M J Leonard Pty Ltd v Bristrol Custodians Limited

Supreme Court of NSW|2013-11-08|Before: Windeyer AJ

Judgment 1This case is about legal fees. Specifically, whether the defendants owe the plaintiff legal fees incurred while the plaintiff was carrying out legal work for the defendants, or one of them. That will be a question for the final hearing or a hearing elsewhere. This interlocutory judgment is concerned with whether certain caveats lodged against the titles to certain parcels of land by the plaintiff should be kept on the Register.

The Parties 2The first defendant, Bristrol Custodians Limited, a company incorporated in New Zealand ("the Company"), and the second defendant, Geoffrey Ronald Buckfield, were sued in this Court by the liquidators of another company. They had been represented by other solicitors in that matter. 3In 2010 the plaintiff, M J Leonard Pty Ltd, an incorporated legal practice, was retained by the defendants to act for them in reviewing the Supreme Court proceedings and to sue the defendants' former solicitors.

The Costs Agreements 7The plaintiff's employee and the second defendant met on 4 February 2011. After that meeting and on that day Ms Sarkisian, a solicitor employed by the plaintiff, sent the defendants an email, which said, "We further enclose Covering Letter and our Standard Costs Agreement and Disclosure for you to read through carefully and provide us with instructions to continue with conduct of the matter." That agreement, dated 4 February 2011, described the work which the plaintiff had been instructed to do as including "providing initial advice and general conduct of matter." Ms Sarkisian executed the agreement on 4 February 2011. Both defendants were parties to the agreement, which was executed by the second defendant for himself and the first defendant on 23 February 2011. Mr Buckfield, as a director of the first defendant, is liable under clause I(b) of the Agreement, to have his property charged for the fees incurred by the Company. Clause B of that Agreement describes the work which the plaintiff was instructed to do as: "[i]nvestigation and review of matter, attending upon meetings with Liquidator, Accountants and You, corresponding with liquidator, providing initial advice and general conduct of matter". Accompanying that Agreement was a Standard Costs Disclosure which referred to "Stage 1" and gave an estimate of between $5,000 and $10,000, exclusive of GST. "Stage 1" was described as "[i]nvestigation and review of long standing matter to date, meetings with liquidator, Accounts and You, corresponding with liquidator and initial advice." 8On 19 December 2011 the defendants were sent, by Express Post, an updated Costs Disclosure. The covering letter referred to the two proceedings in this Court. The letter said "[p]lease find enclosed our updated Costs Disclosure of our professional fees and disbursements." The updated Costs Disclosure gave an estimate of between $311,330 and $368,550. The letter went on to say "[w]e further enclose two separate Costs Agreements and Costs Disclosures for the ATO and OSR proceedings respectively." When referring to agreements here and later in the judgment, I refer to documents called agreements. Apart from the one executed by Mr Buckfield on 23 February 2011, those documents have been executed on behalf of the plaintiff only. 9One of the new Costs Agreements dated 19 December 2011 described the work for which the plaintiff had instructions as "[p]roceed to file an objection to the ATO Amended Assessment, seeking leave to proceed in the name of ACN 092 138 442 Pty Ltd (In Liquidation), commence proceedings in the Administrative Appeals Tribunal including initial attendances, pleading and instructing Counsel". This document has only been executed by the plaintiff's employed solicitor. Annexed thereto was a "Standard Costs Disclosure" dated 19 December 2011. It gave an estimate of costs between $52,830 and $77,050. 10The other Standard Costs Agreement enclosed with that letter was also dated 19 December 2011 and relates to the dispute with the Office of State Revenue of New South Wales. The work to be done by the plaintiff was to "[p]roceed to seek a Review of the OSR notice of Determination in the Administrative Decisions Tribunal including initial attendances pleadings and instructing Counsel." This Agreement was executed by Ms Sarkisian only. This was accompanied by a costs disclosure which estimated costs of between $52,830 and $77,050. 11Each of those Costs Agreements has been stamped (Ex D), therefore no question under s 304 of the Duties Act 1997 arises with respect to them. 12Invoices have been rendered almost monthly in respect of each of the three matters, namely the Supreme Court proceedings, the ATO matter and the OSR matter. The invoices in respect of the Supreme Court proceedings commenced in March 2011 and ended in November 2012. The two taxation matters had invoices issued from December 2011 until November 2012. The defendants have paid the plaintiff $691,643.89 in respect of their costs to date. They dispute that they owe a further sum of $116,517.05 claimed by the plaintiff. 13Mr Buckfield admits to receiving and signing the Costs Agreement of 4 February 2011 and signing it on 23 February 2013. He also admits to receiving, on 21 December 2011 by email, the Costs Agreement and Costs Disclosure of 19 December 2011 with respect to the dispute with the ATO. He does not admit to receiving the Costs Agreement and Disclosure relating to the OSR matter. He does not admit to receiving the updated Costs Disclosure in respect of the first matter. 14Each of the three Costs Agreements mentioned above had in it clause I which provided, in part, as follows: I. Security and Charge Despite anything to the contrary contained herein or any other rights Leonard Legal [the plaintiff] may have: (a)If you are a company, upon acceptance of our offer, you hereby charge in favour of Leonard Legal all your right, title and interest over your assets, land, realty or otherwise, and hereby authorise Leonard Legal to lodge a charge, mortgage or caveat over those assets, land, realty or otherwise to secure payment of our legal costs and disbursements which are incurred as a consequence of us performing the services and works pursuant to this Costs Agreement. Such charge, mortgage and/or caveat shall remain in full force and effect until such time as our fees and disbursements are paid in full and you agree to execute any further or additional documents which are required by Leonard Legal to perfect the security granted herein. 15Clause I(b) was in the same terms save for the fact that the words "director of a client company" were substituted for the word "company" where it first appears above. Clause I(c) was in the same terms save for the fact that the words "an individual" were substituted for the words "a company" where they first appear above. I think it unlikely that Mr Buckfield would be bound under cl I(c) but he would be under cl I(b). 16Clause D provided for the acceptance of the offer to enter into a costs agreement, which offer was constituted by the sending of the written costs agreement. It provided as follows: D. Acceptance of Offer If you accept this offer you will be regarded as having entered into a costs agreement. This means you will be bound by the terms and conditions set out in this document, including being billed in accordance with it. Acceptance may be by any of the following ways:

signing and returning a copy of this document;
giving us instructions after receiving this document;
if you are a company, instructions are received from any of your directors or authorised persons;
oral acceptance.

The Land in Question 17Bristrol Custodians Ltd is or was at the date of hearing registered as proprietor of a one one-hundredth interest in five parcels of land located at Bankstown ("the Company Land"). Lewisham Saw Works Pty Limited holds the other ninety-nine one-hundredth shares as tenant in common in those five parcels. They are all lots in deposited plan 13506. At the time the caveat was lodged, the Company was registered proprietor of the land as former trustee of the LSW Property Trust, to which I shall return later. The plaintiff's caveat, AH879400, is lodged against those five lots. It claims an interest as chargee pursuant to clause I of the Standard Costs Agreement dated 23 February 2011, although the caveat does not refer to the limited interest in land over which the charge is claimed. 18Mr and Mrs Buckfield are the registered proprietors as joint tenants of two lots of land, in different deposited plans, in the Parish of Hunter's Hill ("the Hunter's Hill land"). Caveat no AH879395 was lodged by the plaintiff against Mr Buckfield's lots claiming an equitable charge under the same Standard Costs Agreement dated 23 February 2011. 19Mr and Mrs Buckfield, together with Angela and Christopher Buckfield, each of the four as tenants in common in equal shares, are the registered proprietors of two parcels of land at Bankstown ('the Bankstown land"). Caveat no AH879383 was lodged by the plaintiff against Mr Buckfield's two lots claiming an equitable charge, again under the Standard Costs Agreement dated 23 February 2011.

