DC Legal Pty Limited v Joukhador [2026] NSWSC 905 | Case summary | Zoe

NSWNSWSC

DC Legal Pty Limited v Joukhador

[2026] NSWSC 905

Supreme Court of NSW|2026-07-30|Before: Faulkner J

View on NSW Caselaw

At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2026-07-30

Before

Faulkner J

Catchwords

CONTRACTS – contract between two solicitors for litigation matters to be transferred from one to the other – promise to pay half “profit costs” received after deduction of payments to litigation funder for “funding and other services” – dispute about amount to be paid – no evidence of amount of payments to litigation funder – onus of proof – breach of contract not proved CONTRACTS – solicitor claims to have retained another solicitor to recover costs from opposing party in litigation – retainer not proved EQUITABLE LIEN – whether former solicitor had a lien over costs paid by opposing party in litigation to current solicitor – lien inconsistent with contract – waiver and release of lien by deed poll – notice of lien not pleaded or proved – relief not available without notice of lien FIDUCIARY OBLIGATIONS – whether fiduciary relationship arose where no retainer and no express trust – fiduciary obligation inconsistent with contract

Catchwords

CONTRACTS – contract between two solicitors for litigation matters to be transferred from one to the other – promise to pay half “profit costs” received after deduction of payments to litigation funder for “funding and other services” – dispute about amount to be paid – no evidence of amount of payments to litigation funder – onus of proof – breach of contract not proved CONTRACTS – solicitor claims to have retained another solicitor to recover costs from opposing party in litigation – retainer not proved EQUITABLE LIEN – whether former solicitor had a lien over costs paid by opposing party in litigation to current solicitor – lien inconsistent with contract – waiver and release of lien by deed poll – notice of lien not pleaded or proved – relief not available without notice of lien FIDUCIARY OBLIGATIONS – whether fiduciary relationship arose where no retainer and no express trust – fiduciary obligation inconsistent with contract

Judgment

Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.

Medium Neutral Citation: DC Legal Pty Limited v Joukhador [2026] NSWSC 905

Hearing dates: 31 March–4 April, 22 April, 5 August 2025

Date of orders: 30 July 2026

Decision date: 30 July 2026

Jurisdiction: Common Law

Cases Cited: Air Tahiti Nui Pty Ltd v McKenzie (2009) 77 NSWLR 299; [2009] NSWCA 429
Associated Alloys Pty Limited v ACN 001 452 106 Pty Ltd (2000) 202 CLR 588; [2000] HCA 25
Astley v Austrust Ltd (1999) 197 CLR 1; [1999] HCA 6
Badenach v Calvert (2016) 257 CLR 440; [2016] HCA 18
Bou-Simon v BGC Brokers LP [2018] EWCA Civ 1525
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Breen v Williams (1996) 186 CLR 71; [1996] HCA 57
Burger King Corporation v Hungry Jack’s Pty Ltd (2001) 69 NSWLR 558; [2001] NSWCA 187
Byrne v Australian Airlines Ltd (1995) 185 CLR 410; [1995] HCA 24
Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256
Cessnock City Council v 123 259 932 Pty Ltd (2024) 281 CLR 39; [2024] HCA 17
Codelfa Construction Pty Ltd v State Rail Authority New South Wales (1982) 149 CLR 337; [1982] HCA 24
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54
Cong v Shen (No.3) [2021] NSWSC 947
Ex parte Patience; Makinson v The Minister (1940) 40 SR (NSW) 96
Firth v Centrelink (2002) 55 NSWLR 451; [2002] NSWSC 564
Fitzgerald v Masters (1956) 95 CLR 420; [1956] HCA 53
Hobbs v Petersham Transport Co Pty Ltd (1971) 124 CLR 220; [1971] HCA 26
Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; [1984] HCA 64
In the matter of HIH Insurance Limited (in liq) & ors [2014] NSWSC 922
In the matter of HIH Insurance Limited (in liq) & ors [2016] NSWSC 482
In the matter of HIH Insurance Limited (in liq) & ors [2017] NSWSC 380
Jaken Properties Australia Pty Ltd v Naaman (2023) 112 NSWLR 318; [2023] NSWCA 214
John Alexander’s Tennis Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19
Johnston v McGrath [2005] NSWSC 1183
Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8
Mallonland Pty Ltd v Advanta Seeds Pty Ltd [2024] HCA 25
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37
Naaman v Jaken Properties Australia Pty Ltd (2025) 281 CLR 635; [2025] HCA 1
Pilmer v The Duke Group Limited (in liq) (2001) 207 CLR 165; [2001] HCA 31
Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10
Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603; [2007] NSWCA 65
Scott v Ennis-Oakes [2020] NSWCA 239
Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596; [1979] HCA 51
Sinclair v Balanian (2024) 114 NSWLR 248; [2024] NSWCA 144
Thompson v Palmer (1933) 49 CLR 507; [1933] HCA 61
Voli v Inglewood Shire Council (1963) 110 CLR 74; [1963] HCA 15
White v Overland [2001] FCA 1333
Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105
Yule v Smith [2013] NSWSC 209

These proceedings are brought by DC Legal Pty Limited which is an entity through which Bruce Dennis previously conducted his practice as a solicitor. Up until the middle of 2016, DC Legal represented former shareholders in HIH Insurance Limited who were involved in proceedings against the liquidators of HIH in an endeavour to get compensation for being misled before HIH went into liquidation. The proceedings are referred to as the Baldock proceedings. Whilst DC Legal initially had written retainers from the clients which entitled it to charge fees, there was no expectation that DC Legal would be paid other than by obtaining a costs order against the HIH liquidators.
In July 2016 (according to the billing records) or October 2016 (according to the record of the Court) DC Legal was replaced by Thomas Booler & Co as the solicitor for the plaintiffs in the Baldock proceedings. Thomas Booler was the name of the practice conducted by another solicitor, Marcel Joukhador. Mr Joukhador is the First Defendant. The change in representation was consensual as between DC Legal and Mr Joukhador. There is no evidence that Mr Joukhador subsequently had an entitlement to be paid by the clients and he too looked to a costs order against the HIH liquidators as a source of payment for acting in the Baldock proceedings.
The Baldock proceedings were successful. Costs orders were made against the HIH liquidators in 2017 and varied in 2018. The task of recovering the costs was progressed over the following two years, during which period Mr Joukhador’s practice was taken over by Harrow Legal Pty Ltd, which is the Third Defendant. Mr Joukhador is the principal of Harrow Legal.
On 29 June 2020 the claim for costs was settled with the HIH liquidators. The next day they paid $3,250,000 in satisfaction of the costs orders in four separate proceedings. Of that figure, $2,382,000 was attributed to the Baldock proceedings. The rest was attributed to three other proceedings which Mr Joukhador had brought from the outset and which were unrelated to DC Legal. All of the money was paid into Mr Joukhador’s trust account. On 13 July 2020 Mr Joukhador distributed the money by paying $500,000 to DC Legal, $1,750,000 to a litigation funder named Bookarelli Pty Ltd and $1,000,000 to himself.
DC Legal is dissatisfied with the share that it received. It claims that it had a right against Mr Joukhador and Harrow Legal to receive a larger share. The right is said variously to arise under a retainer, a trust, another fiduciary relationship, a lien, an estoppel, a duty of care and, alternatively, a written agreement. By these proceedings DC Legal seeks to vindicate its rights.
Mr Joukhador and Harrow Legal deny that DC Legal had a right to receive more than $500,000. They previously filed a cross-claim by which they alleged that DC Legal had been overpaid and sought repayment of the excess, but the cross-claim has been abandoned. If, however, they are found to have a liability to DC Legal they seek to pass on the liability in full or in part to Bookarelli which is the Cross-Defendant.

Although no longer a party to the proceedings in his own right, Mr Dennis is central to the dispute. Up until 30 June 2015 he was a solicitor. He initially conducted his practice under the name “Dennis and Co”. On 11 June 2009 Mr Dennis incorporated DC Legal Pty Ltd. DC Legal took over Mr Dennis’s legal practice as an incorporated legal practice. The name of the practice evidently changed to “DC Legal” although there was a lack of formality and the change was piecemeal. From the outset Mr Dennis was the legal practitioner director of DC Legal. For the purposes of s 140 of the Legal Profession Act 2004 (NSW) he was responsible for the management of the legal services provided by DC Legal.
On 21 August 2009 Mr Dennis ceased to hold a practising certificate. He also ceased to be the legal practitioner director of DC Legal. On 10 May 2010 Mr Dennis regained his practising certificate. On 11 October 2010 he became a director of DC Legal again, but he did not resume the role of the legal practitioner director of DC Legal until 1 March 2012. As at 14 January 2014 Mr Dennis was the sole director of DC Legal.
A fact which is relevant to the dispute is that in early 2014 the Law Society of New South Wales commenced proceedings in which it alleged professional misconduct by Mr Dennis and sought to have his name removed from the Supreme Court roll of solicitors. More details are given about this below. For current purposes it is sufficient to say that Mr Dennis’s practising certificate was renewed on 1 July 2014 but then cancelled on 16 October 2014 and reinstated on 31 October 2014. On 30 June 2015 Mr Dennis’s practising certificate expired and he did not renew it. DC Legal’s practice came to an end.
There is a dispute about Mr Dennis’s continuation as a director of DC Legal between November 2014 and October 2015. The evidence contains an extract from the records maintained by ASIC which shows that since January 2014 Mr Dennis has continued uninterrupted as the sole director of DC Legal until at least 22 May 2024 when the extract was obtained from ASIC. However, in cross-examination Mr Dennis accepted that he ceased to be a director on 11 November 2014 and was replaced by Paul Fordyce as the nominee of an external manager of DC Legal’s insolvent shareholder. There is no dispute that Mr Fordyce left in October 2015. It seems that ASIC was not notified of the interruption to Mr Dennis’s directorship of DC Legal. Nothing material turns on these events.

Against that background, this case is another part of the fallout from the collapse of the HIH insurance group. On 15 March 2001 HIH Insurance Limited and its subsidiaries FAI General Insurance Company Limited and HIH Casualty & General Insurance Limited went into liquidation. By order of the Court the HIH Group was wound up on 27 August 2001. The deficiency of the HIH Group was estimated to be between $3.6 billion and $5.3 billion.
Soon after the HIH liquidation commenced Mr Dennis gave consideration to acting for shareholders who may have been misled. He discussed it with Mr Kurland. Mr Dennis says that he does not remember the details of his early arrangements with Mr Kurland. It seems that Mr Kurland looked into the possibility of a claim from a factual perspective. Mr Dennis attended the Royal Commission into the collapse of the HIH group and was given access to the documents. Mr Dennis provided the documents to Mr Kurland for his work on the facts. Mr Dennis says that he paid Mr Kurland a fee for this early work.
Mr Dennis obtained a share registry and started contacting shareholders. He received instructions from some aggrieved shareholders, which by late 2013 had grown to approximately 2,860. Mr Dennis received a fee of $500 from each shareholder. The terms of Mr Dennis’s initial retainer with these clients are unclear, as are the terms of any new retainer between the clients and DC Legal before late 2013, early 2014.
It is not necessary to address the nature of the shareholder claims which were developed other than to say that they claimed to have been misled into acquiring and retaining shares in HIH which lost value in the liquidation. Mr Dennis performed work to progress the claims, first directly and then through DC Legal.
Early on Mr Dennis acted in proceedings brought by individual shareholders, some of which settled on confidential terms. Mr Johnston was one of the early shareholders from whom Mr Dennis received instructions. Mr Dennis acted for Mr Johnston when he commenced proceedings against HIH and the liquidators in 2004. On 23 November 2005 Gzell J dismissed the claim because Mr Johnson did not prove that he had personally relied on the alleged misleading or deceptive conduct: Johnston v McGrath [2005] NSWSC 1183. The appeal was dismissed in 2007. Mr Johnston’s case did not include a claim based on indirect causation, sometimes referred to as “fraud on the market”.
In about May 2010 Mr Kurland decided to recruit new shareholders to make claims against the HIH liquidators. He decided to instruct Mr Joukhador to represent these new clients. Mr Kurland’s idea was that Bookarelli would fund all costs and disbursements of the new cases and take a share of any “distribution” received from the HIH liquidators. Mr Kurland would also “manage” the litigation. Mr Dennis was informed of Mr Kurland’s plan and agreed so long as Mr Kurland did not take any of DC Legal’s existing clients.
In 2013 the HIH liquidators established a scheme of arrangement under which proofs of debt could be lodged by shareholders. Mr Dennis lodged proofs of debts on behalf of his clients, this time alleging loss from fraud on the market. The HIH liquidators rejected the proofs of debt.
From July 2013 a number of proceedings were commenced against the HIH liquidators by which various groups of shareholders challenged the rejection of their proofs of debt. The first was commenced on 15 July 2013 when some shareholders filed proceedings in the Federal Court. These proceedings are referred to as the Cuong Ly proceedings. Mr Joukhador acted for the plaintiffs through his firm Thomas Booler. The proceedings were funded by Bookarelli.
On 23 October 2013 proceedings were commenced in the Supreme Court of New South Wales by another group of shareholders. These are referred to as the Smith proceedings. Mr Joukhador acted for the plaintiffs through Thomas Booler and Bookarelli provided funding.
On 15 November 2013 Mr Dennis commenced the Baldock proceedings in the Supreme Court of New South Wales. DC Legal acted for the plaintiffs with Mr Dennis as the solicitor on the record. These proceedings were not initially funded by Bookarelli.
On 27 November 2013 a final group of shareholders commenced proceedings in the Supreme Court of New South Wales. These are referred to as the De Bortoli proceedings. Mr Joukhador acted for the plaintiffs through Thomas Booler and Bookarelli provided funding.
The Baldock proceedings were brought on a larger scale than Mr Joukhador’s three proceedings. As originally formulated there were approximately 2,800 plaintiffs in the Baldock proceedings. There were less than 200 plaintiffs in the other three proceedings combined. Some of the documents refer to the Baldock proceedings as a class action but they were not in any conventional meaning of that term. Each client was named as an individual plaintiff.
On 20 December 2013 the HIH liquidators filed a notice of motion in the Baldock proceedings by which they challenged the authority of DC Legal to act for all the plaintiffs*.* They filed a similar notice of motion in the Smith proceedings by which they challenged the authority of Thomas Booler to act for the 117 plaintiffs in those proceedings. DC Legal responded to the notice of motion by setting about the work of obtaining new retainer agreements from each of its clients. It was a big task. When the motion was heard on 13 June 2014, DC Legal had received new signed retainer agreements from 1,525 clients.
Each retainer agreement relevantly provided:

The date on the document in evidence is difficult to read. It is between 20 May and 30 May, most probably 26 May 2014.
Clause 1 of the Heads of Agreement provided for a lease to be granted by DC Legal to Mr Joukhador. As at May 2014 Mr Dennis’s wife owned the premises at Level 4, 23 O’Connell Street, Sydney which DC Legal occupied. Although cl 1 referred to a lease being annexed to the Heads of Agreement, there does not appear to have been any such annexure to either of the counterparts on 26 May 2014. Nonetheless, shortly afterwards DC Legal sent a draft lease of part of Ms Dennis’s premises to Mr Joukhador which contemplated a commencement date of 1 July 2014. Mr Joukhador retained solicitors to advise him on the lease. In June 2014 there was some correspondence between those solicitors and DC Legal. On 27 June 2014 Mr Dennis sent an email to Mr Joukhador to which he attached the lease signed by Ms Dennis. A copy of the Heads of Agreement was also attached to the email. From July 2014 Mr Joukhador took up occupation of part of Level 4, 23 O’Connell Street and paid for some modifications to the fit out. Mr Dennis sent him his wife’s bank account details for the payment of rent. On 19 December 2014 Ms Dennis informed Mr Dennis that she had not received the rent specified in the lease for July and November 2014 but she had received it for August, September, October and December 2014. The transaction contemplated by cl 1 of the Heads of Agreement was in fact implemented.
In his Affidavit dated 18 March 2024 Mr Dennis says that no lease was entered into. I do not accept that evidence because it is contradicted by the contemporaneous documents. Given the clarity of the contradictory documents, both as to their provenance and content, I am satisfied that Mr Dennis did not give evidence on this topic which he knew to be untrue. His evidence concerned an event which occurred ten years ago and it is more probable that he forgot.
There is no dispute that most of the nine matters listed in cl 2 of the Heads of Agreement had been brought to DC Legal by Bookarelli. Apart from the Baldock proceedings in cl 2(a), there is no dispute that Bookarelli had hitherto funded all the matters. This may explain why the matters were listed in a document drafted by Mr Kurland. As the litigation funder with an interest in successful outcomes, Bookarelli had its own reasons for wanting to ensure that the matters could continue if Mr Dennis lost his practising certificate. It also explains why Mr Dennis originally raised with Mr Kurland the problem about losing his practising certificate and permitted Mr Kurland to have a role in the solution.
Of the nine matters listed in cl 2, there is evidence that four were dormant and two others were perceived to have doubtful prospects. Nonetheless, in June 2014 Mr Joukhador commenced work on one of the doubtful matters because there was a time limit for a notice of appeal to be lodged. Mr Joukhador says that in the second half of 2014 he performed work on three of the other matters and there are some documents which are consistent with that evidence. Apart from the Baldock proceedings, Mr Dennis says that he did not receive a share of any profit costs in respect of any of these other matters. There is no reason to doubt that evidence although it does not suggest a failure to implement the Heads of Agreement because there is no evidence that any of the other matters had any measure of success after Mr Joukhador took them over.

