DW Fox Tucker Pty Ltd v Morgan

[2023] SASCA 11

Supreme Court of South Australia

(Court of Appeal: Civil)

DW FOX TUCKER PTY LTD v MORGAN

[2023] SASCA 11

Judgment of the Court of Appeal  

(The Honourable President Livesey, the Honourable Justice Doyle and the Honourable Justice Bleby)

16 February 2023

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - FORMATION OF CONTRACTUAL RELATIONS - CONTRACT IMPLIED FROM CONDUCT OF PARTIES

CORPORATIONS - RECEIVERS, CONTROLLERS AND MANAGERS - DUTIES AND LIABILITIES - LIABILITIES - PERSONAL LIABILITY

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - FORMATION OF CONTRACTUAL RELATIONS - GENERAL OFFERS AND THEIR ACCEPTANCE

The appellant law firm appeals against a decision of a Master in which he held that the respondent was not a client of the appellant, and was not bound by the terms of the appellant's retainer letter.

The respondent was the sole director and shareholder of a company who engaged the appellant in relation to a dispute concerning a joint venture for the purchase and redevelopment of land at Happy Valley.  The appellant provided legal advice and services, including in relation to a caveat lodged by the company over the land.

The appellant sought to recover unpaid legal fees from the respondent in his personal capacity, and initially obtained a default judgment in the sum of $193,392.78 in the District Court. The default judgment was subsequently set aside. The appellant applied to tax its costs before a Master in the Supreme Court and, during this taxation, the respondent sought a declaration pursuant to clause 30(8) of Schedule 3 of the Legal Practitioners Act 1981 (SA) (the Act) that there was no costs agreement between him and the appellant.

The Master held that there was no costs agreement between the appellant and the respondent because, on the terms of the retainer letter issued to the respondent, he was not a client of the appellant in his personal capacity.

The appellant appeals against the decision of the Master on the basis that, objectively construed, the retainer letter made clear that both the company and the respondent in his personal capacity were liable for the appellant's fees.  The appellant further contended that it was of no consequence that the respondent did not sign and return the retainer letter, as his conduct was sufficient evidence of his assent to its terms.  

By a notice of alternative contention, the respondent submitted that, even if he was personally a party to the retainer letter, he was entitled to a declaration that the costs agreement must be set aside pursuant to clause 30(1) of Schedule 3 of the Act. The Master did not deal with this issue at first instance.

Held, by the Court, allowing the appeal and remitting the matter to the Master for further consideration of the matters raised in the respondent’s notice of alternative contention:

1.A reasonable person having regard to the terms of the retainer letter and the context of the relationship would have appreciated that the terms of the retainer letter were intended to bind both the company, and the respondent in his personal capacity.

Legal Practitioners Act 1981 (SA) Schedule 3, cl 30(1), 30(8), 31(1), 33(1), referred to.
Brogden v Metropolitan Railway Co (1877) 2 App Cas 666; Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523; Le Mans Grand Prix Circuits Pty Ltd v Iliadis [1998] 4 VR 661; Morgan v DW Fox Tucker Pty Ltd [2022] SASC 3; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, considered.

DW FOX TUCKER PTY LTD v MORGAN
[2023] SASCA 11

Court of Appeal – Civil:    Livesey P, Doyle and Bleby JJA

1. THE COURT:This is an appeal by the appellant law firm, DW Fox Tucker Pty Ltd (the law firm), concerning a claim for unpaid legal fees incurred in acting for a company, TS Morgan Developments Pty Ltd (the company), in litigation that commenced during 2016 and continued until the company went into voluntary administration in March 2017.

2. The law firm sought to recover the unpaid legal fees from the respondent director of the company (Mr Morgan) in his personal capacity.  The law firm obtained a default judgment in respect of these fees in the sum of $193,392.78 against Mr Morgan in February 2019 in the District Court.  That judgment was set aside in February 2020. 

3. The law firm then applied to tax its costs. In the course of the taxation before a Master of this Court, Mr Morgan sought a declaration pursuant to clause 30(8) of Schedule 3 of the Legal Practitioners Act 1981 (SA) (the Act) that there was no costs agreement between him and the law firm. 

