Minkin v Cawdery Kaye Fireman & Taylor
| Jurisdiction | England & Wales |
| Judge | Mr Justice Cranston |
| Judgment Date | 07 February 2011 |
| Neutral Citation | [2011] EWHC 177 (QB) |
| Docket Number | Case No: QB/2010/0589 |
| Court | Queen's Bench Division |
| Date | 07 February 2011 |
[2011] EWHC 177 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ON APPEAL FROM THE SENIOR COURT COSTS OFFICE
Before : Mr Justice Cranston
Sitting With Assessors
Master Simons
Elizabeth King
Case No: QB/2010/0589
Joshua Munro (instructed by Cawdery Kaye Fireman & Taylor) for the Appellant
Mark James (instructed by Routh Clarke) for the Respondent
Hearing dates: 28 January 2010
Mr Justice Cranston:
Introduction
This is an appeal from an Order of Master O' Hare sitting as a costs judge. Master O' Hare gave permission to appeal. It concerns the detailed assessment of costs payable by the respondent, Mr Gary Minkin, to his former solicitors, the appellants, Cawdrey, Kaye, Fireman & Taylor ("the firm"). The general issue the appeal raises is whether, during the course of litigation, solicitors can refuse to undertake further work unless the client pays outstanding fees, or an amount on account, especially if the amount is in excess of any estimate. In the present case the Master held that this constituted repudiation of the contract, which meant that the firm was not entitled to any fees once the client accepted that the contract was at an end.
Background
Mr Minkin was involved in matrimonial litigation with his wife, from whom he had separated. On 26 June 2009, Mr Minkin contacted Mr Philip Cooper, a solicitor at the firm. Mr Minkin wished the firm to represent him at a hearing on 28 July 2009. The hearing was the final hearing in relation to an Occupation and Non-Molestation Order, which Mrs Minkin had obtained on a without notice basis on 4 June 2009. The matter had been adjourned on 11 June. The order prevented Mr Minkin from attending the matrimonial home and from molesting Mrs Minkin. Mr Cooper said that the firm would be able to undertake this work. He said he would like to instruct counsel to advise in conference, and to represent Mr Minkin at the hearing.
Later that day, 26 June, Mr Cooper sent Mr Minkin an email which estimated the costs of instructing a junior barrister to represent him at a hearing on 28 July, with a trainee solicitor attending court to assist, as "likely to be £3,000 plus VAT". The email continued: "I doubt very much that we can do this cheaper and I understand it is a sizeable sum". As agreed Mr Minkin made a payment of £2,000 on account.
The firm's retainer letter, dated mid July 2009, was signed by Mr Cooper on behalf of the firm. It was headed "Non Molestation and Occupation Order", but there was no other indication of what it was undertaking to do. The firm estimated that, "our overall charges and expenses for this matter are likely to be £3,500 plus VAT [i.e. £4,025]. I will try and keep costs down as much as possible, hopefully to £3,000 plus VAT." The letter added:
"Any such overall step by step estimates are not intended to be fixed or binding and other factors may mean that the estimate will be varied from time to time. We will update you on any such estimates in writing at your request and will in any event inform you in writing if it appears that any previous estimates may be exceeded. Our invoice will also keep you informed of the level of charges being incurred on a monthly basis with a statement as to the actual level of charges incurred as against the relevant estimate. In any event we will communicate with you by telephone or in writing (including by email) when our charges have reached £3,500 and at increments of £1,000 thereafter".
The letter explained that fees and disbursements were payable even when not recoverable from the other party. Interim accounts were usually submitted on a monthly basis and a final account after completion of the matter. In accordance with the firm's usual policy, "we should be grateful if you would let us have the sum of £3,000 to be held by us on account of fees and disbursements to be incurred." On 15 July 2009, Mr Minkin signed the retainer letter, as requested.
Enclosed with the letter were the firm's standard terms of business, which were referred to in the letter. Clause 4 explains that estimates are a guide and there is no guarantee the final charge will not exceed the estimate because there are many factors outside the firm's control which have a bearing. Clause 5, "Billing arrangements", provides that to avoid costs rising to an unexpected level, the firm will usually submit regular interim accounts and a final account after completion of the matter. Clause 6, "Payment terms", reads that bills are payable on presentation and interest may be payable after 30 days on unpaid fees. Importantly it continues:
"6 Where we hold sufficient funds on your behalf and we have sent you an account, we will usually deducts our fees and disbursements from these funds. Where this is not the case, or where it is not possible (for example where the funds are required for some other purposes), our account will be due to us on receipt and you should make payment …
Unless otherwise stated our bills are payable on presentation …
If an account is overdue for payment, without reasonable justification, we may suspend or terminate our services to you …"
Payment on account is dealt with in clause 7 of the standard terms.