In the wake of the Heads of Agreement it was necessary to obtain the consent from the individual plaintiffs in the Baldock proceedings to be transferred to Mr Joukhador. Mr Joukhador says that Mr Kurland said he was going to start work on that task immediately after the Heads of Agreement was signed in May 2014, but there is no evidence of any such activity until 10 November 2014.
On 13 June 2014 Brereton J heard the HIH liquidators’ applications to challenge the authority of DC Legal to act for the plaintiffs in the Baldock proceedings and the authority of Thomas Booler to act for the plaintiffs in the Smith proceedings. The judgment subsequently given by Brereton J records that junior counsel appeared at the hearing of the application for the plaintiffs in the Smith proceedings on instructions from Thomas Booler. Mr Dennis is recorded as having appeared for the plaintiffs in the Baldock proceedings and DC Legal is recorded as the solicitors. The liquidators accepted the adequacy of the authority of DC Legal to act for the 1,525 plaintiffs who had signed the new retainer agreements which are extracted at [35] above. The adequacy of DC Legal’s authority to act for the plaintiffs who had not signed new retainer agreements (approximately 1,260) turned on the construction of the pro forma instructions which DC Legal (and before it Mr Dennis personally) had obtained when it contacted shareholders soon after the liquidation of HIH. Although those instructions referred to acting for the shareholders generally, they did not specifically authorise the commencement of proceedings. A small number of the instructions issued to Thomas Booler in the Smith proceedings were in a similar form. Brereton J reserved his decision on the dismissal applications.
As it turned out, the Law Society accepted Mr Dennis’s application to renew his practising certificate from 1 July 2014, although on 16 October 2014 it cancelled his practising certificate. On 23 October 2014 Mr Dennis commenced proceedings to have the cancellation set aside which were successful on 31 October 2014.
Despite cl 4 of the Heads of Agreement, Mr Dennis continued to act for the plaintiffs in the Baldock proceedings after 1 July 2014. Mr Joukhador says that the renewal of Mr Dennis’s practising certificate took the urgency out of the transfer but Mr Joukhador does not claim to have performed any work on the Baldock proceedings until after the final hearing had concluded in March 2015.
On 14 July 2014 Brereton J handed down judgment on the challenges to the solicitors’ authorities. His Honour held that DC Legal did not have authority to conduct the proceedings for plaintiffs who had not executed new retainer agreements: In the matter of HIH Insurance Limited (in liq*) &* ors [2014] NSWSC 922. The Baldock proceedings were dismissed in relation to the unauthorised plaintiffs but otherwise survived. The Smith proceedings also survived.
In July 2014 the Australian Taxation Office commenced proceedings to have DC Legal wound up in insolvency. To avoid that happening, Mr Dennis personally discharged DC Legal’s tax debts. The ATO’s proceedings were dismissed in September 2014.
In August 2014 an expert report was served in the Baldock proceedings which addressed the true value of shares in HIH at various dates. The expert accountant, Dr Coulton, was the same expert from whom a report had been obtained in the Cuong Ly proceedings and from whom a report would be obtained in the De Bortoli proceedings.
Another issue which arose in August 2014 was security for costs. Mr Dennis received correspondence from the solicitors acting for the HIH liquidators, which correspondence he forwarded to Mr Kurland. DC Legal’s billing records show that on 8 September 2014 a conference was held with counsel which was attended by all of Mr Dennis, Mr Joukhador and Mr Kurland. Security for costs was one of the issues discussed. Security was not provided and the HIH liquidators subsequently made an application in the each of the four proceedings. Brereton J heard the applications on 10 November 2014. No counsel appeared. The HIH liquidators were represented by a solicitor. Mr Dennis appeared for the plaintiffs in the Baldock proceedings. A solicitor from Thomas Booler appeared for the plaintiffs in the other proceedings. For the reasons given ex tempore, Brereton J dismissed the applications. His Honour’s reasons include a statement that the Cuong Ly, Smith and De Bortoli proceedings were funded by a litigation funder but that “there is no litigation funder” for the Baldock proceedings, although DC Legal was acting on a contingency basis.
On the same day, 10 November 2014, and over the following days, DC Legal sent a letter to all the clients who were still plaintiffs in the Baldock proceedings. The letter stated:

The Agreement attached to Bookarelli’s letter (and it may be inferred as a further enclosure with the covering letter from DC Legal) was a pro forma funding agreement which contemplated an agreement between each client and Bookarelli. It was a simple document with less than one page of operative provisions. It included a promise by Bookarelli to cause the client’s claims to be prosecuted. It stated that Bookarelli “shall be solely liable for the Legal Costs and Disbursements”. The client promised to pay to Bookarelli half of the “Final Amounts” less any monies already paid by the client to Dennis & Co. The term “Final Amounts” was defined as the amount for which the claims were settled and/or a dividend paid, or for which judgment is given in favour of the client, but excluding any costs recovered. The agreement contained a statement that the client “hereby” gave an irrevocable direction to the HIH liquidators to pay money to Bookarelli. Bookarelli promised to distribute half of the final amounts (plus any amounts already paid to Dennis & Co) to the client and the balance to itself.
Also attached to Bookarelli’s letter (and it may be inferred as a further enclosure with the covering letter from DC Legal) was a pro forma Authority. It was a unilateral document. Amongst other things, it authorised Thomas Booler or any other solicitor nominated by Bookarelli to conduct the litigation and to agree to a settlement on such terms as Thomas Booler and/or Bookarelli may in their absolute discretion deem fit. The Authority stated that it superseded the authority given to Dennis & Co or DC Legal. The Authority further authorised the liquidators to pay any money owed to the client into any bank account nominated by Bookarelli or to Bookarelli itself.
There are a number of copies of the covering letter from DC Legal in evidence, each of which contains a signature block where “DC Legal Pty Ltd” is printed under which “D C Legal” is written in a style which resembles handwriting. To the untrained eye, the handwriting on each covering letter is identical both as to form and location relative to the printed words. The letters all appear to be exact copies, albeit each one is addressed to a different client. By way of comparison, the evidence also includes a copy of a letter dated 1 June 2012 written to a named client on a different topic. That letter contains a signature block where “Dennis & Company” and “Bruce Dennis” are printed between which there is a signature which is unreadable but which is similar to Mr Dennis’s signature on his affidavits in these proceedings. The letter dated 1 June 2012 was a covering letter for a Statement of Account which is also in evidence. The Statement of Account contains a signature block where “DC Legal Pty Ltd” is printed under which “D C Legal” is written in the same style as that used on the letters dated 10 November 2014. Again, to the untrained eye the handwriting on the Statement of Account dated 1 June 2012 is identical in form to the letters dated 10 November 2014 although it is slightly higher relative to the printed words “D C legal Pty Ltd”. The inference to be drawn is that DC Legal had an automated process by which some letters were signed, which process was known to and used by Mr Dennis when he signed the covering letter on 1 June 2012. There is no basis to conclude that he did not still have that knowledge on 10 November 2014 when the letters were sent to the clients in the Baldock proceedings.
The Defendants submit that the letters and authorities dispatched by DC Legal and Bookarelli on 10 November 2014 were the authorities which Mr Kurland said he would start sending out immediately after the Heads of Agreement was signed in May 2014. They submit that the authorities would have been sent out earlier but the security for costs application caused DC Legal and Bookarelli to delay. It is submitted that DC Legal and Bookarelli thought that the Baldock clients were more likely to be able to avoid being ordered to provide security if they were “unfunded”. Once the security for costs application was “out of the way” work could begin to obtain consent to the transfer to Mr Joukhador. This is a serious allegation because it raises the possibility that Brereton J was misled when his Honour heard the security for costs application. However, it is not necessary to decide this issue. From 10 November 2014 DC Legal and Bookarelli took active steps to facilitate the transfer of the Baldock proceedings as contemplated by cl 2(a) of the Heads of Agreement. It does not matter whether they had the intention to do so at every moment beforehand.
In any event, after 10 November 2014 the client in the Baldock proceedings began signing and returning the authorities. Bookarelli subsequently sent follow up correspondence to those who did not respond.
Mr Joukhador submits that on 11 November 2014 Mr Dennis ceased to be a director of DC Legal and was replaced by Mr Fordyce as the nominee of the external managers of DC Legal’s parent company. The facts surrounding this event are addressed above. Nothing in particular turns on it because, regardless of his status as a director of DC Legal, Mr Dennis continued to act as a solicitor in the Baldock proceedings.
Meanwhile senior counsel was retained in the Baldock proceedings in anticipation of a final hearing in February 2015. It was the same senior counsel as had already been briefed to appear for the plaintiffs in the Cuong Ly, Smith and De Bortoli proceedings. On 30 October 2014 senior counsel sent his fee disclosure letter for the Baldock proceedings. He sent it to Thomas Booler, not DC Legal. In that letter he stated:

There is no dispute about the role Bookarelli played in the Cuong Ly, Smith and the De Bortoli proceedings. The commencement of the proceedings was Mr Kurland’s idea. From the outset he, and hence Bookarelli, was heavily involved. Bookarelli funded any disbursements which had to be paid and Mr Kurland managed the cases. In particular, Mr Kurland directly retained and instructed Dr Coulton who would end up giving evidence about the value of HIH shares at the times misrepresentations were made.
The importance of Dr Coulton’s evidence should not be understated. A review of Brereton J’s subsequent reasons for judgment (In the matter of HIH Insurance Limited (in liq*) &* o**rs [2016] NSWSC 482) shows that Dr Coulton’s evidence was the foundation on which all the plaintiffs’ claims were based. That is not surprising. The case was one of misleading and deceptive conduct constituted by financial statements made by entities in Australia’s largest insurance group. Concessions were ultimately made that certain conduct was misleading and deceptive but the impact on the market share price still needed to be proved by reference to what the share price would have been had the misleading and deceptive conduct not occurred. The topics on which Dr Coulton gave evidence were complex. Mr Kurland evidently undertook a very significant task, likely the most significant task, in dealing with Dr Coulton. The first report by Dr Coulton was filed in the Cuong Ly proceedings in November 2013 from which it may be inferred that Mr Kurland’s work with Dr Coulton was well underway by that early date. It may also be inferred that significant fees had been paid to Dr Coulton by that early date.
There was a significant dispute at trial about what role Bookarelli played in the Baldock proceedings. The issue is not as important as the attention given to it suggests, but Bookarelli’s involvement provides context. Although it was addressed in broader terms, the keenest focus of the issue relates to the payment of disbursements, especially fees for counsel, Dr Coulton’s fees and costs assessment expenses.
At the commencement of the Baldock proceedings Mr Dennis was the solicitor on the record for the plaintiffs. He performed the functions typically performed by a solicitor. There does not appear to be any dispute that Mr Kurland performed a role in investigating the factual circumstances of the case as he had done in relation to claims against the HIH liquidators over previous years. Mr Dennis refers to an arrangement in which he would perform the legal work and Mr Kurland would investigate the factual background that might provide a basis for a claim. Again, the importance of the factual investigation should not be understated. The nature of the case required an understanding of the financial circumstances of the HIH group. DC Legal’s billing records record a payment of $11,500 for a report on the factual circumstances, which payment was made on 12 November 2013. It is improbable that that was the first such payment to Bookarelli.
Once they were commenced, there was extensive common ground between the Baldock proceedings and the other three proceedings. There is no dispute that Mr Dennis was aware of the other proceedings. The Court case managed all four proceedings together. As stated above, Dr Coulton was the expert witness retained in the Baldock proceedings as in the other three. I infer that Mr Kurland’s work with Dr Coulton included preparation of the report which was filed in the Baldock proceedings in August 2014. That may be inferred because there is no record in DC Legal’s costing records of Mr Dennis conferring with Dr Coulton or otherwise communicating with him, except for a single discussion on 26 February 2015. On 27 February 2015 Mr Dennis reviewed a “further expert report” prepared by Mr Gower, the accountant retained by the HIH liquidators. Apart from that, the Baldock proceedings appear to have been conducted without Mr Dennis engaging with the expert accounting issues despite them being central to the case.
There is no dispute that Mr Dennis retained the same junior counsel to advise and appear in the Baldock proceedings as had been retained in the other three proceedings. There may be a dispute about whether the junior counsel was retained first by Mr Dennis or by Mr Joukhador but it does not matter.
I have referred above to the retainer of senior counsel. There is no dispute that senior counsel was retained by Mr Joukhador, not DC Legal, and that Mr Joukhador ultimately paid senior counsel’s fees, not DC Legal. Some of Mr Dennis’s evidence suggests that he did not see a need to retain senior counsel and submissions were made in closing that DC Legal had no choice but to be represented by senior counsel at the final hearing because the plaintiffs in all four proceedings had common representation. At one point Mr Dennis appeared to doubt that senior counsel appeared for the plaintiffs in the Baldock proceedings. I am satisfied that there was never any such doubt and I do not accept Mr Dennis’s evidence to the contrary. As part of the record of the Court, Brereton J’s judgment records that senior counsel appeared for the Baldock plaintiffs. It is implausible that it was otherwise. Senior counsel recorded in his letter dated 30 October 2014 his instructions that the Baldock proceedings were “the lead proceedings”. They were constituted by over 1,000 plaintiffs compared to less than 200 plaintiffs in the other three proceedings combined. Whether or not Mr Dennis thought it necessary, senior counsel represented the Baldock plaintiffs at the hearing.
In addition to Mr Kurland’s work with Dr Coulton, the inference to be drawn from Mr Joukhador’s Affidavit and DC Legal’s costing records is that Mr Kurland was heavily involved in instructing counsel for all four proceedings. There is no dispute that Mr Kurland participated in conferences with junior counsel which were attended by Mr Dennis. Junior counsel sent the same emails addressed to both Mr Dennis and Mr Kurland. The work with counsel was another important aspect of preparation.
As for payment of disbursements, the costing documents subsequently prepared for negotiating a costs settlement with the HIH liquidators show that DC Legal paid $2,620 to junior counsel up until 30 June 2014 and another $24,930 between 1 July 2014 and 8 December 2014. DC Legal did not pay any fees to junior counsel after that date, including fees for the final hearing. DC Legal did not pay any fees for senior counsel. DC Legal did not pay any fees for Dr Coulton, nor any expenses of the costs assessment. Apart from the original filing fee and an “invoice from ASIC” which was paid on 27 March 2015, DC Legal did not pay any other disbursements for the Baldock proceedings.
The conclusion to be drawn from these facts is that Bookarelli funded the Baldock proceedings from no later than the date in 2014 when Dr Coulton worked on the Baldock proceedings, and that it did so exclusively from 8 December 2014 including when work was performed for the final hearing. It also funded all the fees charged by costs consultants when subsequently the costs orders against the HIH liquidators were enforced, negotiated and settled. I also find that Mr Kurland was heavily involved with the management of the Baldock proceedings during the same period. Mr Dennis continued to act, and it may be accepted that he performed substantive legal work up until the end of the hearing, but he was working with counsel and Mr Kurland.
Against that background, there is a dispute about whether, at the time Mr Dennis signed the Heads of Agreement in May 2014, he knew that Bookarelli would be providing funding for the Baldock proceedings. In cross-examination Mr Dennis gave the following evidence:

On 21 September 2017 Mr Joukhador’s practising certificate was suspended because he had been charged with criminal offences. This development posed problems for the Thomas Booler practice. Mr Dennis sought out his friend, Philip Madden, to assist with Mr Joukhador’s practice. Mr Dennis says that he had an interest in Mr Joukhador’s practice continuing because it would be responsible for recovering costs from the HIH liquidators.
On 6 November 2017 a written agreement was entered into between Mr Joukhador, Mr Madden, Maddens Lawyers and Mr Dennis. The company was described as an incorporated legal practice and the proprietor of the firm known as Maddens Lawyers. Mr Madden was a director of the company and the principal and legal director of the firm. He held an unrestricted practising certificate. The agreement provided that the legal practice of Thomas Booler would be incorporated. With the permission of Madden Lawyers, Mr Madden would regularly attend and oversee the operations, management and accounts reporting of Thomas Booler “in a locum capacity…until [Mr Joukhador] shall be entitled to resume management as principal”. A number of specific matters were listed in the written agreement as requiring priority attention including the process of incorporating Thomas Booler, informing insurers, preparing accounts and “management and direction of professional legal staff for the purposes of progressing settlements”. Mr Madden was to be paid “suitable remuneration”. The only provision of the written agreement which concerned Mr Dennis was his promise to assist Mr Madden “in the process of incorporation and/or administration of” Thomas Booler. The written agreement did not refer to Mr Joukhador or Mr Madden recovering costs from the HIH liquidators or Mr Dennis’s interest in the costs.
On 15 November 2017 Harrow Legal was incorporated. Mr Madden was the sole director and shareholder. The Thomas Booler practice was taken over by Harrow Legal. New matters were opened in the name of Harrow Legal but existing matters were completed in the name of Thomas Booler. The finalisation of Thomas Booler’s matters took some time. The Thomas Booler trust account was closed on 31 March 2019. Maddens Lawyers periodically issued tax invoices to Harrow Legal for Mr Madden’s services under the written agreement.

