Wentworth v Rogers

[2005] NSWSC 143

CITATION:	Wentworth v Rogers [2005] NSWSC 143
HEARING DATE(S):	10 December 2004
JUDGMENT DATE :	21 February 2005
JURISDICTION:	Common Law Division
DECISION:	Appeals dismissed with costs

LEGISLATION CITED:	Legal Profession Act 1987 Home Builders Act Builders Licensing Act
CASES CITED:	Graham v Alum-Lite Pty Ltd (unreported NSWCA 25 March 1997) Howard v Mechtler - (2000) NSWSC 455 Muriniti v Lyons - (unreported)2004 NSWSC 135 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 Craven-Ellis v Canons Ltd (1936 2KB 403) Phillips v Ellison Bros Pty Ltd (1941) 65 CLR 221 Wentworth v Rogers (1999) NSWCA 403A
PARTIES:	Katherine Wentworth- First Plaintiff Salvatore Russo-Second Plaintiff Gordon John Rogers - Defendant
FILE NUMBER(S):	SC SC 013494/01; SC 013492/01
COUNSEL:	First Plaintiff in person Mr D P F Officer QC/Ms V Culkoff - Second Plaintiff Mr P J Beazley, Solicitor - Defendant
SOLICITORS:	First Plaintiff in person Russo & Partners - Second Plaintiff Beazley Singleton - Defendant

LOWER COURT JURISDICTION:	Costs Assessor
LOWER COURT FILE NUMBER(S):	91247/00; 91248/00
LOWER COURT JUDICIAL OFFICER :	Mr I F Dwyer

- 34 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

PATTEN AJ

21 FEBRUARY 2005

No:13494 of 2001 – WENTWORTH & ANOR v ROGERS
No:13492 of 2001 – WENTWORTH v ROGERS JUDGMENT:

1 HIS HONOUR: Before the court are appeals pursuant to s. 208L of the Legal Profession Act (the Act), from two determinations of a costs assessor (Mr I F Dwyer). Each determination was dated 24 October 2001. One found that $25,300.50 was payable by the Plaintiff, Katherine Wentworth (Ms Wentworth) to the Defendant (Mr Rogers) in proceedings 91247 of 2000, and the other found that $147,085.03 was payable by Ms Wentworth and the Plaintiff, Mr Russo, to Mr Rogers in proceedings 91248 of 2000.

2 Section 208L of the Act provides:

“ 208L Appeal against decision of costs assessor as to matter of law

(1) A party to an application who is dissatisfied with a decision of a costs assessor as to a matter of law arising in the proceedings to determine the application may, in accordance with the rules of the Supreme Court, appeal to the Court against the decision.

(2) After deciding the question the subject of the appeal, the Supreme Court may, unless it affirms the costs assessor’s decision:

a) Make such determination in relation to the application as, in its opinion, should have been made by the costs assessor, or

b) Remit its decision on the question to the costs assessor and order the costs assessor to re-determine the application.

(3) On a re-determination of an application, fresh evidence, or evidence in addition to or in substitution for the evidence received at the original proceedings, may be given.”

The Relevant Costs Orders:

3 Although nothing turns on this, I note that the costs in proceedings 91247/00 were payable pursuant to orders of Sperling J made on 28 August 1997 and the Court of Appeal (Handley JA, Stein JA and Sheppard AJA) on 29 October 1998. The costs, which were the subject of proceedings 91248/00, were ordered to be paid by the Court of Appeal (Beazley JA and Clarke AJA) on 12 June 1997 and the Court of Appeal (Handley JA, Stein JA and Sheppard AJA) on 21 October 1998.

4 The costs assessor attached a Statement of Reasons to each of his determinations. Relevantly to the issues, which arise in these appeals, the reasons in each matter were virtually identical. In proceedings 91247/00 they were:-

