Stevenson v Zafra Pty Ltd
[2021] WASCA 181
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: STEVENSON -v- ZAFRA PTY LTD [2021] WASCA 181
CORAM: BUSS P
MURPHY JA
HILL J
HEARD: 26 AUGUST 2021
DELIVERED : 13 OCTOBER 2021
FILE NO/S: CACV 62 of 2020
BETWEEN: CANDICE MARGARET STEVENSON
Appellant
AND
ZAFRA PTY LTD
First Respondent
WILSON & ATKINSON PTY LTD
Second Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: MASTER SANDERSON
Citation: STEVENSON -v- ZAFRA PTY LTD [2020] WASC 160
File Number : CIV 3027 of 2019
Catchwords:
Legal practitioners - Solicitors - Costs agreements - Fiduciary duty of solicitors - Whether costs agreements 'fair' - Whether costs agreements 'reasonable' - Proper construction of s 288 of the Legal Profession Act 2008 (WA) - Whether non‑disclosures by solicitors under s 260 of the Legal Profession Act - Whether failure to explain that charging in minimum six‑minute units benefited the law practice made the costs agreements not fair - Where solicitor acted in proceedings in the Federal Court - Alleged failure to disclose that there was no applicable costs determination in that regard - Whether such failure to disclose rendered costs agreements not fair or not reasonable
Legislation:
Federal Court of Australia Act 1976 (Cth), s 23
Legal Profession Act 2008 (WA), s 260, s 271, s 275, s 288, s 301, s 302, s 303
Legal Profession Regulations 2009 (WA), reg 80(1)
Result:
Appeal dismissed
Category: A
Representation:
Counsel:
| Appellant | : | D J Garnsworthy |
| First Respondent | : | P G McGowan |
| Second Respondent | : | P G McGowan |
Solicitors:
| Appellant | : | David Garnsworthy |
| First Respondent | : | Zafra Legal |
| Second Respondent | : | Zafra Legal |
Case(s) referred to in decision(s):
Alman v Macdonald Rudder (a firm) [2001] WASC 65
Alman v Macdonald Rudder (a firm) [2001] WASCA 375
Australian Securities and Investments Commission v Citigroup Global Markets Australia Pty Ltd (No 4) [2007] FCA 963; (2007) 160 FCR 35
Batterham v Goldberg [2014] FCAFC 136; (2014) 226 FCR 166
Bear v Waxman [1912] VLR 292
BGM v Australasian Lawyers Group Pty Ltd t/as Butlers Barristers & Solicitors [2014] WASC 290
Breen v Williams [1996] HCA 57; (1996) 186 CLR 71
Brown v Talbot & Oliver (1993) 9 WAR 70
CCOM Pty Ltd v Jiejing Pty Ltd (Unreported, Federal Court, 10 February 1994)
Cerini v McLeods (a firm) [2004] WASC 45
Chan v Batemans [2009] WASC 177
Clare v Joseph [1907] 2 KB 369
Computer Accounting & Tax Pty Ltd v Bowen Buchbinder Vilensky [2009] WASC 171
De Mol v WHL Legal Pty Ltd [2017] WASC 354
Duckworth v Chopra [2001] WASC 146
Frigger v Madgwicks [2018] VSC 281
Frigger v Murfett Legal Pty Ltd [2012] WASC 447
Frigger v Shepherd [2014] WASC 477
Groeneveld Australia Pty Ltd v Nolten (No 3) [2010] VSC 533; (2010) 80 ACSR 562
Harrison v Hocking [2000] WASC 188
House v The King [1936] HCA 40; (1936) 55 CLR 499
In Re Stuart [1893] 2 QB 201
Johnson Tiles Pty Ltd v Esso Australia Ltd [1999] FCA 1363; (1999) 94 FCR 167
Law Society of New South Wales v Foreman (1994) 34 NSWLR 408
Lewis Blyth & Hooper (a firm) v Smith [2015] WASCA 47; (2015) 48 WAR 467
Maguire v Makaronis [1997] HCA 23; (1997) 188 CLR 449
McNamara Business & Property Law v Kasmeridis [2007] SASC 90; (2007) 97 SASR 129
Pilmer v Duke Group Ltd (in liq) [2001] HCA 31; (2001) 207 CLR 165
Re Weedman (1988) 83 FCR 366
Smith v Lewis Blyth & Hooper [2013] WASC 408
Stevenson v Zafra Pty Ltd [2020] WASC 160
Youyang Pty Ltd v Minter Ellison Morris Fletcher [2003] HCA 15; (2003) 212 CLR 484
Table of contents
Introduction
Background
October 2015 - injunction proceedings
28 October 2015 - Wilson Costs Agreement
4 November 2015 - commencement of main proceedings
10 November 2015 - 17 December 2015
January - April 2016
21 - 28 April 2016 - transfer of file to Zafra
June 2016
1 - 10 July 2016 and the Zafra Costs Agreement
11 July 2016 - first day of trial and settlement of main proceedings
The fees invoiced to Mrs Stevenson
13 July 2016
August 2016
October 2016
December 2016
Part payment of outstanding accounts
March 2017
September - October 2017
December 2018
February - March 2019
September 2019 - Zafra commences debt recovery action
September 2019 - November 2019
The Costs Agreements
The Wilson Costs Agreement
The Zafra Costs Agreement
Fact Sheet - Legal Costs - Your Right to Know
The evidence in the primary proceedings
Mrs Stevenson's affidavit of 12 December 2019
Mr Leslie's affidavit of 13 February 2020
Mrs Stevenson's affidavit of 3 March 2020
Contested questions of evidence
The parties' submissions in the primary proceedings
Mrs Stevenson's submissions
Mrs Stevenson's submissions dated 26 December 2019
The respondents' submissions
Mrs Stevenson's submissions in reply and supplementary submissions
Legislative provisions
The LP Act
LP Regulations
The master's decision
The Wilson Costs Agreement
The Zafra Costs Agreement
Grounds of appeal and parties' submissions
Ground 1
Mrs Stevenson's submissions
Respondents' submissions
Ground 2
Ground 3
Mrs Stevenson's submissions
Respondents' submissions
Ground 4
Mrs Stevenson's submissions
Respondents' submissions
Ground 5
Mrs Stevenson's submissions
Respondents' submissions
Ground 6
Ground 6
Ground 6(a)
Mrs Stevenson's submissions - ground 6
Mrs Stevenson's submissions - ground 6(a)
Respondents' submissions - ground 6
Respondents' submissions - ground 6(a)
Ground 7
Mrs Stevenson's submissions
Respondents' submissions
Respondents' notice of contention
Notice of contention - contention 1
Respondents' submissions
Mrs Stevenson's submissions
Notice of contention - contention 2
Respondents' submissions
Mrs Stevenson's submissions
Legal principles
Appellate review
A solicitor's fiduciary position
Section 288 - principles
Disposition
Ground 1
Ground 2
Ground 3
Ground 4
Ground 5
Ground 6
Ground 6(a)
Ground 7
Disposition of the appeal
Table of Disclosures
JUDGMENT OF THE COURT:
Introduction
This is an appeal against a decision of the master made on the papers dismissing an application by the appellant (Mrs Stevenson) to set aside two costs agreement pursuant to s 288(2) of the Legal Profession Act 2008 (WA) (LP Act). The first costs agreement was between Mrs Stevenson and the second respondent, Wilson & Atkinson Pty Ltd (Wilson). The second costs agreement was between Mrs Stevenson and the first respondent, Zafra Pty Ltd (Zafra). The master published written reasons for the decision: Stevenson v Zafra Pty Ltd[1] (primary decision).
[1] Stevenson v Zafra Pty Ltd [2020] WASC 160.
In general terms, in this appeal Mrs Stevenson alleged (amongst other things) that the learned master erred in not finding that the costs agreements were not fair or not reasonable, when he should have found that:
1.They were not fair in their formation because they were based on a minimum of six‑minute units of time‑costing, without an explanation that this method of charging favoured the law practice.
2.They were not fair or not reasonable because the costs agreements concerned Federal Court proceedings, for which there was no costs determination within the meaning of s 275 of the LP Act, and neither this fact nor the prospect that, absent a binding costs agreement, the Supreme Court in assessing costs would treat the Federal Court scale of costs as a 'guide', were disclosed to Mrs Stevenson before entering into the costs agreements.
3.Certain other terms of the agreements and/or other non‑disclosures with respect to the agreements rendered them not fair or not reasonable.
For the reasons explained more fully at [247] ‑ [307] below, the appeal should be dismissed. Amongst other things:
1.The solicitors had disclosed the proposed terms and effect of charging in six‑minute minimum units sufficiently such that, in all the particular circumstances of this case, the costs agreements were not unfair in their formation on this account.
2.Neither the failure by the solicitors to inform Mrs Stevenson that there was no applicable costs determination under s 275 of the LP Act in relation to the Federal Court proceedings, nor the failure to inform her of the prospect that in any assessment by the Supreme Court, the Federal Court scale would be used as a 'guide', were matters which, in the particular circumstances of this case, rendered the costs agreements not fair or not reasonable.
3.None of the other matters alleged by Mrs Stevenson demonstrates error by the master or provides grounds upon which to conclude that the costs agreements were not fair or not reasonable.
4.Even if the matters referred to in points 1 and 2 above were regarded as rendering the costs agreements not fair or not reasonable, in the particular circumstances of this case, it would not serve the interests of justice to exercise the power to set them aside pursuant to s 288(2) of the LP Act.
Background[2]
[2] The following matters appeared to be uncontroversial on the evidence before the master.
Between August 2012 and October 2015, Mrs Stevenson was employed by Atrum Coal NL (Atrum) as group accountant. As group accountant to a public listed entity, her role included the preparation of consolidated accounts for the Chief Financial Officer, and dealing with Australian Stock Exchange requirements.[3]
[3] Affidavit of Mrs Stevenson sworn 12 December 2019, par 4; GB 2.
Two directors of Atrum established a company called BC Copper NL (which later became BC Anthracite NL (BCA NL)) for the purpose of copper mining exploration in British Columbia, Canada. Mrs Stevenson was the director and secretary of BCA NL from 11 November 2014 to 25 October 2015.[4]
[4] Affidavit of Mrs Stevenson sworn 12 December 2019, pars 5 - 7; GB 2.
Through her company, Mandalay Mining Pty Ltd, in October 2014, Mrs Stevenson subscribed for 1,500 shares in BCA NL.[5]
[5] Affidavit of Mrs Stevenson sworn 12 December 2019, pars 8 - 9; GB 3.
October 2015 - injunction proceedings
In late October 2015, Atrum brought proceedings in the Federal Court against Mrs Stevenson and others (including one of its directors, Mr Moran, and BCA NL) seeking injunctive relief and Anton Piller Orders (injunction proceedings).[6]
On 27 October 2015, Jagot J made orders which included extending the operation of an interim injunction granted on 21 October 2015 restraining Mrs Stevenson and the other respondents from 'altering or deleting any Atrum Document or any Relevant Document in their respective custody, possession or control' and 'destroying or otherwise taking any positive step likely to interfere, other than incidentally, with the ability to retrieve data from any Storage Medium in their respective custody, possession or control'.[7]
On or about 26 October 2015, Mrs Stevenson and the other respondents in the injunction proceedings sought legal advice from Bennett + Co. Mrs Stevenson did not enter into any costs agreement with Bennett + Co and ultimately resolved to get advice independently of the other respondents.[8]
In October 2015, Mrs Stevenson requested Mr Shayne Leslie of Wilson to act for her.[9]
28 October 2015 - Wilson Costs Agreement
[6] Affidavit of Mrs Stevenson sworn 12 December 2019, par 10; GB 3.
[7] Affidavit of Mr Leslie sworn 13 February 2020, SGL7; GB 271.
[8] Affidavit of Mrs Stevenson sworn 12 December 2019, pars 14 - 15; GB 3.
[9] Affidavit of Mr Leslie sworn 13 February 2020, par 5; GB 121.
On 28 October 2015, Mrs Stevenson was sent by email from Mr Leslie, relevantly:[10]
1.orders of Jagot J made on 27 October 2015 in the injunction proceedings;
2.an explanatory letter to Mrs Stevenson dated 28 October 2015 in relation to the orders of the Federal Court in the injunction proceedings, which included reference to the costs agreement and which stated 'please read it carefully and obtain independent legal advice as appropriate';
3.a proposed costs agreement including a document titled 'Schedule of fees and expenses (Effective 1 July 2014)', and a document titled 'Our terms of engagement (Effective 1 July 2014)'; and
4.the Legal Practitioners (Supreme Court) (Contentious Business) Report 2012.
[10] Affidavit of Mr Leslie sworn 13 February 2020, SGL7; GB 270 - 303.
