Solicitor/client - Termination of retainer - Allegations of breach of contract, breach of fiduciary duty and breach of duty of care - Collateral attack - Credibility findings - Turns on own facts

District Court Rules 2005

Defendant : Mr P D Quinlan SC & with him Ms C E Moss

Ahmed v Russell Kennedy (a firm) [2000] VSC 41

BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266

Cachia v Isaacs (1985) 3 NSWLR 366

Codelfa Constructions Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337

Computer Accounting and Tax Pty Ltd v Professional Services of Australia Pty Ltd [2008] WASC 133

Computer Accounting and Tax Pty Ltd v Professional Services of Australia Pty Ltd [2010] HCATrans 139

Computer Accounting and Tax Pty Ltd v Professional Services of Australia Pty Ltd [No 3] [2010] WASC 2

Donnellan v Public Trustee [2007] WASC 213

Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7

Forbes v Computer Accounting and Tax Pty Ltd [2009] WASC 89

Frigger v Clavey Legal Pty Ltd [No 2] [2014] WADC 44

Frigger v Professional Services of Australia Pty Ltd [No 3] [2014] WASCA 69

Giannarelli v Wraith (1988) 165 CLR 543

Mainteck Services Pty Ltd v Stein Heurtey SA [2014] NSWCA 184

Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638

Professional Services of Australia Pty Ltd (Administrator Appointed) v Computer Accounting and Tax Pty Ltd [No 3] [2010] WASC 93

Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [2010] WASC 38

Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2009] WASCA 183

Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2010] WASC 113

Quigley (A Practitioner) v The Legal Practitioners Complaints Committee [2003] WASCA 228

1 The plaintiffs are husband and wife. At all material times the plaintiffs were directors and shareholders of Computer Accounting and Tax Pty Ltd (in liquidation) (CAT).

2 The defendant is an incorporated legal practice. Mr Terry Clavey is a legal practitioner and the sole director and secretary of the defendant.

3 On 8 January 2010 applications were made to the Supreme Court by Professional Services of Australia Pty Ltd (PSA) and the estate of Martin Banning (Banning) to wind up CAT on the grounds of insolvency and on just and equitable grounds (winding up application), to appoint a provisional liquidator to CAT in the interim (provisional liquidation application), and freeze assets controlled by the plaintiffs with the aim of preserving the portion of a judgment sum in their favour (which I shall explain in more detail shortly) (freezing orders application). The freezing orders application was granted on 10 December 2009: Computer Accounting and Tax Pty Ltd v Professional Services of Australia Pty Ltd [No 3] [2010] WASC 2.

4 On 21 January 2010 a provisional liquidator was appointed to CAT pursuant to the provisional liquidation application: Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [2010] WASC 38.

5 On 23 February 2010 the plaintiffs retained the defendant to act for them in their capacities as directors of CAT (the retainer). Although there is an issue as to exactly what were the terms by which the defendant agreed to act for the plaintiffs, it is sufficient for present purposes to note that the terms of the retainer were contained in the defendant's written costs agreement dated and entered into on 23 February 2010. By the terms of the retainer the defendant was engaged to defend the winding up application. The terms of the retainer also provided that the defendant was engaged to advise on the prospects of securing a stay of a judgment of the Court of Appeal in CACV 76 of 2008 delivered on 23 October 2009 imposing an obligation on CAT to pay to Professional Services of Australia Pty Ltd (PSA) and the estate of Mr Martin Banning (Banning) an amount in excess of $800,000 and/or a variation of orders made in the provisional liquidation application: Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2009] WASCA 183.

6 On 12 March 2010 the retainer was extended for Mr Clavey to consider the merits upon which a deed of company arrangement (DOCA) could be challenged.

7 On or about 25 March 2010 the retainer was further extended to include instructions for the defendant to act for the plaintiffs in relation to an application made by PSA and Banning in the Supreme Court in CIV 2265 of 2006 to freeze assets controlled by the plaintiffs, conditional upon a hearing scheduled for 1 April 2010 being adjourned.

8 On 30 March 2010 the defendant terminated the retainer.

9 On 6 May 2010 CAT was wound up on the ground that the statutory presumption of insolvency which had arisen by reason of CAT's failure to comply with two statutory demands served in December 2009 (one of which had been issued by PSA for an amount in excess of $800,000 owing to PSA by reason of the Court of Appeal judgment), had not been displaced by CAT: Professional Services of Australia Pty Ltd (Administrator Appointed) v Computer Accounting and Tax Pty Ltd [No 3] [2010] WASC 93 [20]. In arriving at this conclusion the court found that the evidence put before it in support of the winding up application established that CAT was not able to meet its debts as and when they fell due, and that there was no evidence which would justify a conclusion that CAT could meet its debts as and when they fell due: Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 3] [17], [20].

10 In their re-amended substituted statement of claim dated 13 December 2013 (the statement of claim) the plaintiffs allege that the defendant, in the course of acting for them, breached the terms of the retainer, was negligent and breached the fiduciary duties that it owed to them. The plaintiffs further allege that the defendant's breaches of the retainer, negligence and breaches of fiduciary duties caused them to suffer loss and damage. Central to the plaintiffs' claim for loss and damage is the allegation that if the defendant had not breached the terms of the retainer, by not terminating the retainer and had not breached its common law and fiduciary duties, CAT would have obtained a stay of the Court of Appeal's judgment in CACV 76 of 2008 and consequently it would not have been wound up on the ground of insolvency when it was not insolvent: statement of claim, pars 4(b), 9C, 9E 10(d), 10(f), 11, 15; plaintiffs' opening submissions dated 10 March 2014, pars 44 - 49, 50 - 55. The plaintiffs allege that it was the winding up of CAT which caused them to suffer certain specified losses.

11 Essentially, the plaintiffs' causes of action are pleaded in pars 9 to 11 of their statement of claim. The plaintiffs allege the defendant's purported termination of the contract between the parties on 30 March 2010 was unlawful and in breach of the contract in consequence of which the plaintiffs have suffered loss and damages.

12 The plaintiffs further rely on causes of action in negligence and for breach of fiduciary duty, arising both in relation to the circumstances in which they allege the defendant was not entitled to terminate the contract between them, and also based upon the manner in which they allege the defendant represented and advised them.

13 All of the plaintiffs' allegations are denied by the defendant. Further, the defendant pleads in specific response to the plaintiffs' allegation as to the cause of their loss and damage that any loss and damage allegedly suffered by the plaintiffs from the winding up of CAT arose by reason of CAT's insolvency: amended substituted defence dated 13 February 2014 (the defence), pars 12.7(c) and 17.1.

14 It is also the defendant's case that the plaintiffs, having been a party to, and opposed, the winding up order, and the plaintiffs not having pursued an appeal from the winding up order, cannot now in this case challenge the winding up order because that would constitute a collateral attack on the Supreme Court decision in Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 3] that CAT ought be wound up. Such a collateral attack, it is submitted, amounts to an abuse of process and is not permitted: Donnellan v Public Trustee [2007] WASC 213 [42].

15 Further, even if the plaintiffs could relitigate the decision to wind up CAT they would have to prove that some different result would have ensued and given the findings of Master Sanderson in Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 3] [17]:

Thirdly, and perhaps most importantly, the investigations by Mr Kitay indicate the defendant is insolvent. No elaborate examination of Mr Kitay's evidence is necessary. The defendant is indebted to the plaintiffs in an amount of over $800,000. It does not have the capacity to make that payment. It is therefore not able to meet its debts as and when they fall due and it is prima facie insolvent.

the plaintiffs are unable to prove CAT would, or should, not have been wound up on the grounds of insolvency. There is no new evidence, it is submitted by the defendant, to suggest any different result would have ensued in relation to the winding up of CAT. Therefore, the defendant submits, the winding up of CAT has no causal connection with the conduct of the defendant which occurred prior to CAT being wound up on 6 May 2010 following a hearing on 28 April 2010 four weeks after the termination of the retainer on 30 May 2010.

16 Counsel for the plaintiffs framed the central question for determination as being whether the agreement between the parties was terminated properly in all of the circumstances which must be tested objectively. Paragraph 11 of the statement of claim pleads the defendant unilaterally terminated the cost agreement on 30 March 2010 without just cause, without giving the plaintiffs sufficient time in which to find alternative legal representation and without consideration as to whether the termination would unduly disadvantage the plaintiffs. In his closing submissions counsel for the plaintiffs submitted there was no proper basis for the defendant to terminate the retainer and it should have continued acting for the plaintiffs. The necessary relationship of trust between the defendant and the first plaintiff had not, it was submitted, been broken so that the defendant was entitled to cease to act for the plaintiffs and remove itself from the court record as the plaintiffs' solicitor in accordance with cl 9.5 of the written costs agreement.

Plaintiffs' application to file re-amended statement of claim

17 The plaintiffs' re-amended substituted statement of claim dated 13 December 2013 was not signed by counsel or by a solicitor. It was signed by both the plaintiffs personally. It is a difficult pleading to follow and properly understand and to be able to clearly identify the cause or causes of action alleged against the defendant.

18 This action was earlier listed for trial before another judge, Judge Derrick, commencing on 28 March 2014. When counsel who then appeared on behalf of the plaintiffs advised he had only been belated instructed and sought time to revise and amend the statement of claim to more properly reflect what counsel viewed were the real issues in dispute, both in relation to liability and damages, Judge Derrick adjourned the trial for a short time to allow counsel more time to become familiar with the issues and to draft an amended statement of claim. However when the matter next came before Judge Derrick, counsel was no longer acting for the plaintiffs and Mrs Frigger appeared in person. The trial was subsequently adjourned.

19 When the trial before me commenced on 15 September 2014, counsel who then appeared on behalf of the plaintiffs (who was not the same counsel who appeared in March 2014) applied to file a re-amended substituted statement of claim in accordance with a minute dated 1 September 2014. That minute had not been signed by either counsel or the solicitor on record. It was again signed by the plaintiffs personally. Counsel was not prepared to either certify as to the correctness of the proposed re-amended substituted statement of claim in accordance with r 43(3)(a) of the District Court Rules 2005, nor was he prepared to sign the minute as counsel. In those circumstances I refused the application to file a re-amended substituted statement of claim in accordance with the minute dated 1 September 2014.

20 During his opening address, counsel for the plaintiffs abandoned any allegation of fraud against the defendant, and I ordered par 13 of the re-amended substituted statement of claim dated 13 December 2013 be deleted.

21 On 9 July 2008, following a Supreme Court trial before Simmonds J against Professional Services of Australia Pty Ltd (PSA) and Martin Banning (Banning), CAT was awarded judgment and granted damages in the amount of $1,106,027.33 plus interest and costs (judgment sum): Computer Accounting and Tax Pty Ltd v Professional Services of Australia Pty Ltd [2008] WASC 133. Computer Accounting and Tax had sought damages for negligent misstatement, deceit and misleading or deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) and s 10 of the Fair Trading Act 1987 (WA) arising out of the sale and purchase of a BP Service Station in Armadale.

22 On 25 July 2008 PSA and Banning filed a notice of appeal (CACV 76 of 2008) against the judgment of the trial judge Simmonds J. By application dated 25 August 2008 PSA and Banning applied for an order for suspension or a stay of the judgment pending the hearing and determination of the appeal. On 28 August 2008 Pullin JA ordered that the judgment of the trial judge be suspended until 19 September 2008. On 19 September 2008 the stay was extended until 24 September 2008.

23 Banning died on 8 September 2008. Thereafter proceedings were continued on behalf of his estate.

24 On 24 September 2008 Buss JA dismissed the application for a stay after he found he was satisfied, on the basis of Mrs Frigger's affidavit sworn 23 September 2008 that the value of CAT's net assets was about $2,850,043 and that CAT had no liabilities except for quarterly GST liability, there was no risk CAT would be unable to repay the judgment sum in the event of the appeal being allowed: Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [2008] WASCA 222 [24], [27].

25 In March 2009, PSA entered into a deed of company arrangement, which was subsequently varied (the DOCA).

26 PSA and (the then) estate of Martin Banning paid the judgment sum to CAT in June 2009.

27 Professional Services of Australia and Banning appealed the Supreme Court decision and the judgment was reduced on appeal by $675,078 (plus interest) (Court of Appeal orders): Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] (judgment delivered 23 October 2009). Professional Services of Australia Pty Ltd and Banning then sought repayment of the portion of the judgment sum which exceeded the damages awarded under the Court of Appeal orders.

28 On 19 November 2009 CAT filed an application for special leave to appeal from the Court of Appeal orders to the High Court of Australia. The application for special leave was heard on 25 May 2010 and was dismissed: Computer Accounting and Tax Pty Ltd v Professional Services of Australia Pty Ltd [2010] HCATrans 139.

29 The plaintiffs placed CAT into a members' voluntary winding up on 12 December 2009.

30 Professional Services of Australia and Banning issued two statutory demands to CAT in December 2009. One demand, claiming a debt of $18,247.59 to Stewart Forbes was paid by the first named plaintiff, Mrs Frigger on 25 January 2010. The other, being a claim for $800,907.08, the amount by which the portion of the judgment sum exceeded the sum of the damages awarded under the Court of Appeal orders, was not.

31 As I have already noted on 8 January 2010, PSA and Banning filed applications to wind up CAT in insolvency or on just or equitable grounds (winding up application), to appoint a provisional liquidator to CAT in the interim (provisional liquidation application) and to freeze assets controlled by the plaintiffs with the aim of preserving the portion of the judgment sum which exceed the sum of the damages awarded under the Court of Appeal orders (freezing orders application).

32 The freezing orders application was granted on 10 December 2009: Computer Accounting and Tax Pty Ltd v Professional Services of Australia Pty Ltd [No 3] [2010] WASC 2.

33 On 21 January 2010, a provisional liquidator, Mr Kitay, was appointed to CAT pursuant to the provisional liquidation application. On 8 February 2010 the plaintiffs made an application to terminate the appointment of Mr Kitay as provisional liquidator. On 15 February 2010 this application was heard and dismissed by Simmonds J: Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2010] WASC 113.

34 On 18 February 2010 the application to wind up CAT came on for hearing before the acting master. Counsel appeared on behalf of the plaintiffs and sought leave to appear by the plaintiffs on behalf of CAT, which leave was refused.

35 In late March 2010, the freezing orders application was listed for a further hearing on 1 April 2010 in relation to the extension of the freezing orders.

36 Therefore by the time the defendant was retained by the plaintiffs on 23 February 2010 the plaintiffs were involved, at least, in the following court actions:

1. the freezing orders application in CIV 2265 of 2006 in which the plaintiffs were acting in person;
2. the winding up application in COR 2 of 2002 in which the plaintiffs, as directors of CAT, were acting in person;
3. an application for special leave to appeal to the High Court (Perth No P47 of 2007) against the judgment of the Court of Appeal: Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2009] WASCA 183 and in which CAT was represented by Lavan Legal; and
4. an application to set aside a deed of company arrangement (DOCA) in which Chris Stokes & Associates were acting for the plaintiffs or for CAT in CIV 2001 of 2009.

37 After the original judgment sum was paid to CAT by PSA and Banning in June 2009, $1,165,000 was immediately paid by the plaintiffs to themselves or their superannuation fund.

38 The orders ultimately made by the Court of Appeal on 7 November 2009 included orders that CAT pay to PSA and Banning the sum of $716,188.45 plus interest in the sum of $16,835.33 plus further interest from 23 October 2009 at $117.73 per day to the date of payment. There was a further order CAT pay to PSA and Banning the sum of $59,634.27 plus interest in the sum of $1,372.41 together with further interest in the sum of $9.80 per day from 23 October 2009 to the date of payment. Therefore, by the Court of Appeal orders CAT was required to make payment to PSA and Banning in the sum of $775,822.72 plus interest. The sums ordered to be repaid by the Court of Appeal were never, and have never been, repaid.

39 The Court of Appeal's orders also set aside the costs orders made by the trial judge on 6 May 2009 and ordered that the costs of the trial be remitted to the trial judge for reconsideration in light of the reasons of the Court of Appeal (exhibit 2.7). Therefore the consequence of the Court of Appeal's orders is that no costs orders for the trial have been made and the sums to be repaid (approximately $850,000 with interest) were to be repaid forthwith.

40 The main witness called by the plaintiffs was Mrs Frigger. Therefore to a significant extent if the plaintiffs' action is to succeed, Mrs Frigger's evidence, especially where her evidence is in conflict with the evidence called by or relied upon by the defendant, must be accepted. Her credibility is a crucial issue I must determine. It is important I first deal with and make findings in relation to Mrs Frigger's credibility before I make any findings regarding the background to the matter before the defendant was retained and as to the nature of and terms of the retainer between the parties and the circumstances surrounding their relationship, in particular the circumstances in which the retainer was terminated and the relationship between the parties ended.

41 I have earlier referred to the freezing orders application which was granted on 10 December 2009. The application was brought by PSA on 3 December 2009 following the Court of Appeal orders requiring CAT to pay approximately $850,000. The application was heard by Simmonds J on 10 December 2009 following which he made freezing and ancillary orders: Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 3].

42 The freezing orders, in their final form, were in the following terms:

1. [The Friggers] must not take any steps to enforce the payment to them of any amount claimed to be owing to them by [CAT] pursuant to a deed of charge dated 10 September 2009 or otherwise;
2. [the Friggers] must not take any steps to replace [CAT] as trustee of any trust in which [CAT] is presently the trustee; and
3. [the Friggers] must not take any steps to deal with or diminish the value of any of the following assets:-

(a) the properties known as 140 Edward Street and 46 Pier Street in Perth, and, 296 South Western Highway, Armadale ... or, if any have been sold, the net proceeds of the sale;

(b) any money in the trust account of any solicitor acting for [CAT] but in particular Chris Stokes & Associates; but

(c) nothing in order 10(b) hereof shall be taken to prevent the use of the money therein referred to pay the reasonable legal expenses of [CAT].

43 The background to and the circumstances in which the freezing orders were made and what occurred after the hearing on 10 December 2009 are set out in Frigger v Professional Services of Australia Pty Ltd [No 3] [2014] WASCA 69 (delivered 8 April 2014).

44 Mrs Frigger gave evidence that on 12 December 2009 the plaintiffs applied to put CAT into members' voluntary liquidation because of the freezing orders application in which she said her and her husband were accused of stealing the two properties from CAT. Glenn Trinick was appointed the liquidator.

45 A statutory demand by PSA and Banning against CAT was served on her personally and she wrote to the solicitor who had served the statutory demand, Mr Lenhoff, sending it back to him because, she said, she was not allowed to accept service of the document because CAT was in voluntary liquidation. She sent the letter to Mr Lenhoff by registered post and then went on vacation to Germany on 18 December 2009.

46 She returned from her vacation on 16 January 2010. On 8 January 2010 there was an application for CAT to be wound up which she first heard about on 16 January 2010 from Mr Trinick after she had returned from vacation.

47 On 21 January 2010 a provisional liquidator for CAT was appointed. The provisional liquidator appointed was Mervyn Kitay.

48 Following the appointment of the provisional liquidator, various offers were made by the plaintiffs to try and resolve the problem the plaintiffs had about refunding the monies owed as a result of the Court of Appeal judgment. Mrs Frigger believed there would be a difference between the amount owed by CAT as a result of the reduction in the judgment sum and the legal and enforcement costs owing to CAT in relation to the trial and the original judgment of Simmonds J.

49 Mrs Frigger swore an affidavit dated 21 January 2010 (exhibit 2.10) in support of an application for removal of the provisional liquidator in COR 2 of 2010 in which she referred to and annexed a letter dated 21 January 2010 sent to Mr Lenhoff, the solicitor for PSA and Banning, making an offer (purportedly by the liquidator) on behalf of herself and Mr Frigger as members of CAT in response to the two statutory demands served on CAT. In that letter she estimated that the trial costs for CAT would be taxed at $380,000, and that those costs would be reduced by $20,000 because of the reduction in the damages by reason of the successful appeal. There were further costs associated with two property seizure and sale orders including a receiver having been appointed to sell one of the shares in Banning Holdings. There was interest on the taxed costs calculated for two years at 6%. There were also costs in relation to the appeal. She estimated CAT would owe $30,000 to the successful appellants and they would owe $8,000 to CAT for interlocutory applications.

50 On 25 January 2010 (in her evidence-in-chief Mrs Frigger said she instructed Kott Gunning on 22 January 2010 but in her affidavit sworn 8 February 2010 she says Kott Gunning were appointed on 25 January 2010 which, given the contemporaneity of the affidavit it is likely to be the more accurate) the plaintiffs appointed solicitors, Kott Gunning in relation to the application for winding up of CAT. On 3 February 2010 Kott Gunning sent a written offer of settlement to solicitors representing the liquidator, Mr Kitay which offer was rejected.

51 Mrs Frigger sought advice from Kott Gunning generally in relation to the appointment of the provisional liquidator and whether the liquidation could be either stayed or terminated, mainly on the ground that CAT was not insolvent and that it should come out of provisional liquidation so that the plaintiffs could continue with the members' voluntary liquidation.

52 The offer made by Kott Gunning, as Mrs Frigger explained, was on the basis that her and her husband would lend CAT $850,000 which would be secured in an account and which would not be available until after the application for special leave to the High Court had been determined and that all the legal enforcement costs of CAT had been taxed and assessed so they could then determine what amount should be set off against the amount owing by reason of the Court of Appeal judgment.

53 While she instructed Kott Gunning, she met with a barrister, Gary Cobby, in relation to what action could be taken to stay the provisional liquidation but, she said, he did not provide any advice.

54 After the plaintiffs terminated Kott Gunning's instructions, Mrs Frigger prepared an application and supporting documentation to apply to have the provisional liquidation either stayed or terminated on the grounds the plaintiffs would put up $850,000 in whatever security the court decided. She said Mr Frigger gave a written undertaking into the court that he would make the funds available. The affidavit prepared by Mrs Frigger and sworn by each of the plaintiffs on 8 February 2010 is exhibit 2.14.

55 The application was heard on 15 February 2010 before Simmonds J who dismissed the application: Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [No 2] [2010] WASC 113.

56 In cross-examination Mrs Frigger was initially taken to her affidavit sworn on 3 March 2010 in COR 2 of 2010 in opposition to the winding up application. That affidavit was drafted by Mr Clavey and is annexure AF-2 to Mrs Frigger's affidavit sworn on 18 March 2010 in support of the application to suspend the Court of Appeal judgment in CACV 76 of 2008 (exhibit 1.90) also drafted by Mr Clavey.

57 Prior to instructing Mr Clavey in relation to the winding up application, the plaintiffs were acting on their own behalf. Mrs Frigger agreed that because of the amount CAT was required to pay following the Court of Appeal judgment in excess of $800,000 and another debt payable to Mr Forbes, that action was taken to wind up CAT. She agreed that the debt of $800,000 was ultimately the focus for the work being done by Mr Clavey.

58 When asked whether she remembered swearing an affidavit in relation to the proceedings prior to Mr Clavey being appointed, she said she did not remember. She was then taken to the affidavit her and her husband swore on 8 February 2010 in COR 2 of 2010 in support of an application for termination of the provisional liquidation and for the winding up application to be dismissed (exhibit 2.14). When asked whether she remembered swearing the affidavit she said she did not remember they had included the winding up application to be dismissed. She said that all she asked for was for the provisional liquidation to be terminated.

59 When asked whether the affidavit she swore on 8 February 2010 was correct, curiously she said as of that point in time it was.

60 She agreed that as the accountant of CAT and also as a director and shareholder, she prepared the 'Report As To Affairs' (RATA) of CAT which included the statement of assets and liabilities, as at 21 January 2010 annexed to the affidavit. The report was prepared for the liquidator. She filled in the blanks in her handwriting in the form sent to her by the liquidator including compiling a statement of assets and liabilities of CAT.

61 She listed as an asset cash on hand (which was put to her as cash at bank, with which she agreed, but the entry of $80,000 instead relates to item 'cash on hand') in the sum of $80,000 which was being held as a guarantee for BP. She agreed the sum was not available funds because it had to be held as a guarantee for the purpose of the service station business.

62 She agreed she listed the other assets valued at $976,146.

63 When it was put to her that at the date of preparing the report, none of the assets which were listed were available to pay the debts of CAT that were owing, she asked what were the debts which were owing and payable and said she did not believe the $800,000 which was owing after the Court of Appeal decision was due and payable to PSA. She said she did not agree the sum of $800,000 was due and payable on that date, and added, which was not responsive to the question put to her, that was why she went to Mr Clavey. When she was then taken to the amount she had included in the list of liabilities as creditors, the sum of $800,917, she agreed it was a debt but said it was not then due and payable.

64 She explained that the Court of Appeal orders said something but the effect of them was incorrect as far as the DOCA was concerned which is why she went to Mr Clavey to try and work it out to get the court to decide if the plaintiffs needed to pay PSA or Banning and whether they would need to pay after their costs had been taxed.

65 She agreed there was a statutory demand for payment of the debt but said it was invalid as far as she was concerned. She said she was not willing to pay it.

66 When she was again asked whether any of the assets she had listed were available to pay the statutory demand she avoided answering the question and said the assets were not necessary because her husband and her offered to put up $850,000 in cash. She then said that if she had all of the litigation completed, if she was able to sell the accounting practice and if she was able to liquidate the Becton Office Fund, some of those funds would have been available to pay the money when it was due and payable.

67 Again when it was put to her that none of the assets listed were liquid assets from which the debts could be paid, she maintained that some of the assets could have been liquidated and used to pay debts due and owing.

68 Mrs Frigger agreed that the goodwill of the accounting practice estimated at $350,000 was her estimate. She agreed that amount was not then available to pay any debts that might be owing by CAT.

69 She agreed the item of $12,000 listed as costs in CACV 76 of 2008 had not been taxed and was not available to pay any debts that were owing by CAT.

70 In relation to Magistrates Court CIV 7493 of 2009 of $40,000 she agreed that was her estimate of the value of litigation she had against another party and that there was not a judgment to that effect and the amount was not available to pay CAT's liabilities.

71 She agreed the same applied to the Magistrates Court CIV 11299 of 2009 item of $75,000.

72 She agreed the sum of $380,000 plus $60,000 interest in CIV 2265 of 2006 was her estimate of what taxed costs would be which had not been taxed and that sum of money was not available to pay any debts which might have been owing by CAT.

73 She disagreed that at the time she prepared the statement and included the sum of $52,146 for units in the Becton Office Fund, the managers of the fund had closed the fund for redemptions and suspended distributions such that owners of the unit could not redeem their shares. She said those units were available for redemption to her.

74 She agreed the $1,165,000 that CAT had received by June 2009 was not included in the assets because that sum had been paid out of CAT to the plaintiffs or their super fund which she said was pursuant to an agreement she had with the company dated 1 September 2003 by which any judgment sum would be paid back to the plaintiffs. The sum of $1,165,000 was paid out immediately it was received.

75 She agreed at the time she prepared the statement, CAT was the registered proprietor of two properties, 140 Edward Street, Perth and 269 South Western Highway, Armadale. However, those properties were not included in the statement of assets and liabilities of CAT. She said they were assets of the Frigger Superannuation Fund and she was in control of them as the trustee of the super fund. She was holding them as assets of the super fund. She said that the properties were not beneficially owned by CAT but were beneficially owned by the Frigger Superannuation Fund. Therefore the properties were not available to the creditors of CAT.

76 She agreed the liquidator of CAT Mr Kitay argues that the properties are in fact assets of CAT but the plaintiffs continue to maintain the properties are beneficially owned by the Frigger Superannuation Fund.

77 In cross-examination Mrs Frigger was also taken to an affidavit she swore on 22 June 2010 (exhibit 7.2, pages 1533 and following) in CIV 2265 of 2006, the freezing orders application. In that affidavit she swore the Edward Street property was transferred to the Frigger Superannuation Fund on 1 July 2007 and the Armadale property on 1 July 2008.

78 At par 13 of her affidavit Mrs Frigger swore that '... on 1 July 2007 ownership of the Edward Street property was transferred to FSF'. When asked whether that was true she said that on 1 July 2007 a transfer of land document was executed for transferring the Edward Street property from the company to the Frigger Superannuation Fund but the transfer did not happen until 6 May 2009. When she was again asked whether par 13 was true she said at the time she swore the affidavit it was true.

79 She was then taken to par 19 regarding the Armadale property which in her affidavit she said was transferred to the FSF on 1 July 2008. When asked whether as from 1 July 2008 was it her position that both the properties were owned by the Frigger Superannuation Fund she said she would have to qualify that because those were the dates that the transfer of land forms were completed but as an accountant the actual transfer took place when settlement occurred on 6 May 2009. She then said as at 1 July 2008 she did not regard the properties as assets of the Frigger Superannuation Fund. When taken back to par 19 she gave a long and confusing explanation that there was a difference between doing a transfer of land and actually transferring an asset in the books of entities so there was a difference. Although there were transfer documents prepared on those dates, they were not stamped until there was the actual transfer when the value of the asset from the books of CAT to the books of the Frigger Superannuation Trust happened on 6 May 2009.

80 When it was put to her that once those properties had been transferred on those dates, 1 July 2007 and 1 July 2008, they were not available to pay the debts of CAT from that time on, Mrs Frigger responded as follows (ts 753 - 754):

So that once those properties had been transferred on those dates, 1 July 2007 and 1 July 2008, respectively, they were not available to pay the debts of CAT from that time on, correct?---Well, they transferred - the land transfer forms were those dates which you've just said. The actual transfer in the books between the company and the Frigger Super Fund happened later.

All right?---But you're right, they were not available and I never, ever pleaded or submitted or swore that they were available to pay the disputed amount under the DOCA.

When you say they weren't available to pay - - -?---They were never - well, they were never - well, they were never available to paid(?) if the - those amounts ever had to be paid. So when the - when the Court of Appeal reduced the judgment sum, then there was a statutory demand made, et cetera, they were not available to pay the - that - that - those amounts, if - if, in fact, those amounts had to be paid.

And that was your view as at 1 July 2008?---No.

Well, you said that it was transferred on the 1st - they were both transferred by 1 July 2008 and - - -?---No, I just said that they were transferred later on between the books of the company and the books of the Frigger Super Fund. Later. You know, I'm the accountant. I do all of those transactions. I know when they were transferred. I was referring to transfer documents dated - in - in this affidavit I'm referring to transfer documents.

No. The affidavit doesn't refer to transfer documents - - -?---Well, the - - -

- - - does it?---It - - -

It says - - -?---Mm.

- - - that on - for example, paragraph 13 - on July 2007, ownership of the Edward Street property was transferred to Frigger Super Fund?---Yep. There is a difference - and - and this is as - as from an accounting point of view, there is a difference when a land transfer document is executed and when the - like a settlement is done later on, the - the amount is transferred from one set of books to another.

Well, in the - - -?---So the bottom line is that from the 1st of July 2007, the transfer was done but the - the - sorry - the transfer document was executed but the actual transfer took place much later.

And from the - - -?---And I - I - to be honest, I can't remember the exact date but it was - - -

And from the 1st - - -?--- - - - 2009, I - I believe.

From 1 July 2007, you did not regard the Edward Street property as available to meet the debts of that?---No, that's wrong.

And - - -?---That's completely wrong.

81 Mrs Frigger was also taken to the company tax returns and accounting records of CAT prepared by Mrs Frigger as the company accountant (exhibit 6.1, pages 473 - 489). As at June 2007 the balance sheet included the Edward Street and Armadale properties as assets of CAT. She accepted she did not include either property as an asset of CAT when she prepared a balance sheet for June 2008 and that as at June 2008 neither of those properties were included as assets of CAT. Mrs Frigger accepted that therefore neither of the properties were available to meet the claims of creditors in relation to the liabilities of CAT as at June 2008 (ts 757).

