Larussa v Anna Carr as administratrix of the estate of Giuseppe Larussa - [2024] WASCA 16

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT :   THE COURT OF APPEAL (WA)
CITATION:   LARUSSA -v- ANNA CARR as administratrix of the estate of GIUSEPPE LARUSSA [2024] WASCA 16
CORAM:   BUSS P
VAUGHAN JA
HALL JA

HEARD:   15 NOVEMBER 2023
DELIVERED          :   13 FEBRUARY 2024
FILE NO/S:   CACV 48 of 2022
BETWEEN:   TONY LARUSSA
Appellant
AND
ANNA CARR as administratrix of the estate of GIUSEPPE LARUSSA
First Respondent
LARUSSA PASTORAL HOLDINGS PTY LTD (AS FORMER TRUSTEE OF THE LARUSSA PASTORAL TRUST) as former trustee of THE LARUSSA PASTORAL TRUST
Second Respondent
LARUSSA CUSTODIAN SERVICES AUSTRALIA PTY LTD as trustee for THE LARUSSA PASTORAL TRUST
Third Respondent

ON APPEAL FROM:
For File No:   CACV 48 of 2022
Jurisdiction              :   SUPREME COURT OF WESTERN AUSTRALIA
Coram:   CURTHOYS J
Citation: ANNA CARR as administratrix of the estate of GIUSEPPE LARUSSA -v- LARUSSA PASTORAL HOLDINGS PTY LTD as former trustee of THE LARUSSA PASTORAL TRUST [No 3] [2022] WASC 139
File Number            :   CIV 2162 of 2016

Catchwords:

Appeals - Costs - Indemnity principle - Corporation failed to give notice of intention to start engaging in legal practice - Corporation engaged in legal practice in contravention of s 102 of the Legal Profession Act 2008 (WA) - Appellant restrained from seeking assessment of any costs or disbursements for anything done by the corporation in contravention of s 102 - Effect on appellant's liability for legal costs and disbursements for purpose of indemnity principle - Proper construction of s 102 - Whether retaining and paying counsel a thing done in engaging in legal practice

Legislation:

Legal Profession Act 2008 (WA), s102

Result:

Extension of time to appeal granted
Appeal dismissed

Category: B

Representation:

Counsel:

Appellant	:	M Curwood SC & S R Pack
First Respondent	:	S Penglis SC
Second Respondent	:	No appearance
Third Respondent	:	No appearance

Solicitors:

Appellant	:	Corporate Counsel Lawyers
First Respondent	:	Cornerstone Legal
Second Respondent	:	Corporate Counsel Lawyers
Third Respondent	:	Corporate Counsel Lawyers

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

Adams v London Improved Motor Coach Builders Ltd [1921] 1 KB 495
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) [2009] HCA 41; (2009) 239 CLR 27
Angor Pty Ltd v Ilich Motor Co Pty Ltd (1992) 37 FCR 65
Attorney General v Quill Wills Ltd (1990) 3 WAR 500
Barristers' Board v Palm Management Pty Ltd [1984] WAR 101
Cachia v Haines [1994] HCA 14; (1994) 179 CLR 403
Cannon Street Pty Ltd v Karedis [2006] QSC 78
Carr v Larussa Pastoral Holdings Pty Ltd [2019] WASC 471
Carr v Larussa Pastoral Holdings Pty Ltd [No 2] [2020] WASC 77
Carr v Larussa Pastoral Holdings Pty Ltd [No 3] [2022] WASC 139
Catto v Hampton Australia Ltd (in liq) [2008] SASC 231
CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384
D'Alessandro & D'Angelo v Bouloudas (1994) 10 WAR 191
Dean v Legal Practice Board [2015] WASC 260
Dean v Legal Practice Board [2016] WASCA 63
Douglas & State of Western Australia v Tickner (1994) 49 FCR 507; (1994) 34 ALD 192
Elders Trustee and Executor Company Ltd v Estate of Herbert (1996) 5 NTLR 123
Fullalove v Parker (1862) 12 CB (NS) 246; (1862) 142 ER 1137; (1862) 31 LJ CP 239
Gardner v R [2003] NSWCCA 199; (2003) 39 MVR 308
GLJ v The Trustees of the Roman Catholic Church for the Diocese of Lismore [2023] HCA 32
Grundmann v Georgeson [2000] QCA 394
Gundry v Sainsbury [1910] 1 KB 645
Hancock Prospecting Pty Ltd v Hancock [No 3] [2016] WASC 423
Harold v Smith (1860) 5 H & N 371, 385; 157 ER 1229
In re Hope (1872) LR 7 Ch App 766
In re Jones (1869) LR 9 Eq 63
Irving v Gagliardi; Ex parte Gagliardi (No 2) (1895) 6 QLJ 200
Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534
Legal Practice Board v Computer Accounting and Tax Pty Ltd [2007] WASC 184; (2007) 35 WAR 59
Legal Practice Board v Giraudo [2010] WASC 4
Legal Practice Board v Tilley [2006] WASC 73
Lennon v Gibson & Howes Ltd [1919] AC 709; (1919) 26 CLR 285
Maggbury Pty Ltd v Hafele Australia Pty Ltd (No 2) [2001] QSC 78; [2002] 1 Qd R 183
Marsh v Baxter [No 2] [2016] WASCA 51
Mohammadi v Bethune [2018] WASCA 98
Norrie v NSW Registrar of Births, Deaths and Marriages [2013] NSWCA 145; (2013) 84 NSWLR 697
Noye v Robbins [2010] WASCA 83
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
Owen v Menzies [2012] QCA 170; [2013] 2 Qd R 327
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355
Ramaciotti v Federal Commissioner of Taxation [1920] HCA 70; (1920) 29 CLR 49
Registrar of Titles (WA) v Franzon [1975] HCA 41; (1975) 132 CLR 611
Retirement Care Australia (Hollywood) Pty Ltd v Commissioner for Consumer Protection [2013] WASC 219
Sherritt Gordon Mines Ltd v Commissioner of Taxation of The Commonwealth of Australia [1977] VR 342; (1976) 10 ALR 441
SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362
Tarry v Pryce (No 2) (1987) 88 FLR 270
The Barristers' Board v Hawkins & Lenton Pty Ltd (Unreported, WASC, Library No 2364 A-C, 22 June 1978)
The Barristers' Board v Marbellup Nominees Pty Ltd [1984] WAR 335
The Legal Practice Board v Adams [2001] WASC 78
TNT Bulkships Ltd v Hopkins (No 2) [1989] NTSC 42; (1989) 38 NTLR 231
Transport Accident Commission v Hogan [2013] VSCA 335; (2013) 41 VR 112
Van der Feltz v Legal Practice Board [2017] WASC 2
Wentworth v Rogers [2006] NSWCA 145; (2006) 66 NSWLR 474
YZ Finance Co Pty Ltd v Cummings [1964] HCA 12; (1964) 109 CLR 395

BUSS P & VAUGHAN JA:

Overview

The indemnity principle has the effect that a party who does not have a liability to his or her solicitor for costs cannot recover costs against the unsuccessful party to the litigation.[1]
[1] Noye v Robbins [2010] WASCA 83 [296]; Marsh v Baxter [No 2] [2016] WASCA 51 [31]. However, the liability need not remain outstanding (as, for example, where the successful party has paid its liability for legal costs before the order for costs). It is the creation of a liability to pay the solicitor's costs, not the existence of an ongoing undischarged liability, which gives rise to the right to recover costs: Noye v Robbins [314] ‑ [315], [322].
In the primary proceedings the appellant, Mr Larussa, was represented by an incorporated legal practice based in Victoria, Tabforce Pty Ltd trading as 'Garde‑Wilson Lawyers' (GWL). GWL failed to give a notice required under s 102(1) of the Legal Profession Act 2008 (WA) (LPA).[2] As a result, GWL was prohibited from engaging in legal practice in Western Australia (LPA s 102(2)). Also, GWL was not entitled to recover any amount for anything it did in contravention of s 102(2) (LPA s 102(5)). And, so far as Mr Larussa had paid GWL for work done in contravention of s 102(2), Mr Larussa was entitled to recover that amount from GWL as a debt due (LPA s 102(6)).
[2] The LPA has been repealed. See s 260(a) of the Legal Profession Uniform Law Application Act 2022 (WA). However, as the LPA governs the matters the subject of this appeal it is convenient to refer to the LPA in the present tense.
Mr Larussa succeeded in the primary proceedings and a costs order was made in his favour. The first respondent, Ms Carr, objected to Mr Larussa's bill of costs and invoked the indemnity principle contending, in effect, that GWL's contravention of s 102(2) meant that Mr Larussa's liability for legal costs and disbursements was extinguished. The primary judge upheld the objection and made an order restraining Mr Larussa from proceeding with an assessment of any costs or disbursements incurred or paid for anything done by GWL in contravention of s 102(2).[3]
[3] Carr v Larussa Pastoral Holdings Pty Ltd [No 3] [2022] WASC 139 (primary reasons).
On appeal, Mr Larussa contends that the primary judge should have found that s 102 of the LPA did not extinguish Mr Larussa's liability to GWL meaning that the indemnity principle does not prevent Mr Larussa from recovering his legal costs and disbursements charged by and paid to GWL as against Ms Carr. Alternatively, Mr Larussa contends that s 102 of the LPA did not extinguish Mr Larussa's liability for disbursements (in particular counsel fees) meaning that they are recoverable against Ms Carr.
For the reasons that follow the appeal must be dismissed. Section 102 of the LPA, properly construed, has the effect that a corporation has no legal right to recover or retain any amount for anything done while engaging in legal practice in Western Australia in default of s 102. It follows that the primary judge's order was correctly made.

