Claim No: CH/2010/APP/0015  

Neutral Citation Number: [2010] EWHC 1098 (Ch) 
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand
London WC2A 2LL

Date: Tuesday, 2 March 2010

BEFORE:

MR JUSTICE MORGAN

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BETWEEN:

WALLACE LLP
Appellant
- and -

YATES
Respondent

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MR S SEROTA appeared on behalf of the Applicant

MR G ALLIOTT appeared on behalf of the Respondent

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Judgment

1.	MR JUSTICE MORGAN:  This is an appeal by Wallace LLP (“Wallace”) against a decision of Mrs Registrar Derrett given on 18 December 2009.  Mr Serota, a solicitor, appears on behalf of his firm, Wallace, and Mr Alliott, of counsel, appears on behalf of Mr Yates.  

2.	Wallace  is a firm of solicitors and, at all material times, Mr Yates was a client of the firm.  There was a formal retainer letter.  It was prepared by Wallace , dated 12 March 2008, and it was countersigned by Mr Yates on 17 March 2008.  I will refer, albeit a little later in this judgment, to the nature of the legal advice and assistance which Wallace  gave Mr Yates and what the instruction to the firm was all about.

3.	Following the retainer letter, Wallace sent three invoices to Mr Yates, their client.  The first was dated 31 March 2008 and it was for the sum of £3,250 plus VAT.  They sent a second invoice, dated 29 August 2008, for the sum of £1,000 plus VAT.  Thirdly and finally, so far as this hearing is concerned, Wallace sent a third invoice, dated 30 October 2008, for £1,262 plus some disbursements plus VAT.  I understand that if one adds together the three invoices, the total sum represented by those invoices is £6,563.60.  Mr Yates did not pay anything towards this sum .  

4.	Eventually, on 2 March 2009, Wallace served on Mr Yates a statutory demand under section 268(1)(a) of the Insolvency Act 1986.  The statutory demand was in the form which is appropriate for a debt for a liquidated sum payable immediately.  I refer to the heading to Form 6.1, made pursuant to rule 6.1 of the Insolvency Rules 1986.  In the statutory demand, the creditor, Wallace, claimed that the debtor, Mr Yates, owed the sum of £6,889.74.  It was said that full particulars of that sum were set out on the second page of the statutory demand and that that sum was payable immediately.  The second page of the statutory demand referred to the letter of retainer and referred to the three invoices which I have mentioned.  The second page of the statutory demand then referred to a liability on Mr Yates’ part to pay interest at 8 per cent per annum on the outstanding fees.  The addition of interest brought the debt referred to in the demand to the figure I have given of £6,889.74.

5.	Mr Yates applied in time to set aside the statutory demand.  His application was in fact made on 23 March 2009.  It so happened that, around that time, a decision was given by Mrs Justice Proudman in the Chancery Division of the High Court in the case of Truex v Toll [2009] 1 WLR 2121.  The learned judge had to consider the possibility of a bankruptcy petition in a case where a solicitor’s client allegedly owed fees to the solicitor.  The central issue in the case was whether a claim by a solicitor for fees, where the fees had not been judicially assessed or determined in the various ways in which they can be judicially assessed or determined, were nevertheless liquidated sums for the purposes of section 267 of the Insolvency Act 1986.  Section 267(2)(b) requires the petition debt to be for a liquidated sum to enable the court to make a bankruptcy order pursuant to that section.

6.	Mrs Justice Proudman reviewed the authorities and held that fees which had not been judicially assessed or determined were not liquidated sums in that context.  She also went on to consider whether it was possible for the parties, a solicitor and a client, to make an agreement which would result in something which began as an unliquidated sum becoming a liquidated sum, even without judicial assessment or determination.  She held there were some circumstances in which such an agreement was possible, but she spelt out where that possibility could come about.  She also appeared to acknowledge that it was possible for a client to be estopped from denying his liability to pay a certain amount by way of fee to his solicitor.

