Schuler v Stern

Background 5The plaintiff commenced proceedings 20507 of 1997 in the Supreme Court of New South Wales for damages against a hospital for medical negligence. Those proceedings claimed that, as a consequence of the defendants' breach of duty, the plaintiff gave birth to a son with a very disabling syndrome, in circumstances where she would otherwise have undergone an abortion. Her damages included the financial costs of having to care for her handicapped child. In or about early October 1998 the plaintiff consulted the defendant. She signed a costs agreement on 24 October 1998. 6The relevant clauses are as follows. Clause 1 of this Costs Agreement provides: "1. The work you require us to do is the conduct of a medical negligence action in the Supreme Court of New South Wales against the parties referred to in Item 1 of the Schedule for the recovery of damages in respect of the matters claimed of in Item 2 of the Schedule and all attendances incidental to the conduct of the case. You will not be obliged to pay anything to us for professional costs unless there is a successful outcome. You will, however, be obliged to reimburse us with our out-of-pocket expenses, though normally we will ask you to meet any significant out-of-pocket expenses along the way. [This paragraph appears in bold in the original Costs Agreement]" 7Underneath the heading "Disbursements" on page 3 of the Costs Agreement, there was a reference to a premium of 25% the payment of which was "conditional upon the successful outcome of this work". 8Clause 2 of the agreement provides: "2. S&T's costs and disbursements payable pursuant to this Agreement shall be deducted from the judgment debt or settlement sum recovered from the Defendant and paid to S&T who shall not be obliged to wait for recovery of costs from the Defendant to receive payment of their proper costs and disbursements pursuant to this Agreement." 9Following that was a reference to "the important terms and conditions" set out in the Schedules 1, 2 and 3. 10The relevant portions of Schedule 2 are as follows: "1. Fees & Charges To Be Conditional On A Successful Outcome In the event that the total of the amount of any judgment and costs or settlement and costs recovered from the Defendant is less than the cost due to S&T pursuant to this Agreement then in such event S&T waive any right to recover any deficiency from the Client. If there is a successful outcome, we will charge you at the rates set out. 2. "Successful Outcome" of the work means:- (i)judgment for the Plaintiff; or (ii)entry of terms of settlement providing for judgment for the Plaintiff; 3. Out-Of-Pocket Expenses From time to time we will incur expenses on your behalf which we will ask you to pay. These will include:- (i)fess for medical expert reports; (ii)fees for other experts if appropriate; (iii)filing fees payable to the Court in respect of documents filed in the Court Registry; (iv)process service fees; (v)counsel's fees on a conditional fee basis. This is not a complete statement but sets out some of the more important out-of-pockets which we are likely to incur (as to Counsel's fees, see below). You will put us in funds from time to time to cover all such reasonable expenses, other than counsel's fees, on a conditional fee basis, which will be payable out of the proceeds of the claim. 4. Condition Precedent - Counsel to Agree to Take on Case on Conditional Fee Basis It will be a condition precedent to this Conditional Costs Agreement coming into effect that we will first obtain agreement of counsel of S&T's choice to accept a brief on hearing even though to be delivered at a later time and a brief to advise during the period between the commencement of the case and hearing on a conditional fee basis. Once such agreement is obtained this Agreement shall be deemed to take effect upon the date of first instructions and shall cover all work done including on the occasion of first receiving instructions. 5. Estimated Cost of Case The total cost of this case will depend upon a number of factors:- (i)if the case settled prior to hearing. Obviously, if settlement takes place at an early stage our fees and other out-of-pocket expenses will be significantly reduced; (ii)if the case proceeds to a defended hearing, the number of Court days taken; (iii)medical negligence cases are complex and the amount of work required is not always apparent at the outset. As a guide, in the event that the case involved a 5 day hearing on a defended basis, instructing counsel throughout the hearing, our charges could be in the order of $20,000.00 to $30,000.00 for profit costs." 