Consideration
62The other matters argued do not admit of neat division into arguments of the Applicant and of the Respondents. Thus I will now proceed by considering arguments of both the Applicant and the Respondents that bear upon the correctness of the Applicant's contention.
63It can readily be accepted that the only specific provision that the LP Act makes for assessing the reasonableness of legal costs is the system of assessment. Further, the Applicant correctly submits that s 319(1)(c) LP Act allows legal costs to be recoverable according to the fair and reasonable value of the legal services provided (ie, on a quantum meruit) only in circumstances where there is no fixed cost provision, and where there is no applicable costs agreement. In the present case there is no fixed cost provision, but there is an applicable costs agreement. Thus, s 319(1)(c) is not applicable here.
64However, the defence and cross-claim of the Respondents implicitly accept that the Applicant is entitled to recover whatever fees are properly payable to him in accordance with the costs agreement. What the defence and cross-claim assert is that it is the costs agreement itself that imposes, through an implied term, a limitation to the effect that those services for which the Applicant is entitled to be paid are those that were reasonable and necessary, in light of his standing and level of professed skill as evidenced by the rate of fees he charged, to carry out the retainer.
65In other contexts, it has been held that there is an implied term in a lawyer's retainer that he or she will exercise reasonable care and skill: Astley v Austrust Ltd [1999] HCA 6; (1999) 197 CLR 1 at [46]-[47] per Gleeson CJ, McHugh, Gummow and Hayne JJ. However whether there is an implied term of the type for which the Respondents contend might depend on the facts of this particular case. Understandably when it might depend on factual matters not yet investigated, the Applicant has not argued on the present application that the implied term that is alleged does not, or cannot, exist.
66Considering whether the Respondents' allegation is unarguable because Division 11 provides the exclusive means of deciding the reasonableness of legal costs requires a more general consideration of the circumstances and manner in which barristers are entitled to sue for their fees.
How Barristers can Sue for Fees
67In Keesing v Adams [2010] NSWSC 336 at [13]-[20], Brereton J helpfully collected the authorities relating to the inability, until legislation intervened, of a barrister to sue to recover his fees. See also Heydon v NRMA Limited [2000] NSWCA 374; (2000) 51 NSWLR 1 at [148], [363], explaining why the action bought against the barrister in that case was based solely in tort, not in contract.
68Section 38I of the 1987 Act was introduced into the 1987 Act in 1993. Section 38I performed the same function as s 83(3) LP Act now performs of permitting a barrister to enter into a contract for the provision of legal services, and to sue and be sued on it. In Keesing v Adams, Brereton J noted, correctly in my view, that the contract for legal services that s 38I of the 1987 Act permitted was different to the "agreement as to the costs of the provision of legal services" that was permitted by s 185 of the 1987 Act. He observed, correctly, at [22]-[23]:
"While s 38I permitted a barrister to enter into a contract for legal services for the provision of legal services with a solicitor or a lay client, it did not require the barrister to do so. The result ... was that a barrister could continue if he or she wished, generally or in any particular case, to render legal services on the conventional non-contractual basis, or could choose to render legal services generally or in a particular case on a contractual basis by entering into a contract for provision of legal services with a client. If the barrister rendered services on the conventional basis, the fee would not be recoverable at law, because there would be no contract on which a barrister could sue.
In Re Sharpe; Ex Parte Donnelly, Lockhart J observed that the 1994 Legal Profession Act, though not expressly stating that a barrister may sue for the recovery of the fees, impliedly assumed that right in ss 184, 191 and 192. His Honour does not appear to have been referred to s 38I. ... [T]he correct position is that a barrister who chooses to enter into a contract for legal services can, by way of s 38I, recover his or her fees at law pursuant to that contract. A barrister who elects to render services on the conventional non contractual basis would not be entitled to recover fees at law and would be left to the traditional extra curial remedies."
69Brereton J also correctly observed, at [25], that an agreement as to the costs of the provision of legal services "may form part of, but is a distinct concept from, a contract for the provision of legal services." He also observed, correctly, at [30], that the mere entry of a costs agreement does not create a liability to pay costs where otherwise there is no liability - such a contractual liability to pay for legal services can only arise under a contract for the provision of legal services. However, if there were not a contract for the provision of legal services, "it is difficult to see any utility in entering into a costs agreement" - there is no point in having an agreement about the price of an item, if there is not also a legal obligation to pay that price.
