Comlaw (No 62) Pty Ltd v Owens [2003] VSC 35

5. Suzann Janet Owens has practised as a solicitor for more than 30 years. She acted as solicitor for Mrs Garms in connection with the dispute for some months between the second half of 1998 and 14 April 1999. There is an issue about the exact day on which she was retained. Mrs Garms contends that the retainer did not begin until 26 October 1998 and Ms Owens says that it started on 21 August 1998.

8. On 18 November 1998 Ms Owens rendered to Mrs Garms an interim account in the amount of $11,957.50 for work said to have been done up to that date, and shortly before Christmas 1998 Mrs Garms paid $2,000 on account of those costs. In April 1999 Telstra offered to settle Mrs Garms' claim in an amount which she was prepared to accept and, more or less as soon as that occurred, Mrs Garms terminated Ms Owen's retainer.

11. On 14 April 1999 Mrs Garms wrote to Ms Owens seeking a final account of fees as follows:

"Dear Sue, Thank You for your letter of the 11 April 1999, I will provide a detailed response early next week. I have asked Mr David Wells of Moors (sic) Solicitors to contact you in regard to the matter of Costigan. Could you please afford him your normal courtesies. I would also appreciate receiving your account so that I may attend to same. Thank You Sue for all your efforts on my behalf, I hope we can have a coffee together soon."

15. On 20 April 1999, before Ms Owens had rendered her final account, Mrs Garms paid the balance of the interim account of 18 November 1998, under cover of a letter as follows:

"Dear Sue, I have to-day posted to you a cheque in the amount for $11,970.50, copy attached. I note that you have recorded an item "attending John Pinnock at length". I am not aware of any discussions you may have had with John Pinnock TIO on my behalf, could you please explain. I would appreciate it if you would speak to Mr David Wells Solicitor at your earliest opportunity concerning the documents you have in your possession relating to Costigan as we are required to lodge the defence by Friday 23 April 1999."

19. There followed further letters on 23 April, 26 April and 29 April 1999 in which Mrs Garms sought the return of documents which had been entrusted to Ms Owens while Ms Owens was acting as solicitor. Ms Owens refused the requests on the basis that she had undertaken a considerable amount of work since 18 November 1998 for which she had not then billed, and that she was entitled to a lien over the documents until all her costs had been paid.

22. On 31 May 1999 Ms Owens obtained from John White Consultancy, Legal Costs Consultants, a certificate that Ms Owens' file of documents, correspondence and memoranda relating to the matter had been examined and that the solicitor own client costs (excluding disbursements) for the work done from the date of initial instructions had been calculated in accordance with the Supreme Court scale of costs and assessed at the sum of $78,000. On 7 June 1999 Ms Owens served that certificate on Moores, solicitors, who by that stage had begun to act on behalf of Mrs Garms, and on 15 June 1999 Moores responded that they required an itemised bill pursuant to sub-s. 108(1) of the Legal Practice Act 1996.

25. Over the following 18 months correspondence passed between Moores and Ms Owens concerning documents said to be necessary to prepare the itemised bill. Finally, however, on 3 November 2000 Ms Owens served on Moores a bill of costs in taxable form comprising $130,935.60 profit costs and a further $10,240.00 disbursements. Moores responded on 18 December 2000 with the institution of a proceeding for taxation of the costs[1] and then with the institution of this proceeding on 21 August 2001. In effect the taxation stands adjourned pending this proceeding[2].

28. By their Statement of Claim in this proceeding, the Plaintiffs seek declarations[3] that on 26 October 1998 they retained the Defendant on terms that:

* any legal work to be performed by the Defendant was to be limited to the prosecution of an appeal from the decision of Mr Justice Harper (whereby his Honour dismissed an appeal from an arbitrator as to the amount of compensation to be paid by Telstra);

* the legal fees in relation to that work were to be charged at the rate of $115.00 per hour; and

* insofar as the Defendant undertook any other legal work on behalf of the Plaintiffs in connection with the dispute with Telstra, she would not charge any amount other than out of pocket expenses incurred in connection with the Commonwealth Parliament Australian Senate Working Party on the "Casualties of Telstra" or in connection with a complaint lodged by Ross Plowman with the Victoria Police Major Fraud Group on or about 28 June 1998 concerning the failure of Telstra to produce documents relevant to the dispute.

34. Ms Owens resists those claims. Her case is that she was retained on 21 August 1998 to act as solicitor in relation to the dispute generally, without any stipulation as to the basis on which she would charge, and thus that she is entitled to her costs calculated in accordance with Supreme Court scale, as set out in the bill in taxable form.

38. According to the Plaintiffs' Statement of Claim and further and better particulars of 9 June 2002, the terms of the retainer were in part constituted of conversations between Mrs Garms and Ms Owens on 21 August 1998, 8 September 1998, 29 September 1998 and 26 October 1998, and in part in writing in the form of a letter dated 5 November 1998.

41. The conversation of 21 August 1998 was alleged to have taken place at Cecconi's Restaurant, Southbank and to have been to the effect that any legal work performed by Ms Owens as solicitor was limited to prosecution by the Plaintiffs of the appeal from Mr Justice Harper and that the legal fees in relation to that work would be charged at $115 per hour.

44. The conversation of 29 September 1993 was alleged to have been outside the offices of Holding Redlich solicitors, at 350 William Street, Melbourne and to have been to the effect that the legal fees of Ms Owens in relation to prosecution by the Plaintiffs of the appeal from Mr Justice Harper would be charged at the rate of $115 per hour and that Ms Owens would only render a bill in respect of her out of pocket expenses associated with the Senate Working Party and the Fraud Group Investigation; not exceeding $10,000.

47. The conversation of 26 October 1998 was alleged to have been by telephone and to have been to the effect that any legal work performed by Ms Owens as solicitor was limited to prosecution by the Plaintiffs of the appeal from Mr Justice Harper; the legal fees of Ms Owens in relation to such work would be charged at $115 per hour; and insofar as Ms Owens undertook any other work of a legal nature she would not charge any fee for work undertaken by her in relation to the Senate Working Party or the Fraud Group Investigation but would only render a bill in respect of her out of pocket expenses associated with the Senate Working Party and the Fraud Group Investigation; not exceeding $10,000.

50. The letter of 5 November 1998 was alleged to have been sent by Mrs Garms to Ms Owen, in the following terms:

"As requested, I hereby confirm my instructions of 26 October 1998 for you to represent me in place of Goldsmith's. The most pressing matter as you are aware is the Appeal against the Judgment of Judge Harper (sic). I understand that your fees will be the same as for Ross Plowman at $115 dollars an hour. I also confirm that you will charge the Bova's, Ross and myself for out of pocket expenses only for Major Fraud Group and Senate Working Party representations. Thank you for your considerations. I will assemble the documents for the Appeal Books. It is important that we provide the Court with copies of the documents discovered in September 1998 through the Senate's intervention, particularly those documents which conclusively prove...........I will discuss the Appeal books when I see you in Melbourne either tonight or tomorrow. Yours sincerely, Ann Garms PS. Sue, hope all is going well in the Family Court, Ann."

