Hegarty v Keogh - [2020] SASC 237

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
HEGARTY v KEOGH
[2020] SASC 237
Judgment of Judge Bochner a Master of the Supreme Court
11 December 2020
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY - SUMMARY DISPOSAL - SUMMARY JUDGMENT FOR DEFENDANT OR RESPONDENT: STAY OR DISMISSAL OF PROCEEDINGS
Terms of engagement - whether the costs agreement complies with the relevant provisions of the Legal Practitioners Act.
Held: The respondent is entitled to summary judgment in respect of the claim.
Legal Practitioners Act 1981 ; Criminal Law Act 1967 ; Criminal Law Consolidation Act 1935 (SA); Maintenance and Champerty Abolition Act 1993 (NSW), referred to.
R v Keogh (No 2) [2014] SASCFC 136; Murphy v Liesfield [1930] VLR 142; McNamara Business and Property Law v Kasmeridis [2005] SASC 269; Pittman v Prudential Deposit Bank Ltd (1896) 13 TLR 110; Wallersteiner v Moir (No 2) [1975] QB 373; Trendtex Trading Corp v Credit Suisse [1981] 3 All ER 520; Clyne v New South Wales Bar Association (1960) 104 CLR 186; British Waterways Board v Norman (1993) 26 HLR 232; Smits & Ors v Roach & Ors [2002] NSWSC 241; Ceneavenue Pty Ltd v Martin (2008) 106 SASR 1; Adelaide Brighton Cement Ltd v Hallett Concrete Pty Ltd & Ors [2020] SASC 161; Spencer v Commonwealth (2010) 241 CLR 118; Renton Resources Pty Ltd & Anor v Johnson Winter & Slattery [2005] SASC 231; Catto & Ors v Hampton Australia Limited (In Liquidation) & Ors [2007] SASC 360; Pirone v Craig J Roberts (Solicitor) Pty Ltd trading as Paul Kirk, Roberts & Co [2006] SASC 134; McNamara Business & Property Law v Kasmeridis [2007] SASC 90; Jones v Brian K Deegan & Associates [2011] SASC 44; Piper Alderman (A Firm) v Australian Medic Care Company Ltd & Anor [2011] SASC 234; British Waterways Board v Norman (1993) 26 HLR 232; Trendtex Trading Corporation & Anor v Credit Suisse [1980] QB 629; Awwad v Geraghty & Co (a firm) [2000] 1 All ER 608; Sievwright v Ward (1935) 35 GLR 81, considered.

HEGARTY v KEOGH
[2020] SASC 237

The respondent was convicted of murder on 23 August 1995. The facts leading up to his conviction are set out in the judgment of the Court of Criminal Appeal in R v Keogh (No 2).[1] This judgment also sets out the course of the trial that led to his conviction, examines in detail much of the evidence that was presented at that trial, and enumerates the many attempts made by the respondent to overturn his conviction since that time. It discusses the legislative changes that were introduced in 2013, which allowed the respondent to bring this final challenge to his conviction. The Court of Criminal Appeal found that fresh and compelling evidence had been adduced which led them to conclude that a substantial miscarriage of justice had occurred in respect of the respondent’s conviction. In 2014, the respondent’s conviction was set aside, and the Court directed that he be retried. By this time, the respondent had spent some nineteen years in prison. Subsequently, the Director of Public Prosecutions entered a nolle prosequi. In 2018, the respondent received an ex gratia payment from the State Government.
[1] [2014] SASCFC 136.
Mr Hegarty and Mr Borick have now brought proceedings to recover legal fees that they say were incurred in acting for the respondent from about 2004 to about 2012, as solicitor and counsel respectively. The respondent seeks orders for dismissal of or summary judgment in relation to the applicants’ claim.
At the commencement of the hearing, counsel for the applicants, Mr White, sought leave to discontinue the proceeding on behalf of Mr Borick. There was no opposition in respect of this order, save in regard to the question of costs. Consequently, I made the order, and the application proceeded on the basis of the draft revised statement of claim which is exhibited to FDN14 at FMBT2. To avoid any confusion, I will refer to the applicants by their names. Where I refer to them jointly, I will call them “the applicants”.
The facts as relied on by the applicants leading up to their claim
Mr Hegarty says that, on 4 December 2004, he visited the respondent at Port Augusta Prison, and discussed with him “the matter”.[2] He says that he discussed his terms of engagement with the respondent, and gave him a copy of his standard terms of engagement. He asked the respondent to read them, and then return the acknowledgment slip to him. The respondent did not return the acknowledgment slip, or the terms of engagement themselves. Mr Hegarty no longer has a copy of the document that he gave to the respondent.
[2] FDN 12 at [4].
Mr Hegarty says that during the interview, he acknowledged to the respondent that he was aware that the respondent could not pay his fees at the time that the work was done, and was prepared to await the finalisation of the matter, and to receive payment from any compensation paid to the respondent. Mr Hegarty says:
Mr Keogh appeared to accept this and agreed for me to act on his behalf. There was no suggestion that I was to act ‘pro bono’ or without fee.[3]
[3] FDN 12 at [8].
He says that the respondent instructed him to retain Mr Borick as counsel. The retainer was:
…to do whatever was needed to be done in order to achieve his release from prison and hopefully a payment of compensation to him.[4]
[4] FDN 12 at [10].
After the respondent received the payment from the government, Mr Hegarty sought payment of his fees. The respondent refused to make any payment to him.
The essence of Mr Hegarty’s claim is that the contract between him and the respondent was that he would retain Mr Borick as counsel and between them they would undertake the work required to secure the respondent’s release from prison, and a payment of compensation. The respondent would not be required to pay their fees as they accrued; in the event of success, that is, the respondent’s release from prison and receipt of compensation, their fees would become payable.
The evidence relied on by Mr Hegarty
The evidence relied on by Mr Hegarty is contained in FDN 12 (the contents of which formed the basis for the summary set out at [4] – [8] hereof) and FDN 14, an affidavit of Mr Hegarty’s solicitor. It appears that Mr Borick relies on the same evidence.
Exhibited to FDN 12 as MSH1 is a copy of Mr Hegarty’s standard terms of engagement (“standard terms”) which he used in December 2004. He says of this document:
It contains similar provision to that provided to Mr Keogh.[5]
[5] FDN 12 at [7].
The standard terms have a number of notable features.
They relate specifically to a family law dispute. They require payment by the client of disbursements as they become payable; a disbursement will not be incurred (in respect of report fees) until sufficient funds have been placed in Mr Hegarty’s trust account. An itemised invoice will be provided to the client on a monthly basis, requiring payment within fourteen days. Late payment of accounts will result in work ceasing on the file. The client must pay $1,000 into Mr Hegarty’s trust account before he will commence work. It is impossible to predict the likely total cost of the matter.
The next document exhibited to FDN 12, as MSH2, is a schedule “setting out the areas of work that [Mr Hegarty] was involved in over the period of [his] retainer”.[6] Like the standard terms, there are a number of notable features to the schedule. Firstly, there are very few mentions of Mr Hegarty. Thus, it is impossible to determine exactly how Mr Hegarty was “involved in” the events set out. Secondly, it is apparent that a large number of lawyers, both solicitors and counsel, assisted the respondent from time to time, both with and without the Mr Hegarty and Mr Borick.[7] Thus, the degree of “involvement” of either of them is impossible to determine from the schedule. Thirdly, many items report that certain actions were carried out by the respondent himself. While I accept that this is unlikely to have been the case, the schedule throws no light on whom carried out these actions.
[6] FDN 12 at [11].
[7] See, for example, items 31, 35, 38, 40, and 52 of MSH2.
MSH3 is a copy of a letter from Mr Hegarty to the respondent dated 10 April 2012. This letter canvasses the actions currently being taken on behalf of the respondent by Mr Hegarty and others, and discusses the prospect of compensation and the options open to the respondent. It contains the following:
When I first met you at Port Augusta goal I made it clear to you that I would not be acting on a pro-bono basis and that I would act for you on the basis I would be paid if you eventually obtained compensation. I provided you with a draft agreement to that effect which I have always understood you accepted. On that basis I proceeded, and continue to act for you albeit you did not return the signed agreement to me.
I also made it clear to you that Kevin Borick would continue to act for you on the same basis. To date you have never given any indication that you were anything other than appreciative of the work undertaken on your behalf in respect of the various investigations undertaken, the work on the 3^rd and 4^th Petitions and the actions against Manock and James.
MSH4 is a copy of a letter from the respondent to Mr Hegarty, dated 16 April 2012. In this letter, the respondent expresses (amongst other things) the following views:
·He believes that his case has been politicised;
·His case has been subjected to many lengthy delays apparently without reason;
·Decisions were made and persons engaged on his behalf without any reference to him;
·The members of his team were fighting amongst themselves at the expense of his interests;
·His written instructions were ignored;
·History has been ‘cherry-picked’ to provide a lop-sided account of events;
·He regarded the question of compensation as moot at this point;
·Normal customs had not been adhered to, in that, on several occasions, counsel was retained in the absence of an instructor; and
·His current lawyers are acting for him on a pro bono basis.
He discusses the various strategies that have been proposed and gives instructions to Mr Hegarty. He refers to Mr Hegarty as his instructing solicitor, and as the solicitor on record. The letter contains the following passage:
I recognise the efforts and work done by yourself over the years and have no wish to see you placed in a difficult position financially or legally. Please forward me a copy of a draft agreement that we may come to a suitable resolution.
The respondent reiterates his request for a “draft agreement” at the conclusion of the letter.
MSH5 consists of a bundle of correspondence between Mr Hegarty and Mr Borick and various lawyers acting on behalf of the respondent, in which the applicants canvass their views on the respondent’s entitlement to compensation and seek payment of their fees. Various of this correspondence encloses attachments, including outlines of work done by various lawyers, an outline of argument, and an account for work done by Mr Borick. None of these attachments is included in the exhibit.
MSH6 is a copy of a letter dated 31 May 2017 from the respondent’s lawyer at that time to the Attorney-General, in which the respondent seeks an ex gratia payment from the State.
MSH7 is a letter from the Legal Profession Conduct Commissioner to Mr Hegarty, dated 9 October 2018, providing the Commissioner’s response to a complaint made by the respondent about Mr Hegarty in respect of an article in The Advertiser newspaper on 24 July 2018.
