Darkinjung Local Aboriginal Land Council v Darkinjung Pty Ltd & ors

CITATION : Darkinjung Local Aboriginal Land Council v Darkinjung Pty Ltd & ors [2010] NSWSC 132

DECISION : Questions for separate determination answered under heading "Conclusions"

CATCHWORDS : LEGAL PROFESSION - solicitor in Victoria, client in New South Wales - first instructions rule - meaning of "matter" - whether Victorian or New South Wales legal profession legislation applies - effect of choice of law clauses - PRACTICE AND PROCEDURE - effect of orders by judge at first instance, subsequently reversed on appeal, in period before Court of Appeal makes orders - where judge at first instance holds solicitor's retainer valid, but Court of Appeal disagrees - whether solicitor precluded from recovering costs

Legal Profession Act (2004) (NSW) Part 3.2 LEGISLATION CITED : Legal Profession Act 1987 (NSW), Part 11 Legal Profession Act 2004 (Vic), Part 3.2 Legal Practice Act 1996 (Vic) Part 4

Comandate Marine Corp v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45 Darkinjung Local Aboriginal Land Council v Minister for Aboriginal Affairs [2006] NSWLEC 291 Darkinjung Pty Ltd v Darkinjung Local Aboriginal Land Council & ors [2006] NSWSC 1008 Darkinjung Pty Ltd v Darkinjung Local Aboriginal Land Council & ors [2006] NSWSC 1217 Hillig v Darkinjung (2006) 57 ACSR 733; [2006] NSWSC 594 Hillig v Darkinjung Local Aboriginal Land Council [2006] NSWSC 1371 Hillig v Darkinjung Pty Ltd & ors [2007] NSWSC 683 CASES CITED : Hillig v Darkinjung Pty Ltd & ors [2008] NSWCA 75 Hillig v Darkinjung Pty Ltd (No 2) & ors [2008] NSWCA 147 Hudgson & Anor v Endrust (Australia) Pty Ltd & Anor (1986) 11 FCR 152 In Re Suco Gold Pty Ltd (in liq) (1983) 33 SASR 99 Octavo Investments Pty Ltd v Knight and Another (1979) 144 CLR 360 Re Byrne Australia Pty Ltd [1981] 1 NSWLR 394 Vacuum Oil Co Pty Ltd v Wiltshire (1945) 72 CLR 319 Wentworth v Rogers (2006) 66 NSWLR 474, [2006] NSWCA 145 Zimmerman Holdings & ors v Wales & ors [2002] NSWSC 447

Darkinjung Local Aboriginal Land Council (P/A) PARTIES : Darkinjung Pty Ltd (D1) Ian Cunliffe (D7/R)

COUNSEL : D A Smallbone with D Petrushnko (P/A) R D Shepherd with LEP Magown (D7/R)

SOLICITORS : Patrick Woods & Company (P/A) Tress Cox Lawyers Melbourne (D7/R)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

2006/00256718 DARKINJUNG LOCAL ABORIGINAL LAND COUNCIL V DARKINJUNG PTY LTD & ORS JUDGMENT 1 HIS HONOUR: The present judgment sets out my reasons for the determination of six questions set down by Barrett J for hearing and determination separately from the remainder of the proceedings. The separate questions relate to the claim by the seventh defendant, Ian Cunliffe, to entitlement to legal costs of $342,003.55 and competing claims of Mr Cunliffe and the plaintiff, DLALC, to be entitled to a fund of $430,000 that has been paid into Court.

1. Brief history of the proceedings 2 The present judgment is the latest of a substantial number reflecting disputes about the governance of Darkinjung Local Aboriginal Land Council ("DLALC"), Darkinjung Pty Ltd ("DPL"), and the Darkinjung Local Aboriginal Land Council Trust ("the Trust"). In 2004, after DLALC had contracted to sell its valuable land on the Central Coast to Mirvac Projects Pty Ltd by instalments, it established the Trust, purportedly as a charitable trust, with DPL as trustee and DLALC as sole shareholder in DPL. Later DLALC transferred substantial funds to DPL as trustee and some of those funds were used to finance certain "enterprise companies" that had been established by DLALC, and a cattle joint venture in which the Trust invested ("CattleCo"). 3 Under s 222 of the Aboriginal Land Rights Act 1983 (NSW) ("ALR Act"), the Minister (1) for Aboriginal Affairs has the power to appoint an administrator to a local aboriginal land council such as DLALC if one or more of six conditions are satisfied. One of the conditions is the receipt by the Minister of a report by an investigator who has been appointed under the Act that the funds or other property of the council have not been properly applied or managed: s 222(1)(d). An investigator, Tim Kelly, reported to the Minister on 16 August 2005, after having investigated the affairs of DLALC. His report was highly critical of certain officers of DLALC and of the management the property of DLALC. 4 On 28 October 2005 DPL instituted proceedings No 5634 of 2005 against DLALC, the enterprise companies, CattleCo and the New South Wales Aboriginal Land Council for declaratory relief as to the validity of payments made by DLALC to DPL. 5 DLALC also took proceedings in the Land and Environment Court of New South Wales against the Minister and others, the general objective of which was to prevent the Minister from appointing an administrator to DLALC. They alleged, inter alia, that Mr Kelly's report to the Minister was not an investigator's report as required by the ALR Act because, they alleged, the investigator did not conduct a procedurally fair investigation and by the time he came to report to the Minister, his term of office had allegedly expired. Those proceedings were heard on 6, 7 and 8 December 2005, and judgment was delivered on 2 June 2006: Darkinjung Local Aboriginal Land Council v Minister for Aboriginal Affairs [2006] NSWLEC 291. The Land and Environment Court held that the challenges to the investigator's report were unsuccessful and so the proceedings were dismissed. On 2 May 2006 the Minister for Aboriginal Affairs appointed Peter Hillig as administrator of DLALC, with all of the functions of DLALC. 6 Jeffrey Bradford, formerly chairman of DLALC, instituted proceedings against the Minister for Aboriginal Affairs in the Land and Environment Court on 15 May 2006, No 40389 of 2006, challenging the validity of Mr Hillig's appointment on procedural fairness and other administrative law grounds. 7 Mr Hillig developed concern that the assets of DLALC were being rapidly dispersed, and so he initiated proceedings No 2842 of 2006 (the present proceedings) on 19 May 2006 and made an immediate application for interim injunctive relief. The final orders sought in the present proceedings were orders under ss 232 and 233 of the Corporations Act (the "oppression" provisions) for the winding up of DPL and the repeal or amendment of DPL's constitution, together with declarations that the Trust and the payments made by DLALC to DPL were void. 8 On 22 May 2006, before his application for interim relief was determined, Mr Hillig purported to cause DLALC as sole shareholder of DPL to take steps having the effect of removing the directors of DPL and becoming DPL's sole director, repealing the constitution of DPL and terminating the retainer of DPL's solicitor, Mr Cunliffe of Norton White Melbourne. Mr Hillig's actions were challenged by DPL and its directors. He had acted unilaterally in reliance on his powers as administrator being sufficient to permit him to exercise DLALC's powers as sole shareholder of DPL to remove the directors and repeal the constitution, notwithstanding certain provisions in DPL's constitution. Those provisions (referred to in later judgments as "the Provisos") were to the effect that the DPL in general meeting could not remove a director or repeal the constitution except with an affirmative vote of 66% of the members of DLALC. 9 I held, in a judgment delivered on 15 June 2006 (Hillig v Darkinjung (2006) 57 ACSR 733; [2006] NSWSC 594), by way of expedited final relief on these issues, that Mr Hillig's actions were invalid because there had been no compliance with the Provisos. I took the view (at [36]) that the administrator had assumed the functions of DLALC, but those functions did not include the functions ascribed by DPL's constitution to the members of DLALC. That reasoning treated the members of an incorporated entity in general meeting as an organ of the entity separate from the entity itself, an idea borrowed from company law. On 19 June 2006 I made declarations to the effect that Mr Hillig's actions of 22 May 2006 were inoperative and ineffective, the directors remained in office, the constitution had not been amended and Mr Cunliffe remained DPL's solicitor. I restrained Mr Hillig from holding himself out or purporting to act as a director of DPL in reliance on his actions of 22 May. 10 Other judges of this Court subsequently decided, upon analysis of ALR Act, that Local Aboriginal Land Councils are "single-organ corporations", since such a Council has only one deliberating and decision-making body, namely the members assembled in a meeting conducted in accordance with the ALR Act: Darkinjung Pty Ltd v Darkinjung Local Aboriginal Land Council & ors [2006] NSWSC 1008, at [142] per Barrett J; Hillig v Darkinjung Pty Ltd & ors [2007] NSWSC 683, at [20] per White J. 11 On appeal from my judgment of 15 June 2006, the Court of Appeal of New South Wales adopted the reasoning of Barrett J and White J and disagreed with my adoption of the company law analogy: Hillig v Darkinjung Pty Ltd & ors [2008] NSWCA 75 (29 April 2008). McColl JA, with whom Beazley and Giles JA agreed, said (at [109]): "Although it might be accepted that a corporation has legal personality apart from its members because it may own property and have legal rights and duties ( New South Wales Aboriginal Land Council v Jones (1998) 43 NSWLR 300 (at 305) per Handley JA), that is not the model of the Local Aboriginal Land Council created by the ALR Act. As Barrett J and White J have demonstrated, a Local Aboriginal Land Council is a single-organ corporation." 12 Thus, when Mr Hillig, upon his appointment as administrator, was invested under the ALR Act with the functions of DLALC, he became the single decision-maker for DLALC and had the function of making all decisions in lieu of the members, subject to any statutory limitations (per McColl JA at [115]). Consequently, Mr Hillig was able to act in disregard of the Provisos in DPL's constitution and his decisions on 22 May 2006 were valid and effective. My declarations and orders to the contrary were set aside by the Court of Appeal on 29 April 2008. 13 Most of the events to which the present judgment relates happened in the period from about September 2005 until the end of 2006. During the period from 19 June 2006 when I made my orders and the end of that year, it was incumbent on the parties to treat my orders as valid orders that were to be obeyed, notwithstanding that they became subject to appeal. As McColl JA observed on appeal (at [33]), "an order made by a court of competent jurisdiction must be obeyed unless and until that order is discharged". 14 The trials of the present proceedings and proceedings No 5634 of 2005, inter alia, were conducted together by Barrett J, who delivered reasons for judgment on 3 October 2006 (Darkinjung Pty Ltd v Darkinjung Local Aboriginal Land Council & ors [2006] NSWSC 1008), 16 November 2006 (Darkinjung Pty Ltd v Darkinjung Local Aboriginal Land Council & ors [2006] NSWSC 1217) and 12 December 2006 (Hillig v Darkinjung Local Aboriginal Land Council [2006] NSWSC 1371). Prior to the last hearing Mr Hillig caused DLALC as sole shareholder of DPL to pass a special resolution that it be wound up by the Court. 15 On 13 December 2006 his Honour made extensive orders, including: a declaration that certain specified payments made by DLALC to DPL in the period from 15 July 2004 to 7 July 2005 in a total amount in excess of $25 million were beyond the power of DLALC, and that those funds were received by DPL upon trust for DLALC; by Order 3, a declaration that the whole of the funds and assets of DPL were held by it upon trust for DLALC; an order (Order 6) directing DPL to transfer all of its funds and assets to DLALC, except for a sum of $430,000 [which I shall call, together with investment income, "the Fund"], which was to be paid into Court to abide the determination of the amount fairly to be allowed to DPL for its expenses of acting as trustee of the trust of its assets in favour of DLALC, its expenses of prosecuting proceedings No 5634 of 2005, and its expenses of conducting a defence in the present proceedings [I shall refer to these two proceedings together as "the Proceedings"]; an order dismissing Mr Hillig's claims for relief under the oppression provisions; an order that DPL be wound up by the Court on the ground specified in s 461(1)(a) of the Corporations Act (that the company has passed a special resolution for winding up by the Court), and that a liquidator (Richard Porter) and had be appointed. 16 It seems to me that the trust declared by Barrett J in Order 3 was a resulting trust arising from his Honour's decision that the money paid by DLALC to DPL had been paid ultra vires. His Honour held that the payments made by DLALC to DPL were not received as an addition to the Trust that had been constituted with DPL as trustee. 17 The Fund was paid into Court in compliance with Order 6. The orders of 13 December 2006 apparently disposed of Mr Hillig's and DPL's respective claims for relief as plaintiffs in the Proceedings. But Order 6 required some implementation steps with respect to the Fund.

