Legal Practice Act 2003 (WA), s 222

Legal Practitioners Act 1893 (WA), s 59, s 61

Plaintiff's costs taxed on practitioner and client basis

1 TEMPLEMAN J: The plaintiff in this action, Timothy Richard Stephenson, is, and was at all material times, a legal practitioner who practises as a barrister, as a member of the Western Australian Bar Association. The plaintiff claims that on 7 May 1999, he entered into a written costs agreement pursuant to s 59 of the Legal Practitioners Act 1893 (WA) (the 1893 Act) with the defendant, Christopher John Robert Conway-Cook, who was then the plaintiff's lay client.

2 The plaintiff sues on an account rendered to the defendant on 28 June 2002, in the sum of $49,732.18, which is said to be the balance owing for work carried out under the costs agreement. That work involved the plaintiff acting as counsel for the defendant in an action he had brought in the Supreme Court against the Town of Kwinana; in the subsequent appeal, and in providing advice and settling various documents.

3 The defendant contends that, as a matter of law, a barrister cannot sue for his fees. In any event, the defendant denies that he entered into a costs agreement with the plaintiff. The defendant contends that the plaintiff agreed to act for him on the basis that if he was successful in his action, the plaintiff would limit his fees to the costs recovered from the Town of Kwinana on a taxation.

4 The defendant contends in the alternative that if (which he denies) he did enter into a costs agreement with the plaintiff, that agreement is unreasonable; that it should be reviewed under s 222 of the Legal Practice Act 2003 (WA) (the 2003 Act) and should be cancelled.

5 The defendant contends that he has already paid to the plaintiff amounts far in excess of the taxed costs and reasonable fees for the work undertaken by the plaintiff in respect of the appeal and subsequent work. The defendant accordingly counterclaims for the difference between the amount he claims to have paid the plaintiff and the amount he accepts as being due.

6 The plaintiff contends that if he 'cannot ordinarily sue the defendant for his fees', the defendant is estopped from taking that point, having regard to the circumstances in which the plaintiff was requested to act, and did so.

7 On or about 18 July 1996, the defendant entered into a contract with the Town of Kwinana under which he was to be employed as its Executive Manager - Business Units for a period of five years from 24 July 1996, with options to extend his employment for two further periods of five years.

8 The Town of Kwinana terminated the defendant's employment by letter dated 4 July 1997.

9 The defendant considered that he had been dismissed unfairly. He commenced proceedings against the Town of Kwinana in the Western Australian Industrial Relations Commission. He was then represented by the Australian Services Union (ASU).

10 The ASU introduced the defendant to the solicitor Jon Long and his firm J A Long & Co (Longs). The purpose of the introduction was for the defendant to seek advice about the possibility of commencing an action for wrongful dismissal. However, the defendant was then unemployed and impecunious.

11 On 14 August 1997, the defendant attended at Longs' offices and met Paula Annette Martino, an employed solicitor. On 15 August, Ms Martino wrote to the defendant to confirm his instructions to review the materials he had left with her and to provide 'a written opinion regarding the various legal options available to you'. Ms Martino confirmed that she and the defendant had discussed his 'costs situation' and said it was the firm's policy to request moneys be held in trust before preparing a written opinion. She requested the defendant to sign and return an enclosed 'Client/Lawyer Agreement' (tb 259).

12 The agreement was in the form of a letter, also dated 15 August, which set out in some detail the terms on which Longs would provide legal services to the defendant. By cl 17, the defendant was asked to acknowledge that:

(i) the rates set out in the Client/Lawyer Agreement are in most instances higher than costs under the scale of fees approved by the Legal Costs Committee which would apply if there was not this Agreement.

(ii) Unless you agree to these terms, the payment due to us for your legal matter is controlled by scales fixed by the Legal Costs Committee which limit the amount of fees a solicitor and barrister can recover whatever the amount of time spent on your legal matter.

(iii) Those scales also limit the amount of money the losing party may pay to the winning party whether or not you sign this Agreement. (tb 85)

13 The defendant accepted in cross-examination that he had been employed by the Town of Kwinana in a senior executive position; and that in the trial of the action against the Town of Kwinana he had given evidence that he read and understood complex documents (ts 241).

14 The agreement contained a request that the defendant 'read carefully through the document'. The covering letter informed him that if he wished to discuss the agreement he should not hesitate to contact Ms Martino.

15 The defendant said in his evidence-in-chief that neither Mr Long nor any member of his staff explained the terms and effect of the costs agreement to him. However, in cross-examination, the defendant said he had no recollection of discussing the agreement with anyone at Longs. He said also that he had no recollection of reading the agreement before he signed it, but he thought it fair to say that he would have done so (ts 247). Ms Martino's evidence was that she could not recall discussing the agreement with the defendant (ts 395).

16 The defendant said he did not question cl 17 at the time because he did not understand 'the Legal Costs Committee phraseology' (ts 247). The defendant said:

I was in a situation where I signed the document that was put in front of me and [I] wanted the matter to proceed.

17 I accept the defendant's evidence that he has no recollection of signing Longs' costs agreement. That being so, I do not accept his evidence that he did not at the time understand the meaning of cl 17. Nor do I accept his evidence that the agreement was 'put in front of me'. This conveys the false impression that he was obliged to sign the agreement without reading it, simply because it was put in front of him and he wanted the matter to proceed. In fact, the defendant signed and dated the agreement on 18 August (ts 247).

18 Clause 17 of the costs agreement is expressed in clear terms. I am therefore satisfied, on the balance of probabilities, that the defendant read and understood it before he signed the document.

19 In about September 1997, the defendant commenced his action against the Town of Kwinana. Longs were on the record as his solicitors. They continued to act for the defendant until about August 1998, when he was no longer able to pay their fees. Longs therefore removed themselves from the record. In the meantime, the defendant had discontinued his application to the Industrial Relations Commission.

20 On 16 September 1998, the defendant filed a notice of intention to act in person. The defendant's evidence is that he did so with the assistance of Gregory Paul Mohen, a solicitor who was then employed by the Law Society as the co-ordinator of its Community Services.

21 The defendant's evidence was that he was in 'regular contact' with Mr Mohen, who provided him with procedural advice and helped to locate a law firm who would represent him, despite the fact that he would not be able to pay legal fees unless he was successful in his action.

22 The defendant made formal approaches to various solicitors and other contacts in an attempt to obtain legal representation, but without success. The defendant was still unemployed and had no income with which to pay legal fees.

23 Mr Mohen's evidence was that he first met the defendant in 1999, when the defendant was seeking assistance in obtaining legal representation. However, Mr Mohen gave his evidence almost entirely from his own recollection: he had not had access to the Law Society's file in order to refresh his memory. Not surprisingly, therefore, Mr Mohen's recollection was somewhat hazy. I prefer the defendant's evidence that he met Mr Mohen in 1998. However, nothing turns on this inconsistency.

24 Mr Mohen's evidence was that one of the services provided by the Law Society was that of referring people who were seeking legal assistance, but who might not have the ability to pay fees, to a number of firms and barristers who might be prepared to act in those circumstances.

25 Mr Mohen said there were no standard terms of engagement: each client, once introduced to a firm or barrister, was responsible for agreeing the terms of engagement.

26 Mr Mohen's role included meeting prospective clients and obtaining information about the nature of their claims. He would then assist the clients to contact firms or barristers who would be willing to act for them.

27 Mr Mohen said he handled approximately 200 referrals in 1999. He said he often had no involvement beyond setting up a meeting between the client and the prospective firm or barrister (exhibit 10).

28 It is not in dispute that Mr Mohen initially arranged for Raoul Cywicki, a fellow member of the plaintiff's chambers, to act as counsel for the defendant. However, Mr Cywicki became unavailable and the plaintiff agreed to act in his place. It is necessary to establish the precise sequence of events relating to these matters in order to resolve the issue as to the terms on which the plaintiff agreed to act.

29 It is not clear when Mr Cywicki agreed to act for the defendant, nor when he withdrew. However, it is common ground that the plaintiff met the defendant for the first time on 3 May 1999, at the plaintiff's chambers.

30 The plaintiff's evidence is that he agreed to meet the defendant only because Mr Cywicki told him he was unable to accept the brief from Mr Mohen, due to other work commitments. Mr Cywicki told the plaintiff he was free to accept the brief if he wished to do so.