4. After considering a significant volume of affidavit evidence, some cross-examination of Mr Morgan, and legal argument, the Master held[1] that there was no costs agreement between the law firm and Mr Morgan because, on the terms of the retainer letter issued by the law firm, Mr Morgan was not a client of the law firm.  The law firm challenges the Master’s decision.

   [1]     Morgan v DW Fox Tucker Pty Ltd [2022] SASC 3.

   Background

5. The company fell into dispute with Morgan Residential Developments Pty Ltd (Morgan Residential).  Mr Morgan’s father was the sole director of Morgan Residential.  The dispute concerned a joint venture involving the purchase and development of land at Happy Valley.

6. The matter initially came before the Supreme Court on short notice.  The company had lodged a caveat over the land.  Morgan Residential had warned that caveat, and the law firm, on the instructions of Mr Morgan, issued proceedings on behalf of the company seeking to extend the time for the removal of the caveat.  An order was made extending time for the removal of the caveat and the matter then proceeded as an ordinary civil dispute.  It is not necessary to address the course of the dispute in any further detail, save to note that the law firm continued to represent the company in the dispute, and rendered accounts for legal fees and disbursements.

   The Master’s reasons

7. The Master noted that there was extensive affidavit evidence from Mr Morgan, but no evidence from the two solicitors who met with him on 5 January 2016 when instructions to act were initially taken. 

8. The effect of Mr Morgan’s evidence, which was accepted by the Master, was that he had always understood that it was only the company and not he who had a retainer with the law firm.

9. Soon after the first meeting, a letter of retainer dated 6 January 2016 was emailed to Mr Morgan.  Mr Morgan’s evidence was, according to the Master’s reasons, that he did not ever open the retainer letter and, despite provision for it to be signed by him, he did not ever sign and return the retainer letter.

10. The Master analysed the terms of the retainer letter, ultimately concluding that its terms were consistent with the proposition that only the company, and not Mr Morgan, was a client of the law firm.  It will be necessary to return to the terms of the retainer letter.

11. The Master further held that there was “at least ambiguity about the position” and, in those circumstances, his Honour applied the contra proferentem rule so as to read the retainer letter against the interests of the law firm which had drafted the letter, and in the manner suggested by Mr Morgan. 

12. The Master went on to note that there was no evidence that Mr Morgan had ever been sent an invoice in his personal capacity.  All of the invoices had been addressed to the company.[2]  The Master found that this indicated that only the company was the client of the law firm.

    [2]     Albeit to a Post Office Box that belonged to Mr Morgan.

13. Finally, the Master observed that the District Court proceedings issued against Mr Morgan by the law firm appeared to have been issued in breach of clause 31 of Schedule 3 of the Act, because a law practice is prohibited from commencing legal proceedings to recover legal costs from a person until at least 30 days after the law practice has provided that person with a bill in accordance with clauses 32 and 33 of Schedule 3. The Master did not suggest that this finding was relevant to the issue he was required to decide. He regarded it as a matter for the District Court because sub-clause 31(3) required any court, before which any proceedings are brought in contravention of sub-clause 33(1), to stay those proceedings, whether on the application of a party, or on its own initiative.

    The contentions of the law firm and Mr Morgan

14. The law firm framed the issue on appeal as the proper interpretation of the letter of retainer dated 6 January 2016.  The law firm argued that, objectively construed, the letter of retainer made it clear that it was acting for both Mr Morgan and the company.  The law firm contended that the Master erred in identifying, but not then following, the relevant principles pertaining to the interpretation of a commercial contract.

15. Quite apart from the criticisms made of the Master’s approach to the proper construction of the retainer letter, the law firm invoked clause 17 of the Second Schedule to the retainer letter, which it contended rendered Mr Morgan, as director of the company, jointly and severally liable for the law firm’s fees.  It will be necessary to return to the terms of this clause. 

16. Finally, the law firm contended that it is of no consequence that the retainer letter was not signed and returned.  The law firm relied upon paragraph 1.3 of the retainer letter, which provides that “the terms in this letter will apply from the date we first receive any instructions in relation to a matter (and notwithstanding whether or not this letter has been signed by you and/or returned to us by that date).”  The law firm also relied upon the fact that it provided the contemplated legal services, and that payments were made in accordance with the retainer letter, including an initial $2,000 payment made on 7 January 2016 (being the day when the retainer letter was received by Mr Morgan).

