Darkinjung Local Aboriginal Land Council v Darkinjung Pty Ltd - [2010] NSWCA 351 - NSWCA 2010 case summary — Zoe

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Darkinjung Local Aboriginal Land Council v Darkinjung Pty Ltd

[2010] NSWCA 351

Court of Appeal (NSW)|2010-11-23|Before: Hodgson JA, Tobias JA, Macfarlan JA, Austin J, MacFarlan JA

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At a glance

Source facts

Court

Court of Appeal (NSW)

Decision date

2010-11-23

Before

Hodgson JA, Tobias JA, Macfarlan JA, Austin J, MacFarlan JA

Source

Original judgment source is linked above.

Judgment (62 paragraphs)

[1]

CITATION: Darkinjung Local Aboriginal Land Council v Darkinjung Pty Ltd (In Liq) & Anor [2010] NSWCA 351

[2]

JUDGMENT OF: Hodgson JA at 1; Tobias JA at 9; Macfarlan JA at 82

[3]

(1) Leave to appeal granted; (2) Appeal allowed. DECISION: (3) Vary the answer given by Austin J to Question 1.6(a) on 1 March 2010 by deleting the words "but the firm acquired" and substituting therefor the words "but the termination does not by itself prevent the firm from establishing that it acquired". [The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] (4) The second respondent to pay the costs of the appellant and the first respondent with respect to the appeal and the summons for leave to appeal but to have a certificate under the Suitors' Fund Act 1951, if otherwise qualified. [The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

[16]

Wednesday 15 December 2010 DARKINJUNG LOCAL ABORIGINAL LAND COUNCIL v DARKINJUNG PTY LIMITED (IN LIQUIDATION) & ANOR Judgment 1 HODGSON JA: I agree with the orders proposed by Tobias JA and, subject to what I say below, I agree with his reasons. I will use abbreviations adopted by Tobias JA. 2 The appeal must succeed because the question of whether Mr Cunliffe was entitled to costs on a quantum meruit basis was not properly raised before the primary judge. 3 However, it is also appropriate for this Court on this appeal to determine, as a further independent basis for allowing the appeal, that there was not a valid request by DPL for Mr Cunliffe to provide it with legal services for the purposes of the Proceedings. The primary judge gave substantial reasons for his decision on this question, and it was the subject of extensive argument on appeal; and there was no suggestion from Mr Cunliffe that his arguments were in any way curtailed by reason of the matter not having been properly raised at first instance. 4 As pointed out by Tobias JA at [76], a quantum meruit depends on there being that kind of request, subject to some possible exceptions. Although I agree with Tobias JA that it is appropriate not to shut Mr Cunliffe out from pursuing his amended cross-claim, I think it should be made clear that this must not be taken as a suggestion from this Court that the amended cross-claim has any prospect of success. 5 Quite apart from the problem created by the absence of a request from DPL, there is also a real question whether it can possibly be for the benefit of DPL to incur costs in a contest between claimants for the control of DPL. And although this is not a question that would arise on the amended cross-claim itself, there would be a further question whether DPL, as trustee, could be entitled to an indemnity from trust funds for legal costs which had been incurred in order to promote an improper purpose of removing those funds from decision-making within the statutory confines of DLALC. 6 I do not overlook the circumstance that on 23 August 2006, Windeyer J gave judicial advice to DPL concerning the application of trust property for legal costs. However, the efficacy of that advice depends on the assumed facts on which it was given; and I do not know whether or not they included all the facts which grounded Barrett J's decision that an improper purpose was being pursued by DPL and by those in control of DPL. 7 In all those circumstances, in my opinion it would be appropriate for Mr Cunliffe and his legal advisers to consider very carefully whether the amended cross-claim has reasonable prospects of success, which would justify them causing the incurring of substantial further legal costs. 8 Finally, I note that Mr Cunliffe, in submissions on appeal, placed reliance on ss 128 and 129 of the Corporations Act 2001 (Cth). Those sections, if of any assistance to Mr Cunliffe, would have been relevant to his claim to contractual entitlement against DPL, which was squarely in issue before the primary judge; and it is plainly too late to rely on them now for that purpose. There is a question whether there would now be an estoppel preventing them being relied on for a quantum meruit; but in any event, there is no evidence that Mr Cunliffe made any assumption based on information available to the public from ASIC within s 129(2) (see s 130(1)), and even if he did, it seems clear he must have suspected it was incorrect, within s 128(4). 9 TOBIAS JA: The present appeal arises out of a claim by the second respondent, a solicitor (Mr Cunliffe), in respect of legal costs and disbursements expended by him in providing legal services to the first respondent, Darkinjung Pty Limited (In Liquidation) (DPL), with particular reference to DPL's involvement in proceedings in the Equity Division of this Court being, relevantly, proceedings numbers 2005/5634 and 2006/2842 (the Proceedings). 10 On 23 September 2008 Mr Cunliffe filed a cross-claim (the first cross-claim) in which he sought a declaration that he was entitled to be paid costs fairly to be allowed to DPL for its expenses in respect of, amongst other matters, prosecuting and defending the Proceedings, such costs to be paid from the property of what was referred to in the evidence as the Darkinjung Local Aboriginal Land Council Trust (the Trust) held by the appellant, the Darkinjung Local Aboriginal Land Council (the Land Council), including from a fund in the sum of $430,000 paid into Court pursuant to an order of Barrett J in the Proceedings (the Fund). 11 On 11 November 2008 the Land Council filed a cross-claim (the third cross-claim) joining DPL, Mr Cunliffe and others as cross-defendants in which it sought, relevantly, orders in favour of DPL for the recovery of money paid to the cross-defendants after 22 May 2006 without authority as money received for the use of DPL as well as a declaration that DPL incurred no legal costs and expenses between 22 May 2006 and 13 December 2006 (when it was wound up by order of Barrett J). Other consequential relief was also claimed.

