Pentelow v Bell Lawyers Pty Ltd trading as Bell Lawyers

Supreme Court of NSW|2012-12-13|Before: Schmidt J, Young CJ

Judgment 1Ms Pentelow, a barrister, brings an appeal under s 39(1) of the Local Court Act 2007 against a decision given by Atkinson LCM, staying proceedings she had brought under the Legal Profession Act 2004 to recover fees and costs of some $25,988.55 from Bell Lawyers. Bell Lawyers also appealed the decision, to which Ms Pentelow responded by way of notice of contention. The matters over which the parties joined issue on appeal turn on the proper construction of the 2004 Act and the parties' cost agreements. 2It emerged that it was common ground between the parties that her Honour had erred in respect of one matter raised by Ms Pentelow's appeal, namely, in concluding that s 333(1) of the 2004 Act required her to give Bell Lawyers certain notices. One of the matters raised on the cross-appeal in relation to her Honour's approach to s 310 of that Act, was also not pressed. 3What was not resolved was the other question raised on the cross-appeal, namely, whether the parties had entered a contract for the provision of certain legal services, which Ms Pentelow had provided. The issue raised on the notice of contention responded to that question. On Ms Pentelow's approach, that was not a question of law which could be pursued on appeal under s 39(1) of the Local Court Act. That was disputed. 4While Bell Lawyers had not taken any steps available to it under the 2004 Act to have Ms Pentelow's costs assessed, it claimed that she could not enforce their costs agreements in the Local Court. Its case was that she could have her costs assessed under the 2004 Act, but could not enforce the costs agreements, because no contract for the provision of legal services had ever come into existence between them. That construction of the Act was in issue.

The decision appealed against 11The case argued below went further than the pleadings. Atkinson LCM identified the three issues requiring determination to be: Was there a contractual arrangement between the parties for the provision of legal services in relation to the appeal proceedings? Was the plaintiff required to make disclosures under s.310 of the Act? If so, did she make the necessary disclosure? Does the plaintiff have the right to sue for the recovery of her fees? 12On the issue of whether there was a contractual arrangement between the parties for the provision of legal services in relation to the appeal proceedings, her Honour concluded that: "39 On the basis of the above, I am satisfied on the balance of probabilities that there was a contract for the provision of legal services as: Mr Aurelius was authorised by the defendant as necessary to enter into a contract with a barrister for the provision of legal services in relation to Ms Bozario Mr Aurelius and the plaintiff agreed that the plaintiff would provide legal services in relation to the appeal proceedings The plaintiff performed the legal services in accordance with her agreement with Mr Aurelius. 40 In my view, it is irrelevant that the second costs agreement was a conditional fee agreement, as I am satisfied that: The costs agreement was separate to the contracts for the provision of legal services at first instance and in the appeal proceedings There was nothing in the evidence that was available to the court and outlined above that showed there was any agreement (or indeed discussion) about the appeal proceedings continuing to be conducted on a speculative basis." 13On the issue of whether Ms Pentelow was obliged to make disclosures under s 310 of the Act and whether such disclosure was made, her Honour concluded that the necessary disclosure was made. This is no longer in issue on appeal. 14On the issue of whether Ms Pentelow had the right to sue for the recovery of her fees, her Honour concluded that Ms Pentelow had not given disclosure necessary to be given under s 333 and possibly s 332 of the 2004 Act and accordingly, ordered the stay of the proceedings under s 331. It is this conclusion which the parties accept as being in error.