17. Mr Morgan sought to support the Master’s approach to the construction of the retainer letter.  He also sought to resist the challenge to the Master’s judgment on other grounds.  However, as these grounds tended to assume a subjective approach to the construction of the retainer, or an inappropriately narrow view of this Court’s powers of review on an appeal such as the present, and were in any event not seriously pressed during oral argument, it is not necessary to address these grounds in these reasons.

18. Finally, pursuant to Mr Morgan’s notice of alternative contention, he also submitted that even if Mr Morgan was personally a party to the retainer letter, he is entitled to a declaration that the costs agreement must be set aside pursuant to clause 30(1) of Schedule 3 of the Act. No other entitlement arises because the law firm failed to meet its disclosure requirements under Part 3 of Schedule 3 of the Act, in that the law firm failed to clearly state the type of conduct which would constitute acceptance of the costs agreement and, in addition, by reason of the law firm’s failure to meet its fiduciary obligations.

    The retainer letter dated 6 January 2016

19. There appears to be no dispute that there was an initial conference between Mr Morgan and two solicitors of the law firm on 5 January 2016 and that, during that conference, Mr Morgan and the solicitors discussed: the dispute between the company and Morgan Residential; the legal assistance that the solicitors might provide in that dispute, including by way of response to the challenge to the caveat that the company had lodged; and the appropriateness of engaging counsel.  A meeting with counsel was scheduled for 7 January 2016. 

20. The balance of what was discussed at the initial conference is difficult to discern from the evidence.  According to Mr Morgan’s affidavit, it would seem that neither the terms of retainer nor the retainer letter was discussed.  However, in his evidence before the Master, Mr Morgan accepted that the hourly rates of the law firm and counsel may have been discussed at the initial meeting; and that there may have been a request for a payment of $2,000.  Mr Morgan explained that his memory of the meeting was not clear. 

21. Mr Morgan did not dispute that he received the retainer letter the day after the initial meeting and that, in the email by which it was sent, he was asked to sign and return the letter.  In his affidavit, Mr Morgan said that he could not recall reading the retainer letter; that it slipped his notice given his focus on the dispute.  When pressed on this issue during his cross-examination, his evidence at times was to the effect he did not even read the retainer letter and its attachments.  Whilst the Master expressly accepted aspects of Mr Morgan’s evidence, he did not make any finding as to whether Mr Morgan did not read the retainer letter, or simply did not recall doing so.  It was not necessary for his Honour to do so given the manner in which he disposed of the matter.  

22. Certainly Mr Morgan said that he did not sign the letter, nor return it to the law firm.  He said that no solicitor at the law firm ever discussed the terms of the retainer letter with him, or followed him up about it. 

23. The retainer letter was addressed to:

    Mr Tom Morgan
    TS Morgan Developments Pty Ltd
    PO Box 1099
    FLAGSTAFF HILL SA 5159

24. The retainer letter was headed:

    CLIENT AGREEMENT: TS MORGAN DEVELOPMENTS PTY LTD
    PROCEEDINGS TO EXTEND CAVEAT & JOINT VENTURE DISPUTE – MORGAN RESIDENTIAL DEVELOPMENTS PTY LTD

25. In clause 1.1, under the heading “Introduction”, the following appeared:

    The purpose of this letter is for us to advise you of the terms on which we will be acting, and of our charges.  (In this letter “you” and “your” includes each person or company giving us instructions to act).  Please feel free to contact me or any of our practitioners or staff at any time if you require any information about the matter or the firm.

26. Clause 1.3 provided that the terms in the letter will apply from the date the law firm first receives any instructions.

27. By clause 1.4, Mr Morgan was advised that the terms on which the law firm would act were set out in “the attached Second Schedule”. 

28. The scope of the legal work to be carried out by the law firm was then outlined, as were the names of the solicitors undertaking the work and the fees to be charged.  Clause 5.6 contained the following:

    We will advise you in writing of any change in our hourly rates.  You are not obliged to accept such proposed rates, but if you do not accept such rates, we are entitled to cease acting for you.  If you do accept the rates, either expressly or by paying bills expressly calculated upon such rates, they will be binding on you.

