Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167

Agbaba v Witter & Ors (1977) 14 ALR 187

Bridal Fashions Pty Ltd v Comptroller-General of Customs (1996) 17 WAR 499

Brunskill v Sovereign Marine & General Insurance Co Ltd [1985] HCA 61; (1985) 62 ALR 53

Chambers v Jobling (1986) 7 NSWLR 1

Devries v Australian National Railways Commission (1993) 177 CLR 472

Flett v Demliquin Publishing Co Ltd [1964] NSWR 383

Foamlite Australia Pty Ltd v Campbell & Skilled Engineering Pty Ltd, unreported; FUL SCt of WA; Library No 7686; delivered 31 May 1989

Galea v Galea (1990) 19 NSWLR 263

In re Robinson's Settlement; Gant v Hobbs [1912] 1 Ch 717

Pirie v Richardson [1927] 1 KB 448

Rosenberg v Percival [2001] HCA 18; (2001) 178 ALR 577

SS Hontestroom v SS Sagaporack [1927] AC 37

Stinchcombe v Thomas [1957] VicRp 66; [1957] VR 509

Taylor v Johnson [1983] HCA 5; (1983) 151 CLR 422

The State of Queensland & Anor v JL Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146

Union Bank of Australia v Harrison, Jones and Devlin Ltd [1910] HCA 44; (1910) 11 CLR 492

Voulis v Kozary [1975] HCA 44; (1975) 180 CLR 177

Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531

Way v Latilla [1937] 3 All ER 759

Webb v Bloch [1928] HCA 50; (1928) 41 CLR 331

Williams v Australian Telecommunications Commission (1988) 52 SASR 215

1 MURRAY J: In this matter I have had the advantage of reading in draft the reasons for decision to be published by Templeman J. I wish to express my entire agreement with them and I wish expressly to associate myself with his Honour's concluding remarks concerning the possible application of the Rules of the Supreme Court O 66 r 5.

2 In my opinion also, far from this being a case where the trial miscarried because of an over-zealous reliance upon strict notions of pleading by his Honour the trial Judge, this was a case where his Honour carefully dealt with the matter properly in accordance with the performance of his duty to decide the issues which the defence in truth raised. The failure of the appellant to aver that he contracted with the respondent as agent for an undisclosed principal clearly contributed to the final outcome of the trial, but the fact that there was no such averment on the face of the pleadings and no such averment during the course of the conduct of the trial, meant that no such issue could properly be dealt with by the trial Judge without injustice to the respondent, a point which counsel for that party made abundantly clear to the trial Judge.

3 In my opinion this is simply a case where the pleadings were treated as performing their proper function of delimiting the issues before the Court of trial. I too would dismiss the appeal.

4 TEMPLEMAN J: The principal question in this appeal is whether the learned trial Judge erred in deciding the case on the pleadings, without regard to the real issue between the parties.

5 The respondent is a firm of chartered accountants. It sued the appellant, Richard Lochiel Cameron, in the District Court alleging that at all material times, the appellant had carried on business as "Great Breaks International". In its statement of claim, the respondent alleged that it had carried out work for the appellant pursuant to an oral agreement between them that it would provide accounting services to the appellant in relation to a proposed tourist venture in Indonesia and that the appellant had agreed to pay its usual professional fees for these services.

6 After the appellant learned of the proceedings, but before the statement of claim was served, his solicitors wrote to the respondent's solicitors setting out the appellant's position. The letter contained the following passage:

"We are instructed that our client has had no dealings in his private capacity with your client, as your client well knows.

Our client has at all times dealt with your client on behalf of Great Breaks International Limited."

7 Despite that clear statement, the appellant's defence consisted of denials of every allegation other than non-payment of the respondent's accounts. The appellant admitted he had not paid the respondent any moneys. He stated that he was not obliged to do so. The appellant did not plead that he had not contracted personally or that he had contracted as agent for Great Breaks International Ltd.

8 The appellant's defence was signed by his solicitor, who appeared as counsel during the first two days of the trial and who instructed other counsel for the balance of the trial.