Total amount claimed in first cross-claim $342,003.55 Less: Invoice No 256191: $18,612.00 Balance of invoice No 255885 $8,608.54 Net balance $314,783.01 33 Further deductions are required to reflect concessions made in the witness box to the effect that some invoices included charges for work extraneous to the Proceedings. Note that $30,796.51 relates to pre-22 May 2006. 4. The third cross-claim 34 On 11 November 2008 DLALC filed a cross-claim joining DPL and Mr Cunliffe and others as cross-defendants ("the third cross-claim"). DLALC seeks, inter alia: leave to proceed against DPL; orders in favour of DPL for recovery of money paid without authority after 22 May 2006 as money had and received to the use of DPL; a declaration that DPL incurred no costs between 22 May 2006 and 13 December 2006; in relation to costs paid prior to 22 May 2006, orders for the provision of information, accounts and inquiries, designed to identify the costs against which that money was applied and the matters to which the payments related; an order that would deprive DPL of its indemnity against trust assets, in respect of costs of the Proceedings. 35 The amount of the payments made to Norton White Melbourne after 22 May 2006 is not in dispute, and the total is $816,948.09. The third cross-claim is pleaded in considerable detail. 5. The separate questions 36 It will be seen that, although both cross-claims range more widely, they include competing claims to entitlement to the Fund. On 12 August 2009 Barrett J made orders for the separate trial and determination of a series of six questions relating to the position of Mr Cunliffe and Norton White Melbourne with respect to the costs now claimed by Mr Cunliffe, and the competing claims by Mr Cunliffe and DLALC against the Fund. Essentially the separate questions focus on the circumstances of entry into costs agreements, the content of those agreements, the identity of the solicitors who made them, any limitations on the ability of the solicitors to recover costs, and the effective termination of the costs agreements. 37 The questions are: 1.1 Whether the first defendant [DPL] entered into a costs agreement under a document provided by the solicitors then trading as Norton White Melbourne in September, 2005? 1.2 If it was made, who were the solicitors trading as Norton White Melbourne who were party to it? 1.3 If it was made, during what period was it in force? 1.4 In respect of the costs agreement made pursuant to the document dated 12 May, 2006 from the solicitors trading as Norton White Melbourne: (a) who were the solicitors who were party to that agreement; and (b) during what period was it in force? 1.5 Whether there is by reason of non-disclosure of any of the matters set out in paras 35 to 40 of the defence of the first cross-defendant to the first cross-claim an effect: (a) on the ability of the solicitor or solicitors (if otherwise entitled) to proceed to recover, tax or assess any of the costs claimed in the first cross-claim; or (b) on the liability of the solicitor or solicitors (if otherwise liable) to be proceeded against for assessment or taxation of any of the costs which are the subject of the first cross-claim or the third cross-claim; and (c) if the answer to (a) or (b) is 'yes', what is that effect, including the effect, if any, on the appropriate jurisdiction for taxation and assessment? 1.6 What was the effect, if any, of termination of the costs agreements or either of them on: (a) the ability of the solicitor or solicitors (if otherwise entitled) to proceed to recover, tax or assess any of the costs claimed in the first cross-claim; or (b) the liability of the solicitor or solicitors (if otherwise liable) to be proceeded against for assessment or taxation of any of the costs which are the subject of the first cross-claim or the third cross-claim? 6. The costs agreements 38 According to the evidence presented for Mr Cunliffe, there were two relevant costs agreements. There was some contention at the hearing as to the proper characterisation of the "matters" to which the costs agreements related. Counsel for DLALC contended that the first costs agreement related to what he called the "Validity of Trust" matter and the second related to the "Appointment of Administrator" matter. I shall adopt those descriptions for the purposes of exposition, and return to analyse the proper subject matter of the costs agreements later. 39 Counsel for Mr Cunliffe carefully noted the distinction between a costs agreement and the legal retainer of the solicitor by the client (citing Wentworth v Rogers [2002] NSWSC 709). I have tried to keep this distinction firmly in mind, but in the end I have reached the conclusion that the distinction has no significant role to play here, especially since Mr Hillig purported to terminate all retainers as well as costs agreements on 22 May 2006.

6.1 The retainer and costs agreement for the Validity of Trust matter 40 In his affidavit of 20 March 2009 (his eighth affidavit) Mr Cunliffe said that he began acting for DLALC and DPL in September 2005, although he altered the time to October in his 11th affidavit (24 August 2009; see also T 125). He said in oral evidence (T 86) that he was first approached by Darkinjung leaders in late September 2005, initially because an investigator had been appointed and they were concerned about the investigator's report. He said he prepared a costs agreement and forwarded it to DLALC. He said the people he was dealing with were Damien Aidon, chief executive, and Jeffrey Bradford, chairman of DLALC and a director of DPL (T 86). 41 The documentary evidence includes a letter dated 30 September 2005 from Mr Cunliffe as a partner of Norton White Melbourne to Damien Aidon as chief executive of DLALC, thanking him for appointing Norton White Melbourne to provide advice "in relation to issues confronting the Darkinjung Local Aboriginal Council arising out of the activities of an investigator appointed under section 216 of the Aboriginal Land Rights Act 1983 (NSW)". That appears to relate to DLALC's challenge to Mr Kelly's report as investigator under the ALR Act. I shall refer to legal services arising out of Mr Kelly's activities as investigator as "the Kelly matter". 42 The letter continued: "This proposed costs agreement is intended to replace the costs agreement dated 2 September 2005 that we sent to George Brownbill." The earlier costs agreement is not in evidence. The letter proceeded to set out various matters of the kind that one would expect to find in a costs agreement. There was provision at the bottom of the letter for Mr Aidon to sign an acknowledgement that he had read and approved the letter. There is no evidence that he did so. 43 The letter said that the law of Victoria was to apply to legal costs in the matter. On its face, it appears to have been sent from Mr Cunliffe in Melbourne and to Mr Aidon in Wyong, NSW on about 30 September 2005. The method of transmission is not revealed. But according to Mr Cunliffe, the cost agreement was accepted when he subsequently received instructions, presumably in Melbourne. 44 Mr Cunliffe said that when he began to investigate the concerns of the Darkinjung leaders relation to the investigator, it became clear that one of the major problems they were experiencing, and a problem that the investigator had focused on, was that there were serious questions being raised about the validity of the Trust. He perused multiple advices by senior counsel on that subject. He said that when it became clear to him that the nub of the problem was an issue about the validity of the Trust, he advised that this matter needed to be dealt with directly by seeking the advice of the Court. 45 Mr Cunliffe said in his oral evidence in chief that Mr Bradford and Mr Aidon accepted his recommendation to seek the advice of Alan Robertson SC on how best to go about seeking declaratory relief as to "the validity of the trust and its dealings". According to Mr Cunliffe, he obtained Mr Robertson's advice. He said Mr Robertson advised that in such proceedings DPL should be the plaintiff and DLALC should be a defendant. As Norton White Melbourne were to act for the plaintiff, DPL, they could not also act for DLALC. He claimed (T 88) that after he had obtained Mr Robertson's advice, he telephoned Mr Bradford and they had a discussion in which Mr Bradford told him to proceed as advised, and he proposed to Mr Bradford that he would go ahead on the basis of the same terms as outlined in the costs agreement sent to DLALC in the Kelly matter, and he said Mr Bradford agreed. 46 In cross-examination Mr Cunliffe was taken to some documents and he gave a different version of his taking of instructions in the Validity of Trust matter. He was aware that Gilbert & Tobin had acted extensively in respect of the Trust and that there was some unhappiness with Gilbert & Tobin by October 2005 (T 126). After reviewing documents that became Ex A11, he agreed that he had been told on 19 October 2005 that DLALC and DPL were about to terminate their retainer of Gilbert & Tobin. He said he travelled from Melbourne to Wyong on 20 October and had discussions on that day with Jeffrey Bradford and others (T 130), and on 21 October he returned to Melbourne and commenced drafting the initiating process for the Validity of Trust matter, which led to proceedings No 5634 of 2005 in this Court (T 129). 47 Mr Cunliffe's account in his oral evidence is not quite consistent with the documentary evidence. The first invoice in relation to the Validity of Trust matter, according to the Accounts for the Conduct of Matters document at Ex IGC 7, is invoice No 256071 dated 24 August 2005. It appears from Ex A12 that conferences with Mr Alan Robertson SC took place on and after 25 October 2005, whereas Mr Cunliffe began drafting the initiating process on 21 October. Mr Cunliffe said in T 87 that he did not recall whether he received Mr Bradford's instruction to go to the Supreme Court for declarations as to the validity of the Trust for or after he had taken Mr Robertson SC's advice. But the documentary evidence indicates that he probably obtained Mr Bradford's instruction first and consulted Mr Robertson later. 48 Piecing together Mr Cunliffe's not entirely consistent evidence and the documentary evidence, it seems to me more likely than not that: after receiving instructions on the Kelly matter in late September 2005, Mr Cunliffe formed the view, upon considering the investigator's concerns and reviewing various advices of counsel, that there needed to be a judicial determination of the validity of the Trust; he was aware of dissatisfaction with Gilbert & Tobin and was told on 19 October that a decision had been taken to terminate their services; he travelled to Wyong and had discussions with Mr Bradford and others on 20 October, and in those discussions he advised that proceedings should be instituted in the Supreme Court of New South Wales to test the validity of the Trust; Mr Bradford and perhaps others gave him those instructions at their meeting in Wyong; Mr Bradford had authority to act in behalf of DPL, as well as on behalf of DLALC; Mr Cunliffe returned to Melbourne on 21 October and on that day he began to draft the initiating process for proceedings to determine the validity of the Trust; he took advice from Alan Robertson SC on this matter beginning on 25 October 2005, and Mr Robertson advised him that the plaintiff in the proceedings should be DPL; at some time after he received Mr Robertson's advice, Mr Cunliffe had a discussion with Mr Bradford, probably on the telephone, in which he explained that the proper plaintiff in the proposed proceeding should be DPL and that Mr Cunliffe could not also act for DLALC, and Mr Bradford agreed; at some time, either at their meeting on 20 October or in a later telephone conversation, Mr Cunliffe proposed to Mr Bradford that the terms of the costs agreement for the Kelly matter should apply to the Validity of Trust matter as well, and Mr Bradford agreed. 49 These findings lead to the conclusion that Mr Bradford on behalf of DPL and DLALC first instructed Mr Cunliffe in relation to the Validity of Trust matter on 20 October 2005 during their meeting at Wyong, NSW.

