England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		The Rolls Building 7 Rolls Building Fetter Lane London EC4A 1NL
		23 July 2014

1. HIS HONOUR JUDGE SIMON BARKER QC: The application before me is for an order striking out a defence on the basis that it discloses no reasonable grounds for defending the claim, alternatively for summary judgment on the basis that the defendant has no real prospect of successfully defending the claim and there is no other compelling reason why the case should be disposed of a trial.
2. The claimant, Mr Kuldip Singh QC, is a barrister who practises at Serle Court Chambers in London. The defendant, Mr Philip Sinel, was an English barrister but since 1987 he has been a qualified advocate in Jersey and is sole principal of the eponymous firm, Sinel Advocates.
3. The claim is for fees charged by the claimant in respect of work done over the period 8 January 2007 to 30 April 2007. In relation to a contentious matter referred to by the parties as "the Trant matter". The nature of the work involved advising and drafting in response to instructions on an ongoing basis. The fee claimed is entirely unpaid. It is £108,694. The defendant accepts that if he is under a legal obligation to pay for the work done, a reasonable fee would be some £46,000. However, his primary defence is that the relationship by which he instructed the claimant was not contractual, either express or implied, and that the claimant's fee is an honorarium which is not legally enforceable against him and he chooses not to pay a penny.
4. The circumstances in which the defendant came to instruct the claimant are set out in a statement of Mr Steven Whitaker and briefly in the defendant's statement as well. Mr Whitaker says that in May 2006 the defendant telephoned Serle Court Chambers and spoke to him about engaging the claimant's services. The Trant matter was identified and an hourly was agreed at £500 per hour. Mr Whitaker says that the defendant agreed to pay the claimant's fees. Mr Whitaker says that he was aware that the terms of Annexe G1 to the Code of Conduct to the Bar in England and Wales (8^th Edition), the provision which was in force in 2006 and 2007, did not apply to the engagement because it concerned only the terms on which barristers offered their services to solicitors and was of no application to engagements by foreign lawyers. Mr Whitaker also says that there were no "usual terms of engagement" in place at Serle Court at that time concerning engagement by foreign lawyers.
5. The defendant says, in his witness evidence, that he did not say to Mr Whitaker that his firm or he would be liable for and would pay Counsel's fees. He admits that, on instructions from his clients, he agreed an hourly rate of £500. However, he says, he was aware of Annexe G1 and assumed that those would be the terms of engagement. In addition, he says, he was never provided with alternative terms.
6. On the face of it, in the context of a summary judgment claim or strike-out application, founded on the incontrovertible existence of an oral agreement, this appears to give rise to triable issues: (1) Did the defendant agree that he would be liable for the claimant's fees personally or (inaudible)? (2) did the terms of Annexe G1 apply?
7. The second issue can be readily resolved. By definition, Annexe G1 did not apply to the engagement because it is the product of an agreement between the Law Society and the Bar Council applicable to the terms on which barristers offer their services to solicitors. The defendant is not and was not a solicitor.
8. It is also clear that the defendant had, at best, an imperfect understanding of Annexe G1 because his evidence (that he did not agree to be liable for the claimant's fees and he assumed that Annexe G1 would apply) is at odds with paragraph 4 of Annexe G1, which provides that, except for publicly funded cases, a solicitor is personally liable as a matter of professional conduct for the payment of a barrister's fees whether or not he has been placed in funds by his lay client. This paragraph also emphasises the domestic limitation of Annexe G1.
9. As to the first issue, the claimant points to correspondence after the conclusion of the work by which the defendant took issue only with the amount of fees, not liability for the fees, and to contradictions and inconsistencies between the defendant's evidence, the defendant's defence and the defendant's responses to a request for further information. All of that may be so, and it may incline me even to think that the defendant's case is weak, but even if that were so, it would not suffice if there was a genuine triable issue. In my judgement, the question of whether the defendant did agree that he would be liable for the claimant's fees is such an issue because the basis for the alleged contract is a conversation between the defendant and Mr Whitaker as to the content of which there is a crucial conflict in the evidence. Thus, the question of whether or not there was an express agreement is matter for resolution at a trial.
10. However, that does not dispose of the claimant's application because his claim is put in the alternative, on the assumption that there was no express contract, on a quantum meruit basis by reference to two further facets of the law of obligations, unjust enrichment and implied contract. I must therefore return to the factual narrative.
11. Between May and December 2006 the defendant instructed the claimant in the Trant matter and in due course the claimant rendered fee notes which, it is common ground, became payable after three months. The defendant questioned some of the claimant's fees as excessive, a reduction was agreed, and the claimant's reduced fees were paid by the defendant.
