Sturesteps v Khoury - [2015] NSWSC 1041

Supreme Court

New South Wales

Medium Neutral Citation: Sturesteps v Khoury [2015] NSWSC 1041
Hearing dates: 17, 18 and 19 November 2014
Date of orders: 03 August 2015
Decision date: 03 August 2015
Jurisdiction: Equity Division
Before: Slattery J
Decision:
Some parts of the proposed Further Amended Statement of Claim struck out but the balance remains.

Catchwords:
CIVIL PROCEDURE – strike out application – application to file new pleadings – multiple grounds for strike out – intersection of power to strike out and to give leave to file amendments – application of strike out doctrine – whether pleadings adequate

LEGAL PROFESSION – professional costs – disclosure in costs agreements

EQUITY – restitution – necessary elements for pleading restitution – whether a Legal Profession Regulations, reg 45(1)(d) statutory notice precludes the recipient from claiming to operate under a mistaken belief inconsistent with that notice - where restitution is sought from a solicitor of moneys paid to counsel pursuant to a legal retainer – whether pleading of fiduciary duty claims is adequate
CONTRACTS REVIEW ACT – time limitations applicable to deed of agreement.
Legislation Cited: Australian Consumer Law, s 18
Civil Procedure Act 2005, ss 56, 57, 58, 64, 90, 91, 98
Contracts Review Act 1980, ss 7, 9, 16
Fair Trading Act 1987, ss 42, 71
Income Tax Assessment Act 1997 (Cth), ss 6-5(4); 6-10(3).
Legal Profession Act 1987, Division 6, Part 11, ss 171M, 193, 199, 208B, 208D, 208K, 208L, 208M
Legal Profession Act 2004, ss 353, 367A, 368, 372.
Legal Profession Regulations 2002, regs 45, 52, 53
Legal Profession Regulations 2005, reg 125
Legal Profession Uniform Law Application Act 2014, Part 7
Limitation Act 1969, ss 14, 16
Strata Schemes Management Act 1996, s 140
Supreme Court Act 1970,
Uniform Civil Procedure Rules, Part 14, rr 12.1, 12.10, 13.4, 14.7, 14.8, 14.14, 14.28, 19.1, 42.20
Cases Cited: ALH Group Property Holdings Pty Limited v Chief Commissioner of State Revenue (2012) 245 CLR 338
Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
Australian Financial Services and Leasing Pty Ltd v Hills Industries [2014] HCA 14
Baker v Courage & Co [1910] 1 KB 56
Baltic Shipping Co v Merchant “Mikhail Lermontov” (1994) 36 NSWLR 361
Barwick v Law Society of New South Wales (2000) 169 ALR 236
Commissioner of Police for New South Wales v Industrial Commission of New South Wales & Raymond Sewell [2009] NSWCA 198
Commonwealth v Verwayen (1990) 170 CLR 456
Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40
Currabubula Holdings Pty Ltd v State Bank of New South Wales [2000] NSWSC 232
Dey v Victorian Railways Commissioners (1949) 78 CLR 62
Dysart (Earl) v Hammerton & Co [1914] 1 Ch 822
Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498
Estate of Allwood v Benjafield [2009] NSWSC 1383
Federal Commissioner of Taxation v White [2010] FCA 730
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Gillies v Eastlake [2014] NSWSC 611
Griffith v Australian Broadcasting Corp [2013] NSWSC 750
Hans Pet Constructions Pty Limited v Cassar [2009] NSWCA 230
His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Incorporated [2007] NSWCA 142
Horton v Jones (No 2) (1939) 39 SR (NSW) 305
Howard v Commissioner of Taxation [2014] HCA 21
Howden v Truth & Sportsman Ltd (1937) 58 CLR 416
In Sidameneo (No 456) Pty Ltd v Alexander (No 2) [2012] NSWCA 87
Johnson v Buttress (1936) 56 CLR 113
Kallinicos v Hunt (2005) 54 NSWLR 561
Kirby v Sanderson Motors Pty Ltd (2001) 54 NSWLR 135
Law Society of NSW v Foreman (1994) 34 NSWLR 408
McGuirk v The University of New South Wales [2009] NSWSC 1424
Minerals Corporation Ltd v Abbot [2004] NSWSC 246
Murphy v Overton Investments Pty Limited [2002] FCAFC 129
Nocton v Lord Ashburton (1914) AC 932
Parramatta River Lodge Pty Ltd v Sunman (1991) 5 BPR 12,038
O'Brien v Bank of Western Australia Ltd [2013] NSWCA 71; 16 BPR 31,705
Port Of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Re Morris Fletcher & Cross’ Bill of Costs [1997] 2 Qd R 228
Ren v Jiang [2014] NSWCA 388
Sent v Federal Commissioner of Taxation [2012] FCA 382
Simmons v New South Wales Trustee and Guardian [2014] NSWCA 405
Spellson v George (1992) 26 NSWLR 666
Spencer v The Commonwealth (2010) 241 CLR 118
Sturesteps v HIH Overseas Holdings Ltd (In Liq) (2011) 81 NSWLR 690
Sturesteps v McGrath [2010] NSWSC 169
Sturesteps v McGrath (2010) 242 FLR 122; [2010] NSWSC 896
Sturesteps v McGrath [2010] NSWSC 903
Sturesteps v Khoury (Supreme Court (NSW), Stevenson J, 8 May 2014, unrep)
Symonds v Raphael (1998) 148 FLR 171
Takemoto v Moody’s Investors Service Pty Ltd (in liq) [2014] FCA 1081
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514
Webster v Lampard (1993) 177 CLR 598
Welzel v Francis (2010) 77 NSWLR 92
Wenlock v Moloney [1965] 2 All ER 871
Wende v Horwath (NSW) Pty Ltd (2014) NSWLR 674; [2014] NSWCA 170
Wentworth v Rogers (2006) 66 NSWLR 474
Yorke v Lucas (1985) 158 CLR 661
Texts Cited: Carter on Contract
J Goldring, JL Pratt & DEJ Ryan “The Contracts Review Act (NSW)” (1980) 4 UNSWLJ 1
J Peden, The Law of Unjust Contracts (1982, Butterworths)
Ritchie's Uniform Civil Procedure NSW
Category: Principal judgment
Parties: First plaintiff: George Osvald Sturesteps
Second plaintiff: Beryl Donna Sturesteps
First defendant: Dieb Peter Khoury
Second defendant: Benjamin & Khoury Pty Limited
Representation:
Counsel:
Plaintiffs: C.J. Bevan
Defendants: K. Connor; A. Ahmad
Solicitors:
Plaintiffs: William Musgrave, W M Lawyers
Defendants: Benjamin & Khoury Solicitors

File Number(s): 2014/24406
Publication restriction: No

Judgment

The first plaintiff in these proceedings, George Sturesteps is a former senior employee and director of HIH Casualty and General Limited (“HIH”). The HIH corporate group collapsed in March 2001. Mr Sturesteps then commenced what became extensive litigation against the liquidators of the HIH group, in which he claimed entitlements as a consequence of the termination of his employment, when HIH was placed into liquidation (“the HIH proceedings”).
The first defendant, Dieb Khoury, is a solicitor who practised and practises under the business name of Benjamin & Khoury Solicitors (“Benjamin & Khoury”). Mr Sturesteps and his wife, Beryl Sturesteps, the second plaintiff in these proceedings, retained Mr Khoury (“the retainer”) to act for them in the HIH proceedings.
The Sturesteps now bring these proceedings against Mr Khoury and the second defendant, Benjamin & Khoury Pty Limited (“the Company”), an incorporated legal practice, whose director is Mr Khoury. During the course of the retainer between 2003 and 2008, the Sturesteps paid approximately $2.5 million in legal fees and disbursements. In these proceedings they claim that they overpaid their solicitors by about $750,000 and seek the recovery of that sum and other related relief.
The plaintiffs apply for leave to amend their pleadings. The defendants have applied for the summary dismissal of the plaintiffs’ proceedings. Mr C.J. Bevan of counsel appeared for the plaintiffs. Mr K Connor SC appeared for the defendants on these applications.

Procedural History

The plaintiffs filed their first statement of claim on 24 January 2014 and sought an expedited hearing. On 7 February 2014 Stevenson J in the Expedition List ordered that the plaintiffs serve all evidence on which they proposed to rely by 13 March 2014.
The plaintiffs filed an amended statement of claim on 19 February 2014 (“the ASOC”), pursuant to Uniform Civil Procedure Rules (“UCPR”), r 19.1. On 14 March 2014 counsel for the plaintiffs informed the Court that the plaintiffs had served all the evidence upon which they wished to rely.
On 11 April 2014 the defendants sought an order under UCPR, r 13.4 dismissing the proceedings or, alternatively, an order under UCPR, r 14.28 striking out the ASOC. Stevenson J heard that application on 8 May 2014 in the Equity Division Expedition List. In an ex tempore judgment, his Honour granted the alternative order only: he struck out the ASOC, directed the Sturesteps to serve a proposed further amended statement of claim, and stood the notice of motion over for further directions: Sturesteps v Khoury (Supreme Court (NSW), Stevenson J, 8 May 2014, unrep).
On 6 June 2014 Stevenson J removed the matter from the Expedition List, and on 8 September 2014 the Equity Registrar allocated the hearing of the parties’ applications to me.
Both sides have put on applications. The Sturesteps by notice of motion dated 16 June 2014 seek the Court’s leave to amend their pleadings pursuant to Civil Procedure Act 2005, s 64 by filing a document titled “Further Amended Statement of Claim”, including annexures A to E thereto (“FASC”). The FASC has itself been updated over time. The FASC considered in these reasons became Exhibit 3 in the proceedings. The defendants oppose the Sturesteps’ motion. The defendants also move on their 11 April 2014 motion, again seeking summary dismissal of the FASC pursuant to r 13.4 or orders pursuant to r 14.28 striking out the FASC.
The proceedings were heard on 17, 18 and 19 November 2014. Judgment was reserved on 1 December 2014.

Substantive History

By a written retainer agreement dated 11 April 2003 (“the costs agreement”), Mr Sturesteps retained Mr Khoury, practising as Benjamin & Khoury Solicitors, to sue HIH’s liquidators for entitlements relating to his former employment. On the same date Mrs Sturesteps retained Mr Khoury to act for her to defend an action brought by the liquidators of HIH Overseas Holdings Ltd, who sought to recover a loan in the nature of an alleged fringe benefit made to her as the nominee of her husband.
The costs agreement contained express terms relevant to the issues arising in this proceeding which were to the following effect:

Work performed under the retainer agreement would be charged out at the hourly rates specified in clause 8(b);

When costs incurred reach $10,000 notice of the costs incurred would be given under clause 8(d);

If Mr Sturesteps was successful in Mr Sturesteps’ proceeding he was, according to Mr Khoury, likely to recover party-party costs which would go some way to meeting his liability to Mr Khoury for solicitor-client costs: clause 8(e);

Mr Khoury would issue interim bills of costs and statements of account showing how monies paid had been applied to costs billed under clause 9;

Mr Khoury would endeavour to give bills of costs and statements of account on a monthly basis and on completion of the matter under clause 9;

Mr Sturesteps would pay Mr Khoury’s bills of costs within 14 days of receipt under clause 9;

Mr Sturesteps consented to Mr Khoury lodging a caveat on land owned by Mr Sturesteps and to charge the proceeds of sale of the land to secure the payment of Mr Khoury’s costs under clause 10;

If Mr Sturesteps did not raise any query or objection to Mr Khoury’s bills of costs within 30 days of receipt, he would be deemed to have confirmed that the bill of costs was correct under clause 11;

Mr Sturesteps’ right of review of his bills of costs lapsed 30 days after his receipt of the bill, following which Mr Khoury would have an absolute discretion whether to consider any query or objection to the bill under clause 11;

Mr Sturesteps would pay interest on unpaid costs at the rate specified in the Supreme Court Act 1970 if any bills of costs remained unpaid 30 days after its delivery to him under clause 12;

Mr Khoury had the right to stop performing further work under the retainer agreement under clause 12, if either:

Mr Sturesteps failed to make a requested payment on account of anticipated expenses or disbursements;

Mr Sturesteps failed to provide adequate instructions; or

Mr Sturesteps indicated that he had lost confidence in Mr Khoury as his solicitor;

Mr Khoury had the right to pay out of his trust or controlled money accounts any monies received on behalf of Mr Sturesteps to meet any expenses or disbursements due to Mr Khoury under clause 13;

Mr Khoury would pay to Mr Sturesteps any money received by him and not required to pay costs and disbursements due to Mr Khoury under clause 13;

All bills of costs would be prepared on a GST inclusive basis and any variation in the rate of GST would be reflected in the amount of GST included in each bill of costs under clause 14;

Although the Legal Profession Act 1987 provided for the review and assessment of his legal costs for their fairness and reasonableness by a costs assessor appointed by the Supreme Court, that right was expressed not to be available where there is a costs agreement that complies with the Act, unless the costs assessor determines the agreement to be unjust pursuant to clause.15;

Mr Sturesteps was to make any complaints about Mr Khoury’s costs or services under the retainer agreement to Mr Khoury personally in writing under clause 16;

Mr Sturesteps acknowledged that he had been offered the opportunity to seek, and was advised by Mr Khoury to seek independent legal advice regarding the costs agreement pursuant to clause 17;

Mr Khoury agreed pursuant to clause 19 that Mr Sturesteps could terminate the costs agreement at any time by written notice;

The costs agreement was enforceable as a costs agreement under the Legal Profession Act and in any proceedings for recovery of costs, Mr Sturesteps would be liable for unpaid costs on an “account stated” basis under clause19;

The terms of the costs agreement would continue to apply notwithstanding the subsequent incorporation of Benjamin & Khoury as a solicitor corporation pursuant to clause 21(c); and

The invalidity or unenforceability of any provision of the costs agreement would not affect the enforceability of any other provision pursuant to clause 22.

