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How not to sue for fees

Update, 8 March 2010: See also Pancarci v CVK & Co [1998] VLPT 10, a decision of Registrar Howell.  The barrister who is now Judge Jane Campton appeared, and referred Mr Howell to a decision of Justice O’Bryan in Carroll v Young (delivered 16 January 1990 in Supreme Court proceedings numbered OR 108/89), which came to the same conclusion in relation to solicitors’ reliance on the ‘evidenced in writing’ requirement for costs agreements. Registrar Howell followed Justice O’Bryan’s decision, as well as a previous decision of his own which he did not name, in which he had followed In re a Solicitor [1956] 1 QB 155 on the same point.

Update, 23 February 2010: Sydney Morning Herald article here.

Original post: Najem v M [2010] NSWSC 20 is a great read.  It is a text book example of how not to sue for fees. It also progresses the resolution of the question on which two justices of appeal had previously divided, the third helpfully not deciding, in a previous decision.  The question is whether a solicitor may use the rule that oral costs agreements are void against a client relying on a costs agreement favourable to the client.  No, said Justice McCallum.  The decision also provides an insight into what does and does not amount to ‘evidenced in writing’, the minimum condition for enforceability of costs agreements. Continue reading “How not to sue for fees”

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Solicitor’s equitable charge to secure fees declared void

The plaintiff in Brott v Shtrambrandt [2009] VSC 467 is not having much luck.  First of all, he cut what he thought was a plea bargain in a professional misconduct prosecution only to have VCAT’s Legal Practice List increase by 50% the penalty he and the Law Insitute had agreed jointly to contend was appropriate, so that his practising certificate was cancelled and he was prohibited from applying for a new one for 9 months: Law Institute of Victoria v Brott [2008] VCAT 1998.  But the extra penalty all became a bit academic when he was prohibited from applying for a new practising certificate until 2014 in a professional misconduct prosecution he contested and lost disastrously (Legal Services Commissioner v Brott [2008] VCAT 2399, and then lost on appeal ([2009] VSCA 55), paying the Commissioner’s costs all the way and suffering withering criticism.  Then, in a suit by the solicitor for fees charged back in the day when he was allowed to charge them, Justice Beach has inconveniently declared that what sounded like a pretty kick-arse charge fell foul of the Consumer Credit Code and was void.  Section 40 of the Code voids any mortgages (including equitable charges) governed by the Code which do not describe or identify the charged property.  ‘[A]ll estates or interests in real estate which I now have or may hereafter acquire’ did not cut the mustard as a description.

Not all costs agreements will be credit contracts governed by the Code.  I bet there are a lot of solicitors out there with void equitable charges, however.  They will need to proceed with great care in fixing the problem.  Unless they procure the amelioration of the position with retrospective effect with the utmost probity, the ‘fix’ may in fact be challenged in the various jurisdictions which give expression to the law’s tenderness towards clients in their dealings with solicitors.  It would be sensible to obtain advice if the amount secured by the questionable charge is of sufficient significance to them. Continue reading “Solicitor’s equitable charge to secure fees declared void”

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Weiss v Barker Gosling

Weiss v Barker Gosling (1993) 16 Fam LR 728; [1993] FamCA 58 is a decision of Fogarty J about an application to set aside a costs agreement and have the client’s debt to his solicitor for representing him in the Family Court quantified by a taxation on the Family Court Scale.  It really comes in two parts, the second being reported as Weiss v Barker Gosling (No. 2) (1993) 17 Fam LR 626. The client argued there had been a failure to follow the costs disclosure requirements in the Family Law Rules, that the costs agreement was ‘unreasonable’, that it was void for uncertainty, and that undue influence by the solicitor caused the agreement.  The application was made under a provision in the Family Law Rules (r. 8A) which permitted a client to apply for a determination of any question as to the validity of a costs agreement.  Upon such an application, the Family Court might ‘confirm, vary or set aside the costs agreement and make any other order the judge considers necessary or appropriate.’ Continue reading “Weiss v Barker Gosling”

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Procedure in applications to set aside costs agreements

It costs about $290 to file an application to set aside a costs agreement under s. 3.4.32 of the Legal Profession Act, 2004 in VCAT.  It is not a step lightly to be taken.  Moreso than much of what goes on in VCAT, such applications are treated like litigation in a court.  Costs will be awarded against the unsuccessful party much more often than in other kinds of proceedings in VCAT; indeed, it is more or less true that costs follow the event, that is, the loser generally has to pay the winner’s costs calculated according to an appropriate County Court scale.  See the page on VCAT’s website about these kinds of applications, which includes the correct form for initiating these kinds of proceedings.

Following filing, VCAT generally sets down a directions hearing of its own motion. There is a standard form of orders which is often made.  They are reproduced below.  To avoid a directions hearing, applicants would be well-advised to include the details (‘particulars’ in legal lingo) the usual orders require in the application itself.  The applicant should then ask the respondent whether it will consent to doing what the usual orders generally require within, say, 2 weeks.  Alternatively, if that was not done at the outset, the parties might consider submitting the orders they would each be happy with (‘a minute of consent orders’ in legal lingo) in the terms of the usual orders to VCAT in advance, saving the need for a trip to VCAT if the decision maker who would otherwise preside at the directions hearing is content to make the orders on the papers.  Of course, a directions hearing may be necessary anyway.  Directions made at directions hearings are not necessarily limited to those found in the usual orders.  Nor are the usual orders always made.

The usual orders are:

Continue reading “Procedure in applications to set aside costs agreements”

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Giant solicitors’ lien case

The Supreme Court of NSW recently delivered a giant decision about a solicitor’s costs agreement and a fight over the right to possession of the solicitor’s file.  Acting Justice Debelle’s reasons in PM Sulcs & Associates Pty Ltd v Oliveri [2009] NSWSC 456 exceed 33,333 words.  Ultimately, his Honour found there was no costs agreements, with the result that legal costs, though still payable, were payable only on a quantum meruit basis at common law.  Though what those fees amounted to on a quantum meruit basis was unascertained, no bills having been given on that basis, it was still enough to support the solicitor’s assertion of a lien for unpaid costs as justification for refusing to deliver up the file.  I have not read the decision, but though an argument that there was a retrospecive costs agreement failed, it seems to have failed on the facts rather than on any legal difficulty with the concept of a retrospective costs agreement.