New South Wales Supreme Court CITATION : Koutsourais & Anor v Mary Metledge [2003] NSWSC 224 HEARING DATE(S) : 12 March 2003 JUDGMENT DATE : 28 March 2003 JURISDICTION: Common Law Division JUDGMENT OF : Master Malpass DECISION : The Summons is dismissed. The plaintiffs are to pay the costs of the Summons. The Exhibits may be returned. CATCHWORDS : Proceedings founded on compromise agreement - availability of statutory defence - character of claim - waiver. LEGISLATION CITED : Legal Profession Act 1987, Pt 11 s 174, s 192. Conder v Silkbard [1999] NSWCA 459. Connolly Suthers (a firm) v Frost [1995] 2 Qd R 117. CASES CITED : Dodd v Gillis (1989) 16 NSWLR 623. Joseph Evans & Co Ltd v Heathcote [1918] 1 KB 418. Scadding v Eyles [1846] 9 QB 858. Udovenko v Mitchell (1997) 160 ALR 161. Manuel Koutsourais (First Plaintiff) PARTIES : Bambakit Pty Limited (Second Plaintiff) v Mary Metledge T/as Metledge & Associates (Defendant) FILE NUMBER(S) : SC 12925 of 2002 COUNSEL : Mr C A Vindin (Plaintiffs) Mr A Blank (Defendant) SOLICITORS : Tzovaras Legal (Plaintiffs) M R Barber & Associates (Defendant) LOWER COURT Local Court JURISDICTION : LOWER COURT 1093 of 1998 Burwood Local Court FILE NUMBER(S) : LOWER COURT W G Pierce LCM JUDICIAL OFFICER : IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Master Malpass Friday 28 March 2003 12925 of 2002 Manuel Koutsourais & Anor v Mary Metledge T/as Metledge & Associates JUDGMENT 1 MASTER MALPASS: This is an appeal from the Local Court. In that court, the defendant brought proceedings against the plaintiffs to recover a monetary sum. 2 The defendant is a solicitor. She provided legal services for the plaintiffs. The first plaintiff is the managing director of the second plaintiff. 3 A Liquidated Statement of Claim was filed on 1 June1998. It pleaded a claim for work done by the plaintiff for the defendants at their request. It annexed various Memoranda of Costs and Disbursements (see Exhibit A) relating to work done during the period from July 1993 to October 1995. 4 The case that was litigated by the defendant at the hearing was somewhat different. The nature of such case was outlined in the opening given by counsel. No objection was taken to the case proceeding on that basis. I shall now refer briefly to that nature of the case that was litigated. 5 The defendant alleged that an oral agreement was made on 17 July 1996. It has been treated as being a compromise agreement (the compromise agreement). I shall briefly refer to certain of its features. There was an acknowledgment of indebtedness and an agreement to pay the sum of $9,398. This amount was less than the sum total of the amounts claimed in the various Memoranda. There was to be monthly repayments of a minimum of $1,000. The alleged agreement was said to involve a forbearance in relation to the taking of winding up proceedings. 6 The alleged agreement was hotly disputed. There was clearly strong ill feeling between the parties. The credibility of the witnesses was a significant matter. 7 The decision of the learned Magistrate was handed down on 12 August 2002. He gave written reasons. He accepted the evidence of the defendant and entered judgment for the sum claimed. 8 On 7 February 2002, prior to the deciding of the question of the disputed agreement, the learned Magistrate had decided what was described as a preliminary question. It concerned the application of the provisions of s 192 of the Legal Profession Act 1987 (the Act). It was also a matter that was first raised late in the proceedings. It appears that the case proceeded on the basis that the section had not been complied with. 9 The learned Magistrate found that the section had no application in the circumstances of this particular case. The disclosure of the reasoning process for the decision on this preliminary question both in the transcript and the reasons for decision was sparse. However, the court did have the advantage of detailed written submissions on the question and no question of the adequacy of the reasons was raised as a ground of appeal. 10 It was this preliminary question, which gave rise to the only question argued by the plaintiffs on the appeal. This question was whether or not the learned Magistrate had erred in deciding that the section had no application to the circumstances of this case. 11 Section 192 is in the following terms:- " 192. Bill of costs to be given before costs can be recovered from client (1) Proceedings for the recovery of costs by a barrister or solicitor for providing legal services must not be commenced or maintained against any person unless at least 30 days have passed since a bill for those costs was given to the person in accordance with this Division. (2) The Supreme Court may make an order authorising a barrister or solicitor to commence or maintain proceedings against a person sooner, if the Supreme Court is satisfied that the person is about to leave New South Wales." 