82 It was then put to her that she swore an earlier affidavit which presented a different picture as to the ownership of the properties than that as set out in her affidavit of 22 June 2010 and that she knew the Court of Appeal had found that the sworn statements of Mrs Frigger were directly contrary to other sworn evidence she had given. She responded that the Court of Appeal was wrong (ts 633).

83 Mrs Frigger agreed that at the time of PSA's and Banning's appeal from the judgment of Simmonds J, they brought an application to stay the orders at trial which application was opposed by CAT. She was asked whether she understood that PSA and Banning were seeking a stay until after the appeal had been determined by the Court of Appeal and somewhat reluctantly she accepted that was what was being sought by the stay. She was then asked whether she was aware that one of the issues raised by the appellants in the stay application was that if they paid the judgment monies and their appeal was successful they might not be able to recover their monies. Mrs Frigger was not prepared to accept that was the case and said that while they obviously did not want to pay the money, which is why they applied for the stay, she could not remember what the reasons were.

84 I reject Mrs Frigger's explanation that she could not remember the reasons for the stay application. Her resort to a failure of memory, which she frequently did when faced with awkward questions, was disingenuous. I do not believe or accept Mrs Frigger's explanation when she said she could not remember the reasons why the appellants were seeking a stay in relation to the judgment of Simmonds J.

85 On 23 September 2008 Mrs Frigger swore an affidavit in CACV 76 of 2008 in opposition to an application for a stay of the trial judge's orders in the original trial (exhibit 9.12, contained in exhibit 6.2): the affidavit was sworn in response to an affidavit of Mr Banning filed in support of the application for a stay. That affidavit was sworn less than three months after the date of the June 2008 balance sheet in which she stated CAT owned both properties with a value of $1,100,000 for Edward Street and $615,030 for the Armadale property. In her affidavit Mrs Frigger swore that the respondent's (CAT's) net assets were $2,850,043, including:

(a) the Edward Street property valued at $1,100,000;

(c) a term deposit with ING Direct Bank to CAT's then current financial position for $999,999 earning interest at 7.7% in the respondent's (CAT's) name.

Given the appellant's own admission the respondent's financial affairs are 'buoyant', there is no reason to stay the judgment on the ground that the respondent would not be in a financial position to repay the sum should the appeal be successful.

87 At par 22 she also swore that 'the Respondent company has no liabilities save quarterly GST liabilities'. As I have noted, the affidavit was sworn less than three months after 1 July 2008 which was the date Mrs Frigger in her affidavit of 22 June 2010 swore the ownership of the Armadale property was transferred to FSF.

88 The context in which the statements were made was, in my view, clearly to suggest there were sufficient assets such that 'there is no reason to stay the judgment on the ground that [CAT] would not be in a financial position to repay the sum should the appeal be successful'. She agreed the reason she swore the affidavit was to put before the Court of Appeal that there was $2.85 million worth of assets in CAT and there was no risk that the money would not be paid back if the stay was refused.

89 When it was put to her that what she said in her affidavit was inconsistent with what she had represented in the June 2008 balance sheet she gave the following explanation (ts 758 - 759).

The dates are different. The assets are different?---No. The dates of those balance sheets. Those balance sheets were not made until June - in fact July 2010, when I was ordered by Simmonds J to produce financial statements for the company, and that's the first time I had done those financial statements. They were not in existence when I did this affidavit, okay? And the transfers were not effective. Even though the transfer documents had been executed they were not effective as at the time I swore the affidavit of 23 September 2008.

So is what you're saying that, having sworn in September 2008 that those two properties were available to meet the claims of creditors - - -?---And they were, yes.

- - - you made book entries to retrospectively take them out of the assets as at June 2008?---Absolutely, because that's allowed under taxation law and superannuation law. They are allowed and that's why I did it.

And can I suggest to you that that is a classic example of you just making up - - -?---No.

- - - the financial position as you go along?---No. No

Just - - -?---Not at all.

Just - - -?---Not at all.

Just as you did including $850,000 of cash on term deposit in the balance sheet when you supplied it to the High Court?---Actually, actually I'm going to come to that. You want to ask me that question again?

No?---I didn't make that up at all because according to accounting standards as soon as an asset has been made available to an entity, that entity is allowed to recognise the asset, even if the benefit of the asset is a future cashflow. There you go.

90 It was an unsatisfactory, and in my view, a dishonest, explanation. Indeed, her evidence in re-examination in relation to the issue served to emphasise the dishonesty involved in her original affidavit of 23 September 2008. Mrs Frigger stated that 'I had intended for it to be a contribution to my super fund but that intention had not been carried out at - as at that time' but that she still fully intended for that to occur. She then gave evidence that they began putting the intention into effect in October 2008 (ie within a month of the 23 September 2008 affidavit identifying them as unencumbered assets of CAT) (ts 887 - 889).

91 Accordingly, even on Mrs Frigger's own evidence, she swore that assets would be available to repay the judgment sum should the appeal be successful when at that time she 'fully intended' to take them out of CAT.

92 When asked why the affidavit did not state that the Edward Street property was owned by FSF as at 1 July 2007 she repeated her earlier evidence that it was not owned by the superannuation fund because she had not transferred it at that time and did not transfer it until 6 May 2009. She said she did not as at 1 July 2008 regard the properties to be assets of the Frigger Superannuation Fund.

93 She agreed as at February 2010 neither of the properties were referred to her as assets of CAT because they had been by then transferred. She also agreed that sum of $999,999 was referred to as an asset of CAT.

94 Mrs Frigger's explanation for the inconsistencies, as to whether the Edward Street and Armadale properties were assets of CAT or the Frigger Superannuation Fund, seeking to draw a distinction between the date of the transfers and when they were registered, was entirely unconvincing. Her explanation in cross-examination (set out above and also at ts 753 - 754) that although she had prepared documentation to transfer the ownership of the Edward Street and Armadale properties from CAT to the Frigger Superannuation Fund the transfers were not effective even though the transfer documents had been executed at the time she swore the affidavit on 23 September 2008, and that from an accounting point of view there was a difference between when a land transfer document is executed and when a settlement is done later, which, she said, was when the property is transferred from one set of books to another, showed she is a person who is prepared to manipulate and alter the financial position of CAT, and falsely represent the true financial position of CAT, for her own purposes of ensuring she personally obtained the benefit of payment of the original judgment sum, and then once having done so, avoiding having to refund that part of the judgment in consequence of the Court of Appeal judgment. It shows a person with little or no regard for the truth.

95 In my view the different positions sworn by Mrs Frigger were contradictory and served to defeat the legitimate purposes of the litigation in which they were sworn (compare: Frigger v Professional Services of Australia Pty Ltd [No 3] [109]).

Simmonds J should have recorded in his reasons that the result of the inconsistencies in Mrs Frigger's affidavits of 23 September 2008, 22 June 2010 and 12 October 2010 was that if Mrs Frigger's affidavit of 23 September 2008 contained falsehoods, it resulted in Buss JA refusing the application for a stay. If, on the other hand, her two 2010 affidavits filed in relation to the freezing and ancillary orders application contained the falsehoods, then she was attempting to mislead Simmonds J. It is not necessary to decide which is true for the purpose of this appeal. All that is necessary is to observe that she has been guilty of bending the truth. If all that Mrs Frigger has now offered about CAT's circumstances as at 23 September 2008 had been put before Buss JA, a stay would almost certainly have been granted and the freezing and ancillary orders would not have been necessary. Because Simmonds J did not refer to this in his reasons, it may be inferred that his Honour overlooked it. If this had been detected by his Honour, the order that each party pay their own costs would not have been made.

96 In relation to the $999,999 deposit in ING, which Mrs Frigger swore in the 23 September 2008 affidavit was an asset of CAT, she said she should not have put that into the affidavit because it was an online term deposit held with ING Direct which when she looked on the internet the holder of the fund was CAT which is why she put it in her affidavit, but later on she realised the rest of the name was 'as Trustee of the Frigger Superannuation Fund'. She said she did not realise that until a long time later, may be two years later. She denied falsely overstating the assets of CAT $999,999 and said it was an inadvertent error and she had immediately assumed the amount belonged to CAT even though she was the accountant for CAT. She accepted the sum was already in fact in the Frigger Superannuation Fund and said that because the name of the holder of the fund was not showing up she simply put it in the CAT assets by mistake. It was unintentionally false. She insisted she did not falsely overstate the assets of CAT by $999,999. Rather it was an inadvertent error. She just assumed the sum belonged to CAT. It is important I set out her evidence about this matter in full (ts 641 - 642):

And is that also your explanation for the fact that the $999,999 deposit of ING you now describe as being held by the Frigger Super Fund even though you swore in the affidavit in 2008 that it was an asset of CAT?---No. That - that - that is the only thing that I should not have put into the affidavit of 23 September 2008. That was an online term deposit held with ING Direct and at the time, when you have - when you look on - on the Internet and you look at the name of the holder of the fund, it said Computer Accounting & Tax Proprietary Limited, that's why I put it into the - my affidavit and later on, I realised that the rest of the name is as - as trustee of the Frigger Super Fund and I didn't realise that until a long time later, maybe two years later.

So are you saying that on 23 September 2008, your affidavit was falsely overstating the assets of CAT by $999,999?---It wasn't false. It was an error. It was an inadvertent error because I could only see Computing Accounting & Tax on the website and I just immediately assumed that it belonged to CAT.

Mrs Frigger, you're an accountant and you're saying that as the accountant of CAT, you made an assumption about something worth almost $1 million?---Yep, I did. I did.

Isn't it really - - -?---Because you know - sorry.

- - - the case, Mrs Frigger, that this is just another example of where you will swear and say what is necessary at the time whether it's true or not?---No, it's not an example. But as I have said that that was an error I made. It was an inadvertent error at the time. It was already in fact in the Frigger Super Fund. That part of the name of the holder of the fund was not showing up and I simply put it in by mistake. It was - I was - I - I did not intend to falsely do something. It was - it was - - -

So it was unintentionally false, is that what you're saying?---If you want to call it unintentionally false, you can call it that, yep.

97 I was extremely troubled by Mrs Frigger's evidence about this issue.

98 Mrs Frigger is an accountant by occupation and was the accountant of CAT. I find her explanation extraordinary and I reject it. As Mrs Frigger makes clear in her affidavit, and as she accepted in her evidence, she sought to present CAT as being in a strong financial position to defeat the application for a stay. I do not accept she made an inadvertent error. I do not accept that as an accountant and the accountant of CAT she did not know the sum of $999,999 was an asset of the Frigger Superannuation Fund and not of CAT. I do not accept she was simply careless about that. In my view Mrs Frigger deliberately falsely swore the term deposit with ING Direct in the sum of $999,999 was in CAT's name and an asset of CAT to deliberately misrepresent the financial position of CAT, when she knew that sum was not an asset of CAT, for the purpose of defeating the application for a stay and to obtain immediate payment of the judgment sum, which in turn was immediately paid to, or to the benefit of, the plaintiffs.

99 It is more than a case of Mrs Frigger being careless with the truth. In my opinion she deliberately falsely swore the term deposit with ING Direct in the sum of $999,999 was an asset of CAT to represent CAT was in a sound financial position, when she knew it was not, and able to refund any sum which it might be ordered to pay if PSA's and Banning's appeal was successful, when she knew CAT was not able to repay any substantial sum without being provided with an injection of funds by the plaintiffs.

100 I further note that Mrs Frigger's statement in relation to the sum of $999,999 and CAT's financial position was made in an affidavit in which at par 6, responding to Mr Banning's affidavit in which he has apparently referred to conflicting statements made by Mrs Frigger in her affidavit of 24 April 2007, she explains any inconsistencies on the basis the affidavit 'was made shortly after the sudden death of my father and by my failure to check the affidavit, prepared by my new solicitors ..., before swearing it'.

101 It is extraordinary that an accountant knowing the significance of the affidavit she was swearing on 23 September 2008, and having had it pointed out to her that her earlier affidavit contained inconsistences, would not be very careful in her listing of the assets and liabilities of the company of which she was the accountant and a director and shareholder with her husband. I reject her explanation that her inclusion of the sum of $999,999 as an asset of CAT was an inadvertent error because she did not properly read the name of the holder of the sum which identified CAT as the Trustee of the Frigger Superannuation Fund and did not realise that until some years later. In my view, as the accountant of both CAT and the Frigger Superannuation Fund, Mrs Frigger would have known the sum was an asset of the superannuation fund and not CAT. In my view Mrs Frigger has intentionally included the sum of $999,999 as an asset of CAT to intentionally and falsely represent the financial position of CAT. It was intentionally included to mislead the court when opposing the application for the stay of the judgment of Simmonds J for the purpose of persuading the court that if the judgment monies were paid the company was able to repay the monies if the appeal succeeded and CAT was ordered to repay the judgment monies.

102 When cross-examined about the effect of the Court of Appeal judgment, Mrs Frigger was not prepared to accept that the effect of the judgment was that CAT was required to repay a substantial sum even though she accepted that the damages which had already been paid to CAT were reduced by $675,000. She maintained that by the terms of the DOCA CAT did not have to pay any money back if the DOCA was terminated and as at 23 October, when the Court of Appeal delivered judgment, the DOCA had terminated. Therefore she wanted to seek a declaration as to what was the effect of the terms of the DOCA.

103 Mrs Frigger said that on 22 October 2009, the day before the Court of Appeal judgment, she registered with ASIC a fixed charge charging assets of CAT in favour of her and her husband in the sum of $2 million. She explained, the charge covered any future loans or past loans up to a value of $2 million and she delivered it to CAT on 22 October. Mrs Frigger was then taken to an affidavit she swore on 18 January 2011 in CIV 2765 of 2010 (exhibit 2.50) in which at par 55 she said that the charge was registered with ASIC on 23 October 2009. She then said it was registered on 23 October but she delivered it the day before. She maintained that the charge was registered on 22 October and someone had altered the date from the 22 October to 23 October. She did not accept it looked suspicious that a $2 million charge was registered on the very day that she found out the judgment monies would be reduced. When she was taken to a copy of the deed of charge (annexure ACTF-17 of her affidavit), which was date stamped 23 October 2009 she then said she could not remember when it was registered but maintained she signed it on 22 October which is when she delivered it to ASIC. By reference to cl 2 of the schedule to the deed to which Mrs Frigger was taken, which stated that consideration of $2 million was granted by way of a loan secured under the deed which the plaintiffs were entitled to the security to protect the loans both past and present, she again explained that the monies were not repayable unless the objective of the trust was not achieved but because the objective of the trust was achieved the loans did not have to be repaid. That was by reference to a Quistclose trust which she had since heard of.

104 It was put to Mrs Frigger it would look suspicious if she registered the charge for $2 million on the same day she found out the Court of Appeal had reduced the damages to which CAT was entitled and which would require repayment of a substantial portion of the judgment sum paid to CAT. Mrs Frigger denied it was suspicious. It was also put to her that the reason she was saying the charge was delivered to ASIC on 22 October 2009, despite it being date stamped 23 October, was because she knew it looked suspicious that she was registering a charge in favour of her and her husband on the very day that the damages were to be reduced by the Court of Appeal. She maintained the circumstances were not suspicious and that she gave the members voluntary liquidator Mr Trinick a written undertaking that in the event liabilities exceeded assets, her and her husband would not enforce the charge. She produced no documentation or other evidence to support her evidence. However, Mrs Frigger later, in re-examination contradicted that evidence when she said in (ts 890):

Yes. Now, you were asked about the fixed charge that you had lodged and you recollect that there are different dates, I think the 22nd and the 23rd - - -?---Yes, yes.

- - - of the month on the document that was lodged. Can you just tell us - you said that it was lodged on a particular day. Can you say how it was lodged and what happened precisely in relation to that?---Yes, there's - the charged was actually executed on 10 September but - and it is not a coincidence that I took it in for lodgement just about the time that the - the appeal - appeal decision was coming down. I was very, very afraid of the people that - that were opposing me and the types of actions that they would take in relation to my assets. And I actually took it in to ASIC in - late afternoon on 22 October and they accepted it but there was something to do with the time of lodgement and they told me that it would actually be recognised as lodged on the next day. So even though I took it in on the 22nd it somehow - the - there was a timing cut-off - cut-off time for lodgement.

Yes. And is there any particular reason why it was lodged on that date?---Yes, well, I knew that the - the decision of the Court of Appeal was coming down and I was wanting to make sure that if there had to be any money paid back, that I would do it on my terms and not on the opposition's terms.

105 This in my view is an example of how Mrs Frigger has been prepared to manipulate and create documentation, including by swearing affidavits, which are often contradictory of and inconsistent with each other, to first, defeat the application for a stay of the original judgment and then, secondly, to defeat and prevent compliance with the Court of Appeal's orders by refunding a sum in excess of $850,000 in circumstances where Mr and Mrs Frigger have personally or through their superannuation fund, received full payment of the original judgment and have both failed and refused to refund the monies required to be refunded in consequence of the Court of Appeal's orders.

106 I also note that despite the deed of charge referring to past loans made to CAT by the plaintiffs, Mrs Frigger swore in her affidavit of 23 September 2008 that CAT had no liabilities except for GST liabilities.

107 She was cross-examined about swearing CAT had no liabilities save quarterly GST liabilities. She was taken to par 8 of her affidavit of 22 June 2010 in which she swore her and her husband borrowed $452,450 which they then lent to CAT and which CAT used to purchase the Edward Street property. Mrs Frigger said that although in par 9 of her affidavit she swore that a term of the loan was that CAT would be liable to pay interest on the loan made by her and her husband, that was not the correct position. She said there was no loan that needed to be repaid. The property was purchased with the objective of it being transferred to the Frigger Superannuation Fund and if that objective was completed no monies had to be paid back to her or her husband. She said she now knew that the purchases of both the Edward Street and Armadale properties are what is known as Quistclose resulting trusts.

108 There was also accrued salary owing to her husband and herself. Mrs Frigger explained there were no liabilities as at 23 September. Computer Accounting and Tax Pty Ltd did not owe her the money then because by accounting standards she could later go back 10 years and try and calculate what would have happened if the monies became available which is what she was trying to do when asked by Simmonds J to explain the transactions.

109 Again this demonstrates how readily Mrs Frigger is prepared to differently represent the financial position of CAT at different points in time for the purpose of defeating the legitimate purposes of the litigation.

110 On 15 February 2010, Mr and Mrs Frigger, acting in person, applied to set aside the appointment of the provisional liquidator. In support of that application Mrs Frigger swore an affidavit on 15 February 2010, (exhibit 2.17) which included a balance sheet of CAT suggesting that it had $850,000 on term deposit as at 10 February 2010.

111 The $850,000 was never actually given to CAT for the purposes of paying debts and never became an asset of CAT. While this was originally accepted by Mrs Frigger ('I'm absolutely clear about that'), when presented with the inconsistent balance sheet Mrs Frigger sought to dissemble and reverse her position.

112 She said her husband signed an undertaking which was filed in the court to provide $850,000 which was a term deposit in his name to secure the payment of debts pending the finalisation of all matters including any outstanding issues as to costs. However, the $850,000 was never given to CAT and never became an asset of CAT.

113 On 10 February 2010 Mrs Frigger swore an affidavit in support of an application for a stay before the High Court (which is annexed to Mrs Frigger's affidavit of 15 February 2010, exhibit 2.17). The affidavit was sworn two days after she swore the affidavit on 8 February in COR 2 of 2010 (exhibit 2.14) in the provisional liquidation application, which had the RATA attached to it. The purpose of the affidavit was to obtain a stay from the High Court in relation to the orders of the Court of Appeal.

114 Her affidavit filed in the High Court annexed a copy of a balance sheet of CAT as at 10 February 2010 (which was exhibit 13 to the affidavit) in which she said CAT was solvent. In the balance sheet it listed under assets that CAT had cash on term deposit of $850,000. When it was put to her that that was not true given she had just said that the $850,000 never became an asset of CAT, she explained that as at 10 February her and her husband had decided to transfer the $850,000 term deposit, which was in his name, to CAT. She said however, they never did it because the provisional liquidation application was never granted but as at 10 February they had decided that was what they were going to do. She said that because the undertaking of her husband was dated two days earlier, he said in that undertaking the $850,000 would be transferred to CAT which is the reason why she listed it as an asset of CAT. She tried to explain that because of her husband's undertaking that the term deposit in his name was going to become an asset of CAT, it became an asset of CAT. When it was put to her that she swore an affidavit in the High Court that CAT had cash assets of $930,000 which was not true, she maintained that as at 10 February it was true because her husband had given an undertaking that was going to happen. She said that the $850,000 was a term deposit, which although in her husband's name, he was going to give it to CAT for it to become an asset of CAT. She would not accept that that was an inconsistent explanation or that the affidavit was false (ts 650 - 652).

115 I am unconvinced by and am indeed also troubled by Mrs Frigger's explanation and I reject it. I find it an extraordinary explanation particularly given she is an accountant. In my view Mrs Frigger dishonestly swore the affidavit to create the false impression CAT was solvent. On no reasonable view could the sum of $850,000 be regarded as an asset of CAT, as Mrs Frigger initially acknowledged. The only reason she listed that sum as an asset of CAT was to deliberately create a false and misleading picture of CAT's solvency. I am satisfied when she swore that affidavit and included the sum of $850,000 as an asset of CAT she well knew it was not an asset of CAT. She swore the affidavit intending to mislead the High Court as to CAT's financial position in an attempt to persuade the High Court to grant a stay of the Court of Appeal judgment requiring CAT to refund the sum in excess of $850,000 being a substantial part of the damages which had already been paid to CAT by PSA and Banning and in turn disbursed by the plaintiffs to or on behalf of themselves.

116 That view is reinforced by Mrs Frigger's subsequent evidence (ts 653 - 654) in which she accepted by reference to par 8 of her affidavit that there was never a proposal that the $850,000 would be made available to pay the outstanding statutory demand, it was always a conditional offer. It was conditional upon sorting out the costs and all of the matters that she referred to, that is, how the terms of the DOCA affected the payments.

117 Mrs Frigger was then seeking advice from another solicitor, Mr Darbyshire, who drafted a letter he recommended be sent to the provisional liquidator Mr Kitay setting out an offer. Mrs Frigger said she never saw the draft letter and only saw it when it was discovered by the defendant's solicitors a few months ago. She said she only discussed the letter with Mr Darbyshire but never saw the letter before it was sent. She said had she seen the letter before it went out she would not have allowed it to go out because the letter referred to the company no longer being insolvent if the terms of the offer were accepted by the conditions being accepted to lend the sum of $850,000 to CAT. Mrs Frigger maintained CAT was never insolvent (ts 656). She maintained a circuitous unpersuasive argument that CAT could have paid the judgment debt because her husband would have paid the monies to CAT even though he did not.

Mrs Frigger's insertion of documents into exhibit

118 On 18 September 2014 Mrs Frigger was initially cross-examined regarding the affidavit she swore on 22 June 2010 in CIV 2265 of 2006 (exhibit 7.2), the freezing orders application. The affidavit which had been discovered was incomplete and only part of the affidavit had been discovered by the plaintiffs.

119 On 9 April 2004, Derrick DCJ in Frigger v Clavey Legal Pty Ltd [No 2] [2014] WADC 44 ordered the plaintiffs to give discovery of portions of the affidavits in the following terms:

In summary, my ruling on the appeal is that the plaintiffs must give discovery of the following portions of the affidavits:

1. Affidavit sworn 23 September 2008: pars 1 - 3, 16 - 23 and any annexures referred to in these paragraphs.
2. Affidavit sworn 22 June 2010: pars 1 - 41 and any annexures referred to in these paragraphs.
3. Affidavit sworn 12 October 2010: pars 1 - 10, 12, 16, 19, 20, 22.

and any annexures referred to in these paragraphs.

120 On 18 September 2014 Mrs Frigger was cross-examined in the following terms (ts 629):

One of the affidavits that you were asked to provide paragraphs of was an affidavit of 22 June 2010?---Yes, I - yes, I think so, yes. Mm hmm.

And the document that you're looking at now, which begins at page 1373 is what you provided to the defendants in response to that order and the request for that document, correct?---These documents that I'm looking at now, where it has a - obviously it's a fax from H and A Frigger - are the documents that were - that I provided. But yes, they are the documents I provided.

And the one that we're looking at is the document, is the affidavit of 22 June 2010. Do you agree with that?---No. I'm not going to answer because I don't know, okay? I just simply don't know.

121 Following Mrs Frigger's answer, senior counsel for the defendant's called for the originals of the three affidavits Mrs Frigger was ordered to discover and I ordered that she provide full copies of the three affidavits.

122 On 19 September 2014 (the final day of the first week of the trial before the trial was adjourned part heard to 13 October) the plaintiffs produced to the court two copies of the green appeal books in the CACV 23 of 2012, being volumes 3 and 4 of 4 appeal books (they became exhibits 6.1 and 6.2 respectively). Senior counsel for the defendant, in the presence of Mrs Frigger and her counsel, informed me (ts 683):

Now, in relation to the documents which I was given access to over the luncheon adjournment, the position is this. The orders that your Honour made yesterday were to produce three affidavits. The three affidavits in question were all affidavits sworn by Mrs Frigger, the first an affidavit sworn 23 September 2008, the second an affidavit sworn 22 June 2010 and the third an affidavit sworn 12 October 2010.

The appeal books which were delivered to your Honour are appeal books which contain a number of affidavits. They contain a full copy of the affidavit dated 23 September 2008. They contain part of the affidavit sworn on 12 October 2010, that is, the pages which are missing appear to be pages 1 and 2 of that affidavit.

And in relation to the third affidavit, which is the affidavit sworn 22 June 2010, that is an affidavit which in the index to volume 4 of the appeal books is described as running from pages 768 to page 855 and the copy of the appeal book provided runs to page 786, so there's a substantial portion of that missing. So there are - there's more than we had, but there's not all of them.

123 There was then the following exchange with counsel for the plaintiffs (ts 688 - 690):

HERRON DCJ: Well, Mr Quinlan has said - - -

COOK, MR: There are other parts not in the book.

HERRON DCJ: - - - the affidavit of 23 September 2008 is fully reproduced in the appeal books, the affidavit of 27 June 2010 is incomplete and the affidavit of 12 October 2010 is missing pages 1 and 2. It just seems to me, and this what I'm seeking clarification about, if Mrs Frigger was able to comply with the orders of Judge Derrick by providing those parts of the affidavits, it'd be unusual if she doesn't have the full affidavits.

COOK, MR: Well, it is odd because my - I have to admit it's odd because the affidavit of 22 June that Judge Derrick said had to be provided was paragraphs 1 to 41 and any annexures referred to in those paragraphs and, apparently, the annexures would be in the missing pages of 786 to - 69 missing page that my learned friend has talked about.

...

COOK, MR: Thank you, your Honour. I've received instructions. These green books were provided to us from Mr Britten-Jones, a barrister we had appearing for us who's an Adelaide barrister. My instructions are that the documents in 60.2 and 60.3 were provided in full pursuant to the order of Judge Derrick.

My problem is, and I've explained to the client, that my learned friend has said that, for example, the annexures to the affidavit of 22 June 2010 aren't in the green books and where did she get the - I've asked my client where she got the annexures from and she said, "Well, if they're not there now I don't know where they were" or words to that effect, "I'm happy to go and give evidence in the witness box if you want me to explain".

But it would appear that, for some reason, my client believes that she has complied with order 2, but if asked where are the annexures that aren't provided today she doesn't know.

HERRON DCJ: And in relation to the affidavit of 12 October, which is missing pages 1 and 2?

COOK, MR: Well, again, she - all she has is what is - she believes she has is what she's got there. That's all she has said she had in her office, were those documents there, and she doesn't know how there's a discrepancy.

...

UNIDENTIFIED SPEAKER: To give me instructions - - -

COOK, MR: Look, let me just - - -

HERRON DCJ: - - - those affidavits are sworn and I'm told that pages 1 and 2 of that affidavit are missing, so they need to be produced.

COOK, MR: Yes.

...

QUINLAN, MR: Now, the court matter numbers are these. 23 September 2008 was filed in CACV 76 of 2008 and both the affidavits of 22 June 2010 and 12 October 2010 were sworn in CIV 2265 of 2006.

...

124 I ordered that each party have leave to have full access to the appeal books and take copies. I also made orders in the following terms:

1. Within 10 days from the date of this order, the first named plaintiff file and serve an affidavit of discovery listing the documents which are or have been in the possession, custody or power of the plaintiffs relating to any matter in question in this action, including:

(a) the affidavit sworn by the firstnamed plaintiff on 23 September 2008 in Supreme Court civil proceedings CACV 76 of 2008 (including annexures);

(b) the affidavit sworn by the firstnamed plaintiff on 22 June 2010 in Supreme Court civil proceedings CIV 2265 of 2006 (including annexures);

(c) the affidavit sworn by the firstnamed plaintiff on 12 October 2010 in Supreme Court civil proceedings CIV 2265 of 2006 (including annexures);

(d) the chamber summons, supporting affidavit and chronology deposed by the firstnamed plaintiff to have been handed to Mr Terry Clavey on 12 March 2010 and referred to at pages 571 and page 572 of the transcript of the trial of this action;

(e) income tax returns of Computer Accounting & Tax Pty Ltd marked annexure DL7 to the affidavit of David Lenhoff sworn 27 August 2010 in Supreme Court civil proceedings CIV 2265 of 2006; and

(f) those documents which have not previously been discovered the plaintiffs.

1. Within 10 days of the date of this order, the solicitor on the record for the plaintiffs file a certificate in accordance with Order 26 rule 16A Rules of the Supreme Court 1971.

125 Thereafter the defendant's solicitor inspected the green appeal books and took a copy. On 26 September 2014, Mrs Frigger attended the court in person and was provided with the appeal books and took them away from the court.

126 On 7 October 2014 I heard an application on behalf of the defendant for a springing order on the basis the plaintiffs had failed to comply with my orders of 19 September. Shortly prior to the directions hearing I was provided with a letter from the plaintiffs' solicitor Mr Griffin in response to O 2 and an affidavit of Mrs Frigger sworn on 3 October 2014 in purported compliance with the orders made in par 1. After hearing argument on behalf of the parties, I declined to make a springing order and made the following orders:

1. By no later than midday on Friday, 10 October 2014, the first-named plaintiff file and serve a further affidavit of discovery;

(a) specifically responding to orders 1(d) and (e) made on 19 September 2014; and

(i) the affidavit sworn by the first-named plaintiff on 8 December 2009 and listed as document 17 in Volume 1 of the Green Cross Appeal Book filed in CACV23 of 2012;

(ii) the affidavit sworn by the first-named plaintiff on 18 March 2010 and listed as document 21 in Volume 1 of the Green Cross Appeal Book filed in CACV23 of 2012; and

(iii) the affidavit sworn by the first-named plaintiff on 18 May 2010 and listed as document 24 in Volume 1 of the Green Cross Appeal Book filed in CACV23 of 2012.

1. The plaintiffs pay the defendant's cost of today forthwith, fixed at $462.

127 When the defendant's application was heard before me, Mrs Frigger, having removed the appeal books from the court and having not returned the books, I ordered they be immediately returned. The appeal books were returned to the court by Mrs Frigger on 10 October 2014.

