119 With respect to the task lists, a reasonable time for delivery, it was said, must be no later than 90 days after the meeting, for the lists were to deal with work to be done within this period. The evidence shows that the task lists, which were in fact provided next after the meetings of 18 February in respect of each of the Blueberry, Gilmour Nominees and Gadens Stamp Duty files, were provided 76 days after the meetings; those after the meetings of 21 March in respect of each of the Sintoff Lease, RMBL and Sintoff Reinstatement files were provided 42 days after the meeting. In each case the task list was provided after the second and third default notices of 1 and 8 May 2003 which rely in part on this failure as a contractual default.
120 The agreement to hold the three file review meetings is said in the Equus particulars to be contained partly in a memorandum from Mr Russo dated 5 February and partly oral. This memorandum appears to have been sent with a new Excel spreadsheet format for the task lists. It contains a statement that the meetings are to be held monthly. It also contains a timetable for the forthcoming meetings which included, with respect to the two ANZ files and the Worts file, that the meeting should take place on 20 February. By return e-mail dated 10 February WFW scheduled these meetings for 2 pm on 18 February. In an e-mail of 13 February Mr Russo noted the new dates but observed that the meetings would not be productive unless the relevant updated task lists were provided by the following day so that he could look at them over the weekend. The obligation to hold the meetings as agreed is said to arise from cl. 12c and from WFW's implied obligation to comply with its client's instructions.
121 Task lists were provided for the files other than the three here in question and the file review meetings with respect to those other matters were duly held on 18 February. Mr Snell accepted that the three February file review meetings in question did not take place. He said that at that time he and Mr Russo were very heavily engaged with the Beagle file. A 30 day trial of the matter was due to commence on 11 March and there was a mediation scheduled for late February. He said that this meant that these meetings could not occur and he said that Mr Russo accepted that this should be so. The three meetings were held later, on 23 May 2003 after the task lists had been forwarded to Mr Russo on 13 and 14 May. This was after the second notice of default had been given on 1 May based in part on the failure to conduct those meetings. Meetings with respect to the other six files were held on 12 and 13 May 2003.
122 While it must be accepted that these periodic file review meetings were contemplated in the deed of costs and that, pursuant to cl. 12a, WFW was entitled to charge for them, the deed does not make provision for the manner in which they were to be convened. The wording of cl. 12a, "Nick Russo may, from time to time, meet..." suggests a good deal of flexibility which he sought to modify in the structured procedure which he set out in his memorandum of 5 February 2003. Mr Snell who was handling the two ANZ files and the Worts file said that the meetings were not held as planned because there were more pressing matters to attend to and that Mr Russo accepted this. Elsewhere, he says of the Worts file that in or about early to mid February 2003, the Worts file "was essentially held in 'abeyance' (with the knowledge and acceptance of Russo)". He was challenged on this last statement and Mr Russo denied that he was a party to it. Mr Snell did not escape unscathed from a vigorous cross-examination on this "abeyance" evidence and I do not accept his evidence that Mr Russo agreed with this in any formal way. Nevertheless, the conclusion is inescapable that, in February, the focus of Mr Russo and Mr Snell was on the more pressing Beagle matter. My very strong impression that, if Mr Russo was at all concerned with the non-provision of the task lists with respect to these three matters and the abandonment or deferral of the 18 February meetings with respect to them, it was no more than an irritant and that it assumed greater importance only when the issue of the disposition of the Beagle settlement money caused in April a breakdown in the confidence which he had held in WFW.
123 As pleaded, the failure to hold the meetings is put as a breach of cl. 12a which I have set out above[56] and a breach of the implied term to comply with the client's instructions. It is not every instruction which falls within the scope of such an implied term. For example, an instruction to attend a meeting or to return a telephone call may in many circumstances be more properly characterised as a discourtesy rather than a breach of contract or other duty owed by a solicitor to the client. To my mind, even if the meetings in question were not held without the concurrence of Mr Russo, which I do not accept, this is not a failure to follow an instruction of the latter kind attracting legal consequences.