12. On 8 January 2007 the defendant sought to further instruct the claimant in the Trant matter. The parties refer to these instructions and the work done as Part 2 of the Trant matter. Because there had been a challenge to the claimant's fees under Part 1 of the Trant matter, the claimant provided pre-estimates, or in his phrase "guesstimates" - as to the time that specific work was likely to take. There were two aspects to the work, one relating to English law in respect of which the claimant was instructed by the defendant and Withers jointly, and the other relating only to Jersey work in respect of which the claimant was instructed by the defendant alone.
13. By this time, the claimant was of course familiar with the Trant matter. It appears from uncontentious material in the evidence that, in addition to being important to Trant and Trant's directors, it was quite a heavy case; for example there is a reference to 48 lever arch files of documents. The defendant's instructions to the claimant included advising in relation to an appeal in Jersey, drafting the appeal notice, and drafting written submissions (referred to as "contentions"). There are records of e-mail and telephone discussion of time pre-estimates given by the claimant, and of several long telephone conferences and written advice.
14. The claimant says he gave pre-estimates save when the circumstances prevented such a course, for example urgent instructions or expanding or changing instructions at short notice. The claimant also did some preparatory work on an aspect on which he was to be briefed, but in the event the advocacy was undertaken by Withers; nevertheless, the claimant had done preparatory work on instructions. Evidence of all of this given by the claimant is unchallenged.
15. Over the course of the Part 2 engagement in the Trant matter, the claimant rendered four invoices, the last of which, for £875, is uncontentious as to quantum. In respect of the first two invoices, which are for work to be apportioned between the defendant and Withers, the claimant's invoices to the defendant, after apportionment, total some £25,400 and the defendant considers that the reasonable and appropriate figure, if he was liable, would be something in the order of £11,300. In round terms, the defendant contends that there should be a reduction in excess of £14,000.
16. The principal invoice covers the period 26 January 2007 to 12 April 2007 and, on the claimant's time basis, the fee is some £82,375. The defendant says that, if he is liable, the reasonable and appropriate fee is in the order of £34,500. In other words, the defendant contends that the claimant is charging more than double the reasonable and appropriate fee for the work.
17. Although the battle lines are now drawn as to quantum, the claimant and the defendant blame each other for the late stage at which this has occurred. The claimant complains that some of the defendant's complaints, for example that the narrative on the fee notes was too concise and repetitive, was made for the first time during the hearing. He says there were numerous opportunities and this and any other points could have been made; the claimant puts forward - as a latest starting point for objections - the date of 14 January 2008, on which day he provided a file containing his estimates, his summaries of work done, and his fee notes, and he invited the defendant to respond.
18. The defendant makes the point that, over the course of 2010, he offered a meeting and twice offered a mediation to resolve issues which, as from November 2009, included liability as well as quantum.
19. The defendant, or more accurately Mr Simon Edwards, the defendant's counsel, also makes the point that the claimant chose not to commence proceedings until more than six years after the work in question was finished. Mr Edwards submits that until this point there was nothing for the defendant to respond to.
20. Against this background, in the ordinary way the defendant would not escape liability on a quantum meruit basis under the law of obligations. He had asked the claimant to carry out work; he had accepted and used the claimant's services; and, he had used the product of the claimant's work. There is no suggestion by the defendant that the claimant's drafts for the Jersey court were not used, or that his written and oral advice was not conveyed to the lay clients and understood, or that there was any fault with the quality of the claimant's work.
21. Mr Edwards submits that the defendant has not benefited from the claimant's work. That submission is untenable. Mr Edwards conceded that the defendant had been paid for his work on Part 2 of the Trant matter. It is evident that had the claimant's work not been available via the defendant to Trant and its directors, deadlines would not have been met and the defendant would have received much less or at least some less remuneration himself. As the claimant submits, benefits in this context need not be correct.
22. Thus, in the ordinary way, the claimant would be entitled to an objectively assessed reasonable fee on a quantum meruit basis. In the circumstances of a case where an hourly rate has been agreed, the issue is objective evaluation of a reasonable amount of time for the work to be done.
23. However, Mr Edwards submits that this is a case outside the ordinary because the service provider is a barrister and his remuneration, at least at the relevant time, was regarded as an honorarium. Mr Edwards refers to Halsbury's Laws Vol 65 on Legal Professions at paragraph 1305 and Note 4 thereto. Mr Edwards submits that, until changed by the Bar Code of Conduct with effect from 1 February 2013, the default position was one of no contract between barrister and solicitor. Paragraph 1305 of Halsbury's Laws starts with the proposition that "If there is no advance agreement between a barrister and a solicitor that the barrister's retainer is to be contractually binding, there is no contractual relationship between a barrister and either his instructing solicitor or the lay client upon which a claim may be brought to recover fees". Note 4 refers to the importation of the honorarium doctrine from Roman Law and yet the position of the doctrine in English law some 400 years ago (Davies' Reports, Preface of 1615).
