PKF Accounting (SA) Pty Ltd v Michael Gartner - [2007] SADC 16

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
PKF ACCOUNTING (SA) PTY LTD v MICHAEL GARTNER
[2007] SADC 16
Judgment of Her Honour Judge Kelly
27 February 2007
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES
Claim for professional services rendered by the plaintiff to the defendant. Defendant disputed terms of contract. Contract not reduced to writing. Whether plaintiff had an agreement with defendant. Whether parties agreed on a contingency fee. Whether amount claimed by plaintiff was excessive and unreasonable.
Held, plaintiff did perform work for the defendant pursuant to an agreement between the parties. The amount claimed was not excessive. The plaintiff did not enter into any agreement with the defendant for payment on the basis of a contingency fee arrangement.
The Plaintiff is entitled to judgment in his favour.
Griffiths v Evans [1953] 2 All ER 1364, 1369; Adamson v Williams [2001] QCA 38, discussed.

PKF ACCOUNTING (SA) PTY LTD v MICHAEL GARTNER
[2007] SADC 16

The plaintiff PKF Accounting (SA) Pty Ltd (“PKF”) a firm of Chartered Accountants, claims the sum of seventy eight thousand four hundred and eighty eight dollars and sixty six cents ($78,488.66) for various accounting and advisory work undertaken for the defendant Michael Gartner during the period between November 2004 and up to 31 December 2005.
Michael Gartner (“defendant”) denies liability to pay any money to the plaintiff on a number of bases. In his defence the defendant denies that the plaintiff undertook any accounting or advisory work for him and asserts that:-
·    Any agreement he had was with David Fechner, a Director of PKF, acting in his own right and not with PKF.
·    The defendant entered into an agreement with David Fechner to undertake work for the defendant on a success fee basis. This was agreed at the first meeting between the two men.
·    In the alternative, if any money was owing to the plaintiff then the amount claimed by the plaintiff was far in excess of any work performed, was unreasonable and unsubstantiated.
The plaintiff called only one witness, an accountant named David Fechner (“Fechner”). The defendant gave evidence on his own behalf and called two witnesses, a man named Jason Tranter and Martin Corner.
At the trial the defendant, who appeared for himself, maintained the defence set out in the pleadings, however the issue which really emerged as the main point of contention was whether the defendant engaged Fechner on the basis of a contingency fee payment or on the basis, as Fechner asserted, of services charged at an hourly rate of two hundred and forty dollars ($240) but with extended terms to accommodate the defendant’s then difficulties with cash flow. Another issue which emerged as the evidence unfolded was the purpose for which the defendant had retained Fechner’s services and whether the nature of that retainer changed from time to time after the defendant initially instructed Fechner in November of 2004.
At the outset I observe that it is unfortunate that no proper written record was ever made of the terms on which the defendant engaged Fechner to work for him in November 2004. It is the absence of any written record of the agreement which has given rise to this litigation. In the past and in a different context, it might have been thought that the absence of a proper record in writing of a retainer agreement between a professional person and his client, would tell against the professional person. As Denning, LJ in Griffiths v Evans[1] said:
On this question of retainer, I would observe that where there is a difference between a solicitor and his client on it, the courts have said for the last one hundred years or more that the word of the client is to be preferred to the word of the solicitor, or, at any rate, more weight is to be given to it. The reason is plain. It is because the client is ignorant and the solicitor is, or should be, learned. If the solicitor does not take the precaution of getting a written retainer, he has only himself to thank for being at variance with his client over it and must take the consequences.
[1] Griffiths v Evans [1953] 2 All ER 1364, 1369
However, as the Supreme Court of Queensland observed in Adamson v Williams[2], in the absence of any written agreement any dispute in a case like this must be resolved on the basis of the court’s findings as to the credit of the respective witnesses.
[2] Adamson v Williams [2001] QCA 38
I have been conscious throughout these proceedings that my findings of credit in relation to each of the two principal witnesses will go along way in resolving the issues which arise for determination.
With that in mind, I turn now to the evidence.
The Plaintiff’s Case:
David Fechner:
Fechner was the only witness called by the plaintiff in support of its case. His evidence was to the following effect.
