Slade (t/a Richard Slade And Co) v Abbhi [2018] EWHC 2039 (Comm)
Following a three-day Trial, the High Court found in favour of a Solicitor in respect of the terms of an oral agreement. With the benefit of hindsight, the Solicitor might have preferred to have put the agreement in writing.
Background of the Case
The Claimant (the sole principal in a firm of Solicitors) acted for the Defendant’s father-in-law (“Mr. Singh”) in respect of the latter part of proceedings against Mr. Singh’s son. On Mr. Singh’s death, the question to be decided was whether Mr. Singh’s son-in-law was liable for the Claimant’s fees and disbursements incurred whilst representing Mr. Singh.
Mr Singh had brought proceedings against his two sons for a declaration that the family’s property was held on a common intention constructive trust to give effect to the Hindu custom of mitashakvara by which the patriarch was entitled to partition the property, which would then be divided among defined male members of the family, in this matter Mr Singh and his two sons.
Mr. Singh was unsuccessful and his estate was insolvent. The Claimant sought £371,159.59 in respect of his fees and interest thereon. Most of the invoices had been rendered before Mr. Singh’s death, though the last five (totalling just under £16,000), were submitted either shortly before or shortly after Mr. Singh’s death.
The Alleged Agreement
It was alleged that the Defendant was liable for Mr. Singh’s legal fees pursuant to an oral agreement on 11 July 2013. This date was the first time the Claimant had met the Defendant and his wife (and before he had even met Mr. Singh). It had been arranged as the principal solicitor in Mr Singh’s former solicitors, Pillai & Jones, had been taken ill and replacement solicitors needed to be found to carry on conduct as Trial was approaching.
It was alleged by the Claimant that, in this meeting, the Defendant had informed the Claimant that Mr Singh would be unable to pay the Claimant’s fees and disbursements to be incurred in connection with the substantive action. It was further alleged the Defendant agreed that, in consideration of the Claimant agreeing to act for Mr Singh in the action, the Defendant would pay such fees and disbursements on Mr Singh’s behalf or lend Mr Singh sufficient funds to pay such fees and disbursements, pursuant to an earlier Loan Agreement (a copy of which was subsequently provided by the Defendant to the Claimant on 16 July 2013).
The Defendant denied that he reached any agreement with the Claimant at that meeting and specifically denied that he agreed he would either discharge Mr Singh’s fees or lend Mr Singh sufficient funds to discharge in full his liability to pay the Claimant’s fees. The Defendant acknowledged the existence of the Loan Agreement but noted it was entered into before the Claimant was retained by Mr Singh and expressly made clear that any further lending beyond previous loans was lending entirely within his discretion.
The issues for trial were whether there was any privity of contract between the parties and, if so, what kind of contract had they made.
Conclusions
Following consideration of the evidence, including contemporaneous discussions between the Claimant and the Defendant during the course of the matter and evidence of the Defendant providing interim payments on account of the fees, HHJ Russen QC preferred the Claimant’s account:
“I find it implausible that Mr Slade should have wished to attend the single-entrant beauty parade at the Capital Hotel for the prize of acting in burdensome and costly litigation with nothing more than a hope that he might, but only if Mr Abbhi so chose to exercise his discretion under the loan agreement, get paid something for his efforts.”
Having found this, HHJ Russen QC considered the question of what kind of contract had been paid. The Claimant contended the agreement was a funding arrangement, the Defendant contended it was merely a guarantee and dependent on Mr. Singh’s failure to pay. HHJ Russen QC concluded that, despite the terms of retainer having been signed by Mr. Singh and Mr. Singh being the client and therefore the contractual debtor, the agreement was nonetheless a funding arrangement:
“Whether or not Mr Abbhi assumed primary liability to fund the Action does not hinge upon the difference between the funding being up-front and on account or, as here, in response to quantification by client bills.”
Whilst the Solicitor was ultimately successful on this occasion, this case is a reminder of how difficult and costly establishing oral agreements can be, with this case turning on the witness evidence and a new version of events being given by the Defendant whilst giving oral evidence at Trial.