128 On 13 October 2014, Mrs Frigger was cross-examined about volume 3 of the green appeal book. What emerged in that cross-examination causes me significant concern and I set out the cross-examination in full:

QUINLAN, MR: Mrs Frigger, can I ask you to go to page 1,507 of that book?---Yep, I've got it open. Sorry. Seven. Seven, yep. No notice of acting in person.

Yes. Do you recognise that? And down the bottom you will see there's a fax print from H and A Frigger?---Mm.

Recording it as a facsimile transmission on 6 May. This is the facsimile that you sent to the defendant's solicitors, following the application for discovery before his Honour Judge Derrick, correct?---Yes.

Yes. And you will see that that runs to some - the facsimile, itself, runs to some 66 pages. Do you see that?---It - where - where it's got that facsimile thing on the bottom, you mean? Yep.

The last page is 1,625 of the book?---Yep. Yep. That's - that's fine.

And over the page, on page 1,508, there's a copy of the affidavit of discovery that you swore on 15 April 2014?---Mm hmm.

And on page 1,511, you swore, as part of the list of the documents, documents 165 through to 167, being the affidavit in each of those proceedings in the paragraphs and annexures that are referred to, correct?---Well, that's what it says in the - in the document. Yes.

Well, did you do it or not?---Absolutely, I - I swore this affidavit. Is that your question?

That was my question?---Yes, I swore this affidavit. I prepared the affidavit and I swore it. Is there any other questions about that?

So at that time you said that you had custody of the document which is now lost?---No. Just read it, please. It says copy and then it says the affidavit and the paragraphs and the annexures which Judge Derrick had asked me to discover, which form part of the green appeal book which I had got back from my barrister in Melbourne. That's what I was referring to.

So, for example, go to page 1,528?---Yep.

And that is a copy of the cover sheet of an affidavit sworn by you on 10 October 2010, correct?---Twelfth, actually.

Sorry, 12 October 2010?---Mm.

Correct?---Mm hmm.

Just stay on that page, Mrs Frigger?---Yep.

So you faxed that to the defendant's solicitors on 6 May?---I did.

Where did you get it from?---Well, if you look at the document itself - - -

Will you answer my question?---Well, I've already said where I got it from. I got it from the green appeal book which I got back from my barrister who was in Adelaide and which I brought to court. That's where I got it from.

Could the witness be shown that green appeal book, your Honour? Volume 3 that she provided to the court on 19 September this year.

THE WITNESS: Thank you.

QUINLAN, MR: Is that what you are saying you got it from?---Yes.

Okay. Can you find the page that I've just referred you to in that book, please?---Four twenty-one.

Yes?---Yes, I've found it.

Can you show me?---You want me to show you?

Can I just see it?---Okay.

Mrs Frigger, have you had these documents - did you take custody of these documents after they were provided to the court?---Yes. I - I - I went to a - an - level 9, like I - we had been instructed. Each party was allowed to take the documents from the court and make copies and bring them back. So I actually came here on a Friday and Judge - his Honour and his associate was not in Perth at the time but I spoke to the receptionist and I believe the receptionist called the associate and got permission for me to - to take them and - and do what I - I did.

And how long did you keep them for?---I can't remember. I think I only brought them back last Friday. Is that right? Let me - can I - may I ask? I can't remember the date but I - I returned it to the court.

Were you actually told not to leave the precincts of the court with them?---No, I wasn't told that.

And Mrs Frigger, did you change the documents when - did you - when you gave the documents back, had you done anything with them?---No.

Well, just have a look at that again, very carefully?---Why would I do anything with them? What a joke.

I - - -?---Anyway - - -

- - - asked you to - - -?---I'm sorry. I'm sorry. I - I - I am sorry. I - I - - -

I asked you to find - - -?---I found it. I found it.

- - - page 421?---Yes. And there is it.

And Mrs Frigger - - -?---Yes.

- - - between the time you took that from the custody of the court - - -?---Mm hmm.

- - - and when you brought it back - - -?---Mm hmm.

- - - you've inserted that page in there, haven't you?---No. I had actually pulled them out so that I could actually fax it to your office and I just put them back loosely because I don't have one of these machines to - that - that can bound it. So all - all I did was put them back. That's all I did. I - like I had given it to - to his Honour. That's all I did.

It's not true, is it, Mrs Frigger?---Well, you can say anything you like. That's what I took out of the court and what I've brought back to the court.

When you took it from the court, the copy that had been provided to the court did not have page 1 of that affidavit in it, did it?---Well, what, you think I just, you know, manufactured it out of the air? Is that what you think? Is that what you're implying? Because I didn't.

No. What - - -?---This - actually, I'll tell you what it - this was actually - you know where it was, it was inserted into the back of the file like that.

Mrs - - -?---Yes.

Mrs Frigger - - -?---That's where I found it. And so all I've done is I put - I've reassembled it into the right page order. That's all I have done.

Really?---Yep.

You haven't - - -?---Really.

Did you go to the - didn't you go to the defendant's supplementary bundles, get a copy of that page and insert it in?---No.

So are you saying that that copy - - -?---Yes.

- - - of page 421 - you're shaking your head, Mrs Frigger but just answer my question. Are you saying that that copy of page 421 of the appeal book - - -?---Mm hmm.

- - - is the page, the actual page, that was - - -?---Faxed to you?

Yes?---Yes. Exactly. Exactly what I am saying.

That's exactly what you're saying?---Exactly.

Give me another look at it?---Have a look.

COOK, MR: I wonder could I have a look at this at some stage, too, your Honour?

QUINLAN, MR: Yes, I'll give it to my friend.

Mrs Frigger, go to that page again?---Which one?

The one that we've been - - -?---The green book?

- - - looking at?---The green book or this one?

In the green book?---In the green book. Yep. Yep, 421. I've got it open.

Do you swear on your oath that the copy that is in front of you, in what you've identified as the green book - - -?---Mm hmm.

- - - is the copy that has always been in the green book and is the copy that was faxed on 6 May 2014?---I do swear that, yep. I do swear that.

And that you have not obtained that page from somewhere else and inserted it in the green book?---Absolutely not. I know that I cut all these pages off so that it would go through the fax machine and I know that I had pulled them out because Judge Derrick had only asked me to - to discover certain pages. And when I got it from the court I - I - if I remember rightly they were at the back of that and I just pulled them out and I put them into the correct order. That's all.

And Mrs Frigger - - -?---Yep.

- - - you can't then explain why a facsimile imprint actually appears on the bottom of that page?---No, I can't.

Look in the top right-hand corner, Mrs Frigger, of that page?---Yep.

Do you see it has the numbers 1457?---Yep, I do.

You know where that number comes from, don't you?---I have no idea. I have no idea where that comes from.

It comes from the defendant's second supplementary book of documents, doesn't it?---I - well - - -

Listen to me?---No, just - just let me think. Let me - let me just - so you - when you took this copy away you put the copies back in the book, did you?

Oh, Mrs Frigger.

HERRON DCJ: Mrs - Mrs Frigger, ?---Because - because this is the only place I found them. Sorry. This is - I found them in - sorry.

Mrs Frigger?---Yes, I'm sorry, your Honour.

Please listen to Mr Quinlan's question?---Okay.

QUINLAN, MR: Mrs Frigger, you have just sworn on your oath - - -?---Yep.

- - - that the document that is in front of you is the document that you have had since 6 May - - -?---No, I said this is the book that I got from the court. I took it home. These loose pages were at the back of the book. I pulled them out and I put them - reassembled them into the right page order. That's what I said. And they are the same copies that I faxed on 6 May to the - to you. They're exactly the same page. I haven't had any other copies of these documents other than what I got from this green appeal book.

How did the number get in the top corner then, Mrs Frigger?---Well, I - I think this is what has happened, that you have put copies of them into the back of the file because I certainly didn't extract pages from your defendant's book and put it in there.

Yes you did, Mrs Frigger, didn't you?---I did not.

That's exactly what you did and you've been - - -?---That's exactly not what I haven't done.

You have been - you - - -?---Well, you know, I tell you how to prove it. Go and have a look at the - at your - your books that you've given me. Go on, have a look at them.

The books that I've given you?---Well, you're saying that I've taken these out of your supplementary books and put them into this appeal book document. And I say, well, check our copies to - to prove the point. I haven't put anything out of our - our supplementary books.

You photocopied it?---I have not. If I photocopied it, how come they've got all these - all these - you know, this - this stuff here?

Ask them - pass those loose pages to me again?---If I photocopied it, it would have been a clean page here, clean - clean edge.

You've been caught out, haven't you, Mrs Frigger?---No, I think you've been caught out.

You have taken the documents from the custody of the court personally, not provided them to your solicitor and you have altered them, haven't you?---No, I haven't.

Because it's the case, isn't it - - -

HERRON DCJ: Can - can I - can I just clarify that question because there were two aspects of it? Mr Quinlan asked you, you've taken the two green appeal books from the custody of the court?---I did, your Honour, yes.

He then asked, you've not provided them to your solicitor. Did you provide them to your solicitor?---I did not, no.

And then the next question was, you've kept them in your custody?--- I have kept them all - all along, yes. I - I'll just clarify that, your Honour. At one stage I think it was Ms Moss who spoke to Mr Griffin and asked if she could inspect these green appeal books and I - I believe it was on one of those days where Mr Griffin was not in his office so I didn't take them into the court - into Mr Griffin's office. And then we appeared before you on the last directions hearing and you raised a concern that these - these appeal books had not been brought back to the court and I gave an undertaking that I would, and that's all I did, was I brought them back with - together with the - the - a supplementary books of the plaintiff's documents which I've also brought in at the same time.

QUINLAN, MR: Mrs Frigger, you were in court on the day that those green appeal books were produced, weren't you, on the 19th - - -?--- I produced them.

Just - just listen to me. You were in court on 19 September when I and my learned friend were addressing his Honour in relation to what had been provided to the court in those appeal books?---Correct.

And you heard me say in court that:

The appeal books contain part of the -

- this is at page 683 of the transcript. You heard me say they -

- contain part of the affidavit sworn on 12 October 2010. That is, the pages which are missing appear to be pages 1 and 2 of that affidavit.?---Correct. Well, I can't remember what you were saying but I knew - I know that you were saying that there were certain pages that were missing and you were not happy with that, et cetera, et cetera, because - - -

And - and you - - -?---Because those were the pages I believe that I was not required to discover.

And is that why you say they were missing, because those were - - -?---No, no, no, no, no, I - no, sorry.

- - - the pages you were not required to discover?---No, I'm sorry. There were two issues then on 19 September, as I recall. One was that I had only been asked to discover certain parts of certain affidavits and because I couldn't identify those parts that appeared in one of your books of documents you asked his Honour to make an order that I discover the entire affidavits, and the only copies of the entire affidavits I had were from these green appeal books. So the next day I brought the whole appeal book in with me. That's exactly what I did.

And you heard me say that the affidavit of 12 October 2010 had pages 1 and 2 missing?---Yep.

And after that - - -?---You mean they were missing from the appeal book?

Yes?---Okay. Yep.

Well, that's what I said in court. You were in court when I said it?---Well, I don't remember everything that you say in court, so are you asking me if I remember that or are you asking me if you actually said it? What's your question?

I identified that there were pages missing in the affidavit in court?---Okay. If you say that, you know, I'm not going to argue with you because I can't remember everything that you said.

Well, you remember that, don't you?---No. All I remember was that you were not happy that the whole affidavit had not been discovered because Judge Derrick had only asked me to discover certain documents and I was not able to verify, of the pages that you were asking me about, which affidavit belonged to - which pages belonged to which affidavit. That was the issue as far as I remember.

On the next day, when you produced the appeal books - - -?---Yes.

- - - I made submissions that there were pages missing from the affidavits in the appeal books. That's why there was another order made on that day?---Yep.

Yes?---Well - - -

And you - - -?---Because I - well, as I understood - look, I'm not a lawyer. As I understood it, because I couldn't identify the pages you were asking me about as to which affidavit it belonged, his Honour said I should bring the whole affidavit in. That's how I understood it. Maybe I'm wrong.

And after I had identified that there were pages missing you came and took the affidavit from the custody of the court, and over a week later you brought it back?---Yes.

And the pages that I had identified that were missing were now in the appeal book?---Yep.

And they had on them numbers in the top right-hand corner that showed that they had actually come from documents filed by the defendants?---Yep.

And you did that, didn't you?---No, I didn't. As I said, I got the appeal books - I didn't even make photocopies of the appeal books, by the way.

Your Honour - - -?---I haven't made copies of them for anybody. I simply brought them back to the court and gave them back to his Honour's office.

(ts 740 - 748)

129 Volumes 3 and 4 of the green appeal books, with the loose pages, were tendered into evidence by the defendant and became exhibits 6.1 and 6.2 respectively.

130 In her demeanour Mrs Frigger was very uncomfortable when she was questioned about the pages which were missing from volume 3 of the appeal book when she was initially cross-examined on 18 September 2014, and which was discussed with counsel before me on 19 September 2014. At the beginning of his cross-examination senior counsel appeared surprised when Mrs Frigger referred to page 421 and asked to look at volume 3 before continuing his cross-examination. At that stage Mrs Frigger was confident in her demeanour and even arrogant, responding to questions by asking questions of counsel, but as the cross-examination proceeded her confidence disappeared and she became uncomfortable, defensive and aggressive.

131 In my view, based both on her demeanour and the objective evidence, Mrs Frigger was untruthful in her evidence when she denied inserting page 421 of volume 3 of the green appeal book (exhibit 6.1) when she removed the green appeal book from the court and retained it in her custody in order to copy the book. She was untruthful when she said she found page 421 inserted into the back of the book or file and that she reassembled it into the right page order. She was untruthful when she denied she had inserted page 421 in the book while she had the book in her custody.

132 It is clear from the version of page 421 now included in the green appeal book (exhibit 6.2) that it is in fact a copy of page 1457 of the defendant's second supplementary book of documents dated 12 September 2014, which itself contained the page faxed to the defendant on 6 May 2014 (exhibit 9.14, page 1457). That page number appears on the document contained in volume 3 of the green appeal books (exhibit 6.1) (ts 744).

133 The only inference to be drawn from this evidence is that, between the appeal books being provided to the court on 19 September 2014 and returned on 10 October 2014, page 1457 of the defendant's second supplementary book of documents was inserted into the green appeal books.

134 It is submitted by the defendant that the only reasonable inference is that, contrary to her denial, that was done by Mrs Frigger during the week that she had possession of the green appeal books. I accept that submission. In my opinion it is the only rational explanation for the appearance of the extra pages in the appeal book on 13 October 2014 when the trial resumed and Mrs Frigger was further cross-examined.

135 Mrs Frigger's suggestion (ts 744) that it had been done by the defendant's representatives is, in my opinion, entirely fanciful, particularly given that it was the defendant who identified the missing pages in the first place. It was an attempt by her, when faced with the overwhelming evidence that the missing pages could only have been inserted by her when she had the appeal books in her custody, to deflect the blame from her to the defendant's representatives.

136 I find that on 19 September 2014, when Mrs Frigger originally produced the two volumes of the green appeal books (exhibits 6.1 and 6.2), the first two pages of her affidavit 12 October 2010 were missing from the copy of the appeal books she had produced. The green appeal books were returned to the court by Mrs Frigger on Friday 10 October 2014 and on 13 October 2014 she was cross-examined about her affidavit of 12 October 2010. By that time the first two pages of her affidavit were contained in volume 3 of the appeal book (exhibit 6.1). Those two pages have stamped page numbers 421 and 422. Above those two pages are typewritten page numbers 1457 and 1458 which I find are copies of the two pages 1457 and 1458 extracted from the defendant's second supplementary book of documents. Those two pages bear a date 6 May 2013 and a time of 11.27 am from H & A Frigger 08 9364 2393. None of the other pages of the loose pages of Mrs Frigger's affidavit of 12 October 2010 bear that numbering.

137 In my view she inserted the first two pages of the affidavit of 12 October 2010 which were missing, as identified and confirmed in the discussions with counsel before me on 19 September 2010, to avoid any risk of criticism that she had not produced a full copy of the affidavit in response to the order for discovery. She knew the two missing pages were in the defendant's second supplementary book of documents and copied those two pages and inserted them into the green appeal book.

138 In summary, I find Mrs Frigger inserted pages 421 and 422 into volume 3 of the green appeal book when she took the appeal books from the court and into her custody. In my opinion Mrs Frigger knowingly and deliberately gave false and untruthful evidence when she denied she inserted page 421 into the green appeal book.

Approach to discovery and false statements in discovery certificates

139 The plaintiffs' approach to the discovery of relevant documents was manifestly inadequate and unfair to the defendant. Undiscovered documents were produced throughout the trial, without any adequate explanation, and documents in existence that were clearly relevant were never discovered. For example:

(a) Mrs Frigger failed to produce, when called upon to do so, the affidavits the subject of the discovery order by Derrick DCJ (ts 683) and was ordered to do so on 19 September 2014 (ts 690 - 691, 696).

(b) She did not produce them and simply identified them as 'lost' (exhibit 10). She provided no adequate explanation for their having been lost (ts 737).

(c) She was specifically ordered to adequately discover taxation and financial records of CAT (ts 696). She never did so, and offered no adequate explanation for the failure (ts 754).

(d) The inadequacy of the documentation in relation to damages having been identified in her examination-in-chief on 18 September 2014 (ts 606 - 608), new schedules of damage and supporting documents were produced on the sixth day of trial (13 October 2014) being the documents in exhibit 12 (ts 828).

(e) Again, on 14 October 2014, those additional documents were identified as being inadequate and the matter adjourned for counsel to confer (ts 906 - 909).

(f) The following day (15 October 2014), more new documents were produced and a new version of the particulars of damage were provided (ts 917 - 919), being the documents in exhibit 13.

(g) On that day, the inadequacy of the documentation produced, including in relation to fees claimed in relation to Mr Dillon, again became apparent (ts 944 - 948).

(h) The following day (16 October 2014), the final day of the plaintiff's case, yet more documents, being a bundle of invoices from Mr Dillon were provided to the defendant (ts 996, 1005). Counsel advised (ts 996):

I think that the problem is that Mrs Frigger didn't believe they were relevant or that they weren't documents that were her documents, they were Mr Dutton's documents ...

(i) The documents were tendered through Mr Dutton who confirmed, in cross-examination, that he had been provided with the documents that morning by the plaintiffs' counsel and that they were not part of records that he brought along to court (ts 1009).

140 In providing the certificates of discovery, Mrs Frigger certified that the list of documents (exhibit 10) had been served on a particular day knowing that to be false (ts 735 - 736):

Yes. But you were prepared to sign it, even though it was wrong?---I find it but it was - but it was - I don't believe it was served on 3 October.

Well, you would know if you'd served it. Correct?---I would know if I'd served it and I say I did not serve it.

So you would have signed that knowing it to be wrong?---Yes. I signed it knowing it to be wrong.

And that's what you do. You sign things knowing them to be wrong, such as the affidavits?---No. No, just a moment. I'm not going to agree with you. This particular document here, it says:

This list and its attachments was served on the defendant's solicitor on 3 October -

2000 - that is - that is obviously wrong because even though, as I say, I sent it, I don't know when Mr Griffin served it but I don't believe he served it on the 3rd. That's the only thing I can say.

Yes?---You can tell me when you - when it was served on you because I don't know.

No, but you were prepared to sign that you had?---Yep. Because I expected it would be served on the same day.

So again, you would prepare - you would sign something as a matter of fact even knowing it not to be true?---Well, I couldn't get - let that document - I could - sorry, I could not make a copy of that document without signing that piece - that particular part there and put it into the court for instance. I couldn't do it. You have to sign every single thing.

So you would - you would make a false declaration in order to get it into the court, is that what you're saying?---I don't believe that's a false declaration because I expected it to be served on the same day.

But it's clearly - well, you didn't. You've just told us that you knew that Mr Griffin doesn't work on a Friday?---Yep. All I can say is that I expected it to.

141 Mrs Frigger initially gave evidence that Mr Clavey had 'assured' her of success in the matters in which he was acting (ts 516).

Well, did he - but did he tell you at the start about whether you had any prospects, or no prospects of succeeding or not succeeding in the - - -?---After - after - after I - you know, long discussion, and giving him all the documents, and explaining about the DOCA, that was the - the number one thing was on my mind, he assured me that the opposition to the winding up would be successful, and that the stay application would also be successful, based on these kinds of grounds, that we had reasons to stay it.

142 She repeated that evidence in cross-examination:

But he never assured you of the success of the application at that time, did he?---On the first? On the first meeting? At the first one-hour meeting?

Well, ever?---He did assure me because there's numerous emails from him saying that it's going to be successful - numerous.

That it's going to be successful?---Yes. Absolutely. And not only that, you look at all his notes that he made to his staff and to himself in relation to his own research and the said that the - the application - sorry; the opposition to the winding up was very strong.

143 That evidence was implausible, which Mrs Frigger later recognised. It was given after she initially said she could not remember the meeting. While I accept Mrs Frigger might not be able to remember in detail what was discussed at the initial meeting with Mr Clavey, I do not accept she is unable to remember the meeting or what, in a general sense, was discussed. It is another example of Mrs Frigger saying whatever she thought would assist her case with little, if any, regard to the truth or what was actually said or done. It is also another example of her resorting to a failure of memory when the real situation did not suit her because it contradicted or was inconsistent with what she said happened. Ultimately, her evidence amounted to nothing more than that Mr Clavey said that the applications had merit (ts 765 - 766).

144 Notwithstanding that the DOCA described as having been further amended by a meeting of creditors held on 28 August 2009 was annexed to Mrs Frigger's affidavit of 3 March 2010, Mrs Frigger was originally adamant that she had not been provided with that version of the DOCA and that it had not been provided to Mr Clavey (660 - 664):

You swore an affidavit - this is the affidavit in - in support of the suspension application?---Correct, yes.

Yes. And the affidavit in support of the suspension application annexed as an annexure to that affidavit your prior affidavit of 3 March, did it not?---Yep, that's - - -

Do you recall doing that?---Yes.

Okay. So that the affidavit in support of the suspension application if you look on page 557 in paragraph 5 says:

I crave leave to rely on my affidavit sworn 3 March 2010. A true copy of that affidavit and its annexures are annexed hereto and marked AF2.

Do you see that?---Mm hmm.

So when we go to AF2 which is at 577, I think we get back to where we started which is your affidavit of 3 March 2010, correct?---Mm hmm.

And that affidavit itself has annexures marked AF1 through to AF26?---Yes.

And all of the annexures to the affidavit prepared by Clavey Legal for you which you swore on 3 March 2010, all of the documents were documents that had been provided by you to Clavey Legal?---But I am saying that that version of the DOCA was not what I provided to Mr Clavey because I was never given this version because there had been a material change and it was actually hidden from me because it materially affected the arguments that I was making in relation to the DOCA.

If I can just ask you to answer my question, okay? Don't jump ahead where you think it's going?---Okay.

The question I asked you was all of the annexures that were annexed to your affidavit were - were documents that you had supplied to Clavey Legal?---Except this - this version of the DOCA I did not supply to him.

145 Indeed, rather than accept that she might be wrong, Mrs Frigger went so far as to imply that a different version of the DOCA had been included by the defendant in the compilation of the defendant's book of documents:

How did it get to be an annexure to your affidavit if you didn't supply it?---Well, you know, the defendant has provided this book of documents. I didn't have anything to do with this book of documents so I don't know how it has come to be in this book of documents that's been filed in the court. But all I know is that this particular version of the DOCA was never given to me.

146 Senior counsel for the defendant came back to this issue later and the following exchange occurred:

Again, Mrs Frigger, at page 663 of the transcript you're again asked this question:

And all of the annexures to the affidavit prepared by Clavey Legal for you which you swore on 3 March 2010. All of the documents were documents that had been provided by you to Clavey Legal.

And your answer was:

But I am saying that that version of the DOCA was not what I provided to Mr Clavey because I was never given this version because there had been a material change and it was actually hidden from me.

?---It was.

Because it materially affected the arguments that I was making in relation to the DOCA.

?---Exactly. That's the point I just made.

Mrs Frigger, that answer was a statement that you had - - -?---Yes.

- - - not provided it to Mr Clavey?---Exactly, and at the time when you asked me the question I didn't remember providing it to Mr Clavey.

And when I asked you:

How did it get to be an annexure to your affidavit if you didn't supply it?

Your answer was:

Well, you know, the defendant has provided this book of documents. I didn't have anything to do with this book of documents so I don't know how it's come to be in this book of documents that's been filed in the court. But all I know is that this particular version of the DOCA was never given to me.

?---Correct.

And the suggestion you were trying to make there was that somehow in preparation of the book of documents a different DOCA had been inserted to the one that was actually in your affidavit?---Well, that's the impression that you have got.

That's exactly what you were saying, wasn't it?---And - and that is exactly my recollection of what had happened in the retainer.

You would prefer to give evidence to suggest - you are prepared to give evidence to suggest that the defendant, in providing that book of documents, provided an incorrect copy of the affidavit, that accept the possibility that you might be wrong and that, in fact, that DOCA was the DOCA you provided to Mr Clavey, correct?---No, I - you - you need to split that question up into smaller parts. What exactly are you trying to - ask me your question again, please, because - - -

HERRON DCJ: It is a long question, Mr Quinlan.

QUINLAN, MR: I will. On the last occasion you would not accept that the document that appears at page 831 in volume 3 was the document attached to your affidavit?---I would not accept it because I thought it should not have been attached.

And when you were asked to explain how it appeared as an annexure to your affidavit - - -?---Yep.

- - - your suggestion in the passage I just took you to was to imply that the defendant had changed it when they put the document books together?---Well - and that - that's the only answer I could give - - -

Yes?---because at the time - - -

So - - -?---I still say - say I finish my question or you just want to ask me questions?

Asking - you wanted me to ask you the questions one piece at a time?---All right. So ask me the second question.

So the only answer you gave at the time was, "The defendant must have done something to the documents when they were compiling their book of documents"?---No, I didn't say that. I didn't say that. I said that this particular book of documents has been complied - compiled by the defendants and I don't know how that DOCA got into the - into this book because I had nothing to do with it. Overall my answer is that particular version of the - the DOCA should not have been in my affidavit. That is the - that is the bottom line of the - the evidence that I gave and I still do - and I still stick by that.

And the question that I asked you was, you were prepared, sitting in the witness box, to imply that the defendants, in putting the book of documents together, had included a different version of the DOCA than that which appeared in your affidavit?---Absolutely, and the reason for that is - - -

Just - just - - -?---You asked me to - if I implied it and I'm agreeing with you. I did imply it.

You - you - - -?---I did imply it.

Yes?---I've answered your question.

And my proposition to you is that you are prepared to make such an allegation rather than accept the obvious point that you were wrong about it appearing in your affidavit?---No, I don't - I don't agree with that.

And, Mrs Frigger, you were wrong about it appearing in your affidavit, weren't you?---Well, I was wrong that it was attached to my affidavit but I'm not wrong in saying that it should not have been attached to my affidavit.

147 The true position, as revealed by a certified copy from the Supreme Court, was that the DOCA in the original book of documents was, without doubt, the version annexed to Mrs Frigger's affidavit of 3 March 2010.

148 When faced with the true position, Mrs Frigger again dissembled in relation to her previous version of events and her explanation was, both confusing and nonsensical. It was also in my opinion untruthful. The version of the DOCA annexed to her affidavit of 3 March 2010 referred to in her affidavit of 18 March 2010, marked AF-Z, (exhibit 1.90) prepared by the defendant, could only have been obtained by the defendant from Mrs Frigger. Because that version of the DOCA did not suit her purposes Mrs Frigger, even when it must have been obvious to her that the defendant could only have obtained a copy of the DOCA from her, accused the defendant of being dishonest by including a false copy of the DOCA in the court bundle. Mrs Frigger had recently, after the defendant ceased to act, read the DOCA and formed the view that cl 6.13 provided a basis for a set off against the obligation to refund the monies owing in consequence of the Court of Appeal judgment.

149 Mrs Frigger clearly sought to reconstruct events in accordance with how she envisaged it might assist her case.

150 In a number of instances this involved giving evidence that she had a memory of events simply because they were referred to in a document (ts 659):

And what you have done since that time and in preparation for the trial is look through the documents and you've reconstructed your memory that you must have met with him that afternoon because of what it says there? --- Correct. Absolutely. That's what I did.

Yes. Because you don't have a memory - a clear memory of exactly what you did on those days without reference to the emails that you still have from that time?---Well, not only did I read the emails when they happened back on 19 March but I, since then, in preparing for this trial, in getting discovery together, in preparing to come to the court, I have re-read the emails, absolutely. I don't deny that I haven't read any emails and I don't deny that I'm not relying for the matters that happened in the retainer because I have read the documentary evidence and on which documentary evidence I am relying on for my evidence.

152 In other respects, however, the reconstruction was more significant and involved a revision of what actually happened in light of her later reflection on the issues as she saw them.

153 For example, in relation to the DOCA, in her evidence in chief, when recounting the problems that she had had with the DOCA, she gave evidence as to what she believed the effect of cl 6.13 to be (ts 486 - 488). In my opinion it is clear from the context that Mrs Frigger was presenting those beliefs as views she held prior to retaining the defendant.

154 It later became apparent that Mrs Frigger was in fact expressing a view that she had formed recently and long after the defendant had ceased acting (ts 667 - 668).

155 Similarly, in relation to other events, Mrs Frigger tailored her evidence by reference to her selective reading of other people's records. The following exchange is telling (ts 798):

And certainly at that time, Mr Clavey was not instructed to assume the carriage of any other litigation, such as the application to terminate the DOCA that Mr Stokes had been acting on---No. He was instructed to do exactly that on the 8th.

Well, I'm suggesting to you that he wasn't and that the ------Well, I disagree with you.

--- the proceedings involving the DOCA was something to be considered, depending upon the outcome of his consideration of section 471B---No. Mr - Mr Clavey's own notes says that his current instructions were to appear on the DOCA application.

Mrs Frigger------Which, no doubt, Mr Clavey will be questioned on.

Mrs Frigger, are you deliberately tailoring your evidence based on all of the research you've done of people's notes?---Well, why shouldn't I? I've looked at what Mr Clavey wrote about that meeting and those are his notes about that meeting. He says:

Current instructions appear - appear in the DOCA application.

156 Even then, her reconstruction bore no resemblance to what the document actually said.

157 Mrs Frigger frequently claimed not to have any memory of what was said in discussions with Mr Clavey or with his employed solicitors Ms Richards and Ms Zohar. She openly conceded that she relied upon the various emails and correspondence from Mr Clavey and the defendant's file notes of telephone conversations with Mrs Frigger for her memory of what was said or discussed for her memory of what happened and what was discussed. Although I accept Mrs Frigger is not necessarily able to remember exactly what was said and discussed on each occasion she met with Mr Clavey, Ms Richards or Ms Zohar or spoke to them over the telephone, I do not accept her claim she has little or no memory of any of the discussions. In my view her claim not to remember what was said or discussed, particularly at significant times such as when Mr Clavey telephoned her at home late in evening of 11 March 2010 after his email to her earlier that evening (exhibit 1.73, page 417), was to suit her own purposes. She frequently resorted to saying she did not remember when confronted with something that she did not accept or was inconvenient to her such as when it was put to her she said Mr Lenhoff and Mr Trinick were liars.

You spoke to Sarah on the phone, on the 26th, on the Friday?---I don't remember any phone conversation to Sarah.

