Burrell Solicitors Pty Ltd & Anor v Reavill Farm Pty Ltd & Ors

Burrell Solicitors Pty Ltd & Anor v Reavill Farm Pty Ltd & Ors - [2016] NSWSC 303 - NSWSC 2015 case summary — Zoe

Introduction

HIS HONOUR: In February and March 2010 the cross-claimants ("the Champion parties") retained the first cross-defendant ("Burrell Solicitors") to act for them as their solicitors in two proceedings in the Land and Environment Court concerning the expansion of their quarry. The Land and Environment Court proceedings were unsuccessful, but the Champion parties obtained approval for the quarry expansion from the Minister, through his delegate the NSW Planning Commission, under the then Pt 3A of the Environmental Planning and Assessment Act 1979 (NSW). Between 9 February 2010 and 30 September 2011 the Champion parties paid Burrell Solicitors' costs and disbursements, including counsel's fees, of $358,247.34. On 15 August 2012 a costs assessor determined that the Champion parties were liable to pay Burrell Solicitors a further $185,400.86 for counsel's fees and a further $345,832.37 in respect of Burrell Solicitors' own costs and other disbursements. An appeal from the costs assessor's determination to an Appeal Panel was dismissed and judgment was entered on 22 August 2013 against the Champion parties in favour of Burrell Solicitors in amounts of $188,005.11 and $349,302.42. Those judgments are presently stayed, pending determination of the Champion parties' cross-claim.
The Champion parties claim that they were induced to retain Burrell Solicitors as their solicitor and to pursue the Land and Environment Court proceedings by Burrell Solicitors' misrepresentations as to the likely costs. They also claim that in April 2010 they made an agreement with Burrell Solicitors that Burrell Solicitors would charge $10,000 per month for acting for them. They claim that Burrell Solicitors failed to act on their instructions to settle the proceedings on terms they claim were available in December 2010. They contend that Burrell Solicitors is precluded from enforcing the judgments entered pursuant to the costs assessor's determinations. They claim damages to compensate them for the legal costs and disbursements, including counsel's fees, paid in connection with the Land and Environment Court proceedings, their liability under the judgments entered pursuant to the costs assessor's determination, amounts paid and owing to consultants and expert witnesses used in the Land and Environment Court proceedings, and amounts paid or owing to Lismore City Council pursuant to adverse costs orders made in the Land and Environment Court proceedings.
Burrell Solicitors disputes the merits of the claim. Burrell Solicitors says that there was a reasonable basis for the initial estimates of costs. Burrell Solicitors admits that it failed to comply with its statutory duty to provide written updated assessments of costs, but denies that the Champion parties relied upon the estimates provided. Burrell Solicitors says that the Champion parties were determined to pursue the litigation knowing that the original estimates provided, and which had not been updated, had been superseded by subsequent events.
The consequence of the admitted failure to provide updated estimates was that the costs assessor assessed what were fair and reasonable costs without regard to Burrell Solicitors' costs agreement. Costs were reduced pursuant to s 317(4) of the Legal Profession Act 2004 (NSW) by an amount considered by the costs assessor to be proportionate to the seriousness of the failure to disclose.
Burrell Solicitors says that the costs determinations and judgments entered pursuant to them are conclusive and bar the Champion parties' claim on principles of res judicata. It also says that the Champion parties' claim is barred on principles of advocate's immunity.
For the reasons which follow, I have concluded as follows: (a) the Champion parties were induced to retain Burrell Solicitors to act as their solicitors by reason of costs estimates provided by the second defendant, Mr Burrell, of Burrell Solicitors, for which there was no reasonable basis and which were misleading and deceptive. (b) Mr Burrell did not believe that there was a reasonable basis for the estimates provided and the estimates were provided to secure the Champion parties' prospective business. (c) Burrell Solicitors' failure to provide updated reasonable costs estimates was not only a breach of the Legal Profession Act, but was conduct engaged in in trade or commerce that was misleading and deceptive or likely to mislead and deceive in contravention of the then ss 42 of the Fair Trading Act 1987 (NSW) and s 52 of the Trade Practices Act 1974 (Cth) and (from 1 January 2011) s 18 of the Australian Consumer Law. The initial estimates for which there was not a reasonable basis and the failure to provide updated estimates was also a breach of Burrell Solicitors' contracts of retainer. (d) The Champion parties were aware soon after the estimates were provided that they were materially wrong. They did not rely on the estimates in continuing to retain Burrell Solicitors as their solicitors, nor in retaining and continuing to retain counsel and incurring the costs of the litigation. (e) Although the litigation was unsuccessful, it was not without benefit for the Champion parties. The work done in connection with the court proceedings was also relevant to the Pt 3A application. The Champion parties continued with the litigation in the Land and Environment Court knowing that the estimates provided by Mr Burrell were wrong. They did so because of the advantages they perceived would accrue either from a successful outcome of the litigation or because it was hoped that decisions on particular issues could be relied upon in relation to the parallel application for approval under Pt 3A. The failure to provide reasonable estimates and to update estimates was misleading and deceptive conduct but it did not cause the damage claimed. The failure to provide reasonable estimates and to update the estimates was a breach of contract, but the breach sounds only in nominal damages. (f) I have rejected the claims that the Champion parties agreed with Burrell Solicitors that they would be charged $10,000 per month for the work done by Burrell Solicitors or by Burrell Solicitors and counsel. (g) I have rejected the claim that Burrell Solicitors failed to take steps to settle the proceedings. The Champion parties in any event failed to establish that the proceedings could have been settled on terms that Mr Champion now says he was prepared to settle for. I consider the principles of advocate's immunity would in any event be a bar to this claim, although not a bar to the other claims. (h) I have concluded that the costs assessor's determinations are conclusive that the amounts for which judgments have been entered represent fair and reasonable remuneration for the work done in the Land and Environment Court proceedings. But neither the determinations nor the judgments entered pursuant to them create any res judicata, issue estoppel or Anshun estoppel that otherwise bar the Champion parties' claims.
These are my reasons.

[5]

Quarry expansion proceedings: costs estimate

In May 2008 Champions Quarry Pty Ltd ("Champions Quarry") submitted a development application to Lismore City Council seeking development consent to expand an existing sandstone quarry to increase the annual rate of extraction of stone from 29,000m³ per annum (said to be about 50,000 or 60,000 tonnes per annum) to an average of 200,000 tonnes per annum, up to a maximum of five million tonnes for the life of the quarry. The development application also sought a boundary adjustment to expand the size of the quarry with additional rural allotments.
The Lismore City Council refused the development application on 10 February 2009.
On 6 April 2009 Reavill Farm Pty Ltd ("Reavill Farm") and another company controlled by Mr and Mrs Champion submitted an application for the approval of the Minister pursuant to the then Pt 3A of the Environmental Planning and Assessment Act 1979 to the expansion of the quarry to allow for extraction and processing of 250,000 tonnes per annum. The application stated that a boundary adjustment and resubdivision was also proposed.
On or about 2 February 2010 the Champion parties retained Burrell Solicitors to commence and conduct Class 1 proceedings in the Land and Environment Court appealing against the refusal by Lismore City Council of a development application relating to a proposed extension of an existing quarry at Tuckurimba. These are called the quarry expansion proceedings. The appeal was filed with the Land and Environment Court on 9 February 2010.
On 2 February 2010 Mr Burrell, writing as "principal and director" of Burrell Solicitors, noted that the work Burrell Solicitors was instructed to carry out was as follows: "1. Commence and conduct class 1 proceedings in the LEC. 2. Assist in any negotiations with council. 3. Liaise with the Dept as instructed. 4. Advise generally. 5. Engage counsel as instructed. 6. Liaise with Michael Young as instructed." (Michael Young was a solicitor in Ballina who had helped with aspects of the development application.)
By his letter dated 2 February 2010 Mr Burrell estimated that Burrell Solicitors' professional fees, excluding disbursements, could range between $8,500 and $10,500 plus GST assuming a hearing of three days. This figure did not include barrister's fees. The letter said that Mr Burrell would appear as advocate and that no barrister was required unless a complex issue of law or fact arose, or Mr Champion instructed otherwise, at which time he would advise of the barrister's estimated fees. The letter stated that actual costs could exceed the estimate if the scope of the matter or its complexity increased for reasons outside Burrell Solicitors' present knowledge or control. Mr Burrell advised that the client should allow $2,610 for any extra day of hearing based on a nine-hour day plus GST and should allow at least $1,000 for disbursements. The estimate did not include any filing fees or witness costs. The estimate stated that expert witnesses could include a surveyor and environmental consultant. The letter stated that this was a broad estimate only and not a firm price. The letter set out the hourly rate of $330 per hour plus GST for the principal of the firm and $280 plus GST for an employed solicitor or associate, but a lower rate of $70 per hour would be charged for simple clerical tasks such as filing, photocopying, collating and delivering documents.

[7]

