PM Sulcs & Associates Pty Ltd v Oliveri

LEGISLATION CITED : Evidence Act 1995 Legal Profession Act 1987

A v B [1894] 1 All ER 265 Briginshaw v Briginshaw (1938) 60 CLR 336 Bechara v Atie [2005] NSWCA 268 Boland v Yates (1999) 167 ALR 575 Boyles v McCallum (1966) 85 WN (Pt 1) 281 D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1 Doyles Construction Lawyers v Harsands Pty Ltd (NSWSC, McClelland CJ in Eq, 24 December 1996, unreported) CASES CITED : Empirnall Holdings v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 Felthouse v Bindley (1862) 11 CB(NS) 869; 142 ER 1037 Giannarelli v Wraith (1988) 165 CLR 543 Ismail v Richard Butler (a firm) [1996] 2 All ER 506 Jankowski v Mastoris (1995) 7 BPR 14589 Pavey v Matthews Pty Ltd v Paul (1987) 162 CLR 221 PM Sulcs & Associates Pty Ltd v Daihatsu Australia Pty Ltd - Costs and Interest [2001] NSWSC 798 Rust v Abbey Life Assurance Co Ltd [1979] 2 Lloyd's Rep 334 Watson v Foxman (1995) 49 NSWLR 315

TEXTS CITED : Lawyers' Professional Responsibility 3rd ed (2005) Lawbook Co

PARTIES : PM Sulcs & Associates Pty Limited ( Plaintiff) Dominic Oliveri (Defendant)

COUNSEL : R Aldridge SC/BJ Skinner (Plaintiff) GC Lindsay SC/GPF Rundle (Defendant)

SOLICITORS : Connah, Steed & Co (Plaintiff) Penelope Purcell Solicitors (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

3548/09 P M SULCS & ASSOCIATES PTY LIMITED v DOMINIC OLIVERI JUDGMENT 1 HIS HONOUR: The central issues in these proceedings are what, if any, costs agreement was made between the plaintiff and the defendant solicitor for payment of legal fees and, if a costs agreement was made, was that agreement lawful. The plaintiff had retained the defendant to act on its behalf in a substantial action for damages. Its case is that the defendant orally agreed that his fees would be 10 per cent of the damages recovered after disbursements had been paid. The defendant denies such an arrangement. His case is that the plaintiff is bound by a written costs agreement dated 5 July 1998. It is common ground that the legislation that governed the arrangements as to the legal costs payable to the defendant was the Legal Profession Act 1987. The parties 2 The plaintiff is an exempt proprietary company incorporated in 1984. From June 1991 until 1 December 2006 its directors were John Wadley Hooper and his wife Lianne Sarah Hooper. Mrs Hooper ceased to be a director of the company on 1 December 2006. Mr Hooper remains a director. There is no other director other than Mr Hooper. Mr Hooper is also the secretary of the company. He acted for and on behalf of the plaintiff in the events the subject of these proceedings. 3 The defendant is a solicitor. He was admitted to practise as a solicitor in 1982. From 1989 to 1993 he was the principal of the firm D L Oliveri & Associates. The offices of that firm were at 161 Palmer Street, East Sydney. By a sequestration order made on 23 December 1993 the defendant was declared bankrupt. In January 1994, the defendant's trustee in bankruptcy sold the defendant's practice to Messrs Di Lizio & Associates ("Di Lizio & Associates"). The defendant was employed by that firm from January 1994 until June 1996. The principal place of business of Di Lizio & Associates was at Hurstville. The defendant continued to work from the premises of his former firm at 161 Palmer Street, East Sydney. 4 In about June 1996, the defendant ceased his employment at Di Lizio & Associates. He then studied for the Bar examinations and completed those examinations and the practical course by December 1996. He was not admitted as a barrister. The defendant renewed his practising certificate in April 1997. He then resumed legal practice as a solicitor from the premises at 161 Palmer Street, East Sydney. On 29 October 1999 the defendant was discharged from bankruptcy. 5 The defendant's brother Emanueli Oliveri also practised from premises at 161 Palmer Street as did the firm of Messrs Hillman Mura & Associates ("Hillman Mura"). On occasions, the defendant was engaged by Hillman Mura to do work on behalf of the clients of Hillman Mura. An action against Daihatsu 6 In April 1993 the plaintiff commenced an action in the Common Law Division of this Court against Daihatsu Australia Pty Limited ("Daihatsu"). In that action the plaintiff claimed damages for breach of contract in relation to the provision of computer services. In the alternative, there was a quantum meruit claim for work and labour done. Changes of solicitors 7 Initially, the solicitors for the plaintiff were Messrs Watson Stafford Wilmot Klimt. In 1993 and 1994, the plaintiff paid bills as rendered by that firm. At some time in 1994 the firm Watson Stafford Wilmot Klimt dissolved. Mr Klimt continued to act for the plaintiff in the action against Daihatsu. By letter dated 20 January 1995 and sent by facsimile transmission on 1 February 1995, the plaintiff terminated its instructions to Mr Klimt and asked him to deliver the papers to the firm of Di Lizio & Associates. Di Lizio & Associates acted as the plaintiff's solicitors until August 1995. The defendant, who was then employed by Di Lizio & Associates, conducted the Daihatsu litigation on behalf of the plaintiff. On 3 July Mr Hooper on behalf of the plaintiff wrote to Mr Mario Di Lizio, the principal of Di Lizio & Associates, complaining of the defendant's conduct of the proceedings against Daihatsu. Mr Di Lizio replied to the allegations by letter dated 4 August 1995 and terminated the retainer. 8 The plaintiff then instructed Mr Miller, a member of the firm of Messrs Garland Hawthorn Brahe, to act for it. In June 1998, Garland Hawthorn Brahe terminated the retainer. The plaintiff then instructed the defendant to act as its solicitors. Judgment against Daihatsu 9 The defendant thereafter acted for the plaintiff until February 2003. The trial was heard by the Honourable Justice David Kirby. It occupied some 51 days. On 1 August 2001, Kirby J gave judgment for the plaintiff and made certain orders. On 21 September 2001, Kirby J amended the terms of the orders made on 1 August. The terms of the orders as amended were as follows: "1. Order of 1 August 2001 be amended and there be verdict for the plaintiff in the sum of $1,390,900 plus costs and interest. 2. The defendant pay 80% of the plaintiff's costs, other than the Notices of Motion for Security for Costs dated 14 December 1999 and 15 June 2000 and noting that the plaintiff will not seek to recover any costs in respect to Dr Bradley or Professor Deegan. 3. The defendant pay the plaintiff's costs in respect of the Notices of Motion for Security for Costs dated 14 December 1999 and 15 June 2000. 4. The defendant pay the plaintiff interest at the rate specified in Schedule J on the amounts Awarded as follows: (a) on $97, 500 from 19 April 1989 to date; (b) on $81,500 from 18 July 1989 to date; (c) on $1,211,900 from 4 July 1990 to date; which as a 13 September 2001 amounts to $1,879,103.86 and $419.18 for each day thereafter. 5. There be judgment for the plaintiff in the sum of $3,273,357 inclusive of interest. 6. The plaintiff has leave to apply for additional damages in respect of its possible tax liability for the amount awarded for loss of a chance ($1,211,900) and interest thereon in the event the plaintiff is assessed as liable to pay tax on either or both of these amounts. 7. The time within which to appeal against any judgment or order is extended until 28 days from today."

That order was entered on 26 November 2001. 10 The facts as so far found are not in dispute. The dispute between the parties concerns the terms on which the defendant was retained in 1998 to conduct the action against Daihatsu and, as well, a number of events that followed the orders made by Kirby J on 21 September 2001. Plaintiff pays money on account of costs 11 On 31 October 2001, Daihatsu delivered to the defendant a cheque for $3,273,357. The defendant handed the cheque to Mr Hooper on behalf of the plaintiff. Mr Hooper arranged for a special clearance of the cheque. Mr Hooper then calculated the disbursements. His calculations were set out on a four page schedule of disbursements dated 31 October 2001 ("the disbursements schedule"). The disbursements schedule began with a summary in these terms: Daihatsu Payment 30-October-2001 $3,273,357.00 Less Estimate of Disbursements -$1,163,757.00 *Disputed Accounts Due $90,850.00 Total $ 2,200,450.00

10% of above total to Oliveri Attorneys on account of their fees:- $ 220,045.00

That summary was followed by a page listing disbursements and three pages which listed fees to three barristers who had acted for the plaintiff in the action against Daihatsu. 12 On 2 November 2001 Mr Hooper handed the defendant a cheque for $220,045 together with the disbursements schedule. The plaintiff's case is that before Mr Hooper handed the defendant the cheque for $220,045, there had been an exchange of emails concerning the arrangement as to fees payable by the plaintiff the defendant. The defendant strongly denies that the exchange of emails occurred. I will return to the facts concerning this disputed exchange of emails. Claim that costs agreement is void 13 The plaintiff's case is that the defendant agreed to act on a contingency basis. It says that an oral costs agreement was made between the parties in May 1998 pursuant to which the plaintiff would pay the defendant an amount equal to 10 per cent of the amount recovered by the plaintiff in the action after disbursements had been paid. In these proceedings, the plaintiff claims, amongst other things, that the agreement as to costs is contrary to s 184 and s 188 of the Legal Profession Act and is void. It seeks recovery of the sum of $220,045. The defendant denies that he entered into an agreement to accept 10 per cent of the amount recovered after disbursements. He admits that he agreed to act on a contingency basis but says the parties had entered into a written costs agreement dated 5 July 1998 to the effect that, if the plaintiff was successful, he was to be paid at an hourly rate of $500 per hour. 14 After that brief introduction I shall now examine the facts in greater detail. Before doing so, I comment on the reliability of the various witnesses who were called. The witnesses 15 A number of the events that are critical in this action occurred some 10 years ago. Others occurred at least five to seven years ago. Some of the witnesses and in particular Mr and Mrs Hooper and the defendant purported to give detailed accounts of certain conversations, even long conversations, that were said to have occurred as long as 10 years ago. In his reasons in the Daihatsu litigation, Kirby J referred to the remarks of McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 319: "… Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience."

I respectfully agree. Those remarks have a particular application where a witness has no diary or other note of a conversation or any other kind of document that might refresh memory. 16 The plaintiff called seven witnesses, Mr and Mrs Hooper, Mr Smallbone, Mr Tatar, Mr Santa Maria, Mr Black and Ms Evers. 17 Mr Hooper was a most unsatisfactory witness. Quite often his answers were either evasive or not responsive. At one stage he gave evidence implying that he did not know the difference between solicitor and client costs and party and party costs. Later questioning disclosed that he clearly knew the difference. On some occasions he purported to give a verbatim account of conversations that had occurred seven or more years ago. In my view such detailed recall is highly unlikely particularly as he made no notes or other record of those conversations. On occasions, his evidence did not ring true. On several occasions he sought to argue his case from the witness box and on others he took the opportunity to make gratuitous and insulting remarks about the defendant or his legal advisors. I allow for the fact that Mr Hooper might have been anxious in the witness box but that fact did not in any respect excuse his behaviour. In every respect his evidence must be subjected to close scrutiny. I am not prepared to accept his evidence unless it is substantiated by other evidence or is otherwise consistent with objective facts. I find that I cannot believe much of his evidence. 18 Mrs Hooper too was not a convincing witness. She has a financial interest in the outcome of the proceedings. She too purported to be able to recall details of conversations that had occurred some years before. She had no notes or other record of those conversations. She was in my view willing to say whatever was thought necessary to support the plaintiff's case. As with her husband, I am not prepared to accept her evidence unless it is substantiated by other evidence or is otherwise consistent with objective facts. 19 Mr Tatar was a most unsatisfactory witness. He gave his evidence in a supercilious manner. He has convictions for dishonesty. He has no financial interest in the outcome of these proceedings. Nevertheless, I am unable to rely on his evidence at all. 20 Mr Smallbone, a barrister, gave his evidence carefully. It was not challenged. I have no hesitation in accepting his evidence. 21 Mr Santa Maria gave evidence on one small aspect of the manner. I accept his evidence. Mr Black is employed by Deloitte Touche Tohmatsu of the Sydney office of that firm. His duties include forensic examination of computer hardware. He gave evidence of his examination of the hard drive disc belonging to the defendant. His evidence was thorough and I accept it. Ms Evers gave evidence as to solicitors' costs. She has experience as a costs assessor and I accept her evidence. 22 The plaintiff's solicitor Mr Brown swore two affidavits. He was not cross-examined on either. I accept his evidence. 23 The defendant, Mr Oliveri, gave evidence and called three witnesses, Mr Di Lizio, Dr Bradley and Mr Gaweda. 24 The evidence of the defendant was not entirely satisfactory. The manner in which he conducted aspects of his legal practice at material times was not at all satisfactory. He did not always prepare costs agreements with his clients. In the plaintiff's action he failed to keep timesheets or other records of the time spent on the matter and did not regularly keep any other form of costs entry. He prepared a party and party bill of costs in the Daihatsu action without the benefit of costs entries or a costs sheet, relying on documents such as emails and other correspondence, diary records of conferences with counsel and with witnesses and of days spent in court. He swore an affidavit stating that he was charging at the rate of $400 per hour plus GST. The costs agreement dated 5 July 1998 on which he seeks to rely is inconsistent with that, in that it provides that his charges are $500 per hour. While any shortcomings in the conduct of his legal practice do not necessarily reflect upon his credit, those shortcomings when coupled with the inconsistency between his affidavit and the alleged bill of costs give rise to real concerns about the reliability of his evidence. For these reasons, his evidence must be subjected to close scrutiny and should not be accepted unless it is consistent with objective facts or is otherwise consistent with other evidence. His demeanour in the witness box was, however, more impressive than that of Mr Hooper. Notwithstanding that I do not always accept Mr Oliveri's evidence, his evidence is more consistent with the objective facts than that of Mr Hooper. 25 Mr Di Lizio gave his evidence forthrightly. On a number of occasions he was asked about events said to have occurred in 1995 but he did not have any recollection of them. That is not surprising given that he is a solicitor in active practice and that 14 years have elapsed since those events and conversations were alleged to have occurred. I accept his evidence. 26 I accept the evidence of Dr Bradley. He too was forthright in the manner in which he gave his evidence. It was suggested that he had an interest in this litigation. I entirely reject that evidence for reasons to be given. 27 Like Mr Black, Mr Gaweda is a person whose occupation is the forensic examination of computers. His evidence was persuasive and I have no hesitation in accepting it. 28 Evidence for the defendant was also given in affidavit form by Ms Anne Lampe, Ms Louise Butler and Ms Penelope Purcell. Their evidence was not disputed and I accept it. The defendant also relied on a report from Ms Michelle Novotny dated 27 May 2008 whose evidence I also accept. 29 In these reasons, I do not deal with every item of evidence. I have read and re-read the affidavits of all witnesses in conjunction with the transcript of proceedings. Counsel had agreed that all of the evidence in the affidavits should go in saving all just exceptions. The fact that I have not mentioned every assertion of fact does not mean that I have overlooked it. Some of the assertions are irrelevant. Others are inadmissible or do not materially assist in the determination of the issues in these proceedings. In reaching my conclusions, I have had regard to all of the evidence. Oliveri acts for plaintiff 30 I now turn to examine the facts in greater detail. The narrative represents the facts as I find them. Where there is a dispute as to certain facts, I will mention that the fact is disputed. In this narrative I refer to Mr Hooper, the defendant and other witnesses by their respective surnames without meaning any disrespect to any of them. 31 Oliveri had acted for Hooper or for companies controlled by Hooper since the time when Oliveri had been employed by Di Lizio & Associates. At different times between 1994 and 1997 Oliveri acted for companies controlled by Hooper. 32 On 14 January 1994, Hooper instructed Oliveri to conduct proceedings in this Court on behalf of Bedor Ltd, a private company incorporated in Hong Kong. Hooper's evidence was that Oliveri told Hooper that his fees would be $80 per hour but that he was prepared to run the proceedings for a fixed price and he charged a fixed price. Oliveri denied that he charged Hooper at the rate of $80 per hour. It is extremely unlikely that an employed solicitor would then charge at such a low rate. Furthermore, Oliveri was then employed by Di Lizio & Associates. It is unlikely that his principal would have permitted him to charge at such a low rate. I reject Hooper's evidence that Oliveri charged for his services at the rate of $80 per hour. 33 It was Hooper's evidence that Oliveri did not render any account for legal services performed by him before 2003. That is denied by Oliveri. I do not accept Hooper's evidence. On occasions Oliveri prepared costs agreements with his respective clients but did not always do so. Plaintiff instructs Di Lizio & Associates 34 In 1994 Hooper began to speak to Oliveri about the plaintiff's action against Daihatsu. He told him Mr Klimt was acting for the plaintiff. At some stage in 1994 he handed to Oliveri some bundles of documents concerning the action. Oliveri read them and told Hooper, among other things, that he thought that the plaintiff had "a clear case on quantum meruit and unless Daihatsu claims that there is some other contract, it seems to me that you have a case of breach of contract against Daihatsu".

At this time Oliveri was employed by Di Lizio & Associates. The principal of that firm was Mr Mario Di Lizio. Oliveri said that he would ask Mario Di Lizio if he would consent to Oliveri acting for Hooper on a contingency basis, that is to say, to act for the plaintiff on a "no win no pay basis" to use Oliveri's words. 35 Early in January 1995 Hooper delivered to Oliveri four bundles of documents relating to the action against Daihatsu. On 10 January 1995, Hooper wrote to Oliveri at Di Lizio & Associates confirming that he delivered four bundles of documents to him. In that letter he asked if Di Lizio & Associates would take over the conduct of the matter on a "no-charge-unless-successful basis". Oliveri informed Hooper that Mario Di Lizio had no objection to Oliveri acting for the plaintiff on the basis that no fee would be charged if the plaintiff failed in the action. Oliveri and Hooper then discussed the fees to be paid. Hooper and Oliveri gave differing evidence as to the effect of their conversations on the topic of fees. It is apparent from the correspondence exchanged between Hooper on behalf of the plaintiff and Di Lizio & Associates that the fees to be paid by the plaintiff were not agreed. The correspondence (to which I am about to refer) is more consistent with the evidence of Oliveri. I do not accept Hooper's evidence that the question of fees was agreed. 36 By letter dated 18 January 1995 from Hooper to Oliveri, Hooper confirmed that Di Lizio & Associates had agreed to act "on a no-charge-unless- successful basis". The letter continued: "The agreement between us is that we will pay any court filing fees as they arise and on a successful conclusion, your fees will be at a rate of up to $500 per hour and that a fully defended case running in court over 3 weeks will costs us in your fees and senior council (sic) fees the total sum of $300,000.00.

Based on this agreement we are instructing our current solicitors, Klimt & Associates that your firm will be taking over this matter as of today and that they are to pass on the file to you immediately.

