Waller Family Lawyers Pty Ltd v McAuley
[2024] QCATA 58
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- Unreported Judgment
- Appeal Determined (QCA)
- Waller Family Lawyers Pty Ltd v McAuley[2024] QCATA 58
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Waller Family Lawyers Pty Ltd v McAuley[2024] QCATA 58
Waller Family Lawyers Pty Ltd v McAuley[2024] QCATA 58
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Waller Family Lawyers Pty Ltd v McAuley [2024] QCATA 58 |
PARTIES: | waller family lawyers pty ltd (applicant/appellant) v eugene mcauley (respondent) |
APPLICATION NO/S: | APL339-22 |
ORIGINATING APPLICATION NO/S: | MCDO50223-21 |
MATTER TYPE: | Appeals |
DELIVERED ON: | 24 April 2024 |
HEARING DATE: | 2 April 2024 |
HEARD AT: | Brisbane |
DECISION OF: | Dr J R Forbes, Member |
ORDERS: | The application for leave to appeal is dismissed. |
CATCHWORDS: | MINOR CIVIL CLAIM – ACTION FOR DEBT – claim by solicitor for the balance of fees and outlays for legal services – where purported costs agreement under Legal Profession Act 2007 (Qld) – where the relevant costs agreement is void for uncertainty – whether the agreement contravenes Part 3.4 Division 5 of latter Act – whether a costs agreement existed to support balance of costs charged – where costs claimed related to period after second cost disclosure notice served – where no agreement made following service of second notice Legal Profession Act 2007 (Qld), s 3, s 307B, s 308, s 309, s 310A, s 311, s 319, s 322, s 326, s 317 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142 Ashney v Pippa Colman & Associates Law Practice Pty Ltd [2022] QCAT 281 Baker v Legal Services Commissioner [2006] QCA 145 Bellevue Station Pty Ltd v Consolidated Pastoral Company Pty Ltd [2024] QCA 47 Connecticut Fire Insurance Company v Kavanagh [1892] AC 473 Crampton v The Queen (2000) 206 CLR 161 Devries v Australian National Railways Commission [1993] HCA 78; (1993) 177 CLR 472 Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 Global Future Solutions Pty Ltd v Matthew Suman & Associates [2013] QCAT 409 Lemongrove Services Pty Ltd v Rilroll Pty Ltd and Ors [2019] NSWCA 174 Whitlock v Brew (1968) 118 CLR 445 Yorkshire Insurance Co Ltd & Anor v Craine (1922) 28 Argus LR 363 (PC) |
APPEARANCES & REPRESENTATION: | |
Applicant: | Mr E Robinson, instructed by Waller Family Lawyers |
Respondent: | Self-represented |
REASONS FOR DECISION
Introduction
- [1]In mid-2018 the respondent (‘McAuley’) was involved in Family Court proceedings, imminent if not immediate.
- [2]McAuley was himself a lawyer, but with little or no experience in family law.
- [3]So, he engaged the appellant firm of solicitors (‘Waller’) to represent him in his matrimonial dispute.
- [4]Lawyer-client agreements are governed by common law, as modified by the Legal Profession Act 2007 (Qld) (‘LPA’). Section 326 of the LPA states that, subject to Divisions 5 and 7 thereof, an otherwise valid costs agreement ‘may be enforced in the same way as any other contract.’
- [5]A principal object of the LPA is ‘the protection of consumers of the services of the legal profession and the public generally’.[1] For that purpose individual clients are treated either as ‘sophisticated’ or as ordinary members of the community.
- [6]
- [7]Accordingly, McAuley received a Costs Disclosure Notice dated 31 July 2018 (‘CDN 1’) and a draft Client Services Agreement (‘CSA’)[5] on the same day. (‘Exhibit A2’).
- [8]A CDN serves as advance information of the duties and rights of the lawyer and client respectively if and when a retainer is confirmed. It is not a contractual document; it is entirely distinct from the lawyer-client agreement, not to be confused with the latter.[6]
- [9]Sections 310A and 314 describe how a CDN must be made.
- [10]The CDN 1 describes the ‘scope’ of the proposed legal services – for the most part vaguely - as follows:
- Attending you and others relevant to the matter;
- Telephone attendances with you and others necessary and relevant the scope of the work;
- Drafting, settling or reading financial documents and court documents, reports, submissions, outlines, letters and e-mails;
- Preparing for and attending listed court mentions; and
- Preparing for and attending a case assessment conference.[7]
- [11]
- [12]On 21 March 2021 Waller gave McAuley a second disclosure notice (‘CDN 2’). It was not accompanied by a second CSA.
- [13]On 29 August 2021 McAuley told Waller that he could no longer afford its services, and the retainer ended.
- [14]Soon afterwards Waller commenced these proceedings for debt, claiming $12,468 as the unpaid balance of fees and outlays owed by McAuley.
- [15]The primary hearing began on 15 November 2021 and ended on 6 June 2022.
- [16]Judgment was delivered on 18 October 2022. The Tribunal held that Waller’s claim of $12,468 should be dismissed on several grounds, namely:
- [17]Waller now seeks leave to appeal[13] on the ground that these findings involve several errors of law.
The Reasons for Decision
- [18]The Tribunal is required to apply the common law of contracts, the LPA and the rules of equity.[14]
- [19]Clause 2(b) of the CSA provides that throughout the duration of the agreement a separate Disclosure Notice ‘in accordance with the requirements of the Act’ will be provided ‘upon the receipt of a new set of instructions’.[15]
- [20]On 20 May 2019 Waller gave McAuley CDN 2, which differed from CDN 1 inter alia, in a reference to ‘advice on and prepare for And attend a Conciliation Conference , then attend before Judge Spelleken for mention and respond to [your wife’s] application ... and all other relevant work to the end of 20 May 2019’.[16]
- [21]CDN 2 mentions another agreement, but no such document was created.[17]
- [22]For financial reasons the retainer was withdrawn on 29 August 2021.
- [23]
- [24]The LPA relaxes certain costs disclosure rules where ‘sophisticated’ clients are concerned, but in that regard Waller treated McAuley as an ordinary consumer.[19]
- [25]The Adjudicator summarises the provisions of Part 3.4 Division 5 of the LPA.[20]
- [26]
- [27]However, an existing CSA ‘may be enforced the same way as any other contract’.[22]
- [28]In construing a CSA the consumer-protection intent of the LPA must be steadily borne in mind.[23]
- [29]Quick on Costs (Thomson Reuters Legal 2012), a leading Australian text on its subject, stresses that ‘a costs agreement must contain all the terms of the proposed contract,’ including ‘an accurate description of the scope of work to be covered’ by it.[24]
- [30]The fact that the CDN which precedes a CSA contains an adequate ‘scope of work’ description does not mean that the CDN description is ‘automatically included in a costs agreement’.[25]
- [31]
- [32]McAuley’s position is that the LPA supplements the common law but does not ‘dilute’ the essential common law elements of contract’.[28] The Adjudicator agrees, and comments: ‘Clear language would be required to indicate a contrary statutory intention’.
- [33]
- [34]The protective object of the LPA, and the fact that this is not a master contract with a large corporation, but one with ‘a private individual with no prior experience in the family law jurisdiction’ warrant a conclusion that Part 3.4 Division 5 of the Act demands ‘a costs disclosure notice as well as a costs agreement each state with some particularity the scope of work … [n]ebulous generality will not suffice’.[31]
- [35]Accordingly, Waller’s claim, as a claim in contract, must be dismissed.
Submissions of the Parties on whether CSA void
Waller submits
- [36]This is a ‘do and charge’ agreement, an arrangement which the LPA does not prohibit. A contrary finding is legal error.[32]
- [37]If the Adjudicator is correct lawyers will have to alter standard agreements.[33]
- [38]The present ruling raises concern about professional misconduct charges.[34]
- [39]There is no challenge to the wording of CDN 1 as to the scope of work.[35]
- [40]Refers to contents of CDN 2.[36]
- [41]
- [42]In deriving a need for specifics of scope from LPA s 322, on the basis of consumer protection objects of the Act the Tribunal impermissibly introduces ‘a very significant unstated rule’.[39]
- [43]There is no reliable test for identifying ‘some cases’ which are said to require ‘scope specifics’ in the CSA.[40]
- [44]‘[I]t is unclear why the purpose of the LPA would suggest that a solicitor must also include in the costs agreement details of the specific work’.[41]
- [45]Ashney v Pippa Colman & Associates Law Practice Pty Ltd[42] is unhelpful here. It is a setting-aside case.
