Cameron v Ofria
[2007] NSWDC 202
•22 October 2007
Reported Decision:
6 DCLR (NSW) 13
District Court
CITATION: Cameron v Ofria [2007] NSWDC 202 HEARING DATE(S): 11 July 2007, 12 July 2007, 13 July 2007, 30 August 2007 and 31 August 2007
JUDGMENT DATE:
22 October 2007JURISDICTION: Civil JUDGMENT OF: Hungerford ADCJ DECISION: Verdict for the plaintiff against the defendant in an amount of $39,123.87; parties to be heard on costs CATCHWORDS: LEGAL PRACTITIONERS - Claim by a barrister against client for unpaid fees - Action in breach of contract - Barrister instructed by solicitor to act for and on behalf of client - Whether a contract between barrister and client or between barrister and solicitor - Alleged contract for provision of legal services - Disclosure by barrister of basis of costs - Costs agreement between barrister and client - Bills of costs - Whether compliance with statutory requirements LEGISLATION CITED: Civil Procedure Act 2005, s 100(1)
Legal Profession Act 1987, ss 38I, 173(1), 174(1), 175, 176, 177, 182, 184, 185, 191, 192, 193, 194, 195 and Div 6 of Pt 11
Legal Profession Act 2004 , s 735(1), Pt 3.2 of Ch 3, Sch 1 and cl 18(1) of Sch 9
Legal Profession Regulation 1994, cl 22A
Legal Profession Regulation 2002, cl 45 and cl 15 of Sch 5
Legal Profession Amendment (Transitional Provisions) Regulation 2002, cl 3 and Sch 1[3]
Limitation Act 1969, s 14(1)(a)
Subordinate Legislation Act 1989, s 10(2)CASES CITED: ABB Power Generation Ltd v Chapple (2001) 25 WAR 158
Adamson v Williams [2001] QCA 38
Cameron v Dennis [2006] NSWDC 32
Conder v Silkbard [1999] NSWCA 459
Craven-Ellis v Canons Ltd [1936] 2 KB 403
Dennis v Cameron [2007] NSWCA 228
Dewhurst (WA) & Co Pty Ltd v Cawrse [1960] VR 278
Dimos v Hanos [2001] VSC 173
Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523
Flett v Deniliquin Publishing Co Ltd [1964-5] NSWR 383
Giannarelli v Wraith (1988) 165 CLR 543
Kennedy v Brown (1863) 13 CB (NS) 677; 143 ER 268
MacRobertson Miller Airline Services v Commissioner of State Taxation (WA) (1975) 133 CLR 125
May (Re) (1859) 4 Jur NS 1169; 7 WR 126
Mednis v Chand [2003] NSWSC 680
Morris v Hunt [1819] 1 Chit 544
Neville (Re); Ex parte Pike (1896) NSWR (Bankruptcy & Probate Cases) 24
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221
Phillips v Ellison Brothers Pty Ltd (1941) 65 CLR 221
Rondel v Worsley [1969] 1 AC 191
Saif Ali v Sydney Mitchell & Co [1980] AC 198
Sharpe (Re); Ex parte Donnelly (1998) 80 FCR 536
Update Constructions Pty Ltd v Rozelle Child Care Centre Ltd (1990) 20 NSWLR 251
Wentworth v Rogers [2002] NSWSC 709PARTIES: Robert William Cameron - Plaintiff
Roland Ofria - DefendantFILE NUMBER(S): Matter No 5504 of 2005 COUNSEL: Mr A J Tudehope (Plaintiff)
Mr N A Nicholls (Defendant)SOLICITORS: McLaughlin & Riordan (Plaintiff)
Niall Connolly Lawyers (Defendant)
JUDGMENT
1 This is an action by a barrister for the recovery of fees from a former client. Payment of such fees for professional services rendered to a client by a barrister were traditionally subject to the condition that if they were not paid the barrister could not sue for recovery. For this proposition, Lockhart J in Re Sharpe; Ex parte Donnelly (1998) 80 FCR 536 at 538-539 cited the leading English case of Kennedy v Brown (1863) 13 CB (NS) 677; 143 ER 268 where Erle CJ said (at 727; 287):
We consider that a promise by a client to pay money to a counsel for his advocacy, whether made before, or during, or after the litigation, has no binding effect; and, furthermore, that the relation of counsel and client renders the parties mutually incapable of making any contract of hiring and service concerning advocacy in litigation.
2 In Re Neville; Ex parte Pike (1896) NSWR (Bankruptcy & Probate Cases) 24 at 26, Manning J affirmed the rule for New South Wales in this way:
[A] barrister is by law incapacitated from entering into a contract of any kind, either with solicitor or client, in respect of fees, for, at all events, litigious work as a barrister.
3 In Sharpe (at 539), Lockhart J informatively stated the basis of the rule as to a barrister’s liability to sue for fees on historical grounds: to maintain a barrister’s immunity from a negligence action – Rondel v Worsley [1969] 1 AC 191 at 236, 262 and Saif Ali v Sydney Mitchell & Co [1980] AC 198, but cf Giannarelli v Wraith (1988) 165 CLR 543; a barrister’s status as distinguished from an ordinary tradesman – Re May (1859) 4 Jur NS 1169; 7 WR 126; and independence of a barrister from any verdict obtained – Morris v Hunt [1819] 1 Chit 544 at 554. However, in this State the enactment of the Legal Profession Act 1987 as from 1 January 1988 radically altered the position. In its original form, although not expressly stating that a barrister may sue for recovery of fees, the statute in ss 184 (Agreement about costs), 191 (Security for costs) and 192 (Bill of costs to be given before costs can be recovered from client), and as Lockhart J held in Sharpe (at 539), “plainly impliedly assumes this right.” I respectfully agree and, for myself, would only add that s 38I(3) puts the matter beyond doubt. Inserted into the statute by the Legal Profession Reform Act 1993, which commenced on 1 July 1994, the subsection provides:
(3) Contracts
A barrister or solicitor may enter into a contract for the provision of services with a client or with another legal practitioner. The barrister or solicitor may accordingly sue and be sued in relation to the contract.
The parties
4 The plaintiff, Robert William Cameron, was at all relevant times between 1997 and 2002 a barrister-at-law admitted to practice at the New South Wales Bar and held a current practising certificate. He is no longer in practice. During the period concerned, and commencing on 9 August 1997, the plaintiff was briefed from time-to-time by Tony Vella, a solicitor practising from offices at Parramatta, to act for and represent the defendant, Roland Ofria, against Gerald and Norma Micallef in various proceedings in this Court, the Court of Appeal and the Federal Court of Australia. Also, on the instructions of Mr Vella, the plaintiff represented the defendant and his wife, Marlene Ofria, in proceedings in the Equity Division of the Supreme Court against Mr and Mrs Micallef in relation to the ownership and operation of property jointly owned by them at Gardener’s Road, Rosebery. He acted also in the subsequent appeal proceedings.
5 The defendant was a tiler by occupation who conducted a business known as “Rosebery Tiles” which engaged in tiling and painting work. Now 69 years of age, he has since retired. Although a businessman in Sydney for many years, the defendant maintained his command and understanding of the English language was limited with little comprehension of the English he could read. He pleaded minimal understanding of legal matters and said reliance was completely on advice and direction provided to him by legal practitioners in his affairs. He left school at age 12 years and came to Australia in 1963 age 25 years from Italy, having been born in Egypt. He gave evidence through an Italian interpreter. However, it is to be noted that the plaintiff responded to the language difficulties alleged by the defendant to the effect that in the five-year period of acting for him he read everything involved and made intelligent and significant comments on the material in English.
6 Mrs Ofria, although not a party to this action, gave evidence in her husband’s case. She confirmed the defendant was engaged in a considerable amount of litigation in which the plaintiff acted and she only occasionally attended the plaintiff’s chambers and Mr Vella’s office with her husband for that purpose. Indeed, she maintained the defendant’s problems were his own and not hers and even in the case in which she was a party all she knew was that there was a case – she said “I didn’t know the outcome, there were so many things in court.” Since separated from the defendant, Mrs Ofria said she “wouldn’t have a clue about his problems. I have five children and run the house. I don’t interfere with his affairs. He provided a roof and food for my children, that was enough.” Her evidence related to two occasions when she was present when the defendant paid cash to the plaintiff in his chambers.
Background facts
7 It seems that Mr Vella had instructed the plaintiff to act for clients as a barrister for very many years, even before the present events, but the relationship between them was purely professional and did not extend to social interaction.
