McFaddens Solicitors v Chandrasekaran

An appeal from a refusal of summary judgment should succeed where the defendant has no real prospect of establishing that a written retainer was a sham or differed from the agreement it recorded. Contemporaneous documents, the parties’ conduct and the defendant’s later failure to assert the alleged alternative agreement may together eliminate any real prospect of a successful defence. The appellate court must respect the lower court’s decision within the generous ambit of reasonable disagreement, but must intervene where the decision was wrong. A party may not use an addendum to reopen a concluded hearing and advance substantive arguments that were not pursued at the hearing.

McFaddens Solicitors claimed outstanding fees and disbursements under a written retainer made with Mr Chandrasekaran for litigation against Deloitte Touche. A Master refused summary judgment. The defendant argued that the retainer was a sham and that he would pay the lawyers only from sums recovered in the litigation, supplemented by a proposed equity arrangement.

The claimant appealed. The central issues were whether the defendant had a real prospect of proving an agreement inconsistent with the written retainer and whether summary judgment was appropriate. After judgment had been prepared, the defendant also sought to introduce arguments concerning conditional fees under statutory provisions.

1. Appeal allowed. The refusal of summary judgment was set aside and the claimant was awarded summary judgment pursuant to CPR 24.2 for the sum claimed.
2. An appeal from a Master is not a rehearing. Under CPR 52.11(3)(a), intervention is justified only where the decision was wrong. The court applied the guidance in Tanfern Ltd v Cameron-McDonald [2000] 1 WLR 1311, including the generous ambit within which reasonable disagreement is possible, a formulation derived from Gee v Gee [1985] 1 WLR 647.
3. The defendant’s case depended on proving that the retainer letter was a sham or did not record the true agreement. The contemporaneous documents showed that he understood the litigation, rejected a payment into court, sought a substantially larger recovery and signed a retainer expressly making him liable for the fees. There was no contemporaneous evidence supporting the alleged exemption from liability. His later failure to assert that simple case when first asked to pay, and when responding to the proceedings, materially weakened his evidence.
4. The proposed share arrangements were unusual and were pursued for a time, but no concluded agreement for shares was proved. They did not displace the written retainer. The court also observed that such arrangements would be highly unusual and might raise professional conduct concerns.
5. The later attempt to advance arguments that the retainer was a conditional fee agreement under section 27 of the Access to Trustee Act 1999 and section 58 of the Courts an Legal Services Act 1990 was inappropriate. Those arguments had not been actively pursued at the substantive hearing and the addendum was not a proper vehicle for reopening the case. In any event, the arguments were without substance.

• High Court (Queen’s Bench Division): Appeal from the Master’s refusal of summary judgment allowed. Summary judgment entered for the claimant pursuant to CPR 24.2.
• Master Leslie: Refused the claimant’s application for summary judgment, forming part of an order made in November or December 2005.