Victorian Civil and Administrative Tribunal|2009-01-30

Leong v J P Sesto & Co (Legal Practice) [2009] VCAT 99 (30 January 2009)

Costs agreements - application for cancellation under Legal Practice Act 1996 - grounds for cancellation.

Costs agreements - time based charges agreed upon - whether subject to assessment by Taxing Master - Legal Practice Act 1996 ss 101, 109.

Misconduct - unsatisfactory conduct - whether such allegations were made out - whether costs agreements "not fair and reasonable".

Costs agreements - requirement to give estimates of costs - effect of failure to give estimates - Legal Practice Act 1996 ss 86, 90, 91.

Parties - identification of the clients who were parties to the costs agreements - applicants not the only clients - whether that affects their rights to claim relief.

Fair Trading Act - jurisdiction - whether alternative remedies available under that Act - whether conduct was misleading or deceptive, or unconscionable - whether solicitor's conduct was "in trade or commerce" - whether a solicitor supplies "services" - Fair Trading Act 1999 ss 3, 8A, 9, 107, 108, 158, 159.

Leong v J P Sesto & Co (Legal Practice) [2009] VCAT 99

(a) "Sesto" means John Sesto, when trading as J.P. Sesto & Co;
- (b) "Jadewealth" means the interested party Jadewealth Pty Ltd;
- (c) "Aljade" means Aljade Development and Construction SPN BHD (in liquidation).

The costs agreement evidenced in writing dated 7 May 2002 between the applicants and Jadewealth as clients and Sesto as solicitor, and the costs agreement evidenced in writing dated 21 March 2003 between the applicants, Jadewealth and Aljade as clients and Sesto as solicitor, are each cancelled.

Invoice no. 06/075 dated 28 October 2005 and invoice no. 06/104 dated 1 December 2005, both from Sesto to the applicants, Jadewealth and Aljade, are both set aside.

The proceeding shall be listed for a further directions hearing, before me, on a date to be fixed, so that the parties may make submissions as to what further orders or directions should be made as a consequence of the Tribunal's reasons for decision.

Whether It Matters that Jadewealth and Aljade are not Applicants 18

The Law: What Costs Agreements are subject to Assessment 22

At all times since the beginning of 1999 that have been material to this proceeding, John Sesto carried on practice as a solicitor under the name J.P. Sesto & Co. The title to this proceeding, and the applicants' Amended Application (entitled the "Third Further Amended Application"), described two respondents, "J.P. Sesto & Co" and "John Sesto." It is common ground that the two named respondents are one and the same person, to whom I shall refer as "Mr Sesto."

The applicants Leong Voon Shing (also called "Alvin Leong") and Jade Leong, who are husband and wife, are Malaysian citizens. This proceeding reflects a dispute they have with Mr Sesto over invoices he has rendered for services as a solicitor. He rendered those services when he acted in Supreme Court litigation on behalf of two companies in which Mr and Mrs Leong had economic interests.

One of these companies, Aljade Development and Construction SDN BHD ("Aljade"), was a Malaysian company. It went into liquidation on 19 November 2003. It was never registered in Australia as a foreign company or otherwise. Mr and Mrs Leong had been directors of and shareholders in Aljade until some time in 2000.

The other company, Jadewealth Pty Ltd ("Jadewealth"), is registered in Australia. It is the trustee of a family trust. Mr Leong is and always has been a director of it. Jadewealth has been joined to the proceeding as an interested party.

The invoices which are in dispute charged sums totalling $672,184.64. Until the hearing of this proceeding began before me on 27 October 2008, Mr Sesto had taken the stance that he received $651,169.00 in reduction of those sums totalling $672,184.64 so that there was a balance of $21,015.64 still owing to him upon those invoices. Of the $651,169.00 that he said he had received, $211,169.00 had come from payments made from time to time by or on behalf of his clients. (Mr and Mrs Leong have maintained that those payments actually totalled $221,169.00, an extra $10,000.00.) The other $440,000.00, Mr Sesto had said, had come from an opposite party to the litigation. That figure of $440,000.00 had been an agreed figure for the costs awarded against that opposite party. During the hearing, however, Mr Twigg of Counsel for Mr Sesto took a different stance, submitting that the $440,000.00 paid as costs by the opposite party should not be taken into account in any determination of how much was owing under the disputed invoices.

By "this proceeding" I mean proceeding no. J138/2006, commenced in the Legal Practice List, in which Mr and Mrs Leong are the applicants. There is a second proceeding, no. C6430/2008, commenced in the Civil Claims List, in which Mr Sesto is the applicant and Jadewealth is the respondent. In the second proceeding Mr Sesto has claimed $21,015.64, consistently with his original stance as I have described it in the preceding paragraph. That second proceeding was fixed for

hearing together with this proceeding, no. J138/2006. During the five days of the hearing before me, however, the second proceeding was scarcely mentioned. These reasons for decision deal with proceeding no. J138/2006 only. I shall give brief separate reasons for the order I am making in the other proceeding.

The charges for professional services made in the disputed invoices are time-based charges. It is common ground that at all material times from 7 May 2002 onwards there was a costs agreement, evidenced in writing, in force between Mr Sesto and his clients under which Mr Sesto had authority to make time-based charges in accordance with agreed hourly rates. (Who the "clients" were is a matter in dispute, as will appear below.) The Amended Application alleged that there was one costs agreement but variations of it. Mr Coady of Counsel for the applicants made submissions that were consistent with that allegation. As will appear below, I consider that there were two successive costs agreements and that the parties to them were not identical. For the moment, however, it is convenient to speak of a "costs agreement" as if there had been only one.

The primary orders that Mr and Mrs Leong ask VCAT to make in this proceeding are orders, pursuant to section 103(1) and (3) of the Legal Practice Act 1996, that the costs agreement be cancelled and that VCAT make such consequential orders as it thinks fit, including orders for cancellation of the disputed invoices and orders for payment of money to the applicants.

By virtue of clause 3.1 of Schedule 2 of the Legal Practice Act 2004, Part 4 of the Legal Practice Act 1996 (which includes section 103) continues to apply to the subject matter of this proceeding. By virtue of clause 8.1(3) of the same Schedule, "the Tribunal" in Part 4 of the 1996 Act now means VCAT. Unless I state otherwise, or unless the context indicates otherwise, references in these reasons for decision are references to sections in the Legal Practice Act 1996, and references to "the Act" or to "the 1996 Act" are references to that Act.