8 The first occasion on which the plaintiff was briefed by Mr Vella to act for the defendant was in relation to proceedings brought against him by Mr and Mrs Micallef in this Court. On Friday 9 August 1997 the plaintiff was asked to confer late in the afternoon of that day with the defendant and to appear in the proceedings which were to be heard on the following Monday and Tuesday. In view of the short timeframe and large number of documents to read, the plaintiff did not provide the defendant with a fee disclosure statement but the defendant admitted he received a memorandum of fees dated 14 August 1997 payable to the plaintiff of $4,000 for the conference and brief on hearing which were duly paid by two cheques, of $2,000 and $1,000, and $1,000 cash at a later stage. An amount of $500 was invoiced by the plaintiff to the defendant on 18 September 1997 for settling a notice of appeal and that amount was paid, less $10. Receipts were issued for this total amount of $4,490.
9 Although, as will appear, the plaintiff performed further legal services for the defendant on the instructions of Mr Vella, the defendant maintained he received no invoices in relation to the plaintiff’s fees. Until the instant proceedings, he said he had not seen any costs agreement or schedule of fees to be charged by the plaintiff for those further services. Even so, the defendant accepted, as he said, that the plaintiff “was subsequently engaged by Mr Vella to appear at court in relation to other proceedings on my behalf”; Mr Vella confirmed this. The defendant acknowledged too that he was under an obligation to pay the plaintiff for the services provided by responding “of course”.
10 Those other proceedings referred to were an appeal by the defendant to the Court of Appeal against the District Court decision in which, after settling the notice of appeal, the plaintiff appeared for the defendant to resist a security for costs application but he did not argue the appeal itself which was conducted by the defendant in person. Then, during February and March 1999, the plaintiff acted for the defendant on Mr Vella’s instructions in the Federal Court in bankruptcy proceedings brought against him by Mr and Mrs Micallef. In August 2000, the plaintiff settled a statement of claim and affidavits for the defendant to institute an action against Mr and Mrs Micallef in this Court and acted for him in its preparation and hearing over the period from May 2002 to September 2002; in November 2002, Mr Vella requested the plaintiff to advise the defendant in relation to an appeal in this matter and to draft a holding notice of appeal – no fees were charged for this latter work. At this stage, the plaintiff ceased to act for the defendant.
11 As to the proceedings in the Supreme Court in which the plaintiff acted for both Mr and Mrs Ofria, he said payments received for his fees had been appropriated to that joint debt so that, and as was common ground, the only monies outstanding related to those cases in which he acted solely for the defendant.
12 The plaintiff said his practice was to maintain a record of time spent on case work in a diary and/or a separate work-in-progress book from which fees memoranda were generated and sent to the instructing solicitor concerned. In this case with the defendant, he thereby caused a series of memoranda to be sent to Mr Vella on or soon after the respective dates of each memorandum. On 8 October 1999, the plaintiff forwarded to Mr Vella for conveyance to the defendant, and what he described as “the obligatory disclosure material as required under the Legal Profession Act”, a document entitled “Schedule of Fees – Legal Profession Act, RW Cameron”. The document detailed, pursuant to ss 176 and 177 of the statute, the basis of calculating fees, including as to the hourly rate, daily fee, retainer fee, disbursements, withdrawal or return of brief, billing arrangements and estimated costs; the then costs to date and estimated future costs were specified.
13 Mr Vella, in respect of the proceedings in which he briefed the plaintiff to act for the defendant, said he maintained a single correspondence file and separate files for each matter of the pleadings and court documents. He said he recalled receiving a fee disclosure statement from the plaintiff which, in accordance with his usual practice, was placed in his files and a copy passed to the defendant either personally or by post. Mr Vella adopted a similar procedure with memoranda of fees from the plaintiff to the defendant. He added, however, that in respect of the plaintiff and the defendant arrangements were made for all fees to be paid directly by the defendant to the plaintiff and he did not receive any money at any stage.
14 In respect of the legal services provided by the plaintiff, a summary of the memoranda of fees sent to Mr Vella is as follows –
Date Matter 14 August 1997 District Court 18 September 1997 Court of Appeal 22 December 1997 Court of Appeal 22 December 1997 Supreme Court (Equity) 17 February 1998 Supreme Court (Equity) 8 October 1999 Federal Court (Bankruptcy) 8 October 1999 Supreme Court (Equity) 29 October 1999 Supreme Court (Equity) 19 November 1999 Supreme Court (Equity Appeal) 23 March 2000 Supreme Court (Equity Appeal) 7 July 2000 Supreme Court (Equity Appeal) 17 November 2000 Supreme Court (Equity Appeal) 12 April 2001 District Court 23 October 2002 District Court
(*As corrected)
15 The plaintiff admitted that the defendant paid him for the work done a total amount of $37,490, as follows –
Date 7 October 1997 17 November 1997 22 December 1997 December 1997 15 May 2001 4 February 2003
(The first three payments were said to be by cheque and the other payments in cash)
16 On the plaintiff’s case, therefore, the amount still due to him from the defendant was $49,260.50 ($86,750.50 minus $37,490).
17 The defendant claimed he made the following payments to the plaintiff –
Date 9 September 1997 September 1997 2 October 1997 December 1997 April 1999 November 1999 16 May 2001 30 April 2002 4 February 2003 September 2003
(The first two payments were said to be by cheque and all later payments in cash)
18 Thus, it will be apparent that on the defendant’s case he has paid the plaintiff an amount of $64,170 being a shortfall of $22,580.50 from the plaintiff’s total fees claimed of $86,750.50. That was so notwithstanding, apart from the two fees memoranda of 14 August 1997 and 18 September 1997 totalling $4,500, the defendant claimed he received no invoices from Mr Vella in relation to the plaintiff’s fees. And despite too the defendant allegedly being unaware of the plaintiff’s basis for calculating fees in a series of litigation extending over more than five years.
19 Another somewhat curious circumstance in these events was the payment by the defendant to the plaintiff of not insignificant amounts in cash. Although he maintained accounts with St George Bank and a credit union, he said he “always had money on me” and “I always hid my money, not in bank … put in my sock.” No doubt this conduct related to the defendant’s bankruptcy proceedings in which he was being pursued for non-payment of debts totalling about $430,000 due to overseas suppliers of tiles for his business; he said recovery was sought from his business, home and other assets. He agreed he knew from his accounts what had been purchased and the amount of money owed and yet, inconsistently, in his relations with the plaintiff he received no invoices but persisted in utilising the plaintiff’s services. The defendant explained the situation in his affidavit in this way:
11. During a conference with Mr Cameron, and I cannot now recall that date, Mr Cameron said to me words to the following effect:
“I would prefer if you could pay my fees direct to me in cash rather than to Mr Vella.”
12. Following that request, I made cash payments to Mr Cameron. Based on his request I complied and trusted Mr Cameron. On various occasions I paid cash monies as requested. I did not ask for receipts as I trusted Mr Cameron.
13. From time to time Mr Cameron said to me words to the effect:
“I want some money. See what you can give me.”
…
22. In or about mid April 2002 Mr Cameron telephoned me and said:
“I have the document ready. Come and pick it up and bring me $15,000 in cash.”
I picked up the document from Mr Cameron. He said:
“Where is the money?”
I said:
“I’ll bring it at the end of the month.”
23. In late April 2002 I went to Mr Cameron’s office with my wife, Marlene. I paid $15,000 in cash to Mr Cameron. He did not give me a receipt.
…
26. In or about February 2003 I paid Mr Cameron a further sum of $18,000.00 in cash. He did not give me a receipt.
…
29. I paid Mr Cameron $5,000.00 in cash. Mr Cameron did not give me a receipt.
20 Mrs Ofria confirmed in her affidavit the two cash payments of $15,000 each made by her husband in May 2001 and April 2002 and said receipts were not provided by the plaintiff. However, she admitted in oral evidence that on the first occasion the plaintiff did sign a receipt and gave it to the defendant. On testing in cross-examination, Mrs Ofria as to her knowledge of the claimed cash payments responded to the effect – “Because I just know … I can’t remember when paid, I know it was paid … I looked at a document my daughter showed me but haven’t a clue about what document … I asked my daughter and she read something to me.” Although not accepting she had an independent recollection of the cash payments, Mrs Ofria maintained the payments were made.
21 The plaintiff flatly denied the assertions by the defendant as to any arrangements for or payment of fees in cash and that, until his letter dated 15 October 2004, which enclosed all outstanding fees memoranda, to the defendant seeking payment of unpaid fees, he never directly asked the defendant for payment but did so only through Mr Vella.
22 Although pleading a lack of receipts for monies paid to the plaintiff, the defendant produced from Mr Vella’s files what he described as receipts for each of the two payments of $15,000 and the payment of $18,000, totalling $48,000. The plaintiff, as earlier specified, conceded payments of $15,000 and $18,000 (total of $33,000) had been received but in denying the payment of the second $15,000 amount replied that the alleged receipt on the fees memorandum of 23 March 2000 was not a receipt but a copy from his business records of one of the fees memoranda sent by him to the defendant with the letter of 15 October 2004 seeking payment of unpaid fees. The notation thereon of “Paid cash $15,000 16/5/01 – GST” (but not initialled or signed by the plaintiff as a receipt) would, from the explanation he gave, seem to be a file record of the payment that was in fact made on 16 May 2001 and not an additional or second payment of $15,000.