And you were irate that it wasn't being completed that day and you couldn't understand why it would take until Tuesday. And she told you that it was a public holiday on the Monday?---Right. I don't remember that conversation. But even if I did tell her that, if I had repeated to her what I put in my email, I never got irate with Ms Richards. She - I found her to be a really nice person and I could see that she was doing her best to help me.

And in relation to the - there was an affidavit of Mr Lenhoff that was asked for. Do you remember saying to her that his firm is a bunch of liars and that Mr Lenhoff is the biggest liar?---No, I don't remember saying that.

That was a view you held?---It's a view I hold now. Yep.

Well, it was a view you held then?---No. Well, maybe. I can't remember if I held it then but I certainly hold that view now.

And it's likely that you said that to her at the time?---No. I wouldn't.

And you said they consistently lie about service?---Service?

Yes?---God, I - I have - no. All I know is that the statutory demand had been served on me. I sent it back to Mr Lenhoff because I was not allowed to accept service. That's what I do remember about service.

And she spoke to you about the liquidators and the fact that they were saying that you were being uncooperative?---Yep.

And she said to you 'It doesn't help that there are two officers of the court saying that you're being uncooperative'?---No, I - that part I do remember.

You do - - -?---I mean, but I don't know if she said it to me in a conversation or it was in an email, but I do remember that. In fact I'm sure it was in an email.

And you said to her that 'Glenn Trinick is an outright liar and she wants to instruct Clavey Legal to pursue a claim against him'?---No, I didn't say that.

And you said that he never made a request for books and records?---No, I never said that, because he did make a request but he made it a bit later. That's all

And that - and you said that when you came back from leave he forced you and your husband - that is Mr Trinick - 'that they would be personally responsible' - that you would be personally responsible for his fees?---That's correct. He did do that, yes.

He did do that?---Yep.

And so if Ms Richards has recorded that you must have told her?---If I said it to her - you know, I did have conversations with Ms Richards. I can't recall the gist of any conversation and I can't recall telling her that in person, you know, as I say, orally, or I put it in an email. But he did - Trinick did ask us to be personally responsible for his fees.

158 In my view her recollection of what occurred is largely reconstructed from her reading of the documentation and based upon her recent construction or interpretation of the documentation. She frequently reconstructed what she said she did or believed at the time based upon her recent reading of the documentation, interpreted by her in such a way as suited her purposes.

159 She professed a lack of recollection of the relatively few telephone calls with Ms Richards in which Ms Richards said she was terse and irate (ts 773).

160 Indeed, Mrs Frigger pre-emptively indicated that she would not remember any telephone conversations, other than two which happened to be those she wished to rely upon in support of her claim:

Now, on 26 February - - -?---Mm hmm.

- - - you - after you received Ms Richards' original email, you rang her, didn't you?---I - I - you know, you're going to ask me about lots of telephone conversations. I don't remember conversation - the telephone conversations. The only ones I do remember is with Shoshanna at the end of the - when the retainer was terminated and one conversation with Mr Clavey in the middle of March. That's the ones I do remember. So you can ask me - you can go ahead and ask me about conversations, telephone conversations. I don't remember them.

But you seem to remember the ones that you rely upon, is that right?---No, because those were so important to me. That's why I remembered them. But when - when you're talking to a solicitor, when you're sending emails back and forth, when you're delivering things to them, when you're posting things to them, my memory is not that good I can remember every single telephone conversation I have had. (ts 773)

161 The selectivity of Mrs Frigger' memory was, in my opinion evident in her evidence as a whole. An example is the following exchange (ts 835 - 837):

Well, Mrs Frigger, you've said that that did not happen?---And I'm - I continue to say that. It did not happen. Not a single time did Mr Clavey ever say to me orally, 'You need to give me more money.' Not a single time.

Notwithstanding the fact that you have no independent memory of the 18th or the 19th without these documents, do you?---I do have an independent memory because when they happened, when these documents were sent to us, I did read them and that's my memory because I - I did read them. I - - -

So you - - -?---And based on that - as I say, based on that, based on that email where he says he's not going to file any applications, I took a cheque to him - either took the cheque to him for 30,000 or posted it. I can't remember what I did that day on the - on 19 March.

You can't remember what you did that day?---Well, I said I can't remember if I took the cheque in to him or if I posted it to him.

Well, do you remember reading:

I explained that to Angela yesterday. The stay application can be filed when funds are deposited into -

?---I do remember reading it. I just said to you I remember reading this email when I came in. I do remember it. I remember reading it at the time and right now I remember that I read it at the time. Is that your question? And that's my answer.

And at the time when you read it - - -?---Yep.

- - - did you say to yourself, 'That's not true'?---No, I don't say that because there were - as I said before, the - one - one week before that there was an email from Mr - Mr Clavey dated 12 March. There were numerous things in that that I didn't agree either had happened or that I - that was my view or - or et cetera. But I didn't want to make any waves, you know? If somebody says:

I explained that to Angela yesterday.

And it actually didn't happen yesterday, why would I ring him up and stir basically and say, 'Why are you saying that in your email? It didn't happen. What would I achieve by that?

I'm asking you about what you thought when you read it. You read it and you thought, 'That's not true'?---No, I didn't say - think that at all. All I know was - just a moment. All I know is that when I received this email I knew that nothing more was going to happen unless I paid $30,000.

Not asking you about that. I'm asking you about what you thought when you read:

I explained that to Angela yesterday.

And the next sentence which refers to -

- as discussed with Angela.

?---Yep.

When you read that on the 19th did you say to yourself, 'That's not true'?---No, I didn't even - I didn't even think about it because it was not important.

Well, Mrs Frigger, you say it's not important?---It's not important.

But you say this is now the third time you're saying that you read emails from your solicitor which were saying things that were not true?---I am saying that on the 18th - this is my evidence, okay, and I'll repeat it. On 18 March when I went in to - I can't actually remember under what circumstances I swore the affidavit. I think that I picked it up from Mr Clavey and ran across the road to another legal firm on St Georges Terrace and then took it back in the hope that it would all be filed that day. And then the next day you get this email saying, 'You need to pay some more money,' and that's what I did. But Mr - not - not a single time did Mr Clavey say to me, 'You need to pay me $30,000.' Never. Never.

Do you remember the answer - the question that I asked you?---Yeah, you asked me, 'What was your thoughts about him telling you:

I explained that to Angela yesterday.

And my - I didn't have any thoughts about it because it had not happened. Simple.

Yes?---Every time somebody says something to me I am not going to make a mountain out of a molehill like you're doing at the moment, okay?

No, this is - - -?---I - that's not how I operate.

You're - - -?---You know, my solicitor had asked me for $30,000. He was not going to do any more work unless I paid him. Guess what? I paid him. That's the end of it.

I'm asking you about the fact that this is now the third time you've said that at the time you received an email from your lawyer you formed the view that what he was telling you about your discussions was not true?---No, I didn't form that view at all. I didn't form the view at all. I - you know, I had more important things to do in my life than to form a view that my solicitor was lying to me. I - it was unimportant to me and to my husband. My solicitor asked me for money. I paid it.

So it's - - -?---End of story.

So it's unimportant to you that that was said, but you say - - -?---Yep.

- - - that you can actually remember reading it on the 19th?---Of course I read it on the 19th.

No, no, but you can remember reading it on the 19th?---Of course I can remember reading it on the 19th. You think I didn't read it? Is that what your question to me is?

I'm asking you what your memory is?---I read it. I read the whole thing. That's my answer. I read the whole email on the 19th.

You do not remember it?---I don't remember the email or reading it?

You don't remember reading it. You're - - -?---I remember reading it.

You're reconstructing what you (indistinct)?---No, just a moment. Just a moment. I remember reading it because it is only from this email that I knew I had to pay $30,000.

When you - - -?---No other email.

When you read it - what did you think when you read, 'I explained that to Angela yesterday'? Did you think - - -?---I didn't think anything about that. I didn't form any thoughts. I didn't form any views about it. (ts 835 - 837)

162 In examination-in-chief Mrs Frigger was taken to the email sent to her by Mr Clavey on 11 March 2010 enclosing a draft affidavit. She said she did not look at the draft affidavit that night on 11 March but woke up the next morning, looked through the affidavit and sent it back to Mr Clavey. Initially she said she could not remember whether she had made any changes but she was sending to Mr Clavey what she believed to be the final version of the affidavit. She was taken to par 47 of the draft affidavit of which there were two paragraphs numbered 47. She was asked and responded as follows (ts 548):

What's the reason that all those costs orders and - are mentioned there, other costs are mentioned there?---Well, I was trying to demonstrate to the Court of Appeal that there was a real risk that if we paid the - the moneys that we had been ordered to pay from the - from their decision, that all of these costs which we were owed we would never be able to recoup, and therefore those I thought were special circumstances to support the suspension.

163 When Mrs Frigger was later further questioned by her counsel following a query by me about whether she made changes to the draft affidavit the following exchange occurred (ts 552 - 553):

Why did you send this email back to Mr Clavey if you're going to meet him shortly afterwards on the Friday?---Well, I will answer that question by saying that the email on page 442 just has the attachment and then just has the word 'Terry', but I think the body of the email is missing and I think what would - what I would have said was 'I have made changes' or 'I haven't made changes'. That's - I can't remember if I, you know - if I had a full email that I sent it would say, if I had, you know - sorry, your Honour. It would say if I had made changes or not. I really can't remember and I can't understand why the full email is not here. But I wouldn't send something with just the word 'Terry' written on it.

HERRON DCJ: Well, if you made changes - - -?---Mm hmm.

- - - would they have been saved on your computer?---Yes, definitely, because I can't simply re-send something without downloading it first and reading it. I would have had to download it, read it, and then re-send it, and I can't re-send something unless it's saved as a file document, yes.

Then you've referred to paragraph 47, and as you've noted there are two paragraphs, and as you've noted there are two paragraphs 47?---Which - yep, wrong numbering.

Paragraph 47 is on page 452?---Yes.

And then there's a further paragraph 47 on page 453. If you go back to the affidavit sent by Mr Clavey to you on the 11th, and this is with his email, as I understand it, as 11 March and his issue about the time. But the draft affidavit sent to you starts at page 419, goes through to page 431. Is that right?---Yes. I have that open, yep. Mm hmm.

Yes, and then you go to page 428, and that has a paragraph 47 there?---Yes. I see what you mean. There is a difference, yes.

So you compare that to paragraph - the second paragraph 47 on page 453?---Yes. It's something that I have added in.

Yes?---Yep.

Well, what have you added in?---Well, it's - the first paragraph 47, which is at page 452, and I've enumerated monies I know that are already owing, and in the following paragraph starting at 47.7 I say that there are also all of these other costs that are still owing.

So the paragraph 47, which is 47 through to 47.7.7, you have added in?---I believe I have, yes, your Honour. Because I - - -

You say you believe you have. Again, I don't understand that. You either have or you haven't?---I would say that I have, yes, because as you say the - well, I say I have, definitely.

COOK, MR: You'll see actually - sorry. You'll see that there are a number of other added paragraphs in the second version of the affidavit, in the - when I call it the second version I mean the version that you emailed back. For example, there are - there's only one paragraph 37 in the first version but in the second version there are two paragraph 37s?---Yes. That's obviously something else that I have changed, yep.

And you'll see that there are two paragraph 45s and two paragraph 46s - - -?---Yep.

- - - in the second version, but only one paragraph 45 and one paragraph 46 in the first version. Are you able to say why there are these extra paragraphs in the second version?---Because I added them all in.

Yes, and after you had downloaded it onto your computer?---Yes.

164 This is a further example both of Mrs Frigger's professed lack of memory and her reconstructing what she says happened from her recent reading of the documentation. Despite it being obvious that Mrs Frigger had amended the draft affidavit and sent it to Mr Clavey by email on 12 March 2010, she was not initially prepared to accept she had made changes, and suggested the full email had not been included and that she would not have sent the email, until it was shown to her that it was obvious she must have amended the draft affidavit and sent it to Mr Clavey. Rather than properly and carefully examine the documentation and test her memory she too readily resorted to a professed lack of memory and her own interpretation of the documentation. It is a further example of the unreliability of both her memory and her credibility.

165 In her examination-in-chief Mrs Frigger frequently responded to a question of her counsel by arguing her case rather than answering the question asked of her. In cross-examination she was frequently argumentative and combative. Often she was reluctant to admit or concede what was obvious. An example is when she was taken to her affidavit of 8 February 2010 and the report as to the affairs of CAT annexed to the affidavit dated 2 February 2010. Initially she was not prepared to accept she prepared the report of affairs when it was quite obvious from the document she had prepared it (ts 616 - 618).

Do you now remember that you did swear an affidavit in relation to the winding-up application?---Well, I didn't remember that we had included winding-up application to be dismissed in this - in this matter. When I eventually came before Simmonds J, all we asked him for was the provisional liquidation to be terminated.

But you swore that affidavit on 8 February, correct?---Let me just check the date, I'll tell you. Yes, it was - it was sworn on 8 February - - -

Was it - - -?---- - - along with my husband.

Was it true?---Was what true?

Was the affidavit true?---As - as of that point in time it was, yes.

If you go to page 98 of the document in the affidavit, paragraph 29. Do you have that paragraph?---Yes.

It says:

Mrs Frigger has prepared a report as to the affairs of CAT as at 21 January 2010 and has included the special leave application as a contingent asset including the sum of $800,917 being the amount of the statutory demand, costs of the Court of Appeal and the costs of the High Court application.

Attached and marked 7 is a copy of the RATA(?), the report as to the statement of affairs. Do you see that?---Mm hmm.

And I ask you to go to that annexure which commences at page 106. Do you have that?---Yes.

That is a report as to affairs which you signed on 21 January 2010?---Yes. I did that for the liquidator, Yes.

You prepared - - -?---I do remember doing it, mm hmm.

You prepared that report of affairs?---No. It was all filled out by WHK Horwath and I just filled in some blanks. I didn't prepare the whole lot. It was sent to me by the liquidator and as - the best of my knowledge I filled it in.

Well, if you look at the statement of assets and liabilities that begin on page 108 and over to page 109?---Yes.

You prepared all of that?---I filled in the blanks, you mean.

Well, you entered that material in?---Yes, I did. That's my handwriting.

...

Look at page 108 and 109?---Well, I can only look at them one at a time. Which one would you like me to look at?

Mrs Frigger, are you being deliberately obtuse when I ask you questions?---No. Well, you said look at 108 and 109. I can only look at one at a time. Which one would you like me to look at first?

Is the handwriting in 108 yours?---Yes, it is.

Is the handwriting in 109 yours?---Yes, it is.

Did you determine that those were, in your view, the correct assets and liabilities of CAT as at the date that you prepared this document?---Just let me check when I - when I dated it. Just a moment. If I have a date on it or not. I can't remember. 2 February, Yes.

Was that statement of the assets of CAT and the liabilities of CAT true and correct?---Yes, they were, as far as I knew at the time.

You determined what to put in as the assets and the liabilities?---Well, I'm the accountant of the company and I'm also the director and shareholder so yes, that's exactly what I did.

And the assets that you've listed on page 108 include cash at bank $80,000, correct?---Mm hmm.

Now, that was $80,000 that was being held as a guarantee for BP, correct?---Yes.

Yes. It wasn't available funds, that is it had to be held as a guarantee for the purpose of the - the service stations business?---Correct.

166 Mrs Frigger also frequently failed to respond to the question asked of her by her own counsel and instead digressed into an area she wanted to give evidence about. An example is (ts 501) when in answer to a question whether an offer was rejected she said it was and then went onto say she just wanted to point out as well another matter. It was frequently necessary for her own counsel to bring her back to the question he had asked of her. An example is (ts 558) when her counsel said he did not want to ask any further questions on a particular point and Mrs Frigger started to give evidence and after she was asked by her counsel to wait for a minute she said she had not finished her evidence.

167 On another occasion (ts 549) when in examination-in-chief Mrs Frigger was being asked to explain various parts of her draft affidavit being prepared by Mr Clavey in March 2010 and was asked to explain what the reference to Ferrier Hodgson meant, Mrs Frigger, rather than answer the question asked of her, which her counsel acknowledged, instead argued her case and offer a view as to the effect of various court orders (ts 549 - 550).

168 At one stage when Mrs Frigger was being examined by her counsel about an email sent to her by Mr Clavey on 11 March she responded as follows (ts 534):

Mr - Mr Cook, can I interrupt you please? I am not admitting that this is the correct version of this email because I have another version which I want to put into evidence.

169 In summary, I find Mrs Frigger to be an unreliable, dishonest and an untruthful witness who is prepared to make unfounded and untruthful allegations against people with whom she is in dispute. She embellishes and reconstructs past events to suit her purposes. She misconstructs contemporaneous documentation to support her reconstructed account of what she says happened or was said. She is prepared to falsely represent the financial status of CAT in affidavits. She has manipulated and falsely represented the financial status of CAT to achieve her own purposes of obtaining payment of the original judgment sum and keeping the full payment when not entitled to do so, and to defeat the legitimate purposes of the litigation in which she was involved. I do not accept any of her evidence unless it is corroborated by other evidence from independent witnesses or from contemporaneous documentation.

170 I find Mr Clavey to be a credible, truthful and reliable witness. He gave his evidence in a calm, measured and thoughtful manner. He generally had good recollection of what was said and discussed with Mrs Frigger without the need to rely upon the contemporaneous documentation to refresh his memory. On those occasions when it was necessary for him to refresh his memory from the contemporaneous documentation his memory was consistent with and supported by the documentation. Unlike Mrs Frigger he did not seek to reconstruct from his reading of the contemporaneous documentation what he said happened. On occasions when he was uncertain about something he readily acknowledged that. On occasions he conceded his evidence as to his memory of what occurred may not have been accurate. An example is when he was taken to the transcript of his appearance on behalf of the plaintiffs before the master on 4 March 2010 on the winding up application. The application was adjourned. Mr Clavey subsequently wrote to Mrs Frigger by letter dated 4 March advising the matter was adjourned to 16 March 2010 at 9.15 am for mention. Mr Clavey was then taken to the transcript of the hearing before the master and it was put to him that the matter was adjourned for 14 days rather than to a specific date. Mr Clavey said that although that was not his recollection of what occurred he accepted what he advised Mrs Frigger in her letter would seem to be wrong.

171 He also accepted his evidence that his first conference with Mrs Frigger was on 22 February and that his first contact with her was when she telephoned him the day before might be wrong. When it was put to him that 22 February 2010 was a Monday, which meant Mrs Frigger must have first contacted him on the Sunday, Mr Clavey said that he was not mistaken about the sequence of events but the date of the first conference might be wrong.

172 Mr Clavey did not seek to disparage Mrs Frigger. He said that at the first meeting with her he formed the view she was a capable person and understood what was needed in terms of the evidence. He said that although it had been reported to him Mrs Frigger was rude she was not rude to him. He also accepted Mrs Frigger had a lot going on in her life and was under stress.

173 I have no hesitation in accepting Mr Clavey's evidence as reliable and where his evidence conflicts with or contradicts Mrs Frigger's evidence, I accept Mr Clavey's evidence.

174 I also accept both Ms Richards and Ms Zohar as reliable and credible witnesses. Each of them gave their evidence in a thoughtful and straightforward way. Although each of them, understandably, was unable to precisely remember what was discussed with Mrs Frigger they made contemporaneous file notes of their discussions and to the extent that they relied upon those file notes to refresh their memory of what had been discussed, I accept their memory is reliable. It was not suggested by the plaintiff's counsel they were unreliable witnesses.

175 Having made those credibility findings, I now turn to deal with and make findings in relation to, the plaintiffs retaining the defendant as their solicitor and the circumstances leading to the termination of the retainer.

Initial conference and instructions 22 February 2010

176 I am satisfied Mrs Frigger's first meeting with Mr Clavey occurred on 22 February 2010. The meeting had previously been arranged by a short telephone conversation, most likely occurring on the previous Friday.

177 I find at that meeting the following matters were relevantly discussed:

(a) Mrs Frigger asked Mr Clavey to assume responsibility for acting for the plaintiffs in opposing the winding up application and seeking a suspension of the Court of Appeal orders;

(b) Mr Clavey advised that not having set aside the statutory demands created a difficulty and required the plaintiffs to prove that the company was solvent;

(c) Mrs Frigger had with her a deed of company arrangement (DOCA) which she explained she had applied to set aside and had engaged a solicitor, Chris Stokes, to do.

178 In relation to the DOCA, I am satisfied Mrs Frigger only provided one version of the DOCA to the defendant, being that which appears as an annexure to her affidavit of 3 March 2010. That document, which describes the DOCA as having been further amended by a meeting of creditors held on 28 August 2009 was, without doubt, annexed to Mrs Frigger's affidavit of 3 March 2010. Notwithstanding this, Mrs Frigger was originally, in her evidence, adamant that she had not been provided with that version of the DOCA and that it had not been provided to Mr Clavey. Indeed Mrs Frigger went so far as to imply that a different version of the DOCA had been included by the defendants in the compilation of the trial bundle. When faced with the true position, Mrs Frigger again dissembled in relation to her previous version of events.

179 Following the initial meeting Mr Clavey, by email on 23 February 2010 forwarded a copy of the defendant's costs agreement to Mrs Frigger. In his email Mr Clavey said 'If the description of our engagement does not cover all the matters that you require our help with please let me know'. He advised he had a discussion with the barrister Paul Mendelow who declined to accept a brief in respect to the stay application but drew to Mr Clavey's attention some matters relevant to an application for special leave to the High Court against the Court of Appeal decision. Mr Clavey advised the papers left with him did not include the application for leave to appeal to the High Court nor Mr Mendelow's submissions and asked that they be sent to him. He also confirmed Mrs Frigger would provide a copy of Justice Simmonds' orders appointing the provisional liquidator. He asked Mrs Frigger to sign and return the costs agreement and in the meantime he would start reading materials provided. He also provided details of his trust account and confirmed the request for $5,000 to be paid into his trust account.

180 On 23 February 2010 by email Mrs Frigger signed and returned page 7 of the costs agreement acknowledging the agreement was nine pages long.

(a) identified the nature of the services as being to act in relation to both the application for winding up and to advise on the prospects of securing a suspension of judgment. The agreement provided that the terms of the retainer could be extended 'provided such extension or variation is recorded in writing'; and

(b) paragraph 9.5 provided 'We may cease acting for you and be entitled to remove ourselves from the court record as your solicitor if the following occur ... if the necessary relationship of trust is broken between us'.

(c) clause 1 of the schedule described the nature of the services as:

Clavey Legal Pty Ltd is engaged to appear for the directors of Computer Accounting and Tax Pty Ltd by Angela Frigger to defend an application for the winding up of that company pursuant to a statutory demand issued by Professional Services of Australia and the Executor of the estate of Martin Banning. Further, Clavey Legal is engaged to advise on that matter and the prospects of securing a suspension of judgment order and/or a variation of orders made by Justice Simmonds as to the appointment of a provisional liquidator over the company.

Clavey Legal Pty Ltd is retained on the terms of this agreement to provide general advice to the client from time to time and may be extended and or varied by the solicitor and client, provided such extension or variation is recorded in writing.

182 On 23 February Mr Clavey also informed Mrs Frigger he understood a Mareva order was made freezing the money and asked that she provide a copy of that.

183 Also on 23 February he asked both Ms Richards and Ms Zohar to assist him and sent a detailed memo to both Ms Richards and Ms Zohar allocating the tasks he asked them to perform. He asked Ms Richards to draft an affidavit listing various issues which needed to be addressed and clarified with Mrs Frigger including the need for further documentation and evidence in relation to the winding up application. He also tasked Ms Zohar with undertaking research and preparing a draft outline of submissions and list of authorities relevant to the test for whether a company is solvent.

184 In the evening of 23 February 2010 Mr Clavey sent an email to Mrs Frigger advising her he did not have all the necessary documentation to deal with the winding up application, explained the relevant law, identified issues which needed to be addressed and further information and documentation which needed to be provided or explanations given. References were made to an affidavit of the provisional liquidator Mr Kitay of 17 February 2010. Mr Clavey also made reference to an affidavit of Mrs Frigger of 16 February which in turn referred to her affidavit sworn on 8 February and advised he did not have a copy of that affidavit and urgently requested a copy. Mr Clavey recommended that given the limited time in which to deal with all of the matters it was in Mrs Frigger's best interests to also engage counsel to assist and recommended briefing John Vaughan or Gary Cobby. Mr Clavey said 'But for the shortness of time I would argue the matter myself and will do so if you prefer'.

185 Mr Clavey also dealt with the proposed stay application and recommended that Mr McCusker QC be briefed to argue the application. Mr Clavey concluded the email by asking Mrs Frigger to telephone him after 10.00 am the next day.

186 During the course of the following week Mr Clavey and Ms Zohar attended to legal research. Ms Richards, in accordance with Mr Clavey's instructions, assisted in the preparation of a draft affidavit to be sworn by Mrs Frigger in opposition to the winding up application.

187 In attending to that matter, from 24 February to 26 February, Ms Richards made a series of requests for further documents and instructions. During the course of carrying out these instructions, Ms Richards observed that Mrs Frigger was 'very difficult to deal with ... difficult, pushy, trying to say how I should do my job', (ts 1170) a matter about which she indicated she 'probably would have spoken to Terry about' and asked that she cease working on the matter.

188 By email dated 24 February Ms Richards informed Mrs Frigger Mr Clavey had asked her to assist in preparing her affidavit in opposition to the winding up application but that there were missing or incomplete documents, copies of which she requested. Ms Richards identified the further documentation she required and the issues that needed to be addressed in respect of which she sought further information or clarification from Mrs Frigger.

189 Mrs Frigger replied to that email the following morning 25 February. Mrs Frigger said she would either deliver or send the requested documentation to Ms Richards that morning. Mrs Frigger also responded to the various requests for information and clarification.

190 She asked Ms Richards to urgently write to the master to ask for a special appointment of half a day to avoid what she described as an unnecessary appearance at the master's chambers on 4 March 2010.

191 Mrs Frigger later spoke with Ms Richards over the phone and repeated her instructions for Ms Richards to write to the court seeking to have the matter listed for a special appointment. Ms Richards advised she would need to first seek the consent of the solicitors for the liquidator Holborn Lenhoff Massey and told Mrs Frigger that she was preparing for another conference and would start work on Mrs Frigger's affidavit after she had finished the conference.

192 Mrs Richards sent a further email to Mrs Frigger on 26 February referring to their meeting and confirming Mrs Frigger would provide Clavey Legal with the itemised documentation.

193 Mrs Frigger responded by email the same day either confirming the requested documentation had been sent the previous day or attaching the documentation to the email. Mrs Frigger concluded her email in the following terms:

It is therefore imperative that my affidavit is completed today, and the papers for the stay application is also completed immediately. When I spoke to Terry on Monday he stated he had the capacity and resources to get everything done this week, we are already at Friday and nothing has been completed. I will now draft an application for stay and draft affidavit in support and will send to you/Terry. I would appreciate receiving a draft affidavit by midday today, to enable me to refer to it in my affidavit for the stay. I will speak to Terry this morning about it.

194 Later that day Mrs Frigger telephoned Ms Richards in an irate mood expressing concern as to whether the affidavit in opposition to the winding up application would be finalised that week.

195 From the defendant's itemised invoice to Mrs Frigger dated 4 March 2010 I find Mrs Frigger telephoned Ms Richards on two occasions and sent four emails to Mr Richards on 26 February.

196 In the evening of 26 February by email Ms Richards sent Mrs Frigger a draft of an affidavit in her name in opposition to the winding up application requesting Mrs Frigger to review the draft and respond to various questions and advising the affidavit could be finalised the following Tuesday once the affidavit was settled by Mr Clavey. Ms Richards suggested a meeting be arranged for the Tuesday to finalise the affidavit.

198 On 2 March 2010, the following working day, Mr Clavey met with Mrs Frigger, when she came to his office to provide some further material. The meeting principally involved two matters:

(a) Mr Clavey discussed a communication he had received that day from Mr Lenhoff to the effect that Mrs Frigger was not cooperating with the provisional liquidator. Mr Clavey explained that when he met with Mrs Frigger one of the grounds for the winding up was the just and equitable ground, that is, that if there is some form of misconduct by failing to discharge her duties as a director by failing to comply with the liquidator's reasonable request for information that would work against Mrs Frigger in opposing the winding up application. There needed to be a report as to the affairs of the company signed off by the directors and Mr Clavey understood that had not been provided to the liquidator's satisfaction and there were requests for the company's books and records that had not been delivered to the liquidator. Mr Clavey viewed those as serious matters because of time limits under the Corporations Act 2001 requiring those matters to be completed. Mr Clavey explained he cautioned Mrs Frigger about complying with the request for information and asked why she had not provided it. Mrs Frigger told Mr Clavey that there was a lot of information and documents and she was finding it difficult to get all of it;

(b) Also Mr Clavey said, that as politely as he could, he tried to impress on Mrs Frigger that it wasn't appropriate for her to be overly terse or rude with his staff.

199 Mr Clavey described the meeting as a very normal sort of meeting. He acknowledged to Mrs Frigger that he understood the proceedings were stressful and difficult for her. He had formed the impression Mrs Frigger was very business-like and forthright and could be quiet direct but asked her to rein in her approach in relation to his staff. He informed her that it had been reported to him she had been rude to his staff and that it was something that he could not allow. Mrs Frigger responded by saying that she did not realise that she had been rude, did not mean to be rude and she would be mindful of it.

200 By email on 2 March 2010 at 9.04 pm Mr Clavey sent the winding up application to Mrs Frigger identifying additional documents he required and confirming a meeting with Mrs Frigger at 10.30 the following morning.

201 On 3 March 2010, Mrs Frigger swore the further affidavit in opposition to the winding up application, which, with annexures, was 317 pages in length. The affidavit was filed and served the same day together with an outline of submissions.

202 On 4 March 2010 Mr Clavey appeared before Master Sanderson at the return of the application for winding up and sought that the matter be adjourned to a special appointment.

203 In the course of that appearance, following an enquiry from Master Sanderson, Mr Clavey advised that he had been instructed that the special leave application filed by CAT had been listed for 23 April 2010. That instruction came from Mrs Frigger during the course of the hearing itself. That instruction was confirmed in writing by Mr Clavey later that day (exhibit 1.56).

204 However, the instruction provided by Mrs Frigger was not correct and the special leave application had not been listed for 23 April 2010. By email the following day, 5 March 2010, Mr Lenhoff wrote to the master's associate advising that enquires made of the deputy registrar of the High Court revealed that the leave application had not been listed for 23 April 2010 and that as far as the deputy registrar was aware there had not even been a direction from the court that the matter be listed at all. Mr Clavey forwarded that email to Mrs Frigger later that morning seeking her advice for 'the basis for your instruction that the special leave application has been listed for 23 April 2010'. Mrs Frigger responded shortly afterwards advising Mr Clavey that at the time of filing the application for a stay in the High Court she spoke several times with someone called Daniel who informed her that the special leave application would not be listed in March 2010 but probably in April 2010.

205 Mrs Frigger was cross-examined about that exchange of emails. As Mrs Frigger's response revealed, she had not been informed that the matter was listed for 23 April 2010 but referred only to a telephone conversation to the effect that it would be listed 'probably in April 2010'. When Mrs Frigger was pressed about this matter in cross-examination she reacted angrily and aggressively. In the end, reluctantly, she accepted she only assumed the application for special leave would be listed in April and on that basis told Mr Clavey the date was 23 April 2010. The exchange reveals Mrs Frigger's indifferent attitude to telling the truth and how she is prepared to misrepresent the facts if she thinks it will assist her (ts 792 - 794):

your response was:

Dear Terry, at the time of filing the application for a stay in the High Court I spoke several times with somebody called Daniel who informed me that the special application would not be listed in March 2010 but probably in April 2010. This is because only Brisbane applications were listed for March 2010. When I later spoke to Ms Cheetham she did not tell me that the matter would not be listed at all. We did not discuss the listing of the matter but only my application for a stay.

