Supreme Court New South Wales

• Medium Neutral Citation: Paramount Lawyers Pty Limited v Maneschi [2012] NSWSC 877
• Hearing dates: 30 November 2011
• Decision date: 03 August 2012
• Before: Rothman J

Decision

(1) To the extent necessary, leave to appeal granted.

(2) Appeal allowed in part.

(3) The judgment of the Local Court issued on 8 June 2011 between the parties in these proceedings be set aside and in lieu thereof the following orders issue:

(a) Judgment for the defendant herein, Mr Maneschi, in the sum of $22,000;

(b) The plaintiff herein, Paramount Lawyers Pty Ltd, pay interest on the aforesaid judgment from 21 September 2010 until today in accordance with s 100 of the Civil Procedure Act 2005 at the Reserve Bank of Australia cash rate operating for the relevant period;

(c) The plaintiff pay interest pursuant to s 101 of the Civil Procedure Act 2005 from the date of judgment until payment in accordance with the prescribed rate.

(4) The defendant herein, Mr Maneschi, file and serve a written submission on costs by 5pm 14 days from the date of this judgment and the plaintiff herein file and serve any reply thereto by 5pm 7 days from the receipt by it of the defendant's written submission on costs. Costs will be dealt with on the basis of the written submissions.

(5) Leave reserved to address the terms of the order, any other order necessary to reflect the reasons and any special or other order for costs and interest.

• Catchwords: APPEAL - assignment of debt arising under contract - counsel's fees - precise identification of debt - misleading or deceptive conduct - estoppel; CONTRACT - costs agreement - counsel's fees - assignment of debt arising under contract - precise identification of debt - misleading or deceptive conduct - estoppel
• Legislation Cited: Civil Procedure Act 2005; Fair Trading Act 1987; Legal Profession Act 1987; Legal Profession Act 2004; Local Court Act 2007; Motor Accident Compensation Regulations 2002; Motor Accident Regulation 2005; Supreme Court Act 1970
• Cases Cited: Akron Tyre v Kittson (1951) 82 CLR 477; Allesch v Maunz (2000) 203 CLR 172 at 180; Alramadan v Director of Public Prosecutions (NSW) [2007] NSWCCA 322; Bakewell v Deputy Federal Commissioner of Taxation (SA) (1937) 58 CLR 743; Brice v Bannister (1878) 3 QBD 569; Briscoe v Briscoe [1892] 3 Ch 543; Bunbury Foods Pty Ltd v National Bank of Australasia Limited (1984) 153 CLR 491; Calvin v Carr [1980] AC 574; (1979) 53 ALJR 471; [1979] 1 NSWLR 1; Cooper v Micklefield Coal & Lime Co Ltd (1912) 107 LT 457; Deputy Commissioner of Taxation v Bluebottle UK Ltd (2006) 68 NSWLR 558; Bruce v Tyley [1916] HCA 34, (1916) 21 CLR 277; Deputy Commissioner of Taxation v GIO (1993) 117 ALR 61; (1993) 45 FCR 284; Devefi P/L v Mateffy Pearl (1993) 113 ALR 225 at 235, (1993) 37 IPR 477; Firth v Centrelink & Anor [2002] NSWSC 564; Franks v Equitiloan Securities Pty Ltd [2007] NSWSC 812; Fung Kai [1951] AC 489; Gunsbourg, Re (1919) 88 LJKB 479; International Leasing Corp (Vic) Ltd v Aiken (1966) 85 WN (Part 1) (NSW) 766; [967] 2 NSWR 427; Keesing v Adams t/as Spencer Whitby & Co [2010] NSWSC 336; Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; (2010) 241 CLR 390; Krishna v Director of Public Prosecutions (NSW) [2007] NSWCCA 318; Legione v Hatley (1983) 152 CLR 406; Levy v Bergseng [2008] NSWSC 294; (2008) 72 NSWLR 178; Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd (St Martins Corporations Case) [1994] 1 AC 85 at 103; Low v Bouverie [1891] 3 Ch 82; M v The Queen [1994] HCA 63; (1994) 181 CLR 487; Makinson, ex parte v The Minister (1940) SR (NSW) 96; Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890; Morris v The Queen [1987] HCA 50; (1987) 163 CLR 454; Moschi v Lep Air Services; Lep Air Services v Rolloswin [1973] AC 331; Newcombe v Newcombe (1934) 34 SR (NSW) 446; Parkdale Custom Built Furniture v Puxu [1982] HCA 44; (1982) 149 CLR 191; Patience Makinson v The Minister, ex parte (1940) SR (NSW) 96; Percival v Dunn (1885) 29 Ch D 128; Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355; R v R [1990] HCA 51; (1989) 18 NSWLR 74; Redman v Permanent Trustee Co of New; Shepherd v Federal Commissioner of Taxation (1965) 113 CLR 385; South Wales (1916) 22 CLR 84; Southern British National Trust Ltd v Pither (1937) 57 CLR 89; Tailby v Official Receiver (1883) 13 App Cas 523; Thomson v Palmer (1933) 49 CLR 507; Tolhurst v The Associated Portland Cement Manufacturers (1900) Ltd [1903] AC 414; Van Lynn Developments Pty Ltd v Pelias Construction Co Ltd [1969] 1 QB 607; Westralian Farmers Ltd v Commonwealth Agricultural Service Engineers Ltd (in Liq) [1936] HCA 6; (1936) 54 CLR 361; Westralian Farmers v Southern Meat Packers [1981] WAR 241; W F Harrison & Co v Burke [1956] 1 WLR 419; Williams v The Queen [1987] HCA 36; (1986) 161 CLR 278; Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741; Young v Queensland Trustees Ltd [1956] HCA 51; (1956) 99 CLR 560
• Texts Cited: J. W. Carter, Breach of Contract, second edition, (1991), The Law Book Company
• Category: Principal judgment
• Parties: Paramount Lawyers Pty Limited (plaintiff); Roberto Maneschi (defendant)
• Representation: Counsel: A.C. Harding (plaintiff); P. Wass and D. Scully (appearing for defendant at the hearing); Solicitors: Verekers Lawyers (plaintiff); Mason Black Lawyers (appearing for defendant at the hearing)
• File Number(s): 2011/209613

Judgment

1 Paramount Lawyers Pty Ltd (hereinafter "Paramount"), the plaintiff, appeals judgment of the Local Court delivered ex tempore on 8 June 2011.

2 Paramount performed legal work for the defendant, Mr Roberto Maneschi, for which purpose counsel, Mr Branson QC, was engaged. Mr Maneschi paid counsel directly and obtained from Mr Branson a purported assignment of the debt owed to counsel by Paramount. Mr Maneschi then "settled" the account with Paramount and successfully proceeded against Paramount in the Local Court, for the debt said to be assigned to him by counsel.

The Claim on Appeal

3 Paramount appeals the judgment on three broad bases, alleging that:

(i)  the purported assignment was invalid because: the debt is incapable of assignment; any purported assignment is inconsistent with the Legal Profession Act 2004 (hereinafter "the Act"); and/or the quantum of the debt purportedly assigned was not correctly stated in the assignment and impossible to ascertain;

(ii)  the debt, if it were assigned to Mr Maneschi, was unenforceable by him, because it had been procured by misleading and deceptive conduct; and

(iii)  if the debt were assigned validly and if it were enforceable, Paramount is indemnified by Mr Maneschi for the debt under the terms of a retainer contract between Mr Maneschi and Paramount.

4 The defendant, Mr Maneschi, filed an amended notice of contention dealing with issues not expressly addressed in the learned magistrate's reasons for judgment. The contention joins issue with Paramount's arguments on the existence and effect of conduct that was misleading and deceptive (see [3(ii)] above), and the existence and effect of any alleged indemnity in the retainer contract. Mr Maneschi also relies on an estoppel, being that Paramount is estopped from denying the debt was owing or the amount thereof. In these reasons, the issues raised by the contention shall be dealt with at the same time as the corresponding issue on the appeal.

5 Paramount also alleges "a denial of procedural fairness", being, it is said, the failure of the learned magistrate to deal expressly, in her reasons for judgment, with the issues identified in [3(ii)] and [3(iii)] above.

Facts

6 The facts are in very short compass and are relatively uncontroversial. The details of the controversy that gave rise to the need to engage lawyers (the original proceedings) initially are partly relevant to the current issue; they were personal injury proceedings (hereinafter "the initial proceedings") arising from a motor vehicle accident. Mr Maneschi made contact with Paramount and, on 23 February 2009, Paramount sent a costs disclosure document to Mr Maneschi. During the course of the proceedings giving rise to the fees, Paramount, it seems, kept no records of time expended and its costs agreement did not contract out of the costs restrictions in the motor accident compensation regulations (see Motor Accident Compensation Regulations 2002 reg 11 and Schedule 1).

