Populus Lawyers P/L v Kennedy & Co P/L - [2015] SADC 66

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Minor Civil Review)
POPULUS LAWYERS P/L v KENNEDY & CO P/L
[2015] SADC 66
Judgment of His Honour Judge Beazley
15 May 2015
MAGISTRATES
Minor Civil Review
Purpose and objectives of s 38 of the Magistrates Courts Act 1991 considered – the Act evinces a general intention that a Magistrate, sitting as the trial court, should proceed broadly in accordance with an inquisitorial model as opposed to an adversarial model – discussion of the nature of an application for review in the District Court – it is not in the nature of an appeal stricto sensu – it is itself an enquiry to determine whether a full and fair enquiry was conducted by the court below.

PROCEDURE - JUDGMENTS AND ORDERS - ACTIONS ON JUDGMENTS - IN GENERAL
CONTRACT OR RESTITUTION - Solicitor retaining expert for purposes of litigation - claim in contract - whether all essential terms of retainer agreed - whether mandatory professional standards ought be implied terms of a retainer.
Judgment entered in Minor Civil Action for the respondent for a liquidated claim for professional services – the respondent asserted at trial that it was engaged by the applicant to prepare an expert accounting report for use by the applicant as solicitors in legal proceedings – the applicant, by letter dated 16 November 2012, enclosed relevant documents, detailed a series of issues to be addressed by the respondent, and concluded with the expression 'we look forward to your report addressing the matters … in due course' - the applicant asserts that no retainer entered into as no acceptance was communicated by the respondents - further no agreement as to fees - trial listed for hearing on 28 February 2013 - whether respondent made aware of that date - respondent provided its expert report on 24 May 2013, well after the proceedings had been resolved – the respondent claimed the sum of $11,350.90 for professional fees – the applicant refused to pay the respondent’s invoice or any part thereof – in its defence the applicant asserts that there was no binding agreement and that the respondent’s work was of no benefit to it - the respondent asserts that the report was requested by the applicant and that the respondent's work was of value to the applicant, even though it was not used by it.
The Learned Magistrate concluded that there was a binding agreement between the applicant and the respondent – she entered judgment in the sum of $13,156.90 including costs of the action.
Held: Ultimately it was only necessary to consider the claim in contract, and not for restitutionary relief. The learned Magistrate correctly determined that there was a valid and binding agreement between the parties – judgment of the Learned Magistrate open on the evidence – judgment accordingly affirmed – application for review dismissed.
Magistrates Court Act 1991 s38; District Court (Civil) Rules 2006 R6 DCR 279A, referred to.
Mushroom Composters Pty Ltd v IS & DE Robertson Pty Ltd [2015] NSWCA 1; Lumbers v W Cook Builders Pty Ltd (In Liq) (2008) HCA 27; Lampson (Aust) Pty Ltd v Fortescue Metals Group (No3) [2014] WASC 162; British Steel Corp v Cleveland Bridge and Engineering Co Ltd (1984) 1 All ER 504; Sabemo Pty Ltd v North Sydney Municipal Council (1977) 2 NSWLR 880; Brenner v First Artists' Management Pty Ltd (1993) 2 VR 221; Andrew Shelton & Co Pty Ltd v Alpha Healthcare Ltd (2002) 5 VR 577; Angelopoulos v Sabatino (1995) 65 SASR 1; Electricity Generation Corporation v Woodside Energy Ltd 2014] HCA 7; Harradine v District Court of South Australia [2012] SASC 96; Francos v Hocking [2000] SASC 128; Byrne v Kendle [2011] HCA 26; Pacific Carriers Ltd v BNP Paribas (2014) 281 CLR 415 at 461-462; Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising (1975) 133 CLR 72; ABC v XIVth Commonwealth Games (1998) 18 NSWLR 540; Freeman-Lockyer v Buckhurst Park Properties [1964] s QB 480; Geemaz Management Pty Ltd v Geelong Motors [2013] VSC 571; Everingham v Mullins [2000] SASC 448; GEC Marconi Systems Pty Ltd v BHP INformation Technology [2003] FCA 50 at [216]; Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd [1988] BC 8801158; Hendriks v McGeoch [2008] NSWCA 53; Liebe v Molloy (1906) 4 CLR 347; Humphris-Clark v Lazaridis [2010] NSWSC 318; Hills Industries Ltd v Hiley & Others [2012] SADC 148; Hopcroft & Edwards v Edmunds (2013) 116 SASR 191; Steele v Marshan [2012] NSWCA 141; Painaway Aust Pty Ltd v Jakl Group (2011) 249 FLR 1 at 51; William Lippe Architects v Innes [2007] Scot CS CSIH 84; Wilkie v Scottish Aviation [1956] SC 198; Old v Hodgkinson [2009] NSWSC 1160 and [2011] NSWCA 410; Elomax Pty Ltd v Russell Kennedy (a firm) [2009] VSC 615; Midland Bank v Hett, Stubbs and Kemp [1979] 1 Ch 384; Independant Grocers Co-operative Ltd v Noble Lowndes Superannuation Consultants Ltd (1993) 60 SASR 525 and (1966) 61 SASR 297; Independant Grocers Co-operative Ltd v Noble Lowndes Superannuation Consultants Ltd (1993) 60 SASR 525 and (1994) 61 SASR 297; Ball: 'Work carried out in pursuance of Letter of Intent' (1993) 99 LQR 572; Carter: 'Contract Law in Australia' 6th ed [38-10]-[38-18], considered.

POPULUS LAWYERS P/L v KENNEDY & CO P/L
[2015] SADC 66
Introduction

This is an application brought by Populus Lawyers Pty Ltd (‘the applicant’), pursuant to s 38 of the Magistrates Court Act 1991, seeking that this court review a judgment entered by a Magistrate against it, in Minor Civil Action number 15950 of 2013.
The applicant, which trades as a firm of solicitors in various States of Australia, was the defendant in those proceedings, which involved a liquidated claim for professional fees, brought against it by Kennedy & Co Pty Ltd (‘the respondent’), which trades as a firm of accountants.
On 7 August 2014, a Magistrate entered judgment in favour of the respondent in the total sum of $13,156.90 inclusive of the costs of trial. Both parties were represented by counsel at trial and upon this review.[1]
[1] Magistrates Court Act 1991 (SA) s38(4)(a)(i).
Preliminary remarks and background
What ought to have been a simple retainer for professional services, has resulted in the subject Application for Review, raising complex issues of law, made even more complex by the conduct of the parties.[2]
[2] See Brenner v First Artists' Management Pty Ltd (1993) 2 VR 221; Andrew Shelton & Co Pty Ltd v Alpha Healthcare Ltd (2002) 5 VR 577.
This issue has been explained as follows:[3]
Letters of Intent often contain a request to commence the work … even if there is no specific request to commence, the parties will commonly behave in the expectation that a contract will eventuate. This may take the form of starting the work itself, as in Trollope & Colls Ltd v Atomic Power Constructions [1963] 1 WLR 333. These acts of reliance on an informal relationship cause problems of analysis. It is often accepted that work carried out in reliance of a Letter of Intent ought to be paid for, as long as the person doing the work is not acting entirely gratuitously and at his own risk, but the exact principles on which recovery is based are unclear. Whether it be contractual or restitutionary, either way severe problems are encountered.
[3] Ball: 'Work carried out in pursuance of Letters of Intent - Contract or Restitution' (1983) 99 LQR 572; Carter: Contract Law in Aust, 6th ED, pgs 919 -923.
The respondent’s claim was for fees for professional services rendered by it. It was based upon a detailed Letter of Engagement from the applicant dated 16 November 2012.[4] That letter enclosed some volumes of financial documents, upon which the respondent was requested to prepare an expert accounting report for use by the applicant in proceedings in the County Court of Victoria.
[4] Ex P2.
It was not suggested that the applicant was acting as an agent for its client in requesting that report.[5] The letter was silent as to the question of fees. The respondent asserts that there was a separate discussion with the applicant as to the method by which fees would be charged by it.[6] The letter was also silent as to a date for the completion of the expert report, and as to the date for trial. The applicant asserts that those dates were referred to in previous discussions between the respondent and other solicitors.
[5] Contrast - Elomax Pty Ltd v Russell Kennedy [2009] VSC 615.
[6] Transcript, 17/7/14 at p5, and see ABCV XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 550.
It is now rare for actions to be commenced for the recovery of professional fees because most professional bodies ‘provide financial disincentives to the recovery of fees in the absence of a costs disclosure.’[7] It was previously a common problem. In some jurisdictions Courts had overcome any difficulty by declaring that ‘in most trades and professions it is the customary or general rate to which, in the absence of special agreement, persons are held to have tacitly agreed’.[8] Whether this is properly described as an implied term of a contract or alternatively a claim in restitution has also been the subject of recent academic debate.[9]
[7]    Steele v Marshan [2012] NSWCA 141 at [18]. See Legal Practitioners Act 1981, Schedule 3, sections 10 and 18.