Can Reasonableness of Fees be Contested other than by Assessment?
70Various English cases have recognised that there can be occasions when a court can decide the reasonableness of legal fees, in circumstances where there has been no taxation of costs. The English system whereby a specialist who was not a judge but who had experience of the quantum of legal costs would assess, in a way binding on the parties, the reasonableness of legal costs was called taxation. No submission was made that the differences between the system of taxation of costs, and the system for assessment of costs that was created by the 1987 Act and the LP Act, provided a reason why principles stated in such cases were not applicable in New South Wales now.
71In re Park; Cole v Park (1888-1889) 41 ChD 326 arose in an action, of a type now moribund, for administration by the court of a deceased estate. Solicitors claimed that a sum of money was due to them from the estate concerning certain bills of costs that had been rendered to the testator more than a year before the testator's death. The Solicitors Act 1843 (Eng) permitted a bill to be referred for taxation within twelve months of delivery, or in certain other special circumstances. It was admitted that there were no such special circumstances. The executor contended that some of the charges in the bills of costs were unreasonable. The Chief Clerk (the officer of the court who in the ordinary course had control of administrations by the court of deceased estates) referred the bills to the Taxing Master. When the solicitors objected, the propriety of the Chief Clerk's order was referred to Stirling J for consideration. Stirling J held, in brief, that it had been wrong to refer the whole bill to the Taxing Master, but that it was appropriate to refer to the Taxing Master those items on the bill that appeared to the Chief Clerk to require explanation.
72A submission specifically made by counsel for the solicitors was, at 328:
"... the Court has now no jurisdiction to direct taxation of a solicitor's bill of costs delivered more than twelve months before the death of the client. As to such bills the Solicitors Act, 1843, is conclusive; and if the client does not choose to avail himself of the right of taxation thereby conferred upon him, he must be taken to have accepted his liability. The Court has no power to deal with solicitors' bills of costs under its general jurisdiction over the officers of the Court."
73Stirling J rejected that submission. He held, at 331, that in dealing with solicitors' costs "the Court has three-fold jurisdiction". He held that the first two ways in which the Court could deal with solicitors' costs, namely by requiring a taxation of the costs under the statutory jurisdiction conferred by the Solicitors Act, and under its "general jurisdiction over the officers of the Court", were not available in the case before him. However the third method was (at 332):
"... the ordinary jurisdiction of the Court in dealing with contested claims. This action is one for the administration of a testator's estate, and under the judgment a claim is brought in by persons who allege that they are creditors in respect of certain bills of costs. It is contended on their behalf that the investigation of this claim which takes place in Chambers is merely in substitution for a common law action, and that the Claimants ought to be placed as nearly as may be, having regard to the different forms of procedure, in the position in which they would have been if they had brought an action at common law against the testator's legal personal representative for the amount of this bill. To that general proposition I agree."
74That passage refers to the procedure that was adopted when there was an administration of a deceased estate by the court. There would be an advertisement for anyone claiming to be a creditor of the estate to submit details of his claim by a particular date, and an administrative officer of the court would decide in Chambers whether to admit those claims as debts properly payable from the estate. What matters for present purposes is that, in carrying out that administrative process, the court officer sought to put the person who claimed to be a creditor in the same position as he would have been in if he had sued in the common law courts to recover the debt which he claimed.
