Huntingdale Village Pty Ltd (receivers and managers appointed) v Corrs Chambers Westgarth - [2018] WASCA 90

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT :   THE COURT OF APPEAL (WA)
CITATION:   HUNTINGDALE VILLAGE PTY LTD (ACN 085 048 531) (RECEIVERS AND MANAGERS APPOINTED) -v- CORRS CHAMBERS WESTGARTH [2018] WASCA 90
CORAM:   MARTIN CJ
MITCHELL JA
BEECH JA

HEARD:   14 NOVEMBER 2017
DELIVERED          :   11 JUNE 2018
FILE NO/S:   CACV 119 of 2016
BETWEEN:   HUNTINGDALE VILLAGE PTY LTD (ACN 085 048 531) (RECEIVERS AND MANAGERS APPOINTED)
First Appellant
SILKCHIME PTY LTD (ACN 066 849 429) (RECEIVERS AND MANAGERS APPOINTED)
Second Appellant
VANNIN PTY LTD (ACN 067 610 271) (RECEIVERS AND MANAGERS APPOINTED)
Third Appellant
WARWICK ENTERTAINMENT CENTRE PTY LTD (ACN 054 246 918) (RECEIVERS AND MANAGERS APPOINTED)
Fourth Appellant
PARAGON APARTMENTS LTD (ACN 087 200 413) (RECEIVERS AND MANAGERS APPOINTED)
Fifth Appellant
NORMAN PHILLIP CAREY
Sixth Appellant
AND
CORRS CHAMBERS WESTGARTH
First Respondent
MARK ANTHONY KORDA
Second Respondent
DAVID JOHN WINTERBOTTOM
Third Respondent
ORENZOHAR
Fourth Respondent

ON APPEAL FROM:
Jurisdiction              :   SUPREME COURT OF WESTERN AUSTRALIA
Coram:   LE MIERE J
File Number            :   LPA 4 of 2010

Catchwords:

Contracts - Construction - Costs agreements between receivers and law firm - Construction by reference to surrounding circumstances

Contracts - Construction - 'General advice' - Whether agreements apply only to expression of opinions or advice on legal issues - Whether agreements apply to services provided to receivers as principals or as agents for companies in receivership

Contracts - Fully informed consent - Whether agreements supported by consideration

Choice of law - Whether NSW Act or WA Act governs cost agreements - Whether Legal Practice Act 2003 (WA) is a mandatory law of the forum

Legislation:

Civil Liability Act 2002 (NSW), s 5N
Corporations Act 2001 (Cth), s 419, s 420
Industrial Relations Act 1996 (NSW)
Judiciary Act 1903 (Cth), s 39, s 80
Legal Practice Act 2003 (WA)
Legal Profession Act 2004 (NSW)
Legal Profession Act 2008 (WA)
Legal Profession Uniform Law Act 2014 (NSW)
Supreme Court Act 1935 (WA), s 16, s 58

Result:

Appeal dismissed

Category: B

Representation:

Counsel:

First Appellant	:	Mr S Penglis & Ms M L Coulson
Second Appellant	:	Mr S Penglis & Ms M L Coulson
Third Appellant	:	Mr S Penglis & Ms M L Coulson
Fourth Appellant	:	Mr S Penglis & Ms M L Coulson
Fifth Appellant	:	Mr S Penglis & Ms M L Coulson
Sixth Appellant	:	Mr S Penglis & Ms M L Coulson
First Respondent	:	Mr B Dharmananda SC & Mr T Prince
Second Respondent	:	No Appearance
Third Respondent	:	No Appearance
Fourth Respondent	:	No Appearance

Solicitors:

First Appellant	:	Coulson Legal
Second Appellant	:	Coulson Legal
Third Appellant	:	Coulson Legal
Fourth Appellant	:	Coulson Legal
Fifth Appellant	:	Coulson Legal
Sixth Appellant	:	Coulson Legal
First Respondent	:	Corrs Chambers Westgarth - Sydney
Second Respondent	:	King & Wood Mallesons
Third Respondent	:	King & Wood Mallesons
Fourth Respondent	:	King & Wood Mallesons

Case(s) referred to in decision(s):

Akai Pty Ltd v The People's Insurance Co Ltd (1996) 188 CLR 418
Carey v Korda (No 2) [2011] WASC 220
Carey v Korda [2012] WASCA 228; (2012) 45 WAR 181
Chubb Insurance Company of Australia Ltd v Moore [2013] NSWCA 212; (2013) 302 ALR 101
Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337
D'Alessandro & D’Angelo v Cooper (Unreported, WASC, Library No 960334C, 21 June 1996)
Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325
Devereaux Holdings Pty Ltd v Pelsart Resources NL (No 2) (1985) 9 ACLR 956
Doggett v Commonwealth Bank of Australia [2015] VSCA 351
Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640
Epic Energy (Pilbara Pipeline) Pty Ltd v Commissioner of State Revenue [2011] WASCA 228; (2011) 43 WAR 186
Ford Motor Company of Australia Ltd v Arrowcrest Group Pty Ltd [2002] FCA 1156
Freehold Land Investments Ltd v Queensland Estates Pty Ltd (1970) 123 CLR 418
Hume Steel Ltd v Attorney General (Vic) [1927] HCA 24; (1927) 39 CLR 455
Huntingdale Village Pty Ltd v Corrs Chambers Westgarth (No 3) [2016] WASC 366
Insight Vacations Pty Ltd v Young [2011] HCA 16; (2011) 243 CLR 149
John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; (2000) 203 CLR 503
KA & C Smith Pty Ltd v Ward (1998) 45 NSWLR 702
Kay's Leasing Corporation Pty Ltd v Fletcher (1964) 116 CLR 124
Lipohar v The Queen [1999] HCA 65; (1999) 200 CLR 485
LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104
Mynott v Barnard (1939) 62 CLR 68
Old UGC Inc v Industrial Relations Commission of New South Wales [2006] HCA 24; (2006) 225 CLR 274
Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451
Pao On v Lau Yiu Long [1980] AC 614
Pryles & Defteros (a firm) v Green [1999] WASC 34; (1999) 20 WAR 541
QCoal Pty Ltd v Cliffs Australia Coal Pty Ltd [2010] QSC 479
Re Bulong Nickel Pty Ltd [2002] WASC 126; (2002) 42 ACSR 52
Re Casey's Patents; Stewart v Casey [1892] 1 Ch 104
Re Media, Entertainment and Arts Alliance; Ex parte Hoyts Corporation Pty Ltd [1993] HCA 40; (1993) 178 CLR 379
Re Tkacz; Ex parte Tkacz [2006] WASC 315; (2006) 206 FLR 171
Reardon Smith Line Ltd v Hansen Tangen [1976] 1 WLR 989
Robertson v Unique Lifestyle Investments [2007] VSCA 29
Sweedman v Transport Accident Commission [2006] HCA 8; (2006) 226 CLR 362
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165
Tradigrain SA v King Diamond Shipping SA [2000] 2 Lloyd’s Rep 319; (2000) 2 All ER (Comm) 542
Vita Foods Products Inc v Unus Shipping Co Ltd (in liq) [1939] AC 277
Wanganui-Rangitikei Electric Power Board v The Australian Mutual Provident Society [1934] HCA 3; (1934) 50 CLR 581

MARTIN CJ:

Summary

The first respondent, Corrs Chambers Westgarth (the law firm) provided legal services in respect of the first five appellants, which are various companies within the Westpoint Group, while they were in receivership. This is an appeal from the decision of the judge at first instance, which had the effect that the appellant companies are unable to utilise the provisions of the Legal Practice Act 2003 (WA) (the 2003 Act) which would enable them to require the law firm to serve upon those companies detailed bills of costs that could then be taxed by the court. The sixth appellant, Mr Carey, is a director of each of the appellant companies.
There are four grounds of appeal. The first two grounds are concerned with the proper construction and effect of agreements entered into in 2006 between the receivers of the appellant companies and the law firm with respect to the provision of legal services (the 2006 agreements). The third ground of appeal relates to the efficacy of agreements entered into in 2015 between the receivers of the appellant companies and the law firm with respect to the legal services provided by the law firm, including services previously provided (the 2015 agreements).
The fourth ground challenges the judge's conclusion that the 2003 Act did not apply to the services provided by the law firm pursuant to the 2006 agreements or, alternatively, the 2015 agreements. The appellants assert that the judge should have concluded that the 2003 Act applied to all or part of the services provided by the law firm.
For the reasons which follow, all grounds of appeal should be dismissed and the decision at first instance affirmed.

A general overview of the facts

It is desirable to set out the facts which are specifically relevant to the first three grounds of appeal[1] when those grounds are addressed. The general context for those specific facts is provided by the overview which follows. As I have noted, the first five appellants are all companies within the Westpoint Group, which includes Westpoint Corporation. Westpoint Corporation is now in liquidation. The sixth appellant, Mr Carey, is the founder of the Westpoint Group and is the sole director of each of the five appellant companies.
[1] The fourth ground of appeal essentially turns upon the proper construction of the 2003 Act.
On 24 January 2006, Mr Korda, Mr Winterbottom and Mr Zohar - the second to fourth respondents (collectively, the Receivers) - were appointed as receivers and managers of the five appellant companies, Westpoint Corporation, and various other companies within the Westpoint Group. On the day the Receivers were appointed, Mr Zohar telephoned Mr Dominic Emmett, who was in Sydney. Mr Emmett was a partner of the law firm, based in the Sydney office of that firm. The law firm also had offices in Melbourne and Perth. Mr Zohar instructed Mr Emmett that the law firm would be engaged to provide legal services to the Receivers in connection with their receivership of the various companies in the Westpoint Group which had been placed in receivership. In the course of the conversation, Mr Zohar told Mr Emmett that the receivership would involve the realisation of real property assets in Melbourne, Perth and Sydney.
Following their telephone conversation, Mr Emmett put together a team of partners and lawyers across the offices of the law firm who were to provide the legal services requested by Mr Zohar. The team included partners and lawyers in the Sydney, Melbourne and Perth offices of the law firm. Various files were opened by the law firm relating to real property assets held by the companies in receivership and litigation in which the companies were involved, and legal services were provided by the law firm in respect of those matters.
Mr Emmett caused formal letters of engagement to be sent to the Receivers relating to the legal services to be provided in respect of each of the companies in receivership. Each letter was in identical form and was dated 10 February 2006, and comprised an engagement letter, a schedule of rates and expenses and a document entitled 'Engagement Terms'. Each letter was signed by Mr Emmett on behalf of the law firm, and by Mr Zohar on behalf of the Receivers. The engagement letters and incorporated documents relating to the appellant companies together comprise the 2006 agreements. I will refer to their terms when I consider the first two grounds of appeal.
The law firm issued invoices to the Receivers in relation to the legal services rendered on a regular, usually monthly, basis. An invoice was sent in respect of each of the companies in receivership, and covered legal services provided by partners and lawyers working in the Sydney, Perth and Melbourne offices of the firm. The invoices the subject of these proceedings relate to work done between January 2006 and 30 June 2007. The invoices have been paid in full by the Receivers.
By letter to the court dated 1 February 2010, the appellant companies requested orders compelling the law firm to provide itemised bills and extending the time for the appellant companies to request taxation of those itemised bills pursuant to provisions of the 2003 Act which will be considered in detail in the context of ground 4.
Resolution of the issue raised by the appellant companies with respect to taxation of the law firm's bills of costs was deferred while various other related proceedings were resolved.
In December 2015, the law firm and the Receivers entered into further agreements in identical terms in relation to each of the five appellant companies. Each agreement was executed by a partner of the law firm and Mr Korda on behalf of the Receivers. Each agreement comprised a letter dated 8 December 2015, a schedule setting out the invoices rendered by the law firm in respect of services provided relating to the relevant company since 24 January 2006, and another schedule attaching the 2006 agreement pertaining to that company. Those documents relating to the five appellant companies together comprise the 2015 agreements.
The registrar of the court dealing with the appellant companies' request for orders requiring the law firm to present itemised bills which could be taxed by the Supreme Court of Western Australia referred two questions to a judge for determination, namely:
(a)whether each of the appellant companies is 'a person or party charged' within the meaning of that expression in the 2003 Act such that the company can apply for an extension of time with respect to the presentation of bills for taxation under that Act; and
(b)whether Mr Carey, as the sole director of each company in receivership, had authority to cause that company to request an extension of time to enable taxation of the law firm's bills under the 2003 Act.
The second question was resolved in favour of Mr Carey. As no appeal has been brought from that aspect of the decision at first instance, it is not necessary to say anything more about it.
Before dealing with the first question referred to him, the judge at first instance enunciated a number of sub-issues which were to be addressed by the court, all of which bore upon the question of whether the appellant companies were entitled to utilise the provisions of the 2003 Act relating to the taxation of bills of costs rendered by the law firm. It is unnecessary to enunciate those sub-issues in these reasons. After addressing those various issues, the judge concluded that the appellant companies were not entitled to invoke the provisions of the 2003 Act relating to taxation of the law firm's bills of costs. This appeal has been brought from that conclusion.

