SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORYCOURT OF APPEAL

Case Title: Ryan v Vizovitis

Citation: [2017] ACTCA 3

Hearing Dates: 9 and 10 November 2015

Decision Date: 1 February 2017

Before: Murrell CJ, Penfold and Perry JJ

Decision: 1. The appeal is dismissed.

2. The appellant is to pay the respondent’s costs of the appeal.

Catchwords: COSTS – agreement as to costs between solicitor and client – whether primary judge erred in finding that costs agreement was unfair and unreasonable – where agreement intended to increase solicitor’s fees retrospectively – where failure to explain terms of costs agreement and ensure agreement was understood.

PRACTICE AND PROCEDURE – where respondent was allowed to re-open case – where further evidence led in reply over appellant’s objection – where appellant not permitted to lead further evidence in response – whether appellant was denied procedural fairness before the primary judge - whether intervention of trial judge gave rise to apprehension of bias – whether unfairness in the conduct of the trial.

PRACTICE AND PROCEDURE – case management in civil trials – where appellant substantially contributed to delays and costs of the hearing.

Legislation Cited: Court Procedures Act 2004 (ACT) s 5AFair Trading Act 1992 (ACT)Federal Court of Australia Act 1976 (Cth) ss 37M, 37PLegal Practitioners Act 1970 (ACT) ss 190, 191Trade Practices Act 1975 (Cth) Court Procedures Rules 2006 (ACT) rr 21, 6201Supreme Court Rules 1937 (ACT)

Cases Cited: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175Arnautovic & Sutherland t/as Jirsch Sutherland v Cvitanovic (as trustee of the bankrupt estate of Adrian Lawrence Rosee) [2011] FCA 809; (2011) 199 FCR 1Athanasiou v Ward Keller Pty Ltd [1998] NTSC 27; (1998) 122 NTR 22Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541British American Tobacco Australia Services Ltd v Laurie [2011] HCA 2; (2011) 242 CLR 283

Burwood Municipal Council v Harvey (1995) 86 LGERA 389Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd [2006] HCA 55; (2006) 229 CLR 577 Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63Galea v Galea (1990) 19 NSWLR 263Goldsmith v Sandilands [2002] HCA 31; (2002) 76 ALJR 1024House v R (1936) 55 CLR 499In the marriage of S; Re S and P (1982) 66 FLR 315Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488Michael Wilson & Partners Ltd v Nicholls [2011] HCA 48; (2011) 244 CLR 427Passey v Bandarage t/as City First Solicitors [2002] ACTSC 105R v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546R v T, WA [2014] SASFC 3; (2014) 118 SASR 382RailPro Services Pty Ltd v Flavel [2015] FCA 504Re Budziszewski and Silver’s Bill of Costs (1981) FLC 91-038Re Minister for Immigration and Multicultural Affairs; Ex parte Epeabaka [2001] HCA 23; (2001) 206 CLR 128Re Stuart; Ex parte Cathcart [1893] 2 QB 201Royal Guardian Mortgage Management Pty Ltd v Nguyen [2016] NSWCA 88; (2016) 332 ALR 128RPS v R [2000] HCA 3; (2000) 199 CLR 620Ryan v Vizovitis [2015] ACTCA 28Vizovitis v Ryan (No 2) [2012] ACTSC 206Vizovitis v Ryan [2012] ACTSC 155Volanne Pty Ltd v International Consulting and Business Management (ICBM) Pty Ltd [2016] ACTCA 49Watson v Foxman and Others (1995) 49 NSWLR 315Weiss v Barker Gosling (1993) 114 FLR 223Yuill v Yuill [1945] P 15; [1945] 1 All ER 183

Texts Cited: Tarrant J, Disqualification for Bias (Federation Press, 2012)

Parties: Eunice Catherine Mary Ryan t/as Ryans Barristers and Solicitors (Appellant)

Georgia Vizovitis (Respondent)

Representation: CounselMr M Cleary (Appellant)

Mr S Hausfeld (Respondent)

SolicitorsRyans Barristers and Solicitors (Appellant)

Dibbs Barker (Respondent)

File Number: ACTCA 52 of 2014

Decision under appeal: Court: ACT Supreme Court

Before: Harper M

Date of Decision: 19 September 2014

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Case Title: Vizovitis v Ryan

Citation: [2014] ACTSC 243

THE COURT:

TABLE OF CONTENTS

1. INTRODUCTION ………………………………………………………………… [1]2. BACKGROUND ………………………………………………………….……… [10]

(a) The costs agreements …………………………………………………............... [10](b) Institution of the personal injury actions ………………………………............. [15](c) Settlement of the personal injuries actions and payment of professional fees

and disbursements to the solicitors ………………........................................... [16](d) The proceedings below and decision of the Master ………………….......... [20]

3. WAS THE SOLICITOR DENIED PROCEDURAL FAIRNESS?…….……… [30](a) The issues………………………………………………………………………… [30](b) Context in which the procedural fairness grounds fall to be

considered……………………………………………………………..…………… [33](c) Conduct of the trial………………………………………………………..……….. [40]

(i) Orders made on 24 February 2006 for a split trial…………………….. [41](ii) Issues identified in the client’s opening on 8 June 2010 …….………. [42](iii) The “no case” submission after the client’s case closed on 10 June

2010 and grant of leave to the client to re-open her case to lead evidence of financial disadvantage resulting from the agreements……………..………………………………………………… [45]

(iv) The Expert Reports of Mr Scott dated 18 August 2010 and 20 July 2011 which the client relied ……………………………..……………… [53]

(v) Resumption of the trial on 19-21 September 2011 and re-agitation of the decision to permit the client to re-open her case ………………… [55]

(vi) Expert evidence of Mr Hardman for the solicitor in reply to Mr Scott’s evidence………………………..…………………………………………… [60]

(vii) Expert evidence of Mr Travers for the client allegedly in reply to Mr Hardman’s evidence……………………………………….……………… [67]

(viii) The solicitor’s application for the Master to recuse himself made on 3 July 2012……………………………………………….…………………… [70]

(ix) Directions for Messrs Travers and Hardman to confer ……….………. [71](x) The solicitor’s objections in December 2012 to the admissibility of Mr

Travers’ expert evidence in reply ……………………………………….. [73](xi) Ruling to admit Mr Travers’ evidence in reply on 7 January 2013 … [79](xii) Ruling on 7 January 2013 refusing the solicitor’s application for leave

to obtain an expert report in reply to Mr Travers’ report ……………… [80](d) Alleged apprehension of bias …………………………………...……..………… [81]

(i) Relevant principles ………………………………………………..………. [81](ii) The 2012 Disqualification Judgment …………………………………….

………[85]

(iii) Did the Master err in failing to recuse himself?  .……………… ……… [87](e) Alleged unfairness in the conduct of the trial ………….……………….………. [95]

(i) The issues …………………………………………………………………. [95](ii) Relevant principles………………………………………………..………. [97](iii) The grant of leave to re-open on 10 June 2010 ……………….………. [100](iv) The alleged “re-opening” of the client’s case in September 2011……. [103]

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(v) Alleged unfairness in admitting the evidence of Mr Travers and not permitting the solicitor the opportunity to lead further expert evidence in reply …………………………………………..…………………………. [110]

4. DID THE MASTER ERR IN HOLDING THAT THE 1999 AND 2002 COSTS AGREEMENTS WERE UNFAIR AND UNREASONABLE? ……………..… [118]

(a) Relevant Legislative Provisions …………………………………………………. [118](b) Relevant considerations to determining whether the costs agreements were

unfair or unreasonable ……………………………………………………………. [123](c) Principles governing when an appellate court is entitled to set aside factual

findings at trial …………………………………………………….………………... [132](d) The Master’s findings as to the reliability of the evidence of the lay

witnesses …………………………………………………………………..……….. [137](e) Was the 1999 costs agreement fair? …………………………………..……….. [143]

(i) The terms of the 1999 costs agreement and circumstances in which it was concluded …………………………………………………………... [143]

(ii) Did the Master err in finding that the 1999 costs agreement was unfair? ……………………………………………………………………… [148]

(f) Was the 2002 costs agreement fair? …………………………………………… [158](i) The terms of the 2002 costs agreement and circumstances of its

entry………………………………………………………………………… [158](ii) Did the Master err in holding that the 2002 costs agreement was not

fair? ………………………………………………………..………………. [164](g) Did the Master err in finding that the 1999 and 2002 costs agreements were

unreasonable? ……………………………………….…………………………… [170]5. CONCLUSION……………………………………………………………..……… [176]

1. INTRODUCTION

1. This appeal arises from proceedings instituted in the Supreme Court by the respondent, Ms Georgia Vizovitis (the client), seeking orders setting aside two costs agreements with the appellant, Ms Eunice Ryan (the solicitor). Ms Ryan is the sole principal of a firm of solicitors practising at the Tuggeranong Town Centre.

2. The solicitor was engaged by the client to act on her behalf in relation to personal injuries claims arising from two separate motor vehicle accidents which occurred in 1994 and 1996. The fee agreement between the solicitor and client was initially oral and therefore unenforceable under the Legal Practitioners Act 1970 (ACT) (the LP Act). However, in 1999 and 2002 they entered into written costs agreements (the costs agreements). The client sought to set aside the two costs agreements on the ground that they were unfair and unreasonable under s 190 of the LP Act. In those circumstances, the client alleged that she was entitled to an order under s 191(3) of the LP Act (a restorative order) restoring her to the position she would have been in if the written costs agreements had not been made, namely, that the fees which she is liable to pay to the solicitor should be calculated by reference to the scale of costs then set out in the Supreme Court Rules 1937 (ACT) (the 1937 Rules). It is not in issue that, absent orders setting aside the costs agreements, the Registrar had no authority to tax the solicitor’s bills of costs as (then) provided for in Part 15 of the LP Act: Passey v Bandarage t/as City First Solicitors [2002] ACTSC 105 (Passey) at [15].

3. On 19 September 2014, the Master, in Vizovitis v Ryan [2014] ACTSC 243 (the Master’s reasons):

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(a) declared that the two costs agreements were not binding on the parties under s 191(1)(b) of the LP Act; and

(b) gave judgment under s 191(3) of the LP Act for the client in the sum of $53,250.00 comprising $30,000.00 (being the difference between the amounts charged by the solicitor, and the amount to which she would have been entitled at scale) plus $23,250.00 interest.

4. In arriving at the figure of $30,000.00, the Master accepted the evidence of a Mr Travers, an expert in costs called by the client, as to the amounts which he considered it was likely that the solicitor would have been found to be entitled to on a solicitor/own-client taxation (the Master’s reasons at [421]-[422]).

5. The solicitor contends on appeal that the Master erred in finding that the costs agreements were not fair and reasonable and in setting aside the costs agreements under s 191(1)(b) of the LP Act.

6. The solicitor also contends that the Master acted in breach of procedural fairness to the prejudice of the solicitor in a number of respects, in particular:

(a) in allowing the client to re-open her case to lead evidence of financial disadvantage arising from the costs agreements;

(b) in allowing the client to lead the expert report prepared by Mr Travers after both parties had closed their respective cases in chief on the ground that his evidence was directed to a new issue;

(c) in refusing the solicitor the opportunity to lead evidence in reply to Mr Travers;

(d) in depriving the solicitor of the process associated with a taxation conducted under Part 15 of the LP Act where she would have had the opportunity to make objections and be heard on the taxation; and

(e) in not disqualifying himself on the ground of apprehended bias by reason of his conduct of the trial.

7. The solicitor seeks an order setting aside the Master’s orders, setting aside the statement of claim, and giving judgment for the solicitor.

8. For the reasons set out below the appeal must be dismissed. In this regard, we also note that no specific submissions were made in support of the ground of appeal challenging the Master’s orders made on 13 November 2014 that the solicitor pay the client’s costs of the trial on a party-and-party basis to 23 February 2009, and on a solicitor-and-client basis from 24 February 2009. As such, we understand that the solicitor ultimately sought orders setting aside the costs orders made below only if she succeeded on the appeal, and that any challenge to the costs orders beyond this was not pressed. As the appeal against the substantive judgment is dismissed, it therefore follows that the appeal against the Master’s subsequent judgment as to costs must also be dismissed.

9. Finally, it should be said at the outset that this appeal continues a tragically disproportionate and wasteful proceeding. While the amount in issue at trial was in the order of $30,000.00 plus interest, the trial extended over 28 days over a period of three years. The client’s legal costs of the proceeding as at 3 March 2015 were estimated to be in excess of $400,000.00 (see Ryan v Vizovitis [2015] ACTCA 28 at [5] (Burns J)). As Burns J said on the application for a stay of the Master’s orders pending this appeal, “[t]he proceedings appear to have been

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marked by a complete lack of commercial common sense, bearing in mind the relatively small amount in dispute. It is quite clear that the costs of both parties vastly exceed the amount that was in dispute”: (Ryan v Vizovitis [2015] ACTCA 28 at [5]). To these costs must be added the further legal costs on the appeal, including preparation of a 29 volume appeal book of many thousands of pages and the hearing of the appeal over two days. In this regard, for reasons we later explain, we accept the client’s submission that:

… a close analysis of the transcript and the history of this matter shows that delays by the Appellant [solicitor] in complying with Court orders, unpreparedness by the Appellant [solicitor], her frequent changing of counsel, her laboured and unhelpful cross-examination when self-represented and her frequent, sometimes lengthy and largely unsuccessful interlocutory applications all contributed greatly to the length of this matter and the high level of costs in it.

2. BACKGROUND

(a) The costs agreements

10. As earlier mentioned, the solicitor acted for the client in two actions for damages for personal injuries in the Supreme Court arising from two separate motor vehicle accidents on 2 April 1994 and 3 April 1996 respectively. In each case, the client was the driver of a car struck from behind by another car.

