Patakas v Bevan

[2016] NSWSC 1618

Supreme Court

New South Wales

Medium Neutral Citation:	Patakas v Bevan [2016] NSWSC 1618
Hearing dates:	29/09/2016 and 30/09/2016
Date of orders:	18 November 2016
Decision date:	18 November 2016
Jurisdiction:	Equity
Before:	McDougall J
Decision:	Interlocutory injunction to be continued. Parties to bring in draft orders.
Catchwords:	PRACTICE AND PROCEDURE – interlocutory injunction – application to restrain the defendant from continuing with costs assessment applications – where defendant claims to be owed a significant amount of money for work undertaken by the defendant on the instructions of the plaintiff – whether there is a serious question to be tried – whether the balance of convenience favours determination by a court or by the individual assessors   EVIDENCE – admissibility of evidence – whether evidence should be excluded as a “protected confidence” – alternatively, whether evidence was obtained illegally or improperly – whether non-publication order should be made to allow evidence to be received whilst protecting public interest in protection of confidences
Legislation Cited:	Competition and Consumer Act 2010 (Cth), Sch 2 The Australian Consumer Law Court Suppression and Non-publication Orders Act 2010 (NSW) Evidence Act 1995 (NSW Legal Profession Act 1987 (NSW) Legal Profession Act 2004 (NSW) Supreme Court Act 1970 (NSW) Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 Doyle v Hall Chadwick [2007] NSWCA 159 Coshott v Barry [2012] NSWSC 850
Category:	Procedural and other rulings
Parties:	Evangelos Patakas (Plaintiff) Christopher John Bevan (Defendant)
Representation:	Counsel: TGR Parker SC / S Tame NC Hutley SC / P Doyle Gray / J Zmood   Solicitors: Judd Commercial Lawyers (Plaintiff) WM Lawyers Pty Ltd (Defendant)
File Number(s):	2016/124927

Judgment

1. HIS HONOUR:   The defendant (the barrister) claims to be owed a great amount of money by the plaintiff (the solicitor) for costs for work undertaken by the barrister on the instructions of the solicitor. The barrister has made 15 applications for assessment of the costs that he claims. Those claims total in excess of $4.1 million for costs, and in excess of $1.7 million for interest.

2. The solicitor has commenced these proceedings, seeking injunctive relief directed to restraining the barrister from continuing with the assessment applications. He also seeks relief in the exercise of the Court’s supervisory jurisdiction, directed to stopping the assessors from proceeding with and completing their assessments. That relief is sought under ss 23 and 69 of the Supreme Court Act 1970 (NSW) and under the Court’s inherent jurisdiction. The solicitor seeks further relief, including damages and compensation.

3. I am concerned with the solicitor’s application for a continuation of an interlocutory injunction restraining the barrister from proceeding with the enforcement process, or enforcing the fruits of that process to the extent that the assessors have finished their assessments and issued certificates.

4. In the ordinary way, I would not have delayed for 7 weeks in delivering reasons on such an application. However, that delay has arisen because, following the conclusion of the hearing on 30 September 2016, I was absent from chambers for almost all of the three weeks immediately thereafter. I then held back from delivering reasons until the parties had completed a mediation.

5. Because there are limitation issues involved, I record that the solicitor has undertaken not to raise any limitation defence for the period of time during which the assessments have been or will be halted.

The issues

6. Before I state, in what is unfortunately an expansive way, the issues involved, I should note that because the bills in question go back to 2004, questions arise in part under the Legal Practitioners Act 1987 (NSW) (the 1987 Act) and in part under the Legal Profession Act 2004 (NSW) (the 2004 Act). For convenience, I will refer generally to the latter Act. To the extent that it is necessary to consider specifically the former Act, I will do so.

7. The parties did not prepare a statement of the real issues in dispute. The issues emerged only slowly, and without stark definition, from their written and oral submissions. Thus, rather than give a short “point by point” statement of the issues, I think it appropriate to give a descriptive and to some extent narrative statement of them.

8. This being an application for interlocutory injunctive relief (and relief of a like nature), the usual questions are raised:

1. are there serious questions to be tried, as to the solicitor’s claims for final relief?

2. where does the balance of convenience lie?

9. Although it is conventional to state and analyse those questions separately, they are inter-related. Gummow and Hayne JJ made this clear in Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at 84 [71], [72]:

… the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought.

The second of these matters, the reference to practical consequences, is illustrated by the particular considerations which arise where the grant or refusal of an interlocutory injunction in effect would dispose of the action finally in favour of whichever party succeeded on that application. …

10. As to the first issue, Mr Parker of Senior Counsel, who appeared with Ms Tame of Counsel for the solicitor, separated the claims for relief into three categories. The first category comprises claims for relief under the general law, being claims against the barrister personally. Mr Parker submitted that, on the evidence, the solicitor had shown a serious question to be tried on each of the following matters:

1. that, by reason of oral representations made by the barrister to the solicitor in connection with the various matters the subject of the barrister’s bills of costs, the barrister was estopped from pursuing his claims (more accurately, the great majority of them, in number and in value) because the underlying costs agreements were represented to be conditional: that is to say, agreements under which the barrister would be entitled to be paid only if the client succeeded and if money was recovered either on account of the client’s damages or on account of its costs. In all the cases in question, Mr Parker submitted, there had been no success and no recovery.

2. Alternatively, the relevant contracts were of themselves conditional. In some cases the condition was written, forming part of the contract. In others, it was oral. The oral term was said to arise in each case from the representations the subject of the estoppel claim.

3. In a number of cases the relevant claims for payment were statute-barred.

4. The solicitor had a claim for misleading or deceptive conduct, in breach of s 18 of the Australian Consumer Law, based on what were said to be misrepresentations made by the barrister to the costs assessors in various of the applications for assessment. They included misrepresentations as to the document or documents that constituted the underlying costs disclosure or costs agreement, the contents of those disclosures or agreements, and the identity and contents of the documents said to constitute the relevant bills of costs that had been served on the solicitor.

5. In some cases, the solicitor had a claim in fraud, where the barrister had gone further, and made representations to the assessors that were said to be false, and knowingly so. In those cases, Mr Parker submitted, there was at least an arguable case of fraud.

11. As to all but the third way in which this category of claims was put, Mr Parker submitted that success could ground injunctive relief against the barrister, and orders for damages or compensation. As to the third way in which this category was put, Mr Parker submitted that, if the limitation defences were made out, they could ground declaratory (and, I think he put, injunctive) relief.

12. Mr Hutley of Senior Counsel, who appeared with Mr Doyle Gray and Mr Zmood of Counsel for the barrister, appeared to accept that some sort of estoppel case was arguable (although weakly so), in the sense that it was capable of being pleaded. (I say “appeared to accept”, because Mr Hutley’s submissions on this point wavered between suggesting that it could not be said to be so hopeless as to be unarguable, and that it was so obviously hopeless that I should dismiss it.) Since any analysis of estoppel by conduct or representation requires detailed consideration of the evidence as to what was represented and how the relevant words or conduct acted on the representee, it seems to me that summary dismissal of the estoppel case is not something to be dealt with in an interlocutory hearing.

13. Mr Hutley appeared to accept, also, that it was arguable that an estoppel might lie against his client notwithstanding the statutory provisions to which I refer in the following paragraph.

14. As to the case in contract, Mr Hutley submitted that there was an obvious and complete answer, namely that:

1. by s 322 of the 2004 Act, costs agreements must be written or evidenced in writing;

2. by s 327(1) any contravening costs agreement “is void”; and

3. in any event, whether the case was put as one of contracts partly written and partly oral, or of contracts and collateral contracts, there were fundamental legal flaws.

15. As to the limitation defence, Mr Hutley submitted:

1. the question of when the relevant cause of action arose was not one capable of immediate answer, and was not so obviously one to be answered in favour of the solicitor that it seriously weakened his client’s claims to costs; and

2. in any event, in some cases at least, there was conduct (including by way of payment on account) that would amount to confirmation of the cause of action.

16. As to misleading or deceptive conduct, Mr Hutley submitted that there was no relevant conduct in trade or commerce, and in any event there was no conduct that was in the relevant sense misleading (because it could not be misleading to put forward one’s own version of a case, to a person authorised to decide it). The latter submission embraced also the alleged fraud.

