New South Wales Court of Appeal CITATION: Dennis v Cameron [2007] NSWCA 228 HEARING DATE(S): 15 August 2007 JUDGMENT DATE: 5 September 2007 JUDGMENT OF: McColl JA at 1; Handley AJA at 2; Hoeben J at 3 DECISION: Appeal dismissed; Appellant pay the costs of the appeal. CATCHWORDS: Claim by a barrister against solicitor for unpaid fees - original memoranda of fees altered at solicitor's request - whether compliance with sections 192, 194 of the Legal Profession Act 1987 and regulation 22A of the Legal Profession Regulations 1994 - whether barrister's memoranda of fees was "signed" - effect of acceptance by solicitor of unsigned memoranda of fees. Legal Profession Act 1987 LEGISLATION CITED: Legal Profession Regulations 1994 Solicitors Act 1843 (UK) Conder v Silkbard [1999] NSWCA 459 Goodman v J Evan Limited (1954) 1 QB 550 Hogarth v Gye [2002] NSWSC 32 at [25] CASES CITED: Koutsourais v Metledge & Associates [2004] NSWCA 313 Moreton v Copeland (1855) 16 CB 517 Re Gedye (1851) 51 ER 208 Zizza v Seymour (1976) 2 NSWLR 135 PARTIES: Bruce Vernon Dennis - Appellant Robert William Cameron - Respondent FILE NUMBER(S): CA 40681/2006; DC5480/2005 COUNSEL: Mr J T Johnson - Appellant Mr DF Rofe QC/Mr AJ Tudehope - Respondent SOLICITORS: Dennis & Company - Appellant McLaughlin & Riordan - Respondent LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): 5480/2005 LOWER COURT JUDICIAL OFFICER: Johnstone DCJ LOWER COURT DATE OF DECISION: 26 September 2006 LOWER COURT MEDIUM NEUTRAL CITATION: [2006] NSWDC 32 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40681/2006 DC 5480/2005 McCOLL JA HANDLEY AJA HOEBEN J Wednesday, 5 September 2007 Bruce Vernon DENNIS v Robert William CAMERON JUDGMENT 1 McCOLL JA: I agree with Hoeben J. 2 HANDLEY AJA: I agree with Hoeben J. 3 HOEBEN J: Nature of claim The respondent (hereafter called "the barrister") had for some years before 1997 been regularly briefed by the appellant (hereafter called "the solicitor"). 4 In August 1997 the barrister was briefed by the solicitor to advise and appear on behalf of three individuals and a company in the Federal Court of Australia. It was a bankruptcy matter. The barrister duly performed the services for which he was retained including appearing before a Full Bench of the Federal Court, the clients having been unsuccessful at first instance. 5 The legal services were performed by the barrister between 1997 and 2000. The barrister sent to the solicitor four memoranda of fees dated 1 April 1999, 19 May 2000, 28 September 2000 and 24 November 2000. Each memorandum of fees was on the barrister's letterhead and was accompanied by a covering letter which had been signed by the barrister. Each memorandum of fees included an amount comprising a twenty five percent contingency fee. None of the memoranda made any provision for the payment of interest. 6 Not long after the last memorandum of fees had been sent, the solicitor requested that the barrister forward to him replacement memoranda of fees with the contingency fee deleted. The evidence is unclear as to the precise date when this request was made. 7 The barrister complied with the request and had the memoranda of fees retyped to exclude the contingency fee. Otherwise the memoranda of fees were identical to those previously sent. They bore the same dates as the previous memoranda and were on the barrister's letterhead. The amended memoranda totalled $79,158.95. 8 The barrister was unable to remember how the amended memoranda were sent to the solicitor but believed that they were sent by way of facsimile transmission. 9 The evidence as to how the amended memoranda were sent to the solicitor was: "A. I think, my recollection is that the bills were sent back to me by facsimile after Ms Anson had spoken to me on the telephone that I'd amended the things and then sent them back by facsimile. I don't know whether there was any accompanying letter with it, I'd have to go through all the records at the time to find out but I'm pretty certain it was all done by facsimile transmission. Q. What was your practice when sending facsimile messages, so far as signatures or otherwise are concerned. A. Well there's a covering thing that goes with them and I may or may not have put a note on to the effect that amended bills herewith as requested, something like that. I wouldn't have sent it back out of the blue, like, just by itself. You couldn't anyway because you've got to put the particulars of the sender and so on, or the addressee on the covering part of the facsimile." 10 The barrister was unable to produce a copy of any cover sheet to the facsimile, nor was any such document produced by the solicitor. Copies of the original memoranda of fees, their covering letters and of the amended memoranda of fees were before the Court. 