McCausland v Surfing Hardware International Holdings Pty Limited

) Timothy Ford (Fifth Respondent) Representation: M S Willmott SC with M Castle of counsel (Appellants) R C Gration of counsel (Respondents) Dunstan Legal (Appellants) Harmers Workplace Lawyers (Respondents) File Number(s): IRC 1322 of 2010 Decision under appeal Date of Decision: 2010-01-19 00:00:00 Before: Mr Webley and Ms Filewood File Number(s): 2008/00019016

Judgment 1William and Yvonne McCausland ("the appellants") have sought leave to appeal and, if leave is granted pursuant to s 385(2) of the Legal Profession Act 2004, to appeal from a decision of the Costs Review Panel made on 19 January 2010 in costs assessment number 2008/00019016 in relation to an order for costs made by the Full Bench in Surfing Hardware International Holdings Pty Limited v McCausland and Anor (No 6) [2007] NSWIRComm 285; (2007) 169 IR 282, a judgment given on 27 November 2007. In that judgment the Full Bench made the following orders: (1)The respondents' second amended motion is dismissed. (2)The respondents shall, forthwith, pay the appellants' costs of the appeal, as agreed or assessed. (3)The respondents shall pay the appellants' costs of the notice of motion heard by Marks J on 14 July 2006, as agreed or assessed. (4)The respondents shall pay the appellants' costs of the motion to strike out the respondents' second amended notice of motion. (5)The respondents shall pay the appellants' costs of the notice of motion of 20 February 2007 seeking to uplift exhibit DCS1 for the purpose of having it forensically tested, as agreed or assessed. 2The application was filed in conjunction with three notices of motion. The first sought leave to extend time to appeal. The second sought to transfer the appeal and the accompanying notices of motion to the Supreme Court pursuant to s 151 of the Civil Procedure Act 2005 and the third sought orders that fresh evidence be admitted in the hearing of the appeal and leave be granted to issue a summons to produce further documents. A fourth motion was filed in Court on the day the first three motions were listed for hearing and that motion sought that Harmers Workplace Lawyers ("Harmers"), the solicitors acting for the respondents, namely, Surfing Hardware International Holdings Pty Limited, SHI Holdings Pty Limited, Surf Hardware International Pty Limited, Timothy Bosher and Timothy Ford, be restrained from representing the respondents in the appeal proceedings and that the respondents pay the costs of the motion. 3Because of the late filing of the fourth motion, the hearing was vacated and re-scheduled for 2 March 2011. On that day, the appellants sought to amend the fourth motion by adding a further ground with two sub-grounds. The respondents strenuously opposed the amendment, understandably so. In the result, however, the Court allowed the amendment and determined to hear the parties that day only in respect of the first motion - whether to extend time to appeal. If the appellants were unsuccessful in that application, the remaining interlocutory applications fell away. This judgment deals with the application to extend time to appeal.

Background 4The appellants commenced proceedings against the respondents in 2004 and 2005 pursuant to s 106 of the Industrial Relations Act 1996 alleging an unfair contract. The appellants had initially consulted Harmers regarding their claim and Harmers agreed to act for the appellants. Subsequently, the appellants changed solicitors and Harmers ceased to act. The respondents then engaged Harmers to act for them in the proceedings. The appellants filed a notice of motion seeking to have Harmers restrained from acting for the respondents on the ground that the appellants had provided Harmers with certain information in connection with their pending litigation and that Harmers had a conflict of interest. 5In McCausland v Surfing International Holdings Pty Ltd [2006] NSWIRComm 261, a decision given ex-tempore on 14 July 2006, Marks J ordered that Harmers be restrained from continuing to represent the respondents in the proceedings. 6The respondents appealed from his Honour's decision, but an objection was taken by the appellants to Harmers continuing to represent the respondents whilst the orders of Marks J remained on foot. That necessitated another firm of lawyers, Watson Mangioni, acting for the respondents in the interim. 7The decision and orders of Marks J restraining Harmers were eventually overturned by a Full Bench, subject to certain undertakings being provided by Harmers and its lawyers: Surfing Hardware International Holdings v McCausland (No 3) [2007] NSWIRComm 64; (2007) 161 IR 445. In that decision costs were reserved until the later decision in Surfing Hardware (No 6). 8The respondents sought to enforce the orders for costs that were made by the Full Bench in Surfing Hardware (No 6) in their favour, and in doing so made an application under the Legal Profession Act for an assessment of the party/party costs. 