Arnold Thomas and Becker v Finch
[2015] VCC 1431
•18 June 2015
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-13-01273
| ARNOLD THOMAS & BECKER PTY LTD (trading as Arnold Thomas & Becker) | Plaintiff (and defendant by counterclaim) |
| v | |
| JO-ANNE FINCH | Defendant (and plaintiff by counter-claim) |
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JUDGE: | HIS HONOUR JUDGE MACNAMARA | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 18, 19, 20, 21, 22, 25, 26, 27, 28, 29 May, 1, 2, 3, 4, 15 June 2015. | |
DATE OF JUDGMENT: | 18 June 2015 | |
CASE MAY BE CITED AS: | Arnold Thomas & Becker v Finch | |
MEDIUM NEUTRAL CITATION: | [2015] VCC 1431 | |
REASONS FOR JUDGMENT
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Subject: Contract; debt claim; negligence
Catchwords: Retainer of solicitor in discrimination complaint; claim for recovery of costs and disbursements; counterclaim for alleged breach of retainer; client discharged solicitor and did not accept reasonable advice; solicitor not bound by no win/no fee arrangement; negligence in preparation covered by Advocate’s immunity; no itemised bill given despite request; claim and counterclaim dismissed; unused trust money to be refunded.
Legislation Cited: Legal Profession Act 2004; Wrongs Act 1958; Civil Procedure Act 2010; Defamation Act 2005; Limitation of Actions Act 1958; Victorian Civil and Administrative Tribunal Act 1998; Fair Trading Act 1999; Trade Practices Act 1974
Cases Cited:Hunt v Great Northern Railway [1891] 2 QB 189; Roberts v Bass (2002) 212 CLR 1; Moussageas v Victorian Compensation Lawyers [2012] VSC 330; BP Refinery (Westernport) v Hastings Shire Council (1977) 52 ALJR 20; JJ Savage & Sons Pty Ltd v Blakney (1970) 44 ALJR 123; Giannarelli v Wraith (1988) 165 CLR 543; D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1; Kendirjian v Lepore [2015] NSWCA 132; Goddard Elliot v Fritsch [2012] VSC 87; Bill Acceptance Corporation Ltd v GWA (1983) 50 ALR 242
Judgment: (1) The defendant’s liberty to reopen her case is rescinded; (2) On the plaintiff’s claim, there is judgment for the defendant; (3) On the defendant’s counterclaim subject to the plaintiff’s obligation to refund $9,000 held on trust, there is judgment for the plaintiff.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff/ | Mr D. Harrison | Wisewould Mahoney |
| Defendant by Counterclaim | ||
| For the Defendant/ Plaintiff by Counterclaim | In Person |
HIS HONOUR:
Background
1 Ms Finch was employed by the Heat Group Pty Ltd from July 2002 until 10 October 2006 when she ceased duties and was granted benefits under the WorkCover scheme for work-related stress. She has not returned to active employment the Heath Group since. Her employment with Heat Group was terminated in March 2011.
2 The events of this period and Ms Finch’s grievances against the Heat Group and various of its executives have continued to reverberate through the legal system to this day.
3 The Heat Group was said to be a wholesale distributor of cosmetics and personal care items. Ms Finch held a number of management positions with the company, including state manager. She alleged that during the course of her employment the Heat Group and a number of its executives subjected her to sex, impairment and pregnancy discrimination and victimisation contrary to the Equal Opportunity Act 1995.
4 In accordance with the procedure under that statute, she made a complaint, initially, to the Equal Opportunity Commission. No resolution was reached through the Commission’s alternative dispute resolution processes and, in accordance with the statute, her complaint was referred to the Victorian Civil & Administrative Tribunal (“VCAT”). The evidence does not disclose the date on which this occurred but the proceeding at VCAT seems to have been commenced at some point in 2007.
5 Ms Finch was initially represented in the Tribunal proceeding by the law firm Frank Sanna & Associates and thereafter by the firm EMA Lawyer Procedures. Ms Finch, as applicant, was required to file particulars of complaint. EMA, in a letter of advice dated 8 April 2008, stated:
“As advised to you, we consider that the Particulars of Complaint are poorly drafted and would require a complete rewrite. They are unclear in many aspects, seek to incorporate extensive hearsay evidence and incorporate many irrelevant facts to your claims.”
6 In the same letter, EMA referred to a number options and causes of action, including the discrimination claims in the Federal Court of Australia. There was also advice given about alleged breaches of an industrial award known as the Commercial Sales (Victoria) Award 1999 and breaches of the freedom of association provision of the Workplace Relations Act 1996. Whilst EMA were acting, the Heat Group made a settlement offer of $75,000 all in, but that offer was not accepted.
7 This offer was raised with Ms Finch in a letter from EMA dated 17 June 2008 by EMA. In an email dated 24 June 2008, Ms Finch instructed Ms Deanna Oberdan of EMA that she was:
“Happy to accept a settlement of $125,000 based on our discussions in emails of today, releasing the company from the VCAT hearing and Federal Court action of breach of award and contract. I do understand that I am able to lodge a personal injury complaint, should I wish to do so at a later stage.”
8 An earlier email of the same day explained the make-up of this figure as constituting a total of the $75,000 offer made, $19,000 “that they rightfully legally owe me” and $30,000 in legal fees, giving a total of $124,000, which she rounded to $125,000.
9 This counteroffer was not accepted nor, at that stage, was any further settlement offer forthcoming from the Heat Group.
10 In July 2008, Ms Finch approached Arnold Thomas & Becker, one of the smaller city firms specialising in personal injury claims “with a view to possibly representing me in ‘other litigation’ at some point in the future”. (CB 123) She spoke to Ms Anastasia Floros (now Mrs Eleftheriou). In an email on 7 July 2008 she told Mrs Eleftheriou that her VCAT claim was before the Tribunal for a directions hearing and that it had received some publicity in the Herald Sun. She said:
“The other issue is a personal injury claim…which I have not yet pursued. I guess that the thing to do now is wait to see if they make me an offer, after yesterday’s article [in the Herald Sun] and then I may settle with them, if not, then I should roll over to your firm to take over the VCAT and Federal Court matters and also speak with my Doctor in regards to personal injury.” (CB 440)
11 It seems that Ms Finch had received a recommendation of the services of the plaintiff firm from her brother. (CB 441)
12 By an email of 10 July 2008, Ms Finch asked Mrs Eleftheriou:
“1. What barrister do you use and do you know if they work on a no win/no fee basis?
2. Do you know any barristers that would work with us, on a no win/no fee basis?
3. What are your fees?”
(CB 439)
13 According to Ms Finch, some time later in a telephone conversation, Mrs Eleftheriou confirmed that Arnold Thomas & Becker would act for her on a no win/no fee arrangement.
14 By an email of 20 August 2008, Mrs Eleftheriou enclosed a Conditional Costs Agreement together with a Disclosure Statement “in relation to this firm acting on your behalf on a no win/no fee basis”. She stated “we require the Conditional Costs Agreement to be signed in order for this firm to start acting on your behalf”. The Conditional Costs Agreement stated that Arnold Thomas & Becker’s legal costs would be on the “Federal Court Scale of Costs”. Paragraph 10, which was headed “If you stop using us or we cease to act for you” provided:
“If you terminate our retainer for any cause or if this law practice terminates the retainer for good cause, during the course of the matter and before there is an outcome, then all legal costs incurred in clauses 1 and 4 will be charged but without any uplift fee being applied.
We may terminate our retainer with you if you do not accept reasonable legal advice we give you relating to your matter. If this happens, then all legal costs incurred in clauses 1 and 4 will be charged but without any uplift fee being applied.”
15 Clause 9 provided an entitlement for an itemised Bill of Costs which it was said would be “given on your request made within 30 days after receipt of a lump sum Bill of Costs”. The Disclosure Statement made pursuant to s3.4.9 of the Legal Profession Act 2004, stated that the legal costs would be charged “on the scale D of the County Court Scale of Costs”. Further, it was stated:
“You will be liable to pay to us the following legal costs only if there is a successful outcome of this matter. There is a successful outcome of this matter if you receive an amount of money after payment of all liabilities (including tax) that you incur in the matter to us and to any other person including any opposing party.”
16 The Disclosure Statement estimated the costs as being between $5,000 and $60,000. Clause 10 headed “Engagement of another lawyer” stated:
“We may need to engage on your behalf a barrister or other lawyer to provide specialist advice or services. We will consult you about the terms of this engagement and provide you with a statement setting out the details of this person’s fee before incurring the expense.
We engage barristers on a no win/no fee basis and in the event that your case is unsuccessful and that you accept reasonable advice, the barristers that we engage will not charge a fee for work performed.” (CB 484, 485, 487, 488, 490-1)
17 Mrs Eleftheriou, in response to queries from Ms Finch, sent her an email on 27 August 2008 advising that the uplift fee provided for in the Conditional Costs Agreement in the event of success would be 20 per cent shown in the form previously emailed. She also confirmed that it was the County Court Scale that would be charged rather than the Federal Court Scale. She said “the fees vary in relation to attending you in conference per hour but it is approximately $45 per quarter hour”. (CB 495)
18 Ms Finch faxed the signed Conditional Costs Agreement to Mrs Eleftheriou on 27 August 2008. (CB 501) The signed version included handwritten annotations by Ms Finch noting a $180 per hour charge rate, a translation of the $45 per quarter hour rate advised by Mrs Eleftheriou, and an uplift fee of 20 per cent, as discussed by email.
19 In a letter dated 21 August 2008 addressed to her Honour Judge Harbison, as head of the anti-discrimination list at VCAT, Ms Finch said that she was writing to her Honour “on the notice you have received from EMA Lawyers today advising that they cease to act for me, as of today”. She complained that she had been overcharged, not treated “with fairness, due diligence, courtesy and professionalism” and had been threatened that EMA would cease to act “even when I had advised I was not fully informed to make the required of the situation”.
20 Ms Finch had sent a letter to Ms Oberdan of EMA dated 5 August 2008. This was a response to a letter dated 4 August. No letter of that date was put in evidence before me. Counsel for Arnold Thomas & Becker thought the reference might have been to a letter of 5 August which was in the Court Book. It seems from Ms Finch’s letter that EMA had made a number of criticisms of Ms Finch’s attitudes as a client, including an alleged “persistent failure or refusal to accept proper and professional legal advice”, alleged “conduct escalating substantial and unnecessary legal costs”. As a result, EMA had threatened to cease to act. Ms Finch concluded, “it was very disappointing and causes me a huge amount of stress when I am falsely accused and/or feel threatened in this manner”. (CB 447-452)
21 Ms Hamnett of counsel had provided EMA with a memorandum of advice dated 1 August 2008. (CB 443A-443C) Ms Hamnett recommended that the settlement offer by the Heat Group of $75,000 was “a reasonable amount which I recommend she accept”. She noted, however, a counteroffer of settlement should be made “in the amount of $105,000-$115,000, which offer would be open until Wednesday, 6 August 2008”. She concluded, “if you chose not to follow my recommendation, I am entitled to elect to cease acting in this matter. I advise that I will chose to do so in this matter.” EMA advised that they were ceasing to act as of 18 August 2008. (CB 478)
22 Apparently, the Tribunal had directed that Ms Finch file amended consolidated particulars of complaint by 22 September 2008. Arnold Thomas & Becker sent a facsimile to EMA on 15 September 2008 seeking release of Ms Finch’s file to them, advising “we were instructed by our client that you will agree to pay your reasonable costs and disbursements upon successful completion of her claim”. EMA responded in a letter dated 16 September 2008 addressed to Mrs Eleftheriou agreeing to release the file and noting their fees of $19,855.32 owing as at 21 August 2008.