23 What emerges from the facts as they developed is that it was common ground the plaintiff performed as a barrister professional services for the defendant over a period of five years having been briefed by Mr Vella to act on his behalf in various pieces of litigation. The defendant accepted he was liable to pay for the services. The sharp factual difference between the parties was that the plaintiff claimed an underpayment of $49,260.50 in fees whereas the defendant said there was a shortfall of only $22,580.50. A resolution of this difference involves very much an acceptance of the evidence of one party over the other where credibility was a real issue and in a context where the payments made were in cash, supported to some extent by Mrs Ofria but without any documentary support. That absence of support was exacerbated by the defendant’s assertion he had not received, during the five-year period the plaintiff acted for him, any fees memoranda or disclosure statement of the basis of fees to be charged; against that, the plaintiff produced such documents.
24 A determination of the facts requires consideration of the role of Mr Vella as the instructing solicitor and of his handling of the fees memoranda and the disclosure statement. In all of that mix, the nature and scope of the relationship between the plaintiff and the defendant, including that of Mr Vella, in a contractual sense falls to be identified. Depending on the facts as found, the provisions of the Legal Profession Act will require examination as to whether the plaintiff may commence and maintain the action for recovery of any fees due to him.
The claim, defence and cross-claim
25 The plaintiff’s claim was brought in breach of contract. According to para 6 of the statement of claim, filed on 16 December 2005, it was pleaded “by reason of the facts and matters above, there was an oral or implied agreement between the Defendant and the Plaintiff that in consideration of the Plaintiff performing the legal services the subject of the tax invoices, the Defendant … would pay to the Plaintiff within a reasonable time after receipt or advice of receipt of each tax invoice …” The relevant “facts and matters” earlier pleaded, in summary form, were –
- the plaintiff was at all material times a practising barrister;
- the plaintiff was briefed from time-to-time by a solicitor, Tony Vella, “and on behalf of the Defendant and on his instructions to represent and act for the Defendant” in specified litigation;
- the plaintiff furnished Mr Vella “fee disclosures” pursuant to s 176 of the Legal Profession Act;
- between July 1997 and December 2002 the defendant raised no objection to the “quantum and/or rates disclosed”;
- the plaintiff proceeded to provide the services at the rates so disclosed; and
- between 14 August 1997 and 23 October 2002 the plaintiff from time-to-time rendered memoranda of fees to Mr Vella for payment by the defendant.
26 In outlining the plaintiff’s case, his counsel, Mr A J Tudehope, put it as follows:
(a) The Plaintiff performed work as a barrister for the benefit of the Defendant. The Plaintiff has been paid by the Defendant for part of that work. The Plaintiff has not been paid by the Defendant for the other work that he performed on behalf of the Defendant. The Plaintiff has sued the Defendant for the balance of the fees due to him for the work performed on behalf of the Defendant.
(b) The Plaintiff has complied with the requirements of the Legal Profession Act 1987 and may therefore commence and maintain an action for the recovery of those fees remaining due to him.
(c) The Defendant has, as evidenced by his conduct, accepted an offer to enter into a Costs Agreement with the Plaintiff and the Plaintiff is entitled to recover those fees remaining due to him.
(d) Alternatively, the Defendant through his agent, the solicitor, entered into a Contract with the Plaintiff pursuant to which the barrister agreed to do work for the Defendant and in return the Defendant agreed to pay the Plaintiff for that work. The Plaintiff is entitled to recover the fees remaining due to him.
27 The statement of claim particularised the fees memoranda, disclosure statement and payments received. It then claimed an amount of $49,260.50 plus interest pursuant to s 100(1) of the Civil Procedure Act 2005 at the rates prescribed plus costs.
28 A notice of defence was filed on 12 January 2006 and effectively denied or did not admit the plaintiff’s pleadings, other than to admit that he engaged Mr Vella as his solicitor and that the plaintiff represented him. Specifically, the rendering of the fees disclosure statement and memoranda of fees was not admitted. Payments in cash of $62,170 and $2,000 by cheques, totalling $64,170, were alleged to have been made by the defendant to the plaintiff during the period September 1997 to September 2003. The disputed payments said by the defendant to have been made, according to the pleadings and his evidence, amounted to $26,680 being as follows:
Date April / July 1999 November 1999 30 April 2002 August / September 2003
29 Thus, those disputed payments plus the shortfall in payments of $22,580.50 resulted in the plaintiff’s claimed amount of $49,260.50.
30 The defence pleaded s 14(1)(a) of the Limitation Act 1969 as a bar to recovery of $8,781 in respect of five of the fees memoranda dated 14 August 1997 ($4,000), 18 September 1997 ($500), 22 December 1997 ($2,450), 22 December 1997 ($1,400) and 17 February 1998 ($431) being claims which did not accrue within six years of the commencement of the plaintiff’s action on 16 December 2005.
31 Mr N A Nicholls of counsel for the defendant put resistance to the claim in this way:
(a) There was no contract between the Plaintiff and the Defendant.
(c) At no stage was the Defendant “given” a bill of costs for the legal services claimed by the Plaintiff in these proceedings so that these proceedings should never have been commenced and cannot be maintained pursuant to s 192 of the Act.(b) Further, there has been no disclosure to the Defendant of the cost of legal services to be provided by the Plaintiff to the Defendant as required by s 175 and/or s 176 of the Legal Profession Act 1987 (“the Act”) so that the client is under no obligation to pay costs of legal services and these proceedings cannot be maintained pursuant to s 182(1) and (2) of the Act.
32 In the alternative, in the event it be found there was a relevant contract with cost disclosure and bills of costs given to the defendant, Mr Nicholls submitted that –
- the defendant made cash payments of $60,180;
- total payments made by the defendant to the plaintiff were $64,180; and
- the plaintiff was not entitled to maintain the proceedings in relation to the five statute barred fees memoranda totalling $8,781.
33 As to the point made under the Limitation Act, it need only be said, in my view, that it does not arise. Monies paid by the defendant were, quite properly, appropriated by the plaintiff to satisfaction of the five fees memoranda concerned so that the plaintiff’s claim relates effectively to the remaining nine memoranda as to which no limitation defence was pleaded.
34 The defence pleaded also that the plaintiff overcharged the defendant a total amount of $1,440 in relation to certain items in the fees memoranda for 8 and 29 October 1999. Those items were not pursued in evidence or by further argument and, therefore, I will not deal with them.
35 On 12 January 2006, the defendant filed a cross-claim against the plaintiff seeking damages for alleged professional negligence, misrepresentations and misleading and deceptive conduct; additionally, it was pleaded the plaintiff did not hold a practising certificate at the relevant times. The plaintiff’s defence to the cross-claim denied the allegations. In the result, on the commencement of the trial on 11 July 2007 the Court ordered by consent that the cross-claim be dismissed with costs reserved.
Legislative scheme
36 The issues raised fall to be determined having in mind the provisions of the Legal Profession Act 1987 (the 1987 Act). That Act was repealed by s 735(1) and Sch 1 of the Legal Profession Act 2004 (the 2004 Act), which commenced on 1 October 2005. The 1987 Act, relevantly for present purposes, in Pt 11 (ss 173 to 208V, inclusive) deals with legal fees and other costs. The corresponding provisions of the 2004 Act appear in Pt 3.2 – Costs disclosure and assessment of Ch 3 – Conduct of legal practice, but in substance the terms of the 1987 Act are repeated. However, Sch 9 – Savings, transitional and other provisions to the 2004 Act in cl 18 – Client information and legal costs, provides in sub-cl (1) that Pt 3.2 of the 2004 Act applies if a client first instructs the law practice (including a sole practitioner such as a barrister) on or after the commencement date (1 October 2005) and Pt 11 of the 1987 Act continues to apply to a matter if the client first instructs the law practice in the matter before that day. Accordingly, in this matter Pt 11 of the 1987 Act applies as the plaintiff was first instructed before 1 October 2005 even though the claim was not brought until 16 December 2005. So much was common ground, in my view correctly, between the parties here.
37 Notwithstanding the earlier traditional common law and ethical professional practice rules concerning the relationship between a barrister and a client, the 1987 Act makes it clear that a client has either direct access to a barrister or through a brief to a barrister from the solicitor retained by the client. Section 38I, I think, compels such a conclusion. Subject to the barristers’ rules and possession of a relevant practising certificate, the section enables a barrister to accept any client: sub-s (1); a barrister may enter into a contract for the provision of services with a client or with another legal practitioner and, accordingly, may sue and be sued in relation to the contract: sub-s (3); and a barrister may enter into a contract with a client even though the barrister has accepted a brief from a solicitor retained in the matter: sub-s (4). Even before s 38I was inserted in the 1987 Act in July 1994, and as Lockhart J observed in Sharpe earlier cited, ss 184, 191 and 192 impliedly assumed the right of a barrister now to sue for recovery of fees from a client.
