FEDERAL COURT OF AUSTRALIA FEDERAL COURT - jurisdiction - cross-vesting - costs - whether Federal Court has jurisdiction to order solicitor/client taxation - where matter cross-vested to Federal Court from State Supreme Court - where parties had entered into costs agreement pursuant to s 23 Legal Practitioners Act 1995 (Qld) which prevented order for taxation in State Supreme Court - whether provisions of Legal Practitioners Act 1995 (Qld) applicable in Federal Court proceedings. COSTS - taxation of solicitor/client bills - where costs agreement entered into by parties - whether evidence of mutual abandonment of agreement by parties - whether special circumstances pursuant to s 16 Legal Practitioners Act 1995 (Qld) for ordering taxation of bills. Federal Court of Australia Act 1976 (Cth) s 23 Jurisdiction of Courts (Cross-vesting) Act 1987 (Qld) s 11 Legal Practitioners Act 1995 (Qld) ss 16, 23, and 36 Steedman v Golden Fleece Petroleum Ltd (1987) 14 FCR 464 - cited Keith Hercules & Sons v Steedman (1987) 17 FCR 290 - distinguished Ccom Pty Ltd v Jiejing Pty Ltd (Cooper J, 10 February 1994, unreported) - considered Summers v The Commonwealth (1918) 25 CLR 144 cited DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1977-78) 138 CLR 423 cited Re Lynch & Co's Bill of Costs (Ambrose J, Supreme Court of Queensland, 2 October 1992, unreported) cited IN THE MATTER of an application by darryl paul weedman, elaine margaret weedman and novamaze pty limited and IN THE MATTER of bills of costs of LYNCH & COMPANY to DARRYL PAUL WEEDMAN, ELAINE MARGARET WEEDMAN and NOVAMAZE PTY LIMITED No QG 88 of 1996 SPENDER J BRISBANE 26 MAY 1998 IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY QG 88 of 1996 IN THE MATTER of an application by darryl paul weedman, elaine margaret weedman and novamaze pty limited AND: IN THE MATTER of bills of costs of LYNCH & COMPANY to DARRYL PAUL WEEDMAN, ELAINE MARGARET WEEDMAN and NOVAMAZE PTY LIMITED JUDGE: SPENDER J DATE OF ORDER: 26 MAY 1998 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The relief sought in paragraph 2 of the Originating Summons transferred to the Federal Court by order of de Jersey J in the Supreme Court of Queensland on 17 June 1996 is refused. 2. The applicants pay the respondent's costs of the proceedings QG 88 of 1996, including reserved costs, and the costs reserved to the Federal Court by the order of de Jersey J on 17 June 1996, to be taxed if not agreed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY QG 88 of 1996 IN THE MATTER of an application by darryl paul weedman, elaine margaret weedman and novamaze pty limited AND: IN THE MATTER of bills of costs of LYNCH & COMPANY to DARRYL PAUL WEEDMAN, ELAINE MARGARET WEEDMAN and NOVAMAZE PTY LIMITED JUDGE: SPENDER J DATE: 26 MAY 1998 PLACE: BRISBANE REASONS FOR JUDGMENT This is an application by Mr and Mrs Weedman ('the Weedmans') who are the former clients of a solicitor, Paul Gerard Lynch, who at all relevant times traded as Lynch & Company, to have taxed by the taxing officer of the Federal Court on a solicitor/client basis five bills of costs rendered by Mr Lynch to the Weedmans. The first bill relates to the period 25 March 1994 to 1 July 1994 totalling $4,818.25; the second for services in the period 5 July 1994 to 10 November 1994 totalling $11,248.58; the third from 15 November 1994 to 28 March 1995 totalling $52,230.25; the fourth from 27 March 1995 to 10 April 1996 totalling $34,526.90; and the fifth covering the period 13 May 1996 to 27 May 1996 totalling $6,181.75. The application has had a complicated history. The bills sought to be the subject of taxation by the Federal Court relate to work connected with proceedings in the Federal Court concerning the purchase by Novamaze Pty Ltd, a company of which the Weedmans were shareholders, of a Cut Price Deli franchise. A costs agreement pursuant to s 23 of the Legal Practitioners Act 1955 (Qld) was entered into in respect of those services on 25 May 1994 between the Weedmans and Mr Lynch. The first clause of the agreement was: "The parties seek to intend this agreement to constitute an agreement pursuant to s 3 of the Solicitors' Act 1891". Clause 7 provided for the Weedmans to pay Mr Lynch the amount of each monthly interim memorandum of fees and disbursements within 30 days of the date of delivery of the memorandum. Clause 8 gave Mr Lynch the entitlement to terminate the agreement for good cause on reasonable notice. "Good cause" by clause 10 included the failure to pay by the Weedmans of the amount of any interim memorandum within 30 days of delivery. The agreement conferred on Mr Lynch a general possessory lien over the file. The agreement provided, in clause 14, that time shall in all respects be of the essence of the agreement. The schedule to the agreement referred to proceedings in the Federal Court of Australia with respect to the purchase of a Cut Price Deli franchise and the scale of costs in the Schedule mirrored the Federal