The proposed costs agreement provided that the scope of work comprised (1) initial provision of advice in relation to the claim by Atrum, and (2) subsequently, if required, defending Federal Court proceedings. The estimate of legal costs and disbursements comprised two parts, 'initial costs' and 'subsequent costs'. The initial costs were estimated at $5,000 - $10,000 and the subsequent costs were 'to be advised'.[11]
[11] Affidavit of Mr Leslie sworn 13 February 2020, SGL7; GB 279 - 290.
The proposed costs agreement concluded with the sentence:[12]
Please do not hesitate to discuss with us any aspect of the contents of this costs agreement.
[12] Affidavit of Mrs Stevenson sworn 12 December 2019, CMS1; GB 18.
Mrs Stevenson signed the proposed costs agreement on 4 November 2015 (Wilson Costs Agreement). Above Mrs Stevenson's signature there appeared the following:[13]
By signing this letter I acknowledge that I have received a copy of it and that I have read, understood and accepted its contents, including the schedule of fees and expenses and the terms of engagement.
[13] Affidavit of Mrs Stevenson sworn 12 December 2019, CMS1; GB 18.
The terms of the Wilson Costs Agreement are set out in more detail in [94] ‑ [111] below.
4 November 2015 - commencement of main proceedings
On 4 November 2015, Atrum and an associated company (Atrum Companies) commenced proceedings in the Federal Court against, relevantly, Mrs Stevenson, the two directors of Atrum, and BCA NL (main proceedings).[14] The main proceedings related to claims made against Mrs Stevenson, Mr Moran, BCA NL and others. In broad terms it was alleged that Mr Moran, Mrs Stevenson and another caused BCA NL to be incorporated in British Columbia without the consent of Atrum, and effectively for the purpose of carrying on business in competition with Atrum. The Atrum Companies alleged that Mrs Stevenson was in breach of contractual, fiduciary and statutory duties as an employee, in respect of the use of certain geological, technical and commercial information, which was confidential to the Atrum Companies. The Atrum Companies sought declarations in respect of the alleged breaches, damages or alternatively an account of profits.[15]
10 November 2015 - 17 December 2015
[14] Affidavit of Mrs Stevenson sworn 12 December 2019, par 11; GB 3.
[15] Affidavit of Mr Leslie sworn 13 February 2020, SGL1; GB 149 - 239.
On 10 November 2015, Wilson invoiced Mrs Stevenson (invoice number 12542) fees in the sum of $5,649.07 (inclusive of GST).[16]
[16] Affidavit of Mrs Stevenson sworn 12 December 2019, CMS3, CMS5; GB 22 - 26, 47 - 51.
In a letter dated 10 December 2015, Mr Leslie gave Mrs Stevenson an estimate for a 'standard' two to three-day trial of $100,000 ‑ $150,000. The letter set out a number of reasons why the main proceedings might fall outside the meaning of a 'standard' type of dispute and gave an estimate that the cost of the trial for the main proceedings would fall into the range of $150,000 ‑ $200,000.[17]
[17] Affidavit of Mrs Stevenson sworn 12 December 2019, CMS2; GB 20.
On 17 December 2015, Wilson invoiced Mrs Stevenson (invoice number 12644) fees in the sum of $21,960.07 (inclusive of GST).[18]
January - April 2016
[18] Affidavit of Mrs Stevenson sworn 12 December 2019, CMS3, CMS5; GB 27 - 32, 52 - 57.
On 12 January 2016, Wilson invoiced Mrs Stevenson (invoice number 12699) fees in the sum of $22,000 (inclusive of GST).[19]
[19] Affidavit of Mrs Stevenson sworn 12 December 2019, CMS3, CMS5; GB 33 - 38, 58 - 63.
On 5 February 2016, Wilson invoiced Mrs Stevenson (invoice number 12731) fees in the sum of $4,400 (inclusive of GST).[20]
[20] Affidavit of Mrs Stevenson sworn 12 December 2019, CMS5; GB 64 - 66.
On 2 March 2016, the main proceedings were provisionally listed for a 10‑day trial commencing 4 July 2016.[21]
[21] Affidavit of Mr Leslie sworn 13 February 2020, par 34.2; GB 126.
On 4 March 2016, Wilson invoiced Mrs Stevenson (invoice number 12801) fees in the sum of $15,687.99 (inclusive of GST).[22]
[22] Affidavit of Mrs Stevenson sworn 12 December 2019, CMS5; GB 67 - 71.
On 31 March 2016, Mr Leslie sent a letter to Mrs Stevenson advising in effect that:[23]
1.The costs incurred and billed to date, including disbursements and GST were $70,670.11.
2.The unbilled work in progress was about $15,000.
3.The further costs including a full-day mediation were about $10,000.
4.The further costs likely to be incurred to, but not including the trial, were approximately $200,000.
5.The costs of the trial, assuming a 10-day trial, would be $180,000.
[23] Affidavit of Mrs Stevenson sworn 12 December 2019, CMS6; GB 113 - 115.
On 7 April 2016, Wilson invoiced Mrs Stevenson (invoice number 12914) fees in the sum of $19,800 (inclusive of GST).[24]
21 - 28 April 2016 - transfer of file to Zafra
[24] Affidavit of Mrs Stevenson sworn 12 December 2019, CMS5; GB 72 - 77.
On 21 April 2016, Mr Leslie wrote to Mrs Stevenson informing her, in effect, that Wilson was ceasing to trade as a legal practice and inviting Mrs Stevenson to transfer the file to Zafra where he would continue to act for her.[25]
[25] Affidavit of Mr Leslie sworn 13 February 2020, SGL9; GB 308 - 309.
On 23 April 2016, Mrs Stevenson signed a document authorising Wilson to transfer her files to Zafra.[26]
[26] Affidavit of Mr Leslie sworn 13 February 2020, SGL10; GB 312 - 313.
On 28 April 2016, Wilson invoiced Mrs Stevenson (invoice number 12963) fees in the sum of $28,600 (inclusive of GST).[27]
June 2016
[27] Affidavit of Mrs Stevenson sworn 12 December 2019, CMS5; GB 78 - 83.
On 1 June 2016, Mrs Stevenson instructed Mr Leslie that she had spoken to Mr Moran (another respondent to the main proceedings) about him guaranteeing her legal fees and that he said that he was 'running with an insurance claim'.[28]
[28] Affidavit of Mr Leslie sworn 13 February 2020, par 63; GB 136 - 137.
On 3 June 2016, Mrs Stevenson told Mr Leslie that Mr Moran wanted a 'letter and a costs schedule'.[29]
[29] Affidavit of Mrs Stevenson sworn 12 December 2019, CMS5; GB 137.
On 7 June 2016, Mr Leslie prepared a draft guarantee, guaranteeing Mrs Stevenson's liability for legal fees and for any liability she had to the Atrum Companies in the main proceedings. The document was drafted on the basis that the guarantors would be Mr Moran, BCA NL and another company. Mr Leslie said that he included 'the statutory provisions relevant to a third party payer costs agreement because the guarantee included payment of legal fees by a third party and [Mrs Stevenson] wanted the agreement to contain costs schedules'.[30]
[30] Affidavit of Mr Leslie sworn 13 February 2020, par 66; GB 137.
Also on 7 June 2016, Zafra invoiced Mrs Stevenson (invoice number 12) fees in the sum of $36,300 (inclusive of GST).[31]
[31] Affidavit of Mrs Stevenson sworn 12 December 2019, CMS5; GB 84 - 90.
On 8 June 2016, Mrs Stevenson told Mr Leslie that Mr Moran had paid the cost of her filing fees and would also pay $5,000 for expert witness fees.[32]
[32] Affidavit of Mr Leslie sworn 13 February 2020, par 70; GB 138.
On 9 June 2016, Mr Leslie, on behalf of Zafra, sent Mrs Stevenson an email containing:[33]
1.a proposed costs agreement dated 8 June 2016 headed 'Costs Agreement Atrum Coal NL Federal Court Proceedings NSD 1334 of 2015', including a document titled 'Schedule of fees and expenses (Effective 1 May 2016)',[34] together with a document entitled 'Our terms of engagement (Effective 2 May 2016)';[35] and
2.schedule 3 of the Federal Court Rules 2011 (Cth).[36]
[33] Affidavit of Mr Leslie sworn 13 February 2020, SGL11; GB 314 - 332.
[34] Affidavit of Mr Leslie sworn 13 February 2020, SGL11; GB 315 - 322.
[35] Affidavit of Mr Leslie sworn 13 February 2020, SGL11; GB 323 - 326.
[36] Affidavit of Mr Leslie sworn 13 February 2020, SGL11; GB 327 - 332.
On 9 June 2016, Mr Leslie had a telephone conversation with Mrs Stevenson in which she said that she had the proposed Zafra costs agreement and would sign and return it.[37]
[37] Affidavit of Mr Leslie sworn 13 February 2020, par 23; GB 124.
- Mr Leslie also forwarded to Mrs Stevenson on 9 June 2016 the draft deed of guarantee.[38]
[38] Affidavit of Mr Leslie sworn 13 February 2020, SGL32; GB 419 - 429.
On 10 June 2016, Mr Leslie made some amendments to the draft deed of guarantee as instructed by Mrs Stevenson and he suggested that she provide the amended version to Mr Moran.[39]
[39] Affidavit of Mr Leslie sworn 13 February 2020, pars 72 - 73, SGL33; GB 138 ‑ 139, 430.
On 13 June 2016, Mrs Stevenson told Mr Leslie that Mr Moran had paid into her account the fees for an expert witness for which she was liable.[40]
[40] Affidavit of Mr Leslie sworn 13 February 2020, par 74; GB 139.
Around 20 June 2016, Mrs Stevenson transferred $5,000 to Mr Leslie for payment of expert fees.[41]
[41] Affidavit of Mr Leslie sworn 13 February 2020, SGL35; GB 434.
On 24 June 2016, Mrs Stevenson told Mr Leslie that Mr Moran's solicitors were revising the draft guarantee.[42]
[42] Affidavit of Mr Leslie sworn 13 February 2020, par 76; GB 139.
Also on 24 June 2016, Mr Leslie had further discussions with Mrs Stevenson regarding the guarantee.[43]
[43] Affidavit of Mr Leslie sworn 13 February 2020, SGL34; GB 432.
On or about 26 June 2016, it was agreed that Mr Bennett of Bennett + Co would appear as counsel for Mrs Stevenson as well as the other respondents in the main proceedings, without a charge to Mrs Stevenson or Zafra.[44]
[44] Affidavit of Mr Leslie sworn 13 February 2020, par 79; GB 140.
On 28 June 2016, a follow up email was sent to Mrs Stevenson asking her to sign and return the signed proposed Zafra costs agreement.[45]
[45] Affidavit of Mr Leslie sworn 13 February 2020, SGL12; GB 333.
Mr Leslie was not provided with a signed or revised version of the draft deed of guarantee. Rather, on 30 June 2016, Mrs Stevenson forwarded to Mr Leslie an email from Mr Moran and a draft letter of 'indemnification of legal expenses' by Mr Moran on behalf of BCA NL.[46]
1 - 10 July 2016 and the Zafra Costs Agreement
[46] Affidavit of Mr Leslie sworn 13 February 2020, SGL36; GB 439.
On 1 July 2016, Mr Leslie advised Mrs Stevenson that Mr Moran's letter was 'not a guarantee or much of an indemnity'.[47]
[47] Affidavit of Mr Leslie sworn 13 February 2020, SGL37; GB 441.
On 4 July 2016, Mr Leslie provided further advice to Mrs Stevenson in respect of Mr Moran's draft letter of indemnity.[48]
[48] Affidavit of Mr Leslie sworn 13 February 2020, pars 82 - 83; GB 140 - 141.
On 5 July 2016, the letter of indemnity was signed by BCA NL.[49] Mrs Stevenson signed the letter on 7 July 2016.[50]
[49] Affidavit of Mrs Stevenson sworn 12 December 2019, par 49; GB 7.
[50] Affidavit of Mr Leslie sworn 13 February 2020, SGL39; GB 445.
On 7 July 2016, following a request from Mrs Stevenson, Mr Leslie's secretary sent a further copy of the proposed Zafra costs agreement to Mrs Stevenson with the terms of engagement and sch 3 of the Federal Court Rules.[51] The signed agreement was returned the same day (Zafra Costs Agreement).[52]
[51] Affidavit of Mr Leslie sworn 13 February 2020, SGL13; GB 124, 334 - 335.
[52] Affidavit of Mrs Stevenson sworn 12 December 2019, CMS4; GB 45; affidavit of Mr Leslie sworn 13 February 2020, SGL14; GB 336.
