[2014] ACTSC 243

7-10 June 2010, 19-22 September 2011, 9-10 November 2011,

The court declares that the agreements as to costs between the parties dated 23 March 1999 and 10 December 2002 are not binding on the parties.

1. judgment for the plaintiff in the sum of $53,250.00.

COSTS - costs between solicitor and client - agreement as to costs - whether fair and reasonable - Legal Practitioners Act 1970 (since repealed) - onus on solicitor to satisfy court that agreement fair and reasonable - whether hourly rate excessive - whether benefit to solicitor and disadvantage to client established - agreements set aside - measure of client's loss

Legal Profession Act 2006 (ACT)

Passey v Bandarage [2002] ACTSC 105

Weiss v Barker Gosling (1993) 16 FamLR 728

Budziszewski (1981) FLC 91-038

Hall v Barrett (1982) FLC 91-216

Schiliro v Gadens Ridgeway (1995) 19 FamLR 196

In person (7 June 2010-22 September 2011) (Defendant)

1. The defendant is the sole principal of a firm of solicitors practising at the Tuggeranong Town Centre. She acted for the plaintiff in two actions for damages for personal injury in this court, each of which arose out of a motor vehicle collision. The collisions occurred on 2 April 1994 and on 3 April 1996. Both collisions happened in Northbourne Avenue, Braddon. In each collision the plaintiff was the driver of a car which was struck from behind by another car.

2. The plaintiff instructed the defendant in relation to the first accident in March 1995. Some time after the second accident she instructed the defendant to act for her in relation to that claim also.

3. On 23 March 1999 the plaintiff and the defendant signed a document headed "Agreement as to costs".

4. The plaintiff and the defendant signed a second agreement, dated 10 December 2002, bearing the same heading.

5. The plaintiff commenced the present proceedings on 19 October 2004, seeking a declaration that the two agreements were void, and orders that they be set aside. By way of consequential relief the plaintiff sought taxation of the costs payable by her to the defendant, and repayment of any overpayment she might be found to have made.

6. Agreements as to costs between solicitor and client were contemplated and regulated by the Legal Practitioners Act 1970 (ACT). That Act has since been repealed and replaced by the Legal Profession Act 2006, but the earlier Act continues to apply in respect of agreements as to costs made before the later Act came into force. Section 191 of the earlier Act gives this court jurisdiction to set aside a fees agreement if the court is satisfied that the agreement was not fair and reasonable.

7. The plaintiff's case is that the agreements which she signed were not fair and reasonable, and that in those circumstances the costs for which she is liable to the defendant should be calculated by reference to the scale of costs then set out in the Supreme Court Rules 1937 (ACT). Those Rules have since been supplanted by the Court Procedures Rules 2006 (ACT) but continue to apply to legal services provided at the time they were in force. The plaintiff's case is that the defendant charged her more than scale, and should be required to account to her for the difference.

8. The applicable sections of the Legal Practitioners Act in force at the time are as follows:

190 Agreement as to costs

(1) The preceding provisions of this part, other than 179 and 189, do not apply in respect of the costs to be paid to a solicitor for work to which an agreement under this section relates.

(2) The solicitor may make an agreement with a person that the amount of the costs (excluding disbursements) payable, or to be payable, by the person to the solicitor for work of a professional nature already undertaken, or to be undertaken, for the person by the solicitor shall be the amounts specified in, or ascertainable in accordance with, the agreement.

(3) An agreement referred to in subsection (2) is not enforceable unless a note or memorandum containing the terms of that agreement is signed by the person liable to pay the costs to which the agreement relates.

(4) A note or memorandum of an agreement signed in accordance with subsection (3) is evidence of the terms of the agreement.

(5) A solicitor who is a party to an agreement under this section is not entitled, in respect of work to which the agreement relates, to receive an amount for costs (including disbursements) greater than the amount specified in, or ascertainable in accordance with, the agreement.

191 Powers of Court where contract not fair and reasonable

(1) Where, on an application by a person who has made an agreement with a solicitor under section 190, the court is satisfied that the agreement is not fair and reasonable, the court may, by order -

(a) direct that the amount payable under the agreement be reduced to an amount specified in the order; or

(b) declare that the agreement is not binding on the parties to the agreement.

(2) Where, under subsection (1), the court directs that the amount payable under an agreement be reduced, the agreement is enforceable as if the amount specified in the order of the court were specified in the agreement as the amount paid under the agreement.

(3) Where, under subsection (1), the court declares that the agreement is not binding on the parties to the agreement -

(a) the court may make such further orders as it thinks necessary to restore the parties to the agreement to the position in which they would have been if the agreement had not been made; and

(b) this part (other than section 190) applies as if the agreement had not been made.

(4) Except by leave of the court, a person is entitled to make an application under this section in respect of an agreement after the institution of proceedings for the recovery from that person of the amount payable under the agreement.

9. Earlier provisions of part 15 of the Act provided for taxation by the Registrar of this court of a bill of costs as between solicitor and client.

10. The terms of the 1999 agreement as to costs were as follows:

THIS AGREEMENT AS TO COSTS is made on 23 March 1999.

Between Eunice Catherine Mary Ryan t/as Ryans Barristers & Solicitors of 191-203 Anketell Street, Tuggeranong in the Australian Capital Territory (the Barrister and Solicitor);

And Georgia Vizovitis of RMB 1544 Federal Highway, Sutton in the State of New South Wales (the Client)

IT IS AGREED THAT

A. The Barrister and Solicitor agreed to act for the client in the capacity of Barrister and Solicitor for the period from 6 March 1995 and continuing, in relation to the client's personal injury matters in respect of two motor vehicle accidents on 2 April 1994 and 3 April 1996.

B. The client agrees to pay to the Barrister and Solicitor all such professional costs and disbursements as are reasonably incurred by the Barrister and Solicitor in acting for the client assessed by the hourly rate of $280.00 per hour for the principal Barrister and Solicitor, $220 for the employed Barrister and Solicitor and $85.20 for the legal assistant.

C. The Barrister and Solicitor agrees to carry the professional costs and disbursements until the completion of the matter on the basis that the Client agrees to pay for all professional costs and disbursements undertaken on the matter.

D. The Client agrees to pay to the Barrister and Solicitor interest accruing in accordance with subsection 230(2)(b) Magistrates Court Civil Jurisdiction Act 1982 on account of the professional costs and disbursements after 30 days in relation to a claim within the jurisdiction of the Magistrates Court. The Client agrees to pay to the Barrister and Solicitor interest accruing in accordance with the Supreme Court Act on account of the professional costs and disbursements after 30 days in relation to a claim within the jurisdiction of the Supreme Court.

E. The Client agrees to pay the cost of obtaining the medical reports and all other reasonable disbursements which are necessary to undertake the claim on behalf of the Client.

F. The Client irrevocably authorises the Barrister and Solicitor to deduct from moneys payable to the client the professional costs and disbursements of the Barrister and Solicitor whether those moneys are payable to the client on account of a settlement or a Court award.

11. The agreement was signed by the defendant, whose signature was witnessed by her daughter Emily Ryan, at that time working as a clerk in her mother's firm. The plaintiff's signature was witnessed by Mr Keith Halpin, an accountant in private practice who was the accountant for the Vizovitis family and its business interests.

12. The evidence is that by letter dated 2 March 1999 the defendant's firm sent the costs agreement to the plaintiff by post with a covering letter which read as follows:

CLAIM FOR COMPENSATION

MOTOR TRAFFIC ACCIDENTS

We enclose here a costs agreement in accordance with our recent discussions with you. We would be grateful if you would sign and return the documents as soon as possible.

13. The plaintiff signed the agreement at her accountant's office, left it undated and returned it to the defendant, who then signed and dated it.

14. The 2002 agreement as to costs was largely in identical terms. The first two clauses were different, and I set them out:

A. The Barrister and Solicitor agreed to act for the client in the capacity of Barrister and Solicitor for the period from 7 March 1995 and continuing in relation to the client's personal injury matter.

B. The client agrees to pay to the Barrister and Solicitor all such professional costs and disbursements as are reasonably incurred by the Barrister and Solicitor in acting for the client assessed at the hourly rate of $380.00 per hour plus GST where applicable for the principal Barrister and Solicitor, $280.00 per hour plus GST where applicable for the employed Barrister and Solicitor, and $104 per hour plus GST where applicable for the legal assistant.

15. Apart from its date (10 December 2002) and a change in the defendant's business address, the rest of the agreement was identical to the 1999 agreement. It was signed by the plaintiff and the defendant, and both signatures were witnessed by Claire Grogan, who was then a law student working at the defendant's firm. The 2002 agreement was signed at the defendant's office.

16. The defendant commenced proceedings in this court on behalf of the plaintiff during 2000. The two actions were heard together before me in this court commencing on 5 November 2003. Mr Michael Maxwell of the Sydney Bar appeared for the plaintiff and Mr Martin McDonogh, also of the Sydney Bar, appeared for the defendants in both actions. The vehicles at fault in both accidents were by coincidence covered for compulsory third party purposes by the same insurer, NRMA Insurance. Both had been rear end collisions and liability was not in issue. The principal issues were as to causation of the injuries alleged by the plaintiff, and as to her claim for loss of earning capacity, past and future.

17. Based upon the estimates provided by the solicitors for the parties, the hearing had been allocated two days. The plaintiff spent almost the whole of the first day in examination in chief. By the end of the second day the cross-examination was far from complete, and it had become apparent that the estimate had been inadequate. Mr McDonogh gave an indication that it would be prudent to set aside a further four days to complete the hearing. I adjourned the further hearing to a date to be fixed, which I expected would be some three or four months later. This was undesirable because it left the plaintiff subject to the constraints of cross-examination but it was unavoidable in the circumstances.

18. The progress of the plaintiff's evidence had been slower than usual because of the use of a Greek interpreter. In the present proceedings there was a challenge to the plaintiff's credibility arising out of the use and the identity of the interpreter, to which I shall return.

19. After I adjourned the hearing at the end of the second day, settlement negotiations took place in the precincts of the court which, late on that evening, were successful in resolving both actions. I subsequently entered judgment by consent for the plaintiff in the sum of $50,000.00 plus costs in one of the actions and $25,000.00 plus costs in the other.

20. Subsequent to the settlement, the defendant negotiated party-and-party costs with Phillips Fox, the solicitors for the defendants in the two actions. The solicitors agreed to a costing consultant, Mr Kim Chapman of Legalcost, preparing what was described as a mini-assessment. Mr Chapman arrived at a figure of $53,000.00 including disbursements, and agreement was reached at that figure. It does not appear that the defendant sought the plaintiff's instructions before the agreement was reached, but there is no issue in these proceedings about the adequacy or reasonableness of the agreed figure for party-and-party costs.

21. The statement of claim in the present action was filed on 19 October 2004. It was in the following terms:

1. At all material times the defendant was a legal practitioner practising in the Australian Capital Territory.

2. At all such times the defendant practised as Ryans Barristers and Solicitors.

3. During 1995 the plaintiff consulted and retained the defendant to act for her in relation to injuries sustained by her in a motor vehicle accident in about April in the previous year.

4. It was an implied condition of the retainer that the defendant would act for the plaintiff at the published costs scale for the jurisdiction in which proceedings were brought.

5. In 1996 the plaintiff again retained the defendant to act for her in relation to a further motor vehicle accident which occurred that year.

6. It was an implied condition of the retainer that the defendant would act for the plaintiff at the published cost scale for the jurisdiction in which proceedings were brought.

7. The plaintiff signed a document titled "Agreement as to costs" at the request of the defendant on 23 March 1999, in respect of the two actions previously mentioned.

8. The plaintiff signed a further document titled "Agreement as to costs" at the request of the defendant on 10 December 2002, in respect of the two actions previously mentioned.

9. On or about 6 November 2003, acting on the advice of the defendant, the plaintiff agreed to settle the two claims for the sum of $75,000.00 with costs agreed at $53,000.00.

10. In relation to the two matters the plaintiff has been charged by the defendant for costs and disbursements and has paid the same as follows:

Matter 95/063

Invoice 8406

$2, 023.21

Invoice 5400 $49,507.53

Counsel's fees $16,495.00

Invoice 4855 $1,605.60

Invoice 2709 $607.65

Total $70,238.99

Matter 96/163

Invoice 8407 $470.70

Invoice 4854 $23,586.85

Total $24,057.55

The total is therefore $94,296.45

11. The charges made by the defendant exceed the scale applicable from time to time for work done by a legal practitioner pursuant to the costs rules of the Supreme Court of the Australian Capital Territory.

12. In charging at a rate exceeding that prescribed by the Supreme Court of the Australian Capital Territory cost rules, the defendant has acted in breach of her retainer in respect of both matters.

13. Section 191 of the Legal Practitioners Act (ACT) applies to the two agreements, and the two agreements are not fair and reasonable for the purposes of that Act.

14. Further or in the alternative, the plaintiff entered into the two agreements under the undue influence of the defendant.

15. Further or in the alternative, the defendant procured the two agreements in circumstances in which it would be unconscionable for the defendant to rely on them and their terms.

16. Further or in the alternative, in procuring the plaintiff's consent to enter into the two agreements the defendant engaged in unconscionable conduct:

(a) for the purposes of s 51AB of the Trade Practices Act (Cth) in trade or commerce in connection with the supply, or possible supply, of services.

(b) for the purposes of s 13 of the Fair Trading Act (ACT) in connection with the supply, or possible supply, of services.

17. Further or in the alternative, there was no consideration for the plaintiff's entry into the two agreements, or alternatively, there was a total failure of consideration.

18. In respect of charging in breach of her retainer in respect of both matters, the plaintiff seeks an order that the defendant prepare and present for taxation a bill of costs in respect of acting for the plaintiff in each matter; or, alternatively, an order that the defendant's costs be reduced to a specified sum.

19. Further or in the alternative, the plaintiff's claim is pursuant to s 191 of the Legal Practitioners Act for:

(a) a declaration that the agreements of 23 March 1999 and 10 December 2002 are not fair and reasonable;

(b) a declaration that she is not bound by the agreements.

(c) an order that the amounts payable under the agreements be reduced to a sum to be specified.

(d) alternatively that the defendant tax a bill of costs for work done in respect of the two matters at the Supreme Court scale as applying from time to time.

20. Further or in the alternative the plaintiff's claim is for:

(a) a declaration that it would be unconscionable for the defendant to retain the benefit of the two agreements.

(b) a declaration that the two agreements be set aside.

(c) an order that the amounts payable under the agreements be reduced to a sum to be specified.

(d) alternatively, that the defendant tax a bill of costs for work done in respect of the two matters at the Supreme Court scale as applying from time to time.

21. Further or in the alternative, the plaintiff's claim is made pursuant to the Trade Practices Act, or alternatively the Australian Capital Territory Fair Trading Act and the plaintiff seeks the following orders:

(a) a declaration that the defendant in trade or commerce engaged in unconscionable conduct in relation to the services of the plaintiff.

(b) alternatively, a declaration that the defendant engaged in unconscionable conduct in the provision of services to the plaintiff.

(c) an order that the two agreements be set aside,

(d) an order that the amounts payable under the agreements be reduced to a sum to be specified.

(e) alternatively, that the defendant tax a bill of costs for work done in respect of the two matters at the Supreme Court scale as applying from time to time.

22. Further or in the alternative, the plaintiff's claim is that the two agreements are void for want of, or failure of, consideration and she seeks the following orders:

(a) a declaration that the two agreements are void.

(b) an order that the two agreements be set aside.

(c) an order that the amounts payable under the agreements be reduced to an amount to be specified.

(d) alternatively, that the defendant tax a bill of costs for work done in respect of the two matters at the Supreme Court scale as applying from time to time.

23. The plaintiff also claims:

(a) an order that the defendant pay to the plaintiff the difference between the amount paid by her in costs and disbursements to the defendant, and such amount as is found to be due by her after taxation or specification of costs.

(b) general damages.

(c) interest.

(d) costs.

in respect of the above causes of action.

22. The defendant filed a defence in November 2004. An amended defence was filed in July 2005. The defendant admitted the facts asserted in paragraphs 1, 2, 3, 5, 7, 8, 10 and 11 of the Statement of Claim. She denied the assertions in paragraphs 4, 6, 12, 14, 15, 17 and 18. As to paragraph 9, she admitted the facts asserted but said that the matters had settled on the advice of the defendant and Mr Maxwell of counsel.

23. At the commencement of the hearing, counsel for the plaintiff announced that his client no longer relied on paragraphs 14, 15, 16 or 17 of the Statement of Claim, effectively withdrawing the claims under the Trade Practices Act and the Fair Trading Act and withdrawing the assertions of undue influence, unconscionability and total failure of consideration.

24. The proceeding was commenced by originating application on 19 October 2004. A defence was filed in the following month, and amended in July 2005. There were various skirmishes during that year, before me and before the Registrar, about particulars. In July 2005 Gray J heard and determined an interlocutory application seeking orders in relation to the translation of portions of the evidence in the personal injury proceedings from Greek into English. His Honour dismissed that application with costs.

25. In February 2006 the defendant applied for a direction that the court hear and determine as a separate question whether the costs agreements should be set aside. On 24 February 2006 I made an order by consent that the court hear and determine as a separate question the issues raised by paragraphs 1 to 17 of the statement of claim and the relief sought in paragraphs 19 (a) and (b), 20 (a) and (b), 21 (a), (b) and (c) and 22 (a) and (b). This in effect represented the whole of the statement of claim except for the prayers for an order that the defendant prepare a bill for taxation, or alternatively an order that the defendant's costs be reduced to a specified sum; and that the defendant pay to the plaintiff the difference between the amount paid and the amount found to be due or specified.

26. On 29 September 2005 the parties signed and filed a certificate of readiness, certifying that the proceeding was ready for trial. The then solicitor for the plaintiff estimated the length of the hearing at one day. The defendant gave an estimate of two days. Such optimism was to fall vastly short of the actuality. Following the filing of the certificate the matter was listed before a Deputy Registrar in October 2005. The Deputy Registrar noted that the parties appeared to agree that evidence by costing consultants should be given by affidavit, but noted that the plaintiff wanted other evidence to be given orally. The Deputy Registrar directed a timetable for the filing of affidavits of costing consultants and bundles of agreed documents.

27. It is apparent that the parties agreed to ask the court to vacate these orders and to make different orders in their place. On 24 February 2006 I was asked to make consent directions that the plaintiff file and serve any affidavits upon which she proposed to rely, and any expert reports, within 14 days, and that the defendant have 28 days to do likewise.

28. I should say that I was not asked to make an order that all of the evidence in the proceeding be by affidavit, and, although I have no recollection of making the orders more than eight years ago, I would not have done so without being assured that the matter was one where there were no factual disputes which might turn on the assessment of credibility of witnesses.

29. In August 2009 the defendant applied for security for costs of $90,000.00 and for an order that the controlled moneys held by the defendants form part of the security. The application was heard by Higgins CJ on 28 August 2009. His Honour ordered that the controlled money, by then some $27,000.00, remain in the interest-bearing account in which it was invested until further order.

30. On 15 October 2009 the defendant made an application for an order that the proceedings be dismissed, or alternatively that the originating process be struck out, and that judgment be entered for the defendant. I heard that application on 30 October 2009 and dismissed it with costs.

31. On 28 October 2009 the plaintiff applied for an order that the defendant produce for inspection her firm's files relating to the personal injury actions and release the controlled moneys to the plaintiff. I heard that application on 18 December 2009, and ordered that the defendant produce the files for inspection as sought.

32. On 10 March 2010 the matter came before a Deputy Registrar who fixed it for hearing on 7 June 2010, noting the estimate provided by both parties of two days.

33. The hearing commenced on Monday 7 June 2010. Mr Hausfeld of counsel appeared for the plaintiff, and continued to do so throughout the lengthy and fragmented hearing. The defendant, Ms Ryan, appeared unrepresented. Both informed me on that morning that the hearing was likely to take two days plus. Because of other matters ahead of it in the list, it was not reached until late on the afternoon of the next day, when counsel for the plaintiff opened his case. The plaintiff gave evidence in chief on the following day, for about forty minutes, and was cross-examined for the balance of that day and most of the next day. Evidence was given by her sons Stanley and Trevor Vizovitis on the following day, 10 June 2010. At the end of that day I informed the parties that I had obtained a transcript of the proceedings before Higgins CJ on 28 August 2009 and had satisfied myself that his Honour had not dismissed the application for security for costs although the order taken out stated that he had done so. I formally ordered that that application be dismissed. I also made orders which had the effect that the trust moneys controlled by the defendant be paid out, including the accrued interest, to the plaintiff.

34. After the evidence of the plaintiff's sons, counsel for the plaintiff informed me that that concluded the oral evidence for the plaintiff, and that he proposed to tender further documents but would do so during the course of cross-examination of the defendant and her witnesses. The defendant made an oral application that there was no case to answer. In the course of the argument on that issue I said that it seemed to me that an essential part of the plaintiff's case must be to establish to the satisfaction of the court that the costs agreements sought to be set aside were disadvantageous to the client by comparison to the charges that would have been payable in the absence of such agreements. I said that if the court were persuaded that the agreements had been unfair, for example because they had been entered by the client without her informed consent, there would be little purpose in the court exercising its discretion to set its agreements aside unless they were also unreasonable in that their effect was to produce a fee which was excessive by comparison with the fees which would have been payable if there had been no such agreement. In the absence of a costs agreement, the court would look to the scale in force under the Supreme Court Rules at the time the work was carried out, either for the purpose of calculating with some precision the fees properly payable, or at least using the scale as a guide to what would have been reasonable costs.

35. At the commencement of the hearing it was apparent that there would be significant variances in the versions of the plaintiff and the defendant as to the factual background. Both parties had put on affidavits, no doubt in the expectation that their affidavits would constitute their evidence in chief. Such an approach, where there are disputes of fact to be determined, and issues of credit of witnesses, deprives the Court as tribunal of fact of the opportunity of seeing the witnesses giving their evidence without the benefit of leading questions, and of assessing their demeanour. This is particularly helpful where witnesses are giving evidence about events which happened many years earlier. Accordingly I directed that the evidence in chief be given orally rather than by affidavit. As one would expect, some witnesses were cross-examined on their affidavits but for the most part the affidavits themselves are not in evidence.

