[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	England and Wales High Court (Senior Courts Costs Office) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Senior Courts Costs Office) Decisions >> Kyriakides & Braier (a firm) v Yvette Klamer [2005] EWHC 90013 (Costs) (14 November 2005) URL: http://www.bailii.org/ew/cases/EWHC/Costs/2005/90013.html Cite as: [2005] EWHC 90013 (Costs)

[New search] [Help]

IN THE HIGH COURT OF JUSTICE
SUPREME COURT COSTS OFFICE

		Clifford's Inn, Fetter Lane London, EC4A 1DQ
		14 November 2005

Master Simons:

INTRODUCTION

1. On the 7 April 2005 the Claimants issued a Part 8 Claim seeking an Order for a detailed assessment of the bill dated 12 August 2004 rendered by them to the Defendant.  On the 10 May 2005 I ordered that there must be a detailed assessment of the bill and that there be a trial of a preliminary issue relating to the terms of the retainer between the Claimants and the Defendant.  I ordered that there should be an exchange of Witness Statements relating to the preliminary issue and that the makers of the Witness Statements attend at the hearing of the preliminary issue for the purpose of cross-examination.
2. Mark Braier a partner in the Claimant firm filed a Witness Statement dated 3 May 2005.  His former trainee solicitor Korey Fevzi also filed a Witness Statement on behalf of the Claimants.  The Defendant filed two Witness Statements dated 21 April 2005 and 30 June 2005.
3. In a trial bundle lodged for the purpose of the hearing before me there were Witness Statements in respect of previous proceedings between the parties relating to the Defendant's application to set aside a Statutory Demand that had been served by the Claimants in respect of this bill prior to the issue of the Part 8 Claim Form.  There were also included in the bundle one or two documents relating to the matrimonial litigation in which Mrs Klamer was involved and in respect of which she had instructed the Claimants. The solicitors' file of correspondence was not lodged, nor have I seen any attendance notes. 
4. At the hearing before me, Mr Braier and Mr Fevzi gave evidence on behalf of the Claimants and Mrs Klamer gave evidence on her own behalf. 

THE FACTS

5. The facts in this case are largely undisputed.  In June 2003 Mrs Klamer was engaged in matrimonial proceedings, having been the Respondent to a petition for divorce and having cross-petitioned.  She was defending the petition for divorce, seeking annulment by way of her cross-petition and was also seeking financial provision.  She had retained another firm of solicitors but, because of her dissatisfaction with their work, disinstructed them and filed Notice of Acting in Person on the 16 May 2003.   According to Mr Braier's evidence, in June 2003 Mrs Klamer's nephew, who was a friend of Mr Braier, asked Mr Braier if he would act for Mrs Klamer to which Mr Braier agreed.  Mr Braier further states that he was requested by Mrs Klamer's nephew if he would act on the basis that he would only seek monies on account of disbursements and not seek payment of his firm's fees until the conclusion of the case.  Mr Braier said that he agreed to this and that he explained this to Mrs Klamer at a subsequent meeting when instructions were first given by Mrs Klamer to Mr Braier.  He said that he told both Mrs Klamer's nephew and Mrs Klamer that he would agree to no payment in respect of his fees until the conclusion of the case, provided that the conclusion of the proceedings was not overly protracted.  Mr Braier in answer to questions from me said that what he meant by "overly protracted" was that he would refrain from seeking payment of his fees until the conclusion of the case provided that Mrs Klamer acted reasonably.  Mrs Klamer answered the same question by saying that the words "overly protracted" had no meaning for her.  She gave no consideration to what they meant.  Her intent was to instruct a solicitor who would not require payment of his bill until the conclusion of the case.  Mr Braier did not produce any attendance note recording the actual discussion either with Mrs Klamer or her nephew with regard to the terms of the retainer.  However, on the 27 June 2003, he wrote a client care letter to Mrs Klamer, the fifth paragraph of which read as follows:

"I will deliver interim bills to you on a regular basis unless you contact me to make an alternative arrangement.  I confirm that I am prepared to delay your payment of the costs until the conclusion of the matter, provided that such conclusion is not overly protracted.  As explained, however, disbursements - in particular, Counsel's fees - must be paid for in full before they are incurred by this firm".