9 At the hearing of the appeal, counsel for the appellant sought to justify his client's position by reference to the text Pleadings: Principles and Practice, by Sir Jack Jacob QC and Mr Iain S Goldrein (1990) which contains the following passage:

"The defendant should not confess and avoid where a mere traverse is sufficient. For he will then introduce additional matter which he may have to prove, instead of putting the plaintiff to proof of his allegations. It is not always wise for the defendant to set up an affirmative case, especially if there is a ground for anticipating that the plaintiff may fail to establish a prima facie case."

10 The corollary of that statement is equally true: if it is obvious that the plaintiff will establish a prima facie case, it is wise to establish an affirmative case if liability is to be avoided. That should have been obvious to the appellant's solicitor, given the instructions to which I have referred.

11 That being so, the conduct of the appellant's solicitor in pleading a denial rather than a confession and avoidance, was, in my view, misguided and improper. In so saying, I adopt the following passage from the judgment of Ipp J in Unioil International Pty Ltd & Ors v Deloitte Touche Tohmatsu & Anor (No 2) (1997) 18 WAR 190, 193:

"It has long been the practice, for tactical reasons, for lawyers to draft pleadings in such a form as to put the opposing party to proof of allegations, and even to deny allegations, notwithstanding that their factual instructions might not justify such failures to admit or denials. In my view, the circumstances under which litigation is conducted have changed to such a degree that this practice should no longer be tolerated. I do not intend, by saying this, to indicate that there should be any obligation on lawyers to exercise some credibility judgment as to the merits of their factual instructions. But, in my view, where a denial or putting to the proof would be inconsistent with the facts with which the pleader is instructed, the pleader should admit the allegation in question."

12 In the present case, the denial of the allegation that the respondent had contracted with the appellant, was inconsistent with instructions the appellant had given to his solicitors. On those instructions, the true issue was whether the respondent had contracted with the appellant as agent for Great Breaks International Ltd. But the issue raised by the denial was whether the respondent had contracted with the appellant at all.

13 As Toohey J pointed out in Banque Commerciale SA (en liq) v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279, 302:

"Axiomatic though it may be to say it, the primary function of pleadings is to define the issues for decision in the litigation: see generally Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658, 654. By defining, the pleadings thereby limit the issues for decision, subject of course to the court's power to grant an amendment." (my emphasis)

14 During the trial, that point was made repeatedly by the Judge in the course of exchanges with counsel for the appellant. However, counsel appeared not to accept his Honour's rulings to this effect by contending that the appellant could avoid personal liability by casting doubt on the credibility of Maxwell Leonard Troy, the respondent's principal witness, who had dealt with the appellant. However, counsel did not seek to attack Mr Troy's credibility on the basis that he had dealt with someone other than the appellant: rather, that he had dealt with the appellant as agent for Great Breaks International Ltd.

15 Counsel's error is encapsulated in a submission he made to the Judge that:

"the contract is made by the contracting parties; that is Mr Troy and we say Great Breaks International Ltd, although we're not seeking to prove that." (my emphasis)

16 It is true that the appellant was not seeking to prove that Great Breaks International was a contracting party in the sense that he had not pleaded that fact in his defence. It is for that reason that the capacity in which the appellant acted in his dealings with Mr Troy was irrelevant. And because it was irrelevant, evidence about the appellant's capacity was inadmissible.

17 The Judge put the position very clearly in a ruling he gave on the first day of the trial, during the cross-examination of Mr Troy by counsel for the appellant:

"I am presented with a series of questions in the course of cross-examination of Mr Troy with a view to showing by way of attacking his credit that Mr Troy was not acting for Mr Cameron in a personal capacity but was acting for Great Breaks International Ltd. That is the very plain tenor of the cross-examination. The pleadings, however, are confined to the question whether there was indeed a contract between the plaintiff, on the one hand, and the defendant which of course must be the defendant in his personal capacity, on the other.