The Caveats 20Each caveat describes the interest thus: "Interest as chargee pursuant to Clause I of the Agreement executed by the registered proprietor in favour of the caveator as security for performance under the Agreement." The caveat then says that the interest is claimed by virtue of a Standard Costs Agreement dated 23 February 2011 the parties to which are "Bristrol Custodians Limited & M J Leonard Pty Ltd ACN 106 693 565 t/as LEONARD LEGAL". It then says that the interest is claimed by virtue of a "Charge arising out of Clause I of the Agreement executed by the registered proprietor in favour of the caveator as security for performance under the Agreement. The caveator consented to the lodgement of the caveat by executing the Agreement". Each of the three caveats is in the same terms. 21The description of the interest is not limited to the interest of only one person. A person inspecting the caveat would not understand it was limited to the interest of one of the registered proprietors named on the title; the caveat would indicate that it was entered against the whole land. However the person inspecting the register, which would be the first port of call, would see a notification of the caveat as affecting the interest of the company on the title and of Mr Buckfield on the other 2 titles. Baalman and Wells say that where the caveator's claim only relates to one registered proprietor's interest then only that person's name should be set out in the caveat and no other proprietor's name: F Ticehurst and P Blair, Baalman and Wells Land Titles Office Practice (Law Book Co, 1998, 5th edn, looseleaf) at 3202 [40.350]. That is what has been done here. It is sufficient I think. Even if the caveat may not comply with clause 1 of schedule 3 of the Real Property Regulation 2008, that can be overlooked under s 74L of the Real Property Act 1900 (the Act). 22Bristrol Custodians Ltd was appointed trustee of the LSW Property Trust in September 2005. It appears to have the sole function of being a trustee: the liquidator's final report confirms this. On 13 January 2013 the first defendant and the appointor under the trust deed resolved to appoint three new trustees of the trust, viz. Bristrol Custodians (Aust) Pty Ltd, Custodial Holdings Services Pty Ltd and Giovanni Holdings Pty Ltd. A deed of appointment to that effect was executed on 16 January 2013. Under the terms of the trust deed Bristrol Custodians Ltd became immediately disqualified from holding office as trustee upon its going into liquidation.

The Lapsing Notices 23This litigation was commenced in this way. The caveats were lodged on 16 July 2013. Transfers from the first defendant to the new trustees, together with a discharge of mortgage to Westpac Banking Corporation, and new mortgage to the Bank of Queensland, were lodged for registration shortly after that. The defendants' solicitors then prepared applications for lapsing notices to be issued with respect to the caveat over the Company Land and also with respect to the caveats over the Hunter's Hill land and the Bankstown land. There are no impending transfers of the latter two groups of land. The Registrar-General prepared the three lapsing notices. They were served on the plaintiff. Thereupon the plaintiff commenced these proceedings under s 74K of the Act seeking orders extending the operation of the caveats. 24Pursuant to the change in trustees, transfers in respect of the Company Land have been lodged for registration. The effect of the transfers to the new trustees is to transfer the five lots from the first defendant to Bristrol Custodians (Aust) Pty Ltd, Custodial Holdings Services Pty Ltd and Giovanni Holdings Pty Ltd as joint tenants. Section 74H(5)(b) of the Act provides that the Registrar-General may register a new registered proprietor where such a registration merely effects a change in trustee, notwithstanding the presence of a caveat on title. I was told from the bar table that at first the Registrar-General refused to register the transfers without an order of this Court. It now appears that he may be willing to register the transfer but only upon the Chief Commissioner of State Revenue stamping the transfers or marking them as not liable to duty. I am unaware of the present status of that process. The Registrar-General relied on evidence that the company had been deregistered in Australia. However it was registered as a foreign company in Australia and is still in existence and registered in New Zealand. I was told that the Registrar-General is considering this issue. The plaintiff has now stated that it will consent to registration of the discharge of mortgage to transfer to the new trustees and the mortgage to Bank of Queensland mentioned in paragraph 73. 25The defendants, through their counsel, Mr J A Rose, nevertheless press for the removal of the caveats as they bear upon the ability of all landowners to create further changes.

