Dr Zoe Vlamaki (Claimant v Sookias & Sookias (Defendants
| Jurisdiction | England & Wales |
| Judge | Mr Justice Walker |
| Judgment Date | 20 November 2015 |
| Neutral Citation | [2015] EWHC 3334 (QB) |
| Docket Number | Case No: QB/2015/0056 |
| Court | Queen's Bench Division |
| Date | 20 November 2015 |
[2015] EWHC 3334 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
On appeal from the order of Master Campbell
in the Senior Costs Office 2 February 2015
giving effect to his judgment delivered on 15.12.2014
Case No: CC 1400428
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Walker
(sitting with assessor, Master Haworth)
Case No: QB/2015/0056
Mr Robin Dunne (instructed by Berlad Graham LLP) for the claimant (respondent)
Mr Roger Mallalieu (instructed by Sookias & Sookias) for the defendant (appellant)
Hearing dates: 13 and 14 July 2015
A. Introduction and overview
This appeal from Master Campbell's order dated 2 February 2015 concerns two aspects of a preliminary determination made by him in a reasoned judgment handed down on 15 December 2014. Permission to appeal was granted by Holroyde J on 30 March 2015. As explained below, both aspects turn on the true meaning of written documents, being a solicitors' retainer as regards the first aspect, and a letter written by the solicitors on the second aspect.
The claimant ("Dr Vlamaki") had previously been the client of the defendant firm of solicitors ("Sookias & Sookias") in relation to three matters. The preliminary determination was that Dr Vlamaki could proceed with her application for invoices rendered to her by Sookias & Sookias, concerning those three matters, to be the subject of assessment under s 70 of the Solicitors Act 1974.
The first aspect on which Sookias & Sookias appeal affects most, but not all, of the invoices. Sookias & Sookias say that, as regards what I shall call "the alleged time bar invoices", s 70(4) prohibited an assessment. That subsection states that the power to order an assessment shall not be exercisable on an application for assessment made by the party chargeable with "the bill" after the expiration of 12 months from the payment of "the bill". It is common ground that in order to be a "bill" for this purpose an invoice must be final in relation to the work that it covers; for convenience the parties have referred to such an invoice as a "statute bill". The master upheld Dr Vlamaki's contention that the alleged time bar invoices had not, at the time of payment, constituted statute bills, with the result that the time bar under s 70(4) did not bite. On this aspect the crucial ground of appeal now advanced is that the master ought to have held that Sookias & Sookias were contractually entitled to render statute bills while work was in progress. The master's conclusion was that the retainer did not permit this, and if that conclusion is upheld then Sookias & Sookias no longer contend that later conduct of the parties gave rise to a contractual agreement for statute bills while work was in progress.
The second aspect on which Sookias & Sookias appeal affects all the invoices. Sookias & Sookias say that if the master was right to hold that the alleged time bar invoices were not statute bills at the time of payment, then none of the invoices were statute bills. The result, say Sookias & Sookias, is that success by Dr Vlamaki on the first aspect has the necessary consequence that the present proceedings are premature, and that no further proceedings can be brought until after delivery of a statute bill for the relevant matter. In answer, Dr Vlamaki placed reliance on the fact that on 4 October 2013 a letter ("the October 2013 letter") was written by Sookias & Sookias stating that even if there was unbilled time "… we are not proposing to invoice this and therefore there are no further sums due …".
The master did not accept Sookias & Sookias's arguments on this aspect. He held that the last bill submitted as part of a series could be treated as "a final bill rendered on the termination of the retainer". As to what was the last bill in relation to each matter, the master in paragraph 51 of his judgment quoted what had been said in the October 2013 letter, which he considered to indicate that:
Mr Sookias was afforded an opportunity to render fresh bills in substitution for the bills delivered on account, but did not avail himself of his chance to do so.