31 The defendant's evidence is that he attended the first meeting with the plaintiff in company with Mr Mohen and that shortly after the meeting commenced, they were joined by Mr Cywicki. According to the defendant, Mr Cywicki explained that he was unable to assist and said that the plaintiff would be handling the matter.

32 Mr Mohen's evidence was that there was one meeting at which Mr Cywicki was present with the defendant, the plaintiff and himself.

33 The plaintiff's evidence is that Mr Mohen was not present at the meeting. In a lengthy attendance note, the plaintiff recorded only that he and the defendant were present. The plaintiff accepted in cross-examination that Mr Cywicki was present for a short time, for the purpose only of effecting an introduction (ts 57). The plaintiff gave that evidence also in a responsive witness statement, but not in his evidence-in-chief.

34 The plaintiff's evidence is that he was expecting Mr Mohen to attend with the defendant, but that he did not do so. The plaintiff said he tried to telephone Mr Mohen to find out why he had been delayed, but could not reach him. The plaintiff said that during the meeting, Mr Mohen returned his call and told the plaintiff that the firm of Wojtowicz Kelly would be acting for the defendant on the basis that they would be paid from the proceeds of any judgment.

35 I accept that the plaintiff's lengthy attendance note of the meeting of 3 May contains an accurate summary. It records that only the plaintiff and the defendant were present: and that the meeting commenced at 10.00 am and ended at 1.05 pm (tb 152 - 155). At that stage, there was an urgent need to obtain full legal representation because the trial of the defendant's action against the Town of Kwinana was listed to commence on 12 May. That being so, I think it likely that Mr Mohen's first priority on the morning of 3 May was to find a solicitor for the defendant, rather than to attend a meeting with counsel. It was accepted by the defendant that at his first meeting with the plaintiff, Wojtowicz Kelly had not been formally instructed (ts 7).

36 The plaintiff accepted it was possible that Mr Mohen might have been present for a short time at the commencement of the meeting and had then left (ts 57). However, the plaintiff said that was not his recollection.

37 On balance, I prefer the plaintiff's evidence that Mr Mohen was not present at the meeting. I think Mr Mohen's recollection that he was present at a meeting with Mr Cywicki results from a confusion with other occasions. Mr Mohen's evidence was that Mr Cywicki had assisted him in various matters. That being so, there must have been a number of meetings attended by Mr Mohen, Mr Cywicki and clients.

38 Even if, contrary to my view, Mr Mohen was present at the first meeting between the plaintiff and defendant, I would not regard that as critical. What is significant is that Wojtowicz Kelly did not agree to act as the plaintiff's instructing solicitors until after the meeting of 3 May had concluded. This is borne out by the evidence of Nova Natalie Oldfield, a solicitor who was then employed by Wojtowicz Kelly.

39 Ms Oldfield had no independent recollection of the matter but had refreshed her memory from Wojtowicz Kelly's file. The documents contained on the file included a telephone attendance note taken at 2.10 pm on 3 May, recording that Mr Mohen had telephoned John Wojtowicz, a principal of the firm, and asked him to return Mr Mohen's call. The message was 'Trial' (tb 181).

40 Mr Wojtowicz was not called to give evidence. However, from an attendance note made by Ms Oldfield, I infer that Mr Wojtowicz returned Mr Mohen's call and agreed that Wojtowicz Kelly would act.

41 Ms Oldfield's file note records a telephone conversation she had with Mr Mohen at 2.39 pm on 3 May. The note reads:

Re: New File

Spoke to Greg Mohen. John [Wojtowicz] and he agreed that I will instruct on trial of Conway Cook v Town of Kwinana. Tim Stevenson acting as barrister. Plaintiff has no money. If wins case will be able to afford fees. If loses, he expects the Defendant to force Plaintiff into bankruptcy so WK will have to wait in line with other creditors. Fax him standard costs agreement this afternoon and he will get Plaintiff to sign it.

Needs Appointment of Solicitors and Exparte Motion to subpoena witnesses in less than 14 days. Will prepare motion for us if we on record. Will fax court heading this afternoon.

NO (tb 181)

42 As foreshadowed in Ms Oldfield's file note, she faxed a copy of her firm's standard costs agreement to Mr Mohen at 2.50 pm on 3 May (tb 183 - 186).

43 Mr Mohen wrote the defendant's name and address and the name of the matter on the copy of the costs agreement he received by fax. Then, at 4.53 pm on the same afternoon, he faxed the document to the defendant (tb 193 - 195).

44 A few minutes later, at 4.58 pm, Mr Mohen faxed to Ms Oldfield a copy of the Town of Kwinana's minute of directions relating to the forthcoming trial. He did so under cover of a letter in which he said he had faxed Wojtowicz Kelly's costs agreement to the defendant and asked that he fax it direct to Ms Oldfield after the defendant had signed it (tb 187).

45 Ms Oldfield's evidence was that the costs agreement signed (as she presumed) by the defendant was returned to her firm under cover of a fax dated 3 May. The trial bundle contains a copy of the costs agreement signed by the defendant on 3 May 1999 (tb 193 - 195). However, the defendant's covering letter is not in evidence.

46 The defendant accepted that he had signed the agreement on 3 May. However, he said that:

[T]he arrangement for the payment of fees to Wojtowicz Kelly was made on my behalf by Mr Mohen with Wojtowicz Kelly. (ts 243)

47 I do not accept that evidence. It is contrary to Mr Mohen's evidence to which I have referred above (which I accept) that although he put prospective clients in touch with legal practitioners who might act for them, he did not become involved in the negotiation of fees. Although Mr Mohen forwarded Wojtowicz Kelly's costs agreement to the defendant, the defendant returned it to Wojtowicz Kelly, not to Mr Mohen.

48 Like the Longs costs agreement, the Wojtowicz Kelly agreement contained a provision that:

Without an agreement in writing with us regarding our remuneration for our services to you, we could only claim from you such moneys as are allowed under the applicable scales as determined by the Legal Costs Committee which in all probability would be less than the fees which we may claim from you should you sign this agreement.

49 The defendant said in cross-examination that he did not know whether he read the agreement in May 1999 'given the situation I was in' (ts 242). Because of the speed with which matters were unfolding as at 3 May 1999, and the fact that the defendant must have faxed the signed copy of the costs agreement to Wojtowicz Kelly shortly after he received it, I accept that he might not have read the document. However, whether or not he understood the terms of the agreement, there can be no doubt that he knew that Wojtowicz Kelly would not act for him unless he signed the costs agreement: and that this imposed on him a personal liability for Wojtowicz Kelly's fees.

50 On 6 May 1999, the plaintiff wrote to Ms Oldfield. He apologised for not previously confirming with her the terms of his acceptance of the brief. He continued:

I confirm that I am prepared to do the preparation and appearances at trial on the basis of the principles set out in Clyne v New South Wales Bar Association, that is, that accounts for my full fees will be rendered to you and, once the result of the proceedings is known, I will determine what amount, if any, I will seek by way of payment.

Owing to the complexity and the value of the claim I consider that the maximum allowances pursuant to the Supreme Court Scale are appropriate, and, will be allowed in any taxation of costs. Therefore, I intend to charge:

1. $270 per hour for getting up and for conferences which will probably have to take place out of hours during the trial, as I anticipate that there may be some further getting up to do even after the trial commences.
2. $2,300 per day for appearance at the trial. Part days will be charged pro-rata.
3. Normal scale fees for subsequent work, such as attending reserved decision, etc.
4. Photocopying expenses at 50c per page, fax expenses at 50c per page and clerk typing service at $35 per hour (since expenses are levied against members of chambers for these items).

I would add that whilst I would be prepared to consider waiving the whole or a significant part of professional fees in relation to this matter, it is unlikely that I would waive payment of the expense component in paragraph 4 above.

I should be grateful if you would explain these terms to your client as soon as possible and obtain his instructions and confirm them to me in writing. Please ensure that your client confirms that these terms apply to any work done prior to the date of his approval of these terms. (tb 1 - 2)

The plaintiff sent the letter to Ms Oldfield by fax.