11In particular, clause 13 of Schedule 2 provided: "13. Ceasing to Act Without limiting the circumstances in which we are otherwise may [sic] be entitled to cease to act for you if:- (i)you unreasonably refuse to accept our advice in respect of significant issues arising in respect of your case including acceptance or rejection of a settlement offer; (ii)you fail to provide us with adequate and timely instructions; (iii)you indicate to us that you have lost confidence in us; (iv)in the event of ill health or disability of Terry Stern for a period in excess of one month, such that he reasonably believes that he cannot continue to perform the work for you to the standard of competence and efficiency required by the nature of the case; (v)cessation of the practice; then we (a)may give you notice in writing terminating this Agreement; (b)shall not be obliged to take any further step in the conduct of the matter; (c)shall be entitled to cease to act and file a Notice of Ceasing to Act in compliance with the Rules of the Supreme Court provided that if we continue to act for you or take any further step on your behalf we do so without affecting our entitlement to cease to act under this clause. You may terminate this Agreement in writing at any time without giving any reason. If you do so, however, you will pay our costs and expenses up to the time of termination, within 30 days of the termination, together with the premium, irrespective of the outcome. If you terminate the Agreement for reasonable cause and give us notice thereof in writing, or if we cease to act, payment of our costs and disbursements shall be dependent on the successful outcome of the case as provided for above, provided the premium shall not be payable in the case of 13 iv and 13 v. In that case you shall irrevocably authorise such lawyer as you choose to take over the case to pay our costs and disbursements on the successful conclusion of the case as a first payment out of the proceeds of the claim." 12Clause 19 of Schedule 2 provided: "19. Independent Legal Advice The Client acknowledges and confirms by signing this Agreement that she/he has been advised of the availability of independent legal advice as to the legal and practical nature and effect of this Agreement and as to whether or not it is in the interests of the Client to enter into it from other Solicitors and that it is in the interests of the Client to obtain such advice before entering into this Agreement." 13Although the sum the plaintiff ultimately received on settlement against one of the defendants is unknown, no submissions were made invoking the provision in clause 1 of the contract. 14A brief was sent to Ms Kylie Nomchong of counsel. Ms Nomchong provided a costs agreement on 19 November 1998. That original costs agreement has vanished with the passing of time. It is, however, referred to in the subsequent agreement of 1 July 2000 (at page 21 ff in Exhibit A) and is accepted as amounting to the relevant costs agreement. The opening paragraph states: "I refer to my Costs Agreement dated 19 November 1998. I write to advise that I propose a variation of that Agreement. The basis for the variation is threefold. First, since it is some time since that Costs Agreement was made, I have now increased my hourly and daily fees. Second, my estimate as the number of hours for preparation and hearing time has altered. Thirdly, I am required to take into account the effect of the GST of conditional fee agreements. Accordingly I set out below my Costs Agreement which, subject to agreement, will operate as from the date of this letter." [Emphasis added] 15Ms Castle took me to the following clauses in counsel's fee agreement possibly referring to a retainer for the hearing: (a)Clause (e) provides: "My current fee of $2,000.00 per day plus 10% GST will apply for each day set aside for appearing in court and will apply to the normal business hours of 9.00am - 5.00pm. This does not include any additional time spent out of normal business hours for conferences and preparation." (b)Clause (i) provides: "If, for whatever reason, the case should not proceed on the appointed dates fixed for the hearing (for example, if the case is settled, adjourned, not reached or the brief is withdrawn) then the fees for each day set aside