O'Donnell v William Roberts Lawyers [2026] QDC 9

[4] WRL sought to retain Mr O'Donnell to represent their clients at the trial and, on 15 July 2025, Mr O'Donnell sent WRL a costs agreement. On LCM's instructions, WRL returned it signed on 17 July 2025, together with a brief.

[5] Most relevantly, the costs agreement included the following clause, providing for what the parties referred to as a cancellation fee:

For appearances before any court, tribunal, commission, board, arbitrator(s) or the like ("court") on a trial, hearing, examination, appeal, application, review, directions hearing, mention, delivery of judgment or otherwise, I will charge as follows for work carried out pursuant to the retainer:

...

(d) If for any reason the trial does not commence on 15 September 2025, and proceed for at least 20 days, then I would be paid a cancellation fee equal to the daily rate for each of 20 days, less the number of days for which the trial does proceed.

[6] On 18 July 2025, WRL instructed Mr O'Donnell to pause work. The proceeding settled shortly after and WRL told Mr O'Donnell that on 6 August 2025. On 7 August 2025, Mr O'Donnell issued an invoice to WRL containing these details:

[7] WRL issued an invoice to LCM on 28 October 2025 for the same amount, as a disbursement incurred by WRL in their capacity as the clients' solicitors. I was informed that LCM has paid to WRL, which paid to Mr O'Donnell, $15,400 for his fee for reading, but not the cancellation fee.

[8] Mr O'Donnell commenced this proceeding on 9 December 2025, claiming the total of his invoice as a debt owed pursuant to the costs agreement. The reading fee has since been paid. WRL defends the balance of the claim on two principal grounds, helpfully summarised by its counsel, Mr Ferrett KC, in his written outline of argument:

... clause 8 only entitled the barrister to charge the fee in circumstances where either:

(a) on 15 September 2025, the barrister attended the precincts of the Court but the trial contemplated by the clause did not commence;

(b) on or after 15 September 2025, but before 10 October 2025, the trial concluded, was adjourned or otherwise abandoned.

[Alternatively,] if WRL became liable to pay the amount if it terminated the retainer at any time after entry into it in July 2025, it is a penalty and therefore unenforceable. That is because the amount of the fee did not represent any genuine pre-estimate of loss or of any implied stipulation that the trial would proceed.

[9] On 19 December 2025, LCM filed, in the proceeding, an application for assessment of the costs the subject of WRL's invoice. The registrar declined to order an assessment and instead listed the application for a directions hearing (under r 743G) on 27 January 2026, which brought the matter before me. At the directions hearing, WRL (by Mr Ferrett) applied orally for an order that this proceeding be stayed pending the completion of an assessment of costs pursuant to LCM's application. Mr Ferrett submitted that questions concerning WRL's liability to pay the fee are likely to be argued on the assessment and there will be a risk that, in the one proceeding, the same questions will be considered in parallel by the court and the assessor. (WRL nominated a particular person for appointment as assessor.) LCM supported WRL's application.

[10] The application for assessment by LCM is made, on its face, under part 3.4, division 7 of the Legal Profession Act 2007 (LPA). It was filed in this proceeding in purported compliance with r 743B. Mr Ferrett helpfully summarised most of the relevant provisions of that Act and of the Uniform Civil Procedure Rules 1999 in his written outline of argument:

Within Part 3.4, Division 7 of the LPA:

(a) section 335(2) provides a third party payer with the right to apply for an assessment;

(b) section 338 provides that once an application for an assessment has been made, a law practice must not start any proceeding to recover the legal costs, until the assessment has been completed;

(c) section 339(2) provides that a person who has received notice of the application for an assessment (eg, the barrister) may participate in the assessment and may, if the costs assessor so decides, be bound by the assessment;

(d) section 340 provides that a costs assessor "must assess any disputed costs that are subject to a cost agreement by reference to the provisions of the costs agreement if ... a relevant provision of the costs agreement specifies the amount, or a rate or other means for calculating the amount, of the costs";

(e) section 341 sets out criteria that a costs assessor must and may have regard to in the course of the assessment.

Assessments under the LPA are regulated by Chapter 17A, Part 4 of the UCPR. Within that part:

(a) rule 743A provides that "a person applying for a costs assessment must apply to the relevant court;"

(b) rule 743B provides that if a law practice has started a proceeding in a court to recover costs from any person, any application for all or part of those costs must be made in the application in the proceeding;

(c) rules 743E and 743F provide the appointment of an assessor;

(d) rule 743G provides an express power for the Court to make directions.