51 On 7 May, Ms Oldfield wrote to the defendant enclosing a copy of the letter of 6 May received from the plaintiff. She said:

Dear Mr Conway

CONWAY COOK v TOWN OF KWINANA

SUPREME COURT ACTION NO 2071 OF 1997

We refer to the above matter and enclose a copy of a facsimile received from Mr Tim Stephenson. You will note that while he is prepared to consider waiving some or all of his fees, he is unlikely to waive payment of his expenses. A copy of the scale of fees referred to in Mr Stephenson's letter may be obtained from this office on request.

We note that the sum charged by Mr Stephenson for his services will be in addition to any sums charged by this firm for our fees and expenses.

We would appreciate written confirmation of your acceptance of the terms of Mr Stephenson's appointment. Please find enclosed an acknowledgment to be signed by you and returned to our office at your earliest convenience.

If you have any queries please do not hesitate to contact us.

Yours faithfully (tb 215) (emphasis supplied)

52 The acknowledgement to which Ms Oldfield referred was in the following terms:

ACKNOWLEDGMENT

To: Mr TR Stephenson

I, Christopher John Conway-Cook hereby acknowledge that I have read the letter from TR Stephenson of Wojtowicz Kelly dated 6 May 1999. I agree to the terms of Mr Stephenson's appointment and confirm that these terms will apply to all work done by him on my behalf.

Dated this day of May 1999

____________________________

Christopher John Conway-Cook (tb 216)

53 The defendant signed the acknowledgment and dated it 7 May 1999 (exhibit 2).

54 Wojtowicz Kelly's fax log report shows that a document of four pages was sent to the defendant's fax number at 9.17 am on 7 May 1999.

55 The acknowledgment signed by the defendant bears the imprint of a fax machine showing that the document was received at 9.18 am on that date. The fax (exhibit 2) is printed on thermal paper. I find as a fact that the fax machine then used by the defendant printed on thermal paper. The defendant said in cross-examination that he thought he had replaced the thermal machine by that stage. However, I am satisfied that he had not done so. There are other faxes received by him at about that time which are printed on thermal paper.

56 On 10 May, Ms Oldfield sent by fax to the plaintiff, a copy of the acknowledgment signed by the defendant on 7 May (tb 3).

57 The plaintiff contends that the exchange of correspondence and acknowledgment referred to above constitutes a costs agreement within s 59 of the 1893 Act. However, the defendant contends that the plaintiff did not intend to enter into a contractual relationship. I therefore turn to consider that issue.

Did the plaintiff intend to enter into a contract with the defendant?

58 In Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95, the High Court considered the 'general issue of intention to create contractual relations'.

59 In a joint judgment, Gaudron, McHugh, Hayne and Callinan JJ referred to the decision of Windeyer J in South Australia v The Commonwealth [1962] HCA 10; (1962) 108 CLR 130, 154, where his Honour said that despite the fact that the parties had made an arrangement which was capable of being contractual in nature:

[T]he circumstances may show that [the parties] did not intend, or cannot be regarded as having intended, to subject their agreement to the adjudication of the courts.

Because the inquiry about this last aspect may take account of the subject matter of the agreement, the status of the parties to it, their relationship to one another, and other surrounding circumstances, not only is there obvious difficulty in formulating rules intended to prescribe the kinds of cases in which an intention to create contractual relations should, or should not, be found to exist, it would be wrong to do so. Because the search for the 'intention to create contractual relations' requires an objective assessment of the state of affairs between the parties (as distinct from the identification of any uncommunicated subjective reservation or intention that either may harbour) the circumstances which might properly be taken into account in deciding whether there was the relevant intention are so varied as to preclude the formation of any prescriptive rules. Although the word 'intention' is used in this context, it is used in the same sense as it is used in other contractual contexts. It describes what it is that would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened (Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337 at 348-353, per Mason J; Royal Botanic Gardens and Domain Trust v South Sydney City Council [2002] HCA 5; (2002) 76 ALJR 436; 186 ALR 289). It is not a search for the uncommunicated subjective motives or intentions of the parties. (footnotes omitted)

60 In my view, the most compelling objective circumstance in this context is the well-established rule that a barrister cannot sue for his fees. Indeed, the plaintiff accepted that he knew of the rule at the time.

61 The rule was stated succinctly by Owen J in Larmont v Bruce Duncan Russell & Associates (Unreported, WASC, Library No 980281, 30 March 1998):

A barrister cannot sue for his or her fees but their payment is the professional responsibility of the solicitor.

The rule applies both to solicitors and lay clients: In re Le Brasseur and Oakley [1896] 2 Ch 487, 493 - 494.

62 However, Owen J went on to say 'but see Shand v Doyle, unreported; FCt SCt of WA; Library No 960510; 16 September 1996'. In that case, a barrister who sued his instructing solicitors for his fees was met with an application for summary dismissal of his claim on the basis of the above rule. The application was listed for hearing by a master, who adjourned it to the Full Court. That court was not prepared to depart from the rule on a summary judgment application, but held that the plaintiff barrister should be given the opportunity of testing the position at trial. However, the plaintiff did not take that opportunity. Although there was a trial, the parties resolved their differences before judgment was delivered.

63 This is not the place to consider whether the rule should be abandoned. The essential point is that 'an objective assessment of the state of affairs between the parties' must require the words they used in their correspondence in May 1999 to be construed in the light of the existence of a rule which precluded the plaintiff from suing the defendant for his fees.

64 Had the plaintiff intended to challenge the rule, it might have been expected that he would prepare a document which was addressed to the defendant and expressed to be a costs agreement. Instead, the plaintiff's letter on 6 May 1999 was addressed to Wojtowicz Kelly and sought their client's instructions: not - expressly at least - his agreement.

65 The plaintiff knew at the time that Wojtowicz Kelly had agreed to act as his instructing solicitors only on the basis that they would not be responsible for his fees. However, in my view, that fact does not give rise to a necessary inference that the plaintiff intended to enter into an agreement with the defendant. It is equally consistent with an attempt by the plaintiff to create a situation in which it would be difficult for the defendant to dispute the fees he was charged. The plaintiff's evidence was that he expected any judgment sum awarded to the defendant to be paid to Wojtowicz Kelly, and held in trust by them.

66 I do not overlook the plaintiff's evidence that he told the defendant, at a meeting on 4 May 1999, that he required him to enter into a retainer agreement. That is not an 'uncommunicated subjective intention' which, as the High Court said in Ermogenous' case, should not be taken into account. However, for reasons to which I shall refer below, I do not accept that evidence.

67 I therefore conclude that in the circumstances as I have found them to be, the plaintiff did not intend his letter of 6 May 1999 to form the basis of a contractual relationship with the defendant.

If there was a costs agreement, did it fall within s 59?

68 If I am wrong in this conclusion, I would accept that the exchange of correspondence and the acknowledgment signed by the defendant on 7 May 1999, created a contract between the parties. This is on the basis that the plaintiff's letter of 6 May 1999 to Wojtowicz Kelly contained an offer by the plaintiff to 'do the preparation and appearances at trial' in accordance with the principles set out in Clyne v New South Wales Bar Association [1960] HCA 40; (1960) 104 CLR 186 and to render accounts for his fees to that firm.

69 Although the letter was addressed to Wojtowicz Kelly, the plaintiff intended that his offer should be communicated to the defendant. That is because Wojtowicz Kelly had agreed to act as the plaintiff's instructing solicitor only on the basis that they incurred no liability for his fees. The plaintiff therefore asked Wojtowicz Kelly to:

[E]xplain these terms to your client as soon as possible and obtain his instructions and confirm them to me in writing.

This, I think, is effectively a request to Wojtowicz Kelly to ask the defendant whether he accepted the plaintiff's terms.

70 That is clearly the way in which Wojtowicz Kelly interpreted the plaintiff's letter. In their letter of 7 May, which enclosed the plaintiff's letter, they said:

We would appreciate written confirmation of your acceptance of the terms of Mr Stephenson's appointment.

71 The acknowledgment, prepared by Wojtowicz Kelly, was addressed to the plaintiff. It contained the words:

I agree to the terms of Mr Stephenson's appointment and confirm that these terms will apply to all work done by him on my behalf.

72 Although the defendant returned the signed copy of the acknowledgment to Wojtowicz Kelly, they communicated that acceptance to the plaintiff by sending him a copy of the document.