11 In February 2001 the solicitor contacted the barrister and asked him to accept a deferral of payment of his fees in order to allow time for the clients to subdivide and sell land which they owned at Menangle. When the land was sold his fees would be paid. The solicitor told the barrister that he had a mortgage over the land and that the clients were willing to pay interest on the barrister's fees. The barrister agreed to this proposal. 12 In December 2003 the barrister learned that the land had been subdivided and sold in about September 2003. This had occurred without the knowledge of the solicitor. The solicitor did not have a mortgage which secured the fees. 13 The barrister unsuccessfully sought payment of the fees from the solicitor. The barrister then commenced proceedings in the District Court. The proceedings in the District Court 14 The hearing of the matter took place before Johnstone DCJ on 20 September 2006. Documents were tendered on behalf of the barrister and he gave evidence. No evidence was called on behalf of the solicitor. His Honour gave judgment in favour of the barrister on 26 September 2006. 15 There were a number of factual issues argued before his Honour such as the terms of the barrister's initial retainer and the existence of any agreement between the barrister and the solicitor as to the deferral of payment of the barrister's fees. Those matters were decided in the barrister's favour as set out above and were not challenged on appeal. The reasonableness of the barrister's fees was never in issue. 16 The solicitor's case was that the barrister's claim was barred by s 192(1) of the Legal Profession Act 1987 (the Act). Section 192(1) relevantly provided: "192(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. …" 17 The solicitor submitted that the amended memoranda of fees did not comply with s 194(1) of the Act and with clause 22A of the Legal Profession Regulations 1994. That being so, a "bill of costs" had not been given to the solicitor as required by s 192(1) of the Act and consequently the barrister could not bring proceedings for the recovery of his fees. 18 Section 194(1) relevantly provided: "194(1) A bill of costs must be signed by the barrister or by the solicitor, or by his or her partner or employee. It is sufficient compliance with this section if a letter that is so signed is attached, or enclosed with, the bill of costs. …" 19 Regulation 22A relevantly provided: "22A(1) For the purposes of s 193(1) of the Act, the following particulars are to be included in a bill of costs: (a) A description of the legal service provided. (b) The total amount of the costs charged. (c) Any intended claim for interest under s 190 of the Act if the costs are not paid (including the rate of interest). (d) The work done in providing the legal service. (e) The period over which that work was done. (f) The identity of the person who did that work (including the position of the persons, eg partner, associate). (g) The basis on which the costs have been calculated and charged (whether on a lump sum basis, an hourly rate basis, an item of work basis, a part of proceedings basis or other basis). (h) The facts relied on to justify the costs charged by reference to the above, the practitioner's skill, labour and responsibility, the complexity, novelty or difficulty of the matter, the quality of the work done or any other relevant matter." 20 In response the barrister argued that the agreement of February 2001 constituted an accord and satisfaction in the sense that the barrister accepted the solicitor's promise in satisfaction of existing obligations. The barrister submitted that the proceedings were not for the recovery of costs but were based on the agreement of February 2001 which was sufficiently different as to constitute a new arrangement for payment. 21 In the alternative, the barrister submitted that his memoranda of fees complied with the requirements of the Act. 22 Applying the decision of this Court in Koutsourais v Metledge & Associates [2004] NSWCA 313, his Honour concluded that the agreement of February 2001 was sufficiently different to the memoranda of fees that proceedings based upon it could not be properly characterised as proceedings for the recovery of costs. In his Honour's opinion the proceedings were correctly characterised as proceedings for breach of the agreement. Accordingly the barrister was not obliged to comply with the provisions of the Act. 23 In case he was incorrect in that finding, his Honour also considered the question of whether the memoranda of fees complied with the provisions of the Act. 24 His Honour accepted that the amended invoices had not been signed. Because these were amended memoranda sent by way of replacement at the request of the solicitor and the original memoranda had been accompanied by letters signed by the barrister, his Honour found that this was sufficient compliance with s 194(1). 