Facing the music of the ACCC’s section 155 notice

23 September, 2019

In the recent decision of Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29, the High Court ruled the Chorley exception, which allows self-represented litigants who are solicitors to recover costs incurred for their professional services in acting for themselves in any litigation, does not extend to barristers and, more broadly, is not part of the common law of Australia.

Background

The respondent, a barrister, was retained by the appellant, an incorporated legal practice, to appear in a family provision matter in the Supreme Court of New South Wales. At the conclusion of the proceedings, a dispute arose between the parties about professional fees, as the appellant paid the respondent only part of her fees.

In the first instance, the respondent sued the appellant for the balance of her fees in the Local Court of New South Wales but was unsuccessful. She then appealed to the Supreme Court of New South Wales where the appellant was ordered to pay the respondent the balance of the respondent’s fees, as well as her costs for both the Local Court and Supreme Court proceedings.

Pursuant to the costs orders, the responded forwarded a memorandum of costs to the appellant, which included costs incurred on her own behalf. The appellant refused to pay the costs claimed for work undertaken by the respondent herself and made an application for assessment of costs. The costs assessor decided in favour of the appellant and rejected the respondent’s claim for the costs of work she had performed herself on the ground that in New South Wales the Chorley exception does not apply to barristers. The respondent was unsuccessful in both her appeal to the Review Panel, and then to the District Court of New South Wales.

The respondent sought judicial review of the District Court decision in the Court of Appeal. The Court of Appeal held that the respondent, as a barrister, was entitled to rely on the Chorley exception as her costs were quantifiable by the same processes as solicitors.

The appellant appealed the decision of the Court of Appeal to the High Court of Australia.

**The Chorley exception**

The general rule is that self-represented litigants are not able to recover costs for any time or work performed in the course of the litigation. However, an exception to this rule, commonly referred to as “the Chorley exception,” is that self-represented litigants who are solicitors may be able to recover their professional costs of acting in the litigation.

The two principal issues determined by the Court was whether the Chorley exception applies to barristers who represent themselves in legal proceedings and, more broadly, whether it should be recognised as part of the common law of Australia.

**The Chorley exception is not part of the common law in Australia**

In the lead judgment of Kiefel CJ, Bell J, Keane J and Gordon J, their Honours determined the Chorley exception should not be recognised as part of the common law of Australia for reasons including the following:

As recognised by the majority in Cachia v Hanes (1994) 179 CLR 403, the Chorley exception is “anomalous” as it does not treat all litigants in the same manner. The exception affords a privilege to solicitors only, which is inconsistent with the principle that all persons are equal before the law. Further, because the exception is “anomalous”, the Court held that it should not be extended, by judicial decision, to apply to barristers.
If self-represented solicitors are permitted to recover costs for work undertaken themselves, there is the possibility a solicitor may profit for his or her participation in the litigation. This is contrary to the principle of costs orders, which are awarded by way of indemnity and not to compensate for lost earnings or reward a litigant’s success.
The Chorley exception is also inconsistent with the statutory definition of “costs” under s 3(1) of the Civil Procedure Act, which is a “means and includes” definition. The “means” part of the definition purports that costs are awarded for professional services actually incurred, and the “includes” part of the definition, which refers to “remuneration”, encompasses remuneration for professional services rendered under a contract for services. “Remuneration” does not cover the concept of payment to a person by himself or herself for services performed by himself or herself. Accordingly, as the definition of “costs” is otherwise exhaustive, it does not allow for self-represented solicitors to recover costs incurred on their own behalf.

What about a solicitor employed by an incorporated legal practice of which they are its sole director and shareholder?

It is well established that where in-house lawyers employed by governments and other agencies represent their employers in legal proceedings, the employer is entitled to recover costs in circumstances where an ordinary party would be so entitled by way of indemnity.

However, as the Court in these proceedings highlighted, there is still a question whether this view would also apply to solicitors employed by an incorporated legal practice of which he or she is its sole director and shareholder. As the Court noted, the resolution of this question may require close consideration of the legislation which provides for incorporation of solicitors’ practices and the intersection of that legislation with the provisions of the Civil Procedure Act in light of the general rule. Ultimately, the Court held that this is a matter for the legislature.

