MICHAEL HEGARTY v HENRY KEOGH [2023] SASCA 30

On Appeal from SUPREME COURT OF SOUTH AUSTRALIA (HER HONOUR JUDGE BOCHNER) SCCIV-20-29 Appellant: MICHAEL HEGARTY Counsel: DR S CHURCHES - Solicitor: SCALES & PARTNERS Respondent: HENRY KEOGH Counsel: MR CSL ABBOTT KC - Solicitor: ILES SELLEY LAWYERS Hearing Date/s: 10/09/2021 File No/s: CIV-20-006594 A SUPREME COURT OF SOUTH AUSTRALIA (Court of Appeal: Civil) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court in which it was generated. HEGARTY v KEOGH (No 2) [2023] SASCA 30 Judgment of the Court of Appeal (The Honourable President Livesey, the Honourable Justice Doyle and the Honourable Justice Bleby) 23 March 2023 APPEAL AND NEW TRIAL - PROCEDURE - SOUTH AUSTRALIA - OTHER MATTERS CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - STATUTE OF FRAUDS, SECTION 4 - NON-COMPLIANCE WITH STATUTE - EXECUTED CONTRACTS AND ACTIONS FOR QUANTUM MERUIT RESTITUTION - CLAIMS ARISING OUT OF INEFFECTIVE CONTRACTS - ILLEGAL CONTRACT - RECOMPENSE FOR SERVICES RENDERED The appellant solicitor made a claim for costs and disbursements incurred in representing the respondent client between 2004 and 2012. The respondent had been convicted of murder and gaoled and required legal representation to challenge his conviction. The appellant claimed that the retainer agreed in December 2004 was in the nature of a contingency costs agreement: payment of costs and disbursements was conditional on the appellant securing the respondent's release from prison and a payment of compensation to him. The appellant’s retainer was terminated in 2012 and a different legal team represented the respondent before the Court of Criminal Appeal, which in 2014 ordered that the respondent’s conviction be set aside and that there be a new trial. Instead, the Director of Public Prosecutions entered a nolle prosequi in 2015. The State government later made an ex gratia payment of $2.57 million to the respondent in 2018. The appellant then claimed his legal costs and disbursements of $535,000 on the basis that the contingency in his retainer was satisfied. On the respondent’s application, a Master gave summary judgment against the appellant on the basis that there was no “reasonable basis” for prosecuting the claim. -- 1 of 65 -- By the hearing of the appeal from the Master’s decision, the appellant had abandoned all appeal grounds save that he was entitled to reasonable fees and disbursements by way of a claim in quantum meruit. HELD (the Court), dismissing the appeal and refusing permission to appeal the order that the respondent recover the costs of the action from the appellant: 1. There is no reasonable basis for the appellant’s claim within the meaning of r 144 of the Uniform Civil Rules 2020 (SA). 2. The claim in quantum meruit fails because it was not unjust for the respondent client to accept the benefit of the appellant solicitor’s legal services without making restitution where those legal services were never to be remunerated unless the agreed contingency manifested, but it never did. 3. The three limbs of the contingency were not satisfied: the appellant was not acting for the respondent and did not perform the work required in connection with the respondent’s release and receipt of compensation and, properly understood, the respondent was neither released nor compensated as the contingency costs agreement anticipated. 4. Observations made about the law of maintenance and the requirements for a complying contingency costs agreement at common law and under the Legal Practitioners Act 1981 (SA) and the Professional Conduct Rules in force at the time of the alleged retainer in December 2004. Criminal Law Consolidation Act 1935 (SA) s 353A; Legal Practitioners Act 1981 (SA) s 42, Sch 3; Rules of Professional Conduct and Practice 2003 (SA) r 42; Statutes Amendment (Appeals) Act 2013 (SA) s 7; Uniform Civil Rules 2020 (SA) r 144, referred to. Adelaide Brighton Cement Ltd v Hallett Concrete Pty Ltd (2020) 137 SASR 117; Alabaster v Harness [1895] 1 QB 339; Alexiadis v Zirpiadis (2013) 302 ALR 148; Amadio Pty Ltd v Henderson (1998) 81 FCR 149; Athanasiou v Ward Keller (6) Pty Ltd (1998) 122 NTR 22; Australian Breeders Co-operative Society Ltd v Jones (1997) 150 ALR 488; Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560; Australian Medic Care Company Ltd (2011) 278 LSJS 137; Awwad v Geraghty & Co (a firm) [2000] 1 All ER 608; Baker Johnson v Jorgensen [2002] QDC 205; Beckett v New South Wales (2013) 248 CLR 432; Bolitho v Banksia Securities Ltd (No 6) (2019) 63 VR 291; Brenner v First Artists’ Management Pty Ltd [1993] 2 VR 221; British Waterways Board v Norman (1993) 26 HLR 232; Brown v Talbot & Olivier (1993) 9 WAR 70; Campbells Cash & Carry Pty Ltd v Fostif Pty Ltd (2006) 229 CLR 386; Catto v Hampton Australia Limited (in liquidation) (2007) 251 LSJS 164; Ceneavenue Pty Ltd v Martin (2008) 106 SASR 1; Clare v Joseph [1907] 2 KB 369; Clyne v NSW Bar Association (1960) 104 CLR 186; Cosenza v Roy Morgan Interviewing Services Pty Ltd [2020] SASC 65; Cubillo v Commonwealth (No 2) (2000) 103 FCR 1; David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; Davies v Minister for Urban Development and Planning (2011) 109 SASR 518; Dey v Victorian Railways Commissioners (1949) 78 CLR 62; Dietrich v The Queen (1992) 177 CLR 292; DW Fox Tucker Pty Ltd v Morgan [2023] SASCA 11; Eastman v Director of Public Prosecutions (ACT) (2003) 214 CLR 318; Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498; Estate of the late Sir Donald Bradman v Allens (2010) 107 SASR 1; Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87; Farrow Mortgage Services Pty Ltd (in liq) v Edgar (1993) 114 ALR 1; Findon v Parker (1843) 11 M & W 675; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; Gregory v Portsmouth City Council [2000] 1 AC 419; Hegarty v Keogh [2020] SASC 237; Hegarty v Keogh [2021] SASCA 46; Hurst v Vestcorp Ltd (1988) 12 NSWLR 394; In Re Stuart; Ex parte Cathcart [1893] 2 QB 201; Jones v Brian K Deegan & Associates [2011] SASC 44; Kadeh v Gill [2000] SASC 367; Kellar v Williams [2004] UKPC 30; Kelleher v Parole Board of New South Wales (1984) 156 CLR 364; Ladd v London Road Car Co (1900) 110 LT Jo 80; Lumbers v W Cook Builders Pty Ltd (in liq) (2008) 232 CLR 635; Mann v Parerson Construction Pty Ltd (2019) 267 CLR 560; Mayfair Trading Company Pty Ltd v Dreyer (1958) 101 CLR 428; McNamara Business & Property Law v Kasmeridis (2005) 92 SASR 382; McNamara Business & Property Law v Kasmeridis (2007) 97 SASR 129; Morris v Southwark London Borough Council (Law Society intervening) [2011] 2 All ER 240; Nelson v Nelson (1995) 184 CLR 538; Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; Pirone v Craig J Roberts (Solicitor) trading as Paul Kirk, Roberts & Co [2006] SASC 134; R v Chryssomallos (2019) 134 SASR 568; R v Keogh (2007) 175 A Crim R 153; R v Keogh (No 2) -- 2 of 65 -- (2014) 121 SASR 307; R v Keogh South Australian Court of Criminal Appeal, Matheson, Millhouse and Mullighan JJ, 22 December 1995; R v Keogh [2014] SASCFC 20; R v Keogh (No 1) [2015] SASC 179; R v Keogh (No 2) [2015] SASC 180; Re Sheehan and Sheehan (1990) 13 Fam LR 736; Renton Resources Pty Ltd v Johnson Winter & Slattery (2005) 240 LSJS 434; Ruddock v Taylor (2005) 222 CLR 612; Schokker v Commissioner of Taxation (No 2) (2000) 106 FCR 134; Sevastopoulos v Spanos [1991] 2 VR 194; Sievwright v Ward [1935] NZLR 43; Smits v Roach (2002) 55 NSWLR 166; Smits v Roach (2004) 60 NSWLR 711; Spencer v Commonwealth (2010) 241 CLR 118; Thai Trading Co v Taylor [1998] QB 781; Weiss v Barker Gosling (1993) 114 FLR 223; Wild v Simpson (1919) 2 KB 544; Winslade v Steri-Flow Filtration (2012) 113 SASR 69; Woodgate v Keddie (2007) 242 ALR 234; XX v Whittington Hospital NHS Trust [2021] AC 275, considered. -- 3 of 65 -- -- 4 of 65 -- HEGARTY v KEOGH (No 2) [2023] SASCA 30 Court of Appeal – Civil: Livesey P, Doyle and Bleby JJA THE COURT: Introduction 1 The appellant is a solicitor, and the respondent his former client. The appellant sued the respondent for unpaid fees and disbursements. By this appeal the appellant challenges a Master’s order granting summary judgment on that claim in favour of the respondent. The Master found that the evidence adduced by the appellant “demonstrates that he has no reasonable basis for prosecuting the claim” against the respondent.1 2 As a result, the appellant cannot recover the legal fees and disbursements he claims from the respondent. These were incurred when the appellant acted as solicitor for the respondent between 2004 and 2012 in connection with various litigation which was intended to facilitate a challenge to the respondent’s conviction for murder. The appellant retained Mr Borick QC (as he was) as counsel to appear for the respondent. 3 Later, a different legal team represented the respondent in the Court of Criminal Appeal when that Court set aside the respondent’s conviction and directed that he be retried.2 The Director of Public Prosecutions instead entered a nolle prosequi. The respondent was released after spending around 19 years in prison. The respondent later received an ex gratia payment of $2.57 million from the State government. 4 The appellant always acknowledged that the respondent was unable to pay his fees. However, he claimed that his retainer with the respondent included terms that he would work to secure the respondent’s release from prison and obtain compensation for the respondent and, in the event of success, the respondent would then pay to the appellant his fees and disbursements.3 It was pursuant to this “contingency costs agreement” that the appellant claimed a sum exceeding $535,000, of which more than $427,000 is said to be due to Mr Borick. 5 Clause 25 of Schedule 3 to the Legal Practitioners Act 1981 (SA), as now in force since 1 July 2020, defines “contingency fees” as an arrangement where the fees are referrable to the amount or value of the judgment or settlement, whereas under “conditional costs agreements” the fees are referrable to the outcome.4 Notwithstanding this change in nomenclature, it is convenient to describe what is 1 Hegarty v Keogh [2020] SASC 237, [136] (Judge Bochner). 2 R v Keogh (No 2) (2014) 121 SASR 307. 3 Hegarty v Keogh [2020] SASC 237, [8] (Judge Bochner). 4 The current South Australian Legal Practitioners Conduct Rules (SA) (adopted on 25 July 2011, as amended by the Society on 21 December 2021) no longer address “contingency fees” or “conditional costs agreements”. -- 5 of 65 -- [2023] SASCA 30 The Court 2 now a conditional costs agreement as a “contingency costs agreement” as that was the term used at the time of the retainer in 2004. 6 Before the hearing of this appeal, the appellant abandoned most of his appeal grounds and accepted that there was no written retainer as was required by s 42 of the Legal Practitioners Act 1981 (SA) (as in force at the time) (the Act). The appellant contended that he may nonetheless make a claim for reasonable fees by way of quantum meruit. 7 The applicant also sought leave to appeal against the order of the Master made on 11 December 2021 that the applicant pay the respondent’s costs of the action. 8 For the reasons that follow, the appeal should be dismissed. There is no reasonable basis for the claim within the meaning of r 144 of the Uniform Civil Rules 2020 (SA). The claim in quantum meruit fails because it was not unjust for the respondent client to accept the benefit of the appellant solicitor’s legal services without making restitution where those legal services were never to be remunerated unless the agreed contingency manifested, but it never did. The three limbs of the contingency were not satisfied: the appellant was not acting for the respondent and did not perform the work required in connection with the respondent’s release and receipt of compensation and, properly understood, the respondent was neither released nor compensated as the contingency costs agreement anticipated. 9 Leave to appeal against the costs order made by the Master concerning the action should be refused. 10 These reasons are set out as follows: The murder trial, the conviction and retainer ................................................................................. 3 The alleged written retainer ........................................................................................................... 6 The absence of advice from the appellant ...................................................................................... 7 The proceedings at first instance .................................................................................................... 8 The appeal to this Court ................................................................................................................. 9 The claims in quantum meruit and unjust enrichment ................................................................. 12 Pleadings ................................................................................................................................. 12 The context: the common law and s 42 of the Act ................................................................. 13 Two further common law considerations ............................................................................... 23 The Legal Practitioners Act and the Conduct Rules and maintenance ................................... 32 Did the Act and Conduct Rules bar restitutionary relief? ....................................................... 40 Consideration of the quantum meruit claim ........................................................................... 46 Elements of a claim in quantum meruit ........................................................................ 46 The concept of unjust enrichment in the context of quantum meruit ............................ 49 Determination: quantum meruit .............................................................................................. 51 -- 6 of 65 -- [2023] SASCA 30 The Court 3 The contingency in this case – three limbs ................................................................... 55 Was the contingency satisfied? ..................................................................................... 55 The release from prison ................................................................................................ 56 The payment of compensation ...................................................................................... 56 Did the appellant secure the respondent’s release and payment? ............................... 57 The costs of action where quantum meruit is not available ......................................................... 61 Conclusion ................................................................................................................................... 61 The murder trial, the conviction and retainer 11 On 23 August 1995, following a second trial by jury, the respondent was convicted of the murder of his fiancée, Ms Anna Jane Cheney, and sentenced to a term of life imprisonment. On 22 December 1995, the respondent’s first appeal to the Court of Criminal Appeal was dismissed.5 On 13 May 1997, the Court of Criminal Appeal dismissed an application to reopen the first appeal and refused to entertain a second appeal on the ground that it had no jurisdiction to do so.6 On 3 October 1997, the High Court refused special leave to appeal this decision.7 12 The primary pathology evidence led at trial was from Dr Colin Manock, the pathologist who conducted the autopsy. Dr Manock’s evidence was supported, in most respects, by another senior pathologist, Dr Ross James. From around 2002, the appellant, along with various legal academics and medical experts, began to publicly criticise the conduct of the respondent’s trial, particularly the evidence and conclusions expressed by the pathologists. 13 On 4 December 2004, the appellant visited the respondent at Port Augusta Prison to discuss the respondent’s criminal conviction. Thereafter, the appellant provided legal services to the respondent under a retainer to “do whatever was needed to be done in order to achieve his release from prison and hopefully a payment of compensation to him”.8 This included instructing counsel, pursuing complaints before the Medical Board of South Australia against the forensic pathologists Dr Manock and Dr James, submitting a number of petitions for mercy to the Governor,9 and attempting to pursue a second appeal against the 5 R v Keogh (South Australian Court of Criminal Appeal, Matheson, Millhouse and Mullighan JJ, 22 December 1995). 6 R v Keogh (No 2) (South Australian Court of Criminal Appeal, Matheson, Millhouse and Mullighan JJ, 13 May 1997). 7 Keogh v The Queen [1997] HCA Trans 313. 8 The retainer was described in those terms in the Affidavit of Michael S Hegarty sworn 2 July 2020. 9 The applicant petitioned the Governor for mercy five times. The first three petitions were rejected. The fourth petition was withdrawn. The Attorney-General deferred resolution of the fifth petition pending the outcome in R v Keogh (No 2) (2014) 121 SASR 307. -- 7 of 65 -- [2023] SASCA 30 The Court 4 respondent’s murder conviction in the Court of Criminal Appeal of the Supreme Court of South Australia10 and the High Court of Australia.11 14 The appellant’s claim to recover legal fees was initially made jointly with Mr Kevin Borick. Mr Borick had represented the respondent before December 2004. He had prepared a petition for mercy and lodged a complaint to the Medical Board regarding Dr Manock. Following the December 2004 meeting Mr Borick was then briefed by the appellant as counsel for the respondent. Mr Borick continued to act for the respondent until mid-2010 when Mr Keogh instructed the appellant that he no longer wanted Mr Borick to represent him. 15 The materials before the Master included an article written by Mr Borick in September 2011. In that article Mr Borick referred to the respondent’s lawyers as “his pro bono lawyers”. Following objection, the Master allowed the article to be adduced for the limited purpose of demonstrating that the respondent’s defence to the appellant’s claim is “not spurious, unreasonable or lacking in prospects”.12 16 In mid-2012, the respondent told the appellant that he no longer wished to receive legal advice from the appellant, and any retainer agreement between the respondent and appellant was terminated. The respondent subsequently instructed different solicitors to prosecute the application for a second or subsequent appeal against the respondent’s conviction. 17 In 2013, the Criminal Law Consolidation Act 1935 (SA) was amended to permit a person to seek permission to prosecute a second or subsequent appeal against conviction in certain circumstances.13 Soon after, on 21 June 2013 the respondent’s new legal team applied for permission to appeal, which was heard between 30 January and 3 March, and then granted on 11 March 2014.14 18 In 2014, the Court of Criminal Appeal heard the respondent’s second appeal and found that “fresh and compelling evidence” had been adduced, concluding that a substantial miscarriage of justice had occurred in respect of the respondent’s conviction. An important issue was the recantation by Dr Manock of various of his opinions, together with the availability of contrary pathology opinion evidence:15 Professor Vernon-Roberts’ report of 2004 was released to the applicant’s advisors on 5 December 2013. In February 2014, the testing recommended by Professor Vernon- Roberts was undertaken by Professor Thomas. This testing confirmed the tentative view 10 On 22 June 2007, a second application to the Court of Criminal Appeal to reopen the first appeal was dismissed again on the ground that the Court had no jurisdiction to entertain the appeal, R v Keogh (2007) 175 A Crim R 153. 11 On 16 November 2007, the High Court refused special leave to appeal against the decision dated 22 June 2007, Keogh v The Queen [2007] HCA Trans 693. 12 Hegarty v Keogh [2020] SASC 237, [25] (Judge Bochner). 13 Statutes Amendment (Appeals) Act 2013 (SA) s 7 inserting s 353A into the Criminal Law Consolidation Act 1995 (SA). This is now s 159 of the Criminal Procedure Act 1921 (SA). 14 R v Keogh [2014] SASCFC 20 (Nicholson J). 15 R v Keogh (No 2) (2014) 121 SASR 307, [16] and [18] (Gray, Sulan and Nicholson JJ). -- 8 of 65 -- [2023] SASCA 30 The Court 5 expressed by Professor Vernon-Roberts that tissue taken from a possible lesion on the medial aspect of Ms Cheney’s left leg contained haemosiderin. As a consequence, if the possible lesion was in fact a bruise, the conclusion could be safely drawn that it had been sustained at least 24 hours before death. The consequence of such a finding is that Dr Manock’s opinion as to the mechanism of murder is materially undermined. 19 The respondent’s conviction was set aside, and the Court directed that he be retried:16 In our opinion, the evidence, as identified in these reasons, demonstrates that the trial process was fundamentally flawed. A number of highly significant observations and opinions of Dr Manock materially misled the prosecution, the defence, the trial Judge and the jury. In these circumstances, there has been a substantial miscarriage of justice. The applicant’s argument before this Court and our consideration of this appeal has focussed primarily on the forensic pathology evidence. The task of the jury involved consideration of all of the circumstances of the case, including the fact that a young and apparently healthy woman died suddenly while taking a bath in circumstances where the applicant may have had a motive to murder her and had the opportunity to do so on the night of her death. Nevertheless, the forensic pathology evidence was a central component of the prosecution case before the jury. We do not accept the submission made by the applicant’s counsel that there should be a direction of acquittal. To the contrary, we consider that the non-expert circumstantial evidence, when considered together with the forensic pathology evidence as it is now understood, is such that it would remain open to a properly directed jury to convict… 20 On 13 November 2015, the Director of Public Prosecutions entered a nolle prosequi and, in 2018, the respondent received the ex gratia payment from the State, earlier mentioned. During this period the appellant wrote to the respondent’s new solicitors, seeking advice about the respondent’s compensation claim and providing estimates of Mr Borick’s fees at $1.5 million and for his own fees at around $350,000.17 21 In January 2020, the appellant commenced proceedings in the Supreme Court seeking a declaration that, on 4 December 2004, the appellant entered into a costs agreement with the respondent pursuant to which the respondent agreed to pay the appellant’s legal fees and disbursements incurred when representing him in attempts to overturn his murder conviction. It was the appellant’s case that his fees and disbursements would only become due and payable in the event that the respondent was released from prison and he received compensation in relation to his imprisonment. 22 On the hearing of this appeal, counsel for the appellant carefully framed the claim for compensation which his client discussed with the respondent in December 2004 as one based on an action for “wrongful imprisonment”.18 16 R v Keogh (No 2) (2014) 121 SASR 307, [353]-[356] (Gray, Sulan and Nicholson JJ). 17 Letter from Michael Hegarty & Associates to Barbaro Thilthorpe Lawyers dated 5 January 2018. 18 Presumably counsel was referring to the tort of “false imprisonment”, which depends upon an absence of lawful justification for the imprisonment, Ruddock v Taylor (2005) 222 CLR 612, 651; Cubillo v -- 9 of 65 -- [2023] SASCA 30 The Court 6 The alleged written retainer 23 The meeting at Port Augusta Prison on 4 December 2004 is central to the appellant’s claim. It is not disputed that this meeting took place.19 It is not disputed that the appellant represented the respondent in the period between 2004 and 2012. 24 The appellant said that during the December 2004 meeting he acknowledged that the respondent could not pay his fees at the time that the work was done and so he was prepared to wait until the finalisation of the matter. The appellant claimed that during this meeting it was agreed that he would act for the respondent on the basis that his fees would be paid out of any compensation payment received by the respondent following the finalisation of his matter. The appellant said that there was “no suggestion that [he] was to act ‘pro bono’ or without fee”. 25 The respondent denied the appellant’s version of what occurred, contending that he accepted the appellant’s offer to act for him on the condition that any professional services provided by the appellant would be on a “voluntary basis with no expectation of any fee or other reward in any circumstances”. At the time of the meeting the respondent had been in gaol for nearly a decade and was indigent. 