24. Referring to more modern authority, that is nearly 300 years later and some months before the beginning of the Great War, Mr Edwards cites a short passage from the Judgment of the Court of Appeal given by Swinfen Eady LJ in Wells v Wells [1914] P 157 in which Swinfen Eady LJ, giving the judgment of the Court, said at pp 162-3 :

"It is settled beyond all question that counsel's fee is not a debt but an honorarium, the fees are payable as a matter of honour and not of legal obligation."

In that case, in divorce proceedings a wife sought unsuccessfully to enforce an order for alimony pendente lite obtained against her barrister husband against monies held on account of fees by a solicitor.

25. Of course all this is about the relation between a barrister and instructing solicitor, which is not this case.
26. Further, and with effect from 1 January 1991, Parliament declared, by section 61(1) of the Courts and Legal Services Act 1990, that "Any rule of law which prevents a barrister from entering into a contract for the provision of services as a barrister is hereby abolished".
27. The claimant submits that since the 1990s, if not earlier, it has been commonplace in the fields of Chancery and commercial law for foreign buyers to instruct barristers and for the basis of such instruction to be contractual, express or implied. That accords with Mr Whitaker's evidence and with the evidence of Mr Adrian Vincent, Head of Policy and Remuneration at the Bar Council, which evidence is not challenged by the defendant. The defendant's evidence to the contrary, such as it is, is based on a misconceived understanding of Annexe G1 and what he describes as recollections of discussions over the years with more than one barrister.
28. Mr Edwards submits that it is not clear what, if indeed they existed, were Serle Court's terms of business with foreign lawyers. That is not correct as Mr Whitaker says in his evidence that there were no standard terms and that such contracts were made simply on the basis of an agreement to accept instructions and agreement of a fee or fee structure.
29. Mr Edwards also submits that, because there can be no contract, there can be no quantum meruit.
30. In my judgement, Mr Edwards submissions are wrong.
31. The circumstances of this case give rise to a classic engagement of the right to payment on a quantum meruit basis under the law of obligations. As to the quantum, the fact that the claimant's fee notes have been with the defendant for more than seven years does not go to the reasonableness of the fee itself. However, on the material before me, it is clear that the preparation, advice and drafting would justify a substantial fee.
32. Mr Edwards gives as a good example of why it is unsafe, or would be unsafe, to accept the fee sought by the claimant that the claimant had characterised the defendant's original draft amended order of justice as useless and that as neither the defendant's original draft nor the claimant's re-draft are in evidence before the court, it would simply not be open to the court form a view as to what was involved in the claimant's work. Another example is that there was an element of last-minute or urgent work thrust upon the claimant in respect of which he was not able to provide an estimate, so there is no evidence as to interchange between the claimant and the defendant at the pre-work stage and, therefore, no guidance as to the likely commitment required or a reasonable fee.
33. The claimant submits that the sum claimed readily identifiable on an objective basis as reasonable and, moreover, that to order an inquiry would be contrary to the overriding objective.
34. In my judgement there is considerable force in the claimant's submission. In this context I remind myself of the decision in Re Loquitur Ltd [2003] EWHC 999 Ch where Etherton J, as he then was, declined - in a different case where an inquiry was sought in a much more substantial sum- to order an inquiry. There were two main reasons. The first was that the applicant seeking the inquiry had adduced no evidence to enable the court to estimate the sum in question (a provision for liabilities); the second was that an inquiry would be contrary to the overriding objective.
35. As to the first point, in the case before me there is considerable evidence going to quantum about the work required and undertaken. As to the second, the overriding objective has been redefined since 2003 and now includes the delivery of justice at proportionate costs as an express factor.
36. Having regard to the sum in issue and the cost of an inquiry, I propose to make an order that, subject to a reduction of 10% in respect of the contested sum, the defendant should pay the balance of the claim in addition to the sum accepted as reasonable by the defendant. That is rough justice but, as I see it, it accords with the overriding objective in what is a not insubstantial commercial dispute. As to interest, in my judgement, there is little to choose between the claimant's claim of interest at 3% until judgment and the defendant's proposal of 2% above base rate. The claimant's proposal has the advantage of simplicity. I propose to order interest at 3% until judgment.