Burrell Solicitors Pty Ltd v Reavill Farm Pty Limited & Ors

Background 12The plaintiff was retained to act for the first to fourth defendants in an appeal to the Land and Environment Court against the refusal by the Lismore City Council to grant development approval for an expansion to an existing sandstone quarry at Tuckurimba near Lismore. The plaintiff confirmed its instructions in a letter dated 2 February 2010. It described its instructions as being to act in "an appeal to the LEC against the refusal by Lismore City Council of DA 2008/233 for extension of an existing quarry at Tuckurimba". It said that the purpose of the letter was to clarify the terms of the retainer and, amongst other things, to make necessary disclosures in compliance with the Legal Profession Act 2004 and to establish the basis of a costs agreement under that Act. The work to be performed was described as: "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" 13The plaintiff estimated that its professional fees excluding disbursements could range between $8,500 and $10,500 plus GST. This assumed a hearing of three days. The figure did not include barrister's fees. It was stated that Mr John Burrell would act as advocate. 14Proceedings were commenced in the Land and Environment Court on 9 February 2010. The plaintiff was Champions Quarry. The case was heard over 17 days in October 2010 and January, February, March and April 2011. On 12 May 2011 the Champions Quarry's appeal was dismissed. The total amount billed by the plaintiff for professional fees was $521,428.97. Counsel's fees and other disbursements totalled $373,376.20. 15The second proceeding in the Land and Environment Court concerned an appeal against a deemed refusal by Lismore City Council to modify an existing consent for the quarry at Tuckurimba for the erection of an earth and noise barrier referred to as "the Woolley Bund". Mr Burrell deposed that the plaintiff was engaged on 18 March 2010 to conduct those proceedings. The proceedings were commenced on 19 March 2010. The applicant was Reavill Farm. The case was heard over three days on 23 and 24 June and 21 July 2010. The appeal was dismissed on 3 August 2010. 16On 18 March 2010 the plaintiff confirmed its instructions to act in that matter. The scope of the work to be performed was described as: "1. Commence and conduct Class 1 proceedings in the LEC 2. Assist in any negotiations with Council 3. Advise generally 4. Engage counsel as instructed" 17The plaintiff's estimate of its professional fees excluding GST was between $4,500 and $6,500 assuming a hearing of one day. The plaintiff estimated that if the scope of the matter or its complexity increased for reasons outside the plaintiff's control, then an allowance should be made of $2,610 for any extra day of hearing based on a nine hour day, plus GST. The figures did not include barrister's fees. Again it was stated that Mr Burrell would appear as advocate. 18The plaintiff charged professional fees for the appeal in relation to the Woolley Bund of $49,066.52. There were counsel's fees of $34,232.64 and other disbursements of $2,204.60, making a total of $85,503.76. 19The plaintiff also acted for the defendants on the sale of two units and the refinancing of a mortgage in about September and November 2010. The total of the plaintiff's costs and disbursements on these matters was $7,856.26. They have been paid and no issues arise about them. 20The defendants have paid a total of $364,986.04 towards the plaintiff's bills for the two cases in the Land and Environment Court. The plaintiff says that the balance outstanding is $620,357.12 plus interest. The defendants say that the amounts already paid are far in excess of the costs estimated. 21Although the plaintiff's original costs estimate stated that no allowance was made for counsel's fees because Mr Burrell would act as advocate, in fact senior counsel was retained. On 26 March 2010 Mr Robertson SC provided a costs estimate for both cases of $84,000 plus GST on the assumption that the two cases would take six days of hearing. Mr Champion deposed that although Mr Burrell had estimated only four days in court for both cases, he allowed for six days to align with Mr Robertson's estimate. 22Initially it was proposed that the proceedings be subject to a conciliation conference under s 34 of the Land and Environment Court Act 1979 and that the parties would agree in advance that if an agreement between the parties was not reached at conciliation, the Commissioner should dispose of the proceedings pursuant to s 34(4)(b). On 29 April 2010 both cases were set down for hearing commencing on 21 June 2010. The matters were to be dealt with initially by way of a s 34 conciliation conference commencing on 21 June 2010 on site. The Court recorded that if the parties were not able to reach agreement by conciliation that the matters would proceed immediately thereafter to hearing by way of a binding conference under s 34(4)(b). The matters were listed for a further three days in the event that the further hearing before the Commissioner was required. 23It seems that this was done without the approval of Mr Robertson SC. On 4 May 2010 he wrote that he was surprised that the matter had been set down without first retaining an anthropologist in light of the risk that the plaintiff in the Land and Environment Court was taking by agreeing to a binding determination. In substance Mr Robertson said that necessary evidence had not been obtained and there were serious risks in proceeding with an agreed determination in accordance with s 34 of the Land and Environment Court Act where there was no right of cross-examination. 