GOLDSMITH v VILLANUEVA & ANOR [2000] NSWSC 1181 | Case summary

1 HIS HONOUR: This claim arises out of an essentially simple factual context. A client had gone to the plaintiff's firm seeking advice and assistance in connection with immigration litigation. The client was seen by an employed solicitor. There was evidence before the Magistrate, which the Magistrate was entitled to accept, that the employed solicitor had decided not to charge the client for work in addition to that which had under a separate retainer been paid. 2 There is no issue in the case that that solicitor had decided not to charge fees and there can be no issue with the finding of fact by the learned Magistrate that the defendant understood that he was not to be charged fees, although how that was communicated to him might be uncertain. In my view this uncertainty does not matter. 3 Accordingly, there was no debt owed to the plaintiff by the first defendant concerning the work in question, as the employed solicitor acting for the firm had not intended to enter into a contract of which the payment of fees was an incident. The better view is there was no contract of retainer at all although, of course, the agreement that no fee would be paid did not reduce the professional responsibility of the employed solicitor in respect of the work done by her. 4 Following the employed solicitor's dismissal the plaintiff reviewed his files and discovered that no memorandum of fees had been rendered and no fees had been collected by her. Thinking (and it was reasonable for him to do so) that this was an oversight of one kind or another by the employed solicitor, he demanded that the first defendant should pay the fees hitherto not charged. 5 It matters not what course those negotiations took but, in the end, they resulted in the compromise agreement for the payment of $4,000. $1,500 was in due course paid by the first defendant but the plaintiff was forced to sue for the outstanding balance. 6 A number of defences were raised to the claim including in particular matters arising under the Legal Profession Act 1987 and the Contracts Review Act 1980. As to the first the defendant relied on the provisions of section 189 which are: " 189 Rights may not be waived (1) Any provision of a costs agreement or other agreement that is inconsistent with this Division is void to the extent of the inconsistency. (2) In particular, any provision of a costs agreement or other agreement that purports to waive rights to an assessment of costs under this Part, or the right to receive a bill of costs in the form required for assessment under this Part, is void". 7 With deference to the argument put to me by Mr Segal for the plaintiff in this regard and because of the possible significance of this provision to the profession I should state that it is my view that the words "or other agreement" in s 189 can relate only to prospective obligations. 8 Insofar, therefore, as the first defendant's case depended on this provision I consider that he must have failed, despite the somewhat tentative finding by the Magistrate that there was still some trivial work to be done at the time of the compromise agreement. 9 However, the learned Magistrate also refused to enforce the contract under the Contracts Review Act 1980. It is unnecessary for me to set out here all the circumstances that were material to the learned Magistrate's decision as identified by him. They included the educational and language difficulties of the first defendant, the position of the plaintiff as his solicitor, the failure to inform the first defendant of his rights to a detailed bill of costs or otherwise to assessment (the plaintiff having considered it sufficient to refer the first defendant to independent advice) and the circumstance that in substance there was an agreement that no fees would be paid for the work, a matter which (as I have already said) was not in the knowledge of the plaintiff. Taken together I have no doubt that these matters provided a more than adequate basis for a finding by the learned Magistrate in favour of the first defendant under this head. 10 It is submitted in this Court by Mr Segal on behalf of the plaintiff that the Magistrate's reasons were inadequate in dealing with this claim and, insofar as he relied upon s 189 of the Legal Profession Act 1987, he was mistaken. 11 I do not read the reasons for Magistrate's decision as depending upon his interpretation of s 189 as distinct from ascribing a motivation to the plaintiff (of a desire to avoid provision of a detailed bill or assessment) for which there was, in my view, an adequate basis. 12 The learned Magistrate stated that he adopted the submissions of the first defendant concerning the defence under the Contracts Review Act 1980. Those submissions were in writing and sufficiently set out the basis, to my mind, of the Magistrate's conclusion, although his reasons did not ascribe any particular weight to the different considerations to which the submissions adverted. In my view it was unnecessary for him to do so. 13 I should state, however, that it is in general undesirable for a tribunal determining matters such as this to adopt submissions in substitution for reasons. This will frequently give rise to uncertainty as to precisely what it was intended to convey, particularly as submissions are often not only written but delivered orally. However, in the circumstances of this case I consider that the reasons for decision of the learned Magistrate do not by virtue of that circumstance give rise to an error of law. 14 Accordingly I give judgment for the first defendant against the plaintiff on the summons. 15 The plaintiff also claimed that, in the event that the first defendant was not obliged to pay fees because of the agreement, whether explicit or implicit, entered into on behalf of the firm between him and the second defendant, that the second defendant was in breach of contract and that the damages should be the fees otherwise properly payable. 16 The learned Magistrate found in favour of the second defendant upon this issue. Regrettably, the Magistrate did not in this respect adequately distinguish between what may have been an "appropriate" decision for the second defendant to have made and, on the other hand, the implicit or explicit terms of her contract of employment. 17 The undertaking of pro bono work is a desirable, indeed a necessary part, of every solicitor's practice and the vast majority of solicitors willingly undertake this work. However, I am of the view that it is not, by virtue of any necessary implication, open to an employed solicitor to undertake work, certainly substantial work, for no fee without authorisation from his or her employer. 18 Mr Whitelaw for the second defendant submits that the second defendant was employed in a managerial position and was no mere employee. I do not think that this was an evidentiary basis for a conclusion that the second defendant had authority to waive any fee obligation of a client, whether before or after the work was performed. 19 The true terms of a contract are questions of law or at least mixed fact and law, in respect of which I consider, with respect, the learned Magistrate erred. If the ability to provide pro bono work were an implicit part, generally speaking, of an employed solicitor's contract of employment that is a provision of such general importance that warranted far more evidence than was available to the Magistrate for its determination and certainly required some explicit consideration of the fundamental elements that might lead to such a conclusion. 20 If it were not generally part of an employed solicitor's authority, as Mr Whitelaw concedes, then a close analysis was required, or at least an analysis far more extensive than that given by the learned Magistrate of the evidence before him that justified the implication of such authority from the giving of management responsibilities to the second defendant. 21 I am of the view that, in the end, there was no evidence that permitted the learned Magistrate's conclusion. At all events, in failing to give reasons for his finding beyond an assertion that it was implicit in the second defendant's contract of employment that she had the authority to undertake work for no fee, the learned Magistrate's judgment in this respect cannot stand. 22 Accordingly, I give judgment for the plaintiff against the second defendant in respect of the summons. 23 I order the plaintiff to pay the first defendant's costs of the Court below. I order the second defendant to pay the plaintiff's costs of this appeal and the plaintiff's costs in the Court below attributable to the litigation between the plaintiff and the second defendant. I remit the question of damages to the Local Court to be dealt with according to law and for better clarity I point out that in my judgment the facts permit but one conclusion in law, namely, that the second defendant was in breach of her contract with the plaintiff by agreeing to undertake work without fee on behalf of the first defendant and by failing to inform the plaintiff that she had done so. *****************

GOLDSMITH v VILLANUEVA & ANOR

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Decision date

Before

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Judgment (8 paragraphs)

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Cited By (2)