23 Mrs Eleftheriou sought to brief Mr Neil Campbell of counsel to do the amended particulars of complaint. She noted, however, a call from Mr Campbell on 19 September 2008 when, in light of the fact that the proposed document would be long “over 30 pages”, and that, on his understanding “client had an offer of $85K [he was] not comfortable to do it” on a no win/no fee basis. (CB 520) On 22 September 2008, she sought to retain Mr Jim McKenna of counsel, who said that he would have to see the brief to consider whether to undertake the work on a no win/no fee basis. (CB 521)
24 The following day, Mr McKenna rang Mrs Eleftheriou advising that he had spoken to Ms Hamnett, who had previously acted, and that Mr McKenna would “not be in a position to take it as the client was offered $75K which Ruth recommended she take”. (CB 522)
25 The following day, Mrs Eleftheriou rang Ms Finch advising that two members of counsel had been unwilling to do the amended particulars of claims on a no win/no fee basis. Mrs Eleftheriou said that she would approach two more barristers but that, unless this is successful, Ms Finch may have to “provide us with upfront money to cover fees”. (CB 523)
26 On 25 September 2008, Mrs Eleftheriou sent an email to Mr Peter Harris of counsel stating that she had been recommended to him by a colleague, Mr Larry Dent. She advised that a $75,000 offer of settlement had been made to Ms Finch but rejected. She asked if Mr Harris would undertake the work on a no win/no fee basis. (CB 524). It seems Mr Harris accepted the brief and a conference was arranged at Mr Harris’ chambers “on Monday at 2pm”. (CB 525)
27 It seems that a further conference was held on 11 December 2008 and Ms Finch authorised the making of a counteroffer to Heat Group for “$110,000, as per the advice I received”. (CB 527) Shortly after this email, Ms Finch said that she “forgot to mention the accident make-up pay. It is around $300 per week for 78 weeks, which equates to approximately $23,400”. She said this should be mentioned as part of the settlement discussion. (CB ibid).
28 On the original email she mentioned some 27 matters supporting the justice of her claim, which she urged be put to those acting for the Heat Group. There was a further directions hearing at VCAT later that month and the court book records action by both Mrs Eleftheriou and her “legal assistant”, Ms Daiana Dolley, seeking to obtain appearances on a no win/no fee basis. Mr Harris provided a list of names to be approached which included the name of “Mr David Staindl”, of whom more later. (CB 529-533)
29 Mr Staindl eventually agreed to attend the directions hearing but on the basis of a fee of $660.
30 On 16 December 2008, Mrs Eleftheriou sent an email to Mr Peter Harris advising that no member of counsel would undertake the appearance on a no win/no fee basis. Mr Harris replied:
“That does not surprise me…I think the fact is that you’ll just have to get money in from Ms Finch. It would be good for her to see that what may have seemed to be a free ride has come to an end, and is doing so because she has unreasonably refused to accept a very good offer. [This is presumably a reference to the $75,000 offer referred to above]. On the costs figures we discussed the other day Ms Finch’s refusal to accept a good offer has led to a significant increase in costs. As I suggested the other day, hard as it seems, it might be time to pull the pin on the no win/no fee arrangement.” (CB 534)
31 As to the proposed counteroffer Mr Harris, in an email to Mrs Eleftheriou of 17 December 2008, said that he did not think it would be wise to make a settlement offer of $133,400, that is, $110,000 plus the $23,400 claimed as “make-up pay”. He said, “I think you have to tell her that the $110,000 offer, if put, is to be taken to include any accident make-up pay amount. Note that she did not want to accept the $75,000 despite that it apparently increased from $50,000 to take account of one month’s notice and three months’ paid maternity leave – at $4,000 per month this is $16,000. And I think you have to firmly tell her that if she does not accept that advice, you can no longer act for her. Given that your firm has accepted her on a no win/no fee basis, though I have not seen the terms of your retainer, I would have thought that you are entitled to bring the retainer to an end. If she won’t accept your advice: I will have to consider my own position as well.” (CB 535)
32 Mrs Eleftheriou had a telephone conversation with Ms Finch on 18 December 2008 dealing with the issue of settlement proposals and the difficulties of obtaining counsel on a no win/no fee basis. According to a memorandum to file from Mrs Eleftheriou, “[Ms Finch] wants to put $115K as a counteroffer”. (CB 536) It seems Ms Finch conferred with Mr Harris and Mrs Eleftheriou on 11 December 2008 (CB 527).
33 She then spoke to Mr Harris who said that this counteroffer would be okay if it included make-up pay, one month’s termination pay, etc. There was then a telephone call to Ms Finch who authorised the putting of the counteroffer. Apparently at this stage there was an attempt on the part of the Heat Group to obtain an order of strike-out of the particulars of complaint. (CB 537)
34 On 19 December, Mrs Eleftheriou wrote to Ms Finch setting out the terms of the $115,000 counteroffer which was to include the following:
(i) the three months’ paid maternity leave;
(ii) one month’s termination notice paid;
(iii) 77 weeks of make-up pay;
(iv) settlement monies to be paid within 30 days;
(v) written statement of service;
(vi) release from all claims relating to her employment with the respondent;
(vii) confidentiality;
(viii) resignation from employment;
(ix) mutual non-denigration provision.
35 The letter said, nevertheless, that an offer from $75,000 to $115,000 should be accepted.
36 The matter was listed for a further directions hearing in February. (CB 538-540)
37 On the same day, an offer along the lines referred to in the letter just described was made to the solicitors for the Heat Group. (CB 540-541)
38 There was an attempt to brief Mr Harris to do the directions hearing. Mr Harris was apparently reluctant to accept the brief. (CB 542 and 544) On 23 February 2009, that is, the day before the directions hearing, Mr Harris agreed to appear. The author of the note (not apparently Mrs Eleftheriou because it is in a different handwriting) recorded, “he [that is, Mr Harris] is aware that I am desperate”. (CB 545)
39 On 25 February, Senior Member Walker set the proceeding for a final hearing before Deputy President McKenzie for 10 days commencing 21 September 2009. He made directions for the filing and service of witness statements (Ms Finch’s were due on 8 July 2009) and lists of documents and points of defence by the respondent. (CB 546)
Approach of final hearing – 29 October 2009
40 A directions hearing was scheduled by the Tribunal on 14 September. Mr Harris, who had been rendering assistance, was unavailable to represent Ms Finch. (CB 548) Meanwhile, Ms Finch sent a letter to Mrs Eleftheriou at Arnold Thomas & Becker dated 7 September 2009, which included some additional emails “that you currently do not have on file, from various people in support of my case”, together with a list of documents Ms Finch believed that Arnold Thomas & Becker should obtain from the Heat Group and the other respondents to the proceeding and a list of evidence. She suggested that evidence be obtained by subpoena from the Heat Group and its solicitors. This list consisted of some 20 items. There was a further list of evidence which Ms Finch said “should be provided to the court”. This consisted of some 26 items. (CB 549-552) Also included was a list of suggested witnesses with an explanation as to their involvement in the relevant events and a comment upon what evidence they might give and their significance in the narrative. (CB 553-557)
41 Meanwhile, the process of obtaining counsel on a no win/no fee basis with Mr Harris unavailable for the forthcoming directions hearing on 14 September began with Ms Daiana Dolley, Mrs Eleftheriou’s legal assistant, making a lengthy list of potential candidates sorted by clerk. (CB 558 & 559)
42 On 11 September, Mrs Eleftheriou sent an email to Mr Harris stating “the respondents have called a d/h in this matter on Monday at 2.15pm for non-compliance of filing and serving witness statement. We struggled to get in contact with all the witnesses but we have taken approximately eight statements which only one has been signed and filed with the court”. Mrs Eleftheriou sought suggestions for counsel to attend the directions hearing in the light of Mr Harris’ unavailability.
43 There is nothing to suggest that the Heat Group and the other respondents, who were executives or past executives, gave discovery. Mrs Eleftheriou did not think that Ms Finch was required to or made discovery. However, Ms Finch produced a document showing that the Heat Group’s solicitors had been billed for the copying of 396 pages of documents in the course of 2009. This is supported of Ms Finch’s contention that she gave discovery to the Heat Group. It is evident that the final hearing date was put back from September to 29 October though the relevant order was not put into evidence.
44 Whilst attempts continued to brief counsel for the directions hearing, Mr Harris was retained to appear at the final hearing on 29 October. (CB 566)
45 At the directions hearing on 14 September, Ms Finch was represented by Ms Sheehan of counsel. It appears from the orders which the Tribunal constituted by Deputy President Coghlan made, that the Heat Group and the other respondents were seeking a summary dismissal of Ms Finch’s complaint for non-compliance with an earlier order to file her witness statements, presumably the one made by Senior Member Walker. Deputy President Coghlan ordered, inter alia, that “unless [Ms Finch] files and serves her witness statement by noon 23 September 2009, her complaint will stand dismissed on the merits”. She ordered Ms Finch to pay the respondents’ costs of the directions hearing fixed at $500. She confirmed a final hearing on 29 October 2009 as previously scheduled and required the respondents’ witness statements to be filed and served by 5pm 23 October 2009. She directed that there be no further evidence-in-chief beyond that contained in the witness statements without leave of the Tribunal. (CB 568 & 569)
46 Mrs Eleftheriou was trying to arrange a conference with Mr Harris. At 4.15pm on 14 September 2009, she sent an email to Mr Harris stating:
“I’ve spent all day working on this file as Anne Sheehan pretty much had me in tears about it.
I have managed to contact most of the witnesses but none really can provide me with a decent statement that reflects the particulars of complaint.
Ms Finch is preparing her statement and I have asked her to email it through so we can settle it.
I urgently need to speak to you about this matter and I have spoken to Ms Finch today about her expectations.” (CB 570-571)
47 Meanwhile, emails passed between Mrs Eleftheriou and Ms Finch about the text of statements, including the statement by Ms Finch’s husband. It seems that Mrs Eleftheriou had a conference with Mr Harris, as I read the material, in the absence of Ms Finch. On 18 September, Mrs Eleftheriou telephoned Ms Finch advising her that she had conferred with Mr Harris for four hours going through Ms Finch’s draft statement paragraph by paragraph. Some paragraphs had to be omitted because they did not reflect the allegations and claims in the particulars of complaint. Some needed to be omitted because they were irrelevant. There was a general need to be specific and accurate. Mrs Eleftheriou stressed the importance of Ms Finch bearing the onus of proof. (CB 574)
48 There was discussion about psychiatric evidence and a report from Ms Finch’s treating psychiatrist, Dr Rigby. (CB 576) Ms Finch suggested the need to “subpoena people”. (CB 577)
49 The deadline laid down by Deputy President Coghlan was met and so Ms Finch’s complaint did not stand summarily dismissed. On 24 September 2009, however, Mr Harris advised that he would not appear for Ms Finch at the hearing. A few minutes later, Mrs Eleftheriou responded to Mr Harris, stating:
“I’m now with the unhappy face of not having a barrister to do this case for me. I know that no barrister will want to touch this brief and I am lost as to what to do. I don’t want to brief Anne Sheehan, she almost felt embarrassed being at the last dh. She asked for recommendation.”
50 After a substantial delay, Mr Harris responded on 7 October 2009 at 12.42 with a list of 10 barristers whom he said were “members of the Industrial Bar Association whose work I am familiar with”. The names suggested included Mr David Staindl. (CB 581-582)
51 There then followed an extended process in which Arnold Thomas & Becker, principally through the agency of Mrs Eleftheriou’s legal assistant, Ms Dolley, approached a range of barristers commencing with those suggested by Mr Harris in his 7 October email seeking to retain them for trial on a no win/no fee basis. Ultimately, no counsel could be retained on that basis.
52 On 21 October 2009, Mr Harris sent a further longer list which seems to constitute the entire membership of the Industrial Bar Association. It will be seen that it was barely more than a week until the final hearing with no trial counsel retained. At this point it seems these difficulties had not been disclosed to Ms Finch.
53 Mrs Eleftheriou said that she did not wish to approach Ms Finch with a wholly negative communication “we’ve been unable to retain counsel for your final hearing…”. She wanted to be able to say “Mr Harris has made himself unavailable but we have obtained the services of Mr/Ms…”.
54 On 22 October it seemed that Mr Hancock of counsel might accept the brief on a no win/no fee basis and Mrs Eleftheriou arranged for the papers to be delivered to him. (CB 594 & 595)
55 Ms Finch sent an email to Mrs Eleftheriou on 29 October 2009 stating that she had spoken to another person at Arnold Thomas & Becker, namely, Cindy, as she was “a bit concerned about things being addressed in time i.e. subpoena’s (sic) for example”. She asked for copies of “the company’s response, all witness statements and any other evidence that they have provided…”. (CB 598)
56 The respondents’ witness statements were due in accordance with the Tribunal’s order by 5pm on 23 October. On that day, a solicitor from Minter Ellison acting for the Heat Group and the respondents telephoned Mrs Eleftheriou. He sought dispensation to email some of the respondents’ witness statements after 5pm, to which Ms Eleftheriou agreed. (CB 599)
57 Then, some 13 statements, including lay statements and three expert medical reports, were despatched to Mr Hancock at his chambers. On the morning of 26 October, when Mrs Eleftheriou rang Mr Hancock, he advised that he would not be able to appear. (CB 600-601) There then followed further enquiries as to the availability of counsel, which proved fruitless.