24The orders made by the Land and Environment Court for the purposes of the conciliation and conference under s 34 of the Act made limited provision as to the type of further reports that could be served. On 20 May 2010 Sparke Helmore Lawyers, who acted for Lismore City Council, complained that whilst the Court's directions permitted the plaintiff to file only an updated management plan and acoustic assessment report, it had, without leave, served six updated reports in relation to landscape and visual assessment, air quality assessment, roads and traffic issues, an updated water and soil management plan, an updated ecological assessment, and a vegetation management plan. Sparke Helmore stated that its preliminary view of these documents indicated that Champions Quarry was proposing to amend its existing development application. 25The upshot was that the matter did not proceed as a conciliation conference or determination under s 34 of the Land and Environment Court Act. Instead the appeal in the Woolley Bund matter was heard on 23 and 24 June 2010 and again on 21 July 2010. 26Mr Burrell deposed that in the two proceedings in the Land and Environment Court the plaintiff issued invoices on 10 February, 25 March and 29 April 2010. The professional fees charged in these invoices totalled $15,415.57. No further invoices were rendered, except for miscellaneous disbursements, until 20 December 2010. On that day, a further seven invoices were rendered for a further $272,523.57. However, by 3 December 2010 the defendants had made payments totalling $102,850.41 otherwise than on account of counsel's fees. The defendants made regular monthly payments of $10,000, although invoices had not been rendered. By 3 December 2010 counsel's fees totalled $149,002.66. On that day the defendants made a payment towards counsel's fees of $75,000. 27On 22 June 2010 Mr Burrell advised Mr Champion that the costs of what he called the "s 96 appeal", which I infer was the hearing of the appeal in the Woolley Bund matter, were estimated to be $30,000 allowing for a two-day hearing, plus counsel's fees of at least a further $30,000. He stated that Mr Champion's guess of $60,000 to $80,000 was in the ballpark. Mr Burrell stated: "You will remember that early in the peace [sic] we talked about the amount of time and work that I was having to put into your matters given the complexities that had arisen and it was agreed that the likely cost of conducting the two LEC appeals would far exceed the cost estimates initially provided in our cost agreements. At that stage, which was March, you said you were budgeting over $120,000 including Tim's estimate of $80,000. As you know, a lot has happened since then and costs have blown out even further." 28This email of 22 June 2010 provided no further cost estimate except in relation to the costs of the Woolley Bund appeal. The hearing of that appeal commenced on the following day. Whilst the estimate of "at least $30,000" for counsel's fees was substantially accurate, the estimate of $30,000 for the plaintiff's costs was about 60 per cent of the costs later charged. 29Mr Burrell deposed that apart from the bills rendered in respect of the Woolley Bund proceedings of approximately $86,000, by 15 September 2010 bills totalling approximately $105,000 had been rendered in relation to the quarry expansion appeal. This included professional fees for Burrell Solicitors of $39,518.29 to 27 July 2010 and counsel's fees of $57,230.50. It is not clear to me that this was the amount of fees that had been rendered. An invoice dated 27 July 2010 for $19,396.52 was said to have been cancelled and reissued on 20 December 2010 for a lower figure. Be that as it may, at this time the defendants were making monthly payments of $10,000 without invoices having been rendered. 30Section 316 of the Legal Profession Act imposes an ongoing obligation on a law practice to disclose in writing to a client any substantial change to a disclosure made under Division 3 of Part 3.2 of the Act to its estimate of the total legal costs, or range of costs, estimated to be incurred in a matter, as soon as is reasonably practicable after the law practice becomes aware of the change. 31No further estimate was provided by the plaintiff prior to 28 February 2011. Mr Robertson SC had made his costs agreement with the plaintiff and not with the defendants. On 18 October 2010 Mr Robertson sent an email to Mr Burrell. He noted that his outstanding fees were then $105,020.14 and that he had rendered a further memorandum of fees of $25,300 on that day. He provided an estimate of $50,000 for his fees for the hearing for the following week. Mr Robertson's email was forwarded by Mr Burrell to Mr Champion stating that it needed urgent attention. Mr Burrell provided no further estimate of his professional fees or of any other disbursements. 32The hearing of the appeal in relation to the development applications for expansion of the quarry commenced on 25 October 2010. There were three hearing days in October, and ten or eleven hearing days in late January and February 2011. 33Mr Robertson was concerned about the non-payment of his fees. Although his agreement was with the plaintiff, the plaintiff had not paid his fees. Mr Champion recognised an obligation to pay Mr Robertson's fees. On 9 September 2010 Mr Champion wrote to Mr Robertson as follows: "I just wanted to drop you a note regarding my account with you. 