The Owners - Strata Plan No 45205 v Andreones Pty Limited [2009] NSWSC 1189 (13 October 2009)

Last Updated: 10 November 2009

NEW SOUTH WALES SUPREME COURT

CITATION:
The Owners - Strata Plan No 45205 v Andreones Pty Limited [2009] NSWSC 1189


JURISDICTION:
Equity

FILE NUMBER(S):
4756/09

HEARING DATE(S):
9 October 2009

JUDGMENT DATE:
13 October 2009

PARTIES:
Plaintiff: The Owners - Strata Plan No 45205
Defendant: Andreones Pty Limited (ACN 097 037 726)

JUDGMENT OF:
Slattery J

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
Plaintiff: Mr M Lee & Ms J McDonald
Defendant: Mr R Goot SC & Mr T Saunders

SOLICITORS:
Plaintiff: Doyle Edwards Anderson Lawyers Pty Ltd
Defendant: Harmers Workplace Lawyers


CATCHWORDS:
PROFESSIONS AND TRADES
lawyers
liens
whether the client should pay the solicitors professional and photocopying costs incurred after termination of the retainer
construction of retainer agreement
no express obligation in the retainer agreement that firm should be paid professional and photocopying costs incurred after termination

LEGISLATION CITED:
Legal Profession Act 2004 (NSW)
Uniform Civil Procedure Rules 2005

CATEGORY:
Principal judgment

CASES CITED:
Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99
Toll (FGCT) Pty Limited v Alpha Farm Pty Limited [2004] HCA 52; (2004) 219 CLR 165

TEXTS CITED:


DECISION:
ORDERS:
1. That on a proper construction of the contracts between the plaintiff and the defendant concerning the proceeding:
(a) The Owners - Strata Plan No. 45205 ats Oaks Hotels and Resorts (NSW) No. 2 Limited, Supreme Court proceeding no. 50035 of 2009;
(b) The Owners - Strata Plan No. 45205 ats Oaks Hotels and Resorts (NSW) No. 2 Limited, Supreme Court proceeding no. 1899 of 2008; and
(c) The Owners - Strata Plan No. 45205 ats Engineered Fire and Safety Solutions Pty Limited - District Court proceeding no. 3749 of 2008,
(collectively, Proceedings) that the defendant is not entitled upon termination of its retainer by the plaintiff to require the plaintiff to pay to the defendant an amount representing professional costs or expenses for copying the plaintiff’s documents requested by the plaintiff following termination of the retainer in the Proceedings.
2. That the defendant is and has been, from a reasonable time following receipt of an ‘Authority to Uplift and Transfer File’ dated 9 September 2009, obliged to deliver up to Doyle Edwards Anderson Lawyers Pty Limited (on behalf of the plaintiff) the plaintiff’s documents held by the defendant in relation to the Proceedings subject to the plaintiff paying or securing satisfactorily the defendant’s costs up to the date of termination of its retainer on 11 September 2009.
3. In accordance with section 728 of the Legal Profession Act 2004 the defendant make available forthwith for collection by the plaintiff and/or the plaintiff’s solicitors, all documents in the files relating to the Proceedings including an electronic copy of all documents stored electronically (emails, word, pdf and excel formats).
4. The defendant to pay the plaintiff’s costs of the proceedings, including the costs reserved on 1 October 2009 and the costs related to the hearing of the separate issue, on the ordinary basis.
5. The exhibits may be returned after 28 days.
6. Direct that the orders may be taken out forthwith.



JUDGMENT:


IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
DUTY LIST


SLATTERY J

TUESDAY 13 OCTOBER 2009

4756/09 THE OWNERS - STRATA PLAN NO 45205 v ANDREONES PTY LIMITED (ACN 097 037 726)

JUDGMENT

1 HIS HONOUR:

Background

2 The plaintiff, The Owners of Strata Plan No 45205, is the client of the defendant, Andreones Pty Limited, a law firm. The client retained the firm to conduct a number of legal proceedings in the Supreme Court and the District Court to which the client is a party. Those proceedings are The Owners – Strata Plan No. 45205 ats Oaks Hotels and Resorts (NSW) No. 2 Limited, Supreme Court proceeding no. 50035 of 2009; The Owners – Strata Plan No. 45205 ats Oaks Hotels and Resorts (NSW) No. 2 Limited, Supreme Court proceeding no. 1899 of 2008; The Owners – Strata Plan No. 45205 ats Engineered Fire and Safety Solutions Pty Limited – District Court proceeding no. 3749 of 2008. The two proceedings in this Court may be described conveniently as “the Oaks matter” and “the Waterloo matter”. The District Court proceedings may be conveniently described as “the EFSS matter”.

3 The client recently terminated the services of the firm. There is no suggestion of any misconduct on the part of the firm leading to this termination. The client merely exercised a right of termination given to it under the written retainer agreement between the firm and the client. But for a small sum of money, the client has paid the firm up to the date of termination of the retainer. These is no dispute between the parties that the small sum which is outstanding for the provision of legal services up to the date of termination of the retainer will be paid by the client.

4 The issue that brought this matter before the Duty Judge last Friday 9 October 2009 is the question of the client’s liability to pay professional and other costs incurred after the termination of the retainer. These are costs associated with supervising and organising the uplifting and transfer of the three files after the termination. The client’s liability for photocopying charges for the uplift and transfer of the files incurred after termination of the retainer is also in issue.

5 The client has now given instructions in respect of the EFSS matter, the Oaks matter and the Waterloo matter to another firm. The circumstances in which that occurred are not of relevance to the present proceedings.

6 The urgency which brought this matter into the Duty List and the reason why I am giving judgment today, is that the EFSS matter is listed for hearing in the District Court of New South Wales next Monday, 19 October 2009. Issues concerning the client’s liability for professional and other costs associated with the transfer of the files should be determined as quickly as possible, so as not to interfere with the exercise by the client of its rights and the performance of its duties in the District Court in the EFSS matter next week.

7 I had the benefit of written submissions from both sides on Friday when the matter came into the Duty List. Because of the exigencies of that list I was able to hear oral submissions from both sides but not to give judgment. I indicated that I would give judgment early this week so that the transfer of files could be dealt with quickly.

The Issues

8 The issues associated with the construction of the retainer agreement between the firm and the client are the subject of a formal order for separate trial under Uniform Civil Procedure Rules 2005 r 28.2, made by Forster J on 1 October 2009.

9 The “construction issues” identified for separate trial are the issues of interpretation of the retainer agreement raised by the relief sought in prayers 1, 2, 3, 5 and 6 of the summons in these proceedings. What has been ordered for separate trial has, by agreement between the parties, and with my approval been reduced to two questions that are recorded for convenience in paragraphs 3(a) and 3(b) of the submissions filed by counsel on behalf of the client. The two questions are as follows:

(1) as a matter of construction, whether or not the firm is entitled upon termination of its retainer by the client to require the client to pay to the firm an amount representing professional costs or expenses for copying the client’s documents requested by the client following termination of the retainer in the proceedings.

(2) even if the retainer agreement (contrary to the client’s primary submission) does require payment representing professional costs or expenses for copying following termination of the retainer, whether such amounts are not incurred by the firm in its capacity as a solicitor and cannot be the subject of a retaining lien.

10 The client’s submissions also raised for consideration whether, if what the firm alleges on this hearing is correct, that this is a matter in which the court would, in its supervisory jurisdiction over legal practitioners or under statute, intervene so as to vary or alter the retainer agreement. It is agreed however that is not a question that is before me today. I am only considering the first and the second question above.

11 The first question is a question of construction of the retainer agreement made between the firm and the client. It is accepted by both parties that if the first question is answered favourably to the client that the second question does not arise. The second question will only be reached if the first question is answered adversely to the client. The second question, if it arises, involves issues of general law as to the circumstances in which a solicitor’s lien for professional work arise.

The Retainer Agreement and The Charges and Fees

12 The amount remaining in issue in respect of these three matters, although not large, is nevertheless the not inconsiderable total sum of $39,503.56. The amounts owing for professional fees and photocopying changes are set out in Exhibit A by reference to each of the three matters as follows.

	Outstanding fees and disbursements incurred up until and including 10 September 2009 (excl. GST)	Photocopying charges incurred with the uplift and transfer of files (excl. GST)	Professional fees incurred with the uplift and transfer of files (excl. GST)	Total owing (excl. GST)
EFSS Matter	$1,341.74	$8,310.40	$3,043.67	$12,695.81
Oakes Matter	$2,018.20	$9,048.70	$8,062.30	$19,129.20
Waterloo Matter	-	$4,830.70	$2,847.85	$7,678.55

13 There is no dispute about the scope and terms of the retainer agreement. The parties accept that the firm forwarded to the client a letter and an accompanying brochure at the commencement of the retainer for each of the three matters. Both client and firm accept that this letter and the brochure set out the terms of the retainer agreement between them.

14 The letters and the brochures were in relevantly identical terms in each of the Oaks matter, the Waterloo matter and the EFSS matter. I set out below the letter of 8 September 2007 in the EFSS matter and its accompanying brochure. In this judgment I will not distinguish among the three retainers in the three matters. I will refer to the retainer in the matters constituted by this letter and the brochure as “the agreement”.

15 The letter from the firm to the client in the EFSS matter is dated 8 September 2007 provides as follows:

“THE OWNERS – STRATA PLAN NO. 45202 – ATS – ENGINEERED FIRE & SAFETY SOLUTIONS PTY LIMITED

COSTS AGREEMENT

Thank you for instructing Andreones, Lawyers to act for you in this matter.

TO ACCEPT THIS COSTS AGREEMENT

Before Andreones start work for you, I need you to sign the description of work and estimate document and return it. You should make sure that you keep a copy of this document for your records.

DOCUMENTS ATTACHED

The following attached documents form Andreones’ costs agreement with you.

• Description of work and estimate. This document sets out a general description of the work Andreones, Lawyers will do for you. It also specifically identifies each of the steps we will take to perform this work and includes and estimate of the costs.

• Costs information. This brochure sets out our general terms for acting for you.

• Hourly charge rates. This brochure sets out the hourly charge out rates of people who will perform the work.

ESTIMATE

This is Andreones, Lawyers first estimate to you.

I will send you further or updated estimates if either:

• Further or additional work is needed, or

• It appears to me that the cost of the work is going to exceed the estimate.

Each estimate sent to you will be numbered and identified as either a further or updated estimate.

THINGS THAT MAY CHANGE COST ESTIMATE/S

Although I have done my best to estimate the work and costs in this matter this work (and consequently the costs) may change for a variety of reason, including the following things -

• You ask us to do more (or less) work.

• The circumstances of the matter require us to do more (or less) work.

• The conduct of other parties or people we deal with requires more (or less) work.

• A change in the law or court/tribunal decisions that affect the law

...

QUERIES ABOUT THE COSTS AGREEMENT

If you have any questions about the work or this costs agreement, I am happy to answer them.”

16 The brochure that accompanied the letter in the EFSS matter set out the standard terms on which the firm was prepared to offer its professional services to clients. The relevant parts of the brochure were the following.

“COSTS INFORMATION

At Andreones our customers are our main focus. Our legal expertise and innovative business methods are put to work to deliver the best possible service, while ensuring maximum efficiency and value.

In line with our belief in a open approach to all our dealings with you, we’ve put together this brochure to ensure you are fully informed on the handling of your legal work and the costs involved.

DESCRIPTION OF WORK

The work that we will do for you has been outlined in our description of work and estimate.

Naturally, as this matter progresses, we may need to send you further or updated description of work and estimate documents.

PEOPLE CARRYING OUT THE WORK AND HOURLY CHARGE RATES

We have informed you separately of the people primarily responsible for work in this matter.

At times, we may need to assign part of the work to other people, due to the importance, urgency, nature or cost of any work to be done.

You can find the hourly charges for our people set out in the attached hourly charges sheet.

The hourly charge rates may be increased from time to time. If so, we will inform you.

INTERNAL AND EXTERNAL CHARGES

Internal charges will be made as follows:

• Document production (printing and copying) at 75c per page for black and white photocopying, 50c per page for letterhead printing and 35c per page for plain paper printing

• Colour document production at $2 per page

• Local facsimiles at $3 for the first page, plus $1 for each and every following page

• Interstate facsimiles at $4 for the first page, plus $2.25 for each and every following page.

• International facsimiles at $6 for the first page, plus $4 for each and every following page

• Online searches, couriers, telephone calls (STD, IDD and mobiles) at cost

• Postage at cost

• Bank charges (including bank cheque fees) at cost

• All credit card payments for $2,000 or more are charged a 2% administration fee

These charge rates may be increased from time to time. If so, we will inform you.

External charges will be made at the rates disclosed by the supplier of the goods or services or at cost (whichever is higher).

ESTIMATES OF COSTS

Legal services charges are calculated either:

• By hourly rates (our usual method) based on actual time spent on the work measured by one minute units. Our hourly rates vary depending on the person carrying out the work, or

• By the fixed cost based on experience of similar matters.

At times it is difficult to know how any work will progress but we will estimate our charges up to the stage we reasonably believe the work will progress.

Where fixed cost matters develop beyond the described work, additional work will be charged at the hourly rates.

We may need to vary these estimates as this matter progresses and will send you a further or updated description of work and estimate setting out the work and the estimated costs for doing that work.

External charges are estimated to you based on the best information we have at the time. However please be aware that it is an estimate only, and that the actual charges may be more or less than this estimate.

GST – Our estimated charges do not include GST 10% GST will be added to your invoice wherever it applies.

COSTS EXPOSURE, INVOICING AND PAYMENT

We will invoice you as work stages finish or each month as the work progresses until the work is complete.

As we routinely work and incur costs before being paid, there is a limit to the amount of work we will do without payment. We call this our “exposure limit” and it covers unpaid invoices, unbilled work and other unbilled charges. If you exceed that exposure limit, we will contact you and reserve the right to:

• stop work until outstanding amounts are paid, and/or

• require payment of unbilled work and charges, and/or

• require you to deposit monies into our trust account to cover further anticipated work, and/or

• reduce the exposure limit that applies to you.

Our invoices are payable within 14 days of issue.

If our invoices are not paid within 30 days we will charge you interest on the unpaid amount, we may take action and you may incur further costs. The current interest rate is 8.25% per annum – as prescribed in Regulation 110A of the Legal Profession Regulation 2005, but it may vary when we invoice you.

Under our costs agreement you must pay our invoices on time, regardless of any legal costs awarded to you in legal proceedings.

If a court orders you to pay another party’s legal costs (for instance, if you are unsuccessful in court), those costs are in addition to any amounts you owe to us.

...

AUTHORITIES RELATING TO MONEY AND DOCUMENTS

We may ask you to deposit money into our trust account to cover anticipated fees and charges.

Once your matter is completed or on your request, we will refund any money remaining after payment of applicable invoices.

Under our cost agreement, you authorise us to:

• receive, on your behalf, any money due to you in the course of or as a result of this retainer, and

• deduct from money received by us and transfer to Andreones’ own account, amounts required to pay our invoices.

Once the work is complete and paid for you are entitled to request all documents in your file.

If you request documents or your entire file we will make a copy of those documents and you must pay the copying costs at the internal charge rate.

If no request is made, we will keep your file for 10 years (either in storage or electronically).

After that time we have the right to destroy it.

TERMINATION OF RETAINER

We may decide to cease acting on your behalf if:

•	you do not provide us with adequate instructions or decline to act in accordance with our reasonable advice,
•	you fail to pay our fees and charges in line with our cost agreement and our requests,
•	you fail to deposit money into our trust account as we request,
•	you indicate to us (by words or other actions) that we have lost your confidence,
•	you give us misleading information,
•	you are uncooperative or you don’t appear at court when required,
•	you change representation or decide to act for yourself, or
•	we have a conflict of interest.

If we cease acting for you, we ill give you at least 14 days notice wherever possible. We will also give you written reasons for our decision.

You must still pay us for our work and expenses up to that date.

For fixed cost matters you must pay us for our services provided up to that date. This portion will be estimated as fairly as possible.

You may terminate the agreement in writing at any time.

If you do so, you must pay us for our work and expenses up to the date of termination and for things we must do after the date of termination to comply with our legal obligations.

For fixed cost matters you must pay the portion of our services provided up to that date. This portion will be estimated as fairly as possible.

We are entitled to keep your documents while there is still money owing to us.”

17 Throughout the firm’s performance of the retainer in each of the three matters it gave “Description of Work and Estimate” documents to the client, describing and estimating the cost of work to be done. These documents were typically provided by the firm under the agreement in anticipation of the doing of the further work in the matter to which they related. The final Description of Work and Estimate document provided by the firm to the client before termination of the EFSS matter was given by the firm to the client on 3 April 2009.

“Description of work and estimate

Estimate No. 6.1

You must sign this Description of work and estimate document before we continue working for you

General description of the work you require us to do for you

To act for you opposing a claim against the owners corporation by Engineered Fire & Safety Solutions Pty. Limited

Work to be done

Action taken in Stage 6 includes:

•	Preparing for hearing
•	Liaising with lawyers for EFSS
•	Liaising with Counsel
•	Drafting index and collating tender bundle
•	Reporting to and obtaining instructions from you
•	Attending at hearing in the District Court of New South Wales (2 days)

Estimated completion date: September 2009

Note: This Description of work and estimate, the Costs information brochure and the Hourly charge rates brochure form our costs agreement with you.”

18 Across from the general description in this Description of Work and Estimate of the work the firm was required to do, the firm set out its cost estimates for the work so described. For this last “Description of Work and Estimate” for the EFSS matter the costs estimates were the following:

“Charging Method	The hourly rates set out in the attached hourly charge rates brochure
Costs Estimates
Fee Estimate:	$15,000 - $20,000
External expenses:
- Counsel’s fees	$12,000
- Hearing allocation fee	$1,044
Internal expenses:	$800
TOTAL ESTIMATE COSTS (EXCLUDING GST)	$28,844 - $33,844”

19 This Description of Work and Estimate for the EFSS matter contains a work description with six bullet points. The last bullet point is “Attending at hearing in the District Court of New South Wales (two days)”. The part of the work there described has not yet occurred. The District Court hearing has not yet taken place. That work is the professional work of attending at the hearing of the EFSS matter scheduled to commence next Monday 19 October 2009.

20 The parts of the agreement which require closest attention in order to understand the parties’ submissions are the terms under the headings “Authorities Relating to Money and Documents” and “Termination of Retainer”.

Summary of the Contentions of the Parties

21 The contentions of the parties may be readily summarised. The firm says that where the retainer has been terminated by the client under the agreement and the firm needs to organise the transfer of the files and to undertake photocopying of those files, that the portion of the retainer under the heading “Authorities Relating to Money and Documents” is engaged and that the firm may copy the entire file and charge the client for copying costs at the internal charge rate. The firm further submits that the terms of the agreement under the heading “Termination of Retainer” require the client to pay the professional costs associated with organising the transfer of the file and the like. This requirement arises from the words under the heading “Termination of Retainer” requiring the client to pay the firm for the work and “for things we must do after termination to comply with our legal obligation.”

22 The client, on the other hand, contends that there is no obligation arising under the agreement on termination of the retainer either for the firm to undertake any photocopying or for the client to have to pay for it. The client says that the terms of the agreement under the heading “Termination of Retainer” govern what happens in the present circumstances, where there has been a termination by the client before the agreed work is complete. The client submits that those terms do not authorise photocopying. Further, the client submits that the words “things we must do after the date of termination to comply with our legal obligation” is a reference to things that the firm is legally obliged to undertake after the date of termination, such as, for example, issuing a notice of ceasing to act under the UCPR r 7.29. These, in summary, are the competing contentions.

Analysis of the Agreement

23 The Court’s interpretation task is clear. It is to discover the intention of the parties from the whole of the instrument being construed: Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99 at 109. The Court endeavours to ascertain the meaning of the agreed terms objectively: Toll (FGCT) Pty Limited v Alpha Farm Pty Limited [2004] HCA 52; (2004) 219 CLR 165.

24 Consideration first of the client’s liability for copying charges in the section “Authorities Relating to Money and Documents” helps understand the clients’ liability for associated professional fees in the section “Termination of Retainer”.

25 The agreement is crafted contemplating one of the two possible outcomes that will end a retainer. “Completing” the work without termination by either the firm or the client is one possible outcome. The other possible outcome is early termination of the retainer, before the agreed work is complete.

26 There are many indicators in the agreement of a strong distinction between these two different ways of treating what happens in this retainer, depending on which of the two ways the retainer comes to an end, through completion or termination. An understanding of this distinction assists to resolve the matters in issue between the parties.

27 All the obligations between firm and client relating to keeping documents and making copies of documents are found in the agreement under the heading “Authorities Relating to Money and Documents”, and are preceded by some reference to the words “once the work is complete and paid for.” These words set out a regime that contemplates that “once your matter is completed”, the client can be refunded any money held on trust. Once what is described as “the work is complete and paid for”, a client is entitled to request all documents in the client’s file.

28 It is not just a curiosity that in the section headed “Termination of Retainer” there is no reference either to completion of “the work” or completion of “your matter”. The absence of such phraseology is marked. Instead, under “Termination of Retainer” the two kinds of termination, firm initiated termination or client initiated termination, have the immediate result that “you must pay us for our work and expenses but to the date of termination.” This part of the agreement does not contemplate that the work will be either complete or incomplete at the time of termination. It does not enter upon that subject at all.

29 The firm, contends the reason that the terms under the heading “Termination of Retainer” do not enter upon the subject of acts upon completion such as copying is that this subject is picked up in any event in the words under the heading “Authorities Relating to Money and Documents”. The client contends that the absence of these words is deliberate and indicates a different regime for what is to occur about the storage and copying of documents upon termination, as distinct from completion of the agreed task.

30 I agree with the client’s construction of these provisions. The two sections of the agreement, the “Termination of Retainer” section and the “Authorities Relating to Money and Documents” section, under their different preconditions set up quite different regimes for the storage and retention of documents. In the “Authorities Relating to Money and Documents” section, what is contemplated is that either the whole matter or a defined and agreed part of the work within a matter will be brought to an agreed conclusion. As a result of that completion of the agreed task occurring, both parties contemplate that whatever else happens the firm will be expected to store the file in the future. The copying regime in that section is expressed as a contractual obligation of the firm which promises to store the files for ten years, “if no request is made, we will keep your file for 10 years (either in storage or electronically)...”. Future storage is contemplated as continuing one aspect of the specified client/solicitor relationship. This relationship continues in a limited way with the agreed storage of the files by the firm. The copying fee is an incident, perhaps but a small contingent incident, of the continued performance of that limited relationship.

31 The section “Authorities Relating to Money and Documents” contemplates that a client may request documents” or, indeed, request “your entire file”. However, if that occurs, when the matter is complete, the firm says, “We will make a copy of those documents and you must pay the copying charge at the internal charge rate.” It is not clear, as to whether the client or the firm would retain the original or the copy. That would be a matter for discussion, depending upon why it was that the client needed to obtain documents from the firm. The client may only need a copy. A court may need an original. The term in relation to copying operates to accommodate a range of circumstances where the express promise to keep the files for ten years (either in storage or electronically) is being discharged by the firm.

32 In contrast, the language of completion is not present in the section entitled “Termination of Retainer”. This is for a good reason. The parties contemplated that the firm probably would not be keeping the file upon such a termination.

33 The section of the agreement under the heading “Termination of Retainer” envisages two kinds of termination are contemplated. One is termination by the firm for a range of possible reasons, including failure to pay fees, an indication that the client has lost confidence in the firm, the giving of misleading information by the client to the firm, or a failure to co operate. All of these circumstances bespeak a general loss of confidence in the firm’s management of the retainer prompting the client’s need to change to a new firm if the matter is incomplete. In those circumstances the parties would readily contemplate that the firm would not be storing the file. The file would be taken elsewhere to allow the matter to be completed in the hands of a new firm.

34 Similarly, upon termination by the client, the agreement gives the client the right to terminate the agreement in writing “at any time”. No notice period for termination is required. With an incomplete litigious matter the termination would need to be acted on and file transferred quickly.

35 With client termination too, the parties contemplate that it was more likely than not that a new firm would take up the incomplete file. Under the “Termination of Retainer” section of the agreement, the parties were not contemplating the undertaking of a long term storage obligation. They did not think that such a service would be either expected or required of the firm. Of course, a need to store the file could arise after termination. That could be the subject of separate negotiation.

36 On the client termination that occurred here without notice in three litigation matters, it was almost inevitable that the work being done would be incomplete. In those circumstances the requirement to store the file under the Authorities Relating to Money and Documents did not immediately arise. The file in each of these matters is needed to continue to be worked on by another solicitor to complete each matter.

37 There is a distinction drawn between “matter” and “work”. This was the subject of submissions on both sides. The way the section “Authorities Relating to Money and Documents” works is that money may be requested back “once your matter is completed” but “once the work is complete and paid for” (emphasis added) documents can be requested. Different obligations arise upon completion of the “matter” or the “work”. Those differences are not decisive here. In my view it is sufficient to concentrate on whether or not the work is complete because that gives rise to the obligation in dispute about copying and copying expenses.

38 Another pointer to the need for completion of the work for the operation of the photocopying charges is that under that heading “Authorities Relating to Money and Documents” the words appear, “If you request documents or your entire file,”(emphasis added). If work was not completed it would be difficult to describe the file in any sense as “entire”. That is another factor indicating that the operation of the photocopying charge term in that section is something which only arises upon agreed completion of the work in accordance with the way the work task was last described.

39 In contrast, the material in the section “Termination of Retainer” covers the field of possible termination but in a different way. It covers all types of termination, termination by the firm and by the client.

40 Focusing for a moment on the termination which occurred here which is client termination, it is notable that there is no express promise to keep the file in any kind of complete form for ten years. Any file keeping obligations are left to the general law. There is a negative statement about the retention of documents after termination, “We are entitled to keep your documents while there is still money owing to us.” There is no promise about document keeping. Therefore there is no need to arrange a photocopy regime or to go beyond what would otherwise be required by law. It is implicit in this structure that what happens on client termination is that “once you pay the bill we will give the documents to you”. In all likelihood, given the nature of the termination, that is what would need to occur.

41 It is now necessary to turn to the professional fees charged for work done after termination. There is a bright line distinction in the agreement between fees and expenses that must be paid for and those that need not be paid on client termination. The key words are, “You must pay us for our work and expenses up to the date of termination”. But for a single exception which is in issue in this case, there is no carry over obligation under the agreement to “pay us for our work” done after termination. The only obligation to pay for “our work” after termination is in the requirement to pay “for things we must do after the date of termination to comply with our legal obligations.”

42 The question here is, does this cover professional charges and expenses associated with reviewing the file after termination prior to handing it over? That is the contention of the firm. The client says these words have a far more limited operation. The client submits they naturally refer to compulsory external legal obligations of a kind such as filing a notice of ceasing to act under UCPR r 7.29 and the like.

43 The client’s submissions are also to be preferred here. The restriction contained within the words themselves, “for things we must do” (emphasis added). is of decisive importance There is a difficulty in construing these words any more widely than as relating to charges for acts strictly in compliance with “a direct and identifiable legal obligation, in the form of rule of court or an express obligation under the agreement. The word “must” requires this construction. The word is designed, in my view, to operate only to require the client to have to pay for things which the firm is compelled to do and where there is no element of solicitor discretion as to whether the act is done or not or as to the time and amount of the work done. If there is any element of solicitor discretion involved, then the solicitor’s charges look more like “our work”, which only need to be paid for by the client if performed up to the date of termination.

44 The words do not readily contemplate charges relating to supervision, review or organisation of the file for photocopy or transfer purposes. I have already found that there is no express obligation in the agreement for the firm to copy documents upon client termination. The agreement distinguishes between termination by the firm and termination by the client. Only the right of termination by the client contains the extra words “and for things we must do after the date of termination to comply with our legal obligation.” That is understandable. With client termination there may still be some matters unfinished at termination which the firm must strictly have to undertake, such as the filing of a notice of ceasing to act. The moment of termination is the client’s choice and not the firm’s, so the firm must undertake these.

45 In conclusion, therefore, in answer to the first question on the proper construction of the agreement, the firm is not entitled upon termination of its retainer by the client to require the client to pay the firm an amount representing professional costs or expenses for copying the client’s documents requested by the client following termination of the retainer in the three sets of proceedings.

The Firm’s Other Submissions

46 It is necessary to deal briefly with other submissions put by the firm but not already covered in the analysis above. Counsel for the firm submitted that “the work” could be defined as short or long and readily redefined such that it could be said that the “work” was complete, even though “the matter” might not be complete. My attention was drawn to the difference between “matter” and “work”.

47 Somewhat prompted by those submissions, I was initially attracted to the idea that the Termination of Retainer section of the agreement may itself redefine “the work” and its completion for the purposes of the operation of the agreement. Once a direct termination was effected the work would be “complete” at least in the sense of being “finished”. That would then engage the storage and copying terms in the “Authorities Relation to Money and Documents” section upon a termination.

48 On reflection, I think there are several problems with this argument. The first and not least of which is that in relation to the EFSS matter in the District Court on the facts of this case, in no sense was the work complete. In relation to the six bullet points of work to be done, as described in the “Description of Work and Estimate”, only five of them were actually done at the time of termination. Furthermore, there is no mechanism in the “Termination of Retainer” section that clearly redefines “complete” elsewhere in the agreement to encompass termination to make this argument work. This could have been but has not been done. Elsewhere in the agreement “complete” is used in the sense of “entire” or “whole” and not just “finish”. Further, to redefine “complete” the work in this way, is really only to adopt a secondary meaning of the word “complete” which is, as the Macquarie Dictionary definition shows, more like the word “finish”:

“complete –adj. 1. having all its parts or elements; whole; entire; full. 2. finished; ended; concluded. 3. thorough; consummate; perfect in kind or quality. 4. Archaic. (of persons) accomplished; skilled; expert. –v.t 5. to make complete; make whole or entire. 6. to make perfect. 7. to bring to an end; finish; fulfil. [ME compleet, from L complçtus, pp., filled up, completed]”

49 The firm also impressed upon me the distinction between “matter” and “work” and the interrelationship between the two. But the agreement operates so that the termination provisions displace the document storage regime, rather than redefine what is “completion” so as to cause it to operate through the provisions under the heading “Authorities Relating to Money and Documents” under the agreement.

50 Another point made by the firm is, how is storage of the client’s file to be dealt with if it is not covered generally in the way contemplated in the section “Authorities Relating to Money and Documents”. The short answer is that there will be a rapid uplift of the file to other solicitors on termination. If the firm wants to keep the file for its own purposes, it may do so. If that were to occur that would be storage for the firm’s own purposes. The parties would then fall back on the general law to govern their obligations or negotiate a storage regime upon termination. One is not provided for by the agreement.

51 Thus, I answer the first question as indicated above. The second question does not arise.

52 The only question remaining is the question of costs. The client has been wholly successful. I therefore propose to order the firm to pay the plaintiff’s costs. I direct parties to bring in short minutes of order as soon as possible to give agreed effect to these reasons. If that cannot be done I will deal with the matter at 2 pm or shortly thereafter.

Upon Resumption at 2.00pm

53 The parties have now brought in short minutes of order that give agreed effect to these reasons. I will therefore make the orders below:

1. That on a proper construction of the contracts between the plaintiff and the defendant concerning the proceeding:

(a) The Owners - Strata Plan No. 45205 ats Oaks Hotels and Resorts (NSW) No. 2 Limited, Supreme Court proceeding no. 50035 of 2009;

(b) The Owners - Strata Plan No. 45205 ats Oaks Hotels and Resorts (NSW) No. 2 Limited, Supreme Court proceeding no. 1899 of 2008; and

(c) The Owners - Strata Plan No. 45205 ats Engineered Fire and Safety Solutions Pty Limited - District Court proceeding no. 3749 of 2008,

(collectively, Proceedings) that the defendant is not entitled upon termination of its retainer by the plaintiff to require the plaintiff to pay to the defendant an amount representing professional costs or expenses for copying the plaintiff’s documents requested by the plaintiff following termination of the retainer in the Proceedings.

2. That the defendant is and has been, from a reasonable time following receipt of an ‘Authority to Uplift and Transfer File’ dated 9 September 2009, obliged to deliver up to Doyle Edwards Anderson Lawyers Pty Limited (on behalf of the plaintiff) the plaintiff’s documents held by the defendant in relation to the Proceedings subject to the plaintiff paying or securing satisfactorily the defendant’s costs up to the date of termination of its retainer on 11 September 2009.

3. In accordance with section 728 of the Legal Profession Act 2004 the defendant make available forthwith for collection by the plaintiff and/or the plaintiff’s solicitors, all documents in the files relating to the Proceedings including an electronic copy of all documents stored electronically (emails, word, pdf and excel formats).

4. The defendant to pay the plaintiff’s costs of the proceedings, including the costs reserved on 1 October 2009 and the costs related to the hearing of the separate issue, on the ordinary basis.

5. The exhibits may be returned after 28 days.

6. Direct that the orders may be taken out forthwith.

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LAST UPDATED:
9 November 2009