Queensland Law Society

Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29

Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29

Catchwords

Practice and procedure – costs – legal practitioners – barristers – where self-represented litigant may not obtain any recompense for value of his or her time spent in litigation – Chorley exception – whether Chorley exception exists for self-represented litigant who is a solicitor or barrister – whether Chorley exception is recognised as part of the common law of Australia.

Executive summary

As a general rule, a self-represented litigant may not obtain any recompense for the value of his or her time spent in litigation.[1] However, under the Chorley exception, a self-represented litigant who happened to be a solicitor could recover his or her professional costs of acting in a litigation.[2] Bell Lawyers (‘the appellant’), an incorporated legal practice, appealed a decision of the Court of Appeal of the Supreme Court of New South Wales in which the majority found Ms Pentelow (‘the respondent’), who happened to be a barrister, was entitled to rely on the exception to recover her professional costs of acting as a self-represented litigant against the appellant in previous proceedings.[3]

The majority found that the exception should not be expanded to benefit barristers and also took the opportunity to determine that the Chorley exception should not be recognised as part of the common law of Australia because it was an anomaly that represented an affront to the fundamental value of equality of all persons before the law and could not be justified by the considerations of policy said to support it.[4] Subsequently, the Court allowed the appeal and set aside the orders of the Court of Appeal.[5]

Background

The appellant briefed the respondent to appear in proceedings in the Supreme Court of New South Wales. Following the conclusion of those proceedings a dispute arose as to the payment of the respondent’s fees. The respondent sued the appellant for the balance of unpaid fees and was subsequently successful on appeal to the Supreme Court of New South Wales.

The respondent was represented by a solicitor at first instance and by a solicitor and senior counsel on appeal. In each proceeding, the respondent had undertaken preparatory legal work and attended court in person for a number of directions hearings. She subsequently sought costs incurred on her own behalf.

The appellant refused to pay the costs claimed for the work undertaken by the respondent herself and subsequently made a costs assessment application. The costs assessor rejected the respondent’s claim on the basis that, inter alia, in New South Wales the Chorley exception does not apply to barristers. The costs assessor’s decision was affirmed on appeal by the Review Panel and again on appeal by the District Court of New South Wales.

The respondent then sought judicial review of the decision of the District Court in the Court of Appeal of the Supreme Court of New South Wales. The primary issue for determination was whether the Chorley exception applied to the respondent as a barrister. The majority (Beazley ACJ and Macfarlan JA, Meagher JA in dissent) held that the respondent was entitled to rely upon the Chorley exception for the same reason that a solicitor is so entitled, namely, that her costs were quantifiable by the same process as a solicitors’ costs.[6] Dissenting, Meagher JA expressed reservations as to the continued application of the Chorley exception to solicitors, but accepted that he was bound by authority to hold that the exception still exists. Notwithstanding this, his Honour rejected the extension of the exception to barristers.[7]

By grant of special leave, the appellant appealed the matter to the High Court of Australia.

Issue


The primary issue to be determined by the court was whether the Chorley exception should be recognised as part of the common law of Australia.

Issue considered

The majority prefaced the issue for determination on the basis “that solicitors should be encouraged to act for themselves is contrary to the modern orthodoxy that it is undesirable, as a matter of professional ethics, for a solicitor to act for himself or herself in litigation.”[8] Their Honours noted that this is reflected in rr 17.1[9] and 27.1[10] of the Australian Solicitors Conduct Rules 2012 (‘ASCR’).[11]

The majority found that the rationale provided by Bowen LJ in Chorley for the exception was not persuasive, as to say that the value of legal services rendered by a solicitor to himself or herself can be measured is not to justify an exception to the general rule.[12] Further, although the Chorley exception has been recognised in Australia as ‘the solicitor’s privilege’, it is a privilege of this kind that is inconsistent with the equality of all persons before the law.[13]

The majority considered a previous decision of the Court in Cachia v Hanes (‘Cachia’),[14] in which the Court, while not invited to abolish the Chorley exception, nonetheless criticised and substantially undermined the authority of the decision in Chorley.[15] Following the majority’s reasoning, the Court noted that to permit a self-represented solicitor to recover costs gives rise to the possibility of allowing a solicitor to profit from his or her participation in the conduct of litigation.[16] In that regard, costs are a creature of statute. It has never been thought that any of the ubiquitous statutory provisions empowering courts to order costs are available to compensate a litigant for his or her time and trouble in participating in litigation. This is because costs are awarded by way of indemnity; they are not awarded as compensation for lost earnings, much less as a reward for the litigant’s success. The courts have long regarded the statutory power to make an order for costs as confined by the concern to provide the successful party with a measure of indemnity against the expense of professional legal costs actually incurred in the litigation.[17]

The majority went on to consider that the Court in Cachia noted that ‘[i]f costs were to be awarded otherwise than by way of indemnity, there would be no logical reason for denying compensation to a litigant who was represented’ and ‘[t]hat would in some cases dramatically increase the costs awarded to a successful litigant’, especially in corporate litigation of complexity where a litigant ‘may expend considerable time and effort in preparing its case’.[18] Further, so far as the general rule is concerned, there is no inequality as all litigants are treated in the same manner. On the other hand, ‘if only litigants in person were recompensed for lost time and trouble, there would be real inequality between litigants in person and litigants who were represented, many of whom would have suffered considerable loss of time and trouble in addition to incurring professional costs’.[19]

Adopting the reasoning of the Court in Cachia, the majority held that the Chorley exception is not part of the common law of Australia as it is an anomaly that represents an affront to the fundamental value of equality of all persons before the law and cannot be justified by the considerations of policy said to support it.[20] Subsequently, the Court allowed the appeal and set aside the orders of the Court of Appeal.[21]

 

Liam O’Shaughnessy

Ethics Clerk

As approved by Grace van Baarle, Manager, Ethics Solicitor, QLS Ethics and Practice Centre



[1] Cachia v Hanes (1994) 179 CLR 403, 410­-411; See also Guss v Veenhuizen [No 2] (1976) 136 CLR 47, 51.

[2] London Scottish Benefit Society v Chorley (1884) 13 QBD 872, 877 (‘Chorley’).

[3] Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150.

[4] Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29, [3].

[5] Ibid [58].

[6] Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150, [90]-[96], [121].

[7] Ibid [138].

[8] Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29, [19] (Kiefel CJ, Bell, Keane and Gordon JJ).

[9] ASCR r 17 – Independence – avoidance of personal bias.

[10] ASCR r 27 – Solicitor as material witness in client’s case.

[11] Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29, [20].

[12] Ibid [22].

[13] Ibid [25].

[14] Cachia v Hanes (1994) 179 CLR 403.

[15] Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29, [32].

[16] Ibid.

[17] Ibid [33].

[18] Ibid [38], quoting Cachia v Hanes (1994) 179 CLR 403, 414.

[19] Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29, [38], quoting Cachia v Hanes (1994) 179 CLR 403, 414-15.

[20] Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29, [3], [39], [57].

[21] Ibid [58].