IGA Distribution Pty Ltd v King & Taylor Pty Ltd [2002] VSC 440

IGA Distribution Pty Ltd v King & Taylor Pty Ltd [2002] VSC 440 - VSC 2002 case summary — Zoe

[58]

"Ms Natasha Zusman Corporate Solicitor Metcash Trading Limited PO Box 6226 SILVERWATER BUSINESS CENTRE NSW 1811 - By Facsimile: (02) 9741 3027 - Dear Natasha, SUB LEASE KINGS PARK SUPERFRESH PTY LTD (TYSULE NO.14 PTY LTD) FROM DAVIDS DISTRIBUTION PTY LTD Thank you for your correspondence of 28 March 2001. It is usual in Victoria for the Landlord's Solicitors to prepare the Section 83A Statement which is an estimate of rent for stamp duty purposes. This is usually provided by the Landlord's Solicitors, signed by the Tenant, returned to the Landlord's Solicitors who then pay the stamp duty. You asked me to arrange for the Agreement to Sub Lease to be stamped and accordingly I prepared a Statement, a copy of which is enclosed and which I consider accurately reflects the rent payable under the Lease when it comes into existence. I agree with you that any guarantee of the Agreement for Lease can be dated at any time and entered into under the name of the then appropriate entity. I can not see that it is necessary that the Agreement for Lease and the Deed of Guarantee have the same date. I repeat my concern that although Davids has entered into an Agreement to Sub Let, at the present time it does not have the documentation to support its ability to do so. I would have thought that from your own point of view, the Tenant would want to minimise any penalty stamp duty or interest incurred as a result of the Agreement to Lease not being stamped. I consider that it is essential that the Agreement to Lease (Head Lease) be dated at a time when Davids was in existence rather than when it changed its name as Metcash. A Lease should be stamped within 3 months of it being dated and the Agreement to Sub Lease should therefore be dated at a time when Davids is the Tenant which, ceased to be the case some months ago. I suggest that you adapt in any way you consider desirable, the enclosed Section 83A Statement and submit it to Richard referring, once again, to the fact that you have not had any response to your letter of 18 December. (Emphasis added.) Both I, and no doubt my client, are concerned at the additional legal costs being incurred as a result of there being no valid Agreement to Lease, duly executed and stamped, being available at the present time. However, I do not consider that I have done my job until this takes place. Should you have any queries, please to no hesitate to contact me. Regards Roger J King"

[280]

"It is well-established that a professional engagement may be implied (Allen v. Bone [1841] EngR 1203; (1841) 4 Beav. 493; 49 E.R. 429; Morgan v. Blyth [1891] 1 Ch. 337 at 355; Vroon BV v. Fosters Brewing Group Ltd. [1994] VicRp 53; [1994] 2 V.R. 32 at 83 per Ormiston J.) or inferred (as Tadgell J. preferred to put it, in Toyota Motor Corporation Australia Ltd. v. Ken Morgan Motors Pty. Ltd. [1994] VicRp 55; [1994] 2 V.R. 106 at 178). The question whether a relationship of solicitor and client had been established was considered recently in Pegrum v. Fatharly (1996) 14 W.A.R. 92 by the Full Court of the Supreme Court of Western Australia. Kennedy, Ipp and Anderson JJ. held that such a relationship would be presumed if the conduct of the parties showed that the relevant relationship had, in fact, been established between them. In Integrated Computer Services Pty. Ltd. v. Digital Equipment Corporation (Aust.) Pty. Ltd. (1988) 5 B.P.R. 11, 110 at 11,117, McHugh J.A. said that a contract may be inferred from the acts and conduct of parties as well as or in the absence of their words, but that: The question in this class of case is whether the conduct of the parties as viewed in the light of the surrounding circumstances shows a tacit understanding or agreement. The conduct of the parties, however, must be capable of proving all the essential elements of an expressed contract. See also Groom v. Crocker [1939] 1 K.B. 194 at 222 per Scott L.J. In Pegrum v. Fatharly, to the facts of which I will later, Ipp J. said at 95: A contractual relationship of solicitor and client will therefore be presumed if it is proved that the relationship of solicitor and client existed de facto between a solicitor and another person. Upon proof of that kind it would not be necessary to prove when, where, by whom or in what particular words the agreement of retainer was made... [T]he de facto relationship of solicitor and client has to be a necessary and clear inference from the proved facts before a retainer will be presumed. In this passage, Ipp J. said that he was applying `the rule expressed by Thomas J. in Australian Energy Ltd. v. Lennard Oil NL' [1986] 2 Qd. R. 216 at 237. If the rule as so expressed means no more than that one has to find a necessary inference, on the balance of probabilities, of the kind suggested, I have no difficulty with it. The words used by Ipp J. (and, for that matter, Thomas J.) make use of the established formula for the implication of terms in a contract, and apply that formula to the process by which an agreement is to be inferred. If, in so doing, their Honours were suggesting that a test more stringent than the balance of probabilities was to be used to establish the existence of an inferred or implied retainer, a real question would, with respect, be raised as to whether the test was correctly posed."

[282]

"In Pegrum v. Fatharly the facts were that a man called Wilkins and his group of companies wished to borrow money from the appellants. The loan deed and securities for this purpose would ordinarily be prepared by the lender's solicitors, at the borrower's expense. Wilkins proposed to the male appellant that the respondent, who was retained as solicitor for the Wilkins group, prepare all the documents, and the male appellant agreed. Both parties together visited the solicitor and gave him the information to be put into the documents, it being understood that he was the only solicitor involved in receiving instructions and in preparing the documents. At the meeting, the solicitor sought and obtained the male appellant's confirmation that it was in order for him to prepare the documents. In these circumstances the court held that there was an implied retainer. Anderson J said, at 102, that: When both parties to a transaction consult the same solicitor and together given him the information needed to prepare the documents in which their respective rights and obligations are to be set out and the solicitor accepts responsibility to prepare the documents without any indication that he cannot fully discharge his professional duties to them both there is a strong bias towards finding that the solicitor tacitly agrees to act for both parties and to undertake the usual professional responsibilities to them both: see Midland Bank Trust Co. Ltd. v. Hett, Stubbs & Kemp [1979] Ch. 384 esp. at 396. In the absence of a clear indication by the solicitor that the solicitor does not accept one of the parties as his client it is natural in such a case to assume both are relying on him for professional advice and assistance. This follows from the mere fact that both have consulted him. There may be other circumstances which show that there is no reliance by one or other of the parties on the solicitor, but, if not, reliance should be inferred as a fact. And when a solicitor accepts responsibility to do professional work requiring special knowledge and skill and there is in fact a reliance on him to apply his expert knowledge and skill in the performance of that work, there exist `the elements which lie at the heart of the ordinary relationship between a solicitor and his client...': See Hawkins v. Clayton (1988) 164 C.L.R. 539 at 578 per Deane J. An examination of the facts in Pegrum v. Fatharly shows at once a situation very different from the present case. The fact that both parties to the transaction consulted the same solicitor together (mentioned twice in the paragraph just quoted) was clearly fundamental to the finding that a retainer existed. In the present case, it is clear that Meerkin & Apel's instructions came from W.O.T.P., through U.P.I. Rossett did not consult the solicitors at all. On the evidence Rossett provided no information to Meerkin & Apel, although Cook drew the attention of W.O.T.P. to errors in the documents. Rossett was, of course, consulting its own solicitor, Elliott, at this time in relation to matters involving the units."

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