“4. IN RESPECT TO DISPUTED COSTS:
(a) The basis on which costs were assessed:
(i) A Costs Order is given to indemnify the recipient of the Order in whole or in part for the costs payable by him to his own legal practitioners in respect to the proceedings, the subject of the Costs Order.
(ii) The amount, if any, payable by a recipient of a Costs Order to his own legal practitioners is determined by the retainer between the recipient of the Costs Orders and each of the legal practitioners employed by him.
(iii) The extent of the indemnity depends on the type of party/party Costs Order made by the court and the liability of the recipient of the Order to his own legal practitioners for payment of their costs.
(iv) Pro bono publico being for the public good prima facie imposes no liability on the party receiving the benefit for payment of costs to his legal practitioners.
(v) If the recipient of the Costs Order has no liability to his own legal practitioners for costs then no amount is payable pursuant to the Costs Orders by the party against whom the Costs Order was made.
(b) The basis on which submissions were dealt with:
(i) There is no evidence of costs disclosure or a costs agreement apart from acknowledgements with Lydiard and Preston 10 February 1997.
(ii) Failure to disclose the basis of costs as required by Section 175 of the Legal Profession Act under Section 182 of the Legal Profession Act may be unsatisfactory professional conduct or professional misconduct but other wise permits the client to not pay the costs until they have been assessed.
(iii) The extent of the indemnity depends on the type of party/party Costs order made by the Court and the liability of the recipient of the Order to his own legal practitioners for payment of their costs.
(iv) Pro bono publico being for the public good prima facie imposes no liability on the party receiving the benefit for payment of costs to his legal practitioners.
(v) If the recipient of the Costs Order has no liability to his own legal practitioners for costs then no amount is payable pursuant to the Costs Orders by the party against whom the Costs Order was made.
(vi) The costs assess under this Application are Order dated 28 August 1997 of Sperling J, Plaint No CLK19228 of 1982 and Order of Court of Appeal dated 29 October 1998, Handley Stein J and Sheppard AJA Plaint No. CA 40590 of 1997.
(vii) The Order by Sperling J dated 28 August 1997 related to Notice of Motion dated 12 December 1994 by the Applicant seeking to set aside Judgment of Loveday AJ striking out Cross Claim for malicious prosecution and the Notice of Motion dated 13 December 1994 by the First Respondent seeking a permanent stay of the Cross Claim
(viii) The Order dated 28 August 1997 was that the Respondents pay the Applicant’s costs on an indemnity basis of and incidental to the Notice of Motion of 12 December 1994 and the Notice of Motion of 13 December 1994. The Order covers the whole of the hearing from 23 March 1995 to 10 December and the Application by the First Respondent for access to medical records, the Application to Sully J for a ruling on a claim for legal professional privilege, the Application by the First Respondent for reconsideration and to set aside the Judgment of 10 September and the Applications by the First Respondent to Sully and Sperling for disqualification.
(ix) The Order dated 29 October 1999 allowed the Appeal only in relation to Sperling’s Order that there be allowed a set-off and ordered tha the Respondents pay 90% of the applicant’s costs on a party/party basis of the Application for Special Leave to Appeal.
(x) The question of the nature of the retainer between the Applicant and Gayle Preston of Counsel, Virginia Lydiard of Counsel and/or Richard Licardy & Co was determined to be no win/no pay and not pure pro bono (i.e. pro bono publico) for the following reasons:
(aa) The Bar Association by its Circular 71/93 dated 29 September 1993 called for Members to join a voluntary pro bono legal aid scheme that is on an unpaid basis.
(bb) The Bar Association by its Circular 85/93 dated 26 October 1993 clarified Circular 71/93 and advised that pro bono volunteers in civil work would be on the basis of no win/ no pay basis.
(cc) By circular dated 26 May 1994 Tobias QC on behalf of the Bar Association called for Senior and Junior Counsel to assist the Applicant in litigation between the Applicant and the First Respondent. He indicated that Senior and Junior Counsel had been briefed on a no win/no pay basis to represent the First Respondent and that the previous solicitor, Trevor Khan of Khan & McLean was acting on a no win/no pay basis.
(dd) The Bar Association by its letter dated 3 March 1995 acknowledged that Ms Lydiard’s appearance pro bono for Mr Rogers was in no way facilitated by the Bar Association.
(ee) Preston in her letter of 10 March 1995 enclosed an application to the Law Society by the Applicant for the appointment of a pro bono solicitor to assist Lydiard and herself in relation to setting aside the Order of Justice Loveday.
(ff) On 10 March 1995 Preston advised the Law Society by telephone that a solicitor had been found.
(gg) Correspondence passed between Licardy and the Law Society during 1995 in relation to payment of disbursements from the Law Foundation Pro Bono Disbursement Fund.
(hh) On 6 February 1997 Lydiard advised the Applicant that she was in a position to seek indemnity costs from the Respondents, that the costs were considerable and that they were updating their bill. She also enclosed fee agreements for Preston and herself.
(ii) By letter dated 6 February Licardy advised the Second Respondent that he did not inform the First Respondent that acting pro bono disentitled him to costs.
(jj) On 10 February 1997 the Applicant signed acknowledgements to Lydiard and Preston that fees are on a no win/no pay basis.
(kk) By letter dated 13 February 1997 Licardy advised the Law Society that it was agreed with the Applicant that in the event that the Applicant was successful in defending the proceedings and the Applicant obtained an Order for costs then Counsel and Licardy’s costs would be paid.
(ll) The Applicant in his Affidavit of 6 March 1997 acknowledged that the Agreement with Lydiard and Preston was on a no win/no pay basis.
(mm) The Applicant in his Affidavit of 10 March 1997 acknowledged that the Agreement with Lydiard and Preston was on a no win/no pay basis.
(nn) Licardy in his Affidavit of 12 March 1997 acknowledges that Lydiard, Preston and himself agreed with the Applicant to act on a no win/no pay basis.


(oo) By letter dated 19 December 1997 to Shand QC the Applicant requested him to act on a no win/no pay basis.
(pp) Preston in Transcript dated 7 December 19987 challenged the First Respondent’s assertion that Preston was acting pro bono.
(qq) Lydiard in Transcript dated 20 February 1998 said that she was acting pro bono but this meant on a contingency basis. She said that the Bar Association itself had sent out a leaflet on the issue.
(rr) I am satisfied that Lydiard and Preston were acting on a no win/no pay basis in accordance with the Bar Association’s Circular 85/93 and the circular of Tobias QC of 26 May 1994 in that pro bono for Counsel in a civil action meant no win/no pay and that after 10 February 1997 this was confirmed by the acknowledgements of that date. I am satisfied that Licardy was not appointed by the Law Society as a pro bono solicitor, that there was confusion between the Law Society and himself as to the basis on which he was retained by the Applicant but that he was retained by the Applicant throughout on a no win/no pay basis.

5 In the above reasons, references to the Applicant were references to Mr Rogers, and references to the First Respondents were references to Ms Wentworth and Mr Russo.

Issues in the Appeal :

6 The questions of law for decision, which I take from the written submissions of Mr David Officer QC and Ms Vera Culkoff, counsel for Mr Russo, (Ms Wentworth appeared in person and, in effect, adopted the submissions of Mr Officer), are:

1. whether the Costs Assessor was entitled to determine the nature of the retainers in circumstances where the Plaintiffs contended that the Defendant was under no liability to his legal advisers and hence no liability could attach to the Plaintiffs.
2. whether the retainers are void pursuant to s 184(4) of
the Act
3. whether, as such, the Defendant is not entitled to any award, however based, including any award on a quantum meruit basis.
Proceedings before Barrett J:

7 In addition to appealing against the determinations of the costs assessor in relation to matters of law, the Plaintiffs sought leave to appeal against the determinations pursuant to s. 208M of the Act. Those applications were heard by Barrett J on 1 August 2002 and on 15 August 2002, he dismissed them with costs. In the course of his reasons for taking that course, His Honour provided a detailed analysis of the relevant sections of the Act.

8 As it was apparently contemplated that Barrett J would also hear the appeal under section 208L, his analysis became contentious, in that he expressed views as to the proper interpretation of sections directly involved in the appeal on matters of law. For that reason, in a judgment published on 16 December 2002, Barrett J disqualified himself from hearing the appeal under s.208L.

Relevant Legislation:

9 Part 11 of the Act (sections 173 to 108V inclusive) is headed “Legal Fees and Other Costs”. Section 173 defines “costs agreement” to mean an agreement referred to in s.184 as to costs for the provision of legal services.

10 Section 174 confers a number of rights upon the client of a barrister or solicitor, including the right to be given information about how the client will be charged. Sections 175, 176 and 177 detail the information which must be disclosed in furtherance of that general obligation and s.178 stipulates that, in general, the information must be disclosed before the barrister or solicitor is retained.

11 Section 179 requires that disclosure must be in writing but permits it to be made “separately or in a costs agreement, or in any other contract relating to the provision of the legal services concerned”.