Background

Ms Carr commenced proceedings in the Supreme Court against Mr Larussa and others in 2016. The primary proceedings were tried before the primary judge in 2019. They failed.[4] On 10 March 2020, the primary judge made costs orders following the delivery of further reasons as to costs.[5] These include an order that Ms Carr pay Mr Larussa's costs of the proceedings to be taxed. On 5 December 2020, Mr Larussa filed a draft bill of costs. The draft bill sought $297,913.55. This included a substantial amount on account of work done by senior counsel and junior counsel.
[4] Carr v Larussa Pastoral Holdings Pty Ltd [2019] WASC 471.
[5] Carr v Larussa Pastoral Holdings Pty Ltd [No 2] [2020] WASC 77.
Ms Carr objected to Mr Larussa's bill of costs on the basis that the law practice representing him at trial (ie GWL) contravened s 102(2) of the LPA and that, consequently, Mr Larussa's liability to the firm for legal costs and disbursements was extinguished.
It was uncontroversial that:
1.On 19 July 2019 GWL filed a notice of change of solicitor, thereby notifying the court and the other parties to the primary proceedings that GWL was acting for Mr Larussa in the primary proceedings.
2.The sole director and office holder of GWL was Zarah Garde‑Wilson. Ms Garde‑Wilson was admitted to practice as a legal practitioner in Victoria. In 2017 Ms Garde‑Wilson began providing legal services through GWL. While GWL had an address for service in Perth, its primary place of business was in Victoria.
3.In acting for Mr Larussa in the primary proceedings, GWL engaged in legal practice in Western Australia.
4.GWL did not give notice to the Legal Practice Board (Board) pursuant to s 102(1) of the LPA before starting to provide Mr Larussa with legal services in relation to the primary proceedings - indeed, notice was not given until well after completion of the trial of the primary proceedings.
5.Mr Larussa paid GWL all invoices rendered to him for costs and disbursements in relation to GWL's legal services in acting for Mr Larussa in the primary proceedings. This included disbursements in the form of counsel fees for senior counsel and junior counsel. At the relevant time the senior counsel and junior counsel who were instructed by GWL on behalf of Mr Larussa were Australian legal practitioners whose home jurisdiction was Victoria.
6.Senior counsel and junior counsel were retained by GWL to act on Mr Larussa's behalf - it was not the case that Mr Larussa briefed counsel directly.
At the relevant time, s 102 of the LPA was headed 'Notice of intention to start providing legal services'. It provided:
(1)Before a corporation starts to engage in legal practice in this jurisdiction, the corporation must give the Board written notice, in the approved form, of its intention to do so.
(2)A corporation must not engage in legal practice in this jurisdiction if it is in default of this section.
Penalty:a fine of $25 000.
(3)A corporation that starts to engage in legal practice in this jurisdiction without giving a notice under subsection (1) is in default of this section until it gives the Board written notice, in the approved form, of the failure to comply with that subsection and the fact that it has started to engage in legal practice.
(4)The giving of a notice under subsection (3) does not affect a corporation’s liability under subsection (1) or (2).
(5)A corporation is not entitled to recover any amount for anything the corporation did in contravention of subsection (2).
(6)A person may recover from a corporation or a legal practitioner associate of the corporation, as a debt due to the person, any amount the person paid to or at the direction of the corporation for anything the corporation did in contravention of subsection (2).
(7)This section does not apply to a corporation that is not an incorporated legal practice because of section 99(2).
Ms Garde‑Wilson gave unchallenged affidavit evidence that GWL did not give the notice required by s 102(1) because she was under the erroneous assumption that Western Australia had adopted the uniform legislation as to legal practitioners that applied in Victoria. The uniform legislation did not have an equivalent provision to s 102. When Ms Garde‑Wilson became aware of the requirements of s 102 she contacted the Board. The Board subsequently informed Ms Garde‑Wilson that it would not take any action against GWL.
Mr Larussa affirmed a short affidavit in answer to Ms Carr's objection to the assessment of his bill of costs. Mr Larussa confirmed that he had paid all costs and disbursements that had been charged by GWL. Mr Larussa also said that he had been made aware of the provisions of s 102 of the LPA. Mr Larussa went on to state:
I have not and do not intend to make any complaint of [GWL] for non‑compliance with s l02 and I am willing to undertake to the Court that I will not do so.
The primary judge interpreted this as Mr Larussa deposing that he would not seek to recover the funds he had paid to GWL.[6] That, however, is not what the passage conveys. Mr Larussa stated that he did not intend to complain about GWL's non-compliance with the statutory obligations in s 102 of the LPA. Mr Larussa does not state, in terms or at all, that he will not seek to invoke his right under s 102(6) of the LPA.
[6] Primary reasons [21].
At the appeal hearing, however, senior counsel for Mr Larussa informed the court that Mr Larussa was prepared to proffer a suitable undertaking if it was required - it was said that Mr Larussa would agree to an order which made taxation of his bill conditional on him giving an undertaking that he would not seek payment from GWL.[7] Self‑evidently, without an undertaking of some kind, if Mr Larussa was to succeed in the appeal there was the potential for double recovery. Mr Larussa might recover against both GWL and Ms Carr.
[7] Appeal ts 8, 21.
The offer to provide an undertaking is irrelevant to the proper disposition of the appeal. The appeal turns on the proper construction of s 102 of the LPA. Whether or not there is an undertaking preventing double recovery does not affect the constructional questions raised by the appeal.

The primary judge's decision

Ms Carr sought an order that Mr Larussa be restrained from seeking assessment by the court of any costs or disbursements incurred or paid for anything done by GWL in contravention of s 102(2) of the LPA.
The primary judge explained the indemnity principle by repeating the exposition provided by Pritchard J (as her Honour was then) in Hancock Prospecting Pty Ltd v Hancock [No 3].[8] We address the indemnity principle in more detail below (see [27] - [40]). For now, it suffices to say that Mr Larussa does not challenge the primary judge's understanding of the indemnity principle. The issues on appeal concern whether the primary judge misapplied the indemnity principle because his Honour misconstrued s 102 of the LPA.
[8] Hancock Prospecting Pty Ltd v Hancock [No 3] [2016] WASC 423.
In reviewing the indemnity principle, the primary judge identified that a distinction has been drawn between two types of statutory provision:[9]
1.Cases where a statutory provision disentitles a solicitor from charging the client for legal work or precludes or extinguishes any liability on the client's part - in such cases the client will not be entitled to recover costs from the unsuccessful party.
2.Cases where a statutory provision does not extinguish the client's debt but merely precludes the solicitor from enforcing the debt - in such cases the client will be entitled to recover costs from the unsuccessful party provided that the costs have already been paid by the client.
[9] Primary reasons [14]. See further [34] - [40] below.
The primary judge identified the critical issue as being whether, on the proper construction of s 102, liability on the part of Mr Larussa to GWL was precluded, or alternatively, Mr Larussa's debt arose but GWL was precluded from enforcing it.[10]
[10] Primary reasons [12].
The primary judge considered the terms of s 102 and other provisions of the LPA. Reference was primarily made to s 260, s 268 and s 448. In a brief disposition his Honour concluded that s 102 of the LPA precluded liability on the part of Mr Larussa to GWL.[11] The primary judge contrasted the language of s 102 with s 268 finding that the right to charge costs was not extinguished by reason of a failure to comply with s 268.[12]
[11] Primary reasons [33].
[12] Primary reasons [27] - [28].
The essential basis for his Honour's conclusion is found in the following passage of the primary reasons:
Under s 102 the right to enforce costs does not arise until notice is given. Nothing in the [LPA] gives a retrospective right to fees for work undertaken in breach of s 102. [GWL] finds itself in the position that by virtue of s 102 it is not entitled to charge [Mr Larussa] for the legal work undertaken on [Mr Larussa's] behalf. It follows that the application of the indemnity principle means that [Mr Larussa], who does not have a liability to [GWL] for costs, cannot recover costs against [Ms Carr], the unsuccessful party to the litigation.
The fact that the language of s 268 was not used in relation to a failure to comply with s 102(1) strongly suggests that the effect of s 102 was not intended to be merely suspensory.[13]
[13] Primary reasons [29] - [30].
The primary judge observed that the authorities from other jurisdictions that the parties had referred him to were not helpful. Section 102 was said to be a 'unique provision'. His Honour placed store in the circumstance that, unlike the other cases, the legal practitioner was not entitled to retain money paid for his or her work as any amount paid was made recoverable by the client 'as a debt due to that [sic] person'.[14]
[14] Primary reasons [32].
Accordingly, the primary judge made the order restraining Mr Larussa from proceeding with an assessment based on the costs and disbursements incurred and paid for anything done by GWL in contravention of s 102(2) of the LPA.
It is odd that the primary judge opted to provide for a coercive order in the form of an injunction. Prima facie lesser relief was all that was necessary and appropriate. For example, the primary judge could have stayed the taxation of Mr Larussa's costs to the extent that Mr Larussa sought costs or disbursements on account of anything GWL did in contravention of s 102(2). Alternatively, the primary judge might have treated the matter before him as the referral of a question arising in the course of the taxation and given directions accordingly. However, on appeal no point is taken about the form of the final order.

The appeal

Mr Larussa requires an extension of time to appeal. While the appeal notice was filed within time there was late service. The service was only late by a matter of days. The delay has been explained in a solicitor's affidavit; it is attributable to the solicitor rather than Mr Larussa. Ms Carr does not oppose the application for an extension of time. There is no apparent prejudice from the late service. In the circumstances, the extension of time should be granted.

Mr Larussa advances two grounds of appeal. In substance, by ground 1, Mr Larussa contends that the primary judge erred in law by misconstruing s 102 of the LPA insofar as his Honour concluded that GWL's contravention extinguished any liability on the part of Mr Larussa to GWL with the result that the indemnity principle prevented Mr Larussa from recovering his legal costs and disbursements from Ms Carr. By ground 2, which is advanced in the alternative to ground 1, Mr Larussa contends that the primary judge erred in law in finding that, on its proper construction, the prohibition in s 102 of the LPA applied to the incurring and payment of disbursements (in particular counsel fees) with the result that the indemnity principle prevented Mr Larussa from recovering his disbursements from Ms Carr.
Accordingly, by ground 1 Mr Larussa challenges the primary judge's conclusion that Mr Larussa cannot recover from Ms Carr in respect of the legal costs and disbursements paid to GWL. By ground 2, Mr Larussa challenges the primary judge's conclusion so far as Mr Larussa sought recovery from Ms Carr of disbursements incurred by GWL and paid by Mr Larussa.

