Cohen v Morgans

Supreme Court of NSW|2019-07-05|Before: Ward CJ, Pembroke J

Background

As adverted to above, Mr Cohen is a solicitor (having been admitted in 1979). Since 1997 he has operated in sole practice. It is not disputed that he was retained by Mrs Morgans on various matters over the years, including in family law proceedings which Mrs Morgans had commenced against her then (now deceased) husband, Dr Morgans.

Mr Cohen's account of the background to the present dispute

A detailed account of the background to the present dispute was set out in Mr Cohen's affidavit sworn 14 December 2018 (Mr Cohen's first affidavit). Notwithstanding that large portions of that affidavit were not read (including portions relating to the background to the present dispute), submissions were still made in relation to those matters. It is convenient here to summarise that background as a record of Mr Cohen's submissions (without making any findings as to any disputed factual background matters to which Mr Cohen has there deposed since nothing turns on this).
Dr Morgans was an obstetrician and gynaecologist. It is submitted by Mr Cohen that, either directly or through corporate entities controlled by him, Dr Morgans had extensive interests in property and shares (comprising a substantial estate). It is also submitted that Mrs Morgans was Dr Morgans' "practice manager" and the carer for their two children.
According to Mr Cohen, Mrs Morgans first instructed Mr Cohen in or about September or October 2006. A few months prior to that, Dr Morgans had suffered a massive aneurysm (from which, it is submitted, he never recovered). Dr Morgans was immobile and unable to communicate for some ten years (passing away on 13 March 2016). Due to his disability after the aneurysm, a financial manager was appointed to Dr Morgans' estate - first, Mrs Morgans, and then Mr John Morgans (her brother-in-law).
Mr Cohen submits that initially, as already noted, Mrs Morgans retained Mr Cohen to assist her in family law proceedings which she had commenced against Dr Morgans but which were subsequently discontinued. Mrs Morgans then also instructed Mr Cohen with respect to the transfer of asset control to the then newly appointed financial manager of Dr Morgans' protected estate, John Morgans, and to assist her in all aspects of communication and liaison with all members of her husband's family.
Mr Cohen submits that (after the Family Court proceedings were discontinued) the remainder of 2006 was "taken up" by dealing with the provision to John Morgans of documentation pertaining to Dr Morgans' protected estate. It is submitted that, in the course of transferring the management of the protected estate, Mrs Morgans provided Mr Cohen with varied and detailed instructions regarding a multitude of issues. It is noted in Mr Cohen's submissions is that more than 40 archive boxes and other documentation relating to the affairs of Dr Morgans were delivered to John Morgans in November and December 2006. He says that the financial affairs and assets, both corporate and personal, of Dr Morgans and of a superannuation fund with its own asset portfolio controlled by Dr Morgans, were complex and "disparate".
By early 2007, Mrs Morgans sought to cause the termination and replacement of John Morgans' appointment as financial manager. Mr Cohen acted for Mrs Morgans in the proceedings she commenced for that purpose on or about 23 December 2007 against John Morgans. Mr Cohen has deposed that, following a contested hearing, orders were made by this Court on in 2008 appointing the NSW Trustee and Guardian (NSW Trustee) as financial manager of Dr Morgans' protected estate. (As noted below, there was later a dispute by Mrs Morgans with the NSW Trustee itself.)
Mr Cohen submits that, up to the death of Dr Morgans, Mrs Morgans engaged Mr Cohen to provide her with legal services and legal advice concerning "issues" requiring attention on an ongoing and active basis (and that she received that attention).
By way of example, in the outline of submissions, Mr Cohen says (at [21] that he provided advice on, or otherwise assisted Mrs Morgans from early 2007 and corresponded with the financial managers and others with respect to, the following matters: management of two large tracts of land at Lithgow of which Dr Morgans held a majority interest as a tenant-in-common with two others; recovering 13 different bank accounts from Mr John Morgans; "following up" on two different District Court debt recovery proceedings, both of which were undefended; the management of premises at Caringbah (the Caringbah premises) which had been tenanted to a major pathology company at the time of the transfer of financial management from Mrs Morgans to Mr John Morgans, and which was left vacant (first, by Mr John Morgans and then by the NSW Trustee) and which remained vacant, unattended and eventually, derelict and the home of squatters for a decade; a development at Narooma by way of a joint venture; the location of Dr Morgans' diverse and multiple shareholdings in Australia and overseas that were not managed by BT Australia; locating bank accounts overseas associated with Dr Morgans or entities controlled by him; communicating to John Morgans and the NSW Trustee Mrs Morgans' views about management and decisions of the above matters and other matters touching upon the protected estate; advising on and passing on the information and documentation that touched upon the financial management of the protected estate that reached Mrs Morgans at her several postal addresses or as she and Mr Cohen ascertained from time to time; the proposed sale of another property at the Kingsway, Caringbah (which it is said was proposed to be sold in 2011 at approximately 30% of its market value, giving rise to successful proceedings brought by Mrs Morgans in the Administrative Appeals Tribunal and the subsequent abandonment and dereliction of such property which had been tenanted and in good condition in 2006); a variety of other matters, including but not limited to a large parcel of shares and a vehicle held by Dr Morgans, pressed by Mrs Morgans to be held in trust by Dr Morgans' parents, a series of different disputes with the children's schools, pressing the financial managers to meet her expenses of living, year in and year out, and the costs of her children's private schooling and reinstatement of the $1000 per week, that Dr Morgans had given her for "housekeeping"; and, from September 2015 onwards, preparing for potential proceedings to remove the NSW Trustee as financial manager following its recovery of 13 bank accounts that it is said it had mislaid for nine years.
It is submitted that, over the period in which Mr Cohen was retained by Mrs Morgans, Mr Cohen generated files and records comprising about 30,000 to 40,000 pages; those records including correspondence, file notes, court and tribunal documents and documents relating to the shares, properties and other assets of the protected estate in the ongoing disputes with other members of Dr Morgans' family as to the treatment and care of Dr Morgans up to his death in 2016. Mr Cohen says that he provided Mrs Morgans with advice and assistance at all times ("commonly on a daily basis and commonly several times per day for long periods"); and that there were very few weeks when he did not have communication with Mrs Morgans.
In summary, Mr Cohen says that Mrs Morgans had a variety of concerns regarding the management of the protected estate by John Morgans; and that this led to ongoing disputes (and many court and tribunal proceedings, including a series of hearings in the Guardianship Tribunal), which involved not only John Morgans but also Dr Morgans' parents and other members of his family, including his ex-wife, relating to the care afforded to Dr Morgans at the Hospice where he resided. Mr Cohen says that he provided legal services and advice to Mrs Morgans on all such matters. He says that Mrs Morgans also had various ongoing disputes with the NSW Trustee over the years. It is said that Mrs Morgans consulted Mr Cohen frequently and "ongoingly" about those disputes; and it is noted by Mr Cohen that, as at the time of the hearing before me, there were currently proceedings in this Court between the NSW Trustee and Mrs Morgans.

Dispute as to legal costs

Mr Cohen deposes that when he first met with Mrs Morgans he disclosed to her his hourly rate of $350 per hour; and he deposes that, thereafter, when he billed her, he would generally issue discounted accounts by a "gratuitous" reduction of between $20 and $50 per hour, together with other gratuitous reductions without any request or prompting from Mrs Morgans (which he estimates amounted to discounts in the order of more than $6,000 (see his first affidavit at [13]).
Mr Cohen has deposed that in 2007 and 2008 he rendered invoices to Mrs Morgans for his work (up to November 2008), all of which invoices he says were accurately itemised in detail; and that, in return, Mrs Morgans paid him a total of $73,869.80 including GST (see his first affidavit at [41]). (He says that the balance of these accounts had remained unpaid as to about $63,000 until November 2017.)
Mr Cohen deposes that, by September 2008, it became apparent to him that Mrs Morgans was under financial pressure, which continued to be upon her for the next nine years, until (he says) he resolved a series of at least six different disputes with various family members in this Court in July and August 2017. It is said that this gave Mrs Morgans effective personal legal and equitable control and sole ownership over approximately $6,000,000 of assets, in addition to her home (see at [42] of his first affidavit).
Mr Cohen has deposed that he was not paid for any of the work he had undertaken for more than seven years between November 2008 and March 2016 until 4 November 2017 (see [46] of his affidavit) (and, as I understand it, he also says he was not paid for some of his work prior to November 2008); and he deposes to various conversations from time to time with Mrs Morgans as to his fees (see [43]-[44], [47]) and that, from time to time "certainly every Christmas when she visited [him] and [they] went over what had been and what was proposed to be, as she did that every year", Mrs Morgans often said to him (see at [49] of his first affidavit): I know I owe you a lot of money, but one day I will have control of David's estate or David passes away, and then I will pay you.
Mr Cohen also deposes to statements made by Mrs Morgans "often", in half a dozen or more discussions with Mrs Morgans, to the effect that Mrs Morgans would never put him through the substantial work it would take for him to itemise so much work over so many years (i.e., as would be required for a costs assessment process) (see [51] of his first affidavit).
As noted above, Dr Morgans died in March 2016. On 8 September 2017, Mrs Morgans received a Grant of Letters of Administration giving her control over her late husband's estate and effectively became his major beneficiary (see Mr Cohen's affidavit at [50]).
Mr Cohen deposes that in September 2017 he and Mrs Morgans agreed on a figure of $350,000 (which, he says, included a significant discount) in payment for the work he had carried out for Mrs Morgans up until March 2016 (for which he had not yet been paid); and that it was agreed that Mr Cohen would not need to provide her with an itemised bill (see Mr Cohen's first affidavit at [52]-[54]).
Mrs Morgans paid the amount the amount of $350,000 on 4 November 2017 (Mr Cohen's first affidavit at [56]). Mr Cohen had not rendered her an account at the time of payment.

Request for itemised bill/costs assessment

In about March 2018, Mrs Morgans terminated Mr Cohen's retainer and instructed Somerville Legal to act on her behalf. Mr Cohen has deposed that he was contacted on or about 20 March 2018 by that firm to inform him that they were instructed by Mrs Morgans, who disputed the payment of his costs from March 2016 onwards (Mr Cohen's first affidavit at [58]).
Mr Cohen deposes: that initially he was requested to deliver over his legal files; that he claimed a lien over his legal files until he had been paid for his two years' work between 17 March 2016 and 20 March 2018 (at [59] of his first affidavit); and that he was then asked to prepare an itemised account by 28 May 2018 (at [59] of his first affidavit). He deposes that, on 27 May 2018, he prepared an itemised bill for the costs incurred by Mrs Morgans in the period March 2016 to March 2018 and remitted that account to Somerville Legal (at [57] and [59] of his first affidavit). That bill totalled $109,975, inclusive of GST (and was later amended, when prepared at the request of Somerville Legal for a bill in assessable form, to an amount of $110,404). Mr Cohen has not received any payment with respect to that work or under that bill. (It is the claim for this amount that is said to have been compromised in August 2018 by the agreement the subject of the present dispute - see below; the terms of the alleged settlement also including an agreement not to pursue any costs assessment in relation to the fees the subject of the 2017 $350,000 payment.)
Between 15 June 2018 and 14 September 2018, Mr Cohen and solicitors at Somerville Legal, on behalf of Mrs Morgans, corresponded in relation to invoices issued by Mr Cohen to Mrs Morgans during the course of his retainer to act on her behalf. Mr Cohen says that in the course of those negotiations he made an oral offer to settle his claim for costs (at a reduced amount), which offer was rejected; and that a counter-offer was made to him, which he rejected (see his first affidavit at [61]).
On 18 July 2018, Somerville Legal informed Mr Cohen that Mrs Morgans required the itemisation of his work from 2008 until 2016 (payment for which had been received by Mr Cohen on 4 November 2017) to be provided by 8 August 2018; and also requested that he provide his 27 May 2018 bill (i.e., the then $109,975 bill) in assessable form. Mr Cohen responded by letter dated 23 July 2018, sent by email at 8pm that night, advising of his inability to comply with the time frame that had been set by Mrs Morgans (in part at least by reference to his ill-health at the time).
Pausing here, I note that tendered in Mr Cohen's case were parts of the annexures to Mr Gradidge's affidavit sworn 6 February 2019 that were not read in Mrs Morgans' case (as part of Exhibit B); comprising two separate groups of documents.
The first of those groups of documents comprises email communications in May 2018 in relation to the request by Somerville Legal for Mrs Morgans' files (after the change in retainer), which culminated in the request for a bill in assessable form in relation to the 27 May 2018 tax invoice; and includes a copy of a handwritten note appearing to record a conversation with Mr Cohen in which there is reference to acts of negligence, gross negligence and malfeasance that seems to refer (though this is not wholly clear) to the claims made in the proceedings in which Mr Cohen was acting for Mrs Morgans against either John Morgans or the NSW Trustee. (The relevance of those documents to the current application was not made clear to me.)
The second of those groups of documents relates to correspondence from June to July 2018 between Mr Cohen and Somerville Legal in relation to the proposed settlement of the costs dispute, in which issue is taken by Mr Cohen as to the impropriety of a proposal made to the effect that Mrs Morgans would not pursue a negligence claim against him if it were agreed that she not pay his costs. (Again, the relevance of this on the current application is moot, though it may well explain Mr Cohen's inclusion of comprehensive releases in the draft settlement deed - and the position taken by him that this was not simply a dispute as to legal costs.)