36. The plaintiff was aged 69 when she gave her evidence. She was born in Greece and came to Australia in 1958. Greek is her first language. She did not speak English before she came to Australia. She described her ability to speak English as fairly good, but she had difficulty with unusual or academic words. She did not write English. If she needed to write a letter one of her sons would attend to this. She could read English to some degree. For example, she could read a newspaper but found that she did not fully understand what she was reading.

37. She did not work until after her marriage and the birth of her first two children. From then she worked in the family restaurant or cafe, as a waitress serving hamburgers or fish and chips. After some time she and her husband opened a business in Canberra, Canberra Meats, which seems to have been a wholesale as well as a retail butcher shop. There were employees, and part of the plaintiff's role was to direct the staff as to what to do around the shop. They had an accountant (I assume this was Mr Halpin, who witnessed the first costs agreement, and who was in private practice at Fyshwick).

38. She and her husband owned rental properties, and she was involved in their management, for example collecting rent or arranging for a plumber to fix a leak.

39. She said that she did not get involved in business correspondence or legal aspects of either Canberra Meats or the rental properties.

40. She described her motor vehicle accident of 2 April 1994 and her second accident of 3 April 1996. She said that in about March 1995 she saw Ms Ryan and asked her to act in a claim for damages arising out of the first accident. Her recollection was that there was at that time no written agreement about fees, but that Ms Ryan would charge $180.00 per hour if she paid her accounts as she went along, or $220.00 per hour if she opted not to pay the legal costs until her claim was finalised.

41. The plaintiff identified her signature on a copy of the costs agreement dated 23 March 1999. She said that she had received that agreement by mail. She was asked whether Ms Ryan had explained that agreement to her before she signed it. Her answer was "Not as I can - I can recall".

42. The plaintiff then identified her signature on the second cost agreement, of 10 December 2002. She said that she had signed that agreement in Mrs Ryan's office. She did not recognise the signature of the witness and did not remember who had witnessed it.

43. The plaintiff was asked whether Mrs Ryan had said anything to her about the agreement before she had signed it. She said that Mrs Ryan told her that the costs would be $280.00 rather than $180.00 per hour if she paid at the end of the matter. The figure $380.00 appeared in the agreement but the plaintiff's understanding was that the hourly rate was to be $280.00. She said that Mrs Ryan did not say anything about the relationship between the 1999 agreement and the 2002 agreement. She did not explain that work done by an employee would be at a lower rate, and did not explain why the second agreement was necessary. The plaintiff did not recall being informed that by signing the agreement she would lose her right to have the costs taxed in the event of any dispute. She said that Mrs Ryan did not explain that the effect of the agreement was that the higher rate would be chargeable for work done from when she first gave instructions in 1995. The plaintiff said that Mrs Ryan did not explain why she might consider getting independent legal advice. She had asked what she had understood by the expression "independent legal advice". She said that she understood that this was advice by "someone higher, like a barrister or a higher lawyer".

44. She said that Mrs Ryan did not explain that the rates she was charging were significantly above scale rates. She denied that there had been any discussion about the fact that she would not be able to recover all of her fees from the other side in the case. She said that Mrs Ryan did not tell her that other solicitors might have been prepared to take the case on a no-win no-fee basis. She had been unaware of that concept until a week or so before she gave her evidence, when apparently it was explained to her in conference.

45. She said that Mrs Ryan had explained that the barrister she was briefing, Mr Maxwell, would be charging $8,000.00 a day. She was asked whether Mrs Ryan explained that that daily rate was considerably in excess of what she could expect to recover if she won the case. She said that she had not been given any such explanation.

46. There had been no discussion, she said, about what interest rate would be charged if interest was to be charged.

47. The plaintiff was asked about the hearing of her personal injury actions on 5 and 6 November 2003. She said that she thought that she was going to win the case and would get back at least some of the money she had paid, such as medical expenses. She did not think that she was going to be giving evidence. She said that Mrs Ryan had told her that she would not have to go into court and that the case could be settled outside the court. She denied that she had been prepared by Mrs Ryan or Mr Maxwell for giving evidence.

48. She recalled that the two cases had been settled at the end of the second day for $75,000.00 plus costs.

49. She was asked whether she had been paying money to Mrs Ryan prior to the date of those hearings. She was aware that money was being paid from time to time to Mrs Ryan. Her son had attended to payment of bills. She was aware that payments had been made for doctors and for court fees, and that some money had been paid for Mrs Ryan's professional fees.

50. Mr Hausfeld asked the plaintiff to read aloud the 2002 costs agreement. She did so, it a somewhat halting fashion. The plaintiff was generally able to give her evidence before me intelligibly. There was no suggestion that she might require an interpreter.

51. Mr Hausfeld asked the plaintiff to explain some of the words used in the agreement. She said that she did not know what disbursements were, and that Mrs Ryan had not explained that to her. She did not know the meaning of the expression "where applicable", or "irrevocably authorises". She understood that to authorise meant to give permission but she was unfamiliar with the word "irrevocably" and said that Mrs Ryan had never explained that to her.

52. During the portion of the trial when the plaintiff was giving her evidence, the defendant was unrepresented and cross-examined the plaintiff herself. She put to the plaintiff that she had been successful in a number of businesses including supermarkets, cafes, restaurants and meat businesses, to which the plaintiff agreed. She was asked about a farm at Hillston. Her response was that she had nothing to do with the farm, although she was aware that meat from the farm was sold at the family butchery.

53. She agreed that she and her family had real estate properties. It was put to her that the value of the properties was about $30 million. She said that she did not know the figure. She agreed that in addition to properties in Australia, she and her husband had properties in Greece.

54. She agreed that she herself had supervised the construction of the family home, on a small acreage just out of Canberra, organising tradesmen, and that much of this work had been done when her husband had been away. She agreed with the proposition that she was an intelligent woman though without any formal education. She had been a friend of Mrs Ryan's parents for some twenty-five years but had not known Mrs Ryan well. She thought she had met her socially.

55. She agreed that she was a partner with her husband in the family business, and had been a party to other proceedings in the court. She was asked to comment on some documents which had been prepared or produced by Mr Halpin, the family accountant, but said that she was not familiar with the documents. She agreed that Mr Halpin had produced a report dealing with the economic loss aspect of her claims for damages for personal injury.

56. She agreed that she had attended a conference at Mr Maxwell's chambers in Sydney and two or three conferences with Mr Maxwell in Canberra before the hearing of her cases. She agreed that she had refused to provide copies of tax returns. She had ultimately provided copies of her tax returns but with instructions that they were to be taken to Phillips Fox in a confidential fashion, not to be seen by anyone at Mrs Ryan's firm apart from herself.

57. She agreed that she had been extensively cross-examined during the hearing about her financial affairs, including the tax returns.

58. The plaintiff agreed that at the end of the second day, during which she had been cross examined, she left the courtroom very upset.

59. The plaintiff agreed that at one point, whilst being cross examined through a Greek interpreter, she had said to the interpreter "You answer what is best for me". She denied saying on another occasion (in Greek) "The best is to say that I don't remember".

60. Mrs Ryan cross-examined the plaintiff at some length about what had happened at the end of the second day of the hearing in November 2003. The plaintiff gave an answer in the following terms:

You put me in all this trouble. What don't you say the way it was? I remember the words helping me. I said when we walk out and I said get me out of this. I want to get out of this because you didn't explain what was going to happen. I didn't know what was going to happen at all because you knew I was a person and I didn't even went to the police station not to go to court. You've been promised me all the way along, your Honour, I wasn't going to go to court. You never told me I wasn't going to get any money. That's why I was saying it. Not because I didn't get any money, not at all, because at that stage yes it's true I wasn't going to get any money. It wasn't that. My credibility it's good, it has been good. I'm very proud. I've been 52 years in this country. I help people. I don't so many things, right? So you can't put my credibility down if something I didn't understand from the. . .

61. The plaintiff was cross-examined about the copy letter with handwritten amendments which she had signed at the court at the end of the second day. The plaintiff agreed that she had signed that letter but said that no one had read it or explained it to her. At that time she trusted Mrs Ryan as her solicitor, in the same way that she trusted her accountant and banker, and signed when she was asked to do so.

62. The defendant cross-examined the plaintiff extensively about the evidence she gave during the personal injury proceedings through an interpreter, Mr Antoniou. The plaintiff agreed that she had known him for more than thirty years. Her evidence was that the defendant had asked her whether she wanted a translator. She said that she would find this helpful. The defendant made some inquiries but the interpreter she contacted was unavailable. This was shortly before the hearing. The plaintiff said that she told the defendant that she had a friend who worked in the Taxation Department and did translation in the court system. She gave the defendant Mr Antoniou's name and telephone number.

63. The plaintiff agreed that she had told the defendant that she could understand English but that it would give her more time to think about the questions and formulate her answers in the witness box, because she was very nervous.

64. The plaintiff said a number of times during her evidence that her understanding about the 2002 costs agreement was that the hourly rate was $380.00 for the barrister, Mr Maxwell and $280.00 for the solicitor, Mrs Ryan. The plaintiff denied that Mrs Ryan had read her questions from a prepared piece of paper at the time she signed the 2002 costs agreement. She had some recollection that members of staff had come and gone from the room while she was talking to Mrs Ryan about the agreement, including Mrs Ryan's daughter Emily. Her recollection was that her conversation with Mrs Ryan that day had been a short one. She said that the agreement had not been explained to her, but that she had signed it because she trusted Mrs Ryan as her lawyer. She agreed that generally her relationship with Mrs Ryan during the course of the personal injury matters leading up to hearing had been a pleasant and agreeable one.

65. Evidence was also given in the plaintiff's case by her sons Stan and Trevor. They were both by the time of the hearing about fifty years of age. They were both born in Australia, and grew up speaking both English and Greek.

66. Stanley Vizovitis said that his mother's English was poor, adequate for her to get by at a basic level, but requiring help with correspondence and documents. He said that his father's English was very much better. His mother did not write English but if necessary would dictate a letter to him. She would write a shopping list in what he described as broken Greek/English.

67. He said that he tried to attend as many meetings as he could with his mother, when she saw Mrs Ryan about her claims. He read incoming correspondence, wrote some letters, and dealt with the solicitors by telephone from time to time. He dropped cheques or accounts into their office. He did his best to explain to his mother what was happening. He said that he had been with his mother when she first consulted Mrs Ryan early in 1995. He recalled Mrs Ryan saying that she would be charging approximately $180.00 an hour.

68. He had not been present, or involved, in his mother's signing of the 1999 costs agreement, or the 2002 costs agreement.

69. He had been present at court on the days when his mother's personal injury actions were heard. He was present during discussions with his mother, Mrs Ryan and Mr Maxwell. He described the scene as hurried and hectic, with pressure on his mother to make a decision whether to settle or proceed.

70. Stanley Vizovitis had had a power of attorney for his mother, to cope with periods when she was out of Australia.

71. He agreed in cross-examination that he had been injured in a motor vehicle collision in 1986 and had brought proceedings for damages through a solicitor, Mr Christopher Macphillamy. His case had been settled. It had apparently been followed by proceedings of some kind between Mr Macphillamy and himself about costs.

72. Trevor Vizovitis gave evidence to similar effect. He had also been present at the court during the hearing of his mother's claims. He gave evidence of a conversation with Mr Maxwell, who was asked how much his fees were up to that point. Trevor's recollection was that his reply was that it was somewhere between $13,000.00 and $16,000.00, but that he was happy to discount the fee to assist in achieving a settlement. Trevor said that Mr Maxwell had looked at Mrs Ryan and said "I am assuming that you'll do the same". He said that he remembered that clearly because Mrs Ryan looked shocked at the idea of having to reduce her costs. His recollection was that she had estimated that her costs to that time were of the order of $40,000.00 to $50,000.00. His recollection is that the settlement discussions were very rushed. He said that he had been present in a witness conference room at the court after the second day of the hearing of his mother's action, when she had signed a settlement instruction.

73. Trevor Vizovitis' evidence was later the subject of an objection by the defendant on the ground that he had been in court for some of his mother's evidence. I am not satisfied that this suspicion was justified. He completed his evidence on 10 June 2010. The hearing was then adjourned for 15 months.

74. I said that I would in the circumstances be prepared to permit the plaintiff to call further evidence on the issue of disadvantage, notwithstanding that counsel had said earlier during the afternoon that he did not proposed to call further oral evidence.

75. At the end of the afternoon I asked counsel for the plaintiff how much longer the hearing was likely to take. He said that he thought there would be a further two to three days involved. I gave leave to the parties to approach the list clerk to fix a date to complete the hearing.

76. The matter was listed before a deputy registrar during December 2010, and listed for the completion of the hearing before me on 19 September 2011 with an estimate of three days.

77. On 8 September 2011 the defendant filed an application asking for an order that the solicitors for the plaintiff, Dibbs Barker, be restrained from continuing to act for her. The ground of the application was that three persons who had been employed at her firm were, by the time of the hearing, employed by Dibbs Barker. The hearing of that application occupied a day and a half, with the three employees, and a partner at Dibbs Barker, giving oral evidence. I was not satisfied that there was any practical likelihood that any of the former employees would disclose to Dibbs Barker any confidential information which might damage the defendant's case or assist the plaintiff's case. I was satisfied that a fair-minded reasonably informed member of the public would not conclude that the proper administration of justice be required that the firm be restrained from continuing to act. I noted that the application had not been made until the date set aside for the continuation of the hearing, and that there had been no explanation for the delay in bringing the application, which if successful would have resulted in a further adjournment of the proceedings to enable the plaintiff to instruct new solicitors and to give those solicitors an opportunity to prepare for the continued hearing. I ordered that the application be dismissed with costs.

78. The defendant pursued at that point her application for summary judgment, which I refused. I noted that counsel for the plaintiff had not formally closed his case when he made the statement that he did not intend to call further oral evidence; that the defendant had not yet gone into evidence or commenced her own case; and that I was not satisfied that there was any prejudice to the defendant in permitting the plaintiff to call further evidence.

79. In September 2011, Brian Hatch was called in the plaintiff's case. He is a solicitor, admitted in 1984 and practising in Canberra and Queanbeyan since then. He is a former Vice-President of the ACT Law Society. His practice over the years has predominantly been in acting for plaintiffs in personal injury litigation. He prepared a report in letter form which was tendered. In his opinion the two statements of claim in the plaintiff's personal injury actions had been simple rather than complex and should not have required drafting by counsel. The injuries and disabilities pleaded did not demonstrate any complex medical issue.

80. Mr Hatch said that the claims for economic loss were potentially complex, the plaintiff being a partner in a business rather than an employee, and claiming a reduction in working capacity rather than a complete inability to work. He said that that it was common in such cases for it to be difficult to demonstrate loss of income. Tax records for a self-employed person in his experience often showed little change of income after the date of injury, especially in a family business with other members of the family working. Such claims, he said, often resulted in the court making an allowance for loss of earning capacity by way of a buffer. He thought that this would have been the likely outcome had the plaintiff's actions proceeded to hearing.

81. Mr Hatch was asked to express an opinion about the hourly rates set out in the two costs agreements. He said that adopting hourly rates rather than scale for such legal work tended to reward inefficiency. His opinion was that the appropriate hourly rate for the period in question was the amount permitted by the scale, including a 25% loading for care, skill and responsibility in respect of applicable items. He noted that the hourly rate in the scale in 2002 was $268.10 including GST: the rate in the agreement as to costs was $380.00 plus GST, a total of $418.00 per hour. He also noted that for the same period the agreement set an hourly rate for a legal assistant at $85.20 plus GST, a total of $104.00 per hour, as against a scale rate at that time of $62.50 per hour.

82. Mr Hatch expressed the opinion that some work in the solicitor's account amounted to overcharging. He gave the example of fees charged for obtaining initial reports from treating doctors.

83. Mr Hatch had been provided with copies of the two costs agreements, and copies of the defendant's time costing records. He arrived at the opinion that the fees charged were excessive. He thought that the hourly rates in the agreements were excessive, and that there was too much time recorded as having been spent on various items of work.

84. In his oral evidence Mr Hatch said that he thought that the record of the work carried out on the plaintiff's files by the defendant's firm amounted to over-servicing. He could not imagine how a solicitor could have spent the amount of time claimed. He conceded that he had not been provided with the defendant's files, and had not read the transcript of the two days of the hearing in November 2003. He had not been provided with a copy of Mr Halpin's report. He was given a copy of the report during cross- examination, but said that it did not alter his opinion but rather tended to confirm it. Having read the report, he did not see the economic loss aspect of the claim by the plaintiff as having been complex.

85. Mr Hatch conceded that he would not regard himself as an expert in the area of legal costs.

86. Mr Hatch disagreed that it was standard practice in the profession for a solicitor to charge a higher hourly rate in acting for a plaintiff in a personal injury action where the costs were not to be paid until the conclusion of the matter, as opposed to the rate which would be charged if the solicitor were to render accounts at periodic intervals during the progress of the matter.

87. Counsel for the plaintiff then called Mr Michael Scott, a solicitor of thirty-four years experience who had specialised for the previous eighteen years in preparation of bills and assessments of costs, generally in litigation matters, and particularly in actions by plaintiffs for damages for personal injury. Mr Scott gave evidence for about a day and a half.

88. At the end of that week I asked the parties how much longer the hearing might take. Counsel for the plaintiff thought that it might take another four days. The defendant thought that her case would take two or three days, and that it might be prudent to allow two weeks. I fixed the further hearing for Monday 7 November 2011 with the intention of sitting on for as long as it might take to conclude the hearing.

89. On 7 November it transpired that the defendant had briefed Mr BMJ Toomey QC who was unavailable on that date because of an injury a few days earlier. He would be available, I was told, on the Wednesday of that week, 9 November. Mr Scott who had been disabled due to illness at the time he gave his evidence, and did so through a friend as interpreter, died on 1 November 2011.

90. Mr Toomey for the defendant called Mr Kerry Hardman, a solicitor admitted in 1979 in NSW who had practised since 1998 as a legal costing consultant. Mr Hardman gave evidence in chief and produced documents which were marked for identification at that stage.

91. On the following Monday, 14 November 2011, evidence was given for the defendant by Mr Keith Bradley, a Canberra solicitor. Evidence was then given by Ms Claire Naidu (formerly Grogan) who had been employed by the defendant's firm and had witnessed the 2002 costs agreement. Mr Toomey also called the defendant's daughter, Ms Emily Warren, who had worked in her mother's firm over many years, commencing in 1995 when she was still at school, and had later been admitted as a legal practitioner herself. Her evidence occupied more than a day. Mr Toomey then called the defendant, who gave evidence in chief for a little over a day. Her cross-examination occupied the whole of the following day. It was then necessary to adjourn the matter for almost five months, until April 2012, when the cross-examination continued for a further two days. Again, the hearing did not finish during that week, and again it was necessary for me to stand the matter over to a date to be fixed by the list clerk. After discussion with counsel I requested that a week be set aside to complete the hearing.

92. In July 2012 the defendant filed an application for orders that I disqualify myself from further hearing the matter; alternatively that I dismiss the proceedings with costs; alternatively, that I make specified directions for the further hearing; and that the plaintiff provide $300,000.00 security for costs. I heard the application commencing on 24 September 2012. The defendant was represented for the hearing of the application by Mr MJ Neil QC. I published reasons for my decision on 19 October 2012 to dismiss the application with costs. I ordered at that time that the matter be listed a week later to fix a date for a directions hearing convenient to counsel who would be appearing at the resumed hearing.

93. I conducted a directions hearing on 31 October 2012, attended by Mr Hausfeld of counsel for the plaintiff and Mr Neil QC (by telephone) for the defendant. I made a number of directions, including a direction that the two costing consultants, Mr Hardman and Mr Travers, meet in an endeavour to narrow their areas of disagreement.

94. Mr Hardman and Mr Travers did not meet as I had directed. The plaintiff made a further application on 26 November aimed at resolving this impasse. The application came before me on 29 November and again on 7 December 2012. In the event I was not persuaded that I needed to make any further orders or directions. I confirmed the date for the continuation and I hoped, the completion of the hearing for Monday 17 December 2012, with the whole of that week available for that purpose.

95. On 17 December Mr Hausfeld appeared for the plaintiff as before. The defendant was represented by Mr Benjamin O'Donnell of the Sydney Bar. There was no explanation for the fact that Mr Neil QC, or for that matter Mr Toomey QC, was no longer in the matter. I am unaware when Mr O'Donnell was first briefed but I take this opportunity to commend his successful efforts over what must have been such a short period to digest a considerable volume of transcript, exhibits and other documentation.

96. On that day evidence was taken from Mr Michael Maxwell of the Sydney Bar who had appeared for the plaintiff on the hearing of the personal injury actions in 2003, Mr Michael Phelps, an experienced Canberra solicitor and former president of the ACT Law Society, who gave opinion evidence about hourly rate charges by solicitors; and Mr Samuel Coupland, managing director of FMRC Benchmarking Pty Ltd, a company carrying on business as a management consultant to the legal profession, and publisher of an annual survey of financial information comparing solicitor practices around Australia.

97. On the following day Mr JH Gibson gave evidence. Mr Gibson is a Sydney lawyer practising as a legal costing assessor. Mr Hardman was then recalled, and gave further evidence by telephone, over a period of the balance of that day and most of the following day.

98. On the next day, Thursday 20 December 2012, Mr Hausfeld called Mr Travers in reply.

99. During Mr Travers' evidence in chief, Mr O'Donnell raised an objection on the basis of conflict of interest, by reason of the fact that Mr Chapman, the other principal in the firm Legalcost, had prepared the assessment of costs following consent judgment in the personal injury actions in 2003 which led to the settlement of the plaintiff's claims for party-and-party costs. Mr Travers was cross-examined on the voir dire. Mr O'Donnell called the defendant and Mr Chapman, who also gave evidence on the voir dire. At the conclusion of that evidence, after hearing submissions from counsel, I was not persuaded either that the evidence of Mr Travers was inadmissible, or that I should exercise any discretion I might have to exclude it by reason of the asserted conflict.

100. At the end of that day an application was filed and served by the defendant seeking an order that the jurisdiction of the Court which I was exercising as Master be exercised by a judge, specifically with a view to determining whether the evidence of Mr Travers was admissible in the plaintiff's case in reply, and that the hearing before me be stayed until that issue had been determined.

