Oliveri Legal Pty Ltd v Cassegrain Tea Tree Oil Pty Ltd (No 2)

The proceedings commenced with the filing of a summons on 13 May 2021. A statement of claim was filed on 3 June 2021. The current claim is described in an amended statement of claim filed on 3 June 2022. There is a defence filed on 15 July 2022 and an amended reply filed on 7 August 2023.

In essence the claim is for unpaid legal fees incurred by a Mr Claude Cassegrain (now bankrupt) and allegedly guaranteed by the defendant (generally referred to as CaTTO). I will henceforth refer to Mr Claude Cassegrain as Mr Cassegrain. The guarantee is said to arise from a Guarantee and Indemnity Agreement dated 19 December 2008 (the Agreement). The validity and enforceability of the Agreement is the core issue in the case. It was signed by Mr Cassegrain on his own behalf and purportedly on behalf of the defendant.

The defence says, “Claude Cassegrain did not ostensibly sign the agreement in any capacity as a director and/or as a secretary of CaTTO.” The first of the agreed list of issues expresses the matter in the following way:

The plaintiff’s written submissions emphasise the importance of the validity of the Agreement:

It must follow that if the Agreement is not enforceable against the defendant, then the action will fail.

Besides this primary issue, assuming the Agreement was enforceable, secondary issues that I will address include:

Each side filed affidavits ahead of the hearing. Ultimately, both sides did not read all of the filed affidavits, consequently narrowing the scope of the oral evidence to one witness each.

Two affidavits (14 September 2022 and 20 February 2023 respectively) of Mr Emanueli Oliveri were read. He was cross-examined. On the defendant’s side an affidavit of Mr Graham Lockett (25 November 2022) was read, and he was also cross-examined.

The plaintiff tendered parts of one of the affidavits that had been filed by the defendant, but not read, as constituting admissions on the defendant’s part. This was the affidavit of Mr Thomas Cassegrain who was at the relevant time, and still is, a director of the defendant.

The orders sought by the plaintiff are almost all concerned with property owned by the defendant. Declarations concerning caveats and a mortgage in respect of the properties are sought. Finally, a declaration is requested that the defendant is indebted to the plaintiff in the sum of $1,838,758.76. Interest is also claimed.

The sum stated in the last paragraph is made up as follows:

The plaintiff is a firm of solicitors. Mr Oliveri is the director and managing solicitor of this firm.

In 2008 Mr Cassegrain was one of two directors of the defendant. Mr Thomas Cassegrain was the other director. He was then living in France. Mr Cassegrain was also the company’s secretary and managing director. Mr Lockett was a director of the defendant between 2014 and 2020.

As at 2008, Mr Cassegrain was a practised litigant, having been involved in a number of cases across assorted jurisdictions. Two of his cases were in the NSW Supreme Court (Gerard Cassegrain & Co Pty Ltd v Claude Cassegrain (file No 4647 of 2008) and Dennis Cassegrain & Ors v Gerard Cassegrain & Co Pty Ltd (file No 281625 of 2008)). His then solicitors said that they could no longer act for him because of a conflict of interest. He needed new solicitors.

To this end, he approached and spoke to Mr Oliveri on the telephone on 2 December 2008.

The defendant was not a party to the Supreme Court litigation.

Based on Mr Oliveri’s affidavit dated 14 September 2022, which, at least in the early stages, is largely uncontradicted, the chronology went as follows.

During the telephone conversation on 2 December 2008, Mr Cassegrain told Mr Oliveri that he had “very little in the way of cash flow and may not be in a position to pay your fees until the end of the matter.” He continued:

Not surprisingly Mr Oliveri said it was not the firm’s policy to cover disbursements (such as counsel’s fees), but he was prepared to otherwise delay collection of the fees until the end of the litigation. At first instance, the two cases did not end until 2011 (Gerard Cassegrain & Co Pty Ltd v Claude Cassegrain [2011] NSWSC 1156) and 2012 (Dennis Cassegrain & Ors v Gerard Cassegrain & Co Pty Ltd [2012] NSWSC 403), respectively.