Please accept this letter as your instructions to act in this matter." 37 Oliveri, as an employee of Di Lizio & Associates, replied by letter dated 19 January in these terms: "Thank you for your letter of 18 January 1995. We confirm that the contents of your letter in so far as they relate to this firm's fees. However as far as barristers' fees are concerned we will endeavour to instruct a barrister that will accept instructions on the same basis. Otherwise we will attempt to negotiate an acceptable arrangement for you. In any event this will need to be reduced to writing by the barrister in due course. In the agreement between you and our firm the word "successful" should be defined because as pointed out by you there are two strands to your case. 1. DAMAGES 2. QUANTUM MERUIT If you are successful in the DAMAGES claim (either by a verdict or by an out-of-court settlement, then the rate of $500.00 per hour applies. If you are unsuccessful in the DAMAGES claim but you are successful in the QUANTUM MERUIT claim, then the rate of $250.00 per hour applies. Please confirm that this is acceptable to you." 38 Hooper replied with a counter-offer as to the costs to be paid. The counter-offer is set out in letters to Di Lizio & Associates dated 27 January and 29 January 1995. They contained an offer to pay as much as $2000 per hour if the plaintiff recovered 75 per cent of its claim. The rate per hour fell in proportion to a fall in the percentage of the claim recovered. Oliveri did not reply to those letters and Hooper sent two more letters dated 9 and 10 February 1995 with an amended counter-offer but those letters were not answered. I accept Oliveri's evidence that he did not respond to those letters because he thought they made unrealistic proposals. The arrangements proposed by Hooper bordered on the fantastic. Hooper also gave evidence that on about 10 February 1995 he spoke to Oliveri and Mario Di Lizio as to the terms on which the plaintiff would retain Di Lizio & Associates. He said that Di Lizio had said: "I prefer that we continue with the existing arrangements and you pay $80 an hour for Dominic's time. I don't want to be putting my money into funding litigation."

I reject this evidence. I have already given reasons why I do not accept Hooper's evidence that Oliveri provided legal services at the rate of $80 per hour. In addition, the evidence is wholly inconsistent with the earlier exchange of correspondence between Oliveri and Hooper and is at odds with Oliveri's letter of 19 January. I find that no costs agreement was made between Di Lizio & Associates and the plaintiff. 39 On 25 January 1995 Hooper signed a document addressed to Mr Klimt asking for delivery of the plaintiff's file and documents to Di Lizio & Associates. The document was sent to Mr Klimt by facsimile transmission on 1 February 1995. Mr Klimt ceased to act and Di Lizio & Associates became the solicitors on the record. 40 Oliveri then drafted an amended statement of claim which was filed on 28 March 1995. The damages claimed by the plaintiff (including interest) totalled $702,306,172. The original statement of claim had claimed damages for breach of contract in an unspecified amount. In the alternative, it made a claim for $191,998 for what it alleged had been the reasonable costs of works and services supplied by the plaintiff to Daihatsu. 41 In June 1995 Messrs Clayton Utz, the solicitors for Daihatsu, wrote to Di Lizio & Associates threatening an application for security for costs. The application was grounded on the fact that the plaintiff had not lodged its financial returns and it was alleged that the plaintiff did not have any assets. Oliveri showed the letter to Hooper who said that the plaintiff was an exempt proprietary company and was not obliged to file financial statements. Oliveri did not reply to the letter from Clayton Utz. Clayton Utz then issued the threatened application for security for costs. 42 In July 1995 Oliveri took one week's leave. While Oliveri was on leave, Hooper wrote a letter dated 31 July 1995 to Mario Di Lizio. In that letter he complained of the conduct of Oliveri. One of those complaints was that Oliveri's failure to respond to the letter from Clayton Utz had caused the application for security for costs to be made. On his return, Oliveri was informed of those allegations. Mario Di Lizio replied to Hooper by a three page letter dated 4 August 1995. The letter included a reply to the criticisms made by Hooper and terminated the retainer. At the end of the letter he said: "More importantly as to the whole conduct of this matter it is clear from your letter that you are not satisfied with the conduct of your case. Further it is clear from you (sic) letter at this stage of proceedings you believe that our firm is responsible for an action or inaction which may have caused you damages. Whether or not this view is correct is not particularly relevant, the important aspect is that you believe it to be so. In such circumstances it is not possible in my view to represent you.

In order to avoid any prejudice to your case we will continue to represent you until the matter of the application for costs is heard or otherwise resolved. If you so wish, however, you may request the return of your file immediately and appoint other representatives forthwith."

Di Lizio & Associates did not render any memorandum of fees on the termination of the retainer. When asked why in cross-examination, Mario Di Lizio said that he did not think the plaintiff would pay the fees and he did not wish to be involved in litigation with Hooper or the plaintiff. I accept his evidence. Plaintiff instructs Garland Hawthorn Brahe 43 Hooper then instructed Messrs Garland Hawthorn Brahe to act for the plaintiff. Mr Brenden Miller of that firm had the conduct of the matter. That firm was prepared to act on either a non-contingency basis or on a contingency basis. The fees agreement is set out in a letter dated 24 October 1995. It is sufficient to note that Miller's fees on a non-contingency basis were to be charged at the rate of $225 per hour (and at $165 per hour for a junior solicitor). If the fees were to be charged on a contingency basis, the fees arrangement as set out in a letter was: "2. Contingency:

(i) Should any part of the quantum merit (sic) claim succeed. - $400.00 per hour for the writer. - $200.00 per hour for any junior solicitor assisting.

(ii) Should any part of the damages claim succeed. - $500.00 per hour for the writer. - $250.00 per hour for any junior solicitor assisting." (Original emphasis). The plaintiff agreed to the fees agreement on a contingency basis. 44 Notwithstanding the termination of the retainer by Di Lizio & Associates, Oliveri and Hooper remained friends. They met for coffee in Giottos or the Arch Coffee Lounge, each being a coffee shop in Stanley Street, East Sydney. On those occasions Hooper informed Oliveri of developments in the action against Daihatsu. Occasionally they met for dinner with their respective partners. A friendship developed between them. 45 In the period after 1995 Oliveri continued to act for Hooper and his companies. One matter in which Oliveri acted was an action in the Federal Court of Australia by the plaintiff against Detroit-Diesel-Allison Australia Pty Ltd and Others. He was not the solicitor for the plaintiff when the action was commenced. He became its solicitor at some time in 1997. In these proceedings, Hooper and Oliveri referred to that action in the Federal Court by the expression "the DETCO proceedings" or by a similar expression. I will refer later to the DETCO proceedings. 46 Garland Hawthorn Brahe continued to act for the plaintiff in its action against Daihatsu until June 1998. In 1998 differences arose between Hooper and Miller concerning the conduct of the action. In addition, Garland Hawthorn Brahe sought to alter the terms on which they had been retained. On 4 June 1998 Miller gave the plaintiff notice that he would cease to act as the plaintiff's solicitor. Plaintiff instructs Oliveri Attorneys 47 By July 1998, Oliveri was acting as the solicitor for the plaintiff in the action against Daihatsu. 48 Oliveri and Hooper gave different accounts as to the circumstances in which Oliveri agreed to act and as to the basis on which his fees were to be paid. Before noting their respective accounts, I set out facts that are not in dispute or that are established by objective facts. On 7 May 1998 Hooper sent a draft letter to Oliveri in response to a letter from Garland Hawthorn Brahe in which it sought to alter the terms on which that firm was to be retained by the plaintiff. Hooper asked Oliveri for his comments on the letter. On or about 20 May 1998 Hooper showed Oliveri a memorandum of fees from Garland Hawthorn Brahe and asked for his advice about paying those fees. Oliveri advised Hooper that the plaintiff should pay the disbursements. The plaintiff paid the disbursements. 49 On 4 and 5 June 1998, Miller and Hooper had an exchange of letters by email or facsimile transmission. On 4 June Hooper had delivered to Miller affidavits filed on behalf of Daihatsu and his answers to them. I find these documents were delivered in the morning. At 2.49 pm on 4 June Miller sent a fax to Hooper giving notice that he intended to file a notice that he had ceased to act for the plaintiff. Hooper responded with a request that the plaintiff's documents be returned. The letter included the following: "Nothing of significance has occurred since your decision to continue with the case other than our delivery to you of the affidavits and responses thereto. Further more, all communication with you since your decision to continue has been in written form as Mr. Hooper has been working non-stop in order to complete the responses to the defendants (sic) affidavits as you can see, there is over 100 pages in the response.

Naturally, we are disappointed with your decision to withdraw from the case. We will of course require the return of all documents in a timely manner so that we may instruct a new firm of solicitors. It would be appreciated if you would have our complete file ready for collection before you file a Notice of Ceasing To Act so that we may arrange for our incoming solicitors for file their required notices."

Miller replied by a letter to Hooper dated 5 June 1998. The letter reads: "I refer to your facsimile of the 4th inst.

I acknowledge receipt of the box of documents which you handed to me yesterday afternoon. Prior to you giving those documents to me I indicated that it was in my intention to cease to act in the proceedings. Nevertheless your (sic) insisted that I take the documents. I disagree that nothing of significance has occurred since my decision in May to continue with the case other than the deliver of the affidavits in your response. Quite clearly I have attempted to obtain from you information regarding the various complaints you have made against me and/or the firm concerning negligence, delay, mismanagement and our costs. You still even today have failed to address those issues. As indicated I am presently copying the files for my records. I will advise when this has been completed. You have failed to address the question of the payment or the securing of our costs prior to our handing the file to other solicitors. I would have thought, given your quantum meruit claim against Daihatsu, you would have appreciated our right to be paid for work done to date. A bare reference to our retainer agreement does not address this issue any way satisfactorily. As a business man yourself I cannot understand how you expect me to deal with you on a commercial basis when you dispute the fees charged and fail to address the issue of payment of those fees or securing our costs in the sitatuion (sic) where you wish us to promptly release your file. This is not a matter that can be put on hold if you want the files released. I look forward to hearing from you in respect of some proposal regarding payment or the securing of our costs." 50 On 10 June 1998, Hooper sent a letter by facsimile transmission to Garland Hawthorn Brahe seeking return of the plaintiff's documents. The documents were not returned. 51 By July 1998, Oliveri was acting for the plaintiff. Hooper instructed Oliveri to issue proceedings seeking an order that Miller give up all documents held by him relating to the action against Daihatsu. Those proceedings were issued on 27 July 1998. About one month later, Miller returned the plaintiff's documents. 52 Under cover of a letter dated 19 June 1998 the plaintiff had sent an application to Justice Corporation, a funder of litigation, for assistance in the payment of counsels' fees in the action against Daihatsu. In that letter which was written by Hooper, it was stated that the plaintiff had instructed Oliveri to act for it on "a no-win-no-pay contingency basis". Justice Corporation refused the plaintiff's application. 53 The above facts are not in dispute. I now set out the different accounts of the Hoopers and Oliveri as to the terms on which Oliveri agreed to act for the plaintiff. 54 Oliveri gave the following account. On about 7 May 1998, Hooper came to see him and asked him to act for the plaintiff. Oliveri replied that he could not manage a case of that magnitude. Hooper denied this conversation. 55 According to Oliveri, when Hooper consulted him concerning the memorandum of fees from Garland Hawthorn Brahe, he advised Hooper to pay the disbursements and also advised him to mend his relationship with Miller so that Miller would continue to act for the plaintiff. 56 Oliveri said, that after Hooper had received by facsimile transmission the notice dated 4 June 1998 from Miller advising his intention to terminate the plaintiff's retainer, Hooper showed it to him. They then had a conversation in which Hooper asked him to act. Oliveri replied that he could not afford to take on the action and again suggested to Hooper that the plaintiff seek to persuade Miller to continue to act. Oliveri's evidence was that Hooper and he had an exchange to the following effect: "Hooper: 'No, he told me he doesn't think I can win. That's the real reason he is stepping out of the case. He has already charged more than the $50,000 he would be entitled to if I lose the case. I can't work with him any more. You take on the case and I will pay you on the same basis as the deal I have with Brenden.' Oliveri: 'I know I'll regret it, but why don't you collect your file from Brenden and if you can't find someone else to do your case, I will do it. I will prepare a costs agreement after I get the file.'"

Hooper denied this conversation. 57 Miller did not release the file. According to Oliveri in mid June 1998 Hooper again spoke to him and said words to the effect: "Hooper: 'Will you act for me? I can't find any one else. Why don't we agree to work on the same costs agreement that I have with Brenden until we get the file and then we can enter into another agreement.' Oliveri: 'OK. We had better get the file as quickly as possible.'"

Hooper denied this conversation. Thus, the effect of Oliveri's evidence was that he agreed to act for the plaintiff on the same terms as Garland Hawthorn Brahe until he prepared a fresh costs agreement. 58 Hooper's evidence in his affidavit of 22 June 2004 was that in late May 1998 Oliveri and he had a conversation which he described in these terms: "The Defendant said words to me to the following effect: This claim is worth hundreds of millions. I will act for the company and my fees for representing it will be ten per cent nett of the amount that might be recovered against Daihatsu Australia Pty. Limited from the litigation after paying all disbursements." I said to the Defendant words to the following effect:- 'Does that mean if we settle the claim for fifty million dollars tomorrow you will get about five million dollars tomorrow?' The Defendant said:- 'Yes. I don't want to go on the records yet because I'm not out of my bankruptcy. Just hang in there for a while and when I'm discharged I'll take it over.' The Defendant also said words to the following effect:- 'But you will have to work for me in my office on these proceedings and on any other matters of mine that I may ask you to work on while I'm acting in this matter. I won't be able to pay you wages or anything, but now you'll have to work full time. I'll check what you do.' I said words to the following effect:- 'You know I have limited funds so I am happy to accept that arrangement.' I already had in place a similar arrangement with the Defendant in respect of other proceedings commenced by the Plaintiff in 1997."

Oliveri denied that a conversation in those terms occurred. 59 Hooper's evidence was that Oliveri agreed to act for 10 per cent of the amount recovered after disbursements had been paid. He said the arrangement was very similar to the fees arrangement already in place in respect of the DETCO proceedings. Hooper said that Oliveri agreed to those arrangements and became the solicitor on the record. The plaintiff's letter to Justice Corporation dated 19 June 1998 included the sentence: "As we have an arrangement with Mr Oliveri concerning the solicitor's fees, we are seeking the assistance of JUSTICE CORPORATION PTY LTD with our counsel's fees. "

I find that the only arrangement between the plaintiff and Oliveri in respect of Oliveri's fees at that time was the arrangement that Oliveri would act for the plaintiff on the same terms as Garland Hawthorn Brahe. That was an oral agreement. It was not enforceable unless it was later reduced to writing. I deal later with the question whether the plaintiff and Oliveri entered into a written costs agreement. 60 Whatever the terms of the retainer, it is clear the plaintiff had retained Oliveri to act as its solicitor before 27 July 1998. That is apparent from the fact that Oliveri had filed two documents on behalf of the plaintiff on 27 July 1998. One was the summons seeking orders that Miller deliver up the plaintiff's documents relating to the Daihatsu. The other was an offer of compromise that Oliveri served on the solicitors for Daihatsu, offering to compromise the action for the sum of $7,500,000. 61 In an affidavit sworn 3 May 2006, Hooper deposed to a conversation which he alleged that he had had with Oliveri and Mario Di Lizio on 20 July 1998 at the corner of Stanley Street and Palmer Street, East Sydney. According to Hooper, Di Lizio had asked what had been agreed as to Oliveri's costs in the Daihatsu litigation and that Oliveri had replied, "10 per cent of whatever net amount John gets either by settlement or judgment". Hooper added an explanation of what Oliveri had said and, according to Hooper, Di Lizio then said, "10 per cent sounds fair then". Di Lizio convincingly denied this allegation in cross-examination. Oliveri also denied the conversation. He said that he was not at any time at the corner of Stanley and Palmer Streets on 20 July 1998 because he was required to attend throughout that day at the Administrative Appeals Tribunal. There is evidence in the plaintiff's documents that Oliveri was before that tribunal on 20 July 1998 in proceedings concerning his bankruptcy. I unhesitatingly reject Hooper's evidence and find that no such conversation occurred on 20 July 1998. An offer of compromise 62 Both Hooper and Oliveri described the circumstances which led to the offer of compromise. Oliveri's evidence was that the Hoopers came to his office and instructed him to make the offer. Hooper's account is long and to the effect that Oliveri agreed to an amount that was based on Oliveri receiving 10 per cent of the amount of the offer, namely, $700,000. The offer was $7,500,000. Oliveri denied that account saying that he had simply advised Hooper that it was be desirable to make an offer of compromise. The day after he had given that advice, the Hoopers came to his office and instructed him as to the amount they wished to offer. The account given by Hooper has a real air of unreality. I do not accept it. It has all the hallmarks of an attempt to embellish the plaintiff's case. I am encouraged to reach that conclusion by the fact that Hooper alleged that Oliveri had said at the meeting at which the offer was discussed, "After I have paid Bradley 10 per cent of whatever I get I will clear over $600,000". Dr Bradley was an expert retained to act for the plaintiff in the Daihatsu action. The plaintiff alleged that he was retained on a contingency basis. That is denied by both Oliveri and Dr Bradley. I accept their denials. The offer of compromise was served on 27 July 1998. I find that Dr Bradley was not then instructed by Oliveri. He was not instructed to act until later by letter from Oliveri dated 21 September 1998. That letter refers to previous conversations between Oliveri and Dr Bradley but, when the letter is read as a whole, it is reasonable to find, as I do, that those conversations had occurred shortly before the letter was written. They did not occur before 27 July 1998. Furthermore, the letter notes that Dr Bradley's fees were to be $500 per hour. I find that was the basis upon which Dr Bradley rendered a note of his fees. The letter of 21 September 1998, therefore, establishes that Dr Bradley had not been retained when the terms of the offer of compromise were being considered by Hooper and Oliveri. Furthermore, it supports the evidence of both Oliveri and Dr Bradley that Bradley was not being paid on a contingency basis. Hooper's response to the letter of 21 September 1998 was to assert that that letter was "created by the defendant on" 1 February 2000 at 10.01.42 pm. The allegation was denied. The plaintiff did not point to evidence to support the allegation. Neither Oliveri nor Dr Bradley were asked any questions in cross-examination concerning the date when the letter was written. I unhesitatingly reject the allegation by Hooper. 63 Oliveri acted for the plaintiff in the proceedings against Daihatsu from July 1998 until judgment. He continued to act for the plaintiff in those proceedings until February 2003 when disputes arose between Hooper and Oliveri. By 27 February 2003 Messrs Connah Steed & Co were acting as the solicitors for the plaintiff and shortly thereafter filed a notice of change of solicitors in the Daihatsu action. Hooper assists in preparing the case 64 It is common ground that Hooper worked with Oliveri on the preparation of the plaintiff's case against Daihatsu. Hooper worked in Oliveri's office on most working days and spent long hours working on the matter. As Oliveri said in cross-examination, Hooper worked full time on the case and was in his office "almost every day for a full day". His work included typing letters from time to time, filing and serving documents and delivering briefs. Hooper would draft some documents which were then settled by Oliveri. Hooper also did a good deal of the photocopying in Oliveri's office. If it was necessary to photocopy a large number of documents, Hooper would take the documents to a copying office. The plaintiff paid all fees incurred by Hooper when documents were photocopied by an organisation outside Oliveri's office. The plaintiff also paid all other disbursements save the fees payable to two expert witnesses. On occasions, Hooper attended court to instruct counsel and he attended throughout the hearing of the action against Daihatsu. 65 Hooper had access to the files in the Daihatsu proceedings and to the computer network in Oliveri's office. He provided Oliveri with technical support in using the computers and instructed Oliveri in some computer skills. There is a dispute as to the extent to which Hooper had access to the computer system. It is unnecessary to resolve that dispute. It is common ground that Hooper scanned both his own signature and that of Oliveri into the computer system so that letters could be sent electronically and taught Oliveri how to use the electronic signatures. Hooper said that he taught Oliveri how to change the date of time on the computer. Oliveri denied that. I accept his denial.

