Citilawyers Pty Ltd trading as Citilawyers v Tomaras

Case •

[2025] NSWSC 209

•

17 March 2025

No judgment structure available for this case.

Supreme Court


New South Wales

  • Amendment notes
Medium Neutral Citation: Citilawyers PTY Ltd trading as Citilawyers v Tomaras [2025] NSWSC 209
Hearing dates: 12 February 2025
Date of orders: 17 March 2025
Decision date: 17 March 2025
Jurisdiction:Common Law
Before: Harrison AsJ
Decision:

(1) The appeal is upheld

(2) Costs are discretionary. Normally costs follow the event.

(3) The proceedings are remitted to the Local Court to be determined according to Law.

(4) Defendant is to pay the plaintiff’s costs on an ordinary basis.

Catchwords:

APPEALS — Procedural fairness — Hearing rule – failure to allow cross examination -

Legislation Cited:

Civil Procedure Act 2005 (NSW) s 100

Legal Profession Uniform General Rules 2015 (NSW), s 72A

Legal Profession Uniform Law 2014 (NSW), 174(1), s 178

Cases Cited:

AAI Limited trading as GIO v Amos [2024] NSWCA 65

Kioa v West (1985)159 CLR 550; [1985] HCA 81 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104

Papanikolaou v R; Tomaras v R [2021] NSWCCA 135

Rialto Sports Pty Limited v Cancer Care Associates Pty Limited [2022] NSWCA 146

Sargent v ASL Developments Limited [1974] HCA 40

Texts Cited:

Nil.

Category:Principal judgment
Parties: Citilawyers Pty Ltd trading as Citilawyers (Plaintiff)
Con Tomaras (Defendant)
Representation:

Counsel:
B Williams (Plaintiff)
Self-Represented (Defendant)

Solicitors:
Citilawyers Pty ltd. (Plaintiff)
Self-Represented (Defendant)
File Number(s): 2023/00314417
Publication restriction: Nil

JUDGMENT

  1. This judgment involves an appeal from the Local Court where a law firm sought payment of legal fees from its former client.

  2. The plaintiff is Citilawyers Pty Ltd trading as Citilawyers (“Citilawyers”) and was represented by B Williams of counsel. The defendant is Con Tomaras (Mr Tomaras). He appeared self-represented at the hearing as he did in the Local Court. The parties relied on a court book comprising of two volumes (Exhibit’s A1 and A2). Both Citilawyers and Mr Tomaras relied upon written submissions. In short, Mr Tomaras’ submissions agreed with Magistrate Towney’s (“the Magistrate”) verdict. In essence he sought that the Magistrate’s decision be affirmed.

  3. At the hearing before me, Mr Tomaras made wide-ranging submissions. He reiterated what he had submitted before the Local Court Magistrate, that Mr Hector Ekes (Mr Ekes) was an agent of Citilawyers. He also stated that in his trial in the District Court before P. Hock DCJ, he told both his counsel D Brezniak and his solicitor Mr Ekes that he did not want to use them at his appeal on the basis that:

“…there was clearly some problems because we presented to Justice Hock that there was a problem because Mr Ekes’ junior was speaking to the jury, to the juror, and that was not admitted until late in the trial, and it was a fourteen week trail” (T. p19, [14]-[17]).

  1. Before me, Mr Tomaras initially alleged that it was Mr Ekes who spoke to a juror, but then changed it to a junior lawyer named Chelsea, who’s surname he had forgotten. Mr Tomaras claimed that it was she who was in communication with one of the jurors.

  2. As this is an extremely serious allegation to make, I read the decision of Papanikolaou v R; Tomaras v R [2021] NSWCCA 135. There was no mention made of it in the Court of Criminal Appeal’s (“CCA”) judgment.

  3. Mr Tomaras also alleged that T Woods (“Mr Woods”) of counsel did “none of the work”, however, Mr Woods is recorded on the CCA judgment as representing Mr Tomaras.

  4. In this Court I reminded Mr Tomaras that his statements were not evidence, for example, in this exchange,

HER HONOUR: Yes, and it’s not evidence—

RESPONDENT: No.

HER HONOUR: --it’s just you telling me an account, it’s definitely not evidence (T. p19 [25]).

  1. On 6 September 2023 after the Local Court hearing concluded, the Magistrate delivered an ex-tempore judgment. Her Honour concluded at [128]

“As the cost agreement stated that all professional fees were covered by legal aid and there is no evidence before the court to allow it to find on the balance of probabilities there was any updated information to the defendant, the claim has been dismissed.”

  1. Her Honour entered judgment in favour of the defendant Mr Tomaras.

The amended summons

  1. By way of amended summons filed 26 September 2024, Citilawyers appeals from the whole decision of her Honour, the Magistrate in Local Court proceedings 2022/00085893 delivered on 6 September 2023 seeking orders that,

  1. Appeal be allowed.

  2. Judgment of the court below be set aside.

  3. In substitution of the orders made by the Magistrate on 6 September 2023, the Court make the following orders:

  1. Judgment be entered for the Plaintiff for:

  1. The amount of $26,090.68 in unpaid legal fees

  2. Costs calculated payable for recovery of a lump sum debt; and

  3. Interest pursuant to s 100 of the Civil Procedure Act 2005

Issues that arise on this appeal

  1. Citilawyers submitted that the issues that arise on this appeal are:

  2. Whether the Magistrate erred

  1. by holding that the costs agreement imposed a positive obligation upon the plaintiff to inform the defendant if Legal Aid would not cover his professional fees, failing which the plaintiff could not recover its legal fees from the defendant;

  2. by failing to advert with the plaintiff's argument in relation to whether application of section 72A of the Legal Profession Uniform General Rules 2015 (NSW) (“LPUGR”) meant that section 178(1) of the Legal Profession Uniform Law 2014 (NSW) ("LPUL")

  3. by failing to engage with the plaintiff's argument that the plaintiff had a quantum meruit claim for the reasonable value of the legal services it performed for the defendant.