Fechner first met the defendant in November 2004. Initially he was unable to recall the circumstances in which he first spoke with the defendant, whether it was by telephone or in person. By reference to his diary he was able to recall that his first meeting with the defendant was on 4 November 2004.
At that meeting the defendant provided an explanation of his situation including the fact that he had a number of primary production properties in a number of entities which he controlled. The defendant informed Fechner at that time of the dispute which had arisen with the National Australia Bank (“NAB”) in relation to a winery (The Great Stone Winery) which he had constructed.
Fechner’s recollection was that the defendant told him at that meeting that in respect of some entities receivers had already been appointed or it may have been that the bank had taken possession as mortgagee. The defendant told him that he was in the position at that stage where there was some potential to be able to purchase the properties back from the bank at less than their market value.
Fechner understood that those properties were in the Coonawarra and were vacant land as well as vineyards which included some water rights. The properties were worth millions of dollars.
At the first meeting the question of a contingency fee did arise. The defendant explained that he was not good for cash at that stage and his recollection was that the defendant had asked him to do the work on a speculative basis. Fechner told the defendant that PKF would not do that but that they could enter into an arrangement to provide credit terms that were more favourable than the normal credit terms of raising bills every month which were payable within 14 days.
Fechner was unclear about the exact conversation with the defendant but said that he explained that he would provide extended terms of credit over and above PKF’s normal monthly billing. He said he did this as he had confidence at that stage that the defendant could achieve cash flows from the properties but he understood that the defendant was in a very difficult situation given what had occurred over the previous couple of years, especially with regard to the NAB and the Coonawarra properties.
At that first meeting, Fechner advised the defendant that his hourly rate was two hundred and forty dollars ($240) an hour plus GST. He also advised that staff rates for work done varied from between sixty to one hundred and ninety dollars ($60 - $190) per hour depending on the level of expertise of that particular staff member.
At that same meeting the defendant instructed Fechner to prepare a funding package with a view to purchasing back the Coonawarra properties. Fechner understood that there was a deadline that the defendant was up against in terms of this arrangement.
After that first meeting Fechner waited to be provided with further information which, he recalled, was forthcoming quite quickly. The information which was provided was in documentary form and related primarily to the primary production properties in the Coonawarra.
In cross-examination Fechner agreed that his second meeting with the defendant could have been as soon as two days later and agreed that the second meeting went on for 5 hours on a Saturday. He pointed to details from the PKF work in progress computer printout (P1) that a meeting of that duration was recorded on 6 November 2004.
He said it was most unlikely that his firm PKF would ever have done this kind of work solely on a success fee basis given that it was not a straight forward deal in the first place which is why he understood the defendant had been referred to him.
At the time when the defendant first consulted him, Fechner expected that the project would take only 2 or 3 months and might possibly involve the expenditure of twenty thousand dollars ($20,000) or so.
None of the terms of engagement about which Fechner gave evidence were ever reduced into writing. He explained that in his experience it is sometimes possible to send letters of engagement for fixed fees, however, in projects where it is uncertain at the outset what the final cost will be, he rarely sends letters of engagement.
He did recall that because he was not sure about the defendant’s situation he knew that he would have to do most of the work himself and because he was the most expensive resource within the firm he quoted his hourly rate. When Fechner was asked why he believed the defendant could accommodate the terms on which the plaintiff was prepared to work for him he replied at (T59).
On the basis that I put to him that we wouldn’t do it on a success fee basis and he didn’t stand up and walk out.
Fechner denied the suggestion put to him in cross-examination that the defendant at no stage instructed him in relation to any refinancing of the Coonawarra lands. He maintained that from the first meeting he was instructed to put a proposal to financiers to enable him to repurchase those lands at less than market value. He acknowledged that he understood from the defendant that there was a confidential Deed of Arrangement between him and the NAB and that he knew there was a deadline for that arrangement. Nevertheless, the defendant had told him that he wanted a fall back position if that existing arrangement did not go through involving the bank and a highly placed South Australian businessman. The defendant had told him he did not really believe that that transaction was really going to occur.
