Adamson v Ede

TEXTS CITED : Expert Evidence Freckleton & Selby

PARTIES : Christopher Michael Adamson v Kenneth John Ede

COUNSEL : Mr C Adamson (In person) M.J. Horowitz (for Mr Ede)

SOLICITORS : Mr C Adamson (In person) Horowitz & Bilinsky (for Mr Ede)

LOWER COURT JUDICIAL OFFICER : Magistrate B A Lulham

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ADMINISTRATIVE LAW LIST

30007/2008: CHRISTOPHER MICHAEL ADAMSON v KENNETH JOHN EDE JUDGMENT

1 On 19 December 2007 magistrate B A Lulham delivered a judgment in favour of Mr Ede against Mr Adamson in the sum of $18,160 with interest to be calculated from 28 April 2005. The Magistrate also ordered Mr Adamson to pay Mr Ede's costs of the Local Court proceedings heard on 14 and 15 February 2007 and 1 November 2007. 2 By his Further Amended Summons (FAS) filed in Court on 11 April 2008 Mr Adamson appealed from the whole of the Magistrate's decision except as to liability to pay a reasonable sum for clerical services rendered by Mr Ede in respect of the Adamson v Liu proceedings. To the extent that a ground of appeal involves a question of mixed law and fact Mr Adamson sought leave to appeal on that ground. 3 Section 73(1) of the Local Courts Act 1982 permits a party to appeal on a point of law and s 74(1) provides that a party may appeal on a ground that involves a question of mixed law and fact but only by leave of the Supreme Court. 4 The FAS advances many grounds of appeal.

5 (a) In 2001 Mr Ede (a builder) and Mr Adamson were good friends. Mr Adamson orally agreed to act for Mr Ede in Family Law proceedings and the associated transfer of property without fee on the basis that Mr Ede do work for Mr Adamson without charge. Mr Adamson acted for Mr Ede in the Family Law proceedings and property transfer. Mr Ede assisted Mr Adamson by doing clerical work and attending at Court as an assistant in the case of Adamson v Liu. Mr Ede also prepared a builder's inspection report for use in a building dispute in which Mr Adamson was acting for William Walters against Cosmopolitan Constructions Pty Ltd.

(b) In 2004 Mr Adamson issued a bill for the legal work he had done and proceeded to have the bill assessed in the sum of $7684.42. Mr Ede than commenced the Local Court proceedings seeking to recover $5478 for his work in the Liu matter and $19,701 for his work in the Walters matter and interest.

(c) Mr Ede in his Amended Statement of Liquidated Claim pleaded the initial offset arrangement, Mr Adamson requesting Mr Ede's assistance in the Liu matter and Mr Adamson in consideration of that assistance agreeing to waive the equivalent amount in his fees for the legal work he performed for Mr Ede. Further particulars were given. The claim was for moneys due and payable for work done.

(d) Mr Ede further pleaded that Mr Adamson requested his assistance in preparing a builder's report to be used in the Walters litigation. Particulars were given of the work done and time spent. Mr Ede alleged that in consideration of that assistance Mr Adamson agreed to waive the equivalent amount in his fees for the legal work performed for Mr Ede.

(e) The magistrate summarised Mr Adamson's defence. Mr Adamson denied paragraphs 1 to 7 of the Statement of Claim which pleaded the agreement and the claim in the Liu matter. He denied paragraphs 9 to 13 in relation to the Walters matter claim but admitted paragraph 8 which pleaded that Mr Adamson requested Mr Ede's assistance in preparing a builder's report to be used in the Walters litigation and included particulars of the claim of $19,701. Again, the claim was for moneys due and payable for work done.

(f) The magistrate stated: "The matter was bitterly fought on the question of quantum and I propose to decide the matter on the basis that it was conducted and not on what was clearly an error in relation to the pleadings."

(g) The magistrate stated that in relation to the Walters matter, Mr Adamson pleaded that Mr Ede had agreed to do the work without fee as a favour to the defendant and Bill Walters and that Mr Ede was therefore estopped from charging any fee. Mr Adamson also pleaded res judicata and that the amount claimed was unreasonable. 6 The Amended Statement of Liquidated Claim did not plead in express terms a claim in quantum meruit although some of the facts pleaded fell within what Deane J envisaged in Pavey and Matthews v Paul 162 CLR 221 at 262. Mr Adamson recognised that he was facing such a claim on the first day of the hearing (14 February 2007 at T68 as he said at lines 27-32: "He is not claiming any agreement whatsoever that I pay these monies to him [as to the Walters matter]. He is claiming that he did work on a quantum meruit basis in relation to an inspection report for a court case. There is no possibility of a quantum meruit claim against me for that. I accept that if I'd engaged him and said 'I will pay you'."