Provision of legal services on the conventional non-contractual basis 15There was no issue between the parties that the costs agreements they had entered were governed by the 2004 Act. It was also common ground that Ms Pentelow was entitled to pursue payment of her costs, but on Bell Lawyers' case, only by way of an assessment process even though, on its face the Act appears to permit both assessment (s 351) and enforcement (s 326). That was because, Bell Lawyers asserted, no contract for the provision of legal services had been entered between them. 16There was also no issue between the parties that at common law, a barrister cannot sue a solicitor who retains the barrister on behalf of a client in respect of his or her fees, because there was no contract between them. This was discussed by Brereton J in Keesing v Adams [2010] NSWSC 336 at [13] - [14] in the context of the predecessor Legal Profession Act 1987 ('the 1987 Act'). The position altered with the enactment of that Act, which by s 38I(3) permitted a barrister or solicitor to enter into a contract for the provision of services with a client or with another legal practitioner and to sue and be sued in relation to such a contract. 17Brereton J took the view that while s 38I permitted a barrister to enter into a contract for the provision of legal services, it did not require the barrister to do so. Rather, a barrister was given a choice. He or she could continue to render legal services on the conventional non-contractual basis, or could choose to render legal services under a contract. His Honour observed that if the barrister rendered services on the conventional basis, the fee would not be recoverable at law, because there would be no contract on which a barrister could sue. He concluded: [23] ... In my view, the correct position is that a barrister who chooses to enter into a contract for legal services can, by way of s 38I, recover his or her fees at law pursuant to that contract. A barrister who elects to render services on the conventional non-contractual basis would not be entitled to recover fees at law and would be left to the traditional extra curial remedies. 18The 1987 Act also provided for a regime of costs agreements, then defined in s 173 to mean 'an agreement referred to in s 184 as to costs for the provision of legal services'. Section 184(4) provided that such agreements were void, if not in writing or evidenced in writing. Such a costs agreement could also form part of a contract for the provision of legal services (s 184(5)). 19As to the cost assessment regime, Brereton J observed: "26 Thus it will be seen that the practical consequence of there being in force a costs agreement is that, if the costs agreement is one that provides a lump sum or total amount for the costs of the work to be done, those costs are not subject to assessment, and if the costs agreement specifies the rate specified, then the rate is not subject to assessment. In other words, the practical effect of a costs agreement is to remove from the scope of an assessment the capacity of the client to dispute the quantum of the gross fee or the quantum of the rate charged, as distinct from the reasonableness or the performance of individual items of work comprising a whole bill charged according to a rate. That is the sole function of a costs agreement. It is an agreement "as to the costs of the provision of legal services" because it is an agreement as to what the costs of those services will be." 20His Honour also observed: "30 As I have mentioned, a costs agreement is not a contract for legal services although it may be included in one. It has the very limited function of excluding from the scope of assessment the quantum of a lump sum fee or of an agreed rate. The mere entry of a practitioner and client into a costs agreement does not create a liability to pay costs where otherwise there is no liability. However, because the purpose of a costs agreement is to exclude the agreed matters from the scope of any assessment, and because the purpose of assessment ultimately is to culminate in a legally enforceable judgment, it seems to me that the entry into a costs agreement is a strong indication, though not an absolute one, of an intention that the practitioner is to render services on a contractual basis, such that his or her fees be recoverable pursuant to the assessment process. If it were not so, it is difficult to see any utility in entering into a costs agreement." 21What arrangements a barrister entered into was of course a matter of fact, necessary to be proven on the evidence, in the event of any dispute. Brereton J thus turned to consider whether the evidence in that case established that the solicitor was a party to a contract pursuant to which the barrister was rendering legal services on a contractual basis. His Honour concluded on the evidence that the barrister had decided to make his commercial arrangements directly with the lay client, and not with the solicitor and thus dismissed his application against the solicitor.