Court scale in the Second Schedule of the Federal Court Rules. The claim by Mr Lynch that at the time of execution of the agreement on 25 May 1994 he provided the Weedmans with a copy of the Client Care Memorandum, as prescribed by the Queensland Law Society Incorporated, was not the subject of dispute. There is in evidence a copy of Acknowledgment of Receipt of Client Care Memorandum signed by the Weedmans. The orders that the applicants seek are: "(a) a Taxing Officer of the Court tax the interim bills delivered by the Respondent to the Applicants in action G149 of 1994 for the periods 25 March 1994 to 27 May 1996 on a solicitor and own client basis and certify what sum is payable by either party to the other of them; (b) Rules 11, 12, 16, 17, 20, 22, 36, 38, 41, 42, 43, 44, 45 and 46(6) of O 62 Federal Court Rules apply to such taxation mutatis mutandis as if the taxation of the said bills was a taxation between the parties to the principal proceedings and direct that the Taxing Officer tax the said bills accordingly; (c) liberty to all parties to apply on two clear days notice for further and consequential orders for the payment of any money by any party consequent upon the taxation of the said bills and certification by the Taxing Officer as any party may be entitled to; (d) costs reserved." For the respondent it was submitted that the court had no jurisdiction to entertain the applicants' application and that further, if there was jurisdiction, it ought not to be exercised in the present case, particularly having regard to the existence of the costs agreement, the consequences of the Legal Practitioners Act for services rendered under such an agreement and the history of the dispute concerning costs between the Weedmans and Mr Lynch. That history has a significant bearing in the conclusion I reach as to the disposition of the present application. It appears that the Weedmans requested the Taxing Officer of the Supreme Court to tax two of the bills the subject of the present application. On 7 June 1996, a Taxing Officer of the Supreme Court, Mr R J Houghton, declined jurisdiction to tax those bills, in consequence of the operation of s 15 of the Solicitors Act 1891. It is submitted by the applicants that that decision was erroneous because the Taxing Officer had been knowingly misled by Mr Lynch in two respects. First, the Taxing Officer was not referred to a decision of Ambrose J in which Mr Lynch was the respondent, namely, Re Lynch & Co's Bill of Costs (Ambrose J, Supreme Court of Queensland, 2 October 1992, unreported), nor to Keith Hercules & Sons v Steedman (1987) 17 FCR 290, a decision of the Full Court of the Federal Court. Nor was the Taxing Officer told that the costs agreement had been abandoned by the parties, so it was said by the Weedmans, by at least late 1994. It was thus submitted before me that, in the circumstances, taxation by a taxing officer of the Federal Court is the only practical avenue now available to seek redress in respect of what are said to be manifest errors in the delivered bills. In an affidavit filed 12 March 1997 Mr Lynch accepts that there was some over-charging and some under-charging, and some errors in the bills as delivered. He claims that, after making adjustments, the total amount of money owing by the Weedmans to him consists of a bill of costs for 27 March 1995 to 10 April 1996 - the amount unpaid being $25,677.64, together with the bills of costs of 13 May 1996 for $6,181.75, less an amount for errors in the amount for counsel's fees of $8,700.00 and the amount paid by the Weedmans to an accountant, subsequent to the hearing of the Weedmans' application for delivery up of the file by Mr Lynch to Messrs Nicol Robinson & Kidd, of $4,132.00. There are two amounts owing pursuant to orders of the Taxing Officer of $142.82 and $351.70; a deduction for clerical error miscalculations of $498.00, and the addition for clerical error shortcharges of $441.00, making a total owing by the Weedmans to Mr Lynch of $21,464.91. It is submitted for the Weedmans that there are substantially more matters of complaint which the applicants would wish to argue on taxation. In summary, it is asserted that some $43,800.00 out of the five bills totalling $109,004.73 constitutes unjustifiable or excessive charges. It is also said that the action on behalf of the Weedmans conducted by Mr Lynch was conducted concurrently with two other Cut Price Deli franchisees, and it is said that each of those franchisees appears to have been charged separately for counsel's fees and overcharged in respect of solicitors' fees, where those matters were concurrently heard. It was submitted that it cannot be proper that Mr Lynch should be entitled to charge each client for his and his clerk's time of attending at court all day (as he has done) and that one set of costs for counsel and solicitor ought to have been distributed rateably over the three actions. This complaint, it is said, is a matter