Spillane v Dorgan

• Jurisdiction: Ireland
• Judge: Ms. Justice Irvine
• Judgment Date: 14 March 2016
• Neutral Citation: [2016] IECA 84
• Docket Number: Appeal No.: 2014/1372
• Court: Court of Appeal (Ireland)
• Date: 14 March 2016

[2016] IECA 84

THE COURT OF APPEAL

Irvine J.

Appeal No.: 2014/1372

[Article 64 Transfer]

Ryan P.

Irvine J.

Hogan J.

Mary Dorgan

Appellant/Defendant

- and -

Susan Spillane

Respondent/Plaintiff

Solicitor – Taxation – Bill of costs – Appellant seeking to challenge the validity of an order for costs – Whether a client may obtain an order for the taxation of a solicitor?s bill of costs utilising s. 2 of the Attorneys and Solicitors (Ireland) Act 1849

Facts: The appellant/defendant, Ms Dorgan, was retained by the respondent/plaintiff, Ms Spillane, in 2002 to act as her solicitor in two sets of matrimonial proceedings. Ms Dorgan furnished her client with fee estimates in July, 2005 and May, 2007. The matrimonial proceedings were resolved in the Circuit Court in May 2007; a settlement agreement provided for the transfer of substantial assets to Ms Spillane. In November, 2007, Ms Dorgan furnished Ms Spillane with a bill of solicitor and client costs which came to ?120,855. The first item on the fee note was her own fee of ?55,000 plus VAT of ?11,550. Thereafter she set out fifteen items of outlay to a total value of ?2,767.05 before furnishing an itemised list of fees paid to,?inter alia, senior counsel, junior counsel, auctioneers, forensic accountants etc. In her covering letter she explained that she had deducted the aforementioned fees from the sum of ?125,000 which she held in her client account and which had been received from Mr Spillane?s solicitor on foot of the settlement. Thus she enclosed for Ms Spillane?s attention a cheque in the sum of ?4,145.60. In 2009 Ms Spillane retained another solicitor to act on her behalf in relation to another matter and by authorisation dated 23rd September, 2009, Ms Spillane authorised Ms Dorgan to deliver all of her documents and files to Messrs. James A. Sheridan and Company, Solicitors, of Midleton, Co. Cork, a request that was complied with. By letter dated 14th April, 2012, Ms Spillane asked Ms Dorgan to forward a copy of her earlier bill in connection with her divorce and by further letter of 2nd July, 2012, asked Ms Dorgan to arrange for the same to be taxed by the taxing master within four weeks. By letter in reply dated 18th July, 2012, Ms Dorgan advised Ms Spillane that her right to have the bill taxed had lapsed after a period of twelve months and further sought to persuade her as to the reasonableness of the fees which she had charged having regard to the work undertaken. Not satisfied with this response Ms Spillane, by letter dated 27th August, 2012, requested an itemised bill of costs within fourteen days. In her letter she maintained that if the bill of costs were to be taxed she would be entitled to a refund of in or about ?30,000. Having failed to obtain satisfaction from Ms Dorgan, Ms Spillane issued proceedings claiming that the invoice initially furnished was not a valid bill of costs. The relief claimed by her was an order requiring the defendant to submit to taxation a solicitor and client bill of costs within the meaning of ss. 2 or 6 of the Solicitor (Ireland) Act 1849. In response, Ms Dorgan by notice of motion on 26th May, 2014, sought an order dismissing the plaintiff?s claim on the grounds that it was frivolous and vexatious or alternatively on the basis that it was bound to fail. On the 7th July, 2014, Charleton J refused Ms Dorgan?s application to have the proceedings dismissed and granted the plaintiff the relief sought in her special summons. Ms Dorgan appealed to the Court of Appeal from that High Court order submitting that Charleton J erred in law in referring the bill of costs to taxation.

Held by Irvine J that the solicitor and client bill of costs furnished by Ms Dorgan to Ms Spillane on 12th November, 2007, was a bill of costs in accordance with s. 68(6) of the Solicitors (Amendment) Act 1994. Irvine J held that it was a valid bill of costs for the purposes of triggering the time limits attaching to s. 2 of the 1849 Act. Accordingly, Irvine J was satisfied that the trial judge erred in concluding that Ms Spillane?s claim to relief under s. 2 of the 1849 Act was not time barred. Irvine J was also satisfied that on the facts of the case the same are not such as would support the exercise by the court of its inherent jurisdiction to refer that bill of costs to taxation.

Irvine J held that she would allow the appeal.

Appeal allowed.

