Kenna v Lloyd

Supreme Court of NSW|2021-03-25|Before: Hamill J

Judgment

By summons filed 17 November 2020, the plaintiff seeks to appeal from a decision of Magistrate Kennedy in the Local Court of NSW. The decision was to enter summary judgment in favour of the defendant on 5 November 2020. To avoid confusion, I will refer to the plaintiff in this Court (the defendant in the Local Court) as Mr Kenna and the defendant in this Court (the plaintiff in Local Court) as Mr Lloyd.
Mr Kenna, through a law firm called Hamish Cumming Family Lawyers, engaged Mr Lloyd, a barrister, to appear on his behalf in proceedings in the Family Court of Australia. Mr Lloyd practices under the name "John Lloyd SC" although his given name and the name which appears on his practicing certificate is "David John Lloyd SC". Mr Lloyd issued a costs agreement and disclosure in the amount of $72,000 (excluding GST) to Mr Kenna. This was based on a five-day hearing and three days preparation. Mr Kenna signed the agreement on 16 September 2019. On 18 October 2019, Mr Lloyd issued a memorandum of fees in the amount of $79,200 (including GST). This was based on four days preparation and four days hearing.
The fees were not paid and Mr Lloyd sued Mr Kenna in the Local Court. The action was commenced on 17 June 2020.
On 30 September 2020, Mr Lloyd filed a notice of motion in the Local Court seeking summary judgment pursuant to r 13.1 of the Uniform Civil Procedure Rules 2005 (NSW). On 5 November 2020, after receiving written and oral submissions, the Magistrate delivered an ex tempore judgment. Summary judgment in the amount of $84,526.18 (plus interest and costs) was entered in favour of Mr Lloyd. The total amount awarded was $92,626.30.

The nature of the appeal and whether leave should be granted

An appeal to this Court from a judgment or order of the Local Court sitting in its General Division must be based on "a question of law" unless leave is granted to appeal on a "a question of mixed fact and law": Local Court Act 2007 (NSW), ss 39 and 40. No appeal lies on a question of fact alone. Mr Kenna's grounds and submissions in this Court raised questions of law and mixed fact and law. However, Mr Lloyd did not oppose leave being granted. In circumstances where Mr Kenna is self-represented and Mr Lloyd makes that concession, it is appropriate that leave be granted where necessary to argue the appeal.
It is appropriate to consider the substance and merit of Mr Kenna's arguments by first reviewing the law relating to summary judgments and the Magistrate's decision.

The law relating to summary judgments and the decision below

The application before Magistrate Kennedy in the Local Court was for summary judgment pursuant to r 13.1 of the Uniform Civil Procedure Rules 2005 (NSW). That section provides: (1) If, on application by the plaintiff in relation to the plaintiff's claim for relief or any part of the plaintiff's claim for relief - (a) there is evidence of the facts on which the claim or part of the claim is based, and (b) there is evidence, given by the plaintiff or by some responsible person, that, in the belief of the person giving the evidence, the defendant has no defence to the claim or part of the claim, or no defence except as to the amount of any damages claimed, the court may give such judgment for the plaintiff, or make such order on the claim or that part of the claim, as the case requires. (2) Without limiting subrule (1), the court may give judgment for the plaintiff for damages to be assessed. (3) In this rule, a reference to damages includes a reference to the value of goods.
The question for Magistrate Kennedy was whether Mr Kenna had "no defence" in respect of Mr Lloyd's claim, or any part of the claim. The test for summary judgment has been described in various ways and her Honour referred to some of the relevant authorities: "I was also taken to the authority in relation to summary judgment and I was taken to O'Brien v Bank of Western Australia [2013] NSWCA 71 citing Spencer v The Commonwealth of Australia [2010] HCA 28 that "(a) on a summary judgment application the real issue is whether there is an underlying cause of action or defence not simply whether one is pleaded", and I can indicate here the pleadings for the defendant are very brief and do not raise these matters that have been raised today before me, however, I am guided by the fact that it is not simply whether there is one, what is in the defence, what is being raised is a bit outside the defence but I take that into account, and[:] (b) The critical question can be expressed as whether there is more than a fanciful prospect of success or whether the outcome is so certain that it would be an abuse of the process of the Court to allow the action to go forward. Demonstration of the outcome of the litigation is required, not an assessment of the prospect of its success, and (c) Powers to summarily terminate proceedings must be exercised with exceptional caution. So, I have regard to those matters and, equally, in General Steel Industries [Inc v Commissioner for Railways (1964) 112 CLR 125] it has been expressed as so obviously untenable that it cannot possibly succeed and manifestly groundless." [1]
The Magistrate considered the arguments of both parties. Her Honour did not accept Mr Kenna's argument that Mr Lloyd changed the name he practices under after the "unfavourable" Justinian article was published to hide his true identity and avoid being connected to the negative press. That was, at least in part, because her Honour was provided with evidence that whether you search for "David John Lloyd SC" or "John Lloyd SC", the same article comes up in the search results. Further, her Honour found that Mr Lloyd had practiced using only his middle name for many years prior to the article's publication.
In determining whether the costs agreement between Mr Kenna and Mr Lloyd was valid, her Honour referred to authorities supporting the proposition that a contract will be valid so long as the parties to the contract can be readily identified, notwithstanding the fact that they do not use their legal name. [2] That proposition dates back to Lord Blackburn's comments in Rossiter v Miller. [3] Her Honour found that Mr Kenna was under no misapprehension in who he was dealing with, there being only one "John Lloyd SC" at Chalfont Chambers.
Magistrate Kennedy concluded that she was: "[…] satisfied that in effect it certainly seems to be a technical argument that seeks to defeat the agreement that was made with this individual. There is no substance in the defence in my view." [4]
Her Honour's ultimate finding was that Mr Kenna's defence was "so untenable that it could not possibly succeed on the basis of this defence and that it is no more than a fanciful prospect of success". [5]