There were also references to quantum meruit at T69 and T6 on 14 February 2007. 7 On 1 November 2007 at T44 Mr Adamson pointed out that there was no pleading or allegation by Mr Ede that there was an agreement that he (Adamson) pay Mr Ede $100 or $120 an hour for his services in the Liu matter. Mr Adamson insisted that from the very start he had defended that claim by Mr Ede for $120 per hour on the basis that his charges were unreasonable and that he was not justly entitled to that. 8 At T50 on 1 November 2007 Mr Adamson contended that the quantum meruit claim could not be sustained as to Mr Ede's building report. 9 At T55-56 on 1 November 2007 counsel for Mr Ede propounded a claim based on quantum meruit and took the magistrate to the decision of Pavey and Matthews v Paul, esp per Deane J at 256. 10 The magistrate recorded that Mr Adamson cross-examined Mr Ede for almost two full days, that he did not cross-examine Mr Ede as to the "tit for tat" agreement or the conversation which Mr Ede alleged occurred as to the request to assist Mr Adamson in the Liu matter or the conversation regarding preparation of the building report in the Walters matter. Mr Adamson did not give evidence. 11 The magistrate accepted Mr Ede's evidence and continued: "I accept that there was the 'tit for tat' agreement. I accept that in 2004 contrary to the agreement Mr Adamson rendered an account for the legal work which he had done for Mr Ede and that subsequently Mr Ede issued accounts for the work that he did in relation to the Liu matter and the Walters matter." 12 The evidence in support of Mr Ede's claim in the Walters' matter is:

"I need your assistance as an expert witness as you are a builder in the case I am conducting for William Walters against Cosmopolitan Constructions. Bill Walters has a case in which he is owed $10,000 for work done for Cosmopolitan. They refuse to pay and have a cross claim for $32,000 against him plus costs. I need you to inspect and report on the work at the Huntington Estate at Pennant Hills Road Oatlands. You might as well do this for me as you owe me." 13 The magistrate attached much importance to the last sentence.

Solicitor (Adamson) not liable to Ede for expert witness fees in Walters matter in which Adamson acted for Walters. 14 Mr Adamson submitted that a solicitor is not liable for the fees of an expert witness when he has engaged that witness on behalf of a client unless there are special circumstances and that there were no such special circumstances in this case. 15 Mr Adamson relied on the decision of Robbins v Bridge (1837) M & W 114. Lord Abinger CB was called upon to decide the general question "whether an attorney, who has caused a witness to be subpoenaed, without any express contract and without any circumstances from which a special contract can be inferred, is liable to be sued by the witness for his expenses at the trial." He held: (at 119): "there is no implied contract by the attorney to pay the witness. The attorney is known merely as the agent - the attorney of the principal, and is directed by the principal himself. The agent, acting for and on the part of the principal, does not bind himself, unless he offers to do so by express words; he does not make himself liable for any thing, unless it is for those charges which he is himself bound to pay, and for which he makes a charge. … It is known the marshal does not receive his fees from the party, but on the contrary from the attorney, who is daily practising there, and who is bound to pay, and not his client. But in the case of a witness, it is different; he has no course of dealing with the attorney, he knows it is for the party that he is to give evidence; his obligation is to the party, and if he fails to attend, it is to the party's loss." 16 The magistrate referred specifically to the excepting words in the general question posed by Lord Abinger "without any express contract and without any circumstances from which a special contract can be inferred." 17 In Lee v Everest (1857) 157 ER 118 an expert witness sued the attorney for the witness' charges as to surveys and plans he made to qualify himself to give evidence at the trial, and also for the expense of his attendance. Bramwell B delivering the judgment of the Court said (at 121): "It is undoubtedly more convenient that the engagement of the witness should be supposed to be with the party rather than with the attorney. The attorney may die, or be changed before the witness has finished the entire duty of qualifying himself to give evidence, and giving it. Then suppose he gives unfair evidence, dishonestly suppressing something for the benefit of the party, or does not properly qualify himself by the previous survey which he has undertaken, and thereby the party sustains a loss; who is to sue him for breach of duty, the party or the attorney, for the engagement must be taken to be with him if he has to pay for its performance? We are of opinion, therefore, that prima facie the party, and not the attorney is liable for such a claim as the present."