Enforcement of cost agreements made under the Legal Profession Act 2004 22Despite her Honour's findings on the facts, Bell Lawyers' case was that it and Ms Pentelow had not entered a contract for the provision of legal services, she had provided her services on the conventional basis and was thus not entitled to sue for her fees, despite what had been agreed in the costs agreements. In the result, she could not enforce those agreements, notwithstanding what s 326 provides. 23The starting point for the resolution of this controversy is to note that s 326 is not concerned only with costs agreements made between barristers and solicitors, but with any costs agreement made under s 322, regardless of the identity of the contracting parties. 24In the case of barristers and solicitors, the 2004 Act now provides: "83 Client access ... (3) Contracts A barrister or solicitor may enter into a contract for the provision of services with a client or with another legal practitioner. The barrister or solicitor may accordingly sue and be sued in relation to the contract." 25Section 83 is thus not concerned only with contracts for the provision of 'legal services', a term which is defined in s 4 of the 2004 Act to mean: "legal services means work done, or business transacted, in the ordinary course of legal practice." 26The 2004 Act does not require that contracts for the provision of legal services be entered and, if they are, does not require them to be made in writing or to be evidenced by writing. It follows that despite the enactment of the 2004 Act, a barrister still need not provide legal services under a contract for the provision of those services. In the ordinary course of a barrister's legal practice, such services may continue to be provided on the conventional, non-contractual basis. This was referred to by Campbell JA in Branson v Tucker [2012] NSWCA 310 at [69]: "69 Brereton J also correctly observed, at [25], that an agreement as to the costs of the provision of legal services "may form part of, but is a distinct concept from, a contract for the provision of legal services." He also observed, correctly, at [30], that the mere entry of a costs agreement does not create a liability to pay costs where otherwise there is no liability - such a contractual liability to pay for legal services can only arise under a contract for the provision of legal services. However, if there were not a contract for the provision of legal services, "it is difficult to see any utility in entering into a costs agreement" - there is no point in having an agreement about the price of an item, if there is not also a legal obligation to pay that price." 27There in question was not the proper construction of the provisions of the 2004 Act which here arise to be considered, but rather whether the Court had power to deal with disputed costs, other than under the provisions of the 2004 Act. 28The 2004 Act also does not require that cost agreements be made. What can be encompassed in such a cost agreement flows from various definitions which are expressed in broad terms. The term 'costs agreement' is now differently defined than under the 1987 Act. In s 302 it is defined to mean 'an agreement about the payment of legal costs'. The word 'costs' is also there defined to include 'fees, charges, disbursements, expenses and remuneration.' 'Legal costs' is defined in s 4 to mean: "amounts that a person has been or may be charged by, or is or may become liable to pay to, a law practice for the provision of legal services including disbursements but not including interest." 29These wide definitions explain why it was not in issue between the parties that in the case of a barrister, the 2004 Act permits costs agreements to be made in accordance with s 322, even when legal services are not provided under a contract for the provision of such services. 30It is Part 3.2 "Costs disclosure and assessment" by which such costs agreements are regulated. It is necessary to bear in mind the wide terms of the relevant definitions when construing what is there provided. 31Given that the 2004 Act contemplates that barristers who provide legal services on the conventional, non-contractual basis may enter costs agreements, it follows that in the event of such an agreement being made, unlike the position which traditionally prevails at common law, that the barrister and solicitor have entered a contract with each other, that is, a contract about payment for the legal services provided by the barrister. 32That is a contract which s 326 says may be enforced. In construing the section it is relevant to consider that the section does not require that the enforcement of any costs agreement depends upon the existence of any other contract. 33That is why Bell Lawyers contended that s 326 must be read down, to confine its operation to those costs agreements entered in circumstances where the parties have also agreed that legal services will be provided under a contract for the provision of such services. 