Legal bills ends 40-year friendship

By Alex Easton

BALLINA service station owner and mechanic John Piercy said he really wanted the $7000 he claims one of his customers owed him.

But not enough to spend $37,000 doing it, no matter how good a mate his lawyer Ballina solicitor David Johnston was. And he still hasn't got the money he is owed.

The legal bill has killed a 40-year friendship between the two men and triggered a bitter argument over whether or not Mr Johnston warned Mr Piercy about his spiralling costs.

Mr Piercy said he didn't, and the Law Society agrees with him. Sydney costs assessor Peter Scammell, on behalf of the society, ordered in June that Mr Johnston's bill be slashed by more than half after finding he had not properly warned Mr Piercy.

Mr Johnston said he did, but those warnings were delivered verbally, mate-to-mate. He agrees he gave no initial cost estimates, but at that stage the case wasn't supposed to cost Mr Piercy anything.

The legal action started out as a contra deal between the men back in 2003 one that had worked well for them many times in the past. Under that unofficial arrangement, Mr Piercy did some work on Mr Johnston's car and, in return, Mr Johnston would chase down money Mr Piercy said he was owed.

Then it got complicated.

Mr Piercy had kept his customer's car, as he was legally entitled to, with the plan it would be returned once his bill was paid. But he said his son, manning the service station alone one day, agreed to let her use it when the customer arrived in tears, saying she needed to collect her son from school.

Mr Piercy went to the customer's home and retrieved the car that afternoon, but the damage was done. Giving the car back, even temporarily, cast a legal shadow over his right to hold it.

That legal doubt gave Mr Piercy's customer enough traction to launch a defence against the costs case and that, Mr Johnston said, was when things began to get expensive.

"The moment it was going to be competitively defended I sent him (Mr Piercy) a cost agreement, as I was legally required to do," Mr Johnston told The Northern Star.

Mr Johnston, who said this was the first time in 45 years as a solicitor he had been brought before the Law Society, showed The Northern Star a copy of that agreement signed by him, but not by Mr Piercy.

There were no written cost updates, but Mr Johnston said he told his friend that chasing the bill was about to start costing serious money, and gave on-going warnings about the mounting costs. He said he rang a loud alarm bell when the legal bill was set to pass the $7000 he was fighting for, but Mr Piercy wasn't ready to back down.

Mr Johnston conceded none of those warnings were in writing, and that there were no precise written cost updates early on because they were difficult to predict.

"He understood it would cost him more than he was going to get; he'd been to court before and he knows what it costs and he knows what it involves," Mr Johnston said.

That's not the way Mr Piercy tells it.

"I had no idea he was going to bill me," he said. "A couple of times I said to him 'I'll have to do some work for you David', and he just laughed it off.

"If I thought it was going to cost something I would have pulled out if you were spending $2000 to get $4000 you would pull the pin."

The Law Society agreed.

In his finding on the matter, Mr Scammell quotes a submission from Mr Piercy's new lawyer, Michael Dakin, saying: "... why would any person or company, whether in business or in a private capacity, appraised of what their costs were likely to be, spend over $30,000 trying to recover $7000?"

"In my opinion, there is no reasonable answer to the question," Mr Scammell writes.

Mr Johnston said the answer was that Mr Piercy was determined to get his money back on principal, and that the cost involved in getting it didn't matter to him.

He also believed, for much of the case, selling the car would yield about $18,000, which would have covered most of the case's costs.

"He was going to get that money out of her," he said.

The end of the men's friendship came in January last year, when Mr Johnston told Mr Piercy he would no longer pursue the case and presented him with the $37,000 bill which sparked their dispute.

Both men say they are now past grief for the friendship that lasted for most of their lives.

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