International Finance Trust Company Ltd v Russo [1999] VUCA 2; Civil Appeal Case 10 of 1998 (21 April 1999)

IN THE COURT OF APPEAL OF
THE REPUBLIC OF VANUATU

Appellate Jurisdiction

CIVIL CASE No. 10 OF 1998

INTERNATIONAL FINANCE TRUST COMPANY LIMITED
Appellant

AND:

NICK RUSSO AND MRS CAROL RUSSO
Respondspondents

Coram: Hon. Justice J. Bruce Robertson,
Hon. Justice John W. von Doussa,
Hon. Justice Daniel Fatiaki

Counsel: Mr. Juris Ozols for the Appellant
Mr. Mark J. Hurley for the Respondents

Hearing: 19^th & 21^st April 1999.

JUDGMENT

Proceedings herein were commenced when the present Respondents sought an order preventing the Appellant from taking proceedings against them in a Court in Australia. By way of defence and counter claim dated 20^th December 1996 the Appellant sought against the Respondents for judgment in the sum US$8,872.50 together with interest and costs. The pleading was as follows:-

"1. The Defendant was at all material times a Vanuatu registered trust company.

2. By an agreement in writing made between the Plaintiffs and the Defendant company dated on or about 23^rd April 1996 and known as Company Management Agreement ("CMA") the Plaintiffs agreed to accept primary responsibility for payment of all fees charged by the Defendant, in respect of services provided by the Defendant for the Plaintiffs.

3. Pursuant to the agreement referred to in paragraph 2 herein, the Defendant has sent to the Plaintiffs invoices requesting payment for the supply of professional services which were supplied also pursuant to that agreement.

PARTICULARS

Date Invoice Reference No. Amount

23/09/96 010/6539 & US$6,39$6,393.30

20/11/96 010/6539 &nbbsp;&&nsp;;&nsp; &nsp; &n

TOTAL AMOUNT& p;&nbbsp; US$8,872.50

I>

In bren breach of the agreement referred to in paragraph 2 herein, the Plaintiffs have failed or refused to pay to the Defendant the moneys due under the invoices."

After much delay the matter came on for hearing before the Acting Chief Justice in September 1998.

There was a partial hearing and then at the request of Counsel for the Respondent evidence was suspended and the learned Chief Justice ordered:

"that the three legal issues raised by Mr. Hurley ought to be determined or to be resolved by the Court first before any factual issues can be determined by the Court or be referred to a referee."

The three (3) legal issues are as follows:

"1. Whether the Plaintiff/I. F. T. C. is entitled to charge at all for the period prior to the company Management Agreement was entered into by the parties on 23^rd April 1996.

2. Whether the Plaintiff/I. F. T. C Ltd. is entitled to charge at all in the situation where Mr. and Mrs. Russo/the Defendants have accepted a quote from Moore Stephens office in Hong Kong, which was passed on to them by I. F. T. C. Ltd./Plaintiff.

3. Whether the Plaintiff/I. F. T. C. Ltd. is entitled to charge after the dispute arose, that is, after the Defendants received invoices of I. F. T. C Ltd./Plaintiff."

At the initial hearing of the appeal we discussed with Mr. Ozols the question of the first issue in light of the pleading.

At the resumed hearing before us Mr. Ozols indicated that he was not instructed to seek an amendment of the initial pleading. We are satisfied that there is no appeal point in respect of the first issue raised in those circumstances. The pleading was grounded in the agreement. The agreement in its form is prospective only. Accordingly no further consideration of that matter is required.

As far as the second issue was concerned the learned judge appears to have taken the view that in terms of the agreement recovery for services carried out could only arise if there had been written agreement in advance about the work and about the rate of remuneration.

We are not satisfied that that is the meaning of the provision. We are of the view that this is not a legal issue which can be determined on this aspect of the case without reference to the factual matrix.

If any citizen approaches a professional person and ask them to carry out work, except in the most exceptional circumstances there will in that request be an implied agreement to pay for the work at a fair and reasonable rate. We are persuaded that the general principle can apply in this case despite the word of the agreement.

We are satisfied that in respect of work after the 23^rd of April 1996 there needs to be a proper enquiry as to exactly what occurred and what was authorised.

The issue of the invoice for work carried out by Moore Stephens in Hong Kong appears to be a red herring. That work done in Hong Kong has been paid for. There remain an issue as to whether the present Appellant carried out work in connection or association therewith at the request of the Respondents and in respect to which it is entitled to payment.

As far as the third question is concerned we are of the view that too can only be answered when all relevant evidence has been heard. We accept that the costs incurred in disputing an account will not usually be payable by a client but we are not satisfied that there is anything about this agreement which enables absolute rules to be laid down in advance of the hearing. It is all basically a factual issue.

Accordingly this appeal must be allowed. The matter is remitted to the Supreme Court for the hearing (which was interrupted for a consideration of the so called legal issues) to be continued. The hearing will be only about what instructions were given and what work was undertaken with regard to them.

We reject Mr. Hurley’s arguments that the agreement on its proper reading means that charges could only be made in respect of a fee schedule. That is not what the contract says. His clients are responsible for the payment of a fair and proper fee in respect of work which they requested and which was undertaken for them. Again it is a question of fact to be decided upon the evidence which is called.

On both occasions when the matter was before this Court we pleaded with the parties to get some reality into this matter. The argument will already have cost them in legal fees much more than is in dispute.

If the parties persist with a lengthy if hearing in the Supreme Court it will cost them even more. It makes no sense. Whenever people ask a professional to do work for them they know that they are going have to pay a fair and reasonable fee for what is done. The April 1996 agreement does not alter that basic principle in this case. It is time that everybody bought some reality to bear on this case and stopped wasting time and resources.

On the issue of cost in this case we refuse any order in favour of either party. Specifically we do not reserve for future consideration any question of costs on this appeal. If parties want to indulge in this sort of fruitless exercise they can do so at their own expenses and should not expect to be reimbursed in any way by the other party.

Dated at Port Vila, this 23rd day of April 1999.

BY THE COURT

Bruce Robertson J. Judge

John W. von Doussa J. Judge

Daniel Fatiaki J. Judge