Slobodan Catovic did not want to pay his solicitor’s bill. He misconceivedly invoked the Legal Profession Act, 2004 provision which allows clients to apply to set aside costs agreements, but that is not what he wanted to do. Senior Member Howell satisfied himself that Mr Catovic had intended to bring an application under the Fair Trading Act, 1999, and ordered that the application be treated as a small claim under that Act. He even told the Registrar to refund Mr Catovic the difference between the fee on an application to set aside a costs agreement and the paltry fee payable on the institution of a small claim under the Fair Trading Act, 1999. See Catovic v H Solicitors [2008] VCAT 840. On the propriety of the cross-fertilisation of VCAT’s jurisdictions, see also this post.
Ownership of documents on a solicitor’s file
Update, 21 December 2017: An English costs judge has made a decision about whether clients can demand, as of right, further copies of lawyers’ documents already received by the client (e.g. file copies of letters from lawyer to client). He said no, not even if they want them to work out whether to seek taxation of costs. The decision does not say, of course, that the Court would not order production in any case, but rather simply says that clients have no entitlement to them, even if they offer to pay for the copies. The case is Green v SGI Legal LLP [2017] EWHC B27 (Costs). A note about it is here.
Original post: This post is like a case book(let) rather than a text. It sets out the raw materials which bear upon the question of who as between solicitor and client owns (in the sense of is entitled to the original of) what documents typically found in a solicitor’s file. It is very long, and largely unsummarised: a resource to go back to rather than something to trawl through now. It is the product of reading Wentworth v De Montfort (1988) 15 NSWLR 348 (the subject of this separate companion post), the leading case on the question in NSW, and the cases which have considered it since. One day, hopefully, I will do a shorter post summarising the principles.
The state of the law is a scandal. For a start, it is ridiculously uncertain. To the extent it is certain, it is ridiculously difficult to interpret. These deficiencies give rise to abuse. An appropriate law would be that every client ought to be entitled to inspect the whole of a solicitor’s file, and ought to be able to have the whole of the original. Even smart institutional clients do not stipulate for this when negotiating retainers. Presently, the law (or an interpretation of it which is universally tolerated in Victoria) allows solicitors to take bits out of the file and give the client only what remains, so as to leave them with an incomplete whole, a thing without internal integrity, nothing but one part of the jigsaw of the past, an aid rather than a map for the reconstruction of past events. It is little known that the lien will trump an obligation in the solicitor to discover the file to the client (though the solicitor must discover the file to others). In fact, the solicitor is obliged to give discovery but not to allow inspection: Hammerstone Pty Ltd v Lewis [1994] 2 Qd R 267, a case I have caused to be put into play successfully twice, once in the Magistrates’ Court and once in VCAT’s Legal Practice List.
Solicitors’ Professional Conduct and Practice Rules, 2005 (‘7. Ownership of Clients’ Documents – Termination of Engagement’) provides Continue reading “Ownership of documents on a solicitor’s file”
Wentworth v De Montfort: a case on ownership of documents in solicitors’ files
This post is a companion to this longer companion post which discusses the other cases on the question of who, as between solicitor and client, is entitled to documents relating to their matter found on solicitors’ files and in their accounts. As the decision with the most detailed consideration of the question, it gets its own post.
Twelve classes of documents on a solicitor’s file were in issue in Wentworth v De Montfort (1988) 15 NSWLR 348, a decision of the NSW Court of Appeal. The key issue in the case was described in this way:
‘Ms Wentworth’s primary submission is that any documents brought into existence or received by Sly & Russell in relation to her litigation were documents created or received by Sly & Russell in their capacity as agents for their principal Ms Wentworth, and that, applying ordinary agency principles, any documents so created or received are accordingly hers. As I understand their case, the opponents do not deny that any document created or received by them only as agents for Ms Wentworth would belong to her. However they deny that any documents falling within the twelve categories were so created or received and submit that upon a number of principles applying to solicitors and other professional people, the documents falling within those categories are theirs.’ Continue reading “Wentworth v De Montfort: a case on ownership of documents in solicitors’ files”
Chakera v Kuzamanovic [2003] VSC 92
Chakera v Kuzamanovic [2003] VSC 92 is a decision of the Supreme Court of Victoria’s Justice Nettle in relation to the effect of a default under the costs disclosure regime under the Legal Practice Act, 1996. It stands for the proposition that in the case of complete non-compliance with the costs disclosure regime, the solicitor is still entitled to recover legal costs, albeit possibly on a reduced basis. The consequences of non-disclosure were spelt out in s. 91 of the Act. That section made it clear that costs were recoverable on a quantum meruit basis even where there was no valid costs agreement. All sounds pretty obvious now, but a Magistrate, tactfully unnamed, was adamant that non-compliance with s. 86 of the Legal Practice Act, 1996 meant that no fees for work done in a retainer could be recovered. ‘Nonsense!’, Justice Nettle said.