The fact that Mr and Mrs Leong are the applicants seeking the orders referred to in paragraph 8 above would be unremarkable if there were no dispute that they were the persons who had entered into a costs agreement with Mr Sesto and so were his clients. There is a dispute, however. Mr and Mrs Leong maintain that they and they alone were parties as clients to the costs agreement. Mr Sesto maintains (and Mr Twigg submitted) that the persons who were parties as clients to the costs agreement were Jadewealth and Aljade. For reasons that I shall give below, I consider that neither of those maintained positions is correct, and I find that Mr Sesto's clients were:

(ii) from 7 May 2002 until 20 March 2003, under the first costs agreement: Mr Leong, Mrs Leong and Jadewealth;

(iii) from 21 March 2003 until 19 November 2003 (when Aljade went into liquidation), under the second costs agreement: Mr Leong, Mrs Leong, Jadewealth and Aljade;

(iv) from 19 November onwards, under the second costs agreement: Mr Leong, Mrs Leong and Jadewealth.

Jadewealth and Aljade, although parties to a costs agreement with Mr Sesto from time to time, are not applicants. Only Mr and Mrs Leong are the applicants. In my opinion, for reasons that I shall give below, the absence of Jadewealth and Aljade as applicants is no impediment to Mr and Mrs Leong seeking orders for the cancellation of the costs agreements or any other orders, and does not affect VCAT's capacity to make such orders.

Although the hearing took five days, there were only two witnesses, Mr Leong and Mark Telford Lapirow. Mr Lapirow is a barrister whom Mr Sesto briefed to appear before the Supreme Court Taxing Master in the Supreme Court litigation. Mr Sesto called Mr Lapirow as a witness. Mr Sesto himself did not give evidence.

Mr Leong was able to give almost all of his evidence in English. A Cantonese interpreter was present throughout while he was giving evidence but on only one occasion, to my recollection, did he need to have a question interpreted to him and on that occasion he gave his answer in English. In a final written submission Mr Twigg made a number of criticisms of Mr Leong as a witness. I thought that he was a truthful and reasonably accurate witness, on the whole. There was one topic about which his evidence, I thought, was probably wrong, even though it was uncontradicted, but that topic (which I shall mention below in due course) was minor. Despite that blemish on his evidence I accept the rest of his uncontradicted evidence.

Mr Lapirow's evidence was relevant to one potential issue raised by the Amended Application, although in the end I doubt that it really was an issue. I accept all of Mr Lapirow's evidence.

In accordance with directions made in the course of the proceeding the parties filed a tribunal book. It consisted of four volumes. There was also a supplementary tribunal book. At the commencement of the hearing the parties could not agree upon whether I should regard all, or any and which parts, of the documents in the tribunal books as being evidence. I decided that a document should be regarded as being in evidence if it had been referred to during Mr Coady's opening or had been referred to, without successful objection, during the evidence of a witness. Even so, at the end there was some vagueness about what was in evidence and what was not. Unless I specifically say otherwise, each document to which I refer in these reasons was a document that was in evidence, I believe, pursuant to the decision mentioned in this paragraph.

The Supreme Court litigation in which Mr Sesto acted concerned two units described in a proposed subdivision of land at 123-139 La Trobe Street Melbourne. The registered proprietor of the land was Richfield Investments Pty Ltd ("Richfield"). A Mr Fong was a director of Richfield.

A Malaysian company of which Mr Fong was also a director owed in excess of $1 million to Aljade. So as to satisfy the debt, in part, Richfield agreed in 1998 to sell the two La Trobe Street units to Aljade for a price which was to be paid as an offset against the Malaysian company's debt to Aljade. Mr Leong, then a director of and shareholder in Aljade, consulted Mr Sesto, who was then an employee solicitor at Rawling & Company, for the purpose of formalising the agreement for the sale of the two La Trobe Street units.

The agreement was formalised as follows. There was a contract of sale by Richfield to Aljade dated 3 September 1998. It provided for payment of the purchase price by way of offset as described above. Richfield became obliged to deliver an instrument of transfer of the units within a specified time after registration of the plan of subdivision. The contract contained a nomination clause. On 7 October 1998 Aljade nominated Jadewealth as the proposed transferee. Jadewealth had been incorporated, on Mr Sesto's advice, for that purpose. It was the trustee of a discretionary trust for the benefit of Mr and Mrs Leong and their family. There was a costs agreement in place between Rawling & Company as solicitors and Mr and Mrs Leong as clients.

On 11 January 1999 Mr Sesto commenced practice as a solicitor on his own account. He took with him the conveyancing file for the purchase of the units. Mr and Mrs Leong agreed to his doing so.

Little then happened for more than two years. Although the plan of subdivision was registered, settlement of the purchase was delayed during that time. A cause of the delay was the need for Richfield to arrange a partial discharge of a mortgage over the La Trobe Street land. The mortgagee was Oversea-Chinese Banking Corporation Limited ("OCBC").

The attempt to arrange a partial discharge of mortgage led to a dispute between Jadewealth and OCBC over the priority of their respective interests in the two units. On 13 May 2002 OCBC commenced Supreme Court proceedings against Jadewealth seeking the removal of a caveat which Mr Sesto had lodged on Jadewealth's behalf. On 12 June 2002 Aljade commenced Supreme Court proceedings against Richfield and OCBC seeking, amongst other things, specific performance of the contract of sale. Mr Sesto was the solicitor on the record for Jadewealth and Aljade respectively in those proceedings. He had received instructions from Mr Leong to defend OCBC's proceeding on behalf of Jadewealth and to commence the other proceeding for Aljade.

Although Mr Leong gave those instructions on behalf of Aljade he was no longer a director of Aljade or a shareholder in Aljade by 12 June 2002. He had ceased to be so by August 2000. He and his wife had sold their interests in Aljade to his mother-in-law and sister-in-law.

In May 2003, shortly before the trial of the two Supreme Court proceedings was due to commence on 2 June 2003, the directors of Aljade executed a power of attorney giving proper authority to Mr Leong to pursue Aljade's proceeding and to instruct Mr Sesto.

In June 2002 Mr Leong had sworn two affidavits, one for each of the two proceedings, in which he stated, incorrectly, that he was a director of Aljade. The affidavits described him as a "controlling director" of Aljade. Mr Sesto had prepared each affidavit. One had been forwarded by him to Malaysia for execution. The other evidently had been executed in Melbourne. Mr Sesto filed each affidavit once it had been sworn. In cross-examination it was put to Mr Leong that he had failed to inform Mr Sesto until May 2003 that he was not a director of or shareholder in Aljade, and that that was why he had been advised to procure the power of attorney. Mr Leong denied the allegation and swore that he had told Mr Sesto before the litigation had commenced that he was no longer a director of or shareholder in Aljade.

