Narayan v Public Employees Union [2011] FJHC 495; Civil Action 161.2006 (1 September 2011)

IN THE HIGH COURT OF FIJI’
AT LAUTOKA
CIVIL REGISTRY

Civil Action No. 161 of 2006

BETWEEN:

ADISH KUMAR NARAYAN of Yalalevu, Ba, Legal Practitioner practicing under the name and style of A K Lawyers.
Plaintiff

AND:

PUBLIC EMPLOYEES UNION a registered Trade Union under the Trade Union and the Trade Union Recognition Acts (Cap 96 and 96A) ad having its offices at 73 Edinburgh Drive Suva, Fiji.
Defendant

Before: Master Anare Tuilevuka
Counsel: AK Lawyers for the Plaintiff
: H.M. Rabuku – Glenvill Law Firm for the Defendant

Date of Ruling: Thursday 01 September 2011.

RULING

INTRODUCTION

[1]. The background to this case is set out in my ruling of 24 November 2009 and in Mr. Justice Inoke’s judgement of 04 February 2010 and of 08 April 2010. In my ruling of 24 November 2009, I had refused to grant summary judgement on the sum of $68,064.93 plus interest which the plaintiff was claiming. I gave judgment only on the sum of $39,000. This was a consent judgement based on a letter by the defendant that was exhibited in Court by Mr. Rabuku, the defendant’s counsel. That letter was an acknowledgement by the defendant union of its indebtedness to the plaintiff to the sum of $39,000 only.

[2]. Following my ruling, Mr. Rabuku went on to seek a stay of execution of the consent judgement. Inoke J refused that application as reported in his judgement of 04 February 2010.

[3]. Mr. Young also went on to seek leave to appeal my refusal of summary judgement and to seek a re-hearing. This too was refused by Inoke J as reported in his judgement of 08 April 2010.

[4]. On 13 May 2010, the matter was back before me for further directions. I directed that the plaintiff furnishes all his documents to the defendant within 21 days and, for the defendant to reciprocate 21 days thereafter. The matter was then adjourned to a hearing date to see if the plaintiff’s documents will substantiate the claim of $68,064.93 – and to consider the defendant’s position.

[5]. There appears to be no dispute that the plaintiff did in fact render to the defendant all the services for which the claim of $68,064.93 is made. Furthermore, the defendant has not alleged or raised evidence about any lack of skill or professionalism by the plaintiff or by any of his solicitors in the execution of these services.

[6]. The defendant has acknowledged owing to the plaintiff the sum $39,000 and on which a consent judgement had been entered. The plaintiff concedes in his submissions that the said sum of $39,000 is to be offset from his $68,064.93 claim which then reduces his claim to $29,064.93 plus costs of $5,500-00 (five thousand and five hundred dollars only) made up as follows:

		Photocopy	:	$ 300.00
		Court Fees	:	$ 150.00
		Trial & Solicitor’s Cost	:	$5,000.00
		Witness expenses for travelling and meal	:	$ 100.00
		TOTAL		$5,500.00

[7]. Hence, all that is required of the plaintiff is to clarify by documentary evidence how the sum of $68,064.93 accrued out of his attendances in all these matters. Once the plaintiff discharges this burden, the onus then shifts to the defendant to set out how it had arrived at the figure of $39,000.

AMBIT OF INQUIRY

[8]. I was particularly curious to know whether the sum of $39,000 in the consent judgement relates to the same matters on which the plaintiff bases his claim of $68,064.93.

[9]. At this point, I remind myself that the original affidavit of Mr. Narayan that was filed in support of the application for summary judgement contained evidence that the defendant union had in fact acknowledged the debt of $96,607.47. Below is an extract of my ruling of 24 November 2009 which records this:

Affidavit of Adish Kumar Narayan filed on 01st October 2009

2. This Affidavit of Narayan deposes that PEU is justly and truly indebted to his firm in the sum of $75,136.22 as at the 5th day of September 2009.

3. Narayan verifies the particulars in his Statement of Claim in paragraph 2 of his Affidavit. The Statement of Claim, filed on the 04th day of September 2009, alleges that Narayan’s firm had rendered various legal services to PEU. The claim further alleges that PEU had agreed with the rate for payment.

4. The Claim does not set out clearly when exactly PEU had agreed with Narayan’s rates. Were these quoted by Narayan to PEU at the outset or much later when Narayan rendered his Bill of Costs and Statements of Accounts to PEU?

5. In any event, it appears that PEU has paid Narayan some money towards settling fees and costs due.

6. Narayan pleads that some $68, 064.93 remains outstanding as at 24th October 2008. To this sum, he adds interest at 12% per annum from 24th October 2008 to 4th September 2008.