for the hearing of the case will be payable as cancellation fees but I will off-set any fees earned in respect of other paid court work that I may subsequently receive for those dates which have been set aside for the case." (c)Clause (m) provides: "If my fees, or any part of my fees, remain unpaid after forty-two (42) days following the date of the verdict or settlement of the matter interest shall apply to my unpaid fees at the rate specified from time to time in Schedule J of the Supreme Court Rules." (d)Clause (r) provides: "Payment of my fees shall be contingent upon a successful outcome of the case in return for the statutory 25% premium for success. Annexure 3 defines "success"." 16In Annexure 2, Ms Nomchong listed some "variable factors affecting fee estimates", some of these are as follows: (a)Clause (1): "Each case is different and no accurate predictions are possible as to the likely time the case will require in court." (b)Clause (8): "The need for witnesses to use an interpreter to translate evidence may prolong the estimated hearing time of the client's case in court." (c)Clause (9): "The incidence of court delays may affect the accrual of interest." (d)Clause (10): "The case may be not reached or may be cancelled by the court despite listing fixtures and this source of potential delay may affect the extent of accrual of interest." (e)Clause (11): "The truthfulness of the evidence given in the client's case by all witnesses." (f)Clause (12): "The time taken for the trial judge to deliver judgment." (g)Clause (13): "The time taken for an appeal to be listed, argued and concluded by the delivery of judgment." (h)Clause (14): "The length of hearing time required in court is impossible to predict because this is dependant upon: (a) The ability of all witnesses to give a clear account of their evidence. [The rest of this document appears to be missing.]" 17Annexure 1, which contained Ms Nomchong's estimate of fees included at items 9 and 10: "9. Days in Court for hearing of the case: Unknown but approximately 10 days at $2,000.00 per day, namely $20,000.00 10. Preparation outside normal court sitting hours, including but not limited to transcript review, cross-indexing evidence for preparation of final submissions whilst the case is proceeding: Approximately 3 hours per day for 9 days, namely $8,100.00" 18The relevance of these provisions is that the plaintiff argues Ms Nomchong never "accepted" a brief to appear at the hearing, and the triggering event in clause 4, schedule 2 of Mr Stern's costs agreement therefore never happened. Mr Hughes, in his submissions in reply, says that the defendant could only be entitled to payment if there was evidence that this condition was satisfied, and that "there was no such evidence" (submissions in reply, paragraph 3). The mere fact that potential charges with respect to a possible hearing are set out in the costs agreement does not mean that it can be inferred that she accepted a conditional fee brief on hearing. Mr Hughes submitted that this was probably Ms Nomchong's usual practice, namely to disclose those charges whether she was briefed or not, in the event that she was briefed, and notes that the observations to her brief prepared by Mr Stern (affidavit of Mr Stern, page 213) are "silent on this point" (submissions in reply, page 3). There is some merit in this submission, as the brief was delivered in 1998, which seven years before the proceedings were actually listed for hearing (in 2005) for the June 2006 hearing date. 19The Review Panel accepted the plaintiff's submissions (see paragraph 3.4) that there was "heavy reliance" by the defendant on Ms Nomchong over the next eight years. The extensive nature of that work is clearly set out in the bill for assessment, and would be the factual basis relied upon by the Review Panel when determining disputed issues of fact, including the plaintiff's submission that Ms Nomchong had in fact never accepted the brief on hearing, as opposed to accepting a brief to advise during this period. The requirement for counsel to accept a brief to advise on a contingency basis was the second part of the "condition precedent" in clause 4 of schedule 2. The plaintiff does not challenge that Ms Nomchong accepted a brief to advise on a contingency basis, but argues that when she returned her brief after Mr Blacket SC refused to accept a conditional fee brief, this meant she had not "accepted" the brief at all. 20The