The appeal before me was argued by counsel who had appeared below, Mr Robin Dunne for Dr Vlamaki and Mr Roger Mallalieu for Sookias & Sookias. After hearing Mr Mallalieu's submissions that contractual provisions in the retainer in relation to each matter provided for interim statute bills, I concluded that I was not persuaded by those submissions, and gave a short judgment explaining why it seemed to me that Master Campbell had been right to hold that the contract of retainer did not permit such bills. In section B below I give my considered reasons for that conclusion.
In the light of my conclusion on the contractual provisions, these being identical in each of the three retainers, Mr Mallalieu did not contend that there was any other basis on which he could support the appeal on the first aspect. When Mr Mallalieu turned to the second aspect of the appeal, I sought clarification as to Dr Vlamaki's stance. Permission to appeal had been sought by Sookias & Sookias, and had been granted by Holroyde J, on the footing that the master concluded that the bills collectively, together with the letter of the 4 th October 2013, could be regarded as a single bill with an effective date of 4 th October 2013. This had indeed been Dr Vlamaki's primary answer on the second aspect. However Mr Dunne's skeleton argument for the hearing before me, while saying that "[as] before, [Dr Vlamaki] submits that [Sookias & Sookias's] objection is not sustainable", went on to say that the master had not in fact held that the October letter had converted the earlier invoices into statute bills. The skeleton argument then identified, and relied upon, other grounds on which the master had justified his conclusion.
I asked Mr Dunne whether in these circumstances Dr Vlamaki sought to argue that her primary answer below, even though not adopted by the master, was right. After taking instructions Mr Dunne stated that she did, and would seek any necessary extension of time to enable this argument to be run. Mr Mallalieu strongly opposed the grant of any such extension. I concluded that I would allow argument on the point, reserving the question of an extension of time until I had considered the argument on the second aspect as a whole.
In section C below I set out the conclusion that I have reached on the second aspect. For the reasons given in section C, I conclude that while I would grant an extension of time, if needed, for a respondent's notice in this regard, I conclude that on this second aspect the appeal succeeds.
B. The first aspect: interim statute bills?
A solicitor's retainer is an example of what, although known as an "entire contract", is perhaps better described as involving an "entire obligation": a solicitor can generally only claim remuneration when all work has been completed, or when there is a natural break. That, however, is subject to any agreement to the contrary. As is pointed out in Cook on Costs 2015 at para 2.4, solicitors have always been free to agree terms with their clients in respect of both non-contentious and contentious business, and in recent years solicitors have appreciated the desirability of including provision for stage payments among such terms. In that regard, paragraph 2.5 points out advantages and disadvantages of non-statute interim bills "on account". Among other things, such a bill need not be the final quantification of all work included in it. Moreover such an interim bill, even though it is not a statute bill, may have a significant consequence as regards money received from the client and held in the solicitor's client account. This is that, provided that the interim bill does not go beyond the amount of costs and expenses incurred to date, it entitles a solicitor to transfer money from the client account into the office account in payment of the bill.
However, a stage may come where a solicitor wishes to pursue the client for payment, in which event a contractual entitlement to render interim statute bills will be desirable. Those bills cannot be the subject of subsequent adjustment by the solicitor: they must be complete self-contained bills of costs for the period that they cover.
For present purposes, relevant legal principles concerning statute bills are helpfully summarised by Spencer J in Bari v Rosen [2012] EWHC 1782 (QB); [2012] 5 Costs L.R. 851:
13 … Where a solicitor issues to his client a bill of costs which complies with the requirements of the Solicitors Act 1974 it is known colloquially as a "statute bill". Section 70(1) of the Act gives the client the right, within one month of delivery of the bill, to apply to the High Court for the bill to be assessed, without requiring any sum to be paid into court. If no such application is made, the absolute right to assessment is lost. However, if a statute bill has not been paid and the client applies to the High Court for assessment of the bill within twelve months from delivery of the bill, the combined effect of s 70(2) and (3) is that the High Court may allow assessment (and I am advised by my assessors usually does allow assessment), on such terms as the court thinks fit. If the bill remains unpaid and twelve months have expired from delivery of the bill, the court may only order an assessment if special circumstances are shown.
14 The position after a statute bill has been paid is somewhat different. The client still has the absolute right to an...
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