Von Doussas Legal Pty Ltd v NASR - [2009] SASC 246

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Civil)
VON DOUSSAS LEGAL PTY LTD v NASR
[2009] SASC 246
Judgment of The Full Court
(The Honourable Justice Bleby, The Honourable Justice Gray and The Honourable Justice Layton)
20 August 2009
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH JUDGE'S FINDINGS OF FACT
PROFESSIONS AND TRADES - LAWYERS - REMUNERATION
MAGISTRATES - JURISDICTION AND PROCEDURE GENERALLY - JURISDICTION, POWERS AND DUTIES - SUBJECT MATTER - OTHER MATTERS - SOUTH AUSTRALIA
Appeal by permission from dismissal by single Judge of appeal from decision of Magistrate - Magistrate held that appellant, a firm of solicitors, was not entitled to payment by respondent of costs of an appeal relating to alleged conflict of interest of appellant in acting for respondent - whether Magistrate erred in finding that parties agreed that appeal relating to conflict of interest would be conducted at no cost to respondent - whether Judge erred in finding that judgment in the Magistrates Court was entered by consent - whether Magistrate had jurisdiction to determine liability under retainer or whether determination of that issue is exclusively within the jurisdiction of the Supreme Court - whether Magistrate determined liability under retainer or under separate agreement.
Appeal dismissed - Magistrate's findings of fact not shown to be in error - Magistrate had jurisdiction to determine all issues.
Legal Practitioners Act 1981 (SA) s 42; Legal Practitioners Act 1936-1978 (SA) s 17; De Facto Relationships Act 1996 (SA), referred to.
King William Law Chambers v Mobitel (International) Pty Ltd (1981) 29 SASR 316; Re Herbert (1887) 34 Ch D 504; Re Jones (1887) 36 Ch D 105; Von Doussas Legal Pty Ltd v Nasr [2008] SASC 206, discussed.
Nasr v Vihervaara (2005) 91 SASR 222; Burridge v Bellew (1975) 32 LTNS 807, considered.

VON DOUSSAS LEGAL PTY LTD v NASR
[2009] SASC 246
Full Court: Bleby, Gray and Layton JJ
BLEBY J.
Introduction

This is an appeal by permission from a decision of a judge of this Court dismissing an appeal from a decision of a magistrate. The Magistrate held that the appellant (“von Doussas”) was not entitled to payment from the respondent, Mr Nasr, for certain legal services provided by von Doussas.
The appeal raises questions as to whether the work was done by a solicitor pursuant to a retainer and, if so, whether the Magistrates Court had jurisdiction to determine the extent of the retainer and the amount payable by the client under it, or whether such questions are within the exclusive jurisdiction of the Supreme Court under s 42 of the Legal Practitioners Act 1981 (SA). Incidental questions concerning interest and the rights of a non-party to the appeal are also raised.
Background
In 2004 Mr Nasr retained von Doussas to act for him in a dispute with a Ms Vihervaara concerning a property settlement under the De Facto Relationships Act 1996 (SA). Mr Carabelas of von Doussas was the solicitor with the conduct of the matter. A letter of engagement dated 16 July 2004 was signed by Mr Nasr on 20 July 2004. It included the following provision:
Before commencing work we will set out in this letter the general terms on which we accept instructions with a view to these applying not only in relation to this particular matter but any further matters in which you may kindly instruct us. This will make for certainty and should help you in planning and budgeting.
1. The Work
1.1 Description
All matters and advice incidental to alleged de facto property settlement and children’s issues matter.
The letter also explained the basis on which von Doussas was to charge Mr Nasr for the work done.
On 2 November 2004, on the application of Ms Vihervaara, a District Court judge made an order restraining von Doussas and Mr Carabelas from acting for Mr Nasr in relation to the De Facto Relationships Act proceedings. This was on the ground that von Doussas and, in particular, Mr Carabelas, had previously acted for Ms Vihervaara. Notwithstanding the order, von Doussas instituted, in Mr Nasr’s name, an appeal to the Full Court of the Supreme Court against that order (“the conflict appeal”). One of the issues on this appeal is whether that was done on the instructions of Mr Nasr.
When the conflict appeal was called on for hearing on 7 February 2005, the Full Court declined to hear the appeal while von Doussas continued to act for Mr Nasr. J P Stevens Lawyers were then engaged to represent Mr Nasr for the appeal, and the Full Court heard argument on the appeal on 8 February. Counsel for the appellant was Mr T L Stanley.
Judgment was handed down on 15 March 2005.[1] The Full Court set aside the order made by the District Court Judge. The Court ordered that Ms Vihervaara pay the appellant’s costs of the appeal, but that von Doussas and Mr Carabelas pay Ms Vihervaara’s costs thrown away for 7 February 2005. On 2 June 2005 von Doussas obtained an allocatur in respect of the costs of the appeal to which the appellant was entitled in the sum of $12,096.50. However, the costs order against Ms Vihervaara has never been enforced.
[1] Nasr v Vihervaara [2005] SASC 83, (2005) 91 SASR 222.