[8]    Wilkie v Scottish Aviation Ltd [1956] SC 198.
[9]    Lampson (Aust) Pty Ltd v Fortescue Metals Group (No 3) [2014] WASC 162 at [65]-[68], and Xu v Jinhong Design & Constructions [2011] NSWCA 227.
It is convenient to turn to the letter passing between the applicant and the respondent dated 16 November 2012.
Letter of Instructions
On 16 November 2012, Mr ‘C’, who identified himself as ‘Special Counsel’ in the Melbourne office of the applicant, forwarded a detailed letter comprising some 3 pages, to Mr Paul Jorgensen of the respondent.[10]
[10] Ex P2.
Mr ‘C’ explained that the applicant acted for persons, to whom I shall refer to as ‘V Wines Pty Ltd’, and ‘K V’, who were defendants to proceedings in the County Court of Victoria brought by ‘V Industries Pty Ltd’ and ‘R V’.
He enclosed a bundle of financial statements for V Wines Pty Ltd, copies of the pleadings, and a document entitled an ‘Expert Witness Code of Conduct’.
Mr ‘C’ set out at length the issues raised on the pleadings, narrowing them, for Mr Jorgensen’s purposes, to the true value of ‘R V’s’ loan account in ‘V Wines Pty Ltd’ as at 15 April 2011; and the true value of any assets of ‘V Wines Pty Ltd’ which had been removed by ‘R V’ without authority:
He sought the opinion of Mr Jorgensen, inter alia, as to:
·the current value of the loan from ‘R V’ to ‘V Wines Pty Ltd’.
·the written down value of that loan as at 30 April 2011 and 30 June 2011.
·the written down value of the plant and equipment of ‘V Wines Pty Ltd’ as at 30 June 2010, 30 April 2011 and 30 June 2011.
·the written down value of the missing equipment for those same periods.
·the ‘correctness’ of the methodology employed by the respective accountants in preparing their valuations.
·an assessment of the resale value of certain plant and equipment at 30 April 2011.
·an assessment of the present value of that plant and equipment.
The letter of instructions concluded with the following words:
We look forward to your report, addressing the matters in the Form 44A document in due course. (my emphasis)
Prima facie, the terms of the letter constituted an instruction by the applicant that the respondent should proceed forthwith to undertake that work, and waived any requirement for acceptance of the request. The respondent proceeded to prepare the requested expert report, and, much later on 24 May 2013, forwarded that report to the applicant. As it transpired the County Court action had been listed for trial on 28 February 2013, and was settled well before the receipt of the report.
There was evidence of telephone discussions between Mr ‘C’, the solicitor who was the author of the Letter of Instructions, and employees of the respondent, including Paul Jorgensen, at about the time of the transmission of the Letter of Instructions. There was a dispute as to the content of those discussions. However there was no contact between the applicant and the respondent between the receipt of the Letter of Instructions and the delivery of the report.
There was however, as I have already noted, some background to the transmission of the Letter of Instructions by the applicant. The applicant’s clients in the County Court action had previously engaged an Adelaide firm of solicitors to act for them in those [Victorian] proceedings. Those solicitors had engaged the respondent to prepare an expert report, and had provided it with financial records of those clients. There were some discussions as to charge out rates at that time.
No expert report had been prepared prior to the appointment of the applicant to take over the conduct of the County Court proceedings, on behalf of those clients.
The overwhelming inference is that the clients had instructed the applicant to engage the respondent because of its prior involvement and familiarity with the issues in the trial.
Both the applicant and the respondent rely to some extent upon the discussions between the respondent and the Adelaide solicitors. Each appears to have proceeded upon assumptions as to the other’s understanding of discussions between the respondent and those previous solicitors. The applicant had assumed that the respondent was aware that the trial date had been fixed for February/March 2013 as opposed to it being a possible date; while the respondent had assumed that the applicant was aware that the respondent had been fully briefed on its task, had agreed its fees with the Adelaide solicitors, and required no clarification nor input from the applicant as to the terms of its engagement.
The respondent asserted before the Learned Magistrate that a retainer was entered into on or about 16 November 2012, and there was no need for any further contact.[11]
[11] Empirnall v Machon Paull (1988) 14 NSWLR 523.
It submitted that once it had been instructed to proceed with the work requested by the applicant, it was the applicant who was obliged to inform it of any time constraints, or any restriction as to the quantum of fees for the work.
The applicant asserted that there had been no concluded agreement to perform the work as there had been no agreement as to the method by which the respondent would be paid for its services. In addition it asserted that the respondent had not conveyed its acceptance of the applicant’s offer contained in the Letter of Instructions.[12] It submitted that after a reasonable time had elapsed, it was entitled to treat the respondent’s silence as a rejection of its request.
[12] Hall v Busst (1960) 104 CLR 206 at 222.
The applicant did not request an estimate of fees from the respondent. Mr ‘C’ did not give evidence at the trial, and it may be that the Learned Magistrate inferred that he had known of the fee discussion between the respondent and the Adelaide solicitors.
The difficulties caused by the dearth of contact between the applicant and the respondent, were exacerbated by the cessation of Mr ‘C’’s employment with the applicant on 14 December 2012. This was approximately one month after forwarding the Letter of Instructions to the respondent on 16 November 2012. The respondent was not informed of this event, nor whom it was that he should contact.
The fact remains that neither party contacted the other after the Letter of Instructions was sent. Had either made that contact, at the very least, the quantum of fees would have been significantly reduced. On one view it may be an unfair result if the respondent could not recover for the work it performed at the express request of the applicant. On the other it may be unfair for the applicant to be required to pay for a report, which was received by it months after the date of trial.
The Learned Magistrate explained that ‘neither the [respondent] nor the [applicant] had covered themselves in glory’.[13]
[13] Reasons for Judgment, 7/8/14 at [15].
If ever a dispute ought to have been resolved without recourse to litigation this was such a case.
The subject action
As I have noted the litigation raises extremely complex issues of law, including whether a claim for professional fees following upon an express request from a client, is one based in contract or restitution.[14]
[14] Ball: 'Work carried out in pursuance of Letter of Intent' (1993) 99 LQE 572; Carter: 'Contract Law in Australia' 6th ed [38-10] - [38-18]; Brenner v First Artist's Management Pty Ltd (1993) VR 221; British Steel Corp v Cleveland Bridge & Engineering (1984) 1 All ER 504; Lampson (Aust) v Fortescue Metals [2014] WASC 162; Mushroom Composters v IS & DE Robertson [2015] NSWCA 1; Andrew Shelton v Alpha Healthcare [2002] 5 VR 577; Elomax v Russell Kennedy [2009] VSC 615; Steele v Marshan [2012] NSWCA 141; and Integrated Computer Services v Digital Equipment [1988] BC 8801158.
It is appropriate to set out the nature of a Minor Civil Claim as; save for the Rules of Court in such an action, some of the evidence in the trial may not have been admissible.[15] In particular an affidavit of the applicant’s solicitor deposing to her experience and opinion, as to the steps leading to the formation of a retainer was, at the least, unhelpful.[16] In addition Mr Jorgensen, when giving evidence on behalf of the respondent, indulged in hearsay when asserting that discussions occurred between ‘Mr C’ and a member of the respondent’s staff.
·The nature of a minor civil action
[15] Contrast Magistrates Court Act, (1991), s 38(1).
[16] See Midland Bank v Hett, Stubbs and Kemp [1979] 1 ch 384; and Newman v Financial Wisdom Ltd [2004] VSC 216 at [165].
Section 38 of the Magistrates Court Act, details the provisions which are applicable to the trial, and any Review of a Minor Civil Action, as follows:
(1)(a)     The trial will take the form of an inquiry by the Court into the matters in        dispute between the parties rather than an adversarial contest between the parties;
(b)     the Court will itself elicit by inquiry from the parties and the witnesses, and by examination of evidentiary material produced to the Court, the issues in dispute and the facts necessary to decide those issues;
(c)     the Court may itself call and examine witnesses;
(d)     the parties are not bound by written pleadings;
(e)     the Court is not bound by the rules of evidence;
(f)     the Court must act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms.
(2) At or before the trial of a minor civil action, the Court should explore any possible avenues of achieving a negotiated settlement of the matters in dispute.
(3)     After giving judgment in a minor civil action, the Court—
(a)     should advise the unsuccessful party of his or her right to apply for review of the proceedings by the District Court; and
(b)     should give the successful party any advice or assistance as to the enforcement of the judgment that the Court considers appropriate in the circumstances; and
(c)     if there is a judgment debtor who is present, should proceed immediately to investigate his or her means of satisfying the judgment and to take any further action that appears appropriate in view of the results of that investigation.