Judgment against Daihatsu 66 The hearing of the action against Daihatsu occupied some 51 days between 1 November 1999 and 30 April 2001. On 1 August 2001 Kirby J delivered judgment and made certain orders. He reserved for later submissions the orders to be made in respect of costs and interest and allowed the parties to make submissions on other outstanding issues. The action was listed before Kirby J again on 17 August and on 30 August 2001. On 13 September 2001 he published further reasons. The final orders were made on 21 September 2001. A costs agreement is prepared 67 Oliveri gave evidence that, on 1 August 2001 after Kirby J had delivered judgment, he and Hooper returned to his office and he then prepared a costs agreement between his firm and the plaintiff in respect of the costs of the action against Daihatsu. I find he had not prepared any prior written costs agreement in respect of that action. Oliveri's evidence was that Hooper took a copy of the document with him. Hooper denied this evidence. For reasons given below, I find that Hooper did make a copy for himself. The costs agreement has not been executed. It is dated 5 July 1998. Given the importance of this document in these proceedings, I set out relevant parts of the alleged agreement. " COSTS AGREEMENT BETWEEN SOLICITOR AN CLIENT

Date: 5 July 1998 Thank you for your instructions to act for you in this matter. We are required by the Legal Profession Act ("the Act") to set out the terms of our engagement which are as follows: The Work 1. The work you require us to do is as follows: (a) Prepare and prosecute your case in the Supreme Court of New South Wales for damages suffered for breach of Contract by Daihatsu including loss of a chance as a result of that breach. (b) Note that the matter has been commenced in 1993 by another firm by Peter Klimt and that Dominic Oliveri assumed conduct of the matter in 1995 and that the file is currently with Brendon (sic) Miller of Garland Hawthorne (sic) Brahe and that there may be difficulty in collecting the file from Garland Hawthorne (sic) Brahe which difficulties might cause delay in the prosecution of the case. Charges and expenses 2. We will charge you: (a) at the rate of $500.00 per hour for each hour that a lawyer is engaged on the Work (b) when calculating costs the calculation will [be] based on a minimum charge to the value of 6 minutes (or 0.1 of an hour) for any activity carried out on your behalf even if the duration of the activity is less than 6 minutes. (c) or at a fixed rate (b)(sic) We will incur expenses on your behalf, which we will ask you to pay. They will include: s photocopying at $2.00 per page s telephone and facsimile charges at $2.00 (local), $5.00 per minute (STD) $10.00, per minute (international). Present estimate of charges and expenses in total 3. We estimate that our charges for completing the Work, up to and including 20 days in Supreme Court. This is on the assumption that the matter is not settled beforehand. will be about $900,000.00 We expect to complete the Work by END OF 1999. To that point, we estimate the expenses that we will incur on our behalf will total about $400,000

Total $1,300,000 We will advise you of any additional work required beyond the point indicated and of its estimated cost. Persons responsible for work 4. Mr. Dominic Oliveri will be responsible for the Work. All communications to the firm should be addressed to Mr D. Oliveri . Billing arrangements 5. We agree that payment of fees to us is conditional upon you being successful in your claim and actually receiving payment of verdict moneys. We may ask you to pay to us an amount to enable payment of expenses, or to provide security for them and our charges. In that case, we will assume, upon receipt of your payment, your authority to draw on the money paid for out charges and expenses, as they become due. We will also assume your authority is given for any judgement or settlement moneys to be paid directly to our trust account and to pay ourselves from this money immediately after sending you our bill of costs."

It is necessary to note also the terms of clauses 11 and 12. " Commencement of work 11. We will begin the Work promptly when we receive your instructions subsequent to delivery to you of this costs agreement. Acceptance of this offer You may accept this offer by: 12. signing and delivering to us the attached duplicate; or advising of accepting in writing; or advising of acceptance orally; or giving us instructions to commence the Work."

It will have been noticed that the agreement is not only backdated but purports to forecast what will happen in the action, matters which Oliveri knew on 1 August 2001 had already occurred. For convenience, I will call it "the backdated costs agreement". 68 Hooper's evidence was that he did not at any time accept the terms of the backdated costs agreement on behalf of the plaintiff. He denied that he took a copy of it with him. His evidence was that, after Kirby J had delivered judgment on 1 August 2001, he returned with Oliveri to Oliveri's office. He said that they discussed the basis upon which the bill of costs against Daihatsu would be prepared. His evidence was that Oliveri said the bill would be drawn on the basis of back-to-back agreements that had been agreed. I will return to the question of back-to-back agreements. I later find that Oliveri prepared the backdated costs agreement on 1 August 2001 and Hooper had a copy of it. 69 Oliveri swore an affidavit to be used at the hearing before Kirby J on 17 August 2001 when issues as to costs and interests were to be argued. The affidavit was sworn on 16 August 2001 before Hooper who is a Justice of the Peace. Hooper agreed that he had read the affidavit at the time he attested the affidavit. In that affidavit, which contains 17 paragraphs, Oliveri gave a short history of the proceedings, listing each of the four firms who had acted for the plaintiff. The bulk of the affidavit contained estimates of fees and disbursements. In para 13 of the affidavit Oliveri stated that his fees were $400 per hour plus GST. GST had commenced to operate on 1 July 2000. 70 Hooper gave evidence that "some weeks later" Oliveri amended the affidavit without Hooper's knowledge and sent copies to Kirby J, to the solicitors for Daihatsu and to counsel for the plaintiff. He said that he was pressured by junior counsel for the plaintiff to witness it. He said that the affidavit was filed. There was no evidence that a later affidavit was filed. The papers attached to Mr Black's report contain the form of an affidavit to be sworn on 27 August 2001. It appears that this was the affidavit to which Hooper referred. However, it was not done "some weeks later" as Hooper asserted. There was no evidence that this affidavit was used in the proceedings before Kirby J. I reject Hooper's evidence that the earlier affidavit was amended without his knowledge and that he acted under pressure. It was an allegation made late and lacked supporting evidence. If the allegation was true, it could have been supported by evidence of what had occurred at the hearing on 30 August. I note, however, that in paragraph 14 of that affidavit Oliveri again stated that his fees were $400 per hour plus GST. An alleged supplementary fees agreement 71 Some 28 days after the date of the final orders in the Daihatsu action, Oliveri caused a statutory demand for the judgment debt to be served on Daihatsu. Oliveri's evidence was that on about 30 October 2001 he and Hooper then had the following conversation: "Hooper: 'I know you're entitled to get paid your fees now, but I really need some money urgently. I am going to get 80% of my costs paid from Daihatsu so there will be enough there to cover your fees and more. If you give the money to me when you receive it and wait for your fees until I receive them from Daihatsu, I will give you 10% of the net amount of the judgment on top of your fees.' Oliveri: 'If I understand you correctly, I don't think I am allowed to do that.' Hooper: 'I can give you extra money if I want to and I want to give it to you any way.' Oliveri: 'When do you propose to give me the 10% extra?' Hooper: 'As soon as I pay out all the outstanding bills, I'll give you 10% of what is left.' Oliveri: 'I accept on the basis that you pay out all the outstanding fees to the barristers as soon as you get the money and that you help me prepare the bill quickly so that it can be assessed without delay.' Hooper: 'I want to do that as much as you do. The barristers have done a great job and they deserve to get their money. You and I have been through a lot together. You know I always honour my agreements.' Oliveri: 'If you tell me that you will do that I accept your word.'"

Hooper denied the conversation. The plaintiff had then been repaid the amount of $100,000 it had lodged as security for costs. Hooper said that neither he nor his wife had any significant debts other than the mortgage over their matrimonial home which was being serviced by his wife from her salary. 72 The effect of this evidence of Oliveri is that Hooper, on behalf of the plaintiff, entered into a supplementary fees agreement by which, in consideration of Oliveri agreeing to defer payment of his fees, the plaintiff would pay an amount equal to 10 per cent of the judgment debt after payment of disbursements in addition to any costs otherwise payable to Oliveri. For reasons to be given later, I reject Oliveri's evidence that Hooper agreed to enter into a supplementary agreement on behalf of the plaintiff. Judgment debt is paid 73 Daihatsu paid the judgment debt on or about 30 October 2001 by a cheque that was received by Oliveri. Oliveri handed the cheque to Hooper. Oliveri's evidence was that, when he handed the cheque to Hooper, he asked him to pay the fees to all barristers and other disbursements. Hooper denied the conversation. Hooper's evidence was that, when he received the cheque, he said to Oliveri "if this doesn't bounce I'll pay the everybody out." There is no material difference between these two versions of that conversation. It has no bearing on the outcome and, as will be seen, the fees of all barristers were paid. Hooper requested a special clearance of the cheque. Hooper confers with counsel 74 On 31 October 2001 Mr Hooper telephoned Mr Smallbone, a barrister, and obtained an appointment to confer with him later that same afternoon. The conference was arranged on short notice. At that time Mr Smallbone had known Hooper for some years having acted for him personally as well as for the plaintiff. Smallbone also knew Oliveri and knew that he was acting for the plaintiff in the action against Daihatsu. Smallbone knew that Kirby J had recently given judgment for the plaintiff. 75 Neither a solicitor nor any other person was present at the conference. Hooper informed Smallbone that Kirby J had delivered judgment for the plaintiff against Daihatsu. He told Smallbone that Daihatsu had paid the judgment debt and said that he wished to discuss the question of costs. Hooper said that he had an agreement with Oliveri about the costs of the action but Oliveri was trying to change it. Hooper then gave Smallbone an account of the conduct of the case beginning at the time when Oliveri had taken over the conduct of the proceedings from Garland Hawthorn Brahe. Hooper said words to the effect that Oliveri had agreed to take over the conduct of the action on the basis that he would be paid 10 per cent of the proceeds of a judgment or settlement after deducting the expenses. Hooper told Smallbone that, at the time Garland Hawthorn Brahe had ceased to act, the plaintiff was not in a position to conduct the litigation unless the liability to pay solicitor's fees was deferred until the end of the litigation and that those fees were contingent on the success of the action. It was in that context, said Hooper, that the costs agreement with Oliveri had been made. 76 Hooper then said to Smallbone that the plaintiff was preparing its bill of costs to serve on Daihatsu. He told Smallbone that Oliveri was proposing to prepare a bill on a time costing basis using hourly rates. Hooper said words to the effect that he felt uncomfortable with this because that was not the agreement that had been reached and that he did not agree with Oliveri's proposed rates. Smallbone then asked Hooper how the backdated arrangement fitted "with the percentage fee", to which Hooper replied to the effect: "Dominic says that the percentage fee also covers the amount recovered from Dominic's costs".

Smallbone then discussed the matter with Hooper and towards the end of the conference advised him that an agreement to charge a percentage fee was unenforceable and that costs could not be recovered on a time basis if they had been charged on a different basis. After discussion, including discussion as to the courses available to the plaintiff, Smallbone advised Hooper that it was open to the plaintiff to make a fresh costs agreement with Oliveri. Hooper said that he would keep faith with Oliveri and pay 10 per cent of the amount recovered after payment of disbursements. Smallbone said words to the effect that Hooper should make it clear that "that it is only a payment on account. Put it in writing with your calculations." An alleged exchange of emails 77 Hooper gave evidence that, after he had consulted Smallbone, he had an exchange of emails with Oliveri. This evidence constitutes an important aspect of the plaintiff's case. According to Hooper, he sent an email on 1 November 2001 at 2.27 pm in these terms. "Dear Dominic I expect to have clearance on Daihatsu's cheque tomorrow and I would like to settle all outstanding accounts tomorrow if possible. Our agreement is that your professional fees will be 10% of the net amount received by PMS after all other accounts have been paid. I have prepared the attached Excel spreadsheet to calculate what you are due now. Obviously, if DAP reimburses us for any part of these costs (after taxation) then that will increase the net amount received by PMS and you will receive a further 10% of that amount received. Please review the attached spreadsheet and advise if you agree with the basis on which the calculation is made so I can be in a position to pay you the $220,045.00 tomorrow (subject to clearance by the bank). Regards John".

Hooper said that he attached to that email a schedule. The schedule is dated 31 October 2001. It is the disbursements schedule that has already been quoted. For convenience, I repeat the terms of that summary of the disbursements schedule.

Daihatsu Payment 30-October-2001 $3,273,357.00 Less Estimate of Disbursements -$1,163,757.00 *Disputed Accounts Due $90,850.00 Total $ 2,200,450.00

10% of above total to Oliveri Attorneys on account of their fees:- $220,045.00

The rest of the disbursements schedule contained Mr Hooper's estimates of fees payable to counsel. 78 Hooper said that on 1 November 2001 at 5.46 pm the defendant sent an email in reply in these terms: "John, 10% is what we agreed and your calculations seem to be correct. I'll be in the office at about 8.30 but I will have to leave by 9.30. Regards Dominic".

Oliveri strongly denied both that he had received the first email and that he had replied in terms of the second. The effect of his evidence is that those emails were not sent but have been fabricated by Mr Hooper or by some other person on the plaintiff's behalf. I will later examine the evidence concerning this alleged exchange of emails which I will call "the disputed emails". 79 It is common ground that on 2 November 2001 Hooper handed Oliveri a cheque for $220,045 together with the disbursements schedule. On the same day, Hooper paid the fees due to counsel. 80 On 2 December 2001, Hooper sent Smallbone an email asking where he could find the relevant legislation in New South Wales on the question of costs. Smallbone answered that question. Hooper did not then send a copy of the disputed emails to Smallbone. He did not give Smallbone a copy of the disputed emails until 30 September 2002. Hooper assists with party and party bill 81 Oliveri gave evidence that, shortly after Hooper had paid him the sum of $220,045, he and Hooper began to prepare the party and party bill of costs. For reasons which follow, I find that Oliveri and Hooper were engaged on that task from at least January 2002 until September 2002. 82 Oliveri gave evidence that early in 2002 he asked Hooper to prepare a spreadsheet with all the faxes and emails that had been sent in the Daihatsu litigation and with all barristers' and witnesses' expenses. Hooper said that he would prepare such a spreadsheet and scan in everything else that he could. Oliveri told Hooper that he would ask Ms Louise Butler to create a spreadsheet in which Hooper had put in a formula $400 per hour plus GST. Hooper denied this conversation. He also denied that he was at any time involved in the preparation of the party and party bill of costs. Hooper's evidence was that he was preparing what he called a speculative draft of a solicitor and client bill of costs inclusive of all costs in what he called the "back to back agreements proposed" by Oliveri. For the reasons that follow, I reject Hooper's evidence. I find that Oliveri made the request and Hooper gave the assistance requested. 83 I find that Hooper asked Oliveri if he would send him a specimen bill. It is common ground that on 17 January 2002 Oliveri sent Hooper an email with a specimen bill attached. The email is headed "Daihatsu bill". The email was in these terms: "Attached please find specimen bill. The formula in the bill is 385 per hour inclusive but the DAP bill is for 400 ph plus GST as most of the work is not subject to GST."

The specimen bill attached was part of a bill of costs sent by Oliveri to one of his clients. The expression "DAP" was used by Hooper and Oliveri to refer to Daihatsu. 84 On 18 January 2002 Oliveri sent Hooper another email. The subject of the email was described as "DAP BILL" the email reads: "Attached please find new specimen called Hooper bill. We can work with this. "

There are two attachments to that email. One is a document in the form of a bills of costs which set out the dates when professional services were rendered, the nature of the services performed, the time occupied in performing each service, the total costs and the person in Oliveri's office who performed the service. It is expressed in terms which could be adapted to become a party and party bill of costs. For example, there were several items that begin "Conference with client and counsel" which then go on to describe the particular topic of each particular conference. I find that this was the form of an early version of the party and party bill of costs to be sent to Daihatsu. I do so notwithstanding that the specimen bill attached to the email of 17 January 2002 was a bill addressed to a client. That specimen was replaced by the specimen in the first attachment to the email sent on 18 January. The second attachment sent on 18 January was the form of a bill for disbursements. It too was suitable for use in the party and party bill of costs. I find that Hooper was assisting in the preparation of the party and party bill of costs. I do not accept Hooper's evidence that he was preparing a solicitor and client bill of costs. I find that he assisted in the preparation of a party and party bill of costs to be served on Daihatsu. For reasons I give in a moment, I find that, at all relevant times, Hooper knew the difference between a party and party bill and a solicitor and client bill. 85 The finding that Hooper was preparing the party and party bill of costs is confirmed by the third page of the attachment to the email of 18 January 2002 which is a form of bill of costs addressed to Daihatsu care of its solicitors. It begins "Re PM Sulcs Pty Ltd v Daihatsu Pty Ltd". It is then headed "Bill for Professional Costs". 86 Other emails confirm that in 2002 Hooper was working on the party and party bill of costs. The first is an email from Hooper to Oliveri on 11 February 2002. It reads: "Attached is a bill with GHB's fees and costs. We need a copy of the court file to move ahead. Can you act on asap. John."

Attached to that email is a schedule of many pages set out in a form similar to the final form of the party and party bill of costs. 87 On 12 March 2002, Hooper sent to Oliveri an email to which was attached a draft bill of costs in the form of a party and party bill of costs. The email did not have any message. It simply attached the draft bill which contained 70 pages. It contains many items and is obviously an early form of the draft party and party bill of costs. 88 On 23 May 2002, Hooper sent another email to Oliveri concerning the bill to be sent to Daihatsu. It is in these terms: "Attached is the updated DAP bill spreadsheet which is inclusive of Hancock, Garnsey, Stevens and Deloittes itemised accounts. I have not yet found a way to export a list of emails sent/or received so it looks as thought these will have to be input manually."

