Man sues lawyer for declaration in reverse suit for fees

A client sued his former solicitor in VCAT for a declaration that no fees were owing because of costs disclosure defaults by the solicitor. Member Butcher stayed the proceeding pending taxation by the Supreme Court’s Taxing Master on the basis that the sending of a cost disclosure statement at the same time as the work done — in this case a letter of advice — was a default under the Act with the result that the fees were not payable until taxed by the Supreme Court at the solicitor’s expense. He also found that in those circumstances, no costs agreement had come into existence; the offer was made after the performance of the solicitor’s obligations under it.

Mazoski’s Case [2007] VCAT 212 is a strange one, and yet another example of the tendency to circumvent the provisions of the Legal Practice Act, 1996 or the Legal Profession Act, 2004 by instituting proceedings under the Fair Trading Act, 1999. In this case, the client was unhappy with his solicitor’s fees. Instead of instituting a costs dispute, that is, a kind of civil complaint under the Legal Profession Act, 2004, the client brought a suit under the Fair Trading Act, 1999 about which Member Butcher said  ‘Essentially the applicant is seeking a declaration that legal fees are not owing.’ Had the orthodox procedure been employed, the client would have had to lodge the amount of the disputed fees with the Commissioner, to be paid out in accordance with the determination of the case.

Presumably the taxation will be of the ‘fair and reasonable’ legal fees, since the purported costs agreement was found not to have come into existence: s. 3.4.19, 3.4.44(2), Legal Profession Act, 2004.

Unfortunately, the statutory basis of the claim is not disclosed in the reasons, however, one must assume that it is a claim under s. 108 of the Fair Trading Act, 1999, and, since the amount involved was less than $10,000, s. 109, which basically allows VCAT to do whatever it thinks is “fair”.

It is interesting that VCAT was not prepared to deal with the client’s suit until the costs had been taxed, since it is not recorded in the reasons that there was a counterclaim by the solicitor for the fees. Under s. 3.4.17 of the Legal Profession Act, 2004, it is only a suit by a lawyer to recover fees which may not be commenced where there has been non-compliance with the costs disclosure regime until there has been a taxation. Nevertheless, Member Butcher seems really to have taken a substance over form approach and ignored the curiosity that instead of a suit for fees, this was a suit for a declaration that no fees were owing. For he said:

‘It is not possible for me to take the matter further at this stage, simply because the finding that there has not been a disclosure, as required by the Act, means that in order for the matter to progress, a review of costs must be carried out before the Taxing Master of the Supreme Court of Victoria.’

The client appeared in person; the firm of solicitors appeared through Dominic Triaca.

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2 Replies to “Man sues lawyer for declaration in reverse suit for fees”

  1. I am suprised by your comment “and yet another example of the tendency to circumvent the provisions of the Legal Practice Act, 1996 or the Legal Profession Act, 2004”.

    If an action is allowed under another Act – how can it be circumvention ? Or is it that only lawyers are able to circumvent and lay people should not think about the law.

    1. You seem to suggest that there is something pejorative in my use of ‘circumvent’. There is not. Plainly, by using a general scheme, in the Fair Trading Act, specific provisions in the Legal Profession Act, 2004 (such as the $25,000 limit on compensation and the need first to have gone through the Legal Services Commissioner) are circumvented. I sue lawyers on behalf of their former clients regularly, and if I think VCAT is an appropriate jurisdiction, involve my clients in exactly this kind of circumvention.

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