34Should s 326 be read down in this way? As was long ago observed in Thompson v Goold & Co [1910] AC 409 at 420: "It is a strong thing to do to read into an Act of Parliament words which are not there, and in the absence of clear necessity, it is a wrong thing to do." 35That, it seems to me, must be particularly so in a case where the words which it is claimed should be read into the statute, are words of limitation which do not sit comfortably with the defined terms used in the Act and even more so, when they will seemingly have wide ranging consequences for the operation of the statutory scheme, which it does not seem to contemplate. 36In Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation [1981] HCA 26; (1981) 147 CLR 297, Mason and Wilson JJ observed at [23] - [26]: "23 ...The fundamental object of statutory construction in every case is to ascertain the legislative intention by reference to the language of the instrument viewed as a whole. But in performing that task the courts look to the operation of the statute according to its terms and to legitimate aids to construction. (at p320) 24. The rules, as D. C. Pearce says in Statutory Interpretation, p. 14, are no more than rules of common sense, designed to achieve this object. They are not rules of law. If the judge applies the literal rule it is because it gives emphasis to the factor which in the particular case he thinks is decisive. When he considers that the statute admits of no reasonable alternative construction it is because (a) the language is intractable or (b) although the language is not intractable, the operation of the statute, read literally, is not such as to indicate that it could not have been intended by the legislature. (at p230) 25. On the other hand, when the judge labels the operation of the statute as "absurd", "extraordinary", "capricious", "irrational" or "obscure" he assigns a ground for concluding that the legislature could not have intended such an operation and that an alternative interpretation must be preferred. But the propriety of departing from the literal interpretation is not confined to situations described by these labels. It extends to any situation in which for good reason the operation of the statute on a literal reading does not conform to the legislative intent as ascertained from the provisions of the statute, including the policy which may be discerned from those provisions. (at p320) 26. Quite obviously questions of degree arise. If the choice is between two strongly competing interpretations, as we have said, the advantage may lie with that which produces the fairer and more convenient operation so long as it conforms to the legislative intention. If, however, one interpretation has a powerful advantage in ordinary meaning and grammatical sense, it will only be displaced if its operation is perceived to be unintended. (at p321)" 37In R v Young (1999) 46 NSWLR 681, Spigelman CJ referred to the three conditions discussed by Lord Diplock in Wentworth Securities Ltd v Jones [1980] AC 74 at 105-6, paraphrased by McHugh JA in Bermingham v Corrective Services Commission of New South Wales (1988) 15 NSWLR 292 at 302: "... concerning the circumstances in which a court may read words into a legislative provision to give effect to its purpose. Lord Diplock said that a court may read words into a statutory provision when three conditions are fulfilled. First, the court must know the mischief with which the Act was dealing. Secondly, the court must be satisfied that by inadvertence Parliament has overlooked an eventuality which must be dealt with if the purpose of the Act is to be achieved. Thirdly, the court must be able to state with certainty what words Parliament would have used to overcome the omission if its attention had been drawn to the defect." 38Spigelman CJ also observed in R v Young that 'in the absence of any one of the three conditions, the court cannot construe a statute with the effect that certain words appear in the statute' (at [11]). He also observed that construction must be text based and that: "If a court can construe the words actually used by the parliament to carry into effect the parliamentary intention, it will do so notwithstanding that the specific construction is not the literal construction and even if it is a strained construction. The process of construction will, for example, sometimes cause the court to read down general words, or to give the words used an ambulatory operation. So long as the court confines itself to the range of possible meanings or of operation of the text - using consequences to determine which meaning should be selected - then the process remains one of construction." 39Having these requirements in mind, it seems to me that there are real difficulties with the construction of s 326 urged. The three considerations discussed by McHugh J are here not satisfied. Further, giving s 326 its ordinary meaning and grammatical sense appears to coincide with the legislative intent, as revealed by s 301 and other aspects of the statutory scheme, including the definitions earlier referred to. 40The construction of s 326 must be approached in light of s 301, which provides: "301 Purposes The purposes of this Part are as follows: (a) to provide for law practices to make disclosures to clients regarding legal costs, (b) to regulate the making of costs agreements in respect of legal services, including conditional costs agreements, (c) to regulate the billing of costs for legal services, (d) to provide a mechanism for the assessment of legal costs and the setting aside of certain costs agreements." 