FDN 12 is, as previously stated, an affidavit of Mr Hegarty’s solicitor, Mr Turner. The affidavit exhibits, at FMBT1, a tax invoice rendered by Mr Borick to Mr Hegarty for work done on behalf of the respondent. The invoice is undated, save for a date in its footer of 30 June 2020. The invoice is broken into ten stages, with fees only sought in respect of the fourth to tenth stages inclusive. None of the stages contains a date of commencement or conclusion. None of the work for which fees is claimed is itemised. The sum of $427,750 is sought in total.
The affidavit contains a second exhibit, FMBT2, which is a draft revised statement of claim. By this statement of claim, Mr Borick seeks to be removed as an applicant, on the basis that any fees claimed by him are properly claimed through Mr Hegarty as the solicitor retaining him. By the statement of claim, Mr Hegarty seeks payment of the sum of $535,907.39, on the basis that he is owed the sum of $108,157.39 for his fees, and Mr Borick is owed the sum of $427,750 as set out in FMBT1.
The factual position of the respondent
The respondent’s position is very simple. It is that there is no agreement between the parties, either by way of contract or at common law, that the respondent would pay Mr Hegarty’s and Mr Borick’s fees in the event that he was released from prison and obtained compensation. His position is that the applicants were acting for him at all times on a pro bono basis. As a result, the applicants’ action must be dismissed.
The evidence relied on by the respondent
The respondent has not provided an affidavit in support of his application for summary judgment. He relies solely on the affidavit of his solicitor, Mr Selley, (FDN 9). This is on the basis that, even taken at its highest, the applicants’ evidence is insufficient to provide a basis for the causes of action pleaded.
Mr White objected to parts of FDN 9 on the basis that it was in the nature of submission; he did not object to its being considered by me on this basis. Mr Abbott QC, who appeared for the respondent was content that it be received on this basis. Further, Mr White objected to three of the exhibits to FDN 9, the first being MS1, which is an article written by Mr Borick in September 2011, in which he referred to the respondent’s lawyers as “his pro bono lawyers”. Mr Abbott says that he does not intend to submit that I should rely on this statement for the purpose of finding that the applicants were acting for the respondent on a pro bono basis; rather, this statement of Mr Borick is relied on to demonstrate that the respondent’s defence to the action is not spurious, unreasonable or lacking in prospects. I am prepared to allow MS1 for this purpose alone.
Mr White objected to MS4. Mr Abbott conceded the appropriateness of the objection and advised that MS4 would not be relied on.
Mr White also objected to MS5. MS5 is an email from Professor Moles to the respondent, which goes to whether the applicants were acting for the respondent on a pro bono basis. In the absence of any direct evidence from either Professor Moles or the respondent, Mr White objected to the introduction of evidence from Professor Moles. Mr Abbott’s position is that, as with MS1, he did not intend to rely on MS4 to support a finding that the applicants were acting for the respondent on a pro bono basis; rather, he seeks to rely on it to demonstrate that the respondent has a bona fide defence to the claim brought. As with MS1, I will allow reliance on MS5 for that purpose only and not as evidence of the fact that the applicants were working on a pro bono basis.
The legislative provisions in force in December 2004
The relevant provisions of the Legal Practitioners Act 1981 (“LPA”) in force at the time that Mr Hegarty says the retainer was agreed provide:
42 – Costs
…
(6)     A legal practitioner may make an agreement in writing with a client for –
(a)     payment of a specified amount by way of legal costs (which may – but need not – consist of a daily, hourly or other time-related rate for professional work carried out by the legal practitioner on the client’s behalf); or
(b)     payment of legal costs in accordance with a specified scale; or
(c)     subject to any limitations imposed by the Society’s professional conduct rules or the regulations – payment of a contingency fee to be calculated on a basis set out in the agreement on fulfilment of a condition stated in the agreement.
(7)The Supreme Court may, in proceedings under this section, rescind or vary an agreement under subsection (6) if it considers that any term of the agreement is not fair and reasonable.
Thus, to comply with the LPA, any retainer agreement which amounts to the payment of a contingency fee must be in writing, must set out the basis on which the fee is to be calculated, must state the condition on which the fee is to become payable, and must comply with the Law Society’s professional conduct rules.
The professional conduct rules in force at the relevant time were the Rules of Professional Conduct and Practice 2003 (SA) (“the Conduct Rules”). The relevant rule provides:
42.     Contingency Fees
42.1 A practitioner or firm of practitioners must not enter into a costs agreement under which the amount payable, or any part of the amount payable, to the practitioner or firm of practitioners is calculated by reference to a percentage of any judgment, settlement or monetary sum to be recovered by the client.
42.2 A practitioner or firm of practitioners shall not charge fees which are unfair or unreasonable or enter into a costs agreement the terms of which are unfair or unreasonable. In considering whether the fees or the terms of a cost agreement are unfair or unreasonable regard shall be had to:-
(a)the nature of the matter;
(b)the amount at stake in the matter;
(c)     the jurisdictions involved;
(d)     the urgency of the matter;
(e)the ability of the client to understand and appreciate the terms of the agreement;
(f)    the knowledge, experience and position of the client;
(g)whether the client has received independent advice about the fees or the agreement;
(h)whether the practitioner or firm has explained to the client any difference between the costs provided for by the agreement and the costs provided for by any relevant scale and the effect thereof on what can be recovered on a costs order;
(i)whether the costs agreement is a complying contingency costs agreement as defined below. A complying contingency costs agreement which provides for a solicitor/client fee which constitutes up to double the fees to which the firm or practitioner would otherwise be entitled if those fees were charged according to the scale container in the current applicable schedule to the rules of the Supreme Court will be regarded as prima facie fair and reasonable;
(j)the experience, reputation and ability of the lawyer or lawyers performing the services;
(k)any other relevant matter.
A complying contingency costs agreement is one:-
(a)which relates to a litigious matter other than a criminal or matrimonial matter;
(b)which is entered into either at the commencement of a practitioner’s retainer from the client or after initial investigations of the matter;
(c)which provides that in the event of the action being unsuccessful the practitioner either:-
(i)will not charge the client, or
(ii)will charge the client only disbursements or some defined amount or proportion of a disbursement;
(d)which relates to a matter where in the professional judgment of the practitioner the client’s claim has some prospect of success but where the risk of the claim failing and of the client having to meet his or her own costs is significant;
(e)where the practitioner has before the signing of the agreement informed the client of the client’s right to obtain independent legal advice and of the right to have the agreement reviewed by the Supreme Court pursuant to section 42(7) of the Legal Practitioners Act and of the right to have the fees charged reviewed by the Conduct Board under section 77A of the Legal Practitioners Act the agreement specifically records this;
(f)which:-
(i)is in writing and in plain English and sets out clearly the terms of the agreement and is signed by the client;
(ii)contains the provision that the client shall have a cooling off period of five clear business days from the signing of the contract during which he or she may, by giving notice in writing to the practitioner, terminate the contingency fee agreement.

As can be seen, Rule 42.2 requires fees to be fair and reasonable, and sets out a list of non-exhaustive factors to be taken into consideration when considering this question. The rule then defines a “complying contingency costs agreement”. It is clear that the type of agreement contemplated by this term is a “no win no fee” agreement, rather than one which would traditionally have been regarded as champertous. Agreements which are champertous are in fact prohibited by Rule 42.1. For an agreement to be considered a complying contingency costs agreement, the rule requires that the agreement be in writing, in plain English and signed by the client. It must also contain a cooling off period of five clear business days, and prior to signing the agreement, the solicitor must have advised the client of his right to obtain independent legal advice about the agreement. Importantly, the agreement must relate to a matter that is litigious but not criminal or matrimonial, and one which the practitioner, in the exercise of his professional judgment, has determined has some prospect of success.
Thus, all fee agreements must be fair and reasonable; s 42(7) of the LPA gives the Supreme Court the power to rescind or vary any agreement that is not so. A complying contingency costs agreement will fall within s 42(6) of the LPA, and is also subject to scrutiny by the Court under s 42(7).
The respondent’s submissions
The respondent says that the retainer asserted by the applicants is unenforceable both because it does not comply with the relevant provisions of the LPA and by virtue of the common law.
It is the respondent’s position that a contingency costs agreement that is not a complying contingency costs agreement is not permitted under s 42(6) of the LPA.
The respondent contends that the retainer agreement relied on by Mr Hegarty, although a contingency agreement, is not a complying contingency costs agreement and so is not allowed under the LPA. This is because, on Mr Hegarty’s own evidence, none of the requirements of Rule 42.2 was complied with.
Firstly, it is unknown if, in the professional judgment of Mr Hegarty the respondent had some prospect of success, as, not only is there no contemporaneous evidence of his views in this regard, he has not provided in his affidavit a statement that he believed that there was a prospect of success. The fact that the respondent’s conviction was ultimately overturned, he was freed from prison and obtained a payment from the State does not in itself indicate that, at the time that the retainer was entered into, Mr Hegarty believed, in his professional judgment, that there was a prospect of success. On the state of the law in force at that time, there was little or no prospect of achieving the result that was ultimately secured.
Secondly, there is no evidence of Mr Hegarty’s having advised the respondent of his right to obtain independent legal advice in respect of the retainer. Thirdly, there is no evidence that the agreement was in writing and in plain English and set out clearly the terms of the agreement and was signed by the client. The agreement exhibited as MSH1 is clearly not relevant as it is in respect of a family law dispute and sets out very clear requirements in relation to payment, including payment of funds into trust. It makes no reference to a contingency costs agreement. Mr Hegarty frankly acknowledges that the agreement was not signed by the respondent. Fourthly, there is no evidence that the agreement contained a cooling off period. The document exhibited at MSH1 contains no such provision.
On this basis, the respondent argues that, on Mr Hegarty’s own evidence, his case cannot be made out. The agreement alleged by Mr Hegarty is not a complying contingency costs agreement, as a result of which it is unenforceable under s 42 of the LPA.
As the costs agreement is unenforceable under the LPA, it must be seen whether it is enforceable under the common law.
Mr Abbott provided a comprehensive examination of the common law position in both the United Kingdom and Australia. Relying on authorities such as Murphy v Liesfield[8] and McNamara Business and Property Law v Kasmeridis[9] (Kasmeridis [2005]), he argued that the onus of proving a retainer at common law rests with the lawyer, noting, for example, that in Kasmeridis [2005], the Court said:
…the onus of establishing that an agreement was made rests on the solicitors. The onus is to be discharged having regard to the nature of the fiduciary relationship and the circumstances of dependence and vulnerability that may exist.[10]
[8] [1930] VLR 142.