The words "prima facie" are used. 18 In Expert Evidence Ch 20 Remuneration of Experts, by Freckleton & Selby at [20-26] it is pointed out that it is to mid-19th century cases and texts that recourse must be had to discover the principles as to the liability of an attorney or solicitor for expert witness' expenses. The authors also refer to United States authority where there appear to be divergent views. At [20.80] the authors state: "The better view of the cases in the United States … is that the law is consistent with that in England but there have been more occasions for the Courts to determine whether the attorney has been acting on an ambiguous basis for an undisclosed principal." 19 Mr Ede submitted that the magistrate made a finding of fact that Mr Adamson said to Mr Ede in respect of the latter's engagement as an expert witness "You might as well do this for me as you owe me." Mr Ede further submitted that in the light of this finding of fact, the Magistrate was entitled to conclude that Mr Adamson personally engaged Mr Ede as an expert witness and assumed personal liability to pay Mr Ede for his services if the "tit for tat" agreement was not honoured. 20 This was not a case where Mr Adamson was acting for an undisclosed principal. Mr Adamson stressed those statements of principle which said that the solicitor was not liable for the expert's fees unless the solicitor assumed liability by express words or in clear and unmistakable language. He contended that the words found by the Magistrate did not amount to Mr Adamson assuming personal liability. I think it was open to the Magistrate to make the finding of fact which he did and to reach the conclusion which he did in the circumstances which existed in the present case.

The Local Court erred in finding agreement to set off legal costs in relation to the building report by Ede for Walters matter proceedings as only evidence contrary to such a finding and was that work done to knowledge of Mr Ede not for Adamson but for client Walters

Alternatively if there was evidence of an agreement to set off legal work done by Adamson with expert witness work done by Ede such agreement was of no effect being a costs agreement not in writing or evidenced in writing as required by the Legal Profession Act. 21 Appeal Grounds 2 and 3 were taken together. Mr Adamson submitted that the agreement alleged by Mr Ede was a costs agreement, which was required to be in writing. Further, as there was no evidence in writing of any agreement, the finding that there was an agreement based on oral evidence was not capable of being made at law and the alleged agreement was of no effect and could therefore not be rescinded or frustrated. He submitted that the agreement could not otherwise found a quantum meruit claim. 22 Mr Ede agreed that there was no effective agreement between the parties to set off Mr Adamson's legal costs against the work done by Mr Ede as an expert witness. Mr Ede submitted that his case included being advanced and defended as a quantum meruit claim and that relief was finally not sought based on any agreement between the parties: T14/2/07 - 68, 26-29 and 1/11/07 - 50. 53-57 and 55. 52-56.18 As was pointed out in Pavey & Matthews the basis of the action in quantum meruit is restitution or unjust enrichment. A benefit has been accepted, albeit constructively. See especially the remarks of Mason and Wilson JJ at 227 and Deane J at 256. As to Mr Adamson's personal liability Mr Ede relied on the words that the magistrate found that Mr Adamson had used.

The Local Court erred in law in not finding that under any such set off agreement (as existed) the most that Ede was entitled to was the amount of legal fees Adamson was owed for acting in Ede's matrimonial property settlement. 23 Mr Ede again submitted that his case was advanced and defended as a quantum meruit claim. Questions of set-off did not arise.

