Beau Timothy John Hartnett trading as Hartnett Lawyers v Anthony Robert Bell as Executor of the Estate of the late Mabel Dawn Deakin-Bell

This appeal raises a number of important questions concerning the ambit of the Supreme Court’s inherent supervisory jurisdiction over an officer of the Court. In particular, it raises the question whether (a) that jurisdiction extends to requiring a solicitor who acted for a mortgagee in undefended possession proceedings to disgorge to the mortgagor amounts found to constitute excessive professional charges to the mortgagee, and (b) if it does, whether Peden J’s (the primary judge) discretion miscarried in making such an order.

These questions arise in a regrettably complex procedural context which it will be necessary to traverse in order to consider an additional argument raised on appeal concerning parties and procedural fairness. Shortly stated, there were two relevant sets of proceedings which were ultimately heard together by the primary judge. These came to be referred to by the parties and the primary judge as the Possession Proceedings and the Equity Proceedings. The background to these two sets of proceedings is explained in more detail later in these reasons.

The orders in respect of which the appeal is brought were made in the Equity Proceedings and required Mr Beau Timothy John Hartnett (the Appellant) to pay the sum of $251,255.53; interest on that sum in the amount of $50,489.98; and interest on the sum of $33,792.46 in the amount of $9,610.96 to the Respondent, together with the Respondent’s costs on an indemnity basis.

Notwithstanding the procedural complexity of the matter, the bald background facts may be stated relatively briefly. A more comprehensive summary is set out at [6]-[98] of the primary judgment: Bell v Hartnett Lawyers (No 3) [2022] NSWSC 1204 (the primary judgment or PJ).

In late 2013, Mrs Mabel Deakin-Bell (Mabel or the mortgagor) died. Under her will, Mr Anthony Robert Bell (the Respondent), was left a property which was subject to a $30,000 mortgage to the late Ms Gwendoline Deakin-Bell (Gwendoline or the mortgagee). As will be seen, the Appellant, who acted for Gwendoline from 2014, charged her $288,601.03 to enforce the security in undefended proceedings in the Possession List of the Supreme Court.

Clause 5 in the Memorandum of Mortgage Q860000 provided:

The only evidence of a costs agreement was that annexed to an affidavit of Haleema Junat Deen filed in the Equity Proceedings and affirmed on 24 June 2021.

In that affidavit, Ms Deen deposed to the fact that she is a solicitor in the employ of Hartnett Lawyers and has the conduct and carriage of the matter on behalf of the Defendant (the Appellant in the appeal). In [4] of her affidavit, Ms Deen deposed that:

Ms Deen then asserted that on 12 February 2014, Hartnett Lawyers provided Gwendoline with “the firm’s standard form disclosure of costs agreement”, a copy of which was annexed to the affidavit (the Costs Agreement). The Agreement is unsigned, although it contained a typed Client Acknowledgement Form which contained the following statements:

The Costs Agreement purported to be issued “pursuant to the requirement of the Legal Profession Act 2007”. The Costs Agreement indicated that Hartnett Lawyers’ address was 60 Appel St, Surfers Paradise, Queensland, and the reference in the Costs Agreement to the Legal Profession Act 2007 was to the Queensland Legal Profession Act.

Clause 2.5 of the Costs Agreement stated:

Clause 2.2 of the Costs Agreement provided:

Clauses 4.4 to 4.7 appeared under a heading “Deferred Payment of Fees”. These clauses provided as follows:

Clause 6 of the Costs Agreement provided as follows:

Also to be noted is Clause 7 of the Costs Agreement which provided:

It is relevant at this juncture to note several sections of the Legal Profession Act 2007 (Qld) (the LP Act).

Section 308(1) of the LP Act relevantly provides:

Section 313 of the LP Act provides:

Section 315 of the LP Act provides:

Section 324 provides:

Further, “conditional costs agreement” and “uplift fee” are defined in s 300 as:

Section 323(3) of the LP Act relevantly provides:

It is plain that Clause 4.7 of the Costs Agreement (see [13] above) purports to be an “uplift fee” as defined in the LP Act. Such an “uplift fee” can only be charged under a “conditional costs agreement”, per s 324 of the LP Act. That raises two matters which should be noted.

First, it is arguable that the Costs Agreement was not a “conditional costs agreement” at all. Payment was not dependent on the successful outcome of the matter to which the costs related. Rather, payment was “deferred” – in the language of the Costs Agreement – until either Gwendoline recovered moneys pursuant to the mortgage, or Hartnett Lawyers ceased to act. Payment was not expressed to be conditional upon Gwendoline actually recovering any moneys pursuant to the mortgage. So much is clear from the fact that if Gwendoline had, in fact, not made any recovery pursuant to the mortgage, Hartnett Lawyers could have ceased to act for her, and Hartnett Lawyers’ fees would have become payable. If that conclusion is correct, no “uplift fee” was in fact chargeable, as the costs were not “conditional” in the relevant sense.

Second, even if the Costs Agreement was a “conditional costs agreement”, there was no evidence that Hartnett Lawyers satisfied the requirements under the LP Act in relation to the “uplift fee”. Specifically, there was no evidence of compliance with the requirement in s 324(3) to provide either an estimate of the uplift fee, or a range of estimates and the major variables that would affect the final calculation of the uplift fee. Nor did Hartnett Lawyers appear to comply with s 313(1)(c), pursuant to which it ought to have disclosed in writing “the reasons why the uplift fee is warranted”, or s 323(3)(c)(iii), as there was no evidence of a costs agreement which Gwendoline had actually signed.

If there was, as the evidence suggests, a failure to disclose these matters, s 316 of the LP Act would have been engaged:

On 2 December 2014, Gwendoline commenced the Possession Proceedings in the Supreme Court of New South Wales by Statement of Claim seeking possession of the property and payment of the mortgage together with interest and costs, said to amount to $34,683.19 by 14 November 2014 (the Possession Proceedings). The Statement of Claim was in what may be described as “vanilla” form, running to 21 paragraphs, reciting details of the mortgaged property, entry into and key terms of the mortgage, a transfer of the mortgage from Robert Deakin-Bell to Gwendoline, Mabel’s death, demand for payment and non-payment.

On 15 January 2015, Mr Hartnett applied for default judgment. That application was rejected shortly thereafter because the Respondent had been named as defendant but was not at that point in time the executor of Mabel’s estate.

On 18 March 2016, an Amended Statement of Claim was filed naming the NSW Trustee and Guardian as defendant, removing the Respondent as a party. This delay was explained to the primary judge as a result of “Mr Hartnett continu[ing] to agitate that Mr Bell apply for probate”: PJ [13]. The amendments were formal and perfunctory, simply replacing the Respondent as defendant in the Possession Proceedings and naming the NSW Trustee and Guardian as defendant.