101. On the following day, Friday 21 December 2012, the application was listed before Refshauge J. His Honour heard submissions of counsel for both parties on the application, and this occupied the morning of that day. His Honour delivered ex tempore reasons and dismissed the application with costs. I resumed the hearing of Mr Travers' evidence, which occupied the balance of that day, the last sitting day of that year.

102. The hearing resumed on 7 January 2013. Mr O'Donnell submitted that I should reject the tender of a report by Mr Travers expressing his opinion as to the entitlement of the defendant to costs as between solicitor and client, as evidence in reply. For reasons which I gave at the time, I allowed the tender, subject to the deletion of some portions which were not pressed by Mr Hausfeld.

103. At that point Mr O'Donnell sought leave to qualify a further, at that time unidentified, expert to respond to Mr Travers' evidence. I refused that application, which would have involved a further adjournment, for brief reasons which I gave.

104. The cross-examination of Mr Travers proceeded, and occupied the balance of that day and most of the next day. At the conclusion of the evidence I made directions about written submissions, and adjourned the hearing for oral submissions.

105. Another solicitor, Michael Scott, was called to give expert evidence in the plaintiff's case. Mr Scott was admitted as a solicitor in 1967, and practised for many years in the field of personal injury litigation for plaintiffs in Canberra and Queanbeyan. He practised from 1993 exclusively in the field of assessment of costs and preparation of bills of costs. Mr Scott was briefed in mid-2010 with copies of the defendant's files in relation to the plaintiff's personal injury actions, copies of the 1999 and 2002 costs agreements, copies of invoices for fees raised by the defendants firm, copies of memoranda of fees from Mr Maxwell of counsel and copies of pleadings in the present action.

106. Mr Scott did not undertake a detailed costing exercise. He did not prepare a draft bill in taxable form or descend into that level of detail in calculating what the defendant's firm might have been found entitled to charge in the absence of the cost agreements. He noted that Mr Chapman had carried out what has been described as a mini-assessment on the instructions of the solicitors for the defendants in the personal injury actions, with the cooperation of the present defendant, and had ultimately arrived at a figure for which the party-and-party costs were agreed, of $22,000.00 for professional costs in relation to the action arising out of the first collision, $12,500.00 for costs in relation to the action arising out of the second collision, and a combined figure of $18,500.00 for disbursements, making a total of $53,000.00.

107. Mr Scott accepted these figures as appropriate for party-and-party costs. From his experience it would have been appropriate to add 15% to the professional costs as between solicitor and client. He added the $22,000.00 and the $12,500.00 ($34,500.00), added 15%, and a further $750.00 to cover work done in finalising the matter after the agreement was reached as to party-and-party costs. This brought him to a total of $40,425.00, which he regarded as a reasonable figure for solicitor-and-client costs for the two actions.

108. He expressed the opinion that the fees charged by Mr Maxwell of counsel ($16,495.00) was far higher than would have been charged by Canberra counsel at the time. He regarded these fees as excessive by an amount within an approximate range of $7,500.00 to $8,800.00.

109. Mr Scott also expressed an opinion about the hourly rate set out in the two costs agreements. His opinion was that the rate of $280.00 per hour for a principal in the 1999 agreement was a little above the rate which he thought a number of personal injury solicitors were charging at that time ($250.00 per hour) but not so far above that rate as to be seen as unreasonable. The rate of $380.00 per hour in the 2002 agreement was however well above the going rate which he said had been $300.00 to $320.00 per hour at that time.

110. Mr Scott did not agree that the FMRC survey results represented an accurate reflection of charges by solicitors in Canberra for plaintiff personal injury work at the relevant dates. He took the view that the samples were too small and that the rates were likely to reflect those of senior partners in major firms undertaking different legal work.

111. Mr Scott did not agree that it was usual practice, or permissible, for solicitors to charge a higher hourly rate for what was described as carrying costs until the completion of a matter, although he accepted that a solicitor and client could reach agreement to that effect.

112. He was asked about the usual practice in relation to a markup for care skill and responsibility. His evidence was that the usual practice was to allow a markup of 50% on the items coming within the "instructions for brief" item. Commonly this approximated to a mark up of one-third of the total bill.

113. In a supplementary report, Mr Scott was asked for his opinion as to whether the costs agreements were fair and reasonable. His opinion was that each of the agreements was neither fair nor reasonable.

114. As to fairness, he said that a solicitor was required to take special care to ensure that a client was fully aware of the import and consequences of entering a costs agreement, particularly where the amount proposed to be charged exceeded the scale applicable at the time. He pointed out that neither agreement said anything about the fact that the costs proposed to be charged would not be recoverable from the other party in full. The agreements did not state explicitly that the rates set out were to apply retrospectively to work already performed, resulting in greatly increased costs over and above those which had previously been agreed. He confirmed his earlier opinion as to the reasonableness of the rates set out in each of the agreements.

115. For reasons of convenience the defendant did not commence her evidence until a number of other witnesses in her case had been called. Kerry Hardman gave expert evidence as to the reasonableness of the costs charged or chargeable by the defendant under the costs agreements. He was admitted as a solicitor in NSW in 1979, and had practised since 1983 in legal costing, writing regular columns on the subject in Law Society journals and publications. He was provided with the defendant's file, in some four archive boxes, some in bound folders and some loose. He prepared an itemisation of charges in each of the two personal injury actions, at the applicable ACT Supreme Court scale. He did not see it as part of this task to deal with disbursements as such, but he did include as costs items such things as faxes and photocopies, which were not really disbursements although the solicitors had characterised them in that way.

116. After the 1999 costs agreement, he took the view that the photocopy and fax items had become disbursements, and he then recorded them as disbursements. The two scale-based bills came to about $79,500.00 in total.

117. Mr Hardman had given evidence a number of times in NSW matters but had not previously given evidence in this court.

118. Mr Hardman said that he had charged fees of about $8,000.00 for the tasks he had undertaken on the instructions of the defendant. His evidence was taken no further on its first day, and it was more than a year before he resumed it.

119. On the following day (14 November 2011) evidence was given by Keith Bradley, a partner in the firm Bradley Allen. He was called to give opinion evidence as an experienced solicitor practising in the area of personal injury litigation for plaintiffs. By the time he gave his evidence he had moved out of that field and was in charge of the estate planning and probate area of the firm.

120. Mr Bradley had prepared a report dated 8 November 2011, in which he set out the hourly rates orally agreed between the plaintiff and defendant in 1995 and the rates in the 1999 and 2002 costs agreements. He set out in his letter the charge-out rates of partners at his firm during the years from 1995 to 2004, including $240.00 per hour in 1995, $300.00 per hour in 1999, $335.00 per hour in 2002.

121. He said that his firm's practice had always been not to bill work done for a plaintiff in a personal injury claim until settlement or completion of the matter. He was asked to assume that the plaintiff had been a business woman with reasonably substantial assets, in a reasonably substantial financial position at the time she instructed the defendant. He expressed the opinion that the defendant was entitled to charge a higher hourly fee to compensate for a possible long delay in conclusion of the claim give the potential difficulties in progressing the claim and the inherent difficulties and unpredictability in litigation.

122. In his oral evidence, Mr Bradley explained that the partner rates had been applicable to all kinds of legal work conducted by partners at the firm, whether litigation, commercial, property or other work. Lower rates were charged for solicitors who were not partners. His firm had not delegated work to non-lawyers working in a paralegal capacity, but had employed such clerks in the conveyancing area.

123. His firm had not increased the hourly rate for matters where the firm would not be paid until completion, such as personal injury plaintiff work. There were other areas of legal work where it was the practice of the firm to require payment of fees as the matter proceeded.

124. Mr Bradley said that a higher hourly rate might be justified where the client could be described as a higher maintenance client in frequent telephone or personal communication with the firm.

125. He said that during the years he had been asked about, his firm had held itself out as prepared to undertake plaintiff personal injury work on a no-win no-fee basis, which he saw as a necessary product of the competitive landscape at that time within the legal profession.

126. In cross-examination, Mr Bradley said that his firm had become the Canberra office of the national firm Clayton Utz in 1995. In 2000 he and most of the Canberra partners left Clayton Utz and recommenced practice as a Canberra firm, Bradley Allen. Some partners and staff continued as partners in the national firm, Clayton Utz.

127. He said that the fees charged by the firm during the years when it was the Canberra office of Clayton Utz generally reflected the Canberra marketplace, and were set by the Canberra partners rather than by the national board of the firm. He agreed that the firm had been a medium to large firm in Canberra terms. The firm would have been seen as well-established and well-regarded and the hourly rates charged reflected that standing. The partners and executive manager of the firm would make enquiries from time to time of partners and managers at other firms of similar size, profile and client base, in the course of setting hourly rates each year. He described this as benchmarking. He said that his firm benchmarked medium and larger firms, and would not have been using small firms as a benchmark. The firm had had, and continued to have, a client base of continuing and "repeat" clients who tended to be aware of the fee levels and were able and prepared to pay those fees. He agreed that most personal injury plaintiffs tended not to be repeat clients.

128. He said that the hourly rates charged at the time by his firm had not been by any means the highest hourly rates charged by any firm in Canberra. Competition based upon price was a feature of some kinds of legal work, in particular residential conveyancing, but this was not a feature of most of the work offered by his firm, and was not a feature of the plaintiffs personal injury market in Canberra. Mr Bradley did not think that the hourly rate charged was a factor at all as far as the consumer client was concerned in plaintiff personal injury work. The focus of such clients tended to be upon how much they could expect to receive following completion of the matter.

129. Mr Bradley conceded that he had no idea about the hourly rates being charged by small firms during the years in question.

130. Mr Bradley said that his firm had long had a substantial commercial practice in Canberra's Greek community, and that many clients in that community had substantial assets. I asked him whether, if a member of one of those families had come to him with a personal injury claim, he would have billed them monthly or waited until the end of the matter and billed them in the same way other personal injury plaintiffs were treated. His response was that his firm would bill them at the end of the matter in the same way as other clients, and would not impose a markup on their hourly rates.

131. Mr Bradley thought that it might be justifiable to charge a higher rate for a difficult, demanding client, though he had never done so at his own firm.

132. Senior counsel for the defendant next called Claire Naidu (nee Grogan). Ms Naidu worked at the defendant's firm from late 2000 until about August 2003. She was a law student at the time and was employed to provide secretarial and paralegal services. She was admitted as a solicitor in 2004 and by the time of her evidence was employed with another Canberra firm, practising in family law.

133. Her duties at the defendant's firm had included some administrative matters like opening files, some typing, greeting clients and getting them tea or coffee, and tasks of that nature. During her time at the defendant's firm the number of people working there varied but there were generally something like six or seven including the defendant. Ms Naidu identified her signature as witness to the 2002 costs agreement. She had no specific memory of the execution of the document. The plaintiff was pointed out to her in court. Asked whether she recognised her, Ms Naidu said that her face was familiar.

134. She recalled a practice in the office as to witnessing of costs agreements. She said that the defendant would contact her and ask her to come in to witness an agreement. She would go into the defendant's office where the client would be sitting. The defendant would usually ask a number of questions such as whether the client had any questions about the document and whether the client would like to receive independent legal advice about it. The defendant would tell the client what the fees would be and would usually tell the client that there might be some solicitors in Canberra who would charge more and some who would charge less than her charges.

135. She said that the defendant generally had about 300 current files at any given time, and the witnessing of a costs agreement by a client was a frequent occurrence, sometimes as often as once or twice a day although there might be a few days between such occasions. She said that the form of questions asked by the defendant was gone through on every occasion. To her recollection no client had ever asked for independent legal advice. There had never been an occasion where a client had in effect disagreed with any of the questions.

136. By the time she gave her evidence Ms Naidu had been working in legal offices for eleven years, seven as a solicitor, and had dealt with hundreds of clients.

137. Ms Naidu had no recollection as to whether anything had been said by the plaintiff or by the defendant about any earlier signed costs agreement, or about the fact that the 2002 agreement was to operate retrospectively. Indeed she had no specific recollection of having been in the room at the same time as the person she could see at the back of the court who she now understood was the client at that time.

138. I asked her whether she had a particular recollection of the plaintiff being a client of the defendant's firm during the time of her employment there. She said that the plaintiff's name rang a bell, and that she could remember a number of files or folders for the matter.

139. Ms Naidu had sworn an affidavit in mid-2008 at the request of the defendant. This was already six years after the event and was hardly a contemporaneous record of what had taken place. I prefer her oral evidence in chief, without any suggestion of leading or prompting, to the somewhat greater detail in the affidavit.

140. Senior counsel for the defendant then called the defendant's daughter, Emily Warren (nee Ryan). Ms Warren was born in 1980. She swore an affidavit during 2008, upon which she was extensively cross-examined although the affidavit did not find its way into evidence before me. Ms Warren is admitted to practice in the ACT, and at the time of her evidence held a practising certificate as a solicitor. She is also admitted in California and in the United Kingdom. She has worked as a lawyer for periods of time in California and in Bermuda.

141. She recalled knowing the plaintiff as a friend of her grandparents from an early age. She remembered going as a child with her grandparents to Canberra Meats. She remembered seeing the plaintiff there, and thought that she appeared to be running the business. Ms Warren never had any difficulty communicating with the plaintiff, and thought that her English was quite good if not very good.

142. Ms Warren said that she started working in her mother's practice from 1991, when she would have been 11. She was formally employed there during school holidays from 1995, and worked there part-time from 1999 when she started university.

143. She remembered the plaintiff coming into the office very often, sometimes without an appointment to drop off documents.

144. She said she was present at discussions about legal costs between her mother and the plaintiff prior to the signing of the 1999 costs agreement. She recalled one or more conversations to the effect that the plaintiff could pay her costs as the matter proceeded, generally on monthly invoices, at a lower rate of $180.00 per hour. Alternatively she could pay at a higher rate of $220.00 per hour if she chose not to pay until the end of the matter. Ms Warren heard the plaintiff say that she wanted to pay the accounts as she went.

145. Ms Warren had witnessed her mother's signature to the 1999 costs agreement. Her recollection was that the agreement had been signed by the plaintiff somewhere else and returned by post.

146. Ms Warren said that she was present in December 2002 when the second costs agreement was signed. She recalled the plaintiff being present as well as her mother and Ms Naidu. She said that she had been in the room because she had been asked to help collate documents such as medical reports. She heard her mother say that the hourly rates had changed. Her mother had referred to a letter she had sent to the plaintiff, and asked whether she was ready to sign the new agreement. The plaintiff said that she was. At that point her mother asked Ms Naidu to come into the room to act as a witness. Ms Warren said that her mother provided the plaintiff with time to read the agreement again, which she did over a period of about five minutes. Ms Warren said that her mother probably would have "read the whole agreement out". She said that there had been a list of questions provided at the end of the agreement. She was familiar with those questions because her mother always read the questions out at the time of signing a costs agreement by a client. Ms Warren said that she remembered her mother asking the plaintiff those questions, and remembered the plaintiff's answers. Her evidence was that her mother asked the plaintiff "Are you signing this costs agreement freely and voluntarily?" The plaintiff had replied in the affirmative. Her mother had then asked "do you understand what you are doing?". The plaintiff had replied "yes". Her mother then asked "do you understand that our rate is $380.00 an hour plus GST for a senior solicitor?" The plaintiff had replied "yes". Her mother then asked "do you understand that the rate for a junior solicitor is $280.00 plus GST?". Again the plaintiff replied "yes". Her mother then asked whether she understood that the rate for a paralegal was about $107.00, and the plaintiff again replied in the affirmative.

147. Ms Warren said that her mother then asked "do you understand that this rate is higher than some solicitors and some solicitors charge more and others charge less?" The plaintiff replied "yes, I definitely understand this. I know other solicitors charge more".

148. Her mother then asked the plaintiff "do you understand by signing this costs agreement that you forfeit your right to taxation?" Her mother explained that this was not taxation by the Australian Taxation Office but a process of review of a solicitor's bill by the court. The plaintiff replied that she understood "that she was removing that right". Her mother also asked whether the plaintiff required independent legal advice on the document to which she answered "no".

149. Ms Warren remembered the plaintiff saying "I can't afford to carry the costs of the litigation as well as the medical expenses, so I want to pay at the end and I don't care because NRMA - they're going to pay for it anyway". She said that her mother told her that that was not the situation and that she would not recover all of her costs although she might get some amount back from the NRMA. The plaintiff then said that she knew and understood that. Ms Warren told her at that point that it was likely that she would only get about 30% of her costs back even if she were successful. Ms Warren described the plaintiff as a very demanding client. She called at the office frequently, and often rang the office. She went overseas for some months every year. As a client she required a significant amount more work than other personal injury plaintiffs. There were far more medical reports than in a typical personal injury action. The plaintiff was difficult about providing copies of tax returns and other financial information.

150. Ms Warren was involved in the lead-up to the hearing in November 2003, attending conferences with her mother, Mr Maxwell of counsel and the plaintiff. She assisted during the hearing, going back and forth between the court, the library and the firm's office.

151. She was at the court at the end of the second day and remembered the plaintiff being visibly upset when she came out of court. Ms Warren heard her say to Mr Maxwell and her mother "I want to get out of this. Get me out of this." She heard Mr Maxwell and her mother tell her that they were unable to talk to her because she was in the middle of cross-examination. They could not talk about her evidence and were limited to talking to her about any settlement instructions she wished to give them. Ms Warren said that she heard Mr Maxwell say to the plaintiff "You perjured yourself on the stand. You'll be lucky if you get any money at all".

152. Ms Warren said that settlement discussions then took place. The plaintiff asked Mr Maxwell whether he could try to achieve a settlement. He spoke to counsel for the defendants. He came back and said that an offer was available of $75,000.00 inclusive of costs. Ms Warren was not present for discussions between the plaintiff and her mother and Mr Maxwell at that point. She was aware that a settlement was achieved later that afternoon or early evening at $75,000.00 plus costs.

153. Ms Warren's evidence was that the plaintiff's written instruction to settle was a signature on a copy of a letter from Ryans to her dated 21 November 2002 which was amended on the day she signed it (6 November 2003) in handwriting.

154. The original letter was a letter enclosing a copy of a letter from Phillips Fox, the solicitors for the defendants in the personal injury actions, making a Calderbank offer of $100,000.00 plus costs. The letter from Ryans gave the plaintiff an estimate of the amount she would be likely to receive if the offer were accepted. The letter explained to the plaintiff that from the $100,000.00 would be deducted payments to the Health Insurance Commission and her private medical insurer of $23,000.00, leaving her $77,000.00 less any reimbursement to social security and less what was described as "our account for client/solicitor costs". The letter stated that legal expenses were estimated to be in the vicinity of $45,000.00 to $50,000.00 to completion. The letter did not provide any estimate of how much might be recoverable from the other side in party-and-party costs. The letter referred to a telephone conversation earlier on 21 November 2002 in which the plaintiff had said that she was unlikely to accept the offer, and asked for written confirming instructions.

155. It is apparent that the defendant had a copy of this letter available at the time of the settlement discussions after the end of the second day of the hearing on 6 November 2003, and adapted it by hand to convert it into a written instruction to settle. After the amendments, the letter appears as a letter from Ryans to the plaintiff in the following terms:

6 November 2003

Dear Mrs Vizovitis

PERSONAL INJURIES

MOTOR TRAFFIC ACCIDENT

We confirm that the offer is for the sum of $75,000.00 exclusive of professional costs and disbursements for both accidents. If you are agreeable, you will be requested to agree to signing a release containing a denial of liability and a confidentiality clause.

If you are in receipt of any social security benefits or a pension we would need to obtain a clearance from Centrelink. We are also required to obtain a clearance from the Health Insurance Commission in relation to any claims before the claim can be paid. The last certificate that we received from HIC was for the sum of $14,117.85 which expired on 29 October 2002 as updated. If we were to accept the offer of settlement we would be required to obtain an up to date clearance figure.

It would be necessary to deduct from the lump sum the following:

1. Repayment to the Department of Social Security, if any;

2. Repayment to the Health Insurance Commission, estimated to be approximately $15,000.00;

3. Repayment to MBF, estimated to be approximately $9,524.65 as updated;

4. Legal expenses as paid by insurer with any adjustment limited to total settlement. The barrister and solicitor agree not to seek any costs above the settlement sum of $75,000.00 less the deductions referred to in this letter;

5. Translation and standby medical costs - not known;

6. Balance payable to you on the basis that the deductions are in accordance with the amount estimated above which total say $50,000.00 for both accidents as adjusted in this letter.

You would receive a sum estimated on this basis to be $50,000.00 less any reimbursements as set out above and the payment of the legal costs of the solicitor and the barrister for client/solicitor costs. You would not have to go to court again and you would not have any further expenses in relation to the matter.

Yours faithfully

Eunice Ryan

RYANS

156. A further handwritten addition to the letter was, in the margin, the wording "$25,000.00 for the first accident and $50,000.00 for the second accident".

157. The amended copy letter was signed by the plaintiff and by the defendant, on 6 November 2003.

158. Ms Warren said that when Mr Maxwell came back from speaking to counsel for the defendants, saying that the other side had agreed to increase the offer to $75,000.00 plus costs, he also said "It's highly unlikely that you will receive anything at all out of this settlement, Mrs Vizovitis". Ms Warren said that the plaintiff agreed to this saying "I just want to get out of it". A little later in the discussions her mother also told the plaintiff that it was very unlikely that she would get any money out of the settlement, to which the plaintiff responded "I know". Ms Warren said that none of the plaintiff's family were present during this conversation.

159. In cross-examination, Ms Warren said that she had drafted her affidavit which she swore in September 2008, while she was in Bermuda. She had been provided with an affidavit by the plaintiff. She had last looked through her affidavit earlier on the day she gave her evidence.

160. Ms Warren agreed that she had not made any notes of the discussions which took place on the day the second costs agreement was signed. She conceded that in her 2008 affidavit she had not mentioned that her mother had read part of the first page of the costs agreement aloud to the plaintiff. She also agreed that she had not mentioned in her affidavit anything about her mother telling the plaintiff that the hourly rates were going up. She agreed that she had been involved in preparing the present matter for trial.

161. She agreed that she had not mentioned in her affidavit that her mother had said anything to the plaintiff about forfeiting her right to taxation.

