R v Alex

Mr Matouk's affidavit affirmed 4 December 2023

1. The accused's notice of motion was filed with a supporting affidavit of his solicitor, Mr Matouk, affirmed on 4 December 2023. Mr Matouk deposed that on 25 November 2022 the accused George Alex engaged senior counsel, pursuant to the terms of a fee agreement letter that counsel addressed to the accused's solicitor. The terms included the following: 2 … [Senior counsel] has been advised that the estimated length of the trial is between 5 and 7 months. The trial is listed to commence in the Supreme Court of NSW in early April, 2023. [Senior counsel] has been advised that the brief is very large and that it is estimated that between 2 and 3 months of work is required to prepare the matter for trial. As at the date of this disclosure notice and costs agreement the Barrister has not had the advantage of receipt of, or reading, the brief. It is not possible therefore to offer any reliable estimate of the amount of time required to prepare for the trial, or the length of the trial. Estimates will be provided once the Barrister has read the brief and is in a better position to do so. … 3 The Solicitors shall pay the Barrister: a For pre-trial preparation, conferences, provision of Advices, Opinions, drafting or settling applications, written submissions, correspondence and preparation for any interlocutory hearing (excluding pre-trial court appearances) $900 per hour up to a maximum of $9,000 per day; and b $10,000 per day, or part thereof, for attendances at Court for trial and pre-trial proceedings such as directions hearings, and proceedings relating to interlocutory or final relief; … e The amount of any applicable goods and services tax, which shall be added to each of the above. … 5 If for any reason the trial was adjourned, or vacated the Barrister has the right to charge a cancellation fee. That fee will reflect days set aside and not utilised in connection with the trial. It is not possible to predict the circumstances that may lead to an adjournment or vacation of the trial date. However, given that so much time has been reserved by the Barrister over such a long period in advance of the trial and for the trial, that cancellation fee if the trial date is vacated or adjourned for any reason, will not be less than fees for an additional 4 weeks. It may be in excess of fees for 4 weeks, dependent upon the circumstances, at the sole discretion of the Barrister.
2. On 28 November 2022 junior counsel was retained on the terms of her letter of fee disclosure, which included clauses in almost identical wording to cll 2 and 5 of senior counsel's fee letter. Junior counsel's rates were specified as follows: 3 The solicitors shall pay the Barrister: a $300 per hour for each hour of work performed or $2,500 per day for each day the matter is before a court; b the amount of any applicable goods and services tax, which shall be added to each of the above; …
3. Mr Matouk annexed to his affidavit of 4 December 2023 senior counsel's memorandum of fees dated 8 September 2023 for his cancellation fee of $440,000 and junior counsel's memorandum for $110,000, which was marked "Issue date 04/04/2023"and "Due date 21/11/2023". Apart from reciting the chronological events that led to the 3 April 2023 trial date being vacated and annexing counsel's fee agreements and memoranda, the only other substantive content of Mr Matouk's affidavit was the following, under the heading "quantum of costs": 32 The quantum of costs thrown away as a result of the vacation of the trial date is the sum total of counsel's cancellation fees which appear at Annexure C. The sum total of the costs thrown away as $550,000 (including GST). The amount has not yet been paid on the client is liable to make payment in the sum prior to trial. 33 This sum is reflective of the cancellation fees in the fee agreement of counsel and work [done] which had to be revised and revisited after the Crown provided additional material referred to in the chronology set out above.
4. Senior counsel informed the Court from the bar table that during December 2022 and January, February and March 2023 he and junior counsel had refused offers of briefs on hearing for the anticipated duration of the trial. That period could surely only have been up to when it became apparent that the 3 April trial date would be vacated, which was on 21 February 2023. He said that when the trial was vacated he was able to secure only one day of work on briefs other than Mr Alex's matter in each of April, May and June 2023, three days altogether. In a further affidavit affirmed on 12 December 2012, Mr Matouk deposed that junior counsel had informed him she was able to secure appearance work on other matters for only three days in March, three and a half days in April and four days in May 2023. Both counsel performed some preparatory work on Mr Alex's case during the months of March to June inclusive.

