Hung v Saad [2004] NSWSC 119 (26 February 2004)

Last Updated: 5 March 2004

NEW SOUTH WALES SUPREME COURT

CITATION: Hung v Saad [2004] NSWSC 119



CURRENT JURISDICTION: 4903/01

FILE NUMBER(S): 4903/01

HEARING DATE{S): 13, 20 and 26 February 2004

JUDGMENT DATE: 26/02/2004

PARTIES:
To Hung (First Plaintiff)
Qian Na Xu (Second Plaintiff)
Saad Saad (First Defendant)
Nadia Saad (Second Defendant)
SCE Buildings & Construction Pty Limited (Third Defendant)
Magney Mortgages Limited (Fourth Defendant)
Danny John Arraj t/as Arraj Lawyers (Fifth Defendant)
On first cross claim
SCE Building & Construction Pty Ltd (First Cross Claimant)
Saad Saad (First Cross Defendant)
Nadia Saad (Second Cross Defendant)
Danny John Arraj t/as Arraj Lawyers (Third Cross Defendant)
Magney Mortgages Limited (Fourth Cross Defendant)
On second cross claim
Danny John Arraj t/as Arraj Lawyers (Cross Claimant)
Saad Saad (Cross Defendant)
On third cross claim
Saad Saad (Cross Claimant)
SCE Building & Construction Pty Ltd (First Cross Defendant)
Magney Mortgages Limited (Second Cross Defendant)
On fourth cross claim
Saad Saad (Cross Claimant)
Danny John Arraj t/as Arraj Lawyers (Cross Defendant)

JUDGMENT OF: Windeyer J

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:
Mr M Scheib (Mr Arraj)
Mr A Kumar (Mr Saad)

SOLICITORS:
Riley Gray-Spencer (Mr Arraj)
Sandroussi & Associates (Mr Saad)


CATCHWORDS:
LEGAL PRACTITIONERS - costs agreements - claim to recover unpaid costs - defence of collateral agreement that no payment to be made unless certain conditions fulfilled - cross claim of damages for breach of retainer/negligence - solicitor entitled to recover - cross claim denied

ACTS CITED:


DECISION:
On second and fourth cross-claims - judgment for cross-claimant on second cross-claim - judgment for the cross-defendant on the fourth cross-claim


JUDGMENT:

- 2 -
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WINDEYER J

FRIDAY 20 FEBRUARY 2004

4903/01 TO HUNG & ORS V SAAD SAAD & ORS

JUDGMENT

1 HIS HONOUR: This judgment deals with the second and fourth cross-claims in these proceedings heard separately from any other matters.

2 Mr Arraj is a solicitor. By the second cross-claim he seeks to recover first moneys due to him for costs and disbursements in various matters in which he acted for Mr Saad, the cross-defendant to the second cross-claim and, second to recover the sum of $5,000 lent by him to Mr Saad. Liability to repay this loan and interest on it is now conceded.

3 The amounts claimed by Mr Arraj for costs are claimed in accordance with a number of costs agreements entered into between the solicitor and Mr Saad between 8 May 2000 and 6 May 2001. Bills of costs were served on Mr Saad for legal costs and disbursements under the various retainers and agreements, the total outstanding being $56,956.67. Interest is claimed in addition. The costs agreements are all admitted as having been signed. Service of the bills was not admitted, but I find that the bills were served. Mr Saad terminated the retainer in July 2001. Although some attempt was made to raise this in submissions, there was no dispute in the hearing as to the amounts of the bills. This dispute is about liability to pay.

The defence to the cross-claim, while admitting that Mr Saad entered into the costs agreements went on to say:

[but] I say that in the circumstance [sic] the costs are not enforceable in law or equity. The cross-defendant repeats paragraphs 2 to 15 in his cross-claim.

Leaving aside the fourth cross-claim which was the cross-claim of Mr Saad against the solicitor, no argument was put forward as to why the agreements were not enforceable. One argument tentatively raised as to compliance or non-compliance with the Legal Profession Regulation was withdrawn. The only substantive defence put forward was that there was an oral term of all the relevant agreements that the costs would only be paid upon achieving satisfactory results and after surplus moneys became available from the sale and settlement of various properties owned by Mr Saad and perhaps his wife and when what are described as the SCE liquidation proceedings were finalized.