On 1 July 2003, Mr Khoury established the Company as a trading practice. Benjamin & Khoury sent a letter dated 30 June 2003 to Mr Sturesteps advising him of the incorporation of the Company. Mr Sturesteps received this letter about a week later. The parties dispute the legal effect of the letter. It stated:

"We wish to advise that as of 1 July 2003 Benjamin & Khoury Solicitors will be an Incorporated Legal practice under the name of Benjamin Khoury Pty Ltd.
We Confirm that the provision of legal services of Benjamin Khoury Pty Ltd as an incorporated legal practice, including by any officer or employee of the corporation who is a solicitor, is regulated by the Legal Profession Act 1987 (“The Act”). The Act does not regulate the provision of non-legal services provided by this firm.
We Confirm that Mr. Dieb Peter Khoury will be the Solicitor Director the Incorporated Legal practice. All terms and conditions will remain the same as stated in our costs agreement with you.”

Following the receipt of the letter, the retainer continued. Mr Sturesteps continued to instruct Benjamin & Khoury, and Benjamin & Khoury continued to provide legal services to the Sturesteps, sending them letters and issuing bills using stationery that occasionally, but not always, included words referring to the company, “Benjamin & Khoury Pty Limited ABN No 64 104 057 043”. The Sturesteps claim that Mr Sturesteps complained about the costs that Benjamin & Khoury billed them, but they say that at no point did he seek an assessment of those costs because of misconceptions as to his rights to costs assessment under the Legal Profession Act. The Sturesteps allege that Mr Khoury is responsible for Mr Sturesteps’ misconceptions.
The HIH proceedings were heard in 2010 before Brereton J. The two proceedings were heard together on 15–18 February 2010, 21 May 2010 and 3 June 2010. Brereton J gave three ex tempore judgments in the proceedings: Sturesteps v McGrath [2010] NSWSC 169; Sturesteps v McGrath (2010) 242 FLR 122; [2010] NSWSC 896; and Sturesteps v McGrath [2010] NSWSC 903.
Appeals were commenced from Brereton J’s decisions in both proceedings. The appeals were to be heard together in August 2011. Around this time, the Sturesteps were behind in payment of Benjamin & Khoury’s bills of costs. On 6 May 2011, Mr Khoury told Mr Sturesteps that he would terminate his retainer agreements with them and terminate the services of their counsel unless they made “satisfactory arrangements” to pay all outstanding and future legal costs under the retainers before their pending appeals were heard. In May 2011 Mr Sturesteps signed a Deed of Agreement to enter into such an arrangement.
The Court of Appeal heard the appeals on 8 August 2011, and gave judgment on 30 September 2011: Sturesteps v HIH Overseas Holdings Ltd (In Liq) (2011) 81 NSWLR 690. On 11 May 2012 the High Court refused Mr Sturesteps’ application for special leave to appeal from the Court of Appeal’s decision.
On 8 December 2011 Mr Sturesteps terminated the retainer agreement and the costs agreement. Throughout the retainer, Mr Sturesteps paid a total of $2,770,578.08 that had been billed in bills of costs. He now alleges that, had he applied for assessment and review, Mr Khoury (or alternatively, the Company) could only have recovered $2,048,662.72. The plaintiffs now seek the repayment of the difference between those two figures, namely $721,915.36, together with interest.

The Relief the Sturesteps Seek

By the proposed FASC (Exhibit 3), the first plaintiff, Mr Sturesteps, seeks the following relief:

“1.   A declaration that clauses 8(b), 9, 10, 11, 12, 13, 15, 17, 19 and 21(c) of the costs agreement between the first plaintiff and first defendant dated 11 April 2003 are unjust.
1A. A declaration that clauses 9, 11, 15 and 19 of the costs agreement between the first plaintiff and the first defendant dated 11 April 2003 are unenforceable pursuant to s. 182 of the Legal Profession Act 1987 or, alternatively, void pursuant to s.189 of the Act.
2.   An order that clauses 8(b), 9, 10, 11, 12, 13, 15, 17, 19 & 21(c) of the costs agreement between the first plaintiff and first defendant dated 11 April 2003 be set aside.
3. An order that the first defendant pay to the first plaintiff $721,915.36, together with interest thereon under s.100 of the Civil Procedure Act 2005 from the dates of payment of costs found to be unrecoverable under Part 11 of the Legal Profession Act, 1987 up to judgment as restitution for unjust enrichment or equitable compensation.
4. Alternatively, an order that the second defendant pay to the first plaintiff $721,915.36, together with interest thereon under s.100 of the Civil Procedure Act 2005 from dates of payment of costs found to be unrecoverable under Part 11 of the Legal Profession Act 1987 up to judgment as restitution for unjust enrichment or equitable compensation.
5. In the alternative, an order that the first defendant and/or the second defendant deliver to the plaintiff a bill of costs for legal services provided pursuant to his retainer from the first plaintiff dated 11 April 2003 which complies with the requirements of Division 4 of Part 11 of the [Legal Profession Act] 1987 and reg. 45 of the Legal Profession Regulation 2002.
6. An order that the first defendant or the second defendant lodge the bill of costs referred to in paragraph 1 for assessment under Division 6 of Part 11 of the [Legal Profession Act] with the Manager, Costs Assessment.
7.   Alternatively, an order that the Court assess, by a referee appointed under the UCP Rules, the costs properly payable to the first defendant or the second defendant by the plaintiff in respect of his retainer of the first defendant.
8. An order that the first defendant pay to the first plaintiff the amount found to be unrecoverable under Part 11 of the Legal Profession Act, 1987 (NSW) pursuant to paragraphs 6 or 7 above together with interest thereon under s.100 of the Civil Procedure Act 2005 from the dates of payment of costs up to the date of judgment by way of restitution.

9. Alternatively, an order that the second defendant pay to the first plaintiff the amount found to be unrecoverable under Part 11 of the Legal Profession Act, 1987 (NSW) pursuant to paragraphs 6 or 7 above together with interest thereon under s.100 of the Civil Procedure Act 2005 from the dates of payment of costs up to the date of judgment by way of restitution.”

The FASC also seeks the following relief for both plaintiffs jointly:

“10.    A declaration that the Deed of Agreement and Deed of Equitable Charge on Land dated 27 June 2011 made between the plaintiffs of the one part and the second defendant of the other part is void and of no effect, or alternatively, is voidable at the election of the plaintiffs on the grounds of undue influence or, alternatively, duress, or in the further alternative, for mistake.
11. Alternatively, a declaration that the Deed of Agreement and Deed of Equitable Charge on Land dated 27 June 2011 made between the plaintiffs of the one part and the second defendant of the other part is unjust within the meaning of s. 7 of the Contracts Review Act, 1980 (NSW) or s. 71 of the Fair Trading Act, 1987 (NSW).
12.   An order that the Deed of Agreement and Deed of Equitable Charge of Land each dated 27 June 2011 which are referred to in the preceding paragraph be set aside.
13.   An order for costs on the indemnity basis.
14.   Alternatively, an order for costs on the usual basis.”

Applicable Legal Principles

The defendants’ application can conveniently be split into two parts, which at points overlap. Firstly, the defendants move for summary dismissal of the plaintiffs’ case on the basis that it cannot possibly succeed. Secondly, the defendants claim that parts of the plaintiffs’ pleadings must be struck out on the basis that they are imprecise, immaterial or embarrassing and contradict the rules for pleadings in UCPR, Part 14.

Summary Dismissal

The defendants move under UCPR, r 13.4 for summary dismissal of the proceedings. Rule 13.4 states as follows:

“(1)   If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings:
(a)   the proceedings are frivolous or vexatious, or
(b)   no reasonable cause of action is disclosed, or
(c)   the proceedings are an abuse of the process of the court,
the court may order that the proceedings be dismissed generally or in relation to that claim.
(2)   The court may receive evidence on the hearing of an application for an order under subrule (1).”

The legal principles that apply to the defendants’ motion for summary dismissal may be shortly stated. Only in “plain and obvious” cases, where the plaintiff’s case is “so clearly untenable that it cannot possibly succeed” should the Court exercise its power to strike out pleadings or dismiss proceedings without a substantive hearing: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 (“General Steel”) at 129-130 per Barwick CJ. The Court cannot dismiss an action “once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it”: Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91 per Dixon J (as his Honour then was). The Court of Appeal has recently reiterated the test in Ren v Jiang [2014] NSWCA 388 at [49]:

“The test to be applied before entering summary judgment has been variously stated, and little is to be gained by reiterating those formulations; cf General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129. There is no controversy that the power must be exercised with "great care" and "exceptional caution": Spencer v Commonwealth [2010] HCA 28; 241 CLR 118 at [24] and [55] (noting that this was said of the lesser standard made applicable by s 31A of the Federal Court of Australia Act 1976 (Cth)). In Spencer, Hayne, Crennan, Kiefel and Bell JJ referred to the (unamended) test as "requiring formation of a certain and concluded determination that a proceeding would necessarily fail": at [53]. Repeatedly, it has been said that the court must be so certain of the outcome that to permit the proceeding to go forward would amount to an abuse of process: Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 90; Spencer at [54]; O'Brien v Bank of Western Australia Ltd [2013] NSWCA 71; 16 BPR 31,705 at [3] and [67].”

The Court is entitled to consider evidence on any application under the rule and is not confined to dealing with the matter solely by reference to the pleadings: Wenlock v Moloney [1965] 2 All ER 871; Howden v Truth & Sportsman Ltd (1937) 58 CLR 416 at 419. Subrule 13.4(2) makes this clear. That is necessary because on a summary judgment application, “the real issue is whether there is an underlying cause of action or defence, not simply whether one is pleaded”: O'Brien v Bank of Western Australia Ltd [2013] NSWCA 71; 16 BPR 31,705 at [3] per Macfarlan JA. However, where “the ultimate outcome of the case turns upon the resolution of some disputed issue or issues of fact”, the Court ought to take great caution before exercising the power to terminate an action summarily: Webster v Lampard (1993) 177 CLR 598 at 603 per Mason CJ, Deane and Dawson JJ; see also Spellson v George (1992) 26 NSWLR 666. The requirement that claims requiring resolution of disputes as to fact are not to be summarily dismissed can be expressed in terms of “taking the plaintiff’s case at the highest” in the sense that Leeming JA explained that expression in Simmons v New South Wales Trustee and Guardian [2014] NSWCA 405 at [200]:

“that assessment is to be made taking the plaintiff's case at its highest. The party applying for summary dismissal must accept the truth of all allegations in the statement of claim, and the ranges of meaning which the assertions of fact in the statement of claim are capable of bearing: Penthouse Publications Ltd v McWilliam (Court of Appeal (NSW), Priestley and Meagher JJA and Wardell AJA, 15 March 1991, unrep); Agius v New South Wales [2001] NSWCA 371 at [24].”