  4. by failing to provide the plaintiff with procedural fairness at the hearing of the Local Court proceedings at first instance;

  5. by impermissibly taking into account oral evidence from the defendant in reaching her Honour's decision.

  1. In oral submissions, counsel for the plaintiff stated that appeal grounds 3 and 4 overlap and should be dealt with together then appeal ground 1 followed by appeal ground 2.

The costs agreement dated 12 March 2021

  1. On 12 March 2021 the costs agreement between Citilawyers and Mr. Tomaras was signed by Mr. Tomaras. On 10 April 2021, Mr Tomaras deposed that he received a copy of the costs agreement.

  2. It is common ground that Mr Tomaras signed the costs agreement and that on 10 April 2021 Citilawyers sent Mr Tomaras a copy of its cost’s agreement by email. The costs agreement provides,

“Clause 2:

At this stage the matter all professional fees are covered by Legal Aid, although we note your instructions that this may be subject to change. In the instance that we receive private funding from you, we will charge you professional fees for the work we do based on hourly rates."

Clause 3:

Currently, all disbursements and internal expenses are covered by Legal Aid. In the instance that we receive private funding from you, we may charge you for disbursements ...

Clause 4:

At this stage the matters expenses are covered by Legal Aid, although we note your instructions that this may be subject to change. If in the instance we receive private funding from you, we will provide you with an estimate of our professional fees, disbursements and internal expenses"

General Terms clause 2:

You may accept the Costs Disclosure and Costs Agreement by

(a) signing and returning this document to us; or

(b) continuing to instruct us. Upon acceptance you agree to pay for our services on these terms.

General Terms clause 11:

We may cease to act for you or refuse to perform further work, including:

(a) while any of our tax invoices remain unpaid;

(b) if you do not within 7 days comply with any request to pay an amount in respect of disbursements or future costs.

General Term clause 12:

You may terminate our services by written notice at any time. However, if you do so you will be required to pay our costs incurred up to the date of termination."

The Proceedings in the Local Court

  1. By statement of claim filed 25 March 2022 in the local Court, Citilawyers sued Mr Tomaras to recover unpaid legal fees and disbursements, as set out in its tax invoice dated 30 June 2021. (CB 261)

  2. Citilawyers alleged that they had represented Mr Tomaras in his appeal before the CCA, pursuant to the costs agreement and disclosure dated 10 April 2021 between the plaintiff and the defendant.

  3. On 3 May 2022, in the Local Court, default judgment was entered in favour of Citilawyers in the sum of $28,178.05 against Mr Tomaras. Mr Tomaras had not filed a defence in the requisite time.

  4. No enforcement action has been taken as at 9 September 2022.

Notice of motion to set aside default judgment

  1. On 9 September 2022, Mr Tomaras filed a notice of motion seeking to set aside the default judgment entered on 3 May 2023. He relied upon his supporting affidavit also sworn on 9 September 2022 where he deposed,

“In or about mid to late March 2021 I had the following conversation prior to receiving the cost agreement with Vatche Janoyan (the Principal of Citilawyers), Matthew Hoskin (an employed solicitor at Citilawyers) and Hector Ekes of Citilawyers:

I said: to make it clear, I am in gaol, I have no money, no assets zip, can you run this with Legal Aid.

Matthew said: most of crime work is done through Legal Aid and on the panel.

Vatche said: Matthew will organise everything don't worry.

On or about 10 April 2021 I received a cost agreement which is attached to the Statement of Claim, which clearly states that the matter would be funded by Legal Aid.

I have never received anything contrary that the Legal Aid application was unsuccessful or that I would have to fund the litigation.

I have never received an estimate of the costs if not run by Legal Aid.

I have never received a tax invoice in taxable form despite numerous requests.

At the day of the Appeal, the only people in attendance, was my barrister, Matthew and Hector.

After my initial conversation deposed above I have never spoken or heard from Vatche in this matter other than as deposed below.

On 5 May 2022 I had the following conversation with Vatche:

I said:   I received your claim I am out of gaol on 25 May this month, I have asked for invoices several times which you still have not provided, I don't want a judgment against me. You also talking directly to John [Tomaras Solicitor] my brother.

Vatche said: I spoke to John, Con nothing is happening until you get out and we sit down face to face and sort this out, as also told your brother. I promise you nothing is happening.

I said: I have never received any invoices from you, and we have agreed to meet face to face and that you are doing nothing until I get.

Vatche said: Agree we deal with this when you get out.

I have left several messages for Vatche after my release which have not returned.

On September 2022 I contacted the Court to find out the status of the matter and was informed that Default Judgment was entered on 3 May 2022.

I say that Vatche lied to me in our telephone conversation on 5 May 2022 knowing that he already filed for default judgment on 3 May 2022.”

  1. I accept that Mr Tomaras deposed of a conversation that took place mid to late March 2021 between Mr Janoyan, Mathew Hoskin (“Mr Hoskin”) and Mr Ekes of Citilawyers where he asked can you run this with legal aid and Mr Janoyan said that Mathew will organise everything and not to worry.

  2. Mr Tomaras attached a draft notice of defence to his motion. The Local Court set the default judgment aside.

  3. The affidavit is the only one that Mr Tomaras filed in the entire Local Court proceedings. Mr Tomaras failed to comply with directions to file and serve affidavits prior to the hearing. Therefore, the only evidence that Mr Tomaras could rely upon as evidence, was the contents of his affidavit sworn on 9 September 2022.

Mr Tomaras' Defence

  1. In his defence Mr Tomaras pleaded

  1. I deny paragraph 1 of the statement of claim and say I am not in indebted to the plaintiff at all.

  1. Particulars

  1. Pursuant to the cost agreement dated 10 April 2021 (which is attached to the statement of claim), the first plaintiff confirmed that my matter was being run pursuant to a Legal Aid grant.