26 The appellant claimed that at the December 2004 meeting he provided the respondent with a written retainer document, being his “Standard Terms of Engagement”. The appellant maintained that he invited the respondent to read the retainer and return a signed acknowledgement slip. He admitted that the respondent did not ever sign and return the acknowledgement slip. 27 Curiously, in later correspondence dated 10 April 2012 the appellant said that what he provided to the respondent was “a draft agreement to that effect”. 28 The respondent denied that he was provided with any written retainer or terms of engagement. He denied that there was any retainer in the terms alleged by the appellant. The written retainer has never been provided to the Court. According to the appellant, that is because he no longer has a copy of the document. He said that it was kept on the file which was provided to the solicitors who represented the respondent after the appellant ceased acting in mid-2012. 29 The appellant’s affidavit sworn on 2 July 2020 exhibited what the appellant described as his ‘Standard Terms of Engagement’ at the time of the December 2004 meeting. The appellant described this document as containing “similar provision to that provided to Mr Keogh”. However, these standard terms Commonwealth (No 2) (2000) 103 FCR 1, 354-355. There was no suggestion made of malicious prosecution: Beckett v New South Wales (2013) 248 CLR 432, 438 [4] (French CJ, Hayne, Crennan, Kiefel and Bell JJ); Gregory v Portsmouth City Council [2000] 1 AC 419, 426 (Lord Steyn). 19 Although there is a discrepancy between the asserted date of the meeting and the date of the meeting as recorded in the appellant’s time entries. -- 10 of 65 -- [2023] SASCA 30 The Court 7 comprised “a letter of engagement which incorporates a costs agreement” and purported to apply to “your family law dispute”. 30 These standard terms did not apply to the retainer between the appellant and the respondent. The terms stipulated that the appellant “shall act as counsel … appearing before the Court to argue your case as necessary”. They required that the client pay disbursements as they became payable. They stipulated that the appellant’s legal practice would not request an expert report until money was paid into his practice trust account. The terms also specified that work would be charged on the basis of “time charging” at a specified hourly rate. An itemised invoice for work undertaken by the appellant’s practice was to be provided monthly and payment was expected within 14 days of receipt of the invoice. Work on a matter could be stopped where an account remained overdue. The terms warned that if there was a payment of party/party costs there may be a shortfall which would have to be paid. Before the appellant would commence work, $1,000 had to be paid into trust. The total likely cost of the matter could not be predicted. 31 Clearly, these terms were not put into effect during the course of the appellant’s retainer. The absence of advice from the appellant 32 The appellant did not suggest that he gave the respondent any advice about the retainer, nor about the prospect of securing the respondent’s release from prison, together with the payment of any compensation. 33 There is no suggestion that the appellant advised the respondent that he could or should obtain legal advice about the terms of the draft written retainer, or that the appellant was advised about the difference between the “time charging” set out in the draft and the ordinary scale of fees, as set out in the Schedules to the Supreme Court Rules which were then in force. 34 There is no suggestion that the respondent received any specific advice from the appellant, and certainly no written advice, about what would be regarded as a successful outcome for the purposes of triggering an obligation in the respondent to make payment of the appellant’s fees and disbursements. For example, the appellant’s evidence did not address whether the appellant’s proposal depended upon an acquittal or a pardon together with, as his counsel submitted during the hearing of this appeal, the payment of compensation to the respondent by way of damages for false imprisonment, with or without an order for costs. 35 All of these matters were simply left unaddressed on the evidence of the appellant. The only inference open is that no advice was given by the appellant to the respondent about these matters.20 20 The parties agreed that the affidavit of the appellant sworn on 2 July 2020 must be taken to represent the “high water mark” of the appellant’s claim. -- 11 of 65 -- [2023] SASCA 30 The Court 8 The proceedings at first instance 36 These problems were not ameliorated by a properly pleaded case. 37 By his revised draft Statement of Claim,21 the appellant entirely abandoned his claim for relief by way of a declaration and instead only pleaded a claim in debt. The appellant sought judgment in the sum of $535,907.39 and pleaded that the following legal services and disbursements had been provided: 25.1.1. … by the Applicant between December 2004 and about August 2012 in the sum of $108,157.39; and 25.1.2. by Kevin Borick QC of counsel between December 2004 and about August 2011 in the sum of $427,750.00; 38 The appellant pleaded an alternative case based on quantum meruit. In the further alternative, the appellant sought judgment for legal costs and disbursements to be taxed. The basis for that taxation was not identified. 39 By an interlocutory application dated 22 May 2020, the respondent sought orders that the proceedings be dismissed or, alternatively, that summary judgment be given against the appellant and Mr Borick, or in the further alternative, that the statement of claim be struck out. The respondent argued that the retainer failed to conform to the requirements of s 42(6)(c) of the Act and the Rules of Professional Conduct and Practice 2003 (SA) (the Conduct Rules) and was incapable of proof. 40 Prior to the hearing of the respondent’s interlocutory application, Mr Borick sought leave to discontinue his proceedings. His fees were to be claimed by the appellant as disbursements. On 31 July 2020, the Master gave Mr Borick leave to discontinue his proceedings. 41 The respondent’s interlocutory application was heard on 31 July and 13 August 2020. On 11 December 2020, the Master found that the respondent was entitled to summary judgment on the basis that the appellant had no reasonable prospect of successfully prosecuting his claim. 42 In determining to give summary judgment, the Master considered whether the appellant had a real, as opposed to fanciful, prospect of success if the matter continued to trial.22 Her Honour first considered whether there was a reasonable prospect that the Court would find that the alleged retainer relied upon by the appellant was enforceable under the Act, as in force in December 2004, before considering enforceability at common law. 21 The proceedings before the Master proceeded on the basis of a draft, revised Statement of Claim: Hegarty v Keogh [2020] SASC 237, [3] (Judge Bochner). 22 Adelaide Brighton Cement Ltd v Hallett Concrete Pty Ltd (2020) 137 SASR 117, [59] (Doyle J), citing Spencer v Commonwealth (2010) 241 CLR 118, [24]-[26] (French CJ and Gummow J), [52]-[60] (Hayne, Crennan, Kiefel and Bell JJ) and Davies v Minister for Urban Development and Planning (2011) 109 SASR 518, [43] (Bleby J). -- 12 of 65 -- [2023] SASCA 30 The Court 9 43 The Master was not satisfied there was a reasonable prospect that the retainer was enforceable as a “contingency costs agreement” under the Act. Section 42(6) required that the essential terms be in writing,23 and the appellant had no real prospect of establishing that there was an agreement in writing because the costs agreement exhibited by the appellant “in no way accords with the evidence that [the appellant] gives as to the terms of the agreement between them”.24 Her Honour reasoned that it was not the appellant’s evidence that the essential terms of the agreement were set out in writing. Rather, the speculative or “no win - no fee” component of the costs agreement was an oral term which did not comply with s 42(6) of the Act. 44 In the event the appellant was able to establish that the agreement complied with s 42(6)(c), her Honour found that there was no reasonable prospect that the appellant could establish that the manner in which the agreement was entered into was fair, which was also required by the Act.25 45 In these circumstances, the Master held that a claim in quantum meruit was the only cause of action available to the appellant. 46 The appellant submitted that he provided the respondent with legal services, and the respondent took the benefit of those services, “satisfying elements one and two of a claim in quantum meruit”. He contended that the decision of Clyne v NSW Bar Association applied equally to a retainer for a civil or a criminal matter.26 47 After reviewing the common law position in the United Kingdom and Australia, the Master concluded that speculative or “no win - no fee” contingency costs agreements are sanctioned by the common law in respect of civil matters in South Australia, but that in criminal matters they are contrary to the Conduct Rules and the Act, and void as contrary to public policy. 48 The Master ruled that the appellant’s submission that the alleged retainer was not in respect of a criminal matter had “no reasonable prospect of success” and the appellant could not succeed with any claim based on quantum meruit. Accordingly, the Master found that the respondent was entitled to summary judgment in respect of the appellant’s claim. The appeal to this Court 49 By his notice of appeal dated 30 December 2020, the appellant initially advanced seven grounds of appeal.27 However, by 26 May 2021, the appellant had 23 See Renton Resources Pty Ltd v Johnson Winter & Slattery [2005] SASC 231 (Renton Resources), [30] (Anderson J, with whom Vanstone and Layton JJ agreed); McNamara Business & Property Law v Kasmeridis (2005) 92 SASR 382, [61]-[64] (Gray, Sulan and Layton JJ); Pirone v Craig J Roberts (Solicitor) trading as Paul Kirk, Roberts & Co [2006] SASC 134 (Pirone), [21] (Layton J); Catto v Hampton Australia Ltd (in liq) [2007] SASC 360, [7]-[8] (Judge Lunn). 24 Hegarty v Keogh [2020] SASC 237, [82] (Judge Bochner). 25 Hegarty v Keogh [2020] SASC 237, [97] (Judge Bochner). 26 Clyne v NSW Bar Association (1960) 104 CLR 186 (Clyne). 27 Hegarty v Keogh [2021] SASCA 46, [17] (Livesey JA). -- 13 of 65 -- [2023] SASCA 30 The Court 10 abandoned all claims and appeal grounds save the sole ground that the Master erred in law in finding that the appellant’s quantum meruit claim had no reasonable prospect of success: [The Master] [e]rred in law in failing to find that the appellant was entitled to payment of proper legal fees on the basis of a quantum meruit, or by reference to the doctrine of unjust enrichment. 50 On this appeal, the question is whether the appellant should have been permitted to press a claim for the recovery of fees and disbursements on a restitutionary basis, whether as on a quantum meruit or otherwise, by reference to the principles of unjust enrichment. 51 The appellant did not challenge the Master’s conclusions that the retainer agreement alleged between the appellant and respondent was not a “complying contingency costs agreement” which was not enforceable under the Act and Conduct Rules, and that the retainer concerned a matter which was criminal in nature.28 One of the reasons for these conclusions which was not challenged was the absence of any evidence that the appellant had ever exercised his professional judgment to “conclude that there was some prospect of the respondent being released from prison and receiving compensation”.29 52 In addition, the appellant did not challenge the Master’s findings that there was no reasonable prospect that he could demonstrate that “the manner in which the [retainer] agreement was entered into was fair”, and that there was no reasonable prospect he could demonstrate “that the agreement was fair”,30 with the result that the appellant did not demonstrate that he had any reasonable basis for contending that the retainer agreement was not “unfair and unreasonable” as required by r 42.2 of the Conduct Rules. 53 The parties agreed that the task for this Court was to review the material before the Master and determine whether she was correct in finding that “there is no reasonable basis for prosecuting the claim” within the meaning of r 144.2(2)(a) of the Uniform Civil Rules 2020 (SA). The parties generally approached that issue in accord with the reasons of Doyle J in Adelaide Brighton Cement, where his Honour explained:31 For these reasons, I agree with the observation by Bleby J in Davies v Minister for Urban Development and Planning to the effect that any need for debate about the extent of the lowering of the bar under the South Australian rules has been overtaken by the decision in Spencer v Commonwealth. While aspects of the reasoning in cases such as Ceneavenue Pty 28 Hegarty v Keogh [2020] SASC 237, [130]-[133] (Judge Bochner). 29 Hegarty v Keogh [2020] SASC 237, [90] (Judge Bochner). 30 Hegarty v Keogh [2020] SASC 237, [97]-[101] (Judge Bochner). 31 Adelaide Brighton Cement Ltd v Hallett Concrete Pty Ltd (2020) 137 SASR 117 (Adelaide Brighton Cement), [59]-[60] (Doyle J). See also Cosenza v Roy Morgan Interviewing Services Pty Ltd [2020] SASC 65, [26]-[30] (Livesey J). -- 14 of 65 -- [2023] SASCA 30 The Court 11 Ltd v Martin remain of assistance, they should be seen through the prism of the High Court’s reasons in Spencer v Commonwealth. By way of summary of the approach articulated in Spencer v Commonwealth, it can be said that the power to determine a claim summarily should not be exercised lightly. Exercise of the power requires a practical assessment of whether the applicant has real, as opposed to merely fanciful, prospects of success. While the Court need not be satisfied that the claim is hopeless or bound to fail, nevertheless it must be cautious not to do a party injustice by summarily determining an action, particularly where there are disputed issues of fact or law or mixed fact and law, merely because the Court considers that the claim is unlikely to succeed. However, beyond these very general guidelines, the Court should focus upon the words used in the rules and avoid applying any judicial gloss. (Citations omitted) 54 The appellant nonetheless relied on authorities which were decided long before introduction of the test set out in r 144 of the Uniform Civil Rules 2020 (SA). In particular, the appellant referred to authorities such as Dey v Victorian Railways Commissioners (NSW),32 General Steel Industries Inc v Commissioner for Railways33 and Fancourt v Mercantile Credits Ltd,34 without recognising that these authorities – like Ceneavenue Pty Ltd v Martin35 - must now be approached with considerable caution. It is necessary to apply the test laid down by the present rule rather than former tests, such as whether “there is no real question to be tried” or ‘the action should not be permitted to go to trial in the ordinary way because it was apparent that it must fail’. Whilst these authorities demonstrate that the exercise of the power to summarily terminate proceedings must “always be attended with caution”,36 the question for the Master, and for this Court, is whether the appellant has a “reasonable basis” for prosecuting his claim. 55 The essential question on this appeal is therefore whether there is a reasonable basis for prosecuting a claim in quantum meruit. Before considering the requirements for that kind of claim, it is first necessary to address the common law, as well as the Act and the Conduct Rules that were in place at the time of the alleged retainer, because these assist in identifying the extent to which a “contingency costs agreement” was permitted in South Australia, or alternatively was contrary to public policy. 56 Whether a “contingency costs agreement” was permitted in South Australia, or was contrary to public policy, informs the extent to which there remained scope to recognise a claim in quantum meruit in respect of the appellant’s claim for costs and disbursements. 32 Dey v Victorian Railways Commissioners (1949) 78 CLR 62, 91 (Dixon J). 33 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125. 34 Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, 99. 35 Ceneavenue Pty Ltd v Martin (2008) 106 SASR 1 (Debelle J, with whom Duggan and Anderson JJ agreed). To this may be added Kadeh v Gill [2000] SASC 367, [29] (Doyle CJ, with whom Williams and Wicks JJ agreed) and Estate of the late Sir Donald Bradman v Allens (2010) 107 SASR 1, [132] (Sulan and Layton JJ). 36 Spencer v Commonwealth (2010) 241 CLR 118, [24] (French CJ and Gummow J). -- 15 of 65 -- [2023] SASCA 30 The Court 12 The claims in quantum meruit and unjust enrichment Pleadings 57 The appellant did not plead the cause of action now relied upon before the Master and this Court in his Statement of Claim. The appellant first sought to rely on a claim in quantum meruit in his “draft proposed Statement of Claim (Revision 1)”. This draft claim was never filed but it was provided to the Court and the respondent as an exhibit to the affidavit of the appellant’s solicitor dated 28 July 2020. The Master proceeded on the basis of the draft claim, as was agreed by the parties. Paragraph two of the draft claim stated: 2. The cause of action relied on is debt for the provision of legal services: 2.1 Pursuant to a specific retainer; or 2.2 On the basis of quantum meruit. 58 The appellant has never pleaded the essential elements of his claim in quantum meruit. The parties agreed that the affidavit of the appellant sworn on 2 July 2020 must be taken to represent the “high water mark” of the appellant’s claim. 59 One preliminary point that may be addressed is the proper characterisation of the appellant’s retainer. That is, whether it should be considered to be advice and representation of the respondent in a civil matter or a criminal matter or something else. The proper characterisation of the retainer is relevant to the prohibition on contingency costs agreements in criminal matters specified by the combination of s 42(6) of the Act and r 42.2 of the Conduct Rules. One may accept that the proper characterisation of the retainer must be made at the time of entry into the retainer when the likely work required is being considered, and that a retainer may evolve over time, requiring work which differs from that which was initially envisaged. 60 In this case the respondent was concerned about his criminal conviction for murder. However, the strategy which was adopted in December 2004 was, apart from pressing further appeals before the Court of Criminal Appeal for which there was no jurisdiction in 2004, one of challenging the work of the pathologists in various regulatory or disciplinary hearings. This was presumably intended to lay a foundation for a favourable exercise of the prerogative of mercy in connection with the various petitions that were being submitted to the Attorney-General for consideration by the Governor in Council. On one view of it, this work was not strictly criminal in nature, though it was directed to achieving the outcome of undermining the respondent’s criminal conviction. 61 On the appellant’s case, it would also appear that the retainer envisaged the payment of compensation. Again, it is difficult to see how that kind of work could -- 16 of 65 -- [2023] SASCA 30 The Court 13 be regarded as strictly criminal in nature, though it might have been thought to be a consequence of addressing the respondent’s criminal conviction.37 62 Whilst these issues tend to call into question the accuracy of describing the appellant’s retainer as one concerned with a criminal matter, that characterisation is not the subject of any appeal ground and it is convenient to proceed on the basis of the Master’s finding that the retainer concerned a criminal matter, at least as at December 2004. The context: the common law and s 42 of the Act 63 In McNamara Business & Property Law v Kasmeridis the Full Court addressed on two occasions and in some detail the common law before and after the introduction of s 42 of the Act,38 as well as aspects of the proper construction of s 42. Relevantly, s 42 then provided: 42—Costs … (6) A legal practitioner may make an agreement in writing with a client for— (a) payment of a specified amount by way of legal costs (which may—but need not—consist of a daily, hourly or other time-related rate for professional work carried out by the legal practitioner on the client's behalf); or (b) payment of legal costs in accordance with a specified scale; or (c) subject to any limitations imposed by the Society's professional conduct rules or the regulations—payment of a contingency fee to be calculated on a basis set out in the agreement on fulfilment of a condition stated in the agreement. (7) The Supreme Court may, in proceedings under this section, rescind or vary an agreement under subsection (6) if it considers that any term of the agreement is not fair and reasonable. 64 On the first occasion, in Kasmeridis (No 1), the Full Court held that a costs agreement could be said to be in writing where the terms were all in writing even though there was no signature or written assent from the client, but the client orally assented to the written retainer, as was recorded in a contemporaneous file note.39 The Court explained that the requirements of s 42(6) of the Act operated as 37 One may interpolate here the question whether it was realistically thought that compensation could be achieved from an acquittal when the likely best outcome before the 2013 amendments was a favourable exercise of the prerogative of mercy and some form of pardon coupled, for example, with a finding of false imprisonment. It will be necessary to return to these issues later in these reasons. 38 McNamara Business & Property Law v Kasmeridis (2005) 92 SASR 382 (Gray, Sulan and Layton JJ) (Kasmeridis (No 1)); McNamara Business & Property Law v Kasmeridis (2007) 97 SASR 129 (Kasmeridis (No 2)) (Doyle CJ, with whom Gray and David JJ agreed). 39 The existence of a written record of assent in the form of a file note was not essential to the decision that there was an enforceable retainer for the purposes of s 42(6) of the Act. -- 17 of 65 -- [2023] SASCA 30 The Court 14 protections for a client which were additional to those which applied at common law:40 The retainer in the present case attracts to the relationship the fiduciary duties that are inherent in a solicitor-client relationship. The principles of equity and the common law are available to protect a client against any unfairness in an agreement. … Section 42(6) is to be interpreted against the background that its terms were designed to promote sound and reasonable regulation of a profession that owes fiduciary duties to clients. The subsection, by its very terms, acknowledges that it is addressing an aspect of the relationship of solicitor and client. That relationship carries accepted obligations of confidence, trust and dependence. The section is not to be construed as taking away the protection provided to a client by the common law. (Citations omitted) 65 The Full Court emphasised that the onus of establishing that an agreement was made in accordance with the Act rests on the solicitor and that what was required to discharge the onus depended on the nature of the fiduciary relationship and the circumstances of dependence and vulnerability that may exist.41 66 The Full Court proceeded on the assumption that it was necessary for the costs agreement to be in writing.42 It will be necessary to return to that assumption because it has been made in a number of cases and, consistently with it, the necessity for a written retainer was accepted by the appellant on this appeal. 67 The issue before the Full Court was whether a single Judge was correct to follow earlier authorities in other jurisdictions which had required that the client sign or otherwise indicate assent in writing, where the evidence was that the client had only indicated his assent to the costs agreement to the solicitor over the telephone.43 The Court referred to another line of authorities, unrelated to solicitors’ costs agreements, which had accepted that a written offer containing all material terms could be accepted orally and regarded as a “written contract”.44 68 The Full Court regarded it as significant that the earlier iteration of the Act had required that the written costs agreement be “signed by the party to be charged” (or a duly authorized agent) but that this requirement was jettisoned when 40 McNamara Business & Property Law v Kasmeridis (2005) 92 SASR 382, [37] and [47] (Gray, Sulan and Layton JJ). 