Re a Solicitor: a taxation of costs [1955] 2 Q.B. 252

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The Law Reports (Queen’s Bench Division)
[1955] 2 QB 252
[QUEEN’S BENCH DIVISION AND COURT OF APPEAL]
In re A SOLICITOR.
In re A TAXATION OF COSTS.
1955 Jan. 11.
1955 April 4, 5, 22.
Gerrard J. Denning and Porker L.JJ. and Roxburgh J.
Solicitor — Costs — Lump or gross sum charge — “Contentious” business — “Non-contentious” business — Client’s petition for judicial separation prepared — Change of solicitor before filing of petition — Whether first solicitor entitled to submit lump or gross sum bill — Whether matters contained in bill wholly non-contentious — Solicitors’ Remuneration Order, 1953 (S.I. 1953, No. 117 (L.1)), Sch. 2.
A client instructed solicitors in her matrimonial affairs and they carried out work on her behalf up to and including the preparation and engrossment of a petition for judicial separation. Before the petition was filed she terminated their retainer and instructed other solicitors. The first solicitors delivered to the client a lump sum bill for their work:—

Held (by the Court of Appeal) (1) that, to distinguish between contentious and non-contentious business, regard must be had to the nature of the business done and not to the time when it is performed. If work done before a writ is issued is of such a nature that if the case went for trial the costs in respect of it would properly be allowed on a party and party taxation, then it is contentious business even if a writ is not in fact issued, but if the work would not be so allowed then it is non-contentious.

(2) That under the Solicitors’ Remuneration Order 1953 , a solicitor may still deliver a bill of costs consisting of a lump sum charge in relation to non-contentious matters, provided that it contains a summarized statement of the work done sufficient to tell the client what it is for which he is asked to pay, but if contentious matters are included with non-contentious, the bill is bad and the solicitor may be ordered to deliver a separate bill with detailed items and charges in respect of the contentious business.

(3) That, in the present case, part of the business was of a contentious nature and, therefore, two separate bills should have been presented.

Decision of Gerrard J. affirmed.
SUMMONS adjourned into open court.

The facts, which are stated in detail in the judgment of Gerrard J., were briefly as follows: In March, 1953, a client who was previously resident in South Africa consulted a firm of solicitors concerning her matrimonial affairs. The solicitors advised her, amongst other matters, on questions of domicile, the custody of her children and maintenance from her husband, and took a proof of evidence of her matrimonial life. They obtained 253counsel’s opinion on the question of domicile, attended a conference with counsel on the question of jurisdiction, instructed counsel to draft a petition for judicial separation, instructed inquiry agents on the client’s behalf, instructed counsel to redraft the petition and generally acted in the preparation of her case. On June 14, before the petition was filed, the client terminated her retainer and instructed other solicitors.

The second solicitors received the papers in the case from the first solicitors and then negotiated with the husband’s solicitors until December, 1953, when negotiations broke down. On December 23, 1953, her petition, for the most part as drafted by counsel instructed by the first solicitors, was filed, and on December 26, 1953, it was served on the husband.

On September 3, 1953, the first solicitors delivered to the client a lump sum bill for their costs. The bill was very detailed but not itemized. An itemized bill of costs was requested and refused, and the client thereupon issued a summons for an order that the first solicitors should deliver a detailed bill of their fees, charges and disbursements. On December 16, 1953, the master ordered them to deliver a bill of costs.

The solicitors appealed.

Sir Hartley Shawcross Q.C. and Colin Duncan for the appellants.

Maurice Lyell Q.C. for the respondent.

Cur. adv. vult.
Jan. 11. GERRARD J. read the following judgment: The client and her husband lived in South Africa for some years until February, 1953, when, because of difficulties which had arisen between them, she left that country. She arrived in England towards the end of the next month, and almost immediately sought the advice of the solicitors, to whom I shall refer as the first solicitors, about her matrimonial troubles. They advised her that it would be in her interest to have ready a petition for judicial separation, so that in the event of her deciding to institute proceedings, it could be filed at short notice and served upon the husband on one of his periodical visits to this country.

The first solicitors took a proof of evidence from the client, employed inquiry agents to watch the husband, and consulted counsel. On June 3, 1953, counsel settled a draft petition praying for a judicial separation, the custody of the children of the marriage, alimony pending suit, and permanent alimony for the 254client and the children. That draft petition was based upon certain allegations of cruelty. After the client had, with the first solicitors, considered counsel’s draft, it was decided that certain amendments were necessary. On July 9, 1953, counsel redrafted the petition. In the redraft, certain allegations of adultery, based in part on the agents’ inquiry, were added. The client approved the redraft, and the document was engrossed by the first solicitors in order that proceedings might be launched at any moment if the client gave instructions for that to be done. At the same time the first solicitors were advising the client upon offers of financial provision made to her on her husband’s behalf.

On July 14, 1953, she decided to terminate the retainer of the first solicitors, and retained another firm of solicitors, to whom I shall refer as the second solicitors. They conducted negotiations with the husband’s advisers with regard to financial provision for the client and also employed inquiry agents to watch the husband. In December, 1953, the client decided to file the petition for judicial separation. The engrossment of the amended draft petition settled by counsel was treated as a draft and considered by the client under the guidance of the second solicitors. Very minor alterations were made in three of the first 28 paragraphs, and a further allegation of adultery alleged to have taken place in London in October, 1953, was added. The prayer was amended by praying for the discretion of the court to be exercised in the client’s favour.

The petition in its final form was filed on December 23, 1953; service was effected on the husband on December 26, 1953, when he was visiting this country. The husband entered appearance under protest, objecting to the jurisdiction of the court. I understand that recently the question of jurisdiction was decided in the client’s favour. On September 3, 1953, the first solicitors delivered to the client a document containing a very detailed description of the work they had done on her behalf. The document contained a statement of their disbursements. It was not an itemized bill of costs in the traditional form; it was a lump sum bill which the first solicitors maintained complies with the Solicitors’ Remuneration Order, 1953. The client was advised by the second solicitors to challenge the first solicitors’ right to present a bill in that form, and in due course sought and obtained on December 16, 1953, an order from Master Harwood that the first solicitors should deliver a bill of costs.