description of the work for which Ms Nomchong was billing is inconsistent with her having refused to accept a brief on hearing. First of all, the hearing date of 26 June 2006 was actually set down a year in advance, according to her memorandum of fees (p 94 of the Affidavit of Mr Stern), probably as a special fixture because of its length. Ms Nomchong wrote to Mr Stern on 9 June 2005 advising that the hearing date for the proceedings allocated by the court was 26 June 2006, with an estimate of 40 days of hearing time; she went on to discuss further evidence to be served and the arranging of a conference. She appeared on the occasion the hearing dates were allocated and no doubt accepted those dates as being convenient to counsel who would be appearing (namely herself and Mr Blacket SC) as well as to witnesses. 21On 6 July 2005, a letter was sent to Mr Blacket SC advising the hearing date and length, and stating that a brief would be provided. 22On 17 January 2006, Mr Stern was preparing a brief to Mr Blacket SC and telephoned him "to confirm hearing dates diarised". Briefs on hearing were delivered. An offer of compromise was received and counsel was immediately consulted. 23On 24 February 2006, Mr Stern wrote to the plaintiff "advising on offer of compromise and advising Senior Counsel does not consider there are good prospects against the doctor and only fair prospects against the hospital and requesting instructions" (item 1380 in the bill of costs). In or about April 2006, Mr Blacket SC advised that he did not believe the case had reasonable prospects of success and was not prepared to accept a brief on a conditional fee basis. 24On 4 April 2006, the defendant wrote to the plaintiff as follows: "1. Senior Counsel says that you are unlikely to win this case and has declined to accept a brief on a conditional fee basis. 2. Junior Counsel has not yet, but is likely to take the same position. I am not prepared to run the risk of having a personal costs order against me on the basis that I continue to run with a case after senior counsel has withdrawn on the basis that the case has insufficient prospects of success." 25Mr Hughes submits that this letter is of significance. It shows that both counsel rejected the brief to appear at the hearing on a contingency fee basis. Ms Castle submits that both counsel had previously accepted the brief on hearing (in Ms Nomchong's case, in circumstances where she had been briefed on this basis for eight years) and that the date for any triggering event in Clause 4 had long passed. As Mr Stern's letter of 26 April 2006 shows (see paragraph 26 below), Ms Nomchong had previously held the view that the case had reasonable prospects of success. 26A verdict for the second defendant in the medical negligence proceedings, with each party to pay their own costs, was entered in April 2006. The action against the first defendant remained listed for hearing. 27On 26 April 2006, the defendant filed a Notice of Ceasing to Act. On 4 May 2006, the defendant wrote to the plaintiff saying, inter alia: "2. I ceased to act as a result of advice given to me by senior counsel, that in his view the case has no reasonable prospects. This was not the view previously held by junior counsel." 28The plaintiff then briefed her current solicitors to act for her. The hearing date of 26 June 2006 had been vacated prior to the defendant ceasing to act. 29The plaintiff's current solicitors acted for her from May 2006 until the claim against the remaining defendant was settled in November 2010 on the basis of what is agreed by the plaintiff to be "a payment to the plaintiff". The claim the plaintiff had on foot at the time had been "substantially amended" according to the plaintiff's outline of submissions (paragraph 16). This is of relevance because another of the submissions of the plaintiff is that the work carried out by the defendant borne no relation to the successful outcome of the claim. 30On 27 September 2012, the defendant's application for assessment of costs was filed in the Supreme Court. It was served on the plaintiff, but as she had moved interstate, it was not received. This followed unsuccessful attempts between the defendant and the plaintiff's solicitors to resolve the matter. Costs Assessor Mr J Levingston determined the matter on 18 February 2013. When the plaintiff learned of the assessment, an application for review was made on 2 May 2013, which was determined on 10 October 2013.

