Home Information Cases Paul Spencer-White v Harding Evans LLP (2017)

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Paul Spencer-White v Harding Evans LLP (2017)

Summary

Fees charged for work completed by a firm of solicitors prior to the termination by its client of the agreement between them were properly payable pursuant to the firm's terms of business. The firm was entitled to retain all the client's papers and documents it held until monies owed for charges and expenses had been paid.

Facts

The appellant (S) appealed against an order awarding judgment to the respondent firm of solicitors on its claim for sums due to it in respect of work it carried out on S's behalf.

The respondent had acted for S for about nine years in relation to a large number of matters, most of which were commercial and residential property transactions. It also carried out work for S and his wife at that time jointly. The relationship between the respondent and S soured. S terminated his relationship with the respondent and did not instruct it on any new matters. The respondent invoiced S in respect of the fees and disbursements outstanding to it in respect of a proposed, but aborted, sale (the retainer). It acknowledged that it had sums belonging to S in its client account, but claimed it was entitled to retain them to be offset against the sums invoiced. S refused to pay, and the respondent exercised a lien over his files and issued proceedings. S claimed that he was under no obligation to pay the fees as he believed that the respondent had acted for his ex-wife in breach of assurances given to him that it would not do so. The judge gave judgment for the respondent on its claim, judgment for S for the repayment of sums retained and damages of £75, and directed that the sums awarded to S should be offset against sums due to the respondent.

S argued that the respondent was not entitled to (1) recover the sums due under the retainer since it was an entire contract and the sale had not been completed; and further, the respondent was in breach of an assurance given that it would not act for his ex-wife which became a term of the retainer; (2) a lien over the remaining files it held.

Held

(1) The "entire contract" argument was unconvincing. The respondent's terms of business identified that fees were charged on a time spent basis, so that all work completed prior to the termination of the retainer was properly payable. Payment was not contingent on the sale being completed and the solicitor did not bear the risk of non-completion. Accordingly, the respondent was contractually entitled to the sums payable (see paras 25-27of judgment). The assurance gave rise to a collateral contract and S had to establish a legal ground for his refusal to pay the fees. The respondent's terms of business set out the contractual basis on which each retainer for legal services was entered into and the assurance could not be implied into that contract, Marks & Spencer Plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72 applied. Accordingly, the judge's conclusion that the respondent was entitled to the fees due under the retainer was legally sound. Breach of a collateral contract gave rise to a claim for damages and did not entitle S to repudiate the main contract. The relationship between solicitor and client was a fiduciary one. The assurance given did not give rise to a fiduciary duty as it was not an inherent part of the parties' relationship, but arose out of the collateral contract. Consequently, the question of breach simply did not arise (paras 29-33, 38-40).

(2) The respondent's terms of business stated that upon termination of the agreement by S they were entitled to retain all papers and documents until monies owed for charges and expenses had been paid. The express words were broad and clear and encompassed both the files in connection with the retainer and other files it held (paras 42-44).

Appeal dismissed

Court of Appeal (Civil Division)
Rafferty LJ, Sharp LJ
Judgment date
14 June 2017
References