Fechner understood that even after the bank deadline was reached and after the properties were publicly listed on the market that the NAB was still willing to let him, if he could, repurchase the properties. However, by 11 February 2005 he said the defendant told him that the suggested repurchase of those lands could not go ahead and he then asked Fechner to focus on a proposal to repurchase the Great Stone Winery back from the Tranter family.
He maintained that although 11 February 2005 was the first date on which he was instructed to focus on the repurchase of the winery, the winery had been mentioned in earlier meetings as part of the overall picture.
Indeed, Fechner pointed to various entries in the invoices emanating from PKF which he said illustrated the point that he had been endeavouring in the first several months after initially being engaged by the defendant to organise a potential refinancing of the Coonawarra lands. He pointed to an entry on 9 December 2005 (P1 page 2) where he had couriered around to the finance broker Mr Corner, an initial financial information package. That package was ultimately tendered (D2). It is evident on the face of page one of that document that the material relates to the properties in the Coonawarra and the purpose of the loan is described. (D2 page 1):
The purpose of the loan is to refinance NAB. The NAB appointed a receiver on the basis that they had requested the Gartner’s to arrange refinance by a certain date.
During the meeting of 11 February 2005 there was a discussion with the defendant concerning the winery purchase and reference to some grape contracts with Hardy’s. Fechner said the defendant had mentioned that these contracts may be a potential way to raise finance for the winery deal.
Fechner advised the defendant to set up Kookaburra Winery Pty Ltd as part of the arrangements to repurchase The Great Stone Winery. One of the reasons he recommended that the defendant set up the Kookaburra Winery Company was to ensure, as he put it, that there was a clean entity with which to go to the financier.
He agreed that the defendant had asked him not to approach certain banks in South Australia however he denied that he had received any blanket instructions not to approach any financier within South Australia. He was aware of the defendant’s difficulties in the past with the NAB and with the State Bank.
He agreed that he had discussions with the defendant at some stage concerning the broker’s success fee and that it was usually one percent of funds to be raised. He denied that he indicated that his fee would be one half a percent, making the point in the process, that he had never made an offer to a client in respect of raising finance that was based on a percentage of the funds to be raised.
In accordance with his arrangement with the defendant, Fechner did not render an account to the defendant until after 31 January 2005. After that first account of eleven thousand nine hundred and thirty five dollars ($11,935) was forwarded to the defendant he recalled a discussion with the defendant some time later about that account. Specifically questioned about that conversation he said he did not recall that the defendant had any concern other than a concern about the appearance of his wife’s name on the initial account. In accordance with the defendant’s complaint he then sent a further account deleting the wife’s name from the account and with a handwritten note which stated:-
Amended copy of invoice enclosed as per your conversation with David Fechner. (D1)
He specifically denied the defendant’s assertion that during the phone call concerning that account, the defendant said to him that his arrangement with Fechner was on a success fee basis.
After the incorporation of the Kookaburra Winery Company Pty Ltd some time later in the year the financing package was ready for submission to the financier. In accordance with the broker’s recommendation (Mr Corner), an application was made to the Assets Management Branch of the State Bank. Although the defendant did have reservations about dealing with the State Bank, he was assured that the Assets Management Branch was a separate entity within the bank and the application went ahead.
After rejection of that application, again acting on the advice of the broker, Fechner advised the defendant that the package was basically in order but they would need to use a different front person than the defendant. The defendant advised him that he would talk to one of his sons and later told Fechner that David Gartner would be involved. This led to the incorporation of the Schoolhouse Winery with David Gartner as the Director.
Fechner’s last dealings with the defendant were in January 2006 and were principally over arrangements which the plaintiff was trying to make with the defendant for payment of at least some of the outstanding bills which had been rendered. At that stage the defendant advised Fechner he was still hoping to get funds to put a definite proposal for payment in place.
Apart from the query about the account rendered in January of 2005 with reference to his wife’s name being on the bill Fechner did not have any other communication from the defendant about any of the accounts rendered to the defendant during 2005 until the discussions about payment in January 2006.
The Defendant’s Case:
Michael Gartner:
In examination-in-chief the defendant explained the background to his visit to Fechner in November 2004 as follows.