This is the topic on which I do not accept Mr Leong's evidence, even though Mr Sesto did not give evidence to contradict it. It is inherently improbable that any conscientious solicitor would facilitate or permit the swearing and filing of an affidavit that, to the solicitor's knowledge, contained a false statement. It is inherently improbable that Mr Sesto would have done that on one, let alone two, occasions. The hasty procurement of the power of attorney is consistent with the more probable version of events having been the one put to Mr Leong in cross-examination. Nevertheless, on the overall view that I took of Mr Leong and his credibility, this topic was of minor importance, and does not cause me to reject any other part of his evidence, uncontradicted as it was.

The trial of the Supreme Court proceedings commenced on 2 June 2003 and concluded after 11 sitting days. Judgment was reserved. On 19 December 2003 the court gave judgment. Aljade and Jadewealth were successful. Specific performance was ordered. The issue of costs was adjourned for submissions and argument.

On 19 November 2003, one month before judgment was given in favour, Aljade had gone into liquidation as a consequence of a winding-up order made in Malaysia. Mr Leong swore, and I accept, that he did not know of the liquidation at the time.

On 22 September 2004 the Supreme Court made orders for costs of the proceedings in favour of Jadewealth and Aljade against Richfield and OCBC. The orders were for payment of costs on a party-party basis up to 1 June 2003 and on an indemnity basis thereafter. So there was an indemnity costs order that covered the period of the trial itself.

Mr Sesto had a bill of costs prepared for taxation. He filed it with the Supreme Court, together with a summons for taxation, on 16 June 2005. The taxation commenced before the Taxing Master on 2 November 2005. Mr Sesto briefed Mr Lapirow to appear for Jadewealth and Aljade. On the following day, 3 November 2005, the issue of costs was settled by OCBC agreeing to pay $440,000.00. Subsequently the solicitors for OCBC paid that sum to Mr Sesto.

Between 7 May 2002 and 16 January 2004 Mr Sesto rendered 13 invoices headed "Action against Richfield Investments Pty Ltd and OCBC...123-139 La Trobe Street, Melbourne." The first, dated 7 May 2002, was addressed to "Mr A. and Mrs. J. Leong, Jadewealth Pty Ltd." Two others were addressed to "Mr Alvin Leong, Jadewealth Pty Ltd." All others were addressed to Mr and Mrs Leong, without mentioning Jadewealth.

The first invoice, dated 7 May 2002, commenced with the words "To our professional costs incidental to acting for you in relation to the above matter since 25 March 2001, including...". All others, except the last, commenced with similar words, except that instead of "25 March 2001" the date specified was the date of the previous invoice. The last invoice, dated 16 January 2004, was an invoice only for Counsel's fees and transcript costs.

On or about 16 January 2004 Mr Leong and Mr Sesto agreed that Mr Sesto was not to render any further invoices for work due after 16 January 2004 until the issue of the costs payable by OCBC in the Supreme Court litigation had been resolved.

The total of the invoices rendered between 7 May 2002 and 16 January 2004 was $299,403.56, made up as follows:

It is common ground that Mr Sesto inadvertently omitted from those invoices a sum of $13,700.00 for Counsel's fees and that Mr Sesto was always entitled to include those and to charge for them. With that amount added, the total of those invoices became $313,103.56.

On 1 October 2004, shortly after the costs order made on 22 September 2004 against Richfield and OCBC, Mr Leong wrote to Mr Sesto asking for a summary of "professional fees during and after the court hearing". By a letter in reply dated 19 October 2004 Mr Sesto advised that he had "engaged a cost consultant to cost the file and advise us generally on the question for costs". The letter enclosed the requested summary of the invoices rendered to 16 January 2004 and also a "summary of invoices received from client" which listed payments totalling $211,169.00.

Evidently the costs consultant did his work promptly, because on 29 November 2004 Mr Sesto wrote to Mills Oakley Lawyers, who were the solicitors for OCBC in the Supreme Court litigation, demanding payment of $636,598.00 for professional costs and disbursements, plus two other figures, one being for an amount charged by Malaysian lawyers A.G. Dicom (whom Mr Leong had retained to assist him in the litigation) and the other being for "ancillary claims" which I do need to specify at the moment. The letter enclosed a 31 page particularisation of the calculation of the sums claimed for professional costs alone, which was $455,198.00.

By then it was obvious that the total sums which Mr Sesto had charged his client or clients (whoever they were) by 16 January 2004 were about one half of what had been demanded of OCBC under the Supreme Court's costs order.

As I have stated above, the taxation of a bill of costs before the Taxing Master was settled on 3 November 2005 by OCBC agreeing to pay $440,000.00. Even that sum was approximately $127,000.00 more than Mr Sesto had charged up to 16 January 2004.

On 28 October 2004, that is to say about a week before the taxation of the bill of costs took place, Mr Sesto sent an "interim tax invoice" numbered 06/075 addressed to Jadewealth. It commenced, "To our professional costs incidental to this matter from its inception to 30 September 2005 in accordance with the attached itemised statement". The invoice claimed professional fees of $383,926.00 and, with GST and disbursements added, a total of $644,962.14. It stated that $211,169.00 had been received on account and claimed a balance of $433,793.14. The "attached itemised statement" comprised 97 pages.

On 1 December 2005 Mr Sesto sent a "final account, tax invoice" numbered 06/104. It was addressed to Jadewealth, Aljade and Mr and Mrs Leong. It read as follows:

To our professional costs incidental to this matter from its inception to 4 November 2005:

4 November 2005 as set out in Annexure A $ 14,055.00

Less monies received from OCBC pursuant to Costs order -$440,000.00

Those two invoices, one dated 28 October 2005 and numbered 06/075, and the other dated 1 December 2005 and numbered 06/104, are the invoices which Mr and Mrs Leong have asked VCAT to cancel. I refer to them as "the disputed invoices".

On three occasions in the course of the Supreme Court proceedings Mr Sesto gave written estimates of his costs of acting in those proceedings.

Mr Sesto gave no estimate until 21 March 2003, when he included as a schedule to a letter of that date (addressed to Mr Leong, Mrs Leong, Aljade and Jadewealth) a detailed estimate which totalled $120,757.00. The estimate was expressed to be based on a provision for a 7 day trial in the Supreme Court. This letter was the same as the one to which I shall refer below as having evidenced a second costs agreement.

On 18 June 2003 Mr Sesto gave a revised estimate of an extra $44,240.00, including extra professional costs of $12,000.00. The revised estimate was in a letter addressed to Mr and Mrs Leong. Again it was expressed to be based on a provision for a 7 day trial.