54. It is also said that there was a conversation between Mrs Garms and Ms Owens on 20 November 1998 in which Mrs Garms queried the size of the bill of 18 November 1998, and a letter sent by Mrs Garms to Ms Owens on 10 February 1999, and that the contents of both of them confirm that the terms of the retainer were as set out in the letter of 5 November 1998.

58. Ms Owens contends that nothing was ever said in any of her conversations with Mrs Garms about a fee of $115 per hour or of acting in connection with the Senate Working Party or Major Fraud Group for out of pocket expenses only; that she did not receive the letter of 5 November 1998 or ever know anything of its contents; that she did not have a conversation with Mrs Garms in which Mrs Garms queried the size of the bill of 18 November 1998; and that she did not receive the letter of 10 February 1999 or know anything of its contents.

63. The evidence adduced on behalf of the Plaintiffs is in some respects different to the Plaintiffs' particulars. But it has not been suggested that the Plaintiffs are confined to their pleadings.

67. According to Mrs Garms' testimony, there was a conversation of 21 August 1998 at Cecconi's Restaurant at the Crown Casino, during the course of which Ms Owens said that Mrs Garms should instruct Ms Owens to act as solicitor on the appeal from Mr Justice Harper, in place of the solicitor (Mr Goldsmith) who had acted to that point, but Mrs Garms declined the offer and professed herself happy with Mr Goldsmith. Mrs Garms deposed that in a further conversation after the lunch, Ms Owens said that she would represent Mrs Garms in respect of the Senate Working Party and the Fraud Group investigation in return for out-of-pocket expenses only.

70. A different version of events appears in the note which Mrs Garms said that she made of the latter conversation. In the note Mrs Garms recorded that Ms Owens had said that she would represent Mrs Garms in respect of the Senate Working Party and Fraud Group Investigation for out-of-pocket expenses "until [the position with] Goldsmith resolved" (Emphasis added).

73. According to Mrs Garms' testimony, there was no meeting of 29 September 1998, whether outside the offices of Holding Redlich or at all. She said, however, that there was a conversation on 22 September 1998 at the offices of Holding Redlich in which Ms Owens said again that Mrs Garms should instruct Ms Owens to act for Mrs Garms, and also said that she would sue Mr Costigan QC (who had appeared on behalf of Mrs Garms in the appeal before Mr Justice Harper) and that she would do the work relating to the Senate Inquiry "as a freebie".

76. According, however, to the note which Mrs Garms said that she made of the conversation, the conversation took place at a viewing of documents at Holding Redlich on an unspecified date in September 1998, and while Ms Owens did say that Mrs Garms should sue Mr Costigan, and that (if Mrs Garms did so) Ms Owens would conduct the suit, the only thing that Ms Owens said about the Senate Inquiry on that occasion was that W.P (which I take to mean word processing) would "do the docs as a freebie...no charge W.P."

79. According to Mrs Garms' testimony, Ms Owens did not say anything on or about 29 September 1993 about being prepared to act at $115 per hour. Rather, it was Ross Plowman, who was another of Ms Owens' clients, who told Mrs Garms that Sue Owens was prepared to represent Garms for $115. The note which Mrs Garms said that she made of that conversation confirms the position. It records that it was Plowman who told Mrs Garms that "...Sue will represent me for same reduced fee as Ross $115 an hour".

82. According to Mrs Garms' testimony, there was not one conversation on 26 October 1998, but rather a conversation on 23 October 1993 and three conversations on 26 October 1998, and it is really the aggregate of those conversations which is relied upon.

85. Mrs Garms said that the conversation on 23 October 1998 took place at the Raddison Hotel and that Ms Owens said that she would take over the conduct of the appeal (from the decision of Mr Justice Harper) and charge only $115 per hour. According, however, to the note which Mrs Garms said that she made of that conversation, Ms Owens said nothing about acting for $115 per hour; only that Mrs Garms "would be better off if (Ms Owens) represented (Mrs Garms) in appeal".

88. According to Mrs Garms' testimony, in the first of the conversations on 26 October 1998, Ms Owens asked whether Mrs Garms would agree for Ms Owens to represent her on the appeal; in the second of the conversations, Mrs Garms said that she agreed for Ms Owens to represent her; and in the third of the conversations, Ms Owens said "again that she would only be charging me for out-of-pocket expenses for work related to the Senate Working Party and the Fraud Group". But according to the note which Mrs Garms said that she made of the conversations, Ms Owens did not ask in the first conversation whether Mrs Garms would agree for Ms Owens to represent her on the appeal. The note recorded instead that, having reported that she (Ms Owens) had been unable to "get Goldsmith on phone - appeal" (which I read as meaning, concerning the appeal), Ms Owens asked: "would I (Mrs Garms) agree for her to represent me?" Further, according to the note that Mrs Garms said that she made of the second conversation, Mrs Garms did not say that she agreed that Ms Owens should represent her in the appeal. She said that "she agreed for her to now formally represent me." Nor did Ms Owens say that she would charge out of pockets only with respect to work relating to the Senate Inquiry and the Fraud Group. She said that: "(she) will give me bill for out of pockets so far" (my emphasis). There is no record in any note made by Mrs Garms of Ms Owens having said during the third conversation on 26 October 1998 that she would be charging only out of pocket expenses for work related to the Senate Working Party and the Fraud Group.

91. Mrs Garms' evidence in chief as to the letter of 5 November 1998 implied that she had seen Mr Plowman hand the letter to Ms Owen. Mrs Garms deposed that:

"Prior to 5 November 1998, Sue Owens asked me to write to her confirming the terms of our arrangement, which I did. On 5/11/98, I typed the letter in Brisbane and then was flying down to Melbourne for the working party meeting. Plowman picked me up at the airport and we went to his home to collect Senate Working Party documents. I gave him the letter to give to Owens who was in the Family Court on her personal matter. The working party meeting finished and Plowman picked me up and we both went to the Court and Plowman gave Owens the letter." (Emphasis added.)

But Mrs Garms' evidence in cross-examination revealed that she had not seen the letter delivered. Mrs Garms said that she was absent in the bathroom at the time and that while she assumed that Mr Plowman had handed the letter to Ms Owens, she could not say of her own knowledge that he had done so.