11. The client instructed the solicitor in relation to the first accident in March 1995 and later in relation to the second accident. It was not in issue that at that time there was no written agreement about fees, although it was agreed orally that the solicitor would charge $180.00 per hour if the client 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 (the Master’s reasons at [40], [185], [200]). The parties accepted that, by virtue of s 190(3) of the LP Act, the 1995 oral agreement about hourly rates was not a binding costs agreement (the Master’s reasons at [415]). The fees charged by the solicitor under this arrangement included almost $3,000.00 in professional costs billed in 1995 and 1996 which were paid by the client at the time (the Master’s reasons at [421]).

12. It appears that in late 1997, the client was defaulting on payment of fees and disbursements owing to the solicitor with respect to the motor vehicle accidents. As a consequence, correspondence emanated from the solicitor to the effect that she presumed the client wished her to carry the unpaid account to completion of the matter at the rate of $220.00 per hour and requested that the client execute the enclosed agreement to that effect. No such agreement was ever entered into, although on 15 February 1999 the solicitor rendered accounts for costs and disbursements calculated at the higher rate (the Master’s reasons at [198]).

13. On 3 March 1998, a file note records a telephone attendance between the solicitor and the client. With respect to that note, the Master found at [193] and [194] that “[t]he 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’... The item number [sic] three in the note reads ‘costs – wants to put it out soon’.”

14. Ms Ryan gave evidence that her attempts to have the client sign a costs agreement “had been going on for years” by the beginning of 1999. On 23 March 1999, the solicitor and the client signed a document headed “Agreement as to costs” (the 1999 agreement) which provided for fees to be assessed at the rate of $280.00 per hour for the “principal barrister and solicitor”. Subsequently on 10 December 2002, the solicitor and client entered into a

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costs agreement which provided for fees to be assessed at the hourly rate of $380.00 (plus GST where applicable) for the “principal barrister and solicitor” (the 2002 agreement). The solicitor gave evidence that in each case she intended that the written costs agreements would apply retrospectively to 1995, with the 2002 agreement therefore wholly replacing the 1999 and 1995 agreements as the sole basis on which fees were to be charged for the handling of the two claims aside from those fees already paid by the client. As will later be explained, the Master held that the intended retrospectivity of the two costs agreements was unreasonable and the failure to explain this to the client was unfair.

(b) Institution of the personal injury actions

15. Proceedings in the Supreme Court were commenced by the solicitor on behalf of the client in 2000. The vehicles at fault in both accidents were covered by the same compulsory third-party insurer, NRMA Insurance. The two actions were heard together before Master Harper commencing on 5 November 2003, with Mr Maxwell of the Sydney Bar appearing for the client. Liability was not in issue. The principal issues were the cause of the injuries alleged by the client and her claim for loss of earning capacity, past and future. While the hearing had been allocated two days based on estimates from the parties’ solicitors, it became apparent that the estimate had been inadequate. The trial was adjourned to a further hearing to a date to be fixed, unfortunately before the client’s cross examination had been completed, the progress of the client’s evidence having been slower than usual because of the use of a Greek interpreter (the Master’s reasons at [17]-[18]).

(c) Settlement of the personal injuries actions and payment of professional fees and disbursements to the solicitors

16. Settlement negotiations then took place which resulted in the successful resolution of both actions in November 2003. The Master subsequently entered judgment by consent for the client in the sum of $50,000 plus costs in one of the actions and $25,000 plus costs in the other (the Master’s reasons at [19]).

17. As to the monies received by the client, we accept the client’s submissions:

(a) It was not in dispute that the client paid $59,615.87 in disbursements.

(b) Of the $75,000 settlement:

(i) $21,217.21 was paid to the client (plus interest accruing over 6 years).

(ii) $7,980.50 was paid to Medicare Australia on behalf of the client.

(iii) On or about 25 May 2004, $5,063.40 was paid to MBF Australia Ltd (a health insurance fund) on behalf of the client.

(iv) $40,738.89 was retained by the solicitor as solicitor’s fees.

18. Professional fees received by the solicitor prior to settlement were as follows:

(a) 16 October 1995: $1,000

(b) 10 November 1995: $1,000

(c) 24 November 1995: $200

(d) 27 February 1996: $548.45

(e) 13 May 1996: $184.23

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(f) 8 July 1998: $1,380.84 and $2,285.05

19. As to the disbursements paid directly by the solicitor (and excluding the $59,615.87 paid directly by the client), we also accept the figures put forward by the client that the total of disbursements paid by the solicitor from the client’s settlement funds was $17,293, including counsel fees of $16,495 paid to Mr Maxwell on about 19 December 2003.

(d) The proceedings below and decision of the Master

20. These proceedings were commenced in the Supreme Court by originating application on 19 October 2004, together with a statement of claim. As explained below, consent orders were made (the consent orders) for a split trial so that initially (in effect) the Court was to hear and determine, as a separate question, the question of whether the 1999 and 2002 costs agreements were not fair and reasonable. This would leave, to a later stage in the proceeding, the consequential claim for the solicitor’s fees to be calculated by reference to the Supreme Court scale if the client succeeded on the separate question. However, for reasons we later explain, part of the way through the trial and over the solicitor’s objection, the position changed, so that all of the issues, including as to the calculation of fees owing by the client in the event that the costs agreements were set aside, were ultimately heard and determined at the same time.

21. The trial commenced on 7 June 2010 and was heard in various tranches across some 28 days, with final written submissions lodged on 21 May 2013. We examine relevant aspects of the trial in the context of considering the apprehended bias and general procedural fairness grounds. However, at this stage, we note that evidence was given by a number of lawyers as to legal costing, including Mr Michael Scott called in the client’s case in chief, Mr Hardman called in the solicitor’s case in chief, and Mr Ronald Travers who was called in reply by the client, Mr Scott having died shortly after giving his evidence and before Mr Hardman’s report was served (the Master’s reasons at [360]).

22. On 19 September 2014, the Master delivered his decision. The Master held that:

(a) the 1999 costs agreement was unfair on the grounds that the Master was not satisfied that the client was provided with an explanation about the effect of the agreement (at [395]-[396]);

(b) the 1999 costs agreement was also unreasonable given the solicitor’s intention that the increased hourly rate would apply retrospectively from the original instructions given in March 1995, which was neither explained by the solicitor to the client nor clearly spelt out in the agreement (at [397]-[401]);

(c) the 2002 costs agreement was unfair given that the Master was not satisfied that the solicitor took adequate steps to make sure that the client understood the retrospective effect of the agreement intended by the solicitor and, further, that the higher rate of $380.00 per hour did not apply only to the barrister but also to the solicitor, where the terms of the agreement in this respect were confusing (the Master’s reasons at [402]-[407]);

(d) it was unreasonable for the 2002 agreement to be drafted so as to apply retrospectively to 1995; and

(e) the hourly rates in the 2002 agreement were also unreasonably high having regard to the nature of the litigation, the complexity of the matters, the skill and

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experience of the solicitor and her staff, and fees charged by other firms practising in the same field in Canberra (at [408]-[411]).

23. In terms of relief, the Master found first that it was appropriate to declare that the 1999 and 2002 costs agreements were not binding on the parties.

24. The Master also made orders under s 191(3)(a) of the LP Act, which confers power on the Court to 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. The Master considered that that issue should be approached by reference to the amount the client would have been found liable to pay and costs in the event of a dispute with the solicitor, which sum would have been calculated according to scale. The Master accepted in this regard the evidence of Mr Travers about what the solicitor would have been found to be entitled to charge and the client liable to pay. Mr Travers arrived at a differential between the two estimates of $32,000 in broad terms. The Master considered that the fees charged included almost $3,000 in professional costs billed in 1995 and 1996 and paid by the client at the time. In this regard, the Master had earlier found (at [386]) that:

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.

25. Consequently the Master suspected that Mr Travers would have reduced the total amounts, although probably not by much, given that they were billed at the original rate of $180.00 per hour.

26. The Master concluded at [422] that:

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.

27. In reaching this view, the Master held at [420] that:

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.

28. The Master’s reasons for preferring the evidence of Mr Travers are set out in the following passages. It is helpful to set those reasons out in full, given the significance of that evidence to the issues on the appeal:

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. …

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.

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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 [sic] 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.

…

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.

29. The Master’s conclusion as to the appropriate amount to which the solicitor would have been entitled on a taxation is also supported by his finding that:

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 solicitor’s 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 solicitor’s 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 solicitor’s costs on a party-and-party basis

3. WAS THE SOLICITOR DENIED PROCEDURAL FAIRNESS?

(a) The issues

30. The arguments as to a breach of procedural fairness are put in two ways:

(a) first, that the Master ought to have acceded to the application by the solicitor made on 3 July 2012 and heard and determined on 19 October 2012 for him to recuse himself on the grounds of apprehended bias arising from his

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management of, and conduct in the course of, the trial (the apprehended bias ground);

(b) further or in the alternative, the trial was unfair in any event by reason of the Master’s management of, and conduct in the course of, the trial (the unfair trial ground).

31. The apprehended bias is said to arise in particular from the alleged reluctance by the Master to accept that the client had closed her case on 10 June 2010 (the fourth day of the trial) subject to the tender of documents in cross examination, together with statements made by the Master when the issue of the re-opening was re-agitated on 20 September 2011 on resumption of the hearing.

32. The unfair trial ground was summarised by the solicitor in her submissions as follows:

In this appeal the Appellant [solicitor] also submits the Master committed serious errors in the management of the trial, to the prejudice of the Appellant [solicitor], and in clear breach of the Court Procedure Rules (ACT) Rule 21(1) and (2), and the principles of efficiency in the conduct of litigation as set out by the High Court in AON Risk Services Australia Ltd v ANU (2009) 239 CLR 175, particularly after the Master allowed the Respondent [client] to re-open her case, to run a totally new case, effectively extending the pleadings and to eventually call evidence from, amongst others, an expert, Ronald Travers, more than two years after the trial had commenced.

This led to a trial that was supposed to go for 2 days plus 1, go for 33 days over a 3 year period! The Appellant [solicitor] objected, in particular, to Travers' evidence being lead [sic] and his report being tendered. The Respondent [client] called Mr Travers, allegedly, as a witness in reply to the evidence of Kerry Hardman an expert witness who gave evidence for the Appellant [solicitor], in reply to the evidence of Michael Scott, an expert called by the Respondent [client] after the Respondent [client] closed her case without any evidence of from [sic] costs expert. In his evidence and report Mr Travers sought to give an opinion about how much might have been allowed on a solicitor-client taxation by the Court, without the Appellant [solicitor] being given an opportunity to respond during the “taxation”. Mr Hardman had not attempted to give an opinion of that kind in either of his reports. Mr Hardman’s evidence was simply the presentation of two bills, one at Scale and one based on the two costs agreements. Mr Travers’ evidence was not evidence in reply to Mr Hardman. The Master should not have permitted the Respondent [client] to lead the evidence of Mr Travers, or alternatively, the Master should not have denied the Appellant [solicitor] the opportunity of having [her] own evidence in reply to Travers’ opinion… The Master should not have relied upon Travers [sic] evidence to support any of the conclusions he came to in his judgment (for example, at [367]-[360] and [421] …) including the Master’s conclusion regarding what the Master considered was owing to the Respondent [client] under s 191(1)(a) of $30,000.

(emphasis in original.)

(b) Context in which the procedural fairness grounds fall to be considered

33. At the heart of many of the solicitor’s complaints is her submission quoted at [32] above that the Master’s rulings granting leave to the client to re-open her case and to admit the Travers report but not to permit the solicitor to call further evidence in response to Mr Travers were unfair and that these matters were causative of the excessive delays and costs expended in the proceeding. Those submissions ignore the solicitor’s substantial contribution to those delays and costs. In this regard (and at the risk of a degree of repetition as to points made later), it is helpful to begin by considering the solicitor’s submission by reference to the broader context of the way in which the trial was conducted by the parties and the Court.

34. First, the Master pointed to the way in which the solicitor ran her case, observing at [339] that:

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The case for the plaintiff [client] was assisted by the fact that she was represented throughout by the same counsel. The case for the defendant [solicitor] 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.

35. The solicitor’s considerable emotional investment in the case is evident, by way of example, in the submission made by the solicitor on 18 December 2009 in a pre-trial application (quoted in the Master’s reasons at [348]) that:

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.

36. The practical impact that the lack of representation and lack of objectivity had upon the manner in which the case for the solicitor was run can be illustrated by the Master’s findings as to the solicitor’s approach to closing submissions in the following passages, with the solicitor filing “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” (the Master’s reasons at [332]). Following the hearing of oral submissions in closing, the solicitor filed two further documents by way of written submissions purportedly in reply to the client’s oral submissions of 64 pages in length and in reply to the client’s reply running to 43 pages (the Master’s reasons at [335]). With respect to these documents, the Master found that:

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.

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37. Secondly, in addition to the difficulties caused by the way in which the solicitor ran her defence explained above, she made several unsuccessful interlocutory applications during the course of the hearing. These included: an oral application in June 2010 that there was no case to answer; an application on 8 September 2011 (a mere 11 days before the resumed hearing was scheduled) for the client’s legal representatives to cease acting, the hearing for which occupied a day and half (Master’s reasons at [77]); the application in July 2012 (heard in September 2012) for the Master to disqualify himself, for summary dismissal and for security for costs; and the application in December 2012 for the issue relating to the admissibility of the Travers’ report to be determined by a Judge instead of the Master. In addition, on one occasion, the solicitor’s daughter, who was also a witness who had given evidence in the proceeding, sought inappropriately to appear on her mother’s behalf, leading to a further adjournment to allow the solicitor to obtain representation or to represent herself.