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. These will commence settling in the next 3-4 weeks. John is acting on the sales of the units, and I have directed that he makes payments to you to reduce your bill as they settle. I greatly appreciate you acting for us while we are selling units to fund the case. ... Once again, thank you for your efforts. I understand that John needs you to urgently address some issues for the court tomorrow. Your ongoing guidance is essential to our case. We have put enormous effort and costs into the development over the past 6 years and don't want to lose the race on the home straight." 34Mr Burrell deposed that he deliberately refrained from issuing invoices for work done between 12 May 2010 and mid-November 2010 because billing took up a lot of resources in a small office that were better applied to preparation of the case, and because, he said, he was aware that the defendants had a cash flow problem and he considered that issuing further bills would only highlight and exacerbate the deficiency. 35There can be no substance to the second reason. If the defendants had a cash flow problem, they needed to know how much they were to be charged. 36In the meantime the defendants arranged for the sale of various properties. From the proceeds of sale, $75,000 was paid by the defendants towards counsel's fees on 3 December 2010. 37On 15 December 2010 Sparke Helmore wrote to Burrell Solicitors 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. We look forward to your response." 38Mr Champion deposed that he was advised by Mr Burrell on 23 December 2010 that he had received that letter on 20 December 2010. Mr Champion says that he instructed Mr Burrell to respond immediately to the letter before the Council's consultants commenced further work in connection with the part-heard appeal. Mr Champion contends that Mr Burrell failed to forward the letter to him and otherwise failed to act on instructions that could have resulted in a settlement of the matter before the Council incurred substantial further costs. 39On 23 December 2010 the plaintiff issued further bills for its professional fees up to 20 December 2010 ($286,255.02) and counsel's fees and other disbursements ($161,382.19). According to Mr Burrell $93,346.65 had been paid in respect of these amounts leaving an outstanding balance of $354,290.55. 40On the evidence adduced on the present application, apart from the email of 22 June 2010 in relation to the appeal in the Woolley Bund matter, no updated costs estimates had been provided by the plaintiff to the defendants since the original estimates in the costs agreement, that had long been superseded. 41There were further hearings in January and February 2011. On 16 February 2011 Mr Robertson told Mr Burrell that he was owed over $200,000 and needed payment if he were to continue to act. 42On 24 February 2011 Mr Champion said that he did not know that the case would end up costing over $1 million. He and his wife offered Mr Robertson their personal guarantees and made proposals in relation to payment of his outstanding fees. On 28 February 2011 further payments of $50,000 were made to Mr Robertson and $25,000 to the plaintiff. 43On 28 February 2011 the plaintiff issued a statement of account that included two further invoices of 28 February 2011 for professional fees of a further $77,732.82 and $57,619.32 respectively. According to the statement of account the total amount then outstanding for professional fees and disbursements owed to the plaintiff, but excluding counsel's fees, was $345,611.47 (after payment of $148,850.41). The amount outstanding to counsel at that time was $192,029.82 plus interest (after payment of $125,000). 44On the same day Mr Burrell provided an estimate of future costs for himself ($44,000) and counsel ($88,000), totalling $132,000. 45There were negotiations between Mr Champion and the plaintiff as to how the costs would be paid and as to how payment would be secured. Mr Champion had repeatedly advised that the defendants were willing to sell or mortgage properties and provide personal guarantees to secure their continued representation by Mr Robertson. Mr Robertson declined to deal with them. He looked to his solicitor for payment of Mr Robertson's fees. But the plaintiff was anxious to obtain security for the payment of his fees as well as the costs claimed to be payable to it. 46Negotiations over the agreements dated 26 March 2011 commenced from at least early March 2011. The first draft of what became the "No. 1 Agreement" and the mortgage was provided to the defendants on 1 March 2011. The defendants were represented by an independent solicitor, Mr Simpson. 47It seems that the agreements were all signed by Mr and Mrs Champion on 26 March 2011, although their signatures were not witnessed. The further hearing of the proceedings in the Land and Environment Court were scheduled to recommence on 28 March 2011. Mr Burrell was proceeding on the basis that he needed to have signed documents to secure Mr Robertson's continued representation of the defendants at the hearing. Some further changes were made to the documents and they were re-executed in early April 2011. Copies of the agreements upon which the plaintiff now sues were received by it on 5 April 2011. 