After the Full Court judgment was handed down, the relationship between Mr Nasr and von Doussas deteriorated, due principally to Mr Nasr’s refusal to pay the counsel fees and, subsequently, their own fees and those of J P Stevens Lawyers in respect of the conflict appeal. Von Doussas ceased to act for Mr Nasr at all on 7 October 2005.
The proceedings in the Magistrates Court
On 21 October 2005 von Doussas and J P Stevens Lawyers, as plaintiffs, commenced proceedings in the Magistrates Court against Mr Nasr. The claim by von Doussas was for $18,870.02 for their own fees and the balance of counsel fees on the appeal to the Full Court. It appears that the full amount of the counsel fees had been reduced by $2,000 being an amount paid by Mr Nasr to von Doussas’ trust account at the request of Mr Carabelas when taking initial instructions in relation to the De Facto Relationships Act proceedings. The amount claimed by J P Stevens Lawyers was $1,448.15 in respect of the conduct of the conflict appeal proceedings. The total amount claimed was therefore $20,318.17 said to be outstanding to “the plaintiff”. The amount claimed by von Doussas included all work performed since the initial instructions of Mr Nasr, including costs relating to the conduct of the conflict appeal. In his defence, Mr Nasr claimed that he was not liable for any costs of the conflict appeal, as Mr Carabelas had said that he would conduct the conflict appeal at no cost to Mr Nasr. He admitted liability for costs otherwise associated with the De Facto Relationships Act proceedings.
Mr Carabelas and Mr Nasr both gave evidence at the trial. In his evidence in chief Mr Carabelas was vague as to any detailed instructions given by Mr Nasr following the order of the District Court. Much of his evidence was responding to leading questions, not the subject of objection, and irrelevant questions as to Mr Carabelas’ intention and what he meant in a given situation. The vagueness of Mr Carabelas’ evidence is typified in the following question and answer:
Q.It might be difficult to remember but did he say that he wanted to appeal, after you expressed the view that, in law, you believed that you may not be able to charge if you were unsuccessful.
A.All I can say is there was never any suggestion by Mr Nasr that he did not want to appeal. There was every indication given to me that he wanted to press on with the matter in whatever form.
Mr Carabelas claimed that Mr Nasr was very distressed or upset at the District Court order. He denied being personally affronted by the decision. There was no suggestion in examination in chief that there had been any discussion about the possibility of Mr Nasr instructing another solicitor. When that possibility was put in cross-examination Mr Carabelas said, “That could possibly be, I don’t have specific recollection but that’s not inconsistent”. Yet much later in cross-examination he said that he put to Mr Nasr that he should seek other solicitors as soon as the decision had been made, and that Mr Nasr was angry about that outcome because it meant that Mr Carabelas was not to act for him any more. That became the foundation for Mr Carabelas’ assertion that Mr Nasr had instructed him to appeal. He said that after the decision was made to appeal he told Mr Nasr that in all probability von Doussas would not be able to charge him at all if the appeal was unsuccessful. However, he denied that he said that the appeal would be at no cost to Mr Nasr.
Mr Nasr, in his evidence, said that Mr Carabelas was angry at the District Court decision and regarded it as an affront to his professional reputation. He gave evidence about a meeting between himself and Mr Carabelas that took place on 24 November 2004. Of that discussion Mr Nasr said:
A.Mr Carabelas he wasn’t happy; he was angry about the decision disqualifying him. He said he’s been 38 years in practice and this is an insult to his profession and him personally, and this decision will have a huge impact on his future business in Von Doussas, and whatever the cost he’s going to fight it, and he’s already wrote the appeal and he had it in the folder. I didn’t see the appeal, but he said he wrote the appeal and he’s going to present it to Supreme Court.
He gave evidence that Mr Carabelas assured him that the appeal would be at Mr Carabelas’ own cost. A little latter he added:
A.… He [Mr Carabelas] said it won’t cost him much because he’s going to do all the paperwork, and one of his friends, Mr Stanley, he will conduct the appeal. So there’s not much cost in it, but it’s very important to him that he reverse the decision.
The discussion included a question of whether the appeal should be in the solicitors’ name. Mr Carabelas said that the appeal would stand a better chance of success if it were in Mr Nasr’s name. Mr Nasr agreed to lend his name to the Supreme Court appeal if Mr Carabelas “looked after him” in the De Facto Relationships Act proceedings.
Mr Nasr also said that there was discussion with Mr Carabelas about the alternative possibility of his simply retaining another solicitor to act for him in the dispute with Ms Vihervaara. He claimed that he would have taken that option if von Doussas had not undertaken to conduct the appeal at no cost to him.
Mr Carabelas admitted that he had not kept a file note of the meeting of 24 November. Indeed, the only record of any contact that day in von Doussas’ itemised bill was a telephone call. However, Mr Carabelas seemed to accept that such a conversation had occurred. He produced a letter to Mr Nasr dated 10 December 2004. In the letter Mr Carabelas reported that he had now completed “your instructions with respect to the institution and service of a Notice of Appeal …”. The letter continued:
Firstly, we wish to confirm that the Appeal was instituted after lengthy discussions with you and, in particular, your firm request that we do proceed with the Appeal as concluded in the course of discussions on 24^th November 2004.