[21]

See Hillig v Darkinjung Pty Ltd [2006] NSWSC 594; (2006) 57 ACSR 733; (2006) 201 FLR 148 at [47]. The Land Council was the sole shareholder of DPL. 19 Thus substantial funds were transferred by the Land Council to DPL as trustee of the Trust and some of these funds were used to finance certain "enterprise companies" that had been established by the Land Council as well as a cattle joint venture in which the Trust had invested (CattleCo). 20 On 16 August 2005 an investigator appointed under the Aboriginal Land Rights Act 1983 (the ALR Act) reported to the Minister in a manner which was highly critical of certain officers of the Land Council and their management of its property. 21 On 28 October 2005 DPL instituted proceedings number 2005/5634 against the Land Council, the enterprise companies, CattleCo and the New South Wales Aboriginal Land Council seeking declaratory relief as to the validity of the payments made by the Land Council to DPL. The Land Council also took proceedings in the Land and Environment Court seeking an injunction preventing the Minister from appointing an administrator to the Land Council. These last mentioned proceedings were unsuccessful: Darkinjung Local Aboriginal Land Council v Minister for Aboriginal Affairs [2006] NSWLEC 291; (2006) 147 LGERA 348. Accordingly, on 2 May 2006 the Minister appointed Mr Peter Hillig (Mr Hillig) as administrator of the Land Council with all of its functions. 22 Mr Hillig developed concern that the assets of the Land Council were being rapidly dispersed as a consequence whereof he instituted proceedings number 2006/2842 on 19 May 2006 and made an immediate application for interim injunctive relief. However, on 22 May 2006, before that application was determined, Mr Hillig purported to cause the Land Council, as sole shareholder of DPL, to take steps to remove the directors of DPL, to appoint himself as DPL's sole director, to repeal or amend DPL's constitution and to terminate the retainer of DPL's solicitor, Mr Cunliffe. DPL and its directors, who were the second to sixth respondents in the Proceedings, challenged Mr Hillig's actions (the Hillig litigation). 23 On 15 June 2006 the primary judge determined the Hillig litigation by holding that Mr Hillig's actions were invalid on grounds not presently relevant: Hillig v Darkinjung Pty Ltd [2006] NSWSC 594; (2006) 57 ACSR 733; (2006) 201 FLR 148. On 19 June 2006 his Honour made declarations to the effect that Mr Hillig's actions of 22 May 2006 were inoperative and ineffective, the directors (the second to sixth respondents) remained in office and Mr Cunliffe remained DPL's solicitor. He also ordered that Mr Hillig be restrained from holding himself out or purporting to act as a director of DPL. 24 On 23 June 2006 Mr Hillig instituted an appeal against the primary judge's decision which was heard by this Court on 9 May 2007 and judgment delivered on 29 April 2008: Hillig v Darkinjung Pty Ltd & Ors [2008] NSWCA 75 (Hillig (No.1)). The Court, McColl JA, with the agreement of Beazley and Giles JJA, allowed the appeal and set aside the primary judge's orders and declarations made on 19 June 2006. It reserved the question of the costs of the proceedings both before the primary judge and of the appeal. 25 The issue of costs was dealt with by this Court on the papers, judgment being delivered on 23 June 2008: Hillig v Darkinjung Pty Ltd & Ors (No.2) [2008] NSWCA 147 (Hillig (No.2)). The actual orders that were then made are not presently relevant although both the primary judge and Mr Cunliffe relied on certain statements made by McColl JA, with whom Beazley and Giles JJA agreed, in that judgment.