7.	The decision in Truex v Toll led to certain directions being given in this case on 5 June 2009.  The Deputy Registrar directed that the respondent to the application, namely Wallace, was to serve any further evidence to show why it claimed that the debt referred to in the statutory demand was a liquidated debt taking into consideration the judgment in Truex v Toll. The directions also permitted Mr Yates to serve evidence in reply.

8.	The parties did serve further evidence pursuant to that direction.  In particular, Wallace  served a second witness statement of a  Ms Bone,  a member of the LLP.  One of the curiosities of this case is that Mr Serota, appearing today for Wallace, has not drawn my attention to anything said in Ms Bone’s second statement as supporting his case that the unliquidated claim resulted in the debt being a liquidated debt.  However, Mr Serota does rely upon the witness statement of Mr Yates which was served in reply to Ms Bone’s two witness statements.

9.	The matter came on for hearing before Registrar Derrett on 3 November 2009.  She heard submissions from Mr Serota and from Mr Alliott, of counsel.  She reserved her decision.  She gave a reserved judgment on 17 December 2009 and made her order under appeal on 18 December 2009.  She set aside the statutory demand and she ordered Wallace to pay Mr Yates’ costs.  She gave permission to appeal.  In due course, Wallace served an appellant’s notice.  In the grounds of appeal referred to in the appellant’s notice, they challenged the Registrar’s conclusion that the sums in dispute were unliquidated sums as at 2 March 2009, the date of the statutory demand.

10.	On this appeal, Mr Alliott, on behalf of Mr Yates, takes what is, in essence, a preliminary point which is that the appellants have not done enough by way of challenge to the Registrar’s judgment.  By that I mean Mr Yates says that he won before the Registrar on a number of grounds, at least two, and the grounds of appeal only amount to a challenge to one ground on which Mr Yates succeeded.  He has therefore submitted that even if the single ground of challenge in the appellant’s notice were to be upheld, the result would still be that the appeal would be dismissed.  It is fair to say that this point made by Mr Alliott in oral submissions was also made by him in his written skeleton argument.  When Mr Serota presented the appeal to me this morning, he did not confront that suggested difficulty and he confined himself to advancing his appeal as to why the Registrar was wrong in relation to the liquidated sum point.

11.	I think I ought to express my views on this preliminary matter before going any further.  In her decision at paragraphs 28 to 31, the Registrar set out her conclusions.  Paragraph 28 is her summary of the law as to when a solicitor’s claim for fees involves a claim to an unliquidated sum and when a sum, which is originally unliquidated, can be considered as having become liquidated.  In paragraph 29, the Registrar applied her understanding of the legal position to the circumstances of this case.  In paragraph 29, she held that she did not accept that Mr Yates’ action in instructing Wallace to pursue costs against a third party amounted to an admission or unequivocal acknowledgement by Mr Yates that the sum being pursued was due and payable, nor did it create an estoppel, as Wallace was only doing what they had told Mr Yates they would do.  Read in that way, it is not immediately apparent what the finding was, but I can summarise it in this sense, that the Registrar was holding that the sum or sums being claimed by the solicitors were not liquidated sums and, on that basis, she would set aside the statutory demand.

12.	In paragraph 30 of her conclusions, she added the following:

“In my judgment, the respondent also has the additional problem that it is not possible to easily identify from the interim accounts as rendered those costs which are said to be recoverable from the prospective tenants.  Regrettably, none of the bills of costs break down those costs which relate specifically to the areas of costs which are recoverable, and although the respondent sought to argue that it is possible to extrapolate that information from the first two interim bills of costs, in my judgment, that is not sufficient.  A statutory demand must contain a clear and unequivocal statement of the sums which is being claimed.  It must be possible for a debtor to identify and understand from a statutory demand exactly what is expected of him.”
(Quote unchecked)

13.	Although paragraph 30 appears in the conclusion part of the judgment, it fits together with an earlier discussion in the judgment which is to be found at paragraph 25.  I will not read paragraph 25 in its entirety, but I will summarise it by saying that, in paragraph 25, the Registrar examines the figures in the invoices, the figures referred to in the statutory demand and the case put forward by the solicitors that a part only of those sums had become liquidated.  The learned Registrar agreed with the argument put forward on behalf of Mr Yates that he could not know what it was being said in the statutory demand was due from him as a liquidated sum.