(4)     The following provisions govern representation in minor civil actions:
(a)     representation of a party by a legal practitioner will not be permitted unless—
(i)      another party to the action is a legal practitioner; or
(ii)     all parties to the action agree; or
(iii) the Court is of the opinion that the party would be unfairly disadvantaged if not represented by a legal practitioner;
(ab) however, the Court may, in its discretion, permit representation of a party by a legal practitioner at the hearing of an interlocutory application;
(b)     if a party to the action is a body corporate, the Court must, if the party seeks to be represented by an officer or employee who is not a legal practitioner, permit such representation;
(c)     if a person is subrogated to the rights of a party, the Court will permit that person to appear in the proceedings on behalf of that party and to be represented in the same way as if that person were a party;
(d)     the Court will permit a party, or a person subrogated to the rights of a party, to be assisted by a person who is not a legal practitioner but only if that person is not acting for fee or reward.
(5)In a minor civil action costs for getting up the case for trial, or by way of counsel fees, will not be awarded unless all parties were represented by counsel, or the Court is of opinion that there are special circumstances justifying the award of such costs.
(6) The District Court (constituted of a single Judge) may, on the application of a party dissatisfied with a judgment given in a minor civil action, review the matter.
(7)     The following provisions apply to such a review by the District Court:
(a)     the right of a party to be represented by a legal practitioner at the review will be determined in accordance with subsection (4);
(b)     the Court may inform itself as it thinks fit and, in doing so, is not bound by the rules of evidence;
(c)     the Court may, if it thinks fit, re-hear evidence taken before the Magistrates Court;
(d)     in determining the matter, the Court may—
(i)      affirm the judgment; or
(ii) rescind the judgment and substitute a judgment that the Court considers appropriate; or
(iii) if the review arises from a default judgment or summary judgment, rescind the judgment and—
(A)     substitute a judgment that the Court considers appropriate;
or
(B) remit the matter to the Magistrates Court for hearing or further hearing;
(e)     in hearing and determining the review, the Court must act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms.
(8)     A decision of the District Court on a review is final and not subject to appeal.
(9) However, the District Court may reserve a question of law arising in a review for determination by the Full Court of the Supreme Court which may determine the question and make any consequential orders or directions appropriate to the circumstances of the case.

In Harradine v District Court of South Australia,[17] upon a Judicial Review, Blue J, detailed the legislative history of the Minor Civil Action, and explained that the role of the Court is that of an inquiry by the Magistrate rather than that of managing an adversarial contest between the parties.
[17] [2012] SASC 96 at [40]-[49].
The clear policy of the Act is to provide an efficient and economical means by which small claims can be determined in the Magistrates Court. His Honour noted that Parliament had devised this system in consequence of the increasing costs of litigation.
Accordingly some of the protections provided by legal practice in the general jurisdiction ‘may be sacrificed to the necessity of relating the cost to the amount of the claim’ in a Minor Civil Action.
The inquiry, in respect of a Minor Civil Action, is therefore to be conducted on a more informal basis with the Court acting according to equity, good conscience, and the substantial merits of the case without regard to technicalities. It must be a fair hearing by an unbiased tribunal; one which identifies and determines the ‘real’ issues between the parties; and one which ensures that all available evidence is presented to the Court.
The pleadings
As appears common in Minor Civil Actions the subject pleadings are not particularly helpful in indentifying the real issues in the trial.
The respondent’s claim for its fees was vaguely expressed as being for ‘monies’ owing by the [applicant] for professional services rendered up to 28 May 2013 ….’
The difficulties inherent in such a pleading have also been the subject of adverse judicial and academic comment.[18]
[18] See Steele v Marshan [2012] NSWSC at [35] and Lampson (Aust) Pty Ltd v Fortescue Metals Group Ltd [No3] [2014] WASC 162
It may encompass a claim based upon a specific retainer,[19] an implied retainer, - that is that the respondent would charge its usual rates;[20] a limited terms retainer;[21] a letter of intent involving a preliminary agreement.[22] In the event that there was no concluded agreement, it may alternatively encompass a claim in restitution arising from a request for services.[23]
[19] Mushroom Composters Pty Ltd v Robertson Pty Ltd [2015] NSWCA 1; BELL: 'work carried out in pursuance of letters of Intent - Contract or Restitution' (1983) LQR 572; Empirial Holdings v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523.
[20] Liebe v Molloy (1906) 4 CLR 347; Trollope & Colls Ltd v Aromic Power Construction [1963] 1 WLR 333; Angelopoulos v Sabatino (1995) 65 SASR 1; Abigroup Contractors v ABB Services [2004] NSWCA 181 at [32]; Wilkie v Scottish Aviation (1956) SC 198.
[21] R J Baker Nominees v Parsons Management [2009] WASC 206; Brambles Holdings v Bathhurst City Council (2001) 53 NSWLR 153, Abigroup Contractors Pty Ltd v ABB Services, supra at [34].
[22] Integrated Computer Services v Digital Equipment [1988] 5 BPR 11,100 Steel v Marshan [2012] NSWCA 141; British Steel Corporation v Cleveland Bridge & Engineering [1984] 1 All ER 504.
[23] Brenner v First Artists' Management (1993) 2 VR 221; Elomax Pty Ltd v Russell Kennedy [2009] VSC 615; and RJ Baker Nominees Pty Ltd v Parsons Management Group [2009] WASC 206; British Steel Corporation v Cleveland Bridge & Engineering [1984] ALL ER 504; Lumbers v W. Cook Builders (2008) HCA 27; and Lampson (Aust) v Fortescue Metals [2014] 162.
The respondent’s case at trial was that it, had been engaged by the applicant to undertake professional services forthwith and that it had completed those services in accordance with the terms of the specific request made of it
The applicant clearly assumed that the respondent’s case was solely in contract, and pleaded accordingly in its defence that the respondent had:
·not acknowledged receipt of the request to prepare a report. [24]
·not confirmed that it would prepare the report.
·not provided a quote for its services.
·not provided an engagement letter.
·not agreed on what terms the work would be undertaken. [25]
·failed to reach agreement on an essential term – namely the question of fees. [26]
·failed to provide the report prior to the date for trial.
[24] See Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 at [40].
[25] Brambles Holdings Ltd v Bathhurst City Council [2001] 53 NSWLR 153.
[26] Booker Industries Pty Ltd v Wilson Parking [1982] 149 CLR 600.
The applicant correctly submitted that as a matter of law a Court could not imply a term that a reasonable price be paid, in order to fill any gap as to the essential term as to price.[27] The applicant’s case was restricted to the submission that no money was owing by it. There was no submission by it that the quantum of the fees charged by the respondent was excessive. It follows that if the Court did conclude that there was a binding agreement, which agreement had not been breached by the respondent, then there was no dispute as to the quantum of the sum claimed by it.
[27] Hall v Busst (1960) 104 CLR 206 at 222.
The issues in the subject trial
The primary issue at trial was this vexed question as to whether the parties had entered into a valid and binding agreement for the provision of expert accounting services by the respondent.
It is trite that in order for there to be an enforceable contract, there must be certainty as to the fundamental matters, namely the identification of the parties, the subject matter of the contract, and indeed the price, or at least the method for calculating the price.[28]
[28] Mushroom Composters Pty Ltd v IS & DE Robertson Pty Ltd [2015] NSWCA 1 at [63]; Geemaz Management Pty Ltd v Geelong Motors [2013] VSC 571; ABC v XIVth Commonwealth Games (1988) 18 NSWLR 540; Hills Industries Ltd v Hiley & Others [2013] SADC 148; Humphris-Clark v Lazaridis (2010) NSWSC 318; Masters v Cameron (1954) 91 CLR 353; ACC Pty Ltd v Coles Group [2011] VSC 490.
The question is whether, objectively, from the proven facts, a reasonable person would have reached the conclusion that the parties intended to contract immediately in respect of the engagement of the respondent. In Electricity Generation Corporation v Woodside Energy,[29] and Bryne v Kendle[30] the High Court explained that this question derives from the objective theory of contractual obligation. The law is not concerned with the parties’ subjective intentions or their individual beliefs as to an agreement.[31]
[29] [2014] HCA 7.
[30] (2014) 218 CLR 415 at 461462.
[31] (2014) 218 CLR 415 at 461462.
In the event that there was such a valid and binding agreement, various subsidiary issues arise. They include the effect, if any, of the respondent’s admitted failure to comply with mandatory standards, prescribed by its professional association, with respect to documenting the terms of its agreement.[32]
[32] Apes 215m 305 and 315. (Aust Professional & Ethical Standards Board Standards).
Further what relevance, if any, to the terms of any retainer between the applicant and the respondent were the discussions between the respondent and the Adelaide solicitors who had previously been engaged by the applicant’s client; were those discussions were in some way incorporated in the alleged retainer?; Did the applicant and the respondent share a common understanding that the terms of engagement discussed between the respondent and those previous solicitors would be adopted by them?