[29]

To the extent that it was implied it was implied by law. 2. On 13 December 2006 the First Defendant was placed into liquidation. 3. The Retainer was entered into by the First Defendant through the Second to Sixth defendants then acting within their authority as directors. 4. This Honourable Court on 15 June 2006 confirmed the authority of the Second to Sixth Defendants to bind the First Defendant and the validity of the Retainer. PARTICULARS The Seventh Defendant refers to the decision of Austin J in Hillig v Darkinjung [2006] NSWSC 594 (15 June 2006). 5. Pursuant to the Retainer and at all times material: (a) the solicitors then trading under the name or style of Norton White Melbourne provided legal services to the First Defendant; and (b) … 6. The First Defendant has not paid all of the amounts owed by it to the solicitors trading under the name or style Norton White Melbourne for the legal services alleged in paragraph 5 and is indebted to the Seventh Defendant in the premises set out herein in the amount of $342,003.55 ('the Debt') in respect of the provision of those legal services. … 7. … 8. … 9. … 10. In prosecuting and defending the Proceedings the First Defendant was at all material times: (a) acting as a trustee for the 'Darkinjung Trust' ('the Trust') , being a trust created by instrument dated 9 March 2004 and amended on 29 November 2005 and previously referred to in judgments in this proceeding; (b) acting reasonably; and (c) not acting for its own benefit and only for the benefit of the Trust." 32 It will be noted that nowhere in the pleading of the first cross-claim is it asserted that Norton White provided legal services to DPL otherwise than pursuant to the retainer referred to in paragraph 1. In other words, the firm's entitlement to the payment of the costs of their legal services to DPL was based purely on contract. No alternative claim was made based on a quantum meruit which, it is common ground, was only sustainable in the absence of a contract between the parties in respect of the relevant services: Lumbers v W Cook Builders Pty Ltd (In Liq) [2008] HCA 27; (2008) 232 CLR 635 at [79]. In other words, if the relevant services were provided pursuant to a contract, there could be no entitlement to the cost of those services based on a quantum meruit. 33 In his reasons (at [18]) the primary judge noted that in the first cross-claim Mr Cunliffe sought, amongst other things, to establish the entitlement of DPL as trustee of the Trust to an indemnity out of the Trust property including the Fund for its legal costs in acting as trustee in the Proceedings and to have the Court determine the amount to be allowed for those expenses. Thus the first cross-claim asserts the right of a trustee to be exonerated for legal expenses out of trust property. Relevantly, Mr Cunliffe's claim for recovery of legal costs asserts that he, as a creditor of the trustee DPL, is entitled to access to the Trust property including the Fund. The claim was based on the proposition that as a creditor of DPL as trustee, Mr Cunliffe is subrogated to DPL's right of exoneration out of the Trust assets including the Fund. 34 His Honour recognised (at [22]) that there would be no purpose in Mr Cunliffe merely claiming for legal expenses as an unsecured creditor of DPL as the latter had no assets other than such rights of indemnity as it may have against Trust assets (including the Fund) and the Land Council personally. Accordingly, his claim for recovery of legal expenses out of the Fund and other Trust assets must be characterised as the assertion of rights of subrogation to DPL's indemnity rights. However, that was an issue that his Honour was not required in the present proceedings to determine. 35 At [35] the primary judge noted that the amount of the payments made to Norton White after 22 May 2006 was not in dispute and totalled $816,948.09. On the other hand, in the first cross-claim Mr Cunliffe asserted that DPL owed him $342,003.55 for the provision of legal services by Norton White in respect of the conduct of the Proceedings on behalf of DPL. As a consequence of the evidence given before the primary judge including concessions made by Mr Cunliffe in cross-examination, that amount was reduced to $314,783.01 which was in turn to be further reduced although the details of that further reduction are not presently relevant.

