The Supreme Court Costs Office

No.2 of 2002

Slatter v Ronaldsons (A Firm)
14 December 2001
Mr Justice Patten sitting without Assessors

Between 1994 and 1997 the defendant firm had acted for the claimant in matrimonial proceedings, the fee earner concerned being a legal executive a Mr B. Two bills were rendered by the defendants to the claimant on 27 March 1997 for £1,116.25, and on 13 April 1997 for £969.38. The defendants gave credit in relation to the first bill for £107.45, and there was evidence before the court that further payments had been made of £250 on account during 1997. The claimant however became unemployed, and the defendants concluded that it would be uneconomic to pursue him for the balance due on those two accounts, and accordingly "wrote them off" obtaining the appropriate VAT refund. Late in 2000 the claimant made a further payment of £500 on account to the defendants.

During 2001 the matrimonial proceedings were reactivated, and the claimant went back to Mr B, who by this time had left the defendants' employment and was working for another firm. On his behalf Mr B wrote to the defendants seeking delivery up of all relevant papers still retained by that firm. The defendants refused to hand over the papers, contending that they had a lien over the papers until their bills were discharged in full. The Costs Judge held that the contractual liability to pay the balance of the bills survived their "writing off", and that accordingly the defendants were entitled to rely on their lien, and not to hand over the documents sought without prior payment by the claimant of the sums due.

The claimant appealed, and a Judge in a wide ranging judgement considered the law relating to liens in general, and the applicability of those principles to the facts of this case in detail.

His starting point was that payment of part of the bill cannot amount to discharge at common law of the whole bill under the well known principle of Beer v Foakes [1883] 11 QBD 221. The claimant's second argument for the court to override the lien was one of promissory estoppel, there being some evidence before the court that Mr B had told the claimant that the defendants had written off the balance of the bills, and that the claimant would not be liable to pay them. The Judge held that there was no evidence that the claimant acted to his detriment on the basis of any such holding out, and therefore dismissed the claim based on promissory estoppel.

The Judge then went on to consider the principle of equitable estoppel, and, having concluded that it was the claimant who determined the retainer by transferring to Mr B's new firm, held that none of the five facts advanced on behalf of the claimant justified the exercise of the equitable estoppel principle in favour of the claimant. The first of these five factors was that the defendants in their evidence had failed to record the fact that the additional £500 had been paid by the claimant in the autumn of 2000. The Judge refused to hold that this amounted to dishonesty, and said that it was not in any event, in his opinion, relevant to any question of equitable relief.

Similarly, the Judge refused to be swayed by the argument that the fact that the bills had been "written off" and the VAT reclaimed was in any way conclusive. The four year delay was by the same token rejected, on the basis that the claim was not statute barred. The fourth contention was that the nature of the defendant's practice had changed a year or so before the hearing, so that they no longer undertook matrimonial work, and so could not in any event have continued to represent the claimant. That evidence was not accepted by the defendants, but again the Judge held that it was irrelevant to the exercise of any equitable jurisdiction.

The final point was the alleged failure by the defendants to pass on certain correspondence from the Child Support Agency, which might have an adverse effect on the claimant. The Judge held that that was something which would or could form the subject matter of a complaint to the Law Society, but was not a factor he could take into account in the exercise of equitable jurisdiction.

Accordingly the Judge dismissed the claimant's appeal, and upheld the defendants' lien.