The Court may hear argument “even of an extensive kind” in determining whether or not the plaintiff’s case is untenable: General Steel at 130 per Barwick CJ.
In Spencer v The Commonwealth (2010) 241 CLR 118 at 131 [24] French CJ and Gummow J said:

“The exercise of powers to summarily terminate proceedings must always be attended with caution. That is so whether such disposition is sought on the basis that the pleadings fail to disclose a reasonable cause of action or on the basis that the action is frivolous or vexatious or an abuse of process. The same applies where such a disposition is sought in a summary judgment application supported by evidence. As to the latter, this Court in Fancourt v Mercantile Credits Ltd said:
‘The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried’.” [Citations omitted]

The Court will not necessarily dismiss all claims apparently filed outside the relevant limitation period. In Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 (“Wardley”) at 533 [31] Mason CJ, Dawson, Gaudron and McHugh JJ stated the following:

“We should, however, state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases. Generally speaking, in such proceedings, insufficient is known of the damage sustained by the plaintiff and of the circumstances in which it was sustained to justify a confident answer to the question. Magman International [v Westpac Banking Corporation (1991) 104 ALR 575] illustrates the problems which can arise, particularly in a case involving foreign loans.”

However, if the limitation period has obviously expired and the plaintiff knew the relevant facts at the time the cause of action accrued but made no claim for an extension of the limitation period, it may be entirely appropriate to summarily dismiss a claim: see for example Gillies v Eastlake [2014] NSWSC 611 at [110] – [117] per Garling J.

Strike Out

The defendants rely upon UCPR, r 14.28 in their application to strike out the plaintiffs’ claim:

“(1)   The court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading:
(a)   discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or
(b)   has a tendency to cause prejudice, embarrassment or delay in the proceedings, or
(c)   is otherwise an abuse of the process of the court.
(2)   The court may receive evidence on the hearing of an application for an order under subrule (1).”

In relation to the requirement for a pleading to state material facts found in the precursor rules to the UCPR, in Kirby v Sanderson Motors Pty Ltd (2001) 54 NSWLR 135 (“Kirby”) Hodgson JA (Mason P and Handley JA agreeing) said at [20] – [21]:

“[20] It might appear that these rules [the Supreme Court Rules] do not require that causes of action be stated in pleadings: the requirement is to have a statement of material facts, and indeed to have only such a statement. However, in my opinion -
(1)   “Material” means material to the claim, that is, to the cause or causes of action which are relied on.
(2)   The requirement of a statement of material facts does not exclude the allegation of legal categories, such as duty of care, fiduciary duty, trust and contract.
(3)   The general requirement to avoid surprise means that material facts must be stated in such a way that the defendant can understand the materiality of the facts, that is, how they are material to a cause of action.
[21]   Accordingly, even on the basis of these rules which are common to the District Court and the Supreme Court, I do not take cases such as Konskier as establishing that there is never any requirement to do more than set out facts. Where there is a danger of surprise, which arises particularly where there is lack of precision and clarity in the pleading, it may well be appropriate to require a Plaintiff, either in a statement of claim or in particulars, to explicitly relate the facts it pleads to specific causes of action.”

Johnson J in McGuirk v The University of New South Wales [2009] NSWSC 1424 (“McGuirk”) also set out the following principles with regards to the requirement of pleading the material facts of a claim, and noted in particular the intersection between the requirements of pleadings in the UCPR and the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in the proceedings of Civil Procedure Act, s 56:

“[21]   The function of pleadings is to state with sufficient clarity the case that must be met by a defendant. In this way, pleadings serve to define the issues for decision and ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her: Banque Commerciale SA En Liquidation v Akhil Holdings Limited (1990) 169 CLR 279 at 286, 296, 302-3. The issues defined in the pleadings provide the basis upon which evidence may be ruled admissible or inadmissible at trial upon the ground of relevance: Dare v Pulham [1982] 148 CLR 658 at 664; Banque Commerciale at 296.
…
[24] Proper pleading is of fundamental importance in assisting Courts to achieve the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in the proceedings: s.56 Civil Procedure Act 2005.
[25]   Where application is made by a party for leave to amend pleadings, the Court should have regard to considerations of case management, cost and delay: Aon Risk Services Australia Limited v Australian National University [2009] HCA 27 at [111]-[112]; (2009) 83 ALJR 951. Of course, the present application is made by the Plaintiff at an early stage in the proceedings. A hearing is not imminent. Nevertheless, the orderly progress of litigation requires the Court to apply the letter and spirit of the Civil Procedure Act 2005, in accordance with contemporary principles identified in Aon, in determining an application such as this.
[26]   The need for clarity, precision and openness in the conduct of litigation and the responsibility of parties and their legal representatives therefore flows most clearly from the statutory duty of a party and the duty in civil proceedings to assist the Court to further the overriding purpose to facilitate the just, quick and cheap resolution of the real issues in dispute: Baulderstone Hornibrook Engineering Pty Limited v Gordian Runoff Limited & Ors [2008] NSWCA 243 at 161. The need for clarity, precision and openness as part of this co-operation has been emphasised in the context of ambush or surprise: White v Overland [2001] FCA 1333 at [4].”

His Honour also considered when the Court will strike out pleadings on the basis that they are embarrassing, at [35]:

“[35] It is not the function of the court to draw or settle a party's pleading. The court is confined to the function of ensuring that pleadings are within the rules and fulfil the functions for which they exist. Objectionable matter that is so mingled with other matter may lead to the conclusion that the pleading as a whole would tend to embarrass the fair trial of the action and ought to be struck out.”

Similarly, Flick J in Takemoto v Moody’s Investors Service Pty Ltd (in liq) [2014] FCA 1081 (“Takemoto”) at [23] – [24] considered when pleadings will be struck out for a want of particularity in the following terms:

“[23] As a very general proposition, the function of pleadings is to state with sufficient clarity the case that must be met: Banque Commerciale S.A., en liquidation v Akhil Holdings Limited (1990) 169 CLR 279 at 286 to 287 per Mason CJ and Gaudron J. A practice of leaving a “footprint in correspondence” as a means of identifying matters in issue is to be “firmly discouraged”: White v Overland [2001] FCA 1333 at [4] per Allsop J (as his Honour then was). See also: Moss v Lowe Hunt & Partners Pty Ltd (No 2) [2011] FCA 18 at [33] per Katzmann J; SMEC Australia Pty Ltd v McConnell Dowell Constructors (Australia) Pty Ltd (No 2) [2011] VSC 492 at [9] per Vickery J. Rule 16.02(1)(b) requires a pleading to “be as brief as the nature of the case permits” and must “state the material facts on which the party relies”. A pleading which sets forth mere assertions or mere conclusions may be struck out. A pleading which sets out facts at too great a level of generality – or, conversely, with insufficient particularity – may also be struck out: Australian Wool Innovation Ltd v Newkirk [2005] FCA 290 at [24] per Hely J; Australian Competition and Consumer Commission v Australia and New Zealand Banking Group Ltd [2008] FCA 1623 at [2] per Greenwood J.
[24] It is nevertheless the case that a “pleading is but a means to the achievement of procedural fairness and of the efficient use of judicial resources and those of the parties by the identification of what is truly at issue”: Australian Competition and Consumer Commission v Craftmatic Australia Pty Ltd [2009] FCA 972 at [14] per Logan J. A failure to properly identify the issues to be resolved with the requisite degree of clarity, however, only occasions confusion and is productive of a waste of the time of the parties and the court, and is a waste of private and public resources: Radisich v McDonald [2010] FCA 762 per Gilmour J; Nazdall Pty Ltd, in the matter of Yowdall Pty Ltd (as trustee for the Yowdall Unit Trust) v Herrmann [2013] FCA 94 at [33], (2013) 210 FCR 264 at 273 to 274 per Reeves J.”

Generally, having regard to the overriding purpose set out in Civil Procedure Act, s 56, leave to amend a pleading should be granted if the application is made in a timely manner and for a proper purpose: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [98]; Ritchie's Uniform Civil Procedure NSW at [s 64.5]. The relevant principles applying to the Sturesteps’ motion seeking leave to amend their FASC complement those applying to the strike out motion in that leave to amend will not be given where the proposed amendments would be liable to be struck out. In Horton v Jones (No 2) (1939) 39 SR (NSW) 305 at 310, Jordan CJ held that leave to amend would generally be given “unless the proposed amendment is so obviously futile that it would be struck out if it appeared in an original pleading …”. See also Commonwealth v Verwayen (1990) 170 CLR 456 at 456, where Dawson J said:

“In granting leave to amend, a court is concerned with the raising of issues and not with their merits. Of course, an amendment which is futile because it is obviously bad in law will not be allowed. But it is no ground for refusing an amendment that it raises a claim or defence which ought not to succeed. That will be an issue upon trial.”

The Defendants’ Issues

The FASC is an extensive and elaborate document. The vast submissions of both parties in relation to the motions for and against the FASC could be characterised as Byzantine. In a pre-trial directions hearing held on 10 November 2014, the defendants’ counsel agreed to provide a list of issues arising on the motions. The hearing proceeded on the basis that both sides would address their arguments organised under those issues. This judgment addresses the same issues. In summary, they are as follows:

Issue 1: whether the Court has jurisdiction to grant the relief sought in prayers 1 and 2 of the FASC to declare as unjust and set aside certain provisions of the 11 April 2003 costs agreement.

Issue 2: whether Mr Sturesteps may bring his restitution claim, including as sub-issues:

whether Mr Khoury, as opposed to the Company, received money from the plaintiffs and if not, whether the Sturesteps’ claim for restitution of those payments is maintainable against Mr Khoury;

whether the Sturesteps may plead a claim for restitution for restitution of an overall amount allegedly overpaid without pleading (i) the individual amounts of each alleged overpayment and, relatedly, (ii) the state of mind of Mr Sturesteps at the time of each alleged overpayment;

whether Mr Sturesteps can allege a mistake as to his rights to assessment for the purposes of restitution where he was given notice of those rights in accordance with the statutory requirements in Legal Profession Act 1987, s 193(1);

whether the Sturesteps may now amend their pleadings and rely on further evidence when they have already confirmed on 14 March 2014 that they have served all the evidence on which they intend to rely;

whether the matters pleaded in FASC paragraphs 48(a), (b) and (c) are relevant “qualifying or vitiating factors” to make retention of the costs payments by the defendants unjust in the sense that French CJ, Crennan and Kiefel JJ used in Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498 at 516 [30]; and

whether the law of restitution will allow recovery from the defendants of amounts that Mr Sturesteps paid directly to counsel.

Issue 3: whether certain matters pleaded are connected with the relief the plaintiffs claim.

Issue 4: whether the Sturesteps’ claims concerning two alleged agreements dated 27 June 2011: a Deed of Agreement and a Deed of Equitable Charge on Land are maintainable, including as sub-issues:

whether the claim for relief may be made jointly given that Mrs Sturesteps is not a signatory to the Deed of Agreement;

whether there is a basis to claim relief upon the Deed of Equitable Charge on Land, given that no such document has been produced;

whether the plaintiffs may claim relief on the basis that the Deed or Deeds were:

procured by presumed or actual undue influence;

procured under duress;

unjust within the terms of Contracts Review Act, s 7 or 9(2);

procured by misleading or deceptive conduct within the meaning of Australian Consumer Law, s 18 or Fair Trading Act 1987, s 42; or

vitiated by mistake;

whether the plaintiffs can maintain that either of the defendants is liable to repay the $300,000.00 paid under the Deed in restitution;

Issue 5: whether Mr Sturesteps can seek the relief in prayers 5, 6 and 7 of the FASC, including:

whether the orders sought can be made;

if so, whether those orders can be made against Mr Khoury when, the defendant alleges, he ceased practising on his own account; and

whether the plaintiffs must identify the Court’s power to make such orders and the relevant matters justifying such orders.

Issue 6: whether the allegations of GST overpayments can be made.

Issue 7: whether claims struck out by Stevenson J and not re-pleaded in the FASC now require formal dismissal.

Issue 1: The Court’s Power To Declare Clauses Of The 11 April 2003 Costs Agreement Unjust And To Set Those Clauses Aside

By the end of the interlocutory hearing, the version of the FASC which the plaintiffs sought leave to file had evolved. The plaintiffs had originally expressed prayers 1 and 2 of the FASC as follows, with underlining to show the phrases that eventually were deleted:

“1. A declaration that clauses 8(b), 9, 10, 11, 12, 13, 15, 17, 19 and 21(c) of the costs agreement between the first plaintiff and first defendant dated 11 April 2003 are unjust within the meaning of s 208D(1) of the Legal Profession Act 1987.
2. An order that clauses 8(b), 9, 10, 11, 12, 13, 15, 17, 19 & 21(c) of the costs agreement between the first plaintiff and first defendant dated 11 April 2003 be set aside pursuant to s 208D(1) of the Legal Profession Act.”

