having deducted a good proportion of my costs to date in the sum of $50,258.39. I need your authority to transfer some or all of that money to Mr Levis so that he can finalise your house purchase in Launceston. I need also to find out from you whether you wish him to look after the balance for now or whether you want some of that immediately for yourself for other things. Accordingly, could you please see me on Monday or Tuesday to finalise these monies."

1. In his affidavit, the defendant deposes as follows:

"14I received from Messrs Cridland & Bauer $148,755.91 on 22 March 1985 with instructions from Messrs Cridland & Bauer to pay Mr J M Carney the sum of $100.00 and deduct my fees and disbursements and to account to Mr Volmer for the balance. Mr Volmer confirmed those instructions and in addition instructed me to pay out of the balance the sum of $16,500.00 to G M Jackson Pty Ltd for a motor car and to give him a cash cheque for $15,000.00 and to pay the balance to Messrs Norma Levis & Co towards the purchase of a house.

15I acted in accordance with these instructions on or about 22 and 25 March 1985. At the time that I handed to Mr Volmer the cash cheque for $15,000.00 which he had requested, I handed to him also a statement of account and a letter dated 25 March 1985 in which I set out the amount of my charges."

The letter from Cridland & Bauer accompanying the cheque contained no instructions from that firm to the defendant to deduct his fees and disbursements but requested the defendant to pay a fee of $100.00 to Mr Carney, one of the plaintiff's medical advisers. The plaintiff disputes the assertion that the defendant had Cridland & Bauer's instructions to deduct his own fees and disbursements and that the defendant confirmed those instructions. Further, he deposed as follows:

"The true position is that Mr Morgan presented me with a fait accompli. There was never any discussion concerning me authorising him to deduct his costs and disbursements. He simply told me that he had taken out an amount for his costs and disbursements. The only computation of that that I was given is that shown in annexure 'L' to my earlier affidavit."

However, for present purposes I must take the claim at face value as the instructions from Cridland & Bauer may have been transmitted in some other form to the defendant and on an application such as this, I cannot resolve the disputed question of fact. It is common ground that the only quantification or itemisation of the defendant's charges was the document exhibit "L" referred to above which was in this form:

"STATEMENT OF ACCOUNT

RE: MR A B VOLMER

Monies received  $148,755.91

Paid – Mr Carney  100.00

Paid – BJ Morgan for disbursements  2,258.39

Paid – BJ Morgan for costs  48,000.00

BALANCE  $98,397.52"

1. The party and party costs were later drawn at $98,715.25 but settled in the sum of $70,000.00 from which further deductions were made by Cridland & Bauer of $3,017.00 for the costs expert's fees (which the plaintiff had been told would not be recoverable from the other side in any event) and a sum approaching $4,000.00 for additional costs and disbursements.

1. It is clear that the defendant acted for the plaintiff as his close legal adviser. At times he acted as agent for Cridland & Bauer in the conduct of the litigation. At times he acted as counsel, having been admitted to practice in the Supreme Court of the Northern Territory, as I understand it, for the purposes of this case; and at other times he acted for him as his Tasmanian solicitor. The plaintiff claims that insofar as the defendant acted as agent of Cridland & Bauer, he had no authority from that firm to retain the moneys he deducted for costs; that insofar as he acted as the plaintiff's Tasmanian solicitor, he had no such authority from him; and that insofar as he was acting as counsel, he was not authorised to retain any part of those moneys, as it appears that although admitted to practice, he had no practising certificate in the Northern Territory at any material time. Section 22(4) of the Legal Practitioners Act 1983 (Northern Territory) provides (according to the affidavit of Mr Rowe):

"A legal practitioner is not entitled to recover any costs or disbursements in respect of any work of a professional nature done by him as a legal practitioner if, at the time at which the work was done, he was not the holder of a current unrestricted or restricted practising certificate class 2."