No reasonable basis for estimates

The Champion parties allege that when Mr Burrell provided these estimates he knew, or ought to have known, that the costs estimates were not accurate. They allege that the estimates were provided in breach of Burrell Solicitors' retainer to use due skill, care and diligence in providing costs estimates for the proceedings to ensure that the estimates were as accurate as possible. They say that ultimately both proceedings cost them in excess of $1.5 million including solicitors' costs, counsel's fees and the costs of expert witnesses. They say there was no reasonable basis for the estimates.
I accept that there was not a reasonable basis for the costs estimates when they were made. Mr Burrell was told on 2 February 2010 by Mr Young that the Environmental Impact Statement for the development application for the expansion of the quarry was huge and had three volumes. He was told by Mr Champion that the contemporaneous Pt 3A application made to the Minister was a comprehensive study on which no expense had been spared to cover every possible issue thoroughly. He was told that the expansion of the quarry was a local political issue, that the local paper had got involved, and that the council had refused the DA even though the planner who assessed the application had recommended its approval.
Mr Burrell accepted that he had Lismore City Council's letter of refusal that outlined 11 issues on the basis of which the development application for the expansion of the quarry had been refused. I infer that he had the grounds of refusal at the time he gave his estimate. If he did not, it would indicate a fortiori that he did not have a reasonable basis for his estimate of the costs of the quarry expansion proceeding and was aware of the absence of a reasonable basis for the opinion.
The grounds for the council's refusal of the 2008 development application as recorded in its notice of determination of a development consent were as follows: "Council's Resolution No. 11/09 Resolved that the Councils Officer's Recommendation not be adopted and that the application be refused on the following grounds: 1. The development does not comply with the prescribed buffers in the Lismore Development Control Plan and will create land use conflict. 2. The development inconsistent with the relevant zone objectives in the Lismore Environment Plan 2000. 3. Traffic impacts are very significant and will have an unacceptable impact on the road network over the life of the quarry. 4. The development will generate unacceptable levels of noise especially during the proposed construction period. There is no consideration of the noise and vibration impacts on nearby fauna as koalas. 5. The development will generate unacceptable levels of dust, including silica dust that poses health risk to adjoining residents and fauna. 6. The development may have impacts on flora and fauna. There has been insufficient investigation to determine the level of impact. 7. The development will have unacceptable impacts on water systems, soil stability and there is an inadequate rehabilitation plan. 8. Visual impacts will be significant and unacceptable for many people living in the area especially within the buffer zones. 9. The development may negatively impact on Aboriginal sites of archaeological and cultural significance. 10. The application does not address the economic impacts on eco tourist businesses. 11. The development cannot be held to be comply with the public interest."
Both applications required substantial preparatory work in addition to the time for hearing. Mr Burrell deposed that he gave his initial estimate of the costs of the quarry expansion proceedings before he had seen any documents. He said that at the time he gave his estimate he understood that Mr Champion wanted the appeal lodged quickly with the Land and Environment Court before the 12-month limitation period on appeal expired. He said he understood that being a designated development the application required an Environmental Impact Statement and that consequently a thorough and detailed environmental assessment of the proposal had been undertaken and that the rejection of the council officer's assessment of the proposal was politically motivated. He said he understood that the environmental issues in dispute were insignificant and that the main technical reason for refusal related to non-compliance with a buffer zone setback requirement for nearby residents which was ignored when the council had its own quarry approved at Blakebrook. He said that he understood that a second technical reason was that noise received at one neighbouring residence would be three A-weighted decibels above guideline levels if unmitigated, but this was a non-issue because an earthen bund had already been built near this house as part of the existing quarry consent. He said that he understood that Mr Champion had been pursuing a Pt 3A application for approval for the quarry expansion from the Minister and his consultants, ERM Australia, at great cost had documented a very detailed and thorough environmental assessment. He said that he understood from what Mr Champion told him that all relevant environmental planning and assessment issues had been carefully thought through and dealt with. According to Mr Burrell, Mr Champion said that an appeal to the Land and Environment Court against a refusal was easily winnable on its merits and should be "a walk in the park". He also said that Mr Champion told him that the general manager of the council dreaded the prospect of incurring legal expenses over the application and this was a weakness that could be exploited. He said he made his estimate on this basis.
I do not accept that Mr Champion said that the proceedings in the Land and Environment Court would be a "walk in the park". I accept Mr Champion's evidence that in his initial discussion with Mr Burrell he told Mr Burrell that the council gave 11 reasons for refusal, and that although the issue of buffer zones was discussed, he did not say it was the main issue. I accept Mr Champion's denial that he said that the matter would be satisfactorily mitigated by proposed tree-planting and low acoustical bunds.
I do not consider that Mr Burrell had a reasonable basis for the estimates that he made for the costs of the quarry expansion proceedings on 2 February 2010 on the basis that he set out. His estimate was based on a three-day hearing in which he would act as advocate at the rate of $280 per hour plus GST and that $2,610 plus GST should be allowed for any extra day of hearing based on a 9-hour day. A 10-hour day would be a minimum time that an advocate would spend. This estimate assumed that at most only the equivalent of one day's preparation would be required for a three-day hearing by a solicitor advocate who would be responsible for all pre-trial preparation. On his own account, the Environmental Impact Statement and supporting reports were extensive, there were numerous grounds for the council's rejection of the application and reason to expect vigorous opposition to the application. Mr Burrell did not say that he did not intend to charge for preparation that exceeded his estimate. His estimate was unreasonably low, even on the understanding to which Mr Burrell deposed. I do not see how Mr Burrell could have believed that he could conduct the case for a three-day hearing at the cost he estimated on the basis of the hourly rates he proposed to charge. I am satisfied that he did not believe that the matter would be completed after a three-day hearing for a cost within the range he estimated.
In February 2010 Burrell Solicitors was under financial pressure. Mr Burrell gave evidence in cross-examination that Burrell Solicitors' tax obligations were not fully paid each year and the overall debt was rising. He said that from memory the years the tax debt increased were from 2010 to 2012. He said that from his recollection the unpaid tax debt was not a very large amount, but it started to bite in 2010. This provided a motivation for his underquoting to attract the client. I am satisfied that that is what happened.
Mr Burrell's estimate of $4,500-$6,500 plus GST for the Woolley Bund proceeding on the basis that he would appear as advocate was provided to the Champion parties on 18 March 2010. The estimate was given after a meeting held on 15 March 2010 with the solicitors for Lismore City Council, Sparke Helmore, and officers of the council. At that meeting a council employee said that the council's advice was that the unapproved Woolley bund could not be approved retrospectively by the Minister pursuant to Pt 3A. Mr Burrell's file note recorded that this was a significant issue. He deposed that after the meeting on 15 March Mr Champion said to him that the Woolley Bund was essential for noise control and if the Minister could not approve it under Pt 3A then they needed to appeal the s 96 application and go all out to win approval in the Land and Environment Court for the Woolley Bund. Mr Burrell recommended the retainer of Mr T Robertson SC who was subsequently engaged to act in both matters.
Mr Burrell did not attempt to identify a reasonable basis for his estimate of $4,500-$6,500 plus GST on the basis that he would act as solicitor/advocate in the Woolley Bund proceeding. I conclude there was none, and that Mr Burrell was aware that this was not a reasonable estimate.
But what follows?

[8]

Estimates not a cause of loss

If reasonable estimates of the likely costs of both sets of litigation had been given based on the information available at the time, I am satisfied that the Champion parties would still have embarked upon the litigation. That appears from the events which followed. It must have become clear to the Champion parties shortly after 18 March 2010 that the estimates were hopelessly wrong, and yet they continued with the litigation and with Burrell Solicitors' retainer.
Mr Robertson SC was briefed shortly after 15 March 2010. He provided a costs estimate for both cases on 25 March 2010 of $84,000 plus GST assuming a six-day case with a s 34 conference and no junior. There was no challenge to this as being a reasonable estimate of Mr Robertson's fees at the time it was given. It falsified the basis of Mr Burrell's estimates.
Mr Burrell forwarded Mr Robertson's costs agreement to Mr Champion and sought his undertaking on behalf of Champions Quarry, himself personally, and Reavill Farm that Mr Robertson's invoices would be paid promptly and that sufficient money would be given to him in advance to be held in trust to cover the costs of any s 34 conference or hearing.
The reference to a s 34 conference was to s 34 of the Land and Environment Court Act 1979 (NSW). That section provides in substance that if proceedings are pending in class 1, 2 or 3 proceedings the court may arrange a conciliation conference between the parties presided over by a single Commissioner. If agreement is not reached the parties can consent to the Commissioner's disposing of the proceedings following a hearing, whether held forthwith or later, or, with the consent of the parties, on the basis of what has occurred at the conciliation conference. Otherwise, if agreement is not reached and the parties do not consent to the Commissioner's disposing of the proceedings, the Commissioner is to make a report to the Court stating that the conciliation conference has been terminated and setting out what, in the Commissioner's view, are the issues in dispute between the parties.
Burrell Solicitors issued invoices to the Champion parties on 25 March 2010 in respect of both proceedings. Burrell Solicitors charged $6,476.15 in respect of the quarry expansion proceedings and $1,667.98 in respect of the Woolley Bund proceedings and offered a 10 per cent discount if payment were made by 1 April 2010. These invoices covered work by Burrell Solicitors up to 23 March 2010. That is to say, already by 23 March 2010, Burrell Solicitors had charged preparation costs for the quarry expansion proceedings of over $6,000, whereas its estimate had allowed only the equivalent of one day's preparation of less than $3,000 costs for the whole case.
Mr Burrell deposed that on 26 March 2010 he spoke to Mr Champion by telephone and Mr Champion told him that he would be seeing his bank manager to secure funds needed to run the cases. Mr Burrell deposed that he advised that costs would largely turn on the position adopted by the council as to whether to agree to a binding s 34 conference. Mr Burrell deposed that he said that he would need to send a revised costs estimate, and that Mr Champion should allow six days for a contested hearing and three days for the Woolley Bund appeal. Mr Champion denied this conversation. He said that he had read Mr Robertson's estimate for both proceedings taking six days and was concerned about it. He deposed he said to Mr Burrell words to the effect that he could not pay those additional costs until he sold two units, but he told Mr Burrell that he would proceed on the basis that Mr Burrell as well as Mr Robertson would be involved for six days.
I prefer Mr Champion's evidence as to these matters, that is, that he was advised that both proceedings were likely to take six days as estimated by Mr Robertson SC. That was a reasonable estimate at the time.
Mr Champion did not recall Mr Burrell's saying that he would need to send a revised costs estimate and I do not accept that Mr Burrell said that. In any event, no such revised estimate was provided.
Mr Champion deposed that shortly after 26 March Mr Burrell started talking about bringing in other experts and he allowed up to an extra $30,000 in his own mind as to the likely costs, being a total of about $150,000 inclusive of all legal costs and expert witnesses. He proceeded on the basis that approximately $120,000 was the total anticipated cost and at the most he might have expected to pay $150,000. Clearly from at least this point Mr Champion was not placing any continued reliance on Mr Burrell's initial estimates.

[9]

Misleading and deceptive conduct by ongoing failure to make disclosure

Section 316 of the Legal Profession Act 2004 provided that: "A law practice must, in writing, disclose to a client any substantial change to anything included in a disclosure already made under this Division as soon as is reasonably practicable after the law practice becomes aware of that change."
Burrell Solicitors admits that it failed to disclose in writing to the Champion Parties that there were substantial changes to the costs estimates as soon as practicable after it became aware of the changes and that this failure was a breach of s 316 of the Legal Profession Act 2004 (NSW). But it contends that the Champion parties knew that legal costs were increasing commensurate with the increase in the complexity and scale of the litigation.
Mr Burrell deposed that he was unaware of any obligation to disclose to the Champions in writing any substantial change to anything included in the costs disclosure statements and costs agreement provided to them on 9 February and 18 March 2010. He noted that the costs disclosures themselves contained advice that the figures might and probably would change when more information was available to Burrell Solicitors and that the major factors which would affect the estimates would be an increase in the scope of their instructions or material or evidence affecting the conduct of the case becoming relevant of which they were not presently aware. He said that he took the view that Mr and Mrs Champion were sophisticated clients who were aware of the nature and extent of the dealings which they instructed Burrell Solicitors to undertake and understood the costs associated with those matters. Mr Burrell said that his understanding of what was required in relation to costs agreements was largely based upon a decision of Bryson J in a case called Hogarth v Gye [2002] NSWSC 32 because he had been involved in an aftermath of that case.
The judgment referred to was not separately tendered. Mr Burrell's evidence on this topic was read without objection and effectively incorporates by reference what was said by Bryson J, which is a matter of public record. I have concluded that I should have regard to what his Honour said in order to assess this part of Mr Burrell's evidence.
In Hogarth v Gye Bryson J was considering the Legal Profession Act 1987 and the Legal Profession Regulation 1994, not the Legal Profession Act 2004. His Honour made three observations that Mr Burrell might have considered were relevant in relation to the making of ongoing disclosures. His Honour said that a solicitor's right to be paid for his work did not depend on his compliance with the provision of Pt 11 Div 2 relating to disclosure (at [25] and [27]). His Honour also said that an obligation to make a disclosure did not require the communication of any information to a person who was aware of the matter supposedly to be disclosed (at [25]), and that it was obviously correct that a solicitor was not required to disclose an estimate of the likely amount of costs of the conduct of proceedings if it was impossible to make a pre-estimate in relation to elaborate commercial proceedings (at [27]).
One interpretation of Mr Burrell's evidence is that he believed from what Bryson J had said that not making disclosure of his estimated fees would not affect his right to be paid. From this it might be inferred that his omission to provide further estimates was deliberate. But Mr Burrell was not cross-examined in relation to this part of his evidence, and I do not draw that inference. It is not critical to either party's case whether Mr Burrell knew that he was obliged to provide a revised estimate and deliberately refrained from doing so, or whether, perhaps because of pressure of events, he simply did not get around to providing a fresh estimate.
Burrell Solicitors' continued failure to provide a fresh reasonable estimate when it was its duty to do so was a breach of contract and misleading and deceptive conduct by omission. It induced in the Champions an incorrect assumption as to the likely legal costs of the proceedings, that would have been corrected had a fresh estimate based on reasonable grounds been provided.
In April 2010 Mr Champion assumed that the total costs could be in the order of $120,000 to $150,000 for both proceedings. Although that proved to be far short of the mark, had such an estimate been provided at that time it would not have been unreasonable.