25 In relation to compliance with clause 22A of the Regulations, his Honour noted that the only challenge to the memoranda of fees related to sub-clauses (g) and (h) of the Regulation. On his Honour's reading of the memoranda of fees they complied with those sub-clauses. 26 His Honour observed that even if he had reached a different conclusion in relation to those sub-clauses, the particularisation of such information was not required when the person receiving the memoranda of fees was a person who was aware of the matters to be particularised. In that regard his Honour relied on the long-standing professional relationship which had existed between the barrister and the solicitor before the presentation of these memoranda of fees and the decision of Bryson J in Hogarth v Gye [2002] NSWSC 32 at [25]. 27 Accordingly, his Honour entered judgment in favour of the barrister in the sum of $79,158.95 together with interest. Appeal 28 The addition of interest brought the amount, the subject of the appeal, to just over the $100,000 limit which gave to the solicitor an appeal as of right. The barrister did not submit that leave was required. 29 Before this Court the following grounds of appeal were relied on. (1) His Honour was in error in determining that the plaintiff's claim was not a claim in relation to the provision of legal services and the recovery of legal costs within the meaning of the Legal Profession Act 1987. (2) His Honour was in error in determining that there was compliance by the plaintiff with s 194(1) of the Legal Profession Act 1987. (3) His Honour was in error in finding that the plaintiff had complied with clause 22A of the Legal Profession Act 1994. Ground of Appeal 2 30 The solicitor developed his submissions as follows: 31 The barrister's claim was based on the amended memoranda of fees. These amended memoranda had not been signed by the barrister nor were they accompanied by a letter so signed. Those facts constituted a failure to comply with s 194(1) which meant that s 192(1) operated as a bar to the proceedings. In that regard it was common ground that the terms of s 192(1) are mandatory. (Zizza v Seymour (1976) 2 NSWLR 135 and Conder v Silkbard [1999] NSWCA 459.) 32 The solicitor's submission fails to have regard to the reality of the transaction. The amended memoranda of fees should not be looked at in isolation but as part of the total billing process which took place. Accordingly one needs to have regard not only to the amended memoranda of fees but also those originally sent. 33 There was no issue that the original memoranda of fees were accompanied by letters signed by the barrister. These memoranda were at the request of the solicitor amended to delete reference to contingency fees, but were otherwise identical to those originally sent. The amended memoranda were for lesser amounts. They were sent to the solicitor by facsimile transmission accompanied by a facsimile coversheet, the content of which is unknown. No challenge or complaint was made by the solicitor concerning the memoranda of fees. 34 In those circumstances his Honour was correct in looking at the whole of the circumstances surrounding the delivery of the memoranda of fees by the barrister to the solicitor and in concluding that, taken as a whole, the memoranda of fees complied with the provisions of s 194(1). 35 Such an approach is in accordance with the public purpose of the section. The section is designed to protect the recipient of the bill of costs by having the party claiming costs acknowledge clearly that he or she accepts responsibility for its contents. 36 In written submissions received from the barrister after the hearing of the appeal a different submission to the same effect was made. 37 It was submitted that s 192(1) and s 194(1) were based on s xxxviii of the Solicitors Act 1843 (UK). The United Kingdom statute relevantly provided: "… that from and after the passing of this Act no attorney or solicitor … shall commence or maintain any action or suit for the recovery of any fees … until the expiration of one month after such attorney or solicitor … shall have delivered unto the party to be charged therewith … a bill of such fees charges and disbursements and which bill shall either be subscribed with the proper hand of such attorney or solicitor (or in the case of a partnership, by any of the partners, either with his own name or with the name or style of such partnership) … or be enclosed in or accompanied by a letter subscribed in like manner referring to such bill. …" 38 The meaning and application of that section was considered by Sir John Romilly (Master of the Rolls) in the matter of In re Gedye (1851) S.C. 20 L.J. Ch. 410; 15 Jur 851; 51 ER 208. His Honour there said: "… the client who receives an unsigned bill may, if he pleases, treat it as a nullity; the attorney can bring no action upon it and he may wholly disregard its existence. But, on the other hand, he may if he pleases, treat it as a bill delivered under the statute; he may, in fact waive the signature of the attorney to the bill and treat it as if the proper formalities had been complied with; it is his privilege to do so, and the solicitor by delivering the unsigned bill, enables his client to exercise his option on this subject. But I apprehend that it is not in the power of the client to treat it as both, ie to treat it first as a duly signed bill and if that fails his purpose, then to treat it as a nullity." 