Williams Love & Nicol Lawyers Pty Ltd v Wearne - [2016] ACAT 18

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

Williams Love & Nicol Lawyers Pty Ltd v Wearne
(Appeal) [2016] ACAT 18
AA 15/2015 (XD 1356/2014)
Catchwords: APPEAL - Civil Dispute – approach to appeals - debt recovery – costs agreement for legal fees - ACAT jurisdiction – tribunal not able to determine fairness or reasonableness of legal fees ––overlap of matters considered by Supreme Court for costs assessment with other causes of action and defences – breach of implied term of retainer – contractual defence - decision available to original tribunal - ACAT procedures – pleadings – degree of formality required – response set out relevant acts, facts and circumstances which supported the finding – no error found

Legislation cited: Legal Profession Act 2006 ss 286, 300

Cases cited:Williams Love & Nicol Lawyers Pty Ltd v Wearne [2015] ACAT 23.
Law Society of the ACT & Treasury Directorate and NRMA Insurance [2013] ACAT 36
Trinity Law Pty Limited v Krishinan [2009] ACAT 45
Francis Pires v Dibbs Barker Canberra Pty Ltd [2014] ACTSC 283

Appeal Tribunal:                 President L Crebbin
  Senior Member G Lunney SC
  Senior Member M Brennan

Date of Orders: 16 March 2016
Date of Reasons for Decision: 16 March 2016

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

AA 15/2015 (XD 1356/2014)

BETWEEN:
WILLIAMS LOVE & NICOL
LAWYERS PTY LTD
Appellant

AND:
NECIA WEARNE
Respondent

APPEAL TRIBUNAL: President L Crebbin

Senior Member G Lunney SC
Senior Member M Brennan

DATE: 16 March 2016

ORDER

Grounds A, B and C of the application for appeal are dismissed.

The application for appeal is to be re-listed for directions so that the balance of the application can be dealt with.

General President L Crebbin for and on behalf of the Appeal Tribunal

REASONS FOR DECISION

This is an appeal from a decision of a presidential member of the tribunal after a hearing of a civil dispute. The appellant was the applicant in the original proceedings and the respondent, the respondent in those proceedings. The decision is reported as Williams Love & Nicol Lawyers Pty Ltd v Wearne [2015] ACAT 23.
The respondent was a legal practitioner practicing as an employed solicitor in the Territory. She was notified by a firm of solicitors that they had been appointed by her employer to conduct an investigation into allegations of possible misconduct on her part and were seeking an interview with her. She engaged the appellant firm to act for her in relation to that request.
The respondent signed a fees agreement and the appellant undertook the work required. The appellant rendered an invoice for the work done in November 2013 and it was partly paid by the respondent.
The respondent later disputed the unpaid amount, but made no application under the Legal Profession ACT 2006 (LP Act) requesting an assessment of the costs. The appellant then commenced recovery proceedings in the tribunal for the balance outstanding with interest and recovery costs as provided in the fees agreement.
A great deal of material was filed before the hearing on 14 February 2015, which proceeded on that filed material without either party calling other evidence. The parties addressed the original tribunal on the material before it.

The Original Application

The applicant relied on the terms of a fees agreement signed by the respondent as the basis for recovery of the debt claimed, interest claimed and recovery costs claimed. That amended claim was dated 5 December 2014.
The respondent filed an initial response to an earlier version of the claim on 24 October 2014. It effectively only sought a temporary stay of proceedings. The response which was relied on at the hearing was dated 13 January 2015. In 52 paragraphs, it set out in detail the defence of the respondent.
Relevantly for the purposes of this appeal, the respondent raised the following issue in paragraph 42 of the Response.
42 between 29 October 2013 and 15 November 2013 the applicant performed work in preparing, drafting and redrafting the response without obtaining the relevant Form 1410 on which the allegation of misconduct was based; the applicant’s work was therefore performed without the materials necessary to take instructions and to perform the work. The fees charged for this work are not properly chargeable under the agreement.
Following the hearing, the decision was reserved and this was published on 16 March 2015.
In its decision, the original tribunal isolated five issues.
(a)Whether there was a debt owing.
(b)Whether the tribunal had jurisdiction to consider reasonableness of the fees charged.
(c)Whether the applicant’s employees had acted with competence.
(d)Whether the applicant had exceeded its instructions.
(e)Whether the applicant was able to claim its costs of recovery of any debt.
The original tribunal delivered a lengthy and considered decision. It set out the history of the matter and examined the submissions of the parties. In particular at paragraph 29(j) of her decision, the presidential member noted the submission of the respondent which is reproduced at paragraph 8 above.
The tribunal also noted the applicant’s further submissions, which included the assertion that there was no defence known to the law of contract that a solicitor’s bill (or an item in it) was unfair or unreasonable. The presidential member accepted the submission. She held that the appropriate venue for a claim that charges were unfair or unreasonable was the Supreme Court and that the costs agreement the respondent had signed set out her rights to apply for assessment of costs. The respondent had not done so and because she was a ‘sophisticated client’ as defined in section 304A of LP Act, was no longer able to apply to the Court for assessment.
However, the original tribunal agreed with submissions of the respondent that she had derived no benefit from some of the work done and charged for, because it had been performed without obtaining an important document and had to be redone after the document was obtained. This was the work referred to in paragraph 42 of the Response.
The original tribunal found that the failure to obtain a copy of the relevant document until late in the process of preparation for the response ‘demonstrated a lack of competence, care, skill and attention the respondent was entitled to expect of the respondent’. Consequently the work done in the approximately two week period immediately preceding the obtaining of the document was ‘of little value’ to the respondent.
The original tribunal then, from the bill submitted by the applicant and as particularised by the respondent in her Response, calculated the charges that had been made for that period, deducted them from the applicant’s claim, and allowed the balance.
Although not directly articulated, the original tribunal found that the applicant had breached an implied term of the contract of retainer that its work would be done competently.
In summary, the tribunal made the following orders:
(a)   that the respondent pay the applicant a sum of money calculated by the tribunal being the amount of the claim less the amount representing the work found to be unnecessary;
(b)   that the respondent pay the filing fees of the claim;
(c)   that the respondent pay interest; and
(d)   that the respondent pay recovery costs, which were the subject of a separate hearing.