The Zafra Costs Agreement provided that the scope of work was defending the main proceedings in the Federal Court. The estimate of legal costs and disbursements was recorded as $250,000 - $450,000 in fees and $50,000 in disbursements.[53]
[53] Affidavit of Mr Leslie sworn 13 February 2020, SGL11; GB 315, 317.
Mrs Stevenson did not make a cross‑claim in the main proceedings. On 8 July 2016, Mr Leslie, on instructions from Mrs Stevenson, wrote to the solicitors for the Atrum Companies offering to settle the main proceedings on terms which included Atrum paying a contribution of $250,000 to Mrs Stevenson's fees. The letter indicated that Mrs Stevenson was prepared to take payment in Atrum shares, subject to an orderly market agreement without any escrow period.[54] When discussing the proposed letter with Mrs Stevenson, Mr Leslie told her that her fees to date were $250,000 plus work in progress of $32,000.[55]
[54] Affidavit of Mr Leslie sworn 13 February 2020, SGL17; GB 343.
[55] Affidavit of Mr Leslie sworn 13 February 2020, par 36; GB 129.
Also on 8 July 2016, Zafra invoiced Mrs Stevenson (invoice number 190) fees in the sum of $95,205.33 (inclusive of GST).[56]
[56] Affidavit of Mrs Stevenson sworn 12 December 2019, CMS5; GB 91 - 103.
On 10 July 2016, Mr Leslie was copied into correspondence concerning a proposed settlement of the main proceedings with a draft deed of settlement.[57]
11 July 2016 - first day of trial and settlement of main proceedings
[57] Affidavit of Mr Leslie sworn 13 February 2020, SGL19; GB 350.
At 9.09 am on 11 July 2016, Zafra emailed Mrs Stevenson advising that her costs to date (including disbursements) were $250,057.46 and that unbilled work in progress was $32,372.50 and that if there was a settlement on the basis that each party would pay its own costs, her costs would be in the order of $300,000 if the matter was settled on 8 July 2016.[58]
[58] Affidavit of Mr Leslie sworn 13 February 2020, SGL16; GB 342.
On the morning of 11 July 2016, the Atrum Companies' solicitors wrote to Mr Leslie informing him that Mrs Stevenson's offer to settle on the basis that she receive costs of $250,000 was rejected, and that Mrs Stevenson should pay her own costs of the proceedings.[59]
[59] Affidavit of Mr Leslie sworn 13 February 2020, SGL19; GB 349.
However, later on 11 July 2016 (the first day of trial), the main proceedings settled.[60]
[60] Affidavit of Mr Leslie sworn 13 February 2020, par 38; GB 130.
Pursuant to the settlement, Mrs Stevenson received (1) $50,000, and (2) an allocation of shares in Atrum to the value of $100,000 at that time.[61] Mrs Stevenson received approximately 203,465 Atrum shares, with an allocation price of $0.4915 per share (calculated according to the weighted average share price over the period 4 ‑ 8 July 2016). The shares were subject to a three‑month escrow period.[62]
The fees invoiced to Mrs Stevenson
[61] Affidavit of Mrs Stevenson sworn 12 December 2019, par 53; GB 8.
[62] Affidavit of Mr Leslie sworn 13 February 2020, pars 45 - 46; GB 131.
Wilson's fees in acting for Mrs Stevenson totalled $118,097.13.[63] Seven invoices were issued by Wilson.[64]
[63] Affidavit of Mr Leslie sworn 13 February 2020, par 17; GB 123.
[64] Affidavit of Mrs Stevenson sworn 12 December 2019, par 56; GB 8 - 9.
Zafra invoiced Mrs Stevenson total fees of $178,805.33.[65] Four invoices were issued by Zafra.[66]
[65] Affidavit of Mr Leslie sworn 13 February 2020, par 29; GB 124.
[66] Affidavit of Mrs Stevenson sworn 12 December 2019, par 56; GB 9.
Mr Leslie discounted the Wilson fees and the Zafra fees by an aggregate amount of $35,010.25, or about 11% of the total costs incurred.[67]
[67] Affidavit of Mr Leslie sworn 13 February 2020, par 32; GB 125.
The rates charged by practitioners engaged on Mrs Stevenson's matter (overwhelmingly, Mr Leslie) did not increase over the whole period of engagement.[68]
[68] Affidavit of Mr Leslie sworn 13 February 2020, par 31; GB 124. The very limited reference to work done by someone other than Mr Leslie is to a more junior solicitor.
Neither Wilson nor Zafra invoiced Mrs Stevenson for facsimiles, photocopying, printing, retrieval or return of archive files, or overtime.[69] Also, as indicated earlier, counsel agreed to appear for Mrs Stevenson at no cost to her.
[69] Affidavit of Mr Leslie sworn 13 February 2020, par 30; GB 124.
The invoices sent by Wilson and Zafra contained details, on a day‑by‑day basis, of (1) the fee earner who did the work (overwhelmingly it was Mr Leslie), (2) the nature of the work done, (3) the number of (time) units, (4) the rate per hour charged for the work done by the fee earner, and (5) the amount charged for each item of work done.
Each invoice included the following statement:[70]
[70] See, for example, affidavit of Mrs Stevenson sworn 12 December 2019, CMS3; GB 25.
Your rights in relation to legal costs
The following avenues are available to you if you are not happy with this bill -
•requesting an itemised bill
•discussing your concerns with us
•having our costs assessed
•applying to set aside our costs agreement
For more information about your rights, please read the fact sheet titled Your right to challenge legal costs. You can ask us for a copy, or obtain it from the Legal Practice Board (or download it from the website of the Legal Practice Board at 2016
On 13 July 2016, Mrs Stevenson's husband (Simon) emailed Mr Leslie:[71]
Hi Shayne
Without the generosity of your time (and/or payment terms …) [Mrs Stevenson] wouldn't have been in any position to fight on Monday, but worse, the whole thing would have come to an ugly end earlier this year. We can't thank you enough for that.
…
Please don't be polite regarding demands for payment. This situation is very embarrassing and will be our number 1 focus in the coming days/weeks and hopefully not many months.
The Settlement makes me a lot more confident this can be fully resolved in a timely fashion. For the remainder, my limited understanding is Russel/Gino desperately need [BCA NL] to be fully funded in the short‑term to clean up their own mess. So, hopefully this can all be behind us much sooner than their track record might suggest.
Please extend this thanks to your team and have a great week[.] (emphasis added)
August 2016
[71] Affidavit of Mr Leslie sworn 13 February 2020, SGL40; GB 446.
On 4 August 2016, Zafra invoiced Mrs Stevenson (invoice number 249) fees in the sum of $46,750 (inclusive of GST).[72]
[72] Affidavit of Mrs Stevenson sworn 12 December 2019, CMS5; GB 104 - 109.
On 9 August 2016, Mr Leslie prepared a draft letter for review by Mrs Stevenson, in relation to the payment of her costs by the Atrum Companies, pursuant to the settlement.[73]
[73] Affidavit of Mr Leslie sworn 13 February 2020, SGL41; GB 448 - 449.
On 10 August 2016, Mrs Stevenson sent an email to Mr Leslie. The letter gave instructions to Mr Leslie in relation to the draft letter he had prepared, and also requested him to send a further letter to Atrum claiming certain employment‑related benefits on her behalf. She also said:[74]
I am quite stressed about finding your payment, and I think I need to ask you to stop working/billing from now[.] [smiley face emoji]
[74] Affidavit of Mr Leslie sworn 13 February 2020, SGL41; GB 447 - 449.
On 15 August 2016, Mrs Stevenson emailed Mr Leslie stating that Atrum had paid money into her account and that she would transfer $46,874.64 to Mr Leslie, being $50,000 less her 'personal expenses'.[75] The email also said, relevantly:[76]
Just an FYI - your invoices have been provided to Chubb Insurance for review. I will know the outcome of that within the next fortnight. But assume it will be minimal. (emphasis added)
[75] Affidavit of Mr Leslie sworn 13 February 2020, par 40, SGL21; GB 130, 377.
[76] Affidavit of Mr Leslie sworn 13 February 2020, SGL21; GB 377.
On the same date, Mrs Stevenson paid $46,874.64 to Wilson, which was allocated towards the oldest outstanding Wilson invoices, leaving a balance of $71,222.49 owing to Wilson.[77]
[77] Affidavit of Mr Leslie sworn 13 February 2020, par 40, SGL21; GB 130, 377.
There followed further email correspondence between Mr Leslie and Mrs Stevenson on 15 August 2016 in which Mrs Stevenson said, in effect, that she had not transferred the whole $50,000 that she had received on account of legal fees on the basis that:[78]
[I]f your statements shows the $3,125.36 [expert fees] as paid … I will have little chance of recovering it (if any) from any of the other parties [BCA NL/Insurance].
October 2016
[78] Affidavit of Mr Leslie sworn 13 February 2020, SGL22; GB 378.
On 3 October 2016, Zafra invoiced Mrs Stevenson (invoice number 423) fees in the sum of $550 (inclusive of GST).[79]
[79] Affidavit of Mrs Stevenson sworn 12 December 2019, CMS5; GB 110 - 112.
On 11 October 2016, the day the shares came out of escrow, the Atrum share price was $0.710.[80] The market value of the shares issued to Mrs Stevenson was then $144,460.15 ($0.710 x 203,465 shares). In the following weeks, in the period 11 October to early November 2016, the share price hovered around and above 71 cents, giving a market value of the parcel of shares of $144,460.[81]
[80] Affidavit of Mr Leslie sworn 13 February 2020, par 47.2; GB 132.
[81] Affidavit of Mr Leslie sworn 13 February 2020, SGL24; GB 383.
On 14 October 2016, Mrs Stevenson emailed Mr Leslie stating, among other things:[82]
[82] Affidavit of Mr Leslie sworn 13 February 2020, SGL42; GB 450.
Hi Shayne,
Just touching base regarding the outstanding account.
I was hoping to have a definitive result this week.
The insurance has offered to pay 60% of a reduced hourly rate of $420 per hour. Given their logic, I am trying to negotiate up to 80% [at] $420 p/h and clarify some exclusions.
I have just heard back from the insurance broker who may need to your input to finalise [sic]. However, it looks positive at the 80%.
Insurance looks as though it will have a final answer by Friday next week.
I believe the voluntary escrow had expired this week.
I am working with a broker to sell at a reasonable price. However, I would like to finalise the insurance amount as first priority as its imminent.
I will keep you updated and endeavour to settle the account as soon as possible. (emphasis added)
On 24 October 2016, Mr Leslie's secretary sent Mrs Stevenson an email attaching the statements of account from Wilson and Zafra, showing the then balances owing.[83]
December 2016
[83] Affidavit of Mr Leslie sworn 13 February 2020, par 90; GB 142.
In or about December 2016, Mrs Stevenson told Mr Leslie that she had received $158,400 from Chubb Insurance as part of a payout on a directors and officers insurance policy.[84]
Part payment of outstanding accounts
[84] Affidavit of Mr Leslie sworn 13 February 2020, par 42; GB 131.
On 20 December 2016, Mr Leslie received $158,400 from Mrs Stevenson as payment of part of her account. The payment was allocated as to $71,222.49 in respect of outstanding Wilson invoices and $87,177.51 to the oldest outstanding Zafra invoice. It left $91,627.82 due to Zafra.[85]
[85] Affidavit of Mr Leslie sworn 13 February 2020, par 43; GB 131.
Mrs Stevenson has never paid the $91,627.82 in respect of outstanding invoices to Zafra.[86]
[86] Affidavit of Mr Leslie sworn 13 February 2020, par 44; GB 131.
On 20 December 2016, Atrum's share price had reduced to around $0.500, ie, around the price it had been at the date of settlement, making the market value of the parcel of shares again approximately $100,000.[87]
March 2017
[87] Affidavit of Mr Leslie sworn 13 February 2020, par 47.3; GB 132.
On 29 March 2017, Mr Leslie sent an email to Mrs Stevenson attaching the statement of account for Zafra.[88] The statement of account indicated an outstanding amount of $91,627.82.[89]
[88] Affidavit of Mr Leslie sworn 13 February 2020, SGL43; GB 451 - 452.
[89] Affidavit of Mr Leslie sworn 13 February 2020, SGL43; GB 453.
On 30 March 2017, Mrs Stevenson replied to Mr Leslie's email of 29 March, stating:[90]
It is unfortunate you have had to make first contact regarding the outstanding account.
I still hold the shares issued by Atrum and have every intention in [sic] selling them to settle this account in full. I have had sell orders in place since the beginning of the month to cover exact amount owed.
Unfortunately, the share price has continued to slide.
…
I will contact the company/brokers directly and discuss what options are available to realise the shares to recover the full amount owed to you (approx. 46c)[.]
They should have some interest in off‑market sale at a higher value (than current trading price) as I could half [sic] the share price if I sold on market today out of 'desperation'.