On 9 July 2019 Harrow Legal wrote to the solicitors acting for the HIH liquidators in relation to the Baldock proceedings. Harrow Legal stated that it acted for Dennis & Co and DC Legal. Harrow Legal asserted that Dennis & Co and DC Legal had liens over dividends to be paid by the liquidators to approximately 90 identified plaintiffs which were companies which had been deregistered. Such moneys may have been payable to ASIC. Harrow Legal requested the HIH liquidators to pay the money into court. The evidence does not reveal what, if anything, happened in response to that letter.
On 25 July 2019 the charges against Mr Joukhador were dropped. In September 2019 his practising certificate was reinstated retrospectively from 14 August 2019. He resumed control of the legal practice conducted by Harrow Legal. He became a director of Harrow Legal on 9 August 2019. From 2 September 2019 he was the sole director. Mr Joukhador says that on his return Mr Madden ceased to be involved with Harrow Legal.
In October 2019 Mr Dennis became aware that the HIH liquidators were intending to make an interim distribution to some creditors which included former clients of Dennis & Co and DC Legal who had not been plaintiffs in the Baldock proceedings. Mr Dennis and DC Legal evidently retained Harrow Legal to act for them in asserting a lien over any such distribution. Mr Joukhador was back in the office at that time but he says that Mr Dennis gave the instructions to one of his assistants, not him. On 22 November 2019 Harrow Legal filed a statement of claim in which DC Legal was named as the plaintiff (Mr Dennis was not named as a plaintiff, although allegations were pleaded on his behalf personally). Mr Joukhador of Harrow Legal was named as the plaintiff’s solicitor. The first defendant was ASIC because some of the former clients were deregistered companies. There were 665 defendants who were listed in the schedule. The former clients of Dennis & Co and DC Legal who were the subject of these claims were a distinct group to the plaintiffs in the Baldock proceedings, for whom Harrow Legal continued to act as the successor of Thomas Booler. Mr Joukhador was aware of the proceedings and did not perceive a conflict.
The evidence does not reveal what happened with these proceedings. Mr Joukhador ceased to act for DC Legal in the proceedings after DC Legal commenced these proceedings against him.

All the while, work was undertaken to recover costs from the HIH liquidators in the Baldock proceedings. By the time the costs orders were made, Thomas Booler had replaced DC Legal as the solicitor on the record for the Baldock plaintiffs. From about September 2017 Mr Joukhador was not personally undertaking legal work and from November 2017 Mr Madden had become involved with the practice of Thomas Booler.
There is a dispute about who conducted the costs negotiations on behalf of the plaintiffs, including the plaintiffs in the Baldock proceedings. According to Mr Dennis, after the costs orders were made the files of DC Legal were “transferred to” Mr Joukhador but it appears that they were physically moved to Mr Kurland’s home in Leura where they could be spread out for the purpose of preparing an itemised bill of costs. Mr Dennis told either Mr Joukhador or Mr Kurland (he is not specific) that he would assist with the work “as required”. He says that he subsequently told Mr Madden that the work to prepare the bills was being performed by Sunni Mahatme, who had previously worked at DC Legal but now worked at Mr Joukhador’s practice. Work was also being undertaken by Andrew Giles who appears to have been a sort of freelance costs consultant who had previously worked for Mr Dennis as a law clerk. On 18 May 2018 Mr Giles sent a draft bill of costs to Mr Dennis and Mr Madden. Mr Dennis says that he met with Mr Madden and they went through the draft. This is the only work Mr Dennis claims to have performed on the bills of costs.
In about mid-2018 negotiations commenced with the solicitors for the HIH liquidators to see if agreement could be reached of the quantum of the costs to be paid. Mr Dennis says that he discussed the negotiations with Mr Joukhador on 2 July 2018 and they agreed that Mr Madden would undertake the negotiations, evidently for the plaintiffs in all four proceedings. Mr Dennis says that he discussed it again with Mr Joukhador and Mr Kurland on 22 July 2018 and they decided “to leave the negotiations to” Mr Madden. Mr Dennis further says that he instructed Mr Madden on the approach to take in the negotiations, again apparently for the costs to be recovered for the plaintiffs in all four proceedings not just the Baldock proceedings. Mr Dennis narrates an instance on 14 September 2018 when he met Mr Madden outside the offices of the solicitors for the HIH liquidators and gave some instructions. He then waited whilst Mr Madden went into the offices and then came back out to report what had happened. On 14 September 2018 Mr Madden told Mr Dennis that the HIH liquidators wanted a report from an independent costs consultant about the likely recoverable costs, which Mr Dennis thought was a good idea.
On 11 November 2018 an independent costs consultant, Ms Fogl from QCA, sent a draft report to Mr Mahatme. On 12 November 2018 Mr Mahatme forwarded the draft report to Mr Giles, Mr Dennis and the director at Bookarelli, Paul Riik. Neither the costs consultant nor Mr Mahatme sent the draft report to Mr Madden. On 14 November 2018 Mr Madden asked Mr Dennis about meeting with Ms Fogl. Mr Dennis also spoke to Mr Joukhador about where Mr Madden was up to. Mr Joukhador told Mr Dennis that he would have to talk with Mr Kurland. In early 2019 Mr Madden held meetings with Ms Fogl, QCA and the solicitors acting for the HIH liquidators about which he reported back to Mr Dennis. Mr Dennis continued to give instructions. On 15 May 2019 Mr Madden told Mr Dennis that the amount to be paid was agreed. It appears that the agreement subsequently changed and further negotiations were required over the following year.
Mr Dennis says that he met with Mr Madden on 1 August 2019 when they discussed the dropping of the criminal charges against Mr Joukhador. Mr Madden expressed his expectation that Mr Joukhador would keep him on at the Harrow Legal practice and that he thought he should continue to negotiate with the solicitors acting for the HIH liquidators because he got on well with them. Mr Dennis says that on 21 August 2019 Mr Joukhador agreed that Mr Madden ought to continue the negotiations with the HIH liquidators to close the deal. On 21 February 2020 Mr Madden spoke to Mr Dennis and updated him on the negotiations. He continued to do so over the following months. Mr Madden provided Mr Dennis with a copy of the draft settlement agreement on 19 June 2020. Mr Dennis discussed it with Mr Joukhador. They were not happy with the amounts to be paid but preferred a settlement to the delay of a formal assessment. The Settlement Deed was entered into on 29 June 2020.
In his Affidavit dated 25 October 2025 Mr Joukhador gives a different version of events. Mr Joukhador makes clear that he always took his instructions from Mr Kurland. He says that after the costs orders were made on 28 April 2017 he discussed with Mr Kurland the approach to be taken. Mr Kurland initially instructed Mr Joukhador to get a costs assessment for a sample plaintiff but that proved impracticable because there were too many costs which were common to many plaintiffs. They then prepared long bills of costs for each of the four proceedings. Bookarelli retained Mr Giles to perform the work, with help from Mr Mahatme, Mr Kurland and Mr Joukhador. It took about a year. Mr Joukhador says that Mr Mahatme had previously been employed as a solicitor by Thomas Booler but eventually went to work directly for Bookarelli. Mr Dennis did not participate in the work. Mr Joukhador met socially with Mr Dennis and Mr Kurland three or four times a year but they never discussed the costs recovery. Mr Joukhador says that Mr Madden never asked him for instructions about the costs recovery. Mr Joukhador says that in about November 2018 Ms Fogl and QCA were engaged to negotiate with the solicitors acting for the HIH liquidators and from that time onwards she undertook the negotiations.
Mr Joukhador says that on 21 August 2019 he had lunch with Mr Dennis and Mr Madden to celebrate the reinstatement of his practising certificate. He says that they did not discuss the costs recovery. He says that on his return to the office in September 2019 he took over the costs recoveries for all matters, including the Baldock proceedings, although he does not say from whom he took them over. Mr Joukhador says that after September 2019 Mr Madden ceased to be involved in the costs recovery. There is evidence that Mr Madden continued to be copied in on emails sent by the solicitors acting for the HIH liquidators, but that appears to be because Mr Madden had an old generic email address with included the word “Harrow” which was inadvertently not closed when he left Mr Joukhador’s practice. A number of emails are in evidence from April and June 2020 which are between the solicitors acting for the HIH liquidators and QCA, to which Mr Joukhador and Mr Mahatme are copied in, and also Mr Madden’s “Harrow” email address. The emails attached letters which constitute direct negotiations about the costs. In particular, QCA’s letter dated 23 April 2020 to the solicitors acting for the HIH liquidators stated:

Subsequent letters from QCA to the solicitors acting for the HIH liquidators included formal offers to settle the costs orders.
The conflict between the two narratives is apparent. The essential burden of Mr Dennis’s version of events is that Mr Madden conducted negotiations with the solicitors acting for the HIH liquidators on instructions from Mr Dennis. Mr Joukhador says that the negotiations were conducted by QCA on instructions from Mr Kurland. The resolution of this factual dispute is of limited if any relevance to the issues in the case, although Mr Dennis relies upon his involvement in the negotiations as demonstrating that he had retained Harrow Legal and Mr Joukhador to act as the solicitor for DC Legal in the negotiations. That contention is addressed below. For current purposes, apart from Mr Dennis’s Affidavit dated 18 March 2024, there is no evidence which supports the contention that Mr Madden played a material role in the negotiations with the solicitors acting for the HIH liquidators or that Mr Dennis provided instructions to Mr Madden for that purpose. There is no documentary evidence to support Mr Dennis’s version of events. The only document referred to in Mr Dennis’s Affidavit is the email dated 12 November 2018 by which he received the draft report by QCA from Mr Mahatme. The email does not support Mr Dennis’s case but undermines it. QCA did not send the draft report to Mr Dennis. Although Mr Mahatme forwarded the draft report to Mr Dennis there is no evidence that anyone, including Mr Dennis, forwarded the draft report to Mr Madden. The email does not place Mr Madden and Mr Dennis at the centre of the negotiations with the HIH liquidators but at the periphery. There are no other documents which support Mr Dennis’s version of events and no explanation why not.
By contrast, the correspondence in 2020 shows that QCA was engaged directly in negotiations with the solicitors acting for the HIH liquidators, conduct which is consistent with Mr Joukhador’s version of events and inconsistent with Mr Madden having a role at that time.
There are other objective facts which make Mr Dennis’s description of his role implausible. Mr Dennis had an interest in the costs order made in the Baldock proceedings but not in the other three proceedings. No explanation is given as to how Mr Madden addressed that part of the negotiation. Other than at the most superficial level, Mr Dennis does not refer to any coordination with Mr Joukhador or Mr Kurland in relation to the negotiation for the costs to be paid in the other cases. In particular, Mr Dennis does not describe any liaison with Mr Kurland about payment for disbursements which Bookarelli had funded and which were a significant part of the costs orders made against the HIH liquidators. There is no dispute that the bills of costs were prepared at Mr Kurland’s house with the work being performed by neither Mr Dennis nor Mr Madden. Mr Dennis’s description of Mr Madden’s meeting with the solicitors acting for the HIH liquidators on 14 September 2018 is inexplicable. Why did Mr Dennis not attend the meeting but wait outside for Mr Madden? Mr Dennis’s explanation for why Mr Madden continued with the negotiations after Mr Joukhador returned to the office in September 2019 is denied by Mr Joukhador and lacks the ring of truth. Mr Dennis does not claim to have had any interaction with QCA even though the documents show that QCA was central to the process by at least early 2020, for which QCA charged and Bookarelli evidently paid a significant fee.
For the reasons given in the preceding paragraphs I consider that the statements in Mr Dennis’s Affidavit dated 18 March 2024 about his role and Mr Madden’s role in the negotiations with the HIH liquidators are at best selective and in any event exaggerated. To the extent that it matters, DC Legal has not proved on the balance of probabilities that Mr Madden carried on negotiations with the solicitors acting for the HIH liquidators on instructions from Mr Dennis. That conclusion is to be drawn with more confidence in circumstances where DC Legal served an Affidavit from Mr Madden but did not read it at the hearing. No explanation was given for the failure to call Mr Dennis’s long-term friend who, on Mr Dennis’s version of events, was central to the disputed events and uniquely placed to give evidence which supported Mr Dennis’s case if it was true.

As for the formal execution of documents, on 18 December 2019 Mr Dennis signed authorities to permit the HIH liquidators to pay dividends to Thomas Booler which were again necessary because of authorities previously executed by some plaintiffs in the Baldock proceedings which directed the liquidators to pay moneys to DC Legal. The documents signed on 18 December 2019 were addressed to the HIH liquidators and contained DC Legal’s consent to the dividends being paid by cheque to Thomas Booler. The documents stated “In providing this consent we each waive and release any lien of claim” over funds held by the HIH liquidators and the cheque for the dividends.
On or about 12 March 2020 Mr Dennis executed another authorisation both on his own behalf and on behalf of DC Legal. It was a unilateral document which contained irrevocable consent to the HIH liquidators paying to Mr Joukhador or Thomas Booler distributions which were or would become payable to the plaintiffs in the Baldock proceedings. The authority also stated that Mr Dennis and DC Legal waived and released any lien or claim over any funds comprised in funds held in the estates of HIH. Bookarelli was also named in the authorisation as giving the same consent, waivers and releases. The document was signed separately by a representative of Bookarelli.
On 29 June 2020 a Settlement Agreement was entered into between the liquidators and the plaintiffs in all four proceedings who were listed in Schedule 1. Mr Joukhador signed the Settlement Agreement for and on behalf of the plaintiffs, including the plaintiffs in the Baldock proceedings. By cl 2.2(a) the liquidators agreed to pay the settlement sum of $3,250,000, of which $2,382,000 was attributed to settlement of the costs orders made in the Baldock proceedings. By cl 2.2(b) the liquidators promised to make the payment by giving Mr Joukhador a bank cheque for $2,382,000 drawn in favour of “Thomas Booler Lawyers Law Practice Trust Account”. Lesser sums were attributed to the costs orders made in the Cuong Ly, Smith and De Bortoli proceedings, which the HIH liquidators were to pay by giving Mr Joukhador a bank cheque for $868,000 drawn in favour of “Harrow Legal Pty Ltd Law Practice Trust Account”. The Settlement Agreement contained mutual releases between the HIH liquidators and the plaintiffs for any further costs claims.
By cl 2.1 of the Settlement Agreement payment of the Settlement Sum was conditional upon a number of things, one of which was Mr Dennis and DC Legal making a Deed Poll in the form prescribed in Schedule 4. On 29 June 2020 Mr Dennis made the Deed Poll in Schedule 4 both on his own behalf and on behalf of DC Legal. The Deed Poll is addressed further below but by it Mr Dennis and DC Legal declared their consent to the settlement and directed and authorised payment of the settlement sum in accordance with the terms of the Settlement Agreement. They also waived and released any lien or claim over any funds comprised in funds held in the estates of HIH from which the settlement sum is paid.
There is no dispute that on 29 June 2020 the liquidators gave Mr Joukhador a cheque for $2,382,000 payable to Thomas Booler Lawyers Law Practice Trust Account. Nor is there any dispute that the cheque was deposited into the trust account of Harrow Legal. Whilst the cheque was not paid into the trust account specified in the Settlement Agreement, by June 2020 Mr Joukhador was operating a single trust account and nothing material turns on the payment in. DC Legal’s complaint is about the subsequent payments out.

Once the money had been received conversations occurred between Mr Dennis, Mr Joukhador and Mr Kurland about how the money should be divided. There are disputes about who spoke to whom and the precise dates of which they did so, but nothing turns on the detail. If not before, it soon became apparent that there was a lack of consensus about the share each should receive. Mr Dennis accepted that he told Mr Kurland that he agreed to $500,000 being paid as an interim distribution to each of DC Legal, Mr Joukhador and Bookarelli with the rest to be negotiated. Mr Joukhador was told about the interim payments either by Mr Dennis or by Mr Kurland.
On 8 July 2020 Mr Dennis sent an email to Mr Joukhador and asked him to deposit $500,000 “to DC Legal”.
On 9 July 2020 Mr Joukhador had a conversation with Mr Kurland in which he was told that Mr Dennis was not entitled to any more than $500,000 “as per our agreement”. Mr Joukhador understood the reference to be to the Heads of Agreement which had been entered into on 26 May 2014.
On 9 July 2020 Bookarelli sent a payment direction to Thomas Booler and Harrow Legal in respect of the $3,250,000 “which you hold for us in your Trust Accounts”. Apart from some specific disbursements which totalled $230,514, the direction required payments to DC Legal ($500,000), Bookarelli ($1,550,000) and Mr Joukhador ($969,486). Twenty minutes later Bookarelli sent an amended payment direction to increase the amount to be paid to Bookarelli by $30,514 and reduce the disbursements by the same sum because, the email stated, Bookarelli had already paid that sum to the costs assessor. As the recipient of a payment direction from the entity which he regarded as his client, Mr Joukhador was unsure of his obligations. He consulted a trust inspector at the Law Society and a barrister and was told by each that he was obliged to comply with the direction from his client.
On 13 July 2020 Bookarelli issued an amended payment direction which was the same as the first except the $30,514 increase in the payment to Bookarelli was reversed with the result that that sum was added to the balance to be paid to Mr Joukhador. On the same day Mr Joukhador released the funds from his trust account in accordance with the amended payment direction. There is no dispute that the final payments were:

The Heads of Agreement came to assume prominence in the case in unusual circumstances which need to be explained.
The Statement of Claim filed on 22 April 2022 made no reference to the Heads of Agreement. On the contrary it was alleged in paragraph 39 that between June 2014 and July 2015 Mr Dennis and Mr Joukhador negotiated in relation to representation and case management for the plaintiffs in the Baldock proceedings. It was specifically alleged in paragraph 40 that no agreement was concluded in 2014.
In their Defence filed on 4 September 2023, the Defendants denied paragraph 40 of the Statement of Claim. In paragraphs 24 and 60 they positively pleaded that the Heads of Agreement was entered into. The Defendants not only pleaded the Heads of Agreement, they pleaded that the payments from Harrow Legal’s trust account on 13 July 2020 were made in accordance with its terms. It was positively alleged that the $2,382,000 payment related to the Baldock proceedings for the purposes of cl 3 of the Heads of Agreement, from which was to be deducted disbursements solely relating to the Baldock proceedings ($95,960.75) and a pro rata share of Bookarelli’s expenses for funding and other services for all four proceedings ($1,729,938 - corrected for a mathematical error), leaving profits costs of $556,102 to be divided half each between DC Legal and Mr Joukhador. DC Legal had already received more than the resulting figure.
DC Legal filed a Reply on 26 September 2023 in which it denied that there was a “concluded agreement”. It also alleged that the Heads of Agreement was so uncertain as to be unenforceable. Alternatively it was alleged that it had been abandoned or terminated, or that there was a total failure of consideration.
As already observed, early on Mr Joukhador filed a cross-claim against DC Legal by which he claimed reimbursement of the excess which had allegedly been paid to DC Legal, although by the time the hearing commenced the cross-claim was not pressed. In opening, counsel for the Defendants informed the Court that the cross-claim was not being pressed because the evidence did not enable one to work out the payments to Bookarelli for funding and other services, so it was not possible to say whether DC Legal had been overpaid.
The final part of the pleadings was a Statement of Cross-Claim by the Defendants against Bookarelli by which they sought to pass on all or part of any liability they were found to have to DC Legal. The Cross-Claim presupposed the formation and enforceability of the Heads of Agreement. A number of causes of action were relied upon, including the tort of inducing Mr Joukhador to breach the Heads of Agreement. The Heads of Agreement was also alleged to inform Bookarelli’s alleged breach of a funding agreement with Mr Joukhador and the duty of care it was alleged that Bookarelli owed to the Defendants. Bookarelli denied any liability to the Defendants. The Cross-Claim was pressed at the hearing. Bookarelli was represented by counsel.
Thus, when the hearing commenced on 31 March 2025, DC Legal denied the Heads of Agreement and the Defendants pleaded compliance with it as a defensive measure. By the end of the hearing the parties had reversed their respective provisions. On the second day of the hearing DC Legal brought in an Amended Statement of Claim which it was granted leave to file on 2 April 2025, ultimately with the Defendants’ consent. DC Legal continued to deny the Heads of Agreement but for the first time advanced an alternative case which sought to enforce DC Legal’s rights under the Heads of Agreement if it was found to have been formed and to be enforceable. The pleading of the claim under the Heads of Agreement is not straight forward. Paragraph 40A alleges:

Amendments were also made to paragraphs 79 and 85 so that now it is alleged that the payment of $1,555,000 to Bookarelli was a breach of the Heads of Agreement, as was the failure to “account” for that sum, by reason of which DC Legal suffered loss and damage.
On 3 April 2025 the Defendants handed up a Defence to the Amended Statement of Claim. The Defendants denied the new paragraph 40A and made some other substantive changes. The Defendants amended their positive allegation about the operation of cl 3 with respect to the receipt of $2,382,000. They continue to allege the deduction of disbursements solely relating to the Baldock proceedings ($95,960.75) but no longer make the positive allegation that there was an amount for Bookarelli’s expenses for funding and other services, nor do they make a specific allegation about the specific calculation of profit costs. In addition to the $650,000 amount already paid to DC Legal (made up of the $150,000 paid by Bookarelli in October 2017 and the $500,000 paid by Mr Joukhador on 13 July 2020), the Defendants rely on the $500 payments which Mr Dennis received from each of his clients when first instructed.
The Defendants also introduced a new defence based on the conversation between Mr Dennis, Mr Joukhador and Mr Kurland on 28 May 2020. This too is an unusual pleading. The burden of the new defence is that DC Legal contends “upon the Plaintiff’s further and better particulars and evidence” that an agreement was formed during the conversation which is referred to as the “2020 Agreement”. The effect of the 2020 Agreement is that the total receipt from the HIH liquidators for the costs of all four proceedings ($3,250,000) was to be treated as a whole, from which would be deducted certain minor disbursements and then divided by three. Whilst the Defendants deny any such agreement was formed, if the Court finds the 2020 Agreement proved, or if DC Legal is estopped from denying it, then it superseded the Heads of Agreement and the Defendants’ liability is to be determined in accordance with the 2020 Agreement. On the contingent basis, the Defendants allege that the $500,000 paid to DC Legal was paid pursuant to the 2020 Agreement. The Defendants do not make any allegation about the balance of the $3,250,000 receipt. The purpose of this pleading is to put a cap on the Defendants’ liability if $500,000 (or $650,000) turns out to be less than DC Legal is otherwise entitled.
The Joint Memorandum of Facts dated 28 March 2025 listed some of the issues thrown up by the pleadings. In paragraph 4(a) it identified another issue which is not referred to in the pleadings, namely whether the Heads of Agreement was subject to conditions that Mr Joukhador would act for the plaintiffs in the proceedings and assume liability for “rents and costs of conducting the proceeding”.
Thus, the following issues need to be decided:
whether DC Legal and Mr Joukhador entered into an agreement on 26 May 2014;
what were the terms of the agreement, express and implied;
whether the agreement was so uncertain as to be unenforceable;
whether the agreement was subject to unfulfilled conditions;
whether the agreement was subsequently abandoned;
whether there was a total failure of consideration and a termination;
whether the Heads of Agreement was superseded by a new agreement entered into in May 2020;
whether it is open on the pleading for DC Legal to contend that Mr Joukhador breached the Heads of Agreement; and
whether Mr Joukhador breached the Heads of Agreement.

The basis for DC Legal’s continuing denial that there was a concluded agreement is opaque. Mr Dennis’s own evidence given in chief is that Mr Kurland said he would prepare a document about Mr Joukhador taking over DC Legal’s files, that Mr Kurland subsequently presented “the document” to Mr Dennis and that he signed it in May 2014. The evidence includes a copy of a document entitled “Heads of Agreement” which provides for Mr Joukhador to take over DC Legal’s files. The document contemplated signatures by each of Mr Dennis and Mr Joukhador. The document in evidence was signed by Mr Dennis. It is dated (most likely) 26 May 2014. The document was evidently intended to record Mr Dennis’s agreement and there is no reason not to take it at face value.
The identities of the parties to a contract is a question of construction: Air Tahiti Nui Pty Ltd v McKenzie (2009) 77 NSWLR 299; [2009] NSWCA 429 at [28] (Allsop P and Handley AJA, Hodgson JA agreeing). On its face, the document describes the parties as “DC Legal Pty Ltd” and “Marcel Joukhador”. To the extent that they address taking over files and sharing profit costs, all obligations and entitlements in the Heads of Agreement are expressed in terms of DC Legal, not Mr Dennis personally. Whilst Mr Dennis signed the document above his printed name, as a matter of construction the intention was that he sign on behalf of DC Legal. Objectively viewed, DC Legal is a party to the Heads of Agreement. DC Legal does not suggest otherwise.
Mr Dennis says that he does not recall receiving a counterpart signed by Mr Joukhador, but he does not deny it. Mr Joukhador says that he signed a counterpart and gave it to Mr Dennis as an “exchange”. Mr Joukhador does not have the document signed by himself, nor would he be expected to after the exchange.
Despite this evidence, DC Legal submits that the Court should find that Mr Joukhador never signed a counterpart of the Heads of Agreement. Only one matter is relied on for that conclusion, namely that when Mr Dennis emailed the signed lease on 27 June 2014, he included in the attachment a counterpart of the Heads of Agreement signed by himself, not by Mr Joukhador. As I understand the argument, if Mr Dennis had received a counterpart signed by Mr Joukhador he would have attached that counterpart instead. It is therefore to be inferred that Mr Dennis never received such a counterpart and that was because Mr Joukhador never signed one. I do not accept this reasoning because it does not grapple with the question why Mr Dennis thought it necessary to include a copy of the Heads of Agreement when he emailed the signed lease to Mr Joukhador. The covering email gives no explanation. Mr Dennis does not address the circumstance in his affidavits. An explanation is offered by the Defendants who suggest that Mr Dennis wanted to make clear that the signed lease was the document referred to in cl 1 of the Heads of Agreement which was evidently absent on 26 June 2014 despite the statement that it was “annexed hereto and marked ‘A’”. That is plausible and no other explanation is suggested. In any event, DC Legal’s argument is self-contradictory because Mr Dennis’s inclusion of the counterpart of the Heads of Agreement with his email on 27 June 2014 shows that he was proceeding on the basis that the Heads of Agreement was operative, no matter who had signed the counterpart.
On the balance of probabilities, the inference to be drawn from the contemporaneous documentary evidence and the oral evidence given by both witnesses (none of which contradicts the documentary evidence) is that DC Legal and Mr Joukhador entered into an agreement on the terms of the Heads of Agreement, each by signing and exchanging a counterpart on 26 May 2014.
Both parties referred to subsequent conduct and submitted that the conduct was or was not consistent with the formation of a contract on the terms of the Heads of Agreement. Regard to such conduct is permissible on the question whether a contract was formed: Sinclair v Balanian (2024) 114 NSWLR 248; [2024] NSWCA 144 at [16] (Leeming JA). In view of the clear inference referred to in the preceding paragraph it is not necessary to have regard to the post-contractual conduct. To the extent that there was conduct which DC Legal says was inconsistent with the Heads of Agreement, that conduct is better understood in the context of DC Legal’s contention that the contract was subsequently abandoned, or vitiated by a total failure of consideration or terminated.

The term “profit costs” is not defined in the Heads of Agreement. The Defendants submit that it means professional cots as distinct from disbursements. They submit that “profit costs” is a term of art but they do not make good that submission by referring to two cases where the term was used in the context of particular facts (including particular costing documents). As used in cl 3, “profit costs” takes its meaning from the context of the Heads of Agreement read as a whole and having regard to the purpose: Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 at [46] (French CJ, Nettle and Gordon JJ). The transaction implemented by cll 2 and 3 was a transaction between two solicitors for litigation files to be transferred from one to the other. A fact known to both parties was that all of the transferred files were funded by a litigation funder which was named in cl 3 (Bookarelli). Whilst that funding may cover disbursements, DC Legal did not have an agreement with Bookarelli to pay its professional fees and there is nothing to suggest that the position would be different for Mr Joukhador. That was certainly the case with the Baldock proceedings. The value of the matters, and the reason why Mr Joukhador would be prepared to pay consideration for them, was the prospect of receiving payment for professional fees, most likely from the defendant in the proceedings, if anyone.
The text of cl 3 makes plain that “profit costs” was intended to be something which Mr Joukhador could receive, and also something from which payments to Bookarelli could be deducted. These matters lead to the conclusion that the parties intended “profit costs” to mean payments received by Mr Joukhador under an order that the defendant pay the plaintiffs’ costs. That construction is consistent with the word “costs” which makes sense from the perspective of a defendant in proceedings but less so from the perspective of solicitors like DC Legal and Mr Joukhador. A solicitor receives “fees” for his or her professional services, not “costs”. The adjective “profit” means that not all costs received from the defendant are to be included, only those which are for the solicitor’s professional fees as opposed to disbursements.
The second element in the calculation is amounts paid to Bookarelli. Not all such payments are to be brought to account, only those which were paid “for their funding and other services”. The Defendants submit that “funding” is a noun with the consequence that the payments “for funding” include payments to Bookarelli as consideration for providing funding. I do not accept that submission. In the context of cl 3, and as a deduction from the profit costs received by Mr Joukhador, “funding” is not a noun but an adjective which is part of a composite qualification of “services”. The second element includes payments made to Bookarelli to reimburse it for the funding it has provided by, for example, paying disbursements such as barrister fees and expert witness fees. It does not include payments made to Bookarelli as part of its profit from the successful outcome in a matter. That conclusion follows even if “funding” is a noun.
Mr Dennis’s evidence is that Bookarelli provided other services such as factual investigation, which services had been and might be expected to continue to be provided in relation to the Baldock proceedings. Payments for such services are included in the second element even though Bookarelli would retain those payments as remuneration for providing the services. The Defendants submit that a payment to Bookarelli for the original referral of one of the matters would also be included but that is not so. In the context of cl 3, the funding and other services had to be provided for the purpose of the clients prosecuting their claims. A referral fee would have been paid for a service provided to DC Legal, not the clients.
The content of the two elements having been identified, there is a dispute between the parties about the relationship between them for the purpose of calculating the amount of the payment which Mr Joukhador promised to make to DC Legal. DC Legal submits that the operation of cl 3 is that the second element (amounts paid to Bookarelli for their funding and other services) is to be deducted from the first element (profit costs received by Mr Joukhador) to produce an amount to be divided in half. That operation conforms to the plain meaning of the words.
The Defendants submit that all monies received by Mr Joukhador both for costs and damages constitutes a single fund from which the second element is to be deducted to calculate the first element. The operation for which the Defendants contend might be thought to be more favourable to DC Legal because the starting point is a larger pool. That may not be so because there would also be larger deductions because the Defendants (incorrectly) submit that amounts paid to Bookarelli for its profit are also to be deducted. The Defendants submit that the syntax or structure of cl 3 favours their construction because it contemplates that the “profit costs” would be received by Mr Joukhador “after” Bookarelli has been paid: the clause sets up an order of payment which is, first, the deduction of payments to Bookarelli for its profits and other services (which includes its “funder’s fee” or “commission”) and, then, receipt by Mr Joukhador of his profit costs. The Defendants’ see support for their construction in the fact that Mr Joukhador would not be expected to make payments to Bookarelli from his “profit costs”.
There are a number of difficulties with the Defendants’ construction. The fund said to be constituted by all monies received from a defendant whether as costs or damages is not referred to in cl 3, or even alluded to. It is not inferred. The fund would also be difficult to identify because the clients in a case would also have an entitlement to part of any money received as damages from a defendant which would have to be deducted from the total receipts by Mr Joukhador. There is nothing in cl 3 (or the Defendants’ submissions) which addresses how the clients’ share is to be taken into account. Thus, the commercial efficacy of the Defendants construction depends upon there being a limit to that to which the funder (Bookarelli) is entitled out of the supposed fund so as to leave an amount of “profit costs” but such a limit has not been shown to exist. On the Defendants’ construction the calculation of the profit costs may be arbitrary and dependent upon decisions made unilaterally by Bookarelli.
The commercial efficacy of DC Legal’s construction is readily apparent because “profit costs” only includes payments received as payment of costs orders, which preserves other payments (such as damages) as a separate source of the funder’s profit in accordance with whatever terms the funder had agreed with the client. The Defendants seek to undermine that conclusion by saying that Mr Joukhador was obliged to pay away any money directed by Bookarelli, which meant that he might be left with a contractual obligation to pay money to DC Legal without the means to perform that obligation. I don’t accept that submission. Having promised to pay DC Legal half of the costs received from the HIH liquidators minus payments to Bookarelli for funding and other services, it was a matter for Mr Joukhador to put in place whatever mechanism he needed to perform his promise to DC Legal, including contractual terms for the provision of information as part of his direct contractual relationship with Bookarelli. As a practical matter, once he took over the Baldock file Mr Joukhador would be the solicitor representing the client in the negotiations of costs with the HIH liquidators. As part of that process, he would be entitled to be sufficiently familiar with the payments claimed by Bookarelli to enable him to calculate the amount he had to pay DC Legal once he received the payment for costs from the HIH liquidators.
The Defendants’ construction requires the reference to “deduction” in cl 3 to be read as relating to profit costs “received” by Mr Joukhador when the more natural reading of cl 3 as a whole is that “deduction” relates to the calculation of the “amount” to be divided, half each, whether or not there was an actual deduction from any receipt. Contrary to the Defendants’ submissions there is nothing unexpected about Mr Joukhador making payments to Bookarelli because “profit costs” are the payments received pursuant to costs orders and subject only to payments to Bookarelli for funding and other services, not payments for the funder’s profit. The payments to Bookarelli are in the nature of reimbursement for disbursements. Mr Joukhador would be expected to make such payments to Bookarelli.
It may be accepted that cl 3 is not perfectly drafted but the meaning is readily apparent. The construction for which DC Legal contends better conforms to the text of the clause, the context of the Heads of Agreement as a whole and the purpose of the transaction. Properly contrasted, Mr Joukhador promised to pay DC Legal an amount equal to 50% of payments received in payment of costs orders, which amount is to be calculated by first deducting the payments to Bookarelli for funding and other services, not payments for Bookarelli’s profit.
The Defendants submit that it is unclear whether there is a single payment obligation for all nine matters or one payment obligation for each matter. The Defendants accept that it does not make a difference to the amount ultimately to be paid but it may make a difference to the time when the payment was to be made. The better construction of cl 3 is that there is a separate payment obligation for each matter because the word “each” requires the payments to Bookarelli to be identified by reference to a specific matter which would be unnecessary if there was only a single payment obligation for all nine matters. That construction also makes cl 3 more workable (and thus more likely what was intended) because the nature of litigation is that each matter would have had its own duration. Once costs had been received in one matter, there is no apparent reason why the parties would have intended the payment to DC Legal to be postponed until all other matters had also been concluded.
In that regard, litigation is uncertain. In May 2014 the Baldock proceedings were at a relatively early stage and many future developments were possible, including summary dismissal, stay, loss after a hearing, success, appeals, further appeals and settlement. It would not have been possible to say with any confidence what work would be required of Mr Joukhador in the future and how the magnitude of that work might compare with the work already performed by DC Legal. Nonetheless, the agreed payment regime in cl 3 is not concerned with which solicitor actually performed any particular work or when it was performed. The division of profit costs is simple: half each. Each party accepted the risk that the share ultimately received by it or him may be disproportionate to the work actually performed, either to its or his advantage or disadvantage. The parties chose a simple sharing arrangement. There is nothing uncommercial about that approach.
In paragraph 40A(ii) of the Amended Statement of Claim it is alleged that the proper construction of the Heads of Agreement is that DC Legal “retained” Mr Joukhador to recover certain costs. There is nothing in the text to support that allegation. Mr Joukhador’s status as a solicitor was relevant to the agreement because he was to take over DC Legal’s matters. Once he took over the matters, he would be the solicitor for the clients, not for DC Legal. Mr Joukhador’s only obligation to DC Legal was to pay a sum of money. Neither cl 3 nor any other provision in the Heads of Agreement required Mr Joukhador to perform any services for DC Legal including the recovery of costs.
There is in any event a tension between the construction alleged by DC Legal and the scheme in cl 3. DC Legal’s alleged term would have obliged Mr Joukhador to recover “the reasonable professional costs [DC Legal] had incurred”. Assuming those words have some meaning, they would have cast upon Mr Joukhador a concern for DC Legal’s costs entitlements which the simple payment regime in cl 3 was intended to avoid.
A retainer by DC Legal would also give rise to a tension with the requirement that Mr Joukhador become the solicitor for the clients. Once he became their solicitor, Mr Joukhador would owe the clients the duties which a solicitor usually owes his or her client, including fiduciary duties. Were Mr Joukhador also to owe duties to DC Legal he may have been placed in a position of conflict. As at May 2014 the clients were the persons from whom the “reasonable professional costs” would have to be recovered by Mr Joukhador under the alleged retainer by DC Legal. A fiduciary is obliged not to enter upon conflicting engagements to several parties: Breen v Williams (1996) 186 CLR 71; [1996] HCA 57 at 135 (Gummow J). Objectively viewed, the parties to the Heads of Agreement must have intended that Mr Joukhador would be free to perform his duties to the clients without the potential conflict of a retainer from DC Legal. For these reasons the construction contended for in paragraph 40A(ii) of the Amended Statement of Claim cannot be accepted.
It should also be observed that even if the Heads of Agreement did impose an obligation on Mr Joukhador to recover costs, there is no allegation that he breached that obligation. Mr Joukhador recovered $2,382,000 attributed to the costs orders made against the liquidators in the Baldock proceedings. There is no dispute about the adequacy or reasonableness of that sum. DC Legal’s complaint is directed to the accounting for the sum after it was recovered.
DC Legal further alleges in paragraph 40A(iii) of the Amended Statement of Claim that the proper construction of the Heads of Agreement is that it imposed two specific obligations on Mr Joukhador, namely that he would not pay away money received by him in respect of professional costs without the express direction of DC Legal, and that he would hold such money on trust. There is nothing in the text of the Heads of Agreement from which it can be said that Mr Joukhador assumed either obligation. Both obligations are in tension with cl 3. Mr Joukhador’s express promise to pay an amount of money depended upon him having “received” profit costs. Once he received profit costs he became subject to a contractual obligation to make a payment “equal to” half. His payment obligation in no way depended on him retaining the profit costs. If, having received profit costs, he paid them away to a third party he would not on that account have been relieved of his contractual liability to DC Legal.
Nor is there anything in the Heads of Agreement from which it may be concluded that the parties intended that the profit costs received by Mr Joukhador would be held on trust. An express trust might have been a mechanism by which DC Legal sought to protect its commercial interests in receiving a future payment, but the text of the Heads of Agreement uses the language of contractual obligation. Unless Mr Dennis had a concern about the solvency of Mr Joukhador, about which there is no evidence and which seems improbable because Mr Joukhador’s future participation in his chosen profession depended on his continued solvency (e.g. Legal Profession Uniform Law (NSW) 2014, s 86(a)), there is no apparent reason why DC Legal would necessarily have intended that it receive more protection than Mr Joukhador’s contractual promise to pay a sum of money. Absent clear words, the Court ought not too readily classify a commercial relationship as one of trustee/beneficiary with its onerous fiduciary obligations which might better be seen as a purely contractual relationship: Naaman v Jaken Properties Australia Pty Ltd (2025) 281 CLR 635; [2025] HCA 1 at [33] (Gageler CJ, Gleeson, Jagot and Beech-Jones JJ). For these reasons the construction of the Heads of Agreement contended for in paragraph 40A(iii) of the Amended Statement of Claim cannot be accepted.