Chronology and Evidence
In order to understand the parties’ submissions at trial, and the subtle variations in the submissions on this review, it is necessary to set out in some detail the background to the claim, and some of the evidence before the Learned Magistrate. There did not appear to be any issue of credit in the trial, but simply what inferences ought be drawn from the proved facts.
Chronology
·In August 2012 Mr Paul Jorgensen, who was a chartered accountant with the respondent, received instructions from a firm of solicitors in Adelaide who were then acting for clients who were defendants in proceedings issued in the Victorian County Court. Those instructions related to the preparation of an expert accounting report to be used in those proceedings.
·On 13 August 2012 Mr Jorgensen received a letter from those solicitors dated 9 August 2012 which enclosed a copy of the proceedings, including affidavits sworn by their client.
·Mr Jorgensen met with a senior associate at that firm of solicitors on two occasions and had a subsequent telephone discussion with a senior associate of that firm on 16 August 2012 with respect to charge-out rates.
·On 27 August 2012 those solicitors enclosed six lever arch folders and one ring bound folder of further documents to enable the report to be undertaken.
·On 6 September 2012, a record of the respondent dated 6 September 2012 noted that the trial was ‘in Feb/March 2013 – report due 14 September 2012 – discovery not yet resolved’.
·In fact, and, I infer that later that day, on 6 September 2012, the County Court of Victoria set the action down for trial to commence on 28 February 2013, with an estimate of eight to ten sitting days. It ordered that the other party file its expert report by 30 October 2012, and that the mutual client file its answering report by 13 November 2012.
·On 2 October 2012, those solicitors telephoned the respondent to inform it that they were no longer acting and that the applicant would take over the conduct of the action on behalf of their client.
·On or about 16 November 2012, Mr ‘C’, a solicitor employed by the applicant, telephoned Mr Jorgensen to ask whether he would be prepared to produce the report and provide expert evidence. Mr Jorgensen deposed that he spoke to him ‘about charge out rates’.[33] A staff member had spoken to Mr ‘C’ to discuss the contents of the Letter of Engagement.[34] A question arises whether the respondent had orally accepted the engagement. On the evidence of Mr Jorgensen, it did such that the applicant could not have been in doubt that it would undertake the preparation of the report.[35]
[33] Transcript, 17/7/14 at pp 5 - 7. In her Reasons at [6] the learned Magistrate did not refer to that evidence.
[34] Transcript, 17/7/14 at pp 5 - 6.
[35] Integrated Computer Services v Digital Equipment Corp (Aust) (1988) 5 BPR 11,100.
·By letter dated 16 November 2012 Mr ‘C’, requested that Mr Jorgensen prepare a report. As noted there was no mention by him of any timeframe for the preparation of the report, nor did he request an estimate of his fees.
·On 5 December 2012 orders were made in the County Court. Those orders obliged the other party to provide particulars of the ownership of assets by 21 December 2012, and for mutual expert reports to be filed and served by 30 January 2013. The respondent was not informed of these orders.
·On 14 December 2012, Mr ‘C’ ceased his employment with the applicant.
·No further contact occurred between the receipt of the letter dated 16 November 2012 and when the Victorian County Court action was called on for trial on 28 February 2013
·The action was settled by the parties. The applicant did not contact the respondent to advise of the settlement. The applicant’s fees and counsel fees were paid by their client, following the settlement of the proceedings, albeit on a discounted basis.[36]
·On 24 May 2013 Mr Jorgensen’s draft report was delivered to the applicant solicitors.
·On 28 May 2013, Mr Jorgensen forwarded his invoice for the work involved with the report. That invoice was calculated on a time sheet basis.[37]
·On 1 July 2013, the applicant, by letter, objected to the invoice and refused to pay it. Relevantly the author of that letter explained: ‘Mr ‘C’ and our firm’s usual practice is to arrange a quotation for these services, provide that quotation to our client for approval and then proceed with the expert report provided. This did not occur in this case … If our firm required you to provide the report we would have chased up a quote and the report itself so that it was well in time for the trial’.
·The respondent commenced the subject Minor Civil Action against the applicant on 26 November 2013.
·On 12 December 2013, the applicant filed its defence to the respondent’s claim.
[36] Ex D3 - Affidavit of Rebecca Mae Fahey.
[37] Transcript, 17/7/14, at p 7.
The evidence
The only witness to give oral evidence at the trial was Paul Jorgensen, the abovementioned chartered accountant in the respondent’s firm.
Mr Jorgensen explained that in August 2012, he had held two meetings with employees of that South Australian firm of solicitors who had initially been instructed by the applicant’s clients.
He had received from those solicitors a copy of the pleadings in the County Court proceedings and some volumes of discovered documents which had included accounts, income tax returns, receipts, and bank statements of that client.[38]
[38] Ex P1.
Mr Jorgensen was cross-examined about a note of a meeting with those solicitors on 6 September 2012. That note which had been prepared by another employee,[39] recorded the following:
Timeframe: Trial in Feb/March 2013.
Report due 14 September 2012. Discovery not yet resolved.
Cost estimate from [Paul Victor Jorgensen]; will wait to see what comes from accountant first.[40]
[39] Kimberly Bowden.
[40] Ex D1.
He said that on 2 October 2012, his firm had been informed by those other solicitors that they no longer acted for those clients and that the applicant would make contact with him in due course.[41]
[41] File note Ex D2.
He said that he had spoken to the solicitor, Mr ‘C’, in November 2012. He said that he spoke about charge out rates.[42] This conversation had occurred prior to the receipt of the Letter of Instructions dated 16 November 2012.
[42] Transcript 17/7/14 at p5.
He said that a staff member had spoken to Mr ‘C’ about the contents of the Letter of Instructions on 19 November 2012.
He said that at no time did Mr ‘C’ specify a date for completion of the report. He said that he did not expect any follow-up after 16 November 2013, because he had received all of the relevant documents to complete the report. He saw no need to contact those solicitors. He had sent the report[43] to the applicant on 24 May 2013.[44]
[43] Ex P3.
[44] Transcript 17/7/14 at p7.
He accepted that he had been informed by the previous solicitors of a trial date of February/March 2013, but that date had only been a ‘likely date’ and the actual date had not been confirmed by the applicant.
He acknowledged that he was bound professionally by the Accounting Professional and Ethical Standards Board (APES) Standards.[45]
[45] Ex D4.
He accepted that those standards required him to document and communicate the terms of engagement to the applicant as his client. It should include the expected timing of the work and the basis of the fees to be charged.
He acknowledged that ‘he appeared to have breached those standards’.[46]
[46] Transcript, 17/4/14 at p18.
When re-examined he said that the initial date for the report of 14 September 2012, had been overtaken by events. Indeed he had not even been instructed by the applicant until 16 November 2012. He repeated that no new date had been indicated.
The applicant did not call any witnesses to give oral evidence. In particular it did not call Mr ‘C’ to give evidence.
The applicant did however tender, without objection, an Affidavit of Rebecca Mae Fahey, a solicitor/director of the applicant, sworn on 14 July 2014.[47]
[47] Ex D3.
Ms Fahey deposed to correspondence which post dated the receipt of the report on 24 May 2013, and the respondent’s invoice on 28 May 2013. She explained that the applicant had received its fees from its client following the compromise of the proceedings in the County Court, although both that firm and its counsel had accepted a discounted payment.
She deposed to her experience as a solicitor. She purported to explain the steps required to appoint an expert. Ms Fahey deposed to an ‘invariable standard practice’, that an expert engaged to provide advice would be expected to, inter alia, make contact with the client to discuss the terms of the retainer; the full scope of the engagement, the crucial dates, accommodation, fees and the client’s budget.[48] She asserted that Mr ‘C’ had failed to comply with the applicant’s procedural requirements, when seeking an expert opinion.
[48] Ex D3 paragraph 20.
Such assertions did not assist the Learned Magistrate’s enquiry.[49]
[49] Hopcroft & Edwards v Edmunds [2013] SASCFC 38; Midland Bank v Hett, Stubbs & Kemp [1979] 1 ch 384; and Newman v Financial Wisdom Ltd (2004) VSC 216 at [165].
Although no objection was taken by the respondent as to the admissibility of that evidence, it is plain, as I have explained, that what the applicant had expected or what it thought as to whether there was a concluded agreement is at best unhelpful.[50] It simply explains why no one from the applicant had made contact with Mr Jorgensen after November 2012.
[50] Midland Bank v Hett, Stubbs and Kemp [1979] 1 Ch 384.
Ms Fahey deposed that the trial had been set down for 28 February 2013, and that this date had been known by the previous solicitors. She did not assert that the respondent had been aware of that specific date.
