Salvatore Blanda v Kemp Strang Lawyers Pty Ltd [2006] NSWSC 48

New South Wales Supreme Court

CITATION : Salvatore Blanda v Kemp Strang Lawyers Pty Ltd [2006] NSWSC 48

HEARING DATE(S) : 30,31/01/2006

JUDGMENT DATE : 10 February 2006

JUDGMENT OF : James J at 1

DECISION : Order made in favour of the plaintiff on condition that the defendant's claim for costs and disbursements is satisfactorily secured.

CATCHWORDS : CIVIL LAW - SOLICTOR - COSTS – whether former solicitors are entitled to a lien – if entitled to a lien, the conditions subject to which an order under s728 of the Legal Profession Act 2004 should be made.

LEGISLATION CITED : Legal Profession Act 2004 Legal Profession Act 1987 Professional Conduct and Practice Rules (Solicitors Rules)

Bechara v Atie [2005] NSWCA 268 Gamlen Chemical Co (U.K) Ltd v Rockem Ltd & Ors [1980] 1 All ER 1049 CASES CITED : Jankowski v Mastoris (1995) 7 BPR 14,589 Major Projects Pty Limited v Sibmark Pty Limited [1992] ANZ ConvR 349 Robins v Goldingham (1872) LR 13 Eq 440

