FEDERAL COURT OF AUSTRALIA

Director of the Fair Work Building Industry Inspectorate v Abbott (No 7)

[2015] FCA 969

THE COURT ORDERS THAT:

1.    The assessment of the Bill of Costs filed by the 221st respondent, dated 6 February 2013, be permanently stayed.

2.    Parties have liberty to apply on the question of costs of the application.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    The applicant (the Director) seeks an order that the assessment of the Bill of Costs filed by the 221st respondent, Mr John Anthony Windus, dated 6 February 2013, be permanently stayed.

2    The stay application is made on the basis that no retainer existed between Mr Windus and either of the firms of solicitors that represented him throughout the proceedings – Gibson & Gibson and Corser & Corser (the Solicitors), and that Mr Windus was not liable for the costs of the Solicitors.

3    The stay application will be allowed for reasons which I will explain.

Background

4    This application follows the Director’s interlocutory application, filed on 21 February 2013, which principally sought orders to compel Mr Windus to provide evidence as to whether he in fact retained each of the Solicitors to undertake work the subject of the claims set out in the Bill of Costs, and whether he is liable for those costs.

5    On 29 May 2013, the Court ordered (29 May orders) Mr Windus to file and serve an affidavit addressing communications, both oral and written, between the Solicitors evidencing the:

(a)    existence of any retainer Mr Windus had with Gibson & Gibson;

(b)    existence of any retainer Mr Windus had with Corser & Corser;

(c)    liability for payment of any fees rendered by Gibson & Gibson in relation to their representation of Mr Windus;

(d)    liability for payment of any fees rendered by Corser & Corser in relation to their representation of Mr Windus; and

(e)    proof of payment by Mr Windus of the costs claimed in the Bill of Costs, or alternatively, the details of litigation funders that have provided assistance to Mr Windus in funding the proceedings or interested non-parties, and copies of any third party undertaking or indemnity for costs.

See Director of the Fair Work Building Industry Inspectorate v Abbott (No 5) [2013] FCA 522.

6    For convenience I will set out Mr Windus’ involvement in these proceedings.

7    Mr Windus was joined as a party to these proceedings (matter WAD 230 of 2008) by an order of the Court made on 8 March 2010.

8    On 11 March 2010 the firm of Gibson & Gibson filed a notice of appearance on behalf of Mr Windus and became his solicitors on the Court record.

9    On 17 November 2010 a notice of change of address for service of Mr Windus was filed, and thereafter he commenced acting in person without a solicitor on the Court record.

10    On 18 March 2011 Corser & Corser filed a notice of appointment of solicitors. They are presently the solicitors of record acting for Mr Windus and they acted for him at trial.

11    The trial in these proceedings took place over eight days commencing on 21 March 2011. Final judgment was entered pursuant to orders made on 7 October 2011. Order 4 of these orders (Costs order) required the Director to pay Mr Windus' costs in these proceedings. The Director did not raise any challenge to the existence or terms of any retainer by Mr Windus of his solicitors prior to this order.

12    A draft Bill of Costs was provided to the Director for consideration on 7 June 2012.

13    By a letter dated 30 August 2012 the Director raised a number of preliminary questions relating to the draft Bill of Costs concerning Mr Windus’ representation over the relevant period of time and proof of payment by Mr Windus of the costs claimed.

14    On 16 January 2013 a Bill of Costs was filed pursuant to the Costs order. The Bill of Costs was ultimately set down for the taxing officer to make an estimate on 12 April 2013.

15    By letter dated 4 February 2013 the Director raised objections to the Bill of Costs proceeding to the estimate stage until Mr Windus had produced evidence as to whether he in fact retained each of the Solicitors and is liable for the costs, on the basis that the Director "denies any liability for the costs sought in the [Bill of Costs], on the grounds that there is no retainer".

16    The legal fees for services provided to Mr Windus by the Solicitors were paid by the Australian Manufacturing Workers Union (AMWU), the employer of Mr Windus.

17    Subsequent to the 29 May orders, the following affidavits were filed by Corser & Corser on behalf of Mr Windus:

(a)    As to all relevant communications concerning Gibson & Gibson: the Affidavit of Ms Shirley Feng sworn on 22 November 2013 (Ms Feng's First Affidavit), and the Affidavit of Ms Shirley Feng sworn on 18 February 2014 (Ms Feng's Second Affidavit); and

(b)    As to all relevant communications concerning Corser & Corser: the Affidavit of Mr Ronald Bower sworn on 22 November 2013 (Mr Bower's Affidavit).

The stay application

18    The stay application was initially heard on 3 December 2014. During the course of this hearing, I found that there had been significant non-compliance by Mr Windus with respect to the 29 May orders.

19    Order 1 clearly contemplated that Mr Windus depose on affidavit to any oral and written communications he had with both Gibson & Gibson and Corser & Corser concerning the relevant subject matters.

20    After hearing both parties’ submissions, the matter was adjourned so as to afford Mr Windus a further opportunity to comply with the 29 May orders and to file and serve an affidavit. Further, Order 2, which stayed the assessment of the Bill of Costs, remained undischarged.