[9] [2005] SASC 269.
[10] [2005] SASC 269 at [64].
He submitted, however, that a contingency fee agreement was traditionally void at common law, as being contrary to public policy, as demonstrated by cases such as Pittman v Prudential Deposit Bank Ltd,[11] Wallersteiner v Moir (No 2),[12] and Trendtex Trading Corp v Credit Suisse.[13] The decision of the High Court of Australia in Clyne v New South Wales Bar Association[14] (Clyne) introduced a departure from the English line of authority, in that it sanctioned contingency agreements in the following circumstances:
And it seems to be established that a solicitor may with perfect propriety act for a client who has no means, and expend his own money in payment of counsel’s fees and other outgoings, although he has no prospect of being paid either fees or outgoings except by virtue of a judgment or order against the other party to the proceedings. This, however, is subject to two conditions. One is that he has considered the case and believes that his client has a reasonable cause of a action or defence as the case may be. And the other is that he must not in any case bargain with his client for an interest in the subject-matter of litigation, or (what is in substance the same thing) for remuneration proportionate to the amount which may be recovered by his client in a proceeding: see Fleming, The Law of Torts (1957) p. 638, where it is pointed out that the position in the United States is different.[15]
[11] (1896) 13 TLR 110.
[12] [1975] QB 373.
[13] [1981] 3 All ER 520.
[14] (1960) 104 CLR 186.
[15] (1960) 104 CLR 186, 203.
Mr Abbott submitted, however, that this relaxing of the common law position did not extend to criminal matters, where contingency fee agreements remained contrary to public policy. He submitted that the common law as set out in British Waterways Board v Norman[16] remains the position in Australia with respect to criminal proceedings.
[16] (1993) 26 HLR 232.
In summary, the respondent’s position is that, as the alleged retainer with him was in respect of a criminal matter, it is contrary to public policy and therefore void. This would also preclude any recovery on a quantum meruit, in reliance on Smits & Ors v Roach & Ors[17] (Smits). Even if he is wrong about this, however, the respondent says that, as the alleged retainer is not a complying contingency costs agreement within the meaning of Rule 42.2 of the Conduct Rules, it is not enforceable by Mr Hegarty.
[17] [2002] NSWSC 241.
The respondent says that, on the basis of this analysis, he is entitled to summary judgment, or to have the claim dismissed on the basis that it is an abuse of process. As the agreement is illegal, void and unenforceable, there is clearly no basis for the claim, thus entitling him to summary judgment. Further, he argues that it is an abuse of the process of the Court for a practitioner to seek to enforce a retainer which is prohibited by the common law and does not comply with the relevant statutory provisions.
The applicants’ position
Mr White, on behalf of Mr Hegarty, submits that it is an undisputed fact that the respondent retained him as his solicitor for the period from December 2004 to August 2012, and Mr Borick as his counsel between December 2004 and 2011. This is made clear in the correspondence between them in 2012, which is exhibited at MSH3 and MSH4. Further, there can be no question that legal services were provided by both Mr Hegarty and Mr Borick to the respondent. The agreement between them was very simple; no fees would become payable to either of them until certain events occurred, those events being that the respondent was released from prison and he received compensation. It was a speculative fee agreement, or an agreement for deferred payment, but not a contingency fee agreement. He says that the issues in dispute between the parties, and in particular whether the applicants were acting for the respondent on a pro bono basis, are matters for oral evidence and cross‑examination at trial.
It is Mr Hegarty’s position that s 42 of the LPA does not apply to the retainer between the parties. He says that s 42(6) is permissive; it does not preclude the making of agreements in relation to fees which are not described within s 42(6). Furthermore, because the contingency does not go to the calculation of fees, by way of percentage or proportion of any judgment in favour of the respondent, it is not a prohibited agreement; rather it is the sort of agreement that is approved by the High Court in Clyne.
Mr White conceded that Clyne required two conditions to be satisfied for a conditional costs agreement to be permissible. The first is that the lawyer has considered the case and believes that the client has a reasonable cause of action or defence (as the case may be). Mr White submitted that, while there was no evidence before me that Mr Hegarty had made such a consideration, the outcome clearly indicates that there was merit in the case. The other condition, that a lawyer must not bargain with the client for an interest in the subject matter of the litigation is clearly met. In this case, there is no suggestion that Mr Hegarty’s fees were to be calculated on the basis of the quantum of any compensation received by the respondent; the payment of fees, which were to be calculated on the basis of Mr Hegarty’s standard rates, was contingent on the respondent being released from prison and receiving compensation. As a result, the agreement between Mr Hegarty and the respondent falls squarely into the category of cases sanctioned by the High Court in Clyne.
Mr White submits that the decision in Clyne raises the question whether s 42(6)(c) of the LPA is directed towards uplift or percentage fees; if this is the case, then the type of agreement such as that reached by the respondent and Mr Hegarty would not require legislative approval. Further, in this event, a contingency agreement which involves a previously champertous arrangement would now be permissible as long as it complied with the statutory requirements.
Mr White submitted that there remains no prohibition in relation to the use of contingency agreements in criminal matters. However, even if he were wrong about this, it is his position that the work that Mr Hegarty and Mr Borick were retained to do was not a criminal matter. While they did attempt to reopen the respondent’s appeal of his conviction, that was the only element of the work that they did that could properly be characterised as a criminal matter. While the work may have been ancillary to criminal proceedings, it was not, in fact criminal in nature, in that it included making an application for clemency, lobbying for a change in the law, and pursuing proceedings in the Medical Board, which led to gathering fresh evidence, which in turn led to the respondent’s ultimately successful appeal. He submitted that while the Conduct Rules may preclude the use of a contingency costs agreement in criminal matters, they could not possibly be interpreted as applying to non-criminal matters which are nonetheless associated with criminal matters.
While Mr White conceded that the terms of the retainer are currently unknown, he submitted that it was appropriate to hear oral evidence on its terms, and that, in fact, the only way to determine, now, the terms of the retainer, was to hear evidence from each party. The only way for this to occur is at trial.
As to the question of summary judgment, Mr White submits that Rule 144.2(2) of the Uniform Civil Rules 2020 (“the UCR”) is not materially different from Rule 232.2(a), in the Supreme Court Civil Rules 2006. The relevant authorities remain the same, with the leading authority being Ceneavenue Pty Ltd v Martin.[18] Mr White submits that Mr Hegarty has put forward sufficient evidence to demonstrate that he has a bona fide claim that has a realistic, rather than a fanciful, prospect of success.
[18] (2008) 106 SASR 1.
In respect of the claim for a quantum meruit, Mr White submits that there is no dispute that there was a retainer and that work was performed pursuant to it. The dispute is as to its terms, not its existence, or whether it was fulfilled or not. Having taken the benefit of those legal services, it would be unjust to deny Mr Hegarty and Mr Borick of any remuneration for the work they have done.
Consideration
The respondent seeks, alternatively, strike out of the applicants’ statement of claim, pursuant to Rule 34.1 of the UCR on the basis that it is frivolous, vexatious or an abuse of process of the Court, or pursuant to Rule 70.3, on the basis that it is frivolous, vexatious or an abuse of the process of the Court, or does not disclose a reasonable cause of action, or judgment for failure to disclose the basis for his action pursuant to Rules 143.1 and 143.2, or summary judgment on the basis there is no reasonable basis for prosecuting the claim and the cause of action, pursuant to Rule 144.2. These rules provide:
34.1—Strike out of filed documents
(1)The Court may order that a filed document or part of a filed document be struck out if—
(a)     it does not comply with these Rules; or
(b)     it is frivolous, vexatious or an abuse of the process of the Court.
(2)If the Court strikes out all or part of a document under subrule (1), it may if it thinks fit grant leave to file within a specified time an amended or substituted document rectifying the matter that caused the original document to be struck out.
70.3—Strike out
(1)     The Court may strike out all or part of a Claim or pleading if—
(a)     it does not comply with these Rules;
(b)     it is frivolous, vexatious or an abuse of the process of the Court; or
(c)     it does not disclose a reasonable cause of action or defence (as applicable).
(2)If the Court strikes out all or part of a document under subrule (1), it may if it thinks fit grant leave to file within a specified time an amended or substituted document rectifying the matter that caused the original document to be struck out.
143.1—Judgment for failure to disclose basis
(1)The Court may grant judgment dismissing an action on the ground that no reasonable cause of action in the case of a claim, or basis for the application in the case of an originating application, is capable of being disclosed.
(2)The Court may grant judgment in favour of an applicant in an action on the ground that no reasonable defence in the case of a claim, or basis to contest the application in the case of an originating application, is capable of being disclosed.
143.2—Judgment for abuse of process
(1)The Court may grant judgment dismissing an action on the ground that it is frivolous, vexatious or an abuse of the process of the Court.
(2)The Court may grant judgment in favour of an applicant in an action on the ground that a defence of or contest to it is frivolous, vexatious or an abuse of the process of the Court.
144.2—Summary judgment
(1)The Court may, on application by a party, give summary judgment in favour of an applicant—
(a)     on a claim if there is no reasonable basis for defending the claim;
(b)     on a cause of action in a claim if there is no reasonable basis for defending the cause of action; or
(c)     on a separate issue that arises in a claim if there is no reasonable basis for contesting that issue.
(2)The Court may, on application by a party, give summary judgment against an applicant—
(a)     on a claim if there is no reasonable basis for prosecuting the claim;
(b)     on a cause of action in a claim if there is no reasonable basis for prosecuting the cause of action; or
(c)     on a separate issue that arises in a claim if there is no reasonable basis for contesting that issue.
(3)An application for summary judgment must be made by filing an interlocutory application and supporting affidavit in accordance with rule 102.1.
In the recent decision of Adelaide Brighton Cement Ltd v Hallett Concrete Pty Ltd & Ors[19] (Adelaide Brighton Cement), Doyle J considered the operation of Rules 70.3, 143.1, 143.2, and 144.2. He said the following:
[19] [2020] SASC 161.
Chapter 12 of the Uniform Civil Rules is entitled Early finalisation, and deals in Parts 3 and 4 with summary dismissal and summary judgment. In respect of the former, UCR 143 provides for summary dismissal on two grounds, namely on the ground that no reasonable cause of action (or defence) is capable of being disclosed, or on the ground that the action (or defence) is frivolous, vexatious or an abuse of process.