Today, the correlate of s. 86 of the old Act is s. 3.4.9,and the correlate of s. 91 is the rather more complicated s. 3.4.17.
Anshun estoppel’s application to the post-fees case professional negligence claim
To what extent can you defend a suit by your solicitor for fees and then turn around after settlement, or after the trial of that suit, and sue for negligence? The leading Victorian case on the question is Delahunty v Howell, unreported, Supreme Court of Victoria, Gray J, 12 May 1993 (BC9300688). It was an administrative law review of a decision of VCAT’s Senior Member Howell back when he was Registrar of the Solicitors Board. This post considers that decision and subsequent decisions of VCAT’s predecessors which have applied it. Continue reading “Anshun estoppel’s application to the post-fees case professional negligence claim”
VCAT runs out of patience with serial adjourner
I was drinking beer at The Peacock the other afternoon, and a VCAT member was muttering about the Supreme Court overturning VCAT decisions on the basis that applications for adjournment were not granted when they could have been cured by an order for costs. The suggestion was that the Court may have overlooked the fact that no costs are awardable in certain classes of cases. The other point was that in many lists, like the civil list, members are expected to churn through a case an hour, without the assistance of counsel on which decision makers generally rely on so heavily.
My conversation came back to me while reading HL v Fahey [2007] VCAT 2400, a case about Ms Fahey’s dissatisfaction with a bill for $1,199. Ms Fahey successfully sought 2 adjournments. The first time, she had to go to Norway for a qualifying competition for the Olympics. Her game is dressage. The second time, she simply wrote in sick. The third time, she attached a sick note from a doctor. VCAT told her that administrative adjournments were over and told her to come to the hearing and make her application there, and to be ready to proceed if she failed. She did not turn up, and so an order was made against her. She sought a review, akin to an application to set aside a default judgment. She sent a fax to VCAT at 9.36 a.m. before the 10 a.m. hearing in which she said she was ‘unable to attend today’s review hearing due to extreme illness’, and concluded ‘I will contact you again in the future to arrange a new review date.’ That attempt to direct the Tribunal to adjourn failed, and Senior Member Howell heard the case in her absence, saying: Continue reading “VCAT runs out of patience with serial adjourner”
VCAT cancels bill and leaves solicitor wholly unremunerated for sloppy work
Praag v W & T Lawyers [2008] VCAT 307 was a rare thing: a case in VCAT’s Legal Practice List actually prosecuted pursuant to the Legal Profession Act, 2004. Mr Praag was his late mother’s executor. Before her death, she lived in Canberra. Her assets were a house in Canberra and $50,000 cash. Mr Praag went to the respondent solicitors who said they would get probate of the will for $2,800. The scale cost for doing so was $499. They did not otherwise comply with the costs disclosure regime in the Legal Profession Act, 2004. In fact it was unnecessary to get probate in Victoria, and it would have been better to have got it in the ACT. Though Mr Praag was able to withdraw the cash from the Bank with the Victorian parchment, he was unable to deal with the house unless he resealed the probate in ACT, which cost a bit extra on top of the cost of getting probate. Member Butcher mentioned several ‘concerns’ he had before concluding: Continue reading “VCAT cancels bill and leaves solicitor wholly unremunerated for sloppy work”
On blogging
The other day, I did a very geeky thing which was also a bit unonline. I had a coffee with fellow lawyer blogger, the mysterious Legal Eagle. One result of the coffee was that somehow I charmed her into writing a second case note of interest to readers of this blog — this time on the long and not entirely straightforward decision of the Victorian Court of Appeal in Equuscorp v Wilmoth Field Warne, referred to briefly in my post ‘Cases, cases’. Go read it. A second may have been that Ms Eagle has ‘tagged’ me with a ‘meme’. It’s very blogosphere. I will participate, but one of the three limbs of this modern day chain letter is going to die with me as I don’t intend to tag anyone else. I will be very grateful if some of the effusive commenters over at her blog migrate over to mine and get a bit of discussion going. So, 3 reasons why I blog. Continue reading “On blogging”
Once the time for taxation runs out, the solicitor can sue on the bill as a simple debt
I have never been quite clear about what you have to prove in a suit for fees. I was attracted to the proposition that if a client wants to go through a bill item by item, the place to do that is in a taxation, and if they do not go down that path, or they can’t because they’re out of time, then no challenge of the kind typical of a taxation ought to be allowed in the suit for fees, that is, that the bill may be sued on as a debt due and owing. But I was never entirely confident about it.