9 August 2018 letters proposing offers of settlement in relation to costs

On 2 August 2018, Mr Cohen emailed Mr Gradidge indicating that he was "still" prepared to have a meeting "or even a discussion" with a view to compromise on both sides to relieve the "impasse" (in relation to costs) (the word "still" being in the context, presumably, of the earlier discussions). The response to that, by email from Mr Gradidge on 8 August 2018, was that if Mr Cohen would like to make an offer to reduce his outstanding fees "then please do so in writing".
Mr Cohen duly did so, by email sent on 9 August 2018 at 6.45pm to Mr Gradidge and copied to Mr Ben Hemsworth (the managing partner at Somerville Legal to whom Mr Gradidge reported), attaching two letters, each dated 9 August 2018. Each letter contained an offer of settlement with detailed proposed terms and conditions.
The first letter, which is not here relevant, contained an offer to accept $99,000 in lieu of Mr Cohen's claim for costs, provided that payment be made within 14 days of the date of acceptance of the offer (which offer was expressed to be open to acceptance for six business days from delivery of the letter, failing which Mr Cohen indicated that he would proceed to costs assessment and that he intended to produce that letter as part of his application for costs assessment in the event of the "foreshadowed costs assessment proceeding").
In the second letter (the Second 9 August Letter), which was headed "Without Prejudice except as to costs", Mr Cohen put forward the following proposal: The conditions of my offer are: - firstly, I be provided with a Deed of Settlement which I shall draft at first instance; and - secondly, such Deed shall be executed in a form to my satisfaction and delivered executed by Mrs Morgans at the same time as I receive a bank cheque in my favour for the settlement moneys; and - the Deed shall acknowledge that Mrs Morgans has had the opportunity to take legal advice and from whom she took it, and that legal adviser shall be the witness to her execution of this Deed; and - it shall recite to the effect that having considered all matters, and that particularly, Mrs Morgans has raised and withdrawn an allegation of negligence that shall be identified in the recitals, the one that you have "no instructions upon at this time"; and - a blanket indemnity and undertaking not to make further claim or complaint upon me of whatsoever nature, in relation to any matter of whatsoever nature, professional misconduct whilst I was acting for her, excepted because I do not think it appropriate that Mrs Morgans should give up rights to any misconduct on my part; and - an undertaking from me to refrain from divulging my knowledge of Mrs Morgan's acts and omissions both whilst I acted for her and thereafter; and - I shall not be obliged to itemise work prior to March 2016; and - the Deed will oblige the parties to refrain from any costs assessment; and - payment be made within 14 days of the date of acceptance of this offer or within seven days of the delivery over by me of the Deed, whichever comes first (taking into account that if we cannot agree on the wording, which seems unlikely, the dispute will have not been resolved); and - I be provided with ample time to prepare the files to deliver them over, and the right to copy any document I do deliver over. In consideration of this, I am prepared to reduce my claim by two major aspects, the first being $50 an hour on my $350 an hour claim, to an amount of $14,091.50 and to waive my disbursements, amounting to $1900. This is a total compromise of $15,991.50 of the $110,404 of my claim. This would gratuitously and frankly, unfairly provide Mrs Morgans with a benefit of, including GST that would not be appendant, not only $17,590.65, but also a waiver of interest of a very few hundred dollars.
The Second 9 August Letter concluded as follows: As I have written to you contemporaneously [i.e., the first 9 August 2018 letter], I have prepared my claim for assessment and this proposal is open until I withdraw it and it shall be deemed withdrawn when I commence the foreshadowed Costs Assessment , or, alternatively, provided that at the time the payment of the settlement moneys be made, by making payment of a larger amount, particularly $92,813.35 plus the fees I have paid to the Supreme Court, the same offer as set out above plus reimbursement of that fee, will be open until 14 days after I have commenced the Assessment. I intend to produce this letter as part of my Application for Costs Assessment in the event of the foreshadowed costs assessment proceeding.
Pausing here, Mrs Morgans says that the key aspect of the Second 9 August Letter is the condition that "payment be made within 14 days of the date of acceptance of this offer or within seven days of the delivery over to me of the Deed, whichever comes first (taking into account that if we cannot agree on the wording, which seems unlikely, the dispute will not have been resolved)". Mrs Morgans says that the effect of that term, which she submits forms part of any subsequent agreement between the parties to settle the dispute and displays Mr Cohen's intentions, is that any such agreement would be subject to the execution of a deed (i.e., as I understand it, that this was a condition required to be satisfied before any binding agreement came into existence - not some kind of condition subsequent to an already binding agreement).

21 August 2018 telephone call

It is not disputed that on 21 August 2018, Mr Gradidge telephoned Mr Cohen at about 4pm. The parties to that conversation give competing versions of the conversation that then took place (see Mr Cohen's first affidavit at [65]-[66]; Mr Gradidge's affidavit sworn 6 February 2019 at [28]; and Mr Cohen's affidavit in reply sworn 9 March 2019 at [5]). There is no file note of the conversation (a matter with which Mr Cohen took issue in an earlier interlocutory stoush in this proceeding).
According to Mr Cohen's first affidavit (at [65]-[66]), at the beginning of the conversation there was the following exchange: Gradidge: Your first letter of offer of nine August is rejected and so is your second offer rejected, however, I am instructed to counter offer on the same terms as your second letter of 9 August, to settle all disputes for $80,000. [my emphasis; the italicised portion of this version of the conversation is disputed by Mr Gradidge] Cohen: So you are proposing to accept my second letter, the one proposing a settlement of about $92,000, only instead of that, your client is offering $80,000. Gradidge: Yes that's right. Cohen: I will need to think about that …[Mr Cohen says that he paused momentarily and then continued] No I don't, I'll accept that if that's what you're offering. Gradidge: I am. Cohen: Good. Done. So we are all settled. Gradidge: We are, Andrew. Cohen: Well that's a relief. This has been bothering me a lot. Frankly, I only wanted to finish Mrs Morgans' case against the NSW Trustee and Guardian and I am disappointed that I won't get the chance and now it's up to you. It's actually quite complex…
Mr Cohen says that at the conclusion of the call, he (Mr Cohen) said: Well I suppose that we should get about reducing this into writing, and I'm not sure when I can get to that, but I'll try to do it quickly and send you a rough draft and you can come back to me about that.
Mr Gradidge deposes in his affidavit (at [28]) that the conversation was to the following effect: Gradidge: I am instructed to reject your offer contained in your letter dated 9 August 2018. I am further instructed to make a counter-offer of $80,000 subject to a deed of settlement agreed between the parties. [my emphasis; the italicised words are disputed by Mr Cohen] Cohen: Ok, we have a deal. Gradidge: Great. Can you prepare the deed of settlement and release? Upon receipt I will review and seek instructions. Cohen: Yes I will. I will also make arrangements for the delivery of Mrs Morgans' files to your office. Gradidge: Thank you.
Mr Gradidge deposes that Mr Cohen then continued the conversation and discussed his views (for some 50-55 minutes) on Mrs Morgans' potential claim against a third party.
In his affidavit in reply, Mr Cohen denies (at [5]) that he and Mr Gradidge had a conversation in the precise terms as set out in Mr Gradidge's affidavit at [28]. Mr Cohen reiterates his version of the conversation (as set out above) and states that he has a clear memory of the conversation. Mr Cohen "unequivocally" denies that Mr Gradidge stated the words "subject to a deed of settlement agreed between the parties" and also "unequivocally" denies that Mr Gradidge said "any like words to that effect" in their conversation.
Thus, on Mr Cohen's version of the conversation, there was an express reference by Mr Gradidge to the terms of the Second 9 August Letter and, according to Mr Cohen, Mr Gradidge made the counter-offer (to settle the matter by Mrs Morgans paying Mr Cohen $80,000) "on the same terms as your second letter of 9 August". Mr Gradidge's affidavit contains no express reference to the 9 August Letter. However, as I understand her submissions on the present application, Mrs Morgans does not dispute that the proposed agreement under contemplation during the 21 August 2018 telephone call was an agreement intended to be based on the terms of the Second 9 August Letter.
Mrs Morgans argues that the position reached during the 21 August 2018 telephone conversation was simply that there was agreement about the quantum (i.e., $80,000); and that both parties were in agreement that a written document was to be prepared.

Correspondence in relation to draft deeds of settlement

From 22 August to 10 September 2018, there was correspondence between Mr Cohen and Mr Gradidge in relation to a draft deed of settlement. In all, there were some seven versions of this document (an aide memoire as to the various iterations of the proposed deed clauses being handed up by Senior Counsel for Mrs Morgans on the present application).

First version - 22 August 2018 (Cohen)

The first version was a document prepared by Mr Cohen. It was forwarded as an attachment to an email sent to Mr Gradidge on 22 August 2018 at 9.20pm with the subject header "RE: Morgans & Cohen in furtherance of settlement agreed on 210818" and included the following: I note that we have, yesterday, reached agreement that, in the main, is that I shall lift my lien and deliver over documents within 28 days from payment in full of all my claims of $80,000 including GST. I note the settlement to be a compromise of $30,404 on my part and unspecified compromise on your client's part. As agreed, I proffer a draft Deed intended to reduce to writing, such agreement is intended to embody all the nuances of and discussions points, I thought to be appropriate in the context that I did write to you about the terms of any agreement, similarly to the attached draft 9th instant. Upon perusal of the draft, I hope you shall concur that it does embody the agreement and settlement achieved yesterday. Please phone to discuss any amendments so as to facilitate expedition and conclusion. [my emphasis]
The first version of the draft deed of settlement included a series of recitals (A-E), including reference to a "series of matters of contention" between the parties "which have been resolved upon the terms and conditions comprising the agreement set out in this Deed" (Recital C). The draft made provision for the payment of the agreed amount payable "in relation to the matters of contention" and for the delivery of documents. The draft contained a definition of the commencement date (being the date when the agreement is signed by all the parties thereto) and the completion date (being the date upon which the releasee is to give over the documentation required to be delivered). It included an agreement that Mrs Morgans not require any claim for costs (whether past or present and whether paid or unpaid) to be assessed and for the withdrawal of any such past requirements or requests (see cl 3); and for certain releases in favour of Mr Cohen (see cl 9), though excluding certain matters. The draft also contained an acknowledgement by the releasor (Mrs Morgans) as to the opportunity of taking legal advice before entering into "this Deed and the agreement embodied herein" (see cl 10).
On 23 August 2018 at 7.55am, Mr Cohen forwarded a "different version, same wording exactly, reformatted" of the first version of the draft settlement deed. (I treat this as the same version for the purpose of enumerating the different iterations of the draft settlement deed.)

Second version - 28 August 2018 (Gradidge)

Mr Gradidge then responded on 28 August 2018, attaching a second version of the draft deed, in respect of which he said he had "condensed a lot of the information in the interest of making the deed clear". His email contained the same subject header reference (in exactly the same terms and formatting, from which I infer that this was a reply to the earlier email; not a subject header typed in afresh by Mr Gradidge). The so-called "condensed" second version of the draft deed (seemingly prepared from a document drafted for a different matter - since the coversheet records two completely different entities as parties) sets out a shorter version of the recitals, including (Recital D) that the parties, without admission, have agreed to settle the Dispute (defined as any dispute between Mr Cohen and Mrs Morgans in relation to Legal Services provided by Mr Cohen to Mrs Morgans but not including any dispute or allegation of professional misconduct) "in the manner set out in this Deed". (For Mr Cohen, it is said that this definition of Dispute reflects the terms of the Second 9 August Letter - which it does.)
The second version of the draft deed provides for settlement on the basis of payment of the amount of $80,000 in full and final payment of all moneys owing in respect of legal services within seven days of the date of the Deed and the provision by Mr Cohen of the entire legal file (see cl 2.1; with mutual releases and indemnities (cl 3); and other provisions (including a plea in bar (cl 4), confidentiality provision (cl 5), covenant not to sue (cl 6), warranties and assurances (cll 7 and cl 11) and various boilerplate provisions). There is no express reference to withdrawal of any costs assessment requirements; nor is there any acknowledgement of the opportunity to receive or receipt of, legal advice as were contained in the first version of the draft.