Grounds 1 and 2

The first two grounds of appeal are conveniently considered together, as both relate to the proper construction and effect of the 2006 agreements. Before turning to those grounds, it is desirable to set out the relevant terms of the 2006 agreements and the view taken by the judge at first instance with respect to their proper construction and effect.

The 2006 agreements

The 2006 agreements each take the form of a letter from the law firm to the Receivers. Each letter is headed 'Engagement Letter' and is in identical terms, save for the identification of the company to which the letter relates. The terms of the letter pertaining to the first appellant, Huntingdale Village Pty Ltd, are as follows:
Thank you for instructing us to provide general advice on this receivership.
This letter sets out the scope of legal services we are to provide and other important information about our legal costs.
This letter and the attached Engagement Terms and Schedule of Rates and Expenses state the terms of our offer to enter into a client engagement agreement (including a costs agreement) with the client stated below for this matter.
Client and matter details
Client:    Huntingdale Village Pty Ltd (Receivers and Managers appointed)
Matter name:    General Advice
Matter no:    HUNT11808 - 9028235
Scope of legal services
General advice
Professional staff
Our people who may be providing the legal services for this matter and their current hourly rates are:
…
Basis for calculation of our legal costs
We will calculate and charge our fees and expenses as set out in the Engagement Terms. Our fees are based on the time spent by our professional staff (including graduate lawyers and paralegals) at their hourly rates current from time to time. Our current hourly rates and expenses are set out in the Schedule of Rates and Expenses.
We are not in a position to provide an estimate of our costs at this stage.
Next steps
Please carefully read this letter and our Engagement Terms and Schedule of Rates and Expenses. Please contact Dominic Emmett if you wish to discuss any aspect, including our legal costs.
You can accept our offer to enter into a client engagement agreement (including a costs agreement) in writing by signing and returning the attached copy of this letter. You can also accept our offer by conduct, by telling us that you accept our offer or by instructing us in relation to the matter after this letter has been given to you.
We look forward to working with you in this matter.
Each Engagement Letter relating to each of the five appellant companies has been signed by Mr Emmett on behalf of the law firm, and Mr Zohar on behalf of the Receivers. Mr Zohar's signature is contained in a portion of the Engagement Letter which indicates that by his signature, he is also accepting and acknowledging receipt of the Engagement Terms and Schedule of Rates and Expenses.
The Schedule of Rates and Expenses attached to each Engagement Letter contains rates set out under the headings 'professional fees - Sydney office range of hourly rates' and 'professional fees - national range of hourly rates (applicable to interstate matters)’. Under each of those headings, a range of hourly rates both exclusive and inclusive of GST is provided in relation to various categories of service provider - those categories being partners, consultants and special counsel, senior associates, solicitors, graduate lawyers and paralegals.
Another portion of the document sets out, under the heading 'Expenses', rates applicable to various matters including telephone calls, document production, faxes, postage, couriers, secretarial services and 'other expenses'. Under the latter subheading, the following list is provided:

Registration clerk services (includes searching, lodging, filing, collection, stamping and inquiry services)

$16.50 - $27.50
(GST incl) per service depending on service required

Registration fees

at cost

Court fees

at cost

Barristers' and experts' fees

at cost

Travel and accommodation expenses

at cost

Car travel

ATO cents per km rates

Advertising expenses

at cost

Bank charges

at cost

The other document attached to each Engagement Letter is entitled 'Engagement Terms'. Under that heading, on the first page of the document, it is provided:
These terms of engagement set out our respective responsibilities, rights and obligations.
Under the heading 'Professional Fees', the document states:
Except as otherwise specified in our engagement letter, we will calculate and charge our fees based on the time spent by our professional staff … Time spent can include internal conferences discussing your legal issues, drafting documents (including court documents), attending settlements, conferencing with barristers and other experts, travelling and attending court.
Under the heading 'Expenses', the document provides:
Except as otherwise specified in the Engagement Letter, we will charge you for services supplied by us or our associated entities in the course of working on your matter. These services may include document production (such as photocopying and printing), fax, telephone calls, couriers, out of hours secretarial services, car travel and services provided by our registration clerks including searching, lodging, filing, collection, stamping and inquiry services. The services and applicable charges are set out in the attached Schedule of Rates and Expenses.
You must also pay us any other expenses which we incur in acting for you, including the amount charged by third parties for goods and services supplied in the course of working on your matter. Such expenses include barristers' fees, experts' fees, travel, parking, accommodation, advertising, postage, non regular or special document production, stationery, stamp duty, court filing fees and registration fees.
Under the heading 'Your Rights', the document states:
You have rights under the Legal Profession Act 2004 (NSW) to:
…
·request an itemised bill of costs within 30 days after you receive a lump sum bill of costs from us.
…
The following avenues are open to you in the event of a dispute in relation to legal costs:
·apply for a costs assessment under Division 11 of Part 3.2 of the Act, which application must be made within 60 days after the bill was given or a request for payment was made or after the costs were paid in full (which ever is the earlier or earliest).

Under the heading 'Barristers, Experts and Litigation', the document provides:
If we consider that a barrister or expert should be engaged, we will discuss that engagement with you and obtain your instructions.
Under the heading 'Jurisdiction', the document provides:
The law of New South Wales applies to legal costs in relation to your matter.
However, if our legal services are or will be provided wholly or primarily in another jurisdiction or your matter has a substantial connection with another jurisdiction, and the law of the other jurisdiction which corresponds to Part 3.2 of the Legal Profession Act 2004 (NSW) (corresponding law) does not apply to your matter or if it is not possible to determine the jurisdiction in which you first instructed us, then:
·if you and us agree to do so, you and us may sign a written agreement (which can be done at any time) that the corresponding law of that other jurisdiction is to apply to your matter; or
·you can, within 28 days after we have made this disclosure to you, notify us in writing that you require the corresponding law of that other jurisdiction to apply to your matter.

The competing contentions with respect to the 2006 agreements

The law firm contends that the 2006 agreements cover all the legal services the subject of the invoices to which these proceedings relate, with the consequence that the substantive law of the agreements relating to the provision of all of those services is the law of New South Wales.
On the other hand, the appellants contend that the 2006 agreements apply only to services rendered in the form of 'advice', in the sense of the provision of an opinion with respect to a legal issue, and only to services of this kind provided to the Receivers as principals. Accordingly, the appellants contend that services relating to such things as representation of the companies in receivership in litigation, or acting and providing services in relation to property transactions involving those companies fall outside the scope of the 2006 agreements because they are not 'advice', nor were they services rendered to the receivers as principals, but rather to the receivers as agents for the companies in receivership.

The judge's construction of the 2006 agreements

After referring to the competing constructions of the parties, and general legal principles relating to contractual construction, the judge concluded that the reference to the provision of 'general advice' was ambiguous or susceptible of more than one meaning, with the result that evidence of surrounding circumstances was admissible to assist in the interpretation of the scope of the agreement. He considered those circumstances to include the recent appointment of the Receivers, and that their primary duty was to realise the assets charged by the appointing creditor.[2] After referring to those parts of the Engagement Terms which refer to time spent and costs incurred in relation to services which go well beyond the provision of advice in the form of an opinion as to the substance or procedure of the law, the judge observed:[3]
There is a constructional choice. The 2006 Agreement may be confined to providing legal advice in the sense of opinions regarding the substance or procedure of the law in relation to particular factual situations or it might extend to providing legal services in relation to all of the matters upon which the Receivers are likely to require legal services in carrying out the receiverships of the companies including effecting transactions which involves the services of searching, lodging, filing, collection, stamping and enquiry services which is the sort of work involved in realising assets and work 'during litigation'. Therefore, recourse to events, circumstances and things external to the agreement is necessary in this case in determining the proper construction of the 2006 Agreement. In this case identifying the commercial purpose or objects of the 2006 Agreements is facilitated by an understanding of the genesis of the transaction, its background and context.
[2] Huntingdale Village Pty Ltd v Corrs Chambers Westgarth (No 3) [2016] WASC 366 [39] (Reasons).
[3] Reasons [44].
The judge then identified the genesis of, and the background and context to, the transaction, which he took to include the characteristics of the parties, the business or enterprise in which each was engaged, and the telephone conversation and other events which preceded and led to the 2006 agreements. He then held:[4]
The genesis, background and context of the 2006 Agreements show that the commercial purpose or object of the agreements was to have in place a costs agreement for each of the receiverships to cover all the work to be performed by Corrs in relation to each of the receiverships which work would include all work in relation to the receiverships, including work done for the Receivers as principals and as agents of each of the companies and include work in and incidental to the realisation of real property assets in Melbourne, Perth and Sydney and in the conduct of litigation. On their proper construction, each of the 2006 Agreements cover all of the work to be done by Corrs for the Receivers as principals and as agents of each of the companies in accordance with instructions to be given by the Receivers to Corrs from time to time including work in and incidental to the realisation of real property assets.
Reasonable business people in the position of Corrs and the Receivers would have understood the 2006 Agreements to cover all legal services which Corrs delivered pursuant to instructions on specific issues or matters given to Corrs in relation to the receivership of each of the companies.
I find that the 2006 Agreements cover all of the work performed by Corrs which is the subject of the invoices issued by Corrs to the Receivers for work done between January 2006 and 30 June 2007.
[4] Reasons [47] - [49].

The grounds of appeal relating to the 2006 agreements

The first ground of appeal asserts that the judge erred by concluding that the 2006 agreements were ambiguous or susceptible of more than one meaning and, as a consequence, resolving their proper construction by reference to surrounding circumstances. The appellants contend that the judge should have concluded that the 2006 agreements were not ambiguous or susceptible of more than one meaning, with the result that surrounding circumstances were not appropriately considered in arriving at their proper construction.
The second ground of appeal asserts that the judge erred by concluding that the 2006 agreements covered all the services provided by the law firm over the relevant period. The appellants contend that the judge should have concluded that the 2006 agreements only applied to the provision of advice to the Receivers in their capacity as Receivers (principals) and not as agents of the companies in receivership, with the result that the 2006 agreements applied to only part of the services which are the subject of the invoices to which the proceedings relate.