DC Legal further alleges that the Heads of Agreement contained the implied term which is set out in paragraph 40A(i) of the Amended Statement of Claim. The implied term would have imposed two specific obligations on Mr Joukhador, namely to recover professional costs and to “maintain” DC Legal’s particular lien. The implied term is said to have been necessary to give business efficacy to the Heads of Agreement and to be consistent with the other terms. The allegation is to be understood as one on terms implied on the facts of the particular contract. Such an implication is governed by the well-known principles referred to by Mason J in Codelfa Construction Pty Ltd v State Rail Authority of N**ew S**outh W**ales (1982) 149 CLR 337; [1982] HCA 24 at 347.
When considering the implication of such terms it is important to remember that any such implication occurred at the time when the contract was formed. It is an error to take into account subsequent events and problems which have subsequently materialised when deciding whether a particular term would have, for example, been considered to be necessary or to have gone without saying, or to be reasonable and fair at the time the contract was formed: Bou-Simon v BGC Brokers LP [2018] EWCA Civ 1525 at [12] (Asplin J).
The Heads of Agreement did not contain an implied term that Mr Joukhador would recover the profit costs referred to in cl 3. Whether the principles of implication are applied rigidly as in the case of a formal contract or less rigidly as in the case of an informal contract (Byrne v Australian Airlines Ltd (1995) 185 CLR 410; [1995] HCA 24 at 422 (Brennan CJ, Dawson and Toohey JJ)), the matters relied upon fall well short of that which is required.
An obligation to recover was not necessary to give business efficacy to the Heads of Agreement. Mr Joukhador had his own entitlement to half the profit costs which he received, including profit costs referrable to work performed by Mr Dennis before the matters were transferred to Mr Joukhador. Mr Joukhador therefore had his own commercial incentive to recover to the fullest extent. A contractual promise by Mr Joukhador to recover may have been thought desirable but that is not sufficient for the implication of an unwritten term. The promise may just as well have been thought not to be necessary given Mr Joukhador’s self-interest. That is especially so when there is in any event implied in every contract a term that each party will do all such things as are necessary on its part to enable the other party to have the benefit of the contract: Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596; [1979] HCA 51 at 609 (Mason J). Although it is unnecessary to decide, a term of good faith and fair dealing may also have been implied as a legal incident of the Heads of Agreement: Burger King Corporation v Hungry Jack’s Pty Ltd (2001) 69 NSWLR 558; [2001] NSWCA 187 at [167] (Sheller, Beazley and Stein JJA). Objectively viewed, these provisions may have been thought to be sufficient safeguards of DC Legal’s interest in the efficacy of Mr Joukhador’s payment obligation in cl 3. As the Privy Council said in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283, no term will be implied if the contract is effective without it.
A further problem with this part of the implied obligation is that it has not been shown that an obligation to recover costs would have been reasonable and equitable. The obligation which is alleged is the obligation “to recover”. It is untempered by any qualification as to best efforts or reasonableness. Mr Joukhador would have been subject to a strict obligation to recover money which answered the description “professional costs entitled to be recovered”. It was one thing for Mr Joukhador to promise to pay money once he received it and another thing altogether for him to promise to go out and recover the money, especially for a matter such as the Baldock proceedings where DC Legal had over 1,000 individual clients.
As for DC Legal’s contention that the implied obligation would be consistent with the express terms, inconsistency is a reason why a term will not be implied but it is false reasoning to say that consistency with the express terms is therefore sufficient to imply. In any event there is a tension between a positive obligation to recover and the cl 3 regime by which the sum of money to be paid by Mr Joukhador was to be calculated by reference to money actually received.
Once again, it should also be observed that there is no suggestion that Mr Joukhador breached an implied obligation to recover.
There are also problems with the contention that Mr Joukhador was subject to an implied obligation to “maintain” DC Legal’s particular lien. This cannot be a reference to the common law lien which solicitors have over the file to secure payment of their fees. As a possessory security, a solicitor’s lien only applies to property in the solicitor’s possession: E**x parte Patience; Makinson v The Minister (1940) 40 SR (NSW) 96 at 100 (Jordan CJ). Clause 3 of the Heads of Agreement contemplated that the profit costs would come into the possession of Mr Joukhador, not DC Legal so they would never become subject to a solicitors lien.
The lien which Mr Joukhador is alleged to have promised to maintain must be the solicitor’s equitable interest in the fruits of the action described by the Full Court in Ex parte Patience; Makinson at 100 as follows (footnotes omitted):

The question whether the Heads of Agreement was conditional upon Mr Joukhador taking a lease and/or taking over the conduct of the Baldock proceedings was formulated by DC Legal as an issue in the case, but little was said or written about it in closing submissions. In the first instance there is a question of construction about whether the parties intended that the terms operate as conditions, but that does not ultimately matter because the evidence makes plain that any conditions in the Heads of Agreement were fulfilled. Mr Joukhador took the lease contemplated by cl 1, took over the smaller matters listed in cll 2(b)-(i) (or at least those which were not dormant) and eventually took over the Baldock proceedings as required by cl 2(a). Mr Joukhador assumed liability for “rents and costs” because he commenced to pay rent under his lease, retained senior counsel and ultimately paid senior counsel’s fees, and Bookarelli paid the fees of junior counsel and the expert accountant.
The conclusion that the conditions were performed follows even though cl 4 provided that the “effective date” of the Heads of Agreement was 1 July 2014. Mr Joukhador did not take over the Baldock proceedings until much later, although Bookarelli became involved in funding them in 2014 (see further below). The delay in Mr Joukhador taking over the Baldock proceedings does not vitiate the Heads of Agreement. It may be presumed that the shares in the profit costs specified in cl 3 were agreed upon the basis that Mr Joukhador would take over conduct of the matters from 1 July 2014. Even so, objectively viewed cl 4 does not reveal the intention that the entire bargain would not proceed if Mr Joukhador did not take over the Baldock proceedings on that specific date. The text of cl 4 cast the timing obligation (to hand over the files and records) on DC Legal and not on Mr Joukhador. It did not provide that the Heads of Agreement would not govern the parties’ future relationship if Mr Dennis continued to conduct the Baldock proceeding after 1 July 2014. If that was what was intended, simple words to that effect could have been included.
The parties’ intention with respect to the 1 July date is to be determined having regard to the nature of the relevant promise, namely to “take over” the Baldock proceedings. As at May 2014 there were over 1,000 plaintiffs for whom DC Legal acted, each of which was a separate client. By definition, each had a costs agreement with DC Legal and had granted certain authorities. The process of taking over the matter would take time, as demonstrated by Mr Kurland’s response to the exchange or the Heads of Agreement by saying “I’ll start getting the authorities”. Documents had to be prepared, distributed, received and to some extent chased up. There would inevitably be a period during which some of the plaintiffs in the Baldock proceedings would still be clients of DC Legal whilst others had authorised Thomas Booler to act for them. As the solicitor on the record for the plaintiffs, there would inevitably be a continuation of DC Legal’s involvement in the proceedings and it would most likely be prolonged. In that context, cl 4 of the Heads of Agreement was not intended to impose a condition that any particular event occur by 1 July 2014 other than, at most, the handing over of files and records.
A number of submissions were made by DC Legal to the effect that the Heads of Agreement was entered into specifically because Mr Dennis feared that he would lose his practising certificate on 1 July 2014. Whilst that circumstance may explain Mr Dennis’s motivation for entering into the Heads of Agreement it does not change the construction of its terms.
In any event, the factual premise for the submission cannot be accepted. Mr Dennis had a wider regulatory concern. When he first discussed the Law Society’s action with Mr Kurland, in addition to the risk that Mr Dennis’s practising certificate would not be renewed, Mr Kurland raised the possibility that the Law Society might appoint a receiver to Mr Dennis’s practice. That may occur before or after the 1 July date. The Law Society had commenced proceedings against Mr Dennis in early 2014. Mr Dennis was vague in his evidence about the proceedings. There is nothing to suggest that they were not ongoing in the lead up to 1 July 2014 or that they were expected to be concluded by that date. Throughout 2014 the Law Society’s attention to Mr Dennis was ongoing, as illustrated by its decision to cancel Mr Dennis’s renewed practising certificate on 16 October 2014. It may safely be inferred that the cancellation decision was not spontaneous but the result of ongoing work by the Law Society in the preceding months. Mr Dennis would have been aware of all these matters, not least because in the ordinary course the Law Society would have sought Mr Dennis’s response to any allegations against him.
In may be inferred that at all times in 2014 Mr Dennis was apprehensive about losing his practising certificate, which apprehension was not removed by the renewal of the practising certificate on 1 July 2014. The Heads of Agreement does not refer to the non-renewal of Mr Dennis’s practising certificate. It was not intended to operate only in the event that that occurred. Indeed, if the Heads of Agreement was intended solely to address that precise contingency there is no apparent reason why the parties would have thought it necessary to enter into any written agreement as early as May. They could have waited until a time shortly before 1 July 2014 when the rejection of Mr Dennis’s application to renew was notified to him.
The Heads of Agreement was not subject to any unfulfilled condition.

DC Legal has not sought to develop the pleading that there has been a total failure of consideration which has resulted in the Heads of Agreement being terminated. As alleged in paragraph 3 of the Reply, DC Legal relies upon a failure to take the lease, a failure to pay any profit costs and Mr Joukhador’s failure to take over the conduct of the Baldock proceedings prior to the conclusion of the hearing before Brereton J in March 2015. The first two matters are factually incorrect because Mr Joukhador did take the lease and he did pay $500,000 to DC Legal which, although less than DC Legal claims was its entitlement, was referrable to the $2,382,000 which the HIH liquidators paid to discharge the costs orders made against them in the Baldock proceedings. The third matter is correct so far as it goes. Mr Joukhador took over the Baldock proceedings in early 2016. If there was a failure of consideration, it was not total.
Although the pleading uses the language of total failure of consideration, the form of the allegation appears to be one of fundamental breach of the Heads of Agreement in the sense of a breach to the extent that DC Legal’s bargain was substantially destroyed: Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105 at 144 (McHugh JA). Even were such a breach to have occurred it would not have brought the Heads of Agreement to an end. It would have done no more than enliven in DC Legal a right to terminate: Scott v Ennis-Oakes [2020] NSWCA 239 at [38] (Bathurst CJ, Bell P and Gleeson JA agreeing). DC Legal does not claim to have exercised that right. In DC Legal’s favour, acceptance of the fundamental breach and termination of the Heads of Agreement may implicit in the act of filing the Reply in these proceedings on 26 September 2023: Yule v Smith [2013] NSWSC 209 at [54] (Sackar J). Even so, the Heads of Agreement was extant in 2020 when DC Legal says that Mr Joukhador unlawfully paid away the balance of the costs received from the HIH liquidators. There is no substance in the total failure of consideration pleading.

There is a further issue about the Heads of Agreement which needs to be addressed for the sake of completeness. On 30 March 2021 the solicitors acting for DC Legal provided further particulars of an Affidavit sworn by Mr Dennis early in the proceedings and said that in 2020 an Agreement was entered into between DC Legal, Mr Joukhador and Bookarelli. The solicitors said that the effect of the 2020 Agreement was that the costs to be received from the HIH liquidators for all four proceedings would be split three ways after the deduction of some relatively minor disbursements, mostly for costs consultants. Mr Dennis’s Affidavit dated 18 March 2024 was subsequently served where Mr Dennis gives evidence of a conversation which he says that he had a lunch with Mr Joukhador and Mr Kurland on 28 May 2020. At the time, the costs negotiations with the HIH liquidators were drawing to a close and it was anticipated that over $3,000,000 would soon be received. Mr Dennis says that he proposed a three-way split. Mr Kurland said that the proposal “sounds fair” and Mr Joukhador said that Mr Dennis was generous.
DC Legal does not refer to the 2020 Agreement in the Amended Statement of Claim. In its written closing submissions it denies the 2020 Agreement. It does not sue on it.
The Defendants did not refer to the 2020 Agreement in their original Defence, but they do refer to it in the Defence to the Amended Statement of Claim which was filed during the hearing. The terms of the pleading are described above. The Defendants firstly state, that upon its particulars and evidence, DC Legal “maintains a case” based on the 2020 Agreement. The Defendants then deny the 2020 Agreement but say that if it is found to have been entered into then it operates to limit their liability to DC Legal. A fair summary of the pleading is that the Defendants built a straw man, knocked it down and then sought to rely on it.
DC Legal is right not to sue on any agreement formed at the lunch on 28 May 2020. Taking Mr Dennis’s evidence at its highest, the words spoken do not, objectively viewed, reveal an intention by the parties to form a binding agreement. Even if Mr Dennis’s proposal had sufficient certainty for contractual purposes, which may be doubted given the description of the deductions to be made before the three-way split, the responses from each of Mr Kurland and Mr Joukhador are best described as supportive short of committal. Unlike the approach they took in May 2014, there was no suggestion that the 2020 Agreement be recorded in writing. The parties’ subsequent conduct makes clear that none of the three men considered themselves bound by an agreement to a three-way split. Mr Dennis’s evidence is that he had further discussions with Mr Joukhador on 19 June 2020 and 1 July 2020 at which the division of the costs to be received from the HIH liquidator was discussed in terms which were inconsistent with an extant binding commitment to a three-way split. Mr Dennis says that he then had a telephone conversation with Mr Kurland to propose a meeting to “sort out the balance of the fees”.
In his Affidavit dated 25 October 2024 Mr Joukhador denies the conversation on 28 May 2020.
The Heads of Agreement was not superseded by a new agreement in May 2020.