96. Mrs Garms was, however, clear in her evidence that she did complain to Ms Owens about the size of the bill of 18 November 1998. She said that:

"I rang Mrs Owens about that account and she said that in that account was Allan Smith and the others for the out of pocket expenses, and I said to her that account seems very those (sic), and why did she contact Mr Pinnock? Because there was a very antagonistic approach from Mr Pinnock to TIO towards the costs at this time. And part of that I believe was to do with the pain and suffering issue, but certainly I queried that account with Ms Owens on the phone and she said it will all sort out at the end of the day, in the was, when we finally tally this matter up."

Mrs Garms deposed that in the course of the conversation, Ms Owens gave an estimate that the costs were likely to be between $20,000 and $25,000.

101. Mrs Garms was also clear that she had sent the letter of 10 February 1999.

105. Mr Plowman was called to give evidence on behalf of the Plaintiffs. He is also in dispute with Ms Owens about fees which she charged in connection with the dispute with Telstra. At relevant times he was a close friend of Ms Owens, but plainly that is no longer so.

108. According to Mr Plowman's testimony, he was privy to a conversation between Mrs Garms and Ms Owens on 21 August 1998 about the possibility of Ms Owens acting for Mrs Garms. But, as he recalled it, it did not take place at Cecconi's as Mrs Garms had said, but rather in a car on the way to the Fraud Group. Further, according to Mr Plowman, Ms Owens said on that occasion not only that she was prepared to take over the conduct of the appeal (as Mrs Garms had sworn), but also that she would only charge $ 115 per hour.

111. Mr Plowman did not depose to any conversation at Holding Redlich on 8 September or 29 September 1998, but he did say that on 23 August 1998 Ms Owens telephoned him and asked him to urge Mrs Garms to retain her in place of Goldsmith, and that Ms Owens said to tell Mrs Garms that Owens would only charge Garms at the rate of $115 per hour as she was doing for Plowman. He also deposed that on 29 September 1998 Ms Owens called in at his home with a bottle of champagne, and that she then said again that she would be willing to act for Mrs Garms for $115 per hour, and that on 30 September 1998 he collected Garms from the airport - presumably on arrival from Queensland, although Garms swore that she had been in Melbourne on 29 September - and that he then told Garms what Owens had said on the previous evening.

114. Mr Plowman's evidence was that he was at the inspection of documents at the offices of Holding Redlich on 23 October 1998 of which Mrs Garms had spoken, but unlike Garms he said that it was during the inspection itself, rather than afterwards at the Raddisson, that Owens urged Garms to change from Goldsmith to Owens. His recollection differed further from Garms' account of the conversation of 23 October 1998, inasmuch as while Garms said that Owens spoke on that day only of taking over the appeal and charging $115 per hour (but nothing about work in connection with the Senate Working Party and the Fraud Group), as Plowman recalled the conversation Owens spoke in general terms of taking over as solicitor from Goldsmith; said also that she would only charge "out of pockets" for work with respect to the Senate and the Fraud Group; but said nothing on that occasion about $115 per hour.

117. Mr Plowman said that on 5 November 1998 he met Mrs Garms at the airport at 9 am and drove her to a meeting of the Senate Working Party but that before leaving her at the meeting she gave to him the letter of 5 November 1998 and asked him to give it to Ms Owens who was that day engaged in her own divorce proceedings in the Family Court. He said that when he handed the letter to Ms Owens at the Family Court later that day it was sealed up, but he declared that he knew what it was because he had assisted Mrs Garms to make a copy of it earlier in the day and he thought that he recalled Mrs Garms placing it in an envelope whilst in the car on the way to the Senate Working Party Group. According to Mr Plowman's evidence in cross examination:

"What happened was Sue Owens came out of the court with her barrister, I said to her `Hello, how is it going' She said `I have to have a meeting with (her barrister) who said that they'd have a meeting over the whole of lunch', and I said `Ann wanted me to give you this letter' I handed it to her and she took it. We then left because Sue had gone, Ann came out of the bathroom, and I said 'Sue has gone, she is having a conference with her barrister'."

121. The Plaintiffs also called Barry O'Sullivan, Graham Schorer and Sue Bova as witnesses whose evidence was said to show indirectly that terms of the retainer were as the Plaintiffs alleged. Their evidence also differs in some respects from the allegations made in the Plaintiffs' Statement of Claim and differs too from the evidence of Mrs Garms.

125. Barry O'Sullivan is an insurance loss adjustor who acted for Mrs Garms in her dispute with Telstra and was responsible for the final negotiations with Telstra which resulted in the settlement. He gave evidence that he had a conversation with Ms Owens late in March 1999 in which Ms Owens told him that she was only charging out of pocket expenses for the work which she was doing on behalf of Mrs Garms and Ross Plowman in relation to the Senate Working Party and the Victorian Fraud Squad, and that provided the matter settled quickly, she estimated that the amount of her outstanding fees, exclusive of those for which she had already rendered, would be in the order of $25,000. Mr O'Sullivan said that he obtained that information in order to compute the amount of Mrs Garms' and Mr Plowman's losses for the adjustment of their claims against Telstra. He added that he believed that he had made a note of what Ms Owens had said, but that he had not been able to find the note, due probably to the fact that it was a term of the settlement with Telstra that almost every document relating to the dispute be returned to Telstra.

129. Graham John Schorer, a transport company owner had also had a claim against Telstra and he had been associated with Mrs Garms and Mr Plowman in a loose association called the Casualties of Telstra (COT), which had been formed to advance members' claims against Telstra. He said that he had been present on a number of occasions when Ms Owens had requested Mrs Garms to allow Ms Owens to act as Garms' solicitor, and that he had heard Mrs Garms decline, but that in the last week of the Senate Working Party review of documents relating to Mrs Garms' arbitration, Mrs Garms had told him that she had engaged Ms Owens.

132. Mr Schorer further deposed that after the Senate Working Party had brought down their recommendations early in 1999, a meeting of COT members was held at Mr Plowman's home to discuss tactics for dealing with the recommendations, and in the course of the meeting, at which Mrs Garms, Mr Plowman and Ms Owens were present, Mr Plowman said that Ms Owens should represent all COT members in connection with the Senate Working Party. When Mr Schorer voiced strenuous opposition to that course, Sue Owens said that she would not charge professional fees but expected to be paid for her out of pocket expenses. But Mr Schorer was not moved and he left the meeting in somewhat heated circumstances.

136. Mrs Bova's evidence was that on 28 October 1998 Ms Owens offered to represent her and her husband in the Senate Working Party and Major Fraud Group free of charge and that Mrs Garms had agreed to pay her out of pocket expenses.