29. The retainer letter advised that the law firm’s rates were higher than those set out in the Scale of Fees published by the Supreme Court.  It also advised that the client was entitled to seek independent legal advice regarding this or any other term of the agreement (clause 5.7). 

30. By clause 6, an initial payment of $2,000 was required to be paid into trust within seven days of the date of the retainer letter.

31. A costs estimate was provided on the basis that it was not possible to provide an accurate estimate given the urgency of the matter (clause 7.1). 

32. By clause 9.1, the client was encouraged to contact the law firm if there was anything in the letter which it wished to discuss or which it did not understand or with which it disagreed.  The following then appeared in clauses 9.2 and 9.3:

    This is an offer to enter a costs agreement and we ask you to sign the counter-part copy of this letter by way of confirmation and return it to us.  You may also acknowledge your agreement by facsimile or email.

    The offer may also be accepted by conduct if you pay bills expressly calculated under the terms of this agreement or otherwise accept the offer orally in person or via telephone. 

33. The signing clause at the foot of the last page of the letter was in the following terms:

    I have read and confirm the above terms of engagement and acknowledge receipt of the named Schedules. 

    Acknowledged and accepted this           day of               2016

    ........................................................

    Tom Morgan

    In my own right and for and on behalf of TS Morgan Developments Pty Ltd

34. As mentioned earlier, clause 17 of Schedule 2 provided for the personal liability of a director of a proprietary company.  That clause provided:

    17.     Companies and Directors

    17.1  If instructions are received from a director or directors of a proprietary company, then the instructions are accepted on the basis that these are given by each director of the company as well as the company and on the basis that the company and each of its directors are jointly and severally liable for our fees.  In addition, where we are acting for a company, accounts for fees may at our discretion be rendered to the director(s) and/or the company.  Accounts will, unless otherwise requested, generally be directed at the first instance to the company.

    17.2  If the company fails to pay an account by the due date, we may demand payment of the invoiced amount from the director(s) of the company, in which case that amount must be paid immediately by the director(s), if not paid by the company. …

35. Also attached was a “Fees Disclosure” document from counsel, setting out the apparently standard terms upon which counsel was retained to act on behalf of a client by the solicitor.  That document set out, amongst other matters, counsel’s hourly and daily rates.

    Construction of the retainer letter

36. The principles applicable to the construction of the retainer letter are not in dispute.  The parties agreed that the rights and liabilities of the parties to that contract must be determined objectively and by reference to the terms of the parties’ relevant communications and the commercial context, including by reference to evidence of surrounding circumstances.  Importantly:[3]

    It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations.  What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe.

    [3]     Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, [40] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ).

37. The question for this Court is to determine what a reasonable person in the position of Mr Morgan would have understood on reading the retainer letter and its schedules.  It is necessary to approach the task of interpreting this commercial contract on the assumption that the parties intended to produce a commercial result and, importantly, so as to avoid it making commercial nonsense or working commercial inconvenience.[4] 

    [4]     Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, [51] (French CJ, Nettle and Gordon JJ).

38. In considering whether the terms of the contract were such as to bind Mr Morgan in his personal capacity, it is apparent from the evidence that the law firm was retained to act for the company in its dispute with Morgan Residential, but that the law firm took instructions from Mr Morgan.  The law firm also emphasised in argument that the relevant context included the fact that the dispute in which the law firm was engaged had important personal consequences for Mr Morgan.  He was the sole director and shareholder of the company, and had given a guarantee securing the financial arrangements between the company and its bank in connection with the joint venture.

39. A distinction may be drawn, of course, between the persons or entities for whom a law firm acts in a dispute, the persons or entities by whom the law firm is retained to act (that is, the client or clients of the law firm), and the persons or entities who provide instructions to the law firm.  Depending on the circumstances, the persons or entities for whom a law firm acts in a dispute, the client(s), and the instructor(s), may or may not be the same.

1. There is no doubt in the present case that the company was both the party for whom the law firm was acting in the dispute, and a client.  The issue in the present case is whether Mr Morgan, in his personal capacity, was also a client of the law firm – at least in the sense that the terms of the retainer bound him, and created in him an obligation to pay the law firms’ fees.