6.2 The retainer and costs agreement for the Appointment of Administrator matter 50 There is a letter dated 12 May 2006 from Mr Cunliffe as a partner in Norton White Melbourne addressed Greg Flanders of DPL at the DLALC address in Wyong NSW. The letter refers to the firm being engaged by DPL "to help overcome the threats to the interests of Darkinjung members that is constituted by the appointment of the administrator" [sic]. It attaches an "Offer to Enter into a Costs Agreement" and a "Disclosure Statement", said to be in accordance with the Legal Profession Act 2004 (Vic). The letter of offer makes disclosure of such matters as the method of charging and termination of the agreement, and states that the law of Victoria is to apply to the offer and any costs agreement entered into pursuant to it. The disclosure document deals with various matters including the client's right to request an itemised bill. There is provision in the letter of offer for Mr Flanders to accept the offer on behalf of DPL, and the evidence indicates that he did so by signing at the bottom of the letter on 12 May 2006 and faxing it back on 15 May 2006. 51 It appears likely that the offer to enter into the costs agreement was sent by Mr Cunliffe from his Melbourne office, and Mr Flanders' acceptance of the offer was sent from DPL's Wyong office to Mr Cunliffe in Melbourne. But that does not mean that "first instructions" were received by Mr Cunliffe in Melbourne. 52 The appointment appears to have arisen out of the meeting of directors of DPL as trustee of the Trust, held at Wyong on 4 May 2006, the minutes of which are in evidence (Ex A8). Mr Cunliffe's itemised tax invoice No 255823 dated 16 May 2006 has entries for e-mails and telephone calls on 3 May, concerning "administrator appointed overnight". The detailed invoice indicates that Mr Cunliffe went to Wyong on 4 May where he attended the board meeting of DPL. According to the minutes, he advised that the appointment of Mr Hillig as administrator of DLALC on 2 May 2006 might not have been valid, and he referred to legal challenges in the Land and Environment Court and the Supreme Court. According to the minutes, the directors resolved to authorise the Trust to provide all necessary funding to cover all legal and ancillary costs with respect to any action to remove the administrator, and they also resolved that the Trust would provide the resources required to protect the interests of the DLALC members. 53 Counsel for DLALC submitted that DPL first instructed Mr Cunliffe concerning the Appointment of Administrator matter when he attended the board meeting on 4 May in Wyong. I have decided that submission is correct, having regard to what I take to be meant by the "Appointment of Administrator matter" (see below). Mr Cunliffe was doing some work that was relevant to Mr Hillig's appointment in the period before the appointment was actually made on 2 May, but it seems to me that his work in this period was referable to the Kelly matter or (if it be a different matter) the Land and Environment Court proceedings which challenged Mr Kelly's report. It was only at the board meeting on 4 May that DPL reached the decision that the Trust should fund any legal proceedings seeking to remove the administrator. It seems to me likely that Mr Cunliffe received instructions to perform legal services to overcome the threats to the Darkinjung members constituted by the appointment of the administrator immediately upon the decision of the board, acting on his advice, to apply funds for that purpose. My conclusion on this matter is consistent with Mr Cunliffe's evidence at T 110-111. 6.3 The meaning of the word "matter" in legal profession legislation 54 Both the Legal Profession Act 2004 (NSW) ("the 2004 NSW Act") and the Legal Profession Act 2004 (Vic) ("the 2004 Victorian Act") define the scope of their disclosure requirements by reference to when the solicitor first received instructions in respect of a "matter". 55 The word "matter" is not defined in either the 2004 NSW Act or the 2004 Victorian Act. It is, of course, a frequently considered word in the constitutional context, and in other contexts such as in respect of the International Arbitration Act 1974 (Cth), where it has been said that the expression "a matter" in that legislation could not have the full connotation of the phrase in the constitutional sense: Comandate Marine Corp v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45 at [235]. 56 I do not regard the constitutional jurisprudence or, for that matter, case law on the International Arbitration Act, as having any direct assistance for the purpose of interpreting the legal profession legislation. Counsel for Mr Cunliffe drew the Court' as attention to the definition of "litigious matter" in s 3.4.2 of the 2004 Victorian Act, but I find that definition to be unhelpful because it assumes the concept of "matter" and explains what makes a matter a "litigious" matter. Nor do I find dictionary definitions of any assistance, because it seems to me that so much depends upon the context in which the word is used. 57 It seems to me that in the legal profession legislation of 2004 in both States, the meaning of the words "a matter" and "the matter" is to be derived from a close consideration of the statutory context. In my opinion, those words refer to the subject matter of the solicitor's retainer, that is the client's cause or transaction on which the solicitor, for rewarded, is instructed to advise or act.

6.4 The content of the Validity of Trust matter 58 The letter of 30 September 2005 was addressed to DLALC and purported to set out a costs agreement relation to "issues confronting the Darkinjung Local Aboriginal Council arising out of the activities of an investigator" appointed under the ALR Act. That was clearly a different matter from the question of the validity of the Trust, for while the investigator made it plain in his report that the validity of the Trust was an issue of concern, it could not be described as an issue "arising out of the activities" of the investigator. It was an issue that arose out of the steps taken by DLALC and DPL with respect to the constitution of the Trust. 59 The Validity of Trust matter was, plainly enough, the provision of legal services to DLALC and DPL, later refined to DPL alone as plaintiff, order to determine whether the Trust that DLALC had purported to constitute with DPL as trustee was a valid trust. The legal services encompassed an application to the Court, which became proceedings No 5634 of 2005.

6.5 The content of the Appointment of Administrator matter 60 The letter of 12 May described the Appointment of Administrator matter as the task of helping overcome threats to the interests of Darkinjung members constituted by the appointment of the administrator. At that stage, Mr Hillig had not initiated proceedings No 2842 of 2006, which began only when Mr Hillig sought urgent ex parte relief on 19 May 2006. Therefore the description in the letter could not have extended to those proceedings, as Mr Cunliffe eventually acknowledged in cross-examination (T 118-9). 61 On its face, the description in the letter included legal services relating to the validity of Mr Hillig's appointment as administrator and his powers in that office. The question of validity of the appointment was tested in proceedings No 40389 of 2006 commenced on 15 May 2006 by Mr Bradford against the Minister for Aboriginal Affairs in the Land and Environment Court. The application identified Mr Cunliffe as acting for Mr Bradford. In those proceedings Mr Bradford challenged the validity of Mr Hillig's appointment on procedural fairness and other administrative law grounds. As a matter of construction, the description in the letter of 12 May included legal services in respect of those proceedings, since it appears from the minutes of the directors' meeting that Mr Bradford was acting on behalf of DPL. 62 On 11 May 2006 Mr Cunliffe wrote to Mr Hillig contending that Mr Hillig's powers as administrator under the ALR Act did not extend to the exercise of any powers conferred on the members of DLALC or upon DLALC under the Corporations Act (Ex A9). Those issues would also fall within the description in the letter of 12 May. 63 The description probably also included legal services with respect to the appointment of voluntary administrators to three of the enterprise companies that had been funded by the Trust, in particular, attendance at the first meetings of creditors of those companies on 19 May 2006 (see T 119).

6.6 Mr Hillig's proceedings No 2842 of 2006 64 Mr Hillig's proceedings commenced, ex parte, on 19 May 2006. As mentioned earlier, he sought final relief under the "oppression" provisions of the Corporations Act, including an order for the winding up of DPL and orders for the amendment of its constitution. He sought to establish that DPL's assets were held on trust for DLALC. The subject matter of the proceedings was different from the Validity of Trust matter (although issues about the validity of the Trust would arise in Mr Hillig's proceedings) and it was different from the Appointment of Administrator matter because it was litigation initiated by Mr Hillig rather than litigation initiated by Darkinjung entities to challenge Mr Hillig's position. 65 Later the matter constituted by Mr Hillig's proceedings ("the Hillig Proceedings matter") expanded in various ways. One expansion was that by amendment, Mr Hillig claimed to recover DPL's assets or compensation for any deficiency, and to deprive DPL as trustee of indemnities for its liability under a deed in favour of the voluntary administrators of three of the enterprise companies. Another expansion occurred on 22 May 2006, when Mr Hillig endeavoured to pre-empt his own interlocutory application by purporting to remove the directors of DPL, put himself in their position, and terminate Mr Cunliffe's retainer. As mentioned above, I decided that his actions were invalid and made orders accordingly, but the Court of Appeal reversed my decision and set aside my orders. 66 It is likely that Mr Cunliffe first received instructions in Victoria in respect of the Hillig Proceedings matter. This is because the proceedings were commenced ex parte on a Friday (19 October) and the initiating process was served on the then directors of DPL over the weekend. It appears from Mr Cunliffe's itemised tax invoice No 255885 (said to be in the Appointment of Administrator matter) that the first work carried out in respect of Mr Hillig's proceedings was in the period from 20-22 May 2006, when it seems Mr Cunliffe was based in Melbourne and travelled from Melbourne to Canberra (according to the description of the work) on Sunday 21 May, and again on Monday 22 May. He attended at this Court for the return of Mr Hillig's application on 23 May, though by that time Mr Hillig had purported to terminate his retainer. 67 It appears that there was no written costs agreement for the Hillig Proceedings matter. In his affidavit and oral evidence Mr Cunliffe did not claim that there was any oral costs agreement for the Hillig Proceedings, or even any oral agreement that costs of that matter would be governed by the 12 May 2006 document. It appears from the invoices (for example, the detailed version of invoice No 255958, that after the 12 May 2006 costs agreement was made, all work was charged on the basis of the new agreement by invoices under the heading "Appointment of Administrator" (sometimes "Appointment of Administrator - non-litigious aspects"), even though the subject matter ranged much more widely. Mr Cunliffe said in cross-examination (T 118) that the distinction between the Validity of Trust matter and the Appointment of Administrator matter was lost sight of, and many time entries were made on the new file number which in fact related to the conduct of the Supreme Court proceedings or the Land and Environment Court matter. 68 The detailed invoices suggest that the work on the Hillig Proceedings was seen as part of the Appointment of Administrator matter, which might suggest the implication that the 12 May 2006 document would apply, but as mentioned above, the subject matter of that costs agreement does not as a matter of construction extend to the Hillig Proceedings. 7. What law was applicable to the costs agreements? 69 Essentially the issues to be addressed are whether the costs agreements are governed by New South Wales statutory law or Victorian statutory law, and in either case whether the statute was the earlier or later statute.