[10]

Alleged costs agreement of $10,000 per month in April 2010

The Champion parties alleged that on or about 28 April 2010 they reached an agreement with Burrell Solicitors to pay Burrell Solicitors $10,000 per month in return for legal services to be provided by Burrell Solicitors. They say Burrell Solicitors breached this agreement by later rendering charges significantly in excess of $10,000 per month. They plead that the invoices rendered by Burrell Solicitors for fees and disbursements for the period from 26 May 2010 to 30 September 2011, not including expert fees, totalled $974,280.19.
Burrell Solicitors denies that an agreement was made in those terms. It says that in or about late March or early April 2010 the parties entered into an oral agreement in which it was agreed that the Champion parties would pay Burrell Solicitors at least $10,000 per month on account of solicitor's fees, amounts invoiced for disbursements for out-of-pocket expenses plus all amounts invoiced by Mr Robertson for counsel's fees.
In an affidavit sworn on 15 November 2011 Mr Burrell set out a summary of the costs for which the Champion parties had been billed in various matters and the payments made towards those costs. He deposed that Reavill Farm had paid a total of $364,986.04 towards Burrell Solicitors' bills for the two cases of $985,343.16 leaving an outstanding balance of $620,357.12 plus interest. He said that the payments had comprised numerous payments, often at about $10,000 each month, in reduction of Burrell Solicitors' professional fees, totalling $159,604.74; payment of disbursements totalling $30,380.50; and three lump sum payments totalling $175,000 in reduction of counsel's fees.
In an affidavit sworn by Mr Champion on 1 December 2011 Mr Champion referred to this evidence and deposed that: "Burrell Solicitors refers to the defendants having paid numerous payments often about $10,000 per month. The way this is stated is quite misleading. Clearly from evidence provided by me, the $10,000 per month was the amount Burrell Solicitors stated in April and May 2010 was the amount approximately required to run the case, excluding disbursements and Mr Robertson's costs." (My emphasis.)
In his affidavit of 24 November 2012 Mr Champion deposed that on or about 30 April 2010 he had a conversation with Mr Burrell to the following effect: "JB: I am encountering major financial difficulties. I owe the bank interest and if I can't get money in, I am going to have difficulty going on. Can you give me some money now? Can you pay me $10,000 a month for the running of the case? This will cover my monthly costs and my mortgage commitments. Me: I am reluctant to do this. You haven't given me an invoice for that amount. JB: I will give you statements."
Mr Champion deposed that at that time he had been invoiced $3,383.08 which he had paid. The matter had been listed for a binding s 34 conference to be heard in June 2010. He understood that Mr Burrell was asking for a further $20,000 for his fees and that this was within the budget he had set for himself allowing for $120,000 for solicitors and counsel. He arranged for the payment of $10,000 per month.
In a later affidavit sworn on 4 October 2014 Mr Champion deposed that his understanding was that the payments of $10,000 per month were towards Mr Robertson SC's fees as well as the fees of Burrell Solicitors.
Mr Burrell deposed that in about March 2010 Mr Champion said to him: "We are short of cash to pay legal expenses until we refinance and/or sell property assets we are holding. However, we will pay you $10,000 a month until then and the balance when we refinance or sell." He deposed that from about March 2010 until May 2011 Mr Champion caused payments of approximately $10,000 a month to be made to Burrell Solicitors. Burrell Solicitors says that these were payments on account.
Burrell Solicitors issued further invoices on 29 May 2010 and 2 July 2010 for their professional costs and further invoices each month to the end of December 2010 for disbursements. The invoice of 29 May 2010 was for professional costs of Burrell Solicitors and office disbursements, such as photocopying, telephone and fax, for $14,756.01. It was rendered in respect of the Woolley Bund proceeding. A discount of 10 per cent was offered if the bill was paid by 5 June 2010. It covered the period from 23 March to 30 April 2010 and was in the form of a bill of costs that specified each item of service for which the charge was made and the time spent.
Burrell Solicitors rendered two invoices on 2 July 2010 in respect of the Woolley Bund proceeding. The first invoice in respect of the Woolley Bund proceeding addressed to Reavill Farm was for $22,462.37 for professional costs and office disbursements and a discount of 10 per cent was offered for early payment by 9 July 2010. It covered the period from 31 March to 22 June 2010 and again took the form of a detailed bill of costs that itemised each service for which the charge was made and the time spent for each item (in six-minute divisions). A further invoice of $7,986 was rendered on 2 July 2010 by Burrell Solicitors Mr Burrell's attendance at the Land and Environment Court on 23 and 24 June 2010 for the Woolley bund proceeding. Again, a discount was offered for early payment.
The invoices issued on 29 May and 2 July 2010 for professional costs and "office disbursements" that totalled (before discount) $45,213.38 covered a period of about three months, but related only to the Woolley bund proceedings.
The Champion parties made payments of $10,000 on 30 April, 31 May, 29 June and an additional payment of $792.94 on 5 June 2010. They made further payments of $10,000 on 20 July and 30 July 2010 and on 30 August 2010 and further payments towards disbursements or Mr Robertson's fees in that period.
No objection was made by the Champion parties to the invoices raised by Burrell Solicitors in May and July 2010. Those invoices were inconsistent with there having been an agreement that Burrell Solicitors would be paid a fixed amount of $10,000 per month for the work to be done on both cases. The invoices rendered exceeded that amount and related only to the Woolley bund proceeding.
In a letter dated 27 September 2011 to Mr Burrell, Mr Champion complained about numerous aspects of Mr Burrell's conduct of the two proceedings. Mr Champion said that: "We received the s 96 appeal accounts for your fees in July and September 2010. For the main appeal we received accounts in February, March and April 2010. We then received no fee accounts, or costs agreements from you for the main case from April 2010 to 31 December 2010 for work done up to 27 October 2010 totalling $267,433.88, which totally stunned us. During that time we were paying you as agreed, generally $10,000 per month, and believed that there may be a little more owing per month, but nothing like that claimed, i.e. approximately $44,000 per month - a 400% plus increase." (My emphasis.)
In a complaint to the Legal Services Commissioner on 17 October 2011 Mr and Mrs Champion said that: "Burrell Solicitors failed to provide us with monthly accounts for most of the time and requested approximately $10,000 per month to keep the matter going, but provided no written disclosures of costs during the case when substantial changes took place."
I do not accept that there was an agreement as alleged by the Champion parties that Burrell Solicitors would act in both proceedings for payment of $10,000 per month either inclusive or exclusive of disbursements. The contemporaneous materials show that the payment of $10,000 per month was to be made on account.
No updated estimate of costs was provided. No further invoices other than for counsel's fees and disbursements were provided from 2 July 2010 until January 2011.

[11]

Oral estimate on 27 April 2010

Mr Burrell deposed that on 27 April 2010 he said to Mr Champion words to the effect of "I am sure you are aware that the original costs estimates I provided for these proceedings is now blown out of the water completely by everything that has happened over the last few weeks" and that in response to Mr Champion's request as to how much he thought it would cost he said "I don't know, already my fees would be at least two or three times higher". Mr Burrell's file note of the conversation records "Now cost unknown but 2 or 3 times". I think Mr Burrell's addition of the words "at least" was a reconstruction. I accept that Mr Burrell said that his fees were unknown but could be two or three times higher. To say that the costs were, or could be, two or three times higher than his original estimate provided no proper estimate as at the end of April 2010 of likely costs. By that time it was apparent that the litigation would be substantial. Mr Burrell had participated in a telephone conference call with Mr Robertson and ERM's acoustical engineer, Mr Muller, who stated that his initial noise modelling had been broad brush and imprecise and based on incorrect modelling of contours. On 21 April Mr Robertson colourfully expressed the view that the case would be lost unless a noise reduction strategy could be found. He expressed concern that "We are going headlong into this case with nothing on the table for structured noise attenuation, ongoing monitoring and compliance protocols." Mr Robertson also said that the environmental assessment undertaken in support of the Pt 3A application would have to be somehow brought into the quarry expansion appeal which would require a revamping of the appeal. Mr Robertson said that visual aids or visual montage showing sections of successive stages of excavation would need to be produced and this would all have to be put together as a matter of urgency. He noted that if material were put forward as a proposed amendment to the development application the Champions would suffer a costs consequence under s 97B of the Environmental Planning and Assessment Act.
On 22 April 2010 Mr Burrell had learned that two additional areas had been identified by the council as areas where expert evidence would be given on the proposed s 34 conference. One was planning, which did not give rise to concern, but the other was air quality. This caused Mr Burrell to be concerned that the council was changing the scope and nature of the proceedings to something much bigger and harder fought. On 22 April he was told by Mr Champion that a council planner had requested access to the property for a person from Cumberland Ecology. Mr Burrell said that that could only mean that the council wanted to canvass flora and fauna as an issue in the case as well as three earlier issues they had identified, being aboriginal heritage, noise and visual impact. By 25 April 2010 Mr Burrell had identified what appeared to him to be shortcomings in the ERM visual analysis. There were other issues raised which indicated the likely expansion of scope of the proceedings. Mr Burrell's statement to Mr Champion on 27 April that the costs could be two or three times more than he had previously estimated was itself an unreasonable assessment.

[14]