I would like a little more time to continue to manage this from my side - I will keep you fully updated with any progress. (emphasis added)
[90] Affidavit of Mr Leslie sworn 13 February 2020, SGL43; GB 451.
The share price of Atrum on 30 March 2017 was 30 cents.[91] At a price of 46 cents (referred to by Mrs Stevenson in the above letter), the shares received in the settlement would, if realised and applied in discharge of the fees, result in payment to Mr Leslie of $93,593 (203,465 shares x 0.46).
September - October 2017
[91] Affidavit of Mr Leslie sworn 13 February 2020, SGL24; GB 385.
On 11 September 2017, Mr Leslie sent another email to Mrs Stevenson requesting 'a meaningful reduction in the amount outstanding and then [to] make regular payments to pay the sum due'.[92] At this time, the Atrum share price was around $0.200.[93]
[92] Affidavit of Mr Leslie sworn 13 February 2020, par 94, SGL44; GB 142, 454.
[93] Affidavit of Mr Leslie sworn 13 February 2020, SGL 24; GB 387.
On 16 October 2017, Mrs Stevenson's husband sent an email in response to Mr Leslie, stating:[94]
I'm sure you're aware of our circumstances now, then ... and the process we've endured. The shares were only ever held until the insurance settlement materialised, which was a battle in and of itself.
I suggest we still wait for the shares to realise their potential value. Alternatively, we can sell at market now (~$40K) or transfer the shares as full and final settlement of the account.
Let me know how you wish to proceed[.] (emphasis added)
[94] Affidavit of Mr Leslie sworn 13 February 2020, SGL44; GB 454.
On 16 October 2017, the Atrum share price had reduced to $0.185.[95]
December 2018
[95] Affidavit of Mr Leslie sworn 13 February 2020, par 48; GB 132.
On 10 December 2018, an updated account statement was emailed to Mrs Stevenson.[96] The email stated that Zafra would send Mrs Stevenson a monthly calculation in respect of invoices and interest in order to keep her updated in relation to the amount due to Zafra. The outstanding amount was $98,803.55.[97]
February - March 2019
[96] Affidavit of Mr Leslie sworn 13 February 2020, SGL45; GB 457.
[97] Affidavit of Mr Leslie sworn 13 February 2020, SGL45; GB 458.
On 28 February 2019, Zafra sent an updated statement of account indicating that $99,594.31 was outstanding.[98]
[98] Affidavit of Mr Leslie sworn 13 February 2020, SGL46; GB 459 - 460.
By email dated 8 March 2019, Mrs Stevenson offered Zafra $40,000 or the 203,465 Atrum shares in full and final settlement of the outstanding amount of the account.[99] On this date, the Atrum share price was $0.220.[100]
[99] Affidavit of Mr Leslie sworn 13 February 2020, SGL46; GB 459.
[100] Affidavit of Mr Leslie sworn 13 February 2020, par 49; GB 132.
On 14 March 2019, the finance officer of Zafra sent an email to Mrs Stevenson advising that the file had been given to her to recover the legal fees and interest outstanding, and that the offer in Mrs Stevenson's email of 8 March 2019 was rejected. The email included a request 'to make a meaningful reduction of the amount outstanding and to put forward a reasonable proposal to pay regular instalment payments to clear the entire sum due'. The email also advised that Zafra had registered a caveat over Mrs Stevenson's property at Joondanna as security for the debt.[101]
September 2019 - Zafra commences debt recovery action
[101] Affidavit of Mr Leslie sworn 13 February 2020, SGL47; GB 461. (This was not the subject of a complaint in the primary court or in the appeal.)
On 13 September 2019, Zafra commenced District Court proceedings (CIV 3531 of 2019) against Mrs Stevenson seeking to recover the outstanding amount.[102]
September 2019 - November 2019
[102] Affidavit of Mr Leslie sworn 13 February 2020, par 104; GB 144.
On 17 September 2019, Mrs Stevenson, via new solicitors, filed an application for an extension of time to request an assessment of Wilson and Zafra's invoices (LPA 39 of 2019). That application was listed for hearing at a special appointment on 27 November 2019. The application was 'fully got up for argument' by and on behalf of Mr Leslie.[103]
[103] Affidavit of Mr Leslie sworn 13 February 2020, pars 105 - 106; GB 144.
On 26 November 2019, Mrs Stevenson sought to adjourn the special appointment because she intended to commence proceedings to set aside the Costs Agreements (ie, the primary proceedings).[104]
[104] Affidavit of Mr Leslie sworn 13 February 2020, par 107; GB 144.
On 26 November 2019, Mrs Stevenson filed an originating summons seeking orders to the effect that:[105]
1.the Wilson and Zafra Costs Agreements be set aside due to them not being fair or reasonable under the LP Act;
2.orders for assessment of the fees charged by Wilson and Zafra;
3.liberty to apply;
4.inspection of the records of Wilson and Zafra; and
5.costs.
[105] BB 26.
On 27 November 2019, the special appointment in respect of Mrs Stevenson's application to extend time to request an assessment of the Wilson and Zafra invoices was adjourned.[106]
[106] Affidavit of Mr Leslie sworn 13 February 2020, par 106; GB 144.
The Costs Agreements
The Wilson Costs Agreement
The Wilson Costs Agreement comprised the following documents: (1) a document entitled 'Costs Agreement', (2) a document entitled 'Schedule of fees and expenses', and (3) a document entitled 'Our terms of engagement'.
The proposed Wilson Costs Agreement was sent to Mrs Stevenson prior to the commencement of the main proceedings. It was executed by her on the day that the main proceedings commenced.[107]
[107] GB 18.
The first part of the Wilson Costs Agreement contains 10 clauses.
Clause 1 sets out the scope of work to be undertaken by Wilson, being (1) initially to provide advice in relation to the claims by Atrum and (2) subsequently, if required, to defend the Federal Court proceedings.[108]
[108] GB 13.
Clause 2 is headed 'Your rights'. It provides that:[109]
[109] GB 13 - 14.
This letter, together with the attached terms of engagement and schedule of fees and expenses, sets out the basis on which we will act for you (costs agreement).
As required by the Legal Profession Act 2008 (WA) (Act), the costs agreement includes the information that we must disclose to you about how we charge for our legal services and your rights.
Under the Act you have the right to:
(a)negotiate the terms of this costs agreement with us before entering into it;
(b)receive a bill of costs from us;
(c)request an itemised bill of costs after you receive a lump sum bill from us;
(d)request written reports about the progress of your matter and (at no cost to you) the costs incurred in your matter;
(e)apply for costs to be assessed within 12 months if you are unhappy with our costs;
(f)apply for the costs agreement to be set aside;
(g)to make a complaint under Part 13 of the Act if you have a dispute with respect to our costs;
(h)accept or reject any offer we make for an interstate costs law to apply to your matter;
(i)notify us that you require an interstate costs law to apply to your matter;
(j)be notified in writing, as soon as is reasonably practicable, of any substantial changes to anything contained in this costs agreement.
For more information about your rights, please read the fact sheet titled Legal Costs - Your Right to Know. You can ask us for a copy, or obtain it from the Legal Practice Board (or download it from the website of the Legal Practice Board or the Law Society of Western Australia). (bold in original) (italics emphasis added)
Clause 3 provides, in effect, that Mr Leslie would be the practitioner primarily responsible for Mrs Stevenson's matter and was the person that Mrs Stevenson was to contact in relation to any queries.[110]
[110] GB 14.
Clause 4 relates to fees and expenses. It provides that:[111]
[111] GB 14.
Our costs are made up of fees, disbursements and, if applicable, GST
We charge by reference to the time our professional staff spend on your matter. Fees for work carried out by the team intended to act for you are as follows.
Legal practitioner Position Rate per hour
excluding GST
Shayne Leslie Special counsel $575.00 per hour
Partner/ director $550 per hour
Senior lawyer being Up to $500 per hour
5 years or more inpractice
Junior lawyer being Up to $400 per hour
less than 5 years inpractice
Articled clerk/ Up to $250 per hour
law clerk
Our rates will change from time to time. If you do not agree to the new rates you may terminate this costs agreement.
Further details of the basis on which we charge for the work we undertake, and the range of rates for other professional staff who may become involved in the matter, are contained in the schedule of fees and expenses.
Our rates are set having regard to the seniority and experience of the professional staff involved and other factors such as the complexity of the matter, the time frame in which the work is required to be carried out and the particular nature of the scope of work. (emphasis added)
Clause 5 sets out an estimate of total legal costs. It provides:[112]
[112] GB 15.
The remuneration of solicitors is governed by statutory scales which set out the amount of solicitors' fees which can be recovered, usually without regard to the amount of time that the solicitor devotes to the matter.
The fees provided by the statutory scales (which would apply if we did not make this costs agreement) are, in general, lower than our fees based on hourly rates.
Accordingly, the remuneration to which we are entitled under this costs agreement may be considerably greater than the amount we would be entitled to recover if this costs agreement was not entered into and the statutory scale applied. By way of example we enclose a copy of the relevant statutory scale for litigation in the Supreme and District Courts.
You should be aware that there are solicitors who will only charge you in accordance with the relevant scale. Further, that there may be solicitors who would accept your instructions at lower hourly rates than those charged by us, or without some or all of the charges referred to in the schedule.
As you may appreciate, it is difficult to predict the total professional fees and disbursements for acting on this matter. The total fees charged will vary depending on various factors including whether the scope of your instructions change, the duration of any hearing and on the actions of third parties.
Based on your instructions to date, the information you have provided to us, and assuming no complications arise, we estimate that our total professional fees and disbursements will be as follows:
(a)
Our overall estimate of legal costs and disbursements payable by you to us under this agreement (lawyer/client costs)
(a) Initially - $5,000 - $10,000
(b) Subsequently - to be advised - unable to estimate at this time
(b)
Our estimate of the legal costs (including disbursements) which would be payable by you to us if this agreement did not apply.
About ½ to ⅔ of item 1
(c)
Our estimate of the amount of your legal costs (including disbursements) to which you may be entitled from another person if you win.
About ½ to ⅔ of item 1
(d)
Our estimate of the amount of the other party's legal costs (including disbursements) payable by you if you lose. These costs are, unless otherwise ordered by the Court, calculated under the relevant scale fixed by the Legal Costs Committee.
About ½ to ⅔ of item 1
(e)
The amount you agree to pay in advance on account of legal costs and disbursements (and/or payments to others) as per clause 6
Deferred
The above are estimates only and are subject to change. This is not a quotation. We intend to bill you monthly for acting for you on this matter. (bold in original) (italics emphasis added)
Clause 6 relates to moneys to be held on trust.[113]
[113] GB 16.
Clause 7 is titled 'Understanding the process of litigation' and contains an explanation of (1) the primary obligation of legal practitioners, (2) the benefits and costs of litigation, and (3) issues for the client to keep in mind.[114] In relation to the second of those matters, cl 7 included the following:[115]
It must also be borne in mind … that litigation is costly in time, energy and financial terms. Often the time and expenses involved are out of both your and our control and, to a large extent, are in the control of the court and governed by the law.
It is often difficult to predict with accuracy the likely course of litigation. The law is continually developing and even where the law is clear, further information may come to light which will bear on the outcome of a case. The legal outcome of your matter will depend on how effectively the parties prove relevant matters and the acceptance by the court of your evidence. …
We are also aware that commercial considerations may influence your decisions as to how you wish to proceed at any particular point during the course of litigation.
Our estimate of costs may need to be reviewed regularly as litigation proceeds and we make a firmer evaluation of its likely course.
[114] GB 16 - 17.
[115] GB 16.
In relation to the third of those matters, cl 7.3 includes:[116]
7.3Issues to keep in mind
Please bear in mind the following specific issues:
(a)Most courts have the power to make certain orders with respect to the payment of costs, including making a costs order for or against you. In certain cases the court also has power to require the party initiating action to provide evidence of their ability to meet any such costs order if unsuccessful. The court may require the initiating party to provide security to satisfy any costs order. If you are successful in legal proceedings, you may recover some costs from the other side. Usually those costs will be equal to the scale fees fixed by the Legal Costs Committee for the work done. If you are unsuccessful, you may be liable for some costs of the other side. Usually these costs will be equal to the scale fees for the work done.
(b)The amount recovered or payable by you to another party under any costs order is additional to any costs estimate contained in this letter, which relates only to your own costs to be paid to us. The court may not specify the amount payable under any costs order. The parties may have a right to apply to the court for an assessment of the amount payable.
(c)The amount recovered by you under any costs order obtained by you against other parties in the litigation is unlikely to cover the costs payable by you under this costs agreement. (emphasis added)
[116] GB 17.
Clause 8 relates to how the client may accept the costs agreement. It includes:[117]
This letter of engagement constitutes an offer by us to enter into a costs agreement. You are not obliged to accept this offer. (emphasis added)
[117] GB 17 - 18.