[31]

THE REASONING OF THE PRIMARY JUDGE WITH RESPECT TO HIS ANSWER TO QUESTION 1.6(a) 39 At [112] of his reasons, the primary judge noted the submission on behalf of the Land Council that since Mr Hillig validly terminated all retainers of Norton White on 22 May 2006, Mr Cunliffe had no entitlement to costs in respect of any legal services provided after that date. He noted Mr Cunliffe's concession that Norton White's retainer came to an end on 13 December 2006 when an order was made for the winding up of DPL and a liquidator was appointed to that company but that he claimed that there was a valid retainer giving rise to an entitlement to costs for work done up to that date. 40 His Honour then made reference at [114] to the declarations made by him on 19 June 2006 to the effect that Mr Hillig's actions of 22 May 2006 were inoperative and ineffective with the result that the directors of DPL remained in office and Mr Cunliffe remained DPL's solicitor. Those orders remained in force until well after 13 December 2006 as the Court of Appeal did not reverse his Honour's decision until 29 April 2008. 41 Thus, in the period from 22 May 2006 to 13 December 2006 "the position was that although the Norton White Melbourne retainer had been validly terminated, the validity of the termination had not been confirmed by the Court; rather, there were binding declarations and orders in force to contrary effect." 42 At [115] his Honour referred to [32] and [33] of the reasons of McColl JA, with whom Beazley and Giles JJA agreed, in Hillig (No.1). However, it is appropriate to refer also to [30] and [31]: "30 It appears that by the time the appeal was heard DPL had transferred substantially all its assets to DLALC except for an amount of $430,000 set aside in Barrett J's December 2006 orders. The outstanding costs issue which Barrett J has yet to resolve turned, Mr Murr informed the Court, on the validity of the appellant's [Mr Hillig's] steps of 22 May 2006. Notwithstanding this statement, at the end of the oral argument, Mr Murr submitted that if the Court upheld the appeal it should order the respondents to pay the appellant's costs both of the proceedings before Austin J and of the appeal.

[34]