38 Although the present action is brought for breach of contract as recognised by s 38I(3), as it must in order for legal relations to have been created, it is subject to satisfaction of the various requirements in Pt 11 of the 1987 Act. As a general proposition, it seems to me, Pt 11 sets out the rights of clients and certain specified protections in relation to legal fees and other costs charged by a legal practitioner. Relevantly for present purposes, s 174(1) of the statute specifies the client’s rights – the client is to be given information about how a barrister will charge for costs for legal services and an estimate of the likely cost of legal services: para (a), ss 175 and 176; the client need not pay the barrister’s bill until it has been assessed by a costs assessor if the client is not given the information about how costs will be charged: para (b) and s 182(1) and (2); the client can enter into a costs agreement with the barrister: para (c), ss 184 and 185 and the regulation; a bill of costs is to be given to the client: para (a) and s 195; and proceedings against the client for the recovery of costs cannot be brought unless a bill of costs in the proper form has been given to the client and at least 30 days have passed: para (e) and ss 192, 193, 194 and the regulation.
39 It is to be noted that s 173(1) of the 1987 Act contains the following definitions:
bill of costs means a bill of costs for providing legal services, and includes a memorandum of fees.
costs agreement means an agreement referred to in section 184 as to costs for the provision of legal services.
legal services means work done, or business transacted, in the capacity of a barrister or solicitor.
40 Having in mind the way in which this matter was argued, the provisions of the 1987 Act to the extent relevant are:
Division 2 – Disclosure of matters relating to costs
175 Obligation to disclose to clients basis of costs
(1) A barrister or solicitor must disclose to a client in accordance with this Division the basis of the costs of legal services to be provided to the client by the barrister or solicitor.
(2) …
(3) The disclosure to a client is not required to be made by a barrister … who is retained on behalf of the client by another … solicitor. However, the disclosure to the client is to include the costs of the barrister … so retained.
(1) A barrister … who is retained on behalf of a client by another … solicitor must disclose to that other … solicitor in accordance with this Division the basis of the costs of legal services to be provided to the client by the barrister …176 Obligation to disclose basis of costs to instructing practitioner
(2) The following matters are to be disclosed to the other … solicitor:
…
(a) the amount of the costs, if known,
(b) if the amount of the costs is not known, the basis of calculating
the costs,(d) any other matter required to be disclosed by the regulations.(c) the billing arrangements,
182 Effect of non-disclosure of matters related to basis of costs
(2) A barrister … who fails to make a disclosure in accordance with this Division of the matters required to be disclosed by section 175 or 176 in relation to costs may not maintain proceedings for the recovery of the costs unless the costs have been assessed under Division 6.(1) If a barrister or solicitor fails to make a disclosure to a client in accordance with this Division of the matters required to be disclosed by section 175 in relation to costs, the client need not pay the costs of the legal services unless the costs have been assessed under Division 6.
(3) …
(4) …
Division 3 – Costs agreements
184 Agreements about costs
(1) An agreement as to the costs of the provision of legal services may be made with a client by:
(a) …
(b) the barrister … retained on behalf of the client by another … solicitor.
(2) …
(3) An agreement under this section is called a costs agreement .
(4) A costs agreement is void if it is not in writing or evidenced in writing.
(5) A costs agreement may form part of a contract for the provision of legal services.
(6) A costs agreement may consist of a written offer that is accepted in writing or by other conduct. A disclosure in accordance with Division 2 under section 175 or 176 may constitute an offer for the purposes of this subsection.
The regulations … may make provision for or with respect to the information to be included in costs agreements.185 Regulations, rules and guidelines as to costs agreements
…
Division 4 – Interest, security for costs and bills of costs…
192 Bill of costs to be given before costs can be recovered from client
(2) …(1) Proceedings for the recovery of costs by a barrister … for providing legal services must not be commenced or maintained against any person unless at least 30 days have passed since a bill for those costs was given to the person in accordance with this Division.
(1) The regulations may make provision for or with respect to the form of, and the particulars to be included in, bills of costs.193 Form of bill of costs
(2) A bill of costs may be described as a memorandum of fees or in any other way authorised by the regulations.
(1) A bill of costs must be signed by the barrister … It is sufficient compliance with this section if a letter that is so signed is attached to, or enclosed with, the bill of costs.194 Signing of bill of costs
(2) …
195 Delivery of bill of costs
A bill of costs may be given to a person in any one of the following ways:
(a) by delivering it personally to the person,
(b) by sending it by post to … the person’s place of business or residence last known to the barrister or solicitor,
(c) …
(e) …(d) …
41 Pursuant to s 193(1) of the 1987 Act, the regulations may make provision as to the form of and particulars in bills of costs. The Legal Profession Regulation 1994 in cl 22A – Particulars in bill of costs, dealt with such matters. However, under s 10(2) of the Subordinate Legislation Act 1989 that 1994 Regulation was repealed and replaced by the Legal Profession Regulation 2002 which commenced on 1 September 2002; the new provision as to particulars in a bill of costs was cl 45 which, relevantly, repeated much of what cl 22A earlier contained but added a requirement in sub-cl (1)(d) for a bill of costs to include a statement that the client may apply to have the costs assessed. Then, in turn, with effect from 22 November 2002 the Legal Profession Amendment (Transitional Provisions) Regulation 2002 in cl 3 and Sch 1[3] amended cl 45(1)(d) of the 2002 Regulation, in a situation where the bill of costs is given by a barrister retained by a solicitor to act on behalf of a client and the bill is given to that solicitor, for the statement to indicate that the solicitor may apply to have the costs assessed within 30 days after the bill is given. It is necessary to determine whether cl 22A of the 1994 Regulation or cl 45 of the 2002 Regulation or both at the respective times apply in the instant case to the various fees memoranda given by the plaintiff to Mr Vella to pass on to the defendant.
42 Schedule 5 – Savings and transitional provisions of the 2002 Regulation in cl 15 states:
15 Saving of certain matters
Subject to any other provision of this Schedule, anything that had effect under, or was done for the purposes of, a provision of the Legal Profession Regulation 1994 continues to have effect under, or is taken to have been done for the purposes of, the corresponding provision of this Regulation.
43 All of the plaintiff’s memoranda of fees, with the exception of the final memorandum dated 23 October 2002, were issued to Mr Vella before the 2002 Regulation commenced on 1 September 2002. Therefore, those memoranda could not be expected to comply with the future requirements of cl 45 and, in my view, fall to be considered pursuant to the terms of cl 22A of the 1994 Regulation. So much is confirmed by cl 15 in Sch 5 to the 2002 Regulation as concerning things that had effect under, or were done for the purposes of, the 1994 Regulation as to make them taken to have been done (that is, deemed) for the purposes of cl 45. The amendments made to the 2002 Regulation effective as from 22 November 2002 could not have any application to this case unless, arguably, the plaintiff had to rely on the copy memoranda sent to the defendant by him in the letter of 15 October 2004 seeking payment of the unpaid fees.
44 The fees covered by the 23 October 2002 memorandum raise other considerations. That memorandum or bill of costs related to the action brought by the defendant against Mr and Mrs Micallef in this Court before Sorby DCJ. It covered the period from 9 August 2000 when the statement of claim was settled; through the interlocutory stages from 26 August 2001 to 29 August 2002; the pre-hearing preparation on 2 and 3 September 2002; and the hearing from 4 September to 27 September 2002. The legal services thus provided spanned the commencement date of 1 September 2002 of cl 45, in its original and unamended form, of the 2002 Regulation. The question which arises, therefore, is whether that memorandum is covered by cl 22A or by cl 45 or by both depending on when the work was done and the memorandum issued.
45 On one view, the memorandum concerned is subject wholly to cl 45 because it was not given until after the commencement date of the 2002 Regulation; then, on another view, it is subject wholly to cl 22A because it related to legal services commenced in a matter before the commencement date of the 2002 Regulation. On yet an alternative approach, the memorandum is subject to cl 22A in respect of work done before 1 September 2002 and to cl 45 in respect of work done after that date. For the plaintiff, counsel simply submitted that cl 45 could not be relied upon because nothing was put to the plaintiff in evidence about non-compliance with its terms and, in any event, the memoranda of fees on their face clearly complied with cl 22A. Counsel for the defendant asserted the memoranda were not in the form required by cl 45 but no mention was ever made of cl 22A. The point is of present importance and, for that reason, the Court re-called the parties to deal with it – written submissions were then provided and they have been considered in deciding the issue.