7 Enquiry, or initial contact, was made with Mr Branson, who, on 11 November 2009, sent a document entitled "Disclosure and Conditional Costs Agreement" (hereinafter "the Branson costs agreement") to Paramount. The Branson costs agreement was forwarded by Paramount to Mr Maneschi on 16 March 2010.

8 On 19 March 2010 (three days after Paramount sent the Branson costs agreement to Mr Maneschi), the initial proceedings settled, inclusive of costs and disbursements. Paramount was to hold the settlement funds pending an agreement as to costs.

9 On 25 March 2010, Mr Maneschi sought to obtain Paramount's account and obtained independent legal advice on his rights under the Act, in relation to these costs. On 14 April 2010, Mr Branson sent a memorandum of fees to Paramount. The memorandum of fees is a tax invoice for $29,205. Mr Branson wrote in the following terms:

"I note that prior to the Informal Settlement Conference I informed Mr Meakes of counsel that my fees in this matter would not exceed the sum of $20,000.00 plus GST that is, a total of $22,000.00. It is entirely a matter for Mr Maneschi as to whether he provides instructions to pay the sum of $29,205.00 or the sum stated by me to be the estimate of my fees." (exhibit A, 254)

Hereinafter the foregoing extract (or its effect) will be referred to as "Mr Branson's Concession".

10 On 13 May 2010, Paramount sent a tax invoice (exhibit A, at 316 et seq) to Mr Maneschi for the legal services provided. The amount also charged disbursements, which included counsels' fees.

11 On 10 June 2010, Mr Maneschi paid Mr Branson an amount of $22,000 (including GST) purportedly, as consideration for the purported assignment of the debt of $29,205 (hereinafter "the assignment") to which I have already referred.

12 The assignment (omitting the formal parts) was in the following terms:

"DEED OF ASSIGNMENT OF DEBT made the 10th day of June 2010

BETWEEN:

Christopher Branson QC of Suite 701, 70 Castlereagh Street, Sydney in the State of New South Wales ("the Assignor")

AND:

Roberto Maneschi of 374 Darling Street, Balmain in the said State ("the Assignee"')

RECITALS:

A. On or about 5 November 2009, the Assignor was briefed by Paramount Lawyers, a law practice within the meaning of the Legal Profession Act 2004 ("the Act").

B. The brief was to advise and appear on behalf of the Assignee in relation to loss and damage sustained by the Assignee in a motor vehicle accident which occurred on 25 December 2008.

C. On or about 11 November 2009, the Assignor entered into a Conditional Costs Agreement with Paramount Lawyers pursuant to s. 322 (1)(c) of the Act.

D. On or about 16 March 2010, Paramount Lawyers sent to the Assignee the Assignor's Conditional Costs Agreement in purported compliance with the Act.

E. On 19 March 2010, the Assignee's claim was settled in the sum of $525,000 inclusive of costs.

F. A dispute has arisen between the Assignee and Paramount Lawyers as to the professional costs and disbursements which are properly payable to that firm.

G. On or about 14 April 2010, the Assignor issued to Paramount Lawyers a Tax Invoice in the sum of $29,205 inclusive of GST ("the Debt") which the Assignor believes to be due and payable.

H. The Debt has not been paid by Paramount Lawyers to the Assignor.

THEREFORE BY THIS DEED:

1. ASSIGNMENT OF DEBT

1.1 The Assignor as the legal and beneficial owner of the Debt hereby absolutely passes, assigns and transfers the legal and equitable right and ownership to the whole of the Debt to the Assignee with the intent that the Assignee shall, from express notice in writing signed by the Assignor being given to the Debtor, such Debt shall be and be deemed to have been effectively assigned both at law and in equity.

1.2 The Assignee accepts the assignment of the Debt from the Assignor under the terms of this Deed.

1.3 The assignment of the Debt to the Assignee is free of all mortgages, charges and encumbrances of whatsoever kind or nature.

1.4This assignment is not an assignment by the Assignor to the Assignee by way of charge.

2. COVENANT FOR FURTHER ASSIGNMENT

2.1 If for whatever reason the assignment to the Assignee of the Debt is not absolute and fully effective both at law and in equity, then the Assignor covenants with the Assignee that the Assignor will sign all further documents as may be reasonably required by the Assignee to more fully, perfectly and absolutely pass, assign and transfer the legal right to the Debt to the Assignee.

3. NOTICE IN WRITING TO THE DEBTOR

3.1The Assignor shall execute upon the execution of this Deed the Notice of Assignment ("the Notice") in the form set out in the Schedule to this Deed which Notice shall be served by the Assignee or the Assignee's representative upon the Debtor.

4. STAMP DUTY

4.1The Assignee agrees to promptly pay any stamp duty assessed as payable in respect of the assignment to him of the Debt and indemnifies the Assignor against any liability to pay stamp duty in respect of this assignment.

5. NO WARRANTY AS TO PAYMENT

5.1 It is expressly acknowledged by the Assignee that the Assignor gives no warranty and makes no representation to the Assignee in respect to the Debtor's capacity or financial capability to pay the Debt.

5.2 The Assignee hereby expressly acknowledges that the Assignee is not relying on anything said or represented to the Assignee by the Assignor in respect of the Debtor's capacity and/or willingness to pay the Debt.

CONSIDERATION

6.1 The consideration for the assignment of the Debt is the payment by the Assignee to the Assignor of the sum of twenty thousand dollars ($20,000) plus GST, the receipt whereof is hereby acknowledged by the Assignor."

13 The document was executed in the usual manner.

14 On 21 June 2010, Mr Maneschi proposed to refer Paramount's costs invoice for assessment, pursuant to the Act. On 30 June 2010, Mr Maneschi wrote to Paramount setting out a proposal to resolve the issues, which included an offer of $45,000 inclusive of fees for counsel and GST and the following note:

"Please note that if you do not agree to the amount for costs of $45,000 inclusive of fees for Counsel and GST you are to immediately refer your file for assessment of the entire Bill of Costs."

15 Mr Maneschi pursued this offer on 7 July 2010, and he required a response by 5pm on 8 July 2010. On 8 July 2010, Mr Maneschi extended the time for response until 3pm on 9 July 2010.

16 There was a continuing exchange of correspondence between Paramount and Mr Maneschi, as a result of which the offer, or more accurately a new offer in identical terms, was said to remain open until 2pm on 28 July 2010. Immediately before the conclusion of the period during which the offer was open, there was a flurry of exchanges (extracts or summaries of which appear below).

17 On 23 July 2010, Paramount wrote to Mr Maneschi (exhibit A, at 274) requesting an indication from him as to whether he wanted to pay more than $22,000 (inclusive of GST) to satisfy the fees of Mr Branson. There was no direct response on that issue (see also the letter of 22 July 2010: exhibit A, at 273).

18 On 23 July 2010, at 4.13pm, and after the above letter from Paramount had been received, Mr Maneschi, through his new solicitors, wrote in order to emphasise:

"My client's offer in relation to your fees and fees for both counsel are included in the amount of $45,000 inclusive of GST."

19 I read the foregoing passage as if it read "in my client's offer, your fees and fees for both counsel are included etc".

20 On 26 July 2010, Paramount reminded Mr Maneschi that he needed "to instruct/direct on Mr Branson's fees", being a reference to the difference between $22,000 and $29,205. Paramount had already sent to Mr Maneschi the note from Mr Branson of 30 June 2010, recited in part at [12] above, which included Mr Branson's concession.

21 At 6.06pm that evening (26 July 2010), Mr Maneschi's solicitors responded to the foregoing email by remarking that Mr Maneschi, "will not be providing any instructions to you to pay any amounts to either Counsel retained by your firm." They extended the time for which the offer remained open until 5pm, 27 July 2010.

22 At 9.39am on 27 July 2010, Paramount sent a further reminder, which opined that Mr Branson may pose some difficulty; repeated the terms of Mr Branson's concession; requested Mr Maneschi to clarify the amount to be paid to Mr Branson pursuant to Mr Branson's concession; and, remarked that Paramount considered the offer open until it had communicated with Mr Branson (exhibit A, 277).