Do you see that?---I do.

So in fact, when Mr Clavey asked you what the basis for your instruction that the special leave application had been listed for 23 April 2010 your response revealed that, in fact, you had not been told that it was listed for 23 April 2010, had you?---No. Daniel told me it had been listed for April 20, 2010.

That's not what that email of yours in response says?---Because he said it would probably be listed in 2010.

It says:

But probably in April 2010.

?---Yes. And?

That's a far cry from being listed - - -?---Jesus Christ.

- - - for 23 April 2010, which you - - -?---Yes.

- - - instructed Mr Clavey - - -?---Exactly.

- - - to tell Sanderson M?---Exactly. I did. And those were - and that is what was - I was led to believe, that it was going to be listed in April 2010.

Where did the 23rd come from?---He told me the 23rd because - no, sorry, sorry. I'm sure Daniel told me the 23rd, but not only that, if you look on the High Court website they list the dates for all the special leave applications.

So you went and looked on the website for what the date of special leave applications in April of that year was?---Quite - for - for - yep.

And because somebody at the registry had said it would not be listed in March but probably in April - - -?---Yes.

- - - you then concluded it was listed for 23 April?---Exactly. I did.

But no one ever told you it was listed for 23 April?---Daniel told me.

Well - - -?---Yes. And in fact, let me - just - just a moment. I think even Daniel is wrong. It was someone I had - I got the name wrong. It was someone else. And I think later on in - in stuff that I wrote, it was another name. It was another - the name it was - was wrong. Daniel was wrong. But he had told me - the person who I had been dealing with, because it was a person in the High Court who had helped me to put together the application for a stay in the High Court and I had asked him when do you think this is going to be listed for a hearing and he said to me, the Perth applications are being listed in April. That's what I - I assumed, that it would be listed, because nobody had ever told me that our hearing - sorry, our application would not get a listing at all. And he said - in fact, ours had been hanging around now such a long time that it most probably would be listed in April.

Well, the truth is what you said in part of your answer, you assumed. Correct?---Look, you - you continue on with this truth and falsity. If I - if somebody tells me that something is going to happen in April 2010, what's the problem with me telling my - my solicitor that that is going to happen? And if it later turns out wrong, who cares? You're the only one who cares, Mr Quinlan. You're the only one. All right. Who cares?

Is that the way that you spoke to Mr Clavey's staff, Mrs Frigger?---No, I did not. I'm saying it to you because you're constantly telling me the truth of this and the truth of that and I'm getting sick of it. If - if the High Court told me that the matter was going to be listed in April I have every right to tell Mr Clavey that is what is going to happen.

Because you know, don't you, that precisely the same thing happened on 28 April, didn't it?---On 28 April?

Yes. On 28 April, when it came on before Sanderson M again - - -?---When Mr Dutton was representing me?

Yes. Again, you - - -?---No, no, no, no, no.

Listen to me?---The same thing didn't happen so don't even go down there.

HERRON DCJ: Mrs Frigger - - -?---Sorry, your Honour.

Listen - - -?---Yes.

- - - to Mr Quinlan's questions, please.

QUINLAN, MR: On 28 April - - -?---Mm hmm.

- - - you told Mr Dutton that it was listed for 28 May, didn't you?---And it was. It was.

And during the hearing they adjourned, called the registry and confirmed that it had not been listed?---But in fact it was. There was a big mess up that day but it was and it was heard on 28 May, so I was right all along.

Now - - -?---Do you want to continue on with that or not? No. Of course not. Sorry.

Do you think you had a win there? Is that why you said that to me then, Mrs Frigger?---Well, because you're constantly trying to say that if I say something it's false. Daniel had told me, and actually I - it wasn't Daniel. I can't remember his right name, but it was a gentleman who had helped me and he had said that it was probably going to be listed in April and I told Mr Clavey to tell that to the master because there was questions being asked as to when this High Court application was going to be resolved.

And you took 'probably listed in April' to mean is listed for the 23rd?---Yep. I did.

206 On 4 March 2010 the winding up application was listed for directions only on 16 March 2010. At that time, it would appear that Master Sanderson ordered that PSA and Banning file submissions within seven days and Mr and Mrs Frigger within seven days thereafter, although there is some uncertainty in this regard as PSA's and Banning's submissions were in fact not provided until 16 March itself.

207 In any event, the original proposals for submissions referred to on 4 March 2010 were overtaken by the directions hearing on 16 March 2010.

208 In his letter of 4 March 2010 (exhibit 1.55) advising Mrs Frigger of the outcome of the hearing in master's chambers Mr Clavey advised the master had requested that the parties be in a position to provide their unavailable dates for a special appointment in April, May or June 2010 at the mention hearing on 16 March. He also confirmed that Mrs Frigger would provide all the documents that had been filed in COR 2 of 2010 to be able to identify further evidence that would support an argument that PSA's winding up application was an abuse of process brought for the purpose of thwarting the High Court appeal. Mr Clavey also advised he would complete the draft application for a stay of the Court of Appeal judgment suggesting he meet with Mrs Frigger on Monday, 8 March.

209 By email dated 5 March 2010 Mr Clavey forwarded to Mrs Frigger a copy of a letter from Freehills, the solicitors for the provisional liquidator of CAT, Mr Kitay, together with a copy of a letter from Mr Kitay to Mrs and Mr Frigger of 4 March 2010 which alleged Mrs and Mr Frigger had still not complied with their obligations to make available to the provisional liquidator the books of CAT. In his email Mr Clavey advised that non-compliance with the provisional liquidator's request would not help the application to oppose the winding up of CAT and that if ASIC became involved that might have consequences if Mrs Frigger was disqualified from being a director of a company. Mr Clavey noted he was not instructed to advise on those matters but said he thought it was in their best interests to be aware of the potential consequences and recommended they seek advice or work with Mr Kitay.

210 On 8 March 2010 Mr Clavey met with Mrs Frigger for the purpose of discussing the suspension application. The meeting lasted for approximately three hours and ranged over a number of matters, including whether s 471B of the Corporations Act obviated the need for the suspension application. Mr Clavey prepared a memorandum that day (exhibit 1.63) identifying his current instructions which included that 'subject to 471B advice, either bring stay application or proceed with application to vary or declare DOCA terminated' which I accept accurately records the matters discussed at the meeting and the extent of his instructions.

211 In particular I find that, as Mr Clavey's note and his evidence make clear, at the meeting of 8 March 2010 Mr Clavey was not given, and did not accept, instructions to take over the application concerning the DOCA, which involved different parties and had been brought by another solicitor acting for the plaintiffs, Mr Stokes. Mr Clavey also gave evidence, which I accept, that the meeting started off by dealing with the issue of getting the documents which Mr Kitay the liquidator had requested and that Mrs Frigger reiterated to him that she was stressed and not well and that there were lots of documents that had to be gone through and she just could not get to it.

212 Mrs Frigger said in her evidence that on 8 March 2010 she gave Mr Clavey instructions to progress the termination of the DOCA, and that he accepted those instructions. I reject her evidence. In particular that evidence:

(a) is inconsistent with the plaintiffs' pleaded case, which was that the DOCA instructions were accepted by the defendant on 12 March 2010 (the following Friday);

(b) the evidence is inconsistent with Mr Clavey's evidence; and

(c) the evidence is inconsistent with the contemporaneous note.

213 By email on 9 March 2010 Mrs Frigger sent Mr Clavey a copy of an application for a stay in CACV 76 of 2008 which she had drafted in which she proposed, inter alia, an order:

The judgement [sic] of 23 October 2009 and orders of 7 December 2009 be stayed pending the proceedings in the High Court of Australia and pending the resolution and taxation of all legal and enforcement costs between the parties.

214 Shortly afterwards Mr Clavey by email to Mrs Frigger acknowledged receipt of her email and advising he should have settled her affidavit by 2.00 pm. Mr Clavey did not forward Mrs Frigger a draft affidavit on 9 March and continued working on the draft affidavit.

215 On 11 March 2010, Mr Clavey sent a draft of the suspension affidavit by email at 7.01 pm, in which he:

(a) also communicated the terms of an offer made by Mr Lenhoff; and

(b) advised that he would be inspecting Holborn Lenhoff Massey's documents the following morning.

216 Mr Clavey said that after he sent the email on 11 March he telephoned Mrs Frigger that evening. He told her that in his view the suspension application was useful to aid the opposition to the winding up and recommended that he be instructed to proceed with it. That was in the context of having earlier discussed with her that s 471B of the Corporations Act might apply but he had reversed his thinking on that.

217 In response he received a firm instruction from Mrs Frigger not to proceed with the stay application until they had a listing date for the winding up application. He said he was concerned about delaying making the suspension application 'knowing that we've already got our foot in the door on the winding up application' which might present another issue that they would have to address. He explained to her he did not think it was in her interest to delay and it was necessary to get on with the application.

218 He also outlined the settlement proposal from Mr Lenhoff but Mrs Frigger was quite emphatic that she was not going to settle. He asked Mrs Frigger to read the email and think about it.

219 In her evidence Mrs Frigger said that when Mr Clavey telephoned that night he said to her 'You should consider and see what you think about the offer'. He also told her to have a look at the draft affidavit he had sent and make any changes or let him know if she did not want to make any changes and subject to that the affidavit was ready to be sworn. Mrs Frigger said she did not read the email or the draft affidavit that night. She did not read them until the next morning. She said Mr Clavey said to her that he had sent her the draft affidavit by email and had received a verbal offer from Mr Lenhoff and to consider both of them and let him know. It was not a long conversation.

220 Mrs Frigger denied there was any discussion about the stay application and not proceeding with the application. They did not discuss making a tactical decision not to proceed with the stay application. All that was discussed in a brief conversation was that Mr Clavey had sent Mrs Frigger a draft affidavit and an offer from Mr Lenhoff and to check it out and let him know what she thought.

221 In his email to Mrs Frigger in which he told her he had arranged to inspect Holborn Lenhoff Massey's documents to identify what documents he may need to address because he had not seen them, Mr Clavey explained that one of the matters he raised before the master on 4 March was that he did not have the documents relied upon by the applicant in the winding up application and he needed to see what that material was to consider whether it affected Mrs and Mr Frigger's position and whether it was necessary to make additional submissions.

222 He did not speak about the need to inspect the documents when he telephoned Mrs Frigger on the evening of 11 March and the first notice he received in relation to that advice was when his personal assistant (PA) told him the next morning Mrs Frigger had phoned and left a message he was not to inspect the documents and if he did he would not be paid for it.

223 He then received an email from Mrs Frigger on 12 March 2010 confirming her instructions that Mr Clavey was not to inspect the documents.

224 That instruction was confirmed in Mr Clavey's contemporaneous email.

225 I accept Mr Clavey's evidence regarding what was discussed in that conversation.

(a) Mr Clavey received a firm instruction not to proceed with the suspension application until they had a listing date for the winding up application. Mr Clavey responded that he did not think it was in Mrs Frigger's interest to delay filing the suspension application; and

(b) Mr Clavey outlined the settlement proposal and Mrs Frigger was emphatic that she was not going to settle. Mr Clavey asked Mrs Frigger to read the email and think about it.

227 I reject Mrs Frigger's evidence to the effect that neither of these matters occurred. In particular:

(a) the evidence is inconsistent with Mr Clavey's account of the telephone conversation;

(b) Mr Clavey's account of the telephone conversation is corroborated in every respect by his email the following day (Friday 12 March 2010);

(c) in relation to the settlement proposal, Mr Clavey's account is consistent with Mrs Frigger's attitude to Mr Lenhoff and settlement generally; and

(d) Mrs Frigger's account of events, and response to the email of 12 March 2010, was inherently incredible. That is, her evidence amounted to the suggestion that while Mr Clavey had (in her view) wholly misrepresented his instructions, she was entirely unperturbed by that fact.

228 Mr Clavey and Mrs Frigger met that afternoon (Friday, 12 March 2010) for the entire afternoon. The meeting was intended to deal with the suspension application affidavit but, in Mr Clavey's words, 'went completely off rails'.

(a) Mr Clavey's instructions to proceed with the suspension application were renewed, which instructions were expressly confirmed in writing the following business day; and

(b) Mrs Frigger asked Mr Clavey to take over the DOCA Application. Mr Clavey, declined, but indicated he was prepared to provide a second opinion in relation to it (ts 1044):

[W]hat discussion, if any, did you have with Mrs Frigger at that time in relation to your role concerning the DOCA application?---Yep. Mrs Frigger at that stage asked me to take over that matter and I declined. I said I had enough to do as it was with dealing with the winding-up and the suspension application but I was prepared to look at the DOCA 445D issue and provide a second opinion on it. I didn't have the documents in the DOCA termination proceeding, if there was one. I just had the DOCA.

You just had the DOCA?---Yeah.

And what about the application itself or the affidavit in support of the application to terminate the DOCA?---No, I didn't have those.

Did you ever receive those?---No.

230 The limited nature of these instructions was confirmed in Mr Clavey's email of 15 March 2010 (exhibit 1.80).

...

Further to our meeting held last Friday, I confirm that you have now instructed me to lodge the application for a stay of the appeal. You have further asked me to expand my current instructions to consider the merits of your current DOCA challenge and the grounds upon which the DOCA challenged should be made. I have expressed a preliminary view that the condition precedent point raised by your former solicitor seems to lack merit, because the actual condition relied upon was a condition subsequent to the DOCA. I am instructed to consider whether there are merits in pursuing that litigation under sections 445D (d); (e) and (f) of the Corporations Act.

...

Finally, I need you to confirm the extension of my existing cost agreement to cover the advice to be provided with respect to the DOCA in writing. An e-mail by return will suffice.

231 In this regard, while Mrs Frigger was initially insistent that Mr Clavey had accepted instructions to take over the progress of the DOCA application, she ultimately agreed that his acceptance of instructions may have been limited to giving a further opinion (ts 819):

And in fact, in relation to the DOCA application what he said he would do is have another look at it to give you a second opinion?---He may have said that to me. Yep.

That he wasn't going to take it over but he was going to look at it to see whether or not, in his view, there was a basis for proceeding with that application?---Yep. He probably said to me. Yep.

And that's probably the way it was said?---I can't remember. You know, I'm - I'm useless at remembering conversations and telephone - I just don't, but I know that I asked him to do the DOCA. He said, yeah, he would consider it. He would do it. Well, whether he considered it or whether he would definitely do it, it was - it was in a state of flux. There was no - there was no specific yes, I'm going to run with it. I'm going to list it for a hearing. That never happened.

No?---But I wanted it to happen.

But the most - - -?---Now, those are my instructions are to him.

The most - - -?---Please would you help me with the DOCA application.

The most he said he would do at that point was that he would look at it to give you another opinion. Correct?---Well, I - I - well, if he did say - okay. He may have said that. Yes. He may have said that.

232 Also in his email of 15 March 2010, Mr Clavey requested a further $30,000 into trust on account of fees and anticipated fees. Such a request was consistent with clauses 5 and 9.3 of the costs agreement.

233 An itemised list of the basis for the request was provided by email the following day, on 16 March 2010.

234 The same day (16 March 2010) Mr Clavey and Mrs Frigger corresponded in relation to his views as to the appropriate orders to seek in the suspension application. In particular Mr Clavey advised by email:

In my opinion, seeking a stay until all costs orders have been finalised in several proceedings will prejudice your prospects on this application. The proper request is for a stay of the Appeal Judgment until the High Court appeal has been determined.

235 Mrs Frigger responded the following day (17 March 2010), inter alia:

The very reason I am asking for a stay is that both PSA and the Estate are bankrupt. If they owe CAT monies in other proceedings then I will be back in the same position I was when the Court of Appeal judgment was handed down. The Court of Appeal can simply say the stay is only until the High Court applciation [sic] is resolved. If we don't ask for it, we won't get it. So I prefer to keep the application as it is.

236 Ultimately, Mr Clavey prepared the application in the terms that he considered appropriate. In settling the final form of the application Mr Clavey settled the application in the form that he considered to be in Mrs Frigger's interests and in the form that he considered to be appropriate. The application sought 'an order to suspend the enforcement of all of the Court of Appeal's orders made on 23 October 2009 and 7 November 2009, pending appeal to the High Court, pursuant to section 15(1)(a) of the Civil Judgments Enforcement Act'. Leave was also sought pursuant to the Corporations Act for Mrs Frigger to bring the application on behalf of the judgment debtor as a director.

237 The affidavit in support of the application was finally settled and sworn by Mrs Frigger on 18 March 2010. It was also a substantial affidavit being, with annexures, 458 pages.

238 On that day (18 March 2010) Mr Clavey spoke to Mrs Frigger requesting that the earlier requested funds be made available and indicated that he could not file the application until those funds were in trust. I accept Mr Clavey's evidence in that regard, which is corroborated by his email to Mr Frigger the following morning. I reject Mrs Frigger's evidence to the contrary as I do also in relation to her evidence as to her response to the email to Mr Frigger. Mrs Frigger said that Mr Clavey did not explain to her on 18 March that he could not file any applications until his request for additional funds in trust had been received. Unconvincingly, Mrs Frigger said that although Mr Clavey did not say to her she needed to pay him $30,000, she thought it was unimportant that he said he had explained that to her when he had not and she just paid the $30,000 because Mr Clavey had told her he was not going to do any more work unless she paid him (ts 834 - 838).

239 Upon receipt of the funds, Mr Clavey finalised and filed the suspension application accompanied by a covering letter seeking an early hearing date. The application was filed on 23 March 2010.

240 Also, in that same week, by email on 22 March, Mrs Frigger requested that Mr Clavey file a notice of appointment in and attend on the relisted freezing orders hearing in CIV 2265 of 2006 in relation to Mr and Mrs Frigger personally. In her email Mrs Frigger said she would need to spend some time with Mr Clavey to go through the directions she sought on 1 April 2010.

241 Mr Clavey said he did not remember if he saw the email on that day but did remember having discussions with Mrs Frigger about his availability to deal with the matter on 1 April. He informed Mrs Frigger he was not available but he might be available if it could be dealt with at a later time or even an earlier time but he did not know enough about it. He offered to facilitate an adjournment. He told Mrs Frigger to seek an adjournment and negotiate that with Mr Lenhoff but Mr Lenhoff said he would only deal with Mr Clavey (In his letter to Mrs Frigger on 30 March Mr Clavey wrote:

I was informed by Mr Lenhoff that you requested by e-mail that the 1 April appearance be vacated and he informed me that he preferred to deal with me.)

242 Mr Clavey then had a discussion with Mr Lenhoff who indicated he would first need to speak with counsel but was amenable to having it adjourned for a short period of a week.

243 Mr Clavey also telephoned a barrister, David MacLean, who said he was available to appear on 1 April and was on standby if need be. Mr Clavey confirmed his advice in an email to Mrs Frigger on 26 March 2010.

244 In the morning of Thursday, 25 March 2010 Mrs Frigger sent an email to Mr Clavey attaching documents relevant to the freezing order. In that email she referred to 'our discussions yesterday'. She also said she would deliver to Mr Clavey's office the next morning the affidavits they had discussed. The subject description of the email is 'Discussion 24-3-10' (exhibit 1.100).

245 In a later email sent in the afternoon of the same day, 25 March 2010, (exhibit 1.101) with the same subject heading (except the date description is 24/3/2010), to Mr Clavey, Mrs Frigger refers to 'our meeting of the above date' and sets out various matters which she said Mr Clavey agreed to attend to. I will come back to those matters shortly. However, from the exchange of email correspondence I infer there was a meeting between Mr Clavey and Mrs Frigger on Wednesday, 24 March 2010 in which various matters were discussed in relation to the hearing on 1 April 2010 for the freezing orders application. The basis for this inference is further supported by Mr Clavey's later letter to Mrs Frigger of 30 March 2010, which refers to a meeting on 24 March 2010.

246 After Mr Clavey sent the email of 26 March to Mrs Frigger an agreement was reached with Mr Lenhoff that the hearing on 1 April, which was the following Thursday, would be adjourned by consent and that it was necessary to prepare a minute of consent orders. Mr Clavey then tasked Ms Zohar with preparing a minute of consent orders and finalising arrangements to adjourn the hearing on 1 April.

247 By email in the evening of 29 March 2010, the following Monday, Ms Zohar advised Mrs Frigger of her progress in relation to having the hearing adjourned. She told Mrs Frigger she would let her know the next morning if they were able to file a signed minute of consent orders moving the hearing from 1 April to either 9 or 16 April 2010. She also noted that otherwise Mr Clavey would brief a barrister to appear on Mrs Frigger's behalf on the Thursday.

248 The following day (30 March 2010) Ms Zohar took various steps to arrange the consent order.

249 As events transpired, the organisation of the consent order proved to be quite difficult, having regard to the requirements of the court and each of the different parties. This included the fact that there were a number of changes to the minute of consent orders suggested throughout the day, which required Ms Zohar to make approximately 20 telephone calls. Ms Zohar made contemporaneous notes of her telephone attendances on Mrs Frigger that day. In her evidence Ms Zohar confirmed the contemporaneity and accuracy of each of her file notes.

250 In addition, Ms Zohar could recall significant details of the conversations, including the conversations at 2.55 pm and at 3.30 pm.

251 In relation to the first conversation (at 2.55 pm) Ms Zohar's evidence, consistent with her note, was as follows (ts 1184):

And can you just tell us what you independently remember about what happened in that conversation?---I remember I wanted to have the order signed so that the hearing could be adjourned and I told Mrs Frigger that she needs to sign it and I need it back. And she started me asking me about these other issues that I wasn't too sure about and I said that all that I'm working on are these orders and we need to do this to adjourn the hearing and she got very upset and started to raise her voice and she ended up screaming at me over the phone, saying that why hadn't Terry done this and why hadn't it been done, it wasn't good enough.

And how did that telephone conversation end?---She hung up on me.

252 In relation to the conversation at 3.30 pm Ms Zohar, consistent with her note of the conversation made that day, gave the following evidence (ts 1184 - 1185):

What do you specifically remember about that conversation independently?---I remember that Mrs Frigger had calmed down a lot and that she was talking to me again. She wasn't - she wasn't screaming at me and she was very concerned about those other matters and she wanted - she wanted Terry to do something about them. But all I was worried about is that I wouldn't get this adjournment which was important, so I was trying to explain that she needed to sign the orders to get the adjournment. And then I remember that she said that, you know, it wasn't - she wanted Terry to deal with these other matters and that he had misled her because he said that he could argue the matter on 1 April, and that he'd misled her by saying that. I thought that was quite - I thought that was a concern, so I remember it.

253 Ms Zohar was cross-examined in relation to the conversations, and in particular, her evidence that Mrs Frigger had said that Mr Clavey had 'misled her' and that she thought Mr Clavey was going to argue the matters on 1 April 2010.

254 Ms Zohar was both steadfast and measured in her recollection of the accuracy of that conversation and confirmed, on a number of occasions, that she remembered that comment 'very clearly'.

255 By contrast, Mrs Frigger denied having said that Mr Clavey had misled her or that she screamed at Ms Zohar. She stated that she certainly did not shout angrily at Ms Zohar or that she had hung up on Ms Zohar. She also stated that she did not say she was upset because Mr Clavey had misled her.

256 Importantly, however, Mrs Frigger accepted that if she had made those statements it was completely unacceptable and would demonstrate a complete lack of trust between her and Mr Clavey:

[Y]ou told Shoshanna you were upset because Mr Clavey had misled you?--- I did not say that.

And you accept that that would be a completely unacceptable thing for you to say?---Absolutely.

And that it would demonstrate?--- - - - it's a very serious thing to say about anybody.

It would demonstrate a complete lack of trust between you and Mr Clavey?---Absolutely.

257 Mrs Frigger's evidence, which was in conflict with that of Ms Zohar, was not corroborated by Mr Frigger, when he gave evidence. Indeed, Mr Frigger gave evidence that when he discussed Mr Clavey's letter of 30 March 2010 with Mrs Frigger 'my wife said she raised her voice':

Your wife accepted that she had raised her voice with Shoshanna?---Yeah, raising her voice, you know, it's---that's---that's not something which is a -a problem, I think.

258 I reject Mrs Frigger's evidence in which she denied she accused Mr Clavey of misleading her in their telephone conversation. I have no hesitation in preferring the evidence of Ms Zohar. I am satisfied Mrs Frigger did scream and shout angrily at Mrs Zohar, hung up on Ms Zohar in an enraged state and accused Mr Clavey of having misled her.

259 In cross-examination Ms Zohar said that Mrs Frigger's statements were 'surprising' in light of the purpose of the adjournment does not in my view detract from the likelihood that Mrs Frigger made them. That Mrs Frigger's complaints about Mr Clavey were to Mrs Zohar, surprising is consistent with the manner in which Mrs Frigger is prepared to behave when angry by attacking the character of people with whom she is in dispute and making unfounded allegations against them.

260 In cross-examination Mrs Frigger was taken to her letter to Mr Clavey of 6 April 2010 (exhibit 1.123) in which she alleged a staff member, clearly referring to Ms Zohar, 'had commented that his Honour Simmonds J and his associate are stupid and don't know what they are doing and it must be the first time in history that members of a company were forced to sign the orders'.

261 Mrs Frigger maintained that Ms Zohar did say that to her. In her evidence-in-chief, Ms Zohar said that Mr Clavey asked her whether she made the comments in par 2 as alleged by Mrs Frigger and told Mr Clavey she did not say that. She confirmed in her evidence she did not make those comments.

262 Ms Zohar was not cross-examined in relation to that allegation. It was an entirely unfounded and scandalous allegation made by Mrs Frigger and highlights, not only how indifferent to the truth is Mrs Frigger, but how readily she is prepared to disparage the character of others.

263 Ms Zohar reported Mrs Frigger's behaviour to Mr Clavey, including Mrs Frigger's accusation that Mr Clavey had 'misled' her.

264 On the basis of Mrs Frigger's behaviour, Mr Clavey considered that the relationship of trust and confidence necessary to maintain the solicitor - client relationship had broken down and that he had an ethical obligation to end the retainer (ts 1061 - 1062):

And what did you mean by that?---Well, to me based on that conduct and what she had said I formed the view that Mrs Frigger didn't trust us, and I felt that I had an ethical obligation to end the retainer.

And why did you consider you had an ethical obligation to end the retainer?---Well, my view is that if the client doesn't trust the solicitor and the solicitor is aware of that that it could give rise to conflicts of interest because you all of a sudden might start acting in a way that is protective of your position and not advancing your client's position.

And what was it that caused you to form the view that the client didn't trust you?---There was a concern about the number of phone calls that Shoshanna had made in relation to securing the consent of parties. Even though Shoshanna had spent the time it didn't mean we'd bill it, but it indicated to me there was a concern that there was an issue regarding costs. The aggressive nature of what had been reported to me indicated that she was very unhappy with us, and finally to say to my staff that I had misled her - because the allegation of misleading related to my ability to attend on 1 April and argue the matter in circumstances where I had never said that. So I formed a view from that conduct that Mrs Frigger did not trust us and the relationship of trust and confidence between the firm and her had broken down.

265 The reasons expressed by Mr Clavey for terminating the retainer accord with those he communicated at the time in his letter to Mrs Frigger of 30 March 2010 (exhibit 1.117).

266 In cross-examination it was put to Mr Clavey that he did not terminate the retainer on the basis there was a breach of trust but terminated it for a number of reasons which included that he was 'largely sick of Mrs Frigger', which he rejected, and that he wanted to protect his staff, with which he agreed but said 'bad behaviour on the part of the client was not the reason for the termination' (ts 1155). It was also put to Mr Clavey that another reason for terminating the retainer was that the proceedings had become complicated and seemed to be never-ending which Mr Clavey rejected as a reason for terminating the retainer. It was further put to Mr Clavey that a reason for terminating the retainer was that Mr Clavey did not need Mrs Frigger's money which was rejected by Mr Clavey as a reason for terminating the retainer.

267 Finally, it was put to Mr Clavey that knowing Mrs Frigger was suffering from stress, which Mr Clavey accepted, he should have taken that into account in assessing whether he should have terminated the retainer. Mr Clavey said he did take that into account but the central issue remained that there was a very strong indication that Mrs Frigger did not repose any trust in either him or his staff.

268 I have no hesitation in accepting Mr Clavey's explanation that the reason for him terminating the retainer was because he formed the view there was a breakdown in the necessary relationship of trust between he and Mrs Frigger. I accept that is the only basis upon which Mr Clavey decided to terminate the retainer.

269 The following day (31 March 2010), Mr Clavey spoke with Mr Frigger on the telephone who apologised for Mrs Frigger's conduct and asked Mr Clavey to reconsider his position. Mr Frigger confirmed in his evidence that he said that he (Mr Frigger) was 'sorry if this has happened'.

270 Mr Clavey did agree to reconsider his position on 31 March 2010, until his assessment of the breakdown in trust was confirmed by Mrs Frigger's behaviour on 31 March 2010 (ts 1066 - 1067):

Right. What happened then?---Mrs Frigger telephoned me.

And what was the substance of that telephone conversation?---This - my memory of this is it's about 1.50, just before 2 o'clock, and Mrs Frigger said to me that she had spoken to David McLean and that he was prepared to take a direct brief from her and that she would instruct him. At that point I'd just gotten off the phone from David McLean where he had said to me that he wouldn't accept a - a brief directly from the client, that it'd have to come through me. So I was - I - I tried to explain to Mrs Frigger that barristers don't take direct briefs often and David had indicated to me that if he were to be engaged it'd have to be through my firm. At that point Mrs Frigger got angry and said to me, 'You're acting unprofessionally'. And she said it in a very angry way. 'You're unprofessional. You're acting unprofessionally'. Now, at that point that just indicated to me that my judgement the day before regarding trust and confidence was right. And I had not said I would take on or renew the engagement and I simply said to her, 'Well, you've made my decision very easy. I will not take any further instructions from you'.

271 I reject Mrs Frigger's denial that she said that Mr Clavey was acting unprofessionally. I accept Mr Clavey's evidence the conversation occurred as he explained. In particular, I am satisfied Mrs Frigger became angry and accused him of acting unprofessionally. It is consistent with how Mrs Frigger previously acted, particularly when angry, when she was dealing with Ms Zohar.

272 Following the termination of the retainer, the defendant did not claim a lien over the plaintiffs' files.

273 As at the date of the termination (30 March 2010) there were over two weeks remaining until the hearing of the suspension application (16 April 2010) and four weeks remaining until the hearing of the winding up application (28 April 2010).

274 Notwithstanding Mrs Frigger's evidence to the contrary, the plaintiffs in fact had no difficulty appointing new solicitors. Mr Dutton was engaged on the Easter Monday public holiday, after only one business day had passed following the termination of the retainer.

275 Shortly thereafter Mr Cobby, a barrister, was consulted. On 8 April 2010, Mrs Frigger advised the defendant that Mr Cobby was engaged.

276 On 8 April 2010, Mr Clavey offered to speak with the new solicitors to facilitate transfer of the matters, at no charge. That offer was never taken up.