2. An objective reading of the letter demonstrates that it was intended to subject the director, Mr Morgan, to personal liability in respect of the company’s liability to pay the law firm’s costs and disbursements.  That is shown most clearly by clause 17 of Schedule 2.  By reason of that clause, the liability of Mr Morgan was intended to be joint and several with the liability of the company to meet the fees and disbursements of the law firm incurred in connection with the retainer.  That conclusion is reinforced by the references made in sub-paragraphs 1.1 and the signing clause to Mr Morgan in his personal capacity.

3. The preferable view of the letter of retainer, together with its schedules, is that it was intended that Mr Morgan be jointly and severally liable. With respect to the Master, this intention was expressed in sufficiently clear and unambiguous terms, leaving no room for application for the contra proferentem principle. 

   Assent to the terms contained in the retainer letter

4. No signature was required in order to accept the offer set out in the retainer letter.  As clause 9.3 of the retainer stipulated, the offer embodied in the letter of retainer “may also be accepted by conduct if you pay bills expressly calculated under the terms of this agreement”.

5. Whilst the application of a signature is the orthodox means of communicating a party’s acceptance of, or assent to, an offer to provide services on the terms set out in a contractual document, it is well recognised that the requisite acceptance or assent may be inferred from conduct if that inference is indicated by the objective circumstances.[5]  As McHugh JA explained in Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd:[6]

   … where an offeree with a reasonable opportunity to reject the offer of goods or services takes the benefit of them under circumstances which indicate that they were to be paid for in accordance with the offer, it is open to the tribunal of fact to hold that the offer was accepted according to its terms.  A useful analogy is to be found in the “ticket cases” where an offeree, who has or ought to have knowledge of the terms of the contract of carriage or bailment, is generally bound unless he raises objection …

   The ultimate issue is whether a reasonable bystander would regard the conduct of the offeree, including his silence, as signalling to the offeror that his offer has been accepted.

   [5]     Brogden v Metropolitan Railway Co (1877) 2 App Cas 666 at 682; Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 at 528-531 (Kirby P), at 534-535 (McHugh JA, Samuels JA agreeing).

   [6]     Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 at 534-535 (McHugh JA, Samuels JA agreeing).

6. Even without the stipulation in clause 9.3, there is little doubt that the offer set out in the retainer letter was accepted by the conduct of Mr Morgan in accepting the law firm’s legal services, and indeed paying the invoices rendered in accordance with the terms of that offer and letter. 

   Did the terms of the retainer letter bind Mr Morgan in his personal capacity?

7. During the course of oral submissions, when responding to questions from the Court, an argument was developed on behalf of Mr Morgan that, even if this conduct was sufficient to bind the company to the terms set out in the retainer letter, it was not sufficient to bind Mr Morgan in his personal capacity in circumstances where, it was argued, he did not have (proper) notice of the fact that those terms purported to bind him in his personal capacity.

8. The law firm submitted in response that, even if Mr Morgan did not read the letter of retainer (as opposed to simply not recalling reading the letter), that was of no moment.  He, both on behalf of the company and in his own capacity, accepted the terms set out in that letter through his conduct and thus, on the objective theory of contract, was bound by the terms contained in the retainer letter.

9. The law firm relied in this respect upon the reasoning of the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (‘Alphapharm’).[7] Whilst the reasoning in that case was directed to a situation in which the relevant party had signed the document containing the putative terms of the contract, and in which there was no doubt that that party was a party to the contract, it emphasised the significance of the objective theory of contract in what the law firm contended is an analogous context.

   [7]     Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165.

10. In Alphapharm, the first respondent (Alphapharm Pty Ltd) was the sub-distributor of a vaccine in Australia.  Through a related entity (Richard Thomson Pty Ltd), it sought to retain the appellant (Finemores GCT Pty Ltd[8]) to provide it with certain services in relation to the delivery and storage of the vaccine.  The letter by which Finemores quoted for the provision of those services included a request that Richard Thomson complete an attached credit application, and sign an attached schedule of rates and conditions.  The credit application included the words “Please read ‘Conditions of Contract’ (overleaf) prior to signing”.  The representative of Richard Thomson signed without reading the conditions on the reverse of the credit application.  An issue on appeal was whether Richard Thomson (and, in turn, Alphapharm[9]), was bound by those conditions, which relevantly included a term, in clause 6, to the effect that the carrier would not be responsible for loss or damage in relation to the goods being carried.  While being delivered and stored, the vaccines were damaged.