Clause 9 relates to disputes. It provides that:[118]
If a dispute arises under this costs agreement, including a dispute about the costs payable to us, either party may refer the dispute to arbitration. Unless we agree on an arbitrator, the arbitrator is to be appointed by the President of the Law Society. Each of us may be represented at the arbitration by a legal practitioner.
[118] GB 18.
Clause 10 provides that:[119]
10.Independent legal advice
It is in your interests to obtain independent legal advice from a different law practice with respect to this costs agreement. (emphasis added)
[119] GB 18.
There follows the sentence:[120]
Please do not hesitate to discuss with us any aspect of the contents of this costs agreement.
[120] GB 18.
As noted earlier, the concluding part of the letter provides, with a space below it for signature (and in fact it was signed by Mrs Stevenson):[121]
By signing this letter I acknowledge that I have received a copy of it and that I have read, understood and accept its contents, including the schedule of fees and expenses and the terms of engagement.
[121] GB 18.
The attached 'Schedule of fees and expenses' forming part of the Wilson Costs Agreement sets out (1) rates for team members and professional staff, (2) fees for support services and expenses, including photocopying/printing at 30 cents per page, and (3) a schedule of outside clerk charges. It also provides that cash disbursements associated with such services will be charged in addition to the fees set out in the schedule.[122] It includes:[123]
Our fees are charged on a range of hourly rates, which are divided into 6 minute intervals. The minimum charge is 1 unit (even if actual time spent is less). The rates and basis of our charging apply regardless of the nature of the task, and include time spent travelling and waiting. Our fees are based on the specific rates for the professional staff disclosed in our engagement letter and the following range of hourly rates for other professional staff. (emphasis added)
[122] GB 19.
[123] GB 19.
The third part of the Wilson Costs Agreement, headed 'Our terms of engagement', includes the following:[124]
[124] GB 287 - 290.
4.Our authority
We will obtain your approval before incurring any significant or extraordinary expenses except in cases of urgency.
Please note that we may:
(a)incur all expenses we consider reasonably necessary for the proper conduct of your matter;
(b)appoint barristers, consultants and experts; and
(c)appoint law firms in other jurisdictions.
You are responsible for all expenses we incur on your behalf.
…
9.Fees and expenses
Please feel free to discuss any aspect of our fees and expenses with the practitioner primarily responsible for your matter at any time.
9.1Professional fees
We charge for our services on the basis set out in the attached letter of engagement and schedule of fees and expenses.
The relevant Legal Practitioners (Solicitors Costs) Determination would otherwise apply to us charging for our services.
…
9.2Disbursements
We will charge for any disbursements incurred on your behalf. Examples include photocopying, facsimile and telephone calls, delivery fees, courier fees, filing fees, searches, taxi fares and counsel fees (if instructed). The amount we charge for most categories of disbursement are set out in the schedule of fees and expenses attached.
…
10.Accounts
10.1Issue and payment of accounts
Generally, we issue accounts monthly and on completion of matters. Unless advised otherwise in writing, we will send our accounts to you at the address to which the letter of engagement is addressed.
Accounts are to be paid within 14 days of the date of the account.
…
10.6Right to receive bill of costs and to have costs reviewed
…
The following avenues are open to you in the event of a dispute in relation to your legal costs:
(i)You have the right to a costs assessment by a taxing officer of the Supreme Court, to have the charges in an account reviewed. You must apply for a costs assessment under Division 8 of the [LP] Act within 12 months after:
(a)the bill was given or the request for payment was made; or
(b)the costs were paid if neither a bill was given nor a request was made.
(ii)You also have the right under section 288 of the [LP] Act to apply for the setting aside of a costs agreement (ie the Agreement the subject of the costs agreement).
(iii)You may make a complaint about the conduct of a legal practitioner under Part 13 of the [LP] Act. A complaint must be made within 6 years after the conduct that is the subject of the complaint.
Where a costs agreement complies with section 282 of the [LP] Act, the taxing officer must give effect to that agreement, unless the agreement is determined by the Supreme Court or a Judge of that Court to be unfair or unreasonable under section 288 of the [LP] Act. You agree to pay our costs and disbursements associated with any taxation at our standard hourly rates disclosed in the agreement unless the taxing officer certifies a different amount.
…
23.Applicable law
The law of the State of Western Australia applies to legal costs regarding this matter.
The Zafra Costs Agreement
The Zafra Costs Agreement also comprised three documents entitled (1) 'Costs Agreement', (2) 'Schedule of fees and expenses', and (3) 'Our terms of engagement'.
Clauses 1 - 4 of the first part of the Zafra Costs Agreement are almost identical to cls 1 ‑ 4 of the Wilson Costs Agreement.[125] Clause 1 provides an updated description of the scope of work.[126]
[125] GB 39 - 41.
[126] GB 39.
Clause 5 sets out updated estimates of legal costs and, among other things, provides:[127]
[127] GB 41 - 42.
We set out below our estimate of costs for the above work. The work you are asking us to do may be is [sic] relatively complex and unusual and there may be unforeseen issues that need to be addressed in the process of undertaking the scope of work. We do not want to provide you with a fee estimate that you are happy with only to promptly exceed that fee estimate so we may set out a range of costs with the anticipation that the final costs will fall somewhere within that range and, preferably, at the bottom end of the range. But, again, unforeseen issues may push up the costs. In any case our practice is to monitor costs and discuss them with a client as soon as we suspect the fee estimate may be exceeded.
Based on your instructions to date, the information you have provided to us, and assuming no complications arise, we estimate that our total professional fees and disbursements will be as follows:
(a)
Our overall estimate of legal costs and disbursements payable by you to us under this agreement (lawyer/client costs). This is for work after 1 May 2016.
$250,000 to $450,000
fees
$50,000 - disbursements (exclusive of GST)
(b)
Our estimate of the legal costs (including disbursements) which would be payable by you to us if this agreement did not apply. (These costs are calculated under the relevant scale fixed by the Legal Costs Committee and do not apply to this agreement.)
Difficult to determine at this stage but could be 50% of the estimate above.
(c)
Our estimate of the amount of your legal costs (including disbursements) to which you may be entitled from another person if you win.
About ½ of item 1
(d)
Our estimate of the amount of the other party's legal costs (including disbursements) payable by you if you lose. These costs are, unless otherwise ordered by the Court, calculated under the relevant scale fixed by the Legal Costs Committee.
About ½ of item 1
(e)
The amount you agree to pay in advance on account of legal costs and disbursements (and/or payments to others) as per clause 8 below.
Deferred
(bold in original) (italics emphasis added)
Clause 6 is headed 'Scale rates', and provides:[128]
The remuneration of solicitors is governed by statutory scales which set out the amount of solicitors' fees which can be recovered, usually without regard to the amount of time that the solicitor devotes to the matter.
The fees provided by the statutory scales (which would apply if we did not make this costs agreement) are, in general, lower than our fees based on hourly rates. Accordingly, the remuneration to which we are entitled under this costs agreement, may be considerably greater than the amount we would be entitled to recover if this costs agreement was not entered into and the statutory scale applied. By way of example we enclose a copy of the relevant statutory scale.
You should be aware that there are solicitors who will only charge you in accordance with the relevant scale. Further, that there may be solicitors who would accept your instructions at lower hourly rates than those charged by us, or without some or all of the charges referred to in the schedule. (emphasis added)
[128] GB 42.
Clause 7 is headed 'Account', and provides that:[129]
We will render an account comprising the Fixed Fee upon the completion of the Initial Work (Account). You agree to pay the Account within 14 days of the date of the Account, subject to your right to dispute the costs outlined below.
The Account may be rendered in a lump sum form or in an itemised account. (bold in original)
[129] GB 42.
Clauses 8 and 9 are similar to cls 6 and 7 of the Wilson Costs Agreement.
Clause 10 is broadly similar to cl 8 of the Wilson Costs Agreement.
Clauses 11 and 12 are the same as cls 9 and 10 of the Wilson Costs Agreement.
Like the Wilson Costs Agreement, the Zafra Costs Agreement contains an invitation to Mrs Stevenson to discuss any aspect of the costs agreement.
In the Zafra Costs Agreement, the attached 'Schedule of fees and expenses'[130] is essentially the same as the schedule of fees attached to the Wilson Costs Agreement, and the third document entitled 'Our terms of engagement' is materially the same as that in the Wilson Costs Agreement.[131]
[130] GB 46.
[131] GB 323 - 326.
As with the Wilson Costs Agreement, Mrs Stevenson signed the acknowledgement that she had read, understood and accepted its contents.[132]
Fact Sheet - Legal Costs - Your Right to Know
[132] GB 45.
The document referred to in cl 2 of each of the Wilson Costs Agreement and the Zafra Costs Agreement, titled 'Legal Costs - Your Right to Know', included the following:
LEGAL COSTS – YOUR RIGHT TO KNOW
FORM 2
Legal Profession Regulations 2009
Regulation 80(1) - Form of disclosure of clients' rights
Legal Profession Act 2008 (the Act)
Section 260(5) and Section 260(1)(b)(i),(ii),(iii),(g), (i),(j) and (l).1.Your right to negotiate a costs agreement with the law practice
The majority of law practices will ask you to sign a costs agreement. You have the right to negotiate with your lawyer about the terms of the costs agreement including the rate at which your lawyer and associates of the law practice will charge for their legal services.
You should ensure that you understand the terms of the costs agreement including when the agreement will take effect. It may not be necessary for you to sign the agreement before it takes effect.
2.Your right to receive a bill of costs from the law practice
You have a right to receive a bill before you pay for legal work (section 290 of the Act).
You will receive either:
•a bill that summarises the work that has been done and the total cost of this work (lump sum bill); or
•a bill that details each item of work, usually in units of 6 minutes at the relevant hourly rate (itemised bill).
All bills, or an accompanying letter from the law practice, must be signed on behalf of the law practice.
3.Your right to request an itemised bill after receiving a lump sum bill
If you do not receive an itemised bill, you have a right to request one (section 292 of the Act).
Your lawyer cannot charge for preparing the itemised bill.
However, it is possible that the total amount of the bill may increase when each item of work has been itemised and the cost calculated.
It is recommended that your request for an itemised bill reach the law practice within 30 days after you receive the lump sum bill. Although you are not required by law to request an itemised bill within 30 days your lawyer is entitled to sue you for unpaid legal fees after 30 days have elapsed since you were given the bill. If you request an itemised bill the 30 days will run from the date your request was complied with by the law practice.
…
5.Your right to be notified of any substantial change to estimate of costs and other matters disclosed to you when retaining the law practice
It is difficult to predict the exact cost of litigation in advance. The cost of court proceedings can vary depending on a number of factors including the actions of the other party which cannot be anticipated.
Your lawyer must give you an estimate of the costs to be charged to you, the costs you are likely to get back if you win and the costs you are likely to pay if you lose, but generally your lawyer will not be able to tell you these exact costs at the outset.
If there is a substantial change to anything that your lawyer has told you, your lawyer must tell you of the changes as soon as it is reasonably practical for your lawyer to do so (section 267 of the Act).
…
7.Your right to a notice telling you about your rights
A notice telling you about your rights to challenge legal costs must be sent with the bill (section 291 of the Act.)
8.Your rights in the event of a dispute in relation to legal costs
Your rights include:
(i) the right to apply for a costs assessment;
(ii) the right to apply to set aside your costs agreement;
(iii) the right to make a complaint.
(i) Costs assessment
An application for assessment of a bill must be made within 12 months after the bill was received by you (section 295 of the Act).
However, if an application is made out of time, a Supreme Court Officer may determine, having regard to the delay and the reasons for the delay that it is just and fair for the application for assessment of the bill to be dealt with after the 12 month period.
(ii) Setting aside the costs agreement
On application by a client, the Supreme Court may order that a costs agreement be set aside if satisfied that the agreement is not fair or reasonable (section 288 of the Act).
There is no time limit prescribed in the Act for bringing an application to set aside a costs agreement.
In determining whether or not to set aside a costs agreement, the Supreme Court will have regard to a number of factors including:
•whether the client was induced to enter into the agreement by fraud or misrepresentation;
•whether any practitioner acting for the law practice has been found guilty of unsatisfactory professional conduct or professional misconduct in relation to the legal services to which the costs agreement relates;
•the circumstances and conduct of the parties before and after the agreement was made;
•the disclosure made by the law practice and how the costs agreement and billing under the agreement address changed circumstances that might foreseeably arise.
(iii) The making of a complaint
The Legal Profession Complaints Committee is the statutory body established under the Act to receive and investigate complaints against Australian legal practitioners.
A complaint may be made about conduct of an Australian legal practitioner irrespective of when the conduct is alleged to have occurred.