7.1 Old or new legislation? 70 I have found that instructions were received in the Validity of Trust matter on 20 October 2005, and in the Appointment of Administrator matter on 4 May 2006. The Legal Profession Act 1987 (NSW) ("the 1987 NSW Act") was repealed by s 735 and Schedule 1 to the 2004 NSW Act. The 2004 NSW Act commenced by proclamation on 1 October 2005. I conclude that the Legal Profession Act 1987 (NSW) did not apply in relation to costs in the Validity of Trust matter, and a fortiori, in relation to the Appointment of Administrator matter and the Hillig Proceedings matter, because in each case instructions were given after the repeal of that legislation took effect. 71 However, it appears that instructions from DLALC for the Kelly matter were first received in September 2005, before the 2004 NSW Act commenced on 1 October. Although the 1987 NSW Act was repealed by the 2004 NSW Act, there is a savings provision in Schedule 9, para 18(1) of which says that Part 11 of the 1987 Act continues to apply to a matter if the client first instructed the law practice before the commencement day. Section 48Q of the 1987 NSW Act, repealed by the 2004 Act, permitted a person holding an interstate practising certificate to practise in New South Wales only if that person complied with applicable statutory requirements relating to the practice of law that would apply to a comparable local legal practitioner. Part 11 of the 1987 NSW Act imposed mandatory disclosure obligations that would apply to a local legal practitioner and therefore to the holder of an interstate practising certificate practising in New South Wales. Because those obligations were mandatory, they could not be excluded by a contractual choice of law clause, and the obligation to comply with Part 11 applied regardless of whether first instructions were received in New South Wales or in another State. Therefore because Mr Cunliffe first received instructions in the Kelly matter before the commencement of the 2004 NSW Act on 1 October 2005, he was precluded from acting in the matter in New South Wales without compliance with Part 11 of the 1987 Act. 72 The relevant substantive parts of the 2004 Victorian Act came into force on 12 December 2005 (see s 1.1.2 and Victorian Government Gazette, 1 December 2005, page 2781), well after instructions were first received in the Kelly matter and the Validity of Trust matter. Consequently if Victorian statutory law were applicable to those matters, the relevant legislation would be the predecessor to the 2004 Victorian Act, namely the Legal Practice Act 1996 (Vic) ("the 1996 Victorian Act"). Instructions in the Appointment of Administrator matter and the Hillig Proceedings matter began in May 2006 and so on the face of it, the 2004 Victorian Act would be applicable to those matters, if Victorian law were applicable at all.

7.2 New South Wales or Victorian law? 73 Part 3.2 of the 2004 NSW Act relates to costs disclosure and assessment. Part 3.2 Division 2 (ss 303-308) deals with the application of Part 3.2. The principal provisions for present purposes were, at relevant times: "303. This Part applies to a matter if the client first instructs the law practice in relation to the matter in this jurisdiction." "306. A client first instructs a law practice in relation to a matter in a particular jurisdiction if the law practice first receives instructions from the client in relation to the matter in that jurisdiction, whether in person or by post, telephone, fax, e-mail or other form of communication." 74 The comparable Part of the 2004 Victorian Act is Part 3.4, Division 2 of which (ss 3.4.3-3.4.8) deals with the application of that Part. Section 3.4.3 is not materially different from the NSW s 303. But at the times relevant to these proceedings, s 3.4.6 were somewhat different from NSW s 306, though it was subsequently amended in 2007. In its unamended form it said: "3.4.6 A client first instructs a law practice in relation to a matter in a particular jurisdiction if the client first provides instructions to the law practice in relation to the matter at an office of the law practice in that jurisdiction, whether in person or by post, telephone, fax, e-mail or other form of communication." 75 In final oral submissions (T 135) counsel for Mr Cunliffe told the Court Mr Cunliffe would submit that, as regards the issue of what his instructions were, the relevant statute is the 1996 Victorian Act. He continued: "That particular legislation must be seen in the context of the Victorian 2004 Act and we say the 2004 Act makes it clear that, provided the instructions are received prior to the commencement of the 2004 Act, that meaning that the solicitor is instructed to act, not necessarily in respect of one particular matter or a specific matter, provided the solicitor is instructed to act. Then that means the 2004 Act does not apply and the 1996 Act is the applicable legislation throughout the period of the retainer." 76 If this submission is intended to assert that the 1996 Victorian Act will apply and the 2004 Victorian Act will not apply, as long as the solicitor has received instructions from the client on any matter prior to the commencement of the 2004 Act, then I disagree. If, on 12 December 2005, there is an existing solicitor/client relationship governed by the law of Victoria, then that existing relationship is governed by the 1996 Victorian Act. If, however, the client to that existing relationship gives the solicitor instructions on a new matter after 12 December 2005, then those fresh instructions are governed by the 2004 Victorian Act. This is because, by s 3.4.3 of the 2004 Victorian Act, Part 3.4 of that Act applies to a matter if the client first instructs the law practice in relation to the matter in the jurisdiction. The submission was not restated in final written submissions on behalf of Mr Cunliffe. 77 First instructions in the Kelly matter were received, in Victoria, well before the commencement of the 2004 Victorian Act. It appears that the 1996 Victorian Act applied. Additionally, for the reasons I have given, to the extent that Mr Cunliffe purported to execute his instructions in the Kelly matter by practising in New South Wales he came to be subject to Part 11 of the 1987 NSW Act. 78 For reasons given above, my view is that the Validity of Trust matter was a new matter upon which Mr Cunliffe first received instructions at a meeting in Wyong on 20 October 2005, even though he had previously received instructions (probably in Victoria) on the Kelly matter in late September 2005. Since the instructions were given and received in New South Wales after the commencement of the 2004 NSW Act, Part 3.2 the 2004 NSW Act applies to that matter. 79 Again for reasons given above, my view is that the Appointment of Administrator matter was a new matter, with the scope I have outlined, upon which Mr Cunliffe first received instructions at or shortly after a board meeting of DPL in Wyong on 4 May 2006. Once again, Part 3.2 of the 2004 NSW Act applies to that matter. The Hillig Proceedings matter was also a new matter upon which Mr Cunliffe first received instructions in Melbourne on the weekend of 20-22 May 2006, presumably by some communication addressed to his office. Consequently Part 3.4 of the 2004 Victorian Act applies to that matter.

7.3 Choice of law clauses 80 As noted above, both the costs letter of 30 September 2005 in relation to the Kelly matter and the Offer to Enter into a Costs Agreement of 12 May 2006 in relation to the Appointment of Administrator matter contain a choice of law clause to the effect that the agreement is governed by Victorian law. If the terms of the costs agreement in the Kelly matter were incorporated into the agreement in the Validity of Trust matter, then the choice of Victorian law clause was part of the agreement in the Validity of Trust matter. If the terms of the costs agreement in the Appointment of Administrator matter were incorporated into the agreement in the Hillig Proceedings matter, then the choice of Victorian law clause was part of the agreement in the Hillig Proceedings matter.

7.3.1 The Validity of Trust matter and the Appointment of Administrator matter 81 Suppose that after December 2005, a client first instructs a law practice in relation to a matter in the jurisdiction of New South Wales, so that Part 3.2 of the 2004 NSW Act would apply, absent any other considerations. The 2004 Victorian Act, as in force from December 2005 to 2007, makes provision to allow the client to come under that Victorian law, as follows: "3.4.4 (1) This Part applies to a matter if - (a) either- (i) this Part does not currently apply to the matter; or (ii) it is not possible to determine the jurisdiction in which the client first instructs the law practice in relation to the matter; and (b) either or both of the following apply - (i) the legal services are or will be provided wholly or primarily in this jurisdiction; or (ii) the matter has a substantial connection with this jurisdiction; and (c) either - (i) the client signs a written agreement under sub-section (2)(a) in respect of the matter; or (ii) the client gives a notification under sub-section 2(b) in respect of the matter. (2) For the purposes of sub-section (1)(c) the client may - (a) sign a written agreement with the law practice that this Part is to apply to the matter; or (b) notify the law practice in writing that the client requires this Part to apply to the matter. (3) A notification has no effect for the purposes of sub-section (2)(b) if it is given after the period of 28 days after the law practice discloses to the client (under a corresponding law) information about the client's right to make a notification of that kind, but nothing in this sub-section prevents an agreement referred to in sub-section (2)(a) from coming into effect at any time." 82 The 2004 NSW Act contains provisions that would cause New South Wales law to recognise an election by a client under s 3.4.4, as follows: "305. (1) This section applies if this Part applies to a matter by the operation of section 303 or 304. (2) This Part ceases to apply to the matter if: (a) either: (i) the legal services are or will be provided wholly or primarily in another jurisdiction, or (ii) the matter has a substantial connection with another jurisdiction, or both, and (b) either: (i) the client signs under the corresponding law of the other jurisdiction a written agreement with the law practice that the corresponding provisions of the corresponding law apply to the matter, or (ii) the client notifies under the corresponding law of the other jurisdiction (and within the time allowed by the corresponding law) the law practice in writing that the client requires the corresponding provisions of the corresponding law to apply to the matter. (3) Nothing in this section prevents the application of this Part to the matter by means of a later agreement or notification under section 304." 83 For the reasons given above, I have concluded that the costs agreements in both the Validity of Trust matter and the Appointment of Administrator matter were entered into at meetings that took place in New South Wales and accordingly they were both subject to New South Wales law. The New South Wales law at the time of both agreements was the 2004 NSW Act. Consequently that Act applies for the purposes of disclosure requirements and other matters governed by Part 3.2 of the Act, unless its application has been displaced under s 305. 84 In the present case both the Validity of Trust matter and the Appointment of Administrator matter matters are wholly connected with New South Wales. The Validity of Trust matter relates to the validity of a trust created in New South Wales under New South Wales law in respect of the proceeds of sale of New South Wales real estate. The body that created the Trust was a local aboriginal land council formed under New South Wales legislation, and the trustee was formed and administered in New South Wales. The Appointment of Administrator matter relates to the appointment of an administrator of a New South Wales local aboriginal land council by a Minister of the State of New South Wales under New South Wales legislation. Neither of these matters has any substantial connection with Victoria, in my view. Consequently s 305(2)(a)(ii) has no application. 85 However there is room for argument as to whether s 305(2)(a)(i) applies, that is whether the legal services were or were to be provided primarily in Victoria. The matter is not clear because Mr Cunliffe operated from Melbourne, but he was required to spend substantial amounts of time in New South Wales in carrying out his instructions in these matters, and to brief New South Wales counsel and to attend New South Wales hearings. 86 As far as the Validity of Trust matter is concerned, it is unnecessary to decide whether the legal services in that matter were to be provided primarily in Victoria. This is because under s 305, Part 3.2 of the 2004 NSW Act is not displaced unless, additionally, s 305(2)(b) applies. Subparagraph (2)(b)(ii) does not apply to the present case on the facts. Subparagraph (2)(b)(i) does not apply because the costs agreement relied upon in the present case, according to the evidence of Mr Cunliffe, arose out of an oral agreement between him and Mr Bradford that the existing costs agreement in the Kelly matter would also apply to the Validity of Trust matter. The client did not sign anything. The result is that the Validity of Trust matter is governed by the 2004 NSW Act, which has not been displaced, and consequently any choice of law clause imported from the Kelly matter into the oral costs agreement in the Validity of Trust matter is ineffective. 87 As regards the Appointment of Administrator matter, there is a written costs agreement containing a choice of Victorian law clause and so s 305(2)(b)(i) is satisfied. New South Wales law has been displaced if s 305(2)(a) has been satisfied. On balance, my conclusion is that the legal services provided for in the Appointment of Administrator matter were not to be provided wholly or primarily in Victoria, but rather the primary place of provision of the services was New South Wales. This is because the subject matter of the Appointment of Administrator matter was Mr Hillig's appointment in New South Wales and advice concerning the appropriate responses of DPL to Mr Hillig's subsequent actions. There was no likelihood that Mr Hillig would engage to any substantial degree in conduct in relation to his administration of DLALC in Victoria, and consequently no likelihood that DPL would require advice in respect of actions or events in Victoria. Although it was probably contemplated at the time of the costs agreement that Mr Cunliffe would carry out a substantial part of his work from his office in Melbourne, the prospects that there would be litigation in this Court concerning Mr Hillig and that Mr Cunliffe would be required by his retainer to deal with that litigation, seem to me to point to the conclusion that the legal services under the Appointment of Administrator matter were to be provided primarily in New South Wales. 88 Having found that the Appointment of Administrator matter was subject Part 3.2 of the 2004 NSW Act because the client first instructed Mr Cunliffe in relation to that matter in New South Wales, my view is that s 305 of that Act does not apply to displace the application of Part 3.2. 89 I have also concluded that s 3.4.4 of the 2004 Victorian Act does not apply to cause the Victorian legislation to extend to either the Validity of Trust matter or the Appointment of Administrator matter by virtue of the choice of law clause. As to the Validity of Trust matter, there are three reasons why the 2004 Victorian Act does not apply. First, the costs agreement was entered into in October 2005, and the Victorian Act did not commence until December 2005. Second, even if the 2004 Victorian Act had been operative in October 2005, s 3.4.4(1)(c) would not have been satisfied because the client has not signed any written agreement that Victorian law would apply and there is no question on the facts of the giving of notification. Third, neither limb of s 3.4.4(1)(b) applies. This is because the matter does not have a substantial connection with Victoria and the legal services were to be provided for that matter primarily in New South Wales.