The indemnity principle

Costs are not imposed to punish the unsuccessful party; nor are they awarded to reward the successful party. Costs are compensatory; they are awarded as an indemnity - usually only a partial indemnity - for legal costs actually incurred.[15] In this respect the rationale for an order for costs is that it is just and reasonable that the unsuccessful party who has caused the other party to incur litigation costs should reimburse the successful party for the liability it has incurred.[16]
[15] Cachia v Haines [1994] HCA 14; (1994) 179 CLR 403, 410, 414; Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72, [1], [67], [133](4), [143]; Noye v Robbins [296] (referring to Harold v Smith (1860) 5 H & N 371, 385; 157 ER 1229, 1231).
[16] Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534, 567.
That reimbursement rationale underpins the indemnity principle. The principle, as has already been seen, provides at its simplest that a successful party who does not have a liability to its solicitor for costs cannot recover costs against the unsuccessful party to the litigation. No amount can be recovered from the unsuccessful party for costs where the successful party has no legal obligation to pay its solicitor's costs. The indemnity principle applies to ensure that costs are only awarded to reimburse a party who actually incurred a liability for the costs.
The operation of the indemnity principle means that a successful party cannot obtain an award of costs against the unsuccessful party when:
1.The successful party and the party's solicitor have an agreement that the successful party will not have to pay the solicitor's costs.[17]
2.The successful party's solicitor cannot recover legal costs from the successful party.[18] (However, the circumstance that the successful party is subject to external administration preventing the commencement of recovery proceedings in a court of competent jurisdiction is insufficient. For the purpose of the indemnity principle it is enough that the successful party had or has a legal liability to pay its solicitor even if the likelihood of being called upon to pay is remote.)[19]
[17] Noye v Robbins [297] (referring to Gundry v Sainsbury [1910] 1 KB 645).
[18] Noye v Robbins [297] (referring to TNT Bulkships Ltd v Hopkins (No 2) [1989] NTSC 42; (1989) 38 NTLR 231).
[19] Angor Pty Ltd v Ilich Motor Co Pty Ltd (1992) 37 FCR 65, 72.
Also, where the liability of a successful party to its solicitor is limited in amount, the amount of costs that can be recovered from the unsuccessful party is limited to that amount.[20]
[20] Noye v Robbins [297] (referring to Tarry v Pryce (No 2) (1987) 88 FLR 270).
However, as Owen JA (Pullin & Buss JJA agreeing) explained in Noye v Robbins, the indemnity principle does not mean that a successful party cannot recover costs merely because the party may be relieved from the obligation of paying its solicitor's costs.[21] A successful party can recover costs if the party has an obligation to pay its solicitor notwithstanding that a third‑party might (and in all probability will) relieve the party of that obligation.[22] So too payment of a successful party's legal costs by a third-party with the resultant discharge of the successful party's liability to its solicitor before an order for costs does not disentitle the successful party to an order for costs.[23]
[21] Noye v Robbins [298].
[22] Noye v Robbins [298] - [299] (referring to Adams v London Improved Motor Coach Builders Ltd [1921] 1 KB 495).
[23] Noye v Robbins [310], [312] - [313].
The indemnity principle is flexible and is designed to allow for a just and fair result.[24]
[24] Noye v Robbins [313], [332] (see also [333] - [338]); Wentworth v Rogers [2006] NSWCA 145; (2006) 66 NSWLR 474 [45], [50], [54].
Mr Larussa relied on the decision of the Court of Appeal of Queensland in Grundmann v Georgeson. There it was observed that the rule that costs cannot be recovered by a successful party not liable to his or her solicitor 'is not applied with excessive rigour'.[25] That, however, was a case concerned with the sufficiency of the evidence as to the terms of the solicitor's retainer (ie the question was whether it was a case of the kind mentioned in [29.1] above). In this court Marsh v Baxter [No 2] explains why, in the absence of evidence to the contrary, a client's liability to his or her solicitor will be inferred.[26] The observation in Grundmann v Georgeson is directed to the same considerations and must, in our view, be understood in that context. It is not an observation of general application which restricts the operation of the indemnity principle.
[25] Grundmann v Georgeson [2000] QCA 394 [7].
[26] Marsh v Baxter [No 2] [37] - [38].
In excluding an award of costs where the successful party's solicitor cannot recover legal costs from the successful party the indemnity principle may apply because of the operation of statute. Indeed, as long ago as 1895 Sir Samuel Griffith recognised that if, by reason of the operation of some statutory prohibition, a successful party is not liable to pay its own solicitor any costs, the party cannot recover any costs from the unsuccessful party.[27]
[27] Irving v Gagliardi; Ex parte Gagliardi (No 2) (1895) 6 QLJ 200, 200.
A distinction has been drawn between two kinds of statutory provision:
1.In the first category, the solicitor is prohibited from charging the client, or alternatively, the client's liability is precluded or extinguished. In this scenario, the successful party will not be able to recover costs from the unsuccessful party.[28]
2.In the second category, the client's liability is not extinguished but the solicitor is prohibited from taking action to recover the liability. In this scenario, the successful party will be able to recover costs from the unsuccessful party. However, recovery is limited to the legal costs in fact paid by the successful party to its solicitor.[29]
[28] See eg Maggbury Pty Ltd v Hafele Australia Pty Ltd (No 2) [2001] QSC 78; [2002] 1 Qd R 183 [19] ‑ [24] (Wilson J refers to the distinction at [19]); Cannon Street Pty Ltd v Karedis [2006] QSC 78 [53] ‑ [55] (White J refers to the distinction at [53]).
[29] See eg Fullalove v Parker (1862) 12 CB (NS) 246, 247; (1862) 142 ER 1137, 1138; In re Jones (1869) LR 9 Eq 63, 67 - 68 (a case as between solicitor and client); In re Hope (1872) LR 7 Ch App 766, 767; TNT Bulkships Ltd v Hopkins (No 2) [11] ‑ [21], [59], [70]; Elders Trustee and Executor Company Ltd v Estate of Herbert (1996) 5 NTLR 123, 132 - 133; Catto v Hampton Australia Ltd (in liq) [2008] SASC 231 [37] ‑ [40].
In the second category of case the exception is warranted on the basis that the solicitor is entitled to retain (and the client has no right to recoup from the solicitor) the money paid by the successful party to the solicitor for legal services actually performed.[30]
[30] TNT Bulkships Ltd v Hopkins (No 2) [15] (referring to Fullalove v Parker (12 CB (NS), 247; 142 ER 1138)); Elders Trustee and Executor Company Ltd v Estate of Herbert (137).
The rationale for the exception is well established. It was referred to in the decision of Fullalove v Parker. In that case, following taxation before a master, a defendant moved for an order that the plaintiff should be disallowed his costs of the action on the ground that the plaintiff's solicitor was not duly certificated. It was submitted that the solicitor was precluded from recovering costs by s 26 of the Solicitors Act 1843 (UK). That provision, in substance, prevented a solicitor maintaining an action for the recovery of fees or disbursements for things done as a solicitor when uncertificated. It was held that the objection that the solicitor was not duly certificated, and his client could not on that account recover costs against the unsuccessful party, had to be taken at the taxation. In the absence of a satisfactory explanation the objection could not be taken afterwards on a motion to set aside the taxation.
Willes J nevertheless dealt with the point of principle. There are two versions of Willes J's judgment in the reports. In the version reproduced in the English Reports Willes J is recorded as stating:
Undoubtedly, if the plaintiff's attorney is uncertificated, he is disabled from recovering costs; and the plaintiff would not be entitled to recover for payments made in respect of services rendered by the attorney under such circumstances, except where he has made advances to his attorney without notice of his disability. Where such advances have been made, they cannot be recovered back; for, the debt is due, though the attorney is disabled from bringing an action to recover it.[31] (emphasis added)
[31] Fullalove v Parker (12 CB (NS), 247; 142 ER 1138).
There is a fuller account of Willes J's reasoning in the report in the Law Journal Reports, Common Pleas (New Series). There Willes J's reasoning is stated in these terms:
If the attorney is really uncertificated he is not entitled to recover any costs; nor is the plaintiff entitled to recover such costs from the defendant, except in this case only - if the plaintiff has made advances to the attorney, he cannot recover them back upon a condictio indebiti, as for money paid under a mistake; the attorney, though uncertificated, is entitled to retain the money so advanced, and the plaintiff would have a right to recover this amount from the defendant.[32] (emphasis added)
[32] Fullalove v Parker (1862) 31 LJ CP 239, 240.
The Law Journal Reports version also contains a fuller version of Byles J's judgment in Fullalove v Parker from which it can be discerned that Byles J was also of the opinion that the exception operated because money paid by the client to the solicitor 'cannot be recovered back'.[33]
[33] Fullalove v Parker (31 LJ CP 240).
The basis for the exception appears clearly from the Law Journal Reports version of Willes J's reasons. The statutory provision in question was directed to recovery of an uncertificated solicitor's fees and disbursements. The solicitor was prohibited from maintaining an action for recovery. An analogy could be drawn - and, indeed, in subsequent cases was expressly drawn[34] - between the prohibition and a limitation bar. The provision did not extinguish the debt but rather prevented the solicitor from taking steps to enforce payment of the debt. Accordingly, the solicitor could not maintain an action for recovery of the debt against the client. But, so far as payment was made and money came into the solicitor's hand, the solicitor could retain the funds - as the payment discharged the debt the client could not recover the payment on the basis of a claim for money had and received. In the result the client had outlaid money for his or her legal costs; the outlay could not be recouped from the solicitor. It was thus something for which reimbursement might be sought from the unsuccessful party by way of a costs order.
[34] See eg In re Jones (67).
It is convenient to refer to the two categories summarised at [35] above.[35] However, some care must be taken in doing so. The indemnity principle turns on whether the successful party relevantly has or had a liability to its solicitor for legal costs as opposed to some exercise in classification. Seeking to characterise a particular statutory provision as falling within one of two categories of case cannot become a substitute for the proper application of the indemnity principle. The initial enquiry must be to construe the statutory provision so as to determine its meaning. Once that is done, and the facts are considered, there may be a determination of whether the successful party had a relevant legal liability to its solicitor so as to ground the application of the indemnity principle.
[35] Indeed, both Mr Larussa and Ms Carr referred to the distinction. See: Mr Larussa's submissions pars 27 ‑ 30, 33, 39, 47 WAB 19 - 21, 23, 24; Ms Carr's submissions par 29 WAB 38.