6. Having not been provided with Mr Braier's file of correspondence nor having been supplied with any chronology of events, I can only piece together what subsequently transpired.  What is clear from the witness statements and exhibited documents is that on 30 June 2003 there was a directions hearing in the matrimonial proceedings before District Judge Berry at which Mr Braier attended to represent Mrs Klamer.  Directions were given with regard to the filing and service of an amended Petition and Answer and directions were also given with regard to financial matters.  There was a further directions hearing on 27 August 2003 when the divorce and nullity suit was listed for hearing on 1 April 2004 and a Financial Dispute Resolution hearing was listed for 2 April 2004. 
7. On 24 December 2003 Mr Braier wrote to Mrs Klamer reporting on an offer of settlement that had been put forward by Mr Klamer's solicitors.  He also wrote the following with regard to fees:-

"While writing, I enclose herewith an interim schedule of time in respect of my firm's up-to-date fees; these are of course exclusive of Counsel's fees which amounted to £1,880.00 until the end of October. 

As you know, we agreed that you I (sic) would not request payment of my firm's fees until after the conclusion of the above-named matter, provided that it does not become overly protracted.  However, as agreed, I am keeping you informed of the up-to-date position, especially as the costs implications should be borne in mind by you when considering your decision on the offer that has been made".

8. Thereafter, it appears that the matter proceeded towards the trial of the main suit which had been listed for hearing on 1 April 2004.  The Petition was compromised by agreement.  Cross-decrees Nisi of divorce were made on 1 April 2004 and on the same date Mrs Klamer attended a conference with Mr Spon-Smith of Counsel.  Mr Fevzi attended the conference on behalf of Mr Braier.   Following the conference, and on that same day, Mr Fevzi wrote to Mrs Klamer sending an up-to-date schedule of time indicating that the amount owed by her to the Claimants was £27,875.70.  The fourth paragraph of his letter read as follows:-

"While Mr Braier did agree at the outset of the matter that payment of this firm's fees could be delayed until the conclusion of the matter, you will recall that this was on the specific basis that the matter did not become overly protracted.  In view of the fact that the ancillary proceedings are unlikely to be concluded until the end of this year, I think it only fair that you should now pay at least part of the outstanding costs.

I look forward to hearing from you with your proposals; perhaps we can discuss this when we meet at the FDR hearing tomorrow afternoon".

9. The following day Mr Braier attended a Financial Dispute Resolution hearing with Mrs Klamer and that day sent a further letter to Mrs Klamer the third paragraph of which read as follows:-

"After the Hearing, outside Court, we briefly discussed Mr Fevzi's letter and enclosed schedule to time sent to you yesterday.  You explained that it is, pending final settlement under the divorce, difficult for  you to pay my fees especially as you have of course to reserve sufficient funds for the barrister's fees.  Nevertheless, I do feel that it is only fair that you should make some immediate payment in view of the fact that this firm's fees, including VAT, were already (without the time spent today) £27,875.70 yesterday".