Appeal Ground 5 - If there was any such agreement the Local Court erred in law in finding that the set off agreement was repudiated as no such claim of frustration or repudiation was pleaded or such claim was contrary to the pleading or there was no evidence or insufficient evidence to support such findings. 24 Mr Ede maintained his earlier submission that his case was advanced and defended as a quantum meruit claim. 25 At T46 on 1/11/07 Mr Adamson at lines 25-28 described the tit for tat agreement Mr Ede was alleging as a costs agreement and asserted that neither could enforce it. At lines 54-55 Mr Adamson asserted that there was no costs agreement because any costs agreement Mr Ede alleged was void. At T47 Mr Adamson described the agreement alleged as "obliterated". 26 At T56 lines 1-3 counsel for Mr Ede accepted that there was not an enforceable costs agreement. Counsel for Mr Ede put the matter this way at T56, lines 12-18: "They [Adamson and Ede] had an arrangement for one reason or another it's either not enforceable or it's been walked away from, abandoned. They are now each entitled to a fair and reasonable assessment of the work they did for each other. And that's the essence of the quantum meruit claim. And that's what their Honours are saying in that paragraph." (He was referring to Mason and Wilson JJ at the bottom of p 227 of Pavey & Matthews) 27 I doubt whether the magistrate accurately summarises counsel's concluding submissions when he recorded him as submitting that Mr Ede was entitled to bring the action as a claim for reasonable remuneration under an oral agreement and that the original agreement was frustrated or avoided when Mr Adamson elected in 2004 to issue a bill of costs for his legal work and to seek to recover those costs, but this is of no moment. Counsel made it plain in his concluding submissions that Mr Ede was claiming as on a quantum meruit and there was sufficient evidence to support such a claim. This ground of appeal should be rejected. It does not advance Mr Adamson's defence.

In the alternative, if the finding of the Local Court that the contract was frustrated is upheld, the court erred in law in applying the principles of quantum meruit in assessing damages and ought to have applied section 10 of the Frustrated Contracts Act (NSW )and limited damages to the amount of the costs due to Mr Adamson in providing legal services to Mr Ede in his matrimonial property settlement 28 Mr Adamson submitted that if there was frustration, the effect of s 10 of the Frustrated Contracts Act (NSW) was that the amount which could be set off or claimed would be the legal fees which Mr Ede admitted and alleged was owed to Mr Adamson for solicitor/client legal fees under the agreement. 29 Mr Ede submitted, correctly, that the Local Court did not find that the contract was frustrated and that the parties agreed at the hearing that the contract was unenforceable or void. I have earlier expressed my view as to the accuracy of the Magistrate's summary of the argument of counsel for Mr Ede as to frustration.

30 At para 32 of his reasons the Magistrate held that Mr Ede was "entitled to succeed based on a quantum meruit claim pursuant to the established principles."

In the alternative, if the finding of the Local Court that the alleged contract was repudiated is upheld, that Court erred in law in applying the principles of quantum meruit in assessing damages as there was no evidence that Mr Adamson had accepted the repudiation of the agreement and the only evidence was that he had not rescinded. 31 Mr Adamson submitted there was no evidence of rescission and that conversely, Mr Ede pleaded his action on the alleged set off agreement. 32 Mr Ede submitted, correctly, that the Local Court did not find that the contract was repudiated and/or rescinded and that the parties agreed at the hearing that the contract was unenforceable or void. As mentioned, the Magistrate held that Mr Ede was "entitled to succeed based on a quantum meruit claim".

Ground 7A Res judicata 33 This does not appear in the Further Amended Summons filed 11 April 2008. It does appear in Mr Adamson's submissions and it was raised in the Court below. 34 Mr Adamson submitted that the claims brought by Mr Ede in the Local Court proceedings were such as could and should have been brought before the costs assessor in the course of the costs assessment. Mr Adamson relied on the decision of Patten AJ in Wentworth v Rogers [2005] NSWSC 143 Mr Adamson further submitted: "(1) The issue as to whether the alleged agreement is an enforceable agreement as to the provision of costs which aught (sic) to be in writing, an assessor is a peculiarly suitable person to make such a determination as it is a common issue in assessments. That issue therefore could easily and should have been put before the assessor. (2) If the alleged agreement is otherwise enforceable as an agreement to set off costs against [Mr Ede's] work, or there were grounds for a claim of quantum meruit, such a determination would have merely been a matter of law: there being no dispute that work was done by [Mr Ede], the contest being really one of how much work was done and the reasonable value of that work and whether [Mr Ede] could reasonable (sic) charge (approx $10,000) [Mr Adamson] for travelling back and forth from the Gold Coast to Sydney when he had his only residence in Sydney and his children resided in Sydney and had other building work in Sydney. A Costs Assessor in the Supreme Court commonly deals with and is suitable (sic) qualified to assess the reasonable value of the services claimed in the Local Court proceedings below. In the proceedings below [Mr Ede] claimed for a building inspection report and witness fees for the purposes of local court proceedings for William John Walters v Cosmopolitan Constructions and for legal clerk's services for the plaintiff in respect of a hearing of a Supreme. (sic) Whilst [Mr Adamson] submits that [Mr Ede] should have made all of his claims and was estopped from taking further proceedings, at the very least some of these issues should have been claimed before him." (The "him" probably refers to the costs assessor)" 35 Mr Ede submitted that as the parties agreed at the hearing that the agreement was unenforceable and/or void there was no agreement that he could have relied upon before a costs assessor. 36 Patten AJ held that if legal practitioners chose to enter into a written costs agreement that would be given force and effect subject to s 208(D) which 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 consideration in considering the question. If the legal practitioners 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. It was desirable to avoid the anomaly of 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. 37 Patten AJ reviewed a number of earlier decisions at [20] and following and referred to the issues which a costs assessor has to consider. The specific issue resolved at [29] was that the costs assessor was entitled in law to find that the solicitor for Mr Rogers, and counsel, undertook the work on a "no win/no pay" basis pursuant to an oral costs agreement. 38 Mr Ede has not finally sued Mr Adamson pursuant to an agreement but on the basis of reasonable remuneration for work done by Mr Ede for Mr Adamson and accepted by Mr Adamson. Mr Ede's claim was based on restitutionary principles. In his reasons at [21] the magistrate pointed out that Mr Ede did "not allege that Mr Adamson was negligent in carrying out the legal work on his behalf. He relies on a completely separate claim for work done on behalf of Mr Adamson not related at all to the work which Mr Adamson did for Mr Ede in the Family Law proceedings. There is absolutely no way that the present claim could have been brought before the assessor".