Progress of litigation: Quarry Expansion Appeal

In addition to opposing the Pt 3A application the council submitted to the Department of Planning that if both the Land and Environment Court granted consent and the Department of Planning also considered granting consent, the proponent should not be able to operate under a choice of consents applying to the same land and activity. The council advised that it would provide to the Department copies of any revised conditions of consent to be submitted to the Land and Environment Court as part of the quarry expansion appeal. I accept the submission of counsel for the Burrell parties that from at least 23 April 2010 the quarry expansion proceedings and not the Pt 3A application process became the principal focus of the consideration of expert evidence, factual issues and legal submissions relevant to whether approval should be granted for the expanded quarry and, if so, on what conditions.
Although the quarry expansion proceedings were ultimately unsuccessful, it does not follow that the Champion parties derived no ultimate benefit from the work done in those proceedings for which legal fees and fees of expert witnesses were incurred.
The quarry expansion proceedings assumed a much greater dimension than Mr Burrell had contemplated. Mr Robertson warned against the Champion parties' agreeing to be bound by a Commissioner's determination following a conciliation. He considered that the evidence adduced to that time was inadequate. The s 34 conference proposal was also abandoned owing to the council's having expanded the areas on which it proposed to adduce expert evidence.
The Champion parties amended their development application. This resulted in adverse costs orders against Reavill Farm. This situation arose because both Mr Robertson and Mr Burrell were of the view that the Environmental Impact Statement that had been submitted with the development application in May 2008 was not a fully conceived proposal and that properly to conduct the quarry expansion proceedings it would be necessary formally to amend parts of the development application. Mr Champion accepted this advice on 27 May 2010 and decided not to discontinue the proceedings at that time, although that was proffered as a choice.
Mr Champion deposed that he objected to Mr Burrell's obtaining additional statements of evidence and said that Mr Burrell was acting without instructions. He deposed that it was Mr Burrell who changed the terms of the development application and was acting in these respects without instructions. I do not accept that evidence.
In these proceedings Mr Champion suggests that he was opposed to the case becoming a "fully contested case". The case was "fully contested" partly because of issues raised by the council, but also because of matters raised on Mr Champion's insistence. Thus Mr Champion insisted that the question of road levies that the council should be entitled to charge was of vital importance even if the appeal proceedings were lost. Over the projected life of the quarry the difference between the case propounded on road levies by the Champion parties and the condition the council required if development consent were given, totalled more than $5 million. On 16 December 2010 Mr Champion sent an email to Mr Robertson and Mr Burrell in which he said that the issue of s 94 contributions which was due to be heard in late January was: "… vitally important to our cost of production and competitiveness with quarries in adjoining Council areas for the next 25 years. We would need to consider how we ensure a positive outcome for either the Part 3A or the EIS DA appeal in respect of the levies issue".
The hearing of the quarry expansion appeal commenced on 25 October 2010 and continued on 26 and 27 October 2010 principally dealing with the issues relating to the road levies contribution that should be required as a condition of the approval. The matter was then adjourned to 27 and 28 January 2011 to complete the "roads evidence" with hearing on other issues to commence on 2 February 2011.
On 9 September 2010 Mr Champion wrote to Mr Robertson (copied to Mr Burrell) saying: "Dear Tim, I just wanted to drop you a note regarding my account with you and as you know we and council signed off on a binding Section 34 with an estimate of costs from you and John and others of approximately $150,000. Since then it has developed into a fully contested case which is likely with all expert reports and legal costs to be $400,000 plus. I want to assure you that payment to you will commence shortly. I have had to sell Ballina Manor and four units to reduce debt to our banks and to fund this case. All five properties are exchanged. … I greatly appreciate you acting for us while we are selling units to fund the case. … … Your ongoing guidance is essential to our case. We have put enormous effort and cost into the development over the past 6 years and don't want to lose the race on the home straight."
The quarry expansion appeal resumed on 27 and 28 January 2011 and was heard over a further eight days from 2-11 February in Lismore. It was further adjourned to 28 March.
It is unnecessary to review the detail of the progress of the quarry expansion proceedings. Whilst Mr Champion was critical of Mr Burrell's handling of the matter, counsel for the Champion parties correctly accepted that any claim for damages based upon alleged negligent preparation would be barred on the principles of advocate's immunity. However, one complaint of alleged negligence in the conduct of the proceedings was pressed. The Champion parties submitted that this complaint was not within the scope of advocate's immunity. They complained that Mr Burrell failed to act on instructions, said to have been given to him by Mr Champion, to take steps to terminate the quarry expansion proceeding.

[15]

Alleged failure to act on instructions for settlement

On 14 December 2010 Mr Robertson sent an email to Mr Burrell as follows: "Sandra [Ms S Duggan SC, counsel for the Lismore City Council] floated with me the effect of a Part 3A approval on the proceedings. She asked whether we would withdraw the case. I said that that depended on what was approved (I had in mind that you may be stuck with a s94 condition which you did not like) and whether Council would seek costs if we discontinued. I said that if we were at risk as to costs, it would be cheaper for us to run the case to conclusion than pay Council's costs to date. We agreed to seek mutual instructions, on the basis that if we get the approval we should make a decision fairly soon. I understand that they have been bleeding money as a result of the expert conferencing."
Mr Champion received the email. He replied on 16 December 2010 to Mr Robertson stating: "Thanks for your email 14 December 2010 re Duggan's suggestion if the Part 3A is approved shortly. Maybe she has heard some rumours re the Part 3A. I think all I can say at this time, is that we can only await the outcome off [sic] the Part 3A and then decide. The Section 94 contributions to be heard in late January 2011, is vitally important to our cost of production and competitiveness with quarries in adjoining Council areas, for the next 25 years. We would need to consider how we ensure a positive outcome for either the Part 3A or the EIS DA appeal in respect of the levies issue. …"
On 20 December 2010 Burrell Solicitors received a letter dated 15 December from Sparke Helmore on behalf of the council stating as follows: "We understand that your client is continuing to pursue a Part 3A application in which the construction of an expanded quarry is proposed. This proposal concerns the same land which is the subject of the above appeal. Our client is continuing to incur significant costs in preparing for the appeal, which is scheduled to recommence on 27 January 2011. It would be appreciated if you could advise of your client's intention with the future conduct of the appeal, in the event that the Department determines (by way of either approval or refusal) the Part 3A application before the further hearing of the appeal."
Mr Champion deposed that on 23 December 2010 Mr Burrell told him that he had received a written offer from Sparke Helmore seeking Champion Quarry's attitude to the continuation or otherwise of the proceedings given the impending determination of the Pt 3A application and the significant cost council was continuing to incur for the appeal. He said that he gave "absolute instructions" to Mr Burrell immediately to forward a copy of the letter to him and to respond immediately to Sparke Helmore before council's consultants commenced their work. He said the reason for this was to mitigate further costs and because he had been advised that the Pt 3A draft project approval would be issued by the end of January. Mr Champion said that Mr Burrell declined to act on those instructions and said "No, I'll leave it for a while and see what they come back to me with", or words to that effect.
This does not make sense because Sparke Helmore was inviting Champion Quarry's response and there was no reason to think that they would come back with anything until some response was received.
Mr Champion deposed that he said that he wanted it done immediately, otherwise the opportunity for settlement would not remain for long. Because the Land and Environment Court hearing was to resume on 27 January 2011 and the council's consultants would have to commence work on the expert reports in early January, the council would have no incentive to settle the matter unless it were settled promptly. He said that Mr Burrell did not forward the letter to him from Sparke Helmore until 12 January despite his request on a number of occasions. He complained that his instructions were not carried out.
In his affidavit of 1 December 2011 Mr Champion did not say that he had given any instructions as to how Burrell Solicitors should respond to Sparke Helmore's letter. In a later affidavit Mr Champion put into direct speech what he said Mr Burrell told him in the telephone conversation of 23 December 2010. According to Mr Champion Mr Burrell said words to the effect: "The council is wanting to know our attitude to withdrawing from the case … [on the basis that] … both parties withdraw and each side pay their own costs."
Mr Champion deposed that he then said "Yes, I agree. Please send me a copy of the letter immediately", and that the conversation then proceeded as follows: "Champion: We've got these conditions of consent for the Part 3A supposedly coming out so we don't need these proceedings. Burrell: I will respond in the new year. Champion: No John. Don't wait a day. These people are only willing to settle because they will have been told what I have been told which is that the draft conditions of consent for the Part 3A have been resolved. Please immediately send me the letter."
I do not accept that a conversation in these terms took place. Mr Burrell denied it. In his earlier affidavit sworn on 1 December 2011 Mr Champion had not deposed that the council had asked to know the Champion parties' attitude to withdrawing from the case on the basis that each side pay their own costs. He did not depose that he told Mr Burrell that he agreed to withdraw the case on that basis. That was inconsistent with his instructions of only a week earlier.
Mr Champion's evidence of his telephone conversation with Mr Burrell on 23 December 2010 was to a degree corroborated by his daughter, Ms Belinda Nott. She confirmed that Mr Champion asked Mr Burrell as a matter of urgency to immediately forward a copy of the letter to Champion's Quarry and to respond immediately to Sparke Helmore before the council's consultants commenced their work. She deposed that Mr Champion again asked for a copy of the letter on 5 January but it was not received until 12 January.
It is understandable that the Champion parties were concerned about the delay in receiving the letter from Sparke Helmore, but Mr Champion had been apprised of the substance of the letter and had had forewarning of it. He had communicated his attitude to Mr Burrell and he did not indicate any change in his attitude that the approach should not be responded to unless a decision on the Pt 3A application was forthcoming. The delay in forwarding the letter had no material consequence.
The Champion parties suggested that Mr Burrell deprived them of the opportunity to discontinue the quarry expansion proceedings with the council's agreement that there be no order as to costs or that costs be agreed in a reasonable amount. There is no evidence that the council would have been prepared to settle on terms that Mr Champion would have been prepared to accept. In any event, the contemporaneous documents show that he was not prepared to settle the proceedings in the absence of a decision on the Pt 3A application and that he regarded the resumed hearing in January on the contributions issue as an important matter that he wanted resolved.
Mr Champion did not further explain his evidence that he had been told that draft conditions of consent for the Pt 3A had been resolved. There was no evidence that they had been resolved.
Mr Champion received a copy of the council's letter dated 16 December 2010 on 12 January 2011. He did not instruct Mr Burrell to offer to discontinue the proceedings on the basis that there be no order as to costs. He was still awaiting advice on the outcome of the Pt 3A application.

[16]

Delivery of invoices

On 31 December 2010 Burrell Solicitors emailed to the Champion parties bills for professional costs dated 23 December 2010 and also a statement of account. Although dated 23 December 2010, the solicitor's professional fees the subject of the invoices related only to the period up to 27 October 2010. Mr Burrell's summary of the accounts and invoices stated that disbursements to 23 December 2010 totalled $22,195 of which $1,125.09 was outstanding, barrister's fees to 29 October 2010 amounted to $150,800 of which $75,000 had been paid and $75,800 was outstanding, and solicitor's professional fees to 27 October 2010 amounted to $337,005 of which $255,225 was outstanding. The summary of invoices indicated that solicitor's costs of between approximately $31,000 and $73,000 per month were being charged. These accounts did not include the costs of expert witnesses.
There was no contemporaneous complaint that the rendering of these charges was contrary to the alleged agreement that Burrell Solicitors would be paid $10,000 per month for their work.
I accept that charges of this magnitude were completely unexpected.
Mr Robertson was pressing Mr Burrell in relation to outstanding fees. On 23 February he told him that he would not set aside time for the next hearing date unless he had a binding payment schedule. Mr Champion responded by advising what steps he was taking to raise additional funds. On 24 February 2011 he wrote to Mr Robertson in terms that included the following: "When we embarked on the original Section 34b appeal, estimated by you and John Burrell to cost $90,000 and consultants and witnesses, total about $150,000, I informed John and you that we did not have immediate funds, and would have to start selling assets to fund the appeal, as the EIS DA and Part 3A have been a long expensive process ($6 million plus) with very little income. When the case became a fully contested case (and I know that you believe we had far better prospects of winning this way) I did not know that it would end up costing $1 million plus. … I don't want to lose or terminate the case after incurring costs of $1 million plus. We cannot complete the case with any chance of a win without you. … … DoP are now not wanting to issue the Part 3A because Lismore City Council had been lobbying DoP during the last 10 days of the case on aboriginal issues. The Land and Environment Court appeal is now more critical than ever. [Mr Champion contended that he had obtained evidence that showed that evidence given by an Aboriginal elder, or person claiming to be such, relied upon by the council, was false.]"
On 28 February 2011 Burrell Solicitors issued a further statement of account that included two further invoices of 28 February 2011 for professional fees of $77,732.82 and $57,619.32. Burrell Solicitors' fees (not including disbursements) for the two proceedings rendered to that time totalled $470,673.68. Disbursements (not including counsel's fees or fees of expert witnesses) totalled $23,788.20. Counsel's fees to 28 February 2011 totalled $317,029. To that point the Champion parties had made payments of $125,000 towards counsel's fees and $148,850.41 towards Burrell Solicitors' costs and disbursements.
On 28 February 2011 Mr Burrell provided to Mr Champion an estimate of future costs for himself for $44,000 and of Mr Robertson of $88,000.