which requires extensive investigation by the taxing officer. After the Taxing Officer of the Supreme Court had declined jurisdiction to tax two of the bills as requested by the Weedmans, an originating summons was filed by the applicants in the Supreme Court of Queensland on 29 May 1996 seeking, in part: "1. Lynch & Company forthwith deliver to Nicol Robinson & Kidd, the Solicitors for the Applicants, all of the Applicants' papers and documents held by Lynch & Co including (without limitation) all of the Applicants' papers and documents in relation to Federal Court Action No G149 of 1994; 2. The interim bills of costs for the periods from 25 March 1994 to 28 March 1995 and 13 May 1996 to 27 May 1996 delivered by Lynch & Co to the Applicants in relation to Federal Court Action No G149 of 1994 be referred to taxation in conjunction with the Bill of Costs filed under Supreme Court Misc No 3896 of 1996 and that the whole of the bills of costs be dealt with together;" It is to be noted that the bills of costs referred to in that paragraph relate to the periods 25 March 1994 to 28 March 1995 and 13 May 1996 to 27 May 1996. On 17 June 1996, de Jersey J ordered: "1. The originating summons filed 29 May 1996 be transferred to the Federal Court of Australia at Brisbane for hearing and determination, this order being made under the Cross-vesting Legislation." 2. The costs of the summons to date be reserved to the Federal Court." While it is clear that the Federal Court would have a real interest concerning the existence of a solicitor's lien over a file which may have the effect of inhibiting the trial of a proceeding in the Federal Court, it is difficult to see any compelling reason for the transfer of the claim for taxation of a bill of costs delivered by a solicitor to his clients. The relationship between a solicitor and his or her own client is contractual in nature and is not inherently a federal matter. Moreover, State legislation regulates the nature of the obligations concerning costs between a solicitor and his or her own client, and the circumstances in which those obligations may be enforced, and there are particular provisions, now to be found in the Legal Practitioners Act 1995 (Qld), about costs agreements. The first part of the transferred Originating Summons, which became proceedings QG 88 of 1996, was heard by Drummond J, who ordered on 17 December 1996: "1. Save that, upon presentation of proof to the respondents that Mr Calabro's fees have been paid the respondents deliver up Mr Calabro's report to the applicants' solicitors, paragraph 1 of the application is dismissed. 2. Paragraph 2 of the Application be adjourned sine die with liberty to the parties to apply to bring it back before the Court for hearing. 3. That the costs of and incidental to the hearing on 27 June 1996 be reserved." It is with respect to his Honour's second order that this application is concerned. The first question is one of jurisdiction. It was submitted on behalf of the Weedmans that the existence of a costs agreement under State law relating to work in the Federal Court does not oust the jurisdiction of this court to order a solicitor/client taxation. I agree. It was submitted that the Federal Court has an unfettered power to order taxation, notwithstanding that the existence of the costs agreement would preclude such an order being made in a State court. In my opinion, it is clear that the Federal Court has power to order that a solicitor's bill of costs against that solicitor's client be taxed by the Taxing Officer of the Federal Court. In Steedman v Golden Fleece Petroleum Ltd (1987) 14 FCR 464, Woodward J ordered that a solicitor/client bill of costs be taxed in the Federal Court, together with the solicitor's bill of costs against the third respondent in those proceedings. The taxation of the solicitor/client costs in the Federal Court rather than in the Supreme Court of Victoria was said to be a convenient course permitting both party/party and solicitor/client costs to be dealt with at the same time. On appeal, reported as Keith Hercules & Sons v Steedman (supra), the Full Court of the Federal Court (Sweeney, Lockhart & Sheppard JJ), held that the Federal Court had power to dispose of the matter under s 23 of the Federal Court of Australia Act 1976 (Cth) and it was in the circumstances of that case appropriate to exercise such power. Section 23 of the Federal Court of Australia Act provides: 'The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate." Cooper J made a similar order to that of Woodward J in Steedman, in Ccom Pty Ltd v Jiejing Pty Ltd (10 February 1994, unreported) and followed the judgment of Lockhart J in the Steedman Case in applying the specific rules in O 62 to a solicitor/client taxation in the Federal Court. In Stefanou v Fairfield Chase Pty Ltd (Einfeld J, 10 December 1993, unreported), his Honour said that the Court's jurisdiction and power to order the delivery of a solicitor/client