7.3.2 The Kelly matter and the Hillig Proceedings matter 90 I have found that instructions were first received in the Hillig Proceedings matter in Victoria on about 20-22 May 2006. If there is a choice of law clause in the costs agreement for the Hillig Proceedings matter, it is the clause imported from the costs agreement in the Appointment of Administrator matter, selecting Victorian law. Therefore there is no occasion for the application of New South Wales law or the displacement of Victorian law. 91 I have found that instructions were first received in the Kelly matter in Victoria in late September 2005. The Kelly matter may be subject to the 1996 Victorian Act, but additionally, to the extent that the execution of his instructions required Mr Cunliffe to practice law in New South Wales, he was subject to Part 11 of the 1987 NSW Act in the matter I have described, regardless of any choice of law clause. 8. Question 1.1 - Whether the first defendant [DPL] entered into a costs agreement under a document provided by the solicitors then trading as Norton White Melbourne in September 2005? 92 My finding is that DLALC entered into a costs agreement with Norton White Melbourne with respect to the Kelly matter in accordance with Mr Cunliffe's letter to DLALC dated 30 September 2005, by issuing instructions after having received the letter. There is nothing in the evidence to indicate that DPL was a party to that costs agreement regarding the Kelly matter. 93 The letter of 30 September 2005 was not about the Validity of Trust matter. DPL first gave instructions to Mr Cunliffe in that matter on 20 October 2005 in Wyong, and consequently Part 3.2 of the 2004 NSW Act applied, for the reasons I have given, and notwithstanding any choice of Victorian law provision. At that time or subsequently there was an oral agreement between Mr Cunliffe and Mr Bradford on behalf of DPL that the terms of the letter of 30 September 2005 would apply to the new matter. 94 Section 322(2) of the 2004 NSW Act states that a costs agreement must be written or evidenced in writing. Section 327(1) states that a costs agreement that contravenes, or is entered into in contravention of, any provision of Part 3.2 Division 5 (which includes s 322(2)) is void. By s 327(2), legal costs under a void costs agreement are recoverable as set out in s 319(1)(a) or (c), according to which the costs are recoverable in accordance with an applicable fixed costs provision, or if there is none, according to the fair and reasonable value of the legal services provided. 95 In my opinion it cannot be said that the letter of 30 September 2005, addressed to a different entity relating to a different matter, is evidence of a costs agreement orally made 20 or more days later, simply because the parties orally agreed that the terms of their new costs agreement would be in accordance with the earlier letter. Accordingly, there is no costs agreement: Wentworth v Rogers (2006) 66 NSWLR 474, [2006] NSWCA 145. 96 For these reasons, my answer to Question 1.1 is "No". 9. Question 1.2 - If it was made, who were the solicitors trading as Norton White Melbourne who were party to it? 97 This question does not arise. 10. Question 1.3 - If it was made, during what period was it in force? 98 This question also does not arise. 11. Question 1.4(a) - In respect of the costs agreement made pursuant to the document dated 12 May 2006 from the solicitors trading as Norton White Melbourne, who were the solicitors who were party to that agreement? 99 In response to an inquiry by DLALC's solicitor, the Legal Services Board of Victoria issued a certificate dated 19 September 2008 (Ex A2, pages 693-4), stating that the partners of Norton White Melbourne during the period 1 May 2005 to 1 May 2007 were: Richard J Thompson (partner from 1 May 2005 to 16 July 2006) Ulf P Lidstrom (partner from 1 September 2005 to 1 November 2006) Mark R W Williams (partner from 1 August 2005 to 15 December 2006) Ian G Cunliffe (partner from 1 May 2005 to 30 April 2007) 100 The certificate stated that Norton White Melbourne merged with Heydon & O'Loghlen on 1 May 2007 and that the sole practitioner of Heydon & O'Loghlen is currently Denis P O'Haire. 101 A business name search of the name "Norton White Melbourne" made on 7 August 2006 named Messrs Thompson, Cunliffe, Williams and Lidstrom as the "persons carrying on business (current)" (Ex PW 4-6 to the affidavit of Mr Woods made on 28 August 2006). Mr Woods also tendered a promotional brochure for Norton White copied on 8 July 2006, which listed the names of "Our Partners", including Messrs Cunliffe, Williams, Lidstrom and Thompson (the others evidently being Sydney partners) (Ex PW 4-7). There are brief biographical sketches of all four of them. I can see nothing in the nature of disclosure that any of them was a partner only on some limited salary basis. 102 In his 11th affidavit made on 24 August 2009, Mr Cunliffe deposed as follows: "21. As at 2 September 2005, 12 May 2006 and 30 June 2006, and at all times in between, the proprietors of Norton White Melbourne were Mr Thompson on me. We were the only people who were entitled to share in the profits of the firm. We were also the only people to whom we would respectively look in the event that Norton White Melbourne incurred liabilities. Mr Thompson and I were the only people entitled to proceed to recover, tax or claim any of the costs claimed in the first cross-claim in respect of that period. Mr Thompson and I were the only people liable to be proceeded against for assessment or taxation of any of the costs which are the subject of the first cross-claim or the third cross-claim in respect of that period. 22. From 1 July 2006 until 30 April 2007, I was the only person who was entitled to the profits of the firm; and I had no other person to whom to look in the event that Norton White Melbourne incurred liabilities. I was the only person entitled to proceed to recover, tax or claim any of the costs claimed in the first cross-claim in respect of that period. I was the only person liable to be made a party to assessment or taxation of any of the costs which are the subject of the first cross-claim or the third cross-claim in respect of that period." 103 Mr Cunliffe's evidence needs to be interpreted. In light of the way Norton White Melbourne and Norton White nationally held out all four Melbourne solicitors as partners, Mr Cunliffe's evidence can only be about the internal arrangements within the firm in Melbourne. I take him to be saying that he and Mr Thompson were the only Melbourne equity partners until 30 June 2006, and thereafter until 30 April 2007 he was the only equity partner. As an equity partner, he was entitled to share the net profits the partnership, and later to take all the net profits. He was obliged as between the partners of the firm to share responsibility and later to take sole responsibility for the debts of the partnership. Presumably that meant he was obliged to indemnify other partners who might be held liable to third parties. But his evidence cannot be accepted as establishing that the non-equity partners, Mr Lidstrom and Mr Williams, had no liability for the debts of the partnership as regards any third party, including someone who may wish to tax the costs of the firm and to recover any overpayment. 104 To the extent that Mr Cunliffe claimed that the non-equity partners had no liability for partnership debts and were, indeed, not partners, his evidence is inconsistent with the Norton White promotional material and the Legal Services Board's certificate, both of which indicate that all four individuals were held out as the partners of Norton White Melbourne, and to that extent I reject his evidence. Equally I reject his evidence to the extent that he denies that the non-equity partners were not parties to the costs agreements made by the firm. 105 The answer to Question 1.4(a) is that the solicitors who were party to the 12 May 2006 costs agreement with DPL in respect of the Appointment of Administrator matter were Messrs Cunliffe, Thompson, Lidstrom and Williams. 12. Question 1.4(b) -In respect the costs agreement made pursuant to the document dated 12 May 2006 from the solicitors trading as Norton White Melbourne, during what period was it in force? 106 The costs agreement of 12 May 2006 was accepted when Mr Flanders faxed back the last page of the offer document, signed by him, on 15 May 2006. The agreement commenced at that time. Its subject matter was the Appointment of Administrator matter, defined as above. The parties were Norton White Melbourne and DPL. 107 The agreement was terminated on 22 May 2006 when Mr Hillig's solicitor faxed a notice of termination of all retainers, purporting to act pursuant to Mr Hillig's decisions to dismiss the board of DPL and take their place, and as director, to terminate the retainer. As I have explained, the effect of the Court of Appeal's decision is that Mr Hillig's actions on 22 May were effective and so the costs agreement was validly terminated on that day. In Hillig v Darkinjung Pty Ltd & ors (No 2) [2008] NSWCA 147, McColl JA (with whom Beazley and Giles JJA agreed) put the matter succinctly as follows (at [46]): "The effect of this Court's decision that the Resolutions [by Mr Hillig] were effective was that on and from the date they were passed (22 May 2006) the retainer of Messrs Norton White was withdrawn and [Mr Cunliffe] had no authority to continue to act for Darkinjung." 108 I received submissions on the question whether DPL had power to enter into the costs agreement. As a corporation formed under Australian corporations legislation, DPL had all of the legal capacity and powers of an individual: Corporations Act 2001 (Cth), s 124(1). 109 DPL was a trustee, and its power to act as trustee so as to bind the trust property was strictly limited. The powers conferred on the trustee by the Trust were explained by Barrett J in his 3 October 2006 judgment (Darkinjung Pty Ltd v Darkinjung Local Aboriginal Land Council & ors [2006] NSWSC 1008) at [53] to [57] and [204] to [217]. It was submitted on behalf of DLALC that, consistently with Barrett J's reasoning, DPL did not have the power as trustee to apply trust property to procure legal services in the Appointment of Administrator matter. This issue has not been fully argued before me and it does not appear necessary for me to address it in order to answer the separate questions listed for determination. A decision on this issue would probably require some findings of fact (for example, about the purposes of the directors of DPL) that have not been fully canvassed in the evidence before me. I would prefer not to express any view on this issue. 110 My answer to Question 1.4(b) is that the 12 May 2006 costs agreement, if otherwise valid, was in force from 15 May to 22 May 2006. 13. Question 1.6(a) -What was the effect, if any, of termination of the costs agreements or either of them on the ability of the solicitor or solicitors (if otherwise entitled) to proceed to recover, tax and assess any of the costs claimed in the first cross-claim? 111 Question 1.5 is about the effect of non-disclosure on the ability of the solicitors to recover costs shall be subject to taxation or assessment. Question 1.6 is about the effect of termination of the costs agreement on those matters. It seems to me that in the interests of clarity, I should address Question 1.6 first, so as to establish the rights and obligations of the solicitors after termination of the costs agreement, before dealing with the effect of non-disclosure. 112 It is submitted on behalf of DLALC that, since Mr Hillig validly terminated all retainers of Norton White Melbourne on 22 May 2006, Mr Cunliffe has no entitlement to costs in respect of any period after that date. Mr Cunliffe concedes that the Norton White Melbourne 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 he claims that there was a valid retainer giving rise to an entitlement to costs for work done up to the latter date. 113 I have found that the oral agreement between Mr Bradford and Mr Cunliffe or after 20 October 2005 to extend the terms of the costs agreement in the Kelly matter to the Validity of Trust matter was void and consequently there was no costs agreement governing that matter. That conclusion renders it unnecessary to consider the effect of the notice of termination of 22 May 2006, as regards the Validity of Trust matter. But the question of the effect of termination on 22 May 2006 is a live issue in relation to the costs agreement concerning the Appointment of Administrator matter arising out of acceptance, on 15 May, of the letter of offer dated 12 May. 114 As mentioned above, on 19 June 2006 I made declarations to the effect that Mr Hillig's actions of 22 May 2006 were inoperative and ineffective, the directors remained in office, the constitution had not been amended and Mr Cunliffe remained DPL's solicitor. I restrained Mr Hillig from holding himself out or purporting to act as a director of DPL in reliance on his actions of 22 May. Those orders remained in force until well after 13 December 2006. My decision was not reversed until the Court of Appeal delivered judgment on 29 April 2008. 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. 