75Counsel for the solicitors submitted that, in applying that principle "there was an absolute rule of law which prevented any investigation of the bill at all, if it had been delivered for more than a year, and no objection had been raised to it". Stirling J rejected that submission also, saying at 333-334:
"The Courts of Common Law dealt with an action on a solicitor's bill of costs in the same way as they would deal with an action on an ordinary tradesman's bill containing a number of items. If it were shewn that the bill had been delivered for a considerable time, and had never been objected to by the person to whom it had been delivered; and if the bill on the face of it seemed to be fair and reasonable, a jury would no doubt be told that, in the absence of anything to the contrary, it was conclusive against the person charged and that they ought in such a case to find a verdict for the plaintiff. Applying that to the case of a solicitor's bill, if such a bill has been delivered for more than a year, and the person to whom it was delivered has never sought to have it referred to taxation, or made any objection to it, and the bill on the face of it appears to be a reasonable bill, and contains no extraordinary charges, then it would seem a very reasonable thing that the jury should be told that the defendant in the action ought not now to be allowed to question the bill if he has nothing to allege against it, and that as against him a verdict should go for the plaintiff for the amount of such reasonable bill.
But I cannot believe that the very eminent Judges whose decisions have been referred to ever meant to lay down as an absolute rule that under no circumstances could the bill be looked into after the period for taxation has elapsed.
For example, supposing it were stated and proved that the person charged had, during the whole period from the delivery of the bill to the bringing of the action been incapacitated by ill health from attending to business, and suppose further that, when the bill came to be looked into, it contained, on the face of it, charges that were evidently exorbitant; for example, suppose every letter written was charged at two guineas, instead of the ordinary charge, I cannot conceive that Lord Mansfield or Lord Eldon, or any other Judge, ever meant to lay down the rule that under such circumstances, simply because the bill had been delivered for more than a year and had never been referred to taxation, the Judge was bound to direct the jury that the charge was a reasonable one for the solicitor to make; and that in spite of any explanation that might be given on behalf of the defendant they must at once return a verdict against him for the amount.
It appears to me that the Judges treated the non-taxation of the bill within the year after its delivery as an admission by the defendant that the bill was a reasonable one and was due; but an admission which, like every other admission, could be explained by evidence as to the circumstances under which it was not taxed, or as to the amount of the bill."
76The decision of Stirling J was upheld on appeal to the Court of Appeal, the report of which follows immediately after the report of the first instance judgment. Cotton LJ accepted, at 338 that the claim was to be dealt with as if it were an action at law, and continued:
"If it were so, of course the fact of the testator's having had those bills of costs so long without making any objection is prima facie evidence in favour of their being right, but it is nothing more than prima facie evidence, and if any objection were taken that objection would have to be considered, and the matter would have to be dealt with upon hearing the evidence on both sides, unless it could be referred to the Taxing Master, who is the usual and proper person to decide whether costs are reasonable.... though the delivery of the bill of costs and its not being objected to for a length of time is prima facie evidence in favour of the bill, it does not prevent objections being taken to particular items."
77Similarly, in Jones & Son v Whitehouse [1918] 2 KB 61, the English Court of Appeal refused leave to a solicitor to sign judgment on the amount of his bill of costs, in circumstances where the time for the client to seek taxation had passed, and there were no special circumstances that would permit the court to extend that time. Pickford LJ, at 65, held that In re Park decided:
"... that, if the client could point out any items as being extravagant, he could have those items, and only those items, inquired into... If he can specify certain items as being extravagant, and can thus show a plausible ground of defence as to them, he could have those items, and those items only, taxed, but not the whole bill. Though there is no right to have the bill taxed under the Act, the Court may still under its general jurisdiction order any of the items to be enquired into."
78Warrington LJ put the matter slightly differently, saying at 66:
"... at the trial the defendant would be allowed to question the reasonableness of the particular items in the bill which were objected to, and to have those items settled by the tribunal. In what way they should be settled in any particular case is a mere matter of convenience. In that case Stirling J referred the item to the taxing Master and this Court affirmed his order."
79In Re Foss, Bilbrough, Plaskitt & Foss [1912] 2 Ch 161 was a summons taken out by the liquidator of the company seeking the taxation of some solicitors' bills that had been rendered to the company more than 12 months before the liquidator had been appointed. Without holding that there were special circumstances that would have justified an order for taxation under the Solicitors Act, Neville J held that it was appropriate to make the order. His reasons were pragmatic, and particularly tied to the circumstance of a liquidation. He said, at 166:
"The liquidator has a right against the solicitor to claim an account, and the solicitor a right to prove that for the amount of his costs, and what may be ultimately due from one to the other cannot be properly ascertained without taxation."