bill in taxable form was undoubted. His Honour noted that if the taxation proceeds under the inherent jurisdiction of a State Supreme Court, then orders of a similar kind should be sought. In the absence of cross-vesting orders from a State Supreme Court, there may be no basis for the Federal Court to deal with the matter under the relevant legal professional legislation. In Keith Hercules & Sons v Steedman, Lockhart J relied on the judgment of Dixon J in Woolf v Snipe (1933) 48 CLR 677, in which the High Court examined the jurisdiction of superior courts of record to tax costs, charges and disbursements claimed by solicitors from their clients. The relevant source of jurisdiction identified by Dixon J appears in the passage in his Honour's judgment at 678: "...a jurisdiction exists founded upon the relation to the court of attorneys and solicitors considered as its officers. This jurisdiction, commonly called the general jurisdiction of the court, enables it to regulate the charges made for work done by attorneys and solicitors of the court in that capacity, and to prevent exorbitant demands. That such a jurisdiction was exercised by the Court of Chancery was never doubted...The courts of law appear to have exercised a like jurisdiction...After the Judicature Act the existence of the court's general jurisdiction was completely established." Lockhart J said at 300: "In my opinion s 23 confers power upon this Court to direct the taxation of a bill of costs as between a solicitor and his client when the costs are incurred in connection with a proceeding in this Court; but it would be in a comparatively rare case that the occasion would arise for the exercise of the power." and at 301 said: "The Supreme Court Act 1986 (Vic) provides for the taxation of bills of costs between solicitors and their clients: see ss 61 to 76. That Act cannot circumscribe the operation of the Federal Court's power over costs incurred in proceedings within its jurisdiction. Once orders for payment of costs by a party to his solicitor have been made following the issue of certificates of taxation by this Court's taxing officer, they are enforceable throughout Australia. There is no collision between such orders and State legislation relating to costs, including the Supreme Court Act 1986. Once orders for costs are made by this Court there is no need for the operation of and no work to be done by the State legislation relating to taxation. However, the existence of the State legislation and the fact that it can, and usually does, govern disputes over costs between solicitors and clients provide powerful reasons for orders of the kind in question here being made, in the exercise of this Court's discretion, only in rare cases of which this case is one." And later at 302: "I said before that it is only in rare cases that orders of the kind which were made here would be made by this Court. Disputes between solicitors and clients over costs are primarily to be resolved by the State and Territorial legislation that has existed for many years and is specifically directed to disputes on costs. It is the special facts of this case which called for the orders in suit to be made." Sheppard J at 303 said: "I have reached the conclusion that the making of an order that the client pay the amount of the costs when ascertained by taxation is within power. This Court, being a superior court of record and having the powers which it has, particularly those conferred by s 23, has power to control the amount which a solicitor appearing before it may charge his client. That control would not be complete unless it included the power to order a client to pay his solicitor what was properly due to him for work done for the client in this Court. Such a power, in my opinion, falls well within the powers conferred by s 23 particularly in the light of the conclusions reached by the Full Court of this Court and the High Court in Jackson v Sterling Industries Ltd (1986) 12 FCR 267; (1987) 162 CLR 612. The power is not one which the Court would exercise very often. Usually the matter would be left to be dealt with in the more conventional way under statutes such as the Supreme Court Act 1986 (Vic). Cooper J noted in Ccom (supra) at p 4: "The decision of the Full Court in Keith Hercules & Sons v Steedman requires, in the proper exercise of a discretion to order taxation of a bill of costs as between solicitor and client in proceedings in this Court, that:- (a) Ordinarily taxation of costs as between solicitor and own client in respect of work performed under a retainer entered into in a State or Territory will be left to be determined under the relevant State or Territory Statute and this Court would decline to make an order for taxation in this Court. (b) Where, there is in addition to the fact that the dispute concerns professional fees charged by a solicitor, other facts which may generally be described as special facts which call for the making of an