Specifically, we wish to confirm that the background to the matter includes your very firm and specific instructions to the effect that you were very unhappy with the decision of Judge Smith and that you wanted to have the matter Appealed.
Also, we refer specifically to the very firm advice given to you following the Orders of Judge Smith in which we informed you very specifically that in all the circumstances it is a decision for you whether you wish to continue to have us as your solicitors and the writer to have the conduct of the matter or whether you may be prepared to consider having other solicitors carry on with the conduct of the matter.
It is in this context that we must make it very clear that we have always advised you of your rights to have other solicitors to act for you but you have specifically resisted any such alternative and have specifically requested that we continue to act for you.
There was evidence that, before commencing the conflict appeal, von Doussas had contemplated seeking to have the order of the District Court Judge set aside by means of judicial review proceedings. A first draft of a statement of claim in such proceedings was prepared by Mr Carabelas. It was dated 18 November 2004, before the meeting of 24 November, and bore a frontsheet dated 19 November. After reciting the facts and the District Court orders the draft continued:
8.     The Plaintiff’s (sic) contend that:
8.1     They are seriously and maliciously affected by the Order.
8.2    The Order was made under without proper basis in law and in the absence of any evidence which may positively identify any conflict of interest as contended by Vihervaara.
8.3    In total disregard for the Plaintiffs’ rights.
8.4    In defiance of the legal principles applicable to the case before the Defendant Court and by the communion (sic) of serious error of judgment and the application of the appropriate law.
The proposed plaintiffs referred to in the opening words and in paras 8.1 and 8.3 were Mr Carabelas and von Doussas. The proposed defendant was the District Court of South Australia.
On 22 November 2004 Mr Carabelas wrote to Ms Vihervaara’s solicitor informing her of an intention to commence judicial review proceedings. The letter included the follow paragraph:
We confirm that we are not presently acting, nor purport to act for Mr Nasr in fear of contravention of the Orders but the proceedings intended will be issued on behalf of the writer and our firm of solicitors as plaintiffs with the District Court of South Australia as respondent.
In fact the challenge to the order of the District Court was made by notice of appeal to the Full Court of this Court dated 25 November 2004, the appellant being Mr Nasr and the respondent being Ms Vihervaara.
There was no evidence that at any time prior to the institution of the conflict appeal there had been any discussion between Mr Carabelas and Mr Nasr about the likely amount of the costs involved in the appeal or of the possible costs for which Mr Nasr might be liable to Ms Vihervaara if the appeal were unsuccessful. No fresh letter of instructions was prepared. There was no request for payment by Mr Nasr of costs on account of the appeal, as had occurred when initial instructions were given in relation to the De Facto Relationships Act proceedings, when Mr Nasr paid $2,000 to von Doussas’ trust account on account of fees.
It appeared that by at least 20 January 2005 there had been some discussion between Mr Carabelas and Mr Stanley in relation to briefing Mr Stanley on the appeal. On 21 January 2005, after the date for the hearing of the appeal had been fixed, Mr Carabelas wrote to Mr Stanley enclosing a copy of the appeal book and offering any assistance in preparation for the appeal. The letter included the following:
It is important that the matter be given close attention and although we do not expect the argument to be extremely lengthy it is, nevertheless, of importance to us as well as to the legal profession generally.
There was a notable absence in the letter of any reference to the interests of the nominal appellant.
On the same day Mr Carabelas wrote a letter to Mr Nasr advising him of the time for hearing of the appeal in which he also informed him that “We also advise that we have engaged Mr Tim Stanley as counsel to conduct the appeal”. Other than the initial passing reference to briefing Mr Stanley by Mr Carabelas on 24 November, there had been no further discussion about briefing Mr Stanley or his anticipated fees.
The evidence showed that on 3 February 2005 Mr Carabelas wrote a further letter to Mr Nasr informing him of a change in the commencement time of the hearing of the appeal. The letter concluded:
We would appreciate you telephoning and confirming your position, in particular as to whether you intend to appear in which case the writer will make arrangements for you to be introduced to our counsel.
It seems that Mr Nasr did not attend on the hearing of the appeal and was not consulted about the engagement of J P Stevens Lawyers as instructing solicitors for the appellant when the Full Court declined to hear the appeal while von Doussas were solicitors on the record.
The Full Court handed down its decision on the appeal on 15 March 2005 setting aside the orders of the District Court and substituting for those orders an order dismissing Ms Vihervaara’s application with costs, and ordering that Ms Vihervaara pay the costs of the appeal subject to the deduction previously mentioned. In his letter dated 18 March 2005 to Mr Nasr enclosing a copy of the reasons for judgment, Mr Carabelas said:
We will need to discuss with you the issue of the costs that were ordered by the Full Court as well as to receive your further instructions in more detailed form with a view to progressing the case as soon as possible without any further delay.