17. Mr Hutley submitted, further, that there was no causal link (whether pleaded, or even suggested in the evidence) between the alleged conduct and the damage said to have been suffered. Mr Hutley submitted that the victim of the fraud had not been identified, nor had any reliance on the alleged fraudulent conduct been pleaded. He submitted that in those circumstances there could be no cause of action.

18. More generally, Mr Hutley submitted that all these matters could and should be dealt with by the assessors. I shall return to this in setting out the competing arguments on the question of balance of convenience.

19. The second category of claims invoked by Mr Parker, relating to the Court’s supervisory jurisdiction, sought to address the problem that the grant of injunctive relief against the barrister would of itself bring to a halt the assessors’ performance of their functions under the various applications for assessment. I should however note that the assessors have been joined as parties, and that the interlocutory regime presently in force prevents them from completing their assessments. (Some assessments are complete. In those cases, the interlocutory regime prevents enforcement of the assessors’ certificates.)

20. Mr Parker submitted that it was an abuse of process to proceed with assessments where, for one reason or another, the entitlement was impeached (in one or other of the ways just summarised). Mr Hutley submitted that this suggested basis for relief was “irredeemably hopeless” because it assumed the correctness of the conclusion for which the solicitor contended in each case.

21. Mr Parker submitted that there was a jurisdictional issue in respect of all the bills the subject of the assessment application. That issue was said to arise from s 352 of the 2004 Act. Subsection (4), so far as it is relevant, provides that an application for assessment may not be made unless at least 30 days have passed since the bill was given to the person said to be liable. Mr Parker submitted that in every case, the bills the subject of the applications for assessment (the assessment bills) differed, sometimes materially, from those originally provided to the solicitor (the original bills). The assessment bills were given to the solicitor less than 30 days before the applications for assessment were made.

22. Mr Hutley submitted that the applications in each case were for assessment of costs, not for assessment of bills, and that the relevant costs had been the subject of claims in the original bills, which were provided well and truly outside the 30 day period. He submitted that, read correctly, the applications sought assessment of the costs claimed in those original bills. To the extent that the actual costs claimed differed in the assessment bills (from those claimed in the original bills), Mr Hutley submitted that it was open to the assessors to assess those parts of the costs in the assessment bills that did in fact coincide with the original bills.

23. The third category of claims identified by Mr Parker comprised additional claims raising (he submitted) an entitlement to declaratory relief. One of those related to the barrister’s claims for interest, in circumstances where the disclosure required by s 321(3) of the 2004 Act had not (Mr Parker submitted) been made. That issue is common to more than 60 (of the total of 99) bills submitted for assessment, which in turn cover 11 (of the total of 15) costs assessments applications that have been made.

24. I turn to the second general question: the balance of convenience. That requires consideration of:

1. the impact on the solicitor if the assessments are permitted to proceed to finality;

2. conversely, the impact on the barrister if the assessments are halted;

3. the adequacy of damages as a remedy if the assessments are halted; and

4. the capacity of the solicitor to make good any undertaking as to damages that he gives.

25. Mr Hutley submitted that there was an overarching issue going to the balance of convenience. He referred to the legislative scheme for assessment of the amount of legal costs claimed where there is a dispute. Mr Hutley submitted that assessors were fully capable of dealing with all the various objections that the solicitor raised (including as to estoppel, contract, and the like) and, to the extent necessary, assessing what (if any) costs were payable. Mr Hutley submitted that this statutory process should be allowed to run to its conclusion. He noted that until the assessments were completed, his client could not enforce his claim to fees in any other way (for example, by cross-claim in these proceedings). That is correct, but it is a consequence of the barrister’s decision to seek assessment rather than to sue (see s 331 of the 2004 Act).

26. Mr Parker submitted that the issues in question, being factual and dependent on oral evidence and on assessment of credibility, were inherently unsuited to resolution through the process of assessment. He submitted that the assessors could not receive and make findings on oral evidence. Further, he submitted, where there was a real dispute (for example, as to entitlement – the existence or terms of a retainer being an obvious example), it would be appropriate for the assessors to decline to continue with the assessment. Mr Parker cited Hodgson JA (with whom Campbell JA, and on this issue at least Mason P, agreed) in Doyle v Hall Chadwick [2007] NSWCA 159 at [61] and McCallum J in Coshott v Barry [2012] NSWSC 850 at [55].

Ruling on an objection to evidence

27. As has been seen, it is the solicitor’s case that the barrister made repeated oral representations to the effect that he would accept instructions on a “non-recourse”, or conditional, or “spec”, basis, in almost all of the matters under consideration. To prove that, the solicitor sought to give evidence by affidavit of the particular conversations. On behalf of the barrister, objection was taken to that evidence, on the basis that the solicitor was giving evidence of “protected confidences” within s 126A of the Evidence Act 1995 (NSW), so that the Court should exclude the evidence pursuant to s 126B. Alternatively, it was put, the evidence was obtained illegally or improperly, and should be excluded pursuant to s 138 of the Evidence Act.

28. To prevent the two days allocated for hearing becoming bogged down in an extended debate over the admissibility of evidence, I decided to admit the evidence on the basis that I would make an order under s 7 of the Court Suppression and Non-publication Orders Act 2010 (NSW) in respect of many of the paragraphs of the solicitor’s affidavit to which this objection was taken. The order did not extend to all those paragraphs. That was because the objections were far too widely expressed, and in many cases related to paragraphs that could not possibly be construed as hinting at the subject of, let alone revealing, any “protected confidence”. I said that I would give my reasons for making those orders when I gave reasons on the application for interlocutory relief. The parties accepted that this course was appropriate.

29. I start by setting out ss 126A, 126B and 138 of the Evidence Act;

126A Definitions

(1)    In this Division:

harm includes actual physical bodily harm, financial loss, stress or

shock, damage to reputation or emotional or psychological harm (such

as shame, humiliation and fear).

protected confidence means a communication made by a person in confidence to another person (in this Division called the confidant):

(a)    in the course of a relationship in which the confidant was acting in a professional capacity, and

(b)    when the confidant was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law or can be inferred from the nature of the relationship between the person and the confidant.

protected confider means a person who made a protected confidence.

protected identity information means information about, or enabling a person to ascertain, the identity of the person who made a protected confidence.

(2)    For the purposes of this Division, a communication may be made in confidence even if it is made in the presence of a third party if the third party’s presence is necessary to facilitate communication

126B Exclusion of evidence of protected confidences

(1)    The court may direct that evidence not be adduced in a proceeding if the court finds that adducing it would disclose:

(a)   a protected confidence, or

(b)    the contents of a document recording a protected confidence, or

(c)    protected identity information.

(2)    The court may give such a direction:

(a)    on its own initiative, or

(b)    on the application of the protected confider or confidant concerned (whether or not either is a party).

(3)    The court must give such a direction if it is satisfied that:

(a)    it is likely that harm would or might be caused (whether directly or indirectly) to a protected confider if the evidence is adduced, and

(b)    the nature and extent of the harm outweighs the desirability of the evidence being given.

(4)    Without limiting the matters that the court may take into account for the purposes of this section, it is to take into account the following matters:

(a)    the probative value of the evidence in the proceeding,

(b)    the importance of the evidence in the proceeding,

(c)    the nature and gravity of the relevant offence, cause of action or defence and the nature of the subject matter of the proceeding,

(d)    the availability of any other evidence concerning the matters to which the protected confidence or protected identity information relates,

(e)    the likely effect of adducing evidence of the protected confidence or protected identity information, including the likelihood of harm, and the nature and extent of harm that would be caused to the protected confider,

(f)    the means (including any ancillary orders that may be made under section 126E) available to the court to limit the harm or extent of the harm that is likely to be caused if evidence of the protected confidence or the protected identity information is disclosed,

(g)    if the proceeding is a criminal proceeding—whether the party seeking to adduce evidence of the protected confidence or protected identity information is a defendant or the prosecutor,

(h)    whether the substance of the protected confidence or the protected identity information has already been disclosed by the protected confider or any other person,

(i)    the public interest in preserving the confidentiality of protected confidences,

(j)    the public interest in preserving the confidentiality of protected identity information.

(5)    The court must state its reasons for giving or refusing to give a direction under this section.