order, the Court will make such orders as are appropriate. Such cases will be comparatively rare. (c) The power will only be exercised where it is necessary to ensure the convenient, expeditious and fair conduct of legal proceedings, including the amount which a solicitor appearing before the Court may charge his or her client, and to give full force and effect to the orders of this Court." His Honour was of the view that Ccom was not a case of a mere dispute between a solicitor and client as to the liability for or quantum of costs and outlays, where one party to the retainer wished the matter to be taxed in this Court rather than the Supreme Court as a matter of preference. Rather, having regard to the fact that there was likely to be a taxation of costs in the principal proceedings taxed in the Federal Court, it was "highly inconvenient that the costs should be separate, taxed in this Court and in the Supreme Court of Queensland; such a course can only lead to substantial additional costs being incurred by the parties to this notice of motion. The prospect of inconsistency between the two taxations is real." No such considerations as applied in Keith Hercules & Sons v Steedman (supra) or Ccom v Jeijing (supra) apply here. What essentially is asserted for the applicants is that the taxing officer in the Supreme Court wrongly declined to exercise jurisdiction in respect of the two matters the subject of the originating summons in the Supreme Court, and that there are arguable complaints of unjustifiable or excessive charging, so that taxation in the Federal Court is the only practical avenue now available to seek redress in respect of these matters. This case has many points of difference from Keith Hercules & Sons v Steedman (supra). The matter comes before the Federal Court only pursuant to a transfer to this Court by the Supreme Court of Queensland pursuant to the Cross-vesting Legislation. The judgment in Keith Hercules & Sons v Steedman was given on 18 December 1987 prior to the commencement of the Cross-vesting Legislation on 1 July 1988. In Steedman the proceedings came before the Federal Court by way of notice of motion filed in the existing Federal Court proceedings. Here, the original court proceedings was an originating summons filed in the Supreme Court of Queensland. Importantly, in Steedman, it appears that there was no costs agreement between the solicitor and the client. Here there was a costs agreement, although it is argued on behalf of the Weedmans that it had been abandoned by the parties. That issue is a matter considered later. In Steedman, the taxation of the party and party costs would be in the Federal Court. In this case there is no realistic prospect of any party and party costs requiring taxation in the Federal Court in the foreseeable future. In Steedman, the bills of costs had not been paid and bills of costs were delivered only eight months prior to the filing of the notice of motion seeking referral of the bills to taxation; in the present case, all but two of the bills had been paid with two of the bills having been paid more than twelve months prior to the institution of proceedings seeking the referral of the bills to taxation. The present proceedings arise out of the order of the Supreme Court transferring the Weedmans' originating summons filed in the Supreme Court of Queensland pursuant to O 64 of the Rules of the Supreme Court of Queensland. O 64 of the Rules of the Supreme Court of Queensland relevantly provides: "64(1)The following matters may be heard and disposed of in chambers upon originating summons, that is to say:- ... (g) applications for orders for the delivery or taxation of a solicitor's bill of costs, or for the delivering up by a solicitor of deeds, documents, or papers in his or her custody, possession, or power, or otherwise relating to the same; 64(7)(1) When the relationship of solicitor and client exists, or has existed, an originating summons may be issued by the client or the client's representatives for the delivery of a cash account, or the payment of money, or the delivery of securities, by the solicitor; and the Judge may from time to time order the solicitor to deliver to the applicant particulars of the moneys or securities which the solicitor has in his or her custody or control on behalf of the applicant, or to bring into court the whole or any part of the same, within such time as the Judge may order. (2) If the solicitor sets up a claim for costs, the Judge may make such provision for the payment thereof, or for securing the same, or for the protection of the respondent's lien (if any) as the Judge may think fit." Prior to the order of transfer by de Jersey J, the Federal Court possessed no original, accrued, associated, general or implied jurisdiction to hear and determine the originating summons filed in the Supreme Court by the Weedmans. As I have held, the Federal Court did have power, in an exceptional case, to order the