However, a complaint cannot be dealt with (otherwise than to dismiss it or refer it to mediation) if the complaint is made more than 6 years after the conduct is alleged to have occurred unless the Legal Profession Complaints Committee determines that -
(a)it is just and fair to deal with the complaint having regard to the delay and the reasons for the delay; or
(b)the complaint involves an allegation of professional misconduct and it is in the public interest to deal with the complaint.
A determination under subsection (2) is final and cannot be challenged in any proceedings by the complainant or the Australian legal practitioner concerned (Sections 411(1) - (3) of the Act). (emphasis added)
The evidence in the primary proceedings
Mrs Stevenson's affidavit of 12 December 2019
In addition to outlining various background matters, Mrs Stevenson, in her affidavit of 12 December 2019, said that:
1.She had no familiarity with costs agreements. Nor did she have any experience of legal fees and she was reliant on her lawyer to properly advise her about the fees that she would be incurring.[133]
[133] Affidavit of Mrs Stevenson sworn 12 December 2019, pars 22 - 23; GB 4.
2.At her first meeting with Mr Leslie, he did not explain what scale would apply to the fees if a costs agreement was not made.[134]
[134] Affidavit of Mrs Stevenson sworn 12 December 2019, par 24; GB 4.
3.In relation to the Wilson Costs Agreement, Mr Leslie did not, either before or after she signed the Wilson Costs Agreement, explain:
(a)what the agreement meant;
(b)that charging in six‑minute units was for the benefit of the legal practice;
(c)what scale of fees applied if the costs agreement was not made; and
(d)how costs were calculated in the Federal Court.[135]
[135] Affidavit of Mrs Stevenson sworn 12 December 2019, pars 18 - 19; GB 4.
4.In relation to the Zafra Costs Agreement, Mr Leslie failed to explain the matters the subject of pars (a), (b) and (c) of the preceding point.[136]
[136] Affidavit of Mrs Stevenson sworn 12 December 2019, pars 42 - 44; GB 6.
5.On or about 13 January 2016, she met with Mr Leslie to discuss the costs that were being incurred and her financial position. She told Mr Leslie that she would no longer be able to meet Wilson's costs and, as a best case scenario, she would be able to pay $100,000, being her total net assets at that time. She also informed Mr Leslie that she would be considering bankruptcy. Mr Leslie told her he would continue regardless of her ability to pay personally and said words to the effect that she should seek an indemnity from BCA NL.[137] (This statement was defined in the affidavit as the 'January Representation'.)
[137] Affidavit of Mrs Stevenson sworn 12 December 2019, pars 29 - 33; GB 5.
6.As a result of the 'January Representation', she understood that Mr Leslie might be paid, but that BCA NL was the proper paying party and that he would not pursue her personally to recover costs.[138]
[138] Affidavit of Mrs Stevenson sworn 12 December 2019, par 34; GB 5.
7.On the basis of her assumption as to the effect of the January Representation, she continued to instruct Mr Leslie, made repeated requests of BCA NL to meet her costs and kept Mr Leslie informed of these attempts.[139] She reluctantly signed the Zafra Costs Agreement under the apprehension that if she did not, Mr Leslie would cease to act so close to the trial.[140]
[139] Affidavit of Mrs Stevenson sworn 12 December 2019, par 35; GB 5.
[140] Affidavit of Mrs Stevenson sworn 12 December 2019, par 68; GB 11.
8.On 7 June 2016, Mr Leslie commenced drafting a third‑party costs agreement for BCA NL in relation to indemnifying her legal costs. BCA NL rejected the costs agreement but prepared a letter of indemnity.[141]
9.On 5 July 2016, BCA NL signed an amended version of the agreement. Amongst other things, it provided that BCA NL agreed to indemnify her against all legal fees incurred in the main proceedings including the sums of $118,097.13 which was due to Wilson, and $36,300 which was due to Zafra.[142] She considered this to be consistent with her assumption that the party paying for her legal costs would be BCA NL, and Mr Leslie would not seek to recover costs from her.[143]
10.In or about December 2016, the director of BCA NL advised her that it would not agree to pay the balance of Zafra's legal costs on the basis that they were not reasonable, and the costs disclosure in relation to Wilson was insufficient.[144]
11.Had a more realistic estimate been given by Mr Leslie in January 2016, she would have tried to make other arrangements, even in light of the January Representation.[145]
12.Mr Leslie 'ought to have been aware' that:[146]
(a)Mrs Stevenson could not personally meet the costs;
(b)she did not have the means to pay the costs;
(c)the provision of the indemnity was critical to the payment of her fees; and
(d)payment of the costs would be subject to BCA NL making good on the indemnity.
[141] Affidavit of Mrs Stevenson sworn 12 December 2019, pars 46, 48; GB 7.
[142] Affidavit of Mrs Stevenson sworn 12 December 2019, par 58; GB 9.
[143] Affidavit of Mrs Stevenson sworn 12 December 2019, pars 46 - 50; GB 7 - 8.
[144] Affidavit of Mrs Stevenson sworn 12 December 2019, par 60; GB 9.
[145] Affidavit of Mrs Stevenson sworn 12 December 2019, par 72; GB 11.
[146] Affidavit of Mrs Stevenson sworn 12 December 2019, par 61; GB 9 - 10.
In relation to delay, Mrs Stevenson deposed:
73.I did not seek earlier to have the two costs agreements set aside as a result of:
73.1In addition to the January Representation, [Mr Leslie] had created a third‑party Costs Agreement and later amended a Letter of Indemnity, so it was understood by myself that the correct paying party was [BCA NL] and as I was also not being personally pressed for payment, I did not believe there was any need for me to explore my rights regarding these Costs Agreements.
73.2All work was completed and bills totalling $296,902.46 were issued without ANY requirement or request for personal payment or retainer. This is consistent with my understanding that I was not the correct paying party and did not believe I was personally liable for the debt (January Representation).
73.3I forwarded the balance of the settlement cash component ($46,874.64) and insurance payments ($158,400) to the [respondents] upon receipt totalling $205,274.64. This is consistent with my understanding that I was not the correct paying party and did not believe I was personally liable for the debt (January Representation).
73.4While there was a minor (late) invoice received from Zafra … dated October 2016 ($550), this was for works performed by 15 August 2016. It was my understanding that the matter was dealt with and finalised July 2016 [sic]. Settlement was reached then, and I requested by email for Shayne Leslie to stop work.
73.5When I was eventually pressed for payment, I made offers to settle the matter.
73.6The [respondents] did not reply to, nor reject any offers made prior to 14 March 2019.
73.7I did not seek further advice in this matter until the [respondents] aggressively pressed me to payment in March 2019 and lodged a caveat on my home in response to an offer.
73.8I did not understand what setting aside a Costs Agreement meant until I sought further advice in 2019. (underlining original emphasis)
Mr Leslie's affidavit of 13 February 2020
In addition to outlining background matters, Mr Leslie's affidavit, amongst other things, disputed Mrs Stevenson's account of the January 2016 meeting and deposed that he never said that Mrs Stevenson would not be personally liable for Wilson's fees.[147] In relation to the meeting on 13 January 2016, Mr Leslie deposed:[148]
[147] Affidavit of Mr Leslie sworn 13 February 2020, par 59; GB 136.
[148] Affidavit of Mr Leslie sworn 13 February 2020, pars 51 - 58; GB 133 - 135.
51.I met with [Mrs Stevenson] and her husband, Simon Morley, on 13 January 2016 at the offices of [Wilson].
52.I do not agree with what [Mrs Stevenson] says at paragraphs of 29, and 31 to 33 of her affidavit.
53.I was told the purpose of the meeting was to discuss a suggestion by the other respondents to the main proceedings that Bennett [+] Co could act for [Mrs Stevenson] in the main proceeding. Attached marked SGL25 is a copy of an email from [Mrs Stevenson] dated 6 January 2016 requesting the meeting.
54.Although I have no present recollection of doing so, based on my invariable practice over more than 35 years as a lawyer, I have no doubt that I made handwritten notes during the conference and then, (as there is a typed record of the meeting) using those notes and by recollection of the meeting, dictated a summary of what was discussed at the meeting. This would have been done immediately after the meeting. My secretary would have transcribed my dictation. The typed memorandum would then have been read by me and settled. I am confident of the accuracy of the memorandum; although I see I have referred to Simon Morley as Simon Dulaney (his step‑father's surname). Attached hereto marked SGL26 is a copy of my file memorandum of the discussion with [Mrs Stevenson] and her husband on 13 January 2016.
55.Relevant to the matters referred to by [Mrs Stevenson] in her affidavit, my notes read, with some current explanation by me in square brackets:
''They [[Mrs Stevenson] and her husband or [Mrs Stevenson], her husband and the other respondents to the main proceedings] are getting [sic] some consideration to having Bennett [+] Co act for [Mrs Stevenson] to avoid her legal expense. She also thinks that if the matter did not proceed well that [Mr Moran] [[Mr Moran] was one of the other respondents to the main proceedings] may look after her liability.'
'… my initial strategy was to try and blow away the smoke and to show that there is no fire [substantive claim] in respect of [Mrs Stevenson]. To go through and identify each of the allegations against [Mrs Stevenson] and to give an open and transparent response explaining why the alleged evant [sic] happened and why it is not a breach of contract.'
'The next part of the submission [to Atrum] is that there is no damage [arising from] the alleged breaches against [Mrs Stevenson]. Atrum will incur additional costs in chasing an additional defendant who is separately represented. They will not obtain a substantive judgment against [Mrs Stevenson] and even if they did she does not have the funds to pay it.'
We discussed a scorched earth approach [[Mrs Stevenson] give Atrum everything and go bankrupt]. Apparently the house has been bought in [Mrs Stevenson's] name. There is about $250,000 equity in the house.'
'As part of the scorched earth strategy Simon said that the equity was only $250,000 and that maybe it was better just to give that to them and move on with their lives. To put all of this behind them. To stop the stress and strain which is restricting them from earning other incomes and just focus on earning other incomes and building up their position.'
'The revised strategy I suggested at the end of the meeting was to continue with the first part of the strategy and if that failed consideration could be given to paying something by way of settlement to Atrum.'
'The amount that was likely to be needed to sweeten the deal should be considerably less than the scorched earth approach that Simon referred to.'
'If that failed then give consideration to either litigating the matter with what funds they have as it can only achieve a better result than the scorched earth. Or have Bennett [+] Co act and avoid any liability for legal fees. Only if that all failed then scorched earth.'
'[Mrs Stevenson] and Simon will give some thought to these options and come back to me within a week.'
'In the meantime whilst considering her options [Mrs Stevenson] should start progressing the discovery of documents.'
56.My recollection is that what I have referred to as the scorched earth approach was suggested by Mr Morley. He said words to the effect - That is all a big distraction. It was distracting to him as well as to [Mrs Stevenson]. It would be easiest for [Mrs Stevenson] to give Atrum her home and other assess and go bankrupt. He could then focus on making money and in no time he could buy another house and they would be back were we are [sic].
57.To the best of my recollection, because of the email from [Mrs Stevenson] dated 6 January 2016 and [Mrs Stevenson's] comments that she thought that if the main proceedings did not proceed well for her, [Mr] Moran (one of the other respondents to the main proceedings) may look after her liability), I then or later suggested [Mrs Stevenson] speak with [Mr] Moran and seek to get a formal indemnity from him for all of her exposure under the main proceedings.
58.My view was that going straight to a 'scorched earth' outcome as suggested by [Mrs Stevenson's] husband at the 13 January meeting was not sensible. I had suggested a strategy in my letter to [Mrs Stevenson] dated 28 October 2015 (SGL7) and I advocated that strategy at the meeting on 13 January. I was prepared to continue acting for [Mrs Stevenson]. I had regard to my close friendship with [Mrs Stevenson's] parents in law and that it would be difficult for [Mrs Stevenson] to find alternative representation because she had no available funds to pay for monthly legal fees, she had breached her contract with [Atrum] and judgment was likely to be entered against her. I was aware, from what [Mrs Stevenson] said during the meeting, that [Mrs Stevenson] had $250,000 equity in her house. My view was [Wilson] had a charge over [Mrs Stevenson's] house pursuant to its costs agreement. That charge had priority over any claim the Atrum companies could make against [Mrs Stevenson's] property in execution of any judgment if she was unsuccessful in the main proceedings. Consequently, that [Wilson] would ultimately be paid for acting for [Mrs Stevenson] and the outcome for [Mrs Stevenson] could not be any worse than the 'scorched earth' (or go bankrupt and give everything to Atrum now) approach [Mrs Stevenson] had suggested during our meeting. (original emphasis)
Further, Mrs Stevenson's contention that she did not argue before the master that time billing itself was in breach of a fiduciary duty cannot be accepted - see [139] above. For all these reasons, ground 6 should be dismissed.