Despite the complicated construction alleged in paragraph 40A of the Amended Statement of Claim, DC Legal submits that it is permitted to contend that Mr Joukhador breached the Heads of Agreement simply because the $500,000 paid to DC Legal was less than the amount calculated in accordance with cl 3. It relies on paragraphs 40A, 74, 75 and 85 of the Amended Statement of Claim. The contention is made in the alternative to the non-contractual causes of action relied upon by DC Legal which are addressed below.
As a pleading point the Defendants submit that there is no such allegation in the Amended Statement of Claim. They object to the claim being advanced. This is an important issue because, for the reasons given below, none of DC Legal’s other causes of action have any merit. In the first instance the terms of the Amended Statement of Claim need to be considered to see if a simple breach of cl 3 is alleged.
Paragraph 40A of the Statement of Claim, which is set out above, commences with a reference to the terms contained in the Heads of Agreement which are pleaded in paragraph 24 and 60 of the Defence. As at 2 April 2025, when the Amended of Statement of Claim was filed, paragraph 60 of the Defence referred to cl 3 of the Heads of Agreement, the two constituent elements of that clause and to DC Legal’s entitlement to be “paid an amount”. Paragraph 40A of the Amended Statement of Claim then proceeds to make allegations about the proper construction of the Heads of Agreement which, by virtue of the cross reference to the Defence, includes cl 3. The words of cl 3 are not set out in the Amended Statement of Claim but that is not required: Uniform Civil Procedure Rules 2005 (NSW) r 14.9(b). What must be stated is the effect of the document: UCPR 14.9(a). Paragraph 40A is to be read in that light.
Of the three complicated allegations about the proper construction of cl 3, the allegation in paragraph 40A(ii) has the best prospects of resembling an allegation of a promise by Mr Joukhador to pay the sum of money required by cl 3. Paragraph 40A(ii) is repeated here:

The obligations to recover and account are alleged as incidents of a retainer. A retainer is particular type of contract. The text of the Heads of Agreement says nothing about a retainer agreement. The only contract which is contemplated by the terms of the Heads of Agreement is the Heads of Agreement itself. Shorn of the needless allegation that the contract between the parties was a retainer, the substance of the obligations to recover and account alleged in paragraph 40A(ii) is that they were contractual obligations arising under the Heads of Agreement.
It also seems clear that the allegation of an obligation to “account” is not meant as a reference to the obligation which arises when the equitable remedy of account is ordered against an accounting party. That would seem to follow from the fact that paragraph 40A(ii) alleges both the obligation (“to account”) and the outcome of the obligation (“in an amount equivalent to 50% of the total professional costs recovered less any disbursements incurred in the Baldock proceedings which had been paid by [Bookarelli] and not recovered by it”). An obligation to account in a specified amount is more in the nature of an obligation to pay.
The meaning of paragraph 40A(ii) is to be understood in the context of the Amended Statement of Claim as a whole. One of the prayers for relief is “an account” which is to be understood as a reference to the equitable remedy. In paragraph 74, the allegation which previously had been that Mr Joukhador was liable to account as DC Legal’s solicitor, fiduciary or trustee was amended to add the alternative that the liability to account was “as to 50 % of the recovered amount for professional costs pursuant to the agreement pleaded at paragraph 40A above”. In paragraph 79 an alternative allegation was added that the payments made by Mr Joukhador to Bookarelli were made in breach of the Heads of Agreement. In paragraph 85 an alternative allegation was added that the loss and damage suffered by DC Legal was caused by “breach of the agreement pleaded in paragraph 40A above”.
The meaning of paragraph 40A(ii) is further to be understood in the context of the pleadings of the other parties as at the third day of the hearing. As set out above, at that time the Defendants specifically alleged in paragraph 60 (and other paragraphs of their Defence such as paragraphs 53 and 56) that the effect of cl 3 of the Heads of Agreement was the imposition of a “simple” payment obligation in cl 3 and that their actions were in accordance with that simple obligation. Paragraph 40A of the Amended Statement of Claim cross referred to paragraph 60 and is to be understood as a response to it.
The answer to this pleading issue ultimately depends upon the purpose of pleadings, which is to avoid the other party being taken by surprise so that the hearing may be conducted in a fair manner: UCPR 14.14(1). In White v Overland [2001] FCA 1333 Allsop J said at [4]:

The deficiency in the Amended Statement of Claim is one of overengineering a simple contractual obligation rather than omitting to say that which is necessary to ensure that the Defendants are not surprised. Whilst it is not plain, given the allegations already made by the Defendants in paragraph 60 of the Defence and the express cross reference to that paragraph, the terms of paragraph 40A(ii) of the Amended Statement of Claim and the subsequent allegations of breach are sufficient fairly to put the Defendants on notice that DC Legal makes the allegation now sought to be relied on in the alternative. The allegation is that, as an incident of his contractual relationship with DC Legal, Mr Joukhador was obliged to account, in the sense that he had to pay an amount equivalent to 50% of the total professional costs he recovered less any disbursements incurred in the Baldock proceedings which have been paid by Bookarelli and not recovered by it. It is open to DC Legal to rely on a breach of the simple contractual payment obligation in cl 3 of the Heads of Agreement.
There is nothing in the circumstances in which the amendment was made at the beginning of the hearing which warrants a different conclusion. Counsel for the Defendants was diligent in his efforts to keep the simple contract claim out but he faced a difficult task because paragraph 60 of the Defence already required the Court to decide the same issue. On the first day of the hearing the question was squarely raised as to whether breach of a simple payment obligation under cl 3 of the Heads of Agreement was an issue in the proceedings. Counsel for the Defendants made it clear that it was the Defendants’ position that the claim was not pleaded by DC Legal. He did so at the same time that he said that the Defendants would not “press” the concluding parts of paragraph 60 of the Defence. Counsel for DC Legal submitted that the issue was already raised by paragraph 60 of the Defence, but in the face of the dispute and the uncertainty, he foreshadowed an application to amend. A draft of the amendment, including the new paragraph 40A, was circulated overnight. Counsel for the Defendants was given time to consider it. In subsequent debate on the application for leave to amend, counsel for the Defendants said that he understood that the amendments did not include a breach of the express payment obligation in cl 3. Counsel for DC Legal expressed the opposite understanding. Notwithstanding the debate, counsel for DC Legal did not seek to make further changes and counsel for the Defendants did not oppose leave being granted for the amendment. In consenting to the amendment, counsel for the Defendants said that he could not point to any prejudice to the Defendants, so long as they were permitted to make consequential amendments to the Defence and to their Cross Claim against Bookarelli and were permitted to lead supplementary evidence from Mr Joukhador. All of those measures were permitted.
On the fourth day of the hearing, 3 April 2025, the Defendants brought in their Defence to the Amended Statement of Claim. By that amendment the Defendants took the opportunity to modify the allegations about cl 3 which had previously been made in paragraph 60. The modifications were extensive and not merely responsive to the new paragraph 40A. The allegation of a simple payment obligation in paragraph 60 of the Defence was removed, as were the allegations that Mr Joukhador had acted in accordance with the Heads of Agreement. No objection was taken to the Defendants’ proposed amendments and leave was granted. Although there is nuance, the outcome is that each party’s pleadings about the simple payment obligation which I have found is contained in cl 3 of the Heads of Agreement was reversed when compared to their pleadings on the first day of the hearing.
In closing oral submissions the Defendants submitted that they will be prejudiced if the Amended Statement of Claim is read as including breach of the simple payment obligation. Two specific matters were identified. First, the allegation will require the Court to make a finding of fact about the amounts paid to Bookarelli for their funding and other services in the Baldock proceedings. Only then will it be possible to know whether the $500,000 paid to DC Legal was sufficient performance of Mr Joukhador’s obligation. The Defendants submit that they are deprived of an opportunity to investigate this issue.
The difficulty with that argument is that the Defence filed by the Defendants on 4 September 2023 raised the same issue. They positively alleged in paragraph 60(g) that the payments to Bookarelli for funding and other services in all four of the proceedings against the HIH liquidators was $2,353,337 of which 73.51% was the pro rata share for the Baldock proceedings. On 4 September 2023 Mr Joukhador swore an Affidavit in which he verified the Defence and stated that he believed the allegations of fact to be true. The allegation remained in the Defendants’ pleading until the fourth day of the hearing, although its removal was foreshadowed on the first day. The Defendants already had every opportunity to investigate the issue, first for the purpose of making the allegation in paragraph 60(g) and then for the purpose of proving it at trial. On the first day of the hearing counsel for the Defendants stated that there is no evidence of the payments to Bookarelli for funding and other services. This suggests that it is doubtful that the Defendants’ position would have improved had they been given a second opportunity to investigate the issue.
A further difficulty with the asserted prejudice is that it only arises if the Defendants bear the onus of proving the amount of the payments made to Bookarelli for funding and other services. Counsel for the Defendants correctly recognised that qualification when he said that the Defendants would be prejudiced if DC Legal is permitted to rely on breach of the cl 3 payment obligation “coupled with the assertion that the onus falls on me to prove the amount of the disbursements, failing which, as it was put this morning DC Legal gets everything”. In fact, DC Legal bears the onus of proving a breach of Mr Joukhador’s obligation to pay under cl 3 (see below). A deficiency in the evidence on that issue will prejudice DC Legal, not the Defendants.
The second element of prejudice specifically identified by the Defendants is that they have chosen not to press their cross-claim against DC Legal because $500,000 was more than Mr Dennis was entitled to under cl 3 of the Heads of Agreement. I do not consider this to be relevant prejudice because the Court was informed that the reason why the cross-claim was not being pressed was that evidence had not been assembled to prove the amount of payments to Bookarelli for funding and other services. On that basis, the cross-claim against DC Legal could not have been pressed, let alone succeeded, in any event. The claimed prejudice does not withstand scrutiny.
It is open on the pleading for DC Legal to rely on a breach of Mr Joukhador’s promise to make the payment specified in cl 3 of the Heads of Agreement.

Turning then to the payment obligation, there is no dispute that the profit costs for the Baldock proceedings was $2,382,000. The Defendants dispute the meaning of the term, but upon the proper construction as found above, they accept the number. From that starting point, the amount which Mr Joukhador promised to pay to DC Legal requires a deduction of “the amounts paid to Bookarelli Pty Limited…for their funding and other services”.
In its closing written submissions DC Legal submits that “the Defendant has not propounded any liability for any disbursements as part of its defence”. However, the Defendants correctly submit that DC Legal bears the onus of proving the amount of the deduction. The deduction will not just determine the quantum of any loss suffered by DC Legal but also the anterior question of whether there has been a breach of cl 3. DC Legal assets that there has been a breach, so it bears the onus of proving that allegation: Hobbs v Petersham Transport Co Pty Ltd (1971) 124 CLR 220; [1971] HCA 26 at 230 (Barwick CJ). In some circumstances a plaintiff may be assisted by reasonable inferences where a defendant’s breach has resulted in difficulties or impossibilities of proof of loss or damage. The rationale for the principle is that the plaintiff ought not to be deprived of a remedy through difficulties of proof resulting from the defendant’s wrongdoing: Cessnock City Council v 123 259 932 Pty Ltd (2024) 281 CLR 39; [2024] HCA 17 at [129]-[132] (Edelman, Steward, Gleeson and Beech-Jones JJ). However, the principle presupposes that the defendant is a wrongdoer which is not the case unless the plaintiff first proves that there has been a breach of contract.
Superficially, the result of these principles might be thought to be that DC Legal is required to prove the amounts of payments between the Defendants and Bookarelli for the specified purposes, even though the Defendants are in a better position to identify and access the evidence by which that might be done. A more detailed consideration reveals a different picture. A number of points warrant emphasis. First, Mr Dennis was not a stranger to the conduct of the Baldock proceedings which, for the largest and most significant part, were conducted together with the other three proceedings including with common counsel, a common expert witness, common costs consultants and, to an extent, Bookarelli acting in common to manage and fund the proceedings. Mr Dennis had his own knowledge with which to inform the marshalling of evidence and proof of permissible deductions from the profit costs, if necessary by using the compulsory processes of the Court to gather evidence. Secondly, there is nothing to suggest that Mr Joukhador was in a materially superior position to Mr Dennis to address the issue of Bookarelli’s disbursements. It is true that Mr Joukhador played a role in preparing the bills of costs and he was the solicitor acting for the plaintiffs when the settlement was achieved with the HIH liquidators but he did not act as the solicitor for the Baldock proceedings before the conclusion of the final hearing and much of the costing work was undertaken by others at Mr Kurland’s house. Mr Kurland may have been in a superior position to demonstrate the funding and other services provided by Bookarelli but it has not been shown that Mr Joukhador was. Thirdly, extensive costs documentation was generated as part of the settlement with the HIH liquidators which was readily available for the purpose of demonstrating disbursements and to some extent other services provided or not provided by Bookarelli. Bills of costs have been adduced into evidence for each of the four proceedings but no attempt has been made to analyse them in the light of the cl 3 payment obligation. Fourthly, on the third day of the hearing counsel for Bookarelli made an application to read an Affidavit by Mr Kurland. If the Affidavit was read then, Mr Kurland would have been available for cross-examination, but not otherwise. The Affidavit had not been served in accordance with prior directions of the Court and it may be accepted that his cross-examination may have required an adjournment. Nonetheless, DC Legal objected to Mr Kurland’s Affidavit being read. Ultimately the Affidavit was withdrawn and Mr Kurland never gave evidence. Fifthly, the material before the Court does not permit any inference to be drawn as to why DC Legal did not apparently grapple with the issue of Bookarelli’s disbursements before the hearing. It may have been because of a lack of means but it may also have been because the issue only assumed importance as a result of the pleading developments initiated by DC Legal at the commencement of the hearing. Sixthly, this is not a case where the plaintiff has merely failed to address the evidence about the precise quantum of loss caused by a breach which has been shown to be likely. The issue in this case is whether there has been a breach at all.
Apart from disputing the onus of proof, DC Legal’s submissions on breach of the cl 3 payment obligation are confined. It submits that the Defendants have not been shown to have had any liability for disbursements and they have in any event received the “costs” back from the costs payments received in the other three proceedings against the HIH liquidators. DC Legal ultimately submits that its entitlement under cl 3 was to 50% of $2,382,000 without any deductions. The resulting figure is $1,191,000 of which Mr Joukhador has only paid $500,000.
I do not accept these submissions. They do not pay sufficient attention to the text of cl 3 which requires the identification of payments made to Bookarelli for the specified purposes. Clause 3 is not expressed in terms of the liabilities of Mr Joukhador for disbursements or costs. Nor is the factual premise that the Defendants have received back their “costs” in the other three proceedings been made good on the evidence.
Nor is it correct to say that there is no evidence of any payments to Bookarelli for funding and other services in relation to the Baldock proceedings. The inference to be drawn from the evidence as a whole is that there have been some such payments. There is no dispute that on 13 July 2020 Mr Joukhador made a payment of $1,550,000 to Bookarelli. Other payments totalling $200,000 were made directly to individuals (not Mr Dennis, Mr Joukhador, Mr Madden or Mr Kurland) who had worked on the case, specifically the process of preparing the bills of costs for claiming costs from the HIH liquidators. These smaller payments may be viewed as payments made on behalf of Bookarelli. The payments to and on behalf of Bookarelli were made from the $3,250,000 received by Mr Joukhador for all four proceedings.
The inference to be drawn on the evidence is that the $1,550,000 payment to Bookarelli and the $200,000 payments to third parties were at least in part for Bookarelli’s funding and other services in relation to the Baldock proceedings. Significant disbursements were incurred in the conduct of the four proceedings, including fees for junior counsel (who was “heavily” involved), fees for the expert accounting witness and fees for the costs assessors who spent about a year preparing bills of costs for the purposes of negotiating with the HIH liquidators, and who subsequently conducted the negotiations. These expenses were borne by Bookarelli and were the subject of reimbursement from the $1,550,000 payment. DC Legal submits that all the disbursements were incurred in the other three proceedings, not the Baldock proceedings, but the submission is not supported by any identified evidence. The submission also suffers from an air of unreality. The plaintiffs had common counsel in all four cases and the same expert was retained in each. The costing work was done as part of a single strategy to recover costs in all four proceedings and Mr Dennis provided his files for that purpose. All costs and disbursements which were common to the four proceedings were itemised in the bill of costs for the Cuong Ly proceedings to which the bill of costs for the Baldock proceedings cross-referred. There were over 1,000 plaintiffs in the Baldock proceedings and less than 200 plaintiffs in the other three proceedings combined. Senior counsel had been instructed that the Baldock proceedings were the “lead proceedings”. The suggestion that essential and extensive services were provided without any costs attributed to the plaintiffs in the Baldock proceedings makes no sense.
These facts mean that DC Legal’s contention that it was entitled under cl 3 of the Heads of Agreement to half the $2,382,000 received for the costs of the Baldock proceedings has not been proved.
In oral closing submissions counsel for DC Legal put forward another calculation which took an entirely different approach. By reference to the bill of costs prepared for the Baldock proceedings, the submission was made that the costs itemised for the period before Mr Joukhador actually took over conduct of the Baldock proceedings should be tallied and from them deducted the disbursements itemised in the bill of costs. The resulting figure was said to be around $2,000,000. That figure was the “profit costs” which, pursuant to cl 3 of the Heads of Agreement was to be divided in half between DC Legal and Mr Joukhador.
This alternative approach does not accord with the text of cl 3. The costs listed in the bill of costs (approximately $4,800,000) were not “received” by Mr Joukhador. They were the basis upon which the $2,382,000 settlement was negotiated with the HIH liquidators. If the same methodology were to be applied to the $2,382,000 actually received by Mr Joukhador (i.e. half of a portion identified by reference to the period before Mr Joukhador took over the case) then the $500,000 payment to DC Legal may basically accord with cl 3.
DC Legal has not put forward a rational basis for the conclusion that the $500,000 paid by Mr Joukhador was less than that required by cl 3 of the Heads of Agreement.
The evidence includes about 1,000 pages of the billing documents prepared for negotiations with the HIH liquidators, which include the bill of costs for the Baldock proceedings and the bill of costs for the Cuong Ly proceedings which included the common costs and disbursements. There are some other documents relating to disbursements in evidence. Across the four proceedings, the costing documents itemise about $714,249 in disbursements, of which $618,298 is identified as common to all four proceedings and $95,960 specific to the Baldock proceedings. The billing documents are undated but they itemise costs and disbursements up to June 2018. There is evidence that further costs and disbursements were incurred after that date during the prolonged negotiation with the HIH liquidators, such as $30,514 for a costs assessor which Bookarelli paid subsequently. There is evidence that Bookarelli made earlier payments for costs in the Baldock proceedings which may have been the subject of reimbursement from its $1,550,000. Specifically in October 2017 Bookarelli paid $150,000 to DC Legal. In addition to funding disbursements, Bookarelli provided other services, including by Mr Kurland retaining and liaising directly with the expert accountant whose evidence was critical to the case. There is no evidence about the cost of these other services.
DC Legal draws attention to a one-page handwritten calculation apparently prepared by Mr Kurland at or shortly after Mr Joukhador made the payments on 13 July 2020. The calculation includes a line item of $850,000 which is labelled “Bookarelli disbursements”. Another $400,000 is shown as deducted for direct payments to the individuals who had worked on the case, including another $200,000 to Mr Giles who was the freelance costs consultant. The handwritten calculation does not provide an evidential basis for a finding about how much of the $1,550,000 payment to Bookarelli was for funding and other services in the Baldock proceedings. The basis upon which the figures were prepared by Mr Kurland is not known. There is no indication of the allocation of disbursements between the four cases. There is no suggestion that the figures take account of the $150,000 paid to DC Legal in October 2017. Even if the figures contain an admission as to the maximum amount of disbursements incurred by Bookarelli, it is not an admission by the Defendants.
Unassisted by submissions, it is not possible for the Court to work out how much of the $1,550,000 payment to Bookarelli was for funding and other services provided in the Baldock proceedings. Nor would it be fair to the Defendants for the Court to make that attempt. The Defendants are entitled to know how payments to Bookarelli are calculated so that they might give the calculation their consideration and make their own submissions.
It should also be observed that a breach of cl 3 cannot be assumed simply because Mr Joukhador received $1,000,000 on 13 July 2020 which was twice as much as DC Legal received. Clause 3 required the profit costs to be shared equally after the deduction of the relevant payments to Bookarelli, but only with respect to the Baldock proceedings. Mr Joukhador had acted for the plaintiffs in the Cuong Ly, Smith and De Bortoli proceedings in relation to which the HIH liquidators paid costs of $868,000. Some of Mr Joukhador’s $1,000,000 related to the other three cases. In addition, it may be inferred that some of Mr Joukhador’s $1,000,000 was not profit costs at all but reimbursement for his payment of senior counsel’s fees, variously estimated in the evidence as $185,000 or $200,000 when interest and enforcement costs are taken into account. There is no basis to conclude that the share of the profit costs for the Baldock proceedings which Mr Joukhador received under cl 3 of the Heads of Agreement was more than $500,000.
For their part, the Defendants appear to submit that the mere fact that they received a direction from Bookarelli to pay $1,550,000 is sufficient to demonstrate that there was a payment in that amount for funding and other services by Bookarelli. I do not accept that submissions for two reasons. First, the requirement in cl 3 that the payments be “for funding and other services” is to be determined objectively and not merely by what Bookarelli said at the time the payment was made. Bookarelli was not a party to the Heads of Agreement and not bound by its terms when directing the Defendants to make the payments. Secondly, there is no evidence about how the $1,550,000 payment was broken down amongst the four proceedings (if it was) so it is not possible to know how much of the payment was for the Baldock proceedings.
DC Legal has not proved the facts necessary for a finding that Mr Joukhador breached cl 3 of the Heads of Agreement when he paid $500,000 to DC Legal on 13 July 2020.