The parties agreed that the present applications should be determined on the basis that the Legal Profession Act 1987 is applicable, rather than the Legal Profession Act 2004 or the Legal Profession Uniform Law, which came into effect on 1 July 2015. The defendants argued that the Court does not have jurisdiction to grant relief based upon Legal Profession Act 1987, s 208D(1) because that section granted jurisdiction to a costs assessor rather than the Court. Subsection 208D(1) provides as follows:

“(1) A costs assessor may determine whether a term of a particular costs agreement entered into by a barrister or solicitor and a client is unjust in the circumstances relating to it at the time it was made.”

The defendants contrasted this provision with the grant of power made under Contracts Review Act 1980, s 7, authorising “the Court” to, for example, make an order declaring a contract void, in whole or in part, where it finds a contract or a provision of a contract to be unjust. The defendants submit that provisions similar to s 208D, giving power to an administrative officer but not to a court, are common: see for example, Strata Schemes Management Act 1996, s 140, which grants power to an adjudicator to make certain orders relating to repairs to and alterations of strata property but does not give such powers to a court, the court’s role being limited in that legislation to the exercise of supervisory, appellate jurisdiction.
The defendants argue that the decision of Einstein J in Currabubula Holdings Pty Ltd v State Bank of New South Wales [2000] NSWSC 232 (“Currabubula”) supports by analogy their approach to the limits of the Court’s s 208D(1) jurisdiction. In Currabubula Einstein J considered whether s 208K of the Legal Profession Act excluded the Court’s jurisdiction to give declaratory relief as to the proper interpretation of its costs orders, following the decision of a costs assessor. Legal Profession Act 1987, ss 208L and 208M provided for the Court to hear appeals from a costs assessor’s decision. Section 208K, however, stated:

“A costs assessor’s determination of an application is binding on all parties to the application and no appeal lies in respect of the determination except as provided by this Division.”

Einstein J found at [60] – [61] that “despite the strength of the presumption against this Court being deprived of its declaratory jurisdiction”, he could find no escape from the conclusion that “the effect of s208K is to make [ss 208L and 208M] the exclusive means of pursuing an appeal from the costs assessor and to exclude the Court’s declaratory jurisdiction ‘in respect of a determination.’”. In the alternative, Einstein J found at [69] that if the Act did not exclude the Court’s jurisdiction to give declaratory relief, he ought not to exercise the power to do so, because thereby “the Court would be circumventing the costs assessor’s jurisdiction and undermining the costs assessor task”.
The defendants also submit that the prayer for a declaration that the costs agreement clauses are “unjust” should also be summarily dismissed in so far as the substantive relief to which it is linked fails because of the present argument. They refer to In Sidameneo (No 456) Pty Ltd v Alexander (No 2) [2012] NSWCA 87, in which Young JA (with whom Beazley and Basten JJA agreed) identified “one of the principal guidelines on the utility of declarations” laid down by the English Court of Appeal in Dysart (Earl) v Hammerton & Co [1914] 1 Ch 822 at 834, per Cozens-Hardy MR, as:

“The rule enabling the Court to make a declaratory decree ought not to be applied where a declaration is merely asked as a foundation for substantive relief which fails.”

The Sturesteps have amended the FASC so that they no longer base their relief on s 208D(1) of the Legal Profession Act. Instead they rely upon the Court’s inherent jurisdiction to regulate the behaviour of its own officers, including solicitors. They rely upon several judgments of this court, the most recent of which is Mathews AJ’s decision in Estate of Allwood v Benjafield [2009] NSWSC 1383 (“Benjafield”). Mathews AJ in Benjafield at [38] referred to the “abundant and consistent authority” consistent with the proposition that the Court’s inherent jurisdiction allows it to order a solicitor to render a bill of costs. That common law power was, Mathews AJ said, consistent with the power contained in Legal Profession Act, s 209C. Mathews AJ relied upon the statement of Young J (as he then was) in Parramatta River Lodge Pty Ltd v Sunman (1991) 5 BPR 12,038 that:

“… a solicitor is the officer of the court and, no matter how inconvenient it might be, the court expects that in accordance with the highest standard of the profession the solicitor will give a fully detailed list of charges to the person liable to pay the bill and if asked will submit the bill for moderation by an officer of the court. That is the price of being a member of an honourable profession: that is the price of being admitted by this Court to practise law in this State.”

The Sturesteps also referred the Court to Re Morris Fletcher & Cross’ Bill of Costs [1997] 2 Qd R 228, where Freyberg J held that the court has an inherent power to order taxation before a bill is delivered.
These cases each refer to the Court’s power to order the delivery of a bill of costs. These cases do not deal with the Court having the power to declare a costs agreement to be “unjust” and to set it aside on that basis.
The Sturesteps also rely upon Wentworth v Rogers (2006) 66 NSWLR 474 and Griffith v Australian Broadcasting Corp [2013] NSWSC 750 (“Griffith”) at [35]-[52]; and Wende v Horwath (NSW) Pty Ltd (2014) NSWLR 674; [2014] NSWCA 170 at [21]-[26] to support their contention. But those decisions show that the power under the Legal Profession Act 1987 to assess bills of costs and costs agreements lies first with the costs assessor, subject always to the court’s supervisory jurisdiction under ss 208L and 208M. Thus, when performing a costs assessment “it is the cost assessor's duty and function to determine as best he or she can such issues of fact and law as arise on the cost assessment in order to discharge their function under s 367 of the Act”, and it is not for the Court to pre-empt the cost assessor’s role in doing so, because “the starting position is that it is Parliament's assessment that the appropriate forum to decide these issues is via the statutory mechanisms it created”: Griffith at [46] and [53].
In my view it is well arguable that the same logic applies to the cost assessor’s function of determining whether a term of a costs agreement is unjust under s 208D: Parliament decided that that function is the cost assessor’s to perform at first instance, not the Court’s. Once a costs assessor has made the s 208D determination that a term of a costs agreement is unjust, the costs assessor may then proceed to assess a bill of costs made under that agreement, even if that costs agreement would otherwise not have been assessable under s 208C. Section 208C provides as follows:

“(1)   A costs assessor is to decline to assess a bill of costs if:
(a)   the disputed costs are subject to a costs agreement that complies with Division 3, and
(b)   the costs agreement specifies the amount of the costs or the dispute relates only to the rate specified in the agreement for calculating the costs.
(2)   If the dispute relates to any other matter, costs are to be assessed on the basis of that specified rate despite section 208A. The costs assessor is bound by a provision for the payment of a premium that is not determined to be unjust under section 208D.
(3)   This section does not apply to any provision of a costs agreement that the costs assessor determines to be unjust under section 208D.
(4)   This section does not apply to a costs agreement applicable to the costs of legal services if a barrister or solicitor failed to make a disclosure in accordance with Division 2 of the matters required to be disclosed by section 175 or 176 in relation to those costs.”

But the Sturesteps submit that the Court’s inherent power with respect to the discipline of legal practitioners, which is preserved by Legal Profession Act, s 171M (see Law Society of NSW v Foreman (1994) 34 NSWLR 408 at 419F and Barwick v Law Society of New South Wales (2000) 169 ALR 236 at [118]) is a source of power for the Court to declare the costs agreement unjust and subsequently to set it aside. But even if the power to discipline legal practitioners, empowers the Court to make a declaration that the costs agreement is unjust or indeed just to set it aside, that would probably not be the Court’s first choice where the statutory framework clearly gives the costs assessor, not the Court, that role.
However the Sturesteps case is not unarguable on this issue and is not destined to fail so far as that can be ascertained at this interlocutory hearing. Much will depend upon the full circumstances that emerge at hearing.
Then the defendants further contend that the Sturesteps can no longer recover the costs of legal services, because their claim will be statute barred, as Limitation Act 1969, s 14 precludes any such entitlement. The defendants’ contention is that Symonds v Raphael (1998) 148 FLR 171 stands for the proposition that, in the context of the fiduciary relationship as between solicitor and client, the limitation period under the Limitation Act for any claim by a client seeking to set aside a costs agreement runs from when the client first receives a bill of costs from the solicitor. In this case the first bill of costs issued was dated 31 May 2003. The defendants point out that over 12 years has passed since the date of that bill of costs.
But this is not a case where the plaintiffs’ action should be struck out on Limitation Act grounds. Wardley considerations are applicable. Here the plaintiffs say they were under a misconception as to their rights that was induced by the solicitor who now seeks to mount a limitation argument against them. The full pleading and evidence picture may raise issues as to whether the limitation period was suspended for a time. The plaintiffs’ claim should not be struck out now on this ground.
The defendants finally contend that given Mr Sturesteps’ payment of monies under the costs agreement, together with his failure to avail himself of the review regime set out in Legal Profession Act, s 199, a claim now setting aside the costs that had been agreed would cause irremediable prejudice to the defendants. The submission appears to be in substance that it is an abuse of process to allow Mr Sturesteps to continue to challenge the costs agreement’s validity because he has been guilty of laches, and by standing back and taking no steps in relation to the agreement he has acquiesced as to its validity: Nocton v Lord Ashburton (1914) AC 932; Symonds v Raphael (1998) 148 FLR 171.
But this too is a matter for evidence at a trial. Issues of irremediable prejudice due to delay and laches can only be determined when the full facts are known. This part of the FASC will not be struck out.

Issue 2: Mr Sturesteps’ Restitution Claim

Within issue 2 the defendants have raised a number of issues about Mr Sturesteps’ restitution claim, which are considered below under subheadings (a) to (f).
Mr Sturesteps’ restitution claim is for money that Mr Sturesteps allegedly overpaid to the defendants under a claimed mistake as to his rights to assessment of legal costs. Mr Sturesteps submits that he paid more for the costs claimed by Mr Khoury in the bills of costs than would have been assessed as the amount of recoverable costs upon assessment of the bills of costs under Part 11 of the Legal Profession Act. Alternatively, Mr Sturesteps submits that he lost the opportunity to have the costs claimed in the bills of costs assessed by a costs assessor and thereby reduced to a significantly lower amount, that was either objectively reasonable or otherwise a recoverable amount of costs for the purposes of Part 11 of the 1987 Act. Mr Sturesteps claims he is owed $721,915.36 on this restitutionary basis, being the difference between the $2,770,578.08 he paid for costs billed and $2,048,662.72, the amount that allegedly would be recoverable for costs billed upon assessment and review under Part 11 of the Legal Profession Act, had Mr Sturesteps applied for such assessment and review.
The restitution claim relies upon pleaded mistakes of both of fact and law. The pleaded mistakes are that Mr Sturesteps took no steps to seek an assessment of the costs claimed in the bills of costs within the time permitted under the 1987 Act, and paid the costs claimed in the bills of costs without seeking an assessment of them. The pleadings set out the reasons given for these mistakes at FASC, para 36 as follows:

“(a)   Mr Sturesteps considered himself bound by the terms of the costs agreement referred to in paragraph 6 above, which made the costs due and payable within 14 days of receipt of bills (cl. 9), which limited his rights of objection to a 30 day period if the objection was made to Mr Khoury personally (cl. 11) and that, as he believed he had a costs agreement which was compliant with the Act, he believed that he had no right to an assessment or review of the costs claimed in the bills of costs that was otherwise available under the Act (cl. 15);
(b)   Mr Sturesteps understood the costs assessment notifications, which were in much smaller type than the rest of the type contained in each bill, were a pro forma notice contained in all bills of costs issued to all clients irrespective of whether they had a costs agreement which was compliant with the Act or not, and that it only had effect where there was a non-compliant costs agreement;
…
(f) Mr Sturesteps believed that, unless Mr Khoury withdrew his claim for costs or compromised the costs he was claiming in the bills of costs, consistently with the terms of clauses 9, 11 and 15 of the costs agreement, in response to the costs complaints, Mr Sturesteps was liable to pay the costs in the amounts claimed, and believed that, if he did not pay them within 30 days of delivery of the bills of costs, he would become liable to pay interest on them under the Supreme Court Act, 1970, consistently with cl. 12 of the costs agreement;
(g) Mr Sturesteps believed that he had no right of assessment or review of the costs claimed in the bills of costs and, accordingly, he took no steps to seek an independent assessment of the costs claimed, or to pursue the costs complaints, or to pursue the other objections he had made to Mr Khoury about the costs he was claiming with a costs assessor under Part 11 of the Act;
(h) Mr Sturesteps believed that the costs billed were due and payable as a debt within 14 days of receipt of each bill under cl. 9 of the costs agreement, relevantly unaware that none of the costs could ever have become payable as a debt due to Mr Khoury, or alternatively, to the Company, by virtue of the operation of s. 182(1) of the 1987 Act;
(i)   Mr Sturesteps believed that Mr Khoury, or alternatively, the Company, was entitled to sue for recovery of the costs as billed after 30 days had elapsed after delivery of each bill, relevantly unaware that Mr Khoury (or the Company) had no such right, by virtue of the operation of s. 192(1) of the 1987 Act; and
(j) Mr Sturesteps paid the costs billed to him relevantly unaware that they were assessable without regard to the costs agreement by virtue sections 208C(3) and 208C(4) of the 1987 Act”.