Ground 1 - ambiguity

There are two reasons why the first ground of appeal must fail. The first is that it proceeds upon a false assumption as to the process undertaken by the judge at first instance in order to construe the 2006 agreements, although it must be conceded that this assumption may have been induced by the language used by the judge in his reasons.
In order to explain the flaw in the assumption underpinning this ground, it is necessary to refer to basic principles of contractual construction and, in particular, the principles governing the extent to which matters outside the text of a contract may be taken into account for the purposes of its construction.
There are many cases in which those principles have been espoused. For present purposes, the relatively recent statement of those principles in the joint judgment of French CJ, Nettle and Gordon JJ in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd[5] provides a convenient starting point for the proposition I am developing:
The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose.
In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That enquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract.
Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning.
However, sometimes, recourse to events, circumstances and things external to the contract is necessary. It may be necessary in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding 'of the genesis of the transaction, the background, the context [and] the market in which the parties are operating'. It may be necessary in determining the proper construction where there is a constructional choice. The question whether events, circumstances and things external to the contract may be resorted to, in order to identify the existence of a constructional choice, does not arise in these appeals.
Each of the events, circumstances and things external to the contract to which recourse may be had is objective. What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties' statements and actions reflecting their actual intentions and expectations.
[5] Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 [46] - [50].
For present purposes, the relevant point to be extracted from this passage is that there are a number of circumstances in which recourse to matters external to the contract may be necessary. One of those circumstances is a circumstance in which it is necessary to have resort to such matters in order to identify the commercial purpose or objects of the contract by an understanding 'of the genesis of the transaction, the background, the context [and] the market in which the parties are operating'. Another of those circumstances is the circumstance in which resort to matters external to the contract may be necessary in order to resolve a constructional choice - that is, where the text of the contract is ambiguous or susceptible of more than one meaning.
In other words, evidence which enables an understanding of the genesis of the transaction, and the background, context and market in which the parties to a commercial contract are operating, is relevant to the proper construction of that contract irrespective of whether the court is confronted with a constructional choice. That basic proposition is reinforced by the cases to which reference is made in the joint judgment in Mount Bruce, and the cases referred to in those cases.
In Electricity Generation Corporation v Woodside Energy Ltd,[6] the majority observed:
The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean. That approach is not unfamiliar. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding 'of the genesis of the transaction, the background, the context [and] the market in which the parties are operating'. …
[6] Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 [35].
There is no suggestion in this passage that construction by reference to identification of the commercial purpose or objects facilitated by an understanding of the genesis, background and context of the transaction and the market in which the parties are operating is dependent upon the existence of a constructional choice, in the sense of contractual text which is ambiguous or susceptible of more than one meaning.
The words cited from earlier authority in each of the passages from Mount Bruce and Electricity Generation Corporation which I have set out come from the oft-cited passage in the judgment of Mason J in Codelfa Construction Pty Ltd v State Rail Authority of NSW[7]where he cited with approval the following passage from the judgment of Lord Wilberforce in Reardon Smith Line Ltd v Hansen Tangen[8]:
In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context of the market in which the parties are operating.
[7] Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337, 350.
[8] Reardon Smith Line Ltd v Hansen Tangen [1976] 1 WLR 989, 995 - 996.
Again, there is nothing in this passage which would suggest that reference to these matters, as an aid to construction, depends upon the existence of a constructional choice. This passage from the judgment of Lord Wilberforce in Reardon Smith, and its citation by Mason J in Codelfa, were included within the unanimous judgment of the court in Pacific Carriers Ltd v BNP Paribas[9] in support of the proposition that:
The construction of the letters of indemnity is to be determined by what a reasonable person in the position of Pacific would have understood them to mean. That requires consideration, not only of the text of the documents, but also the surrounding circumstances known to Pacific and BNP, and the purpose and object of the transaction.
[9] Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 [22].
The decision in Pacific Carriers was cited in the subsequent decision in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd[10] where, in the unanimous reasons of the court, it was observed:
The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.
[10] Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165.
There are many other authorities to similar effect.
With these principles in mind, it is necessary to return to the reasons given by the judge at first instance. In those reasons, the judge justified his reference to 'surrounding circumstances' on the basis of the constructional choice which he identified.[11] However, in the result, what he took into account was 'the commercial purpose or objects of the 2006 agreements … facilitated by an understanding of the genesis of the transaction, its background and context'.[12] In accordance with the principles to which I have referred, that course did not have to be justified by reference to a constructional choice, and was always open to the judge.
[11] Reasons [44].
[12] Reasons [44].
The specific matters taken into account by the judge in order to sustain the construction at which he arrived were the appointment of the Receivers to the various companies in the Westpoint Group, the fact that Mr Zohar instructed Mr Emmett to act on behalf of those Receivers, the fact that the receiverships would involve the realisation of real property assets in Melbourne, Sydney and Perth, and the fact that the law firm had offices in each of those cities. Each of those matters clearly falls within the scope of the genesis of the transaction, its background and context, and the market in which the transaction took place.
The judge at first instance relied on those matters to sustain his conclusion that the commercial purpose or object of the 2006 agreements was to have in place a costs agreement for each of the receiverships to cover all the work to be performed by the law firm in relation to each of the receiverships, including work done for the Receivers as principals and as agents of each of the companies and including work in and incidental to the realisation of real property assets in Melbourne, Perth and Sydney, and in the conduct of litigation.[13]
[13] Reasons [47].
The commercial purpose or object of the transaction ascertained from an understanding of its genesis, background, context and the market in which it took place is relevant to the proper construction of the text of the contracts, consistently with the authorities to which I have referred, and many others.
So, in the result, although the judge at first instance justified his reference to matters external to the text of the 2006 agreements by reference to the constructional choice which he identified, it was unnecessary for him to do so, because the matters which he took into account were properly considered by him irrespective of the existence of any constructional choice. Accordingly, even if the appellants' contention that there was no relevant ambiguity in the 2006 agreements was accepted, their challenge to the process of construction undertaken by the judge at first instance would nevertheless fail, because it did not depend upon the existence of a constructional choice.
The second reason why this ground of appeal must fail is because, although it was not necessary for the reasons I have given, the judge at first instance was correct to conclude that the 2006 agreements were ambiguous or susceptible of more than one meaning. That ambiguity is apparent from the text of the 2006 agreements. It is therefore unnecessary to address the somewhat vexed question of whether account can be taken of matters beyond the text for the purpose of identifying ambiguity. In this case, the ambiguity arises from the description of the services to be provided in the letter as 'general advice', which might be construed narrowly, as the appellants contend, but in an agreement which in both the Schedule of Rates and Engagement Terms incorporated into that agreement refer to the provision of legal services which go well beyond the narrow meaning of 'advice' for which the appellants contend. There is also ambiguity arising from the description of the Receivers as parties to the agreements, without any specification of whether they were acting as principals or as agents of the companies in receivership. Both areas of ambiguity are exemplified by, and addressed in, the second ground of appeal to which I now turn.

The second ground of appeal

Ground 2 challenges the judge's resolution of the two ambiguous aspects of the 2006 agreements which he identified. It is desirable to consider the ground in relation to each of those aspects in turn - namely, the aspect relating to the nature of the services to be provided under the 2006 agreements, and the aspect relating to the capacity in which the services were required by the Receivers.

'General advice'

The appellants contend that the description of the legal services to be provided pursuant to the 2006 agreements as 'general advice'[14] confines the operation of the agreements to legal services in the form of the expression of opinions on legal issues. The argument essentially turns upon what the appellants contend is the natural and ordinary meaning of the word 'advice'.
[14] On three separate occasions in the Engagement Letter.