    [8]     Which subsequently changed its name to Toll (FGCT) Pty Ltd, the appellant in the High Court.

    [9]     By reason of Richard Thomson being its agent when contracting with Finemores, and clause 5 (which provided that the customer entered into the contract on its own behalf and as agent for the customer’s associates (which was defined in clause 3(b) to include persons having an interest in the goods)).

11. In a joint judgment, the High Court held that Richard Thomson (and Alphapharm), were bound by the conditions on the reverse of the credit application, including the exclusion of liability contained in clause 6.

12. The Court commenced the operative part of its reasoning by excluding any suggestion that Richard Thomson was misled, and emphasising the significance of the objective theory of contract:[10]

    Any suggestion that the agreement between Richard Thomson and Finemores was vitiated by misrepresentation would be untenable. Mr Gardiner-Garden signed a document which invited him to read the terms and conditions on the reverse before signing. He was not rushed or tricked into signing the document. He chose to sign it without reading it. He could have read it had he wished. Finemores did not set out to conceal from him the terms and conditions on the document, or to encourage him not to read them. Finemores had no way of knowing that he did not read the document. No case of mistake or non est factum is advanced.

    This Court, in Pacific Carriers Ltd v BNP Paribas,[11] has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.[12]

    [10]   Alphapharm at [39]-[40].

    [11]   Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451.

    [12]   Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at [22].

13. The Court went on to explain that the significance which the law attaches to the signature or execution of a contractual document is consistent with this objective approach to the determination of the rights and liabilities of contracting parties.[13]  Their Honours explained:[14]

    It should not be overlooked that to sign a document known and intended to affect legal relations is an act which itself ordinarily conveys a representation to a reasonable reader of the document.  The representation is that the person who signs either has read and approved the contents of the document or is willing to take the chance of being bound by those contents, as Latham CJ put it, whatever they might be.  That representation is even stronger where the signature appears below a perfectly legible written request to read the document before signing it.

    The statements in the above authorities accord with the well-known principle stated by Scrutton LJ in L’Estrange v F Graucob Ltd[15] that “[w]hen a document containing contractual terms is signed, then, in the absence of fraud, or, I will add, misrepresentation, the party signing it is bound, and it is wholly immaterial whether he has read the document or not”.

    [13]   Alphapharm at [42].

    [14]   Alphapharm at [45].

    [15] [1934] 2 KB 394 at 403.

14. Their Honours later summarised:[16]

    The general rule, which applies in the present case, is that where there is no suggested vitiating element, and no claim for equitable or statutory relief, a person who signs a document which is known by that person to contain contractual terms, and to affect legal relations, is bound by those terms, and it is immaterial that the person has not read the document.

    [16]   Alphapharm at [57].

15. Their Honours accepted that there may be cases where the circumstances in which a document is presented for signature, or the presence in it of unusual terms, could involve a misrepresentation as to the nature of the document and its contents.  There could also be other circumstances in which a party’s signature to a document could not reasonably be understood as a manifestation of an intention to enter into legal relations, or of assent to its terms.[17]  Their Honours gave as examples cases in which a signature was applied to a timesheet[18] and to a document which was found to be (or at least to have been portrayed as) a document for marketing or promotional purposes.[19]

    [17]   Alphapharm at [63].

    [18]   Grogan v Robin Meredith Plant Hire [1996] TLR 93; referred to in Alphapharm at [62].

    [19]   Le Mans Grand Prix Circuits Pty Ltd v Iliadis [1998] 4 VR 661; referred to in Alphapharm at [65]-[66].

16. The Court in Alphapharm held that an application of settled principle led to the conclusion that the terms and conditions on the reverse of the credit application provided to the representative of Richard Thomson formed part of the contract governing the delivery and storage of the vaccines by Finemores.[20]  There was no suggestion of any misrepresentation; there was nothing about the credit application form to suggest that it was other than a document intended to affect legal relations; and there was nothing unusual or abnormal about the terms it contained.[21]

    [20]   Alphapharm at [50].