Rule 743I imports a number of rules applicable to assessment of costs other than under the LPA. The rules imported notably include:

(a) rule 717 which grants an assessor the power to "refer to the court any issue or question arising in relation to the assessment;"

(b) rule 742 which grants the Court an express power to review an assessment.

(a) under s 332, a costs agreement may be made between:

(i) a client and a law practice retained by the client; or

(ii) a client and a law practice retained on behalf of the client by another law practice; or

(iii) a law practice and another law practice that retained that law practice on behalf of a client; or

(iv) a law practice and an associated third party payer;

(b) under s 336, a law practice that retains another law practice to act on behalf of a client may apply for an assessment of the whole or any part of the legal costs. Any such application must be made within 60 days of the date when the bill was given.

[12] Each of WRL and Mr O'Donnell is a "law practice".

[13] In support of WRL's application for a stay of the proceeding, Mr Ferrett submitted (again, in his written outline of argument):

Section 340 requires the costs assessor to have regard to the provisions of the retainer. To do that, the costs assessor will have to arrive at a view as to the proper construction of the retainer. It is conceivable, indeed likely, that the barrister, WRL and LCM will all make submissions to the assessor as to what clause 8(d) means and whether it is enforceable.

It is also conceivable that the parties will accept the outcome of the assessment and compromise accordingly.

It is obviously undesirable for those matters to be litigated in parallel in the assessment and the proceeding proper. Given:

(a) the prima facie right LCM has to an assessment;

(b) the possibility that, in the course of the assessment process, the questions of contractual interpretation and enforceability will be litigated;

(c) the possibility that those questions will find their way to a judge either by reference under rule 717 or review under rule 742;

(d) the possibility that the barrister will be bound by such decisions,

it makes sense for the proceeding as between WRL and the barrister to be stayed pending resolution of those matters.

As already noted, section 338 provides that once an application for an assessment has been made, a law practice must not start any proceeding to recover the legal costs until the assessment has been completed. That bespeaks a legislative intention that there should not be parallel proceedings over the same subject matter on foot. The stay sought would be consistent with that apparent legislative object.

[14] In his address, Mr Ferrett submitted that, in accordance with s 339, Mr O'Donnell has been given notice of the assessment of costs as between WRL and LCM and is therefore entitled to participate in that assessment and, if the assessor so decides, he will be bound by that assessment. In the assessment, the legal issues raised by WRL in its defence of this proceeding would inevitably be raised and the assessor may determine them or may choose to refer them to the court for determination. In either case, the issues raised in this proceeding, concerning the construction of the costs agreement and whether the cancellation fee is a penalty, would be raised and determined in the assessment. This is because the assessor is required to apply the costs agreement, which would require him first to decide what the agreement actually is and whether it is enforceable.

[15] If the assessment and this proceeding were to continue in parallel, it is conceivable that this process may result in different determinations of these issues. It would therefore be sensible to allow the assessment to proceed and to stay this proceeding pending its completion.

[16] Mr Ferrett submitted that, in addition to determining the enforceability of the costs agreement, the assessor would have a more general discretion to disallow or only partly allow the amount on the basis that he considers it to be unfair or unreasonable. That ground is not available to this court, giving another reason for the assessment to occur before this proceeding is determined.

[17] Ms Taylor, who appeared for LCM, adopted Mr Ferrett's submissions.

[18] Mr O'Donnell opposed the application for a stay of the proceeding. He submitted that LCM's application for assessment is premature, as the principal (if not the sole) question in that assessment will be whether WRL is liable to Mr O'Donnell for the amount that WRL seeks to charge LCM. LCM's application concerns the invoice issued to it by WRL, not the invoice issued by Mr O'Donnell to WRL. The latter invoice was raised pursuant to the costs agreement between himself and WRL, to which neither LCM nor WRL's clients were a party. It was open to WRL to seek an order for assessment of Mr O'Donnell's costs under s 336 of the LPA, provided it did so within 60 days of receiving Mr O'Donnell's invoice. It made no such application. Therefore, his own costs cannot be the subject of an assessment.