On 20 January 2004, by a letter addressed to Mr and Mrs Leong, Mr Sesto gave a further revised estimate. It was of an extra $20,798.86, including extra professional costs of $12,784.00. The letter gave a total of the estimates, after the two revisions, of $198,580.00.

The total of the estimates contrasts sharply with the figure of $440,000.00 agreed upon as the party-party and indemnity costs of the two proceedings, and contrasts even more sharply with the sum of $672,184.64 calculated in the "final account" dated 1 December 2005.

Mr Sesto maintained in the "final account", and still maintains, that the sums he received on account of costs from Mr and Mrs Leong or from other persons on their behalf totalled $211,169.00. Mr and Mrs Leong maintain that the total was $221,169.00. The difference results from two amounts of $5,000.00 each which Mr and Mrs Leong maintain that they paid to Mr Sesto on 20 June 2002 and 28 June 2002 respectively.

Mr Leong gave evidence that he paid those two amounts of $5,000.00 each, on 20 June 2002 and 28 June 2002 respectively, in cash to Mr Sesto. He did not produce any receipts for the payments. One tends to be sceptical of evidence like that. The tribunal book included photocopied pages from Mr Leong's passport and from Mrs Leong's passport. They do not show distinctly that either of them was in Australia during June 2002. But some of the photocopied pages from Mr Leong's passport are hard to read. Mr Leong told me that the original of his passport was at his hotel. He could have produced it on a later day during the hearing but did not.

Nevertheless there is other evidence supporting Mr and Mrs Leong's claim that they made those two payments. The tribunal book included copies of pages from Mr Sesto's ledger for 20 June 2002 and for 28 June 2002. Each of those pages recorded a deposit of $5,000.00 beside the names of Mr and Mrs Leong. In two written communications Mr Sesto, while listing payments that had been made on account, included in his list payments of $5,000.00 each on 20 June 2002 and 28 June 2002 and described them as "direct credit", implying that they had been made by bank transfer. One communication was by facsimile addressed to Mr Leong dated 19 December 2002 and sent to A.G. Dicom & Co, the Malaysian lawyers. The other was the letter dated 18 June 2003 referred to in paragraph 44 above.

Nobody gave evidence on behalf of Mr Sesto in relation to the two alleged payments. If there was an explanation for why the ledger and those two communications said what they purported to say, and why the true position was in accordance with the "final account" which omitted those two alleged payments from the list of payments, I did not hear it. It is for Mr and Mrs Leong to prove that the payments were made, not for Mr Sesto to prove that they were not. But I think that Mr and Mrs Leong have proved that payments of $5,000.00 each were made on 20 June 2002 and 28 June 2002 respectively. I make no finding as to whether the payments were made in cash or by bank transfer or in any other fashion. Mr Leong's uncontradicted evidence, supported as it is by documents emanating from Mr Sesto's office, that those payments were made is acceptable to me. I find that the sums which Mr and Mrs Leong, or persons on their behalf, paid on account of costs totalled $221,169.00, not $211,169.00.

Prior to 7 May 2002 there was no costs agreement evidenced in writing between Mr Sesto and anybody else in relation to the two units at La Trobe Street. Mr Sesto had rendered two invoices for conveyancing work in the purchase of the units. One invoice, dated 31 May 1999, was addressed to Mr and Mrs Leong. The other, dated 13 December 2001, was addressed to Mr Leong only.

On 7 May 2002 Mr Sesto sent a lengthy letter by email to the email address of Mr and Mrs Leong's son. This letter contained the terms of what I will be calling the first costs agreement. Mr Leong received it and read it.

The letter was addressed to Mr and Mrs Leong. I set out the first page of the letter. The underlining has been added. ("Alvin" refers to the first applicant, Mr Leong.)

ACTION AGAINST RICHFIELD INVESTMENTS PTY LTD AND OCBC UNITS 19 & 22, 123-139 LA TROBE STREET, MELBOURNE

Pursuant to the provision of the Legal Practice Act 1996 (Vic), we are obliged to outline the basis upon which our firm will provide legal services to you in relation to the above matter, and the manner in which our professional costs will be charged.

In keeping with our responsibilities under the Act, we now set out the terms and conditions upon which you will further your claim against Richfield Investments Pty Ltd and OCBC. Please take note of the funds required in advance of any formal court proceedings.

Should the need arise, we will be happy to answer any questions you may have.

Mr Alvin Leong, Mrs Jade Leong and Jadewealth Pty Ltd, each of you being joint and severally liable for our Tax Invoices.

To advise on, institute and assume the care and conduct of Supreme Court proceedings against Richfield Investments Pty Ltd and OCBC seeking among other things, specific performance of the Contract of Sale of the above mentioned properties ("your Claim").

On page 4 of the letter, the following sentences appeared:

We require an individual to accept and guarantee responsibility for legal costs where the client is a corporate entity. Mr Alvin and Mrs Jade Leong will be jointly and severally responsible for payment of our Tax Invoices.

On page 5 of the letter, beneath a hearing "Acknowledgement", Mr Sesto asked that "you sign your names where provided at the foot of this document" so as to "indicate that you wish to retain J P Sesto & Co to act for your [sic] according to the terms set out above." On page 7 of the letter Mr Sesto requested that the signed original be returned to him, then provision was made for the document to be signed as follows:

.................................................................. Date:

Alvin Leong for and on behalf of Jadewealth Pty Ltd

Despite the request made in the letter, the document was never signed or returned to Mr Sesto.

The letter stated that there would be time-based charges for legal fees:

Our fees are calculated based on the time spent working on your claim. Time is calculated on a per unit basis where each unit equals 6 minutes or part thereof. For example, 28 minutes equals 5 units.

These rates may change during the course of your claim. We will give you 30 days notice of any changes in the fee rates.

The letter stipulated how tax invoices would be rendered and how Mr Sesto would expect them to be paid. It stated:

(a) "We will send you Tax Invoices for fees and disbursements at regular intervals";

(b) "If a Tax Invoice is not paid within 14 days, we are entitled to charge interest on the amount outstanding..."

Although the letter included the word "estimates" several times, it did not contain any estimate of legal costs or of disbursements. It did contain the following paragraphs, on page 6:

The precise amount of the legal costs that will be payable will vary depending on a number of factors including:

amount of evidence to be gathered
number of witnesses involves
tactics adopted by the other side
conduct of the negotiations
whether it is necessary to brief senior counsel
stage at which the claim is concluded
identification of issues that widen the scope of the litigation

If you are successful the other party may be ordered to pay a proportion of your costs, which will be calculated according to the court scale. We estimate that the amount recoverable will be approximately 60% of the total costs incurred by yourself, depending on the variables listed above. We cannot guarantee recovery of these amounts.