Third version - 29 August 2018 (Cohen)

The third version of the draft settlement deed was sent by Mr Cohen to Mr Gradidge by email on 29 August 2018 at 9.47pm; Mr Cohen having explained, in an email sent a mere minute before that, his position as to certain provisions of his draft of the deed but omitting to attach the draft. Included in that explanation, was the following: [T]hank you for your draft. I thought it to be necessarily complex but you have chosen to redraft it. However, by reason of the complexity brought on by your client's request for itemisation and her negligence claim, no longer press [sic], but providing an history that I cannot ignore, it has been necessary to embody a certainty on my part, that your client both warrants and be discourage [sic] from breaching any warranty that might arise from any request for itemisation. …
It would seem from the above that there was a concern on Mr Cohen's part that Mrs Morgans might press for a costs itemisation request at a later date even after settling the then costs dispute. Mr Cohen insisted upon his "new clause 10" (see below) and said that: I am being brutally honest here, that I am concerned that the redraft a [sic] deed you made, took out a lot of the protections I believe I might need. I say that in the context of both what your client has instructed you to allege against me, and what she has required of me, knowing full well that I could not do itemisation of 11 years of work in 21 days, and I know we have settled and that is past tense but I want it to remain that way, that I don't have to itemise my work … ever. … Even though we have settled, this reduction to writing of our settlement is not easy for either of us, but I am keen to bring this to a conclusion ASAP as I thought that by now, I would already be into the 28 day period …[It is not clear to what the 28 day period Mr Cohen was there referring]
That third version was an amendment to Mr Gradidge's draft (the second version) using Mr Gradidge's format for the deed; and, apart from a deletion to the costs clause (cl 9), it added a new cl 10 ('Further Warranties and Obligations and Acknowledgements'), including as to the benefit or opportunity to obtain legal advice (in effect reviving the earlier similar provision in Mr Cohen's first version), and an acknowledgement that each party is not relying on any representations, information or advice which may have been given by or on behalf of the other party.

Fourth version - 30 August 2018 (Gradidge)

The fourth version of the draft settlement deed is the version emailed by Mr Gradidge on 30 August 2018 to Mr Cohen (again with the exact same subject header and about which I draw the same inference - which I note because when the matter was later before the costs assessor Mr Cohen in his submissions emphasised the "subject header", in effect as an acknowledgement or admission of the existence of an agreement). In the email, Mr Gradidge states: Please find attached final copy of the Deed. I have accepted your changes and just adjusted the formatting. Please confirm the deed is acceptable.
No little significance is placed on this email by Mr Cohen (as to which see further below). In this version, what is now numbered cl 3.4 is in substance the same as what appeared as cl 3.2 in the second version (prepared by Mr Gradidge) and, relevantly unchanged, as cl 3.3 in the third version (prepared by Mr Cohen) (except that it there include the words "that is not specifically warranted" at the end). It provides that: As a separate obligation, each Party indemnify and shall keep indemnified every other Party in respect of any action, demand, notice, claim, suit or proceeding made in any jurisdiction relating to, arising out of, incidental to, or connected with the matters set out in the Recitals to this Deed and/or the Dispute but does not include any dispute or allegation of professional misconduct that is not specifically warranted.
Clause 3.2 (of the fourth version) repeated Mr Cohen's clause for a warranty not to take action or continue the dispute as to the request for provision of itemisation of the legal services which had been introduced in the third version; cl 3.3, introduced into the fourth version, contains a further warranty in relation to any complaint in relation to any such request for itemisation of legal services.
Pausing here, insofar as Mr Gradidge asked Mr Cohen to confirm that "the deed is acceptable", it is submitted by Mr Cohen that it was perfectly reasonable for Mr Cohen to have proceeded on the basis that Mrs Morgans had accepted this (i.e., the fourth) version of the deed and that Mr Gradidge was acting on instructions from her to provide the deed, in that "final" form, to Mr Cohen for his consideration. (The significance of the reasonableness or otherwise of such an assumption to the determination of the issue at hand is not apparent.)

Fifth version - 30 August 2018 (Cohen)

On 30 August 2018 at 7.57pm, Mr Cohen produced a further version of the draft deed (the fifth version), in which he deleted cl 3.4 as it then stood and attached a revised draft of that clause by way of replacement, saying that: My changes are cosmetic for clarity and are in red HOWEVER I had a particular problem with clause 3.4 - mea culpa, and so I have provide [sic] what I think we both meant in green colour to replace that clause, which is, to my mind, unless replaced as I suggest (with my explanation to you inserted as to why it could mess up the whole deed) but basically because it is not appropriate for Mrs Morgans nor for me. Let's talk about it on the telephone if you don't think I've got the replacement clause 3.4 right.
The revised draft of cl 3.4 was introduced with the words: I have no idea what this means, MEA CULPA because of inconsistency arising if we kept it in, as it is way too broad, Matthew, given that I have already, in cl 3.1 given up any claims for further costs, then the $80,000, so I think it best that we replace it with: Morgans indemnifies Cohen with respect to any of Cohen's loss or damage or reasonable expenditure of legal costs with respect to any Claim or action or demand or suit or proceeding or allegation made in any jurisdiction relating to the provision of legal services by Cohen to Morgans, such loss or damage or reasonable expenditure of legal costs with respect to any professional misconduct by Cohen, excepted", and if so with the other changes I am good with his version, Matthew, given that you have already covered Mrs Morgans very thoroughly. I just can't make claim on Mrs Morgans for costs, once I am paid $80,000. If you're not happy, let's talk rather than exchange emails … . [emboldened text highlighted in green in the original]
At this stage, therefore, it is evident that Mr Cohen has not agreed that the version sent to him by Mr Gradidge on 30 August 2018 (as a "final") was acceptable to him - since he is here putting forward a change thereto.

Sixth version - 31 August 2018 (Gradidge)

On 31 August 2018, Mr Gradidge sent to Mr Cohen by email at 9.21am (still with the same subject header on the email) a sixth version of the draft deed, saying Can we just remove 3.4 all together? You have indemnities in clause 4 so it's a duplication. See attached further amended deed.
That version simply deletes cl 3.4 of the earlier (fourth and fifth) versions. Relevantly, it is this (sixth) version of the deed that Mr Cohen signs and returns on 10 September 2018 (see below). (Mr Cohen notes that Mr Gradidge's email of 31 October 2018 makes apparent that, in his view, there was no need for cl 3.4 in light of the indemnities in cl 4.)
Mr Cohen's response to this sixth version, by email at 11.24am on 31 August 2018, was that he preferred that cl 3.4 stay in the deed. He said: The indemnity in clause 4 is pretty specifically strong to protect me from anything to do with itemisation. The clause 3.4 that I proposed yesterday protects me in relation to other matters outside that particular area, I prefer if it stayed in, please. I won't repeat my other comments about it from yesterday, but I want to feel safe to defend myself by instructing lawyers to do that for me, if your client should breach the agreement and I think that gives me that stop [sic] it won't hurt your client if she does not breach the agreement. Her resources are much more than mine and I need to be able to confidently match anything that she does wrong. If she doesn't, because won't matter. It is also a discouragement to her. I have asked to discuss this on the phone, please Matthew … It will save some time surely.
Pausing here, in submissions on the present application it was submitted for Mr Cohen that the 31 August 2018 version of the draft settlement deed (the sixth version) was a version that had neither been rejected by Mr Cohen nor withdrawn by Mr Gradidge (see T 3.33; 4.4). I accept that in terms the above email is not a rejection as such; rather, it is a statement of Mr Cohen's preference that cl 3.4 remain in the deed (that clause having been removed by Mr Gradidge in the sixth (31 August 2018) version). Nor was there later any express "withdrawal" of that draft version by Mrs Morgans (although it is difficult to see the submission of the draft deed as some form of irrevocable offer; or even as some form of offer capable, on acceptance, without more, of bringing into existence an immediately binding agreement - see further below).

Subsequent communications

At 3.13pm on the same day, 31 August 2018, Mr Cohen emailed Mr Gradidge: I would like to reach agreement on the wording today. That way I could print it out and sign it and get it witnessed and we might then proceed early Monday, in the context that I live and work alone at present and there is no one nearby most days of the week, but with the weekend coming up I could get over that problem very quickly. I did try to call you to discuss not long ago.
Mr Cohen sent an email at 6.31pm on 3 September 2018 (the following business day, a Monday) stating: [W]e are so very close to agreeing on the wording of the settlement Deed. So, I expected to hear from you, both last Friday and again today. I understand that your August 31 draft is your preference. I also understand that you are providing me with a belief that both parties want the protection that we don't do the wrong thing, viz: neither of us. I'm just sure that my redraft the same day, 30 August, is not suitable for both Mrs Morgans' and my own similar needs, so that neither of us can get out of line and embark upon the wrong thing, but if so, both of us are protected to the nth degree in that unlikely event. If you should disagree such that my redraft of 30 August doesn't do that, please just call and talk to me about it, as I might not be seeing something that you can see that doesn't sit well with Mrs Morgans' position. I look forward to your call, Matthew.
The last two emails appear to acknowledge that there was not at that stage an agreement as to the wording of the draft deed but, again, I accept that there is not there an express rejection of the 31 August 2018 draft (nor is it necessarily the case that there was an implied rejection of that draft or any offer comprised by the proffering of that draft as there would arguably be if a further version of the draft deed had been put forward by Mr Cohen at that stage).
Mr Gradidge's response, by email on 4 September 2018 at 12.50pm, was that he was in the process of seeking instructions; that he intended to meet with his client on Thursday or Friday that week; and that he would respond thereafter.
Mr Cohen's response to that, sent on the same day at 3.48pm was, relevantly, …Given that we have settled, it is not necessary at all for you to bring in Mrs Morgans. So long as I am not nervous about the drafts, I want to bring this to conclusion ASAP and so, whatever version you have instructions upon, more than likely, we can settle with that. I assume you had instructions last week. I don't want to put Mrs Morgans to any trouble or concern and ESPECIALLY I DON'T WANT HER TO BE PUT TO ANY FURTHER EXPENSE, given that we have settled. … [my emphasis]
The next communication was from Mr Cohen by email on Monday, 10 September 2018 at 4.19pm. In that email (after referring to the expectation that Mr Cohen would have heard from Mr Gradidge on Thursday or Friday last, and that he had called on Friday afternoon around 4.50pm to see what was happening but Mr Gradidge was not available) it was said that: The last thing you wrote me about the draft deed (No 3 that you drafted) was that my proposed clause 3.4 was unnecessary, and although I would prefer it, as I wrote to you, I just want to finish this so, the last version that you submitted where you had deleted my proposed 3.4, is still acceptable to me, and for certainty, and to show my good faith and reliability on this, [my emphasis] I attach that document that you drafted, with the wording unchanged in any place whatsoever, and the only change being to accommodate my signature on every page to confirm that this is the version that you proposed that I accept, unconditionally. So I presume that we are good to go. [emboldening as per original] I understood that your client was very keen to complete this, and for my own reasons, given that I will have 28 days to prepare to deliver over the documents, and because I am moving my office in the week at the end of the month, unfortunately I shall have to transport all the boxes of documents from my Potts Point location to my new office at Glebe. So there will be an hiatus in practice of a few days from about 21 September to 26 September, next, inclusive, presumably within that 28 day period. So, practically speaking, that intervening gives me less than 28 days because there will be the practicalities of moving the massive files after they have been prepared and collated for your client's convenience, ready for pickup at Glebe. So, what's happening at your end, Matthew?
The version executed by Mr Cohen on 10 September 2018 (strictly speaking, the seventh version) was the version submitted by Mr Gradidge on 31 August 2018 (the sixth version as referred to above) but with the following variations: on the first page, after the word "Details", Mr Cohen added in red the words: "(acceptable draft of settlement deed drawn by Somerville Lawyers)" (presumably, only a descriptive addition); and Mr Cohen affixed his signature to each page of the document (thereby, it is said by him, confirming his acceptance of the deed).
Mrs Morgans, in her written submissions, argues that the version of the draft deed that Mr Cohen (unilaterally) executed on 10 September 2018 was one that had already been rejected by Mr Gradidge (he having emailed a "further sixth version" of the draft deed to Mr Cohen on 31 August 2018 at 9:21am that deleted the contested cl 3.4 on the basis that it duplicated cl 4). However, what was emailed at that time was (on my enumeration of the draft iterations of the deed) the sixth version itself. This submission appears to confuse the document that Mr Cohen had signed. What Mr Cohen in fact signed was the version that omitted cl 3.4 altogether (i.e., the document that Mr Gradidge had sent to him on 31 August 2018). In those circumstances, the submission for Mrs Morgans that Mr Cohen had rejected that version (and therefore brought that "offer" to an end) by putting forward the 30 August 2018 version (relying on what was said in Nationwide News Pty Ltd v Vass [2018] NSWCA 259 at [52]-[54] per McColl JA) cannot be sustained. The document signed by Mr Cohen was not in my opinion one that had been clearly rejected as such (there simply being a stated preference in Mr Cohen's email - see [66] above - to retain cl 3.4).
On 12 September 2018, Mr Cohen emailed Mr Gradidge at 6.34pm, stating that: The urgency you put on this finalisation of our settlement, has been the subject of reasonable and reliable response. [I do not understand what this is meant to convey since the only urgency that seems to have been put on "finalisation" of the "settlement" was that conveyed by Mr Cohen] Your most recent version of the Deed of Settlement is the document I agreed to and have not challenged, and is ready to be executed and yet, for three days you have not responded as I had expected this would be resolved last Thursday or Friday, and have written to you about this already as below. … The settlement agreed on August 21 is going very slowly towards completion. … [my emphasis]
On 13 September 2018, at 10.18pm, Mr Cohen again emailed Mr Gradidge and complained that: It has now been 10 days since I heard from you, and that last communication was, either obfuscation or inaccurate. With all due respect, I request a comprehensive response and progress towards finalisation of the settlement reached. … [my emphasis]
On 14 September 2018, Mr Gradidge informed Mr Cohen by email that the terms of the Deed of Settlement "were never agreed and the matter has not settled"; and that Somerville Legal was instructed to proceed to cost assessment of Mr Cohen's tax invoices.
Mr Cohen's response, on 19 September 2018, was to assert that a concluded settlement was reached and that the form of the deed "is and remains agreed upon, which form was the form and wording provided to me as "final", as attached and as confirmed unequivocally by [him]" and to advise that he was looking forward to execution of that deed "in furtherance and finalisation of the agreed settlement reached on August 21". Reference was made in that context to the decision of Bergin CJ in Eq in "Laziridis [2010] NSWSC" [sic].
Mr Cohen has deposed that on 19 September 2018 he had a telephone conversation with Mr Ben Hemsworth (the principal of Somerville Legal) in which Mr Hemsworth said that it was his opinion that Mr Cohen had reneged on the "settlement" reached on 21 August 2018 and Mr Cohen denied that this was the case (see [83] of Mr Cohen's first affidavit). (Mr Hemsworth was not called to give evidence on the current application.)