23 On 27 July 2010, after the email referred to in the immediately preceding paragraph, Mr Maneschi's solicitors wrote to Paramount (sent by facsimile), in which, after referring to previous correspondence to the effect that "our client is not obliged to pay the Counsel's fees incurred by your firm", said:

"They [the past communications] provide sufficient reason why our client is not prepared to provide you with instructions to pay either Counsel. There is a further reason. Although proper disclosure was not made to our client of Mr Branson's fee agreement with your firm it appears that Mr Branson QC made disclosure to your firm.

Accordingly our client paid a sum of money to Mr Branson QC for his fees by way of bank cheque." (exhibit A, at 279-280. Emphasis added.)

24 Mr Maneschi's solicitors sent a further email to Paramount, at 4.22pm on 27 July 2010, confirming that on "10 June 2010 our client paid by way of bank cheque the sum of $22,000 to Mr Branson QC." At 5.26pm on 27 July 2010, Paramount sent an email in the following terms:

"I accept what you say about Mr Branson QC fees [sic], subject to it being confirmed by Mr Branson QC that the said sum is the full and final payment in satisfaction of his fees totalling $22,000.00, on this basis and noting Mr Branson QC fees (sic) are paid, in principle I accept the offer of an additional $45,000 which does not include Mr Branson QC fees (paid $22,000), as he has already been paid." (exhibit A, at 282)

25 Later that day (27 July 2010), Paramount sent further correspondence to the following effect:

"On the proviso that Mr Branson's fees have been satisfied and paid in full by your client, we accept your offer of $45,000 inclusive of GST for our costs and the amount specified in your letter of 20 July 2010 for our disbursements.

Please provide your client's authority to have the sum of $80,912.68 transferred to our office account." (exhibit A, at 283)

26 At 12.54pm on 28 July 2010, Mr Maneschi responded to the effect that because the acceptance referred to in the immediately preceding paragraph was conditional, "there is clearly no settlement". Further, the letter noted:

"We can confirm that the payment of $22,000 to Mr Branson QC was not made in full and final satisfaction of his fees." (exhibit A, at 285)

27 To the foregoing response, Paramount reiterated (exhibit A, at 287) that if Mr Maneschi were willing to "pay [Paramount] $45k [sic] clear of payment made to Branson we accept." Paramount also sent an email to Mr Branson asking him to confirm whether Mr Maneschi had paid him $22,000 on 10 June 2010.

28 At 1.24pm on 28 July 2010, Paramount sent a message to Mr Maneschi's solicitors asking: "If we have misinterpreted anything in relation to your offer can you please call us well before 2.00pm". There was no reply to this request. At 1.48pm on 28 July 2010 (12 minutes before the extended deadline for acceptance of the offer), Paramount sent an email to Mr Maneschi's solicitors in the following terms:

"Noting time constraints please be advised your offer is accepted."

29 Shortly after the foregoing email, Mr Maneschi's solicitors confirmed that Paramount had "accepted our offer contained in our letter dated 22 July 2010". They advised that they would obtain Mr Maneschi's authority to authorise payment of an amount, inclusive of GST, from trust monies into the general account, which amount was to pay for "your costs, counsel fees and disbursements".

30 Correspondence ensued, which seems to be irrelevant, relating to whether settlement had or had not occurred. The correspondence seems to have arisen from the terms of a letter said to have been received by Mr Maneschi's solicitors at 6.35pm on 28 July 2010, which Paramount claims they did not send.

31 On 30 August 2010, Mr Maneschi's solicitors sent a notice to debtor of assignment of debt informing them, for the first time, that Mr Branson had "sold and transferred to Mr Roberto Maneschi all rights to his claim against you arising from his brief to advise and appear for Mr Maneschi in relation to a motor accident that occurred on 25 December 2008, in the amount of $29,205" (exhibit A, 301). On 10 September 2010, Mr Maneschi sent a notice of assignment of debt dated 10 June 2010, which notice was, omitting formal parts, in the following terms:

"SCHEDULE Notice in Writing of Assignment of Debt

To: Paramount Lawyers of 99 Moore Street, Liverpool in the State of New South Wales ("the Debtor")

A.You, the Debtor, are indebted to Christopher Branson QC ("the Assignor") in the sum of twenty nine thousand two hundred and five dollars ($29,205) ("the Debt").

B.The Debt is immediately due and payable by you as the Debtor to the Assignor.

THE ASSIGNOR HEREBY gives you express written notice that by Deed of Assignment dated the ... day of June 2010, the Assignor passed, assigned and transferred absolutely the whole of the Assignor's legal and equitable right and ownership to the Debt to Roberto Maneschi ("the Assignee") with intent that the Assignee is now the owner of the Debt and payment of the Debt should be made to the Assignee.

The Assignee now has all legal and other remedies in respect of the Debt including the right to enforce payment of the Debt by you, the Debtor, and full power to give to you the Debtor a good discharge for the Debt without the concurrence of the Assignor."

32 Paramount did not, and has not, paid the debt claimed by Mr Maneschi arising from the assignment. Mr Maneschi issued proceedings in the Local Court. This appeal arises from the decision in those proceedings.

Local Court Proceedings and Judgment

33 After a very brief introduction by each counsel, the Local Court proceeded to receive evidence, largely based upon a statement of Mr Maneschi, which, with attachments, was approximately 51 pages in length. Mr Maneschi adduced further oral evidence and was cross-examined. He also adduced a statement by Mr Branson, which was tendered without objection and upon which there was no cross-examination.

34 Paramount adduced evidence from the relevant partner acting in the initial proceedings by way of an affidavit sworn 28 February 2011. As would be clear from the foregoing statement of facts in these reasons for judgment, there was significant documentation adduced and relied upon before the learned magistrate. The parties requested (and were granted) leave to file written submissions and to address on those submissions. When the matter returned to the Local Court, Mr Maneschi sought leave to file a reply in Court, which leave was granted, and the cross-examination of the partner in Paramount continued.

35 At the close of the evidence, the written submissions were sent by email to the magistrate and the matter was adjourned to a further date. On that later date her Honour, after some discussion with counsel, delivered an ex tempore judgment. Her Honour dealt with the main thrust of Paramount's submissions, namely, the validity and enforceability of the assignment to Mr Maneschi. Her Honour came to the view that there was nothing in the Act "which precludes that arrangement", being a reference to the assignment.

36 Her Honour took the view that even though, in the ordinary course, barristers' fees are claimed by a solicitor from the client, they are, in fact, costs incurred by the solicitor in engaging the barrister and there is nothing in the Act that precludes arrangements being made between the client and the barrister such as those made in these proceedings.

37 As a consequence of her Honour's view on the "main thrust" of Paramount's submissions, her Honour gave judgment for the plaintiff, Mr Maneschi, in the Local Court. Her Honour did not expressly deal with the submissions relating to misleading and deceptive conduct or the indemnity that Paramount alleged arose from the terms of the contract or arrangement.

38 Nevertheless, her Honour expressed the view that she accepted the submissions of Mr Maneschi, or made on his behalf, and therefore expressed a view that was consistent with judgment for the plaintiff, which issued as a result of those reasons. To the extent that no detailed reasons for judgment were given on these issues, this Court is entitled to infer, from the foregoing statement, that her Honour's reasons for judgment should be read as if they were to include the submissions, on those points, made on behalf of Mr Maneschi.

39 It is clear, from a reading of the transcript of the Local Court proceedings, that the adjournment, after the second day of hearing, was intended to allow her Honour an opportunity to read the written submissions, the statements of evidence and other documents that had been tendered before the Local Court. On resumption of the hearing, having read that material, her Honour discussed some issues with the parties and delivered judgment, ex tempore.

40 No criticism ought properly be made of her Honour on the basis of the extent of the reasons provided to this Court, which remained uncorrected from those given in the Local Court at the time. Proper regard must be had to the volume of work with which magistrates must deal. Her Honour dealt with the main issue and otherwise adopted as her reasons those arguments put forward on behalf of Mr Maneschi. While greater specificity, particularity or transparency would have been of assistance to this Court, as a matter of process, her Honour was entitled to do as she did. The task of a magistrate, in this area, is to resolve, in accordance with the law, justiciable controversies as expeditiously as natural justice allows and to disclose in short form, the reasons therefor.

41 Each of the submissions, including those her Honour described as "the main thrust" of the argument, were not uncomplicated issues of law. Ultimately, her Honour's judgment on those issues is either correct or it is not. If not, error of law will have been disclosed. Neither party took issue with the primary facts, either before the Local Court or here. To the extent that certain conclusions of fact are in issue, this appeal may raise issues of fact mixed with issues of law, namely, for example, whether conduct was misleading and/or deceptive; or whether estoppel arose from certain conduct.