14.	The first question for me is whether the learned Registrar’s findings, in particular her finding in paragraph 30, is an independent ground for her decision that the statutory demand ought to be set aside.  I think I am helped in reaching my conclusion by paragraph 31 of the judgment.  Having referred to paragraphs 28, 29 and 30, under the heading “Conclusions”, the Registrar said:

“For the reasons I have given, I set aside the statutory demand, date 2 March [2009].”
(Quote unchecked)

15.	It seems to me that, on a fair reading of the decision, the Registrar has held that there are at least two reasons here why the statutory demand ought to be set aside.  The first is the liquidated/unliquidated sum point.  The second is that the statutory demand did not meet the requisite standard as to clarity in order to be effective.  The appellant’s notice does not challenge the independent ground of decision in paragraph 30 of the judgment.  Accordingly, on the basis of the appellant’s notice as it currently stands, it would not be open to the appellant to succeed on this appeal.  Even if I came to a finding contrary to paragraph 29 of the Registrar’s decision, as I am not invited to reverse her conclusion in paragraph 30, then there remains one unopposed reason for her setting aside the statutory demand.  It seems to me inevitable, therefore, that, unless I were persuaded to give the appellant permission to amend the appellant’s notice, the appeal would have to be dismissed.

16.	Mr Serota, in his reply, in the course of the afternoon, has indeed applied for permission to amend, to take this point challenging paragraph 30 of the judgment.  In the end, I am not going to make a decision as to whether it is a proper case for permission to amend because I will, in a moment, go on to consider the ground of appeal which he has raised, and I will, in time, decide that that ground of appeal must fail.  If that ground of appeal fails, then whatever I decide on paragraph 30 will not change the result. 
 
17.	However, as a matter of comment before I turn to the liquidated sum point, I think I should say that the learned Registrar’s way of putting the matter in paragraph 30 of her decision might very well not be correct in law.  As I understand it, the legal principles to be applied, as to the clarity expected of a statutory demand and as to the circumstances in which a court may set aside a statutory demand because of the way in which it is expressed, are still the principles stated more than 20 years ago in Re A Debtor (No 1 of 1987)  [1989] 1 WLR 271.  The principles are summarised in the judgment of Nichols LJ, in particular, at 279, although one needs to contrast what he says at page 280, letters (d) to (e).  I think if the matter had been a live issue, Mr Serota may have been able to make substantial progress in submitting that Mrs Registrar Derrett had not applied the correct principle in paragraph 30.  I do not say anything as to what the answer would be if one were to apply the correct principle.  It may be that her decision would still be the correct one, the court having properly directed itself.  The fact that the learned Registrar may not have applied the correct principle would have inclined me to consider granting permission to amend the appellant’s notice, even though permission was sought at a very late stage. 
 
18.	As against that, there are other considerations.  First of all, the point that Wallace  needed to appeal on more fronts than it was currently advancing was a point taken in the respondent Mr Yates’ skeleton argument, yet Wallace  did not confront this difficulty until the hearing today and indeed only in the reply of Mr Serota.  The other reason which would have had to be assessed as to whether to give permission to amend is whether it would have been necessary for this hearing to be adjourned to enable the parties to consider the authorities and to prepare themselves to meet the new ground of appeal.  Although I did not ask Mr Alliott to deal with this point in the course of his submissions, I think I would have expected him to say that he would wish to consider Re A Debtor and the other authorities and then seek to uphold the Registrar’s decision, either on the basis that she was right in the legal direction she gave herself, or that, even if she were wrong in that legal direction, the result would nevertheless be the same.

19.	As I have said, because, in my judgment, the appeal fails on the point which is raised in the appellant’s notice and because that means that paragraph 30 is not necessary to be considered, I will not, in fact, come to a conclusion on the question of whether permission to amend should or should not be given.