He had been involved in the construction of a winery which was then known as Gartner Wines but since being purchased by the Tranter family was renamed The Great Stone Winery. In order to construct that winery he and his wife had given a guarantee over partnership lands in the Coonawarra to the NAB. Eventually the NAB put receivers and administrators into the winery which was then sold to the Tranter family. The bank also placed the partnership lands which were the subject of the bank guarantee into receivership.
Under a confidential Deed of Arrangement which had been negotiated in about February or March of 2004 under the auspices of the Federal Court the Gartner family had the right to refinance any one individual property over the partnership land. That Deed of Arrangement was due to expire on 30 October 2004 and after two extensions it finally expired on 9 November 2004. Part of the confidential Deed of Arrangement involved the possibility that a well known South Australian businessman would assist the family to refinance from the bank so that the partnership lands could be repurchased by the family. This was a matter of great importance to Mr Gartner as he and his wife had owned that land for many years, and their respective fathers and grandfathers before them. It was at this time that his then solicitor, Mr Townsend, introduced him to David Fechner.
When the bank determined the final deadline as 9 November 2004 the family were then advised that the land would be put out to tender. It was at that stage that the defendant said that he realised that it would be impossible to repurchase those lands. Once the arrangements set up under the confidential Deed of Arrangement could not be executed he believed that the opportunity was lost. For this reason he never instructed Fechner in relation to any possible refinancing of the partnership land. He did however instruct Fechner to explore the possibility of repurchasing the winery and this was the purpose of his meeting with him on 4 November 2004.
He claimed that he had never been to the offices of PKF Chartered Accountants and that he had only ever dealt with Fechner in his own right. He met him for that purpose in a small room in an office on Greenhill Road. The defendant did not dispute that at the first meeting with Fechner he was handed Fechner’s business card (D3). That business card shows the then address of PKF firm of Chartered Accountants as first floor, 44 Greenhill Road Wayville. Fechner’s name appears under the letterhead PKF as a Director.
The defendant maintained the purpose of instructing Fechner was in relation to the possibility of financing the repurchase of the winery he had lost.
Notwithstanding that assertion he agreed that he had spent a great deal of time talking to Fechner, in the first meeting and indeed in the second meeting when he came back on the Saturday with more material, about the whole of his business affairs. During the course of those conversations he told Fechner about the confidential arrangement between the NAB and the other parties. As to the arrangements entered into for payment of any fees incurred, the defendant said (T158).
At that second meeting it was then agreed that it was certainly asked for, stated at the first meeting any work I could get done had to be on a success fee basis, it had to be on that basis because I had no funds and had no access to funds. This was in November 2004.
He went on to explain that he formed the view fairly quickly that the bank was asking too much for the partnership lands and he was only ever interested in instructing Fechner to assist with the repurchase of The Great Stone Winery which he had also lost.

In cross-examination he agreed that the documentation contained in exhibit D2, which was the material forwarded by Fechner to the finance broker Mr Corner, appeared to be documents concerning the partnership lands but maintained that the only purpose in Fechner investigating anything to do with the partnership lands was in connection with the repurchase of the winery. When asked to clarify that he said at (T163).
I did ask the question to Mr Fechner on the way through, that he asked me for all this information on the partnership land, he wanted to put it all together and have a look at it and see what the fallout was if we got it back, if there was any equity to support the winery purchase and that was the sole purpose of Mr Fechner having anything to do with the partnership land.
He conceded that the confidential Deed of Arrangement did not bear any fruit and by the first week in November it was obvious that the bank were not going to cooperate any longer. He also conceded that even after the bank had decided to put the lands out to tender it was somewhat amicable in that they did not require the family to get out of the house instantly.
He maintained in cross-examination that all of the cash flow forecasts in respect of the partnership lands which he had provided to PKF were provided solely in connection with the attempts to purchase the winery. He agreed that the tender processes for the partnership lands had not closed and may well have run into January of 2005. He denied harbouring a belief that even during that tender process he still hoped to be able to repurchase that land for less than its market value and regain the property.