Messrs Hancock, Garnsey and Stevens were counsel who had acted for the plaintiff in the action against Daihatsu and Deloitte had also assisted with services in that action. The attachment is a schedule of 222 pages set out in the form of a party and party bill of costs. I find that it is a draft of the party and party bill of costs to Daihatsu and that Hooper was working on that draft. 89 On 1 August 2002 Hooper sent an email to Oliveri that read: "Dominic Attached is a spreadsheet with a complete list of documents (as best as I can do) which highlights BGM's omissions. John"

The attached schedule contains four pages. It listed items of professional services rendered by Miller as a partner in the firm Garland Hawthorn Brahe when that firm was acting for the plaintiff in the Daihatsu action. The preparation of such a schedule at that time is consistent with it use in a party and party bill of costs. 90 On 4 September 2002, Mr T Hancock sent an email to Oliveri. He sent the email to Oliveri in answer to a telephone call earlier that day. It is clear from the email that Oliveri had asked Hancock to provide details of all his fees. In the course of the email Hancock said that he had asked his secretary to send to Hooper the next day "a complete statement and copies of all my accounts". The fact that he was going to send such a statement is entirely consistent with Hooper preparing a party and party bill of costs. There was no need for Hancock to send copies of his accounts if a solicitor and client bill was being prepared because the plaintiff had by that time already paid Hancock's fees. 91 I have no hesitation in finding that from at least mid January 2002 to early September 2002 Hooper was assisting Oliveri in the preparation of a party and party bill of costs to be served upon the solicitors for Daihatsu. I do not accept Hooper's evidence that he was engaged in preparing a solicitor and client bill of costs. In making this finding, I do not overlook the fact that the bill of costs ultimately rendered to the plaintiff in February 2003 was presented in the same form as the bill to Daihatsu with certain amendments to make it suitable for a solicitor and client bill. I find that Oliveri simply took the party and party bill as a convenient form which he could adapt for the purpose of rendering the solicitor and client bill. However, he changed his rate of remuneration from $400 per hour as stated in the party and party bill to $500 per hour. 92 At one stage in cross-examination, Hooper said that he did not know the difference between a party and party bill of costs and a non-party and party bill. That evidence was plainly false. He later acknowledged that he knew the difference between a party and party bill of costs and a solicitor and client bill of costs. When making that acknowledgement, he accused Mr Linsday SC of using the expression "party and party costs" in cross-examination when he knew he was referring to solicitor and client costs. The accusation was entirely without foundation. Hooper's accusation against Mr Lindsay was made in a vain attempt to bolster the plaintiff's case. 93 By mid September 2002 the party and party bill of costs was almost complete save for the inclusion of disbursements (largely photocopying) that had been paid by Hooper. Oliveri was intending to serve the bill of costs on Daihatsu. Hooper again consults counsel 94 On 30 September 2002, Hooper again consulted Smallbone concerning the claim for costs against Daihatsu and two other matters. One of those matter concerned the DETCO proceedings to which I will refer in a moment. The third matter concerned procedural steps in a costs dispute that the plaintiff had with Garland Hawthorn Brahe and involved allegations that the written costs agreement was champertous. At this conference, Hooper showed copies of the disputed emails that Hooper said he had exchanged on 1 November 2001 with Oliveri. Hooper's instructions to Smallbone were that Oliveri intended to serve the bill of costs on Daihatsu, that the bill included items charged on a time costing basis that Hooper had not agreed, that the bill included work that Oliveri had not performed including work that Hooper had himself performed, and that the plaintiff had not entered into a fresh costs agreement with Oliveri. Hooper said that he and Oliveri had fallen into a serious dispute. He told Smallbone that he did not want Oliveri to send the bill of costs. Smallbone advised Hooper to send a letter to Oliveri. The same day Hooper sent Oliveri the following letter. The letter was in these terms: " RE: P. M. Sulcs & Associates Pty Ltd v Daihatsu Australia Pty Ltd I confirm out instructions that no bill of costs is to be submitted to the Defendant in this matter unless and until: (a) the bill in its final form has been submitted to me for approval; and (b) I have thereafter provided to you a written direction to serve the bill in that form." The letter accorded with the advice given by Smallbone. It was handed to Oliveri on 30 September. The reference to "the Defendant" is a reference to Daihatsu. This letter is further confirmation of the fact that Hooper knew he was working on the party and party bill of costs. 95 At the meeting on 30 September 2002 Smallbone also gave advice to Hooper concerning the DETCO proceedings. The evidence did not descend to detail but it appears that the plaintiff had at some stage in the proceedings made an offer to settle its claim in those proceedings for $75,000 and had not withdrawn the offer. Later, when the parties were negotiating a compromise of the action in a substantially higher amount than $75,000, the defendants accepted the earlier offer of $75,000. Hooper had consulted two senior counsel and both had advised him that the plaintiff was bound by the acceptance of its offer. Smallbone advised Hooper that the plaintiff should obtain from at least one of the senior counsel confirmation in writing of that advice. It appears that the Hoopers had claimed that Oliveri had been negligent in failing to withdraw the earlier offer. A meeting on 30 September 2002 96 Oliveri deposed to a meeting at his office on 30 September 2002. The Hoopers denied that meeting and said that the meeting occurred at a later date. I accept Oliveri's evidence that it occurred on 30 September. He was about to go overseas, a fact that would fix the date of the meeting in his memory. I am encouraged to make that finding because Mrs Hooper deposed that the meeting occurred when Oliveri was about to depart on a holiday overseas. Oliveri and Mrs Hooper gave different accounts of the conversation at that meeting. I find that they discussed issues relating to the DETCO proceedings and to Oliveri's costs in the Daihatsu litigation. That conclusion is borne out by Smallbone's evidence as to the matters on which he had earlier advised Hooper on 30 September. 97 Oliveri said that at this meeting Hooper gave him instructions to file the party and party bill of costs. I do not accept that evidence as it is inconsistent with the letter to Oliveri dated 30 September 2002 referred to in paragraph [94] above. Oliveri also said that the Hoopers had insisted that he should only receive 10 per cent of the fees recovered from Daihatsu. According to Oliveri, this conversation became acrimonious and he asked the Hoopers to leave his office. 98 Mrs Hooper said that she and her husband spoke to Oliveri concerning the DETCO proceedings. They believed that Oliveri's error had led to the acceptance of the offer of $75,000 by the other parties to the proceedings, an error that had caused them to lose the opportunity to settle for a higher amount. They wanted to discuss how to overcome this error. She said Oliveri was abrupt with them. She deposed that Oliveri said that they would have to sue him but he would be paid his fees in that matter at an hourly rate and not as a percentage of the recovery. Mrs Hooper said that at this meeting Oliveri handed her husband a cheque for $75,000 payable to the plaintiff. I find that the matters mentioned by Mrs Hooper were discussed. I find that Oliveri handed the Hoopers a cheque payable to the plaintiff for $75,000. A later meeting 99 Mrs Hooper deposed to a second conversation with Oliveri when he returned from his trip overseas. She was unable to state when the meeting occurred. In cross-examination, she said that it might have been late in 2002. She believed it was before a meeting the Hoopers had with Oliveri on 7 February 2003. Her evidence was that Oliveri said that the Hoopers would have to sue him in relation to his conduct in the DETCO matter but he wanted to be paid at an hourly rate. She added that, in regard to the Daihatsu litigation, Oliveri had said that he was "prepared to compromise whatever fees were awarded as your costs so you can keep what you have now". She said that Hooper then asked Oliveri to put that last statement in writing so that he and his wife could consider it. Oliveri refused, saying, " I won't put anything in writing. You'll have to trust me". I find that there was a conversation on this occasion in which the Hoopers sought to limit Oliveri's fees to 10 per cent of the amount recovered from Daihatsu after payment of disbursements but that Oliveri insisted on being paid at an hourly rate. He did, however, express a willingness to accept whatever was recovered from Daihatsu upon a party and party bill. That is consistent with his evidence that he had not agreed to a fee that was a percentage of the amount recovered but wanted to be paid at an hourly rate. Oliveri was doing no more than saying that he would accept what was recovered on the party and party bill in payment of his costs. It is to be noted that, according to the Hoopers, the parties were still debating the terms on which Oliveri was to be paid his professional fees. Party and party bill nears completion 100 In a letter dated 21 October 2002 from Hooper to Oliveri, Hooper gave Oliveri further instructions concerning the party and party bill of costs in the Daihatsu proceedings. The letter was in these terms: " RE: P M Sulcs & Associates Pty Ltd v Daihatsu Australia Pty Ltd I did not receive your facsimile letter dated 17 October 2002 until today as it was not transmitted by you until late Friday at 6.27 PM In regard to the bill of costs, my sole (but substantial) input to date has been to create an Excel spreadsheet comprising the calendar of days from 29/04/1993 through to 30/11/2001 and at your request - s Electronically scan and OCR the entire printout of the Supreme Court Registry file and merge it into the spreadsheet in date order. s Electronically scan and OCR all of Counsel's bills and merge it into the spreadsheet in date order. s Electronically scan and OCR all witness bills in date order and merge it into the spreadsheet in date order. s Electronically scan and OCR all expert bills and merge them into the spreadsheet in date order. s Merge a WinFax Pro log supplied by you into the spreadsheet in date order. s Merge an itemised electronic copy of Garland Hawthorn Brahe bill into the spreadsheet in date order. s Merge an itemised electronic copy of Garland Hawthorn Brahe disbursements into the spreadsheet in date order. s Merge an itemised electronic copy of Deloitte Touche Tohmatsu bill into the spreadsheet in date order; and then s Highlight and draw a line through any items relating to Dr John T Bradley This has resulted in my providing you with a spreadsheet of approximately 4500 rows.

The tasks I have not completed yet are the scanning and OCR of the bills of Watson Stafford Wilmot Klimt and the assembly of all of the photocopying, printing, binding, court and miscellaneous receipts as well as the bills of Tom Hughes QC and John Chippendall and Tom Hughes etc which I hope to be able to start after Christmas when I returned from the USA.

As there is currently a dispute with Garland Hawthorn Brahe regarding their bill I do not want to lodge a partial bill for costing but rather I wish to lodge one complete bill to Daihatsu which will I'm sure be referred for taxing."

It will have been noticed that the letter does not make any complaint as to any item in the draft bill of costs. The letter explains that the reason why the plaintiff sent the letter on 30 September was to ensure that Oliveri included everything in the bill. In that respect the letter does not appear to be consistent with the instructions that Hooper had given to Smallbone at the conference on 30 September 2002. The letter, especially the last paragraph, is even further evidence that Hooper knew he was assisting in the preparation of the party and party bill of costs. Oliveri ceases to act for plaintiff 101 The relationship between Hooper and Oliveri was deteriorating in late 2002. It came to an end after an acrimonious exchange of emails in mid February 2003. Oliveri said that the emails were caused by an acrimonious meeting he had with the Hoopers on 7 February. The accounts given respectively by Oliveri and the Hoopers of the meeting differ. The only common thread is that there was a dispute concerning the fees to be paid to Oliveri for his services in the Daihatsu litigation. 102 Hooper deposed to a detailed account of the meeting on 7 February. I give no weight to that account save to note his evidence concerning a document that, he said, had been discussed with Oliveri at the meeting. According to Hooper the document represented Hooper's understanding of what Oliveri was proposing as to the fees to be paid to him for his services in the Daihatsu litigation. The document was in this form: " DAP

DLO's Proposal:- NET 1 PMS to pay DLO 10% of the DAP verdict ^ amount. PARTY/PARTY 2 PMS to submit a DLO bill for assessment on a solicitor/client basis as per DLO's draft fees agreement.

3 PMS to pay DLO all monies assessed and paid by DAP on account of DLO's bill.

4 PMA to pay DLO any shortfall between any monies paid by DAP and DLO's bill.

5 PMS or JWH are to receive no consideration or payment from DLO for JWH's work in the matter or otherwise.

6 DLO to withhold all of PMS's document and files from PMS until full payment is made as per above.

DAP - Daihatsu Australia Pty Ltd DLO - Dominic Lawrence Oliveri - Solicitor PMS - P.M. Sulcs & Associates Pty Ltd JWH - John Wadley Hooper"

The text in bold typeface and the line through paragraph 4 are alterations, that according to Hooper, Oliveri asked to be made at the meeting. The document as tendered has other notes that Hooper said he made. Those notes were not explained and convey no meaning to a third person. I therefore ignore them. Hooper said that the document had been prepared on 6 February 2003. Oliveri denied that he ever saw the document. 103 Hooper frequently confirmed in writing an earlier event or conversation. He did not, however, send Oliveri any letter, email or other document confirming the discussion on 7 February nor did he send Oliveri a copy of the above document either in its original form or as altered, notwithstanding that a number of emails were exchanged between himself and Oliveri between 7 and 12 February 2003. He did, however, send a copy to Smallbone on 10 February. 104 In cross-examination Hooper said that the reference to a "draft fees agreement" in paragraph two of the document was not a reference to the costs agreement drawn by Oliveri on 1 August 2001 and dated 5 July 1998 but to another costs agreement in other litigation. His evidence on this issue was evasive and unsatisfactory. At first, he said that it was mentioned in his wife's affidavits. When those affidavits were presented to him, he admitted that they contained no reference to the draft costs agreement. He then proffered the view that the draft was a costs agreement concerning entirely unrelated litigation. I find that the draft fees agreement mentioned in paragraph 2 is the backdated costs agreement prepared by Oliveri on 1 August 2001 and dated 5 July 1998. 105 I find that Hooper did present the document to Oliveri at a meeting in early February. The document does not, I think, assist the plaintiff. If it assists any party, it assists Oliveri in that the effect of paragraph 1 and 3 is more consistent with his case that he was to receive 10 per cent of the amount recovered after disbursements had been paid pursuant to the supplementary fees agreement and, in addition, his costs. 106 I will not refer to the contents of the emails exchanged between Oliveri and Hooper in the period 7 to 12 February. They are in large part self-serving documents. It is sufficient to note that they demonstrate a real break down in the relationship between Hooper and Oliveri and to note also that in an email on 12 February 2003 Oliveri told Hooper that he was proposing to present him with a bill for his fees in the Daihatsu litigation. Oliveri serves solicitor and client bill 107 As he had foreshadowed in his email to Hooper of 12 February 2003, Oliveri prepared a bill of costs. It was dated 10 February 2003. It was an amended form of the bill of costs to be sent to Daihatsu. It changed the rate per hour from $400 per hour to $500. The bill totalled $1,879,974. That bill made no allowance for the amount of $223,345 already paid by the plaintiff. Oliveri claimed that the costs were payable pursuant to the backdated costs agreement. It is common ground that on 21 February 2003 Oliveri served the bill on the plaintiff. By that time Connah Steed & Co ("Connah Steed") were acting as the plaintiff's solicitors in this action. That firm had begun to act as the plaintiff's solicitor late in February 2003. The firm also took over the conduct of the action against Daihatsu. Oliveri served an amended bill on 6 August 2003. In that bill, Oliveri deducted the sum of $223,345 already paid by Hooper so that Oliveri sought costs in a total amount of $1,656,629. 108 The plaintiff did not pay Oliveri's bill. In November 2003 Oliveri applied pursuant to the Legal Profession Act for assessment of his costs. Paragraph 2(c) of the application refers to the basis upon which the costs are claimed. It reads: "There is a costs agreement between the client and myself oral in the first place based on the client's previous solicitor's costs agreement and later a new costs agreement post dated 5 July 1998." Plaintiff objects to bill 109 On 6 February 2004 Connah Steed filed an objection to the application on behalf of the plaintiff. The grounds of objection are as follows: "(a) That the written costs agreement relied upon by the Applicant was not sighted by the Respondent until 2003, it was not agreed to by the Respondent and the Respondent denies having agreed to any oral costs agreement as alleged by the Applicant.

(b) That the Respondent has paid to the Applicant an amount in full satisfaction of the agreed costs due and payable to the Applicant in relation to this matter.

(c) (i) That the hourly rate claimed by the Applicant was not agreed to by the Respondent. (ii) That the hourly rate claimed by the Applicant is excessive.

(d) (i) That certain of the work alleged to have been carried out by the Applicant was performed by the Respondent. (ii) That certain of the work alleged to have been carried out by the Applicant was not performed by the Applicant or at all.

(iii) That the Respondent reserves the right to provide particulars of the work referred to in (d)(i) and (d)(ii) when the Applicant makes available his files and the Respondent's documents held by the Applicant.

(e) That certain items of work claimed by the Applicant were carried out by the Applicant contrary to the explicit instructions of the Respondent particulars of which will be provided when the Applicant makes available his files and the Respondent's documents held by the Applicant.

(f) That the amount of $200,000.00 claimed for photocopying is excessive in that the Respondent has paid for the photocopying and in that the number of pages claimed to have been photocopied exceeds the number of pages actually copied."

The plaintiff also reserved the right to make further objections. The dispute as to costs was referred to Mr Hattersley, a solicitor, to act as costs assessor pursuant to the Legal Profession Act . 110 Mr Hattersley engaged in correspondence with both parties in an attempt to resolve some issues and in particular whether any costs agreement had been made and, if so, on what terms. The parties maintained their differences. On 22 June 2004 the plaintiff commenced this action. In consequence Mr Hattersley has stayed his assessment of costs until the determination of the proceedings. The plaintiff's claims 111 I summarise the relief that the plaintiff claims in this action.

1. A declaration that the plaintiff has no present liability to Oliveri in respect of the costs claimed in his bill of costs or at all.

2. A claim to recover the sum of $220,045 as money had and received. That claim was grounded upon the contention that, the arrangements as to costs that existed between the plaintiff and Oliveri were champertous and so void under the terms of the Legal Profession Act .