73 I therefore consider that, viewed objectively, and assuming an intention to enter into a contractual relationship, the effect of the acknowledgment referred to above was that an agreement would be found to exist between the plaintiff and the defendant which could be summarised as follows:

I [the defendant] agree to pay you [the plaintiff] your professional fees for the preparation and appearance at the forthcoming trial rendered to Wojtowicz Kelly and based on the charges set out in your letter of 6 May 1999 to that firm.

I acknowledge that if I am unsuccessful in my action, you may waive some or all of your professional fees but that you are likely to require payment of expenses which you have incurred on my behalf.

74 It is immaterial that the agreement would be constituted by a series of documents: Jovetic v Stoddart & Co (1992) 7 WAR 208, 218.

75 The question would then arise, whether the agreement fell within s 59 of the 1893 Act.

(1) A practitioner may make a written agreement with any client of that practitioner respecting the amount and manner of payment for the whole of any part or parts of any past or future services, fees, charges, or disbursements in respect of business done or to be done by such practitioner, either by a gross sum or otherwise howsoever.

77 The term 'practitioner' is defined in s 3 of the Act:

'practitioner' shall mean a person admitted and entitled to practise as a barrister and solicitor of the Supreme Court of Western Australia, for the purposes of Part IV includes a person who is entitled by virtue of a law of the Commonwealth to perform in Western Australia the functions of a barrister or solicitor, for the purposes of Part V includes a firm of practitioners of which the person is a member and for the purposes of Part IV and Part VA includes a person who has been a practitioner.

78 Although the terms 'barrister' and 'solicitor' appear in that definition, they are not defined terms. However, the definition appears to recognise a distinction between the functions of barristers and solicitors, at least for the purposes of pt IV. That part is concerned with professional conduct and discipline. And by s 58D, which appears in pt VA, the Legal Practice Board (as it then was) was empowered to appoint a certificated practitioner to be the 'supervising solicitor' of a practice carried out by a practitioner who had been suspended from practice or whose practice was restricted in some way.

79 Section 59 appears in pt VI which is entitled 'Solicitors' costs'. By s 32(1) of the Interpretation Act 1984 (WA), that heading forms part of the written law. Although s 59(1) is expressed to apply to practitioners generally, I assume the heading was intended to reflect the fact that only solicitors could sue for their fees. However, for present purposes, I am ignoring that rule.

80 Practitioners who are elected to the Western Australian Bar Association (as the plaintiff was, in 1996) appear before the Full Court (now the Full Bench) to announce - and sometimes to undertake - that they intend to practise only as barristers. However, even when an undertaking is given, it is purely voluntary. A barrister who wishes to return to the amalgam does not need the leave of the court to do so. I therefore consider that an admitted practitioner who holds a practising certificate is entitled to practise as barrister and solicitor, even if he or she chooses to practise only as a barrister. That conclusion is supported by the decision of Starke J in Crase v Downey [1982] VicRp 80; [1982] VR 803, 804 - 805.

81 In my view, that is so whether or not the practitioner carries professional indemnity insurance appropriate to his or her mode of practice. It is not a statutory requirement that a practitioner be insured.

82 I therefore conclude that the plaintiff would be regarded as being a practitioner within the meaning of s 59 if he entered into an agreement with the defendant in May 1999. It would then be necessary to consider whether the defendant was the plaintiff's client, for the purposes of s 59.

83 Ordinarily, a barrister has two clients: the instructing solicitor - often described as the professional client - and the lay client.

84 A practitioner who practises as a barrister and solicitor in a fused profession may also have two clients. That would be so if, for example, the practitioner was briefed by another practitioner to act as counsel on behalf of the second practitioner's lay client.

85 I do not therefore regard the term 'client' in s 59 to mean anything other than a person who utilises the services of the practitioner, either directly or indirectly. This view is supported by Clyne's case, where the High Court referred to the lay client of the appellant barrister as 'a client of his': see [1960] HCA 40; (1960) 104 CLR 186 at page 188.

86 I therefore conclude that if the plaintiff and the defendant entered into a costs agreement, the defendant was the plaintiff's client, and that the agreement would therefore fall within s 59 of the 1893 Act.

If there was an agreement, what was its scope?

87 As I have noted above, in his letter dated 6 May 1999 to Wojtowicz Kelly, the plaintiff offered to carry out work in connection with the then imminent trial of the defendant's action against the Town of Kwinana. Although in the defendant's acknowledgment he confirmed that the terms offered by the plaintiff would apply to 'all work done by him on my behalf', that was clearly intended as a reference to work carried out by the plaintiff before the defendant signed the acknowledgment. In other words, the defendant's acceptance of the terms offered by the plaintiff would not extend the scope of the agreement to any work which might be carried out after the conclusion of the trial.

88 So far as relevant, s 61 of the 1893 Act provides:

If after any such agreement as is referred to in section 59 is made and before the full performance thereof, the practitioner shall die, become incapable to act (unless such incapacity is caused by the practitioner being struck off the roll, or suspended from practice), or cease to practise in Western Australia, or the client shall die or change solicitor, the agreement shall, subject to subsection (2), cease and be void ...

89 The defendant points to the fact that he did change solicitor after the conclusion of his action against the Town of Kwinana. Wojtowicz Kelly ceased acting for the defendant: he appointed Ms Martino to act for him in relation to the appeal. Ms Martino had left Longs and was then a sole practitioner.

90 In my view, the change of solicitors is of no significance for two reasons. First, as I have held above, if there was a costs agreement between the plaintiff and the defendant, it related only to the trial. Secondly, and more fundamentally, I consider that the reference to the solicitor in s 61 is intended as a reference to the practitioner with whom the client has entered into a costs agreement.

91 In other words, if, having entered into a costs agreement with a practitioner, the client changes his practitioner before the agreement has been performed fully, the agreement becomes void (subject to s 61(2), which is not relevant for present purposes).

If there was a costs agreement, should it be reviewed?

92 The defendant pleads in par 13 of his defence that if, which he denies, he and the plaintiff entered into a written agreement pursuant to s 59, that agreement is unreasonable because 'it was made in circumstances which were unreasonable to the defendant'. The defendant therefore contends that the agreement should be reviewed, pursuant to s 222 of the 2003 Act.

(a) the defendant was unemployed and had no income and no significant assets;

(b) the defendant was unrepresented in the proceedings;

(c) the trial in the proceedings was due to commence on 12 May 1999;

(d) the defendant had, from 16 September 1998 until the time of entry into the agreement, been unable to obtain any legal representation in respect of the proceedings.

(e) the plaintiff orally represented to the defendant on two occasions in early May 1999 prior to entry into the agreement that the defendant would only be liable to the plaintiff to the extent of the party and party costs (if any) determined to be payable by the Town of Kwinana in the proceedings and the appeal for the work and services performed, by the plaintiff on the defendant's behalf as Counsel in the proceedings and the appeal;

(f) the plaintiff failed to make full disclosure to the defendant then or at any other time of the existence of statutory scales that limit costs, that statutory scales limit the costs recoverable from the opposing party; the principles underlying the statutory scales; the limits and benefits of the statutory scales and the effect and consequences of the agreement upon the application of the statutory scales.

94 I accept that the facts alleged in (a) to (d) above were true. That being so, the defendant was undoubtedly in dire straits when the plaintiff agreed to act for him in his forthcoming actions. The defendant's circumstances were such as to make particularly relevant the judgment of Fletcher Moulton LJ in Clare v Joseph [1907] 2 KB 369, 376. In a passage to which Ipp J referred in Brown v Talbot & Olivier (1993) 9 WAR 70, Fletcher Moulton LJ said, in relation to costs agreements:

They were, however, viewed with great jealousy by the courts, because they were agreements between a man and his legal adviser as to the terms of the latter's remuneration, and there was so great an opportunity for the exercise of undue influence, that the courts were very slow to enforce such agreements where they were favourable to the solicitor unless they were satisfied that they were made under circumstances that precluded any suspicion of an improper attempt on the solicitor's part to benefit himself at his client's expense.

