In Re Negus

[1895] 1 CH 73

(Judgment by: Chitty J)

In Re Negus

Chancery Division

Chitty J

Hearing date: 1, 3 November 1984
Judgment date: 6 November 1894

Judgment by:
Chitty J

Both parties when before the Taxing Master in the first instance seem to have adopted the principle that this was an item bill, which had to be taxed on that footing. The Taxing Master himself considered that the scale applied; and assuming that he was right, still it is contended on behalf of the tenant that, in these circumstances, the Taxing Master could not of his own motion apply the scale. The argument did not proceed upon any doctrine of estoppel or question of conduct or misconduct, but on the circumstances I have mentioned, and probably the best form which the argument assumed was that which had relation to the case of In re Heather [[8]], where it was held that a solicitor could not withdraw a bill which he had once delivered without the consent of the client, and I may add, without an order of the Court. Consequently it was said, that Mr. Negus was bound by the bill which he had delivered, and must therefore submit, as a matter of law, to have his bill taxed as an item bill. It appears to me that the principle of In re Heather, which was decided before there was any distinction between scale and non-scale taxed costs, does not apply to this case.

It is the practice, I believe, for the Taxing Masters, where the solicitor brings in an item bill in a case to which the scale applies, to tax the bill by the scale; and I think that practice, which I understand from inquiry prevails, is perfectly right, on the ground that the Taxing Master is bound to tax according to law; he is bound to apply the general order relating to the taxing of bills in all cases where it is applicable. Now, though the solicitor here submitted a bill with items in the first instance, there having been no agreement in writing as between him and the tenant, or between him and the landlord, that the charges should be made on the non-scale principle, it was competent for him to acknowledge his error and to submit, when the parties were before the Taxing Master, to have his bill taxed according to scale; and that is the substance of what happened here, because, when Mr. Negusfound that the Taxing Master was convinced that the scale applied, he at once assented, and the bill has been taxed upon that basis. It appears to me, therefore, that this first objection cannot be sustained.

Then I come to the second point argued, which raises a question of substance. It appears to me that this agreement is a "lease" or "agreement for a lease," within the meaning of Schedule I., Part II. (first scale). The Court of Appeal in In re Emanuel and Simmonds [[9]] have put a construction upon the meaning of the term "agreements for leases." The only point that the Court had to decide, and did decide in that case, that is relevant to the case before me, was, that the solicitor could not make a double charge, and that the meaning of the term "agreements for leases" in Schedule I., Part II., was not the strict meaning which would be applied to these terms, according to the technical view of the law, but that "agreements for leases" included [[10]] "Agreements on which the parties intended to rely as sufficient for the purpose of stating the terms on which the property was held without having formal leases executed." The Court of Appeal did not decide that the term "agreements for leases" did not include what the words primarily import, viz., an agreement for the granting of a lease, as distinct from an agreement which operates itself as a lease, but they put the construction that I have mentioned upon the words "agreements for leases" -- a construction which, if I may take the liberty of saying so, is proper and reasonable. It would be an error to say that Lord Justice Cotton defined an agreement for a lease as being only that which I have just quoted from his judgment. There is no strict definition, but there is an explanation of the term, shewing, as is mentioned particularly by Lord Justice Bowen, that the expression is intended to include documents of the kind already described.

Now, the argument for the tenant is, that the term "leases" or "agreements for leases" applies to such leases or agreements only as the law requires to be in writing, though it is admitted that there are no words, either at the commencement or any part of Schedule I. sufficient to justify the Court in accepting that interpretation. The argument is founded to some extent by suggesting cases of extreme hardship which might arise if it were held that the scale applied to any other kind of leases, or agreements for leases, and, consequently, that the scale ought, on the reasonable construction of such a rule as this, to be so construed as to exclude these causes of hardship.

It is quite unnecessary for me to enter into a dissertation on the term "lease," though I will state shortly that the term "lease" is used in strict law so as to include any demise, for any period however short or however long, and it is sufficient for this purpose to refer to the Statute of Frauds (29 Car. 2, c. 3), the first section of which, as is well known, enacts that all leases by parol, and not put in writing and signed by the parties making or creating the same or their agents thereunto lawfully authorized by writing, shall have the force and effect of leases or estates at will only. The term "lease" is well known to the old lawyers and, I hope, to the modern ones. Then comes the 2nd section, which contains a well-known exception, though it still speaks of the excepted things as "leases": "Except all leases not exceeding the term of three years from the making thereof." I need not read the rest. So that the Statute of Frauds shews upon the very face of it that that which is a demise for a term not exceeding three years still is properly called at law a "lease," and that a lease may be made without any document whatever, but simply by word of mouth. Later in the same Act, the distinction between a lease, and an agreement for a lease, is maintained, because where the instrument is an agreement for a lease in the strict sense of the term, there the 4th section applies, that being a "contract of" -- that means concerning - land.

Then comes the well-known statute of 8 & 9 Vict. c. 106, s. 3, which enacts, that a lease required by law to be in writing shall be void in law unless made by deed. Now, putting these enactments together, the result of the contention for the tenant is, that the scale does not apply except to leases which the law requires to be made by deed, and I am constrained to state that I cannot find that the words leases in writing or leases by deed are mentioned on the face of Schedule I. itself. I need hardly state that the schedule only applies when there is a document. The schedule is headed with "Lessor's solicitor for preparing, settling, and completing lease and counterpart," and consequently explains that there must be a document; but that is a long way off saying that the document must be a deed, and that it does not mean a deed seems to follow plainly from the term "agreements for leases" found in this schedule and interpreted as the words have been interpreted by the Court of Appeal in In re Emanuel and Simmonds [[11]]. I am therefore unable to accept the construction contended for by the tenant as the right construction to be put upon the schedule. I agree that in ordinary parlance, and in conventional language, it may fairly be said that a distinction is constantly made between a "tenancy" and a "lease," and I daresay many solicitors speaking to their clients talk of a "lease" in the sense of meaning a lease which the law requires to be by deed; but I am unable to say that I can introduce this same loose parlance into the rule, and adopt it as having been the meaning of the great authorities by whom these rules were made under the Solicitors' Remuneration Act of 1881.