The defendant’s version of the agreement between himself and Fechner as a result of the first and second meetings in November of 2004 is markedly divergent. The defendant maintains that the agreement between himself and Fechner reached either at the first or second meeting was that payment of his fees would be on a success fee basis. Although the defendant was never directly cross-examined about the precise conversation which Fechner alleged as to the hourly rates he charged, I infer from his submissions at the end of the trial that the defendant denies that Fechner stated his hourly charge out rate at that first meeting either.
When cross-examined about the amended account of 31 January 2005 (D1), the defendant maintained that he had, in addition to complaining about his wife’s name, also complained that the account was from PKF a firm that he was unaware of and did not believe he was dealing with. He also claimed in evidence that after receiving the second account on 1 June 2005 he rang up Fechner again and asked “why”, to which Fechner allegedly responded, “it should not have come I agreed to that.”
Notwithstanding the fact that he claimed that Fechner had agreed that his fees would be paid on a contingency basis the defendant did not give any other detail of the conversation concerning the contingency fee arrangement. There was no evidence as to the basis for any calculation of any contingency fee or, apparently, another thing said about the fees until the defendant rang Fechner after receipt of the first account sometime in February of 2005.
Jason Tranter:
To support the defendant’s claim that Fechner had agreed to a contingency fee the defendant called one witness named Jason Tranter. Mr Tranter is the owner of The Great Stone Winery and said that he had had discussions with the defendant in 2004 concerning the sale of The Great Stone Winery to the Gartner’s. At that time the defendant mentioned that he was dealing with David Fechner and thereafter Mr Tranter rang Fechner to speak with him about the purchase of the winery. He maintained that this was well before Christmas of 2004. He said that he had rung Fechner because he was wanting to know if it was true that he was raising the finance for the Gartner’s to purchase the land. He said he spoke to him on a number of occasions during this time and a couple of times after that particular conversation.
He claimed to distinctly remember the conversation because at that time he wanted to buy another property and he had grave concerns about whether the defendant could raise the money. He claimed that he said to Fechner over and over again (T124).
‘Are you sure you can get these funds?’ and David said ‘I am a 100% sure, I am very sure he can get these funds’ and I said ‘What makes you so sure?’ and he says ‘I just know he will’. He said ‘I am not doing all this work for nothing’. I said ‘What are you getting out of it?’ and he said ‘I am on a success fee basis, so it is in my interests to make it work’. I rang him on numerous occasions after that, and it was right through January and right through February and the time kept getting on and on. It was right up until the last when in the end, he still didn’t have the courtesy to ring me and tell me that he couldn’t get the funds for Michael, and it just went by the wayside and I never heard any more.
It is obvious from the documentary material tendered that negotiations for the purchase of The Great Stone Winery from Jason Tranter took place over an extended period of time and negotiations were still going on in late 2005. Various faxes and emails concerning valuations of the winery were exchanged between the defendant and Fechner in May, June and July of 2005 and indeed in July of 2005 Mr Tranter himself sent the licence for The Great Stone Winery to Fechner.
As a result of Mr Tranter’s evidence and after explaining the rule in Browne v Dunn[3] to Mr Gartner I permitted the defendant to recall Fechner who then spoke of his dealings with Mr Tranter. It is of some significance that Fechner did recall speaking to Mr Tranter at a very late stage in the arrangements, probably as late as January of 2006 when Mr Tranter himself indicated that he was willing to put some money in to guarantee that if the deal went through that he would pay some of the outstanding debt of the defendant to PKF.
[3] Browne v Dunn (1894) 6 R 67
By that stage Fechner said Mr Tranter had been advised that PKF were likely to stop doing work because of non-payment and it was obvious that Mr Tranter was anxious for the sale to go through. Fechner’s evidence was to the effect that this was the only time there was any discussion which came close to answering the description of a discussion concerning a success fee.
Fechner said that he had discussions with Jason Tranter quite regularly, at least once a fortnight and he denied ever saying to Mr Tranter that he had agreed to do the work for the defendant on a success fee basis.
