Fees – Estimate – Appellant solicitor providing estimate for services to respondent client – Cost of work exceeding estimate – Appellant refusing to continue to act on ground of non-payment of fees – Costs master deciding appellant in repudiatory breach of contract – Whether respondent having reasonable justification for withholding payment where bill exceed estimate – Appeal dismissed
The respondent had separated from his wife and had instructed the appellant solicitor to represent him at a final court hearing in respect of an occupation and non-molestation order that had been made against him.
The appellant had estimated that its overall charges and expenses would amount to £3,500 plus VAT and the respondent paid £2,000 on account. However, its first invoice was for £5,472.50, to which the respondent objected. The appellant explained that the estimate had been exceeded because of additional work caused by the fact that the respondent’s wife had left and was renting out the matrimonial hone. After carrying out further work, the appellant submitted a second bill for £1,092 and refused to undertake any more until it was paid.
At the hearing to assess the two bills, a question arose as to whether, during the course of litigation, a solicitor could refuse to undertake further work unless the client paid outstanding fees, or an amount on account, especially if the fees exceeded its estimate. The master, sitting as a costs judge, held that that constituted repudiation of the contract, which meant that the appellant was not entitled to any fees once the respondent had accepted that the contract had come to an end. The appellant appealed.
Held: The appeal was dismissed.
The master had not been wrong in concluding that, under the appellant’s standard business terms, the respondent had been justified in withholding payment. At £5,472.50, the bill exceeded the estimate by a significant margin. The estimate mattered to the respondent because he had limited funds, a fact of which the appellant had been aware. Although, in the retainer letter, the appellant had undertaken to provide written notice should an estimate be exceeded, the respondent had not been so warned; reasonable notice should have been given. The appellant was not contractually entitled, under its standard terms, to terminate its retainer on the ground of non-payment. Consequently, its refusal to carry out further work rendered it in breach of contract; that constituted a repudiatory breach, which the respondent had accepted. The contract had therefore been terminated and the master’s finding that the appellant, not the respondent, had terminated the retainer, was not flawed: Underwood Son & Piper v Lewis [1894] 2 QB 306 considered.
Per curiam: The outcome might seem to be harsh on the appellant. However, it should have made clear in its retainer letter the scope and nature of its engagement. It might then have been able to inform the respondent that matters concerning the letting of the matrimonial home did not fall within its ambit. Moreover, it should have complied with the terms set out in its retainer letter and its standard terms of business that obliged it to inform a client in writing when any previous estimate might be exceeded. It should then have considered whether the client had reasonable justification for not paying and whether it would be reasonable to terminate the contract for non-payment: it could do that only with reasonable notification.
Joshua Munro (instructed by Cawdery Kaye Fireman & Taylor) appeared for the appellant; Mark James (instructed by Routh Clarke Solicitors, of Leighton Buzzard) appeared for the respondent.
Eileen O’Grady, barrister