277 Mr Dutton and Mrs Frigger met with Mr Cobby on a number of occasions, who was prepared to act. Mr Dutton said in his evidence, which I accept, that it was Mrs Frigger who chose not to have Mr Cobby act (ts 1011):

Now, concerning Mr Cobby, you and Mrs Frigger met with him on more than one occasion?---I think it was about two or three, yes.

And in those matters you discussed the particular applications which were then looming, as it were?---Yes.

And his ability to be instructed to appear in those matters?---Correct.

And do I understand your evidence correctly that while Mr Cobby was prepared to act, Mrs Frigger took the view that she didn't ultimately want him to act?---That's correct.

So that insofar as there was a - insofar as Mr Cobby didn't end up appearing on any of those occasions, from what you observed it was because Mrs Frigger said she didn't want him to?---Essentially.

Do you remember the - any advice that Mr Cobby gave in relation to the - the defence or prosecution of any of the actions or applications that were then on foot?---It would be very vague and couldn't be specific but all I - so the answer to your question is no, I can't state specifically and categorically.

278 I accept that she met Mr Cobby and that in the light of the advice he gave her, which advice she rejected, she decided that he would not represent her (ts 868 - 869).

279 When the suspension application came before the court on 16 April 2010, it was adjourned sine die by the plaintiffs' new solicitors with liberty to apply. The new solicitors did not bring the matter back on.

280 As I have earlier noted, CAT was wound up by order of the Supreme Court on 28 April 2010: Professional Services of Australia Pty Ltd (Administrator Appointed) v Computer Accounting and Tax Pty Ltd [No 3]. Following the termination of the retainer, but prior to the hearing of the winding up application, Mrs Frigger swore a further affidavit, settled by Mr Dutton dated 27 April 2010 which was referred to by the master in his reasons for decision [18].

281 Mrs Frigger confirmed the plaintiffs filed an appeal to the Court of Appeal against the winding up order but have chosen not to pursue the appeal.

282 I earlier referred to an email from Mrs Frigger to Mr Clavey in the afternoon of 25 March 2010 (exhibit 1.107) in which she lists various matters or actions which she said Mr Clavey agreed to attend to or undertake including that Mr Clavey would write submissions for the DOCA termination application and seek a hearing date for the substantial argument for the termination of the DOCA.

283 In the afternoon of Tuesday, 30 March 2010, in response to Mr Clavey's email of 26 March advising he had followed up with Mr Lenhoff regarding the adjournment and was waiting to hear back from Mr Lenhoff, Mrs Frigger sent an email to Mr Clavey (exhibit 1.116) in which she said:

Terry

I have not yet seen your letter to the above [Simmonds J] requesting the other two matters be listed for 9 April 2010:

1. The overall costs of the proceedings, other than the trial costs, to be re-instated and to be listed immediately for taxation.

2. The application for termination of DOCA.

I require the above letter to be sent by 10am tomorrow 31 March 2010/

I require that my affidavits I delivered to you yesterday be ready for signing tomorrow at 12 noon, failing which I shall pick them up and swear them as they are now.

A lawyer from BP has left you several messages, which you have failed to answer. Please respond immediately.

Angela Frigger

284 When Mr Clavey was taken to that email he said he had not accepted instructions in relation to those two matters and had not agreed to take them on. The email caused him to check earlier emails including the email from Mrs Frigger sent on 25 March 2010. Mr Clavey said that although there had been discussions in relation to dealing with the freezing orders and the hearing on 1 April concerned the freezing orders, Mrs Frigger had asked him to deal with interlocutory costs orders in her favour to see whether Simmonds J would agree to having those taxed separately from the trial costs orders, and he agreed to look at those things if the hearing on 1 April was adjourned, but he had not accepted instructions in relation to those matters. His acceptance of instructions was contingent on the hearing on 1 April being adjourned (ts 1064 - 1065).

285 Further, he never accepted instructions in relation to an application for termination of the DOCA. At that stage Mr Clavey had not had the chance to provide the second opinion referred to in his email of 15 March 2010. He did not have any documentation in relation to an application to terminate the DOCA.

286 When Mr Clavey wrote to Mrs Frigger on 30 March 2010 purporting to terminate the defendant's engagement with the Friggers he referred to their meeting on 24 March 2010 which, inter alia, summarised their discussions on 24 March as to what matters Mrs Frigger had requested Mr Clavey attend to and what he had agreed to do or to accept instructions in relation to page 1 of the letter reads as follows:

I refer to our meeting on 24 March 2010. On that day you asked me to appear for the directors and members of CAT at a hearing listed for 1 April 2010 to defend the defendants' application to extend Mareva orders made by Justice Simmonds in those proceedings and to argue the issue of costs in that matter.

You also said that you wanted me to attend to 3 other matters in due course:

1. assume conduct of the proceedings to terminate the DOCA;
2. apply to appoint a new receiver over the Estate of Martin Banning's share of Banning Holdings; and
3. obtain an order that CAT be permitted to have interlocutory cost orders taxed separately from its cost of trial.

287 Mr Clavey said in that letter that he had not assumed conduct of the proceedings challenging the DOCA and wished to consider the merit of the application and how it should be argued.

288 In relation to the hearing on 1 April he confirmed the extent of his instructions were to try and arrange an adjournment of the hearing or, if necessary, brief a barrister to appear on 1 April 2010.

289 It is not in issue the parties entered into an agreement on 23 February 2010 by which the defendant acted for the plaintiffs in their capacities as directors of CAT. A written costs agreement was entered into on 23 February 2010 when it was signed by Mrs Frigger on behalf of the plaintiffs and accepted by Mr Clavey on behalf of the defendant.

290 In par 4 of their statement of claim the plaintiffs plead the terms were as follows:

(a) Applying for an urgent interlocutory suspension of judgment again CAT in CACV76/2008 ('the suspension application') which application was to allow CAT to offset its taxed legal costs against monies owing to the opposing parties ('Banning') and was central to protecting the plaintiffs' interests - defendant estimated fees of $10,000 - $15,000

(b) Defending a winding up order against Computer Accounting & Tax Pty Ltd in Supreme Court COR 2/2010 ('the winding up') brought by the opposing parties in relation to monies owing to them by CAT - defendant estimated fees of $5,00 - $15,000

(c) Pursuant to clause 11 of the Cost Agreement and the defendant's email to the plaintiff dated 16 March 2010 the Cost Agreement was extended to applied to instructions to appear on behalf of the plaintiff in Supreme Court CIV 2001.2009 in an application dated 24 August 2009 by CAT for termination of Banning's DOCA

(d) Pursuant to clause 11 of the Cost Agreement and instructions provided by the first-named plaintiff to and accepted by the defendant on 24 March 2010 the Cost Agreement was extended and applied to Supreme Court CIV 2265/2006 specifically to freezing orders over the plaintiff's assets in the Frigger Super Fund.

291 Paragraph 5 of the statement of claim pleads it was an implied term of the agreement that the defendant would exercise professional skill, care and diligence in prosecuting the four legal proceedings to their conclusion. Paragraph 6 pleads that further or alternatively it was an implied term of the agreement 'the defendant would abide its obligations under the Law Society of Western Australia Professional Conduct Rules 2008' and reference was made to r 2.1, r 5, r 6.1, r 19.3(1) and (8) and r 21.4. For reasons which will become apparent it is unnecessary to set out the content of the Law Society Professional Conduct Rules 2008 alleged by the plaintiffs to be implied terms of the agreement.

292 In summary, it is the plaintiffs' case the agreement between them and the defendant was comprised of express terms as set out in the written costs agreement signed by Mrs Frigger on 23 February 2010 and implied terms. The implied terms are that the defendant would exercise professional skill, care and diligence in prosecuting four legal proceedings to their conclusion and in complying with obligations it is alleged were owed pursuant to the Law Society's Professional Conduct Rules.

293 In response the defendant admits the terms of the agreement between the parties were contained in the written costs agreement entered into on 23 February 2010 by which the defendant (by par 5.2 of the defence):

1. Agreed to appear for the directors of CAT to defend the winding up application;
2. Agreed to advise on the winding up application and the prospects of securing a suspension of the judgment order and/or a variation of orders made in the provisional liquidation application by Simmonds J in the Supreme Court.

294 The defendant further pleads at par 5.3 of its defence:

(a) the first named plaintiff agreed to pay invoices for work done issued on a monthly basis (clause 4);

(b) the defendant was entitled to request a retainer in advance of providing services to be deposited into its trust account for the payment of the defendant's fees and disbursements and the first named plaintiff authorised the defendant to deduct from those monies, sums invoiced by the defendant pursuant to the Costs Agreement and that, from time to time the defendant may ask the first named plaintiff to top up the amount of money held in trust against costs (clause 5);

(c) payment of invoices was due within 30 days of the date of issue of the invoice (clause 6);

(d) the defendant was entitled to cease to act for the first named plaintiff and remove itself from the court record as the plaintiff's solicitor if the first named plaintiff did not pay the defendant's invoices in accordance with the terms of the Costs Agreement or if the first named defendant did not pay monies requested by the defendant on account of future fees (clause 9.3);

(e) the defendant was entitled to cease to act for the first named plaintiff and remove itself from the court record as the plaintiff's solicitor if the necessary relationship of trust was broken between the first named plaintiff and the defendant (clause 9.5);

(f) the terms and conditions of the Costs Agreement applied to all future matters for which the first named plaintiff provided new instructions, whether or not the first named plaintiff was given or signed another copy of the Costs Agreement (clause 11);

(g) the defendant owed a paramount duty to the Court and there had to be credible grounds to pursue a claim or run a defence. The defendant therefore had to review all of the first named plaintiff's evidence concerning the matter to allow the defendant to perform its duties to the Court (clause 13);

(h) the first named plaintiff agreed to provide full and complete instructions to allow the defendant to perform its duties (clause 13);

(i) the defendant could not run tactical defences or raise tactical claims to defend valid claims. The first named plaintiff agreed not to require the defendant to run a defence or a claim that was fanciful, unsupported by evidence or sought to, in the defendant's opinion, improperly raise an issue of law which was unjustified on the evidence (clause 14).

295 Paragraph 5.3 reflects the express terms in the written costs agreement. The defendant accepts that it owed fiduciary duties to the plaintiffs, arising out of the solicitor/client relationship, and that those duties required the defendant to act in the interests of the plaintiffs.

296 It is also accepted that the defendant owed duties pursuant to the terms of the costs agreement and in tort to exercise professional skill, care and diligence in acting for the first named plaintiff.

As to the extent of the Retainer, on 12 March 2010, Mr Clavey of the defendant agreed to extend the Retainer to consider the merits of the plaintiffs' Supreme Court proceedings for termination of the DOCA (DOCA Application), the grounds on which the plaintiffs' application should be made and the merits in pursuing that litigation under section 445D(d)-(f) of the Corporations Act 2001 (DOCA Instructions).

298 Further, in the defendant's written closing submissions (page 8, par 33) it is accepted:

That on or about 25 March 2010, the Retainer was also extended to include instructions in relation to the Freezing Orders Application. The acceptance of the instructions was conditional, and the instructions dependent upon a hearing scheduled for 1 April 2010 being adjourned. An adjournment was negotiated and the hearing was relisted for 16 April 2010.

Is compliance with the Law Society of Western Australia Professional Conduct Rules 2008 an implied term of the retainer?

299 The test for whether a term should be implied into a contract is set out in the well-known passage of the majority of the Privy Council in BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266, 282 - 283:

Their Lordships do not think it is necessary to review exhaustively the authorities on the implication of a term in a contract which the parties have not thought fit to express. In their view, for a term to be implied, the following conditions (which may overlap) must be satisfied:

(1) it must be reasonable and equitable;

(2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without if;

(3) it must be so obvious that 'it goes without saying';

(4) it must be capable of clear expression;

(5) it must not contradict any express term of the contract.

(See also Codelfa Constructions Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337, 347, which applied BP Refinery (Westernport) Pty Ltd v Hastings Shire Council).

300 In Contract Law in Australia (6th ed), JW Carter [11-01], the learned author said:

Reasons for implication. There are three main reasons for implying terms into a contract. The first reason, which gives rise to a category known as 'terms implied in fact', is the need to give business efficacy to a contract. Second, terms may be implied from the nature of the contract itself or the obligations it creates. Third, terms may be implied by statute. The second and third reasons, taken together, give rise to a category of 'terms implied by law'.

301 In relation to the onus of proof the learned author at [11-02] said:

Onus of proof. In the case of terms implied in fact, the presumption is that the contract is effective without the term. Accordingly, the onus of proving that a term should be implied into the contract rests on the party so alleging. The onus is most difficult to discharge in detailed commercial contracts simply because the contract will look to state all the terms of the bargain. If the onus is discharged the term is deemed to have been implied from the time of contractual formation. The same approach is taken to terms implied by custom or usage.

Where the term in question is of the implied in law variety the onus of proof is different. Once the contract (or the obligations it creates) has been shown to be of a nature or kind in which there is a history of implication the term is presumed to be part of the contract. It is therefore up to the party who alleges that the term should not be implied to prove this. Where a term is implied by virtue of statute, there may be specific requirements for implication, and exclusion of the term by agreement may be prohibited.

302 Although it was not made clear by counsel for the plaintiffs, I understood the submission to be that the basis upon which compliance with the Professional Conduct Rules is an implied term of the retainer is from the nature of the contract itself, that is, the term is implied as a matter of law. In his written closing submissions counsel for the plaintiffs cited GE Dal Pont, Lawyers Professional Liability (4th ed) at [3.20]:

(b) GE Dal Pont continues (at [3.20]) when discussions into implied terms:

'Various terms are implied into the retainer as a matter of law, giving effect to the nature of the relationship. The basic implied term requires the lawyer to use her or his best endeavours to protect the client's interest and to exercise reasonable care and skill in carrying out by all proper means the clients instructions and the matters to which the retainer relates: Groom v Crocker [1939] 1 KB 194 at 222 per Scott LJ; Astley v Austrust Limited (1999) 179 CLR 1 at [47]. This implied term largely replicates the lawyer's duty of care in tort; a lawyer who discharges duties negligently is therefore concurrently liable in tort and contract.

Also implied in the retainer are terms conferring on the lawyer authority to do all things incidental to the object of the retainer and requiring the lawyer to maintain confidential lawyer/client communications. That the retainer has traditionally been construed as an entire contract, from which client is entitled to withdraw without giving reason, is likewise effected through the vehicle of contractual implication.

Because a term implied in law is presumed to form part of a contractual relationship, the onus of establishing that the term is modified or ousted in a particular retainer lies on the lawyer.'

303 Although the 4th ed of Dal Pont cited by counsel for the plaintiffs has been overtaken by the 5th ed, [3.20] of the 5th ed is in the same terms as the 4th ed.

304 In support of his submission, that the 'solicitors rules' are implied into a contract, counsel cited [3.190] and [4.80] from the 4th edition of Dal Pont and Ahmed v Russell Kennedy (a firm) [2000] VSC 41. Ahmed v Russell Kennedy is not authority for the proposition that as a matter of law the 'solicitors' rules' are implied into a contract between a solicitor and client. That case dealt with, in passing, the Victorian Solicitors (Professional Conduct and Practice) Rules 1984 and seemed to proceed on the basis that those rules applied to the contract between solicitor and client.

305 I was not provided with a copy of the Victorian 1984 rules and I am not therefore in a position to compare the Victorian rules to the Law Society of Western Australia Professional Conduct Rules 2008. However, for the purpose of deciding the issue it is unnecessary for me to do so. It is only necessary I refer to the Western Australia Law Society Rules.

306 In the preamble to the Law Society rules the status of the rules is explained by reference to the decision of the Full Court of the Supreme Court in Quigley (A Practitioner) v The Legal Practitioners Complaints Committee [2003] WASCA 228 [17]:

The Professional Conduct Rules are not in the nature of a legislative prescription or standard of conduct. By their own expressed intention they are to be regarded as a guide to what is considered by the legal profession in Western Australia to be proper behaviour. Their role and value as a guide to the type of conduct to be expected of practitioners has been recognised by this Court: see, for example, D'Alessandro v Legal Practitioners Complaints Committee (1995) 15 WAR 198, at 214, per Ipp J, Pidgeon and Franklyn JJ concurring at 201. The Tribunal and its statutory predecessor, The Barristers' Board, have consistently treated the Professional Conduct Rules in this way.

While the relevant Professional Conduct Rule may be accepted, in a particular case, as providing a useful guide to what is considered by the legal profession to be proper behaviour, the question whether the conduct of a practitioner is unprofessional for the purposes of the Act is by no means answered by determining whether there has been a breach of an applicable Professional Conduct Rule.

308 The preamble to the rules goes on to state that all practitioners practising in Western Australia should comply with the rules in conjunction with the statutory obligations under the Legal Practice Act 2003 but that the rules are not an exhaustive code of conduct and do not address all aspects of practice provided for in the Act.

309 Assuming, without deciding, that the Law Society Professional Conduct Rules did apply to the defendant, or to Mr Clavey, during the time he acted for the plaintiffs, I am not satisfied that as a matter of law compliance with the rules was an implied term of the contract between the parties. As was expressed in Quigley (A Practitioner) v The Legal Practitioners Complaints Committee the rules are no more than what was considered by the legal profession in Western Australia at that time to be proper behaviour. That falls a long way short of becoming implied terms of a contract between a solicitor and client.

310 In summary, I find it was not an implied term of the contract or retainer between the parties that the defendant was contractually obliged or bound to comply or act in accordance with the Law Society Professional Conduct Rules.

311 Although, as I understood their case, it was not the plaintiffs' case that the Professional Conduct Rules were implied in fact, if I am wrong about that I find there is no evidence which supports a finding that such a term was implied in fact. There is no evidence that the Law Society Professional Conduct Rules was ever raised by either the plaintiffs or the defendant or discussed between them. The written costs agreement does not refer to the rules. In my view it is not necessary to give business efficacy to the contract between the parties that the Professional Conduct Rules be implied into the contract. The terms of the written costs agreement are set out in detail and address various aspects of the relationship between the parties and the basis upon which the defendant agreed to act for the plaintiffs.

312 Therefore compliance with the Professional Conduct Rules is not to be implied into the contract between the parties as a matter of fact.

313 Finally, as the rules themselves make clear they do not have any statutory basis and therefore are not to be implied into the contract by statute.

Paragraph 4(c) statement of claim - extension of retainer to appear on behalf of plaintiffs in Supreme Court proceedings CIV 2001 of 2009 for termination of DOCA

314 I have earlier made findings rejecting the evidence of Mrs Frigger and accepting the evidence of Mr Clavey regarding the discussions and correspondence between them from 12 to 16 March 2010. At a meeting between Mrs Frigger and Mr Clavey on Friday, 12 March Mrs Frigger asked Mr Clavey to expand his instructions by considering the merits of Supreme Court proceedings challenging the DOCA and the grounds upon which the challenge should be made. Mr Clavey accepted instructions to consider whether there were merits in pursuing that litigation under s 445D(d) to s 445D(f) of the Corporations Act. The basis upon which Mr Clavey agreed to extend the retainer and accept further instructions were confirmed in his email to Mrs Frigger of 15 March 2010 and again in his email of 16 March 2010.

315 I therefore find that Mr Clavey accepted further instructions and agreed to extend the retainer to consider the merits of the plaintiffs' Supreme Court proceedings for termination of the DOCA and in particular the merits in pursuing the litigation under s 445D(d) to s 445D (f) of the Corporations Act and the grounds upon which the plaintiffs' application should be made. Mr Clavey did not accept instructions, and the retainer was not extended, to appear on behalf of the plaintiffs in Supreme Court action CIV 2001 of 2009.

Paragraph 4(d) statement of claim - extension of retainer to represent the plaintiffs in the Supreme Court action CIV 2265 of 2006 in relation to freezing orders made over the plaintiffs' assets in the Frigger Superannuation Fund

316 I have also earlier made findings rejecting Mrs Frigger's evidence and accepting Mr Clavey's evidence regarding the circumstances in which they discussed extending the retainer in relation to the freezing orders application in Supreme Court action CIV 2265/2006.

317 I find Mr Clavey did not accept instructions by Mrs Frigger at their meeting on 24 March 2010 to represent the plaintiffs in relation to the freezing orders application in CIV 2265/2006. Mr Clavey confirmed in his letter to Mrs Frigger of 30 March 2010 terminating the retainer that he was only prepared to accept instructions if the hearing on 1 April was vacated, Mr Clavey being unavailable to attend the hearing on 1 April. He negotiated an adjournment with Mr Lenhoff and the matter was relisted for hearing on 16 April 2010. Mr Clavey did not accept instructions to appear in those proceedings. He terminated the retainer on 30 March 2010. While at the request of Mr and Mrs Frigger he reconsidered whether to terminate the retainer, he advised Mrs Frigger in a telephone conversation on 31 March he was not prepared to reconsider his termination of the retainer. I have already made findings as to the circumstances in which Mr Clavey declined to reconsider his termination of the retainer. He confirmed the termination of the retainer in his email to Mrs Frigger on 6 April 2010.

Paragraph 9 statement of claim - alleging breach of contract, breach of fiduciary duties and breach of common law duties

318 Omitting the particulars, par 9 of the statement of claim is pleaded in the following terms:

In breach of the Cost Agreement and the fiduciary duties and obligations owed to the plaintiffs under the Rules and at common law the defendant through its director Mr Clavey failed to exercise all due care skill and diligence in and about the prosecution of the said legal proceedings which resulted in prejudice injustice and loss to the plaintiffs in the said legal proceedings.

319 Although there is no plea the defendant owed fiduciary and common law duties to the plaintiffs, given the nature of the relationship between the parties as solicitor and client there is no issue the defendant owed both fiduciary and common law duties, as is accepted by the defendant and as I have set out above. It is also accepted the reference to common law duties refers to a duty of care and is a claim in negligence.

320 The plaintiffs' case alleging breach of fiduciary duty/breach of contract/negligence by the defendant in par 9 of the statement of claim is separated into five main claims, namely:

(a) an alleged recommendation by the defendant of an offer to compromise which, if accepted, would be detrimental to the plaintiffs' interest (particular A);

(b) an alleged failure by the defendant to include the resolution of all costs orders between CAT and PSA and Banning within the suspension application when specifically instructed to do so (particular B);

(c) an alleged belief by the defendant that the plaintiffs' opposition to the winding up application had merit (particular C);

(c) an alleged failure by the defendant to progress the DOCA application (particular D), and,

(d) the withdrawal of the defendant's legal services when it was too late for alternative representation to be obtained (particular E).

321 Although the purported causes of action based upon pars A - C of the particulars in par 9 were not formally abandoned, they were not pursued with any force at the trial. Essentially the main basis of the plaintiffs' claim was that particularised in par E, the withdrawal of the defendant's legal services when it was too late to obtain alternate legal representation in relation to the suspension application and the winding up application and to a lesser extent an allegation in particular D of a failure to progress the DOCA application. In par 10 of their statement of claim the plaintiffs also allege breaches of express and implied terms of the retainer and breaches of fiduciary duties and the common law duty of care in the way in which the defendant acted for the plaintiffs. The main basis of the plaintiffs' cause of action is also reflected in par 11 of their statement of claim which pleads the defendant unilaterally terminated the costs agreement without just cause, without the plaintiffs' agreement and without giving the plaintiffs sufficient time in which to find alternate legal representation without due consideration as to whether the termination would unduly disadvantage the plaintiffs. I will address that issue later. In my view none of the allegations in particulars A - C are proper particulars or are relevant to the alleged breaches of contract and fiduciary duty and of negligence. None of the allegations, if established, give rise to a cause of action as pleaded.

322 Further, in relation to the allegation in particular A I find Mr Clavey did not recommend Mrs Frigger accept the offer of settlement. Rather, he recommended Mrs Frigger consider the proposal for settlement. In any event Mrs Frigger was not prepared to accept the settlement proposal and it was not accepted.

323 In relation to the alleged cause of action in particular B, in my view the decision by Mr Clavey to settle the orders sought in the suspension application in the way in which he did (see above [236]) was the correct and most sensible way in which to proceed with the application. To draft it in the terms proposed by Mrs Frigger was in my view detrimental to the suspension application in that there was less likelihood of the application being successful in the terms proposed by Mrs Frigger than the terms ultimately settled by Mr Clavey.

324 Further, I accept Mr Clavey's evidence that he had the discretion to draft the application in the way in which he determined was the best way to advance the plaintiffs' interests even if contrary to the wishes expressed by Mrs Frigger. I accept Mr Clavey's evidence that he viewed Mrs Frigger's direction to draft the orders sought to include the resolution of all outstanding costs orders between CAT and Banning to be a preference expressed by her rather than a clear instruction.

325 In my view given the orders made by the Court of Appeal were for repayment of part of the judgment sum and for the issue of costs of the trial to be remitted to the trial judge an application to defer payment until all costs in that, and all other litigation, had been dealt with would represent not simply a stay but a fundamental change in the nature of the orders made by the Court of Appeal. There was in my view no prospect of obtaining such an indefinite deferral of payment. In my view Mr Clavey quite properly exercised his independent judgment as a lawyer, cognisant of his duties to the court, not to advance an application he believed had no prospects of success. In my view Mr Clavey acted properly and correctly.

326 Particular C is a nonsensical allegation. There is no allegation by the plaintiffs that any belief by the defendant that the opposition to the winding up application was meritorious is causally relevant. It is of course the plaintiffs' position that the opposition to the winding up application did have merit. It is not alleged, for example, that a belief the opposition to the winding up application was meritorious was wrong or negligently held and relayed to the plaintiffs and that had the defendant not had such a belief they would not have proceeded with or maintained their opposition to the winding up application.

327 The allegation in particular D can be shortly disposed of. As I have already found, the defendant was not retained to act for the plaintiffs in the conduct of the DOCA application and therefore owed no relevant duty. Mr Clavey's instructions were limited to the giving of advice, not conducting the DOCA application. That position is consistent with Mrs Frigger's evidence when she accepted that he would give her another or second opinion, that is, another opinion to that of her solicitor acting for her in relation to that matter, Mr Stokes.

328 That then leaves particular E which, as I have earlier noted, is essentially the main basis of the plaintiffs' claim which is also reflected in par 11 of the statement of claim.

329 Paragraph 11 of the statement of claim pleads as follows:

The defendant unilaterally terminated the Cost Agreement on 30 March 2010 without just cause, without the plaintiffs agreement and without giving the plaintiffs sufficient time in which to find alternate legal representation and without due consideration as to whether the termination would unduly disadvantage the plaintiffs.

Particulars

(a) The defendant sent a letter by email to the plaintiffs dated 30 March 2010 and unilaterally terminated the Cost Agreement forthwith 'in accordance with condition 9.5'.

330 I have already found that the contract or retainer between the parties is comprised of the express terms set out in the written costs agreement signed by Mrs Frigger on 23 February 2010.

331 Relevantly, cl 9.5 of that written agreement is as follows:

1. [The defendant] may cease acting for you and be entitled to remove [the defendant] from the court record as your solicitor, if the following occur:

9.5 if the necessary relationship of trust is broken between us.

332 As is made clear in Mr Clavey's letter of 30 March 2010 terminating the retainer, the basis for the termination was in accordance with cl 9.5. That is, the retainer was terminated on the basis of a loss of trust in the relationship between the plaintiffs and the defendant. The letter of 30 March 2010 explains the grounds relied upon for the conclusion the necessary relationship of trust between the parties had broken down.

333 Therefore, relevant to the cause of action based upon breach of contract, the issue is whether the necessary relationship of trust between the parties was broken down so that pursuant to cl 9.5 the defendant was entitled to cease acting for the plaintiffs in the winding up and suspension applications and to terminate the retainer. The plaintiffs submit the relationship of trust had not been broken and there was no proper basis upon which the defendant was entitled to terminate the retainer.

334 In his closing submissions counsel for the plaintiffs relied heavily on there being an implied term of the retainer that the defendant was bound by the Professional Conduct Rules as pleaded in par 6 of the statement of claim. Counsel placed particular reliance upon r 19.3(1) and (8). I have already determined that it was not an implied term of the retainer that the defendant was bound by the Professional Conduct Rules. However, r 19.3(8) reflects the general common law rule that 'a solicitor may for good cause and on giving reasonable notice to his client, decline to act further in the action for him [or her]' (Cachia v Isaacs (1985) 3 NSWLR 366, 377). Therefore the wording of r 19.3(8) would seem to reflect the general common law rule as explained in Cachia v Isaacs. Accordingly, because the general common law rule is reflected in the wording of r 19.3(8) and also in case I am wrong in conclusing the Professional Conduct Rules were not an implied term of the contract, I propose to consider the plaintiffs' submission on the basis the defendant was bound by r 19.3(1) and (8).

335 Rule 19.3(1) and (8) of the Law Society of Western Australia Professional Conduct Rules provide as follows:

... a practitioner may cease to represent the client:

(1) at any time and for any reason if this will cause no significant harm to the client's interests and the client is fully informed of the consequences and agrees to the practitioner ceasing to act; or

...

(8) if any other good cause exists, as long as the practitioner takes reasonable care to avoid foreseeable harm to the client, including giving reasonable notice to the client, allowing reasonable time for the engagement of a new practitioner, co-operating with the new practitioner and (subject to the satisfaction of any lien the practitioner may have) promptly handing over all papers and property to the client or the new practitioner and paying to the client or the new practitioner any money held on behalf of the client.

336 Counsel also relied upon the following passage from Dal Pont at [3.210]:

1. Duties of lawyers on termination of retainer

'Where a lawyer terminates a retainer for just cause, the prevailing ideal remains that the client in question must not be disadvantaged by reason of the termination. To this end, unless the law and/or professional rules require the lawyer to terminate the retainer, he or she must give due consideration as to whether the termination will unduly disadvantage the client. A lawyer who opts to terminate the retainer must take reasonable care to avoid foreseeable harm to the client, including giving due notice to the client and allowing reasonable time for the substitution of a new lawyer.

Moreover the professional rules in most jurisdictions require a terminating lawyer to co-operate with the new lawyer and subject to satisfaction of any lien the former may have promptly turn over to the latter all documents the property of the former client. The Western Australian Rules are unique, in this regard, in adding the following duty -

When handing over a file to another solicitor or client, a solicitor should clearly indicate the impending work required to be done (including any impending limitation periods). If the file is handed over to the client, the client should also be informed as to the likely consequences of a failure to properly attend to such matters and advise to seek alternative legal representation as soon as possible. Ideally this should be done in writing.'

337 The passage cited from Dal Pont seems to do no more than reflect what is set out in r 19.3(8). It also reflects the common law rule as explained in Cachia.

338 Rule 19.3(1) is not relevant in the circumstances of this case. The defendant did not terminate the retainer at will or pursuant to r 19.3(1). The defendant terminated the retainer on the grounds the necessary relationship of trust between the parties had broken down and no longer existed, that is, arguably for 'good cause' as contemplated by r 19.3(8).

339 The task of a court in construing a written instrument is solely a search for the objective meaning of the words used. It is not an enquiry as to the actual common intention of the parties: Codelfa Construction Pty Ltd v State Rail Authority of NSW.

340 Unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a business-like interpretation on the assumption that the parties intended to produce a commercial result. Commercial reality or, as it is sometimes called, business common sense, is to be ascertained objectively: Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; Mainteck Services Pty Ltd v Stein Heurtey SA [2014] NSWCA 184 [57].

341 In the context in which it appears, it is submitted, cl 9.5, which confers a power of termination on the solicitor, should be construed as having a subjective and an objective component. In particular:

(a) the subjective component is that the solicitor genuinely believes that the necessary relationship of trust and confidence has broken down; and

(b) that belief is based on reasonable, objective grounds (consistent with the notion of 'good cause' in the common law rule).