PARTIES : Salvatore Blanda v Kemp Strang Lawyers Pty Ltd

FILE NUMBER(S) : SC 15402/2005

COUNSEL : M Maxwell - Plaintiff S Docker - Defendant

SOLICITORS : McLachlan Chilton - Plaintiff Kemp Strang - Defendant

LOWER COURT DATE OF DECISION : 01/30/2006

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

JAMES J

Friday 10 February 2006

15402/05 SALVATORE BLANDA v KEMP STRANG LAWYERS PTY LIMITED

JUDGMENT 1 HIS HONOUR: In these proceedings the plaintiff Salvatore Blanda ("the plaintiff" or "Mr Blanda") seeks an order pursuant to s 728 of the Legal Profession Act 2004 that his former lawyers deliver to him a file kept by the lawyers in acting as solicitors for him. The defendant or defendants are variously named in the Court papers but no issue has been taken about whether the proper defendant is a corporation Kemp Strang Lawyers Pty Limited or the partners of an unincorporated firm Kemp Strang Lawyers. In this judgment I will refer to the defendant or defendants simply as "the defendant" or "Kemp Strang". 2 Section 728 (1) of the Legal Profession Act 2004 is in the following terms:- "(1) On the application of a client of a law practice, the Supreme Court may order the law practice: (a) to give to the client a bill of costs in respect of any legal services provided by the law practice, and (b) to give to the client, on such conditions as the Supreme Court may determine, such of the client's documents as are held by the law practice in relation to those services." 3 Kemp Strang delivered bills of costs in respect of the legal services provided by Kemp Strang to the plaintiff. The plaintiff seeks an order pursuant to par (b) of subs (1) of s 728 that Kemp Strang give to the plaintiff documents of the plaintiff over which Kemp Strang claims a lien for unpaid costs. 4 The plaintiff's application is supported by an affidavit by John Gerard Amond, a solicitor employed by the plaintiff's present solicitors Messrs McLachlan Chilton. 5 Kemp Strang rely on an affidavit by Sarina Roppolo, a partner in the firm of Kemp Strang, who acted for the plaintiff. At the hearing before me Ms Roppolo was cross-examined, fairly briefly, on her affidavit. 6 There is little or no dispute about most of the primary facts and the following statement of facts is derived partly from Mr Amond's affidavit and partly from Ms Roppolo's affidavit. 7 On 1 September 2001 the plaintiff's younger brother Simon Blanda died as a result of injuries he had received in a motor vehicle accident on 22 August 2001. 8 In about April 2002 a woman named De-anne Forno brought proceedings in the Supreme Court seeking a declaration that she had been Simon Blanda's de facto wife and seeking a grant of letters of administration of Simon Blanda's estate. These proceedings can conveniently be referred to as "the Supreme Court proceedings". It would appear that Mr Blanda was a party to the Supreme Court proceedings and that Mr Domenic Carbone acted as his solicitor in the Supreme Court proceedings. 9 On 20 December 2002 the Supreme Court proceedings were settled. However, Mr Blanda was dissatisfied with the settlement of the Supreme Court proceedings and on or about 10 February 2003 Mr Blanda retained Kemp Strang to give advice about the settlement of the Supreme Court proceedings. 10 Kemp Strang forwarded to Mr Blanda a letter dated 6 May 2003 headed "Estate of your late brother", in which Kemp Strang noted that it had been instructed to act for Mr Blanda and in which it set out the terms of the engagement of Kemp Strang by Mr Blanda. In par 2 of the letter Kemp Strang set out the hourly rates which would be charged for work done by partners of Kemp Strang, by associates of the firm and by any other solicitors. It was noted that Kemp Strang could increase the hourly rates by giving fourteen days notice to Mr Blanda. 11 In par 3 of the letter of 6 May 2003 Kemp Strang estimated its costs for completing the work as about $5,000. In par 4 of the letter Kemp Strang estimated its expenses for completing the work as about $500. It was stated in the letter that Kemp Strang would advise Mr Blanda of any significant increase in Kemp Strang's charges and expenses beyond those estimated. Par 9 of the letter provided that Kemp Strang would send Mr Blanda a bill for its costs and expenses at the end of each month, while the work to be performed by Kemp Strang was in progress. 12 Paragraph 14 of the letter provided that Mr Blanda could at any time by notice in writing terminate his instructions to Kemp Strang to act for him. This paragraph also provided that, subject to any rules of Court, Kemp Strang could terminate its agreement to act for Mr Blanda by notice in writing, if, inter alia, Kemp Strang's charges and expenses were not paid when due. 13 The letter of 6 May 2003 concluded by asking Mr Blanda to confirm the engagement of Kemp Strang to act for him on the terms set out in the letter by signing an enclosed copy of the letter and returning the signed copy. There was not in the evidence before me at the hearing any copy of the letter signed by Mr Blanda. However, it can be inferred from Mr Blanda's conduct that he confirmed the engagement on the terms set out in the letter. 14 On 11 August 2003 Mr Carbone commenced proceedings in the District Court against Mr Blanda ("the District Court proceedings"), claiming the sum of $70,657.54 as unpaid costs of the Supreme Court proceedings. 15 Mr Blanda instructed Kemp Strang to act for him in the District Court proceedings and an associate partner of Kemp Strang Mr Ross Ward acted for Mr Blanda, under the supervision of Ms Roppolo. No new file was opened and the file already opened in connection with the Supreme Court proceedings was used. There was not in evidence before me any separate letter setting out the terms of the engagement of Kemp Strang to act for Mr Blanda in the District Court proceedings. Ms Roppolo believed that some such letter was sent to Mr Blanda but, for a reason which will emerge later in this judgment, was unable to confirm that such a letter had been sent. 16 A notice of grounds of defence raising various defences was filed in the District Court proceedings on behalf of Mr Blanda. A notice of cross-claim was also filed in which it was alleged inter alia that Mr Carbone had not carried out any work which he had done in a professional manner and had settled the Supreme Court proceedings otherwise than in accordance with the instructions of Mr Blanda. 17 Between 2003 and some time in 2005 Kemp Strang continued to act for Mr Blanda both in relation to the Supreme Court proceedings and in the District Court proceedings. 18 In October 2004 Mr Blanda instructed Kemp Strang to act for him in claiming specific performance of orders made in the Supreme Court proceedings. A new file was opened by Kemp Strang for these proceedings. However, as in the case of the District Court proceedings, there was no evidence before me of any separate letter setting out the terms of the engagement of Kemp Strang, although Ms Roppolo believed that such a letter might have been sent to Mr Blanda. Some work was done by Kemp Strang in the specific performance matter but then Mr Blanda abandoned the claim. Little attention was paid to the specific performance matter in the submissions which were made at the hearing before me. 19 Between 25 August 2003 and 28 July 2005 Kemp Strang sent Mr Blanda bills for its costs and expenses for acting in the various matters. A number of payments were made by Mr Blanda to Kemp Strang. Mr Blanda did not appropriate any of these payments to particular bills and Kemp Strang, in the absence of any appropriation by Mr Blanda, appropriated each payment to the oldest outstanding bill. The amounts paid by Mr Blanda did not fully discharge the amounts of the bills. 20 In about April and May 2005 there were meetings and telephone conversations between Mr Blanda and Ms Roppolo about the amount of the costs which had been charged and about the amount of those costs which had not been paid. An agreement which was reached between Mr Blanda and Ms Roppolo was set out in a letter from Kemp Strang to Mr Blanda of 3 May 2005, which was in the following terms:- "We refer to our meetings and telephone conversations with you and confirm that we have agreed to enter into the following arrangement with you with respect to the amount payable by you to us for our outstanding costs and disbursements: 1. As at today's date the amount payable by you to us is $67,815.23; 2. We will reduce the amount by $10,000 to $57,815.23 provided you comply with the payment arrangement in point 3. below; 3. You will pay the balance of $57,815.23 by instalments of $5,000.00 per week until that amount is repaid; and 4. You will pay all further accounts rendered by us in accordance with our payment terms being 14 days from the date of invoice; We look forward to receiving the first instalment of $5,000.00 by the end of this week". 21 Mr Blanda failed to make any payment in accordance with the agreement and on 6 June 2005 Kemp Strang sent a letter to Mr Blanda, which was in the following terms:- "We confirm in early May 2005 you advised that you would pay the outstanding amount due to us for our fees and disbursements by payments of $5,000.00 per week. You have failed to make any payment to us nor provide an explanation as to why you have not complied with this agreement. As you have failed to pay our accounts when due or comply with the agreement reached regarding payment over time we have no alternative but to advise you that we can no longer act for you and that we will shortly serve on you our Notice of Intention to Cease to Act in the District Court proceedings". 22 Notwithstanding the letter of 6 June 2005, Kemp Strang continued to do work for Mr Blanda. In the time ledger kept by Kemp Strang recording work done for Mr Blanda the following entries appear between 6 June 2005 and 19 July 2005. In these entries "RAW" refers to Mr Ward and "SR" refers to Ms Roppolo. AKK refers to a solicitor Andrea King. Date Sol Code Description