39 I agree that the assessor had no jurisdiction to hear Mr Ede's claims whether by set-off or otherwise. I would reject Mr Adamson's defence based on res judicata and the principles in Port of Melbourne Authority v Anshun Pty Ltd (1980-1981) 147 CLR 189 as to any of Mr Ede's claims. Appeal Ground 8 In the event that there is found an agreement for set-off as alleged by [Mr Ede] or at all, the [Local Court] erred in not holding that [Mr Ede] was estopped from raising such set-off on the basis that such claim could and should have been brought in the prior costs assessment proceedings between [Mr Adamson] and [Mr Ede] wherein [Mr Adamson's] legal costs of acting for [Mr Ede] in his matrimonial family law property settlement proceedings were assessed and in allowing judgment to be entered in the Supreme Court pursuant to the certificate of determination of assessment of costs.

40 This appears to correspond with Ground 6 in the Summons and the Amended Summons. 41 While I acknowledge the difference between re judicata and estoppel what I have written under Ground 7A is also of relevance to this ground. The issues which the costs assessor was called upon to decide and which could have been raised before him differed from those before the Local Court. There was no overlapping.

The [Local Court] erred in law and/or in admitting into evidence and relying upon expert evidence tendered by the defendant as to quantum from persons not properly qualified to give expert evidence in respect of the market cost of an external building inspection report in Sydney in 2002, reasonable witness expenses for attending court and a reasonable rate to pay a basic law clerk in Sydney in 2002. 42 This seems to represent an amalgam of Grounds 7 and 8 in the Summons and Amended Summons but further amended. 43 I will consider this appeal ground along with Appeal Grounds 10, 11, 11 (secondly numbered) which read:

10. The Court erred in law in applying the wrong test for quantum meruit and aught (sic) to have made an assessment of a just and reasonable market value of obtaining such a report in the Sydney area in 2002, aught (sic) to have [applied] the court scale of witness expenses for attendance at court and the award for clerks in the legal industry.