141. Ms Owens gave evidence that the only occasion on which she ever discussed with Mrs Garms the basis on which fees would be charge was on 21 August 1998. She said that on the afternoon of 21 August 1998 she drove Mrs Garms to the Victoria Police Major Fraud Group to assist Mrs Garms to provide information to the police concerning the dispute with Telstra, and that on the way there Mrs Garms asked Ms Owens whether Ms Owens would act on Mrs Garms' appeal from the decision of Mr Justice Harper. Ms Owens said that she had replied that it was not her policy to take work off other solicitors, but that if Mrs Garms was quite certain that she wanted her to act, she would be prepared to do so. Ms Owens evidence continued:

"On 21 August I mentioned to her that - she (Mrs Garms) had had experience with Gary Goldsmith on the issue of costs, and I actually asked her if she had had advice from Gary Goldsmith about charging which was the requirement that was placed on solicitors in advising clients about the relevant court scales, and she said that she had, and she understood what the rate of charges were, and so I said to her, well, look, I won't send you any formal advice relating to the scale of charges, Supreme Court charges... That is the only discussion with Mrs Garms about ...That is the only discussion I had with Mrs Garms relating to fees, save for a discussion that occurred in about February 1999 when I offered to have my fees independently assisted (sic, assessed) by another solicitor, John White..."

145. Ms Owens denied altogether that she had ever discussed with Mrs Garms the idea of charging only out of pocket expenses for work in connection with the Senate Working Party or the Major Fraud Group and denied that she ever had a discussion with Mr Plowman as to the basis on which she would be prepared to act for Mrs Garms or in which she asked Mr Plowman to urge Mrs Garms to retain her. She also said that Mr Plowman was in error in his assertions that she had agreed to act for him at the rate of only $115 per hour. She agreed that she had sent Plowman a letter on 25 November 1994 concerning her actions on his behalf, and that the letter mentioned a charge of $115 per hour, but she said it related only to a short period of the retainer and that she had made it plain in conversation to Mr Plowman at the time that otherwise the Supreme Court Scale would apply to her work for him.

148. Ms Owens denied that she had ever seen the letter of 5 November 1998 before the proceeding began; denied that Mrs Garms had complained about the size of the bill of 18 November 1998, although she did have a recollection of estimating that the costs of the appeal would be in the order of $25,000; said that the only offer she had ever made to the Bovas was to assist them in taking issues to the Fraud Group at no charge; and that the only discussion concerning fees which she had had with Barry O'Sullivan was a discussion concerning his fees, about the level of which she expressed concern. Ms Owens also denied that she had ever said that she was prepared to act in connection with the Senate Working Party Group or the Fraud Group for out of pocket expenses only, and that she ever made an offer to Mr Schorer to act on that basis.

151. The Plaintiffs tendered without objection a letter purporting to have been sent by Mrs Garms to Ms Owens on 10 February 1999, as follows:

"During my visit to Canberra to-day I was again confronted by complaints and requests that you cease writing to Senators unless specifically requested to do so. Please treat this letter as a formal instruction that you are not to write to the Senators unless requested to do so by myself. I regret having to bring this matter up with you again, but I have on two previous occasions asked you to abide by this request. In your defence I explained to the Senators that you are not charging us for Senate Working Party issues and were only trying to assist us, nevertheless there is a great deal of anxiety in your perceived interference because as they explained the process is outside of the legal system. In future if you do write please request me to authorise and sign off on the letter. We are indebted to the Senate for their assistance and therefore have to be mindful of the sensitivity of the process." (Emphasis added).

Ms Owens response to that, however, was that she had never seen that letter before the commencement of this proceeding.

157. The only other witness of significance called on behalf of the Plaintiffs was Neil Jepsom a solicitor attached to the Major Fraud Group. Relevantly his evidence was that Mr Plowman had not attended on him at the Fraud Group with Mrs Garms and Ms Owens on the afternoon of 21 August 1998.

161. In the course of cross examination and final addresses both sides spent considerable time attacking the credit of the witnesses called on behalf of the other party and pointing out factors which it was said suggest that the evidence of their witnesses should be preferred. The Defendants criticised Mrs Garms' version of events as inherently unlikely - because it was said there was no reason or sense in an experienced solicitor like the defendant soliciting work at cut rates of the kind asserted - and criticised Mrs Garms' notes of conversation as a fabrication which had been brought into existence a considerable period of time after the events to which they relate. It was plain it was contended that the notes were not a verbatim or even substantial record of the conversations and events to which they purported to refer, but rather a farrago of recollection and interpretation studded with self serving statements of events now in issue. Alternatively, it was said that if any credit is to be placed on the notes they should be seen as doing more to discredit than to confirm Mrs Garms' evidence, because of the inconsistencies between the contents of the notes and her evidence. Her evidence as to the letter of 5 November 1998 was said to show signs of concoction.

164. Mr Plowman's evidence was criticised as tainted by his interest in the outcome of the proceeding and as shown to be suspect by the evidence of Mr Jepson. The contention as to the latter point was that because Mr Jepson did not see Mr Plowman at the Fraud Group on 21 August 1998 it should be concluded that Plowman did not travel in the car with Ms Owens and Mrs Garms to the Fraud Group that day and therefore it followed that Mr Plowman could not have heard the conversation in the car which he said he heard about the willingness of Ms Owens to act for Mrs Garms at the rate of $115 per hour. It was suggested too that Mr Plowman's recollection of the events of 5 November 1998 was inherently unlikely and that in all probability the visit to the Family Court which he thought he recalled was one to deliver photographs to Ms Owens for the purposes of the proceeding (during which it would have been most unlikely that he would have delivered a letter from Mrs Garms).

167. Mr O'Sullivan's evidence was criticised as suspect because of Mr O'Sullivan's longstanding business association and friendship with Mrs Garms and because of the failure of Mr O'Sullivan to produce any sort of diary or other documentary record to corroborate the content of the conversations which he said that he had with Ms Owens. It was suggested that he had an axe to grind against Ms Owens because of the criticism she had levelled against the amount of fees he had charged for acting as loss adjustor.

170. Mrs Bova's evidence was criticised as the evidence of an artless woman lacking any sort of business sophistication. Mr Schorer was criticised as a volatile and emotional man who was plainly biased against Ms Owens and to whose evidence therefore no weight should be given.

173. The Plaintiffs for their part criticised the evidence given by Ms Owens as being shown by a number of events to be generally unreliable. The evidence which she gave that she did not attend the lunch at Cicconi's on 21 August 1998 was said to be put in doubt by her own bill in taxable form, because it included an attendance on Mrs Garms on 21 August 1998 between 12.30 and 2.30 p.m. Her general recollection of events was said to be made suspect by the fact that in an affidavit sworn for the purposes of an earlier interlocutory application she had deposed that she had on 21 August 1998 perused advice of Mr Costigan QC and Dr Foreman as to the prospects on appeal, and yet the contents of her own bill in taxable form demonstrated that there was no such advice in existence until considerably later, and also by the fact that whereas in her evidence she said that she attended at Holding Redlich on 23 October 1998 for a relatively brief time, her own bill in taxable form showed that she had attended from noon to 5.30 p.m.