These proceedings were undefended and, on 29 April 2016, Davies J made orders for possession and sale of the property. These orders were not opposed: see Deakin-Bell v NSW Trustee and Guardian [2016] NSWSC 540 (the possession judgment). Relevantly, those orders included (with emphasis added):

By 29 April 2016, a series of invoices to Gwendoline amounting to approximately $77,200 had been prepared although it was not clear on the evidence that they had in fact been sent to her.

On 5 September 2016, the Appellant wrote to the Proper Officer, Specialist Services – Legal of the NSW Trustee and Guardian (marked “Attention: Mr John Hong”) setting out various details relating to the process of sale of the property. That letter includes:

No evidence (whether documentary or oral) was placed before the Court of the asserted “updated estimate of our legal fees and disbursements to date in the range of $220,000.00 - $240,000.00” said to have been provided to Gwendoline in April 2016. Nor were there in evidence any invoices issued between 11 May 2015 and the date of this letter.

On 30 September 2016, the day before the auction and sale of the property, the Appellant again wrote to the Proper Officer marked to the attention of Mr Hong. In that letter, the Appellant revised his cost estimate:

Also on 30 September 2016, the Respondent, who ultimately obtained probate in respect of Mabel’s estate in November 2016, wrote to the Appellant through his lawyers, notifying him that he intended to seek probate of Mabel’s estate, and asking for copies of the Appellant’s costs agreement and invoices to that date. At a similar time, he became aware that the Appellant had provided the NSW Trustee and Guardian with an estimate of his fees of $302,000 to $330,000. The primary judgment records that this estimate was “without any detail”: PJ [16].

On 1 October 2016, the property was sold at auction for $376,000. On 31 October 2016, the net proceeds of sale, some $352,137.02, were paid into the Appellant’s trust account.

During October 2016, the Appellant and the Respondent corresponded. That correspondence can be characterised fairly as the Respondent seeking information regarding costs and accounts. The Appellant was not responsive.

On 14 November 2016, the day it may fairly be assumed that the sale of Mabel’s property was settled, being some six weeks after the auction, the Appellant issued Gwendoline two further invoices:

On 17 November 2016, Gwendoline signed a document entitled “Specific Trust Account Authority” which had been provided to her by the Appellant and provided for the payment, out of Hartnett Lawyers’ trust account, to:

On 18 November 2016, the Appellant paid Gwendoline in accordance with the above authority, and also made a transfer from his trust account to his office account in accordance with the above authority. He did not make the transfer to this Court as required by Order 6 of the orders of Davies J; indeed, no such transfer was made until the Appellant was again ordered to do so by Slattery J on 26 April 2021.

On 29 November 2016, the Respondent obtained probate of Mabel’s will. From this time, he stood in the shoes of the mortgagor.

The Appellant and Respondent thereafter engaged in protracted correspondence in which the Respondent attempted to obtain copies of invoices and amounts charged by the Appellant. This correspondence also involved various complaints by the Respondent to the Legal Services Commissioner of Queensland (LSCQ).

The Appellant never provided copies of invoices or amounts charged. Indeed, he took steps actively to prevent this process, including writing several letters to the Respondent’s lawyers in which the Appellant threatened (ostensibly on behalf of his client, Gwendoline) to seek the revocation of the Respondent’s grant of probate over Mabel’s estate.

On 2 March 2017, the Respondent’s lawyers wrote to the LSCQ asking for assistance to have the “excessive fees assessed” and complaining of Mr Hartnett’s failure to provide documentation as requested.

On 12 June 2017, the LSCQ responded, noting:

The primary judge observed that Mr Hartnett’s submission in relation to this letter from the LSCQ was that it could be read too precisely as Mr Hartnett’s communications with the LSCQ were not in evidence. Her Honour concluded that “[o]bviously, Mr Hartnett had the ability to go into evidence about this and many other matters and chose not to. I do not accept there is any basis for a suggestion that the LSCQ misrepresented what Mr Hartnett had told them.” There was no challenge to this finding.

On 14 June 2017, the Respondent’s lawyers requested an itemised bill from the Appellant with reference to s 335 of the LP Act.

On 10 July 2017, the Respondent’s lawyers again complained to the LSCQ that the Appellant had not responded to the request for documentation and that they wished to proceed with a complaint against him.

On 12 July 2017, the Appellant responded (with emphasis added):

The primary judge observed that this letter has the following notable features:

On the same day the Appellant sent a second letter to the Respondent alleging various matters and that he would seek instructions to have the Respondent’s grant of probate set aside (which never occurred) and that:

The primary judge observed that it was “difficult to see why Mr Hartnett would threaten that costs of an application to revoke Mr Bell’s grant of probate would entitle Gwendoline to recover those costs from the proceeds of sale.”

On 31 July 2017, the Respondent’s lawyers replied to the Appellant responding to the allegations about probate and again requesting Davies J’s judgment, all invoices issued, whether itemised or not, and other documents.

On 2 August 2017, the Appellant did not provide documentation but responded by threatening that he had instructions to make an application to revoke the grant of probate.

On 20 September 2017, the Respondent’s lawyers wrote to the LSCQ indicating that they had not received the Appellant’s response with documentation and indicating that the Respondent wanted to have the Appellant’s costs in the Possession Proceedings assessed. The application for costs assessment was included in the letter with an indication it would be filed on 12 October 2017.

On 11 October 2017, the Appellant responded in a five page letter with further threats about the Respondent’s grant of probate and stating “we maintain that your client lacks standing to make such Application [for costs assessment]. Further, we consider that until the above issues [concerning probate] are resolved… then no steps should be taken by your client”. The letter went on to state that should a costs assessment be filed that “we hereby place you on notice that … our client will object to such application”. As the primary judge held, this was effectively to assert that the Appellant held instructions to resist such application.

On 27 October 2017, the Respondent’s solicitors wrote to Registrar Bellach of this Court under the heading “Re: Estate of the Late Mabel Dawn Deakin-Bell Costs Assessment Application”. This appears to refer to an application that had already been filed but which was not in evidence (the Costs Application in evidence is dated 9 January 2018). In any event, the correspondence to the Registrar included the following:

Correspondence between the parties continued until 10 January 2018. At that point, the Respondent’s lawyers wrote to the Appellant noting that they intended to file an application in this Court seeking a costs assessment in respect of the Appellant’s costs in the Possession Proceedings. That letter provided the Appellant with 21 days to object.