115 On appeal, McColl JA (with whom Beazley and Giles JJA agreed) addressed the question of utility of the appeal, in circumstances where, by the time the appeal was heard, DPL had transferred substantially all its assets to DLALC, except for the amount of $430,000 that had been paid in Court. Her Honour continued ([2008] NSWCA 75): "[32] Mr Murr [senior counsel for Mr Hillig] submitted, in support of the utility of the appeal, that if successful the appellant would argue as relevant to the question of costs (whether in this Court or before Barrett J was not made clear) that the proceedings before Barrett J were conducted by people who had been removed from office and who had no proper authority to conduct them. [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) 53 CLR 220 (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 the 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] A C 97 (at 101-102)." 116 McColl JA (with whom, once again, Beazley and Giles JJA agreed) returned to this general territory in her judgment on costs of the appeal and the hearings before me: Hillig v Darkinjung Pty Ltd (No 2) & ors [2008] NSWCA 147. Her Honour referred to what she called the "common order, when a solicitor has taken unauthorised steps in litigation, to require the solicitor personally to pay the costs he has thereby caused other parties to incur (at [47]). She located that common order in the discretionary context provided by s 98(1) of the Civil Procedure Act 2005 (NSW) and UCPR 42.3(2)(d), which preserves the Court's power to make an order for costs against a person who purports, without authority, to conduct proceedings in the name of another person. She supported the approach taken by Bryson J in Zimmerman Holdings & ors v Wales & ors [2002] NSWSC 447, to the effect that on occasions, the common order should be departed from for good discretionary reasons. She found that there were good discretionary reasons in the circumstances before the Court of Appeal. Here there was at least an arguable case that the resolutions made by Mr Hillig were ineffective, although the Court of Appeal had eventually held they were valid. She took the view that the costs of the proceedings were not attributable to DPL's joinder. She continued: "[55] It was the appellant [Mr Hillig] who commenced the proceedings and joined the first to sixth respondents as defendants. The principles concerning a solicitor acting without authority apply whether the party represented is the plaintiff or a defendant. However, where the party represented is a defendant, and the question whether the defendant can retain a solicitor lies at the heart of the proceedings, the Court would not readily order the solicitor to pay the costs of the proceedings even when the effect of its conclusion is that those the solicitor represented were not authorised to retain him or her. [56] A solicitor placed on notice of a challenge to retainer would do well to determine, as Zimmerman demonstrates, whether the client's authority to retain him or her can be objectively determined. Where that cannot be done, the Court must be anxious to ensure that an order that the solicitor bear the costs is appropriate in all the circumstances. Those circumstances include, in my view, the public interest that citizens have legal representation for the purposes of the conduct of litigation: Orellana-Fuentes v Standard Meeting Mills Pty Ltd [2003] NSWCA 146; (2003) 57 NSWLR 282 (at [96]) per Ipp JA (Spigelman CJ and Handley JA agreeing). [57] In my view, Mr Cunliffe was entitled to proceed on the basis that the efficacy of the Resolutions [by Mr Hillig] and the question whether Darkinjung [DPL] could retain him, was an issue of law which should properly be determined by the Court and that the defendant 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." 117 In my view the passage that I have extracted is directed to the Court's exercise of the discretion conferred by UCPR 42.3(2)(d) to make an order for costs against a solicitor acting without authority, notwithstanding the general rule in UCPR 42.3(1) that the Court may not make a costs order against a person who is not a party. When her Honour said at [57] 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. 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. 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. 119 Mr Cunliffe was not himself a party at that stage, as McColl JA found in the costs judgment (at [42]). But DPL was entitled to the benefit of my declarations and orders and if Norton White Melbourne had declined to act for DPL, they would have deprived DPL of the benefit of my decision in its favour. 120 In the period from 22 May to 13 December 2006 Norton White's retainer by DPL had been terminated and so had all previous costs agreements, and Norton White was no longer contractually authorised to undertake any work for DPL. But after 22 May it continued to receive requests for legal services from individuals who were entitled by my orders to regard themselves as the directors of DPL. The solicitors carried out work as requested, in circumstances where it was reasonable for them to act for the reasons explained by McColl JA. It seems to me that these matters have given Norton White Melbourne an entitlement as against DPL to claim remuneration for their services on a quantum meruit basis. 121 It seems to me that the 2004 NSW Act (as regards the Appointment of Administrator matter) and the 2004 Victorian Act (as regards the Hillig Proceedings matter) do not stand in the way of quantum meruit entitlement in the circumstances I am addressing. In this case there was a written costs agreement in place for the Appointment of Administrator matter and apparently an oral costs agreement for the Hillig Proceedings matter but they were terminated, in circumstances where the validity of the termination was challenged, and the law practice continued to provide legal services. Legal costs are recoverable according to the fair and reasonable value of the legal services provided: NSW s 319(1)(c); Victoria s 3.4.19. 122 Counsel for DLALC submitted that it is strictly speaking unnecessary to consider any question of quantum meruit as no such claim has been pleaded or made in the first cross-claim. But as I read the question for separate determination, the answer would be incomplete if quantum meruit entitlement were overlooked. I take the reference, in the stated question, to the ability of the solicitors to recover, tax or assess the costs claimed in the first cross-claim to be a reference to their ability to recover, tax or assess costs in the amount stated in the first cross-claim, rather than simply the costs claimed in the first cross-claim as arising under specified costs agreements. If the termination on 22 May 2006 of the costs agreement of 12 May 2006 brought Norton White's contractual entitlement to recover costs to an end, but left it with a quantum meruit claim for an amount of remuneration not necessarily the same as would be recovered under a valid costs agreement, it seems to me appropriate to say so in answer to the question. 123 Counsel for DLALC submitted that the costs and disbursements claimed in respect of services incurred after 22 May 2006 do not have the character of expenses of DPL in its capacity as trustee of the trust declared by the court in Order 3 made on 13 December 2006, apparently because they were not costs and disbursements incurred under a valid retainer and costs agreement. This is another issue that is not directly raised by the separate questions for determination, and which has not been addressed fully in submissions, and therefore need not and should not be decided. I merely note that a solicitor entitled to payment on a quantum meruit basis may well have the same right of subrogation to the trustee's right of indemnity out of trust assets or against a beneficiary, as a contractual creditor would have; and there are factual issues to be addressed as to whether the trustee's right of indemnity is available in the circumstances. 124 Counsel for Mr Cunliffe placed some reliance on Hudgson & Anor v Endrust (Australia) Pty Ltd & Anor (1986) 11 FCR 152, ASIC case indicating a willingness on the part of the court to imply a retainer in the absence of an express agreement. But that was an example a case where a solicitor act as upon instructions from a party even though the instructions come to the solicitor from another party or from some non-party interested in the litigation. It was not a case of a solicitor not been retained by the party who had the benefit of the order. In my opinion there is no scope for implying a retainer here, superimposed on the invalid retainer. 125 My answer to Question 1.6(a) is as follows: The termination of the costs agreement of 12 May 2006 by Mr Hillig on 22 May 2006 had the effect of bringing to an end the contractual entitlement of Norton White Melbourne to recover, tax or assess any of the costs claimed in the first cross-claim, but the firm acquired an entitlement to recover reasonable remuneration on a quantum meruit basis in respect of legal services provided in the period from 22 May 2006 to 13 December 2006 at the request of the persons purporting to act as directors of the first defendant. 14. Question 1.6(b) - What was the effect, if any, of termination of the costs agreements or either of them on the liability of the solicitor or solicitors (if otherwise liable) to be proceeded against for assessment or taxation of any of the costs which are the subject of the first cross-claim or the third cross-claim? 126 Once again this question does not arise in respect of the document of 30 September 2005 because the first defendant, DPL, did not make any valid costs agreement under that document. The answer to this question is confined to the costs agreement of 12 May 2006, accepted on 15 May 2006. 127 The costs agreement of 12 May 2006 relates to the Appointment of Administrator matter, first instructions for which were received at Wyong in New South Wales on 4 May 2006, and so the 2004 NSW Act is applicable. It is appropriate to consider the current provisions rather than those in force in 2006, because the question of entitlement to an assessment of costs concerns a procedural right governed by the law in force at the present time. 128 Section 350 of that Act enables a "client" or "third party payer" who is given a bill to make an application for an assessment of the whole or any part of the legal costs. "Client" is defined in s 349A to include not only a person "to whom" legal services are provided, but also a person "for whom" they are provided. The definition appears to cover not only cases where the client has a contractual relationship with the law practice, but also cases where the entitlement of the law practice to fees is based on a quantum meruit, and possibly even cases where legal services are provided to a person who has not asked for them. According to my analysis in answer to question 1.6(a), Norton White Melbourne was entitled to be paid reasonable fees by DPL in the period from 22 May to 13 December 2006 on a quantum meruit basis. In those circumstances DPL was the client of Norton White Melbourne although there was no valid contractual costs agreement in place during that period. 129 The statutory entitlement to apply to an assessment, conferred by s 350, is an assessment of the whole or any part of legal costs. "Legal costs" are defined in s 4(1) to mean amounts that a person has been or may be charged by, or is or may become liable to pay to, a law practice for the provision of legal services, including disbursements but not including interest. The definition is wide enough to encompass a costs claim made on a quantum meruit basis. 130 Counsel for DLALC submitted that the money received by Norton White Melbourne after 22 May 2006 in payment of the firm's invoices was money had and received to the use of DPL, except to the extent that it was properly applied to costs charged for services rendered and disbursements incurred up to 22 May 2006. That issue is evidently not raised by Question 1.6(b), since the question is only about liability to assessment or taxation of costs, not recovery of payments. It is not necessary to deal with this submission, and probably unwise to do so, but I note that any entitlement of DPL to recover payments would be qualified to the extent that the firm is entitled to claim costs on a quantum meruit. 131 My answer to Question 1.6(b) is as follows: The termination of the costs agreement of 12 May 2006 by Mr Hillig on 22 May 2006 had no effect on the liability of Norton White Melbourne to be proceeded against for assessment of the costs that are the subject of the first cross-claim and the third cross-claim, given that the relevant statutory provisions confer a right to apply for assessment in terms sufficiently wide to encompass legal costs not contractually authorised but claimed on a quantum meruit basis. 15. Question 1.5(a) and (c) - Whether there is by reason of non-disclosure of any of the matters set out in paras 35 to 40 of the defence of the first cross-defendant to the first cross-claim an effect on the ability of the solicitor or solicitors (if otherwise entitled) to proceed to recover, tax or assess any of the costs claimed in the first cross-claim, and if so, what is that effect (including the effect, if any, on the appropriate jurisdiction for taxation and assessment)?