41It is evident from s 301 that the 2004 Act is not merely concerned with the regulation of the cost of legal services provided under a contract for the provision of such services. Rather, it provides an important scheme for the general regulation of the cost of the provision of legal services, including when they are provided by a barrister on a conventional, non-contractual basis. 42On the face of this legislative scheme, it appears that it was intended that the result of such a barrister entering into a costs agreement under the Act, is a departure from that conventional position. That departure has the various consequences provided by the Act. One of them is to give all parties to the costs agreement, whether they be barristers, solicitors, or clients, the right to enforce it. 43In construing s 326 in its statutory context, regard should also be paid to s 319, which is concerned with the recovery of 'legal costs'. It provides: "319 On what basis are legal costs recoverable? (1) Subject to the provisions of this Part, legal costs are recoverable: (a) in accordance with an applicable fixed costs provision, or (b) if paragraph (a) does not apply, under a costs agreement made in accordance with Division 5 or the corresponding provisions of a corresponding law, or (c) if neither paragraph (a) or (b) applies, according to the fair and reasonable value of the legal services provided." 44This section was discussed in Branson v Tucker, where Campbell JA observed: "63 It can readily be accepted that the only specific provision that the LP Act makes for assessing the reasonableness of legal costs is the system of assessment. Further, the Applicant correctly submits that s 319(1)(c) LP Act allows legal costs to be recoverable according to the fair and reasonable value of the legal services provided (ie, on a quantum meruit) only in circumstances where there is no fixed cost provision, and where there is no applicable costs agreement. In the present case there is no fixed cost provision, but there is an applicable costs agreement. Thus, s 319(1)(c) is not applicable here." . 45This is a similar case. Thus even on Bell Lawyers' approach, Ms Pentelow is entitled to pursue the costs agreements, albeit only by an assessment process. 46While s 326 provides that such contracts may be enforced, Bell Lawyers' approach is that it only operates if Ms Pentelow's services were provided either under a separate contract for the provision of legal services, or if the costs agreement themselves were enforceable as a contract for the provision of legal services. Here, of course, her Honour found that the parties had entered such a contract, a conclusion which Bell Lawyers also seeks to challenge on this appeal, a matter to which I will return. 47To support the construction urged, Bell Lawyers relied on s 361. That section is concerned with the conduct of a costs assessment, not with the question of whether the costs in issue can be enforced, otherwise than by way of the pursuit of the statutory assessment process. It provides: "361 Assessment of costs by reference to costs agreement (1) A costs assessor must assess the amount of any disputed costs that are subject to a costs agreement by reference to the provisions of the costs agreement if: (a) a relevant provision of the costs agreement specifies the amount, or a rate or other means for calculating the amount, of the costs, and (b) the agreement has not been set aside under section 328 (Setting aside costs agreements), unless the assessor is satisfied: (c) that the agreement does not comply in a material respect with any applicable disclosure requirements of Division 3 (Costs disclosure), or (d) that Division 5 (Costs agreements) precludes the law practice concerned from recovering the amount of the costs, or (e) that the parties otherwise agree. (2) The costs assessor is not required to initiate an examination of the matters referred to in subsection (1) (c) and (d)." 48Whether the costs in issue could be assessed on Bell Lawyers' application, is governed by s 351, which provides: "351 Application for costs assessment by law practice retaining another law practice (1) A law practice that retains another law practice to act on behalf of a client may apply to the Manager, Costs Assessment for an assessment of the whole or any part of the legal costs to which a bill given by the other law practice in accordance with Division 7 (Billing) relates. (2) If any legal costs have been paid without a bill, the law practice may nevertheless apply for a costs assessment. (2A) An application for a costs assessment may be made even if the legal costs have been wholly or partly paid. (3) An application under this section must be made within 60 days after: (a) the bill was given or the request for payment was made, or (b) the costs were paid if neither a bill was given nor a request was made. (4) An application cannot be made under this section if there is a costs agreement between the client and the other law practice." 