Implications

As the Chorley exception is not recognised as part of the common law of Australia, a self-represented litigant who happens to be either a barrister or solicitor will not be able to recover his or her professional costs for acting for himself or herself in any litigation.

Solicitors and barristers should now think twice about representing themselves in litigation. While solicitors may have in the past chosen to self-represent to save costs, this will not necessarily be the cost-effective option as they will no longer be recompensed for their time and effort by way of costs orders. Besides, as the Court highlighted, it is often undesirable of legal practitioners acting for themselves in legal proceedings. This is because a self-representing solicitor, lacking impartial and independent advice, may also lack objectivity due to self-interest.

It will be interesting to see if the legislature would follow the course which has been taken in England and abolish the general rule to allow self-represented litigants, whether legal practitioners or not, to recover costs for their time and effort in litigation. Any such change, in my view, is unlikely in the near future.

McCabes litigation and dispute resolution team is experienced in advising on and acting in all aspects of litigation, and regularly represents members of legal and other profession in disputes in different Courts. Do not hesitate to contact us if you require any assistance.

This article is not legal advice. It is intended to provide commentary and general information only. Access to this article does not entitle you to rely on it as legal advice. You should obtain formal legal advice that is specific to your particular circumstances.

published by

Chiara Rawlins

Principal

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Litigation and Dispute Resolution