Issues 26The essential question for this interlocutory judgment is whether the plaintiff may have a charge or an agreement to execute a charge over the lands of the defendants by virtue of clause I of successive Costs Agreements. 27Although it is not at all clear from the Summons and Cross-Summons, the issues it was agreed I would deal with are as follows: (1)Whether the operation of the existing caveats should be extended until the hearing of the substantive issues? (2)Whether the plaintiff should be restrained from lodging further caveats over lands in which Mr Buckfield has an interest? 28The plaintiff may not be able to have entered new caveats over the Company Land as there will be new registered proprietors. Whether change of proprietors through appointing new trustees would prevent such a course was not subject to argument.

Amendment of Caveat over Company Land 29At one stage in these proceedings the plaintiff applied to amend the caveat affecting the Company Land by inserting a reference to the charge under the December 2011 ATO and OSR Agreements. This cannot be done. The terms of a caveat cannot usually be amended, either by the caveator or by court order. There is no such power explicitly conferred by the Real Property Act. Darley CJ said as much in Re Spencer (1904) 4 SR (NSW) 471 at 473. Hasluck J has held that where an amendment is sought which will substitute a new interest for the one originally claimed, no amendment should be ordered: Midland Brick Co Pty Ltd v Welsh (2006) 32 WAR 287 at 361. Barrett J (as his Honour then was) held the same view in Multi-Span Constructions No 1 Pty Ltd v 14 Portland Street Pty Ltd (2001) 10 BPR 19,253 at 19,282-19,283. The only way of protecting an interest not presently described in a caveat is to lodge a fresh caveat describing that interest.

Existing Caveats 30Subject to what appears later in this judgment on the question of undue influence and conflict of interest the operation of the caveats should be extended until final hearing. 31There is a question as to whether the original costs agreement is limited to what was described as stage 1 or whether it covers everything to do with the Supreme Court action. This is not a matter which can be decided on an interlocutory hearing. However there is a serious question to be tried as to the proper construction of the agreement and whether or not it covers only work referred to in the disclosure document. As the document referred to updated disclosures I consider that the balance of convenience here, now that consent has been given to the registration of the documents now lodged, that the operation of the caveat should continue in force. 32There is conflicting evidence as to whether the updated disclosure statement and either the ATO or OSR costs agreement were received by Mr Buckfield. I cannot decide that on this hearing and I proceed on the assumption they were received.

Amended Summons and Cross Summons 33By the Amended Summons the plaintiff seeks by way of interlocutory relief extension of the caveats. In the alternative it seeks leave to enter further caveats pursuant to s 74O(2)(a) of the Real Property Act. That is unnecessary now but in any event the claim was not to lodge caveats in respect of the same interest. 34Final relief claimed in paragraph 9 is meaningless as again it seeks that the operation of the caveats be extended until further order. This could have no end. 35There is also sought a declaration that the plaintiff has an interest or equitable charge over the lands and an order that the defendants execute documents "to cause the charge to be registered". 36The Cross Summons claims only final relief. The declarations sought under paragraph 1 seem to be misconceived as they are directed to the transfers to the new trustees. As it appears that as this matter is being dealt with it can be disregarded. 37This far-ranging document then seeks declarations that the February agreement was obtained through undue influence and in breach of fiduciary duty; and that as against Mr Buckfield it: (a) is unjust within s 7 of the Contracts Review Act; (b) contains an unfair term of a standard form contract within s 23 of the Australian Consumer Law; (c) is not fair and reasonable within the meaning of s 320 of the Legal Profession Act 2004. 38Orders are then sought that the agreements be set aside or that they be varied by striking out clauses D and I. 39In addition declarations are sought as to the 19 December 2011 agreements that they are ineffective to convey any interest in land as they are not signed.