Nature of Appeal

42 The appeal before the Court is purportedly instituted under s 39 of the Local Court Act 2007, and otherwise leave to appeal is sought under s 40 of the Local Court Act. Paramount was a party to proceedings before the Local Court and the proceedings were in the Local Court's General Division. None of the grounds of appeal are confined to a question of fact.

43 Questions arise as to whether some of the grounds are "only on a question of law": see Williams v The Queen [1987] HCA 36; (1986) 161 CLR 278; M v The Queen [1994] HCA 63; (1994) 181 CLR 487; Morris v The Queen [1987] HCA 50; (1987) 163 CLR 454; R v R [1990] HCA 51; (1989) 18 NSWLR 74; Krishna v Director of Public Prosecutions (NSW) [2007] NSWCCA 318; Alramadan v Director of Public Prosecutions (NSW) [2007] NSWCCA 322; Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; (2010) 241 CLR 390. It is unnecessary to embark upon a lengthy examination of whether each ground is only a question of law. The grounds that are raised, to the extent that they are grounds of mixed law and fact, are such that leave to appeal should be granted. To the extent necessary, leave to appeal is granted.

44 The jurisdiction and powers of the Court on appeal are the subject of significant authority, and the procedure and powers involve consideration of the terms of s 75A of the Supreme Court Act 1970: see, inter alia, Kostas, supra. In the judgment of French CJ in Kostas (at 400, [28]), his Honour said:

"By s 75A(6), the Supreme Court has the powers and duties of the court, body or other person from whom the appeal is brought, including powers and duties concerning the drawing of inferences and the making of findings of fact. The Court may also make any finding or assessment, give any judgment, make any order or give any direction which ought to have been given or made or which the nature of the case requires." [References omitted]

The plurality judgment in Kostas did not consider it necessary to deal with the powers of the Court on appeal.

45 Nevertheless, the appeal is by way of rehearing and requires the moving party to demonstrate "that, having regard to all the evidence now before the appellate court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error": Allesch v Maunz (2000) 203 CLR 172, at 180, [23]; Kostas, supra, at 399-400, [27].

The Validity and Enforceability of the Assignment

The plaintiff's submissions

46 The plaintiff submitted that, even if it were accepted that an assignment of a debt for legal fees is not automatically invalid in order to offend the scheme and purpose of the Act, nevertheless, in this case, Mr Branson's bill of costs failed to comply with the statutory requirements set out in s 333(1) of the Act. Section 333 of the Act provides:

"333 Notification of client's rights

(1) A bill must include or be accompanied by a written statement setting out:

(a)the following avenues that are open to the client in the event of a dispute in relation to legal costs:

(i) costs assessment under Division 11,

(ii) the setting aside of a costs agreement or a provision of a costs agreement under section 328 (Setting aside costs agreements or provisions of costs agreements),

(iii) mediation under Division 8, and

(b) any time limits that apply to the taking of any action referred to in paragraph (a).

Note. These matters will already have been disclosed under section 309 (1) (Disclosure of costs to clients).

(2) Subsection (1) does not apply to a bill if disclosure under:

(a) section 309 (Disclosure of costs to clients), or

(b) section 310 (1) (Disclosure if another law practice is to be retained),

in relation to the relevant costs agreement was not or would not be required in the circumstances referred to in section 312 (1) (c) or (d) (Exceptions to requirement for disclosure).

(3) Subsection (1) does not apply in relation to a sophisticated client.

(4) A law practice may provide the written statement referred to in subsection (1) in or to the effect of a form prescribed by the regulations for the purposes of this subsection, and if it does so the practice is taken to have complied with this section in relation to the statement."

47 The exceptions to which subsection 333(2) of the Act refers do not apply to the bill of costs of or disclosure by Mr Branson. The plaintiff alleges that subsection 333(3) of the Act does not apply because Mr Maneschi is the client and he is not "a sophisticated client".

48 As a consequence of the acceptance of the immediately preceding submissions, it was submitted that there was a requirement imposed by the Act on Mr Branson to send with the bill of costs a note disclosing all of the issues described in s 333(1) of the Act. Since, as a matter of fact, the bill of costs did not have such a written statement, by operation of the provisions of s 331(1) of the Act, Mr Branson was incapable of commencing legal proceedings to recover his costs and, therefore, Mr Maneschi, in his capacity as assignee, held no greater rights to commence legal proceedings.

49 Further, the plaintiff submits that a legal practitioner is incapable of assigning a claimed debt for legal services and therefore, the assignment is invalid and of no effect. This latter submission is based upon public policy as repugnant to the scheme and purpose of the Act.

50 In that regard, it is submitted, first, that if assignment were possible a legal practitioner could, as a consequence, circumvent the sanctions and consequences which the Act imposes on legal practitioners who fail to comply with the disclosure and billing requirements of the Act.

51 Secondly, if assignment were possible, clients would be denied the protections afforded them by the Act, as those protections are not capable, it is submitted, of travelling with any assignment and binding the putative assignee.

52 Lastly, the plaintiff submits that the assignment is invalid because it is impossible to ascertain from it, with any certainty, the amount of the debt that is being assigned and/or the assignment misstates the amount of the debt.

The defendant's submissions

53 Mr Maneschi submits that the requirements of s 333 of the Act applied to Mr Branson in his relationship with Paramount, but not with Mr Maneschi. In other words, the submission on behalf of Mr Maneschi is that there was no requirement imposed by the Act on Mr Branson to give notice in accordance with s 333(1) of the Act to Mr Maneschi. Further, as Mr Branson's client was Paramount and it was a sophisticated client, within the meaning of that term in s 333(3) of the Act, subsection 333(1) did not apply to Mr Branson's bill of costs.

54 Further, because Paramount treated the bill of costs from Mr Branson as being regularly provided; it is now estopped from denying its validity.

55 Mr Maneschi also submits that any restrictions on the capacity of Mr Branson to enforce a bill of costs will pass with the assignment. Further, in this regard, Mr Maneschi submits that there is nothing in the nature of an agreement between barrister and solicitor that makes it different from other contracts, and refers to s 326 of the Act to support the proposition that a costs agreement may be enforced in the same way as any other contract.

56 Lastly, on this issue of the validity of the assignment, Mr Maneschi submits that the debt owed was $29,205 and the assignment was for a debt certain. This issue depends upon the construction and effect of the bill of costs from Mr Branson and the accompanying note.

Consideration on the validity of the assignment

The Scheme of the Act

57 The principles of statutory construction are well known and oft cited. Those principles include that the statute must be read in its entirety; that a particular provision of the statute must be construed in a manner that is consistent with both the language and purpose of all of the provisions of the statute; and that the prima facie basis upon which the statute must be construed is that its provisions are intended to give effect to harmonious goals: Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355. In the plurality judgment (McHugh, Gummow, Kirby and Hayne JJ), the High Court said:

"69. The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole". In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed.

70. A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court "to determine which is the leading provision and which the subordinate provision, and which must give way to the other". Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme."[citations omitted]

58 When the Act was promulgated, it replaced the Legal Profession Act 1987 (hereinafter "the 1987 Act"). Both the 1987 Act and the Act allow for the assessment of costs charged by legal practitioners. The amendments effected by the Act to the regime in existence under the 1987 Act are significant. For the first time the regime defines the term "client" for that purpose. Under the Act a "client" includes "a person to whom or for whom legal services are provided": see s 4 of the Act.

59 Section 83 of the Act permits a barrister or solicitor to "enter into a contract for the provision of services with a client or with another legal practitioner." As a consequence, the legislature expressly permits the barrister or solicitor "to sue and be sued in relation to the contract". Further, a barrister may enter into a contract with a client even though the barrister has already accepted a brief from a solicitor in the matter, thereby allowing a barrister to have a contract with both the solicitor and the solicitor's client.

60 Section 326 of the Act provides that, subject to currently irrelevant provisions, "a costs agreement may be enforced in the same manner as any other contract." However, not everyone in every relationship is entitled to make a costs agreement. Those who may make a costs agreement (and the relationship they enjoy with the other party) are defined by s 322 of the Act. A costs agreement, according to that provision, may be made: between a client and a law practice retained by the client; between a client and a law practice retained on behalf of the client by another law practice; between the law practice and another law practice that retained the law practice on behalf of a client; or, between a law practice and an associated third-party payer.

