New South Wales Supreme Court CITATION : Lin v Bliim [2006] NSWSC 477 HEARING DATE(S) : 18 May 2006 JUDGMENT DATE : 26 May 2006 JURISDICTION : Common Law Division JUDGMENT OF : Associate Justice Harrison DECISION : (1) The appeal is dismissed; (2) The decision of her Honour Magistrate Sweeney dated 21 July 2005 is affirmed; (3) The amended summons filed 6 February 2006 is dismissed; (4) The plaintiff is to pay the defendant's costs as agreed or assessed. CATCHWORDS : Appeal decision of Local Court Magistrate - legal fees LEGISLATION CITED : Local Court Act 1982 - s 73 Allen v Kerr & Anor (1995) Aust Torts Reports 81-354 Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 Carr v Neill [1999] NSWSC 1263 CASES CITED : Devries v Australian National Railways Commission (1993) 177 CLR 472 Nguyen v Phan Tran Proprietary Limited R L & D Investments Pty Ltd v Bisby (2002) 37 MVR 479 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in Liq) (1999) 160 ALR 588 PARTIES : Lawrence Liwei Lin t/as LLL Lawyers v Steven Phillip Bliim FILE NUMBER(S) : SC 14889/2005 Ms P Ryan (plaintiff) COUNSEL : Mr G Sirtes (Defendant) Accentro Legal (Plaintiff) SOLICITORS : Macquarie Legal Practice (Defendant) LOWER COURT JURISDICTION : Local Court LOWER COURT FILE NUMBER(S) : 4098/04 LOWER COURT JUDICIAL OFFICER : Sweeney LCM LOWER COURT DATE OF DECISION : 21 July 2005 IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ASSOCIATE JUSTICE HARRISON FRIDAY, 26 MAY 2006 14889/2005 - LAWRENCE LIWEI LIN t/as LLL LAWYERS v STEVEN PHILLIP BLIIM JUDGMENT (Appeal decision of Local Court Magistrate - legal fees) 1 HER HONOUR: A barrister sued a solicitor for unpaid fees in the Local Court. When the matter came on for hearing, the amount in dispute was $3,300 plus interest. It probably should have been in the Small Claims Division. 2 By amended summons filed 6 February 2006 the plaintiff seeks firstly, an order that the judgment of her Honour Sweeney LCM, dated on 21 July 2005, in proceeding 4098/04 in the Sydney Downing Centre Local Court be set aside; and secondly, an order that the matter be remitted to the Downing Central Local Court for rehearing. The plaintiff relied on his affidavit dated 6 February 2006. The defendant relied on the affidavit of Tracey Gail Middleton dated 13 February 2006. 3 The plaintiff in these proceedings is Lawrence Liwei Lin t/as LLL Lawyers who was the defendant in the Local Court. He is a solicitor. The defendant in these proceedings is Steven Phillip Bliim who was the plaintiff in the Local Court. He is a barrister. For convenience I shall refer to the parties by name in this judgment. The Magistrate entered judgment in favour of Mr Bliim in the sum of $3,300 together with interest and costs. 4 At the outset, it may be helpful to make some brief comments concerning the remedy pursued by Mr Lin. Section 73 of the Local Courts Act 1982 (the Act) permits a party who is dissatisfied with a judgment as being erroneous in point of law to appeal to this Court. The onus lies on the plaintiff to demonstrate that there has been an error of law. What is a question of law (as opposed to a question of fact) was considered, inter alia, in Allen v Kerr & Anor (1995) Aust Torts Reports 81-354; Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156; Carr v Neill [1999] NSWSC 1263 and R L & D Investments Pty Ltd v Bisby (2002) 37 MVR 479. It cannot be said that the judicial officer acted on evidence inconsistent with facts incontrovertibly established by the evidence - see Devries v Australian National Railways Commission (1993) 177 CLR 472 per Brennan, Gaudron and McHugh JJ at 479 and State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in Liq) (1999) 160 ALR 588. 5 Section 75 of the Act provides that the Court may determine an appeal by either (a) by varying the terms of the judgment or order or (b) setting the judgment or order aside or (c) by setting the judgment or order aside and remitting the matter for determination in accordance with the Court's directions or (d) by dismissing the appeal. Grounds of appeal 6 The plaintiff appeals from the whole of the decision of Magistrate Sweeney on the grounds firstly, that the Magistrate erred at law when she found that the tax invoice issued by Mr Bliim to Mr Lin was a forbearance on the part of Mr Bliim; secondly, the Magistrate erred at law when she found that Mr Bliim could revoke or revise the agreed amount in his tax invoice to Mr Lin and replace it with a greater amount; thirdly, in the alternative, the Magistrate erred at law when she found that Mr Bliim's agreed basis of charging should prevail over his agreed tax invoice when determining the amount that Mr Lin owed to Mr Bliim; fourthly, the Magistrate erred at law when she found that Mr Lin failed to plead to the issue of forbearance in his defence; and fifthly, the Magistrate erred at law when she failed to take into account Mr Bliim's failure to mitigate his loss, both in relation to the substantive matter and the calculation of interest. Local Court proceedings 7 As previously stated, in the proceedings in the Local Court Mr Bliim, a barrister, sued Mr Lin, a solicitor, for the payment of outstanding fees. The amount at the date of hearing outstanding was $3,300. The original claim was for $8,800, $5,500 having been paid. 8 On about 1 August 2003 Mr Lin briefed Mr Bliim to appear in a hearing in the District Court in the matter of Nguyen v Phan Tran Proprietary Limited. On 7 August 2003 Mr Lin received a fee disclosure document from Mr Bliim in relation to the District Court matter. Mr Bliim appeared in the District Court on 11, 12 and 13 August 2003. On 18 August 2003 Mr Bliim rendered a tax invoice No 193 to Mr Lin in the amount of $5,500. No money was paid in response to that invoice. On 25 February 2004 Mr Bliim sent a reminder invoice to Mr Lin. No money was paid in response to that invoice. On 17 March 2004 Mr Bliim rendered invoice No 193A to Mr Lin in the amount of $8,800. These facts were not in dispute before the Magistrate. What occurred on 12 August 2003 in respect of Mr Bliim's fees was in dispute before the Magistrate. Magistrate's decision 9 The Magistrate faced with two competing versions of what were the issues in the case summarised each version as being: "…The plaintiff [Mr Bliim] says he has sued in contract to which no appropriate defences have been raised by the defendant. It is said on his behalf there was a simple agreement between him as a barrister and the defendant as a solicitor for payment of his fees and that he was entitled to payment in accordance with the terms of that agreement. It is said that he offered an act of forbearance to accept payment of a lesser amount which was ignored. No payment was received within the time specified in the agreement. The plaintiff says no relevant defence has been raised in response to the act of forbearance and therefore, he sues on the basis of the original agreement. … The submissions on behalf of the defendant [Mr Lin] in the hearing were in summary, that the parties, conceded to be Mr Lin and Mr Bliim, entered into an agreement on 12 August 2003 that the amount of fees to be paid to Mr Bliim would be $5,500, not the estimate in the fee disclosure document, that Mr Bliim did not specify that acceptance of that amount was conditional, for example, as to payment by Mr Lin within a specified time, that Mr Bliim was not entitled to unilaterally increase his fees to $8,800, there being no acceptance by Mr Lin of that proposal and further, that the plaintiff's requirement of payment in the sum of $8,800 must fail for want of prior disclosure as required by the statutory regime." 10 There were also differing versions as to what occurred on 12 August 2003. The Magistrate summarised Mr Bliim's evidence as: "He said that on 12 August 2003 being day 2 of the hearing in the District Court, which hearing went to a third day on which settlement was reached between the parties to those proceedings in the afternoon. The defendant [Lim] asked him if, in order to facilitate settlement of the District Court proceedings, he would accept $5,500 for his fees instead of $8,800 and he said that in order to facilitate settlement, he would. Mr Bliim was not cross-examined about that conversation." 11 At paragraph 24 of Mr Lin's affidavit he deposed: "In view of the Plaintiff's date of admission as Counsel and experience, I stated the relevant Counsel fees each hearing date should be $1,250 plus GST (ie $250.00 per hour plus GST for 5 hours)" 12 The Magistrate continued: "Despite that and despite Mr Lin in para (24) of his affidavit which was exhibit 2 in these proceedings saying something similar, Mr Lin gave evidence during cross-examination in this hearing which appeared quite different which was that his clients expressed dissatisfaction with the estimated fees and offered $5,500 instead which Mr Bliim accepted. Mr Lin said he assumed the clients would pay Mr Bliim. Mr Lin seemed somewhat hazy about his liability to Mr Bliim for payment of his fees. It seemed Mr Lin's evidence was to the effect that there was a new agreement reached on 12 August 2003 between his clients and Mr Bliim in which he relayed information from one to the other although in submissions, counsel for Mr Lin submitted that that agreement was between Mr Lin as the solicitor and Mr Bliim as the barrister. That evidence by Mr Lin having been raised for the first time during his cross-examination and not having been put to Mr Bliim in cross-examination, I accept Mr Bliim's evidence as to the events on 12 August 2003 and how they occurred." 13 As I understand it, during cross examination Mr Lim was saying that the agreement for payment of $5,500 was between Mr Bliim and the client. If that was so the contractual agreement between Mr Lim and Mr Bliim would still be in existence. 14 The Magistrate preferred Mr Bliim's version and was entitled to do so. 15 Much has been made of the term "forbearance". In the Local Court Mr Lim's counsel, Ms Ryan, understood forbearance as "suggesting that the delay has led to a circumstance where it is so inordinate and any forbearance by the plaintiff in relation to the delay or in relation the amount that was going to be charged has ceased and now that the estimate would kick in as an amount that was owing to the plaintiff Mr [Bliim]." 16 The Oxford English Dictionary, 2nd ed 1989, defines "forbearance" as "The action or habit of forbearing, dispensing with, refraining or abstaining from (some action or thing."" The Macquarie Dictionary, 4th ed, defines "forbearance" as "noun (1) the act of forbearing; a refraining from something; (2) forbearing conduct or quality; patient endurance; lenity. (3) an abstaining from the enforcement of a right. (4) Obsolete a creditor's giving of indulgence after the day originally fixed for payment." 17 Neither party specifically pleaded that what occurred on 12 August 2003 was by way of forbearance. An act of forbearance appears to be an indulgence and therefore it is debatable whether forbearance needed to be pleaded. The Magistrate rightly stated that the solicitor did not plead the forbearance in his defence. However nothing turned on whether or not forbearance was pleaded. Both parties argued the issue and it was dealt with regardless of whether or not it should have been raised in the pleadings. The evidence was that Mr Lim delayed in paying Mr Bliim that being so the act of forbearance came to an end. 18 The Magistrate in her reasons concluded: "I am of the view that it is not so on the basis of the evidence or as a matter of law. In my view the way the case is characterised by the plaintiff is supported by the evidence he has adduced. I am satisfied and it was conceded on behalf of the defendant in submissions that there was an agreement between the plaintiff and the defendant as to the basis on which the plaintiff Mr Bliim would charge Mr Lin for the work done in relation to the brief, that is as set out in section 2 of the fee disclosure document in annexure 3. The invoice of 17 March 2004 annexure 9 to Mr Bliim's affidavit requests payment of an amount calculated by reference to that agreement and refers to the work done in the three day hearing and conference and preparation. Between those two events on 12 August 2003 I am satisfied that Mr Bliim in an act of forbearance agreed to accept a reduced amount of $5,500. Nothing was done by Mr Lin in respect of that offer of forbearance. Indeed Mr Lin seemed uncertain whether he or his clients were responsible for paying Mr Bliim's fees. In the event at that time no-one did. The defendant has not pleaded nor offered any evidence of any defence to Mr Bliim's forbearance. The defendant has not responded to the plaintiff's evidence of the contract between them with any defence to the contract. The defendant's characterisation of the situation between the parties as an agreement of 12 August 2003 which the plaintiff sought to vary unilaterally in March 2004 to claim a higher amount than was agreed is not in accordance with the evidence. The plaintiff has discharged his onus and is entitled to be paid the amount owed." 19 In effect the Magistrate decided that there was a binding agreement between the parties and that the sum of $3,300 (less $5,500 paid) was due and owing under that agreement. The Magistrate was entitled to come to this conclusion. There is no error of law. Mitigation of loss 20 Mr Lim also submitted that the Magistrate did not consider whether Mr Bliim mitigated his loss. It was submitted that Mr Bliim could have accepted the cheque of $5,500 at an earlier date. The effect of so doing would have meant that interest may be calculated in a lesser sum. The date from which interest is awarded is discretionary. The Magistrate in the exercise of her discretion ordered interest to run from 22 July 2005. Her Honour was entitled to do so. There is no error of law. 21 If I am wrong, the decision made is not one that this Court would in the exercise of discretion remit to the Local Court. This is because the amount in dispute was a modest $3,300. The costs incurred to date are not proportional to the amount in dispute and to incur further costs is wrong. Further, the claim should have been dealt within the Small Claims Division of the Local Court. If that course had been adopted there would have been no right of appeal to this Court on a question of law. 22 The appeal is dismissed. The decision of her Honour Magistrate Sweeney dated 21 July 2005 is affirmed. The amended summons filed 6 February 2006 is dismissed. 23 Costs are discretionary. Costs usually follow the event. The plaintiff is to pay the defendant's costs as agreed or assessed. The Court orders: (1) The appeal is dismissed. (2) The decision of her Honour Magistrate Sweeney dated 21 July 2005 is affirmed. (3) The amended summons filed 6 February 2006 is dismissed. (4) The plaintiff is to pay the defendant's costs as agreed or assessed. ********** 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.