49In the event of such an application being made, s 355(b) precludes any proceedings to recover the legal costs in issue being commenced or maintained, until the assessment is complete. Section 352 also entitles Ms Pentelow to seek an assessment of her costs, but it does not require her to do so. It provides: "352 Application for costs assessment by law practice giving bill (1) A law practice that has given a bill may apply to the Manager, Costs Assessment for an assessment of the whole or any part of the legal costs to which the bill relates. (2) If any legal costs have been paid without a bill, the law practice may nevertheless apply for a costs assessment. (3) An application for a costs assessment may be made even if the legal costs have been wholly or partly paid. (4) An application may not be made under this section unless at least 30 days have passed since: (a) the bill was given or the request for payment was made, or (b) the costs were paid if neither a bill was given nor a request was made, or (c) an application has been made under this Division by another person in respect of the legal costs." 50It follows, in my view, that it must be concluded that the 2004 Act is not structured in the way for which Bell Lawyers contends. The construction urged requires reading into s 326 a limitation which does not there appear; and which is not necessary to read in, in order to correct any apparent drafting oversight; and which is not necessary, in order to give effect to the legislative purpose revealed in s 301. It also overlooks other provisions of the legislative scheme, including critically, the relevant definitions. 51They reveal that a costs agreement may be made in respect of amounts that a person 'has been or may be charged' or 'is or may become liable to pay'. That can plainly encompass an agreement about what is to be paid for services already provided, even if provided on a conventional non-contractual basis. While at common law such past consideration may not be adequate, this statutory scheme not only permits such an agreement to be made under s 322, it permits it to be enforced under s 326. 52Section 351(1) in its terms regulates applications by a solicitor for assessment of a barrister's fees. It is this section which permitted Bell Lawyers to seek an assessment of Ms Pentelow's costs, within 60 days of receipt of her bills. Had such an assessment been sought, under s 361 the costs assessor would have been bound to undertake the assessment by reference to the costs agreements. That course was not pursued, with the result that Ms Pentelow was entitled to enforce the costs agreement, if she wished, as s 326 provides and s 319 and s 355 also contemplate, notwithstanding that the parties had not also entered a contract for the provision of legal services. 53As Campbell JA discussed in Branson v Tucker, the 2004 Act does not require a s 322 costs agreement to be a contract for the provision of legal services. It may form a part of such a contract, or it may be a stand-alone contract. In either case, a costs agreement must be written or evidenced in writing, in terms which may specify 'the type of conduct that will constitute acceptance'. Circumstances can readily be imagined where such a costs agreement is entered, which settles a dispute between the parties, the conduct signifying acceptance being specified to be the withdrawal of an application for a costs assessment. 54On Bell Lawyers' approach, even a costs agreement entered in such circumstances, would be one which could not be enforced, as s 326 contemplates. That, it seems to me, is not what this statutory scheme contemplates. 55Such an approach would also preclude a solicitor or client who has entered a s 322 costs agreement with a barrister who provided legal services on a conventional basis, from enforcing the agreement, even though the parties had expressly agreed upon the price to be paid, if legal services were provided. That is not what this Act envisages. To the contrary, it envisages that any party may enforce such an agreement. That is subject to the right given to have the costs assessed, if the statutory right to have the costs assessed is exercised. 56It follows, in my view, that there is no warrant for reading down the words of s 326 in the way urged, given the ordinary meaning of the language there used; its context in this Act and its function, consistent with the purposes specified in s 302. The unreasonable results which the construction urged would produce, also support the conclusion that it cannot be embraced. 57Even where a barrister and solicitor contemplate that legal services will be provided on a conventional basis, the Act permits them to enter into a costs agreement by which the barrister promises that he or she will accept payment for any legal services which have been or are provided at the rate agreed and the solicitor promises to pay for such services at that rate. In a case where such services have not already been provided, while the solicitor does not also promise to instruct the barrister to provide any legal services and the barrister does not promise to provide any legal services, if they are in fact later provided, even on the conventional basis, the costs agreement will then operate and may be enforced under s 326 by either party, as the section expressly permits.