46 The answer to the question posed as to which Regulation applies is found, in my view, by a consideration of cl 15 in Sch 5 of the 2002 Regulation as to the savings provision. In effect, it is there laid down that something which had effect under the 1994 Regulation or was done for the purposes of that Regulation continues in an operative and effective sense after 1 September 2002, when the 2002 Regulation commenced, as if it were done under that new Regulation. Plainly, however, anything done after the commencement date cannot be said to relate in any way to the position before the commencement date as having been done for the purposes of the 1994 Regulation. The stated “purposes” of cl 22A of the 1994 Regulation, like those of cl 45 of the 2002 Regulation, were for s 193(1) of the Legal Profession Act as to the particulars to be included in a bill of costs; those “particulars” are specified and, it is to be seen, all of them relate to work which had been done in providing legal services. Thus, it seems to me, in utilising the savings provision in cl 15 of Sch 5 it is to the respective purposes as to work done attention is to be directed, that is, to use the language of s 193(1), “the form of, and the particulars to be included in, bills of costs.” Those particulars, as I have said, relate to work done.
47 It follows, in my view, that in applying the savings provision the particulars as to when the work was done determine whether the bill of costs relates to the purposes of either the 1994 Regulation or the 2002 Regulation. If that were not so then, in my view, the savings provision would have little, if any, operation because the position would have been covered by the ordinary common law rules in favour of the retrospective effect of amendments of a procedural nature.
48 As to the memorandum of fees here of 23 October 2002 with work done both before and after the commencement date of 1 September 2002, I conclude the memorandum in respect of work done before the commencement date is subject to cl 22A of the 1994 Regulation and as to work done after the commencement date to cl 45 of the 2002 Regulation in its original terms before amendment on 22 November 2002.
Contract and effect of legislative scheme
49 The primary way in which the plaintiff’s case was brought was an action for breach by the defendant of the costs agreement by failure to pay the full amount of the fees due for the professional services provided. As the requirements of the Legal Profession Act had been complied with it was therefore open to the plaintiff to commence and maintain the action for recovery of those unpaid fees. In the alternative, however, it was submitted by Mr Tudehope for the plaintiff that the fees may successfully be recovered in contract regardless of whether there was an agreement as to costs for the purposes of s 184 of the Legal Profession Act. The relevant contract in that situation, as was applicable in the present case, was that the defendant through his solicitor, Mr Vella, as his agent entered into a contract with the plaintiff as a barrister under which the plaintiff agreed to provide professional services for the defendant in return for the defendant paying the plaintiff for the work done.
50 Mr Nicholls for the defendant resisted this alternative proposition on the principal basis that it was not pleaded; the issue of agency, said counsel, was neither raised by the pleadings in the statement of claim nor was there any evidence to found such a contract as was alleged directly between the plaintiff and the defendant. Reliance was placed on Dimos v Hanos [2001] VSC 173 in which Gillard J said (in para [100]):
[100] In the normal course of events, a client who retains the services of a solicitor, engages the solicitor to provide professional services for him. In providing those services, the solicitor may advise the client that it is necessary to brief a barrister to provide specialist services. For example, it may be necessary to retain a barrister to appear in court. Retention of a barrister is, in part, satisfaction of the provision of legal services by the solicitor. In the absence of any contrary evidence, the retention of the barrister would result in a contract between the barrister and the solicitor.
51 Of course, it is to be remarked, and as Gillard J said (in para [71]), “who the contracting parties are depends on the circumstances.” His Honour added (in paras [101]-[102]):
[102] However, whether he acts as agent and whether he contracts as such, are questions of fact. The starting point in those circumstances, is proof of the agency and authority to contract on behalf of the principal. The next issue to consider is, the capacity in which the agent purported to enter into the contract.[101] The rules stated above are subject to exceptions, one of which is where the contracting party is acting as agent for a disclosed principal. The general rule is that the principal alone can sue, or be sued, on the contract. In certain cases, the agent can also be sued.
52 The approach in Dimos v Hanos was cited with approval by Gzell J in Mednis v Chand [2003] NSWSC 680 where a solicitor sued a client to recover fees under a costs agreement between a barrister retained by the solicitor on behalf of a client and the client. In finding an implication in such agreement giving the instructing solicitor contractual rights and obligations with the client, his Honour considered the relationship between the Legal Profession Act and the common law of contract by stating (in paras [50]-[51] and [53]):
[51] While the Legal Profession Act 1987 controls some aspects of the contract between a client and a legal practitioner, the question of the identity of the contracting parties and the nature and terms of the contract are to be determined according to the ordinary principles. The legislation does not establish a statutory contract between a barrister and a solicitor or a barrister and a client. The identity of the contracting parties and, subject to the strictures of the Legal Profession Act 1987, the terms of the contract will depend upon the circumstances (Dimos v Hanos [2001] VSC 173 at par 70- par 71).[50] The Legal Profession Act 1987, s 38I(3) provides that a barrister or solicitor may enter into a contract for the provision of services with a client or with another legal practitioner. The provision goes on to provide that the barrister or solicitor may accordingly sue and be sued in relation to the contract. Section 38I(4) provides that a barrister may enter into a contract with a client even though the barrister has accepted a brief from a solicitor in the matter.
…
[53] A contract between a barrister and a client for the payment of fees at a specified rate does not exclude a contract between the barrister and the instructing solicitor under which the instructing solicitor takes responsibility for the payment of fees at those specified rates. Nor does it exclude the possibility of a contract between the instructing solicitor and a client for the payment of costs by the client including fees at the specified rates for the barrister …
53 It is to be emphasised too that a contract between a legal practitioner, including a barrister, and a client for the provision of legal services is distinct from a costs agreement between them. So much is clear from the Legal Profession Act in s 38I(3) and (4) as to client access, s 173(1) in defining a costs agreement and s 174(1)(c) as to entering into a costs agreement; s 184 makes the distinction clear in sub-ss (1), (3) and (5) as to agreements about costs and, in particular, that such an agreement may form part of a contract for the provision of legal services: see also Wentworth v Rogers [2002] NSWSC 709 in para [17].
54 Given, then, that the Legal Profession Act does not establish a statutory contract between a barrister and a client, it is to ordinary common law principles one is to look to establish the contracting parties and the terms agreed according to the circumstances. However, once that be done, the terms of the legislation require consideration as to their effect on the ability of the barrister to recover fees for the professional services provided. Here, the way in which the action was pleaded, and the primary way in which it was argued, was based on a costs agreement between the plaintiff and the defendant. The alternative submission put during argument, as outlined above, was not, in my view, open on the pleadings. It must, therefore, fail.
55 Even if such alternative submission were available, I am not satisfied in the circumstances it has been shown the plaintiff contracted with the defendant for the provision of legal services. This conclusion is consistent with the reasoning in Dimos v Hanos and in Mednis v Chand. I repeat, such a contract is distinct from a costs agreement. In this case, the plaintiff was briefed by Mr Vella and retained to act for and on behalf of the defendant to provide legal services in various proceedings. It is true the defendant accepted that process initially and continued it for a period of about five years, but there was simply no evidence the parties themselves were in a contractual relationship under which the plaintiff was to provide legal services other than that Mr Vella, as was open to him in providing legal services to the defendant, did so by retaining the plaintiff. Indeed, Mr Vella’s evidence was that he made arrangements with the defendant, and which were accepted by the plaintiff, for the plaintiff’s fees to be paid to him directly by the defendant without Mr Vella’s involvement. Confirmation of this position is found in the plaintiff’s letter of 8 October 1999 to Mr Vella enclosing the schedule of fees to be conveyed to the defendant as disclosure material said to be “provided to establish a costs agreement only, not a contract for legal services under s 38I of the Act.”
56 On this aspect of the effect of the legislation, the decision in Wentworth v Rogers is instructive. That case was concerned with assessment of costs under Div 6 of Pt 11 of the Legal Profession Act but Barrett J dealt with the lawyer’s right to remuneration. I think it helpful for present purposes to cite what his Honour said (in paras [27]-[30]):
[27] … I do not suggest that lawyer and client cannot enter into a binding contract concerning the provision of legal services or that such a contract cannot contain terms fixing the lawyer’s remuneration and giving a contractual right to recover it. Clearly, they can and, as s.184(5) recognises, the terms of any such contract as to remuneration will themselves be a costs agreement. The real point is that terms as to remuneration are susceptible to being overtaken by the costs assessment process in such a way that, in the final result, the remuneration actually applying differs from that agreed.
[28] Where there is no “costs agreement” or any such agreement is void (because not in writing or evidenced in writing), it does not follow that the lawyer has no right to remuneration and the client has no obligation to pay for legal services provided. Where a lawyer does work and the client has the benefit of it, an entitlement to remuneration generally arises. But the lawyer is precluded from taking proceedings for recovery until after a bill of costs complying with the statutory requirements has been delivered to the client: s.192. It is the delivery of the bill of costs that secures to the client or the lawyer (or both) access to the costs assessment process. If there is no assessment, the lawyer will recover according to ordinary contractual principles, subject always to the effect of s.184(4) in making void any terms constituting a “costs agreement”, in which event there is no apparent reason why there should not be recovery upon a quantum meruit.