58 These difficulties with representation were finally disclosed to Ms Finch when she telephoned Mrs Eleftheriou on 26 October 2009 in response to the call from Mrs Eleftheriou. Mrs Eleftheriou’s note describes Ms Finch as being “upset”. With the attempt to retain counsel on a no win/no fee basis proving fruitless, Mrs Eleftheriou’s note records that Ms Finch “will need to provide $$ upfront”. Ms Finch’s first suggestion was that the brief be offered to Mr Harris on a fee-paying basis. Mrs Eleftheriou said she was awaiting a call back. (CB 608)
59 As it turned out, however, Mr Harris said that he was, in any event, otherwise committed and so further enquiries were made by reference to a list provided by Mr Harris, this time seeking the fees charged by each member of counsel.
60 That same day, 26 October 2009, Ms Finch’s husband called by appointment to collect the respondents’ written statements. Apparently, what was made available to him on that occasion was only about half of the statements which had been filed and served on behalf of the Heat Group and the other respondents.
61 Mr Harris recommended Mr Staindl, whom Mrs Eleftheriou forthwith retained. (CB 612-613) His fees were a daily rate of $1,800. Arrangements were then made to pay $18,000, representing counsel’s fee for 10 days into Arnold Thomas & Becker’s Trust Account (CB 614-615)
62 Meanwhile, in an email on 26 October at 11.43am, Ms Finch complained that she should have been told of the problems “three weeks ago…rather than just calling me and telling me today with only three days to go to my trial…I could have tried to arrange something”.
63 A conference was arranged at 2pm on 28 October, that is, on the eve of the final hearing at Mr Staindl’s chambers. (CB 620)
64 Meanwhile, on 27 October, Ms Finch’s husband collected the balance of the respondents’ written statements.
65 On 27 October, Mrs Eleftheriou spoke to Mr Staindl. According to her note, Mr Staindl was “worried about the volume of material”. He spoke to his opponent about possibly delaying the commencement of the hearing to after Melbourne Cup Day (a public holiday) which fell on 3 November that year, that is, the Tuesday after the scheduled trial date commencement. Mr Staindl told me that what he had in mind was not an outright adjournment but a delay of the commencement of the hearing until the day after Melbourne Cup Day, that is, 4 November. The conference was brought forward to noon from 2pm.
66 At this conference on the eve of the final hearing in the proceeding, Ms Finch, according to a note from Mrs Eleftheriou, said, “I want them to be exposed. I also want fair compensation”.
67 Mr Staindl told me that he had been briefed with five lever arch folders of material. He could not say precisely what those five lever arch folders contained and despite a call from Ms Finch in the course of the trial before me, no memorandum or table of contents for Mr Staindl’s brief was produced. Mr Staindl thought that he had the particulars of complaint and the response by the Heat Group and the other respondents, the witness statements filed on behalf of Ms Finch and the witness statements and attachments filed on behalf of the respondents. At this stage, Mr Staindl conceded that he was not fully across all this material.
68 At the conference with counsel at midday on 28 October, the eve of the scheduled final hearing, according to notes of the conference taken by Mr Price, a legal trainee employed by Arnold Thomas & Becker, it was commented that Ms Finch remained in receipt of weekly WorkCover payments. Ms Finch said that she was owed $12,000 for maternity leave. She said that she would have returned to her employment with the Heat Group after the birth of her second child (in February 2009), that she was on “stress leave”.
69 Again, according to Mr Price’s note, Ms Finch said that she had been offered “one month termination” in 2006. Mr Staindl observed that no costs would be awarded at VCAT. This meant, generally, that Ms Finch would not be liable for the Heat Group’s costs if she lost. He said there was also a problem as to “the extent of [Ms Finch’s] pain and suffering”.
70 Ms Finch mentioned $20,000 in past economic loss and she was in the situation of being unable to work again in the cosmetic industry and would need to retrain. Mr Staindl observed that the legal costs may be $30,000 if the proceeding ran. Ms Finch said that she had made an offer to settle for $125,000 a few months ago, but would take next to nothing “if it means I get a day in court”. She referred to one of her Honour Judge Harbison’s decisions where a large award of compensation was made under the Equal Opportunity Act.
71 Mr Staindl expressed his “strong view” that VCAT would not award costs. He continued, according to the note, “if you settle for less than 75K there may be an order than you pay R’s [sic] costs”. It would seem that this note is inaccurate. The likely meaning of what Mr Staindl said, as he himself confirmed in his evidence, was that, if the case ran and the Tribunal awarded less than $75,000, Ms Finch might be required to pay the Heat Group’s costs.
72 Mr Staindl also said that many of the statements prepared in support of Ms Finch’s case would not be useful because “they don’t go to issues in contention”. Ms Finch stressed that the Heat Group would be concerned about publicity and would only settle on the condition of confidentiality.
73 The note continued, this time in the hand of Ms Eleftheriou who had replaced Mr Price as Arnold Thomas & Becker’s representative, that it appeared that counsel for the Heat Group, Ms Deborah Siemensma, had a sudden death in the family and might seek an adjournment or deferral of the first day of the hearing the following day. Someone also noted that $20,000 was owing to EMA Lawyers.
74 Mr Staindl seems to have wound up the conference by expressing doubts as to the likely success of Ms Finch’s claim. He said there was not a significant economic loss because of the existence of a claim under the WorkCover legislation, and the pain and suffering component of any compensation would be “not worth a great deal”.
75 As to the statements filed on behalf of the Heat Group and the other respondents, he said “their evidence hurts us lots – real doubt that we will win at all” (CB 629-632).
76 The following morning, Ms Finch, Mr Staindl and Mrs Eleftheriou met prior to the commencement of the hearing. The hearing was held at 55 King Street, Melbourne and Mr Staindl’s chambers at Owen Dixon Chamber West was relatively distant from that location. Therefore, it seems that the parties met in a conference room at 55 King Street. The notes, which seem to have been taken by Mrs Eleftheriou, had Mr Staindl enquiring of Ms Finch if she would be interested in another mediation. The notes record the following response “maybe but believes it might be counterproductive”.
77 With a settlement figure of $115,000 suggested, Mrs Eleftheriou’s note records “client does not want an offer to be put”. Mrs Eleftheriou’s note continues, “I talk about reasonable advice and that we are looking to a no win/no fee basis”. This note is somewhat unclear in its own terms. In context, however, it is plain that Mrs Eleftheriou was reminding Ms Finch that the arrangements between her and Arnold Thomas & Becker, where that firm acted on a no win/no fee basis, were subject to cancellation if Ms Finch did not accept reasonable advice. (CB 633)
The abortive hearing
78 The parties appeared before Deputy President McKenzie at 10am. Mr Staindl said that he had only been briefed the day before yesterday. In light of the large volume of material, he did not believe that a hearing which commenced immediately would do justice to his client. He felt the matter would be ready to run in a few days and he had not given up hope of settlement. He had to go through the Heat Group’s material with Ms Finch and have an opportunity to take instructions from her on those matters.
79 According to the note, Ms Siemensma, counsel for the respondent, “ridiculed” the application because of the change of legal practitioner. She opposed an adjournment or delay and, in any event, sought an order for costs.
80 Deputy President McKenzie said she was concerned that the hearing might go beyond the scheduled 10 days necessitating an adjournment and break in the hearing before it could be completed. She said, however, that mediation should be attempted. She encouraged the parties to resolve their dispute and thereby minimise costs.
81 The Deputy President left the Bench to enquire as to the availability of a mediator. Upon her return, Mr Staindl suggested that the mediation commence at 10am on Monday. Mr Staindl said in his evidence to me that he was really hoping to have matters put off until the day after Cup Day, that is, the Wednesday of the following week. He was hoping that the logic of avoiding Cup Eve with its break on Cup Day would lead to that result eventually.
82 The Heat Group pressed that for any mediation, if it was to occur, for it to commence forthwith. Mr Staindl said that he was not in the position to do a mediation that day, presumably because of lack of preparation.
83 Eventually, Deputy President McKenzie appointed a mediation to commence on the Friday.
84 Ms Finch, Mrs Eleftheriou and Mr Staindl had a conference at 3pm. It was noted that a total of $50,000 in legal costs would have to be paid one way or the other, namely, $20,000 for EMA, $22,000 for Arnold Thomas & Becker and $8,600 in disbursements.
85 When the conference broke, it was recorded, “client had a chat with her husband re offer…”. (CB 634-637)
The mediation
86 The mediation was eventually appointed to commence at midday on 29 October. The mediator was Ms Frances Falduti. Mrs Eleftheriou was unavailable to attend on that day because of another court commitment. As a result, she deputed her colleague, Mr Kim Price, to attend in her stead on behalf of Thomas Arnold & Becker. Mr Price commenced with the firm as an articled clerk in 2008 and had not, at that stage, been admitted as a practitioner.
87 In an email to him sent on the evening of 29 October, she noted the need to recoup some $50,000 worth of costs and disbursements owing to EMA and to Arnold Thomas & Becker. She continued:
“The client is difficult, so should she reject or not instruct to put a reasonable offer tomorrow, we will have to put her on notice that she is not accepting reasonable advice and we will no longer act on a no win/no fee basis (the barrister is getting paid on a fee basis). I have spoken to LF [Mr Lee Flanagan the principal of Arnold Thomas & Becker] about this and he agrees. So basically if at mediation she is not accepting reasonable advice, we will seek to have her pay money upfront for legal fees.” (CB 639)
88 Mr Price made both handwritten notes and a typed memorandum to file recording his attendance.
89 The morning commenced with a preliminary conference at Mr Staindl’s chambers at 10.15am. According to the typed memo (presumably dictated after the event), “DS [Mr Staindl] advised most witness statements are useless”. The handwritten note recorded “distrust witness statements. Most cannot be used”. The diary note states:
“I [presumably Mr Price] went through records of correspondence with 25 plus witnesses provided by client. I advised that all were attempted to be contacted. Most were unwilling to become involved. Those who did talk, often were unable to provide specific examples, despite expressing ill-feeling towards Heat. Some did not recall JF [Ms Finch]. Others were not contactable. Overall, the witnesses she provided were unhelpful.”
90 Ms Finch said that she had lost $5,000 in commission. Mr Staindl said that that amount could not be claimed because she was on WorkCover benefits at the relevant time. Mr Staindl said that, in his view, any claim that Ms Finch might have had in the Federal Court was “worth very little”. He suggested offering a settlement figure of $115,000. Ms Finch wanted to speak to her husband. The handwritten note describes her saying, “I will not be pressured”.
91 The typed note (though not the handwritten note) has Ms Finch enquiring of Mr Price his opinion of the suggestion that she would recover no more than $40,000, which was attributed to Mr Staindl. Mr Price said that he “could only defer” to Mr Staindl.
92 Following the commencement of the mediation at what I assume was a private conference between the mediator and Ms Finch and her legal team, the mediator assessed the costs of running the case for Ms Finch at $45,000 and there was a chance that she would be awarded less than $75,000, in which case she might have to pay the Heat Group’s costs.
93 The mediator said that Ms Finch may be successful on a couple of minor points. According to the handwritten note, Ms Falduti continued, “might only get 25K, D [scil Heat Group] might ask for their costs”. Ms Finch’s response was that she did not care about costs. She had been warned about this many times. The handwritten note has the mediator saying, “they are cutting awards back now”. She referred to a case in which an applicant only got $8,000.
94 Ms Finch then raised “make-up pay”, that is, an arrangement whereby an industrial award or employment contract requires an employer to top-up or “make-up” the pay of an employee on WorkCover benefit to 100 per cent of the wages or salary which would have been payable if the employee were fit and working.
95 Mr Staindl said, according to the handwritten note, “you are not entitled to make-up pay”. Ms Falduti then said that the matter needed to settle.
96 Next, according to the handwritten note, Ms Finch said that her husband had advised that she, Ms Finch, was covered by an industrial award and had an entitlement to four weeks annual leave accruals per year.
97 Mr Staindl said that he did not believe that Ms Finch was covered by an award. “They [presumably the Heat Group] say you are not”.
98 Mr Staindl asked for instructions to put a settlement offer of $115,000. Ms Finch was reluctant. She said that she did not “even know my Federal Court options”. Mr Staindl said he thought they would be worth very little. The award, if it applied, might provide for make-up pay of, say, 13 weeks at $3,000; 26 weeks at $6,000. He said that an offer could be made excluding a claim for make-up pay and annual leave from the terms of settlement, though it does not seem that he pursued this option.