342 I accept cl 9.5 should be construed in that way. I have already found Mr Clavey genuinely believed the necessary relationship of trust and confidence had broken down. That leaves for determination whether that belief was based on reasonable objective grounds.

343 Counsel for the plaintiffs submitted Mr Clavey was not entitled to unilaterally form the view the relationship between the parties had broken down. He should have phoned Mrs Frigger before deciding to terminate the retainer. Had he phoned her he would have reasonably formed the view that there was a misunderstanding, that Ms Zohar had not accurately represented what Mrs Frigger had said to her or how Mrs Frigger had behaved and he should have sought to clarify the position with Mrs Frigger. Had he done that he would have concluded there was a misunderstanding and that the necessary relationship of trust between the parties had not broken down.

344 Counsel further submitted that it was an implied term of the retainer that the defendant, if he did withdraw from acting for them, allow them reasonable time to obtain alternative legal representation. Finally, it was submitted that at the time Mr Clavey terminated the retainer it was not reasonable to withdraw given the state of both the winding up and stay applications and that they were listed for hearing or about to be listed for hearing. It was submitted that had Mr Clavey continued to act and represent the plaintiffs the stay application would have been granted, which would have led to the winding up application falling away because the winding up application would not have been granted or proceeded with once the stay of the Court of Appeal order to repay part of the original judgment had been granted.

345 I do not accept counsel's submissions. In my view Mr Clavey was entitled to form the view he did on the basis of what he was told by Ms Zohar, a solicitor whom he trusted, that the necessary relationship of trust between he and Mrs Frigger had broken down and he could no longer continue to act for her. In particular he was entitled to conclude that from Mrs Frigger's reported allegation to Ms Zohar that Mr Clavey had misled Mrs Frigger there was no longer any trust or confidence in the relationship such that Mrs Frigger accepted Mr Clavey and the defendant were acting in her best interests.

346 Further, I have already made findings accepting Ms Zohar's evidence and rejecting Mrs Frigger's evidence as to what Mrs Frigger said about Mr Clavey to Ms Zohar. I accept Ms Zohar's evidence that Mrs Frigger said Mr Clavey had misled her because he said he could argue the matter on 1 April which Mr Clavey had not said. Ms Zohar said she remembered Mrs Frigger saying that because it concerned her.

347 Although Mrs Frigger denied having said that Mr Clavey misled her or that she screamed at Ms Zohar and was angry with Ms Zohar, she accepted that if she had said such a thing it would have been a completely unacceptable thing for her to say and would have demonstrated a complete lack of trust between her and Mr Clavey.

348 Therefore ringing Mrs Frigger would not have achieved anything because she would either have argued with Mr Clavey and repeated or confirmed the allegation or denied the allegation. Had she denied the allegation Mr Clavey would have been left in the position of having to decide between what Ms Zohar had reported to him and what Mrs Frigger said and it is probable he would have accepted what Ms Zohar reported to him and have come to the same conclusion that there was no longer any trust and confidence in their relationship and to decide to terminate the retainer.

349 Mr Clavey explained his reasons for terminating the retainer as follows:

And what did you mean by that?---Well, to me based on that conduct and what she had said I formed the view that Mrs Frigger didn't trust us, and I felt that I had an ethical obligation to end the retainer.

And why did you consider you had an ethical obligation to end the retainer?---Well, my view is that if the client doesn't trust the solicitor and the solicitor is aware of that that it could give rise to conflicts of interest because you all of a sudden might start acting in a way that is protective of your position and not advancing your client's position.

And what was it that caused you to form the view that the client didn't trust you?---There was a concern about the number of phone calls that Shoshanna had made in relation to securing the consent of parties. Even though Shoshanna had spent the time it didn't mean we'd bill it, but it indicated to me there was a concern that there was an issue regarding costs. The aggressive nature of what had been reported to me indicated that she was very unhappy with us, and finally to say to my staff that I had misled her - because the allegation of misleading related to my ability to attend on 1 April and argue the matter in circumstances where I had never said that. So I formed a view from that conduct that Mrs Frigger did not trust us and the relationship of trust and confidence between the firm and her had broken down.

350 In any event the next day after Mr and Mrs Frigger had telephoned him and he agreed to reconsider his position and later telephoned and spoke with Mrs Frigger and Mrs Frigger became angry with him and said to him he was acting unprofessionally, it caused Mr Clavey to finally decide he would not reconsider his position and would not take any further instructions from the plaintiffs. In my view that was the only reasonable conclusion Mr Clavey could have come to, especially given the serious allegations levelled against both Mr Clavey and Ms Zohar by Mrs Frigger, which I have found were without any basis and were improperly made. Mrs Frigger's behaviour and her allegations to Mr Clavey in the telephone conversation are consistent with her behaviour towards and allegations about Mr Clavey made to Ms Zohar and provide further support to my earlier finding.

351 I also reject the submission that at the time he terminated the retainer it was not reasonable for Mr Clavey to cease acting and that he did not allow reasonable time for the engagement of a new practitioner or take reasonable care to avoid foreseeable harm to the plaintiffs by reason of his termination of the retainer. In my view there was sufficient time available following the termination of the retainer for the plaintiffs to arrange further legal representation and they in fact did arrange alternative legal representation when they instructed Mr Dutton.

352 Further, in my view there was ample time available following the termination of the retainer for the plaintiffs to arrange further representation. Significantly, in that regard:

(a) No lien was claimed over the plaintiffs' files.

(b) On the date of the termination (30 March 2010) there were over two weeks remaining until the suspension application (16 April 2010) and four weeks remaining until the winding up application (28 April 2010).

(c) Mr Dutton was engaged on the Easter Monday public holiday, after only two business days had passed following the termination of the retainer.

(d) Shortly thereafter Mr Cobby, a barrister, was consulted. On 8 April 2010, Mrs Frigger advised the defendant that Mr Cobby had been engaged on 8 April 2010.

(e) Mr Clavey offered to speak with the new solicitors to facilitate the transfer of the matters, at no charge. That offer was never taken up.

(f) Mr Dutton and Mrs Frigger met with Mr Cobby on a number of occasions. Mr Cobby gave advice and was prepared to act. It was Mrs Frigger who chose not to have Mr Cobby act (see Mr Dutton's evidence above [277]):

(g) Mrs Frigger 'absolutely' agreed that it was she who chose not to engage Mr Cobby because of advice that he had given.

353 In summary, I conclude the circumstances in which Mr Clavey terminated the retainer by notice in his letter to Mrs Frigger of 30 March 2010 do not constitute a breach of contract or retainer between the parties. In my view Mr Clavey's actions on 30 and 31 March 2010, and including the entire period for which he acted for the plaintiffs, was entirely proper, professionally responsible and reasonable. In particular the termination of the retainer was not, on the assumption r 19.3(1)(a) of the Law Society Professional Conduct Rules was an implied term of the retainer, in breach of or contrary to those rules. Nor was it in breach of any common law duty. In my view the necessary relationship of trust between the parties had broken down and Mr Clavey was justified and entitled to, and indeed probably had no alternative but to terminate the retainer. Mr Clavey's belief the necessary relationship of trust and confidence had broken down was based on reasonable objective grounds. The termination of the retainer was in accordance with cl 9.5 of the written costs agreement.

354 Paragraph 10 of the statement of claim is pleaded in the following terms:

In further breach of the express and implied conditions of the Cost Agreement and the fiduciary duties and obligations owed at general law the defendant failed to exercise all due care skill and diligence in and about the prosecution of the legal proceedings under the scope of the Cost Agreement and or accepted instructions beyond its employees' level of competence. The defendant through Mr Clavey

(a) Failed to supervise staff Sarah and Shoshanna;

(b) Failed to file documents in the suspension application on an urgent basis and failed to comply with the plaintiffs' instructions in the application;

(c) Failed to file consolidated submissions in the winding up as directed by the Master by the due date or at all;

(d) Failed to take the necessary legal action in the winding up in order to protect and advance the plaintiffs interests particulars of which are contained in the learned Master Sanderson's reasons in COR2/2010 dated 6 May 2010;

(e) Failed to progress CAT's application for termination of Banning's DOCA;

(f) Failed to represent the plaintiffs in the final substantive hearings for each of the legal proceedings:

(i) The defendant arranged for the substantive final hearing in the suspension application for 16 April 2010 and at the hearing Mr Clavey applied for an order to be removed from the record as the plaintiffs and or CAT's legal representative;

(ii) The defendant arranged for the substantive final hearing in the winding up for 28 April 2010 but Mr Clavey failed to appear.

355 Paragraphs 10(a) - 10(e) are unhelpfully pleaded. They provide no proper particularisation of the alleged failures of the defendant. The defendant sought further and better particulars of each of the subparagraphs which were provided on 18 February 2014 but they add little to a proper understanding of what is meant by the particulars and it is unnecessary to set out or refer any further to the further and better particulars provided.

356 In his opening submissions counsel for the plaintiffs elaborated upon each of the particulars. In relation to par 10(a) the allegation concerning Sarah (Ms Sarah Richards) was abandoned. The allegation against Shoshanna (Ms Shoshanna Zohar) was that she was unable to organise the adjournment of the freezing order application in a competent fashion. I have already referred to the evidence of the steps taken by Ms Zohar on 29 and 30 March 2010 in arranging the adjournment and her various telephone discussions with Mrs Frigger. In my view Ms Zohar at all times acted appropriately and sensibly and worked diligently to arrange for a minute of consent orders adjourning the hearing to be signed and the adjournment to ultimately be obtained. Even were there a failure to supervise Ms Zohar, which there was not, that is not relevant to the main basis upon which the plaintiffs bring their action against the defendant, that is, that because of his termination of the retainer in breach of the contract between the parties and in breach of the fiduciary duties and common law duty of care owed to the plaintiffs, they suffered loss and damage because CAT was wound up and because there was a failure to obtain a stay of the Court of Appeal orders.

357 Paragraph 10(b) alleges a failure to file the suspension application and affidavit in support on an urgent basis and in accordance with Mrs Frigger's instructions. I have already dealt with the circumstances in which the suspension application and the affidavit in support were prepared and filed on 23 March 2010 after Mr Clavey received the funds from the plaintiffs he had requested. In my view Mr Clavey took all proper and necessary steps in preparation and filing of the suspension application and Mrs Frigger's affidavit sworn in support of the application. The drafting of the affidavit and in particular the compiling of the voluminous exhibits in circumstances where Mrs Frigger had not provided much of the necessary documentation to Mr Clavey, and where there were ongoing requests for further documentation to be provided, was a difficult exercise and necessitated a considerable amount of work by Mr Clavey, Ms Richards and Ms Zohar. In my view Mr Clavey undertook the work involved in a competent and conscientious manner. In all of the circumstances the suspension application was filed in a timely manner.

358 Further, as I have already discussed and found, the grounds of the application were the result of Mr Clavey's independent legal judgment and were not a matter to be dictated solely by the client. In my view the grounds of the application as drafted by Mr Clavey were both proper and in the best interests of his clients, the plaintiffs.

359 I also make the same comment I made in relation to par 10(a). Whether or not the court documentation should have been filed earlier or in a different form is irrelevant to the plaintiffs' ultimate cause of action. After the defendant ceased acting for the plaintiffs and they instructed a new solicitor, Mr Dutton, they had the opportunity to amend the suspension application but did not do so. When the suspension application came on for mention in the Supreme Court on 16 April 2010 it was adjourned sine die by the plaintiffs' new solicitors with liberty to apply. The matter was not brought back on.

360 Paragraph 10(c) alleges a failure to file further submissions in the winding up application.

361 On 4 March 2010 the winding up application was listed (for directions only) on 16 March 2010. At that time, it would appear that Master Sanderson ordered that the plaintiffs in the winding up application file submissions within seven days and Mr and Mrs Frigger within seven days thereafter, although as I have already found, there is some uncertainty in this regard as the plaintiffs' submissions were in fact not provided until 16 March itself.

362 Those original orders were overtaken by events on 16 March 2010 when the matter came on before Master Sanderson for mention. The course of the proceedings is dealt with in the master's reasons (Professional Services of Australia (Administrator Appointed) v Computer Accounting and Tax Pty Ltd [No 3] [10]).

363 On 16 March 2010, the matter was adjourned for a period of a further six weeks, within which the defendant ceased to act and new solicitors were engaged. Insofar as any further submissions might have been filed on behalf of Mrs Frigger in opposition to the winding up application, there were four weeks to do so. Any failure by the defendant to do so within the last two weeks of his retainer was of no consequence to the ultimate disposition of the winding up application.

364 Indeed, a lengthy affidavit sworn by Mrs Frigger in opposition to the winding up application had already been filed by the defendant on 3 March 2010. Following the termination of the retainer, but prior to the hearing of the winding up application, Mrs Frigger swore a further affidavit, settled by Mr Dutton, dated 27 April 2010: see Professional Services of Australia (Administrator Appointed) v Computer Accounting & Tax Pty Ltd [No 3] [18].

365 Mrs Frigger did not identify any evidence that could have been adduced in opposition to the winding up application that was not in fact adduced by her.

366 There is nothing to suggest that any further evidence or submissions would have made any difference to the fate of the application.

367 Paragraph 10(d) alleges a failure 'to take the necessary legal action in the winding up in order to protect and advance the plaintiffs' interests'.

368 The plaintiffs' further and better particulars under par 10(d), provided on 18 February 2014, reveal no failure, under the terms of the retainer, in negligence, or in breach of fiduciary duty, by the defendant in the terms alleged. The particular merely recites paragraphs of the judgment of Master Sanderson on 6 May 2010.

369 Indeed, those matters upon which the plaintiffs opened, largely raise issues concerning Mr Dutton's conduct in the opposition on 28 April 2010: Professional Services of Australia Pty Ltd (Administrator Appointed) v Computer Accounting and Tax Pty Ltd [No 3] [8], [9], [10].

370 Paragraph 10(e) is a re-statement of the allegation that the defendant failed to progress the DOCA application, which I have already dealt with.

371 As I have found, the DOCA instructions related to the giving of advice, not conducting the DOCA application. Mrs Frigger ultimately accepted that the instructions may have been limited to providing advice and Mr Clavey was never provided with any documents in relation to the DOCA application, other than the copy of the DOCA itself (ts 1044).

372 Paragraph 10(f) alleges that the defendant failed to represent the plaintiffs in the final substantive hearings for the suspension application and the winding up application, on 16 April 2010 and 28 April 2010 respectively.

373 The allegation is wholly misconceived. Both appearances took place after the defendant terminated the retainer by right, due to a breakdown of trust in the relationship. Indeed, the plaintiffs were represented by Mr Dutton at both appearances on 16 and 28 April.

374 Essentially, the allegation in par 10(f) is a repetition of the allegation the defendant was not entitled to terminate the retainer and was contractually bound, and also subject to fiduciary duties and a duty of care, to continue to represent the plaintiffs until the conclusion of the winding up and suspension applications. It essentially follows from or is incorporated within the plea in par 11. The same or similar argument is made in par 9E.

375 I have already dealt with these arguments and found the defendant was in the circumstances entitled to terminate the retainer and that the termination was not in breach of the retainer. Nor was the termination in breach of any fiduciary or common law duty owed by the defendant to the plaintiffs.

376 The defendant also submits that the plaintiffs, having been parties to, and opposed, the winding up order and not having pursued an appeal from the winding up order the plaintiffs, cannot now mount a collateral attack against the Supreme Court decision in Professional Services of Australia Pty Ltd (Administrator Appointed) v Computer Accounting and Tax Pty Ltd [No 3] that CAT be wound up.

377 To do so, it is submited, would bring the administration of justice into disrepute and amount to an abuse of process: Donellan v The Public Trustee [2007] WASC 213 [27] - [41].

It is not, therefore, necessarily sufficient simply for the defendant to show that the proceedings are a collateral attack on an earlier final decision. It must also appear that it would be manifestly unfair to a party to the later proceedings that the same issues should be re-litigated or that to permit such re-litigation would bring the administration of justice into disrepute.

In that connection, in Walpole v Partridge & Wilson (a firm), Ralph Gibson LJ said, in relation to a claim against solicitors for negligence in the preparation of a case for trial:

'If there is a sufficiently arguable case to show that the defendant solicitors, by their breach of duty, put the plaintiffs in the position of being unable properly to contest the first decision, so that the plaintiffs were reasonably compelled to submit to judgment on the issue, then, in my judgment, the plaintiffs' claim is not shown to be an abuse of the process of the court merely because it will, if it succeeds, require the court to assess damages on the basis that the prior decision of the court would not have been made if the solicitors had not been in breach of duty. In such circumstances, to return again to the opening passage in Lord Diplock's speech in Hunter's case, it would not be manifestly unfair to the defendant solicitors to permit the claim to proceed, and it would not bring the administration of justice into dispute (124 - 125).'

379 Given my earlier findings the defendant was not in breach of the retainer nor did it breach any duties owed to the plaintiffs, when it terminated the retainer with the plaintiffs, it is unnecessary for me to consider whether the plaintiffs' action against the defendant is a collateral attack on the Supreme Court decision to wind up CAT and should therefore be stayed as an abuse of process, but because the issue was fully argued, and in case my conclusion the termination of the retainer was not in breach of the contract or any relevant duty is wrong, I propose to consider the matter.

380 This is not a case where because of the defendant's breach of duty the plaintiffs were put in a position of being unable to properly contest the winding up application and so were compelled to submit to CAT being wound up. As I have already outlined, Mrs Frigger appointed a new solicitor Mr Dutton and they met with a barrister Mr Cobby who was prepared to act for her but Mrs Frigger decided against Mr Cobby being briefed. Further, Mrs Frigger swore a further affidavit on 27 April 2010, which was settled by Mr Dutton and filed in opposition to the winding up application. Mrs Frigger did not identify any further evidence that could have been adduced in opposition to the winding up application which was not in fact adduced by her. All that she was able to say was that she was putting in matters that she thought should go in and a barrister might have told her anything that had been left out. The plaintiffs had the opportunity to and did appear by counsel on the application and made submissions in opposition. They had the opportunity to brief a barrister. Their argument is that all that they instructed Mr Dutton to do was to ask for an adjournment because he had advised them he did not have the experience to argue against the winding up application. Mr Dutton applied for the adjournment but it was not granted and the application was heard. It was, in Mrs Frigger's words, a one-sided argument because Mr Dutton was not sufficiently experienced to argue the matter.

381 I have already concluded that Mr Clavey did not, when he terminated the retainer and by reason of the termination of the retainer, fail to give due notice to the plaintiffs or unduly disadvantage them by reason of the termination. Therefore it must follow the plaintiffs, because of the termination of the retainer, were not put in a position of being unable to properly contest their opposition to the winding up application. Further, the plaintiffs would need to show that with more time, and with an experienced solicitor and perhaps counsel, their opposition to the winding up application would have been properly made in the sense that the outcome would have been different in that CAT would not have been wound up. Given the master's findings that CAT was indebted to PSA and Banning in an amount of over $800,000 and did not have the capacity to make that payment and was therefore prima facie insolvent and that in those circumstances the only way Mrs Frigger's evidence could establish that CAT was solvent would be for her or Mr Frigger to personally undertake they were to meet the debts of CAT as and when they fell due, which undertaking was not forthcoming in either of her affidavits filed in opposition to the winding up application, the conclusion that CAT ought be wound up was inevitable. The outcome would have been no different no matter who represented the plaintiffs at the hearing.

382 Therefore I am of the view this action by the plaintiffs against Mr Clavey is a collateral attack on the decision of the master in Professional Services of Australia Pty Ltd (Administrator Appointed) v Computer Accounting and Tax Pty Ltd [No 3] and would on this basis have ordered these proceedings be stayed as an abuse of process.

383 By par 17.4 of its defence the defendant pleads:

... the matters complained of by the plaintiffs concern the defendant's work out of court intimately connected with the conduct of proceedings in court and, in the premises, the defendant is immune from any liability (which is denied) in relation to that work.

384 The plea is based upon the decision of the High Court in Giannarelli v Wraith (1988) 165 CLR 543 which held a barrister was not subject to a common law duty of negligence in relation to work done in court and the same immunity attaches to a solicitor acting as an advocate in court as to a barrister. Therefore it is submitted the immunity applies to and provides a defence to the majority of the work performed by Mr Clavey the subject of allegations in pars 9 and 10 of the statement of claim.

385 Given my earlier finding as to the circumstances in which Mr Clavey terminated the retainer it is unnecessary for me to consider the defence based upon advocate's immunity and I do not propose to do so.

386 It follows from my findings that I order the plaintiffs' action be dismissed.

387 Given my conclusion the plaintiffs' action must be dismissed it is unnecessary for me to consider the claim for damages and the schedule of damages which has been handed up. However, in the event I am wrong in my conclusion, and while there are difficulties in assessing damages given the adverse credibility findings I have made against Mrs Frigger, I propose to assess damages on a provisional basis.

388 The schedule of damages evolved through a number of revisions. It is a difficult document to follow. Some items were abandoned during the course of the trial and in closing. The final version of the schedule became exhibit 13.

389 In any event, to succeed in its claim for damages it is an essential element for the plaintiffs to establish:

(a) that they would have been successful in obtaining a stay (or suspension) of the Court of Appeal's orders (the suspension application); and

(b) that they would have successfully resisted the winding up application of Computer Accounting and Tax Pty Ltd (in liquidation) (CAT) (the winding up application).

390 I have already found the plaintiffs would not have successfully opposed the winding up application had either Mr Clavey remained acting or an experienced competent solicitor or counsel appeared on behalf of the plaintiffs on the winding up application.

391 Significantly, in relation to the suspension application, the plaintiffs were seeking to suspend or stay an order of the Court of Appeal to repay over $800,000 which CAT had received from the original judgment. That money had been received by CAT notwithstanding an attempt by the appellants in the Court of Appeal to have the original judgement stayed (Professional Services of Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [2008] WASCA 222) and immediately disbursed to the plaintiffs' superannuation fund or to their benefit personally.

392 Had the true position taken by the plaintiffs as to the assets of CAT been known to the Court of Appeal, the plaintiffs (and CAT) would never have received the benefit of that money in the first place.

393 This is no mere speculation. The Court of Appeal has since held as much in Frigger v Professional Services of Australia Pty Ltd [No 3]. In that case, in light of the affidavits contained in exhibits 6.1 and 6.2, as I have earlier referred to [95], the court stated [109]:

All that is necessary is to observe that [Mrs Frigger] has been guilty of bending the truth. If all that Mrs Frigger has now offered about CAT's circumstances as at 23 September 2008 had been put before Buss JA, a stay would almost certainly have been granted and the freezing and ancillary orders would not have been necessary.

394 In those circumstances, where millions of dollars of assets said to have been available to creditors were either dissipated (or never belonged to CAT in the first place), the prospects of then obtaining a stay of the Court of Appeal's repayment order were remote.

395 Of course the stay application was never proceeded with.

396 Counsel for the plaintiffs submitted that it was highly probable that a properly structured application for a stay would have been successful thereby making the application for the winding up unnecessary and it would not have been proceeded with. By reference to Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638 and Dal Pont at [4.170] it was submitted I should award damages on the basis that because of the defendant's breach of contract or negligence the plaintiffs have lost the opportunity or the chance to obtain a stay of the Court of Appeal judgment and thereby prevent CAT from being wound up which would have meant the various costs it is alleged were incurred because CAT was ordered to be wound up, and because of that there was nothing to be gained in proceeding with the stay application, which was not pursued, would not have been incurred.

397 In my view for the reasons I will shortly explain, this is not a case on which damages can be assessed on the basis the plaintiffs have suffered, through the defendant's breach of contract or negligence, the loss of a more successful outcome including the prospect of a favourable settlement.

Plaintiffs' schedule of damages - exhibits 12 and 13

398 This claim appears to be a claim for a refund of the legal fees incurred by and paid by the plaintiffs when the defendant was acting for them. It is unclear on what basis the plaintiffs' claim they are entitled to a refund of the fees paid to the defendant. The plaintiffs have not, for example, established the work was either not performed or not performed competently or that the defendant has overcharged.

399 The reasonableness or otherwise of the fees charged by the defendant are properly a matter for a taxation of costs by a taxing officer. However, in my view the plaintiffs have not adduced any evidence which leads me to conclude there is any basis for the fees paid to the defendant to be refunded to them. As I have already found, in my view the work performed and undertaken by the defendant was properly, reasonably and competently performed.

400 The plaintiffs in effect claim reimbursement of legal costs paid to Holborn Lenhoff Massey, the solicitors for the liquidator, in relation to the suspension application in the sum of $6,507.77 and two further amounts they allege were paid to their subsequent solicitor Mr Dutton in the sum of $2,000 and $1,925.

401 No proper basis has been advanced as to how had the defendant been in breach of the contract by the terminating the retainer the costs paid to Holborn Lenhoff Massey are causally related. In my view there is no causal relationship and the plaintiffs would not be entitled to damages in the sum of $6,507.77 in reimbursement of the costs they paid to Holborn Lenhoff Massey,

402 In relation to the sum of $2,000 there is no evidence as to what that item relates or again how it is causally relevant to any breach of contract on the part of the defendant. I would dismiss that claim.

403 Although Mr Dutton gave evidence he rendered an account for $1,925, there is no evidence to what the account relates. I would therefore dismiss that claim for damages.

404 An amount of $168,854.48 is claimed, although during closing submissions the item for WHK Horwath in the sum of $18,296.67 was reduced to $15,846.57 and claims for $2,150 for HLM and $770 for Thompson were abandoned. All of the individual items claimed relate to costs incurred, mainly legal fees, in relation to the winding up application. They include legal costs paid by the plaintiffs to their own solicitors and counsel and also to solicitors for the opposing party. There is also a claim for court fees.

405 The claim in respect of the various costs is inconsistent with the plaintiffs' action against the defendant which is that but for the defendant's breach of contract and breach of fiduciary duties and a duty of care at common law CAT would not have been wound up. Therefore the action must proceed on the basis that the application to wind up CAT would always have proceeded and the plaintiffs would have opposed the application necessarily incurring their own legal costs. It is unclear, and no evidence has been led, as to what legal costs would reasonably have been incurred and recovered by the plaintiffs had the winding up application been successfully opposed. For example, had the plaintiffs given the unconditional undertaking to meet the debts of CAT as referred to by Master Sanderson and it was on that basis an order to wind up CAT was not made, it is unclear what would have been the consequence in relation to costs. It seems to me the plaintiffs would always have incurred at least their own legal costs which cannot possibly be causally related to any breach of contract or breach of duty on the part of the defendant.

406 Further, the claim proceeds on the basis the winding up order would not have been made. As I have earlier found it was inevitable given CAT was insolvent that the application for an order to wind up CAT would have succeeded, whether or not the defendant remained instructed and appeared on behalf of the plaintiffs in the application. Therefore the plaintiffs would always have incurred the costs they claim. Such costs are not causally related to the plaintiffs' cause of action against the defendant.

407 Also, some of the costs claimed relate to costs incurred before the defendant was instructed. For example, there are two claims of $10,000 each in relation to costs paid to Mr Trinick, the liquidator appointed by the plaintiffs prior to Mr Kitay being appointed the provisional liquidator. Putting to one side that there is no evidence as to what those amounts relate to, the basis upon which such costs can be recovered in the plaintiffs' action was not made clear. The argument might be that had the application to wind up CAT been dismissed such costs may have been recovered but if that is the basis of the argument advanced it remains unclear to me how those costs could have been recovered by the plaintiffs.

408 It is otherwise unnecessary for me to deal with each individual item or invoice claimed. In my view no proper basis has been advanced as to how such claims are causally related to the plaintiffs' causes of action against the defendant. Therefore even had I found the defendant was in breach of the retainer I would not award the plaintiffs any of the winding up application costs claimed.

409 Counsel for the plaintiffs submitted that had the suspension application been properly litigated the winding up application would have fallen away and as a result costs orders would not have been incurred after the date the defendant ceased acting and any costs incurred before that day would have been varied or made in favour of the plaintiffs. Given the suspension application was adjourned by the plaintiffs on 16 April 2010, two weeks before the winding up application was heard on 28 April 2010, and not proceeded with when the plaintiffs were separately legally represented, there is no merit in the submission and I reject it.

410 An amount of $35,889.12 is claimed. The amount related to the costs of a completely unrelated Supreme Court action (Forbes v Computer Accounting and Tax Pty Ltd [2009] WASC 89) and to the liability for those costs which were paid by the plaintiffs. In particular, they include:

(a) the bill of costs in the amount of $14,207.75, which relates to Mrs Frigger's attempt to get a refund of the amount paid to Mr Forbes (ts 961 - 962);

(b) Mr Stokes' account dated 3 September 2009 in the sum of $2,948.00 for representing Mrs Frigger in relation to Mr Forbes' application in the proceedings (ts 961 - 963);

(c) $18,247.50 as the amount of the statutory demand by Mr Forbes that was paid in January 2010 (ts 960);

(d) $184.50 as payment of the application fee in Mrs Frigger's application to intervene in the review of the bill of costs (ts 964); and

(e) $184.50 as payment of the application fee in Mrs Frigger's application for review of the bill of costs (ts 964).

411 The claim is nonsensical and incomprehensible. The costs were incurred before the defendant was instructed. They have no relationship with or connection to the plaintiffs' action against the defendant.

412 The plaintiffs' counsel submitted that had the suspension application been successful the costs orders in relation to the statutory demand would have been varied and Mrs Frigger would have been in a position to properly litigate the question before the court as to whether the basic debt was payable. Again, it is a submission without merit and I reject it.

Items 5 - 7 - Becton Office Fund ($52,146.33), Fincorp dividends ($5,998.96), Public Accounting Practice ($115,000)

413 In his written closing submissions counsel for the plaintiffs abandoned the claim for damages in respect of these items and it is therefore unnecessary for me to deal with them.

414 In summary I am not satisfied the plaintiffs have suffered any damages and had I found the defendant was in breach of the retainer or in breach of a fiduciary duty or duty of care I would not have awarded any item in the schedule of damages claimed by the plaintiffs. Therefore, I would have dismissed any claim for damages.

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA

CITATION : FRIGGER -v- CLAVEY LEGAL PTY LTD [No 3] [2015] WADC 21 (S)

Costs - Indemnity costs - Unreasonable and improper conduct of litigation - Calderbank offer

Corporations Act 2001 (Cth)

District Court of Western Australia Act 1969 (WA)

Legal Profession Act 2008 (WA)

Supreme Court Act 1935 (WA)

Atwell v Roberts [2013] WASCA 37 (S)

Calderbank v Calderbank [1975] 3 All ER 333

Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66 (S)

Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225

Flotilla Nominees Pty Ltd v Western Australia Land Authority (2004) 28 WAR 95; [2003] WASC 122 (S)

Ford Motor Company of Australia Ltd v Lo Presti (2010) 41 WAR 1; [2009] WASCA 155

Frigger v Clavey Legal Pty Ltd [No 3] [2015] WADC 21

Frigger v Professional Services of Australia Pty Ltd [No 3] [2014] WASCA 69

Glew v Frank Jasper Pty Ltd [2008] WASCA 186

Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority [No 2] [2005] VSCA 298; (2005) 13 VR 435

Heartlink Ltd v Jones as liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASA 254 (S)

Town of Port Hedland v Hodder [No 2] [2012] WASCA 212 (S)

Unioil International Pty Ltd v Deloitte Touche Tohmatsu (1997) 18 WAR 190

1 On 12 March 2015 I delivered reasons for decision Frigger v Clavey Legal Pty Ltd [No 3] [2015] WADC 21 dismissing the plaintiffs' action and ordering that:

1. The plaintiffs' action be dismissed and there be judgment for the defendant.
2. The plaintiffs pay the defendant's costs including any reserved costs to be taxed.
3. The defendant have liberty to apply within 21 days for any special costs order.