15.1 Effect of absence of a costs agreement 132 The ability a law practice to recover, tax or assess costs depends in part on whether there was a written costs agreement. Except in relation to the Kelly matter and the Appointment of Administrator matter strictly so-called, there were no written costs agreements between DPL and Norton White Melbourne. Thus, there were no written costs agreements with respect to the Validity of Trust matter or proceedings No 5634 of 2005 (governed by the 2004 NSW Act), or the Hillig Proceedings (governed by the 2004 Victorian Act). Both the 2004 NSW Act (s 322(2)) and the 2004 Victorian Act (s 3.4.26(2)) require that a costs agreement must be written or evidenced in writing. Section 327(1) of the 2004 NSW Act and s 3.4.31(1) of the 2004 Victorian Act respectively provide that a costs agreement contravening this requirement is void. In those circumstances costs are recoverable according to an applicable scale of costs, or else according to the fair and reasonable value of the legal services provided: NSW s 319(1); Vic s 3.4.19.

15.2 Disclosure requirements 133 I have held that: the Kelly matter, where the costs agreement is evidenced by the letter of 30 September 2005, was governed by the 1996 Victorian Act, and to the extent that the solicitor practised in New South Wales, Division 11 of the 1987 NSW Act would be applicable; the Validity of Trust matter, where the costs agreement is an oral agreement to adopt the terms of the letter of 30 September 2005, though for a different matter, is governed by the 2004 NSW Act; the Appointment of Administrator matter, where there is a written costs agreement of 12 May 2006, is governed by the 2004 NSW Act; the Hillig Proceedings matter, where there is no evidence of any written or oral costs agreement, is governed by the 2004 Victorian Act. It is therefore necessary to have regard to all four statutory regimes. 134 Separate provision is made in the legislation for disclosure of certain matters in relation to costs: 2004 NSW Act, ss 309 and 310; 2004 Victoria Act, ss 3.4.9 and 3.4.10; 1987 NSW Act, ss 174, 175-183; 1996 Victorian Act, ss 86-92. Disclosure must be in writing before or as soon as practicable after the retainer is formed: 2004 NSW Act, s 311, 315; 2004 Victorian Act, ss 3.4.11, 3.4.15; 1987 NSW Act, ss 178-9; 1996 Victorian Act, ss 86(1) and (3), 87(3), 88. Except in the case of the 1996 Victorian Act, the effect of non-disclosure is that the client does not have to pay the costs unless the process of assessment or review provided for in the relevant Act has been completed: 2004 NSW Act, s 317 (assessment under Division 11, relevantly s 352); 2004 Victorian Act, s 3.4.17 (review by Taxing Master under Division 7, relevantly s 3.4.40); 1987 NSW Act ss 174(1)(b), 182 (assessment under Division 6, relevantly s 201). In the case of the 1996 Victorian Act, the effect of the failure to disclose is prescribed by s 91. The effect is that on an assessment the person assessing the bill may reduce the bill by an amount considered proportionate to the seriousness of the failure to disclose.

15.3 Allegations of non-disclosure 135 While Question 1.5(a), as posed, relates to DLALC's defence to the first cross-claim, I think it would be more helpful to focus attention on the contravening non-disclosure alleged on behalf of DLALC in final written submissions. The two sets of allegations very substantially overlap but the written submissions have the advantage that they recognise that more than one legislative regime may be relevant, and they make detailed references to the relevant provisions. 136 The written submissions on behalf of DLALC list some eight matters of failure to disclose. I shall list each matter, with statutory sources, and add a note if one of the four legislative regimes does not have the relevant disclosure requirement. The list of matters not disclosed is as follows: (a) an estimate of the range of costs recoverable in the event of success in the relevant litigation: 2004 NSW Act, s 309(1)(f)(i); 2004 Victorian Act, s 3.4.9(1)(g)(i); 1996 Victorian Act, s 86(d)(i) (not required by the 1987 NSW Act); (b) that a favourable costs order in the relevant litigation may not cover the whole of the client's costs: 2004 NSW Act, s 309(1)(f) & (2)(a); 2004 Victorian Act, s 3.4.9(1)(g) & (2)(a) (not required by the 1987 NSW Act or the 1996 Victorian Act); (c) in respect of counsel and NSW solicitor agents intended to be retained, the basis of their costs, estimated ranges of their costs and their billing intervals: 2004 NSW Act, ss 310 & 309(1)(a), (c) & (d); 2004 Victorian Act, ss 3.4.10 & 3.4.9(1)(a), (c) & (e); 1987 NSW Act, ss 175(3), 176, 177(2); 1996 Victorian Act, ss 87(1), 86(1)(a), (3)(b) & (c); (d) estimates of the range of costs that may be ordered to be paid to the other side in the event of failure in the relevant litigation: 2004 NSW Act, s 309(1)(f)(ii); 2004 Victorian Act, s 3.4.9(1)(g)(ii); 1996 Victorian Act, s 86(3)(d) (not required by 1987 NSW Act); (e) avenues for review and (under the 2004 Acts) the correct time limits: 2004 NSW Act, ss 309(1)(i) & (j), 350; 2004 Victorian Act, ss 3.4.9(1)(j) & (k), 3.4.38(5) & (6); 1987 NSW Act, s 175(2)(d); 1996 Victorian Act, s 86(3)(f); (f) (if the 2004 Victorian Act applied) the right to accept a choice of law agreement for the application of NSW law or to elect (within a limited time) for the application of NSW law: 2004 Victorian Act, ss 3.4.9(1)(m) & to 3.4.5; (g) disclosure in writing of the rate of interest intended to be charged on overdue costs: 2004 NSW Act, s 309(1)(e); 2004 Victorian Act, s 3.4.9(1)(f) (not required by 1987 NSW Act, but see s 190; nor by the 1996 Victorian Act, but see s 95); (h) disclosure of substantial changes, such as to the estimates: 2004 NSW Act, s 316; 2004 Victorian Act, s 3.4.16; 1987 NSW Act, s 177(3) (only applies to significant increase in estimate); 1996 Victorian Act, s 89. 137 All eight disclosure matters are required by the 2004 Victorian Act, and seven of them are required by the 2004 NSW Act. It can be taken that there was no compliance with any of these matters as regards the Validity of Trust matter, which is governed by the 2004 NSW Act, or by the Hillig Proceedings matter, which is governed by the 2004 Victorian Act. There is no evidence of any disclosure except in the documents of 30 September 2005 and 12 May 2006, but in each case those documents were expressed to relate to different matters. 138 The letter of 30 September 2005 in relation to the Kelly matter provides an estimate of $50,000 for legal costs if the work can be done without needing to go to court, but if it is necessary to go to court, the estimate is $100,000-$150,000. But the letter does not meet the requirements of points (a), (c), (d) and (h) above. 139 The costs agreement 12 May 2006 estimated costs and expenses of $70,000 plus GST to the end of May. The document evidently does not comply with (a)-(d) and (h) above.

15.4 Form of bills 140 The 1996 Victorian Act, s 107, required bills to be in the form of a lump sum bill or and itemised bill and relevantly required the bills to be signed by a partner of the firm. The Act required the bill be delivered to the person or agent authorised to accept service of legal process (s 107(3) and (4)). Delivery was required to be made either in person, by post to the last known business or residential address of the person or agent, or by leaving it at the usual or last known business or residential address of the person or agent. The consequence of failure to comply was that the practitioner was precluded from commencing proceedings to recover the costs and any such proceedings were required to be stayed: s 106(1), (3). Within 30 days of receipt of a lump sum bill, a person was entitled to request an itemised bill and, if so, the practitioner was barred from commencing proceedings until at least 30 days after complying with the request: s 108. The itemised bill was required to comply with s 107. 141 The 2004 Victorian Act imposes similar requirements, except that: the period before which legal proceedings must not be commenced is 65 days (ss 3.4.33 and 3.4.40); bills may be signed by an employee (s 3.4.34(2)(a)); there is a requirement for the bill to notify the client's avenues for disputing the bill, including time limits (s 3.4.35); a request from itemised bill may be made within 30 days after the bill is given and the law practice may not commence proceedings until 35 days after complying with the request (s 3.4.36). 142 The 2004 NSW Act, ss 331-333 and 352, are to the same effect as the 2004 Victorian Act, except that: the bar on proceedings is 30 days; the avenues for dispute which have to be disclosed are the New South Wales avenues for dispute, which are a little different from the Victorian ones; the provision allowing for a request for an itemised bill (s 332A) was inserted by amendment commencing on 2 June 2006, although there was a previous obligation on the solicitor under s 309(1)(b)(iii). 143 The 1987 New South Wales Act prevented proceedings to recover costs from being brought until 30 days after the bill was given (s 192(1)). It required: a bill to be in the form provided by the regulations (s 193); a bill to be signed by the solicitor or partner or employee (s 194(1)); a bill to be delivered personally, by post to the last known place of business or residence, or by leaving it at that place, or by fax, document exchange or any other way authorised by the regulation; additional particulars to be contained in the bill were prescribed by regulation 45 of the Legal Profession Regulation, 2002 (NSW). 144 Since the billing requirements of the 2004 NSW Act are contained in Part 3.2, the application of the 2004 New South Wales legislation depends upon the first instructions rule in s 303ff, discussed in detail above. The same is the case for the billing requirements of the 2004 Victorian Act, which are in Part 3.4, the application of which is governed by the first instructions rule (s 3.4.3ff). To the extent that any of the bills related to the Kelly matter, first instructions were received before the commencement of the 2004 legislation in New South Wales and Victoria and therefore the bills are governed by the 1996 Victorian Act. First instructions were received in New South Wales in respective of the Validity of Trust and Appointment of Administrator matters, after the commencement of the 2004 NSW Act, which therefore applies to bills concerning those matters. The 2004 Victorian Act applies to bills concerning the Hillig Proceedings matter. 145 The invoices relied on Mr Cunliffe in the first cross-claim are found in Ex IGC 8 to his eighth affidavit and in exhibits to his tenth affidavit. Mr Cunliffe's evidence is that itemised bills were not sent with the lump sum bills sent to the client, although he has put the itemised bills into evidence. 146 Perusal of the bills upon which Mr Cunliffe relies show some irregularities. Some of them do not appear to be signed (numbers 25609, 256192, 256557 and 255939). All except one were addressed to DPL, the exception being invoice No 255804, which was addressed to Darkinjung Projects and was evidently not sent to the client. The bills failed to state avenues for review, as required by the 2004 legislation in New South Wales and Victoria. Those matters of non-compliance mean, as pointed out above, that the law practice is precluded from commencing proceedings for recovery, and any existing proceedings stayed. 147 Counsel for DLALC submitted that after 22 May 2006, Mr Cunliffe directed the bills to a person (Mr Flanders) who was not an officer or agent of DPL at an address which ensured that they would not come to the attention of Mr Hillig, who was by then sole director of DPL. I have held, above, that although Mr Hillig balance the terminated Norton White Melbourne's retainer, the firm was able to recover on a quantum merit in respect of work done at the request of the persons who purported to be the directors pursuant to my orders and 19 June 2006. Consequently it seems to me to have been appropriate for Mr Cunliffe to send Norton White's bills to an address where they would come to the attention of the persons purporting to be directors.