Mr Kenna's written submissions in this Court

The written submissions filed in support of the appeal were as follows: "1. I am self-represented. 2. I respectfully submit the learned magistrate erred in accepting that the defendant in these proceedings had made his true identity readily identifiable to perspective clients to the standard that is required of a Legal Practitioner. 3. I respectfully submit Mr David John Lloyd did not provide any change of name document in the proceedings in the Local Court from Births Deaths and Marriages of NSW that he had changed his name to Mr John Lloyd SC nor did he provide it to NSW Bar Association in order for them to issue a Practicing Certificate in the name of Mr John Lloyd SC. 4. I respectfully submit I have never engaged the services of Mr David John Lloyd but engaged the services of Mr John Lloyd SC. For the purpose of Section 175 (2) of the LPUL the defendant cannot be considered a "second law practice" as the defendant has never been engaged by myself and does not have an executed contract or cost agreement between Mr David John Lloyd and myself. 5. I respectfully submit the learned Magistrate erred by considering the defendant was a Second legal practice and did not properly disclose in accordance with law governing Legal Practitioner (Legal Practitioners law). If that was so Mr David John Lloyd, as a second law practice, is required to take legal action to recover his fees from his instructing Solicitor, that being Hamish Cumming Lawyers being the first legal practice. 6. I respectfully submit in the case law relied upon by Mr David John Lloyd before the magistrate that not one of the cases to which he refers in his submissions had circumstances whereby a Legal Practitioner entered into a contract in a name that did not appear their practicing certificate. Legal practitioners are held to a greater standard than a normal individual in all instances. 7. I respectfully submit there was no evidence before the learned Magistrate to support Mr David John Lloyd's proposition that he entered into the contract or cost agreement with myself. Courtesy of the Legal Profession Uniform Law (NSW) 16a of 2014. Mr David John Lloyd is precluded from commencing any legal proceedings for failing to fully disclose until such time any such costs have been assessed by the regulatory authority, in this case the Supreme Court of NSW cost assessment procedures. 8. I respectfully submit there is no case law or statute which supports the proposition that a Legal Practitioner can act as a Legal Practitioner in any other name than the one that appears on his practicing certificate. This is so in order to make them readily identifiable to any prospective client. 9. The Cost agreement relied upon by the defendant in the Local Court is in the name of John Lloyd SC. When a search is conducted of the Supreme Court Registers of admitted Legal practitioners the register does not reveal the name John Lloyd SC. This was also the case with a search of the Bar Association of NSW. 10. The Magistrate erred by finding against the weight of the evidence as a search of the ASIC register reveals that Mr David John Lloyd SC does not have a registered trading name in the name of John Lloyd SC. This precludes him from trading as John Lloyd SC but most disturbing is the fact he does not have a Practicing Certificate in that name. 11. The Cost disclosure agreement that was relied upon on Mr David John Lloyd is in another entity name of which can only be considered an unqualified legal or law practice that cannot provide or charge for legal services in accordance with the Legal Profession Uniform Law. 12. lt is clear from the evidence before the court that Mr David John Lloyd has engaged in deceptive and misleading conduct. It was not until I was served with the statement of claim that I became aware of this conduct. 13. I respectfully submit the appeal be upheld and the orders of the Local Court Magistrate be set aside and in lieu the statement of claim be dismissed."
While these submissions did not address the grounds of appeal in an ordered or systematic way, they appear to capture Mr Kenna's underlying complaint.