The first solicitors appealed from this order and the appeal came before me on February 10, 1954, for the first time. I was 255asked to decide two points: (1) whether, having regard to the Solicitors’ Remuneration Order, 1953, the document was a good bill, and (2) whether, having regard to that Order, the court could compel the delivery of a traditional itemized bill of costs. At the hearing of the appeal I was not asked to consider the terms of the document of September 3, 1953; I was asked to treat the matter on the agreed footing that its contents related solely to non-contentious business, falling within the Solicitors’ Remuneration Order, 1953, which solely concerns that form of business.

After hearing argument upon that agreed footing, I was about to deliver judgment in chambers in favour of the first solicitors when I was asked by Sir Hartley Shawcross, who appeared on their behalf, if I would reserve judgment and deliver it in court, so that the matter might be reported, as the first solicitors and the Law Society, who were interested in the matter, regarded the case as of great importance to all solicitors. I agreed to adopt this course. When I had prepared my judgment on the agreed footing, my attention was drawn to some of the work described in the document of September 3, 1953. It occurred to me as at any rate possible that some of the business to which the document refers was not non-contentious business, and if that were so, my judgment would be given on a wrong, though agreed, basis. This was a situation which I did not relish, and I asked the parties to appear before me again. I informed counsel that although I had not come to any conclusion about the matter, I did not think it was by any means certain that the agreed basis was correct. I then learned for the first time that a petition had in fact been filed shortly after the hearing before the master. After some discussion between counsel, it was agreed that I should be furnished with the history of the case on affidavit, and that I should be asked to consider whether the whole of the business to which the document of September 3, 1953, related was in fact non-contentious business, it being conceded that if any part was not, the document could not come within the Solicitors’ Remuneration Order, 1953. I heard the argument on this part of the case on November 24, 1954. I was asked to agree, and rightly or wrongly I did agree, that I would include in my judgment, whatever the result of the appeal, my reasons for the conclusion which I had already indicated, namely, that, assuming the whole of the business referred to in the document of September 3, 1953, to be non-contentious business, the document would be a good bill, and the order of the master could not be supported.

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I think it would be convenient if I give those reasons first. The decision of the matter involves a consideration of Solicitors’ Remuneration Orders before that of 1953. I have to start with the Order of 1883, but because of the assumption I am making in this part of my judgment, I need not refer to the parts of the Order defining the business it covers; I can go straight to paragraph 2 (c). I ought to mention here, to avoid confusion, that nobody seems quite sure whether it is right to call the Order the Order of 1883 or 1882. It is in fact called by both titles. Paragraph 2 (c) of the Order reads: “In respect of business not herein-before provided for, connected with any transaction, the remuneration for which, if completed, is herein-before, or in Schedule 1 hereto, prescribed, but which is not, in fact, completed, and in respect of settlements, mining leases or licences, or agreements therefor, re-conveyances, transfers of mortgage, or further charges, not provided for herein-before or in Schedule 1 hereto, assignments of leases not by way of purchase or mortgage, and in respect of all other deeds or documents, and of all other business the remuneration for which is not here-before, or in Schedule 1 hereto prescribed, the remuneration is to be regulated according to the present system as altered by Schedule II hereto.” I draw attention to the words “according to the present system.” They relate to traditional detailed solicitors’ charges. Schedule 2 reads thus: “Such fees for instructions as, having regard to the care and labour required, the number of and length of the papers to be perused, and the other circumstances, as to drawing etc., the allowance shall be ….”

The Solicitors’ Remuneration Act General Order, 1920 , is the next material Order, but I need not quote from it because it was, with variations not material to the present issue, re-enacted by the Solicitors’ Remuneration (Gross Sum) Order, 1934 . That Order provides as follows: “Without prejudice to the power possessed by the Court under the Solicitors Act, 1932 , or otherwise or to the powers conferred upon the solicitor or the party chargeable with the bill under section 66 of the Solicitors Act, 1932 , the remuneration of a solicitor in respect of all business regulated by clause 2 (c) of the General Order of 1882 as amended by ally subsequent General Order may at the option of the solicitor be by a gross sum in lieu of by detailed charges: Provided that within six months after delivery of a charge made under this Order, whether it has been paid or not the client may require that a detailed bill of charges shall be 257delivered and the solicitor shall thereupon comply with the requisition and any bill so delivered shall be subject to taxation as if the provisions of this Order with respect to the regulation of remuneration by gross sum had not been made.”

The significant features of the Orders of 1920 and 1934 are (1) a charge by gross sum may be made; (2) the client may, within a limited time, require that a detailed bill of charges shall be delivered, and that any bill so delivered shall be subject to taxation in the ordinary way as if no gross sum charge were permissible.

The Order of 1934 was revoked by the Solicitors’ Remuneration Order, 1953, in which, by paragraph 2, for the words “according to the present system as altered by Schedule 2 hereto” contained in paragraph 2 (c) of the Order of 1883 there were substituted the words “in accordance with Schedule 2 hereto.”

It is contended on behalf of the first solicitors that this new schedule is intended to make two significant changes in the law with regard to solicitors’ remuneration for non-contentious business.

The first is that a solicitors’ remuneration is to be such sum as may be fair and reasonable having regard to all the circumstances of the case and, in particular, to certain criteria laid down in the schedule. It is, I think, clear that in relation to business within the scope of Schedule 2 the principles of remuneration have changed and the schedule has substituted a more realistic method of ascertaining what the work done is really worth. About the substitution of these new principles of remuneration there is indeed no issue.

It is with regard to the second alleged change that the dispute arises. It is contended for the first solicitors that although Schedule 2 of the Order of 1953 makes no specific reference to charging by way of a gross or lump sum and revokes the Solicitors’ Remuneration (Gross Sum) Order, 1934 , it still enables a solicitor to deliver a lump sum bill in relation to business within its scope, and that in place of the protection given to the client by the Orders of 1920 and 1934, under which he could call for a detailed bill of charges and have it taxed, a new method of protecting the client who receives a lump sum bill has been provided by the Order of 1953.