[19] One then looks to the grounds for LCM's application for assessment of the legal costs (comprising only a disbursement for Mr O'Donnell's fees) for which WRL has invoiced LCM. Under r 743A, the application must be accompanied by an affidavit that states the grounds on which the applicant disputes the amount of the costs or liability to pay them. In this case, the deponent of an affidavit filed on behalf of LCM deposed that its grounds are that the cancellation fee is not payable under the terms of Mr O'Donnell's costs agreement or it is unreasonable. (It is not clear whether the first ground is limited to a construction issue or includes the question whether the cancellation fee is a penalty.) Mr O'Donnell submitted that LCM provides no alternative claim that, even if WRL is liable to pay him the cancellation fee, there is any reason why LCM would not be obliged to reimburse WRL for that fee. Therefore, the only question is whether the cancellation fee is payable by WRL to Mr O'Donnell. That question can only be determined in this proceeding (as there is no assessment as between WRL and Mr O'Donnell) and its determination by the court will determine (or at least be relevant to) the outcome of the assessment of costs as between WRL and LCM. If LCM were joined as a defendant in this proceeding, then it will be bound by this court's determination of that issue.

[20] Additionally, at present WRL has not incurred the disbursement that it seeks to charge to LCM. Until WRL pays the claimed amount, it is not entitled to recover the amount from the payer (LCM) as a disbursement, so there is presently nothing to assess, as between LCM and WRL.

[21] Mr O'Donnell also submitted that any assessment between LCM and WRL would not be binding on him, as s 339 does not apply to a barrister retained by a solicitor on behalf of a client. The only process for assessment of costs as between a solicitor and a barrister is under s 336. The costs assessor as between the third party payer (LCM) and the solicitor (WRL) cannot make a determination that is binding on the barrister.

[22] In any event, Mr O'Donnell submitted, the questions of law raised in this proceeding (the proper construction of the costs agreement and whether the cancellation fee is a penalty) are pre-eminently matters for a judicial determination. The court should make that determination, which will then inform any assessor.

[23] Mr Ferrett submitted that Mr O'Donnell's construction of s 339 is incorrect and a barrister must be given notice of an application, as between client and solicitor, for assessment of legal costs that include a disbursement of fees charged by the barrister to the solicitor. The "legal costs" as between LCM and WRL are the same as the "legal costs" as between WRL and Mr O'Donnell, regardless of their separate contractual arrangements. He also submitted that, in any event, an assessor has a residual discretion to disallow costs that he considers unreasonable or unfair and any decision in that respect may assist in resolution of this proceeding other than by a judgment.

[24] In my view, it is appropriate that this court determine the issues raised in this proceeding before any assessment of costs as between LCM and WRL. The grounds on which the assessment is sought coincide substantially, if not entirely, with the issues raised in this proceeding. Even if an assessor retains a residual discretion to disallow as unreasonable part or all of the amount of the disbursement the subject of the assessment, such a discretion could only properly be exercised having regard to the questions whether the disbursement is in fact payable by WRL to Mr O'Donnell, either on the proper construction of the agreement or depending on whether or not it is a penalty.

[25] Furthermore, the issues would likely come before this court in any event, either on a referral by the assessor or on a review of an assessment. It is more efficient, less costly and likely to be quicker to have the issues determined by the court in this proceeding or in any appeal from this court's judgment - and therefore informing the assessor in a manner that binds the parties - than for them first to be argued before the assessor (and a decision made, or the issues referred to this court for determination), then before this court and then perhaps by the Court of Appeal. This court can also determine them in a manner that clearly binds all the relevant parties, which (at least on Mr O'Donnell's submission concerning s 339) may not be the case in an assessment.

[26] I consider it unnecessary to consider and determine the correct construction of s339, namely whether a barrister can be bound by an assessment as between solicitor and client, as the preferable course in any event is for this court to determine the legal issues that are raised both in this proceeding and in the proposed assessment as between LCM and WRL. LCM can be given the opportunity to be heard about those issues and can be bound by this court's determination by joining it as a defendant.

[27] Ms Walton objected to LCM being joined as a defendant, as it had had had no notice of any such possibility. She submitted that the court should only consider making such an order upon any application to that effect by Mr O'Donnell, which should be made and determined on proper notice to LCM. Mr Ferrett supported that submission.

[28] While ordinarily an application to join a person as a party to an existing proceeding must be made on notice to that person, the court may at any stage of a proceeding order that a person falling within a description in r 69(1)(b) be joined as a party. Clearly LCM's interests will be affected by the outcome of this proceeding. It falls within both descriptions in the latter rule. It was in fact I who proposed that LCM be joined as a party in order that it have the opportunity to participate and be bound by the court's decision. Neither of the existing parties applied to join LCM, although Mr O'Donnell agreed that it would be appropriate. It would cause undue delay and expense and involve undue technicality to await an application by Mr O'Donnell or WRL. It was clearly appropriate that it be joined and I considered the better course was to make such an order immediately and then to make appropriate directions for the next steps in the proceeding.

[29] For these reasons, I made the orders to which I have referred.