124 I do not, therefore, characterise the failure to hold the meetings of 18 February as a breach of any term of the deed of costs.
125 I return now to the suggested late delivery of the six task lists. The purpose of these lists is usefully set out in Mr Russo's oral evidence as being four-fold:
To identify the strategic matters to be dealt with.
To record Mr Russo's strategic instructions to be implemented by the solicitors.
To assist WFW to manage and direct their own staff. In this way Mr Russo was able to bring to bear his management skills and experience for the benefit of the solicitors who might not have them.
To enable Equus to maintain a control over the legal costs. As Mr Russo observed, he "had been around long enough to know that law firms at the end of the day make money churning fees."
126 The failure of WFW to provide these lists in late 2002 had been such a cause for concern for Mr Russo that he issued his cease work instruction on 9 December 2002. In one of his follow up e-mails, that of 13 February 2003, he emphasised the importance of having the lists before the file review meetings. This same point was made by him in cross-examination. If this be the contractual requirement relied upon then the lists were in each case provided before the file review meeting. But in his memorandum of 5 February 2003 Mr Russo speaks of the lists being updated and forwarded by each Monday. The tone of this memorandum suggests that, by this time, the task lists had become an end in themselves. Whatever might have been his expectation, the requirement in the deed of costs that the lists be provided a reasonable time after the meeting cannot be one that requires weekly updates. This is particularly the case in the light of the detail required in the new pro-forma produced by Mr Russo in February. Equally, it cannot be correct that, as a matter of contract, the obligation of WFW to provide the task lists was not a reasonable time after the meeting, but a reasonable time before the next meeting. What is a reasonable time after the meeting must have regard to the difficulty of producing the lists but also to the role they were to play at that time in the conduct of the litigation. Nothing was said about this with respect to the six matters whose tasks lists were said not have been provided as required.
127 Nevertheless, it is clear that the task list for each of those six matters was not provided within a reasonable time after the meeting. I therefore conclude that on 1 May WFW was in breach of cl. 12c as alleged in paragraph 6K of the statement of claim.
The Worts Litigation
128 The allegation with respect to this matter is that WFW failed to reply to a letter from the trustee in bankruptcy of Robert Worts and to send to the trustee a copy of certain loan documentation and a calculation of debt[57]. This allegation is also put as a default in the third notice of default dated 8 May 2003. At the relevant time the file was being handled by Mr Snell.
129 The background is that a proceeding had been commenced by Equus against Robert Worts, Alan Worts and his wife Astrid Worts as guarantors of company debts owed to Equus. Judgment was obtained on 10 May 2000 against Alan Worts and Robert Worts for a sum which, including interest, amounted to a little less than $300,000. Each of the debtors became bankrupt. Robert Worts owned some real estate prior to his bankruptcy and Equus raised with his trustee the prospect of its having a priority with respect to this property over ordinary unsecured creditors. It lodged caveats over the property to protect its interest.
130 The evidence concerning this matter is confusing and obscure. It starts with a letter dated 1 August 2002 from the trustee's solicitors, Messrs Ponte Earl Harrick, addressed to Mr Russo seeking a copy of the loan documents and a calculation of indebtedness. In its particulars Equus alleges that, in or about August 2002, Mr Russo instructed Mr Snell to provide an essentially non-responsive reply. He was to state that the loan documents had previously been provided, that the trustee had agreed that he would not challenge the Equus caveat and that Equus had a judgment in respect of the debt. In paragraph 216 of his witness statement, Mr Russo said that he spoke to Mr Snell about this on at least three occasions between August and December urging him to write the letter but he did not do so. So far, the matter is fairly straight forward.
131 What is puzzling is that Mr Russo in the witness box said he did not receive the trustee's solicitors' letter at this time. It was not until some time later that he saw it, some months later, when Ponte Earl Harrick contacted him by letter or telephone seeking a response. It cannot be correct, therefore, that he discussed the matter with Mr Snell in August or even perhaps September. No follow up letter was tendered. Notwithstanding this, Mr Russo then said that it was not until he obtained the WFW files, after June 2003, that he first saw the letter of 1 August. It is therefore very surprising that he pursued Mr Snell in December for a response to a letter he had not yet seen.