38. Thirdly, the timing of the Travers report needs to be placed in context. The first expert costs report was prepared by Mr Scott in August 2010 and served shortly thereafter, only about two months after the client was allowed to re-open. Mr Scott’s second report was prepared and served in July 2011. However, the solicitor’s expert report in response, being (relevantly) the expert report of Mr Hardman, was not served until 2 November 2011, i.e., over a year after Mr Scott’s first report and, in a tragic twist, on the day after Mr Scott had died. As will be explained below, the evidence led by the client of Mr Scott was to the effect that it would be disproportionate to undertake a full taxation of the costs because of the small amount in issue and, for this reason, he purportedly adopted a “broad brush” approach based on the parties’ agreed costs at settlement. That sensible approach was not heeded by the solicitor, with Mr Hardman’s reports in relation to the two personal injuries claims containing comprehensively itemised bills of costs purportedly calculated according to scale for each matter. To so approach the matter was also misconceived and unhelpful, as Mr Hardman made no judgment as to the items or amounts that would likely be allowed on a taxation and was not qualified to do so. So understood, the admission of Mr Hardman’s reports, in particular, was a major contributor to the case going “off the rails”, prompting (understandably) expert evidence in reply by the client: see further below at [66], [112]-[114].

39. Finally, the Master pointed to the unrealistic estimates repeatedly given as to the time required to complete the trial as a further matter which he considered had contributed to the length of the matter], saying at [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.

(c) Conduct of the trial

40. Against those preliminary contextual observations, it is necessary to consider relevant aspects of the trial in chronological order in some detail in order properly to assess the procedural fairness grounds.

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(i) Orders made on 24 February 2006 for a split trial

41. On 24 February 2006, the Master made an order by consent that the Court hear and determine as a separate question all of the issues raised by the statement of claim save for the prayers for orders that the solicitor prepare a bill for taxation or that her costs be reduced to a specified sum with the solicitor to pay to the client the difference between the amount paid by the client and the amount found to be due or specified under (relevantly) s 191 of the LP Act (paragraph 19(c) and (d), statement of claim). In effect, the parties sought by consent to limit the issues to be heard and determined in the first stage of the trial and thereby to achieve a resolution of the real issue between them without the cost of expert evidence, while (if the costs agreements were set aside) leaving open the option that the parties might be able to agree restorative orders as to the client’s liability to pay fees to the solicitor or if need be call expert evidence. Thus, while orders were made at the same time for the parties to file and serve any expert reports, as well as any affidavits, on which they proposed to rely in advance of the trial, neither party filed any expert reports at that time.

(ii) Issues identified in the client’s opening on 8 June 2010

42. The trial commenced on 7 June 2010. Mr Hausfeld of counsel appeared for the client throughout the proceedings below. The solicitor, Ms Ryan, appeared unrepresented at this stage although, as earlier mentioned, she was intermittently represented by three different counsel during the course of the trial (the Master’s reasons at [33] and [339]).

43. The issues were narrowed in opening by the client on 8 June 2010. While the statement of claim pleaded a broad range of causes of action, Mr Hausfeld withdrew the claims made under the (then) Trade Practices Act 1975 (Cth) and the Fair Trading Act 1992 (ACT) and for undue influence, unconscionability and total failure of consideration. This effectively left for determination on the first stage of the trial only the issue of whether the 1999 and 2002 costs agreements should be set aside on the grounds that they were unfair and/or unreasonable under s 191 of the LP Act.

44. Mr Hausfeld also stated in opening that, while the Court might direct that an amount payable under the agreement be reduced to a specified amount “further down the track… the matter that we’re here to deal with is essentially the setting aside of the agreement”. Thus the client indicated in opening that three lay witnesses would be called but no expert. As such, while the case proceeded on the basis that an order might ultimately be made as to the extent of the client’s liability to pay fees to the solicitor and expert evidence called on that issue, it is plain that it was intended at the start of the trial that this would occur (if it proved necessary) at a later stage in line with the approach embodied in the consent orders. It is therefore also plain that there was no abandonment by the client of her claim for a restorative order as to the fee payable by her under s 191(3).

(iii) The “no case” submission after the client’s case closed on 10 June 2010 and grant of leave to the client to re-open her case to lead evidence of financial disadvantage resulting from the agreements.

45. The client gave evidence in chief on 8 June 2010 and was cross-examined, and evidence was given by her two sons on 10 June 2010.

46. On 10 June 2010 (the fourth day of the trial), the client’s case was closed with counsel for the client stating:

that concludes the viva voce evidence for the plaintiff. I don’t intend to tender any other documents now but I will be tendering them in the course of cross-examination.

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47. Upon the client concluding her evidence, the solicitor (who was at that point self-represented) submitted that the only claim left was the LP Act claim and that there was no case for her to answer. In support of the latter, the solicitor submitted that the client had not led any evidence to suggest that the agreement was signed in an unfair way or that the terms of the agreement were unreasonable, and that the client had therefore failed to discharge the burden of proof. In response, Mr Hausfeld for the client submitted first that the client had given evidence that she had been given no explanation of either agreement by the solicitor, which was a basis on which the agreements could be set aside. Secondly, he submitted that, while the solicitor had cross-examined the client at length, she had not put to the client any account of any explanations of the agreements said to be have been made to the client.

48. It was at this point that the Master first raised the question of what disadvantage the client might have suffered even if the agreements were unfair and unreasonable, in the following exchange with counsel for the client:

HIS HONOUR: How am I going to be satisfied that the agreements were disadvantageous to the plaintiff?

MR HAUSFELD: … I will take your Honour in due course in closing to the Supreme Court rules applicable in 1999 and …2002. It will be entirely clear from that that the figures were significantly above scale and that, as your Honour will recall from the Passe[y] case, is another ground on which the agreements were set aside in that case.

HIS HONOUR: Yes. Look, if they are, but there’s no evidence of it, do you say I don’t need evidence, that it’s going to be apparent just from the ---

MR HAUSFELD: No, because we have evidence already of what the amounts charged – the rate charged was. The scale is specified in the Supreme Court Rules….that is, as I say, a matter of law and therefore submission, not of evidence.

HIS HONOUR: Yes. Well it seems likely. Ms Ryan, do you concede that the amounts under the fees agreement resulted in a higher charge than if you’d simply charged under the Supreme Court scale, or not?

MS RYAN: I don’t concede that. I concede that the rate is the rate that is different from the scale…I say that the reason that there was a cost agreement at all was because the client asked me to fund the case until the duration, which is, in fact, six years….

49. In response to the application to dismiss the matter on the basis that there was no case to answer, Mr Hausfeld submitted that he would “simply seek to re-open and I will tender all of the documents that would otherwise go on. It will take me some time.” The following exchange then took place:

HIS HONOUR: It’s almost quarter past 4.00 now and we’re going to have to put this over into the future anyway. I will certainly allow you to reopen, but you might just give some consideration to calling some expert evidence about the difference between the costs charged in this case and what the costs were likely to have been at scale, because I’m just not – you know, I haven’t closed my mind about it, but I’m just not sure that I’ve got enough evidence to be satisfied that the agreement has caused financial disadvantage to the plaintiff.

MR HAUSFELD: This matter has run for so long since 2004 and costs are already – of this matter are far outstripping what is really at issue in terms of financially between the parties. And it was that for that reason in part that we forbore from brin[g]ing the costs assessor to this hearing and also this hearing was limited purely to the setting aside question, but we will – I hear what your Honour has said and we will attend to that in due course….

(emphasis added)

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50. It is not in issue that these passages should be construed as a grant of leave to the client to re-open its case. Indeed, the solicitor relies upon this characterisation of what occurred in support of her apprehended bias and unfair fair trial grounds of appeal. The Court was then adjourned part heard and did not resume until some 15 months later.

51. It is apparent from the Master’s reasons for judgment that his underlying concern in raising the issue of financial disadvantage related to the question of whether he should exercise his discretion to grant relief to set aside the costs agreements, which was to be addressed on the separate question. As the Master explained at [34]:

In the course of the argument on [the “no case” submission] 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 [sic] 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.

52. At [78] of his reasons, the Master explained his reasons for allowing leave to re-open after dismissing the solicitor’s application for an order restraining the client’s solicitors from continuing to act for the client and after dismissing her “no case” submission:

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.

(iv) The Expert Reports of Mr Scott dated 18 August 2010 and 20 July 2011 on which the client relied

53. Mr Scott’s first expert costs report (Exhibit D) was dated 18 August 2010, and was served on the solicitor shortly thereafter. A supplementary report was dated and served in July 2011.

54. Mr Scott assessed costs “globally” by reference to the scale and rates in the costs agreements. He did not give an opinion based on the amount that a taxing officer would award in a court taxation proceeding, considering that to undertake that task would be very time consuming and expensive, and that it would not be cost effective to prepare an assessment of the practitioner’s costs and disbursements on an entry-by-entry basis. Rather, he made a “global assessment” based on the costs agreed pursuant to the settlement of the two motor vehicle accidents to which he applied a ‘rule of thumb’ of a further 15% for additional work which might be allowed. The Master summarised Mr Scott’s evidence relevantly as follows:

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

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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.

…

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.

…

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.

(v) Resumption of the trial on 19-21 September 2011 and re-agitation of the decision to permit the client to re-open her case

55. The trial resumed on 19 September 2011. In the course of a submission by the client’s counsel to remind the Master of where the hearing was up to (in response to the Master’s request to do so), the following exchange took place:

MR HAUSFELD: …your Honour also … in broad terms suggested that I give some thought to expert evidence about the costs charged in this matter, and scale, and your Honour expressed a view, as I interpret it, that your Honour would want to be satisfied that Ms Vizovitis suffered some disadvantage I think was the words.

HIS HONOUR: Yes, I think I remember that. Yes, it wouldn’t necessarily be appropriate to set aside a costs agreement on the basis of formalities if the effect of it was that it was no more onerous on the client than charging scale would have been without ---

MR HAUSFELD: Indeed. Indeed. Now, that expert evidence is now on, or has been served. … And my ultimate submission in this matter now will be that … when your Honour has considered that evidence, your Honour would be in a position not only to be satisfied that there was disadvantage but to save significant costs overall in the matter by not only setting the costs agreement aside but by putting a dollar amount on what should apply. And there’s sufficient evidence, in my submission, in the expert reports when we get there. But they’re further down the track.

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56. On 20 September 2011, the solicitor objected unsuccessfully to the client “going on now with his case” despite the client’s counsel saying on the last occasion that he had completed his oral evidence: see [46] above and further below.

57. On 21 September 2011, the client’s counsel submitted that Mr Scott’s “global assessment” evidence was led in support of the claim for a restorative order under s 191. Specifically, Mr Hausfeld for the client submitted that:

MR HAUSFELD: That’s – I suppose I can tell Ms Ryan has a misunderstanding with my case. I said earlier today that – and I am quite certain about it, because in fact what I did was flick to comments I had made for way, by way of closing before your Honour, that in due course I would be submitting that your Honour would be satisfied that the costs agreements are unfair, unreasonable and should be set aside, and that further, I’d be submitting that given the likely costs of sending the matter back for preparation of a bill of costs, which Mr Scott estimates is $30,000 worth on its own before we even get to the assessment, that it would be just expeditious, and otherwise in accordance with Rule 21 of the Court Procedures Rule that your Honour will make a global assessment on the matter.

Now, clearly, if I fail in convincing your Honour about the first part of that submission, the second part doesn’t arise, but otherwise, in my submission it does.

58. We interpolate to point out that the accuracy of Mr Scott’s prediction as to the costs of preparing a bill of costs according to scale, and the wisdom of his preferred “global assessment” approach, were borne out by the fact that Mr Travers’ report ultimately took 92 hours to prepare and cost more than $30,000 (the Master’s reasons at [326]) – in excess of the amount therefore awarded by the Court below absent interest.

59. On 9 November 2011, the client informed the Court that her case was closed.

(vi) Expert evidence of Mr Hardman for the solicitor in reply to Mr Scott’s evidence

60. The solicitor sought to rely upon the expert evidence of Messrs Hardman and Bradley, both legal practitioners. Mr Kerry Hardman’s evidence is of particular relevance on the appeal.

61. His evidence was foreshadowed on 9 November 2011. Mr Hardman was a solicitor admitted in NSW in 1979 who had practised since 1998 as a legal costing consultant (the Master’s reasons at [90] and [115]). His four undated reports were served on the client on 1 November 2011 and tendered on 19 December 2012 as follows:

(a) an itemised list of 868 items of work (95 pages in length) which purported to calculate costs with respect to the first motor vehicle accident under the 1999 costs agreement;

(b) an itemised list of 790 items of work (87 pages in length) which purported to calculate costs with respect to the second motor vehicle accident under the 1999 costs agreement;

(c) an itemised list of 1268 items of work (88 pages in length) which purported to calculate costs with respect to the first motor vehicle accident at scale; and

(d) an itemised list of 1143 items of work (81 pages in length) which purported to calculate costs with respect to the second motor vehicle accident at scale.

62. In each case, the itemised list contained a column headed “Assessor’s Use Only” which was left blank. We also note that no explanation is given for the disparity in the number of items with respect to the first and second accidents as assessed under the 1999 costs agreement as opposed to that assessed according to scale.

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63. The client objected when Mr Hardman’s evidence was foreshadowed on 9 November 2011 on the grounds that the reports were prepared and served a year after Mr Scott’s evidence and were irrelevant, and submitted that if his reports were admitted, she would need to rely on evidence in response.

64. Subsequently Mr Hardman provided an estimate of fees pursuant to the 2002 costs agreement in a short letter dated 8 November 2011 which gives a global estimate of $114,900 but, unlike the earlier reports, does not provide an itemised bill.

65. Mr Hardman’s evidence was intended to show that there was little difference between the amounts that would be recovered under the agreements and the amount that would be recovered according to the scale. As the Master explained at [368] of his reasons:

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.

66. We interpolate again at this stage to observe that Mr Hardman engaged in an essentially arithmetic exercise, applying the fees in the 1999 and 2002 costs agreements to work allegedly undertaken and separately characterising items and applying the quantum assigned to each item in the scale in the Court Procedures Rules 2006 (ACT) (the Court Procedures Rules). In so doing, Mr Hardman did not express any view as to the likelihood that particular items would be allowed, or as to the amount which might be allowed, on a taxation. Indeed, the relevant column for the assessor to undertake that task was left blank in each itemised list. As such, for reasons we later explain at [112]-[114], the evidence was misconceived: Vizovitis v Ryan (No 2) [2012] ACTSC 206 (Vizovitis v Ryan (No 2)) at [15].