95 Having cited that passage (in Brown v Talbot & Olivier) Ipp J said:

It emphasises how important it is for solicitors, when entering into agreements with their clients whereby they seek to impose a costs regime different to that which they in the ordinary course would be entitled, to ensure that there is no suggestion of any over-reaching on their part. (77)

96 Ipp J went on to express the view that any agreement which sought to remove the limits imposed by the scale would be regarded as unreasonable if full disclosure was not made of the limits and benefits provided by the scale and the effect and consequences of the proposed agreement. His Honour said:

The obligation to make a full and frank disclosure of this kind is an integral part of the duty owed by lawyers to their clients.

97 In support of that proposition, his Honour cited a passage from the judgment of Street CJ in Law Society (NSW) v Harvey [1976] 2 NSWLR 154:

Where there is any conflict between the interest of the client and that of the solicitor, the duty of the solicitor is to act in perfect good faith and to make full disclosure of his interest. It must be a conscientious disclosure of all material circumstances, and everything known to him relating to the proposed transaction which might influence the conduct of the client ... To disclose less than all that is material may positively mislead. (170)

98 I pause to note that in Re Robb (1996) 134 FLR 294, 315 - 316, the Full Court of the Australian Capital Territory referred specifically to the duty of a practitioner acting on the basis of Clyne's case. The court said:

However, the recognition by the courts and by the legal profession itself of the propriety of the speculative action by no means requires or justifies a relaxation of the standards of professional conduct on the part of lawyers who are prepared to act for plaintiffs on a speculative basis. The conflicts of interest remain, and the need for the solicitor to act, aware of the conflicts and astute to the fiduciary role, is not diminished.

99 Returning to Brown v Talbot & Olivier: Ipp J held that the material circumstances which might influence a client in deciding whether or not to enter into a costs agreement and which should be disclosed expressly, would include the following:

(a) The fact that the remuneration of solicitors was governed by statutory scales which limited the amount of solicitors' and counsel's fees which could be recovered, irrespective of the amount of time devoted by the solicitors to the proceedings: cf Jovetic v Stoddart & Co.

(b) The fact that the scales limited both the costs which the client could recover from the opposing party to the proceedings (if the client were to succeed in the case), and the costs recoverable from the client by the client's solicitors: cf Jovetic v Stoddart & Co.

(c) The principles underlying the charging of fees under the scales, and also the basis of the proposed charging under the contemplated agreement.

(d) Estimates, if they could reasonably be made, of the approximate amount of the solicitors' fees and counsel's fees (as between solicitor and client) which would be recovered on taxation under those scales, and the approximate amount recoverable under those scales from the opposing party - if the client were to be successful: cf Jovetic v Stoddart & Co; Burgess v D'Alessandro & Associates (unreported, Supreme Court, WA, Library No 2278/91, 6 May 1992).

(e) An estimate, if that were reasonably possible, of the amount which the client would have to pay the solicitors under the proposed agreement if the litigation were to prove successful (and costs were to be recovered from the opposition) and, also, the amount which the client would have to pay if the litigation were to be unsuccessful: cf Jovetic v Stoddart & Co.

(f) Whether (if it were not reasonably possible to give estimates of the kind referred to in subpars (d) and (e) above) there was a real risk of the costs under proposed agreement being more - and significantly more, if that were the case - than under the appropriate scale. (77 - 78)

100 I do not understand the plaintiff to contend that his letter of 6 May 1999 satisfied the requirements set out in (a) to (f) above. Clearly the letter could not do so: all that was said in relation to those matters was that:

Owing to the complexity and value of the claim I consider that the maximum allowances pursuant to the Supreme Court Scale are appropriate, and, will be allowed in any taxation of costs.

101 I accept that as at 6 May, when the plaintiff had only recently been instructed, it would have been difficult for him to provide an estimate of his costs. Further, the amount which the defendant would have to pay if the litigation were to be unsuccessful was probably academic because the defendant had no funds in any event.

102 As to (f) above, the plaintiff did not suggest in his letter that there was the slightest risk of a shortfall between the costs he would charge under the agreement and the costs which might be recovered from the Town of Kwinana.

103 The plaintiff contends that he made sufficient disclosure of the circumstances relating to costs at a meeting at his chambers on 4 May 1999 at which the defendant, Mr Mohen and Ms Oldfield were present.

104 In his evidence-in-chief, the plaintiff said he told those present at the meeting that he intended to charge at $270 per hour for his work and at $2,300 per day for the trial. The plaintiff said he believed his fee was justified as the matter appeared to be complex and that the rates he proposed to charge were more than, but close to, the maximum rates of charge allowable under the Supreme Court Scale. The plaintiff said he remarked to the defendant that the maximum rate might be payable by the Town of Kwinana if they lost the case and he received an order for costs. He said therefore there should 'hopefully be a high percentage of costs' recovered from them as 'party and party costs'. The plaintiff said he told the defendant that he did not know how much that might be; and it was not likely to be all of the costs charged. The plaintiff said he was about to explain to the defendant what the scale rates were and what 'party and party costs' meant in more detail, but the defendant said he understood from speaking to his previous lawyer (which the plaintiff understood to be a reference to Longs) what this meant and that there was always a difference between what he might be charged by his own lawyers and what the other party might be required to pay. The plaintiff said he then said nothing further.

105 The plaintiff said he recalled the defendant making 'a witty joke' the terms of which he could not recall but in which there was an insinuation by the defendant about the greediness of lawyers leading to the client receiving nothing.

106 The plaintiff said the defendant then said he appreciated that both the plaintiff and Ms Oldfield were prepared to work for him for what might turn out to be nothing if he did not win his action and that:

We therefore deserve to be paid in full for what we did even if that meant he would not receive all of his judgment.

107 The plaintiff said he told the defendant that he would certainly try to maximise the amount of costs recovered by the defendant if he did win the case but that he was unable to say in advance what the difference between the amount he would be charged and the amount he might receive would be. According to the plaintiff, the defendant said he understood this.

108 The plaintiff said he went on to explain to Mr Mohen and Ms Oldfield that he was prepared to work 'on the basis of Clyne v Bar Association of NSW'. The plaintiff said that because he had already started work, he expected his costs agreement to apply to any work carried out before the agreement was signed: and that because he expected to have to wait for receipt of the proceeds of any successful judgment for payment of his fees, he required the defendant to agree that Wojtowicz Kelly would hold any judgment sum in trust for the payment of his fees. The plaintiff said that in response, Ms Oldfield said words to the effect that she did not foresee any difficulty in this, as her firm would expect the defendant to agree to the same arrangements for their costs.

109 The plaintiff said he told Ms Oldfield that he would render his accounts care of Wojtowicz Kelly because they would need to know how much was owed to him if they received a judgment sum. The plaintiff said he told the defendant that because he would be charged by his chambers for photocopying and typing, he wanted the defendant to agree to reimburse him for those amounts. He said he told the defendant also that because he would be paying for those services, they were probably the only amounts he would not consider waiving. The plaintiff said:

The defendant said he agreed to all of my conditions and said words to the effect that he had expected no less.

110 This very detailed evidence is contained in a witness statement made by the plaintiff on 29 January 2008, nearly nine years after the events in question. As I understand it, the evidence is based purely on the plaintiff's recollection, without assistance from any contemporaneous note.

111 Ms Oldfield's evidence-in-chief was that on 6 May 1999, Wojtowicz Kelly received a 19 page fax from the plaintiff. Ms Oldfield said she recognised the first two pages of the fax as being

the Retainer Agreement which [the plaintiff] had proposed to enter into with the client and which had been discussed at an earlier meeting.

112 However, in cross-examination, Ms Oldfield said that those words had been put into the witness statement by the plaintiff and not by her. Ms Oldfield could not recall such a discussion at an earlier meeting (ts 219).

113 Mr Mohen said he could not recall a meeting at which he, Ms Oldfield, the plaintiff and the defendant were present at which there was discussion of hourly rates and day rates for trial (ts 376). Indeed, Mr Mohen said he had no recollection of the discussion to which the plaintiff referred in his evidence, as summarised above.

114 The plaintiff's evidence is inconsistent with his account dated 26 July 1999. It is an extremely detailed account, recording all the work said to have been carried out by the plaintiff on the defendant's case, including meetings and telephone attendances (which are even recorded as being either incoming or outgoing calls). The time engaged is recorded precisely: even down to telephone calls of two minutes.