On 12 February 2018, the application for costs assessment was then assigned to Mr Christopher Wall. The costs assessment process commenced in earnest on 26 February 2018, when Mr Wall wrote to the parties.

The Appellant did not reply initially. Following several letters to follow-up, and extensions of time, he replied on 3 May 2018, the date of the extended deadline for Gwendoline to provide particulars. He requested a further extension of time (to 31 May 2018), noting that he had now formally received instructions to act on Gwendoline’s behalf. However, as the primary judge noted, the Appellant had charged Gwendoline for reading each piece of correspondence from Mr Wall up to that point, and the only basis on which such a charge could be justified was if the Appellant already had instructions to act: PJ [59].

Following correspondence with the Respondent’s lawyers, Mr Wall determined that an extension would be granted until 24 May 2018.

The Appellant never wrote to Mr Wall again.

In those circumstances, Mr Wall finalised the costs assessment on 24 May 2018 at $40,000, less the costs assessment filing fee of $2,654.50 (which the Respondent had paid) (the Wall Assessment). That led to a final assessment of the total amount payable pursuant to the order of Davies J of $37,345.50, up to the date of the application for a costs assessment.

On 31 May 2018, Gwendoline died.

Apart from correspondence on 24 July 2018 in which the Appellant wrote to the Respondent’s lawyers asserting that he had instructions from Gwendoline’s executor to “lodge an application for review of the determination of the costs assessor” (which was never made), the Appellant did not write to the Respondent again until 28 February 2019 and then only to seek an extension of time to reply to correspondence.

On 24 July 2020, the Respondent’s lawyers wrote a twelve-page letter to the Appellant, relying on the costs assessment and demanding $287,551.30 be paid either into their trust account or to the Court by 31 July 2020.

On 31 July 2020, the Appellant replied seeking an extension of time until 28 August 2020 to reply to the demand. The Respondent’s lawyers replied on 4 August 2020 requiring confirmation of payment into Court by 7 August 2020. On 5 August 2020, a solicitor employed by the Appellant’s firm replied to confirm that the Appellant would not comply with the demand for payment, and raised various issues arising out of the protracted correspondence to that point. On 6 August 2020, the Respondent’s lawyers replied, making further demands to which the Appellant replied on 7 August, maintaining his request for an extension.

On 1 September 2020, the Respondent filed a Summons in the Equity Division of this Court in which he sought a declaration that the now Appellant, Mr Hartnett, held the amount of $287,551.30 as trustee for the plaintiff, together with an order that the Appellant pay him the amount of $287,551.30. Equitable compensation was also sought together with interest, costs and such “further other orders as are appropriate in the circumstances of the case.” Certain interlocutory relief was also sought.

On 26 February 2021, Slattery J heard argument in relation to a dispute concerning the service of the proceedings. This resulted in a judgment delivered on 11 March 2021 (Bell v Hartnett Lawyers [2021] NSWSC 202 (first Slattery J judgment)), in which his Honour granted leave to the Respondent to proceed against the Appellant and directed that the Possession Proceedings be relisted. That latter order falls to be understood in the context of a number of observations made by Slattery J. In his judgment, Slattery J noted at [10] that:

Apart from dealing with the service of process question, Slattery J referred to a number of other issues that had been raised in relation to the proceedings which it was contended by the Appellant made them vulnerable to being struck out. At [19]-[26] of his judgment, Slattery J said:

His Honour also directed that the matter be listed part heard before him on 19 March 2021 and also that “any motions to amend the originating process in these proceedings, or in relation to the reconstitution of the possession proceedings, may be made returnable before” him on the same date.

On 23 March 2021, Slattery J made directions as follows:

On 26 April 2021, Slattery J made further orders which it is necessary to set out in full (also with emphasis added):

As contemplated by the 26 April 2021 directions, in the absence of agreement between the parties, short submissions in relation to further proposed orders were made. Thus, on 21 May 2021, Mr Sykes of junior counsel for the Respondent sought orders which included:

He further noted in his submissions:

In submissions dated 26 May 2021, Ms King of junior counsel for the Appellant responded to this submission, objecting that:

Section 335(9) of the LP Act provides:

A further directions hearing was held on 27 May 2021 at which a number of issues were evidently identified. This emerges from Slattery J’s first and second directions of that date which were made in both the Equity and Possession Proceedings and were as follows:

On that occasion, his Honour also formally noted in both sets of proceedings that:

In his submissions filed on 11 June 2021 pursuant to Slattery J’s directions of 27 May 2021, Mr Sykes argued (with emphasis added):

Ms King made further submissions in reply, dated 25 June 2021. Those submissions record (emphasis added):

Following further oral argument on 13 July 2021, this and other issues were dealt with by Slattery J in a further judgment delivered on 12 October 2021: Bell v Hartnett Lawyers (No 2) [2021] NSWSC 1270 (second Slattery J judgment). Relevant portions of this judgment need to be noted, not only in order to follow and understand the evolving procedural situation but also because, in the judgment under appeal, Peden J expressly stated that her reasons should be read in conjunction with both of Slattery J’s earlier judgments: PJ [5].

In the second Slattery J judgment, his Honour noted (at [29]) that “[o]n 26 April 2021, the Court reconstituted both the Equity and Possession proceedings to ensure that all necessary (and no unnecessary) parties were joined without occasioning unnecessary additional expense.” His Honour then observed that “[w]hen this matter came before the Court on 27 May 2021, the Court declined Hartnett Lawyers’ request for leave to withdraw as solicitor on the record for Gwendoline’s estate in the Possession Proceedings. But the Court noted that Hartnett Lawyers’ submissions were then advanced on the firm’s own behalf rather than on behalf of Gwendoline’s estate”: at [30].

On the question of joinder of Mr Hartnett as a defendant in the Possession Proceedings, that being the issue the subject of submissions noted at [80] and [81] above, his Honour said (at [96]-[97]):

In an earlier part of his judgment, under the heading “The Court’s Powers to Review the Mortgagee’s Legal Costs”, Slattery J said (at [31]-[40]):

At [43]-[44], his Honour then continued:

Slattery J made extensive orders including for the filing of a schedule setting out the fees or charges alleged to have been unreasonably or improperly incurred, or which were not incurred “pursuant to the mortgage”, together with contentions in support of that position, and the filing of a response to the schedule. Similar orders were made for a schedule in relation to post 14 November 2016 costs, that being the date on which sale of the property settled. His Honour also listed both sets of proceedings for further directions in November 2021.