41 McNamara Business & Property Law v Kasmeridis (2005) 92 SASR 382, [64] (Gray, Sulan and Layton JJ). 42 McNamara Business & Property Law v Kasmeridis (2005) 92 SASR 382, [3], [20] and [61] (Gray, Sulan and Layton JJ): “The statutory requirement that an agreement be made in writing…”. 43 McNamara Business & Property Law v Kasmeridis (2005) 92 SASR 382, [24] (Gray, Sulan and Layton JJ), where the authorities which required the client’s signature or written assent were collected. 44 McNamara Business & Property Law v Kasmeridis (2005) 92 SASR 382, [31]-[35] (Gray, Sulan and Layton JJ). -- 18 of 65 -- [2023] SASCA 30 The Court 15 s 42(6) was introduced in 1981.45 The Court concluded that “legislative change was intended” and that an oral acceptance of the written costs agreement was sufficient.46 The Full Court emphasised the need for full disclosure to be made by a solicitor to a client and that the presence of s 42(7), which empowered “the court to set aside retainer agreements in the event of unfairness”, diminished the need for the client’s assent to be in writing.47 69 The matter was then remitted to the Master, who applied s 42(7) of the Act and set aside the costs agreement, finding that the terms were not “fair and reasonable”. That decision was appealed, which brought the matter back before the Full Court. 70 The second Full Court, in Kasmeridis (No 2), dismissed the appeal from the Master’s decision, finding that the costs agreement was not fair and reasonable, emphasising the absence of any advice given by the solicitor to the client at the time the costs agreement was made.48 71 Chief Justice Doyle, speaking for the Full Court in Kasmeridis (No 2), explained the need for advice to be given by the solicitor to the client, particularly where the solicitor seeks to agree a retainer incorporating time charging.49 Indeed, it had been held in many cases that the failure to give advice, of itself, warranted the conclusion that that the costs agreement was not fair.50 72 On the question of fairness generally, Doyle CJ relied on, amongst others, the decision in Weiss, where various of the earlier authorities were helpfully collected by Fogarty J:51 Although fairness has been a consistent requirement of the common law there is limited discussion in the cases as to precisely what is meant by that term. In fact many of the cases ultimately turned on questions of undue influence or unreasonableness. However, reference to some of the cases indicates the concept that the common law courts had in mind in relation to this issue. For example, in Stedman v Collett (1854) 17 Beav 608; 51 ER 1171 the reference at 614-615; 1173-1174 is to the transaction being “open and fair and without pressure”; in Re Stuart; Ex parte Cathcart, Lord Esher (at 204) …, referred to 45 McNamara Business & Property Law v Kasmeridis (2005) 92 SASR 382, [38]-[40] (Gray, Sulan and Layton JJ). 46 McNamara Business & Property Law v Kasmeridis (2005) 92 SASR 382, [40]-[41], [62]-[63] (Gray, Sulan and Layton JJ). 47 McNamara Business & Property Law v Kasmeridis (2005) 92 SASR 382, [49]-[55], [58] (Gray, Sulan and Layton JJ). 48 McNamara Business & Property Law v Kasmeridis (2007) 97 SASR 129, [19] (Doyle CJ, with whom Gray and David JJ agreed). 49 McNamara Business & Property Law v Kasmeridis (2007) 97 SASR 129, [48] (Doyle CJ, with whom Gray and David JJ agreed). 50 Athanasiou v Ward Keller (6) Pty Ltd (1998) 122 NTR 22, 32 (Mildren J), citing Weiss v Barker Gosling (1993) 114 FLR 223 (Weiss), 256 (Fogarty J): “the failure of a solicitor to explain fully the degree and impact of the difference between the proposed fees and the relevant scale is fatal to the agreement being held to be fair”. See also In the Marriage of S; Re S and P (1982) 66 FLR 315, 328 (Evatt CJ and Fogarty J) and Brown v Talbot & Olivier (1993) 9 WAR 70 (Ipp J). 51 Weiss v Barker Gosling (1993) 114 FLR 223, 255-256 (Fogarty J). -- 19 of 65 -- [2023] SASCA 30 The Court 16 fairness as the requirement that the “solicitor makes an agreement with a client who fully understands and appreciates that agreement”; in Clare v Joseph [1907] 2 KB 369 at 376 the reference is to the contract being made “under circumstances that precluded any suspicion of an improper attempt on the solicitor's part to benefit himself at his client’s expense”; in Bear v Waxman, Cussen J (at 301-302) referred to it as being that “his client was not under the influence of the pressure arising from the relation of solicitor and client, but was acting either by good advice, or on the dictates of his own judgment, with every opportunity of exercising it properly, from his own good sense and intelligence, with a sufficient capacity and knowledge of business”; in Emeritus Pty Ltd v Mobbs [1991] NSW Conv R 55-588 the reference at 59,319 by Studdert J of the Supreme Court of New South Wales is to the requirement that the solicitor must not “take advantage of the relationship between his client and himself or receive any benefit from an agreement into which the client has been induced to enter by reason of his reliance upon the solicitor”; in New South Wales Crime Commission v Fleming (1991) 24 NSWLR 116 at 123 the reference is to “improper advantage of their clients”. 73 The common law consistently recognised that it was necessary that costs agreements be shown to be both fair and reasonable and that the burden of proving those requirements rested with the solicitor seeking to uphold the agreement.52 74 These requirements informed the terms of the Act, which operated in addition to the common law protections. Doyle CJ relied on the approach of Lord Alverstone CJ in Clare v Joseph to the effect that the 1870 legislation provided “fresh safeguards for the protection of the client” as well as certain rights to a solicitor provided the solicitor complied with the requirements of the legislation.53 75 Chief Justice Doyle pointed out that “on one view s 42(6) of the Act was purely permissive, and a practitioner can enter into a costs agreement independently of that provision”. Where that is done, the agreement is subject to “control by the court in the exercise of its inherent powers”.54 As will be seen, the cases on s 42(6) have regarded this provision as both permissive and restrictive, for though a solicitor was not obliged to comply with it, a retainer of the kind specified by s 42(6) could not be agreed or enforced unless the solicitor complied with terms of the provision. This aspect of s 42(6) did not arise for decision in Kasmeridis (No 2). 76 In the course of explaining his approach to s 42(7) of the Act, Doyle CJ emphasised the long history of scrutiny by the courts of costs agreements:55 There is a long history of scrutiny by courts of agreements, between a solicitor and prospective client or existing client, as to the fees the solicitor will charge the client. Such agreements were permitted, but were scrutinised with care. In 1870 the United Kingdom 52 Weiss v Barker Gosling (1993) 114 FLR 223, 266 (Fogarty J); Athanasiou v Ward Keller (6) Pty Ltd (1998) 122 NTR 22, 29 (Mildren J): “At common law, a costs agreement is enforceable if it is made to appear to the Court that the agreement is “fair and reasonable”, the burden of proof resting on the solicitor seeking to uphold the agreement”. 53 Clare v Joseph [1907] 2 KB 369, 372 (Alverstone LCJ). 54 McNamara v Kasmeridis (2007) 97 SASR 129, [7], citing Athanasiou v Ward Keller (6) Pty Ltd (1988) 8 NTLR 23, 30 (Mildren J). 55 McNamara v Kasmeridis (2007) 97 SASR 129, [19] (Doyle CJ, with whom Gray and David JJ agreed). -- 20 of 65 -- [2023] SASCA 30 The Court 17 Parliament enacted the Attorneys’ and Solicitors’ Act 1870 (UK). It is clear that this Act was not required to enable solicitors to enter into a costs agreement with a client. The intent was to provide a procedure for the scrutiny and control of such agreements. The effect of the legislation was that an agreement for payment of costs could not be enforced until it had been determined whether or not the agreement was “in all respects fair and reasonable between the parties”: s 9. 77 Chief Justice Doyle explained that agreements between a solicitor and a client were scrutinised with particular care by the courts, and this informed the approach to be taken to s 42(7) of the Act, citing the following observations of Fletcher Moulton LJ in Clare v Joseph:56 … At that date agreements between a solicitor and his client as to the terms on which the solicitor’s business was to be done were not necessarily unenforceable. They were, however, viewed with great jealousy by the Courts, because they were agreements between a man and his legal adviser as to the terms of the latter’s remuneration, and there was so great an opportunity for the exercise of undue influence, that the Courts were very slow to enforce such agreements where they were favourable to the solicitor unless they were satisfied that they were made under circumstances that precluded any suspicion of an improper attempt on the solicitor’s part to benefit himself at his client’s expense. … 78 Whereas the English legislation had required that the Court determine whether the costs agreement was “fair and reasonable”, the Act required that the Court determine whether any term was “not fair and reasonable”. Doyle CJ did not regard the difference in language as material.57 He held that the following passage from the reasons of Lord Esher MR in In Re Stuart applied to the application of s 42 of the South Australian Act:58 … By s 9 the Court may enforce an agreement if it appears that it is in all respects fair and reasonable. With regard to the fairness of such an agreement, it appears to me that this refers to the mode of obtaining the agreement, and that if a solicitor makes an agreement with a client who fully understands and appreciates that agreement that satisfies the requirement as to fairness. But the agreement must also be reasonable, and in determining whether it is so the matters covered by the expression “fair” cannot be re-introduced. As to this part of the requirements of the statute, I am of opinion that the meaning is that when an agreement is challenged the solicitor must not only satisfy the Court that the agreement was absolutely fair with regard to the way in which it was obtained, but must also satisfy the Court that the terms of that agreement are reasonable. If in the opinion of the Court they are not reasonable, having regard to the kind of work which the solicitor has to do under the agreement, the Court are bound to say that the solicitor, as an officer of the Court, has no right to an unreasonable payment for the work which he has done, and ought not to have made an agreement for remuneration in such a manner. 79 In In Re Stuart Lord Esher had given emphasis to whether the circumstances of entry into the retainer could be described as “fair” and, separately, whether the 56 Clare v Joseph [1907] 2 KB 369, 376 (Fletcher Moulton LJ). 57 McNamara v Kasmeridis (2007) 97 SASR 129, [25] (Doyle CJ, with whom Gray and David JJ agreed). 58 In Re Stuart; Ex parte Cathcart [1893] 2 QB 201 (In re Stuart), 204-205; McNamara v Kasmeridis (2007) 97 SASR 129, [22] and [45] (Doyle CJ, with whom Gray and David JJ agreed). -- 21 of 65 -- [2023] SASCA 30 The Court 18 terms of the agreement were “reasonable”. That approach to whether a costs agreement is not “fair and reasonable” has since been followed.59 80 As will be seen, the common law demarcation between whether the circumstances of entry were “fair” and whether the terms of the agreement were “reasonable” was, to some extent, blurred by the requirement under r 42.2 of the Conduct Rules to determine whether “the terms of a cost agreement are unfair or unreasonable”. Nonetheless, that rule required that explicit consideration be given to both the circumstances of entry and to the terms of the costs agreement. And, as has been mentioned, there was no challenge made on this appeal to the Master’s findings against the appellant solicitor and in favour of the respondent client to the effect that there was no reasonable prospect that the appellant could demonstrate that the circumstances of entry were fair and that the terms of the retainer were also fair.60 81 As Doyle CJ explained in Kasmeridis (No 2), the courts scrutinise costs agreements which provide for time charging with particular care because of their potential to operate to the advantage of the solicitor and to the disadvantage of the client:61 … I consider that this Court should, as I have already said, follow the approach taken by the English cases, and the approach taken in other Australian jurisdictions under similar legislation. It is for the practitioner to show that the agreement is fair and reasonable, if the client raises a challenge on those grounds and those terms are to be applied in the manner indicated by Lord Esher in the passage set out above. However, the cases emphasise as a basic consideration the question of whether the client’s decision to agree to the terms of the costs agreement was a free and informed choice, the client having been given the advice that would give the client a fair understanding of the operation and effect of the costs agreement: see, for example, Brown v Talbot & Olivier (1993) 9 WAR 70 at 77; Law Society of NSW v Foreman (1994) 34 NSWLR 408 at 435- 437 Mahoney JA. This is not surprising, having regard to the foundation on which the Court’s inherent power over solicitors and costs agreements is based: see Clare v Joseph. The cases have emphasised the fiduciary nature of the solicitor and client relationship, and the importance of the solicitor dealing with a potential conflict between the solicitor’s interests and the solicitor’s duty to the client by making full disclosure to the client. … … There is also the obvious point that time charging does nothing to discourage inefficiency, and indeed has a tendency to reward slowness and prolixity. Particular concern has been expressed by courts about agreements which provide for a flat hourly rate 59 Jones v Brian K Deegan & Associates [2011] SASC 44 (Judge Withers); Piper Alderman (A Firm) v Australian Medic-Care Company Ltd (2011) 278 LSJS 137; [2011] SASC 234 (Stanley J). 60 Hegarty v Keogh [2020] SASC 237, [97]-[98] and [100]-[101] (Judge Bochner). Although the Master used the word “fair”, it may be that her Honour had in mind reasonableness when addressing the terms of the retainer rather than the circumstances surrounding entry into it. 61 McNamara v Kasmeridis (2007) 97 SASR 129, [26], [28], [29], [31] and [32] (Doyle CJ, with whom Gray and David JJ agreed). -- 22 of 65 -- [2023] SASCA 30 The Court 19 of charging, without regard to the experience of the practitioner or the kind of work being done. Some examples of these concerns can be found in New South Wales Crime Commission v Fleming (1991) 24 NSWLR 116 (at 126) per Gleeson CJ and (at 141) per Kirby P; in Law Society of NSW v Foreman (at 436-437) per Mahoney JA and in Re Morris Fletcher and Cross’ Bill of Costs (at 243-244) per Fryberg J. A helpful summary of the relevant considerations can be found in Dal Pont at [2.36]-[2.37]. None of this leads to the conclusion that such agreements are not permissible. The effect of the cases is that such agreements should be scrutinised with particular care because of their potential to work in favour of the interests of the solicitor and against the interests of the client… 82 Reference was earlier made to the assumption that a costs agreement under s 42(6) must be in writing. That assumption has been made in a number of cases, as was explained by Judge Lunn in Catto v Hampton:62 S[ection] 42(6) stipulates that “a legal practitioner may make an agreement in writing with a client”. The “may” in sub (6) is imperative and does not allow an agreement in terms of subs (6)(a) for time based charges to be made other than in writing: Civil Procedure SA, Vol 2, [23,920.5]. I am not aware of any direct authority to this effect, but it is implicit in the reasons in Renton’s case and Pirone’s case mentioned below. If it were otherwise, the requirement of writing would be pointless. Counsel for the defendants referred to authorities that a retainer for a solicitor need not be in writing. The mandatory effect of subs (6) is not contrary to those authorities, but it means that that part of the retainer agreement which deals with a solicitor’s right to charge on a time-costing basis must be in writing. The writing referred to in subs (6) must be sufficient to constitute the essential terms of a legal agreement for the solicitor to be paid its costs in this manner. … This does not mean that there cannot be some implied terms in such an agreement, but the essential terms have to be in writing. 83 Judge Lunn was an experienced Master who reviewed costs agreements and conducted Supreme Court taxations of costs over many years. His views on costs agreements warrant serious consideration. So, whilst Doyle CJ observed that s 42(6) of the Act was expressed in permissive terms, and costs agreements may be made other than in accordance with s 42(6), the point of the assumption made in the cases relied on by Judge Lunn was that time charging was not permissible unless the requirement for writing in s 42(6) was satisfied. That followed because the use of the word “may” in s 42(6) had been construed as “imperative”. The consequence was that if a solicitor wished to enter into a retainer which contained a costs agreement based on time charging, not only must those terms be in writing and the subject of advice from the solicitor to the client, there must also be assent to those written terms by the client. 62 Catto v Hampton Australia Limited (in liquidation) (2007) 251 LSJS 164; [2007] SASC 360, [7]-[8] (Judge Lunn), citing Renton Resources Pty Ltd v Johnson Winter & Slattery (2005) 240 LSJS 434; [2005] SASC 231, [30] (Anderson J, with whom Vanstone and Layton JJ agreed); McNamara Business & Property Law v Kasmeridis (2005) 92 SASR 382, [61]-[64] (Gray, Sulan and Layton JJ); Pirone v Craig J Roberts (Solicitor) trading as Paul Kirk, Roberts & Co [2006] SASC 134, [21] (Layton J). -- 23 of 65 -- [2023] SASCA 30 The Court 20 84 The corollary was that if a solicitor wished to enter into a costs agreement outside the reach of s 42(6) of the Act, that costs agreement could not incorporate time charging. The solicitor was confined to charging fees at the scale recognised in the Schedules to the Supreme Court Rules, as Judge Lunn found in Catto v Hampton. In addition, where s 42(6) was not satisfied the solicitor could of course agree to act without reward of any kind, that is, pro bono. 85 The cases referred to by Judge Lunn illustrate these propositions. Importantly, they demonstrate the necessity for costs agreements to be made in writing not only where the solicitor sought time charging, but also where the solicitor wished to agree a specified sum or scale for costs, or enter into a speculative, “no win – no fee” contingency costs retainer. 86 In Renton Resources the solicitor contended that there was a costs agreement made with the client under s 42(6)(a) of the Act for a specified amount for costs and disbursements.63 A taxing master agreed and held that it was for the client to apply to rescind or vary the agreement under s 46(7) of the Act. On appeal, the Full Court disagreed, finding that an agreement to pay a specified amount by way of legal costs had to be in writing and, on the facts of that case, there was no written agreement made under s 42(6) which contained all of the material terms:64 Section 42(6) requires an agreement in writing for the payment of a specified amount by way of legal costs. The question of what was an agreement in writing for these purposes was discussed by Fry J in Re Raven; Ex parte Pitt (1881) 45 LT 742 at 743 as follows: What is an agreement in writing? It must be a document which shall show all the terms of the bargain between the parties and show by writing the accession of both parties to those terms. This passage was cited and applied by White J in McNamara Business and Property Law v Kasmeridis (2004) 90 SASR 151. In my view the terms which have been articulated by Mr Howard have not all been reduced to writing in the emails alleged to constitute the second agreement. … … I do not consider that “all the terms of the bargain between the parties” as referred to by Fry J, have been reduced to writing as is required by s 42(6) of the Act… 87 The result was that as the agreement to pay a specified amount was not in writing, as s 42(6) required, the costs agreement could not be enforced by the solicitor and the client was entitled to a taxation of costs. 63 Renton Resources Pty Ltd v Johnson Winter & Slattery (2005) 240 LSJS 434; [2005] SASC 231, [18]-[19] (Anderson J, with whom Vanstone and Layton JJ agreed). 64 Renton Resources Pty Ltd v Johnson Winter & Slattery (2005) 240 LSJS 434; [2005] SASC 231, [30]-[33] (Anderson J, with whom Vanstone and Layton JJ agreed). Whilst the Full Court allowed the appeal against the decision of White J in Kasmeridis (No 1), that ruling was confined, as has been seen, to the requirement that a client’s assent be in writing which was not in issue in Renton Resources. -- 24 of 65 -- [2023] SASCA 30 The Court 21 88 In Pirone the solicitor succeeded before a magistrate in enforcing a “no win – no fee” retainer where the solicitor had reserved the right to require that the client pay costs if she failed to follow legal advice (Clause 3).65 Justice Layton proceeded on the basis that s 42(6) of the Act stipulated the “legislative requirements for entering into an agreement for the purposes of a contractual arrangement between lawyer and client” concerning costs.66 That is, unless there was an agreement in writing, Clause 3 of the “no win – no fee” contingency costs retainer could not be agreed or enforced. 89 Justice Layton held that the magistrate was wrong to find that the client had received and entered into the “no win – no fee” retainer. The onus of proving the existence of the retainer lay with the solicitor.67 In addition, her Honour was not satisfied that the client had expressly or impliedly accepted its terms, or that correspondence between the solicitor and the client could be regarded as a written retainer containing all material terms.68 Justice Layton was in any event critical of the solicitor’s conduct:69 The [solicitor’s] case is that it seeks to enforce a retainer which includes a condition in Clause 3 that, notwithstanding the assertion of “no fee”, there are certain circumstances in which the client would be obliged to pay. Bearing in mind the description of "no win – no fee", it would be incumbent on the plaintiff, as a firm of solicitors who owe fiduciary obligations of disclosure, to ensure that the client was made aware of the specific terms of that condition, particularly when fees would be payable by the client. … Bearing in mind that the solicitor/client relationship is a fiduciary relationship and that there is a requirement for disclosure, it was incumbent on the solicitor to ensure that the client was made aware that her conduct was regarded as falling within Clause 3 such that she was liable to pay costs. None of the letters in which the plaintiff adverts to the poor behaviour of the defendant, refer to the fact that Clause 3 of the no win – no fee retainer agreement may have been triggered. Most importantly the letters do not indicate that if the defendant failed to comply with Clause 3, and if she continued to refuse to accept his advice, she could be liable to pay costs pursuant to the agreement. 90 Whilst acknowledging that the solicitor had performed legal work and encountered difficulties in acting for the client, Layton J entered judgment for the 65 Pirone v Craig J Roberts (Solicitor) trading as Paul Kirk, Roberts & Co (2006) 244 LSJS 284; [2006] SASC 134, [7]-[8] (Layton J). 66 Pirone v Craig J Roberts (Solicitor) trading as Paul Kirk, Roberts & Co (2006) 244 LSJS 284; [2006] SASC 134, [21] (Layton J). 67 Pirone v Craig J Roberts (Solicitor) trading as Paul Kirk, Roberts & Co (2006) 244 LSJS 284; [2006] SASC 134, [22]-[27], [32] (Layton J). 68 Pirone v Craig J Roberts (Solicitor) trading as Paul Kirk, Roberts & Co (2006) 244 LSJS 284; [2006] SASC 134, [35]-[40] (Layton J): “Accordingly, it seems to me that the requirements of s 42(6) have not been complied with…”. 