In view of the conclusion that there has been no breach of the Heads of Agreement, it is not necessary to consider the question of relief. For current purposes it is sufficient to say that, in the ordinary course, the remedy for breach of contract is damages. The usual measure of damages is that which is required to place the plaintiff in the position in which he or she would have been had the defendant performed the contract: Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54 at 80 (Mason CJ and Dawson J). Had Mr Joukhador performed the relevant obligation under the Heads of Agreement he would have paid DC Legal the amount calculated in accordance with cl 3. To recover substantial damages as opposed to nominal damages, DC Legal must prove the amount. It must do so on the balance of probabilities with as much precision as the subject matter reasonably permits: Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10 at [37] (Hayne J). For the reasons given above, it is not possible to make any finding about what the quantum of damages would have been had there been a breach of cl 3.
As noted above, the Amended Statement of Claim includes an account as a further prayer for relief. There are cases where the Court has ordered an account in the exercise of its equitable jurisdiction in aid of common law rights. There are a number of reasons why such an order will not be made in this case. First, DC Legal has not demonstrated that it has any common law rights to be aided because it has not proved that Mr Joukhador breached the Heads of Agreement. Secondly, DC Legal has not sought to demonstrate why this case is suitable for an order to account and it is not otherwise apparent. Thirdly, and following on from the second reason, it has not been demonstrated that damages would not have been an adequate remedy in this case had proof of breach and loss been demonstrated. Fourthly, it is unclear that there will be any utility in ordering the Defendants to account when Bookarelli is not a defendant to the Amended Statement of Claim.

In his Affidavit dated 25 October 2025 Mr Joukhador denies that he had the conversation described by Mr Dennis or any other discussion about a retainer. He says that he assumed control of the Baldock proceedings in early 2016 on instructions from Mr Kurland. He says that he regarded Mr Kurland and Bookarelli as his client. Mr Joukhador says that by becoming the solicitor for the plaintiffs he was taking control of the Baldock proceedings in accordance with the Heads of Agreement and the authorities from the plaintiffs which Bookarelli had started to gather from 10 November 2014 onwards. Mr Joukhador says that the timing for his filing the Notice of Change of Solicitor was the first listing of the case after Brereton J handed down judgment on 20 April 2016 thus making it necessary for an appearance to be made on behalf of the plaintiffs in the Baldock proceedings. Mr Joukhador says that his actions were unrelated to any interest of DC Legal.
In the face of Mr Joukhador’s denial DC Legal submits that there are objective circumstances which make it plausible that the conversation occurred as Mr Dennis says. Three circumstances are relied on for that submission, namely that Mr Dennis and Mr Joukhador met regularly, Mr Joukhador paid for them to go to Japan together and Mr Joukhador never said that he would not act for DC Legal.
Mr Dennis’s evidence at paragraph 50 of his Affidavit is an insufficient foundation to find that DC Legal retained Mr Joukhador to act as its solicitor for the task of recovering costs in the Baldock proceedings. When Mr Dennis swore his Affidavit, the conversation about which he gave evidence had occurred about eight years prior. He does not claim to remember the exact words uttered but only the effect of those words. It is nonetheless implausible that he had an actual recollection when he swore his Affidavit. The unreliability of Mr Dennis’s recollection of events is apparent from other parts of his Affidavit, such as paragraph 45 where he says that no lease was taken as contemplated by the Heads of Agreement and paragraph 48 where he says that he had a conversation in October 2015 about taking a lease of Ms Dennis’s premises, each of which are contrary to the undisputed contemporaneous documents. In paragraph 44 Mr Dennis says that he does not recall receiving a counterpart of the Heads of Agreement signed by Mr Joukhador, which I have found he did. There are other examples.
In any event, the objective facts are the best guide to determine whether DC Legal retained Mr Joukhador in July 2016 (or at any other time) and they are uniformly against that conclusion. No documents have been adduced into evidence which demonstrate the retainer in circumstances where documentation would ordinarily exist, such as a costs agreement and billing records within Mr Joukhador’s firm. On the other hand, DC Legal does not suggest that Mr Joukhador would be paid a fee for the work done on the retainer which would have been uncommercial and is inexplicable. Mr Dennis places the key conversation in July 2016 but there is documentary evidence that by that time Mr Joukhador had already taken over the conduct of the Baldock proceedings, which is inconsistent with Mr Joukhador acting for the plaintiffs simply to perform the alleged retainer obligations to DC Legal. As explained above, there may have been potential for a conflict were Mr Joukhador to accept a retainer from DC Legal to recover costs from the plaintiffs. Even more so, Mr Joukhador undoubtedly considered that Bookarelli was his client. Whether that was legally correct or not, there was every chance that a conflict would arise between DC Legal and Bookarelli as in fact happened. The matters said to be supportive of a retainer relied upon by DC Legal are immaterial and, in any event, equivocal.
DC Legal also refers in its closing submissions to some text messages, but the probative value of the text messages is doubtful. As I understand the submission, in 2020 Mr Dennis and Mr Joukhador, and also Mr Kurland, exchanged some text messages about sharing the money received from the HIH liquidators. DC Legal submits the texts were inconsistent with the continued application of the Heads of Agreement. It is true that the texts do not refer to the Heads of Agreement but they are not inconsistent with it. They generally address attempts to arrange meetings to discuss the division of the money received from the HIH liquidators, disputes about disbursements already paid and wider commercial interests of the parties. If the texts have probative value they are a double-edged sword for DC Legal because they do not refer to the alleged retainer which DC Legal now alleges was in place.
More broadly, an important surrounding circumstance in July 2016 is that Mr Dennis and Mr Joukhador had already addressed DC Legal’s interest in receiving a payment of costs in the Baldock proceedings. They did so in May 2014 when they decided to enter the Heads of Agreement. As explained above, the Heads of Agreement provided for a simple contractual obligation for Mr Joukhador to pay a certain amount of money. Mr Joukhador’s half share of the profit costs under cl 3 explains why he would undertake a role in the costs recovery without payment of a fee from DC Legal. In light of the Heads of Agreement there was no occasion for DC Legal to retain Mr Joukhador to act as its solicitor.
DC Legal submits that its retainer of Mr Joukhador was intended to supersede the Heads of Agreement. In addition to the implausibility of the alleged conversation occurring, it is not possible to reconcile that contention with the effect of the words which Mr Dennis has set out in paragraph 50 of his Affidavit. The conversation which he describes was premised on there being no extant arrangement for the pursuit of costs. Nothing was said about replacing the Heads of Agreement.
There can be no doubt that first Mr Joukhador and then Harrow Legal worked on the recovery of costs from the HIH liquidators. Their work included tasks which the solicitor representing the plaintiffs would be expected to perform such as liaising with the solicitors for the HIH liquidators and liaising with costs assessors. In that sense it is correct to say that Mr Joukhador and Harrow Legal were “responsible” for recovery of the costs. It is also correct to say that recovery of the costs would be for the benefit of DC Legal in the sense that the recovery would trigger Mr Joukhador’s obligation to pay the amount specified in cl 3 of the Heads of Agreement. Because DC Legal would benefit, it is also correct to say that it was “relying” on the Defendants. Mr Joukhador accepted as much in his evidence. It does not follow from those facts that Mr Joukhador and Harrow Legal had been retained by DC Legal to act as their solicitor on the recovery.
As the party contending for the retainer, DC Legal bears the onus of proof. It has not proved on the balance of probabilities that it retained Mr Joukhador.

The particulars of the alleged retainer are a conversation in October 2017 and the written agreement signed on 6 November between Mr Dennis, Mr Joukhador, Mr Madden and Maddens Lawyers. Mr Dennis gives evidence about the October conversation in his Affidavit. Assuming in DC Legal’s favour the correctness of that evidence, nothing was said which was capable of constituting a retainer of Harrow Legal by DC Legal. The topic discussed was an arrangement by which the valuable practice of Thomas Booler might be preserved whilst Mr Joukhador was without a practising certificate. Mr Dennis told Mr Madden why he had an interest in helping Mr Joukhador, which he described as “to recover costs owed to me and DC Legal”. Nothing else was said about recovery of the costs. The written agreement dated 6 November 2017 does not take the argument any further.
In any event, DC Legal has not proved on the balance of probabilities that the conversation occurred in October 2017 as claimed. The only evidence of the conversation is paragraph 57 of Mr Dennis’s Affidavit dated 18 March 2024. Mr Dennis says that the conversation occurred at a meeting between him, Mr Madden and Mr Joukhador on 17 October 2017. Mr Joukhador denies the conversation and says that the first time he met Mr Madden was on 6 November 2017 when the three men assembled to sign the written agreement. Mr Joukhador’s evidence has the ring of truth and is to be preferred. There is no documentary evidence which supports the October meeting, not even a diary entry from any of the people said to have attended the meeting at the Tattersalls Club on Pitt Street.
In this regard, the Defendants correctly make the submission that DC Legal’s failure to call Mr Madden to give evidence about the alleged conversation gives rise to an inference that his evidence would not have assisted DC Legal’s case about the conversation: Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8. Again, in the circumstances described above no explanation has been given for the failure to call Mr Madden and read his Affidavit.
The Defendants submit that a further reason why the alleged retainer ought to be rejected is that the retainer of Harrow Legal is not being promoted by DC Legal and makes no sense independently of the contention that DC Legal had previously retained Mr Joukhador. In light of my finding that DC Legal did not retain Mr Joukhador, the Defendants’ submission has merit. The occasion not having arisen for DC Legal to retain Mr Joukhador to act as its solicitor, there would be no apparent reason why Mr Dennis would consider it necessary to retain Harrow Legal in 2017.
Further, the same objective circumstances which tell against the alleged retainer of Mr Joukhador also tell no less against a retainer of Harrow Legal, including the prospect of a conflict between DC Legal and the plaintiffs in the Baldock proceedings and a conflict between DC Legal and Bookarelli in circumstances where Bookarelli was authorised to instruct Thomas Booler on behalf of the plaintiffs. Even though Mr Madden was an old friend of Mr Dennis, it is implausible that he would have been prepared to place himself in a position where he might have to dispute instructions given by Bookarelli. Again, there is no documentary evidence of the retainer and, even on Mr Dennis’s version of events, there is no suggestion that DC Legal would pay a fee for the services of Harrow Legal.
There is documentary evidence that DC Legal (and possibly Mr Dennis personally) retained Harrow Legal in the second half of 2019 for two isolated matters. First, on 5 July 2019 Harrow Legal sent a letter to the solicitors for the HIH liquidators in which DC Legal’s (and Mr Dennis’s) lien was asserted over dividends to be paid to deregistered companies. Follow up letters were sent when there was no reply. This was a task different to the retainer alleged in these proceedings because it did not concern the clients in favour of whom costs would be settled by the payment of $2,382,000. The demand in July 2019 concerned corporate clients which had been deregistered. The dividends to be paid by the HIH liquidators would be paid to ASIC. Harrow Legal did not have a conflict in acting for DC Legal on that limited claim. Secondly, Harrow Legal acted for DC Legal when separate proceedings were commenced against ASIC and 665 former clients who had not participated in the Baldock proceedings. By those proceedings DC Legal asserted rights directly against the former clients. That action was also separate to the enforcement of costs orders in favour of clients who did participate in the Baldock proceedings. Neither of these matters are relevant to the question whether DC Legal retained Harrow Legal to act as its solicitor on the recovery of costs from the HIH liquidators.
DC Legal has not proved on the balance of probabilities that it retained Harrow Legal to act as its solicitor.

Consideration of the asserted lien requires first an understanding of DC Legal’s entitlement to be paid costs on 28 April 2017 when Brereton J made the costs order against the HIH liquidators in the Baldock proceedings.
By April 2017 the remaining plaintiffs in the Baldock proceedings were by definition the former clients of DC Legal who had entered into the new retainer agreements in late 2013 or early 2014. The new retainer agreement imposed an obligation on the client to pay professional costs to DC Legal, which obligation was conditional upon the case being successful. By April 2017 the condition had been fulfilled. The amount of the costs to be paid by the clients is unclear because two different bases for charging were specified in the new retainer agreement. The first was a “fixed fee” in a specified amount. The second was an hourly rate. As a matter of construction, the second basis better records the objective intention of the parties because the hourly rates were specified, the individual solicitors who would attract those rates were identified by name, an estimate of professional fees was given in excess of the specified fixed fee and the estimated costs recovery from the HIH liquidators was specified in an amount in excess of the specified fixed fee. None of those provisions would have made sense if the fixed fee was intended to apply.
The new retainer agreements further imposed an obligation on the client to pay internal disbursements (such as photocopying) and external disbursements (such as barristers fees). It is unclear if the client’s liability for disbursements was contingent because no such statement was made in the body of the costs agreement, although cl 1 of the general term provided that the “billing arrangement” would be “contingent” without differentiating between billing for professional costs and billing for disbursements. Ultimately it does not matter because the Baldock proceedings were successful.
Clause 7(f) of the general terms of the new retainer agreement reserved to DC Legal the right to terminate the retainer if, in its sole discretion, it considered that it was no longer appropriate to act for the client. If that happened then the client was liable to pay “our costs incurred” up to the date of termination. At some point DC Legal exercised the termination right, although there may be a dispute about when it did so. One possibility is on 10 November 2014 when DC Legal sent the letter by which it informed the clients that it was winding down and recommended that Thomas Booler be retained in its stead. Other possibilities are April 2016 when Mr Dennis stopped working on the Baldock proceedings and October 2016 when Mr Joukhador filed the Notice of Change of Solicitor. Whenever it happened, under the new retainer agreement DC Legal was entitled to have the client pay the costs incurred to that date, which entitlement would have become unconditional once the Baldock proceedings succeeded.
The Defendants submit, however, that any entitlement against the clients, including the entitlement under cl 7(f), came to an end on or shortly after 10 November 2014 because DC Legal’s letter in fact operated to discharge any such liability. In the first instance the submission raises a question of construction of the letter. The full text is set out above. The key passage is:

One reading of the letter is that the client’s liability to DC Legal for legal costs would subsist but Bookarelli would discharge that liability on behalf of the client. Whilst that reading is arguable and may be supported by the words “will assist you”, I accept the Defendants’ submission that the correct construction of the letter is that the client’s liability for costs would cease altogether and be replaced by a new liability owed by Bookarelli directly to DC Legal. That construction follows from the text, context and purpose of the letter and its attachments. The text “not to be liable” more naturally means that the client would subsequently have no liability, rather than the client would have a continuing liability which a third party would promise to meet. The Defendants’ construction is supported by the context of the attached documents which may be taken into account when construing the letter (Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 at [46]). The attached letter from Bookarelli stated that “we shall bear all the costs of proving and prosecuting your claims”. The reference to “the” costs contrasts with the client specific reference to “your” claims which indicates the intention that the costs would cease to be the client’s costs. The purpose of DC Legal’s letter was to represent an arrangement by which the client could avoid a future liability for costs by accepting the offer from Bookarelli. That purpose would not have been served if a client who accepted the offer by Bookarelli would still be at risk of having to pay costs to DC Legal if, for example, Bookarelli failed to pay.
Acceptance of the recommendation to enter into the new agreement with Bookarelli operated to affect the contractual relationship between each of the relevant clients and DC Legal. It was an unusual situation. The client and DC Legal were already parties to the new retainer agreement. DC Legal’s letter proposed an arrangement which addressed the same subject matter. The client could accept the new arrangement but was not obliged to accept. Acceptance would not be by a reply to DC Legal but by entering into the new agreement with Bookarelli. If the client did so, his or her existing contractual relationship with DC Legal would be modified in accordance with the principles in Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256. The modification operated so that thereafter the clients ceased to be liable to any costs to DC Legal.