In Schedule 2 of the Order of 1882 reference is made to “fees.” In Schedule 2 of the Order of 1953 appear the words “such sum,” “the sum charged,” “a fair and reasonable sum,”

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“the sum so certified” and “the reasonableness of his charge.” It seems to me that these words clearly visualize the charging of a lump sum.

The arguments put forward on behalf of the client were, as I understand them, these: prior to the Solicitors’ Remuneration Act General Order, 1920 , it was a fundamental principle that a bill had to be in a form which would enable the client to take it to an independent solicitor and obtain advice upon it; as it was put in Duffett v. McEvoy,[1] to “enable the party to judge of the goodness of the items.” It was argued that although the gross sum Orders of 1920 and 1934 gave a right to a solicitor to charge by a lump sum, the fundamental principle was preserved because the client could, at his option, require a detailed bill of charges, and if, upon advice, he was not satisfied of the goodness of the charges, he could have the bill taxed. It is said that the client now is not given by the Order of 1953 any express right to require the delivery of a detailed bill, and as there are no express words giving a solicitor a right to charge by way of a lump sum, the wording of the Order is not sufficiently strong to allow a lump sum charge to be made or to take away the ancient right of a client to have a detailed bill, and that therefore the document of September 3, 1953, is not a good bill.

Now it is true that Schedule 2 of the Order of 1953 does not enable the client to call for a detailed bill. It would be a very odd thing if the Order were intended to deprive a solicitor of a right which he has enjoyed since 1920; but the mere oddity of that situation is not the test of the effect of the Order. I think it is clear that, taking the schedule as a whole, the “present system” referred to in the Order of 1883 has plainly been replaced by a new system, and the new system involves a liberty to charge by way of a lump sum and gives a new form of protection to the client, the sufficiency of which can only be judged in the course of time. The right of the client to have the bill taxed is not affected, and the client may require the solicitor to obtain a certificate from The Law Society certifying that the sum charged is fair and reasonable, or, if it is not, what is a fair and reasonable sum, and the sum so certified, if less than that charged, shall, in the absence of taxation, be the sum payable. Further, before the solicitor brings proceedings to recover costs on his bill, he must, unless the costs have been taxed, have drawn the attention of the client in writing to his 259right to require the solicitor to obtain such a certificate from The Law Society as I have mentioned and to the provisions of the Solicitors Acts, 1932–1950 , with regard to taxation of costs; and, if the taxing master allows less than one-half of the amount charged, he shall bring the facts of the case to the attention of The Law Society. It seems to me that the Order of 1953 has not deprived a solicitor of the right to make a lump sum charge, and that its object is to effect what one may perhaps call a further “modernising” of solicitors’ charges in a process which began with the gross sum Order of 1920. On any taxation of a bill delivered under Schedule 2 of the Order of 1953, the taxing master will no doubt require evidence to satisfy himself that the charge of the solicitors is fair and reasonable, and will not, I imagine, be hampered by the absence of a long traditional itemized bill of costs. The solicitor may be hampered if he has not kept careful records of the work done. Therefore, if the business for which the first solicitors seek to charge in the document of September 3, 1953, is wholly non-contentious business, the order of the master cannot, in my view, be supported.

I now turn to the second aspect of the matter. As I have indicated, it is submitted on behalf of the client that the document of September 3, 1953, relates in part to contentious business, and it is common ground that if that submission is correct, the first solicitors have not delivered a “good bill” under the Order of 1953.

In order to discover the sorts of business to which that Order relates it is necessary to go back to the Solicitors’ Remuneration Act of 1881. It is entitled “An Act for making better provision respecting the remuneration of solicitors in conveyancing and other non-contentious business.”

By section 2, certain persons were empowered to make General Orders prescribing and regulating the remuneration of solicitors in respect of certain classes of business. After setting out the persons entitled to make Orders, the section states: “… may from time to time make any such General Order as to them seems fit for prescribing and regulating the remuneration of solicitors in respect of business connected with sales, purchases, leases, mortgages, settlements, and other matters of conveyancing, and in respect of other business not being business in any action, or transacted in any court, or in the chambers of any judge or master, and not being otherwise contentious business ….” There follow words which give 260power to revoke or alter any Orders that are made. Those classes may be briefly described as (a) business connected with matters of conveyancing, and (b) all other business of a non-contentious nature. The business comprised in class (b) appears to me to consist of two kinds: (1) business which is not business in any action or transacted in any court or in the chambers of any judge or master, and (2) other business which is not for any other reason contentious business.

In In re The Merchant Taylors’ Co.[2] Cotton L.J. used these words[3]: “Under the Act I think it clear that what was meant was business other than conveyancing business, not being business in chambers or other contentious business.” Clearly the section confined the power to make Orders to the regulation of remuneration for those sorts of business the nature of which is defined by eliminating every kind of contentious business.

It is convenient next to consider the Orders made under the section. The first was that of 1882, or as it is sometimes called the Order of 1883. Paragraph 2 of the Order does not exactly copy the wording of section 2 of the Act: it omits the words “and not being otherwise contentious business.” This seems to me a curious state of affairs. It is only in paragraph 4 of the Order that there is a reference to contentious business, and that is in order to provide that the prescribed remuneration for matters of conveyancing business is not to include any business of a contentious character or any proceedings in any court.

What is the effect, if any, of the omission from the Order of the words in section 2 of the Act? If one looks only at the Order, ignoring matters of conveyancing, there would appear to be one test of whether business falls within paragraph 2: is the work done business in any action or transacted in the court of any judge or master? If it is, it does not fall within the Order; if it does not, then it does. This hardly seems to keep in line with the power to make Orders given by section 2, and it is not consistent with that part of paragraph 4 of the order to which I have referred. The words there used, like section 2 of the Act, clearly visualize business of a contentious character outside as well as inside proceedings in a court.

The words of the Order cannot govern the Act, but the Act does govern the Order. I cannot hold that what is not business in an action or transacted in any court or in the chambers of any judge or master must be non-contentious business; that would 261not march with section 2 of the Act. Whatever difficulties there may be in interpreting the Order, it cannot alter my obligation to ask of the work done by the first solicitors: was it contentious business within the meaning of those words in the Act? If it was, then the Order cannot be applicable.