In the same telephone conversation on 2 December 2008, Mr Cassegrain then asked Mr Oliveri to open an account in the name of the defendant. Mr Oliveri queried the request. Mr Cassegrain responded:

This exchange then followed:

Following the telephone call, Mr Oliveri sent Mr Cassegrain a costs agreement and the Agreement. In short compass, the latter document purports to be an indemnification and guarantee of all legal fees incurred by the plaintiff in acting for Mr Cassegrain, the indemnity and guarantee being provided by both Mr Cassegrain and the defendant.

As will be seen below, the construction of the Agreement is awash with controversy and contradiction.

Presumably following the telephone conversation, Mr Cassegrain wrote to the plaintiff on 2 December 2008, giving some background to the litigation and attaching some relevant documents. The letter is written under the letterhead of the defendant and ends with:

On 3 December 2008 Mr Cassegrain signed the Costs Agreement and returned it to the plaintiff. The estimate of costs in cl 3.1 is $33,000.

I note at this stage that the Agreement does not only relate to the Costs Agreement, rather it purports to guarantee “payment of all legal costs and associated disbursements (including the counsels’ fees) in accordance with the payment terms of invoices rendered for these said services.”

The guarantors are listed as Mr Cassegrain and the defendant. The document was returned to the plaintiff, having been signed on 19 December 2008. It was purportedly executed by Mr Cassegrain on his own behalf and separately on behalf of the defendant. There is nothing to suggest that, as foreshadowed by Mr Cassegrain, the document was ever looked over by Patakas Lawyers or anyone else.

The signature boxes also provide for the signatures of witnesses. No witnesses signed the document, giving rise to one of the arguments on the Agreement’s validity, raised by the defendant.

Further, on 19 December 2008 Mr Cassegrain sent the plaintiff a cheque for $10,000, drawn on the account of the defendant. The cheque was to be deposited in the plaintiff’s trust account. The receipt for the cheque indicates that it was provided “for and on behalf of Cassegrain Tea Tree Oil P/L.” The money was assigned to “cost and disbursements”.

In February 2009 Mr Oliveri spoke to Mr Cassegrain expressing concern that the Supreme Court proceedings were more complicated, and costly, than he had envisaged.

Mr Cassegrain suggested a retainer agreement to meet Mr Oliveri’s concerns. A retainer agreement, dated 27 February 2009, was prepared by Mr Oliveri and signed by Mr Cassegrain, both in his personal capacity and as a director of the defendant. The Retainer provides for an annual payment of $120,000 plus GST for the plaintiff’s services in respect of the Supreme Court proceedings.

The defendant submitted that the limitation period in respect of the claim under the Retainer had expired before these proceedings were commenced.

Continuing with Mr Oliveri’s version, for approximately the next two years, Mr Oliveri had the carriage of the Cassegrain litigation. It was time-consuming and included long telephone conferences with Mr Cassegrain and constant updates of briefs to counsel.

At the end of 2010 Mr Oliveri employed a Mr Marcus Wicken as a solicitor. Mr Oliveri told Mr Cassegrain that he wished Mr Wicken to take over the Cassegrain file. Mr Cassegrain, subject to some conditions, agreed.

In April 2011 Mr Oliveri noticed that some invoices were unpaid. He says he was comforted by reassurances from Mr Cassegrain and by the existence of the Agreement.

By September 2011 the unpaid invoices had mounted, and no monies had been received under the Retainer. Mr Oliveri spoke to Mr Cassegrain and asked him to direct how incoming fees should be distributed between unpaid invoices and the Retainer. This generated a handwritten note from Mr Cassegrain, on the defendant’s letterhead, dated 1 September 2011, in which some directions were given in relation to two cheques, but no mention is made of the Retainer.

In January 2013 Mr Muir was employed by Mr Oliveri to take over from Mr Wicken.

In August 2014 Mr Oliveri spoke to Mr Cassegrain. He told him that the hourly rate for Mr Muir’s services was to be increased. Mr Oliveri followed up by sending Mr Cassegrain a Costs Agreement and Standard Costs Disclosure on 22 August 2014.

The new Costs Agreement was not returned by Mr Cassegrain. On 15 September 2015 Mr Cassegrain entered bankruptcy.