Issue 2(a): Whether The Claim For Restitution Against Mr Khoury, As Opposed To The Company, Is Maintainable

The first sub-issue is that the defendants claim that Mr Khoury never received money from the plaintiffs. They claim that the incorporated legal practice, the company received the plaintiffs’ money for the payment of its bills. They submit that a condition of any claim by a person against a second person for restitution by way of unjust enrichment for money paid under mistake of fact, is that the second person actually received the payment. Therefore, the defendants argue, no claim for restitution against Mr Khoury is maintainable.
The plaintiffs plead that:

“32.   At all material times as from 11 April 2003 Mr Sturesteps made payments to Mr Khoury, in satisfaction of one of more of the bills of costs for each payment, either by:
(a)   sending to him cheques drawn in favour of “Benjamin & Khoury”;
(b)   making credit card payments to the “Benjamin & Khoury” credit card merchant number; or
(c)   making payments directly to Senior Counsel or to various Counsel who had been retained by Mr Khoury for the benefit of Mr Sturesteps under Mr Khoury’s own costs agreements with Counsel, being payments made at the direction of Mr Khoury after he had sent a copy of Counsels’ memoranda of fees to Mr Sturesteps and requested that Mr Sturesteps pay Counsel directly,
on the dates, by the payment methods and in the amounts set forth in the schedule which is Annexure B hereto (Annexure B) (the payments of costs).”

Annexure B to the FASC records some 32 payments that Mr Sturesteps made to ‘B&K’, Benjamin & Khoury, and a further 22 payments that he made directly to counsel, between 1 November 2003 and 5 January 2012. The defendants do not fundamentally disagree with the amounts that Mr Sturesteps says he paid. At issue, however, is whether the named payee, Benjamin & Khoury is a business name. The defendants claim that by paying Benjamin & Khoury, Mr Sturesteps was in fact paying the Company. Mr Sturesteps says that Mr Khoury was the payee.
In support of the defendants’ argument that the payments were made to, and received by, the Company, the defendants note that all of the payments Mr Sturesteps made, excluding those made to counsel and one relating to a deed of settlement executed in November 2011, were made into the Company’s trust account. Additionally, the defendants caused bills of costs to be sent to Mr Sturesteps that generally came under cover of letters at the bottom of which was printed the words “Benjamin & Khoury Pty Limited ABN No. 64 104 057 043”. The defendants also point to notations in the same form that often appear at the bottom of the issued bills of costs. The cumulative effect of the evidence is, the defendants argue, that leave should not be granted to amend the pleadings to allow Mr Khoury to be joined as a defendant.

But the plaintiffs disagree. Firstly, they say that at this stage, in the context of a strike out application, the truth of their case as pleaded must be accepted.
Secondly, they say that contractually Mr Khoury must be the recipient of the payments made under the retainer agreement pleaded in the FASC. That is an agreement was made between Mr Sturesteps and Mr Khoury personally. And they contend that the 30 June 2003 letter referred to at [13] above could not have unilaterally achieved the novation of that agreement to the Company or the assignment of the benefits of the retainer agreement to the Company. For such a consequence, Mr Sturesteps’ consent would be necessary, particularly given the terms of the Costs Agreement, c 21(c), which stated that “The terms of this Agreement will continue to apply, notwithstanding … incorporation of the legal practice as a solicitor corporation”. But the plaintiffs point out Mr Sturesteps did not consent. Novation of the retainer agreement could only occur if the parties “agreed that a new contract is to be substituted for the old and the obligations of the parties under the old agreement are to be discharged”: ALH Group Property Holdings Pty Limited v Chief Commissioner of State Revenue (2012) 245 CLR 338 at [12].
Thirdly, the plaintiffs characterise their case as one of constructive receipt. They say that once Mr Sturesteps paid Mr Khoury in return for the services that he (as opposed to the Company) provided, it does not matter where Mr Khoury chose to bank Mr Sturesteps’ payments. Mr Khoury had constructive receipt of Mr Sturesteps’ payment notwithstanding his depositing of it to the bank account of another entity: Federal Commissioner of Taxation v White [2010] FCA 730 at [25], [28] per Gordon J; Sent v Federal Commissioner of Taxation [2012] FCA 382 at [50], [63]-[82] per Murphy J; aff. [2012] FCAFC 187 at [31]; Income Tax Assessment Act 1997 (Cth), ss 6-5(4); 6-10(3).
Finally, the plaintiffs argue that, on a policy basis, a solicitor should not be able to prevent his or her client from claiming funds in restitution from that solicitor by device of depositing the client’s cheques to the bank account of a company without assets. In circumstances where the client never retained the company as solicitor, which is the plaintiffs’ submission in this case, an injustice would otherwise be perpetrated on the client.
The plaintiffs’ contentions are the more persuasive. Although the presently available evidence seems to show that Mr Sturesteps’ payments of his legal fees were banked by the Company, his restitutionary claim against Mr Khoury is not so clearly untenable that it cannot possibly succeed. The Sturesteps contention that the novation to the company was not effective is certainly arguable on the materials presently available and could only be determined on all the evidence at trial. Without deciding the issue, the evidence does not discount the possibility that Mr Khoury did himself receive the amounts from Mr Sturesteps, in that Mr Khoury may have provided the legal services and thus may be taken to be the one who received the funds. Where Mr Khoury chose to bank the funds is not determinative of the identity of the recipient of the funds. And where some of the bills of costs and covering letters provided to Mr Sturesteps were endorsed with the name and Australian business number of the Company, others were not. Even on the present evidence those invoices are not decisive of the issue. This issues partly involves questions of agency and characterisation and can only really be decided at a trial. So it not appropriate now to order summary dismissal on that ground, or to preclude the amendment of the plaintiffs’ pleadings to include this restitutioners claim.

Issue 2(b): Whether Mr Sturesteps Must Plead Each Alleged Overpayment In Respect Of The 53 Claims For Restitution And His State Of Mind In Relation To Each Overpayment

By paragraph 37 of the FASC, the Sturesteps plead the payments that Mr Shuresteps made to Benjamin & Khoury pursuant to various bills of costs. It is from these payments that the first plaintiff claims his entitlement to restitution arises. Paragraph 37 appears in the following terms:

“Mr Sturesteps paid the costs claimed in the bills of costs listed in Annexure A hereto, by the payments listed in Annexure B hereto, without seeking an assessment of those costs by a costs assessor under Part 11 of the Act, in consequence of the failure to seek assessment mistakes and payment mistakes referred to in paragraph 36 above.”

As noted above, annexure B to the FASC consists of two pages listing individual payments by Mr Sturesteps to Benjamin & Khoury and to counsel. The amounts paid total over $2.7 million. The annexure also identifies an amount that the plaintiffs allege constitutes an overpayment by the plaintiff: $721,915.36. However, Annexure B does not identify, with respect to each individual payment by Mr Sturesteps, what proportion of that payment was an overpayment.
The defendants submit that the plaintiffs cannot plead the overpayments in the way that they have. They say that it is fundamental to pleading such a claim for restitution of an amount overpaid that, in relation to each payment alleged to have been made under a mistake, the plaintiff pleads: the payor, the payee, the date of the alleged payment, the amount alleged to have been paid by mistake, and the mistake alleged to have caused the payment.
The defendants say several issues are created, due to the global way in which the plaintiffs plead the overpayment. The defendants submit that because the plaintiffs have made their allegations of overpayment globally, the FASC’s claims concerning payments alleged to have been made are confusing and inconsistent. The defendants also say that once payments are treated individually, limitation defences may apply to many of the overpayment amounts: that possibility is obscured if one considers the overpayment globally. Stevenson J made a similar observation in his earlier judgment in these proceedings at [13]-[14]:

“The individual payments said to have been made under mistake are not identified. As Mr Connor submitted, each allegedly mistaken payment constitutes a separate restitutionary claim and should be so pleaded. One issue in the dispute is that defences may arise under the Limitation Act 1969 in relation to some, but perhaps not all, of the claims.
The pleading does not, but should, identify with precision what payments were made and what mistake of the payer is alleged to have been operative at the time of each of the payment[s].”

The defendants also submit there is a need to plead the particular state of mind of the plaintiff at each point that he made an alleged overpayment, that being a requirement for success of a claim in restitution. The defendants cite Australian Financial Services and Leasing Pty Ltd v Hills Industries [2014] HCA 14 at [118] (“Hills”) to support this contention. In Hills Gageler J relies upon the following statement of Hamilton J in Baker v Courage & Co [1910] 1 KB 56 at 64-65 as stating the applicable law:

“The question whether money can be recovered as having been paid under a mistake of fact depends upon the state of mind of the plaintiff at the time when the money was paid, just as in an action of deceit the liability of the defendant depends upon the untruth of the representation having been present to his mind at the time that the representation was made. You may be slow to believe the plaintiff if he says he had known the true facts but had forgotten them, but if you once arrive at the conclusion that he had in fact forgotten them and had paid the money under a misapprehension as to those facts, then he is entitled to recover the money unless he is already barred by the Statute of Limitations.”

Gageler J noted in Hills that, the cause of action to recover money paid under a mistake of fact was held to accrue at the date of payment, the applicable limitation period being six years.

The Sturesteps explain that particular amounts said to be overpaid are identified in an annexure to the affidavit of Michael John Dudman dated 12 March 2014. Mr Dudman is a specialist costs consultant. The annexure is a notice of objection which comprehensively identifies the profit costs and disbursements for Mr Sturesteps’ retainer of Mr Khoury that Mr Dudman believes were fair and reasonable within the meaning of the legislation. The plaintiffs submit that the defendant can already understand the overpayment alleged with respect to each bill by cross-referencing Annexure B and the annexure to Mr Dudman’s affidavit.
Moreover the plaintiffs submit that they are not in a position to plead the precise amount constituting an overpayment in relation to each payment the plaintiffs have made, as opposed to the overpaid amount in relation to each bill. This is because the plaintiffs did not send Benjamin & Khoury discrete payments for each invoice. Instead, they say that as is the case with many clients who have litigation on foot over a long period, in effect the plaintiffs paid successive lump sum instalments of the total amount said to be owing. The plaintiffs have no knowledge of how the defendants allocated those amounts to outstanding bills. Besides, under the legislation the plaintiff submits it is the overall costs billed that are assessed and determined to be unreasonable, rather than particular payments, and so if the plaintiffs successfully seek an assessment, their entitlement will be determined with the whole amount that is determined to be an overpayment.
And, the plaintiffs submit that it is neither necessary nor desirable to plead each instance of overpayment. This is because, they say, the Legal Profession Act 1987 does not task the costs assessor to assess each individual entry discretely, but rather a global assessment of the costs of a particular retainer must be undertaken. This global approach, the plaintiffs say, is necessary properly to assess components of the work performed, such as inter alia the practitioner’s skill, labour and responsibility, the complexity, novelty or difficulty of the matter, and the quality of the work done: Legal Profession Act, s 208B. Therefore, treating each payment as an individual cause of action does not mesh with the global rationale of the statutory regime for assessing costs.
The plaintiffs also submit that, as the defendants would have them plead the matter, the logical result in terms of relief would be a specific order for repayment of a specific proportion of each payment listed in FASC annexure B, of which there are 42 payments over an eight year period. A claim for such relief would be unusual, to say the least, and not consistent with authority.
The plaintiffs’ submissions are the more persuasive. The plaintiffs are under an obligation to plead specifically any matter that otherwise might take the defendants by surprise: UCPR, r 14.14. That general requirement means that the plaintiffs must state material facts in such a way that a defendant can “understand the materiality of the facts, that is, how they are material to a cause of action”: Kirby at [20] per Hodgson JA. But this can be done in a number of ways provided the case is clear. It does not all have to be in the pleadings. Some of the material the plaintiff relies on is already now in Mr Dodman’s expert evidence. Moreover the actual dates of payment do not seem to be in dispute and the pleading is clear enough that the plaintiffs allege they made the same mistake and had the same state of mind for each payment. Directions will be given before trial, when evidence is complete, to agree on dates and amounts of payments. Isolating the precise amount of overpayment in each payment should ultimately only be a matter of mathematics that will be clear enough to all sides before trial. There seems to be no point in making it a pleading issue.