So far I have been concerned with the Order of 1882 and considered matters as I think they stood under the Act of 1881. But the Solicitors’ Remuneration Act, 1932 , a consolidating Act, has to be considered. By section 56 of that Act, there is substituted for the power to make Orders given by section 2 of the Act of 1881 a new power to make Orders regulating the remuneration of solicitors in respect of non-contentious business. Section 82 (2) of the Act of 1932 provides that the Order of 1882 is to be treated as an Order under and for the purposes of the corresponding provisions, for this purpose section 56, of the Act of 1932. So the Order of 1882 was given a new lease of life, and indeed the Order of 1953 is merely an amendment of it made pursuant to section 56 of the Act of 1932.

A definition of non-contentious business appears in section 81 of the Act of 1932. It is of what I may call “the including” sort; it merely names some of the more obvious forms of non-contentious business as being included within that term. There is also a definition of contentious business of the same sort, naming obvious forms of contentious business. It does not seem to me that these forms of definition, or the fact that the Order of 1953 was made pursuant to section 56 of the Act of 1932, should cause me to change the conclusion I have previously expressed that there may be contentious business which is not business in any action or transacted in any court or in the chambers of any judge or master. Indeed, that distinction is still recognized in paragraph 4 of the Order of 1883 as it stands amended today.

The first solicitors, as I have said, did their work relating to this matter before the filing of the petition. The matter had passed out of their hands for some months by the time the petition was filed. Were they engaged in contentious or non-contentious business? I have reached a conclusion after considerable hesitation. I was referred to certain authorities, but I agree with counsels’ view that they do not greatly assist me in this matter; I shall have to refer to some authorities, but they will appear in their proper context at a later stage. I think it of assistance to consider the position which would have arisen if there had been one firm of solicitors acting throughout. As the petition has now been filed, it appears to me that in the event 262of an order being made in the pending proceedings, either by agreement or after the hearing of the petition, that the husband should pay the wife’s taxed party and party, or solicitor and client costs, the costs to which the client will be entitled will have to be ascertained by reference to R.S.C., Ord. 65, Appendix N. Rule 66 (3) of the Matrimonial Causes Rules, 1950 , provides that in any cause or matter to which those rules apply, and they will apply in the pending proceedings, the costs allowed to the solicitors and the taxation of such costs shall, except where the Matrimonial Causes Rules, 1950 , otherwise provide, and that does not arise here, he in accordance with the provisions of R.S.C., Ord. 65, so far as the same are applicable. Order 65, r. 8, provides that in causes or matters commenced after the rules came into force, solicitors shall be entitled to charge and be allowed fees set forth in the column headed “lower scale” in Appendix N in all causes or matters, and “no higher fees shall be allowed in any case, except such as are by this Order otherwise provided for; and in causes and matters pending at the time when these Rules came into operation, to which the higher scale of costs previously in force was applicable, the same scale shall continue to be applied.” Rule 9 provides for costs being allowed on the higher scale on special grounds, and there are other rules governing the amounts which may be allowed on taxation.

On any taxation on such an order as I have visualized, I think it is clear that some of the work done by the first solicitors, and to which the document of September 3, 1953, relates, would have to be dealt with under items 72 and 82 in Appendix N, subject to the discretionary powers of a taxing master under Order 85 to increase the items.

In the petition, allegations are relied upon which have their origin in work done by the first solicitors. Had there been one firm of solicitors acting throughout, that work would have had to be itemized in their bill of costs for the purpose of ascertaining the amount of costs payable by the husband under the order. A taxing master may, under Order 65, allow costs in respect of work done before the filing of a petition if, in his opinion, they have been properly incurred in obtaining materials proving of use and service in the proceedings. The authority for that is Pêcheries Ostendaises (Soc. Anon.) v. Merchants Marine Insurance Co.[4] and Frankenburg v. Famous Lasky Film Service Ld.[5]

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Although there has been a change of solicitors, in my judgment if an order for the payment by the husband of the client’s taxed costs is made, the second solicitors will have to include in their bill for taxation appropriate items in respect of the work done by the first solicitors upon the basis of which a substantial portion of the petition is founded. For, if such an order is made, the client has a right to recover from the husband all her proper costs of the proceedings, including those relating to work done on her behalf by the first solicitors. As there is a cause or matter, that is a basis upon which a taxation must proceed. Then by the rules the costs may relate back to work done when there was no cause or matter.

The difficulty in the dispute arises from the fact that at the date of the termination of the first solicitors’ retainer, and indeed at the date at which this matter came before the master, the petition had not been filed, and there was then no cause or matter. I understand Mr. Lyell to contend on behalf of the client that these circumstances are immaterial, and that as upon any taxation in the pending proceedings items in respect of the work done by the first solicitors will fall to be considered under Order 65, Appendix N, those items can never have had the quality of non-contentious business. He also contended that because items are to be found in Appendix N, which would cover work done by the first solicitors, that work cannot be non-contentious business.

Sir Hartley Shawcross, for the first solicitors, submitted that when they were acting there was no contention, and that there must be at least two parties contending before there can be a contention, and therefore before there can be contentious business. He pointed out that there is no evidence that the husband or his advisers had knowledge of the fact that inquiries and preparations were being made by the first solicitors with the object of launching the petition if it were thought expedient. Sir Hartley further argued that the business in which the first solicitors were engaged could not be contentious business because there was then no filed petition, and that Order 65 could have no relevance to the first solicitors’ costs, because it solely concerns the costs when there is a cause or matter, and there was none at the date when the retainer ended and they became entitled to demand their costs.

It seems to me that the test of whether business is contentious or not must be capable of being applied at the date when the solicitors were entitled to present their bill. The client might in 264July, 1953, have decided, after the first solicitors had done all their work, to drop the idea of taking proceedings, or she might have decided to return to South Africa and see what the law of South Africa could secure for her. In either of these events, the first solicitors would have been entitled to ask for their costs, and to proceed to recover them. Clearly the test of whether they would then have been entitled to remuneration on a contentious or non-contentious basis should not be a guess as to whether the client would take proceedings at some date in the future. Further, it does not seem to me possible to say, merely because she might at some date file a petition and thereafter obtain an order for costs, which then must be taxed under Order 65, or merely because appropriate items appear in Appendix N, that solicitors seeking remuneration at a period when it was quite unknown whether a petition would ever be filed must demand their costs on the basis of Order 65, which only applies, even by relation back, when there is a cause or matter. So I am unable to accept Mr. Lyell’s contention; but as I have said earlier, I am also unable to take the view that there cannot be contentious business outside the business in actual proceedings.