176. Her inability to produce any documentary records, other that the bill in taxable form, and the inadequacies of the excuses offered to justify the absence of other documents were said to suggest more suspicious reasons for her failure to produce the documents or at least make greater efforts to locate them, and at very least to reflect most adversely upon Ms Owens' levels of organisation and professionalism. For example, it was remarkable it was submitted that Ms Owens claimed never to have seen the letters of 5 November 1998 and 10 February 1999 from Mrs Garms to her, and to insinuate that they were a latter day fabrication, or that they had never been sent, when it was plain from other evidence that Ms Owens had not kept a copy of and had forgotten all about the letter which she had sent to Mr Plowman on 25 November 1994. Surely, it was far more likely, it was said, that Ms Owens is generally so disorganised in her record keeping and approach to practice that she misplaced and forgot the letters of 5 November and 10 February just as she had misplaced and forgotten the letter of 25 November 1994.

179. She was also criticised on the basis of her failure to send a fees letter to Mrs Garms in accordance with Section 86 of the Legal Practice Act 1996 and as disingenuous in suggesting that the reason for not sending the letter was because she had been told by Mrs Garms that Mr Goldsmith had explained to Mrs Garms the basis on which he was charging, and therefore took it that Mrs Garms was au fait with the Supreme Court scale.

182. In my opinion there is some substance in the criticisms made by both sides, although I think that both sides go too far in suggesting that any of the witnesses was dishonest.

185. Mrs Garms appeared to me to be a shrewd and experienced business woman who well understood the nature of the issues in the proceeding and the facts which it was important for her to establish if she is to succeed in the proceeding. As a consequence she was inclined to avoid answering questions that she considered would not assist her case and to embark instead upon a dissertation as to why she should be regarded as the occupant of the moral high ground. But I heard nothing in what Mrs Garms said in evidence and saw nothing in her demeanour in the witness box to suggest that she did other than to endeavour to tell the truth as she recalled it. I reject the suggestion that it is inherently unlikely that Ms Owens solicited a retainer from Mrs Garms. I also reject the idea that it is inherently unlikely that Ms Owens would have offered to act upon the appeal at the rate of $115 per hour or for out of pocket expenses in connection with the Senate Working Party or the Major Fraud Group. Ms Owens herself said that she wished to develop her practice in Telstra cases and that apart from Mr Plowman she did not have any work of that type before beginning to act for Mrs Garms. Furthermore, whatever the effect of the letter of 25 November 1994 to Mr Plowman (about which I express no opinion), it shows that at least for some purposes and for some time Ms Owens was prepared to undertake Telstra work at the rate of $115 per hour.

188. I agree with the criticism of Mrs Garms' notes to the extent that they are not a contemporaneous record of events, but rather a report constructed from contemporaneous records some time after the events recorded, and to the extent that they are comprised as much of interpretation and analysis as they are of the facts which they purport to record. But I do not accept the defendant's submission that the notes should be seen as a fabrication in the sense of a deliberately false record created to assist the Plaintiffs' case. On the contrary, I think that the existence and style of the notes are almost certainly the product of Mrs Garms' careful approach to business and because, as she said, she had been advised to keep a complete record of everything which occurred in the course of the dispute.

191. I agree with the criticism that the notes in some respects contradict the evidence which was given by Mrs Garms, and I will come again to the effects of that later in these reasons. But for present purposes I observe that where there are inconsistencies they are more in the detail than the substance and I think that in the end they are to be explained by the propensity of Mrs Garms, like many witnesses, honestly but erroneously to conceive a memory of an event more favourable than was the event.

194. I am not persuaded by all of Mrs Garms' evidence about the letter of 5 November 1998. I accept that she wrote it and that she gave it to Mr Plowman to deliver to Ms Owen. But I am not satisfied that Ms Owens had asked Mrs Garms to write confirming the terms of the retainer. There is nothing in Mrs Garms' notes to that effect and, really to the contrary, Mrs Garms' note of 30 September 1998 is that Ms Owens said that she would send a costs agreement for Mrs Garms to consider. I think it more likely than not that the letter of 5 November 1998 was sent unsolicited after Ms Owens failed to send a costs agreement. It is consistent with Mrs Garms' careful approach to business and, in any event, logical a for business woman to write a letter to confirm the terms of an oral arrangement recently entered into. The fact that Mrs Garms was in dispute with Mr Goldsmith about his fees adds to the probability that she wrote the letter unsolicited, to minimise the risk of uncertainties in her relationship with her new solicitor.

197. Mr Plowman does have a vested interest in the outcome of this litigation. He is in dispute with Ms Owens about fees and part of that dispute is whether Ms Owens agreed by her letter to him of 25 November 1994 to act for him at the rate of $115 per hour and for out of pocket expenses in connection with the Senate Working Party and Major Fraud Group. It would assist him in that dispute if it were established in this litigation that Ms Owens agreed to act for Mrs Garms at the rate of $ 115 per hour and for out of pocket expenses on Senate and Fraud Group work. The connections are obvious. That is not to say that I doubt Mr Plowman's honesty. I do not. But I do think that his recollection of events was coloured to some degree by his interest in the outcome of the case.

200. I accept Mr Jepsom's evidence, but I do not consider that it is reason to doubt that Mr Plowman travelled in the car on the way to the Fraud Group on 21 August 1998, or that he then heard a conversation between Mrs Garms and Ms Owens about the willingness of Ms Owens to act for Mrs Garms. There are a number of possible explanations of Mr Jepsom's failure to see Mr Plowman at the Fraud Group on the day consistent with Mr Plowman having travelled in the car. Furthermore, Mr Plowman produced from his diary a detailed file note of the occasion. The note leads me, however, to doubt Mr Plowman's recollection that a fee of $115 per hour was referred to in the conversation which he heard. There is no reference to that in the note and I see no reason to think that the note was other than complete.

203. I find no reason to doubt Mr Plowman's evidence that he spoke to Ms Owens on 23 August and 29 September 1998 in the circumstances he deposed to, or that he was present at Holding Redlich on 23 October 1998 and heard Ms Owens there solicit a retainer from Mrs Garms.

206. I am also persuaded by the substance of most of the evidence which Mr Plowman gave as to the delivery of the letter of 5 November 1998 to Ms Owens at the Family Court. I am not convinced, however, about all of the detail of that occasion to which he deposed. He produced no note of the occasion and he appeared to me to be exaggerating, albeit unintentionally, in his ability to recall with exactitude what he said to Ms Owens at the time.