[17]

Complaints

Understandably relations between Mr Champion, Mr Burrell and Mr Robertson became strained as the hearing of the appeal continued. Mr Champion struggled to find funds to meet the demands of his solicitor and counsel and was aggrieved at the level of costs he was being charged. On 5 March 2011 Mr Champion sent an email to Mr Burrell which, amongst other things, said: "In relation to your costs, we already have an agreement between you and us, and have had since before you started on the case. I am not entering into any new agreement because you did not send us accounts for months."
This was the first, albeit elliptical, reference to what became the asserted agreement that Burrell Solicitors would charge $10,000 per month. At least that is how Mr Burrell understood it. He responded to this statement saying: "You were aware that the $10K you have been paying me as [sic] been a part payment only."
Mr Champion did not respond to this, but he was in the position that the case was continuing. He needed the services of Mr Robertson in particular. He could not afford to have the case derailed at that late stage.
The Champion parties entered into agreements with Burrell Solicitors dated 26 March 2011 to provide security for their costs and counsel's fees.
There were further hearings over four days at the end of March and two further days in April 2011. On 12 May 2011 the Land and Environment Court dismissed the quarry expansion appeal. A précis of the judgment provided by the Court, which did not form part of its decision, said: "The reconstruction of the bund adjacent to the Woolley residence is unacceptable on acoustic impact grounds. A reconstructed bund adjacent to the Woolley residence is unacceptable on visual impact grounds. Both these grounds separately are sufficient to reject this structure. Rejection of this structure would require rejection of the proposed quarry in its entirety. There are other acoustic impacts of construction activities that would require rejection of the proposed quarry in its entirety. There are further, lesser impacts that could not require rejection of the proposed quarry in its entirety but which, when accumulated with other impacts, would all collectively require rejection of the proposed quarry in its entirety. There are insufficient public benefits to outweigh the adverse impacts and thus the quarry expansion is rejected. …"
Detailed reasons were provided for these conclusions (Champions Quarry Pty Ltd v Lismore City Council [2011] NSWLEC 1124).
On 27 September 2011 Mr Champion wrote a detailed letter of complaint to Mr Burrell in relation to the costs of the matter, Mr Burrell's failure to provide updated estimates of costs and to render timely bills and the conduct of the case generally. He complained that he and his wife had been forced to sign agreements under threat that, if they did not sign, the legal team would not complete the last days of the case. In the course of that complaint Mr Champion said, referring to the period from April to December 2010, that: "During that time we were paying you as agreed, generally $10,000 per month, and believed that there may be a little more owing per month, but nothing like that claimed i.e. approximately $44,000 per month - a 400% plus increase."
This statement confirms that there was not an agreement that Burrell Solicitors would only charge $10,000 per month for their work. On the other hand, there is no reason to disbelieve Mr Champion's statement that he did not believe that he would be charged anything like the amount that he later was charged.
On 11 November 2011 Burrell Solicitors filed an application for the assessment of counsel's costs (principally those of Mr Robertson SC) that had been billed to 3 November 2011. The unpaid amount for which assessment was sought together with interest was $223,261.82. The application for assessment stated that Reavill Farm (the costs respondent) had not objected to counsel's fees and the application was necessary only by its failure to pay the outstanding bills.
At that time no application had been lodged for the assessment of Burrell Solicitors' costs.

[18]

Commencement of proceedings: Disposition of Burrell Solicitors' claims

These proceedings were commenced by Burrell Solicitors on 16 November 2011. It filed a summons seeking as final relief a declaration that there was a binding and enforceable agreement as to the payment of legal costs and disbursements as contained in three agreements dated 26 March 2011 and a declaration that a mortgage given by Champions Quarry to it was enforceable. It sought specific performance of the agreements and also sought interlocutory relief.
On 22 December 2011 I gave judgment on Burrell Solicitors' claims for interlocutory relief (Burrell Solicitors Pty Ltd v Reavill Farm Pty Limited & Ors (No. 2) [2011] NSWSC 1615). I refused leave to Burrell Solicitors to lodge a fresh caveat (which had lapsed following the service of a lapsing notice) to claim an interest as equitable mortgagee under a mortgage given to it by Reavill Farm. The reason for that conclusion was that I did not think it seriously arguable that any amount was secured by the mortgage. The mortgage secured any amounts outstanding "due under the said tax invoices and any further tax invoices". I considered that it was not seriously arguable that Burrell Solicitors had complied with its obligations under s 316 of the Legal Profession Act 2004 to disclose in writing any substantial changes to anything included in previous disclosures as soon as reasonably practicable. Section 317 of the Legal Profession Act provided in substance that if a law practice did not make required disclosures the client need not pay legal costs unless those costs were assessed under Div 11 of Pt 3.2. I did not think it seriously arguable that any sum would be payable by the defendants other than pursuant to a certificate of determination of costs as assessed. I said that such costs would not be payable "under" the invoices that were lodged, but under and pursuant to a certificate of determination of costs as assessed (at [72]-[76]).
The same reasoning did not apply to other agreements which, if enforceable, required properties to be sold and the proceeds divided and paid in reduction of debts of Reavill Farm to Burrell Solicitors. Although there was no present debt payable by Reavill Farm to Burrell Solicitors such a debt or debts might well become payable following an assessment of its costs. Burrell Solicitors could be entitled to have the net proceeds of sale of the properties agreed to be sold applied in due course in reduction of such a debt if it became owing and payable. Hence, I extended two other caveats but required an undertaking by Burrell Solicitors that it would proceed to an assessment. That undertaking was given. Burrell Solicitors filed an application for the assessment of its costs against the Champion parties on 4 January 2012.
On 16 February 2012 the Champion parties filed their cross-summons.
On 28 February 2012 Burrell Solicitors sought and obtained leave to discontinue its proceeding on the summons. Ward J noted that the discontinuance did not affect the prosecution of the Champion parties' cross-claim.
The relief sought in the Champion parties' cross-claim included the setting aside of the agreements of 26 March 2011. Burrell Solicitors consented to that relief on the first day of the hearing.

[20]

Costs assessments

Both costs applications were referred for assessment to a costs assessor, Mr Rosier. He issued his determinations on 15 August 2012.
In respect of the application for the assessment of costs payable to Mr Robertson, Mr Rosier reduced Mr Robertson's fees by $21,680 plus GST but otherwise determined that a fair and reasonable amount to be allowed for his unpaid fees was $185,400.86.
Burrell Solicitors' claims for its own unpaid costs was in respect of costs issued between 31 December 2010 and 30 September 2012 totalling $493,243.92. Of this, only $77,000 had been paid. In respect of Burrell Solicitors' own claim for unpaid costs Mr Rosier determined that a fair and reasonable amount of costs required to be paid was $422,832.37 for which a credit of $77,000 in respect of moneys paid on account should be given, leaving a liability of $345,832.37.
Mr Rosier set aside Burrell Solicitors' costs agreement pursuant to s 328 of the Legal Profession Act on the ground that a solicitor who was so wildly out in his estimate of the costs to be charged should not have the benefit of a costs agreement which might give rise to a benefit to the solicitor which the solicitor would not enjoy if the assessor were merely to determine fair and reasonable costs.
Under s 367 of the Legal Profession Act a costs assessor was to determine an application for a costs assessment relating to a bill by confirming the bill or, if the assessor were satisfied that the disputed costs were unfair or unreasonable, by substituting for the amount of the costs an amount that, in the assessor's opinion, was a fair and reasonable amount. Mr Rosier summarised the thrust of the objections made by the Champion parties but observed that there was no specific objection to any of the work itself as having been unreasonable to have been performed, or having been performed in an unreasonable manner, or as having given rise to an unreasonable charge. Nonetheless, he observed that Burrell Solicitors had the onus of proving that the charges made were reasonable for work that was reasonable to have been performed and which was performed in a reasonable manner. He said that if there were doubt he would allow only the minimum which he felt would be fair and reasonable. Mr Rosier made adjustments to many of the individual items of charge in the invoices. He then considered whether he should exercise the power under s 317(4) of the Legal Profession Act. Section 317(4) provided that: "If a law practice does not disclose to a client … anything required by this Division to be disclosed, then, on an assessment of the relevant legal costs, the amount of the costs may be reduced by an amount considered by the costs assessor to be proportionate to the seriousness of the failure to disclose."
Mr Rosier decided that he should make an adjustment under s 317(4). He reduced the assessed costs by five per cent. He also did not allow interest. In reaching that conclusion Mr Rosier said that it did not appear to him that there was any particular deficiency in the manner in which either solicitor or counsel conducted the case and he did not believe that the Champion parties were badly misled or that they received a standard of care that was inappropriate.
The Champions applied for a review of Mr Rosier's determination. On 11 April 2013 the Review Panel dismissed the application. No appeal or application for leave to appeal was thereafter made to the District Court under s 384 of the Legal Profession Act.
Judgment was entered in the Supreme Court for Burrell Solicitors against the Champion parties on 22 August 2013 in the amounts of $188,005.11 and $349,302.42. On 26 November 2013 Lindsay J ordered a stay of enforcement of those judgments pending the determination of the Champion parties' cross-claim on certain conditions.
Pursuant to the conditions of the stay as subsequently amended the Champion parties have paid $106,000 into court.
Section 372 provided: "A costs assessor's determination of an application is binding on all parties to the application and no appeal or other assessment lies in respect of the determination, except as provided by this Division."
Counsel for the Champion parties said that: "The key aspect of this litigation is whether the Champion Group is liable to pay outstanding legal costs, which have been assessed in the sum of $537,307.53 and whether BS ought to be responsible for the costs incurred over and above what the Champion Group alleges were agreed costs from April 2010 of $10,000 per month."
Burrell Solicitors submits that the dispute as to the existence and quantum of the costs debt has been finally quelled by the costs assessment and the review which culminated in an entry of judgment for the assessed costs.
Burrell Solicitors also submitted that the Champion parties' claim is barred on the principles of advocate's immunity.