  2. In the alternate I have never received:

  1. any cost updates from the first plaintiff that the matter was not run pursuant to a Legal Aid grant nor that my application for Legal Aid was refused;

  2. In the alternate I have never received:

  3. estimate of costs to run my matter from the first plaintiff in the premise that my Legal Aid application was refused (which he never advised the first defendant); and

  4. itemised tax invoices despite numerous requests. (CB 27-28)

  1. Mr Janoyan’s invoice for Citilawyers’ legal costs was in the sum of $15,090.68. To that amount was added Mr Woods’ counsel fee in the sum of $11,000.00. Mr Woods acted for Mr Tomaras during the appeal in the CCA.

The hearing in the Local Court

  1. During the hearing in the Local Court, Citilawyers relied upon the affidavits of Mr Janoyan, the principal solicitor of Citilawyers, and Mr Hoskins a solicitor employed by Citilawyers, affirmed on 5 October 2022. Mr Jonoyan gave evidence and was cross examined. By the time of the hearing, Mr Hoskin had left the firm and Mr Janoyan’s evidence is that Mr Hoskin’s laptop became unavailable, so he was unable to obtain copies of documents that were stored on Mr Hoskin’s laptop.

  2. The hearing in the Local Court took place on 6 September 2023. Mr Tomaras was self-represented in the proceedings, Citilawyers was represented by T. Woods of counsel.

  3. Mr Janoyan relied upon his affidavit dated 5 October 2022. He gave evidence and was cross examined. At [2]-[9], he deposed,

On or about 25 January 2021 Hector Ekes, a former solicitor who was the principal of GE Law Pty Ltd and former acquaintance of mine, and I had a conversation to the effect.

Hector: I have a new matter that I can refer to Ctilawyers. Do you know Con Tomaras.

Me: John Tomaras's brother? Yes, I do, What is the matter about?

Hector: I ran his trial for an arson charge and we were, unsuccessful. He wants to do an appeal for the conviction. He is currently locked up.

Me: will arrange an AVL conference with him,

From 24 February 2021, Matthew Hoskin, a solicitor employed by the plaintiff and formerly for GE Law Pty Ltd, arranged a visit to see Con Tomaras.

On or about 8 March 2021 Matthew attended an AVL conference with Mr [Daniel] Brezniak, of counsel, and Con Tomaras to take instructions from Mr Tomaras in relation to appealing his conviction I was unavailable to attend but asked Mr Hoskin to attend with Daniel and report back to me.

In response to paragraph 2 of the affidavit of Con Tomaras dated 9 September 2022 ("Tomaras Affidavit"), I did not have a conversation with Con at all.

Following the meeting Mr Hoskins debriefed me about the conference and I instructed Mr Hoskins to send a costs disclosure and agreement to Mr Tomaras.

Where a client is aided by Legal Aid, a costs disclosure is not sent from the firm to the client. Rather, after Legal aid is granted the law firm with the grant claims its fees from Legal Aid directly.

On 18 March 2021 we filed a Notice of Change of Solicitor to appear in the matter (CB 36).

  1. On or about 30 June 2021 Citilawyers generated an invoice in the amount of $15,090.68, which does not include Mr Woods’ fees in the amount of $11,000.00. Mr Janoyan believed that Mr Woods’ fees had already been paid by Mr Ekes, on behalf of Mr Tomaras.

  2. On or about 2 December 2021, Mr Janoyan become aware that Mr Woods’ fees in the amount of $11,000.00 had not been paid.

  3. The following exchange took place when Mr Tomaras cross examined Mr Janoyan:

Q. Mr Hector Ekes, was he an agent for Citilawyers and did you ever receive any invoices from Hector Ekes or his company?

A. In relation to your matter, no. Hector Ekes ran a debt recovery business or was part of debt recovery business that was owned by his brother at the time and he referred his previous legal matters, cause he was no longer practising, to our firm, one of them being your appeal matter, who he referred to us and as far as invoices or work, he's never been employed by us. He - he didn't invoice us in - in relation to your matter, no.

Q. So there has been no correspondence in your firm with respect to my matter with Hector Ekes and so your registered solicitor, who you employed, Mr Matthew Hoskin. Yes or no.

A. I didn't understand the question.

Q. Mr Matthew Hoskin, who's your registered solicitor—

A. Mm.

Q. --working for Citilawyers--

A. Mm.

Q. --were there any communication pertaining my case between Mr Hector Ekes and Mr Matthew Hoskins? Yes or no.

A. There was, yes. There was.

Q. So why did you just say before that you know there was no - no relevance and no Mr Hector Ekes did not do any work with respect to your case?

A. I said he didn't invoice us in relation to your work. He didn't - he didn't get

paid. He - he wasn't--

Q. Your - your story keeps changing.

A. --employed by Citilawyers. No, no. He wasn't employed by Citilawyers and I'm explaining it to you. He passed on information as your agent, as - as - as principal agency. He was acting as your agent (CB107, [5]-[37]).

  1. And

Q. Okay. Was there written or email communication between your employed solicitor, Matthew Hoskin, and your agent, Mr Hector Ekes?

A. I believe there was (CB109, [25]-[27]).

  1. During the re-examination, Mr Janoyan was asked and answered the following questions:

Q. Could you please explain the tax invoices which are between Citilawyers and Mr Ekes?

A. So Hector Ekes worked for GE Debt Recovery Services after he stopped working as a lawyer. So that was his brother's business at the time and I believe he became a director of and he referred a lot of matters that he was previously working on when he was running a legal practice to us. So we picked up those matters and there was in circumstances certain work done by Hector which he invoiced us for, but nothing to do with Mr Tomaras' - so he didn't invoice us for any - any of the work that he did for - for Mr Tomaras.

HER HONOUR:

Q. Okay, so he worked for GE Recovery Services which was his brother's business and he referred matters from his previous practice to you.

A. Correct.

Q. And other matters. He worked for you in other matters that were not--

A. No, no. He was never employed or worked directly for Citilawyers. He referred matters to us and GE 2 Recoveries, sorry, GE Recoveries sent us invoices. I mean, ultimately, it came from Hector, but it came from GE Recoveries.

Q. Sorry, I'm getting mixed up now because I think you were asked initially. Let me have a look. "Was Hector ever an agent or employed by Citilawyers." I think you said no repeatedly.