…
Summary judgment: general principles
Focussing upon the situation where, as here, a respondent seeks summary judgment on the applicants claim, under UCR 144.2(2)(a) the respondent must establish that there is no reasonable basis for prosecuting the claim. This may be contrasted with the test under SCR 232 of the 2006 Rules (no reasonable basis for the claim), and the test under s 31A of the Federal Court of Australia Act 1976 (Cth) (no reasonable prospect of successfully prosecuting the proceeding).
I do not think that there is any material difference between the test under UCR 144.2(2)(a) and the test that applied under SCR 232. The focus remains upon the existence of a reasonable basis for the claim, and the addition of the words for prosecuting does not add anything (other than, perhaps, to achieve some symmetry with the reference to for defending which appeared in SCR 232(2)(a), and remains in UCR 144.2(1)).
Assuming equivalence between these tests, I note that there has been some discussion in the authorities by way of comparison between the test under SCR 232 and the test under its predecessor in the 1987 Rules. While it has been accepted that SCR 232 was intended to “lower the bar”, there has been some disagreement as to the extent to which this is so. In Ceneavenue Pty Ltd v Martin, Debelle J (with whom Duggan and Anderson JJ agreed) accepted that there had been a lowering of the bar, but also suggested that it did not involve any “material difference” or “substantial relaxation” in the approach to be taken to summary judgment. Subsequently, in Davies v Minister for Urban Development and Planning, Bleby J doubted whether the Full Court in Ceneavenue Pty Ltd v Martin had given proper effect to the words used in SCR 232. But perhaps more significantly, his Honour also expressed the view that the Full Court’s decision had in any event been overtaken by the decision of the High Court in Spencer v Commonwealth.
The decision of the High Court in Spencer v Commonwealth was a decision in relation to s 31A of the Federal Court of Australia Act. Although there is some basis for thinking that the intended scope of this section may be broader than SCR 232 and UCR 144.2, the focus of the High Court’s analysis was upon the words “reasonable prospect of success”. In my view, there is no material difference between this test, and the test under UCR 144.2. Both require a focus upon whether the claim has a “reasonable” basis or prospect.
It is accurate to observe that, at least from a linguistic standpoint, “reasonable basis” is directed to the present, whereas “reasonable prospect” is directed to the future. However, as Kourakis CJ explained in Collins v Djunaedi, it is doubtful whether any difference between the two will ever lead to different results. It is difficult to see how there could be a reasonable prospect of future success in prosecuting a claim unless there is a presently existing reasonable basis upon which to prosecute it. And it is difficult to conceive of a claim which has a reasonable basis but which does not have a reasonable prospect of success. It seems to me that both tests require consideration of the existing basis for the claim, whilst at the same time allowing for the possibility that further or different evidence may emerge during the prosecution of the claim, or be presented during any trial of the claim.
For these reasons, I agree with the observation by Bleby J in Davies v Minister for Urban Development and Planning to the effect that any need for debate about the extent of the lowering of the bar under the South Australian rules has been overtaken by the decision in Spencer v Commonwealth. While aspects of the reasoning in cases such as Ceneavenue Pty Ltd v Martin remain of assistance, they should be seen through the prism of the High Court’s reasons in Spencer v Commonwealth.
By way of summary of the approach articulated in Spencer v Commonwealth, it can be said that the power to determine a claim summarily should not be exercised lightly. Exercise of the power requires a practical assessment of whether the applicant has real, as opposed to merely fanciful, prospects of success. While the Court need not be satisfied that the claim is hopeless or bound to fail, nevertheless it must be cautious not to do a party injustice by summarily determining an action, particularly where there are disputed issues of fact or law or mixed fact and law, merely because the Court considers that the claim is unlikely to succeed. However, beyond these very general guidelines, the Court should focus upon the words used in the rules and avoid applying any judicial gloss.
Related to the requirement that the Court undertake a “practical” assessment is the notion that the Court should not embark upon a ‘mini trial’ of the claim. Rather, the claim should be assessed in a summary manner, while being cognisant of the incomplete nature of the evidence upon which the Court’s decision must be based. Adversarial argument may assist, and indeed may result in the emergence of a sufficiently clear answer to a complex issue that summary judgment is appropriate. On the other hand, the need for prolonged argument may be indicative of a reasonable basis for the claim.
Summary dismissal and striking out: general principles
The grounds upon which the Court may strike out a pleading under UCR 70.3, or summarily dismiss an action under UCR 143 are expressed in similar terms. The grounds for each encompass both (a) a claim, pleading or action that is frivolous, vexatious or an abuse of process and (b) the failure or inability to disclose a reasonable cause of action.
The courts have generally eschewed any attempt to define frivolous and vexatious. While the concepts overlap to some extent, and are sometimes treated as a single compendious concept, the former invites a focus upon whether the claim or issue is worthy of serious attention, whereas the latter invites a focus upon whether the claim or issue is being pursued for the purposes of harassing or vexing the other party.
Abuse of process is a broad concept. It may take a number of different forms, but is usually associated with some improper or collateral purpose. Relevantly in the present context, it will be informed by the overarching obligations of the parties and their lawyers under UCR 3.1, and extend to the pursuit of a claim which does not have a proper basis in light of that rule. The claim might lack a proper basis because it is based upon an assertion for which there is no basis in the material available to the party, which misstates the material upon which it is based, or which extends beyond any assertion for which that material might provide a basis.
As to this last matter, I refer to my earlier articulation (at [26]-[28] above) of the distinction between a pleaded case which is based upon a general inference with a proper foundation, and a pleaded case that involves impermissible fishing or trawling for a case. The latter may be seen as either a species of abuse of process, or the absence of a reasonable basis for the pleaded case.
It has been suggested that abuse of process in this context may include the pursuit of a pleading that does not disclose a reasonable cause of action. However, I consider it unnecessary to dwell on whether abuse of process extends this far given that the failure or inability to disclose a reasonable cause of action is itself a basis for striking out a pleading or summarily dismissing an action.
While the criteria for the exercise of the Court’s power to strike out and summarily dismiss are expressed in similar terms, the difference between the two mechanisms for challenging an applicant’s claim lies in the nature and focus of the challenge. The power to strike out under UCR 70.3 is directed to the applicant’s “Claim or pleading” (with the former defined as the document by which an action is commenced), whereas the power to dismiss is directed to the applicant’s “action” (which is defined to mean a claim in the sense of a proceeding in which the applicant claims a remedy for a cause of action). The focus of the former is thus upon the articulation of the applicant’s case in the relevant document, usually a pleading. And the focus of the latter is upon the applicant’s case itself.
The difference in focus between the two has implications for the use that may be made of evidence in the determination of the applications. In the case of a strike out application, the Court’s consideration of the nature and adequacy of the claim, as disclosed in the pleading itself, may require recourse to a document or documents referred to in the pleading (such as a contract) in order to make sense of the pleading. It may also require consideration of some evidence so as to enable the Court to understand the pleaded allegations in their proper context, and hence expose their inadequacy or their frivolous, vexatious or abusive character. However, it will not ordinarily require any consideration of evidence going to the underlying merits of the applicant’s claim, let alone making findings on that evidence.
In the case of a dismissal application, on the other hand, there will often be greater scope for reliance upon evidence so as to make good the proposition that the applicant’s case itself is deficient in some respect, or is otherwise frivolous, vexatious or an abuse of process. That said, the nature of the exercise will nevertheless differ from that which is undertaken on a summary judgment application. While the difference is difficult to articulate, an application for summary dismissal is typically addressed more to the absence of any identifiable proper claim, whereas an application for summary judgment is typically addressed more to a particular defect in, or answer to, an otherwise properly articulated and disclosed case.
The difference between strike out and dismissal applications also relates to, and explains, the difference in the consequences to which they lead. The former leads to an order that the relevant pleading (or part thereof) be struck out. However, as the conclusion justifying this order is one based upon a deficiency in the pleading, and not necessarily the case itself, the applicant is usually given an opportunity to replead. The latter, on the other hand, because it is predicated upon a defect in the applicant’s case (rather than merely the pleaded articulation of it), leads to an order that the action or proceeding itself be dismissed. Whilst such an order brings the relevant action or proceeding to an end, it does not ordinarily give rise to res judicata or otherwise prevent a fresh claim being brought in appropriate circumstances.
While I have attempted to summarise what I see as the key features of, and differences between, summary judgment, summary dismissal and strike out applications, I accept that in practice the distinctions are often difficult to draw and observe, and there is, quite appropriately, scope for overlap and flexibility in their operation.
(citations omitted)

Doyle J sets out the difference between strike out, summary dismissal and summary judgment, and the different consequences of each order. I will deal first with the application for summary judgement, as it seems to me that this is the most “extreme” of the remedies sought by the respondent in that such an application acknowledges that the applicant’s case is properly articulated but nonetheless contains such a fundamental defect that it cannot be allowed to stand. It is also important to note Doyle J’s view that while the wording of Rule 144.2 is different to that in Rule 232 of the Supreme Court Civil Rules 2006, there is no material difference between the tests that should be applied and that Spencer v Commonwealth[20] remains the leading authority. In this regard, I must make a practical assessment of whether Mr Hegarty has a real, as opposed to a fanciful, prospect of success. I must exercise caution and not grant summary judgement merely on the basis that I do not consider the claim is likely to succeed, particularly in circumstances where there are disputed issues of fact or law.
Is there a reasonable prospect that the Court will find that the agreement relied on by Mr Hegarty is enforceable under the LPA?
[20] (2010) 241 CLR 118.
It is important to note that the respondent does not accept the factual matters alleged by Mr Hegarty in FDN 12. Nonetheless, for the purpose of the application, he takes those facts as the basis for his application that the retainer is not enforceable because it does not comply with the provisions of the LPA. As a result, while I make no findings of fact as to what occurred between Mr Hegarty and the respondent at their first meeting at Port Augusta Prison in August 2004, my decision is based on an assumption that Mr Hegarty’s account of events will be upheld at trial. I emphasise that this does not amount to a finding that his account has been or will be accepted; it is merely the basis on which I must consider whether the respondent’s application should be granted or dismissed.
The operation of the iteration of s 42 of the LPA that was in force in December 2004 was examined by the Full Court of the Supreme Court in Kasmeridis 2005. In Kasmeridis 2005, the solicitor was seeking to enforce a costs agreement that was in writing, but in the absence of written consent from the client. There was, however, a contemporaneous file note made by the solicitor, recording the client’s acceptance of the terms and conditions set out in the written agreement. At [36]-[37], the Court explained the rationale behind the requirement that retainer agreements must be in writing:
Statutory requirements that retainer agreements be in writing have as their historical base the fiduciary relationship between solicitor and client and the recognition of the need to address the vulnerability of the client to the solicitor.