Issue 2(c): Whether The First Plaintiff May Allege A Mistake For The Purpose Of Founding His Claims For Restitution Where He Was Informed Of His Rights In Accordance With The Statutory Requirements In Legal Profession Act, s 193 And Legal Profession Regulations 2002, r 45(1)(d)

Mr Sturesteps’ claim for restitution is based upon an alleged mistake as to his rights to assessment of Benjamin & Khoury’s bills of costs. The defendants say that attached to the bills of costs issued to Mr Sturesteps were statements required by the statute and its regulations which notified Mr Sturesteps that he was entitled to apply to have the costs assessed under Part 11 of the Legal Profession Act within 12 months after being given the bill. The plaintiffs agree that some of the bills of costs did give the relevant notification. But they say that there are special reasons why that notification was not sufficient to put Mr Sturesteps on notice of his rights to an assessment. They say therefore that that notification was insufficient to cure Mr Sturesteps of the operative mistake relevant to his claim for restitution.
Legal Profession Act 1987, s 193(1) states that the regulations may make provision for or with respect to the form of, and the particulars to be included in, bills of costs. Legal Profession Regulations 2002, reg 45 provides for such particulars and states relevantly as follows:

45 Particulars in bill of costs
(1) For the purposes of section 193 (1) of the Act, the following particulars are to be included in a bill of costs:
(d) a statement:
(i) in a case where the bill of costs is given to a client—that the client may apply to have the costs assessed under Part 11 of the Act, but that if the costs have been wholly or partly paid, the application must be made within 12 months after the client is given the bill of costs, or

The plaintiffs agree that some 30 of the 71 bills of costs that were given to Mr Sturesteps did include the statutory notification required by r 45(d)(i). An example of that notice, from the first bill dated 30 June 2003, is as follows:

“You may apply to have the costs assessed under Part 11 of the Legal Profession Act, But that [sic] if costs have been wholly or partly paid, the application must be made within 12 months after you are given the bill of costs”.

However the Sturesteps’ case is that Mr Sturesteps did not understand the notice and that he nevertheless was mistaken as to whether he had a right to assessment. That is due to a term in the costs agreement with Benjamin & Khoury. The costs agreement dated 11 April 2003 stated, in clause 15, that:

“15 YOUR RIGHT OF REVIEW OF COSTS
The Act provides for the review and assessment of your legal costs for their fairness and reasonableness by a Costs Assessor appointed by the Supreme Court.
That right is not available to you in certain circumstances where there is a costs agreement which complies with the Act, unless the agreement is determined by a Costs Assessor to be unjust. …”

The Sturesteps’ submission is that costs agreement, clause 15, nullifies the effect of the statutory notice displayed on the bills of costs. Due to that clause, Mr Sturesteps says that he believed that he was precluded from having his costs assessed under the Legal Profession Act, because he believed the costs agreement did comply with the Act and that the agreement had never been set aside as unjust. In light of that, Mr Sturesteps says that he believed that the costs assessment notification in the statutory form displayed in the bills of costs were pro forma notifications which had no application to him because, as far as he was aware, he had a compliant costs agreement.
The plaintiffs answer to this is persuasive. The Sturesteps submit that in this application for summary dismissal, the defendants may not challenge Mr Sturesteps’ pleaded mental state. The defendants’ issue is with the mistake that Mr Sturesteps pleads he was operating under at the time that he made the payments to Benjamin & Khoury. Mr Sturesteps’ mental state is a disputed question of fact whose resolution at trial is pivotal to the ultimate success of this part of the claim. The Court ought to exercise great caution before exercising the power to terminate an action summarily: Webster v Lampard (1993) 177 CLR 598 at 603 per Mason CJ, Deane and Dawson JJ. The question must go to trial.
The defendants seek to outflank this response. They argue that as a matter of law, Mr Sturesteps could not possibly have operated under the claimed mistake necessary to his claim for restitution. They submit that the inclusion of the statutory notice together with the bills of costs had the effect, as a matter of law, of notifying Mr Sturesteps as to his rights to assessment and thereby curing any mistake that he alleges. The reason why the statutory notice must operate in law to make Mr Sturesteps aware of his rights to assessment, the defendants contend, is that any other result would not achieve the objectives of certainty and finality found in Part 11 of the Legal Profession Act. Section 99 of that Act and Legal Profession Regulation, reg 53 together require any application for costs assessment to be made within 12 months after the relevant bill is given to the client. The defendants point to those provisions as showing that the legislature intends the Act’s assessment process to be certain and final.
Whether the inclusion of the r 45(d)(i) notice does, as a matter of law, mean that the recipient of the notice is deemed to have knowledge of the statutory scheme for costs assessment under Legal Profession Act, Division 6, is a question of law that remains to be determined, and upon which the rights of the parties depend. The Court gave the parties almost two weeks after the hearing of these applications to find relevant authorities on this issue. Neither party could identify authority for the proposition that the statutory notice, once included in a bill of costs, had that deeming effect for which the defendants contend. If the statutory notice does not have the effect of deeming Mr Sturesteps as the notice’s recipient to have a particular belief as a matter of law, it remains a question of fact to be determined at trial what belief Mr Sturesteps actually held. Real questions of fact and law therefore remain to be determined, so it is not competent for the Court to dismiss this part of the action now on this ground: Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91.

Issue 2(d): Having Confirmed Service Of All Evidence On Which They Intend To Rely, Whether The Sturesteps May Amend Their Pleadings And Rely On Further Evidence

In the Expedition List before Stevenson J, the Sturesteps agreed to file their evidence in support of their statement of claim by 13 March 2014. On 14 March 2014 counsel for the Sturesteps informed the Court that the Sturesteps had served all the evidence upon which they wished to rely. The defendants now submit that, final evidence having been filed, the Sturesteps’ pleadings have closed, and they may not rely on any cause of action in addition to those identified within the ASOC, nor rely on any further evidence beyond that which has been filed in this motion for summary dismissal.
The Sturesteps submit that the FASC should not be confined to pleading issues which were raised in the original statement of claim. This is so they submit for several reasons. First, their evidence was put on for the purposes of expediting pre-trial processes in the Expedition List. Following Stevenson J’s orders on 6 June 2014, the proceeding is no longer in that list. The Sturesteps say therefore that they ought not to be restricted in pursuing a meritorious case now because of orders made for procedural expediency in a different list. Secondly, the Sturesteps submit that their case at trial will rely upon the receipt of documents from the defendants, which documents are the subject of notices to produce, with which at the time of the hearing the defendants had not complied. Until receipt of those documents, the Sturesteps say that they will not know the full scope of their case against the defendants. Thirdly, it is relevant that the Stevenson J struck out the pleadings in relation to which the Sturesteps filed their evidence. The FASC is a new pleading, and so merits the consideration of new evidence. Counsel for the Sturesteps submits that to hold his clients to the old pleadings and body of evidence filed in materially different circumstances would constitute a denial of procedural fairness.

And even if the Court were prepared to make a further dismissal and costs order in respect of these claims, it is now wholly premature to consider making a UCPR 12.10 order, which assumes that the party whose claim has been dismissed “commences further proceedings”. That has not happened yet. Nor is there any threat of that happening.
But there is another point to be made. The claims that the Sturesteps have decided not to include in the FASC are closely related to the subject matter of their present action. It would be unreasonable for them to rely upon those claims in later proceedings if they were not advanced now. It would not be reasonable for the Sturesteps to seek later to bring these claims that they have now decided not to press. Doing so later would likely amount to an abuse of the Court’s process, and such claims would be liable to be stayed at general law: Port Of Melbourne Authorityv Anshun Pty Ltd (1981) 147 CLR 589.

Issue 8: The Plaintiffs’ Newly Expressed Fiduciary Duties Claim

In the ASOC analysed before Stevenson J, the Sturesteps had included claims for breaches of fiduciary duties owed by Mr Khoury to the Sturesteps. The claims were based upon the retainer agreement and Mr Khoury’s statutory obligations to satisfy costs disclosure and costs billing requirements. The Sturesteps pleaded in the ASOC that Mr Khoury had a duty not to allow Mr Khoury’s own pecuniary interests to conflict with those of the Sturesteps. The pleading, located in paragraphs 35, 36, 37 and 38 of the former ASOC, stated that Mr Khoury had breached his fiduciary duties because:

“Mr Khoury preferred his own common law, equitable and statutory rights … and the rights of the Company, of which he was solicitor director and a shareholder, over the contractual, equitable and statutory rights of [the] Sturesteps arising under the 1987 Act and under the general law.”

Stevenson J at [19] of his judgment, rejected the pleading in that form for the following reasons:

“Further, a claim is made that Mr Khoury has acted in breach of his fiduciary duty to the plaintiffs by allowing his pecuniary interests to conflict with those of the plaintiffs. That is a very serious claim to make against anyone, let alone a solicitor. The breach is alleged to have occurred by Mr Khoury by “allowing” Mr Sturesteps to conduct himself as set out in numerous earlier paragraphs of the pleading. In my opinion, that is not an appropriate way to plead such a grave matter. If that claim is to be persisted with, the pleading must state with precision what Mr Khoury did and failed to do, and how precisely any conflict of interest is said to have arisen.”

On 14 November 2014, the Sturesteps served the FASC in its current form, which became Exhibit 3 in the proceeding. The Sturesteps have amended their fiduciary duty claim in the FASC, so that it now seeks equitable compensation in the alternative in relation to the restitution claims, and now sets out the fiduciary claims as follows:

“7A. Mr Khoury owed Mr Sturesteps a fiduciary duty in respect of the negotiation, drafting, the explanation of the terms of, execution and performance of the retainer agreement and the costs agreement (the retainer and costs agreements fiduciary duty).
…
45A. In consequence of the matters pleaded in paragraphs 8-35, 36A and 44-45 above, and by preferring his own interests, or those of the Company, as a solicitor to the interests of his client, Mr Sturesteps, in that manner, in respect of the question of costs incurred under his retainer from Mr Sturesteps, Mr Khoury breached the retainer and costs agreements fiduciary duty he owed to Mr Sturesteps (the breach of fiduciary duty).