A. He was never employed, no.

Q. Well he wasn't employed. Was he an agent?

A. No, he - he wasn't a direct agent. He referred matters from GE Recoveries and he did certain work--

Q. What's the "certain work"?

A. --GE Recoveries. For example, in - in other matters, which I don't think it's relevant, but to answer your question, your Honour, he - he helped, for example, get an affidavit and - and, you know, running around and doing things like that, but these are completely unrelated to Mr Tomaras' matter.

Q. But he didn't limit his question to that. He didn't say was he employed or paid for any work that you did on his case. He said was he employed or an agent to you. So if you're paying him to get an affidavit, what would you call that?

A. So, we paid GE Recoveries. We didn't pay Mr Hector Ekes.

  1. In the Local Court at the end of the hearing, Citilawyers’ counsel S Thomson handed up his written submissions. He also made oral submissions. They are as follows,

  1. Mr Hector Ekes was the defendant's agent pursuant to the principle raised in Sargent v ASL Developments Limited [1974] HCA 40. It was the defendant's agent and previous solicitor, Mr. Hector Ekes who acted in relation to the grant of Legal Aid and told the plaintiff that Legal Aid had already been granted on 22 March 2021.

  2. The defendant was aware that his grant of Legal Aid had been rejected.

  1. The onus is on Mr Tomaras to establish that on the balance of probabilities that the plaintiff contravened its disclosure obligations under section 174(1) and 178 of the LPUL.

  2. Citilawyers has fulfilled its obligation under LPUL regarding the disclosure of its costs estimate and even if the Court were to accept that the defendant has established on the balance of probabilities that one of the disclosure requirements of the LPUL hadn't been met, section 72A of the LPUGR shall apply, which allows Citilawyers to commence proceedings against the defendant to recover its unpaid costs.

  3. Citilawyers issued a bill of costs to Mr Tomaras, which provided a rectification of any failing to give costs estimate insofar as that's practicable.

  4. Even if the Court found that the cost agreement was invalid, the Court still ought to award equitable compensation to the plaintiff in the amount of the invoice and counsel's disbursement as the work has, in fact, been performed for the defendant and he's taken the benefit of that work. The defendant would be unjustly enriched and so equity would intervene to require the payment of counsel's and the plaintiff's fees on a quantum meruit basis.

  1. Mr Tomaras also provided oral submissions at the end of the hearing. Citilawyer’s submitted that,

  1. It cannot be verified whether the emails or things were sent to him Citilawyers employee's laptop is not present;

  2. He admitted that he received an original email giving him the "quote".

  3. He only received a hard copy of Citilawyers’ statement of claim when he was at Mary Wade Correction Centre.

  4. Mr Ekes was not his agent as Citilawyers did not provide email correspondence showing somewhere the defendant was communicating with Mr Ekes with respect to his appeal.

  5. Citilawyers did not provide Mr Tomaras with tax invoice straight after the appeal.

  1. The Magistrate ex-tempore Judgment dated 6 September 2023, reads as follows:

“The plaintiff, Citilawyers Pty Limited pursue a debt against the defendant, Mr Tomaras, in relation to legal work done.

By way of background, the defendant engaged the plaintiff to act in an appeal by the defendant against a criminal conviction for arson. Of relevance, Mr Hector Ekes, hereafter called Mr Ekes, was the defendant's solicitor at some stage or at all stages of the original trial.

The defendant engaged the plaintiff in relation to an appeal from this conviction. The following briefly sets out background facts.

On 10 April 2021, the plaintiff sent the defendant care of Mannus Correctional Centre a document titled, "Disclosure of costs and legal services" and cost agreement. This document was signed by the defendant on or about 12 March 2021.

On p 2, para 2, the document was titled, "Professional fees." The document went on to state the following. "At this stage the matter all professional fees are covered by Legal Aid although we note your instructions that this may be subject to change." There is no substantive evidence before the Court of an updated cost agreement or cost disclosure. Both the plaintiff and defendant have given sworn evidence in affidavits before the Court in relation to various discussions between them and between them and Mr Ekes. These conversations directly conflict with each other.

The evidence is not sufficient to establish either case. There is no evidence before the Court from Mr Ekes, such as an affidavit or statement. Parties do agree that Legal Aid was never granted.

In short, the plaintiff has submitted that the cost agreement sent to the defendant on 10 April 21 did not create an obligation on their part to provide further information to the defendant about Legal Aid funding. The plaintiff has submitted that Mr Ekes was an agent for the defendant and that they acted on advice from Mr Ekes that Legal Aid had been approved. In addition, the plaintiff claims they had informed Mr Ekes of fee structure and cost assessment and therefore they had informed the defendant.

The defendant submitted that Mr Ekes was his initial solicitor in his criminal trial, but he was not his solicitor and or agent at the time when the defendant engaged the plaintiff. The defendant relies heavily on the cost agreement dated 10 April 21.

The Court notes that the principal solicitor for the plaintiff, Mr Janoyan, appeared as a witness and gave evidence on 6 September 23. In cross-examination, the defendant asked Mr Janoyan if Mr Ekes was employed by the plaintiff or ever worked as an agent paid for the services by the plaintiff and Mr Janoyan clearly said no.

When the defendant later showed Mr Janoyan invoices for various amounts up to $12,000 during the period from February 21 to April 21, Mr Janoyan submitted that these were payments to the business that Mr Ekes worked for. rather than to Mr Ekes. Mr Janoyan also stated that Mr Ekes did not work on the defendant's case, appearing to clarify his earlier evidence.

The defendant actually submitted that Mr Ekes actually worked as an agent for the plaintiff during this period in that he was employed to do paid work for the plaintiff. The use of the word "agent" appears to have arisen at the final hearing and not before. However, the Court will deal with this matter for the sake of completion. The Court notes that the plaintiff filed a notice of change of solicitor with the Supreme Court of New South Wales on 18 March 2021.

The notice listed Mr V Janoyan of Citilawyers and is signed by Mr Matthew Hoskin. There is no mention of Mr Ekes being the defendant's solicitor or agent.