[30] In such a case, principles of restitution countering unjust enrichment allow recovery of reasonable remuneration. The relevant principles were authoritatively established by the judgments in Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221. The right of recovery proceeds from the requirements of justice as distinct from any implied contract, there being, in the present context, no room left by s.184(4) for the existence of an implied contract or implied term for the payment of remuneration …[29] It is important to emphasise that the only effect of s.184(4) is to obliterate an agreement, which is unwritten, and not evidenced in writing. Because the law regards it as non-existent, the agreement itself cannot be the source of rights and obligations. But nothing in the Act prohibits, expressly or by implication, the making of unwritten costs agreements. Nor does the Act prohibit, expressly or by implication, the recovery of remuneration in the absence of a written agreement – the most it does is to say that if the fee disclosure requirements have not been observed (a quite distinct matter), the right to recover remuneration is dependent upon costs first having been assessed under Division 6 of Part 11. No illegality flows from an unwritten costs agreement or from the provision of legal services in the context of such an unwritten agreement or without any costs agreement at all; it is just that remuneration cannot be claimed under an unwritten agreement because the agreement the parties attempted to make never eventuated, being void from the moment of its supposed inception. The situation is thus one in which services are lawfully provided and lawfully received but in the absence of any contract for payment.
57 In the present case, of course, and as I have said, the action was brought (although disputed by the defendant) on the basis of a valid costs agreement being “an oral or implied agreement” between the parties”. Whether that pleading be made out, in the absence of a costs assessment under Div 6 of Part 11, depends on the evidence and the relevant provisions of the Legal Profession Act, in particular ss 182(2) (proceedings not maintainable for non-disclosure) and 184(4) (contract void if not in writing or evidenced in writing). If there be such a valid agreement then recovery of the fees by the plaintiff will require compliance with the bill of costs provisions in ss 192 (bill to be given), 193 (form of bill), 194 (signing of bill), 195 (delivery of bill) and cl 22A and/or cl 45 of the Regulation, as the case may be (particulars in bill). Those requirements are mandatory in terms and require that a bill be given in the specified form so as to be effective for the commencement and maintenance of proceedings to recover costs: see Conder v Silkbard [1999] NSWCA 459 in para [29] per Beazley JA, with whom Meagher JA agreed and in para [42] per Fitzgerald JA.
58 If no such costs agreement be in fact made out then, in my view, and as Barrett J observed in Wentworth v Rogers, the plaintiff may still have a right of recovery of the fees according to a quantum meruit on ordinary principles of restitution as a counter to unjust enrichment of the defendant in having the benefit of the legal services: see ABB Power Generation Ltd v Chapple (2001) 25 WAR 158 per Murray J, with whom Templeman J and Einfeld AJ agreed. As Barrett J said in Wentworth v Rogers (in para [32]), “the aptness of general restitutionary principles to ground a claim for lawyers’ costs was recognised by the Queensland Court of Appeal (Mc Murdo P, Thomas JA and Mullins J) in Adamson v Williams [2001] QCA 38 where the full statement in the pleading was “[t]he plaintiff claims $9,437.82 for solicitor’s costs and outlays incurred in this jurisdiction from June 1996 to July 1997. An account in taxable form was delivered to the defendant on 25 July 1997.” His Honour considered that “[t]hat would permit a judgment under any cause of action that was established by the facts.” Importantly, Barrett J, in terms of a pleading, added that “[a]lthough the natural inference in such a claim is that based on contract, there is nothing inconsistent in that pleading with the maintenance of a claim based on either contract or quasi-contract. Quasi-contractual claims, including those conveniently described as quantum meruit are now generally classified as restitutionary claims.” Relevant for the present case, his Honour then said (in paras [33]-[34]):
[33] The availability of quantum meruit as a means of recovery where the contract the parties sought to make is void has long been recognised. It is sufficient to refer to an observation of Starke J in Phillips v Ellison Brothers Pty Ltd (1941) 65 CLR 221, supported by a reference to Craven-Ellis v Canons Ltd [1936] 2 KB 403:
“So also it has been held that a person who rendered services under an agreement which was in fact void was entitled to recover for the services rendered upon the basis of a quantum meruit.”
[34] Where there is no operative contract (whether or not because of s.184(4)), lawyers’ remuneration may be recovered on ordinary principles of restitution, apart altogether from the provisions of the Legal Profession Act. The Act does, however, have the effect that, if there has been an assessment of costs under Subdivision 2 of Division 6, it will be that assessment which sets the quantum of recoverable remuneration; and that if the written disclosure requirements of Division 2 have not been observed, such assessment will be a pre-condition to any recovery.
(See also Flett v Deniliquin Publishing Co Ltd [1964-5] NSWR 383.)
59 In summary, I think it to be clear from the authorities that foundational to an action to recover fees for legal services, in the absence as here of a costs assessment under Div 6 of Pt 11 of the Legal Profession Act, for there to be a disclosure of the basis of the costs for those services pursuant to either s 175 or s 176 of the statute. And that is so whether the recovery be sought in contract according to a costs agreement made under s 184(1) or, where there is no such agreement or any agreement is void, based on quasi-contract for a quantum meruit on restitutionary principles. It is plain, however, that by reason of s 184(6) a costs agreement may consist of a written offer accepted in writing or by other conduct; and a disclosure under s 175 or s 176 may constitute an offer for a costs agreement to be made. Whether recovery sought in contract or quasi-contract, the delivery to the client of a bill of costs (which may be described as a memorandum of fees) as laid down by s 192(1) is essential for the recovery of such costs and proceedings to do so are not to be commenced or maintained until at least 30 days have passed since a bill was given in accordance with ss 193, 194 and 195; the bill is to comply with the particulars required by cl 22A of the 1994 Regulation or cl 45 of the 2002 Regulation, as the case may be at the relevant time.
Factual findings
60 Viewing overall the factual development in this matter, it is plain that the claims and denials by each of the parties cannot stand together. What does emerge, however, is that on the plaintiff’s side the various fees memoranda and disclosure statement demonstrate a catalogue of the legal services performed over a five-year period from August 1997 to September 2002. Significantly, and putting aside the long-since settled amount due and paid in 1997 of $4,490, the final fees memorandum of 23 October 2002 notes that the only amount paid to that date was $15,000 (clearly being the payment made on 16 May 2001); and the only other payment the plaintiff said was paid was the $18,000 cash on 4 February 2003 as handwritten on the file copy of this memorandum – those amounts of $4,490, $15,000 and $18,000 add up to the amount of $37,490 the plaintiff said had been paid. On the other hand, the additional payments said by the defendant to have been made totalling $26,680 in July 1999, November 1999, April 2002 and September 2003 were not mentioned in this final October 2002 memorandum or even recorded on the file copy; but, as the file copy noted, the $18,000 payment was made in February 2003. That historical record from the plaintiff’s file supports, in my view, his version of the fees charged to the defendant for the legal services and of the payments made. Again, putting aside the $4,490 amount, the record is direct support that payments received from the defendant were the two amounts only of $15,000 and $18,000 in the total sum of $33,000. The plaintiff presented his evidence in an objective and matter-of-fact way by reference to his files. I have no reason to doubt it.
61 For the defendant’s part, he was wholly lacking in any documentary support, for the cash payments said to have been made by him. As a businessman, it is a challenge to credulity for $26,680 to have been made in four cash payments without any record and where the plaintiff denied they were made. The plaintiff recorded the earlier cash payments of $490, $15,000 and $18,000 totalling $33,490 as he did the earlier $4,000 by cheques. The evidence of Mrs Ofria as to two cash payments each of $15,000 to the plaintiff in his chambers was led to support the defendant’s claim of the second disputed payment of $15,000. However, I found Mrs Ofria’s evidence to be quite unreliable, dependent as she admitted on an unidentified document shown to her by her daughter and where her involvement in the events was very marginal with answers that she “wouldn’t have a clue” and “I don’t know.” Indeed, she deposed that the plaintiff did not give receipts for the two cash payments but then conceded he did give a receipt to the defendant on the first occasion. The defendant denied any receipts were given. No doubt Mrs Ofria was doing her best to recall what occurred but, I am satisfied, at most she witnessed the single cash payment of $15,000 in the plaintiff’s chambers when he gave the defendant a receipt.