99 Ms Finch raised the issue of maternity leave. Mr Staindl said that a settlement with the Heat Group would require a global figure. Ms Finch asked Mr Staindl to go to the Heat Group with an offer of $115,000 excluding make-up pay and annual leave. Matters then broke for lunch. Presumably at another private meeting with the mediator Ms Finch complained that the Heat Group would not investigate her complaint. Mr Staindl said that he did not think that Ms Finch would win with her discrimination claim. The mediator said that in her view, a $200,000 award or settlement was unreasonable.
100 Mr Staindl was recorded as saying, “I have the award ‘commercial traveller’ – you would get next to nothing. They argue you are not even covered by the award”. Mr Staindl then said that the case would cost $45,000 to run.
101 Ms Finch said she did not care. She instructed an offer of “125K in full and final settlement of this proceeding”.
102 In an open mediation session in the presence of the Heat Group’s representatives, there was an offer of $50,000 for a full release, confidentiality, resignation and non-disparagement clause.
103 When matters resumed at 3.34pm, Mr Price left the mediation to attend to another matter. An articled clerk/trainee lawyer, Ms Odette Richwol, took over his role as note-taker (CB 651). Mr Staindl recommended that Ms Finch offer to settle for a figure around $100,000, to which Ms Finch replied that she would end up with no more than $9,000 when the legal costs and other amounts were provided for. She said that she needed closure. The mediator warned that pressing on with the proceeding would not give closure. She asked Ms Finch to consider her wellbeing and the fact that she would be interrogated for hours and cross-examined. The mediator submitted it was not worth it. Further, both the mediator and Mr Staindl warned Ms Finch that she risked losing the case. Mr Staindl warned that there was a danger that, even if Ms Finch succeeded at the hearing at VCAT, she would recover an award that was less than was offered that day. The mediator said she did not want Ms Finch to be out of pocket. [Presumably, this was a warning that if Ms Finch recovered less after a full hearing than she had been offered at mediation, she might be required to pay the Heat Group’s costs.] The mediator said that in Ms Finch’s position, she would have taken the $75,000 offer. Mr Staindl said that he did not believe that $16,000 was payable to Ms Finch for maternity leave. Ms Finch was firm that she was entitled to maternity leave. [The maternity leave was said to be owing in accordance with a policy adopted by the Heat Group, with payments for some three months where an employee returned to duties after the birth of her child.] Ms Finch asked, if she won her case, what would happen to her maternity leave payments. The mediator suggested, according to the note, “$118”. [Presumably this should read $118K or $115K.] She suggested a settlement which would entail – full release for all claims except WorkCover – non-disparagement – resignation – confidentiality. Mr Staindl raised a reservation of common law entitlements as well and suggested an offer of $115,000. At approximately 4.00pm, an offer of $115,000 in full and final settlement was made upon the conditions suggested by the mediator. The note records that counsel for the Heat Group said that she was hoping that Ms Finch would offer to settle for a smaller sum. According to the note, Mr Staindl told counsel for the Heat Group, it appears in an open mediation session, “She believes you owe her $16K maternity leave”. Another issue raised was whether the Heat Group would provide a statement of service to Ms Finch if the matter was settled on the suggested terms. The Heat Group retired to consider the offer (CB 651‒653).
104 At 4.35pm, Mr Price returned to the mediation and resumed his role as note taker. Ms Finch said, “Ruth did not think that $75K was reasonable”. [This seems to be a reference to Ruth Hamnett, the counsel retained by EMA Solicitors.] Mr Staindl said that her views, in the circumstances, were “unclear”. The mediator suggested she may be able to provide a precedent for terms of settlement. The mediator and Mr Staindl withdrew to discuss these matters and Mr Price records Ms Finch as saying, “I want to withdraw my offer”. Mr Price said that they should await the return of Mr Staindl and the mediator. Mr Price left the room to inform Mr Staindl of Ms Finch’s desire to withdraw. Shortly afterwards, the mediator returned, announcing that the offer had been accepted and that the Heat Group were drawing up terms. She said that they were unhappy and believed it was a bad deal. The mediator said that she thought it was a “very, very good result” [presumably from Ms Finch’s standpoint].
105 A draft Deed of Settlement was produced, which Mr Staindl commenced going through and explaining to Ms Finch. Ms Finch complained that she could not understand what was being provided for and that she would not sign. According to Mr Price, she complained of “Too much legalese. Too much pressure.” Ms Finch did not agree that these were her words, but she agreed that this was the substance of the concern that she expressed at this point. Mr Price’s note says “We advise may incur more costs”. Presumably, the reference to “we” is to himself and Mr Staindl, meaning that additional costs would be payable to Arnold Thomas & Becker and counsel if the matter went over on Friday evening to the following week. Ms Finch, however, wished to delay matters and have the opportunity to peruse the proposed terms of settlement. Ms Finch subscribed to a document called `Authority to Settle’, which was handwritten by Mr Price. This document set out the terms of the proposed settlement. According to Mr Price, to sign up clients on such a document was standard practice at Arnold Thomas & Becker. The authority included the statement:
“I understand that my solicitor/client costs are $30,000 inclusive of GST and unrecoverable disbursements. This will be deducted by my solicitors from the settlement sum.”
Counsel’s fees were to be in addition to this. The authority further noted the need to remit some $19,888.52 to EMA, Ms Finch’s former solicitors (CB 670-71).
106 When the mediation reconvened the following Monday, which was Cup Eve, Arnold Thomas & Becker was once again represented by Mr Price. There was initially an open mediation session, including representatives of both parties, at 10.30am. It was proposed that the statement of service provided for in the Deed of Release would set out the period for employment and describe the duties performed by Ms Finch during that time. The Heat Group declined to include any “achievements” in the statement of service. There was then a private conference with the client and her legal team where the proposed Deed of Release was reviewed. At 11.05am, Mrs Eleftheriou, who had resumed as Arnold Thomas & Becker’s representative in place of Mr Price, telephoned the principal of the firm, Mr Flanagan, noting that Ms Finch had expressed dissatisfaction with the Authority to Settle document, in particular the statement that it might have been possible to reach a higher amount of compensation had the matter gone to trial. She wanted to replace this with a statement that it was her belief that she would have obtained a higher level of compensation. Mrs Eleftheriou, in a discussion with Ms Finch’s husband, said that Arnold Thomas & Becker could not assure Ms Finch that she would have obtained a higher level of compensation had she gone to a full hearing.
107 At 12.25pm, with the form of Deed of Release still under discussion, Ms Finch complained that she had been pushed into settling and that her claim for make‑up pay was “part of common law”; that is, something which was not covered by the release. Mrs Eleftheriou and Mr Staindl advised her that that was not the case. Mrs Eleftheriou’s notes then record:
“Client wants to renege on the offer. She says she was not advised that this settlement included Federal Court matters.”
She was also unhappy with the provision in the deed for the release to extend to former officers of the Heat Group. She said that she wanted to sue Sarah Larchin for defamation and possibly another former officer. At 1.59pm, according to the note, Mr Staindl said the respondent would not agree to amendments and so the matter would have to proceed with no settlement on Wednesday (CB 690‒692).
108 Presumably, after a break for lunch, Mrs Eleftheriou’s notes record that at 2.12pm she and Mr Staindl conferred with Ms Kelly, the solicitor for the Heat Group, relative to amendments to the deed required by Ms Finch. Ms Kelly would get instructions. Almost an hour later, at 3.09pm, the note records that the Heat Group would not agree to deleting a release for former employees. According to the note, “The people who will be sued are young girls”. Apparently, there was also a proposal that the confidentiality undertaking be modified so that Ms Finch “can speak to her doctor re her condition”. At 3.30pm, there was discussion with Ms Finch relative to a number of drafting issues. It was proposed that if the Heat Group breached its obligations of confidentiality, Ms Finch would be at liberty to issue legal proceedings in a court of competent jurisdiction. The issue of a release for former employees remained a sticking point. Mrs Eleftheriou’s note says, “We were not aware the client was wanting to sue Sarah Larchin until today. A full release of all claims would cover issues related to employment (this is how a court will look at it).” Ms Finch’s husband said that “we [presumably Mrs Eleftheriou and Mr Staindl] should be on his side and push them on previous employees”. It seemed this would be a make or break issue. Ms Finch said she would not have settled if she had known that there was a proposal for the release of former employees. At 4.00pm, Mrs Eleftheriou departed and Arnold Thomas & Becker was represented by articled clerk, Ms Catherine Norman (CB 690‒694).
109 Ms Norman had not previously had any involvement with the Finch case. Her role was solely to take notes and provide any administrative support that the client and counsel may require. The handwritten notes are quite extensive. In addition, she dictated a file note which was reduced to typescript and dated 30 October 2009. This recorded an attendance on her part from 4.03pm to 7.20pm. The date of the file note, 30 October, therefore conveyed that she attended the mediation from 4.03pm to 7.20pm on 30 October. When Ms Norman gave evidence, she said that the date on the typed memorandum was an error. She supposed that she failed to amend the template date when she prepared this typed memorandum. Mr Price, who was in attendance on 30 October, said that Ms Norman was not there. Mrs Eleftheriou’s note records that she was relieved as Arnold Thomas & Becker’s representative on 2 November 2009 by Ms Norman. Hence, I conclude that the lengthy handwritten note prepared by Ms Norman, which appears at CB 659‒69, covered the period from 4.03pm to 7.15 or 7.20pm on 2 November. I am fortified in that view by the fact that the matters recorded in the note seem to flow logically on from the matters which Mrs Eleftheriou’s note described as having been discussed. Mr Staindl is recorded as asking Ms Finch, “Why would you need to tell your doctor about the terms of settlement?” She said she needed to disclose these matters to her treating psychiatrist, observing “I am very unhappy about everything in this case, I need to be able to talk to him.” Ms Finch is recorded as saying, “Whose side are you on, you’re running my claim, my personal injury claim. If this settlement was to end it all I would be asking for $500,000.” Mr Staindl had raised the problem of the psychiatrist disclosing what Ms Finch told him in a report. Ms Finch’s husband said, “If stuff comes out that’s their problem not ours; they should sue the doctor.” Ms Finch said that she knew the WorkCover system and “What they are asking me to do is illegal” [presumably the confidentiality clause]. She told Mr Staindl, “You need to tell them it’s illegal”. Ms Finch said she had to speak candidly to her doctor and it was contrary to the WorkCover law to preclude her from doing so. She asked the mediator “to speak to someone more senior. They are kicking me in the leg. I want to speak to someone to include the standard settlement terms.” The mediator showed her terms of settlement from another matter and Ms Finch replied that her case was not “run of the mill. I shouldn’t be punished. There has to be someone I can speak to.” Ms Finch continued her expostulations along these lines.
110 According to Ms Norman’s handwritten memorandum, at ten past five, the matter then under discussion was the need to modify any confidentiality undertaking to accommodate Ms Finch’s need to discuss her condition with her medical practitioner. Various details continued to be debated. Ms Finch’s husband was critical of the Heat Group and of the process. Ms Finch said that if matters were not resolved by 6.30pm, she would go home. It was not acceptable to have her children there since 9.30am. She and her husband had commitments and could not be expected to remain all night. She said that she and her husband would go to court ‒ “If David won’t represent us, we will get another barrister”. Ms Finch said that she wanted to go home; she would leave in five minutes; she was tired, stressed and could not “get her head around it”. Ms Finch then said that she could not sign any agreement that night because she had the shakes and could not concentrate. She asked that the form of agreement be emailed to her and said that a further $5,000 would be required to cover her legal fees, otherwise she would not settle. Ms Finch said further that she needed advice on defamation. Another $10,000 should be added to the settlement amount. The mediator agreed to raise this with the Heat Group and the other respondents if Ms Finch promised that acceptance would lead to a settlement. According to Ms Norman, Ms Finch said that “she [that is, Ms Finch] won’t regret going to court. She wants the satisfaction of reporting them [presumably the Heat Group and the other respondents] to DPP. They can stick it.” Mr Staindl said he was reluctant to put a proposal for a further $10,000 to the respondent. According to Ms Norman’s note, he said “I am locked in”. He told me that he believed he had “done a deal” with counsel for the respondent the previous Friday. Ms Finch said that she wanted an extra $10,000 plus one day of Mr Staindl’s fees and “she wants to check out defamation suit”. The mediator said that Ms Finch would have to return to the Tribunal on Wednesday either for a continuation of the mediation or for a commencement of the hearing. Ms Finch replied, “I’ve been told I should get $75,000 at VCAT by a few people. They will also have to pay $66,000, it will cost them $141,000 plus costs, then I can report them to 60 Minutes and the DPP.” The mediator said, “You are assuming you will win”. Ms Finch said it was not about money. She continued to press for the $10,000 and to lament the absence of expert defamation advice for her. She complained, “I am ganged up on by men. They want to intimidate me, it’s just disgusting.” Matters were then adjourned until the Wednesday; that is, the day after Cup Day. In the course of the debate through the late afternoon, Mr Finch’s husband is quoted as saying, presumably to Mr Staindl, “You talk as if you are from the other side, you are supposed to be helping and protecting us.”