The nature of the appeal 58The Local Court Act grants no right to appeal to this court on an error of pure fact. The right given by s by s 39 is to appeal, 'but only on a question of law'. Section 39 does not encompass the right to appeal a mixed question of fact and law (see R v PL [2009] NSWCCA 256; (2009) 199 A Crim R 199). Such an appeal lies only with leave given under s 40. 59Garling J discussed what constitutes an error of law in Australian Honey Exports Pty Ltd v Powell [2012] NSWSC 1090: "42 Hall J has considered the issue of what constitutes an error of fact or law in US Manufacturing Co Pty Limited v ABB Service Pty Ltd [2008] NSWSC 705 at [46]-[55]. 43 I adopt what Hall J has written and in particular [54] where his Honour says: "[54] It is clear that an error in point of law may include: (1) A finding made where there is no evidence to support it or draws an inference from facts that cannot be reasonably drawn. (2) A finding that no person acting judicially and properly instructed as to the relevant law could have made. (3) Where a Court has misdirected itself in law: Australian Gas Light Co v Valuer-General (1940) 40 SR (NSW) 126." 44 For present purposes, there is no need to distinguish between the phrase "an error in point of law" and the phrase "question of law". 45 It is to be recalled that there is no right of appeal from an error of pure fact. However, as Jordan CJ said in Australian Gas Light at 138: "(3) A finding of fact by a tribunal of fact cannot be disturbed if the facts inferred by the tribunal, upon which the finding is based, are capable of supporting its finding, and there is evidence capable of supporting its inferences ... (4) Such a finding can be disturbed only: (a) if there is no evidence to support its inferences; or (b) if the facts inferred by it and supported by evidence are incapable of justifying the finding of fact based upon those inferences ...; or (c) if it has misdirected itself in law ..." 46 That part of the decision of Jordan CJ was referred to by Kirby J in R L & D Investments Pty Ltd v Bisby (2002) NSWSC 1082 at [13] where his Honour encapsulated the relevant authorities in this way: "Arising from these authorities, a number of broad propositions can be stated: First, there is no error of law in simply making a wrong finding of fact (Australian Broadcasting Tribunal v Bond ... per Mason CJ at 341), unless there is no evidence to support that finding. Secondly, it does not amount to an error of law if the finding of fact, or the inference (or the refusal to make a finding of fact or draw an inference) is perverse, in the sense that it is contrary to the overwhelming weight of evidence: )Glass JA in Azzopardi v Tasman UEB Industries Ltd [(1985) 4 NSWLR 139] at 155). Thirdly, it is not an error of law even if the reasoning process by which the court reaches its conclusion of fact is demonstrably unsound or illogical (Menzies J in R v District Court: Ex Parte White (1966) 116 CLR 644, at 654). Fourthly, there is limited exception ... in relation to decisions of fact in the context of a statutory description. In such a case there may be an error of law if the decision on the facts is one which could not be reasonably entertained, or supported, if the tribunal had properly understood the true construction of the relevant enactment: (Mahoney v Industrial Registrar of NSW & Anor [(1986) 8 NSWLR 1] per Hope JA at 1 and Samuels JA at 5)."

The construction of the parties' costs agreements 60Whether a barrister and a solicitor have made a costs agreement, or have entered into a contract for the provision of legal services with each other, has to be determined on the evidence, in the event of dispute. It was here common ground between the parties that they had entered written costs agreements with each other, which were not contracts for the provision of legal services. 61Whether or not they had also entered any contract for the provision of legal services was in issue. There was no written contract for the provision of any legal services brought into existence. The 2004 Act does not require such a contract to be made or evidenced in writing. 62This question was resolved in Ms Pentelow's favour in circumstances where there was also no issue between the parties that the services for which the disputed invoices were rendered, had been provided. As was submitted for Bell Lawyers, the provision of the services and the rendering of the bills, did not establish that any contract for the provision of legal services had been entered. 63Bell Lawyers' case on appeal was that the three costs agreements themselves revealed that the parties had intended that Ms Pentelow would provide her services on the conventional basis and that they did not intend to enter a contract for the provision of legal services. In the result it ought to have been concluded that no other agreement was reached, in relation to the provision of legal services. 64This submission rested upon the terms of the costs agreements which provided that were not contracts for the provision of legal services. Two of the costs agreements provided that the agreement did not oblige Ms Pentelow to provide services or Bell Lawyers to retain or continue to retain her and the third that it was: "'not a retainer. It governs costs for legal services but not the provision or acquisition to legal service." 65In construing the agreements it was also submitted to be relevant to consider that there was a real advantage in a barrister such as Ms Pentelow providing her services on the conventional basis, because it protected her from being sued in relation to the services she provided. Also to be considered of course, is that this advantage may not have been attractive, so far as the other party to such a contract is concerned, particularly one who is entering an agreement to pay for the legal services provided. That consideration seems to me to throw little light on the proper construction of the agreements. 66Accepting that the proper construction of the agreements raises a question of law, in my view, given that the costs agreements were agreements entered under the provisions of the 2004 Act, it can not sensibly be inferred either from such an advantage, or from the fact that the parties did not make the costs agreement a part of a contract for the provision of legal services, that the parties thereby evinced an intention not to enter into such a contract. 67That the Act permits such stand alone costs agreements to be made, can not be overlooked. Nor can the terms of the agreements themselves. 68Contrary to Bell Lawyers' case, the written costs agreements, by their own terms, can be read consistently with the parties having in contemplation that a contract for the provisions of legal services would be entered. The costs agreements themselves expressly required that Bell Lawyers would pay Ms Pentelow for work she was instructed to perform. The first agreement, for example, referred to Ms Pentelow having been retained; provided that the agreement applied to the legal services which she provided; and specified what she was to be paid for those services. 69None of the agreements themselves imposed an obligation upon Bell Lawyers to instruct her to perform particular services, or for Ms Pentelow to perform them, but they did impose an obligation to pay for services provided at agreed rates. Such terms can not establish that another contract for the provision of such services was later entered, but they may not sensibly be construed as evidencing an intention that it would not be entered.