Lodgement of application for costs assessment

I understand that on 14 September 2018 (i.e., the day that Mrs Morgans informed him, via her solicitor, that she denied that the matter had settled) Mrs Morgans lodged an application for costs assessment of Mr Cohen's $350,000 tax invoice.
On 18 October 2018, the parties were informed of the appointment of a costs assessor (Ms K Young) and of the steps for the costs assessment to be progressed.
On 19 October 2018, Mr Cohen forwarded to Mr Gradidge and Mr Hemsworth a letter, by email headed "Without Prejudice Except as to Costs", reiterating his view that there was a concluded settlement on 21 August 2018; foreshadowing proceedings for enforcement of the settlement and the "final" deed; and making an offer of settlement, expressly invoking the Calderbank principles (Calderbank v Calderbank [1975] 3 All ER 333; (1975) 3 WLR 586), of $75,000: … in lieu of the $80,000 the subject of the settlement that continues to bind Mrs Morgans in accordance with the terms of and the agreement embodied in the deed you called "final" embodies in the "Morgans & Cohen in furtherance of settlement agreed on 210818" correspondence including your email by which your client purported to renounce the settlement and pressed that she was not bound by it, albeit under that same unequivocal heading.
That letter made various assertions (perhaps in terrorem) as to the scrutiny of Mrs Morgans' instructions, and of her acts and omissions, that it was said would inevitably arise in one or both of the Supreme Court proceedings that Mr Cohen then foreshadowed he would be bringing (i.e., the present proceedings) and the (costs) assessment that Mrs Morgans had instituted); and set out various matters into which enquiries might be made.
On 27 November 2018, the costs assessor, Ms K Young, directed Mr Cohen to provide a taxable bill and his files relating to his work for Mrs Morgans, over the period from 2008 to March 2016, by no later than 31 January 2019.

These proceedings

On 14 December 2018, Mr Cohen commenced these proceedings and applied for urgent injunctive relief, in effect to stay the costs assessment process that was then underway. That application came before Pembroke J in the duty list that day. His Honour granted the injunction, giving a short ex tempore judgment, in which his Honour made the following observations (on which, at least when Mr Cohen was representing himself in an earlier interlocutory application before me in this matter, Mr Cohen placed considerable store): More significantly, the plaintiff says that the assessment is unnecessary because a binding agreement was reached between him and the solicitor then acting for the defendant. The evidence suggests that there may be force in this proposition. It seems unlikely that an experienced solicitor like the plaintiff would prepare and issue a draft agreement in the form that was prepared without there having been a reasonable factual basis for doing so. If a court finds that the agreement was made, then the assessment will be unnecessary. The agreement provides for a settlement of the disputes between the parties in relation to the plaintiff's costs by the payment of $80,000. I was told that if there were to be a complete and thorough assessment, then when that process is finalised it may well be that a much larger amount, perhaps as much as $350,000, is found due to the plaintiff. The defendant should carefully consider the course on which she has embarked. The interests of the parties and the interests of the administration of justice favour a resolution of this dispute as soon as possible.
His Honour also expressed the view that the costs assessor should be given a copy of the orders and reasons (having made certain observations about the inappropriateness of her conduct).
Pausing here, Senior Counsel for Mrs Morgans objected to the inclusion of the ex tempore reasons for judgment in the court book and submitted that there was no relevance of that judgment to the issues now for determination. I agree. The observations made by his Honour at the time of granting the interlocutory injunction staying the costs assessment process are in my opinion irrelevant to the determination of the present application. His Honour was surely not there purporting to make (nor could he reasonably be understood as making) any finding as to the contested matters presently in dispute; at most, his Honour was expressing a preliminary view.
Relevantly, his Honour's observation as to the likelihood that a solicitor would prepare and issue a draft agreement in the form Mr Cohen did without a reasonable factual basis for so doing, with respect, begs the critical question here as to whether the parties' common intention, objectively ascertained, as at the time of the telephone conversation on 21 August 2018, was that the parties were immediately to be bound by any agreement found to have been reached in that conversation in the absence of exchange of executed settlement deeds (the way that Mr Cohen's primary case is put) or as to whether the unilateral execution by Mr Cohen of the sixth version of the draft settlement deed, coupled with the earlier telephone conversation, gave rise to a binding agreement as at that stage (10 September 2018) (the way that Mr Cohen's alternative case is put). It also appears to assume that Mr Cohen's version of the 21 August 2018 telephone conversation is accepted (to the extent that there is a difference between Mr Cohen's version and that of Mr Gradidge), when that factual issue was not ventilated before his Honour.

Credibility of the witnesses

Each of Mr Cohen and Mr Gradidge was cross-examined as to his account of events and, in particular, as to his recollection of the 21 August 2018 telephone conversation. Both parties in closing submissions suggested that their version of the conversation should be accepted (although for Mrs Morgans it was suggested that there was in fact very little between the two versions and her primary position was that there was no need to make any finding as to whose version of the conversation was to be preferred).
What emerged very clearly during the course of Mr Cohen's cross-examination was that he has a particular view as to the terminology or phraseology deployed in the draft documents prepared by him, and as evidenced in his correspondence. (He described himself, at one stage, as "old school" - in contrast with Mr Gradidge, who is much younger than him.) Senior Counsel for Mrs Morgans characterised the legal language deployed by Mr Cohen as opaque and unclear (T 19.35). Whether or not that be an accurate characterisation (and see, for example, the cross-examination as to the email communication of 22 August 2018 at T 29.19), is not necessary here to explore. Suffice it to note that Mr Cohen placed emphasis on the distinction between acceptance of an offer (which is what he maintains - and what Mrs Morgans does not, as I understand it, dispute - occurred during the 21 August telephone call) and the reduction to writing of an agreement constituted by acceptance of an offer (see at T 43.30-40).
See for example, the cross-examination as to what was meant by the expression, in the first of the conditions to the Second 9 August Letter, of "I be provided with a deed of settlement" (from T 22.10): Q. You say, firstly, "I be provided with a deed of settlement". Now, just so we are not working at crossed purposes, I take it you meant by that expression a legal document which formalised an agreement between the parties to a dispute? A. As an interpretation there, just a deed reflecting an agreement, a reduction of writing of an agreement is what I intended to write. You said formalisation, well formalisation of an agreement, yes. Q. And formalisation of an agreement between parties to a dispute? A. Yes. Q. In relation to this letter of the 9th. It says ‑ there is nothing necessarily so far as I can see in this letter itself which indicates how the reader is to accept what you have set forth here, correct, as in all your terms. It doesn't say "please accept this or reject it by writing" or any other way, correct? A. Well I make an offer. Q. Just so I understand it, if I had received this, and I rang you up and I said to you "Andrew, I have got your letter, I accept it", what was supposed to happen next? A. Well we were to supposed to embody a reduction into writing of an agreement but the terms of an offer when put are, if accepted, they are accepted. Q. No, if I rang you and said "I've got your letter, that looks all right. I accept everything you've said in there", the next thing that would have to happen is a document would have to be produced, would that be correct? A. It would have to be produced but the document itself isn't the settlement. An offer and an acceptance can be reduced to writing but an acceptance of an offer is an acceptance of an offer.
In that last answer lies the crux of Mr Cohen's position, as I apprehend it. He maintains that the oral acceptance by him of the offer put to him in the telephone conversation by Mr Gradidge gave rise to an immediately binding agreement and that what happened thereafter was simply the documentation (or recording) of that agreement. While there is no doubt that it is possible for an oral offer and acceptance to give rise, without more, to a binding and enforceable agreement (even where the parties contemplate that it will later be documented in writing and that such written agreement may contain other or different terms - see Masters v Cameron, what Mr Cohen was unable satisfactorily to explain (as I consider in due course) is how such a position would be consistent with the statement also contained in his Second 9 August Letter that "if we cannot agree on the wording the dispute will not have resolved". See, for example, Mr Cohen's answer at T 23.49: A. Yes, but in the event that we could agree on the wording. You see, when you have an offer and an acceptance and an agreement, sir, there is the situation where someone can write back and change things. I've been offering and accepting things on the phone many times but you're suggesting that I was saying that this was conditional and I am joining issue that there was any condition on this agreement other than that there would be the exchange of documents with a view to reducing it into writing.
What Mr Cohen considered was being negotiated in relation to the draft versions of the settlement deed seems not to have not the "agreement" as such (which he considered had already been reached in the telephone conversation) but simply the form in which it was to be agreed that it would be expressed (see T 25.4): Q. In relation to the deed of settlement, it was intended to contain a number of releases, is that correct? A. In the forms we were negotiating on and going backwards and forwards, when I say "negotiating", we were just trying to work out what it was that would satisfy both of us that the agreement had been reduced to writing, but yes, yes, otherwise, yes. (That distinction is difficult to maintain when one considers the substance of the clauses there being negotiated - in particular, the draft releases.)
Mr Cohen was adamant that he had been the one to proffer responsibility for drafting the deed and that this occurred at the end of the discussion (see T 26.15): Q. Now, of course, there is competing versions of that discussion that you set forth and Mr Gradidge has set forth. Can I suggest or put to you this? That in your version of the discussion there is no specific mention of a deed, is there? A. Well, it was a long discussion. The deed came up after I'd spoken for a very long time with Mr Gradidge. Q. Well. A. When you say the deed, I actually recall ‑ the only discussion about a deed was, after the very end of the discussion, I said: "I'll knock something up tomorrow Matthew or may be the next day. I'm kind of busy at the present time". And there was no mention of any deed until the very end of the conversation. If that's mention of the deed, I just said, "I would knock something up".
Mr Cohen denied that Mr Gradidge had suggested or asked him to prepare the draft deed but said he had proffered that (see T 27.24): Q. What I'm suggesting to you, in the conversation, Mr Gradidge says to you: "Can you prepare the deed of settlement and release?" And you respond the next day, on 22 August, when you emailed him after the conversation, you specifically refer to what he said to you by saying the words: "As agreed, I proffer a draft deed". That's the proposition I'm putting to you. Do you accept that? A. I agree that I said that. I said, "I proffer a draft deed" because I said I'd knock something up, basically, and I was reducing this into writing. I was agreeing to the fact that I put my hand up first to draft the document to see what he thought about the reduction into writing, Mr Sirtes.
Mr Cohen's email of 22 August (see above) said "[a]s agree, I proffer a draft deed". However, Mr Cohen denied that Mr Gradidge had said that his offer was subject to a deed of agreement being agreed (T 27.49). At T 28.1, there was the following exchange: Q. But whether he said them or not, the fact is you well understood that a deed of settlement had to be prepared, didn't you? A. I knew that we were going to reduce the agreement into writing. That was the plan. But that was possibly going to give rise to a dispute if the agreement didn't embody what was in the deed that was proffered was relevant to what we'd agreed. That is what we agreed to do; is to reduce our agreement into writing. And I was first cab off the rank, Mr Sirtes. I volunteered, at the end of this conversation, long after we'd settled.
Mr Cohen seems to have contemplated (inconsistently, as I see it, with the expressed condition that in that case the dispute "will not have resolved") that if agreement could not be reached on the documentation of that agreement, there would still be a binding agreement based on the conversation of 21 August 2019 (see from T 35.23ff): Q. You want the certainty of a clearly written out, signed document that was a repository of whatever settlement that you reached with Mrs Morgans, correct? A. I would have liked that. But I had settled. Q. Well. A. And I was prepared to rely on the settlement, if we didn't agree on the wording. Because I had settled. And I didn't want a further furtherance of dispute with Mrs Morgans. I was really keen to resolve the dispute with Mrs Morgans, and I didn't want anything further happening. I reached the agreement, and I wrote this deed in the hope that that would be satisfactory to all concerned. And it was a draft, and it provided protections to Mrs Morgans and it provided protections to me, and that was my intention. … Q. I take it step by step. Let's go to your second full paragraph on page 460? A. Yes. Q. You say: "Mike, and the conditions of my offer are". Now, what you intended to convey by that statement was that your offer was conditioned upon the satisfaction of the content that you set forth in those ten dash points? A. Yes. My satisfaction. Yes. Q. Yes. And that required the execution of a document? A. Not necessarily. Q. Which part of those dash points is the 'not necessarily' or the optional part? A. The bit about how the wording would need to be agreed upon to my satisfaction. [my emphasis] Q. When you say to your satisfaction, can I just take you to the second last bullet point? You say: "Taking into account if we cannot agree on the wording". The "we" wasn't the Royal we, I take it? You were referring to the inclusive concept of you and my client, correct? A. That's right. Q. So, there had to be a consensus reached about the wording, correct? A. No. No. If we were to reduce it to writing, there had to be a consensus. Or, look. If I'm offered a deed which says "Oh, it doesn't say 80,000". It says "79,000" or it says "I will pay you in 2020", and that's the sort of world I'm dealing with, that was what I was addressing. That possibility. Q. But that would have meant that you and my client would be in disagreement, correct? A. It would be disagreement as to the wording of the reduction into writing. Nothing more. Nothing less. Q. And the consequence would be the dispute would not have been resolved? A. The dispute would have been changed from what it had been to a dispute over not agreeing on the reduction in writing as to what the settlement was. It would have changed the whole thing. We would have been arguing over what we appear to be arguing over now. $80,000.
I set out the above exchanges not because Mr Cohen's (or indeed either or both of the witnesses') subjective understanding of the arrangements discussed (or reached) between them is determinative but, rather, because the cross-examination of Mr Cohen demonstrated to me the ample scope for the legal representatives involved in the discussions to have been (as I consider they most likely were) at cross-purposes as to what was being offered, and what was purportedly being accepted, in the course of the 21 August 2018 telephone conversation; particularly having regard to what then followed (and it was accepted by Counsel for Mr Cohen that regard can properly be had to the evidence of subsequent conduct in determining whether agreement was reached in the telephone conversation - see T 4.46).
Mr Cohen's position (and I consider it to have been a genuinely held view) is encapsulated in the following exchange (see T 40.9): Q. Now, when you say in the answer you just gave that as, you and Mr Gradidge, you weren't reaching something, what you weren't reaching was an agreement in relation to the form of the release. Were you? A. Yes. But we were working towards that. That's what one does when one swaps drafts. I've been doing it, like you said, for four decades. If one writes something that didn't fit with the settlement, or doesn't satisfy, you talk about it. You discuss it. That's why they're drafts. If I had thought we were negotiating a settlement, I would have thought differently. Very, very differently. But we had a settlement, and we were just trying to reduce it into writing. [my emphasis]
Similarly, I considered Mr Cohen to be genuine in his expression of bewilderment at the position that the parties were in by 10 September 2018 (see at T 49.35; T 50.19) (just as I accept that he has firm views as to the assistance he provided to Mrs Morgans and the righteousness of his position in relation to the costs dispute). Dogmatic as Mr Cohen was in the witness box, I considered him to be telling the truth as he perceived it.
Turning to Mr Gradidge, the solicitor who was employed by Somerville Legal at the time but is no longer with that firm, I formed the view that he was a sincere witness. He was firm in a matter of fact way in his denial that he had said to Mr Cohen that he was instructed to make a counter-offer on the same terms as the Second 9 August Letter (see T 57.47); he said there was no discussion of the contents of either of the 9 August letters in his conversation with Mr Cohen; and he was firm in his recollection that he said the counter-offer was subject to a deed of settlement being agreed between the parties (T 58.4ff). That evidence was plausible; as was his explanation that he found the conditions the subject of the Second 9 August Letter offer to be "very unclear" (T 58.48).
Mr Gradidge's recollection was that the discussion about a draft deed was at the outset (not at the end of the conversation) and that he had asked Mr Cohen to do that (and then the next 50 to 55 minutes were about gross negligence on the part of a third party - see T 59). He readily accepted that there had been an allegation of negligence made against Mr Cohen but his recollection was that he had been instructed to respond that it was not being pressed (T 60.25) and his understanding was that the issue was simply a dispute as to a monetary amount (see T 61.6; T 61.35ff).
Nothing about Mr Gradidge's evidence caused me to doubt that his was a genuine recollection of the relevant events - albeit that I consider that it is likely that there were issues on which he and Mr Cohen were at cross-purposes. That seems to me to be illustrated by the emphasis placed by Mr Cohen on the negligence allegations made against him (evident from the draft releases sought by him although he did not appear to accept that this was an important issue in the witness box) as opposed to the apparent lack of emphasis placed by Mr Gradidge on that issue or other issues unrelated to what he evidently saw as a discrete costs dispute (evident by the dismissive reference to a discussion of about 50 to 55 minutes about gross negligence without any reference to the content of that discussion).
It was submitted for Mr Cohen that his version of the critical conversation should be preferred (T 66.10) because he has a clear and definite recollection of the conversation whereas there was said to be some ambiguity in Mr Gradidge's evidence as to whether Mr Gradidge intended to make a counter-offer only as to legal costs or more broadly.
I do not accept that submission. Mr Cohen's self-professed clear memory of the conversation is consistent with his dogmatic (somewhat didactic) approach to the giving of his evidence but does not of itself make that version the more likely. Mr Gradidge's evidence as to the ambit of the dispute being sought to be resolved by the offer seems to me to be consistent with what the immediate issue then was - the dispute as to the costs assessment process. In any event, I place more weight on the contemporaneous documents than the witnesses' present recollection of past events (unconsciously influenced as one or both might be by what is or might be thought to be supportive of that side's case).
I accept that both Mr Cohen and Mr Gradidge were giving their best recollection of the critical conversation and I make no credibility findings adverse to either of them.