There are a number of reasons why this proposition must be rejected. First, the word 'advice' is not found in the 2006 agreements in isolation but, rather, on each occasion upon which it is used is preceded by the word 'general'. The consistent utilisation of that adjective supports the objective attribution of an intention to the parties to the effect that their agreement cover a broad range of services.
Second, in the context of commercial agreements relating to the provision of legal services, it would be quite artificial to construe the expression 'legal advice' as being limited to the provision of opinions or advice on legal issues. That is because the provision of legal advice may be implicit in services which do not, on their face, take the form of a formal opinion or letter of advice. So, for example, the preparation of a statement of claim for use in contested proceedings implicitly advises the client with respect to the causes of action which should be pursued, and the arguability of those causes of action. Similarly, the preparation of a document giving effect to a commercial transaction implicitly advises the client for whom the lawyer is acting that the document will give effect to the relevant transaction and provide adequate protection of the client's interests.
This proposition was recognised by Anderson J in Dalleagles Pty Ltd v Australian Securities Commission.[15] That case concerned a claim for legal professional privilege in respect of documents which included draft agreements and instruments of security prepared by the solicitor for the parties asserting the privilege. The claim for privilege was resisted on the basis that documents of that kind did not incorporate advice, it being asserted that the privilege was restricted to communications with respect to the provision of advice. Anderson J did not consider that the privilege was restricted in this way but went on to observe:[16]
But anyway, I think it is the case that whenever a lay client gives instructions to a legal practitioner to perform specialist legal services involving the exercise of professional skill, there is imposed on the solicitor a duty to give any advice reasonably necessary to protect the client's interests in the transaction whether expressly requested or not. Two cases in this Court illustrating that rule are Watts v Public Trusteefor WA [1980] WAR 97 and Stone James & Co v Investment Holdings Pty Ltd [1987] WAR 363. See also MacPherson and Kelley v Kevin J Prunty & Associates [1983] 1 VR 573. It is not a large step from that position to say that whenever a client gives instructions to his solicitor there is assumed to be a request for advice. In my opinion, discourse between solicitor and client with reference to the transactions covered by those instructions, that is, professional discourse in a professional capacity, should be regarded as prima facie for the purpose of giving and receiving advice. This would apply to any communication that is on its face a communication of a professional nature from the solicitor to the client or his agent touching the subject matter of the solicitor's engagement and any communication from the client to the solicitor in connection with that engagement. Only if the rule is applied in that way can the policy of it be carried out and its object practically fulfilled.
[15] Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325.
[16] Dalleagles Pty Ltd v Australian Securities Commission, 332-333.
The distinction which the appellants would draw between the provision of advice in the form of an opinion, on the one hand, and the conduct of litigation or the representation of a party's interest in a commercial transaction, on the other hand, does not accord with the principles recognised by Anderson J and with which I respectfully agree.[17] In any commercial context and, in particular, the commercial context in which the 2006 agreements were executed, attribution to the parties of an intention that the legal services to be provided would be confined to the expression of opinions on legal issues would not correspond with the commercial realities in which legal services are provided, and would give rise to difficult issues of differentiation between the formal expression of legal opinions and the implicit provision of legal advice in the course of the services provided.
[17] I should disclose that I was counsel for the party asserting privilege in the Dalleagles case.
Third, the expression 'general advice' used in the Engagement Letter must be construed in the context of the agreement as a whole, which expressly incorporates the Schedule of Rates and Expenses and the Engagement Terms. Each of those documents includes many provisions which are inconsistent with a construction of the Engagement Letter limiting its operation to the provision of opinions, and which are only consistent with the attribution of an intention to the parties to the effect that the Engagement Letter would cover a broader range of services.
In an attempt to overcome this obvious difficulty, the appellants submit that, to the extent that the various references in the documents expressly incorporated into the agreement by the Engagement Letter are inconsistent with or repugnant to the Engagement Letter, the Engagement Letter must prevail.[18]
[18] Relying on cases such as Ford Motor Company of Australia Ltd v Arrowcrest Group Pty Ltd [2002] FCA 1156 [8]; Tradigrain SA v King Diamond Shipping SA [2000] 2 Lloyd’s Rep 319; (2000) 2 All ER (Comm) 542; Doggett v Commonwealth Bank of Australia [2015] VSCA 351 [122].
While the legal principle upon which the appellants rely may be accepted, it is subject to the overriding principle to the effect that a court should always seek to avoid inconsistency and reconcile the various provisions of the contract.[19] The legal principle upon which the appellants rely is only applied when inconsistency and repugnance is unavoidable.
[19] See, for example, Hume Steel Ltd v Attorney General (Vic) [1927] HCA 24; (1927) 39 CLR 455, 465; Re Media, Entertainment and Arts Alliance; Ex parte Hoyts Corporation Pty Ltd [1993] HCA 40; (1993) 178 CLR 379, 386 - 387.
There is considerable force in the respondents' submission that the appellants' approach to this issue starts with the presumption that the words 'general advice' bear the narrow meaning for which they contend, with the consequence that the many references in the documents incorporated into the 2006 agreements are inconsistent with, or repugnant to, that meaning. As the respondents correctly submit, the proper approach is to construe the words 'general advice' in the context of the agreement as a whole. Given the many references in each 2006 agreement to the provision of services other than the expression of an opinion, inconsistency and repugnance is avoided by construing the 2006 agreements as applying to all legal services rendered by the law firm at the request of the Receivers, of whatever character.
Fourth, the genesis of the transaction, the background and context for the transaction and the market in which the transaction occurred, compel the conclusion that the commercial purpose or object of the 2006 agreements was to put in place a written agreement covering all the services to be provided by the law firm at the request of the Receivers in the course of the receivership, irrespective of the character of those services. Legal services provided to receivers will commonly include the provision of advice to receivers with respect to their rights and obligations, but will also include representation of the receivers and the entities in receivership in litigation and in the execution of commercial transactions involving the realisation of property charged in favour of the secured creditor appointing the receivers. There is no reason to attribute to the parties to the 2006 agreements any understanding that legal services of that general character would not be required, or an intention that their agreement should only apply to legal services of the former and not the latter character.
For these various reasons the judge was correct to conclude that the 2006 agreements applied to all legal services supplied by the law firm at the request of the Receivers, and were not confined to services in the form of the expression of legal opinions.
Turning now to the appellants' contention that the 2006 agreements only applied to legal services provided to the Receivers as principals, and not as agents of the companies in receivership, reliance is placed upon decisions at first instance and on appeal in the related proceedings of Carey v Korda.[20] As the law firm was not a party to those proceedings, it is not contended that there is any issue estoppel arising from them which binds the law firm. However, it is submitted that the decisions are persuasive, and should be followed.
[20] Carey v Korda (No 2) [2011] WASC 220; Carey v Korda [2012] WASCA 228; (2012) 45 WAR 181.
The issue in those proceedings was whether legal professional privilege attached to bills of costs rendered by the law firm to the Receivers, and to schedules of costs incurred by the Receivers which were initially charged to a management company and subsequently recharged by the management company to individual companies within the Westpoint Group. Privilege in respect of the documents had been asserted by the Receivers, on the ground that they were the relevant client at the time the legal services were provided. Mr Carey opposed the claim for privilege on the ground that the only clients of the law firm were the companies in receivership, not the Receivers. At least at first instance, the proceedings appear to have been conducted on the basis that the court was required to make a binary choice between two mutually exclusive possibilities - namely, the possibility that the Receivers were the clients of the law firm, and the possibility that the companies were the clients of the law firm.[21]
[21] It is clear that no assertion of privilege was made on behalf of the companies in receivership, who were not parties to the proceedings - see Carey v Korda (No 2) [12], [16], [55].
In that context, at first instance, Edelman J concluded that the advice given to the Receivers by the law firm was given to them as Receivers and not as agents for the companies. However, it is not clear from the published reasons whether the legal services which gave rise to the documents in contest were the same as the legal services the subject of these proceedings. Further, Edelman J expressly countenanced the possibility that the Receivers might also have been the clients of the law firm in relation to advice sought with respect to their duties as receivers and, in that context, expressed doubt that the advice could be 'filleted into that advice given to the Receivers and that which is given to the companies'.[22] It is that dubious process of 'filleting' which underpins much of the appellants' argument in relation to this issue.
[22] Carey v Korda (No 2) [53].
The appellants also rely on observations made on appeal by Murphy JA.[23] Consistently with the approach taken at first instance, the appeal was conducted on the basis that the only clients entitled to assert privilege were the companies in receivership, and no privilege had been asserted on their behalf. So, the question presented on appeal was the question of whether the Receivers were clients of the law firm at all, and not the question of whether they were clients of the law firm in their capacity as principals or in their capacity as agents of the companies. In that context, after referring to the 2006 agreements, Murphy JA observed:[24]
The correct conclusion to draw is that it was the Receivers, as principals, who retained Corrs to advise them in relation to their realisation of the Company's assets on behalf of the mortgagee, and in the exercise of their powers and the performance of their duties, as receivers and managers of the companies in question. The reference to the 'client' in the letter must, properly construed, be read as a reference to the person who Corrs and the Receivers agreed should pay Corrs' fees (subject to s 419 of the Corporations Act). The arrangement between the parties as to who should pay for the work done by the solicitors is seldom material to the question for whom the work is done and to whom the professional duties are owed: Pegrum v Fatharly (1996) 14 WAR 92, 105.
That is not to say that the Receivers, having obtained and received advice in that capacity, would not thereafter be acting as agents for the company in effecting the sale of assets. When, for example, they (directly or through the solicitors) negotiated with third parties, entered into contracts for sale, corresponded with local authorities or undertook searches and the like, the Receivers clearly would be acting as agents of the company in question.
[23] With whom I and Newnes JA agreed.
[24] Carey v Korda [76], [77].
These observations do not assist the appellants' argument. They include an express acknowledgement that the Receivers would be acting as agents for the company in effecting the sale of assets and that, in negotiating for the sale of assets utilising services provided by the law firm, the Receivers would be acting as agents for the companies. Because of the way in which the case was presented to the court, the conclusion that the Receivers were clients of the law firm was sufficient to dispose of that aspect of the appeal. The observation that the Receivers may also have been acting as agents for the company in obtaining the services of the law firm was, at best, obiter.
At all events, as it is not contended that the decision in Carey v Korda is binding on this court, any persuasive value which the observations in that case might have is significantly diminished by the fact that, in those proceedings, the court was considering a quite different question to the question presented in these proceedings.
The substantive question therefore remains - should the 2006 agreements be construed as applying only to legal services provided by the law firm to the Receivers as principals, or as also extending to legal services provided by the law firm to the Receivers in their capacity as agents for the companies in receivership.
As I have already noted in the context of my observations relating to ambiguity, the text of the 2006 agreements is inconclusive. Although the 2006 agreements refer to the Receivers, they refer to them in their capacity as Receivers of the company in receivership. Although the 2006 agreements were signed by one Receiver on behalf of them all, by reason of the receivership, that was the only means by which the companies could enter into binding agreements - namely, through the agency of the Receivers.
The difficulty of differentiating clearly and unequivocally between legal services provided to the Receivers as principals and legal services provided to the Receivers in their capacity as agents for the companies evident in the reasons at first instance and on appeal in Carey v Korda tells strongly against the objective attribution to the parties of an intention that the 2006 agreements should only apply to legal services provided to the Receivers in their capacity as principals. As I have already observed, parties to an agreement for the provision of legal services in respect of companies in receivership can be taken to understand that the likely purpose of the receivership will be the realisation of assets secured in favour of the appointing creditor and that services will be required in respect of transactions giving effect to those purposes. In any such transaction, the legal services provided may be relevant to the Receivers as principals in relation to the proper discharge of their duties to the companies in receivership, and also to the companies themselves in relation to, for example, the precise terms of the documents giving effect to any particular transaction. It would not be commercially realistic or practical to attribute to the parties an intention that the 2006 agreements would apply to some, but not all, of the legal services provided in respect of a single transaction undertaken for the purpose of realising an asset secured in favour of the appointing creditor. There is nothing in the language of the 2006 agreements which would compel or even support such an uncommercial consequence.
To the contrary, when account is taken of the genesis, background and context of the 2006 agreements for the purpose of understanding their commercial purpose and object, there is every reason to construe those agreements as applying to all legal services provided by the law firm in relation to the receiverships, irrespective of whether or not the Receivers' request for those services was made by them in their capacity as principals or in their capacity as agents for the companies in receivership.

Grounds 1 and 2 - conclusion

For these reasons, the judge at first instance was correct to conclude that the 2006 agreements applied to all the legal services provided by the law firm at the request of the Receivers which are the subject of these proceedings. Grounds 1 and 2 must be dismissed.

Ground 3 - the 2015 agreements

Ground 3 relates to the 2015 agreements. This ground only has any significance to the outcome of this appeal if, by reason of the success of one or other of ground 1 or 2, it is concluded that the 2006 agreements do not apply to all the legal services the subject of these proceedings. As that conclusion has not been reached, it is not strictly necessary to deal with ground 3. However, for the sake of completeness, I will deal with the ground, albeit briefly.
It is first necessary to provide context for the ground by setting out the material terms of the 2015 agreements. The 2015 agreements are each dated 8 December 2015. By their terms, they refer to the issues raised by the appellants in these proceedings. It is clear that the 2015 agreements were executed, at least in part, in an attempt to resolve any uncertainty in relation to issues raised in these proceedings.
Each of the 2015 agreements takes the form of a letter from the law firm to the Receivers entitled 'Confirmation of terms of costs agreement'. The last page of the letter has been executed by Mr Korda on behalf of the Receivers as an acknowledgement that:
The above terms and conditions accord with our understanding of the agreement that has been in place between the Receivers and Corrs since 24 January 2006.
Under the heading 'Background' the letter refers to the engagement of the law firm on or about 24 January 2006, the 2006 agreements, and the issues raised in these proceedings. In that context, the letter records the parties' acknowledgement that the 2006 agreement applicable to the relevant company, which is attached to the letter as a schedule, provides evidence of the agreement as to the payment of legal costs that has applied to all legal services provided in relation to the relevant company since 24 January 2006. The legal services said to have been provided pursuant to the agreement are described generally in a document which comprises the first schedule to each 2015 agreement. This document includes a list of the invoices rendered by the law firm in respect of legal services provided in connection with the relevant company since 24 January 2006.
At first instance the law firm contended that if, for one or other of the reasons advanced by the plaintiffs, the 2006 agreements did not apply to all the legal services the subject of these proceedings, the 2015 agreements filled any lacuna in the coverage provided by the 2006 agreements, with the consequence that the law applicable to any agreement pertaining to the provision of those services was the law of New South Wales. At first instance, the plaintiffs contended that the 2015 agreements did not have this consequence because they were ineffective, being unsupported by consideration, and further asserted that the law firm carried the onus of proving that the 2015 agreements were entered into with the fully informed consent of the Receivers, which onus had not been discharged.

The 2015 agreements - the reasons of the judge

The judge at first instance rejected the plaintiffs' contentions with respect to lack of consideration for two reasons. First, the judge relied upon authorities to the effect that where services are rendered at the request of a party in circumstances in which it is clear that the services were not intended to be gratuitous, a subsequent promise to pay for those services by their recipient is supported by consideration in the form of the provision of the services, which is not past consideration but valuable executed consideration.[25] Second, the judge at first instance observed that the 2015 agreements would only be relevant if, for some reason, the 2006 agreements did not cover all the legal services the subject of these proceedings. In that circumstance, as there was no implied agreement to the effect that the Receivers would pay scale costs for services not covered by the 2006 agreements, the 2015 agreements were supported by valuable consideration in the form of the promise to pay for the services at the rates specified in those agreements.
[25] Reasons [57].
The judge at first instance rejected the plaintiffs' contention to the effect that the law firm carried the onus of proving that the 2015 agreements were entered into with the fully informed consent of the Receivers, and observed that there was no evidence to the effect that the 2015 agreements were not entered into without fully informed consent.
The third ground of appeal essentially resuscitates the arguments advanced at first instance. It should be dismissed, essentially for the reasons given by the judge.