The parties' submissions

Mr Larussa's submissions

Mr Larussa observed that each of Ms Garde‑Wilson, senior counsel and junior counsel had a right to practice in Western Australia.[36] It was accepted, however, that GWL had contravened s 102(2) of the LPA. Accordingly, as between GWL and Mr Larussa, the consequences prescribed by s 102(5) and s 102(6) of the LPA applied.
[36] LPA s 12(2), s 35.
In relation to ground 1, Mr Larussa pointed out that s 102(5) and s 102(6) were in substantially similar terms to s 12(6) and s 12(7) of the LPA dealing with a person who has contravened the requirement not to engage in legal practice without being an Australian legal practitioner. In this respect s 12 relevantly provides:
(2)A person must not engage in legal practice in this jurisdiction unless the person is an Australian legal practitioner.
Penalty:a fine of $20 000.
…
(6)A person is not entitled to recover any amount in respect of anything the person did in contravention of subsection (2).
(7)A person may recover from another person in a court of competent jurisdiction, as a debt due to the person, any amount the person paid to the other person in respect of anything the other person did in contravention of subsection (2).
Mr Larussa acknowledged the distinction that had been drawn in the cases depending on the type of statutory provision. Mr Larussa explained the first category of provision - where the client was not entitled to recover costs from the unsuccessful party - as being the result of a statutory mandate that under no circumstance would the solicitor be entitled to retain any costs, the corollary being that under no circumstance would the client pay any costs. Mr Larussa acknowledged that the LPA contained examples of such provisions. He referred to s 285 and s 287(5) - (6) dealing with contingency fees. In that context there was an express obligation on a law practice to repay any amount received in respect of legal services in the matter to which the prohibited contingency fees costs agreement related. But, in Mr Larussa's submission, s 102 of the LPA was not such a provision.
Mr Larussa said that:
1.By s 102(5) a defaulting corporation (ie a corporation in contravention of s 102(2)) was prevented from recovering its costs. However, there was no prohibition on either: (a) charging costs; or (b) retaining costs paid to the corporation. The provision did no more than preclude the defaulting corporation from enforcing the client's liability.
2.By 102(6) the client was granted an option to recover any costs paid to the defaulting corporation. However, the right was discretionary - senior counsel for Mr Larussa contended that the word 'may' in s 102(6) was permissive and did not, on its face, extinguish any liability (at least where the right was not exercised).[37] There was no automatic requirement that the defaulting corporation must repay the costs. In this respect Mr Larussa contrasted s 102(6) with the statutory regime that applied under s 287(5) in relation to contingency fees.
[37] Appeal ts 6 - 7, 9, 22.
Accordingly, in Mr Larussa's submission, the effect of s 102 was as if he could choose to pay GWL's costs although he could not be forced to do so. So understood s 102 fitted within the second category of case where a client who has paid legal costs may recover them from the unsuccessful party. Mr Larussa drew an analogy with In Re Hope and TNT Bulkships Ltd v Hopkins (No 2) and referred to Catto v Hampton Australia Ltd (in liq) and various cases mentioned therein.[38] In particular, Mr Larussa, by senior counsel, submitted that where the successful party had actually paid costs to his or her solicitor the effect of the second category of case was that the indemnity principle permitted recovery from the unsuccessful party unless the statutory provision expressly precluded retention.[39]
[38] Catto v Hampton Australia Ltd (in liq) [37] - [39].
[39] Appeal ts 9 - 14, 16 - 18, 20 - 22.
Senior counsel for Mr Larussa accepted, however, that none of the cases Mr Larussa relied on within the second category of case included an equivalent provision to s 102(6) of the LPA.[40]
[40] Appeal ts 14.
Mr Larussa said it was enough if he, as the client, had paid costs to his solicitor even if the costs obligation was not enforceable - it could be said that he had incurred the costs by bringing the liability upon himself. The result was contended to be consistent with the notion that costs are awarded by way of indemnity. In recovering from Ms Carr as the unsuccessful party Mr Larussa was being reimbursed for costs actually incurred and paid.
In so construing s 102 as not having an effect of extinguishing the client's liability Mr Larussa asserted that his preferred construction was consistent with and reinforced by the statutory purpose of the LPA and s 102. Mr Larussa rejected the suggestion that his construction protected the position of the defaulting corporation by enabling retention of funds paid despite the contravention of s 102(2).[41] Mr Larussa, by senior counsel, pointed to the detriment that might otherwise be suffered by a client if left only with a right of recovery under s 102(6) - it might be, for example, that the defaulting corporation was insolvent. The primary judge's construction resulted in the possibility that a successful party might not be able to recover his or her costs from anyone.[42]
[41] Appeal ts 18 - 19.
[42] Appeal ts 8, 19.
Mr Larussa asserted that the outcome of his preferred construction of s 102 of the LPA was consistent with a flexible application of the indemnity principle to produce a fair and just result.
In the alternative, as to ground 2, Mr Larussa identified that his bill of costs included disbursements. The disbursements included costs for work done by senior counsel and junior counsel. Mr Larussa said that the primary judge concluded that s 102 applied to both the costs for legal services performed by GWL and the disbursements (including counsel fees) incurred or paid by GWL.
Mr Larussa contended that counsel fees related to legal practice engaged in by counsel rather than GWL. Accordingly, such costs were not caught by s 102(5) or s 102(6). In this respect Mr Larussa argued that GWL did not engage in legal practice in contravention of s 102(2) merely by incurring or paying counsel fees for legal work performed by counsel. Mr Larussa also contended that a construction of s 102 which captured the payment of properly incurred counsel fees (or, giving another example, expert fees) did not serve the purposes of the LPA or any rational purpose.

Ms Carr's submissions

Ms Carr denied any error on the part of the primary judge. In substance, Ms Carr relied on the primary judge's reasoning. In relation to ground 1 Ms Carr stated:
1.Section 102 extinguished Mr Larussa's liability to GWL. This was the effect of the statutory provision because:
(a)Section 102(2) was not merely directed to charging for or enforcing payment of legal costs. Ms Carr characterised s 102(2) as providing for an 'absolute prohibition'. It prohibited a corporation from engaging in legal practice, ie a corporation was prohibited from performing any legal services in Western Australia where it had not complied with s 102(1).
(b)A contravention of s 102(2) constituted an offence under the LPA.
(c)Against that background, s 102(5) was not limited to enforcing the payment of legal costs. Rather, it constituted a prohibition on charging for legal services where the services were performed in contravention of s 102(2). It was highly unlikely that the legislature intended that a corporation engaging in legal practice in contravention of s 102(2) could render invoices for its legal services and was simply prevented from enforcing payment.
(d)Section 102(6) put the matter beyond doubt so far as it made provision for the recovery of any money paid for legal services performed in contravention of s 102(2).
2.The primary judge's construction of s 102 was consistent with and better achieved the purpose of the statutory provision. Senior counsel for Ms Carr contended that the provision evinced a purpose of consumer protection - it sought to ensure that no corporation engaged in legal practice in Western Australia without notifying the Board as the relevant regulator.[43] Senior counsel further contended that this purpose meant that, in the event of any constructional choice, the language of the provision should not be read down. It was said that the construction that best served the protective purpose of s 102 ought to be preferred.[44]
3.The authorities relied on by Mr Larussa all related to work done and costs charged by uncertificated practitioners and were distinguishable.
4.Recovery in the case of the second category of provision was warranted on the basis that the solicitor was entitled to retain the money paid for the legal services the solicitor had performed. That was not the position in the present case given the clear language of s 102(6).
[43] Appeal ts 30.
[44] Appeal ts 32.

In short, Ms Carr contended that, on the proper construction of s 102, GWL was not entitled to charge Mr Larussa for legal services undertaken on behalf of Mr Larussa where GWL was not entitled to engage in legal practice in Western Australia at the relevant time. Accordingly, by virtue of s 102, Mr Larussa did not have a liability to his solicitor to pay for costs. There was thus no basis to recover costs against Ms Carr so far as costs are awarded to indemnify a successful party for its liability to pay costs to its solicitor.
As to ground 2, Ms Carr pointed out that Mr Larussa did not engage senior counsel and junior counsel on a direct brief. Senior counsel and junior counsel were retained by GWL. Accordingly, senior counsel and junior counsel issued their invoices for legal services to GWL; and, thereafter, GWL obtained reimbursement from Mr Larussa for the counsel fees as a disbursement. Ms Carr said that GWL engaged in legal practice in Western Australia by incurring the disbursements. Accordingly, the disbursements were also caught by s 102(5) and s 102(6).

The proper construction of s 102 of the LPA

Approach to the task of statutory construction

Ground 1 asserts that the primary judge misconstrued s 102 of the LPA. Mr Larussa said that, on its proper construction, s 102 did not extinguish the debt between him and GWL. Accordingly, under the indemnity principle, Mr Larussa was able to recover, as against Ms Carr, legal costs charged by and in fact paid to GWL so far as they were allowed on taxation as being reasonable and necessary.
It is convenient to consider the proper construction of s 102 before turning to consider the issues raised by ground 1.
The principles applicable to statutory construction are well established. For present purposes it is enough to refer to and adopt the summary provided in Mohammadi v Bethune.[45] The task of statutory construction involves attribution of meaning to statutory text. It begins and ends with the statutory text as a whole. The text must be considered in its context (referring to 'context' in its widest sense) and having proper regard to the purpose of the provision. The purpose of legislation must be derived objectively from the statutory text and not from any assumption about the desired reach or operation of the provision. The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute.
[45] Mohammadi v Bethune [2018] WASCA 98 [31] - [36].
A construction that would promote the purpose or object underlying the statutory provision is to be preferred to a construction that would not promote that purpose or object.[46]

The statutory text of s 102

[46] Interpretation Act 1984 (WA) s 18.