The retainer in the present case attracts to the relationship the fiduciary duties that are inherent in a solicitor-client relationship. The principles of equity and the common law are available to protect a client against any unfairness in an agreement.
(citations omitted)
The Court makes it clear that s 42 is not to be interpreted in such a way that any of the protections afforded to a client by the common law are removed; the client is to have the protections offered by s 42 in addition to those offered at common law:
Section 42(6) is to be interpreted against the background that its terms were designed to promote sound and reasonable regulation of a profession that owes fiduciary duties to clients. The subsection, by its very terms, acknowledges that it is addressing an aspect of the relationship of solicitor and client. That relationship carries accepted obligations of confidence, trust and dependence. The section is not to be construed as taking away the protection provided to a client by the common law.[21]
[21] [2005] SASC 269 at [47].
The Court stressed the importance of the solicitor’s duty of disclosure in respect of the terms of the retainer:
In the present case, vulnerability is derived not only from the inherent nature of the relationship between solicitor and clients, but also from the factual matrix. The clients, facing the possible loss of their home, sought urgent legal advice and assistance. In the circumstances, the clients were not concerned with the manner in which the advice and assistance were to be obtained. It was the solicitors’ duty not to take advantage of this situation by failing to adequately inform the clients of all matters relevant to the proposed retainer agreement.[22]
[22] [2005] SASC 269 at [52].
In Kasmeridis (2005), the Court found that the retainer agreement was an agreement in writing, because there was contemporaneous evidence of the client’s acceptance.
What the Court says in this regard is important:
The statutory requirement that an agreement be made in writing is sufficiently satisfied if there is written confirmation of the existence of an agreement. This accords with the view adopted by the Judge that an email sent by the respondents to the appellant acknowledging their acceptance of the terms of the retainer agreement would have sufficed for the purposes of section 42(6). In effect, on the interpretation advanced by the clients, had the telephone conversation between Mr Kasmeridis and Mr Viscariello on 9 February 2004 been an email exchange, and accordingly in visible written form, the terms of section 42(6) of the Legal Practitioners Act would have been satisfied. The appellant would have been able to rely upon the retainer agreement when preparing its account. Such an interpretation does not rest in logic. Why should an email exchange be reliable evidence or in any event more reliable than other evidence of agreement?
The retainer agreement itself was in writing. The terms of that agreement were in writing. There is evidence that the clients had orally accepted those terms. In addition, there is evidence that the respondents’ oral acceptance of the retainer agreement was in fact recorded in writing. This latter written record was not in our view essential in order to comply with section 42(6).
Section 42(6) of the Legal Practitioners Act should not be construed to require a client’s acceptance of a costs agreement to be in a written form. The legislative history of the provision, the common law concerning written agreements, the definition of “writing” in the Acts Interpretation Act, the protection offered by equity and the overriding protection offered by section 42(7) provide overwhelming support against such a construction.
It is to be borne in mind that the onus of establishing that an agreement was made rests on the solicitors. This onus is to be discharged having regard to the nature of the fiduciary relationship and the circumstances of dependence and vulnerability that may exist. In the present case, the clients’ anxiety about the loss of their home is a circumstance that would call for careful scrutiny of the relevant events in determining whether an agreement was made.[23]
[23] [2005] SASC 269 at [61] – [64].
The effect of this is clear: the terms of the agreement must be in writing; there must also be evidence of the client’s acceptance of those terms, although this acceptance need not itself be in writing. Once it has been established that s 42(6) has been satisfied, a client can seek recourse from s 42(7), which gives the Court power to vary or rescind an agreement which it considers is not fair and reasonable. It seems to me, however, that s 42(7) has no role to play, until s 42(6) is satisfied. Subject to the separate requirements of s 42(6)(c), the fairness and reasonableness of the agreement does not come into question until it is determined that the agreement is in writing. The onus of establishing that there is an agreement in writing rests on the solicitor.
The requirement that a retainer must be in writing was acknowledged by the Full Court in Renton Resources Pty Ltd & Anor v Johnson Winter & Slattery,[24] a decision which was delivered three weeks before the Full Court decision in Kasmeridis (2005). At [30], Anderson J, with whom Vanstone and Layton JJ agreed, said:
Section 42(6) requires an agreement in writing for the payment of a specified amount by way of legal costs. The question of what was an agreement in writing for these purposes was discussed by Fry J in Re Raven; Ex parte Pitt (1881) 45 LT 742 at 743 as follows:
What is an agreement in writing? It must be a document which shall show all the terms of the bargain between the parties and show by writing the accession of both parties to those terms.
[24] [2005] SASC 231.
Judge Lunn, in Catto & Ors v Hampton Australia Limited (In Liquidation) & Ors,[25] set out the position even more expressly:
S 42(6) stipulates that “a legal practitioner may make an agreement in writing with a client”. The “may” in sub (6) is imperative and does not allow an agreement in terms of subs (6)(a) for time based charges to be made other than in writing: Civil Procedure SA, Vol 2, [23,920.5]. I am not aware of any direct authority to this effect, but it is implicit in the reasons in Renton’s case and Pirone’s case mentioned below. If it were otherwise, the requirement of writing would be pointless. Counsel for the defendants referred to authorities that a retainer for a solicitor need not be in writing. The mandatory effect of subs (6) is not contrary to those authorities, but it means that that part of the retainer agreement which deals with a solicitor’s right to charge on a time-costing basis must be in writing. The writing referred to in subs (6) must be sufficient to constitute the essential terms of a legal agreement for the solicitor to be paid its costs in this manner.
…
This does not mean that there cannot be some implied terms in such an agreement, but the essential terms have to be in writing.[26]
[25] [2007] SASC 360.
[26] [2007] SASC 360 at [7] – [8].
The effect of these authorities is clear. If a solicitor wishes to enter into a retainer agreement with a client, by which fees are calculated by reference to a time related rate or by reference to the relevant Court scale, the essential terms of that agreement must be in writing. An agreement for the payment of a contingency fee must also be in writing, but is subject to further conditions which are discussed below. There must also be evidence of the client’s consent to the terms set out in the retainer. Further, as a fiduciary, the onus is on the solicitor to ensure that they comply with their obligation of disclosure when obtaining the client’s consent, while taking into consideration any special vulnerability from which the client may be suffering.
In Pirone v Craig J Roberts (Solicitor) Pty Ltd trading as Paul Kirk, Roberts & Co,[27] Layton J considered the enforceability of a “no win-no fee” retainer agreement. The terms of the agreement were set out in writing; there was a dispute between the parties as to whether that document had been provided to the client. There was no direct evidence that this had occurred; the solicitor relied only on his usual practice to establish that the client had been provided with a copy of the document setting out the terms of the retainer, while the client denied that she had been provided with this document. Layton J was not satisfied that the solicitor had discharged his onus in this regard. She said:
There is no direct evidence that the defendant accepted the no win – no fee agreement, either orally or in writing. There is no evidence which contradicts her statement that the first time she became aware of the terms of the no win – no fee retainer agreement was when Mr Lieschke from Lieschke Weatherill handed her a copy when she went to see him to obtain advice in March 2003.[28]
[27] [2006] SASC 134.
[28] [2006] SASC 134 at [35].
She found that the requirements of s 42(6) had not been complied with and so was unable to find that the no win-no fee agreement had been entered into. The solicitor was not entitled to recover the fees sought.
I note that, in her judgment, Layton J does not make specific reference to the application of s 42(6)(c) to the facts of that case. She deals, rather, with the application of s 42(6) generally.
In addition to the general requirements of s 42(6) of the LPA, I am of the view that s 42(6)(c) imposes further requirements of its own, which is that an agreement for the payment of a contingency fee, as well as being in writing, must also comply with any requirements set out in the Conduct Rules. Effectively, the LPA elevates any provisions of the Conduct Rules relating to contingency agreements to the status enjoyed by the LPA itself.
Rule 42 of the Conduct Rules is set out at [30] hereof. In its essence, it provides two things. The first is that a contingency costs agreement, which is champertous in the traditional sense, in that the fee is calculated by reference to a percentage of any amount recovered by the client, is forbidden. The second is that fees must not be unfair or unreasonable, and the terms of any costs agreement must also not be unfair or unreasonable. The rule sets out a non‑exclusive list of the matters to be taken into consideration when determining whether fees or the terms of an agreement are unfair or unreasonable.
One of the matters to be taken into consideration when determining whether fees or an agreement are unfair or unreasonable is whether the agreement is a complying contingency costs agreement. For a contingency agreement to fall with the definition of a complying contingency costs agreement:
·It must not be in respect of a criminal matter or a matrimonial matter;
·It must be for a litigious matter;
·It must be entered into at the commencement of the practitioner’s retainer, or after an initial period of investigation;
·It must be on a no win – no fee basis, or on the basis that disbursements only will be charged in the event that the action is unsuccessful;
·The practitioner must have exercised his or her professional judgment to determine that the claim has some prospect of success, but where there is risk of failure, resulting in the client having to pay his or her own costs, is significant;
·The practitioner must inform the client of his or her right to obtain independent legal advice in respect of the agreement;
·It must be in writing in plain English and clearly set out the terms of the agreement;
·It must be signed by the client; and
·It must contain a term that the client has a cooling off period of five clear business days.
The effect of the rule is that, if all of the requirements set out above are fulfilled, and the amount claimable under the costs agreement is not more than double the fees that the solicitor would be able to recover under the Supreme Court Scale, then it is regarded as prima facie fair and reasonable.
I note that the rule does not prohibit a contingency costs agreement if it is not a complying contingency costs agreement. I take this to mean that a contingency costs agreement that is not a complying contingency costs agreement may be allowed (as long as it is not champertous in nature) if it is found to be fair and reasonable.
I also take the view that if an agreement which is purportedly made under s 42(6)(c), is found not to be fair and reasonable, it is not an enforceable agreement under s 42(6). In this situation, there is no role for the Court to play in rescinding or varying any terms of the agreement under s 42(7). This is because s 42(7) only applies to agreements which are compliant with s 42(6), that is, they are in writing and where they are for payment of a contingency fee, they comply with Rule 42 of the Conduct Rules.
