Privy Council Appeal No. 13 of 2003
(1) Kenneth L. Kellar and
(2) Carib West Limited Appellants
Stanley A. Williams Respondens
THE COURT OF APPEAL OF THE
TURKS AND CAICOS ISLANDS
JUDGMENT OF THE LORDS OF THE JUDICIAL
COMMITTEE OF THE PRIVY COUNCIL,
Delivered the 24th June 2004
Present at the hearing:-
Lord Hope of Craighead
Lord Scott of Foscote
Dame Sian Elias
[Delivered by Lord Carswell]
"the overwhelming success of Williams on all grounds in having Kellar's position rejected by the Court and Williams position fully endorsed by the Court, together with numerous findings of credibility against Kellar and in favour of Williams."
It was claimed on behalf of the appellant that this was evidence of the existence of an arrangement that a higher fee would be charged in the event of success, which constituted an unenforceable conditional fee agreement. It should be mentioned at this point that the brief fee referred to was not the same as a separate and specific fee paid to counsel conducting the case on the instructions of the attorneys. The profession is fused in the Turks and Caicos Islands, and it was the practice at that time to seek remuneration for litigation by charging a lump sum, termed a brief fee, in respect of the lawyers' conduct of the proceedings in court, together with hourly charges for preparatory and other work done. In November 1999 the Chief Justice ruled in another matter that it was not legitimate to seek both brief fees and hourly charges in such a way as to involve double charging. In his judgment in the present case he observed that the import of this ruling appeared to have been misunderstood by the respondent or his attorneys.
"Bills of cost previously prepared in my office, based on my agreement with Stanley, have been calculated on the basis an hourly rate of $350 plus brief fees. However, with a view to simplifying the procedure, and to make your consideration of the bills easier (as well as the Court's if that becomes necessary), I propose to submit revised bills based on time alone and agreed hourly rates.
My firm's hourly rates have increased over time and I have applied different rates to different matters, with the highest rate always being applied to commercial matters and cases such as those here. Where in the past fees recovered on taxation have included brief fees, that has increased the effective hourly rate in some cases quite considerably. Also, I believe that there is a case for higher hourly rates in the Court of Appeal and Privy Council, but for present purposes have not made that distinction."
The letter asked the appellant's attorneys to agree schedules of hourly rates for work done by specified persons in the respondent's attorneys' firm.
"2. Particulars of the agreement which I have had with Richard Savory since his firm Savory & Co. began representing me in these proceedings are as follows:
(a) The firm's fees would be such as were normally charged by Savory and Co. from time to time in commercial cases before the courts of Turks & Caicos.
(b) At the time we first made our agreement, I understood that lawyers generally followed the Bar Association Scale of Minimum Fees which had been in existence since 1980, as applied by the Court from time to time. In relation to this case, I understood that Savory & Co. would charge for time spent by its attorneys and law clerks at hourly rates according to the qualifications and experience of the person concerned, but that in relation to preparation for and attendance at Court, fees would be charged on the basis of a reasonable 'brief fee' determined according to a number of factors, including the complexity of the matter, the expertise and experience of the attorney, the length of the trial, the number and importance of the documents involved, and the amount of money involved. I understood that the common practice was for the amount of the brief fee to be arrived at after the trial, when all the factors involved were able to be taken into account, and that the brief fee so determined would be either agreed with the other side or assessed for reasonableness on a taxation. I understood that fees for cases in the Court of Appeal and Privy Council would be higher than those in the Supreme Court. In or about April last year, Mr Savory informed [me] that there were new Supreme Court Rules, and that the Chief Justice had ruled in another case that unless the amount of a brief fee had been specifically agreed beforehand, such a fee could not be claimed, and that all attendances should be charged on a time-spent basis. I agreed that instead of proceeding on the previous system which allowed for a substantial brief fee to be charged in long and complicated trials, Savory & Co. would charge the whole matter on the basis of time-spent by its lawyers and law clerks. I agreed that it was proper to charge higher hourly rates for preparation for and attendance at court. We agreed that the hourly rates to be charged would be those agreed to by the other side or, if not agreed, as approved by the Court.
* * * * *
(e) It was understood that although I would probably not be able to pay all of Savory & Co's fees and charges as and when rendered, I would make payments on account when I could afford to. Altogether, I have so far spent nearly $65,000 on account of Savory & Co's fees and expenses. I expected to have to pay Savory & Co. even if we were not successful, although I knew I had a strong case and was always confident of winning. The only question in my mind was the extent to which Mr Kellar would go in dragging the matter out."