I have referred above to the history so far given as being Mr Oliveri’s version. As already noted, Mr Cassegrain did not provide any evidence. While I permitted cross-examination of Mr Oliveri on the reliability of his recollection, I did not allow a contrary version to be put to him. Notwithstanding the extraordinary fact that Mr Oliveri made no file notes of any conversations he had with Mr Cassegrain, I have no no option but to accept Mr Oliveri’s version of their interactions, at least to the extent of their general effect.

Mr Oliveri has been a solicitor for a long time and must have been aware of the importance of taking a file note of conversations. Obviously there may have been conversations which were no more than friendly banter, but in this case the conversations described were all of significance.

Mr Oliveri said that a conversation on 28 January 2016 was effectively informal; confirming what he already knew. But the conversation includes, on his version, an explicit admission that his firm was owed a good deal of money, at that stage estimated to be about $1.4m. I simply cannot understand how he found it appropriate to not make a written record of this conversation, or even to later confirm the conversation in correspondence.

Another matter I found most surprising was the estimation of $33,000 in the estimate for the Costs Agreement. I appreciate that Mr Oliveri was anxious to have a costs agreement in place and had no real idea of the complexity of the litigation. But he did know that it might last for about a year and that senior and junior counsel would be involved. Even in 2008, $33,000 seems too low.

Mr Oliveri said the figure had no sound foundation. Perhaps more importantly, within weeks he realised that $33,000 was nowhere near enough, yet he made no attempt to amend the estimate.

Mr Oliveri agreed that none of the work that he had done had been on behalf of the defendant.

Mr Oliveri said that he continued to speak to Mr Cassegrain after he had become a bankrupt because he felt that he remained the director of the family business.

Mr Thomas Cassegrain is the son of Mr Cassegrain. Mr Thomas Cassegrain became a director of the defendant on 13 July 2005 and has maintained that position to the present. His affidavit is dated 2 December 2022. I have already mentioned that it was not read by the defendant, but the plaintiff relied on parts of the affidavit as admissions.

The parts relied upon included the following:

In 2014 Mr Lockett was asked to be a director of the defendant, in part to introduce a regime of “governance propriety” which was apparently lacking in the company. I have the clear impression that prior to 2014, it was a company dominated by Mr Cassegrain with little attention paid to formality.

Mr Lockett was a director of the defendant between 24 October 2014 and 17 June 2020. He was the company secretary between 19 November 2014 and, again, 17 June 2020. He had a previously long association with Mr Cassegrain, although there was not much interaction in the years up to 2013.

Mr Cassegrain was also a director alongside Mr Lockett, but Mr Cassegrain dropped out due to his bankruptcy in 2015. Other directors at that time were Mr Thomas Cassegrain and Mr Philip Henshaw.

Mr Lockett states that he was aware that Mr Cassegrain and his wife (Mrs Felicity Cassegrain) had loan accounts with the defendant. Mr Lockett goes on to say that he “did not know what was the purpose of the loan funds…” and added in his oral evidence:

Mr Lockett did not enquire into the background of the loans, taking the view that Mr Cassegrain was entitled to use the funds as he wished, noting that he was subject to an obligation to repay the funds.

Mr Lockett states that he first became aware of the guarantee document when it was emailed to him by Mr Muir on 11 January 2016. He says he then tried to find minutes of a directors’ meeting in which there was approval for executing the guarantee or giving Mr Cassegrain authority to enter into the Agreement. Mr Lockett could not find any such authority and, on 18 January 2016, confirmed this fact by email to Mr Muir.

Following a meeting on 28 January 2016, to which I will return below, the plaintiff, on 8 February 2016, lodged caveats in respect of three properties owned by the defendant.

In late April 2021 Mr Oliveri had a conversation with Mr Cassegrain, with Mr Thomas Cassegrain apparently listening-in. Mr Cassegrain said:

Perhaps with the tacit approval of Mr Thomas Cassegrain, Mr Cassegrain seems to have changed tack, alleging that he had not understood the documents. If Mr Oliveri is correct in his recollection of the events and of the words and actions of Mr Cassegrain, the new allegation would seem somewhat bold.