69 Pirone v Craig J Roberts (Solicitor) trading as Paul Kirk, Roberts & Co (2006) 244 LSJS 284; [2006] SASC 134, [36], [42] (Layton J). -- 25 of 65 -- [2023] SASCA 30 The Court 22 client, observing that it was “incumbent upon legal practitioners to ensure that they comply with the terms of any retainer in order to recover costs from the client”.70 91 These cases demonstrate the following propositions regarding costs retainers at common law and under s 42 of the Act: 1. At common law, it was necessary that a costs agreement be shown to be both fair and reasonable. Fairness was concerned with the circumstances of entry into the agreement whereas reasonableness was concerned with the terms and operation of the costs agreement. The burden of proving these requirements rested with the solicitor seeking to uphold the agreement. 2. The terms of costs agreements have been “viewed with great jealousy by the Courts”.71 At common law, it was necessary for a solicitor to give explicit advice to a client because of “the fiduciary nature of the solicitor and client relationship, and the importance of the solicitor dealing with a potential conflict between the solicitor’s interests and the solicitor’s duty to the client by making full disclosure to the client”.72 3. Although expressed in permissive terms, s 42(6) of the Act was consistently interpreted in an imperative manner, requiring a solicitor to make a costs agreement in writing with the client if the solicitor wished to agree time charging, agree a specified amount or scale for fees, or enter into a contingency costs agreement in the form of a speculative or “no win – no fee” retainer. 4. Consistently with the imperative approach taken to s 42(6) of the Act, solicitors could not enter into costs agreements of the kind addressed by s 42(6) which did not conform to the requirements of the Act and the Conduct Rules. The onus of proving the existence of a written costs agreement with a client that accorded with the Act and Conduct Rules lay with the solicitor. 5. Where the costs agreement did not conform to the requirements of the Act and the Conduct Rules, for example because there was no writing as required by s 42(6) of the Act, the solicitor could not enforce an agreement for the payment of costs on the basis of time charging, or for a specified sum or scale, or on the basis of a contingency costs agreement, such as under a “no win – no fee” retainer. 70 Pirone v Craig J Roberts (Solicitor) trading as Paul Kirk, Roberts & Co [2006] SASC 134, [51] (Layton J). 71 In Re Stuart [1893] 2 QB 201, 204-205 (Lord Esher); McNamara v Kasmeridis (2007) 97 SASR 129, [26] (Doyle CJ, with whom Gray and David JJ agreed). 72 McNamara v Kasmeridis (2007) 97 SASR 129, [28] (Doyle CJ, with whom Gray and David JJ agreed). -- 26 of 65 -- [2023] SASCA 30 The Court 23 6. Where all material terms had been reduced to writing, it was sufficient if the client signed the costs agreement or otherwise indicated assent to its terms, whether in writing or orally or by conduct.73 7. Where a retainer ostensibly complies with the requirements of s 42(6) of the Act, it nonetheless remained open to a client to challenge a retainer under s 42(7) of the Act and apply to the Supreme Court to “rescind or vary” an agreement under subsection (6) if it considers that “any term of the agreement is not fair and reasonable”. 92 Where these requirements were not satisfied, solicitors were generally required to have their costs taxed on the basis of the scale under the applicable rules of court. Similarly, whilst costs agreements could be entered into outside the terms of s 42(6) and regulated under the court’s inherent powers, in practice these were agreements permitting the recovery of scale of costs, or no costs at all, such as where the solicitor agreed to act “pro bono”.74 In Pirone, where the solicitor brought the “no win – no fee” retainer to an end, it prevented the solicitor from seeking any payment at all by way of costs for work done for the client. 93 As has been mentioned, there is no suggestion that there was a relevant written retainer which conformed to s 42(6) of the Act, nor that the appellant gave the respondent any advice about what appears to have been a draft written retainer, nor about the terms of the proposed speculative or “no win – no fee” contingency costs agreement. The necessity for considered advice to be given by a solicitor to a client about costs under a retainer has been a consistent requirement at common law, long before the introduction of s 42(6) of the Act. It will be necessary to return to this issue. Two further common law considerations 94 Before addressing the terms of the Act and the Conduct Rules in more detail, it is next necessary to consider two further aspects of the common law: first, the extent to which maintenance is permissible in South Australia and, associated with that, the common law requirements for a contingency costs agreement in Australia. The second aspect relates to whether a contingency costs agreement has been recognised as permissible in a criminal matter in Australia. 95 Where a solicitor acts for a client on the basis that the client will not be expected to pay the solicitor’s fees and disbursements unless the client obtains an agreed outcome, such as success in the litigation, that kind of retainer involves both a contingency costs agreement and a form of “maintenance”.75 Maintenance has been described as “the act of assisting the plaintiff in any legal proceeding in 73 See, for example, DW Fox Tucker Pty Ltd v Morgan [2023] SASCA 11, [28] (Livesey P, Doyle and Bleby JJA) where acceptance was evidenced by conduct, in that case by payment. 74 From the Latin “pro bono publico” meaning “for the public good”, see Jill Anderson and Gordon Renouf, “Legal Services ‘for the public good’” (2003) 28(1) Alternative Law Journal 13. 75 See generally, G E Dal Pont, The Law of Costs (LexisNexis, 5th ed, 2021), [3.42ff]. -- 27 of 65 -- [2023] SASCA 30 The Court 24 which the person giving the assistance has no valuable interest, or in which he acts from any improper motive”.76 96 Champerty is a form of maintenance. Champerty is maintenance in which “the subject matter of the suit shall be divided between the plaintiff and the maintainor”.77 97 At common law, maintenance and champerty were unlawful and regarded as torts. Until relatively recently, they were also crimes.78 Whilst there has been considerable relaxation in modern attitudes to maintenance, there has remained opposition to champerty in Australia, particularly where a solicitor seeks a share of the client’s award as is apparently routinely done in the United States. Nonetheless, the point of the decision of the High Court in Campbells Cash & Carry v Fostif was to recognise the circumstances in which it was lawful for a litigation funder to take a share of the client’s award for profit, and the Court held that to do so was not necessarily contrary to public policy or an abuse of process.79 98 The history of maintenance and champerty, and the way in which public policy attitudes have evolved over time, was reviewed in some detail by the High Court in Campbells Cash & Carry v Fostif.80 For example, the corrupting influence of maintenance and champerty was adverted to in the following way by Gummow, Hayne and Crennan JJ:81 Maintenance and champerty, though well known in early English law, “were known almost exclusively as modes of corruption and oppression in the hands of the King's officers and other great men”.82 99 Nonetheless, by 1843 some forms of maintenance were regarded as appropriate at least where, as Lord Abinger CB explained, they were not:83 … confined to cases where a man improperly, and for the purpose of stirring up litigation and strife, encourages others either to bring actions, or to make defences which they have no right to make ... [By contrast], if a man were to see a poor person in the street oppressed and abused, and without the means of obtaining redress, and furnished him with money or 76 Campbells Cash & Carry Pty Ltd v Fostif Pty Ltd (2006) 229 CLR 386 (Campbells Cash & Carry v Fostif), [68] (Gummow, Hayne and Crennan JJ), footnote 137, citing Stephen ‘A Digest of the Criminal Law (Crimes and Punishments)’ (1877), 86. 77 See Campbells Cash & Carry Pty Ltd v Fostif Pty Ltd (2006) 226 CLR 386, [68]-[82] (Gummow, Hayne and Crennan JJ), footnote 137, citing Stephen ‘A Digest of the Criminal Law (Crimes and Punishments)’ (1877), 86. 78 Although whether maintenance was properly regarded as a crime at common law was doubted by the High Court in Clyne v New South Wales Bar Association (1960) 104 CLR 186, 203. 79 Campbells Cash & Carry Pty Ltd v Fostif Pty Ltd (2006) 229 CLR 386, [88]-[91] (Gummow, Hayne and Crennan JJ, with whom Gleeson CJ [1] and Kirby J [146] agreed). Discussed in G E Dal Pont, The Law of Costs (LexisNexis, 5th ed, 2021), [3.45]. 80 Campbells Cash & Carry Pty Ltd v Fostif Pty Ltd (2006) 226 CLR 386, [68]-[82] (Gummow, Hayne and Crennan JJ). See also Clyne (1960) 104 CLR 186, 203-205. 81 Campbells Cash & Carry v Fostif (2006) 226 CLR 386, [72] (Gummow, Hayne and Crennan JJ). 82 Winfield, “Assignment of Choses in Action” (1919) 35 Law Quarterly Review 143 at 143 referring to Winfield, “The History of Maintenance and Champerty” (1919) 35 Law Quarterly Review 50 at 65ff. 83 Findon v Parker (1843) 11 M & W 675, 682-683 [152 ER 976, 979]. -- 28 of 65 -- [2023] SASCA 30 The Court 25 employed an attorney to obtain redress for his wrongs, it would require a very strong argument to convince me that that man could be said to be stirring up litigation and strife, and to be guilty of the crime of maintenance. 100 Later still, Lord Esher MR explained the role of public policy, as distinct from “general principles of right and wrong or of natural justice”, when evaluating the doctrine of maintenance in Alabaster v Harness:84 The doctrine of maintenance, which appears in the Year Books, and was discussed briefly by Lord Loughborough in Wallis v Duke of Portland,85 and more elaborately by Lord Coleridge, CJ, in Bradlaugh v Newdegate,86 does not appear to me to be founded so much on general principles of right and wrong or of natural justice as on considerations of public policy. I do not know that, apart from any specific law on the subject, there would necessarily be anything wrong in assisting another man in his litigation. But it seems to have been thought that litigation might be increased in a way that would be mischievous to the public interest if it could be encouraged and assisted by persons who would not be responsible for the consequences of it, when unsuccessful. Lord Loughborough, in Wallis v Duke of Portland, says that the rule is, ‘that parties shall not by their countenance aid the prosecution of suits of any kind, which every person must bring upon his own bottom, and at his own expense.’ 101 Reflecting the relaxation in modern attitudes to maintenance, in 1992 the South Australian Parliament introduced Schedule 11 into the Criminal Law Consolidation Act 1935 (SA).87 By clause 1(3) of Schedule 11, the common law offences of maintenance and champerty were abolished. Clause 3 of Schedule 11 provides: 3—Special provisions relating to maintenance and champerty (1) Liability in tort for conduct constituting maintenance or champerty at common law is abolished. (2) The abolition of criminal and civil liability for maintenance and champerty does not affect— (a) any civil cause of action accrued before the abolition; (b) any rule of law relating to the avoidance of a champertous contract as being contrary to public policy or otherwise illegal; (c) any rule of law relating to misconduct on the part of a legal practitioner who is party to or concerned in a champertous contract or arrangement. 102 The continuing emphasis given in Schedule 11 to public policy, illegality and misconduct by a legal practitioner in connection with champerty, as distinct from maintenance, may be noted. The High Court in Campbells Cash & Carry v Fostif explained that under legislation such as Schedule 11, considerations of public 84 Alabaster v Harness [1895] 1 QB 339 at 342, cited in Stevens v Keogh (1946) 72 CLR 1, 28 (Dixon J). 85 (1797) 3 Ves Jun 494 [30 ER 1123]. 86 (1883) 11 QBD 1. 87 The other Australian jurisdictions are referred to in G E Dal Pont The Law of Costs, (LexisNexis, 5th ed, 2021), [3.42] footnote 192. -- 29 of 65 -- [2023] SASCA 30 The Court 26 policy or illegality may still arise, though the legislation “does not state explicitly whether questions of maintenance or champerty are relevant to issues of abuse of process”.88 103 Embarking on a detailed historical review of maintenance and champerty, the High Court noted the way in which assignments of causes of action had at one time been precluded by champerty but ultimately upheld.89 Whilst the Court was addressing a case of champerty by a litigation funder, its reasons applied to maintenance generally, acknowledging “fears about adverse effects on the processes of litigation and fears about the ‘fairness’ of the bargain struck between funder and intended litigant”:90 Neither of these considerations, whatever may be their specific application in a particular case, warrants formulation of an overarching rule of public policy that either would, in effect, bar the prosecution of an action where any agreement has been made to provide money to a party to institute or prosecute the litigation in return for a share of the proceeds of the litigation, or would bar the prosecution of some actions according to whether the funding agreement met some standards fixing the nature or degree of control or reward the funder may have under the agreement. To meet these fears by adopting a rule in either form would take too broad an axe to the problems that may be seen to lie behind the fears. 104 The High Court took a robustly positive view of maintenance, rejecting “public policy questions beyond those that would be relevant when considering the enforceability of the agreement for maintenance … as between the parties to the agreement”.91 The Court also rejected the fear that the potential for corruption of the processes of the Court could not otherwise be addressed:92 Why is that fear not sufficiently addressed by existing doctrines of abuse of process and other procedural and substantive elements of the court's processes? And if lawyers undertake obligations that may give rise to conflicting duties there is no reason proffered for concluding that present rules regulating lawyers’ duties to the court and to clients are insufficient to meet the difficulties that are suggested might arise. 105 The scope for the rules regulating lawyers’ duties to the Court and to clients to meet these potential difficulties, and to protect the processes of the Court and 88 Campbells Cash & Carry Pty Ltd v Fostif Pty Ltd (2006) 226 CLR 386, [67] (Gummow, Hayne and Crennan JJ). 89 Campbells Cash & Carry Pty Ltd v Fostif Pty Ltd (2006) 226 CLR 386, [70]-[74] (Gummow, Hayne and Crennan JJ), referring, amongst many other authorities, to Dennis, “The Law of Maintenance and Champerty” (1890) 6 Law Quarterly Review 169, 179 and to Norman v Federal Commissioner of Taxation (1963) 109 CLR 9, 26 (Windeyer J). 90 Campbells Cash & Carry Pty Ltd v Fostif Pty Ltd (2006) 226 CLR 386, [90]-[91] (Gummow, Hayne and Crennan JJ). 91 Campbells Cash & Carry Pty Ltd v Fostif Pty Ltd (2006) 226 CLR 386, [84] (Gummow, Hayne and Crennan JJ). 92 Campbells Cash & Carry Pty Ltd v Fostif Pty Ltd (2006) 226 CLR 386, [93] (Gummow, Hayne and Crennan JJ). -- 30 of 65 -- [2023] SASCA 30 The Court 27 the interests of clients, even in large-scale class action litigation, has been recently demonstrated.93 106 The decision of the High Court in Campbells Cash & Carry v Fostif demonstrates how questions of public policy evolve and do not ossify. 94 As has been acknowledged for some time, there are powerful reasons why maintenance in the form of contingency costs agreements should be encouraged by the courts, at least to the extent that these conform to the common law and the requirements of any applicable legislation and rules. They represent one way of ensuring access to justice for litigants who might otherwise be wholly without the means to embark on litigation in order to vindicate lawful rights and interests. That is, “Justice would very often not be done if there were no professional [lawyers] to take their cases and take the chance of ultimate payment”.95 107 In this case the Master recognised the marked difference between the English and Australian public policy approaches to maintenance in the form of contingency costs agreements where the solicitor agrees only to charge the client if the client obtains a satisfactory outcome, the so-called speculative or “no win – no fee” retainer.96 108 The English position in rejection of contingency costs agreements was summarised by May LJ in the Court of Appeal in Awwad v Geraghty in 2000:97 … I consider that the judgments of Lord Denning MR and Buckley LJ in Wallersteiner v Moir (No 2) [1975] 1 All ER 849, [1975] QB 373 and of Lord Denning MR in Trendtex Trading Corp v Crédit Suisse [1980] 3 All ER 721 at 741, [1980] QB 629 at 654, read as a whole, hold that a lawyer who conducts a case on the basis that he is to be paid if he wins but not if he loses is unlawful. Lord Denning MR says this in terms in passages quoted by Millett LJ in the Thai Trading case. Schiemann LJ in his judgment in the present appeal has set out extended passages from the judgments in Wallersteiner's case. I am not persuaded, as was Millett LJ in the Thai Trading case [1998] 3 All ER 65 at 71, [1998] QB 781 at 788, that these authorities are to be read as applying only to a lawyer who makes an arrangement for a contingency fee which entitles him to a reward over and above his ordinary profit costs if he wins. On the contrary and in particular, the passage in Lord Denning MR's judgment in the Trendtex Trading Corp case [1980] 3 All ER 721 at 741, [1980] QB 629 at 654 speaks both of a lawyer who seeks to recover a portion of the damages in addition to his proper costs, and of one who is to be paid if he wins, but not if he loses. These authorities, in my judgment, state the law as it was up to 1990. In so far as Ladd v London Road Car Co (1900) 110 LT Jo 80 might possibly be read as holding 93 See for example, Bolitho v Banksia Securities Ltd (No 6) (2019) 63 VR 291 (John Dixon J), where false invoicing by the claimants’ legal team, including senior counsel, was trenchantly addressed. 94 See also XX v Whittington Hospital NHS Trust [2021] AC 275, [64] (McCombe LJ). 95 Ladd v London Road Car Co (1900) 110 LT Jo 80 (Lord Russell CJ). 96 Hegarty v Keogh [2020] SASC 237, [104], [114] (Judge Bochner). The difference between the Australian and English approaches was also addressed in Re Sheehan and Sheehan (1990) 13 Fam LR 736, 744, 749 (Fogarty J) and in Schokker v Commissioner of Taxation (No 2) (2000) 106 FCR 134, 139 (French J). See G E Dal Pont, The Law of Costs (LexisNexis, 5th ed, 2021), [3.46]. 97 Awwad v Geraghty & Co (a firm) [2000] 1 All ER 608 (Awwad v Geraghty), 635 (May LJ, with whom Lord Bingham of Cornhill CJ agreed). See also Hughes v Kingston Upon Hull City Council [1998] EWHC 343. -- 31 of 65 -- [2023] SASCA 30 The Court 28 otherwise (which I doubt, as did Kennedy LJ in the Leeds City Council case), that did not represent the law 90 years later. 109 By contrast, since the 1960 decision of Clyne the High Court of Australia has been prepared to uphold contingency costs agreements in certain circumstances.98 110 In Clyne, the appellant challenged an order made by the Full Court of the Supreme Court of New South Wales that his name be struck off the roll on the basis that he was not a fit and proper person to practise as a Barrister. The charges of grave professional misconduct brought against the appellant arose out his prosecution of a solicitor for four counts of alleged maintenance in civil proceedings, together with the conduct of these prosecutions by the appellant in circumstances where he made extravagant allegations of fraud, perjury and blackmail against the solicitor, knowing he had no evidence to support those charges and allegations. The prosecutions were designed to intimidate the solicitor into ceasing to act for the former wife of the appellant’s client in various litigation against the client. 111 Although the case did not directly raise any question about the law relating to maintenance, the High Court found it “undesirable” to leave the case without expressing an opinion. In obiter dicta the Court held that a contingency costs agreement is not necessarily void at common law:99 And it seems to be established that a solicitor may with perfect propriety act for a client who has no means, and expend his own money in payment of counsel’s fees and other outgoings, although he has no prospect of being paid either fees or outgoings except by virtue of a judgment or order against the other party to the proceedings. This, however, is subject to two conditions. One is that he has considered the case and believes that his client has a reasonable cause of action or defence as the case may be. And the other is that he must not in any case bargain with his client for an interest in the subject-matter of litigation, or (what is in substance the same thing) for remuneration proportionate to the amount which may be recovered by his client in a proceeding: see Fleming, The Law of Torts (1957) p. 638, where it is pointed out that the position in the United States is different. 112 The two conditions for upholding a contingency costs agreement at common law were that the solicitor “has considered the case and believes that his client has a reasonable cause of action or defence” and, in addition, the solicitor’s bargain did not extend to taking an interest in the subject-matter of the client’s litigation. The latter requirement was clearly related to a concern about champerty. The former was related to the concern that unmeritorious or vexatious litigation should not be encouraged by solicitors. 98 Clyne v NSW Bar Association (1960) 104 CLR 186. 99 Clyne v NSW Bar Association (1960) 104 CLR 186, 203. See the review of the Australian position after Clyne in the Family Court, in Re Sheehan and Sheehan (1990) 13 Fam LR 736, 744 and 749 (Fogarty J), and in the Federal Court, in Schokker v Commissioner of Taxation (No 2) (2000) 106 FCR 134, 139 (French J). -- 32 of 65 -- [2023] SASCA 30 The Court 29 113 The High Court’s decision in Clyne followed a number of earlier Australian decisions,100 as well as the earlier New Zealand decision of Sievwright v Ward, which had confined its acceptance of contingency costs agreements to civil matters:101 If a person without lawful justification assists another to prosecute or to defend civil judicial proceedings and thereby causes special damage to the person against whom the proceedings are brought or defended he commits the tort of maintenance … As a matter of principle, however, if there had been no authority, I should be prepared to hold that if a solicitor (or a partner of a firm of solicitors), has honestly investigated a client’s case, and honestly come to the conclusion that the client has a good cause of action or a good defence to an action, then, so long as he makes no bargain with his client to take a share of the proceeds, he does not, by advancing money for disbursements and by conducting the case without having received payment on account of his costs, commit the wrong of either champerty or maintenance. 114 Whilst it might perhaps be obvious, the acceptance of maintenance in the form of contingency costs agreements or conditional fee agreements has usually been addressed in civil litigation, particularly where the client seeks damages or other compensation, and it is anticipated that costs and disbursements will be paid to the solicitor out of a combination of any one or all of the award paid by the defendant and any order for costs made against the defendant in favour of the client. Certainly, Clyne appears to confine its acceptance of contingency costs agreements to civil matters (where there can be “a good cause of action or a good defence to an action”).102 115 In England, the scope for making a contingency costs agreement in a criminal matter was considered but rejected in British Waterways Board v Norman,103 a case relied on by the respondent. In that case, an impecunious respondent successfully prosecuted the appellant for breaches of the Environmental Protection Act 1990. The respondent applied for an order that the appellant pay her costs. The respondent’s solicitors admitted that they would not have expected the respondent to pay their fees if she had lost. Lord Justice McCowan, with whom Tuckey J agreed, said:104 I confine myself to the nature of the litigation in this case, namely a criminal prosecution, and to the fact that the contingency fee in question was impliedly agreed between the prosecutor and her solicitor. In my judgment that remains against public policy. 