15.5 Conclusion as to Question 1.5(a) 148 I would answer Question 1.5(a) as follows: By reason of non-disclosure of the matters identified under headings 15.3 and 15.4 of these reasons for judgment, Norton White Melbourne was prevented from commencing or prosecuting legal proceedings for recovery of the amounts claimed in the non-complying bills.

15.6 Question 1.5(c), as it applies to Question 1.5(a) 149 As stated in my answer to Question 1.5(a), the effect of the non-disclosure on the ability of the solicitors to recover, tax or assess the costs claimed in the first cross-claim is that the non-disclosure prevents them from commencing or prosecuting legal proceedings for recovery. 150 The statutory right of a law practice that has given a bill to apply for an assessment or review of the whole or part of the legal costs which the bill relates is contained in Part 3.2 in the case of the 2004 NSW Act and Part 3.4.40 in the case of the 2004 Victorian Act. The application of these provisions depends upon the first instructions rule of s 303ff (NSW)/s 3.4.3 (Vic), which has been considered at length earlier in these reasons for judgment. The presence or absence of required disclosure does not affect the appropriate jurisdiction for assessment or review. 151 I would answer Question 1.5(c), as it applies to Question 1.5(a), as follows: The effect is as stated in the answer to Question 1.5(a). 16. Question 1.5(b) and (c) - Whether there is by reason of non-disclosure of any of the matters set out in paras 35 to 40 of the defence of the first cross-defendant to the first cross-claim an effect on the liability of the solicitor or solicitors (if otherwise liable) to be proceeded against for assessment or taxation of any of the costs which are the subject of the first cross-claim or the third cross-claim, and if so, what is that effect (including the effect, if any, on the appropriate jurisdiction for taxation and assessment)? 152 The non-disclosure of the matters set out in paras 35 to 40 of the defence of the first cross-defendant to the first cross-claim are closely similar to the matters discussed at 15.3 and 15.4 above. Where that non-disclosure is combined with an absence of a costs agreement, the law practice is only entitled to reasonable remuneration, as explained earlier. Therefore the amount of costs to which the solicitors would be entitled is likely to be different from the costs which are the subject of the first cross-claim or the third cross-claim. However, a claim for reasonable remuneration may be the subject of an application by the client for assessment under the provisions considered above, and the solicitors' non-disclosure does not affect their liability to be proceeded against for assessment. The only changes that the assessment is directed towards ascertaining the fair and reasonable value of the legal services provided rather than the amount properly due under a costs agreement. 153 It was submitted that the failure of a law practice to comply with the regulatory requirements with respect to costs disclosure and billing factors relevant to the consideration of any application for extension of time from application by the client assessment in respect of costs paid or unpaid. It seems to me that this proposition should not be embraced in the general terms in which it has been put forward, and the true position would depend upon all relevant facts, though admittedly the failure by the law practice to comply with the regulatory requirements would be one such matter. 154 In final written submissions, counsel for DLALC dealt with Mr Cunliffe's evidence as to Norton White Melbourne's billing system, the alteration of certain narratives in the detailed invoices, and the adequacy of Mr Cunliffe's own evidence that he had gone through his file very carefully to see what matters were invoiced and to identify extraneous work. I do not regard these matters as relevant to the answer of Question 1.5(b). The issue raised by Question 1.5(b) is whether non-disclosure had an effect on the solicitors' liability to be proceeded against for assessment or taxation of costs that are the subject of the first cross-claim or the third cross-claim. The question is not whether those claims (in particular, here, the first cross-claim) have been proven. 155 I would answer Question 1.5(b) as follows: Non-disclosure of the matters identified under headings 15.3 and 15.4 of these reasons for judgment did not have an effect on the liability of the solicitors of Norton White Melbourne to be proceeded against for assessment or taxation of any of the costs which are the subject of the first cross-claim or the third cross-claim. 156 It follows that the answer to Question 1.5(c), so far as it relates to Question 1.5(b), is that it does not arise. 157 Counsel to DLALC invited the Court to say, in answer to Question 1.5(c), that DLALC is entitled to apply for assessment of the costs paid in the Kelly matter. But that is not a matter properly before the Court and is not a relevant matter in answer to the question that has been posed for separate determination. 158 Counsel for DLALC also invited the Court to say, in answer to Question 1.5(c), that the Court can in the exercise of its jurisdiction in an administration suit or in its inherent jurisdiction to supervise legal costs, direct bills to be given and direct all necessary accounts of inquiries in relation to costs sought to be charged against all costs which have been paid from the trust funds. Again, it seems to me that this goes well beyond answering the question that has been posed for separate determination. 159 I am very conscious of the fact that the answering of the questions for separate determination is unlikely to resolve the remaining disputes between the parties. It may well be necessary for a further application to be made to invite the Court to give directions for the rendering of revised bills in light of the matters disclosed in the cross examination of Mr Cunliffe, so that a clearer idea can be obtained as to precisely what amounts are claimed in respect of pre-22 May 2006 work and what parts of the present invoices are asserted, upon proper reconsideration, to be for legal services properly referable to one or more of the matters that have been identified in the evidence that I have reviewed. It seems to me, however, that there will have to be a precise application seeking specific orders, properly prepared for interlocutory hearing. It is not appropriate to tag such matters on to the application for separate determination of stated questions. 17. Conclusions 160 By way of summary, I restate below the questions for separate determination, and my answer to each of them.

1.1 Whether the first defendant [DPL] entered into a costs agreement under a document provided by the solicitors then trading as Norton White Melbourne in September, 2005? No.

1.2 If it was made, who were the solicitors trading as Norton White Melbourne who were party to it? This question does not arise.

1.3 If it was made, during what period was it in force? This question also does not arise.

1.4 In respect of the costs agreement made pursuant to the document dated 12 May, 2006 from the solicitors trading as Norton White Melbourne: (a) who were the solicitors who were party to that agreement; and (b) during what period was it in force? The solicitors who were party to the 12 May 2006 costs agreement with DPL in respect of the Appointment of Administrator matter were Messrs Cunliffe, Thompson, Lidstrom, and Williams. The 12 May 2006 costs agreement, if otherwise valid, was in force from 15 May 2006 to 22 May 2006.

1.5 Whether there is by reason of non-disclosure of any of the matters set out in paras 35 to 40 of the defence of the first cross-defendant to the first cross-claim an effect: (a) on the ability of the solicitor or solicitors (if otherwise entitled) to proceed to recover, tax or assess any of the costs claimed in the first cross-claim; or (b) on the liability of the solicitor or solicitors (if otherwise liable) to be proceeded against for assessment or taxation of any of the costs which are the subject of the first cross-claim or the third cross-claim; and (c) if the answer to (a) or (b) is 'yes', what is that effect, including the effect, if any, on the appropriate jurisdiction for taxation and assessment? As to (a), by reason of non-disclosure of the matters identified under headings 15.3 and 15.4 of these reasons for judgment, Norton White Melbourne was prevented from commencing or prosecuting legal proceedings for recovery of the amounts claimed in the non-complying bills. As to (c), as it applies to (a), the effect is as stated in the answer to Question 1.5(a). As to (b), non-disclosure of the matters identified under headings 15.3 and 15.4 of these reasons for judgment did not have an effect on the liability of the solicitors of Norton White Melbourne to be proceeded against for assessment or taxation of any of the costs which are the subject of the first cross-claim or the third cross-claim. As to (c), as it applies to (b), the question does not arise.

1.6 What was the effect, if any, of termination of the costs agreements or either of them on: (a) the ability of the solicitor or solicitors (if otherwise entitled) to proceed to recover, tax or assess any of the costs claimed in the first cross-claim; or (b) the liability of the solicitor or solicitors (if otherwise liable) to be proceeded against for assessment or taxation of any of the costs which are the subject of the first cross-claim or the third cross As to (a), the termination of the costs agreement of 12 May 2006 by Mr Hillig on 22 May 2006 had the effect of bringing to an end the contractual entitlement of Norton White Melbourne to recover, tax or assess any of the costs claimed in the first cross-claim, but the firm acquired an entitlement to recover reasonable remuneration on a quantum meruit basis in respect of legal services provided in the period from 22 May 2006 to 13 December 2006 at the request of the persons purporting to act as directors of the first defendant. As to (b), the termination of the costs agreement of 12 May 2006 by Mr Hillig on 22 May 2006 had no effect on the liability of Norton White Melbourne to be proceeded against for assessment of the costs that are the subject of the first cross-claim and the third cross-claim, given that the relevant statutory provisions confer a right to apply for assessment in terms sufficiently wide to encompass legal costs not contractually authorised but claimed on a quantum meruit basis. 161 As to the question of costs, my view is that the determination of the separate questions is very much a step towards a result rather than a self-contained contest. To the extent that the DLALC/Mr Hillig have been in contest with Mr Cunliffe, they have both achieved a measure of success. I have concluded that there are some real difficulties with the invoices upon which Mr Cunliffe relies because of the way they have mixed up more than one distinct matter, and that has consequences under the relevant legal profession legislation. On the other hand, I have not accepted the argument advanced on behalf of DLALC that since the solicitors acted without authority after 22 May 2006, they have no entitlement whatever to recover costs. Given my determinations, I have decided that the appropriate order for costs is that the costs of the application be costs in the cause. **********

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