Whilst the defendant did not deny that from the first meeting with Fechner in November of 2004 Fechner thereafter put together proposals in various names for finance he disputes the purpose for which those proposals were made. He maintained he only ever instructed Fechner in relation to the repurchase of The Great Stone Winery.
There is a clue to this divergence of view as to what Fechner was instructed to do in the cross-examination of Fechner by the defendant when the following exchange occurred (T86 – 87).
QMichael Gartner indicates to you that he doesn’t believe it was going to go ahead.
ANo, that would not have been indicated in the first meeting.
QHe comes to you and tells you there’s a confidential arrangement with NAB and tells you there’s an influential person involved in purchasing all the partnership lands; we have gone through that.
AYes.
QThat was imminent to happen. Why would he spend money going out looking for someone else to buy it at that point in time, do you think.
ABecause he didn’t think it was going to happen.
QHe was under a confidential agreement with this influential person in Adelaide, he had been sworn to confidentiality and that if he went outside to talk to people about it and tried to get finance elsewhere, that person would walk away from the deal. I was at that meeting on the 4^th and you’re saying I was prepared to risk everything and I give you a hand to go out and look for funds.
AI don’t know what you were prepared to do in that regard or that you were risking anything in that regard. I was not aware of what was in the deeds or what the arrangements were as to whether there were benefits or downsides. I didn’t have any information that would let me assess that.
The defendant came to Fechner with a difficult and complex problem. He came at the eleventh hour when the proposed arrangement with the NAB and the highly placed South Australian businessman was about to collapse. It is obvious that the defendant perceived himself as bound by the Deed of Arrangement with regard to the need for absolute confidentiality. That much is evident from his own evidence and exchanges with Fechner in cross-examination. On the defendant’s own evidence the instructions to Fechner were given some four days before the bank finally refused to extend the deadline and put the partnership lands out to tender.
That background provides some explanation for the defendant’s denial that he ever gave instructions to Fechner about any proposal to try and refinance the partnership lands in the Coonawarra on 4 or 6 November or at any stage.
Even though the bank’s deadline expired and the land was put out to tender, there was still some window of opportunity in December and January 2004/2005. As things ultimately transpired the defendant determined that the price was too high and it could not be done and it is obvious from the evidence that he thereafter turned his attention to the possibility of repurchasing the winery which he had lost.
For these reasons I cannot accept the defendant’s evidence as to the instructions he gave Fechner in those first meetings of 4 and 6 November 2004. There was no sensible reason for Fechner to have proceeded in the way he did at that very time when the arrangement with the NAB and the highly placed businessperson was about to collapse other than if he had received instructions from the defendant accordingly. Moreover, Fechner’s recollection of his instructions and his actions thereafter between November and 11 February 2005 accord with the events which were unfolding at that very time in relation to those lands, the NAB and the defendant. The financial proposal which was sent to the broker (D2) is consistent with Fechner’s evidence about that.
The defendant called the broker Mr Corner to support his claim that Fechner had proceeded on his own volition and without instructions from the defendant as to the partnership lands. Once again, in Mr Corner’s evidence, there is a clue to the misunderstanding which Mr Corner appears to have entertained about what Fechner was doing at that time (T184-185).
QDo you recall a later time when Mr Fechner came to you and said that the land deal was off but that the proposal was now to buy a winery facility, namely The Great Stone Winery?
AWhat I recall is that the land deal as such was discussed but it was never really – it wasn’t on at all initially, because we agreed that the winery, because of an urgency in acquiring it, would be the priority and the land deal would be discussed at a later stage.
QDo you agree that that email dated 27 November would appear to be the only one concerned with the land?
AYes, it appears that way.
QAnd would you agree that D2 similarly is only concerned with the land.
AWith the winery, yes
QWell, I will have to be specific on that. Relating to the 10 parcels of land that produce wine.
AYes; they are listed in there, that is correct.
QAnd there is no reference in there to the valuation of industrial assets.
ANo, there isn’t.
Mr Corner’s recollection was that he did receive information concerning the partnership properties in relation to the financing of the winery. However he did agree that the negotiations had gone on for a period of some 16 months and he was speaking from memory.