Counsel for the respondent submitted that the solicitor, Mr ‘C’, ought to have been called by the applicant. He did not specifically refer to the cases of Jones v Dunkel[51] or Blatch v Archer.[52] He did however submit that the evidence given by Mr Jorgensen that he had had a discussion with Mr ‘C’ as to fees and that they would be charged on a time basis,[53] had not been contradicted.
[51] (1959) 101 CLR 298.
[52] (1774) 1 Cowp 63 and see Edwards & Others v Legalese Pty Ltd [2012] SADC 95 at [290] - [301].
[53] Transcript, 17/7/14 at p32.
The Magistrate’s Reasons for Decision
Her Honour concluded that the ‘Letter of Instructions did not constitute an offer but was a clear instruction to the [respondent] to attend to the preparation of an expert report for use in the proceedings before the County Court of Melbourne’.[54]
[54] Reasons, 7/8/14, at p 5.
Her Honour noted that the clients for whom the applicant had requested the report had been common to both the applicant and the Adelaide solicitors.
She referred to Mr Jorgensen’s evidence that he had spoken to the Adelaide solicitors about his charge out rate, saying:
It is clear from the evidence that there had been prior discussions between the [respondent] and the [previous solicitors] concerning the preparation of the report … and importantly, a discussion between Mr Jorgensen and [those solicitors] concerning the charge out rates of Mr Jorgensen.
I infer that Her Honour had concluded that a method for charging had been agreed as between the respondent and the Adelaide solicitors, and that this must have been known by the applicant when it took over the conduct of the action on behalf of those same clients. Her Honour did refer to Mr Jorgensen’s evidence that he had spoken to Mr ‘C’ on 16 November 2012. She accepted his evidence that Mr ‘C’ had not mentioned any time frame nor requested an estimate of the likely fees.[55] Unfortunately Her Honour did not mention Mr Jorgensen’s evidence that he had told Mr ‘C’ of his charge out rate. She may not have thought that it was necessary to do so.
[55] Reasons for Judgment at [6].
She concluded ‘that a valid and enforceable contract existed between [the respondent] and [the applicant].
She determined that there was no breach of contract by the respondent. In particular, she concluded that the failure of Mr Jorgensen to comply with his professional standards did not affect the ‘legality and enforceability of the contract’. I infer that Her Honour had concluded that the parties had agreed that Mr Jorgensen would charge his fees on the charge out basis which he had discussed with the Adelaide solicitors and which was applicable to an accountant of his standing.

Accordingly Her Honour entered judgment for the respondent in the total sum of $13,156.90 inclusive of interest.
The application for Review
In its application the applicant asserts that:
1.That the Learned Magistrate erred in concluding that a contract came into existence on the basis for the Letter of Instructions dated 16 November 2012 because there was no acceptance by the respondent of the applicant’s offer contained in that letter.
2.That the Learned Magistrate erred in that she should have found that there was no agreement as to the respondent’s fees such that this essential contractual term was missing, and the alleged contract was incomplete.
3.That the Learned Magistrate erred in failing to find, that any contract between the parties had contained an implied term requiring the delivery of the report before the trial, which term had been fundamentally breached by the respondent.
4.That the Learned Magistrate erred in failing to find that it was an implied term of any contract that the respondent would comply with the terms of the Accounting Professional and Ethical Standards Board obligation as to documenting its retainer terms, and that the respondent had breached the implied term of the contract, thereby disentitling it from payment.
The nature of a Review
The nature of such a Review was also considered by Blue J in Harradine v District Court of South Australia,[56] Blue J in which his Honour said, at [53]:
1. The review is not in the nature of an appeal stricto sensu.
2.The review is not necessarily a hearing de novo in that the Court is entitled to have regard to the evidence adduced before a magistrate and “may” rehear that evidence.
3.The review is not necessarily an appeal by way of rehearing in that it is a “review” (not an “appeal”), the Court may inform itself as it thinks fit, the Court must act according to the substantial merits of the case and the Court may rehear evidence without being confined by the “fresh evidence” rules which apply to appeals by way of rehearing.
4.The Court can tailor the nature of the hearing to the circumstances. In a case where the review will not turn on findings of fact or credibility of witnesses, the Court might simply have regard to the evidence adduced before a magistrate and a magistrate’s findings of fact. In a case which does turn on disputed issues of fact or credibility, the Court might simply proceed to hear the evidence afresh.
5.If the District Court concludes that a magistrate made an error vitiating the judgment and had not made findings of fact necessary to determine the matter, it will be necessary for the Court itself to hear the evidence relevant to those findings of fact (as it does not have power to remit the matter for rehearing).
6.To the extent that the Court does itself hear evidence, it should proceed in a similar manner to that provided by section 38(1), namely adopting the form of an inquiry by the Court rather than an adversarial contest between the parties. This is because section 38(7) provides that the Court may inform itself as it thinks fit and also because it would be incongruous if the District Court were to adopt a radically different approach to the hearing to that required to be adopted by a magistrate at first instance given that there is no power of remitter.
[56] [2012] SASC 96.
Relevant principles of law
The applicable principles of law are well established.
·Claim in contract
I respectfully adopt the dicta of the Court of Appeal (NSW) in Mushroom Composters Pty Ltd v IS & DE Robertson Pty Ltd [2015] NSWCA 1 at [59]-[64] as follows:
First, in Australia the “objective” theory of contract has been accepted: see, most recently, Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; 251 CLR 640 at [35]. Consequently, in determining whether a binding contract has been concluded, the law is concerned not with the parties’ subjective intentions, but with “the outward manifestations of these intentions”: Taylor v Johnson [1983] HCA 5; 151 CLR 422 at 428 (Mason ACJ, Murphy and Deane JJ). Thus what matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe: Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; 218 CLR 451 at [22] (per curiam); Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52; 219 CLR 165 at [40]- [41] (per curiam). In a case where the ordinary process of offer and acceptance has taken place, the court inquires as to what a reasonable person would infer or deduce from observing the exchanges between the parties: NC Seddon, RA Bigwood and MP Ellinghaus, Cheshire& Fifoot Law of Contract (10th Aust ed 2012, LexisNexis Butterworths) at [3.4].
Secondly, it is not necessary, in determining whether a contract has been formed, to identify a precise offer or acceptance; nor is it necessary to identify a precise time at which an offer or acceptance can be identified: Ormwave Pty Limited v Smith [2007] NSWCA 210 at [68] and authorities cited at [68]-[75] (Beazley JA, Santow and Ipp JJA agreeing). The questions to be asked are:
“in all the circumstances can an agreement be inferred? Has mutual assent been manifested? What would a reasonable person in the position of the [plaintiff] and a reasonable person in the position of the defendant think as to whether there was a concluded bargain?”
Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; 53 NSWLR 153 at [81] (Heydon JA).
Thirdly, an agreement that is incomplete will not give rise to an enforceable contract. As was said in Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd [1982] HCA 53; 149 CLR 600 at 604 (Gibbs CJ, Murphy and Wilson JJ):
“It is established by authority, both ancient and modern, that the courts will not lend their aid to the enforcement of an incomplete agreement, being no more than an agreement of the parties to agree at some time in the future.”
An alleged contract will fail for incompleteness if, even though the parties have used clear language, a term which is regarded as essential as a matter of law has not been agreed: J W Carter, Carter on Contract (2014, LexisNexis) at [04-120]. The principle was stated by Viscount Dunedin in May and Butcher Ltd v The King [1934] 2 KB 17 n at 21:
“To be a good contract there must be a concluded bargain, and a concluded contract is one which settles everything that is necessary to be settled and leaves nothing to be settled by agreement between the parties. Of course it may leave something which still has to be determined, but then that determination must be a determination which does not depend upon the agreement between the parties.”
If the parties have not agreed on all essential terms, for example because they have left one such term to be settled by future agreement, the contract is incomplete no matter what the parties themselves may think: G. Scammell and Nephew Ltd v H.C. and J.G. Ouston [1941] AC 251 at 260 (Lord Russell of Killowen); O’Brien v Dawson [1942] HCA 8; 66 CLR 18 at 37 (Willams J, Rich J agreeing); Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] VicRp 55; [1994] 2 VR 106 at 170 (Tadgell J); Australian Securities and Investments Commission v Fortescue Metals Group Ltd [2011] FCAFC 19; 190 FCR 364 at [123]- [124] (Keane CJ); at [212] (Emmett J); at [223]-[227] (Finkelstein J) (an appeal to the High Court was allowed, but not on this point: Forrest v Australian Securities and Investments Commission [2012] HCA 39; 247 CLR 486). Moreover, if the parties have not reached consensus on the essential terms of the contract, there will be no binding contract notwithstanding that one of the parties has commenced work referable to the agreement: British Steel Corp v Cleveland Bridge and Engineering Co Ltd [1984] 1 All ER 504 at 510 (Robert Goff J).