The plaintiffs have also relied on evidence that their former employee Mr Hoskin, informed the defendant of the cost structure and cost estimate as he had been instructed to do by Mr Janoyan as stated in his affidavit of 5 October 22. It was put to the Court that it should accept this evidence that it had occurred as the employee were - as he was instructed to do so by his principal. Apart from the submissions made by the plaintiff, there is no evidence before the Court to support a finding that Mr Hoskin had provided an updated cost agreement or cost disclosure as directed, such as a copy of the relevant letter or email, a copy of a register of outgoing letters or email or a record of the defendant having received such. As such, the Court finds this evidence has not been established.

In addition, the plaintiff also submitted that Mr Hoskin was to return to them and provide relevant documentation, being emails or correspondence from his laptop but that he's failed to do so. This would make it more difficult to accept that he had given an updated cost agreement or disclosure, simply on the basis that he was told to do so.

In submissions made on the day of hearing, the plaintiff also submitted they were entitled to rely on the letter dated 10 April 21 as subclauses made clear to the defendant who was liable for any payments. The plaintiff referred to cl 2, 3, and 4 which in summary state the defendant accepts the document by signing, this is not in dispute, and that the plaintiff may cease to act for the defendant if they are not paid. However, the evidence before the Court is that the plaintiff continued to act for the defendant for the entirety of the matter. The clauses also state the defendant may terminate the plaintiff’s services at any time. However, the evidence before the Court is the plaintiff did not terminate the services and as such, reading these clauses adds little to the plaintiff’s claims.

Having considered the evidence in its entirety, the Court finds the following. A cost agreement dated 10 April 2021 was sent from the plaintiff to the defendant. The cost agreement stated the following, "At this stage the matter, all professional fees are covered by Legal Aid although we note your instructions that this may be subject to change."

Although a private law firm will not usually incur an onus or responsibility to advise their private clients on whether or not Legal Aid has been granted, denied or withdrawn, the use of the words in this letter have created a positive obligation on the plaintiffs to advise the defendant if things changed and or if he were no longer or never was entitled to Legal Aid.

There is conflicting evidence as to the conversation between the parties and third parties, including Mr Ekes, about conversations that took place in relation to fees. The evidence before the Court is insufficient to make a finding of fact relying on these conversations as they are in direct contradiction to each other.

There is no evidence from the alleged agent, Mr Ekes, either confirming or denying that he was acting for the defendant nor is there any positive evidence that he was acting for the defendant such as a cost agreement covering the relevant period of time. In addition, there is evidence before the Court that Mr Ekes had a professional relationship with the plaintiff at the time was receiving payments from them.

Noting that the defendant does not have a positive obligation to establish a relationship between the plaintiff and Mr Ekes, this does not influence the outcome. However, the plaintiff has failed to show that Mr Ekes was acting as an agent or otherwise for the defendant.

In addition, the change of solicitor document filed with the Supreme Court lists the plaintiff as the defendant's solicitor. There is no evidence before the Court to allow it to find on the balance of probabilities that there was any update to the cost agreement dated 10 April 21. As such, this cost agreement will be accepted by the Court."

  1. As stated by her Honour, Mr Ekes was not called to give evidence in the Local Court by either party. Since the hearing in the Local Court Mr Ekes has subsequently passed away.

  2. I will refer to appeal grounds 3 and 4 together then ground 1 followed by ground 2 together.

Appeal Grounds 3 and 4 – was procedural fairness afforded?

  1. Appeal grounds 3 and 4 of read as follows,

  2. Appeal Ground 3

  1. The Magistrate erred on a question of law by failing to provide the plaintiff with procedural fairness.

Particulars

  1. Her Honour allowed the defendant to give oral evidence in the hearing, without the defendant having produced any evidence prior to the hearing.

  1. The defendant failed to comply with the directions and orders made by the Local Court for the filing and service of evidence prior to the hearing date.

  2. The defendant did not file or serve any evidence prior to the final hearing.

  3. The defendant, who was representing himself, was permitted to give and in fact gave, oral evidence from the bar table at the final hearing

  4. The plaintiff was denied procedural fairness in relation to the defendant's evidence from the bar table as the plaintiff was not provided with requisite notice and was taken by surprise by the evidence. The plaintiff was denied a fair opportunity to respond to the defendant's evidence in the circumstances.

  1. During the final hearing in the Local Court, the plaintiff was not provided with an opportunity to cross-examine the defendant in relation to the evidence produced by him during the final hearing.

Appeal ground 4

  1. That the Magistrate erred on a question of law by impermissibly taking the defendant's oral evidence into account in reaching her Honour's decision.

Particulars

  1. The defendant did not file or serve any evidence in compliance with the case management orders and/or directions of the Court.

  2. The Court did not give the defendant leave to rely on any evidence that was non-complaint with case management orders.

  3. No evidence from the defendant was formally admitted into evidence at the final hearing.

  4. Despite sub-paragraphs a,b,c and d above, the defendant was permitted to give, and in fact gave, oral evidence from the bar table.

  5. The defendant's oral evidence from the bar table, was taken into account by the Court in reaching its decision.

The Law- Procedural fairness

  1. In Kioa v West (1985)159 CLR 550 at 587; [1985] HCA 81 at [33]

"In this respect the expression "procedural fairness" more aptly conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case. The statutory power must be exercised fairly, that is, in accordance with procedures that are fair to the individual considered in the light of the statutory requirements, the interests of the individual and the interests and purposes, whether public or private, which the statute seeks to advance or protect or permits to be taken into account as legitimate considerations" 

  1. And

"the need to bring to a person's attention the critical issue or factor on which the administrative decision is likely to turn so that he may have an opportunity of dealing with it"

  1. In AAI Limited trading as GIO v Amos [2024] NSWCA 65, Adamson JA, at [53], had the following to say about the scope of procedural fairness:

“Procedural fairness depends, in part, on context. For example, in a judicial or arbitral setting, procedural fairness generally requires a hearing, whereby parties have an opportunity to put their cases to relevant witnesses in cross-examination and in submissions to an independent arbiter or judge.”