The meeting is important because the plaintiff says that the words spoken by Mr Thomas Cassegrain were a clear admission of the defendant’s acceptance that it was a party to, and bound by, the Agreement.

Although Mr Thomas Cassegrain’s version is different to that of Mr Oliveri, it is also different to that of Mr Lockett. The plaintiff took comfort from the difference, more to suggest Mr Lockett’s version was wrong than to adopt that of Mr Thomas Cassegrain.

The principal parts of the three versions are as follows:

Mr Lockett was stridently cross-examined about the conversation, the suggestion being that his asserted words had never been spoken and that Mr Oliveri’s version was correct.

Mr Oliveri’s version is confirmatory of the plaintiff’s assertion that the company was bound by the guarantee. It could also be seen as an explicit admission. Mr Lockett’s version is consistent with the company never having authorised entry into the Agreement.

As far as the respective observations, including demeanour, of Mr Oliveri and Mr Lockett are concerned, I cannot say that either person came across as more or less honest than the other. However, I have come to the view that Mr Lockett’s version should be preferred. He impressed me as a person who had been given the specific task of introducing formality and governance into the workings of the company and I am inclined to believe that he would not have made any admissions without good cause.

Mr Lockett said that he and Mr Thomas Cassegrain had entered the meeting with a position to which they stuck, as confirmed in the letter of 9 February 2016.

The minutes of the directors meeting held on 20 January 2016 are consistent with his version as expressed at the meeting some eight days later. Not only do the minutes indicate that the Agreement is disputed but state that searches had “been unable to find any mention or approval for the latter in CaTTO Board Minutes.”

In addition, the letter Mr Lockett wrote to the plaintiff, on 9 February 2016, is consistent with his expressed attitude. The letter states:

I think the above quoted passage is a clear statement of the defendant’s position. It was suggested to Mr Lockett that his use of the words “we do not admit” was deliberately less than a denial and, essentially, an acknowledgement that the defendant’s position remained arguable. I reject this suggestion. I doubt Mr Lockett had Bullen & Leake & Jacob’s Precedents of Pleadings (18th ed) (2016) to hand when drafting the letter.

As to Mr Oliveri’s version, like that of Mr Lockett, it is not based on any file note or contemporaneous memorandum. That Mr Oliveri chose not to make a file note, then or ever, must impact significantly upon the reliability of his memory. He was a solicitor yet took a distinctly casual approach to aspects of his work, including making file notes (if only of important meetings), recording times for his work and estimating, or at least monitoring estimates, of the value of his firm’s services.

I do not know the nature of the plaintiff’s business but if Mr Oliveri was even moderately busy, his recording of his working details was lamentable and may be regarded as contributing to the plaintiff’s loss of the case.

Returning to Mr Lockett’s evidence, and consistent with his approach to the dispute, he wrote to the plaintiff on 19 July 2016 disputing the validity of the invoices that had been forwarded to the company. He stated that those invoices should “have been addressed to Claude Cassegrain or his Trustee in Bankruptcy.” In the same letter he repeated the defendant’s position as stated in the earlier letter of 9 February 2016.

Another indication of Mr Lockett’s attitude towards the matter was calling for an explanation from Mr Cassegrain. This produced a somewhat self-serving email from Mr Cassegrain on 13 January 2016. Mr Cassegrain wrote:

While I doubt that Mr Cassegrain was in shock, his statement that he was unaware that there was an outstanding guarantee by CaTTO is at least consistent with the defendant’s case.

Mr Lockett was asked about entries in the defendant’s accounts, in particular the loan account held by Mr Cassegrain. The accounts for 2014/15 show $210,000 in legal fees having been paid to the plaintiff.

Mr Lockett was questioned about the lodging of caveats. He accepted that words to the effect that there was no objection to the caveats had been spoken on 28 January 2016, but in re-examination he explained his reasons for that attitude, derived from previous experiences that he had encountered. I do not think any acquiescence in the lodging of caveats is indicative of any acceptance of the defendant being a party to the Agreement.

The first issue is whether or not CaTTO is bound to the Agreement. If this issue is found against the plaintiff, then there must be a verdict for the defendant. If the issue is found in favour of the plaintiff, then the remaining issues are essentially a series of cascading defences attacking various parts of the plaintiff’s claim.