116 As the appellant pointed out, British Waterways was a case where the costs agreement funded a prosecution, not a defence, and McCowan LJ accepted that “it 100 Re Sheehan and Sheehan (1990) 13 Fam LR 736, 744 (Fogarty J), being Hayes v Levinson (1890) 16 VLR 305; Carpenter v Boyce (1896) 22 VR 248; Bulli Coal Mining Co Case (1896) 17 LR (NSW) Eq 242, 250, (1897) 18 LR (NSW) Eq 146; Stevens v. Keogh (1946) 72 CLR 1 and Reilly v The Melbourne Tramway and Omnibus Co (1893) 19 VLR 75. 101 Sievwright v Ward [1935] NZLR 43, 46-47(Ostler J). 102 Clyne v New South Wales Bar Association (1960) 104 CLR 186, 203. 103 British Waterways Board v Norman (1993) 26 HLR 232 (British Waterways). 104 British Waterways Board v Norman (1993) 26 HLR 232, 242 (McCowan LJ, with whom Tuckey J agreed). -- 33 of 65 -- [2023] SASCA 30 The Court 30 would be bad enough if the defence were to operate on a contingency basis, but it is a great deal worse if the prosecution do so”.105 117 It may also be noted that Tuckey J rejected any suggestion that the disallowance of the scope to enter into a contingency costs agreement deprived litigants of representation in cases where it was necessary to require that defendants address “substandard property causing danger to health”.106 As his Lordship explained, if the costs agreement made it clear that the client remained liable irrespective of the outcome, “there can be no objection to the solicitor agreeing that … liability need not be discharged until the outcome … is known”.107 At that stage it would be open to the solicitor “to decide not to enforce [the] right to be paid” if some or all of the costs were not recovered from the other party.108 118 The appellant also relied on the judgment of Millet LJ in Thai Trading Co to contend that British Waterways has been overruled.109 In Thai Trading Co, the defendant paid a deposit for a bed to be acquired from the plaintiffs but rejected the bed on delivery as unsatisfactory and refused to pay the balance of the purchase price. The plaintiffs brought an action for the balance and the defendant counter- claimed to recover the deposit. The defendant’s husband, who was a solicitor, acted for her on the basis that he would recover his ordinary profit costs only if she succeeded in the action. The defendant obtained judgment on her counterclaim, with costs. On a review of taxation, the primary judge concluded that he was bound by authority to hold that the arrangement as to payment of fees was contrary to public policy and void as an agreement for the payment of a contingency fee. No liability attached to the plaintiff to pay costs. On appeal, Millett LJ said of British Waterways:110 If this is the law then something has gone badly wrong. It is time to step back and consider the matter afresh in the light of modern conditions. I start with three propositions. First, if it is contrary to public policy for a lawyer to have a financial interest in the outcome of a suit, this is because (and only because) of the temptations to which it exposes him. At best he may lose his professional objectivity; at worst he may be persuaded to attempt to pervert the course of justice. Secondly, there is nothing improper in a lawyer acting in a case for a meritorious client who to his knowledge cannot afford to pay his costs if the case is lost: see Singh v. Observer Ltd. (Note) [1989] 3 All E.R. 777; A. Ltd. v. B. Ltd. [1996] 1 W.L.R. 665. Not only is this not improper; it is in accordance with current notions of the public interest that he should do so. Thirdly, if the temptation to win at all costs is present at all, it is present whether or not the lawyer has formally waived his fees if he loses. It arises from his knowledge that in practice he will not be paid unless he wins. In my judgment the reasoning in British Waterways Board v. Norman, 26 H.L.R. 232 is unsound. 105 British Waterways Board v Norman (1993) 26 HLR 232, 242 (McCowan LJ, with whom Tuckey J agreed). 106 British Waterways Board v Norman (1993) 26 HLR 232, 242 (Tuckey J). 107 British Waterways Board v Norman (1993) 26 HLR 232, 242 (Tuckey J). 108 British Waterways Board v Norman (1993) 26 HLR 232, 243 (Tuckey J). 109 Thai Trading Co v Taylor [1998] QB 781 (Thai Trading Co). 110 Thai Trading Co v Taylor [1998] QB 781, 789-791 (Millet LJ, with whom Hutchinson LJ and Kennedy LJ agreed). -- 34 of 65 -- [2023] SASCA 30 The Court 31 … In my judgment there is nothing unlawful in a solicitor acting for a party to litigation to agree to forgo all or part of his fee if he loses, provided that he does not seek to recover more than his ordinary profit costs and disbursements if he wins. I would accordingly overrule British Waterways Board v. Norman … 119 The appellant’s submission must be rejected. Although the law as to maintenance is probably still evolving in the United Kingdom,111 the views of Millett LJ in Thai Trading Co were later rejected, and rejected firmly, by the Court of Appeal in Awwad v Geraghty.112 It cannot be said that, based on Thai Trading Co, British Waterways has been overruled in the United Kingdom. 120 For his part, the respondent contended that British Waterways was authority for the proposition that a contingency costs agreement in a criminal matter is contrary to public policy in Australia. That submission was accepted by the Master.113 One difficulty with that submission is that British Waterways is an English case. As has been seen, the approach taken in Australia since Clyne in 1960 is very different to the approach taken in England. 121 In 1993, and at least by 2000 when Awwad v Geraghty was decided, all contingency costs agreements were regarded as contrary to public policy in England. It is arguable that the decision in British Waterways did not depend, or at least did not depend wholly, on the fact that it concerned a criminal prosecution. The cases relied on in that decision were, it appears, all civil cases and most of them were referred to by May LJ in Awwad v Geraghty.114 122 It is therefore difficult to conclude, with respect to the Master, that British Waterways is authority for the proposition that a contingency costs agreement in a criminal matter is contrary to public policy in Australia.115 Having said that, the parties were unable to identify any authority in Australia where it has been held that it is lawful to enter into a contingency costs agreement in a criminal matter. Whilst the availability of legal aid, coupled with the scope to seek a stay of criminal proceedings where legal aid is not available,116 may help to explain the dearth of 111 See Kellar v Williams [2004] UKPC 30, [21] (Lord Carswell): “The content of public policy can change over the years, and it may now be time to reconsider the accepted prohibition in the light of modern practising conditions. They would point only to the views expressed by Millett LJ giving the judgment of the Court of Appeal in Thai Trading Co v Taylor [1998] QB 781 and by May LJ in Awwad v Geraghty & Co [2001] QB 570 at 600” regarding “conditional fee agreements”; Mark James, “The End of Champerty” (2011) 161 New Law Journal 547; but compare Morris v Southwark London Borough Council (Law Society intervening) [2011] 2 All ER 240, [40] (Neuberger LJ, with whom Gross LJ agreed): “In my judgment, when it comes to agreements involving those who conduct litigation or provide advocacy services, the common law of champerty remains substantially as it was described and discussed in Wallersteiner v Moir (No 2) and Awwad v Geraghty & Co (a firm)”. 112 As well as in Morris v Southwark London Borough Council (Law Society intervening) [2011] 2 All ER 240, [39] (Neuberger LJ, with whom Gross LJ agreed). 113 Hegarty v Keogh [2020] SASC 237, [126]-[128] (Judge Bochner). 114 Awwad v Geraghty & Co (a firm) [2000] 1 All ER 608, 635; [2000] 3 WLR 1041, 1068 (May LJ, with whom Lord Bingham of Cornhill CJ agreed). 115 Cf Hegarty v Keogh [2020] SASC 237, [126] (Judge Bochner). 116 Dietrich v The Queen (1992) 177 CLR 292. -- 35 of 65 -- [2023] SASCA 30 The Court 32 authority, it remains the position that there is no authority addressing whether or to what extent there is a difference in public policy attitudes to contingency costs agreements in civil as distinct from criminal matters. 123 This review of the common law concerning maintenance demonstrates: 1. Maintenance, at least in the form of contingency costs or conditional costs agreements involving a speculative or “no win – no fee” retainer, is not unlawful and contrary to public policy in Australia, provided the two requirements recognised in Clyne’s case have been satisfied. As this case does not involve champerty, that raises an issue about whether the appellant “has considered the case and believes that his client has a reasonable cause of action or defence”.117 2. It would appear that a contingency costs agreement has not been recognised as permissible in a criminal matter in Australia. Although this case ostensibly concerns a contingency costs agreement in a criminal matter, it is not ultimately necessary to express any concluded view on whether that kind of retainer is contrary to public policy. In this case it is sufficient to recognise that a retainer of that kind was precluded by the Act and Conduct Rules in force in December 2004. 124 It is of course significant that there is no evidence before the Court to suggest that in December 2004 the appellant turned his mind to the question whether, let alone formed any opinion that, his client the respondent had any viable defence to the charge of murder, still less a reasonable cause of action for compensation. That is perhaps unsurprising as the evidence suggests that, apart from some conversations with Mr Borick and Dr Moles, the appellant’s first substantive involvement in the respondent’s litigation was the meeting in prison in December 2004. 125 It will also be necessary to return to this issue. The Legal Practitioners Act and the Conduct Rules and maintenance 126 As mentioned, the operation of the Act and the Conduct Rules in force at the time of the retainer in 2004 must be considered in the context of the common law applicable to contingency costs or conditional costs agreements which comprise speculative or “no win – no fee” retainers. The appellant does not challenge the Master’s construction or application of the Act and Conduct Rules. In particular, it may be recalled that the appellant does not challenge the following findings made by the Master: 117 Clyne v NSW Bar Association (1960) 104 CLR 186, 203. See also Hegarty v Keogh [2020] SASC 237, [90] (Judge Bochner). Although there was an application to lead further evidence from the appellant about whether he believed the respondent’s case had merit, that application was not pressed and there is no material from the appellant on the topic. -- 36 of 65 -- [2023] SASCA 30 The Court 33 1. The appellant had no reasonable prospect of enforcing the alleged retainer under the terms of the Act.118 2. There were a number of subsidiary findings made which supported her Honour’s ultimate conclusion which are not now challenged. For example, it was not challenged that there was no reasonable prospect of establishing that there was an agreement in writing as was required by s 46(6)(c) of the Act, that the retainer in this case concerned a criminal matter and that it was “difficult to conclude” that a practitioner (including the appellant) would conclude that the respondent’s case had “some prospect of success”.119 3. A claim in unjust enrichment based on quantum meruit may be defeated on public policy grounds.120 127 While the appellant’s claim in quantum meruit is necessitated by the prohibition against and the unenforceability of the contingency costs agreement under the Act, at the least because it is not in writing, these facts also raise the question whether the policy underpinning the Act and Conduct Rules is so fundamental that it bars restitutionary relief.121 128 This question is additional to those which arise at common law regarding the absence of any bases to contend that the appellant gave the respondent any advice about these matters and, further, did not turn his mind to whether the respondent’s case had merit. 129 Accordingly, the question which must next be addressed is whether the Act and Conduct Rules evinced an express or implied intention to oust common law restitution.122 The question of construction raised on this appeal is whether the public policy underpinning the Act and the Conduct Rules prohibited recovery based on quantum meruit where there was a non-complying contingency costs agreement in a criminal matter. That question will be addressed in the next section of these reasons: before coming to that it is necessary to address the proper construction of the Act and Conduct Rules concerning maintenance in the form of contingency costs agreements. 130 At the time the appellant’s retainer was entered into, s 42 of the Act allowed a legal practitioner to enter into a contingency costs agreement with a client. As has been seen, though expressed in permissive terms, the cases approached the 118 Hegarty v Keogh [2020] SASC 237, [101] (Judge Bochner). 119 Hegarty v Keogh [2020] SASC 237, [90] (Judge Bochner). Although there was an application to lead further evidence from the appellant about whether he believed the respondent’s case had merit, that application was not pressed and there is no material from the appellant on the topic. 120 Hegarty v Keogh [2020] SASC 237, [128] (Judge Bochner). 121 Hurst v Vestcorp Ltd (1988) 12 NSWLR 394, 445-446 (McHugh JA). See also, for example, Sevastopoulos v Spanos [1991] 2 VR 194 (Beach J); Farrow Mortgage Services Pty Ltd (in liq) v Edgar (1993) 114 ALR 1, 12-13 (Lockhart, Gummow and Lee JJ); and Amadio Pty Ltd v Henderson (1998) 81 FCR 149, 194 (Northrop, Ryan and Merkel JJ). 122 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, 262 (Deane J); Farrow Mortgage Services Pty Ltd (in liq) v Edgar (1993) 114 ALR 1, 12 (Lockhart, Gummow and Lee JJ). -- 37 of 65 -- [2023] SASCA 30 The Court 34 proper construction of s 42(6) on the basis that it had to be complied with if the solicitor and the client were to enter into a retainer which included any one of the types of costs agreements specified in that provision. It is helpful to again set out s 42(6) as then in force: 42—Costs … (6) A legal practitioner may make an agreement in writing with a client for— (a) payment of a specified amount by way of legal costs (which may—but need not—consist of a daily, hourly or other time-related rate for professional work carried out by the legal practitioner on the client's behalf); or (b) payment of legal costs in accordance with a specified scale; or (c) subject to any limitations imposed by the Society's professional conduct rules or the regulations—payment of a contingency fee to be calculated on a basis set out in the agreement on fulfilment of a condition stated in the agreement. 131 Whilst agreements outside the scope of s 42(6) of the Act were permissible, and likely regulated by the Supreme Court under its inherent powers,123 the cases approached the construction of s 42(6) on the basis that the use of the word “may” was imperative and a solicitor could not enter into or enforce a retainer or costs agreement of the kind specified in s 42(6)(a) (a specified amount or based, for example, on time charging) or s 42(6)(b) (a specified scale) or s 42(6)(c) (subject to limitations in the Conduct Rules, based on a contingency) unless it was in writing. 132 That represents an important difference with the present form of the Act, which explicitly mandates compliance and renders any non-compliant costs agreement void.124 Schedule 3 to the current Act sets out the mandatory requirements for “conditional costs agreements” – described in these reasons as contingency costs agreements or speculative, “no win – no fee” agreements – including that the agreement “must set out the circumstances that constitute the successful outcome” and “must be in writing”.125 The failure to comply renders a costs agreement void pursuant to cl 29 and, subject to certain express prohibitions on recovery, costs may then only be recovered on the limited bases set out in cl 21(b) or (c). These sub-clauses mirror ss 93(b) and (c) of the Legal Practice Act 1996 (Vic).126 123 McNamara v Kasmeridis (2007) 97 SASR 129, [7] (Doyle CJ), citing Athanasiou v Ward Keller (6) Pty Ltd (1988) 8 NTLR 23, 30. 124 See Legal Practitioners Act 1981 (SA), sch 3 which commenced on 1 July 2014. See the Legal Practitioners (Miscellaneous) Amendment Act 2013 (SA). 125 Legal Practitioners Act 1981 (SA), Sch 3 cl 25. 126 Which was considered in Equuscorp Pty Ltd v Wilmoth Field Warne (A Firm) (2007) 18 VR 250, [139]. -- 38 of 65 -- [2023] SASCA 30 The Court 35 133 There is no South Australian equivalent to s 102(3) of the Legal Practice Act 1996 (Vic) insofar as it provides that no costs at all may be recoverable under an agreement (being a contingency costs agreement) where the practitioner seeking to benefit from the agreement did not “have a reasonable belief that a successful outcome was likely”.127 134 Both the Victorian legislation and the present form of the Act prohibit the recovery of any fees under an arrangement which is champertous in nature.128 135 Under s 42(6)(c) of the Act and Conduct Rules in force at the time of the appellant’s retainer in December 2004, a “complying contingency costs agreement” with a client was authorised and could be entered into and enforced where it satisfied the following requirements; namely, it: 1. was in writing; 2. set out the basis upon which the fee was to be calculated; 3. stated what condition needed to be fulfilled before the fee was rendered payable; and 4. otherwise complied with the Law Society of South Australia’s professional conduct rules or regulations – the Conduct Rules. These requirements under r 42.2 (set out below) included that the agreement be a “complying contingency costs agreement”, which: 4.1 related to a litigious matter other than a criminal or matrimonial matter; 4.2 provided for what will be charged in the event of the action being unsuccessful; 4.3 related to a matter where the practitioner’s professional judgment is that the claim has “some prospect of success”; 4.4 specifically recorded that the client had been informed by the solicitor of the right to obtain independent legal advice and of the rights of review under s 42(7) of the Act and s 77A of the Legal Practitioners Act; 4.5 was written in plain English, clearly setting out the terms of the agreement and is signed by the client; 4.6 contained a cooling-off period of five clear business days. 127 See Legal Practice Act 1996 (Vic), s 102(3) which prohibits recovery of fees where there has been a contravention of s 97(5). 128 Legal Practitioners Act 1981 (SA) Sch 3, cl 29(5) (in force as at 1 July 2020) and Legal Practice Act 1996 (Vic) s 102(3) which prohibits recovery of fees where there has been a contravention of s 98(3). -- 39 of 65 -- [2023] SASCA 30 The Court 36 136 As may be expected from the findings of the Master about the absence of writing, the absence of advice from the appellant and the absence of proved fairness, none of these requirements was satisfied by the appellant. 137 The Conduct Rules in force at the time of entry into the appellant’s retainer proscribed champertous contingency fee agreements, being agreements where the fee was calculated by reference to a percentage of any amount recovered by the client, in any form:129 42. Contingency Fees 42.1 A practitioner or firm of practitioners must not enter into a costs agreement under which the amount payable, or any part of the amount payable, to the practitioner or firm of practitioners is calculated by reference to a percentage of any judgment, settlement or monetary sum to be recovered by the client. 138 It will be recalled that these provisions operated in addition to the common law prohibition on champertous costs agreements addressed by the High Court in Clyne.130 Given the terms of s 42(6) and r 42, it is not difficult to impute an intention to prohibit recovery of “the amount payable” pursuant to a champertous agreement in these circumstances. They make it clear that a practitioner “must not enter” into a costs agreement where the legal costs payable are calculated as a percentage of any “judgment, settlement or monetary sum to be recovered”. 139 This case, however, is not concerned with a champertous costs agreement. Whether the public policy underlying s 42 and r 42.1 prohibits the recovery of reasonable fees based on quantum meruit for a champertous costs agreement need not be determined. 140 Relevantly, r 42.2 contemplated maintenance in the form of the contingency costs agreement allegedly agreed between the parties in this case, a speculative or “no win - no fee” retainer. Rule 42.2 of the Conduct Rules addressed contingency costs agreements, particularly “complying contingency costs agreements” as part of a provision which addressed costs agreements, generally: 42.2 A practitioner or firm of practitioners shall not charge fees which are unfair or unreasonable or enter into a costs agreement the terms of which are unfair or unreasonable. In considering whether the fees or the terms of a cost agreement are unfair or unreasonable regard shall be had to:- (a) the nature of the matter; (b) the amount at stake in the matter; (c) the jurisdiction involved; 129 Rules of Professional Conduct and Practice 2003 (SA), r 42.1. 130 Whether a form of litigation funding by a legal practitioner might have been permitted under the Act and Conduct Rules, notwithstanding Clyne, based on the ruling in Campbells Cash & Carry v Fostif does not arise. -- 40 of 65 -- [2023] SASCA 30 The Court 37 (d) the urgency of the matter; (e) the ability of the client to understand and appreciate the terms of the agreement; (f) the knowledge, experience and position of the client; (g) whether the client has received independent advice about the fees or the agreement; (h) whether the practitioner or firm has explained to the client any difference between the costs provided for by the agreement and the costs provided for by any relevant scale and the effect thereof on what can be recovered on a costs order; (i) whether the costs agreement is a complying contingency costs agreement as defined below. A complying contingency costs agreement which provides for a solicitor/client fee which constitutes up to double the fees to which the firm or practitioner would otherwise be entitled if those fees were charged according to the scale contained in the current applicable schedule to the rules of the Supreme Court will be regarded as prima facie fair and reasonable; (j) the experience, reputation and ability of the lawyer or lawyers performing the services; (k) any other relevant matter. A complying contingency costs agreement is one:- (a) which relates to a litigious matter other than a criminal or matrimonial matter; (b) which is entered into either at the commencement of the practitioner's retainer from the client or after initial investigation of the matter; (c) which provides that in the event of the action being unsuccessful the practitioner either:- (i) will not charge the client, or (ii) will charge the client only disbursements or some defined amount or proportion of disbursements; (d) which relates to a matter where in the professional judgment of the practitioner the client's claim has some prospect of success but where the risk of the claim failing and of the client having to meet his or her own costs is significant; (e) where the practitioner has before the signing of the agreement informed the client of the client's right to obtain independent legal advice and of the right to have the agreement reviewed by the Supreme Court pursuant to section 42(7) of the Legal Practitioners Act and of the right to have the fees charged reviewed by the Conduct Board under section 77A of the Legal Practitioners Act the agreement specifically records this; (f) which:- -- 41 of 65 -- [2023] SASCA 30 The Court 38 (i) is in writing and in plain English and sets out clearly the terms of the agreement and is signed by the client; (ii) contains the provision that the client shall have a cooling off period of five clear business days from the signing of the contract during which he or she may, by giving notice in writing to the practitioner, terminate the contingency fee agreement. (Emphasis added) 141 In essence, the Conduct Rules prohibited a practitioner from charging fees which are unfair or unreasonable or from entering into a costs agreement with terms that are unfair or unreasonable.131 Rule 42.2 provided a non-exhaustive list of the factors to be considered in determining whether an agreement was in these respects unfair or unreasonable. These included the circumstances of entry into the agreement, as well as its terms. 