Part Performance 40The question is whether the unexecuted agreements have been partly performed by the plaintiff such as to make them binding on the defendants. Section 23C(1) of the Conveyancing Act 1919 provides in part that: no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by the person's agent thereunto lawfully authorised in writing, or by will, or by operation of law; Section 23E(d) of that Act provides that s 23C does not affect the law relating to part performance. Section 54A(1) of that Act provides as follows: No action or proceedings may be brought upon any contract for the sale or other disposition of land or any interest in land, unless the agreement upon which such action or proceedings is brought, or some memorandum or note thereof, is in writing, and signed by the party to be charged or by some other person thereunto lawfully authorised by the party to be charged. Section 54A(2) provides that the section does not affect the law relating to part performance. Therefore, the plaintiff cannot obtain the benefit of the charge as chargee without the defendants, as chargors, executing the Costs Agreements unless the doctrine of part performance applies. 41The plaintiff's counsel submitted that actions of the defendant were sufficient to enable the doctrine of part performance to operate. He seemed to resile from that position during the hearing and concentrated on the plaintiff's acts in performing legal work. In any event, that is wrong. The rationale of the doctrine of part performance is that it is unconscionable for a defendant to rely on the Statute of Frauds 1677 (29 Car II, c 3) where a plaintiff has partly performed the agreement alleged. It is a doctrine to bind the conscience of the defendant, who is setting up the statute as a defence. Acts of a defendant may go towards deciding whether there is in existence a contract evidenced by the defendant's acts in pursuance of the alleged contract. They may go to an estoppel. But such acts have no part to play in equity's jurisdiction to allow interests in land to be created in land otherwise than by writing signed by the creator of the interest. As Sir Edward Fry said in A Treatise on the Specific Performance of Contracts (1921, 6th edn, Stevens and Sons) at 276: This exception [to the Statute of Frauds] seems to be based on the view that if a man have made a bargain with another, and allowed that other to act upon it, he may have created an equity against himself which he cannot resist by setting up the want of formality in the evidence of the contract out of which the equity in part arose. 42In Maddison v Alderson (1883) 8 App Cas 467 at 479 the Earl of Selborne LC said that: the acts relied upon as part performance must be unequivocally, and in their own nature, referable to some such agreement as that alleged. 43Isaacs and Rich JJ approved that formulation in McBride v Sandland (1918) 25 CLR 69 at 78. Gibbs J, with whom Stephen, Mason, Jacobs and Murphy JJ agreed, described it as "a correct statement of the law" in Regent v Millett (1976) 133 CLR 679 at 683. 44The present case is not one like many part performance cases where the contract for the assurance of the land is wholly oral. Here there are claimed written agreements, the terms of which may have been accepted by conduct and would then be only lacking in that they have not been executed by the defendants. The plaintiff's exertions must be referrable to the Costs Agreements. There is no other contract to which they could refer. 45However, are they referrable to the charging clause? In effect, the costs agreements embody two contracts, one for the provision of legal services and the other to create an equitable charge over land. Are these severable such as to prevent the plaintiff claiming an interest in the defendants' land or are the acts of part performance referrable to both the assurance of land and the legal services contract? 46Nicholas J considered a situation very similar to the present in Moloney v Coppola [2012] NSWSC 728. There, the plaintiff had sent costs agreements to the defendants containing clauses charging the defendants' real property for unpaid legal fees. They were not signed by the defendants. The plaintiff sought to protect his equitable charge by caveats. His Honour said at [35]: Where there is a composite contract, in part disposing of land and in part having other effects, part performance of the latter aspects is capable of being part performance of the transaction as a whole and thus of the land aspect. 47For that proposition, Nicholas J relied on the decision of Tipping J in the Court of Appeal of New Zealand in Fleming v Beevers [1994] 1 NZLR 385. In that case there were several contracts between a de facto husband and wife which all formed part of the same transaction. Some related to land, others did not. Tipping J, speaking for the Court of Appeal, said at 392: We consider ... that with a composite contract of this kind it is not appropriate for the purposes of the doctrine of part performance to sever the aspect which involves the disposition of land from the other aspects ... It is the composite contract of which part performance must be demonstrated not that aspect alone which relates to land. For this reason part performance of the other aspects of a composite transaction are capable of being regarded as acts of part performance of the transaction as a whole and thus of the land aspect. 48To arrive at that conclusion, Tipping J relied on the decision of the House of Lords in Steadman v Steadman [1976] AC 536. For the purposes of this interlocutory decision the decisions of Nicholas J and Tipping J suffice, although they would require detailed discussion at a final hearing, particularly as Tipping J appeared to rely on Steadman. There is a triable issue that there were acts of part performance by the plaintiff. It is certainly arguable the part performance is referrable to the entire contract and therefore the entire charging clause is specifically enforceable. 49As I have said the Cross-Claim set out prayers for final relief in respect of the Costs Agreements but the hearing was conducted on the basis that, unless restrained, the plaintiff would enter further caveats based upon the later claimed agreements in which case fresh lapsing notices would be issued. I was therefore asked to determine what might seem to be a hypothetical question in an attempt to save further costs but perhaps it could be justified on the basis of a quia timet injunction. I now consider that this was a mistake but in any event the problems of taking this action can be taken into account on what is in essence a rather hypothetical matter.