61 It can be accepted, uncontroversially, that no contract exists between a law practice and an associated third-party payer relevant to these proceedings. In each other category, the client must be a party to the costs agreement or the person on behalf of whom the party, being a law practice, is retained. In other words, a solicitor that enters into a costs agreement with a barrister is doing so "on behalf of the client" (see s 322(1)(c) of the Act). Mr Maneschi is the person to whom or for whom legal services were provided and, in accordance with s 4 of the Act, is the client.

62 Further, to the extent that Paramount engaged Mr Branson under a contract, it was a contract in Paramount's own right. Even though it would be effected "on behalf of" Mr Maneschi, it would not, without some express or implied term to that effect, be a contract to which Mr Maneschi was a party: see Levy v Bergseng [2008] NSWSC 294; (2008) 72 NSWLR 178; Keesing v Adams t/as Spencer Whitby & Co [2010] NSWSC 336. The phrase "on behalf of" does not have a strict legal meaning: R v Portus; ex parte Federated Clerks Union of Australia [1949] HCA 53; 79 CLR 428, at 435 per Latham CJ. Further, the phrase contemplates or includes, a wide range of relationships concerned, one way or another, with one person being representative of another or auxiliary to another: R v Toohey; ex parte Attorney-General (NT) [1980] HCA 2; (1980) 145 CLR 374, at 386, per Stephen, Mason, Murphy and Aickin JJ. It may mean no more than "in the interests of" or it may connote an agency relationship or trust: see Jennings Constructions Ltd v Burgundy Royale Investments Pty Ltd (No 2) [1987] HCA 10; (1987) 162 CLR 153, at 165.

63 If the legislature were intending to create a contract between the client and counsel as automatically arising from a costs agreement between solicitor and counsel, one would have expected the legislature to make explicit such an alteration. For the reasons adumbrated by Brereton J in Keesing, prior to the intervention of the legislature, barristers could not recover fees not only for reasons of public policy but also because barristers did not perform legal services on a contractual basis: Keesing, at [13] - [20].

64 The Act (and the 1987 Act) altered that situation. As already noted, a costs agreement permits a barrister to sue the other party to the costs agreement for the fees arising by reference to that costs agreement. The Act does not describe the costs agreement as a contract, nor render, nor deem it to be a contract.

65 Section 83 of the Act permits, relevantly, counsel to enter into a contract with the client or another legal practitioner (usually a solicitor) and to sue and to be sued on that contract. Section 322 of the Act provides for the making of a costs agreement and s 326 provides, as earlier stated, that such a costs agreement, subject to the Act, "may be enforced in the same way as any other contract".

66 The use of the term "other" in s 326 of the Act suggests that a costs agreement is also a contract. Yet there is no provision to that effect, except to the extent that the costs agreement forms part of a contract to which s 83 of the Act refers. Further, if the legislature's intention were to deem or make a costs agreement as or into a contract, it could have done so in the same, or similar, terms as s 83 of the Act. Moreover, if the effect of the Act (and, in particular, s 83 of the Act) were to render a costs agreement a contract for all purposes, then s 326 of the Act would be unnecessary or otiose.

67 The difficulty with a costs agreement, simpliciter, between solicitor and counsel, being a contract, is that, usually (i.e. subject to express provisions), the contract between client and solicitor may allow for the engagement of counsel, but does not include the work of counsel within the scope of work of the solicitor. As a consequence, the agreement between solicitor and counsel is not a "subcontract" of the work undertaken by the solicitor under its contract with the client.

68 Further, because the solicitor's contract with the client does not include the work undertaken by counsel and the solicitor does not otherwise obtain a benefit from the work of counsel, the work undertaken by counsel, under counsel's arrangement with the solicitor, is for the benefit of a third party, i.e. the client. Therefore, there may be no consideration necessary for the formation of the contract. This may be another reason, apart from the history of such arrangements and their basis in "honour", to which Brereton J referred in Keesing, that barristers were unable to sue solicitors for unpaid fees.

69 However, while the capacity of counsel to sue for fees is an effect of the legislation, its major or predominant purpose is the protection of clients and the encouragement of transparency in costs to clients. Those purposes inform the interpretation of the legislation. The Court should construe the legislation in a manner that is consistent with the foregoing stated purposes.

70 The costs agreement, referable to Mr Branson's fees, is a costs agreement between Mr Branson and Paramount. Paramount is "a sophisticated client" and, therefore, pursuant to s 333(3) of the Act, Mr Branson was not required to provide a written statement setting out those matters prescribed by s 333(1) of the Act.

71 Nevertheless, Mr Branson's fees were, in Paramount's relationship with Mr Maneschi, disbursements for which Paramount charged Mr Maneschi. Paramount was required to provide to Mr Maneschi a written statement setting out those matters to which s 333(1) of the Act refers. That could have been achieved, in this case, by forwarding a note from counsel, with such content, attached to the memorandum of fees sent by Paramount to Mr Maneschi.

Contract Principles and Assignment

72 It is appropriate to commence with certain first principles regarding contracts. In Moschi v Lep Air Services; Lep Air Services v Rolloswin [1973] AC 331, Lord Diplock reiterated certain fundamental conceptual aspects of contract. His Lordship was dealing with a contract of guarantee, but that does not affect the relevance of the comments. Lord Diplock said:

"The law of contract is part of the law of obligations. The English law of obligations is about their sources and the remedies which the court can grant to the obligee for a failure by the obligor to perform his obligation voluntarily. Obligations which are performed voluntarily require no intervention by a court of law. They do not give rise to any cause of action.

English law is thus concerned with contracts as a source of obligations. The basic principle which the law of contract seeks to enforce is that a person who makes a promise to another ought to keep his promise. This basic principle is subject to an historical exception that English law does not give the promisee a remedy for the failure by a promisor to perform his promise unless either the promise was made in a particular form, e.g. under seal, or the promisee in return promises to do something for the promisor which he would not otherwise be obliged to do, i.e. gives consideration for the promise....

Each promise that a promisor makes to a promisee by entering into a contract with him creates an obligation to perform it owed by the promisor as obligor to the promisee as obligee. If he does not do so voluntarily there are two kinds of remedies which the court can grant to the promisee. It can compel the obligor to pay to the obligee a sum of money to compensate him for the loss that he has sustained as a result of the obligee's failure to perform his obligation. This is the remedy at common law in damages for breach of contract. But there are some kinds of obligation which the court is able to compel the obligor actually to perform. In some cases, such as obligations to transfer title or possession of property to the obligee or to refrain from doing something to the detriment of the obligee, a remedy to compel performance by a decree of specific performance or by injunction is also available.... In these cases it was an alternative remedy to that of damages for breach of contract obtainable only in a court of common law. But, since a court of common law could make and enforce orders for payment of a sum of money, where the obligation was itself an obligation to pay a sum of money, even a court of common law could compel the obligor to perform it." (Moschi, supra, at 346-347, per Lord Diplock.)

73 There is a distinction in law between a claim for damages for breach of contract and an action for debt: Young v Queensland Trustees Ltd [1956] HCA 51; (1956) 99 CLR 560, at 563-566. The High Court in Young said:

"The common law does not and never did conceive of indebtedness in a sum certain for an executed consideration as a mere breach of contract: it is rather the detention of a sum of money and that was so whether the creditor enforced his demand by an action in debt or by indebitatus assumpsit. Were it otherwise it would not be necessary for a defendant who set up a plea of tender to bringing to court the amount of the debt with his plea. The reason he must do so is that the tender answers only the breach of obligation alleged and not the debt." (Young, at 567-568, per Dixon CJ, McTiernan and Taylor JJ)

74 Further, the High Court said:

"A debt recoverable under an indebitatus count was not and is not now conceived of simply as a cause of action for breach of duty or obligation. In other words it is a mistake to regard the liability to pay a debt of kind formerly recoverable in debt or indebitatus assumpsit as no more than the result of a breach of contract, a breach which the creditor must affirmatively allege and prove. It is, too, a mistake to suppose that the general issue was always a plea doing no more than negativing the essential ingredients in the plaintiff's prima facie cause of action." (Young, at 569, per Dixon CJ, McTiernan and Taylor JJ).

75 The distinction may be relevant to this controversy and the characterisation depends very much on the construction of the "contract" (in this case, the cost agreement), the conditions upon which an amount is payable and the terms of the assignment. By Clause 14 of the Branson costs agreement, a fee could be rendered only after a successful outcome of the matter and fees were due and payable within 30 days of the signing by Mr Branson of the tax invoice relating thereto: Clause 15. Interest accumulated for any monies outstanding for more than 30 days after receipt of the tax invoice: Clause 12.