80In Woolf v Snipe (1933) 48 CLR 677 at 678-9 Dixon J held that:
"The superior Courts of law and equity possess jurisdiction to ascertain, by taxation, moderation, or fixation, the costs, charges and disbursements claimed by an attorney or solicitor from his client, and that jurisdiction is derived from three sources and falls under three corresponding heads.
First, a jurisdiction exists founded upon the relation to the Court of attorneys and solicitors considered as its officers ...
Second, when a contested claim for costs comes before the Court it has jurisdiction to determine by taxation or analogous proceeding the amount of costs.
Third, there is a statutory jurisdiction ... "
81In support of the second head of jurisdiction Dixon J gave references to In re Park; In re Foss, Bilbrough, Plaskitt & Foss; and Jones & Son v Whitehouse.
82The House of Lords has recognised the continuing applicability of "the ordinary jurisdiction described in In re Park" in Harrison v Tew [1990] 2 AC 523 at 538 (per Lord Lowry, Lord Bridge of Harwich, Lord Ackner, Lord Oliver of Aylmerton and Lord Jauncey of Tullichettle agreeing). It recognised the continuing applicability of the "ordinary jurisdiction" even though on the facts of the particular case an action based in it would have failed. Such an action would have failed because the claim under consideration was made by a client who had already paid a bill, and was out of time to seek its taxation under s 70 Solicitors Act 1974 (Eng). Lord Lowry was of the view that the action available to the client would be an action seeking an account of money that came to the hands of the solicitor, and that any such action would have been met by a plea of settled account. Their Lordships did not give consideration to whether an argument in the "ordinary jurisdiction" of the type that the Respondents seek to run in the District Court would have failed.
83The remarks in In re Park, Jones & Sons v Whitehouse, In Re Foss and Woolf v Snipe about the court deciding the reasonableness of fees might need some modification in their application to the present case. The reports in none of the cases are clear on the topic, but it would not be at all surprising if, in accordance with the usual practices of the times at which they were decided, the solicitors in those cases had been retained on a basis where there was no contractual agreement that they would be paid in accordance with a schedule of rates. It was far more common for solicitors to be retained on the basis that said nothing specific about fees, and for there to be an implied term in their retainer that they would charge reasonable fees for the work done (though sometimes there was a schedule of rates that was used on taxations as a guide to the reasonableness of the fees). If that were to be the case, when a court was exercising "the ordinary jurisdiction of the Court in dealing with contested claims" concerning fees, it would decide the reasonableness of the fees because reasonableness was the contractual basis on which the solicitor had an entitlement to be paid. On the Respondents' case, the question of reasonableness of the fees of the Applicant arises in a different way, through the implied term that the Respondents contend is found in the contract between the Applicant and the Respondents. Notwithstanding this possible difference, in the present case the role of the court in considering the quantum of the fees will still be one of deciding what fees, on the proper application of the contract in question, are actually due.
84Ultimately whether the Applicant's contention is correct must depend upon the construction of the LP Act. No words in Division 11 say that it provides the only means by which the reasonableness of legal fees can be established. Further, as Mr McHugh points out, when s 301 states the purposes of Part 3.2 LP Act, one of those purposes is "to provide a mechanism for the assessment of legal costs". It is not "to provide the mechanism for the assessment of legal costs".
85In Harrison v Tew the House of Lords held that s 70(4) Solicitors Act 1974 (Eng) implicitly removed an inherent jurisdiction of the Court to refer a bill for taxation. Section 70(1) of that Act set out a mechanism by which the party chargeable with a bill could have it taxed as of right if application was made within a month from its delivery. Section 70(2) conferred on the court jurisdiction to order taxation in certain circumstances. Section 70(4) said:
"The power to order taxation conferred by subsection (2) shall not be exercisable on an application made by the party chargeable with the bill after the expiration of 12 months from the payment of the bill ..."