Consideration

In Pao On v Lau Yiu Long,[26] the Privy Council observed:
An act done before the giving of a promise to make a payment or to confer some other benefit can sometimes be consideration for the promise. The act must have been done at the promisor's request: the parties must have understood that the act was to be remunerated either by a payment or the conferment of some other benefit: and payment, or the conferment of a benefit must have been legally enforceable had it been promised in advance.
[26] Pao On v Lau Yiu Long [1980] AC 614, 629.
In that case, the Privy Council applied this principle to conclude that there was valid consideration to support an agreement to indemnify the purchasers of shares against any loss occasioned by the retention of shares for a period of 12 months even though those purchasers had previously undertaken not to sell the shares for that period.
These observations were applied by the Court of Appeal of Victoria in Robertson v Unique Lifestyle Investments.[27] The passage was also cited with approval by Anderson J in D'Alessandro & D’Angelo v Cooper[28] to support his conclusion that a costs agreement relating to legal services already provided was supported by valid consideration.
[27] Robertson v Unique Lifestyle Investments [2007] VSCA 29.
[28] D'Alessandro & D’Angelo v Cooper (Unreported, WASC, Library No 960334C, 21 June 1996) 10.
Similarly, in QCoal Pty Ltd v Cliffs Australia Coal Pty Ltd,[29] the Supreme Court of Queensland rejected a contention that an agreement with respect to the cost to be paid for legal services previously provided was unsupported by consideration. In addition to some of the cases to which I have already referred, Ann Lyons J relied upon the decision of Bowen LJ in Re Casey's Patents; Stewart v Casey[30] where His Lordship observed:
The fact of a past service raises an implication that at the time it was rendered it was to be paid for, and, if it was a service which was to be paid for, when you get in the subsequent document a promise to pay, that promise may be treated either as an admission which evidences or as a positive bargain which fixes the amount of that reasonable remuneration on the faith of which the service was originally rendered.
[29] QCoal Pty Ltd v Cliffs Australia Coal Pty Ltd [2010] QSC 479 [25] - [26].
[30] Re Casey's Patents; Stewart v Casey [1892] 1 Ch 104.
Ann Lyons J also relied upon the observation of Young J in Devereaux Holdings Pty Ltd v Pelsart Resources NL (No 2)[31] that:
[A]fter Eastwood v Kenyon (1840) 113 ER 482 it is quite clear that even on the most orthodox view of the law of consideration if an act is done at a time when both parties appreciated that there would be payment in respect of that act and later there is a promise to pay then, as an alternative to a quantum meruit, there may be an action in contract based on that promise. The consideration in such a case is usually referred to as executed, not past.
[31] Devereaux Holdings Pty Ltd v Pelsart Resources NL (No 2) (1985) 9 ACLR 956.
Accordingly, the first reason given by the judge for rejecting the appellants' contention with respect to lack of consideration for the 2015 agreements was entirely consistent with established authority and should be affirmed. This reasoning is implicitly recognised by s 221 of the 2003 Act which expressly provides that a practitioner may enter into a costs agreement with a client in respect of services rendered in the past.
The second reason given by the judge for rejecting the assertion that the 2015 agreements were unsupported by consideration is also entirely consistent with prior authority. The 2015 agreements are only relevant if they apply to the provision of legal services to which the 2006 agreements do not apply. In respect of those services, there is no implied agreement to the effect that the law firm would be remunerated exclusively by reference to the relevant scale of legal costs. Rather, in the absence of any agreement, the term to be implied is to the effect that the law firm will be paid reasonable costs for the services rendered. As Anderson J observed in D'Alessandro, the scales of costs applicable to, for example, litigation work, do not specify what amount is reasonably paid in respect of the services rendered but set a statutory cap upon the amount which can be recovered by the solicitor.[32] Accordingly, the scales are not imported into the agreement and do not fill the gap left by any agreement with respect to the amount which will constitute reasonable remuneration pursuant to the implied promise to pay.
[32] D'Alessandro & D’Angelo v Cooper, 11.
In those circumstances, the express promise to pay at rates specified in each 2015 agreement is supported by valuable consideration in that the agreement quantifies the amount which has to be paid, removing the uncertainty which attends an obligation to pay a reasonable amount.
In an attempt to overcome this process of reasoning, counsel for the appellants asserted that the adoption by the parties of the rates specified in each 2015 agreement would inevitably result in a greater liability being imposed upon the parties responsible for those costs than would be derived from application of the maximum amounts applicable under the relevant scales. However, counsel accepted that there was no finding of fact to that effect, nor any appeal from the lack of such a finding.[33] Further, counsel accepted that there was no evidentiary basis upon which such a finding could be made given the breadth of the services the subject of these proceedings, the different jurisdictions in which they were performed and the inability, on the evidence, to ascertain what scale would be applicable to those services.[34] For those various reasons, that submission must be rejected.
[33] Appeal ts 31.
[34] Appeal ts 32-33.

Fiduciary duty

The appellants contend that because of the fiduciary relationship between a legal practitioner and his or her client, and the potential conflict of interest which arises between the interests of those parties when a retrospective costs agreement is made, such an agreement is only valid if entered with the fully informed consent of the client. That proposition goes too far. It may be accepted that in such a circumstance the practitioner's fiduciary duty to the client requires the practitioner to advise the client to obtain independent legal advice. If such advice is given but not acted upon, the legal practitioner has no capacity to force the client to obtain independent advice prior to entry into the agreement.
In this case, the law firm expressly advised the Receivers to obtain independent legal advice as to their rights and as to the effect of signing the 2015 agreements.[35]
[35] Par 9 of the letters of 8 December 2015.
As the judge noted, there is no evidence to establish whether or not the Receivers acted upon that advice and obtained independent legal advice prior to entry into the 2015 agreements. Affidavits were filed on behalf of the Receivers in the proceedings before the judge. Although the deponents of those affidavits were required to attend for cross‑examination by the plaintiffs, that requirement was withdrawn and the opportunity to obtain evidence with respect to the circumstances in which the 2015 agreements were executed was foregone. In the absence of any evidence raising a question as to the regularity of the execution of the 2015 agreements, the proposition that the law firm carries the onus of proving the fully informed consent of the Receivers lacks any support from prior authority or general principle. The appellants' contention to that effect must be rejected.

Application to adduce additional evidence in relation to ground 3

The appellants applied for leave to adduce additional evidence in the appeal in support of ground 3. After hearing argument, the court announced that the application would be dismissed for reasons to be published in due course. My reasons for dismissing the application follow.
Although the affidavits and submissions filed in support of the application are difficult to comprehend, during argument, counsel explained that the essence of the application was to place evidence before the court of an agreement executed by one of the Receivers and a representative of One Path Funds Management Ltd on or about 23 June 2014. Clause 6 of that agreement provides:
All future legal costs shall be charged to the Receivership in accordance with ANZ Bank panel rates.
Counsel was asked to explain to the court the relevance of an agreement relating to the rates at which legal costs would be charged to the receivership after June 2014 to these proceedings, which concern costs charged in respect of services provided in 2006 and 2007. In answer to that question, counsel pointed to the fact that the 2014 agreement preceded the retrospective agreements entered into in 2015. That was said to be relevant to the question of whether the Receivers entered into the 2015 agreements on the basis of fully informed consent. It is not at all clear how that could be so, given that the Receivers were presumably aware of the fee agreement into which they entered in 2014 at the time they executed the 2015 agreements.
As was pointed out to counsel in the course of argument,[36] there is another fundamental difficulty with respect to the relevance of the evidence sought to be adduced, arising from the lack of any evidence to the effect that the law firm was aware of the 2014 fee agreement. As ground 3 is based upon an allegation of failure by the law firm to perform its fiduciary obligations owed to the Receivers, the 2014 agreement could only be relevant if known to the law firm, and there is no evidence to that effect.
[36] Appeal ts 42.
In the course of argument with respect to the application, counsel for the appellants also conceded that the highest point to which the evidence sought to be adduced could go would be to establish that there was a line of factual inquiry which was not pursued in the proceedings at first instance.[37] Counsel conceded that the greatest consequence of any such conclusion would be an order for a further hearing. Counsel further conceded that no order to that effect had been sought in the appeal, and that there was no ground of appeal to which the evidence would go.[38] Counsel also accepted that there was no evidence which would enable any comparison between the rates at which legal services were to be charged under the 2014 agreement (being 'ANZ panel rates') as compared to the rates applicable under the 2015 agreements.[39] That concession renders the possible relevance and significance of the evidence sought to be adduced entirely speculative.
[37] Appeal ts 42-43.
[38] Appeal ts 43.
[39] Appeal ts 43.
For these various reasons, the application to adduce additional evidence was entirely without substance.

Conclusion - ground 3

For these reasons, ground 3 of the appeal must be dismissed and the decision of the judge to the effect that the 2015 agreements also apply to all the legal services provided by the law firm the subject of these proceedings should be affirmed.

Summary - grounds 1 - 3

It follows from the dismissal of grounds 1 - 3 of the appeal that the judge was correct to conclude that each of the 2006 agreements and the 2015 agreements applied to the provision of all the legal services the subject of these proceedings. It follows that the judge was correct to conclude that the law governing the agreements relating to the provision of those services is the law of New South Wales. Ground 4, to which I now turn, raises the question of whether this has the consequence that the 2003 Act does not apply to the legal services rendered pursuant to the 2006 and 2015 agreements, including the services the subject of these proceedings.

Ground 4 - does the 2003 Act apply?

Ground 4 asserts that the judge erred in concluding that the 2003 Act did not apply in respect of all or, alternatively, part of the law firm's costs. The appellants' submissions identify a number of specific respects in which the judge is said to have erred. I will return to what are, in effect, particulars of this ground after identifying the facts relevant to this ground, the potentially applicable legal regimes and the process of reasoning enunciated by the judge.

Facts relevant to this issue

The facts relevant to this issue have already been identified in the course of my reasons. Essentially, those facts comprise the effective application of each of the 2006 agreements and the 2015 agreements to the provision of the legal services which are the subject of these proceedings, and the unchallenged finding of the judge to the effect that the services the subject of these proceedings were performed by members of the law firm in part in Western Australia, in part in New South Wales, and in part in Victoria, in part by practitioners who practise in Western Australia, and in part by practitioners who practise in New South Wales or Victoria and not in Western Australia.[40]
[40] Reasons [64].