It is no doubt right that when the first solicitors were acting, the charges the client was minded to make against the husband had not been communicated to him ar his advisers, nor, so far as I am aware, had any intention to make the charges been communicated to him or them, and there was then no contention between the parties in the sense in which Sir Hartley Shawcross used that word. But I do not think that I have to ask myself if there was then a contention in that sense. I think I have to ask myself what was the nature of the business upon which the first solicitors were then engaged, and to decide upon its proper description. It was the collection of information and the taking of all steps, even to the engrossment of a petition, necessary to launch proceedings hostile to the husband at the moment the client gave the word, the background to this work being that differences had arisen between the client and her husband which had resulted in her leaving the matrimonial home and South Africa at his suggestion. It seems to me that it is impossible without doing violence to language to describe that business as non-contentious. I hold that the document of September 3, 1953, related in part to contentious business, and the appeal therefore fails.

I ought to add this, that it would appear that the conclusion I have arrived at is not consistent with the decision of Neville J. 265in In re R. P. Morgan & Co.,[6] but having carefully considered the argument addressed to me, and paid all due attention to that decision, I have felt bound to come to the conclusion which I have already expressed.

Appeal dismissed.

The solicitors appealed.

April 4. Sir Hartley Shawcross Q.C. and Colin Duncan for the solicitors. This appeal raises important questions in relation to solicitors’ costs and, in particular, to the costs to which they are entitled in contentious and non-contentious business respectively. The question is one of the greatest general importance in connexion with the everyday work in a solicitor’s office and it is very desirable, if possible, that the court should indicate for the guidance of the profession where the line is to be drawn between the two classes of business. It would be better to have a hard-and-fast line even though it created some anomalies, because there are a number of taxing masters and they may take different views on the question. On first principles it is submitted that contentious business is that which involves only a litigious contention. It is a misuse of language to describe as contentious in the present context anything which does not involve contention between two or more parties. Any legal work may become contentious in futuro, e.g., the drafting of a conveyance or a will, or even the giving of an opinion, since they may later be the subject of, or lead to, litigation. But that does not make the business contentious at the time when it was done. The definitions given in section 81 of the Solicitors Act, 1932 , on the distinction between contentious and non-contentious business confuse the issue. The section says that contentious business includes any business done by a solicitor in any court, and describes non-contentious as including “any business connected with sales … settlements and other matters of conveyancing.” The section does not define the meaning to be attached to the words contentious or non-contentious and leaves uncovered an undefined intermediate area, namely, business not in court and not connected with conveyancing.

Where, then, is the line to be drawn between the two classes of business? It would appear from In re R. P. Morgan & Co.[7] that the courts have apparently drawn the line at the date of the issue of the writ or other process and held that anything done 266outside court before the commencement of proceedings, although directly related to contemplated or even inevitable proceedings, is non-contentious, while anything done in relation to court proceedings already commenced, whether done in or out of court, is contentious. Against that view it might be argued that some costs incurred before writ issued, e.g., advice, settling writ and the like, are allowed on a party and party taxation between litigants, but the flaw in that argument is that such items only become contentious ex post facto and if the writ had not been issued they would, on the theory suggested, have remained non-contentious. If the first paragraph of the headnote in In re R. P. Morgan & Co.[8] is accurate, namely, that the drawing of a case for counsel to advise in contemplation of litigation is non-contentious business, the contention for the appellants on this point must be right. Neville J.’s decision in In re R. P. Morgan & Co.[8] was followed in the Irish case of In re The Rathmines and Rathgar Improvement Commissioners and Field[9] and was also supported by an opinion given by Mr. R. S. Wright (afterwards Wright J.) in 1888 and published in the Law Society’s Digest for 1923. It is very much in point that the Judicature Act, 1925 , authorizes the making of rules of court in regard to costs only in the case of proceedings in court. The Schedules laid down by the rules cannot, in law, have any application to business before the commencement of proceedings.

The view taken by Neville J. in In re R. P. Morgan & Co.[10] has been followed ever since until recently, when different views have been taken in the taxing office. It is submitted that Gerrard J. had no material or authority before him which entitled him to dissent from or disregard a practice which had been in force for nearly 70 years. To sum up the appellants’ contention on the first point raised: to constitute contentious business, the business must involve the existence of two parties between whom a lis exists, and, if that is so, until proceedings have been started by the issue of a writ or other legal process, the business is still non-contentious. The issue of the writ is the only point at which a definite line can be drawn dividing the two classes of business and that view is supported by authority and long, continued practice.

The second question is whether the bill delivered by the solicitors in the present case was a proper one at the date when it was delivered having regard to the fact that it was a lump 267sum and not an itemized bill. If, as is contended, the bill was in relation to non-contentious work, it is submitted that the bill delivered was in order. The Solicitors Remuneration Act, General Order, 1920 , made under section 2 of the Act of 1881, allowed for the delivery of a gross sum bill in the case of non-contentious work, subject to the right of the client to demand an itemized bill within 12 months. That was revoked by the Solicitors Remuneration (Gross Sum) Order, 1934 , which was to the same effect but substituted for 12 months a period of six months within which an itemized bill could be demanded. The Solicitors’ Remuneration Order, 1953, preserved the solicitor’s right to deliver a lump sum bill in relation to non-contentious matters. It did not renew the client’s right to demand an itemized bill, but substituted a safeguard for the client by permitting a reference of the bill to the Law Society for a certificate of reasonableness, and preserved, subject to the discretion of the court, the client’s right to taxation. What is required now in the case of a bill for non-contentious work is that it should contain a summarized statement of the work carried out which is sufficient to tell the client what he is paying for, and the bill delivered in the present case satisfied that requirement. [Société Anonyme Pêcheries Ostendaises v. Merchants Marine Insurance Co. Ld.[11] was also referred to.]

