Verma v Singh [2010] FJHC 446; HBC387.2006L (30 September 2010)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No: HBC 387 of 2006L

BETWEEN:

SURESH CHANDRA VERMA
Plaintiff

AND:

SURENDRA SINGH
Defendant

FINAL JUDGMENT

Judgment of: Inoke J.

Counsel Appearing: Mr R Krishna for the Plaintiff
Dr Sahu Khan for the Defendant

Solicitors: Krishna & Co for the Plaintiff
Sahu Khan & Sahu Khan for the Defendant

Date of Hearing: 3 May 2010
Date of Judgment: 30 September 2010

INTRODUCTION

[1] This is an application by the solicitor, Mr Verma, for payment of his legal fees by his former client, the First Defendant, Mr Singh.

THE ORIGINATING SUMMONS

[2] The Originating Summons sought the following principal relief:

• (1) An Agreement as to costs dated the 16th day of June 2006 and made between the Defendant and the Plaintiff be enforced.
  
• (2) The Defendant be ordered to pay to the Plaintiff the sum of $35,000 within 7 days from the date of the service of the order on him.
  

THE BACKGROUND FROM MR VERMA'S AFFIDAVIT IN SUPPORT

[3] On 16 June 2006 Mr Singh and his wife went and sought legal advice from Mr Verma regarding the estate of Mr Singh's late father. He told the solicitor that the trustees of his father's estate, who were two of his brothers, were secretly trying to sell off land belonging to the estate without his knowledge. He was concerned that his brothers would cheat him out of his share of the proceeds of sale. They discussed the solicitor's fees. They entered into a written agreement in which Mr Singh agreed to pay Mr Verma as an agreed fee of 20% of the sum recovered for Mr Singh from the proceeds of sale. If the sum recovered was $50,000 or less Mr Verma was not entitled to a commission; he would only get his usual fee. There were 8 beneficiaries but 4 siblings renounced their interests so Mr Singh's share was a quarter.

[4] Mr Verma made inquiries and found out that the land was being sold to a company called Nadiri Bay Resort Limited for USD$550,000 which was equivalent to FJD$955,192 in 2006. Mr Singh's share was therefore FJD$238,798. But his brother trustees told him that the sale price was only FJD$350,000 and he was to be paid a share of FJD$50,000.

[5] Mr Verma then issued proceedings in this Court in HBC 170 of 2006L on 23 June 2006 seeking an injunction restraining the proposed sale and a declaration that Mr Singh was entitled to a share of FJD$238,798. The matter came before Phillips J in September 2006 who impressed upon the parties to seriously consider settlement. So on 12 October 2006 Mr Singh, his wife and Mr Singh's brother trustees met in Mr Verma's office to discuss settlement. His brothers were prepared to pay Mr Singh $150,000 as his share and $20,000 for his legal costs. But Mr Singh was not happy with the offer and rejected it. Mr Singh also changed his solicitors. He went and saw the firm of solicitors Sahu Khan & Sahu Khan who wrote to Mr Verma on 24 November 2006 advising Mr Verma that Mr Singh had instructed them to take over his case from him. The new solicitors gave an undertaking to pay Mr Verma's reasonable costs incurred up to that date. The letter was accompanied by a written request and authority to Mr Verma to forward all documents in action HBC 170 of 2006 to his new solicitors. Sahu Khan & Sahu Khan took over the matter and on 7 December 2006, the parties entered into a deed of settlement which was eventually made an order of this Court in action HBC 170 of 2006. Mr Singh was to be paid FJD$119,399 as his share and $5,000 for legal costs from the sale proceeds.

[6] After Mr Singh changed solicitors, Mr Verma wrote on 30 November 2006 to the solicitors acting for Nadiri Bay Resort Limited claiming that based on the figure that the parties nearly agreed upon on 12 October 2006, he was entitled to his fee of $35,000 plus disbursements. Mr Verma also wrote along the same lines to the solicitors for the trustees on 30 November 2006.

THE AGREEMENT FOR MR VERMA'S FEES

[7] The terms of the Fee Agreement of 16 June 2006 in respect of Mr Verma's fees were as follows:

That I have no money to pay your fees. I agree with you as follows:

(1) To pay as agreed fee in the matter – 20% (twenty percent) of the sum recovered as my share in the proceeds of sale of the said property.

I agree and authorise you to deduct the same from the sum recovered. The same is to be paid first out of the proceeds or monies recovered.

(2) If the sum recovered is $50,000 (Fifty thousand dollars) or less there will be no commission payable, save your usual fee.

I declare that this Agreement is for valuable consideration and is irrevocable by me without your written assent.

I declare that I have entered into this Agreement voluntarily of my free choice and in presence of my wife.