Undue Influence and Breach of Fiduciary Duty 50The defendants say that in any event the charges are unenforceable either because they were procured in a relationship where the plaintiff is presumed to have exercised undue influence over the defendants or because it was a breach of the plaintiff's fiduciary duties to the defendants to procure such a charge. 51It is presumed that a solicitor is in such a position of ascendancy over his client that there will be undue influence exerted by the former over the latter. That presumption, of course, may be rebutted by the solicitor. It is easier to rebut when a corporate client is involved. It is apparent that there may be a defence based on this claim to the February 2011 caveats.

Breach of Fiduciary Duty 52There is a clear conflict of interest here as between the solicitors and their clients. At the very least informed consent of the client to the charges was required. 53Has the plaintiff breached the fiduciary duties it undoubtedly owes to the defendant? The plaintiff obtained a benefit from the defendants by their agreement to grant equitable charges over all land and personal property owned by them. It was submitted that this was far in excess of anything that was or is necessary to secure the fees alleged to be owing. There is no evidence of the land's value nor the defendants' equity therein, so I cannot evaluate that submission's accuracy. However, the defendants certainly could not have given a more extensive or comprehensive security than that which they did give. This called for explanation. The plaintiff obtained this benefit without explaining to the defendants the consequences such an equitable charge would have. The solicitor's interests are in direct conflict with those of his clients. It is enough to cite the decision of the House of Lords in Boardman v Phipps [1967] 2 AC 46 to show the consequences such a conflict will have and the strictness which equity applies to fiduciary relationships. The solicitor cannot benefit at his client's expense. 54I would not consider knowing consent could be obtained by sending such an agreement by email or by post and asking the client to read it carefully. This statement refers only to Mr Buckfield and not to the company. The charge it protected by caveat could prevent any further mortgage loans being obtained. The caveat could be entered whether or not any costs were outstanding as the charge comes into existence upon acceptance of the offer which is embodied in the costs agreements. Unless advised Mr Buckfield would not necessarily know that an application could be made to the Court to enforce the charge by judicial sale of the land, or for that matter of his motor car or trousers, or that if the charge were enforced an application could be made for the appointment of trustees for sale to the prejudice of members of his family.