To the extent that Mr Corner’s recollection as to the purpose for which he was instructed to seek finance in November and December of 2004 differs from Fechner’s recollection, I prefer the evidence of Fechner. Mr Corner conceded that he was relying solely on memory and I have formed the view from his evidence that he was confused about the timing of his instructions. It is also possible that he may not have been as fully briefed as Fechner who by the stage the proposal was couriered to Mr Corner had spent many many hours with the defendant.
I find that Fechner did act in accordance with the instructions which were given to him in November of 2004 and did prepare more than one proposal for the refinancing of both the partnership lands and later the purchase of The Great Stone Winery.
I consider it to be of some significance that whilst the defendant disputes the purpose for the loan applications made on his behalf in November and December of 2004 he does not dispute that at that time he had instructed Fechner to work on the possibility of refinancing for him, albeit for a different purpose. I have formed the view that the defendant was in such a desperate state at that time that he did ask Fechner to explore all possibilities, one of which was to investigate the possibility of refinancing the partnership lands.
I consider the most probable explanation for this apparent divergence between Fechner’s understanding of what he was instructed to do in November of 2004 and the defendant’s view to be that the defendant is not prepared to concede that at that time he was in fact exploring all possibilities with Fechner in order to try and salvage his situation. Even if I am incorrect in having reached that view, the fact is that Fechner did investigate a number of refinancing possibilities for and on behalf of the defendant from the date of his first instructions on 4 November 2004 and I find that the work he did at that early stage fell within the parameters of his retainer.
I also accept that in the meeting of 11 February 2005 the defendant did instruct Fechner to concentrate on the winery. That position accords with the fact that by that date the tenders in relation to the partnership lands had closed and it was by then obvious to the defendant that he could not raise sufficient finance to repurchase those lands.
Findings & Conclusions:
It is evident from the foregoing, as I remarked earlier, that when the defendant first consulted Fechner he was in a very difficult position. Fechner in a very real sense inherited a complex and difficult set of problems. The financial position of the defendant was not good. He was in great difficulties with the bank as a result of the guarantee which he and his wife had given over the partnership lands, the arrangement that he hoped would come off involving the highly placed South Australian businessman did not come to fruition and I find, that at the stage when he sought Fechner’s advice, the defendant was desperately trying to salvage his situation.
It is difficult to understand just what any alleged contingency fee could have been. The nature of Fechner’s retainer changed on a quite frequent basis. Even on the undisputed evidence one loan proposal was made in the name of Kookaburra Winery Pty Ltd, of which Mr Michael Gartner was the Director. Another proposal which Fechner was instructed to make, was made in the name of the Schoolhouse Winery, of which David Gartner was the Director.
The defendant made the bare assertion that there was an agreement about a contingency fee. If the defendant is to be believed there was no further discussion about any aspect of that contingency fee, including what one might expect to be a fundamental aspect of such an arrangement, namely, the basis for the calculation of that fee. According to the defendant this was never discussed at any stage. In all of the circumstances I find the defendant’s evidence about the agreement to accept a contingency fee to be inherently improbable.
I accept the evidence of David Fechner that he received instructions at the first meeting in November 2004 in the first instance to explore the possibility of refinancing the partnership lands. I find that those instructions changed on 11 February 2005 when Fechner was instructed to concentrate on a proposal to repurchase The Great Stone Winery. Those instructions changed from time to time thereafter in the sense that there were proposals as to which entity would be used to present a proposal to the financier.
I find that the defendant instructed Fechner to incorporate a company Kookaburra Winery Pty Ltd, for that purpose. The defendant became a Director of that company. After the first proposal in the name of Kookaburra Winery Pty Ltd was rejected by the State Bank, I find that the defendant then instructed Fechner to proceed with a similar application this time in the name of another entity controlled by his son, David Gartner.
As I have observed earlier, if David Fechner had taken the simple and professional step of reducing to writing the terms of the agreement he made with the defendant on 4 November 2004 it is likely that this litigation could have been avoided. Nevertheless, I consider him to be an honest witness, even if to some extent, and to use his own words, naïve, in failing to record in writing the arrangements made at that first meeting.