taxation by a Taxing Officer of the Federal Court of solicitor/client costs of a party in proceedings before it. Section 11 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Qld) provides as follows: "(1) Where it appears to a court that the court will, or will be likely to, in determining a matter for determination in a proceeding, be exercising jurisdiction conferred by this Act or by a law of the Commonwealth or a State relating to cross-vesting of jurisdiction - (a) subject to paragraphs (b) and (c), the court shall, in determining that matter, apply the law in force in the State or Territory in which the court is sitting (including choice of law rules); and (b) subject to paragraph (c), if that matter is a right of action arising under a written law of another State or Territory, the court shall, in determining that matter, apply the written and unwritten law of that other State or Territory; and (c) the rules of evidence and procedure to be applied in dealing with that matter shall be such as the court considers appropriate in the circumstances, being rules that are applied in a superior court in Australia or in an external Territory. (2) The reference in subsection 1(a) to the State or Territory in which the court is sitting is, in relation to the Federal Court or the Family Court, a reference to the State or Territory in which any matter for determination in the proceeding was first commenced in or transferred to that court." While the Federal Court has power in exceptional cases to order the taxation by a taxing officer of the Federal Court of a solicitor and client bill of costs, in the present proceedings the Federal Court, in determining application QG 88 of 1996 is exercising cross-vesting jurisdiction pursuant to s 5(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Qld). Section 11 of that Act has the effect that the Federal Court must apply the law in force in the State of Queensland in determining those proceedings, and I take that to include the laws of Queensland as to the taxation of solicitor/client costs. In my opinion, the Legal Practitioners Act 1995 (Qld) is part of the Queensland law applicable to the relief sought by the Weedmans in paragraph 2 of the originating summons transferred to this Court by the order of de Jersey J, and the effect of that Act is a relevant consideration on whether this Court should grant the relief sought. It was submitted on behalf of the Weedmans that the costs agreement signed by them and Mr Lynch on 25 May 1994 was abandoned in late 1994. As earlier noted, by cl 14, time was of the essence to its performance. It was submitted on behalf of the Weedmans that neither party to the costs agreement performed his or their obligations in a timely fashion or at all; this circumstance, it was said, evidenced mutual abandonment. Mr Lynch, in an affidavit filed 12 March 1997, said: "64 In late 1994 it became apparent to me that the Applicants could not comply with their obligations under the retainer agreement to pay monthly costs. Mr Weedman agreed with me that he would pay the sum of $500.00 per week in discharge of the unpaid fees outstanding. This arrangement was adhered to by the Applicants until September 1995 when funds were received from the purchaser of the Cut Price Deli Group in consideration of the Applicants agreeing to lift the mareva injunction granted in their favour. 65 I saw little point in providing monthly memoranda of costs to the applicants when they were not in a position to meet them..." In Summers v The Commonwealth (1918) 25 CLR 144, Isaacs J said at 151: "Whatever the terms of a contract may be, it is possible for the parties so to conduct themselves as mutually to abandon or abrogate it. A position not altogether dissimilar arose in the case of De Soysa v De Pless Pol [1912] AC 194. There, neither party had repudiated or refused to perform the contract, nothing in the nature of rescission had occurred, but, said Lord Atkinson for the Privy Council [1912] AC at p 202:- "One party to a contract is not bound to give to the other unlimited time after a day named to do that which the other has contracted to do. There must be some point of time at which delay or neglect amounts to refusal...In truth, the projects seem to have been to a great extent, if not altogether, abandoned by all the parties concerned". In my opinion, that is the legal position here. Informally, but effectively, the parties have so acted in relation to each other as to abandon or abrogate the contract." In DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1977-78) 138 CLR 423, Stephen, Mason and Jacobs JJ said at 434: "...there can be no doubt that by 5th December 1974, when these proceedings were commenced, neither party, whatever may have been their reasons, regarded the contract as being still on foot. Neither party intended that the contract should be further performed. In these circumstances the parties must be regarded as having so conducted themselves