The plaintiff also claims further ancillary relief. The plaintiff has two additional claims. One is a claim in detinue. The plaintiff alleges that Oliveri has wrongfully retained goods belonging to Hooper including his laptop computer. The plaintiff seeks delivery up of those items or in the alternative damages. The other claim is a claim for damages for negligence by Oliveri in the preparation of an affidavit sworn by Dr Bradley who had been retained by the plaintiff as an expert in the Daihatsu litigation. Kirby J held that the affidavit was inadmissible. I will refer later to the details of that claim. 112 For his part Oliveri denies that there is no costs agreement between the parties. He relies on the backdated costs agreement prepared on 1 August 2001 and dated 5 July 1998. He denies wrongfully detaining any goods belonging to either the plaintiff or to Hooper as well as the claim in respect of Dr Bradley. Oliveri filed a cross claim alleging that the parties had entered into a costs agreement in writing, that is to say, the backdated costs agreement. Oliveri alleges that the plaintiff agreed to retain him on substantially the same terms as Garland Hawthorn Brahe which retainer was later embodied in the backdated costs agreement. The cross claim also alleges that on or about 30 October 2001 the plaintiff entered into the supplementary costs agreement. Oliveri seeks orders that he should be paid his professional fees on the basis of the backdated costs agreement or, alternatively, on a quantum meruit basis. The disputed emails 113 As is apparent from the above, there is a real conflict between the parties whether a costs agreement between them ever existed and, if it did exist, as to the terms on which Oliveri was retained to act for the plaintiff. I have already mentioned that I found the evidence of both Mr and Mrs Hooper to be very unsatisfactory. Oliveri too was not always a convincing witness. In those circumstances, the resolution of the issues between the parties is primarily to be determined by reference to objective facts and undisputed correspondence as well as by examining the extent to which the evidence given by each has the ring of truth or is consistent with other aspects of the evidence. Only in this way can the conflict between them be resolved. 114 The case of the plaintiff does not depend on the disputed emails that Hooper said were exchanged on 1 November 2001 but they were a central aspect of its case. Oliveri firmly denied both that Hooper had sent the first email and that he had replied to it later that day in the second email. The effect of his evidence was that each of the emails was not authentic and each had been created on behalf of the plaintiff to support its case. It is convenient to examine first whether the disputed emails were in fact exchanged. I first examine the expert evidence and then the other evidence that is relevant to the question whether there was in fact an exchange of emails as is alleged on behalf of the plaintiff. I will then examine the issue whether the plaintiff has proved that Oliveri agreed to act on the footing that his fees would be 10 per cent of the amount recovered after disbursements had been paid. The computer experts agree 115 Both parties retained experts to give evidence on the question whether the hard disc drive of Oliveri's laptop computer contained a record of email messages sent and received on 1 November 2001 and in particular to identify whether email messages existed on the hard disc drive that matched the text of each of the disputed emails. For convenience, I will refer to the hard disc drive as "the hard drive". The plaintiff retained Mr Paul Black. Oliveri retained Mr Matthew Gaweda. Both Mr Black and Mr Gaweda examined the hard drive of Oliveri's computer. They both identified one email with an attachment sent by Hooper to Oliveri on 1 November 2001 but that email is not one of the disputed emails. It concerned other issues. In short, the experts agree that the hard drive does not contain either of the disputed emails. 116 Mr Black also examined two recordable compact discs on which files had been stored. It did not contain either of the disputed emails. 117 Mr Black also gave evidence on the question whether it is possible to produce within a single personal computer a fictitious representation of an exchange of emails (incorporating an attachment) appearing to have been sent between that computer and another personal computer but without any communication in fact between those computers. Mr Black agreed that it was possible within one computer to create a document having the appearance of an exchange of emails of the kind that Hooper said were exchanged on 1 November 2001. Mr Black was then shown Exhibit D5 which sets out one method by which two personal computers can be used to create a fictitious exchange of emails. Exhibit D5 speaks for itself and nothing is to be gained by reproducing it. Mr Black agreed that the methodology set out in Exhibit D5 was one means of producing a fictitious representation of an exchange of emails (incorporating an attachment) appearing to have been sent between that computer and another personal computer but without any communication in fact between those two computers. 118 Thus, it is possible that the disputed emails could have been created in one computer or by means of a purported exchange of emails between two computers controlled by the plaintiff and without any communication with Oliveri. 119 That evidence does not, of course, mean that the exchange of the disputed emails was fabricated. I turn to examine other evidence on that issue. It includes evidence as to the whereabouts of Hooper's laptop computer, the whereabouts of the hard drive of Hooper's computer, requests for information from Hooper's solicitor as to the evidence of Oliveri having acknowledged receipt of any payment for his costs, and the date when the disputed emails were first shown to a third party. Were the disputed emails exchanged? 120 I find that Hooper had computer skills. He has been using computers for more than 30 years. He had worked with computers since 1970. He was at all relevant times a director of a company that provided computer services. He admitted in cross-examination that he had a good knowledge of computers but said that he was not an expert. In my view, Hooper understated the extent of his skills. He had a good working knowledge of the computer equipment in Oliveri's office between May 1998 and September 2002. He taught Oliveri how to make back-ups of documents in a computer. He also taught Oliveri how to create an electronic version of a signature for use on letters that were sent electronically. As a person who has worked with computers for a long time, it was likely that he had acquired many skills, skills sufficient to create emails with the appearance of having been sent and answered. 121 Hooper's evidence that the disputed emails were exchanged on 1 November 2001 does not ring true. It is quite inconsistent with the course of dealing between Hooper and Oliveri. The evidence clearly demonstrated, and I find, that, before judgment in the action against Daihatsu, the plaintiff and Oliveri had not entered into a written agreement as to the basis on which Oliveri was to be remunerated for his services. Oliveri and Hooper had orally agreed in June 1998 that Oliveri would act on the same terms as Garland Hawthorn Brahe but that oral agreement had not been reduced to writing. Oliveri was going to prepare it later. He did not prepare it until 1 August 2001, after Kirby J had delivered judgment. That costs agreement charged his time at the rate of $500 per hour. That was the backdated costs agreement prepared on 1 August 2001. The rate of $500 per hour was consistent with earlier fees arrangements or negotiations for fees arrangements. It will be recalled that in 1995, when Oliveri was employed by Di Lizio & Associates, that there had been an exchange of correspondence on the question of costs but no costs agreement was made. At that time Oliveri was prepared to act on a contingency basis but, if the plaintiff was successful, he sought to be paid at the rate of $500 per hour. In addition, Hooper had shown Oliveri the plaintiff's costs agreement with Garland Hawthorn Brahe. Oliveri knew that Garland Hawthorn Brahe had agreed to act on a contingency basis and the plaintiff had agreed to pay that firm $500 per hour if it succeeded in the litigation. In 1998, when Hooper asked Oliveri to act for the plaintiff in place of Garland Hawthorn Brahe, there was no reason why Oliveri should agree to accept the rate of remuneration less than that which the plaintiff had agreed with Garland Hawthorn Brahe. I have already found that Hooper and Oliveri had orally agreed that Oliveri would act for the plaintiff on the same terms as Garland Hawthorn Brahe. For reasons to be given later, I find that Hooper had a copy of the backdated costs agreement. When those facts are considered, it is highly unlikely that Oliveri would in the space of about three hours on 1 November 2001 (between 2.27 pm and 5.46 pm) have agreed to a proposal to accept 10 per cent of the amount recovered from Daihatsu after disbursements had been paid. That would be conduct wholly inconsistent with his conduct over the previous six years. That conclusion is reinforced by the fact that by November 2001, Oliveri knew that the plaintiff had succeeded in the Daihatsu litigation and that the plaintiff was entitled to recover party and party costs. Oliveri would have known that those costs would be for an amount substantially in excess of $220,045 even if limited to 80 per cent of those costs. There was absolutely no reason why Oliveri would suddenly agree to accept for his costs an amount considerably less than what he knew could be recovered on a party and party bill even if reduced to 80 per cent. It is entirely inconsistent with the course of dealings between him and Hooper. To put it plainly, Oliveri would not have simply rolled over on 1 November 2001. Discussions on costs after 1 November 2001 122 After 1 November 2001 Hooper and Oliveri spoke on several occasions about the costs payable to Oliveri. Those discussions and the document that Hooper created on 6 February 2003 are other factors that point to the conclusion that the disputed emails were not exchanged. The document created on 6 February clearly indicates that the parties were still negotiating the terms of Oliveri's retainer and that no agreement as to Oliveri's costs then existed in terms of the disputed emails. The disputed emails, if they existed, constituted a binding agreement. They were expressed in unequivocal terms. The first clearly stated that the agreement between the plaintiff and Oliveri was that Oliveri would receive for his professional fees 10 per cent of the amount recovered from Daihatsu after all disbursements had been paid and, as well, 10 per cent of any sum paid by Daihatsu as party and party costs. The second email was an unequivocal acceptance of that statement. During 2002 and in early 2003, Hooper and Oliveri had discussed what costs should be paid to Oliveri on several occasions. If in fact the disputed emails had been exchanged, as Hooper has asserted, there was no need for Hooper to be debating with Oliveri in 2002 and 2003 what should be paid to Oliveri for his professional fees. All Hooper had to do was point to the disputed emails and state that the agreement evidenced by them was a complete answer to any further claim for costs by Oliveri. The evidence and Hooper's demeanour in the witness box show that, once Hooper believed he had an agreement, he would adhere to it and insist that the other party comply with it. The fact that the question of the fees to be paid to Oliveri was still being discussed between Oliveri and the Hoopers in February 2003 indicates that the disputed emails were not exchanged. At the same time, it shows also that Hooper had not agreed to the back dated costs agreement. 123 I do not accept Hooper's evidence that the disputed emails were exchanged on 1 November. I find that they have been fabricated on behalf of the plaintiff. My reasons for doing so are grounded primarily on the fact that it is quite inconsistent with the course of dealing between Oliveri and Hooper that Oliveri would in the space of a few hours agree to accept a proposal made in the first email that Hooper says was sent on 1 November. The disputed emails were also inconsistent with the later conduct of the Hoopers in endeavouring to negotiate fees with Oliveri. When those considerations are weighed with the other evidence concerning the whereabouts of Hooper's laptop computer and the whereabouts of the hard drive from Hooper's laptop as well as the belated manner in which the claim for detinue was made as well as the other factors to which I shall refer, the conclusion becomes the more irresistible. The belated claim for Hooper's laptop 124 A fact that tells against the plaintiff is that the claim in detinue for Hooper's laptop and office goods was made in a very belated way. The plaintiff's claim in detinue includes a claim for Hooper's laptop computer. The claim is essentially a claim in respect of goods owned by Hooper. No issue was made of the fact that Hooper is not a party to the proceedings. Oliveri denied that he has wrongfully detained any of Hooper's goods including the computer. 125 The claim in detinue for the laptop was not made until 4 November 2005 almost 17 months after the proceedings had been instituted. It was made in the plaintiff's further amended statement of claim, that is to say, in the third version of the statement of claim. The initial statement of claim was filed on 22 June 2004. It contained no plea that the plaintiff retained possession of the computer. The only claim for goods said to be wrongfully detained was in respect of the plaintiff's files and documents. The relevant pleading was paragraph 20 that was in these terms: "20 The defendant has possession of certain files and documents belonging to the plaintiff."

An amended statement of claim was filed on 21 September 2004 but it too contained no plea that the plaintiff retained possession of the computer and paragraph 20 was pleaded in the same terms. Hooper had verified both the initial statement of claim and the amended statement of claim. 126 When the further amended statement of claim was filed on 4 November 2005, paragraphs 20 to 25 of the statement of claim were amended to refer to the laptop computer and other items. It is sufficient for present purposes to refer only to paragraph 20 which was amended to read: "20. The defendant has possession of certain files and documents, ( including electronic files contained in the below mentioned laptop computer) a desk with return, eight (8) chairs, a filing cabinet, a box of stationery supplies, an IBM laptap (sic) computer and carry bag, a white board, a Sola 240 volt power conditioner belonging to the plaintiff ( "the retained items" )

When the fact that the first two versions of the statement of claim contained no reference to a laptop computer was drawn to Hooper's attention in cross-examination, he said that the laptop fell within the expression "certain files and documents belonging to the plaintiff". He said that his solicitor had said that that expression included the laptop computer because the computer contained computer files. He denied that he had just invented that answer. The solicitor was not called to support that evidence. I do not accept the explanation which has all the hallmarks of recent invention. It was, in my view, a vain and unrealistic attempt to explain away an inconvenient fact. The expression "files and documents" does not in ordinary parlance signify a laptop computer nor is there any extended meaning of that expression or of each noun used in that expression which would include a laptop computer. If in truth the laptop was the subject of the claim made in the first two versions of paragraph 20, it would have been expressly mentioned. In addition, the expression "certain files and documents" does not include items of furniture and other chattels described in the statement of claim as "the retained items". In my view, the other items were included in an attempt to relegate the laptop to the status of being but one of a number of items wrongfully detained. It was an attempt to cloak the claim for the laptop with an aura of respectability. 127 Not only was the claim in detinue for chattels other than for files and documents made in a belated way, but it was made in circumstances that give rise to real questions as to the bona fides of the claim. I set out the circumstances that led to the amendments to paragraphs 20 to 25 of the further amended statement of claim. 128 On 12 May 2005 the solicitors for Oliveri had served the plaintiff with a Notice of Motion seeking orders that the plaintiff produce all computers and all hard drive discs in its possession so that they could be made available for inspection by forensic experts retained on behalf of Oliveri. 129 Some two weeks after the Notice of Motion had been served, the plaintiffs responded with a letter dated 27 May 2005 to Oliveri's solicitors alleging that Oliveri had the following items in his possession all of which belonged to Hooper. "P M Sulcs & Assocs. Pty Limited v Oliveri Your reference OLI/122/04

Our instructions are that your client has in his possession the following items belonging to the Plaintiff: 1. A desk with return. 2. Eight chairs. 3. A filing cabinet. 4. A box of stationery supplies (Including stapler etc) 4. (sic) An IBM laptop computer and carry bag. together with a Masonic Lodge Freemason's Apron and leather case (bearing initials "JWH") which belong to Mr. John Hooper of the Plaintiff company. On the assumption that your client refuses to return those items please be advised that our client will seek to further amend the Statement of Claim herein, to the extent that it may be necessary, to seek an order that the Defendant also deliver those items to the Plaintiff. Please advise if your client will consent to such amendments. Please also advise on what basis your client refuses to deliver the items which belong to Mr. Hooper and not the Plaintiff company. Further, we note that on 22nd September, 2004 we wrote to your firm requesting a copy of your client's Bill of Costs in electronic form. We are still awaiting a response to that request and would appreciate a reply without further delay.

In a letter dated 31 May 2005, the plaintiff's solicitors added a claim for a whiteboard and gave notice that, if the items were not returned, the plaintiff would amend its statement of claim to seek an order that Oliveri deliver them up. 130 Oliveri's solicitors responded by letter dated 3 June 2005 in these terms: "We refer to your letters of 27 May 2005 and 31 May 2005, and respond as follows: 1. Desk with return - this item was gifted by your client to Mr Andrew Tatsr (sic), who was then an employee of Mr Emanuel Oliveri, solicitor. Our client and Mr Emanuel Oliveri conducted separate legal practices at the time when such item was given to Mr Tatar, and the item was situated in Mr Emanuel Oliveri's (separate) legal office at the time when it was given to Mr Carter (sic). 2. Eight Chairs - See reply to 1 above. 3. Filing cabinet - Our client has no recollection of being in possession of a filing cabinet owned by your client. We have made inquiries with Mr Emanuel Oliveri in relation to this item, and he has advised that he has no recollection of any such filing cabinet being stored in his office. 4. Box of stationery supplies - Our client has no recollection of being in possession of stationery supplies owned by your client. 4. (sic) An IBM laptop computer and carry bag - It was the practice of your client to bring his IBM laptop computer into our client's legal office where he was given access to the computer network and server so that he could access relevant documents in relation to the Diahatsu (sic) proceedings. At no time did your client leave such laptop computer or carry bag at my client's premises. 6. Freeman's apron and leather case - Our client borrowed this item on one occasion and subsequently returned it to your client. It was not stored by our client at his premises. 7. Whiteboard - Such item was not provided to our client at any time. In the event that your client seeks to further amend the Amended Statement of Claim to incorporate a claim in respect of one or more of the above-mentioned items, please be advised that any such claim will be vigorously defended by our client. In that regard, we note the substantial and unexplained delay on the part of your client in raising any issue in respect of such property."

The assertion by Oliveri's solicitors of the "substantial and unexplained delay" in claiming the return of these goods is particularly pertinent in respect of the claim concerning the laptop. It is nothing short of extraordinary that no request in writing was made by Hooper or by any person acting on his behalf for the return of the laptop for some two and a half years after it had allegedly been wrongfully detained. In his affidavit sworn on 29 July 2005 Hooper deposed to the fact that he had made requests for the return of these items. He gave no particulars of the alleged requests. He did not assert that he had made any request in writing. The documentary evidence shows that he was a man who often confirmed by letter or email any instructions or requests he had made. Furthermore, as is alleged in the statement of claim, the laptop contained confidential information of the plaintiff including information relating to its taxation affairs and information needed to prosecute remaining issues in the Daihatsu litigation. Whatever might be said about the other items which Hooper alleged were in Oliveri's possession, the laptop was a valuable piece of equipment. I find that, if Oliveri had retained possession of the laptop, Hooper would have made more than one request in writing for its return. No request in writing was made before the letter from Connah Steed dated 27 May 2005. Hooper asserted that the plaintiff wished to prosecute the Daihatsu litigation. It is the more remarkable, therefore, that no request for the return of the laptop was made in 2003, in 2004 and earlier in 2005 than the end of May. 131 It is, I think, more than mere coincidence that the statement of claim was not amended to include the claim in detinue for items including the laptop computer until after Oliveri had issued the Notice of Motion applying for orders that the plaintiff produce all computers and hard drive discs in its possession. 132 The first demand in writing by the plaintiff for the return of any items belonging either to it or to Hooper was made in a letter from Connah Steed dated 27 February 2003. That letter was written soon after Connah Steed had been instructed by Hooper. That letter dealt with a number of issues. The request for items belonging to the plaintiff was limited to a request for files and documents. The relevant paragraphs of the letter read: "It is noted that our client formally requested in writing from your firm on 19th February, 2003 documents belonging to our client and which remain in your possession so that our client might urgently prepare income tax returns and continue with its business. This formal request followed a number of similar oral and written requests. Your failure to deliver such documents to our client most likely will result in our client suffering substantial loss and in those circumstances our client will seek to be reimbursed for that loss. We again, on behalf of our client, request the delivery to our client of its files in this matter without delay. If arrangements for the delivery of the files are not made within seven (70 days and if you do not, within that time, withdraw the purported Bill of Costs, it is our client's intention to commence proceedings to protects its interests without further notice to you."

The request in writing dated 19 February 2003 referred to in the first sentence of that extract was not produced but it is reasonable to infer that it was a request for documents. As Hooper admitted, the letter accorded with his instructions. It is consistent also with paragraphs 20, 21 and 22 of Hooper's affidavit sworn on 22 June 2004 in which he referred to the defendant retaining "files and documents". Plainly, no request to return a laptop computer was made. 133 If the laptop had been wrongfully detained by Oliveri, there was no reason why Connah Steed could not have made a request in express terms for its return. 134 In this respect it is to be noticed that in his first affidavit sworn in these proceedings on 22 June 2004, Hooper does not mention that his laptop had been wrongfully detained by Oliveri. He deposed to the fact that he had taken personal items, furniture and other equipment to Oliveri's office and they had not been returned. He also mentioned that Oliveri had retained the plaintiff's files and documents in the Daihatsu litigation. However, nowhere is there any reference to his laptop. Given the importance of the laptop as alleged in the statement of claim, it is curious, to say the least, that Hooper does not mention the laptop in his first affidavit. I repeat, the first claim for the wrongful detention of the laptop was made after Oliveri had issued the Notice of Motion seeking production of the laptop and hard drive for forensic examination. This is a further indication that the claim that Oliveri had wrongfully detained the laptop was made for the purpose of avoiding having to produce it for forensic examination. 135 There is another curious aspect of Hooper's evidence. He deposed that in 2001 and 2002 he transported the laptop between his home and Oliveri's office. He also said that he regularly left it at Oliveri's office, often for weeks on end. He said that on 26 September 2002 he had left it at Oliveri's office where it had remained until 22 October 2002 when he was denied access to the office thereby preventing him from recovering it. He said that he had asked for the laptop to be returned but his requests had been denied. I accept that Hooper may have left the laptop at Oliveri's office from time to time while he was present each day at Oliveri's office working on the preparation of the plaintiff's case against Daihatsu. It is apparent from his evidence that he also took it home. However, while Hooper might on occasions have left the computer at the plaintiff's office during the preparation for and the hearing of the action against Daihatsu, it is highly unlikely that Hooper would leave such an important and portable an item as his laptop computer at Oliveri's premises after the hearing had ceased. It is more improbable that he would have left it at Oliveri's office after judgment. It is highly improbable that he would have left his laptop at Oliveri's office for a period of almost one month (from 26 September to 22 October 2002). That was more than a year after judgment. For some of that time Oliveri was overseas. There was no occasion for Hooper to leave the laptop at Oliveri's office. By then he had almost completed assisting Oliveri in the preparation of the party and party bill of costs. It is more likely that he would have kept it in his possession. The very purpose of possessing a laptop computer is to have a portable facility that might be used at any time for sending messages or retrieving records and other information stored in it. It is, therefore, the more improbable that he would have left it in Oliveri's office for almost one month and so be without access to confidential information of the plaintiff, information needed by the plaintiff to attend to its taxation affairs, and information necessary for the conduct of the Daihatsu litigation. I do not accept Hooper's evidence that he left the laptop at Oliveri's office at that time. 136 It should also be noted that there is no evidence of any request by Hooper or by any person on his behalf for the return of any of the items that he says are wrongfully detained other than Hooper's assertion in paragraph 9 of his affidavit that he asked for them to be returned. Oliveri has denied that he has wrongfully retaining anything belonging to Hooper. I repeat that Hooper is a man who confirms requests and other instructions in writing. However, in the period between September 2002 and 26 May 2005, there is not one letter or email in which Hooper requests the return of any goods from Oliveri. I, therefore, do not accept Hooper's evidence that he asked for the return of his laptop. This is a further reason why I am not satisfied that Oliveri has possession of Hooper's laptop. 137 For all of these reasons, I am not satisfied that Hooper left the laptop computer at Oliveri's premises or that Oliveri wrongfully detained it. I find that the claim in detinue for the laptop is fabricated and was made so Hooper would not have to produce the laptop for inspection. The claim in detinue was made to give an aura of respectability to the claim for the laptop. I find also that the letter from Connah Steed dated 27 May 2005 was written in an attempt to counter the application by Notice of Motion for an order seeking production of computers and hard drive disc. 138 In reaching this conclusion I have had some regard also to the fact that Oliveri's solicitors had applied by Notice of Motion for production of all the plaintiff's hard drives and computers for forensic examination. The fact that the application was made demonstrates that Oliveri was confident that the examination would disclose that the disputed emails did not in fact exist. Hooper's evidence was that the disputed emails were stored on his laptop on the hard drive for that computer. When the application was made, Oliveri could not have known that the emails were not stored either on Hooper's laptop computer or on its hard drive. At that time, no allegation had been made that he had wrongfully retained Hooper's laptop. That was not made until Connah Steed wrote on 27 May 2005 after the Notice of Motion had been filed. Even if, contrary to my finding, he had retained Hooper's laptop, Oliveri could not have known that the disputed emails might be stored on the hard drive for the laptop. Oliveri could not then have known, if in fact it did occur, that the plaintiff's Fujitsu hard drive had crashed or had been thrown away, as is noted in the next paragraphs. The fact that the Notice of Motion was issued provides support for Oliveri's contention that the disputed emails did not in fact exist. The whereabouts of Hooper's hard drive 139 In his affidavit sworn on 29 July 2005 in response to Oliveri's Notice of Motion to produce computers and hard drives for forensic examination, Hooper deposed that he had sent the email of 1 November 2001 on his laptop computer and the reply from Oliveri had been received on the same computer. In that affidavit, he also said that, at the time of the sending and receiving of those messages, his computer was at home. He said that in November 2001 he had backed-up the data from the laptop to a Fujitsu hard drive in a desktop computer that he had at home so that a copy of the disputed emails was then stored on the hard drive as well as on the laptop. 140 In that same affidavit, Hooper deposed to the fact that he no longer had the hard drive in his possession. He said in April 2004, he had attempted to gain access to the hard drive but could not do so. He had, therefore, removed it from the computer and had taken it to the Fujitsu service centre at Mascot. He said that a technician had tested the hard drive. After testing it, the technician had said words to the following effect: "The hard drive is faulty and the data on it will be irretrievable. Unfortunately, you are not the only person with this problem. As it is not covered by warranty we can't offer you a replacement."