21    Mr Windus filed and served his further affidavit sworn on 23 January 2015 (Mr Windus’ Affidavit). The matter recommenced on 25 March 2015 where counsel for the Director cross-examined Mr Windus mostly on his evidence concerning Corser & Corser.

22    I did not consider Mr Windus to be a witness of truth. His evidence under cross-examination was in material respects demonstrated to be false. It was inconsistent with other documentary evidence and with Mr Bower’s written evidence. Indeed, his evidence under cross-examination was even inconsistent with what he deposed in his affidavit.

23    In support of the stay application, counsel for the Director read the affidavit of Mr Matthew James Kelleher sworn on 6 June 2014 (Mr Kelleher's Affidavit). Counsel for Mr Windus read the following affidavits in opposing the application:

(a)    Ms Feng’s First Affidavit

(b)    Ms Feng’s Second Affidavit

(c)    Mr Bower’s Affidavit; and

(d)    Mr Windus’ Affidavit.

24    He made a submission seeking to confine the basis of the tender of one of the letters annexed to Ms Feng’s Second Affidavit. I do not accept, for reasons I will explain later, that this or any other document annexed to this affidavit should be so confined. Counsel for the Director also had an objection to this letter being proof of the truth of its contents. However, I did not understand this objection to extend to any statements against interest.

Legal principles

25    Two issues arise for consideration:

(a)    whether there was a retainer, either express or implied, between Mr Windus and each of the Solicitors (the retainer issue); or, alternatively

(b)    was it the AMWU which entered into retainer agreements with each of the Solicitors and, if so, on what terms.

26    The Director submits that there was no evidence that a retainer agreement, whether express or implied existed between Mr Windus and each of the Solicitors; rather the retainer in each case was between the AWMU and the Solicitors pursuant to which the Solicitors provided legal representation to Mr Windus in circumstances where Mr Windus was not to be liable for the costs charged by those firms.

27    Mr Windus submits that a retainer between himself and each of the Solicitors is deemed to exist on the basis that each appeared on the court record for, and formally acted on his behalf. Further, he submits that the existence of the retainer agreements is consistent, amongst other things, with his instructions to each firm to appear as solicitors on the record: in relation to Gibson & Gibson specifically – dealing with and giving instructions to Gibson & Gibson in relation to his defence; in relation to Corser & Corser specifically – meeting in conference with Corser & Corser to provide instructions and to prepare for trial.

28    He contends that with the existence of a retainer with each of the Solicitors, a liability on his part to pay legal costs arises.

29    Mr Windus also submits that the Costs order is a final order and that a judge no longer has jurisdiction to re-hear an order made by that judge or another judge, citing DJL v The Central Authority (2000) 201 CLR 226 at 244.

30    He also submits that the Director’s challenge to the existence of a retainer, and that there is no amount in respect of which he is entitled to be indemnified, is precluded. He submits that the Costs order, as one of the final orders disposing of the proceedings, necessarily involved the issue of whether a retainer existed and whether he had a liability for legal fees in respect of which to be indemnified (including that he had not been wholly exempted from any liability) as such matters went to the entitlement to the making of the Costs order. Thus, he submits, the Director’s challenge amounts to a collateral attack upon the basis of the Costs order.

31    For reasons I will explain, I consider these last two submissions to be interrelated. Together, they will be called the “preliminary issue”.

32    I will deal with these issues in reverse order.

Preliminary issue

33    Mr Windus had previously submitted, in supplementary submissions filed on 10 May 2013 in opposition to the Director’s interlocutory application, that this Court is functus officio in relation to the application. I did not accept this submission on the basis that I found that the Court may properly make orders in the exercise of its powers to make supplemental orders: Abbott (No 5) at [22]-[23], citing Coogi Australia Pty Ltd v Hysport International Pty Ltd [1998] FCA 1270 at [2].

34    Similarly, I do not accept his submissions on this preliminary issue. The Director here is not seeking to either vary or set aside the Costs order; rather, the application for a permanent stay concerns the efficacy of the Costs order. This is a supplemental order than can be made.

35    In relation to the notion of a “supplemental order”, Drummond J in Coogi relied upon the reasons of the Court in Caboolture Park Shopping Centre Pty Ltd (In liquidation) v White Industries (Qld) Pty Ltd (1993) 45 FCR 224. There the Court, at 234-236, describing a “supplemental order”, said that “[c]ritical to the jurisdiction of the Court is first that the application not be one in any way to vary or alter the initial order.”

36    The cited case of In re Scowby [1897] 1 Ch 741, at 754-755, adopts the approach of Preston Banking Company v William Allsup & Sons [1895] 1 Ch 141 “which is to the effect that there is jurisdiction to make a supplemental order upon new facts, although there is no jurisdiction to alter an order when once it has been drawn up and entered.” A similar observation was made by the Court in Caboolture when, in finding that it had jurisdiction to make the supplemental order, that “[n]either the facts nor the law are to be agitated again, save on an appeal. But the issues [the subject of the proposed order]…have not been determined by the judgment which has been entered”: at 236.