…

138    Exclusion of improperly or illegally obtained evidence

(1)    Evidence that was obtained:

(a)    improperly or in contravention of an Australian law, or

(b)    in consequence of an impropriety or of a contravention of an Australian law,

is not to be admitted unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in the way in which the evidence was obtained.

(2)    Without limiting subsection (1), evidence of an admission that was made during or in consequence of questioning, and evidence obtained in consequence of the admission, is taken to have been obtained improperly if the person conducting the questioning:

(a)    did, or omitted to do, an act in the course of the questioning even though he or she knew or ought reasonably to have known that the act or omission was likely to impair substantially the ability of the person being questioned to respond rationally to the questioning, or

(b)    made a false statement in the course of the questioning even though he or she knew or ought reasonably to have known that the statement was false and that making the false statement was likely to cause the person who was being questioned to make an admission.

(3)    Without limiting the matters that the court may take into account under subsection (1), it is to take into account:

(a)    the probative value of the evidence, and

(b)    the importance of the evidence in the proceeding, and

(c)    the nature of the relevant offence, cause of action or defence and the nature of the subject-matter of the proceeding, and

(d)    the gravity of the impropriety or contravention, and

(e)    whether the impropriety or contravention was deliberate or reckless, and

(f)    whether the impropriety or contravention was contrary to or inconsistent with a right of a person recognised by the International Covenant on Civil and Political Rights, and

(g)    whether any other proceeding (whether or not in a court) has been or is likely to be taken in relation to the impropriety or contravention, and

(h)    the difficulty (if any) of obtaining the evidence without impropriety or contravention of an Australian law.

30. Having regard to the orders that I made, and the undesirability of circumventing them inadvertently by giving too much detail in these reasons, I shall describe only in the broadest of terms the content of the paragraphs to which those orders apply. In substance (and of course with individual variations) the solicitor said that in those conversations they discussed the status of the particular matters, the client’s financial position (or what the client had told the solicitor about the client’s financial position), and in some cases the client’s state of health. The solicitor said that by reason of those matters, the client was (or had said that it was) unable to continue to fund the litigation. In those circumstances, the solicitor said, the barrister (sometimes expressing a view as to prospects, which the solicitor quite properly did not set out), said that he would undertake the work on a contingency basis.

31. The words used to describe the contingency basis varied from time to time. Sometimes, according to the solicitor, the barrister said that he would “act” on a “spec basis”. Sometimes the barrister said that he would “act on a direct retainer”. In many cases, the solicitor said, the barrister spelled out the “spec basis”: he would be paid only if and to the extent that the client was paid.

32. Mr Parker submitted that there was no evidence of “harm”, and that the likelihood of harm (as defined) was an essential prerequisite before evidence could be excluded under s 126B. The second part of that submission is correct, in the sense that it appears from subs (3) that unless it is likely harm would or might be caused, the balancing exercise for which that subsection calls does not need to be carried out.

33. In at least some of the conversations the subject of this objection, the reasons given why the client could not afford to pay (or to continue to pay) reflected adversely on the client’s financial capacity at the time. Obviously enough, financial incapacity lay at the heart of all the alleged representations on which the solicitor relies. However, the evidence was, if I may put it this way, more detailed and compelling in some cases than in others. In other cases, the reasons covered in some detail the client’s health and medical condition.

34. In those circumstances, it seemed to me, revelation of the material could very well cause damage to reputation, for the people in respect of whom the communications were made. Revelation of the medical details could well cause emotional or psychological harm. (In one case, the importance of those matters could be discounted, because the client in question has died.)

35. It seemed to me (and still does) that to undertake a detailed line by line assessment of each of the very many paragraphs that were the subject of the objection, to assess the degree of “shock value” of the revelations and the kinds of harm that might flow, was unwarranted. On balance, however, I thought that there was a basis for excluding the evidence under s 126B.

36. Turning to s 138, the way in which the barrister’s objection was put was that the solicitor was bound by specific obligations of confidentiality, and that his breach of them was a very serious matter, amounting to unsatisfactory professional conduct and, perhaps, professional misconduct. For those reasons, the barrister submitted, the evidence had been “obtained” by improper means and indeed in contravention of an Australian Law.

37. The evidence in question was directly relevant to a fundamental issue in the case: namely, whether the barrister made the representations in question (which might be called generically the “non-recourse representations”) so as to found the estoppel case or, alternatively, so as to introduce what might be called a “non-recourse term” into each contract of retainer. Thus, the evidence is vital to the solicitor’s case.

38. In each case, under s 126B or (if applicable) s 138, the balancing exercise would favour reception of the evidence. To reject it (or not to permit it to be adduced) would deprive the solicitor of a vital (and, it may be, the strongest) part of his case.

39. However, to receive the evidence (or to permit it to be adduced) could give rise to the very risk of harm that, in particular, s 126B is intended to prevent.

40. Turning to the Court Suppression and Non-Publication Orders Act, the grounds on which an order may be made are set out in s 8:

8    Grounds for making an order

(1)    A court may make a suppression order or non-publication order on one or more of the following grounds:

(a)    the order is necessary to prevent prejudice to the proper administration of justice,

(b)    the order is necessary to prevent prejudice to the interests of the Commonwealth or a State or Territory in relation to national or international security,

(c)    the order is necessary to protect the safety of any person,

(d)    the order is necessary to avoid causing undue distress or embarrassment to a party to or witness in criminal proceedings involving an offence of a sexual nature (including an act of indecency),

(e)    it is otherwise necessary in the public interest for the order to be made and that public interest significantly outweighs the public interest in open justice.

(2)    A suppression order or non-publication order must specify the ground or grounds on which the order is made.

41. It is I think well recognised that there is a very strong public interest in the maintenance of confidence in communications that, clearly enough, would be categorised as confidential. A client’s communication of its parlous financial situation to its solicitor would be something, in the ordinary way, that the client would expect to be kept confidential. Equally, the solicitor would expect it to be kept confidential. The same may be said as to communication of a client’s medical details.

42. The public interest that sustains legal professional privilege as a substantive right seems to me to underpin also communications of the kind in question, even if they are not within s 118 or s 119 of the Evidence Act (so as to attract that privilege). It is of the utmost importance that clients should be able to communicate fully and accurately to their solicitors matters that are relevant to the solicitors’ continuing to act. If clients become aware that such communications are to be bruited abroad, there is a very real risk that they will be more cautious in what they communicate. There is a consequent risk that solicitors’ ability to act in the best interests of their clients will be cut down.

43. Thus, in my view, there is a very real public interest in protection of such confidential communications. In those circumstances, I concluded, the public interest in protection of the confidences outweighs the public interest in the open administration of justice.

44. In reaching that conclusion I took into account that the basic nature of the communications is not in doubt, nor is their relevant effect: the barrister’s representation (according to the solicitor) that the barrister would act, or continue to act, on a non-recourse basis. It is that representation that lies at the heart of the solicitor’s claims based on estoppel and contract. Undoubtedly, the public interest in the open administration of justice would support the proposition that members of the public should know the essence of what was represented. But it does not seem to me to be important that the public should know why it was represented; to know what were the circumstances that caused the barrister to take the approach that he did.

45. It was for those reasons that, upon making the orders under s 7 of the Courts Suppression and Non-publication Orders Act, I admitted the evidence that was the subject of the objections (to the extent that, in my view, the objections were otherwise sustainable).

A brief survey of the evidence

46. The parties put an absurd amount of material before the Court, on what was an interlocutory application. There were two folders of affidavits: one for the solicitor, one for the barrister. The solicitor’s principal affidavit, sworn 1 July 2016, comprised (without annexures or exhibits) some 258 paragraphs extending over 74 pages. The barrister’s affidavits were less lengthy. That reflected not so much a desire for economy in the running of the interlocutory application, as the barrister’s contention (not unreasonably advanced) that to respond to the detail of the solicitor’s pages and pages of evidence of the conversations in which the representations relied upon were said to have been made would result in the revelation of protected confidences. Thus, mercifully, the barrister contented himself with simple denials of the relevant parts of those conversations.