Canadian Court elevates thumbs-up emoji to signature status

In June 2023, a Canadian Court in South-West Terminal Ltd v Achter Land and Cattle Ltd, 2023 SKKB 116, held that the "thumbs-up" emoji carried enough weight to constitute acceptance of contractual terms, analogous to that of a "signature", to establish a legally binding contract. Facts This case involved a contractual dispute between two parties namely South-West Terminal ("SWT"), a grain and crop inputs company; and Achter Land & Cattle Ltd ("ALC"), a farming corporation. SWT sought to purchase several tonnes of flax at a price of $17 per bushel, and in March 2021, Mr Mickleborough, SWT's Farm Marketing Representative, sent a "blast" text message to several sellers indicating this intention. Following this text message, Mr Mickleborough spoke with Mr Achter, owner of ALC, whereby both parties verbally agreed by phone that ALC would supply 86 metric tonnes of flax to SWT at a price of $17 per bushel, in November 2021. After the phone call, Mr Mickleborough applied his ink signature to the contract, took a photo of it on his mobile phone and texted it to Mr Archter with the text message, "please confirm flax contract". Mr Archter responded by texting back a "thumbs-up" emoji, but ultimately did not deliver the 87 metric tonnes of flax as agreed. Issues The parties did not dispute the facts, but rather, "disagreed as to whether there was a formal meeting of the minds" and intention to enter into a legally binding agreement. The primary issue that the Court was tasked with deciding was whether Mr Achter's use of the thumbs-up emoji carried the same weight as a signature to signify acceptance of the terms of the alleged contract. Mr Mickleborough put forward the argument that the emoji sent by Mr Achter conveyed acceptance of the terms of the agreement, however Mr Achter disagreed arguing that his use of the emoji was his way of confirming receipt of the text message. By way of affidavit, Mr Achter stated "I deny that he accepted the thumbs-up emoji as a digital signature of the incomplete contract"; and "I did not have time to review the Flax agreement and merely wanted to indicate that I did receive his text message." Consensus Ad Idem In deciding this issue, the Court needed to determine whether there had been a "formal meeting of the minds". At paragraph [18], Justice Keene considered the reasonable bystander test: " The court is to look at “how each party’s conduct would appear to a reasonable person in the position of the other party” (Aga at para 35). The test for agreement to a contract for legal purposes is whether the parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract (Aga at para 36). The question is not what the parties subjectively had in mind, but rather whether their conduct was such that a reasonable person would conclude that they had intended to be bound (Aga at para 37)." Justice Keene considered several factors including: The nature of the business relationship, notably that Mr Achter had a long-standing business relationship with SWT going back to at least 2015 when Mr Mickleborough started with SWT; and The consistency in the manner by which the parties conducted their business by way of verbal conversation either in person or over the phone to come to an agreement on price and volume of grain, which would be followed by Mr Mickleborough drafting a contract and sending it to Mr Achter. Mr Mickleborough stated, "I have done approximately fifteen to twenty contracts with Achter"; and The fact that the parties had both clearly understood responses by Mr Achter such as "looks good", "ok" or "yup" to mean confirmation of the contract and "not a mere acknowledgment of the receipt of the contract" by Mr Achter. Judgment At paragraph [36], Keene J said: "I am satisfied on the balance of probabilities that Chris okayed or approved the contract just like he had done before except this time he used a thumbs-up emoji. In my opinion, when considering all of the circumstances that meant approval of the flax contract and not simply that he had received the contract and was going to think about it. In my view a reasonable bystander knowing all of the background would come to the objective understanding that the parties had reached consensus ad item – a meeting of the minds – just like they had done on numerous other occasions." The court satisfied that the use of the thumbs-up emoji paralleled the prior abbreviated texts that the parties had used to confirm agreement ("looks good", "yup" and "ok"). This approach had become the established way the parties conducted their business relationship. Significance of the Thumbs-Up Emoji Justice Keene acknowledged the significance of a thumbs-up emoji as something analogous to a signature at paragraph [63]: "This court readily acknowledges that a thumbs-up emoji is a non-traditional means to "sign" a document but nevertheless under these circumstances this was a valid way to convey the two purposes of a "signature" – to identify the signator… and… to convey Achter's acceptance of the flax contract." In support of this, Justice Keene cited the dictionary.com definition of the thumbs-up emoji: "used to express assent, approval or encouragement in digital communications, especially in western cultures", confirming that the thumbs-up emoji is an "action in an electronic form" that can be used to allow express acceptance as contemplated under the Canadian Electronic Information and Documents Act 2000. Justice Keene dismissed the concerns raised by the defence that accepting the thumbs up emoji as a sign of agreement would "open the flood gates" to new interpretations of other emojis, such as the 'fist bump' and 'handshake'. Significantly, the Court held, "I agree this case is novel (at least in Skatchewan), but nevertheless this Court cannot (nor should it) attempt to stem the tide of technology and common usage." Ultimately the Court found in favour of SWT, holding that there was a valid contract between the parties and that the defendant breached by failing to deliver the flax. Keene J made a judgment against ALC for damages in the amount of $82,200.21 payable to SWT plus interest. What does this mean for Australia? This is a Canadian decision meaning that it is not precedent in Australia. However, an Australian court is well within its rights to consider this judgment when dealing with matters that come before it with similar circumstances. This judgment is a reminder that the common law of contract has and will continue to evolve to meet the everchanging realities and challenges of our day-to-day lives. As time has progressed, we have seen the courts transition from sole acceptance of the traditional "wet ink" signature, to electronic signatures. Electronic signatures are legally recognised in Australia and are provided for by the Electronic Transactions Act 1999 and the Electronic Transactions Regulations 2020. Companies are also now able to execute certain documents via electronic means under s 127 of the Corporations Act. We have also seen the rise of electronic platforms such as "DocuSign" used in commercial relationships to facilitate the efficient signing of contracts. Furthermore, this case highlights how courts will interpret the element of "intention" when determining whether a valid contract has been formed, confirming the long-standing principle that it is to be assessed objectively from the perspective of a reasonable and objective bystander who is aware of all the relevant facts. Overall, this is an interesting development for parties engaging in commerce via electronic means and an important reminder to all to be conscious of the fact that contracts have the potential to be agreed to by use of an emoji in today's digital age.

Published by Foez Dewan

29 August, 2023

Government

Venues NSW ats Kerri Kane: Venues NSW successful in overturning a District Court decision

