Billing v De Kretser

This is a request by a solicitor for summary judgement under s 75 of the Victorian Civil and Administrative Tribunal Act 1998 (VCAT Act) in relation a claim made against him by his former client alleging negligence. The solicitor has also made a claim for payment of his fees for that same work. The solicitor relies on advocate's immunity.
The respondent, Mr De Kretser, acted as solicitor for the applicant, Mr Billing, in family law proceedings from October 2011 to April 2012. Mr Billing says that Mr De Kretser lodged a Financial Statement which understated his weekly financial commitments. As a consequence, an interim spousal maintenance order was made on 16 March 2012 which was beyond his means. He says this was the result of Mr De Kretser's negligence and breach of the terms of his retainer in compiling the Financial Statement, and also in not challenging, in cross examination or otherwise, the figures provided by his former wife in her Financial Statement.
Mr Billing terminated Mr De Kretser's retainer and retained new solicitors (Aughtersons). His application to VCAT alleges that he was put in the position of having to spend $7,800 on additional solicitors' and counsel's fees to rectify the damage done by Mr De Kretser's alleged negligence and breach of retainer. I was told the issue of the financial disadvantage to Mr Billing in terms of spousal maintenance payments was resolved as part of the overall negotiations between the parties. These were conducted leading up to the final formal settlement between them, which occurred on or shortly after a compulsory conference on 30 May 2012.
Mr Billing also claimed that he should only have to pay $450 of Mr De Kretser's final bill, dated 30 March 2012, for $3,795 (which has not been paid) and that he should be refunded $2,000 from Mr De Kretser's second last bill, dated 15 February 2012, for $3,259.30 (which Mr Billing has paid).
At some point, Mr Billing lodged a complaint to the Legal Services Commissioner (LSC) about Mr De Kretser. I was told that on 15 August 2012, the LSC issued a notice under s.4.3.15 of the Legal Profession Act 2004 (the LP Act) stating that the LSC could not resolve the dispute and that Mr Billing could within 60 days make an application for the determination of the matter by VCAT as a civil dispute under the LP Act.
On 18 September 2012, Mr De Kretser commenced proceedings in the Magistrates' Court against Mr Billing, seeking payment of his final bill of $3,795. On 13 November 2012, Mr Billing exercised his right to have that matter in effect transferred to VCAT under s.112A of the Fair Trading Act 1999 (FTA) being the legislation applicable at the time the legal services were provided. Mr Billing paid the sum of $3,795 into trust at VCAT. No separate document articulating Mr De Kretser's claim for that debt of $3,795 has been lodged by Mr De Kretser at VCAT. However, he made it clear he does wish to pursue his claim for that debt in VCAT.
On 12 November 2012, Mr Billing lodged his claim against Mr De Kretser in the Civil Claims List of VCAT. It specified the amount of $9,350 claimed against Mr De Kretser. The VCAT application stated that it was brought under the FTA. This was approximately one month after the expiry of the 60 day period for the bringing of a civil claim to VCAT under the LP Act.
The matter was set down for hearing on 15 January 2013, but adjourned at he applicant's request, to a date to be fixed. On 6 March 2013, Mr De Kretser filed an application for an order under s 75 of the VCAT Act seeking that the applicant's claim in this VCAT matter number C7921/2012 be summarily dismissed. The application also sought 'that summary judgement be entered for the Plaintiff in Magistrates' Court proceeding number C 12727665' (although that matter had of course by now been transferred to VCAT). On 22 March 2013, the matter was set down for the hearing of the respondent's s 75 application.
The claim had been pursued by the applicant in person up to this point. On 23 April 2013, his new solicitors in the family law proceedings, Aughtersons, sought leave for Mr Billing to be legally represented, and that request was granted the next day.
That application came before me on 8 May 2013. Mr Billing was represented by Mr Magowan of counsel. Mr De Kretser relied on advocate's immunity as a complete answer to Mr Billing's claim against him. He said the claims made by Mr Billing related to his appearances in court on Mr Billing's behalf as an advocate, and other work that was so intimately connected with those appearances that it was covered by the immunity as well.
Section 75 does not confer a power on VCAT to enter summary judgement for an applicant. However, the immunity was argued in relation to both the claim brought by the applicant, and the claim brought by the respondent which has been transferred from the Magistrates' Court. It was also implicit in the argument put by both parties that if the immunity applied, it would constitute a complete answer to Mr Billing's claims, and hence satisfy the requirements of s 75 of the VCAT Act, in relation to the claim for negligence and breach of retainer. The test in s 75 is not easy to satisfy. However, where the immunity applies, this will constitute a 'knock-out point' such that it can be said the claim is doomed to fail.

[4]

The main focus of the argument put Mr Magowan was on the ability to rely on the immunity in support of the claim by Mr De Kretser for debt. He contended that whilst the immunity could be relied upon as a defence to a claim for damages for negligence against a lawyer, it cannot be relied upon to defeat a defence alleging negligence in response to a proceeding for recovery of a debt for unpaid fees. He said the immunity was an immunity from suit, not an immunity which can be invoked in aid of a claim for debt. He said he was not able to find any authority to support this contention, but it followed from first principles.
The implication of this was that even if the immunity applied as a defence to Mr Billing's claim of negligence, the immunity would not defeat Mr Billing's defence of negligence in relation to the claim by Mr De Kretser for $3,795 fees.
Mr Magowan nevertheless contended that parts of Mr Billing's civil claim at VCAT were not defeated by the immunity, or at least that there were enough uncertainties in relation to the matter or to defeat the s 75 application.
He abandoned one component of the claim his client had made in the original application to VCAT, namely $2,500, being compensation sought for $500 Mr Billing had paid his wife under the spousal maintenance order prior to the final order being made, plus $2,000 in arrears that was 'accounted for in the final settlement'. This left claims for three amounts: $2,000 (claimed back from the 15 February 2012 bill for $3,259.30) $2,800 (being solicitor's fees said to have been incurred in overcoming the effect of the spousal maintenance order) and $2,500 (being counsel's fees for the same purpose). These figures total $7,300.
Mr Magowan contended that it was not the case that if the immunity applied VCAT no longer had jurisdiction to consider his client's claims.
He submitted that it was not a simple exercise to 'unpick' the items of work done by Mr De Kretser which were infected by negligence, and to which the immunity did not apply, from those which were properly recoverable by the solicitor.
Mr Magowan also suggested that the disclosure requirements of the LP Act had not been complied with, and so s 3.4.17(1) of the LP Act applied, with the effect that his client 'need not pay' Mr De Kretser's bill.
He also referred to the decision in Nagy v Gilbert Bell trading as Gilbert Bell & Co.[1] In that decision the Tribunal found that despite being purportedly made under the FTA, the claim in that case was in fact a civil claim under the LP Act, and the Tribunal dealt with it as such. He referred to the possibility of seeking an extension of time to run Mr Billing's damages claim under the LP Act and running it in tandem with an application to set aside the costs agreement.
Mr Magowan then suggested that given that the lawyer's actions the subject of the Nagy case clearly fell within the scope of the immunity, and because the Tribunal did not make any reference to the immunity in that case, it can be concluded that the LP Act provisions exclude the immunity.

Billing v De Kretser - [2013] VCAT 785 - VCAT 2013 case summary — Zoe

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Judgment (34 paragraphs)

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Cases Cited (5)

Billing v De Kretser (Civil Claims) [2013] VCAT 785 (17 May 2013)