The Review Panel's findings 31The Review Panel noted at paragraphs 3.3 and 3.4: "3.3 The Assessor accepted that over a period of time subsequent to the first Costs Agreement signed in October 1998, several other Agreements had come into force and he assessed the bill accordingly. The Review Panel finds that the only signed Costs Agreement proved by the Review Applicant was that dated 24 October 1998 and accordingly there is no basis for assessing costs at higher rates than those disclosed therein. Those rates were based on the old Supreme Court Scales and the Panel has determined that the hourly rates to be applied should be $200 per hour for the solicitor and $100 per hour for work done by a clerk inclusive of skill, care and responsibility. 3.4 The Panel has accepted the submission on behalf of the Review Respondent that there was heavy reliance on junior counsel and it has taken a broad view of the bill." 32Substantial adjustments were made to reduce the bill to $41,689.76. The Costs Assessor provided the following relevant "further reasons to clarify the determination made in this review" as follows: "4.3 It is no longer contested that there was a successful outcome against the First Defendant, but not the Second Defendant. ... 4.5 Claims for work done involving the Second Defendant and involving the briefing of Mr Blacket SC have been disallowed in accordance with the objection of the Review Respondent. So have the fees claimed by junior counsel (a percentage of 35% in the case of the Second Defendant has been applied, except in the case of item 1498, where one half was reasonable). ... 4.11 By its letter dated 26 July 2013, Boyd House & Partners submitted that the Costs Agreement signed by its client, dated 24 October 1998 is a conditional costs agreement subject to a successful outcome. On 24 March 2006, Mr Blacket SC provided a written advice to the Review Applicant, in which he advised, inter alia, that "I do not believe that there is a case that has reasonable prospects of success". 4.12 On 4 April 2006 the Review Applicant wrote to the Review Respondent, stating, inter alia: "I am not prepared to run the risk of having a personal costs order against me on the basis that I continue to run with a case after senior counsel has withdrawn on the basis that the case has insufficient prospects of success." Subsequently, pleadings were the subject of amendment against the first defendant and eventually that case was settled."

The two main grounds of the appeal 33Although the plaintiff submitted that the Review Panel had erred in failing to give proper reasons in relation to the grounds set out below, relying upon Frumar v Owners of Strata Plan 36957 (2006) 67 NSWLR 321, in practical terms it was agreed that if there was an error of law in construction I should simply redetermine the matter. 34Taking this into account, the issues are essentially whether the Review Panel correctly construed the costs agreement in relation to what is asserted to be a condition precedent at clause (4) of Schedule 2, the requirement for counsel to "accept a brief on hearing" (ground 1 of the appeal), and that the Review Panel erred in holding that there had been a "successful outcome" against the remaining defendant in the medical negligence proceedings in the Supreme Court (grounds 2 and 3). 35I shall deal with each of these in turn

Appeal Ground 1 36The submissions by the plaintiff to the Review Panel on this issue are set out at page 77 of the Annexures to Mr Emanuel's affidavit at paragraphs 26 and 27 as follows: "26. The Costs Agreement dated 24 October 1998 (and the subsequent Costs Agreements if the submissions in paragraph 25 above is not accepted), has not come into effect because the condition precedent to the Costs Agreement coming into effect provided for in Clause 4 of Schedule 2 of the Costs Agreement has not been satisfied. The Review Applicant briefed Mr Blacket SC for the hearing. Mr Blacket did not accept the brief on the hearing on a conditional fee basis. This is confirmed in the letter from the Review Applicant to the Review Respondent dated 4 April 2006. That letter also confirms that Junior Counsel was likely to take the same position, a matter which clearly was correct given the subsequent decision of the Review Applicant to cease to act for the Review Respondent. As there has been no agreement by Counsel to accept a brief on hearing on a conditional fee basis, the Costs Agreement has not taken effect. 27. If any of the Costs Agreements are found to be in effect, Clause 13 of Schedule 2 of the Costs Agreement does not apply. The reason the Review Applicant ceased to act for the Review Respondent is not one of the circumstances set out in that clause, but rather, as the Review Applicant states in his letter to the Review Respondent dated 4 May 2006 he ceased to act as a result of the advice given by Senior Counsel that the case had no reasonable prospects of success. It is clear from the correspondence from the Review Applicant that that is the reasons for his decision to terminate his acting for the Review Respondent in the proceedings." 