I accept Fechner’s evidence that at the very first meeting with the defendant he advised that he would charge for work performed by his firm at the rate of two hundred and forty dollars ($240) per hour and at the rate of between sixty dollars and one hundred and fifty dollars ($60 - $150) per hour for subsidiary staff depending on their level of expertise.
The fact that Fechner sent out invoices at the end of January 2005, June 2005, September 2005 and December 2005 is consistent with an agreement made with the defendant that PKF would endeavour to accommodate the defendant’s lack of cash flow by allowing him deferred terms for payment.
I find that each of the accounts rendered to the defendant have been substantiated by detailed entries in the PKF work in progress reports (P1). It is evident from those reports and the accounts rendered that Fechner did charge for his time at the rate of two hundred and forty dollars ($240) per hour.
During the course of evidence I was told that some other accountants, including those in PKF, charge more than two hundred and forty dollars ($240) per hour for their professional services. There is nothing in the evidence and no suggestion has been made that a charge at that hourly rate for a chartered accountant for professional services rendered is an unreasonable fee. It is evident from the voluminous amount of documentary material tendered at the trial all of which I have read, that Fechner did carry out work for and on behalf of the defendant over a period of some fourteen months consistent, as far as I could tell, with the detailed work in progress reports.
There was no attempt at any stage of the proceedings by the defendant to dispute any particular entry contained in those invoices in P1 and there has been no attempt by the defendant other than in the most general of ways to complain about the quality of any particular piece of work or action performed on his behalf by Fechner.
I simply cannot accept the defendant’s evidence as to the arrangements he says were made with Fechner in November 2004. I find that the only complaint that the defendant communicated to either the plaintiff or Fechner about the accounts forwarded to him was in the telephone calls he made after receipt of the first account sometime in February of 2005. I find that the complaint which he made concerned the appearance of his wife’s name on the account of 31 January 2005. I accept Fechner’s evidence about that communication. Moreover, the account rendered with the handwritten note attached (D1) is consistent with Fechner’s evidence on that topic.

I do not accept Jason Tranter’s evidence that Fechner communicated to him at any stage that his arrangement for payment from the defendant was on the basis of a success fee. It is plain from the evidence of both Fechner and Jason Tranter that the two men did have a number of conversations over an extended period of time with regard to the proposed winery purchase.
I accept that there was a conversation with Jason Tranter very late in the piece, perhaps as late as December 2005 or early January 2006 when a conversation occurred about the possibility of Jason Tranter contributing to the defendant’s fees if the winery deal was successful. It is in this context that I find any discussion about any success fee did occur.
In any event I find that the very terms of the conversation which Mr Tranter says he had with Fechner on this topic are consistent with that conversation having occurred many months down the track when negotiations had been progressing for some time. For these reasons, I prefer the evidence of Fechner both as to the context of that conversation and its timing.
I deal finally with the defendant’s defence that he did not have any agreement with the plaintiff PKF. It is obvious that the defendant is an experienced businessman who had previously been involved in many complex financial transactions and other business dealings over many many years. I do not accept that he was labouring under any misapprehension as to the capacity in which David Fechner saw him in November of 2004 as a Director of PKF.
I have already observed that the defendant attended at the registered offices of PKF Chartered Accountants on Greenhill Road and met Fechner in one of the offices in that building. Moreover, at that very first meeting he was given a business card clearly identifying David Fechner as a Director of PKF. On his own evidence the defendant had a number of telephone contacts with Fechner and various staff members of the plaintiff over the next several months. In view of my earlier findings that the defendant made no complaint other than the fact of his wife’s name appearing on the account of 31 January 2005 it follows that I have formed the view that there is no substance to this ground of the defendant’s defence. It is not credible that the defendant behaved in the way he did for a period of over nearly one year labouring under this misapprehension. One would have expected a complaint from the defendant at the very latest by the time he received the first account from the plaintiff. I find there were none.
For all of these reasons I am satisfied to the requisite degree that the plaintiff is entitled to judgment in the amount claimed. There will be judgment for the plaintiff in the sum of seventy eight thousand four hundred and eighty eight dollars and sixty six cents ($78,488.66). I will hear the parties as to interest and costs.