33 This submission appeared to me to be based on a misconception. Acts done according to the exigency of a judicial order afterwards reversed are protected as being 'acts done in the execution of justice, which are compulsive': Commissioner for Railways (NSW) v Cavanough [1935] HCA 45; (1935) 53 CLR 220 (at 225) per Rich, Dixon, Evatt and McTiernan JJ. This principle is a corollary of the proposition that an order made by a court of competent jurisdiction must be obeyed unless and until that order is discharged: Hadkinson v Hadkinson [1952] P 285 (at 288) per Romer LJ, cited with approval by Lord Diplock in delivering the judgment of the Privy Council in Isaacs v Robertson [1985] AC 97 (at 101-102)." 43 At [116] the primary judge noted that McColl JA returned to what he referred to as "this general territory" in Hillig (No.2). He placed particular reliance upon what her Honour said at [55] and [56] of her reasons. Before reciting those paragraphs it is important to read all the paragraphs from the reasons of McColl JA upon which the primary judge relied in context. Hillig (No.2) concerned the question of who should pay the costs of the original hearing before the primary judge as well as of the appeal. In this respect it may be noted that in Hillig (No.1), following the appointment of a liquidator to DPL, a Notice of Change of Solicitor was filed on behalf of DPL as well as a submitting appearance except as to costs. Further, on 13 March 2007 the second to seventh respondents (the second to sixth respondents being the former directors of the Land Council and DPL and the seventh respondent being Mr Cunliffe) also filed submitting appearances except as to costs. Essentially, therefore, the appeal in Hillig (No.1) proceeded without a contradictor. 44 The issue of costs foreshadowed by her Honour in the paragraphs in Hillig (No.1) which I have recorded at [42] above, morphed into an application that Mr Cunliffe should be visited with the costs orders that Mr Hillig and DPL sought to the extent that he had conducted the proceedings before the primary judge (but not the appeal) on DPL's behalf. That application was made in the context, referred to by her Honour at [47] and [48] of Hillig (No.2), that it was common to order a solicitor personally to pay the costs he has thereby caused parties to incur when he has taken unauthorised steps in litigation. Where a solicitor has acted without authority for one of several parties to proceedings then, subject to discretionary considerations, the solicitor will be ordered to pay so much of the other party's costs as were attributable to the parties for which the solicitor purported to act being joined as parties. 45 As her Honour noted at [49], according to English authority, the Court's jurisdiction to make such an order was founded on the premise that "a solicitor who does not in fact have authority to represent a plaintiff is liable to other parties on an implied contract that he had authority." 46 At [50] McColl JA referred to the judgment of Bryson J (as his Honour then was) in Zimmerman Holdings Pty Ltd v Wales [2002] NSWSC 447 at [5]-[6] to the effect that the common law approach should no longer be applied given the discretionary powers as to costs in s 76(1) of the Supreme Court Act 1970 (the predecessor of s 98(1) of the Civil Procedure Act 2005). Her Honour also referred to the provisions of UCPR 42.3 which provided that the court may not, in the exercise of its powers and discretions under s 98, make any order for costs against a person who is not a party to the proceedings with an exception with respect to an order for costs against a person who purports, without authority, to conduct proceedings in the name of another person. 47 The question that therefore arose in Hillig (No.2) was whether, on the basis that Mr Cunliffe or Norton White did not have authority to conduct proceedings on behalf of DPL as a consequence of this Court's decision in Hillig (No.1), he (Mr Cunliffe) should be required to pay the costs of Mr Hillig and DPL in respect of the proceedings both at first instance and on appeal in the Hillig litigation. 48 At [58] McColl JA rejected the submission that Mr Cunliffe pay Mr Hillig and DPL's costs of the trial before Austin J. In coming to that conclusion, and after referring to the appropriate approach to the issue of a solicitor non-party purporting to act without authority, her Honour said (omitting citations): "53 The first question is whether Mr Cunliffe should be visited with the costs orders the appellant and the first respondent seek to the extent he conducted the proceedings on Darkinjung's behalf. In determining this question it should be taken into account that all three applications before the primary judge turned on the one issue: the efficacy of the Resolutions. ... Mr Cunliffe could not determine by reference to objective facts whether or not the Resolutions were effective and, therefore, whether or not Darkinjung, and ergo its directors, had authority to retain him. Rather, as the outcome of the primary proceedings demonstrated, there was at least an arguable case that the Resolutions were ineffective.

[38]