Is there a real prospect of Mr Hegarty’s establishing that there existed between him and the respondent an agreement in writing?
On the basis of his own evidence, I am of the view that there is no real prospect of his establishing that there was an agreement in writing. This is for the following reasons.
At the outset, I must address Mr White’s submission that the agreement as deposed to by Mr Hegarty was not a contingency agreement, rather it was a speculative costs agreement, and that the LPA raises the question whether it sanctions agreements which would be regarded as champertous. In my view, this is simply not the case. The agreement is without a doubt a contingency agreement within the meaning of the LPA. By virtue of the fact that the LPA has elevated the terms of the Conduct Rules to the status of legislation, champertous conduct is clearly prohibited by the LPA, and the type of agreement which the LPA regards as a contingency fee, is the no win – no fee agreement. Thus, whether it is called a speculative fee agreement or something else, the agreement contended for by Mr Hegarty is a contingency agreement within the meaning of the LPA.
It is Mr Hegarty’s evidence that he handed the respondent a copy of his standard terms of engagement. He no longer has a copy of the document that he gave the respondent, however, the standard terms of engagement that he gave to the respondent contained similar provisions to the document exhibited at MSH1 to FDN 12.
If Mr Hegarty were suggesting that the full extent of the agreement between himself and the respondent was embodied in the document exhibited at MSH1, or a document similar to it, then there would be a reasonable prospect of establishing that the terms of the agreement between the parties were in writing. However, this is not what he is asserting. He asserts that it is a term of the agreement between them that, as he acknowledged that the respondent was not in a position to pay his fees as they were incurred, he was prepared to wait until finalisation of the matter and for his fees to be paid from any compensation payment made to the respondent.
The document exhibited at MSH1 does not reflect these terms. It is an agreement to represent a client in a family law dispute. It requires an immediate payment of $1,000 into Mr Hegarty’s trust account. It requires monthly invoices to be paid within fourteen days of receipt. It states that Mr Hegarty will cease work on the client’s file if the invoices are not paid in accordance with this requirement.
On the basis of Mr Hegarty’s evidence, this is clearly not the agreement that he says he entered into with the respondent. None of these terms applies to the agreement between him and the respondent.
Equally importantly, the agreement does not contain terms to the effect that the respondent is not required to make any payment to Mr Hegarty for his fees or indeed for disbursements, and in particular, for Mr Borick’s fees, until after the conclusion of the matter, and then only in the event that the respondent received compensation.
The agreement exhibited at MSH1 cannot be the document which sets out the terms of the agreement between Mr Hegarty and the respondent. It in no way accords with the evidence that he gives as to the terms of the agreement between them. It is not Mr Hegarty’s evidence that the written agreement was amended or modified to embody the terms that he has described; on the basis of the evidence in FDN 12, the essential terms of the agreement, that is, that Mr Hegarty would wait to be paid until the conclusion of the matter, and then only in the event that the respondent was released from prison and received compensation, were not recorded in writing.
While I accept that the content of a lost document may be established by secondary evidence, Mr Hegarty’s evidence is not that the essential terms of the agreement between him and the respondent were set out in writing, which document was then lost. The effect of his evidence is that the no win - no fee component of the agreement was an oral term. This does not fulfil the essential requirement of s 42(6) as explained by Judge Lunn:
The writing referred to in subs (6) must be sufficient to constitute the essential terms of a legal agreement for the solicitor to be paid its costs in this manner.[29]
[29] Catto & Ors v Hampton Australia Limited (In Liquidation) & Ors [2007] SASC 360 at [7].

No amount of oral evidence can overcome this defect.
I am of the view that the letter from the respondent, exhibited at MSH4, does not provide any assistance to Mr Hegarty. While the respondent admits that Mr Hegarty was the solicitor on the court file, that acknowledgment says nothing as to the terms of the agreement between them. Further, his request, that Mr Hegarty provide him with “a draft agreement that we may come to a suitable resolution” does not assist. It certainly does not amount to an acknowledgment that there was currently or had previously been an agreement between them as to the payment of fees in certain circumstances; all it does is indicate that the respondent was willing, in April 2012, to come to an agreement with him as to fees.
Equally importantly, there is no evidence that the respondent accepted the terms of the agreement, either as set out in a document the same as or in similar terms to MSH1, or as described by Mr Hegarty. Mr Hegarty’s own evidence is insufficient to establish this fact, even when taken at its highest. His evidence is that the respondent “appeared to accept” the terms put to him. It goes no higher than this. He acknowledges that the respondent did not return the acknowledgement slip, nor does he suggest that the respondent’s consent was conveyed in any other way.
On the basis of Mr Hegarty’s evidence, there is no reasonable prospect that he will be able to establish that there was an agreement in writing between him and the respondent.
Even if I am wrong and there is a reasonable prospect that Mr Hegarty will be able to establish that the agreement between him and the respondent was in writing, I consider that there is no reasonable prospect that Mr Hegarty will be able to establish that the agreement is compliant with s 42(6)(c).
It is clear that the agreement as described by Mr Hegarty is a contingency costs agreement within the meaning of the Conduct Rules. It is not champertous in nature (that is, the practitioner’s fees are not to be calculated based on a percentage of the “fruits” of the litigation), and it is one where the practitioner will not charge the client in the event that the action is unsuccessful.
It is also clear, however, that the agreement is not a complying contingency costs agreement. Taking Mr Hegarty’s evidence at its highest, and assuming that the matter is not a criminal matter, there is no evidence from Mr Hegarty that he exercised his professional judgment to conclude that there was some prospect of the respondent being released from prison and receiving compensation. Mr White put to me that the result in itself showed this to be the case. In my view, the ultimate outcome does not necessarily mean that at the commencement of the retainer a solicitor in Mr Hegarty’s position, exercising his professional judgment, would form the view that there was some prospect of success, given that success was dependent on both the discrediting of at least one of the prosecution’s key witnesses, and a significant change in legislation. Given the numerous, varied and unsuccessful attempts that had been made to secure the respondent’s release, or even to reopen his appeal by December 2004, it is difficult to accept that a practitioner exercising his or her professional judgment would conclude that the respondent’s case had some prospect of success. However, just as the outcome is not relevant in determining this question, I am also not convinced that this consideration is relevant.
What is relevant in determining this question is the fact that Mr Hegarty has not deposed to considering the matter, and concluding that, in his professional judgment, there was some prospect of success in the attempts to have the respondent’s conviction overturned, and compensation awarded. Given that he has not deposed to this fact, one must assume that, either he did not turn his mind to the prospects of success, or he did not hold that belief.
As to the remaining elements of a complying contingency costs agreement, Mr Hegarty does not say that he advised the respondent of his right to obtain independent legal advice on the agreement, nor does the agreement as MSH1 contain such a term. The agreement was not signed by the respondent. It did not provide for a cooling off period.
On this basis, I conclude that the agreement was not a complying contingency costs agreement.
As a non-complying contingency costs agreement, it must be determined whether the agreement is fair and reasonable.
In McNamara Business & Property Law v Kasmeridis[30] (Kasmeridis [2007]), the Court held that the fairness and reasonableness of the agreement is to be determined at the time that the agreement is entered into.[31] Doyle CJ described the concept of fairness and reasonableness in the following way:
[30] [2007] SASC 90.
[31] [2007] SASC 90 at [45]
The concept of an agreement being fair and reasonable is deceptively simple. In In Re Stuart [1893] 2 QB 201 Lord Esher MR, in a passage often cited with approval, summarised the position. He is referring to s 9 of the 1870 Act, one of the provisions to which I just referred. He said at 204-205:
… By s 9 the Court may enforce an agreement if it appears that it is in all respects fair and reasonable. With regard to the fairness of such an agreement, it appears to me that this refers to the mode of obtaining the agreement, and that if a solicitor makes an agreement with a client who fully understands and appreciates that agreement that satisfies the requirement as to fairness. But the agreement must also be reasonable, and in determining whether it is so the matters covered by the expression “fair” cannot be re‑introduced. As to this part of the requirements of the statute, I am of opinion that the meaning is that when an agreement is challenged the solicitor must not only satisfy the Court that the agreement was absolutely fair with regard to the way in which it was obtained, but must also satisfy the Court that the terms of that agreement are reasonable. If in the opinion of the Court they are not reasonable, having regard to the kind of work which the solicitor has to do under the agreement, the Court are bound to say that the solicitor, as an officer of the Court, has no right to an unreasonable payment for the work which he has done, and ought not to have made an agreement for remuneration in such a manner. …
This was the approach taken by the Master. It may be that the Court retains an inherent power to supervise costs agreements, and to set them aside, in the exercise of its power over practitioners. It is not necessary to decide that point. In the present case the only question is the proper application of the statutory provision.
Similar provisions have been adopted in other Australian jurisdictions, and by and large they have been applied in a manner that reflects the English case law. The position is conveniently summarised in Dal Pont Law of Costs (Lexis Nexis Butterworths, Australia, 2003) at [2.27]-[2.37].
The South Australian provision is expressed slightly differently from the English model and from other legislation. It requires the Court to consider not whether the agreement is fair and reasonable, but whether “any term of the agreement is not fair and reasonable”. In the present case the difference of expression is not material.
In that setting I consider that this Court should, as I have already said, follow the approach taken by the English cases, and the approach taken in other Australian jurisdictions under similar legislation. It is for the practitioner to show that the agreement is fair and reasonable, if the client raises a challenge on those grounds and those terms are to be applied in the manner indicated by Lord Esher in the passage set out above.
The factors to be taken into account when deciding whether an agreement is fair and reasonable will depend upon the circumstances of the case. It is neither practical nor desirable to try to set out a standard list of relevant matters. The relevant matters will vary according to the scope of the retainer; the terms of the agreement; the kind of legal work undertaken; the client’s knowledge and circumstances, and, no doubt, other circumstances.
However, the cases emphasise as a basic consideration the question of whether the client’s decision to agree to the terms of the costs agreement was a free and informed choice, the client having been given the advice that would give the client a fair understanding of the operation and effect of the costs agreement: see, for example, Brown v Talbot & Olivier (1993) 9 WAR 70 at 77; Law Society of NSW v Foreman (1994) 34 NSWLR 408 at 435-437 Mahoney JA.[32]
[32] [2007] SASC 90 at [22] – [28].
This was applied by Judge Withers in Jones v Brian K Deegan & Associates,[33] and by Stanley J in Piper Alderman (A Firm) v Australian Medic‑Care Company Ltd & Anor.[34]
[33] [2011] SASC 44.