Issues

Turning then to the issues for determination, it is necessary to keep in mind the alternative cases put forward by Mr Cohen: namely, the principal case that there was a binding agreement formed on 21 August 2018 in the telephone conversation with Mr Gradidge (for the payment by Mrs Morgans of the sum of $80,000 in final settlement of the dispute as to legal costs - such agreement to be reduced to writing but not conditional on that); and, in the alternative, that there was a binding agreement formed by the conversation coupled with the execution of the 31 August 2018 version of the draft settlement deed and submitted by email by Mr Cohen on 10 September 2018 (or, further, in the alternative, that the provision on 31 August 2018 of the sixth version of the draft settlement deed was itself an offer capable, on execution of the document, of giving rise, without more, to an immediately binding agreement).
As to the alternative case in its primary iteration, it is said for Mrs Morgans that there is no identification of when the contract is said to have been formed (i.e., on 21 August or on 10 September 2018). It is argued that if it was formed on 21 August then it is not able to be differentiated from the agreement the subject of prayer 1(a) in the prayers for relief (and the 10 September 2018 email must be an irrelevance); whereas, if it is argued that the agreement was formed on 10 September 2018 (being the date that Mr Cohen unilaterally signed the 31 August version of the deed), then it is said for Mrs Morgans that it is difficult to understand how a unilateral execution of a document (that she says was rejected by her) has created any contract. As I understand it, on Mr Cohen's first alternative case, the argument is that the contract came into existence on 10 September 2018 but that the terms of the earlier (21 August) conversation inform how it is that the unilateral execution of a document could rise then and there to a binding agreement.

Mr Cohen's submissions

As adverted to above, Mr Cohen submits that a binding agreement was reached between the parties having regard to the contents of the Second 9 August Letter and the conversation with Mr Gradidge on 21 August 2018 (and, in turn, the provision of an executed deed of settlement sent by him).
Mr Cohen argues that the offer contained in the Second 9 August Letter (to settle the costs disputes with Mrs Morgans for the sum of $92,813.35 subject to the stated conditions) was: made in the context of negotiations between the parties; made on terms that were specific and detailed; and, as framed, contemplated finalisation of the costs disputes between Mr Cohen and Mrs Morgans.
It is said that the discussion on 21 August 2018 stemmed from the Second 9 August Letter. Mr Cohen says that Mr Gradidge rejected the amount of $92,813 but offered to settle for $80,000 on the terms otherwise in the Second 9 August Letter. Although this aspect of Mr Cohen's evidence (that the counter-offer was expressed to be on the terms in the Second 9 August Letter) was denied by Mr Gradidge in cross-examination, Mr Cohen points out that, in his affidavit sworn 6 February 2019, Mr Gradidge does not deny this aspect of Mr Cohen's evidence.
Mr Cohen contends that it was not a condition of the Second 9 August Letter that any agreement reached be subject to a deed that was acceptable to both parties. Rather, he maintains, the only relevant condition was that a deed be prepared and executed in a form to his satisfaction.
Mr Cohen notes that a valid contract may be entered into notwithstanding that all terms have not been finally agreed, citing Thorby v Goldberg (1964) 112 CLR 597; [1964] HCA 41 (Thorby v Goldberg)) where (at 605) Kitto J said: ….But an agreement is not void for uncertainty because it leaves one party or group of parties a latitude of choice as to the manner in which agreed stipulations shall be carried into effect, nor does it for that reason fall short of being a concluded contract. Nothing is here reserved for determination by future agreement of the O and the G Groups. They have agreed upon all that they intend to be the subject of agreement between them. The case of Loftus v Roberts [(1902) 18 T.L.R. 532], which was much pressed upon us, has no application here. It decides only that where words which by themselves constitute a promise are accompanied by words which show that the promisor is to have a discretion or option as to whether he will carry out that which purports to be the promise, the result is that there is no contract on which an action can be brought. Such a situation does not exist in the present case.
Mr Cohen argues that, in the present case, there was no discretion of the type referred to by Kitto J in the passage extracted above from Thorby v Goldberg (referring also to Axelsen v O'Brien (1949) 80 CLR 219; [1949] HCA 18 (per Latham CJ at 224-225 and per Dixon J at 226) and Kids for Life v Chamberlain Group [2014] NSWSC 1561 at [123] and the cases cited therein). It is noted that, provided that there has been a manifestation of mutual assent, a concluded agreement can exist (citing Ormwave Pty Limited v Smith [2007] NSWCA 210 at [87] citing Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106 at 178 per Tadgell J).
Mr Cohen argues that, consistently with the condition in the Second 9 August Letter that a deed be prepared and executed in a form to Mr Cohen's satisfaction, a deed was prepared and executed by Mr Cohen (once he was satisfied with its contents). It is said that his signature is compelling evidence of an intention to be bound by the contents of a document (see Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52 (Toll v Alphapharm) at [45]-[46]).
Mr Cohen maintains that the exchange of different versions of a deed after 21 August was consistent with the condition in the Second 9 August Letter requiring a deed to Mr Cohen's satisfaction and says that the solicitors were working towards a draft that Mr Cohen was happy with in circumstances where there was an agreement to settle the dispute.
Emphasis is placed on the fact that, in Mr Gradidge's own words (on 28 and 30 August 2018), he was seeking that Mr Cohen confirm that the deed sent on behalf of Mrs Morgans was "acceptable" to Mr Cohen. It is said that the execution of the deed first by Mr Cohen was also consistent with the Second 9 August Letter (which required execution of the deed by Mrs Morgans at the same time she provided the cheque for the settlement moneys).
Pausing there, there was some inconsistency between the Second 9 August Letter offer and the drafting of the initial version of the deed (about which Mr Cohen was cross-examined at T 32ff) insofar as the commencement date in the first draft was defined as the date the agreement was signed; the date of payment was to be seven days after the commencement date; but the completion date was defined as the date on which the documentation was to be delivered and that was to be within 28 days of receiving final payment; whereas in the Second 9 August Letter the deed was to be executed in a form to Mr Cohen's satisfaction and delivered at the same time as he received a bank cheque for the settlement moneys (see the second condition) and payment was to be within 14 days of acceptance of the offer or within seven days of delivery over by Mr Cohen of the deed, whichever came first. Mr Cohen's recollection in the witness box was that he had to be paid within 14 days or within a week (T 32.43) but then he said that he was not sure that this (the Second 9 August Letter offer) "wasn't intended to be just a draft" (a reference I think to the draft of the settlement deed, not the offer as such, though that evidence was not wholly clear).
Mr Cohen submitted (invoking the observations made by Pembroke J to which I have earlier referred) that it was hardly the case that he would have sought to prepare a deed as he did and submit it to Somerville Legal on 22 August 2018 if there were doubt about the settlement of the matter. (As adverted to already, that seems to me to beg the question as to whether or not there was an objective common intention immediately to be bound by the acceptance of the oral offer as the conduct of drafting and submitting a settlement deed would be consistent either way.)
Mr Cohen denies Mr Gradidge's claim that, on 21 August 2018, he told Mr Cohen that his counter-offer was "subject to a deed of settlement agreed between the parties" and argues that this evidence is implausible. It is submitted that, noting that the discussion occurred in the context of the offer in the Second 9 August Letter (which included specific and detailed terms), and the context borne out by the correspondence between the parties, on an objective view, it is highly unlikely that Mr Cohen would simply agree to settle the matter not knowing what conditions might be included in the deed. (Again, that begs the question as to whether or not the intention at the time of the conversation was immediately to be bound. There is no such implausibility, for example, if what was agreed was understood to be an in principle agreement, subject to later agreement as to the precise terms to be incorporated in a deed to govern the arrangements between the parties.)
Mr Cohen's position is said to be reinforced by the fact that Mr Hemsworth (the managing partner of Somerville Legal) appeared later to have accepted that the parties had settled the matter (in the conversation to which Mr Cohen has deposed in his first affidavit at [83] and his second affidavit at [42] and Annexure B thereto - see at 80] above) but, again, that depends on how one understands what would reasonably have been conveyed by the reference to the "settlement" in that telephone conversation.
Mr Cohen disputes Mr Hemsworth's contention that he "reneged" on the agreement. It is said that, instead, the evidence suggests that, having sent a "final" version of the Deed on 30 August 2018 to Mr Cohen, Mrs Morgans has sought, subsequently to change her mind and renege on the agreement that had been reached between her (though her solicitors) and Mr Cohen.