In the defendants’ submission, the Sturesteps have ignored Stevenson J’s statement concerning the requirements for proper pleading of such serious allegations. Paragraph 7A is now a claim to the existence of a wider duty than previously alleged, and lacks any precision. The defendants also submit that the paragraph treats a fiduciary duty as being prescriptive, rather than proscriptive, contrary to the fundamental nature of fiduciary duties identified in cases such as Howard v Commissioner of Taxation [2014] HCA 21 (11 June 2014), per French CJ and Keane J at [31] and Hayne and Crennan JJ at [56].
The Sturesteps contend that the content of the pleaded fiduciary duty is that Mr Khoury was obliged not to put his own interests ahead of those of his client. Such a fiduciary duty arises in the circumstances of a solicitor drafting a retainer agreement or costs agreement for a client: Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 (“Foreman”) at 435E-436C per Mahoney JA. The Sturesteps claim that a solicitor who misleads a client about the client’s rights when drafting the retainer agreement breaches that fiduciary duty by preferring his own interests over those of the client.
The Sturesteps argue that the breach of this duty pleaded at FASC, paragraph 45A shows that the duty owed is to refrain from doing something, rather than to take an action, and thus is proscriptive, not prescriptive. The alleged breach is thus that Mr Khoury failed to refrain from preferring his own interests: “[Mr Khoury] preferr[ed] his own interests, or those of the Company, to the interests of his client, Mr Sturesteps, in respect of … costs incurred under his retainer from Mr Sturesteps …”.
In relation to new paragraph 45A, the defendants complain that the breaches of duty alleged are contained in 34 separate paragraphs that are incorporated by reference into paragraph 45A, and the Sturesteps have therefore not described the case against them with adequate precision. The pleading, the defendants submit, is contrary to UCPR, r 14.7, which requires that “a party’s pleading must contain only a summary of the material facts on which the party relies, and not the evidence by which those facts are to be proved” (emphasis added). The repetition by cross-reference of facts that are material to other claims does not constitute the pleading of only the material facts relevant to the breach of fiduciary duty claim.
The Sturesteps’ reply to this in turn is that the form of pleading conforms with UCPR, r 14.8, which requires that a “pleading must be as brief as the nature of the case allows. They claim that the same facts support both a case of breach of fiduciary duty and restitution for unjust enrichment (FASC [8]-[36A]; [44]-[45]) and undue influence, duress, misleading and deceptive conduct (FASOC [53]-[55]), so that there is no reason to repeat the facts each time they are relied on for a separate cause of action.
But in my view the Sturesteps’ repleaded fiduciary duty claim is really no more precise now than it was before Stevenson J. The duty itself requires no further material facts to be pleaded in order to be understood, as the type of fiduciary duty pleaded is one well recognised in cases such as Foreman. But the defendants’ actions by which Mr Khoury is alleged to have breached that duty require greater precision than is evident in the present pleading. Simply stating that a breach has occurred “in consequence of” other material facts is insufficient, nor is merely stating that a person is guilty of “preferring his own interests … as a solicitor to the interests of his client … in respect of the question of costs incurred under his retainer”. The former method of pleading breaches is too broad: the precise acts by which the solicitor’s duty to his client was in conflict with his self-interest and the acts that constitute the preferring of self-interest all need to be identified with precision. And the cross-referenced paragraphs contain many facts and allegations relating to other causes of action, whose materiality to the fiduciary claim is not obvious, The latter method states a conclusion, that Mr Khoury has preferred his interests over Mr Sturesteps, without pleading what Stevenson J required in his judgment: a statement of “how precisely any conflict of interest is said to have arisen”. The claim must therefore be repleaded if the Sturesteps are going to rely upon it.
The defendants make a supplementary point in relation to one of the paragraphs that the Sturesteps have relied upon as a breach of fiduciary duty, FASC paragraph 36A. The defendants submit that the Sturesteps have inappropriately pleaded certain representations that Mr Khoury allegedly made to Mr Sturesteps. Paragraph 36A of the FASC refers to “the substance” of what was “represented” or “assured” by Mr Khoury in a way that the defendants say is inappropriate. FASC, paragraph 36A provides as follows:

“36A.   In consequence of the following conduct on the part of Mr Khoury the Sturesteps did not discover that they had made the mistakes until shortly after, or alternatively, shortly before, they had terminated Mr Khoury’s retainer on 8 December 2011, namely:
(a)   Mr Khoury never drew attention to Mr Sturesteps’ rights of assessment and review of costs under the Act in the responses and assurances he gave in response to the costs complaints, as described in the substance of what was represented or assured by Mr Khoury in the schedule which is Annexure E;
(b)   Mr Khoury never drew attention to the costs assessment notification in each bill of costs when dealing with the costs complaints, as described in the substance of what was represented in the schedule which is Annexure E; and
(c)   Mr Khoury gave assurances to Mr Sturesteps, the substance of which are in Annexure E, in response to Mr Sturesteps’ complaints about bills of costs, that if Mr Sturesteps paid the costs in the amounts as billed to him, Mr Khoury would recover, or would do his level best to recover, most of the costs he was claiming in his bills of costs as party/party costs from the liquidators of HIH C/G at the conclusion of Mr Sturesteps’ proceeding against the liquidators, conducted under the retainer agreement, and Mr Sturesteps relied on those assurances.”

Annexure E is a document titled “Schedule of a representative sample of assurances given to George Sturesteps by Dieb Khoury in response to complaints about costs claimed in bills of costs from 11 April 2003 until 8 December 2011”. It sets out by date “Verbatim terms of the assurances given by Mr Khoury”, in the form of 10 extracts from various communications sent by Mr Khoury to Mr Sturesteps over this period. Setting out one extract as an example will suffice to show the nature of Annexure E:

“There has been substantial costs and expense incurred by you to date in attending to and appropriately defending these proceedings commenced by HIH (Liquidators). It is anticipated that, in due course, we will be seeking an order for costs against the other side to pay for all the expenses incurred by you to date, regarding these proceedings either on a party/party basis or on a full indemnity basis. We will seek to place you in a position where you may claim full indemnity costs rather than party/party costs from the other side. In the alternative, we will be seeking an interpretation that the total of your case
preparation and defence is encompassed within the definition and principles of party/party costs.”

This form of pleading is sufficient. I do not accept the defendants’ submission that this is a wholly inappropriate way of pleading a case. The case the Sturesteps put against them is put with sufficient precision. When pleading that representations were made by one party to another, it may sometimes be permissible to set out verbatim the communications made, even though strictly that approach draws upon evidence rather than material facts, provided that the material relied upon is not too voluminous. In my view the FASC keeps this material within reasonable bounds of economy. Paragraph 36A of the FASC and Annexure E should not be struck out on this ground.

The Assessment of Costs pursuant to Stevenson J’s 8 May 2014 orders

After striking out the ASOC on 8 May 2014, Stevenson J ordered that the Sturesteps were to pay the defendants the costs of their notice of motion of 11 April 2014 up to that date. On 8 August 2014, the Equity Registrar listed the defendants’ strike out motion and the Sturesteps’ leave to amend motions before this Court and ordered the Sturesteps to pay the costs of that date. On 4 May 2015 the defendants served a bill of costs relating to those orders on Mr Sturesteps. On 17 May 2015 they served the same bill on Mrs Sturesteps. On 25 May 2015, without intervention, the defendants would be entitled to send the bill of costs in relation to Mr Sturesteps to costs assessment.
On 22 May 2015, the Sturesteps sought the Court’s leave to file a notice of motion seeking an interim injunction to prevent that from occurring. The Sturesteps argued that the costs should be assessed at the end of the proceedings. But once the costs were sent for assessment, the Sturesteps argued, an automatic process would begin which could result in a certificate of determination being issued, which would operate as a judgment of the Court and which the defendants could execute immediately.
The defendants argued that the application was futile as the Court did not have the power to enjoin the essentially administrative statutory process of costs assessment under the Legal Profession Act 2004. Furthermore, the defendants stress the distinction between the two steps a party makes in the costs assessment process: first, applying for an assessment, and secondly, lodging the certificate of determination that the costs assessor produces. It is only upon the second step that a party becomes entitled to receive the assessed costs. The defendants offered an undertaking that they would not proceed to that second step until further order.
The Court reserved its decision on the matter, noting an undertaking from the defendants not to lodge with the Manager, Costs Assessment, an application for assessment of costs in respect of the bills served upon the Sturesteps under the orders of Stevenson J.
At the time the motion was heard, the statutory framework under which a party would apply to have their costs assessed was as relevantly as follows:

A person who is entitled to receive costs as a result of a court order for the payment of an unspecified amount of costs may apply to the Manager, Costs Assessment in the Attorney General’s Department for an assessment of those costs: Legal Profession Act 2004, s 353(1).

The applicant must first send a copy of the application to the person liable to pay the costs with a notice advising the person that any objection to the application must be lodged with the applicant in writing within 21 days; after 21 days (or upon an objection being received) the application may be sent to the Manager: Legal Profession Regulations 2005, reg 125(1).

A costs assessor is to determine the application by making a determination of the fair and reasonable amount of those costs: Legal Profession Act 2004, s 367A.

On making a determination of costs referred to in Subdivision 2 or 3 of this Division, a costs assessor is to issue a certificate that sets out the determination. Once the applicant files that certificate in the registry of a court having jurisdiction to order payment of any amount of money outstanding to the applicant, the certificate is taken to be a judgment of that court for the amount of unpaid costs with no further action”, and the court’s rate of interest begins to accrue in respect of the amount: Legal Profession Act 2004, s 368. The determination of the application, and therefore the issued certificate, is binding on all parties to the application: Legal Profession Act 2004, s 372.

When the parties argued the motion, the Legal Profession Act 2004 was in force. As noted above, the Legal Profession Uniform Law came into effect on 1 July 2015. However, as the same basic framework remains in place in the current legislation (see Legal Profession Uniform Law Application Act 2014, Part 7), these reasons will refer to the law as it stood when the motion was argued. The parties will be given liberty to apply if they wish to submit that a different result would be reached under the new legislation.
Under Legal Profession Act 2004, s 353, the above process may be initiated once a party becomes “entitled to receive costs as a result of a court order”. That conforms with Civil Procedure Act, s 98(2), which states that a party to proceedings may not recover costs from any other party otherwise than pursuant to an order of the court, subject to rules of court and to the legislation or any other Act.
The costs orders of Stevenson J related to the defendant’s strike out application. Under UCPR, r 42.7(1), such costs, being of “any application or other step in any proceedings” would generally be paid and otherwise dealt with in the same way as the general costs of the proceedings; that is to say, they would be dealt with at the end of the proceedings. The effect of Stevenson J’s orders is to vary that state of affairs: the Sturesteps are to pay the costs of the application. However, Stevenson J did not order that those costs were to be payable forthwith. Under UCPR, r 42.7(2), unless the Court orders otherwise, the costs referred to in subrule (1) do not become payable until the conclusion of the proceedings.
The Sturesteps’ central argument was that if the defendants were permitted to send their bill of costs to a costs assessor for assessment, that would initiate an automatic process that would conclude in the issue of a s 368 certificate which would then be enforceable as a judgment debt. Thus, assuming that the conclusion of the assessment process before the conclusion of the court proceedings, r 42.7(2) would be contravened: the interlocutory costs would become payable before the conclusion of the proceedings. They argued on the basis of r 42.7(2) that the defendants were not “entitled to receive costs” under s 353 at this stage, and so were not entitled to initiate the statutory costs assessment process.
The Sturesteps relied upon Wende v Horwath (NSW) Pty Ltd (2014) NSWLR 674; [2014] NSWCA 170 for the proposition that only once a final order for costs is made can a party proceed to assessment. But that decision involved only costs orders made at the end of proceedings in the Local Court, Supreme Court and Court of Appeal: its ratio decidendi, contrary to what Mr Bevan of counsel for the Sturesteps contended, does not stand for the corollary that there is no entitlement to assessment without a final costs order. Indeed, Beazley P (at [5]) identified that very possibility:

“Costs orders may be made during the course of proceedings in respect of interlocutory matters. Costs of interlocutory applications may also be "reserved" for later determination whether or not as part of the final costs order made in the matter. Costs orders are also made at the conclusion of the proceedings. Pursuant to UCPR, r 42.7 costs orders made in respect of interlocutory applications during the course of proceedings do not become payable until the conclusion of proceedings unless the Court otherwise orders. That does not, however, preclude a party from applying for the assessment of costs prior to the conclusion of the proceedings.”

The defendants persuasively cited authority for the distinction between an application for an assessment of costs and lodging the resulting certificate of determination with the Court to render a judgment debt. In Welzel v Francis (2010) 77 NSWLR 92 (“Welzel”) Einstein J dealt with the apparent tension between UCPR, r 42.7 and Practice Note SC Eq 3 , which at clause 57 states:

“Unless otherwise ordered, a party in whose favour an order for costs is made may proceed to assessment of such costs forthwith”.

His Honour noted that if the two provisions were in conflict, that r 42.7 would have primacy. However, in the result his Honour found no such contradiction, permitting the respondent to apply to have its costs assessed, but ordering that the defendant take no step to enforce any assessment of the costs unless and until otherwise ordered. In coming to that result, his Honour referred to the decision of the New South Wales Court of Appeal in His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Incorporated [2007] NSWCA 142 where the Court at [49] observed that:

“The provisions of r 42.7 of the UCPR apply to the costs of an appeal. An order as sought by the Association is not necessary. Contrary to Metropolitan Petar’s understanding, an order for costs in respect of interlocutory proceedings is not immediately enforceable. The parties may of course take steps to quantify any such order, but that is a different matter to the question of enforceability. A specific order that costs be immediately enforceable would need to be made to displace the operation of r 42.7.”

The defendants also referred to a recent decision of Black J in JR Consulting & Drafting Pty Ltd v Cummings [2015] NSWSC 552. In that case a notice of motion had been filed seeking an order that a costs order be stayed pending hearing of an appeal. The defendants there, as here, proffered an undertaking that they would not lodge a s 358 certificate following assessment (in that case, without giving 14 days’ notice to allow for an application for a wider stay). Before refusing to stay the costs orders, his Honour made the following observations:

“It appears inevitable, from the evidence before me, that the parties will not agree the amount of costs arising from the proceedings and it will be necessary for the Defendants to proceed to a costs assessment in order to establish their recoverable costs. That costs assessment is likely, as a practical matter, to take some time. The parties did not identify any reason why the Defendants should not now be permitted to commence the assessment process, if they are content to incur the costs of doing so despite the risk that the Costs Order may be varied on appeal. A stay that prevented the Defendants from now proceeding to assessment, as distinct from registering any costs assessor’s certificate(s) arising from an assessment so as to give rise to an enforceable judgment, would inevitably and substantially delay their recovery of costs, if the Costs Order is ultimately sustained on appeal.”