CaTTO was described as a family company. As previously stated, in 2008 the directors were Mr Cassegrain and Mr Thomas Cassegrain. The shareholders were Mr Cassegrain and his wife, Mrs Felicity Cassegrain.

A corporation is a separate entity from its shareholders. For this reason, the Corporations Act 2001 (Cth) dictates a number of provisions designed to maintain the distinction and ensure the company is acting as if it was a separate person. This even applies where a single person is both the sole director and sole shareholder of the company.

In 2008, the Corporations Act, included the following relevant provisions:

The plaintiff’s case is that CaTTO is bound to the Agreement because Mr Cassegrain legitimately executed the document on behalf of the company. Section 127(1) says a document may be executed without a common seal; that is the case here. But the subsection continues that if there is more than one director of the company, it must be signed by two directors or a director and a company secretary. In other words, there must be more than one person executing the document. That did not occur here.

The plaintiff’s answer to this obstacle is as follows:

When Mr Oliveri spoke to Mr Cassegrain on 2 December 2008, he had no independent knowledge of CaTTO. Mr Cassegrain told him that he was a director of the company and that the company would provide the guarantee and indemnity. Mr Oliveri made no enquiries, such as a company search, and did not ask Mr Cassegrain for any proof of his authority to bind the company. In other words, he simply took the spoken word of Mr Cassegrain as sufficient. But how could it be sufficient if it permits a person to bind the company by simply saying that he is a director of that company?

The opportunity to verify Mr Cassegrain’s authority was available to Mr Oliveri. Mr Oliveri could have:

Instead, Mr Oliveri:

Mr Oliveri simply accepted the signature (and word) of Mr Cassegrain.

The plaintiff submitted that it had the protection of s 129(3) of the Corporations Act to make the assumptions that Mr Cassegrain had been duly appointed and had the authority to enter into the Agreement.

I do not think the plaintiff was entitled to the assumptions stipulated by s 129(3), for two reasons:

In relation to dealings with the company, the plaintiff referred me to Soyfer & Anor v Earlmaze [2000] NSWSC 1068, submitting that because the articles of association allowed CaTTO to enter into a guarantee agreement, it must follow that the entry into the Agreement was a dealing of the company pursuant to s 128. I disagree. CaTTO is a company running a tea tree plantation; its articles of association give it powers to do many things, but that does not mean that the plaintiff was dealing with it in respect of the Agreement. The plaintiff was not dealing with the company at all, he was simply asking the company to guarantee his dealings with Mr Cassegrain.

At this stage I think I should refer to the plaintiff’s submission that a “Jones v Dunkel” inference (derived from Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8) should be drawn from the defendant not calling Mr Cassegrain and Mr Thomas Cassegrain as witnesses.

The plaintiff submitted that the “failure by Claude and Thomas to adduce evidence on this point is a reason for increasing the strength of the inference to be drawn from the evidence that Claude in fact had implied actual authority or ostensible authority to sign the Guarantee and Indemnity and the Retainer Agreement”.

I was referred by the plaintiff to other “Cassegrain” litigation said to highlight the point being made in this case. In Gerard Cassegrain and Co Pty Ltd v Cassegrain (2013) 87 NSWLR 284; [2013] NSWCA 453, at 294, Beazley P (as her Excellency then was) said:

The difference here is that there is a clear allegation that Mr Cassegrain acted without the defendant’s authority and secondly, this decision was, in part, overturned in the High Court, although not specifically in relation to the above quoted passage (Cassegrain v Gerard Cassegrain & Co Pty Ltd [2015] HCA 2). However, the High Court observed at [42]:

I agree that an inference can be drawn, but it should not go further than a conclusion that the evidence of Messrs Cassegrain would not have assisted the defendant’s case. While I could perhaps go a little further and draw an inference that Mr Cassegrain had, by his wiles, manipulated a seemingly gullible Mr Oliveri, I do not think I can bolster the inference to the extent that it suggested Mr Cassegrain was acting with the authority of the defendant, actual, implied or ostensible. The plaintiff was effectively asking the Court to use the inference to shift the onus of proof, so as to place the obligation to disprove the authority on the defendant. I do not think an inference going that far is open to be drawn.

