Drake & Co v Main [2004] WSDC 8 (28 September 2004)

IN THE DISTRICT COURT OF SAMOA
HELD AT APIA

BETWEEN:

DRAKE & CO.
Law Partnership, of
Level 1, Chandra House, Convent St., Apia.
Plaintiff

AND:

DAVID MAIN,
Sales Manager and
LOUISE MAIN
his wife of Matautu-tai.
Defendants

Counsels: Ms K.Drake for plaintiff
Mr P Fepuleai for defendants

Hearing: 22.09.2004
Judgment: 28.09.2004.

DECISION OF VAAI, DCJ

This matter which was brought by way of a default action, arose from a claim in the sum of $3,873.57 being the balance of legal fees outstanding for services rendered by the Plaintiff to the Defendants, in an earlier dispute between the Apia Yacht Club and the defendant Louise Main. [These earlier legal proceedings have been concluded and the matters in issue there, are not relevant to this decision].

At the outset, both counsel advised the Court that the cause of action in this case was a breach of contract. That is whether or not the amount claimed of $3,873.57 was sought to be recovered due to a breach of a contractual relationship between the plaintiff and the defendants. It may be mentioned here that after the plaintiffs evidence had concluded at the hearing and before the defendants evidence was called, plaintiff’s counsel sought leave of the Court to amend the Statement of Claim by allowing the introduction of an alternative cause of action in claiming the recovery of the amount of $3,873.57 for services rendered, on a “quantum meruit” basis. This application was opposed by Defence Counsel. I ruled against granting the plaintiff’s application by refusing leave to amend the statement of claim, on the basis that it was made at so late a stage in the proceedings that it would unfairly prejudice the defendants case. This is because the plaintiff’s evidence had by that stage ended, and the cross examination by the defence counsel of the plaintiff’s witness, was on the understanding that the cause of action was a breach of a contractual relationship between the parties, and not any other. In addition, both counsel advised the court before the hearing commenced, that the action was to recover a debt pursuant to a breach by the defendant’s of a contract with the plaintiffs for legal services already performed.

The facts are straightforward and are in the initial stages not in dispute. On or about the 28^th day of May 2001, the defendants met with Mrs. Drake of the plaintiff firm at her office where she accepted instructions to represent Mrs. Louise Main (one of the defendants) in the proceedings filed by Apia Yacht Club. Prior to this meeting, Mrs. Drake in her evidence said that she had a meeting with David Main where Mr Main requested Mrs Drake to represent his wife Louise Main.

On the amount of fees for retaining Mrs Drake to represent Mrs Main, Mrs Drake in her evidence could not recall a meeting where fees were specifically discussed and agreed upon. In support of this, she stated she had no file note in her file which referred to any discussion of fees with the defendants, (as was her normal practice) at any of the meetings held between them.

On the other hand, the defendants maintained in their evidence that there was a meeting (which was quite lengthy) where the matter of fees was discussed amongst other things. The defendants both testified that the fees which they believed to be the agreed amount, was $3,000 for the pre-trial work and $3,500 for a one-day hearing i.e. $6,500 in total if it went to a one-day court hearing. It was also the defendants belief that pre-trial work as they were led to understand referred to all the relevant interlocutory documentary work, necessary to be filed, prior to an actual court hearing (for which the fee was $3,500 per day).

I found helpful, the plaintiffs exhibit “1” (the letter from Drake & Co. to David and Louise Main dated (10 September 2001) in determining whether a contract for legal services had been entered into between the parties) and if so – how much legal costs were involved. (quote letter on fees). Mrs Drake in her evidence stated that this letter was written and sent after all the documentation was prepared for filing.