37The plaintiff's submission is that the return of briefs by Senior and Junior Counsel amounts to not accepting the brief, which triggers the "condition precedent" proviso in clause 4, schedule 2 of the defendant's cost agreement. The effective result is that no costs agreement is in place, and that the eight years of work the defendant and Ms Nomchong carried out (Mr Blacket SC not having rendered a bill) are a nullity. Mr Hughes added that the defendant is not entitled to these fees on a quantum meruit basis because the nature of the agreement between the plaintiff and defendant, whether the fee agreement was valid or not, was that it was work carried out on a conditional fee basis. 38At paragraphs 28 - 32 of his submissions, Mr Hughes summarises his argument as follows: (a)The plain language of the clause describing the requirement for counsel both to advise and appear at the hearing as a "condition precedent"; (b)The clause then provides that in the absence of such agreement the work would not be covered; (c)Any ambiguity in this clause should be construed contra proferentem, and the plaintiff be regarded as "a typical inexperienced client' in the sense that this phrase is used above by Dal Pont". (The "inexperienced client" reference actually comes from a frequently cited passage in Carradine Properties Ltd v D J Freeman & Co [1999] Lloyd's Rep PN 483; see Artahs Pty Ltd v Gall Stanfield & Smith [2013] 2 Qd R 202 at [63]). (d)There is nothing in the Costs Agreement that is inconsistent with this construction of the costs agreement. 39The parties agree that ordinary principles of contract construction applied to agreements such as the present (The Owners - Strata Plan No 45205 v Andreones Pty Ltd [2009] NSWSC 1189 at [23]) and that the court's interpretation task is to discover the intention of the parties from the whole of the instrument being construed, in an objective fashion (Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165). 40The principles of contractual interpretation require the court to consider what reasonable persons in the position of the parties would have understood the words to mean by reference to the text of the agreement, the surrounding circumstances known to the parties and the purpose or object of the transaction (Gardiner v Agricultural and Rural Finance Pty Ltd [2007] NSWCA 235 at [11]-[13]). It is not necessary to first conclude that words used are ambiguous without first having regard to these factors (Gardiner, supra) and, when interpreting words and resolving any ambiguity, the court should proceed in a common sense and non-technical way, giving the agreement a commercially sensible construction (Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 at 437). It is important to construe the agreement as a whole and to look at the words used in the agreement "so as to render them all harmonious" (Australian Broadcasting Commission v Australasian Performing Right Assn Ltd (1973) 129 CLR 99 at 109). 41The first objection raised by the plaintiff is that the Review Panel has not referred at all to her solicitors' submission to the Review Panel (see [36] above) that neither counsel ever accepted a brief on hearing, and thus the condition precedent referred to in paragraph 4 was never satisfied. Mr Hughes refers to the obligation of the Review Panel to give reasons, as explained by Giles JA in Frumar v Owners of Strata Plan 36957, supra, at [44]-[45]. 42Whether or not counsel (and in particular Ms Nomchong) was briefed to appear on the hearing was a question of fact for the Review Panel to determine. At paragraph 4, dealing generally with the submissions, the Costs Review Panel states that fees for the briefing of Mr Blacket SC "have been disallowed in accordance with the objection of the Review Respondent", and it appears to have been accepted that Mr Blacket SC (who never sent a bill) had not accepted a brief on hearing (paragraph 4.5). The Costs Review Panel does not refer at all to the submission that Ms Nomchong never accepted a brief on hearing. 43I note that the Review Panel's reasons do not need to be compelling, or even logical (Levy v Bergseng, supra) and that it is not necessary to deal with every argument in minute detail: Levy v Bergseng, supra, at [81], citing Our Town FM Pty Ltd v Australian Broadcasting Tribunal (1987) 16 FCR 465 at 481. 