Maurice Lyell Q.C. and John Shaw for the client. Gerrard J. was right in ordering the solicitors to deliver two bills of costs, an itemized bill in relation to the contentious business and a second bill, which might be a lump sum, in respect of non-contentious business done for the client. The important question in the present case is the distinction to be drawn between contentious and non-contentious business, and it is submitted that the difference is to be ascertained by considering the nature of the business in question and that it cannot be determined by drawing a hard and fast line at the date of the writ. The decision in In re R. P. Morgan & Co. Ld.[12] that the obtaining of counsel’s opinion in contemplation of litigation is not contentious is accepted, but it is submitted that there are cases in which a case to advise may be a contentious matter for which the costs would be allowed on a party and party taxation. In the Taxing Masters Notes, compiled in 1902 (see the Annual Practice, 1954, p. 2834), the opinion is expressed that “a case to advise before action may be allowed as between party and party, if really 268useful and necessary, but sparingly.” It would, therefore, appear that when the costs of an opinion or other business done before action could be recovered against the other side on a party and party taxation, the business in question should be regarded as contentious, and it is submitted that the drafting of a petition for judicial separation, in and event, could have no other purpose than a contention. In respect of that item and others considered to be contentious business by Gerrard J., he rightly decided that the solicitors must deliver an itemized account.

With regard to the question of what particulars must be given in the case of a bill for non-contentious business, the position is that since the Solicitors’ Remuneration Order, 1953, a lump sum bill may still be delivered without detailed charges, as permitted by the Solicitors’ Remuneration Order, 1920 , but it must contain summarized charges which will indicate to the client the nature of the work for which he is being called on to pay, including particulars of the time expended and the numbers of the documents prepared. That information was not provided in the present bill, and in its absence there might be a question whether the bill would have been a good one so far as non-contentious business was concerned.

Gerrard J. held that the bill would have been good if it had related entirely to non-contentious business but that the inclusion in it of items in relation to contentious business rendered the delivery of an itemized bill in respect of such items necessary. He came to a correct decision and the appeal should be dismissed. [Reference was also made to Lumsden v. The Shipcote Land Co.[13]]

Sir Hartley Shawcross Q.C. replied.

Cur. adv. vult.
April 22. The following judgments were read.

DENNING L.J. The facts of this case are fully set out in the judgment of Gerrard J., [14] and I need not repeat them again. They raise important questions about solicitors’ costs.

There is a great difference for solicitors between “contentious business” and “non-contentious business.” A bill for contentious business must be made out item by item, with a separate charge against each item; but a bill for non-contentious business can be charged by a lump sum. The difference in the method of charging leads to a difference in the amount which the solicitor 269receives. Non-contentious business is, I believe, more remunerative than contentious business.

Although the difference is so important to solicitors, there is no clear guidance to be found anywhere to enable the profession to distinguish between contentious business and non-contentious business. The Solicitors Act, 1932 , evades the issue. In section 81 it says, what is obvious, that “contentious business” includes business in court, and that “non-contentious business” includes conveyancing business; but this does not help to decide difficult cases. The section does not say what “contentious business” means or what “non-contentious business” means.

We are thus left to find out for ourselves. Sir Hartley Shawcross asked us to draw a clear line for the guidance of the profession. We should have liked to accede to his request if we could. It seems to me that if a clear line is to be drawn there is only one possible place for it, namely, the issue of the writ or other originating process in the courts of law. All business before that date could be said to be non-contentious, and all business afterwards to be contentious. It would be very convenient if we could draw that line, but I do not think that we are at liberty to do so, for the simple reason that it is not the line drawn by Parliament. The statutory distinction depends on the nature of the business — contentious or non-contentious — not on the time at which it is done.

Let me test the position by taking a case where a client asks his solicitor to bring an action. The solicitor thereupon instructs counsel to draft the writ and the statement of claim to be served with it. If the action goes for trial, the costs of that work are recoverable as costs in the action. They are not disallowed simply because the work was done before the writ was issued. It is clearly contentious business. Now suppose that in that very case the solicitor had to take statements from witnesses so as to enable counsel to settle the statement of claim. If the action goes for trial, the cost of that work would also be recoverable as costs in the action: see Société Anonyme Pêcheries Ostendaises v. Merchants Marine Insurance Co. Ld.[15] and Frankenberg v. Famous Lasky Film Service Ld.[16] It would also be contentious business.

Now suppose that after the solicitor had done all that work, but before the writ was actually issued, the case was settled by 270the defendant paying the claim. Does the work take on a different character simply because the case was settled? Surely not. If it is contentious business when the case goes for trial, it is also contentious business when the case is settled before the writ is issued. The issue of the writ does not alter the nature of the business; nor should it alter the method or amount of the solicitor’s charges. He should get the same reward for the same work, no matter whether the case goes for trial or is settled the moment before writ issued or the moment after it.

So far there is no difficulty; but suppose that a solicitor asks counsel to advise on the prospects of success before he instructs him to settle the writ. Would the case to advise be contentious business or not? I can well see that in many cases a case to advise on the client’s rights would be non-contentious business: see the opinion of Mr. R. S. Wright (afterwards Wright J.), dated January 13, 1888, published in the Law Society’s Digest (1923 ed.), and also In re R. P. Morgan & Co.[17] But there are some cases where a case to advise may be contentious business. The taxing masters in their practice notes say that “a case to advise before action may be allowed as between party and party, if really useful and necessary, but sparingly” (see the Annual Practice, 1954, p. 2834). It seems to me that in those cases where the costs of an opinion can be recovered against the other side, it must be contentious business.

These illustrations persuade me that where the work done before writ is such that, if the case went to trial, it would properly be allowed as against the other party on a party and party taxation, then it is contentious business, even though a writ is not in fact issued; but if the work would not be allowed on a party and party taxation, it is not contentious business. I am aware that this test sounds vague and indefinite, but the managing clerks in solicitors’ offices have a very good idea of what business will or will not he allowed on taxation, and I feel sure that they will be able to apply this test and say without difficulty what is contentious business or not. All work done in the cause itself after writ is, of course, contentious.