12 Sections 182 and 183 deal with the effect of non-disclosure of matters required to be disclosed, as follows:-

“182 Effect of non-disclosure of matters related to basis of costs
(1) If a barrister or solicitor fails to make a disclosure to a client in accordance with this Division of the matters required to be disclosed by section 175 in relation to costs, the client need not pay the costs of the legal services unless the costs have been assessed under Division 6.
(2) A barrister or solicitor who fails to make a disclosure in accordance with this Division of the matters required to be disclosed by sections 175 or 176 in relation to costs may not maintain proceedings for the recovery of the costs unless the costs have been assessed under Division 6.
(3) The costs of any assessment referred to in this section (including the costs of the costs assessor) are payable by the barrister or solicitor seeking to recover costs.
(4) Any failure referred to in this section does not of itself amount to a breach of this Act. However, the failure is capable of being unsatisfactory professional conduct or professional misconduct.
183 Effect of non-disclosure of estimated costs
(1) A failure by a barrister or solicitor to make a disclosure in accordance with this Division under section 177 of an estimate of the likely amount of the costs of legal services to be provided by the barrister or solicitor (or any significant increase in the estimate) does not of itself amount to a breach of this Act.
(2) However, the failure is capable of being unsatisfactory professional conduct or professional misconduct.

13 Of particular significance to this case are sections 184 and 186, which provide:

“184 Agreement about costs:

(1) An agreement as to the costs of the provision of legal services may be made with a client by:
(a) the barrister or solicitor who is retained by the client to provide the services, or
(b) the barrister or solicitor retained on behalf of the client by another barrister or solicitor.
(2) An agreement as to the costs of the provision of legal services may also be made between the barrister or solicitor providing the services and another barrister or solicitor who retained that barrister or solicitor on behalf of the client.
(3) An agreement under this section is called a costs agreement.
(4) A costs agreement is void if it is not in writing or evidenced in writing.
(5) A costs agreement may form part of a contract for the provision of legal services.
(6) A costs agreement may consist of a written offer that is accepted in writing or by other conduct. A disclosure in accordance with Division 2 under section 175 or 176 may constitute an offer for the purposes of this subsection.
186 Conditional costs agreements
(1) A barrister or solicitor may make a costs agreement under which the payment of all of the barrister’s or solicitor’s costs is contingent on the successful outcome of the matter in which the barrister or solicitor provides the legal services.
(2) Any such costs agreement is called a conditional costs agreement.
(3) A conditional costs agreement may relate to proceedings in a court or tribunal, except criminal proceedings.
(4) A conditional costs agreement must set out the circumstances constituting the successful outcome of the matter.
(5) A conditional costs agreement may exclude disbursements from the costs that are payable only on the successful outcome of the matter.

14 Division 6 of Pt 11 of the Act deals with the assessment of costs. The division applies to clients and other persons in receipt of a bill of costs for providing legal services and to persons liable to pay, or entitled to receive the benefit of orders for costs made by a court or tribunal. In effect, the Act establishes machinery for determination by a costs assessor of the amount properly payable in either case.

15 Sections 208 to 208D inclusive stipulate the procedures to be followed by, and the powers of a costs assessor. Sections 208, applicable to all assessments provides:-

“208 (1) A costs assessor must not determine an application for assessment unless the costs assessor:
(a) has given both the applicant and any barrister, solicitor or client or other person concerned a reasonable opportunity to make written submissions to the costs assessor in relation to the application, and
(b) has given due consideration to any submissions so made.


(2) In considering an application, a costs assessor is not bound by rules of evidence and may inform himself or herself on any matter in such manner as he or she thinks fit.

(3) For the purposes of determining whether an application for assessment may be or is required to be made, or for the purpose of exercising any other function, a costs assessor may determine any of the following:
(a) whether or not disclosure has been made in accordance with Division 2 and whether or not it was reasonably practicable to disclose any matter required to be disclosed under Division 2,

(b) whether a costs agreement exists, and its ` terms.”
Sections 208A to 208D inclusive relate to assessments of bills of costs. They have, I think some relevance to issues raised in this case. Section 208A, 208B and 208C provide:


“208A Assessment of bills generally

(1) When considering an application relating to a bill of costs, the costs assessor must consider:

(a) whether or not it was reasonable to carry out the work to which the costs relate, and
(b) whether or not the work was carried out in a reasonable manner, and
(c) the fairness and reasonableness of the amount of the costs in relation to that work.

(2) A costs assessor is to determine the application by confirming the bill of costs or, if the assessor is satisfied that the disputed costs are unfair or unreasonable, by substituting for the amount of the costs an amount that, in his or her opinion, is a fair and reasonable amount.

(3) Any amount substituted for the amount of the costs may include an allowance for any fee paid or payable for the application by the applicant.

(4) If the barrister or solicitor is liable under section 182 (3) to pay the costs of the costs assessment (including the costs of the costs assessor), the costs assessor is to determine the amount of those costs. The costs incurred by the client are to be deducted from the amount payable under the bill of costs and the costs of the costs assessor are to be paid to the Manager, Costs Assessment.

(5) A costs assessor may not determine that any part of a bill of costs that is not the subject of an application is unfair or unreasonable.

208B Additional matters to be considered by costs assessors in assessing bills of costs

In assessing what is a fair and reasonable amount of costs, a costs assessor may have regard to any or all of the following matters:
(a) whether the barrister or solicitor complied with any relevant regulation, barrister rule, solicitor rule or joint rule,
(b) whether the barrister or solicitor disclosed the basis of the costs or an estimate of the costs under Division 2 and any disclosures made,
(c) any relevant advertisement as to the barrister’s or solicitors’ costs or skills,
(d) any relevant costs agreement (subject to section 208C),
(e) the skill, labour and responsibility displayed on the part of the barrister or solicitor responsible for the matter,
(f) the instructions and whether the work done was within the scope of the instructions,
(g) the complexity, novelty or difficulty of the matter,
(h) the quality of the work done,
(i) the place where and circumstances in which the legal services were provided,
(j) the time within which the work was required to be done.

208C Costs agreements not subject to assessment

(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. “

16 Section 208D empowers a costs assessor to determine whether a term of a particular costs agreement is unjust and lists a wide range of matters which the costs assessor may or must take into account in considering the question, including, for instance, issues relating to the bargaining powers of the respective parties, the opportunities for negotiation, and whether any undue influence was applied.

17 Subdivision 3 (sections 208F to 208I) is headed “Assessment of party/party costs”. Sections 208F and 208G provide:-

“208F Assessment of costs -costs ordered by court or tribunal

(1) When dealing with an application relating to costs payable as a result of an order made by a court or a tribunal, the costs assessor must consider:
(a) whether or not it was reasonable to carry out the work to which the costs relate, and
(b) what is a fair and reasonable amount of costs for the work concerned.

(1A) An assessment must be made in accordance with the operation of the rules of the relevant court or tribunal that made the order for costs.

(2) A costs assessor is to determine the costs payable as a result of the order by assessing the amount of the costs that, in his or her opinion, is a fair and reasonable amount.