20.	I think it is unnecessary for me to do any more than refer to one or two other points which Mr Alliott says emerge from the judgement of the Registrar.  Mr Alliott drew my attention to paragraph 26 of the judgment where the Registrar held that, as at the date of the statutory demand, namely 2 March 2009, the alleged debt was not a debt payable at that date.  It is not quite clear to me what the Registrar was saying at that point in her judgment.  There seemed to me to be two possible readings of what she wrote.  She was either saying that the fees were not a liquidated sum at that date and, because they were not liquidated at that date, they were not payable at that date.  That is the point that is challenged by Wallace in this appeal.
  
21.	The alternative reading of paragraph 26 is that the Registrar was saying even if the sums were liquidated as at 2 March 2009, they were, for some other reason, not immediately payable and therefore, liquidated or not, they were not immediately payable as required by section 268 and the statutory demand ought to be set aside on that ground.  Having identified the two rival readings, I will say no more about that point.

22.	It is also right to record that Mr Yates had a further point before the Registrar which it was not necessary for her to deal with.  In paragraph 27 of her decision, she refers to his case that the fees or, at any rate, a part of them, were bona fide disputed on substantial grounds.  She did not feel it necessary to go into that matter and I do not feel it necessary to say anything further about it, apart from recognising that the point had been in play and was not decided against Mr Yates.

23.	The point which Mr Yates successfully took before the Registrar, leading her to set aside the statutory demand, was that he said the sums which were the subject of the statutory demand were not liquidated sums, they had never become liquidated, and just as one cannot present a bankruptcy petition for a sum which is not liquidated, one cannot serve a statutory demand for a sum which is not liquidated.  Although section 268 does not in terms refer to a sum being liquidated, section 268(1)does refer to a debt which is payable immediately.  Mr Alliott submits, and I accept, that for a debt to be payable immediately, it must be, first, liquidated and, secondly, payable immediately as distinct from payable at a later date.  Indeed, I have drawn attention to the form of statutory demand where the heading includes the words “debt for a liquidated sum payable immediately”.

24.	So the question in issue, pursuant to this ground of challenge to the Registrar’s decision, is whether any part of the sums set out in the statutory demand were liquidated sums as at 2 March 2009.  I think Mr Serota, on behalf of Wallace , accepts that the fact that those sums may have become liquidated after 2 March 2009 will not suffice for his purposes.  Even if he does not accept that, I so find.

25.	The case for these sums which were originally unliquidated sums becoming liquidated sums arises in this way.  The work which Wallace was carrying out for Mr Yates concerned a claim made by lessees of flats in a building which was owned freehold by Mr Yates and his former wife.  The claim by the lessee was made under chapter 1 of the Leasehold Reform, Housing and Urban Development Act 1993.  The lessees sought collective enfranchisement , thereby seeking to acquire from Mr Yates and his former wife the freehold interest.  For reasons which I need not go into, that claim did not proceed.  Pursuant to the statutory provisions, the claim was deemed to be withdrawn.  That triggered the application of section 33 of the 1993 Act.  

26.	Taking it shortly (I will not refer on each occasion to his former wife; I will take Mr Yates as the only relevant landlord), section 33 therefore conferred on Mr Yates an entitlement, as against the nominee purchaser or the lessees, to be paid, and I quote from section 33(1): “... the reasonable costs of and incidental to any of the following matters”.  Subsection 1 then has five subparagraphs, some of which do not concern legal work, but many of which do concern legal work, such as the work done by Wallace on behalf of Mr Yates.
  
27.	That being the statutory background, the events pursuant to section 33 can be taken from a decision of the Leasehold Valuation Tribunal on 1 July 2009.  This was plainly after the statutory demand of 2 March 2009, but the decision usefully sets out some of the relevant history.  The decision of the tribunal records the initial steps under the 1993 Act.  The decision then refers to the fact that, by October 2008, Wallace wrote to the solicitors for the lessees indicating that the initial collective enfranchisement notice was deemed withdrawn, and then the decision says this:

“On 23 January 2009, Wallace LLP wrote to Lewis Nedas & Co [I interpose, they were the solicitors for the lessees] seeking costs in the sum of £4,500 plus VAT, a valuation fee of £1,750 plus VAT and Land Registry fees of £87.  On 13 February 2009, Wallace LLP provided Lewis Nedas & Co with their requested breakdown of these costs.  However, the breakdown shows legal costs of £4,158 plus VAT [and then, I need not read it out, valuers’ fees, further legal fees not involving Wallace LLP and a Land Registry fee].”
(Quote unchecked)

28.	Those events took place before the date of the statutory demand.  Following the date of the statutory demand, the lessees or the nominee purchaser applied to the tribunal for these costs to be determined.  The matter went to a hearing before the tribunal.  Wallace acted on behalf of Mr and Mrs Yates.  The tribunal, in relation to the legal costs part of the claim, considered a schedule prepared by Wallace , showing total costs on their part of £4,158 plus VAT.  The tribunal allowed all of those costs with one exception.  As regards the first item in the schedule, the claim was for 1½ hours and the tribunal allowed half an hour only.  That meant the bill was reduced by £300, becoming some £3,858 plus VAT.  So Mr and Mrs Yates have established, at any rate, so far as that tribunal is concerned, that they are entitled to recover from the lessees or the nominee purchaser the sum of £3,858 plus VAT in relation to work which has been done by Wallace on behalf of Mr and Mrs Yates.

29.	Mr Serota, on behalf of Wallace, stresses that Mr Yates must be taken to have submitted to the Leasehold Valuation Tribunal that he was liable to Wallace for at least the sums being put forward under section 33.  The initial figure put forward was £4,500.  Mr Serota does not say that Mr Yates is to be taken to have accepted that he is liable to Wallace for that sum.  Instead, Mr Serota identifies the figure of £4,158 plus VAT and says that Mr Yates must be taken to have stated, certainly to the lessees, that Mr Yates was liable to Wallace for that figure.  In that way, Mr Serota submits to me that the unliquidated claim for some £6,500 pursuant to the three invoices to which I have referred has now got a liquidated element, not the entirety of the liability of Mr Yates, but a liquidated part of it, represented by £4,158 plus VAT.

30.	It seems to me that the question for the Registrar and the question for me is whether the conduct of Mr Yates, the communications between Wallace and Mr Yates and any other relevant conduct has given rise to an express or implied agreement binding Mr Yates to pay, as a liquidated amount, the sum of £4,158 plus VAT to Wallace.  Whether there was an express or implied agreement depends on the evidence in this case and, I will now look closely at the evidence which was before the Registrar, the same evidence being referred to on this appeal.

31.	As I have indicated, the Deputy Registrar had directed that the parties should put in evidence on this point, although it is curious that the evidence put in by Wallace is not currently relied upon to advance their case.  On the other hand, counsel for Mr Yates has shown me some documents which Mr Serota did not himself put forward which Mr Yates accepts may be material on this question.  I start with the letter of 16 October 2008 from Wallace to Mr Yates.  Ms Bone, of Wallace, writes to Mr Yates asking him to settle Wallace’s outstanding fees in the sum of just under £5,000.  She also says to Mr Yates the following:

“Please note I am seeking recovery of section 33 costs from the participating tenants, but in the meantime my firm’s fees are required to be paid.”
(Quote unchecked)

32.	Nothing seems to have happened until 19 January 2009 when Ms Bone of Wallace wrote again to Mr Yates.  There is an obvious typo in the letter and I will read it as corrected.  She writes:

“As you are aware, my firm’s unpaid fees are in the sum of £6,563.60.  Please may I ask you to settle the outstanding sum as soon as possible.  In the meantime, I am recovering all costs due to you in accordance with section 33 of the 1993 Act.”
(Quote unchecked)

33.	On 23 January 2009, Mr Yates replied to Ms Bone.  His letter begins:
“Further to our recent telephone conversation …” 

I was not given any evidence, nor was the Registrar, as to what was discussed in that conversation.	Mr Yates did attach an invoice from an earlier firm of solicitors, SA Law.  He said it was for work on the intended purchase of the freehold.  He trusted that the monies that were the subject of that invoice were recoverable and thanked Ms Bone for her help.  It was on that day that Wallace sent to the lessees’ solicitors a letter which I have not seen which identifies the sum due under section 33 for legal fees as being £4,500 plus VAT.  I have not been shown how that figure was calculated.
  