57 In my view, Mr Cunliffe was entitled to proceed on the basis that the efficacy of the Resolutions and the question whether Darkinjung could retain him, was an issue of law which should properly be determined by the Court and that the defendants should have legal representation for the purposes of that contest. Accordingly I would not exercise the UCPR 42.3(d) power against him in relation to the trial." 49 It will thus be appreciated that her Honour's remarks in both Hillig (No.1) and Hillig (No.2) which I have recorded at [42] and [48] above were made in the context of a submission on behalf of the Land Council and DPL that Mr Cunliffe should personally pay the costs of the Hillig litigation both at first instance as well as the appeal. 50 At [117] of his reasons the primary judge recognised that when McColl JA said that Mr Cunliffe was entitled to proceed to act, she was conveying the idea that in the exercise of its discretion as to costs orders, the Court would regard that conduct as fair and reasonable, and not a course of unauthorised conduct that was, in the circumstances, in any way culpable. His Honour continued: "She was not intending to lay down a legal right for Mr Cunliffe to continue to act. My task is to determine a legal question. Therefore her observations in the costs judgment do not directly assist me. But it is helpful for my purposes that her Honour regarded it as reasonable for Mr Cunliffe to proceed on the basis that the efficacy of Mr Hillig's actions was an issue of law that should properly be determined by the Court and that DPL should have legal representation for that purpose." 51 The primary judge then reasoned as follows: "118 It seems to me that the quoted observations in the Court of Appeal's principal judgment provide the key to a solution of the matter argued before me. It is established, as McColl JA said at [33], that an order made by a court of competent jurisdiction must be obeyed unless and until that order is discharged. My orders of 19 June 2006 included declarations of right binding on the parties and having the effect, inter alia , of asserting the invalidity of Mr Hillig's actions and consequently the invalidity of the purported termination of retainer. Therefore after my declarations and orders were made and before they were set aside, it was not open to the parties, including DPL, to proceed as if Norton White's retainer had been terminated by Mr Hillig. To put the matter positively, DPL was entitled by my declarations and orders to regard Norton White as continuing to be retained under the contractual arrangements that were in place before Mr Hillig purported to act. As was later established by the Court of Appeal, the retainer had in fact been terminated, but DPL and the other parties to the litigation were bound to act as if the retainer remained in place until my declarations and orders were set aside.

[57]

In response to paragraph 30, which I have recorded at [57] above, the response was " Not relevant to the preliminary questions …". 61 In both his written and oral submissions on the appeal, Mr Cunliffe submitted that the first cross-claim had been pleaded widely and alleged material facts necessary and sufficient to support a claim based on a quantum meruit without pleading the actual words "on a quantum meruit". The case was not conducted, so it was contended, on the pleadings but on the evidence and the issues for determination were those that were to be determined by answers to the separate questions. 62 Mr Cunliffe further submitted that the Land Council and DPL had, at paragraph 30 of their opening written submissions, referred to the question of a quantum meruit which was, therefore, "in the ring". In any event, the Land Council and DPL were not in any way prejudiced by the failure to plead the words "quantum meruit". The work performed and the request for the work to be performed were in evidence as the primary judge found. There was no evidence that the Land Council or DPL would have adopted a different course at trial had the cross-claim specifically pleaded a claim based on quantum meruit. 63 In my opinion Mr Cunliffe's submissions should be rejected. It was not suggested that in the course of the hearing any reference was made to a claim based on quantum meruit and there is no reference to any submission on the part of Mr Cunliffe in the short oral submissions that were made which advanced any such claim. Furthermore, the responses in Mr Cunliffe's final written submissions to paragraphs 29 and 30 of the Land Council and DPL's opening written submissions makes it clear, first, that Mr Cunliffe was relying upon a contractual right for payment of his legal fees and, second, any claim based on a quantum meruit was irrelevant. 64 In the foregoing circumstances, in my respectful opinion it was inappropriate for the primary judge to determine Question 1.6(a) upon the basis of a claim for a quantum meruit when such a claim had never been in issue beforehand and he had received no relevant submissions relating to it. That is not to say that Question 1.6(a) could not have been answered in a manner that in effect reserved the question as to whether such a claim could be established. But it was not open to his Honour to determine an issue for the purpose of answering a question that had not been the subject of proper argument before him. 65 It may well be, as his Honour contemplated at [122] of his reasons, that to not deal with any issue of quantum meruit would leave the answer to Question 1.6(a) "incomplete". But of itself that did not provide a basis to deal with an issue that had been neither pleaded, argued nor the subject of submissions. In this respect I do not suggest that the parties were necessarily confined to the pleadings had the question of a claim based on a quantum meruit been directly raised for consideration and submissions directed to it. But that was not the case. The parties did not conduct the proceedings before his Honour on that basis.