209. I accept much of the criticism of Mr O'Sullivan's evidence and accordingly I do not place a great deal of weight upon it. Mr O'Sullivan was a friend of Mrs Garms and my assessment is that he would wish her to be successful in this proceeding. He also had had some sort of contretemps with Ms Owens about the fees which he proposed to charge, and it had created a degree of animosity towards Ms Owens. Over and above those things, I found unconvincing the certainty with which he purported to recall events, of years ago, without any sort of documentary record to assist his recollection.

212. I think it is probable that Mr O'Sullivan obtained an estimate of fees from Ms Owens in order that he might compute the losses of Mrs Garms which were to be claimed from Telstra. But as he said, this case was one amongst many Telstra cases on which he was acting, and in those circumstances I do not regard as reliable his unaided recollection of what Ms Owens said.

215. I accept that Mr Schorer presented as a volatile and emotional, for he was both loud and intemperate in the answers which he gave in cross examination. He appeared to be the sort of man who is used to getting his own way and not to being subjected to query and he did not like it much when he was. But that having been said, he impressed me as a witness of truth. He had no interest in the outcome of this proceeding. He had no reason to wish that one side more than the other should be successful. And I found what he said about the events of 30 March 1999 in form and in substance to be very convincing.

218. I reject the criticisms which were levelled against Mrs Bova. I found her to be an honest and convincing witness with a clear recollection of the events to which she deposed; limited though they were.

221. I accept many of the criticisms which were made of Ms Owens' evidence. Her recollection was shown to be faulty in significant respects by the contents of her own bill in taxable form. Her failure to send a fees letter in accordance with Section 86 of the Legal Practice Act reflected adversely on her level of organisation and professionalism. The reasons which she gave for not sending a fees letter were ingenious but improbable. The lack of documentary records other than the bill in taxable form threw doubt upon the reliability of her recollection of events, especially because they occurred such a long time ago and at a time when she was emotionally and otherwise stretched by her personal circumstances. The impression which she gave was one of some disorder and disarray. On her own admission, she had "boxes and boxes and boxes of documents in this matter", "the documents were absolutely huge", she had "moved office premises" and it was "very easy to have these things go astray." Thus she had forgotten altogether the letter of 25 November 1994 which she had sent to Mr Plowman and as a consequence forgotten that she had made any sort of arrangement with Mr Plowman as to $115 per hour. On her own admission, her "existence is very complex, and (she has) an enormous amount of other things to consider apart from my own affairs."

224. But I do not consider that Ms Owens was dishonest in the evidence which she gave or that the absence of documentary records was due to any thing other than her general disorganisation and an inability on her part properly to martial material for the conduct of this proceeding. By and large I regard the unreliability of her recollection as sufficient reason to prefer the evidence of Mrs Garms concerning the content of their conversations. But I am not inclined to reject out of hand all of Ms Owens' testimony.

228. I find that on 21 August 1998 Ms Owens said in substance to Mrs Garms in Mr Plowman's presence that Ms Owens was willing to act as solicitor on the appeal from the judgment of Mr Justice Harper and that she was willing to continue to represent Mrs Garms before the Senate Working Party for out of pocket expenses only. I find also that Mrs Garms responded in substance that she could not retain Ms Owens as solicitor for the appeal so long as Mr Goldsmith remained as solicitor, and Ms Owens replied that she was prepared to assist with the appeal for out of pocket expenses only until the position with Mr Goldsmith was resolved. I think that Mr Plowman assumed that Ms Owens was offering Mrs Garms a fee the same as that which he believed Ms Owens had agreed to charge him for acting as his solicitor. I am not satisfied, however, that anything was said as to the level of fee which Ms Owens would charge if retained as Mrs Garms' solicitor. I think that if it had been, Mrs Garms and Mr Plowman would have recorded it in their notes of the occasion. Neither of them did.

231. I find that on 23 August 1998 Ms Owens and Mr Plowman had a discussion about the matter and that in the course of the conversation Ms Owens requested Mr Plowman to ask Mrs Garms to retain Ms Owens as solicitor, in place of Mr Goldsmith. I find also that Mr Plowman continued to assume that Ms Owens would be prepared to act for Mrs Garms at a fee the same as that which Mr Plowman believed Ms Owens had agreed to charge him for acting as his solicitor. I am not satisfied, however, that Ms Owens or Mr Plowman said anything on that occasion as to the fee which Ms Owens would seek from Mrs Garms. The events are too long ago to recall with the degree of precision which Mr Plowman asseverated.

234. I find that on 29 August 1998 Ms Owens and Mr Plowman had a further discussion about the matter and that in the course of that conversation Ms Owens again requested Mr Plowman to ask Mrs Garms to retain Ms Owens as solicitor in place of Mr Goldsmith. I think that Mr Plowman again assumed that Ms Owens would be prepared to act for Mrs Garms at a fee the same as that which Mr Plowman believed Ms Owens had agreed to charge him for acting as his solicitor. I am not satisfied, however, that Ms Owens or Mr Plowman said anything on that occasion as to the fee which Ms Owens would seek from Mrs Garms. In the absence of any documentary record, and given that it was a social occasion at which alcohol was consumed, I treat Mr Plowman's recollection of that sort of detail as problematic at best.

237. I find that on 30 September 1998 Mr Plowman and Mrs Garms had a conversation in which Mr Plowman told Mrs Garms that Ms Owens was prepared to act as solicitor for the same fee as Ms Owens charged Mr Plowman and that the fee was $115 per hour. I find that when Mr Plowman spoke those words he believed that Ms Owens had agreed to charge him at the rate of $115 per hour. I suspect that Mr Plowman's belief was based upon the letter of 25 November 1998. But it is unnecessary for the purposes of this proceeding to make any finding as to whether Ms Owens had agreed to charge Mr Plowman at the rate of $115 per hour. I express no opinion on that question.

240. I find that on 23 October 1998 there was a conversation between Mrs Garms and Ms Owens in which Ms Owens urged Mrs Garms to retain Ms Owens as solicitor. I am left in some doubt as to whether the conversation took place at the Raddison Hotel or at Holding Redlich during the inspection of documents that day. But I think it more likely to have been in the relative privacy of the Raddison than at Holding Redlich. I find that Mrs Garms said on that occasion that because of the position with Mr Goldsmith she was still not able to retain Ms Owens.

243. I find that on 26 October 1998 there were further conversations between Mrs Garms and Ms Owens in which Ms Owens again urged Mrs Garms to retain Ms Owens as solicitor, and Mrs Garms said that she would now retain Ms Owens formally as her solicitor. Ms Owens said that she would send Mrs Garms a bill for the out of pocket expenses which Ms Owens had incurred so far.