[34] [2011] SASC 234.
In my view, there is no reasonable prospect of Mr Hegarty’s establishing that the manner in which the agreement was entered into was fair. On the basis of his evidence, it is clear that he did not advise the respondent of the options available to him in terms of representation, did not provide any advice as to the effect of the agreement that was proposed, did not suggest that the respondent seek independent legal advice in relation to the agreement, or provide an estimate of the likely fees to be incurred, or even of the nature and extent of the work that was to be undertaken. While I accept that it would have been extremely difficult to estimate the likely cost of any work done by Mr Hegarty or Mr Borick, it appears that there was no attempt even to quantify it in broad terms or to define the scope of the work to be undertaken. It appears that there was also no attempt to quantify any compensation that might be achieved in the event that the respondent had his conviction set aside, and to compare that estimated figure with the costs (or at least a broad range of the costs) likely to be incurred in achieving that result.
At the time of the respondent’s meeting with Mr Hegarty, he had been in prison for more than nine years. He was in Port Augusta Prison, some 300 km from Adelaide. He had appealed once and on two occasions, sought to reopen this appeal or bring a second appeal. He had sought special leave to appeal to the High Court twice; on each occasion, special leave was refused. He had petitioned the Governor for mercy five times. The last petition was outstanding at the time of his final appeal in 2014.
There can be no doubt that a person in the position of the respondent would be a vulnerable person who should be fully informed of all of the circumstances and details of the agreement that he was being asked to enter into, advised of the ability to seek independent advice, and advised of all of the risks associated with the retainer, both in relation to prospects of success, and the likely consequences to him in the event that his conviction was overturned and he received compensation.
In the absence of any evidence from Mr Hegarty that a discussion of this nature occurred, I am of the view that there is no reasonable prospect that Mr Hegarty will succeed in his argument that the agreement was fair.
There is no reasonable prospect of success of Mr Hegarty’s case that the retainer is enforceable under the terms of the LPA. On the basis of his evidence, there is no reasonable prospect that he will be able to establish that the retainer was in writing, and that it was fair.
What is the effect of the finding that the agreement as deposed to by Mr Hegarty does not comply with the LPA?
The effect must be that Mr Hegarty is not entitled to be compensated for the work done by him (and by inference, Mr Borick), otherwise than on a quantum meruit. The effect of s 42(6) and (7) read together, is that, if the agreement does not comply with s 42(6), the practitioner seeking to enforce payment cannot have recourse to s 42(7). Thus, if an agreement to pay a certain hourly rate is, for example, not in writing, the practitioner cannot ask the Court, pursuant to s 42(7), to vary the agreement so as to rely on the Supreme Court scale. If the agreement does not comply with s 42(6), a quantum meruit is the only source of recovery for fees incurred.
Is there a reasonable prospect that the agreement relied on by Mr Hegarty is enforceable under the common law?
It follows from my analysis above, that the only common law method of enforcement open to Mr Hegarty is by way of quantum meruit.
Mr White and Mr Abbott were in agreement that Clyne sets out the common law position in Australia with respect to contingency agreements, insofar as civil matters are concerned. It establishes that a contingency agreement is not void at common law, subject to two requirements. The first requirement is that the lawyer has considered the case and believes that the client has a reasonable cause of action. The second requirement is that the lawyer must not bargain with the client for an interest in the subject matter of the litigation. It is Mr Abbott’s contention that Clyne does not apply to criminal matters, where the position as set out in British Waterways Board v Norman[35] (“British Waterways”) applies; Mr White contends that Clyne represents the position in Australia regardless of the nature of the retainer.
[35] (1993) 26 HLR 232.
If Mr White is correct, then it would be open to both Mr Hegarty and Mr Borick to seek to recoup fees for the work that they have undertaken on the basis of a quantum meruit, regardless of whether the retainer was in respect of a civil matter or a criminal matter. If Mr Abbott is correct, then a quantum meruit would not be open to them if the retainer was in respect of a criminal matter, because the agreement would be void as being contrary to public policy. To determine the answer to this question, it is necessary to explore a little of the historical position in respect of contingency agreements at common law, in both England and Australia. It may also be necessary to determine whether the retainer was in respect of a criminal matter or a civil matter.
The common law position in England
The crimes of maintenance and champerty were abolished as crimes in England in 1967. Despite this, however, contracts which provided for maintenance or champerty remained contrary to public policy. This is because the legislation introducing this change, the Criminal Law Act 1967, contained the following provision:
S 14(2) The abolition of criminal and civil liability under the law of England and Wales for maintenance and champerty shall not affect any rule of that law as to the cases in which a contract is to be treated as contrary to public policy or otherwise illegal.
The position at common law in England in the mid-twentieth century is set out by Lord Denning MR in Trendtex Trading Corporation & Anor v Credit Suisse.[36] He said:
[36] [1980] QB 629.
Maintenance today
So far as maintenance itself is concerned (without champerty), the modern public policy is to be found in British Cash and Parcel Conveyors Ltd v Lamson Store Service Co Ltd [1908] 1 KB 1006, Martell v Consett Iron Co Ltd [1955] 1 All ER 481, [1955] Ch 363 and Hill v Archbold [1967] 3 All ER 110, [1968] 1 QB 686 (decided just before the passing of the 1967 Act). It is perfectly legitimate today for one person to support another in bringing or resisting an action (as by paying the costs of it), provided that he has a legitimate and genuine interest in the result of it and the circumstances are such as reasonably to warrant his giving his support. As I said in Hill v Archbold [1967] 3 All ER 110 at 112, [1968] 1 QB 686 at 694:
'Much maintenance is considered justifiable today which would in 1914 have been considered obnoxious. Most of the actions in our courts are supported by some association or other, or by the State itself. Very few litigants bring suits, or defend them, at their own expense. Most claims by workmen against their employers are paid for by a trade union. Most defences of motorists are paid for by insurance companies. This is perfectly justifiable and is accepted by everyone as lawful, provided always that the one who supports the litigation, if it fails, pays the costs of the other side.'
Champerty today as affecting lawyers
So far as champerty is concerned, there is need for some updating. Champerty is a species of maintenance; but it is a particularly obnoxious form of it. It exists when the maintainer seeks to make a profit out of another man's action, by taking the proceeds of it, or part of them, for himself. Modern public policy condemns champerty in a lawyer whenever he seeks to recover not only his proper costs but also a portion of the damages for himself, or when he conducts a case on the basis that he is to be paid if he wins but not if he loses. As I said in Re Trepca Mines Ltd [1962] 3 All ER 351 at 355, [1963] Ch 199 at 219:
'The reason why the common law condemns champerty is because of the abuses to which it may give rise. The common law fears that the champertous maintainer might be tempted, for his own personal gain, to inflame the damages, to suppress evidence or even to suborn witnesses.'
This reason is still valid after the 1967 Act. In Wallersteiner v Moir (No 2) [1975] 1 All ER 849 at 860, [1975] QB 373, at 394, I said:
'It was suggested to us that the only reason why “contingency fees” were not allowed in England was because they offended against the criminal law as to champerty; and that, now that criminal liability is abolished, the courts were free to hold that contingency fees were lawful. I cannot accept this contention. The reason why contingency fees are in general unlawful is that they are contrary to public policy as we understand it in England.'
They are contrary to modern public policy.[37]
[37] [1980] QB 629 at 653-654.
Thus, while a person who was found to have maintained another person’s litigation would no longer be found guilty of an offence, the contract would be void as being contrary to public policy. This was particularly so if it was found to be champertous; by 1980 when the decision in Trendtex was delivered, many forms of maintenance were regarded as legitimate.
In 2000, the Court of Appeal considered the case of Awwad v Geraghty & Co (a firm)[38] in which a lawyer entered into an agreement with a client to charge him her usual fees if he won the case; if he lost, he would be charged at a lower rate (a “conditional normal fee agreement”). Schiemann LJ said:
…acting for a client in pursuance of a conditional normal fee agreement, in circumstances not sanctioned by statute, is against public policy.[39]
[38] [2000] 1 All ER 608.
[39] [2000] 1 All ER 608, 628.
This was despite the fact that the solicitor was to charge no more than her usual fees in the event of success. He went on to say:
If the court, for reasons of public policy, refuses to enforce an agreement that a solicitor should be paid, it must follow that he can not claim on a quantum meruit.[40]
[40] [2000] 1 All ER 608, 630.
May LJ agreed with Schiemann LJ and said:
Firstly, I consider that the judgments of Lord Denning MR and Buckley LJ in Wallersteiner v Moir (No 2) [1975] 1 All ER 849, [1975] QB 373 and of Lord Denning MR in Trendtex Trading Corp v Crédit Suisse [1980] 3 All ER 721 at 741, [1980] QB 629 at 654, read as a whole, hold that a lawyer who conducts a case on the basis that he is to be paid if he wins but not if he loses is unlawful. Lord Denning MR says this in terms in passages quoted by Millett LJ in the Thai Trading case. Schiemann LJ in his judgment in the present appeal has set out extended passages from the judgments in Wallersteiner's case. I am not persuaded, as was Millett LJ in the Thai Trading case [1998] 3 All ER 65 at 71, [1998] QB 781 at 788, that these authorities are to be read as applying only to a lawyer who makes an arrangement for a contingency fee which entitles him to a reward over and above his ordinary profit costs if he wins. On the contrary and in particular, the passage in Lord Denning MR's judgment in the Trendtex Trading Corp case [1980] 3 All ER 721 at 741, [1980] QB 629 at 654 speaks both of a lawyer who seeks to recover a portion of the damages in addition to his proper costs, and of one who is to be paid if he wins, but not if he loses. These authorities, in my judgment, state the law as it was up to 1990. In so far as Ladd v London Road Car Co (1900) 110 LT Jo 80 might possibly be read as holding otherwise (which I doubt, as did Kennedy LJ in the Leeds City Council case), that did not represent the law 90 years later.

It is clear that the position in England was that champerty remained contrary to public policy and maintenance was only permitted insofar as it was sanctioned by legislation. An agreement to act for a client on a no win – no fee basis did not fall within this category of cases, and remained void as being contrary to public policy.