(3) If a court or a tribunal has ordered that costs are to be assessed on an indemnity basis, the costs assessor must assess the costs on that basis, having regard to any relevant rules of the court or tribunal.

(4) The costs assessed are to include the costs of the assessment (including the costs of the parties to the assessment, and the costs assessor). The costs assessor may determine by whom and to what extent the costs of the assessment are to be paid.

(5) The costs of the costs assessor are to be paid to the Manager, Costs Assessment. “


“208G Additional matters to be considered by costs assessors in assessing costs ordered by court or tribunal
In assessing what is a fair and reasonable amount of costs, a costs assessor may have regard to any or all of the following matters:


(a) the skill, labour and responsibility displayed on the part of the barrister or solicitor responsible for the matter,

(b) the complexity, novelty or difficulty of the matter,

(c) the quality of the work done and whether the level of expertise was appropriate to the nature of the work done,

(d) the place where and circumstances in which the legal services are provided,

(e) the time within which the work was required to be done,

(f) the outcome of the matter.”

18 Finally, upon this aspect of the matter, it should be recorded that section 208H deals with the effect of a costs agreement upon the assessment of party/party costs, as follows:-

“208H Effect of costs agreements in assessments of party/party costs

(1) A costs assessor may obtain a copy of, and may have ` regard to, a costs agreement.

(2) However, a costs assessor must not apply the terms of a costs agreement for the purposes of determining appropriate fair and reasonable costs when assessing costs payable as a result of an order by a court or tribunal.”

A Costs Order Operates as an Indemnity:

19 The principle that a costs order operates only as an indemnity in favour of the beneficiary of the order is well established and of long standing. The principle was not challenged by Mr Beazley, who appeared for the Defendant before me. It was, as applicable to this case, succinctly stated by Master Malpass in Howard v Mechtler (2000) NSWSC 455:

“Under an order for costs, the paying party is only obliged to pay such costs as the receiving party was primarily and potentially legally obliged to pay to his solicitor. There is an indemnity only in respect of the costs covered by the order. A receiving party cannot receive a sum in excess of the liability to his own solicitor. There can be co-existing obligations. The liability of the client is not excluded merely because there may be a third person to indemnify the client. It is necessary to prove that under no circumstances does the client have any liability to pay costs to his solicitors.”

The Powers of a Cost Assessor:

20 Under this heading, I intend to encompass the first of the three questions of law, argued before me, as set forth above.

21 It was submitted by Mr Officer that nothing in the Act authorised the costs assessor to determine the issue whether the agreement between Mr Rogers and his lawyers was one pro bono publico in the strictest sense, that is, no fees were to be payable whatever the outcome of the litigation, or “no win/no pay” where fees would be payable only if the outcome of the litigation were favourable to the client. In that context, it might be said that the expression “pro bono”, commonly the shortened version of pro bono publico, is notoriously vague. It is capable of bearing several meanings, depending on the context, one of which might well also be categorised as “no win/no pay”. According to Mr Officer’s submission, the powers of costs assessors are limited to determining the value of the work done, or services rendered, in circumstances where there is no dispute that costs are payable and the only issue is as to the amount. He contended that it is no part of the function of a costs assessor to determine whether, or when, costs are payable.

22 Mr Officer referred to the decision of Dunford J in Muriniti v Lyons (unreported 2004 NSWSC 135). The facts in that case were complicated and the litigation, involving a relatively small amount of money, was very protracted. In the upshot, the point at issue was whether a costs assessor was entitled to find that a condition, precedent to a liability for the payment of legal costs, had been fulfilled. It seems to have been common ground that the costs were payable once the condition, which only indirectly related to the litigation, had been fulfilled. In the course of his reasons, Dunford J said:-

“Under the process introduced by the 1993 Act, the assessment of costs is entrusted to “assessors” appointed by the Chief Justice being barristers or solicitors of at least 5 years standing. An “assessor” is one who assesses, taxes or estimates the value of property (or work), whilst “assess” means to “fix amount” or “estimate value”: Concise Oxford Dictionary , 6th ed (1976). See also Macquarie Dictionary (1981) at 141-2. In construing a covenant in a lease, “assessed” was said to mean “reckoned on the value”: Floyd v Lyons [1897] 1 Ch 633. The essential quality of such an assessor is to fix an amount or to put a value on something such as property or services. There is another type of assessor such as nautical assessors in Admiralty cases, called in to assist and advise the judge on technical matters, but without any deliberative voice: Jowitt: Dictionary of English Law (1959) at 162; but such assessors are irrelevant to the present discussions.

A Costs Assessor under the Act is not an officer of the Court when acting as such; s 208(4), is not part of the Supreme Court and has no power to take sworn evidence or resolve conflicts of evidence: Ryan v Hansen [2000] NSWSC 354, 49 NSWLR 184.

Having regard to the status and powers of Costs Assessors and the ordinary meaning of the word “assessor”, I am satisfied that the powers of Costs Assessors are limited to determining the value of the work done or services rendered in circumstances where there is no dispute that costs are payable and the only issue is as to the amount. It is no part of their function to determine whether or when such costs are payable. The matters set out in s 208A which they must, and in s 208B which they may, take into account are all matters relevant to putting a value on the work done or services rendered and the fairness or justice of the amount claimed; but are not matters which relate to the terms of a costs agreement (particularly if oral) and whether any conditions precedent to payment have been fulfilled. The determination of such questions requires the reception of sworn evidence, which can be tested by cross-examination, and an assessment of such evidence. Costs Assessors do not have the power to deal with such matters.

For similar reasons it has been held that a Costs Assessor has no power to hear a cross-claim by a client against a solicitor based on negligence, nor to award damages: Ryan v Hansen , supra per Kirby J; or to make an assessment when no costs are presently due and payable: Lace v Younan [1999] NSWSC 1072 per Master Harrison (no bill of costs rendered); Baker v Kearney [2002] NSWSC 746 per Master Malpass (judgment in District Court that applicant for assessment not entitled to costs). I am therefore satisfied that on being notified of the dispute as to the plaintiff’s liability to pay the costs, the Costs Assessor should have declined to make a determination or issue a certificate unless and until such issue was resolved.

It could never have been the intention of the legislature that where the liability for a debt for costs was disputed, a party to the dispute could render the other party to the dispute liable for the debt without any judicial determination of the disputed issues between them simply by having the value of the work assessed by a Costs Assessor and the certificate of determination registered as a judgment in a court of competent jurisdiction. Yet this is precisely what the defendant has sought to do in the present case.