On 11 November 2021, Slattery J made the following further set of directions:

On 26 October 2021, an Amended Statement of Claim was filed seeking:

On 19 November 2021, the Respondent filed a “Points of Claim” document in both the Equity and Possession Proceedings. Paragraphs 1 and 2 of the Relief Claimed in the Points of Claim document were as follows:

Paragraphs 1-4 of the Points of Claim under the heading The Supervisory Jurisdiction were as follows (omitting particulars):

On 1 December 2021, the Appellant filed a “Reply to Points of Claim” in which he acknowledged the supervisory jurisdiction of the Supreme Court of New South Wales and that he was subject to it as an officer of the Supreme Court of New South Wales, expressly accepting that he was such an officer when appearing as an interstate solicitor on the record in New South Wales.

Both the Points of Claim and the Reply to Points of Claim identified the case numbers for the Possession Proceedings and the Equity Proceedings. Consistent with this, on 16 December 2021, Slattery J ordered that the “Points of Claim, Points of Defence and Points of Reply in these proceedings shall be taken to be pleadings in both the Possession proceedings (2014/354291) and the Equity proceedings (2020/254590)” (emphasis added).

On 7 December 2021, the Appellant filed a Notice of Motion seeking to have both the Equity Proceedings and the Possession Proceedings removed to this Court. That application came on for hearing on 22 March 2022 before Basten JA. The application was made on the basis that the Court’s disciplinary jurisdiction may have been invoked: Bell v Hartnett [2022] NSWCA 42 (the Basten JA judgment). The notice of motion was dismissed.

In dismissing the Notice of Motion, Basten JA noted (at [13]-[14]):

Both sets of proceedings came on for hearing before the primary judge and were heard on 24-25 August 2022. Some six days prior to the trial, the parties filed a Statement of Real Issues in Dispute. Issue 7, under the heading “The Equity Proceedings”, was stated to be “Whether Mr Hartnett is required to disgorge any excessively charged fees?”. That was plainly a reference to the relief sought by the Respondent in the Court’s inherent supervisory jurisdiction.

The position was somewhat confused by a set of supplementary submissions of the Respondent dated 24 August 2022, forwarded to the primary judge some time after Court on that day. In those submissions, the Respondent submitted that the disgorgement could occur “in either the Possession Proceedings in the Court’s inherent jurisdiction or it can be done by way of the restitution claim in the Equity Proceedings.” It was upon this statement in the Respondent’s supplementary submissions that Ms Whittaker SC, who, together with Ms I King, appeared for the Appellant, rested much of her argument on appeal.

Peden J delivered judgment on 8 September 2022: Bell v Hartnett Lawyers (No 3) [2022] NSWSC 1204. Her Honour ordered that:

The Appellant did not go into evidence in the proceedings before Peden J.

Her Honour considered the inherent jurisdiction of the Court at PJ [99]-[114]. She noted that it was not disputed “that Gwendoline was entitled to retain only those “reasonable” costs which were incurred in the enforcement of the mortgage, including obtaining possession and the proceeds of the sale”, referring to Elder’s Trustee & Executor Co Ltd v Eagle Star Nominees Ltd (1986) 4 BPR 9205 at 9209 (McLelland J) and Micarone v Perpetual Trustees Australia Ltd (No 2) [1999] SASC 533 at [32]-[34].

Her Honour also noted that it was accepted by the Appellant as a proposition of law that Gwendoline, as mortgagee, was required to hold the residue of the proceeds of sale on trust for the Respondent, referring to Rajah Kishendatt Ram v Rajah Mumtaz Ali Khan (1879) LR 6 Ind App 145 at 160 (PC), Coroneo v Australian Provincial Assurance Association Ltd (1935) 35 SR (NSW) 391 at 394-395 (Jordan CJ), Weld-Blundell v Synott [1940] 2 KB 107 at 115 (Asquith J) and Adams v Bank of New South Wales [1984] 1 NSWLR 285 at 299 (Hutley JA).

The primary judge reviewed the relevant authorities, including Electrical Trades Union v Tarlo [1964] 1 Ch 720; [1964] Ch 20 (Electrical Trades Union), Atanaskovic & Ors v Birketu Pty Ltd – Supervisory Jurisdiction [2020] NSWSC 573 (Atanaskovic First Instance), Atanaskovic Hartnell v Birketu Pty Ltd (2021) 105 NSWLR 542; [2021] NSWCA 201 (Atanaskovic), Woolf v Snipe (1933) 48 CLR 677; [1933] HCA 5 (Woolf), Kowalski v Cole [2017] SASCFC 23 (Kowalski), Harrison v Tew [1990] 2 AC 523; [1990] 1 All ER 321 (Harrison) and Kelly v Willmott Forests Ltd (in liquidation) (No 4) [2016] FCA 323; (2016) 335 ALR 439 and noted what Slattery J had said at [34]-[36] of the second Slattery J judgment: see [85] above.

The primary judge further noted, at PJ [111], that a complicating factor in this case was that the Respondent was not the client of the Appellant, which was a distinguishing feature of this case from the prior authority to which her Honour had referred. Her Honour went on to hold that this difference was not “an impediment” to the exercise of the Court’s jurisdiction, and, in any event, had not been raised by the Appellant. The primary judge relied on the remarks of Hammerschlag J in Atanaskovic First Instance at [80]-[81] to the effect that in exercising the Court’s supervisory jurisdiction, the Court does not engage in a fixed determination of legal rights “but determines whether one of its officers should be held to ethical and honourable behaviour”. Consistent with this, Hammerschlag J had observed that the Court was not limited by technicalities.

The primary judge then turned to determining quantum. Her Honour first held that no allowance should be made for future costs of the mortgagee as there was no entitlement for Gwendoline to do so.

The primary judge noted that, as a consequence of the exchange of Points of Claim and Reply, the Appellant had conceded a lack of entitlement to charges amounting to $13,316 relating to the preparation of file notes, administrative work, research or “what appears to be research” and “file review”.

The primary judge said that “Mr Hartnett did not submit that I was required to deal with each line item. I accept counsel for Mr Bell’s submissions that a “broad brush” approach can be taken to the assessment of Mr Hartnett’s fees”: PJ [124]. Her Honour then gave examples of what she considered to be “exorbitant overcharging” which she said sufficiently demonstrated the reasons why the Court ought to exercise its supervisory jurisdiction in the matter. Her Honour’s examples were as follows:

In then determining the amount of money payable, the primary judge relied on the costs assessment. As noted above, that assessment fixed Gwendoline’s entitlement to costs at $37,345.00. Gwendoline had authorised the transfer of $288,601.03 to the Appellant. The difference between those two amounts, being $251,255.53, was described below as the “costs differential”, although the Amended Statement of Claim quantified this amount as $238,164.47, as the Respondent had quantified the Appellant’s allowable costs at a higher amount than Mr Wall (namely, $50,436.56).