47. The documents exhibited to the affidavits or otherwise tendered comprised some 16 lever arch folders, most of them containing many hundreds of pages. Although, for the most part, Counsel focused their submissions on parts only of those documents, an issue that arose at the heel of the hunt, in Mr Parker’s submissions in reply, invited me to undertake a detailed analysis of the solicitor’s responses to the barrister’s applications for assessment.

48. The core of the solicitor’s evidentiary case on estoppel and contract is contained in the very many paragraphs in which he deposes to conversations that he had with the barrister in which, according to the solicitor, the non-recourse representations were made. There was no application made to cross-examine the solicitor (and it is unlikely that I would have acceded to any such application). Thus, Mr Hutley accepted, my ability to assess the strength of the solicitor’s estoppel and contract case was necessarily limited. Mr Hutley did however refer to extrinsic material that, he submitted, showed that it was hopeless, or incoherent, or unsustainable.

49. Mr Hutley pointed to the fact that each of the barrister’s costs disclosures or offers to enter into costs agreements (depending on whether the 1987 Act or the 2004 Act applied at the relevant time) was directed to the solicitor, and an offer to enter into a contract with the solicitor under which the solicitor would be liable for the barrister’s costs. The solicitor said that he took no steps to document the barrister’s non-recourse representations, because, having worked with the barrister over many years, he trusted him.

50. Mr Hutley submitted that it was inconceivable that the solicitor would not have written to the barrister on some at least of the very many occasions involved, confirming the non-recourse arrangements. That was particularly so, Mr Hutley submitted, where the barrister had been retained originally on a paying basis, and the retainer is now said to have become conditional by reason of a change in the client’s circumstances.

51. Further, Mr Hutley pointed out, s 176 of the 1987 Act and s 310 of the 2004 Act between them required at all material times that the solicitor was required to disclose to the client certain details in relation to the barrister’s costs and billing arrangements. I set out those sections:

176      Obligation to disclose basis of costs to instructing practitioner

(1)     A barrister or solicitor who is retained on behalf of a client by another barrister or solicitor must disclose to that other barrister or solicitor in accordance with this Division the basis of the costs of legal services to be provided to the client by the barrister or solicitor.

(2)     The following matters are to be disclosed to the other barrister or solicitor:

(a)     the amount of the costs, if known,

(b)     if the amount of the costs is not known, the basis of calculating the costs,

(c)     the billing arrangements,

(d)     any other matter required to be disclosed by the regulations.

…

310    Disclosure if another law practice is to be retained

(1)    If a law practice intends to retain another law practice on behalf of the client, the first law practice must disclose to the client the details specified in section 309 (1) (a), (c) and (d) in relation to the other law practice, in addition to any information required to be disclosed to the client under section 309.

(2)    A law practice retained or to be retained on behalf of a client by another law practice is not required to make disclosure to the client under section 309, but must disclose to the other law practice the information necessary for the other law practice to comply with subsection (1).

(3)    This section does not apply if the first law practice ceases to act for the client in the matter when the other law practice is retained.

52. Mr Hutley submitted that it was extraordinary that the solicitor had not put on any evidence of compliance with those requirements. Mr Hutley submitted that if the solicitor had complied with those requirements, it would have been easy for him to produce the relevant correspondence: and that his failure to do so, on such a wholesale basis, suggested that there was nothing to disclose.

53. In this context, Mr Hutley drew attention to para 27 of the solicitor’s principal affidavit, in which the solicitor set out his “general practice when briefing” the barrister. As part of that practice, the solicitor said:

My usual practice was when I received [the barrister’s] costs agreement I would forward it to the client and then speak to the client about it.

54. Further, the solicitor said:

Where [the barrister] changed his fee rates or changed the basis of his retainer to a contingency basis my practice was to speak with the client to discuss those changes.

55. It is scarcely necessary to observe that these practices would not have resulted in or produced compliance with whichever of s 176 or 310 was applicable at the relevant time.

56. Further, Mr Hutley submitted, the solicitor’s evidence of the purpose that he understood the barrister’s disclosures and offers to have served made absolutely no sense. That purpose is set out at para 248 of the solicitor’s principal affidavit:

248.   Based on my conversations with [the barrister] from time to time, my understanding of the purpose of [the barrister] issuing formal cost agreements was so that:

(a)   [the barrister] complied with the Legal Profession Act 2004, so that if we succeeded in a matter and obtained cost orders we would have written cost agreements to provide in support of any application for costs if the clients went into liquidation or against another party; and

(b)   [the barrister’s] rates of charge were recorded for the purpose of cost assessment and so [the barrister] could charge interest on his fees in any proof of debt put into a bankrupt estate or company in liquation.

57. Mr Hutley submitted, correctly, that for the barrister to comply with his obligations under the 2004 Act, it would have been necessary for him to set out in writing the actual agreement: that is to say (on the solicitor’s case), including the non-recourse arrangements. Further, Mr Hutley submitted (and again correctly), if the purpose were to enable the barrister to charge interest and recover from a trustee in bankruptcy or a liquidator, there was every reason for the nature of the contingency to be spelled out. Fundamentally, Mr Hutley submitted, if the contingency were not spelled out, the trustee or liquidator would not know whether, according to the terms of the fee agreement, the fees had become payable.

58. Mr Parker focused his submissions on three “highlights”, relating to claims for fees made by the barrister in three matters. In one matter, where the barrister is claiming assessment of his fees on the basis that they are payable by the solicitor, the barrister had earlier claimed against the estate of the client, who was both bankrupt and dead. The proof of debt asserted that the bankrupt had been liable to the barrister for Counsel’s fees in excess of $470,000, and for interest in excess of $95,000.

59. After some toing and froing between the barrister and the trustee, the trustee asked the barrister to “confirm whether you were engaged by the Bankrupt and that the debt is payable by the Bankrupt rather than solely the responsibility of the instructing solicitor”.

60. The barrister’s response (8 April 2015 – 8 months or so before he served the draft applications for assessment on the solicitor, and 9 months or so before he lodged them) responded:

The arrangement was that I gave fee disclosures to [the solicitor] and [the client], took my instructions from [the solicitor], as instructing solicitor, but [the client] was responsible for the payment of my fees at the end of the case when he got access to his shareholding in [the company] and was able to sell the shares. That explains why the fees rendered bear interest at the statutory rate under the LP Act 1987. [The client] was unable to secure [the solicitor] for the payment of my fees by a payment into [the solicitor’s] trust account or by securing an asset, as [the client’s] only asset of any value was his shareholding in [the company], and that was effectively frozen due to the pending proceedings concerning them. Had my fees been owing by [the solicitor] then I would have sued him for them and recovered them long before now. The delay in my doing anything to recover the fees is that, since [the client’s] death, there has been no one to claim against until recently, when the administrators were appointed, but they were unable to act due to the disputes about the shares and whether they had any estate assets to deal with, so there was no feasible way to make a claim until you were appointed a year ago. Hence my first proof of debt was to you about a year ago (including the costs agreements).

61. Mr Parker submitted, understandably, that the only available reading of this email was that the barrister had conceded that his fees indeed were not owing by the solicitor. Mr Hutley was forced to concede that the email had not been “well worded”.

62. The barrister did not deal with this matter in his affidavit evidence. I accept, as Mr Hutley submitted, that the circumstances in which the relevant material was produced (on subpoena) and tendered gave the barrister no opportunity to do so.

63. More fundamentally, Mr Hutley submitted, on the common ground between the solicitor and the barrister, the key sentence could not be correct, and must have been mistaken. Mr Hutley pointed out that on any view of the pleaded case (and of the fee agreements to which it referred), the only obligation to pay the barrister’s fees was one undertaken by the solicitor. The solicitor’s case did not plead, nor did the solicitor prove, any agreement between the barrister and the client. (There may be limited exceptions in the case of three or four written costs agreements that on their face were expressed to be conditional, but nothing turns on them for present purposes.)

64. Thus, Mr Hutley submitted, the probative force of this particular “highlight” was much diminished.

65. Mr Parker referred to a conditional costs agreement that the barrister had offered to the solicitor in connection with this matter. That is found under cover of a letter of 26 September 2013. Although the letter suggests that the costs agreement was proffered only in respect of an advice on merits that had been sought, the agreement itself extends beyond advice to “pursuing to their final conclusion on behalf of the [client]” the various matters in question. The draft agreement states that payment of costs is conditional on judgment in favour of the client or his estate, including the making of costs orders and the recovery of those costs from the other side.