In his judgment of 14 July 2000 in no 12152/99 at [13] Davies AJ appears to have taken a different view and indicated that the plaintiff’s contentions as to the agreement and otherwise were matters to be determined in the first instance by the Costs Assessor and then be dealt with by this Court on appeal pursuant to s 208L or 208M, although para [4] of the judgment suggests that the issue now under consideration was not raised in that case. With all respect to his Honour, for the reasons already given, I take a different view.”

23 The view expressed by Davies AJ in earlier proceedings in Muriniti derives support, however, from dicta of the Court of Appeal. In Graham v Aluma-Lite Pty Ltd (Court of Appeal unreported 25 March 1997) the issue was whether the appellant’s costs could include anything for the fees of appellant’s counsel, since counsel had been acting “pro bono”. In the course of his judgment, Priestley JA said:-

“……the matter raised in [the] point was something for the Costs Assessor to consider. It appears from the materials before us in this application that submissions were put to him on the point. Presumably, the proper way of pursuing that point would be to pursue whatever avenues of review or appeal may be available against the Costs Assessor. I do not wish to encourage Aluma-Lite to think that if such avenues are available success will lie at the end of the road. Without having heard argument on the matter, it nevertheless seems to me a doubtful proposition. The answer to the question would depend upon an examination of a number of considerations, including the actual terms upon which counsel agreed to do the work he was asked to do on behalf of Mrs Graham by the Manager of the New South Wales Bar Association’s Legal Assistance Scheme. The court does not know what the terms of counsel’s engagement were. But, in any event, as I have indicated the question, in my opinion, is not one for this court. It is for the Costs Assessor in the first instance and thereafter whatever the Supreme Court Act and Rules provide for review or appeal.”

24 The Court of Appeal considered Aluma-Lite in proceedings between the present parties, Wentworth v Rogers (1999) NSWCA 403A. In the course of their joint judgment, Handley JA, Stein JA and Sheppard AJA said:-

“During the course of the hearing we indicated to the parties that we were disposed to follow what Priestley JA had said (in Aluma-Lite). His judgment was agreed in by Mason P and Cole JA and it behoves us to follow it unless we are convinced that it is not correctly decided. In our respectful opinion, it is correctly decided. We do not see what other course there is that could be taken. It follows that the submissions made by Ms Wentworth and Mr Russo that no order for costs should be made in favour of Mr Rogers because his counsel and solicitor had acted pro bono should be rejected.

Of course that does not mean that eventually Ms Wentworth and Mr Russo may not be successful on the point they have taken. The reason the submission has been rejected is because this Court is not the appropriate forum to deal with it. Even if Mr Rogers is not entitled to recover any professional costs for the work done by his counsel and solicitor, he may still be entitled to recover on an assessment for any disbursements and witnesses’ expenses he has incurred. See Cachia v Hanes (1994) 179 CLR 403.”

25 In my opinion, there is a significant difference between, on the one hand, the issue which Dunford J held the costs assessor was incompetent to decide, and the issues raised in the cases referred to by him, Ryan v Hansen, Lace v Younan and Baker v Kearney and, on the other hand the issue purportedly determined by the costs assessor in this case, namely, the very existence of any obligation by Mr Rogers to pay costs to his solicitor. The reasons of Dunford J, in my opinion, are distinguishable on that basis.

26 Noteworthy, in my view, is the case of Ryan v Hansen referred to by Dunford J, which concerned the question whether a Local Court in which a costs assessors determination had been registered as a judgment could or should entertain a cross-claim for negligence against the solicitors. The argument was, that the matter should have been dealt with by the costs assessor, in accordance with principles established by the High Court in Port of Melbourne Authority v Anshun Pty Ltd (1980-81) 147 CLR 189. After holding that it was implicit in the costs assessors task that he “must determine that there existed relevantly a solicitor/client relationship between the parties to the bill”, Kirby J, later in his judgment, discussed the functions of a costs assessor:-

“What emerges from this analysis?
First, I should state the obvious lest it be overlooked. A costs assessor’s task is to determine a bill of costs. Items on the bill may be allowed or disallowed. There is no power to determine the validity or otherwise of a cross claim, or to award damages.

Second, a costs assessor may disallow items claimed by a solicitor because they are unfair or unreasonable (s208A), or outside the specific instructions given by the client (s208B(f)).

Third, costs may be disallowed if they have been incurred improperly, or without reasonable cause (s208P(1)).

Fourth, if through the solicitor’s negligence or ignorance, expenditure has been incurred, the assessor may disallow such expenditure on the basis that it has not been properly incurred ( Re Massey & Carey ).

Fifth, if, through negligent advice, work has been done or expenditure has been incurred, the assessor may disallow such expenditure, or the cost of that work ( Re Windeyer ).

Sixth, work performed by the solicitor which is useless in accomplishing the objective which the client had in view may also be disallowed by the assessor ( Re Windeyer ).

Seventh, if costs have been wasted by undue delay, or any other misconduct or default on the part of the solicitor, the costs assessor may disallow such costs (s208P(1)).

Eighth, if a court or tribunal makes an order for costs against the client, and the circumstances which brought about that order were, in truth, the responsibility of the lawyer, not of the client, then (subject to the default being characterised as one falling within s208P(1)), the costs assessor may direct the lawyer to repay such costs.

Ninth, where a solicitor is negligent, there may be a number of consequences for the client. The client may be disadvantaged in having work done for which he is later charged, where there has been no benefit from that work. The consequences for the client, however, may go beyond that. The negligence may bring about the failure of the action. The client then loses what he sought to gain by the litigation. Or the client may be disadvantaged in some other way. He may, for instance, alter his position to his detriment as a result of poor advice. Where the solicitor's negligence has consequences beyond the cost of the work performed, the matter is properly one for a cross action.

Tenth, that is not to say that the client, in such circumstances, can afford to ignore an application by the solicitor to have a bill of costs assessed. The client, in such circumstances, not only has a right to claim damages in a cross claim, but the right to resist (upon the grounds set out above) a claim for the cost of the work performed. A negligent solicitor, in such circumstances, can only recover for services which, notwithstanding his negligence, were of some real advantage to the client ( Cachia v Isaacs ).

27 In my opinion, what was said by Kirby J in Ryan v Hansen illustrates that parliament intended that costs assessors be given a role extending well beyond the mere determination of the value of the work done or services rendered. Moreover, I respectfully agree with the opinion of Barrett J expressed at paragraphs 47 and 48 of his judgment of 15 August 2002:-

“Particularly pertinent in the present context are the provisions in s.208H about a costs agreement. In carrying out a Subdivision 3 assessment, an assessor “may” (not “must”) obtain a copy of, and have regard to, a costs agreement. The only possibly relevant costs agreement is one between the party in whose favour costs are awarded and that party’s lawyers. The assessor is, however, limited in what he or she may do with the information obtained from such a costs agreement. That information must not be used for the purpose of determining the appropriate fair and reasonable costs to be awarded. It follows that the content of the costs agreement must be disregarded entirely in the assessor’s evaluation of what is fair and reasonable.