The Appellant had contended that he was not bound by the Wall Assessment, as he was not a party to it, and further contended that his costs agreement entitled him to charge the amounts which he did charge.

The primary judge awarded the Respondent the full costs differential, holding, at [129], that:

The Appellant further submitted that the matter should be dealt with by way of third-party costs assessment, which had been agreed by the parties in 2021, but rejected by Slattery J in favour of the Court’s assessment of costs: second Slattery J judgment at [79]. The primary judge rejected the Appellant’s reanimation of this submission as inconsistent with ss 56-60 of the Civil Procedure Act 2005 (NSW) following a two-day hearing: PJ [122].

In respect of the issue of competing equities, which the primary judge acknowledged was strictly unnecessary to address, the Appellant had pleaded a “fruits of litigation lien” or a possessory lien over the proceeds of sale, and argued that this should be given priority over the Respondent’s equity of redemption. The primary judge declined to do so on the basis that it would be “unjust in the circumstances where [the Appellant] has charged his client more than is reasonable, and persistently avoided and obfuscated in relation to Mr Bell’s attempts to obtain information for any costs assessment process”: PJ [135].

Further, the Respondent had submitted that the Appellant had been unjustly enriched so as to ground a claim for money had and received, relying on the decision of the High Court in Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498; [2012] HCA 7 at [30]. The primary judge noted that it was not clear which category of unjust factor applied in this case, and therefore declined to uphold the claim for money had and received. No cross-appeal was brought by the Respondent against this conclusion.

By Further Amended Notice of Appeal dated 7 March 2023, the Appellant contended that the primary judge erred in finding that the Court’s jurisdiction (within the Court’s inherent power) extended to ordering him to make any payment to the Respondent. Second, the Appellant contended that, even if there was jurisdiction, the primary judge erred in exercising her discretion to make the orders she did. It was also contended that the making of the orders involved a denial of procedural fairness. Third, the Appellant contended that if the discretion was not wrongly exercised, the quantum was incorrectly assessed, in essence because the primary judge should not have relied on the Wall Assessment to which the Appellant was not a party. Fourth, the Appellant contended that the primary judge erred in finding that the costs of the costs assessment did not fall within the indemnity in the registered mortgage, and that the primary judge ought to have allowed for future costs.

These grounds can conveniently be considered together. The first ground of appeal was that.

The second ground of appeal was that, if the supervisory jurisdiction extended to cover exorbitant charging by a solicitor, the primary judge erred in exercising that discretion on the basis that it was not necessary to do so in the interests of justice. This was said to be for reasons including:

The Appellant’s submissions with respect to Grounds 1 and 2 were grouped together. In effect, the Appellant contended that the invocation of the inherent power of the Court was not necessary to do justice, and thus should not have been invoked. While the Appellant accepted that the Court’s inherent jurisdiction is not limited by technicalities or to defined or closed categories, the Appellant also submitted that any order in the inherent jurisdiction must still be “necessary” in the relevant sense. In other words, it was not enough that such an order be available to the Court; it must be necessary to do justice between the parties, and that it was not necessary in the present case because of the availability of a third party payer costs assessment process under LP Act, albeit that an extension of time would be required to do so. (It was only in the proceedings on appeal that the Appellant indicated that he would not oppose an extension of time and agree to be bound by any assessment, subject to review rights.)

The Appellant also contended that, had the mortgagee been joined to the Equity Proceedings, an account or tracing could have been pleaded, as could a claim against the mortgagee as trustee. The Appellant submitted that these would have been more conventional ways of resolving the dispute and also highlighted the “unnecessariness” of enlivening the Court’s inherent jurisdiction.

In the course of oral submissions, Ms Whittaker sought to make a great deal of the fact that the Appellant was never a party to the Possession Proceedings or the Wall Assessment conducted in respect to those proceedings. She also contended that the only cause of action pleaded in the Equity Proceedings was one for restitution, and pointed out that that claim had failed. Ultimately she sought leave to amend her Notice of Appeal to add a complaint that “the respondent did not seek any relief in the Equity Proceedings based on the exercise of the Court’s inherent jurisdiction to compel payment to him by the appellant and nor did the respondent open his case on this basis”. This was said to amount to a denial of procedural fairness.

The Appellant also contended that the use of the inherent jurisdiction to order payment of money in the circumstances of the current case was without precedent.

The Respondent, in defending the decision of the primary judge, denied that her Honour’s invocation of the Court’s inherent supervisory jurisdiction was heterodox and submitted that, even if the primary judgment involved an extension of the Court’s supervisory jurisdiction, such an extension was warranted and appropriate as a “logical application of established principle”. The Respondent relied on various authorities cited by the primary judge, and also relied on the following passage from GE Dal Pont in Law of Costs (5th Ed, 2021, LexisNexis) at par 15.52:

The Respondent also referred to the decision of Lord Justice Scott, writing for the Court of Appeal for England and Wales, in Gomba Holdings (UK) Ltd v Minories Finance Ltd (No. 2) [1993] Ch 171 (Gomba) in which his Honour stated at 187-188:p

The Respondent also took issue with the Appellant’s claim that the argument based on the Court’s inherent supervisory jurisdiction had not been run in the Equity Proceedings, with a consequent denial of procedural fairness to the Appellant. The Respondent took the Court through much of the complex procedural history of the dispute which it has regrettably been necessary to go into in such detail in these reasons to rebut that suggestion.

Several statements of authority may be noted at the outset of the consideration in relation to the Court’s inherent and supervisory jurisdiction:

In his well-known article “The Inherent Jurisdiction of the Court” (1983) 57(8) Australian Law Journal 449 at 451, Mr Keith Mason, as the subsequent President of the Court of Appeal then was, pointed out that (omitting footnotes):

One of the cases cited in support of the penultimate sentence in this extract was Myers v Elman [1940] AC 282 (Myers). In Myers, a solicitor, who had acted for the defendants in the underlying proceeding, was ordered to pay costs of the plaintiff as the solicitor, acting through his clerk, had allowed defences which he knew to be false to be presented to the Court.

