Liability for fees subject to complaint
Firms seeking to recover fees through summary judgment applications can still proceed with claims for liability while complaints under the Lawyers and Conveyancers Act 2006 are on foot, the High Court has held.
In Simpson Grierson v Gilmour (High Court, Auckland, Justice Stevens, 27 August 2009, CIV 2008-404-008674), the law firm sought summary judgment relating to its fees of $391,624 and Sydney firm Clayton Utz’s fees of $396,362 for services provided to the defendant.
The defendant applied to the NZLS for a review of the reasonableness of both the plaintiff’s and Clayton Utz’s fees and disbursements. However, the society said it had no jurisdiction to investigate the majority of the disbursements comprising the Clayton Utz invoices.
The complaint relating to the Simpson Grierson invoices was then referred to a standards committee for investigation.
The plaintiff then filed an amended application for summary judgment regarding a) liability for the Simpson Grierson invoices and b) liability and quantum for the Clayton Utz invoices.
A stay of proceedings for the Simpson Grierson invoices was sought.
Section 161 of the Lawyers and Conveyancers Act provides that, if a standards committee gives notice to a practitioner or firm that it has received a complaint about the amount of a bill, no proceedings for the recovery of the amount of the bill may be commenced or proceeded with until after the complaint has been finally determined.
Justice Stevens held that s161 did not prevent the plaintiff from proceeding with the claims for liability for the Simpson Grierson invoices and both liability and quantum for the Clayton Utz invoices.
Summary judgment was granted on the plaintiff’s amended application.
The stay sought by the plaintiff on the quantum of the Simpson Grierson invoices was also granted.
Justice Stevens said the question was whether the stay provided for under s161 should, as a matter of interpretation and policy, preclude the court from determining the existence or otherwise of a contract of retainer. He held it should not, ruling that the issue of liability was an appropriate matter for the courts to decide, particularly when this could be done without in any way prejudicing the role of the standards committee or causing an injustice to the defendant.
Catriona MacLennan
LawTalk 745, 1 March 2010