The word “Beneficiary” was defined in cl 3(b) of the Deed Poll to mean the HIH liquidators and the HIH companies. The plaintiffs in the Baldock proceedings were not Beneficiaries and neither were Mr Joukhador, Harrow Legal or Bookarelli.
The making of the Deed Poll would not prevent DC Legal from asserting an equitable lien in these proceedings had it otherwise been entitled to do so. There are two reasons why. First, as a matter of construction the lien which was waived and released was that which existed over funds comprised of the funds held in the estate of the HIH companies from which the settlement sum would be paid. The description of the property seems deliberately limited to the funds as they would be identified in the hands of the HIH liquidators. The waiver and release did not in their terms apply to a lien over the funds once they had been paid into the trust accounts of Thomas Booler. Secondly, the Deed Poll was a deed poll which meant that DC Legal intended to use it to make unilateral promises to, or create rights enforceable by, persons who were not party to the Deed Poll: Cong v Shen (No.3) [2021] NSWSC 947 at [1291] (Ward CJ in Eq). The concluding words identify who those persons were. They were the HIH liquidators and the HIH companies. The Defendants were not. DC Legal did not make the Deed Poll in the Defendants’ favour and it did not, objectively viewed, intend that the Defendants could rely on it.
Although not specifically relied upon by the Defendants, something needs to be said about the similar documents which DC Legal executed prior to 29 June 2020. On 18 December 2019 and 12 March 2020 DC Legal executed the documents referred to above. The document dated 18 December 2019 was not a deed poll but a form of notice addressed the HIH liquidators. The waiver and release described in that document was a part of providing consent to the HIH liquidators to pay money. The document dated 12 March 2020 was essentially the same except that it was not expressly addressed to the HIH liquidators. It was however provided to them in response to a request. Without more, it is doubtful that either of these documents would have precluded DC Legal from subsequently asserting an equitable lien against the Defendants.

Even though DC Legal did not waive or release any equitable lien over the funds received by Thomas Booler, there is a more fundamental reason why it is not entitled to relief to enforce a lien against the Defendants. Equity will impose the lien once the order for costs is made whether or not the judgment debtor has been notified of the asserted lien. However, relief will not be granted to enforce the lien unless notice has first been given to the person against whom the relief is to be enforced. Specifically, had the lien existed in this case the appropriate relief would have been an order for equitable compensation because Mr Joukhador has already paid away the $2,382,000. No such relief will be granted unless Mr Joukhador had notice of DC Legal’s lien when the money was paid away: Firth v Centrelink at [54] and [69].
DC Legal does not plead that Mr Joukhador was given notice of the asserted lien. In paragraph 65 of the Amended Statement of Claim it is alleged that DC Legal “has asserted” the lien but there is no reference to Mr Joukhador and the particulars suggest that the allegation is intended to be a statement of the claim in these proceedings rather than an allegation of notice previously given.
Nor does DC Legal make any submissions about notice being given to Mr Joukhador apart from the bald assertion that he “was aware”. There is no evidence which would support a finding of that necessary fact. In paragraph 105 of Mr Dennis’s Affidavit dated 18 March 2024 Mr Dennis asserts in inadmissible terms that “Marcel Joukhador was aware of the lien” but that is not probative evidence on the question whether Mr Joukhador actually knew that DC Legal asserted a lien over the $2,382,000 received from the HIH liquidators.
This is not a technical pleading point but a matter of substance. DC Legal seeks equitable relief against Mr Joukhador. Unless Mr Joukhador was given notice of the lien there has not been a wrong by him which warrants equitable relief: Firth v Centrelink at [65].
It is in this context that the Deed Poll and the documents executed by DC Legal on 18 December 2019 and 12 March 2020 assume some significance. They are relevant to the factual question whether Mr Joukhador had notice that DC Legal asserted a lien after, say, 29 June 2020 when the Deed Poll was made. Each document contained a statement by DC Legal that the lien was waived and released. As a matter of construction the release and waiver were limited as set out above. However, Mr Joukhador was aware of each of the documents because they passed through his hands on the way to the solicitors acting for the HIH liquidators, on each occasion accompanied by Mr Joukhador’s own document in similar terms. Within that factual matrix, it cannot be assumed that Mr Joukhador was on notice as at 13 July 2020 that DC Legal continued to assert a lien over the money received from the HIH liquidators. It is necessary for DC Legal to plead, or at least submit, that Mr Joukhador was on notice at that time. It has not done so which is a further reason to reject its claim for relief to enforce an equitable lien.

Amongst the paragraphs of the Amended Statement of Claim are a number of allegations directed to the contention that Mr Joukhador paid away the money on 13 July 2020 in breach of trust or in breach of a fiduciary obligation.
Taking the trust first, paragraph 40A(iii) contains the allegation that it was a term of the Heads of Agreement that Mr Joukhador would hold money received in respect of DC Legal’s professional costs in trust until accounts between DC Legal, Mr Joukhador and Bookarelli were settled. This is an allegation of an express trust. It is further alleged in paragraph 75 that the monies received by Mr Joukhador were trust monies and held for the benefit of DC Legal. No particulars of the allegation are given. Apart from the express terms of the Heads of Agreement, no material facts are alleged from which the conclusion in paragraph 75 might follow.
As for the fiduciary obligation, it is alleged in paragraph 52 of the Amended Statement of Claim that the Defendants owed DC Legal a fiduciary duty. The content of the fiduciary duty is alleged in paragraph 53 and relevantly includes the obligation to preserve the benefit of the monies recovered from the HIH liquidators. The basis for those allegations may be discerned from the cross references and the particulars in paragraph 52. Specifically, reliance is placed upon the Heads of Agreement, the retainers of each of Mr Joukhador and Harrow Legal, the Defendants’ knowledge that DC Legal was entitled to be remunerated for its professional costs and was in a position of vulnerability for the recovery of those costs because of its inability to act for or recover the monies itself, and that the Defendants had control over the recovery of the costs. In its closing submissions, DC Legal also referred to an “undertaking” by the Defendants to recover the costs of DC Legal.
DC Legal cites Pilmer v The Duke Group Limited (in liq*)* (2001) 207 CLR 165; [2001] HCA 31 (McHugh, Gummow, Kirby, Hayne and Callinan JJ) for the proposition that non-exclusive common features of a fiduciary relationship include an undertaking by one party to perform a task or fulfil a duty in the interests of another party, the scope for one party unilaterally to exercise a discretion or power which may affect the rights or interests of another and dependency or vulnerability which causes one party to rely on another.

For the reasons given above there was no solicitor/client relationship between either Mr Joukhador or Harrow Legal and DC Legal. Nor has DC Legal proved that there was any other undertaking given by either of the Defendants to recover the costs of DC Legal. The evidence relied upon from Mr Joukhador’s cross-examination to prove the undertaking was no more than Mr Joukhador’s description of his role as the solicitor representing the plaintiffs in whose favour the costs orders had been made.
Absent a recognised fiduciary relationship of trustee/beneficiary or solicitor/client, the Defendants did not owe DC Legal any fiduciary duties unless the particular relationship between them was one of absolute and disinterested loyalty within the scope of the Defendants being recognised in equity as having responsibility to act in the interests of DC Legal to the exclusion of the interests of the Defendants: Naaman v Jaken Properties at [31]. The matters relied upon by DC Legal are not sufficient to find that its relationship with the Defendants had the requisite attributes. The Heads of Agreement did not bespeak a responsibility on the part of Mr Joukhador to act in the interests of DC Legal once monies were recovered from the HIH liquidators because Mr Joukhador promised to pay a sum of money irrespective of what happened to the monies once they were recovered. It may be accepted for current purposes that the Defendants knew that DC Legal was entitled to be remunerated for its professional costs. It may also be accepted that DC Legal was not itself able to recover those costs because it no longer represented the plaintiffs to whom the HIH liquidators had been ordered to pay costs. It does not follow that DC Legal was vulnerable. It had bargained for and obtained a contractual promise from Mr Joukhador to pay a sum of money in circumstances where Mr Joukhador had his own interest in maximising the recovery of costs from the HIH liquidators. By that contractual protection DC Legal had been able to manage the risk that there would be no recovery, on terms no doubt acceptable to it. The ability to manage risk in that way is the antithesis of vulnerability: Mallonland Pty Ltd v Advanta Seeds Pty Ltd [2024] HCA 25 at [39] (Gageler CJ, Gordon, Steward, Gleeson, Jagot and Beech-Jones JJ).
A fiduciary relationship should not lightly be imposed upon commercial parties who stand at arm’s length in respect of interests which are protected by the common law, including the law of contract: Naaman v Jaken Properties at [33]. That is especially so where the parties are party to a contract which does not expressly or by implication impose fiduciary duties: John Alexander’s Tennis Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19 at [92] (French CJ, Gummow, Hayne, Heydon and Kiefel JJ). There is no occasion to impose fiduciary obligations on the Defendants in this case.
That conclusion accords with the statement of Leeming JA in Naaman v Jaken Properties at [38] that a client which holds property over which a solicitor has an equitable lien for payment of costs does not owe fiduciary obligations to the solicitor. DC Legal did not have an equitable lien and therefore did not have that interest in the monies which Harrow Legal received from the HIH liquidators. There is even less call for the imposition of fiduciary obligations in this case.

A further claim which DC Legal makes in the Amended Statement of Claim is that DC Legal and the Defendants had a shared assumption “that DC Legal would be paid for the cost of providing services from any money recovered on behalf of” the plaintiffs in the Baldock proceedings and that “the monies received would be paid out at the direction of DC Legal and would not be disbursed without its consent”. It is alleged that the Defendants induced DC Legal to adopt the shared assumption. In reliance upon the shared assumption, it is alleged that DC Legal executed the Deed Poll which enabled the settlement to proceed and has thereby suffered detriment. It is alleged that the Defendants are estopped from denying the shared assumption that they are liable to account to DC Legal.
DC Legal’s closing submissions dated 4 June 2025 do not address this claim, although there is a reference to DC Legal not releasing its lien had it not been for the “obvious” assumption shared by the parties. DC Legal has not identified the type of estoppel said to apply and the Court has not been referred to any authorities which shed light. The language of shared assumption is suggestive of a conventional estoppel. A conventional estoppel may arise where an assumption about a state of affairs has formed the conventional basis upon which the parties have entered into contractual or other mutual relations: Thompson v Palmer (1933) 49 CLR 507; [1933] HCA 61 at 547 (Dixon J).
The pleaded formulation of the assumption which it is said that the parties shared (that DC Legal would be paid for the cost of providing services from any money recovered on behalf of the plaintiffs in the Baldock proceedings) lacks precision as to the costs to be paid, the money to be recovered and the relationship between those two matters (“from”). Whatever assumption Mr Dennis may have had, DC Legal has not sought to demonstrate by the evidence that Mr Joukhador had the same assumption. The best evidential guide is the contemporaneous documents, which include the Heads of Agreement. DC Legal has not proved that Mr Joukhador had an assumption different to the terms of that document, or indeed that that assumption was different to the pleaded assumption.
A further fatal defect in this claim is that it has not been shown that DC Legal suffered detriment by proceeding on the shared assumption, which is required for these to be a conventional estoppel: Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603; [2007] NSWCA 65 at [198]-[201] (Tobias JA, Mason P and Campbell JA agreeing). DC Legal relies upon its execution of the Deed Poll. Had that not happened, Mr Joukhador would not have received the profit costs which enlivened DC Legal’s entitlement to receive the amount of money required by cl 3 of the Heads of Agreement. DC Legal would not have received $500,000. Proof of detriment would therefore require a comparison between DC Legal’s present position with the position which DC Legal would have been in had it refused to permit the settlement with the HIH liquidators to proceed. It has not been proved that the outcome of that comparison would demonstrate detriment to DC Legal.
DC Legal’s reliance on an estoppel does not advance its case on the other causes of action.

Absent a retainer, the question whether the Defendants owed a duty of care is to be determined in accordance with general principles. The alleged duty is a duty to protect DC Legal from pure economic loss. Such a duty is not owed unless a judicial evaluation of the salient features of the case warrants the conclusion that the duty was owed: Mallonland at [36]-[37]. The two features identified by DC Legal, vulnerability and known reliance, have been held to be features which in particular cases have been supportive of a finding that a duty of care was owed. However, there was no relevant vulnerability in DC Legal’s case because it was able to and did protect itself with a direct contractual relationship with Mr Joukhador. In the light of DC Legal’s contractual entitlements under the Heads of Agreement, Mr Joukhador’s knowledge that he was being relied upon to recover costs from the HIH liquidators as the solicitor representing the plaintiffs in the Baldock proceedings was not such as to give rise to a duty of care. That is especially so in circumstances where the alleged breach of the duty relates not to recovery from the HIH liquidators but to the subsequent payment away. Given the contractual protection of the Heads of Agreement, it cannot be said that Mr Joukhador knew that DC Legal was relying on him to retain the money received from the HIH liquidators.
The Defendants submit that a further reason why they did not owe DC Legal a duty of care was that any such duty would have conflicted with the duty which they owed their clients, relevantly the plaintiffs in the Baldock proceedings. That is especially so when Bookarelli had retained the Defendants to act for the plaintiffs and Bookarelli had interests which conflicted with DC Legal’s interests. The Defendants rely on Badenach v Calvert at [20] (French CJ, Kiefel and Keane JJ) for the proposition that a solicitor generally owes a duty of care only to his or her client. Whilst in rare cases a solicitor may also owe a duty to a third party, it will only be where it does not compromise the duty owed to the client. I accept that submission.
The Defendants did not owe the alleged duty of care to DC Legal.

DC Legal Pty Limited v Joukhador

At a glance

Court

Decision date

Before

Catchwords

Catchwords

Judgment

Source

JUDGMENT

Introduction

Credit

Facts

Parties

Mr Dennis and DC Legal Pty Ltd

Mr Madden and Maddens Lawyers

Mr Joukhador and Thomas Booler

Harrow Legal

Mr Kurland and Bookarelli

Commencement of proceedings against the HIH liquidators

Heads of Agreement with Mr Joukhador

Continuation of the Baldock proceedings

Bookarelli’s role in the Baldock proceedings

Subsequent events

Mr Madden becomes involved in the Baldock proceedings

Other claims by Mr Dennis and DC Legal

Final costs settlement with the HIH liquidators in the Baldock proceedings

Documentation of the settlement with HIH

After the money was received

ISSUES IN THE CASE

DETERMINATION

Agreement in May 2014

Issues arising from the Heads of Agreement

DC Legal and Mr Joukhador entered into an agreement on 26 May 2014

Express terms of the agreement

Implied terms of the agreement

Summary of terms

The Heads of Agreement was not so uncertain as to be unenforceable

The Heads of Agreement was not subject to any unfulfilled conditions

The agreement was not subsequently abandoned

There was no total failure of consideration relevant to the Heads of Agreement

The Heads of Agreement was not superseded by another agreement in 2020

Summary in relation to the Heads of Agreement dated 26 May 2014

It is open on the pleading for DC Legal to allege a breach of the Heads of Agreement

Mr Joukhador did not breach cl 3 of the Heads of Agreement

Relief

DC Legal’s other causes of action

Retainer of Mr Joukhador to act for DC Legal

DC Legal’s case

DC Legal did not retain Mr Joukhador to act as its solicitor

Retainer of Harrow Legal to act for DC Legal

DC Legal’s case

DC Legal did not retain Harrow Legal to act as its solicitor

Equitable lien

DC Legal’s case

The clients were not liable to pay DC Legal’s costs after 10 November 2014

DC Legal had no lien over the payments by the HIH liquidators for costs

DC Legal did not waive or release the equitable lien

No relief because no notice of the lien

Priorities

Summary of the claim to enforce an equitable lien

Trust or other fiduciary obligation

DC Legal’s case

Money recovered from the HIH liquidators was not held on trust for DC Legal

The Defendants did not owe DC Legal any fiduciary duties

Summary of trust and fiduciary obligations.

Estoppel

Duty of care

DC Legal’s claim

The Defendants did not owe a duty of care

Proportionate liability defence

Professional standards limitation

CROSS-CLAIM

ORDERS

Amendments

30 July 2026

Parties

Legislation Cited (9)

Cases Cited (62)