111 At some time on the Monday, Mr Staindl placed a short memorandum at the foot of the document styled “Authority to Settle”, which had been written out by Mr Price and signed by Ms Finch the previous Friday. The memorandum of a couple of sentences included an acknowledgement from him that he had advised Ms Finch that, in his view, “she was unlikely to be successful in this matter and if she were successful damages were difficult to estimate but could be in the vicinity of $40,000”.
112 Following the Cup Day holiday, Mrs Eleftheriou made a telephone call to Ms Finch, according to her notes, at ten past nine (CB 732-37). Ms Finch said she would not sign the release and “Today will be a waste of time”. Mrs Eleftheriou said, whether the deed was signed or not, Ms Finch needed to attend because it would be necessary to appear before Deputy President McKenzie. Mrs Eleftheriou reiterated her advice that $115,000 was a good settlement. According to Mrs Eleftheriou’s note, Ms Finch said she “had defamation cases and perjury cases, she would succeed”. Mrs Eleftheriou said that the advice tendered to her was reasonable and many of the clauses, including a clause in the Draft Release which would have required her to repay the settlement sum in the event that she breached the terms of the deed, had been removed. Ms Finch replied that she wanted to recover economic loss. Mrs Eleftheriou’s note says, “I say that if her instructions do not follow our advice then we will withdraw. Refer to her CA [Costs Agreement] not following reasonable advice.” Ms Finch did not agree. At 10.11am, Mrs Eleftheriou met her opponent, Ms Kelly, from Minter Ellison and Ms Siemensma, counsel for the respondent. The latter said that her clients were frustrated, but in a strong position. She referred to “adverse findings of fact in other courts” [whatever that might mean] and continued “The co [that is, the Heat Group] will go full ball [presumably, full bore] ‒ public relations. No more money.” She said that the respondents feel they have given up so much. Ms Finch can make her claims under WorkCover. She would nevertheless consider amendments to some clauses. Mr Staindl made a telephone call to Mr Lee Flanagan, the principal of Arnold Thomas & Becker and, according to the note, gave him a “rundown”.
113 At 10.40am, Mr Staindl and Ms Eleftheriou met Ms Finch and her husband. He said the sticking point would be extending the release to former employees. Mr Staindl said that, in his view, he had settled the matter on Friday for a full release of all claims, except for WorkCover and common law. Ms Finch said that she had serious issues with the adequacy of $115,000 in that it did not provide for her economic loss. Mr Staindl said that she did not have past economic loss. She said she was always quoted at $75,000, “but she says that it does not include maternity leave payments, make-up pay and Federal Court matters”. She said that she spoke to a lawyer ages ago who told her that $125,000 was not enough. She said that if the Heat Group wanted her to resign, they should include maternity leave payment. Ms Finch denied that she would lose the case or that she would not receive economic loss. She said that she was pregnant when she was harassed. She then said that Mr Staindl was “not accurate in his advice. She was bullied under duress with the $115,000 and given incorrect legal advice.” She concluded that it would be a joke to accept $115,000. The note said, “Client has 26 issues written down”. The evidence was unclear as to whether the issues written down were held by her or by her husband. Ms Finch said that if that document still existed, she was unable to find it. According to Ms Eleftheriou and Mr Staindl, Ms Finch said that she “did not have confidence in her legal team”. Ms Finch denies having said that. Mr Staindl said, in that event, he would not act further. He felt the matter had been settled, subject only to the sticking point as to whether a release was to be granted to former employees. Ms Finch’s husband said that Mr Staindl had never been briefed with respect to any Federal Court matters. Mr Staindl said he had a lot of experience within the Federal Court. He agreed that there was a possible claim for breach of contract and breach of award, “but in his view there would be little $ from those causes of action”. Ms Finch complained that she was bullied and harassed. She referred to a decision in the matter of Pointowski’s case. She continued, “Particularly being a pregnant woman”, she believed she had been “under-estimated” with the $115,000 settlement amount. Mr Staindl then informed Ms Finch that he would advise the respondents’ representatives that he was no longer acting. At 11.12am, according to the note, he advised Ms Siemensma and Ms Kelly that he had been “sacked”.
114 When the mediator arrived, she advised Ms Finch that, “there is a lot to lose”. The mediator said, “if it goes to hearing, it will not be successful and might affect her [Ms Finch’s] WorkCover claim”. The matter then resumed before Deputy President McKenzie. Mr Staindl announced that his instructions had been withdrawn and that this applied to his instructing solicitor. He said that he spoke now only as a courtesy to the Tribunal, noting that Ms Finch would want the matter adjourned to obtain new legal practitioners. Ms Finch then spoke on her own behalf. She noted that Mr Staindl and Mrs Eleftheriou remained at the back of the hearing room. She felt that they did so to observe and take satisfaction in her discomfiture. They denied this. She said that a new legal adviser, Mr Jacka, had sent a facsimile to the Tribunal advising that he would act. The Deputy President noted the costs implications. Ms Siemensma, for the Heat Group and the other respondents, complained about three changes of legal practitioners in the course of the proceedings, endemic delays and the effect on the four individual respondents. She complained about the costs thrown away. She opposed the adjournment. Ms Finch replied that the situation was no fault of hers. Mr Staindl was not properly briefed.
Final disposition at VCAT
115 Ms Finch eventually appointed Holding Redlich to act for her. That firm acted on a fee paying basis and it briefed Ms A. Duffy of counsel. The proceeding went to trial before Vice President Judge Harbison over 20 days in May and one day in June. Her Honour handed down her determination on 29 June, dismissing Ms Finch’s complaints in toto. The issue of costs was then heard by her Honour on 31 January 2011. She ordered that Ms Finch pay two-thirds of the respondents’ taxed costs with the taxation to be carried out on County Court Scale D. Ms Finch said that the quantum of those costs was ultimately agreed without her consent by yet another legal practitioner who was acting for her at the time in the sum of $180,000 approximately. Attempted appeals against the substantive determination and the costs ruling to the Court of Appeal and the High Court of Australia were unsuccessful.
116 Ms Finch made complaints to the Legal Services Commission against both Mr Staindl and Arnold Thomas & Becker. No disciplinary action against the practitioners seems to have been taken upon either complaint.
Billing
117 On 5 November 2009 – that is, the day after the abortive mediation terminated and Ms Finch and her legal counsel and solicitors parted company – Ms Finch sent an email to Mr Flanagan, as principal of Arnold Thomas & Becker. After an opening greeting, the email stated (CB 753ff):
“Anastasia Floros [as Mrs Eleftheriou then was] was representing me in my case at VCAT and that relationship with your firm ended yesterday.”
Ms Finch said that Mrs Eleftheriou “seemed to be a nice person and I [that is, Ms Finch] do not wish her any harm, …”
She also said:
“As a client I would never dispute fees unless necessary, but after you read the attachments, I am sure you will appreciate my reason for requesting the review of them.”
Ms Finch made this comment on the basis of an estimate of $30,000 which she had been given by Ms Floros. Ms Finch commented, “This seems very high due to the work that she actually undertook for me …” There followed some 32 items under the heading “Lawyer issues”. In using the word “lawyer”, I take Ms Finch to be directing her comments to the performance of Mrs Eleftheriou and her colleagues from Arnold Thomas & Becker, rather than to the performance of counsel. The list included some 32 items and, in the concluding paragraph after the end of the list, Ms Finch said, “Thank goodness I did not sign and settle with the other side, even though Anastasia and the barrister were pushing me to do so”. Arnold Thomas & Becker wrote to Ms Finch in a letter dated 6 November 2009 (CB 765-8) which was certainly sent by email and, according to Arnold Thomas & Becker, also sent by ordinary post. The letter included the statement:
“We confirm that on 4 November 2009 you disengaged the services of Mr David Staindl of counsel. We confirm that you also engaged alternative lawyers on that day to represent you. We advise that pursuant to our Conditional Costs Agreement signed by you on 27 August 2008 we now render our account.”
The professional costs were fixed in the sum of $45,000 and disbursements, including counsel’s fees and various other matters, led to a total bill of $62,910.
The letter concluded:
“However, if the account is paid within 28 days, we will accept the sum of $22,500 for professional costs, plus the disbursements”.
(CB 765‒70)
The $45,000 was said to be inclusive of goods and services tax in the sum of $40,090. Ms Finch responded in an email dated 6 November 2009 in which she stated:
“Hi Anastasia,
Thank you. I would however like to be issued with the following immediately:
1.Invoices from David Staindl.
2.Invoices from Peter Harris.
3.Running sheets of your hours spent on my case (details of time spent and what on).”
(CB 771)
118 On 8 November, Ms Finch sent an email to Mr Flanagan marked “Urgent”. She repeated the request which she had made in her email of 6 November to Mrs Eleftheriou, although this time the “running sheets” were at the head of the request and Mr Staindl’s fees were the last of the three things for which invoices were sought. Ms Finch said that she was “shocked” to see the figure of $45,000. Under the heading “Disengaging barrister” she said:
“I would like to confirm as you noted in paragraph 4 of your letter, that yes I did disengage the services of David Staindl, this was based on the issues contained in my list to you, which I hereby attach again. Mr Staindl continually incorrectly quoted employment laws and my entitlements under the law, which were proved to be incorrect by myself and the VCAT mediator. He was also not fully briefed on my case by your firm about Federal Court action available to me and therefore could not comment on what an acceptable settlement amount should be, which included the settling of all matters. Mr Staindl also belittled my case numerous times, even at one point saying I would not win. In my opinion this was to push me to settle, rather than take my interests (emotionally and financially) into account. I continually felt as if he was on the other side’s team and not mine. I also felt it extremely inappropriate and it also contradicted advice other Barristers (including Mr Peter Harris that your firm hired) that I have previously spoken with, that said my case is extremely strong and I would win.”
She proceeded to raise a large number of criticisms of the performance of Arnold Thomas & Becker, including criticism of the circumstances in which she had been left without trial counsel until just before the hearing and had not been told that Mr Peter Harris had returned his brief over a month before the scheduled trial date. She said:
“I now have to find a new legal team very urgently through no fault of my own. I am due back in court again and my new lawyer needs my file to prepare and hire a new legal team. I do understand why some law firms may hold on to the file, however I think it is clear what type of character I am (giving a cheque for $18,000 to your firm) and that I am trying to sort this out fairly. The refusal to release my file because I am legitimately and fairly questioning some fees, I feel is unnecessary and unjust in those circumstances, particularly as you have $18,000 of mine, which was for the payment of a barrister if it goes to trial, so you already had this money.”
Earlier in the letter under the heading “Cease to Act”, having criticised the quality of Mr Staindl’s advice, she said:
“I therefore could not trust Mr Staindl’s advice so I addressed my concerns with him. I advised Mr Staindl that due to that being the case, I did not feel confident continuing discussions regarding a settlement until I had sought more accurate legal advice. At that point Anastasia said your firm would therefore cease to act for me. It is true that I hired another lawyer later that day as I had spoken to a family friend of ours who is lawyer, however I did not hire him until Anastasia had said that your firm was ceasing to act for me because I did not take the settlement offer, hence Mr Staindl’s advice.”
(CB 772‒76)
In the attached lawyer issues (CB 777-81), which had now expanded to some 36 paragraphs, she said in the 36th paragraph:
“I now have to appoint a new legal team which is also a very costly exercise to me …”
Arnold Thomas & Becker responded in a letter dated 13 November 2009, which was said to have been dispatched by email and ordinary post. Mr Flanagan, who was called as a witness by Ms Finch, told me that this document was drawn by Mrs Eleftheriou and settled by him. He agreed that “his fingerprints” were on the letter. It rejected a number of the claims made by Ms Finch. At paragraph 10, it said:
“In relation to the allegation that we have somehow prejudiced your claim by requiring you to appear, we do not believe this to be the case. It is regrettable that our relationship ended this way, however our Cost (sic) Agreement requires you to accept reasonable advice from our office and we do not believe you did so.”