Other relevant evidence 70The Court's jurisdiction under s 39 rests on identification of the question of law raised by the appeal, that being what the right of appeal is limited to. What error of law this aspect of the appeal rested on, was not, however, apparent. 71The question of whether a contract for the provision of legal services was brought into existence could not be determined only upon the terms of the three written costs agreements, as was urged for Bell Lawyers. It had to be determined on all of the relevant evidence. Even if the agreements could be construed in the way for which it contended, other evidence might have established that the parties later took a different course. 72What had to be decided on all of the evidence was whether it had been established that the services in question had been provided under a legally enforceable promise, rather than on the conventional non-contractual basis. 73It was argued for Bell Lawyers that in determining whether such a contract had been made, it was necessary to consider that the law of contract between barristers and solicitors was not the general law of contract at large. That submission, it seems to me, may not entirely be accepted. While at common law the general law of contract does not apply as between barristers and solicitors, the 2004 Act, as well as its predecessor, permitted them to contract with each other about the provision of legal services. In the case of dispute, proof of the existence of such a contract depends, in the ordinary way, on establishing on the evidence matters such as authority to enter into legal relations, offer, acceptance, consideration, terms and performance. What has to be decided in a particular case depends on what the parties put in issue. 74In coming to her conclusions that such a contract had come into existence, Atkinson LCM had regard to evidence as to the parties' conduct. She concluded that the evidence established that an oral agreement for the provision of the legal services provided had been made. Contrary to the submissions advanced for Bell Lawyers, that plainly required consideration to be given to the conduct of the solicitor with carriage of the matter, Mr Aurelius and his authority to enter such a contract on behalf of Bell Lawyers, as well as that of Ms Pentelow. 75Her Honour's decision rested on the disputed facts, her Honour concluding that the evidence established that a contract for the provision of the legal provided services had been entered, for the reasons which she explained. There was plainly evidence on which her Honour's conclusions could have rested. It follows that the conclusions reached were conclusions from which no appeal is available. Even if it be accepted that the decision involved mixed questions of fact or law, it is not a decision which is amenable to an appeal under s 39 of the Local Court Act. 76Even on the case Bell Lawyers advanced, in those circumstances the cost agreements were enforceable under s 326. They obliged Bell Lawyers to pay for the services Ms Pentelow provided, as had been agreed. 77In the result, I am satisfied that the cross-appeal cannot be upheld, no error of law having been established.

Orders 78The usual order as to costs is that they follow the event. In this case that would be a costs order in favour of Ms Pentelow, as agreed or assessed. The orders reflecting the matters which the parties agreed and which I have determined appear to be an order upholding the appeal, dismissing the cross-appeal, setting aside her Honour's orders and remitting the matter to the Local Court. 79Ms Pentelow sought, however, that judgment be given in her favour, including an order for interest. That such an order is available to be made on this appeal, given the provisions of s 41 of the Local Court Act, seems to me to be questionable. 80The parties should file short minutes if the orders are agreed, or approach to be heard in the event of any dispute, within 21 days.

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: 22 February 2013

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