The Appeal Application

The applicant in the original proceedings appealed from the tribunal’s decision. This document listed five grounds of appeal. Of these five, the tribunal, at a directions hearing, set three grounds down for preliminary determination. Those grounds are the following.
(a)The Tribunal fell into jurisdictional error since, having found it did not have jurisdiction to conduct an assessment of costs under the Legal Profession Act 2006 (ACT), the Tribunal nonetheless proceeded to make findings and orders consistent with such an assessment.
(b)The Tribunal erred in making findings regarding the competence or the care skill, and attention of the Applicant’s employed solicitors where the Respondent had not advanced a counterclaim or set-off, and had not alleged incompetence or negligence in her Amended Response dated 13 January 2015.
(c)Any competence or due care, skill and attention was irrelevant to the Applicant’s claim for debt arising under its costs agreement with the Respondent.

Principles Relevant To Appeals

The approach to be taken to appeals is usefully described by Professor Spender sitting as the Appeal Tribunal in Law Society of the ACT & Treasury Directorate and NRMA Insurance [2013] ACAT 36. She said (footnotes omitted):
22. a question of fact or law must be identified in the grounds of appeal that enables the Appeal Tribunal to consider whether the Original Tribunal made an error as to the law or facts raised in those questions. The Appeal Tribunal stated this proposition in Chakravarty & Commissioner for ACT Revenue^[ (Chakravarty) and, in doing so, confirmed the earlier decision of The Medical Practitioner and the ACT Medical Board where a differently constituted Appeal Tribunal stated that the role of the Appeal Tribunal is limited to addressing errors in the original decision.
23.In particular, an appellant cannot merely request the re-exercise of discretion. The Appeal Tribunal in Chakravarty described the nature of its jurisdiction in relation to discretionary decisions as follows:
... it is well recognised that an appellate tribunal should not disturb a discretionary decision as there is a presumption that the discretion was exercised correctly and should therefore be affirmed unless clearly wrong. It is not sufficient to set aside a discretionary decision simply because another view could have been taken or a different decision reached.
24.In this extract, the Appeal Tribunal in Chakravarty relied upon Australian Coal & Shale Employees Federation v Commonwealth (Australian Coal and Shale Employees). In that case, Kitto J stated as follows:
the true principle limiting the manner in which appellate jurisdiction is exercised in respect of decisions involving discretionary judgment is that there is a strong presumption in favour of the correctness of the decision appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong. A degree of satisfaction sufficient to overcome the strength of the presumption may exist where there has been an error which consists in acting upon a wrong principle, or giving weight to extraneous or irrelevant matters, or failing to give weight or sufficient weight to relevant considerations, or making a mistake as to the facts. Again, the nature of the error may not be discoverable, but even so it is sufficient that the result is so unreasonable or plainly unjust that the appellate court may infer that there has been a failure properly to exercise the discretion which the law reposes in the court of first instance: House v. The King [1936] HCA 40; (1936) 55 CLR 499 , at pp 504, 505.