1. The first two claims are covered by the affidavit of the defendant. He swears that he did have those instructions and on an application such as this, I cannot go behind his assertion. The third claim involves an interpretation of the relevant statute, which it will be noted speaks only of an entitlement to recover, and leaves open the argument that the practitioner may lawfully retain such costs if he comes into possession of them. In any event the sum retained for costs was a gross amount and it is impossible to say how much is attributable to work in each of the three capacities in which the defendant acted, directly or indirectly, for the plaintiff. If he is entitled to retain costs in respect of one such capacity but not in respect of another, it cannot now be determined what part of the claim there is no defence to.

1. The main thrust of the plaintiff's argument is that as the defendant has never rendered a bill for his fees, charges and disbursements in a form sufficient to enable the plaintiff to make a judgment as to the reasonableness of their quantum and to determine whether he should seek the protection of taxation afforded by the Legal Practitioners Act 1959 ("the Act"), the deduction by the defendant of the moneys could not be an authorised retention. It is clear that the nomination of lump sums for costs and disbursements without any itemising of the services rendered is insufficient to constitute a good bill within the meaning of that Act (In re Baylis [1896] 2 Ch 107; Philby v Hazle 29 LJCP 370; Re a Solicitor [1955] 2 All ER 283; and Pikor v Holt No 2 [1964] Tas SR 321 (NC) No 85/1964). It has been repeatedly held that where moneys have been retained, even with the consent of the client without prior delivery of a proper bill, that does not amount to payment of a practitioner's bill within the meaning of s.50 of the Act which otherwise would preclude a taxation where application is made more than twelve months after payment (In re Street [1870] LR 10 Eq 165, per Lord Romilly MR, at p.167; In re Baylis (supra); In re Foster; Barnato v Foster [1920] 3 KB 306 at p314). However it seems to me that until it is demonstrated that either there was an absence of express consent to the retention of costs (whether for a specified amount or not) or that the amount deducted is an unreasonable and excessive amount, and that as to the excess thereof there was impliedly no authority to deduct the same, it cannot be said that the plaintiff is entitled to recover any part as money had and received to his use.

1. It was submitted that the Act gives no effective remedy to a person in the plaintiff's position who has not received a proper bill but who has had funds deducted with so the defendant claims, his consent though given in circumstances where he had not been afforded proper information about the quantum of his solicitor's charges. It was submitted that the court can only order taxation of a bill where a proper bill has already been delivered. However as Scrutton LJ said in In reFoster; Barnato v Foster (supra) at p314:

"The powers of the Court to order delivery of a bill and taxation rest, in the first place, on the original jurisdiction of the Court over its officers as explained by the House of Lords in Storer v Johnson (1890) 15 App Cas 203; in the second place, on s 37 of the Solicitors Act, 1843, which empowers the Court to order delivery of a bill in any case where they could under the Act refer the bill for taxation if delivered."

(See also Harrison v Tew [1987] 3 All ER 865). The present successor of that provision is s43 which, in my view, would preserve the plaintiff's right to seek an order for delivery of a proper bill.

1. In the circumstances this is not a proper case to make the order sought. I think the appropriate course is to dismiss the summons under O15, r3(1)(a) as it is clear, not merely from material adduced by the defendant, but on the plaintiff's own case, that the relationship of solicitor and client did exist (even if one excludes the work as agent for Darwin solicitors and the defendant's work as counsel in the Northern Territory), that the defendant is entitled to remuneration for at least some of his work (although the plaintiff may apply for an order for delivery of a proper bill and may thereafter procure an order for taxation), and that there is an issue or dispute that ought to be tried. In addition, while the plaintiff "submits" on oath that having regard to the contents of his affidavit the defendant has no arguable defence to his claim, he has not, as required by r2(1), stated in his affidavit that in his belief there is no defence to the claim. Whether or not such an omission is universally fatal, in the circumstances of this case I think it is, and that the rule would require the plaintiff not merely to traverse the defences he adverted to in his affidavit but to pledge his oath to a belief that there was no defence at all.

1. The application is accordingly dismissed.