66. The barrister claimed $15,000 in costs pursuant to that document for work done on or after its date.

67. That agreement (or offer to enter into an agreement) was not included in the material provided to the assessor. It is not in doubt that the stipulated conditions have not been met. The assessor was not informed of those conditions, nor of their non-satisfaction.

68. The barrister’s affidavit, to the extent that it deals with this matter, does not explain why it was that he withheld from the assessor the conditional costs agreement that had been propounded.

69. The second “highlight” relates to costs claimed by the barrister against the solicitor (and the subject of one of his applications for assessment) that had originally been the subject of a suit by the barrister against a director of the client. The solicitor in fact acted for the barrister in that suit (brought in the District Court). There is a dispute between the barrister and the solicitor as to who was responsible for the drafting of the statement of claim. Although I do not propose to make findings of fact, I have to say that there is considerable support for the proposition that the solicitor provided the “top and tail” of the document and the barrister provided the draft of the pleading (see for example the barrister’s emails to the solicitor of 29 and 31 January 2015).

70. A week or so before these things happened, the barrister wrote to the person – the director of the client – who would become the defendant. The email enclosed “my personal assistant’s summary of what you personally owe me for Counsel’s fees”. The barrister stated that the solicitor “has copies of the fee notes to support this summary”.

71. The email further stated:

[The solicitor] is owed his fees by [the client] in the tax matter without any guarantee by you as he came into the matter after the receivership ended and so you gave him no guarantee of payment of fees by [the client]. [emphasis in original].

72. Against that background, the statement of claim pleaded, among other things, the following:

8.   In pursuance of the receivers’ tax appeal conditions, particulars of which were given by the defendant to the plaintiff at the time of his retainer, the defendant promised to become and remain personally liable for the payment of Counsel’s fees due to the plaintiff under the tax appeal retainer, as well as agreeing to pay the Counsel’s fees due to the plaintiff under the XXXXX XXXX proceedings retainer.

…

10.   The plaintiff entered into various written agreements with the defendant’s solicitors, acting as agent for the defendant and not as principals, for the payment of the plaintiff’s professional costs as Counsel incurred pursuant to the tax appeal retainer and the XXXXX XXXX proceedings retainer (Counsel’s fees) as follows:

…

12.   In consequence of the plaintiff’s due performance of the tax appeal and XXXXX XXXX proceedings retainers, and in accordance with the plaintiff’s costs agreements, the plaintiff issued to the defendant, either directly or care of his solicitors, tax invoices for Counsel’s fees incurred in the due performance of the tax appeal and XXXXX X proceedings retainers, in the following amounts:

73. The barrister’s explanation is that he took a guarantee from the individual (who became the defendant) for the client’s fees, and that it was on this guarantee that he sued the defendant. That is why, Mr Hutley submitted, the defendant was personally liable for the fees; but his liability was as guarantor, not as client with whom a costs agreement had been made.

74. Further, Mr Hutley submitted, it was correct to say that the barrister had made agreements with the solicitor (and the solicitor’s predecessors) in the way alleged in para 10, because that related to the guarantee and not to any liability of the defendant as client.

75. Mr Hutley’s submission did not deal with a letter dated 20 July 2009 from the barrister to the director of the client. In that letter, the barrister said (among other things):

I am responding to your letter directly in view of the fact that my retainer in this matter is a retainer from you personally rather from the solicitors. You will recall that the original solicitors you retained in this matter [XXX], refused to retain me because the applicant companies (XXX and XXX) were unable to pay my fees so you retained me personally and that retainer has remained in place since 2005 despite the change of solicitors.

I enclose a copy of my letter to [the solicitor] dated 12 May 2009 in which I estimated my fees to conclude the tax appeal for XXX and XXX XXX at $66,000 plus GST (total $72,600). That was the figure my fees were to be secured for rather than the part-payment of $25,000 (or 40%) made with your letter. [The solicitor] informed me that a copy of this letter had been sent to you. I was also informed that you had agreed to be personally responsible for the payment of those fees before the appeal was concluded. That assurance has not been met. I was very disappointed to receive your part-payment of 40% of the agreed fee.

This in yet another instance of an arrangement made with you for the payment of my fees not being honoured. Kindly let me know, before the end of this month, whether you intend fulfilling that assurance. The balance of the agreed fee to complete the tax appeal is $47,600.

…

76. Mr Parker did not hesitate to characterise this particular claim, and the previous one to which I have referred, as involving fraud. Further, and as to the matter with which I am presently concerned, Mr Parker submitted that the barrister had a lot more explaining to do than he had done already. Undoubtedly, that latter submission is correct.

77. I do accept that in each case there is a strong basis for thinking that the whole detail of the costs arrangements or agreements has not been set out in the written disclosures (or agreements) that have been produced. I am not satisfied that there is (as Mr Parker put it) a strongly arguable case of fraud. Equally, however, I am not satisfied that the various statements in various documents to which I have referred have been explained in any adequate way despite the barrister’s two attempts (so far) to do so.

78. I accept of course that the evidentiary landscape may well change, and that the unfortunate judge who hears this case in due course may well come to a different view, on the basis of all the material then put before him or her.

79. I turn to the third of Mr Parker’s “highlights”. That refers to a matter where the barrister submitted a number of costs disclosures, some prepared to reflect a paying basis and others prepared to reflect a contingency basis. The material starts with a costs agreement sent by the barrister to the solicitor on 17 October 2011. That agreement provided for costs to be charged at specified hourly and daily rates, and contained an estimate of the likely total costs. It provided for acceptance in writing or alternatively acceptance by conduct: continuing to give instructions.

80. Two days later, the disclosure was revised (the fee rates were lowered) and re-sent “on the basis that my fees will be paid within 7 days of being rendered”. The barrister specified that if they were not so paid “then the higher rate of fees specified in the earlier costs letter … will apply”.

81. The next document is an undated form of conditional costs agreement, apparently signed by the barrister on 19 October 2011 but not (on the evidence before me) accompanied by any letter or other document. It is expressed to be a “conditional costs agreement”, and specifies a higher rate again than the first disclosure (of 17 October 2011). It provides for costs to be payable “conditional on the proceeding being determined in favour of the client as regards the substantive relief sought with or without a costs order in its favour”. It provides, further, for “a premium of 25% as an uplift fee within the meaning of s 324 of” the 2004 Act.

82. The barrister rendered a bill of costs to the solicitor on 3 November 2011. It appears to claim costs at the lower rate (that is to say, the “payable within seven days” rate specified in the revised disclosure of 19 October 2011).

83. Then, on about 15 December 2011, the barrister sent a “revised fee note” to the solicitor. It claimed fees charged at the rate specified in the conditional disclosure (including the 25% uplift). For reasons that are not clear, the solicitor did not receive this document for eight days: on 23 December 2011, according to a date stamp.

84. That document was sent under cover of a “with compliments” slip. On that slip, in the barrister’s handwriting, were the words:

Revised fee note to reflect this matter going to “spec” status to include normal rate and 25% contingency premium.

85. The costs claimed were for the same work, performed on the same days, identified in the earlier bill. However, the amounts charged reflected the rates (with 25% uplift) set out in the offer of a conditional costs agreement.

86. As Mr Parker submitted, the application for assessment did not refer to the conditional costs agreement. It referred to the draft agreement proffered on 17 October 2011, and claimed the rates set out in that so-called agreement. It referred to “errors in the rates charged in original tax invoices” and said that they had been “corrected”:

In the course of preparing this bill of costs the costs applicant has discovered errors in the rates charged in the tax invoices having regards [sic] to the rates agreed upon in the costs agreement. The rates charged in this bill of costs are at the agreed rates and, accordingly, this bill of costs claims less in costs than the tax invoices originally claimed in the first instance.

87. The costs agreement that is attached is the one dated 17 October 2011. The bills that are attached are those dated 15 December 2011, claiming at the “spec” rate including uplift. There is no disclosure of the offer to enter into a conditional costs agreement on which those rates were based.

88. Mr Hutley submitted that this was all consistent with an honest mistake, and noted that Mr Parker had said that he would refrain from alleging fraud. I should note that Mr Parker’s statement in this regard was qualified “yet”.