The plaintiff also submitted that Mr Cassegrain had ostensible authority, primarily derived from his position as managing director, to enter into the Agreement on behalf of the defendant. The plaintiff referred me to the decision of Hammerschlag J (as his Honour then was) in Junker v Hepburn [2010] NSWSC 88 (Junker), at 47:

However, if one goes back to the previous paragraph in Junker, it can be seen that the topic of ostensible authority began with the words:

There has been no representation here by the principal. As already stated, there have only been the representations by Mr Cassegrain about himself. To counter this argument the plaintiff took me to Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549 itself, at page 583:

The distinction in the current case, in my view, is that in Hely-Hutchinson there was a history of the managing director entering contracts without the knowledge of the company, but later the company acquiescing in the managing director’s actions. Mr Cassegrain may well have entered guarantees previously, but there is no evidence to that effect and certainly no evidence of the company approving such conduct.

This is illustrated in Birjandi v Todaytech Distribution Pty Ltd [2005] WASCA 44, where, referring to Hely-Hutchinson, the WA Court of Appeal stated, at [34]:

Giving guarantees was not part of the defendants “normal trading activities”.

The plaintiff also referred me to the decision of Diplock LJ in Freeman and Lockyer v Buckhurst Park Properties [1964] 2 QB 480 at 503:

The distinction here is twofold:

I emphasise here that I find it difficult to conclude that any authority, of any type, existed based entirely on only Mr Cassegrain making representations (whether orally or in writing) only for his own benefit and without any independently corroborating oral or written statement. Even the cheque for $10,000, sent on 19 December 2018, is signed by Mr Cassegrain.

It is to be remembered that the defendant was a company with another director and another shareholder. Mr Cassegrain did not have the authority, without more, which rest in a single director, single shareholder entity. Mr Oliveri dealt with Mr Cassegrain effectively as if he was dealing with a “one man company”.

The result is that I do not think the defendant was a legally bound party to the Agreement. Accordingly, the action must fail.

There is another reason why I think the action cannot succeed. Assuming the defendant had been validly made a party to the Agreement, the question arises as to what precisely the Agreement stipulates.

The Agreement was regarded by Mr Oliveri as his standard form document and was presumably drafted “in-house”. A clearer and more precise document would have been substantially beneficial to the plaintiff, who will lose the case in part because of the lack of clarity, equivocality, and failure to include important elements in the document. For example, a requirement that it be signed pursuant to s 127 of the Corporations Act would have avoided a great deal of argument. Perhaps excluding the Retainer, I have no reason to believe that the legal work claimed by the plaintiff was not performed. It is not entitled to any type of quantum merit claim, leaving its failure in this case substantially at the feet of the practice’s seemingly casual methods of operation.

The plaintiff’s construction of the agreement is that it contains both an indemnity and a guarantee. The defendant submitted that it could not be construed to extend past an indemnity.

The plaintiff submitted that:

With respect, the plaintiff’s allotment of the indemnity and guarantee to the separate pages of the document has the appearance of a retrospective justification of what is a very poorly drafted agreement.

The defendant pointed out that, on the face of the document, it contained the absurdity of Mr Cassegrain being his own guarantor and also having a right to claim any fees he paid to the plaintiff from the defendant, arising from the joint and several liability. As submitted by the defendant:

The plaintiff submitted that the distinction between the indemnity and the guarantee was to be seen in the words “jointly and severally” on the first page (the indemnity) compared to “jointly or severally” on the second page (the guarantee).

I suspect the change from “and” to “or” was not deliberate and probably a typographical error. An example of how easily such an error might be made is to be found in the plaintiff’s written submissions, which state, quoting from the second page, at [43]:

But more importantly, I do not accept that the second page of the document provides for a separate undertaking from the first page. I think the Agreement purports, by the whole of its terms, to provide for an indemnity and a guarantee with a signing provision (on page 2) applicable to both purposes. Unfortunately, its inbuilt inconsistencies, such as the guarantee by Mr Cassegrain of himself and the joint and several liability provisions, leave the document in such a state that it can only exist as an indemnity.