  1. In the appeal hearing before me, Counsel for Citilawyers referred to portions of the transcript in the Local Court where the following exchanges took place between the parties and the Magistrate at [5]-[10].

“WILLIAMS: …her Honour asks, noting again, as I have said, not in the witness box or under oath:

‘HER HONOUR: Okay, so you're saying that they employed him, you didn't employ him.

DEFENDANT: That is one hundred percent correct, your Honour.

HER HoNOUR: Okay.’ (CB 106)

WILLIAMS: Then at the paragraph beginning at line 28 of page 106

‘DEFENDANT: …Again I would like to state that he was working for Citilawyers as an agent, not for me, hence if they are my lawyers they have a duty of care...’

WILLIAMS: Et cetera, but the real point is he's giving evidence about Mr Ekes and the question of agency. That's not submissions that are being made, that's evidence on the nature of that relationship.

HER HONOUR: I understand what you're saying.

WILLIAMS: Then just for completeness, at 120 down the bottom at 48:

‘DEFENDANT: …Mr Ekes was an agent working for Citilawyers, ma'am. ‘That's – that’s what I wish to state, okay’ (CB 120)

…

WILLIAMS: And then on page 123 right at the top beginning at line 1,

‘HER HONOUR: So you're saying that you did not have an agreement with him?’

DEFENDANT: I did not, I did not.

HER HONOUR: At the end of your trial?

DEFENDANT: ‘Yes, that's correct.’ (CB 123)”

(T. p12-13 [35-50] [5-30])

  1. Counsel for Citilawyers submitted that in the Local Court, Citilawyers was denied the right to cross-examine Mr Tomaras, and referred to the following exchanges:

“WILLIAMS: That's right, and then counsel for the plaintiff is objecting I would say--

HER HONOUR: When he says:

‘THOMSON: ‘Is it submission or is it new evidence at this point?’ (CB121)

WILLIAMS: That's correct.

HER HONOUR: So he has raised it there.

WILLIAMS: That's right, and then her Honour has--

HER HONOUR: This is where you say I think he is referring to his statement, isn't he, and there wasn't one?

WILLIAMS: That's right. I mean, her Honour hasn't completely made something up, of course, there was a statement in terms of the setting aside of the default judgment, but there's nothing in terms of a statement on any of these substantive points. Your Honour has just read--

HER HONOUR: Yes, that's right, there is a statement when he got the default judgment set aside, but it doesn't mention anything about the agency at all--

WILLIAMS: Not at all, not at all, and, as I say, this clearly informs her Honour's decision which I think makes the strength of the ground particularly strong, but, even if that were not the case, it would be a denial of procedural fairness as articulated in the summons--

HER HONOUR: Thompson on the next page at 122 says at line 23:

‘THOMSON: This is all new evidence.’ (CB 122)

WILLIAMS: That's right. (T. p14 [5]-[35])

  1. So, at the hearing when I asked,

“So he did [counsel for Citilawyers] draw it [the denial of procedural fairness] to the magistrate's attention.” (T. p14 [40])

  1. Mr Williams answered for Citilawyers,

“Indeed, and the question of him being under oath because the defendant is using language, and I appreciate he is - I'm not having a go at Mr Tomaras for using that kind of language, it's the kind of language that one would expect to be used in a court, but he's using the language consistent with someone giving evidence.” (T. p14 [45])

Citilawyer's submissions

  1. Her Honour erred by failing to provide the plaintiff with procedural fairness in the Local Court, this denial of procedural fairness occurred as Mr Tomaras was permitted to give evidence from the bar table despite having neither filed nor served any evidence in the substantive proceeding, which subsequently took it by surprise and deprived it of an opportunity to test Mr Tomaras’ evidence in the cross-examination.

  2. The plaintiff further submitted that her Honour erred by impermissibly taking the defendant's oral evidence into account in reaching her decision. This submission is made noting again that Mr Tomaras did not file nor serve any evidence in the substantive proceeding, was not administered an oath or affirmation, and was not subject to the cross-examination.

  3. Her Honour’s reasons for the decision and the findings of fact she has made raises the inference has to be that that finding of fact that the contradictory sides of the conversation could not have occurred but for what was said by Mr Tomaras from the bar table in the Local Court.

  4. In Mr Tomaras’ only evidence he could rely upon his affidavit, I have reproduced its contents earlier in this Judgment.

  5. The evidence of Mr Janoyan as per his affidavit dated 5 October 2022, who was subject to the cross-examination by Mr Tomaras was as follow:

“On or about 25 January 2021 Hector Ekes, a former solicitor who was the principal of GE Law Pty Ltd and former acquaintance of mine, arid I had a conversation to the effect.

Hector: I have a new matter that I can refer to Ctilawyers. Do you know Con Tomaras.

Me: John Tomaras's brother? Yes I do, What is the matter about?

Hector: I ran his trial for an arson charge and we were, unsuccessful. He wants to do an appeal for the conviction. He is currently locked up.

Me: I will arrange an AVL conference with him” (CB 36, [2]-[4]).

  1. Citilawyers denied that Mr Ekes was its agent. The principal of Citilawyers gave evidence to this effect. Her Honour in her ex-tempore judgment made the following findings,

  2. The defendant submitted that Mr Ekes was his initial solicitor in his criminal trial, but he was not his solicitor nor agent at the time when the defendant engaged the plaintiff. The defendant relies heavily on the cost agreement dated 10 April 21.

  3. Mr Tomaras submitted that Mr Ekes actually worked as an agent for the plaintiff during this period in that he was employed to do paid work for the plaintiff. The use of the word "agent" appears to have arisen only at the final hearing. However, the Court will deal with this matter for the sake of completion. The Court notes that the plaintiff filed a notice of change of solicitor with the Supreme Court of New South Wales on 18 March 2021.

  4. The notice listed Mr Janoyan of Citilawyers and is signed by Mr Hoskin. There is no mention of Mr Ekes being the defendant's solicitor or agent.