The Appellant placed particular reliance on this Court’s decision in McGuirk and, in particular, the observation by Sackville AJA at [187], with whom Young JA agreed, to the effect that:

It is important to bear in mind that Sackville AJA commenced [187] of his judgment in McGuirk with the observation that “[t]here is authority for the proposition that the court’s inherent jurisdiction is not displaced by rules of court, provided the exercise of the inherent jurisdiction does not contravene the requirements of the rules of court: Landsal at 427, and recognised the tension between that authority and what his Honour went on to say. What was said in Landsal has been noted at [123(4)] above. Landsal is also consistent with Woolf where Dixon J identified three sources of power justifying a particular course. One of those sources was the Court’s general supervisory jurisdiction over solicitors which is a recognised aspect of a superior court’s inherent jurisdiction.

Woolf is inconsistent with any contention that the Court’s supervisory jurisdiction may not be exercised where alternative statutory avenues may provide a remedy. So much also follows from statements by the High Court to the effect that the Court may stay proceedings as an abuse of process in the Court’s inherent jurisdiction (see, for example, CSR Limited v Cigna Insurance Australia Ltd (1997) 189 CLR 345 at 391-392; [1997] HCA 33) given that the Court also enjoys statutory powers that may support such a remedy.

Notwithstanding the Appellant’s strong reliance on McGuirk, Ms Whittaker observed in oral address:

The fact that an application may have been possible under the Queensland LP Act did not mean that this Court’s inherent supervisory jurisdiction over solicitors could not be invoked, and McGuirk did not compel that result, as was conceded by Ms Whittaker. This Court is bound by Woolf which, like Landsal, accepted that the inherent jurisdiction is not displaced by rules of Court. Indeed, were such an argument based on McGuirk at [187] to be accepted, s 23 of the Supreme Court Act which provides that “[t]he Court shall have all jurisdiction which may be necessary for the administration of justice in New South Wales” would supplant the Court’s inherent, supervisory jurisdiction. The Appellant, in his written submissions, endorsed the proposition that a court may exercise its inherent powers in a particular case, even in respect of matters that are regulated by statute or rules of Court, so long as it can do so without contravening any such provision.

I agree with the primary judge that the inherent jurisdiction of the Court, especially that which extends to the supervision of officers of the Court, supported the making of the orders in the present case. Exorbitant charging debases the reputation of the legal profession as well as subjecting clients or others involved in litigation to unwarranted costs. These verities are reflected in statutes of every Australian State regulating the legal profession, as well as in a significant body of case law. Statutes regulating the legal profession require clients not only to be supplied with fee estimates but to be updated regularly if such estimates require revision: see, for example, s 315 of the LP Act which provides:

Legislation also requires any additional charges to be explained and justified, and for acceptance of such additional charges to be agreed to. Failure to comply may amount to unsatisfactory professional conduct or professional misconduct: s 316(7) of the LP Act and s 317(4) of the Legal Profession Act 2004 (NSW), and see, for example, Berger v Council of the Law Society of New South Wales [2019] NSWCA 119 at [371].

The highest standards of integrity are expected of members of the legal profession. That should not need to be spelt out although it has been, in justifiably strong terms, from time to time: see, for example, Dupal v The Law Society of New South Wales [1990] NSWCA 56; New South Wales Bar Association v Cummins (2001) 52 NSWLR 279; [2001] NSWCA 284 at [19]-[20].

In Re Veron; Ex parte Law Society of New South Wales [1966] 1 NSWR 511 at 517, the Court of Appeal remarked that “[i]t has long been recognized that the charging of extortionate or grossly excessive costs by a solicitors may amount to professional misconduct.” It was said by the Court (at 518) that the solicitor’s conduct, in that case, of such gross overcharging “would be regarded as dishonourable by his professional brethren of good repute and competency” and was “disgraceful” (at 551).

In Council of the Queensland Law Society Inc v Roche [2004] 2 Qd R 574; [2003] QCA 469 at [57], McMurdo P said:

More recently, in Scroope v Legal Services Commissioner [2013] NSWCA 178 at [27], Beazley P (with whom Bathurst CJ and Hoeben JA agreed) noted:

The authorities referred to in [123] above and the propositions for which they stand fully support the existence of the jurisdiction which the primary judge held to be engaged. It is an important jurisdiction to which solicitors, as officers of the Court, are subject.

The primary judge’s exercise of that inherent supervisory jurisdiction involved a broad evaluative judgment, recognised in terms by the second ground of appeal to involve the exercise of a discretion. Such a decision is not lightly to be disturbed, and the House v The King (1936) 55 CLR 499; [1936] HCA 40 standard applies whether or not a true discretion is involved: Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256; [2006] HCA 27 at [7], citing R v Carroll (2002) 213 CLR 635; [2002] HCA 55 at [73].

If, notwithstanding Ms Whittaker’s statement to the contrary reproduced at [129] above, the Appellant intended to contend that the primary judge erred as a matter of law because there were alternative ways by which the Respondent could have challenged the charging of unreasonable fees, the reasons already given supply an answer to such a contention.

There is also to be considered in the present case that, when the Respondent did seek information from the Appellant in the context of the Queensland legal profession regulatory regime, he was met with evasion, and threats by the Appellant, the purpose of which may readily be inferred, namely to dissuade the Respondent from pressing for information in relation to the basis of the Appellant’s costs: see [48]-[51] above.

The primary judge’s decision to order the Appellant to make payment to the Respondent pursuant to the Court’s supervisory jurisdiction was entirely open to her, especially in light of the Appellant’s past conduct in relation to possible third party costs proceedings in Queensland coupled with her Honour’s findings as to the exorbitant nature of the Appellant’s charging.

The Respondent, moreover, was based in New South Wales as had been the Appellant’s client. Contrary to a further submission advanced by the Appellant, in light of the Appellant’s history of evasion and threats of counter-suit in relation to the grant of probate of Mabel’s Estate, her Honour was correct to have regard to ss 56-60 of the Civil Procedure Act in informing her decision to exercise the Court’s inherent jurisdiction. This was a case which called out for robust intervention, consistent with fairness to the Appellant, in the interests of justice. For reasons advanced below, there was no denial of fairness to the Appellant who was given every opportunity to justify how his original costs estimate of $3,900-$6,400 was exceeded by so much. Key documents were not produced or tendered in evidence such as any written update of the Appellant’s costs estimate, something required by the LP Act, which governed the Appellant’s professional relationship with Gwendoline.