(vii) Expert evidence of Mr Travers for the client allegedly in reply to Mr Hardman’s evidence

67. Mr Scott died on 1 November 2011 before service of the solicitor’s expert reports (the Master’s reasons at [89]). Consequently Mr Scott was not available to the client to advise on how to respond to the solicitor’s expert reports or to give evidence in reply.

68. On 12 January 2012, the client served the report of Mr Travers (who had been instructed on 1 December 2011). Mr Travers was present in court when Mr Hardman gave his oral evidence although he formed the view after speaking with Mr Hardman by telephone prior to the hearing, in line with the Master’s directions, that there was no likelihood of their arriving at a joint report (the Master’s reasons at [294]-[295]). Mr Travers gave oral evidence on 20 and 21 December 2012 and on 7 and 8 January 2013. Mr Travers was highly qualified and experienced in the preparation of bills of costs and had appeared in a large number of taxations of bills of costs in the Supreme Court (the Master’s reasons at [292]-[293] and [367]).

69. Taking as its starting point the draft bills of costs prepared by Mr Hardman, Mr Travers’ report provided his opinion about the likely outcome on assessment if the itemizations of costs by Mr Hardman were taxed by the Registrar of the ACT Supreme Court on a solicitor/own client taxation. Mr Travers concluded that:

(a) I am of the opinion, taking all of the matters set out in this report into account, that neither of the two signed costs agreements are fair and reasonable;

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(b) I am of the opinion that neither of the costs agreement comply with S.190 of the Legal Practitioners Act 1970 in the sense in which Ryans have sought to rely upon them in billing the client; and

(c) I am of the opinion that Ryans are not entitled to recover anymore than scale fees from the client for any of the work done by them in view of S.183(a) of the Legal Practitioners Act 1970 and I consider that this opinion is supported by the decision in Passey v Bandarage [2002] ACTSC 105.

If the costs agreements are set aside, and costs are allowed at ACT Supreme Court scale rates, I would expect Ryans to be entitled to recover no more than $48,014.41 for their professional costs and disbursements…

…

The client has paid Ryans the whole of the $83,828.46 which was charged by Ryans ….

This represents an overcharge, and an overpayment, of at least $35,814.05 …

(viii) The solicitor’s application for the Master to recuse himself made on 3 July 2012

70. On 3 July 2012, the solicitor filed an application seeking (relevantly) that the Master disqualify himself from the further conduct of the matter. That application was heard on 24 September 2012, with Mr MJ Neil QC appearing for the solicitor and the client being represented by Mr JM Hill, a member of the firm acting for the client. The solicitor relied upon a 60 page affidavit sworn by her in support of the application, most which was said by Master to consist of submissions rather than evidence. The Master delivered his ruling dismissing the application on 19 October 2012: Vizovitis v Ryan [2012] ACTSC 155 (the Disqualification judgment).

(ix) Directions for Messrs Travers and Hardman to confer

71. Following delivery of the Disqualification judgment, the matter was called on for directions before the Master on 31 October 2012. At that hearing, the Master directed that the expert witnesses, Mr Travers and Mr Hardman, meet to endeavour to resolve any disagreement between them and to produce for the court’s use a document identifying the matters on which they agree and disagree, and the reasons for disagreement on any matter.

72. That did not however occur. As the Master found (at [61]):

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.

(x) The solicitor’s objections in December 2012 to the admissibility of Mr Travers’ expert evidence in reply

73. When the hearing resumed on 17 December 2012, the solicitor was represented by Mr Benjamin O’Donnell of the Sydney Bar. The Master observed at [95] that no reasons were given as to why neither Mr Neil QC nor Mr Toomey QC (who had represented the solicitor at an earlier stage of the trial) were continuing to appear in the matter for the solicitor.

74. On 18 December 2012, the solicitor objected to Mr Travers’ evidence on two bases. First, Mr O’Donnell submitted that Mr Travers was not a witness in reply. Secondly, he submitted that his evidence introduced a new issue, namely, the likely result on taxation which had no

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bearing on whether the original costs agreements were unfair and unreasonable. As such, Mr O’Donnell for the solicitor contended that Mr Travers’ evidence was irrelevant.

75. On 18 and 19 December 2012, counsel for the client cross-examined the solicitor’s expert, Mr Hardman, on the foreshadowed evidence of Mr Travers and in particular on which items were costed at an inflated amount or might not be allowed on a taxation. Mr Hardman explained that he was not in a position to comment on the opinion of Mr Travers about how a taxing officer would have approached the assessment of costs in the ACT because he had no experience of taxation in the ACT: “It’s just never part of what I do”.

76. An objection to Mr Travers’ evidence on 20 December 2012 based on an alleged conflict of interest was dismissed after cross-examination of Mr Travers on a voir dire. It appears that the Master indicated that it was his view Mr Traver’s evidence was not inadmissible.

77. An application under r 6201 of the Court Procedures Rules was then made by the solicitor to remove the case from the Master to a judge of the Supreme Court so as to enable the judge to rule on whether Mr Travers evidence should be excluded. That application was heard by Refshauge J on 21 December 2012. Refshauge J dismissed the application to remove the case, with costs, on the same day and delivered ex tempore reasons: Vizovitis v Ryan (No 2). In so holding, his Honour considered that in the event that the evidence was wrongly received, Mr Travers’ evidence could be unravelled from the remainder of the evidence, and that it was for the Master to determine the use to be made of Mr Travers’ evidence (at [21]).

78. Following that decision, the Master resumed the hearing of Mr Travers’ evidence. On 21 December 2012, at the end of Mr Travers’ examination in chief, counsel for the client sought to tender Mr Travers’ report of 12 January 2012. Mr O’Donnell for the solicitor objected again on the basis that the evidence was not in reply to the evidence of Mr Hardman. The client, however, submitted that the solicitor ought to have foreseen that the real issue was what would be an award on a taxation.

(xi) Ruling to admit Mr Travers’ evidence in reply on 7 January 2013

79. When the Court resumed on 7 January 2013, argument on the admissibility of Mr Travers’ report was completed and the Master delivered his ruling. His ex tempore reasons for admitting the report were as follows:

…the issue for determination is whether the report of Mr Travers, which has been tendered by the plaintiff in her case in reply is properly admissible in reply. I’ve come to the conclusion that the report is admissible and I propose to admit it. I’ll give brief reasons now for that conclusion and if on reflection I think it’s necessary or desirable to do so I’ll give reasons of greater length in due course. The issue arises in circumstances where the plaintiff in her case called some expert evidence directed to the issue of whether the amount the defendant was entitled to charge the plaintiff under the fees agreement or fees agreements, which are in contention in the matter, came to a total in excess of what the defendant would have been entitled to charge the plaintiff in the absence of those fees agreements.

I’m satisfied that had there been no such fees agreements the defendant would have been entitled to charge the plaintiff an amount for provisional costs calculated in accordance with the scale under the then Supreme Court rules, which had there been any dispute between the plaintiff and the defendant about quantum could have been at the plaintiff’s request taxed by the registrar of this Court. Such a taxation I recognise would have been conducted on what’s been called a “solicitor and own client basis” which involves a more generous approach to taxation than that which is applied in to costs recoverable, pursuant to an order of the court from another party. That exercise being conducted as between party and party in a more restricted manner.

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In the defendant’s case evidence was called from Mr Hardman, an expert in legal costing, but an expert based in Sydney whose principal experience has been in costing in New South Wales with somewhat less experience of costing in this territory. Mr Hardman has given evidence in the report …in which he expresses an opinion as to how much a solicitor is likely to have charged a client in the absence of the fees agreement for the work done by the defendant on behalf of the plaintiff which has led to these proceedings.

But Mr Hardman has not expressed an opinion as to what amount might have been allowed had a dispute arisen between the plaintiff and defendant which had been needed to be resolved by taxation by the Registrar of the court under the system, under legislation which was applicable at the time, which involved both the Legal Practitioners Act 1970, since repealed and replaced by the Legal Profession Act 2006, and also the Supreme Court Rules, since repealed and replaced by the Court Procedures Rules 2006.

I am satisfied that the proper comparison in order for the court to arrive at a view as to whether there is any difference, and if so, what that difference is, between legal costs recoverable by the defendant from the plaintiff under the fees agreements, and the legal costs which would have been recoverable by the defendant from the plaintiff in the absence of those fees agreements is a comparison between the amount, in fact, charged by the defendant and the amount which, in the event of a dispute, would have been taxed by the Registrar of this court on taxation of a detailed bill on a solicitor and own-client basis.

I should say that I am also satisfied that at the time when Mr Hardman was qualified and when he prepared his report and gave his evidence it ought to have been apparent to those instructing him that this was the appropriate comparison. Having regard to the evidence he has given, it is appropriate that the plaintiff be given the opportunity to call evidence in response to it.

The legal costing expert originally qualified by the plaintiff, Mr Michael Scott, died after giving his evidence in the plaintiff’s case and in the circumstances it was unavoidable that the plaintiff would need to identify and qualify another expert. And in those circumstances Mr Travers was brought into the matter and has reported and given some evidence. For those reasons I’m satisfied that his report is admissible and it will be admitted into evidence.

(xii) Ruling on 7 January 2013 refusing the solicitor’s application for leave to obtain an expert report in reply to Mr Travers’ report

80. Following the ruling on Mr Travers’ report, the solicitor then sought leave to obtain an expert report in reply to Mr Travers’ evidence, submitting that neither Mr Scott nor Mr Hardman had given an opinion on the issue of the amount that the Registrar of the Court would have determined had there been a taxation of a detailed bill of costs on a solicitor/client basis. However, that application was refused on 7 January 2013 with the Master ruling that:

I think frankly, Mr O’Donnell, it’s too late in the piece to allow that. One of the considerations that I must have regard to – it would be unfortunate if the parties to a particular piece of litigation were adversely affected by my impending retirement and I don’t propose to apply that as a factor, but there must be some finality to litigation, and it’s now apparent that – I mean, it may well be that all along both parties have said this is a question of principle where the money was so much secondary as to be almost irrelevant, but it does seem to be relevant regardless of what approach of the parties to this litigation to give consideration to the workload of the court generally and the interests of other parties to have their cases heard and determined, and that, I think, is a – well, it’s now apparent that the maximum difference between what was it chargeable pursuant to the fees agreements and what was recovery by the solicitor in the absence of any fees agreements is a relatively modest amount and I just can’t see that it justifies the further time and expense which would be involved in it, at this late stage, qualifying a further expert, as yet unidentified, [whose] opinion it inevitably follows is unknown and may not indeed turn out to be at odds with that of Mr Travers.

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Qualifying such an expert at this late stage in the proceedings, I would refuse the application for – it’s really an application for an adjournment of the close of this evidence, isn’t it, in order to adduce further evidence, and I refuse that.

(d) Alleged apprehension of bias

(i) Relevant principles

81. It is necessary to address the issue of apprehended bias before embarking upon a consideration of the merits of the other grounds of appeal: Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd [2006] HCA 55; (2006) 229 CLR 577 at 581 [2] (Gummow ACJ), 611 [117] (Kirby and Crennan JJ); Royal Guardian Mortgage Management Pty Ltd v Nguyen [2016] NSWCA 88; (2016) 332 ALR 128 (Royal Guardian) at 130–131 [9]–[10] (Basten JA).

82. The test for determining whether a judge is disqualified by reason of the appearance of bias, allegedly here pre-judgment, is “whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide”: Michael Wilson & Partners Ltd v Nicholls [2011] HCA 48; (2011) 244 CLR 427 (Wilson) at 437 [31] (Gummow A-CJ, Hayne, Crennan and Bell JJ). Allegations of apprehended bias must be firmly established: Re Minister for Immigration and Multicultural Affairs; Ex parte Epeabaka [2001] HCA 23; (2001) 206 CLR 128 at 135–136 [20] (approving R v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546 at 553–554).

83. In this regard, the hypothetical lay observer, while not a lawyer, is not taken to be uninformed or uninstructed about the law or ordinary judicial practice: Johnson v Johnson [2000] HCA 48; (2000) 201 CLR 488 (Johnson) at 493 [13] (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ). Such a person may be expected to have taken the trouble to inform themselves of the basic considerations or context relevant to making a fair judgment, and is taken to be neither complacent nor unduly sensitive or suspicious: British American Tobacco Australia Services Ltd v Laurie [2011] HCA 2; (2011) 242 CLR 283 at 306 [47]; Johnson at 508–509 [53].

84. Two steps must be addressed in considering an application for disqualification. As Gleeson CJ, McHugh, Gummow and Hayne JJ held in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63 (Ebner) at 345 [8]:

First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. The bare assertion that a judge (or juror) has an “interest” in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, is articulated. Only then can the reasonableness of the asserted apprehension of bias be assessed.

(See also Wilson at 445 [63].)

(ii) The Disqualification Judgment

85. The solicitor argued before the Master that there were a number of decisions and actions of the Master during the course of the hearing which cumulatively gave rise to an apprehension of bias, including:

(a) the decision that evidence in chief be given orally rather than on affidavit;

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(b) the decision that an amount of about $21,000.00 held by the solicitor in her trust account should be paid out to the client;

(c) the dismissal of an application by the solicitor for security for costs;

(d) the decision to allow counsel for the client to reopen the client’s case after he had told the court it was closed, rather than permitting the solicitor to pursue at that point a submission that there was no case to answer, at least on the issue as to whether the agreement or agreements between the parties as to costs had been fair and reasonable; and

(e) the suggestion by the Master to counsel for the client that he might wish to consider calling expert evidence as to the difference, if any, between the costs charged under the agreements and the costs which would have been payable at scale.

(see Disqualification judgment at [19])

86. In refusing the application, the Master considered that counsel for the solicitor “had identified a number of events during the trial to date with which his client was dissatisfied, but did not spell out the logical connection between my various rulings on decisions and the issues to be determined in relation to which either party or a fair-minded lay observer ‘would attribute a level of prejudgment warranting recusal’.” (Disqualification Judgment at [26]). Nonetheless, his Honour went on to consider whether the events on which the practitioner relied either individually or cumulatively might reasonably give rise to an apprehension of bias. He concluded that they did not for the following reasons:

28. A number of the matters about which the defendant complains involve interlocutory decisions which could have been, but were not, the subject of appeal. 