10. On 14 April 2004 Mr Braier sent a further letter to Mrs Klamer reminding her that she had not responded to him with regard to the final paragraph of his letter of 2 April 2004. 
11. There was a further directions hearing in respect of Mrs Klamer's application for financial provision on 27 April 2004 when the court gave directions for the exchange of Witness Statements between Mr and Mrs Klamer by 8 June 2004 and listed the date for the hearing of Mrs Klamer's application for financial provision for 13 December 2004.
12. Preparation of the Witness Statements then began.  According to Mrs Klamer most of the work was carried out on her behalf by Mr Harris but clearly, work was carried out by the solicitors as well.  The date for the exchange of Witness Statements passed with the parties respective solicitors agreeing there should be an extension of time.  On 13 July 2004 Mr Braier wrote to Mrs Klamer complaining to her that he was still waiting to hear from her with regard to the written narrative which she had told him would be prepared by Mr Harris.  He also referred to the letter sent by Mr Fevzi on 1 April 2004 and repeated his view that the matter had certainly become overly protracted.  He pointed out that at that time there were outstanding fees due to his firm of £31,231.98 and in the final paragraph of his letter stated:-

"As you seem unwilling or unable to make any proposals for the immediate discharge of any further part of the outstanding legal costs of £31,231.98, I suggest that I now prepare for you to sign a legal charge over your interests in both 149 Hampstead Way, London and 15 Marina Towers, Bournemouth, to secure the payment of this firm's outstanding fees at the conclusion of the matter.  Please confirm that this is in order and I shall let you have a form of Charge to sign."

13. Mrs Klamer did not respond to the letter with regard to Mr Braier's fees and he sent a reminder to her on 20 July 2004. 
14. Having received no response from Mrs Klamer concerning the question of fees or the charge, Mr Braier wrote again to Mrs Klamer, this time on 26 July 2004 repeating his request that Mrs Klamer executes a charge in favour of his firm in respect of the legal costs.  In the penultimate paragraph of that letter he stated:-

"I think it only fair that my concerns on this firm's fees are addressed at the same time as the finalisation of your very lengthy witness statement."

15. On 26 July 2004 Mrs Klamer sent a fax to Mr Braier instructing him to exchange Witness Statements on the morning of Wednesday 28 July 2004.  She said that she was arranging for a courier to effect the actual exchange.  She then referred to the request of the charge and stated that she did not want to come to any decision in a rush.  Mr Braier immediately responded to the fax stating that her further procrastination was unacceptable, as he had been waiting for many months for her to respond with regard to payment of his fees and more than a fortnight had elapsed since he raised the suggestion concerning the execution of the charge.  In a fax sent to Mr Harris (with whom Mr Braier had been instructed by Mrs Klamer to correspond), Mr Braier stated that:-

"It is neither fair nor reasonable to expect the exchange of witness statements to be effected without some satisfactory arrangements first being made in respect of this firm's fees - both already accrued and to be accrued."

16. With the fax he sent a form of charge for Mrs Klamer to execute, seeking to charge the sum of £31,231.98 on the properties in which Mrs Klamer had an interest.
17. On 30 July 2004, Mrs Klamer responded to Mr Braier by stating that she was concerned and surprised at the delay in exchanging witness statements and complained of his refusal to comply with her instructions or with the order of the Court.  She stated that she hoped he would proceed immediately with the exchange of Witness Statements.  She also stated that she had been able to arrange a loan and that funds should reach her bank account within the next 7-10 days. 
18. On the same day Mr Braier responded by seeking further information concerning the loan and by stating:-

"This firm's duties as solicitors on the record and officers of the court do not require it to continue to do work and incur costs in the absence of satisfactory arrangements regarding the payment of its fees being put in place".

19. On 1 August 2004 Mrs Klamer sent a fax to Mr Braier informing him that she had obtained a loan of a few thousand pounds of which she could pay him £3,000.00.  She requested confirmation that the exchange of Witness Statements would take place on the 2 August 2004. 
20. Mr Braier responded to that fax by pointing out that £3,000.00 could not be accepted alone in respect of his firm's fees and that unless a very much higher amount could be paid on account, his firm's fees had to be secured by a charge.  He requested confirmation that Mrs Klamer was going to proceed with the charge and requested details of the date when he would receive the £3,000.00.
21. On 11 August 2004 when the Witness Statements still had not been exchanged, Mrs Klamer served Notice of Intention to Act in Person upon Mr Braier.  The same day, Mr Braier responded expressing his disappointment that Mrs Klamer had taken this step.  He set out to justify his position and stated that he would arrange for a detailed time schedule to be sent to Mrs Klamer.  The following day, 12 August 2004, he submitted the invoice of which the detailed assessment is now sought. 