Toward the end of the letter, it stated:
“In light of the above, we believe that our bill in the sum of $45,000 plus disbursements is reasonable. We reiterate that if we provide you with an itemised bill to go to taxation, we will not be bound by our discounted account of $22,500 plus disbursements. We further confirm that the itemised bill will be drawn by an external cost consultant.” (CB 783‒86)
119 Arnold Thomas & Becker have continued to assert a lien over Ms Finch’s file, which they have not released to her because the costs which they rendered remain unpaid. Mrs Eleftheriou, however, was agreeable to the return of a number of respondents’ statements which Ms Finch had annotated for the purposes of instructing counsel. These were collected by her husband from the offices of Arnold Thomas & Becker.
120 Ms Finch’s complaint against Arnold Thomas & Becker was lodged with the Legal Services Commissioner on 6 January 2010. In the panel inquiring after the complainant’s hopes and expectations, she wrote “reduction in legal fees, so I am billed fairly”. In a further email in support of the complaint, dated 27 January 2010, she referred in that email to a complaint of a lawyer “ceasing to act for me immediately before a court session, leaving me without legal representation for that matter” (CB 802‒11). In letters to Arnold Thomas & Becker and Mr Staindl dated 2 February 2010 and 1 February 2010, the Legal Services Commissioner noted receipt of complaints from Ms Finch, including a complaint in both cases that the practitioners “ceased acting for the complainant immediately prior to a court session, leaving her without legal representation” (CB 812‒16). In the course of a lengthy response emailed to the Commissioner on 10 February 2010, Mr Staindl said, amongst other things, that on 4 November – that is, the third day of the mediation:
“Following some further discussions, the client [viz Ms Finch] then said that she had no confidence in myself or her legal team and that she had 26 issues set out in [a list]. (The client’s husband had two or three sheets of paper in front of him, but I was not given a copy of it at the time. In light of the client saying that she had no confidence in me I stated that I thought I should not continue to act. The client agreed with this and I said I would tell Counsel for the respondents that I could no longer continue to act, and I did so.” (CB 822‒29 at 825‒26)
In response to the complaint about leaving Ms Finch immediately prior to a court session unrepresented, the response from Arnold Thomas & Becker said:
“On 4 November 2009 at 10.40am Ms Finch expressed dissatisfaction with her ‘legal team’ in a conference with Mr David Staindl and instructor. Ms Finch instructed that she was not willing to accept the offer made by the Respondent and advised that she had already spoken with another lawyer in respect to her case. Ms Finch terminated the services of Mr Staindl and given her dissatisfaction with her ‘legal team’ then it appeared that she was also terminating the services of Arnold Thomas & Becker.” (CB 830)
In the course of the trial, Ms Finch produced a copy of a draft of the Arnold Thomas & Becker response with alterations marked by Mr Staindl. It is reasonable to suppose, therefore, that Mr Staindl and Arnold Thomas & Becker coordinated their responses to Ms Finch’s complaints.
This proceeding
Claim
121 On 23 February 2011, Arnold Thomas & Becker filed a complaint in the Magistrates’ Court seeking to recover $72,049.97. This represented a claim for the amount in the Memorandum of Costs for costs and disbursements of $62,910 and interest. The statement of claim alleged that these monies were owing under a Costs Agreement between Arnold Thomas & Becker and Ms Finch made on 27 August 2008.
Defence
122 Ms Finch, in her Notice of Defence filed in the Magistrates’ Court, agreed that there was an agreement between her and Arnold Thomas & Becker, but said there were terms of that agreement that Arnold Thomas & Becker would only engage barristers on a no win/no fee basis and would only charge her scale costs with an uplift of 20 per cent if there was a successful outcome. Further, she said that if the retainer were terminated by either party, no uplift fee would be payable. She then referred to a legislative amendment in 2007 —
“whereby a law firm cannot charge a penalty/uplift fee unless a case is successful and also not in claims for damages, and therefore the Penalty Interest Act no longer applies; and
an itemised bill of costs would be given on request made within 30 days after receipt of a lump sum bill of costs.”
123 She referred to paragraph 9 of the Conditional Costs Agreement. Next, she said that Arnold Thomas & Becker terminated the retainer “in circumstances where it was not entitled to do so by reason of or pursuant to the terms of the Disclosure Statement and Conditional Costs Agreement”. She said that by reason of paragraph 10 of the Conditional Costs Agreement, Arnold Thomas & Becker was disentitled to any uplift fee and was entitled to payment of legal costs only in the event of a successful outcome, as contemplated in paragraph 4. She said that the outcome of her Tribunal proceeding, for which Arnold Thomas & Becker had been retained, was not successful.
124 Therefore, she said that Arnold Thomas & Becker was in breach of their obligations to her in engaging counsel, who charged for their work despite the outcome of the proceeding being unsuccessful. She said Arnold Thomas & Becker charged her costs, to which there was no entitlement. She said that Arnold Thomas & Becker demanded that she pay $18,000 and failed to account for those $18,000. She said that she had requested an itemised bill, but none had been given to her, as required by the Legal Practice Act 1996. [In her submissions at trial, Ms Finch referred to the Legal Profession Act 2004 and its corresponding provisions.] Next, she said:
“The plaintiff advised the defendant she would have to pay double the amount if she were to be given an itemised bill in breach of section 108(3) of the Legal Practice Act 1996.”
Again, in submissions at trial, Ms Finch referred to the corresponding provision in the 2004 Act. As a result of the failure to provide an itemised bill, she said that Arnold Thomas & Becker was prohibited from commencing legal proceedings and the claim against her for them was not maintainable and was incompetent. She referred to a counterclaim which she was filing and repeated, as matters of defence and set-off, the matters in her counterclaim. The defence was dated 13 September 2013.
Counterclaim
125 The counterclaim was subject to extensive revision and reached its final form on 17 September 2014.
126 Ms Finch first alleged her retainer of Arnold Thomas & Becker, which she said was partly oral, partly in writing and partly to be implied. As to the terms of the retainer, she said first, that Arnold Thomas & Becker would provide services for her benefit in the VCAT proceeding “until the conclusion of the proceeding unless the retainer was terminated for ‘good cause’ prior to the conclusion of the proceeding”. She referred to clause 10 of the Conditional Costs Agreement. Next, she said that there was a term that she was liable for legal costs only if there was a successful outcome, as defined in the Conditional Costs Agreement. She referred to clause 4 of the Agreement and clause 1 of the Disclosure Statement. The next term alleged was that counsel would be retained on a no win/no fee basis and clause 10 of the Disclosure Statement was referred to. Next, it was said that Arnold Thomas & Becker agreed it would only terminate the agreement for “good cause” before there was an outcome. Reference was made to clause 10 of the Conditional Costs Agreement, but Arnold Thomas & Becker could terminate the retainer if the client did not accept “reasonable advice”. Again, reference was made to clause 10 of the Conditional Costs Agreement. It was said that Arnold Thomas & Becker was contractually obliged to exercise reasonable skill, care and diligence in carrying out the terms of the retainer, which obligation was said to be “an ordinary incident of the solicitor/client relationship between the parties”.
“… were distributed to her fellow employees nationally, including to that of her own team, and also to the general public and within the cosmetic industry, in which she is trained, resulting in further harm to the applicant, including injury and now ensuring in the very least, if and when the applicant recovers from her injury, she is certainly now unemployable in future, and the damage to her reputation was foreseeable.”
177 All but one of those reprimands or warnings was administered after the commencement of the Defamation Act 2005 on 1 January 2006. That statute introduced a new short limitation period for defamation claims which, by virtue of s5(1AAA) of the Limitation of Actions Act, must be brought within one year from the date of publication of the matter complained of. That one year period had already elapsed at the time that the Deed of Release was under consideration at the mediation in October/November 2009. Ms Finch submitted there was an argument, which had been explained to her by an unnamed member of counsel, as to how the operation of this limitation period could be avoided. She was, however, unable to enunciate it. The first of the warnings or reprimands was administered, according to the document, on 26 September 2005. The limitation period at that point was six years and so it would have remained possible in November 2009 to commence a proceeding relevant to it without encountering a defence under the Limitation of Actions Act. Nevertheless, these matters would seem to be the subject of qualified privilege at common law, so in Hunt v Great Northern Railway [1891] 2 QB 189, an employee of the railway company was dismissed for alleged gross misconduct of duty and his name was published in a monthly circular to the other employees. This communication was said to be the subject of qualified privilege because of the common interest of the employer and the employees in the proper running of the enterprise. Accordingly, even if a defence of justification were not successful, a defence of qualified privilege would be unless Ms Finch established malice. Malice is only made out if it can be shown that the defendant acted for an improper motive – Gatley on Libel and Slander 12th Ed, paragraph 17.4, page 735; Roberts v Bass (2002) 212 CLR 1. These matters are very difficult to make out. The statutory defence of qualified privilege under section 30 of the Defamation act 2005 would also be available for all the alleged defamations made after 1 January 2006.
178 I should also observe that the issue of defamation was raised by Ms Finch for the first time on 2 November; that is, the Monday after, in Mr Staindl’s view, the proceeding had settled in principle for $115,000 all in. She said that she should be regarded as having raised defamation with her legal advisers by handing them copies of the respondents’ witness statements with annotations on them, raising the issue of defamation. She tendered as an exhibit a statement on behalf of the Heat Group in the VCAT proceeding by Ms Larchin, but ultimately conceded that the word “defamation” was nowhere to be found in it. She said that she would tender another one of these annotated statements of Scotti, but in the manner in which the trial concluded, she did not get around to doing it. At any rate, even if the Scotti statement had the word “defamation” on it, I do not believe that this would be sufficient to bring home to Arnold Thomas & Becker, or to Mr Staindl, that they should be concerned to maintain causes of action which Ms Finch might believe she had in defamation.
179 For the reasons given, however, I am not persuaded that the assessment of the situation by Arnold Thomas & Becker and Mr Staindl attached no value to any claims for defamation was other than reasonable and realistic.
180 Next, Ms Finch made complaint that proper allowance was not made for the costs which she had incurred. The Authority to Settle, which Mr Price prepared on the Friday evening and had Ms Finch sign, dealt with the issue of costs for Arnold Thomas & Becker and also the issue of costs for EMA, at least as to the amount that EMA asked be deducted from the proceeds of any recovery or settlement to cover its outstanding costs, an amount just under $20,000. Ms Finch alleged that there was a further $10,000 which she had paid. She produced certain invoices, but no evidence of payment. On the present state of evidence, I could not find that there was any amount of cost paid or payable to EMA beyond what was allowed for in the Authority to Settle. Even if there were, since in the circumstances and by virtue of s109 of the Victorian Civil and Administrative Tribunal Act 1998, Ms Finch, even if victorious, could not expect any award of costs in her favour. The issue of legal costs already incurred was not something which bore upon the reasonableness of the settlement offer and therefore the reasonableness of the advice to accept it.
181 By 2012, Ms Finch had recovered $13,598.64 by way of annual leave and severance pay, the second instalment being obtained following a complaint to the Fair Work Australia ombudsman. She also said that some $35,400 should have been allowed for as “make-up pay”; that is, an amount paid to top up the 70 per cent loss of earnings benefits under the WorkCover scheme to the value of 100 per cent of the worker’s pre-accident earnings. It will be recalled that Mr Staindl advised her that he did not believe that she qualified for make-up pay because she was not covered by an award and, further, that, even if she were covered by an award as “commercial traveller”, the make-up pay would only have been for three or six months and therefore a relatively small amount. I obtained production of the relevant award in the course of the hearing and clause 35 provided for make-up pay for some nine months. According to my calculation, the amount payable, calculated by reference to 30 per cent of an annual salary of $57,500, yields a figure of $12,937.50. In any event, the December 2008 settlement offer from Ms Finch assumed that 77 weeks of make-up pay were included in the $115,000 settlement figure (CB 540).Ms Finch claimed an entitlement to maternity leave payments in the sum of $12,000, based upon a maternity leave policy adopted by the Heat Group. Judge Harbison held that the failure to pay that amount to Ms Finch did not, in the circumstances, amount to unlawful discrimination. The result might not be the same on a proceeding based on breach of contract. Nevertheless, the fact that the maternity leave was said to derive from a policy, rather than an express term of Ms Finch’s employment contract, and the adverse finding by Judge Harbison, means that the recovery of the $12,000 in 2009 or after was problematic. Moreover, the $12,000 maternity leave was said to be part of the $115,000 all-in offer to settle made on behalf of Ms Finch in 2008 [CB 540]
182 Other figures for car allowances, which in various places are differently calculated, and for many other alleged employment benefits, are hard to follow.