While there was reference to the costs payable by Ms Vihervaara and to the resumption of the proceedings in the District Court, there was no mention in the letter of any costs payable by Mr Nasr. That issue did not arise until an oral request was made to Mr Nasr to pay Mr Stanley’s counsel fees, in response to which Mr Nasr said that he told Mr Carabelas he did not intend to pay them. That was followed on 9 June 2005 by von Doussas rendering an account to Mr Nasr for work performed since taking their initial instructions from Mr Nasr. It included the costs of the appeal but did not include any amounts in respect of J P Stevens Lawyers or the counsel fees of Mr Stanley.
The Magistrate’s findings
The Magistrate’s decision turned largely on his assessment of the credibility of Mr Nasr and Mr Carabelas. The Magistrate preferred the evidence of Mr Nasr to that of Mr Carabelas. He found Mr Nasr’s answers to be honest and consistent, while Mr Carabelas, he considered, lacked spontaneity in giving his evidence, and at times skirted the issues or failed to answer questions.
The Magistrate gave considerable weight to the evidence of the proposed judicial review proceedings, stating that the draft statement of claim was:
an important piece of evidence that supports [Mr Nasr’s] general contention that at this stage of events, ie, the 19^th of November, Mr Carabelas was anxious to right the wrong that he believed [the District Court] order had produced and he was prepared to consider proceeding without reference to [Mr Nasr].
The Magistrate also noted that Mr Carabelas did not discuss counsel fees for the conflict appeal with Mr Nasr and did not set out in writing the basis on which Mr Nasr would be charged for the conflict appeal. He described Mr Nasr’s case, which he ultimately accepted, in the following terms:
From [Mr Nasr’s] perspective, the verbal agreement that took place on 24^th of November in Mr Carabelas’s office was an exchange of simple promises – [Mr Nasr] would lend his name to the appeal in exchange for the promise that Von Doussas would continue to act and not charge for the appeal. [Mr Nasr] saw this as having the practical benefit of not needing to change solicitors in the middle of his dispute with Ms Vihervaara. Nevertheless [Mr Nasr] has maintained throughout that the conflict of interest appeal was Mr Carabelas’s ‘hassle’ and that it was he that insisted that the appeal must be prosecuted.
The reference to von Doussas continuing to act in the context of the sentence that follows was clearly a reference to their continuing to act for Mr Nasr in the District Court proceedings.

The Magistrate concluded:
… I am satisfied that [von Doussas] did, through its agent Mr Carabelas, agree to pursue the Supreme Court Appeal at its expense on the condition as outlined by the defendant and that the notion of charging for the Appeal was an afterthought. [Von Doussas] failed to advise [Mr Nasr] in explicit and unequivocal terms concerning the matter of costs precisely because payment by [Mr Nasr] was not contemplated at the relevant time. I prefer [Mr Nasr’s] version of events, particularly when combined with (a) the lack of any written record of the meeting of 24^th November; (b) the lack of a separate retainer or an amendment to the one that existed, and (c) the documents already referred to.
Accordingly, the Magistrate held that Mr Nasr was not liable to pay von Doussas for the cost of the conflict appeal.
A dispute over quantum
The Magistrate’s judgment was delivered on 20 November 2006. Without making any orders the matter was adjourned to 18 December 2006 for mention because the actual amount payable by Mr Nasr had not been ascertained. On that day the Magistrate directed that the parties negotiate in order to arrive at a judgment figure in respect of the unpaid fees excluding the costs of the conflict appeal. It is evident that no agreement was reached. On 13 April 2007 von Doussas initiated a taxation of their costs in the Supreme Court pursuant to s 42(1)(a) of the Legal Practitioners Act 1981 (SA). That section allows the Court to tax and settle a bill of costs “of a person claiming to be entitled to legal costs”. By that time von Doussas had rendered three invoices to Mr Nasr totalling $16,427.00. Mr Nasr had accepted as fair and reasonable the amount of $8,514.12. The bill of costs that von Doussas lodged for taxation included additional items and amounts not previously billed, and claimed a total of $29,411.35.
Two preliminary points arose before the taxing Master. One concerned the attempt by von Doussas to have the Master tax the whole of von Doussas’ costs, including the costs of the conflict appeal, in an attempt to circumvent the decision of the Magistrates Court. The Master ruled that he would not enter upon a taxation of the costs of the conflict appeal. The second point concerned the claim for additional amounts and items beyond those contained in the various invoices. The Master ruled that it was permissible for the solicitors to include, by way of particulars and further costs, items not specifically identified in the original invoices, but that the amount recoverable would be capped at the amount originally claimed in the invoices less any amount reasonably identified as appeal costs in that invoice. It was not permissible for the solicitors to increase the amount sought in respect of a particular item that had been identified in an original invoice and for which a specific amount had been charged in that invoice.
On 11 February 2008 the taxation of costs was finalised without the need for a full taxation when the parties agreed that von Doussas’ recoverable costs amounted to $8,393.73.