I further declare that this Agreement will be sufficient Authority to you from me to seek and obtain payment or release of funds/monies coming to my share pursuant hereof from the said Tarseem Singh & Jaswant Singh or from Purchasers of the said land NADIRI BAY RESORT LIMITED or their Solicitors or whoever.

[8] The original of the Fee Agreement tendered into Court was signed by Mr Singh and his wife and Mr Verma.

MR SINGH'S AFFIDAVIT IN REPLY

[9] Mr Singh admitted in his affidavit filed on 18 December 2006 that he did discuss with Mr Verma his fees but he understood that Mr Verma's estimate was a fee of up to a maximum of $7,000 from the issue of the Writ to the date of trial and if the matter was to settle Mr Verma would charge a proportion according to the work done. He also said that the Fee Agreement was not read or explained to him but he signed it because Mr Verma asked him to. He and his wife were not educated people and someone would have to explain the document to them in Hindustani before they understood it. No one did. He was only given a copy of it after 13 October 2006 and that copy was only signed by him and his wife and not by Mr Verma. It was only when his new solicitors explained the document to him that he understood what he had signed. He did not agree with it.

[10] He denied ever being informed that the trustees were prepared to pay $150,000 for his share and $20,000 for legal costs. He would have accepted it without hesitation. His new solicitor wrote to Mr Verma to tell him that no such offers were ever put to him and that instead Mr Verma was telling him that the trustees were only offering $50,000. He explained why he changed solicitors. He and his wife paid a surprise visit to Mr Verma's office and found out that Mr Verma was having discussions with the trustees and the land sales agent. He no longer trusted Mr Verma.

MR VERMA'S RESPONSE

[11] In his affidavit filed on 11 January 2007, Mr Verma denied telling Mr Singh that the maximum fee up to trial was $7,000. He said the only arrangement was that contained in the Fee Agreement which was read by Mr Singh's wife before they both signed it. There were several copies made and he signed some of the copies as a party.

HEARING OF THE SUMMONS

[12] At the commencement of the hearing Dr Sahu Khan sought directions under O 28 r 5 of the High Court Rules 1988 to call oral evidence. I did not think it was necessary so I directed that the hearing proceed.

[13] Both counsels filed written submissions and made oral submissions for which I am grateful.

CONSIDERATION OF SUBMISSIONS

[14] Mr Krishna relied on s 77(1) and (2) of the Legal Practitioners Act 1997 which provides:

77. - (1) A practitioner may make a written agreement with that practitioner's client in relation to the amount and manner of payment for the whole or any part or parts of any past or future services fees charges or disbursements in respect of business done or to be done by such practitioner, either by a gross sum or otherwise howsoever.

(2) A client may apply to the Court or a Judge thereof for a review of any such agreement and, if in the opinion of the Court or Judge such agreement is unreasonable, the amount payable thereunder may be reduced or the agreement cancelled and such costs shall be payable or shall be determined in such manner as to the Court or Judge may seem fit. The Court or Judge may also make such order as to the costs of such review as to the Court or Judge may seem fit.

[15] Clearly Mr Verma has the right to sue on the Fee Agreement of 16 June 2006.

[16] I find it not necessary for me to decide whether it was enforceable or not because what actually happened was not covered by the Fee Agreement. My interpretation of the Fee Agreement is that Mr Verma was to be paid the agreed fee only if he completed the matter, that is to say settled it or obtained a judgment in Mr Singh's favour. The Agreement did not cover the situation where he did not complete the matter before Mr Singh changed solicitors.

[17] The Fee Agreement was drawn up by Mr Verma. Any shortcomings in it must be worn by him. He is therefore not entitled to the $35,000 fee.

[18] Mr Singh is not obliged to retain Mr Verma if he changed his mind. But he must pay Mr Verma reasonable remuneration for the work he had done. Mr Verma had done preliminary inquiries and issued the Writ. Mr Singh does not deny most of these attendances. He swore in his affidavit that he understood Mr Verma to have told him that his fee was to be no more than $7,000. I think he should be held to what he swore in his affidavit. I therefore order that he pays Mr Verma $7,000 as reasonable remuneration.

COSTS

[19] I think the Defendant has been most unreasonable in not making an offer for payment of Mr Verma's fees. I think he should pay Mr Verma's costs of this action. There had been various attendances, an interim order was sought and granted, substantial affidavits have been filed and a court hearing took place. I think costs of $2,000 is justified and I order accordingly.

ORDERS

[20] The Orders are therefore as follows:

1. The Defendant shall pay to the Plaintiff the sum of $7,000.
   
2. The Defendant shall pay to the Plaintiff his costs of this action of $2,000.
   

100. All payments are to be made within 14 days.
     

Sosefo Inoke
Judge