Notice of cancellation of the hearing and work during the notice period

1. The question whether Mr Alex's liability for cancellation fees of $550,000 has been reasonably incurred, so as to make it unfair that the Crown should continue the prosecution without reimbursement, is not answered simply by the fact that Mr Alex agreed to terms by which counsel is entitled to make such a charge or by the circumstance that counsel have in fact not secured replacement work for some part of the reserved hearing period. In the circumstances of this case the Court must consider the reasonableness of counsel stipulating for such a cancellation fee without any condition as to the period of notice that the hearing would be cancelled. It is also necessary to consider whether the availability of remunerative work on the brief for Mr Alex, or on briefs for other clients, was available during the period of notice.
2. As recorded in the 3 March 2023 judgment, a very large volume of the proposed trial evidence, both documentary and recorded conversations, had been served by the Crown up to the date when senior and junior counsel were retained by the accused. The extent and nature of that served material is summarised at [9]-[13] of the 3 March judgment. Also, by late November 2022 the Crown had foreshadowed that it would serve still more evidence, being summaries of further very extensive primary records, to be adduced pursuant to s 50 of the Evidence Act 1995 (NSW): [16]-[17] of the 3 March 2023 judgment.
3. When the Crown served the foreshadowed summaries on 3 February 2023 it was recognised by the prosecutor and it quickly became apparent to all defence counsel that the two months remaining to the appointed trial date would be insufficient for the defence representatives to read the documents, to listen to the 136 hours of recorded conversations, to respond to the Crown's proposed summaries of evidence and to make submissions in pre-trial hearings regarding admissibility - all in readiness for arraignment and empanelment on 3 April. Recognising the extent of the pre-trial work to be done the Crown proposed a deferral of the commencement of the trial by five weeks to 8 May 2023. The Crown accepted the Court's proposal that if the trial were to be deferred as requested, the dates reserved for the week commencing 3 April should be utilised for the pre-trial determination of objections to evidence: see judgment of 3 March 2023 at [28].
4. Senior counsel for the accused George Alex submitted to the Court during an interlocutory hearing on 15 February 2023 that his and junior counsel's review of the Crown material already served and proposed to be served in the near future could barely be undertaken in the eleven weeks between then and 8 May. He stated that Mr Alex's preferred position was that the fixture for 3 April be vacated and that the proceedings be remitted to the District Court for trial in that jurisdiction in 2024. Senior counsel was asked to respond to proposed directions (a) that by 10 March 2023 the defence should serve objections and supporting submissions with respect to the Crown's recently served schedules and its redacted transcripts of intercepted conversations and (b) that by 17 March the Crown should serve an index of a proposed tender bundle of documents. Senior counsel said this: After yesterday we gave this matter a deal of consideration, and we have real concerns that the matter [that is, the trial if it should commence on 8 May 2023] will go into next year, and we also have real concerns that we are going to need more time to deal with some of these tranches of material that is proposed to be served. Dealing with what was yesterday a 4,000 document tranche [being the documents to be identified in the Crown's proposed tender bundle index], we are now told it might be 400 documents. If it is just 400 documents, and we can get through, and we have got 18 days [from 17 March to a pre-trial hearing of objections on 3 April], we only have 18 days to get through them, that is 22 documents a day. But if some of those, say half of them, 200 of them, contain ten or more pages, that 400 becomes somewhere between two and 3,000 pages of material that we have to get through. We still have to get through 7,800 pages of 900 telephone intercepts. We know that the playing of those telephone intercepts is said to take 136 hours, over 27 days. If we don't play them, and we just work off the transcripts, we still have to read all of that material. And it's not just […] a matter of reading it. We have got to cross reference it. We have to understand its impact on the whole of the case. We have to work out whether or not all of those are necessary, whether or not they should be there or those that aren't there. Which means, we need to review telephone intercepts that are not on the Crown's list but we may want the Crown to include in order to put the ones they are tendering in a proper context. By 10 March we will have the task of dealing with 7,800 pages of telephone intercepts. We will also have summaries to deal with. And then we are going to receive and have 18 days to deal with, perhaps, two to 3,000 pages of material. … There is a lot of material to get through, and we have real concerns that the minimum dates […] that we have offered in order to fit in with a trial starting in the first week of May are just not going to be sufficient and that the system will breakdown before we get to that trial date. It was that thinking that led to us taking up the reference to […] the District Court.