86The reasons of Lord Lowry, at 536, for holding that the inherent jurisdiction of the court to order taxation of the bill more than twelve months after it had been paid had been thereby removed were:
"One must distinguish between affirmative and negative provisions: the common law can co-exist with a statutory provision with which it is not inconsistent. Mr Newman, for the respondent, as well as introducing the quotation from Wade & Bradley, referred your Lordships to Coke, Institutes of the Laws of England (1817), cap 20, p 200 (Co 2 Inst 200):
'it is a maxim in the common law, that a statute made in the affirmative, without any negative expressed or implied, does not take away the common law: . . .'
Dillon LJ [1989] QB 307, 323 referred to Lord Wilberforce's statement in Shiloh Spinners Ltd v Harding [1973] AC 691, 724-725 and that case was applied in Official Custodian for Charities v Parway Estates Developments Ltd [1985] Ch 151, 165.
I might venture to remind your Lordships of the terms of section 41 of the Act of 1843:
'And be it enacted, that the payment of any such bill as aforesaid shall in no case preclude the court or judge to whom application shall be made from referring such bill for taxation, if the special circumstances of the case shall in the opinion of such court or judge appear to require the same, upon such terms and conditions and subject to such directions as to such court or judge shall seem right, provided the application for such reference be made within 12 calendar months after payment.'
That provision impliedly and section 70(4) of the Act of 1974 expressly were negative enactments which in my clear opinion ousted the inherent jurisdiction to refer a bill for taxation in conflict with what they laid down."
87It is not necessary to decide what, if any, effect that reasoning has on an argument about whether s 351 LP Act took away the court's inherent power to order that a bill of costs be assessed. Lord Lowry's recognition that the "ordinary jurisdiction" recognised in In re Park continued notwithstanding that s 70(4) impliedly took away part of the inherent jurisdiction of the court shows that that reasoning does not result in the defence that the Respondents wish to run in the District Court being unarguable.
88Section 98 Civil Procedure Act 2005 provides:
"(1) Subject to rules of court and to this or any other Act:
(a) costs are in the discretion of the court, and
(b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and
(c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.
(2) Subject to rules of court and to this or any other Act, a party to proceedings may not recover costs from any other party otherwise than pursuant to an order of the court.
(3) An order as to costs may be made by the court at any stage of the proceedings or after the conclusion of the proceedings.
(4) In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to:
(a) costs up to, or from, a specified stage of the proceedings, or
(b) a specified proportion of the assessed costs, or
(c) a specified gross sum instead of assessed costs, or
(d) such proportion of the assessed costs as does not exceed a specified amount."
89Mr McHugh submits that the existence of the Court's power under s 98 falsified any submission that Division 11 of the LP Act provides an exclusive scheme whereby bills of costs are to be assessed. He points out that, while the power under s 98 might most commonly be used when a judge is deciding how costs should be disposed of concerning a matter that he or she has already decided, the power conferred by the section is not limited to that situation. For example, White J made a lump sum costs order pursuant to s 98 in In the Matter of Windy Dropdown Pty Ltd [2010] NSWSC 1099. The lump sum costs order was made in proceedings that were brought by the administrators of a deed of company arrangement in which they sought directions under s 447D Corporations Act 2001 (Cth). The directions they sought concerned how they should deal with a costs order that Brereton J had made against the company in other proceedings. The party in favour of whom Brereton J had made that costs order was also a party to the application for directions. White J held that, as the costs in question had not been referred for assessment, he had jurisdiction under s 98(4) to make the order, and there was no necessity for the lump sum costs order to be made by the judge who had decided upon which party the liability for costs should fall ([49]-[50], [55]).
90Mr Robberds did not argue that In the Matter of Windy Dropdown Pty Ltd was wrongly decided. While Mr McHugh did not argue that s 98 was a direct source of power for the District Court to decide the issues raised by the defence and cross-claim, I accept that the power that courts have under s 98 would provide a very significant exception to any exclusivity that there otherwise might be of the assessment scheme created under Division 11 of the LP Act.
91Attard v James Legal Pty Ltd [2010] NSWCA 311 was an appeal concerning an action in which clients had sued their solicitor in the Supreme Court for breach of contract concerning the manner in which the solicitor had conducted certain litigation. That action failed, for reasons not presently relevant. The solicitor had cross-claimed, seeking payment of unpaid costs and disbursements pursuant to a costs agreement. Tobias JA (Beazley and Giles JJA agreeing) held that the pleading of the defence to the cross-claim was wide enough to include an allegation that the solicitor was not entitled to the amounts claimed because those amounts were excessive (182). As well, the solicitor had been cross-examined without apparent objection on some of the items in his memoranda of fees, and he had conceded that there had been an overcharge ([99]).
