Supreme Court New South Wales Medium Neutral Citation: Michael Vassili Barristers and Solicitors Pty Ltd v Mifsud [2017] NSWSC 1412 Hearing dates: 16 October 2017 Date of orders: 16 October 2017 Decision date: 16 October 2017 Jurisdiction: Equity - Duty List Before: Kunc J Decision: Summons dismissed Catchwords: PROCEDURE – Miscellaneous procedural matters – No issue of principle – Without prejudice dismissal of small money claim when caveat not extended Legislation Cited: Civil Procedure Act 2005 (NSW) Real Property Act 1900 (NSW) Category: Principal judgment Parties: Michael Vassili Barristers and Solicitors Pty Ltd (ACN 125 839 394) (Plaintiff) Rosemary Mifsud (Defendant) Representation: Counsel: F Santisi (Plaintiff) A J McQuillen (Defendant) Solicitors: Michael Vassili Barristers and Solicitors Abrams Turner Whelan Family Lawyers (Defendant) File Number(s): 2017/308473 Publication restriction: No EX TEMPORE Judgment 1. The plaintiff is an incorporated firm of solicitors. The defendant was formerly a client of the plaintiff. These proceedings came before me as duty judge on the plaintiff's application to extend a caveat which the plaintiff had lodged purportedly pursuant to a fee agreement dated 18 May 2017 which the plaintiff alleged had been agreed to by the defendant (the "2017 Agreement") and entitled the plaintiff to an equitable interest in the defendant's property. 2. After hearing the parties for most of today, I came to the clear view that the caveat should not be extended. In the course of argument it became apparent that the caveat could not, in any event, stand because the fees sought to be secured by the caveat, at least in part, antedated the 2017 Agreement and fell under an earlier costs agreement alleged to operate between the parties dated 30 June 2015 (the "2015 Agreement"). The application became, in reality, an application for leave to be granted to the plaintiff to file a fresh caveat under s 74O of the Real Property Act 1900 (NSW) relying on the 2015 Agreement. 3. It is worth noting that the amount in issue between the parties only relates to a memorandum of costs and disbursements dated 28 July 2017 in the sum of $26,404.12 (the "2017 Account"). There was no dispute that the defendant had paid the plaintiff's three earlier memoranda of fees. 4. In relation to the 2017 Account, the defendant relied on this irrevocable authority to her new solicitors (the "Authority"): "I, ROSEMARY MIFSUD: 1. Hereby state that I have deposited the sum of $26,200 into the Trust Account of Abrams Turner Whelan Family Lawyers of Level 2, 162 Goulburn Street, East Sydney in the State of New south Wales ("ATW"); and 2. Hereby irrevocably authorise and direct ATW not to use the funds for any purpose other than to pay to Michael Vassili Barristers and Solicitors of 8 Westfield Place, Blacktown in the State of New South Wales ("Vassili") such funds as agreed in writing by me and Vassili or such sum as is assessed as payable by the Court in relation to Invoice No. 3704 dated 28 July 2017 from Vassili (a copy of which is annexed and marked "A"). 1. The amount referred to in the Authority allows for the fact that the plaintiff has retained in its trust account the sum of $204.12 of the plaintiff's money. 2. The parties agree that it is unnecessary for me to give reasons in relation to the ultimate decision to which I have come, namely that the existing caveat should not be extended, nor should leave be granted for a further caveat to be filed. The purpose of these reasons is to record why and on what terms, in the events which have happened, the Court will dismiss the proceedings. 3. There is no doubt that the defendant is entitled to an order dismissing paragraph 4 of the plaintiff's notice of motion filed 12 October 2017 and orders 2 and 3 in the summons. These are the formal prayers for either an extension of the caveat or leave to issue a further caveat. Nor is there any doubt that the defendant is, therefore, entitled to her costs of the proceedings to date. 4. In large part the Court reached the conclusion which it did in reliance upon the Authority as supplemented by an undertaking given to the Court by the defendant through her counsel to commence the formal assessment process of such of the plaintiff's bills as she may be advised (including the 2017 Account) no later than 12 December 2017. In making the orders below, the Court is acting in express reliance on that undertaking. The plaintiff is entitled to know that the assessment process will proceed in accordance with that undertaking so that it has some assurance that it will have access to so much of the amount held by the defendant's new solicitors in a timely fashion as is assessed or agreed between the parties. 5. Having decided not to extend the present caveat or grant leave for a new one to be filed, I raised with the parties what should happen with the rest of the proceedings (being an action in debt on the 2017 Account), given that the amount involved, on one view, means that the proceedings should be referred to the Local Court. Counsel for the defendant said that one difficulty with that course may be that equitable defences would arise in relation to the validity of the relevant costs agreement. There is some force in that. 6. The alternative is to stand over these proceedings to some date well into the future to allow for the costs assessment to take place. In my view that would be an inefficient use of the Court's and parties' resources, especially when the parties agree that the dispute between them should be resolved by the costs assessment process rather than further litigation. 7. It seems to me that, in accordance with s 56 of the Civil Procedure Act, the appropriate outcome is for these proceedings to be dismissed, but on the express basis that the plaintiff is not thereby prevented from bringing an action for recovery of its fees pursuant to any assessment of the 2017 Account. The defendant, through her counsel, has indicated to the Court that she understands the proceedings are being dismissed on that basis and will not seek to set up the dismissal of this action as a defence to any future proceedings which the plaintiff may bring in relation to the 2017 Account or any certificate of assessment of the 2017 Account. 8. For these reasons the orders and notations of the Court are as follows: 1. Summons dismissed. 2. Plaintiff to pay the defendant's costs of the summons. 3. Note that the dismissal of these proceedings is without prejudice to the rights of the plaintiff to bring such action as it may be advised in the future to recover the costs, as agreed or assessed, contained in the plaintiff's memorandum of costs and disbursements addressed to the defendant dated 28 July 2017. ********** 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. Decision last updated: 17 October 2017