7. Annexed and marked "AKN-1" to Narayan’s Affidavit is a letter dated 5th September 2009 from his office to PEU attaching a Statement of Account of fees owing for various matters. The letter then encloses Narayan’s Memorandum of Costs totaling $96,607.47 in all PEU files. The letter then states: "Please note that the said payment has to be made by 4pm on 12th September, 2008 or we will have no option but to proceed with legal action to recover our costs".

8. Narayan also annexes to his Affidavit marked "AKN-2" and "AKN-3" two letters both dated 15th September 2008. AKN-2 is a letter from PEU signed by its then President, a Mr. Kautoga who (has since deceased) committing (sic) PEU to a first payment of $10,000 by Wednesday 17th September 2008, a second payment of $10,000 by Friday 26th September 2008, and weekly payments of $3,000 thereafter from 3rd October 2008 for the next 25 weeks or so until the debt is completed.

9. On my calculation, Kautoga’s commitment was to a debt of $96,500 to be paid by installments.

10. AKN-3 is a letter also dated 15th of September 2008 by Narayan. The letter was addressed to Mr. Viliame Kautia, Acting General Secretary, Public Employees Union stating the following:

"We acknowledge receipt of your letters dated 8th September 2008 written to Gledvil Law copied to us and the National President’s letter of undertaking dated 15th September, 2008.

Please note that we accept the undertaking to settle our outstanding fees in the manner proposed and look forward to the first payment on 17th instant"

11. Narayan deposes that PEU then made some part payments but then failed to honour its undertaking to completion.

12. Annexed to his Affidavit and marked AKN-4 is a letter he wrote dated 9th of December 2008 to Kautia stating inter alia that "PEU has not complied with its undertaking of payment as per letter dated 15th of September, 2008". That is followed by a reminder that PEU owes a balance of $68,064.93 in fees outstanding and that if PEU did not settle it within seven days, Narayan would institute legal proceedings.

13. AKN-5 is another letter dated 20th February 2009 by Narayan to a Mr. Malakai Kaitu’u, SIRO, PRU in which Narayan again reminds Kaitu’u that some $68,064.93 remains outstanding in unpaid fees.

14. AKN-6 is a response dated 25th February 2009 by S. Tagilala & Co. Writing on PEU’s behalf. In that letter, S. Tagilala pleads with Narayan to "consider receiving monthly commitments from PEU effective immediately on flexible payment amounts due to inherent financial constraints". Notably, that letter was copied to Kautia.

15. In his response to S. Tagilala (annexure AKN-7), Narayan seeks clarification on "what exactly would be the monthly payments and the timeline for such payments".

[10]. The following extract from Inoke J’s judgement of 05 February 2010 contains certain findings which set the ambit of my inquiry:

[20] The undertaking by the former President was accepted by the Plaintiff and a binding contract for repayment arose out of it. Part of the sum due under the contract was paid. The further correspondence from the Union’s consultant further supports what I find is an admission that the amount claimed is due. There can be no doubt in my mind that quantum cannot now be disputed.

[21] The Union’s position is aggravated further by its admission that $39,000 was owed to the Plaintiff and the entering into the Consent Order on that basis.

[22] I think the current application is misconceived. I think Mr. Rabuku has misunderstood the effect of the Master’s Ruling and the entering of the Consent Order. I am of the view that the only issue left open now is the verification by documentation of the balance due, that is to say, the amount claimed in the demand of 9 December 2008 of $68,064.93 less the amount consented to $39,000.

[23] The Union says that it has already paid $32,750. Mr. Rabuku argued that that amount could be included in the $68,064.93 that is claimed in this Writ. It is equally possible that none of that money has been paid in satisfaction of any of the current outstanding bills being claimed. That is why I believe the Master made the comments in paragraph 53 of his Ruling.

[24] The Plaintiff is confident that all the bills claimed have not been paid. His affidavits go into sufficient detail for the Union to check and verify against its own records. Instead, the Union now says, essentially, that it needs time to find the documentation to verify all those payments. And that has only come about following the Master’s Ruling in my view.

[25] If the former President did not have the powers as the General Secretary alleges, then that is a matter between the Union and its former President.

[26] Subject to what I say below, the view that I have come to is this: Liability is now admitted and the Union cannot now go back on the amount of $96,607.47 due under the payment arrangement agreed on 15 September 2008, the balance of which is now $68,064.93 which is the principal amount claimed in this action. It cannot re-open a challenge based on whether the work was done or not or whether it is of such a professional standard justifying the fees charged. The only issue now left open is quantum and only in respect of the balance left after deduction of $39,000. That much is clear from the Consent Order. So it is simply a matter of verification by documentation.