Appeal Ground (A)

Legislation which is relevant to the ground is set out below.
Section 286, which is part of Division 3.2.5 of the LP Act, provides as follows.
286 Effect of costs agreement
(1)Subject to this division and division 3.2.7 (Costs assessment), a costs agreement may be enforced in the same way as any other contract.
(2)Mediation may be used to resolve a dispute over an amount claimed to be payable to a law practice under a costs agreement.
The section refers to Division 3.2.7 - Costs Assessment, the relevant sections of which follow.
300Criteria for costs assessment
(1)In conducting an assessment of legal costs, the Supreme Court must consider—
(a)whether or not it was reasonable to carry out the work to which the legal costs relate; and
(b)whether or not the work was carried out in a reasonable way; and
(c)the fairness and reasonableness of the amount of legal costs in relation to the work, except to the extent that section 300A (Assessment of costs by reference to costs agreement) or section 300B (Assessment of costs by reference to scale of costs etc) applies to any disputed costs; and
(d)if the costs agreement contained provision for an uplift fee under section 284 (Conditional costs agreements involving uplift fees), whether the uplift fee was justified in the circumstances.
...
(2)In considering what is a fair and reasonable amount of legal costs, the Supreme Court may have regard to any or all of the following matters:
(a)whether the law practice and any Australian legal practitioner or Australian-registered foreign lawyer acting on its behalf complied with this Act;
....
(b)any disclosures made by the law practice under division 3.2.3 (Costs disclosure);
(c)any relevant advertisement about—
(i)the law practice’s costs; or
(ii)the skills of the law practice or of any Australian legal practitioner or Australian-registered foreign lawyer acting on its behalf;
(d)the skill, labour and responsibility displayed on the part of the Australian legal practitioner or Australian-registered foreign lawyer responsible for the matter;
(e)the retainer and whether the work done was within the scope of the retainer;
(f)the complexity, novelty or difficulty of the matter;
(g)the quality of the work done;
(h)the place where, and circumstances in which, the legal services were provided;
(i)the time within which the work was required to be done;
(j)any other relevant matter.
Example for par (j)
any applicable scale of costs
NoteAn example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132).
It can be seen that there is some duplication of matters which could be raised in a costs assessment and matters that might be relevant to issues of contract or negligence. For example, a consideration of whether work done was within the scope of the retainer and the time within which work was to be done raises questions that may be relevant in a contract dispute. Consideration of the quality of work done might be relevant to consideration of negligence.
The original tribunal was careful to distinguish between the respondent’s claim that the claim was unfair or unreasonable; and the respondent’s claim that there was breach of the contract of retainer. The applicant had relied on Trinity Law Pty Limited v Krishinan [2009] ACAT 45, which the presidential member distinguished on the ground that it had not been alleged in that case that the applicant had exceeded its instructions or lacked competence. She found that she lacked jurisdiction to examine fairness or reasonableness issues, and having reached that conclusion, went on, commencing at paragraph 51 of her decision, to examine whether the applicant’s employees acted competently in providing the legal services to the respondent.
Support for this approach is found in two parts of Refshauge Judge’s judgment in Francis Pires v Dibbs Barker Canberra Pty Ltd [2014] ACTSC 283 (Pires). It appears that this case was not cited in the course of argument at the original hearing.
In that case, the appellant made a number of complaints about the legal services provided by the respondent. Although a fees agreement had been forwarded to the appellant, no agreement had been signed. That was held not to be a bar to recovery of fees for work done to the time the appellant terminated the retainer. In relation to the appellant’s complaint that the charges were unreasonable, his Honour said as follows:
83.Both in the original decision and the appeal decision of the ACAT, it held that it had no jurisdiction to assess the costs as to whether they were fair and reasonable. I agree.
84.Although it does not say it explicitly, the structure and terms of the Legal Profession Act makes it clear that this is the exclusive work of the Supreme Court. Section 300C of the Act provides that the amount assessed is taken to be a judgment of this Court and may be enforced accordingly. That assessment, under s 300 includes a determination of whether it was reasonable to carry out the work to which the legal costs relate.
85.This is reinforced by the fact that s 294A of the Legal Profession Act permits an application for a costs assessment to be made even if the costs have been completely or partly paid and s 298 provides that a lawyer cannot start a proceeding to recover costs where an application for a costs assessment has been made until the costs assessment has been completed.
86.I also rely on the fact that any costs assessment must be sought no later than twelve months after the bill is delivered: s 294A(5) of the Legal Profession Act. An extension of time is permitted. If a client could simply wait to be sued and then by a defence require, in effect, a bill to be assessed in court, the scheme and time limits would be quite undermined.
His Honour dealt with the contractual issue in the context of defence of a claim for fees by a solicitor at paragraph 37 of his judgment. His Honour does not specifically mention section 286; however the context is clear.
37. The third basis rejected by the ACAT was that the work was inadequately done or of no value. The ACAT suggested that Mr Pires could not complain to the ACAT about the advice; his only redress was to complain to the Law Society. That is not correct. A client may defend a claim for costs on the basis that the lawyer was negligent. See Cachia v Isaacs (1985) 3 NSWLR 366 at 371. Other defences might include that the contract was an entire contract which was terminated without just cause: Smits v Roach (2004) 60 NSWLR 711 at 749-52; [78]-[85]. Other contractual defences may apply.
In this paragraph his Honour makes it clear that a former client is not limited to using the costs assessment process provided for by section 300 of the LP Act to defend a claim for recovery of costs.
It appears to the Tribunal that what the presidential member did was in accordance with the approach described by Refshauge J. That is to say, she recognized the absence of jurisdiction to make any assessment of the costs as presented, but proceeded to deal with the respondent’s contractual defence to the applicant’s claim.
Commencing at paragraph 43 of her decision, she recognised that, (subject to considering the contractual issues), “the rendering of an invoice that is within the limit of the estimates provided and which is correctly drawn with reference to the costs agreement creates a debt due and payable by the respondent to the applicant for the legal services rendered”. She then went on to consider whether the tribunal had jurisdiction to consider the allegation regarding fairness or reasonableness of the fees charged. She concluded that she did not. She identified a single important issue at paragraph 51: “whether the applicant’s employees acted competently in providing the legal services to the respondent”. Her conclusion is at paragraph 86:
86. The Tribunal is satisfied and finds that the applicant’s failure to obtain a copy of the Form 1410 at the earliest opportunity demonstrated a lack of competence, care, skill and attention which the respondent, as a client in a serious matter, was entitled to expect from a law practice which represented that it was, among other things, an employment law specialist firm with experience and expertise in employment law and misconduct investigations.
This conclusion is in our opinion entirely consistent with the statements of principle of Refshauge J referred to above. This ground of appeal must fail.