Fourthly, for an agreement for the supply and sale of goods to constitute an enforceable contract, the parties must agree as to price, although they may leave the price to be determined by a third person or by an agreed mechanism. Thus, if a contract for the supply or sale of goods expressly provides for the price to be agreed between the parties, there is no concluded contract: May and Butcher Ltd v The King at 21; Booker Industries v Wilson Parking at 604 (a lease providing for a rental to be agreed does not constitute an enforceable agreement); cf Godecke v Kirwan [1973] HCA 38; 129 CLR 629 at 645 (Gibbs J).
In the subject case the essential terms of an express retainer are respectively the identification of the parties, the subject matter of the contract and the fees payable.[57] As to the latter the parties may leave the quantum to be determined by an agreed mechanism including fees set by a professional organisation.[58]
[57] Geemaz Management Pty Ltd v Geelong Motors (supra); ABC v XIVth Commonwealth Games (supra)
[58] See Mushroom Composters Pty Ltd v Robertson Pty Ltd [2015] NSWCA 1 at [64] and Wilkie v Scottish Aviation Limited [1956] SC 198.
In so far as the respondent’s claim was restricted to a claim in contract the Court must be satisfied not only that the parties had reached a consensus that was capable of forming a binding contract, including that it was sufficiently certain but that they did so with the ‘objective common intent that such consensus should constitute an immediately binding contract’. [59]
It is trite that a court will generally examine the context in which the alleged agreement was reached by the parties. Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd.[60]
In Australian Broadcasting Corporation v XIV Commonwealth,[61] Gleeson CJ said:
… it will normally be of importance that the court has an understanding of the commercial context in which the dispute arises, and a most significant feature of that context will relate to the subject which the parties regard, or would ordinarily be expected to regard, as matters to be covered by their contract. In some cases, such as transactions involving the sale and purchase of land, or leases, courts may properly feel well equipped to form a view on such matters without the need for much evidence. In many cases, however, of which the present is a good example, there is a need for evidence in one form or another as to what subjects would be regarded as requiring agreement between the parties. In this case the best evidence on that subject is to be found in the actual communications between the parties and, in particular, in the issues which they in fact addressed when they set about drafting their detailed contract.
To say that parties to negotiations have agreed upon sufficient matters to produce the consequence that, perhaps by reference to implied terms or by resort to considerations of reasonableness, a court will treat their consensus as sufficiently comprehensive to be legally binding, is not the same thing as to say that a court will decide that they intended to make a concluded bargain. Nevertheless, in the ordinary case, as a matter of fact and commonsense, other things being equal, the more numerous and significant the areas in respect of which the parties have failed to reach agreement, the slower a court will be to conclude that they had the requisite contractual intention. (my emphasis)
[59] Painaway Aust Pty Ltd v Jakl Group (2011) 249 FLR 1 at 51.
[60] [2004] 219 CLR 597 at 589 and see Electricity Generation Corporation v Woodside Energy [2014] HCA 7.
[61] (1988) 18 NSWLR 540
In Branir Pty Ltd v Owston Nominees (No2),[62] Allsop J said:
“(Contracts) can also arise when business people speak and act and order their affairs in a way without necessarily stopping for the formalities of dotting ‘i’s and crossing ‘t’s or where they think they have done so. ... Sometimes this failure occurs because, having discussed the commercial essentials and having put in place necessary structural matters, the parties go about their commercial business on the clear basis of some manifested mutual assent, without ensuring the exhaustive completeness of documentation. In such circumstances, even in the absence of clear offer and acceptance, and even without being able (as one can here) to identify precisely when a contract arose, if it can be stated with confidence that by a certain point the parties mutually assented to a sufficiently clear regime which must, in the circumstances, have been intended to be binding, the court will recognise the existence of a contract. ... The essential question in such cases is whether the parties' conduct, including what was said and not said and including the evident commercial aims and expectations of the parties, reveals an understanding or agreement or, as sometimes expressed, a manifestation of mutual assent, which bespeaks an intention to be legally bound to the essential elements of a contract. ...” (my emphasis)
[62] (2001) FCA 1833.
Finally where parties enter into an informal arrangement and there is a dispute as to ‘whether it has advanced to a concluded agreement it is proper to resolve the dispute by drawing inferences from the words and conduct of the parties’. Brice v Chambers [2014] QCA 310.
·Restitution
This alternative claim was not referred to directly before the Learned Magistrate. It was referred to obliquely on the review. A Court ought be cautious in rejecting a legal argument, especially in respect of a Minor Civil Action, on the basis that it was not raised below. I will accordingly set out the principles of such a claim.
Depending on the circumstances non contractual remedies in restitution, may be available whenever the contract itself is incomplete and therefore unenforceable.
In Vasco Investment Managers v Morgan Stanley,[63] Vickery J said, at [337] – [347]:
[63] [2014] VSC 455 at [337]-[347]
“The following principles apply to an action in quantum meruit, as derived from Pavey & Matthews Pty Ltd v Paul, Brenner v First Artist Management Pty Ltd, Lumbers v W Cook Builders Pty Ltd (in liq) and the cases cited therein.
Vasco’s claim under this head is a claim in restitution arising out of services performed.
The law may impose an obligation to make restitution on a quantum meruit basis, under what I will call the first class of case, where the plaintiff proves:
a.Actual or constructive acceptance of the benefit of the provider’s goods or services by the recipient;
b.The recipient of the goods or services should have realised that the provider expected to be paid; and
c.It would be unjust for the recipient to take the benefit of the goods or services provided without paying a reasonable sum for them.
A second class of case falling under the umbrella of a claim in quantum meruit is the long-established and well-recognised category of cases constituted by claims for work and labour done or money paid at the request of another.
In both classes of case, the law imposes an obligation independent of contract to pay a fair and reasonable sum for the goods or services, founded on the principles of restitution for unjust enrichment.
A third class of case giving rise to a claim described as quantum meruit is where goods or services are provided under an existing and enforceable contract which contains an express or implied term to pay a fair and reasonable sum for them, but such sum is not quantified. The action is directed to determining the fair and reasonable sum payable.
The claim in the present case falls into the first class of quantum meruit claims, although given the findings as to work done by Vasco at the request of Morgan Stanley; the claim may equally fall into the second class of case.
Under the first (and indeed the second) class of case, there is no requirement that a ‘benefit’ for the purpose of this rule of restitution in a claim for payment for services must be an economic benefit. Nor is there a requirement that the provider of the services show that any benefit has arisen as a direct consequence of a particular service rendered. In a claim based on restitution for the benefit of services provided, the question of whether the services constitute a benefit must be considered from the perspective of the recipient, and it is the services themselves which fall to be considered, not the end product of those services.
The cause of action seeking relief in quantum meruit in the first class of case (cf. the second class of case) does not call for specific proof of the making of an express or implied request by the recipient of the goods or services. Rather, the making of a request, which is a common factual component in these cases, may provide evidence of a benefit conferred on a recipient. It may also provide evidence of the acceptance of the services that were requested. Further, work done in conformity with a request will in most cases sufficiently satisfy the requirement, stemming from principals of unjust enrichment, that a recipient should not unjustly benefit from the services provided without paying reasonable compensation for them.
The provider of the services in the first class of case must prove that the services were not provided as a gift, or on the basis that payment should not be made unless a pre-condition has been met and that condition remains unfulfilled.
The court is not concerned with the actual state of mind of the parties when considering whether payment ought to have been contemplated in the first class of case. The appropriate enquiry is whether the recipient of the services, as a reasonable person, should have realised that a person in the position of the provider of the services would expect to be paid for them. Where the services are provided pursuant to a request made in a normal commercial relationship with a person whose business it is to provide those services for reward, this requirement will usually be satisfied.”
In Liebe v Molloy (1906) 4 CLR 347 the High Court had said:
An implied contract may be proved in various ways. When a man does work for another without any express contract relating to the matter, an implied contract arises to pay for it at fair value. Such an implication of course arises from an express request to do work made under such circumstances as to exclude the idea that the work was covered by a written contract. So it would also arise from the owner standing by and seeing the work done by the other party, knowing that the other party, in this case the contractor, was doing the work in the belief that he would be paid for it.
In Lampson (Australia) Pty Ltd v Fortescue Metals (No3),[64] it was suggested that Liebe’s case was essentially a claim in restitution.
[64] [2014] WASC 162.
It has long been recognised that a restitutionary claim may cause difficulties – indeed unfairness. In British Steel Corporation v Cleveland Bridge and Engineering Co Ltd[65] the plaintiff sought damages based in contract. The defendant counterclaimed for the failure to deliver goods on time. The Court held that there was no contract because no terms had been agreed as to price. It did however grant restitutionary relief to the plaintiff. It dismissed the counterclaim because ‘as there was no binding contract, there could be no enforceable obligation as to delivery times’. In other words the supplier was paid the going rate for his work, but the recipient had no protection from delay in the absence of contract.