The content of the costs agreement may, however, be used for other purposes relevant to the assessment. It will thus be available for consideration by the assessor if, as here, it is asserted that there is a term positively excluding the charging of costs by the lawyer, so that there is no liability for costs by reference to which a costs order can effectively operate. Use of the costs agreement for that purpose goes to the question whether costs should be assessed at all, rather than the question of the amount that is fair and reasonable.”

28 Although it is true that, in some circumstances, there may be practical difficulties in the way of a costs assessor determining relevant facts, as identified by Dunford J in Muriniti, those difficulties, in an appropriate case, must yield to the express intention of the statute. In that context, away from the assessment of party/party costs, it might be observed that Parliament was not shy of expressly conferring very considerable fact finding powers upon costs assessors, as evidenced, for instance, by s. 208D. The provisions of s. 208 (2) simplify the costs assessors task and, of course, the rights of the parties are protected by the appeal provisions of s.208L and s.208M.

29 It follows that, in my opinion, the costs assessor was entitled in law to find, as he did, that the solicitor for Mr Rogers, and counsel, undertook the work on a “no win/no pay” basis pursuant to an oral costs agreement.

Is Mr Rogers entitled to benefit from the costs order?

30 Although the second question was formulated as going to the validity of retainer agreements, the real question as argued before me, is whether a legal practitioner is entitled to costs in a situation where there is no costs agreement, which complies with s. 184 (4) of the Act. The costs assessor found, as indicated above, that there was no disclosure to Mr Rogers as required by sections 175 and 177 and that there was no costs agreement, including a conditional costs agreement. As to the latter finding, however, it seems that what the costs assessor, perhaps, intended to say was that there was no written costs agreement as required by s.184 (4) because he found that the retainer by Mr Rogers of his solicitor and counsel was a conditional costs agreement within s.186. Such agreement would have been rendered void by the operation of s.184 (4). I am inclined to think that, likewise, an oral agreement that no costs would be payable to a solicitor or barrister, whatever the outcome of the litigation, would constitute, “an agreement as to the costs of the provision of legal services” and would also be rendered void by the operation of s.184 (4). An attempt by a legal practitioner to resile from an oral agreement rendered void by s.184 (4) could no doubt, in an appropriate case, be countered by the operation of the principles of estoppel.

31 Furthermore, as Barrett J pointed out (18), there can lawfully be a retainer agreement despite the absence of an agreement, which s.184 would categorise as a costs agreement. Nothing in s.184, or elsewhere in the Act, expressly requires a legal practitioner to enter into a costs agreement with his client. Although in this case, upon the findings of fact made by the costs assessor, any costs agreement was void by virtue of s.184 (4), this circumstance did not affect the validity of any agreement of retainer.

32 In Mr Officer’s submission, once a costs agreement is rendered void by the operation of s.184(4), the relevant legal practitioner has no entitlement to any costs and thus, his client, no liability against which he might seek indemnity.

33 Although, as earlier indicated, Barrett J provided an analysis of the Act in dealing with the applications under s 208M, in the absence of submissions by or on behalf of Ms Wentworth and Mr Russo, much of what His Honour said in reviewing the relevant authorities is uncontentious. He dealt with the consequences of a costs agreement being avoided by s. 184(4) in paragraphs 29 and following of his judgment:-

“It is important to emphasise that the only effect of s.184(4) is to obliterate an agreement, which is unwritten, and not evidenced in writing. Because the law regards it as non-existent, the agreement itself cannot be the source of rights and obligations. But nothing in the Act prohibits, expressly or by implication, the making of unwritten costs agreements. Nor does the Act prohibit, expressly or by implication, the recovery of remuneration in the absence of a written agreement – the most it does is to say that if the fee disclosure requirements have not been observed (a quite distinct matter), the right to recover remuneration is dependent upon costs first having been assessed under Division 6 of Part 11. No illegality flows from an unwritten costs agreement or from the provision of legal services in the context of such an unwritten agreement or without any costs agreement at all; it is just that remuneration cannot be claimed under an unwritten agreement because the agreement the parties attempted to make never eventuated, being void from the moment of its supposed inception. The situation is thus one in which services are lawfully provided and lawfully received but in the absence of any contract for payment.

In such a case, principles of restitution countering unjust enrichment allow recovery of reasonable remuneration. The relevant principles were authoritatively established by the judgments in Pavey & Matthews Pty Ltdv Paul (1987) 162 CLR 221. The right of recovery proceeds from the requirements of justice as distinct from any implied contract, there being, in the present context, no room left by s.184(4) for the existence of an implied contract or implied term for the payment of remuneration. The matter was put thus by Murray J (with whom Templeman J and Enfield AJ agreed) in ABB Power Generation Ltd v Chapple (2001) 25 WAR 158:
“[T]he basic concept provides a capacity for the law, by drawing on principles of the common law and equity to provide compensation to a plaintiff in a case where, at the plaintiff’s expense in a material sense, the defendant has been provided with and has accepted a benefit of a material kind which, in the circumstances of the case, it would be unjust to permit the defendant to receive without making reasonable recompense to the plaintiff for it. A variety of factual situations will give rise to the obligation but, in my opinion, a classic example of the application of these principles arises in circumstances where the benefit has been provided and taken outside the ambit of a contractual relationship but nonetheless in a commercial context where the plaintiff can be seen to be more than a mere volunteer.”
In separate observations, Templeman J said:

“[I]f the defendant, as a reasonable person, did not appreciate that the plaintiff would look to him for payment, it would probably be difficult to make out a case of unjust enrichment. That is why Byrne J in Brenner v First Artists’ Management Pty Ltd [1993] 2 VR 221 said that ‘the appropriate enquiry” was whether the recipient of the relevant services should have realised that he would be expected to pay for them.”
The aptness of general restitutionary principles to ground a claim for lawyers’ costs was recognised by the Queensland Court of Appeal (McMurdo P, Thomas JA and Mullins J) in Adamson v Williams [2001] QCA 38:

“In the present case the claim was ‘$9,437.82 for solicitor’s costs and outlays’. The full statement in the pleading was ‘The plaintiff claims $9,437.82 for solicitor’s costs and outlays incurred in this jurisdiction from June 1996 to July 1887. An account in taxable form was delivered to the defendant on 25 July 1997.’ That would permit a judgment under any cause of action that was established by the facts.