11. The court erred in law by rejecting and not accepting the defendant's evidence from a suitably qualified cost surveying expert as to the reasonable market of a building report and the only of (sic) evidence of the appropriate award setting the reasonable rate for a law clerk in NSW in 2002. 11. The court erred in law making findings in respect the value of a quantum meruit claim not based upon any proper admissible objective evidence of what was a reasonable market value of the services in all the relevant circumstances. 44 There are two issues being raised, namely, Mr Ede's claim for inspections, attendances and preparing a building report in the Walters matter and Mr Ede's claim for rendering clerical assistance in Adamson v Liu. Mr Adamson submitted that the magistrate erred in admitting and subsequently accepting the evidence of Mr K Collins as to the reasonableness of the charges of Mr Ede for the work he had done in relation to the building dispute in the Walters matter. Mr Collins considered whether the time allegedly spent was reasonable and whether the charges were reasonable. Mr Adamson contended that Mr Collins was not suitably qualified to express these opinions. It appeared that Mr Collins had spent 50 years in the building industry, starting as an apprentice carpenter, working as a building contractor and subsequently as a construction manager. He was involved in a wide variety of work. Since about 1972 he had been much involved in the construction of pools and subsequently in writing articles, making reports and acting as an expert witness in matters involving swimming pools and related matters. Since November 1997 he had provided building consulting and inspection services to legal firms in the Manning River District and for several major insurance companies. He has been appointed to the Consumer Trader and Tenancy Tribunal as a Residential Building Assessor. Mr Collins has made many inspections and written many reports over many years. 45 The magistrate was entitled to accept Mr K Collins as a well qualified expert and to overrule Mr Adamson's objections to Mr Collins' qualifications. Mr Adamson did not request Mr Collins to attend for cross-examination. The magistrate records that Mr Collins was present at Court and that Mr Adamson did not seek to cross-examine him on his report which the magistrate found to be well reasoned. The report was accepted. 46 Mr Adamson's criticisms do not sufficiently allow for the depth and breadth of the experience of Mr Collins who has been asked to undertake work in various parts of the State. A quantity surveyor was not the only person qualified to express an opinion on the issues. Mr Adamson complained that his expert was a quantity surveyor and aware of the market value of the report which was given. The magistrate gave detailed reasons why he did not find the evidence of the quantity surveyor to be of assistance - he did not take into account (and may not have known) the facts which the magistrate found existed and which would have borne on the amount to be awarded. It was for the magistrate to find the facts and in this regard, he accepted Mr Ede's evidence. 47 The Court's own scale of witness charges was not, on the facts found by the magistrate, a matter to which regard should have been had. 48 As to the matter of Adamson v Liu the magistrate accepted that Mr Adamson contacted Mr Ede and said: "I need assistance with the paper work and setting out the files in the Adeline Liu case. If I get someone else in to do it, it is going to cost me around $120.00 per hour. 49 The magistrate accepted the evidence of Mr Ede that he worked during the day and night of 28 August 2002 and that he in effect acted as an instructing officer in Court for Mr Adamson. This was corroborated by the solicitor for Ms Liu. The magistrate rejected Mr Adamson's propositions in cross-examination that Mr Ede was of very little assistance and did very little work in court. 50 The magistrate attached importance to the extended hours which Mr Ede was required to work and the intensity of the work undertaken and that it was done under considerable pressure. 51 Mr Adamson submitted that the Court was not entitled to accept the evidence of the costs assessor retained by Mr Ede's solicitors as to the clerical and legal assistant range of rates of charge on most assessments in Supreme Court matters to be reasonable, namely: 1. Paralegal from $100 to $150 per hour 2. Clerical form $100 to $120 per hour. This material was but a guide. 52 Mr Adamson submitted that Mr Ede should be remunerated substantially in accordance with the Clerical And Administrative Employees Legal Industry (State) Award. These rates would apply to permanent employees and not casual consultants or assistants who would be entited to greater remuneration. The Award would produce a much lesser sum. I do not know what penalty and overtime rates would apply. There was no evidence as to these. 53 The magistrate considered the circumstances were exceptional. It is hard to imagine any court or tribunal applying the award rates for the casual engagement in question. These are questions of fact 54 The magistrate allowed:

Amount due re assistance in the Liu matter $ 4,752.00 Amount due re preparation of building report

