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Boutique firm fails its second attempt at $2m legal bill fight
A law firm that claimed it was owed just shy of $2 million in legal fees has lost on appeal despite seeking just a third of the amount be paid.
Naomi Neilson
Emanueli Oliveri, appearing for his firm Oliveri Legal, appealed an NSW Supreme Court decision that found former client Cassegrain Tea Tree Oil (CaTTO) was not bound by a costs agreement and so would not be ordered to pay $1,838,758.76 in legal fees, plus interest.
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Oliveri returned to the Supreme Court earlier this month with an appeal, but this time sought just $627,083 and interest.
Although Justices Fabian Gleeson, Anna Mitchelmore and John Basten said the primary judge erred in finding CaTTO was not bound by an agreement, “on the proper construction of the agreement, that error was of no consequence in terms of the outcome of the appeal”.
The parties worked together in 2008 when Oliveri Legal was retained to assist CaTTO managing director Claude Cassegrain with a Supreme Court matter. Cassegrain requested that a controlled money account be set up in CaTTO’s name, despite it not being a party.
In June 2011, Cassegrain called Oliveri to tell him he was having difficulty paying the invoices of an employed solicitor.
Cassegrain was told that under the costs agreement, he still owed the amounts, along with a retainer and professional fees.
Several months later, Cassegrain called Oliveri to say he would not pay the employed solicitor’s full invoices, and it was agreed by Oliveri that he was “willing to carry over the shortfalls” in the agreement.
In May 2021, Oliveri Legal commenced proceedings seeking a declaration that the agreement bound CaTTO, that Oliveri Legal held an equitable charge of CaTTO’s interest in certain land, and that CaTTO was indebted to the firm in the amount of $1,838,758.76.
On appeal this year, Oliveri Legal sought the reduced sum, comprising of unbilled work the firm carried out and the services of two solicitors.
The appeal judges determined the agreement did bind CaTTO on the basis of Cassegrain being the “actual authority” as the “alter ego”.
However, it was not enough to grant the appeal.
“The agreement did not, on its proper construction, constitute a guarantee; rather, the agreement imposed on CaTTO an obligation of indemnity alone,” Justices Gleeson, Mitchelmore and Basten found.
“It follows that Oliveri Legal’s principal contentions on the appeal fail, as does the estoppel argument on which it relied to extend the operation of the guarantee.”