On 14 March 2008 the Magistrate entered judgment for the plaintiffs in the sum of $6,393.73, being von Doussas’ agreed amount as a result of the taxation less the $2,000 previously paid by Mr Nasr. The Court noted that the question of costs of the trial were yet to be determined. No application was made for costs or for interest.
The appeal to a single judge of the Supreme Court
Von Doussas appealed to a single judge of this Court on a number of grounds. Those grounds included a challenge to the jurisdiction of the Magistrates Court to determine all issues in the proceedings, notwithstanding that they themselves had invoked the jurisdiction of the Magistrates Court to do so, and an assertion that the Magistrate erred in failing to find that Mr Nasr was liable for the costs of the conflict appeal.
Von Doussas argued that the Magistrates Court had no jurisdiction, or alternatively had only limited jurisdiction, to determine issues of liability under a retainer. It was submitted that s 42(1) of the Legal Practitioners Act, together with the decision of the Full Court in King William Law Chambers v Mobitel (International) Pty Ltd (“the KWLC Case”)[2] had the effect that the Supreme Court has exclusive jurisdiction to determine disputes about liability for costs. Von Doussas argued that the Magistrates Court had jurisdiction to determine whether a retainer existed, but not to determine other issues arising on a claim for costs.
[2] (1981) 29 SASR 316.
Von Doussas also submitted that the Magistrate’s findings of fact were glaringly improbable and contrary to the documentary evidence.
The appeal was dismissed. The Judge held that the Magistrate did have jurisdiction to hear and determine all the issues in the proceedings, and that the decision was not glaringly improbable or contrary to compelling inferences.
It had also been submitted that the Magistrate erred by not including an award of interest in the judgment sum. That ground of appeal was dismissed, as the Judge found that the Magistrate had simply entered judgment for an amount upon which the parties had agreed.
The present appeal
Von Doussas appeal, by permission, to the Full Court on a number of grounds. One of those grounds is that the Judge erred in law in finding that the Magistrate had jurisdiction to determine the terms upon which von Doussas was retained by Mr Nasr. Four of the grounds relate to the Magistrate’s findings, which were accepted by the Judge, relating to the credit of the witnesses, the weight to be given to the documentary evidence and the consequent findings with respect to Mr Nasr’s liability under the retainer. Two of the grounds attack a finding of the Judge in dealing with a submission that the Magistrate had erred by not including an award of interest in the judgment sum. The finding attacked in this appeal was that “The Magistrate had entered judgment for the amount upon which the parties had agreed. That being so, the Magistrate had not overlooked interest. He had simply entered a judgment in the terms to which the parties had agreed”.[3]
[3] [2008] SASC 206, [55].
Finally, there was a ground alleging that the claim of J P Stevens Lawyers was not litigated, that no findings were made in respect of that claim and that J P Stevens Lawyers should be non-suited. However, no argument was advanced in support of that ground on the appeal, and J P Stevens Lawyers was not represented before the Judge, despite having notice of the appeal, and did not seek to intervene on this appeal. I therefore do not propose to address that ground.
In respect of the other grounds of appeal it is convenient to deal with them in reverse order.
The entry of judgment in the Magistrates Court
Von Doussas submitted on this appeal that the Judge, based on what was said to be erroneous submissions before him, had made a finding that the judgment entered in the Magistrates Court was a judgment entered by consent, when it was asserted that that was not so. Counsel sought to tender, on the hearing of this appeal, an affidavit of the solicitor who attended at the Magistrates Court hearing on the day judgment was entered. This was fresh evidence which was not before the Judge and which, if considered relevant, could have been placed before him. The Judge had received an affidavit sworn by Mr Nasr’s solicitor who attended on the relevant date before the Magistrate deposing to what then occurred. Von Doussas had adequate notice of the intention to rely on that affidavit before the Judge. No attempt was made to file an answering affidavit. For those reasons the tender of the affidavit of von Doussas’ solicitor was rejected.
The affidavit of Mr Nasr’s solicitor included the following paragraphs:
17.On the 14^th of March 2008, the Judgment was entered in favour of the Appellant in the sum of $6,393.73 in the Magistrates Court action by His Honour Magistrate Gumpl (with the sum of $2,000.00 deducted from the amount agreed on the adjudication, as the Respondent had previously paid this sum to the Appellant).
18.I was present at the Magistrates Court hearing on the 14^th of March 2008 when the Judgment was entered. At the hearing, I specifically asked that His Honour Magistrate Gumpl note that the question of costs of the trial in the Magistrates Court action is yet to be determined (as indicated in the entry of the 14^th of March 2008 in the Copy of Record in the Magistrates Court action). Furthermore, at the hearing, the solicitor in attendance for the Appellant neither applied for costs of the Magistrates Court action, nor for interest on the Judgment.
It was not asserted in the affidavit that the judgment in the Magistrates Court was by consent.
However, the solicitor elsewhere in the affidavit deposed to the circumstances of the application to tax von Doussas’ costs in the Supreme Court and that, following the rulings of the Master, on 11 February 2008, “the adjudication was finalised (without the need for a full taxation), when it was agreed that [von Doussas’] recoverable costs amounted to $8,393.73”. There was no dispute that such agreement had been reached.