89. The barrister’s affidavits do not proffer any explanation of this suggested “honest mistake”. In any event, Mr Hutley submitted, the assessor could decide the applicable rate.

The estoppel case

90. The solicitor’s case is that in all the relevant matters, the barrister represented that he would accept (or thereafter accept) instructions on a contingency basis. The solicitor says that he relied on those representations, by continuing to instruct the barrister. The solicitor says that he will suffer detriment if the barrister is permitted to resile from those representations.

91. The key factual issues are, therefore:

1. what (if anything) did the barrister represent?

2. Did the solicitor rely on any representations found to have been made?

92. Overall, my conclusion on this material is that in two instances – the first and the third of Mr Parker’s highlights – there appear to be grounds for real suspicions about the barrister’s conduct. However, it does not follow that one can generalise from those two matters to the remaining retainers that are said to have been made, or to have become, non-recourse in nature.

93. As to the second highlight, I am not so certain that the facts as they are presently known can bear the complexion that Mr Parker put upon them. But as I have said, that is very much a conclusion on the limited material before me, and in the absence of any cross-examination.

94. There is, I think, a more comprehensive difficulty that the case for the solicitor does not confront. It is clear that the barrister was from time to time prepared to enter into (or to offer to enter into) conditional costs agreements. It is clear that, from time to time, he was prepared to demonstrate that in writing, in the form of the costs agreements that he propounded. Why is it that, in relation to all the matters, in respect of which the solicitor says the non-recourse representations were made, the barrister did not confirm them by propounding a revised costs disclosure or costs agreement (as the case may be)? There is no obvious answer to this question.

95. In all the circumstances, accepting both the nature of the material before me and my limited opportunity (bearing in mind what I have said at [4] above) to consider it, I do not regard the barrister’s estoppel case as being factually strong. But it is not so weak as to be unarguable. On the contrary, there is much smoke, and there may yet be a major fire.

96. As against what I have just said, there is the delay – quite extraordinary, in some cases – in the barrister’s seeking to enforce his asserted right to payment of costs. That delay is unexplained. It is very difficult to understand why someone who claimed to be owed so much money for work done would let the underlying bills lie for lengthy periods of time before seeking to enforce payment of the costs comprised in them. The barrister’s evidence offers no explanation of this delay.

97. I accept that unanswered or unexplained curiosities or suspicions do not of themselves prove the contrary. Further, if the reason for the delay is that the costs agreements really were conditional and the conditions have not been satisfied, one must ask why it is that the barrister chose to enforce payment only when he did. However, coupled with the inconsistencies to which I have referred, I remain of the view that there is on the facts an arguable case as to estoppel.

98. The questions to which I have referred will, no doubt, be ventilated at a final hearing. Of their nature, they are not questions that I can resolve on the basis of the limited material before me.

The claims based on misleading or deceptive conduct or fraud

99. In my view, the claims based on misleading or deceptive conduct, and fraud, are weak at best. There is no pleading of the causal significance of the matters complained of. As Mr Hutley submitted, someone who makes a claim known to be groundless, and supports it by submissions or other material known to be spurious, might incur a liability to pay damages representing the costs of responding to the claim. But it is a long way from there to a conclusion that the procedure that has been initiated by that hypothetically groundless claim based on hypothetically spurious material should be restrained from going forward.

100. Having said that, I accept Mr Parker’s submission to the effect that there appear to be (he submitted, “there are”) some matters of apparent concern in the ways that some at least of the applications have been put and promoted. I have adverted to this at [92] above, and shall return to it when dealing with the balance of convenience; in particular, Mr Hutley’s submissions summarised at [25] above.

101. Mr Hutley submitted that, in any event, this aspect of the solicitor’s case was in essence no different to the case of a party advancing a doubtful claim before a court or other tribunal. I am not sure that this analogy can be taken too far. There is a very significant difference between, on the one hand, advancing a claim that is fraught with difficulty but not capable of being categorised as groundless, and, on the other, advancing a claim that is known to be false at its root, or unsustainable as to a key component.

102. Mr Parker submitted that these bases of claims should not be rejected out of hand, on the basis that the pleading might be defective or imperfect as to causation. I agree with that point. However, in considering whether to continue the interlocutory injunctions that have been granted, I am required to consider the case that has been pleaded and sought to be proved, not some other case that might be pleaded and, perhaps, proved.

103. There are other difficulties with the misleading or deceptive conduct case. One of those is that it is not immediately obvious why the relevant activity was, as s 18 requires, undertaken “in trade or commerce”. That is another reason for thinking that this claim is weak.

104. It does not follow that, as Mr Hutley appeared to urge, I should strike out the claims based on misleading or deceptive conduct and fraud. That is so particularly if the case will have to go to trial in any event. The present significance of what I have said is that, those claims being in my view weak, they add nothing to the strength of the solicitor’s claim for a continuation of the interlocutory injunctive relief that has been granted.

The claims based on contract

105. Mr Hutley submitted, with considerable force and equal justification, that the claims based on contract were riddled with problems. The first problem, as he submitted, is that the pleaded case makes no sense. The second problem, and again as Mr Hutley submitted, is that it is hard (he submitted, impossible) to see how a sustainable claim in contract could be pleaded.

106. The solicitor’s contract case appears to veer between a case that there were contracts partly written and partly oral, and a case that there were written contracts (or offers in writing accepted by conduct) made in conjunction with and in consideration of collateral contracts.

107. If the case is that there are contracts in writing (or evidenced in writing, in circumstances where the acceptance was said to have been by conduct) with additional oral terms – that is to say, contracts partly written and partly oral – the immediate problem is that the oral terms appear to contradict the written terms. Mr Parker’s submissions did not really grapple with this difficulty.

108. Alternatively, if the case is that there are written contracts (or written offers accepted by conduct) accompanied by collateral contracts, the immediate problem is that the terms of the alleged collateral contracts are flatly inconsistent with the terms of the written contracts.

109. It may be that some ingenious pleading solution could be found to these difficulties. I am not sure. It may be that the facts could be analysed through the lens of contract and variation. Again, I am not sure.

105. If the contract case were the only basis on which the solicitor put his claim for relief, I would strike it out as being, at least as pleaded, hopeless. But since I have concluded, for other reasons, that the interlocutory injunction should be continued, with a view to there being a prompt final hearing, I conclude, reluctantly and very much without wanting to be thought that there is an arguable contract case, that the solicitor should be given an opportunity – a final opportunity – to plead this aspect of his case.

Are the claims statute-barred?

111. No one suggested that I should decide this point. A decision on it would turn on a number of considerations, and on a detailed mass of factual evidence. Mr Hutley’s submission was that limitation issues may be raised before and decided by the assessors. He submitted that this question is peculiarly suited to consideration by the assessors, because it will require consideration of the various bills that were rendered, the times at which they were rendered, other factual material (including matters said to go to confirmation of the causes of action) and provisions of the applicable statute: the 1987 Act or the 2004 Act, as the case may be.

112. I accept, as Mr Parker submitted, that the assessors’ decisions on the issue would not have any effect by way of estoppel. That could well lead, as Mr Parker submitted, to inconsistent outcomes on indistinguishable facts.

113. Mr Parker submitted, that there were other reasons why it was desirable to have the limitation issue decided once, by a judge, rather than individually, by assessors. First, he submitted, it would not be difficult for the parties to put together a suite of documents intended to provide the factual ground for the limitation question in the various circumstances under consideration.

114. Whether or not the parties could cooperate even to that extent is something on which I would not venture to express an opinion. One would think that where the parties are practitioners of this Court, each conscious of his obligation under s 56 and following of the Civil Procedure Act2005 (NSW), there should be no difficulty in preparing an agreed bundle of documents that would illustrate the various ways in which the limitation issue might arise. However, in the course of the first day of the hearing, I offered the parties an opportunity for an early hearing (within the first two weeks of October 2016) of separate questions that did not appear to involve any contested issue of fact.

115. The suggested separate questions related to the limitation point; the jurisdiction point (see at [132] and following below); and the interest point. On reflection, and for the reasons that I give when considering it at [121] and following below, the interest point may not be susceptible of separate determination on agreed facts. The other points, I thought, were. For reasons that were never explained, the parties did not take up the offer.