44Comparing the plaintiff's submissions to the Review Panel (at [36] above) and the Review Panel's decision explains how the Review Panel dealt with this submission. The plaintiff's submission to the Review Panel was that Mr Blacket SC's refusal to accept a brief was sufficient, and that his refusal meant the condition precedent of acceptance of a brief both to advise and on hearing had never been accepted. Ms Nomchong is referred to only as being likely to return her brief on hearing as a result. 45However, clause 4 of schedule 2 does not contain the limitation of "senior counsel". Ms Nomchong had accepted a brief on hearing in 1998 the terms of which are clear, having regard to her costs agreement, the work she did, and her view that the plaintiff had prospects of success. No argument was put to the Review Panel, or to me, that Ms Nomchong in fact had accepted the brief on hearing in 1998 but that her return of the brief she had accepted, which occurred two months before the hearing, constituted refusal to accept the brief. 46The Review Panel should have specifically stated that they rejected the plaintiff's submission that the condition precedent had never been satisfied because Mr Blacket SC returned the brief, in the same way that they noted that their rejection of the limitation argument. That would have made it clear whether they received the same submission that is put to me now, namely that Ms Nomchong never accepted a brief on hearing at all. That is not the end of the appeal, however, as the parties agree that if insufficient reasons have been given by the Review Panel, I should determine the questions of law raised in this appeal myself rather than return the costs assessment to the Review Panel. 47The Review Panel's failure to identify and deal with these arguments is unfortunate, but understandable in the context of documents showing Ms Nomchong had accepted a brief on hearing eight years beforehand and had carried out substantial work, including preparation for the hearing date that she herself had been instrumental in obtaining. There is ample evidence of Ms Nomchong accepting a brief, which was all she had to do for clause 4 of schedule 2 of the costs agreement to be satisfied. 48This view that Ms Nomchong's longstanding acceptance of a brief on hearing was difficult to challenge may receive some support from the second argument (see [36] above) put to the Review Panel. This was that, if the costs agreement was considered to remain in place because counsel had accepted a brief on hearing (which had thereafter been returned), Clause 13 of Schedule 2 of the Costs Agreement did not apply because the defendant's reason for ceasing to act for the plaintiff was not one of the circumstances set out in that clause. 49The first argument put to me is that the clause is void for uncertainty because "without limiting the circumstances in which we are otherwise may [sic] be entitled to cease to act for you" is meaningless as it is ungrammatical. It is ungrammatical in that it contains two verbs rather than one. However, giving the agreement a commercially sensible construction, rather than an interpretation which "flouts business common sense" (Antaios Compania Naviera S A v Salen Rederierna A B [1985] A C 191 at 201), the meaning is still clear; it is a list of circumstances in which termination may occur, but it is a list without limiting those circumstances. 50The second argument put to me is that the "circumstances" in which the defendant may terminate the agreement are limited to other circumstances in the costs agreement, which can only be under the condition precedent of clause 4 of schedule 2. If the condition precedent is not satisfied then the costs agreement does not come into effect, and the plaintiff is not liable to pay any costs. 51To adopt such an interpretation would be to limit the opening words "without limiting the circumstances". That is not a limitation of those circumstances to the circumstances in the costs agreement. Other reasons for termination, such as the defendant's obligations under the Act (in relation to a conflict of interest) could just as easily give rise to termination. The reason given by the defendant for termination of the retainer was expressed to be as a result of his obligations under the Act, and potential personal liability for costs, given the advice of Mr Blacket SC. This is in accord with business common sense. 52"Without limiting the circumstances" is an expression commonly found in statutes and contracts. Counsel could not take me to, and I could not find, any authority for the proposition that this phrase limits the circumstances in question to those set out in the statute or contract, or where issues of ambiguity of meaning arose as a result of its use. 53While the Review Panel should have stated its conclusions on these issues, the Review Panel made no error of law in accepting (as they obviously did) that the condition precedent in clause 4 of schedule 2 had been fulfilled, and that "without limiting the circumstances" meant precisely what it said.