The Full Legal Profession Tribunal’s 16 June 2000 decision in B v Home Wilkinson Lowry [1999] VLPT 1 is authority for many things (principally that state tribunals like VCAT have no jurisdiction over the costs of Family Court proceedings), and seems to be authority too for the proposition which attracted me. Continue reading “Once the time for taxation runs out, the solicitor can sue on the bill as a simple debt”
NSW wills and estates lawyers to have fees capped in family disputes
The Sydney Morning Herald reports plans by the NSW Attorney General to cap fees proportionately to the amount at stake. The article is a bit light on what that means exactly, but the Law Society of NSW President purported to welcome the changes.
WARNING: costs agreements and bills require amendment
Since 6 December 2007, the maximum interest chargeable on bills has dropped from 12% (the penalty interest rate) to the Reserve Bank Target Rate +2% (at the time of writing 8.75%), and the period of non-payment after which you can begin charging has changed too. You need to amend your bills because if you don’t put the right statement on them, you won’t be able to recover interest unless you dream up some sophisticated arguments. In the case of ongoing retainers, you probably need to send the first new bill of the new regime under cover of a letter advising a change in the rate applicable to unpaid bills. Otherwise, you might fall foul of the ongoing obligation to disclose any substantial changes to anything previously disclosed.
You do not have to express the interest chargeable as a percentage rate per annum. In my experience, the only time anyone ever charges interest is when suing for fees, after the relationship has broken down, or demanding payment of fees as a condition of staying on the record or giving up a file subject to a lien. Perhaps that was because the rate was so punitively high, and perhaps because too few people knew about the penalty interest rate calculator on the internet. Why not set a lower rate which is dead easy to calculate and actually make a habit of collecting interest? So long as the rate you are effectively charging works out lower than what you would charge if you charged the maximum annual percentage rate over the same period, you’ll be sweet. Read on to find out the answer to the questions someone in your firm is sure to ponder at some stage in the future: does it apply to bills given before 8 November 2007? Does it apply in retainers in which instructions were first taken before that date?
Continue reading “WARNING: costs agreements and bills require amendment”
How to calculate interest on post-5 December 2007 bills in Legal Profession Act, 2004 (Vic.) matters
What follows assumes that you have not made any special agreement in a costs agreement, and so the default position applies. It is truly an idiot’s guide because (i) I have great sympathy for people who have difficulties with numbers, and (ii) I well remember how grateful I was when a partner of Middletons, Mark Howard, showed me as an articled clerk how to calculate penalty interest. Continue reading “How to calculate interest on post-5 December 2007 bills in Legal Profession Act, 2004 (Vic.) matters”
Cases, cases
Update, 19 February 2008: Fellow Melbourne law blogger Legal Eagle has kindly written a case note on Equuscorp v Wilmoth Field Warne.
Update, 21 December 2007: Another two advocates’ immunity cases:
1. Symonds v Vass [2007] NSWSC 1274, 36,000 words, after nearly 3 weeks of trial. See Ysaiah Ross’s case note in his article in The Australian on 30 November 2007 titled ‘Let’s Dump Advocates’ Immunity’.
2. Mallik v McGeown [2007] NSWSC 1414.
Update, 19 December 2007: Fellow Melbourne law blogger Legal Eagle has done an excellent case note on the first case referred to below, saving me the trouble.
Original post: The Supreme Court and Court of Appeal is dropping cases on this blog like no tomorrow. I can’t keep up, so I will just bring them to your attention for the time being:
1. Re Legal Practice Act 2004; re OG, a lawyer [2007] VSC 520, in which the Court of Appeal today struck off the roll a barrister whose disclosure to the Board of Examiners about an allegation at university that he cheated on an assignment was found to be a lie. Legal Eagle provided a long note of the case here. In other news, a famous American judge, Richard Posner, wrote a book on plagiarism. He blogs too. Update: 29 January 2008: And compare this American case (In the Matter of Willie Jay White, Supreme Court of Georgia) about an applicant for admission to practice which was denied because his explanation for curious similarities between his work and another’s at law school was not believed.
2. Equuscorp Pty Ltd v Wilmoth Field Warne (a firm) [2007] VSCA 280, a case about whether estoppel by convention could operate against the prima facie disentitlement in a solicitor to recover fees under a void costs agreement, and about where exactly the dividing line is between a void and a good costs agreement. It is the latest in a long saga.