29. The major complaint would appear to be as to my allowing the plaintiff to reopen and call further evidence after her counsel had stated in open court that (with the exception of certain documents which he expected to tender during cross-examination in the defendant’s case), the plaintiff’s case was closed. This was not an interlocutory decision which could have been the subject of immediate appeal. Depending upon the final orders in the case, my allowing the plaintiff to re-open and call further evidence at that point will be available as a ground of appeal. I cannot, however, see my decision in that regard as demonstrating prejudgment as to the issues to be determined at the conclusion of the trial.

30. Senior counsel for the defendant did not seriously suggest that any of the first three matters which he relied upon were capable individually of demonstrating bias. It does not seem to me that, considered cumulatively, the totality of the complaints made on behalf of the defendant can be seen as doing so.

31. There is a further reason why I would be reluctant to disqualify myself at this time. We are sixteen days into the hearing. The plaintiff has been represented by solicitors and counsel for the whole of that time. For the last nine days the defendant has been represented by Mr Toomey of Queen’s Counsel. The amount wasted in costs if I were to disqualify myself would scarcely bear contemplation. In the absence of agreement between the parties with a view to shortening the matter, it would be necessary for the hearing of the action to commence afresh before another judicial officer. The court time wasted, when the court is under-resourced and there is a significant delay in obtaining hearing dates, would be deplorable. Of course the waste of court time and of costs on both sides could not stand in the way of my ordering my disqualification if I were persuaded that apprehended bias had been established, but fortunately for the reasons I have given, I am not. The application by the defendant for my disqualification fails.

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(iii) Did the Master err in failing to recuse himself?

87. Judges frequently take an active part in the conduct of cases before them; indeed, principles of case management and the overarching purpose of facilitating the just resolution of disputes requires no less: see Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 (Aon Risk) at [113] 217 (Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ); Galea v Galea (1990) 19 NSWLR 263 (Galea) at 282 (Kirby ACJ); see also, for example, Federal Court of Australia Act 1976 (Cth) ss 37M, 37P and the Court Procedures Act 2004 (ACT) s 5A (which was reflected in r 21 of the Court Procedures Rules at the time of the relevant events). Moreover, in the case of a judge sitting alone in a civil trial, as opposed to sitting with a jury, “…it is conventionally inferred that a trained judicial officer, who has to find the facts himself or herself, will be more readily able to correct and allow for preliminary opinions formed before the final decision is reached”: Galea at 281 (Kirby A-CJ). In this regard, as Kirby A-CJ also said in Galea, there has been “growing appreciation that a silent judge may sometimesoccasion an injustice by failing to reveal opinions which the party affectedthen has no opportunity to correct or modify”: Galea at 282 (Kirby A-CJ). These are matters of which we consider a reasonably informed bystander would be aware.

88. Nonetheless, there are circumstances in which a judge’s intervention in a case is excessive so as to give rise to an apprehension of bias. Such an apprehension may exist where the judge appears by reason of the interventions to depart from the neutrality required of her or him and instead to appear to have closed her or his mind to further persuasion by assuming the role of an advocate for a party. In such a case, the logical connection to which the High Court referred in Ebner exists between the resolution of the issues in the matter and the appearance of a mind closed to persuasion by reason of the judge’s conduct. An example is where a judge goes beyond appropriate questioning or examination of a witness and takes such a role in the questioning or examination that she or he “descends into the arena and is liable to have his vision clouded by the dust of the conflict”: Yuill v Yuill [1945] P 15 at 20; [1945] 1 All ER 183 at 189 (Lorde Greene MR); see also Burwood Municipal Council v Harvey (1995) 86 LGERA 389; Royal Guardian at 132 [16]–[18] (Basten JA) (but noting his Honour’s reservations as to the unreality of the metaphor)) and 157–160 [161]–[172] [161] 157 - [172] 160 (Ward JA); and more generally, Tarrant J, Disqualification for Bias (Federation Press, 2012) 194-203. Such cases are, however, rare: Royal Guardian at 132 [16] (Basten JA); R v T, WA [2014] SASFC 3; (2014) 118 SASR 382 (R v T, WA) at [39] (Kourakis CJ).

89. Adverse rulings do not in themselves give rise to an apprehension of bias: cf the grounds relied upon by the solicitor at [85](a), (b) and (c) above. The only issue seriously put is whether such an apprehension could arise by reason of the two particular occasions in which the Master is said to have inappropriately intervened in the conduct of the case at [85](d) and (e) above. First, the solicitor relied upon the Master raising on 10 June 2010 after counsel for the client had said that his viva voce evidence was concluded, the question of how he was to be satisfied that the agreements were disadvantageous to the client and granting leave to the client to re-open should she wish to lead that evidence when the trial resumed. The relevant passages are quoted at [48]-[49] above.

90. Secondly, the solicitor relied upon the passage on 20 September 2011 when the trial resumed as follows:

MS RYAN: …there is a matter that I wish to address further and that relates to – and I presume my friend is going on now with his case and if that’s the case that would be the appropriate time. On the last occasion [i.e.

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10 June 2010] there – Mr Hausfeld said that he had finished his viva voce evidence and save that he wanted to tender in cross-examination some documents.

HIS HONOUR: He did say that, yes.

MS RYAN: Yes.

HIS HONOUR: But I’m not going to hold him to that. It’s not as though – we haven’t got into your case yet, we’re still in the plaintiff’s case. He hasn’t actually closed his case.

MS RYAN: Well that’s an issue upon which I wish to address you and it’s an issue that---

HIS HONOUR: Well even if he had, why wouldn’t I let him open again?

MS RYAN: Because it’s my submission that it’s highly unusual to allow the opening of a case in the circumstances where the current situation. And the rules of evidence on the reopening of the case after the closure of evidence by a party where has been sought to adduce evidence, are purely formal, technical and non-contentious matters. …

(emphasis added)

91. With respect to the passages relied upon at the hearing on 10 June 2010, in our view a reasonably informed lay observer would consider that the Master was doing no more than voicing concerns that he had about the client’s case in line with the approach which a judge may legitimately take in a civil trial (see [87] above). Furthermore, leave to re-open was granted on 10 June 2010 in circumstances where:

(a) the client had only just closed his case and the solicitor had not opened her case;

(b) the Master had alerted the client to a possible difficulty that he perceived in her case;

(c) that possible difficulty was confirmed by the solicitor making it clear that she did not concede that the existence of the discrepancy between the fees in fact charged under the 1999 and 2002 costs agreements were greater than those that would have been charged according to scale;

(d) the Master plainly intended no more than to give the client the opportunity to address that concern through the leading of further evidence;

(e) the trial had to be adjourned in any event, as a consequence of which the provision of that opportunity would not interrupt the trial; and

(f) there was no apparent prejudice to the solicitor in the circumstances.

92. In the passage relied on by the solicitor quoted above relating to the hearing on 20 September 2011, the Master has correctly stated that leave to re-open had already been granted on the prior occasion. Further, in posing the question “why wouldn’t I let him open again?” even if the client had closed her case, the Master did no more than give the solicitor the opportunity to persuade him otherwise.

93. Contrary to the solicitor’s assertions, nothing in those exchanges in our view would lead a fair-minded observer to “reasonably apprehend that the Master might not bring an impartial and unprejudiced mind to the resolution of the matter”. The Master indicated no preference

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for a substantive outcome; nor could the exchanges give the impression that the Master was partisan. Applying the principles in Ebner, there was no logical connection between the conduct complained of by the Master and the feared deviation from the course of deciding the case on its merits. The complaint is ultimately about whether the ruling permitting the client to reopen was fair, which is not the same as a complaint of apprehended bias. In this regard, the following passage in the reasons of Gaudron ACJ, Gummow, Kirby and Hayne JJ in RPS v R [2000] HCA 3; (2000) 199 CLR 620 at 625 [11] is apt to apply equally to the present case:

The appellant's contention was cast in terms of apparent bias but it was not clear exactly what was meant by this. In particular, it was not clear whether it was being suggested that a fair-minded observer would have concluded that the judge had predetermined some issue. And, if that was what was being suggested, it was far from clear what issue or issues that would fall for decision by the judge (as opposed to the jury) would have appeared to have been prejudged. When pressed on this aspect of the matter, counsel for the appellant suggested that the trial judge had been antagonistic to counsel who had appeared for the appellant and that the conduct of the trial generally tended to undermine the defence case and bolster that of the Crown. But these are not complaints of bias or the appearance of bias; they amount to a complaint that the conduct of the trial was unfair. That is a radically different complaint and it is wrong to seek to apply tests developed in connection with questions of apparent bias in deciding whether the trial was fair. That question will turn largely on whether the accused has had a proper opportunity to advance his or her defence to the charge.

(See also Royal Guardian at 133 [20] (Basten JA) 157–160 [159]–[172] (Ward JA); R v T,WA at [40] (Kourakis CJ)).

94. As such, the interventions complained of do not give rise to apprehended bias and should more properly be considered as part of the unfair trial ground: cf Royal Guardian.

(e) Alleged unfairness in the conduct of the trial

(i) The issues

95. The parties were agreed that the only relevance of the costs actually charged, compared with the costs that might, in the opinion of an expert, have been charged on a scale and/or on taxation, was to the question of relief. In particular, it was relevant only to the discretion to declare that the agreement was not binding and, if so, whether the court was in a position to make restorative orders and should do so, or should leave the matter to a taxation. In other words, neither party contended that that issue was relevant to the question of whether or not the agreement was unreasonable or unfair. In our view, that is manifestly correct.

96. The crucial questions on the fair trial ground are whether the client should have been granted leave to re-open to lead evidence of financial disadvantage, and whether the evidence of Mr Travers for the client as to the costs which in his opinion were likely to be recoverable on a taxation was properly characterised as responsive to the evidence of Mr Hardman for the solicitor, or whether it addressed a new issue on which the solicitor ought as a matter of fairness have been permitted to lead expert evidence in response. The solicitor therefore takes issue with the exercise of discretion concerning matters of evidence and procedure during the course of the trial.

(ii) Relevant principles

97. As the client submitted, the relevant principles concerning appellate review of discretionary decisions are well established and are set out in House v R (1936) 55 CLR 499 at 505, namely:

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The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.

98. In this regard, particular caution must be exercised by appellate courts before interfering with judgments concerning matters of practice and procedure: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177.

99. In determining whether a relevant error exists, three points should be made at the outset which are helpfully addressed by Kirby J in Goldsmith v Sandilands [2002] HCA 31; (2002) 76 ALJR 1024 (Goldsmith) (cited by the solicitor in the appeal). (We note that Kirby J dissented from the majority in this judgment, but the principles his Honour espoused were not in issue and are not controversial.)

(a) First, the trial process requires adherence to the principles of procedural fairness. As Kirby J held in Goldsmith at [52], “… the obligation to accord procedures fair to both sides, and to be impartial as between them, are common requirements of the trial process in courts everywhere in this country.”

(b) Secondly, as his Honour explained at [54] in Goldsmith with respect to evidence in reply in relation to the conduct of civil trials, “…each party has its own case. Each is expected, in that case, to tender the entirety of its evidence. Any evidence that is not tendered during the party’s case can then only be received if that party is given leave by the court to reopen its case and to tender items of evidence that were earlier overlooked or that only became relevant as a result of the conduct of the opponent’s case.”

(c) Thirdly, as to the considerations that should inform the exercise of discretion to permit a party to adduce evidence in reply or rebuttal, Kirby J explained that:

57. … civil trials are adversarial and not accusatorial in character. Moreover, in most parts of Australia, civil trials are today normally conducted by a judicial officer sitting alone, without a jury. In such a trial greater latitude is reserved to the trial judge, where leave is necessary, to permit a party to adduce evidence in reply or rebuttal and to admit such evidence, if appropriate, upon condition that an issue that is reopened should be properly but economically explored to conclusion, with both sides having a fair facility to place relevant evidence (especially documentary evidence) before the court before the end of the trial.

58. The guiding principle for the grant or refusal of leave to call evidence in response to the evidence of another party, where this is sought by a party, is, ultimately, what the justice of the case - including procedural fairness - requires. That principle should not become unduly entangled in precedents or procedural rules.

59. Whilst efficiency and economy in the conduct of civil trials are important requirements of the contemporary trial process, those objectives are valid only as they contribute to just outcomes. Once the trial process is under way, rigidity should be avoided, certainly at a time before the evidence has been closed and before the decision foreshadowed or announced. To exclude relevant evidence during a trial, in response to evidence tendered by another party in its case, simply because it could, or should, have been adduced earlier may, in particular circumstances, deny the party

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tendering such evidence the fair opportunity to present its case. It may render that party unjustly hostage to the defective perception, imagination and industry of its legal representatives. This is why a large discretion is reserved to the trial judge in civil trials to admit or reject evidence in rebuttal or reply. In an appeal, the exercise of the judge’s discretion in such matters is subject to the usual restraints upon appellate disturbance of discretionary decisions.

(iii) The grant of leave to re-open on 10 June 2010

100. In our view, there was no unfairness or other error established in the ruling by the Master to grant the client leave to re-open on 10 June 2010.

101. First, there is no dispute that the Master first raised the issue of whether (assuming it were established that the costs agreement was unfair or unreasonable) evidence that the client had suffered financial disadvantage was necessary to demonstrate the utility of the orders sought to set aside the costs agreements. That being so, it was nonetheless apparent from the transcript on 10 June 2010 (quoted at [48] above) that until this point, the client had considered that it was sufficient to rely upon the discrepancy between the fees charged under the costs agreements, on the one hand, and those allowable under the Supreme Court scale, on the other hand. However, the need for evidence on the issue became apparent when the solicitor then made it clear that she did not concede that the amounts under the fees agreement resulted in a higher charge than if she had simply charged under the Supreme Court scale (ibid). Given that the solicitor made it clear at the hearing that the point was not conceded, the evidence which the client sought to lead was plainly relevant on the separate question the subject of the consent orders to the question of discretion to set aside the agreements: see above at [47]–[49].