The letter included the following paragraph, which turns out, in my opinion, to have been very significant, because it was incorrect:

The Legal Practice Act 1996 (Vic) gives you the right to have the fees in a Tax Invoice assessed for their fairness and reasonableness by a court official. An application for assessment must be made within two months of your receiving the bill.

Although the letter was never signed and returned, it was common ground that its terms became agreed terms of a contract between Mr Sesto and his clients, whoever they were, and thus terms of a costs agreement evidenced in writing.

Mr and Mrs Leong have maintained, and Mr Coady submitted, that the parties to the costs agreement evidenced by the letter dated 7 May 2002 were Mr and Mrs Leong as clients and Mr Sesto as solicitor. Mr Twigg submitted that the parties to that agreement were Jadewealth and Aljade as clients and Mr Sesto as solicitor, and that because neither Jadewealth nor Aljade is an applicant in the proceeding it should be dismissed because the applicants Mr and Mrs Leong were not competent to bring it.
In my opinion, those parts of the letter dated 7 May 2002 that I have set out in paragraphs 53, 54 and 55 above make it plain that the "clients" were intended to be, and were, Mr Leong, Mrs Leong and Jadewealth.

In support of his submission that the agreement should be regarded as one to which Mr and Mrs Leong were the clients, not any corporate entity, Mr Coady relied upon the following matters:

(a) The letter was addressed only to Mr and Mrs Leong.

(b) The earlier conveyancing invoices had been addressed to Mr and Mrs Leong, even though the purchaser was a corporation and the nominated transferee was a corporation.

(c) Jadewealth was the trustee of a family trust, a convenient vehicle by which Mr and Mrs Leong could organise financial affairs. It would be unrealistic to regard any persons other than Mr and Mrs Leong as the clients who would be giving Mr Sesto instructions.

(d) Jadewealth did not sign the letter or do anything else to acknowledge that it, as distinct from Mr and Mrs Leong personally, was binding itself in contract to Mr Sesto.

(f) Most invoices after 7 May 2002 were addressed to Mr and Mrs Leong only.

(g) All instructions given after 7 May 2002 physically were given by Mr Leong.

(h) All payments on account of costs were made by Mr and Mrs Leong or by individuals on their behalf. Neither Jadewealth nor Aljade made any such payments.

Matters (f), (g) and (h) mentioned in the previous paragraph accord with the evidence but face a difficulty. There has been a general rule of construction of contracts that the conduct of parties to a contract subsequent to its formation cannot be used for the purpose of construing its terms. Whether that rule is as applicable as generally as it used to be is an open question: see Halsbury's Laws of Australia, vol 6, para [110-2295]. So I propose to have regard to those matters as well as to the other matters upon which Mr Coady relied.

As to matter (d), the fact that Jadewealth did not expressly acknowledge that it accepted the terms in the letter and was a client, there are counterweighing considerations. The proposed litigation was to be for the benefit of Jadewealth. If the litigation was successful Jadewealth would become the registered proprietor of land in Australia. Mr and Mrs Leong were Malaysian citizens. It was understandable that Mr Sesto would want to bind to a costs agreement a person with Australian assets. The letter was framed in a way that invited Jadewealth to acknowledge that it was becoming a party to a costs agreement and promising, together with Mr and Mrs Leong, to pay legal fees. In those circumstances, if Mr Leong in his capacity as a director of Jadewealth did not intend Jadewealth to be bound by the terms of the letter it was incumbent upon him to say so before continuing to instruct Mr Sesto. He did not say so.

In his support of his submission that the agreement should be regarded as one to which Jadewealth and Aljade were the clients, Mr Twigg relied upon the following matters:

(a) The proposed litigation was to be for the benefit of Jadewealth and Aljade. It was proposed that Mr Sesto should become the solicitor on the court record for Jadewealth and for Aljade, as indeed he did, holding himself out to be acting for them as clients.

(b) Although the letter was addressed to Mr and Mrs Leong, the words "you" and "your" (such as in "your claim") should be read as referring to the corporations.

(c) On 18 April 2002 A.G. Dicom & Co, the Malaysian lawyers, had written to Mr Sesto advising that it acted for Jadewealth and or "its principals" Mr and Mrs Leong and asked that all correspondence be directed to their office. That letter indicated an intention by Mr Leong to engage lawyers on behalf of Jadewealth.

(d) The reference in the letter of 7 May 2002 to a "guarantee" by individuals indicated that the corporate entity, Jadewealth, was intended to be liable as principal, and thus a client.

The matters which Mr Twigg relied upon are valid reasons for concluding that Jadewealth was a party to a costs agreement with Mr Sesto but in my opinion do not lead to a conclusion that Mr and Mrs Leong were not parties to it also. The reference in the letter of 7 May 2002 to a "guarantee" is puzzling but inconsistent with the rest of the letter, particularly the section quoted in paragraphs 53 and 54 above, which expressed that Mr Leong, Mrs Leong and Jadewealth would be jointly and severally responsible for payment of invoices and so would be joint principal debtors.

Similarly, the matters which Mr Coady relied upon support a conclusion that Mr and Mrs Leong were parties to a costs agreement with Mr Sesto but in my opinion do not lead to a conclusion that Jadewealth was not a party to it also.

What predominate, in my opinion, are those plain words of the letter dated 7 May 2002 that I have underlined in paragraph 53 above. When Mr Leong and Mr Sesto proceeded after 7 May 2002 on the basis that they should abide by the terms in the letter, they did so in accordance with a contract between Mr Sesto as solicitor and Mr Leong, Mrs Leong and Jadewealth as clients.

Aljade was not a party to that contract. It did not expressly retain Mr Sesto, under a costs agreement or otherwise, in May 2002. Yet it became a party to litigation and Mr Sesto acted for it in that litigation and Mr Sesto acted for it in that litigation as its solicitor on the court record. The consequence is that Aljade was deemed to have retained Mr Sesto. The principle of the "deemed retainer" is expressed in Dal Pont, The Law of Costs (2003), para [1.13], as follows:

It is presumed, in the absence of proof of an express agreement to the contrary, that a solicitor who acts upon instructions for a party on the record is taken to be entitled to look to that party for costs, even if the instructions have come from another person. The doctrine in this respect is one of 'deemed retainer'.