"4. In relation to the first matter, as is mentioned in paragraph 2(b), the new arrangement made with Savory & Co. was in or about April 2000, which was after the decision had been rendered by the Privy Council. There was therefore no question when coming to that new agreement as to what fees I would pay Savory & Co. if I had lost.
5. In relation to the second matter, it was my understanding up until the Privy Council's decision that if I lost I would have to pay Savory & Co. for time spent at its normal hourly rates for commercial litigation, plus any brief fees that might be charged (always expecting the same would be reasonable). Indeed, when in London immediately after the Privy Council hearing Mr Savory and I were discussing the case and I mentioned then that if for some reason the decision went against me I would have to sell a significant amount of my property to meet Savory & Co.'s costs and the costs awarded to Kenneth Kellar."
(i) whether the taxing party is entitled to tax costs when no fee notes have been rendered to him by his attorney;
(ii) what is the nature of the agreement between the receiving party and his attorney and can that be construed/described as a conditional fee agreement;
(iii) are conditional fee agreements allowable within the Turks and Caicos Islands.
On the first issue the registrar held that the lack of fee notes did not prevent the respondent from having his costs taxed. This ruling was not strenuously contested on appeal and is not the subject of any issue in the appeal before the Board.
"1. The attempted alteration of the alleged fee paying agreement was ineffective.
2. On a balance of probabilities, due to the conflicting evidence it is impossible for me to determine the precise nature of the fee paying agreement in this matter.
3. I accept that Mr Williams expected to pay Savory and Company even if he were not successful. In attempting to determine the level of the cap for indemnity principle purposes I made a finding that Mr Williams had a liability to Savory and Company up to the level of the monies he had already paid on account of costs. I also found that it was impossible for me to ascertain what if any additional liability Mr Williams has to Savory and Company.
4. There is insufficient evidence for me to infer that there was a conditional fee agreement in place."
He went on to hold obiter that conditional fee agreements were not permissible and hence were unenforceable in the Turks and Caicos Islands. For reasons appearing later in this judgment their Lordships do not propose to express an opinion on the correctness of this part of his ruling.
"In an action between Savory & Co. and Mr Williams for their fees for work in fact done in respect of these matters, I see no reason why the firm could not claim on a quantum meruit notwithstanding any uncertainty as to the hourly rate or whether court work would be remunerated on a brief fee or an hourly rate or some combination of both. I consider, therefore, that the appropriate cap for the purposes of the application of the indemnity principle is the amount that the firm would have been paid on a quantum meruit, assessed as at the time the work was performed."
He ruled accordingly on the review of taxation, but made no order as to the costs of the hearing before the registrar or the review.
(a) the taxations should proceed on the basis of the original agreement as varied;
(b) alternatively, if the Chief Justice's ruling was correct, they should proceed on the basis of the original agreement.
(a) the variation of April 2000 constituted a conditional fee agreement, which should not be enforced on the ground of public policy;
(b) alternatively, the variation agreement was void for want of consideration;
(c) the original agreement was itself a conditional fee agreement;
(d) alternatively, it was too uncertain to be enforced, and accordingly the bills presented under it could not be taxed and there was no basis for a quantum meruit.
A large part of the argument presented by Mr Griffiths for the appellants was founded on the premise that the lawfulness of the fee agreement was rebutted on examination of the facts by the raising of an issue by the appellants that it was unlawful, with the consequence that the respondent then had to shoulder the burden of proof that the fee agreement was not a conditional fee agreement and was not unenforceable on that ground.
"But, while there is, therefore, no concluded contract as to the remuneration, it is plain that there existed between the parties a contract of employment under which Mr Way was engaged to do work for Mr Latilla in circumstances which clearly indicated that the work was not to be gratuitous. Mr Way therefore is entitled to a reasonable remuneration on the implied contract to pay him quantum meruit."
This situation is classified in Chitty on Contract, 29th ed, (2004) vol 1, para 29-071 and Anson's Law of Contract, 28th ed, (2002) p 649 as one of those in which the person who carries out the work is entitled to payment on the quantum meruit basis.
"... the mere non-acceptance by a defendant that an agreement between the complainant and his solicitor is a proper private fee agreement would not of itself be sufficient to call for evidence from the complainant. The defendant must show that there is a genuine reason for believing that it is not a proper private fee agreement before the complainant should need to consider adducing evidence to support the presumption in his favour."