115 The account records that on 4 May 1999, the plaintiff attended on the defendant from 9.15 am to 12.30 pm (195 minutes). It is then recorded that the plaintiff attended on Mr Mohen and Ms Oldfield from 2.30 to 3.50 pm (80 minutes).

116 There is no record of any meeting attended by the plaintiff, the defendant, Ms Oldfield and Mr Mohen together on 4 May.

117 The plaintiff's invoice of 26 July 1999 records a meeting on 5 May which was attended by the defendant, Mr Mohen and Ms Oldfield. The meeting is said to have been held between 2.00 and 5.30 pm (210 minutes).

118 In par 3.2 of his original reply, the plaintiff alleged that on 4 May 1999, Ms Oldfield and Mr Mohen attended at his chambers, when he was informed that Wojtowicz Kelly would act as solicitors on the record for the defendant in his action, but that the firm would not agree to be responsible for the plaintiff's fees for acting as counsel. The plaintiff alleged that he agreed to this, but said that as a condition of his acting as counsel he would seek a written retainer agreement from the defendant to pay his fees.

119 In par 3.3 of his reply, the plaintiff alleged that on 5 May at his chambers, he informed the defendant, in the presence of Ms Oldfield and Mr Mohen, of the discussions and agreement pleaded in par 3.2.

120 On the second day of this trial, the plaintiff was given leave to amend (inter alia) par 3.3 of his reply to allege that the meeting took place on 4 or 5 May 1999. By then, the plaintiff had been cross-examined about the meeting and had accepted that his recollection of the date might have been incorrect (ts 63).

121 It will be recalled that in the opening paragraph of his letter dated 6 May 1999 to Wojtowicz Kelly, the plaintiff said that:

Due to the need to get on with trial preparation as soon as possible, I apologise that I have been unable to confirm with you the terms of my acceptance of this brief. (emphasis supplied)

The fact that the plaintiff used the word 'confirm' suggests that he had discussed these matters previously with Ms Oldfield. However, it will be recalled also that in the penultimate paragraph of his letter he said:

I should be grateful if you would explain these terms to your client as soon as possible and obtain his instructions and confirm them to me in writing. Please ensure that your client confirms that these terms apply to any work done prior to the date of his approval of these terms. (emphasis supplied)

This form of words suggests that the defendant had not been told previously what the plaintiff's terms would be.

122 Taking the evidence as a whole, I do not accept the plaintiff's evidence that he informed the defendant on 4 or 5 May 1999 of those matters relating to costs which might have satisfied the duty of disclosure as set out in Brown v Talbot & Olivier. Nor am I satisfied that the plaintiff ever made such disclosure to the defendant.

123 I am prepared to accept that the plaintiff discussed his terms with Ms Oldfield and Mr Mohen on 4 or 5 May, but not that he did so in the presence of the defendant: nor that he so informed the defendant subsequently.

124 As I have noted above, the plaintiff accepted in cross-examination that his recollection about the dates of meetings might be faulty. However, he asserted that his recollection of the discussions was accurate (ts 63). I do not accept that to be the case. I consider that the plaintiff's evidence is largely a reconstruction of a discussion which he would like to think he had with the defendant, but did not do so.

125 The defendant's evidence was that he first discussed counsel fees with Mr Mohen, who telephoned him to say that he had arranged for Mr Cywicki to represent him.

126 The defendant said he asked Mr Mohen if Mr Cywicki was aware that he was 'broke' and that Mr Mohen told him he had informed Mr Cywicki. The defendant said he then asked Mr Mohen what would happen about Mr Cywicki's fee. The defendant said Mr Mohen answered in words to the effect:

If you win you'll get your costs from the defendant.

The defendant said he asked Mr Mohen what would happen if he lost. He said Mr Mohen replied, in substance, that Mr Cywicki was taking a commercial risk and that if the defendant lost his action he would have no money with which to pay Mr Cywicki.

127 The defendant said that on the day he was expecting to meet Mr Cywicki (which, I have found, was 3 May 1999) he met Mr Mohen at his office and they walked together to Mr Cywicki's chambers. The defendant said that during the walk, Mr Mohen told him that Mr Cywicki was no longer available but that the plaintiff had agreed to act and that they would be meeting him on that day. According to the defendant, Mr Mohen told him further that Wojtowicz Kelly would be acting as the instructing solicitors, but he did not think they would be at the meeting.

128 The defendant then said he asked Mr Mohen whether the plaintiff knew he was 'broke' and whether he would be paid on the same basis as Mr Cywicki had agreed 'so that he gets his fee from the Town of Kwinana if we win'.

129 The defendant said Mr Mohen replied, in substance 'Yes, we'll talk about that when we get there but I explained your circumstances'.

130 Pausing there, I do not accept the defendant's evidence thus far. I do not accept that he and Mr Mohen walked to counsel's chambers on the morning of 3 May because, for the reasons given above, I have found that Mr Mohen was not present at the meeting between the plaintiff and the defendant on that morning.

131 Further, I do not accept the defendant's evidence that Mr Mohen told him on the morning of 3 May that Wojtowicz Kelly would be acting as solicitors. That is because I have found that Wojtowicz Kelly did not agree to act until the afternoon of 3 May, at the earliest.

132 Further, while I am prepared to accept that Mr Mohen might at some stage have told the defendant, in general terms, that if he was successful in his action, his costs would be paid by the Town of Kwinana, I do not accept that Mr Mohen said anything to the defendant which could reasonably have led him to believe that the plaintiff had committed to acting for him on the basis that he would restrict his fees to amounts recovered from the Town of Kwinana.

133 Mr Mohen had no recollection of discussing the form of the plaintiff's retainer with the defendant (ts 374).

134 Returning to the defendant's evidence: he said that at the meeting he said words to the effect:

While we are all together, can I be sure that there is no doubt. My only ability to pay for any representation depends entirely on the outcome of the trial and if we win we get your fees from the other side, and if I lose I have nothing and I will be unable to pay you. I need to be sure that everyone understands the situation. I have fought this whole thing on my own. They have broken me financially but I haven't let them break my spirit. I'm fighting this as a matter of honesty, ethics, fair play and decency so I don't want anyone here to be under any misconception about where I am at financially.

The defendant said Mr Mohen, Mr Cywicki and the plaintiff all made comments to the effect 'We know' and 'that's understood'.

135 The defendant said the plaintiff then commented, in substance, that a trial was not run on arguments of decency, ethics and fair play but on matters of law.

136 The defendant said the plaintiff then told him, in substance, that the costs of the trial would be at least $15,000, probably $20,000 but possibly as much as $25,000. The defendant said he replied to the effect:

Tim, to be quite clear, you know I'm broke, I can't pay you anything. If we win you get paid by the other side, Kwinana pays your bill?

137 According to the defendant, the plaintiff replied in substance:

Yes, just like you have to pay their's if you lose and Mallesons won't come cheap. [Mallesons were the solicitors for the Town of Kwinana]

138 The defendant said that soon after this discussion, Mr Cywicki excused himself from the meeting and that the plaintiff and defendant then had a brief discussion about the preparation for the trial.

139 The defendant said the meeting lasted approximately 50 minutes.

140 Again, I do not accept this evidence. I have found that Mr Mohen was not present. I have found also that Mr Cywicki left the meeting after explaining to the defendant that he was no longer able to act for him and introducing the plaintiff.

141 I do not accept that the discussion between the plaintiff and the defendant was brief. As I have noted above, the plaintiff's contemporaneous note of the meeting, which I have accepted as accurate, records that he took detailed instructions from the defendant and that the meeting ran from 10.00 am to 1.05 pm (tb 152 - 155).

142 As appears in the particulars of par 13(a) of the defence, which I have set out above, the defendant contends that the plaintiff represented to him on two occasions in early May 1999, before he entered into the costs agreement, that the defendant would be liable to the plaintiff only to the extent of the party and party costs for which the Town of Kwinana might be held liable if it was unsuccessful in the action.

143 According to the defendant, the second occasion on which costs were discussed was at a meeting at the plaintiff's chambers on 7 May at which Ms Oldfield was present, for at least part of the time.

144 The defendant said that at some time during the meeting, the plaintiff handed him a document consisting of three pages. He could not recall whether Ms Oldfield was present at that time.

145 The defendant said the document was handed to him with the last page on top and that the plaintiff asked him to sign that page.