DISCUSSION

[11]. Ms Elizabeth Saverio is a law clerk in the plaintiff’s law firm. She has been managing all their litigation and billing work since she commenced work there in 2004. To the best of Saverio’s knowledge, the defendant union had been a client of the plaintiff’s since 2003. In 2008, the plaintiff ceased to act for the defendant union. The plaintiff then sent a letter dated 5 September 2008 to the defendant. This letter sets out various litigation files that were still pending in court. The letter was addressed to Mr. Viliame Kautia, the Acting General Secretary of PEU. This was the last letter that the plaintiff sent to the defendant union after the cessation of their solicitor-client relationship.

[12]. Annexed to the letter was a Memorandum of Costs (“memorandum”). This memorandum itemizes some thirty-four (34) matters for which a total bill of $96,607.47 is allegedly owed by the defendant to the plaintiff. The letter was in fact a demand to the plaintiff to pay up the sum by 4.00 p.m. on 12 September 2008.

[13]. The sum of $96,607.47 shown on the memorandum is considerably more than what the plaintiff pleads in his statement of claim. This was highlighted in court by Ms Saverio in her evidence in chief. The inflated figure was due to some instances of double billing[1] as a result of her oversight.

[14]. When these double billings are corrected, the plaintiff’s claim automatically readjusts from $96,607.47 to $84,064.93.

[15]. Ms Saverio then took me through the documentation to explain that out of this sum of $84,064.93, some further deductions were made on account of certain bills that were already settled in full or in part. The relevant accounts are identified in Tab 6 of the plaintiff’s bundle of documents.

[16]. After these further deductions – the balance then reduces from $84,064.93 to $68,064.93. This latter figure is the sum that the plaintiff had pleaded in his statement of claim.

[17]. After deducting a further $30,000 from that latter figure (the consent judgement sum) – the plaintiff’s claim then reduces further to $29,064.93. This is the sum that the plaintiff now claims plus interest at the rate of 7% from 1 September 2008 until date of payment (using the date of 31 August 2008 being the last set of bills).

[18]. Ms Saverio tendered in court a bundle of documents. These documents all relate to the 34 matters that are set out in the memorandum.

[19]. Mr. Rabuku’s cross-examination of Ms. Saverio only queried the amount owing rather than the attendances of Mr. Narayan and is in keeping with the above observations of Inoke J.

[20]. Mr. Young revisits the issues concerning the bills of costs. He submits that it is not necessary to decide whether the bills of cost were ever received. However, he urges this court to resolve any lingering issue in favour of the plaintiff because the defendant union had, through its former President - Mr. Kautoga, and now deceased – acknowledged the defendant’s indebtedness to the plaintiff in the sum of $95,000 and in fact had committed the Union to its settlement by a proposed payment schedule.

THE LAW

[21]. Section 77 of the Legal Practitioner’s Decree 2009 allows a solicitor to make a written agreement with his or her client in relation to the amount and manner of payment for the whole of any part(s) of any past or future service fees, charges and disbursements.

Agreement to costs

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.

[22]. Under section 79, a practitioner is entitled to sue for and to recover costs pursuant to any agreement on these matters. But in the absence of such an agreement, any issue about costs will be determined in accordance with the Schedule of Fees established by the regulations.

Practitioner may sue for and recover costs

79.—(1) Every practitioner shall be entitled to sue for and recover the practitioner's costs pursuant to any agreement made in accordance with the provisions of this Part, or in the absence of such agreement in accordance with the schedules of fees established by regulation pursuant to this Part, together with any proper disbursements, in respect of services rendered whether as a legal practitioner.

(2) It shall not be necessary for a practitioner to have such costs taxed prior to instituting proceedings for recovery of those costs. In the absence of taxation no claim may be made by the practitioner for any costs which are, pursuant to such agreement or the appropriate schedule of fees, as the case may be, left to the discretion of the taxing officer.

[23]. Section 80 of the Decree gives the client a right to demand for and be provided the particulars of an account.

Right to particulars

80.—(1) Where an account for professional services has been delivered to a client by a legal practitioner, whether calculated pursuant to an agreement made under the provisions of this Part or any schedule of fees determined by regulation, the client may request of the practitioner particulars of the calculation of those charges.

(2) Where a client has requested such particulars of a practitioner, the practitioner shall not be able to institute proceedings, or if already instituted continue proceedings, for the recovery of those charges until those particulars have been provided and five days thereafter has elapsed.