THE ISSUES

22. The parties are agreed that the preliminary issues that I have to decide are as follows:-

i. What were the terms of the retainer between the Claimants and the Defendant?

ii. How was the retainer terminated?

iii. Who terminated the retainer?

iv. If the solicitor terminated the retainer, was he justified in doing so pursuant to section 65(2) of the Solicitors Act 1974?

THE SUBMISSIONS

23. Mr Braier submitted that it was quite clear to him that by April 2004 the case had become overly protracted.  The reason for this was that Mrs Klamer was failing to act on advice and causing costs to escalate.  When he took the case on, he anticipated that a settlement would be achieved and that nothing like the amount of costs that had accrued by April 2004 would have accrued.  He submitted that it was quite clear by the end of March 2004 that the matter would continue until at least the end of the year and that the case had been "overly protracted" within the meaning and intention of the client care letter and terms of the retainer.
24. He further submitted that he did not terminate the retainer and that the retainer was terminated by Mrs Klamer by serving a Notice of Intention to Act in Person which was served on him on 11 August 2004.  Up until then, he was still acting for Mrs Klamer and was justified in not exchanging Witness Statements as a result of Mrs Klamer's failure either to pay him money on account that he had been requesting for the previous three months, or by her failure to execute a charge in favour of his firm. 
25. As an alternative submission, if I were to conclude that he had terminated the retainer, then he was entitled to do so pursuant to section 65(2) of the Solicitors Act 1974 as he had requested the client to make a payment of money on account of costs.  The client had refused to make that payment and he had given reasonable notice to the client that he would withdraw from the retainer.  He submitted by implication the contents of his letter of 26 July 2004 in which he stated that his firm's fees had to be addressed at the same time as the finalisation of the Witness Statements could be construed as notice to terminate the retainer and that in the circumstances and the pressure to exchange the Witness Statements the five days between the date of that letter and Mrs Klamer's letter of 1 August 2004 instructing him to exchange Witness Statements was sufficient notice.
26. In general, he submitted that his firm had acted reasonably at all times.  It was not reasonable for him to continue to act for Mrs Klamer without her either making a payment on account or by giving some security and that it was quite clear that these proceedings had been overly protracted by reason of the failure of Mrs Klamer to accept advice from himself and Counsel. 
27. Mr Harris's submission was that neither in April 2004 nor by the time the retainer had been terminated had the conclusion of the case become protracted, let alone "overly protracted"?  Within two months of Mr Braier accepting the retainer, a date had been fixed for the hearing of the main action for 1 April 2004 and a first appointment had been made for a Financial Dispute Resolution meeting on 2 April 2004.  It was clear that the court was in control of the timetable for the matter to conclude.  Whilst Mr Braier could not have known of this timetable when he accepted the retainer, he was certainly aware of the timetable when he wrote to Mrs Klamer on 24 December 2003 and when he clearly did not consider that that timetable or that the conclusion of the case was overly protracted.  Consequently, Mr Harris's submission was that the conclusion of the case had never become overly protracted and therefore, by seeking any monies on account of costs, Mr Braier was in breach of the terms of the retainer i.e. that he would not be seeking payment of his fees until the conclusion of the case. 
28. Mr Harris also submitted that there is no requirement on a client to give security to a solicitor and that a solicitor cannot refuse to act for a client on the grounds that the client has refused to give security for the solicitors costs. 
29. Mr Harris's next submission was that the retainer had been terminated by Mr Braier by his refusing to act on his client's instruction to exchange the Witness Statement pursuant to the terms of a Court Order.  Mr Harris submitted that Mr Braier could not rely on section 65(2) of the Solicitors Act 1974, as there had been no request for a specific sum on account of costs to enable the client to consider whether or not such request was reasonable, and that even if the client had failed to respond to such request within a reasonable time, Mr Braier had failed to give reasonable notice to the client that he would withdraw from the retainer.  Mr Braier stated for the first time on 28 July 2004 that he was not proposing to exchange Witness Statements unless an arrangement had been made for a payment or for security for his fees and bearing in mind that the client had been ordered by the Court to exchange Witness Statements, if such a letter could be regarded as a notice of intention to terminate the retainer, it was not reasonable notice.