92The trial judge had declined to make any order that would permit the reasonableness of the costs and disbursements to be determined. Tobias JA said, at [101]-[102]:
"At [15] her Honour found that the LPA did not empower her to make an order for assessment under its provisions. This was clearly so and no challenge is made to that finding. However, as an alternative, the appellants submitted that pursuant to rule 20.14 of the Uniform Civil Procedure Rules 2005 (UCPR), which permits reference to a referee for the determination of any question arising in the proceedings, she should appoint a referee who had costs assessing experience to determine an appropriate quantum of the costs claimed. Although this scenario had some initial attraction to her Honour, on reflection she considered (at [17]) that that course was not available to her or, if it was, that it was not appropriate. This was because the LPA provided specifically for the assessment of costs and imposed restrictions upon the manner in which the assessment was to be undertaken and the circumstances thereof.
In other words, as I understand her Honour's reasoning, the LPA in effect provided an exclusive code for the assessment of the costs of a legal practitioner with respect to the provision of professional legal services. It is this aspect of the supplementary judgment that the appellants challenge."
The "LPA" that his Honour was there referring to was the 1987 Act ([95]).
93The Court of Appeal ordered that the amount due by the clients to the solicitors pursuant to the cross-claim
"... be referred to a referee experienced in the assessment of legal costs and disbursements for assessment as to the fairness and reasonableness of the costs claimed by the cross-claimants in their cross-claim upon condition that the [clients] pay to the [solicitors] 60% of the amounts referred to ... within 28 days ..." (191)
94Tobias JA's reasons for adopting that course were, at [179]-[181]:
Although there may be some doubt as to whether her Honour made a finding that Division 6 of Part 11 of the LPA provided a complete and exclusive code as to how legal costs were to be assessed, in my opinion if she had, she would be in error. This was clear from s 208I of that Act which provided that Division 6:
does not limit any power of a court or a tribunal to determine in any particular case the amount of costs payable ... "
As was pointed out by Kirby J in Ryan v Hansen [2000] NSWSC 354; (2000) 49 NSWLR 184 at [32], in performing their functions under the LPA, a costs assessor was not part of the Supreme Court and, therefore, was not an officer of the Court. In any event, there was nothing in Division 6 that in my view ousted the jurisdiction of the Supreme Court pursuant to UCPR 20.14 to refer to an appropriately qualified referee the determination of the legal costs and disbursements to which a solicitor is entitled.
Although the cross-claim was an action, in effect, for liquidated damages, that fact did not in my view prevent the court from exercising its discretion under UCPR 20.14 to refer the determination of the quantum of a client's liability to a solicitor for professional costs to an appropriately qualified referee. Nevertheless, the fact that there was a regime available under the LPA may bear upon the exercise of the court's discretion to engage that rule.
95Though the judgment that was appealed against in Attard was a judgment of the Supreme Court, Schedule 1 of the UCPR does not impose any restriction on the availability in proceedings in the District Court of the referral procedure established by UCPR Part 20. At present none of the pleadings in the District Court specifically seek an order for reference of a type that was made in Attard. However, if the Respondent otherwise made out its case Attard would provide justification for the judge who eventually hears the proceedings making an order of a similar type to that made in Attard, if in the exercise of his or her discretion that was the appropriate way to proceed to quantify the Applicant's claim, or any particular items in the Applicant's claim.
Attard Wrongly Decided?
96Mr Robberds applied for leave to argue that Attard was wrongly decided. The application was made in highly unsatisfactory procedural circumstances. The Practice Note governing the Court of Appeal, Practice Note SC CA 1, states at [38]:
"A party who proposes to seek leave to challenge the correctness of the decision of the Court of Appeal or of another Australian intermediate appellate court should notify the Registrar at the earliest opportunity. The letter should indicate the decision(s) likely to be challenged and their materiality to the instant proceedings."