The defendant in the defence denies that the plaintiff was engaged to provide accounting services as alleged, or at all, and the defendant does not aver that he was acting in the capacity of agent of the third party Great Breaks International Ltd and, accordingly, the trial must proceed on the basis of whether, and have reference to the question whether, the plaintiff's evidence that there was a contract, as he has alleged, did exist.

It is outside the ambit of these pleadings now to consider whether the defendant was acting as agent or gave instructions as agent of Great Breaks International Ltd or any other company, and I will admit no further cross-examination on that issue. (Counsel for the appellant) has already told me that he does not intend to elicit evidence that Mr Cameron was acting as an agent for Great Breaks International Ltd, and that reinforces the view that I take in making this ruling.

I will say this: ... some confusion may well have come about by the invoices having been directed to Great Breaks International Ltd and the invoices speak of corporate and non-corporate activities, but so far as the pleadings are concerned, I am confined to the issues that I have outlined, and that is how this trial will proceed."

(AB135-6)

18 On the second day of the trial, counsel for the appellant opened his case and called the appellant to give evidence. The appellant said he was the Chief Executive Officer of Great Breaks International Ltd. He said he and a number of investors had decided to establish a corporate structure for their intended business activities and had ultimately purchased Great Breaks International Ltd for that purpose. Thereafter, the appellant said: "We conducted ourselves under the umbrella of Great Breaks International". (AB187).

19 The appellant then confirmed that the name he had used was that of a limited liability company. He was then asked to identify a copy of the certificate of incorporation for the company.

20 Counsel for the respondent then objected on the basis that the appellant could not adduce evidence about matters which had not been raised in his pleading.

21 The Judge asked whether the document had been discovered and was told it had been provided to counsel for the respondent approximately 10 minutes earlier, although a photocopy had been provided earlier in the week. As counsel for the respondent pointed out, if the existence of the company had been pleaded, it would have been possible to obtain a copy of the certificate of incorporation much earlier: and that may have affected the way the respondent proceeded with the litigation.

22 The Judge then asked counsel for the appellant about the relevance of the certificate of incorporation. After some procrastination, counsel submitted that the certificate of incorporation was relevant to Mr Troy's credit. Counsel pointed out that Mr Troy had denied the existence of the company and that the certificate of incorporation was evidence that the corporation did exist: "that's all it purports to do".

23 The Judge then observed that the matter did not arise out of the pleadings and that he could see no relevance to it. The Judge ruled that the certificate of incorporation would not go into evidence.

24 After an adjournment, counsel for the appellant then submitted that the certificate of incorporation was relevant because of the allegation in the statement of claim that the appellant at all material times carried on business as "Great Breaks International Ltd". That was not in fact the case: the reference was to "Great Breaks International". Counsel referred also to the respondent's answers to the appellant's request for further better particulars of the statement of claim.

25 Particulars had been sought of an allegation in the statement of claim that at the request of the appellant, the invoices upon which the respondent sued had been addressed to Great Breaks International Ltd. The respondent was asked for particulars of the occasions on which the appellant had requested the invoices to be made out to a party other than himself and what, if any, reasons he gave for that request.

26 The answer to the question was that requests were made during telephone conversations between Mr Troy and the appellant.

27 After some further argument, the Judge said he understood the purpose of the tender of the certificate of incorporation was to attack the credit of Mr Troy in his evidence that the company did not exist until November 1996.

28 Despite having said previously that that was the purpose of the tender, counsel for the appellant replied it was not.

29 A little later, the Judge expressed the tentative view that so far as Mr Troy's credit was concerned, the reference to Great Breaks International in the pleadings was a collateral issue. The Judge said Mr Troy had given evidence that he did not know of the company's existence until December 1996 or whether there had even been any shareholders. The Judge said the appellant was left with that evidence which was collateral: and that evidence could not be called to controvert it. As far as the reference to Great Breaks International Ltd in the particulars of the statement of claim was concerned, that was particularisation of the addressee of the accounts only: the pleading predominated and the alleged contract between the appellant and the respondent had been denied. The Judge said he would not depart from his earlier ruling that the certificate of incorporation would not be admitted into evidence.