Hooper said that, as he left the service centre, he placed the hard drive into a rubbish bin. He said that he did so knowing that he had a copy of the emails and that the originals were on the laptop that he had left at Oliveri's office. In cross-examination, Hooper admitted that, at the time he had thrown away the hard drive, he was aware that Oliveri had challenged the existence of the disputed emails alleged to have been exchanged on 1 November 2001. 141 There is no evidence other than the oral evidence of Hooper that he took the hard drive to the Fujitsu service centre. There is no evidence that it was faulty other than his oral evidence. This is surprising. In 2004 and 2005 Hooper was an experienced litigant and was aware of the advantages and utility of documentary evidence. He frequently confirmed in writing earlier instructions, discussions and conversations. In the absence of some objective evidence to support his assertion that the hard drive had crashed, I do not accept his explanation for its absence. Given the dispute about the existence of disputed emails, it is very curious that Hooper did not retain the hard drive so that the fact that it had crashed could be independently verified. Alternatively, he could have asked the technician at the Fujitsu service centre to give him a certificate or some other document verifying that the hard drive had crashed but he did not do so. For these reasons, I do not accept Hooper's evidence that he had disposed of the hard drive. Requests for proof of receipt 142 Another item of evidence that calls into question the assertion that the disputed emails were exchanged on 1 November 2001 is the delay of the plaintiff in providing evidence of its assertion that Oliveri's costs had been paid in full. Oliveri had served his bill of costs on 21 February 2003. Connah Steed responded to Oliveri's claim for costs by letter dated 27 February 2003. That letter asserted, among other things, that Oliveri had been "paid in full (and acknowledged receipt) in respect of all costs owing" to him. Hooper acknowledged in cross-examination that that letter accorded with his instructions to Connah Steed. He also acknowledged that there was no document in the form of a written receipt. 143 It appears that Oliveri did not receive the letter of 27 February 2003 until early in June 2003. An exchange of letters between him and Connah Steed followed. In a letter dated 13 June 2003 Oliveri denied that he had been paid in full and asked that Connah Steed provide him with "a copy of the purported acknowledgement of receipt" that had been referred to in the letter of 27 February. Oliveri's letter of 13 June came to Hooper's attention in June 2003. Neither he nor Connah Steed answered the request for a copy of the acknowledgement of receipt. It is to be noted that the plaintiff's filed objection to Oliveri's bill of costs contained a plea that Oliveri's costs had been paid in full. 144 The question whether Oliveri's costs had been paid was taken up by the costs assessor, Mr Hattersley. By letter dated 19 March 2004 to Connah Steed, Mr Hattersley asked "what sum of money" had been paid to Oliveri in satisfaction of his claim for costs. By letter dated 1 April 2004 Connah Steed replied quoting extracts from the disputed emails. They did not, however, provide a copy of the emails. Mr Hattersley then asked for a copy of the emails and Connah Steed provided copies to him and to Oliveri by letter dated 13 April 2004. Oliveri's evidence is that that was the first occasion on which he had seen a copy of the emails. 145 On 6 April 2004 Mr Hattersley had asked Oliveri to let him have his comments on the allegations made in the letter from Connah Steed dated 1 April 2004 about the content of the disputed emails. In response to the statement that emails had been exchanged on 1 November 2001, Oliveri replied by letter dated 8 April 2003 in these terms: "I agree that I received the amount of $220,045.00. I also received a spread sheet showing Mr Hooper's calculations. However, I received it by hand on 2 November 2001 when Mr Hooper gave me the cheque together with the respondent's complements (sic) slip and a copy of the cheque attached a copy which is enclosed (-5). I do not recall any e-mail such as the one suggested by him dated 1 November 2001 and indeed, this is the first time I have heard that allegation. Unfortunately, the hard drive to my computer crashed in December last year and I was only able salvage my emails dating back to July 2003. However, while I was in the process of preparing the party/party bill, on 29 April 2002, I printed a list of all the emails to that date, which were stored in the Hooper - Daihatsu directory. A copy of that list is enclosed (-6). You will note that the last entry for 2001 is dated 2/10/2001"

In a letter to Mr Hattersley dated 12 May 2004 Connah Steed said that Hooper "does not resile from his claim in that he emailed Mr Oliveri on 1 November 2001 and that he received Mr Oliveri's agreement to it that afternoon". In that letter Connah Steed also said that Hooper acknowledged that he provided Oliveri with a copy of the spreadsheet when he handed Oliveri the cheque for $220,045 on 2 November. It is, therefore, common ground that Mr Oliveri received a copy of the disbursements spreadsheet on 2 November 2001. 146 It is curious, at least, that neither Hooper nor the plaintiff's solicitors mentioned the disputed emails until 1 April 2004 and did not provide a copy of them to Oliveri until 13 April 2004 notwithstanding that Oliveri had first requested a copy some nine months earlier in his letter dated 13 June 2003. Mr Smallbone's evidence was that he had been shown a copy of the emails when Hooper conferred with him on 30 September 2002. It was possible, therefore, for copies to have been given to Oliveri much earlier than 13 April 2004, some two years after it is alleged that they were exchanged. There was no evidence when Hooper gave copies of the emails to Mr Brown, the plaintiff's solicitor at Connah Steed. Had they been provided to Oliveri within a reasonable time after his request on 13 June 2003, it would have been possible for Oliveri to take earlier steps to examine the claim. I do not place any great weight on the failure promptly to give Oliveri a copy of the disputed emails. It is one of a number of factors that point to the conclusion that the disputed emails were not exchanged. A second copy of the disbursements schedule? 147 It is common ground that Hooper had handed Oliveri a copy of the disbursements schedule on 2 November 2001. That is another fact that calls into question whether the disputed emails were exchanged. Hooper asserted that he sent a copy of that schedule to Oliveri on 1 November in the first of the disputed emails. Had he done so, it was quite unnecessary for him to provide Oliveri with another copy on 2 November. In making that observation, I have had regard to the fact that on 2 November 2001 Hooper also paid the fees due to three barristers who had acted for the plaintiff and that, when he did so, he handed each that page of the schedule that listed the fees due to each. But Hooper had not then given any of them a copy of the part of the schedule that related to each. Hooper was not asked why he had given the schedule to Oliveri on 2 November if he had sent it to him on 1 November. While it is possible that Hooper could have given another copy of the schedule to Oliveri on 2 November, it is I think unlikely that he would have done so. Standing alone, this is not a compelling point. However, when added to all of the other considerations, it is a further reason for rejecting Hooper's claim that the disputed emails were exchanged. The plaintiff's contentions 148 The plaintiff contends that the absence of the disputed emails can be explained. It contends first that Oliveri could have removed the disputed emails from the hard drive for his laptop and, secondly, he could have received the first email on 1 November 2001 on a different computer and replied to it on that same computer. For the reasons that follow, I do not accept those contentions. Mr Gaweda described the process by which an email could be removed from the hard drive of a computer. He said that the task was not difficult. Yet it is apparent from his evidence that it is not straightforward. The evidence indicates that Oliveri did not have extensive computer skills. Hooper said that in 1995 Oliveri had told him that he knew nothing about computers and had asked him for instruction. As already mentioned, Hooper had to teach him some skills that some might say were simple. I find that Oliveri did not have sufficient knowledge, skill or expertise to delete material stored on the hard drive for his computer. In cross-examination Mr Gaweda also referred to a program on Windows 2000 (the system used by Oliveri) called "defragging" and to a cleaning process. While his evidence indicates that these processes might be relatively straightforward, I find that Oliveri did not have the sufficient knowledge, skill or expertise to undertake those processes. I find that, even if he did have some understanding of the processes by which to remove material from the hard drive, Oliveri would not have attempted the task lest he should unintentionally delete material he wished to retain. 149 The plaintiff relied on the fact that Oliveri's laptop contained no spam or junk email. As Mr Gaweda confirmed in his evidence, the absence of spam or junk email was consistent either with the fact that spam or junk mail had been had been blocked by the server or it had been removed by cleaning or defragging. I find that the absence of spam or junk email from Oliveri's laptop is quite inconclusive. 150 The plaintiff contended that the fact that the disputed emails do not appear on Oliveri's laptop is explained by the possibility of Oliveri "accessing the email" on one or the other computers in the network in Oliveri's office at 161 Palmer Street. (It is perhaps now too late to complain of the misuse of the noun "access" as a verb, especially when referring to computers.) That submission carries with it the submission that the disputed email from Hooper on 1 November 2001 and the disputed email in reply by Oliveri were received and sent on another computer in Oliveri's office. While that is possible, I do not think it probable that it would have occurred. In my view, the plaintiff is clutching at straws. I do not accept the submission. There was no evidence that Oliveri used other computers in the network. More importantly, there was no reason why Oliveri would not have used his own laptop on 1 November 2001. The evidence shows that on 1 November 2001, he did in fact receive on his laptop one message from Hooper on a topic related to the Daihatsu litigation. It did not concern legal costs. The plaintiff's submission depends of the coincidence of Oliveri chancing to use another computer on 1 November 2001. I find the coincidence is altogether too unlikely to be probable. I am encouraged to make that finding by reason of the fact that the premises at 161 Palmer Street housed both Oliveri's office and the office in which his brother Emanueli Oliveri conducted his legal practice. The computer network served both offices. The real probability is, therefore, that Oliveri would have used his own laptop on 1 November 2001. The disputed emails were fabricated 151 When Hooper's assertion that the disputed emails is tested in this way, it is apparent that no such exchange occurred. I find that Hooper has fabricated the two emails in such a way as to give the appearance that each was sent and received. In making that conclusion I am very conscious of the gravity of such a finding. The charge that Oliveri makes is very serious. I bear in mind s 140 of the Evidence Act 1995 and the observations of Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336 at 360 - 363 which are reflected in s 140. As already mentioned, it was highly improbable that Oliveri would in the space of three hours agree to a proposal as to his costs that was inconsistent with earlier dealings. Those are compelling considerations and they are reinforced by the examination of the evidence as to the whereabouts of the laptop computer and the Fujitsu hard drive as well as the very curious manner in which the claims for the return of goods and the later claim in detinue came to be made. For the reasons given earlier, I do not accept Hooper's claim that Oliveri has retained and continues to retain possession of the laptop. In my view, he has fabricated that evidence in order to prevent any forensic examination of the laptop. The fact that the claim in detinue for the return of the laptop was first made after the solicitors for Oliveri has issued proceedings seeking an order for production of all computers held by the plaintiff had been made cannot be dismissed as mere coincidence. I do not accept Hooper's evidence as to the disposal of the hard drive and his reason for doing so. It too was fabricated to avoid having to produce it for examination. I have carefully weighed these factors and the other factor I have mentioned with the contentions advanced on behalf of the plaintiff. I am not satisfied that the plaintiff's contentions answer what I believe to be the compelling inferences that flow from consideration of the objective facts. I am not satisfied that the disputed emails were exchanged between Hooper and Oliveri on 1 November. They have been fabricated on behalf of the plaintiff. Were Oliveri's fees 10 per cent net? 152 The case for the plaintiff that Oliveri's fees were to be 10 per cent of the net amount recovered by Daihatsu does not depend solely on the question whether the disputed emails were in fact exchanged. It is, nevertheless, an important plank in the plaintiff's case. I turn to examine the other evidence relied on by the plaintiff in support of its case. 153 The findings just made cast real doubt on the evidence of Hooper and Mrs Hooper. Other facts to which I shall refer also calls their evidence on this issue into question. 154 The plaintiff relied on several other contentions in addition to the alleged exchange of the disputed emails on 1 November 2001. One contention was that the schedule of disbursements that Hooper had handed to Oliveri on 2 November 2001 contains the box with the words "10% of above total to Oliveri Attorneys on account of their fees - $220,045". The submission is belied by the expression "on account of". That expression does not usually mean payment in full. Instead, it means a part payment. The ordinary meaning of that expression on the disbursements schedule means that the payment of 10 per cent of the balance represents a part payment of the fees due to Oliveri. There is no cause to displace that ordinary meaning. Had Hooper intended that the payment should be a full discharge of the plaintiff's liability in costs to Oliveri, he could quite easily have said so, using an expression such as "10 per cent of above total to Oliveri Attorneys in payment of their fees" or "10 per cent of above total to Oliveri Attorneys in full discharge of their fees" or simply "10 per cent of above total to Oliveri Attorneys for their fees". The expression "on account of" is more confirmatory of the case for Oliveri than the case for the plaintiff. 155 Another contention was grounded on a payment in January 2002 of an amount equal to 10 per cent of a payment of $34,070 by Daihatsu to the plaintiff. Daihatsu had been ordered to pay interest. It paid interest in the amount of $34,070 on 9 January 2002. On 23 January 2002, the plaintiff paid $3407.88 to Oliveri. When it was put to him in cross-examination that the payment of $3407.88 was 10 per cent of the payment of interest, Oliveri said the payment was made pursuant to the supplementary fees agreement by which the plaintiff was to pay 10 per cent of the recovery after disbursements in consideration for Oliveri deferring his claim for costs. I have already found that the supplementary fees agreement alleged by Oliveri did not exist. Notwithstanding Oliveri's answer, I do not accept that this payment is further evidence that Oliveri had agreed to accept 10 per cent of the amount recovered after payment of his fees. I reject the plaintiff's contention that the payment of $3407.88 bolsters its case. While that payment is, like the payment of $220,045, an amount equal to 10 per cent of the recovery after disbursements had been paid, it was again, as in the case of the payment of $220,045, a payment on account of Oliveri's costs as stated in the summary at the head of the disbursements schedule. The payment does not in my view support the plaintiff's claim. 156 The plaintiff seeks to gain some support from the fact that Oliveri had amended its claim against Daihatsu to some $700 million. It says that was the reason why Oliveri agreed that his fees would be ten per cent of the net amount recovered. I do not accept this assertion. It is altogether too fantastic. If correct, it would mean that Oliveri believed that he would recover $70 million as fees. It is apparent from Oliveri's evidence that his practice is to make an ambit claim. As Kirby J found, the plaintiff had made an ambit claim. The ambit claim does not necessarily establish that Oliveri had agreed to his fees being a percentage of the net recovery. 157 The plaintiff also sought to establish that Oliveri had agreed to accept 10 per cent in payment of his fees by alleging that Dr Bradley, who had given evidence on behalf of the plaintiff in the Daihatsu litigation, had also been paid on a contingency basis. The plaintiff contended that Bradley was to be paid 10 per cent of the fees recovered by Oliveri. The plaintiff points to a payment made by Oliveri to Bradley on 6 December 2001 of the sum of $22,000, an amount that very closely approximates 10 per cent of the money paid to Oliveri on 2 November 2001. Both Oliveri and Bradley denied the allegation. Their evidence was that Dr Bradley had been retained to act for other clients of Oliveri's firm and that the amount of $22,000 represented payment of fees in respect of a number of those matters. I accept that evidence. I also accept Dr Bradley's evidence that he still has not been paid for his services to the plaintiff. In addition, the terms of Dr Bradley's retainer are set out in a letter dated 21 September 1998. That letter has no reference to his fees being paid on a contingency basis. It states that he was to be paid at the rate of $500 per hour. I reject the plaintiff's contentions entirely. 158 The plaintiff relied on the fact that Smallbone gave advice to Hooper on the validity of what Hooper had told him was the agreement that Oliveri's fees would be 10 per cent of the amount recovered after disbursements had been paid. However, the evidence of Smallbone does not materially assist the plaintiff's case on that point. Smallbone had advised on what Hooper had told him. It does not follow that Hooper had told him the true facts. In my view, Hooper was attempting to avoid the consequences of the backdated costs agreement that Oliveri had prepared, a costs agreement that was substantially in the same terms as the costs agreement with Garland Hawthorn Brahe as had been agreed wholly by Oliveri and Hooper in June or July 1998. Hooper was trying to create a set of facts which would advantage the plaintiff. The DETCO proceedings 159 The plaintiff also relied on what it alleged was the costs agreements in the DETCO proceedings. As already mentioned, the plaintiff had commenced in 1997 an action in the Federal Court of Australia against Detroit-Diesel-Allison Australia Pty Ltd and others, "the DETCO proceedings". At first, the solicitors for the plaintiff were Hillman Mura & Consultants ("Hillman Mura"). Oliveri's brother Emanueli Oliveri was then employed by Hillman Mura. The principal of that firm was Mr Mura. According to Oliveri, he had previously declined to accept a retainer from Hooper to act for the plaintiff in the DETCO proceedings but from time to time he was retained by Mr Mura to provide advice in respect of the DETCO proceedings and other matters. Mr Mura ceased to practise and Oliveri took over the conduct of the DETCO proceedings. The evidence is not clear but it seems that he did so in 1997 when he held an unrestricted practising certificate. 160 Oliveri produced an unexecuted copy of a costs agreement dated 14 August 1997 between Hooper and the plaintiff on one part and Hillman Mura on the other in relation to the DETCO proceedings and on other matters. That agreement states that the rate at which Hillman Mura was to charge for its services was $500 per hour but only if the plaintiff succeeded in its claim. The agreement provided that the persons who would work on the DETCO and the other matters were Mr Mura, Emanueli Oliveri and Oliveri. There is no evidence that the document was executed. It is not clear whether it was drawn before or after Oliveri had become the solicitor on the record. There is no objective evidence of that fact. 161 The plaintiff's case is that it did not execute any costs agreement with Hillman Mura and that it had an oral agreement with Oliveri as to his legal costs when he took over the conduct of the DETCO proceedings. Both Hooper and Mrs Hooper deposed to that oral agreement in their affidavits. Their evidence was to the effect that Oliveri had agreed that his costs for acting in the DETCO proceedings would be an amount equal to 10 per cent of the amount recovered after payment of disbursements. Oliveri denied the allegation. He said that his fees were to be charged at the rate of $500 per hour if the plaintiff succeeded in the action. The Hoopers said that in May 1998 Oliveri agreed to take over the conduct of the Daihatsu litigation on the same terms. 162 The evidence concerning the DETCO proceedings and in particular the evidence as to the terms on which Oliveri agreed to act in those proceedings was unsatisfactory. The evidence as to the costs to be paid to Oliveri essentially consisted of allegations and counter allegations. In my view, a number of the disputed facts as to the conduct of the DETCO proceedings could have been established by objective evidence and, in particular, evidence of who were the solicitors on the record for the plaintiff at particular times. For example, Hooper deposed to a conversation with Oliveri asserting that Oliveri had proposed a course of conduct because he did, not then hold an unrestricted practising certificate. Oliveri denied the allegation contending that he did hold a practising certificate at the time. In addition to these considerations, Oliveri was extensively cross-examined as to the allegations made by Hooper and Mrs Hooper in their respective affidavits. He denied the allegations. I closely watched Oliveri during his cross-examination. His demeanour when being cross-examined on the DETCO proceedings indicated that his denials were truthful. I have such serious misgivings as to the reliability of the evidence of Mr and Mrs Hooper that I am not satisfied that Oliveri's costs in the DETCO proceedings were to be 10 per cent of the amount recovered after payment of disbursements. Nor do I accept the Hoopers' that, when Oliveri agreed in May or June 1998 to act in the Daihatsu litigation, he said that he would act for the plaintiff on the same basis as in the DETCO proceedings. Were back to back agreements made? 163 The plaintiff also contended that Oliveri had agreed to enter into what Hooper called "back to back agreements" that would give effect to the arrangement that Oliveri would recover as his fees 10 per cent of the net amount recovered from Daihatsu. The so-called "back to back agreements" were alleged to be a costs agreement between the plaintiff and Oliveri and a service agreement between Hooper and Oliveri pursuant to which Hooper was to be paid for his services in assisting in the Daihatsu litigation. Hooper said that the difference between the payments made under each agreement was to be 10 per cent of the amount recovered from Daihatsu. 164 Five affidavits sworn by Hooper were tendered at the hearing of the action. The first was sworn on 22 June 2004 and the last on 25 March 2008. There is no reference to back to back agreements in any of those affidavits until the last affidavit sworn on 25 March 2008. It is curious, to say the least, that the allegation was made so late in the day. 165 In his affidavit of 25 March 2008, Hooper said that, when Oliveri had agreed to act for the plaintiff in the DETCO proceedings, Hooper discussed with Oliveri the basis upon which Oliveri's fees were to be paid. As already mentioned, it was Hooper's evidence that Oliveri agreed to be paid an amount equal to 10 per cent of the amount recovered after disbursements had been paid. Hooper said that the following exchange then occurred between him and Oliveri: "Hooper: 'This arrangement will work if we get a lump sum settlement inclusive of costs. It won't work if we get a verdict or a settlement with costs that have to be taxed I don't want to have any argument between us about any agreement we have.' Oliveri: 'If we have to submit a Bill of Costs we will strike back dated back to back Agreements between us whereby I'll enter into a service agreement with your Company and you enter into a Costs Agreement so that the net outcome would give effect to our arrangements that you pay me 10% of what you get net after costs.' Hooper: 'Is that legal?' Oliveri: 'Yes. Anybody can enter into back dated Agreements if the parties agree. It is in our interest to do so otherwise DETCO will get the benefit of our deal and we will lose out. The beauty of this Agreement is that it will work in both circumstances, whether we get a lump sum or have to put in a Bill of Costs.'"