4 Mr Saad's evidence was that this was always the arrangement. Mr Arraj denied this. The claim is contrary to the terms of the written agreements entered into which Mr Saad says gave rise to this term taking place. The written agreements indicated quite clearly that payment was expected within fourteen days of billing. One of the agreements, which included a rather inept and inapt agreement to give security, was amended to delete that clause although it was included in the others. This was clearly done by negotiation and agreement and I so find. While it is true that no action was taken to enforce payment until Mr Saad dispensed with the services of the solicitor, I am not satisfied that this is sufficient in any way to establish the term claimed. I accept the evidence of Mr Arraj on this aspect and reject that of Mr Saad. I would do so in any event, but towards the end of the engagement period Mr Saad signed an acknowledgment of the amounts due by him. The evidence of pressure on this I reject. Finally, Mr Saad terminated the retainer. Under the agreements, costs to that date become due, although that would probably only apply to matters where work was in progress at that stage and not completed.

5 A further allegation made by the cross-claim of Mr Saad is that Mr Arraj represented that he had the necessary competence and skill to undertake the work the subject of the retainers and that he did not have this knowledge and skill. While this appears to be a general claim, it is in fact limited to three matters identified in the cross-claim. These matters can be described as the SCE Building Construction Pty Ltd matter, the National Bank loan matter, and the Lochbar Holdings Pty Ltd matter. No evidence was directed to any other matter. Any general claim of breach of contract through failure to act competently must fail, as must any general claim of negligence. I should say that I accept that a solicitor who accepts a retainer impliedly does so on the basis that he is competent to handle the work, the subject of the retainer.

6 SCE Building Construction Pty Ltd was a company controlled by Mr Saad and his wife. It went into liquidation prior to Mr Arraj receiving any retainer. The second cross-claim does not claim any costs in connection with work on this subject matter, but, nevertheless, if the claim for negligence in the conduct of that matter were made out, that might entitle the fourth cross-claimant to damages which would ultimately be set off against any judgment for the second cross-claimant on the second cross-claim. There is no evidence of any damage, so far as this matter is concerned. Neither is there any evidence of negligent conduct of the solicitor.

7 So far as the National Bank loan is concerned, the evidence clearly establishes that the transaction did not go ahead despite what I think to be the best efforts of the solicitor, because Mr Saad was unable or unwilling to satisfy the conditions upon which his former wife was prepared to transfer her interest in certain properties to enable them to be given to the bank as security. Failure to obtain this required loan, which it appears would have been sufficient to satisfy the claims of all creditors of SCE in the liquidation, was not caused by any negligence or act of the solicitor. I add that there was no evidence of damage, although it was stated in the fourth cross-claim that the quantum of damages could not be ascertained until the liquidation of SCE was finalized. There is no basis upon which some order could be made that damages be ascertained by the happening of some later event which might not happen for many years. That claim must fail.

8 Lochbar Holdings Pty Ltd was a company which made a claim in the Local Court against Mr Saad and the company with which he was connected. Judgment was entered against Mr Saad in default of defence after Mr Arraj received instructions to act and sought certain particulars. That judgment was set aside and leave was given to file a defence and cross-claim within a certain period. The clear evidence, which I accept, is that this was not done because Mr Saad would not verify the defence or to give instructions for this and the cross-claim to be filed. There is evidence that the necessary documents were prepared. I reject the evidence of Mr Saad on this matter.

9 It follows from this that the fourth cross-claim, whether raising matters by way of defence to the second cross-claim or raising claims for damages for negligence or breach of contract, must be dismissed.

10 The plaintiff is entitled to judgment for amounts claimed plus interest. I will stand the matter over to enable the interest to be calculated so that judgment for the full amount can be entered. Mr Saad must pay the second cross-claimant's costs and the cross-defendant's costs of the fourth cross-claim.

11 I stand the matter over for entry of judgment, to enable the figures to be calculated, until 26 February 2004 at 10 am. If there are moneys in court, there may need to be an inclusion for those moneys to be paid out.


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LAST UPDATED: 05/03/2004