Costs agreement for legal fees - ACAT jurisdiction

APPEAL - Civil Dispute – approach to appeals - debt recovery – costs agreement for legal fees - ACAT jurisdiction – tribunal not able to determine fairness or reasonableness of legal fees ––overlap of matters considered by Supreme Court for costs assessment with other causes of action and defences – breach of implied term of retainer – contractual defence - decision available to original tribunal - ACAT procedures – pleadings – degree of formality required – response set out relevant acts, facts and circumstances which supported the finding – no error found

Williams Love & Nicol Lawyers Pty Ltd v Wearne (Appeal) [2016] ACAT 18

In this matter, the respondent was a legal practitioner practicing as an employed solicitor in the Australian Capital Territory. A firm of solicitors notified her that they had been appointed by her employer to investigate allegations of her possible misconduct and sought an interview with her. The respondent engaged the appellant firm to act for her. A fees agreement was signed and the appellant performed the required work and issued an invoice. The fees were partly paid by the respondent. The respondent disputed the unpaid amount but did not make an application seeking an assessment of the costs. The respondent commenced recovery proceedings in the ACT Civil and Administrative Tribunal to recover the balance of fees, as well as interest and recovery costs as provided for in the fees agreement.

In the hearing of the original application, the Tribunal considered five issues:

(a) Whether there was a debt owing.

(b) Whether the tribunal had jurisdiction to consider reasonableness of the fees charged.

(c) Whether the applicant’s employees had acted with competence.

(d) Whether the applicant had exceeded its instructions.

(e) Whether the applicant was able to claim its costs of recovery of any debt.

It was ordered by the Tribunal:

(a) that the respondent pay the applicant a sum of money calculated by the tribunal being the amount of the claim less the amount representing the work found to be unnecessary;

(b) that the respondent pay the filing fees of the claim;

(c) that the respondent pay interest; and

(d) that the respondent pay recovery costs, which were the subject of a separate hearing.

The applicant appealed from the Tribunal’s decision and three grounds were set down for preliminary determination:

1. The Tribunal fell into jurisdictional error since, having found it did not have jurisdiction to conduct

an assessment of costs under the Legal Profession Act 2006 (ACT) (“LPA”), the Tribunal

nonetheless proceeded to make findings and orders consistent with such an assessment.

2. The Tribunal erred in making findings regarding the competence or the care skill, and attention of

the Applicant’s employed solicitors where the Respondent had not advanced a counterclaim or set-

off, and had not alleged incompetence or negligence in her Amended Response dated 13 January

2015.

3. Any competence or due care, skill and attention was irrelevant to the Applicant’s claim for debt

arising under its costs agreement with the Respondent.

The Appeal Tribunal noted the principles relevant to appeals: Law Society of the ACT & Treasury Directorate and NRMA Insurance [2013] ACAT 36.

In relation to whether the Tribunal fell into jurisdictional error, the Appeal Tribunal considered s 286 of the LPA and noted there are duplication of matters which could be raised in a costs assessment and matters which could be relevant to issues of contract or negligence. The Appeal Tribunal agreed with the approach taken by the Presidential Member as described by Refshauge J in Francis Pires v Dibbs Barker Canberra Pty Ltd [2014] ACTSC 283. Accordingly, it was found that the original Tribunal’s conclusion was entirely consistent with the statement of principles of Refshauge J and the ground of appeal must fail.

In relation to the second ground of appeal, the Tribunal’s civil dispute jurisdiction is broad (s 22 of the ACT Civil and Administrative Tribunal Act (2008)) and it is required by section 7 to ensure that the procedures are as simple, quick, inexpensive and informal as is consistent with achieving justice. The Respondent’s Response clearly and directly raised the Respondent’s assertion about charges for the work done between 29 October and 15 November 2013 and the appellant had adequate time to deal with it in the Tribunal. The finding that the work was not competently done was open to the Presidential Member and accordingly, this ground of appeal was not made out.

In relation to the third ground of appeal, s 286 of the LPA makes it clear that a costs agreement is a contract that may be enforced in the same way as any other contract. The Appeal Tribunal noted that "[t]he findings made by the presidential member relating to the appellant’s work were clearly open to her on the evidence.” (at [37]). There was no error of fact or law to justify intervention by the Appeal Tribunal.

It was ordered that the application for appeal be re-listed for directions as to how the balance of the appeal grounds should be dealt with.