The 2003 Act

The 2003 Act was repealed by the Legal Profession Act 2008 (WA) (the 2008 Act).[41] However, s 616 of the 2008 Act provides that Pt 13 of the 2003 Act continues to apply to a matter if the client first instructed the law practice in the matter before the commencement of the operation of the 2008 Act. The 2008 Act commenced operation on 1 March 2009. As the Receivers first instructed the law firm in relation to the matters the subject of these proceedings on 24 January 2006, if the statute law of Western Australia applies to these proceedings, it is the law embodied in Pt 13 of the 2003 Act, not the law embodied in the 2008 Act, which will apply.
[41] 2008 Act, s 598.
Part 13 of the 2003 Act is entitled 'Costs', and contains various divisions. Division 1 created the Legal Costs Committee, charged with the responsibility of making legal costs determinations regulating the remuneration of legal practitioners.[42]
[42] 2003 Act, s 207, s 210.
Division 2 of Pt 13 of the 2003 Act is concerned with legal practitioners' entitlements to remuneration. The term 'legal practitioner', which is used extensively throughout Pt 13, is defined by s 3 of the 2003 Act to mean:
… a person -
(a)who is admitted as a legal practitioner, whose name is on the Roll of Practitioners and who is not a disqualified person; or
(b)who is an interstate practitioner who practises in this State.
The expression 'interstate practitioner' is also defined by s 3 to mean:
… a person -
(a)who has been admitted to legal practice in another State;
(b)who is not a local practitioner;
(c)who holds a current interstate practice certificate; and
(d)whose principal place of practice is in that State.
Section 3 of the 2003 Act defines 'local practitioner' to mean:
… a person -
(a)who holds a current practice certificate; and
(b)whose principal place of practice is in this State.
Division 2 of Pt 13 contains a number of provisions relating to costs agreements. Section 221 of the 2003 Act provides that a legal practitioner may make a written agreement with any client in respect of the manner of payment for the whole or any part of past or future services. Section 222 of the 2003 Act provides that such an agreement may be reviewed by the Supreme Court. If the Supreme Court forms the view that the costs agreement is unreasonable, the court may reduce the amount payable or cancel the costs agreement and require that costs be taxed in the ordinary way.[43] From time to time the appellants have foreshadowed an application for review of the 2006 agreements and the 2015 agreements pursuant to these provisions, although no such application has yet been made.
[43] 2003 Act, s 222(2).
Division 3 of Pt 13 is concerned with the taxation and recovery of costs. Within that division, s 230 requires that a legal practitioner must not sue for the recovery of any fees due until a bill for those fees has been served upon the party charged. If the bill takes the form of a lump sum bill, within 30 days from service of the bill, the party charged may require the legal practitioner to serve upon the party charged a bill containing detailed items.[44] Once a detailed bill of costs has been received, the party charged may, within 30 days of service of the itemised bill, serve notice upon the legal practitioner of an intention to have the bill taxed and, after service of that notice, may cause the bill to be taxed by the taxing officer of the court.[45] When taxing an itemised bill of costs, the taxing officer must give effect to any costs agreement made with respect to the costs specified in the bill, although the taxing officer may, at the request of the party charged, refer any costs agreement to the Supreme Court for review.[46]
[44] 2003 Act, s 231.
[45] 2003 Act, s 232.
[46] 2003 Act, s 235.
Section 243 of the 2003 Act[47] provides that if a bill of costs is taxed and, as a result of that taxation, the amount which has been paid in respect of that bill is more than the amount authorised by the taxation, to the extent of the excess the person charged has a claim for repayment which may be certified by the taxing officer and enforced as if it were a judgment of the Supreme Court for the payment of the amount mentioned in the certificate.[48]

The Legal Profession Act 2004 (NSW)

[47] Which is also contained within Div 3 of Pt 13.

[48] See also s 240 of the 2003 Act.

The Legal Profession Act 2004 (NSW) (the 2004 Act) was repealed by the Legal Profession Uniform Law Act 2014 (NSW) (the 2014 Act). However, cl 18 of sch 4 to the 2014 Act provides, in effect, that the provisions of the 2004 Act relating to legal costs continue to apply to a matter if the client first instructed the law practice in the matter before the commencement of the 2014 Act. As the Receivers first instructed the law firm in relation to the matters the subject of these proceedings in January 2006, if the statute law of New South Wales applies to the provision of the legal services the subject of these proceedings, it is the legal regime created by the 2004 Act rather than the current legal regime which would apply.
Part 3.2 of the 2004 Act is concerned with costs disclosure and assessment, and bears a heading to that effect. Section 303 of the 2004 Act, which is contained within div 2 of Pt 3.2, provides that the part applies to a matter if the client first instructs the law practice in relation to the matter in New South Wales. Section 306 of the 2004 Act provides that a client first instructs a law practice in relation to a matter in New South Wales if the law practice first receives instructions from or on behalf of the client in New South Wales, whether in person or by various other means of communication, including by telephone. As the law firm first received instructions to act in relation to the matters the subject of these proceedings in the course of a telephone call to Mr Emmett, who was in Sydney at the time, the combined effect of s 303 and s 306 of the 2004 Act is that Pt 3.2 of that Act applies to the services provided pursuant to the instructions given.

There is no reason to doubt the existence of the jurisdiction to which the appellants refer. However, there are at least three reasons why that jurisdiction is not relevant to the issues to be resolved on this appeal.
First, in these proceedings the appellants do not seek to invoke the inherent jurisdiction of the court with respect to the supervision of its officers. To the contrary, they specifically and expressly rely upon the provisions of the 2003 Act.
Second, the issue raised by ground 4 of the appeal is not an issue of whether the law firm is outside the scope of any relevant regulation or supervision with respect to the provision of the services the subject of these proceedings. Rather, the question raised by ground 4 of the appeal is which of the two potentially applicable regulatory regimes, each statutory, applies to govern the supply of the relevant services and the law firm's remuneration for their provision.
Third, the inherent jurisdiction of this court to supervise the conduct of its officers would not apply to interstate practitioners in respect of the provision of legal services outside Western Australia. Accordingly, the inherent jurisdiction is subject to the same lacuna in coverage as arises from the definition of 'legal practitioner' in the 2003 Act, with the same consequences for the potential application of choice of law principles.

The characterisation of the appellants' rights

The appellants challenge the judge's characterisation of the rights which they assert as being rights arising 'in connection with the 2006 Cost Agreements'.[66] Rather, the appellants assert that the exclusive source of all relevant rights is statutory because 'the entitlement to charge and be paid costs is determined by the legislation which governs [a] legal practitioner's conduct'.[67] They assert that the obligation of the law firm to refund any amount received in excess of the amount found to be due on taxation is a statutory obligation.[68] They further assert that it is not open to parties to an agreement to modify the operation of legislation insofar as it gives rights to third parties.
[66] Reasons [83]; appellants' submissions [68].
[67] Appellants' submissions [68].
[68] Imposed by s 243 of the 2003 Act.
There are a number of reasons why these propositions must be rejected. First, each of the propositions involves circular reasoning, as each assumes that the 2003 Act applies to the relevant legal services, when that is the very question posed by ground 4 of the appeal. So, the assertion that it is not open to parties to an agreement to modify the operation of legislation insofar as it gives rights to third parties presumes that the 2003 Act applies and confers rights upon the appellants, and obligations upon the law firm, which is the very question at issue under ground 4.
Second, even if the 2003 Act did apply to those services, the judge was correct to conclude that the right to obtain a refund of any amount paid in excess of the amount found due after taxation is a right which 'arises in connection with the 2006 Cost Agreements'.[69] Unless and until the 2006 agreements are set aside or varied following an application for review of those agreements by the court, they govern the rights and obligations of the parties and the taxing officer must tax the bills by reference to those agreements. There is no reason why the choice of law rules relating to restitutionary claims arising in connection with a contract should not be applied to this case. The fact that the 2003 Act, if it applies, would also impose obligations on the law firm, including an obligation to refund amounts received in excess of the amounts found due on taxation, does not alter the proper characterisation of the source of the obligation which is to be found in the retainer agreements augmented by restitutionary principles.
[69] Reasons [83].
Third, it is not correct to say that the entitlement to charge and be paid costs is determined by the legislation which governs a legal practitioner's conduct. The entitlement to charge and be paid costs arises from the agreement of retainer between practitioner and client. Statutory regulation of the rights arising from such agreements does not alter their fundamental source.

What if only the 2015 agreements apply?

Finally, the appellants assert that if the only agreements which apply are the 2015 agreements, the choice of New South Wales law in those agreements cannot deprive the appellants of rights which they sought to invoke pursuant to the 2003 Act in 2010, long before the 2015 agreements were concluded. Of course, this argument only arises if, contrary to my view, the 2006 agreements do not apply to the legal services the subject of these proceedings.

Even if the 2006 agreements do not apply to the relevant legal services, and the 2015 agreements do, for the reasons given in relation to ground 3, there is nothing to prevent the 2015 agreements creating the legal regime governing the law firm's entitlement to remuneration for those services. That legal regime would apply as soon as the 2015 agreements were executed. At that time, the appellants had not obtained any orders from this court with respect to the provision of itemised bills of costs or with respect to taxation of such itemised bills. The appellants' entitlement to obtain such orders falls to be determined by reference to the legal regime applicable at the time at which the court determines whether or not such orders should be made, being the regime created by the 2015 agreements, in the event that the 2006 agreements did not apply.

Conclusion - ground 4

For these reasons, each of the propositions grouped under ground 4 of the appeal must be rejected and that ground dismissed.

General conclusion

As each of the grounds of appeal must be dismissed, it follows that the appeal must also be dismissed.

MITCHELL & BEECH JJA:

Introduction

The facts, background, reasons of the primary judge and relevant statutory provisions are set out in the Chief Justice's reasons. We agree with the Chief Justice, for the reasons that he gives, that grounds 1 ‑ 3 and the application to adduce additional evidence in relation to ground 3 should be dismissed.
We also agree that ground 4 fails because pt 13 of the Legal Practice Act 2003 (WA) (Act) provided for the taxation of costs only where the proper law of the retainer agreement is the law of Western Australia. In the present case, the proper law of the retainer agreements between the Receivers[70] and the law firm[71] was the law of New South Wales. Our reasons for construing the Act in this manner, which adopt a different pathway from that taken by the Chief Justice to reach that conclusion, follow.

[70] As defined in the Chief Justice's reasons.

[71] As defined in the Chief Justice's reasons.

Jurisdiction

Although the issue was raised by the court with the parties, the court did not receive any detailed submissions on the nature of the jurisdiction which the court was exercising. The parties indicated that they agreed that the court was not exercising federal jurisdiction, so that the question of whether the court is exercising federal jurisdiction would not affect the issues. For the following reasons, the outcome in this case is not affected by whether or not the court is exercising federal or State jurisdiction. It is therefore unnecessary to resolve the question of the nature of the jurisdiction exercised by this court.
In the event that the court is exercising State jurisdiction under s 16 and s 58 of the Supreme Court Act 1935 (WA), it will apply the Act as a law of Western Australia, except to the extent that the Act is rendered invalid by express or implied provisions of the Australian Constitution. In that event, the law area, or 'forum', for choice of law purposes is the State of Western Australia. The Act will only operate so far as it is applicable, and in determining whether legislation is applicable it may be appropriate to take account of common law choice of law rules and any statutory modification of those rules. However, if on its proper construction the Act validly applies irrespective of the proper law of the retainer agreement, then, as explained in more detail later in these reasons, the court will give effect to that Act as a law of the State.
It is also arguable that the court is exercising federal jurisdiction conferred by s 39(2) of the Judiciary Act 1903 (Cth) and/or s 1337B(2) of the Corporations Act 2001 (Cth) in a matter arising under the Corporations Act. That would be on the basis that the power of the Receivers to appoint the law firm derived from s 420(2)(p) of the Corporations Act, and the Receivers' liability for the debts incurred in the course of the receivership (which would include fees for legal services) derived from s 419(1) of that Act. It might be argued that the Corporations Act operated as the source of the Receivers' liability to pay for the services provided by the law firm, and that the quantification of that liability was part of a matter arising under the Corporations Act as the corresponding right of the law firm owed its existence to federal law.[72]
[72] See LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575, 581 - 582.
In the event that the court is exercising federal jurisdiction, the forum, for choice of law purposes, is Australia.[73] In that event, it would be necessary to consider the operation of s 80 of the Judiciary Act. Relevantly, s 80 provides for the common law in Australia, as modified by the statute law in force in the State in which this court is held, to govern this court in the exercise of its federal jurisdiction. The common law includes the common law choice of law rules.[74] For present purposes, relevant statute law includes the Act, as legislation enacted by or under the authority of the Western Australian Parliament.[75] The Act will govern the exercise of federal jurisdiction only so far 'as it is applicable and not inconsistent with the Constitution and laws of the Commonwealth'. If the Act, on its proper construction, applies irrespective of the proper law under common law choice of law rules, then it will modify those rules and prevail. The resolution of the appeal would turn on whether the Act 'is applicable' within the meaning of s 80 of the Judiciary Act.
[73] John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; (2000) 203 CLR 503 [2].
[74] John Pfeiffer [3], [44].
[75] Sweedman v Transport Accident Commission [2006] HCA 8; (2006) 226 CLR 362 [33].
In the present case, the proper law of the retainer agreements was the law of New South Wales. Irrespective of whether the court is exercising State or federal jurisdiction, the question will be whether relevant provisions of pt 13 of the Act, on their proper construction, apply in that circumstance. It is therefore unnecessary to resolve any question as to the nature of the jurisdiction being exercised by this court.