Mrs Morgans' submissions

For Mrs Morgans, this dispute is characterised quite simply as a Masters v Cameron dispute, where the relevant question is did the parties reach a binding agreement to settle a dispute between them on either of the occasions identified in the summons. Mrs Morgans maintains that, on the facts, this is a "class three" Masters v Cameron situation in which no binding agreement came into force because it was the parties' intention that any agreement be enshrined in writing.
Mrs Morgans contends that, as a matter of substance, Mr Cohen and Mr Gradidge were in agreement that any agreement was subject to the execution of a written document. It is noted that Mr Gradidge, on his version of the conversation, said that the offer was "subject to a deed of settlement agreed between the parties"; whereas Mr Cohen, on his version of the conversation, said that Mr Gradidge says the counter-offer is made "on the same terms" as Mr Cohen's Second 9 August Letter. It is submitted that, although expressed slightly differently, in substance the conversation was the same; namely that, in order to consummate an agreement, a document would need to prepared and agreed upon by the parties. (Indeed, as already noted, Mrs Morgans' submissions included the proposition that a key aspect of the Second 9 August Letter did form part of the contractual framework (see [39] above).
It is said that the parties did not intend themselves to be immediately bound following the 21 August 2018 telephone call, but only on the execution by both of them of a mutually satisfactory deed. It is said that the fact that the agreement was at all times "subject to a deed" follows from the entire course of events between the parties, comprising the Second 9 August Letter, the 21 August 2018 telephone conversation, and the parties' conduct subsequent to the alleged settlement.
Mrs Morgans' principal position, therefore, is that, on either party's versions of the disputed conversation, the substance remains the same. However, it is submitted that if there is a substantive difference, then Mr Gradidge's account of the conversation should be preferred. It is said that his reference to the settlement of the matter being "subject to a deed of settlement agreed between the parties" is consistent with both the terms of the Second 9 August Letter (which Mr Cohen himself drafted), and the parties' subsequent conduct, in particular, in exchanging and negotiating draft deeds and in Mr Cohen's fresh attempt to settle the dispute on different terms in October 2018.
Mrs Morgans seeks a finding that it was the parties' intention to become bound only upon the execution of a written agreement. In that regard, it is submitted that, on Mr Cohen's own case, he accepted an offer made by Mr Gradidge which incorporated, by express reference, the terms of Mr Cohen's Second 9 August Letter; and the Second 9 August Letter imposed a "subject to contract" condition.
In support of her contentions, Mrs Morgans makes the following submissions:
First, and I consider there to be force to this submission, Mrs Morgans argues that the conditions of the Second 9 August Letter envisage that the deed shall be the operative document, not the letter of offer. This is said to be evident from the fact that the bulk of the conditions refer to what the deed shall say or do, and that some conditions are expressed such that the deed is the operative source of the obligation (for example, the eighth condition, which states that "the Deed will oblige the parties to refrain from any costs assessment"). Further, it is noted that the execution of the deed is an operative event (since the payment of the settlement sum is to accompany execution of the deed (third condition) and the execution of the deed is to be witnessed by a legal advisor (fourth condition)).
Mrs Morgans points to the fact that the conditions contemplate the occurrence of events that had not then occurred, including the provision of legal advice (presumably, including advice on the suitability of the proposed settlement), and the withdrawal of an allegation of professional negligence that was then pending (see, in particular, the third and fourth conditions).
Mrs Morgans contends that the conditions expressly state that the proposed deed would not merely evidence an agreement as between the parties, but rather would be a condition precedent to it coming into existence (referring to the tenth and final condition, which was in the following terms: "payment be made within 14 days of the date of acceptance of this offer or within seven days of the delivery over to me of the Deed, whichever comes first (taking into account that if we cannot agree on the wording, which seems unlikely, the dispute will not have been resolved)".
Second, Mrs Morgans submits that the subject matter of the agreement required careful wording in terms of releases and the like; and that it was not a straightforward matter of Mrs Morgans simply paying some money. It is said that the draft deeds following the 21 August 2018 telephone call made that clear. It is submitted that this is not a case where there is a preliminary document (such as a heads of agreement) followed up by a detailed document; and that neither party ended that telephone conversation on 21 August believing that anything more was agreed than the quantum which Mr Cohen was content to accept. It is said this is corroborated by Mr Cohen's email of 22 August 2018 where he states that: "I thought to be appropriate in the context that I did write to you about the terms of any agreement, similarly to the attached draft 9th instant".
Third, it is submitted that the character of the parties is also relevant to determining intention. It is noted that Mr Cohen was a solicitor; and that he did not conduct himself "by casual means" in his correspondence with Somerville Legal; rather, it is said that he plainly wanted the dispute with his former client to reach a definite end (something he does not dispute) and that the mechanism for achieving that finality was in the details of the deed which were not, as yet, agreed (something he does dispute). It is submitted for Mrs Morgans that Mr Cohen spelt this out in his Second 9 August Letter in saying that: "if we cannot agree on the wording … the dispute will not have been resolved".
Fourth, it is said that Mr Cohen's own conduct displays that he did not believe that a settlement had been reached on 21 August 2018 (or, for that matter, 10 September 2018); noting that Mr Cohen later attempted to settle the dispute afresh by the letter to Mr Hemsworth on 19 October 2018 (in which he asserts that there was a settlement on 21 August 2018 but proceeds to attempt to settle the dispute in October on terms different than the terms of the alleged 21 August 2018 settlement which were less favourable to Mr Cohen). (Pausing here, it is difficult to place any weight on this subsequent Calderbank offer - in my opinion it is not inconsistent with there having been a belief on Mr Cohen's part as to binding agreement to accept the sum of $80,000 that, in face of a subsequent denial by Mrs Morgans of such an agreement, there would be a further attempt to resolve that dispute by accepting a lesser amount.)
Fifth, the parties' conduct after the 21 August 2018 telephone call is said to be highly probative as to the parties' intentions, objectively construed, at the time they are said to have concluded a binding agreement. It is noted that evidence of conduct subsequent to the time at which the parties are said to have formed a binding contract is admissible on the question of if and when a contract was in fact formed (reference being made to Barrier Wharfs Ltd v W Scott Fell & Co Ltd (1908) 5 CLR 647 at 668-669; [1908] HCA 88, Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 at [85], Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; [2009] NSWCA 407 at [13]).
Mrs Morgans notes in this regard that, following the 21 August 2018 telephone call, the parties exchanged seven draft deeds of the proposed settlement; those draft deeds covering the negotiation of a range of terms. Mrs Morgans points to the facts that: there were significant changes from the first to second version of the document (including the removal of much of the boilerplate language and its replacement by different language, numbered clauses, and in many cases the omission of matters that had been the subject of the first version of the draft deed); there were further significant changes from the second to third version of the document, including the insertion of a significant amount of detail in respect of a number of clauses that were absent from the second version of the draft deed, including amendments to definitions, mutual releases and indemnities, warranties and bars); and there was significant and ongoing negotiation as to mutual releases, indemnities and warranties in all versions of the draft deed, continuing up until the fifth and sixth versions of the document, in which the parties were in dispute over draft cll 3.4 and 4 on that question (referring in particular the exchange of emails from 30 August 2018 onwards). Mrs Morgans maintains that the evidence establishes that Mr Cohen viewed the deed not as a formality but rather as the operative document.
It is also submitted that Mr Cohen's emails to Mr Gradidge between 31 August and 14 September 2018 reflect an increasing urgency on Mr Cohen's part to finalise the terms of the deed (referring to the emails of 31 August 2018, 4 September 2018, 10 September 2018 and 13 September 2018 in this regard).
Mrs Morgans argues that the fact that Mr Cohen placed such emphasis on the execution of the deed (after the 21 August 2018 telephone call had taken place; and in some cases after he had unilaterally executed the 10 September 2018 deed) is persuasive evidence that the parties did not consider themselves bound by any agreement then in existence. In this respect, the situation is said to be analogous to that considered in Eckford v Six Mile Creek Pty Ltd [2019] FCA 982, in which Jagot J noted (at [24]): … If it had been intended that the acceptance of the offer would immediately bind the parties then there would have been no urgency to the signing, sealing and delivering of the Deed of Settlement and Release because the parties would have been bound immediately on acceptance of the offer … .
Sixth, noting that "Mr Cohen is a solicitor with 33 years' experience in general practice", it is submitted that the fact he considered it necessary to make a further offer to settle his claim on less favourable terms, six to eight weeks after the alleged settlement, is strong objective evidence that he did not consider himself entitled to enforce any more favourable binding settlement with Mrs Morgans; and that so too is the fact that Mr Cohen sought to bring back into play issues that had (on his case) been resolved in the dispute (including his obligations of confidentiality in respect of Mrs Morgans' conduct whilst she was his client). (As noted already, I do not place any weight on this factor, which seems to me equally consistent with a view that there was already a binding agreement as with a view that there was not.)
As to the alternative basis on which the alleged agreement is pressed, as already noted, it is said by Mrs Morgans to be unclear when such an agreement is said to have been created in the presence of two different events (the 21 August 2018 call and the 10 September 2018 execution by Mr Cohen of the sixth version of the draft deed). However, I understand the argument for Mr Cohen to be put as follows: that there was a binding agreement reached by acceptance of the offer put orally in the telephone conversation (and not conditional on agreement being reached as to, and the execution of, a formal document recording that agreement in writing, though it was contemplated that there would be such a document; at most being conditional on the provision to Mr Cohen of an agreement satisfactory to him); and, in the alternative, if the oral agreement was found to be conditional on the signing of a written agreement, the execution of the 31 August 2018 version of the draft settlement deed by Mr Cohen was sufficient to satisfy that condition (because the Second 9 August Letter provided for provision of a deed satisfactory to him and his execution of it, unilateral though it was, evidences that the deed was satisfactory to him or because the proffering of the sixth version was itself an offer capable of acceptance, by execution of the deed and its return, of giving rise to a binding agreement).
Mrs Morgans says that what appears to be contended is that a conditional agreement was reached on 21 August 2018 that, once a deed was created that satisfied Mr Cohen (and him only), the condition subsequent to the 21 August 2018 agreement was satisfied and the agreement then came into effect; and that Mr Cohen must therefore contend that, from the 21 August 2018 call onwards, the purported settlement was always binding as against Mrs Morgans but not as against him. It is said that this is the only way it is possible to conceive of a situation in which Mr Cohen's unilateral execution of a draft settlement deed could effect a mutually-binding settlement; and that to make good that contention, not only must Mr Cohen establish that Mrs Morgans was immediately bound on and from 21 August 2018, but that she remained so bound even if Mr Cohen had in fact already decided that particular draft of the deed he later sought to execute was not in fact to his "satisfaction".
Mrs Morgans argues that Mr Cohen's alternative case cannot succeed: that either the parties intended to be immediately bound by the 21 August 2018 call or they intended to be bound by the due execution of a mutually agreed deed; and that there is no possibility of a 'hybrid' arrangement in the manner that Mr Cohen's alternative case contends. It is said that if Mr Cohen's argument were to be correct, then it would mean that the day after the 21 August 2018 call he could have written almost anything down on a bit of paper and then contended that the agreement was consummated (as only he needed to be satisfied of the terms).