183 I have already commented upon the uncertain status of the Federal Court proceedings. Ms Finch said that her claim had been worked on by two members of counsel, whom she named. The Further Amended Statement of Claim, however, is not signed by counsel. She said that she herself had made certain amendments to counsel’s draft. Whilst some parts of the pleading bespeak the involvement of counsel, other parts seem to come from another hand. For instance, paragraph 65 states, inter alia:
“On 21 November 2006, after becoming knowledgeable that the false allegations made against her via reprimands and warnings, including that she had caused a staff member mental distress, as pleaded in paragraph 17d, were travelling around Australia and now being discussed and spread through Western Australia and the applicant whilst pregnant, with the knowledge of, and documentary evidence in support of, the allegations were unfounded and false, exercised her workplace right within the meaning of the Act and the Contract of Employment, and raised a grievance with the sixth respondent as he had been nominated as the person she should speak with, and alerted him to the serious situation, whereby she was being unjustly publicly humiliated and her personal and professional reputation smeared and besmirched.”
This pleading seeks relief into the millions of dollars; but the particulars of complaint at VCAT sought an award of $500,000 and no compensation at all was awarded. If the various claims in the Federal Court, additional to the defamation, were credible and substantial, they would have been pressed home before now. Ms Finch’s reluctance to disclose the standing of her Federal Court proceeding makes me suspicious of it. Success in the Federal Court would require at the very least that Ms Finch would establish there what she failed to establish at VCAT or in this proceeding, viz that her evidence was reliable. All in all, I cannot conclude that it is more than “pie in the sky”. Accordingly, in the circumstances, I conclude that the advice given by Mr Staindl and Arnold Thomas & Becker was reasonable. The advice given by Arnold Thomas & Becker and Mr Staindl was in line with the advice given by previous barristers and solicitors, both as to general range of settlement amount and as to the need in the circumstances for Ms Finch to concede a general release.
184 Having dealt with these important general questions in the proceeding, I now turn to specific alleged causes of action.
Issues relative to the claim
185 Ms Finch’s defences to the claim fall into two parts: first, there are technical defences under the Legal Profession Act 2004: and, secondly, she relied upon the matters in her counterclaim. I will deal with the counterclaim issues below.
186 The primary elements of the plaintiff’s claim were proven; viz , its incorporation, the rendering of the bill; the performance of the services et cetera. A costs consultant, Ms Austin, gave evidence to the effect that in her opinion a conservative costing of Arnold Thomas & Becker’s work would yield a figure higher than the $45,000 which was actually rendered. Ms Finch asked some questions in cross-examination but, not being a costs consultant herself, was unable to raise any significant objections to the accuracy of Ms Austin’s evidence.
187 This, therefore, takes us to the Legal Profession Act 2004. Section 3.4.19 of the Act provides for the recovery of remuneration by practitioners either in the costs agreement, a practitioner remuneration order or scale of costs or on a quantum meruit basis. Section 3.4.34 provides for bills of costs to be either itemised or “lump sum”. In the present instance, the bill was in lump sum form. Ms Austin, as part of her evidence, earlier this year prepared an itemised bill which she said would be fit for assessment by the Costs Court. This was done solely as a piece of evidence for the trial but was never provided to Ms Finch as part of the ordinary billing process.
188 Sub-section (4) of the Section provides for service of bills and there is no doubt that Ms Finch received the bill; she raised queries and objections to it in writing. Section 3.4.35(1) provides:
“(1) A bill must include or be accompanied by a written statement setting out—
(a) the following avenues that are open to the client in the event of a dispute in relation to legal costs -
(i) costs review under Division 7;
(ii) the setting aside of a costs agreement under section 3.4.32;
(iii) making a comlaint under Chapter 4; and
(b) any time limits that apply to the taking of any action referred to in paragraph (a).”
Subsection (3) provides:
“(3) A law practice is taken to have complied with the requirement to provide the written statement referred to in subsection (1) if it provides a written statement in or to the effect of a form prescribed by the regulations for the purposes of this subsection.”
Section 3.4.36 provides inter alia:
“(1)If a bill is given by a law practice in the form of a lump sum bill, any person who is entitled to apply for a review of the legal costs to which the bill relates may, within 30 days after the day the bill is given, request the law practice to give the person an itemised bill.
(2)The law practice must comply with the request within 21 days after the date on which the request was made.
…
(4)If a person makes a request for an itemised bill in accordance with this section, the law practice must not commence legal proceedings to recover the legal costs from the person until at least 35 days after complying with the request.
Note
Section 4.3.2 prohibits a law practice from commencing proceedings if it has received notice of a civil complaint regarding the legal costs.
(5)A law practice is not entitled to charge a person other than a non-associated third party payer for the preparation of an itemised bill requested under this section.
…”
189 Ms Finch says that she twice requested an itemised bill and was never provided with it. She also says that it has not been proven that she received the notice required by s3.4.35, which is, in shorthand terms, described as the “dispute notice”.
190 I turn first to the issue of the itemised bill. In opening, Mr Harrison conceded that if it is proven that being required to provide an itemised bill, Arnold Thomas & Becker did not, that matter in itself was a complete answer to its claim against Ms Finch. At least half of that defence is undisputed. No itemised bill was provided before these proceedings were commenced. The two requests which Ms Finch made, which she says should be treated as requests for an itemised bill, both referred to “invoices” for two members of counsel and “running sheets of your professional fees”. Mr Harrison submitted that this request did not amount to an itemised bill because such would:
“… contain all disbursements incurred, not just barristers’ fees. It will not show all hours spent on a case, nor details of time spent nor what on. What an itemised bill will show is what allowable scale item was done, what scale allowance was made for it.”
191 In my view, that is an over-technical approach to a statute which is intended to be in these provisions a consumer protection measure. To take so technical a view would not advance that objective of consumer protection. Further, I do not believe that the reference to “running sheets” of professional fees is so limiting as to apply only to a regime of time costing. In my view, the phrase “running sheet” is being used in a wide generic sense calling for specific identification of all tasks undertaken. The form of the two requests is adequate to be regarded as a request for an itemised bill. Arnold Thomas & Becker’s response to Ms Finch’s letter clearly treated her as having asked for an itemed bill, stating:
“We reiterate that if we provide you with an itemised bill to go to taxation, we will not be bound by our discounted amount of $22,500 plus disbursements. We further confirm that the itemised bill will be drawn by an external costs consultant.”
192 Mr Harrison next submitted that the decision of Hargrave J in Moussageas v Victorian Compensation Lawyers [2012] VSC 330 was right on point. He referred to paragraph [18] of his Honour’s judgment which states as follows:
“[18] A solicitor who wishes to give a client the opportunity of considering whether to maintain a request for an itemised bill should, in my opinion, correspond with the client pointing out the possible ramifications; and seek written instructions from the client as to how he or she wishes to proceed.”
193 Implicitly he submitted that, what Arnold Thomas & Becker had done, was simply to comply with what his Honour said was the proper procedure. I do not agree. First, there is nothing in the relevant paragraph which would suggest that the 21 days within which an itemised bill must be provided does not run during the course of the correspondence which his Honour says a solicitor might properly direct to a client seeking an itemised bill. Secondly, his Honour’s statement must be seen in context. His Honour was asked to grant an extension on a time limit of one year to bring a costs dispute before the Costs Court.
194 As in the matter before me, the solicitor had provided no itemised bill. When the client requested the itemised bill, he was presented with a document styled “Authority” to sign, whereby he agreed that he would:
“…pay any difference in fees between the amount agreed with my solicitors … and any greater amount assessed by the itemisation of my solicitor/client account at my request.”
195 His Honour at [15] judged that the course adopted by the solicitor was inappropriate. The procedure that he suggested at paragraph [18] was, in his view, an alternative. He did not suggest that it was a process which a solicitor responding to a request for an itemised bill could not properly omit.
196 The final point urged by Mr Harrison was highly technical. He took me to the provisions in clause 3.4.34(4) of the Act as to the mode of rendering a bill.
(4)A bill is to be given to a person—
(a) by delivering it personally to the person or to an agent of the person; or
(b) by sending it by post to the person or agent at—
(i)the usual or last known business or residential address of the person or agent; or
(ii)an address nominated for the purpose by the person or agent; or
(c) by leaving it for the person or agent at—
(i)the usual or last known business or residential address of the person or agent; or
(ii)an address nominated for the purpose by the person or agent—
with a person on the premises who is apparently at least 16 years old and apparently employed or residing there.”
197 Next, he took me to s7.2.4 as to when service was effective, which provides:
“For the purposes of this Act, a notice or other document must be taken to have been served on, or given to, a person or law practice—
(a)in the case of delivery in person, at the time the document is delivered;
(b)in the case of posting, 2 business days after the day on which the document was posted.”
198 He said in the circumstances the request, if it be a request for an itemised bill, on 8 November was premature. Again, I believe this is a highly technical argument which, if accepted, would make a mockery of this statute as a consumer protection measure, which was a matter which Justice Hargrave took into account in Moussageas’s case in the exercise of his discretion. Moreover, as Mr Harrison himself conceded, there is ample authority in the law as to service of documents that persons can be regarded as served with a document where it has come to that person’s notice even in a manner inconsistent with the technical requirements as to service.
199 The failure to provide an itemised bill means that the plaintiff’s claim must fail. In the circumstances it is unnecessary for me to deal with Ms Finch’s other asserted defences under the Legal Profession Act 2004.
Counterclaim matters
Ceasing to act
200 The first cause of action asserted in Ms Finch’s counterclaim was that Arnold Thomas & Becker wrongfully ceased to act for her contrary to the terms of her retainer.
201 In light of the findings that I have already made:
(a)that Ms Finch discharged counsel and the solicitors; and
(b)that in any event, Ms Finch had received reasonable advice which she failed to follow
the termination of the solicitor’s retainer by whomever was not wrongful and not a breach of contract. This cause of action must therefore fail.
Rendering of a bill
202 Paragraph 10 of the Conditional Costs Agreement permits Arnold Thomas & Becker to render a bill either if Ms Finch terminated their retainer or they terminated the retainer for good cause. The findings that I have made about Ms Finch’s termination of retainer and her failure to accept Arnold Thomas & Becker’s reasonable advice means that both limbs of this entitlement to depart from the “no win/no fee” regime are engaged and so the second cause of action must also fail.
Retainer of Counsel on an “up front” fee basis
203 The next breach of retainer alleged was the engagement of Mr Staindl on terms that his fees must be paid.
204 First, it is clear that on the evidence Ms Finch agreed to this course and sought the means of putting Arnold Thomas & Becker in funds to brief counsel with alacrity. She said that her actions on this occasion ought not be regarded as a voluntary variation because she was faced with the alternative of going to final hearing without counsel and losing her case by default. Mr Harrison submitted that the reference to engaging counsel on a “no win/no fee” basis was to be found in the Disclosure Statement, not in the Conditional Costs Agreement. The Conditional Costs Agreement contained a general obligation in clause 6 for Ms Finch to pay disbursements. He said that the statement as to briefing counsel was merely a statement of Arnold Thomas & Becker’s preferred practice rather than a promise. In any event, he submitted, if the statement were to be regarded as promissory, then in the circumstances, Arnold Thomas & Becker should be regarded as obliged only to use reasonable endeavours to engage counsel on a “no win/no fee” basis or if they were able to persuade a barrister to act on that basis. Such a term of the retainer was alleged in paragraph 5A of the plaintiff’s reply and defence to counterclaim.
205 The classic exposition of the requirements for the implication as a matter of law in a written contract is to be found in the opinion of the majority of their Lordships of the Judicial Committee of the Privy Council in BP Refinery (Westernport) v Hastings Shire Council (1977) 52 ALJR 20, 24 Column 2, where Lord Simon of Glaisdale on behalf of himself, Viscount Dilhorne and Lord Keith of Kinkel, said that in their Lordships’ view:
“For a term to be implied, the following conditions (which may overlap) must be satisfied:
(1)it must be reasonable and equitable;
(2)it must be necessary to business efficacy to the contract, so that no term will be implied if the contract is effective without it;
(3)it must be so obvious that it ‘goes without saying’;
(4)it must be capable of clear expression; and
(5)it must not contradict any express term of the contract.”