142 One of the factors to be considered was whether the agreement is a “complying contingency costs agreement” as defined by the rule.132 Importantly, the definition of a “complying contingency costs agreement” was one which related “to a litigious matter other than a criminal or matrimonial matter”, was contingent on the success or otherwise of the action and, in the exercise of the practitioner’s professional judgment, had “some prospect of success”. 143 The appellant submitted that there was no explicit prohibition on a contingency costs agreement that did not conform to the pattern of a “complying contingency costs agreement” in a criminal matter. Though the appellant rightly contended that compliance with each of the factors set out in r 42.2 was not explicitly required, it was also submitted that a non-complying contingency costs agreement was permitted so long as it was not unfair and unreasonable.133 144 That submission should be rejected. 145 Whilst a non-complying contingency costs agreement was not in terms prohibited by r 42.2, it is difficult to regard the need for a complying contingency costs agreement as merely optional or aspirational. The better reading of r 42.2 is that whether a contingency costs agreement was permitted must be adjudged according to whether it was a complying agreement, having regard to both s 42(6)(c) and r 42.2(i), as well as the other factors mentioned in the rule. 146 By contrast, in the case of all costs agreements, including a complying contingency costs agreement, the factors identified in r 42.2(a) to (h), (j) and (k) must be taken into account when determining the circumstances of entry, and 131 Rules of Professional Conduct and Practice 2003 (SA), r 42.2. 132 Rules of Professional Conduct and Practice 2003 (SA), r 42.2(i). 133 Unless it is champertous in the sense earlier explained: r 42.1 of the Rules of Professional Conduct and Practice 2003 (SA). -- 42 of 65 -- [2023] SASCA 30 The Court 39 whether or to what extent the fees charged, or the terms of the agreement, were unfair and unreasonable. 147 Accordingly, when the Act and the Conduct Rules are viewed as a whole, both r 42.1 (champertous agreements) and r 42.2(i) (complying contingency costs agreements) represented “limitations imposed” on the capacity of a solicitor and client to enter into contingency costs agreements within the meaning of s 42(6) of the Act. Accordingly, where a contingency costs agreement was a complying contingency costs agreement, it may be entered into with a client. 148 However, a complying contingency costs agreement might nonetheless be regarded as unfair and unreasonable having regard to the other factors mentioned in the rule. For example, that may have been the proper conclusion depending on the circumstances of its entry, the fees charged or its terms more generally, including the various factors otherwise referred to in r 42.2, where relevant. 149 By contrast, where a contingency costs agreement was not complying it was on that account alone to be regarded as unfair and unreasonable. The corollary was that a solicitor and client could not enter into a non-complying contingency costs agreement. 150 This last proposition may be readily demonstrated. On the appellant’s approach, a solicitor could enter into a non-complying contingency costs agreement provided it was not unfair and unreasonable. On this approach a solicitor was not prevented from entering into an agreement which permitted the recovery say, of up to triple the scale fees to which the firm or practitioner would otherwise have been entitled. The only constraint was whether that proposed recovery could be said to be unfair or unreasonable in the circumstances. 151 That is an unattractive construction of the rule, and the legislative scheme of which it forms a part, for a number of reasons. 152 First, the very use of the term “complying contingency costs agreement” suggests that it identified that which was permissible and compliant with the Act and the Conduct Rules. The term revealed that which could lawfully and ethically be agreed. Secondly, there was a clear need for transparency and certainty in the operation of the rule. It is unlikely in the extreme that the Act and Conduct Rules were intended to permit solicitors to enter into non-complying contingency costs agreements, subject only to whether clients later had the insight and wherewithal to challenge the agreement under s 42(7) of the Act. On the contrary, as with the need for writing, the better view is that these aspects of the Act and the Conduct Rules were intended to set out what it was that the solicitor and client were permitted to agree and enforce. 153 Finally, there was obvious scope for unfairness and uncertainty if the requirement that a solicitor be constrained to enter into a complying contingency costs agreement could be deflected by arguments about whether what was agreed -- 43 of 65 -- [2023] SASCA 30 The Court 40 was or was not unfair and unreasonable. To permit entry into non-complying contingency costs agreements courted the risk that an unfair and unreasonable agreement could be entered into and that a client was required to comply with it unless, for example, the client later applied to have it rescinded or varied under s 42(7) of the Act. 154 Accordingly, the appellant’s submission on the operation of the Act and Conduct Rules must be rejected. The Act and Conduct Rules in force at the time of the alleged retainer in 2004 prevented a solicitor and client from making an agreement for contingency costs which was not in writing and which was non-complying, for example, where it concerned a criminal matter, where the solicitor had not considered the merits of the client’s litigation, and had failed to advise about independent legal advice or give the client the benefit of a cooling- off period. Did the Act and Conduct Rules bar restitutionary relief? 155 The appellant submitted that, nonetheless, the fact that a conditional costs agreement in a criminal matter was not in writing was neither illegal nor a disabling factor in being able to make a claim based on unjust enrichment. He submitted that the protective function of the Act and Conduct Rules was not thwarted where there was no written agreement, or the contingency costs agreement did not comply with each of the factors set out in the Conduct Rules. The appellant relied on the approach of McHugh J in Nelson v Nelson:134 Accordingly, in my opinion, even if a case does not come within one of the four exceptions to the Holman dictum to which I have referred, courts should not refuse to enforce legal or equitable rights simply because they arose out of or were associated with an unlawful purpose unless: (a) the statute discloses an intention that those rights should be unenforceable in all circumstances; or (b)(i) the sanction of refusing to enforce those rights is not disproportionate to the seriousness of the unlawful conduct; (ii) the imposition of the sanction is necessary, having regard to the terms of the statute, to protect its objects or policies; and (iii) the statute does not disclose an intention that the sanctions and remedies contained in the statute are to be the only legal consequences of a breach of the statute or the frustration of its policies.135 The adoption of these principles accords with the approach of this Court in the leading case of Yango136… 156 The appellant submitted that the “sanction imposed should be proportionate to the seriousness of the illegality involved”137 and:138 … The seriousness of the illegality must be judged by reference to the statute whose terms or policy is contravened. It cannot be assessed in a vacuum. The statute must always be the 134 Nelson v Nelson (1995) 184 CLR 538, 613 (McHugh J) having earlier cited Lord Mansfield’s famous dictum in Holman v Johnson (1775) Cowp 341, 343 [98 ER 1120, 1121]: “No Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act”. 135 Elements (ii) and (iii) may often overlap. 136 (1978) 139 CLR 410. 137 Nelson v Nelson (1995) 184 CLR 538, 612 (McHugh J). 138 Nelson v Nelson (1995) 184 CLR 538, 613 (McHugh J). -- 44 of 65 -- [2023] SASCA 30 The Court 41 reference point for determining the seriousness of the illegality; otherwise the courts would embark on an assessment of moral turpitude independently of and potentially in conflict with the assessment made by the legislature. Second, the imposition of the civil sanction must further the purpose of the statute and must not impose a further sanction for the unlawful conduct if Parliament has indicated that the sanctions imposed by the statute are sufficient to deal with conduct that breaches or evades the operation of the statute and its policies. In most cases, the statute will provide some guidance, express or inferred, as to the policy of the legislature in respect of a transaction that contravenes the statute or its purpose. It is this policy that must guide the courts in determining, consistent with their duty not to condone or encourage breaches of the statute, what the consequences of the illegality will be. Thus, the statute may disclose an intention, explicitly or implicitly, that a transaction contrary to its terms or its policy should be unenforceable. 157 The respondent submitted that nowhere in the Act or the Conduct Rules is there even a hint that Parliament intended to sanction contingency costs agreements in criminal matters. He emphasised the availability of legal aid in criminal law matters, and contrasted this with the civil jurisdiction, where he submitted there are cogent reasons why innocent, indigent victims of tortious acts should be able to seek funding to enable them to pursue civil compensation for wrongs done to them.139 Thus, the respondent submitted there was no policy reason why defendants in criminal cases required contingency costs agreements. 158 Further, the respondent submitted that the dangers involved in the conferral of a personal financial interest upon criminal defence practitioners demonstrated why contingency costs agreements in criminal matters should be regarded as illegal and contrary to public policy. The imperative to secure an acquittal created an unacceptable risk of interference with a witness or evidence, the concoction of instructions behind the cloak of legal professional privilege and the potential for the coaching of defences. 159 As has been recognised, public policy must be guided by the indications of Parliament: “It is difficult to think of a better guide to where to draw the line in a highly sensitive area such as this than that indicated by Parliament”.140 The public policy underpinning the Act and Conduct Rules was informed by the common law context and, at the time of the alleged retainer in 2004, it was intended that the recovery of legal fees and disbursements would be regulated in a clear, transparent manner and in writing. These requirements ensured that clients had both a permanent record of their dealings with the solicitor and an opportunity to obtain independent legal advice about what was proposed, as well as a right to cool-off. 160 So as to ensure that these objectives and requirements were achieved, the burden of compliance was placed on the solicitor, as it had been at common law and as might have been assumed from the fact that specific requirements were set out in Conduct Rules regulating the professional conduct of solicitors. 139 Dietrich v The Queen (1992) 177 CLR 292. 140 XX v Whittington Hospital NHS Trust [2021] AC 275, 324 [63] (Lord Carnwath). -- 45 of 65 -- [2023] SASCA 30 The Court 42 161 The operation of the Act and Conduct Rules earlier outlined demonstrates the public policy that non-complying contingency costs agreements could not be entered into or enforced, including where they related to criminal or matrimonial matters, or where (for example) the solicitor had not considered whether the client’s litigation had any merit and no opportunity was given for independent legal advice or cooling-off. 162 These requirements of the Act and Conduct Rules were not imposed in a vacuum. They were imposed in circumstances where the common law already imposed the various constraints already mentioned on agreements for the recovery of legal fees and disbursements, including that they be shown to be fair and reasonable and that the solicitor had given the client advice about the proposed retainer,141 as well as consider whether the client’s litigation had merit.142 163 These considerations demonstrate why the appellant could not enter into or enforce his retainer and why he could not, for example, recover costs calculated on the basis of the time charging set out in the draft retainer. There is no suggestion that his claim for costs and disbursements was based on the scale of fees set out in the Schedules to the then Supreme Court Rules. The consequence is that the basis upon which the respondent advanced his claim for costs and disbursements (including the disbursements claim for the fees of Mr Borick) must be rejected as misconceived. 164 However these considerations – that the retainer could not be entered into or enforced by the solicitor and could not be based on time charging or a contingency - do not necessarily demonstrate that the appellant is otherwise precluded from making a claim by way of quantum meruit for reasonable fees and disbursements. 165 To conclude that s 42(6) of the Act precluded entry into and enforcement of an unwritten contingency costs agreement in a criminal matter, and that the client need not resort to s 42(7) of the Act to have the Supreme Court “rescind or vary an agreement under subsection (6) if it considers that any term of the agreement is not fair and reasonable”, is relevant to but does not determine whether the policy evident in the Act and Conduct Rules required that the solicitor be denied any recovery at all. The assessment of that aspect of public policy must be undertaken in circumstances where it has been recognised that public policy is both “variable and … not ossified for all time”.143 166 The combination of s 42(6) of the Act and the Conduct Rules, however, strongly suggests that the policy of the Act was that practitioners were not to benefit from contingency costs agreements unless they were both in writing and otherwise compliant with the requirements of the Act and the Conduct Rules. That 141 McNamara v Kasmeridis (2007) 97 SASR 129, [19] (Doyle CJ, with whom Gray and David JJ agreed). 142 Clyne v New South Wales Bar Association (1960) 104 CLR 186, 203. 143 XX v Whittington [2021] AC 275, [64] (McCombe LJ). -- 46 of 65 -- [2023] SASCA 30 The Court 43 follows from the conclusion that non-complying contingency costs agreements could neither be entered into nor enforced by a solicitor. 167 To some extent the submissions of the parties on this issue drew support from the quantum meruit cases insofar as they addressed the scope for making a claim despite constraints contained in any applicable legislation. 168 It will later be necessary to consider a similar issue when addressing whether it is relevantly unjust to deny restitutionary relief for the purposes of making a claim, whereas this present issue is concerned with whether there is a potential defence to a claim by way of quantum meruit. 169 For present purposes, unlike cases such as Pavey & Matthews v Paul,144 where the statute rendered the oral building contract unenforceable, this case could be said to be closer to Sevastopoulos v Spanos,145 although in that case the legislation explicitly prohibited the recovery of the cost of any building work performed under an unwritten, unsigned variation. Later, in Equuscorp the High Court explained the approach required when determining whether a restitutionary remedy can be recovered under a contract which is unenforceable for illegality:146 The outcome of a restitutionary claim for benefits received under a contract which is unenforceable for illegality, will depend upon whether it would be unjust for the recipient of a benefit under the contract to retain that benefit. There is no one-size-fits-all answer to the question of recoverability. As with the question of recoverability under a contract affected by illegality the outcome of the claim will depend upon the scope and purpose of the relevant statute. The central policy consideration at stake, as this Court said in Miller, is the coherence of the law. In that context it will be relevant that the statutory purpose is protective of a class of persons from whom the claimant seeks recovery. Also relevant will be the position of the claimant and whether it is an innocent party or involved in the illegality. Much judicial and academic ink has been spilt on this topic, which exercised the minds of Roman jurists in the days of the Republic. It elicited the cri de coeur of Lord Chief Justice Wilmot in 1767, “no polluted hand shall touch the pure fountains of justice”, and the more temperate offering of Lord Mansfield, who wrote of a plaintiff's need to “draw [his] remedy from pure fountains”. The importance of policy in determining the effect of illegality upon a restitutionary claim was central to Lord Mansfield's observation in Holman v Johnson: It is not for [the defendant's] sake, however, that the objection is ever allowed; but it is founded in general principles of policy, which the defendant has the advantage of, contrary to the real justice, as between him and the plaintiff, by accident, if I may so say. (Citations omitted) 144 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 (Pavey & Matthews v Paul). 145 Sevastopoulos v Spanos [1991] 2 VR 194 (Beach J). 146 Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498 (Equuscorp), [34]-[36] (French CJ, Crennan and Kiefel JJ); [105]-[111] (Gummow and Bell JJ). -- 47 of 65 -- [2023] SASCA 30 The Court 44 170 Equuscorp was a case where the High Court, by a majority, ruled out restitutionary relief where recovery was sought under loan agreements which were an integral part of an unlawful scheme to induce investors to take up prescribed interests, without the benefit of the protections required by the relevant Code. The majority concluded that the loans furthered the illegal purpose. The Court dismissed the appeal, ruling that recovery should not be permitted from those whose protection was the object of the statutory scheme.147 171 Chief Justice French, Crennan and Kiefel JJ emphasised the goal of avoiding “self-stultification in the law” which could be described positively as “maintaining coherence in the law”.148 172 Whilst the Act and the Conduct Rules did not explicitly preclude the recovery of reasonable legal costs on a restitutionary basis, they went further than merely rendering the non-complying contingency costs agreement unenforceable,149 for they prohibited entry into it. That might be thought a step closer to cases such as Mayfair v Dreyer, where certain money lending was prohibited by legislation.150 In Pavey & Matthews v Paul, Mason and Wilson JJ had explained that there was no “compelling analogy” between the legislation which prohibited money lending in Mayfair v Dreyer and the legislation in the case before them which rendered oral building contracts unenforceable.151 It should also be noted that Justice Deane emphasised that the legislation requiring that building contracts be in writing did not render an oral building contract “illegal or void”.152 173 In support of the proposition that the policy of the Act and Conduct Rules required that the appellant solicitor be denied the recovery of reasonable fees on a restitutionary basis, it may accordingly be said that to do otherwise and allow the recovery of reasonable fees would fundamentally undermine the policy evident in the Act and the Conduct Rules which was to preclude both entry into and enforcement of any non-complying contingency costs agreements. 174 In support of that proposition, one might point to the following considerations: 147 Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498, [45] (French CJ, Crennan and Kiefel JJ), 148 Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498, [37]-[38] (French CJ, Crennan and Kiefel JJ), citing Peter Birks, “Recovering Value Transferred Under an Illegal Contract” (2000) 1 Theoretical Inquiries in Law 155, 203. 149 As was the position in the prescribed interest cases of Hurst v Vestcorp Ltd (1988) 12 NSWLR 394, 445-446 (McHugh J); Australian Breeders Co-operative Society Ltd v Jones (1997) 150 ALR 488, 541 (Wilcox and Lindgren JJ); Amadio Pty Ltd v Henderson (1998) 81 FCR 149, 193-194 (Northrop, Ryan and Merkel JJ). 150 Mayfair Trading Company Pty Ltd v Dreyer (1958) 101 CLR 428, 460 (Taylor J) where “no contract for the repayment by a borrower of money lent… shall be enforceable unless a note or memorandum in writing of the contract is signed personally by the borrower” and “no money lender shall in respect of any loan or transaction …, lend or agree to lend to any person any moneys at a rate of interest exceeding [the] maximum rate”. 151 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, 229 (Mason and Wilson JJ). 152 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, 262 (Deane J). -- 48 of 65 -- [2023] SASCA 30 The Court 45 1. The failure to comply with terms of the Act and the Conduct Rules will typically be the fault of the solicitor, not the client. Both at common law and under the Act and the Conduct Rules, the various obligations and requirements imposed were intended to protect the client, and the onus of proving compliance rested with the solicitor. 2. Even if the solicitor were denied time charging, and confined to the recovery of reasonable fees, for example based on the Supreme Court costs scale, that could be said to reward the solicitor notwithstanding the failure to conform to professional standards of legal practice which often have adverse consequences for the client, and where the point of the Act and the Conduct Rules was to avoid these very difficulties. For example, one point of these obligations and requirements was to avoid difficulties associated with determining the circumstances of entry into a retainer, as well as its terms. In many cases those kinds of difficulties will require that the parties consider what happened and what was agreed many years previously. 3. The explicit prohibition against contingency costs agreements in criminal and matrimonial matters, backed by the requirements of s 42(6)(c) of the Act and the Conduct Rules, represents a powerful indication of the prevailing attitude to “no win – no fee” contingency costs agreements in those kinds of cases. 4. Accordingly, and consistently with the views of the High Court in Campbells Cash & Carry v Fostif, to take the view that a solicitor should be denied any costs recovery at all in these circumstances could be said to be confined to public policy questions which are not “beyond those that would be relevant when considering the enforceability of the agreement for maintenance … as between the parties to the agreement”.153 175 Of course, the particular facts and circumstances of this case, even on the appellant’s evidence, illustrate why adherence to the terms of the Act and the Conduct Rules, and the policy underlying them, is so important. Though not relevant to the determination of this appeal, and it is not necessary to express a concluded view, one may observe: 1. As this case demonstrates, because the retainer was not in writing there remains scope for dispute about the terms of the retainer, whether it was agreed, and whether the requisite contingency has been satisfied, in circumstances where the point of the Act and the Conduct Rules was to avoid these very difficulties. 2. The failure to provide a written retainer in which the contingency arrangements were clearly set out, coupled with the failure to give any advice to the client about the retainer, or to consider whether the client’s litigation had any merit, and furnish him with a cooling-off period, represent a failure 153 Campbells Cash & Carry v Fostif (2006) 226 CLR 386, [84] (Gummow, Hayne and Crennan JJ). -- 49 of 65 -- [2023] SASCA 30 The Court 46 by the appellant to conform to the minimum requirements of the Act and the Conduct Rules. 3. That is reinforced by recognition that the appellant solicitor also failed to adhere to the requirements of the common law as laid down in cases such as In Re Stuart and Clyne by failing to give advice about the costs retainer and by failing to consider whether the client’s litigation had merit. 