[58]

WAS THERE A VALID REQUEST BY DPL FOR MR CUNLIFFE TO PROVIDE IT WITH LEGAL SERVICES FOR THE PURPOSE OF THE PROCEEDINGS? 66 I have already indicated that in my view Mr Cunliffe obtains no comfort from the remarks of McColl JA in either Hillig (No.1) or Hillig (No.2) which was directed to a different issue. It is noteworthy that in Hillig (No.2) at [46] her Honour observed that the effect of the Court's decision in Hillig (No.1) was that: "on and from the date they [the resolutions of Mr Hillig] were passed (22 May 2006) the retainer of Messrs Norton White was withdrawn and he had no authority to continue to act for [DPL]." 67 As I have indicated, Mr Cunliffe relied heavily upon the decision of the High Court in Cavanough. The respondent in that case was an officer of the Commissioner for Railways and, as such, received a certain salary. He was summarily convicted of larceny under the relevant section of the Crimes Act 1900. He appealed from that conviction to Quarter Sessions, which upheld his appeal and set aside the conviction. During the period that elapsed from his conviction until its reversal, he received no salary and the performance of his duties was suspended. The question for the High Court's decision was whether the respondent was entitled to recover his unpaid salary. 68 Rich, Dixon, Evatt and McTiernan JJ in a joint judgment held that he was so entitled because, his conviction having been quashed, he could not be considered ever to have been convicted and could not be deemed to have ever vacated his office. His conviction was avoided ab initio. Their Honours adopted the observation of Coleridge J in R v Drury (1849) 3 Car. & K., at 199; 175 E.R., at 520 where his Lordship said: "The judgment reversed is the same as no judgment". 69 After noting that the conviction was "utterly defeated and annulled", their Honours continued in the following terms (omitting citations): "… Acts done according to the exigency of a judicial order afterwards reversed are protected: they are 'acts done in the execution of justice, which are compulsive'. And proceedings which, although based upon a judgment, are brought to completion before its reversal are not avoided. For 'collateral acts executory are barred, but not collateral acts executed'. But 'upon the reversal of a judgment against any person convicted of any offence, the judgment, execution and all former proceedings become thereby absolutely null and void. If living, he (or if dead, his heir or personal representative, as the case may be) will be entitled to be restored to all things which he may have lost by such erroneous judgment and proceedings, and shall stand in every respect as if he had never been charged with the offence in respect of which judgment was pronounced against him'. As the respondent in contemplation of law was never out of office, he is entitled to the salary attached to it. …" 70 At [118] of his reasons, which I have recorded at [51] above, the primary judge stated in the last sentence that notwithstanding the decision of this Court in Hillig (No.1), DPL and the other parties to the litigation (being the existing five directors of DPL as well as Mr Cunliffe) were bound to act as if Norton White's retainer remained in place until such time as his Honour's declarations were set aside. If his Honour intended by this statement to assert that as the retainer remained in place, the parties to it were contractually bound, then he was in error for the effect of this Court's decision in Hillig (No.1) was to terminate that retainer as and from 22 May 2006. 71 In any event, the declarations did not compel the then directors of DPL to request or otherwise require Mr Cunliffe to provide legal services to DPL for the purpose of the Proceedings. They permitted the directors to do so but did not mandate such a course. 72 This distinction was adverted to by the Court in Dr Drury's Case (1610) 8 Co. Rep.; 77 E.R. 688 at 691 where their Lordships said: "There is a difference between mean acts done in the execution of justice, which are compulsive, and acts which are voluntary: and, therefore, if an erroneous judgment is given in debt, and the Sheriff, by force of a fieri facias sells a term of the defendant, and afterwards the judgment is reversed by a write of error, yet the term shall not be restored, but only the sum because the sheriff was commanded and compelled by the King's writ to sell it. But if a capias ullagatum is awarded, whereby the sheriff is commanded to take the body … and by force of that writ, the sheriff, by inquisition, takes the goods and chattels of the man outlawed and sells them, and afterwards the outlawry is reversed, the party shall be restored to his goods and chattels, because the sheriff was not commanded nor compelled by the King's writ to sell them." 73 In the present case the acts of the defendant directors in requesting Mr Cunliffe to continue to provide legal services after 22 May 2006 were, relevantly, voluntary and not compulsive. In these circumstances, it is not open to Mr Cunliffe to rely on the primary judge's declarations as providing authority for the directors to make that request. On the contrary, the effect of the decision of this Court in Hillig (No.1) in reversing the primary judge's findings and setting aside his declarations was that as and from 22 May 2006, the defendant directors were no longer authorised to give instructions to Mr Cunliffe on behalf of DPL. 74 Furthermore, the giving of those instructions was not in accordance with the exigency of a judicial order afterwards reversed. During the course of argument the example was given of such an order, namely, where a sequestration order is made under the bankruptcy legislation against a person's estate then any act of the Official Trustee in obtaining the bankrupt's property would be protected in the event that the sequestration order was later annulled. In other words, the Official Trustee could not be held liable for trespass to goods. No such "exigency" arose in the present case. 75 Accordingly, in my opinion the defendant directors of DPL were not authorised to make the requests referred to by the primary judge at [120] of his reasons. An unauthorised request to perform services on behalf of another is no request at all with the consequence that it cannot be relied upon for the purpose of establishing a claim based on a quantum meruit. The compulsion principle has no application to the present case.