The copy of the Record of the Magistrates Court indicates that on 14 March 2008 judgment was entered in the sum of $6,393.73. It does not suggest that it was by consent.
Contrary to the submission of von Doussas’ counsel in this appeal, the Judge did not make a finding that the judgment in the Magistrates Court was entered by consent. His Honour’s finding accurately reflected the material that was before him, namely that the Magistrate “had entered judgment for the amount upon which the parties had agreed”. That says nothing about the attitude of von Doussas as to whether a judgment should be entered at all. The Judge’s finding that the Magistrate had not overlooked interest was also accurate, given that the only information before him was that the solicitor in attendance for von Doussas neither applied for costs of the Magistrates Court action nor for interest on the judgment.
This ground of appeal must be rejected, as must any consequential claim for interest on the judgment sum.
The failure to reverse the Magistrate’s findings
The Judge conducted a careful review of the trial evidence and a review of the Magistrate’s findings based on it. He took into account the criticisms of those findings made by counsel for von Doussas. In my opinion the Judge was entirely justified in upholding the Magistrate’s decision based, as it was, on the Magistrate’s assessment of the credibility of Mr Nasr and of Mr Carabelas, and supported, as it was, by other evidence.
That evidence included the clear desire for personal vindication expressed in the letter of 22 November and in the form and language of the draft statement of claim prepared by Mr Carabelas before the discussion of 24 November 2004. It was clear that Mr Carabelas demonstrated a personal interest and intention that he and his firm should vindicate their position by taking whatever steps were necessary to have the District Court order revoked. That evidence also included the failure to discuss the question of the likely costs of the appeal save in one respect only mentioned below, the failure to discuss the consequences to Mr Nasr of not succeeding on the appeal, the failure to provide another letter of instruction or to amend the earlier one and the failure to ask for further payment of costs on account of the appeal, particularly when payment had been sought and provided on the initial instructions being given by Mr Nasr, and particularly when, on his own evidence, it was contemplated by Mr Carabelas at the time of the 24 November discussion that Mr Stanley should be briefed on the appeal as counsel. Finally, that evidence also included the failure to record any cost entry of the discussion of 24 November at which Mr Carabelas claimed instructions were given by Mr Nasr to proceed with the appeal – an obviously chargeable item if indeed instructions were so given, and not chargeable if Mr Nasr’s version was correct.
The finding was also supported by other facts which suggested a strong motive on the part of Mr Carabelas to take the action in any event. The only basis in law for the ordering of the injunction could be the conflict of interest arising out of the requirement, on the one hand, to act in the best interests of his current client by divulging or acting on confidential information obtained from the opposing party, when he had, on the other hand, a continuing obligation and a fiduciary duty to the opposing party as a former client not to divulge or act on such confidential information to the detriment of that party. What no doubt generated concern on the part of Mr Carabelas was the District Court Judge’s finding about how that conflict might be dealt with. In his reasons for making the order when referring to Mr Carabelas the Judge said:
“… there is a danger that his contract with the parties and in particular [Ms Vihervaara] in connection with the two previous matters could give rise to a possibility of confidential information being used.”[4]
The implication from that finding is the possibility that Mr Carabelas could misuse confidential information given to him by Ms Vihervaara. Such a remark might well cause anger and concern, as it appears to have in the case of Mr Carabelas, and a personal desire to rectify the situation if the practitioner considered either that he would never allow himself to be placed in such a position or if he considered that there was no factual foundation for the finding.
[4] See Nasr v Vihervaara [2005] SASC 83, [12], (2005) 91 SASR 222, 225.
Mr Carabelas gave evidence of his observation during the 24 November discussion that von Doussas might not be able to charge for the conflict appeal anyway if the appeal was lost. Mr Carabelas’ explanation was that this would be by virtue of the finding of the existence of a conflict of interest by the Full Court rendering the work done of no benefit to the client. However, it also demonstrates an additional reason why the solicitor might wish to appeal in his own interests. If he were found to be in a situation of conflict by the Full Court he would, on that basis, be unable to charge for any work done on behalf of his client, including conducting the proceedings in the District Court. It would follow that Mr Carabelas and von Doussas, on Mr Carabelas’ own admission, therefore had a personal interest in having the decision of the District Court reversed.
The finding of the Magistrate that von Doussas, through Mr Carabelas, agreed to pursue the appeal at its own expense is also consistent with the way the appeal was subsequently conducted. There was the failure to consult with Mr Nasr about the briefing of Mr Stanley and the advice in the letter of 21 January 2005 that “we” have engaged Mr Stanley to conduct the appeal, and the reference to “our” counsel in the letter of 3 February 2005. There was also the failure to consult Mr Nasr over the retaining of J P Stevens Lawyers to act as the solicitors on the appeal, and the fact that the only mention of costs in the letter of 18 March, following the Full Court decision, was in respect of the costs payable by Ms Vihervaara.