12 A purpose of the section is to afford a client the benefit of sufficient detail of the fees that are sought to be recovered and an opportunity to consider the position before proceedings can be commenced. It is an enactment of one of the "Clients' rights" referred to in s 174 (Part 11 Legal fees and other costs). 13 The court was told that the learned Magistrate brought the case of Connolly Suthers (a firm) v Frost [1995] 2 Qd R 117 to the attention of the parties. Although this decision is not mentioned in the decision of the Magistrate, the parties have proceeded on the basis that he relied on it in deciding the preliminary question. 14 It is a decision of the Queensland Court of Appeal. A judgment was delivered by the court. It concerned different legislation and the facts were distinguishable from the present case. 15 The submissions made by the plaintiffs to the learned Magistrate appear both in the Summons and as annexures to an affidavit sworn by Mr Tomaras. The plaintiffs have again relied on those submissions in this appeal. For present purposes, it is unnecessary to repeat what is said therein. The plaintiffs have taken the court to a number of cases (including Conder v Silkbard [1999] NSWCA 459, Udovenko v Mitchell (1997) 160 ALR 161, Joseph Evans & Co Ltd v Heathcote [1918] 1 KB 418 and Scadding v Eyles [1846] 9 QB 858). 16 Conder is authority for the proposition that the terms of s 192 are to be regarded as being mandatory. If the section is not complied with, it provides a defence in proceedings brought for the recovery of costs for the providing of legal services. Conder left open the question of whether or not the section may cease to be available as a defence by reason of waiver or estoppel (see Dodd v Gillis (1989) 16 NSWLR 623). 17 Section 192 has application where there are proceedings for the recovery of costs by a barrister or a solicitor for providing legal services. 18 The defendant contends that the proceedings brought by her could not be so characterised. It is contended that a change in character of what was sought to be recovered took place upon the parties making the compromise agreement. It is further said that the claim litigated was a claim for debt arising from breach of the compromise agreement. 19 The submissions receive some support from what was said by the court in Connolly. However, each case will turn on its own particular circumstances. 20 It seems to me that the learned Magistrate has had regard to the particular circumstances of the case before him. In those circumstances, I consider that it was open to him to take the view that the section had no application because the defendant's proceedings were not for the recovery of costs for providing legal services. 21 It appears from the submissions that questions of waiver may have been ventilated during the hearing before the learned Magistrate. This was a case where Memoranda of Fees had been furnished, there had been an acknowledgement of indebtedness and an agreement to pay (see Udovenko at pp 5 – 6). The defendant did not seek to pursue such questions on the hearing of the appeal. Whilst these matters may have also assisted the learned Magistrate in reaching his decision, for present purposes, I put them aside. 22 For completeness, I should mention two further matters. 23 The appeal is presently incompetent. It was brought out of time. This matter was not argued and the question of extension of time was not addressed by the plaintiffs. 24 The amount in issue is but a modest sum which has been the subject of dispute over many years. It is a matter which has generated costs which are now disproportionate to the amount in issue. It seems to me that it is in the interests of the parties that the matter now come to finality. 25 The plaintiffs bear the onus of demonstrating that the decision of the learned Magistrate should be disturbed. In my view, that onus has not been discharged. 26 The Summons is dismissed. The plaintiffs are to pay the costs of the Summons. The Exhibits may be returned. ********** Last Modified: 04/01/2003 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.