Thus the law is that when a court makes an order for costs in favour of a party in respect of an interlocutory application, the order will suffice to make that party immediately “entitled to receive costs” under Legal Profession Act 2004, s 353, even while UCPR, r 42.7 prevents that party from lodging the application with the court to render it a judgment debt under s 368(5).
The proper course to be taken here is to recognise this law and to give clear effect to the decision of Stevenson J. His Honour did not “otherwise order” under UCPR r42.7, so that whatever now happens with the progress of the costs assessment based on Stevenson J’s orders, the defendants should not at the end of that process be permitted to lodge a s358 certificate. And for greater clarity, following Einstein J’s approach did in Welzel, I will order that the defendants take no step to enforce any assessment of the costs Stevenson J ordered, until further order. But short of such enforcement there is no reason why the defendants cannot lodge and then progress their claim for costs assessment as it will mean that this aspect of their costs assessment will thereby be further advanced by the end of the proceedings, although the motivation for doing so will be lower now that no enforcement steps can be taken as a result of the assessment until the end of the proceedings.
Both parties advanced arguments regarding the power of this Court to enjoin the statutory costs assessment process. The arguments were similar to those invoked in relation to Issue 1 above. In short, the Sturesteps claimed that the Court enjoyed the inherent power to control the assessment process as an aspect of its jurisdiction to control the affairs of solicitors, being officers of the Court: Kallinicos v Hunt (2005) 54 NSWLR 561 at [76]; Estate of Allwood v Benjafield [2009] NSWSC 1383. The defendants submitted that because the cost assessor undertaking the assessment process carried out an administrative function under the Act (see Minerals Corporation Ltd v Abbot [2004] NSWSC 246 at [39]-[40]), which did not provide a mechanism for the Court’s interference in the manner sought, the Court did not have jurisdiction to interfere with that process. The parties also advanced arguments as to whether the Court ought to exercise a power to restrain the costs assessment process, if such a power does exist. Given the conclusion already reached above, it is not necessary to express any opinions as to these points.
The Sturesteps also sought by their notice of motion a declaration as to the proper interpretation of Stevenson J’s 8 May 2014 orders as to costs. The Sturesteps claim that the defendants’ bill seeks recovery of costs incurred by the defendants in their defence of the proceedings generally, but that Stevenson J’s order is limited to the awarding of costs related to the motion and incurred from 11 April 2014 (the date of the defendants’ motion to dismiss the proceedings summarily or strike out the pleadings) up to 8 May 2014.
Prima facie the proper scope of Stevenson J’s order for costs on the motion should be as the Sturesteps contend. But any contest as to the proper interpretation of Stevenson J’s orders should be brought back before Stevenson J. Otherwise whether the defendants’ bill of costs fits within the scope of Stevenson J’s costs order will be a question for the costs assessor upon an assessment. The assessor can disallow costs that fall outside of the proper interpretation of the costs order. If the Sturesteps disagree with the costs assessor’s conclusion, they can apply for review of that decision through the statutory framework.
Conclusions and Orders
In the result the plaintiffs have been able to resist most, but not all, of the defendants’ attempts to strike out the Further Amended Statement of Claim. It is highly desirable that the result of this motion should now provide a platform for the parties to bring on the final hearing of these proceedings. Far too much time has been spent in these proceedings on unproductive interlocutory pleading skirmishes in relation to a plaintiffs’ pleading that is on the whole now reasonably informative and workable. Such skirmishes must now come to an end and the parties should focus on the final resolution of the real questions in dispute between them in accordance with the dictates of Civil Procedure Act s56. For that reason the Court will make the orders below to give the parties an opportunity to examine a fresh pleading and have it filed or alternatively for them to submit in short compass any final but short argument about such differences as may remain between them in relation to this pleading.
Finally there is the question of costs to be considered. Both parties had a measure of success. The costs order that commends itself to the Court in the circumstances is an order that each party’s costs of this motion will be that party’s costs in the cause. But one or other party may wish to contend for different costs order and the parties are of course free to do so. But I have foreshadowed this costs order now to try and save the parties unnecessary expenditure on further argument about costs. If any party wishes to contend for a different costs order, such party must file a motion within 14 days to that effect. Any party filing such a motion and being unsuccessful should recognise the risk of an adverse costs order, because of the extra Court time that will be taken by such argument. In a case that is fundamentally about the validity and enforceability of bills of costs, one of the Court’s objectives is to avoid unnecessary argument about interlocutory costs orders.
The Court’s orders therefore are:

Direct that within 21 days the plaintiffs shall file with my Associate a form of Further Amended Statement of Claim that conforms with the leave granted by these reasons;

After the plaintiffs comply with order (1), direct he parties over the course of the following 14 days to confer, with a view to resolving any remaining disputes about the form of the pleading upon which the plaintiffs will rely at trial.

If the parties are able to agree as a result of the conferral provided for in order (2) then they shall submit the agreed form of Further Amended Statement of Claim to my Associate with their proposed consent orders that should provide for it to be filed in chambers.

If the parties are unable to agree as a result of the conferral provided for in order (2), then the parties are at liberty to relist the matter before me on three days notice with a view to resolving any final differences about the pleading.

The costs of this motion will be each party’s costs in the cause.

Order (5) will be stayed if either party files a motion for a different costs order within 14 days of these orders;

Note that the defendants are now absolved from their undertaking not to lodge with the Manager, Costs Assessment, an application for assessment of costs in respect of the bills served upon the Sturesteps in pursuance of Stevenson J’s costs orders.

Order that until further order the defendants shall take no step to enforce any assessment of the costs Stevenson J ordered in their favour.

Order that these orders may be taken out forthwith.

**********

Decision last updated: 04 August 2015

Medium Neutral Citation:	Sturesteps v Khoury [2015] NSWSC 1041
Hearing dates:	17, 18 and 19 November 2014
Date of orders:	03 August 2015
Decision date:	03 August 2015
Jurisdiction:	Equity Division
Before:	Slattery J
Decision:	Some parts of the proposed Further Amended Statement of Claim struck out but the balance remains.
Catchwords:	CIVIL PROCEDURE – strike out application – application to file new pleadings – multiple grounds for strike out – intersection of power to strike out and to give leave to file amendments – application of strike out doctrine – whether pleadings adequate LEGAL PROFESSION – professional costs – disclosure in costs agreements EQUITY – restitution – necessary elements for pleading restitution – whether a Legal Profession Regulations, reg 45(1)(d) statutory notice precludes the recipient from claiming to operate under a mistaken belief inconsistent with that notice - where restitution is sought from a solicitor of moneys paid to counsel pursuant to a legal retainer – whether pleading of fiduciary duty claims is adequate CONTRACTS REVIEW ACT – time limitations applicable to deed of agreement.
Legislation Cited:	Australian Consumer Law, s 18 Civil Procedure Act 2005, ss 56, 57, 58, 64, 90, 91, 98 Contracts Review Act 1980, ss 7, 9, 16 Fair Trading Act 1987, ss 42, 71 Income Tax Assessment Act 1997 (Cth), ss 6-5(4); 6-10(3). Legal Profession Act 1987, Division 6, Part 11, ss 171M, 193, 199, 208B, 208D, 208K, 208L, 208M Legal Profession Act 2004, ss 353, 367A, 368, 372. Legal Profession Regulations 2002, regs 45, 52, 53 Legal Profession Regulations 2005, reg 125 Legal Profession Uniform Law Application Act 2014, Part 7 Limitation Act 1969, ss 14, 16 Strata Schemes Management Act 1996, s 140 Supreme Court Act 1970, Uniform Civil Procedure Rules, Part 14, rr 12.1, 12.10, 13.4, 14.7, 14.8, 14.14, 14.28, 19.1, 42.20
Cases Cited:	ALH Group Property Holdings Pty Limited v Chief Commissioner of State Revenue (2012) 245 CLR 338 Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 Australian Financial Services and Leasing Pty Ltd v Hills Industries [2014] HCA 14 Baker v Courage & Co [1910] 1 KB 56 Baltic Shipping Co v Merchant “Mikhail Lermontov” (1994) 36 NSWLR 361 Barwick v Law Society of New South Wales (2000) 169 ALR 236 Commissioner of Police for New South Wales v Industrial Commission of New South Wales & Raymond Sewell [2009] NSWCA 198 Commonwealth v Verwayen (1990) 170 CLR 456 Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 Currabubula Holdings Pty Ltd v State Bank of New South Wales [2000] NSWSC 232 Dey v Victorian Railways Commissioners (1949) 78 CLR 62 Dysart (Earl) v Hammerton & Co [1914] 1 Ch 822 Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498 Estate of Allwood v Benjafield [2009] NSWSC 1383 Federal Commissioner of Taxation v White [2010] FCA 730 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Gillies v Eastlake [2014] NSWSC 611 Griffith v Australian Broadcasting Corp [2013] NSWSC 750 Hans Pet Constructions Pty Limited v Cassar [2009] NSWCA 230 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Incorporated [2007] NSWCA 142 Horton v Jones (No 2) (1939) 39 SR (NSW) 305 Howard v Commissioner of Taxation [2014] HCA 21 Howden v Truth & Sportsman Ltd (1937) 58 CLR 416 In Sidameneo (No 456) Pty Ltd v Alexander (No 2) [2012] NSWCA 87 Johnson v Buttress (1936) 56 CLR 113 Kallinicos v Hunt (2005) 54 NSWLR 561 Kirby v Sanderson Motors Pty Ltd (2001) 54 NSWLR 135 Law Society of NSW v Foreman (1994) 34 NSWLR 408 McGuirk v The University of New South Wales [2009] NSWSC 1424 Minerals Corporation Ltd v Abbot [2004] NSWSC 246 Murphy v Overton Investments Pty Limited [2002] FCAFC 129 Nocton v Lord Ashburton (1914) AC 932 Parramatta River Lodge Pty Ltd v Sunman (1991) 5 BPR 12,038 O'Brien v Bank of Western Australia Ltd [2013] NSWCA 71; 16 BPR 31,705 Port Of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Re Morris Fletcher & Cross’ Bill of Costs [1997] 2 Qd R 228 Ren v Jiang [2014] NSWCA 388 Sent v Federal Commissioner of Taxation [2012] FCA 382 Simmons v New South Wales Trustee and Guardian [2014] NSWCA 405 Spellson v George (1992) 26 NSWLR 666 Spencer v The Commonwealth (2010) 241 CLR 118 Sturesteps v HIH Overseas Holdings Ltd (In Liq) (2011) 81 NSWLR 690 Sturesteps v McGrath [2010] NSWSC 169 Sturesteps v McGrath (2010) 242 FLR 122; [2010] NSWSC 896 Sturesteps v McGrath [2010] NSWSC 903 Sturesteps v Khoury (Supreme Court (NSW), Stevenson J, 8 May 2014, unrep) Symonds v Raphael (1998) 148 FLR 171 Takemoto v Moody’s Investors Service Pty Ltd (in liq) [2014] FCA 1081 Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 Webster v Lampard (1993) 177 CLR 598 Welzel v Francis (2010) 77 NSWLR 92 Wenlock v Moloney [1965] 2 All ER 871 Wende v Horwath (NSW) Pty Ltd (2014) NSWLR 674; [2014] NSWCA 170 Wentworth v Rogers (2006) 66 NSWLR 474 Yorke v Lucas (1985) 158 CLR 661
Texts Cited:	Carter on Contract J Goldring, JL Pratt & DEJ Ryan “The Contracts Review Act (NSW)” (1980) 4 UNSWLJ 1 J Peden, The Law of Unjust Contracts (1982, Butterworths) Ritchie's Uniform Civil Procedure NSW
Category:	Principal judgment
Parties:	First plaintiff: George Osvald Sturesteps Second plaintiff: Beryl Donna Sturesteps First defendant: Dieb Peter Khoury Second defendant: Benjamin & Khoury Pty Limited
Representation:	Counsel: Plaintiffs: C.J. Bevan Defendants: K. Connor; A. Ahmad Solicitors: Plaintiffs: William Musgrave, W M Lawyers Defendants: Benjamin & Khoury Solicitors
File Number(s):	2014/24406
Publication restriction:	No