There is no incongruity, therefore, in saying that Aljade was not a party to a costs agreement and in saying also that Mr Sesto was acting for Aljade in the litigation and entitled to charge it with fees for doing so if he saw fit to charge it.

On 21 March 2003 Mr Sesto sent a letter of advice, in anticipation of the trial of the Supreme Court proceedings commencing on 2 June 2003. The letter was addressed to the following persons:

The address given was a room at Crown Towers, Southbank, at which Mr and Mrs Leong were staying while in Melbourne.

Enclosed with the letter was a document headed "Restatement of Our Retainer Terms." The last page of the document was headed "Acknowledgment and Acceptance." It included the following sentence:

By signing below, you indicate that you wish to retain J.P. SESTO & CO to act for you according to the terms of this Agreement.

Provision was made at the foot of that page for signing as follows:

_____________________________________________________________

Directors for and on behalf of Aljade Development and Construction SDN BHD & Jadewealth Pty Ltd

_____________________________________________________________

Mr and Mrs Leong both signed on each line at the foot of the page. They were purporting to sign on the first line on behalf of both corporations. Mr Leong was a director of Jadewealth. Mrs Leong was not. Neither was a director of Aljade, so neither had authority at the time to sign on behalf of Aljade.
Beneath the signatures is a handwritten date, "7/3/03." There was no evidence as to how that date came to be written or whether it was a mistake. It is unlikely that Mr and Mrs Leong signed it before 21 March 2003, the date of the letter.

By Aljade giving Mr Leong a power of attorney about two months later, Aljade ratified Mr Leong's execution of the "Acknowledgment & Acceptance" document on its behalf.

The "Restatement" document constituted what I will be calling the second costs agreement.

The document included the following paragraphs:

We require an individual to accept and guarantee responsibility for legal costs where the client is a corporate entity.

By signing this Agreement you expressly acknowledge that you are personally responsible for the payment of any legal costs and disbursements incurred by Aljade Development and Construction SDN BHD & Jadewealth Pty Ltd or any other company you instruct us to act for.

Like the first costs agreement, the "Restatement" document stated that there would be time-based charges for legal fees. The statement was the same as was set out in paragraph 57 above, except the rate for "Legal Assistant/Secretary" became $90.00 per hour and there was a new rate for "Articled Clerk" of $150.00 per hour.

Like the first costs agreement, the "Restatement" stipulated how tax invoices would be rendered and how Mr Sesto would expect them to be paid. It stated:

(a) "We will send you Tax Invoices for fees and disbursements at regular intervals."

(b) Money paid on account of costs "will only be used to pay fees after we have sent you a Tax Invoice for the work done."

(c) "If our costs are not paid within 14 days after the Tax Invoice has been given to you we may take action to recover those costs...."

Under a heading "Estimates & Legal Costs", the "Restatement" set out the same two paragraphs as were in the first costs agreement and which I have set out in paragraph 59 above. Between those two paragraphs, however, was inserted the lengthy particularised estimate of fees and disbursements, based upon an estimated 7 day trial, of $120,757.00, to which I referred in paragraph 43 above.

The applicants' case has been that the "Restatement" document was part of the retainer that had been created in 2001 then varied when a costs agreement was entered into on or about 7 May 2002. Consistently with that case, Mr Coady submitted that the clients who retained Mr Sesto on and after 21 March 2003 remained Mr and Mrs Leong only. Consistently with his other submissions, Mr Twigg submitted that the clients who retained Mr Sesto on and after 21 March 2003 remained Jadewealth and Aljade.

In my opinion the "Restatement" document, once executed, created a second costs agreement. It introduced a new party, Aljade, which had not been party to what had been agreed in May 2002. The accompanying letter dated 21 March 2003 had been addressed to Aljade as well as to the three persons who had been parties, as clients, to what had been agreed in May 2002. Mr and Mrs Leong purported to sign the "Restatement" on behalf of Aljade, and Aljade later ratified their having done so. The introduction of the additional party compels the conclusion that what had occurred in March 2003 was not the continuation or variation of a previous agreement but the creation of a new agreement, a second costs agreement, albeit with most of its terms similar to those in the first costs agreement.

For those reasons, together with reasons I gave in respect of the first costs agreement when dealing with the respective submissions, I reject the submission that the "Restatement" document evidenced a contract between Mr Sesto and Mr and Mrs Leong only as clients, and also reject the submission that it evidenced a contract between Mr Sesto and Jadewealth and Aljade only as clients. I find that the parties to the second costs agreement, as clients, were all four: Mr Leong, Mrs Leong, Jadewealth and Aljade.

That remained the state of affairs from 21 March 2003 until 19 November 2003 when Aljade went into liquidation and thus lost the capacity to instruct Mr Sesto, even though Mr Leong purported to continue to instruct Mr Sesto on Aljade's behalf. Following the liquidation Aljade would only have had the capacity to enforce the second costs agreement if the liquidator had adopted it. That did not happen. For practical purposes, therefore, Aljade dropped out of the costs agreement and the remaining parties to it, as clients, were Mr Leong, Mrs Leong and Jadewealth.

Mr Sesto's retainer ended shortly after the settlement of the taxation-of-costs issue when, on 3 November 2005, Mr and Mrs Leong changed solicitors.

Whether It Matters that Jadewealth and Aljade are not Applicants

Mr and Mrs Leong, the applicants, are only two of the four persons who, from time to time, were parties to a costs agreement with Mr Sesto in relation to the Supreme Court proceedings. So only two of those four persons have sought the cancellation of a costs agreement and consequential relief.

Where several persons, being joint contractors, are entitled to make a claim against the other party to the contract, a proceeding brought to enforce that claim ought to be brought by and in the names of all the joint contractors. Where one of the joint contractors does not consent to being a plaintiff, rules of court permit the other joint contractors to name the non-consenting one as a defendant: see Rule 9.03(1) of the Supreme Court Rules. Unless the non-consenting joint contractor is named in that way, the defendant sued on the contract may apply for a stay of the proceeding. The court has a discretion to stay or not to stay the proceeding in those circumstances. Where the non-consenting joint contractor is out of the jurisdiction, the court in the exercise of its discretion may, and generally will, decline to order a stay unless in the circumstances it is just to order a stay: Wilson Sons & Co Ltd v Balcarres Brook Steamship Company Limited [1893] Q.B. 422. The difficulties which might be attendant upon obtaining leave to serve the non-consenting contractor outside the jurisdiction are a reason for declining to order a stay.

Mr Twigg submitted that in the event that I found (as I have) that there were four joint contractors, and four clients of Mr Sesto, from time to time, the proceeding should be stayed until Jadewealth and Aljade were joined either as applicants or respondents to this proceeding. I reject the submission.