Counsel for von Doussas argued that Mr Nasr’s silence and failure to respond to letters after June 2005 about the payment of Mr Stanley’s and of the two solicitors’ fee accounts was telling against Mr Nasr. Mr Nasr had denied such silence. But in any event, as Mr Nasr believed on good grounds that he was not responsible for any of the fees, he had no obligation to respond.
There was nothing in the evidence which compelled a finding that Mr Nasr had instructed von Doussas to proceed, at Mr Nasr’s cost, with the appeal. It was open to the Magistrate to make the findings he did and to the Judge to confirm those findings.
It follows that, in my opinion, these grounds of appeal do not succeed.
The jurisdiction of the Magistrates Court
Von Doussas conceded that whether a person has in fact engaged a solicitor, and thus whether a retainer exists, is a matter within the general common law jurisdiction of the Magistrates Court and other courts of general jurisdiction. They argued, however, that the question of what is properly recoverable as between solicitor and client pursuant to a retainer that is admitted or found to exist is a statutory jurisdiction reposed by the Legal Practitioners Act 1981 exclusively in the Supreme Court, although it was conceded that there was a special statutory jurisdiction that an inferior court had with respect to the costs of proceedings in that Court.
The argument was based on the decision of this Court in the KWLC Case.[5] In that case a firm of solicitors sued their former client in the Local Court to recover the amount of their charges. The defendant claimed that it had only retained an individual member of the firm personally, and that the solicitor had agreed to set off the fees against the value of services provided or to be provided by the defendant to that solicitor. One of the questions raised in the case was whether the defendant was precluded, by reason of its failure to have the bills taxed pursuant to s 17 of the Legal Practitioners Act 1936-1979 (SA), from disputing the existence of the retainer of the firm of solicitors. Another question was whether the defendant was entitled, on the trial of the action, to dispute the reasonableness and propriety of the charges.
[5] (1981) 29 SASR 316.
On a case stated by the Local Court, the Full Court decided, on the first question, that the defendant was entitled to contend that it did not retain the firm but that it retained an individual solicitor, and was entitled to lead evidence to that effect. On the second question, it ruled that the Local Court Judge was correct in allowing objection to the evidence as to the reasonableness of the charges on the footing that, if disputed, the defendant should be afforded an opportunity to have the costs taxed by the Supreme Court pursuant to s 17 of Legal Practitioners Act 1936-1979 and O 65 r 19 of the Rules of the Supreme Court and that judgment would then be entered for the amount fixed by the taxing Master. If, however, the client did not seek to have the costs taxed, that should be treated as evidence that the charges were reasonable and proper, and judgment could be entered accordingly.
On the basis of that case counsel for von Doussas argued that, when the retainer was admitted, the terms of the retainer and whether it included a variation that there would be no charge for the conflict appeal, could only be decided on taxation of a bill of costs under the Legal Practitioners Act. In other words, if the retainer existed, it was only the Supreme Court that could determine the amount due under it.
On the findings of the Magistrate, confirmed by the Judge, the conduct of the conflict appeal was not a continuation or a variation of the initial retainer between the parties. Mr Nasr gave no instructions to appeal at all. On the Magistrate’s findings of primary fact there was no retainer but a different type of agreement. What Mr Nasr agreed to do was to lend his name to an appeal which Mr Carabelas wished to undertake at no expense to Mr Nasr, on the understanding that von Doussas would continue to act for him (if permitted to do so) in the District Court proceedings. There was no continuing retainer nor any new retainer with an implied agreement to pay reasonable costs. The question of Mr Nasr’s liability under a retainer does not arise. On that footing it is not necessary to deal with this ground of appeal, namely that the Magistrates Court had no jurisdiction to determine Mr Nasr’s liability under a retainer in respect of the conflict appeal. That would only arise if there were a continuing retainer of von Doussas by Mr Nasr for the purpose of the conflict appeal.
However, as I understand von Doussas’ argument, they still maintain that, based on the authority of the KWLC Case the Magistrate had no jurisdiction even to enter judgment for the amount he did. It is therefore necessary to consider the effect of that decision.

In relation to the first point decided, King CJ, with whom Mohr and Matheson JJ agreed, considered[6] that the existence of a retainer was a matter to be determined in a trial court.[7] There was nothing in the Legal Practitioners Act 1936-1979 which posed any obstacle to that course being taken. King CJ pointed out that under the Legal Practitioners Act 1936-1979 the only person who could require taxation of a bill of costs was a person “who is liable to pay or had paid or is chargeable” with the bill of costs. That necessarily presupposed the existence of a retainer and a concession on the part of the client applying for the taxation that he had retained the solicitor. Whether a retainer existed could not be determined on taxation.
[6] Ibid 317.
[7] Burridge v Bellew (1975) 32 LTNS 807.
There is nothing in s 42 of the Legal Practitioners Act 1981 which would suggest that the power to determine whether a retainer exists or to determine a liability for costs under that section is exclusive of the jurisdiction of other courts.