37    For these reasons I consider an order to permanently stay the assessment of the Bill of Costs arising from the Costs order, based on facts yet to be agitated, is a supplemental order that can be made by this Court; as mentioned, the Director’s stay application does not go to the substantive question of whether the Costs order should have been made; but rather it concerns the efficacy of the order.

Retainer issue

38    I reject Mr Windus’ submissions on this issue. As Dawson J, cited with approval by Mason CJ, stated “[t]he mere fact that a person appears on the record as the solicitor for a party does not necessarily justify the conclusion that there is a contract of retainer between a solicitor and that party”: see Halliday v SACS Group Pty Ltd (unreported, High Court, Dawson J, 23 December 1992) at 7; Halliday v High Performance Personnel Pty Ltd (in liq) (formerly SACS Group Pty Ltd) (1993) 113 ALR 637 at 639.

39    The existence of a contract of retainer will be presumed “when a solicitor has performed work on behalf of a person with his or her knowledge and assent, in circumstances which are consistent with that person being the solicitor’s client”: Josh Rashleigh Shaw v Yarranova Pty Ltd and Newquay Stage 2 Pty Ltd [2011] VSCA 55 at [19]. The onus is then on the party challenging the retainer’s existence to establish its absence: Shaw at [24]; Ernst & Young (reg) v Tynski Pty Ltd (recs and mgrs. apptd) (2003) 47 ACSR 433 at [35]; Hawksford v Hawksford (2005) 191 FLR 173 at [48]-[49]. The Director submits that the retainer agreements were between the Solicitors and the AMWU in circumstances where it was evident that Mr Windus was not to be liable for the Solicitors’ fees.

40    This Court has previously determined that although the Director, in establishing that the AMWU paid Mr Windus’ legal costs, shifted the evidentiary onus to Mr Windus to demonstrate the actual terms of the retainer agreements, the Director still bears the onus of negativing any liability of Mr Windus to pay costs to his solicitors: Abbott (No 5) at [25]; see also Hawksford at [54]-[55].

41    The relevant inquiry is as to what were the terms of any agreements as between Mr Windus and each of the Solicitors. Importantly, was there an agreement, in effect, in each case, that he would not be liable for their respective costs of representing him: Noye v Robbins [2010] WASCA 83 at [315] adopting with apparent approval the decision in Adams v London Improved Motor Coach Builders [1921] 1 KB 495 at 500-501 per Bankes LJ. These are questions of fact with attendant legal consequences.

Consideration

42    For reasons which I will explain, I make the following findings:

(a)    there was no retainer, either express or implied, between Mr Windus and either of the Solicitors;

(b)    there was a retainer agreement between the AMWU and with each of the Solicitors in circumstances where Mr Windus was not to be liable to pay the costs of the Solicitors.

Retainer issue

Gibson & Gibson

43    I find that the evidence establishes that there was a retainer agreement between the AMWU and Gibson & Gibson and it was pursuant to this retainer that Gibson & Gibson were to act for the individual AMWU members and to receive instructions from these individuals.

44    The Director relies on a letter dated 6 November 2008 sent from Gibson & Gibson to the AMWU (annexed to Mr Bower’s Affidavit) as evidencing of such a retainer agreement (6 November Letter).

45    The 6 November Letter is titled “Federal Court Action No of 2010”. The first paragraph below this title states the following:

We [Gibson & Gibson] confirm your [the AMWU’s] subsequent instructions to act for those members of the AMWU who are Respondents to the above proceedings in Federal Court (sic).

46    The 6 November Letter then states:

Basis of Retainer

Set out below is the basis of retainer we propose in respect of this matter for your consideration. We ask that you review this proposal and confirm whether it is acceptable from the AMWU's point of view.

We understand that the AMWU agrees to fund the legal costs of the individual Respondents’ defence of this matter.

….

Gibson & Gibson will require written instructions to act from each of the Respondents, those instructions to include express authority for Gibson & Gibson to discuss the defence, evidence and strategy with the AMWU unless to do so would be contrary to the client’s interests.

47    This last paragraph is reinforced by the pro forma “Instructions to Solicitors and Terms of Engagement” document that was purportedly enclosed with the 6 November Letter (Instructions document). However this document is not enclosed with the 6 November Letter. Both counsel accepted as common ground that a copy of that document is annexed separately to Ms Feng’s First Affidavit.

48    The Instructions document states the following:

Part 1    Agreement

This agreement sets out the terms and conditions on which you engage Gibson & Gibson to act for you in relation to your defence…in WAD 230 of 2008 (“Retainer Agreement”).

…..

Part 2    Terms and Conditions

1    Instructions

    You must give adequate and prompt instructions to Gibson & Gibson…

…..

3    Termination by you

You may terminate this Agreement at any time by writing to Gibson & Gibson.

4    Termination by Gibson & Gibson

    Gibson & Gibson may terminate this Agreement and stop acting for you….