as to abandon or abrogate the contract. The position is similar to that with which Isaacs J dealt in Summers v The Commonwealth (1918) 25 CLR 144. The plaintiff did not succeed in his action for damages for breach of contract, but on the other hand the defendant had not rescinded. Time passed during which neither party took any steps to perform the contract. It was held that the parties had so conducted themselves as mutually to abandon or abrogate the contract." In response to the contention on behalf of the Weedmans that their part payment of the unpaid fees to Mr Lynch's firm constituted some mutual abandonment of the costs agreement by both the Weedmans and Mr Lynch, Mr Lynch said: "I have never had any conversation with either Mr or Mrs Weedman in which I have indicated to them in any way that I would not be insisting upon maintaining my full rights under the costs agreement entered into between themselves and my firm. It was as a favour and an indulgence to the Weedmans that I agreed to the suggestion that they pay $500.00 per week in partial discharge of their existing indebtedness to my firm. There was no suggestion by either Mr or Mrs Weedman that the costs agreement did not regulate matters between themselves and my firm or that the temporary indulgence which I had granted them had this effect. ... In granting the Weedmans this temporary indulgence I had no intention of abandoning any of my rights pursuant to the costs agreement entered into between themselves and my firm and indeed, the costs charged to the Weedmans continued to be charged in accordance with the rates prescribed in the costs agreement." I am satisfied that there was no mutual abandonment of the costs agreement in this case. I turn now to consider the implications of the application of the Legal Practitioners Act 1995 (Qld) to the bills of costs presently in issue. In Re Lynch & Co's Bill of Costs (supra), Ambrose J had before him an originating summons which sought relief very similar to the originating summons in the present matter. The terms of the costs agreement in issue in Re Lynch & Co's Bill of Costs (supra) had the same operative provisions as appear in the present costs agreement, including cl 1: "The parties hereto intend this agreement to constitute an agreement pursuant to s 3 of the Solicitors' Act 1891." The work done pursuant to that agreement was work in the Federal Court of Australia. Ambrose J found that both the client and the solicitor contemplated that any question that may arise between them relating to solicitor's and clients' costs would be determined under Queensland legislation; that the solicitor and the clients had agreed that their rights and obligations were to be governed by the Solicitors Act and that the terms of the written agreement in question came within s 3 of the Solicitors Act. His Honour said that the agreement did not appear to be unfair or unreasonable and, after reviewing the judgment of the Full Court of the Federal Court in Steedman, observed that had the Federal Court been approached to direct the bill of costs delivered pursuant to the agreement be taxed, it was highly improbable that the Federal Court would have exercised the powers under s 23 of the Federal Court of Australia Act to order the referral of the bills of costs to taxation. I am satisfied that the costs agreement entered into by the Weedmans with Mr Lynch on 25 May 1994 is a costs agreement within the terms of s 23 of the Legal Practitioners Act 1995 (formerly s 3 of the Solicitors Act 1891). Section 36 of the Legal Practitioners Act (formerly s 15 of the Solicitors Act 1891) provides: "Subject to this division, the bill of a solicitor for the amount due under an agreement made under this part shall not be subject to any taxation nor to the provisions of part 2." It was held in Re Henderson Trout's Bills of Costs [1995] 1 Qd R 160, by the Court of Appeal of the Supreme Court of Queensland that s 15 of the Solicitors Act 1891 (now s 36 of the Legal Practitioners Act) prevented the Court from referring bills of costs rendered pursuant to a costs agreement to taxation. If, as I find, the Federal Court in this particular proceeding is bound to apply the law of the State of Queensland to the determination of the issues in these proceedings, the application seeking taxation should be dismissed, on the basis that there was between the Weedmans and Mr Lynch at all relevant times a costs agreement within what is now s 23 of the Legal Practitioners Act 1995. Under s 16 of the Legal Practitioners Act (formerly s 33 of the Costs Act 1867), no taxation can be ordered in respect of a bill of costs if the application for taxation is brought more than twelve months after payment of the bill: In re Wellborne [1901] 1 Ch 312. The first two bills of which taxation is sought fall within this prohibition. It seems to me that if the Federal Court in these proceedings was not bound to apply the provisions of the Legal Practitioners