Resolution

  1. It is my view that Mr Tomaras’ submissions from the bar table were at times treated as evidence by the Magistrate, especially his evidence concerning that Mr Ekes was acting as Citilawyer’s agent. The evidence between the plaintiff’s principal lawyer and Mr Tomaras were as the Magistrate correctly stated at [50] of her judgment, “in direct contradiction of each other”. The Magistrate also correctly stated that Mr Tomaras for the first time made mention when speaking from the bar table, that Mr Ekes was an agent of Citilawyers. It is only in his affidavit filed in support of his notice of motion to set aside default judgment, that he made a reference to Mr Ekes, by referring to “Mr Ekes of Citilawyers”.

  1. While her Honour stated to Mr Tomaras,

“You are not under oath” (CB 122)

  1. Mr Thomson then stated,

“You are not under oath” (CB 122)

  1. Mr Tomaras replied,

“Okay will I’m just saying under my God oath, I’m saying that I’m not lying and this is the facts” (CB 122)

  1. Her Honour then asked him some questions which Mr Tomaras answered. After Mr Tomaras said,

“I’ll just continue. So Fusion Legal which is a Chinatown legal service, was engaged and I had then a barrister by the name of Louis Katsinas.” (CB122)

  1. Then the following exchange took place,

“THOMSON: This is all new evidence

DEFENDANT: No, but you’re saying to me that I engaged Mr Ekes all the way through. I’m proving to you that it wasn’t the case.

THOMSON: You’re not proving anything. This isn’t evidence. You’re not under oath.

HER HONOUR: Would you think I can run the hearing?

THOMSON: Sorry, I’m sorry your Honour.” (CB 122)

  1. After this exchange concluded, her Honour asked Mr Tomaras more questions, in my view, even though counsel for Citilawyers specifically said to the Magistrate, “This is all new evidence” and “You’re not proving anything, this is not evidence’ and “You’re not under oath”. The Magistrate interrupted counsel and said, “Would you think I can run the hearing?” by doing so her Honour shut down Citilawyers’ counsel and did not give him the oppurtunity to cross-examine Mr Tomaras. The evidence of Mr Janoyan and Mr Tomaras was in direct contradiction to each other, it was necessary that counsel for Citilawyers was afforded the opportunity to test Mr Tomaras’ evidence and credibility by cross-examining him. By denying counsel that opportunity the Magistrate did not afford Citilawyers with procedural fairness.

  2. I now turn to consider appeal grounds 1 and 2 together.

Appeal ground 1

Citilawyer's submissions

  1. So far as appeal ground 1 is concerned that the ground of appeal are that the Magistrate in her ex-tempore reasons stated.

  1. It is not disputed that the services were, in fact, performed by Citilawyers to the defendant, and it is not disputed that Mr Thomas Wood appeared for the defendant in the hearing before the Court of Criminal Appeal.

  2. Citilawyers did not suggest on any occasions that its legal services and work would be performed on a pro bono basis.

  3. The Court can take into account how Legal Aid works when construing the costs agreement, which is that if Legal Aid is to be granted, the work is performed at Legal Aid rates.

  4. The only commercially reasonable and available interpretation of the costs agreement is that the parties were proceeding on the basis that the costs would be paid by Legal Aid at the first instance, if no Legal Aid fundings were ultimately granted, then the professional fees set out in clause 2 of the costs agreement would apply.

  5. The costs agreement does not create an obligation for the plaintiff to inform the defendant about the progress of the Legal Aid grant.

  1. That the Magistrate erred on a question of law in her construction of the costs agreement dated 10 April 2021.

Particulars

  1. The Magistrate held that the costs agreement imposed a positive obligation upon the plaintiff to inform the defendant if Legal Aid would not cover his professional fees, failing which the plaintiff could not recover its legal fees from the plaintiff.

  2. That construction is inconsistent with an objective interpretation of the costs agreement, taking into account its text, context and purpose, on the assumption that the parties intended to produce a commercial result.

  3. On a proper construction of the costs agreement, if Legal Aid did not cover the defendant's professional fees, the costs agreement entitles the plaintiff to recover its professional fees and disbursements from the defendant directly.

The relevant legislation

  1. Section 178 of the Legal Profession Uniform Law 2014 (NSW) reads

178 Non-compliance with disclosure obligations

(1) If a law practice contravenes the disclosure obligations of this Part-

(a) the costs agreement concerned (if any) is void; and

(b) the client… is not required to pay the legal costs until they have been assessed or any costs dispute has been determined by the designated local regulatory authority; and

(c) the law practice must not commence or maintain proceedings for the recovery of any or all of the legal costs until they have been assessed or any costs dispute has been determined by the designated local regulatory authority or under jurisdictional legislation; and

(d) the contravention is capable of constituting unsatisfactory professional conduct or professional misconduct on the part of any principal of the law practice or any legal practitioner associate or foreign lawyer associate involved in the contravention.

(2) In a matter involving both a client and an associated third party payer where disclosure has been made to one of them but not the other, this section—

(a)  does not affect the liability of the one to whom disclosure was made to pay the legal costs; and

(b)  does not prevent proceedings being maintained against the one to whom the disclosure was made for the recovery of those legal costs.

  1. Section 72A of the Legal Profession Uniform General Rules 2015 (NSW) states as follows:

72A Non-compliance with disclosure obligations--disapplication of section 178(1) and (2) of the Uniform Law

(1) This rule applies where a law practice has contravened the disclosure obligations of Part 4.3 of the Uniform Law in relation to a particular matter.

(2) Section 178(1) and (2) of the Uniform Law do not apply in relation to the law practice (so far as they would otherwise apply to the matter concerned) in circumstances where the relevant authority, a costs assessor, a court or a tribunal is satisfied that--

(a) the law practice took reasonable steps to comply with the disclosure obligations of Part 4.3 of the Uniform Law before becoming aware of the contravention, and

(b) the law practice, no later than 14 days after the date on which it became aware of the contravention, rectified the contravention, as far as practicable, by providing the client with the necessary information required to be disclosed under Division 3 of Part 4.3 of the Uniform Law (including, where relevant, an estimate or revised estimate of the costs), and

(c) the contravention was not substantial and it would not be reasonable to expect that the client would have made a different decision in any relevant respect.