The text of s 102 is set out at [9] above. The following may be said as to its structure and language:
1.Subsection (1) creates an obligation whenever a corporation intends to engage in legal practice in Western Australia - the corporation must give the Board written notice, in the approved form (ie in a form approved by the Board),[47] before the corporation starts to so engage in legal practice.
2.The LPA contains an inclusive definition of the term 'engage in legal practice' (see LPA s 3). It includes 'practis[ing] law'. The breadth of the concept is evident from the definition of 'legal services' - this means work done, or business transacted, in the ordinary course of legal practice (see LPA s 3).
3.Failure to give the notice pursuant to s 102(1) is not itself a contravention of the LPA. In this respect, while nothing turns on it, s 102(4)'s reference to liability under s 102(1) is difficult to understand. However, if the corporation starts to engage in legal practice in Western Australia without having given the requisite notice under s 102(1) the corporation will be in default of s 102. The corporation will remain in default of s 102 until it gives the Board written notice, in the approved form, of its failure to comply with s 102(1) and the fact that it has started to engage in legal practice. See s 102(3).
4.Subsection (2) prohibits a corporation from engaging in legal practice in Western Australia while it is in default of s 102 (the concept of being 'in default of' s 102 being provided for in s 102(3) in the terms described in sub-par 3 above).
5.Accordingly, a corporation contravenes s 102(2) where (a) the corporation starts to engage in legal practice in Western Australia; but (b) before doing so the corporation did not give the Board written notice in accordance with s 102(1). The contravention is ongoing while the corporation continues to engage in legal practice without giving the Board written notice in accordance with s 102(3). The contravention is punishable by a fine of up to $25,000.
6.Section 102 provides for two further adverse consequences, in addition to the possible penalty, where a corporation does anything in contravention of s 102(2). Specifically:
(a)the corporation is not entitled to recover 'any amount' for 'anything' the corporation did in contravention of s 102(2) (s 102(5)); and
(b)where a person paid 'any amount' to or at the direction of the corporation for 'anything' the corporation did in contravention of s 102(2) the person may recover that amount, as a debt due to the person, from the corporation or a legal practitioner associate of the corporation (s 102(6)).
[47] LPA s 3.
Section 102(5) and s 102(6) are complementary. Section 102(5) is concerned with whether a defaulting corporation may recover any amount; s 102(6) is concerned with whether a defaulting corporation may retain any amount - an amount will not be retained if it may be recovered from the defaulting corporation. Read together, s 102(5) and s 102(6) prima facie evince a statutory intent that a corporation has no right to recover or retain any amount for anything done while engaging in legal practice in Western Australia in default of s 102.
Five other things should be observed about the statutory language in s 102(5) and s 102(6). First, the words 'any amount' in s 102(5) and s 102(6) are broad. They encompass the totality of what might otherwise have been recovered or retained. Second, consistently with the first point, the kind of activity that the amount is for is also described broadly - the provisions are concerned with 'anything the corporation did in contravention of' s 102. The 'anything' will necessarily be something that constitutes engaging in legal practice in Western Australia in circumstances where the defaulting corporation has not given notice in accordance with s 102(1) or s 102(3). Third, the word 'recover' in s 102(5) and s 102(6) is not defined. The ordinary and natural meaning of 'recover', in the context of those provisions, is to obtain an amount through a judgment in legal proceedings. Fourth, while s 102(5) uses prohibitory language (ie 'is not entitled'), s 105(6) uses the term 'may recover' - Mr Larussa focused on this difference to submit that s 105(6) was merely permissive. Fifth, the amounts that a person may recover under s 102(6) are not confined to amounts 'paid to' the corporation. The recoverable amounts include amounts paid by the person 'at the direction of' the corporation. Amounts paid 'at the direction of' the corporation would include, for example, amounts paid by the person to third parties retained by the corporation, in the course of the corporation's engagement in legal practice, to perform services for the person; for example, expert witnesses retained in connection with pending litigation.
By s 102(5), a corporation is not entitled to 'recover' any amount for anything done by the corporation in contravention of s 102(2). That necessarily means the corporation does not have a legal right to require payment of any amount for work or anything else done while the corporation engaged in legal practice in default of s 102. If the corporation does not have a legal right to require payment then it necessarily follows that the client does not have a legal liability to make payment.
By s 102(6), a person may 'recover' from a corporation or a legal practitioner associate of the corporation, as a debt due to the person, any amount the person paid to or at the direction of the corporation for anything done by the corporation in contravention of s 102(2). That necessarily means that the person has a legal right to require payment by the corporation or a legal practitioner associate of the corporation of any amount the person paid to or at the direction of the corporation for work or anything else done while the corporation engaged in legal practice in default of s 102. If the person has a legal right to require payment by the corporation or a legal practitioner associate of the corporation then it necessarily follows that the corporation and the legal practitioner associate of the corporation have a legal liability to make payment.
We do not accept Mr Larussa's submission that the 'may' in s 102(6) is permissive. In the context of s 102(6) 'may' is a word denoting empowerment. As Steward J recently observed, that is a common use of the word.[48] Accordingly, s 102(6) confers a right. True it is that, like many rights, the person conferred with the right to recover might choose whether or not he or she wishes to exercise the right. There is a discretion to that extent. But this does not diminish the role of s 102(6) in conferring a right to the benefit of any person who has paid any amount to or at the direction of a corporation for anything the corporation did in contravention of s 102.

The statutory purpose of s 102

[48] GLJ v The Trustees of the Roman Catholic Church for the Diocese of Lismore [2023] HCA 32 [95]. Steward J was in dissent in GLJ. However, the circumstance that Steward J was in dissent does not detract from the force of his Honour's observation.

Before turning to context something should be said about the statutory purpose of s 102.
Section 102 is located in pt 7 of the LPA dealing with incorporated legal practices and multi-disciplinary partnerships. An 'incorporated legal practice' under the LPA is a corporation that engages in legal practice in Western Australia whether or not it also provides services that are not legal services.[49] The purposes of pt 7 are specified in s 97:
The purposes of this Part are as follows:
(a)to regulate the provision of legal services by corporations in this jurisdiction; and
(b)to regulate the provision of legal services in this jurisdiction in conjunction with the provision of other services (whether by a corporation or persons acting in partnership with each other).
[49] LPA s 99(1).
Section 102 is a provision directed to the purpose identified in s 97(a). It is a statutory provision regulating the provision of legal services by incorporated legal practices in Western Australia. In respect of that purpose, a function of s 102 is to inform the Board of a corporation's intention to engage in legal practice before the corporation starts to do so. The notice contemplated by s 102(1) provides the Board with the means to consider any regulatory or compliance issues that arise in respect of a corporation intending to engage in legal practice as an incorporated legal practice.[50] In that way it can be seen that s 102 is directed to ensuring that the Board has a proper opportunity to regulate the corporation so far as the corporation intends to engage in legal practice in Western Australia.
[50] In this respect it should be noted that the notice under s 102(1) is to be accompanied by the corporation's constitution and documentary evidence of the directors and officers of the corporation: Legal Profession Regulations 2009 (WA) reg 21(1).
In short, a statutory purpose of s 102 of the LPA is to facilitate the regulation, by the Board, of corporations providing legal services in Western Australia as incorporated legal practices.
There are, in this respect, two readily identifiable objectives served by the statutory purpose of s 102 which are manifest more generally throughout the LPA. First, to protect the public interest in the proper administration of justice. Second, to protect consumers of legal services.[51] Section 102 serves those wider objectives of the LPA by facilitating the Board's regulation of corporations providing legal services in Western Australia as incorporated legal practices.
[51] See eg LPA s 11, s 20(a), s 401(a). Mr Larussa accepted that s 102 had an aim of protecting the consumers of legal services: Mr Larussa's submissions par 46 WAB 24 (and see generally pars 44 - 46 WAB 24). See also appeal ts 8 - 9.
Notification under s 102(1) also ensures that the Board is in a position to continue to regulate an incorporated legal practice while it engages in legal practice in Western Australia. There are various prohibitions and requirements that apply to an incorporated legal practice.[52] The Board is also conferred with a specific power to conduct a compliance audit in relation to an incorporated legal practice.[53] The performance of the Board's ongoing functions and duties in relation to the regulation of incorporated legal practices is dependent on compliance with s 102(1). Without notice in accordance with s 102(1) of the LPA the Board might not be aware that a corporation is engaging in legal practice in Western Australia.
[52] See eg LPA s 100(2) (an incorporated legal practice must not conduct a managed investment scheme); LPA s 105 (an incorporated legal practice must have a legal practitioner director - as to which see also s 106 - s 107); LPA s 109 (professional indemnity insurance obligations); LPA s 111 (disclosure obligations).
[53] LPA s 118.
Section 102(5) and s 102(6) further the statutory purpose of s 102 as previously identified. The provisions act in aid of s 102(1) (and, similarly, s 102(3)) by mandating significant adverse consequences for a corporation engaging in legal practice in contravention of s 102(2). The imposition of a burden - in the form of the statutory preclusion of a right to recover or retain any amount for anything done while engaging in legal practice in Western Australia in default of s 102 - is objectively likely to bring about compliant behaviour by corporations intending to start to engage in legal practice.