Although the natural inference in such a claim is that based on contract, there is nothing inconsistent in that pleading with the maintenance of a claim based on either contract or quasi-contract. Quasi-contractual claims, including those conveniently described as quantum meruit are now generally classified as restitutionary claims: Pavey & Matthews Pty Ltd v Paul [(1987) 162 CLR 221]; ANZ Banking Group Ltd v Westpac Banking Corporation [(1988) 164 CLR 662, 673]; David Securities Pty Ltd v Commonwealth Bank of Australia [(1992) 175 CLR 353]; Baltic Shipping Co v Dillon [(1993) 176 CLR 344]; Mason and Carter Restitution Law in Australia [At p 11]. Of course a claim cannot be made for restitution when an existing enforceable contract governs the claim in question: Update Constructions Pty Ltd v Rozelle Child Care Centre Ltd [(1990) 20 NSWLR 251, 275]. But a claim for quantum meruit may arise if a party, through breach or wrongful repudiation, prevents the other party from earning the stipulated remuneration: McIntosh Hamson Hoare Govett Ltd v Pinnacle Properties Ltd [Appeal No 166 of 1994, 5 May 1995, 7].”

The availability of quantum meruit as a means of recovery where the contract the parties sought to make is void has long been recognised. It is sufficient to refer to an observation of Starke J in Phillips v Ellison BrothersPty Ltd (1941) 65 CLR 221, supported by a reference to Craven-Ellis v Canons Ltd [1936] 2 KB 403:
“So also it has been held that a person who rendered services under an agreement which was in fact void was entitled to recover for the services rendered upon the basis of a quantum meruit .”

(See also Flett v Deniliquin Publishing Co Ltd [1964-5] NSWR 383.)

Where there is no operative contract (whether or not because of s.184(4)), lawyers’ remuneration may be recovered on ordinary principles of restitution, apart altogether from the provisions of the Legal Profession Act . The Act does, however, have the effect that, if there has been an assessment of costs under Subdivision 2 of Division 6, it will be that assessment which sets the quantum of recoverable remuneration; and that if the written disclosure requirements of Division 2 have not been observed, such assessment will be a pre-condition to any recovery. “

34 In Mr Officer’s submission what was said by Barrett J applies only to an unenforceable contract and has no application to one rendered void by statute. He submitted that it is significant that the present form of s.184 (4) replaced s.196 as from 1 July 1994. Previously, s.196 provided that a costs agreement, “was not enforceable against any person unless the agreement was in writing, signed by, or on behalf of the client”.

35 It was contended that the legislative intention, evidenced by s.184 (4), would be frustrated if one were to permit legal practitioners to recover reasonable remuneration, in circumstances where the agreement regarding costs was rendered void by statute.

36 Pavey & Matthews was a case concerning s. 45 of the Builders Licensing Act. The section relevantly provided that a contract under which a licensed builder undertook to carry out building work, within the meaning of the statue, was not enforceable against the other party to the contract, unless it “is in writing signed by each of the parties or his agent in that behalf and sufficiently describes the building work, the subject of the contract”.

37 Deane J at 167 discussed the principles involved in considering a privative provision such as s.45:

“Finally, it was submitted on behalf of Mrs. Paul that to allow recovery by the builder of what is fair and reasonable compensation for work done under a contract which is rendered unenforceable against her by s.45 of the Act would be contrary to the legislative intent to be discerned in the words of the section when read in the context of the Act. In support of that submission, reliance was placed on various decisions on the effect of provisions in money-lending legislation. I do not agree with this submission for reasons which I shall briefly state. I would note that, apart from considerations based on the particular history of the Queensland Act, those reasons correspond closely with those advanced by McPherson J. in the Full Court of the Supreme Court of Queensland in rejecting a corresponding submission which was made in Gino D'Alessandro Constructions Pty. Ltd.

The decisions on the money-lending legislation do not seem to me to be really in point. In the legislation involved in those cases, it was possible to argue, both by reference to the different words used and the quite different history of money-lending legislation, that it was the plain legislative intent that the money-lender should be precluded from recovering any compensation for the loan, which had been made and received by the borrower. The relevant provisions went well beyond a mere statement that the agreement was to be unenforceable by the lender and were plainly directed towards imposing unenforceability in the ordinary case at a stage after the consideration had been fully executed by the lender, that is to say, after the money had been lent without an adequate memorandum in writing of the terms of the loan. Thus, the sub-section of the Nigerian Moneylenders Ordinance (s.19(4)) which was before the Privy Council in Kasumu v. Baba-Egbe (1956) AC 539 expressly provided that a money-lender should not be entitled to enforce "any" claim "in respect of" any transaction in relation to which he had made default in complying with the requirement that he should enter certain particulars in a book. Section 9(1) of the Money Lenders Act 1912 (W.A.), which was before this Court in Mayfair Trading Co. Pty. Ltd. v. Dreyer (1958) 101 CLR 428, provided that no contract for the "repayment by a borrower of money lent to him ... or for the payment by him of interest on money so lent, and no security given by the borrower ... in respect of any such contract" should be enforceable in the absence of the prescribed note or memorandum. In Deposit & Investment Co. Ltd. v. Kaye (1962) 63 SR (NSW) 453, at p 460, Walsh J. expressly drew attention to the fact that the form of the relevant provision did not simply say that "the contract of loan is not to be enforceable" but provided that "the borrower's obligations and the security for the performance of them shall not be enforceable".

There is no apparent reason in justice why a builder who is precluded from enforcing an agreement should also be deprived of the ordinary common law right to bring proceedings on a common indebitatus count to recover fair and reasonable remuneration for work which he has actually done and which has been accepted by the building owner (cf. Johnsons Tyne Foundry Pty. Ltd. v. Maffra Corporation (1948) 77 CLR 544, at p 565). Nor, upon a consideration of the words of s.45 in their context in the Act, am I able to identify any legislative intent to deprive the builder of that ordinary common law right. The section does not make an agreement to which it applies illegal or void. Nor do its words disclose any legislative intent to penalize the builder beyond making the agreement itself unenforceable by him against the other party. It may be that the bringing of an action as on a common indebitatus count would conflict with the apparent legislative policy underlying s.45 if the claimant in such an action were entitled as of right to recover the amount which the building owner had agreed to pay under the unenforceable agreement. I am, however, unpersuaded that the bringing by a builder of an action on the common indebitatus count in which he can recover no more than what is fair and reasonable in the circumstances as compensation for the benefit of the work which he has actually done and which has been accepted by the building owner conflicts with any discernible legislative policy. Plainly enough, the survival of the ordinary common law right of the builder to recover, in an action founded on restitution or unjust enrichment, reasonable remuneration for work done and accepted under a contract which is unenforceable by him does not frustrate the purpose of the section to provide protection for a building owner. The building owner remains entitled to enforce the contract. He cannot, however, be forced either to comply with its terms or to permit the builder to carry it to completion. All that he can be required to do is to pay reasonable compensation for work done of which he has received the benefit and for which in justice he is obligated to make such a payment by way of restitution. In relation to such work, he can rely on the contract, if it has not been rescinded, as to the amount of remuneration and the terms of payment. If the agreed remuneration exceeds what is reasonable in the circumstances, he can rely on the unenforceability of the contract with the result that he is liable to pay no more than what is fair and reasonable.”