162. In her affidavit, Ms Warren had said that she was present in the room and had heard her mother ask the plaintiff six questions, and that the plaintiff had provided answers which Ms Warren noted down at the time. The questions and answers as listed in the affidavit were:

(a) Do you understand what you are doing in signing a costs agreement? Yes

(b) Have you read the document? Yes.

(c) Do you require independent legal advice? No.

(d) Are you signing freely and voluntarily? Yes.

(e) Do you understand that the rate is $380.00 per hour plus GST for the principal and $280.00 per hour plus GST for the employed barrister and solicitor and $104.00 plus GST for the legal assistant? Yes.

(f) Do you understand that there may be firms that charge less and there are firms that charge more per hour? Yes.

163. Ms Warren said that it was the practice of the firm "for a client to be asked these questions before executing a costs agreement in the presence of the client, the barrister and solicitor and the witness".

164. Ms Warren said in cross-examination that she should have included a question to the effect that the plaintiff understood that by signing the agreement she forfeited her right to taxation. This was a standard question and should have been included but had not been. She did not accept that in practice the questions had been essentially perfunctory.

165. She agreed that she had said in chief that the list of questions was attached to the costs agreement. She agreed that she had said that, and had said that it had been the case in normal circumstances. Pressed about this, she said that in most circumstances the two documents were signed together. She then corrected this to say that in all circumstances the documents were signed together but that they were "kept in different positions". The page with the questions and answers was not signed by the client but was signed by the witness to the client's signature. The page listing the questions was a standard document, but the practice was to keep the question and answer sheet in a separate place on the file from the costs agreement. She said that by the time she was giving her evidence the practice in the firm had been changed. Clients were asked to sign the questions and answers also, and the question-and-answer page was stapled to the agreement. She said that there had been a search made in the office for the question-and-answer sheet in relation to the plaintiff, but it had not been found.

166. I asked Ms Warren whether it was only this particular question-and-answer sheet which had been lost or whether they had been kept together and all of them had been lost. She said that she could not give a specific answer about that, because they had not gone back and checked for them in other matters. They were expected to be kept on the file for the particular matter.

167. Ms Warren was asked whether her evidence about the form was based on her recollection or simply her knowledge of the normal practice of the firm at the time. She replied that she recalled seeing Ms Naidu sign the form (Ms Naidu was not asked any questions about such a form, nor did she volunteer any evidence about such a form).

168. Ms Warren agreed that no such form had been attached to the 1999 costs agreement either. She said that this was because it had been signed away from the office.

169. Her evidence was that the firm's practice of attaching the question-and-answer sheet to the costs agreement had been in place since her mother had opened the practice in 1991.

170. Ms Warren was asked about any discussion in connection with the question about independent legal advice. She said that her mother had said to the plaintiff that the firm always offered the client the option of getting advice on the agreement from another firm of solicitors. The plaintiff had said "no, why would I want to do that?".

171. Ms Warren was asked whether there had been any other discussion between her mother and the plaintiff at the time of signing the 2002 agreement. She said that there had been a discussion in relation to party-and-party costs. She agreed that she had not made any mention of any such discussion in her 2008 affidavit.

172. It was put to her that in the 2008 affidavit she had deposed (in paragraph 8) to a lengthy conversation which she had quoted verbatim, between her mother and the plaintiff. She agreed that she had had no notes of the conversation, but said that she recalled it precisely, without any notes, when she swore her affidavit six years after the event.

173. Ms Warren agreed that prior to signing the 2002 costs agreement, the plaintiff had not been asked to explain it back so that her mother could be sure that she understood it. It was put to her that the plaintiff had not been asked whether she understood what disbursements were. Ms Warren said that disbursements had been discussed at the meeting and at other meetings. Ms Warren said that she believed that there had been some general discussion in which her mother had talked about disbursements (carried by the office, being faxes and photocopies etc). I put to Ms Warren that faxes and photocopies would not have been disbursements at all. She appeared to concede this, and said that they should have been described as cost recoveries. She described such expenses as office-related expenditure.

174. She appeared to accept that no one had asked the plaintiff whether she understood the word "disbursements" on the day she signed the agreement, nor had she been asked whether she understood what was meant by "irrevocably authorises".

175. She agreed that there had been no discussion on the day about the possibility of their subsequently being a dispute between her mother and the plaintiff about costs or disbursements.

176. Ms Warren was asked about the handwritten changes on the settlement instruction letter, signed by the plaintiff on 6 November 2003 at the court. She said that all of the handwriting had been by her mother, except for the plaintiff's signature. Initially her evidence was that she was certain that all of the handwritten changes had been made before the plaintiff signed the letter. She subsequently appeared to concede that the marginal note splitting the settlement figure for the two actions might have been added after the plaintiff signed the document. In the light of other evidence I must say that this seems to me more likely.

177. Ms Warren was adamant that the three of the plaintiff's sons who were at court on the day had been present for some of the discussions between her mother, Mr Maxwell and the plaintiff, but were not there for the whole of the discussions. She was unable to recall when they left.

178. Ms Warren was re-examined by senior counsel for the defendant. She was asked about some notes she said she had taken at the time of the 2002 agreement. She was asked whether they were still available. She did not think so. They had not been in the file. She would normally have put them on the file herself, or asked an assistant to do so. She had not specifically looked for them, but had not come across them during her preparation in the present matter for the hearing. I asked her whether they were notes of the plaintiff's answers to the listed questions. She said that they had not been. They had been general notes of things she had been undertaking, but she had not been acting as a witness.

179. I reminded her of her evidence that the practice of the firm had been to put the fees agreement in one part of the file and the question-and-answer sheet signed by the witness in another part of the file, and she confirmed this. I asked her where the sheet with her notes would normally have been placed. She said that it would have gone on to the part of the file where the witness statement was placed, not the part of the file with the fees agreement. The question-and-answer sheet and the notes would have been put on a correspondence spike or something of that nature, and that would have been pulled off and taken apart a number of times as the matter progressed.

180. Ms Warren said that she had not had the benefit of the notes when she swore her affidavit in September 2008. She did have a memory of looking for the notes before she left Canberra to go overseas in 2005, and that she had seen them and read them at that time. She had not had occasion to look for the notes again after that.

181. She was also asked in re-examination about discussions she had had with the plaintiff about disbursements. She replied that she meant by the term disbursements in the traditional sense for medical reports and things of that kind, and said that these were discussed regularly every time the plaintiff brought in a bundle of medical accounts. She said that "there would have been significant discussions in relation to those invoices and payment of those and what they included and what they didn't".

182. Ms Warren volunteered in re-examination that her mother had previously told the plaintiff, at the very start of the matter, that she did "not do no-win no-fee agreements" and had never done so. Her mother had told the plaintiff that if she wanted to find another solicitor who would take the matter on, on that basis she could do so. Ms Warren thought that her mother had mentioned the names of a few firms who would take the matter on, but she could not recall the names of any firms she heard mentioned.

183. Senior counsel for the defendant then called Mrs Ryan, the defendant. Her evidence was that she had met the plaintiff before she was instructed, as a friend of her parents, but did not know her well. The initial consultation with the plaintiff had taken place, she thought, on 6 March 1995. The plaintiff gave her instructions to act in a claim for damages for personal injury arising out of the 1994 motor vehicle collision.

184. In 1996 the plaintiff came to see her again, and gave her instructions to act in relation to further injuries she had sustained in a second car accident.

185. Mrs Ryan thought that the plaintiff had come in with her son Stan on the first occasion. At that time there had been a discussion about costs. Mrs Ryan said that she told the plaintiff that in what she called compensation matters the firm offered the opportunity to "pay as you go" or to pay at the end of the matter. If the client chose to pay at the end of the matter the firm charged a higher rate. Otherwise the client would be billed roughly once a month, or as specific issues arose. She had informed the plaintiff that the hourly rates at that stage were $180.00 for "pay as you go" or otherwise $220.00. The plaintiff said that that was fine, and that she would pay as she went, at the lower rate. Mrs Ryan's understanding at that time was that the plaintiff and her husband were wealthy and owned considerable property interests.

186. She said that she told the plaintiff that in addition to legal costs, there would be expenses, called disbursements, as the matter proceeded, to cover such items as medical reports.

187. The plaintiff paid her accounts as they fell due until 1997, sometimes a little late. The accounts included what Mrs Ryan called cost recoveries. She said that this expression encompassed faxes, photocopies, couriers and police reports.

188. During 1996 Mrs Ryan said, she became concerned because the plaintiff was not paying her accounts as they were sent out. She said that the plaintiff had been the only personal injury client the firm had ever had who had elected to "pay as you go".

189. Copies of a number of invoices from the firm's records were tendered. Senior counsel for the defendant pointed out to her that an invoice sent out in August 1995 had been calculated at $280.000 per hour, not the originally quoted $180.000 or $220.00. Mrs Ryan said that her hourly rate had gone up by then from $220.00 to $280.000. She said that the plaintiff went to Greece every year, from July until November, leaving a limited Power of Attorney with her son Stanley. During 1996 Mrs Ryan said that although she was embarrassed to do so, she raised with the plaintiff the fact that the accounts were in arrears. She asked whether the plaintiff wished to enter a costs agreement to pay at the end of the matter. The plaintiff said that she did not, and that she prepared to pay as the matter went along.

190. In November 1997 Mrs Ryan sent a letter to the plaintiff enclosing a form of costs agreement. Her evidence was that the letter was drafted by Mr Timothy Chadwick, an experienced solicitor working at her firm. She described him as a locum, but he seems to have been working at the firm while Mrs Ryan was also working there, and might be better described as having been a consultant. The letter noted that the firm was awaiting the plaintiff's instructions to provide some particulars which had been requested by the insurer, and money for medical reports. The letter pointed out that proceedings had not yet been commenced and had to be started within six years of the date of each of the two accidents. The letter advised the plaintiff to note the expiry date in her diary and stated that responsibility for commencing action within time was solely that of the plaintiff herself (if this was intended to protect the solicitors from future liability in the event that action was not commenced in time, I would have considerable doubt as to its effectiveness).

191. The letter stated that the firm would not be taking any further action until the requested instructions and funds were received. The letter concluded with a paragraph in which the solicitors said that as they had not heard from the plaintiff since a previous letter some two months earlier, they presumed that she wanted them "to carry the account to completion of the matter at the rate of $220.00 per hour". They said that they would accordingly amend their previous amount to that rate, and they asked the plaintiff to sign and return the attached costs agreement.

192. The hourly rate quoted is inconsistent with the evidence the plaintiff had earlier given about the increase to $280.00 per hour. The defendant's evidence was that it had been a mistake in the letter, made by Mr Chadwick.

193. Ms Ryan was shown a file note dated 3 March 1998. The note records it as a telephone attendance on "Mrs V and Stan". The note is cryptic and deals with seven topics with a single line for each topic. The last item on the note reads "pay to date costs - then carry - change to A rate".

194. The item number three in the note reads "costs - wants to put it out soon".

195. Mrs Ryan gave evidence that she remembered the attendance, and generally what was discussed. She said that the effect of the note was that the plaintiff had said that she would pay the costs up to date but wanted the firm to carry the costs from then on until the end of the matter, which would be at the higher hourly rate.

196. She said that the plaintiff did not pay the outstanding costs immediately. She made a further payment in July 1998 by which time, Mrs Ryan said, more work had been done but not yet billed. She said that on a subsequent date, between March 1998 and February 1998, the plaintiff had changed again and said that she wanted to go back to pay as she went. Mrs Ryan thought this had been by a telephone call. She did not remember the date.

197. Counsel for the plaintiff raised an objection to the course which had been adopted by senior counsel for the defendant in showing the defendant the file note before asking her questions about it, so that she had not firstly exhausted her own recollection of the sequence of events. I said at that point that I would not expect a solicitor with a number of clients and a number of current matters to have a specific recollection of the date of an attendance of a particular client or of what was said, and in those circumstances I could not see the point of requiring the witness to exhaust her recollection before being taken to a file note. I said that it would be clear from the transcript that the witness was taken to a file note first before being asked whether she remembered a particular attendance or conversation. I made the point that the attendances Mrs Ryan was giving evidence about were by that time thirteen years earlier.

198. On 15 February 1999 Mrs Ryan prepared a letter to the plaintiff, enclosing accounts for costs and disbursements which had been calculated at $220.00 per hour. She said that the plaintiff had elected to pay her accounts as the matter proceeded. She said that that option was open to clients who chose to pay their accounts within thirty days. She said that if the plaintiff wished to pay her accounts at the conclusion of the matter, she could do so but at the rate of $280.00 per hour rather than $220.00 per hour. She asked the plaintiff to confirm that she wished to pay at the lower rate, and to pay accounts within thirty days. She made a file note on the copy of the letter that she had discussed the letter with the plaintiff on the same date, and that the plaintiff wanted the firm to bill her at the end of the matter at $280.00 per hour.

199. The evidence is not entirely clear as to when Ms Ryan decided to increase the hourly rates from the original orally quoted rates of $180.00 and $220.00 to the rate in the 1999 costs agreement of $280.00 per hour. Her evidence was that the rate quoted in the letter of 5 November 1997, which she said was drafted by Mr Chadwick, of $220.00 per hour had been a mistake made by Mr Chadwick and should have been $280.00 per hour. Later in her evidence she said that the costs agreement stated to have been enclosed with that letter had had the correct rate of $280.00 per hour. But no copy of that costs agreement was tendered. Ms Ryan said she had not been able to find it. She said that it would not have been put on the correspondence with the copy of the letter, but would have been put in a separate part of the file. Only correspondence was put on the spike, not attachments or enclosures.

200. There is a letter in evidence dated 22 August 1997, from Ryans to the plaintiff over the name and initials of Ms Ryan, noting that the firm had continued to render accounts at the rate of $180.00 per hour, and if the plaintiff wanted the firm to carry the costs until completion, they would need to assess the account at the rate of $220.00 per hour. In that event they asked the plaintiff to attend the office to sign a copy of the cost agreement. It is probably not a matter of great moment, but I am satisfied that in August 1997 the rates were still as originally quoted, that is $180.00 per hour for "pay as you go" and $220.00 per hour for payment at the conclusion of the matter. In all of the circumstances it seems to me more probable than not that the letter of 5 November 1997 accurately set out the then hourly rate at $220.00 per hour, and it also seems to me more probable than not that the draft costs agreement attached to that letter also contained that rate. As I say, it is not a matter of great significance, but it is an illustration of the unreliability of memory, hardly surprising after fourteen years, but also of Ms Ryan's tendency to be very definite, rather than tentative, about such factual matters.

201. There is also in evidence a copy of a letter dated 8 October 1997 to the plaintiff, over Ms Ryan's signature, again stating that a costs agreement is enclosed, and referring to the rate of $220.00 per hour to be carried until completion. Again, no copy of the costs agreement said to have been attached to that letter is in evidence.

202. Even when confronted with copies of the two letters of August and October 1997, Ms Ryan remained adamant that the written agreements contained the rate $280.00 per hour. I cannot accept that evidence. Whilst it is not a piece of evidence which is essential to my accepting the defendant's case, it is something which undermines my confidence in the reliability of Ms Ryan's evidence where it is based on recollection rather than a contemporaneous file note or document.

203. Mrs Ryan said that her attempts to have the plaintiff sign a costs agreement "had been going on for years" by the beginning of 1999. Her letter of 2 March 1999 asked the plaintiff to execute the enclosed costs agreement and return it to the office. The same wording was used in the letter of 5 November 1997, which the plaintiff said did not reflect the usual practice of her firm, which was to ask clients to come into the office to sign a costs agreement. She blamed Mr Chadwick for the failure to follow usual office practice in that regard, in respect of the letter of 5 November 1997.

204. Mrs Ryan said that her practice had been to ask clients to come into the office to have a costs agreement explained to them and to sign it there. Mr Chadwick worked for her a few days a week. She said that Mr Chadwick also worked for the Law Society. He told her that the general practice was simply to send out a costs agreement and to ask the client to sign it and return it. She said that she told him that that was not her practice, but nevertheless she signed the letters he had drafted. She was asked whether she was concerned when she signed the letter that it would not provide the opportunity she had given evidence about, for her to go through the costs agreement with the client before it was signed, and to get the client's answers to the questions she had given evidence about. Her response was that the plaintiff had already been into the office where they had discussed the costs agreement. She had been persuaded in the circumstances that Mr Chadwick's practice was acceptable and she had signed the letter.

205. The 1999 costs agreement had been returned by the plaintiff, witnessed by the accountant Mr Halpin. On its return to the office Ms Ryan had signed it and dated it. Her signature had been witnessed by her daughter Emily.

206. Ms Ryan was asked about any discussion with the plaintiff after the signature of the 1999 costs agreement before the signing of the 2002 costs agreement. Her response was that "there was discussion on the telephone about the fact that our rates had changed and I asked her to come into the office to sign a costs agreement". Ms Ryan did not go into any further detail as to who had taken part in the asserted telephone discussions.

207. On 27 November 2002 Ryans sent a letter to the plaintiff (incorrectly headed Kozlowski - Claim for Compensation) saying that they had revised their cost agreement. They enclosed the new cost agreement, which provided for costs to be carried until the end of the matter. They asked the plaintiff to sign the costs agreement and return it to their office.

208. Ms Ryan explained this as a letter prepared by Mr Chadwick although she conceded that she had signed it.

209. I asked Mrs Ryan for some detail about a letter she had sent to the plaintiff in October 2000. In answer to that question, she replied "Your Honour, it's a very long time ago, 2000". The letter referred to an earlier letter of 15 February 1999 but, to my mind curiously, did not refer to the 1999 costs agreement. In the letter, Ms Ryan confirmed that the plaintiff had decided to pay at the end of the matter. She asked the plaintiff to confirm this. She said that the firm's account for professional costs would be calculated at the rate of $280.00 per hour. The letter asked the plaintiff to confirm this by signing at the foot of the letter, which the plaintiff did. I asked Ms Ryan what had been the occasion for the letter. She did not really give a satisfactory explanation about this. The difference between the letter and the 1999 costs agreement was that the letter set out the single rate of $280.00 per hour whereas the agreement set that rate for "the principal barrister and solicitor" with lower rates for employed solicitors and paralegals.

210. Senior counsel for the plaintiff moved to the 2002 costs agreement. On 27 November 2002 the firm sent the plaintiff a letter, incorrectly headed "Kozlowski", apparently another personal injury plaintiff client. The letter read:

We have revised our Cost Agreement since the Cost Agreement that you entered into previously. We enclose the new Cost Agreement which provides for the costs to be carried until the end of the matter. We would appreciate your executing the Cost Agreement and returning it to our office at your earliest convenience.

We will continue to keep you informed of progress. Thank you for your instructions.

211. Ms Ryan's explanation for the incorrect heading on the letter was that the person in her office who had typed the letter must have previously typed a letter in the Kozlowski matter and used the same format for the letter to the plaintiff. I asked Ms Ryan whether the letter was a standard letter which her firm had written to a number of personal injury plaintiff clients at the same time, putting their fees up. She thought not but seemed uncertain about it. The letter reads as a generic one, and contains nothing personal to the present plaintiff. It seems to me of some significance that the letter did not asked the client to make an appointment to come to the office to sign the new agreement, but rather to sign it and return it.

212. Ms Ryan was asked whether she remembered the circumstances of the signing of the 2002 costs agreement. She said that she did, and she and the plaintiff had been present, and also Ms Naidu and Ms Warren. Initially Ms Ryan saw the plaintiff alone in her office. They were subsequently joined by Ms Warren, and later by Ms Naidu who came in to act as a witness. Ms Ryan said that the plaintiff did not bring the agreement into the office with her. Ms Ryan said that she printed the agreement from her computer while the plaintiff was in the office, and typed in on the first page the date 10 December 2002.

213. I asked Ms Ryan whether Mr Chadwick had still been working with the firm in November 2002. She said that he had not.

214. Ms Ryan agreed that she had signed the letter of 27 November 2002, but when she looked at it again she volunteered that she though Mr Chadwick had still been working with her firm in 2002. I reminded her that she had given evidence about the 1999 costs agreement to the effect that Mr Chadwick had sent it out and requested that the client return it, which accorded with his practice at another firm but was inconsistent with Ms Ryan's practice. I drew her attention again to the fact that her firm was in 2002 providing a costs agreement to a client and asking the client to sign and return it. Ms Ryan then said that Mr Chadwick had been at the firm in November 2002 and she had had a discussion with him about the document. She did not know whether he had prepared it or whether it had been Ms Naidu. She said that she had asked Mr Chadwick to send the agreement out again, when she realised the mistake in the heading of the letter. She said that she had asked him to send the agreement out again. He had said that it was unnecessary. The mistake on the letter was an obvious one and there was no mistake with the agreement. She thought that Mr Chadwick sent the agreement out again with a letter with the correct heading. I asked her whether she had a copy of any such letter. She said that she had checked the computer record but that there had not been a copy of any such letter on the correspondence spike on the file.

215. Ms Ryan said that while the plaintiff was at the office her daughter had a long conversation with her, in Ms Ryan's presence, about what she described as family-type issues.

216. Ms Ryan said that she went through the cost agreement with the plaintiff. She had a prepared list of questions which she asked her, in the presence of Ms Naidu and Ms Warren. She explained each of the clauses to the plaintiff, who read it and said that she had already read it before she came in. Ms Ryan had the questions typed on a sheet but she said that she knew them by heart anyway. Her evidence was that she remembered the questions she had asked the plaintiff, because she had done it with every cost agreement and still did. She had been doing it since about 1994, and had never to her memory entered a cost agreement with a client without asking the questions.

217. Senior counsel asked her what the questions had been. Her reply was "Have you read the agreement? Do you sign it freely and voluntarily? Do you understand that our rates are whatever it is, $280.00 or $300.00, and that there are other solicitors who charge more than that and there are solicitors that charge less than that?" She said that she discussed the scale with the plaintiff and explained to her that even if she won the case she would not get all her costs back. She said that she had at earlier times told clients that they would get one third or two thirds but thought that the plaintiff might get 50% or she could be lucky to get anything because costs were so difficult and controversial. She said that the plaintiff had replied that she knew all of that.