132 Mr Snell denied receiving a copy of the letter of 1 August and said there was no copy on his file. He said he had a discussion with Mr Russo about the Worts file on the afternoon of 1 August but no letter from the solicitors was discussed. He wrote to the trustee, not to the solicitors, a letter of 5 August in terms of the instructions which he had received on 1 August. This letter was not responsive to the letter of 1 August from the trustee's solicitors. Mr Snell said that he first saw the letter of 1 August when it was produced by Equus upon discovery. For the reasons given and for those in the following paragraphs, I accept Mr Snell's evidence as to this discussion in preference to that of Mr Russo.
133 On 13 August, Mr Snell had a three minute conversation with Mr Harrick, the trustee's solicitor in the course of which he was asked to provide the loan documents. He said he did not recall that he gave Mr Harrick any assurance to provide the documents as Mr Harrick later wrote. Mr Snell's file note of this conversation was not produced. In any event, it seems the documents were not provided.
134 There is mention of the trustee writing to Mr Snell on 19 August 2002 but this document was not produced.
135 On 17 September 2002, according to his file note, Mr Snell discussed the Worts matter with Mr Russo. On the same day he wrote to the trustee responding to his letter of 19 August with respect to the matters discussed with Mr Russo. This letter did not refer to the request for production of the loan documents.
136 On 4 October Mr Snell went on leave for about three weeks. During his absence, Mr Harrick wrote, on 14 October, a letter addressed to him reminding him of his assurance of 13 August and stating that, unless the loan documents were provided, the trustee would apply to have the caveats removed and would seek costs. Mr Snell said that a reply to this was sent in his absence by the firm but this reply was not produced.
137 Upon his return from leave Mr Snell said that he was preoccupied with the Beagle matter and that he was not otherwise able to explain why the loan and other documents were not forwarded to the trustee or to Mr Harrick.
138 The matter is then mentioned by Mr Russo in his e-mails to Mr Snell of 4 December and 9 December 2002. Mr Snell on 23 December e-mailed Ms Russo noting that the solicitors for the trustee had said that they had sought the loan documents and asking her to call to discuss the matter. It seems that nothing further was done. Mr Snell said that in December 2002 and January 2003 he was in frequent contact with Mr Russo but he neither sought nor was given a copy of the loan documents to forward to the trustee or to Mr Harrick.
139 Arising from this, the contention of Equus is that WFW was in breach of its obligation to comply with its client's instruction. Before me it was put that this instruction was that the loan documentation be provided. The difficulty with this is that, first, I do not accept the evidence of Mr Russo that he gave such an instruction. Furthermore, this is not the instruction which is pleaded in paragraph 6P of the statement of claim. I find no breach.
Termination of the Deed of Costs
140 I am concerned at this point with the contention of Equus that the deed of costs has been terminated on 27 May 2003, 2 June 2003, on or about 3 June 2003 or on 25 August 2003. The terminations on 27 May 2003 are said to have been effected by Equus in accordance with the procedure set out in cl. 17 of the deed of costs following a first notice of default and a second notice of default each given on 1 May 2003[58]; the termination on 2 June 2003 was in accordance with the same cl. 17 following a third notice of default given on 8 May 2003[59]. The termination of 3 June is said to occur following a notice of default given by WFW on 12 May 2003 and by reason of the conduct of WFW on or about 3 June which was consistent only with its decision to terminate the deed of costs[60]. The remaining termination is said to have been effective pursuant to cl. 2 of the deed of costs by a 90 day notice given by Equus on 27 May 2003[61]. Before I deal with these contentions in turn, it is necessary that I say something about the procedures for termination in cll 17 and 2 of the deed of costs and the relationship between these.
The contractual provisions
141 The deed of costs provides in cl. 17 and cl. 18 for its termination by either Equus or WFW respectively for default by the other. These clauses are not in identical terms and I shall set out their relevant parts in full: