Swaab v Sayed [2013] NSWSC 887

Supreme Court New South Wales

Medium Neutral Citation: Swaab v Sayed [2013] NSWSC 887 Hearing dates: 1 July 2013 Decision date: 01 July 2013 Jurisdiction: Equity Division Before: Kunc J Decision: Declaration granted Catchwords: LEGAL PRACTITIONERS - costs - whether costs agreement accepted by conduct - declaration agreement created equitable charge Legislation Cited: Legal Profession Act 2004 (NSW) Cases Cited: Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 Category: Principal judgment Parties: Plaintiffs: Fredrick Swaab and 6 others Representation: Counsel: Mr L. Livingston Solicitors: Swaab Attorneys for the plaintiffs File Number(s): 2013/64071 Publication restriction: No

EX TEMPORE Judgment

Summary 1The plaintiffs ("Swaab") are a firm of solicitors. The defendant ("Mr Sayed") was once their client. Swaab seek declarations that they have the benefit of an equitable charge over Mr Sayed's property to secure fees and other costs which he owes him. They are entitled to that relief.

Notice to Mr Sayed 2There was no appearance today for Mr Sayed, whose name was called outside Court at the start of this morning's hearing. 3I am satisfied that Mr Sayed had notice of today's hearing by reason of correspondence which Swaab sent to him on 15 May 2013 to a facsimile number and email address, both of which on the evidence belonged to Mr Sayed.

The facts 4The National Australia Bank (NAB) commenced proceedings for possession of the land contained in certificate title folio identifier 3/1017140, known as xxxxxxxx Woonona in the State of New South Wales (the "Land") which was owned by Mr and Mrs Sayed. 5In November 2011, Mr Sayed approached Swaab for legal assistance in relation to NAB's possession proceedings. 6On 7 November 2011, Swaab e-mailed to Mr Sayed a "Client Pack" which included a document entitled "our General Terms of Business" (the "Terms"). 7The relevant parts of the Terms are: The Legal Profession Act (NSW) 2004 (the Act) requires us make [sic] various disclosures including disclosing the terms upon which we provide our services. The following general terms, when read together with our engagement letter (which sets out the scope and estimated cost of the work you require us to perform), will constitute our offer to provide you with legal services and our offer for you to enter into a costs agreement with us. ... 2. Acceptance of engagement When you receive our engagement letter, you may enter into a costs agreement with us orally or in writing or by signing and returning the engagement letter to us. If you do not provide us with your written objection to our offer to provide you with legal services and continue to instruct us, we will assume that the terms of our offer are accepted and we will provide our services on these terms and those in the engagement letter. Upon acceptance you agree to pay for our services on these terms. ... 12. Caveat. If costs are outstanding to the firm by you, you grant us an equitable interest in any real property (to the extent it is owned by you) which entitles the firm to lodge a caveat over that real property to secure the repayment of the sum of those outstanding costs, any interest charged in accordance with these terms (or interest otherwise payable under law) and any costs incurred when seeking to recover those costs and interest, and you also grant us a mortgage or a charge over any real property to the extent it is owned by you to secure the recovery of those costs and interest. 8On 10 November 2011 Swaab sent their engagement letter (the "Letter") to Mr Sayed. The Letter included these provisions: This letter should be read in conjunction with our "General Terms of Business" which were ... provided to you with our email of 7 November 2011. This letter and our General Terms of Business constitute our disclosure pursuant to the Legal Profession Act 2004 and our offer to provide you with legal services and our offer for you to enter into a costs agreement with us. ... 9. Acceptance of our offer to provide legal services and terms Whilst as noted in our General Terms of Business, you accept our offer to provide legal services and enter into a costs agreement with us by continuing to instruct us, we ask you to sign and return a copy of this letter to confirm your acceptance of our offer and terms. ... Acceptance I accept the terms set out in your General Terms of Business (copy of which I have received) and the above terms. Bilal Sayed Date:" 9Swaab never received an executed copy of the Letter from Mr Sayed. 10Between 7 November 2011 and 30 July 2012 Swaab performed legal work for Mr Sayed and rendered invoices. Mr Sayed made some payments to Swaab. On more than one occasion during that period he was reminded, in writing, that Swaab's services were being provided in accordance with the Terms. 11On 29 January 2013 Swaab commenced proceedings against Mr Sayed by statement of claim in the Local Court to recover fees which they alleged were owing. 12On 5 February 2013 Swaab lodged a caveat over the land (the "Caveat"). The nature of the estate or interest claimed in the Land in the Caveat was described as "equitable interest" by virtue of two instruments specified, namely the Terms and the Letter. The facts recited in the Caveat said to give rise to the caveatable interest were "pursuant to the instruments entered into by the caveator and registered proprietor, the registered proprietor granted the caveator an equitable interest in the charge over the Torrens Title in the event of unpaid costs to the caveator. This event occurred". 13On 13 February 2013 Mr Sayed filed a defence in the Local Court proceedings which included these denials: 2. The defendant denies that he entered into a formal agreement as the plaintiff states, further the plaintiff has not provided a signed copy of the agreement when asked to provide better & further particulars. The defendant relies on the plaintiffs engagement letter paragraph (9) and the Legal Profession Act 2004 Part 3.2 section 304 (2A) (c) by where the plaintiff stipulates that a signature is required to confirm the acceptance of the offer and terms. 3. The defendant does not dispute that the plaintiff performed legal work during 7th November 2012 to 30th July 2013, but disputes he is bound to the terms of the agreement. 14Mr Sayed also caused a lapsing notice to be issued in relation to the Caveat. 15By summons filed on 1 March 2013, Swaab commenced the present proceedings seeking orders for the extension of the Caveat and final relief in the nature of declarations concerning the equitable charge to which Swaab said they were entitled in relation to their unpaid fees and other costs. 16On 6 March 2013 (in the absence of Mr Sayed, but in circumstances where the Court was satisfied that steps had been taken to bring the proceedings to his notice) Justice Nicholas made orders, inter alia, extending the Caveat until further order and providing for the proceedings to continue by way of pleadings. 17On 12 March 2013 Swaab filed their statement of claim in these proceedings. 18Mr Sayed has not filed a defence to the statement of claim. 19NAB has obtained an order for possession of the Land. Orders were made in the Court of Appeal on 18 March 2013 for the possession order to be stayed conditional upon a notice of appeal being filed no later than 20 March 2013. There is no evidence before me whether that was done. Accordingly, I do not know whether or not NAB's order for possession continues to be stayed or not. 20Mr Sayed remains indebted to Swaab in respect of unpaid fees, disbursements and interest in the sum of $46,847.05. 21I am informed by Mr L. Livingston of Counsel, who appeared for Swaab, that it is likely that the Local Court proceedings will now not be pressed. Swaab are considering whether they will have their fees assessed and thereby ultimately obtain a certificate of determination which, on filing, will have the effect of a judgment against Mr Sayed (see s 368(5) Legal Profession Act 2004 (NSW) (the "Act")).