4. These failings were in the circumstances of this case apparently serious: by December 2004 the respondent client had been in gaol for nearly a decade and was indigent. He was vulnerable and likely desperate for legal assistance. It was therefore particularly important that the retainer be approached with skill and care, but this did not appear to have been done. 5. Taken in combination, these failings might be thought to amount to a stark failure by the appellant solicitor to adhere to basic professional obligations concerning a costs retainer which were not remedied and subsisted over a number of years until 2012. 176 Whilst there is merit in the view that the policy of the Act and the Conduct Rules in force at the time of the alleged retainer in 2004 suggests that any recovery for reasonable fees must in these circumstances be denied, whether because recognition of a restitutionary claim is impliedly excluded or because it would be unjust to make an order for restitution,154 it is ultimately not necessary to come to a final view. 177 As will be seen, whether recovery should be permitted on the basis of a quantum meruit is not concerned with upholding the retainer between the appellant and the respondent but with whether it would otherwise be unjust to prevent any recovery at all. In the circumstances of this case, as will be seen, the appellant cannot demonstrate that it is unjust to deny him restitutionary relief. 178 For the purposes of the analysis that follows, and bearing in mind that this Court is reviewing whether there was a reasonable basis for the appellant’s claim for the purposes of summary disposition, it must be assumed that the respondent agreed that the appellant would perform legal work for the respondent pursuant to the contingency costs arrangement alleged, even though that remains a matter of considerable dispute between these parties. Consideration of the quantum meruit claim Elements of a claim in quantum meruit 179 In Pavey & Matthews v Paul, the High Court addressed the common law remedy of quantum meruit. In that case, the issue was whether the appellant could bring a claim in quantum meruit where the building contract was not in writing and legislation provided that a contract which was not in writing could not be 154 See point 4 in the analysis of unjust enrichment, below. -- 50 of 65 -- [2023] SASCA 30 The Court 47 enforced. By a majority, the High Court held that an action to recover reasonable remuneration for work done under an unenforceable building contract could be brought in quantum meruit. Mason and Wilson JJ explained that:155 …the true foundation of the right to recover on a quantum meruit does not depend on the existence of an implied contract. Once the true basis of the action on a quantum meruit is established, namely execution of work for which the unenforceable contract provided, and its acceptance by the defendant, it is difficult to regard the action as one by which the plaintiff seeks to enforce the oral contract… 180 Agreeing with Mason and Wilson JJ, in separate reasons, Deane J said that:156 Indeed, if there was a valid and enforceable agreement governing the claimant’s right to compensation, there would be neither occasion nor legal justification for the law to superimpose or impute an obligation or promise to pay a reasonable remuneration. The quasi-contractual obligation to pay fair and just compensation for a benefit which has been accepted will only arise in a case where there is no applicable genuine agreement or where such an agreement is frustrated, avoided or unenforceable. In such a case, it is the very fact that there is no genuine agreement or that the genuine agreement is frustrated, avoided or unenforceable that provides the occasion for (and part of the circumstances giving rise to) the imposition by the law of the obligation to make restitution. 181 Justice Deane held that an action on a quantum meruit rests not on an implied contract, but on a claim for restitution or unjust enrichment arising out of the respondent’s acceptance of the benefits accruing to the respondent from the appellant’s performance of the unenforceable oral contract.157 182 In Mann v Paterson Nettle, Gordon and Edelman JJ, after observing the semantic difficulties arising from the term “quantum meruit” identified three kinds of cases in which a claim in quantum meruit may arise:158 … To plead a claim [in quantum meruit] today merely by reference to that language of the form of action tells a lawyer very little, and a layperson nothing at all, as to (i) whether the cause of action is one to enforce the contract, seeking payment of a reasonable price implied into the contract, (ii) whether it is an asserted claim for a restitutionary remedy for breach of contract, or (iii) whether it is a remedy arising by operation of law in that category of actions concerned with restitution in the category of unjust enrichment. (Citations omitted) 183 The appellant’s claim is concerned with the final category. In order to determine whether the claimant has a right of recovery in quantum meruit on the basis of the respondent’s unjust enrichment, the Court must be satisfied that the following three elements have been established: 155 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, 227 (Mason and Wilson JJ). 156 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, 256 (Deane J). 157 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, 227 (Mason and Wilson JJ), 257, 263 (Deane J). 158 Mann v Parerson Construction Pty Ltd (2019) 267 CLR 560 (Mann v Paterson Constructions), [150] (Nettle, Gordon and Edelman JJ). -- 51 of 65 -- [2023] SASCA 30 The Court 48 1. A benefit was received or retained by the respondent; 2. The benefit was obtained at the claimant’s expense; and 3. There is an element of recognised injustice that demonstrates that it would be unjust for the respondent to fail to make restitution. 184 The resolution of this case turns on whether the appellant can demonstrate the third element, namely, that it would be unjust for the respondent to fail to make restitution to the appellant. 185 A claim in quantum meruit arises independently of a contract, where the respondent has failed to provide reasonable compensation for a benefit or enrichment that the respondent has “actually or constructively accepted”.159 Therefore the success of a claim in quantum meruit rests not only on proof that the agreed work was done, but also on the respondent’s acceptance of that work without providing remuneration or consideration for it.160 186 The unenforceable contract may nevertheless be relied on, including as evidence demonstrating whether what was done was done gratuitously.161 As Mason and Wilson JJ explained in Pavey & Matthews v Paul:162 … True it is that proof of the oral contract may be an indispensable element in the plaintiff’s success but that is in order to show that (a) the benefits were not intended as a gift, and (b) that the defendant has not rendered the promised exchange value: Fuller and Perdue, loc. cit., p. 387 n. 125. The purpose of proving the contract is not to enforce it but to make out another cause of action having a different foundation in law. 187 The obligation to make restitution does not arise where the goods or services were provided “officiously” or volunteered.163 In addition, and as will be seen, the contract may also be relevant because it indicates the risk allocation made by the parties which is relevant when determining whether recognition of the suggested restitutionary remedy is relevantly inconsistent with the bargain they struck. 159 Deane J emphasised that the benefit or enrichment provided by the plaintiff must have been “actually or constructively accepted” by the defendant. Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, 257, 263 (Deane J) – cited with apparent approval more recently in Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560, [202] (Nettle, Gordon and Edelmann JJ). 160 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, 228 (Mason and Wilson JJ). 161 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, 257 (Deane J). The contract price may, in other cases, also demonstrate the maximum recovery that may be made, Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560, [91] (Gageler J). 162 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, 228 (Mason and Wilson JJ). 163 Brenner v First Artists’ Management Pty Ltd [1993] 2 VR 221, 257 (Bryne J) citing Goff and Jones, Law of Restitution (1986, 3rd ed), 42ff and Peter Birks, An Introduction to the Law of Restitution (1985), 100ff. -- 52 of 65 -- [2023] SASCA 30 The Court 49 The concept of unjust enrichment in the context of quantum meruit 188 In Australia, claims for recovery by way of quantum meruit are not based upon any implied promise but upon the concept of unjust enrichment.164 The common law recognises that the obligation in a respondent to pay a reasonable sum for an accepted benefit, as on a quantum meruit, is based on the principle that it would otherwise be unjust for the respondent to accept the benefit obtained from the claimant.165 189 In Pavey & Matthews v Paul, Deane J explained that unjust enrichment is not an independent cause of action but a “unifying legal concept”:166 … the concept of unjust enrichment in the law of this country… constitutes a unifying legal concept which explains why the law recognizes, in a variety of distinct categories of case, an obligation on the part of the defendant to make fair and just restitution for a benefit derived at the expense of a plaintiff and which assists in the determination, by the ordinary processes of legal reasoning, of the question whether the law should, in justice, recognize such an obligation in a new or developing category of case… 190 In Equuscorp Pty Ltd v Haxton, the High Court summarised the “part played by unjust enrichment” in determining a claim for money had and received, emphasising the “taxonomical function” of unjust enrichment:167 1. Recovery depends upon the enrichment of the respondent by reason of one or more recognised classes of “qualifying or vitiating” factors; 2. The category of case must involve a qualifying or vitiating factor such as mistake, duress, illegality or a failure of consideration, by reason of which the enrichment of the respondent is treated by the law as unjust; 3. When identified in this way, unjust enrichment gives rise to a prima facie obligation in a respondent to make restitution; 164 Farrow Mortgage Services Pty Ltd (in liq) v Edgar (1993) 114 ALR 1, 12 (Lockhart, Gummow and Lee JJ). 165 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; Hurst v Vestcorp Ltd (1988) 12 NSWLR 394, 445 (McHugh JA); Brenner v First Artists’ Management Pty Ltd [1993] 2 VR 221, 257, 260 (Bryne J); cf Angelopoulos v Sabatino (1995) 65 SASR 1. See also LexisNexis, Halsbury’s Laws of Australia [370-235]. 166 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, 256-257 (Deane J), cited with approval in David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353, 378-379 (Mason CJ, Deane, Toohey, Gaurdon, McHugh JJ); Lumbers v W Cook Builders Pty Ltd (in liq) (2008) 232 CLR 635, 664 (Gummow, Hayne, Crennan and Kiefel JJ); Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498, [29] (French CJ, Crennan and Kiefel JJ); Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560, [130] (Gageler J), Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560, [74] (Gageler J), [199] (Nettle, Gordon and Edelmann JJ). 167 Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498, [30] (French CJ, Crennan and Kiefel JJ) citing David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353. Cited in Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560, [6] French CJ, [138] (Gageler J). See also Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560, [213] (Nettle, Gordon and Edelmann JJ). -- 53 of 65 -- [2023] SASCA 30 The Court 50 4. This prima facie obligation can be displaced by circumstances which the law recognises would make an order for restitution in favour of the claimant unjust. 191 In what follows, the question of what is “unjust” is primarily directed to whether the appellant has a claim (point 2 above) rather than whether the respondent has a defence (point 4 above). That latter consideration was addressed earlier when looking at the terms of the Act and the Conduct Rules and the policy underlying them for the purposes of determining whether recognition of a restitutionary remedy was impliedly excluded or was unjust. It is not necessary to repeat that analysis when addressing whether the requirements for making a claim by way of quantum meruit have been (or can be) made out in this case. 192 The determination of what is “unjust” for the purposes of determining whether a respondent has been unjustly enriched does not involve the exercise of any judicial discretion.168 Rather, it depends on the proved existence of a recognised qualifying or vitiating factor such as mistake, duress or illegality. As the majority of the High Court stated in David Securities Pty Ltd v Commonwealth Bank of Australia “…it is not legitimate to determine whether an enrichment is unjust by reference to some subjective evaluation of what is fair or unconscionable”.169 193 Notwithstanding that the Court in Equuscorp was considering a claim for money had and received, it is the concept of unjust enrichment that assists in explaining why a claimant is entitled to restitutionary relief in a claim for quantum meruit. It may be seen that certain “qualifying or vitiating factors” are more readily associated with particular kinds of restitutionary claims. For example, mistake is more likely to arise in a claim for money had and received than in a claim by way of quantum meruit. By contrast, cases involving a failure of consideration or illegality are often associated with claims based on quantum meruit. 194 The claimant bears the onus of proving the existence of a recognised qualifying or vitiating factor.170 The respondent is not required to demonstrate the “justice” of the receipt or retention of a benefit. The claimant bringing the claim must first show that the facts of the claim fall within an established category of unjust enrichment:171 It is wrong to treat the defendant as having a general onus to establish the justice of the receipt or retention of the benefit. The error lies in inconsistency with the idea that there are recognised cases in which a prima facie obligation to make the restitution arises. The 168 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, 256 (Deane J); David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353, 379 (Mason CJ, Deane, Toohey, Gaudron and McHugh JJ). 169 David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353, 379 (Mason CJ, Deane, Toohey, Gaudron and McHugh JJ). 170 Alexiadis v Zirpiadis (2013) 302 ALR 148, [30] (Kourakis CJ). 171 K Mason, J W Carter and G J Tolhurst, Restitution Law in Australia (LexisNexis Australia, 2nd ed, 2008), [2204]. -- 54 of 65 -- [2023] SASCA 30 The Court 51 idea of a prima facie case asserts that the injustice element of unjust enrichment is a matter which must be proved, not assumed, by bringing the facts within one of the established categories such as mistake. 195 It is now necessary to address the facts of the present litigation against the principles drawn from the authorities concerning quantum meruit. Determination: quantum meruit 196 The appellant’s claim to recover a reasonable sum for work done in accordance with the prohibited and unenforceable contingency costs retainer fails for reasons apart from whether the criminal contingency fee agreement alleged by the appellant is prohibited by the Act and the Conduct Rules and is thereby contrary to public policy and represents a defence to a claim by way of quantum meruit. 197 The appellant effectively conceded that the only basis on which he can make out his claim is ‘free acceptance’.172 That is, his services were rendered at his expense and for the benefit of the respondent, in circumstances where there was an expectation that the appellant would be remunerated, even though the alleged retainer was not permitted or enforceable by reason of the Act and the Conduct Rules then in force. 198 The requisite inquiry is accordingly whether the respondent, as a reasonable person, should have recognised that the appellant would expect to be paid for his legal services, in circumstances where he did not take a reasonable opportunity to reject taking the benefit of the appellant’s services.173 199 At times during argument the appellant came close to contending that he was entitled to be paid his stipulated legal fees because the terms of his contingency costs agreement were satisfied. Putting the case in that way misapprehends the nature of the claim by way of quantum meruit. That claim proceeds on the basis that the contingency costs agreement was not permitted and is not enforceable. The real question is, assuming that the retainer agreement was entered contrary to the Act and Conduct Rules and cannot be enforced, was it unjust for the respondent to take the benefit of the appellant’s legal services without making restitution? The answer to that question requires that consideration be given to what the appellant claims was agreed as a means of determining whether the failure to make payment of reasonable legal costs (presumably, for these purposes, scale costs) was relevantly unjust. 200 The obvious difficulty with the appellant’s claim is the basis upon which he undertook to represent the respondent. Namely, payment for the appellant’s 172 Lumbers v W Cook Builders Pty Ltd (in liq) (2008) 232 CLR 635, 664 (Gummow, Hayne, Crennan and Kiefel JJ) cf Angelopoulos v Sabatino (1995) 65 SASR 1. 173 Brenner v First Artists’ Management Pty Ltd [1993] 2 VR 221, 260 (Bryne J) approving Gareth Jones, Restitution in Public and Private Law (Sweet & Maxwell, 1991) 108, applied in ABB Power Generator Ltd v Chapple (2001) 25 WAR 158, [20] (Murray J, with whom Templeman J and Einfeld AJ agreed). -- 55 of 65 -- [2023] SASCA 30 The Court 52 services was contingent on the appellant securing the respondent’s release from prison and obtaining the payment of compensation to him. As the appellant said in his affidavit sworn on 2 July 2020: In my discussion with Mr Keogh I stated to him that I knew and accepted that he could not pay me at that time for the work that was to be done. I advised him that I was willing to await the finalisation of the matter and would accept payment out of any compensation made to him. Mr Keogh appeared to accept this and agreed for me to act on his behalf… … I discussed with Mr Keogh what was to be done. Effectively we were to do whatever was needed to be done in order to achieve his release from prison and hopefully a payment of compensation to him. 201 It is noteworthy that the appellant went no further than to suggest that the respondent “appeared to accept” his proposal. 202 However even if one leaves the vague nature of the appellant’s evidence to one side, he acknowledged that his fees would only become payable in the specific circumstances he described. In doing so, the appellant assumed that he would act for the respondent when obtaining the respondent’s release and the payment of compensation. 203 Whether the contingency inherent in the retainer has manifested has an important bearing on whether the denial of a restitutionary remedy can be said to be relevantly unjust. One way of looking at that issue is by considering whether the grant of a restitutionary remedy would be inconsistent with the contractual retainer which it is alleged was agreed: the contractual arrangement is not “an inconvenient distraction”,174 because:175 The doing of work, or payment of money, for and at the request of another, are archetypal cases in which it may be said that a person receives a “benefit” at the “expense” of another which the recipient “accepts” and which it would be unconscionable for the recipient to retain without payment. And as is well apparent from this Court’s decision in Steele v Tardiani, an essential step in considering a claim in quantum meruit (or money paid) is to ask whether and how that claim fits with any particular contract the parties have made. It is essential to consider how the claim fits with contracts the parties have made because, as Lord Goff of Chieveley rightly warned in Pan Ocean Shipping Co Ltd v Creditcorp Ltd, “serious difficulties arise if the law seeks to expand the law of restitution to redistribute risks for which provision has been made under an applicable contract”. In a similar vein, in the Comments upon §29 of the proposed Restatement, (3d), “Restitution and Unjust Enrichment”, the Reporter says: 174 Lumbers v W Cook Builders Pty Ltd (in liq) (2008) 232 CLR 635, 654 [45] (Gleeson CJ); 662 [77] (Gummow, Hayne, Crennan and Kiefel JJ). 175 Lumbers v W Cook Builders Pty Ltd (in liq) (2008) 232 CLR 635, 663 [79] (Gummow, Hayne, Crennan and Kiefel JJ). See also at [127]: “identification of the rights and obligations of the parties, in this as in any matter, requires close attention to the particular facts and circumstances of the case. Necessarily that requires close attention to what contractual or other obligations each owes to the other”. -- 56 of 65 -- [2023] SASCA 30 The Court 53 Even if restitution is the claimant’s only recourse, a claim under this Section will be denied where the imposition of a liability in restitution would overturn an existing allocation of risk or limitation of liability previously established by contract. (Citations omitted) 204 This passage was applied by the Full Court in Winslade v Steri-Flow Filtration, where the claimant sought by way of restitution payment for work done in connection with a Government application where it had been agreed that any payment would be on the basis of a “success fee”. The work was done but the application was rejected. There was no “success”. Neither the agreed fee nor the alternative of a reasonable sum could be claimed for, as Doyle CJ explained:176 The contract was for a payment by Steri-Flow to Winslade in the event that the first application succeeded. The possibility that the application would not succeed was foreseen by the parties. It is not a case in which the agreement has failed, nor has it been frustrated. The case does not fall under the category identified in Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516. That is a case involving “payment for a purpose which has failed as, for example, where a condition has not been fulfilled, or a contemplated state of affairs has disappeared”: Gleeson CJ, Gaudron and Hayne JJ at [16]. I do not accept Mr Manetta’s submission that the contract between Winslade and Steri-Flow has failed. An event that the parties contemplated has occurred, and the contract makes no specific provision for what is to occur in that event. But the concept of a “success fee” used by the parties strongly suggests that a fee was to be payable by Steri-Flow to Winslade only in the event that the application prepared by Winslade was successful as it stood, or successful with minor adjustments of a kind that must have been contemplated by the parties. To my mind, the circumstances strongly suggest that the risk of Winslade not receiving a payment was allocated by the parties because the parties had agreed upon the circumstances in which Winslade was entitled to payment, using language that suggested an entitlement to payment only in one event. 205 This passage emphasises the importance of respecting the contractual allocation of risk made by the parties, as well as the need to recognise their failure to make “specific provision” for any other consequence. 206 The cases show that retainers incorporating contingency costs agreements are “fraught with difficulties if they are not drafted with exquisite clarity”.177 Not only is there a particular need to define what is meant by a “win”, including where there is an appeal, it is necessary to address what is to occur where the retainer has come to an end before the contingency is achieved.178 That was not done in this case. 207 Whilst the cases on contingency costs retainers have generally been decided on the basis that they will be construed in favour of the client, or at least according to “what ordinary people in the position of the parties would have … understood”,179 for present purposes they demonstrate the scope for considerable uncertainty about whether and in what circumstances a solicitor can claim that it 176 Winslade v Steri-Flow Filtration (2012) 113 SASR 69, [34] (Doyle CJ, with whom Vanstone and Peek JJ agreed). 177 Spence v Gerard Malouf & Partners Pty Ltd [2010] NSWSC 764, [110] (Bergin CJ in Eq). 178 Woodgate v Keddie (2007) 242 ALR 234 (FC); Ireland v Trilby [2011] 2 Qd R 320. 