Ground 6(a)
In relation to ground 6(a), concerning non‑disclosure of the matters required under pt 10 div 3 of the LP Act, the disclosures made are summarised in the table attached at the end of these reasons.
The master concluded, albeit without tracing through the details, that Mrs Stevenson had not established that there was a failure to disclose the matters required by the relevant provisions in pt 10 of the LP Act. When regard is had to the matters in the attached table, that conclusion is correct, subject to a consideration of the two issues to which counsel for Mrs Stevenson made particular mention in the appeal in respect of ground 6(a): (1) whether there was adequate disclosure under s 260(1)(a) of the LP Act, and (2) whether there was adequate disclosure under s 260(1)(f)(ii) of the LP Act.
As noted earlier, s 260(1)(a) of the LP Act provides:
(1)A law practice must disclose to a client in accordance with this Division -
(a)the basis upon which legal costs would be calculated, including whether a costs determination applies to any of the legal costs[.]
The first part of s 260(1)(a) requires that the law practice disclose 'the basis upon which legal costs would be calculated'. The second part requires such disclosure to include 'whether a costs determination applies to any of the legal costs'.
The effect of s 271 of the LP Act is if there is no costs agreement made in accordance with div 6 of pt 10, and no applicable costs determination, then legal costs are recoverable insofar as the costs reflect the 'fair and reasonable value of the legal services provided' (s 271(c) of the LP Act). Also, any taxation in that event would be conducted on the basis of (1) whether or not it was reasonable to carry out the work in question, (2) whether or not the work was carried out in a reasonable manner, and (3) the fairness and reasonableness of the amount of legal costs in relation to the work: s 301(1) of the LP Act.
In this case, there was no 'costs determination' applicable given that, under s 275(1) of the LP Act, there was no costs determination applicable to contentious business in the Federal Court. As noted earlier, counsel for Mrs Stevenson accepted that there was no 'costs determination' within the meaning of s 260(1)(a) applicable to this case and submitted that there was non‑disclosure in failing to advise that there was no such applicable costs determination.[321]
[321] Appeal ts 36.
Neither party provided any reference to any authorities, principles or statutory enactments, as to the power of the Federal Court to order a taxation of costs as between a solicitor and his or her client in Federal Court proceedings, the circumstances in which such a power might be exercised and the scale that would be applicable in the event of a solicitor/client taxation of costs.[322]
[322] See, for example, appeal ts 37, 39.
The position is discussed in Dal Pont's Law of Costs (4th ed) at [5.49]. Section 23 of the Federal Court of Australia Act 1976 (Cth) empowers the Federal Court to make orders for the taxation of (relevantly) a bill of costs between a solicitor and a client in Federal Court proceedings.[323] In Keith Hercules, Lockhart and Sheppard JJ held that the then relevant Federal Court Rules did not provide for taxation between solicitor and client, but were rather confined to a taxation of costs between party and party, and that there were no rules specifically dealing with taxation as between solicitor and client.[324] Although the Federal Court Rules appear to have been amended since that time, div 40.2 of the Federal Court Rules 2011, headed 'Taxation of costs', includes the following:
[323] Keith Hercules; CCOM Pty Ltd v Jiejing Pty Ltd (Unreported, Federal Court, 10 February 1994) (Cooper J); Re Weedman (1988) 83 FCR 366; Johnson Tiles Pty Ltd v Esso Australia Ltd [1999] FCA 1363; (1999) 94 FCR 167 [35] ‑ [36].
[324] The decision in Keith Hercules was cited with evident approval by the Full Court of the Federal Court in Batterham v Goldberg [2014] FCAFC 136; (2014) 226 FCR 166 [39] ‑ [41].
40.12Application of Division 40.2 and 40.3
If an order is made in favour of a party for payment of the party's costs, the costs must be taxed in accordance with this Part, unless the amount of costs is agreed between the parties to the order.
…
40.29Costs to be allowed on taxation
A taxing officer is to allow costs for the work done:
(a)before 1 August 2011 - in accordance with Schedule 2 to the Federal Court Rules, for the relevant period mentioned in that Schedule; and
(b)on or after 1 August 2011 - in accordance with Schedule 3, for the relevant period, if any, mentioned in that Schedule. (emphasis added)
In relation to the proper exercise of the discretion to order taxation of the bill of costs as between solicitor and client in proceedings in the Federal Court it has been held that:[325]
1.Ordinarily taxation of costs as between solicitor and own client in respect of work performed under a 'retainer'[326] entered into in a State will be left to be determined under the relevant State statute and the Federal Court would decline to make an order for taxation in the Federal Court.
2.However, if there are other facts (which may generally be described as special facts) which are in addition to the fact that the dispute concerns professional fees charged by the solicitor, and which call for the making of such an order, then the Federal Court will make orders as are appropriate, but such cases will be comparatively rare.
3.The power to order a taxation in the Federal Court as between solicitor and client will only be exercised where it is necessary to ensure the convenient, expeditious and fair conduct of legal proceedings, including the amount which a solicitor appearing before the Federal Court may charge his or her client, and to give full force and effect to the orders of the Federal Court.
[325] Keith Hercules & Sons v Steedman; CCOM v Jiejing; Re Weedman (372).
[326] A term which appears to be wider than just a costs agreement.
Before the master, Mrs Stevenson submitted that on an assessment of costs in the Supreme Court, in relation to solicitor/client costs in Federal Court proceedings, the court would likely apply sch 3 to the Federal Court Rules 'as a guide'.[327] It may be added that it was not suggested by Mrs Stevenson, in her application to the master or in this appeal, that if she obtained an order setting aside the Costs Agreements, she would make an application to the Federal Court for a taxation of her costs under sch 3 of the Federal Court Rules.
[327] Reference was made to a decision of Registrar Gourlay in Frigger v Madgwicks [2018] VSC 281 [12].
Counsel for the respondents, on the other hand, submitted, in effect, that in considering what is 'fair and reasonable' for the purposes of s 271(c) of the LP Act, the court would treat as relevant a costs determination in respect of costs in the Supreme Court as the superior, supervisory court of this State, although sch 3 of the Federal Court Rules could also be relevant.[328]
[328] Appeal ts 32.
In the absence of a costs agreement within the meaning of s 282 of the LP Act, the solicitor acting in Federal Court proceedings will be entitled to recover what is 'fair and reasonable' (s 271(c) of the LP Act). Given the relative paucity of submissions on these issues, for present purposes, it may be assumed in favour of Mrs Stevenson, without deciding, that, in this context, an assessment in the Supreme Court (under div 8 of pt 10 of the LP Act) would be 'guided by' the matters in sch 3 of the Federal Court Rules.
Accordingly, in the present case, there was a failure to disclose, in either Costs Agreement, that there was no applicable costs determination. This constituted a failure to disclose in accordance with the second aspect of s 260(1)(a) of the LP Act. There was consequently a failure (on the present assumption) to explain that, absent such an applicable costs determination, the respondents were entitled to recover fees that were 'fair and reasonable', and that in determining what is 'fair and reasonable', the court would be guided by the matters in sch 3 of the Federal Court Rules.
Nevertheless, it should be observed, in this context, that each of the Costs Agreements included explanations and disclosures to the following effect:
1.The statutory scale set out the amount of solicitors' fees which can be recovered, usually without regard to the amount of time that the solicitor devotes to the matter.
2.The fees provided by the statutory scales are, in general, lower than the fees based on hourly rates as set out in the Costs Agreements.
3.The remuneration to which the respondents would be entitled under the Costs Agreements may accordingly be considerably greater than the amount that the respondents would be entitled to recover if the Costs Agreement was not entered into.
4.In particular, it was estimated that the costs payable if the Wilson Costs Agreement were not entered into would be about one‑half to two‑thirds of that payable under the agreement. A similar estimate was provided in the Zafra Costs Agreement.
5.There are solicitors who would only charge in accordance with the relevant scale.
6.There may be solicitors who would accept instructions at lower hourly rates than those charged under the Costs Agreements, or who would accept instructions without some or all of the charges referred to in the attached schedule of fees and expenses.
7.Insofar as the client obtained a favourable costs order against the other party, the amount recovered under the costs order would be unlikely to cover the costs payable under the Costs Agreements.
8.Mrs Stevenson had the right to negotiate a costs agreement.
9.It was in the interests of Mrs Stevenson to obtain independent legal advice from a different law practice before entering into the Costs Agreements.
Accordingly in this case, the substance of the disclosure included (1) that costs were proposed to be charged in accordance with time and rates set out in the Costs Agreements, and (2) those Agreements provided for higher remuneration to the solicitor, and correspondingly higher costs to the client, than the costs which would otherwise apply if a statutory scale of fees applied. At least on the evidence in this case, we are not persuaded that it was material for Mrs Stevenson to know that a statutory scale did not apply directly, through the operation of the relevant cost determination under s 275 of the LP Act, but may be applied indirectly, through the operation of sch 3 of the Federal Court Rules as a 'guide'.
Further, Mr Leslie did provide a copy of sch 3 of the Federal Court Rules in connection with the Zafra Costs Agreement. Insofar as the Wilson Costs Agreement enclosed a copy of the costs determination for the Supreme Court, there was no suggestion by Mrs Stevenson that the fees recoverable under the application of sch 3 of the Federal Court Rules would be any less than the costs provided for in that costs determination, and that sch 3 of the Federal Court Rules would operate more favourably to a client in Mrs Stevenson's position in the main proceedings in the Federal Court.
In light of the foregoing, and having regard to the explanations and disclosures provided by the respondents in their entirety and all the circumstances of this case, the particular lack of disclosure referred to in [289] above is not sufficient, in our view, to stigmatise the Costs Agreements as not being fair, having regard to the principles in [237] ‑ [245] above. Nor does it render the Costs Agreements not reasonable.
In that regard, the relevant circumstances also include the following matters, both as to the terms of the Costs Agreements and the overall effect of the Costs Agreements in their operation:
1.There was no suggestion that the rates charged were unreasonably high.
2.There was no suggestion that Mr Leslie 'leveraged' the costs of the law practice through the selection of a range of solicitors to work on the matter - as noted earlier, the work on the file was carried out almost exclusively by Mr Leslie.
3.There was no suggestion that the client's file had been 'over serviced' in relation to the work carried out by Mr Leslie, or that the work was not done reasonably or efficiently.
4.Mrs Stevenson was kept abreast of the costs incurred, and the operation of the Costs Agreements, by the provision of monthly invoices, which were considerably detailed in nature. The details included (1) the fee earner who did the work (overwhelmingly, Mr Leslie), (2) the nature of the work done, (3) the number of time units, (4) the rate per hour charged for the work done by the fee earner, and (5) the amount charged for each item of work done.
5.Mrs Stevenson was provided with regular updates as to the estimated costs likely to be incurred. Each estimate was provided prior to the previous estimate being exceeded.
6.Each of the 11 invoices issued to Mrs Stevenson, 10 of which were issued in the period November 2015 to July 2016, and the 11th of which was issued in October 2016, included statements to the effect that she had the rights to (1) 'discuss any concerns', (2) to have the costs assessed, or (3) to apply to have the Costs Agreements set aside.
7.Mr Leslie discounted fees by over 10% in the course of acting for Mrs Stevenson in the matter.
Insofar as Mrs Stevenson's submissions under ground 6(a) allege, in particular, a failure to disclose in accordance with s 260(1)(f)(ii), the submissions have no merit. By s 260(1)(f)(ii), the law practice is to disclose 'the range of costs the client may be ordered to pay if the client is unsuccessful' in the litigation. Mrs Stevenson's written submissions are referred to in [214] above. They are vague and uninformative, and disclose no error. Moreover, as the attached table indicates, s 260(1)(f)(ii) was adequately complied with.
The complaint that the master failed to follow his own decision in BGM does not establish appellable error. The substance of the master's finding was that proper disclosure had been made.
Also, if and to the extent that ground 6(a) is intended (it is not clear) to allege error by the master in relation to the variety of other miscellaneous allegations in Mrs Stevenson's written submissions before the master,[329] the complaint is not established. Even if it were assumed (without deciding) that one or more of the contractual terms the subject of those allegations were unreasonable, there was no material adverse effect to the client in their practical operation in the circumstances of this case. That is particularly so having regard to the matters referred to in [61] above. Accordingly, in these respects the Costs Agreements were not unreasonable in their operation.
[329] Referred to in [134.5] - [134.10], [135.5] - [135.6], [135.8] - [135.9] above.
Ground 6(a) should be dismissed.
Ground 7
Ground 7 appears to cover the same territory as the first aspect of ground 6(a). It alleges a failure to disclose in accordance with s 260(1)(a) of the LP Act. For the reasons given in relation to ground 6(a), ground 7 should be dismissed.