97The obvious purpose of that requirement is so that the Court can give consideration to sitting a bench of five or more to consider whether the previous decision should be overruled. In the present case, notwithstanding that written submissions had been filed, and Mr McHugh's written submission filed nearly eleven months before the hearing had referred to and relied upon Attard, the first that the Court heard of the application to argue that Attard was wrongly decided was in the course of Mr Robberds' oral submissions. Mr McHugh had been notified only the previous day.
98Rather than adjourn the hearing for the purpose of considering whether to constitute a larger bench, both counsel agreed that the bench of three judges that had been assembled should hear the full argument, and decide whether leave to reargue Attard should be granted. In the event that the bench of three decided that that leave should be granted, both parties consented to a procedure whereby another two judges nominated by the President would consider the papers in chambers, without any further oral hearing, for the purpose of deciding whether Attard should be overruled.
99As well as the arguments that I have already rejected earlier, Harrison v Tew provided an additional part of the basis upon which Mr Robberds submitted that Attard was wrongly decided. However, an important part of the reasoning of Tobias JA in Attard as to why the Division of the 1973 Act corresponding to Division 11 of the LP Act did not create an exclusive system of deciding the reasonableness of legal costs was that s 208I of the 1973 Act was inconsistent with any exclusivity. Section 208I of the 1973 Act is in identical terms to s 366 of the LP Act.
100Another unsatisfactory aspect of the way in which leave was sought to argue that Attard was wrongly decided was that we were not taken to the text of the Solicitors Act 1974 (Eng), save in so far as it was quoted in the course of the speech of Lord Lowry in Harrison v Tew. Having ascertained them for myself, the provisions of Solicitors Act 1974 (Eng) governing remuneration of solicitors appear in ss 56-75. Those provisions do not contain anything that is analogous to s 208I of the 1973 Act. The presence of s 208I in the 1973 Act is a sufficient reason why Harrison v Tew does not provide a reason why the decision in Attard is arguably wrong.
101An analogous argument to the one accepted by Tobias JA in Attard arises from s 366 of the LP Act. To counter that argument, Mr Robberds points out that s 366 appears in subdivision 3 of Division 11, which subdivision is headed "Assessment of party/party costs". He submits that the meaning of s 366 should be limited by reference to that heading. Pursuant to s 35(1) Interpretation Act 1987, such a heading is taken to be part of the Act, and thus is an available aid to construction of a provision that falls underneath that heading. Section 208I of the 1987 Act likewise appears in a subdivision 3, headed "Assessment of party/party costs" but in Attard Tobias JA had not mentioned that heading or considered its significance.
102Mr Robberds submits that a limitation of the meaning of s 366 by reference to the heading is appropriate because, insofar as s 366 provides that "This Division does not limit any power of a court or tribunal to determine in any particular case ... that the amount of the costs is to be determined on indemnity basis", it is capable of having application only concerning orders for costs made concerning litigation. I do not accept that submission. Even concerning the phrase I have just quoted, the operation of s 366 is not confined to "party/party costs" in any conventional sense. Section 98 Civil Procedure Act (quoted in [88] above) empowers the court to order that costs be paid by someone who is not a party to litigation concerning which the court is making a costs order, and also empowers the court to make orders concerning costs of the administration of any estate or trust. While s 366 has a wider scope than saving the powers of a court to make indemnity costs orders under s 98 Civil Procedure Act (if only because it saves powers of tribunals to make orders that costs be determined on indemnity basis), at the least it saves the power of the courts to make orders within the full scope of s 98. That full scope is wider than deciding whether, and how, one party to litigation should pay the costs of another party.
103Further, giving the words their ordinary meaning, in so far as s 366 provides that "this Division does not limit the power of a court or a tribunal to determine in any particular case the amount of cost payable" it is talking about the whole of Division 11. Read in accordance with that ordinary meaning it has the effect that Division 11 does not remove the power of the District Court in exercising "the ordinary jurisdiction of the Court in dealing with contested claims", to determine the amount of costs payable. No reason of history, context (other than the heading) or policy has been put forward why the words should not be given their ordinary meaning. While the heading is part of the Act, and so an available piece of context, it provides no reason to limit the clear meaning of the words of s 366.