Ground 4: The Magistrate erred in law by not providing written reasons when formally requested to do so.

Ground 4 can be disposed of, and rejected, quickly.
Magistrate Kennedy provided ex tempore reasons and did so orally and in open court. The reasons were recorded and a transcript was available to anybody who applied for it. The reasons explained the basis of her Honour's decision. [6] There is no legal requirement to provide reasons in written form. It was open to Mr Kenna to request a transcript of the proceedings, which he must have done at some stage because the transcript of the judgment was annexed to his affidavit dated 6 October 2020 that was read on the hearing of the appeal.

Ground 2: The Magistrate erred in law by ordering summary [judgment] when the defence of the current plaintiff was a defence under section 18 of Australian Consumer Law for misleading and defensive conduct.

Ground 2 may be also be dealt with briefly. Mr Kenna argued that the Magistrate erred in law by failing to consider the applicant's "defence" under s 18 of the Australian Consumer Law in Sch 2 to the Competition and Consumer Act 2010 (Cth). That section creates, or provides for, a cause of action. It does not provide a defence available in an action for debt or breach of contact. Nevertheless, her Honour considered Mr Kenna's submission that Mr Lloyd had misled him and made findings of fact that are beyond the scope of this kind of appeal.

Ground 1: The Magistrate erred in 'Law' by accepting there was a valid costs agreement in accordance with the Legal Profession Uniform Law NSW.

Mr Kenna argued that the Magistrate erred in law in finding that there was a valid costs agreement under the Legal Profession Uniform Law 2014 (NSW). He submitted that Mr Lloyd did not comply with disclosure obligations in Div 3 of the Legal Profession Uniform Law. Aside from the argument that Mr Lloyd was operating under a false name, or that there was a requirement that the name on the costs agreement was the same as the name of the practising certificate, Mr Kenna submitted that the obligation to pay Mr Lloyd lies with the Hamish Cumming Family Lawyers.
Section 180(1)(b) of the Legal Profession Uniform Law provides that a costs agreement may be made "between a client and a law practice retained on behalf of the client by another law practice". The disclosure obligations for a law practice to a client are found in s 174(1) and (2): 174 Disclosure obligations of law practice regarding clients (1) Main disclosure requirement A law practice - (a) must, when or as soon as practicable after instructions are initially given in a matter, provide the client with information disclosing the basis on which legal costs will be calculated in the matter and an estimate of the total legal costs; and (b) must, when or as soon as practicable after there is any significant change to anything previously disclosed under this subsection, provide the client with information disclosing the change, including information about any significant change to the legal costs that will be payable by the client - together with the information referred to in subsection (2). (2) Additional information to be provided Information provided under - (a) subsection (1)(a) must include information about the client's rights - (i) to negotiate a costs agreement with the law practice; and (ii) to negotiate the billing method (for example, by reference to timing or task); and (iii) to receive a bill from the law practice and to request an itemised bill after receiving a bill that is not itemised or is only partially itemised; and (iv) to seek the assistance of the designated local regulatory authority in the event of a dispute about legal costs; or (b) subsection (1)(b) must include a sufficient and reasonable amount of information about the impact of the change on the legal costs that will be payable to allow the client to make informed decisions about the future conduct of the matter.
Where a firm of solicitors retains a barrister to act on behalf of a client, the obligation to disclose the matters in s 174 lies with the solicitor or law firm: Legal Profession Uniform Law, s 175. A failure to comply with disclosure obligations renders any cost agreement between the solicitor and the client void: s 178(1)(a). However, the barrister also has disclosure obligations. Whatever went before, by way of disclosure between the parties, the agreement dated 16 September 2019 complied with the disclosure requirements existing between the parties.
The costs agreement dated 16 September 2019 was included in the joint court book. That agreement was between Mr Kenna and Mr Lloyd. It referred to the involvement of Mr Lloyd's instructing solicitors, but the disclosure was made directly to Mr Kenna by Mr Lloyd and the agreement was between the client and the barrister. As a matter of practice in New South Wales, it is often (if not usually) the case that the solicitor has a contract with the barrister and the solicitor assumes the obligation to pay counsel. It is incumbent on the barrister to make appropriate disclosure to the solicitor and for the solicitor to make disclosure to the client. Generally and ideally, the solicitor holds the fees on trust for the barrister. If they do not, the solicitor is, or may be, liable to pay the barrister's fees even if the client fails to pay the solicitor.
However, the fact that this is the usual course does not mean that the arrangements that prevailed in the present case were unlawful and void under the relevant provisions of the legislation. A similar situation was dealt with in Victoria in Petselis v Tatarka (2019) 57 VR 375; [2019] VSC 8. Keogh J made the following observation (citations omitted) (at [39]): "[39] Mr Petselis submitted that, because Mr Tatarka was retained by Evans Ellis and not directly briefed by him, there could be no contract between them. That submission is inconsistent with the observation of Gillard J in Dimos that 'persons can contract to do anything'. In Dimos, Gillard J contemplated a tripartite agreement between client, solicitor and barrister of the type which it was open to conclude was made between the protagonists in this case, in which the solicitor retains and briefs the barrister, but the contractual obligation to pay the barrister's fee is borne solely by the client. I also note that cl 180(1)(b) of the LPUL permits a costs agreement to be made between a client and a barrister retained to appear for the client by a solicitor. I reject Mr Petselis submissions."
Section 180 of the Legal Profession Uniform Law provides: 180 Making costs agreements (1) A costs agreement may be made-- (a) between a client and a law practice retained by the client; or (b) between a client and a law practice retained on behalf of the client by another law practice; or (c) between a law practice and another law practice that retained that law practice on behalf of a client; or (d) between a law practice and an associated third party payer.
As Keogh J found in Petselis v Tartaka, s 180(1)(b) contemplates the kind of agreement reached in the present case between Mr Kenna and Mr Lloyd.
There was no error of law in the Magistrate's decision by which she found, at least implicitly, that there was no relevant breach of the legislation. Ground 1 must also be rejected.

Ground 3: The Magistrate erred in law by ordering summary [judgment] in circumstances where there was a need to make factual findings and determine matters in respect of credibility. This goes against the [principles] as set out in the HCA decision of Spencer v The Commonwealth.

Magistrate Kennedy referred to the relevant authorities concerning the circumstances in which the Local Court might make an order for summary judgment. She did so by reference to what she described as "a limited defence" responding to the statement of claim and the submissions made by Mr Kenna, which largely related to the identity issue arising from the different names on the costs agreement and practicing certificate. She cited a number of relevant authorities on the power to enter summary judgment including the fact that Spencer v The Commonwealth (2010) 241 CLR 118; [2010] HCA 28 was cited in O'Brien v Bank of Western Australia Ltd [2013] NSWCA 71.
There is nothing in the Magistrates reasons to suggest that she erred in her application of the relevant authorities, including Spencer v The Commonwealth. Mr Kenna is correct insofar as his argument is that where there are factual disputes requiring resolution before the dispute between the parties can be determined, summary judgment is normally not an appropriate remedy: see, for example, Spencer v The Commonwealth at [47]-[48]. However, the Magistrate's conclusion was this: "So I have to say in saying all of that I am satisfied that in effect it certainly seems to be a technical argument that seeks to defeat the agreement that was made with this individual. There is no substance in this defence in my view. I AGREE THAT IN TERMS OF LOOKING VERY CAREFULLY IN RELATION TO THE TEST I WOULD FIND THAT IT IS SO UNTENABLE THAT IT COULD NOT POSSIBLY SUCCEED ON THE BASIS OF THIS DEFENCE AND THAT IT IS NO MORE THAN A FANCIFUL PROSEPCT OF SUCCESS AND ON THAT BASIS I DO INTEND TO ENTER SUMMARY JUDGMENT." [7] [Emphasis in original.]
This conclusion was not attended with error. It applied the stringent legal tests referred to in a number of authorities and the language used echoes many authorities concerning the approach to be taken when a party seeks summary judgment. Her Honour had already concluded that there was no tenable defence and no triable factual issue that the person with whom Mr Kenna contracted was the same person who held the relevant practicing certificate.
Ground 3 may also encompass the assertion that Mr Kenna was denied the opportunity to cross-examine Mr Lloyd and thereby denied procedural fairness. I will deal with that issue below but otherwise ground 3 cannot be sustained.