2 Pursuant to the order for liberty to apply for special costs orders, on 2 April 2015 the defendant filed a minute of proposed orders for indemnity costs or, alternatively, special costs orders in the following terms:

1. In substitution for order 2 made by his Honour Judge Herron on 12 March 2015, the plaintiffs pay all the costs incurred by the defendant in the action except insofar as they are of an unreasonable amount or have been unreasonably incurred, so that subject to the above exceptions the defendant is completely indemnified by the plaintiffs for its costs.
2. Alternatively, from 14 June 2013, the plaintiffs pay all the costs incurred by the defendant in the action except insofar as they are of an unreasonable amount or have been unreasonably incurred, so that subject to the above exceptions the defendant is completely indemnified by the plaintiffs for its costs.
3. Alternatively:

(1) the plaintiffs pay the defendant's costs of the transcript incurred by the defendant during the action;

(2) the defendant's costs under item 17 and 20(b) and (d) be taxed without reference to the limits fixed under the Supreme Court scale of costs.

3 On 13 August 2015 I made orders requiring the parties to file submissions in support of, or in opposition to, the defendant's application for indemnity costs or special costs orders together with any materials relied upon in support of their submissions and otherwise ordered the defendant's application be determined on the papers.

4 For the reasons that follow I have determined the defendant is entitled to an order for indemnity costs.

5 The plaintiffs commenced this action by writ filed on 12 April 2011.

6 In November 2012 the trial in the action was listed for five days commencing on 17 June 2013. On 12 June 2013 the trial dates were vacated on the application of the plaintiffs by her Honour Wager DCJ who also ordered that the plaintiffs pay the defendant's costs thrown away by the adjournment of the trial to be taxed if not agreed in any event.

7 In September 2013 the trial was re-listed for five days commencing on 31 March 2014. On 28 March 2014 his Honour Derrick DCJ vacated the trial dates and ordered the plaintiffs pay the defendant's costs of the trial thrown away by the adjournment to be taxed and paid forthwith.

8 The further re-listed trial proceeded before me on 15 - 19 September 2014, 13 - 17 October and 22 - 23 October 2014.

9 The defendant seeks indemnity costs orders on the basis of the plaintiffs' improper conduct, or alternatively on the basis of the plaintiffs' unreasonable refusal of the defendant's Calderbank offer.

10 Alternatively, if I am not prepared to make an order for indemnity costs, the defendant seeks a special costs order.

11 Pursuant to s 64(3) of the District Court of Western Australia Act 1969 (WA) and s 37(1) of the Supreme Court Act 1935 (WA), a judge of the District Court has a broad discretion to determine the costs to be paid by the plaintiffs to the defendant.

12 In Glew v Frank Jasper Pty Ltd [2008] WASCA 186 [14] - [16] the Court of Appeal said:

The usual costs order is one for party and party costs. An order for indemnity costs will only be made if there is some special or unusual feature in the case that justified departure from the ordinary practice. The court has jurisdiction to make an indemnity costs order whenever justice requires such an order: see Unioil International Pty Ltd v Deloitte Touche Tohmatsu (No 2) (1997) 18 WAR 190, 191.

Most indemnity costs orders involve circumstances where there has been some element of improper or at least unreasonable conduct on the part of the parties or their legal advisers. See the examples given in Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122(S); (2003) 28 WAR 95 [9]. If there has been improper or unreasonable conduct in the conduct of litigation, then an indemnity costs order may be made as a mark of disapproval on the part of the court about that conduct.

However, speaking generally, an indemnity costs order will not be made if the costs which would be recovered by an order for party and party costs or a special costs order would result in the recovery of the successful party's legal costs.

13 In Flotilla Nominees Pty Ltd v Western Australia Land Authority (2004) 28 WAR 95; [2003] WASC 122 (S) [8] - [9] Pullin J said:

The usual costs order is one for party and party costs. An order for indemnity costs will only be made if there is some special or unusual feature in the case to justify a departure from the ordinary practice. In effect, the court has jurisdiction to make an indemnity costs order whenever justice requires such an order. Unioil International Pty Ltd v Deloitte Touche Tohmatsu (1997) 18 WAR 190 at 191; Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225 at 233. When the justice of the case does require such an order, then the court will have a discretion as to whether the order should be made.

Many examples can be found where an indemnity costs order has been made. Suffice it to say that most of these involve some element of improper, or at least unreasonable, conduct on the part of the parties or their legal advisors in relation to the case. See the examples given by Sheppard J in Colgate-Palmolive v Cussons (supra) at page 233 and the circumstances referred to in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397 and in Unioil's case. Thus, the making of allegations of fraud knowing them to be false, or the commencement of proceedings for some ulterior motive, or in wilful disregard of known facts or the established law, or the making of allegations which ought never to have been made, or the undue prolongation of a case on groundless contentions, and even an unreasonable refusal to accept an offer of compromise, may lead to indemnity costs orders. See Colgate-Palmolive v Cussons (supra) at 233. The creation of false issues by tactical denials or failures to admit the facts may, in the circumstances of particular cases, lead to such an order: Unioil's case. An action commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success, may lead to such an order because such action might be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts or the clearly established law. See Fountain Selected Meats (supra).

Having said all of that, however, there is still a place for indemnity costs orders. It will be appropriate in cases where there has been improper or unreasonable conduct on the part of a party or his legal advisors. An order for an indemnity costs order is a mark of disapproval on the part of the court about the improper or unreasonable conduct of litigation, even though there should not be much difference in the costs recovered under such an order compared with recovery under a properly formulated special costs order. If the conditions warrant an indemnity costs order, it is likely that the Judge making the order will be more inclined to allow an increase in the hourly rates or an increase in the limits. An order detailing those increases should, in my opinion, be made even where indemnity costs orders are made.

See also Ford Motor Company of Australia Ltd v Lo Presti (2010) 41 WAR 1; [2009] WASCA 155 [63] Frigger v Professional Services of Australia Pty Ltd [No 3] [2014] WASCA 69.

15 The categories in which the court can exercise the discretion to make an order for indemnity costs order are not closed: Unioil International Pty Ltd v Deloitte Touche Tohmatsu (1997) 18 WAR 190, 191.

16 The defendant submits an order for indemnity costs in its favour ought be made because of the plaintiffs' improper conduct on the following grounds:

(a) without reasonable grounds, the plaintiffs alleged fraud on the defendant's part until they abandoned the claim on the second day of the trial ([20] of my reasons);

(b) the plaintiffs' approach to discovery was manifestly inadequate and unfair to the defendant ([139] of my reasons);

(c) Mrs Frigger gave untruthful, misleading and or intentionally false evidence ([101], [138], [143], [148], [169] of my reasons); and

(d) as a result of the plaintiffs' allegation of fraud, the plaintiffs' approach to discovery, and Mrs Frigger's conduct in giving evidence, the action was unduly prolonged.

17 In their amended statement of claim filed 7 October 2011, the plaintiffs pleaded that the defendant falsely created evidence to support a defence of loss of trust and confidence as its ground for termination of the costs agreement with the plaintiffs; in effect, it was an allegation of an attempt to pervert the course of justice against the defendant. It was a particularly serious allegation of fraud. This pleading was maintained in some form or another through to the eventual trial of the action.

18 By a minute of proposed re-amended substituted statement of claim dated 25 March 2014, prepared by the plaintiffs' solicitors Peter J Griffin & Co and settled by Mr John Brooksby as counsel, it was proposed that the allegation of fraud be abandoned. In its written submissions the defendant submits it can be inferred that before the minute was finalised and settled by counsel, counsel and the plaintiffs' solicitors considered the evidentiary basis for the fraud allegation, advised the plaintiffs of the basis upon which an allegation of fraud can be made and the requirements for the making of an allegation of fraud, advised the plaintiffs there was no proper basis upon which the allegation could be made and that it ought be abandoned and took the plaintiffs' instructions in that regard. The plaintiffs in their detailed and lengthy written submissions filed in response to the defendant's written submissions do not dispute or challenge the factual basis upon which I am asked to draw the inference, nor do they submit that the inference cannot be reasonably drawn.

19 I accept the defendant's submission. In my view not only is it, on the balance of probabilities, a reasonable inference, it is the only inference that can be reasonably drawn. In summary, I find the plaintiffs were advised by counsel there was no proper basis upon which an allegation of fraud could be made and that it ought be abandoned. Despite that advice the plaintiffs persisted with an allegation of fraud.

20 Ultimately, although Peter J Griffin & Co remained on the court record as the plaintiffs' solicitors, Mr Brooksby did not remain as counsel and when the trial proceeded before me other counsel appeared on behalf of the plaintiffs.

21 As I explained in my reasons [17] - [20] when the trial before me commenced on 15 September 2014, counsel who then appeared on behalf of the plaintiffs applied to filed a re-amended substituted statement of claim in accordance with a minute dated 1 September 2014 signed by the plaintiffs. That minute was not the same as the minute of proposed re-amended substituted statement of claim dated 25 March 2014 settled by counsel. The minute of 1 September 2014 maintained an allegation of fraud. For the reasons I explained I refused the application to file a re-amended substituted statement of claim in accordance with the minute dated 1 September 2014. However, during his opening address counsel for the plaintiffs abandoned any allegation of fraud against the defendant and I ordered par 13 of the re-amended substituted statement of claim dated 13 December 2013 be deleted. The allegation of fraud was only abandoned after senior counsel for the defendant made submissions regarding the adequacy of the pleading and how the case had been opened on behalf of the plaintiffs.

22 In those circumstances the defendant submits that the plaintiffs made the allegation of fraud without any, or any sufficient, supporting evidence and maintained the allegation when they knew or ought to have known there was no reasonably arguable basis for it and in circumstances where no evidence was ever adduced in support of the application. I accept that submission.

23 In their written submissions filed in opposition to the defendant's application for indemnity costs on the basis of the plaintiffs' improper or unreasonable conduct, the plaintiffs, in summary, submit:

1. That the defendant's conduct in relation to the retainer agreement between the parties and in the course of the litigation is conduct calculated to occasion unnecessary litigation or expense or is conduct involving the doing of a wrongful act in the course of the retainer agreement [15] - [17].
2. That the defendant through its legal advisors has unnecessarily prolonged the length of the litigation and the trial and unnecessarily raised issues by:

(a) opposing the filing and exchange of witness statements; and

(b) cross-examined Mrs Frigger on issues irrelevant to the issues in dispute 'for the sole purpose of the gratuitous character assassination of Mrs Frigger' [12], [78], [82(f)], [87].

1. That prior to the trial Ms Zohar and Mr Clavey discussed their oral evidence to ensure it coincided [40].
2. The opposition to the provision of witness statements was for the purpose of the forensic tactics of the defendant to cross-examine Mrs Frigger on irrelevant issues [41].
3. The defendant's witnesses gave false evidence at trial [65].
4. The defendant ambushed the plaintiffs by refusing to file witness statements [68].
5. Had the plaintiffs not been ambushed by the defendant, the plaintiffs would not have withdrawn their fraud allegations [68].
6. The defendant's approach to discovery was a forensic tactic to conceal the false documentary and oral evidence of Mr Clavey and Ms Zohar [73(f)].
7. Evidence was concealed from the plaintiffs until the last day of the trial [75].
8. Mr Clavey perjured himself in his affidavit of 13 April 2010 [79].
9. The allegations of perjury and fraud had been made out against Mr Clavey and Ms Zohar [102].
10. As a result of the defendant's misconduct there ought to be no order for costs [76].

25 Therefore, having, at the commencement of the trial through their counsel, withdrawn the allegation of fraud against the defendant, the plaintiffs renew and elaborate upon the allegation of fraud and now make allegations of perjury.

26 I reject the plaintiffs' submissions. They are without foundation or substance. They are entirely unmeritorious. All that they do is seek to emphasise the plaintiffs' determination to make serious allegations against the defendant (Mr Clavey and Ms Zohar) without any proper basis for such allegations, in circumstances where, in March 2014, they were advised there was no proper basis for making an allegation of fraud and it ought be abandoned, and after the allegation was actually abandoned at trial by counsel for the plaintiffs because, I infer, they were again advised there was no proper basis for the allegation and it must be abandoned. Despite no further evidence being produced or any sensible further basis being advanced to make such serious allegations, the plaintiffs, who are no longer legally represented in this action, persist with the allegations. Those matters underline and, without more, readily make the case for why an order for indemnity costs ought be made, that is, to mark the court's disapproval about the improper and unfounded allegations of fraud and perjury made by the plaintiffs.

27 In such a case, an indemnity costs order is appropriate: Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225, 233; Flotilla [9]

28 I am satisfied there was no proper or sufficient basis upon which the allegation of fraud could be made. No evidence was, or has been, produced to support or justify the allegation. Essentially, the only thing relied upon in support of the allegation was Mrs Frigger's unsubstantiated allegation that the defendant's contemporaneous file notes were not prepared when they were purported to be prepared and were created at some later time. It was an allegation entirely devoid of merit and ought not have been made or maintained. Certainly it is an allegation which ought not have been renewed or persisted with. The renewed allegation of fraud and the fresh allegation of perjury are equally lacking in substance and merit.

29 I am satisfied the plaintiffs by maintaining the allegation of fraud against the defendant after receiving legal advice to withdraw the allegation when they were represented by counsel, Mr Brooksby, and then to renew the allegation after they withdrew it at the commencement of the trial, after receiving further legal advice from counsel, constitutes improper and unreasonable conduct on the part of the plaintiffs. I am satisfied that in those circumstances it is appropriate that an order for indemnity costs be made. Subject to what I will shortly explain in relation to the consequences of the defendant's Calderbank offer dated 21 May 2013, I would have been prepared to make an order that the plaintiffs pay the defendant's costs of the action on an indemnity basis from 25 March 2014 to reflect my disapproval of the plaintiffs' improper and unreasonable conduct in persisting with the fraud allegation after receiving legal advice to abandon the allegation.

30 At [139] of my reasons for decision I conclude for the reasons therein set out that the plaintiffs' approach to discovery was inadequate and unfair to the defendant. The plaintiffs' inadequate approach to discovery persisted up to and throughout the trial.

31 In my reasons for decision I made adverse credibility findings against Mrs Frigger and found she was an unreliable, dishonest and untruthful witness who deliberately falsely represented the financial status of Computer Accounting and Tax Pty Ltd (CAT).

32 I am satisfied that because of the complexity and variety of issues raised by the plaintiffs and because it was necessary for the defendant to address Mrs Frigger's credibility, the length of the trial was unnecessarily prolonged. It was necessary to consider and deal with a large volume of documentation arising from a multitude of court actions in which the plaintiffs and their former company CAT are or were involved and in which affidavits, in particular by Mrs Frigger, were filed annexing documentation giving in many instances inconsistent, contradictory and implausible explanations. It was necessary for the defendant to spend considerable time preparing for the trial and in preparing to cross-examine Mrs Frigger on the evidence given by her in this action and in the multitude of other court actions, to reveal inconsistencies in her evidence and to establish that she was not a credible witness. The defendant submits, which submission I accept, that Mrs Frigger's inadequate approach to discovery, the maintenance of the allegation of fraud until after the commencement of the trial, the need to deal with a large volume of documentation filed in a multitude of court actions and to respond to the multiple issues raised by the plaintiffs, unnecessarily prolonged the duration of the trial and caused the defendant to incur considerable unnecessary costs. The defendant submits that in those circumstances an order for indemnity costs ought be made to mark the court's disapproval of the plaintiffs' wholly improper conduct of this litigation. It is submitted an indemnity costs order should compensate the defendant for all of the costs it has incurred in the action except those costs that are unnecessarily incurred or are of an unreasonable amount.

33 I find the plaintiffs' conduct of the litigation, including their inadequate approach to discovery, was improper and unreasonable and that an order for indemnity costs in favour of the defendant is in such circumstances warranted.

34 By letter dated 21 May 2013 the defendant made an offer to the plaintiffs to settle the action for the sum of $35,000, the terms of settlement, if the offer was accepted, to be formalised in a deed of settlement. That letter set out in considerable detail the basis upon which the defendant considered each of the claims brought by the plaintiffs was bound to fail. In relation to the allegation of fraud it was pointed out there was no evidence to support the allegation.

35 Further, the defendant's solicitors submitted to the plaintiffs they would be unable to prove CAT's solvency at trial, meaning that all loss flowing from the winding up of CAT was a loss which would have occurred in any event regardless of the involvement of the defendant. In other words even if the defendant was at fault the plaintiffs did not suffer any loss as a result. The defendant expressed the view that the plaintiffs' claims were bound to fail at trial and the offer was made purely on commercial grounds to avoid the costs and inconvenience of a trial. The offer was expressed to be open for acceptance until 4.00 pm on 14 June 2013, the last working day before the trial was originally due to commence on 17 June 2013.

36 Importantly, the letter concluded in the following terms:

If the Offer is not accepted, then I will refer the Court to this correspondence as to the issue of costs.

This Offer is made pursuant to the principles set out in the decision of Calderbank v Calderbank [1973] 3 All ER 333 and other decisions applying the principles arising from that decision. In accordance with the principles in Calderbank, an application for indemnity costs will be made if the final outcome for you in relation to the claim is not more favourable than that contained in this Offer.

The Offer is open for acceptance until 4.00pm on 14 June 2013. Please communicate the plaintiffs' acceptance in writing by no later than the stipulated time.

As stated above, I reserve the right to refer the Court to this correspondence as to the issue of costs and appropriate indemnity costs.

37 By letter dated 29 May 2013 the plaintiffs rejected that offer and advised they would accept $430,000 in full and final settlement of its claim against the defendant. The plaintiffs maintained, or at least were not prepared to abandon, the allegation of fraud that the defendant had fabricated evidence.

38 There is a distinction between whether a party's conduct in the course of litigation should result in an award of indemnity costs on the one hand and whether a party has unreasonably rejected a Calderbank offer on the other: Ford Motor Company [63].

39 It is well established that, if a party unreasonably rejects a Calderbank offer, the court may consider making an order for indemnity costs in favour of the offeror: Ford Motor Company of Australia Ltd v Lo Presti [16], [23] - [24].

40 All the relevant facts and circumstances must be considered in determining whether the rejection was unreasonable, including:

(a) the stage of the proceeding at which the offer was received;

(b) the time allowed to the offeree to consider the offer;

(d) the offeree's prospects of success, assessed as at the date of the offer;

(e) the clarity with which the terms of the offer were expressed; and

(f) whether the offer foreshadowed an application for indemnity costs in the event of the offeree rejecting it: Ford Motor Company of Australia Ltd [17], [19], citing with approval: Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority [No 2] [2005] VSCA 298; (2005) 13 VR 435 [25].

41 The concept of unreasonableness is not to be qualified by words such as manifestly, plainly, or so unreasonable, which suggest a more stringent test: Ford Motor Company of Australia Ltd [28].

42 Whether rejection was unreasonable is to be assessed at the time the offer was rejected and without the benefit of hindsight. The court should not determine the issue of unreasonableness by adopting the judgment sum ultimately awarded as a yardstick to measure the reasonableness or unreasonableness of rejection of the offer: Ford Motor Company of Australia Ltd [89].

43 The mere fact that the recipient of a Calderbank offer is ultimately worse off than he or she would have been had the offer been accepted does not mean that its rejection was unreasonable: Ford Motor Company [18].

44 The party who makes a Calderbank offer that is rejected bears the onus of satisfying the court that it should make an order for indemnity costs in its favour: Ford Motor Company [21].

45 The plaintiffs submit the defendant cannot rely on the Calderbank offer in circumstances where the plaintiffs were unaware what the defendant's oral evidence would be and where the defendant refused to consent to the exchange of witness statements. It was therefore, it is submitted, not unreasonable for the plaintiffs to reject the Calderbank offer.

46 The plaintiffs also repeat their submission that the defendant's witnesses gave false evidence at trial and therefore it was not unreasonable for the plaintiffs to reject the offer.

47 Finally, the plaintiffs' submit that the offer contained a condition that if accepted the plaintiffs were required to sign a deed of release on behalf of CAT in the stay application, the winding up application and the DOCA application, which was contrary to s 471A(1) Corporations Act 2001 (WA). Therefore, it is submitted, the offer was incapable of being accepted because it required the plaintiffs to sign a deed of release on behalf of CAT in circumstances where their powers over CAT had ceased. The rejection of the offer, that is, conditional on the release on unrelated proceedings may, it is submitted, be considered reasonable.

48 I am satisfied that for the following reasons the plaintiffs' rejection of the defendant's Calderbank offer was unreasonable:

1. The offer which was made, 26 days before the trial was due to commence on 17 June 2013 and before the trial dates were vacated on 12 June 2013, was in my view, made at a sufficiently early stage in the history of the District Court proceedings, which if it had been accepted would have avoided the considerable costs incurred by the defendant in proceeding to trial.
2. The offer, which was open for acceptance until 4.00 pm on 14 June 2013, allowed for a sufficient length of time for the plaintiffs to consider the offer.
3. The extent of the compromise offered, which was expressed as a commercial offer, would have met a significant part of the plaintiffs' costs noting that the plaintiffs in their letter of 29 May 2013 rejecting the offer said they were advised by counsel that their legal costs would be in the order of $50,000.
4. The plaintiffs' prospects of success were in my view negligible. In its letter to the plaintiffs, the defendant expressed the view that the claims in the action were bound to fail. In my view at the time that offer was expressed, and without having regard to the decision I have since reached, the defendant's assessment was a realistic one.
5. The letter addressed each of the plaintiffs' pleaded alleged causes of action explaining in detail and at length why the defendant believed the plaintiffs would not succeed at trial. Essentially that letter reflected the defendant's defence to the plaintiffs' causes of action and how the defendant conducted its defence at trial.
6. The terms of the offer were, as I have already observed, set out in considerable detail and in my view were set out in clear terms. I reject the plaintiffs' submission that the offer was incapable of being accepted because it required the plaintiffs to sign a deed of release on behalf of CAT in circumstances where they had no authority to do so. In my view the terms of the offer which referred to the terms of settlement needing to be formalised in a deed of settlement, simply reflected the causes of action pleaded by the plaintiffs in their statement of claim against the defendant.
7. Section 471A of the Corporations Act 2001 (Cth) states that the powers of an officer of a company are suspended during the company's winding up. In my view the defendant's written offer of settlement did not require the plaintiffs to sign a deed of release on behalf of CAT where they were prevented from doing so because of s 471A. All that the Calderbank letter did was identify the various causes of action alleged against the defendant and require the plaintiffs in their personal capacity to release and discharge the defendant from all claims in the action and arising from the action. The defendant's solicitors would clearly have known of the effect of s 471A and would have known the plaintiffs could not have entered into a deed of release on behalf of CAT.
8. Therefore, I reject the plaintiffs' submission that the offer was incapable of being accepted in the terms proposed by the defendant.
9. Finally, the offer foreshadowed that in the event the offer was not accepted and in accordance with the principles in Calderbank v Calderbank [1975] 3 All ER 333 an application for indemnity costs would be made if the final outcome for the plaintiffs was not more favourable than that contained in the offer.

49 In my view the defendant's Calderbank offer was made in clear and unambiguous terms. The plaintiffs' rejection of the offer was unreasonable.

50 Therefore in those circumstances and on this further basis I also conclude the defendant is entitled to an order in its favour for indemnity costs and I accordingly make such an order.

51 I am satisfied it is proper and reasonable that the plaintiffs be ordered to pay the defendant's costs on an indemnity basis from the date when the Calderbank offer expired on 14 June 2013.

52 Finally, the defendant, in the event I am not prepared to make an order for indemnity costs, seeks a special costs order pursuant to s 280(2) of the Legal Profession Act 2008.

53 The District Court has jurisdiction to make a special costs order by reason of s 280(2) of the Legal Profession Act 2008 (WA) which relevantly states:

(2) ... if a court or judicial officer is of the opinion that the amount of costs allowable in respect of a matter under a costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter, the court or officer may do all or any of the following -

(a) order the payment of costs above those fixed by the determination;

(b) fix higher limits of costs than those fixed in the determination;

(c) remove limits on costs fixed in the determination;

(d) make any order or give any direction for the purposes of enabling costs above those in the determination to be ordered or assessed.

54 Special costs orders can be made either pursuant to section 280(2) of the LPA or pursuant to section 37(1) of the SCA. In either case, before the power will be exercised, the court must form the view that the amount of costs allowable in respect of a matter under a legal costs determination is inadequate, in the sense that there is a fairly arguable case that the bill to be presented to the taxing officer may properly tax at an amount which is greater than the limit which would be imposed by the relevant costs determination. Secondly, the court must conclude that the inadequacy arises because of the unusual difficulty, complexity or importance of the matter: Heartlink Ltd v Jones as liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASA 254 (S) [11]; Town of Port Hedland v Hodder [No 2] [2012] WASCA 212 (S) [14].

55 The court is in a position to form the opinions required under the section as matters of impression rather than science or mathematics: Atwell v Roberts [2013] WASCA 37 (S) [15].

56 The word unusual in section 280(2) of the LPA qualifies only the difficulty of the matter and not its complexity or importance: Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66 (S) [5].

57 The plaintiffs commenced this action in April 2011. The scales applicable to the costs sought by the defendant are therefore:

(a) Legal Practitioners (Supreme Court) (Contentious Business) Determination 2010 (WA) (2010 Scale) to 31 October 2012;

(b) Legal Practitioners (Supreme Court) (Contentious Business) Determination 2012 (WA) (2012 Scale) from 1 November 2012 to 30 June 2014; and

(c) Legal Practitioners (Supreme Court) (Contentious Business) Determination 2014 (WA) (2014 Scale) from 1 July 2014.

58 Clause 3 in each of the 2010 Scale, 2012 Scale and 2014 Scale sets out that the determinations made therein apply to proceedings in the District Court.

59 The defendant submits that, based on the estimates set out in Ms Duthie's affidavit, of 21 August 2015 items 17, 20(b) and 20(d) of the defendant's bill of costs for this action would properly be taxed at amounts higher than those amounts allowed in the scales:

Senior counsel for the second and each successive day of hearing

60 On this basis, the defendant submits that the costs that will be allowed by a taxing officer under the applicable scales will be inadequate.

61 Having established that the amounts allowed under the applicable scales are likely to be inadequate, the Court must determine that this inadequacy arises because of the unusual difficulty, complexity or important of the matter.

62 In its written submissions the defendant submits:

1. The factual matrix of the action was complex. The allegations made by the plaintiffs against the defendant required detailed consideration of the following:

(a) The claim made by the plaintiffs against Professional Services of Australia Pty Ltd and the estate of Martin Banning - Supreme Court, CIV 2265 of 2006;

(b) The appeal by Professional Services of Australia Pty Ltd and the estate of Martin Banning - Supreme Court, CACV 76 of 2008 and CACV 118 of 2014;

(c) Special leave application by the plaintiffs to the High Court - P47 of 2009;

(d) Supreme Court matters involving the winding up of CAT, the liquidator of CAT, the deed of company arrangement of CAT - CIV 2001 of 2009, COR 2 of 2010 and CIV 2765 of 2010; and

(e) Court of Appeal matters involving the winding up of CAT and issues with the liquidator - CACV 51 of 2010, CACV 23 of 2012 and CACV 24 of 2013.

1. In these circumstances, the court should be satisfied that the importance of the matter requires the making of a special costs order.

63 As I have already determined the defendant is entitled to an order for indemnity costs on the basis of the plaintiffs' improper and unreasonable conduct and also on the basis that the plaintiffs' rejection of the defendant's Calderbank offer was unreasonable, it is unnecessary for me to decide whether the defendant is entitled to a special costs order. However, because the defendant's application for special costs orders has been the subject of detailed written submissions by both parties, I propose to briefly consider the application. Also I accept that even if there has been unreasonable conduct by the plaintiffs in the running of their case, an indemnity costs order will not necessarily be made if the costs would be covered by a special costs order. If the conditions warrant an indemnity costs order, an order detailing an increase in the scale limits should still be made: Flotilla [11], [24], [25]

64 I accept and am satisfied by the materials placed before me by the defendant (Ms Duthie's affidavit of 21 August 2015), and from my knowledge of the matter and how the trial was conducted, and the issues which were canvassed at trial, that the applicable scale limits are likely to be inadequate to meet the costs of the defendant in successfully defending the plaintiffs' claim. I am satisfied that because of the large volume of documentation that the defendant needed to become familiar with, involving the multiple actions in which the plaintiffs were involved and the numerous affidavits sworn by Mrs Frigger at various times, which, as I found in my reasons for decision, contained numerous and significant inconsistencies reflecting adversely on her credibility, that the factual issues were unusually complex or difficult such as to justify an order being made that the defendant be entitled to tax its costs with regard to the limits allowed by the relevant cost scales. I accept the defendant's submissions in this regard.

65 I am also satisfied for the reasons advanced by the defendant that this matter falls within the meaning of the word 'importance' in s 280(2) of the ALP because of the need to address the serious allegation of fraud made against the defendant, Mr Clavey and Ms Zohar which obviously affected their reputation and credibility. I am satisfied that it was necessary for the defendant to descend into the degree of detail it did and to become familiar with the large volume of documentation because of the serious allegations raised by the plaintiffs against the defendant, Mr Clavey and Ms Zohar, which justifies an order being made that the defendant tax its costs without regard to the limits fixed by the cost scales.

66 The defendant also seeks an order pursuant to O 69 r 3 of the Rules of the Supreme Court 1971 (WA) that the expense of obtaining the transcript of the trial and of various directions hearings be made.

67 I am satisfied it was reasonable and necessary for the proper conduct of the trial and the interlocutory proceedings the defendant obtained the transcript. Accordingly, I make an order the plaintiffs pay the defendant the cost incurred by the defendant in obtaining the transcript both of the trial and of any interlocutory proceedings.

68 There is one final matter I need to briefly deal with.

69 After I received each of the parties written submissions and materials pursuant to the orders made by me at the directions hearing on 13 August 2015 as referred to above [3], the defendant by its solicitors wrote to my associate on 16 September 2015 seeking leave to file a further affidavit to be sworn by Ms Duthie in response to the submissions and affidavit filed by the plaintiffs in opposition to the defendant's application. The plaintiffs oppose the defendant being given leave to file the further affidavit.

70 I have not read the further affidavit of Ms Duthie. As will be evident from these reasons, I have found it unnecessary to consider any further evidence in determining the defendant's application. For the sake of completeness I formally refuse the defendant's application for leave to file the further affidavit of Ms Duthie.

1. The plaintiffs pay the defendant's costs of the action, including reserved costs before 14 June 2013 on a party and party basis to be taxed;
2. The plaintiffs pay all the defendant's costs of the action from 14 June 2013 except insofar as they are of an unreasonable amount or have been unreasonably incurred so that subject to the above exclusions the defendant is completely indemnified by the plaintiffs for its costs from 14 June 2013, including the costs of this application for costs.
3. The defendant's costs under items 17, 20(b) and 20(d) be taxed without reference to the limits fixed under the Supreme Court scale of costs.
4. The plaintiffs pay the defendant's costs of obtaining the transcript incurred by the defendant.