116. Returning to the limitation point: the question of which Act applies may be of some significance. The parties’ submissions did not really explore this point. Since on any view it is significant in relation to the interest point, I shall return to it when discussing that point.

117. In principle, however, I think that Mr Parker is correct. It would be more efficient to have an authoritative decision (subject to appeal, of course) on this point, in its various manifestations, given by a judge of this Court who has had the opportunity of considering all the material in context. If, contrary to my present understanding, oral evidence should prove to be relevant, the judge can hear that evidence (and an assessor is not empowered to do so). If that oral evidence raises questions of credibility, then that is something proper to be decided by a judge, and something that an assessor cannot deal with.

118. Mr Hutley submitted that there were some cases where actions taken by the solicitor amounted to a confirmation of the cause of action. Accepting that this may be so, it reinforces my view that the matter is more appropriate to be determined by a judge than by an assessor. It would require identification of the relevant material, and the assessment of that material to see whether it is capable of amounting to confirmation of the cause of action. Again, in my view, it is more efficient for that to be undertaken once only (although, no doubt, in respect of many bills of costs) rather than on multiple occasions by multiple assessors.

119. In circumstances where the limitation point is said to be pervasive, I think that considerations of efficiency suggest that it ought be heard once only, by a judge, rather than several times over, by assessors. I take into account the array of review and appellate mechanisms available from decisions of assessors, which may be contrasted with what for most cases is a single level of appeal from the decision of a judge of this court.

The claims for prerogative relief

120. I have to say that I do not understand how categorising the claims for relief against the assessors as prerogative relief, under ss 23 or 69 of the Supreme Court Act (or both), adds anything of present relevance. Whether or not that relief is likely to be granted depends on an assessment of the strength of the case overall and the questions of balance of convenience.

The claims for interest

121. Interest is claimed in all matters. Whether there is an entitlement to interest depends on the provisions of the relevant Act: the 1987 Act or the 2004 Act. It depends, further, on the extent to which the barrister complied with the requirements of the relevant Act, so as to be entitled to interest on outstanding costs.

122. The assessments appear to proceed on the basis that, as to interest, the relevant regime is that provided by the 2004 Act. However, on examination, this basis does not appear to be correct. The transition provisions contained in Schedule 9 to the 2004 Act provide by cl 18(2) that Part 3.2 of the Act (the part that deals with costs disclosure and assessment):

[D]oes not apply in respect of a law practice that is retained by another law practice on behalf of a client on or after the commencement day in relation to a matter in which the other law practice was retained by the client before that day, and in that case Part 11 of the [1987] Act continues to apply.

123. The date of commencement was 1 October 2005. There is no definition of “matter”.

124. Thus (contrary to the impression given in some of the applications for assessment), there is a factual question to be decided before the applicable legal regime – the 1987 Act or the 2004 Act – can be identified. That requires identification of each “matter”, and identification of the date when (in terms applicable to this dispute) the solicitor was first retained by the client.

125. Once the applicable legal regime is identified, there is another series of factual issues, going to the barrister’s compliance with the requirements of that regime. It is clear that, in this respect at least, there will be a significant factual conflict.

126. Mr Parker referred to submissions and other material put by or on behalf of the barrister to assessors in relation to the interest issue. He did not hesitate to characterise some of those submissions as misleading. Indeed, he submitted, some of them were false, and at least potentially fraudulent.

127. There is no point to be served by going to the particular assessments and particular pieces of information that were the subject of those submissions. As I have said more than once, I am not in a position to decide whether or not the serious allegations made by Mr Parker can be sustained. However, I should record that, on and to the extent of the material to which I was taken, those submissions do not appear to have been made recklessly or without foundation (nor would one expect them to have been so made, by someone of Mr Parker’s eminence and ability).

128. Mr Parker took the course of going to the detail of the communications from the barrister or his legal representatives to Assessor Hutley, who was dealing with the first and third of Mr Parker’s “highlight” matters (being those identified at, respectively, [58] to [64] and [79] to [89] above). I do accept that there is material in those communications that, unexplained (and of course, with the very important caveat that there may be other material bearing on the question that I have not seen), could be seen as attempts to mislead the assessor.

129. More generally, the material to which Mr Parker took me does suggest, very strongly, that the barrister’s legal representatives were putting a great deal of pressure on the assessor to disregard the objections made on behalf of and points raised by the solicitor, and to proceed with the assessment. That material did not hesitate to stigmatise the solicitor’s responses as groundless and timewasting. I should record that, on the face of it, that correspondence was ill-advised, ill-drafted, intemperate, and inappropriate to have been put before someone in the position of a costs assessor. The job that assessors have to do is difficult enough, in many cases, without their being harassed in the way that Assessor Hutley appears to have been harassed (and that other assessors also appear to have been harassed) by representations made on behalf of the barrister.

130. In my view, there are real questions as to the barrister’s entitlement to interest. They depend at least on the questions of fact that I have identified above, including as to the barrister’s compliance with whatever were the applicable legal requirements. It is enough to say that, on the material that was put before me, there appear to be real questions to be resolved as to whether the barrister’s disclosures and bills of costs did in fact comply with the applicable legal requirements in some cases at least; specifically, those cases where the 2004 Act was applicable.

131. Conversely, I do not regard it as appropriate, or an efficient use of resources, for the interest question to be decided individually by assessors on the basis of limited material, without oral evidence, and a fortiori without the opportunity to resolve possible questions of credit relating to oral evidence.

The jurisdictional issue

132. This issue may be identified by reference to s 352 of the 2004 Act. I set it out:

352    Application for costs assessment by law practice giving bill

(1)   A law practice that has given a bill may apply to the Manager, Costs Assessment for an assessment of the whole or any part of the legal costs to which the bill relates.

(2)    If any legal costs have been paid without a bill, the law practice may nevertheless apply for a costs assessment.

(3)    An application for a costs assessment may be made even if the legal costs have been wholly or partly paid.

(4)    An application may not be made under this section unless at least 30 days have passed since:

(a)    the bill was given or the request for payment was made, or

(b)    the costs were paid if neither a bill was given nor a request was made, or

(c)    an application has been made under this Division by another person in respect of the legal costs.

133. The applications for assessment that were made were in a common form. They stated (of course, with variations as to the date) that:

1. “the costs which are the subject of this application were included in bills of costs dated” (and the dates were given) “copies of which are enclosed”. They stated, further, that those bills had been given to the solicitor, on dates that corresponded to the dates that they bore, “by ordinary post”.

2. Next, they stated, those bills had been “given at least 30 days prior to the making of this application”.

3. They identified the costs agreements and costs disclosures that were said to be relevant.

134. In most cases at least, the so-called bills of costs that were attached to the applications were not copies of the bills that were actually sent at the dates alleged. They were in fact (on the barrister’s case) copies, or more accurately re-creations, brought into existence in December 2015, for the purpose of making the various assessment applications.

135. It appears to be common ground (and if it is not, it is certainly the solicitor’s case, supported by his affidavit) that:

1. the bills of costs in the actual forms attached to the various assessment applications were not served on him until 23 December 2015, when he was given copies of the draft assessment applications; and

2. the assessment applications were lodged on 21 January 2016.

136. On that basis, Mr Parker submitted, the 30 day period prescribed by s 352(4) had not elapsed. Mr Parker submitted that in those circumstances, the assessors had no jurisdiction to assess the costs claimed.

137. Mr Hutley submitted that s 352(1) applied to assessment of costs, not to assessment of bills. Thus, he submitted, it was sufficient that a bill of costs had been served in respect of those costs, even if the actual copies attached to the costs application differed from the bills served.

138. Further, Mr Hutley submitted, the costs applications on their proper construction made it plain that the costs of which assessment were sought were those set out in the identified bills, not those set out in the copies identified as attached to the applications.

139. As I understand it, Mr Hutley invited the Court to decide this point on the interlocutory application. I should say at once that I would only do so if the answer were clear; and in my view it is not. Because in my view it is not clear, and bearing in mind the time limitations to which I referred earlier, I do not propose to decide it.

140. The first thing to note is that in my view it is by no means clear that, on their proper construction, the applications refer to the costs as originally claimed rather than to the costs referred to in the bills that are attached. Mr Hutley’s submission may prove to be correct; but it is not self-evident to the point that no other construction is available.