We were referred to some cases concerning the power of a taxing master to determine questions of a disputed retainer. Re Herbert[8] decided that where a client admitted the retainer but disputed the solicitor’s authority to preform certain work under it, the taxing Master could decide the client’s liability for the disputed items. Re Jones[9] was a case where the client had obtained an ex parte order for taxation of a solicitor’s bill. It was held that he could not dispute the retainer by denying liability for every item in the bill, as the client, by applying for the order for taxation, was admitting the retainer. However, liability for particular items in the bill could be challenged.
[8] (1887) 34 ChD 504.
[9] (1887) 36 ChD 105.
Those cases do not decide that a taxing master has exclusive jurisdiction to decide liability for work performed under a retainer. There is nothing in them which requires qualification on anything that was decided by the Full Court in the KWLC Case, namely that a civil court has jurisdiction to determine liability under an alleged retainer.
As to ascertaining the reasonableness of a disputed bill of costs, the Court in KWLC Case held, based on numerous English and Australian authorities, that reasonableness of a solicitors’ charge can be disputed on the trial of an action to recover the costs. The difficulty that presents itself where the action is brought in a court other than the Supreme Court, where ascertainment of the amount can be referred to a taxing master, is that there is no ready satisfactory mechanism for resolving the issue of disputed items. The resolution adopted by the Court in KWLC Case was as stated above.
A similar remedy is available under the Legal Practitioners Act 1981, with the added flexibility that the bill can be taxed on the application of the solicitor under s 42(1)(a), as well as by the person who is liable to pay or has paid any legal costs. Furthermore, the Magistrate in this case could have ordered von Doussas to apply to have the costs, other than those of the conflict appeal, taxed.
So far as is relevant s 42 of the Legal Practitioners Act 1981 provides:
(1)On the application—
(a)     of a person claiming to be entitled to legal costs; or
(b)     of a person who is liable to pay, or who has paid, any legal costs,
the Supreme Court may tax and settle the bill for those costs.
…
(2)Where an application has been made under subsection (1), the Supreme Court may—
(a)     restrain a person claiming to be entitled to the costs from commencing an action for recovery of the costs; or
(b)     stay any proceedings for recovery of the costs.
…
(5)    Any court in which proceedings for the recovery of legal costs have been instituted may order the plaintiff to apply to have the legal costs taxed in accordance with this section, and may adjourn the proceedings until the taxation has been completed.
The power contained in subsection (2) is discretionary. It is unlikely to be exercised where there is a dispute in another court requiring oral evidence as to the existence or otherwise of the retainer. It could well be exercised if such a dispute has been resolved or did not exist and a question of quantum or liability for particular items under the retainer requires resolution. It probably does not require a recovery action to be stayed if there is other evidence as to the reasonableness of the costs. It is a complementary power to that referred to by the Court in KWLC Case of the trial court adjourning proceedings to enable the disputed costs to be taxed.
The precise means adopted by the Court in KWLC Case for the resolution of a dispute on quantum is not now necessary, given the powers of a trial court now contained in s 42(5) of the Legal Practitioners Act 1981.
In short, there is nothing in the Legal Practitioners Act or in any relevant decision which confers any exclusive jurisdiction on this Court for the resolution of disputes on costs between a solicitor and a client or alleged client. I agree with the single Judge that s 42 provides a convenient and, I would add, a flexible means of resolving disputes both as to liability and quantum in such cases, with the principal role of this Court being, on taxation, to determine the amount of the costs where a retainer exists.
In this case it was not necessary for the Magistrate to make such an order under s 42(5) of the Legal Practitioners Act, as the initiative was taken by von Doussas to have their costs taxed before a master. The taxation was formally adjourned by the taxing Master on 11 February 2008, the Master noting that the parties had agreed to the following:
1Whereas the Court has held that the solicitor is limited to the amounts charged in its bills (less the disallowed appeal costs), and whereas the parties do not believe the prospect of reducing the solicitor charges below those bills justifies the expenses of a full taxation, for the purposes of the Magistrates Court action, the parties agree that the solicitor's costs are an amount of $8,393.73 (excluding disallowed appeal costs).
2The Court will not issue an immediate allocatur but reserves liberty to apply for an allocatur to both parties.
3This agreement and order is without prejudice to the rights of either party to appeal the Magistrates Court decision or any allocatur issued by the Court (including on grounds challenging any part of the Master's initial ruling) or to present further argument on any application for an allocatur (including on the issue of getting off the file).
4Costs of taxation reserved, but liberty given to apply for the same.
5The issue of any refund of monies paid by the plaintiff and used for counsel fees is not dealt with, with the intent that if not agreed it is to be dealt with before the Magistrate.
The amount having been so agreed, that was evidence on which the Magistrate could properly act in entering judgment for the amount that he did. To the extent that it has any relevance at all, there is no substance in this ground of appeal.
Conclusion
It follows that for the foregoing reasons I would dismiss the appeal.
GRAY J. I would dismiss the appeal. I do not wish to add to the reasons of Bleby J.
LAYTON J. I agree that the appeal should be dismissed for the reasons given by Bleby J.