34.	The next thing that happened was on 11 February 2009.  Ms Bone wrote again to Mr Yates.  The letter again refers to a recent telephone conversation.  The Registrar did not have and I do not have any specific evidence as to what might have been said in that telephone conversation.  The letter stated that the nominee purchaser’s solicitors had requested a breakdown of, it says, “our costs” for their consideration.  I imagine that the reference to “our costs” related to the total sum being claimed under section 33.  Ms Bone told Mr Yates she was arranging for the breakdown to be sent in order that “we” can recover the costs.  It is open to interpretation whether “we” meant Mr Yates or Wallace.  In favour of Wallace, I will assume “we” meant Mr Yates and that Ms Bone was taking his side in seeking to advance his claim under section 33.  She ended her letter of 11 February 2009 by asking Mr Yates to settle Wallace’s outstanding fees within the next seven days.

35.	The next thing that happened was that Wallace sent to the lessees’ solicitors a breakdown of their claim under section 33.  I have been shown a copy of that breakdown.  It is the one which identifies in detail the calculation of £4,158 for Wallace’s fees, plus VAT. 
 
36.	I do not think there was any other evidence as to communications between any relevant person prior to 2 March 2009 when Wallace served its statutory demand on Mr Yates.  That, I think, therefore was the evidence before the Registrar on whether something had been agreed or whether there was an estoppel in relation to the question of fees which meant that, out of the unliquidated claim for some £6,500 worth of fees, there had come into being a liquidated part represented by £4,158.

37.	I think, for the sake of completeness, I ought to refer to the parts of Mr Yates’ witness statement which Mr Serota drew to my attention.  I have to say that there is very little in Mr Yates’ witness statement that helps Wallace.  The paragraphs to which I was referred were paragraphs 19, 27, 31, 41 and 49.  I will not read all of those paragraphs into this judgment.  It is right to say that Mr Yates was accepting that the claim which was put under section 33 as against the lessees was a claim which was made with his authority.  I have not seen the detail of the claim, but I will proceed on the basis that, when Wallace wrote to the solicitors for the lessees, Wallace said that Mr Yates had incurred various costs, including legal costs and including costs payable to Wallace which came within the headings of section 33.

38.	Beyond that finding, I fear I do not see anything in Mr Yates’ evidence that really helps Wallace on this appeal.  Mr Serota stressed paragraph 49 of the witness statement.  He drew it to the attention of the Registrar.  He referred to it in the grounds of appeal.  So, for what it is worth, I will read it out.  Paragraph 49 is a statement by Mr Yates as follows:

“I do not accept that I owe them a penny because of the matters set out above.  I agree that they should be paid by the tenants the amount that they said they were charged for the work that they did in relation to the notice.  However, that is different to saying that they ought to be paid by me.”
(Quote unchecked)

39.	Mr Serota says, “There you are.  That is a case of Mr Yates accepting that the amount put forward in the section 33 claim was an amount that Wallace should be paid by the lessees”.  If, which I doubt, there is any admission contained in paragraph 49 of a liability on the part of Mr Yates for that sum, then any such admission can only have come on 13 July 2009 which is a considerable period after the date of the statutory demand.

40.	Having summarised the evidence before the Registrar, I can now consider the argument which is put forward.  Mr Serota, on behalf of Wallace, submits to me that, by 2 March 2009, Mr Yates had made an agreement, expressly or by implication.  The agreement had two elements.  One was that Mr Yates was liable to Wallace for a minimum figure of £4,158 plus VAT, irrespective of whether Mr Yates was liable for more when the unliquidated claim made by Wallace was investigated, so that Mr Yates was, it is said, committing himself to a minimum figure and leaving open the possibility he may be liable for further amounts.  It is said that Wallace LLP was not committing itself to any figure.  It would, of course, take the £4,158 as a minimum and reserve the right to say that other charges were also recoverable under the retainer letter.