48Mr and Mrs Champion signed a document headed "Certificate as to Legal Advice and Voluntary Treaty". It stated: "We, JEFFEREY FRANCIS CHAMPION & DIANNA CHAMPION, certify as follows: 1. This certificate relates to three inter-related deeds of Agreement and a mortgage regarding payment of legal fees between REAVILL FARM P/L [ACN 001 817 492] & CHAMPIONS QUARRY P/L [ACN 127 774 949] jointly and severally of the First Part, JEFFEREY FRANCIS CHAMPION & DIANNA CHAMPION [Mr & Mrs Champion] jointly and severally of the Second Part, and BURRELL SOLICITORS P/L of the Third Part and related mortgage over land owned by REAVILL FARM P/L. 2. We obtained legal advice on the nature and effect of these Agreements and Mortgage (the 'Document') from the solicitor named below before executing the Document. 3. We understand the nature and effect of the Document to which this certificate is attached. 4. We understand the obligations and risks involved in signing the Document. 5. We sign the Document freely, voluntarily and without pressure from any person. 6. We warrant that the directors of REAVILL FARM P/L [ACN 001 817 492] & CHAMPIONS QUARRY P/L [ACN 127 774 949] are also: i. Aware of and understand the nature and effect of the Document; ii. Understand the obligations and risks involved in signing the Document; iii. have authorised and instructed us to sign the Document for and on behalf of these companies. NAME OF SOLICITOR: Anthony C Simpson DATED: March 2011" 49The certificate is undated. The signatures of Mr and Mrs Champion were witnessed by Mr Simpson. It would not be expected that Mr Simpson should have witnessed their signatures attesting to their having voluntarily entered into the agreements without pressure and after having obtained legal advice from him, unless that were the fact. 50However, on 7 November 2011 Mr Simpson advised Herbert Geer Lawyers, who then acted for the defendants, that: "I am aware that on Saturday 2 April, 2011 Mr Champion was requested to meet with Mr Burrell in the Cronulla Mall at approximately 9 am in relation to the documents. Mrs Champion did not go with Mr Champion as she had been seriously upset by Mr Burrell's behaviour and attitude several weeks earlier. Mr Champion returned to my house about 9.30 am stating that he had been harassed by Mr Burrell in the Cronulla Mall and Mr Champion told me that he had told Mr Burrell he was not having anything further to do with the matter. Mr Champion informed me that Mr Burrell had stated he was going to follow Mr Champion down to my house to pursue the matter there. When Mr Burrell entered my house the matter of the documents was discussed. Mr Champion stated that he did not want to sign the documents. Mr Burrell repeatedly insisted that the documents be signed and witnessed. Mrs Champion was absent from the room for all of the discussions due to her previous encounter with Mr Burrell. Mrs Champion only came into the room when the documents were to be witnessed, as she was distressed by the escalation of pressure being applied by Mr Burrell. On previous occasions leading up to 2 April, 2011 I had attempted to assist a satisfactory resolution between the Champions and Mr Burrell however, his attitude to a resolution varied greatly as did his conversations and behaviour. Given the circumstances of the day and the circumstances over the previous several weeks which I was privy to, I believe Mr and Mrs Champion signed the documents with the clear understanding that unless the documents were signed the legal team representing the Champions in the Land and Environment Court case would withdraw immediately from the case. I was unable to explain the documents to Mr and Mrs Champion without the presence of Mr Burrell in the room. Mr Burrell stated the costs were in relation to the Land and Environment Court case Champions Quarry v Lismore City Council. Mr Burrell did not explain to me, as the witnessing solicitor, the history of the amounts claimed or whether updated costs estimates and monthly accounts had been provided to the Champions as at 2 April, 2011. I had no opportunity to ask Mr and Mrs Champion any questions in relation to the matter, as Mr Burrell remained present until the documents were signed. After discussing the matter further with Mr and Mrs Champion I suspected that the Champions had signed the documents under duress and therefore under the circumstances detailed above and also at the request of Mr and Mrs Champion I did not hand over the documents to John Burrell but retained the same pending the resolution to this matter." 51No affidavit of Mr Simpson's was read on the present application. 52A further statement of account was rendered by the plaintiff on 14 November 2011. It referred to further invoices having been issued on 30 September 2011. According to the statement of account of 14 November 2011 the plaintiff rendered an account for further professional fees on 30 September 2011 totalling $104,592.04. The statement of account recorded a further payment of $50,000 having been made towards counsel's fees on 28 March 2011, taking the total amount paid for counsel's fees to $175,000 and leaving $196,936.36 plus interest outstanding to Mr Robertson and a further sum of $5,197.05 payable to another barrister. Payments received for the plaintiff since 28 February 2011 totalled $41,135.63, taking the total amount paid for the plaintiff's costs to $189,986.04. According to the statement of account the amount outstanding to the plaintiff excluding counsel's fees was $418,223.71 plus interest. 53The invoices rendered on 30 September 2011 as the further claims for professional fees payable to the plaintiff were not in accordance with the estimate provided on 28 February 2011. The plaintiff had there estimated that the plaintiff's further charges would be $44,000. The charges were more than double that amount. 54By both the first and second agreements dated 26 March 2011 the defendants acknowledged that they were indebted to the plaintiff. The defendants contend that they signed the agreements dated 26 March 2011 and the mortgage under duress. It would not be necessary for them to go so far. The plaintiff owed fiduciary duties to the defendants and was in the position when negotiating the agreements dated 26 March 2011 of conflict between its interest and its duties. The agreements would be liable to be set aside if the defendants did not give their fully informed consent (Maguire v Makaronis [1997] HCA 23; (1997) 188 CLR 449 at 466). 55It does appear that the defendants were advised by an independent solicitor, Mr Simpson. As indicated in para [48] above, they certified that they had obtained legal advice on the nature and effect of the agreements and the mortgage from him. There is a question to be tried as to what advice was given and as to whether or not the defendants gave their informed consent to the agreements. In the letter of 7 November 2011 to Herbert Geer Lawyers, quoted at para [50] above, Mr Simpson stated in substance that Mr Burrell did not explain to him the history of the amounts claimed or whether updated costs estimates and monthly accounts had been provided to the Champions, and he had no opportunity to ask Mr and Mrs Champion any questions in relation to the matter as Mr Burrell remained present until the documents were signed. If there is evidence at the final hearing that is accepted to the effect that the defendants were not advised of their rights, or of the plaintiff's obligations in relation to the provision of costs estimates, or the termination of the solicitor's retainer, it would probably be concluded that the defendants' consent to the terms of the agreement, even if voluntary and not vitiated by duress, was not fully informed. However, that question cannot be determined on this interlocutory application. There is no affidavit from Mr Simpson. Mr Burrell denies that he harassed Mr or Mrs Champion and says that at all times he conducted himself in a proper and professional manner. The question of whether the defendants gave informed consent to the agreements is a question for final hearing. I proceed on the basis that there is a serious question to be tried that the agreements and the mortgage are enforceable in accordance with their terms. 56Clause 4 of the first agreement provided that Reavill Farm would provide a second mortgage "to secure amounts outstanding on tax invoices relating to work undertaken and billed by [Burrell Solicitors] as set out in a statement of account dated 28 February 2011 and any further tax invoices rendered now or in the future." 57This term is reflected in the mortgage itself. The moneys secured are "the balance due under the said tax invoices and any further tax invoices rendered now or in the future ...". 58The question is whether there is a serious question to be tried that there are any outstanding amounts "due under the said tax invoices and any further tax invoices" (emphasis added). 59Section 309 of the Legal Profession Act relevantly provides: "309 Disclosure of costs to clients (1) A law practice must disclose to a client in accordance with this Division: ... (b) the client's right to: (i) negotiate a costs agreement with the law practice, and (ii) receive a bill from the law practice, and (iii) request an itemised bill after receipt of a lump sum bill, and (iv) be notified under section 316 of any substantial change to the matters disclosed under this section, and (c) an estimate of the total legal costs if reasonably practicable or, if that is not reasonably practicable, a range of estimates of the total legal costs and an explanation of the major variables that will affect the calculation of those costs, and (d) details of the intervals (if any) at which the client will be billed. ..." 60Section 310(1) provides: "310 Disclosure if another law practice is to be retained (1) If a law practice intends to retain another law practice on behalf of the client, the first law practice must disclose to the client the details specified in section 309 (1) (a), (c) and (d) in relation to the other law practice, in addition to any information required to be disclosed to the client under section 309." 61Section 311(1) provides: "311 How and when must disclosure be made to a client? (1) Disclosure under section 309 must be made in writing before, or as soon as practicable after, the law practice is retained in the matter." 62Sections 316 and 317 relevantly provide: "316 Ongoing obligation to disclose 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. 317 Effect of failure to disclose (1) Postponement of payment of legal costs until assessed If a law practice does not disclose to a client or an associated third party payer anything required by this Division to be disclosed, the client or associated third party payer (as the case may be) need not pay the legal costs unless they have been assessed under Division 11. Note. Under section 369, the costs of an assessment in these circumstances are generally payable by the law practice. (2) Bar on recovering proceedings until legal costs assessed A law practice that does not disclose to a client or an associated third party payer anything required by this Division to be disclosed may not maintain proceedings against the client or associated third party payer (as the case may be) for the recovery of legal costs unless the costs have been assessed under Division 11. ..." 63Under s 352, contained in Division 11 of Part 3.2, a law practice that has not complied with its obligations of disclosure in Division 3 of Part 3.2 can apply to the Manager, Costs Assessment, for an assessment of its costs to which a bill relates. The section provides: "352 Application for costs assessment by law practice giving bill (1) A law practice that has given a bill may apply to the Manager, Costs Assessment for an assessment of the whole or any part of the legal costs to which the bill relates. (2) If any legal costs have been paid without a bill, the law practice may nevertheless apply for a costs assessment. (3) An application for a costs assessment may be made even if the legal costs have been wholly or partly paid. (4) An application may not be made under this section unless at least 30 days have passed since: (a) the bill was given or the request for payment was made, or (b) the costs were paid if neither a bill was given nor a request was made, or (c) an application has been made under this Division by another person in respect of the legal costs." 64Following a costs assessment, the costs assessor is to issue a determination (s 367) and issue a certificate of that determination (s 368). On the filing of the certificate in the office or registry of the court the certificate is taken to be a judgment of the court for the amount of unpaid costs (s 368(5)). 65The question is whether the plaintiff has shown that there is a serious question to be tried that there is any amount due or which will become due under the tax invoices rendered by the plaintiff within the meaning of the mortgage. That question could only be answered affirmatively if either it was seriously arguable that the plaintiff had complied with its obligation of disclosure under Division 3 of Part 3.2 of the Act, or, if any amount that may become due on a certificate of determination following a costs assessment could properly be characterised as an amount due under the plaintiff's tax invoices within the meaning of the mortgage. 66When asked to identify what disclosures in writing the plaintiff had made containing an estimate of the total legal costs, or a range of estimates of the total legal costs, after the original estimates of costs in the costs agreement (see paras [13] and [17] above), counsel for the plaintiff referred to: a) the email of 18 October 2010 referred to at para [31] above, in which Mr Burrell forwarded Mr Robertson's further estimate for the following week's hearing of $50,000 in addition to his outstanding fees of $105,020.14; b) the email of 28 February 2011 referred to at para [44] above, in which their estimates of $44,000 and $88,000 for further work by Mr Burrell and Mr Robertson respectively; and c) recital iv of the first agreement dated 26 March 2011 which repeated the original costs estimates and stated that the case had been developed into a hearing "involving some one and a half million dollars". To this can be added the email of 22 June 2010 referred to at para [27]. 67The statement in recital iv to the first agreement is not a costs estimate. Assuming that the recital refers not to the value of the issues at stake at the hearing at the Land and Environment Court, but to the costs of those proceedings, it seems to refer not just to the costs of the plaintiff and Mr Robertson, but to the amount of costs at stake, including the liability of the defendants under costs orders made in the Land and Environment Court and under costs orders that could ultimately be made in that court, without dissection. 68The question is not only whether the documents referred to contain costs estimates in compliance with s 309(1)(c) and s 316 of the Act, but whether the plaintiff failed to disclose in writing to the defendants that there were substantial changes to the costs estimates as soon as practicable after becoming aware of the changes. There can be no doubt that the plaintiff failed to do so. Mr Burrell admits as much (see para [34]), but seeks to excuse it. The excuses do not obviate the effect of s 317 on the plaintiff's failure to make disclosure. 69Moreover, such revised estimates as were given were both late and inaccurate. 70I do not think it seriously arguable that the plaintiff complied with its obligation under s 316 to disclose in writing substantial changes to its estimates of costs. That does not mean the plaintiff is not entitled to recover at least a fair and reasonable amount of legal costs (and ss 319(1)(c) and 363) (It is unnecessary to express a view as to whether the costs assessor would be required to assess costs in accordance with the costs agreement (s 361(1)(c)). It means that the defendants need not pay the amounts claimed in the tax invoices until the costs have been assessed in accordance with Division 11 (s 317(1)). 71Properly, the plaintiff has not sought to institute proceedings to recover legal costs following service of a bill of costs pursuant to Division 7 of Part 3.2 of the Act. Counsel for the plaintiff advised that the only application for an assessment that had been made had been one lodged by the plaintiff in respect of counsel's fees, but the plaintiff was in a position to lodge an assessment in relation to its fees. 72I do not think it seriously arguable that any sum will be payable by the defendants, other than pursuant to a certificate of determination of costs as assessed. 73The question then is whether such costs would be costs payable "under" the plaintiff's tax invoices. The question is not whether the costs once assessed would be costs "with respect to" or "in respect of" the costs claimed in the tax invoices. 74The proper construction of the mortgage is a question of law that can be decided on the interlocutory application. The plaintiff's right to recover costs would flow not from the rendering of the tax invoices, but from the costs assessor's determination. In my view, such costs would not be due "under" the tax invoices, they would be due under the certificate of determination (The Mortgage Insurance Corporation (Limited) v Pound (1895) 64 LJQB 394 at 397). Whilst failure to comply with the duty of disclosure does not invalidate the security taken by a solicitor (or a solicitor's lien) (Gigi Entertainment Pty Ltd v Macree (No. 2) [2011] NSWSC 869 at [14]), in this case the security is so worded that it does not apply to a sum becoming due only under a certificate of determination following a costs assessment. 75The mortgage cannot be given a wider and more benevolent construction so as to secure any amounts that may be found due under a certificate of determination of costs. Evidently, the parties understood, or assumed, that there were amounts due and that would become due under the tax invoices. The mortgage was prepared by the plaintiff. Had the plaintiff complied with its obligation of disclosure the amounts would have been due under the tax invoices. The mortgage is not to be construed more widely to give the words used a meaning they cannot reasonably bear. That is so a fortiori when to do so would be to reward the plaintiff for its breach of s 317. To put it another way, the mortgage between solicitor and client would operate in accordance with the evident understanding that amounts were due and would become due under the tax invoices, if the plaintiff had complied with its disclosure obligations. It is unnecessary to construe the mortgage more widely than the literal words permit to achieve its intended purpose, when that purpose would have been achieved had the plaintiff complied with its obligations under the Act. 76For these reasons I conclude that no debt is or will be secured by the mortgage. Accordingly, the plaintiff should not have leave to lodge a fresh caveat to claim an interest as equitable mortgagee. 77Different questions arise in relation to the other caveats. Clauses 2 and 5 of the second agreement provide for the application of the net proceeds of sale of the properties referred to in those clauses in reduction of the debts of Reavill Farm to the plaintiff. There is no present debt payable by Reavill Farm to the plaintiff. But such debts may well become payable following an assessment of the plaintiff's costs. The fact that there is not presently a debt payable to the plaintiff does not mean that the plaintiff is not entitled to have the net proceeds of sale of the properties referred to in clauses 2 and 5 of the second agreement applied in due course in reduction of such a debt if it becomes owing and payable. There is a serious question to be tried that the agreements in clauses 2 and 5 should be specifically enforced. As noted at para [8] the interests claimed are caveatable interests. 78The balance of convenience favours the grant of leave under s 74O to the plaintiff to lodge fresh caveats. There is no evidence as to why the plaintiff allowed the caveats to lapse. In his affidavit of 15 November 2011 Mr Burrell gave evidence of the service of the notice of proposed lapsing of the caveats on 2 November 2011. The summons was filed on 15 November 2011. Relief was sought in paragraph 4 of the summons for an order pursuant to s 74K of the Real Property Act extending the caveats. The matter was before Sackar J as duty judge on 18 November 2011. Orders were made in respect of the contract for sale of land dated 6 September 2011 between Macabil Pty Ltd as vendor and Mr Hillbom as purchaser of the property known as Unit 7, 4 Dixon Place, Lismore Heights. The matter was stood over to 25 November 2011 without any orders being made, or apparently sought, in relation to the extension of caveats. The caveats lapsed by 23 November 2011 at the latest. On 25 November 2011 counsel for the plaintiff indicated that an application would be made on the following Friday, as it was. The hearing of 25 November 2011 was conducted by telephone link with Mr Champion and was confined to the plaintiff's application to restrain the disposition of the proceeds of sale of the property. 79The defendants do not point to any prejudice that they would suffer if leave were given to the plaintiff to re-lodge the caveats that have lapsed over the properties in lot 2 of SP 41603 or lots 6 to 11 in SP 85141. Had an application been made within time for the extension of the caveats, the caveats would have been extended. 