102. Secondly, that being so, the Master exercised his broad discretion to allow the client to re-open to lead that evidence, should she be so advised. No error or unfairness is apparent in that exercise of discretion for the reasons given, and in the circumstances in which the discretion was exercised as explained, at [91] above.

(iv) The alleged “re-opening” of the client’s case in September 2011

103. The solicitor contended that the question of taxation first arose at the second tranche of the hearing on 19-21 September 2011 and that in permitting the issue to be raised at that point, the Master acted in breach of the rules of procedural fairness. Specifically, based upon the submissions by counsel for the client on those days (relevantly quoted above at [55]-[57]), the solicitor submits that:

The Respondent’s [client’s] counsel, from that point, sought to expand the Respondent’s [client’s] case to include a claim under s 190(1)(a) – a claim he had specifically not opened on. He then proceeded over the next two years, or over 29 further days of hearing, to effectively re-open his case and call three expert witnesses, including an expert by the name of Ronald Travers…

The Master’s decision on 20 September 2011, which then lead [sic] to the introduction of the three further expert reports over the next two years of litigation, was to effectively grant the Respondent [client] an amendment to the case he opened with and to add a totally new claim, with brand new issues. For example, those issues included: what would be the basis for determining any amount payable under s 191(1)(a), and how would that amount be calculated.

104. In our view, those submissions mischaracterise what occurred at the trial.

105. First, we have already observed that much of the delay and wasted time and costs is attributable to the manner in which the solicitor ran the case including, as we will explain, the

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approach taken by Mr Hardman in the context of the issues in the case. It is wrong to reason backwards, from the ruling to permit the client to re-open her case in the circumstances already outlined, that all of the subsequent “blow-out” in the trial is attributable to that ruling.

106. Secondly, on 20 September 2011, there was no “decision” to re-open but a repetition by the solicitor of her objection to the client being permitted to re-open to lead expert evidence in the circumstances already described which had already been ruled upon.

107. Thirdly, it is clear in the passages from the transcript that on 19 and 21 September 2011 counsel for the client flagged a departure from the approach embodied in the consent orders to split the trial so as to hear and determine first the issues raised by the statement of claim other than the claim for a restorative order under (relevantly) s 191(1)(a) of the LP Act: see above at [55] and [57]. However, it is wrong to say that this raised “a totally new claim”. That claim had been raised by the pleadings from the outset and was expressly averted to by counsel for the client in opening. Notwithstanding that a consideration of that issue was to be deferred under the consent orders, at no stage was that claim abandoned.

108. Fourthly, as the trial progressed, it became apparent that the premise on which the consent orders for a separate question were made was not correct, relevantly, that it was possible to deal with the claim for orders to set aside the costs agreements without the cost and expense of obtaining expert evidence and therefore, depending upon the outcome of the separate question, to defer the calling of any such evidence until the Court came to consider whether to make restorative orders: see Mr Hausfeld’s submission quoted at [57] above. Thus, following the matter being raised by the Master and the solicitor clarifying that she did not concede that the client was charged more under the costs agreements than according to scale, the client understandably took the view that expert evidence was not only relevant to the question of what restorative orders might be made. That evidence was relevant also to demonstrate that there was utility in the orders sought to set aside the costs agreements and therefore to the exercise of the Court’s discretion to do so. That being so, Mr Hausfeld understandably submitted in the passages on which the solicitor relies that the global assessment made by Mr Scott should not only satisfy the Court that the costs agreements are unfair and unreasonable, but also that the agreements should be set aside in the exercise of discretion. In effect, it was his submission that it would also be just and expeditious for the Court to rely upon the global assessments as the basis for restorative orders, and thereby avoid the further costs and delays on a taxation, in accordance with (then) r 21 of the Court Procedures Rules.

109. While it would have been preferable, given the course that the trial took, if the consent orders effectively splitting the trial had been formally vacated, nonetheless the solicitor was clearly on notice from September 2011 (and therefore before commencing her evidence and filing her expert evidence) that the client intended to rely upon her expert evidence in support of the restorative orders sought under s 191(3) of the LP Act, as well as to demonstrate financial disadvantage relevant to the granting of the orders sought to set aside the agreements. In those circumstances, we can see no unfairness in what occurred.

(v) Alleged unfairness in admitting the evidence of Mr Travers and not permitting the solicitor the opportunity to lead further expert evidence in reply

110. The critical issue between the parties is whether the evidence of Mr Travers was properly in reply. If so, the next complaint by the solicitor – that she ought to have been permitted to reopen her case to call expert evidence in reply to the evidence in reply – logically falls away.

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111. In our opinion, the evidence of Mr Travers was properly characterised as evidence in reply to Mr Hardman’s expert evidence. It is necessary to start with the evidence of Mr Scott. His reports effectively expressed his opinion as to what was likely to be a reasonable amount of costs which could be recovered. As earlier mentioned, he used a “global” or “broad brush” approach on the basis that the amount in issue did not warrant the costs and expense of preparing a fully itemised bill of costs, which he estimated would cost in the order of $30,000.

112. Mr Hardman’s fully itemised bills of costs, allegedly prepared in accordance with the court scale and the 1999 and 2002 costs agreements, were plainly intended to respond to Mr Scott’s report by providing the detail that Mr Scott’s report considered would be too expensive to prepare. However, as counsel for the client submitted, the bills of costs prepared by Mr Hardman were in effect draft bills of costs which a solicitor might submit for a taxation. They did not properly address Mr Scott’s evidence as to what was likely to be a reasonable amount allowed in costs for the matter. It was therefore misconceived as it could show, at best, the maximum that the solicitor could hope to recover on the most optimistic view of the solicitor’s bill of costs and was therefore unlikely to be given any weight on whether, if the costs agreements were unfair or unreasonable, the client had in fact suffered any loss as a consequence. On that basis, it is understandable that the client responded to Mr Hardman’s report with expert evidence which addressed the extent to which the items included in the draft bills of costs prepared by Mr Hardman might be allowed on a solicitor/own client taxation. Only, therefore, by considering what might be allowable on a taxation could the bills of costs be said in any relevant sense to provide a means of measuring the alleged loss consequential on any breach of s 191(1) of the LP Act. As such, the evidence of Mr Travers is properly characterised as evidence in reply to Mr Hardman’s evidence.

113. In this regard, we also agree with the client’s submission that, in the event that the costs agreements were not set aside, the disadvantage suffered by the client could only have been the denial of access to an assessment of costs owing to the solicitor on a taxation. As such, it necessarily follows, as the client also submitted, that the relevant comparison for the purposes of determining what might have flowed from the unfair or unreasonable nature of the costs agreements was between the costs payable under the agreements and what would have happened on taxation, matters which the evidence of Mr Scott and Mr Travers addressed. It follows that the solicitor could not have been taken by surprise by this aspect of the client’s case.

114. The decision by the solicitor to lead evidence only as to, in effect, draft bills of costs and not by reference to what might be allowed on a taxation was a forensic decision on her part, as counsel for the client submitted. The solicitor had an opportunity to respond to Mr Scott’s evidence as she saw fit. No more is required in all of the circumstances as a matter of procedural fairness.

115. It follows that we have reached the same view as that expressed in obiter by Refshauge J in dismissing the application to remove the case under r 6201 of the Court Procedures Rules on 21 December 2012 in Vizovitis v Ryan (No 2). In so doing, Refshauge J did not rule upon the objection to the Travers’ report. Nonetheless his Honour indicated his view that Mr Travers’ evidence was properly in reply to the evidence of Mr Hardman called by the solicitor, being directed to correcting the misconception apparent in Mr Hardman’s approach and properly assessing costs at scale in accordance with law. Specifically his Honour observed that:

14. It seems to me that the issue here is complicated because there are misunderstandings about the nature of the way in which the calculation of the costs

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payable by a client to his or her solicitor should be made. The expert called by the defendant [solicitor] has calculated the work done by reference, firstly, to the cost agreements and, secondly, by the scale set out in sch 4 of the Court Procedures Rules. 

15. There are clearly two ways to interpret that scale. One way is to simply look at the descriptor of the item and the quantum assigned to it and add up all those pieces of work that fit within the descriptor and multiply that number by the quantum that is assigned to that descriptor. It is my view that that is not an appropriate application of the scale, because there are a number of items where a discretion — an assessment or value judgement — is required to be applied to the item. Even where an express indication is shown in the item, the item nevertheless has to be interpreted in accordance with the law applying to the scale. 

16. It seems to me that the evidence that is sought to be led in reply is the kind of evidence that would show the way in which the Courts in this jurisdiction have interpreted the application of the scale to the work that is done by lawyers so that, when a scale charge is made, the scale is applied in accordance with that law. 

17. The defendant’s [solicitor’s] position is somewhat different. The defendant [solicitor] says that the scale is not to be interpreted in that way, but that one simply adds up the items and multiplies it by the quantum that is assigned to the item. It is not appropriate for me to make a final finding on that matter, but I am inclined not to prefer the approach suggested by the defendant [solicitor]. 

116. Refshauge J also indicated that he did not consider sound the arguments by the solicitor that she would be prejudiced if Travers’ evidence were admitted:

18. The defendant [solicitor] has indicated that, were the evidence to be admitted in this way, the defendant would be severely prejudiced by the adducing of the evidence because she would be unable to adduce evidence that was contrary to, or that might rebut, that evidence, because the material is being admitted in reply.

19. It seems to me that there are two answers to that. The first is that the defendant has chosen to assess the work done by reference to the scale and, in doing so, has to be taken to have understood that the scale is not a mathematical formula but is a legal document which has application and brings with it the construction that the law has placed on the items, the items that are allowable and the way in which they are allowable in the scale. 

20. There are many texts and, indeed, a very large loose leaf service which sets out the law applying to the scales, and I would be very surprised if an expert of the kind that Mr Hardman (the expert retained by the defendant) appears to be did not apply that law when assessing the application of the scale to the work that was done, and when he was providing a calculation of the value of the work for the purposes of the evidence. To take it further, as appears to be suggested by the defendant [solicitor], does not, in my view, take it out of the same realm of evidence as to the proper application of the scale to the issue.

117. We are accordingly satisfied that the solicitor was not denied procedural fairness during the trial.

4. DID THE MASTER ERR IN HOLDING THAT THE 1999 AND 2002 COSTS AGREEMENTS WERE UNFAIR AND UNREASONABLE?

(a) Relevant Legislative Provisions

118. There was no dispute that agreements as to costs between solicitor and client were at the relevant time regulated by the LP Act effective as at 1 July 2004 to 9January 2005. That Act has since been repealed and replaced by the Legal Profession Act 2006 (ACT). However, as the Master held at [6], the earlier Act continues to apply in respect of agreements as to

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costs made before the 2006 Act came into force. Nor was it in issue that, while the 1937 Rules have since been replaced by the Court Procedures Rules, the 1937 Rules continue to apply to legal services provided at the time that they were in force.

119. Section 190 of the LP Act read at the relevant time:

190 Agreement as to costs(1) The preceding provisions of this part, other than [ss] 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) A 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 amount 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 an 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.

[emphasis added]

120. Section 190(1) has the effect of displacing the regime for solicitor/client taxation by a Registrar of the Court where a costs agreement that complies with it is in force. Section 191, however, provides that a costs agreement may be set aside where the agreement is unfair or unreasonable. Section 191 provided at the relevant time that:

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 payable under the agreement.

(3) Where, under subsection (1), the court declares that an 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 not 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.

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121. Under s 191, therefore, it is necessary first for the Court to consider whether the costs agreement is unfair or unreasonable. If satisfied that it is unfair and unreasonable, the Court has a discretion to declare that the agreement is not binding upon the parties. If the Court makes such a declaration, then the Court may itself make orders restoring the parties to the position in which they would have been if the agreement had not been made (s 191(3)(a)), or alternatively Pt 15 of the LP Act applies as if the agreement had not been made, that is, the issue of costs is to be determined on a taxation.

122. Finally, we note that it is questionable whether a costs agreement that purported to increase the amount of the costs payable for work already undertaken by the solicitor pursuant to an earlier costs agreement is a costs agreement for the purposes of s 190(2), or whether the reference to “work … already undertaken” refers only to work already undertaken at a time when no costs agreement under s 190 was in force. However, that is a question for another day. This case raised only issues of fairness and reasonableness under s 191 of the LP Act and the client conceded in opening before the Master that both the 1999 costs agreement and the 2002 costs agreement fell within the meaning of “costs agreement” in s 190 of the LP Act, subject to the questions of fairness and reasonableness.

(b) Relevant considerations to determining whether the costs agreements were unfair or unreasonable

123. The relevant principles and considerations may be summarised as follows.

124. First, the onus of demonstrating that the agreements were fair and reasonable lies upon the solicitor: Passey at [35] (following Athanasiou v Ward Keller Pty Ltd [1998] NTSC 27; (1998) 122 NTR 22 (Athanasiou)). Contrary to the solicitor’s submissions in reply, we can see no error in his Honour so holding. The principle is well established by authority: see e.g. In the marriage of S; Re S and P (1982) 66 FLR 315 (Re S and P); Weiss v Barker Gosling (1993) 114 FLR 223 (Weiss) at 257 (Fogarty J); Re Budziszewski and Silver’s Bill of Costs (1981) FLC 91-038 (Silver’s Bill of Costs) (Baker J). As Higgins J explained in Passey [35] (quoted with approval by the Master in the present case at [389]), the imposition of the burden of proof upon the solicitor both in respect of fairness and reasonableness is consistent with the fiduciary duty which the law imposes on solicitors to deal honestly and fairly with their clients. Furthermore, as Higgins J also held in Passey at [29], the fiduciary duty extends to the making of any retainer agreement and to its terms.

