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Benard v Hakwa [2004] VUCA 15; Civil Appeal Case 13 of 2004 (1 November 2004)

IN THE COURT OF APPEAL OF
THE REPUBLIC OF VANUATU
(Appellate Jurisdiction)

CIVIL APPEAL CASE No. 13 of 2004

BETWEEN:

GUY BENARD
Appellant

AND:

SILAS CHARLES HAKWA
Respondent

Coram: Chief Justice Vincent Lunabek
Justice Bruce Robertson
Justice John von Doussa
Justice Daniel Fatiaki
Justice Patrick Treston
Justice Oliver Saksak

Counsel: Mr. Guy Benard in person
Mr. Silas Hakwa for the respondent

Date of hearing: 25th October 2004
Date of decision: 1st November 2004

MEMORANDUM

The subject matter in this litigation is a disputed claim by the respondent, a lawyer, for professional fees and disbursements. As the result of a conference with the parties when this appeal was called an outcome was agreed. This Memorandum records the background to the appeal and the outcome.

Professional work was admittedly done by the respondent for the appellant in the period from April 1997 to June 1998. It is unnecessary to go into detail, but there were good reasons why the respondent ceased acting in July 1998, and why action was not taken by the respondent to recover the costs he claimed until recently.

When the professional relationship ended, the respondent gave the appellant a memorandum of his professional fees and disbursements. He had the appellant sign an agreement which provided, among other things, that the fees and disbursements in the sum of VT2,108,000 were admitted as due and owing, and that the appellant would not dispute the bill.

In 2003, when the respondent sought to recover the fees and disbursements the appellant disputed the amount of the bill, and asserted that the sum of VT250,000 which he had paid the respondent on account of fees early in their relationship was sufficient to cover all the work done by the respondent. The appellant questioned the amount charged on many items where he admitted work had been done. He also contended that many of the items included in the memorandum of fees related to work that had been done for one Mr. Chaouch for whom the respondent also acted for a time in relation to the same Government activity about which the appellant had instructed the respondent to take action.

In the result the appellant paid nothing more to the respondent who commenced the proceedings in the Supreme Court on 10 December 2003 to recover the full amount of VT2,108,000. When the appellant filed a defence denying liability, the respondent applied for Summary Judgment for that amount. After a hearing before the primary judge, Summary Judgment was awarded for the full amount. It is against that judgment that this appeal has been brought.

Before the primary judge the appellant argued that at the time of the making of the agreement about fees with the respondent he was naïve, did not know the Vanuatu procedures and that the respondent took advantage of the appellant’s situation. He also argued that the respondent was dishonest and that the agreement was not valid because the appellant’s consent was vitiated ab initio.

The primary Judge found that the appellant could not substantiate the allegation of dishonesty or that the respondent had taken advantage of the appellant’s situation. As the appellant did not dispute the existence of the agreement concerning the respondent’s fees, and as the terms of the agreement were very clear, the Judge held that the appellant was bound by the agreement. Moreover the appellant had subsequently acknowledged his liability when he later collected his file from the respondent. The primary Judge did not enter upon a consideration of the numerous complaints the appellant sought to argue about individual items claimed in the respondent’s memorandum of fees.

When the appeal was called on, the Court raised with the respondent the well established legal principles that the relationship of lawyer and client is a fiduciary one, and that if a lawyer enters into an agreement with the client on any matter touching their relationship, the client should be independently advised. In the absence of independent advice, the agreement will not be enforced unless the lawyer is able to prove that the client was fully informed about the transaction, and fully understood it: see Halsbury’s Laws of England, 4^th Ed, Vol 44, para 118. The burden of discharging that onus of proof is a heavy one, and in the present case no consideration was given to that issue in the reasons for judgment of the primary Judge.

The respondent immediately acknowledged these principles, and also acknowledged the desirability of determination of lawyer’s fees and disbursements where they are disputed. He said he had never stood in the way of a determination, but this was not the avenue which the appellant had pursued.

After discussions with the parties, the appellant acknowledged that what he wanted was to have the amount of the bill considered, and his concern would be addressed by having a judge going through the bill on a determination. For his part, the respondent agreed to this course.

The Court was satisfied after a consideration of the papers that the fees and disbursements would, on the most optimistic view of the appellant’s complaints, exceed in the sum of 250,000VT paid on account.

For these reasons the Court with the consent of the parties entered the following Orders:

1. The appeal against the Summary Judgment is dismissed in so far as it holds that the appellant is liable to pay fees and disbursements to the respondent, but is allowed as to the amount of the fees and disbursements to be paid.
   
2. The respondent’s Memorandum of fees and disbursements must be determined in accordance with the rules and practice of the Supreme Court of Vanuatu, and that judgment be entered for the amount allowed on such determination.
   
3. The costs of the proceedings before the Supreme Court and this Court will be in the discretion of the judge having regard to the outcome of the determination.
   

We add two observations to this Memorandum lest there be any misunderstanding about the costs determination process by the appellant. First, on the costs determination he will be required to identify the items on the memorandum of fees which he disputes, and state why. This is something which he has already done, and he may not wish to add to notations he has already made on a copy of the memorandum of fees filed in these proceedings. The determining judge will consider each of the disputed items and will rule on each one after briefly hearing the parties. As a matter of practical necessity rulings on disputed items will usually be made without giving detailed reasons, and will be summary in nature. In ruling on each disputed item the determining judge will be exercising a judicial discretion. Whilst it is theoretically possible to appeal against discretionary decisions of that kind where a party is not satisfied, an Appeal Court will rarely interfere with the exercise of a determining judge’s discretion. In short, the decisions of a determining judge are usually treated as final.

Second, the appellant has challenged many items on the ground that the work related to Mr. Chaouch. However, at least whilst Mr. Chaouch was one of the co-petitioners in the constitutional petition which the respondent was pursuing for both the appellant and Mr. Chaouch, much of the work seems to have been performed for both petitioners jointly. For that work the respondent will be jointly liable for the professional services. The respondent is entitled to recover the full amount of the charges for such items from the appellant, even though Mr. Chaouch is also liable (provided of course that Mr. Chaouch has not already paid for that work).

DATED at PORT-VILA this 1^st day of November 2004

BY THE COURT

Vincent LUNABEK CJ
Bruce ROBERTSON J
John von DOUSSA J
Daniel FATIAKI J
Patrick Treston J
Oliver SAKSAK J