Jadewealth is a party to the proceeding already. It was joined as an interested party, on the application of Mr Sesto made pursuant to section 60 of the Victorian Civil and Administrative Tribunal Act 1998, which enables VCAT to order that a person be joined as a party to a proceeding if it considers that the person ought to be bound by or have the benefit of an order in the proceeding, or if the person's interests are affected by the proceeding, or if for some other reason it is desirable that the person be joined as a party. By any of those criteria it was proper that Jadewealth should be a party to this proceeding and become bound by, or have the benefit of, the result in the proceeding. Why Mr and Mrs Leong did not ever seek to have Jadewealth joined as a party, either as an alternative applicant or as a respondent, has not been explained. Nevertheless Jadewealth is an interested party, having been joined pursuant to Mr Sesto's application for joinder.

The joinder of Jadewealth as an interested party has achieved the same purpose as would have been achieved in a Supreme Court proceeding by the joinder, under Rule 9.01, of a non-consenting joint contractor as a defendant. Jadewealth will be bound by the outcome of the proceeding. Possible multiplicity of litigation - the commencement of a separate proceeding by Jadewealth against Mr Sesto - has been avoided. Nothing further would be achieved, in my opinion, by joining Jadewealth as a respondent or by staying this proceeding until Jadewealth was joined.

As for Aljade, its joinder as a respondent is a practical impossibility and would be futile. Joinder is a practical impossibility because Aljade is in liquidation and, if Malaysian law has relevant similarity to Australian law (as I imagine it does), it would not be possible for one to take a step against it in a proceeding (which joinder of it would be) without the leave of the court that had a supervising jurisdiction over the liquidation. Joinder would be futile because, in the absence of any registered office or place of business in Australia, it would not be possible for one to serve Aljade with a copy of the initiating application in the proceeding. Judge Ross, Vice-President of VCAT, has recently confirmed that service of VCAT process cannot be effected outside Australia: Apollo Marble and Granite Imports Pty Ltd v Industry & Commerce (Civil Claims) [2008] VCAT 2298.

Those reasons are sufficient for me to reject the submission that the absence of Aljade as a party to the proceeding should result in an order for a stay. But there are other reasons. During the six years that have passed since the liquidation of Aljade occurred there has not been the slightest indication, so far as I am aware, that the liquidator of Aljade has shown any interest in making a claim against Mr Sesto in relation to legal costs that have been paid to him. Moreover, the only such legal costs to which Aljade might conceivably have a claim were those that related to work done between 21 March 2003 and 19 November 2003.

I consider, therefore, that the fact that Jadewealth is not an applicant or a respondent, and the fact that Aljade is not a party to the proceeding at all, do not prevent Mr and Mrs Leong from pursuing the relief that they seek and do not create any legal impediment to the granting of that relief.

So far as is relevant to this proceeding, section 103 provides:

(1) On application by a client, the Tribunal, constituted by the registrar or a deputy registrar, may order that a costs agreement be cancelled if satisfied -

(a) that the client was induced to enter into the agreement by the fraud or misrepresentation of the legal practitioner or firm; or

(b) that the legal practitioner or firm has been guilty of misconduct or unsatisfactory conduct in relation to the provision of legal services to which the agreement relates; or

(c) that the agreement is not fair and reasonable.

(2) ....

(3) If the Tribunal orders that a costs agreement be cancelled, it may make such order as it thinks fit in relation to the payment of legal costs the subject of the cancelled agreement, taking into account the seriousness of the conduct of the legal practitioner or firm.

Except that there is no allegation of fraud, Mr and Mrs Leong's case calls in aid each of the matters specified in paragraphs (a), (b) and (c) of sub-section (1).

Although "the Tribunal" in section 103 now means VCAT (see paragraph 9 above) the reference to "the registrar or a deputy registrar" is inappropriate after the abolition of the Legal Profession Tribunal. VCAT is constituted by members: VCAT Act section 9. None of the transitional provisions contained in Schedule 2 of the Legal Profession Act 2004 expressly provides that a VCAT member now may do what a registrar or deputy registrar of the Legal Profession Tribunal could have done under section 103. But clause 8.5 of Schedule 2 provides that if any difficulty arises in a proceeding because of the operation of the Schedule VCAT can make any order it considers appropriate to resolve the difficulty. The continued application of Part 4 (which includes section 103) of the 1996 Act, permitted by clause 3.1 of Schedule 2 of the 2004 Act, must be capable of application by somebody. At the commencement of the hearing of the proceeding I made an order that it be heard by any member. I did so for the purpose of varying a previous direction that it be heard by a judicial member. Nevertheless the order may be regarded also as one made under clause 8.5 to resolve a difficulty created by inappropriate descriptions of decision-making personnel in section 103. At all events no submission was made at the hearing that I did not have the capacity to make an order under section 103.

Section 103(1)(b) refers to "misconduct" and to "unsatisfactory conduct." The definition section, section 3(1), states that in the Act each of those expressions has the meaning given in section 137.

Section 137, so far as it has been relied upon in this proceeding, provides:

What are misconduct and unsatisfactory conduct?

(a) misconduct by a legal practitioner or firm in the course of engaging in legal practice, including -

(i) ....

(ii) ....

(iii) ....

(iv) unsatisfactory conduct that amounts to a substantial or consistent failure to reach reasonable standards of competence and diligence;

(v) the charging of grossly excessive legal costs; or

(a) conduct by a legal practitioner or firm in the course of engaging in legal practice that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent legal practitioner or firm; or

(ab) conduct by a legal practitioner or firm in the course of engaging in legal practice that would be regard by a legal practitioner or firm in good standing as being unacceptable, including -

(i) conduct unbecoming a legal practitioner or firm;

(ii) unprofessional conduct; or

Section 86(3) provides that before being retained by a client to provide legal services, or as soon as practicable after being retained, a legal practitioner or firm must give the prospective client or client a concise written statement setting out -

(b) an estimate of the total legal costs, if reasonably practicable;

(c) if it is not reasonably practicable to estimate the total legal costs, a range of estimates of the total legal costs and an explanation of the major variables that will affect the calculation of those costs;

(d) if the legal services involve or are likely to involve litigation, an estimate of -

(ii) the range of costs that may be recovered if the client is successful in that litigation; and

(iii) the range of costs the client may be ordered to pay if they are unsuccessful.

Two relevant exceptions to the requirement to give such a written statement are found in section 90. One is if the client is a foreign company. The other is if the client is a trustee in its capacity as such. Those exceptions applied to Aljade and Jadewealth respectively. No exception applied to Mr Leong or to Mrs Leong.