5. It was clear from 15 February 2023 that the trial would not proceed on 3 April and that Mr Alex's counsel would be fully engaged with preparatory work up to 8 May 2023. Apart from the concern of Mr Alex's counsel as to whether they could "get through" their preparatory work by 8 May, the Court was uncertain whether it would be practical to keep the large jury panel that had been summoned for 3 April on standby and, if not, whether a replacement panel could be summoned for 8 May.
6. When the Court ascertained that the summonsed jurors could not be kept on hold for five weeks, on 21 February 2023 all parties were notified by email from my Associate that the trial would not be re-fixed for 8 May, that the 3 April fixture would be formally vacated and that no new trial date would be appointed until the Court could be assured of all parties' readiness to proceed: see [40]-[41] of the 3 March 2023 judgment. In response to that email Mr Alex's solicitor requested that the proceedings be re-listed. Pursuant to that request a further mention occurred on 2 March 2023.
7. During that mention I pressed all counsel as to whether they could be ready to argue some of their objections in the week commencing 3 April or soon after, as the Court had reserved a judge and courtroom for the trial and was ready and willing to make as much progress as possible on pre-trial aspects of the matter. I said this to senior counsel for Mr Alex: HIS HONOUR: … I wish to proceed with dealing [with] the objections as far as we possibly can whilst we have some time reserved. I appreciate that the accused may not be ready to deal with absolutely everything by 3 April. How the defence are going to deal with what I regard as a ludicrous 250 page A4 schedule of 3,000 communications I don't know. It may not be possible to deal with that in the week of 3 April. … We have to get to the point of dealing with [as] many objections as we can, finding out what are the problems Mr Agius. … The trouble is that I want to try to make some use of that period from 3 April, a week or two weeks. With the sort of material that the Crown has served I really don't know the extent of the objections or difficulties.
8. Senior counsel for Mr Alex proposed a draft timetable of directions on the basis of which the parties would not be in a position to argue objections at any time before mid-July. Senior counsel said this: We have allowed in our draft orders two months which will enable us to get through the balance of the listening devices. But that needs to be done before the trial and will enable us, we hope, to have the principal schedules checked. The principal schedule here is obviously the interaction between the ATO and various entities that the Crown case seems to indicate was those entities rather the servants of one or more of the accused or of Mr McHugh. They need to be checked particularly from my client's point of view because there is absolutely no evidence of any money coming to my client. There is no documentary evidence of that. If the Crown case is all of these banking and other transactions took place and we were an architect of that but there's no evidence that involves us with the direct receipt of any of that money. None of that money is traced through a bank account with our name on it. We are an undischarged bankrupt. We didn't have any bank accounts in our name. It's not as though we go to the client and say what do you say about this? We have to check every line entry in the Crown case on what the tax liability of the primary companies was and trace through that money to see where it actually goes. That means … not going through this document which is a large task but also checking that document against these charts. We have the original charts‑‑ HIS HONOUR: ‑‑there are 24 of those charts. They have between 60 and 100 transactions on each one. There are a couple of thousand of transactions to check there. AGIUS: That's right.
9. After discussion with the prosecutor, as recorded over a few further pages of transcript, I reiterated the Court's concern to have some aspect of the pre-trial argument ready to be determined on 3 April, as follows: HIS HONOUR: I think everyone in the room has to proceed on the basis that I wish to have something ready to deal with in the week of 3 April. In response, senior counsel for Mr Alex referred to substantial further preparatory work that lay ahead of him and his junior: in relation to particulars of overt acts that had been supplied by the Crown, difficulties of verifying entries on charts of funds flows that the Crown proposed to tender, time that would be required to determine the relevance of and objections to entries on the charts and the need to review the transcripts of intercepted conversations.
10. Senior counsel for Mr Alex said that he was waiting for a response from the Crown to a request for particulars, as a prerequisite to formulating objections to the transcripts of intercepted conversations. The Court's exploration of the possibility of Mr Alex's counsel being ready for a pre-trial hearing on 3 April concluded as follows: HIS HONOUR: Is there some other part of all of this material that so far as you're concerned would be better to concentrate [on] for 3 April. AGIUS: Not that we could be ready for by 3 April.
11. Counsel for the co-accused also said that they had too much material to work through to be ready to argue objections by 3 April and all of them supported a timetable that would defer any pre-trial hearing to mid-July. The discussion concluded as follows: HIS HONOUR: Alright, that's enough. Say no more. You defeat me. There will be no hearing on 3 April. I turn my attention to what directions I make for later in the year. A fresh timetable was set, allowing for pre-trial argument on objections to take place over two weeks commencing on 17 July 2023: see [42]-[44] of the 3 March judgment.