Procedural fairness

While it was not specifically pleaded in the grounds of appeal, Mr Kenna suggested at the hearing that there was "a denial of procedural fairness and natural justice". This submission seemed to be the culmination of, or conclusion to be drawn from the submissions that had preceded it, both orally and in writing: "The magistrate's decision was not open to her based on the evidence before her, in circumstances where a contract and representations as to identify (as said) of person are not that of a natural person and therefore does not make them readily identifiable. This was a denial of procedural fairness and natural justice." [8]
In his submissions in reply, Mr Kenna submitted: "Her Honour erred without giving me the proper chance to cross-examine Mr Lloyd as to why he engaged in the conduct he decided to engage in. And I wasn't given an opportunity to properly vent my case." [9]
As I have said, there was no ground of appeal specifically asserting a denial of procedural fairness. The record of the Local Court demonstrates that the requirements of natural justice were observed. No particular aspect of those requirements was identified as having been breached.
Mr Kenna raised the need to cross-examine Mr Lloyd in written submissions in the Local Court filed 28 October 2020: "17. The court needs to hear the evidence and cross-examination of the Plaintiff needs to take place as there are issues of 'Facts' and 'Credibility' that need to be determined to deny the Defendant would be a denial of procedural fairness and natural justice."
In response to a question asked by the Magistrate as to why the matter should proceed to hearing, Mr Kenna alluded to the fact that he sought to cross-examine the Mr Lloyd at final hearing: "That is certainly one, but it's a case of credibility here and it's a case of questions of honesty and being full and frank with the disclosure from day one. And the question again I ask is why wasn't I told his name was David John Lloyd so I can make proper investigations like I have done with previous barristers that have not acted for me and work out whether or not they are suitable for my case or not. And I could not have done that under the agreement because the agreement is in the name of John Lloyd, the plaintiff's name is David John Lloyd. I didn't even know who the plaintiff was when I received the statement of claim, your Honour, and there is a question of credibility here and there is questions to be asked of the barrister as to why that has taken place." [Emphasis added.]
In Rosser v Austral Wine and Spirit Co Pty Ltd [1980] VR 313 the Court said at 319: "A defendant must not be allowed to make an unjust use of the law's delays (per Smith, J. in Carlton and United Breweries Ltd. v Long [1958] VR 539, at p. 542) and in our opinion a defendant cannot raise an arguable case entitling him to leave to defend upon a mere assertion by his counsel that he may wish to test the plaintiff's case by cross-examination."
This case was relied on by Mr Lloyd in the Local Court hearing and referred to in passing by Magistrate Kennedy. [10] While her Honour did not reject directly the proposition that Mr Kenna should be permitted to cross-examine on the application for summary judgment, it was implicit in her decision to uphold that application. That decision necessarily encompassed a determination that an examination of the factual and evidentiary basis of the defence was unnecessary because the defence was without substance. Even taking into account the fact that Mr Kenna was not legally represented, the purpose of the cross-examination was not identified apart from the bare assertion that Mr Lloyd's credibility should be tested.
It is clear enough that the Magistrate decided it was not necessary to hear cross-examination to determine the application for summary judgment. It is equally clear that her Honour was persuaded that the identity issue raised by Mr Kenna did not turn on the resolution of factual disputes and credibility findings and that it was not a case that required cross-examination at a full hearing.
The suggestion that Mr Kenna was denied procedural fairness is not made out.

Orders

For the reasons I have given, the appeal and summons upon which it is brought to this Court must be dismissed with costs. Accordingly, I make the following orders: 1. Leave to appeal granted. 2. Appeal dismissed. 3. The plaintiff is to pay the defendant's costs.

Endnotes

Local Court Tcpt, 05/11/2020, pp 8 - 9.
See, for example, Di Biase v Rezek [1971] NSWLR 735 at 742 - 743, Tooth & Co Ltd v Bryen (No 2) (1922) 22 (SR)NSW 541 at 549, Rosser v Austral Wine & Spirit Co Pty Ltd [1980] VR 313 at 316.
(1878) 3 App Cas 1124.
Local Court Tcpt, 05/11/2020, p 11.
Local Court Tcpt, 05/11/2020, p 11.
Cf, Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 273[E] (Mahoney JA) and 280 (McHugh JA (as his Honour then was)).
Local Court Tcpt, 5/11/2020, pp 10 - 12.
Tcpt, 25/03/2021, p 4.
Tcpt, 25/03/2021, p 10.
Local Court Tcpt, 5/11/2020, p 10. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 13 October 2021

At a glance

Court

Decision date

Before

Source

Judgment (12 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (7)

Cited By (1)