3. Coadys (a firm) v Getzler [2007] VSCA 281, a case covering much the same territory as the Equuscorp Case. This case and the previous one will be very important for the interpretation of the Legal Profession Act, 2004‘s costs provisions.
4. Francis v Bunnett [2007] VSC 527, in which Justice Lasry dismissed an application for summary judgment by reference to advocates’ immunity in a classic regretted settlement case. That is, his Honour was not persuaded of the hopelessness of the client’s argument that where there has been no adjudication after a trial, there is no finality of the kind protected by the immunity which is worthy of protection. It is notable that a number of cases which have gone the other way are not mentioned in the judgment.
5. MM&R Pty Ltd v Grills [2007] VSC 528, a decision of Justice Cavenough yesterday about the availability of advocates’ immunity as a defence to a suit alleging simple delay, and where there has been no adjudicated decision of a court worthy of protection. His Honour recognised that the immunity applied in such circumstances.
It will be interesting to read the two advocates’ immunity decisions more carefully, and tease out to what extent they are consistent with one another.
Sudden eruption of unconscionability amongst solicitors further documented
Updated, 4 January 2008: See the underlined additions below (with thanks for the references to Jason Pizer’s book at p. 246).
Original post: Now two unrepresented folk have managed to convince VCAT’s Legal Practice List’s Member Butcher in a Fair Trading Act, 1999 claim that yet another solicitor has been acting unconscionably towards his clients in relation to fees. The decision in Alexander v HWL [2007] VCAT 2297 (and two earlier decisions posted about here and here and here) suggests two separate schisms between VCAT’s decision makers:
- The first between those who hold that solicitors engage in trade or commerce when they provide professional services to clients (such as Member Butcher) and those who hold that they do not (such as Senior Member Howell and Deputy President Steel); and
- Secondly, between those who emphasise that only in cases of highly unethical behaviour should a finding of unconscionability be made (such as Senior Member Vassie) and those who presumably consider that test to be a little on the stringent side (such as Member Butcher). Continue reading “Sudden eruption of unconscionability amongst solicitors further documented”
Solicitor gets away with fees of $83,000 after estimating at $2,500 and never updating
Ok, ok, that’s a bit of an exaggeration, but the solicitor did put out a costs agreement and fee disclosure document which contained no estimate other than $2,500, and did charge $111,000, which was reduced on an assessment — a NSW privatised version of taxation — and did not provide any re-estimates before putting out the first bill for $88,000. Savings Factory Pty Ltd v Daniel [2007] NSWSC 1343 is a useful case to illustrate that failure to comply with costs disclosure regimes is not the end of the world for lawyers. You just have to get the costs taxed at your expense. Justice Palmer held that the estimate was just an estimate, and was confined to one part of the work which was to be the subject of the retainer (no estimates were provided in respect of the other work). Here, the client maintained the solicitor’s retainer long after receiving the initial bill.
The case also illustrates another principle which you would think lawyers would get fairly readily, but which, sadly, we don’t. It is that you can’t just put your rates up whenever you feel like it. One reason why about 20% was taxed off the bills was that the lawyer’s rates were allowed only at the rate originally provided for under the costs agreement.
Director of company counterclaiming for negligence in professional fees claim pays costs personally
In Chantrey Vellacott v The Convergence Group PLC [2007] EWHC 1774 (Ch) chartered accountants sued their former client for a quarter of a million pounds sterling in fees. They were met with one of those absurd counterclaims which such suits often generate, for negligence, claiming 115 million pounds sterling in damages. The defendant and counter-claimant’s director was ordered to pay the accountants’ costs of the claim and counterclaim personally. Latham & Watkins’s note of the case says:
‘Rimer J found that Mr Robinson was the real party to the litigation and had been “personally responsible for the prosecution of a false and dishonest case”. He had prevented Chantrey from obtaining security for costs and had assisted the funding of the litigation personally and through other companies within his control. Rimer J also found that had the counterclaim been successful the ultimate benefit would have passed, via a family trust, to Mr Robinson.’
The latest English cases on non-party costs orders in England mentioned are: Continue reading “Director of company counterclaiming for negligence in professional fees claim pays costs personally”
More on unrepresented litigants
About a week ago, I posted about Mr Milan Tomasevic and how Justice Bell thought the judge below had not been solicitous enough to him. A reader of this blog has filled me in on Mr Tomasevic’s form. One of his early cases, Zegarac v Tomasevic [2003] VSC 150, was a Part IX adjustment of property rights claim by his former defacto spouse Slavica Zegarac, and is a good example of the challenges presented by two litigants in person. Subsequently, Slavica Zegarac has got a taste for the game by suing her solicitor: see Zegarac v PD [2005] VSC 264, and then resisting the solicitor’s suit for her bankruptcy, all the way to the High Court: Zegarac v PD [2007] HCATrans 526 where her special leave application was over in less than 2 minutes.