Appeal Ground (B)

The ACT Civil and Administrative Tribunal’s civil dispute jurisdiction is broad. Section 22 of the ACT Civil and Administrative Tribunal Act (2008) provides that the ‘tribunal has, in relation to civil dispute applications, the same jurisdiction and powers as the Magistrates Court has under the Magistrates Court Act 1930, part 4.2’. This does not require however that the tribunal approach its consideration of civil dispute applications in the same way that a court does. The tribunal is not a court. It is required by section 7 of the ACAT Act 2008 to ensure that its procedures are as simple, quick, inexpensive and informal as is consistent with achieving justice.

Parties are not required to set out their case in ‘pleadings’ that identify with technical legal precision the cause of action and each element relied on in bringing or defending a claim. It is not required that parties use the language of the law when describing their case. What is required is that an application and the response to it, together with other material before the tribunal, set out the details of the claim made and the response raised with sufficient particularity to allow each party (and the tribunal) to know what is asserted, so that they are able to address the assertions.
Paragraph 42 of the respondent’s Response clearly and directly raised the respondent’s assertion about charges for the work done between 29 October 2013 and 15 November 2013.
The appellant had adequate time to deal with it in the tribunal. No application for an adjournment was made for more time, or for an opportunity to obtain more evidence. While paragraph 42 did not contain the words ‘negligence’ or ‘incompetence’, it set out the relevant acts facts and circumstances which supported the presidential member’s subsequent finding that the work was not competently done. The finding was open to her and does not constitute a question that should lead the Appeal Tribunal to intervene to set aside the original decision. The Appeal Tribunal finds this ground of appeal to be not made out.

Appeal Ground (C)

This ground of appeal covers similar ground to (A). The appellant submits that it is entitled to recover the whole of the amount claimed as a debt regardless of the competence of its work. Questions of competence, care or skill are said to be irrelevant to a debt recovery and to arise only in the context of a costs assessment.
Section 286 of the LP Act makes it clear that a costs agreement is a contract that may be enforced in the same way as any other contract. Contractual defences may apply as made clear in Pires. The findings made by the presidential member relating to the appellant’s work were clearly open to her on the evidence. Those findings were relevant to the contractual defence mounted by the respondent and which the presidential member found established. No error of fact or law that justifies intervention by the Appeal Tribunal is established.
The application for appeal needs to be re-listed for directions as to how the balance of the appeal grounds should be dealt with.
___________________________
President L. Crebbin for and on behalf of the Appeal Tribunal

HEARING DETAILS

FILE NUMBER:	AA 15/2015
PARTIES, APPELLANT:	Williams, Love & Nicol Lawyers Pty Ltd
PARTIES, RESPONDENT:	Necia Wearne
COUNSEL APPEARING, APPELLANT	Dr G Dempsey
COUNSEL APPEARING, RESPONDENT	Ms T Warwick
SOLICITORS FOR APPELLANT	Self
SOLICITORS FOR RESPONDENT	Self
APPEAL TRIBUNAL MEMBERS:	President Crebbin., Senior Member Lunney, Senior Member Brennan
DATES OF HEARING:	12 August 2015