The statutory context relevant to s 102

Some matters of relevant context have already been referred to. Mr Larussa, in particular, relied on the textual differences between s 102(6) and s 287(5) while pointing to the textual similarities between s 102(2), s 102(5) and s 102(6), on the one hand, and s 12(2), s 12(6) and s 12(7), on the other. Little of substance is revealed by the similarities between s 12 and s 102. We do, however, acknowledge the textual differences between s 102(6) and s 287(5) - the latter imposes a positive obligation on a law practice to repay amounts received in respect of contingency fee arrangements rather than simply allowing the payer to recover from the law practice. Section 287(3) and s 287(4), dealing with certain void costs agreements and uplift fees, are to like effect to s 287(5).
In each case, however, where the law practice does not repay the amount required to be repaid, s 287(6) allows the person entitled to be repaid to recover the amount from the law practice as a debt due. Accordingly, while s 287(3) - s 287(5) introduce a positive obligation to repay, ultimately - in the event of non-payment - the legislature has introduced a like response for all of the various situations. The payer is conferred with a right to recover meaning that the non-Australian legal practitioner (in s 12(7)), the defaulting corporation (in s 102(6)) and the law practice (in s 287(6)) has no right to retain the relevant amount.
It might be that where a legal practitioner fails to comply with a repayment obligation under s 287(3) - s 287(5) he or she risks professional disciplinary consequences. However, so far as civil liability consequences arise as between the payer and the legal practitioner, the relevant rights and corresponding obligations are relevantly indistinguishable.
The LPA contains other provisions restricting requirements to pay legal costs or the right to maintain proceedings to recover legal costs. See, for example, s 268(1) - (2) dealing with the effect of failure to comply with costs disclosure obligations, s 289(1)'s general prohibition on commencing legal proceedings to recover legal costs until 30 days after giving a bill that complies with the LPA, and the like provisions in s 292(4) - (5) dealing with lump sum bills and requests for itemisation. Section 298(b) also contains a restriction on commencing proceedings to recover legal costs. In providing for a temporary suspension of recovery rights these provisions are qualitatively different from the regime in s 102. This, in our view, is because each is addressing a different legislative concern from that raised by s 102. These provisions are of little weight as context for the proper construction of s 102.
Other available context, as mentioned by the primary judge but not averted to by the parties on appeal, is s 448(2)(a) dealing with compensation orders by the State Administrative Tribunal or the Legal Profession Complaints Committee following complaint. One such available order is:
an order that the practitioner cannot recover or must repay the whole or a specified part of the amount charged to the aggrieved person by the practitioner in respect of specified legal services.
The suggested practical equivalence of an order that a practitioner cannot recover an amount charged (being, self-evidently, an amount not yet paid) and an order that a practitioner must repay an amount charged (being, again self-evidently, an amount previously paid) is of some, albeit limited, contextual significance in construing s 102. Unlike s 102, s 448(2)(a) differentiates between recovery and repayment. But s 448(2)(a) makes that distinction in catering for a different circumstance. In the context of a compensation order it would be nonsensical to provide that a person may recover an amount charged from a legal practitioner - being seized of the matter it may be expected that the Tribunal or the Committee would be in a position to order repayment rather than authorise proceedings to recover.

The proper construction of s 102

The matters of text, purpose and context relevant to the proper construction of s 102 have now been traversed sufficiently to turn to the constructional issue that arises in the appeal.
The main constructional issue is whether, as contended by ground 1, on its proper construction s 102 of the LPA did not extinguish any debt as between GWL and Mr Larussa. As so expressed, Mr Larussa's preferred construction has two elements. First, that s 102 did not preclude a debt arising as between Mr Larussa and GWL for the legal services provided by the latter to the former. Second, that the debt that arose was not brought to an end by operation of law. At the heart of Mr Larussa's argument in support of his preferred construction was the two-step contention that s 102(5) did no more than bar recovery and that s 102(6) was merely permissive.
For reasons already explained we do not accept that s 102(6) is merely permissive.
Unlike the cases relied on by Mr Larussa, as referred to at [47] above, s 102(5) does not stand alone - s 102 is a more complex statutory provision. Section 102 does not merely limit the defaulting corporation's right to recover. Section 102 goes further. Unlike the cases Mr Larussa relied on, s 102, by s 102(6), confers a right to recover in favour of the payer (who will generally be the client) against the defaulting corporation so far as payment was made for anything the corporation did in contravention of s 102(2). This results in the defaulting corporation being liable to repay such that it is not entitled to retain a payment received for legal services provided in contravention of s 102(2).

Accordingly, reading and construing s 102 as a whole, the effect of the provision is that a corporation has no legal right to recover or retain any amount for anything done while engaging in legal practice in Western Australia in default of s 102.
Nothing in the relevant context detracts from this construction of s 102. In that regard Mr Larussa's reliance on s 287(5) is misplaced. Non-compliance with s 287(5) ultimately results in a right of recovery under s 287(6). The legislature provided for the very same right of recovery as is provided by s 102(6). Section 287, read as a whole, is supportive of the construction of s 102 as set out in [84] above.
Nor, in our view, does Mr Larussa's resort to statutory purpose detract from the construction of s 102 as set out in [84] above. In focusing on the difficulty a client may experience in recovering against an incorporated legal practice upon its insolvency Mr Larussa points to an outlier. The argument mistakes the adverse consequences of the operation of a construction in one particular situation with whether the construction would promote the purpose or object underlying the statutory provision. Whether a construction is consistent with or promotes the purpose or object underlying a statutory provision must be evaluated with regard to the universe of possibilities - putting emphasis on the commonplace situation in which the provision will operate - rather than the exceptional case. That is particularly so where the suggested scenario relied on involves the insolvency of a counterparty. It is well understood that once the provisions of insolvency laws have been engaged and apply the policy those laws reflect may impact on generally applicable legislative regimes as well as private bargains.
The construction of s 102 as set out in [84] above promotes the statutory purpose of s 102. The preclusion of any right to recover or retain any amount for anything done while engaging in legal practice in Western Australia in default of s 102 is objectively likely to cause corporations to comply with the notice requirements under s 102(1) (and s 102(3)). By contrast, Mr Larussa's preferred construction does not promote that purpose or object. Contrary to what was said by senior counsel for Mr Larussa (see [50] above), Mr Larussa's preferred construction does benefit the defaulting corporation. A defaulting corporation may, under Mr Larussa's construction, be entitled to retain amounts received for legal services provided in contravention of s 102. That possibility is objectively likely to detract from the intended compulsive effect of s 102(6) in bringing about compliant behaviour with the giving of the requisite notice under s 102(1) (or s 102(3)).
For these reasons, properly construed, s 102 of the LPA has the effect that a corporation has no legal right to recover or retain any amount for anything done while engaging in legal practice in Western Australia in default of s 102. This, in substance, is the same construction of s 102 as that adopted by the primary judge.

Disposition - ground 1: the application of the indemnity principle to s 102

The proper construction of s 102 of the LPA is determinative of ground 1. The primary judge was not in error in his construction of s 102. Nor, as a corollary, was his Honour in error in holding that the application of the indemnity principle meant that Mr Larussa could not recover costs against Ms Carr in relation to costs for legal services provided by GWL (noting, in this respect, that there is a separate issue in ground 2 as to the recoverability of disbursements).
Section 102 does not fit neatly within either of the two categories of case that have been identified in the earlier authorities.
The critical point arising from the proper construction of s 102 of the LPA is that a corporation has no right to retain any amount for anything done while engaging in legal practice in Western Australia in default of s 102. It is the right, in favour of the solicitor, to retain amounts paid by the successful client to the solicitor that grounds the exception to the second category of case (see [35] - [41] above). The statutory preclusion of any right to retain any amount for anything done while engaging in legal practice in Western Australia in default of s 102 has consequences for the application of the indemnity principle. GWL's lack of right to retain the legal costs paid to it by Mr Larussa, due to the operation of s 102, means that for the purpose of the indemnity principle Mr Larussa did not relevantly have a liability to GWL such that he could recover costs against Ms Carr.
Ground 1 fails.