[65] See Ball (1983) 99 LQR 572 at 577
The submissions on Review
·The applicant
Mr Evans submitted that on the facts as found by the Learned Magistrate, no contract was entered into. This was because there had been no acceptance by the respondent of the applicant’s offer until after the date for trial, and because there had been no agreement reached as to the fees for the work.
When referring to Australian Woollen Mills v The Commonwealth (1954) 92 CLR 424 and Booker Industries v Wilson Parking (1982) CLR 600, Mr Evans correctly submitted that if the parties are silent as to price, ‘there can be no implication of a term that a reasonable price is to be paid, so as to fill a gap’.

He submitted that as her Honour had made no reference to the evidence of Mr Jorgensen as to a conversation with Mr ‘C’ as to charge out rates, I ought accept that there was no discussion as to price.
In the alternative he submitted that if a contract had been entered into then it was fundamentally breached by the respondent by failing to deliver the report prior to the date fixed for trial. He referred to the professional standards obligations upon the respondent to document the scope of the work, the fees and completion dates. Mr Evans submitted that these obligations ought to be treated as implied terms of the agreement which had been breached by the respondent. He submitted that a quantum meruit is not available because no benefit was received by the applicant.
·The Respondent
Mr Thomas, submitted that the Court could not infer that Mr Jorgensen was aware of the trial date in Victoria.
He referred to the absence of Mr ‘C’ as a witness.
He submitted that in the context of this matter – the direction to a professional accountant to prepare an expert report did not require a formal letter of acceptance by the respondent.
This was a direction to perform a specific task which was accompanied by volumes of relevant documents. Mr Thomas submitted that in such professional engagements it is rare if ever that a ‘price’ will be agreed. The fixing of a ‘price’ is more appropriate to the sale of goods. By contrast a contract or retainer for professional services involved a method of payment namely a charge out rate.
He submitted that in the event no such rate was agreed the Court ought imply the ‘usual charge out rate’ of Mr Jorgensen.
In the alternative the court ought fix a sum upon a quantum meruit on a restitutionary basis for work done upon a specific request.
He submitted that on the evidence of Mr Jorgensen the Court ought be satisfied that a retainer was entered into and that the quantum of the invoice represented an agreed charge out rate.
Discussion and findings
It will deal, at least initially, with the respective submissions of the parties as to the contractual findings by the Learned Magistrate. It is plain that the trial proceeded on the basis that the claim was in contract. As I have explained, the alternative ‘claim’ in restitution did not seem to be directly raised before Her Honour, but manifested itself on the Review.
This was not a complex commercial arrangement between the parties. It involved a relatively simple task for the respondent to prepare an expert report based upon a very detailed letter. There had been previous discussions between the respondent and the Adelaide solicitors. The applicant had not requested an estimate of fees. It is appropriate that I should address each of the applicant’s grounds of Review:
·Was there any acceptance of the applicant’s ‘offer’
The terms of the Letter of Instructions dated 16 November 2012 objectively constituted an instruction by the applicant to proceed forthwith to prepare the expert report. It was not an invitation to treat. The question whether a formal acceptance is required is also well settled.
In Hendriks v McGeogh[66] the Court of Appeal (NSW) said at [10]:
A contract need not be made by formal offer and acceptance, or by an overt course of negotiation. Entry into a contract can be found in the conduct of the parties, in what they said and did towards each other. In Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 97326 McHugh JA, with whom Hope and Mahoney JJA agreed, said at 11,117 -
“It is often difficult to fit a commercial arrangement into the common lawyers' analysis of a contractual arrangement. Commercial discussions are often too unrefined to fit easily into the slots of "offer", "acceptance", "consideration" and "intention to create a legal relationship" which are the benchmarks of the contract of classical theory. In classical theory, the typical contract is a bilateral one and consists of an exchange of promises by means of an offer and its acceptance together with an intention to create a binding legal relationship. cf Atiyah, "Contracts, Promises and the Law of Obligations" 94 Law Quarterly Review at 194. A bilateral contract of this type exists independently of and indeed precedes what the parties do. Consequently, it is an error "to suppose that merely because something has been done then there is therefore some contract in existence which has thereby been executed”: Howard, “Contract, Reliance and Business Transactions" [1987] Journal of Business Law at 127. Nevertheless, a contract may be inferred from the acts and conduct of parties as well as or in the absence of their words: Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (Court of Appeal) (11/11/88) . The question in this class of case is whether the conduct of the parties viewed in the light of the surrounding circumstances shows a tacit understanding or agreement.”
[66] [2008] NSWCA 53.
In Toyota Motor Corporation v Ken Morgan Motors,[67] it was said that ‘there is a body of opinion that the formation of a contract need not be analysed by reference to offer and acceptance … and the concept of offer and acceptance is at best an aid to analysis of a contract’.
[67] (1994) 2 VR 106.
In Empirnall Holdings v Machon Paull[68] the Court of Appeal (NSW) said that:
generally a silent acceptance of an offer is insufficient to create a contract; and that after a reasonable time has elapsed, silence ‘is seen as a rejection and not an acceptance of an offer … Nevertheless communication of an acceptance is not always necessary. The offeror will be bound if he dispenses with the need to communicate the acceptance … the silence of an offeree in conjunction with other circumstances may indicate that he has accepted the offer. If he fails to communicate rejection of the offer his silence will be sufficient to form the contract. (my emphasis)
The applicant, through Mr ‘C’ did not ask for an estimate of fees. I accept that Mr Jorgensen did tell Mr ‘C’ about his charge out rate, in November 2012. There was nothing further to agree. The result of the conversation was that Mr ‘C’ would send the Letter of Instructions. The letter dated 16 November 2012 was sent by him. Given the circumstances, including Mr Jorgensen’s previous engagement by the Adelaide solicitors, there was no need for a formal acceptance. The final paragraph of the Letter of Instructions, to which I have referred makes it clear that Mr ‘C’ was not seeking any acceptance of his request. It had gone beyond that. He anticipated, indeed expected, the report to be prepared and sent to him. Accordingly I find that Mr ‘C’ had dispensed with the need for an acceptance to be communicated.
I have reached this conclusion because of the discussion which occurred at or about the time of the Letter of Instructions; the terms of that letter; the conduct of Mr ‘C’ in subsequently sending the Letter of Instructions and indeed his silence thereafter.
Conclusion
I am satisfied that the applicant’s ‘offer’ was orally accepted. That is why the voluminous material was sent by Mr ‘C’. In any event, by the very terms of the Letter of Instructions, Mr ‘C’ waived the requirement for a formal acceptance.
·Was there a discussion as to the method of charging as between Mr Jorgensen and Mr ‘C’?
In her Reasons the Learned Magistrate referred only to the discussions between Mr Jorgensen and the previous solicitor. Given the background, the fact that the applicant had taken over the file from the Adelaide solicitors for the same client; and the applicant had contacted the same accountant, Mr Jorgensen, Her Honour may have inferred that the basis for his fees had been agreed by the applicant. Alternatively Her Honour may have relied upon the case law to the effect that if there was no specific agreement as to an hourly rate, then the rate of remuneration commonly accepted in the accounting profession ought be applied, having regard to Mr Jorgensen’s experience, and the difficulty of the task See Brenner v First Artists’ Management Pty Ltd.[69]
I do not however need to discuss those matters any further. The evidence of Mr Jorgensen that he had also spoken to Mr ‘C’ in November 2012 about his charge out rates was uncontested.[70] I readily accept that that conversation must be shown to constitute an agreement rather than a mere discussion.
[68] (1988) 14 NSWLR 523, at 534.
[69] [1993] 2 VR 221 at 263.
[70] Transcript, 17/4/14 at pgs 33 - 34.
Mr Jorgensen was not cross-examined about that evidence. Mr ‘C’ was not called as a witness. One would have expected him to be called to give evidence as to his recollection of the engagement of Mr Jorgensen.
In Jones v Dunkel,[71] the High Court said that the unexplained failure by a party to call witnesses or to tender documents may – not must - in appropriate circumstances, where it is natural for the particular party to call such evidence, lead to an inference that the uncalled evidence would not have assisted that parties case. The failure to call a witness can allow evidence which might have been contradicted by such a witness to be more readily accepted. However as Heydon JD: Cross on Evidence (8^th edition) said at [1215]:
The rule cannot be employed to fill gaps in the evidence or to convert conjecture and suspicion into inference. Nor does the rule prevent any inference favourable to the party who has failed to call the witness from being drawn. Other evidence may justify the drawing of the inference.
[71] (1959) 101 CLR 298.
What a party is required to explain or contradict depends on the issues in the case as thrown up in the pleadings and by the course of evidence in the case. The rule in each case must also be considered in light of the nature of a Minor Civil Claim as already discussed, and the policy of reducing costs.