Sir Hartley Shawcross said that, when no writ or other process was issued, there was no scale by which to charge for contentious business, and he pointed out that it might happen that a case was settled before it was decided whether it should be taken in the High Court or the county court. This is, no 271doubt, true, but I do not think it should give rise to any difficulty in practice. The taxing masters will act on analogy to R.S.C., Appendix N. They will tax the bill on the same footing as if a writ had been issued. In case of doubt whether it would have been a High Court or county court action, they will, I expect, give the solicitor the benefit of the doubt and allow him to charge on a High Court scale.

Applying the principles which I have stated, I have no doubt that a good deal of the business contained in this bill was contentious business. The drafting of the petition for judicial separation and all the work connected with it was clearly work which would have been allowed on a party and party taxation. The solicitors should have delivered a separate bill of costs for all this contentious business, with detailed items and charges. Another bill should have been delivered for the non-contentious business, and that could have been for a lump sum. The bill which was in fact delivered was a bad bill, because it did not distinguish between the two and treated it all as non-contentious business, which was wrong.

I now proceed to consider the second point, which is this: assuming that the work was all non-contentious, was the bill a good bill?

Until the year 1920 a solicitor’s bill, even for non-contentious work, had to be drawn in the traditional way, item by item, with a separate charge against each item. By the Solicitors’ Remuneration Act General Order, 1920 , as re-enacted by the Solicitors’ Remuneration (Gross Sum) Order, 1934 , a solicitor was authorized to charge a gross sum for non-contentious business, in lieu of detailed charges, but it was provided that the client could within six months insist on a detailed bill of charges, just as if no gross sum were permissible. In 1953 the Solicitors’ Remuneration Order, 1953, was made, which made great alterations in the method of charging for non-contentious business. The solicitor is now entitled to “such sum as may be fair and reasonable having regard to all the circumstances of the case.” This, I think, means a lump sum as before, but whereas previously the client could afterwards insist on a detailed bill of charges, he now has no right to have the lump sum split up into items. He is, however, given a valuable new right. He can require the solicitor to put the bill before the Law Society, so that the Law Society can see whether the sum charged is fair and reasonable. If it is fair and reasonable, they will certify 272accordingly; or if not, they will say what the proper sum should be.

We were shown the form of application used by the Law Society when this procedure is invoked. It seems to be well designed to enable the matter to be properly investigated. The solicitor has to give to the Law Society full details of all the work he has done, the time spent by himself, his assistants and his clerks respectively, and all the material circumstances. The form contains a questionnaire in which the solicitor has to set out all the particular circumstances specified in the Order of 1953. The investigation is held without any expense to the client, and it is a great protection for him. The only drawback about it is that the client has no right to see the details which the solicitor gives to the Law Society, and we were told that the client was not allowed to see them. He is not, therefore, in a position to challenge their accuracy. But this drawback is not so serious as it might at first sight appear, because the client still has the right to have the bill taxed by the taxing, master, and the new Order expressly says that “it shall be the duty of the solicitor to satisfy the taxing master as to the fairness and reasonableness of his charge” The taxing master can, therefore, call for all the details just as the Law Society can, and he will no doubt see that the client and his new advisers have full opportunity of considering these details, so that the client can challenge them, if he so desires.

Such being the effect of the new Order, the question is: what must a solicitor’s bill for non-contentious business now contain? It need not contain detailed charges as it used to do before 1920. Nor need it contain all the details which the solicitor will have to give, if required, to the Law Society or the taxing master. But I think that it must contain a summarized statement of the work done, sufficient to tell the client what it is for which be is asked to pay. A bare account for “professional services” between certain dates, or for “work done in connexion with your matrimonial affairs” would not do. The nature of the work must be stated, such as, advising on such and such a matter, instructing counsel to do so and so, drafting such and such a document, and so forth. Tried by this test, I am of opinion that the bill delivered by the solicitors in this case would have been a good bill if it had been all non-contentious business. But I think it fails because it was not all non-contentious. Part of it was contentious business. Two separate bills should have been delivered to cover the two kinds 273of business. I find myself in agreement with Gerrard J. The appeal must be dismissed.

PARKER L.J. The first question is whether any part of the work covered by the bill of September 3, 1953, relates to contentious business. If it does, then it is conceded that it is not a good bill. The expressions “contentious business” and “non-contentious business” first appear in relation to solicitor’s remuneration generally in the Solicitors’ Remuneration Act, 1881 . That Act provides for the making of general orders for remuneration in relation to non-contentious business. Everything, by section 2 of that Act, is treated as non-contentious business except “business in any action, or transacted in any court, or in the chambers of any judge or master, and not being otherwise contentious business.” Thus, while not defining contentious business, it recognizes that there is contentious business which is not business in any action or transacted in any court or in the chambers of any judge or master.

Pursuant to that Act, the Solicitors’ Remuneration Order, 1883 , was made. Oddly enough, the wording of the order did not follow the wording of the Act by excluding from its ambit all contentious business, but only business in any action or transacted in any court or in the chambers of any judge or master. Accordingly, read alone, the order purported to cover business coming within the words “being otherwise contentious business.” I say “read alone,” because the order could not cover a wider field than that allowed by the Act, and could not, therefore, cover business within that expression.

In 1932 the Solicitors Acts, 1839 to 1928 , were consolidated by the Solicitors Act, 1932 . Far from taking the opportunity to define “contentious business,” Parliament merely provided by section 81 that “‘contentious business’ includes any business done by a solicitor in any court.” As I have mentioned, that Act was a consolidating Act, and I am quite satisfied that by that inclusive definition the Act did not purport to convert whatever was already covered by the expression “being otherwise contentious business” into non-contentious business. Section 56 provided power to make general orders for non-contentions business, and by section 82 (2) the order of 1883 was to be treated as an order under and for the purposes of the Act. The position was thereby preserved under which the order on its face, though not in truth, covered business which comes within the expression 274being otherwise contentious business.” What then is covered by that expression?

