A little case about a barrister suing a solicitor for fees

Barnet Jade has given us an admirably constructed decision of Assessor Olischlager, a no-doubt busy decision maker in the Small Claims Division of the Local Court in NSW.  Dupree v Russo [2016] NSWLC 8 was a barrister’s suit for fees against a solicitor.  Call me a dag, but it is always a pleasure to find diligent, elegant decisions carefully considering bang-on authority from the busiest decision makers who generally receive little assistance in the researching and writing of decisions. The decision considers whether costs agreements came into existence by the continued giving of instructions, and between whom, what disclosure obligations the barrister had, and whether the limitation period for suing for the fees was re-set by an acknowledgement of debt by the solicitor.

The barrister offered to enter into a costs agreement jointly and severally with his instructing solicitor and their client.  The offer said that the continuing provision of instructions would be taken as acceptance.  The solicitor continued to give instructions on behalf of the client.  The Court found that a costs agreement arose: the instructions were given by the solicitor personally and as agent for his client, as an act of acceptance on both their parts.  As the Assessor said:

‘the written letter of offer forwarded to Mr Russo was unambiguously worded as an offer to both Mr Russo and to his client Mr Mura. If Mr Russo intended only to accept the offer as agent for his client then the Court would have expected Mr Russo to take issue with the form of the letter of offer. He did not. After receipt of the letter he gave further instructions to Mr Dupree which was conduct that constituted acceptance on behalf of himself and Mr Mura.’

The Court did not sound very impressed by the solicitor’s technical defences of non-disclosure.  The Assessor cited the Supreme Court in Berardi v Russo [2015] NSWSC 1520 at [66]:

‘It seems somewhat unjust that the plaintiff could successfully defend the defendant’s claim for outstanding legal fees on the basis that the costs disclosure was inadequate when, in the eight years since receiving the benefits of the defendant’s legal services, he has not sought a costs assessment under the Act, nor has he contended that the legal costs are unreasonable. The costs disclosure requirements under the Act are important as they ensure that clients receiving legal services are properly informed about the legal costs that they will be obliged to pay. The requirements were never intended by the legislature to be a technical obstacle to a lawyer receiving payment for legal services performed and about which the client has been properly informed.’

It is clear that though the Court found that there was a costs agreement entered into directly with the client (as well as with the solicitor), the barrister did not owe any duties of disclosure except those required of one law practice retained by another law practice.

But the solicitor’s statute of limitations defence succeeded.  There had been an acknowledgement of debt by the solicitor during the 6 years prior to the proceeding being issued, but the acknowledgement was found to have been made by the solicitor only in his capacity as his client’s agent.  The acknowledgement said:

“Attached is a receipt for $500 banked into your account today. This is the $500 paid into Trust by Mura that I mentioned to you last week. I will let you know when Mr Mura [the client] pays more”

The Court found:

‘Mr Russo [the solicitor] made payment on behalf of Mr Mura and upon his instructions. It was not a payment made on behalf of Mr Russo. The payment was conduct that was ostensibly attributable to Mr Mura acknowledging the debt. It is only Mr Mura who could be bound by the confirmation of the debt. The part payment did not bind other persons who may be otherwise liable in respect to the debt.’

The Court relied on a decision of Justice Balmford to like effect: Chethams v Remington & Co [1999] VSC 150.

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