38 I do not discern in s.184 any legislative intent to preclude a legal practitioner from recovering any costs where there is no costs agreement, which conforms with subsection (4). There is certainly no express provision to that effect – compare, for instance, s.92 (2) of the Home Building Act.

39 Moreover, the Attorney General (Hon JP Hannaford) in his second reading speech upon the Legal Profession Reform Bill (Hansard 16 September 1993 at P. 3276 and following) which, inter alia, introduced s.184 (4) into the Act, suggests to me that it was not the government’s intention to provide a draconian sanction for failure to enter into a written costs agreement. He said:-

”The penalty for non-disclosure has changed from that set out in the exposure draft bill. As previously drafted, the bill provided that, if a practitioner unreasonably failed to disclose, two penalties may apply. First, failure to disclose is capable of being found to be professional misconduct or unsatisfactory professional conduct. Second, by virtue of there not being a cost arrangement providing the information required to be disclosed, the practitioner would be entitled only to recover benchmark costs. New sections 182(4) and 183 retain a disciplinary penalty for failure to disclose or provide an estimate. However, the benchmark scale attracted considerable criticism on a number of grounds.

First, the Trade Practices Commission indicated that there is a danger that a benchmark or default scale would become a basis from which practitioners set their fees. For example, if the benchmark fee represents on average a discount of 25 per cent, practitioners may start charging on the basis of 25 per cent above the benchmark fee. This would effectively retain all of the worst features of a regulated fee system and defeat the intention of the legislation to create a competitive market for legal services. Second, it was pointed out that it would be a difficult, if not an impossible task, to determine the cost recovery fee across the range of matters and the varied circumstances in which legal services may be provided. In addition, legal firms themselves will have varying costs structures which impact on the level of the cost recovery.

The bill has therefore been amended and new section 182 provides that in the absence of a proper disclosure there is no obligation on the client to pay the bill until it has been assessed and imposes a requirement that the practitioner is obliged to meet the full cost of assessment. Thus, in circumstances where the practitioner unreasonably failed to properly or fully disclose, the practitioner may not recover any fees without submitting the account for assessment, with the full cost of assessment being met by the practitioner. Division 3 concerns cost agreements and sets out the basis for a cost agreement. Costs agreements are not mandatory, other than for conditional cost agreements, but the existence of a cost agreement is a relevant factor in assessment.

It must be noted that as a result of new section 184(6) a disclosure in accordance with division 2 which is accepted by the client constitutes a valid cost agreement. New sections 186 to 189 provide for conditional cost agreements. Conditional fees provide for payment of the legal practitioner only when the client is successful. Conditional fees will not involve profit sharing, where the lawyer receives a fee proportionate to the result. In this regard the arrangements permitted under this proposal are clearly different to contingency fee arrangements which exist in the United States whereby the lawyer may receive a proportion of the amount of money awarded by the court. Conditional costs arrangements arise where a lawyer and client agree that the lawyer's fee will be paid only if the client is successful.

40 Deane J, in the passage quoted above, noted that the agreement rendered unenforceable against the property owner by s.45 of the Builders Licensing Act was not rendered illegal or void by the statute, leaving open the question of the consequences of illegality, or of having been rendered void. It may be that Pavey & Matthews would have resulted differently if the agreement in question had been illegal. However, in my view, that is not the case here, either expressly, or by implication. The agreement was void, however, and the question remains as to the consequences of that invalidity.

41 Mr Officer conceded that his researches had failed to find any authority as to the consequences of a contract rendered void by statute. Craven- Ellis v Canons Ltd (1936 2KB 403) was a case in which an employment contract was held to be void. The court of appeal (Greer LJ, Greene LJ and Talbot J) held that, nonetheless, the plaintiff could succeed on a quantum meruit. However, the contract was rendered void, not by statute, but because of failure to comply with the articles of the company in relation to directors qualifying shares.

42 Phillips v Ellison Bros Pty Ltd (1941) 65 CLR 221 was a case concerning a contract of service unenforceable because of non-compliance with the statute of frauds. In the course of his judgment Starke J referred, without disapproval, to Craven-Ellis v Canons Ltd, “So also it has been held that a person who rendered services under an agreement which was in fact void was entitled to recover for the services rendered upon the basis of a quantum meruit”. However, that remark was made in the context of an unenforceable contract, not one declared by statute to be void.

43 In the end, it becomes a matter of construction of the statute. In light of the terms of the minister’s second reading speech and the absence of an express provision, in my view, the substitution of s.184 (4) for s.196 was not a matter of significance, certainly not to the extent contended for by Mr Officer.

44 For similar reasons, in my opinion, it was not parliament’s intention to require legal practitioners, upon pain of deprivation of costs, to enter into a written costs agreement with their clients. If they choose to do so, the agreement will be given force and effect, subject to s 208D. If they choose to enter into no costs agreement, or an oral one rendered void by s.184 (4), then the rights of the parties will be governed by the general law. In addition if the legal practitioner has failed to comply with sections 182 and 183, the sanctions provided by those sections will apply. To hold otherwise would create the anomaly identified by Deane J in the passage of his judgment in Pavey & Matthews quoted above. There could be an enforceable retainer agreement under which the legal practitioner could be required to perform services, but he or she would have no entitlement to remuneration for such services.

45 I hold that in this case, the solicitors for Mr Rogers, as a matter of law, are not precluded from recovering costs from their client. Those costs, in accordance with Pavey & Matthews, would represent reasonable remuneration for work actually done and accepted. It follows that Mr Rogers is entitled to the benefit of the indemnity conferred upon him by the costs orders set forth in paragraph 3, above.

46 The appeals against the decisions of the costs assessor as to matters of law, accordingly, in my opinion, fail, and should be dismissed. I affirm the costs assessor’s decisions and I order that the Plaintiffs’ pay the Defendant’s costs of the appeals. The exhibits may be returned.

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