The applicant submitted that Mr ‘C’ was no longer in the applicant’s employ, and therefore no inference ought be drawn against it for its failure to call Mr ‘C’. I accept that submission, and I will not draw a Jones v Dunkel inference against the applicant. However the difficulty for the applicant is that even without such an inference, the evidence of Mr Jorgensen was, as I have found, uncontested.
Her Honour made no mention of it, nor any finding at all about it. On one view there was no need to do so. However there was no proper basis to exclude that evidence despite its somewhat brief nature. It was open to the Court to have held that, independent of the discussions with the Adelaide solicitors, there was an agreement as to the method of charging, reached in that telephone call between Mr ‘C’ and Mr Jorgensen. The evidence was unchallenged. I find that there was such a discussion amounting to an agreement as between Mr Jorgensen and Mr ‘C’ on or about 16 November 2012, as to his method of charging.
·Was there an agreement as to price such that there was a concluded contract?
In the subject case, as I have found, Mr Jorgensen had discussed with Mr ‘C’ the manner in which his fees would be calculated, namely his charge out rate.
I accept the submissions of Mr Thomas that it is uncommon for professional retainers to specify an exact “price”. Accordingly the fees for such retainers are fixed by reference to a method of calculation.
In Wilkie v Scottish Aviation Ltd[72] it was said that:
If a person employs a professional man to perform some service and makes no inquiry as to the basis on which the professional man is to be remunerated, it is not unreasonable for a court to hold that he shall pay for the services on the usual and customary basis.
[72] [1956] S.C. 198
The circumstances in the subject case were most unusual. The applicant had taken over the file from the Adelaide solicitors. It is obvious that the ultimate clients had instructed the Adelaide solicitors to engage Mr Jorgensen. It would appear that Her Honour had inferred that Mr ‘C’ knew of that arrangement and that his client had approved Mr Jorgensen’s method of charging.
I do not need to suppress a final view as to whether such an inference was open to Her Honour. In any event, as I have found, Mr Jorgensen informed Mr ‘C’ of his charge out rate on or about 16 November 2012. Mr ‘C’ did not take issue with that rate. He could hardly do so given the history of the previous involvement of the Adelaide solicitors. I find that an agreement was reached as to the method of charging the respondent’s fees. I repeat that there was no other dispute as to quantum.
·The relevance of the mandatory Professional Standards of the Institute of Chartered Accountants
On the applicant’s case this was a vital issue. Had Mr Jorgensen complied with the standards not only would the quantum of fees have been documented but the time for the delivery of the report would have been discussed.
The Learned Magistrate, with respect, correctly held that the respondent’s failure to comply with those professional standards did not prevent a contract from coming into existence.
While there is significant case law which details the consequences that can flow from non-compliance with statutory requirements they do not apply to such standards. Such a standard is not legally binding. GEC Marconi Systems Pty Ltd v BHP Information Technology, supra, at [216], Reed v Peridis[73] and Chicco v City of Woodville.[74]
Further there is no basis upon which the standards ought be implied term on the facts of this case. BP Refinery (Westernport) v Hasting Shire Council.[75] See also Steele v Mashan, supra. While a breach is undoubtedly relevant to any disciplinary function and reflects poorly on the respondent, it is, on the subject facts, of no relevance to the subject retainer.
Accordingly I do not accept that compliance with the Professional Standards was an implied term of any retainer as between the applicant and the respondent.
·Was there a fundamental breach of the retainer by the failure of the respondent to deliver the report on time?
[73] [2005] SASC 136.
[74] (1989) 150 LSJS 89.
[75] (1977) 180 CLR 266.
The applicant submits that the failure of the respondent to deliver the report before 28 February 2013 constituted a fundamental breach of contract, such that it was entitled to reject the report, and that the respondent ceased to be entitled to its fees.
The force of that submission is dependent upon whether the respondent was aware that the Country Court trial date had been fixed.
The evidence established that the trial date was fixed for 28 February 2013, and that the former solicitors were aware of that date. It also establishes that in September 2012 the respondent had been told by the former solicitors that the trial was likely to occur in February or March 2013.
As the chronology makes clear, only the applicant was aware of the status of the County Court proceedings. It knew that Mr ‘C’ was no longer employed by it. It knew of the altered dates for the exchange of expert reports. It knew of the specific date for the trial. It knew whether any further documents had been discovered and which may have impacted upon the preparation of an expert report. It knew whether the action may be capable of compromise. It conveyed none of this to the respondent. It may have hoped that that there was no need for a report following procedural hearings in December 2012. It did not even inform the respondent that the proceedings had been compromised.
Of course the respondent is in the difficult position of on the one hand, relying on the discussions as to price with the Adelaide solicitors to establish an agreement as to fees, yet on the other hand disregarding the earlier discussions as to a prospective date for trial in February or March 2013. The fact is that while one may infer an agreement as to fees from those discussions; the trial date was not fixed. In my opinion, it was the applicant which was obliged to inform Mr Jorgensen of the date of completion of the report.
I am satisfied that the respondent was not informed that a trial date had been fixed. There was no reference in the Letter of Instructions as to such a date nor was there a reference to a date for the completion of the report.
With the benefit of hindsight the respondent ought to have maintained contact with the applicant. As Her Honour found neither party covered itself in glory.
However on any view the applicant ought to have informed the respondent of those two dates. I repeat that it alone knew when it was that the report was required to as to comply with the above mentioned order of the County Court.
I infer that by later in December 2012, the applicant had decided that it was no longer needed. It is noteworthy that in the applicant’s letter of 1 July 2013 it said that ‘if our firm required you to provide the report we would have chased up a quote and the report itself so that it was well in time for the trial’.
Different minds may reasonably reach different opinions as to the delay in this case. It cannot be said, in my opinion, that Her Honour erred in finding that the delay was not a fundamental breach nor any breach at all.
While the report which arrived on 24 May 2013 was, in fact, of no benefit to the applicant because of the events which had intervened, it was none the less a report which complied with the request of the applicant. Brenner v First Artists’ Management Pty Ltd;[76] and Independent Grocers Co-operative Ltd v Noble Lowndes Superannuation Consultants.[77] See Adamson v Ede.[78]
[76] [1993] 2 VR 221
[77] (1993) 60 SASR 525.
[78] (2008) NSWSC 767 at [54].
While these facts are regrettable, I conclude that the respondent did not breach the terms of the retainer by forwarding the report on 24 May 2013.
In the subject case the respondent was retained to prepare the expert report, and it did that work. That was the finding made by the Magistrate, and upon a review of the evidence at the trial, I have reached the same conclusion.
In my opinion there was a concluded and enforceable retainer. Accordingly I do not need to consider whether non contractual remedies may have been available to the respondent had the contract been incomplete and unenforceable.[79]
[79] Mushroom Composters, supra, at [63].
As a matter of completeness however it is apt to set out the dicta of Beech J in R J Baker Nominees v Parsons Management Group [2009] WASC 206, as to non contractual services performed pursuant to a request.
The Court said at [151]-[160]:
Claims in restitution are not determined by reference to subjective evaluation of what is fair or unconscionable. There is, as four Justices of the High Court said in Lumbers v W Cook Builders Pty Ltd [2008] HCA 27, a long-established and well recognised category of cases constituted by claims for work and labour done … if party A requests party B to provide services in circumstances, where, objectively, B expects to be paid for his services, then A will be obliged to pay a reasonable remuneration to B for the services. Accordingly if B did whatever work it did at A’s request then its claim for a reasonable price for the work would fall neatly within long-established principles.
I do not need to express a view as to whether there was a presumed benefit to the applicant notwithstanding that the report was not received until well after the action had settled. See Adamson v Ede [2008] NSWSC 767 at [54].
In my opinion the applicant had no defence to the respondent’s claim in contract. Both parties must share the blame for what occurred. In my opinion this review ought not to have been pursued. The remedy, if any, was one to be obtained in disciplinary proceedings.
Accordingly, pursuant to s 38(7)(d) of the Act, I affirm the judgment and orders of the Learned Magistrate. The Application for Review is accordingly dismissed.
Costs
Pursuant to Rule 6 DCR 279A of the Rules of Court this Court has a general discretion to make an order for the costs of the Application for Review. I do note that the philosophy of Parliament embodied in s 38(5) of the Act is that costs ought not be awarded in Minor Civil Actions unless there are special circumstances justifying an award of costs.

In the subject case, both parties were represented by counsel. This was the consequence of the applicant being a firm of solicitors.
Those costs however ought be for a fixed sum which reflects the principles expressed in the Act.
I have no doubt that each party would have incurred much larger costs than I propose to award.
In my opinion the applicant cannot resist an order for costs.
I order that the applicant pay to the respondent costs in the sum of $1,400.
Formal orders
The formal orders of the Court subject to the question of costs are:
1.   That the decision of the Learned Magistrate is affirmed.
2.   That the Application for Review is dismissed.
3.   That the applicant pay to the respondent its costs fixed in the sum of $1,400.