218. Over a short adjournment Ms Ryan checked her firm's computer records, and produced a printout of a letter identical to the letter of 27 November 2002 in every way, but headed Vizovitis rather than Kozlowski. The letter bore the same date, 27 November 2002, and the same file reference 98/043 ER:CG. It is clear from other evidence that the file number is not the file number for either of the plaintiff's personal injury action files, and I infer that it was the file number for the Kozlowski file. I infer that the balance of the reference consists of Ms Ryan's initials and the initials of Ms Naidu, then Claire Grogan. By the time the issue about this letter came to light Mr Grogan had long since completed her evidence.

219. I admitted the newly found letter into evidence. It seems to me more likely than not that what happened was that the mistake in the heading of the letter was discovered on the same day and before the letter was sent out, and was corrected. I suspect that Ms Ryan's evidence about Mr Chadwick's involvement was a piece of reconstruction and was not based on a genuine recollection of events. I am not satisfied that Mr Chadwick was still working at the firm in November 2002 or that he had any involvement with the 2002 costs agreement or correspondence about it. The letter is inconsistent with Ms Ryan's evidence about a general firm practice of having clients come into the office to sign costs agreements, and consistent with a practice of sending cost agreements to clients and asking them to sign and return them.

220. Ms Ryan was asked in chief about preparation for the hearing of the plaintiff's personal injury actions, including conferences with Mr Maxwell of counsel. Her evidence was that the plaintiff was adequately prepared by counsel to give her evidence. She denied ever telling the plaintiff that Mr Maxwell would be charging $8,000.00 a day. She said that she had told the plaintiff that his daily rate for appearing in court was $2,500.00.

221. Ms Ryan's evidence was that the plaintiff gave a poor impression in cross-examination on the second day of the hearing, initially denying some propositions put to her which were supported by contemporaneous medical documentation, and coping poorly with questions about the financial position of the family business. At the end of the day in court Ms Ryan said that the plaintiff was devastated and crying. She and Mr Maxwell went into a witness room in the court building where they spoke to the plaintiff. Ms Ryan said that the plaintiff had said "You have to get me out of this case. I feel like a criminal and a liar and I can't go on". Ms Ryan said that she and Mr Maxwell told the plaintiff that by then the hearing had been adjourned to a date to be fixed and that it was likely to go on for perhaps another four days. They reminded her that she was under cross-examination and that they could not talk to her about the case, although they could take instructions from her about settlement. At that time there were no current offers still open by either side. The defendants had made a Calderbank offer of $100,000.00 plus costs which had expired a year earlier. The plaintiff had made some offers, the lowest being in the vicinity of $400,000.00, but these had been rejected well before trial.

222. Ms Ryan said that the plaintiff instructed them to commence negotiations and to get the best offer they could. She mentioned the previous offer of $100,000.00 plus costs. Mr Maxwell told her that he doubted whether that offer would be available after evidence on that day. Ms Ryan said that the plaintiff went on to say "Just get as much as you can. I've got to get out of it. I can't go on. I can't go on until Christmas under cross-examination. I can't face this court. I never want to come back here again. I don't want to have anything to do with this matter. I feel like a criminal and a liar. I don't want the Greek community to know about it and I don't want John Antoniou [the interpreter] to tell anyone because he knows everyone we know".

223. Ms Ryan said that at that point Mr Maxwell left to speak to Mr McDonogh of counsel for the defendants. After some time he returned with an offer of $75,000.00 plus costs. He advised acceptance. The plaintiff instructed him to accept the offer.

224. Ms Ryan required those instructions in writing. She took a copy of a letter from her file and made changes to it in handwriting. By that time the court registry had closed and there was no access to a photocopier. She read the changes to the plaintiff twice, the first time in Mr Maxwell's presence and the second time with the plaintiff alone, at Mr Maxwell's direction.

225. The copy letter she used was the letter she had sent the plaintiff for instructions on the calderbank offer of $100,000.00 a year earlier. She changed the date and the amount.

226. She said that at the time the settlement was negotiated between counsel there had been no discussion about splitting the settlement amount between the two actions. A little later Mr McDonogh came back and said that for reasons which he explained, the insurer required separate judgments in the two actions. An arrangement was made between counsel to apportion $25,000.00 to the earlier accident and $50,000.00 to the later one. Ms Ryan discussed this with the plaintiff and noted it in handwriting on the letter. It appears that this happened after the plaintiff had signed her agreement to the contents of the letter but it made no practical difference so far as the plaintiff was concerned.

227. Senior counsel asked Ms Ryan whether there had been any discussion with the plaintiff about a worst-case scenario as to how much she would receive. Ms Ryan said that she and Mr Maxwell had both said that the plaintiff would receive nothing out of the settlement because the legal costs and other expenses would take up the whole amount. She said that she told her that they would not charge any more than they received by way of settlement, and subsequently by way of party-and-party costs. They told the plaintiff that she would walk away with nothing but at least she would not owe Ms Ryan's firm or Mr Maxwell anything.

228. Ms Ryan was asked how she rated the plaintiff as a client. She described the plaintiff as a high-maintenance client who changed her mind a lot and took a long time to make up her mind. Difficulty also arose from the fact that there were long periods when she was overseas each year.

229. After the luncheon adjournment on Wednesday 16 November 2011 Mr Toomey said that he had been reminded by his instructing solicitor (who to my recollection at that time was Ms Warren) that when his examination was interrupted for the morning adjournment earlier that day he had been taking Ms Ryan through the questions she said she invariably asked when a costs agreement was signed. He asked her whether there were any others that she had not mentioned at that time. Her response was that she had not finished. She had been intending to go on to say that she had explained to the plaintiff that by signing a costs agreement she forfeited her right to taxation. She had explained the concept of taxation of costs, and that this had nothing to do with government tax. Ms Ryan said that she asked the plaintiff whether she would like to get independent legal advice from a different lawyer in a different firm. The plaintiff had said no. She said that there had been another law firm in her building and she had on another occasion sent a client to that firm for such independent advice. Ms Ryan had not needed to mention that to the plaintiff, who made a comment about trusting her.

230. I have been back to check the transcript as to questions and answers immediately before the morning adjournment on that day. It may well be that Ms Ryan had not completed her answer about the questions and answers at the time of the adjournment.

231. The defendant was extensively cross-examined by counsel for the plaintiff. On many occasions she avoided answering the question put to her, or entered into argument with counsel. Many of her answers were non-responsive. She frequently attempted to supplement answers with either additional factual material not responsive to the question, or adding what appeared to be submissions to her answers. She answered many questions about what she had done at different times in the past in the first person plural (we, us), making it difficult to understand whether she was speaking of facts within her own knowledge and of things she had done herself, or whether she was encompassing things done by her employees, or information she had obtained as hearsay from her staff.

232. She was asked in cross-examination whether there had been any other agreement on costs, after the oral agreement in 1995 when she was first instructed, until the signature of the 1999 costs agreement. She said that there had been another agreement. In about 1997 she had increased her hourly rate to $280.00 which she described as the rate to carry. I asked her whether this had been an oral or a written variation of the original oral agreement. After some prevarication the defendant said that it had been an oral variation, the terms of which had been referred to in correspondence. The variation was that the hourly "carry" rate was increased from $220.00 to $280.00. I asked the defendant how and where the agreement to vary the original agreement was made - whether it was face to face or by telephone. She replied that it was "in the conversations". I asked her whether the conversation was face to face or by telephone. Her answer was that some conversations were face to face and some were on the telephone. After some further questioning, the defendant changed her evidence about this variation, saying that there had been no agreement reached at the time. Counsel for the plaintiff put to the defendant that she might have decided in 1997 to increase her hourly rate but that the plaintiff did not agree to it prior to signing the 1999 agreement. Eventually the defendant seemed to concede that no agreement had been reached. She said that in 1997 there had been an offer made but that the plaintiff had not accepted it.

233. The defendant then said that a point had been reached before the plaintiff signed the 1999 written agreement, where she had agreed to accept the increased rate of $280.00 per hour. The defendant was unable to be specific about when this had happened. The defendant said that she had recorded the conversations at the time, and sworn to them in an affidavit. Counsel for the plaintiff put to Ms Ryan that prior to the signing of the 1999 costs agreement, she had given the plaintiff no advice to the effect that she had increased her hourly rate from a range of $180.00 to $220.00 an hour to a figure of $280.00 an hour. Ms Ryan replied that she had never had any arrangement with the plaintiff to pay $220.00 or $280.00 or any other amount. I asked her to confirm her earlier evidence that in 1995 she had given the plaintiff the option of paying as she went at $180.00 per hour or paying at the end of the matter at $220.00 per hour. Ms Ryan's answer was "Yes, but she declined". I put to her that she had previously said that the plaintiff had agreed to the first option, paying as she went at $180.00 per hour. I asked her whether she had at any time pointed out to the plaintiff that the rate for paying at the end had gone up from $220.00 to $280.00. Ms Ryan did not really provide a satisfactory answer to the question.

234. Ms Ryan conceded in cross-examination that she had not said anything to the plaintiff prior to the signing of the first costs agreement to the effect that there were other solicitors in Canberra experienced in personal injury litigation who would have taken her instructions on a no-win no-fee basis. She said that she had not discussed other solicitors, in circumstances where the plaintiff had come to her specifically to ask her to do the work.

235. It was put to Ms Ryan that the first costs agreement purported to be retrospective to the original instructions in March 1995. She agreed with this, and said that it was customary for her firm to draw costs agreements in that way.

236. She was asked whether she had advised the plaintiff that making the agreement retrospective might be unenforceable because she was already legally obliged to act in the litigation at the previously agreed rate. Her response was that she did not know what counsel was talking about. Counsel put the question again. Ms Ryan said that she did not agree that she had been under any such obligation.

237. She agreed that she had not given the plaintiff advice before the signing of the 1999 costs agreement that the effect of the agreement was that the plaintiff lost her right to require taxation of costs. She said that she did not know whether Mr Chadwick might have given advice to that effect (no file note or other evidence corroborating any such advice by Mr Chadwick or any other solicitor was tendered. By the time of trial Mr Chadwick was medically unfit to give evidence and I draw no adverse inference from the fact that he was not called).

238. In the same way, Ms Ryan accepted that she had not given the plaintiff any advice to the effect that she might wish to get independent legal advice before signing the first costs agreement. Again, she said that Mr Chadwick might have given such advice.

239. Ms Ryan appeared to agree that the costs agreements gave her no specific authority to charge for telephone calls, facsimiles and photocopying as disbursements. Her evidence was that it was her practice at that time to charge for those items as disbursements (apparently at the applicable Supreme Court scale at the time). Her understanding was that it was the practice of other firms also.

240. Ms Ryan was cross-examined about the letter of 27 November 2002 sending the second costs agreement to the plaintiff and asking her to sign and return it. It was put to her that the letter did not convey any suggestion that there would be advice given to her about the effect of the agreement. Ms Ryan's response was that she had spoken to the plaintiff on the telephone before she sent the letter out. (She had not mentioned any such telephone conversation in chief). It was put to her that the 2002 letter was in the same form as the 1999 letter which had been drafted by Mr Chadwick. She had given evidence that this had not been her normal practice or the normal practice of the firm, but that apparently she was still using the same form of letter in November 2002. Her response was that she was doing so only in the plaintiff's matter, not for other clients. The firm had used the same letter because they had done so in 1999.

241. It was put to Ms Ryan that notwithstanding the wording of the letter, the plaintiff had come in and seen her about the second costs agreement. Ms Ryan said that the plaintiff had come in about her matter generally, and that in the course of discussion she had also discussed the costs agreement, but it had not been the sole purpose of the attendance. The plaintiff had not brought the agreement she had been sent with her. Ms Ryan printed another copy, inserting the date, 10 December 2002.

242. Ms Ryan was cross-examined about an affidavit she had sworn on 25 November 2008, at a time when it was apparently the expectation of the parties that evidence in chief at trial would be given on affidavit. The affidavit is not in evidence, but to explain this part of the cross-examination I set out the portion of the affidavit which dealt with the second costs agreement:

26. My firm's costs were increased after we had acted on the matter for seven years and assisted the plaintiff through her payment difficulties. On 27 November 2002 I forwarded a letter to the plaintiff enclosing the revised costs agreement. . .

27. The plaintiff attended my office on 10 December 2002. Emily Ryan and Claire Grogan were present with the plaintiff and I in the room while I asked the plaintiff the following questions and the plaintiff provided her answers. It was our usual practice to ask the client these questions before the client was asked to execute a costs agreement after explaining the costs agreement. I read out the following questions. I heard the plaintiff provide those answers to the following questions:

(i) Do you understand what you are doing in signing a costs agreement?

Answer: Yes.

(ii) Have you read the document?

Answer: Yes.

(iii) Do you require independent legal advice?

Answer: No.

(iv) Are you signing freely and voluntarily?

Answer: Yes.

(v) Do you understand that the rate is $380.00 per hour plus GST for the principal and $280.00 per hour plus GST for the employed barrister and solicitor and $104.00 plus GST for the legal assistant?

Answer: Yes.

(vi) Do you understand that there may be firms that charge less and there are firms that charge more per hour?

Answer: Yes.

28. The plaintiff executed a costs agreement in our office on 10 December 2002. This costs agreement is referred to in my affidavit as the second costs agreement.

29. The plaintiff executed the second costs agreement after she had answered each of the questions set out in paragraph 27 of this affidavit in the presence of myself and the witness, Claire Grogan. Emily Ryan was also present during all of the discussion and execution of the second costs agreement. . .

30. Emily Ryan and the plaintiff had a conversation in my office while I was preparing documents on my computer. The plaintiff said in these words or in words to this effect "Well they can pay for my costs anyway". I intervened and said to the plaintiff in these words or in words to this effect "You may get a cost order but you cannot guarantee to get your costs back. You may get some but never all. They are no guarantees in the law at all".

31 . . . the plaintiff said to me in my office on 10 December 2002 in these words or in words to this effect "I know Eunice that costs are going up. I also know that you are not the most expensive lawyer in town".

243. Ms Ryan was asked in cross-examination whether she had a file note of the conference with the plaintiff on 10 December 2002. She said that she thought she had, but no file note was ever tendered.

244. She said that her usual practice was to ask a series of questions. She had had them on a sheet of paper, and read them out.

245. Ms Ryan said that she had left out of her affidavit one question she had asked. The question had been about the client forfeiting her right to taxation. That question had been on the standard sheet, and the plaintiff had forgotten it or left it out when she was preparing her affidavit.

246. No copy of the sheet containing the questions was tendered.

247. I asked Ms Ryan whether it occurred to her, in December 2002, that she might be legally obliged to continue to act for the plaintiff at the rates they had agreed to in 1999. Her reply was that she considered that she had the right to change the rate. The case had gone on for longer than she had expected. She had accepted the instruction on the basis that it would be a short case, with liability admitted, and likely to settle. In the circumstances she did not think it unreasonable to put her hourly rate up.

248. She accepted that she had not asked the plaintiff to explain to her what she thought the effect of the costs agreement would be.

249. Counsel for the plaintiff asked her whether she had asked the plaintiff at the time of signature of the agreement whether she understood the word "disbursements". Ms Ryan replied that they "had discussed disbursements ad nauseam". She said that the plaintiff had brought in bundles of accounts for disbursements every time she brought Aspirin from the chemist. I put to Ms Ryan that the cost of Aspirin from the chemist would not have been a disbursement. Ms Ryan replied that the plaintiff had brought in all of her accounts from pharmacies. I put to her that the cost of painkillers would be part of her claim for treatment expenses. Ms Ryan said that it was a medical disbursement for the purposes of a compensation claim. It appeared to me from that passage of Ms Ryan's evidence that she did not have a clear understanding of the difference between a treatment expense and a disbursement as that word is used by solicitors. I can have no confidence that Ms Ryan explained to the plaintiff what was meant by the word "disbursement" in circumstances where I am in considerable doubt whether Ms Ryan understood it herself.

250. Ms Ryan was cross-examined about the words "irrevocably authorises" in the costs agreement. She said that she had explained what it meant. She explained that it authorised her firm to deduct money from the settlement. I asked her whether she had explained the effect of the word "irrevocably". She responded that she had explained what the clause meant. I asked her what she had told the plaintiff it meant. She said "It meant that you authorise the barrister and solicitor to deduct moneys from the trust account and that you couldn't change the authorisation". Until I asked Ms Ryan about that during the course of the cross-examination, she had not given evidence that she had explained the phrase "irrevocably authorises" to the plaintiff. Even when I asked her about it, she did not immediately say in so many words that she had told the plaintiff that the effect of the word "irrevocably" was that the plaintiff would not subsequently be able to withdraw the authorisation.

251. Ms Ryan was cross-examined about whether she had said anything to the plaintiff, at the time of signature of the 2002 costs agreement, that it was to be retrospective - that is, that the hourly rate of $380.00 for her own work was to apply for all work done since the original instruction in March 1995. She answered that she had said that the agreement "applied for the dates and the date was in the agreement that it applied for, since 6 March. It was the date that the matter commenced". Counsel again put to Ms Ryan that she had said nothing to the plaintiff about the agreement being retrospective. Ms Ryan said that she had said to the plaintiff that the agreement "applied for the work we had done on her matter".

252. Ms Ryan said that her firm never billed the plaintiff under the 1999 agreement. As she saw it, the 2002 agreement replaced the 1999 agreement, and applied for both matters for the whole period of her firm's instructions. I asked Ms Ryan how she explained to the plaintiff that following signature of the 2002 agreement, the 1999 agreement would be taken never to have had any effect. She said that she told the plaintiff that the 2002 agreement replaced the 1999 agreement, that it was a new agreement and complete replacement for the previous agreement.

253. Ms Ryan was cross-examined about a letter she sent to the Health Insurance Commission on 10 May 2004. The purpose of the letter was to seek to persuade the Commission to reduce its claim for reimbursement of treatment expenses it had paid, out of the plaintiff's damages. The letter included the following:

We advise that the parties entered into a settlement in November 2003 after two days of the hearing. The defendants maintained that not all of the plaintiff's injuries related to the two accidents and they refused to pay for that component of her claim. Our client was under the impression that she could obtain reimbursement for all of her injuries when she completed previous schedules and claims. She had some difficult in understanding the legal concepts. A translator assisted her at the hearing. Our client did not receive payment for the pre-existing conditions from which she suffered before the accident. We have had discussions and correspondence with our client as to which items in the claims history relate to the amount of compensation she received and we now submit particulars of the actual claims history for which she was paid. Consequently, it is necessary to amend the notice of past benefits and schedule of benefits attached to your letter dated 14 February 2004. Our client has examined each of the entries upon that schedule of benefits and marked the entries that relate to the injuries that she received in the two accidents.

254. Counsel for the plaintiff put to Ms Ryan that what she had said in the letter was correct. Her answer was "I now know it wasn't true". She was asked whether she had understood it to be true when she wrote it. Her reply was "I understood that a decision had been taken by counsel and at Mrs Vizovitis's request and that I was aware of it, that a translator was used, and that having been used, I stated that fact to the Health Insurance Commission, which is the fact. He was used".

255. Counsel put to her that she had also stated to the Commission that the plaintiff had had some difficulty in understanding legal concepts. Her response was "That's what. . .that was the basis that she was able to use the translator that she said that. I don't believe that that was in fact true but that's what she said". She was asked whether she believed it to be true when she wrote the letter. She responded "I understood she wanted a translator to give herself time. Which is what she said, to give herself time to answer the questions without being pressured. That's why she wanted a translator".

256. In re-examination, Ms Ryan was asked whether, when the personal injury actions were settled at Court on 6 November 2003, any reference had been made by her or by the plaintiff to either the 1999 or the 2002 costs agreement. She replied in the negative. She was asked whether any suggestion had been made to the plaintiff that she would be charged according to either of those costs agreements, and again replied in the negative. She was asked whether the plaintiff had been charged according to either of those costs agreements, and again answered in the negative. Ms Ryan said that it was obvious at the time that there would not be enough money to pay the plaintiff's legal costs and disbursements and leave anything over for her. At that time Ms Ryan believed that if costs were calculated by reference to the 2002 costs agreement, the plaintiff would have owed her firm more than the net balance of the judgment. Ms Ryan then said in clear terms that in arriving at the figure which was actually charged to the plaintiff for professional costs, neither of the signed costs agreements had been utilised. Her evidence did not go into further detail as to how the professional costs her firm had charged to the plaintiff had been calculated - whether by reference to the scale or to an hourly rate.

257. The completion of Ms Ryan's evidence on 4 April 2012 coincided with the end of Mr Toomey's participation in the hearing. On 24 September 2012 Mr MJ Neil QC announced his appearance for the defendant, with Ms Warren as his junior. Mr Neil appeared on the hearing of a an interlocutory application seeking a number of orders including security for costs, summary dismissal of the action, and my disqualification for apprehended bias. On 19 October 2012 I dismissed that application with costs, for reasons which I published. On 31 October 2012 Mr Neil appeared again when I listed the matter for directions. I raised with him on that occasion my concern about Ms Warren appearing as junior counsel. Prior to Mr Neil coming into the matter, Ms Warren had given substantial factual evidence. She was a key witness for the defendant, contradicting the plaintiff's evidence in significant respects, in particular as to what had happened and what had been said on the day the plaintiff signed the 2002 costs agreement. I drew Mr Neil's attention to the prohibition contained in the Barristers Rules under the Legal Profession Act 2006, against a barrister accepting a brief in a matter in which the barrister was, or was likely to be, a witness.

258. To my surprise, when the matter was next listed on 29 November 2012, on an application for directions about a meeting between expert witnesses, Ms Warren announced her appearance for the defendant. I refused to hear her. I was not satisfied that she could bring to the matter the independence of mind that the court was entitled to expect of counsel appearing for a party.

260. The hearing resumed on 17 December 2012. Mr B O'Donnell of the Sydney Bar announced an appearance for the defendant. He read without objection two affidavits by Mr Maxwell, the barrister who had appeared for the plaintiff in 2003 on the hearing of the personal injury actions. In an affidavit sworn in October 2008, Mr Maxwell said that on 6 November 2003 he had observed the plaintiff to be upset after giving evidence. He formed the opinion that her credit had been seriously damaged in cross-examination. She had said to Ms Ryan and to him words to the effect "I can't go on with this case. I can't come back. I feel like a liar and a criminal. You have to get me out of this case. I want to settle it and finish it. I never want to think about it again".