104Indeed, as Mr McHugh submits, there is some textual support for this ordinary meaning. It is in s 301 using the indefinite "a mechanism" - see [84] above.
105The test by reference to which this Court overrules one of its own previous decisions is whether the judges who are considering the previous decision have a strong conviction that the previous decision was wrong: Gett v Tabet [2009] NSWCA 76; (2009) 254 ALR 504 at [294]-[301]. Having heard the arguments put forward on the applicant's behalf, I do not have a strong conviction that Attard was wrong. Indeed, in my view the reasoning of Tobias JA to which I have earlier referred is correct. Thus, whether leave should be granted will depend on whether there is a sufficient prospect that other judges will come to a view different to that which I now have, or that further consideration will cause me to change my present view. In my view, there is insufficient prospect of the test for the court overruling one of its own previous decisions being satisfied in the present case to warrant the grant of leave. I say that fully conscious of the extent to which judicial opinions can differ on a topic. I would decline to grant leave to argue that the aspects of Attard that I have identified at [92]-[94] above were incorrectly decided.
106For these reasons I conclude that Division 11 of the LP Act does not provide an exclusive means by which the reasonableness of legal costs can be ascertained. Thus the defence that the Respondents seek to raise is not precluded by any such exclusivity.
Some Checks on Whether Division 11 is Exclusive
107To test the correctness of the submission that the defence that the Respondents wish to raise was not arguable because the procedures in Division 11 are exclusive, the Court considered, in the course of argument, some examples that no-one says arise on the facts of the present case. As these are in the nature of checks on whether a conclusion arrived at on other grounds is correct, I mention them only at this late stage of the judgment.
108The situation being considered was one where there was a fees agreement between a barrister and a client, and a barrister sued to recover fees when no assessment of fees had occurred. Mr Robberds QC accepted that if a barrister's memorandum of fees had deliberately included a charge for an item of work that the barrister had not performed, it would be open to the client to challenge that item, because it would be fraudulent. Implicitly, Mr Robberds was invoking the principle that "fraud opens everything": it is not unusual for a general legal proposition (like that Division 11 provides the only means by which the reasonableness of legal fees can be decided) to be subject to an exception when fraud is involved.
109Mr Robberds also accepted that if an item had been included in the memorandum of fees by an innocent mistake, such as a barrister's secretary misreading or mistyping, the client could challenge his liability to pay for that item. Mr Robberds submitted that the justification for permitting that challenge was that, once the barrister discovered the mistake, it would be fraudulent to persist with the claim for the mistaken item.
110I do not accept that that is a sufficient reason. Consider, applying Stirling J's analogy of how a tradesman goes about suing on an itemised bill, how a barrister would go about suing for fees in the "ordinary jurisdiction" when there was a fees agreement, but the memorandum of fees had not been submitted for assessment. The barrister would need to establish (either by affirmative proof, or an admission) that there was a contract for the provision of legal services, that there was an agreement for the rates payable for work, that each item of the work sued for had actually been done, that a bill of costs had been sent, and that it had not been paid. It would then be for the defendant to establish any matters of defence that were not matters of denial or non-admission. If a client wished to challenge his or her liability to pay a particular disputed item on the bill, one appropriate way to raise such a challenge would be a denial or non-admission on the pleadings that that item of work had been performed. If Mr Robberds' submission were correct, it would be possible for the barrister to have that defence struck out, provided the barrister had not realised that the item that was being challenged had been included in the bill by mistake. That seems an unlikely conclusion.
111Further, if a barrister sued on a memorandum of fees and the client did not admit that a particular item of work had been done, it would be open to the barrister to have that non-admission struck out, unless the client could prove (perhaps just on a prima facie basis, as the strike-out would be an interlocutory application) that the item was fraudulently included, or that continuing to sue on it was fraudulent. If the non-admission is not an available defence, that striking out could be done before the client had had access to the interlocutory steps like discovery of the barrister's time records concerning work the barrister had done on the days for which the charges were made. That also seems an unlikely conclusion.