That the Respondent was unsuccessful in his claim for restitution in the Equity Proceedings, a matter raised by particular (a) of the second ground of appeal (see [115] above), is entirely beside the point. The claim under the supervisory jurisdiction in no way depended upon success in that claim. Nor was the failure to join the mortgagee to the Equity Proceedings necessary. The substantive and unsuccessful claim in those proceedings was for restitution from the Appellant. As far as the additional claim, raised in the Points of Claim, for payment pursuant to the Court’s supervisory jurisdiction was concerned, the mortgagee was neither a necessary nor proper party to those proceedings. Moreover, the fact that Gwendoline had apparently authorised payment to the Appellant did not insulate him from the Court’s inherent supervisory jurisdiction (and he did not contend to the contrary). As between the Appellant and Gwendoline, the Appellant was paid and the orders made by the primary judge did not alter that fact, and no relevant injustice accrued to the Appellant. No reason was advanced in support of the Appellant’s submission that the mortgagee may remain liable to him for costs. The mortgagee’s liability to the Appellant was discharged on the payment to him on 14 November 2016.

In relation to the “reasons” forming sub-paragraphs (e), (f) and (g) of the second ground of appeal, these go to the quantification of the assessment of overcharging and compensation which is dealt with under ground 3 at [150]ff below.

I would also firmly reject the Appellant’s argument that he has been denied procedural fairness. It fails at its first premise, namely that the inherent supervisory jurisdiction had not been raised in the Equity Proceedings. It had been, and the argument as propounded on the Appellant’s behalf appeared to overlook the following matters:

The Appellant had fair notice of the ambit of the challenge to his fees. The submission that he ought to have had fair notice so as to “have been able to contest the allegations in the usual way” is answered by the fact that he did have such notice. That he did not choose to avail himself of that opportunity does not mean that he was denied it.

In reaching this conclusion, I am not unmindful of the fact that, in his supplementary submissions provided after the conclusion of the first day of the hearing and after evidence had closed, Mr Sykes for the Respondent put that disgorgement could be ordered in the Court’s inherent jurisdiction in the Possession Proceedings (see [97] above). This was a curious submission which overlooked the obvious fact that the Appellant was not a party to the Possession Proceedings (although he had not been excused from acting for Gwendoline in those proceedings). Plainly enough, the primary judge properly did not consider it appropriate to give the relief in the Possession Proceedings. Her Honour gave it in the Equity Proceedings, consistent with what the Respondent had sought in the Point of Claim and Issue 7 in the Statement of Issues: see [96] above. There was no prejudice to the Appellant given the timing of the provision of the supplementary submissions.

Further, it should be noted that, also on 24 August 2022, Mr Sykes filed submissions (updated with Court Book references) making plain that the issues had been narrowed inter alia by reference to the Points of Claim and the Reply to Points of Claim. Both sets of Points of Claim contemplated relief being granted in the Equity Proceedings pursuant to the Court’s inherent supervisory jurisdiction.

For the above reasons, appeal grounds 1 and 2 should be rejected.

Ground 3 of the Further Amended Notice of Appeal involved a challenge to the quantification of the amount ordered to be paid to the Respondent. This challenge was made on the following bases:

One can start with the third of these “particulars”. It is not correct to contend that the primary judge simply accepted the Wall Assessment. Far from it. As set out at [106] above, the primary judge gave seven examples involving analysis of the reasonableness or appropriateness of significant components of the Appellant’s charging practices. Although they are expressed in compressed form, it is evident that her Honour’s consideration involved a good deal of scrutiny of the Appellant’s underlying invoices. Moreover, not a word was advanced on appeal in writing or orally attacking this analysis or suggesting that it was wrong or misconceived. It may be added that her Honour’s analysis did not but could have added as an eighth example the Appellant’s charging of an “uplift fee” of $43,033.34 on 14 November 2016 in circumstances where such a fee could only have been charged pursuant to a conditional costs agreement which would have been required to be signed by Gwendoline: see [21] above. There was no evidence that Gwendoline had ever signed such an agreement, and the agreement in evidence was unsigned.

It ill-behoved the Appellant to attack the quantification in circumstances where it was within his power to seek to justify the charges to the primary judge but where he chose not to do so. In these circumstances the primary judge was left with the issues raised in her seven examples, which added up to significant sums; the original costs estimate of $3,900-$6,400; the absence of any written disclosure to Gwendoline of any substantial changes in the fee estimate, as required by s 315 of the LP Act (see [19] above); the absence of any evidentiary assistance from the Appellant and the costs assessment that had been conducted by Mr Wall.

It was not, contrary to the Appellant’s argument, a question of the Appellant being bound by the Wall Assessment in circumstances where he was not a party to it (because he was not a party to the Possession Proceedings) but, rather, a judge making use of such material as she had in order to undertake a quantification exercise in circumstances where the one party with peculiar and personal knowledge, and the ability, to explain the charges declined to take the few short steps to the witness box in order to do so. It is trite that such a circumstance provides a ready basis for the drawing of a negative inference against that party: Cullen v Welsbach Light Co of Australasia Ltd (1907) 4 CLR 990 at 1002; [1907] HCA 3; Ellor v Selfridge and Co (1930) 46 TLR 236. As Rich J put it in Insurance Commissioner v Joyce (1948) 77 CLR 39 at 49; [1948] HCA 17:

“All evidence is to be weighed according to the proof which was in the power of one side to have produced, and in the power of the other to have contradicted”: Blatch v Archer (1774) 1 Cowp 63 at 65.

The Appellant submitted that, as he was not a party to the Wall Assessment, he could not participate in it in his own interest or appeal the outcome. Whilst that may be, that would only be relevant if the primary judge mistakenly considered that he was bound by it, which she did not. What was significant was that, given the opportunity to attack it before the primary judge, the Appellant did not do so. The only qualification to that is that there was an issue between the parties, pressed on appeal, that the Wall Assessment was undertaken on a party/party basis as opposed to a solicitor/client basis in circumstances where it appeared to be accepted that the latter basis was appropriate: see Uniform Civil Procedure Rules 2005 (NSW) r 42.25.

Mr Sykes, who appeared for the Respondent, did not accept that the Wall Assessment had been conducted other than on a solicitor/client basis. He accepted that the heading of the application for a costs assessment referred to it being on a party/party basis as did some of the headings on the correspondence. On the other hand, he pointed to Mr Wall’s statement in his preliminary assessment of costs (having received, initially, no reply from Gwendoline) that:

It was open to the primary judge to conclude that the Wall Assessment was conducted on an indemnity basis.

The primary judge’s assessment was an informed assessment having regard to the information that was before the Court, and was logical, fair and reasonable in all of the circumstances of the case: Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 at [22]; Hamod v State of New South Wales [2011] NSWCA 375 at [820]. It met these criteria given:

Ground 4 of the Further Amended Notice of Appeal was that the primary judge erred in finding that:

The primary judge’s reasoning in respect of this aspect of the proceedings at first instance was as follows (at [116]-[120]):

No reason was advanced impugning her Honour’s reasoning or the authorities on which she relied. Ground 4 should also be dismissed.