[24]. Whether the client’s right to the particulars of an account is triggered only when the solicitor provides an account, and flowing from that, whether a solicitor is obligated to provide an account in the first place – are issues of construction and interpretation (and maybe of policy) that may arise from the wording of section 80.

[25]. In this case, there is no clear evidence that accounts were ever given by the plaintiff to the defendant, or that the defendant ever did request for any particulars.

[26]. There is clear evidence though that the plaintiff and the defendant union did agree in writing to the amount and the manner of payment of past fees. The agreement in writing is not contained in a single document. Rather, it is evident in the written acknowledgement of the debt by Mr. Kautoga, in the written proposal to settle it by installment, in the written acceptance of that proposal to the plaintiff, and in the part-payments made pursuant to that arrangement.

[27]. On that footing, it would be superfluous for this court to embark on an inquiry on whether or not the bills of cost were ever sent by the plaintiff and received by the defendant union. In any event, the fact that there was a written agreement pertaining to the amount and the manner of payment of past service fees was alluded to by Inoke J in his ruling:

[20] The undertaking by the former President was accepted by the Plaintiff and a binding contract for repayment arose out of it. Part of the sum due under the contract was paid. The further correspondence from the Union’s consultant further supports what I find is an admission that the amount claimed is due. There can be no doubt in my mind that quantum cannot now be disputed.

[28]. But having said that, such an agreement would still be reviewable by this court under sections 77(2) and 77(5), provided the client concerned had made an application in court.

Agreement to costs

77.—(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.

.............................................................

77.—(5) In considering the reasonableness of such an agreement, the Court or Judge may take into account—

(a) the complexity of the matter and the difficulty or novelty of the issues involved;

(b) the experience and standing of the practitioner;

(c) whether the practitioner is to carry the costs of any disbursements;

(d) whether the practitioner is entitled to charge professional costs only in the event of success in any proceeding;

(e) the duration of the matter to which the agreement relates;

(f) the urgency and circumstances in which the business is transacted;

(g) the value or amount of any property or money involved;

(h) any other matters or circumstances which the Court or Judge considers appropriate.

[29]. In this case, the defendant union did not file any such application. In my view, where a solicitor has sued his or her client for unpaid bills pursuant to an agreement as the plaintiff has done in this case, a client who seeks a review of that agreement should file an interlocutory application in the same action. Such an interlocutory application is to be made pursuant to sections 77(2) and 77(5) of the Decree. As no such application was made in this case, all that the court can do is consider whether or not the balance of the claim is verified by the documentation.

[30]. The verification by documentation of Ms Saverio (see above) was very convincing. There was nothing in Mr. Rabuku’s cross-examination of Ms Saverio to suggest that she might have overstated the accounts or lied about them.

[31]. Mr. Viliame Kautia’s evidence cannot be taken seriously. As he admitted in court, he has no personal knowledge of the reconciliation payments as it was prepared by someone else who has ceased working for the defendant union. Nor can he say anything about his predecessors position about the plaintiff’s charge out rates.

INTEREST

[32]. The award of interest is discretionary. Section 3 of the Law Reform (Miscellaneous Provisions) (Death and Interest) Act Cap.27) gives the court a discretion to award interest on any debt or damages (or any part thereof) from the date the cause of action arose to the date of judgment.

[33]. I feel that the interest rate of 7% that the plaintiff seeks is reasonable after comparing this with Fa v Rabi Island Council of Leaders [2002] FJHC 250; HBC0520j.1993s (16 July 2002) where Pathik J awarded 12.5 % interest on unpaid solicitors costs from the date of filing of writ to the date of judgement plus 4% post judgement interest.

[34]. With regards to post judgement interest, the law in Fiji fixes this at the rate of 4% (see Pathik J's discussion of this in Fa v Rabi Island Council in so far as section 17 of the Imperial Judgments Act 1838 applies in Fiji by virtue of section 22(1) of the High Court Act, Cap. 13).

CONCLUSION

[35]. I enter judgement for the plaintiff in the sum of $29,064.93 (see paragraph 17 above) plus interest at the rate of 7% from the date of the filing of the writ to 01 September 2011. Post judgement interest is fixed at 4% until payment. I award costs of $1,500-00 only.

Anare Tuilevuka
Master

At Lautoka
01 September 2011

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^[1] (see items number 27 and 15 (2^nd) on the memorandum representing the sum of $6,960.88 and item 15 (1^st) which represents the sum of $5,581.166 in HCCA No. 296 of 06 is already paid and should not be on that list).