Act in circumstances where there was at all relevant times a costs agreement within the meaning of that Act, the object of the Cross-vesting Legislation would be frustrated. A solicitor's client could circumvent the application of the Legal Practitioners Act by having a Supreme Court proceeding cross-vested to the Federal Court, or by bringing a notice of motion in existing Federal Court proceedings. Such a result would deserve the description "bizarre and capricious" as used by ST/L Kelly D and Crawford J "Choice of Law under the Cross-vesting Legislation" (1988) 62 ALR 589 at 599. Here the position would be that the applicants, having agreed with their solicitors that their rights with respect to costs will be governed by the Solicitors Act 1891 (now ss 23-40 of the Legal Practitioners Act) would avoid the consequences of s 15 of the Solicitors Act (now s 36 of the Legal Practitioners Act), which excepts bills of costs under a costs agreement from being taxed. Bills that were rendered over two years ago and paid without protest would be subject to taxation, contrary to s 16(2) of the Legal Practitioners Act. The Weedmans, having failed in their bid to have two of the bills taxed by the Taxing Officer of the Supreme Court of Queensland, who ruled that he had no jurisdiction based on the provisions of the Solicitors Act 1891, would now be able to obtain a taxation of those bills from the Federal Court. ST L Kelly and Crawford said at 599: "Within a simple legal system there cannot exist two valid rules leading to conflicting results on the same set of facts. One, the principal of non-contradiction prevents it. One or other of the rules must be invalid or misstated..." [But see the article "Choice of Law in Cross-Vested Jurisdiction", a reply to Kelly and Crawford by Griffith, Rose and Gagler 62 ALR at 705.] If, contrary to my view that the bills of costs were rendered pursuant to a costs agreement and the costs agreement falls within s 23 of the Legal Practitioners Act, it would be open to a court, pursuant to the provisions of ss 4-17 of the Legal Practitioners Act 1995 (Qld) to order that the last three bills be referred to taxation. The first two bills were paid more than twelve calender months prior to the filing of the originating summons on 29 May 1996 and, under the provisions of s 16 of the Legal Practitioners Act, it is not open to the court to refer those bills to taxation. With respect to the last three bills, the exercise by the court of the power to refer the bills to taxation is discretionary, and it depends on the Weedmans satisfying the court that there are "special circumstances" with respect to the costs charged to enliven the discretion. Lopes LJ said of "special circumstances" in Re Norman (1886) 16 QBD 673: "Those are wide, comprehensive and flexible words and I think...that no court can or ought to lay down any exhaustive definition of them. Charges which in one case would be special circumstances in another would not be such. It is for the discretion of the judge to say what are special circumstances in a particular case." It should be noted that the bills of costs were charged according to a scale of costs and not pursuant to any time-costing regime. The structure of each bill cannot be said to be redolent of overcharging. There has been considerable delay in the raising of objections to the items in the bills. Mr Weedman's affidavit of 17 March 1997 is the first detailed objection, despite the fact that Mr Lynch had previously delivered bills of costs in taxable form during the entire course of the retainer. In respect of the last three bills of costs, it seems to me that there is no convincing evidence of gross over-charging. Mr Lynch has in certain respects made concessions concerning arithmetical and other errors contained in the bills. It is also not irrelevant in my view to have regard to the finding by Drummond J, in relation to the first part of the originating summons dealing with the attempt by the Weedmans to lift the solicitor's lien on the file, that the conduct engaged in by the Weedmans and their solicitors concerning the termination of Lynch's retainer, was "a subterfuge to get around the problems created by Mr Lynch's insistence on the lien". If it were necessary to consider whether, in the exercise of discretion, this court should direct the taxation of the last three bills of costs, I would not so order. For the above reasons, the relief sought in paragraph 2 of the originating summons referred to this court by order of de Jersey J is refused. I will hear the parties on costs. I certify that this and the preceding fifteen (15) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender. Associate: Dated: 26 May 1998 Counsel for the Applicant: Mr D Cooper Solicitor for the Applicant: Nicol Robinson & Kidd Counsel for the Respondent: Mr G Robinson Solicitor for the Respondent: Power & Power Date of Hearing: 13 and 20 March 1997 Date of Judgment: 26 May 1998