261. Mr Maxwell said that he then approached counsel for the defendants to negotiate a settlement, and succeeded in doing so at a figure of $75,000.00 plus costs for both actions. He said to the plaintiff words to the effect "The settlement is quite generous to you given the attack on your credit". In his dealings with the plaintiff he understood her when she spoke in English, and she appeared to understand him. A translator was used during the hearing. The plaintiff wanted an interpreter to give her time to think of her answers.

262. Mr Maxwell denied advising the plaintiff at any time that his fees were calculated at the rate of $380.00 per hour, and denied providing any estimate of fees. He said that he had conferences with the plaintiff and Ms Ryan before the hearing. He discussed her evidence and what was likely to happen during the hearing. Mr Maxwell said that he had been present when Ms Ryan explained to the plaintiff that various amounts would be deducted from the settlement sum, including a deduction for solicitor-client costs. He said that he did not place any pressure on the plaintiff in relation to the offer.

263. In his second affidavit, sworn in December 2012, he said that he had believed at the time that the plaintiff had given false evidence. He said that he recalled saying to the plaintiff words to the effect "It is likely that you will not receive any money from this settlement, in fact you will likely owe money, however Eunice and I have spoken and if you want to get out of this case we have agreed to limit our fees so that you will not owe us any money". He said that in the course of the discussions he said to the plaintiff words to the effect "There is a difference between solicitor-client costs and what the insurance company pays on the successful conclusion on the case. What you recover in costs is normally about 60% of solicitor-client costs".

264. Mr Maxwell said that he recalled having at least four or five conferences with the plaintiff before the hearing. He had lengthy discussions with her about the medical reports, in particular which reports should be used at the hearing. The plaintiff never had an interpreter at any of the conferences. He denied that he had ever said anything to the plaintiff about charging $8,000.00 per day. He regarded any discussion about fees as a matter between himself and the instructing solicitor, not involving the lay client. $8,000.00 was not then his daily rate, nor had it been at any time since.

265. In cross-examination, Mr Maxwell agreed that the motor vehicle personal injury actions had been relatively routine cases, each arising from relatively minor rear end collisions, with liability admitted before trial.

266. He said that his only knowledge of the plaintiff's ability to read English arose from the fact that he had seen her apparently reading documents, and assumed that she could do so. He had no knowledge, or at least no recollection, about any ability she might have had to write in English.

267. Mr Maxwell recalled, at some point during the discussions, in relation to reducing fees, looking at Ms Ryan and saying words to the effect "I assume you will be doing the same".

268. Michael Phelps, a Canberra solicitor, was called in the defendant's case. He was admitted in 1971 and has practised in Canberra since 1975. His practice is substantially of a commercial and business nature. His evidence was that he used an hourly rate as a guide in calculating what to charge for a particular transaction, but did not charge strictly by hourly rate in terms of the time devoted to the matter. He sometimes charged more and sometimes charged less, depending on the importance or urgency of the matter. He said that as far as he had been able to establish, his hourly rate had been $350.00 in 1999-2000, increasing to $385.00 plus GST by 2003-04. His recollection was that such hourly rates would not have been uncommon in the Canberra legal profession for practitioners of similar experience and skills. He said that the rate had been determined by the marketplace rather than by reference to the Supreme Court scale. It had not been his practice to enter a written costs agreement with clients in those years. The nature of his practice and client base meant that he did not impose any interest charge on accounts not paid within a 14-day or 30-day period.

269. Mr Phelps said that his firm during that period undertook plaintiff personal injury litigation, which was charged out at a lower rate, mainly because the work was undertaken by less experienced solicitors within his firm. Such instructions were accepted at that time on a no-win no-fee basis. Mr Phelps did not himself handle any personal injury litigation.

270. Samuel Coupland gave telephone evidence. Mr Coupland is the managing director of FMRC Legal Pty Ltd, a company which he described as management consultants to the legal profession. He had no personal involvement in the preparation of the annual law firm performance survey reports produced by the company, but he was able to say that the reports, from 2000 to 2004, had been produced using the same software and methodology of collecting data. He explained that his company sent invitations to some 2000 to 3000 firms of solicitors around Australia asking them to participate in the annual survey. Firms wishing to do so would return a registration form with a cheque. Firms thus registered would then be sent an Excel questionnaire for completion and return. Generally the company expected to receive enough responses from larger States to be statistically reliable but this was not necessarily the case with smaller jurisdictions. For example, in 2004 only two practices in the Northern Territory and two practices in Tasmania registered for the survey. Mr Coupland said that generally he would regard eight firms as a minimum for statistical reliability, though the company might base statistics on a minimum of five firms from a particular State or Territory.

271. As well as doing comparisons by State, the company also did comparisons by gross fee level. In the years in question, a small firm would have paid a registration fee of between $600.00 and $1,000.00. Large firms paid considerably more. Mr Coupland agreed that the firms who participated were not selected so as to be representative of the legal profession in Australia generally. In his words, "We will take anyone who can pay the money". The database of firms who were invited each year to participate was made up from firms which had previously enrolled in workshops run by the company. His evidence was that between 5% and 10% of firms who were sent an invitation to participate would register and complete and return their questionnaire.

272. For the 2000 report, thirteen firms from the ACT and Queanbeyan participated. Mr Coupland was unable to say how many were from the ACT and how many were from Queanbeyan. He was unable to say whether any ACT or Queanbeyan firms had been in any particular gross fee category for that year. Mr Coupland agreed that he would not suggest that the figures emerging from the report were in any way representative of what all firms in Canberra were charging at the time.

273. In 2001, only six ACT practices participated in the survey. He agreed that the average hourly rate shown in the report of $305.00 for that year was simply an average of the firms which participated.

274. In 2002, there were eight ACT practices participating. Again, the hourly rate in the report of $318.00 was simply the average of the hourly rates of those firms.

275. Eleven firms participated in 2003, and twelve firms in 2004.

276. Although there is no evidence of precise figures, it is common knowledge, of which I feel comfortable taking judicial notice, that during the period in question there were something in excess of 100 solicitor practices, of varying sizes, in the ACT. Some had a large number of partners and employed solicitors, whilst others were sole practices.

277. Mr Coupland described the participants as firms which were interested in improving their management.

278. Mr Coupland's evidence did not satisfy me that the FMRC reports were of any real value in determining the hourly rates charged by law firms in Canberra practising in the plaintiff personal injury field in the years covered by the reports (2000-2004). Firstly, the firms which participated in the surveys were self-selected rather than randomly selected. Secondly, it seems reasonable to conclude that participating firms, being prepared to pay reasonable amounts of money and devote reasonable amounts of time to the process, were particularly focused on improving their performance. I am far from satisfied that they were likely to have been a representative sample of Canberra solicitor practices. Thirdly, there is other evidence, for example that of Mr Bradley and Mr Phelps, that hourly rates for legal work varied according to the nature of the work. There is no evidence that the data provided by the firms which participated in the surveys was representative of firms practising in the plaintiff motor vehicle personal injury field.

279. Counsel for the defendant called Mr John Gibson as an expert witness. Mr Gibson had lengthy relevant experience. He had worked in the NSW Supreme Court registry as long ago as 1970, and had served as Deputy Prothonotary until 1974, in that period taxing some bills of costs. He was then a solicitor in private practice for many years, including periods as a partner with Michell Sillar and Brown, and with Gadens Ridgeway, as well as his own firm, Gibson Robinson. In his own firm he had worked principally in personal injury work, on behalf of plaintiffs and also insurers. Since 2001 he had practised as a barrister, and since 2003 as a costs assessor, under a system in NSW whereby the quantification of costs was carried out by private assessors rather than court officials.

280. Mr Gibson prepared, at the request of the defendant, a brief report. He expressed the opinion that the 1999 and 2002 costs agreements complied with the provisions of s 190 of the Legal Practitioners Act 1970. He said that in his opinion the agreements complied with the disclosure provisions of the Act, and represented a commercial dealing between a solicitor and client which complied with the Act. The rates charged were not, in his opinion, excessive or evidence of overcharging. The rates were in his view "within the commercial rage albeit towards the top of the range, in respect of personal injury litigation being conducted by a solicitor where payment of fees is to be postponed to the finalisation of the litigation". In his opinion the agreement was reasonable. He agreed that the claim did not involve complex litigation.

281. In his oral evidence, Mr Gibson said that a reasonable range for plaintiff personal injury litigation at the period in question would have been $300.00 to $450.00 for a partner in a Sydney firm like Gadens or Michell Sillar. He said that the bulk of plaintiff personal injury work was done on a no-win no-fee basis, with disbursements paid by the solicitor to be recovered at the conclusion of the matter. He thought that an extra $50.00 per hour might be justifiable to take those aspects of the arrangement into account.

282. Mr Gibson conceded that his experience in relation to legal costs was limited to NSW and that he had no specific expertise in relation to costs in the ACT. His limited experience suggested to him that there was little difference in rates charged by solicitors in the two jurisdictions.

283. Next, Mr Hardman resumed his evidence by telephone in the defendant's case. It will be recalled that Mr Hardman had prepared a detailed statement of costs for the two personal injury actions, based upon the hourly rates set out in the 1999 costs agreement, and a further statement based upon the rates in the 2002 costs agreement. The total of the costs for both actions using the 1999 agreement rates was $88,227.30 for solicitors' costs, not including disbursements. The total figure using the rates in the 2002 agreement came to $114,900.00. Mr Hardman explained that he had arrived at the second figure simply by dividing the total by the 1999 rate and multiplying by the 2002 rate.

284. Mr Hardman had subsequently carried out a further calculation, applying the rates in the 1999 costs agreement to work up to 10 December 2002, and the rates in the 2002 agreement to work after that date. The total came to $95,137.99.

285. Mr Hardman said that he had prepared his statements of costs from the defendant's files. He had excluded some work which would not have been recoverable in his opinion as between solicitor and client, for example the preparation of the costs agreements.

286. Mr Hardman agreed that he had not attempted to express an opinion as to how much might have been allowed on a solicitor-client taxation by the court. This had not been part of his task, and would have been outside the scope of his instructions. He had never done any work in relation to litigation in the ACT, and in particular had never appeared before a Registrar at a taxation. He would defer to the opinion of practitioners with experience in and expertise in those areas.

287. Mr Hardman said that he understood that Mr Travers had been engaged to provide expert opinion evidence as to what would probably happen on a taxation of costs by the Registrar of this court. He was asked whether in those circumstances he would accept Mr Travers' conclusions. His reply was that he was not in a position to do so because he had no experience of taxation in the ACT. It was simply not part of his practice as a costs consultant.

288. Mr Hardman said that in arriving at his totals, he had added 50% to the entire bill as a loading for care, skill and responsibility. He had done this because he had formed the view that an appropriate mark-up for the items of work conventionally regarded as requiring the requisite degree of care skill and responsibility would have been 70%, because of the difficulty of the matters. From his experience, he took the view that adding 50% to the whole bill would be approximately equivalent to adding 70% to the care and skill items.

289. Mr Hardman made it clear that he had accepted the time records provided to him by the defendant. For example, the time records showed 42 hours spent in the preparation of a schedule of treatment expenses in the two actions. Mr Hardman did not regard it as part of his function to form a view as to whether that amount of time was reasonable in the circumstances. In other words, if time spent was recorded, he accepted it as correct and prepared his statement of costs accordingly.

290. There were other items in the bills he prepared where there had been no file note and no entry in the time records, but he had been given information orally by the defendant as to how long a particular task had taken, and he had accepted what he was told as correct. One such item, by way of example, allowed six hours spent on a particular task in relation to reconciling out-of-pocket expenses. Similarly, he had included eight hours for a conference between the solicitor and counsel in Sydney in October 2000, in the absence of any file note or time record, and also in the absence of any memorandum of fees for any such conference from counsel or written advice from counsel. Mr Hardman agreed that he had based the eight hours on what he had been told by Ms Ryan, and he agreed that this had been about eleven years after the event. He had also allowed five hours travel from Canberra to Sydney for that conference by the solicitor, and five hours travel return, again in the absence of any contemporaneous record.

291. These are examples from Mr Hardman's cross-examination. It is, I think, unnecessary for me to go through each of such matters in detail.

292. In reply the plaintiff called Ronald Travers, a Canberra solicitor and costing consultant. Mr Travers and Mr Kim Chapman practised together under the name Legalcost, a partnership between their family trusts. Mr Travers has been practising in that way since 1981. He retains an unrestricted practising certificate as a solicitor but does not practise other than on instructions from solicitors in relation to the preparation of bills of costs, appearing on taxation of costs, and from time to time acting as an arbitrator in disputes about costs.

293. Mr Travers has appeared on a large number of taxations of bills of costs in this court. The majority have related to personal injury actions arising out of motor vehicle collisions. He has appeared for both plaintiffs and defendants. Generally when he has appeared for plaintiffs he has drawn the bill. Generally where he has drawn the bill he has appeared for the successful party in the litigation, that is for the party with a costs order in his or her favour. He has also frequently over the years appeared on the other side, for the unsuccessful party, with instructions to do what he can to reduce the amount allowed by the Registrar on taxation.

294. Mr Travers had not previously met Mr Hardman although he knew of him. The directions I had given about Mr Hardman and Mr Travers meeting in an endeavour to identify areas where they agreed, and to narrow the range of areas where they disagreed, proved unsuccessful. They spoke by telephone but Mr Travers came to the view that there was no likelihood of their arriving at a joint report.

295. Mr Travers was in court and heard Mr Hardman's oral evidence.

296. In the course of Mr Travers' evidence in chief, Mr O'Donnell of counsel for the defendant raised an objection to his evidence being admitted at all, on the ground that he had a conflict of interest or duty arising from Mr Chapman's earlier involvement. It may be recalled that Mr Chapman had accepted instructions from the solicitors for the defendants in the personal injury actions, Phillips Fox, with Ms Ryan's concurrence, to perform what was called a mini-assessment of the party-and-party costs in those two actions. In the course of this process Ms Ryan had attended the Legalcost office and had discussions with Mr Chapman at times when Mr Travers had been in the office and might have been able to overhear their conversation. Ms Ryan had left her file with Mr Travers for the purpose of the mini-assessment, where Mr Travers would have been able to have physical access to it. Ms Ryan gave evidence on the voir dire that in October 2011 she had been to the Legalcost office and had a consultation with Mr Chapman, asking whether he would accept instructions to prepare bills of costs for the purposes of the present action. He had told her that his commitments at that time did not permit him to accept the instruction having regard to the time constraints involved. Evidence on the voir dire was given by Mr Chapman and Mr Travers also.

297. At the conclusion of the evidence on the voir dire I rejected the bias objection. I said that I was not persuaded that taking the defendant's evidence on the voir dire at its highest, there was any principle by virtue of which, on that evidence, the evidence of Mr Travers would be inadmissible. I acknowledged that the evidence on the voir dire could become relevant in closing submissions as to the weight I should give to Mr Travers' evidence, noting that the evidence on the voir dire would become evidence in the trial.

298. Mr Travers' evidence on the voir dire was to the effect that he had been aware that Ms Ryan had wanted Legalcost to prepare some sort of bill. He had personally had no prospect of doing it because of other pressing commitments. He remembered having a discussion with Mr Chapman about whether they could try and fit it in. They had both come to the conclusion that they had too many other people who had been pressing for some time, and his understanding was that Mr Chapman had told Ms Ryan that he could not attend to the task within the timeframe she was looking at.

299. Mr Travers said that he had no knowledge of any discussions between Ms Ryan and Mr Chapman about the substance of the matter. He had not overheard any discussions between them. He had no recollection that Ms Ryan had brought six to eight boxes containing the file in respect of the personal injury litigation to the Legalcost office. Mr Travers had no real recollection of how long ago this had been, but thought it would have been more than a year earlier.

300. Mr Travers then resumed his evidence in the trial.

301. Throughout the evidence of Mr Travers, Mr O'Donnell of counsel for the defendant maintained a blanket objection to any evidence adduced about what might have happened on a taxation of solicitor-client costs between the defendant and the plaintiff. His objection was based on the fact that Mr Hardman had not attempted to give any such evidence, and that the plaintiff accordingly should not be permitted to call such evidence in reply, because it was not strictly in reply to the evidence called in the defendant's case. I noted the objection and said that I would deal with it in due course but would hear the evidence provisionally.

302. Mr Travers said that in his years of experience he had never been involved in a matter where a 70% mark-up had been allowed on a taxation between solicitor and client for care skill and responsibility. In his experience the practice of the court had been to identify what were called "instructions for brief" items, and to add a mark-up to those items, generally of 50%.

303. Mr Travers said that the figures he had arrived at in expressing his opinion about a proper figure for costs as between solicitor and client in the matter was based upon his expectation as to the amount which would be allowed on taxation by a taxing officer of the court, on the assumption that both sides were represented by Legalcost consultants.

304. There was a further interruption to Mr Travers' evidence in chief at the end of the day on 20 December 2012. The defendant made an application under rule 6201 of the Court Procedures Rules 2006 for an order that the jurisdiction of the court in the present action be exercised by a judge. The application was heard on the following morning by Refshauge J, who dismissed it with costs for reasons which his Honour gave orally. The hearing of the action resumed before me on the afternoon of 21 December, the last sitting day of 2012. Mr Travers continued his evidence on 7 and 8 January 2013.

305. He said that he had been provided with a set of the defendant's time records for the personal injury actions, printed in 2003. He had also been provided with a set of what he thought were the same records, printed out in 2011. While he was checking a draft of his report, he realised that there were a number of entries in the 2011 records which had not been included in the 2003 records. Some periods of time spent on particular tasks had been increased, and there were some completely new entries. Some of the altered portions of the records related to years as early as 1995. The effect was that the 2011 records were about two pages longer than the 2003 records.

306. Counsel for the plaintiff drew Mr Travers' attention to a number of items in Mr Hardman's itemised bills, where several hours of time had been based on oral instructions from Ms Ryan, and for which there were no file notes or time billing records. Mr Travers was asked what would be likely to occur on taxation if there was an objection to such items. His answer was that sometimes the item would be likely to be allowed because it would be clear from other material on the file that the work claimed for must have been carried out. He gave the example of a claim for time attending a conference with counsel, where there was no file note or time cost record but there was a memorandum of fees from counsel confirming that the conference had taken place. His opinion that it was far more likely than not that a taxing officer would disallow a claim for time claimed in a bill of costs where it was unsupported by any documentation. However, in preparing his own itemisation he had tended to err on the side of giving a degree of benefit of the doubt to the solicitor, and had generally made some allowance for such items, but generally much less than the amount claimed. He said that that was the approach he would have adopted if he had been asked by the solicitor and the client to act as an arbitrator.

307. He also said that in the absence of a file note or time cost entry, he would give very little weight to a solicitor's statement at a taxation based upon memory of something that had happened some years ago.

308. He said that he had adopted a similar approach to the claim for time spent generally on preparation and attendance at the trial. He looked at time cost records and at documentation on the file. He took into account that the defendant at the time of the trial had no reason to suspect that the costs agreements would be challenged. At that time her expectation would have been that she would be charging the client on a time basis. In those circumstances he would have expected to find a time billing record, certainly of any lengthy period spent working on the file. Accordingly in the absence of a time record, and of any note on the file recording any time spent, he was sceptical about the claim for those items. Where there had been a claim that the solicitor had spent eight hours on the file on one day and eight hours on the file the next day but there was no file note or time entry to support it, he did not disallow the claim entirely but reduced it to six hours each day, which he thought fair and reasonable.

309. Another example was the claim of fifteen hours spent perusing documents produced in response to notices for non-party production. Again there was nothing in the time cost records to support the claim, and no file notes. He thought that a harsh taxing officer might reduce the claimed fifteen hours by nine hours. A more generous taxing officer would be likely to reduce it by three hours. According Mr Travers struck the mean of six hours and reduced the claim accordingly. He was aware of some taxing officers who adopted the approach of disallowing an item in the absence of a file note, but regarded that as unusually harsh, and to that extent unreasonable.

310. On another item, Mr Hardman had allowed 15.5 hours although a file note stated that ten hours had been spent on the task. Mr Hardman had increased it on the oral instructions of Ms Ryan. Mr Travers had allowed the ten hours supported by the file note. He took into account the fact that the oral instruction from Ms Ryan had been given some eight years after the date the work was done.

311. Mr Travers also expressed the view that the solicitor would not recover as between solicitor and client all of the fees paid to Mr Maxwell of counsel. This was based on his assumption that Ms Ryan had not given the plaintiff the necessary advice, that briefing Sydney counsel at the rates charged by Mr Maxwell was an unusual expense, much of which would not be allowed on taxation between party and party, and might therefore have to be borne by the client regardless of the outcome.

312. This principle is regarded as having its origin in re Blythe v Fanshawe ex parte Wells (1882) 10 QBD 207. The unusual expense under consideration in that case had been the engagement of a shorthand writer at a trial. The fees charged by the shorthand writer were disallowed entirely.

313. The evidence of Mr Travers was that the practice of taxing officers in the ACT, where Sydney counsel had been briefed for a plaintiff in a personal injury matter, had been to allow only the fees which would have been allowable in respect of counsel from the Canberra Bar, relying on that authority. Mr Travers expressed the opinion that Mr Maxwell had charged considerably above the figures published annually by the Registrar for chamber work and conferences as well as brief fee on hearing, by a total of at least $3,800.00. The engagement of Sydney counsel for such litigation was an unusual expense, in his opinion, and the plaintiff should have been informed that there were competent counsel available at the Canberra Bar who would have been expected to charge a fee which would be allowable on taxation between party and party.

314. There is an issue as to whether a claim of that kind is raised by the pleadings. Mr Maxwell is not a party to the actions. His fee notes were paid in full ten years ago. The opinion evidence of Mr Travers is that on a solicitor-client taxation, an amount of that kind would be deducted from the costs recoverable by the solicitor from the client. The mechanism for this is unclear to me: perhaps it would be some kind of set-off. I have not been taken to any authority where such a practice has been judicially approved. I find it difficult to see the rationale or justification for it, on a taxation between solicitor and client limited to the solicitor's costs, where counsel has already been paid. It seems to me that such a claim by a client against a solicitor would have to be raised in an action by the client, rather than on taxation of solicitor-client costs. It is not raised in the present action. Hence I am of the view that the plaintiff cannot recover the differential as to which Mr Travers has expressed this opinion.