As to the cases of hardship, I am afraid that I must lay them aside, for they are to a large extent merely supposed cases, which do not often occur in the ordinary course of business; besides, I do not think that these rules were specially addressed one way or the other to cases of that kind, but if a person has to take a lease for a period less than three years and consults a solicitor, he may have a considerable amount of trouble (particularly in the case of a flat, as I know by my own experience here) in advising his client as to what he shall accept or decline. It does not appear to me reasonable to say that this 5l., which is the minimum charge, must be regarded as so excessive as to justify the Court in putting an interpretation on the reading of the rule which would amount to a decision that the scale fee did not apply to the case of a letting, which the law does not require to be in writing.

The document in the present case relates to the letting of a flat. The documents have not been exchanged; but taxation proceeds upon the footing that they will be exchanged, so nothing turns upon that. The term does not exceed three years from the making thereof, if I look upon these non-exchanged instruments as documents pertaining to the demise. The words are, "the landlord agrees to let and the tenant to take" -- words which have been interpreted - I need not refer now to the authorities - to operate as a present demise, and if the documents had been exchanged I think that the demise would have been made. There was to be immediate possession, and the documents were to be exchanged - the only reason for the non-exchange of them was this question of the amount to be paid by the tenant for the cost of their preparation.

The document which would enable the tenant to take possession would be a "lease" in point of law; but if by reason of its not having been exchanged it is to be considered only as an agreement for lease, then, on the face of the document itself, it is within the explanation of the term, as given by the Court of Appeal; for the parties here evidently intended to rely upon that document, and did not intend to have any formal lease by deed or otherwise executed.

One other point remains, viz., that this is a third party taxation, and the general rule is that a third party stands, as between himself and the solicitor whose bill he is taxing, in the position of the party chargeable. But that rule does not prevent the Taxing Master from considering the question of the liability of the third party. This has been decided, and, by way of illustration, I may refer to In re Brown [[12]]. The trustee in that case was liable, as between himself and the solicitor who was defending his bill as against the cestuis que trust, for the items impeached; but Lord Romillyheld that those items were properly disallowed by the Taxing Master because they could not have been charged as against the trust estate. The solicitor had pointed out to the trustee, as was his duty, that he would not be allowed to charge; but still the trustee insisted upon the work being done, and yet these items were struck out from the bill when it was taxed by a third party. Now it is part of the general law (though it is unnecessary to go into the authorities) that in the case of lessor and lessee, the lessee is not bound to pay for the counterpart, and the scale fee prescribed by Schedule I., Part II., includes the counterpart; the words in Schedule I. are, "Lessor's solicitor for preparing, settling, and completing lease and the counterpart," and the decisions upon these rules generally shew, that the business contemplated by the rules must be wholly performed by the solicitor in the transaction, in order to make the scale remuneration apply.

There was a counterpart in this case, and it is plain that the landlord was liable to his solicitor to pay for this counterpart; the Taxing Master in applying the scale, as he did, according to the amount of the rent, has necessarily included the charge for the counterpart, in respect of which there is no liability on the part of the tenant to the landlord; consequently, it was argued for the tenant, that the scale could not apply on this third party taxation. In my opinion that argument cannot be sustained, for these rules having - as has been well explained by Lord Halsbury in the case of Savery v. Enfield Local Board [[13]] - been made for the purpose of preventing disputes on taxation and providing some guidance as to the mode in which charges should be made, prescribed and fixed a gross sum for each document prepared, which could be known beforehand to any person able to employ a solicitor; and I cannot conceive it to have been the intention of the framers of the rules that whilst the landlord had to pay, say a minimum 5 Pounds Sterlingto his solicitor, still the solicitor might be entitled to charge 10 Pounds Sterling or 20 Pounds Sterling on the non-scale system as against the lessee. My opinion is that this contention cannot prevail, and I think the Taxing Master was right in taxing this bill in the manner he has done, as being the bill that the landlord has to pay. There is a novelty in the point about the counterpart, and I think that the only solution of this supposed difficulty that is reasonable and right is this - that the Taxing Master should tax, as he has done this bill, as he would have taxed it as between the solicitor and landlord, viz., on the scale footing, and then seeing that the tenant was only liable for the preparing, settling, and completing the lease, he should have made a reasonable deduction from the scale in respect of the counterpart. The parties here have been very reasonable, and they do not require me to send the bill back to the Taxing Master upon this small point; they have agreed that 5s. for the stamp duty on the counterpart, and 18s. in respect of the proper costs in relation to the counterpart, as distinct from the lease itself, should be deducted from the amount which the third party taxing has on the present taxation to pay. The result is, the application has substantially failed, and must be dismissed, and the tenant must therefore pay the costs.


Solicitors: Daubeny & Mead;W. Negus.

(W. C. D.)

Law Rep 5 Ch 694

33 Ch D 40

Law Rep 5 Ch 694

33 Ch D 40

[1893] A C 218

8 Car & P 61

33 Ch D 47

Law Rep 5 Ch 694

33 Ch D 40

33 Ch D 47

33 Ch D 40

Law Rep 4 Eq 464

[1893] AC 225