It is urged on behalf of the appellants that contentious business means business in which there is a litigious contest. There must, it is said, be two parties between whom there is a lis, and accordingly, unless and until a writ or other process has been issued, the business remains non-contentious, even though the solicitor has the client’s instructions to launch proceedings. Only thus, it is said, can a hard-and-fast line be drawn which will enable the solicitor to determine on what basis to prepare his bill. It is further pointed out that if business prior to the proposed action were classed as contentious business and proceedings were not in fact instituted, there is no measure laid down for determining the remuneration. The order covering non-contentious business would not apply, and since no proceedings were instituted, R.S.C., Ord. 65, and Appendix N would be inapplicable. On the basis of this argument the only suggestion put forward is that the expression “being otherwise contentious business” might be a reference to arbitrations or other proceedings in which there is some form of lis.

For the respondent it is contended that it is not the time when the work is performed, but the quality of the work, the kind of business performed, which is the determining factor. This was the view taken by Gerrard J., and I agree with him. It seems to me that the expressions “non-contentious business” and “contentious business,” when used in the Acts and the orders, are referring to the nature of the work. If the commencement of proceedings had been intended to be the determining factor, how easy it would have been to say so in the definition section in the Act of 1932. Moreover, it is to be observed that conveyancing matters are classed as non-contentious business, even if the work is done during proceedings, cf. Stanford v. Roberts,[18] which again points to the nature of the work being the test. Further, any contrary view would lead to the absurd result that the solicitor would be entitled to different remuneration for identically the same work, depending on whether the claim was settled the day before or the day after proceedings were launched. Again, it is to be observed that in a taxation under Order 65 of admittedly contentious business the master has a discretion under rule 27 (29) of the order to allow costs incurred before the issue of the writ, cf. Société Anonyme Pêcheries Ostendaises v. Merchants Marine 275Insurance Co. Ld.[19] As Atkin L.J. said[20]: “It is quite obvious that those costs are not limited to costs incurred after the writ has been issued. Costs incurred before action brought are allowed every day to a limited extent, as appears by the Taxing Master’s Practice Notes, which, though not binding, govern the practice. I am not at all sure that the conventions fixed by the masters are not too narrow, but they may be very wise, because they deal with the costs of this Lind which are commonly in dispute; but their discretion as to costs certainly extends beyond that. The taxing master has discretion in every case to decide whether the costs incurred before the action were necessary or proper for the attainment of justice; and the costs the taxing master has allowed in the present case may very well be included in that expression. A very good example of this was put in argument: it was a case of un accident happening owing to a railway bridge breaking down, when the railway bridge has to be replaced forthwith and the state of the bridge is said to be the cause of the action. In such a case it is essential that there should be an immediate inspection by skilled witnesses of the state of that bridge. In those circumstances the taxing master might well hold that such costs incurred before the issue of the writ were necessary for the attainment of justice, because the actual facts to be ascertained from such an inspection could not be ascertained at a later date; and, of course, the taxing master in coming to a conclusion would have to consider the probability of the defendant disputing liability.”

This again points to the view that the date of the issue of the writ is not the determining factor. Nor do I think that the fact that no statutory measure exists for determining the remuneration leads to a different interpretation. If a claim is settled before the issue of the writ, the taxing master could, and no doubt would, tax the bill for the preliminary work according to the same measure as he would under the rules have had to employ if the proceedings had actually commenced.

No doubt this view is not so convenient to solicitors in that there is no hard-and-fast line for determining whether, when business is performed, it is non-contentious or contentious. Each case will depend on its own special facts, but I suggest that some guide can be found in the current Practice of Taxing Masters. If the business performed is such that, under that practice, 276masters would allow the cost under Ord. 65, r. 27 (29), should proceedings ensue, then I think that it would be proper to treat the business as contentious business. I see no reason why in practice this should not afford a sufficient guide.

Finally, reference was made to In re R. P. Morgan & Co.[21] In that case Neville J. decided that the work of drawing a case for counsel to advise in contemplation of litigation was non-contentious business. I have no doubt that that case was rightly decided on its own facts and, indeed, applying the guide suggested above, the Masters’ Practice Notes show that the cost of such work is only sparingly allowed. As I read his decision, he was not saying that in all cases the date of the commencement of proceedings is the determining factor.

Turning to the facts of the present case, I cannot do better than quote from the judgment of Gerrard J.[22]: “I think I have to ask myself what was the nature of the business upon which the first solicitors were then engaged, and to decide upon its proper description. It was the collection of information and the taking of all steps, even to the engrossment of a petition, necessary to launch proceedings hostile to the husband at the moment the client gave the word, the background to this work being that differences had arisen between the client and her husband which had resulted in her leaving the matrimonial home and South Africa at his suggestion. It seems to me that it is impossible without doing violence to language to describe that business as non-contentious.”

I agree with that passage. Accordingly if, as I think, the determining factor is the nature of the work, it is clear that some part of the work covered by the bill of September 3, 1953, is contentious business.

So far as the second question is concerned, I have nothing to add to what has been said by Denning L.J. I would dismiss the appeal.

DENNING L.J. Roxburgh J. authorizes me to say that he has read the two judgments which we have delivered, and agrees with them.

Appeal dismissed.

Solicitors: Bull & Bull; Forsyte, Kerman & Phillips.

P. B. D.
[1]
(1885) 10 App.Cas. 300.

[2]
(1885) 30 Ch.D. 28.

[3]
Ibid. 36.

[4]
[1928] 1 K.B. 750; 44 T.L.R. 270 .

[5]
[1931] 1 Ch. 428.

[6]
[1915] 1 Ch. 182.

[7]
[1915] 1 Ch. 182.

[8]
[1915] 1 Ch. 182.

[9]
[1922] 1 I.R. 13.

[10]
[1915] 1 Ch. 182.

[11]
[1928] 1 K.B. 750; 44 T.L.R. 270 .

[12]
[1915] 1 Ch. 182.

[13]
[1906] 2 K.B. 433; 22 T.L.R. 559 .

[14]
Ante, p. 253.

[15]
[1928] 1 K.B. 750; 44 T.L.R. 270 .

[16]
[1931] 1 Ch. 428.

[17]
[1915] 1 Ch. 182.

[18]
(1884) 26 Ch.D. 155.

[19]
[1928] 1 K.B. 750.

[20]
Ibid. 762.

[21]
[1915] 1 Ch. 182.

[22]
Ante, p. 264.

Referenced Legislation
Solicitors’ Remuneration Order, 1953 (S.I. 1953, No. 117 (L.1)), Sch. 2.

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