125. Secondly, as counsel for the client submitted, it is sufficient to establish that a costs agreement is not fair or that it is not reasonable in order to enliven the discretion to declare that the agreement is not binding. In other words, it is not necessary to establish that it is both unfair and unreasonable. This is not to deny that the concepts of fairness and reasonableness may overlap and, in particular, as the Master held in this case, certain features of a costs agreement indicative of unfairness may also be relevant to the question of whether the costs agreement is unreasonable.

126. Thirdly, as Mildren J explained with respect to the concept of what is “fair and reasonable” in Athanasiou at 30:

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 excessive the agreement is not reasonable.

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127. It follows that the question of whether a costs agreement is fair and reasonable must be capable of determination at the time at which the costs agreement is entered into: see, e.g. Re Stuart; Ex parte Cathcart [1893] 2 QB 201 at 204-205; and Weiss at 254. The question of whether charges were in fact rendered retrospectively is not therefore relevant to the question of whether the agreements were unfair or unreasonable, as the client submitted in supplementary submissions filed after the hearing of the appeal.

128. Fourthly, in considering what is meant by the requirement of “fairness” at common law, Fogarty J in Weiss at 255–256 carefully reviewed the authorities, explaining as follows:

For example, in Stedman v Collett (1854) 17 Beav 608; 51 ER 1171 the reference at 614-615; 1173-1174 is to the transaction being "open and fair and without pressure"; in Re Stuart; Ex parte Cathcart, Lord Esher (at 204) … referred to fairness as the requirement that the “solicitor makes an agreement with a client who fully understands and appreciates that agreement”; in Clare v Joseph [1907] 2 KB 369 at 376 the reference is to the contract being made "under circumstances that precluded any suspicion of an improper attempt on the solicitor's part to benefit himself at his client's expense”; in Bear v Waxman [[1912] VLR 292] Cussen J (at 301-302) referred to it as being that “his client was not under the influence of the pressure arising from the relation of solicitor and client, but was acting either by good advice, or on the dictates of his own judgment, with every opportunity of exercising it properly, from his own good sense and intelligence, with a sufficient capacity and knowledge of business”; in Emeritus Pty Ltd v Mobbs (1991) NSW ConvR 55-588 the reference at 59,319 by Studdert J of the Supreme Court of New South Wales is to the requirement that the solicitor must not “take advantage of the relationship between his client and himself or receive any benefit from agreement into which the client has been induced to enter by reason of his reliance upon the solicitor”; in New South Wales Crime Commission v Fleming (1991) NSWLR 116 at 123 the reference is to “improper advantage of their clients”.

The cases also refer to the significance of the difference between scale and the agreement being explained to the client: see, eg, Ilic v Radin (unreported, Supreme Court, NSW, Finlay J, 18 December 1991), and also Milutin v Stoddart & Co (unreported, Supreme Court, WA, Seaman J, 18 February 1992) at 32 where it was said "it is not enough, in my view, for him to tell the client that the costs payable under the agreement might exceed the statutory scale, or that some other lawyer might provide the legal services involved for less".

129. Similarly, the Full Court of the Family Court (Evatt CJ and Fogarty J) in Re S and P at 328 (in a passage which Fogarty J in Weiss considered still states the requirement) said as follows:

The ultimate question is whether the solicitor affirmatively establishes that the contract was entered into by the client freely, making an independent and informed estimate of the matter. The essential nature of the proposed agreement and the degree and impact of its difference from the prescribed fees must be explained and understood and accepted. It must be a real and genuine choice, that is, a free exercise of an independent mind.

130. This does not mean that it is necessary to show that the client had independent advice at the time of entering the agreement: Re S and P at 327 and Weiss at 256 and 257.

131. It follows that the solicitor’s submission that the duty to explain the terms of a costs agreement and ensure that they are understood by the client arises only with respect to unusual terms simply cannot stand against the weight of authority. The solicitor’s submission in this regard fundamentally understates the special and heightened responsibilities of solicitors to their clients. Nor, contrary to the solicitor’s submission, can the decisions of the Family Court in matters such as Weiss and Silver’s Bill of Costs be distinguished on the ground that they “involved a very much more prescribed regime for the enforcement of costs agreements under the Family Court Rules” and that the Master“ was wrong to use these cases and to, as he did, adopt the analysis of those cases to the circumstances of the case before him being one under s 191(1)(b) of the LP [Act]”. Rather, as the client submits, the

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particular requirements prescribed by the Family Court Rules did not determine the decisions in those cases which also applied the common law, with Fogarty J specifically rejecting in Weiss that the Family Law Rules were exhaustive and excluded any common law requirement that a costs agreement be fair and reasonable (applying the decision of the Full Court of the Family Court in Sheehan and Sheehan (1991) FLC 92-221 at p. 78,530): Weiss at 235-236. For completeness, we note that Weiss was not followed in Twigg v Rutherford (1996) 133 FLR 46 but on a different point, namely the power to dispense with the relevant Family Court Rules.

(c) Principles governing when an appellate court is entitled to set aside factual findings at trial

132. The principles governing the circumstances in which an appellate court is entitled to set aside the findings made by the primary judge are well settled and were summarised by Perry J in RailPro Services Pty Ltd v Flavel [2015] FCA 504 at [78] as follows, in a passage recently approved in Volanne Pty Ltd v International Consulting and Business Management (ICBM) Pty Ltd [2016] ACTCA 49 at [43]:

(a) A fundamental distinction is drawn between the approach of an appellate court in two different classes of cases - the drawing of inferences from admitted facts or facts found by the trial judge, on the one hand, and findings which depend upon the view taken of conflicting oral testimony, on the other hand (Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 (Fox v Percy) at 146 [88] (McHugh J); Brunskill v Sovereign Marine & General Insurance Co Ltd (1985) 59 ALJR 842 at 844; 62 ALR 53 at 56-57 (the Court); State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) [1999] HCA 3; (1999) 73 ALJR 306; 160 ALR 588 (SRA v Earthline) at [93] (Kirby J)). … The assessment of a witness’ state of mind has also been said to fall within the second category of cases: Bendigo [Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500] at 544 [141] (Heydon J) (citing with approval Nocton v Lord Ashburton [1914] AC 932 at 957 (Viscount Haldane LC)).

(b) With respect to cases falling within the first class, the principle is that expressed by Gibbs ACJ, Jacobs and Murphy JJ in Warren v Coombes (1979) 142 CLR 531 (Warren v Coombes) at 551, namely:

…the established principles are, we think, that in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge, but, once having reached its own conclusion, will not shrink from giving effect to it.

In so holding, the High Court rejected the approach of judicial restraint adopted in some of the authorities which required that error be demonstrated in the decision of the primary judge before the appellate court would reverse findings of fact or inferences from fact provided that both inferences were open: see further the detailed and helpful analysis of the authorities by Dodds-Streeton JA in Kelso v Tatiara Meat Co Pty Ltd [2007] VSCA 267; (2007) 17 VR 592 (Kelso) at [65]–[95] (with whose reasons the remainder of the Court agreed).

(a) This trend away from strict judicial restraint was continued by the decision in Fox v Percy which concerned the second class of cases. In Fox v Percy, the majority held that, while account must be taken of the advantages enjoyed by the primary judge in resolving conflicting oral evidence, the mere fact that she or he resolved the conflict by findings as to credit does not immunise the conclusion from challenge. The approach to be applied where such findings are challenged on an appeal by way of rehearing is explained by Gleeson CJ, Gummow and Kirby JJ in Fox v Percy at 128 [28]–[29] as follows:

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In particular cases incontrovertible facts or uncontested testimony will demonstrate that the trial judge’s conclusions are erroneous, even when they appear to be, or are stated to be, based on credibility findings.

… In some, quite rare, cases, although the facts fall short of being ‘incontrovertible’, an appellate conclusion may be reached that the decision at trial is ‘glaringly improbable’ or ‘contrary to compelling inferences’ in the case. In such circumstances, the appellate court is not relieved of its statutory functions by the fact that the trial judge has, expressly or implicitly, reached a conclusion influenced by an opinion concerning the credibility of witnesses. In such a case, making all due allowances for the advantages available to the trial judge, the appellate court must ‘not shrink from giving effect to’ its own conclusion. Finality in litigation is highly desirable. Litigation beyond a trial is costly and usually upsetting. But in every appeal by way of rehearing, a judgment of the appellate court is required both on the facts and the law. It is not forbidden (nor in the face of the statutory requirement could it be) by ritual incantation about witness credibility, nor by judicial reference to the desirability of finality in litigation or reminders of the general advantages of the trial over the appellate process.

(Emphasis added.)

…

(b) It may also be the case that appealable error exists by reason of a failure at first instance to determine the case upon a proper consideration of the real strength of the body of evidence presented by the losing party and the basis upon which the evidence of a witness was found unreliable is too fragile or slight: SRA v Earthline at [63]-[64] (Gaudron, Gummow and Hayne JJ), [93]-[94] (Kirby J) and [148]-[155] (Callinan J); cf e.g. Hasler v Singtel Optus Pty Ltd [2014] NSWCA 266; (2014) 311 ALR 494 (Hasler) at 525 [157] (Leeming J (with whose reasons the remainder of the Court agreed)).

(c) Underpinning the authorities as to the second class of cases is a continuing appreciation of the advantage which the primary judge may enjoy despite the availability today of complete transcripts of evidence and argument, the trend to giving evidence in chief by affidavit, and a growing understanding of the fallibility of the judicial evaluation of credibility from the appearance and demeanour of witnesses, particularly in the stressful environment of the courtroom and in an increasingly culturally diverse society…

(d) A finding that oral testimony is disbelieved will almost invariably be express. However, it cannot be assumed that every consideration influencing the primary judge’s assessment of credibility, including her or his impressions of the witness, will find expression in the reasons. In discharging the appellate function, account should also be taken for unexpressed considerations and impressions: Fox v Percy at 132 [41] (Gleeson CJ, Gummow and Kirby JJ)….

(e) Finally, the weight to be given to the advantage enjoyed by the primary judge must, of necessity, be affected to some degree by the circumstances of the individual case….

133. In addition, it is important to take into account, as the Master did below, the inevitable impact of the passage of time on the quality of evidence. As, for example, McHugh J explained in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 551 regarding the subconscious impact of the passage of time on the quality of evidence and explaining the reason for the enactment of time limitations:

The enactment of time limitations has been driven by the general perception that “[w]here there is delay the whole quality of justice deteriorates”. Sometimes the deterioration in quality is palpable, as in the case where a crucial witness is dead or an important document has been destroyed. But sometimes, perhaps more often than we realise, the deterioration in quality is not recognisable even by the parties. Prejudice may exist without the parties or anybody else realising that it exists. As the United States Supreme Court

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pointed out in Barker v Wingo, “what has been forgotten can rarely be shown”. So, it must often happen that important, perhaps decisive, evidence has disappeared without anybody now “knowing” that it ever existed. Similarly, it must often happen that time will diminish the significance of a known fact or circumstance because its relationship to the cause of action is no longer as apparent as it was when the cause of action arose. A verdict may appear well based on the evidence given in the proceedings but, if the tribunal of fact had all the evidence concerning the matter, an opposite result may have ensued. The longer the delay in commencing proceedings, the more likely it is that the case will be decided on less evidence than was available to the parties at the time that the cause of action arose.

134. As McLelland CJ in Equity explained in Watson v Foxman and Others (1995) 49 NSWLR 315 at 319:

…human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.

135. To similar effect, Katzmann J stated in Arnautovic & Sutherland t/as Jirsch Sutherland v Cvitanovic (as trustee of the bankrupt estate of Adrian Lawrence Rosee) [2011] FCA 809; (2011) 199 FCR 1 at 20 [73] that:

…In the absence of notes it is, generally speaking, impossible to accurately recall the terms of any conversation six months after it took place. Human memory is notoriously unreliable. As Spigelman CJ recently observed (“Truth and the Law”, The 2011 Sir Maurice Byers Lecture, 26 May 2011):

Witnesses can, without any dissimulation or propensity to lie, confidently assert the truth of conversations, observations and events which did not happen. The plasticity of memory impedes the truth finding process. This is not an uncommon phenomenon[.]

136. With respect to the application of these principles and, in particular, those relating to the circumstances in which an appellate court may properly interfere with factual findings at trial, it is central to keep in mind that this is a case in which there were considerable differences in the accounts given as to what happened between the client and solicitor between the initial instructions in 1995 and the settlement of the personal injury actions in 2003, as the Master held at [341]. This case therefore falls within the second category of cases discussed in the authorities where the Master has been required to resolve conflicting oral evidence. In this regard, the Master found that “[p]robably 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.” (at [341]). The first of these matters in particular is in issue on the appeal. In deciding whether grounds exist for interfering with findings made by the Master between conflicting accounts, the appellate court must give due weight to the Master’s findings as to credit as required by applying the principles outlined above.

(d) The Master’s findings as to the reliability of the evidence of the lay witnesses

137. The Master’s approach to the issue of credit was unexceptional and the reasons for his findings as to the credit and reliability of particular witnesses were carefully explained. The latter is particularly important given the passage of time between judgment and the giving of evidence (notwithstanding that there was no ground of appeal attacking his Honour’s credit findings on this ground).

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138. First, given the time which had passed between the events the subject of contention and the hearing of the evidence, the Master found that he had “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.” (at [343]). As such, his Honour held that “[w]here 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” (at [344]).

139. Secondly, his Honour also took into account that there is a reasonable expectation that solicitors will keep file notes and other written records of such events and conversations, but one would hardly expect lay people to do so (at [343]).

140. Thirdly, the Master held that he had no reason to doubt that the client and her sons were doing their best to give truthful evidence. However, having regard to the fact that they were trying to remember events many years earlier, he found that he might accept their memory in general terms about those events but would have little faith in their recollection of precisely what was said during conversations. That approach is in line with the recognition of the fallibility of human memory over time, discussed in the authorities to which we have referred. In assessing the client’s evidence and that of her sons, his Honour also took into account that witnesses with a vested interest in the outcome may be influenced consciously or unconsciously towards a particular version of events (the Master’s reasons at [346]-[347]).