Appeal ground 2 54The Review Panel stated at paragraph 4.3 that it was "no longer contested" that there was a "successful outcome" against the first defendant but not the second defendant. The plaintiff submits that this was "a clear error" of law. Alternatively the Review Panel failed to provide proper reasoning for arriving at such a conclusion. 55The plaintiff's submissions to the Review Panel stated that there had not been a "successful outcome" against the second defendant in the Supreme Court proceedings (affidavit of K Emanuel, 5 May 2014, p. 78). That is obvious, as well as undisputed, because while the proceedings were still being conducted by the defendant, the case was settled on the basis of judgment for the second defendant with each party to pay its own costs. The real issue before the Review Panel was whether the plaintiff had a "successful outcome" against the first defendant in those proceedings, against whom she obtained a financial settlement for an unknown sum. 56The plaintiff's solicitors submitted to the Review Panel that "there had not been a "successful outcome" because the opinion obtained by the defendant from counsel prior to his ceasing to act was that in effect the work he had done to date had not resulted in a case with reasonable prospects of success" (written submissions, paragraph 33). 57As to whether the Review Panel was entitled to arrive at this view, Ms Castle submits, and I agree, that the affidavit of Mr Emanuel, Annexure F, p. 78 at [28(b)], conceded there was an eventual settlement of the claim against the first defendant and restricted the claim of no successful outcome to the second defendant. 58The admission of the financial settlement and concession about what would follow was correctly made and noted as such by the Review Panel. The real issue between the parties was whether the eventual successful outcome triggered the defendant's right to be paid; in other words, the legal effect of the "successful outcome". That must be determined by a proper construction of the costs agreement, which clearly contemplated that there may be circumstances in which the defendant would cease to act, the effect that this would have on his right to payment, and the plaintiff's obligation to pay costs for such period of time that the costs agreement was on foot. 59The plaintiff submits that a "successful outcome" had not been achieved on a proper construction of the costs agreement for the following reasons: (a)The defendant ceased acting for the plaintiff prior to her obtaining any settlement. Clause 13 of schedule 2 has no application because the reason for ceasing to act does not appear in the list underneath "without limiting the circumstances", or alternatively because the reason for ceasing to act arises under clause 4 of schedule 2.Mr Hughes indicated in argument that he based this submission solely upon the terms of this agreement, and was not submitting that any legal practitioner who ceased to act in a conditional fee agreement could not recover fees at a late date if there was a "successful outcome". His argument is essentially a restatement of the argument under Ground 1 of the appeal, which I have rejected for the reasons set out above. (b)There can never be a "successful outcome" regardless of what might happen after the defendant ceased to act, because clause 4 of schedule 2 means there is no agreement and therefore no entitlement to payment that comes into effect unless counsel has accepted a brief. Further or alternatively, there cannot thereafter be any obligation to make any payment even if there is a condition subsequent, such as another counsel taking the brief and obtaining a successful outcome. (c)The subject matter of the costs agreement was the "work you require us to do" which was to conduct a medical negligence case. The construction placed on this is that the entitlement to payment only arises if the "work" carried out results in or contributes to a successful outcome. The plaintiff submits that the defendant has not established that the work that he and counsel performed during the eight years that they acted for the plaintiff even contributed to (let alone lead to) a "successful outcome". The statement of claim had to be amended, and the submission was that it was as a result of those amendments that the plaintiff achieved a successful outcome, not because of any work that the defendant or Ms Nomchong had done. The defendant, in correspondence provided to the Review Panel, pointed out that the amendments to the statement of claim were minor, the medical evidence the same, and the counsel he had recommended to take the matter over had done so. The real issue was whether there was a "successful outcome". "Successful outcome" was defined in clause 2 of schedule 2 as being settlement or judgment in the plaintiff's favour. The fact that the defendant did not obtain this successful outcome for the plaintiff does not disentitle him from claiming his fees. 60This ground (which is set out as grounds 2 and 3 of the appeal, but which Mr Hughes invited me to deal with as one ground, in the manner set out in his submissions) has not been made out. 61All grounds of appeal having not been made out, the summons will be dismissed with costs.

Orders (1)Extend time for the bringing of this appeal. (2)Appeal dismissed. (3)Plaintiff pay defendant's costs.

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: 03 July 2014