Relevant principles

There was no real dispute as to the applicable legal principles when determining whether or not a binding agreement exists. Reference was made by Mr Cohen to the decision in Michael Lahodiuk v Vincent Pace and Prid Pty Ltd [2013] NSWSC 512 at [13]-[23] in that regard.
Whether parties intend to be bound to a contract is determined objectively, and their intention is construed from their words and conduct (see Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 548-9) (see also Allen v Carbone (1975) 132 CLR 528; [1975] HCA 14; Taylor v Johnson (1983) 151 CLR 422;[1983] HCA 5; Toll v Alphapharm; Byrnes v Kendle (2011) 243 CLR 253; [2011] HCA 26).
The intention of the parties is also to be ascertained objectively from the terms of the document construed in the context of the surrounding circumstances (Electricity Generation Corporation v Woodside Energy Limited (2014) 251 CLR 640; [2014] HCA 7 at [35]; Pavlovic v Universal Music Australia Pty Ltd (2015) 90 NSWLR 605; [2015] HCA 313 at [64]-[65] per Bathurst CJ).
Reference was made to Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35, where the High Court said (at [22]): The construction of the letters of indemnity is to be determined by what a reasonable person in the position of Pacific would have understood them to mean. That requires consideration, not only of the text of the documents, but also the surrounding circumstances known to Pacific and BNP, and the purpose and object of the transaction. In Codelfa Constructions Pty Ltd v State Rail Authority of NSW, Mason J set out with evident approval the statement of Lord Wilberforce in Reardon Smith Line Ltd v Hansen-Tangen: "In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating." [footnotes omitted] and to International Air Transport Association v Ansett Australia Holdings Ltd (2008) 234 CLR 151; [2008] HCA 3, where the High Court said (at [8]): In giving a commercial contract a businesslike interpretation, it is necessary to consider the language used by the parties, the circumstances addressed by the contract, and the objects which it is intended to secure. An appreciation of the commercial purpose of a contract calls for a understanding of the genesis of the transaction, the background, and the market. This is a case in which the Court's general understanding of background and purpose is supplemented by specific information as to the genesis of the transaction. The Agreement has a history; and that history is part of the context in which the contract takes its meaning. [footnotes omitted]
See also The Interpretation of Contracts in Australia (K Lewison and D Hughes (2012, Thomson Reuters)) at [3.14.15] where, in the context of discussing the admissibility of background evidence, the authors state that: ...the relevant background consists of facts that were actually known to both (or all) parties to the contract, or that are sufficiently notorious that it can be presumed they were so known. Facts which were known to only one of them will not be relevant. Nor is it sufficient to prove that facts were reasonably available, without demonstrating that their availability should lead to an inference being drawn that they were in fact known by both parties. It is, of course, the case that facts which were not known to either party at the date of the contract are not relevant to the construction of the contract, for if the facts were unknown they cannot have played any part in forming the presumed intention which is embodied in the contract. However, where a fact is known to one party and not to the other, in theory it may well have played a part in forming the intention of the party who knew that fact. However, unless a fact is known to both parties, it will not be admitted in evidence, because the court is seeking not the actual intention of one party to the contract, but the presumed mutual intention of both of them. [footnotes omitted]
Construction of a document may make it sufficiently clear that the parties were content to be bound immediately by the terms to which they had agreed, notwithstanding they contemplated further documentation (Masters v Cameron at 360; Anaconda Nickel Ltd v Tarmoola Pty Ltd (2000) 22 WAR 101; [2000] WASCA 27 at [21] per Ipp J). A relevant consideration in relation to the parties being immediately bound may be that the agreement was reached in the context of a mediation in relation to outstanding litigation (Geebung Investments Pty Ltd v Varga Group Investments No 8 Pty Ltd (1995) 7 BPR 97,578).
In Masters v Cameron at 360-362, Dixon CJ, McTiernan and Kitto JJ identified three classes of situation in which parties have agreed terms of a bargain between them in circumstances where a formal contract is to follow: Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three classes. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract. In each of the first two cases there is a binding contract: in the first case a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document; and in the second case a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution. […]. Cases of the third class are fundamentally different. They are cases in which the terms of agreement are not intended to have, and therefore do not have, any binding effect of their own. [citations and footnotes omitted]
Their Honours went on to state that, in determining whether or not the parties have concluded a binding agreement "(t)he question depends upon the intention disclosed by the language the parties have employed, and no special form of words is essential to be used in order that there shall be no contract binding upon the parties before the execution of their agreement in its ultimate shape" (at 362, citing Farmer v Honan (1919) 26 CLR 183; [1919] HCA 13). The words '"subject to contract", "subject to the preparation of a formal contract", and "expressions of similar import" prima facie create an overriding condition, so that what has been agreed upon must be regarded as the intended basis for a future contract and not as constituting a contract (Masters v Cameron at 362-363).
Further, in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 at 628, McLelland J said: There is in reality a fourth class of case additional to the three mentioned in Masters v Cameron, as recognised by Knox CJ, Rich J and Dixon J, in Sinclair, Scott & Co v Naughton (1929) 43 CLR 310 at 317, namely, "… one in which the parties were content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms". Their Honours refer to the speech of Lord Loreburn, in Love & Stewart v S Instone & Co (1917) 33 TLR 475 at 476, where his Lordship said that: "It was quite lawful to make a bargain containing certain terms which one was content with, dealing with what one regarded as essentials, and at the same time to say that one would have a formal document drawn up with the full expectation that one would by consent insert in it a number of further terms. If that were the intention of the parties, then a bargain had been made, none the less that both parties felt quite sure that the formal document could comprise more than was contained in the preliminary bargain."
As McHugh JA, as his Honour then was, said (Kirby P, as his Honour then was, and Glass JA agreeing) in GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631 (at 634): … the decisive issue is always the intention of the parties which must be objectively ascertained from the terms of the document when read in the light of the surrounding circumstances: Godecke v Kirwan (1973) 129 CLR 629 at 638; Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 at 332-334, 337. If the terms of a document indicate that the parties intended to be bound immediately, effect must be given to that intention irrespective of the subject matter, magnitude or complexity of the transaction. Even when a document recording the terms of the parties' agreement specifically refers to the execution of a formal contract, the parties may be immediately bound. Upon the proper construction of the document, it may sufficiently appear that "the parties were content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms": Sinclair, Scott & Co Ltd v Naughton (at 317).
McHugh JA also there said (at 635-636): Under the agreement each party was obliged to do all that was necessary on his part to enable the other party to have the benefit of the agreement concluded by the correspondence: Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 607. This included doing everything necessary to enable contracts to be exchanged by 18 April 1986: Godecke v Kirwan (at 641). If the parties agreed on additional terms, they would be added to the formal contract. If they did not, the formal contract would give effect only to the agreed terms and conditions of the correspondence. The case, therefore, is one where the parties were bound by the informal agreement but expected to make a further contract which by consent might contain additional terms: Sinclair, Scott & Co Ltd v Naughton (at 317).
In Pan American World Airways Inc v Commonwealth of Australia (1977) 7 BPR 97,629, the Court observed that "the subject matter of the contract or the character of its parties or of a party may be such that a formal written contract offers such advantages as against a less formal agreement that, when it appears that the parties in fact contemplated the execution of a formal contract, is inherently unlikely that they mutually intended to bind themselves by some earlier informal consensus" (as quoted in OXS Pty Ltd v Sydney Harbour Foreshore Authority [2016] NSWCA 120 per Macfarlan, Gleeson and Leeming JJA at [80]).
For Mrs Morgans it is said that in cases falling within the first two categories described by the High Court in Masters v Cameron, it is clearly expected that further negotiations will take place with a view to including additional, and more comprehensive, provisions in the document ultimately to be formalised between the parties (Nurisvan Investment Ltd v Anyoption Holdings Ltd [2017] VSCA 141 at [107] per Osborn, Santamaria and Kaye JJA); and that, in relation to the third class of Masters v Cameron, it must be clear that there is a "mutual intention of the parties not to be bound until a binding written agreement is made" (Crossco No. 4 Unlimited v Jolan Ltd [2012] 2 All ER 754 at [108]).
See also the cases where an agreement provides that it will not be effective until another agreement is signed (identified as another example of the so-called "third class") (see [3.150], fn 116 in Heydon on Contract; on p 97). At [3.150], it is said that "a variant of the third class arises whether parties seek to agree on the main terms, and proceed to negotiate other terms on agreeing the main terms. There is no concluded agreement until all terms are agreed, and before then there is "no intention to create legal relations" (Manatee Towing Co v OceanBulk Maritime S A (The "Bay Ridge") [1999] 2 Lloyd's Rep 227 at 242).
That said, even though the parties intend that their arrangements will be reflected in a formal contract, an agreement may be inferred from the circumstances before that formal contract is made (Smit International Singapore Pte Ltd v Kurnia Dewi Shipping SA [1997] 1 Lloyd's Rep 552 at 559-560). Mr Cohen notes that in Godecke v Kirwan (1973) 129 CLR 629 at 639; [1973] HCA 38, Walsh J said that an agreement which obliges a subsequent agreement to be entered into may contain covenants for example in the new agreement not included in the original contract. Walsh J accepted that there was no reason in principle for holding that there cannot be a binding contract even if some matter is left to be determined by one of the contracting parties (accepting Powell v Jones [1968] SASR 394).
In John Holland Pty Limited v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 Hammerschlag J relevantly summarised the principles applicable to proof of oral contracts (as I noted in Anthony v Morton [2018] NSWSC 1884 at [398]), stating (at [94]): Where a party seeks to rely upon spoken words as a foundation for a cause of action, including a cause of action based on a contract, the conversation must be proved to the reasonable satisfaction of the court which means that the court must feel an actual persuasion of its occurrence or its existence. Moreover, in the case of contract, the court must be persuaded that any consensus reached was capable of forming a binding contract and was intended by the parties to be legally binding. In the absence of some reliable contemporaneous record or other satisfactory corroboration, a party may face serious difficulties of proof. Such reasonable satisfaction is not a state of mind that is obtained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question of whether the issue has been proved to the reasonable satisfaction of the court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony, or indirect inferences: see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; Helton v Allen (1940) 63 CLR 691 at 712; Rejfek v McElroy (1965) 112 CLR 517 at 521; Watson v Foxman (1995) 49 NSWLR 315 at 319.