76 One major factor in determining whether an amount (that is not the repayment of money borrowed) is debt or damages is whether the contractual obligation to pay is a dependent or independent obligation. The modern law of contract presumes mutuality in the absence of express agreement to the contrary (or words of necessary intendment in the contract): see generally J. W. Carter, Breach of Contract, second edition, (1991), The Law Book Company, particularly at [108], [116], [122] - [123].

77 The distinction between dependent and independent obligations was described by Jordan CJ (Stephen and Maxwell JJ concurring) in Newcombe v Newcombe (1934) 34 SR (NSW) 446. While that judgment referred to a deed, the description is even more appropriate when applied to a simple contract. The Court said:

"Where each of two parties to an indenture makes a covenant with the other, and the two covenants are not in terms connected, the question may arise whether they are independent (in the sense that each party is bound to perform his covenant irrespective of whether the other performs his) or dependent (in the sense that one party is not bound to perform, or to continue to perform, his covenant unless the other has performed, or does perform, he is, previously or concurrently or subsequently) .... An implication of intention that the performance of one covenant shall be conditional on the performance of the other arises where the nature of the covenant is such that any breach of either of them would necessarily be regarded by reasonable men as absolving the other party from performing his covenant. But the question is in every case one of intention."

78 The occurrence of a "successful outcome" was a condition precedent to the rendering of a memorandum of fees. A condition precedent is to be distinguished from a dependent obligation. The only other "occurrence" that was necessary, prior to the forwarding of a memorandum of fees by Mr Branson and on which the requirement to pay was conditioned, was the performance of services to which the costs agreement related.

79 The memorandum of fees would be subject to verification or checking as to the services performed; for example, if, in error or otherwise, more days in court were billed than were attended by counsel. However, otherwise the fees were due and payable within 30 days of the rendering of the memorandum of fees, subject to the operation of the Act and the availability of assessment.

80 The obligation on Paramount to pay the amount claimed by Mr Branson was a dependent obligation and depended on the performance of the services and the rendering of an account or appropriate claim. On the effluxion of 30 days thereafter, the amount claimed became an accrued right that, for example, would survive termination of the contract, subject to the previously mentioned qualifications in the Act allowing for assessment or review of the fees.

81 If Paramount were to refuse to pay the amount claimed, the remedy, pursuant to s 326 of the Act, may be an action for damages for breach of contract; and may or may not be an action in debt. Yet the assignment was of a "debt". Whether the amount was a debt depended, apart from the foregoing, on whether it was for a sum certain or ascertainable: Young (supra), Westralian Farmers Ltd v Commonwealth Agricultural Service Engineers Ltd (in Liq) [1936] HCA 6; (1936) 54 CLR 361. In my view, the amount owing is properly described as a "debt", being a right to receive payment: Westralian Farmers v Southern Meat Packers [1981] WAR 241 at 244.

82 However, it is not significant. In my view, on its true construction, the deed of assignment was not referring to "debt", confined to its technical meaning, but, in this case, it included any chose in action for damages for breach of "contract", pursuant to the capacity or right granted by s 326 of the Act. The capacity granted by s 326 of the Act depends on the availability of the protections to clients and others, which form the primary or predominant purpose of the Act (see above). This is not the purported assignment of a "mere" cause of action: Deputy Commissioner of Taxation v GIO (1993) 45 FCR 284; (1993) 117 ALR 61 at 70.

83 The assignment of the "debt" and the chose in action would, if effective, carry with it the conditions imposed by the Act that allow the other "contracting" party to have the fees assessed or otherwise dealt with under the provisions of the Act. Under no assignment could an assignee obtain a better title than the assignor possessed.

84 There seems to me no good reason why the conditions imposed upon a barrister by the statute that allows the barrister to sue for fees, should not travel with the assignment (assuming that an assignment is possible). In this sense, the statutory conditions on enforcement are treated in no different way than "equities", which include the capacity to set aside contracts for fraud, misrepresentation and any other infirmity: see Redman v Permanent Trustee Co of New South Wales (1916) 22 CLR 84, at 91; Southern British National Trust Ltd (in Liq) v Pither (1937) 57 CLR 89, at 105, 108.

85 Similar treatment was afforded to an assignment in the judgment of Santow JA in Deputy Commissioner of Taxation v Bluebottle UK Ltd (2006) 68 NSWLR 558 at 581, in which judgment his Honour referred to the term "equities" including all remedies, defences and priorities "which may have been duly opposable against the assignor". Brereton J took the same approach in Franks v Equitiloan Securities Pty Ltd [2007] NSWSC 812 at [24], in which he commented that the term "equities" was not to be narrowly interpreted and included a defence, set-off, cross-claim and counterclaim that the obligor could have raised against the assignee.

86 As a consequence of the foregoing, there is no public policy reason for taking the view that a debt arising from a costs agreement (including a chose in action) cannot be assigned. This case does not raise issues as to whether the action would be a mere cause of action. The Act puts counsel in the same position as a solicitor in relation to the capacity to sue for fees and the law has, for some significant period, recognised the capacity of solicitors to assign costs, any debt arising from costs and any chose in action relating thereto: see Briscoe v Briscoe [1892] 3 Ch 543, at 547; ex parte Patience Makinson v The Minister (1940) SR (NSW) 96, at 101; Firth v Centrelink & Anor [2002] NSWSC 564 at [34].

87 There are some difficulties associated with the assignment of rights under a costs agreement. On one view of the facts in this case, Mr Maneschi paid Mr Branson "for his fees" (see email 27 July 2010, recited above at [23]). It is not difficult to imagine a situation where the client paid counsel directly for his fees. Such a payment would, it seems to me, preclude later suit on the costs agreement, notwithstanding that the costs agreement was between counsel and the instructing solicitor. There would be some conceptual difficulties associated with such an event. It is unnecessary to resolve those difficulties in these proceedings, except that if the true nature of the payment by Mr Maneschi to Mr Branson were a payment "for his fees", the debt may have been fully or partly satisfied.

The amount of the debt

88 As stated at [9] above, on 14 April 2010, Mr Branson sent a memorandum of fees in the form of a tax invoice for $29,205. The memorandum of fees was qualified by a note reciting a comment to junior counsel and referring to the fees not exceeding the sum of $20,000 plus GST, namely, a total of $22,000. As earlier recited, Mr Branson stated that it was "entirely a matter for Mr Maneschi as to whether he provides instructions to pay the sum of $29,205 or the sum stated by me to be the estimate of my fees."

89 The assignment purports to assign the debt, which is defined as $29,205, inclusive of GST. The consideration for the assignment was a payment of $20,000 plus GST (namely, $22,000).

90 It is unnecessary in this judgment to discuss the implications and effect of the above transactions on the amount of GST that would be paid. On a preliminary view, it would seem that Mr Maneschi, not being an entity with liability to pay GST, would not be required to remit GST to the Australian Taxation Office on the sum of $29,205. On the other hand, Paramount, if the assignment were effective, would be paying $29,205 ($2,655 in GST) and Mr Branson would be remitting only $2,000 in GST. It is unclear why GST would be charged for the assignment and even less clear why it would be payable. Each of these are interesting aspects to the arrangement that has occurred and may, if the arrangement were effective and implemented, result in possible action by the Australian Taxation Office. On the face of it, it may be a fraud on the ATO. On the other hand if Mr Maneschi remitted $2,655 to the ATO and Mr Branson remitted $2,000 to the ATO, $2,000 more than was payable and would have been remitted. However, the tax implications of this arrangement are irrelevant for any current purpose and are disregarded. Nice questions with which I do not deal, arise as to whether the amount of $2,655 was part of the debt to Mr Branson, if, as I suspect, no GST debt arises.

91 As earlier stated, Mr Branson, by the addendum to his memorandum of fees, left the amount to be paid as a matter entirely for Mr Maneschi. It was for Mr Maneschi, through instructions to his solicitors, Paramount, to determine whether he would pay $22,000 or $29,205.

92 As recounted at [21] and [23] above, Mr Maneschi did not provide instructions to Paramount, or anyone else, as to the amount to be paid. Indeed, as the terms of the correspondence extracted at [21] and [23] make clear, Mr Maneschi not only failed to give such directions, he consciously declined to give those directions. Further, it is more probable than not that Mr Branson's statement, to Mr Meakes at the Informal Settlement Conference, was relied upon to his detriment by Paramount and Mr Maneschi in reaching a settlement, in the amount referred.