[21]

Effect of costs assessment determination

Section 372 of the Legal Profession Act is set out above at [128]. It applies in accordance with its terms. The costs assessor's determination was what was a fair and reasonable amount to be payable by the Champion parties for the services provided by Burrell Solicitors and Mr Robertson. The costs assessor did not determine whether the Champion parties were contractually obliged to pay that amount. Nor did he determine whether their liability to pay that amount was damage suffered by them as a result of Burrell Solicitors' misleading and deceptive conduct. Nor did the costs assessor determine any other ground for relieving the Champion parties against the consequence of his determination.
The effect of the costs assessor's determinations and the judgments entered pursuant to them depends on the operation of s 372 of the Legal Profession Act and not upon principles of res judicata, issue estoppel or Anshun estoppel. To give rise to a res judicata, issue estoppel or Anshun estoppel there must have been some kind of judicial or quasi-judicial determination (Cachia v Isaacs (1985) 3 NSWLR 366 at 368-369).
The assessment process is not a curial process. A costs assessor is not an officer of the Court. The costs assessor's certificate is taken to be a judgment but only for the purpose of enforcing the certificate (Doyle v Hall Chadwick [2007] NSWCA 159 at [47]-[54]; Frumar v The Owners of Strata Plan 36957 [2010] NSWCA 172 at [8] and [38]). In Zepinic v Chateau Constructions (Australia) Ltd (No. 2) [2013] NSWCA 227 McColl JA said (at [76]): "[76] The entry of judgment on a filed certificate of a costs assessor or a review panel is a ministerial act, which makes the certificate enforceable as a judgment but otherwise does not alter its legal effect and does not make it a judgment of the Court."
Whether a costs assessor exercises an administrative or a quasi-judicial function has been a matter of debate (e.g. Attorney-General of New South Wales v Kennedy Miller Television Pty Ltd (1998) 43 NSWLR 729 at 734; Minerals Corporation Ltd v Anthony Norman Abbot t/as Piper Alderman Lawyers [2004] NSWSC 246 at [40]). It is not only decisions of courts that can give rise to a res judicata, issue estoppel or Anshun estoppel. An arbitral award may give rise to a res judicata. In Cachia v Isaacs it was held that a decision of the Consumer Claims Tribunal created a res judicata. In Thrasyvoulou v Secretary of State for the Environment [1990] 2 AC 273 an inspector appointed by the Secretary of State for the Environment had power to determine whether or not land was being used in breach of a planning control. The House of Lords held that the inspector's decision was capable of giving rise to an issue estoppel or a cause of action estoppel, that is, an estoppel per rem judicatam. Lord Bridge (with whom the other members of the House of Lords agreed) said (at 289) that: "In relation to adjudications subject to a comprehensive self-contained statutory code, the presumption, in my opinion, must be that where the statute has created a specific jurisdiction for the determination of any issue which establishes the existence of a legal right, the principle of res judicata applies to give finality to that determination unless an intention to exclude that principle can properly be inferred as a matter of construction of the relevant statutory provisions."
In Morris v Riverwild Management Pty Ltd [2011] VSCA 283; (2011) 38 VR 103 Weinberg JA reviewed conflicting decisions as to whether the decisions of the Administrative Appeals Tribunal can give rise to a cause of action estoppel or issue estoppel and concluded that there was no reason why a decision of the Victorian Civil and Administrative Tribunal, at least in the exercise of its original jurisdiction, should not be capable of giving rise to a cause of action estoppel or issue estoppel (at [84]).
In Minerals Corporation Ltd v Anthony Norman Abbot t/as Piper Alderman Lawyers, Bell J held that it was arguable that a costs assessor's determination could give rise to a cause of action estoppel although her Honour said that there was force in the defendant's submission that as the conduct of a costs assessment is not an action in any court, it could not give rise to a res judicata (at [46] and [47]).
In Coshott v Barry [2015] NSWCA 257 the Court of Appeal held that where a solicitor made a claim for interest on costs, the costs assessor could and should have not only determined that interest was payable and determined the applicable rate, but quantified it and included it in each certificate (at [128]). The costs assessor considered that he could not include interest in the certificate because there was no express statutory power to do so. The Court of Appeal held (at [131]) that: "As the costs assessor did not determine that interest was not payable, and did not determine a rate that differed from the rate prescribed for unpaid judgments (but merely 'noted' that interest was payable at that rate), the Solicitors remain entitled to interest pursuant to s 190 and could recover it by an action at law."
In other words, the solicitor's cause of action did not merge in the determination and entry of the costs certificate as a judgment. The judgment entered pursuant to the costs determination did not give rise to a res judicata. It appears that the Court of Appeal considered that a determination of the issue by the costs assessor might have given rise to an issue estoppel.
In my view, Coshott v Barry is binding authority that a costs assessor's determination under the 1987 Act, and the entry of judgment pursuant to it, does not create an estoppel per rem judicatam. Setion 372 of the 2004 Act is in the same terms as s 208K of the 1987 Act, and the position must be the same under the 2004 Act. It is not necessary to decide whether or not a costs assessor's determination can give rise to an issue estoppel or an Anshun estoppel. Mr Rosier was not asked to decide whether there was an agreement that Burrell Solicitors would be paid $10,000 per month for providing legal services. He did not decide that issue. Nor did he determine the other issues raised in these proceedings.
Mr Rosier summarised the Champion parties' submissions in relation to the bill lodged by Burrell Solicitors in 2011 for payment of counsel's fees. Those submissions were in substance that the fees should not be allowed beyond those paid because there was a failure to update disclosure of counsel's fees. The Champion parties also submitted that fees should be disallowed on grounds that challenged the competence of Mr Burrell's conduct of the matters. The Champion parties submitted that Burrell Solicitors ignored instructions from the Mr Champion which led to costs being incurred which would not have been incurred if instructions were allowed and failed to follow advice from Mr Robertson which led to unreasonable costs being incurred. The Champion parties submitted that they would not have continued the proceedings if they had been aware of the real costs that they were to incur. They submitted that Burrell Solicitors acted negligently in failing to obtain necessary expert evidence, failing to narrow the issues and failing to act on instructions and in failing to discontinue the proceedings resulting in work which was of no value to the client.
In respect of the 2012 bill concerning Burrell Solicitors' own costs, it appears from Mr Rosier's reasons for his determination that the same matters were relied upon. The Champion parties complained about how bills were rendered. They complained that they could not see the extent to which costs were escalating. They made other complaints concerning non-disclosure of costs and again raised Burrell Solicitors' alleged failure to negotiate a commercial settlement.
Mr Rosier said that the allegations of negligence, failure to obtain or act on instructions and "never-ending changes and additions to evidence and reports" made in relation to the assessment of the 2011 bill were repeated. The allegation of failure to put an offer for discontinuance of the proceeding was also repeated. Mr Rosier did not determine those matters. He observed that: "There are areas where a costs assessor may embark on a determination of disputed areas of fact in order to be able to deal with the apparent failure to act in accordance with competent professional practice by a practitioner leads to wasted costs or costs that do not benefit the practitioner [scil. client] at all. … I note that the parties (even if the respondents [viz the Champion parties] reluctantly) are involved in litigation in which the issue as to whether the applicant acted in accordance with competent professional practice is in issue. In such proceedings there is a power in the court to disallow costs determined by me and to order the refund of any paid. I am not in a position to determine the questions of facts which require determination if I were to adjust the costs which are determined by reason of a failure to act in accordance with competent professional practice. If I were to do so, I would, on the information - which is considerable - which is available to me, find that there was no departure from competent professional practice by the applicant such as to disentitle it from the whole or part of the costs to which it was entitled. …"
Mr Rosier then dealt with the bills in the manner summarised earlier in these reasons. He also said: "It does not appear to me that there was any particular deficiency in the manner in which either solicitor or counsel conducted this case and Senior Commissioner Moore and Commissioner Sullivan's observations quoted above reflect this. Even if I were wrong about this aspect of the case and the applicant did not conduct itself in accordance with competent professional practice, nothing I decide would deprive the respondents of a remedy."
Mr Rosier recorded that Burrell Solicitors had submitted to him that the appropriate forum for debate about the alleged deficiencies in their conduct was in the Supreme Court proceedings.
Thus, the Champion parties attempted to raise the issues (other than the alleged agreement that legal services would be provided at a cost of $10,000 per month) before the costs assessor. Burrell Solicitors opposed that course and the Champion parties were unsuccessful in having that matter determined. There could be no issue estoppel. There could also be no Anshun estoppel, except possibly in relation to the failure to raise the issue as to the terms of the agreement for payment of costs. That claim has failed on its merits. I do not consider the Champion parties were estopped from raising the claim. Whilst Mr Rosier had jurisdiction to determine the terms of the costs agreement, had the issue been raised it would have been unwise for him to decide the issue as the procedures before him would not have enabled a fair resolution of the issue (Doyle v Hall Chadwick at [61]). It was not unreasonable for the Champion parties not to have raised the issue.
Mr Rosier did not identify the power that he asserted existed for the court to disallow costs determined by him and to order a refund of any paid. He may have been referring to a party's right to appeal or to seek leave to appeal from a decision of the Appeal Panel. Counsel for the Champion parties could not identify any other such power and I am not aware of any.
By s 372 of the Legal Profession Act 2004 Mr Rosier's determination of the application is binding on the Champion parties and Burrell Solicitors. The determination which is binding is the determination made under s 367. Section 367 provides: "367 Determinations of costs assessments (1) A costs assessor is to determine an application for a costs assessment relating to a bill by confirming the bill or, if the assessor is satisfied that the disputed costs are unfair or unreasonable, by substituting for the amount of the costs an amount that, in the assessor's opinion, is a fair and reasonable amount. (2) The costs assessor may include an allowance for any fee paid or payable for the application by the applicant. (3) A costs assessor may not determine that any part of a bill that is not the subject of an application is unfair or unreasonable. (4) A costs assessor may determine that the amount of fair and reasonable costs is the amount agreed to by the parties if during the course of the assessment the parties notify the costs assessor that they have agreed on the amount of those costs."
That is to say, the costs assessor's determination is a binding determination as to what is a fair and reasonable amount for which the client should be liable.
In Ryan v Hansen [2000] NSWSC 354; (2000) 49 NSWLR 184 Kirby J considered the interplay between the costs assessment procedures under the Legal Profession Act 1987 and a claim by a client for damages against a solicitor for negligence. His Honour considered in particular the decision of the Court of Appeal in Cachia v Isaacs which dealt with the rights of a solicitor and client at common law, that is, in contract and tort. It was there held that a solicitor who has been negligent in performance of the retainer is only wholly disentitled from recovering costs if, as a result of the negligence, the client receives no benefit from the work done, that is, it is useless. But the client may have a claim for damages for loss occasioned by the negligence, notwithstanding a liability to pay some costs. After analysing the cases and considering the terms of the Legal Profession Act 1987, Kirby J summarised the position as follows: "[71] What emerges from this analysis? • First, I should state the obvious lest it be overlooked. A costs assessor's task is to determine a bill of costs. Items on the bill may be allowed or disallowed. There is no power to determine the validity or otherwise of a cross-claim, or to award damages. • Secondly, a costs assessor may disallow items claimed by a solicitor because they are unfair or unreasonable (s 208A), or outside the specific instructions given by the client (s 208B(f)). • Thirdly, costs may be disallowed if they have been incurred improperly, or without reasonable cause (s 208P(1)). • Fourthly, if through the solicitor's negligence or ignorance, expenditure has been incurred, the assessor may disallow such expenditure on the basis that it has not been properly incurred: Re Massey and Carey. • Fifthly if, through negligent advice, work has been done or expenditure has been incurred, the assessor may disallow such expenditure, or the cost of that work: Re Windeyer. • Sixthly, work performed by the solicitor which is useless in accomplishing the objective which the client had in view may also be disallowed by the assessor: Re Windeyer. • Seventhly, if costs have been wasted by undue delay, or any other misconduct or default on the part of the solicitor, the costs assessor may disallow such costs (s 208P(1)). • Eighthly, if a court or tribunal makes an order for costs against the client, and the circumstances which brought about that order were, in truth, the responsibility of the lawyer, not of the client, then (subject to the default being characterised as one falling within s 208P(1)), the costs assessor may direct the lawyer to repay such costs. • Ninthly, where a solicitor is negligent, there may be a number of consequences for the client. The client may be disadvantaged in having work done for which he is later charged, where there has been no benefit from that work. The consequences for the client, however, may go beyond that. The negligence may bring about the failure of the action. The client then loses what he sought to gain by the litigation. Or the client may be disadvantaged in some other way. He may, for instance, alter his position to his detriment as a result of poor advice. Where the solicitor's negligence has consequences beyond the cost of the work performed, the matter is properly one for a cross-action. • Tenthly, that is not to say that the client, in such circumstances, can afford to ignore an application by the solicitor to have a bill of costs assessed. The client, in such circumstances, not only has a right to claim damages in a cross claim, but the right to resist (upon the grounds set out above) a claim for the cost of the work performed. A negligent solicitor, in such circumstances, can only recover for services which, notwithstanding his negligence, were of some real advantage to the client: Cachia v Isaacs."
Mr Rosier referred to the decision in Ryan v Hansen but nonetheless did not determine the allegations of negligence and failure to act on instructions on the basis that those were matters that could be raised in the proceedings in this court.
As noted above, the appeal to the Appeal Panel was dismissed. No appeal as to a matter of law was filed with the District Court pursuant to s 384 of the Legal Profession Act. Nor was an application made to the District Court for leave to appeal under s 385.
The Champion parties' further amended cross-claim sought an order that the costs assessments and the judgments entered pursuant to them be set aside, or alternatively sought a permanent stay of enforcement of those judgments. But the Champion parties did not plead any ground that challenged the validity of the costs determinations and the judgments entered pursuant to them. Rather, the Champion parties allege that Burrell Solicitors was estopped from enforcing the judgments. They said it would be unconscionable for Burrell Solicitors to do so by reason of the alleged representation that Burrell Solicitors would continue to perform work at a charge of $10,000 per month until the conclusion of the proceedings.
The costs determinations and judgments entered pursuant to them establish that the Champion parties have a liability to Burrell Solicitors for the amounts determined that represent a fair and reasonable charge for the services provided. That does not mean that the Champion parties cannot in these proceedings establish that such a liability is, or is part of, a loss suffered as the result of Burrell Solicitors' breach of contract, or misleading or deceptive conduct, or any other cause of action. Nor does it preclude the Champion parties' seeking to establish that Burrell Solicitors had agreed to accept payment of $10,000 per month as full payment for the services provided. But for the reasons above and reasons which follow, those causes of action are not made out.
I cannot leave this aspect of the proceeding without observing that Cachia v Isaacs and Ryan v Hansen have held that a legal practitioner's claim for remuneration may be defeated by the legal practitioner's negligence. It should follow that an assessment of what remuneration is fair and reasonable may require a determination of an allegation of negligence or failure to adhere to an instruction. If available procedures before the costs assessor do not enable such a determination to be made, the appropriate course would be for the costs assessor to decline making an assessment (Doyle v Hall Chadwick at [61]).