30 As I have noted above, the trial was not completed during the allotted period and did not resume for some eight months. The appellant was then represented by other counsel: again, not counsel who has appeared on the appeal.

31 Upon resumption, counsel for the appellant called Mr Terry Keys to give evidence. Mr Keys said he had been appointed a director of Great Breaks International Ltd on 20 October 1995.

32 During the course of his evidence-in-chief, Mr Keys was asked questions which caused him to identify persons who had attended a meeting with the appellant and himself who were either shareholders or potential shareholders in Great Breaks International Ltd.

33 Counsel for the respondent then objected. He reminded the Judge that a considerable amount of time had been spent in the first two days of the trial arguing the relevance and admissibility of evidence relating to Great Breaks International Ltd. Counsel reminded the Judge about the directions he had made previously concerning the evidence which might be led. Counsel submitted that the directions "are just as relevant today as they were in the first two days of trial".

34 At that point, the Judge asked counsel for the appellant how he proposed to lead the evidence. Counsel pointed out that the respondent had put into evidence an extract of a business name search in the name Great Breaks International. The search showed that the registered proprietor of that name was the appellant. Counsel submitted:

"It is clearly an issue as to what Great Breaks International Ltd was and the (respondents) have led evidence on. I'm entitled to rebut that allegation."

35 Pausing there, although the respondent had pleaded that the appellant at all material times carried on business as "Great Breaks International", that allegation in fact added nothing to the claim against the appellant that the respondent had contracted with him. As the Judge had ruled previously, that was a collateral matter.

36 To return to counsel's response to the Judge's question: counsel said his second submission was that the appellant was entitled to falsify, by any evidence he chose, the proposition that the respondent had contracted with him:

"We do not ask this Court to make any finding in relation to a contract between Mr Troy's firm and any other third party. That is not our job but we (can) falsify the central proposition pleaded. We can do that by leading any evidence which falsifies it."

37 This submission perpetuates the error made by counsel's predecessor. The only way in which, on counsel's instructions, he could "falsify" the respondent's case was to allege that it had contracted with the appellant as agent for Great Breaks International Ltd. But that could only be done by pleading the allegation.

38 However, the Judge said he would admit the evidence about Great Breaks International Ltd "... and what I am particularly interested in seeing ultimately, of course, are the submissions by both counsel which will bear upon the importance of the evidence". Counsel responded:

Thus, in my view, the evidence was admitted provisionally, subject to its admissibility being determined later, as counsel accepted.

39 Counsel then proceeded to ask Mr Keys questions about his involvement with Great Breaks International Ltd. Mr Keys said he was a shareholder and that he had been appointed a director on 20 October 1995.

40 Counsel then asked questions about a directors' meeting he had attended on 18 February 1996 which he had tape recorded and transcribed subsequently.

41 Mr Keys then identified a bank deposit slip relating to "Great Brakes (sic) International" and a facsimile which he had sent to the respondent on 14 August 1996 on the letterhead Great Breaks International Ltd. Mr Keys identified also a facsimile dated 23 December 1996 from the respondent, with a number of applications for shares in Great Breaks International Ltd and a number of documents either on the letterhead of Great Breaks International Ltd or which referred to that company.

42 All these documents were accepted into evidence.

43 Counsel then attempted to tender through Mr Keys a copy of the certificate of incorporation of Great Breaks International Ltd. The Judge then said:

"I think this is probably the document which I initially said was not to be admitted in evidence, the certificate of incorporation, but in view of all the water that has flowed under the bridge I think really it would be meaningless not to admit it."

44 Counsel for the appellant then submitted that the certificate of incorporation was admissible "purely because of the tender by (the appellant) of the business name search". Without any other matter, counsel submitted, the document was admissible on that basis.

45 Counsel for the respondent then objected. He said his client had conducted its case based upon directions made by the Judge and on statements made by counsel for the appellant at the beginning of the trial. Counsel said:

"It now appears that the Court has taken a different view as to the evidence which is admissible and the direction (in) which the case may proceed.