93 In those circumstances, the issue with which the Court must deal is the amount that Mr Branson was owed. Mr Branson's concession, on its face, involves the proposition that, if Paramount were to have paid Mr Branson $22,000, no further amount could be claimed by Mr Branson. The "debt" was $22,000 only. Notwithstanding the calculations that gave rise to a sum of $29,205, Mr Branson was insisting upon $22,000 only. The remaining $7,205 was to be a payment that was wholly discretionary, if it were paid, and not an amount due under the memorandum of fees and upon which Mr Branson would or could insist. Moreover, even without the concession, at least arguably, Mr Branson would be estopped from claiming more than $22,000, which, as has been said, was represented as the amount that the fees would not exceed.

94 Mr Maneschi submits that he made it clear that the amount to be paid by Paramount to Mr Branson was the higher amount of $29,205. It is submitted that this is clear from the terms of the assignment and his failure to give Paramount instructions to pay the lesser amount ($22,000). It was unnecessary to give Paramount instructions to pay the lesser amount. It was necessary to give Paramount instructions to pay the higher amount. Absent those instructions, the lower amount was payable. Further, the terms of the assignment were not instructions to Paramount as to what it should pay Mr Branson. As stated, Mr Maneschi deliberately refused to give any instructions as to the payment of counsel's fees. Further, to the extent that there is any evidence of the amount Mr Maneschi was prepared to pay Mr Branson "for his services", it was $22,000, being the lower amount, and being consideration for the assignment and said to be (see [23] above) "for his services".

95 It is fundamental to the validity of an assignment that, in relation to a debt, it be for an amount that is certain or ascertainable. Certainly, at common law, the amount assigned must be defined. Nevertheless, if the debt were otherwise identified and ascertainable, an assignment would be valid: International Leasing Corporation (Vic) Ltd v Aiken (1966) 85 WN (Part 1) (NSW) 766; [1967] 2 NSWR 427, at 450; W F Harrison & Co v Burke [1956] 1 WLR 419.

96 In this case, the debt is misstated in the assignment itself. This is not a case involving a defect in the notice of assignment: see Van Lynn Developments Pty Ltd v Pelias Construction Co Ltd [1969] 1 QB 607. A more realistic outlook is taken by courts as to the validity of the assignment based upon an error in the notice: see Bunbury Foods Pty Ltd v National Bank of Australasia Limited (1984) 153 CLR 491.

97 The terms of the assignment, for it to be valid, require that the property assigned be ascertained and identified. Even where a sum is specified, but is not identified by the fund from, or the debt for which, it is to be paid, the assignment will not be valid, in law or in equity: Percival v Dunn (1885) 29 Ch D 128.

98 Counsel for Paramount submitted that, because the amount of the debt was misstated, the assignment was invalid. Counsel for Mr Maneschi sought to defend the accuracy of the stated amount ($29,205), but did not take issue with the legal proposition advanced.

99 Earlier judgments dealing with an assignment at common law, and with formalities of notice, require precise identification of the property assigned. A misstatement of the property at least at common law, on those authorities, would or may invalidate the assignment: International Leasing, supra; W F Harrison, supra. The requirement, nevertheless, was to identify the property assigned: Tailby v Official Receiver (1883) 13 App Cas 523 at 528, 543; Bakewell v Deputy Federal Commissioner of Taxation (SA) (1937) 58 CLR 743 at 761-2; Akron Tyre v Kittson (1951) 82 CLR 477 at 493; Norman v Federal Commissioner of Taxation (1963) 109 CLR 9 at 25; Shepherd, supra.

100 However, an equitable assignment requires no such formality. Equity treats as done that which ought to be done. Provided there is an intention to assign and sufficient description of the property being assigned and its identification together with consideration (or some other factor which would cause equity to bind the assignor, e.g. unconscionability of declining to do so), equity will regard the assignment and enforce rights under it: Re Latham (1857) 1 DC Cr & J 152, 44 ER 681; Thayer v Lister (1861) 30 LJ Ch 427. Where the debt is identified and, as here, the assignment is of the entire debt, or a specified part, it is unnecessary to state the amount of the debt: Bank of Australasia v Annie Hertz (1937) 54 WN (NSW) 179; Shepherd v Federal Commissioner of Taxation (1965) 113 CLR 385 and see Brice v Bannister (1878) 3 QBD 569; Re Gunsbourg (1919) 88 LJKB 479.

101 Of course it is necessary to identify the debt, but there is only one debt that arises under the costs agreement and the entirety of that debt was intended (and purported) to be assigned. The submission as to strict precision of the amount, even where the debt were otherwise identified, would render nugatory the capacity of the obligor to raise "equities" to set-off against the debt. In this case, a memorandum of fees was rendered for an amount that was sought to be assigned. It is for the entirety of the debt owing under the costs agreement for the performance of services thereunder. That the Court has held that only $22,000 is owing does not render the debt any less the entirety of the debt owing under the costs agreement.

102 Lastly, in terms of the validity of the assignment, I note that even though the performance of services under a costs agreement would be, or may be, personal and, as a burden, unassignable (without agreement) (see Tolhurst v The Associated Portland Cement Manufacturers (1900) Ltd [1903] AC 414; Cooper v Micklefield Coal & Lime Co Ltd (1912) 107 LT 457, Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd (St Martins Corporations Case) [1994] 1 AC 85, at 103; Bruce v Tyley [1916] HCA 34; (1916) 21 CLR 277), the debt owed as a result of the performance is not, without express restriction, unassignable: Devefi P/L v Mateffy Pearl (1993) 113 ALR 225 at 235, (1993) 37 IPR 477, per Northrup, Gummow and Hill JJ. The debt arising from the costs agreement was assignable and was assigned.

Misleading and deceptive conduct

103 It is necessary to as briefly as possible, discuss the other aspects of Paramount's claim.

104 Paramount claimed that Mr Maneschi engaged in misleading and deceptive conduct within the meaning of s 42 of the Fair Trading Act 1987. Paramount submits that Mr Maneschi represented that he had paid $22,000 to Mr Branson "for his fees". Further, Paramount submits that Mr Maneschi failed to disclose to Paramount the existence of the purported assignment. As a consequence of the aforesaid conduct, Mr Maneschi, it is submitted, created a false impression and induced Paramount to believe that Mr Branson's fees had been paid.

105 Accepting, without deciding, for present purposes, that the conduct of Mr Maneschi was misleading or deceptive, or likely to mislead and deceive, the submission and reliance on the Fair Trading Act is misplaced, because it does not affect the assignment or the capacity of Mr Maneschi to sue on the assignment.

106 If there were misleading and deceptive conduct, and appropriate orders were to be considered under the Fair Trading Act, it was conduct that misled or deceived Paramount on the factual basis upon which it settled the amount owing under its fees. It is conduct, if it were misleading or deceptive, that would allow under the Fair Trading Act, the settlement between Mr Maneschi and Paramount relating to Paramount's fees to be set aside or otherwise dealt with in accordance with the statutory regime. No party is seeking such a remedy.

107 Nor is Paramount seeking independent remedies (e.g. damages, or a set-off, or cross-claim) under the Fair Trading Act, associated with the alleged conduct. The proceedings before the Local Court were proceedings for the payment of the purported debt. Those proceedings did not seek relief under the Fair Trading Act, in relation to the settlement between Paramount and Mr Maneschi as to Paramount's fees; nor did Paramount seek damages, under that statute as a consequence.

108 Paramount sought to utilise the allegation of misleading or deceptive conduct as a defence to the claim for payment of the "debt". Paramount relies on the alleged misleading or deceptive conduct as an "equitable set-off". In reality, the submission is more in the nature of an estoppel argument, although it is not addressed in that way in the summons and the argument is only fleetingly mentioned in written submissions.

109 The effect of the facts recited earlier, and which are relevantly uncontroverted, was that Mr Maneschi represented that Mr Branson had been paid $22,000 "for his fees by way of bank cheque" (exhibit A, at 279-280). Mr Maneschi had qualified that statement by informing Paramount, both before and after that statement of 27 July 2010, that the offer to settle the dispute with Paramount included fees for counsel (23 July 2010) and that the payment of $22,000 to Mr Branson was not made in full and final satisfaction of his fees (exhibit A, at 285).

110 To those representations must be added the continuing response to Paramount that Mr Maneschi was not prepared to give "instructions to pay either Counsel" (exhibit A, at 279-280).