• "the Walters matter". $13,408.00 $18,160.00

The findings and decisions of the Local Court were procedurally unfair, as they were against and contrary to the weight of evidence and principles of natural justice. 55 There was evidence to support the many findings of fact of the magistrate. He reviewed the evidence and the course of proceedings. He was alert to the basis on which the case was conducted. None of the grounds of appeal should be upheld. 56 I raised with counsel for Mr Ede whether Mr Adamson could be said to have accepted the benefit of the work done by Mr Ede in the Walters matter. Mr Adamson had contended that he obtained no benefit from the work done by Mr Ede in respect of the building report. Counsel for Mr Ede submitted "where Mr Ede performed work at Mr Adamson's request, pursuant to a contract between the parties (as was found by the magistrate at judgment paras 26-29), Mr Adamson cannot deny that such work constituted a benefit to him: 'In other words, where a contract is executed, and the defendant's request is fully satisfied, there may be a constructive acceptance of the benefit of the work, on the basis that the defendant cannot deny that the work was beneficial. The acceptance concept does not, at least in this context, require unconscionable conduct at the time of receipt.' Mason and Carter Restitution Law in Australia (1995) at pp 342-343. 'The benefit whose receipt falls into one of the categories of case which the law characterizes as unjust enrichment may be actual. Alternatively, it may be constructive as, for example, where it involves full or partial performance of something requested to be done.' Foran v Wight (1989) 168 CLR 385 at 438 per Deane J. 'Where a person pays money to another it is not difficult to see that a benefit has thereby accrued to the recipient. Services present greater difficulty. If the law of restitution is available to oblige the recipient of the benefit of services to make restitution, it must acknowledge that such benefit may take many forms. … In my opinion, 'benefit' in this context must be seen from the perspective of the recipient who is, after all, the person to be charged. It may be that for some idiosyncratic reason a defendant seeks performance of work which another would see as without benefit or, indeed, as a positive dis-benefit. … But where a person requests another to do something, it is not unreasonable for the law to conclude that the former sees some benefit in its performance, however wrong this view may be on an objective basis and for the law to act upon the perception of the recipient.' Brenner v First Artists' Management Pty Ltd [1993] 2 VR 221 at 257-258 per Byrne J cited with approval in Leading Edge Events Australia Pty Ltd v Kiri Te Kanawa [2007] NSWSC 228 at [245]-[246] per Bergin J. 57 Counsel pointed out that at T50.53-51.25 of 1/11/07 the magistrate in argument did not accept Mr Adamson's submission that the work performed by Mr Ede in respect of the building report was of no benefit to Mr Adamson. I doubt whether I would agree with all the magistrate's observations. They were not repeated in his reasons., 58 I must follow the observations of Deane J in Foran v Wight that the benefit "may be constructive as, for example, where it involves full or partial performance of something requested to be done."

G.S.T. 59 The amount of $13,408 mentioned earlier includes GST of $1128 and that of $4752 includes GST of $432. 60 Mr Adamson submitted that in the Local Court Mr Ede's claim was pleaded and run on the basis of a claim under a tit for tat agreement for the provision of services. He relied on the passages:

(i) 14/2/07 T45.1-14; T46.1-2; T61.47-48; plaintiff xxn (ii) 15/2/07 T6.50-51 - counsel's submissions; T14.31-32 plaintiff xxn; T51.10 - plaintiff rxn.

This does not assist Mr Adamson when it was or became common ground that the "tit for tat" arrangement was unenforceable or void and the only basis for recovery was quantum meruit pursuant to a common money count.

61 Mr Adamson submitted that not all payments for services are subject to GST. Mr Adamson advanced the following argument:

(a) Mr Ede was a builder, had no education or training as a clerk, had never worked in any office except his own and the work was of a basic type, e.g., sorting and stacking books and files at Mr Adamson's direction - 14/2/07, T26.24-57, plaintiff xxn

(b) GST is imposed on taxable supplies: s.9-5 of Statute styled "A New Tax System (Goods and Services Tax) 1999 (Cth)"

(c) A supply is not a taxable supply unless it is made "for consideration" and "in the course or furtherance of an enterprise that you carry on …"

(d) The definition of enterprise at 9-20 except for some presently irrelevant circumstances does not include employees

(e) Mr Ede was an employee and therefore any award made in his favour would not be subject to GST. 62 In my opinion Mr Ede could not be categorised or described as an employee of Mr Adamson. There was a supply of services for consideration. Reasonable remuneration was payable for those services and the magistrate determined what was reasonable remuneration. The supply was made in the course or furtherance of an enterprise carried on by Mr Adamson. In my opinion, there was a taxable supply. 63 In my opinion GST was payable in respect of the consideration for the services rendered. 64 While Mr Adamson was given leave to make written submissions as to whether GST was payable for the preparation of the building report, his submissions cover wider and more fundamental issues. Mr Adamson submitted that there was no basis for the submission that the hearing in the Local Court was conducted on the basis of a void contract and actual or constructive acceptance or (sic) (of) benefit. He submitted that there was no reference to these issues other than the reference to a void contract in the final submission in the Local Court. Mr Adamson contended that insofar as quantum meruit was raised in the Local Court it appears as he intended it to be a reference to quantum meruit on the traditional and narrow basis as a way of calculating reasonable and fair remuneration under a "tit for tat" contract which did not specify the amount of that remuneration. 65 Mr Adamson further submitted:

(a) In view of Mr Ede's admission now that the "tit for tat" agreement was void and a new claim based upon a void contract is proposed, he (Adamson) can but guess in very general terms what the nature of the issues may be.