315. Mr Travers expressed the opinion that Mr Hardman had allowed many letters as special letters under the applicable scale which would be allowable only at the ordinary letter rate. A number of letters have been claimed as ordinary letters which would have been allowed only at the lower rate applicable to formal letters of acknowledgement. A number of letters had been charged as ordinary letters which would in his opinion be allowable only as circular letters.

316. In summary, Mr Travers' opinion was that the total amount charged by Ryans and paid by the plaintiff by way of professional costs was $83,828.46. That figure included amounts shown in the invoices as disbursements but which were in fact not - generally photocopies, faxes and telephone calls, which are properly seen as part of a solicitor's overhead expenses.

317. Mr Travers' view was that this represented an overcharge of $35,814.05. That figure includes $3,805.00 being fees charged by Mr Maxwell of counsel in excess of the Registrar's published guide figures. I have explained that I do not regard that reduction as justifiable. That leaves an overcharge supported by Mr Travers' evidence in chief, in round figures, $32,000.00.

318. At the conclusion of Mr Travers' evidence in chief, counsel for the plaintiff tendered his report. Counsel for the defendant objected to the tender, and to the whole of Mr Travers' oral evidence on the ground that it was not properly evidence in reply. Submissions by counsel for both sides on the objection took up the balance of the day on 21 December, and most of the morning of the next hearing day, 7 January 2013. For reasons which I gave orally on that morning, I rejected the objection and admitted the report, subject to the deletion of some portions which were not pressed.

319. Counsel for the defendant then made application for an adjournment to qualify an expert on legal costing to respond to Mr Travers' report and evidence. I refused the application, and said that it was made far too late in the course of the hearing of the action. I said that it might well be that both parties had seen the major issue in the action as a question of principle, against which the costs of the litigation were so secondary as to be almost irrelevant, but that nevertheless there must be some finality to litigation, and consideration must be given to the workload of the court generally and the interest of parties in other cases to have their actions heard and determined. I said that it had become apparent that the amount at issue between the parties was relatively modest and did not justify the further time and expense which would be involved in an adjournment to qualify a further expert, as yet unidentified, in the defendant's case, whose opinion could not be predicted and might turn out not to be inconsistent with the opinion of Mr Travers.

320. Counsel for the defendant then embarked upon the cross-examination of Mr Travers.

321. Mr Travers agreed that in the case of a particularly difficult or demanding client, costs of some time spent by the solicitor by reason of that characteristic of the client would be recoverable as between solicitor and client but not between party and party. He also agreed that, depending on the agreed hourly rate, a matter costed pursuant to a costs agreement might lead to a much higher figure than a costing of the same work at scale.

322. Mr Travers also acknowledged that he was aware when he prepared his report that the plaintiff ultimately accepted a settlement offer which was vastly less than the amount one would have expected from the particulars of her claim.

323. Mr Travers regarded it as inconsistent with the costs agreements that the defendant had charged for minimum units of five minutes. That is to say, if a task (for example a telephone call, or perusal of an incoming letter) had taken only one or two minutes, the defendant's firm had charged the plaintiff for five minutes, being one-twelfth of the hourly rate. Mr Travers made the point that it would have been a simple matter to add a sentence in the costs agreement providing for minimum units of time, but the agreement had not done so. In theory, the solicitor could have undertaken sixty very short tasks of less than a minute each, and rather than charging for one hour's time, would have charged for five hours. (This is an extreme example of what might have happened. There is no evidence that it did).

324. Having said that, Mr Travers agreed that most solicitors who used time-costing charged minimum time units, in his experience generally six-minute units.

325. Counsel for the defendant put to Mr Travers that the plaintiff's personal injury actions had justified a mark-up for care, skill and responsibility somewhat above the usual 50%. Mr Travers did not accept that. He made the point that to the extent that any unusual elements in those cases required extra work by the solicitor, that extra work would be remunerated under the scale and result in a higher fee for the solicitor.

326. Mr Travers was asked how long he had spent preparing his report for the present action. His answer was about ninety-two hours. His charge for the preparation and report had been more than $30,000.00 including GST.

327. Mr Travers said in re-examination that in his experience most solicitors undertaking plaintiff personal injury instructions accepted them on a no-win no-fee basis, and struck an agreement with counsel to accept a brief on hearing on the same basis.

328. Mr Travers' evidence, and the oral evidence generally, concluded on 8 January 2013. I gave directions fixing a timetable for written submissions by counsel and fixed a date for oral supplementation of the submissions.

329. In the event, for various reasons the timetable was not met. Written submissions were exchanged, and the matter was listed for closing addresses on 24 April 2013.

330. The matter was next listed on 24 April 2013. On that day the defendant was again unrepresented, and appeared to have prepared written submissions without the assistance of counsel.

331. Counsel for the plaintiff, who should not have been required to go first in order to comply with the timetable I had fixed, lodged a 19-page outline of closing submissions on 21 March 2013.

332. On 17 April 2013 the defendant lodged 84 pages of written submissions, with a further 82 pages of what was described as a detailed analysis of the evidence, and another 84 pages described as an analysis of the transcript, with a further (approximately) 300 pages of case law and other material said to be relevant.

333. Counsel for the plaintiff lodged submissions in reply to those of the defendant, running to 9 pages, on 24 April 2013.

334. The final sitting of the court was on 24 April 2013, the day set aside for closing oral submissions. The defendant went first, and addressed for most of the day. Counsel for the plaintiff then addressed, until about 5:30 pm. In the circumstances, considering that the defendant was unrepresented, I allowed her three weeks to put on further written submissions to respond to those of the plaintiff, and permitted the plaintiff to put on further written submissions if so advised, in response to those.

335. On 21 May 2013 the defendant lodged two further documents by way of written submissions. The first was entitled "Final reply by defendant to oral submissions of plaintiff" and ran to 64 pages. The other was headed "Final reply by defendant to submissions by the plaintiff in reply to those of the defendant", and ran to 43 pages.

336. Some of the material lodged by the defendant amounted to an attempt to get into evidence material which was inadmissible and had never been tendered. Some of this material had previously been marked for identification but much of it had not. The material sought to be put before me included affidavits which had been filed in another action in this court in which Stanley Vizovitis was the defendant, and a financial statement of Mr Vizovitis under the Family Law Rules, otherwise unidentified but which I assume had been in evidence in those proceedings. The defendant also cited and included in her closing submissions copies of reasons for judgment and decision by Foster J in this court in an action in which the present plaintiff had been a defendant, and the reasons for judgment in an action in the Magistrates Court in which the present plaintiff's husband had been a party. I endeavoured without much success to explain to the defendant that other decisions in this court, and decisions of other courts, could be relied upon as to legal principle, but not as to findings of fact, and that evidence in other cases was not evidence in the present proceeding unless properly adduced as evidence.

337. Quite apart from those reasons for judgment and for decision, and affidavits, and documents marked for identification, the defendant in her submissions relied upon factual material which was not in evidence before me. This made her lengthy written submissions difficult to follow, although I have done my best to understand her arguments and to put out of my mind the factual matter on which she has based her submissions, which is not in evidence in this proceeding.

338. Counsel for the plaintiff lodged a relatively brief and helpful outline of his closing submissions.

339. The case for the plaintiff was assisted by the fact that she was represented throughout by the same counsel. The case for the defendant was not assisted by the fact that for part of the hearing she represented herself, for other parts she was represented by three different counsel, and by the stage of closing addresses she was again unrepresented. I have done what I can in weighing up the evidence and the submissions to balance the disadvantage caused to the defendant by her lack of representation and changes in representation. I acknowledge that she is a solicitor of many years' experience, but I note at the same time that she has what might be described as a considerable financial stake in the matter, and, it became clear to me as the hearing proceeded, a considerable emotional involvement. It seems to me in retrospect that it would have been in her interests to have been independently represented throughout, and that independent representation would have shortened the hearing considerably.

340. In the course of preparation of these reasons I have again reflected upon whether I should, at different stages of the hearing, have intervened to a greater extent, perhaps by placing time limits on the parties for examination and cross-examination of particular witnesses, and on both written and oral submissions. If I had been informed at the start, or at some intermediate stage, that the hearing was likely to occupy so many days of court time, I might have felt justified in giving directions which might have resulted in more control of the various stages of the hearing. However, at almost every stage I was given estimates by the parties that either the balance of the hearing, or the next stage, would occupy only two or three days. In addition, imposing such time constraints might have caused one or other of the parties to feel, perhaps with some justification, that I was not permitting that party an adequate opportunity to make out their case.

Impressions of the witnesses as to issues of fact

341. As so often in litigation, there are significant issues between the parties as to past events. Some of the factual background is not in contention, but there are considerable differences of recollection as to what happened between the plaintiff and the defendant, as client and solicitor, between the initial instructions in 1995 and the settlement of the personal injury actions in 2003. Probably the most significant events about which there are evidentiary conflicts are the execution of the 2002 costs agreement, and the negotiation of the settlement on the second day of the hearing of the personal injury actions on 6 November 2003.

342. The plaintiff gave her evidence in June 2010, more than seven years after the execution of the 2002 costs agreement, and more than six years after the negotiated settlement. Her sons Stanley and Trevor also gave their evidence in June 2010.

343. Ms Naidu and Ms Warren gave their evidence in November 2011. The defendant commenced her evidence in November 2011, and completed it in April 2012, even longer after the events. Mr Maxwell gave his evidence in December 2012, more than nine years after the events he was asked to recall, I have considerable reservations about the capacity of any witness of fact to recall the details of events of so many years earlier, and in particular of conversations. There is a reasonable expectation that solicitors will keep file notes and other written records of such events and conversations. One would hardly expect lay people to do so.

344. Where there is a file note or other contemporaneous record of conversation or an event, I would tend to give a great deal more credence to such a written record than to human memory. I am the first to concede that my memory of events so long ago is far from reliable. Most of us have had the experience of thinking that we remember an event which occurred some years ago with a fair degree of accuracy, only to be proved wrong by other more credible evidence.

345. I also take account of the fact that some people are a little tentative about their recollection of past events, whereas others by personality style are very definite about them but can equally turn out to be mistaken.

346. The plaintiff and her sons, in their evidence, were generally entirely reliant on memory, without the benefit of contemporaneous notes or documents. I recognise that in a case like this, some witnesses have what might be described as a vested interest in the outcome of the proceedings, which may influence them, consciously or subconsciously, towards a particular version of events.

347. I had no reason to form an adverse view of the credibility of the plaintiff or her sons. There is no reason for me to doubt that the plaintiff or either of her sons was doing their best to give truthful evidence as to their recollections. Having said that, they were trying to remember events of many years earlier. Whilst I might accept their memory in general terms about those events, I would have little faith in their recollection of precisely what was said during conversations. I take account, also, of the natural tendency of family members in a case like this to give evidence, even if not consciously, likely to help their mother's case as they understand it.

348. I did not find the defendant a particular satisfactory witness. I recognise on the one hand that she is a solicitor of many years' experience, and that she has an awareness, far more so than a non-lawyer, of the importance of giving truthful evidence, and of her duty to the court both as a witness and a legal practitioner. Having said that, the defendant came across to me as having a strong emotional investment in the outcome of the action, and, it might be said, a point to prove about her integrity. I have had cause to reflect a number of times during the progress of the hearing of this action on how much it must be costing the parties, in time, money and emotional involvement, to contest the matter with such vehemence. I am reminded that on 18 December 2009, in an application before me prior to the commencement of the trial proper, the defendant said:

I suppose I feel - and the reason I have defended the case, and the reason I have defended it to the extent that I have - at the great personal cost that I have, is because I feel, as a lawyer and as a person, that my professional integrity, my honesty, the way I conduct my business, is all being challenged. And even though that's cost me money, that's a matter that's very dear to my heart and something I will defend to my dying day. And that's why I've defended it. . .and I'm not going to compromise my position in any way, because I believe that I have done the right thing. . .and that's why I fought against the claim.

349. Both in her oral evidence and in the manner in which she has conducted the case when unrepresented, the defendant has displayed a significant emotional involvement. Because she has had these three capacities, as a party, a witness and an advocate for her own cause, she has, I think understandably, found it difficult to separate those three roles. As a witness she tended to engage with the cross-examiner in argument rather than simply answer the questions she was asked. As an advocate she found it difficult not to give further evidence from the bar table, or at least to add a gloss to the evidence for her side in the case.

350. I have no doubt that she genuinely believes that her cause is just, and that these proceedings have been brought against her unreasonably. I have the strong impression that she has permitted this to affect the content and manner of her evidence. The result of all this is that I have found myself having a degree of suspicion about much of her evidence of past events where the evidence has depended entirely on her own recollection and has not been supported by contemporaneous written records.

351. I had similar reservations, though to a lesser extent, about the evidence of Ms Warren. I recognise how difficult it must be for a solicitor called upon to give objective evidence in an action to which her mother is a party. In the present case, her mother is also the principal of the firm where she works, and where she has worked, though not continuously, for more than twenty years.

352. Ms Warren's evidence is of importance, as to events leading up to the signature by the plaintiff of the 1999 costs agreement, the execution of the 2002 costs agreement, and the settlement discussions on 6 November 2003. The greatest significance of her evidence is as to the signing of the 2002 agreement. In that regard, she thought that she had made notes at the time, and recalled having seen them in 2005 but had not seen them since then. The notes have not turned up.

353. She recalled a sheet setting out questions and answers customarily asked by her mother when a costs agreement was signed, but again the sheet has not been found, nor has even a standard sheet of questions been put into evidence.

354. I do not suspect for a moment that Ms Warren has consciously given evidence other than evidence she believes to be true, but I found her emotionally involved in her answers to questions, particularly in cross-examination, and it seemed to me that she went out of her way to help her mother where she could, though again this may well have been subconscious.

355. I do not find myself in a situation where I am confident in accepting her evidence except where it is supported by contemporaneous documentation.

356. I found Ms Naidu and Mr Maxwell honest and reliable witnesses. My reservations about their evidence are based solely on the length of time since the events of which they were giving evidence. Each of them, I think, recognised that this might affect the reliability of their recollection, but I have no doubt that they were both doing their best to give their evidence accurately and honestly.

357. Three Canberra solicitors gave opinion evidence which I found helpful. Mr Hatch was called for the plaintiff, and Mr Bradley and Mr Phelps for the defendant. Mr Hatch was called by reason of his experience as a solicitor acting for plaintiffs in personal injury litigation in this Territory. He conceded that he was not an expert in legal costing. His opinion was that the plaintiff's personal injury actions were not particularly complex. He thought that the invoices from the defendant's firm showed some overservicing and overcharging. His evidence was that there was no general practice in the legal profession in Canberra of charging a higher hourly rate in acting for a plaintiff in a personal injury action where the costs were not to be paid until finalisation of the matter.

358. Mr Bradley is a partner in a medium to large Canberra-firm which was at one time the Canberra office of a large national firm. During the years under consideration in this action, his firm had taken on plaintiff personal injury work on a no-win no-fee basis, which was necessary in the competitive Canberra market, and had not charged a higher hourly rate for such work where the costs would not be recoverable until finalisation of the matter. Mr Bradley thought that it might be justifiable to charge a higher hourly rate for a difficult and demanding client but had never done so at his own firm. By the time of the hearing he had moved out of personal injury work into probate and estate planning.

359. Mr Phelps was a Canberra solicitor with a commercial practice. His firm had undertaken plaintiff personal injury work although he had not been personally engaged in this area of the practice. His firm had taken on such instructions on a no-win no-fee basis. The plaintiff personal injury work at his firm had been looked after by more junior solicitors. He had not charged interest on outstanding accounts. His clients had generally paid their accounts as rendered.

360. Evidence was also given by four lawyers who might be described as experts in legal costing. Sadly Michael Scott died shortly after giving evidence. He was a Canberra solicitor of many years' experience, who had specialised for almost twenty years' in costing, having previously practised in plaintiff personal injury litigation. His opinion was that Mr Maxwell of counsel had charged considerably more than would have been charged by counsel from the Canberra Bar.

361. He expressed the opinion that the 1999 and 2002 costs agreements were neither fair nor reasonable. He based his opinion about fairness on the fact that the agreements themselves were unclear about retrospectivity and did not disclose that the costs proposed to be charged would not be recoverable in full from the other party. His opinion about reasonableness was based on the fact that he thought that the hourly rates were well above the market rate in Canberra at the time.

362. He generally adhered to his evidence in chief when cross-examined. I am inclined to pay a considerable degree of respect to Mr Scott's opinion having regard to his costing experience in this jurisdiction.

363. The evidence given in the defendant's case by Mr Hardman was much narrower. He prepared an itemisation of the defendant's costs from her file and her time records, supplemented by oral information which she provided to him in respect of work not recorded, or inadequately recorded, in the file and the computerised time records. He accepted what he was told, and did not attempt to perform any exercise of moderating the charges to reflect what might have been allowed on taxation in the event of a dispute between solicitor and client. It seemed to me that a number of the time estimates he had been given by the defendant in the course of preparing the itemisation, many years after the event, were likely to have been inflated.

364. Mr Hardman formed the opinion that it was reasonable to mark the items attracting a loading for care, skill and responsibility up by 70% having regard to the complexity of the matters. He added 50% to the total bill, which in his view would reflect a 70% mark-up for care and skill. As I mentioned previously, he arrived at a total of some $88,000.00 using the hourly rates in the 1996 agreement; just on $115,000.00 using the rates in the 2002 agreement; and $95,000.00 using a combination of those rates. He costed the work at scale at $79,500.00.

365. Mr Hardman conceded that he has no direct experience with costing in the Australian Capital Territory, and in particular no experience in the taxation of costs between solicitor and client in Canberra. I accept that he has considerable experience and expertise in relation to legal costs in New South Wales.

366. Mr Gibson gave evidence about hourly rates in Sydney. He conceded that he had no experience about legal costs in the ACT. I did not find his evidence particularly helpful.

367. Ronald Travers was called in the plaintiff's case in reply. Mr Travers has been practising for more than thirty years in Canberra as a costing consultant. I formed the view that his expertise was considerably greater than any of the other expert witnesses who had given evidence about costs. Costing in Canberra has been a full time career for him for many years. He has drawn bills at scale and has appeared on both sides at innumerable taxations, including many taxations between solicitor and client. He did not embark on an exercise of calculating how much the defendant might have been justified in charging under either of the costs agreements. He calculated that her firm had charged professional costs of almost $84,000.00. He formed the view that at scale she would have been entitled to no more than $52,000.00, assuming a reasonably generous taxing officer.

368. The defendant's case is that the professional costs actually charged by her firm were considerably less than she had been entitled to charge under the 2002 costs agreement. She did not make any such specific concession as to the 1999 costs agreement. The only evidence about how much she would have been entitled to charge using the 1999 hourly rates was that of Mr Hardman, who arrived at a figure of just over $88,000.00, some $4,000.00 more than she charged in fact.

369. I was generally extremely impressed by the evidence of Mr Travers and I accept his opinion evidence.

370. It is common ground that the plaintiff instructed the defendant in March 1995 to act on her behalf in a claim for damages for personal injury arising out of the first motor vehicle collision, and that the defendant agreed to accept the instruction on the basis that she would charge $180.00 per hour if the plaintiff paid her accounts on a "pay as you go" basis, or $220.00 per hour if she did not pay the legal costs until completion of the matter. It is also common ground that some time not long after the second motor vehicle accident in April 1996, the plaintiff instructed the defendant to act for her in a claim for damages arising out of that accident also. There is no evidence that there was any change to the retainer arrangement at the time of instructions following the second accident.

371. The evidence in the defendant's case was that her firm had been using costs agreements, with a question-and-answer sheet attached, since 1991. There was no suggestion in the evidence that the defendant had asked the plaintiff to sign a costs agreement at the time of the original instructions in 1995, or the instructions about the second accident in 1996. There was no explanation as to why, if this was the firm's usual practice, it was not followed with this client on either of those occasions.

372. As to the plaintiff's evidence, whilst I did not form the view that she was being untruthful in answer to any questions, I would not place great reliance on evidence based on her recollection, when giving evidence in 2010, of events between seven years and fifteen years earlier. I would prefer to rely on contemporaneous documentation where available. For example, her evidence was that Ms Ryan had not explained the 1999 agreement to her before she signed it, as far as she could recall. I would not be prepared to find, simply on the basis of that evidence, that there was no explanation, if there was other credible contemporaneous evidence that proper advice had been given.

373. Similarly, I would not be satisfied to decide the case purely on the plaintiff's oral evidence of her recollection about what happened at the time she signed the 2002 costs agreement. I am inclined to accept that the plaintiff did not fully understand the questions she was asked and the advice she was given at that time. The plaintiff said a number of times during her evidence that her understanding about the 2002 costs agreement was that the hourly rate of $380.00 applied to the barrister, Mr Maxwell, and that the rate of $280.00, applied to the solicitor, Mrs Ryan.

374. I am inclined to that view by reason of the wording of the agreement. The plaintiff knew that Ms Ryan was a solicitor at that Mr Maxwell was a barrister. The agreement, in five of its six clauses, uses the expression "the barrister and solicitor". It seems to me that this would have been extremely confusing to a client in the position of the plaintiff. In fact the agreement did not purport to say anything about counsel's fees, but by the time she signed the 2002 agreement, Mr Maxwell had been briefed and had carried out some work in the matter. The plaintiff knew that there was a barrister involved. It would hardly be surprising if, when she saw the word "barrister" used in the agreement, she assumed that somehow this related to Mr Maxwell rather than to Mrs Ryan.

375. Ms Ryan's firm sent the 1999 agreement to the plaintiff and asked her to sign it and return it. Ms Ryan gave evidence that she had explained the costs agreement to the plaintiff before she sent it out, but there is no documentary support for this and it is denied by the plaintiff. It seems to me more probable that not that the agreement was sent out to the plaintiff with a request that it be signed, without any advice being given, and that she signed it and returned it. It was witnessed by her accountant, Mr Halpin. The defendant in closing submissions sought to rely on a duty on his part to explain the agreement to the plaintiff when she signed it. I am not satisfied that Mr Halpin was under any such duty. Even if he had been, I cannot see how that would assist the defendant.