141. Next, I note, it is by no means self-evident that when s 352(4) refers to the requirement for at least 30 days to elapse between the giving of the bill and the making of the application, this refers to the historic bill rather than to the bill that is identified in the costs application. Again, the point may prove to be correct; but I do not think that the alternative construction, for which Mr Parker argued, is untenable.

142. Although what I have said is enough to indicate that this matter is one to be determined once, by a judge, rather than several times, by assessors, there is one more thing that I should note. Mr Parker submitted that in one case at least (involving Assessor Hamwood, and a matter, or group of matters, known as “the Quality Group”), the barrister had put material before the assessor that was materially incorrect and misleading.

143. For the reasons I have stated several times, I am not in a position to decide this point, and do not propose to do so. It is enough that I say that in my view, the material to which Mr Parker pointed in submissions, if unexplained and uncontroverted (or unilluminated) by other evidence, could bear the complexion that he sought to put upon it.

Balance of convenience

144. The competing submissions are simple. Mr Parker submits that if the assessments are allowed to proceed:

1. the solicitor would be forced to undertake a vast amount of work (it was estimated on his behalf, this could be up to 600 hours) in dealing with the individual bills of costs on a “line by line” basis;

2. it would be inefficient in the extreme to do that when there were underlying issues, which struck at the heart of entitlement in very many cases, that could and should be decided once only in this Court; and

3. it would be extremely disadvantageous to the solicitor were the barrister to be permitted to enforce determinations, in circumstances where (it might ultimately appear) the solicitor’s basal objections were sound.

145. On the other hand, Mr Parker submitted, if the assessors were restrained from proceeding until there was a final decision of a judge:

1. the only loss to the barrister would be the loss of use of money, an interest loss, in circumstances where the barrister had already suffered a very considerable loss (assuming, against the solicitor’s case, that the barrister was entitled to recover anything) because of his own delay in seeking assessment;

2. the further delay in having these proceedings heard and determined would not add a substantial interest cost to the barrister’s disadvantage; and

3. to the extent that the barrister did suffer a loss by way of loss of use of money, he was protected by the solicitor’s undertaking as to damages.

146. For the barrister, Mr Hutley submitted that:

1. the regime of assessment was the appropriate statutory way of proceeding;

2. all the issues that the solicitor raised could be raised before and dealt with by the assessors;

3. there was no reason to halt the work of the assessors, with a consequent loss of efficiency and increase in costs should they be required to return to their assessments once (as Mr Hutley submitted would be the case) the solicitor’s challenges failed; and

4. there were in any event real doubts as to the worth of the solicitor’s undertaking as to damages.

147. I start with the undertakings given by the solicitor. He gave to the Court:

1. the usual undertaking as to damages; and

2. a specific undertaking, not to raise a limitation defence in respect of any bill of costs in respect of the time elapsing between the date when interlocutory relief was granted (10 June 2016) and, if it happens, the date when his claim for final relief was decided adversely to him.

148. There was, as was submitted for the solicitor, some evidence that he owned real property (or interests in real property) in respect of which he had “equity” in excess of $1 million. As against that, it is correct to say, as Mr Hutley submitted, that the solicitor has not attempted to put before the Court a full picture of all his assets and all his liabilities, nor of all his income and all the calls upon it. Thus, as Mr Hutley submitted, the Court had no way of assessing to what extent the so-called equity would be available to satisfy any claim that the barrister might make on the undertaking as to damages.

149. There were other matters raised in the barrister’s evidence, including apparent failures on the part of the solicitor to lodge tax returns, the fact that the returns when lodged showed nothing by way of income, and the fact that the ATO had levied a fine on him. The solicitor gave some explanation of those matters, and I do not think that they add anything either way. Nor do I think that the other matters raised by the barrister, as to the solicitor’s residence and his choice of motor vehicle, go anywhere.

150. If it were to be assumed that it would take 12 months from now for the solicitor’s case to be heard and decided, and that the case failed wholly, the effect would be that the barrister would have been kept out of his money for about 16 months in all (from the time when the interlocutory injunction was granted). There would be a hypothetical interest loss of approximately $300,000. On the evidence (more accurately, the lack of evidence), there must be a question as to the solicitor’s ability to meet that liability pursuant to his undertaking as to damages. But that is not the whole of the story.

151. If the common issues of entitlement are dealt with in Court rather than by the individual assessors, it is at least likely (I would have said, very likely) that:

1. the actual processes of assessment of costs would be much expedited;

2. the processes of review and, ultimately appeal to the District Court for which the 2004 Act applies, assuming that they were engaged (I think, a proper assumption), would also be dealt with more quickly; and

3. in consequence, the overall delay, assuming, against the solicitor, that he fails entirely and the assessments proceed, is not likely to be the full total of 16 months.

152. Put compendiously, if one were to undertake a critical path analysis, it is in my view very likely that the overall delay would be substantially less.

153. Next, the worst-case analysis assumes that the barrister will recover every dollar that he claims for costs and for interest. That is a somewhat unlikely assumption.

154. In all the circumstances, I conclude that in the real world, the protection offered by the solicitor’s undertakings is adequate.

155. I turn to the other points raised. Mr Hutley submitted that the solicitor had had every opportunity to put submissions, and that he had availed himself of that opportunity by putting voluminous and detailed submissions. With the greatest of respect to Mr Hutley, that submission demonstrates a very real misapprehension as to the effect of the evidence. Mr Parker undertook an exhaustive (and exhausting) analysis in reply to make good that proposition.

156. In brief, Mr Parker’s analysis showed, correctly, that:

1. the solicitor put before the various assessors his basic and common objections as to the assessments proceeding at all;

2. in response, the barrister’s legal representatives bombarded the assessors with correspondence of the kind that I have described at [129] above; and

3. contrary to Mr Hutley’s submissions, the solicitor’s submissions to the assessors were directed to the basic or preliminary points, not to the task of detailed, line by line, analysis of and commentary upon the costs claimed.

157. I do conclude that if there were to be no grant of injunctive relief, an enormous burden would be placed upon the solicitor to respond in detail to the applications for assessment. I accept that he has not attempted to do so to this point, purely because (understandably), his submissions have been directed to the preliminary issues and the volume of material that has been generated deals with those issues and not with the detail of the costs claimed.

158. It may very well be that in due course the solicitor will have to undertake that process of line by line analysis. But in my view, for the reasons I have given, it will be far preferable for that to be undertaken once the various issues of entitlement have been dealt with by a judge of this Court.

159. It follows from what I have said that I do not agree with Mr Hutley’s submission that the assessors can and should deal with all the issues that have been raised. In this regard, I note that some of the assessors (including Assessor Hutley) have in fact declined to do so.

Other issues

160. There were very many other issues raised in the course of submissions. Because I have come to the view that the entitlement issues should be dealt with in this Court, and that the interlocutory regime presently in place should continue to permit that to be done (of course, subject to review should it prove that the solicitor is dragging his heels in preparing his case for hearing), it is neither necessary nor desirable that I deal with those other issues.

161. In my view, the appropriate way to dispose of this interlocutory application is to permit the existing interlocutory injunctive regime to continue, on the basis that the solicitor moves to have the hearing of the case expedited, and undertakes to the Court to do all that he can to prepare for the earliest possible hearing that can be given. The parties should prepare short minutes of order to give effect to those conclusions.

162. There will no doubt be a question of costs. My tentative view, uninformed by submissions, is that it would be appropriate for those costs to be costs in the cause. I accept that the interlocutory hearing could be regarded as a separate “event” for the purposes of UCPR r 42.1. However, as against that, it would not seem to me to be just for one party or the other to have his costs of that event, only for it to turn out, after a final hearing, that that party loses overall.

163. If either party wishes to contend for a different costs order, he should serve and provide to my Associate, by 2 December 2016, submissions not exceeding 10 pages in length setting out the costs orders claimed and the reasons in support. The other party should serve and provide to my Associate, by 16 December 2016, submissions in reply of the like length. Subject to any other order of the Court, that dispute should be dealt with on the papers.

164. The parties are to prepare and submit within seven days draft orders to give effect to these reasons.

165. I list the matter at 10 am on 25 November 2016 before me for the making of orders.

**********

Decision last updated: 18 November 2016