Judgment of Ms. Justice Irvine delivered on the 14th day of March 2016

1 This is an appeal from an order of the High Court (Charleton J.) dated 7th July, 2014, whereby he directed the appellant/defendant (?Ms. Dorgan?), a solicitor, to refer a bill of costs dated 12th November, 2007, to taxation. He further ordered that Ms. Dorgan pay the plaintiff/respondent (?Ms. Spillane?), her client, her costs in the proceedings which he measured in the sum of ?2,000.

2 Insofar as the High Court judge referred the said bill of costs to taxation Ms. Dorgan submits that he erred in law in so doing. Insofar as he made the aforementioned order for costs in favour of Ms. Spillane, in her Notice of Appeal Ms. Dorgan sought to challenge the validity of that order based on a submission that the court had no jurisdiction to do so having regard to the fact that Ms. Spillane was, allegedly, not legally represented. However, that ground was not pursued in the course of the appeal.

3 Central to this appeal is the question as to when and in what circumstances a client may obtain an order for the taxation of a solicitor's bill of costs utilising s. 2 of the Attorneys and Solicitors (Ireland) Act 1849 (?the 1849 Act?). Core to that issue is the proper construction of the relevant statutory provisions namely the 1849 Act as amended, the Solicitors (Amendment) Act, 1994 (?the 1994 Act?) and Order 99 of the Rules of the Superior Courts 1996 to which I will later return.

Background

4 It is not disputed that Ms. Dorgan was retained by Ms. Spillane to act as her solicitor in two sets of matrimonial proceedings instituted by her husband, Mr. Con Spillane, in the Circuit Court. The solicitor/client relationship commenced in late 2002. In the first set of proceedings (Record No. M185/2003) Mr. Spillane sought an order of judicial separation and in the latter (Record No. M260/2007), a decree of divorce.

5 It is also not in dispute that Ms. Dorgan furnished her client with fee estimates, or what are commonly referred to as ?section 68? letters, on 18th July, 2005, and 29th May, 2007. In the latter fee note she anticipated her own fees would be approximately ?45,000 plus VAT and outlay. These fees excluded other matters which were expected to generate further charges such as conveyancing, witnesses' expenses and barristers' fees.

6 The matrimonial proceedings were resolved in the Circuit Court in May 2007 when the parties entered into a written settlement agreement. It is of relevance to note that the court order which refers to the settlement, which itself was attached to the order, made ?no order as to costs?.

7 Having regard to certain observations made by the trial judge in the course of his judgment, it is also important to record that the settlement agreement provided for the transfer of substantial assets to Ms. Spillane. In particular, she was to become the full owner of the family home in Youghal Co. Cork, was to receive ?1m. within five years and substantial monthly maintenance payments until payment of that capital sum. The settlement also provided for an additional sum ?125,000 to be paid to Ms. Spillane within three months.

8 On 12th November, 2007, Ms. Dorgan furnished Ms. Spillane with what I will refer to as a Ms. Dorgan's bill of solicitor and client costs even though Ms. Spillane contends that the same is not a valid and proper bill of costs for the purposes of s. 2 of the 1849 Act. The total bill came to ?120,855. The first item on the fee note was her own fee of ?55,000 plus VAT of ?11,550 which was stated to be in respect of ?All work done in this connection to include client appointments, phone calls, all correspondence, consultations with counsel and attendances at court?. Thereafter she set out fifteen items of outlay to a total value of ?2,767.05 before furnishing an itemised list of fees paid to, inter alia, senior counsel, junior counsel, auctioneers, forensic accountants etc.. In her covering letter she explained that she had deducted the aforementioned fees from the sum of ?125,000 which she held in her client account and which had been received from Mr. Spillane's solicitor on foot of the settlement. Thus she enclosed for Ms. Spillane's attention a cheque in the sum of ?4,145.60, ?to conclude?.

9 In 2009 Ms. Spillane retained another solicitor to act on her behalf in relation to another matter and by authorisation dated 23rd September, 2009, Ms. Spillane authorised Ms. Dorgan to deliver all of her documents and files to Messrs. James A. Sheridan and Company, Solicitors, of Midleton, Co. Cork, a request that was complied with.

10 It is accepted by Ms. Spillane that she raised no query or objection to the aforementioned bill of costs and neither did she object to the fact that Ms. Dorgan had paid herself her fees from the funds otherwise payable to her by her husband under the settlement agreement.

11 Somewhat out of the blue, by letter dated 14th April, 2012, Ms. Spillane asked Ms. Dorgan to forward a copy of her earlier bill in connection with her divorce and by further letter of 2nd July, 2012, asked Ms. Dorgan to arrange for the same to taxed by the taxing master within four weeks.

12 By letter in reply dated 18th July, 2012, Ms. Dorgan advised Ms. Spillane that her right to have the bill taxed had lapsed after a period of twelve months and further sought to persuade her as to the reasonableness of the fees which she had charged having regard to the work undertaken.

13 Not satisfied with this response Ms....