The cases to which I have referred are all cases dealing with civil claims of one type or another. The exception to this is British Waterways. In British Waterways, an impecunious respondent successfully prosecuted the appellant for breaches of the Environmental Protection Act 1990. The respondent applied for an order that the appellant pay her costs. While there was no express no win – no fee agreement between the respondent and her solicitors, the solicitors said that they would not have expected the respondent to pay their bill if they had lost the case. McCowan LJ, with whom Tuckey J agreed, said:
I confine myself to the nature of the litigation in this case, namely a criminal prosecution, and to the fact that the contingency fee in question was impliedly agreed between the prosecutor and her solicitor. In my judgment that remains against public policy.[41]
[41] (1993) 26 HLR 232, 242.
It is clear that Clyne marked a divergence in the common law between Australia and England insofar as no win no fee agreements in respect of civil actions were concerned.
The common law position in South Australia
In 1992, the South Australian Parliament introduced into the Criminal Law Consolidation Act 1935 (SA) Schedule 11. Schedule 11, by clause 1(3), abolished the common law offences of maintenance and champerty. Clause 3 of Schedule 11 provides:
3—Special provisions relating to maintenance and champerty
(1) Liability in tort for conduct constituting maintenance or champerty at common law is abolished.
(2) The abolition of criminal and civil liability for maintenance and champerty does not affect—
(a)     any civil cause of action accrued before the abolition;
(b)     any rule of law relating to the avoidance of a champertous contract as being contrary to public policy or otherwise illegal;
(c)     any rule of law relating to misconduct on the part of a legal practitioner who is party to or concerned in a champertous contract or arrangement.
At the time that Schedule 11 was introduced, it is clear that a contract involving a no win - no fee agreement, of the type described in Clyne, was not contrary to public policy. It is important to note, however, that the statement in Clyne in regard to maintenance by way of a no win – no fee agreement was obiter dicta. It is also clear from the language used that it related to maintenance of civil proceedings.
The case in Clyne was an appeal of an order for the removal of a barrister from the Roll of Practitioners in New South Wales for grave professional misconduct. The conduct giving rise to the order was (amongst other conduct) that the barrister had sought to prosecute a solicitor for the offence of maintenance in respect of matrimonial and other proceedings, for which he had (and knew that he had) no evidence. Thus the case was concerned with the conduct of the barrister, and the type of conduct that would give rise to an order removing the name of a barrister from the Roll of Practitioners. Any statement by the Court on the question of the common law offence of maintenance is clearly obiter.
While the Court talks about the criminal nature of maintenance itself, it is clear from the language used that the action being maintained is a civil one. The Court talks of the solicitor believing that the client has a “reasonable cause of action”, terminology which is not commonly used in respect of criminal law. It also talks about “the subject matter of litigation” and “remuneration proportionate to the amount which may be recovered by his client”. Again, these are not concepts which are common in criminal law. The criminal law does not deal in the “subject matter” of litigation in the way that the civil law does, nor would one expect a client to recover something valuable (such that fees could be ascertained in accordance with its value) from successful criminal proceedings.
On this basis, I am of the view that Clyne can only be applied to the extent that it expressly sanctions conduct amounting to maintenance. This limits its effect to civil proceedings.
The Court, in Clyne, refers to the New Zealand case of Sievwright v Ward.[42] It is clear that this case also contemplates only maintenance for civil actions. Ostler J said:
If a person without lawful justification assists another to prosecute or to defend civil judicial proceedings and thereby causes special damage to the person against whom the proceedings are brought or defended he commits the tort of maintenance….As a matter of principle, however, if there had been no authority, I should be prepared to hold that if a solicitor (or a partner of a firm of solicitors), has honestly investigated a client’s case, and honestly come to the conclusion that the client has a good cause of action or a good defence to an action, then, so long as he makes no bargain with his client to take a share of the proceeds, he does does not, by advancing money for disbursements and by conducting the case without having received payment on account of his costs, commit the wrong of either champerty or maintenance.[43]
[42] (1935) 35 GLR 81.
[43] (1935) 35 GLR 81, 82.
Ostler J refers to “civil judicial proceedings”, “causes of action” and taking a “share of the proceeds”. It is difficult to imagine, how, in a criminal matter, a solicitor would take a “share of the proceeds” in the event that the client is successful, and the reference to “civil judicial proceedings” is plain. Ostler J can only be referring to civil actions.
Thus, I conclude that, while Clyne sanctioned the use of no win – no fee agreements in relation to civil proceedings, such sanction did not extend to criminal proceedings. In the absence of any authority to the contrary, it appears that no win – no fee agreements in respect of criminal proceedings have not been sanctioned at common law.
In Smits, McClellan J considered the effect of the equivalent provision in New South Wales to Schedule 11. Section 6 of the relevant Act, the Maintenance and Champerty Abolition Act 1993 (NSW) provides:
This Act does not affect any rule of law as to the cases in which a contract is to be treated as contrary to public policy, or as otherwise illegal, whether the contract was made before, or is made after, the commencement of this Act.
McClennan J said:
As I have already indicated, the common law position explained by Atkin LJ in Wild v Simpson, is that a legal practitioner could not recover any costs or disbursements in respect of an arrangement with a client in respect of which a component was champertous. The retainer being contrary to public policy is illegal and recovery is not permissible even on a quantum meruit.
Although providing that maintenance and champerty are no longer crimes or civil wrongs, section 6 leaves in place the common law rule with respect to the enforceability or lack of it, of an arrangement tainted by champerty. Unless the common law has changed or it has been otherwise provided by statute, the common law will operate to render such a costs agreement unenforceable and leave the legal practitioner without remedy as to his or her costs.[44]
[44] [2002] NSWSC 241 at [238] – [239].
He goes on to say:
Only to the extent that the common law is contrary to the legislative amendments is it appropriate to conclude that the common law has been changed…The legislative intention to alter the common law must be plain.[45]
[45] [2002] NSWSC 241 at [257].
The same reasoning may be applied to clause 3 of Schedule 11. It leaves in place “any rule of law relating to the avoidance of a champertous contract as being contrary to public policy or otherwise illegal”. Clause 3, however, makes no mention of contracts which amount to maintenance of an action. In my view, it must, nonetheless, be interpreted as keeping alive the common law prohibition of maintenance in respect of criminal actions. To interpret it otherwise is to give a far broader interpretation to Clause 3 than its words warrant. Clause 3 makes it clear that the prohibition on champertous agreements remains; it does not, by implication, validate costs agreements in respect of criminal proceedings which amount to maintenance. These, also, remain void as contrary to public policy, as set out in British Waterways. This conclusion is consistent with the Conduct Rules which prohibit complying contingency costs agreements in respect of criminal matters.
I conclude that the common law position in South Australia, consistent with the Conduct Rules, is that, while costs agreements amounting to maintenance, such as no win – no fee agreements, are sanctioned by the common law in respect of civil matters, they are not so sanctioned in respect of criminal matters. Furthermore, champertous agreements, in respect of both civil and criminal matters remain void as contrary to public policy.
This leads to the conclusion that, if the retainer between Mr Hegarty and the respondent is in respect of a criminal matter, then it is void as contrary to public policy, and he is unable to recover any fees, even on a quantum meruit.
What was the retainer between Mr Hegarty and the respondent?
There is no written record of the retainer. Mr Hegarty’s evidence is that he and Mr Borick were retained:
To do whatever was needed to be done in order to achieve his release from prison and hopefully a payment of compensation to him.[46]
[46] FDN 12 at [10].
I infer from the way that this statement is worded, that the primary retainer was to secure the respondent’s release from prison. The awarding of compensation was a secondary goal and one that could only be contemplated after the first goal had been achieved. This is indicated by the use of the word “hopefully”. Release from prison was the primary goal; compensation was merely “aspirational”.
It is difficult to understand how this retainer can be viewed other than as one relating to a criminal matter. The respondent’s release from prison could only be achieved by one of three methods: the granting of a petition for mercy by the governor; the granting of a second appeal; or serving his non-parole period and being released on parole. Each of these three possibilities operates by virtue of the criminal law. Two of them, in fact, are reliant on provisions of the Criminal Law Consolidation Act 1935 (SA).
To see the retainer as anything other than one in respect of a criminal matter, is to view it as a series of separate retainers, with each retainer having its own goal, such as to pursue the medical board action against Dr Manock. This is not Mr Hegarty’s evidence. His evidence is that there was one retainer, the goal of which was to secure the respondent’s release from prison, and then to pursue compensation. On the basis of Mr Hegarty’s own evidence, I am of the view that his submission that the retainer was not in respect of a criminal matter has no reasonable prospect of success. This conclusion is supported by the revised statement of claim. Paragraph 11 of the revised statement of claim sets out the terms of the retainer as:
11. The terms of the Retainer (“the Retainer”) were:
11.1. The Applicant would provide legal services to the Respondent;
11.2. The Applicant would retain Mr Borick QC as counsel for the Respondent;
11.3. The Applicant and Mr Borick QC would make enquiries and take steps to seek either a review of the Respondent’s conviction and sentence and/or a pardon from the Governor and all such other work as was necessary to obtain that.
11.4 The Applicant and Mr Borick QC would perform their work for the Respondent without seeking payment unless the Respondent was released and received compensation in relation to his imprisonment in which event the Respondent would pay the Applicant and Mr Borick for the work carried out by them.
This pleading makes it clear that the nature of the retainer was a criminal one; Mr Hegarty and Mr Borick were to seek a review of the respondent’s sentence and conviction and/or a pardon from the Governor. Everything else was incidental to those core tasks which they were retained to carry out.
If the retainer is in respect of a criminal matter, then the common law as set out in Smits and British Waterways applies. Mr Hegarty is unable to make a claim for his fees, even on the basis of a quantum meruit.
Conclusion
The gravamen of Mr Hegarty’s claim against the respondent is contained in [2] of the revised statement of claim, where the causes of action relied on are pleaded, and [4] to [12] which pleads the nature of the retainer and the way that it was formed. The causes of action relied on are debt or, in the alternative, a quantum meruit. On the basis of the conclusions that I have reached, Mr Hegarty has no reasonable prospect of successfully prosecuting his claim on the bases of these causes of action. The respondent is entitled to summary judgment in respect of the claim.
I am of the view that strike out is not an appropriate remedy in this case. It is not that the statement of claim is improperly pleaded, or does not disclose a cause of action. The defect goes deeper than that. The evidence adduced by Mr Hegarty, taken at its highest, does not support the causes of action pleaded. I am also of the view that dismissal is not appropriate; while the statement of claim discloses a reasonable cause of action, the evidence adduced by Mr Hegarty demonstrates that he has no reasonable basis for prosecuting the claim.