62 The defendant’s evidence as to the conduct of his financial affairs, including the payment of some money to the plaintiff, was, to me, unsatisfactory in its logic. It may be taken into account that the defendant during this period was subject to financial pressures with his business and in a situation where he had a number of court cases proceeding, but the vagueness in his answers as to how he dealt with the plaintiff’s fees and allegedly made payments was unimpressive to the point of being doubtful. The most troubling aspect in accepting his evidence was the claimed payments by him, largely in cash, of $64,180 over a five-year period without any knowledge of the basis of the plaintiff’s fees and in the absence of receiving any invoices or receipts – the explanation given in evidence for this that he “never knew anything. I trusted him (the plaintiff) … I never before had any experience (with barristers) … they’re all the same, what would I know” was, I think, simply not credible. Indeed, the defendant said when he gave $5,000 to the plaintiff in September 2003 he considered he had “paid everything … all finished … because the case was over” and yet he claimed no receipt of invoices showing the debt due. During the course of the many proceedings, the defendant said he “always went” to Mr Vella’s office but denied discussing the cases with Mr Vella because “he didn’t know anything, the plaintiff knew, it was between me and the plaintiff alone”; he said he never asked Mr Vella for accounts but paid money when the plaintiff asked.
63 A somewhat disingenuous explanation by the defendant for not receiving mail posted to his home address at Gray Street, Kogarah was the confusion caused if it was addressed wrongly to “Grey” instead of “Gray” Street. In any event, he maintained that although he could read some English he did not understand it very well. Having come to Australia in 1963 at age 25 years this explanation seems hard to accept, particularly having in mind his engagement in business over many years and in light of the plaintiff’s evidence that he had observed the defendant reading documents in English about his court cases and discussing the contents in an intelligent and significant way. The defendant, in my view, was all too ready to supply explanations to suit his case but with little cogency.
64 It was through Mr Vella that the plaintiff forwarded the fees disclosure statement and fees memoranda for attention of the defendant. Mr Vella recalled receiving those documents and, in accordance with his usual practice, said he gave them to the defendant either personally in his office or by post to his address. He agreed to no independent recollection of so doing in the present case and relied on what he usually did. It would perhaps be surprising if a professional in practice with many clients could recall particular events five years earlier but he did recall receiving the documents concerned and there was no reason suggested why he would not have followed what he called “my invariable practice.” I accept that he did so, otherwise the defendant would have been blindly paying large sums of money without any basis.
65 I make the following findings of fact –
(1) At all times relevant to this matter the plaintiff was a barrister with a practising certificate.
(2) Mr Vella was retained by the defendant as his solicitor to provide legal services in relation to a series of court cases in which the defendant was a party over the period from August 1997 to September 2002.
(3) Mr Vella briefed the plaintiff to act for and on behalf of the defendant in the litigation concerned.
(4) The defendant was aware that he was liable to pay fees to the plaintiff for so acting; the plaintiff performed the legal services as instructed by Mr Vella for the defendant.
(5) An arrangement was made between Mr Vella and the parties that the plaintiff’s fees would be paid direct to him by the defendant and not through Mr Vella.
(6) On 8 October 1999 the plaintiff forwarded to Mr Vella to convey to the defendant a schedule disclosing his fees for acting for the defendant so as to establish a costs agreement under the Legal Profession Act with the defendant but not as a contract for legal services.
(7) Mr Vella forwarded by post or personally gave the schedule to the defendant.
(8) From time-to-time thereafter from 14 August 1997 to 23 October 2002 the plaintiff forwarded to Mr Vella fourteen memoranda of fees in the total sum of $86,750.50.
(9) Mr Vella forwarded by post or personally gave each of the said memoranda to the defendant.
(10) The defendant over the period from 7 October 1997 to 4 February 2003 paid the plaintiff a total amount of $37,490, largely in cash, in satisfaction of the debt.
(11) The plaintiff issued receipts to the defendant for the payments made.
(12) The amount of $49,260.50 remains unpaid to the plaintiff from the total due pursuant to the fees memoranda.
(13) There has been no costs assessment under Div 6 of Pt 11 of the Legal Profession Act.
(15) At no stage did the defendant complain to the plaintiff, or to Mr Vella, about the fees charged by the plaintiff for the services provided.(14) By letter dated 15 October 2004 to the defendant, the plaintiff sought payment of the outstanding fees and enclosed the bills of costs concerned.
(16) There was no agreement, express or implied, between the plaintiff and the defendant that the plaintiff would provide legal services, only that the plaintiff agreed with Mr Vella, as it was open to do, that he would provide such services.
(17) The plaintiff offered to the defendant in the written schedule of the basis of his fees to enter into a costs agreement with the defendant.
(18) The defendant did not accept the said offer in writing but availed himself of the legal services provided by the plaintiff on his behalf and for his benefit in terms of the schedule of fees and made substantial payments pursuant thereto in the period May 2001 to February 2003 in the total amount of $33,000; the defendant acknowledged he was liable to pay the plaintiff’s costs for the services provided.
(20) The respective fees memoranda on their face included particulars as to a description of the service provided, the total amount of costs charged, the work done in providing the legal service, the period over which the work was done, the identity of the plaintiff as the person who did the work and the basis on which the costs had been calculated.(19) The memoranda of fees rendered by the plaintiff were either signed by the plaintiff or enclosed with a letter signed by the plaintiff.
Contractual relationship of the parties
66 Putting aside the alternative argument by the plaintiff which I have earlier rejected as to a contract between the parties for the provision of legal services, the primary submission for the plaintiff relied on a costs agreement between the parties as establishing the necessary contractual basis to support the claims for recovery of the fees. In denying the existence of such an agreement as between the plaintiff and the defendant, Mr Nicholls put that the evidence clearly demonstrated a contract between the plaintiff and Mr Vella for the provision of legal services and for the payment of the plaintiff’s fees; counsel took issue with the form of the pleading in the statement of claim to the effect that an “implied agreement could never arise and that the notion of an implied agreement is not known to the law.” Therefore, so the submission went, the plaintiff’s only action for recovery of fees was against Mr Vella and not the defendant. I disagree. However inelegant the pleading as drawn may be, the phrase “implied agreement” is used from time-to-time in judicial reasoning and, as I understand it, is a shorthand way to refer to an agreement formed from the conduct of the parties or the circumstances of their relationship: see eg Wentworth v Rogers in paras [29]-[30].
67 In Carter on Contract (J W Carter, LexisNexis, 2007) the learned author observed (in para [02-060]):
It necessarily follows from the analysis above that in some situations a contract may be formed by conduct which does not necessarily conform to orthodox principles of offer and acceptance. Accordingly, whether or not identifiable offer and acceptance are present, the formation of an agreement may be inferred or implied from the conduct of the parties.
68 Professor Carter continued by outlining the various situations in which a contract may be implied. It is unnecessary to specify all of those, other than to mention Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 where, of present relevance, a contract by conduct was found in the acceptance of work done by the plaintiff following the defendant’s receipt of a printed offer which was never formally accepted by the defendant. So too, in MacRobertson Miller Airline Services v Commissioner of State Taxation (WA) (1975) 133 CLR 125 at 133, Stephen J found a contract by conduct where a passenger accepted the offer of carriage contained in an airline ticket by retaining the ticket without objecting to any of the conditions contained in it. And, even though there be no direct evidence of what was said by the parties, their conduct was consistent only with the hypothesis that an agreement was in fact made by them: see WA Dewhurst & Co Pty Ltd v Cawrse [1960] VR 278 at 282. Those are cases, in my view, which may properly be said to come within the expression “implied agreements”.
69 In the present case, on the facts as I have found them, the schedule of fees from the plaintiff constituted a written offer to the defendant to enter into an agreement as to the costs of the legal services to be provided, through the agreement with Mr Vella to do so, and the conduct of the defendant in availing himself of such services and making substantial part-payment for them in accordance with the schedule, including an acknowledgement he was liable to pay for the services rendered, was an acceptance. In the result, I find a contract between the parties as to costs in the terms alleged by the plaintiff.
70 That finding makes it strictly unnecessary to consider whether the circumstances, in any event, formed the basis for a claim by the plaintiff against the defendant in quasi-contract by way of a quantum meruit. One may incline to the view, as I do in a prima facie way, that such an action would be open and as being reasonably within the present pleading. However, as Professor Carter opined (in para [02-060] n 2 and para [44-160]), “such cases of (genuine) implied contract must be distinguished from situations in which a restitutionary liability arises”: see Update Constructions Pty Ltd v Rozelle Child Care Centre Ltd (1990) 20 NSWLR 251 at 275. If it were required, but it is not, I would wish to hear the parties further on this aspect.
Statutory disclosure of basis of costs
71 I am satisfied, on the facts as found, that the plaintiff’s schedule of fees satisfied his obligations under the Legal Profession Act to disclose the basis of his costs.
