Maddock v IALPG Pty Ltd[2020] QCAT 475

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

The factors to be taken into account when deciding whether an agreement is fair and reasonable will depend upon the circumstances of the case. It is neither practical nor desirable to try to set out a standard list of relevant matters. The relevant matters will vary according to the scope of the retainer; the terms of the agreement; the kind of legal work undertaken; the client’s knowledge and circumstances, and, no doubt, other circumstances.

1. [1]
   The applicant for today’s purposes is the respondent in the substantive proceeding. It is an incorporated legal practice, IALPG Pty Ltd (“IALPG”). In the principal application, an erstwhile client, Aston Maddock, has made an application pursuant to s 328 of the Legal Profession Act 2007 (Qld) (“LPA”) for a costs agreement that he entered into with IALPG to be set aside. IALPG has now applied for that principal application to be dismissed.
2. [2]
   In effect, the basis for today’s application is that the application to have the costs agreement set aside has no prospect of success. As was noted in the course of argument – and in fairness to IALPG – the application to set aside the costs agreement, as originally formulated when the proceeding was commenced, was manifestly lacking in appropriate detail. Consequent upon directions made by this Tribunal for the delivery of an amended application, however, Mr Maddock has filed an amended application which makes clear the basis on which he seeks to have the costs agreement set aside. In particular, the amended application articulates a case to the effect that Mr Maddock and his mother, from whom he was taking advice at the time, were induced to enter into the costs agreement on the basis of certain representations made by or on behalf of the law practice, particularly as set out on its website. There are other similar factual bases advanced in the amended application for the pursuit of relief that the costs agreement be set aside.
3. [3]
   For the purposes of today’s application, affidavits have been filed, sworn by Mr Maddock and his mother, in which they depose to facts which on their face support the factual allegations made in the amended application. Despite the filing of the amended application, the law practice has persisted with the application to have the proceeding dismissed or struck out. The only argument advanced on behalf of the law practice was that the costs agreement should stand because it was, in form, compliant with the technical requirements of the LPA. That argument, however, completely ignores the basis upon which the principal application is brought. The principal application, which is for the setting aside of a costs agreement, necessarily assumes that a costs agreement has been entered into. There is no relevant argument with respect to compliance or otherwise with the technical requirements of the legislation in relation to the agreement having been entered into. Relevantly, what is sought to be pursued is an argument that the costs agreement in formation was neither fair nor reasonable.
4. [4]
   There is a well-established body of law concerning the setting aside of solicitors’ costs agreements on the basis that they are not fair or reasonable. The authorities relevant to that issue were recently collected by Martin J in McLaren v Wiltshire Lawyers Pty Ltd.^[1] In that case, amongst other things, his Honour explained the meaning of the words “fair or reasonable” in s 328 by reference to English and Australian authorities. Those authorities include the 19^th century decision of Lord Esher in Re Stuart; Ex parte Cathcart^[2] in which his Lordship referred to the distinction between the fairness of an agreement and whether the terms of the agreement are reasonable. With regard to fairness, his Lordship said that if a solicitor makes an agreement with a client who fully understands and appreciates the agreement, then that satisfies the requirement as to fairness.^[3] His Lordship also noted the additional requirement that the terms of the agreement be reasonable.^[4]
5. [5]
   Martin J also noted the decision of the Full Court of the Supreme Court of South Australia in McNamara Business & Property Law v Kasmeridis in which Doyle CJ said, amongst other things:^[5]
6. [6]
   It is not necessary for me to delve further into the authorities gathered by Martin J in that case. It is sufficient to note that, on its face, the amended application (supported as it is by affidavit material) raises a prima facie case for investigation as to whether the circumstances of the costs agreement being entered into were fair or reasonable. It is simply not to the point that the law practice says that all of the technical requirements were observed when the costs agreement was entered into. The present case concerns the fairness and reasonableness of the agreement itself, and that necessarily provokes an enquiry into the circumstances in which the agreement was made. In those circumstances, it clearly cannot be said that the application under s 328 by Maddock is so bereft of prospects as to warrant an order that it be struck out or dismissed. The application will therefore be dismissed.
7. [7]
   Before concluding these reasons, I should note that the law practice separately submitted that this Tribunal should somehow circumvent the application by simply ordering that there be an assessment of the costs to be paid by Maddock to the law practice. It was not made clear on what proper basis that order could or should be made, and in any event, the assertion that there should be such a shortcut does not in any way grapple with the necessary preliminary question which would arise; namely, the basis on which the assessment would be undertaken. It is not at all clear, for example, whether it was proposed that the terms of the costs agreement would be ignored for the purposes of that assessment, whether there would be assessment on a scale, or whether there would just be some general assessment on the basis of the value of the work rendered; and if such an assessment were to occur, on what basis any such assessed costs would be recoverable. In any event, it is not necessary for me to investigate that question further.
8. [8]
   The order of the Tribunal is that:

1. The Application for Miscellaneous Matters filed by the respondent  on  about  13 October 2020 is dismissed.