That has placed the (respondent) in an extremely difficult position because there are a large number of matters which evidence could have been called on initially which were not, due to directions made by yourself and also, as I said, statements by (counsel for the appellant). It now appears that those directions are not going to be followed and that the (respondent) will be allowed to adduce evidence in relation to a number of matters which are not set out in their pleadings. I would object to the certificate of incorporation going in, and I would also raise the point that by reason of the change of the Court's position the (respondent) have been placed at a great disadvantage."

46 The Judge then ruled that the certificate of incorporation should be admitted, repeating his earlier comment that he had made that decision because of the water that had flowed under the bridge and that it would be meaningless not to accept the document. The Judge said that he would hear submissions in due course about any of the other evidence.

47 Pausing there, it is to be noted that the Judge had not reversed his earlier ruling about the way the trial was to be conducted. Nor had counsel for the appellant asked the Judge to do so. Indeed, as appeared from the submissions to which I have referred above, counsel expressly disclaimed any invitation to the Court to find that a contract had been made between the respondent and any third party.

48 The Judge dealt with this aspect of the matter in his reasons in the following terms:

"At the commencement of this trial I remarked that the defence was entirely uninformative and I asked whether there was a contract with anyone.

(Counsel for the appellant) told me that there was a corporation known as 'Great Breaks International Limited' and a business name registered as 'Great Breaks International' in the name of the (appellant) - but of which there were no partners. The (appellant) never traded as Great Breaks International. The (appellant) had negotiations and communications with the (respondent) in the (appellant's) capacity as director of Great Breaks International Limited but his client does not 'have instructions from the company to admit the existence of a contract'. He said 'there may well be one but I don't have any instructions to do that'. He insisted the pleadings cover the position - 'it was not for us to prove that another party was the contracting party and we say the evidence in this matter is sufficient to show that there never was a contract'.

He also told me that he 'would not be seeking to lead evidence to say there was another contracting party ... There simply wasn't a contract between (the appellant) and the (respondent)' and that is what would be asserted. The (appellant) would not be proving the existence of a contract with another party and he would not be proceeding on the basis that he was acting as agent for someone else.

(Counsel for the respondent) told me that aspects of the defence were raised a week before trial and he advised (respondent's) counsel that the (respondent) would require the (appellant) strictly to follow his defence.

Notwithstanding (counsel for the appellant's) expressed stand he has sought to cross-examine Mr Troy, the only witness for the (respondent), and lead evidence which could only be interpreted as suggesting that the (appellant) was acting on behalf of Great Breaks International Limited.

As a consequence if the real issue were whether the (appellant) personally, or he as agent for Great Breaks International Limited was the contracting party, I am not satisfied that that issue between the parties has been properly or adequately put before me.

If the issues are not properly before me, the inadequacy of the pleadings, notably the defence, cannot be regarded simply as technical."

49 On the hearing of the appeal, counsel for the appellant submitted that the learned trial Judge attached undue significance to the fact that the appellant had simply denied the respondent's claim without advancing a positive case that the appellant was acting as agent for another party or that the respondent in fact contracted with Great Breaks International Ltd. The essence of the submission was that the Judge was preoccupied with the pleadings.

50 In my view, that is not so. It may be accepted that pleadings are a means to an end and should not be permitted to govern litigation in which it is necessary to resolve issues which have emerged otherwise than by the pleading process.

51 In the present case, for example, if counsel for the appellant had informed the Judge that the real issue was whether the appellant had contracted on behalf of Great Breaks International Ltd, the trial could have been conducted on that basis. But, for reasons about which one can only speculate, the appellant chose not to have that issue tried. He must therefore accept the consequences.