Firstly, if the pages were to be treated separately, then the document makes no provision for the execution of the indemnity. Secondly, the second page contains the words “In particular, we understand and accept that this Guarantee and Indemnity are irrevocable….” How then can it be asserted that the indemnity forms no part of the second page?

Further, the box on the page clearly refers to the execution of both a guarantee and an indemnity. Interestingly, the word “personal” in the box might be seen as suggesting the provision for execution does not relate to a corporate entity. I do not, however, place much weight on this point, it is simply another anomaly in a very odd document.

My interpretation of the Agreement as being enforceable as no more than an indemnity seems to have been the approach taken by Parker J, at least in argument, when the matter came before his Honour on 3 June 2022 for an application to amend the statement of claim. Ultimately, his Honour gave leave for the amendment but, in informal reasons, stated:

The single invoice referred to by Parker J is dated 22 February 2016 and was rendered by the plaintiff for the sum of $750,000 plus GST. This figure arises from the Retainer dated 27 February 2009.

The invoice claims retainer fees from 1 July 2009 to 30 September 2015.

The plaintiff conceded that if the Agreement is valid only as an indemnity, then its terms extend only to the recovery of any amount owing under the Retainer (the claim for $850,000) and not for the balance of the claim as described above at [11].

The defendant, assuming the existence of only an indemnity, then submitted that:

The limitation period is six years (Limitation Act 1969 (NSW) s 14). The proceedings were commenced in May 2021. The defendant submitted that the monies payable under the Retainer would have accrued at the end of each of the three years for which the claim was made, namely 2009, 2010 and 2011.

The plaintiff submitted that the retainer fee did not accrue until the issuing of the invoice in February 2016 so that the commencement of the proceedings in 2021 did not offend the limitation period.

The Retainer contains these terms concerning payment:

In his argument, the plaintiff relied on the conversation between Mr Oliveri and Mr Cassegrain on 27 February 2009 when Mr Oliveri said to Mr Cassegrain:

No invoices were sent by Mr Oliveri until 22 February 2016, thus commencing the accrual period for this claim.

I think the plaintiff’s approach has the following problems:

Notably this exchange occurred between Parker J and senior counsel for the plaintiff on 3 June 2022:

Two matters arise from the above exchange:

I note the invoice dated 22 February 2016 refers to “various legal proceedings”. If “various” means more than two, then the invoice is inconsistent with Mr Oliveri’s evidence.

The effect of the above cross-examination of Mr Oliveri is that any claim under the Retainer could not stretch beyond 2012. Taken with the accrual for the years from 2009 to 2012 commencing at the end of each respective year, six years would have elapsed before the commencement of the proceedings.

I find, therefore, that the claim under the Retainer, had it been otherwise valid, would have been defeated by the limitation period.

The Retainer was included in the application for a costs assessment made by the plaintiff. The costs assessor was Mr Geoffrey Meadows. His assessment is dated 7 July 2019. I think it worth quoting from the Costs Assessment, from paragraph 12.4.8:

A review of the Costs Assessment was unsuccessful.

The plaintiff drew support from the assessor’s comment that “the agreement may be a valid contract”. However, the Retainer was a means by which the plaintiff was to recover legal fees from Mr Cassegrain. As such it fell within, as found by the assessor, the scope of the Legal Profession Act 2004 (NSW) (the LPA). The assessor found that the agreement was not “fair or reasonable” under this Act.

In my view, to allow the Retainer to have force contrary to a finding that it was not fair and reasonable would be against public policy.

In Wilkinson v Osborne (1915) 21 CLR 89; [1915] HCA 92 at 98, Isaacs J said:

The rule of policy applicable in 2008, and in fact continuing to the present, is that the incurring of legal fees should be governed by legislation, such as the LPA, which dictates rules by which the public is protected from an unfair or haphazard collection of legal fees. To allow the retainer claim to succeed would be to circumvent the protection provided by the LPA.

It follows that if I had found the Retainer was not time-barred then I would have found that enforcing this agreement would have been contrary to public policy and not enforceable.

I have made the following findings:

I make the following orders: