High Court dismisses immediate taxation order, scheduling oral evidence trial to resolve factual dispute over solicitor discharge.

Neutral Citation Number: [2010] IEHC 26

THE HIGH COURT

2009 671 SP

IN THE MATTER OF THE ATTORNEYS AND SOLICITORS (IRELAND) ACT 1849

BETWEEN

DAVID SYNNOTT PRACTISING UNDER THE STYLE AND TITLE OF

D. J. SYNNOTT SOLICITORS

PLAINTIFF

AND

PRINCE ADEKOYA

DEFENDANT

Judgment of Miss Justice Laffoy delivered on the 29th day of January, 2010.

The claim

In these proceedings, which were initiated by special summons which issued on 8th June, 2009, the plaintiff seeks either –

(a) judgment in the sum of €57,431.80, which it is claimed is the amount due and owing by the

defendant to the plaintiff for work done and professional services rendered by the plaintiff as the

defendant’s solicitors, or

(b) an order pursuant to s. 2 of the Attorneys and Solicitors (Ireland) Act 1849 (the Act of 1849)

directing that a bill of costs for that amount presented by the plaintiff to the defendant be referred to

the Taxing Master for taxation on a solicitor and own client basis together with an order directing the

payment by the defendant to the plaintiff of the sum found due on such taxation.

The work done and professional services rendered in respect of which the claim is made arise out of the representation by

the plaintiff of the defendant in personal injuries proceedings in this Court between the defendant, as plaintiff, and IBM

International Irish Holdings Limited, as defendant, under Record No. [2006 No. 5252P] (the 2006 proceedings).

The factual background

In May 2004 the plaintiff took over the representation of the defendant in relation to the matters which were

subsequently litigated in the 2006 proceedings from Gary Matthews, solicitors, which was a firm practising in Dundalk. The

defendant had been referred to that firm in April 2002 by a company called “Claims Ireland”. It is the contention of the

defendant that Gary Matthews agreed to represent the defendant on a “no win, no fee basis”. It is acknowledged by the

plaintiff that the defendant’s file was transferred to it by Gary Matthews “on the basis of no win, no fee”.

No evidence has been put before the Court of compliance with s. 68 of the Solicitors (Amendment) Act 1994 (the Act of

1994).

The 2006 proceedings were listed for hearing before the High Court on 30th April, 2008. On 1st May, 2008, the case was

assigned to Lavan J. The plaintiff has averred that, on that day, as a result of discussions which took place between

senior counsel for both sides, it transpired that discovery was required from the defendant in the 2006 proceedings in

relation to a matter which related to the issues in the 2006 proceedings. Accordingly, the 2006 proceedings were

adjourned to allow time for discovery to be made. The plaintiff, in an affidavit grounding this application, which was sworn

on 26th May, 2009, has averred that the situation was explained by senior counsel to the defendant and that he agreed

to the adjournment.

Subsequently, the defendant alleged that he had not agreed to the adjournment. In his replying affidavit, which was

sworn on 15th July, 2009, the defendant has exhibited a letter of 28th August, 2008 to the plaintiff complaining about the

adjournment and the delay in bringing his action to finality. Later, the defendant discharged the plaintiff from acting for

him. Notice of discharge dated 24th October, 2008 was filed in the Central Office on that day.

The plaintiff had a comprehensive bill of costs prepared by Innscourt Legal Cost Accountants, which set out the total

fees due by the defendant to the plaintiff up to the time of discharge at €57,431.80. The bill of costs covers work done

by Gary Matthews, as I understand it on the basis of a letter of 19th March, 2009 from the plaintiff to the defendant,

which is exhibited in the plaintiff’s affidavit, which states that the “fee entitlement” of Gary Matthews was contracted to

the plaintiff.

The bill of costs was sent by the plaintiff to the defendant by letter dated 3rd March, 2009. The response of the

defendant in an undated letter received by the plaintiff on 16th March, 2009 was that he did not owe the plaintiff any

money. He asserted that “any agreement that may exist or have existed has been frustrated by your inactions to

advance my case and such agreement … has been dissolved by frustrations”.

The Court was informed, although these facts are not on affidavit, that the 2006 proceedings were listed for hearing after

the plaintiff was discharged and that the defendant appeared in person in those proceedings when they were heard in

July 2009. The proceedings were dismissed. An appeal has been lodged in the Supreme Court.

The defendant’s complaints

The defendant appeared in person on the hearing of these proceedings on 25th January, 2010.

In his replying affidavit already referred to, the defendant has made a number of complaints, apart from his complaint that

he did not agree to the adjournment in May 2008. As I have recorded, he also contends that he has assumed no liability

for costs unless the 2006 proceedings are successful. In that regard, he has averred that he would have no objections if

the plaintiff obtains his costs from the defendant in the 2006 proceedings.

My observations on the complaints made by the defendant in the replying affidavit are as follows:

(1) The defendant complains that a medico legal report obtained by the plaintiff from a medical

consultant, which was supposed to relate to the defendant, was stated therein to relate to a person of

a different name. Counsel for the plaintiff suggested that the name on the medical report (Mr. Adeyemi

Adegoke) was merely a typographical error. The error seems to me to go beyond that, because the

description of the accident contained in the medical report does not mirror the accident which forms the

basis of the defendant’s personal injuries claim. In any event, while there was an error, it was an error

which obviously could be explained. I attach no significance to it.

(2) The defendant complains about a motion for discovery brought by the plaintiff against the

defendant in the 2006 proceedings in May 2007. As I understand it, the basis of his complaint is that

the motion was unnecessary having regard to the response of the solicitors for the defendant in the

2006 proceedings to the request for voluntary discovery. That is a matter which, in due course, can be

adjudicated on by the Taxing Master.

(3) The defendant also complains that he was referred twice to a medical consultant nominated by the

defendant in the 2006 proceedings – in June 2004 and in January 2008, contending that the second

examination was unnecessary. As the plaintiff’s solicitors informed the defendant at the time, the

defendant in the 2006 proceedings was entitled to have him examined prior to the hearing.

(4) The defendant complains about a letter he received from the plaintiff’s solicitors prior to the hearing

in April 2008, in which he was advised to bring only one family member to Court. That is a trite

complaint.

In general, none of the foregoing complaints has a bearing on the issues in these proceedings. The only complaint which

would have a bearing, if it were true, is the complaint that the defendant did not agree to the adjournment in May 2008.

The issues

While there is a factual dispute as to whether the defendant consented to the adjournment on 1st May, 2008, there is no

dispute that the defendant discharged the plaintiff in October 2008. Given that there is also no dispute that the plaintiff

was retained on what is colloquially referred to as a “no foal, no fee” basis, the core issue is whether the consequence of

the discharge of the plaintiff by the defendant entitles the plaintiff to be paid the costs incurred up to the date of

discharge on a solicitor and client basis now. In the resolution of that issue, the factual dispute as to whether the

defendant consented to the adjournment has to be resolved.

Counsel for the plaintiff did not rely on any authority, but informed the Court that, as a matter of practice, when the

solicitor is discharged in circumstances where the discharge takes effect before the “foal” arrives, the solicitor is entitled

to produce a bill of costs and, subject to the entitlement of the client to have the bill of costs taxed, he is entitled to be

paid his costs.

The law

In McHugh v. Keane (High Court, Unreported, 16th December, 1994), Barron J. considered an issue similar to the issue

with which the Court is confronted on this application. In that case, the defendant’s solicitor had agreed to act on behalf

of the plaintiff in a personal injuries action. However, after some intermediate “toing and froing”, the plaintiff, in 1994,

instructed different solicitors to act for him, who sought his file from the defendant and an itemised fee note. There was

delay in producing the file and a motion was brought against the defendant seeking the file. The response of the

defendant, so far as is relevant for present purposes, was to produce a bill of costs drawn by cost accountants and to

indicate that he was prepared to hand over the file, provided he was paid his outlay together with half his professional fee

to date and together with a sum in respect of the fee of the cost accountants. The position of the plaintiff, through his

new solicitors, was that he was prepared to pay the outlay as appearing in the bill of costs, but not the fee payable to

the cost accountants, and that his new solicitors would give an undertaking as to the remainder of the costs out of any

damages received by the plaintiff.

As regards the legal position of the defendant solicitor vis-à-vis the plaintiff client, Barron J. stated as follows:

“The rights of the parties in the present case depend upon contract. The normal contract between a

solicitor and his client is that the solicitor will be remunerated by the client for his profession (sic) fees

and outlays. It is, of course, open to the parties to negotiate other terms of such contract. In the

present case it is common case that the retainer of the defendant on behalf of the plaintiff was upon

the basis that he would be remunerated out of monies recovered in the action or not at all. Where a

solicitor accepts instructions upon this basis, in my view there is a corresponding obligation upon his

client based upon an implied term to that effect not to withdraw those instructions until the conclusion

of the proceedings.

The implications of such a contract go further. If the solicitor breaches the terms of the agreement by

failing to act with all due diligence and care on behalf of his client, then his client would no longer be

bound not to withdraw his instructions. Likewise, if the client is dissatisfied with the solicitor without

proper grounds and instructs another solicitor, he is in breach of his contract to retain his solicitor until

the conclusion of the case and his former solicitor would no longer be bound to look only to damages

and costs awarded against the other party for his remuneration.”

On the facts of the case, Barron J. stated that there was no good reason why the plaintiff should have sought to leave

the defendant, who had acted perfectly properly in the conduct of the proceedings. It followed, Barron J. held, that the

plaintiff was in breach of contract to the defendant and that the defendant became entitled to “reasonable remuneration

for work done on his behalf”. On the basis of his assessment of the work which the defendant had done, Barron J. held

that the amount claimed in the bill of costs did not represent reasonable remuneration.

Later in his judgment, Barron J. identified the issue as not whether the defendant should be paid for what he had done,

but when he should be paid. He stated:

“In determining the proper order to be made in the present case, it seems to me, that there are two

matters which are material. The first is that the plaintiff is in breach of contract to the defendant in

failing to remain with him until the conclusion of the proceedings. The second is that the defendant has

issued an unreasonable Bill of Costs to the plaintiff.”

Barron J. measured a sum on payment of which, and upon receipt of an undertaking to pay such further costs as might be

taxed in default of agreement, the new solicitor would be entitled to the file. The sum measured was in the region of fifty

per cent higher than the outlay and inclusive of VAT which had been claimed on the bill of costs.

While the decision in McHugh v. Keane pre-dated the obligations imposed by s. 68 of the Act of 1994, I have had regard

to the fact that in Boyne v. Bus Átha Cliath (No. 2) [2008] 1 I.R. 92, it was held by the High Court (Gilligan J.) that,

notwithstanding that s. 68 of the Act of 1994 was worded in mandatory terms, a failure by a solicitor to send an

appropriate letter in compliance with s. 68 did not render the contract of retainer between the solicitor and client

unenforceable and therefore did not deprive the solicitor of his right to recover his costs on a party and party taxation

pursuant to the final order of the trial Judge. Therefore, I consider that it is open to the Court in this case to apply the

principles applied by Barron J. in McHugh v. Keane, whether s. 68 was complied with or not.

Since the plaintiff has invoked the provisions of the Act of 1849, I think it is appropriate to record that in State (Gallagher

Shatter & Co.) v. de Valera [1986] ILRM 3, the Supreme Court held that the Court has an inherent right to order taxation,

a right which runs parallel to the statutory jurisdiction.

Application of the law to the facts

In this case, adopting the terminology used by Barron J., if the plaintiff was discharged by the defendant “without proper

grounds”, the defendant is in breach of his contract to retain the plaintiff until the conclusion of the case. If those

circumstances prevail, then the plaintiff is no longer bound to look only to damages and costs awarded against the

defendant in the 2006 proceedings for his remuneration, or, as counsel for the plaintiff more graphically put it, until the

“foal” is produced.

I have already dealt with the various complaints against the plaintiff made by the defendant in his replying affidavit.

However, there remains a conflict of fact between the plaintiff and the defendant as to whether the defendant agreed to

the adjournment of the proceedings on 1st May, 2008 so that further discovery could be obtained. That conflict cannot

be resolved on affidavit evidence, particularly, as I understand it, because the plaintiff, who has sworn the grounding

affidavit, was not present in Court on the day.

Before this issue can be determined, that issue of fact will have to be tried on oral evidence. I would expect that either

the solicitor having carriage of the 2006 proceedings at the time in the plaintiff’s firm or the senior counsel involved on

behalf of the defendant on the day or both should give evidence and that the defendant have an opportunity to cross-

examine them. The defendant will also have the opportunity to give evidence. I will fix a date to deal with that factual

issue.

I have no doubt that the determination of what constitutes reasonable remuneration for the work done by the plaintiff on

behalf of the defendant should be referred to the Taxing Master for taxation. Further, I have no doubt that the Court has

jurisdiction to direct taxation of reasonable remuneration. A point on which I have some difficulty, however, and which I

feel it is necessary to raise because the defendant is not legally represented, is whether the plaintiff is entitled to have

the costs taxed on a solicitor and own client basis, as he contends he is, or whether he is only entitled to have the costs

taxed on a party and party basis. While this issue was not expressly addressed by Barron J. in McHugh v. Keane, the

impression I get from his judgment, which may be erroneous, is that the bill of costs in that case was presented on a

party and party basis and that what Barron J. was directing was taxation on a party and party basis. Having said that, in

Treacy v. Roche [2009] IEHC 103, on the basis that the plaintiff’s solicitors had discharged their retainer for good reason,

this Court directed taxation of costs on a solicitor and client basis.

As the basis of taxation was not raised at the hearing of the plaintiff’s application, I will hear further submissions on that

point.