9The appellants had objected to the respondents' costs, submitting to the costs assessor that the indemnity principle had been breached. The costs assessor determined the question in favour of the respondents. He said at [63] of his reasons: [I]n response to a request made by the costs respondents' solicitors, I obtained information from the costs applicants' solicitors, HWL, and Watson Mangioni Lawyers, in relation to whether or not any of the claims made in the costs applicants' bill of costs involved any breaches of the indemnity principle. The information obtained was confidential but not privileged, in accordance with the decision of the Full Court of the High Court in VEAL v The Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72; (2005) 225 CLR 88 (6 December 2005). I provided the costs respondents with material and the substance of pertinent information. I gave the costs respondents an opportunity of making submissions to me on the indemnity principle. They did not do so. In my opinion, on the information obtained by me from HWL and Watson Mangioni Lawyers, the bill of costs accompanying the application in this matter does not involve any claims made in breach of the indemnity principle. 10The cost assessor issued a Certificate of Determination of Costs on 17 July 2009. He assessed costs in the sum of $222,355.45. The appellants sought a review of the determination by the cost assessor. On 14 April 2010, the Costs Review Panel provided to the appellants an "Amended Certificate of Determination of Costs by Costs Review Panel" affirming the Certificate of Determination of Costs of the cost assessor. In doing so, it decided, amongst other matters, that there had been no breach of the indemnity principles. 11On 12 May 2010, the appellants filed a Summons in the District Court commencing an appeal against the decision of the Review Panel pursuant to Pt 3.2, Div 11, Sub-Div 6 of the Legal Profession Act. On 22 September 2010, Johnstone DCJ heard two preliminary points: (a)Whether an application can be made for leave to appeal pursuant to s 385(3) to the District Court (as opposed to the Industrial Court that made the costs orders). (b)Whether fresh evidence or further evidence may be led in an appeal under s 384(1) in respect of a decision of a panel as to a matter of law arising in the proceedings. 12On 24 September 2010, Johnstone DCJ delivered judgment in respect of the preliminary points and determined that the further evidence could not be admitted into evidence pursuant to s 384 of the Legal Profession Act and that the District Court did not have jurisdiction under s 385 of the Legal Profession Act. As to the disposition of the matter, his Honour stated: [51] Counsel for the plaintiffs indicated that after I decided the two preliminary issues dealt with above they wished to "take stock" of their position in considering any next steps. [52] For that reason having regard to the conclusions I have reached I do not propose to decide now the third preliminary matter, that is which of grounds 1 to 8 in the Summons involve a decision on a matter of law arising in the proceedings. The defendants have conceded some of those grounds qualify, in particular the critical ground No 4. In respect of other grounds that may qualify the defendants raise a limitation point. As I understand the plaintiff's position, it is conceded on their behalf that without further evidence the appeal on the question of breach of the indemnity principle will fail. [53] I will therefore allow the plaintiffs time to consider whether they now wish to proceed with the balance of the substantive appeal in this Court or whether they wish to take some other course of action. [54] I will therefore stand the proceedings over for further directions on Friday, 19 November 2010. I am in Parramatta or on vacation in the meantime so I will grant leave to the parties to apply before that date, but to the List Judge. [55] Costs of the preliminary questions are reserved. I will retain the papers for the time being. 13A directions hearing took place in the District Court on 1 February 2011 to allocate a hearing date for the balance of the appeal and that date is 2 May 2011. 14On 20 October 2010, a bankruptcy notice was served on the appellants for the amount of the costs determined by the Review Panel. On 17 November 2010, the appellants filed in this Court their application for leave to appeal and appeal and the accompanying notices of motion described earlier.

Evidence 15The appellants relied on two affidavits of their solicitor, Gregory John Dunstan, sworn on 17 November 2010 and 15 February 2011 respectively. The respondents relied on: (i) the affidavit of Jennifer King, a Support Assistant employed by MHA Nominees Pty Ltd (the support business to Harmers), who was responsible for accounts payable, accounts receivable and payroll duties; and (ii) the affidavit of Joyce Tin Pui Chan, an employed solicitor with Harmers who, since around 27 May 2010, had been assisting with the day to day running of the matter under the supervision of Greg Robertson, General Counsel and Team Leader of Harmers.

Relevant legislation 16Section 385 of the Legal Profession Act provides: 385 Appeal against decision of costs assessor by leave (1) A party to an application for a costs assessment relating to a bill may, in accordance with the rules of the District Court, seek leave of the Court to appeal to the Court against the determination of the application made by a costs assessor. (2) A party to an application for a costs assessment relating to costs payable as a result of an order made by a court or a tribunal may, in accordance with the rules of the court or tribunal, seek leave of the court or tribunal to appeal to the court or tribunal against the determination of the application made by a costs assessor. (3) The District Court or court or tribunal may, in accordance with its rules, grant leave to appeal and may hear and determine the appeal. (4) An appeal is to be by way of a new hearing and fresh evidence, or evidence in addition to or in substitution for the evidence received at the original proceedings, may be given. (5) After deciding the questions the subject of the appeal, the District Court or court or tribunal may, unless it affirms the costs assessor's decision, make such determination in relation to the application as, in its opinion, should have been made by the costs assessor. 17The relevant rule of court referred to in s 385(2) is r 8.2 of the Industrial Relations Commission Rules 2009, which provides: 8.2 Time to appeal (1) An appeal must be made: (a) within 21 days after the date of the decision appealed against, or (b) within such further time as the Commission may allow. (2) An application to extend time to appeal may be included in the notice to appeal or may be made by separate notice of motion. 18The effect of these two provisions is that the appellants had 21 days in which to file an appeal in the Industrial Court from the determination of the Review Panel. That meant that the appeal was to be filed by 5 May 2010. Given that the appeal was not filed until 17 November 2010, it was out of time by over six months.

Relevant principles 19In Kirk Group Holdings Pty Ltd v WorkCover Authority (NSW) (Inspector Childs) [2006] NSWIRComm 355; (2006) 158 IR 281, the Full Bench considered the relevant common law principles governing the exercise of a discretion to extend time to appeal. The Full Bench held at [28]: [28] In any event, whether or not this Full Bench should grant an extension of time to the applicants is a matter entirely within the Court's discretion. However, whilst the discretion to extend time is a broad one in this case, the discretion is given for the sole reason of enabling the court to do justice between the parties which means that the discretion will usually only be exercised in favour of an applicant upon proof that strict compliance with the relevant provision will work an injustice upon the applicant: Gallo v Dawson (1990) 64 ALJR 458 at 459; 93 ALR 479 at 480; WorkCover Authority of NSW (Inspector Salmon) v Parkes Council (1996) 70 IR 298 at 299-301. In order to determine whether the relevant provision will work an injustice, it is necessary to have regard to the conduct of the parties, the nature of the litigation and the consequences for the parties of the grant or refusal of the application for extension of time: Gallo v Dawson per McHugh J citing Avery v No 2 Public Service Appeal Board [1978] 2 NZLR 86 at 92; and Jess v Scott (1986) 12 FCR 187 at 194-5; 70 ALR 185. 20As McHugh J also observed in Gallo v Dawson [1990] HCA 30; (1990) 93 ALR 479 at 480 it is always necessary, in cases such as the present, to consider the appellants' prospects of succeeding on the appeal. In order to be able to exercise the discretion, the Court needs to consider the various reasons advanced as to why there was a delay in filing the appeal: see Healey v HPA Pty Ltd [2003] NSWIRComm 195; (2003) 125 IR 227 at [16]. 21In Tomko v Palasty (No 2) [2007] NSWCA 369; (2007) 71 NSWLR 61 it was concluded at [80] by Basten JA (with whom Hodgson and Ipp JJA substantially agreed) that the defendant had failed to win an extension of time because he "failed to provide any satisfactory explanation for the delay in seeking to proceed with an appeal or a cross-appeal." In that case Basten JA, after referring to the decision in Jackamarra v Krakouer [1998] HCA 27; (1998) 195 CLR 516 at [4] (Brennan CJ and McHugh J), stated at [55] that: [55] ... In such cases [application to extend time to appeal], consideration must be given to four factors of general relevance, namely: (1) the length of the delay; (2) the reason for the delay; (3) whether the applicant has a fairly arguable case, and (4) the extent of any prejudice suffered by the respondent to the application: see Palata Investments Ltd v Burt & Sinfield Ltd [1985] 1 WLR 942 at 946, referred to with approval, in such a context, in Jackamarra at [6]-[7].

Statutory provisions 22Section 56 of the Civil Procedure Act 2005 provides: 56 Overriding purpose (1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule. (3) A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court. (4) A solicitor or barrister must not, by his or her conduct, cause his or her client to be put in breach of the duty identified in subsection (3). (5) The court may take into account any failure to comply with subsection (3) or (4) in exercising a discretion with respect to costs. 23However, two other provisions of the Civil Procedure Act are also relevant, namely ss 57 and 58: 57 Objects of case management (1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects: (a) the just determination of the proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. (2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1). 58 Court to follow dictates of justice (1) In deciding: (a) whether to make any order or direction for the management of proceedings, including: (i) any order for the amendment of a document, and (ii) any order granting an adjournment or stay of proceedings, and (iii) any other order of a procedural nature, and (iv) any direction under Division 2, and (b) the terms in which any such order or direction is to be made, the court must seek to act in accordance with the dictates of justice. (2) For the purpose of determining what are the dictates of justice in a particular case, the court: (a) must have regard to the provisions of sections 56 and 57, and (b) may have regard to the following matters to the extent to which it considers them relevant: (i) the degree of difficulty or complexity to which the issues in the proceedings give rise, (ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, (iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties, (iv) the degree to which the respective parties have fulfilled their duties under section 56 (3), (v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings, (vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, (vii) such other matters as the court considers relevant in the circumstances of the case. 24In Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175, the majority (Gummow, Hayne, Crennan, Kiefel and Bell JJ) addressed r 21 of the Court Procedure Rules 2006 (ACT). Rule 21 is similar to s 56 of the Civil Procedure Act and is in the following terms: (1) The purpose of this chapter, and the other provisions of these rules in their application to civil proceedings, is to facilitate the just resolution of the real issues in civil proceedings with minimum delay and expense. (2) Accordingly, these rules are to be applied by the courts in civil proceedings with the objective of achieving - (a) the just resolution of the real issues in the proceedings; and (b) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. (3) The parties to a civil proceeding must help the court to achieve the objectives. (4) The court may impose appropriate sanctions if a party does not comply with these rules or an order of the court. 25The majority stated at [93] and [103] (references omitted): [93] Rule 21(2)(b) indicates that the rules concerning civil litigation no longer are to be considered as directed only to the resolution of the dispute between the parties to a proceeding. The achievement of a just but timely and cost-effective resolution of a dispute has an effect upon the court and upon other litigants. In Sali v SPC Ltd Toohey and Gaudron JJ explained that case management reflected: "[t]he view that the conduct of litigation is not merely a matter for the parties but is also one for the court and the need to avoid disruptions in the court's lists with consequent inconvenience to the court and prejudice to the interests of other litigants waiting to be heard ...". ... [103] The fact that an explanation had been offered for the delay in raising the defence was regarded as a relevant consideration in J L Holdings. Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules. There can be no doubt that an explanation was required in this case. 26In Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230 it was held that: (a) Section 58(2)(a) of the Civil Procedure Act requires that in applying the powers of case management the Court must have regard to the provisions of s 56 and s 57 of the Act in determining what are the "dictates of justice" under s 58(1); and (b) Section 57(1)(a) requires the Court to have regard to "the just determination of the proceedings" and therefore the matter must be given weight as a fundamental element in the decision making process. 27Allsop ACJ stated: [36] The arguments before this court illuminated the difficulty of review of a decision such as that made by the Magistrate. The Civil Procedure Act , ss 56-61 brings about a new statutory balance among various factors in litigation including court and party efficiency and the delivery of individual justice. Delay and case backlog are not merely factors affecting the public cost of delivering justice, they corrode the ability of the courts to provide individual justice. Especially in a court as busy as the Local Court, it is vital that the judicial system work in a way that denies, categorically, the party against whom a legitimate claim or grievance is brought the opportunity to say, with justification: " So I owe you $x, what are you going to do about it? Sue me in Court? That will take years. " The reforms that have taken place under the Civil Procedure Act and the evident attempt by the Local Court to ensure efficiency of service for the public can thus be seen not merely to reflect worthy governmental and judicial efforts for efficiency, but also to be vital for the provision of timely individual justice. To these salutary ends significant powers of case management have been placed in the hands of judicial officers which, if exercised, can often be seen to have sharp, and sometimes detrimental effects on the claims of parties. Such consequences can be seen in the very nature of the powers in the Civil Procedure Act ... See also Bi v Mourad [2010] NSWCA 17; Richards v Cornford (No 3) [2010] NSWCA 134.

Length and reason for delay 28The delay, as I have noted, was over six months. It was not as though the appellants were entirely inactive over that time or spent the time researching the case (see Gallo ), or were unaware of the time limit. The appellants took a decision to pursue an appeal in the District Court. Section 384 of the Legal Profession Act allows an appeal as of right to the District Court from a decision of a cost assessor as to a matter of law. It appears that the appellants wished to introduce new evidence. However, Johnstone DCJ held that further evidence could not be led in an appeal under s 384. Moreover, his Honour held any application for leave to appeal under s 385 by the appellants was required to be made to the Industrial Court of New South Wales in accordance with its rules and not in the District Court. Section 385 does not restrict appeals to matters of law but it does require the leave of the relevant Court. 29The choice facing the appellants was to continue their appeal under s 384 without the further evidence they wished to rely upon or file an appeal in the Industrial Court. Without discontinuing the appeal in the District Court, the appellants filed their appeal in the Industrial Court pursuant to s 385(2). 30The appellants' forensic decision to pursue an appeal in the District Court was made on the basis of a mistaken view of the law and subject to the degree of any injustice that might be caused to the appellants if I were to refuse leave, I do not consider that error alone should deprive them of a grant of leave to extend time to appeal in the Industrial Court. However, having been informed of their error by Johnstone DCJ on 24 September 2010, it was not until nearly two months later that an appeal was filed in the Industrial Court. 31The appellants produced no satisfactory evidence as to why it took nearly eight weeks to decide to file in the Industrial Court. After delivering judgment, Johnstone DCJ expressly urged the appellants "to consider whether they now wish to proceed with the balance of the substantive appeal in this Court or whether they wish to take some other course of action." There was no evidence that the appellants were unaware of the time limit in the Industrial Court's rules and the options open to the appellants of either continuing in the District Court or commencing proceedings in the Industrial Court did not involve a decision of any degree of complexity. 32When one considers the period over which the proceedings have been on foot - nearly five and a half years - the failure of the appellants to act with alacrity following the decision of Johnstone DCJ in September 2010, counts against an extension of time to appeal. There was a marked lack of expedition on the part of the appellants for which no satisfactory explanation was provided.

Degree of injustice 33Section 58(2)(b)(vi) of the Civil Procedure Act requires the Court to consider the degree of injustice that would be suffered by the respective parties as a consequence of any order refusing an extension of time. 34The appellants contend there is a triable issue in respect of its main complaint, namely, the Review Panel's decision was in breach of the indemnity principle in that the appellants contend that the respondents had no obligation to pay their solicitors' fees for acting for them in the appeal proceedings before the Industrial Court in Matter No IRC 2876 of 2006. The effect of the appellants' submission was that given they had a "fairly arguable case" they would suffer an injustice if leave to extend time to appeal was refused. 35The basic "indemnity principle" was expressed by Santow JA in Wentworth v Rogers [2006] NSWCA 145; (2006) 66 NSWLR 474 at [45]: [45] ... Where a party to an action has an agreement with their legal adviser that they do not have to pay any costs, then the general law principle states that that party cannot recover party and party costs against their adversary: McCullum v Ifield [1969] 2 NSWR 329 at 330, per Taylor J, citing Gundry v Sainsbury [1910] 1 KB 645. 36See also Dyktynski v BHP Titanium Minerals Pty Ltd [2004] NSWCA 154; (2004) 60 NSWLR 203 at [7] and CSR Ltd v Eddy [2008] NSWCA 83; (2008) 70 NSWLR 725 at [44] per Basten JA. 37The appellants' contention appears to be that there were various arrangements including arrangements between Watson Mangioni (the firm of solicitors that represented the respondents in the proceedings whilst the order made by Marks J on 14 July 2006 restraining Harmers from representing the respondents remained on foot) and Harmers regarding professional costs. It was said the arrangements raised the question whether the respondents had an obligation to pay the legal costs of either Watson Mangioni or Harmers and, if not, there is nothing the appellants are required to indemnify the respondents against. 38There are documents that the appellants seek to rely upon in respect of which the respondents claim client legal privilege. The documents consist largely of communications (mainly emails) between Harmers and Watson Mangioni regarding payment of outstanding fees and a tax invoice sent by Watson Mangioni to Harmers for professional costs of acting on Harmers' behalf in the proceedings before the Full Bench involving the appellants and respondents. The appellants seek to use the documents to strengthen their contention that they have an arguable case. 39The appellants submitted the documents were not caught by privilege. Reliance was placed on Eddy and in particular what Basten JA said at [60]-[67]. Essentially, what his Honour held was that the existence of a retainer between client and lawyer is not the subject of client legal privilege, but a precondition to its operation. Thus, generally the retainer will not be privileged (Hodgson JA specifically agreeing and McColl JA in general agreement). 40It may be noted that the issue of client legal privilege in Eddy did not involve a consideration of the relevant provisions of the Evidence Act 1995 and was concerned with the tests under the general law: see [61]. However, in [66] Basten JA stated: [66] There is no doubt that a funding arrangement, whether with a third party or with a lawyer, may be characterised as a confidential document and may indeed be prepared for the dominant purpose of obtaining legal services. However, the nature of the connection must be assessed according to the purpose of the statutory provision. That purpose is the same as the purpose of the general law protection and, for reasons already noted, does not extend to a document the purpose of which is to create the relationship. Different issues may arise in relation to documents prepared for or provided to a litigation funder. Further, because the operation of s 119 of the Evidence Act does not arise, it is sufficient for present purposes to say that the general law principle in relation to lawyer-client costs agreements was correctly stated by Lindgren J in Cook . Accordingly, the costs agreements were not protected by client legal privilege. 41The appellants further submitted that even if privilege applied to the documents it had been waived on the basis that other documents that had been produced by the respondents in respect of which privilege had not been claimed had disclosed the substance of the evidence in respect of which privilege was claimed: see s 122 of the Evidence Act and Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475 at 487 per Mason and Brennan JJ. 42The respondents relied on s 119 of the Evidence Act , which provides: 119 Litigation Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of: (a) a confidential communication between the client and another person, or between a lawyer acting for the client and another person, that was made, or (b) the contents of a confidential document (whether delivered or not) that was prepared, for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party. 43Reference was made in particular to Rickard Constructions Pty Ltd v Richard Hails Moretti Pty Ltd [2006] NSWSC 234 at [58] and Re Global Medical Imaging Management Limited (in liq) [2001] NSWSC 476. In the first of those cases, Bergin J held: [58] A different question arises under s 119 of the Act. It is whether the communications were for the dominant purpose of the plaintiff "being provided with professional legal services". I have already decided that the communications were confidential communications. The dominant purpose in the confidential communications was to provide information to the funder so that it would source the continued funding of the litigation. It may be argued, as it was in Global Imaging, that such a purpose is anterior to the dominant purpose of the client "being provided with professional legal services". In Global Imaging Santow J held that the funding agreement in question in "a literal and substantive sense, fulfils the purpose of providing legal services in terms not only of the overall capacity to have them at all, but also their availability at critical junctures in the case" (at [7]). [59] In this case it is the confidential communications rather than the funding agreement that are under consideration. They are not anterior to the dominant purpose, they are inextricably linked to the nature of the professional legal services being provided to the client. Their dominant purpose was to ensure the overall capacity of the plaintiff to have funding and to ensure that such funding would be forthcoming for the continued funding of the litigation. That seems to me to fall within the description of a dominant purpose of the client "being provided" with professional legal services. This description is to be contrasted with the expression "providing professional legal services". The concept of the client "being provided with" something is of broader import and seems to me to encompass the purpose under consideration here. I am satisfied that the documents are also privileged pursuant to s 119 of the Act. 44In Global Medical Imaging, Santow J held as follows: [6] At first blush, one might be inclined to treat a funding agreement as falling outside s119, being provided not for the dominant purpose of the provision of professional legal services but, rather, for a purpose anterior to their provision, namely, the funding thereof. Such a view would comport with the trend of a hardening judicial attitude to narrow the scope of the legal professional privilege; see the discussion of the cases cited in "Legal Professional Privilege in Australia" by Dr R J Desiatnik (Prospect, 1999) at 53 as reflected for example that it is not enough for a person merely to assert a claim for privilege ( National Crime Authority v S (1991) 100 ALR 151 at 159 per Lockhart J) That trend of the general law as so interpreted is however not consistently reflected in its statutory counterpart. The Evidence Act 1995 to some extent widens its scope, notably by substituting the dominant purpose test for the sole purpose test, though the general law has now caught up; Esso Australia Resources Ltd v Commissioner of Taxation of the Cth of Australia (1999) 74 ALJR 339. [7] But that first blush view is not the view that I would, on consideration adopt. To deny legal privilege to a funding agreement of this sort would fail to give proper weight to its inextricable connection with the very subject matter of the legal advice that might be given and the nature of the professional legal services to be rendered. It has the potential to reveal the litigant's likely legal strategy. The funding agreement in a literal and substantive sense, fulfils the purpose of providing legal services in terms not only of the overall capacity to have them at all, but also their availability at critical junctures in the case. While it may not reveal the content of legal advice, it reveals the confidential circumstances of its availability and throws oblique light on the confidential circumstances to which the advice is directed. [8] One could, for example, infer from a funding agreement the likelihood of tactical advice being given of a particular kind at different stages of the litigation or, for that matter, of the likelihood of an appeal being advised or not advised. I consider this funding agreement could do so. [9] Accordingly I would conclude that the dominant purpose element is made out. 45The respondents further submitted there had been no waiver of the privilege in the respondents providing, under compulsion, copies of documents to the costs assessor and the District Court: see s 122(5)(iii) of the Evidence Act . Further, the respondents had not acted inconsistently with the maintenance of privilege: Commissioner of Taxation v Rio Tinto Limited [2006] FCAFC 86; (2006) 151 FCR 341 at [50]. 46In my opinion, the documents are not privileged. Whilst I am able to accept the documents were confidential communications, I am unable to accept they were prepared for the dominant purpose of the respondents being provided with professional legal services. The documents reveal neither the content of any advice nor any legal strategy, either expressly or inferentially. The documents are essentially communications between two firms regarding the payment of outstanding fees. Insofar as any costs agreement is concerned, I respectfully take the same view as that expressed by Basten JA in Eddy . 47Having come to this view about the documents, I do not think they transform the appellants' case into one that is strongly arguable and the most that could be said is the case is not doomed to failure. 48However, the difficulty the appellants face in pursuing their case for leave is that the respondents have paid to their solicitors the amount determined by the Review Panel. The respondents submitted that as the costs had been paid, regardless of whether they were required to be paid, they were entitled to recover those costs under a party/party order. Reliance was placed on Elders Trustee & Executor Co Ltd; Estate of Howard v Estate of Herbert (1996) 132 FLR 24; (1996) 11 NTR 25 and University of Western Australia v Gray (No 25) [2009] FCA 1227; (2009) 180 FCR 483. 49In Elders it was held that where costs had already been paid to interstate solicitors before they had been admitted to practice in the Northern Territory, those costs could be recovered under a part/party costs order. In Gray , Barker J stated at [38] and [40]-[41]: [38] In Re Hope , the English Court of Appeal considered that Fullalove v Parker and Re Jones applied and, at 767, said that while no person as an attorney or solicitor should carry on an action or suit without being certificated, there was nothing to prevent the client from paying the attorney and the want of a certificate could not create any impropriety on the part of the client in doing so. The Court added, at 767: No doubt [the client] might have refused to pay the costs incurred, but he was bound in honour to pay them, and if he had done so, and there was nothing to show that he had not, he had a right to recover them from the person who had been ordered to pay. ... [40] In Elders Trustee and Executor Co Ltd v Estate of Herbert [1996] NTSC 37; (1996) 132 FLR 24; 11 NTR 25 the Court of Appeal of the Supreme Court of the Northern Territory dealt with the costs recovery position in the Northern Territory where uncertificated out-of-Territory legal practitioners had acted for the successful party who had the benefit of a costs order from the trial judge. Section 22(4) of the Legal Practitioners Act 1974 (NT) relevantly provided: A legal practitioner is not entitled to recover any costs or disbursements in respect of any work of a professional nature done by him as a legal practitioner if, at the time at which the work was done, he was not the holder of a current unrestricted practising certificate or restricted certificate class 2. Gallop J, with whom Thomas J agreed (and with whom Kearney J appears to have agreed on this point) explained that when an order for costs was made in favour of a party, they were entitled to be indemnified for all costs properly paid out in the maintenance of the action and in that regard referred to Cachia v Hanes [1994] HCA 14; (1994) 179 CLR 403 per Mason CJ, Brennan, Deane, Dawson and McHugh JJ at 410 - 411. Gallop J then referred to what Kearney J had held in an earlier case about the operation of s 22(4). In TNT Bulkships Ltd v Hopkins [1989] NTSC 42; (1989) 65 NTR 1, Kearney J had regard to s 22(4) and held that: (1) a successful plaintiff cannot recover the costs of his uncertificated solicitor from the defendant except as to monies he has already paid to that solicitor on account of his costs in the action; (2) no costs were recoverable by the plaintiff on taxation for professional work done by a solicitor as he was not a legal practitioner in the Territory; (3) no costs were recoverable by the plaintiff for professional work done by another uncertificated practitioner, save in respect of monies paid prior to taxation; (4) s 22(4) is directed specifically at a person who is a legal practitioner but who lacks a practising certificate; (5) there was, in effect, no real question that the out-of-Territory lawyers were acting as agents. Gallop J said (111 NTR at 33) that he did not agree with Kearney J about the operation of s 22(4). However, his Honour considered that Kearney J was correct, whatever the operation of s 22(4), in deciding the costs and disbursements already paid were recoverable and that all of the old cases - Fullalove v Parker , Re Jones , Re Hope and Fowler - supported that proposition. [41] With respect, it seems to me that the correct principle to be drawn from the older cases cited by Gallop J, in the light of Fowler , is that, provided the statute governing a legal practitioner's fees does not have the effect of extinguishing the debt between a legal practitioner and client because the practitioner was, at material times, uncertificated (and absent any other statutory rules governing the recovery of party and party costs), then, if the fee has been paid by the client without notice of the practitioner's disability, they can recover it as party and party costs under a costs order. Fowler elucidates this principle, although the result in that case was different from the earlier cited cases. 50There is nothing in the Legal Profession Act that has the effect of extinguishing the debt between the respondents and their solicitors. Accordingly, I agree with the respondents that as the fees have already been paid by the respondents, they are entitled to recover them as party and party costs from the appellants under a costs order. 51The respondents also referred to ss 367A and 365(2) of the Legal Profession Act : 367A Determinations of costs assessments for party/party costs A costs assessor is to determine an application for an assessment of costs payable as a result of an order made by a court or tribunal by making a determination of the fair and reasonable amount of those costs. 365 Effect of costs agreements in assessments of party/party costs (1) A costs assessor may obtain a copy of, and may have regard to, a costs agreement. (2) However, a costs assessor must not apply the terms of a costs agreement for the purposes of determining appropriate fair and reasonable costs when assessing costs payable as a result of an order by a court or tribunal. 52Given that the costs have already been paid, it would seem that the terms of any costs agreement between the respondents and their solicitors, and documents relating to it, are irrelevant.

Abuse of process 53The respondents submitted a further reason for refusing the extension of time is that the appellants' conduct in having two identical appeals running concurrently in two different courts is an abuse of process. That the two appeals are identical would seem to be correct given the similarity between the appeal grounds in the District Court and the grounds of appeal in the Industrial Court. The appellants have not discontinued the appeal in the District Court. 54The appellants contended, in effect, that the need to pursue two separate appeals was forced upon them by the different provisions of ss 384 and 385 of the Legal Profession Act. I do not consider that to be correct. Section 384 provides for an appeal on a matter of law. Section 385 is an all grounds appeal and may countenance matters of law as well as fact. It is not the case that the appellants were forced to go to two different jurisdictions: one appeal encompassing all of their complaints could have been pursued in the Industrial Court, albeit subject to leave. 55Basten JA adverted to this issue in Wentworth v Rogers at [204]-[208]. At [206] his Honour stated: [206] On the basis that leave should be granted under s 208M [the predecessor of s 385], the appeal under s 208L [the predecessor of s 384] lacks utility and subject to one qualification, the appeal to this Court in respect of the orders made below could properly be dismissed. The qualification is that the first order made by the Court was that "the appeal against the decision of the costs assessor as to matters of law is dismissed". The form of the order assumes that the final determination of the costs assessor was a "decision ... as to matters of law", which it was not. Further, there were in fact two determinations of the costs assessor in any event. It may therefore be appropriate to set aside the order and affirm the result, in different terms. The remaining question concerns the costs of those proceedings below. 56In Thames Launches Ltd v Trinity House Corp (Deptford Strond) [1961] Ch 197 Buckley J held at 207: I understand the principle to be that if there are two courts which are faced with substantially the same question, it is desirable to be sure that that question is debated in only one of those two courts, if by that means justice can be done. And at 209: Counsel for the defendants says that the principle is that a man should not pursue a remedy in respect of the same matter in more than one court. In my judgment, the principle is rather wider than that. It is that no man should be allowed to institute proceedings in any court if the circumstances are such that to do so would really be vexatious. In my judgment, it is vexatious if somebody institutes proceedings to obtain relief in respect of a particular subject-matter where exactly the same issue is raised by his opponent in proceedings already instituted in another court in which he is not the plaintiff but the defendant .

Conclusion 57One option open to the Court would be to stay the appellants' application until such time as it made an election as to which jurisdiction it intended to pursue its appeal. However, when one considers the lengthy period over which these proceedings have been on foot, the delay in bringing the appeal, the fact that costs have already been paid by the respondents and that they are now entitled to a party and party costs order, the absence of any real indication that the appellants would succeed in showing that the respondents were not obliged to pay their solicitor's costs, I am left to conclude that the dictates of justice favour a refusal of leave to extend time to appeal.

Other motions 58Given this conclusion, the second, third and fourth notices of motion described in [2] hereof would appear to be futile.

Orders 59The Court makes the following orders: (1) The notice of motion seeking leave to extend time to appeal is dismissed. (2) The appellants shall pay the respondents' costs of the motion as agreed or assessed.

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