Conclusion on reasonableness of cancellation fees

1. Judges have expressed a range of views concerning the reasonableness of specific cancellation fees charged by counsel in the circumstances of individual cases. Examples are Commissioner of Australian Federal Police v Razzi (1991) 101 ALR 426 (Wilcox J); Wilkie v Gordian Runoff [2005] NSWSC 873 (McDougall J); The Queen v Martinello [2005] ACTSC 109; R v Carbone (No 2) [2017] NSWSC 346. The types of cancellation fees, the quantum of them and the circumstances in which they may be claimed are infinitely variable. Unsurprisingly, general rules, or even general criteria, have not been established for determining the circumstances in which a cancellation fee should be regarded as reasonable or not, in principle or in quantum, either as between solicitor and client, or between party and party, or for a purpose such as the present.
2. In this case, from the date of notification that the trial would not proceed counsel had nearly six weeks' notice that they would be available to accept alternative briefs from 3 April onwards. From 2 March 2023, when the Court rejected the Crown's proposal of re-fixing the trial for 8 May, counsel were free to accept alternative work immediately for the remainder of the year. Further, for the whole of that six-week period of notice in February and March 2023 counsel were in a position to be fully engaged on remunerative work for Mr Alex, preparing objections to the Crown's evidence and preparing submissions to support those objections at a pre-trial hearing. As quoted above, senior counsel for Mr Alex assured the Court that he and junior counsel would be fully engaged right through to 3 April 2023 and that even that would not be sufficient time for them to be ready to argue objections. The Court took counsel at his word at the time and it still does. Further, based on the information provided to the Court on 15 February and 2 March 2023, useful productive work necessary to prepare the case for trial in 2024 could have continued beyond 3 April 2023.
3. Upon those considerations I consider it was not reasonable, according to the standard that must be applied for an application of this nature, that either counsel should charge any cancellation fee in respect of vacated hearing dates after 3 April 2023.
4. The circumstance that neither counsel worked full time on preparation of Mr Alex's case during what I have referred to as the notice period in late February and March nor during April or May does not alter the unreasonableness of the cancellation charges. My conclusion about the unreasonableness of cancellation fees being charged when such a period of notice has been given is not altered by the fact that neither counsel secured a significant volume of alternative work during what they regard as the cancellation period, in April and May 2023.
5. It is unusual that any counsel with established practices, such as senior and junior counsel who have been briefed by Mr Alex, should have been able to obtain only limited alternative work after 3 April 2023, given the preceding six weeks within which their clerks were able make their availability known to the solicitors' profession. From my own experience as a member of the New South Wales Bar for 33 years and from observation of the practices of other counsel, I can say that it would normally be expected that briefs for chamber work or for hearings would materialise over a lead period of that duration early in the legal year. The anomaly of an interruption to the pressure of work and demand for counsel at the New South Wales Bar, such as these counsel experienced after 3 April, cannot be attributed to the vacation of the trial date but must be regarded as simply a trough of a kind that professionals in this field must accept, together with the peaks. Both counsel are briefed for the trial in 2024. Had the case gone ahead in 2023 they might have suffered such a trough in 2024, whereas, in the events that have occurred, they will be fully engaged. What actually occurred with respect to obtaining alternative work does not alter the circumstance that an adequate period of notice of cancellation, with remunerative work in the meantime, was afforded.
6. What I have said to this point is sufficient for the Court to resolve the issue concerning reimbursement by the Crown for counsel's cancellation fees. One additional consideration reinforces my conclusion. Mr Alex's counsel had been retained on this brief for only six weeks of Court term up to 21 February 2023, when they were definitely informed that the trial would not proceed on 3 April. They were under their retainers for three weeks at the end of term in late 2022 and for another three weeks of the new term in early 2023. I exclude the Court long vacation, during which counsel would not expect to be approached to accept briefs. The six weeks of term time in December 2022 and up to 21 February 2023 was the only period during which they would reasonably have been refusing other work on the basis of their retainer by Mr Alex.
7. The $550,000 in cancellation fees is a matter between Mr Alex and his counsel. I am not satisfied that any part of that sum has been reasonably incurred by him, according to the objective standard of reasonableness that must be applied in determining whether reimbursement of the cancellation fees, or part thereof, should be imposed upon the Crown as a condition of it continuing with the prosecution. I do not consider that there is any material unfairness to Mr Alex in the Crown proceeding with the trial on 12 February 2024 without reimbursing that sum or any part of it.

Costs thrown away on duplicate reading

1. The second aspect of Mr Alex's application depends upon alleged fault on the part of the Crown different from the conduct that resulted in the 3 April 2023 trial being vacated. For this part of the application to succeed Mr Alex would have to demonstrate that the Crown was significantly at fault in first serving the material that senior counsel read during February 2023 and then serving amended or replacement material covering the same subject, in early March 2023. There has not been tendered or identified to the Court either the documentation reviewed by counsel in February 2023 or the replacement material of March. The evidence tendered on the application provides no basis upon which I could conclude that there was significant fault in this respect.
2. Bearing in mind the volume, detail and complexity of the evidence that is to be tendered in the Crown case, it would be expected in the ordinary course that revisions, substitutions, withdrawals and other adjustments of proposed documentary evidence would take place during interlocutory stages. In the absence of evidence I am not able to assess whether the modifications in this instance, that have caused senior counsel to conclude that some of his reading and preparation time was wasted, went beyond the usual course of evolution and development a complicated documentary Crown case.
3. Without having the two tranches of served documents tendered on the hearing of the notice of motion I am left with only senior counsel's submission that they differed in material respects, that the sequential service of this material constituted fault on the part of the Crown and that his reading of the March material rendered his work in February redundant. I cannot responsibly accept those submissions and make findings of fact accordingly without having been asked to examine the documents upon which the submissions are based and without having been put in a position to undertake such an examination on my own initiative.

Orders

1. For the above reasons the following order will be entered: George Alex's notice of motion filed 4 December 2023 is dismissed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 December 2023