179 Baker Johnson v Jorgensen [2002] QDC 205, [17] (McGill DCJ). -- 57 of 65 -- [2023] SASCA 30 The Court 54 is unjust for a client to fail to make restitution when it is unclear whether the contingency has been satisfied. 208 For example, the effect of a number of the appellant’s submissions on appeal was that the use of the terms “release” and “compensation” are capable of a bearing a broad meaning and need not be construed by reference to their ordinary meaning. 209 There are two answers to this suggestion. The first is that these terms must be considered in the context of the events and circumstances surrounding the December 2004 meeting. That is, in the context of an initial meeting between a solicitor and his prospective client where the client was in gaol, indigent and vulnerable. 210 As the appellant’s submissions in this Court acknowledged, at that time the respondent was maintaining his innocence (as he has, consistently) lodging petitions seeking mercy, and the compensation which was apparently discussed was associated with false imprisonment. In that context, release and compensation could only be associated with an acquittal (possible, but unlikely ahead of the 2013 amendments) or a pardon (conditional or otherwise) following the favourable exercise of the Royal prerogative of mercy resulting in compensation by way of damages for false imprisonment (as the appellant submitted in this Court).180 211 In the events that have transpired, the respondent has not been acquitted, nor pardoned, and he has not as a result received compensation in any accepted sense. If something else was intended by the appellant, that needed to be articulated in December 2004 and agreed to by the respondent. 212 This leads to the second answer to the appellant’s approach to the meaning of the words used. Where the solicitor has failed to draft a contingency costs agreement, let alone a complying contingency costs agreement exhibiting the virtue of “exquisite clarity”, that solicitor cannot later complain if the ordinary meaning of the terms is used rather than some form of broader meaning which has, on the evidence, never been explained to the client nor made the subject of independent legal advice. 213 It follows that, in a case where the solicitor has willingly assumed the considerable risk that legal services will be supplied but no payment will be made for them unless the agreed contingency manifests, it may be difficult indeed for that solicitor to claim that it is unjust for a client to fail to make restitution where there remains doubt about whether the relevant contingency has manifested. 180 Catherine Greentree, “Retaining the Royal Prerogative of Mercy in New South Wales” (2019) 42(4) UNSW Law Journal 1328, 1340-1344. -- 58 of 65 -- [2023] SASCA 30 The Court 55 The contingency in this case – three limbs 214 The appellant has at all times accepted that the payment of his costs and disbursements was conditional on the manifestation of the contingency which he maintains was agreed with the respondent in December 2004. 215 To be clear, there are three limbs to the contingency agreement alleged by the appellant. They may be summarised in a broad way, consistently with the nature of the appellant’s evidence. The first is that the respondent was to be released from prison and the second is that he received compensation following release from prison. The third limb is, at least implicitly, that the first two limbs would be achieved under the appellant’s retainer, or where they were at least substantially the product of the legal services provided by the appellant for the benefit of the respondent. 216 On the appellant’s own case he assumed the risk that, if the retainer came to an end before the contingency was achieved, or if the contingency was not achieved, such as where the respondent’s release was not obtained or the payment of compensation was not received, then he would not be remunerated. 217 As the appellant’s counsel conceded in argument on this appeal, the relevant contingency would need to “come good” before the appellant could make any claim by way of quantum meruit. As will be explained, there is no reasonable basis for the claim that any of these limbs was satisfied, with the result that the contingency inherent in the appellant’s retainer did not manifest. Was the contingency satisfied? 218 The appellant submitted that the contingency was satisfied and his entitlement to reasonable remuneration fell due because on 22 December 2014 the respondent was released from prison on bail and in 2018 the State Government made an ex gratia payment to the respondent of $2.6 million. It was submitted that the ex gratia payment fell within the “compensation” contemplated by the alleged retainer for it “plainly” included any “compensation for any wrongful imprisonment after I, the appellant, have sprung you”. 219 As has been explained, when one has regard to the context in which the retainer is alleged to have been agreed in December 2004, it is difficult to see how the respondent’s mere release short of an acquittal or a pardon resulting in compensation could have been in contemplation. 220 Given the circumstances in which the alleged bargain was struck, and acknowledging the way in which the matter was put in this Court, the respondent’s mere release (for example on bail) could not have been what was contemplated as a precondition to the payment of legal fees and disbursements. If fees and disbursements were to be paid they had to be funded and so release must have been contemplated in the context, for these purposes, that it was the precursor to the payment of compensation. The respondent was not, and has never been, acquitted -- 59 of 65 -- [2023] SASCA 30 The Court 56 or pardoned of murder, nor has he in consequence received compensation in respect of his prosecution, conviction or imprisonment. If any broader meaning was to be given to the concepts of release and compensation that needed to be clearly stipulated and, as has been explained, that was not done. In any event, in 2012 the appellant’s retainer was terminated, some time after Mr Borick’s retainer was terminated in 2010, and well before the 2014 appeal and the 2018 payment. To adapt counsel for the appellant’s submission, the respondent was not “sprung” by the appellant and the appellant did not secure the payment of any compensation. The release from prison 221 In order to explain these conclusions, it is first convenient to address the limb concerning the respondent’s release from prison. In 2014, the Court of Criminal Appeal set aside the respondent’s conviction and directed that he be retried. In November 2015 the Director of Public Prosecutions subsequently entered a nolle prosequi. 222 Unlike an acquittal or pardon, the entry of a nolle prosequi did not prevent the respondent from being retried for murder. It amounted to no more than a statement that the Director was unwilling to proceed with the re-prosecution of the respondent at that time,181 and cannot be equated to a finding of not guilty, following an acquittal,182 or with a full pardon.183 223 Certainly, the nolle prosequi did not suggest that the respondent’s imprisonment was in any sense wrongful, still less contrary to law, sufficient to support any claim for compensation. The payment of compensation 224 Next, it is convenient to address the limb concerning the payment of compensation. The appellant made no attempt to demonstrate that the respondent had any viable cause of action for damages or other compensation, such as a claim for damages in tort for malicious prosecution, wrongful conviction or for false imprisonment. No payment of compensation for false imprisonment could have been made without a finding or admission that the appellant’s imprisonment was wrongful. It follows that, despite the outcome in the Court of Criminal Appeal in 2014, there has been no finding nor admission that the respondent’s conviction, prosecution or imprisonment was relevantly wrongful or that the State Government (or anyone else) was liable to compensate the respondent. Indeed, the views of the Court of Criminal Appeal in favour of a retrial (set out at the outset of these reasons) might be thought incompatible with the existence of a legal liability to compensate the respondent. 181 R v Chryssomallos (2019) 134 SASR 568, [28] (Parker J, with whom Kelly P and David AJA agreed), citing Question of Law Reserved on Acquittal (No 3 of 1995) (1996) 66 SASR 450, 458 (Debelle J). 182 Davis v Gell (1924) 35 CLR 275, 287 (Isaacs ACJ, with whom Gavan Duffy J agreed). 183 Although even if pardoned on the basis that the prisoner is deemed innocent, the conviction is not expunged: Kelleher v Parole Board of New South Wales (1984) 156 CLR 364, 371 (Wilson J); Eastman v Director of Public Prosecutions (ACT) (2003) 214 CLR 318, 350-351 (Heydon J). -- 60 of 65 -- [2023] SASCA 30 The Court 57 225 The respondent did not receive any “compensation” from anyone. He received an ex gratia payment from the State Government. The evidence shows that this was made on the basis of an express denial by the State of any liability for any entitlement of the respondent to compensation. The respondent’s payment was not made ex debito justitiae but ‘out of grace’. That is the sine qua non of an ex gratia payment, which avoids any implication that there has been any admission of liability upon which an entitlement to the payment of compensation might be based. Did the appellant secure the respondent’s release and payment? 226 Notwithstanding the foregoing, let it be assumed for the purposes of the summary judgment application that there is a reasonable basis for the first two limbs. The critical difficulty remains that even if the nolle prosequi and the ex gratia payment could be regarded as a release from prison coupled with the payment of a form of compensation for the purposes of the retainer, so that the first two limbs of the contingency are therefore satisfied, it was not the appellant who secured the respondent’s release and payment. It cannot be shown that the appellant was acting or that his legal services secured, wholly or at least substantially, what later occurred.184 227 After the termination of the appellant’s retainer, the respondent retained a different legal team. It is not suggested that the appellant performed any of the work required for what followed. 228 It might arguably have been different if the appellant had performed all of the necessary work before the Court of Criminal Appeal and when seeking payment, but the retainer was then terminated before, for example, the outcome was known. By contrast, in this case the only inference open is that the new legal team performed all of the legal work required for the second statutory appeal and the claim that was later made. The successful appeal was lodged in 2013, permission was granted in March 2014, the second appeal was first heard on 22 September 2014 and it was determined on 19 December 2014. Work was then done in connection with the new trial before the Director entered a nolle prosequi in November 2015.185 The ex gratia payment was not secured until 2018. 229 Taking the appellant’s affidavit as the high-water mark of his claim, as the parties agreed, the contingency agreement was dependent on the appellant performing all or at least substantially all of the work required to satisfy the contingency. That is apparent from the brief, pleaded terms of the alleged retainer, 184 Perhaps some broad analogy might be drawn with when a liquidator’s remuneration is secured by the general law charge upon any fund raised by the work done by a liquidator. That is, it arises only where the liquidator’s work generates the fund, In re Universal Distributing Co Ltd (In Liq) (1933) 48 CLR 171, 174-175 (Dixon J). The same could be said about the solicitor’s particular lien over a client’s monies recovered in litigation, for it only operates over the monies generated by the work of the solicitor, Commissioner of Taxation v Government Insurance Office of New South Wales (1992) 36 FCR 314, 327 (Wilcox J). 185 R v Keogh (No 1) [2015] SASC 179 (Blue J); R v Keogh (No 2) [2015] SASC 180 (Blue J). -- 61 of 65 -- [2023] SASCA 30 The Court 58 namely, that the appellant assumed that he would continue to represent the respondent until satisfaction of the contingency. 230 By failing to address the possibility that the retainer might be discharged before the contingency was satisfied, the appellant assumed the risk that no expectation of payment of legal fees would in those circumstances arise.186 231 The respondent relied on the decision of McClellan J in Smits v Roach, both before the Master and in this Court, although an appeal against that decision was allowed by the Court of Appeal.187 In that case Smits, a law firm, made a claim against a former client, Roach, based on two retainer agreements which had been terminated. Both retainers were in part champertous. The client had wanted to sue another firm, Freehills, for around $970 million over alleged negligence in the late 1980s, early 1990s, in connection with the steps required to exploit substantial peat deposits in Victoria. Under the second retainer the firm stood to gain between 10 and 15 per cent of any recovery, in addition to the costs and disbursements recovered from the defendants.188 The firm investigated litigation funding once it became clear that the matter would not settle and the firm was exposed to considerable financial risk. The relationship between the firm and the client soured,189 and the second retainer was terminated by the firm in 1999. Thereafter there were acrimonious negotiations, and the firm sued the client for its fees:190 There can be little doubt that the timing of the proceedings, including these allegations, would have affected the likelihood of Justice Corporation funding the litigation [against Freehills]. The pleading is fairly described as an ambit claim. Although a catalogue of allegations were pleaded in relation to contract and misrepresentation, the allegations of fraud were not separately particularised. Smits Leslie sought damages, equitable compensation as well as aggravated and exemplary damages. 232 Ultimately the retainer was found by McLellan J to be champertous and illegal, relying on the ruling made by Atkin LJ (as he was) in Wild v Simpson to the effect that public policy was concerned not only with the relationship between the solicitor and the client but also with the wrong occasioned to the other party to the litigation:191 The view of the learned Chief Justice seems to me, with all respect, contrary to principle, and if the case is an authority for the proposition that a person employed on an express 186 Smits v Roach (2004) 60 NSWLR 711, 750-751 (Sheller JA, with whom Ipp and Bryson JJA agreed). 187 Smits v Roach (2002) 55 NSWLR 166, [221]-[266] (McLellan J); Smits v Roach (2004) 60 NSWLR 711 (Sheller JA, with whom Ipp and Bryson JJA agreed). 188 Smits v Roach (2004) 60 NSWLR 711, [1]-[4] (Sheller JA, with whom Ipp and Bryson JJA agreed). 189 The relevant extracts do not appear in the NSW Law Reports, see Smits v Roach [2002] NSWSC 241, [97] (McLellan J): “the relationship of solicitor and client was now under significant threat”. See [115]: “Roach had come, in my opinion correctly, to believe that Smits, in his negotiations with Justice Corp [a litigation funder], was acting primarily to secure the position of Smits Leslie which was, in part, in conflict with the best interests of himself, his wife and the companies. It was becoming increasingly unlikely that the parties could continue to cooperate effectively”. 190 Smits v Roach (2002) 55 NSWLR 166, [195] (McLellan J). 191 Wild v Simpson (1919) 2 KB 544. Applied in Smits v Roach (2002) 55 NSWLR 166, [225]-[228] (McLellan J). -- 62 of 65 -- [2023] SASCA 30 The Court 59 contract to do work for a remuneration that is illegal can, where the special contract fails for illegality, recover upon a quantum meruit, I think it is wrong and should be overruled. The result would be to make the law of champerty as between solicitor and client of very little effect. A solicitor would only have to bargain to receive the champertous sum in addition to his ordinary costs. He would never be in a worse position financially for the illegality. He could always recover as much as an innocent solicitor, and would take his chance of also recovering the fruits of the wrongdoing. 233 Justice McLennan reviewed the terms of the Legal Profession Act 1987 (NSW), which permitted a contingency costs agreement allowing an uplift in fees of up to 25 per cent but proscribed any retainer which allowed the solicitor to take an interest in the amount recovered by the client. McLennan J found that the retainer was illegal and void and the champertous clauses were not severable.192 The claim for reasonable remuneration by way of quantum meruit was rejected. McLennan J concluded that, in any event, no claim could be made following termination of the retainer:193 … as the agreement was conditional on a successful outcome in the Freehills litigation, the solicitors accepted that they would only be paid if the retainer was maintained and a verdict recovered. Given that the agreement was itself contingent on a successful outcome, I see no unfairness in it operating so that, in the event that the relationship was no longer effective, the solicitors could withdraw, but could not seek remuneration. 234 In the Court of Appeal, the ruling on severance was overturned. The Court found that the Legal Profession Act 1987 (NSW) recognised that the champertous provisions could be severed and it declined to follow Wild v Simpson.194 On the question of recovery by way of quantum meruit, the Court explained why the nature of the contingency costs agreement precluded recovery by way of restitution:195 … But the agreement legitimately made recovery contingent upon a successful outcome of the matter, as the appellants conceded, on the assumption that the appellants continued to act for their clients until there was an outcome. Furthermore, properly understood, the parties deliberately made no provision for the appellants to be paid anything if, pursuant to cl 14, the solicitors decided to stop acting for their clients before that outcome was achieved. In K Mason and J W Carter, Restitution Law in Australia, (1995) at 477-8 para [1228], in a section dealing with restitution for non-monetary benefits, the learned authors point out that in analysing the right to restitution the contractual allocation of risk must not be forgotten. … … 192 Smits v Roach (2002) 55 NSWLR 166, [231]-[238] (McLellan J). His Honour later also relied on Magic Menu Systems Pty Ltd v AFA Facilitation Pty Ltd (1997) 72 FCR 261 (FC) and the decisions reviewed by Bryson J in Re William Felton & Co Pty Ltd (1998) 145 FLR 211 which sanctioned the professional funding of litigation in return for a share in the proceeds but rejected retainers which permitted solicitors to take a share of the proceeds. 193 Smits v Roach (2002) 55 NSWLR 166, [282] (McLellan J). 194 Smits v Roach (2004) 60 NSWLR 711, [69]-[99] (Sheller JA, with whom Ipp and Bryson JJA agreed). 195 Smits v Roach (2004) 60 NSWLR 711, [82], [84]-[85] (Sheller JA, with whom Ipp and Bryson JJA agreed). -- 63 of 65 -- [2023] SASCA 30 The Court 60 … here, quite clearly, the appellants were prepared to receive remuneration only if there was a successful outcome of the Freehills proceedings and took the risk that for one reason or another the venture would not reach fruition. In my opinion, the appellants are not entitled to recover anything from their clients in contract or on a quantum meruit. The terms of the second retainer agreement properly construed make that plain. 235 Whilst decided before cases such as Lumbers v W Cook Builders Pty Ltd (in liq), referred to earlier, this aspect of the decision was clearly informed by the contractual allocation of risk made in the retainer.196 236 In this case, on the appellant’s own evidence, his retainer for the respondent ended in mid-2012, after the respondent’s fourth unsuccessful petition for mercy. It was not until after the appellant’s retainer was terminated that legislation was introduced in South Australia to enable a second or further appeal against conviction.197 For the entire period of the appellant’s retainer, therefore, the jurisdiction on which the second appeal was founded and the conviction was set aside did not exist. The appellant did not perform the work required on the second appeal nor for the purposes of securing the ex gratia payment. 237 The appellant accepts that his retainer was terminated by the respondent in mid-2012, but contends that it would be unjust to allow the respondent to escape his obligation to remunerate the appellant as the result of his “unilateral” termination. 238 This contention must be rejected. The termination was apparently accepted by the appellant. There is no allegation that termination was in any sense regarded as wrongful. After receiving the respondent’s termination letter, the appellant transferred his complete file to the respondent’s new solicitors. There is no evidence before the Court that the appellant claimed any lien over the file, nor made any claim for the preservation of whatever rights he arguably had, nor sought any commitment from the respondent or his new solicitor that the respondent would account to the appellant if he was released from prison and received compensation. Notably, the appellant did not plead that it was a term of the alleged retainer that the respondent’s obligation to remunerate the appellant would withstand the termination of the retainer (regardless who terminated the retainer) and the satisfaction of the contingency by a different legal team. 239 The expectation said to found the action by way of quantum meruit was not one of payment regardless of outcome, but payment upon the performance by the appellant of the specified contingency. 240 In circumstances where the specified contingency never manifested, or was not performed by the appellant, it cannot be said that a reasonable person standing 196 Lumbers v W Cook Builders Pty Ltd (in liq) (2008) 232 CLR 635, 654 [45] (Gleeson CJ) and 662 [77] (Gummow, Hayne, Crennan and Kiefel JJ); Winslade v Steri-Flow Filtration (2012) 113 SASR 69, [34] (Doyle CJ, with whom Vanstone and Peek JJ agreed). 197 Section 353A of the Criminal Law Consolidation Act 1935 (SA) commenced on 5 May 2013. -- 64 of 65 -- [2023] SASCA 30 The Court 61 in the respondent’s shoes should have realised that the appellant would expect to be paid for his services. Even on the case advanced by the appellant, the appellant has failed to demonstrate that it would be unjust for the respondent to fail to make restitution and that equity should intervene on the basis of a quantum meruit. The factor on which the appellant advances his quantum meruit claim has not been made out. 241 There is no reasonable prospect that the appellant can establish that it would be unjust for the respondent to fail to account to the appellant from the ex gratia payment he received following his release from prison as a consequence of proceedings and a claim commenced and prosecuted by different solicitors and counsel after the appellant accepted the termination of his retainer. 242 It follows that, for these reasons, the Master was correct to find that the appellant had no reasonable basis for his claim on the basis of a cause of action in quantum meruit. The costs of action where quantum meruit is not available 243 Before the hearing of this appeal, the appellant abandoned all bases advanced to support his claim for costs and disbursements, relying only on quantum meruit. 244 The appellant has failed to demonstrate a reasonable basis for the contention that it would be unjust for the respondent not to make restitution. The appellant’s claim in quantum meruit fails in limine. That is so regardless whether the public policy underpinning the Act and Conduct Rules in force at the time of the retainer in December 2004 prohibited the appellant from recovering his fees by way of quantum meruit. 245 Accordingly, the appellant cannot challenge the Master’s order that the appellant pay the respondent’s costs of the action on the usual basis. Assuming it is required, leave to appeal against this finding should be refused. Conclusion 246 For these reasons, the appeal against the Master’s decision will be dismissed and leave to appeal the costs order will be refused. The orders of the Court are: 1. The appeal is dismissed. 2. Leave to appeal against the costs order is refused. 247 Subject to hearing from the parties, the appellant must pay the respondent’s costs of this appeal. -- 65 of 65 --