41.	The second thing which Mr Yates is said to have agreed expressly or by implication is that he was irretrievably liable for the minimum figure of £4,158 plus VAT, even though it should transpire that the lessees might be able to demonstrate that the figure payable under section 33 was less than that figure.
 
42.	I have referred to the very limited evidence as to the communications between Mr Yates on the one hand and Wallace on the other and the communications between Wallace acting for Mr Yates and the solicitors for the lessees. 
 
43.	Mr Yates knew before 2 March 2009 that Wallace was taking action under section 33 to obtain a determination that the lessees had to pay something to the costs which Mr Yates was liable to pay Wallace.  There is no evidence that Mr Yates knew what figure was being claimed under section 33, nor the way in which it had been calculated.  In view of the fact that he did not know what the figure was, it seems to me difficult  to say that he had agreed a specific figure as the minimum extent of his liability and irrespective of what he recovered from the lessees.  Wallace’s case therefore has to be that even if Mr Yates did not agree a specific figure, he agreed to commit himself, as a liability to Wallace, to whatever figure it might be which Wallace had put forward on his behalf in the section 33 claim.

44.	I have rehearsed the evidence, I think comprehensively.  I have identified the agreement contended for by Wallace.  In my judgment, Wallace has not come anywhere near establishing the necessary express or implied agreement on the facts of this case.  What Wallace has succeeded in doing is showing that it would be potentially very unfair to the lessees if Mr Yates were able to recover from them under section 33 a certain sum of money and then seek to challenge his liability to pay that same sum of money to Wallace.  It may very well be that result will never come about.  Today is not the occasion when the court determines the extent of Mr Yates’ liability on a quantum meruit or on a Solicitors Act taxation.  What today is about is whether it is open to Mr Yates to say either that he is right or that he has an arguable case to the effect that he did not agree to commit himself in the way contended for by Wallace prior to 2 March 2009.  In my judgment, Mr Yates has at least a strong arguable case.  Indeed, on the material before me, I hold that it has not been demonstrated that he did commit himself to the agreement alleged.

45.	Mr Serota puts forward an alternative submission to the effect that Mr Yates is estopped, as regards Wallace, from denying that he is liable to Wallace for at least the figure which was put forward on his behalf to the lessees.  Mr Serota puts the case very attractively.  He says that Mr Yates, acting through Wallace, made a statement binding him to the lessees to the effect that Mr Yates was liable to Wallace for £4,158 plus VAT.  It is said that, in the same way as Mr Yates made that statement to the lessees, he made the identical statement to Wallace.  It is then said that he is estopped from going back upon that statement.

46.	The suggestion that Mr Yates made the statement to Wallace, in my judgment, is a little unreal.  It was not Mr Yates who made the statement to Wallace.  It was Wallace who made the statement to the lessees, albeit that they were acting on behalf of Mr Yates.  They were the originators of the statement.  On the evidence today, it cannot be shown that Mr Yates even knew what the statement precisely was.  All he knew was that a statement of some kind was being made on his behalf to a third party.  Even if I held that Mr Yates made a representation or a promise to Wallace, I need to be shown that Wallace changed its position in reliance and that it would be inequitable for Mr Yates to resile from his earlier representation or promise.  Wallace has not, in the end, shown me that it did change its position in reliance, nor that it would be inequitable for Mr Yates to put forward any arguable points he might have on a quantum meruit claim or on a Solicitors Act taxation.  I can see that it might be inequitable as regards the position of the lessees, if the lessees were made to pay one sum to Mr Yates under section 33 and yet Mr Yates was liable to pay a smaller sum to Wallace, but that is not an inequity which Wallace could pray in aid.  That would be an inequity which the lessees could conceivably pray in aid, on those hypothetical facts.

47.	For all these reasons, I have come to the conclusion that the decision of the Registrar was essentially correct when she found that there was no agreement and no estoppel which turned unliquidated claims into, in part, liquidated sums in the way contended for by Wallace.  It follows, in my judgment, that she was right to set aside the statutory demand and it therefore follows that this appeal will be dismissed.