(b) It appears the proposed new claim is a purely restitutionary one based upon a void contract and possible issues of actual or constructive acceptance and/or constructive benefit and other possible defences including that the actual or constructive benefit was capped at the assessed value of the plaintiff's legal fees as assessed in the sum of $7786.42 66 I make the following comments:

(a) The decision in Pavey & Matthews Pty Ltd v Paul was delivered in March 1987 and that in Foran v Wight in 1989. This case was heard in 2007.

(b) While the Amended Statement of Liquidated Claim pleaded the offset arrangement the claim in paragraph 8 was "for money due and payable by the Defendant [Mr Adamson] for work done. That is a common money count. As earlier mentioned, in Pavey & Matthews v Paul at 262 Deane J observed, "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." (citation omitted) Those remarks apply by analogy to the present case.

(c) The matters stated in paragraphs 9, 10, 11 and 12 of the Amended Liquidated Statement of Claim were surplusage and capable of distracting attention from the central issue.

(d) On 14/2/07, T68, 26-29 Mr Adamson referred to Mr Ede claiming that he did work on a quantum meruit basis as to an inspection report for a court case and not on an agreement. Mr Adamson disputed his liability on a quantum meruit basis. Mr Adamson conceded at T6.55 - T7.2 of 14/2/07 that certain evidence may be relevant if there was a claim for quantum meruit. At T46.27-28 and 54-47.11 Mr Adamson asserted that any costs agreement Mr Ede alleged was unenforceable, void, obliterated.

(e) At T50.53-51.13 Mr Adamson addressed submissions on the issue of quantum meruit as to the building report.

(f) Counsel for Mr Ede in his closing submissions attached importance to Pavey & Matthews v Paul and explained that Mr Ede's case was based upon the statement of principle of Deane J at 262, to which I have earlier referred. See T.1/11/07 - 55.52-56.18. Counsel for Mr Ede addressed on the facts in some detail.

(g) Mr Adamson did not complain in his reply about the basis on which counsel had put Mr Ede's case. He asserted that the amended Statement of Claim was badly drafted. I do not disagree but I am concerned with errors of law and questions of mixed law and fact. Mr Adamson said at T71.49-51 that the essential issue of fair and reasonable costs were put in issue by his amended defence.

(h) During oral argument Mr Adamson referred me to this statement of principle as to the function of pleadings of Mason CJ and Gaudron J in Banque Commercial S.A, En Liquidation v Akhill Holdings Limited (1989-1990) 169 CLR at 286-287 (citations omitted) "The function of pleadings is to state with sufficient clarity the case that must be met: Gould and Birbeck and Bacon v Mount Oxide Mines Ltd. (In Liq. ) per Isaacs and Rich JJ. In this way pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party's right to this basic requirement of procedural fairness. Accordingly, the circumstances in which a case may be decided on a basis different from that disclosed by the pleadings are limited to those in which the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities. See, e.g., Browne v Dunn; Mount Oxide Mines. Ordinarily the question whether the parties have chosen some issue different from that disclosed in the pleadings as the basis for the determination of their respective rights and liabilities is to be answered by inference from the way in which the trial was conducted. It may be that, in a clear case, mere acquiescence by one party in a course adopted by the other will be sufficient to ground such an inference."

(i) In this matter the magistrate specifically stated, and with sufficient reason, that the matter was bitterly fought on the question of quantum and that he proposed to decide the matter on the basis that it was conducted and not on what was clearly an error in relation to the proceedings. 67 I return to the topic of GST on the preparation of the building report. 68 In my opinion there was a taxable supply and the magistrate was correct to include a GST component in the amount he awarded for the preparation of the building report in the Walters matter. 69 I am not persuaded that the magistrate made any error of law nor that any question of mixed law and fact warrants leave to appeal.`

1. So far as leave to appeal is required, leave is refused.
2. Appeal dismissed.

3. Mr Adamson is to pay the costs of Mr Ede of the application for leave to appeal and the appeal, both of which were heard together on the one set of documents so that there will be one set of costs.

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