52 Counsel for the appellant provided the Court with the recent recommendations of the Western Australian Law Reform Commission to the effect that pleadings should be abolished and replaced with case statements which set out in a concise narrative and non-legalistic form:

1. in chronological order, the facts which are material to the claim or defence; and

Counsel provided the Court also with a submission made to the Law Reform Commission in which numerous criticisms were made of the present pleading system and recommendations made for its reform. Counsel's object in providing these materials to the Court was to underpin the submission that:

"The very situation which occurred here should never be allowed to happen."

53 The assumption underlying that submission is that the present system of pleadings was responsible for the trial Judge reaching an erroneous conclusion. I do not accept that proposition. The appellant was found liable because he chose not to advance his real case: that he had contracted as agent. He was therefore obliged to conduct his case on a false premise: that he was not the person with whom the respondent contracted.

54 The result would have been no different under the case statement regime proposed by the Law Reform Commission if the appellant had stated only that his defence arose from the fact that the respondent had not contracted with him.

55 Counsel for the appellant placed considerable reliance on State Rail Authority of New South Wales v Earthline Constructions Pty Ltd [1999] HCA 3; (1999) 160 ALR 588. Counsel submitted this case was "a glaring example" of the Earthline type of error.

56 In that case, the High Court, on being satisfied that the trial Judge had failed to give proper consideration to a substantial body of the evidence which the appellant had presented at trial, held that there should be a re-trial. The evidence in question was, however, relevant to the matters in issue between the parties.

57 In the present case, the material on which the appellant relies had no relevance to the issue raised by his denial of the respondent's claim.

58 In support of his submission that the trial had miscarried and that the appeal should be by way of a rehearing, counsel for the appellant submitted:

"There's not a single document, not a single invoice, not a single piece of correspondence, which accords or sits happily with the central findings that his Honour made."

" ... but in order for me to get to that body, I have to persuade your Honours that his initial view as to the pleading point was incorrect ..."

59 For the reasons I have set out above, I believe that the view of the learned trial Judge as to the pleading point was correct.

60 Accepting the appellant's right to have a re-hearing on the appeal, that re-hearing must be based on admissible evidence. In my view, having regard to the way the appellant chose to conduct his case, the material which his counsel summarised in the passage quoted above, was not relevant and was therefore inadmissible.

61 Furthermore, as appears from the exchanges between the Judge and counsel, the material was admitted into evidence only provisionally, subject to its admissibility being determined in due course.

62 My view that the learned trial Judge approached the resolution of the dispute in a proper manner provides an answer to the first three grounds of appeal. Excluding the particulars, they are as follows:

"1. The findings made by the learned trial Judge that the professional services of the Respondents were:

(a) sought by the Appellant in his personal capacity;

(b) provided by the Respondents to the Appellant in his personal capacity in relation to and for his own business interests,

were wrong in fact and law and were manifestly against the weight of the evidence.

2. The finding made by the learned trial Judge that the Respondents were paid for the professional services they provided by way of monies credited to their account from a business operated by the Appellant in his personal capacity was wrong in fact and law and was manifestly against the weight of the evidence.

3. The finding made by the learned trial Judge that it 'matter[ed] not' that, at the request of the Appellant, the accounts rendered by the Respondents for the professional services provided by them were addressed to 'Great Breaks International Ltd' rather than the Appellant in his personal capacity was wrong in fact and law."

" ... I am not trying this action by reference to the question whether (the appellant) gave instructions as agent for Great Breaks International Ltd. If, therefore, the (appellant) gave instructions to the (respondent) to do work, then it must follow that the (appellant) himself was the contracting party."

That was the correct approach: and the result was also correct.

64 The finding made by the Judge in relation to ground 2 was that during February and March 1996 the appellant had paid some $14,5026.50 to the respondent by way of cheques drawn on an account of Pioneer Surf Missions, the business name under which the appellant conducted his own business.

65 Thus the Judge did not make the finding attributed to him: the payments were by cheque, not by way of a credit to the respondent's account. However, nothing turns on that discrepancy for present purposes. Given the Judge's finding that the appellant had contracted in his personal capacity, the source of funds he used to pay the respondent was irrelevant.

66 A similar point may be made in relation to ground 3. The Judge was correct in holding that the fact that the respondent's invoices had been addressed to Great Breaks International Ltd was irrelevant. In any event, that was explained by the fact (as found by the Judge in accepting Mr Troy's evidence) that the appellant had asked the respondent to address its invoices to the company.

67 The fourth ground of appeal raises different considerations. It is as follows:

"4. The learned trial Judge erred in fact and law in finding that because:

(a) The Appellant sought the Respondents' professional advice and assistance;

(b) Concerning a venture in which the Appellant was personally interested; and

(c) The Respondents provided those professional services in a variety of ways for fees; and

(d) The reasonableness of which was not challenged by the Appellant,

the Respondents 'must succeed' in its action in circumstances where:

(e) The then Counsel for the Appellant made it clear during the trial that:

(i) it was denied that the Respondents were entitled to the relief sought;

(ii) the onus lay on the Respondents to establish that:

(A) the professional services provided by them; and

were reasonable;

(f) The Respondents failed to establish on the evidence and on the balance of probabilities that:

(i) the professional services provided by them; or

(ii) the hourly rates charged for those services,

68 The Judge's reference to the lack of challenge to the reasonableness of the fees arises from an exchange with counsel for the appellant in which counsel said he would not be adducing any evidence to challenge the reasonableness of the fees charged by the respondent. When asked specifically by the Judge whether counsel was questioning the fee, counsel said that the fees were not conceded and that the respondent must prove its case in the ordinary way. The Judge then pointed out to counsel that this was a liquidated claim arising out of a contract: "You either accept, or you don't, the reasonableness of the fees". After some further exchanges counsel said his client was not "overtly" challenging the fees. The Judge then ruled that there would be no cross-examination upon the reasonableness of the fees: and counsel said that he would not be cross-examining in any event. The Judge responded that in those circumstances there would be no issue raised as to the reasonableness of the fees.

69 As I understand it, the gravamen of this ground of appeal is that the respondent did not prove that its charges were reasonable and its claim must therefore fail. I do not accept that submission. Mr Troy's evidence was that he told the appellant his firm would charge normal professional fees, by the hour. Mr Troy said he told the appellant specifically what the

rates would be and that they were "round the middle of what is called the second tier practices in West Perth".

70 The appellant, in cross-examination, confirmed he had been told by Mr Troy what the respondent's charges would be. Furthermore, in an e-mail dated 19 January 1997 the appellant told Mr Troy "your hourly rates are reasonable ...".

71 Given that there was no challenge to the evidence about the work carried out (which was recorded on timesheets admitted into evidence) and no challenge to the reasonableness of the respondent's rates, the statement by the Judge that the respondent "must succeed" in its action, merely reflected the fact that the respondent had proved every element of its claim.

72 For all these reasons, I have come to the conclusion that the appeal is without merit and should be dismissed. However, I cannot leave the matter without expressing my strong disapproval of the way in which the trial was conducted by both counsel for the appellant. Although it may not be fully apparent from these reasons, it is clear from the transcript that the extent to which counsel argued with the trial judge and engaged in conduct which amounted to a constructive refusal to accept his rulings was quite unacceptable.

73 The consequence was that the trial, which was listed for two days ran for four days, thereby increasing the costs which the appellant was ordered to pay. In those circumstances, I have considered whether the provisions of O 66 r 5(1) of the Rules of the Supreme Court should be invoked so as to require the trial counsel to show cause why they should not be made liable personally for the unwarranted costs.

74 However, as I do not know what advice was given to the appellant by his solicitor, or what instructions he gave, I think it would be inappropriate to inquire into the matter at this stage. I would prefer to leave it to the appellant to resolve the costs issue with his solicitors. If he is unable to do so, then the appellant may himself make an application under O 66 r 5.

75 The appellant's solicitors should be directed to send a copy of these reasons to the appellant under cover of a letter drawing attention to my comments in relation to costs.

76 EINFELD AJ: I agree with the reasons for judgment of Justice Templeman and with the order proposed.