Decision 55The defences based on undue influence and breach of fiduciary duty do I think present significant problems for the plaintiff in upholding the charge. Claims under the Contracts Review Act 1980 and the Competition and Consumer Act 2010 can only be dealt with at a final hearing. However, so far as the February agreement is concerned then unless the Cross-Claim contentions succeed then the agreement is binding. In my view the balance of convenience justifies the caveat remaining in force with a requirement that application be made for an expedited hearing. The order I make should require the matter to proceed on pleadings and should state that if the plaintiff seeks to maintain a charge arising on the December documents then this claim must be included and pleaded in the Statement of Claim and a Further Amended Summons filed. It is my view that if the plaintiff fails to comply with directions as to the further conduct of the action, the caveat should lapse. 56So far as the so-called quia timet injunction to prevent the threatened action is concerned, it is by no means certain any caveats would be lodged nor is it certain on what the terms any caveat would be. The lapsing procedure is I consider the appropriate procedure for these matters and in any event the present caveats will remain in place until the final hearing. Thus I would refuse the oral application for any interim injunction.

Some Further Considerations 57I wish to make two further comments about the circumstances giving rise to this case. First, the solicitors ought to have been more diligent in having their clients sign the costs agreements. This may have avoided much argument and expense in this suit. As Bryson JA said in Khoury v Khouri (2006) 66 NSWLR 241 at 248: It must be obvious to anyone with any business experience and to any adult who gave any thought to his or her own interests that an arrangement involving significant sums of money about something so important as ownership of a family home should be written down. There has been a law requiring dealings with land to be in writing if they are to be effective in England for well over three centuries, and in Australia for as long as there has been a legal system here, and what that law requires is no more than reasonable people would do if they considered their own interests. 58That comment was directed at non-lawyers regarding the ownership of a family home. It applies even more forcefully to solicitors who should be conversant with the Statute of Frauds, at least to protect their own interests, let alone their clients'. They should not put themselves in a position of having to rely on the doctrine of part performance. 59Secondly, these types of charging clauses in costs agreements may not be uncommon but there is no evidence they are standard. Neither should they be as there is an obvious conflict. 60I have given careful consider to the decision of White J in Country Law Services Pty Ltd v Duff (2007) 13 BPR 24,953 in considering whether as a matter of discretion the caveat should lapse but on balance I consider the matter should proceed to trial.

Final Comments 61Lastly, as this will probably be the last, but one, judgment I will have the privilege of delivering I state that unless there are exceptional circumstances, agreements of this type should not be standard. The Legal Profession Act 2004 provides in s 320 that a "law practice may take reasonable security from a client for legal costs". While that is a provision which cannot be enforced security over all one's assets is unlikely to be reasonable. Security, if taken, should be by separate document making the position quite clear. The purpose of costs agreements is to set out the work to be done and the basis of charging. In most cases no more should be required. If it is, and there are clearly cases where more is required, then a separate document is desirable.

Costs 62While in interlocutory caveat matters costs usually follow the event on the interlocutory hearing I consider the matters which arise clearly on the Cross Summons justify a different order. The costs of the hearing before me should be costs in the final hearing unless a contrary order is made by the trial Judge.

Orders

On the plaintiff through its counsel giving the usual undertaking as to damages order that the operation of caveats AH879400; AH879395; and AH879383 be extended until final determination of the action or further order.
Order that the matter proceed on pleadings and that the plaintiff file and serve a Statement of Claim by 3 December 2013.
Order that any claim for a charge other than under the February 2011 document be included in the Statement of Claim and a Further Amended Summons filed.
Order that the defendants file a Defence and any Amended Cross-Claim by 13 December 2013.
Order that the matter be placed in the Expedition List on 6 December 2013 and that the defendant file an affidavit by 2 December 2013 setting out the basis of the claim for expedition.
Order the costs of the interlocutory hearing be costs in the final hearing unless orders to the contrary are made by the trial Judge.
Liberty to restore on 14 days' notice.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 25 November 2013

(NZ) Competition and Consumer Act 2010(Cth)

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