Interaction of the Act and the NSW Act

The law firm's submissions in opposition to the appeal proceed from the premise that there is a choice to be made between provisions of the Legal Profession Act 2004 (NSW) (NSW Act) and the Act, for the assessment of costs, which is a threshold choice of law issue that 'cannot be ignored'.[76] We do not accept that submission, for the following reasons.
[76] First Respondent's Amended Submissions, par 82; appeal ts 69, 70.
It may be accepted that the NSW Act applied to provide an available mechanism for determining the quantum of costs payable in respect of legal work performed under the retainer agreements. The provisions of the NSW Act relating to costs continue to apply to matters in which the client first instructed the law practice before the current Legal Profession Uniform Law Act 2014 (NSW) commenced in New South Wales.[77] Subject to a presently immaterial exception, the NSW Act applies where the client first instructs the law practice in relation to the matter in New South Wales.[78]
[77] Clause 18 of sch 4 to the Legal Profession Uniform Law Act 2014 (NSW).
[78] Section 303 - s 306 of the NSW Act.
In broad terms, the NSW Act relevantly prohibits a law practice from commencing proceedings to recover legal costs from a person until 30 days after a bill and notification of the client's rights has been given to the person.[79] The NSW Act provides for an application to be made, including by a 'third party payer', for an assessment of legal costs which are the subject of a bill.[80] The outcome of that assessment is either a determination confirming the bill or, if the assessor is satisfied that the disputed costs are unfair or unreasonable, a determination substituting an amount that is, in the assessor's opinion, fair and reasonable.[81] The assessor issues a certificate setting out the determination. In the case of costs that have been paid, the amount (if any) by which the amount paid exceeds the amount specified in the certificate may be recovered as a debt in a court of competent jurisdiction.[82] In the case of costs which have not been paid, the certificate can be filed in a competent court and takes effect as a judgment for the amount of unpaid costs.[83] The determination is binding on all parties to the application for assessment, and no appeal or other assessment lies in respect of the determination except as provided for by the NSW Act.[84]
[79] Section 331 of the NSW Act.
[80] Section 350 of the NSW Act.
[81] Section 367 of the NSW Act.
[82] Section 368(4) of the NSW Act.
[83] Section 368(5) of the NSW Act.
[84] Section 372 of the NSW Act.
By these means, the NSW Act provides a process for quantification of the amount of costs payable for legal work done under a retainer by a determination which is binding on the parties to the assessment application and, except as provided for in the NSW Act, final. It may be that, where that process is engaged to the point of determination, s 118 of the Australian Constitution requires that full faith and credit be given, throughout the Commonwealth, to that final and binding outcome. In such a case, it may be that the process for taxation of costs provided for by the Act could not be engaged to produce a different outcome. As no determination has been made under the NSW Act, it is unnecessary to resolve these questions.
However, at least until a final determination is made, the laws of two States may provide for mechanisms for assessing legal costs, both of which may be applicable to particular work done under the same retainer. The position may be considered analogous to that which prevails where a common law liability might be enforced by action in the courts of two different States. The exercise of jurisdiction by one State's courts is not precluded merely by the existence of an available alternative mechanism for enforcing the common law liability in the other State's courts.
So in this case there is no 'clash', of the kind contended for in Sweedman,[85] between the provisions of the Act and the NSW Act dealing with the assessment or taxation of costs. Such a clash does not arise from concurrent provision by the legislation of two different States for alternative means of quantifying the costs payable for work done under a retainer.
[85] Sweedman [37] - [39], [50] - [52].
It is unnecessary to consider how such a clash would be resolved if it arose, or what (if any) effect such resolution would have on the determination of the present appeal. The point for present purposes is that there is no imperative for there to be an initial binary choice as to which of the Act and the NSW Act apply to provide for the assessment of taxation of the disputed costs in this case. Both regimes may co-exist as available alternatives. The existence of those alternatives, and the fact that the different processes may produce different determinations, is not antithetical to the federal system of government established by the Constitution,[86] although in some contexts different results in different forums may be regarded as an odd or unusual result.[87]
[86] Sweedman [20].
[87] John Pfeiffer [59].

The approach to identification of the criterion of operation of legislation

The central issue raised by ground 4 is therefore whether pt 13 of the Act applied to the present case. If on its proper construction the Act applied then, subject to any constitutional requirements to the contrary,[88] the court is obliged to apply the Act. That would be so regardless of whether the legislation of any other State, such as New South Wales, applied to provide an alternative process for quantifying the costs payable for work done under the retainers. It would also be so even if application of the common law choice of law rules might have rendered the law of another State applicable.[89]
[88] There is no suggestion of any constitutional requirement to the contrary in this case.
[89] See for example Sweedman [19], where the plurality referred to 'an effective statutory overriding requirement' as qualifying the function of choice of law rules.
Some legislation contains an express provision as to the scope of its application or its spatial reach. Where that is so, the court will construe the express provision of legislation of the forum and then give effect to it. See, for example, Akai Pty Ltd v The People's Insurance Co Ltd.[90] An example of such a legislative approach is found in the NSW Act, and the current provisions of the Legal Profession Act 2008 (WA),[91] which, subject to certain exceptions, apply the relevant provisions according to where the client first instructs the law practice. The constructional issue arises in the present case because there was no such express provision in the Act.
[90] Akai Pty Ltd v The People's Insurance Co Ltd (1996) 188 CLR 418.
[91] Section 254 - s 259 of the Legal Profession Act 2008 (WA).
Where no express provision of an Act makes the territorial scope or criterion of its application clear, the ascertainment of its territorial scope or criterion of operation is an orthodox exercise of construction of the legislation. This ascertainment requires attention to the context and subject matter of the legislation.[92]
[92] Kay's Leasing Corporation Pty Ltd v Fletcher (1964) 116 CLR 124, 142, 143; Insight Vacations Pty Ltd v Young [2011] HCA 16; (2011) 243 CLR 149 [29]; Chubb Insurance Company of Australia Ltd v Moore [2013] NSWCA 212; (2013) 302 ALR 101 [144].
Where an Act is expressed in general terms giving it apparently universal application, one approach is to construe the Act as applying to, and only to, those situations to which it will be made applicable by the relevant common law choice of law rule.[93] In Wanganui‑Rangitikei, Dixon J expressed this as a presumption:[94]
The case is one for applying what I believe to be the well-settled rule of construction. The rule is that an enactment describing acts, matters or things in general words, so that, if restrained by no consideration lying outside its expressed meaning, its intended application would be universal, this to be read as confined to what, according to the rules of international law administered or recognised in our Courts, it is within the province of our law to affect or control. The rule is one of construction only and it may have little or no place where some other restriction is supplied by the context or subject matter. But, in the absence of any countervailing consideration, the principle is, I think, that general words should not be understood as extending to cases which, according to the rules of private international law administered in our Courts, are governed by foreign law. As the present statute deals with the discharge pro tanto of obligations, it ought to be understood as confined to those obligations which arise under the law of New South Wales.
[93] See, for example, Wanganui-Rangitikei Electric Power Board v The Australian Mutual Provident Society [1934] HCA 3; (1934) 50 CLR 581, 601; Mynott v Barnard (1939) 62 CLR 68, 79; KA & C Smith Pty Ltd v Ward (1998) 45 NSWLR 702.
[94] Wanganui‑Rangitikei (600 ‑ 601).

It is important to notice that his Honour recognised that the subject matter or context of the legislation may indicate the restriction that is to be read into general words and may mean that the presumption has little or no place. The extent, if any, to which the subject matter of the legislation precisely matches a category in which there is a common law choice of law rule will vary. That will affect whether there is room for any presumption and, if so, the weight that it might carry in the process of construction. In our view, the subject matter of the legislation is of the first importance in identifying, by a process of construction, the territorial reach or criterion of operation of the legislation. As Kitto J pointed out in Kay's Leasing Corporation Pty Ltd v Fletcher,[95] Wanganui‑Rangitikei and cases like it dealt with legislation modifying or making void contractual rights and obligations of specified descriptions, in each case the modification or avoidance being enacted as an end in itself and not as a sanction for contravention of statutory requirements. Thus, as French CJ, Gummow, Hayne, Kiefel and Bell JJ explained in Insight Vacations:[96]
It could be presumed, in circumstances of the kind considered in the Wanganui-Rangitikei case, that the legislative intention was to affect rights and obligations the discharge of which was governed by the law of the enacting country (or State). And in such a case to construe the relevant Act as applying only to contract whose proper law was the law of the enacting country or State or to take proper account of the Act's context and subject matter.
[95] Kay's Leasing (142).
[96] Insight Vacations [30].
An approach taken in some cases is to identify the central concern of the legislation to see if that reveals the criterion, or 'hinge', by reference to which the Act operates.[97] There are many cases in which an approach along those lines is taken. We will outline some of them. In our view, they demonstrate that the ascertainment of the territorial scope or the criterion of operation of a statute is a matter of construction of the legislation on which the use of a presumption will often be of very limited, if any, assistance.
[97] Insight Vacations [36]; Chubb Insurance v Moore [144].
In Kay's Leasing, the relevant statute created requirements for hire purchase agreements and provided that an agreement that did not comply with those requirements was void or voidable. The Act was construed as intended to apply to hire purchase agreements entered into within the jurisdiction, regardless of what the parties chose as the proper law of the contract. Kitto J explained why selection of the governing law of the contract as the criterion of operation of the statute would have adverse consequences for the attainment of the policy pursued by the legislation:[98]
Where a provision renders an agreement void for non-compliance by the parties or one of them with statutory requirements, especially where the requirements can be seen to embody a specific policy directed against practices which the legislature has deemed oppressive or unjust, a presumption that the agreements in contemplation are only those of which the law of the country is the proper law according to the rules of private international law has no apparent appropriateness to recommend it, and indeed, for a reason of special relevance here, it would produce a result which the legislature is not in the least likely to have intended. It would mean that provisions enacted as salutory reforms might be set at nought by the simple expedient adopted in the present case of inserting in an agreement a stipulation that validity should be a matter for the law of some other country.
[98] Kay's Leasing (143).
The same consideration has been emphasised in many cases.[99] Thus, where a statute operates in a sphere where parties are or are likely to be in a contractual relationship, the consequences of giving effect to the parties' selection of the governing law for the attainment of the policy of the statute is an important consideration.
[99] Mynott v Barnard (79 - 80); Akai (435); Old UGC Inc [56]; Insight Vacations [31]; Chubb Insurance [197].
Freehold Land Investments Ltd v Queensland Estates Pty Ltd,[100] concerned Queensland legislation regulating the conduct of real estate agents. The High Court held that the legislation should be construed to apply to those who act in the way described in the definition of real estate agent within the jurisdiction of Queensland, and that this would be so regardless of the proper law of the agency being some other State.[101]
[100] Freehold Land Investments Ltd v Queensland Estates Pty Ltd (1970) 123 CLR 418.
[101] Freehold Land Investments (425).
The High Court decision in Old UGC Inc concerned the New South Wales Industrial Relations Act 1996. The court held that because the central concept upon which that Act fastened was the performance of work in an industry, and the work was performed within the jurisdiction, the fact that the proper law of a contract of employment was the law of a different place was irrelevant.[102]
[102] Old UGC Inc [22] - [23].
In Insight Vacations, the High Court considered the spatial reach or criterion of operation of s 5N of the Civil Liability Act 2002 (NSW). That provision concerned contracts for the supply of recreation services. It was part of div 5 of that Act, which applied in respect of liability in negligence for harm to a person resulting from a recreational activity engaged in by that person. The court construed the legislation as identifying the relevant geographical limitation as the place of performance of the contract, regardless of the proper law of the contract.[103]
[103] Insight Vacations v Young [36].
In all of these cases, the criterion of operation of the statute was discerned by a process of proper construction, paying close attention to the subject matter, purpose and context of the Act in question. That is the approach we take in determining ground 4.