- [46]The CSA in question is sufficiently clear’.[43]
- [47]Leave to appeal should be granted and the appeal allowed.[44]
McAuley submits:
- [48]Leave to appeal should not be granted.[45]
- [49]The subject decision is not attended by error.[46]
- [50]No injustice is suffered by Waller.[47]
- [51]The subject decision ‘merely reinforces the (already well supported) view that engagement agreements by a legal practice must meet the minimum (common law) requirements of a contract in order to be enforceable and, to the extent that a ‘do and charge’ agreement does not meet these requirements, It will be void.’[48]
- [52][T]he Adjudicator was bound by common law precedent.[49]
Consideration
- [53]Assuming, without deciding, that the outline of proposed work in CDN 1 is sufficiently informative to satisfy the LPA, must it be reflected, if not elaborated in the ensuing client agreement?
- [54]There is a dearth of authority precisely in point, perhaps because practitioners accustomed to computerised standard forms have not considered it, or no consumer client has yet contested it. As the Adjudicator and Waller observe, ’setting aside’ cases[50] are in a different category.
- [55]The present dispute suggests three alternate ways in which the agreement may be void:
- uncertainty of contract at common law (‘the common law theory’);
- non-observance of the LPA (‘statutory gap’); or
- absence of an agreement relating to costs incurred after issue of CDN 2 (‘absence of agreement’).
The common law theory
- [56]An agreement lacking a vital term or terms is void.
- [57]In Whitlock v Brew[51] an agreement for sale and purchase of land was accompanied by a separate agreement, or proposed agreement to lease part of the property to a petroleum company ‘upon such reasonable terms as commonly govern such a lease’. The High Court held that:
We are firmly of opinion that the expression ‘upon such terms as govern such a lease is not … apt to refer to either the period for which the contemplated lease is to subsist or to the rent to be payable thereunder. … We, therefore, are of opinion that the clause is [void for uncertainty].[52]
- [58]The court below had ruled that the disputed clause was not severable from the rest of the contract, which therefore was wholly invalid. The High Court dismissed an appeal.
- [59]Whitlock v Brew was recently applied by the Queensland Court of Appeal in Bellevue Station Pty Ltd v Consolidated Pastoral Company Pty Ltd[53], where the phrase ‘enter into a similar arrangement’ was declared too uncertain to be enforceable.
- [60]The work description in CDN 1 is set out above.[54] It is specific on one point at any rate; the last item in that list is attendance to an early interlocutory family court procedure. Its counterparts in the CSA are even less informative:
We will provide the legal services to you with professional skill and diligence and will keep you informed of the progress of each matter.[55]
The work you have instructed us to provide is the provision of legal services as requested from time to time throughout the duration of this agreement.[56]
- [61]However, the Adjudicator rejected the common law theory in favour of a statutory solution:
Waller’s Client Services Agreement with [McAuley] is in my opinion therefore void for contravention of Part 3.4 Division 7[57]of the LPA.[58]
- [62]But not without some doubt:
Does Division 5 condone and give life to an agreement that lacks an essential term or does the Tribunal have regard to the common law in decisions such as Whitlock v Brew[59] for determining whether the agreement, albeit in writing, is void for lack of a central – an essential provision. That’s the legal issue I’ve got to decide.[60]
- [63]In the absence of explicit reasons for rejection of the common law theory it remains an arguable solution.
The statutory gap
- [64]The heading to section 322 – ‘Making costs agreements’ – raises an expectation that here will be found an explicit and extensive list of essential ingredients of a valid costs agreement under the LPA, and not least a meaningful account of the work to be done and invoiced. The importance of that element is comparable with identification of the premises in a commercial lease. However, in that regard the meagre provisions of section 322(4) disappoint. It is manifestly not a code. One readily sympathises with the Adjudicator’s regret:
[U]nfortunately none of the sections in Division 5 prescribe what the content must be for a client agreement. It seems to me a significant shortcoming in the drafting of this legislation…[61]
- [65]The CSA does not recite the description of the scope of work given, for what it may be worth, in CDN 1. Nor does it incorporate that material by reference.[62]
- [66]Amid the near-silence of the Act, and remembering that common law survives absent any contrary provision of the LPA,[63] are we are left to the common law theory?
- [67]
The consumer protection features in Divisions 3 and 5 of Part 3.4 of the LPA, considered with the consumer protection purpose in section 3 … applying the interpretative imperative in section 14A(1) of the Acts Interpretation Act 1954 (Qld)[66] in my opinion require that a costs disclosure as well as a costs agreement each state with some particularity a scope of work with reference to each and all reasonably foreseeable stages of the work to be undertaken. Nebulous generality will not suffice because a client in that event has no means of knowing what prospective legal work will likely involve overall … and the likely costs within a range estimated by the solicitor. … In my opinion the legislature cannot reasonably be understood to have envisaged, let alone sanctioned, a general do and charge costs agreement lacking particularity when … what it must contain is considered in the context of stringent costs disclosure obligations [regarding CDNs] and the consumer protection purpose set out in the in the LPA … .[67]
- [68]Indeed, it is curious that the recipe for a CDN is elaborated in section 308 (Detailed[68] Disclosure of Costs to Clients) in more than thirty subsections and sub-subsections, while the contents of agreements is left to common law or statutory interpretation. It is a reasonable inference that the Act requires no less of any contract that ensues, and that ‘nebulous generality’ and anodyne phrases are to be avoided in favour of a more intelligent and specific approach. One consumer printout may not fit all. If drafting better tailored to the case in hand is needed, then so be it.
- [69]It is instructive to compare nebulous generality of most of the work description in the subject agreement with the particulars supplied in Global Future Solutions Pty Ltd v Matthew Sulman & Associates.[69] While Ashney v Pippa Colman & Associates Law Practice Pty Ltd[70] is a ‘setting aside’ case, it may be noted in passing that Mellifont P approved its inclusion of a detailed description of the subject work.
- [70]Given the wonders of modern computers, and with adequate wording in the CDN, it should be a simple matter to ‘cut and paste’ the CDN’s work description into the draft agreement.
- [71]I discern no error in the Adjudicator’s treatment of the statutory gap.
Absence of agreement
- [72]In this particular case CDN 1 ends: ‘Preparing for and attending a case assessment conference’. That interlocutory step is by no means the end of a final family law judgment. CDN 2 (dated 21 March 2019) lists significant work beyond the terminal item in CDN 1, including ‘attend[ing] before Judge Spelleken for mention and respond[ing] to Cassie’s application in a case filed 12 March 2019 and other relevant work to the end of May 2019’.[71] No agreement following CDN 2 was ever made.
- [73]On the hearing of the appeal, in response to the Tribunal’s question, counsel for Waller agreed that the balance now claimed relates to work done post-CDN 2. Clearly then, no costs for that fresh set of work are recoverable in these proceedings. Whatever may be said for the agreement made in July 2018, there is no agreement to support them.
- [74]For that reason, and the above ruling on the ‘Statutory gap’, the application for leave to appeal must be dismissed.
A taxation of costs
- [75]Section 327 is not a punitive provision, and the present decision does not produce an unduly harsh or oppressive outcome. It is open to Muller, if it considers the exercise worthwhile, to seek taxation of costs calculated in accordance with the applicable scale or at a fair and reasonable value.[72] Legal Profession Act 2007 (Qld), ss 319(1)(b)-(c), 327(2).
Consequential matters
- [76]In view of this decision it is unnecessary to consider (i) the question of new agreements, or (ii) the alleged late delivery of CDN 2. There is no need for alarmism about (i). A well-drawn scope of works clause comprehending the whole of the work expected to be done will usually obviate any need for another agreement. If it disturbs the comfort of a lawyer accustomed to ‘nebulous generality’ that is balanced by the protection of ordinary unsophisticated consumers of legal services.
- [77]As to the alleged delivery of CDN 2 out of time, that is a judgment of fact and degree for the primary decision maker – one that is unlikely to be disturbed on appeal.
- [78]There being, for one of all of these reasons, no agreement to support the claim it is unnecessary to determine the circumstances, if any, in which a fresh contract may be desirable or required. Indeed the existing CSA contemplates ‘a new set of instructions’ beyond the original end-point of a case assessment conference.[73]
- [79]Nor is it necessary to consider the suggestion that CDN 2 was given out of time, except to observe that this decision was a matter of fact and degree not usually disturbed on appeal.[74]
ORDER
- [80]The application for leave to appeal is dismissed.
Footnotes
[1] LPA s 3(a).
[2] LPA ss 311(1)(c) or (d) so provide.
[3] Transcript of hearing 15 November 2021 (‘T 1’) page 3 line 40.
[4] Transcript of hearing 6 June 2022 (‘T 2’) page 44 line 27; Primary decision 18 October 2022 (‘PD’) paras [44] and [87].
[5] LPA s 308 (Headed ‘Detailed Disclosure of Costs to Clients’ .
[6] Primary decision 18 October (‘PD’) para [79(f)(iii)].
[7] Clause 4 and Schedule Item 1 of draft agreement.
[8] Exhibit p A3 (‘the contract’).
[9] Acceptance was also signified by McAuley’s giving of instructions to Waller: Contract, ‘Acceptance’ item 2; Global Future Solutions Pty Ltd v Matthew Sulman & Associates [2013] QCAT 409 at [19].
[10] PD para [88].
[11] PD paras [91]-[92].
[12] PD paras [93]-[96].
[13] Leave is required by s 142(3)(i) of the Queensland Civil and Administrative Act 2009 (Qld).
[14] PD para [10].
[15] PD para [20].
[16] PD paras [25]-[26].
[17] PD para [30].
[18] PD para [36].
[19] PD para [44], [80], [82].
[20] PD para [54].
[21] PD paras [58], [77c].
[22] PD para [61].
[23] PD para [66].
[24] PD para [72].
[25] PD para [77c].
[26] PD para 78(g);
[27] PD para [77e].
[28] PD para [78d].
[29] PD para [78g]; Whitlock v Brew (1968) 118 CLR 445; Bellevue Station Pty Ltd v Consolidated Pastoral Company Pty Ltd [2024] QCA 47.
[30] PD para 79(h), [88].
[31] PD paras [85] and [87].
[32] Waller’s submissions (‘WS’) 3(a), 52 et passim.
[33] WS 10(a).
[34] WS 13.
[35] WS 24
[36] WS 51(c).
[37] WS 53-54.
[38] Connecticut Fire Insurance Company v Kavanagh [1892] AC 473 at 480; Yorkshire Insurance Co Ltd & Anor v Craine (1922) 28 Argus LR 363 at 366 (PC); Crampton v The Queen (2000) 206 CLR 161 at [12].
[39] WS 55, 63, 67, 71.
[40] WS 68.
[41] WS 72.
[42] [2022] QCAT 281.
[43] WS 93.
[44] WS 172.
[45] McAuley’s submissions (‘McA’) 3.
[46] McA 5.
[47] McA 9-17.
[48] McA 12.
[49] McA 20.
[50] LPA s 328.
[51] (1968) 118 CLR 415.
[52] (1968) 118 CLR 415 at [5].
[53] [2024] QCA 47.
[54] In para [10].
[55] Client services agreement Clause 2(b).
[56] Ibid Clause 2(d).
[57] A typographical error; ‘Division 7’ should read ‘Division 5’.
[58] PD para [88].
[59] (1968) 118 CLR 445.
[60] T 2 page 52 lines 1-5.
[61] T 2 page 23 lines 16-18.
[62] T 2 page 24 lines 2-3; PD para 77(c).
[63] LPA s 326; Baker v Legal Services Commissioner [2006] QCA 145 at [2]..
[64] Read: ‘Division 5’.
[65] PD para [88].
[66] ‘In the interpretation of a provision of an Act, the interpretation that will best achieve the purpose of the Act is to be preferred to any other interpretation.’
[67] PD para [85].
[68] Emphasis added.
[69] [2013] QCAT 409 at [28].
[70] [2022] QCAT 281 at [174b].
[71] CDN 2, 21 March 2019 Schedule Item 1.
[72] LPA ss 327(2), 319(1) (b)-(c); Frost v Miller [2015] QSC 206 at [83].
[73] CSA Clause 2(b) emphasis added.
[74] Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [28]-[29]; Devries v Australian National Railways Commission [1993] HCA 78; (1993) 177 CLR 472 at 479; Lemongrove Services Pty Ltd v Rilroll Pty Ltd and Ors [2019] NSWCA 174.