My reading of this letter of 10 September 2001 leads me to a finding that the estimated costs of $6,500 referred to by the defendants in their evidence is the more likely position which was accepted and existed between the parties at that time. I find therefore that:

1. The parties did reach agreement on or about May 2001 (or at the very latest 10/9/01) for the plaintiff to represent the defendant Louise Main in the Apia Yacht Club matter. In fact, David Main was of the view Mrs Drake was a good and was his preferred solicitor; and
   
2. That the estimated costs for such representation (after Mrs Drake had considered the pleadings filed against Mrs. Louise Main) to be about $6,500. It was a condition of this estimate that the amount was on a one-day hearing basis (or $3,500 per day).
   

At the time of this letter from the plaintiff to the defendants, the defendants had already paid by way of a deposit towards the estimated costs an amount of $1,200. Up to September 2001, the relationship between the parties appears to have been quite normal.

Sometimes afterwards (exactly when it’s not clear from the evidence and the documents tendered) there seems to have developed what Mrs Drake referred to as “work which was not anticipated” at the time the original estimated costs of $6,500 was communicated to the defendants i.e. September 2001. According to Mrs Drake, the proceedings turned out differently from what she had initially expected and she specifically referred to the “unanticipated developments” as:

1. When counsel for the plaintiff in the Apia Yacht Club proceedings wrote suggesting arbitration as an alternative means of resolving that dispute, and the attendances in relation thereto; the matter in the end didn’t go to arbitration.
   
2. Several fixtures were set and were subsequently vacated for one reason or another causing unexpected delays. I note from the evidence that not one reason for vacating the fixtures can properly be attributed to any fault of the defendants. I also note that one or two fixtures were vacated for reasons beyond either of the parties control.
   
3. An application for discoveries was also made as a result of the defendants request.
   

These are the reasons given by the plaintiff as amounting to the extra legal work, which in turn formed the basis for the subsequent increase in legal fees. The defendants view on the plaintiff’s change in expectation is quite different. In Mr David Main’s letter of 22 July 2004 (def. exh. “2”) in response to Mrs Drake’s fee note of 9 May 2003 which totalled $9,368.44 inclusive of GST), he was of the view that the fee of $9,368.44 was excessive for the work done up to that point in time. He goes on to say in his letter that he had assumed the original agreement for $3,000 for pre-trial work was a fair and reasonable amount for the defendants to pay for the legal services rendered up till then. During cross examination, Mr Main in response to a question from plaintiffs counsel stated that he didn’t understand (upon receiving the fee note dated 09/05/03) why the costs for the pre-trial work done by the plaintiff had gone from $3,000 to almost $10,000. Plaintiffs counsel tried to impress upon me that Mr David Main as an experienced businessman should have understood why the fee increased.

One other matter which I will comment on in passing which was referred to in Mrs Drake’s evidence. She mentioned that Mr David Main did not query the final fee note dated 28 May 2003 ($3,873.57 being the outstanding balance) until July 2003. That is supported by the correspondence. At the same time when Mr Main wrote in August 2002 to Mrs Drake advising her of the method and time frame for payment of outstanding fee being the final payment to make up the $6,500, no mention was made either then or immediately after about any changes in the amount of fees. It was only until the first fee note of 9 May 2003 and the final fee note of 28 May 2003 were received by the defendants that they became aware of the increase. Mr Main responded to the first fee note as being excessive and not in accordance with his understanding of the parties original agreement.

If I were to consider the parties conduct in not querying each other’s position regarding the differences in amounts, the time running from Mr Mains letter of 22 August 2002 (confirming his view of the final fee as amounting to $6,500) to 9 May 2003 the date of the first fee note, is much longer than the time in which the plaintiff alleges the defendants should have but didn’t query the increase in legal fees. I’m not going to consider here whether either of the parties might be estopped from denying the other of their contractual or quasi-contractual rights, because estoppal by conduct was neither argued by counsel nor supported by the evidence.

The amount claimed to be recovered by the plaintiffs of $3,873.57 forms part of a debt which is disputed by the defendants. It is plain that the defendants are saying that an agreement was made as to fees and the amount of $3,873.57 exceeds the agreed amount of $6,500.