111 The net effect of those communications is that Paramount was informed that one of the counsel to whom it owed fees had been paid $22,000 for his fees (but not in full and final satisfaction of his fees, which, depending on the instruction from Mr Maneschi may be a further $7,205); that Mr Maneschi would not provide instructions to pay counsel (including the additional $7,205); and Paramount were not, at this stage (or until served with the notice of assignment, i.e. well after the settlement of the dispute regarding its fees) aware that there had been an assignment or that the $22,000 had been paid independently of the satisfaction (at least in part) of the debt.

112 Further there can be no doubt that the issue of whether the $22,000 had been paid to Mr Branson for his fees and whether it was still owing was important to the decision of Paramount to accept the offer of $45,000. So much is obvious from the email exchange recited at [16]-[29] above.

113 Mr Maneschi relies on a passage of cross-examination of Mr Marocchi, the partner at Paramount, to the effect that he was aware that Mr Branson's fees were to be paid from the offer.

114 It seems that Paramount were prepared to take the risk of owing Mr Branson a further $7,205, particularly in light of the refusal to provide instructions to pay the higher amount. It was also aware that junior counsel's fees were included in the settlement sum.

115 The conclusion that Paramount relied on the representation as to payment of Mr Branson's fees is available and more probable than not. Moreover, it is the subject of direct evidence of Mr Marocchi (exhibit A at 213, affidavit 23.02.11 at [44]) that was not directly challenged.

116 The difficulty with Mr Maneschi's reliance on the understanding of Mr Marocchi as at 27 July 2010, as to the inclusion of Mr Branson's fees, is that it must be understood in light of the representations recited earlier and the issue of the remaining $7,205.

117 For an estoppel to arise from the representations made as to payments to Mr Branson for his fees (and the failure to give notice at a time relevant to the settlement negotiations), the representation must be clear and unambiguous as to an issue of fact: Legione v Hatley (1983) 152 CLR 406, 435-6; Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890 at 902.

118 Given the issues raised by Paramount of Mr Maneschi, the failure of Mr Maneschi to inform Paramount of the assignment or that the payment of $22,000 was not, even in part, satisfaction of the debt was unconscionable and misleading and deceptive. While the representations that $22,000 of the debt to Counsel had been paid could possibly have another construction, the aforementioned construction is and was the reasonable understanding of Paramount such as to give rise to a clear and unambiguous representation upon which Paramount relied: Low v Bouverie [1891] 3 Ch 82, 106 per Bowen LJ; Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741, 756 per Lord Hailsham LC.

119 If contrary to the foregoing, Paramount was not justified in having no doubt as to the meaning of the representation, the representation was, particularly in light of the failure to comment accurately and fully on the obvious "misunderstanding" of Paramount, misleading or deceptive. A reasonable person would have been misled in the same way: Parkdale Custom Built Furnoture v Puxu [1982] HCA 44; (1982) 149 CLR 191. Further, Paramount relied on the representation to it in determining to accept (and ultimately accepting) the offer to settle the dispute over its fees.

120 It must then be determined what, if any, remedy flows from the foregoing. There is a difference, in this case, between reliance and a finding that, if the true facts were known, a different result would have eventuated.

121 At the outset, I recited (at [6]) that the original proceedings were for motor accident compensation to which the Motor Accident Regulation 2005 applied. By Regulation 11 thereof, maximum fees may be charged. The operation of the regulation may be excluded by an appropriate clause if full disclosure were given. The evidence before the Court does not disclose the stage that the original proceedings had reached to an extent that allows the Court to determine the likely maximum fees that could have been charged.

122 However, for the purposes of any of the Fair Trading Act, the Australian Consumer Law (if that be applicable pursuant to s 27 of the Fair Trading Act) or the Fair Trading Act (as it existed prior to 8 July 2011), Paramount have not shown damage. The alternative to accepting the settlement offer was to have an assessment of its fees, which more probably than not, would have resulted in a significant reduction from that payable under the settlement (even if the $22,000 were required to be paid).

123 The effect of the foregoing on estoppel, while slightly less direct, is the same. The representation must cause the representee, in this case, Paramount some material detriment: Thomson v Palmer (1933) 49 CLR 507, 548-9, per Dixon J. Again, there are two possibilities. Either the settlement offer would have been accepted, notwithstanding knowledge of the position, or it would not have been. If the former, then Paramount would have suffered no detriment. If the latter, then for the reason adumbrated in the immediately preceding paragraph, Paramount has not proved a material detriment. Paramount bears the burden of proof: Fung Kai [1951] AC 489 at 506; Thompson v Palmer.

124 As a consequence of the foregoing, while Paramount has made out a case to establish a representation that was misleading or deceptive, and an unconscionable dealing otherwise giving rise to an estoppel, Paramount has not established that a remedy should issue preventing enforcement of the debt arising from Mr Branson's costs agreement.

The right to indemnity

125 The last substantive issue upon which Paramount relies in this Court is a submission that Paramount was entitled to a full indemnity from Mr Maneschi in respect of the alleged debt pursuant to the terms of their retainer.

126 This submission is misplaced. I can assume, without deciding, that the terms of the retainer of Paramount required Mr Maneschi to reimburse Paramount for the cost of counsel's fees. Without close examination, it is clear that aspects of the retainer agreement require Mr Maneschi to pay Paramount's disbursements, which, for relevant purposes, included counsel's fees.

127 However, the terms of the retainer are irrelevant. The amount outstanding and owed to Paramount by Mr Maneschi was resolved by an agreement, the terms of which overtake the pre-existing retainer agreement. The fact, if it were the fact, that under the original retainer agreement disbursements paid by Paramount were required to be reimbursed by Mr Maneschi, cannot affect the terms of the settlement between them as to the fees charged by Paramount. The $45,000 paid by Mr Maneschi to Paramount was in full and final settlement of Paramount's fees. Those fees included disbursements. Any right in Paramount to be indemnified by Mr Maneschi was overtaken by and subsumed in the settlement of its fees by agreement. Parties may vary a contract by agreement.

Conclusion

128 One other issue is raised by Paramount, being an allegation of procedural unfairness. This allegation relates to the failure of the Local Court to deal adequately, or at all, with the submissions on misleading and deceptive conduct and the indemnity. It is unsurprising that these submissions were not given much attention, given the attention the parties paid to them in the Court below. Further, as previously stated, her Honour dealt with the substantive issue between the parties, namely, the validity of the assignment, and otherwise adopted the submissions of Mr Maneschi.

129 The alleged failure to accord natural justice or procedural fairness is not made out. In any event, it makes no difference to the resolution of this appeal. Those issues have now been fully considered in a re-hearing and any denial of natural justice cured: Calvin v Carr [1980] AC 574; (1979) 53 ALJR 471; [1979] 1 NSWLR 1; and s 75A(5) and (6) of the Supreme Court Act 1970.

130 The purported assignment by Mr Branson to Mr Maneschi of the "debt" arising from his costs agreement was an "assignment" of an amount that was not owing, but was effective in equity to assign the debt arising under the costs agreement. Mr Maneschi is incapable of suing Paramount for $29,205 as Paramount did not, and does not, owe that amount to Mr Branson. The resolution of the issue by the learned and experienced magistrate was affected by an error of law, in that her Honour misconstrued the effect of the costs agreement (including the concession) and the assignment.

131 As a consequence of the foregoing, the Court makes the following orders:

(1) To the extent necessary, leave to appeal granted.

(2) Appeal allowed in part.

(3) The judgment of the Local Court issued on 8 June 2011 between the parties in these proceedings be set aside and in lieu thereof the following orders issue:

(a) Judgment for the defendant herein, Mr Maneschi, in the sum of $22,000;

(b) The plaintiff herein, Paramount Lawyers Pty Ltd, pay interest on the aforesaid judgment from 21 September 2010 until today in accordance with s 100 of the Civil Procedure Act 2005 at the Reserve Bank of Australia cash rate operating for the relevant period;

(c) The plaintiff pay interest pursuant to s 101 of the Civil Procedure Act 2005 from the date of judgment until payment in accordance with the prescribed rate.

(4) The defendant herein, Mr Maneschi, file and serve a written submission on costs by 5pm 14 days from the date of this judgment and the plaintiff herein file and serve any reply thereto by 5pm 7 days from the receipt by it of the defendant's written submission on costs. Costs will be dealt with on the basis of the written submissions.

(5) Leave reserved to address the terms of the order, any other order necessary to reflect the reasons and any special or other order for costs and interest.

Decision last updated: 03 August 2012