The criterion of operation of pt 13: the proper construction of the Act

By their terms, various provisions of pt 13 of the Act regulate the remuneration of legal practitioners (as defined) in respect of specified kinds of work they carry out. The central operative provisions are as follows:
(1)Under s 210(2), the Legal Costs Committee may make legal costs determinations regulating the remuneration of legal practitioners in respect of specified matters. Costs determinations govern contentious business carried out in and for the purposes of proceedings before various courts of Western Australia.[104] Importantly, such legal costs determinations also regulate the remuneration of legal practitioners in respect of non‑contentious business they carry out, without any express geographical connection of such work to Western Australia.[105] Those determinations govern a taxation of a practitioner's costs by a taxing officer of this court, unless the parties have entered a costs agreement.[106] A client may also apply for a review by this court of a costs agreement.[107]
(2)Under s 230(1), a legal practitioner must not sue for the recovery of any services, fee, charges or disbursements until a bill has been served on a party charged. A bill may contain detailed items or be for a lump sum,[108] and must advise the person charged of certain rights.[109]
(3)A person charged with a bill containing detailed items, or who receives a lump sum bill and requests but does not receive an itemised bill, has a right to apply to this court for a taxation of the bill.[110] On taxation, the taxing officer certifies in writing the amount at which the bill of costs, and costs of and incidental to the taxation, are respectively allowed. The certificate is binding and conclusive on both parties.[111]
[104] Section 210(2)(b).
[105] Section 210(2)(a).
[106] Section 215, 221, 235.
[107] Section 222, 235.
[108] Section 230(2).
[109] Section 231(1), 232(1).
[110] Section 232(3), 233.
[111] Section 240.
The express criterion of operation of these provisions of pt 13 is to be found in the concept of a 'legal practitioner' defined in s 3 of the Act.
For convenience, we set out the definitions of local practitioner, legal practitioner and interstate practitioner:
local practitioner means a person -
(a)      who holds a current practice certificate; and
(b)     whose principal place of practice is in this State;
legal practitioner means a person -
(a)      who is admitted as a legal practitioner, whose name is
         on the Roll of Practitioners and who is not a disqualified
person; or
(b)     who is an interstate practitioner who practises in this
State;
interstate practitioner means a person -
(a)    who has been admitted to legal practice in another State;
(b)     who is not a local practitioner;
(c)      who holds a current interstate practice certificate; and
(d)     whose principal place of practice is in that State[.]
The definition of legal practitioner has two limbs. It is convenient to begin with the second limb. By par (b) of the definition, interstate practitioners, being those whose principal place of business is in another State, are 'legal practitioners' for the purposes of the Act only insofar as they practise in this State. By contrast, the first limb of the definition of legal practitioner, set out in par (a), does not involve any element of the performance of work or of practising in Western Australia. It is not limited to those with a current Western Australian practising certificate or to local practitioners, as defined (being also those whose principal place of practice is in Western Australia). Rather, it encompasses all those who are admitted in this State and on the Roll of Practitioners.
Thus, if pt 13 is read literally and without any implied further criterion of operation, it would apply to regulate the remuneration of a person admitted in Western Australia, living overseas, working in legal practice in a foreign country and providing legal services there. Counsel for the appellants appeared ultimately to accept that the consequences of such a construction are sufficiently absurd to compel its rejection. Some further limitation must be found for the criterion of operation of pt 13 of the Act. In other words, the general words of pt 13 must be read down in some manner to avoid an application that is so wide that it cannot have been intended.
The parties' submissions identified only two realistic possibilities as to how pt 13 is to be read. The appellants contend that the Act applies only to work done in Western Australia.[112] The respondents support the primary judge's construction that the Act applies if, and only if, the proper law of the retainer is the law of Western Australia.
[112] Appeal ts 55, 63, 64, 67, 109.
The legislature may be taken to contemplate that legal services are provided under a contract of retainer (whether express or implied). The contract of retainer will have a governing law, in other words, the law of a State or country that governs the parties' rights. For the reasons we have explained, we do not approach the question of construction of pt 13 by reference to a presumption in favour of application of the Act to those situations in which, under the common law choice of law rules, the law of Western Australia is the governing law. Nonetheless, that approach is an available possible construction of the general words of pt 13.
The appellants submit that adoption of the proper law as the criterion of operation would allow too ready avoidance of the evidently protective purpose of pt 13 of the Act.[113] We accept that there is some force in this submission.
[113] Appeal ts 61, 108.
An international law firm may have standard terms of its retainer which include a provision selecting the law of a foreign country. Contrary to the respondents' submissions,[114] such a provision would not necessarily be ineffectual at common law. At common law, effect would be given to the parties' choice of proper law as long as the intention is genuine and provided there is no reason for avoiding the choice on the grounds of public policy.[115] In the example we have postulated, the selection of a foreign law may well be characterised as legitimate. Cases in which effect is not given to the parties' express choice in identifying the proper law are rare.[116] In the example postulated, the Western Australian client who retained the international law firm would not have the benefit of the protections provided by pt 13 of the 2003 Act.
[114] Appeal ts 70 - 71.
[115] Vita Foods Products Inc v Unus Shipping Co Ltd (in liq) [1939] AC 277, 290.
[116] Re Bulong Nickel Pty Ltd [2002] WASC 126; (2002) 42 ACSR 52 [39]; Davies M, Bell AS and Brereton PLG, Nygh's Conflict of Laws in Australia (9^th ed, 2014) [19.15] ‑ [19.21]. Such cases are to be distinguished from those in which a forum statute is given overriding effect notwithstanding the parties' choice of a different legal system.
However, the apparent gap left by a 'proper law of the retainer' construction illustrated by this example is ameliorated by the continuing inherent jurisdiction of this court over the conduct of legal practitioners admitted in this court.[117] That jurisdiction includes powers in relation to overcharging.[118]
[117] See Re Tkacz; Ex parte Tkacz [2006] WASC 315; (2006) 206 FLR 171 [46] - [57].
[118] Pryles & Defteros (a firm) v Green [1999] WASC 34; (1999) 20 WAR 541 [22] - [23].
Notwithstanding the consideration outlined in [181] ‑ [183], for the reasons that follow we prefer the 'proper law' construction to the appellants' construction.
The text and structure of pt 13 and of the definition of 'legal practitioner' seems to us to provide a very substantial hurdle for the construction advanced by the appellants. The appellants' construction requires a reading of par (a) of the definition of legal practitioner as including words to the effect of 'who practises in or undertakes work in this State'. As we have said, the Act's treatment of interstate practitioners (in par (b) of the definition) expressly invokes the act of practising in Western Australia as the criterion of operation. By contrast, there is no such express provision in respect of legal practitioners who are not interstate practitioners. In those circumstances, the appellants' construction involves an unacceptable degree of rewriting of the text of the Act. By contrast, the proper law construction sits much more comfortably with the language and structure of the Act.
Generally, the proper course is to read the words of the definition into the relevant provision and then construe the latter.[119] When that exercise is undertaken in the present case, it becomes clear that the criterion of operation cannot be the fact that work has been undertaken by a local practitioner within Western Australia. For example, reading the words of the definition of 'legal practitioner' into s 230(1) of the Act produces the following result:
A person:
(a)who is admitted as a legal practitioner, whose name is on the Roll of Practitioners and who is not a disqualified person; or
(b)who is an interstate practitioner who practises in this State;
must not sue for the recovery of any services, fee, charges or disbursements until a bill for the services, fee, charges or disbursements has been served upon the party charged.
That is, the prohibition in s 230(1) of the Act only applies to an interstate practitioner who practises in this State. It is implicit that the prohibition applies to the persons identified in par (a) of the definition of 'legal practitioner', irrespective of whether or not the person practises in this State. Where that express limitation is made in relation to an interstate practitioner, it is difficult to imply the same or a similar limitation in relation to locally admitted practitioners. That is particularly so when the Act uses a defined term - local practitioner - to denote a person who holds a current practising certificate and whose principal place of practice is in this State.[120] That term is not employed in s 230(1), or any other relevant provision of pt 13 of the Act. This statutory language is inconsistent with the criterion of operation of s 230(1) of the Act being the place where the legal work, which is the subject of the relevant fees etc, is undertaken.
[119] Epic Energy (Pilbara Pipeline) Pty Ltd v Commissioner of State Revenue [2011] WASCA 228; (2011) 43 WAR 186 [42], [150], [218] and cases there cited.
[120] Section 3 of the Act (definition of 'local practitioner').
Although of lesser significance, in our view there is a further consideration that counts against the appellants' construction. The legislature may be taken to have been aware, by 2003, of the emerging national market for the provision of legal services. A single retainer for the provision of legal services in more than one State or Territory would have been contemplated as a not unlikely prospect. Even where the law practice operates only from Western Australia, the legal work undertaken pursuant to a retainer will commonly include attending at meetings or court and tribunal hearings conducted outside Western Australia. It would be highly inconvenient if the taxation regime provided for by the Act was incapable of applying to all legal work done in different States under a single retainer. We think it objectively unlikely that such a highly inconvenient result could have been intended.
For these reasons, we prefer the proper law construction.
In this case, the appellants sought to have the taxing officer exercise her power under s 229(a) of the Act to enlarge the 30 day time for the appellants, as a 'party charged' for the purposes of s 231(3), to require the law practice to serve them with bills containing detailed items. In our view, it is implicit that this power is only exercisable in respect of a bill which is liable to be taxed under the Act, and so is only available where the proper law of the retainer is the law of Western Australia. As the proper law of the retainers between the Receivers and the law practice was the law of New South Wales, the power in s 229(a) of the Act was not available. The question referred to the primary judge was, somewhat infelicitously, posed by reference to whether the appellants were 'a person or party charged' within the meaning of s 228(2)(a) of the Act. However, the primary judge correctly concluded that the appellants were not entitled to make an application under s 232(3) of the Act,[121] so that the power to extend the time for making such an application did not arise.
[121] See the answer to question 1 in the orders made by the primary judge on 11 November 2016.
Consequently, ground 4 fails and the appeal must be dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
EA
RESEARCH ASSOCIATE TO THE HONOURABLE CHIEF JUSTICE MARTIN
11 JUNE 2018

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