206 In my view, those requirements are made out for the implication of a term of the second type alleged by the plaintiff. The implied term is necessary to cope with the impasse which occurred in the present case where no counsel could be found experienced in the relevant field willing to take the brief on a “no win/no fee” basis. The evidence of the attempts to retain counsel on a “no win/no fee” basis demonstrates to my mind that the attempts made were exhaustive.
207 It is so obvious as to go without saying that what was ultimately done; namely, to engage counsel on an “up-front fee” basis had to be resorted to in the circumstances in which Arnold Thomas & Becker and Ms Finch found themselves in late October 2009. The only concern as to the application of their Lordships’ formulation is the thought that the term might be regarded as inconsistent with an express term of the contract. In my view, however, the lack of promissory words in the relevant sentence in the Disclosure Statement renders it as a term of the contract insufficiently absolute to be regarded as inconsistent with the implied term which I find exists. Therefore, the briefing of Mr Staindl in the circumstances was not a breach of the retainer and the obligation to pay his fees arose for Ms Finch under clause 6 dealing with disbursements in the Conditional Costs Agreement. An alternative route to the same conclusion is that the statement that counsel would be briefed on a no win/no fee basis was not promissory: JJ Savage & Sons Pty Ltd v Blakney (1970) 44 ALJR 123
Further allegations of breach of retainer relative to termination
208 There are further allegations of breach of retainer by Arnold Thomas & Becker’s alleged termination of the retainer. On my findings, it was Ms Finch who terminated the retainer so these causes of action must fail.
Negligence
209 Paragraph 11 of the counterclaim alleges breach of duty by way of negligence in failing to prepare for the mediation by not obtaining reasonable and proper directions from VCAT as to the filing and service of witness statements within a reasonable time; alternatively, failing to compel the provision of witness statements from the Heat Group as respondent within a reasonable period of time prior to the conduct of the mediation. It was also said that there was a failure to brief counsel within a reasonable time, the pre-trial conference taking place as late as 28 October. It was said that evidence was not given to counsel until 27th and 28th and the respondents’ witness statements, being 15 lengthy ones, were not given to counsel until 27th and 28th. Further, it was said that there was a failure to follow the client’s instructions to seek an adjournment of the mediation and a failure to take into account those matters.
210 In my view, there was some justification for these criticisms, though it may be that the criticism might be expressed in a slightly different way. The rehearsal of the facts above shows that the witness statements on behalf of Ms Finch were required to be filed in June 2009 in accordance with an order made by Senior Member Walker. This did not happen. There was no explanation from Arnold Thomas & Becker. As a Judge or Tribunal Member, when such a thing occurs, I have often considered that the solicitors may have failed to deliver because, in accordance with their arrangements with the client, they have not been put in funds to do the necessary work. Here, however, Arnold Thomas & Becker were acting on a “no win/no fee” basis. No explanation was given as to why the witness statements were not filed on time. The result of that failure was to have the matter brought before Deputy President Coghlan, apparently upon an application by the Heat Group that Ms Finch’s complaint be summarily dismissed. It seems likely in those circumstances that, since Ms Finch’s representatives were at that stage “on the back foot”, they had to accept what was a quite unsatisfactory arrangement so far as the presentation of Ms Finch’s case was concerned; that is, that the respondents’ witness statements would not be provided until less than a week before trial in circumstances where the Heat Group had a month to consider Ms Finch’s statements in accordance with a self-executing order made by Mrs Coghlan which would have dismissed Ms Finch’s complaint if the witness statements had not been filed by 23 September 2009. At T624, in answer to questions from me, Mrs Eleftheriou conceded that Arnold Thomas & Becker had “dropped the ball”. The difficulties and the crises immediately before the scheduled final hearing derived partly from the difficulties and ultimate impossibility of obtaining counsel on a “no win/no fee” basis, but also as a result of the unsatisfactory arrangements for the respondents’ witness statements which Ms Finch as applicant had to put up with because of the failure to serve her statements or those on her behalf in a timely manner and in accordance with the Tribunal’s original order.
211 Mr Harrison submitted that if, which Arnold Thomas & Becker denied, there had been negligence on its part, it was protected by advocate’s immunity which, in Australia, derives from the High Court decisions of Giannarelli v Wraith (1988) 165 CLR 543 and D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1. The immunity was considered recently by the New South Wales Court of Appeal in Kendirjian v Lepore [2015] NSWCA 132. In that case, a personal injury plaintiff brought a claim against his solicitor and counsel alleging that on the first day of trial they told him that a settlement offer had been made but they failed to disclose that the offer was to settle for $600,000 plus costs. They had rejected the offer as too low. The trial led to a much smaller award. A Judge in the New South Wales District Court dismissed the claim on the basis of advocate’s immunity. Leeming JA, who concurred with MacFarlane JA, said of the immunity established by those cases:
“The immunity applies to ‘work done out of court which leads to a decision affecting the conduct of the case in court.’”
212 His Honour and MacFarlane JA and Bergin CJ in Eq held that the immunity principle applied. All of the matters referred to above seem to me to be either matters that occurred in Court relative to obtaining particular directions or not obtaining them and things which happened or failed to happen out of Court, which had an effect on the conduct of the case in Court. In Goddard Elliot v Fritsch [2012] VSC 87, Bell J found serious defaults on the part of the plaintiff practitioner in the preparation of the client’s case for court, yet nevertheless found that the relevant immunity existed. In those circumstances, the negligence claim again Arnold Thomas & Becker must also fail.
Repudiation
213 Next, it was alleged that Arnold Thomas & Becker withdrew its services without good cause and thereby repudiated the retainer. Ms Finch was said to have accepted the retainer by appointing substitute legal advisers, Jacka Lawyers. In light of the finding that I have made that it was Ms Finch who terminated the retainer, the allegation of repudiation must be rejected.
Damages
214 In the circumstances, it is unnecessary for me to consider the issue of damages in light of the failure of the relevant causes of action. Mr Harrison urged me to do so nevertheless, lest the matter go further. In my opinion, however, particularly in light of the way the trial concluded, it is inappropriate to go more than is strictly necessary to dispose of the matter. If the matter did need to be reconsidered, it would likely be on a full scale retrial. I will, however, make one comment. It was said that Ms Finch lost the chance of securing a more favourable offer of settlement “without the imposition of the stringent terms of release contained within the Deed of Release”. In light of what I have said on this subject, I reject the valuation of this alleged chance in the counterclaim at $115,000. I would value it at zero dollars or perhaps a minus, because I regard it as inconceivable that the Heat Group would have settled without a general release.
Misleading and Deceptive Conduct
215 Next, it was alleged that Arnold Thomas & Becker had engaged in misleading and deceptive conduct based on an indication that it would act on a “no win/no fee” basis and that counsel would be retained on a similar basis. The representations were said to be falsified by Arnold Thomas & Becker’s unilaterally withdrawing its legal services. The findings of fact I have already made exclude this as a possible part of the cause of action. It did not happen. It was also said that the representations were falsified by the rendering of the statement of account. Since I have concluded that Arnold Thomas & Becker was contractually entitled to serve that statement of account, this cannot be a basis for liability for misleading and deceptive conduct. Moreover, since the matters alleged were future matters, the pleading simply failed to take account of the matters raised by the Federal Court in Bill Acceptance Corporation Ltd v GWA (1983) 50 ALR 242. Following the Federal Court’s decision in the GWA case, the Trade Practices Act 1974 was amended so as to include special provisions relative to future contract; namely, s51A of that Act and related provisions.
216 This pleading does not invoke the corresponding provisions to like effect in the Victorian Fair Trading Act. Rather, it refers simply to s9 of that Act which is the equivalent of the old s52 of the Trade Practices Act 1974. For the reasons given by the Federal Court in GWA, the futurity involved means that the cause of action would fail for that reason alone. Again, the allegation that the requirement to pay counsel up‑front was wrongful, must be rejected both because of the failure to invoke the appropriate provisions of the Fair Trading Act and also because I have found that Arnold Thomas & Becker was contractually entitled to do what it did. Even if the correct provisions of the Fair Trading Act had been invoked, Arnold Thomas & Becker could have contended that it had reasonable grounds for the representation that counsel would be retained on a “no win/no fee” basis because Mr Harrison was able to be retained on that basis at least initially. Had the claim been properly framed, no doubt Arnold Thomas & Becker could have led further evidence as to “reasonable grounds”. The causes of action for misleading and deceptive conduct must therefore fail.
Equitable estoppel
217 Finally, it was alleged there was an equitable estoppel entailing mutual assumptions that Arnold Thomas & Becker would provide services to Ms Finch:
“… until the conclusion of the VCAT proceedings unless the legal practice had good cause to terminate the retainer or had otherwise achieved a successful outcome for the client.”
218 Assuming without deciding that this assumption exists, it has not been demonstrated that it has been invalidated by any actions of Arnold Thomas & Becker. On my findings, Ms Finch terminated the retainer and, in any event, Arnold Thomas & Becker had good cause to terminate the retainer because of Ms Finch’s failure to accept reasonable advice. Again, I do not accept that there was an assumption that Arnold Thomas & Becker would retain barristers on a “no win/no fee” basis. The assumption, as I see it in the proper contractual setting, was that Arnold Thomas & Becker would do this if it was possible for it to do so. It turned out, in the event, that it was not. In those circumstances I do not believe it has been proven that Arnold Thomas & Becker was resiling from or departing from the actual assumptions that were made between the parties. Therefore, the claim based upon equitable estoppel must fail.
Conclusion
219 The result, then, is that both the claim and the counterclaim fail, subject to what I say about trust money, below. It may be recalled that this result was offered as an open offer at the abortive trial date in March. All that has happened since: including a trial extending over three weeks; an interlocutory appeal to the Court of Appeal; an application for Judicial review; and various directions hearings, has been done to no good cause. It is a matter of intense regret to me that bona fide commercial disputes between willing and efficient litigants have been obstructed and delayed by the consumption pointlessly of the Court’s resources in this litigation.
Trust money
220 Ms Finch paid $18,000 to Arnold Thomas & Becker on account of Mr Staindl’s fees. Mr Staindl’s fees were eventually deducted from that amount. Ms Finch says that, since the moneys were paid in the expectation that Arnold Thomas & Becker and Mr Staindl would represent her at a final hearing at VCAT, which final hearing did not proceed, the whole $18,000 should be refunded.
221 In February of this year, Arnold Thomas & Becker proposed to refund some $9,000 to Ms Finch. The balance had been paid to Mr Staindl. Ms Finch declined the offer of payment in an email dated 20 February 2015. She said, first, that she should be returned the whole $18,000 and fees for Mr Staindl should not have been deducted. Secondly, she complained that the moneys were taken from her and her husband “unjustly … in 2009” and interest should be offered. Finally, she said: “There are damages associated with the way this money was unjustly collected and begotten (sic) from me.” She reiterated this position in an email to Mr Price of Arnold Thomas & Becker on 17 March of this year. (CB 910-12)
222 Section 3.3.11 and the following Sections of the Legal Profession Act 2004 makes provision for a solicitor’s general trust account. These trust accounts do not bear interest. The obligation of a solicitor to account for moneys held on trust is equitable and statutory. Whilst a debtor is obliged to seek out his creditor and an obligation to pay a debt or liquidated sum when sued for in this Court carries with it as a matter of course an entitlement to interest under the Supreme Court Act, the present situation is not one of debt but rather one of equitable and statutory obligation relative to an account which is not an interest bearing account. No interest is payable to Ms Finch.
223 The moneys deducted to pay Mr Staindl’s fees were deducted for the very purpose for which Ms Finch paid the money to Arnold Thomas & Becker. It entails no breach of trust. In quoting a daily rate, as Mr Staindl did, that rate applied to work other than appearances. This stands in contrast to the situation where counsel quotes a brief fee and refreshers where the brief fee necessarily entails preparation and the first day of the hearing. The suggestion that Mr Staindl should have prepared Ms Finch’s case to the extent that he could in the limited time available to him, advise in conference and then represent her at a three day mediation for no remuneration is totally unjust and affected by the same air of unreality as many of Ms Finch’s other contentions are.
224 Arnold Thomas & Becker should refund the $9,000.
Costs
225 I have not heard submissions on costs and so I will reserve them.
Disposition
226 Accordingly:
(1)The defendant’s liberty to reopen her case is rescinded;
(2)On the plaintiff’s claim, there is judgment for the defendant;
(3)On the defendant’s counterclaim subject to the plaintiff’s obligation to refund $9,000 held on trust, there is judgment for the plaintiff;
(4)Costs reserved.
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