80If the contract for the sale of lot 2 in SP 41603 is to be completed, the plaintiff is protected by the orders made on 25 November 2011. However, it appears that both the vendor and the purchaser may be prepared to walk away from that contract, or not complete it, unless the vendor is permitted to distribute the proceeds of sale in the way Mr Champion had proposed, including by making payments to Pitman Constructions Pty Ltd and J S & P A Bridge in accordance with what purport to be irrevocable directions dated 31 October 2011. The orders of 25 November 2011 require the net proceeds of sale to be paid into court and for notices to be given so that the question of who is entitled to the moneys can be determined. It appears from Mr Champion's submissions that he and the purchaser are related by marriage. There is a risk that rather than the sale being completed and the proceeds applied in accordance with the orders of 25 November 2011, the vendor and the purchaser may either rescind the contract or simply not complete it. In those circumstances the plaintiff is at risk that there may be other dealings with the property, such as by the granting of a registered mortgage, that could prejudice its claim under clause 2 of the second agreement. In my view there is a sufficient risk for the leave sought to be given. 81The plaintiff offers the usual undertaking as to damages and also undertakes to provide a withdrawal of caveat to permit the completion of the sale of lot 2 of SP 41603. 82The defendants sought the discharge of the orders of 25 November 2011. There was further evidence at the hearing on 2 December 2011 that was not available at the hearing on 25 November 2011. In my view, that further evidence does not warrant varying or discharging the orders made on 25 November 2011. 83As noted above, the fact that there is no debt presently payable to the plaintiff for its costs does not mean that the plaintiff would not be entitled to enforce clause 2 of the second agreement when an amount of costs has been assessed. The orders of 25 November 2011 do not require the defendants to pay legal costs prior to their being assessed. Rather, they require payment of the net proceeds of sale into court in order that questions of priorities can be determined. 84The plaintiff should, however, proceed to the assessment. The grant of leave to lodge fresh caveats will be also subject to the plaintiff's undertaking to the court to do so. 85The final issue concerns the relief sought in paragraph 2 of the notice of motion. No order could be made in the form sought. The order sought would be a restraint on the defendants dealing with any of their assets otherwise than in accordance with the three agreements dated 26 March 2011. But there is no evidence that the agreements dated 26 March 2011 deal with all of the assets of the defendants. Indeed, the agreements dated 26 March 2011 do not deal with the assets of Mr and Mrs Champion. As framed, the orders would operate as a form of freezing order. The claim for relief is not based upon principles relating to the grant of Mareva relief. 86Even applied to the assets referred to in the agreements, order 2 would be too uncertain to be enforceable. For example, clause 7 of the second agreement contemplates that Reavill Farm may deal with "such other assets as it sees fit within its discretion" to raise money to pay the balance owing to the plaintiff. The restraints sought in order 2 are too imprecise to be the subject of a court order. 87It may be possible to frame an order to prevent the defendants from dealing with the property at lot 22 of DP 1021621 in Hazlemount Lane, Tucki otherwise than by borrowing money on first mortgage and applying at least $50,000 of the mortgage advance in reduction of debts of Reavill Farm to the plaintiff (clause 4 of the second agreement). But clause 4 seems to be dependent upon the ANZ Bank first having released a mortgage over that property upon its loan being refinanced. The plaintiff has not adduced evidence that the ANZ Bank's mortgage over lot 22 in DP 1021621 has been discharged. That is to say there is no evidence that the circumstances in which the plaintiff may be entitled to receive part of a mortgage advance pursuant to clause 4 have yet arisen. 88For these reasons I refuse the relief sought in paragraph 2 of the notice of motion.

Orders 89For these reasons I make the following orders:

1. Upon the plaintiff giving the usual undertaking as to damages and also undertaking to the court: a) that if it has not already done so, it will promptly apply to the Manager, Costs Assessment for an assessment of the legal costs and disbursements it claims to be payable by the defendants and will expeditiously pursue that assessment; and b) that on request it will provide a duly executed withdrawal of caveat in respect of the property in lot 2 of SP 41603 to permit the completion of the contract for sale of land dated 6 September 2011 between Macabil Pty Ltd and Mr Hillbom, order pursuant to s 74O(2)(a) of the Real Property Act that the plaintiff have leave to lodge: c) a caveat on certificate of title folio identifier 2/SP41603 notwithstanding the lapsing of caveat AG 536309B; and d) a caveat on certificates of title folio identifiers 6/SP85141, 7/SP85141, 8/SP85141, 9/SP85141, 10/SP85141 and 11/SP85141, notwithstanding the lapsing of caveat AG 536293P.
2. Order that the amended notice of motion be otherwise dismissed. 90Both parties have had a measure of success and failure on the application. My prima facie view is that the costs of the amended notice of motion filed on 29 November 2011 should be costs in the proceedings. If any party seeks a different order I will hear the parties on costs.

Amendments 14 February 2013 - "as" removed after "accepted" in line 13; comma inserted after "of their rights" in line 14; comma inserted after "costs estimates" in line 15. Amended paragraphs: 55 14 February 2013 - "s 317" replaced with "s 316" in line 2. Amended paragraphs: 70 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 February 2013