The effect of a failure to give such a written statement of estimates when required is set out in section 91. There is nothing in the Act which provides for that failure to have any other effect. Section 91 provides:

If a legal practitioner or firm does not give to a client any information required to be given by this Division--

(a) on an assessment of a bill of costs, the assessed amount of the bill may be reduced by an amount considered by the person conducting the assessment to be proportionate to the seriousness of the failure to give the information;

(b) in determining a dispute in relation to legal costs, the Tribunal may reduce the amount of the legal costs by an amount considered by it to be proportionate to the seriousness of the failure to give the information.

The "assessment of a bill of costs" referred to in section 91(a) is an assessment under Part 4 Division 5: see section 101(2). Part 4 Division 5 deals with assessment by a Taxing Master of the Supreme Court. The "dispute" referred to is section 91 was a dispute in relation to a sum not exceeding $15,000.00 which, under Part 5 Division 1, could be determined by the Legal Profession Tribunal if conciliation failed. I cannot make such an "assessment" and there is no such "dispute". Accordingly, if Mr Sesto did fail to give a written statement of estimates to Mr and Mrs Leong in compliance with section 86(3), that failure does not have any direct legal significance under the Act. It may, I consider, have an indirect legal significance in two ways. First, it might be called in aid as evidence of "unsatisfactory conduct." Secondly, it might influence the exercise of the discretion under section 103 to cancel, or not to cancel, a costs agreement if one of the grounds for cancellation were to have been made out.

The Law: What Costs Agreements are Subject to Assessment

So far as it is relevant to this proceeding, section 101 provides:

(1) Subject to this Division and Division 4, a costs agreement may be enforced in the same way as any other contract.

(2) To the extent that it provides for legal costs to be paid according to a practitioner remuneration order or scale of costs of a court or tribunal, a costs agreement is subject to assessment under Division 5.

As I have already stated, "assessment under Division 5" (of Part 4) is assessment by the Taxing Master of the Supreme Court.

What section 101(2) makes subject to assessment by the Taxing Master is a costs agreement that provides for legal costs to be calculated according to a practitioner remuneration order or a court scale of costs. It does not provide for assessment of a costs agreement for time-based charges, as the two costs agreements in the present case were. Nor does anything else in the Act provide for assessment by the Taxing Master, or by anybody else, of a costs agreement with time-based charges. The consequence is that the Taxing Master cannot assess costs that have been charged pursuant to a costs agreement with time-based charges.

The decision of Beach J in Gaweda v Shaw [1999] VSC 474 is consistent with the proposition set out in the preceding paragraph. His Honour dismissed an appeal from a decision of the Taxing Master that he had no jurisdiction to tax a bill of costs that had been calculated according to time-based charges as provided for in a costs agreement. While his Honour dealt only very briefly with that issue of jurisdiction, there was nothing in the judgment to indicate any disagreement with the Taxing Master's conclusion on that issue. On the contrary, the implication was clear that his Honour agreed with the conclusion.

In his written final submission Mr Twigg submitted that Mr Sesto's invoices could have been assessed by the Taxing Master because section 109(2) provided that an interim bill of costs might be assessed under Division 5. It is true that Mr Sesto's invoices rendered from time to time until January 2004 were interim bills. But section 109 has to be read together with section 101. The result is, in my opinion, that an interim bill rendered in pursuance of a costs agreement may only be assessed under Division 5 if the costs agreement provides for costs to be paid according to a practitioner remuneration order or a scale of costs. At all events, the disputed invoices were not interim bills of costs. They were expressed to amount to a "final account".

As I have said, Mr and Mrs Leong's primary claim is are made under section 103 of the 1996 Act. They claim to be entitled to an order for cancellation of a costs agreement and to consequential orders including monetary orders.

The Amended Application includes a secondary claim. It is further or alternative claim which relies not upon the 1996 Act but upon the Fair Trading Act 1999. In turn, that secondary claim is put in two ways, each of which corresponds to a head of jurisdiction made available to VCAT by the Fair Trading Act:

(a) First, Mr and Mrs Leong seek the remedy available under section 159 of that Act, which is compensation for any loss or damage caused by a contravention of a provision of that Act. The provisions alleged to have been contravened are section 9, which prohibits misleading or deceptive conduct in trade or commerce, and section 8A which prohibits unconscionable conduct in trade or commerce in relation to the supply or possible supply of goods or services by or to a business consumer.

(b) Secondly, Mr and Mrs Leong allege that there is a "consumer and trader dispute", as defined in Part 9 of the Fair Trading Act, between them and Mr Sesto. They ask for a determination of that dispute in their favour. Of the remedies which section 108 of that Act empowers VCAT to grant when determining a "consumer and trader dispute", the only remedy that they specifically asked for in the Amended Application was "restitution...of such amount of the sum of $440,000.00 to which it [sic] is lawfully entitled."

In one way or another, Mr and Mrs Leong rely upon the following grounds for cancellation of a costs agreement which section 103 of the 1996 Act makes available:

misrepresentation;
- misconduct;
- unsatisfactory conduct;
- "that the agreement is not fair and reasonable."

I say that Mr and Mrs Leong rely upon the ground of "misrepresentation" even though no express allegation of "misrepresentation" within the meaning of section 103 was discernible either in the Amended Application or in Mr Coady's written final submission. I shall explain below why I say, nevertheless, that that ground is relied upon.

To support the allegations of misconduct and of unsatisfactory conduct, Mr and Mrs Leong rely upon features of Mr Sesto's conduct which, in the Amended Application, were alleged to have been breaches of terms of his retainer. Those features of his conduct were:

(a) Submitting to the Taxing Master for taxation a bill of costs which claimed more that the total of the costs that he had charged his clients, that is to say, claimed more than any indemnity to which the clients might have been entitled.

(b) Applying for his own benefit the costs of $440,000.00 paid by OCBC, without obtaining Mr and Mrs Leong's consent.

(d) Grossly over-charging in those re-drawn invoices, if he was entitled to render them at all.

(e) Procuring costs agreements which were not fair and reasonable.

The conduct alleged to have been misleading or deceptive, or unconscionable in contravention of the Fair Trading Act, includes those alleged features already set out in the preceding paragraph, but includes four more:

Leong v J P Sesto & Co

At a glance

Court

Decision date

Source

Judgment (311 paragraphs)

Leong v J P Sesto & Co (Legal Practice) [2009] VCAT 99 (30 January 2009)

Parties

Legislation Cited (2)

Cases Cited (1)