146 The defendant said he read the single paragraph on the page and noted the spaces left for signing and dating. He said he asked the plaintiff about the reference to a letter dated 6 May 1999 from him to Wojtowicz Kelly. This is clearly a reference to the acknowledgment prepared by Ms Oldfield.

147 The defendant said the plaintiff turned over the front two pages he had handed to him and showed him the letter dated 6 May referred to above. The defendant said he read the letter quickly and asked the plaintiff what was meant by the reference to Clyne v New South Wales Bar Association. He said the plaintiff told him words to the effect:

The letter is a professional formality between instructing solicitors and me as counsel. It is merely a formality. Even though you are unable to pay for my services, I am prohibited as a lawyer from working on a contingency basis. That is, I can't accept this case on the basis that I would receive a percentage of any damages awarded in the event of a win. This letter is just my way of protecting myself in terms of my professional obligations which arise out of the decision in Clyne.

148 The defendant said that during the conversation the plaintiff also told him in substance:

It is normal procedure for solicitors to be responsible for paying a barrister, however although I will still be rendering my accounts to Wojtowicz Kelly, they will not be responsible for paying them. My fees will only be paid if you win the trial.

149 The defendant then said he asked the plaintiff whether this impacted on his understanding of the financial arrangement between them:

Do I have it right? If we win, all my legal costs are paid by the Town of Kwinana?

The defendant said the plaintiff answered 'Yes' to which the defendant asked whether if he lost the trial 'we both miss out?' To that, the plaintiff replied:

Yes, but you wouldn't be here if I thought you were going to lose.

150 The defendant said he then asked whether, if he won the case, he would recover the money he had paid Longs. He said the plaintiff replied 'We'll include it in the costs for you'.

151 The defendant said he then signed the acknowledgment.

152 According to the defendant, the plaintiff told him that he would photocopy the document, keep a copy for his file and provide the original to Wojtowicz Kelly.

153 Again, I do not accept the defendant's evidence. I have already found that the defendant received the acknowledgment via his home fax machine which printed on thermal paper. That was the document he signed on 7 May 1999. It was produced from Wojtowicz Kelly's file, suggesting that it had been returned to them by the defendant.

154 In cross-examination, the defendant said his recollection was that he received the acknowledgment and a two page letter in the plaintiff's chambers and that he signed it when it was given to him by the plaintiff. The defendant said that if the fact that the acknowledgment was printed on thermal fax paper suggested that it was received by him before his meeting with the plaintiff, he might well have given it to the plaintiff when he came to his chambers and sought an explanation, before he signed it. However, the defendant said his recollection was very clearly that he discussed it with the plaintiff in his chambers when he signed it.

155 I do not accept that evidence. There is nothing on the original thermal fax (exhibit 2) which suggests that it was ever part of 'a document of three pages' which the defendant says the plaintiff gave him on 7 May. That is to say, there is no evidence of the document having been stapled or otherwise joined to other pages.

156 More significantly, the plaintiff's account dated 26 July 1999 does not record any meeting between the plaintiff and the defendant on 7 May. Further, the plaintiff clearly wanted Wojtowicz Kelly to deal with the defendant in relation to his fees: that was the tenor of his letter of 6 May to Wojtowicz Kelly, in which he confirmed the terms on which he was prepared to act for the defendant and asked them to explain those terms to the defendant.

157 I have no doubt that the defendant genuinely believed that if he was successful in his action, the Town of Kwinana would effectively pay his legal fees. However, the defendant has not been consistent in identifying the source of this understanding.

The only arrangement between you and I, Mr Stephenson, was that if we were successful in the case against the Town of Kwinana, your fees would be met by costs. (ts 245)

The defendant raised the matter initially in a draft letter dated 12 December 1999 which he proposed to send to Mr Wojtowicz and which he sent to the plaintiff for his comment. The draft letter was apparently written in response to an account received from Wojtowicz Kelly. The defendant said in his draft letter:

My understanding was that, in the event of a judgement in my favour, the [Town of Kwinana] would meet your account regarding my costs. (tb 161)

159 It appears that the defendant did send to Wojtowicz Kelly the letter he sent in draft to the plaintiff on 12 December.

160 On 14 December, Wojtowicz Kelly replied to the letter. They said:

It was always a condition of our engagement that we would be paid for the services rendered by this firm. Accordingly a costs agreement was sent to you outlining the terms of our engagement. We confirm that we have an executed copy of the costs agreement on file. We would consider waiving our fees should the case not be successful at first instance. (tb 168)

161 On the same day, the defendant faxed a copy of Wojtowicz Kelly's letter to the plaintiff, and asked for his observations. He said:

[Wojtowicz Kelly] seemed to have forgotten that they said 'we'll get paid, (by [the Town of Kwinana]) from costs, if you win. (tb 170) (emphasis supplied)

This comment is, of course, quite inconsistent with the defendant's contention that it was the plaintiff who represented to him that the Town of Kwinana would pay his fees.

162 As the plaintiff points out, the defendant had already entered into two costs agreements - with Longs and Wojtowicz Kelly respectively - before entering into an agreement with him. As I have noted above, both of the previous agreements referred expressly to the fact that there might be a shortfall between costs awarded against an unsuccessful party to the litigation and the fees charged by the defendant's solicitors. However, the alleged agreement between the plaintiff and the defendant was in quite different terms. It will be recalled that the plaintiff said in his letter of 6 May 1999 to Wojtowicz Kelly:

Owing to the complexity and value of the claim, I consider that the maximum allowances pursuant to the Supreme Court Scale are appropriate, and, will be allowed in any taxation of costs. Therefore I intend to charge [at the maximum allowed]. (tb 1)

This is an expression of confidence by the plaintiff that if the defendant was successful at trial, he would recover from the Town of Kwinana an amount equal to the fees he would be charged by the plaintiff. This is quite different from saying that the plaintiff would limit his fees to the amount recoverable from the Town of Kwinana on a taxation of the defendant's costs.

163 But whether or not the defendant gained this understanding from the plaintiff or from Wojtowicz Kelly, there is nothing in the plaintiff's letter of 6 May 1999 which would have caused him to doubt it. This consideration adds further weight to the defendant's contention that the costs agreement was unreasonable because of inadequate disclosure of the matters referred to by Ipp J in Brown v Talbot & Olivier. In any event, I am not persuaded that the plaintiff agreed to limit his fees to the taxed costs recoverable from the Town of Kwinana.

164 Because of this finding, it is not necessary to rule on the admissibility of evidence sought to be adduced by the plaintiff about statements made by the defendant in the course of a mediation conducted by Mr J Chaney SC (as his Honour then was): exhibit 3, par 43. I have not taken that evidence into account. Nor have I had regard to the letter dated 28 February 2002 written by Ms Martino to Mr R I Viner QC, submitting the dispute between the parties to mediation (tb 309 - 313).

165 For all these reasons, I am not persuaded that the defendant was given any, or any sufficient explanation of the effect of the plaintiff's proposed charging regime, which he should have been given if the costs agreement was to be upheld. I therefore conclude that if there was a costs agreement between the plaintiff and the defendant, it should be set aside as being unreasonable.

166 The claim is pleaded in par 2(b) of the amended reply and defence to counterclaim (which contains the amendments made on the second day of the trial). It is an answer to the defendant's contention in par 10 of the defence that as a matter of law, counsel cannot sue for fees for acting as such.

167 In par 3 of the amended reply, the plaintiff pleads the facts on which he relies in support of the proposition that the defendant is estopped from relying on that contention. The plaintiff pleads that at the meeting of 4 May 1999 with Ms Oldfield and Mr Mohen, Ms Oldfield told the plaintiff that Wojtowicz Kelly would not agree to be responsible for the plaintiff's fees for acting as counsel. The plaintiff alleges that he agreed to this term but said that he would seek a written retainer agreement from the defendant to pay his fees.

168 For the reasons given previously, I have accepted that Ms Oldfield did inform the plaintiff as alleged, but that he did not then stipulate for a retainer agreement.

169 The plaintiff then alleges that at the meeting on 4 or 5 May 1999, he told the defendant that a retainer agreement would be forwarded to him via Ms Oldfield: and that the plaintiff intended to charge at the rate of $270 per hour and $2,300 per day for the trial and to pass on to the defendant the fees he was charged by his chambers for typing and photocopying. The plaintiff alleges that the defendant said he would be responsible for the plaintiff's fees and would sign a retainer agreement.