THE LAW - s65 SOLICITORS ACT 1974

65(1)  A solicitor may take security from his client for his costs, to be ascertained by taxation or otherwise, in respect of any contentious business to be done by him. 

(2) If a solicitor who has been retained by a client to conduct contentious business requests the client to make a payment of a sum of money, being a reasonable sum on account of the costs incurred or to be incurred in the conduct of that business and the client refuses or fails within a reasonable time to make that payment, the refusal or failure shall be deemed to be a good cause whereby the solicitor may, upon giving reasonable notice to the client, withdraw from the retainer.

MY CONCLUSIONS

30. The terms of the retainer between the Claimant firm and Mrs Klamer were set out in the fifth paragraph of the letter from the solicitors to Mrs Klamer of 27 June 2003.  It was a term of the retainer that the solicitors would be prepared to delay payment of costs until the conclusion of the matter, "provided that such conclusion is not overly protracted".  Mr Braier had his view of what "overly protracted" meant.  That was that the client would be reasonable, listen and accept reasonable advice and not delay matters.  Mr Braier clearly had a subjective view as to what he meant by "overly protracted" which he perceived was a decision for him and him alone as to whether the matter became overly protracted based on the conduct of his client.  Mrs Klamer had no view of what "overly protracted meant.  She retained Mr Braier on the basis that he would not be seeking payment of his fees until the end of the case.  It is unlikely that she would have known whether the conclusion of the case was overly protracted. 
31. I am satisfied that one of the reasons, if not the main reason, why Mrs Klamer instructed Mr Braier was that he agreed not to seek payment of his fees prior to the conclusion of the case.  Mr Braier gave no definition to Mrs Klamer at the outset as to what "overly protracted" was going to mean.  Was it to mean that the case does not continue beyond a certain length of time which appears to me to be the literal meaning, or did it mean that the case would become exceptionally complicated?  Either way, Mr Braier did not make the position clear to Mrs Klamer.  Mr Braier stated in evidence that the case was becoming overly protracted because Mrs Klamer was not listening to his advice and thereby unnecessary costs were being incurred.  Mr Braier has not presented me with his file of papers, nor in his Witness Statement does he go into any detail as to why he considered that the case was overly protracted other than to say as he did in paragraph 20 of his statement:-

"At that time both the Defendant and I believed that the whole matter would be completed in the early part of 2004 and accordingly, when it became clear by the end of March 2004 that the matter would continue until at least the end of that year the case had become "overly protracted" within the meaning and intention of the client care letter".