246. I find that Mrs Garms wrote the letter dated 5 November 1998 at sometime between 26 October 1998 and 5 November 1998 and that Mr Plowman handed the letter in a sealed envelope to Ms Owens at the Family Court on 5 November 1998, more or less in the circumstances deposed to by Mr Plowman.

249. I am, however, not satisfied that Mr Plowman said to Ms Owens on that occasion that Mrs Garms wanted Ms Owens to have the letter or, if he did say anything of that sort, that Ms Owens heard what he said or comprehended the meaning of the words which he used. I conclude it is more likely than not that in the hurried and emotional circumstances in which Ms Owens was placed at the time, she did no more than take the sealed envelope from Mr Garms without giving it a second thought, and then leave immediately for an urgent lunch adjournment conference with her barrister (on which all of her attention would almost certainly be focussed). I am strengthened in my conclusion by the absence of evidence that Ms Owens said anything in response to Mr Plowman's supposed utterance about Mrs Garms wanting Ms Owens to have the envelope.

252. I am not satisfied that Ms Owens read the letter on 5 November 1998 or at any subsequent time. There is no direct evidence that she did and I accept her evidence that she has no recollection of ever seeing the letter. I conclude it is more likely than not that in the emotion and the relative disorder which attended Ms Owen's practice during her Family Court proceedings, Ms Owens misplaced the letter and thereafter forgot all about its existence. I am strengthened in that conclusion by the absence of evidence to suggest that the letter was ever referred to by Mrs Garms or Mr Plowman in any conversation with Ms Owens after 5 November 1998; even the conversation of 20 November 1998 in which Mrs Garms said that she queried the bill of 18 November 1998.

255. I find that following Ms Owens' stated intention of 26 October 1998 to render a bill for out of pocket expenses to date, on or about 18 November 1998 Ms Owens sent to Mrs Garms the interim account for $11,957.50 under cover of a letter dated 18 November 1998 in which Ms Owens said that it would be preferable to assess costs being incurred on a quarterly basis[4]. Mrs Garms deposed that she did not receive the letter, but Ms Owens swore that she sent it and having regard to its contents, I think it more likely than not that she did.

258. It is not in issue that Mrs Garms paid $2,000 on account of the bill before Christmas 1998 or that she paid the balance of the bill in the circumstances outlined earlier in these reasons for judgment.

261. I find that on or about 20 November 1998 Mrs Garms queried the bill on the basis that it looked excessive, and that she got some sort of assurance from Ms Owens that the bill would be reviewed "at the end of the day, in the wash (up)". Ms Owens denied it, but there is a record of it in Mrs Garms' notes of events and the fact that it occurred is consistent with the remainder of the bill remaining unpaid for so long without apparent complaint. I am also satisfied that Ms Owens gave some sort of estimate of between $20,000 and $25,000 for the costs of the appeal.

264. I find that Mrs Garms did send the letter of 10 February 1999 and I think it is more probable than not that Ms Owens received it.

267. I find that there was a meeting late in March 1999 at the home of Mr Plowman, at which were present Ms Owens, Mrs Garms, Mr Plowman and Mr Schorer, and during that meeting Mr Plowman said in Ms Owens' presence that Ms Owens was prepared to act for Mr Schorer before the Senate Working Party Group for out of pocket expenses only.

271. I consider that the effect of the conversation of 21 August 1998 was to constitute an agreement between Mrs Garms and Ms Owens that Ms Owens would represent Mrs Garms before the Senate Working Party and in connection with the Major Fraud Group for out of pocket expenses only, and that she would assist with the appeal for out of pocket expenses only until such time as the position with Mr Goldsmith was resolved.

274. Mrs Garms said in her evidence that she was told by Ms Owens what those expenses would include. According to Mrs Garms evidence in chief:

"Mrs Owens did explain that to me. She said it would be her car, her petrol, she has a woman employed, she has an office to run, she has faxes, telephone, all of that is part of her expenses."

Based upon that evidence, I conclude that it was an express or implied term of the agreement which was reached on 21 August 1998 that the "out of pocket expenses" to be charged would include all reasonable costs of providing representation before the Senate Working Party and the Major Fraud Group, other than the costs of Ms Owens' own labours.

279. I consider that the effect of the conversations of 26 October 1998 was to constitute an agreement between Mrs Garms and Ms Owens that thenceforth Ms Owens should act as solicitor on the record in the appeal. There was, however, no discussion of the fee which Ms Owens would charge so to act. Mrs Garms may have believed that it would be $115 per hour, but I find that that was because of what Mr Plowman had said to her in the absence of Ms Owen. And as I have explained already, I think that what Mr Plowman told Mrs Garms about Ms Owens willingness to act at a fee of $115 per hour was based on an assumption on his part rather than upon anything said to him by Ms Owens. I am not persuaded that Ms Owens asked or authorised Mr Plowman to say anything to Mrs Garms about the fee which Ms Owens would charge as solicitor, and there is no evidence (and nor is it suggested) that Ms Owens otherwise knew that Mrs Garms believed that the fee would be $115 per hour. I consider that it was implicit in the earlier agreement, to charge only out of pocket expenses until the position with Mr Goldsmith was resolved, that a greater fee would be charged once the position had been resolved. There being no express stipulation, and no suggestion as to how that greater fee was to be computed, I conclude that it was an implied term of the agreement of 26 October 1998 that the fee to be charged would be reasonable and thus in accordance with scale[5].

282. I do not consider that the agreement of 26 October 1998 altered the position with respect to work in connection with the Senate Working Party or the Major Fraud Group. Work on those things was treated by Ms Owens and Mrs Garms as being of a different kind and to be performed on a different basis to work as solicitor on the appeal, and the agreement of 26 October 1998 was concerned only with the latter. The arrangement that Ms Owens would assist with the Senate Working Party and Major Fraud Group for "out of pocket expenses" was intended to continue.

285. I consider that the letter of 5 November 1998 was ineffective to vary the agreement of 26 October 1998 or otherwise to make it a term of the retainer that Ms Owens would act as solicitor at a fee of $115 per hour. As matters stood when the letter was handed to Ms Owens, there was already in existence a retainer under which the fees were to be charged at scale. That retainer could only be varied by further agreement[6]. And there could not be further agreement without both parties' assent. Obviously, one party to an agreement cannot impose an amendment on the other party by the device of stating that unless she hears from the other party she will consider the other to be bound. She cannot assert that she will regard silence as acceptance of the amendment which she proposes.