Oliveri denied this conversation. 166 In that same affidavit, Hooper deposed to the effect that, after Kirby J had delivered judgment on 1 August 2001, he and Oliveri returned to Oliveri's office. On the way, he said, they talked about a bill of costs. It is clearly evident from Hooper's affidavit that this was to be a party and party bill of costs. Hooper said that he asked Oliveri on what basis the bill should be prepared. According to Hooper, Oliveri replied: "Oliveri: 'We do it on the basis of the back to back agreements we agreed to draw up. Firstly, we will put in all the hours and then we will see what the Costs Assessor might allow and we'll draw up a back dated written agreement to suit.' Hopper: 'I don't wont to change our agreement in any way. The back to back agreements have to be in place before we submit anything to the Costs Assessor.'"

Hooper went on to say that on reaching Oliveri's office, Oliveri asked Hooper to draft his service agreement. Hooper said that he tried to do so but could not. He told Oliveri that he was unable to prepare a service agreement and that Oliveri replied that he would draw both agreements. Hooper also said that the bill of costs "was prepared in draft form on the basis that back to back agreements referred to earlier in this my affidavit be prepared and put in place". 167 I unhesitatingly reject all of Hooper's evidence on this issue. It is I think without foundation and was a recent invention made in an attempt to add colour to the plaintiff's case. Nowhere in any of the other four affidavits tendered was any reference made to Hooper being paid for the work he did in relation to the Daihatsu litigation. Furthermore, there is no reason why on 1 August 2001, Oliveri would wish to enter into an agreement that his costs would be limited to 10 per cent of the amount recovered from Daihatsu after disbursements had been paid. I repeat my earlier observation that he then knew that any amount payable by Daihatsu for costs would substantially exceed 10 per cent of the net proceeds of recovery. I find that Hooper, like some other clients, was willing to provide assistance to the plaintiff's solicitor with a view to reducing the ultimate cost of the proceedings to the plaintiff and in an attempt to bring the proceedings to trial as quickly as possible. He did so on the basis that he would not be paid for his time or services. In addition, there was no reason why any agreement other than a costs agreement might have to be prepared before a party and party bill of costs was prepared. I unhesitatingly reject the evidence of Mr and Mrs Hooper that back to back agreements were to be prepared. Hooper provides estimates of costs 168 For these reasons, the plaintiff has not established that on the balance of probabilities Oliveri's fees were to be 10 per cent of the amount recovered from the Daihatsu after disbursements had been paid. I am encouraged to reach this conclusion because Hooper informed a journalist, Ms Lampe, of his estimates of the legal costs incurred by the plaintiff in the Daihatsu litigation. That evidence is contained in the conversation with Ms Lampe and in an email sent by Hooper to Ms Lampe on 1 August 2001. Ms Lampe reproduced that information in two articles she had written that were published in the Sydney Morning Herald. 169 The first was published on 1 August 2000 and was written in the course of the plaintiff's suit against Daihatsu. In that article Ms Lampe reported that "litigation had cost Mr Hooper $400,000 for his legal costs". The second article was published on 2 August 2001 and reported the plaintiff's success in the action against Daihatsu. In that article, Ms Lampe reported that the plaintiff's legal costs were estimated at $2 million. Hooper sent a copy of that article to a number of persons associated with the plaintiff. He did not complain of any aspect of the article. Ms Lampe's unchallenged evidence is that she prepared both articles from notes made of conversations with Hooper. 170 Hooper did not in cross-examination resile from the first article. When asked why he had not told Ms Lampe about Oliveri agreeing to a retainer on the footing that he would receive a percentage of the amount recovered from Daihatsu, he replied that was because it was a confidential arrangement between him and Oliveri. I do not accept Hooper's evidence. As to the second article, Hooper at first denied that, after Kirby J had delivered judgment, he had told Ms Lampe that the plaintiff had incurred legal costs of about $2 million. However, when confronted with an email he sent to Ms Lampe on 1 August 2001, he admitted that he had told her that in that email the plaintiff's legal costs totalled approx $2.3 million. He admitted that he had disclosed that figure and other figures to Ms Lampe in the knowledge that she might publish those figures. 171 The statement that legal costs approximated $2 million is quite inconsistent with Hooper's evidence that Oliveri agreed to accept a percentage of the recovery as his fees. The statements to Ms Lampe as reported by her and the costs estimate in the email Hooper sent to her belie Hooper's evidence. There was no need to tell Ms Lampe that the plaintiff's costs were of the order of $2 million if in fact they were not. This is a further factor that tells against the plaintiff's case. 172 Oliveri also relied on the fact that the plaintiff had borrowed $1.5 million from Mrs Hooper. The security for the borrowing is the plaintiff's land and improvements at 17 Fontaine Street, Chatswood. The evidence of both Hooper and Mrs Hooper concerning the amount borrowed and the reasons for the borrowings is unsatisfactory. Counsel for Oliveri contended that these financial arrangements had been made out of a consciousness on the part of Hooper (and thereby the plaintiff) that it had a substantial liability to Oliveri in costs. The evidence as to the reasons for these financial dealings is equivocal. With some hesitation, I do not rely on it. 173 For all of these reasons, I am not satisfied that the plaintiff has proved that Oliveri's fees were to be 10 per cent of the amount recovered from Daihatsu after disbursements had been paid. A backdated costs agreement? 174 I turn to examine Oliveri's contention that the plaintiff is bound by the backdated costs agreement that bears date 5 July 1998. The issues are whether such an agreement was made and, if so, did it comply with the Legal Profession Act. 175 I have already found that the plaintiff had retained Oliveri to act in the action against Daihatsu on substantially the same terms as the plaintiff had agreed with Garland Hawthorn Brahe. The relevant terms of the costs agreement with Garland Hawthorn Brahe have already been mentioned. It was an oral agreement and Oliveri had said he would later prepare it. It is Oliveri's case that on 1 August 2001, after Kirby J had delivered judgment in favour of the plaintiff, he had prepared the backdated costs agreement that included a clause that the plaintiff would remunerate Oliveri at the rate of $500 per hour plus GST. 176 It is also Oliveri's case that on 30 October 2001 he entered into a supplementary fees agreement by which he agreed to accept deferral of the payment of his fees until they had been paid by Daihatsu in consideration of the payment to him of $220,045. He said that the plaintiff had renounced that agreement. Oliveri asserted that, when he insisted on payment of his costs on the basis of $500 per hour, the plaintiff terminated the retainer. 177 I have already held that the plaintiff did not make a supplementary fees agreement with Oliveri. One reason for that conclusion is that the expression "on account of their fees" used in the disbursements schedule is quite inconsistent with a supplementary fees agreement to pay 10 per cent in consideration of deferral of costs. Oliveri did not demur from the statement that the sum of $220,045 had been paid on account of his costs. If the parties had agreed to supplementary fees agreement in the terms alleged by Oliveri, some other expression would have been used instead of the expression "on account of their fees". Examples include "on account of them deferring payment of their fees" or "in consideration for deferring payment of their fees". It might be added that it is highly unlikely that the plaintiff would have agreed to pay such a large amount as consideration for being able to defer payment of Oliveri's fees. Finally, the fact that in August 2003 Oliveri amended his bill of costs to deduct what the plaintiff had already paid him belies a supplementary fees agreement. 178 I turn to examine whether a costs agreement was made between the plaintiff and Oliveri in terms of the costs agreement with Garland Hawthorn Brahe. Oliveri's evidence has already been mentioned. Shortly put, he asserted that Hooper offered on behalf of the plaintiff to pay Oliveri on the same terms as the costs agreement with Garland Hawthorn Brahe if Oliveri agreed to act for the plaintiff. Oliveri said that he would do so only if Hooper could not find any other solicitor to act for the plaintiff. Oliveri then told Hooper that he would prepare a costs agreement after he had received the files. Oliveri also said that Hooper later came to see him in mid June 1998 stating that he had not been able to find another solicitor and suggested that Oliveri work on the same terms as the costs agreement with Garland Hawthorn Brahe until they got the files from Garland Hawthorn Brahe and could then enter into another costs agreement. Hooper denied that he had made any such agreement with Oliveri. It was always the plaintiff's case that Oliveri had agreed to act on the basis that he would receive 10 per cent of the amount recovered in the action against Daihatsu. 179 I have already found that in July 1998 Oliveri agreed to act for the plaintiff. I find also that it was the term of the agreement that Oliveri would initially be remunerated at the same rate as provided in the costs agreement with Garland Hawthorn Brahe and that he would then prepare a fresh costs agreement. As I have found earlier, there was no reason why Oliveri should accept a lesser rate of remuneration than Garland Hawthorn Brahe. However, Oliveri did not prepare a written costs agreement in 1998. The first costs agreement he prepared was the backdated costs agreement drawn on 1 August 2001 and dated 5 July 1998. 180 Oliveri's evidence that he had prepared the backdated costs agreement on 1 August 2001 is confirmed by Mr Black's examination of Oliveri's computer. I find, therefore, that it was prepared on 1 August 2001. The fact that the backdated costs agreement was not prepared until after judgment had been delivered in the action against Daihatsu is consistent with Oliveri's conduct in other litigation. He admitted in cross-examination that he did not always prepare a costs agreement and that on other occasions he did not prepare a costs agreement until the conclusion of the matter. 181 The next question is whether Hooper received a copy of the backdated costs agreement. Oliveri said that he had printed a copy of the backdated costs agreement and had put it in the Daihatsu file. Oliveri also said that Hooper had printed a copy for himself and had taken it with him. Hooper denied that he either printed it or had taken a copy. It is the plaintiff's case that it did not see a copy of the backdated costs agreement until 5 June 2003 when Oliver sent a copy to Connah Steed in a letter dated 5 June 2003. 182 On 1 August 2001, Hooper had returned with Oliveri to Oliveri's office after Kirby J had delivered judgment. He and Oliveri were then on good terms. In all likelihood, they were pleased to have succeeded in the action. It was very likely, and I find, that either Hooper would have seen Oliveri prepare the backdated costs agreement or that Oliveri would have shown it to him after he had prepared it. I also find that Hooper obtained a copy by printing it off the computer. I am encouraged to make that finding by the evidence of Mr Smallbone who said that, when Hooper had seen him on 31 October 2001, Hooper had told him that Oliveri was proposing to prepare a bill of costs using hourly rates and that he disagreed with the rate to be charged. Mr Smallbone also said that, either at the conference on 31 October 2001 or at the latest on 30 September 2002, Hooper had said to him that Oliveri wanted him to sign a backdated agreement. The costs agreement prepared by Oliveri was backdated. Mr Smallbone advised that there was no need to backdate the agreement and it could be misleading to do so. Smallbone also said that, at the conference on 31 October 2001, he had advised Hooper that it was open to the plaintiff to make a fresh costs agreement with Oliveri. It is more probable than not that Hooper's reference to a backdated agreement was made at the conference on 31 October 2001 than at the later conference because that would in turn lead to Smallbone advising that it was open to the plaintiff to make a fresh costs agreement with Oliveri. That conclusion is reinforced by Smallbone's evidence that at the conference on 31 October 2001 Hooper said to him that he did not agree with the rate at which Oliveri intended to charge. I find that Hooper's reference to a backdated agreement was made at the conference on 31 October 2001. For all of these reasons I find that Hooper had a copy of the costs agreement from 1 August 2001. 183 In his affidavit sworn on 24 August 2006, Oliveri deposed that in November 2001, Hooper made "a back-up" disc of Oliveri's computer files and that the "back-up" included a computer file containing the backdated costs agreement. Hooper denied that allegation. The CDR disc with the "back-up" has some words written on it. It is Oliveri's case that the handwriting was made by Hooper. Hooper denied in cross-examination that he made the handwriting. Ms Novotny, a handwriting expert, examined the handwriting on the CDR. She concluded that it was highly probable that the handwriting was done by Hooper. I have considered the evidence that was before Ms Novotny and unhesitatingly accept her conclusion. One more obvious pointer to that conclusion is the fact that Hooper forms the capital letter "E" in an idiosyncratic manner. The fact that Hooper had a backup serves to reinforce the conclusion that he had seen the backdated costs agreement. Is the backdated costs agreement valid? 184 A costs agreement is void if it is not in writing or evidenced in writing: s 184(4) of the Legal Profession Act. Whatever oral agreement as to costs might have been made between the plaintiff and Oliveri, it would have no force or effect unless it was made in writing. The only written costs agreement was the backdated costs agreement. The backdated costs agreement was not executed by Hooper nor by any other person on behalf of the plaintiff. It has not been executed by Oliveri. I turn to examine whether it binds the parties. 185 Section 184(6) of the Legal Profession Act provides: "(6) A costs agreement may consist of a written offer that is accepted in writing or by other conduct. A disclosure in accordance with Division 2 under section 175 or 176 may constitute an offer for the purposes of this subsection."

As there is no executed copy of a written costs agreement, the question is whether a written offer was made that was accepted by conduct other than writing. 186 I first consider whether Oliveri made a written offer in terms of the backdated costs agreement. There is no evidence that Oliveri expressly made an offer in writing either to the plaintiff or to Hooper on the plaintiff's behalf. He did not hand Hooper a copy of it nor did he serve Hooper with a copy. Oliveri's evidence is simply that he printed a copy of the backdated costs agreement for his file and that Hooper printed a copy and took it away with him. For the reasons already given, I accept that evidence. I have also found that Hooper and Oliveri agreed that Oliveri should take over the conduct of the litigation on the footing that he would prepare a costs agreement. It was contemplated that a written costs agreement would be prepared. In August 2001, Hooper and Oliveri had been working together on the Daihatsu litigation for a period in excess of three years. Given that Hooper and Oliveri both contemplated that a written costs agreement would be prepared, the conduct of Oliveri in preparing the costs agreement and Hooper in making a copy constituted an offer in writing. As the backdated costs agreement was prepared after judgment, it could not constitute disclosure under ss 175 and 176 of the Legal Profession Act. 187 There is no evidence that Hooper or any other person on behalf of the plaintiff orally stated that the plaintiff agreed to the terms of the backdated costs agreement. If the plaintiff is to be bound by the backdated costs agreement, it is necessary for Oliveri to establish that Hooper or another person on the plaintiff's behalf by some other conduct agreed to the terms of the backdated costs agreement. 188 Mere silence on the part of the plaintiff does not, standing alone, constitute acceptance: Felthouse v Bindley (1862) 11 CB(NS) 869; 142 ER 1037; Empirnall Holdings v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523. However, the silence of the offeree in conjunction with other circumstances may indicate that the offeree has accepted the offer: Empirnall per Kirby P at 528 and per McHugh JA at 535 with whom Samuels JA agreed. I adopt the formulation of principle expressed by McHugh JA at 535: "[T]he question is one of fact. A more accurate statement is that where an offeree with a reasonable opportunity to reject the offer of goods or services takes the benefit of them under circumstances which indicate that they were to be paid for in accordance with the offer, it is open to the tribunal of fact to hold that the offer was accepted according to its terms. A useful analogy is to be found in the "ticket cases" where a offeree, who has or ought to have knowledge of the terms of a contract of carriage or bailment, is generally bound unless he raises objection: cf Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163 at 169 and MacRobertson Miller Airline Services v Commissioner of State Taxation (Western Australia) (1975) 133 CLR 125 at 136-140. The ultimate issue is whether a reasonable bystander would regard the conduct of the offeree, including his silence, as signalling to the offeror that his offer has been accepted."