Withdrawing complaints under the Legal Profession Act, 2004
In the Victorian Legal Services Commissioner’s 2006-2007 annual report, she makes the following points about withdrawing complaints under the Legal Profession Act, 2004:
- civil complaints and disciplinary complaints alike may be withdrawn;
- if a civil complaint which is characterised as a costs dispute is withdrawn, any costs paid into trust at the outset must be paid to the lawyer;
- if a disciplinary complaint is withdrawn, the Commissioner may nonetheless continue to investigate the conduct of the lawyer.
VCAT does not invoke Fair Trading Act to cure want of Legal Profession Act jurisdiction
In Huang’s Case [2007] VCAT 1692, Senior Member Howell was presented with a case brought by a man who had initiated the Legal Profession Act, 2004‘s lawyer-client costs dispute process by lodging a civil complaint with the Legal Services Commissioner. The scheme of the Act is that the Commissioner tries to settle the dispute, and if she can’t, she gives the punter a ticket to take the dispute to the next level, VCAT’s Legal Practice List: s. 4.3.7. Mr Huang jumped the gun, and didn’t wait to get his ticket before commencing VCAT proceedings.
Senior Member Howell dismissed the dispute for want of jurisdiction. Because of the implied repeal of the (Victorian) Legal Profession Act, 2004 insofar as it relates to many aspects of solicitor-client costs charged in Family Court proceedings by the (Commonwealth) Family Law Act, 1975, there was no discussion of recognising a jurisdiction under s. 108 of the Fair Trading Act, 1999 and using that to establish jurisdiction. Very appropriate too, since it would be logical that the Fair Trading Act, 1999 is no less impliedly repealed in its application to lawyer-client costs disputes which are governed by the Family Law Act, 1975 than the Legal Profession Act, 2004. Continue reading “VCAT does not invoke Fair Trading Act to cure want of Legal Profession Act jurisdiction”
Ways for lawyers to cope with costs disclosure defaults
Under Victoria’s Legal Profession Act, 2004 the most apparently draconian consequences follow for the slightest non-compliance with any of the elaborate pre-retainer disclosures required to be made by solicitors. Under s. 3.4.17, if the lawyer has not disclosed something required by the relevant bit of the Act to be disclosed:
- the client ‘need not pay the legal costs until they have’ been taxed as between solicitor-client in the Supreme Court, generally at the solicitor’s expense;
- the solicitor ‘may not maintain proceedings … for the recovery of legal costs’ until the end of such a taxation; and
- the client ‘may apply … to set the costs agreement aside’.
In Dennis v Cameron [2007] NSWCA 228, the New South Wales District Court and its Court of Appeal unanimously decided a case about failures to disclose various things in a bill of costs (and by operation of NSW legislation, the result was that no suit could be brought on it for recovery of fees claimed in it). If the case is followed in Victoria and extended to pre-retainer costs disclosure defaults, some balance might be introduced into the unprecedentedly strict regime introduced on 12 December 2005, which I reckon the profession is just beginning to feel the bite of. I was in VCAT’s Legal Practice List today battling over my solicitor client’s bill of costs, and she was certainly complaining. The decision suggests that:
- the defects may be waived by the client, after which he or she will be estopped from relying on them (at [39] having cited In re Gedye (1851) S.C. 20 L.J. Ch. 410);
- little compromises in relation to outstanding fees may amount to fresh contracts which may be sued on even if the original bills could not, so that the subsequent suit is not ‘to recover legal costs’ but is for breach of the compromise, and so is not barred by the prohibition on maintaining such suits before completion of a taxation (trial judge’s judgment, see Court of Appeal’s judgment at [22], citing Koutsourais v Metledge & Associates [2004] NSWSC 313; and
- it is unnecessary to disclose to a client that which he already knows (at [46], citing Hogarth v Gye [2002] NSWSC 32 at [25].)
The decision is a wake up call to the profession which tends to be unable to focus on anything other than the legislation. But the legislation is not a code. A costs agreement remains a contract, and all the law that flows around contracts — including equity — can be brought to bear, to the extent not inconsistent with the legislation. There is a lot of law about retainers and costs agreements, and it can be worth looking up (undoubtedly the best place to start is Dal Pont’s Law of Costs in Australia). There is also much room for original thought by those who have a good grip on the law of obligations. Continue reading “Ways for lawyers to cope with costs disclosure defaults”