    [21]   Alphapharm at [64], [67].

17. In a separate section of their reasons, the Court held that Alphapharm was also bound by the conditions on the reverse of the credit application, and in particular the exclusion of liability in clause 6.[22]

    [22]   Alphapharm at [82].

18. Whilst acknowledging the significance of the Court’s reasoning in Alphapharm, Mr Morgan argued that it did not apply directly, or with the same force, in cases where the party claiming not to be bound by the terms contained in an offer document has not applied his or her signature to that document.  It is true that the Court emphasised the importance of a signature.  Indeed, the Court did so in distinguishing what are sometimes referred to as the “ticket cases”, being cases in which the document containing the impugned terms was not signed, and in which the courts have had regard to whether the notice provided of the relevant terms was reasonably sufficient.[23]  It would seem that consideration of the reasonableness or sufficiency of the notice provided of the relevant terms, let alone whether those terms were unusual or unreasonably onerous, does not have any place in the context of contractual documents that have been signed.

    [23]   Alphapharm at [54]-[55]; see also Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163 at 169 (Lord Denning MR).

19. However, despite this point of distinction, we consider that an analogy can be drawn between the assent by signature cases under consideration in Alphapharm, and the assent by conduct cases such as the present (in circumstances where the assent is to goods or services being provided on the basis of terms set out in an offer document).  In our view, by accepting the benefit of the legal services provided by the law firm, and by paying the invoices rendered by that firm, in circumstances where an objective bystander would understand that the services and invoices were rendered on the basis of the contractual terms documented in the retainer letter, Mr Morgan bound both the company and himself to the terms contained in the retainer letter.

20. Given the nature of the document – a retainer letter – a reasonable person in Mr Morgan’s position would have appreciated that it was the very type of document that might affect legal relations between the law firm and both the company and Mr Morgan.  Whilst there was no evidence in this case that the solicitors said or did anything to give any positive indication that Mr Morgan was to become a client in his personal capacity, there is likewise no evidence to suggest that the solicitors said or did anything to suggest he would not.  In our view, it was inherently likely that the law firm might wish to bind both the company and Mr Morgan to its terms of retainer.  Further, and more importantly, in this day and age, we do not think that a director of a one-person company can reasonably maintain that the retainer letter was not a document that might affect him in his personal capacity.  Whilst even a single director and shareholder company remains a separate legal entity, it will often be the case that persons dealing with such an entity will want the protection of the alter ego of that company being bound by the relevant contractual terms.[24]  A reasonable person in Mr Morgan’s position would have appreciated this to be the case. 

    [24]   This being the very thing that the bank had done in its dealings with the company in connection with its joint venture with Morgan Residential.

21. Alternatively, and put in terms of being on notice of the relevant contractual terms, we are satisfied that the circumstances of the present case were such that Mr Morgan was on notice that the retainer letter might contain terms purporting to affect him in his personal capacity.  There was nothing unusual or unreasonably onerous about the terms contained in the retainer letter.  As a result, Mr Morgan’s conduct in proceeding to accept the benefit of the law firm’s services, and to pay their invoices (even if only doing so explicitly on behalf of the company), was sufficient to bind him to the terms set out in the retainer letter.  It is not to the point that he did not read (or at least did not recall reading) those terms.  Nor is it to the point that he may not (subjectively) have thought that he would be bound by those terms in his personal capacity.

22. For these reasons, we are satisfied that Mr Morgan was bound by the terms of the law firm’s letter of retainer. 

    Notice of alternative contention

23. As the parties acknowledged in their oral submissions before this Court, the Master did not ultimately deal with the issues the subject of the notice of alternative contention.  Whilst the parties adduced evidence relevant to those issues, following an indication by the Master that they would be dealt with, if necessary, at a subsequent hearing, the parties did not put full submissions on those issues, and the Master did not address them in his reasons. 

24. In these circumstances, the appropriate course is to remit the matter to the Master for further consideration of these issues.

    Conclusion

25. For the reasons given, we allow the appeal and remit the matter to the Master for further consideration of the matters set out in the respondent’s notice of alternative contention.