[59]

CONCLUSION 76 Subject to some possible exceptions such as the doctrine of necessitous intervention, a quantum meruit in the case of an ineffective contract depends upon a request which, in the case of the company requesting the provision of services, in turn depends upon the authority of the relevant officers of the company to make that request. In the present case, the contract of retainer between DPL and Norton White was validly terminated as and from 22 May 2006. Furthermore as and from that date the defendant directors ceased to have authority to act as directors of DPL. It follows that the decision of this Court in Hillig (No.1) had retrospective effect and operated as if the primary judge's declarations had never been made. 77 Insofar as Mr Cunliffe's claim for a quantum meruit rested upon the defendant directors of DPL having authority to request him to provide legal services to DPL after 22 May 2006, that authority did not exist. It follows that his Honour was in error in finding that it did and that the requirement that there had been a valid request for the provision of legal services notwithstanding the decision of this Court in Hillig (No.1) had been established. 78 I note that after the primary judge delivered his decision in the matter under appeal on 1 March 2010, Palmer J on 25 May 2010 gave leave to Mr Cunliffe to amend the first cross-claim. Those amendments specifically plead a claim based on a quantum meruit. The fate of that amended cross-claim remains to be determined. It is inappropriate for this Court to make any comment with respect to it. However, for the reasons to which I have already referred, and given that the issue of a quantum meruit formed part of his Honour's answer to Question 1.6(a), the answer his Honour gave to Question 1.6 should be varied so as not to shut Mr Cunliffe out of pursuing his amended cross-claim if he wishes to do so. 79 So far as the answer to Question 1.6(b) is concerned, the Land Council and DPL submitted that if the appeal was allowed the words "but claimed on a quantum meruit basis" should be deleted from that answer. However, in my view it is neither necessary nor appropriate for those words to be deleted given the subject matter of the question. There is a significant difference between Question 1.6(a) and Question 1.6(b). His Honour's answer to the former stated that Norton White acquired an entitlement to recover reasonable remuneration on a quantum meruit basis. It established an entitlement that in my view the solicitors do not necessarily have. Question 1.6(b) involves a different issue and the words "but claimed on a quantum meruit basis" which the Land Council and DPL seek to have omitted, do not establish any entitlement to any such claim. 80 In the event that ultimately Mr Cunliffe establishes such an entitlement, it is appropriate that that part of the answer to Question 1.6(b) should remain. The retention of those words in no way prejudices the stance of the Land Council and DPL that Mr Cunliffe has no entitlement to a claim on a quantum meruit basis. It follows that it is unnecessary to vary the terms of his Honour's answer to Question 1.6(b). 81 I would therefore propose the following orders:

Darkinjung Local Aboriginal Land Council v Darkinjung Pty Ltd

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