49    Mr Windus, in his submissions, refers to clauses 1, 3 and 4 of the Instructions document’s Terms and Conditions and submits that the AMWU had no power to terminate the solicitor’s retainer on behalf of each individual member. I do not accept this submission. There is no evidence that Mr Windus received or signed the Instructions document. He deposed in his affidavit that he had “no independent recollection of this document or signing this particular document”. Correspondingly, to the extent that it was submitted that the Instructions document was relevant for the issue of whether a retainer existed, I consider the document, for reasons discussed below, pertinent to the issue of Mr Windus’ liability for costs.

50    Further, I find that there is no evidence that Mr Windus authorised the AMWU to act on his behalf.

51    Counsel for the Director took the Court to an email dated 6 November 2008 sent, it appears, from the AMWU to Gibson & Gibson. This email refers to an attached authority from Mr Windus “for AMWU to act on his behalf” (the 2008 Email). The authority is not attached.

52    Corser & Corser requested Slater & Gordon Lawyers (formerly Gibson & Gibson) to send to them all relevant documents for the purposes of the 29 May orders. They sent in reply various documents, including a copy of the 2008 Email, under cover of an email dated 19 November 2013, which explained that the signed authority could not be located and that “it is not clear that the…document was attached to the rest of the email.” A subsequent letter from Slater & Gordon Lawyers dated 24 January 2014 notes that no response has been received from the AMWU as to whether they had located a copy of the authority.

53    This letter was tendered in compliance with the 29 May orders. Mr Windus did not rely upon the truth of its contents. It is not clear what was the point of so limiting the relevance of documents annexed to an affidavit sworn by his solicitor in compliance with the 29 May orders which were made to enable the Court to have before it all relevant documents. The statement made concerning the authority by Slater & Gordon is, in any event, one against Mr Windus’ interests. There is no reason that the Court cannot rely upon those documents in resolving this matter.

54    Mr Windus deposed in his affidavit that he had not seen the 2008 Email prior to Corser & Corser showing it to him. Further he said that he has no independent knowledge of what the document is that appears to have been attached to the original email nor any independent recollection of the actual authority referred to in the email, or any other authority or document to that effect.

55    For these reasons, I find that it has not been established that Mr Windus authorised the AMWU to act on his behalf. I would have reached this conclusion even if I had not relied upon the content of the Slater & Gordon letter dated 24 January 2014.

56    I find that the 6 November Letter amounts to an express retainer between Gibson & Gibson and the AMWU. Gibson & Gibson were to act for the individual AMWU members who were respondents in this proceeding and to receive instructions from those individuals pursuant to this express retainer. This is confirmed by the following paragraphs in the 6 November Letter:

In the event that any particular member does not agree to our recommendations regarding the conduct of the proceedings or settlement of the proceedings, so that the member’s instructions are inconsistent with the group of Respondents, we will cease to act and that member must obtain separate representation.

…..

If we are not satisfied that a particular member is cooperating or providing instructions we will discuss the matter with you [the AMWU] with a view to considering whether we should continue to act for the member.

57    To say, as Mr Windus submits, that he gave instructions to Gibson & Gibson is beside the point; these were obtained pursuant to an agreement where the AMWU retained and instructed Gibson & Gibson.

58    I also conclude that at all relevant times the AMWU, and only the AMWU, was liable for the costs of Gibson & Gibson, not Mr Windus.

59    The 6 November Letter expressly provided that:

[T]he AMWU agrees to fund the legal costs of the individual Respondents’ defence of this matter.

….

We will render invoices for legal services bi-monthly during the proceedings. At the completion of each stage we will provide you [the AMWU] with estimates of the costs which may be involved in the next stage of proceedings and to completion of the proceedings.

(Emphasis added).

60    Further, the Instructions document, although not signed by Mr Windus, clearly contemplated that the liability to pay costs lay with the AMWU. It stated that:

Your Union has agreed to pay your legal costs incurred with Gibson & Gibson on the basis that Gibson & Gibson represent the group of individual respondents in the Federal Court action.

…..

Part 2    Terms and Conditions

…..

2    AMWU Funding

If for any reason the AMWU decides not to continue to fund your legal costs incurred with Gibson & Gibson, we may cease to act for you. We will first provide you with the opportunity to engage our services upon our standard Terms and Conditions in which case you will be responsible for your own legal costs.

(Emphasis added).

61    Mr Windus submits that clause 2 of the Terms and Conditions, above, did not exempt the “client” (that is, the individual AMWU member) from payment; its purpose was to provide that Gibson & Gibson are not required to provide legal services for free. However, as the Director correctly submits, this clause represented a clear recognition on the part of Gibson & Gibson that the AMWU member would not be responsible for its legal costs. If Gibson & Gibson considered the AMWU member to be responsible, then this clause would have been unnecessary; Gibson & Gibson would not have required to enter into a fresh engagement with the member if the AMWU decided not to continue funding the legal costs, as this clause contemplates.

62    Additionally, the bi-monthly invoices referred to in the 6 November Letter were before the Court. The invoices relevant for the period March 2010 to November 2010 (invoices dated 29 April 2010, 31 May 2010, 30 June 2010, 28 September 2010, 24 March 2011) are all rendered to the AMWU, although they refer to work done on behalf of Mr Windus. Further, all the invoices include the statement “To our professional costs of acting for you [the AMWU]” with some referring to the AMWU as the “client”.

63    Significantly, Mr Windus himself acknowledged that the AMWU were responsible for paying his legal costs. Mr Windus deposed in his affidavit that he “assumed payment of legal fees to Gibson & Gibson was covered by the [AMWU].”

64    Further, he signed a separate document titled “Authority”, which is annexed to both Ms Feng’s First Affidavit and Mr Bower’s Affidavit, whereby he authorised “any costs awarded to [him] in the matter…to be paid to the [AMWU] as they were responsible for paying [his] legal costs in this matter” (the Costs authority). This document was initially enclosed in a letter attached to an email sent by Corser & Corser on 9 February 2012. Corser & Corser, in this letter, refer to the Costs order made in favour of Mr Windus for the proceeding, representing the legal costs of the Solicitors, and requested for him to sign and return the document to confirm his instructions that he agrees to give the AMWU the benefit of any costs order. Mr Windus returned the signed Costs authority via email on 7 March 2012.

65    I reject Mr Windus’ submission (which were made in respect of both of the Solicitors) that the fact that accounts for legal costs were sent to the AMWU and not to Mr Windus, and that the payment of legal costs, including payment in full of all legal costs charged so as to discharge the client’s obligation, by the AMWU, is insufficient to demonstrate that Mr Windus was excluded from liability. He cited Shaw at [23], and Noye v Robbins at [313]-[314], [322], [331] to support this submission.

66    These submissions are predicated on the view that the obligation on a third party to make payment of costs to solicitors can coexist with an obligation on the part of the client to pay his or her solicitors: Adams at 504.

67    However, I have found that Mr Windus had no liability or obligation to pay Gibson & Gibson’s costs; the liability and obligation was with the AMWU.

68    The existence of the written retainer between Gibson & Gibson and the AMWU and the absence of any such agreement, or any other written agreement between the solicitors and Mr Windus, taken together, disclose that Mr Windus was to have no liability to pay the legal costs for his representation. Putting it another way, the evidence as a whole displaces any presumption of a retainer as between Mr Windus and Gibson & Gibson.

Corser & Corser

69    The Director submits, and I accept, that Corser & Corser initially intended to create a contractual relationship with Mr Windus by way of a written costs agreement under which Mr Windus would have had a liability to pay their costs for representing him. Mr Bower deposed in his affidavit at [19] the following:

…I advised Mr Windus that Corser & Corser would be willing to act for him subject to him signing the firm’s retainer agreement which I would send to him with some associated documents for him to read, and that if he wished us to act for him he should sign the costs agreement and return it to us.

70    However, the evidence demonstrates that no such contractual relationship was formed. Instead, I find that a written costs agreement was entered into between Corser & Corser and the AMWU in circumstances where it is clear that Mr Windus was not to be liable for the costs of his representation.

71    I find, as the Director submits, that Mr Windus did not enter into this costs agreement. This was, on his part, quite intentional, because he did not want to be liable for Corser & Corser’s fees. To this end, he communicated with the AMWU with a view to the AMWU entering into an agreement with Corser & Corser to pay their fees for acting for Mr Windus.

72    Such an agreement did eventuate. It was pursuant to this agreement that Corser & Corser acted on behalf of Mr Windus and received instructions from him.

73    Mr Bower deposed in his affidavit that he first met with Mr Windus in the “first few days of March 2011”; this is largely consistent with what Mr Windus deposes in his affidavit: this initial meeting took place “in the first week of March 2011”.

74    With respect to the “firm’s retainer agreement” described at [19] of Mr Bower’s Affidavit, no such completed agreement between Corser & Corser and Mr Windus was tendered in evidence. There is a letter dated 8 March 2011 sent from Corser & Corser to Mr Windus which was annexed to Mr Bower’s Affidavit (8 March Letter). This letter, signed by Mr Bower, enclosed a costs agreement (first costs agreement) and said in its first paragraph:

We have accepted your instructions subject to you signing a Costs Agreement with us. It is our usual policy not to commence work on your matter without you first signing a Costs Agreement with us.

75    No signed costs agreement was tendered. Mr Bower deposed that he was “unable to locate on the Corser & Corser file any evidence to establish that the costs agreement was sent or handed to Mr Windus or that a costs agreement was signed by Mr Windus.”

76    Mr Windus deposed that he “did not sign the Corser & Corser costs agreement and return it to Corser & Corser as requested by [Mr] Ronald Bower”. He confirmed this during cross-examination.

77    However, it is evident, that Corser & Corser entered into a costs agreement with the AMWU (second costs agreement).

78    A letter dated 16 March 2011 (16 March Letter), annexed to Mr Bower’s Affidavit, sent from Corser & Corser to the AMWU states:

[W]e [Corser & Corser] are pleased to advise that we are able to act on behalf of Mr John Anthony Windus in accordance with his instructions. Our acceptance of instructions is based upon agreement that the AMWU is responsible for the payment of our legal fees and is subject to the AMWU signing a Costs Agreement with us.

….

It is our usual policy not to commence work on your matter without first signing a Cost Agreement with us.

We have retained Mr Robert Lindsay to appear as counsel on behalf of Mr Windus at the trial of this matter.

….

Please advise whether you are willing to accept the above terms and we will prepare a formal costs agreement for signing and execution.

79    Mr Bower deposed in his affidavit at [30]-[31] that the 16 March Letter “was not signed by [him]” and that the “second paragraph in the [16 March Letter] is not entirely accurate … [as he] had already agreed with Mr Windus that the firm would act for him subject to his signing of a costs agreement.” I accept his evidence that he did not sign this letter. Nonetheless, it was signed on his behalf. I have already found that he did have a discussion of that substance with Mr Windus in their initial meeting. However, as at the date of the letter, the circumstances had changed. This in no way impugns Mr Bower’s credit. Rather, I find that he was mistaken as to the timing of events.

80    A letter dated 17 March 2011 (17 March Letter) from Gibson & Gibson to Corser & Corser was sent in response to the 16 March Letter and states:

Our client, the AMWU, agrees to meet your reasonable costs of representing Mr Windus on the basis of the terms set out in your Costs Agreement including your costs for filing an Appearance for Mr Windus, defending the application for Default Judgment and for the preparation for and appearance at trial.

81    The second costs agreement which appears to have been enclosed with the 16 March Letter is in evidence.

82    The introduction under Part 1 of this agreement provides that:

You, the Australian Manufacturing Workers Union (AMWU), agree with Corser & Corser that the details set out in Part 2 and the terms and conditions set out in Part 3 apply in relation to the services which are to be performed for you by Corser & Corser.

83    It outlines that the “client” is the “Australian Manufacturing Workers Union”. Under a separate heading, the “Legal service” provided is defined as:

Legal representation for Mr John Anthony Windus in preparation for, during the conduct of and consequent upon…WAD 230/2008.

84    I find that the AMWU entered into the second costs agreement on 17 March 2011.

85    I find that Corser & Corser commenced work to act for Mr Windus on or after 17 March 2011 after the AWMU entered into the second costs agreement. This conclusion is consistent with the notice of appointment of solicitors which Corser & Corser filed with the Court on 18 March 2011. It is also consistent with Corser & Corser’s “usual policy not to commence work” until a costs agreement had been signed, which is outlined in both the 8 March Letter and the 16 March Letter.

86    I also conclude that it was the AMWU, and only the AMWU, that was liable for Corser & Corser’s costs, not Mr Windus. Page 3, Part 2 of the second costs agreement outlines that “Corser & Corser will charge you [the AMWU] as follows” (emphasis added).

87    Aside from the signed Costs authority where, as mentioned earlier, Mr Windus acknowledged that the AMWU were responsible for paying his legal costs, this conclusion is also affirmed by the 17 March Letter which, as outlined above at [80], says that “Our client, the AMWU, agrees to meet your reasonable costs of representing Mr Windus on the basis of the terms set out in your Costs Agreement” (emphasis added).

88    An analysis of Mr Windus’ evidence further supports these conclusions. I find, relevantly, that Mr Windus did not sign the first costs agreement because he did not want to be liable for Corser & Corser’s costs and, as a result, arranged for the AMWU to enter into the second costs agreement.

Mr Windus’ evidence

89    Mr Windus proffered an explanation in his affidavit for not signing the first costs agreement enclosed in the 8 March Letter: “Corser & Corser and I became very busy preparing for the trial which was due to be heard in the following weeks.”

90    He elaborated on that statement by deposing that “[i]n the following two weeks [he] was in the offices of Corser & Corser on most days and on the weekend between those two weeks”. In his cross-examination, Mr Windus said that in preparing for the case he spent “every day [until] midnight at night…in the legal office doing other things”.

91    Mr Windus also deposed that he “commenced to provide [his] instructions to Corser & Corser in March 2011”. During cross-examination, Mr Windus rejected counsel’s suggestion that, other than the initial meeting with Mr Bower, he did not return to the offices of Corser & Corser to provide instructions until sometime on or around 17 March 2011.

92    I do not accept Mr Windus’ explanation as to why he did not sign the first costs agreement. Nor do I accept his evidence that he provided instructions throughout March 2011 since his initial meeting with Mr Bower.

93    I find that Mr Windus did not enter into the first costs agreement because he did not want to be liable for Corser & Corser’s fees and he arranged for the AMWU to be responsible for the payment of Corser & Corser’s legal fees in representing him.

94    Mr Windus’ evidence on this issue is as follows.

95    He deposed that “[a]fter some days of Corser & Corser working on [his] case” he was informed by Mr Andrew Cameron of Corser & Corser that there had been discussions between Corser & Corser and Mr Steve McCartney of the AMWU about the possibility of the AMWU funding his legal defence.

96    Further, he recalled “that on the last day of the weekend before the hearing”, that is, 20 March 2011, “it became apparent to [him] from things [he] was told by people at Corser & Corser that the AMWU was likely to fund [his] legal costs”.

97    He denied having any discussions with the AMWU about them paying his legal fees to Corser & Corser. Mr Windus confirmed in cross-examination that he did not have any discussions with the AMWU concerning this, but rather Corser & Corser had these discussions.

98    Further, Mr Windus deposed that “[n]o one at Corser & Corser told [him] that they would not commence work unless and until [he] signed and returned the costs agreement.” This evidence is directly inconsistent with Mr Bower’s evidence at [69] of these reasons, above.

99    This inconsistency was brought to his attention during cross-examination. He was asked again by counsel for the Director whether Mr Bower advised him that Corser & Corser would be willing to act for him, but subject to signing the firm’s retainer agreement. I take it that counsel meant the firm’s “retainer and costs agreement” in this instance. To this Mr Windus replied “I don’t recall that, at all. No.”

100    I reject this evidence. It is directly inconsistent with both Mr Bower’s evidence on this point, which I accept, and the contemporaneous documents.

101    First, Mr Bower deposed that “probably on or about 15 or 16 March 2011” Mr Windus spoke to Mr Cameron about the possibility of the AMWU paying his costs and, in particular, “that Mr Windus had advised [Mr Cameron] that a WA-based officer of the AMWU named Steve McCartney had advised Mr Windus during a telephone conversation they had that the AMWU would provide funds for the payment of costs owed by Mr Windus to Corser & Corser in relation to these proceedings”.

102    Second, the 16 March Letter, which I have referred to above, refers to a telephone discussion between Mr Cameron and Ms Sharon Thiel of the AMWU “earlier today” and then states:

In accordance with the above discussion we are pleased to advise that we are able to act on behalf of Mr John Anthony Windus in accordance with his instructions.

103    Third, there is a facsimile sent from Corser & Corser to Gibson & Gibson dated 29 March 2011 in which Mr Bower wrote:

When we were engaged in relation to this matter our client arranged for our costs to be paid by your client, the AMWU.

(Emphasis added)

104    Therefore, it is clear that it was Mr Windus who arranged for the AMWU to be responsible for the payment of Corser & Corser’s legal fees as a condition of their representing him, and it occurred several days prior to the “weekend” when Mr Windus said it occurred. I find that this occurred on or about 15 or 16 March 2011, that is, Mr Windus knew that the union had agreed to pay his legal fees as early as these dates. I reject Mr Windus’ express denial that he was personally involved in the matter.

105    Mr Windus’ oral evidence on this issue was starkly inconsistent with his written evidence. He deposed in his affidavit that he:

knew that there had been numerous telephone conversations between Corser & Corser and the AMWU over the course of the weekend before the hearing…in relation to the funding of my legal costs, and that in the end the union agreed to pay for my costs.

(Emphasis added).

106    He confirmed during cross-examination that it was because of these conversations described in the above paragraph that, as outlined at [96] of these reasons, “it became apparent to [him] … that the AMWU was likely to fund [his] costs” on the last day of the weekend before the trial.

107    Yet Mr Windus’ oral evidence was that he “went into this trial not knowing that the [AMWU] was paying [his] legal fees” and that he did not know that the AMWU had entered into an agreement with Corser & Corser to pay his legal fees until “months after the trial”.

108    I do not believe this evidence. Apart from what I have already explained, it is highly improbable that Corser & Corser would have entered into a costs agreement with the AMWU on 17 March 2011 without Mr Windus being informed of the same. Indeed it was Mr Windus who put in train the events which resulted in the AMWU entering into the costs agreement.

109    I also reject Mr Windus’ evidence that he instructed Corser & Corser throughout March 2011.

110    It is directly inconsistent with a Corser & Corser tax invoice dated 28 March 2011 addressed to the AMWU. This document is the complete version of an annexure in Mr Bower’s Affidavit. It discloses items of work undertaken by Corser & Corser beginning on 17 March 2011.

111    This supports the finding that Corser & Corser commenced the work on or around 17 March 2011 after the AWMU entered into the second costs agreement.

112    Mr Windus submits and Mr Bower deposes that Mr Windus provided instructions to Corser & Corser at conferences from 17 March 2011. This is beside the point. It is clear that Corser & Corser commenced the work and received instructions from Mr Windus after the AMWU had agreed to the terms of their costs agreement whereby the AMWU would be liable for Corser & Corser’s fees for providing legal representation to Mr Windus.

113    Accordingly, I also reject Mr Windus’ submission that his failure to sign the first costs agreement did not terminate the retainer of Corser & Corser, or that the subsequent second costs agreement did not have the effect of excluding him from any liability for costs. The evidence, I find, displaces any presumption of a retainer existing between Mr Windus and Corser & Corser; the agreement was between the AMWU and Corser & Corser where it was clear that Mr Windus had no liability for the solicitors’ costs.

Costs disclosure

114    In his closing reply submissions, the Director raised a new submission to supplement his argument that Corser & Corser did not consider Mr Windus a “client” who would be liable to pay them for their legal services. The Director submits that Corser & Corser did provide disclosure with respect to costs (costs disclosure) as required under the Legal Profession Act 2008 (WA) (the LP Act) Pt 10, Div 3, however, this was provided only to the AMWU, and not to Mr Windus.

115    Accordingly, he submits that this is wholly consistent with the fact that:

(a)    Corser & Corser did not consider Mr Windus to be their “client” and considered the AMWU to be their “client” (as opposed to a “third party payer”); or, alternatively;

(b)    the only “client” Corser & Corser considered was going to be liable to pay their “costs” was the AMWU.

116    I gave liberty to Mr Windus to respond to this submission. He submitted, firstly, that cost disclosure was made to him, and secondly, that any defect in the costs disclosure does not destroy the solicitor-client relationship, or the solicitor’s retainer, and does not excuse the client from the obligation to make payment of legal fees.

117    The following provisions of the LP Act are relevant for these purposes:

(1)    section 260: imposes important duties of disclosure upon a law practice to be made to a “client” in regard to “costs” (“client” is defined under s 3 as including a person to whom or for whom legal services are provided; by definition it is not a “third party payer”: s 253);

(2)    section 262: provides that disclosure must be made in writing before, or as soon as practicable after, the law practice is retained in the matter; .

(3)    section 264: imposes additional disclosure requirements for the purposes of negotiations in a settlement of a litigious matter;.

(4)    section 266: requires the written disclosure to be expressed in clear plain language;

(5)    section 267: provides an ongoing obligation to disclose.

(6)    section 268: outlines the effect of a failure to disclose.

(7)    section 270: concerns the disclosure to associated third party payers.

118    The Director relies upon the second costs agreement between the AMWU and Corser & Corser to support his submission that the only costs disclosure made was with respect to the AMWU. Pages 3 and 4 of this document outline both the basis of legal costs, as required under LP Act s 260(1)(a), and an estimate of legal costs.

119    Mr Windus, in support of his submission that costs disclosure was made to him, relies upon a document annexed to Mr Bower’s Affidavit titled “Corser & Corser Lawyers: New Client/Matter Requisition” (New Client document). Mr Bower explained at [20]-[22] of his affidavit that this document provides an estimate of $15,000 for the firm’s fees and outlines that a sum of $2,500 was to be paid into the firm’s trust account.

120    Mr Bower deposes that the New Client document was created following the initial meeting he had with Mr Windus. The $2,500 deposit would be paid when Mr Windus returned the signed first costs agreement. This sum, Mr Windus submits, matches the payment in advance that was outlined in the 8 March Letter that enclosed the first costs agreement.

121    However, as the Director correctly submits, it cannot be said that the estimate of costs relied upon by Mr Windus, in either the New Client document or the first costs agreement, amounts to the provision of the full range of disclosures required under the LP Act. For example, neither of these documents set out the estimate of the range of costs that may be recovered if the client is successful (s 260(1)(f)).

122    Further, this estimate was provided when Corser & Corser intended that Mr Windus would be its client. However, as outlined earlier, Mr Windus did not sign the first costs agreement in respect of which the purported costs disclosure was made.

123    A more comprehensive costs disclosure was made to the AMWU in the form of the second costs agreement. Mr Windus submits that costs disclosure is not only required to be made to the client but also to associated third party payers, relying upon LP Act s 270; the making of costs disclosure to an associated third party payer does not exclude the client from being the client and install the associated third party payer as the client.

124    Whilst this is correct, s 270 requires the law practice to make the same costs disclosure to an associated third party payer as the client, and must be made at the time disclosure is made to the client or as soon as practicable after becoming aware of the associated third party payer’s obligation to pay costs. There is no evidence that the costs disclosure made in the second costs agreement was provided to Mr Windus before, at the same time or even after it was provided to the AMWU.

125    This is confirmed by a letter annexed to Mr Kelleher’s Affidavit from Corser & Corser, which is dated 30 April 2014 and addressed to the Director’s solicitors, which outlines that “Corser & Corser did not provide a copy of the [second costs agreement]…to Mr Windus directly.” I find, as a result, that costs disclosure was made to the AMWU but not to Mr Windus.

126    Mr Windus’ submissions that any improper or defective costs disclosure does not result in there being no retainer agreement, or that the cost agreement is not automatically void, are not to the point.

127    Rather, it is evidence that further demonstrates that Corser & Corser considered the AMWU, and only the AMWU, to be under an obligation to pay its costs - not Mr Windus.

Conclusion

128    I have found that there was neither an implied nor an express retainer agreement between Mr Windus and Gibson & Gibson; I reach the same conclusion with respect to Corser & Corser. The agreements in each case were between the AMWU and each of the Solicitors. The AMWU was to pay their fees in consideration of each of them representing Mr Windus. He, by contrast, was to have no liability whatsoever to pay such fees.

129    Accordingly, I will make an order that the assessment of the Bill of Costs filed by Mr Windus, dated 6 February 2013, be permanently stayed.

Associate:    

Dated:    31 August 2015