(3) Subrule (2)(b) applies even though the information or estimate is not provided at the times required by the disclosure obligations of Part 4.3 of the Uniform Law.

The relevant law

  1. The rights and liabilities of parties under the terms of the costs agreement are determined objectively by reference to the language of the contract and, in limited circumstances, admissible evidence of objective external matters.

  2. Citilawyers relied on Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, where the plurality (French CJ, Nettle and Gordon JJ) said at [116] – [117]:

“Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning.

However, sometimes, recourse to events, circumstances and things external to the contract is necessary. It may be necessary in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding "of the genesis of the transaction, the background, the context [and] the market in which the parties are operating". It may be necessary in determining the proper construction where there is a constructional choice ....

Each of the events, circumstances and things external to the contract to which recourse may be had is objective. What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties' statements and actions reflecting their actual intentions and expectations.

[Underlining added; citations omitted]

  1. It also relied on Rialto Sports Pty Limited v Cancer Care Associates Pty Limited [2022] NSWCA 146 at [63], Gleeson JA (Bell CJ and Macfarlan JA agreeing) held that:

“As observed by Leeming JA (Simpson AJA and N Adams J agreeing) in Cavanagh v Manning Valley Race Club Ltd [2022] NSWCA 36 at [24] [c]oncision in judgments is desirable, but not if it comes at the expense of failing to give adequate reasons". In Cavanagh, the reasons were described as "strikingly short", four-and-a-half pages, with respect to a trial worth more than $1 million. Similarly, the reasons of the judge in this case are also strikingly short; 11 pages for a claim worth more than $1.3 million involving a trial of three days with cross-examination of competing experts.”

Citilawyer's submissions

  1. Citilawyers submitted that the terms of the costs agreement, were unambiguous and susceptible of only one meaning, which is sufficient for objectively determining the parties' right and liabilities under the costs agreement. On the proper construction of the costs agreement, a positive obligation is never imposed on the plaintiff to inform the defendant if Legal Aid would not cover his professional fees, nor can any clause and/or language included in the terms of the costs agreement be interpreted in a way, which provides that if the plaintiff fails to inform the defendant that Legal Aid would not cover his professional fees, the plaintiff could not recover its legal fees from the plaintiff.

  2. Even if the Court considers necessary to take "the recourse to events, circumstances, and things externals to the contract" into consideration when determining the rights and liabilities under the costs agreement, Citilawyers contends that it would defy commercial and common sense for a party in the plaintiff's position to agree to provide legal service to Mr Tomaras, upon merely being informed that there was a possibility that Legal Aid would fund the defendant's appeal.

  3. This is particularly so in circumstances where the costs agreement sets out the hourly rates for Citilawyers’ professional staff. Where Legal Aid funds a criminal matter, a costs disclosure from the firm to the Client will be unnecessary as Legal Aid will set up a fixed rate for all the professional service(s) that are to be provided by the practice, which is usually less than the ordinary professional hourly rates.

  4. In any case, Mr Tomaras understood that the defendant himself applied for a Legal Aid grant, and the application was granted.

  5. Citilawyers submitted that that the Magistrate erred in finding that the costs agreement imposed a positive obligation upon the plaintiff to inform Mr Tomaras if Legal Aid would not cover his professional fees, failing which Citilawyers could not recover its legal fees from the plaintiff.

  6. Citilawyers submitted that the Magistrate erred by failing to advert to and deal with substantial, clearly articulated arguments relying upon established facts, both of which were raised in its written submissions dated 6 September 2023 and in oral submissions:

  1. Whether the application of section 72A of the LPUGR meant that section 178(1) of the LPUL did not relevantly apply to the plaintiff’s case; and

  2. Whether Citilawyers had a quantum meruit claim for the reasonable value of the legal services it performed for Mr Tomaras.

Appeal Ground 2

  1. That the Magistrate erred on a question of law by failing to advert to and deal with substantial, clearly articulated arguments relying upon established facts.

Particulars

  1. The Magistrate did not advert to or deal with the following arguments, both of which were raised in the plaintiff's written submissions dated 6 September 2023 and in oral submissions:

  1. Whether the application of s 72A of the Legal Profession Uniform Law (NSW) (Uniform Law) meant that section 178(1) of the Uniform Law did not relevantly apply to the plaintiff.

  2. That the plaintiff had a quantum meruit claim for the reasonable value of the legal services it performed for the defendant.

Resolution

  1. The main issue raised in appeal grounds 1 and 2 are that the Magistrate did not deal with substantial, clearly articulated arguments relying on established facts. They are

  1. Whether the application of s 72A of the LPUL meant that section 178(1) of the LPUL did not relevantly apply to the plaintiff.

  2. That the plaintiff had a quantum meruit claim for the reasonable value of the legal services it performed for the defendant.

  1. I agree both these issues were raised by Citilawyers. They were clearly articulated arguments and they were not addressed by her Honour. So, I note that the Court had power pursuant to r 72A (2) of the LPUGR to not apply s 178(1) of the LPUL. It may be that Citilawyers should seek to have its costs assessed by a costs assessor. It is my view that as credibility of both parties are in dispute the proceedings should be remitted to the Local Court to be determined.

Costs

  1. Costs are discretionary. Normally costs follow the event. It is appropriate that the defendant pay the plaintiff’s costs on an ordinary basis.

The Court Orders that

  1. The appeal is upheld

  2. The decision of the Magistrate dated 6 September 2023 is set aside.

  3. The proceedings are remitted to the Local Court to be determined according to Law.

  4. Defendant is to pay the plaintiff’s costs on an ordinary basis.

***********

Amendments

17 March 2025 - Grammar error.

17 March 2025 - Missing quotation marks

Decision last updated: 17 March 2025

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Cases Cited

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Statutory Material Cited

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AAI Limited trading as GIO v Amos [2024] NSWCA 65
Kioa v West [1985] HCA 81
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37