As noted in [221] above, although unrelated to ground 7, Mrs Stevenson also alleged in her written submissions that the master failed to deal with other non‑disclosures - with particular reference to s 260(1)(c)(ii), s 260(1)(f)(ii) and s 260(1)(j) of the LP Act.
The reference here to s 260(1)(f)(ii) appears merely to be a repetition to the same complaint under ground 6(a), which, for the reasons indicated above, has no merit.
Section 260(1)(j) requires the legal practice to disclose any time limits that apply to the taking of any action referred to in s 260(1)(i) of the LP Act. As the attached table indicates, in this case, the disclosure was in accordance with s 260(5) of the LP Act, and reg 80 and sch 1 form 2 of the LP Regulations. No error is established.
Section 260(1)(c)(ii) requires the legal practice, if a range of total estimated fees is given, to disclose an explanation of the major variables that would affect the calculation of those costs.
The main proceedings were fast moving, they evidently required a very significant amount of work, and were complex in nature (the proceedings were described by counsel for Mrs Stevenson as 'undeniably not run‑of‑the mill litigation').[330] In this context, we are not persuaded that the disclosures referred to in cl 5 and cl 7 of the Wilsons Costs Agreement were inadequate in the circumstances. The disclosure in the Zafra Costs Agreement was, read in isolation, uninformative insofar as it referred to the prospect of costs being pushed up by 'unforeseen issues'. Nevertheless, when read in the context of the disclosures in the Wilson Costs Agreement (relating to the same litigation) in all the circumstances of the case, we are not persuaded that disclosure was defective.
[330] Appeal ts 14.
Ground 7 should be dismissed.
Disposition of the appeal
None of the grounds of appeal has been made out and the appeal should be dismissed on that basis.
Alternatively, even if the Costs Agreements were not fair or not reasonable by reason of the failure explicitly to inform Mrs Stevenson that the six‑minute minimum unit method of charging was for the benefit of the law practice (as alleged in ground 6) or by the non‑disclosure referred to in [289] above, we would not, in any event, set aside the Costs Agreements in the exercise of the discretion under s 288(2) of the LP Act. We are not persuaded that it would serve the interests of justice in the particular circumstances of this case to do so having regard to (1) the matters in [274] (points 1 ‑ 8) and [275] above, (2) the matters in [290] ‑ [292] and [294] above, and (3) the matter of the effective indemnity referred to next. The costs under both Costs Agreements totalled approximately $297,000, and Mrs Stevenson effectively received a full indemnity for her costs in the main proceedings, in that (1) she received $50,000 from the settlement on account of costs, (2) she also received from the settlement shares in Atrum worth $100,000 as at the date of settlement and which were worth considerably more by the time the shares came out of escrow, and (3) she received insurance moneys of $158,000 in respect of her costs. Her subsequent decision not to realise the shares does not detract from the value of the indemnity which she received at the time. She also received payment of certain disbursements from Mr Moran.
Table of Disclosures
| Section of the LP Act | Requirement (relevantly for present purposes) | Disclosure |
| 260(1)(a) | A law practice must disclose to a client in accordance with this Division … the basis on which legal costs will be calculated, including whether a costs determination applies to any of the legal costs. | Clause 4 of each Costs Agreement sets out that charges are made by reference to time and the hourly rates apply to work done in Mrs Stevenson's matter. Reference is also made to the schedule of fees and expenses, including with the provisions concerning six‑minute units. Clause 5 of the Wilson Costs Agreement and cl 6 of the Zafra Costs Agreement provides that hourly rates under the Costs Agreements apply, not the statutory scales that would apply if the Costs Agreements were not entered into. The Wilson Costs Agreement enclosed by way of example the Legal Practitioners (Supreme Court) (Contentious Business) Costs Determination 2012, and the Zafra Costs Agreement enclosed by way of example sch 3 of the Federal Court Rules. See also, to similar effect, cl 9.1 of 'Our terms of engagement'. |
| 260(1)(b)(i) (Read with s 260(5) of the LP Act, reg 80 of the LP Regulations and sch 1 form 2 of the LP Regulations) | A law practice must disclose to a client in accordance with this Division … the client's right to … negotiate a costs agreement with the law practice. | Clause 2(a) of each Costs Agreement sets out that under the LP Act Mrs Stevenson has a right to negotiate the terms of the costs agreement before entering into it. This disclosure substantially conforms with the wording in sch 1 form 2 of the LP Regulations. |
| 260(1)(b)(ii) (Read with s 260(5) of the LP Act, reg 80 of the LP Regulations and sch 1 form 2 of the LP Regulations) | A law practice must disclose to a client in accordance with this Division … the client's right to … receive a bill from the law practice. | Clause 2(b) of each Costs Agreement sets out that under the LP Act Mrs Stevenson has a right to receive a bill of costs from the firm. This disclosure conforms with the wording in sch 1 form 2 of the LP Regulations. |
| 260(1)(b)(iii) (Read with s 260(5) of the LP Act, reg 80 of the LP Regulations and sch 1 form 2 of the LP Regulations) | A law practice must disclose to a client in accordance with this Division … the client's right to … request an itemised bill after receipt of a lump sum bill. | Clause 2(c) of each Costs Agreement sets out that under the LP Act Mrs Stevenson has a right to request an itemised bill of costs after she receives a lump sum bill from the firm. This disclosure conforms with the wording in sch 1 form 2 of the LP Regulations. |
| 260(1)(b)(iv) | A law practice must disclose to a client in accordance with this Division … the client's right to … be notified under section 267 of any substantial change to the matters disclosed under this section. | Clause 2(j) of each of the Costs Agreements sets out that Mrs Stevenson has a right to be notified in writing, as soon as reasonably practicable, of any substantial change to anything contained in the Costs Agreement. |
| 260(1)(c) | A law practice must disclose to a client in accordance with this Division … an estimate of the total legal costs if reasonably practicable or, if that is not reasonably practicable, a range of estimates of the total legal costs and an explanation of the major variables that will affect the calculation of those costs. | In the Wilson Costs Agreement, the table in cl 5 provides an estimation of 'initial costs'. It says that subsequent costs are to be advised as an estimate is unable to be provided 'at this time'. Clause 5 and cl 7 refer to variables. In the Zafra Costs Agreement, the table in cl 5 provides an estimation of $250,000 to $450,000 for fees and $50,000 in disbursements. Clause 5 provides that 'unforeseen issues may push up the costs'. |
| 260(1)(d) | A law practice must disclose to a client in accordance with this Division … details of the intervals (if any) at which the client will be billed. | Clause 5 of each Costs Agreement provides that the relevant firm intends to bill Mrs Stevenson monthly. This is reiterated in cl 10.1 of each of 'Our terms of engagement'. |
| 260(1)(e) | A law practice must disclose to a client in accordance with this Division … the rate of interest (if any) that the law practice charges on overdue legal costs, whether that rate is a specific rate of interest or is a benchmark rate of interest. | Clause 10.4(c) of each of 'Our terms of engagement' specifies that on any amount outstanding after the date for payment of the account, interest may be charged at a rate of the Cash Rate Target specified by the Reserve Bank of Australia on the date of the bill was issued plus 2%. |
| 260(1)(f)(i) and (ii) | A law practice must disclose to a client in accordance with this Division … if the matter is a litigious matter, (i) an estimate of the range of costs that may be recovered if the client is successful in the litigation, and (ii) an estimate of the range of costs the client may be ordered to pay if the client is unsuccessful. Pursuant to s 260(4) this disclosure must include a statement that an order by a court for the payment of costs in favour of the client will not necessarily cover the whole of the client's legal costs. | This information is set out in pars (c) and (d) of the tables in cl 5 in each of the Costs Agreements, read with cl 7.3(a) and (c) of the Wilson Costs Agreement and cl 9.3(a) and (c) of the Zafra Costs Agreement. |
| 260(1)(g) (Read with s 260(5) of the LP Act, reg 80 of the LP Regulations and sch 1 form 2 of the LP Regulations) | A law practice must disclose to a client in accordance with this Division … the client's right to progress reports in accordance with section 269. | Clause 2(d) of each Costs Agreement sets out that under the LP Act Mrs Stevenson has a right to request written reports about the progress of her matter and (at no cost to Mrs Stevenson) the costs incurred in Mrs Stevenson's matter. This disclosure substantially conforms with the wording in sch 1 form 2 of the LP Regulations. |
| 260(1)(h) | A law practice must disclose to a client in accordance with this Division … details of the person whom the client may contact to discuss the legal costs. | Clause 3 of each Costs Agreement provides, in effect, that Mr Leslie would be the practitioner primarily responsible for Mrs Stevenson's matter and was the person that Mrs Stevenson was to contact in relation to any queries. |
| 260(1)(i) (Read with s 260(5) of the LP Act, reg 80 of the LP Regulations and sch 1 form 2 of the LP Regulations) | A law practice must disclose to a client in accordance with this Division … the avenues that are open to the client in the event of a dispute in relation to legal costs: (i) costs assessment under Division 8; (ii) the setting aside of a costs agreement under section 288; (iii) making a complaint under Part 13. | Clause 2 of each Costs Agreement sets out that under the LP Act Mrs Stevenson has a right apply for costs to be assessed within 12 months (par e) and to apply for the costs agreement to be set aside (par f). This disclosure conforms with the wording in sch 1 form 2 of the LP Regulations. Each of the Costs Agreements also additionally provide that a client has a right to make a complaint under Part 13 (par g). Clause 10.6 of each of the 'Our terms of engagement' document reiterates the three avenues open in the event of a dispute in relation to legal costs. |
| 260(1)(j) (Read with s 260(5) of the LP Act, reg 80 of the LP Regulations and sch 1 form 2 of the LP Regulations) | A law practice must disclose to a client in accordance with this Division … any time limits that apply to the taking of any action referred to in paragraph (i). | The only specified time limit in respect of the matters in 260(1)(i) is that an application for costs to be assessed must be made within 12 months. Clause 2(e) of each Costs Agreement sets out that under the LP Act Mrs Stevenson has a right apply for costs to be assessed within 12 months. The form of the disclosure conforms with the language of sch 1 form 2 of the LP Regulations. Clause 10.6 of each of 'Our terms of engagement' also specifies that an applicant must apply for a costs assessment within 12 months after (a) the bill was given or the request for payment was made, or (b) the costs were paid if neither bill was given nor a request was made, in accordance with s 295(6) of the LP Act. |
| 260(1)(k) | A law practice must disclose to a client in accordance with this Division … that the law of this jurisdiction applies to legal costs in relation to the matter. | Clause 23 of each of 'Our terms of engagement' provides that the law of Western Australia applies to the legal costs in respect of the Costs Agreement. |
| 260(1)(l) (Read with s 260(5) of the LP Act, reg 80 of the LP Regulations and sch 1 form 2 of the LP Regulations) | A law practice must disclose to a client in accordance with this Division … information about the client's right … (i) to accept under a corresponding law a written offer to enter into an agreement with the law practice that the corresponding provisions of the corresponding law apply to the matter, and (ii) to notify under a corresponding law (and within the time allowed by the corresponding law) the law practice in writing that the client requires the corresponding provisions of the corresponding law to apply to the matter. | Clause 2 of each Costs Agreement sets out that under the LP Act Mrs Stevenson has a right to (1) accept or reject any offer made for an interstate costs law to apply to her matter (par h), and (2) notify the firm that she requires an interstate costs law to apply to her matter (par i). This disclosure conforms with sch 1 form 2 of the LP Regulations. |
| 264(1) | If a law practice negotiates the settlement of a litigious matter on behalf of a client, the law practice must disclose to the client, before the settlement is executed … (a) a reasonable estimate of the amount of legal costs payable by the client if the matter is settled (including any legal costs of another party that the client is to pay), and (b) a reasonable estimate of any contributions towards those costs likely to be received from another party. | This requirement is met in the letter sent from Mr Leslie to Mrs Stevenson on 11 July 2016, just prior to settlement (see GB 342). |
| 267 | A law practice must, in writing, disclose to a client any substantial change to anything included in a disclosure already made under this Division as soon as is reasonably practicable after the law practice becomes aware of that change. | Clause 2(j) of each Costs Agreement sets out Mrs Stevenson has a right to be notified in writing, as soon as is reasonably practicable, of any substantial changes to anything contained in the costs agreement. Relevant disclosures included disclosures on 10 December 2015, 31 March 2016, 21 April 2016, 7 July 2016 and 11 July 2016. |
| 291 | A law practice must provide notification of client's rights in a written statement accompanying a bill. | Notification was given on each of the occasions that Wilson and Zafra invoiced Mrs Stevenson. |
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
DM
Associate to the Honourable Justice Murphy
13 OCTOBER 2021
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