32. However, in my judgement, whether or not the costs were being increased as a result of Mrs Klamer's failure to heed Mr Braier's advice, the conclusion of the case was not being overly protracted as the court was setting a timetable that would bring the case to a conclusion within a reasonable time.  Mr Braier was aware of this timetable in August 2003 and, notwithstanding Mrs Klamer's failure to accept Mr Braier's advice with regard to settlement, nothing appears to have happened between August 2003 and April 2004 that was going to prolong the timetable for the conclusion of the case that had been set by the court.  I consider that Mr Braier's definition of what "overly protracted" was, should have been spelt out to the client at an initial stage. 
33. The retainer commenced in June 2003 and by the end of August 2003 it became quite clear that unless the case settled, the main suit would not be completed until 1 April 2004 and that if the Financial Dispute Resolution hearing was not to take place until 2 April 2004, then it was unlikely that the financial aspects of the case would conclude much before the end of 2004.  In December 2003, Mr Braier was aware of this timetable, yet his letter of 24 December 2003 still confirmed that he would not be seeking any payment of fees unless the case had become overly protracted.  
34. Mr Braier has stated that the case was becoming overly protracted because Mrs Klamer was not listening to advice.  I was told that Mrs Klamer was receiving conflicting advice and I cannot believe that it would have been the intention of the parties that the case would become overly protracted if the client did not accept the advice that she was being given. 
35. It was a term of the retainer that the Claimants would not seek payment of their fees until the conclusion of the case unless the conclusion was overly protracted.  In my judgement, at the time when Mr Braier first requested monies on account of his costs, the conclusion of the case was not overly protracted.  As an experienced matrimonial practitioner Mr Braier would have known in August 2003 that, given that the first Financial Dispute Resolution hearing was not taking place before 2 April 2004, in the absence of any agreed settlement, the case would not conclude before the end of 2004.  I therefore conclude that by seeking a payment on account of their fees prior to the conclusion of the case, the solicitors were in breach of the terms of their retainer as the conclusion of the case was not overly protracted. 
36. I am also satisfied that the retainer was terminated by the refusal of the solicitors to exchange Witness Statements on the instructions of their client without having received a payment on account of their fees or a charge to secure their fees.  I have already decided that the solicitors were not entitled to seek a payment on account of their fees but even if I am wrong concerning that, there is no doubt in my mind that the failure to carry out the client's instructions pursuant to a Court Order can be regarded as a refusal by the solicitors to carry out the terms of the retainer thereby entitling the client to regard the retainer as having been terminated by the solicitor.  I therefore conclude that the retainer was terminated by the solicitors by their refusal to exchange the Witness Statements when instructed to do so, leaving the client with no alternative other than to act for herself in order to get the Witness Statements exchanged.
37. If the solicitors terminated the retainer, can they plead the benefit of section 65(2) of the Solicitors Act 1974?  I have already decided that they were not entitled under the terms of the retainer to seek a payment on account of their fees as they had agreed not to do so.  But if I am wrong with regard to that, I have to consider whether section 65(2) had been complied with.  I am satisfied that had the solicitors been entitled to seek a payment on account, then they sought a reasonable sum on account and that the client refused to pay.  However, I am not satisfied that reasonable notice was given to the client to withdraw from the retainer.  The first time it became abundantly clear that the solicitors did not propose to exchange the Witness Statements unless a payment on account had been made or security was being given was in their letter of 26 July 2004.  The same day, Mrs Klamer asked the solicitors to exchange Witness Statements.   On 28 July 2004 the solicitors made it quite clear that they did not propose exchanging the Witness Statements until satisfactory arrangements had been made with regard to the firm's fees.  At that stage, they ceased carrying out the client's instructions.  I therefore conclude that just two days' notice of the solicitors' intention not to abide by the terms of their retainer was given.  I do not regard this as reasonable notice and therefore the solicitors cannot claim the benefit of section 65(2).
38. It is settled law that a retainer is normally an entire contract under which a solicitor is to do certain work for the client and under the law of contract, in the absence of agreement, or a request from the client for a final bill, he cannot seek any remuneration until that work has been completed or the retainer has been terminated in some other way. This rule can be diluted by section 65(2) of the Solicitors Act 1974 but I have found on the facts that this section does not apply.  As the solicitors have wrongfully terminated the retainer, it is with regret that I find that no fees are payable.  This may be construed as being unfair on the solicitors.  However, it is for the solicitors to be clear and unambiguous in the terms of their retainer and if they want to qualify those terms, they have to do so in words that are understood and agreed by the client.  They have not done so in this case; they have not complied with the terms of their retainer and they have wrongly terminated the retainer.