170 I have held that there was no such discussion between the plaintiff and the defendant and that there was no such meeting as alleged.

171 The plaintiff then pleads that on 6 May 1999, he faxed to Wojtowicz Kelly a letter containing the proposed terms of the retainer agreement and requested the defendant to agree to it.

172 The plaintiff then pleads, in substance, that the defendant signed the acknowledgment on 7 May and returned it to Wojtowicz Kelly who forwarded it to the plaintiff on 10 May.

173 I accept that the acknowledgment signed by the defendant on 7 May 1999 constituted a representation to the plaintiff by the defendant that he would pay the plaintiff's fees charged in accordance with the terms set out in the plaintiff's letter dated 6 May to Wojtowicz Kelly. However, I do not consider it to be a representation on which the plaintiff can rely, because it was given in circumstances in which there had not been sufficient disclosure by the plaintiff of the defendant's rights in relation to the payment of fees.

174 Put another way, it would not be unjust or unconscionable for the defendant to depart from his representation. That is because the plaintiff should have appreciated that if he had made sufficient disclosure, the defendant's position might have been different: see Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485, 506.

175 The plaintiff then pleads that subsequently, and at various times when he was instructed by the defendant to carry out work particularised in the further and better particulars of the statement of claim, the defendant informed him that he accepted that the retainer agreement would apply to that work.

176 It is not necessary to refer in detail to the work carried out by the plaintiff for the defendant, following the trial of his action against the Town of Kwinana. It included settling press releases, settling letters, providing tax advice, an application to Scott J for a special costs order, consideration and advice in relation to a threatened application for a stay of the judgment by the Town of Kwinana, negotiations with the Town of Kwinana's solicitors for the release of the judgment sum and acting for the defendant in his appeal against the decision of Scott J. I accept that the plaintiff undertook all this work on the defendant's instructions.

177 The plaintiff gives particulars of the occasions on which he alleges the defendant asked him to perform each item of the work summarised above. In each case, the plaintiff pleads:

[T]he plaintiff told the defendant words to the effect that the plaintiff would charge him for the work pursuant to the hourly rate in the retainer agreement and that the defendant said words to the effect that he agreed that this would apply to the work.

These particulars were added to the reply as a result of the amendment allowed on the second day of the trial.

178 On the first day of the trial, the plaintiff tendered his witness statement in which he gave evidence about the words spoken by him and by the defendant on each of the occasions on which it is alleged that the defendant agreed that the retainer agreement would apply to the work referred to above. At that point, I ruled the evidence inadmissible because it was not relevant to any allegation then contained in the plaintiff's pleadings.

179 On the second day of the trial, when I allowed the amendments, I referred to the fact that I had disallowed the evidence previously. I said that the amendment permitted the evidence to be given which had been excluded previously (ts 165). I went on to say that there was no prejudice to the defendant because in his responsive witness statement he had already dealt with the plaintiff's evidence, by denying it.

180 The plaintiff's evidence about the various occasions on which the defendant is said to have accepted that the retainer agreement would apply to subsequent work is not corroborated by any contemporaneous notes or correspondence. For the reasons set out above, I consider that the plaintiff's recollection is generally unreliable. That being so, his evidence about these representations carries insufficient weight to persuade me that the defendant did say the words attributed to him.

181 This conclusion puts an end to the estoppel claim: but in my view, the claim faces other insuperable difficulties. The first is that to which Kennedy J referred in Shand's case at 15. His Honour accepted that the elements of an estoppel were to be found in that case, but that it was not necessary, in the context of the summary judgment application, to determine whether it was arguable as a cause of action if the rule that a barrister could not sue for the recovery of his fees was sustained. However, his Honour said:

It is unlikely that the rule could be circumvented by reliance upon an estoppel.

182 An estoppel may prevent a party from taking a defence which would otherwise be open. For example, a limitation defence, as in Commonwealth of Australia v Verwayen (1990) 170 CLR 394. However, if a party has no right to sue, I do not see how such a right can be created by an estoppel.

183 In my view, a further obstacle to the success of the estoppel claim arises from the plaintiff's plea in relation to detriment.

184 In par 4 of his amended reply, the plaintiff alleges that in reliance on the belief or assumption that the defendant had agreed to be personally liable for payment of the plaintiff's fees at the rates set out in the retainer agreement:

[T]he Plaintiff materially altered his position to his detriment, which detriment included, the Plaintiff by providing legal services to the Defendant and incurring expense in relation to photocopying, typing, telephone and other general office costs, and, in refusing other work which the Plaintiff might have undertaken for reward, and/or did nothing further to secure his position with respect to payment of fees from the Defendant.

185 The defendant does not suggest that he was under no liability to pay the plaintiff for legal services he rendered. The defendant accepts that he was obliged to pay a reasonable amount: that is, such amount as might be allowed on a taxation of the plaintiff's bill of costs. That being so, I do not think the plaintiff could properly claim to have suffered a detriment by acting for the defendant, unless he pleaded and proved that, but for the representation, he would not only have been able to accept other work, but that he would have been remunerated for that work at a rate greater than that provided by the scale: in other words, by entering into a costs agreement.

186 The plaintiff has not adduced any evidence that other work was available to him on the occasions when he acted for the defendant, let alone any evidence that he could have charged above the scale.

187 I do not think the plaintiff suffered a detriment by incurring the expenses of photocopying, typing, telephone and other general office costs when carrying out work on behalf of the defendant. These costs would be recoverable from the defendant as disbursements in any event.

188 As to the securing of the plaintiff's position: I do not think the plaintiff could have done any more than he did. That is to say, he made an arrangement with Ms Martino, who was the defendant's solicitor when the Town of Kwinana paid the judgment sum in favour of the defendant. The arrangement was that Ms Martino would hold the funds in her trust account. She did so, but disbursed the funds on the defendant's instructions before the outstanding balance of fees claimed by the plaintiff had been paid.

189 There is no evidence that the plaintiff would have been able to secure his position in any other way.

190 For all these reasons, I conclude that the plaintiff's estoppel claim is without foundation.

191 In the course of the cross-examination of the plaintiff, it emerged that he had not rendered his accounts entirely in accordance with the retainer agreement. The plaintiff accepted that he had overcharged in some respects. He claimed he had done so through inadvertence. The plaintiff accepted also that it would be very difficult to determine from his invoices to what extent the fees he charged fell within the scale or outside it (ts 206). However, the actual quantum of fees is not in issue in these proceedings. That is to say, the defendant has not put the plaintiff to proof of the work itemised in his accounts, the reasonableness of that work or the time spent in carrying it out. That being so, I consider that the appropriate course is to order a taxation of the plaintiff's bill of costs as between practitioner and client.

192 The defendant contends that he has paid to the plaintiff an amount of approximately $137,000. This is apparently in issue. However, it is not in dispute that a number of payments were made by the defendant to the plaintiff and to third parties, at his direction. The precise amount should be a matter of record.

193 In essence, there are two limbs to the counterclaim. The first is based on the proposition that the plaintiff agreed to limit his fees to the amount of the party and party costs payable to the defendant by the Town of Kwinana, should the defendant's action be successful.

194 I have held that the plaintiff did not agree to limit his fees in that way.

195 Secondly, the defendant contends that if he entered into a costs agreement with the plaintiff, it should be set aside as being unreasonable.

196 On the view I have taken on the plaintiff's claim, the plaintiff was entitled to be paid his professional fees for the work he undertook on the defendant's instructions, taxed on a practitioner and client basis. That is the conclusion I have reached, either on the basis that the parties did not enter into a costs agreement or alternatively, on the basis that if they did enter into such agreement, it was unreasonable and should be set aside.

197 I therefore consider that the defendant should succeed on his counterclaim to the extent of the difference between the amounts he has paid to the plaintiff, and the plaintiff's taxed costs on the basis set out above.

198 If it appears that the plaintiff has been overpaid, I would award interest on the relevant amounts, pursuant to s 32 of the Supreme Court Act 1935 (WA). I will invite the plaintiff and counsel for the defendant to confer for the purpose of preparing an order which gives effect to these reasons.