39 Applying that approach to s 194(1) the barrister submitted that the solicitor had accepted the amended memoranda of fees as a proper bill of costs complying with the Act (ie by seeking the barrister's agreement to the deferral of its payment) and accordingly was now estopped from denying their validity. 40 It seems to me that the statement of principle by Sir John Romilly MR remains as valid today as when it was made. It satisfies the purpose of s 194(1) and provides a common sense and fair application of the section. 41 Whichever approach is followed, this ground of appeal has not been made out. 42 For completeness I should deal with a submission of the barrister which was described as "a fall back position". The barrister submitted that it was sufficient compliance with s 194(1) if a memorandum of fees was sent on the barrister's letterhead. I agree that a formal signature as such is not required and that something less may, depending upon the circumstances, suffice for compliance with the section (Moreton v Copeland (1855) 16 CB 517 and Goodman v J Evan Limited (1954) 1 QB 550). That having been said, I do not accept that the use of letterhead for a memorandum of fees without more meets the requirement of s 194(1). The wording of the section requires that something be added to the bill of costs which identifies it as having been adopted by the party sending it. Ground of Appeal 3 43 The submissions by the solicitor in support of this ground of appeal were but faintly pressed. Counsel for the solicitor conceded that on the face of the memoranda of fees sub-clauses (a) – (g) of regulation 22A had been complied with. Specifically in relation to sub-clause (g) the memoranda made it clear that the barrister's work was being charged on an hourly basis. 44 In relation to sub-clause (h) of regulation 22A, his Honour said at [36]: "What sub-clause (h) requires is that the facts justify the costs charged "by reference to the above" or the other matters set out. The "above" is the matters in (a) – (g), all of which were included in the bills. That is sufficient compliance with sub-clause (h) if those facts justify the costs charged, which in my view they did. The other matters in sub-clause (h) need only be particularised if the costs need to be justified on some other basis, such as the practitioner's skill, labour and responsibility, the complexity novelty or difficulty of the matter, the quality of the work done or of any other relevant matter. Such additional justification was not required here." 45 In my opinion his Honour's interpretation of sub-clause (h) is correct as is his Honour's conclusion that the memoranda satisfied the requirements of the sub-clause. 46 Even if that were not the case, the relationship between the barrister and the solicitor was such that there was no obligation of disclosure as between them. In Hogarth v Gye at [25] Bryson J said: "… In any event it is quite clear that, in another context, Mr Gye did disclose the relevant matters to Mr Hogarth in August 1997 in unrelated business of Ensile Pty Limited, Mr Hogarth being the channel for instructions and the controlling mind of the companies to which the bills of cost were rendered. An obligation to make a disclosure does not require the communication of any information to a person who is aware of the matter supposedly to be disclosed. Mr Hogarth was made aware of these rights in August 1997 before any costs in the Walker litigation were incurred." 47 This ground of appeal has not been made out. Conclusion 48 It follows from the above that I am satisfied that the memoranda of fees submitted by the barrister to the solicitor satisfied the requirements of regulation 22A and sections 192(1) and 194(1) of the Act. It is therefore not necessary to consider the first ground of appeal which challenges his Honour's finding that, properly characterised, the barrister's claim did not constitute "proceedings for the recovery of costs". 49 Apart from it being unnecessary to consider the first ground of appeal, this matter is not a satisfactory vehicle for the analysis of the question raised by it. The evidence as to the precise terms of the February 2001 agreement was unsatisfactory and his Honour made no specific findings on that issue. 50 The orders which I propose are that the appeal be dismissed and that the appellant pay the costs of the appeal. ********** 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.