"7 In most circumstances, and invariably in matters dealt with by the firm's commercial litigation and family departments, we will ask you for a payment on account of anticipated fees and disbursements. Sometimes, we may ask for further payments on account as the matter progresses. We shall ensure that you have reasonable notice of our requirements as and when the need arises. Any delay in payment could have an adverse effect on a case and where that delay is without reasonable justification we reserve the right to stop work pending payment."
Pursuant to clause 13, "Termination of our engagement", a client can terminate an agreement in writing at any time, for example if the client loses confidence in the firm's work. On the other hand a firm can only cease acting for a client on reasonable grounds and reasonable notice.
"13 … We may only decide to stop acting for you on reasonable grounds and on giving you reasonable prior written notice."
The conference with counsel occurred on 15 July 2009. Afterwards, the firm undertook further work for the hearing on 28 July. However, the day before the hearing it was discovered that Mrs Minkin had left the matrimonial home and rented it to tenants. Mr Cooper discussed the position with Mr Minkin and corresponded with the tenants' agents. The hearing took place on 28 July 2009, as anticipated. The Occupation Order was dismissed because Mrs Minkin was no longer at the family home and therefore had no need for injunctive relief against Mr Minkin. However, Mrs Minkin applied for an adjournment of consideration of the Non-Molestation Order so as to obtain legal representation. The court agreed to an adjournment.
On 30 July 2009 the firm sent Mr Minkin what it described as "Re: Your Personal Affairs … To Our Professional Charges". On its face and in bold typeface it read: "This invoice is payable on presentation". It also advised Mr Minkin of his right to a detailed assessment of the Bill on the back of the invoice. The Bill was for £5,472.50. It gave credit for the £2,000 paid on account. £3,472.50 was said to be owing. On 3 August 2009 Mr Minkin telephoned Mr Cooper to say that he was not happy with the amount billed. Mr Cooper explained that the costs estimate had been exceeded largely as a result of an increase in work because Mrs Minkin had unexpectedly rented the matrimonial home. Mr Minkin said he could not pay the fees until he had a costs order against Mrs Minkin. Mr Cooper explained that the firm needed to be paid if Mr Minkin wished it to continue working. Later that day Mr Minkin agreed in an email to send the firm a further £1,000. In his evidence Mr Minkin says that this was what he thought Mr Cooper was referring to.
By an email in reply the same day Mr Cooper explained that the increase of £1445 over the original £3500 plus VAT was "caused largely by an increase in work by the fact that the tenants had been moved in". He added that at the start of the matter Mr Minkin had agreed to transfer at least a further £1000 on account by the end of July. Mr Cooper stated that the firm needed to be paid as matters proceeded. If Mr Minkin wanted the firm to continue acting for him then he would need to make arrangements to meet the interim fees.
Between 3 August and 17 August 2009, Mr Cooper carried out work on the case. He contacted the tenants' agent and Mr Minkin. On 17 August 2009 Mr Minkin sent the firm £1,000. The next day, 18 August, Mr Cooper sent Mr Minkin an email providing advice and asking for instructions. The email said:
"Thank you for provision of the £1,000 towards our bill. There now remains and [sic] outstanding balance of £2,472.50 excluding the work in progress."
Within the hour Mr Minkin emailed Mr Cooper instructing him to proceed with the possession action against the tenants.
On the evening of 19 August 2009 Mr Minkin visited the former matrimonial home. That was against Mr Cooper's advice. As a result, a complaint was made to the firm that Mr Minkin had threatened a sixteen year old girl, who was on her own at the time. In an email on 20 August 2009, Mr Cooper informed Mr Minkin of the complaint. He then recommended that counsel's opinion be obtained on possible possession proceedings. Mr Cooper also asked for the outstanding balance of the bill and for a further payment on account, in particular to obtain Counsel's opinion and to initiate possession proceedings against the tenants of the former matrimonial home. "Currently the balance on the outstanding invoice is...
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