In the same decision at 528, Kirby P referred to Rust v Abbey Life Assurance Co Ltd [1979] 2 Lloyd's Rep 334 and pointed out that one instance where a court would be prepared to infer a party's acceptance is where there have been previous dealings between the parties or where something in the history of the transaction between the parties gives rise to "an inevitable inference from the conduct" of the disputing party and from its "doing and saying nothing" for a considerable time. 189 Had the backdated costs agreement been drawn in July 1998 and then handed to Hooper and had Oliveri then prosecuted the action till judgment against Daihatsu, it would not be possible for the plaintiff to deny it was bound by the agreement notwithstanding that it had not been signed by Hooper or by any other person on behalf of the plaintiff. It would have been one instance of those cases where an offeree with a reasonable opportunity to reject the offer of services takes the benefit of the services contained in the offer, to adapt the words of McHugh JA in Empirnall. Such a course of dealing between the parties would indicate an acceptance of the offer. However, the backdated costs agreement was not drawn until after judgment had been delivered on 1 August 2001. There were two further hearings on 17 August and 30 August 2001 and Oliveri attended when a further judgment was delivered on 13 September 2001, the evidence does not point to any substantial amount of work being done by Oliveri in the further prosecution of the action after 1 August other than to prepare for the two hearings on 17 and 30 August, and to prepare the statutory demand addressed to Daihatsu. One major task which remained was the preparation of the party and party bill of costs. The fact that the backdated costs agreement was not prepared until after judgment in the Daihatsu litigation has the consequence that Oliveri cannot rely on the silence of the plaintiff or Hooper on the plaintiff's behalf as acceptance of the terms of the backdated costs agreement. In addition to these considerations, the course of dealings between Hooper and Oliveri in late 2002 and early 2003 demonstrates that Hooper had not agreed to the terms of the backdated agreement. 190 It is useful to refer also to the terms of clause 12 of the backdated costs agreement. It will be recalled that it stated that the offer made could be accepted by s signing and delivering a duplicate of the agreement, s accepting it in writing, s orally accepting the agreement, or s giving instructions to commence the work referred to in the agreement. [My paraphrase]

The agreement could not be accepted by giving instructions to commence the work as by 1 August 2001 the work had been substantially completed. In addition, the plaintiff did not sign a duplicate of the agreement or accept it either orally or in writing nor did he give instructions after 1 August 2001 to commence the work referred to in the agreement. There was, therefore, no acceptance in the form stated in that document. 191 There is another stronger reason for holding that the conduct of either the plaintiff or Hooper on behalf of the plaintiff did not constitute acceptance of the backdated costs agreement. Although Hooper had provided considerable assistance to Oliveri in the preparation of the party and party bill of costs, his assistance like his silence as to whether the plaintiff did or did not accept the terms of the backdated costs agreement is equivocal. There could be a number of reasons why Hooper assisted in the preparation of the party and party bill without being willing to accept the terms of the backdated costs agreement. One obvious reason is that the party and party bill was being prepared on the footing that Oliveri was charging the plaintiff at the rate of $400 per hour and, after the introduction of GST, at the rate of $400 per hour plus GST whereas the backdated costs agreement provided that Oliveri was to be paid at the rate of $500 per hour. In this respect it is to be recalled that Hooper had witnessed and had read the affidavit sworn by Oliveri on 16 August 2001 in which Oliveri had said that his fees were $400 per hour plus GST. The rate to be charged per hour is obviously a fundamental term of a costs agreement. There was no agreement between the plaintiff and Oliveri as to the rate or whether Oliveri would charge for his services and nothing in Hooper's conduct could constitute an agreement on behalf of the plaintiff that it was willing to pay for those services at the rate of $500 per hour. For these reasons, the plaintiff did not by its conduct accept the terms of the backdated costs agreement. There is, therefore, no costs agreement in writing made between the plaintiff and Oliveri. 192 That conclusion renders it unnecessary to deal with the plaintiff's contention that, in charging at the rate of $500 per hour, Oliveri was charging an unspecified premium contrary to s 187 of the Legal Profession Act. 193 Notwithstanding that no written costs agreement was made between Oliveri and the plaintiff, Oliveri is entitled to recover legal costs for his work in the conduct of the action against Daihatsu on a quantum meruit: Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221. Those costs will have to be assessed by Mr Hattersley pursuant to Division 6 of Part 11 of the Legal Profession Act and in particular with regard to s 208A and s 208B. A claim for money had and received 194 One of the plaintiff's prayers for relief is to recover $220,045 as money had and received by Mr Oliveri to the use of the plaintiff. There is no basis for the claim. I have already found that that amount was made in part payment of Oliveri's fees. Oliveri is entitled to retain that amount until his costs have been assessed. Once his costs have been assessed, he must bring those moneys to account. Should his fees as assessed be higher than $220,045, he must deduct that sum from the amount of the fees as assessed. Should his fees be assessed in a lower amount, he must pay any surplus to the plaintiff. The claim in detinue for files and documents 195 The first part of the claim in detinue is for the plaintiff's files and documents relating to the Daihatsu litigation. Oliveri admits that he has possession of those files and documents but says that he is entitled to retain possession of them pursuant to his lien for his professional costs and disbursements. Paragraph 6 seeks an order for recovery up of the files and documents or, in the alternative, an order pursuant to s 209C of the Legal Profession Act that Oliveri deliver up the files and documents. 196 Oliveri has a possessory lien in respect of the files and documents but that lien is subject to the Solicitor's Rules made pursuant to s 57B of the Legal Profession Act. Rules 8 and 29 specify rules in respect of client's documents where the retainer has been terminated or new solicitors have been instructed. However, as rr 8.1 and 29.1 provide, those rules are subject to any contrary order made pursuant to s 209C. 197 When making an order pursuant to s 209C the Court will have regard to the intent of rr 8 and 29. The question whether, on termination of the retainer, a solicitor has a lien over the documents may depend on whether it is the client or the solicitor who has terminated the retainer or the circumstances in which the termination was brought to an end. However, the overriding principle is the interests of justice and that requires consideration of two factors. The first is that a litigant should not be deprived of material relative to the conduct of his or her case and the second is that the solicitors should not be left without payment of what is justly due to them: see A v B [1984] 1 All ER 265 at 274 and Ismail v Richard Butler (a firm) [1996] 2 All ER 506. Those remarks are no less applicable to the régime prescribed by the Solicitor's Rules. As Hodgson J (as he then was) said in Jankowski v Mastoris (1995) 7 BPR 14589 at 14595: "The cases to which I have referred do confirm that the court should not take an overly technical approach to the question of whether it is the client who has discharged the solicitor or the solicitor who has discharged himself, but rather look at that question as a matter of real substance."

McClelland CJ in Eq expressed a similar view in Doyles Construction Lawyers v Harsands Pty Ltd (Supreme Court of New South Wales, McClelland CJ in Eq, 24 December 1996, unreported); BC 9606389. After referring to the explanation of the nature of a possessory lien by Asprey J in Bolster v McCallum (1966) 85 WN (Pt 1) 281 at 286, he said: "Although the Court under s 209C of the Legal Profession Act has the power to override such a lien, it will in the ordinary course only do so where such a course required in the interest of justice and, where appropriate, on conditions designed to protect the interests of the solicitor so far as possible." (citations omitted)

These latter decisions were cited with approval by the Court of Appeal in Bechara v Atie [2005] NSWCA 268 at [68] to [70]. 198 It is very difficult to determine whether it was Oliveri or Hooper on behalf of the plaintiff who terminated the retainer. Differences had arisen between the Hoopers and Oliveri as a result of the allegation that Oliveri had been negligent in the conduct of the DETCO proceedings and the continuing debate in respect of Oliveri's costs in the Daihatsu litigation. Those differences came to a head in early February 2003. The parties then had at least one meeting on 7 February that ended in bitterness and rancour. Oliveri and Hooper then exchanged acrimonious emails. This was an instance of parties who had had a long professional and personal relationship extending over a period of at least nine years coming to have differences that led to bitterness and acrimony. In those circumstances, it is inappropriate to attempt to decide who in fact discharged the other. The simple fact is that a long-standing professional relationship had come to an end. In making this finding, I do not overlook the fact that on 10 February 2003 Hooper sent an email to Oliveri asking if Oliveri was prepared to continue to act for the plaintiff in the DETCO proceedings and in the Daihatsu litigation. Oliveri was not prepared to do so. He sent his memorandum of costs. In my view, in early February 2003, the relationship between Hooper and Oliveri had broken down to such an extent that it was too late effectively to mend fences. It was better for both that the retainer should be terminated. The issue should not be determined by determining who determined the retainer but by reference to all of the surrounding circumstances. Only in that way will the interests of justice be served. 199 Judgment had been delivered in the Daihatsu litigation and the party and party bill of costs had been prepared. Oliveri was entitled to be reimbursed for his services rendered over a period of at least four years in that litigation. At the same time, the plaintiff has outstanding issues to resolve in the Daihatsu litigation. It will be unable to prosecute its claims unless it has the files and documents relating to that litigation which are still held by Oliveri. In order that the plaintiff may prosecute the remaining issues in the Daihatsu litigation, it is necessary that an order be made that Oliveri deliver up to the plaintiff all files and documents in his possession relating to that litigation. However, that order should be conditional on the plaintiff giving adequate security for the costs payable to Oliveri. The security can be provided by way of payment into court, bank guarantee or any other means which the parties may agree or which, in the absence of agreement, the court considers acceptable. Given that the plaintiff has been paid the judgment debt, that security should be for a substantial amount. Oliveri has already received $223,345 on account of his fees. His bill totalled $1,879,974. He deducted from that the sum of $223,345 so that the amount remaining due is $1,656,629. While that amount might be substantially reduced by the costs assessor, it must be remembered that the hearing of the action occupied some 51 days. The plaintiff will, therefore, be liable to pay a substantial amount to Oliveri for his costs. In all the circumstances, the most appropriate course is to hear the parties on the amount to be paid as security for costs and how that security is to be provided. Once that issue has been determined, there will be an order to the effect that, upon provision by the plaintiff of security for the defendant's claim for outstanding costs in the sum as determined, the defendant should deliver to the plaintiff's solicitors all files and documents relating to the Daihatsu litigation in the possession of the defendant. The claim in detinue for the other items 200 I turn to the remaining items. I have already dealt with the claim for the IBM laptop computer. For the reasons already expressed, I find that the defendant does not have the computer in his possession and did not at any time wrongfully detain it. The claim in respect of the laptop computer must be dismissed. 201 The only evidence concerning the remaining items is affidavit evidence consisting of allegation and counter-allegation. The evidence was not tested by cross-examination. I have already expressed the view that the claim for these items was made as a cloak to give an aura of respectability to the claim for the laptop computer. 202 The plaintiff claims an order that the retained items be delivered up. The prayers for relief include a general claim for damages. It is not expressly directed to the claim in detinue. I infer that, if the goods cannot be delivered to the plaintiff, the plaintiff seeks damages: see s 93 of the Civil Procedure Act 2005. However, the plaintiff adduced no evidence as to the value of any item alleged to be detained. 203 I find that the desk, eight chairs and filing cabinet were delivered by Hooper to Oliveri's office. I do not accept Hooper's evidence that they were lent to Oliveri on terms that they were to be returned when requested by Hooper. That assertion is belied by the fact that Hooper allowed the items to remain at Oliveri's office for almost four years after judgment in the Daihatsu litigation before any request was made that they be returned and for some two years after Oliveri has ceased to act for the plaintiff. In my view, the probability is that these items were no longer required by Hooper and had little, if any, commercial value. Hooper, therefore, made them available to Oliveri. Either Hooper gave them to Oliveri or he left them in Oliveri's office because they were of no further use or value to him. The latter is more likely. On either view, Hooper had forsaken any claim to ownership or possession. Oliveri has disposed of these items. Even if I have erred in finding that Hooper had in one way or the other forsaken any claim to ownership or possession, he is not entitled to recover damages. There is no evidence of value and, as I have said, it is likely that they had no commercial value when Hooper brought them to Oliveri's office. 204 Hooper gave no particulars of the stationery supplies he said that he had left at Oliveri's office. Oliveri denied that Hooper had left any stationery at his office. The evidence is so unsatisfactory that I am not satisfied that the plaintiff has proved its claim that stationery was left in Oliveri's office. 205 Although Connah Steed claimed in its letter that Hooper's Masonic apron and leather case had been wrongfully detained, there is no claim made for those items in the further amended statement of claim. It is unnecessary to consider it. 206 Hooper said that he had left the whiteboard in Oliveri's office at the same time as the desk, chairs and filing cabinet. Oliveri denied that Hooper had taken a whiteboard to his office. I find that Hooper did take the whiteboard to Oliveri's office. I find it cannot now be located. Oliveri had probably disposed of it. I also find that, like the other items Hooper left at Oliveri's office, the whiteboard was surplus to his requirements and of no commercial value and that Hooper had abandoned any claim to ownership or possession. Even if that finding is incorrect and it was wrongfully detained, neither the plaintiff nor Hooper has demonstrated any loss. 207 The final item claimed by Hooper is a Sola 240 volt power conditioner. That item was not claimed in either of the letters dated 27 May and 31 May 2005 when Connah Steed first alleged that Oliveri had wrongfully detained goods belonging to Hooper. It was not mentioned in the first affidavit sworn by Hooper on 22 June 2004. It is first mentioned in his affidavit of 29 July 2005 but Hooper says no more than it had been left in Oliveri's office. Oliveri denied in his affidavit sworn on 24 August 2006 that he had ever seen the power conditioner in his office. Although Hooper answered other allegations in that affidavit of Oliveri, he did not answer that assertion. The evidence concerning the power conditioner is so unreliable and inconclusive that I am not satisfied that Hooper has proved that he left it at Oliveri's office. I dismiss that part of the claim. 208 For all of the reasons the plaintiff's claim in detinue is dismissed. The claim in negligence 209 The plaintiff's claim in negligence stems from the fact that at the trial of the action against Daihatsu the plaintiff sought to read affidavits of two experts, Dr Bradley and Professor Deegan. Their affidavits and reports had been provided to Daihatsu. Kirby J rejected their evidence as inadmissible. After publishing his reasons for judgment on 1 August 2001, Kirby J reserved for later argument his decision on the orders to be made in respect of costs and interest. He heard argument on those issues on 17 and 30 August. On 13 September 2001 he published reasons for judgment. 210 Daihatsu had contended that the plaintiff had made an ambit claim and that the claim had been based on the opinions expressed by Dr Bradley. Kirby J accepted that argument. His Honour noted that the affidavits of Professor Bradley were inadmissible and that the evidence had been struck out on 17 August 2000. Once Dr Bradley's affidavit evidence had been struck out, Professor Deegan's fell with it. Kirby J held that Daihatsu was entitled to recover its costs thrown away in seeking to meet the evidence of Dr Bradley and Professor Deegan. He took the view that the appropriate remedy was to reduce the amount of the costs to be awarded to the plaintiff. He ordered that the plaintiff should recover only 80 per cent of its party and party costs. I refer to the reasons of Kirby J in PM Sulcs & Associates Pty Ltd v Daihatsu Australia Pty Ltd - Costs and Interest [2001] NSWSC 798 at paras 21-36. 211 The plaintiff claimed that Oliveri had been negligent in preparing Bradley's affidavit. The plaintiff also asserted that the evidence of Professor Deegan was not necessary and that Oliveri was negligent in engaging Professor Deegan as an expert. The plaintiff claimed damages being s the loss of a chance of recover all of its costs in the Daihatsu action; s any amount payable by the plaintiff to a third person (including Oliveri) for fees in relation to the evidence of Dr Bradley and Professor Deegan; and s costs wasted by reason of the time spent in the Daihatsu proceedings in dealing with the evidence of Dr Bradley and Professor Deegan. 212 The grounds on which the plaintiff's claim is advanced are not clear. In paragraphs 32 and 36 of the further amended statement of claim the plaintiff's claim is limited to a claim in negligence in respect of one affidavit which, it is alleged, Oliveri had revised and filed. However, no particulars are given of that affidavit. The evidence shows that at least two affidavits were sworn by Bradley and that is confirmed by the reasons of Kirby J. One affidavit was sworn in March 1999 and the other on 10 December 1999. The later one was settled by counsel. The statement of claim does not indicate which affidavit is the subject of the plaintiff's claim. 213 In his affidavit sworn on 3 May 2006, Hooper deposed to an affidavit sworn in March 1999 and well as other subsequent affidavits sworn by Bradley. Hooper said that those affidavits were settled by counsel. However, Hooper did not expressly state which affidavit is the subject of the plaintiff's complaint. It is to be inferred from that affidavit that the claim relates to the affidavit sworn by Dr Bradley in March 1999. That appears to be confirmed by Hooper's later affidavit sworn on 25 March 2008. 214 The plaintiff's evidence is at best sketchy. Hooper gave evidence of two conferences with Mr Garnsey SC and related what, he says, was the advice given by Mr Garnsey. As related by Hooper, that advice suggests that no attempt was made to get Bradley's affidavit of March 1999 into evidence. That evidence is on its face inconsistent with the reasons of Kirby J who said that the affidavits of March 1999 and 10 December 1999 were struck out. It must be inferred from this remark that the plaintiff did attempt to get the affidavit into evidence. I do not, therefore, accept Hooper's evidence on that topic. Hooper gave evidence that he was critical of the evidence of Dr Bradley. That was denied by both Dr Bradley and Oliveri. I accept Oliveri's evidence that Hooper assisted in the preparation of the affidavit. That is consistent with his active involvement in the preparation of the plaintiff's case. I place no reliance on Hooper's evidence which is an attempt by Hooper to seek to distance himself from his involvement. In my view, Hooper's criticisms have been made after the event and are grounded on the reasons that Kirby J gave for rejecting Dr Bradley's evidence. Hooper also gave evidence that he instructed Oliveri not to engage Dr Bradley. I reject that evidence as well. It is entirely inconsistent with the later attempts to get Bradley's affidavit into evidence. Most importantly, there is no evidence of negligence on the part of Oliveri on evidence from which negligence can be properly inferred. The affidavit of March 1999 was not proved. In the absence of that affidavit, it is not possible to make any finding as to negligence. The particulars of negligence in the further amended statement of claim indicate that the plaintiff's claim in negligence proceeds on the footing that Oliveri was negligent only because the affidavit of Dr Bradley sworn in March 1999 was rejected as inadmissible. 215 As Professor Dal Pont notes in his text Lawyers' Professional Responsibility 3rd ed (2005) Lawbook Co at para 5.95, an unfavourable outcome is not per se negligence. To like effect are the remarks of Callinan J in Boland v Yates (1999) 167 ALR 575 at [306]: "…Whether a duty of care has been duly fulfilled cannot be decided just by looking at the outcome of the efforts of a professional person. Cases will be lost, and regrettably patients will not be cured, notwithstanding that the lawyers and doctors have been diligent and careful."

There is no evidence by which it can be determined whether Oliveri had acted negligently. Nor was there any argument which assisted in the resolution of that question. 216 One of the claims for damages by the plaintiff for the alleged negligence is for an amount equal to 20 per cent of the costs as assessed on a party and party bill of costs to be paid by Daihatsu. That claim is made to compensate the plaintiff for the reduction in its recovery of party and party costs as ordered by Kirby J. That will be a very substantial amount. It is not possible to fix what the amount will be but an estimate can be made. Oliveri's bill of costs to the plaintiff is based on the party and party bill. It totals some $1.8 million. Experience indicates that many bills of costs are reduced on a taxation or other assessment. After making an allowance for a reduction, it is not unreasonable to suppose that an amount equal to 20 per cent of the party and party bill of costs will be at least $200,000. A claim for such a large amount requires more by way of evidence and argument than a mere assertion that Oliveri had acted negligently because the affidavit of Dr Bradley was ruled to be inadmissible. 217 For these reasons I am not satisfied that the plaintiff has proved negligence on the part of Oliveri. I therefore dismiss the claim for negligence. 218 Given that conclusion, it is not necessary to consider whether Oliveri is immune from suit on the ground that the work done by him in preparing Bradley's affidavit was intimately connected with the case in court: Giannarelli v Wraith (1988) 165 CLR 543 and D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1. 219 The claim that Oliveri was negligent in engaging Professor Deegan must also fail. The particulars of negligence allege that Oliveri was negligent in failing to use reasonable care, skill and diligence in that he ought to have known that the evidence of Dr Bradley was inadmissible so that the evidence of Professor Deegan would, therefore, be irrelevant and inadmissible. Hooper further alleged that Oliveri should have known that the evidence of Professor Deegan was not necessary and could not cure any defects in Dr Bradley's evidence. Here again, the plaintiff's claim fails for want of evidence. I dismiss the claim. Conclusion 220 For these reasons I dismiss the plaintiff's claim that it has no liability to Oliveri for his costs. I also dismiss the plaintiff's claim for repayment to it of the amount of $220,045 and its claim for damages for negligence. I allow the plaintiff's claim in detinue to the extent only that it is entitled to have delivered to it its files and documents relating to the Daihatsu litigation. However, that order is conditional on the plaintiff giving adequate security for the costs payable to Oliveri. I uphold Oliveri's cross-claim to the extent only that he is entitled to recover his costs on a quantum meruit. 221 I will hear the parties as to the terms of the order for security of the costs payable to Oliveri and as to the costs of this action. **********

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