The McCabes Government team are pleased to have assisted Venues NSW in successfully overturning a District Court decision holding it liable in negligence for injuries sustained by a patron who slipped and fell down a set of steps at a sports stadium; Venues NSW v Kane [2023] NSWCA 192 Principles The NSW Court of Appeal has reaffirmed the principles regarding the interpretation of the matters to be considered under sections5B of the Civil Liability Act 2002 (NSW). There is no obligation in negligence for an occupier to ensure that handrails are applied to all sets of steps in its premises. An occupier will not automatically be liable in negligence if its premises are not compliant with the Building Code of Australia (BCA). Background The plaintiff commenced proceedings in the District Court of NSW against Venues NSW (VNSW) alleging she suffered injuries when she fell down a set of steps at McDonald Jones Stadium in Newcastle on 6 July 2019. The plaintiff attended the Stadium with her husband and friend to watch an NRL rugby league match. It was raining heavily on the day. The plaintiff alleged she slipped and fell while descending a stepped aisle which comprised of concrete steps between rows of seating. The plaintiff sued VNSW in negligence alleging the stepped aisle constituted a "stairwell" under the BCA and therefore ought to have had a handrail. The plaintiff also alleged that the chamfered edge of the steps exceeded the allowed tolerance of 5mm. The Decision at Trial In finding in favour of the plaintiff, Norton DCJ found that: the steps constituted a "stairwell" and therefore were in breach of the BCA due to the absence of a handrail and the presence of a chamfered edge exceeding 5mm in length. even if handrails were not required, the use of them would have been good and reasonable practice given the stadium was open during periods of darkness, inclement weather, and used by a persons of varying levels of physical agility. VNSW ought to have arranged a risk assessment of the entire stadium, particularly the areas which provided access along stepped surfaces. installation of a handrail (or building stairs with the required chamfered edge) would not impose a serious burden on VNSW, even if required on other similar steps. Issues on Appeal VNSW appealed the decision of Norton DCJ. The primary challenge was to the trial judge's finding that VNSW was in breach of its duty of care in failing to install a handrail. In addition, VNSW challenged the findings that the steps met the definition of a 'stairwell' under the BCA as well as the trial judge's assessment of damages. Decision on Appeal The Court of Appeal found that primary judge's finding of breach of duty on the part of VNSW could not stand for multiple reasons, including that it proceeded on an erroneous construction of s5B of the Civil Liability Act 2002 and the obvious nature of the danger presented by the steps. As to the determination of breach of duty, the Court stressed that the trial judge was wrong to proceed on the basis that the Court simply has regard to each of the seven matters raised in ss 5B and 5C of the CLA and then express a conclusion as to breach. Instead, the Court emphasised that s 5B(1)(c) is a gateway, such that a plaintiff who fails to satisfy that provision cannot succeed, with the matters raised in s 5B(2) being mandatory considerations to be borne in mind when determining s 5B(1)(c). Ultimately, regarding the primary question of breach of duty, the Court found that: The stadium contained hazards which were utterly familiar and obvious to any spectator, namely, steps which needed to be navigated to get to and to leave from the tiered seating. While the trial judge considered the mandatory requirements required by s5B(2) of the CLA, those matters are not exhaustive and the trial judge failed to pay proper to attention to the fact that: the stadium had been certified as BCA compliant eight years before the incident; there was no evidence of previous falls resulting in injury despite the stairs being used by millions of spectators over the previous eight years; and the horizontal surfaces of the steps were highly slip resistant when wet. In light of the above, the Court of Appeal did not accept a reasonable person in the position of VNSW would not have installed a handrail along the stepped aisle. The burden of taking the complained of precautions includes to address similar risks of harm throughout the stadium, i.e. installing handrails on the other stepped aisles. This was a mandatory consideration under s5C(a) which was not properly taken into account. As to the question of BCA compliance, the Court of Appeal did not consider it necessary to make a firm conclusion of this issue given it did not find a breach of duty. The Court did however indicated it did not consider the stepped aisle would constitute a "stairway" under the BCA. The Court of Appeal also found that there was nothing in the trial judge's reasons explicitly connecting the risk assessment she considered VNSW ought to have carried out, with the installation of handrails on any of the aisles in the stadium and therefore could not lead to any findings regarding breach or causation. As to quantum, the Court of Appeal accepted that the trial judge erred in awarding the plaintiff a "buffer" of $10,000 for past economic loss in circumstances where there was no evidence of any loss of income. The Court of Appeal set aside the orders of the District Court and entered judgment for VNSW with costs. Why this case is important? The case confirms there is no obligation in negligence for owners and operators of public or private venues in NSW to have a handrail on every set of steps. It is also a welcome affirmation of the principles surrounding the assessment of breach of duty under s 5B and s 5C of the CLA, particularly in assessing whether precautions are required to be taken in response to hazards which are familiar and obvious to a reasonable person.

Published by Leighton Hawkes

18 August, 2023