By notice of contention, the Respondent contends that the primary judge erred in finding that the Appellant’s retention of legal fees greater than those to which he was entitled “did not fall within the accepted category of unjust factors, namely that the appellant’s retention of the benefit was illegal as he had no contractual or statutory right to retain that benefit.”

It is not necessary to address this ground which was only faintly pressed by Mr Sykes in any event.

For all of the foregoing reasons, the appeal should be dismissed with costs.

ADAMSON JA: I have had the benefit of reading the reasons of the Chief Justice in draft. I agree with his Honour’s reasons and the orders proposed. I wish to add the following reasons of my own.

The further amended notice of appeal filed on 7 March 2023 seeks the following orders:

Ground 3A was added in the course of the hearing of the appeal. Because ground 3A, if made out, will require the appeal to be allowed and render the consideration of all other grounds moot, I propose to address ground 3A first.

In the present case, as the Chief Justice has explained, there were two proceedings, which were heard together:

The starting point is that, with certain exceptions, a person can only be affected by an order made in proceedings to which that person is a party: John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd; Walker Corporation Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19 at [129] and [131] (French CJ, Gummow, Hayne, Heydon and Kiefel JJ); News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410; [1996] FCA 870 (News Ltd) at 524-525 (Lockhart, Von Doussa and Sackville JJ). Exceptions include a situation where a solicitor acting for a party is bound by findings of fact made in the proceedings for the purposes of an application that the solicitor be liable for the party’s costs personally: see Sch 2 of the Legal Profession Uniform Law Application Act 2014 (NSW), cl 6.1. However, absent statutory exceptions, the common law principle is basic to the requirement of procedural fairness: Pegang Mining Company Limited v Choong Sam [1969] 2 MLJ 52 at 55-56 (Diplock LJ), cited with approval in News Ltd at 524; see also State of Victoria v Sutton (1998) 195 CLR 291; [1998] HCA 56 at [76]-[81] (McHugh J).

As referred to in the Chief Justice’s detailed recitation of the procedural history of the two proceedings, an order was made by Slattery J on 16 December 2021 that the points of claim, points of defence and points of reply were to be taken as the pleadings in both the Equity and Possession Proceedings. While I understood it to have been accepted in this Court that this order neither had the effect of making Mr Hartnett a party to the Possession Proceedings nor of making Gwendoline Bell a party to the Equity Proceedings, the effect of the points of claim filed on 17 November 2021 was to claim the following relief against Mr Hartnett in the Equity Proceedings:

Thus, the effect of the points of claim, combined with the order made by Slattery J on 16 December 2021, was to expand the relief claimed in the Equity Proceedings well beyond that which had been claimed in the originating process (which was limited to a claim for money had and received) and to put Mr Hartnett on notice of that claim. Although Mr Hartnett was justifiably confident that he could defeat the claim for money had and received (and did defeat it), the points of claim contained additional claims against him which required him to justify the amount of his fees. Further, he was squarely on notice that the Court’s supervisory jurisdiction against legal practitioners was being invoked against him.

The order made on 16 December 2021 had, for the reasons given above, substantial significance in the proceedings. It appears that its forensic consequences may not have been appreciated by those appearing for him in the Court below or, indeed, in this Court until it was drawn to their attention by this Court in the course of argument.

Further, Mr Sykes, who appeared for Mr Bell in this court and in the Court below, accepted that he had not conducted the case in the way found by the primary judge. However, he contended that the trial judge’s approach was “open on the pleadings”, including the points of claim.

It is preferable that inconsistencies between originating processes and points of claim be avoided. However, where points of claim have been ordered and contain claims that supplement those in the originating process, the defendant is on notice that additional claims have been made and will be determined by the Court, whether or not they are included in the originating process. The effect of the order of 16 December 2021 which made the points of claim “joint” was to merge the two proceedings. While such an order may only rarely be appropriate, the order was not challenged in the present case. The order had important forensic consequences in the present case including that it rendered Mr Hartnett susceptible to the relief which was ultimately granted (although it had not been claimed in the originating process in the Equity Proceedings).

Ms Whittaker SC, who appeared with Ms King on behalf of Mr Hartnett, argued that the inherent jurisdiction could not be exercised in circumstances where conventional avenues were available to Mr Bell (each of which was said to have been sufficient to protect his interests and achieve the desired result of fixing the amount that could be deducted from the proceeds of sale). These avenues included the following:

The utility of the proceedings described in (1) above was explained by Parker J in Commonwealth Bank of Australia v Pascoe and Scott as trustees of the estate of Usha Wati Charan [2018] NSWSC 1332 at [40]:

The utility of the avenue in (2) above (the non-associated third party costs assessment) was common ground. The parties made a joint submission to the Court below (Slattery J) that an order be made referring the matter for third-party costs assessment, which was rejected on the basis that it “may only generate further disputation between these parties” and would not be the “preferable course”: Bell v Hartnett Lawyers (No 2) [2021] NSWSC 1270 at [65]-[78]. The primary judge (Peden J) noted that Slattery J “also did not accept the parties’ joint submission that the appropriate way forward was for the costs to be subject to a third-party payer costs assessment”: Bell v Hartnett Lawyers (No 3) [2022] NSWSC 1204 at [96]. As it happens, this is the very order which Mr Hartnett has proposed to this Court as a solution to the impasse between the parties and one in respect of which he has given undertakings (see below).

If the third party payer assessment (which would have been conducted pursuant to s 335(6) of the Legal Profession Act 2007 (Qld) (the Queensland Act)) had been undertaken:

At the conclusion of the hearing of the appeal, Ms Whittaker offered the following undertakings to the Court with a view to the matter being resolved by a third party payer costs assessment:

Ms Whittaker argued that the consequence of the availability of these alternative avenues was that the inherent jurisdiction was not available because it was not “necessary” that it be exercised.

As the Chief Justice has explained in his Honour’s reasons, the Court’s inherent jurisdiction includes a supervisory jurisdiction over legal practitioners. The charging of fees is a fundamental aspect of the relationship between a solicitor and a client. I am not persuaded that the Court’s jurisdiction ought be constrained by the principles which apply when its inherent jurisdiction is invoked in circumstances which do not involve the conduct of officers of the Court. The Court’s supervisory jurisdiction is not displaced by the sufficiency of the mechanisms postulated by Ms Whittaker to protect Mr Bell’s interests.

GRIFFITHS AJA: I agree with the Chief Justice.