141. Fourthly, the Master found that he could not accept the solicitor’s account of contentious matters unless it was corroborated by contemporaneous documentary evidence. In this regard the Master did not find the solicitor to be a particularly satisfactory witness. Specifically, at [348]-[350] his Honour found that:

…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 [solicitor] 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 …

Both in her oral evidence and in the manner in which she has conducted the case when unrepresented, the defendant [solicitor] 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.

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.

142. The Master had similarly expressed reservations to a lesser extent about the evidence of the solicitor’s daughter, Ms Warren, recognising how difficult it must be for a solicitor called to give objective evidence in an action to which her mother was a party and was also the principal of the firm where Ms Warren had worked (on and off) for more than twenty years. The Master noted that Ms Warren’s evidence was important in a number of respects, especially her evidence as to the signing of the 2002 costs agreement. In that regard, the

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Master explained that Ms Warren thought that she had made notes at the time, and recalled having seen them in 2005 but that she had not seen them since then; nor did the notes turn up (the Master’s reasons at [352]); nor did the sheet of questions and answers which she said had customarily been provided by her mother to clients when a costs agreement was signed (at [353]). The Master concluded with respect to Ms Warren’s evidence at [354] that:

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.

(e) Was the 1999 costs agreement fair?

(i) The terms of the 1999 costs agreement and circumstances in which it was concluded

143. 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 … (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 at 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.

144. This agreement was sent to the client by post with the covering letter as follows:

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CLAIM FOR COMPENSATION

MOTOR TRAFFIC ACCIDENTS

We enclose herewith 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.

145. Manifestly, the covering letter does not purport to explain any of the terms of the agreement, including that it was intended to apply retrospectively.

146. The Master found that the solicitor’s firm sent the 1999 agreement to the plaintiff and asked her to sign it and return it (at [375]). The client gave evidence that she had received the agreement by mail (the Master’s reasons at [41]). She signed the agreement at her accountant’s office and left it undated. Her signature was witnessed by an accountant in private practice who acted for the Vizovitis family and its business interests (the Master’s reasons at [11]). The client then returned the agreement to the solicitor, who signed and dated it. The solicitor’s signature was witnessed by her daughter, who was working at that time as a clerk at her mother’s firm. (the Master’s reasons at [11]-[13])

147. When asked whether the solicitor had explained the agreement to her before she signed it, the client answered “Not as I can - I can recall” (the Master’s reasons at [41]). This was disputed by the solicitor. While the Master would not have accepted the client’s bare denial given the passage of time if there had been credible contemporaneous evidence that proper advice had been given (at [372]), there was no such evidence. Bearing in mind therefore the Master’s findings as to the weight to be given to the solicitor’s evidence on contested issues in the absence of such material and the fact that the burden of proof lay upon the solicitor to establish that the agreement had been fairly entered into, the Master rejected the solicitor’s account that she had explained the costs agreement to the plaintiff before she sent it out, holding at [375] that:

… there is no documentary support for this and it is denied by the plaintiff [client]. It seems to me more probable that [sic] 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.

(ii) Did the Master err in finding that the 1999 costs agreement was unfair?

148. For the reasons already given at [131] above, the solicitor’s submission that a duty to explain the effect of the costs agreement arises only where it contains unusual terms must be rejected. In the present case, the failure to provide an explanation meant that the 1999 agreement was unfair, as the Master held.

149. First, the intention that the agreement, including the fees, would apply retrospectively (not a usual term in any event) was not express on the face of the agreement. The fact that the higher rate was applied because the solicitor was agreeing to carry the matter until conclusion did not necessarily convey that the rate would apply retrospectively. As the Master found at [398], it was far from clear that clause A of the 1999 costs agreement (quoted at [143] above) was intended to have that effect.

150. Secondly, as the Master found, the solicitor should have explained that the proposed fees were above scale, and in particular should have explained the likely consequences of that in terms of the client’s capacity to recover those costs in the personal injuries matter. That is not to say that the higher fee of $280 per hour for the solicitor was unreasonable, which the Master did not find (despite lengthy submissions made in writing for the solicitor which seemed to assume the contrary). However, the difference between solicitor-and-client costs and party-and-party costs was not explained to the client.

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151. Thirdly, the consequence of entering into the written agreement as to costs, being the loss of the client’s right to have her bill taxed at scale, was not explained.

152. That these aspects of the 1999 costs agreement rendered the agreement unfair accorded with the expert evidence of Mr Scott to whose opinion the Master paid “a considerable degree of respect … having regard to his costing experience in [the ACT]” (the Master’s reasons at [362]).

153. These matters more than suffice to establish:

(a) that the solicitor failed affirmatively to establish that the 1999 agreement was entered into by the client fairly informed of the consequences of doing so; and

(b) that the 1999 agreement should be set aside.

154. Added to this, the other matters relied upon by the Master to find that the solicitor had not established that the agreement was reasonable (the Master’s reasons at [399] and [400]) equally called for explanation by the solicitor.

155. Against this, the solicitor submits that “there were sufficient findings and other evidence to support a conclusion that the Respondent [client] was given an adequate explanation of the effect of the costs agreement, prior to it being signed on 23 March 1999”. However, what is relied upon does not approach “incontrovertible facts” or “uncontested evidence” demonstrating error in the Master’s findings based upon his assessment of how the parties conflicting accounts should be resolved. Nor can it be said that the Master’s findings were “glaringly improbable” or “contrary to compelling inferences”. In our view, the contrary is the case. Ultimately, the difficulty for the solicitor is that her submissions fail to engage with the principles governing the circumstances in which an appellate court should interfere with findings of fact in cases of conflicting oral evidence and effectively seek to re-argue the matter in the manner of a retrial.

156. Nor, even if the credibility findings made against the solicitor were put to one side by reason of the time which elapsed between the giving of evidence and the delivery of judgment, is there any error in the Master’s recognition of the fallibility of human memory over time and the credence which he gave in the circumstances to a written record over human memory. In this case, the Master’s finding that he was not affirmatively satisfied that any explanation of the 1999 agreement was given is more than vindicated by:

(a) the absence of any written record such as a file note of a meeting explaining the effect of the 1999 costs agreement;

(b) the expectation (as the Master found) that solicitors as opposed to lay people will keep file notes and other written records;

(c) the failure by the solicitor to produce the question and answer sheet said to be provided as matter of practice to clients with fee agreements;

(d) the brevity of the covering letter to the client enclosing the 1999 agreement for signing; and

(e) the client’s denial of any such explanation.

157. Finally, it should be emphasised that it was the solicitor’s evidence at trial that the agreements were retrospective and there is no challenge to the Master’s findings that the 1999 and 2002 agreements were intended to apply retrospectively (the Master’s reasons at [398] and [404]). To the extent that the solicitor appeared to resile from that case on the

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appeal, it is not now open to the solicitor to raise a new case. As the client submitted in supplementary written submissions filed after the hearing of the appeal:

The Appellant [solicitor] cannot now seek to deny the retrospectivity of the Costs Agreements. She gave oral evidence confirming it. Moreover, Mr Hardman’s expert evidence, upon which she relies, is built on the assumption of retrospectivity, because his bills of costs apply the hourly rates in the Costs Agreements from the commencements of the matter in 1995. This much was conceded by counsel for the Appellant [solicitor] before the Court.

(f) Was the 2002 costs agreement fair?

(i) The terms of the 2002 costs agreement and circumstances of its entry

158. The 2002 agreement as to costs was in largely identical terms to those in the 1999 agreement. The first two clauses, however, were different and read as follows:

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.

159. Otherwise, aside from its date, 10 December 2002, and a change in the solicitor’s business address, the remainder of the agreement was identical to that in 1999.

160. With respect to the circumstances in which the 2002 agreement was concluded, the Master found at [376]-[377] that:

I find that the plaintiff [client] and the defendant [solicitor] 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.

161. In addition, the Master expressed “considerable misgivings about the capacity of the plaintiff to understand” the questions she was allegedly asked, finding at [377] that:

On the assumption that the questions and answers were as set out by Ms Warren in her affidavit … and Ms Ryan in her affidavit…, 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.

162. With respect to the finding as to the client’s capacity to understand English (also a contested issue at the trial), the Master held at [378]-[379] that:

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.

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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.

163. Nor did the Master consider that the evidence of a translator and interpreter as to what was said in Greek between the client and the interpreter at the trial of the personal injuries claims changed his opinion about the client’s capacity to read, speak and understand English (at [383]). (We also note that the Master held at [382] that this evidence was not admissible in so far as it was sought to be relied on for the purposes of damaging the client’s credit – a ruling which is not the subject of appeal.)

(ii) Did the Master err in holding that the 2002 costs agreement was not fair?

164. The Master held at [402] that he was not satisfied that the solicitor provided the client with an adequate explanation about the terms or effect of the 2002 agreement. In this regard, his Honour held at [403]-[406] that:

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.

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.

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.

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.

165. In line with our findings as to the 1999 agreement, we can see no error in the finding below that it was necessary for the solicitor to take adequate steps to ensure that the client understood that the solicitor intended to apply the 2002 agreement retrospectively to the work already performed by her and the barrister, effectively revoking the 1999 agreement and imposing significantly higher fees (from $280 to $380 per hour). None of that was spelt

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out in the 2002 agreement; indeed as the Master observed, the 1999 agreement was not even referred to in the agreement. The need for a careful and detailed explanation could not be plainer; nor the duty on the solicitor to urge the client to seek independent advice.

166. With respect to the Master’s finding as to the confusion surrounding the expression “barrister and solicitor”, his Honour had earlier held at [373]-[374] that:

…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.

I am inclined to that view by reason of the wording of the agreement. The plaintiff knew that Ms Ryan was a solicitor at [sic] 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.

167. While the solicitor took issue with that finding and asserted that the phraseology was not confusing, submitting that “it is easily understood in the context of the agreement”, that does not obviate the need for the agreement to have been properly explained; nor does it provide a basis for overturning the Master’s finding that it was not in fact understood in the absence of any adequate explanation having been given.

168. Furthermore, while the solicitor takes issue with the Master’s findings as to the client’s capacity to understand English, the primary judge had the advantage not available to this Court of observing the client in the witness box over some period of time, and (as the solicitor accepts) the Master did not overlook the evidence on which the solicitor relies to submit that the client “well understood and could read the agreement she was signing, and … its effect”.

169. The attempt to re-open the findings of the Master on the basis that there was ample evidence to conclude that an adequate explanation was given as to the effect of the 2002 costs agreement based upon Ms Warren’s evidence and the solicitor’s so-called “corroborat[ive]” evidence, fails again to engage with the principles governing the circumstances in which this Court may interfere with findings at trial resolving conflicting accounts: see above at [132]. The solicitor’s submissions impermissibly invite this Court simply to step into the shoes of the Master and reassess afresh the evidence without first identifying a relevant error. Such an approach is not supported by the authorities and does not further the interests of the finality of justice. Equally, the matters set out at [156](a),(b) and (c) above, the Master’s acceptance of the client and her sons as doing their best to tell the truth and their memory in general terms about past events, and the inevitable impact of the passage of time upon the solicitor’s and her daughter’s purported recollections of conversations, would be compelling factors against the Court accepting that the solicitor had discharged her onus of establishing that an adequate explanation was given quite apart from the Master’s findings as to their credit.

(g) Did the Master err in finding that the 1999 and 2002 costs agreements were unreasonable?

170. It is unnecessary to consider whether the Master erred in finding that the agreements were unreasonable, given that we have found no error in the Master’s finding that the 1999 and 2002 costs agreements were unfair. Nonetheless, we would indicate first that we would have

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found no error in any event in the Master’s findings at [398] at [408] that it was unreasonable for the costs agreement to be drafted so as to apply retrospectively to 1995.

171. Nor do we consider that his Honour erred in finding at [399]-[400] and [409] that the lack of clarity as to matters identified in the 1999 and 2002 agreements, including in particular the date from which interest was to run in clause D, would have rendered those agreements unreasonable

172. We also note the following evidence referred to by the Master at [357], [358] and [361]-[362]:

(a) Mr Hatch (a Canberra solicitor called by the client who was experienced in personal injury litigation in the ACT), while not an expert in legal costing, expressed the opinion that the client’s personal injury actions were not particularly complex and that there was no general practice in the legal profession in Canberra of charging a higher rate in such matters where payment of costs was deferred until the claim was finalised.

(b) Mr Bradley (a partner in a Canberra firm) who gave evidence for the solicitor that, while he thought it might be justifiable to charge a higher hourly rate for a difficult and demanding client, he had not done so; nor had he charged a higher rate for plaintiff personal injury matters where costs were deferred;

(c) Mr Scott (to whose evidence, it will be recalled, the Master gave particular weight) considered that the hourly rates were well above the market rate in Canberra at the relevant time.

173. In this regard, evidence of charges provided at scale and of market rates is relevant to an assessment of the reasonableness of the fees. As the Full Court of the Family Court held in Schiliro v Gadens Ridgeway (1995) 121 FLR 322 at 331:

The charges provided under the scale are a primary factor in the process of determining reasonableness. They may represent the starting point but not the finishing point…

Similarly, evidence of market rates or market forces is relevant to that inquiry.

174. Accordingly, we agree with his Honour’s finding that the hourly rates set out in the 2002 agreement were unreasonably high, having regard to:

(a) the nature of the litigation and its complexity (bearing in mind among other things that liability for the client’s personal injuries was conceded);

(b) Mr Travers’ evidence as to the extent of discrepancy between costs calculated under the 2002 agreement and those likely to have been available on a taxation;

(c) the skill and experience of the defendant and her staff; and

(d) fees charged by other firms practising in the same field in Canberra.

175. It follows that we do not consider that there is any basis for interfering with the Master’s findings that the 1999 and 2002 costs agreements were unreasonable in any event.

5. CONCLUSION

176. We have concluded that the Master did not err in any of the respects contended for by the appellant. For these reasons, the appeal must be dismissed with costs.

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I certify that the preceding one hundred and seventy-six [176] numbered paragraphs are a true copy of the Reasons for Judgment of the Court

Associate:

Date:

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