[22]

Advocate's immunity

Burrell Solicitors submits that advocate's immunity provides a complete defence to the claim. It and Mr Burrell rely on the principle that an advocate is immune from suit, whether for negligence or otherwise, in the conduct of a case in court, or for work done out of court, which leads to a decision affecting the conduct of the case in court (D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [86]-[87], [94]-[95], [359]). In D'Orta-Ekenaike v Victoria Legal Aid the plurality (Gleeson CJ, Gummow, Hayne and Heydon JJ) said (at [1]) that Giannarelli v Wraith (1988) 165 CLR 543 had decided that: "at common law an advocate cannot be sued by his or her client for negligence in the conduct of a case in court, or in work out of court which leads to a decision affecting the conduct of a case in court".
That was the description of the immunity provided by Mason CJ in Giannarelli v Wraith which his Honour went on to explain. Mason CJ said (at 559-560): "However, the grounds for denying liability for in-court negligence have no application to work done out of court which is unconnected with work done in court … The problem is: where does one draw the dividing line? Is the immunity to end at the courtroom door so that the protection does not extend to preparatory activities such as the drawing and settling of pleadings and the giving of advice on evidence? To limit the immunity in this way would be to confine it to conduct and management of the case in the courtroom, thereby protecting the advocate in respect of his tactical handling of the proceedings. However, it would be artificial in the extreme to draw the line at the courtroom door. Preparation of a case out of court cannot be divorced from presentation in court. The two are inextricably interwoven so that the immunity must extend to work done out of court which leads to a decision affecting the conduct of the case in court. But to take the immunity any further would entail a risk of taking the protection beyond the boundaries of the public policy considerations which sustain the immunity. I would agree with McCarthy P in Rees v Sinclair [[1974] 1 NZLR 180 at 187] where his Honour said: '… the protection exists only where the particular work is so intimately connected with the conduct of the cause in Court that it can fairly be said to be a preliminary decision affecting the way that cause is to be conducted when it comes to a hearing.'"
In D'Orta-Ekenaike v Victoria Legal Aid the plurality (at [25]) said that Giannarelli v Wraith had decided that at common law an advocate cannot be sued by his or her client for negligence "in the conduct of a case, or in work out of court which is intimately connected with the conduct of a case in court …". Gleeson CJ, Gummow, Hayne and Heydon JJ also said: "[45] … the central justification for the advocate's immunity is the principle that controversies, once resolved, are not to be reopened except in a few narrowly defined circumstances. This is a fundamental and pervading tenet of the judicial system, reflecting the role played by the judicial process in the government of society. If an exception to that tenet were to be created by abolishing that immunity, a peculiar type of re-litigation would arise. There would be re-litigation of a controversy (already determined) as a result of what had happened during, or in preparation for, the hearing that had been designed to quell that controversy. … … [66] In every case the complaint must be that a consequence has befallen the client which has not been, and cannot be, sufficiently corrected within the litigation in which the client was engaged. That consequence may take a number of forms. For the moment, it will suffice to identify what may appear to be the three chief consequences: (a) a wrong final result; (b) a wrong intermediate result; and (c) wasted costs. [67] A client may wish to say that the conduct of the advocate was a cause of the client losing the case because, for example, a point was not taken, or a witness was not called, or evidence was not led. The client may have no appeal, or no remedy on appeal, as, for example, would generally be the case if the evidence not called was available at trial. [68] A client may wish to say, as the applicant does in this case, that the conduct of the advocate (or here, the advocate and VLA) was a cause of the client suffering an intermediate consequence (conviction at the first trial and imprisonment) which was not wholly remedied on appeal. (The conviction was set aside but the client was incarcerated for a time and complains of that and what is said to have been caused by it.) [69] A client may wish to say that the conduct of the advocate was a cause of the client incurring unnecessary expense. That may be because a costs order was made against the client or because unnecessary costs were incurred in taking a step in the litigation. [70] What unites these different kinds of consequence is that none of them has been, or could be, wholly remedied within the original litigation. The final order has not been, and cannot be, overturned on appeal. The intermediate consequence cannot be repaired or expunged on appeal. The costs order cannot be set aside; the costs incurred cannot be recovered from an opposite party. And in every one of these cases, the client would say that, but for the advocate's conduct, there would have been a different result. In particular, leaving cases of wasted costs aside, the client wishes to assert that, if the case had been prepared and presented properly, a different final, or intermediate, result would have been reached. And yet the judicial system has arrived at the result it did. The consequences that have befallen the client are consequences flowing from what, by hypothesis, is a lawful result. So, to take the present case, the imprisonment of which the applicant seeks to complain is lawful imprisonment. In a case where the client would say the wrong final result is reached, the result in fact reached is, by hypothesis, one that was lawfully reached. … … [83] There remains for separate consideration the last of the three kinds of consequence identified earlier as consequences of which a client may wish to complain: wasted costs. Again, at first sight it might be thought that seeking to recover wasted costs would not cut across any principle of finality. But it is necessary to recall that the general rule is that costs follow the event. To challenge the costs order, therefore, will often (even, usually) involve a direct or indirect challenge to the outcome on which the disposition of costs depended. For the reasons given earlier, that should not be permitted lest a dispute about wasted costs become the vehicle for a dispute about the outcome of the litigation in which it is said that the costs were wasted." (emphasis in original)
Subsequent authorities have established that the immunity applies not only where a positive decision is made as to what should be done or not done in the litigation, but also where the client's complaint is that the lawyer was negligent by omission rather than by the making of a considered (but wrong) decision not to do something. That was the case in Keefe v Marks (1989) 16 NSWLR 713 (at 718-719) and Attard v James Legal Pty Ltd [2010] NSWCA 311; (2010) 80 ACSR 585 (at [9]-[12]). It may have been the case in Giannarelli v Wraith. It is true that in Coshott v Barry [2009] NSWCA 34 Ipp JA (with whom Beazley and Campbell JJA agreed) said (at [62]) that advocate's immunity did not apply to an alleged failure on the part of a solicitor at the commencement of his retainer to advise on the form of relief that should be sought on the taking of an account against a mortgagee in respect of the exercise of a power of sale on the ground that "The period from the time the retainer commenced to the trial itself was too long for the requisite connection to the conduct of the case in court to be established." But in Symonds v Vass [2009] NSWCA 139; (2009) 257 ALR 689 Ipp JA effectively recanted. He said that the finding should be understood as confined to the specific facts of that case and not as laying down any principle of broader application (at [127]). In Donnellan v Woodland [2012] NSWCA 433 Beazley JA also took a different view noting that "it could be argued that the Court's decision is contestable, given the approach to the application of the immunity which I have discussed in this case" (at [214]).
The statements at [83] of D'Orta-Ekenaike v Victoria Legal Aid have been taken to apply not only to a subsequent complaint that the lawyer's negligence had led to an adverse or insufficient costs order in the earlier litigation, but to a claim that due to the lawyer's negligence the client incurred costs that were wasted (e.g. Attard v James Legal Pty Ltd at [27]).
Although the finality of litigation has been identified by the High Court as being the central justification for advocate's immunity, the availability of advocate's immunity does not always depend upon the potential infringement of that principle on the facts of any given case (Attard v James Legal Pty Ltd per Giles JA at [27]; Kendirjian v Lepore [2015] NSWCA 132 at [40]-[42], [52]-[54]).
The immunity is an immunity from suit, not a defence to particular causes of action. It applies to statutory causes of action unless clearly excluded (Young v Hones [2014] NSWCA 337 at [168]-[175]).
It is now well-established that advocate's immunity is available not only to the lawyer who acts as advocate, but also to the lawyer who provides non-advocacy services as a solicitor as to the conduct of the proceeding, or its settlement (D'Orta-Ekenaike v Victoria Legal Aid at [90]-[91]; Attard v James Legal Pty Ltd at [12]-[14]; Symonds v Vass at [14]; Donnellan v Woodland at [172], [205], [208]; Young v Hones at [217]).
Alleged failure to take proper steps in the conduct of the litigation leading to its settlement is directly within the scope of the immunity (Donnellan v Woodland at [198], [205]-[208]; Young v Hones at [217]; Kendirjian v Lepore at [29]).
The alleged failure of Mr Burrell to act on Mr Champion's instructions to attempt to settle the proceedings by offering to discontinue them with no order as to costs falls within the scope of the immunity as presently formulated. I have rejected the claim on its merits. But even if the claim had merit, it would be barred by the principle of advocate's immunity. The Champion parties alleged an omission or a refusal by Mr Burrell to make a settlement offer. That was a decision about the way in which the proceedings should be conducted or an omission to make a decision about how the proceedings should be conducted. In Kendirjian v Lepore the plaintiff claimed that his solicitor had failed to convey to him the terms of a settlement offer made by the opposite party. The claim was dismissed on the ground of advocate's immunity. For the plaintiff's claim to have succeeded he would have had to prove what advice the solicitor should have given him as he did not allege that he would have accepted the settlement offer regardless of the respondent's advice about the amount of damages he should receive (at [44]). On the plaintiff's case, the alleged omission to give advice led to a decision affecting the conduct of the case in court. In the same way, in the present case, the allegation that Mr Burrell failed to act on instructions to make an offer for the settlement of the proceedings is an allegation that Mr Burrell engaged in conduct, by omission, directly affecting the conduct of the litigation. That complaint falls within the scope of advocate's immunity.
Likewise, as counsel for the Champion parties rightly accepted, Mr Champion's complaints that Mr Burrell mishandled the conduct of the case are covered by advocate's immunity.
But, in my view, the Champion parties' claim that they were misled about the costs of the proceedings are not within the scope of the immunity. Burrell Solicitors submitted that it is the Champion parties' case that the costs estimates given and the failure to provide reasonable updated estimates of costs led the Champion parties to make decisions to pursue the litigation. They submit that this falls directly within the rule that an advocate is immune from suit, whether for negligence or otherwise, for work done or omitted out of court which leads to a decision affecting the conduct of the case in court.
The subject of an advocate's immunity that was given greater definition in D'Orta-Ekenaike v Victoria Legal Aid is the conduct of a case in court or in work done (or omitted) out of court which is intimately connected with the conduct of a case in court. What is done or omitted in, or in close connection with, the conduct of the litigation is the subject of the immunity. Burrell Solicitors' conduct in misleading its clients as to the likely costs of the litigation is a different subject matter. It is not what was done or omitted in the conduct of the litigation or in work intimately connected with the conduct of the litigation.
The principle or central tenet that is the justification for advocate's immunity is the need for finality of litigation. That principle is not infringed by entertaining the claims that the Champion parties suffered damage by reason of Burrell Solicitors' misleading conduct and breach of contract in not providing reasonable estimates of the costs of the proceedings. In the same way, the need for finality of litigation is not infringed by entertaining the Champion parties' claim as to the terms on which Burrell Solicitors was engaged. It is true that advocate's immunity may be available, irrespective of whether the principle of finality would be infringed (see cases cited at [161] above). However, where the principle on which the immunity is based is not infringed, there is no reason to extend the scope of the immunity.
In Kendirjian v Lepore Leeming JA said (at [56]) that: "The rule or test stated in Giannarelli and D'Orta-Ekenaike having been established, courts have determined its application in particular categories of cases for more than a quarter of a century. It is not surprising that there are now few novel cases. It is now clear law that the work done out of court which attracts the immunity includes advice leading to a case being settled. It is also clear law that advice leading to a case not being settled is work done out of court which attracts the immunity. Both are examples of decisions affecting the conduct of the case in court."
The subject of the present complaints is not how the litigation was conducted, but that the client was misled. It is not a complaint as to the steps taken in the litigation, but to the incurring of liability to his lawyers and suffering other expenses in the litigation as an alleged consequence of the lawyers' failure to provide reasonable costs estimates. This complaint does not fall within the scope of the immunity articulated in D'Orta-Ekenaike v Victoria Legal Aid at [1] because the negligence (or breach of contract or misleading and deceptive conduct) is not in the conduct of a case in court or in work (in the conduct of the case) out of court. It would be an extension of the immunity to a new category of case if the immunity applied not only to complaints about what was done by Burrell Solicitors in and about the litigation, including what was done or not done in connection with its settlement, but also to the claim of misleading and deceptive conduct (which is also a breach of contract) which is said to have resulted in the Champion parties' suffering loss and damage by embarking on and continuing the litigation. I see no reason for the immunity to be so extended.

[23]

No loss or damage caused by conduct complained of

If the question whether the Champion parties suffered loss by the misleading conduct of Burrell Solicitors were determined solely by reference to the outcome of the litigation in the Land and Environment Court, then I would conclude that although the Champion parties suffered financial loss as a result of the proceedings, that loss was not caused by the unreasonable initial estimates of costs or Burrell Solicitors' subsequent failure to provide updated reasonable estimates. I have already explained my reasons for that conclusion. The Champion parties would have proceeded even if reasonable costs estimates were provided.
But even if that conclusion is wrong, I would not conclude that the Champion parties' position should be assessed solely by reference to their lack of success in the litigation. A great deal of the costs of the Land and Environment Court litigation was incurred in obtaining expert reports. About 20 consultants were retained by the Champion parties and the majority of them provided reports in their areas of expertise for use in both the quarry expansion proceedings and the Pt 3A application and, in some cases, also in the Woolley Bund proceedings.
Ms Nott who was responsible for bookkeeping for the Champion parties and hence for handling the accounts of the various consultants gave evidence that from about February 2010 through until the end of the quarry expansion appeal, there were about 20 consultants or more who had been retained by the Champion interests and who were doing work in respect of the quarry expansion appeal and the Woolley Bund appeal and the Pt 3A application. She said that the tasks of the consultants were always separated. But she accepted that "in most cases" consultants provided services in respect of each proceeding, that is, the Pt 3A application, the Woolley Bund appeal and the quarry expansion appeal. The Champion parties retained a body known as Environmental Resources Management Australia ("ERM") as its principal consultant both for preparation of the Environmental Impact Statement, the revised Environmental Impact Statement and the Environmental Assessment for the Pt 3A project application. It rendered accounts in the Land and Environment Court proceedings between 26 March 2010 and 24 June 2011 totalling $424,033.56. It also rendered accounts between 23 February 2010 and 23 September 2011 in connection with the Pt 3A application that totalled $126,299.43. With the single exception of September 2010, from the months of May 2010 to April 2011 its monthly invoices for the litigation were substantially more, by amounts of tens of thousands of dollars, than were rendered in respect of the Pt 3A application. I accept the submission of counsel for Burrell Solicitors that expert analysis was being substantially performed and invoiced in the quarry expansion proceedings, rather than in the Pt 3A application. Mr Champion accepted that Mr Weir of ERM sought and obtained submissions made by Mr Robertson in the Land and Environment Court proceedings for use in the Pt 3A application. The same issues that arose in the Land and Environment Court proceedings needed to be addressed for the purposes of a Pt 3A application. These covered areas including Aboriginal heritage, air quality, landscaping and visual impact, noise, quarry management, roads and traffic, soil and water, and town planning.
In December 2011, ERM submitted what was called the final Preferred Project Report for the Pt 3A application for the quarry expansion. The introduction to that report summarised the process of environmental assessment for the Pt 3A project application and stated: "In concurrence with the above approval process Champions quarry was also appealing in the Land and Environment Court (LEC) the decision of Lismore City Council to refuse earlier development applications for the relocation of an amenity bund and for the expansion of Champions quarry made under Part 4 of the Environmental Planning and Assessment Act 1979. Champions quarry has considered the findings of the LEC and has updated the proposal to address some specific concerns raised by the court, as they pertain to the Part 3A Project. This Preferred Project Report has been prepared in direct response to a request from the DP and I [Department of Planning and Infrastructure] dated 29 June 2011 … It sets out the Preferred Project which includes amendments to the project plan and a revised statement of commitments. It also provides a summary of the project interactions with the environment and surrounding area. This includes additional and/or updated stand alone assessment reports that have been specifically undertaken in response to matters raised by the LEC." (Emphasis added.)
As noted, the Champion parties obtained approval under Pt 3A to the expansion of the quarry.
It cannot be said that the work done in the Land and Environment Court proceedings was wholly wasted, notwithstanding that the Champion parties failed in those proceedings. Had they established that the misleading conduct of Burrell Solicitors and the breaches of contract I have found caused them to incur the continuing expenses of the Land and Environment Court litigation, it would still have been incumbent on the Champion parties to show to what extent those expenses were wasted. It is clear that the work done, not only by the experts retained in the Land and Environment Court proceedings, but by Mr Burrell and Mr Robertson was not without benefit to the Champion parties. They have not established to what extent those costs were wasted.

[24]

Other claims

In addition to its claims for breach of contract and misleading and deceptive conduct, the Champion parties said that Burrell Solicitors breached a duty of care and breached its fiduciary duties. They also submitted that Burrell Solicitors was estopped from enforcing the judgments obtained pursuant to the costs certificates on the ground that it would be unconscionable for it to seek to enforce the judgments.
These additional claims do not advance the Champion parties' position. The claim in negligence does not advance the claim for breach of contract. Burrell Solicitors had a contractual duty to provide reasonable estimates of costs. It was in breach of that duty. Assuming, without deciding, that there was a concurrent duty of care in tort, no damage has been established as being caused by a breach of that duty.
There is no doubt that there was a fiduciary relationship between Burrell Solicitors and the Champion parties. That is not in dispute. Burrell Solicitors denied that there was any breach of fiduciary duty. It submitted that Burrell Solicitors was not in a position of actual or potential conflict and did not obtain any unauthorised benefit or profit. Each step it took in the proceeding was undertaken with Mr Champion's knowledge and consent. However, I think that Mr Burrell's under-quotation of likely fees at the commencement of the retainer was deliberate and I do not accept that his failure to provide updated estimates was inadvertent. He wanted to secure the client. I think this was a breach of the fundamental duty of loyalty that a fiduciary owes to his principal. But it does not follow that the Champion parties are entitled to equitable compensation or other substantive relief. The costs judgments entered must be taken to represent fair and reasonable remuneration payable for the work done. For the reasons given, the Champion parties have not established that they suffered loss occasioned by Burrell Solicitors' failure to provide reasonable and timely estimates of costs. Their failure to provide those estimates has already been taken into account by Mr Rosier in his determinations. No loss has been established. The "but for" test of causation applies when determining a fiduciary's liability to pay equitable compensation for breach of fiduciary duty (leaving aside the obligation of a trustee to restore trust property wrongfully misapplied), (O'Halloran v R T Thomas & Family Pty Ltd (1998) 45 NSWLR 262 at 276-278; Beach Petroleum NL v Kennedy (1999) 48 NSWLR 1 at [432], [444]; Short v Crawley (No. 30) [2007] NSWSC 1322 at [402]-[428]).
Nor is Burrell Solicitors estopped from enforcing the judgments. I accept that the Champion parties, through Mr Champion, were induced to adopt the assumption in 2010 before the case became a "fully contested case" that the costs of the proceedings, including expert witnesses' costs, would total about $150,000 and that after the case became a "fully contested case" they assumed that the costs would be substantially more than that figure, but nothing like the amounts they were charged. The Champion parties were induced to adopt that assumption by Burrell Solicitors' failure to provide reasonable updated costs estimates.
But the Champion parties have not established that they acted to their detriment in reliance on such assumptions as to the costs of the proceedings as they were induced to adopt. The onus of establishing such reliance was on the Champion parties (Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505). Reliance on the costs estimates provided has not been established, but the Champion parties have established that they relied on the assumptions they adopted as to the likely costs which should have been corrected by the provision of updated estimates. But the Champion parties have not established that they acted to their detriment in reliance on the assumptions they adopted as to the likely costs of the proceedings. This is because I consider they would have pursued the litigation even if reasonable costs estimates had been provided and because they have not shown to what extent, if at all, the costs incurred in the litigation were not ultimately beneficial as contributing to the Part 3A approval.
For these reasons I conclude that the Champion parties are entitled to nominal damages from Burrell Solicitors for breach of contract, but their claims should otherwise be dismissed.
I make the following orders:
Give judgment for the cross-claimants against the first cross-defendant in the sum of $20.
Order that the cross-claimants' claims for relief be otherwise dismissed.
Consequential orders will need to be made in relation to lifting the stay on enforcement of the costs judgments. There may be other consequential orders to be made. I will stand the proceedings over to a convenient time to deal with those matters and to hear argument on the question of costs. I direct counsel for the cross-defendants to bring in short minutes of consequential orders that should be made consistent with these reasons.

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Judgment (25 paragraphs)

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