Disposition - ground 2: the position as to disbursements

Ground 2 requires separate consideration of whether Mr Larussa is able to recover, against Ms Carr, disbursements paid to GWL. This necessarily turns on whether the disbursements are caught by the operation of s 102 of the LPA.
We have already referred to the broad language of the relevant parts of s 102(5) and s 102(6). The disentitlement applies to 'any amount' (ie no distinction is drawn between costs for legal services and disbursements) for 'anything' that the corporation did in contravention of s 102(2). In this respect senior counsel for Mr Larussa accepted, with respect correctly, that the correct approach was to consider whether, in terms of s 102(5) and s 102(6), the disbursements were an amount for anything that GWL did in contravention of s 102(2) - relevantly whether the disbursement was an amount for a thing that the corporation did in engaging in legal practice in Western Australia.[54]
[54] Appeal ts 25.
In this respect the word 'for' is a word of connection. It is used in the sense of 'in consideration of' or 'as reimbursement in respect of'.
In dealing with the example of the disbursements for counsel fees, senior counsel for Mr Larussa contended that a corporation in default of s 102 did not relevantly engage in legal practice in incurring fees with counsel and paying counsel's fees. Senior counsel for Mr Larussa also contended that the work performed by counsel was not legal practice engaged in by GWL.[55]
[55] Appeal ts 25.
In written submissions Mr Larussa said that if it were otherwise a lay client engaging a barrister on a direct brief could be engaging in legal practice in Western Australia in contravention of s 12(2) of the LPA.
It may be accepted that the work performed by counsel is not legal practice engaged in by GWL. But that is not the relevant question. The correct approach is directed to the relevant amount - here the disbursement - and determination of the question of whether that amount as paid to GWL was for anything that the corporation did in contravention of s 102(2) (ie whether the amount was for a thing that GWL did in engaging in legal practice in Western Australia).
There is limited available evidence on how senior counsel and junior counsel were retained on behalf of Mr Larussa and paid. It is clear that GWL retained and briefed the counsel. Mr Larussa did not brief the senior counsel or junior counsel directly. From this it may be inferred that there was no contractual relationship between Mr Larussa and the counsel. It is not clear whether Mr Larussa put GWL into funds so that GWL could meet counsel fees. It might have been that GWL paid counsel fees itself from its own funds and then recouped the fees from Mr Larussa as a disbursement. Either way, however, GWL assumed the obligation to pay counsel fees. Putting aside the effect of s 102, Mr Larussa had a separate obligation - an obligation owed to GWL - to reimburse GWL for the expenses GWL incurred in respect of counsel.
We consider that Mr Larussa has not made out ground 2 so far as it is directed to the counsel fees for senior counsel and junior counsel retained by GWL on behalf of Mr Larussa.
The disbursement on account of counsel fees - the relevant 'amount' for the purpose of s 102 - was to put GWL in funds to pay or to reimburse GWL for its payment of counsel fees. It was an amount in consideration of, or as reimbursement in respect of, GWL retaining, incurring fees with and either having or having satisfied a liability to make payment to senior counsel and junior counsel. In our opinion, when done by an incorporated legal practice on behalf of a lay client, the retaining of counsel, incurring fees with counsel and seeking funds to pay or making payment to counsel, is a thing done in engaging in legal practice.
In this respect senior counsel for Mr Larussa accepted that a solicitor who retained a barrister, and briefed the barrister, was practising law[56] - by virtue of the s 3 inclusive definition it followed that the solicitor was thereby engaged in legal practice in retaining counsel. That concession is undoubtedly correct. It is not to the point that, under the LPA, a lay client may brief a barrister directly. In evaluating whether an act amounts to engaging in legal practice the same act may bear a different nature and character depending on the actor. A lay client directly briefing a barrister for himself or herself is plainly not engaged in legal practice. The position is different when a solicitor retains counsel on behalf of a lay client. The solicitor is not a mere conduit. The retainer of counsel by a solicitor on behalf of his or her lay client involves the application of legal knowledge, skill and expertise. Initially there is the selection of counsel. The solicitor has a duty to the lay client to retain counsel of competence with the skill and experience necessary to advise and represent the lay client in the field of legal practice in question. There must also be appropriate consideration of the terms on which counsel is retained including the specific matters the subject of the retainer. The circumstance that the solicitor has various costs disclosure obligations so far as he or she intends to retain a barrister on behalf of the lay client[57] confirms that the retainer of counsel by a solicitor on behalf of a lay client is a thing done in engaging in legal practice.
[56] Appeal ts 25 - 26.
[57] LPA s 261.
The solicitor has contractual and tortious duties to his or her lay client. He or she must act with reasonable skill, care and diligence. For example, the solicitor cannot blindly sub-contract to counsel the conduct and management of litigation on behalf of the lay client. The solicitor must exercise his or her independent judgment to bring about the efficient and effective conduct of the litigation on behalf of the lay client. He or she must actively consider, throughout the course of the retainer of counsel, what aspects of the litigation ought properly be conducted by counsel - and, in that respect, what counsel fees might properly and reasonably be incurred. The solicitor's responsibility to his or her lay client includes a duty to scrutinise invoices rendered by counsel. The solicitor should only seek funds to pay or make payment of counsel's fees to the extent that the solicitor is satisfied that the fees are properly and reasonably incurred and are of an amount that is proper and reasonable. In some cases it will be necessary for a solicitor to raise concerns he or she has with an invoice rendered by counsel with a view to negotiating a fair and reasonable fee in the interests of the lay client. In an extreme case it may be necessary for the solicitor to apply to a taxing officer for an assessment of counsel's costs.[58]
[58] As to which see LPA s 296.
Returning to s 102, the amount Mr Larussa paid to GWL for counsel fees was to put GWL in funds to pay or to reimburse GWL for its payment of counsel fees. The amount either enabled GWL to meet its liability to counsel or enabled GWL to recoup expenditure outlaid in meeting its liability to counsel. In either case the core reason for the payment was that GWL had incurred a liability to counsel insofar as GWL retained and instructed counsel to act on behalf of Mr Larussa in the litigation concerning Ms Carr. For the reasons we have explained the incurring of the liability to counsel was a thing that GWL did in contravention of s 102 - in incurring the liability to counsel GWL engaged in legal practice in Western Australia.
For these reasons ground 2 fails insofar as it is directed to Mr Larussa's payments to GWL on account of counsel fees.
Ground 2 was not directed solely to GWL's disbursements on account of counsel fees. Mention was also made of expert fees and more routine amounts such as videoconferencing centre fees, flights and accommodation. The bill of costs also mentions transcript costs and photocopying costs. While these disbursements are evident on the papers there was no development, either in written or oral submissions, as to why the disbursements other than counsel fees were not within the scope of the prohibition in s 102(2). Mr Larussa's argument was developed solely by reference to counsel fees. It was then submitted that the same logic applied to any other properly incurred disbursements.
It is inappropriate to examine the other disbursements. The order appealed against is the primary judge's order that:
[Mr Larussa] is hereby restrained from proceeding to have assessed by this court any cost or disbursement incurred or paid by [Mr Larussa] for anything done by [his] former solicitors [GWL] in contravention of s 102(2) of the Legal Profession Act 2008 (WA).
The order permits Mr Larussa to proceed with the assessment of his bill of costs where a disbursement is not for anything done in contravention of s 102(2). In other words, if, on the facts, the amount was not for a thing that constituted engaging in legal practice in Western Australia, the order does not prevent Mr Larussa proceeding with an assessment. Whether or not the various other disbursement amounts were for anything GWL did in contravention of s 102(2) (ie whether they were for a thing done that amounted to engaging in legal practice in Western Australia) will be fact specific. There was no examination of the underlying facts as to the various other disbursement amounts before the primary judge; the record does not disclose any relevant evidentiary materials whereby this court could

form its own view. Nor were such matters the subject of submissions before this court. In the circumstances it is not appropriate to deal with each of these items individually.

These reasons should not be understood as dealing with the individual disbursements other than counsel fees.
In determining the appeal it is enough to say that ground 2 does not, in principle, demonstrate any error with the order made by the primary judge. It cannot do so given the terms of the order made by the primary judge. Ground 2 fails.

Conclusion and orders

There should be an extension of time to appeal. However, the appeal must be dismissed. The parties should be heard on the costs of the appeal.

HALL JA:

I agree with Buss P and Vaughan JA, for the reasons they give, that ground 1 cannot succeed.
It might seem unjust that the respondent, as the losing party in the primary proceedings, will avoid liability for the appellant's costs due to a failure on the part of the appellant's lawyers to comply with a regulatory requirement. However, the respondent's liability depends on the indemnity principle and the appellant cannot recover costs that he is not obliged to pay (or that he has a right to recover from his lawyers). The legislature has determined that one of the consequences of non‑compliance is that the incorporated legal practice concerned will bear the burden of the costs it has incurred.
I have come to a different view in respect of ground 2.
Ground 2 is in the alternative and does not depend on the interpretation of s 102 of the LPA advanced in ground 1. In essence, ground 2 contends that s 102(2) of the LPA does not extinguish the liability of a client to pay a disbursement for counsel's fees claimed by a non‑compliant incorporated legal practice as such a claim does not fall within the prohibition on engaging in legal practice.

The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of a provision must be determined by reference to the language of the statute viewed as a whole. This may require consideration of the context, the general purpose and policy of the provision and its consistency and fairness.[59]
[59] See Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 [69] (McHugh, Gummow, Kirby & Hayne JJ); Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue(NT) [2009] HCA 41; (2009) 239 CLR 27 [47] (Hayne, Heydon, Crennan & Kiefel JJ).
The context includes the existing state of the law and the mischief to which the statute is directed. Inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which is reasonably open and more closely conforms to the legislative intent.[60]
[60] See CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384, 408 (Brennan CJ, Dawson, Toohey & Gummow JJ).
As already noted, the effect of s 102 is to ensure that a non‑compliant incorporated legal practice will not be entitled to payment for anything the corporation does in engaging in legal practice. The apparent purpose is to provide an incentive to incorporated legal practices to give the notification required by s 102(1), thereby ensuring that they can be monitored by the Legal Practice Board, as the relevant regulatory authority. This, in turn, aids in ensuring that the interests of consumers of legal services are protected.
The purpose of s 102 is served by depriving a non‑compliant incorporated legal practice of payment for legal work performed by that practice. It is to the performance of that work that the notice requirement in s 102(1) is directed. To deprive the practice of any payment for its legal work would be consistent with that purpose. It is more difficult to discern that the purpose is served by making a non‑compliant incorporated legal practice bear the burden of disbursements, in particular counsel's fees. The disincentive for non‑compliance would be expected to bear some relationship to the objective of the statutory provision. If the disincentive extends to disbursements, there would be an improbable asymmetry between the objective and the outcome.
To interpret the prohibition in s 102 as extending to disbursements would visit on a non‑compliant incorporated legal practice a burden that is unnecessary for (and disproportionate to) the achievement of the purpose of that section. That conclusion supports an interpretation that the prohibition is confined to legal work undertaken by the practice, if such an interpretation of the text is open.
The term 'engage in legal practice', as used in s 102 (and other parts of the LPA), is defined in s 3 of the LPA as meaning 'includes practise law'. Where the word 'includes' is used in a definition it is generally taken as being intended to enlarge the ordinary meaning of the word or phrase that is being defined.[61] That does not appear to be the case here, as the ordinary meaning of the term 'engage in legal practice' must include to practise law. In such a case a question arises as to whether the definition was intended to be exhaustive, notwithstanding the use of the word 'includes'. That question requires consideration of the LPA as a whole.[62]
[61] Sherritt Gordon Mines Ltd v Commissioner of Taxation of The Commonwealth of Australia [1977] VR 342; (1976) 10 ALR 441; Douglas & State of Western Australia v Tickner (1994) 49 FCR 507; (1994) 34 ALD 192; Gardner v R [2003] NSWCCA 199; (2003) 39 MVR 308; Owen v Menzies [2012] QCA 170; [2013] 2 Qd R 327; Retirement Care Australia (Hollywood) Pty Ltd v Commissioner for Consumer Protection [2013] WASC 219; Transport Accident Commission v Hogan [2013] VSCA 335; (2013) 41 VR 112.
[62] YZ Finance Co Pty Ltd v Cummings [1964] HCA 12; (1964) 109 CLR 395.