376. I find that the plaintiff and the defendant signed the 2002 costs agreement at the defendant's office. I accept that it is more likely than not that the defendant went through a number of questions with the plaintiff. The sheet of questions which, on the evidence in the defendant's case, was invariably used, has not been located or tendered. I am unable to accept either the plaintiff's evidence about what questions were asked, or the defendant's evidence about the questions and answers. In the absence of any contemporaneous documentation, I do not have adequate confidence that the memory of either the plaintiff of the defendant as to what was said can be relied upon.

377. In addition, I have considerable misgivings about the capacity of the plaintiff to understand the questions she was being asked. On the assumption that the questions and answers were as set out by Ms Warren in her affidavit (see [168] above) and Ms Ryan in her affidavit (see [249] above), I would not be particularly optimistic that a person in the position of the plaintiff would have understood that she was doing more than going through a process which the solicitor (her solicitor, in whom she presumably placed trust at that time) was taking her through, as part of the legalities and formalities which needed to be complied with.

378. There was much evidence about preparation for trial in the personal injury actions, the two days of hearing in November 2003, and the negotiations which led to the settlement of the claims. Part of this evidence was directed by the defendant and those representing her at the plaintiff's ability to read, speak and understand English, and in part it was directed at the plaintiff's credibility.

379. The plaintiff gave evidence in the present proceedings without an interpreter. I formed the view that she could speak English adequately for the purpose of giving that evidence. At the same time, she did not come across to me as a fluent speaker of the English language. I have no doubt that her English is adequate for general communications in the community, including for the purposes of the business run by her husband and herself. At the same time, it does not seem to me that her English is necessarily good enough to cope with longer words, technical language, unfamiliar words or abstract concepts. It is unnecessary for me to decide in this action whether or not the plaintiff genuinely needed an interpreter in November 2003. It is probably enough to note that she said she did, and that her solicitor and counsel permitted her to give evidence assisted by an interpreter. I am not satisfied that the issue arising from the use of the interpreter affects the plaintiff's credit in these proceedings adversely.

380. The defendant in these proceedings has repeated, as something of a mantra, that by the end of the second day of the hearing in November 2003 the plaintiff's credit was in tatters. I certainly accept that both Mr Maxwell and the defendant took the view that the plaintiff's credit had been damaged by the cross-examination to that point. The plaintiff was not cross-examined in these proceedings in detail as to answers she had given which the defendant now says were false. The actions in November 2003 were settled before it became necessary for me to arrive at any findings of fact, and indeed some days before the evidence was expected to be completed.

381. Counsel for the defendant tendered an affidavit by Christoula Nicolaou, a translator and interpreter, annexing an expanded transcript of the proceedings on 5 and 6 November 2003 with an English translation of what had been said in Greek between the plaintiff and the interpreter, Mr Antoniou. Counsel for the plaintiff did not object to the fact that the proposed evidence was in affidavit form, but objected on admissibility grounds. I said that I would rule on the tender when giving my reasons for decision, and I now take the opportunity to do so.

382. To the extent that the purpose of the tender is to damage the plaintiff's credit, it seems to me that it is inadmissible by reason of the credibility rule expressed in s 102 of the Evidence Act 2011. However, it seems to me that the translation annexed to the affidavit is capable of being relevant to the issue of the plaintiff's fluency in spoken English. I have accordingly read Ms Nicolaou's affidavit as evidence in these proceedings.

383. Having considered the passages in the expanded transcript to which I was taken during submissions, my opinion about the plaintiff's capacity to read, speak and understand English is not changed.

384. It was submitted on behalf of the defendant that the settlement instruction constituted by the plaintiff's signature on 6 November 2003 to the copy letter of 21 November 2002, altered by hand, should be seen as a further costs agreement under the Legal Practitioners Act. It is to my mind sufficient to dispose of that submission, to say that the document offers no assistance to an independent reader of it who wishes to deduce from it an amount of costs payable by the plaintiff to the defendant, or a formula by which such costs can be calculated. It was undoubtedly a written instruction to settle, but so far as costs are concerned, the most that it can be said to have done is to have placed a ceiling on the total amount of costs and disbursements payable by the plaintiff to her solicitors. In simple terms, the effect of the document was that the solicitors agreed not to charge, by way of costs and disbursements, any more than the nett settlement amount. The document can be read as an agreement by the solicitors not to charge any more than the settlement amount of $75,000.00 less deductions. On that interpretation, the amount recovered by the plaintiff by way of party-and-party costs would be payable to her, and none of that amount would be payable to the solicitors. This is clearly not what Ms Ryan intended when she prepared the settlement instruction document, clearly under some time pressure, and it has not been suggested on behalf of the plaintiff that the document should be interpreted in that way. Nevertheless, there is nothing in the document which would assist an independent person given the task of calculating the costs payable by the client to the solicitor in calculating that amount. The document does not refer to either of the written costs agreements or to the earlier oral costs agreement, or to the Supreme Court scale. It does not appear to be a document which was prepared with a view to providing any benefit to the plaintiff, or to set out any basis for the calculation of her liability for legal costs to her solicitors. I reject the submission that the document should be construed as a costs agreement under the Act.

385. It is of some relevance that Mr Chapman of Legalcost, instructed to perform a non-partisan role between Ryans and Phillips Fox in arriving at figures for party-and-party costs, came to the opinion that the solicitors' costs for both actions were in a range of $33,000.00 to $34,500.00, plus disbursements of $18,000.00 to $18,500.00, making a total of $51,000.00 to $53,000.00. On the basis of the opinion he expressed, party-and-party costs were agreed between the parties at $53,000.00. This is consistent with an acceptance on both sides that on taxation, the plaintiff's solicitors' costs would have come in at about $34,500.00. There is no evidence that Ms Ryan sought instructions from the plaintiff about accepting that figure. On the evidence, I am satisfied that she did not do so. Clearly she should have. It is at least evidence that in her opinion, $34,500.00 was an appropriate figure for solicitors' costs on a party-and-party basis.

386. I am satisfied that prior to execution of the 1999 costs agreement, Ms Ryan's firm had rendered accounts, which had been paid by the plaintiff, of some $3,000.00. These costs had presumably been calculated at the agreed "pay as you go" rate of $180.00 per hour. Those costs are not open to review in the present proceedings.

387. Counsel for the plaintiff placed reliance on the decision of Higgins J in Passey v Bandarage [2002] ACTSC 105. That was an action brought by a client against a solicitor seeking relief under the same legislation. His Honour found that the costs agreements under consideration were unfair and unreasonable. His Honour set them aside and fixed the sums payable by the plaintiffs to the solicitor at figures lower than the solicitor had claimed in his invoices.

388. The costs agreement which his Honour set aside was a lengthy and detailed one, expressed generally in plain English so as to be intelligible to a non-lawyer.

389. His Honour set out the principles to be applied to determining whether a costs agreement was fair and reasonable. I set out an extract from his Honour's reasons:

28. The first point that should be made is that solicitors owe a fiduciary duty to their clients. That duty extends to the making of any retainer agreement and the terms of it.

29. The client is entitled to advice as to the terms of any such retainer agreement. In any case in which the retainer agreement contains any unusual terms, where those terms favour the solicitor's interests, the client should not only be frankly and fully advised so by the solicitor, but should be urged to take competent independent advice (see Law Society of NSW v Foreman [1994] 34 NSWLR 408). That is not a new obligation (see re Blythe & Fanshawe ex parte Wells (1882) 10 QBD 207). It applies to costs as well as disbursements.

30. Mildren J considered this issue in Athanasiou v Ward Keller (6) Pty Ltd [1998] NTSC 27; (1998) 122 NTR 22. The solicitors in that matter had entered into a fee agreement with their client. At p 29 his Honour noted:

At common law, a costs agreement is enforceable if it is made to appear to the court that the agreement is "fair and reasonable", the burden of proof resting on the solicitor seeking to uphold the agreement. . .the court has an inherent power as part of its general disciplinary function in relation to legal practitioners to supervise such agreements. . .

31. His Honour, therefore, concluded that, even if the Northern Territory equivalent of s 190 of the Legal Practitioners Act was complied with, the onus of establishing that the costs agreement was fair and reasonable rested on the solicitor.

32. In relation to the concept of what is fair and reasonable, his Honour, at p 30, noted:

The concept of "fairness" deals with the circumstances under which the agreement was entered. Thus an agreement has been held to be unfair if the solicitor used undue pressure on his client to sign it, or if the solicitor did not explain the agreement to his client. . .the concept of "reasonableness" on the other hand relates to the terms of the agreement itself. So if the fees to be charged under the agreement are said to be excessive the agreement is not reasonable.

33. At p 31, his Honour referred to a passage from Cordery's Law Relating to Solicitors, Frederic T Horne (7th edition 1981, Butterworths, London) p 9:

In his dealings with his client the solicitor must exercise the utmost good faith, and in any financial transaction with a client (save as to costs for work done) there will be a presumption that such transactions should not be upheld unless the solicitor can establish that it was effected by the free exercise of the client's will without any influence on the part of the solicitor.

34. As to the supposed exception, his Honour said:

In principle, I do not see why a costs agreement should be subject to the exception suggested. Obviously, if the costs agreement reflects the appropriate scale, and no unusual benefit is conferred upon the solicitor, the solicitor would have no difficulty in establishing that the agreement was reasonable. But a costs agreement may go a lot further than merely providing for the payment of fees; it potentially could confer considerable benefits on a solicitor in addition to his remuneration. I consider that there is no basis for drawing the distinction suggested. In my opinion the result is that the burden of proof rests upon the solicitor in respect of both fairness and reasonableness.

35. His Honour's comments were, as he acknowledged, obiter. However, I agree with them. They are consistent with the duty the law imposes on solicitors to deal honestly and fairly with their clients.

390. His Honour went on to find on the facts that the costs agreement under consideration contained unusual provisions benefiting the solicitor. His Honour was satisfied that the agreement was demonstrably unfair due to lack of informed consent and unreasonable due to its effect in producing a grossly excessive fee. His Honour declared the agreement not to be binding, and found it convenient to declare the sum properly payable rather than refer that issue to the Registrar for taxation. His Honour did note that a costs agreement which produced a charge above scale would not for that reason alone fail to be fair and reasonable.

391. Agreements as to fees are a common feature of practice in family law. I was taken during submissions to a number of decisions of the Family Court of Australia in which costs agreements had been challenged. The Family Law Rules require a solicitor to provide a client with a copy of a pamphlet published by the Court about costs, and to advise the client of the availability of independent legal advice (O 38 r 8 (4)) but otherwise the common law applies to the obligations of a solicitor in reaching a written agreement about costs with a client. A useful judgment which sets out the applicable law in family law proceedings is Weiss v Barker Gosling (1993) 16 FamLR 728 per Fogarty J. In his reasons, Fogarty J quoted from a decision of Baker J in re Budziszewski (1981) FLC 91-038, in which Baker J had set out, amongst the requirements his Honour considered necessary as preconditions for an enforceable costs agreement, the following:

(a) that the solicitor must explain to his client the full nature and effect of the costs agreement in clear and unequivocal terms and the client must fully understand the same.

(b) that the solicitor must inform his client that it is against the client's interest to sign an agreement entitling the solicitor to charge more costs than he may otherwise have been able to do and a solicitor may inform his client that he should obtain independent legal advice before executing the document.

(c) that the client's consent to any agreement for costs must be a real consent obtained without any undue influence or pressure being applied to the client.

392. Fogarty J noted that these conditions had been accepted in other courts, for example in Hall v Barrett (1982) FLC 91-216 per Hunt J of the Supreme Court of NSW.

393. In Schiliro v Gadens Ridgeway (1995) 19 FamLR 196, a full bench of the Family Court of Australia (Barblett DCJ, Fogarty and Faulks JJ) accepted as settled law for the Family Court an analysis of the principles to be applied in cases involving a challenge to a costs agreement by Graham J in the decision under appeal where his Honour had said (omitting references):

A court has the jurisdiction to determine issues of costs between solicitor and client. A solicitor bears the burden of establishing that a contract was entered into freely in an informed and independent way. The essential nature of the agreement must be explained, understood and accepted. The solicitor has to rebut the presumption of undue influence.

The question then arises as to whether or not the agreement is fair and reasonable, and this raises two separate issues. In the first place, the requirement as to fairness must be considered. This is satisfied if the client understands and appreciates the agreement and acts either on advice received or the dictates of his own judgment. The issue is similar to the issue of rebuttal of presumption of undue influence. There is an overlap of evidence. I accept that the solicitor not only has the onus of rebutting the presumption but also the burden of proof in establishing the agreement was fair and reasonable. It is not necessary to demonstrate that the client has actually received independent legal advice. The relevant point for determination of unfairness is at the point of entry into the agreement.

394. I respectfully adopt that analysis as applicable in the circumstances of the present proceeding.

395. I have found on the facts that the defendant's firm sent the 1999 costs agreement to the plaintiff with a covering letter asking her to sign it and return it, which she did. I am not satisfied that she was provided with an explanation about the effect of the agreement. Higgins J said in Passey, quoting with approval the words of Mildren J in Athanasiou, that an agreement might be held to be unfair if the solicitor had not explained its terms to the client. In Athanasiou, the client had not been told of the difference between solicitor-and-client costs and party-and-party costs, or informed that he would lose the right to have his bill taxed at scale if he signed the agreement, and it had not been suggested that he should obtain independent advice before signing the agreement. Mildren J regarded that as fatal to the agreement. Higgins J took the view in Passey that the client should have been urged by the solicitor to obtain independent advice, as well as having the terms of the agreement adequately explained.

396. In the circumstances I am satisfied that the 1999 fees agreement was unfair.

397. The solicitor had accepted the instructions of the client on the basis of an hourly rate of $180.00 for "pay as you go" or $220.00 per hour for payment at completion. I am not satisfied that the plaintiff was provided with any adequate advice as to the basis for the increase in the hourly rate in 1999. That is not to say that the hourly rate was necessarily unreasonable by that time.

398. What I think was unreasonable was that the intention of the defendant was that the increased hourly rate would apply retrospectively from the original instructions in March 1995. This was not explained by the defendant to the plaintiff at all. Clause A of the agreement, intended by the defendant to have that effect, was unclear and did not spell out in so many words that that was its intended effect. It is not necessary for me to express any opinion as to how the agreement would have been interpreted, in relation to costs for work done by the solicitor between 1995 and March 1999. It is sufficient for me to accept that the agreement might have been interpreted in the solicitor's favour, which would have been quite unreasonable from the client's perspective.

399. Clause C of the agreement is difficult for me to understand and would have been unintelligible to a lay person such as the plaintiff. Clause E does not help much in understanding it. It is unclear to me whether the agreement obliged the client to pay for disbursements immediately, or whether the defendant should be taken to have agreed to pay the disbursements, and recover them from the plaintiff at the end of the matter. There is evidence that the latter method was not unusual in the marketplace.

400. Clause D, drawn so as to require the client to pay interest, was also unclear. The clause does not explain when interest was to run from. The reference to claims within the jurisdiction of the Magistrates Court and claims within the jurisdiction of the Supreme Court is confusing and there is no suggestion that it was explained to the plaintiff at any time.

401. For those reasons the 1999 costs agreement seems to me to have been unreasonable as well as unfair.

402. Having regard to my findings of fact, I am not satisfied that the defendant provided the plaintiff with an adequate explanation about the terms or effect of the 2002 agreement.

403. The agreement did not include any recital about the 1999 agreement. As I have already said, the expression "barrister and solicitor" had the capacity to be confusing to a lay person in the position of the plaintiff, in circumstances where, as she would have seen it, the defendant was her solicitor and Mr Maxwell was her barrister. It is understandable that the plaintiff might have been misled into thinking that the higher rate of $380.00 per hour applied to the barrister, Mr Maxwell, and the rate of $280.00 per hour applied to the solicitor, Mrs Ryan.

404. It is apparent from the evidence of the defendant that she intended the 2002 agreement to have retrospective application, so that it covered all work done by her firm since the initial instructions in March 1995. It is unnecessary for me to decide whether, properly construed, the agreement had that effect. I am satisfied that this was not explained adequately to the plaintiff, and that she did not understand that the higher hourly rates were to apply to work already done. If the intention of the parties was that the 1999 agreement was to be, in effect, revoked by the 2002 agreement, one would have expected this to have been spelt out in the agreement.

405. I am not satisfied that the defendant took adequate steps to make sure that the plaintiff understood the effect of the agreement, or, what the defendant intended its effect to be. I am not satisfied that the plaintiff understood the effect of the agreement as intended by the defendant.

406. I accept that the defendant more probably than not took the plaintiff through a series of questions and answers immediately prior to the signing of the agreement, but it seems to me likely that she did so in a perfunctory manner. I am satisfied that the defendant did not urge the plaintiff to obtain independent legal advice before signing the document.

407. All in all, I am satisfied that the 2002 costs agreement was relevantly unfair to the plaintiff.

408. Some of the matters I have referred to as to fairness are equally relevant to reasonableness. It was unreasonable for the agreement to be drafted so as to apply retrospectively to 1995.

409. Parts of the agreement were unclear, including the provisions about payment of disbursements and the provisions about interest. It does not seem to me that the plaintiff understood the provisions of clause F about irrevocable authority.

410. I am also satisfied that the hourly rates set out in the agreement were unreasonably high having regard to the nature of the litigation, the complexity of the matters, the skill and experience of the defendant and her staff, and fees charged by other firms practising in the same field in Canberra.

411. I am satisfied that for those reasons the 2002 agreement was unreasonable as well as unfair.

412. Section 191 of the Legal Practitioners Act confers upon the court a discretion to declare that a costs agreement is not binding on the parties. Short of such a declaration, the court may direct that the amount payable under an agreement be reduced to a specified amount.

413. Having regard to my findings of fact, it seems to me that the appropriate relief is to declare that the 1999 and 2002 costs agreements are not binding on the parties.

414. Where the court makes such a declaration, it may make such further orders as it thinks necessary to restore the parties to the position in which they would have been if the agreement had not been made.

415. The defendant acknowledges that the oral agreement about hourly rates in 1995 is not a binding costs agreement for the purposes of s 190 of the Act. Section 190(3) specifically provides that such an agreement is not enforceable in the absence of a note or memorandum containing the terms of the agreement and signed by the client.

416. I recognise that it is possible that if the defendant had charged the client costs calculated in accordance with the 1995 oral agreement, the client might have accepted that, and not challenged it.

417. However, it seems to me more satisfactory to approach the matter by reference to the amount the client would have been found liable to pay in costs in the event of a dispute with the solicitor. In that event, the solicitor would have been entitled to bill the client at scale.

418. As I have said, I accept the evidence of Mr Travers about what the solicitor would have been found entitled to charge, and the client found liable to pay.

419. For the reasons I have previously given, I do not propose to revisit the costs charged by the defendant in the early years and paid by the client, prior to the signing of the 1999 costs agreement, nor do I propose to revisit the issue of counsel's fees.

420. I propose to follow the lead of Higgins J in Passey, by making orders which will finally dispose of the matter, to avoid putting the parties through the expense of a remitter of the matter to the Registrar for taxation of a bill of costs. Quite enough time has been taken and quite enough money has been spent on this litigation already.

421. In broad terms, Mr Travers arrived at a differential of $32,000.00, between the fees charged by the defendant's firm and the amount she would have been entitled to recover from the plaintiff at scale (see [324] above). The fees charged by the plaintiff included almost $3,000.00 in professional costs billed in 1995 and 1996 and paid by the plaintiff at the time. Although it is not immediately apparent on the evidence, I suspect that Mr Travers would have reduced the total of those amounts, although probably not by much, seeing that they were billed at the original rate of $180.00 per hour.

422. Rather than embark upon an exercise of arithmetic precision, it seems to me reasonable in all the circumstances, to do justice between the parties, to fix upon a differential of $30,000.00, between the amount charged by the defendant, and the amount she would have been entitled to at scale.

423. There will accordingly be a declaration that the costs agreements of 23 March 1999 and 10 December 2002 are not binding on the parties to those agreements, and an order, in the form of a judgment, that the defendant pay the plaintiff $30,000.00.

424. The defendant has had the benefit of the overcharge from about mid-July 2004. The plaintiff is entitled to recover interest, at the prescribed rate for interest up to judgment, for the period in question. Rather than attempt to arrive at a precise date from which interest should run, I propose to adopt the broad-brush approach of allowing interest for ten years. Interest up to judgment is governed by rule 1616 of the Court Procedures Rules 2006. That rule gives the court a discretion about the rate of interest. The default rate prescribed in part 2.1 of schedule 2 to the rules is 9% per annum up to 30 June 2010, and thereafter a rate which is 4% above the cash rate published by the Reserve Bank of Australia. The Supreme Court website states that the current pre-judgment interest rate is 6.5%.

425. It seems to me reasonable to allow interest at 9% for the first five years and at 6.5% for the second five years of the period. That would amount to $13,500.00 for the first five years and $9,750.00 for the second five years, a total of $23,250.00. That seems to me a reasonable allowance for interest, to do justice between the parties.

426. There will accordingly be judgment for the plaintiff for $53,250.00.

427. Notwithstanding the amount for which I propose to order the entry of judgment, I note that under the Legal Practitioners Act this court had exclusive jurisdiction to grant the declaratory relief sought under s 191 (see definition of court in section 3). This is not a proceeding which could have been brought in the Magistrates Court. Accordingly, the costs penalty rules which were set out in the Supreme Court Rules at the time this action was commenced have no application.

428. The general rule is that costs will follow the event. I recognise that there may have been negotiations between the parties of which I am not aware, which may affect costs. At the same time, I do not want to put the parties to the expense of coming back to the court unnecessarily. I propose to order that the defendant pay the plaintiff's costs. Those costs will include the reserved costs of any application (r 1728).

429. I shall order that the order as to costs be stayed for 14 days, and that if either party wishes to apply for a different order about costs, that party may do so by email to the list clerk with a copy to the other side within that 14-day period. If notice of intention to make such an application is received within that period I shall make an order in chambers extending the stay until further order of the court, and the list clerk will list the matter for argument.

I certify that the preceding four hundred and twenty nine [429] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Master Harper