Determination

At the outset, I note that I consider there is force to the submission for Mrs Morgans that there is little in substance that differs between the respective versions of the 21 August 2018 telephone conversation. On both versions of the conversation, relevantly, the parties contemplated there would be a deed entered into by the parties. If, as Mr Cohen contends, the counter-offer was put as being "made" on the same terms as the Second 9 August Letter that simply reinforces the requirement for a deed.
If it were necessary to determine that factual issue, I would have found Mr Gradidge's account to be objectively the more plausible - for the reason that the terms of the Second 9 August Letter are not pellucid and it seems far more likely, as a matter of both common sense and prudent legal practice, for both legal practitioners to have been careful to document in writing the terms of any agreements reached between them before committing clients (or in Mr Cohen's case, himself) to the inherent uncertainty of the enforceability of oral agreements. I accept as credible Mr Gradidge's evidence that he accepted that the terms of the Second 9 August Letter were not very clear. That makes it objectively unlikely that he would expressly have couched a counter-offer by reference to them. That said, it is also not implausible that Mr Cohen's mind during the course of the conversation was focussed on the terms that he had set out in that letter and he may well have understood that to be the focus of the counter-offer that was being put to him (hence the scope for the two to have been at cross-purposes here).
Ultimately, in my view, it is not necessary finally to determine whether the counter-offer was expressed to be on the same terms as the Second 9 August Letter (which I think unlikely on the balance of probabilities), since it is accepted by Mrs Morgans that the counter-offer which was made by Mr Gradidge was made in the context of that earlier offer and it was contemplated (on both versions of the conversation) that there would be a settlement deed prepared.
Particularly in the present case, where there had been accusations of negligence and impropriety going back and forth between the legal practitioners, and where there had been a process of negotiation that was already underway, I consider that it does not make sense for the legal practitioners to have intended there to be a binding agreement absent the executed written document that both contemplated was to be prepared.
Had that been the intention it would have been a simple matter to have included a clear statement to that effect (for example, along the lines: for the avoidance of doubt it is the intention of the parties immediately to be bound by an acceptance of this offer irrespective of the intention later to reduce the agreement to writing) and to have made it clear how the offer was to be accepted. No such statement appears in the Second 9 August Letter; nor is such a statement clearly made on either version of the 21 August 2018 telephone conversation. True it is, that neither is there a statement clearly pointing to the position for which Mrs Morgans now contends (which would also have been simple to achieve). Nevertheless, having regard to the significance ordinarily placed by lawyers on written agreements, I consider that the absence of a statement that there was to be an immediately binding agreement on oral acceptance of the counter-offer is a strong factor that points in favour of the conclusion for which Mrs Morgans contends. The informality of statements such as "done" or "we are settled" is consistent with there being an agreement in principle rather than a binding agreement.
Further, in my opinion, the text of the Second 9 August Letter points strongly against there having been an intention on the part of both parties immediately to be bound by acceptance of that proposal (even assuming for the moment that its terms were incorporated in some fashion in the counter-offer; and in this regard Mr Cohen emphasises that many of the clauses in the draft deeds are reflective of the conditions of the Second 9 August Letter). Apart from the operative clauses that, as Mrs Morgans says, turn on the execution of a deed, the most telling to my mind is the very clear statement in that letter that, if agreement is not reached on the wording of the deed, then the dispute "will not be resolved".
I accept that there is a distinction between acceptance of an offer and reducing it to writing but I cannot read the above-mentioned condition sensibly as meaning anything other than that, if agreement were not to be reached on the terms of the proposed deed, then there would be understood to be no resolution of the underlying dispute (i.e., the dispute as to the costs assessment; not the dispute as to the wording of the deed - which would be no more than a statement of the blindingly obvious); and hence no binding agreement of the kind here alleged.
Rhetorically, one might well ask, where is the settlement if the dispute is then still continuing (i.e., not resolved). Mr Cohen's answer to this is that the dispute would then be a dispute as to the deed (T 72) and it was suggested that Mr Cohen could then seek specific performance of the oral agreement. However, I do not consider that this accords with any reasonable interpretation of the words "the dispute will not be resolved".
As to the matters relied upon after the 21 August 2018 telephone conversation, I attach no significance to the email headers (as adverted to above). True it is that there is a change from the email header that Mr Cohen used before the conversation on 21 August 2018 (at 9.35am that day) to the header after the conversation (as reproduced earlier) (to which Counsel pointed in the course of argument - see T 68.15) but that seems to be a change made by Mr Cohen himself. There is nothing to suggest that Mr Gradidge independently adopted that header (or even focussed on it) so as to support an argument that its use was some kind of admission by him. It seems to me to be placing far too much weight on what was a reply (or a series of replies) to Mr Cohen's emails to suggest that Mr Gradidge (and through him Mrs Morgans) accepted that there was an immediately binding agreement by replying to emails with that header.
The correspondence in which Mr Cohen regularly asserts that settlement had been reached does not, in my opinion, assist him either (even though Mr Gradidge did not take issue with those statements) because to my mind those statements were consistent with an understanding that agreement had been reached in principle (or that a consensus had been reached) but that it needed to be documented in order to give rise to a binding contract. Indeed, some of Mr Cohen's correspondence itself supports that conclusion - in particular, his early statement that the parties had reached agreement "in the main" suggests an understanding that there had not been a final agreement reached at that stage.
The request by Mr Cohen for Mr Gradidge to advise if the first version of the draft deed was acceptable is, as Mr Cohen puts, made in the context of the lawyers working together towards finalising an agreement (or consensus) reached on 21 August 2018 (T 13.30) but the references in the email correspondence to settlement having been reached would equally be apposite to finalising a binding settlement on the basis of an "in-principle" deal. The question turns ultimately on the parties' objectively ascertained common intention.
Mr Cohen's communications during September 2018 certainly display an increasing concern for the deed to be signed (and a sense of urgency in that regard), which would be consistent with an understanding on his part that absent an executed document his position was not protected (and hence would be consistent with an understanding that there was at that stage no concluded and binding agreement) but I accept that it could also be consistent with an understanding on his part that there was a binding agreement but, that for complete protection, he would prefer to have an executed contract on which to rely (and from a practical point of view, insofar as payment or other obligations under the agreement was or were structured by reference to the execution of the deed, this would be necessary). There is nothing however in the subsequent conduct to indicate an agreement between the parties at any earlier time that execution of a draft version of the settlement deed by Mr Cohen alone would be sufficient to bring into existence a binding contract.
Insofar as reliance is sought to be placed on Mr Cohen's 19 October 2018 Calderbank offer as a concession that there was no binding agreement (see T 90.35) I do not accept that the making of that offer involves any such concession. However, nor do I accept that Mr Hemsworth's acceptance in the conversation on 14 September 2018 (assuming for this purpose that Mr Cohen's recollection is accurate and noting that Mr Hemsworth did not give evidence to dispute this) that a "settlement" had been reached amounts to any admission beyond the recognition that some form of consensus had been reached on 21 August 2018.
Having regard to the circumstances in which the negotiations took place, including that the offer contained in the Second 9 August Letter contemplated a deed of settlement and that certain things were to occur by reference to such a deed; the evidence (albeit not wholly consistent) as to what was said in the 21 August 2018 telephone conversation; and the subsequent conduct and correspondence between the parties, I am not persuaded that the common intention of the parties objectively ascertained was that they were immediately to be bound to an agreement for payment of the sum of $80,000 in full satisfaction of the outstanding fees claimed (absent any formal documentation of that agreement). I have concluded, to the contrary, that there was no common intention to be bound unless and until the agreement was documented in writing and signed by the respective parties to "formalise" the consensus reached in the course of that conversation.
Therefore, the principal basis for Mr Cohen's claim is not made good.
As to the first way in which the alternative basis for Mr Cohen's claim is put, to my mind, that also fails. That is for the reason that I cannot construe the Second 9 August Letter (even assuming, in Mr Cohen's favour, its terms governs the "agreement" reached in the 21 August 2018 telephone conversation), as meaning that Mr Cohen had carte blanche to determine the content of whatever deed was to govern the parties' agreement and that is the effect of the suggestion put for Mr Cohen that as long as a document acceptable to him was provided at some stage in the negotiations he could accept it and treat it as a binding agreement without the need for execution by Mrs Morgans. I read the relevant condition (as to there being a deed to Mr Cohen's satisfaction) not as being that Mr Cohen was entitled to "dictate" or impose on Mrs Morgans the terms of the ultimate deed (and his conduct does not suggest that he considered he had such an entitlement); rather, that what was there being emphasised was that any settlement deed must be to his satisfaction. It must have been contemplated that Mrs Morgans' agreement to the terms of any written agreement would also have been necessary (and Mr Cohen seemed to assume as such during the negotiation of the various draft deeds).
As to the significance attributed to the proffering by Mr Gradidge of a "final" copy of the deed, and that he was seeking confirmation from Mr Cohen that it was acceptable, I am not persuaded that this involved any commitment on the part of Mrs Morgans that she would be bound to the terms of that deed (or, for that matter, any deed that Mr Cohen might have found satisfactory) in the absence of her executing the final document - and as noted above I do not accept that this was objectively the common intention of the parties.
As to the second basis on which the alternative case was put, it would be necessary for Mr Cohen to establish that the sending to him on 31 August 2018 of the sixth version of the proposed settlement deed amounted to an offer capable, on acceptance (by the signing and returning of a deed in that form or otherwise by some sufficient communication of acceptance), of immediately giving rise to a binding agreement. The sending of the sixth version of the draft deed was not expressed in those terms and I do not accept that ordinarily the proffering of a draft deed (in the context of ongoing settlement negotiations or discussions in relation to such a deed), even one expressed to be a "final copy", amounts to such an offer.
The very fact that the parties were spending time negotiating the wording of a formal document to record their agreement (and one that Mr Cohen was concerned to ensure would offer him proper protection) suggests that in the ordinary course one would not expect the deed to be binding until properly executed and exchanged. Complaint is made by Mr Cohen that at no point does Mr Gradidge say that this document was subject to the instructions (T 79.13). That is so, and I would accept that Mr Gradidge was cloaked with at least ostensible (and in the circumstances there is nothing to suggest that he did not have actual) authority to speak on behalf of Mrs Morgans and to represent that the document was acceptable to her. However, I do not accept that the provision of the deed amounted to any representation that Mrs Morgans would execute a deed in those terms (and none was alleged); still less that communication by Mr Cohen that it was acceptable to him would bind her to its terms (without more). (The reasonableness of any assumption by Mr Cohen at the time that a deed in those terms was acceptable to Mrs Morgans is not to the point.)
Unfortunately, for Mr Cohen, the oral agreement (or consensus or settlement in principle), however it be described, suffers the fate of many oral agreements in that it has proven (in colloquial terms) not to be worth the paper on which it is (not) written. So too, no doubt for both parties, it is unfortunate that this leaves the parties in the position where they will inevitably face more expense and time in a costs dispute that has obviously already consumed an inordinate amount of cost and time. However, the function of the court is not to make agreements for parties, nor can one force one or both parties to adopt a reasonable stance in negotiations.
Mrs Morgans may well (as Mr Cohen clearly believes) have unreasonably reneged on the consensus achieved in the 21 August 2018 telephone conversation (for whatever reason - she may have regretted the compromise there involved; she may have believed or been advised that Mr Cohen himself had reneged on some aspect of the settlement he understood had been reached; he may, as was suggested in the course of argument, have "poisoned the well" by insisting on extensive releases). Wherever the truth lies in that regard, what is clear to my mind is that there was no binding agreement reached during the 21 August 2018 telephone conversation; and it was not open to Mr Cohen to impose contractual terms on Mrs Morgans (even ones she had previously proffered for his consideration) by unilaterally signing and returning a version of the draft settlement deed that a week before he (Mr Cohen) had not been prepared to accept when she (Mrs Morgans) had proffered it through her solicitor.
In terms of the relief to be granted, although the injunction granted on an interlocutory basis was expressed to be pending further order (and hence will come to an end when final orders are now made) it is appropriate for the avoidance of doubt for the injunction to be formally discharged. In that regard, in circumstances where the position in which that leaves the parties is obviously unsatisfactory (as it puts the costs dispute back on the table after an hiatus of nearly a year) and having regard to the overriding statutory mandate for the just, quick and cheap resolution of the real issues in dispute (see s 56 of the Civil Procedure Act 2005 (NSW)), I consider that it would be appropriate of my own motion (and before I am functus officio in this matter) to refer the parties to a court-annexed mediation in order to see if they can, with the assistance of an experienced mediator, resolve their differences in a binding way once and for all. I accept that this was not raised in the course of the hearing before me and, accordingly, if either party wishes to be heard on that course (and to seek a variation of the order I now propose to make in that regard) then I will make directions when these reasons are published to enable that to be done.

Conclusion

For the above reasons, the summons must be dismissed. I see no reason not to make the usual order as to costs. Accordingly, the orders I make are as follows: 1. Refer the parties to court-annexed mediation on a date to be fixed as to the costs assessment process invoked by the defendant. 2. Direct the parties to liaise with Ward CJ in Eq's Associate for the fixing of a date for court-annexed mediation. 3. Order that the summons filed 14 December 2018 be dismissed. 4. Discharge the injunction granted by Pembroke J on 14 December 2018, with effect from the termination of the mediation ordered in Order 1 above. 5. Order the plaintiff to pay the defendant's costs of the summons.

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: 22 November 2019

ce and Prid Pty Ltd [2013] NSWSC 512 Nationwide News Pty Ltd v Vass [2018] NSWCA 259 Nurisvan Investment Ltd v Anyoption Holdings Ltd [2017] VSCA 141 Ormwave Pty Limited v Smith [2007] NSWCA 210 OXS Pty Ltd v Sydney Harbour Foreshore Authority [2016] NSWCA 120 Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35 Pan American World Airways Inc v Commonwealth of Australia (1977) 7 BPR 97,629 Pavlovic v Universal Music Australia Pty Ltd (2015) 90 NSWLR 605; [2015] HCA 313 Powell v Jones [1968] SASR 394 Smit International Singapore Pte Ltd v Kurnia Dewi Shipping SA [1997] 1 Lloyd's Rep 552 Taylor v Johnson (1983) 151 CLR 422; [1983] HCA 5 Thorby v Goldberg (1964) 112 CLR 597; [1964] HCA 41 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52 Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106 Texts Cited: J D Heydon, Heydon on Contract (2019, Thomson Reuters) K Lewison and D Hughes, The Interpretation of Contracts in Australia (2012, Lawbook Co) Category: Principal judgment Parties: Andrew Cohen (Plaintiff) Nada Morgans (Defendant) Representation: Counsel: H El-Hage (Plaintiff) GA Sirtes SC with LM Johnston (Defendant)

Judgment

HER HONOUR: By summons filed on 14 December 2018, the plaintiff (Mr Cohen), a solicitor, seeks relief in relation to an agreement (which he contends was immediately binding and enforceable) allegedly made by him with the defendant (Mrs Morgans), his former client, to resolve a dispute as to the amount to be paid by Mrs Morgans for the legal services he had provided to Mrs Morgans over a number of years. The agreement that Mr Cohen contends was reached was in the context where Mrs Morgans had pressed for the preparation of an itemised bill of costs and a costs assessment in relation to the disputed legal fees.
Mr Cohen's primary contention (as reflected by the relief sought in prayer 1(a) of the summons) is that he accepted a counter-offer put to him during a telephone conversation at approximately 4pm on 21 August 2018 with the solicitor acting for Mrs Morgans at the time (Mr Matthew Gradidge). It is said that that counter-offer was made on the terms of a without prejudice letter which I will refer to as the Second 9 August Letter (see below) sent by Mr Cohen putting a proposal to resolve the dispute without the need for any costs assessment process to be undertaken. On Mr Cohen's primary case, it was a term of that bargain that a deed be prepared (in terms that were satisfactory to Mr Cohen) to formalise the agreement that had been reached but that the parties' objective common intention was immediately to be bound by the agreement (notwithstanding that it was later to be documented by deed).
Mr Cohen's alternative case (as reflected by the relief sought in prayer 1(b) of the summons) is that a binding agreement was concluded through a combination of Mr Cohen's acceptance of the counter-offer put by Mr Gradidge on 21 August 2018 (on the terms set out in the Second 9 August Letter) and the forwarding of an email by Mr Cohen to Mr Gradidge on 10 September 2018 at 4.19pm, attaching an executed deed of settlement and release, and the receipt by Mr Gradidge of that document. The alternative case is put again on the possibility that the terms of the Second 9 August Letter might be construed to include a condition that a written agreement between the parties was to be effected.
A further alternative case or, perhaps more precisely, a second way in which the alternative case was put for Mr Cohen, was in effect that the provision on 31 August 2018 of the sixth version of the draft settlement deed was itself an offer capable, on execution and return of the document by Mr Cohen of giving rise, without more, to an immediately binding agreement).
Mrs Morgans disputes that a binding agreement was reached to settle the dispute on any of the bases on which Mr Cohen's case is put. It is not disputed that on 21 August 2018 there was a conversation between Mr Cohen and Mr Gradidge in which (to use a neutral term) consensus was reached that Mr Cohen would accept the sum of $80,000 in full payment of his legal fees. However, there is dispute as to the terms of that conversation (including as to whether the counter-offer made in that conversation on behalf of Mrs Morgans was expressly put by Mr Gradidge as being an offer on the same terms as the Second 9 August Letter); and there is dispute as to whether that consensus was objectively intended to give rise to a binding agreement in the absence of a concluded (and executed by both) written agreement between the parties.

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