288. That is not to deny the existence of cases where a party's silence in the face of a proposal may indicate that she has accepted the proposal[7]. That will be so if an objective bystander, looking at all the facts[8], would conclude that the party to whom the proposal has been made has accepted the proposal. But I do not consider that an objective bystander looking at all the facts of this case would conclude that Ms Owens accepted the proposal contained in the letter of 5 November 1998. On the evidence before me, she did not read and was not aware of the contents of the letter.

291. It was submitted on behalf of the Plaintiffs that, because the law of contract requires one to determine the parties' intentions objectively, as opposed to referring to their subjective beliefs, the fact that the letter of 5 November 1998 was handed to Ms Owens meant that Ms Owens must be treated as having become aware of its contents, whether she was or not. It followed, it was submitted, that the objective bystander would conclude from Ms Owens' absence of objection to the terms of the letter of 5 November 1999, and from the fact that she continued to perform the work for which her retainer provided, that she had accepted that the work was to be charged for in accordance with the terms set out in the letter.

294. I do not think that is correct. In my opinion the submission misconceives the objective theory of contract. As I apprehend the theory it is that, where a party says or does something, the intention to be ascribed to what he has said or done is to be determined from the viewpoint of the objective bystander and without reference to the party's subjective intention. The theory does not have anything to do with conclusions about what a party has said or done, or not said or done, and certainly nothing to do with conclusions, contrary to the facts, about what a party has or has not said or done. Even the postal acceptance rule, which on one analysis looks as though it is based on assumptions about what occurs in the ordinary course of the post, eschews the drawing of conclusions which are contrary to fact. It proceeds on the basis that the communication of acceptance is complete at the point of posting the acceptance, because the offeror has agreed that it will be complete at that point[9]; not because it is concluded that the acceptance which was posted is later received and read.

297. If the evidence had established that Ms Owens read the letter of 5 November 1999 or otherwise knew of its contents, I think that the effect of the letter and Ms Owens' subsequent conduct could well have been to amend the retainer so as to make it conform to the terms of the letter. The fact that a relationship between Mrs Garms and Ms Owens was in existence before the letter of 5 November 1998 was delivered, and the fact that, if Ms Owens had read the letter, she would have known the basis on which Mrs Garms was proceeding (and yet proceeded to act as solicitor without objection to that basis), could have led an objective bystander to conclude that Ms Owens agreed to the terms of the letter. But it is not possible to reach that conclusion in the absence of a finding that Ms Owens read or knew of the contents of the letter. Since it is not shown that Ms Owens knew of the contents of the letter, it cannot be said that she had a reasonable opportunity to reject the proposal in the letter that she act as solicitor at fees of $115 per hour. Consequently, it cannot be said that she took the benefit of the retainer under circumstances which indicated that she was to be paid at the rate of $115 per hour.

300. The complaint made by Mrs Garms on 20 November 1998 is not relied upon as an element of the contract, but it is of some forensic significance in as much as it is consistent with a belief on the part of Mrs Garms that the letter of 5 November 1998 had been sent and received. Similarly, the letter of 10 February 1999 and the lack of any response by Ms Owens to the suggestion made in it that she was acting for out of pocket expenses before the Senate, is of some forensic significance, inasmuch as it is consistent with Ms Owens having agreed to act on that basis (even though she does not now recall that she did). Neither communication establishes that Ms Owens was put on notice as to the contents of the letter of 5 November 1998 or otherwise knew that Mrs Garms believed that a fee of $115 per hour for work on the appeal had been agreed. But both communications in varying degrees go some way to confirm that Ms Owens had earlier agreed to act in respect of the Senate Working Party and the Major Fraud Group for out of pocket expenses only.

303. In making those observations I bear in mind that one is not permitted to interpret a contract by reference to the parties' subsequent conduct, but consistently with what was said by Brooking, J in FAI Insurance Co Ltd v Savoy Plaza Pty Ltd[10], I think that it is open in this case to regard the subsequent conduct as an admission that Ms Owens had agreed to charge only out of pocket expenses for work concerned with the Senate Working Party and the Major Fraud Group.

306. In the end the evidence given by Mr Schorer and Mrs Bova does not take the matter a great deal further. The fact that Ms Owens may have been prepared to act for either of them for out of pocket expenses before the Senate and Fraud Group does not mean that Ms Owens agreed to act for Mrs Garms on the same basis. There is again also the difficulty that subsequent conduct cannot be used to interpret a contract. But to the extent that it may be taken into account as an admission, the fact that Ms Owens was prepared to act for Mr Schorer and Mrs Bova is certainly not inconsistent with having agreed so to act for Mrs Garms.

* The effect of the conversation of 21 August 1998 was to constitute an agreement between Mrs Garms and Ms Owens that Ms Owens would represent Mrs Garms before the Senate Working Party and in connection with the Major Fraud Group for out of pocket expenses only, and that she would assist with the appeal for out of pocket expenses only until such time as the position with Mr Goldsmith was resolved.

* It was an express or implied term of the retainer that "out of pocket expenses" would include all reasonable costs of providing representation before the Senate Working Party and the Major Fraud Group, other than the costs of Ms Owens' own labours.

* The effect of the conversations of 26 October 1998 was to constitute an agreement between Mrs Garms and Ms Owens that thenceforth Ms Owens should act as solicitor on the record in the appeal from the decision of Mr Justice Harper and that her fees for that work would be charged at scale. Otherwise Ms Owens was to continue to represent Mrs Garms before the Senate Working Party and in connection with the Major Fraud Group for out of pocket expenses only as previously agreed.

* The letter of 5 November 1998 was not effective to vary the agreement of 26 October 1998 or otherwise to make it a term of the retainer that Ms Owens would act as solicitor at a fee of $115 per hour.

318. I add for the sake of completeness that the Plaintiffs expressly abandoned their claim in this proceeding for relief pursuant to Section 91 of the Legal Practice Act, and that it was not contended that Ms Owens was estopped from denying that she had agreed to charge at the rate of $115 per hour.

[1] Proceeding No 3554 of 2000 instituted by summons dated 18 December 2000

[2] Although, in point of form, both proceedings are before me.

[3] Originally, the relief which was sought was much more extensive, but much of the claim was abandoned on the first day of trial.

[4] The letter went on to say that because of Mr Plowman's and Ross Smith's involvement in the issues before the Fraud Squad, it would be preferable if those costs were allocated at some later date.

[5] The implication of scale is an implication as a matter of law because of the nature of the contract: Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 448

[6] Tallerman & Co Pty Ltd v Nathan's Merchandise (Victoria) Pty Ltd [1957] HCA 10; (1957) 98 CLR 93 at 112-3

[7] Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 at 534, per McHugh JA

[8] Empirnall, ibid at 530, per Kirby P