The term 'engage in legal practice' is used elsewhere in the LPA.[63] Subject to any express contrary intention, it should be assumed that the term bears a consistent meaning.[64] Further, where the same term has been used in previous legislation dealing with the same subject matter along the same lines, it is usually safe to assume that it is intended to have the same meaning.[65] Cases considering the meaning of the term, or its analogues, in the LPA or earlier statutes dealing with the same subject matter will be relevant.
[63] See, for example, s 12, s 13, s 17, s 34, s 35.
[64] Registrar of Titles (WA) vFranzon [1975] HCA 41; (1975) 132 CLR 611, 618.
[65] Lennon v Gibson & Howes Ltd[1919] AC 709; (1919) 26 CLR 285, 287; Ramaciotti v Federal Commissioner of Taxation[1920] HCA 70; (1920) 29 CLR 49, 53; SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362 [24]; Norrie v NSW Registrar of Births, Deaths and Marriages [2013] NSWCA 145; (2013) 84 NSWLR 697.
In s 12(2) of the LPA, the phrase 'engage in legal practice' is used in the context of a prohibition on a person engaging in legal practice unless the person is an Australian legal practitioner. Section 12(6) provides that a person is not entitled to recover any amount in respect of anything the person did in contravention of s 12(2). Section 12(7) provides that any amount paid in respect of anything done in contravention of s 12(2) can be recovered by the person who paid that amount as a debt due. In these respects, s 12 is analogous to s 102.
There have been a series of cases that have considered the prohibition in s 12 and its predecessors, and, in particular, what is meant by the phrase 'practise law'. That question has arisen where a person, not being a certificated lawyer, was alleged to have done something that falls within the prohibition on such persons practising law. The rationale for that prohibition is to ensure that legal work is carried out only by persons who have obtained a proper legal education, have appropriate qualifications, and who are subject to the disciplinary supervision of the courts in their practice of the law.[66]
[66] D'Alessandro & D'Angelo v Bouloudas (1994) 10 WAR 191, 207 (Malcolm CJ).
In Barristers' Board v Palm Management Pty Ltd,[67] the issue was whether the respondents had committed contempt pursuant to s 81 of the Legal Practitioner's Act 1893 (WA) by engaging in work in connection with the administration of law when they were not certificated legal practitioners. The work involved obtaining and acting on instructions to transfer a partnership business to a company as trustee for a family trust, setting up an accompanying superannuation scheme and preparing relevant documents for those purposes. Brinsden J considered the meaning of the phrase 'administration of law' as used in s 77 of the Legal Practitioner's Act 1893 (WA), which provided, inter alia, that no person other than a certificated practitioner shall engage in any work in connection with the administration of law. His Honour noted that consideration had been given to the meaning of the section by the Full Court in The Barristers' Board v Hawkins & Lenton Pty Ltd[68] but that no ratio could be discerned from the differing reasons given in that case.[69] Nonetheless, two members of the Court (Wickham and Wallace JJ) had said that mechanical or clerical work was excluded. In particular, Wickham J thought that the phrase (in context) was one of wide import and was limited only by the exclusion of mechanical or clerical work not requiring technical or professional skill to attempt it, nor the exercise of judgment in the doing of it.
[67] Barristers' Board v Palm Management Pty Ltd [1984] WAR 101 (Palm Management).
[68] The Barristers' Board v Hawkins & Lenton Pty Ltd (Unreported, WASC, Library No 2364 A-C, 22 June 1978).
[69] Palm Management (105).
Brinsden J went on to consider the history of statutory provisions relating to the prohibition and concluded that the term 'the administration of the law' was to be read as having the same meaning as 'the practice of law' or 'the practice of the law'. His Honour then said:[70]
What may be included in the practice of the law is I think well illustrated in the case of Florida Bar v Town (1965) 174 So (2d) 395, where the court applied the following definition as to the conduct which constituted the practice of law (at 396 - 7, quoting from State ex rel Florida Bar v Sperry (1962) 140 So (2d) 587 at 591):-
'It is generally understood that the performance of services in representing another before the courts is the practice of law. But the practice of law also includes the giving of legal advice and counsel to others as to their rights and obligations under the law and the preparation of legal instruments, including contracts, by which legal rights are either obtained, secured or given away, although such matters may not then or ever be the subject of proceedings in a court.
We think that in determining whether the giving of advice and counsel and the performance of services in legal matters for compensation constitute the practice of law it is safe to follow the rule that if the giving of such advice and performance of such services affect important rights of a person under the law, and if the reasonable protection of the rights and property of those advised and served requires that the persons giving such advice possess legal skill and a knowledge of the law greater than that possessed by the average citizen, then the giving of such advice and the performance of such services by one for another as a course of conduct constitutes the practice of law.'
[70] Palm Management (107).
Brinsden J went on to draw a distinction between work that was of a merely clerical nature and that which drew upon the skill and experience of a trained lawyer. It was only the latter that his Honour said attracted the prohibition on being undertaken by non‑lawyers. His Honour said that his view closely accorded with that expressed by Wickham J in Hawkins & Lenton.[71] His Honour then applied the test derived from Sperry in concluding that the work performed by the respondents in the case before him affected important rights under the law and that the advice and preparation of documents of the type in question required the possession of legal skill and knowledge of the law greater than that possessed by the average citizen.[72]
[71] Palm Management (107).
[72] Palm Management (108).
The test referred to in Palm Management has been adopted and applied in subsequent cases dealing with allegations that a person who is not a certificated legal practitioner has engaged in legal practice.[73]
[73] See The Barristers' Board v Marbellup Nominees Pty Ltd [1984] WAR 335; Attorney General v Quill Wills Ltd (1990) 3 WAR 500; The Legal Practice Board v Adams [2001] WASC 78; Legal Practice Board v Tilley [2006] WASC 73; Legal Practice Board v Computer Accounting and Tax Pty Ltd [2007] WASC 184; (2007) 35 WAR 59; Legal Practice Board v Giraudo [2010] WASC 4; Dean v Legal Practice Board [2015] WASC 260; Dean v Legal Practice Board [2016] WASCA 63 and Van der Feltz v Legal Practice Board [2017] WASC 2.
If the test suggested in Palm Management is applied to s 102, the question is whether a claim for a disbursement for counsel fees is an amount for anything the corporation did that affects important rights of a person under the law and requires legal skill and a knowledge of the law greater than that possessed by the average citizen. It is important in this regard to focus on the nature of the service involved in seeking a reimbursement.
Whilst barristers are usually briefed by solicitors, it is open in this State for a barrister to accept a brief directly from a client. Counsel is not obliged to accept a direct brief but they may do so if they wish. Thus, it cannot be said that the briefing of counsel is something that requires the qualifications or skill of a trained lawyer. Far less is any specialist skill required to provide the service of paying counsel and seeking reimbursement.
The role of a legal practice where counsel is engaged is to prepare a brief, attend any conferences and provide instructions. This, of course, is legal work that would fall within the definition of engaging in legal practice. But the work done by counsel can be distinguished from the work done by the practice. The work done by counsel briefed by an incorporated legal practice is legal work done by counsel and not by the legal practice. Briefed counsel are subject to regulation by the Board irrespective of whether the incorporated practice who briefs them has given the notice required by s 102(1).
A legal practice that instructs counsel on behalf of a client also incurs an obligation to pay counsel's fees, for which it can seek reimbursement from the client. Although the legal practice takes on professional obligations in briefing counsel, a claim for reimbursement of counsel's fees is not a claim for payment for legal work undertaken by the practice. The service provided is the payment of counsel's fees, effectively on behalf of the client. The payment of counsel's fees does not itself affect the rights of the client. No specialist legal skill or knowledge is required to pay counsel and seek reimbursement from the client.
I accept that an act may change its character depending on the identity of the actor and that a lawyer may well bring skill and experience to the choice of counsel. As I have mentioned, a lawyer will also undertake professional obligations in respect of counsel, such as the obligation to pay counsel's fees and to ensure that those fees are fair and reasonable. But those obligations do not transform the recovery of a disbursement into a service that requires the possession of legal skill and knowledge greater than that possessed by the average citizen.
It could be argued that the term 'engage in legal practice' is broad and not confined to legal work. Viewed in this way the term could encompass services that are incidental to legal work, such as the incurring of disbursements. Whilst such an interpretation is open it is not mandated. There is a constructional choice, and that choice should be informed by the purpose of the statutory provision in question.
I also accept that it would be artificial to compartmentalise the services afforded by a legal practice and ask whether each component was one requiring legal skill and experience or was merely clerical. Clearly, many services looked at in isolation would be merely clerical and yet be incidental to the legal work provided. However, a claim for a disbursement for counsel fees is plainly distinct from the other services provided by a legal practice. It is not something that is incidental to the legal work of the legal practice. Furthermore, and reflective of this distinction, a disbursement for counsel's fees is invariably treated as a separate item in any account rendered by the legal practice.
For those reasons, in my view, both the text and purpose of s 102 favour an interpretation that the prohibition contained in that section is confined to non‑compliant incorporated legal practices recovering fees for their own substantive legal work. A disbursement incurred for counsel's fees does not involve the practice of law, nor, by extension, is it a thing done in engaging in legal practice for the purposes of that section.
Accordingly, in this case, the appellant was obliged to reimburse his lawyers for counsel's fees (and cannot seek to recover that amount from GWL pursuant to s 102(6)). He is, therefore, entitled to recover those costs from the respondent on the indemnity principle.
For those reasons, in my view, ground 2 succeeds. The primary judge was in error to take the view that s 102 acted as a bar to recover any costs from the respondent. In my view, it only acted as a bar in respect of those costs that were incurred in the course of engaging in legal practice by the non‑compliant legal practice. It did not act as a bar to the recovery of disbursements, that is, reimbursement for counsel's fees. I would allow the appeal to that extent.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
WH
Research Associate to the Honourable President Buss
13 FEBRUARY 2024