Quantum Meruit - I advised the parties before and during the hearing that any arguments on the question of whether or not the total fee amount was excessive vis-à-vis the original amount estimated, or whether it was reasonable or not in the circumstances of the Apia Yacht Club proceedings, are issues properly for the law society and not for this Court.. In other words, the proper forum for the proving of the claim by the plaintiff in quantum meruit of the sum of $3,873.57 against the defendants is the Law Society and not for this court based on the pleadings before me and the views expressed by me before the hearing.

The Plaintiff may in my view decide on its recovery options after the Law Society’s determination of the above question, if it so wishes.

On the facts as I found them, a contract was entered into between the plaintiff and the defendants on or about May 2001. I am also satisfied upon the evidence that the agreement was for the rendering of legal services by the plaintiff at the quoted estimate of $6,500, the price accepted by the defendants on the basis the case was heard in one day if it went to a hearing. I now go on further to determine whether the original agreement was modified or varied in relation specifically to the amount of legal fees, after it was initially entered into.

Miss Drake submitted for the plaintiff that whilst the original agreement for the $6,500 (on a one-day hearing basis) was not in dispute, because the Apia Yacht Club proceedings did not proceed as anticipated (the delays and an out of court settlement always looming in the background, the numerous fixtures which were later vacated), meant that the basis of the original contract had changed. I have assumed that the change she referred to is the increase in the costs to $9,873.57 from the original $6,500 quoted in Mrs Drakes letter of 10 September 2001. Miss Drake went on to argue that the defendants should have realized the fees were bound to change, so therefore they should have known that the original amount of $6,500 agreed to, no longer applied. I have taken her argument to mean that the increase in fees was a variation of the original contract which ought to be implied in these circumstances, given the status of the defendant David Main as an experienced businessman, instead of her submission as meaning an implied ending of the original contract.

Mr Fepuleai for the defendants submitted that based on the evidence, the original contract was for $3,000 for pre-trial work and $3,500 for a one-day hearing if it proceeded to a hearing. That he says, is the amount the defendants accepted and duly acted upon. He argued further that the increase in the fee amount, due to what the plaintiff refers to as unanticipated or unexpected extra work, required a variation of the original amount.

The difference between the plaintiffs original estimate of $6,500 (which was accepted by the defendants) and the final fee note of $9,873.57(the sum of $3,373.57) arose from what the plaintiff calls extra work not anticipated. There was no express agreement either in writing or verbally in this case to vary the original agreement. The question therefore is, was the claim in specific relation to the amount of legal fees, varied between the parties as implied from their conduct?

I conclude that the evidence before me does not support a finding that the parties by their conduct either explicitly or implicitly agreed to a variation of the amount originally agreed to. I find also that the defendants background (especially David Main’s) as an experienced businessman is not helpful to the Court in implying that he should have known the fees were bound to increase or that the contract was legally varied on the basis that David Main was an experienced businessman so should be deemed to have impliedly agreed to a variation of the contract. The work and amount reflected in the fee relates to specific and technical work of a strictly legal nature done by Mrs Drake a legal practitioner; and the very reason why the defendants sought legal help from the plaintiff in the first place was because they’re not qualified legal practitioners. The fact that the defendants are experienced business people, does not necessarily mean that they ought to be treated as if they should have a professional grasp of the intricacies of the work of the legal profession, like qualified legal practitioners are expected to have.

That however is not the end of the matter. I do expect the defendants in these proceedings to know of their obligations under a contract and they have admitted in evidence their acceptance of the estimate from Mrs Drake of $6,500. Given that the defendants have thus far paid $6,000 to the plaintiff ($500 short of the costs they agreed in the contract to pay) I make the following orders.

1. Judgment for the Plaintiff in the sum of $500 for the unpaid portion of the contract price the defendants accepted.
   
2. The claim by the Plaintiff for the sum of $3,373.57 is dismissed as against the defendants for lack of a valid variation of the original contract, i.e. for breach of the contract/agreement.
   
3. There is no order made as to costs between the parties, i.e. the parties shall bear their own costs incurred in these proceedings.
   

DISTRICT COURT JUDGE