72 It was conceded by the defendant that the plaintiff, being retained on his behalf by Mr Vella, had complied with s 176(1) as authorised by s 175(3); plainly, also, the matters specified in s 176(2) to be disclosed were contained sufficiently in the schedule. However, as Mr Nicholls argued, that only gave rise to an entitlement of the plaintiff to look to Mr Vella for payment, but not to the defendant, because there was no disclosure to the defendant by Mr Vella as required by s 175(1) and (3). Even if, as the plaintiff asserted but the defendant denied, there was an agreement between the plaintiff and the defendant directly then a disclosure by the plaintiff to the defendant was required by s 175. In either case, there was, so it was said, no disclosure so that the consequences of non-disclosure under s 182(1) and (2) meant the defendant need not pay the costs, in the absence of a costs assessment under Div 6 of Part 11, and the plaintiff could not maintain the present proceedings.
73 In my view, the combined operation of ss 175, 176 and 182 means that where, as here, a barrister is retained on behalf of a client by a solicitor then the barrister is only obliged, by reason of s 175(3), to disclose the costs to the solicitor under s 176(1), and containing the matters in s 176(2); that disclosure is sufficient to discharge the adverse effect against the barrister of s 182(2) in precluding the maintenance of proceedings by the barrister to recover those costs. It may be admitted that s 175(1) still imposes an obligation on the solicitor to disclose the costs of the legal services to be provided to the client, but, in my view, that is a matter as between the solicitor and the client as not involving the barrister; if the solicitor fails to make a disclosure then, under s 182(1), the client need not pay the costs to the solicitor unless there has been a costs assessment and the solicitor is subject to a charge of unsatisfactory professional conduct or professional misconduct by reason of s 182(4). That is so, I think, as a consequence of the contract between the solicitor and the client, but it cannot affect the operation of the contract between the barrister and the client. If this were not so then, it seems to me, there would be no need to have the separate provisions in sub-ss (1) and (2) of s 182.
74 In any event, in the present case, it has been found in fact that Mr Vella forwarded the plaintiff’s disclosure schedule to the defendant in satisfaction of s 175(1).
Costs agreement
75 An agreement between the plaintiff and the defendant has been found as to costs. The question is whether it was a costs agreement for the provision of legal services according to s 184 of the Legal Profession Act in order to support the giving of bills of costs and recovery of those costs from the defendant.
76 A costs agreement as to the provision of legal services may be made with a client by the barrister retained on behalf of the client by a solicitor: s 184(1)(b). A costs agreement is void if it is not in writing or evidenced in writing: s 184(4). A costs agreement may consist of a written offer that is accepted in writing or by other conduct and, for that purpose, a disclosure under s 175 or s 176 may constitute an offer: s 184(6).
77 Mr Nicholl’s position, as it was in respect of the contractual relationships involved, depended upon any costs agreement being as between the plaintiff and Mr Vella but not the defendant. Counsel relied on this being in accordance with s 184(2) so as to deny any contractual liability on the defendant. Mr Tudehope shortly submitted the circumstances showed a costs agreement pursuant to s 184(1)(b).
78 Having found the existence of an agreement between the plaintiff and the defendant in terms of ordinary contractual principles, I am of the clear view that there is nothing in s 184 to otherwise make inoperative or invalid that agreement which, I am satisfied, is a costs agreement for the purposes of the Legal Profession Act.
Bills of costs
79 Section 192(1) of the Legal Profession Act precludes the commencement or maintenance of proceedings for the recovery of costs by a barrister (or solicitor) in providing legal services unless, as here, a bill of costs (which can be described as a memorandum of fees under s 193(2)) was given to the client in accordance with ss 193, 194 and 195. Mr Nicholls opposition to satisfaction of the statutory requirements rested on the defendant’s case that he had not been given the memoranda concerned and, even if he were, they did not in terms comply with s 193(1) as to the particulars to be included as laid down by cl 22A of the Legal Profession Regulation 1994 or cl 45 of the Legal Profession Regulation 2002 as to those bills delivered after 1 September 2002. Mr Tudehope submitted there was compliance.
80 I have found earlier on the facts that the plaintiff’s memoranda of fees, either signed by the plaintiff or enclosed with a letter which was signed by him, were forwarded to Mr Vella and that he conveyed them to the defendant. Thus, in my view, the requirements of ss 194 and 195 have been met. The only remaining issue concerns the particulars to be included in each bill according to the regulation applicable at the relevant time so as to satisfy s 193(1).
81 Apart from the fees memorandum of 23 October 2002, the earlier memoranda, as has been found, were subject to cl 22A which, in terms, provided:
(1) For the purposes of section 193(1) of the Act, the following particulars are to be included in a bill of costs:22A Particulars in bill of costs
(b) The total amount of the costs charged.(a) A description of the legal service provided.
(c) Any intended claim for interest under section 190 of the Act if the costs are not paid (including the rate of interest).
(d) The work done in providing the legal service.
(e) The period over which that work was done.
(g) The basis on which the costs have been calculated and charged (whether on a lump sum basis, an hourly rate basis, an item of work basis, a part of proceedings basis or other basis).(f) The identity of the persons who did that work (including the position of the persons eg partner, associate).
(h) The facts relied on to justify the costs charged by reference to the above, the practitioner’s skill, labour and responsibility, the complexity, novelty or difficulty of the matter, the quality of the work done or any other relevant matter.
(3) …(2) …
82 Mr Nicholls submitted that the bills here did not comply with cl 22A(h). No submissions were advanced, properly in my view, against compliance of the bills with paras (a)-(g).
83 In Dennis v Cameron [2007] NSWCA 228 in paras [44]-[45] Hoeben J, with whom McColl JA and Handley AJA agreed, considered as correct the interpretation of para (h) given by Johnstone DCJ at first instance in Cameron v Dennis [2006] NSWDC 32 in para [36] as follows:
What sub-clause (h) requires is that the facts justify the costs charged “by reference to the above” or the other matters set out. The “above” is the matters in (a)-(g), all of which were included in the bills. That is sufficient compliance with sub-clause (h) if those facts justify the costs charged, which in my view they did. The other matters in sub-clause (h) need only be particularised if the costs need to be justified on some other basis, such as the practitioner’s skill, labour and responsibility, the complexity, novelty or difficulty of the matter, the quality of the work done or of any other relevant matter. Such additional justification was not required here.
84 I am similarly satisfied here that the plaintiff’s memoranda satisfied the requirements of the paragraph. Therefore, the purposes of s 193(1) have been met so that s 192(1) has been observed in relation to them to enable recovery proceedings.
85 Different considerations arise in relation to the fees memorandum of 23 October 2002. As indicated earlier, the inclusion in that memorandum of work done from 9 August 2000 to 29 August 2002 is subject to cl 22A and, so, the requirements of s 192 are met as to the amounts claimed in the sum of $10,500 plus GST of $1,050, a total of $11,550. However, as to work done in the period from 2 September 2002 to 27 September 2002 in the sum of $14,500 plus GST of $1,450 – a total of $15,950 – the provisions of cl 45 of the 2002 Regulation apply. In terms, that clause in sub-cl (1) was relevantly consistent with cl 22A(1) but it contained the following additional requirement for particulars to be included in a bill of costs:
(d) a statement that the client may apply to have the costs assessed under Part 11 of the Act, but that if the costs have been wholly or partly paid, the application must be made within 12 months after the client is given the bill of costs,
86 Paragraph (d) was amended with effect from 22 November 2002 by the Legal Profession Amendment (Transitional Provisions) Regulation 2002 by repeating the original para (d) as applicable in the case of a bill of costs given to a client; but it added, in the case of a bill given by a barrister or solicitor retained by another barrister or solicitor to act on behalf of a client and the bill is given to that other barrister or solicitor, that the bill include a statement that the barrister or solicitor who is given the bill may apply to have the costs assessed under Pt 11 within 30 days after the bill is given.
87 It is plain that the memorandum of fees of 23 October 2002 did not satisfy para (d) of cl 45(1) either in its original or, to the extent necessary, its amended form because there was no relevant statement as to an assessment of costs. Therefore, the bill in respect of work done on and after 1 September 2002 did not comply with s 193(1) and, so, the mandatory requirement of s 192(1) has not been met. In the result, my view is that the plaintiff is unable to commence or maintain the proceedings with respect to the amount of costs concerned, namely, $14,500 plus GST of $1,450 in the total sum of $15,950. The amount claimed by the plaintiff in this action must be reduced accordingly.
Conclusion and orders
88 For the foregoing reasons, I conclude that the plaintiff’s case has been established for recovery of unpaid fees from the defendant pursuant to the bills of costs rendered in the period from 14 August 1997 to 23 October 2002 in the total sum of $86,750.50 less payments made of $37,490 and less $15,950 in respect of work done after 1 September 2002 as covered by the memorandum of fees of 23 October 2002. The resultant amount due is $33,310.50 to which interest should be added at the statutory rates from the date of filing the statement of claim on 16 December 2005 to date. Interest is calculated at $5,813.37 giving a total sum due to the plaintiff of $39,123.87.
89 The plaintiff is entitled to a verdict against the defendant in the amount of $39,123.87, inclusive of interest.
90 I will hear the parties on costs before making final orders.
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