Smits v Roach

The appeal in *Smits v Roach* concerned claims arising from retainer agreements and a settlement agreement between the appellants, Smits Leslie, and the respondents, Mr and Mrs Roach and the Roach companies. The appellants sought damages and specific performance based on these agreements. A significant issue at first instance involved an application by the appellants for the trial judge, McClellan J, to disqualify himself due to an undisclosed conflict of interest concerning his brother's partnership at a firm involved in related proceedings. The judge refused this application and subsequently made orders dismissing the proceedings and awarding costs against the appellants.

The legal issues before the appellate court included whether the trial judge erred in finding the retainer and settlement agreements illegal and unenforceable, particularly in light of the *Legal Profession Act 1987*. The court was also required to determine if the appellants were precluded from recovering remuneration on a quantum meruit basis, if the settlement agreement was valid under the *Corporations Law*, and whether the trial judge had erred in finding that the appellants had repudiated the settlement agreement and that this repudiation had been accepted by the respondents. Finally, the court had to consider whether the trial judge should have disqualified himself and whether the costs orders made were appropriate.

The appellate court allowed the appeal, setting aside the orders made by McClellan J. The court found that the trial judge had erred in his findings regarding the enforceability of the agreements and the appellants' entitlement to recovery. Specifically, the court determined that the agreements were not wholly illegal and that the appellants were entitled to recover reasonable remuneration for services rendered. The court also found that the respondents had not accepted a repudiation of the settlement agreement by the appellants. The court concluded that the trial judge should have disqualified himself.

In lieu of the original orders, the appellate court dismissed the proceedings against Mr and Mrs Roach. The court ordered the Roach companies to provide short minutes for specific performance of the settlement agreement, referred to as the "Ten Point Plan." The appellants were ordered to pay Mr and Mrs Roach's costs of the proceedings and the appeal, while the Roach companies were to pay half of the appellants' costs of the proceedings before McClellan J and the appeal, with a potential certificate under the *Suitors' Fund Act 1951* for the appeal costs.