Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Beau Timothy John Hartnett trading as Hartnett Lawyers v Anthony Robert Bell as Executor of the Estate of the late Mabel Dawn Deakin-Bell [2023] NSWCA 244 Hearing dates: 7-8 March 2023 Date of orders: 12 October 2023 Decision date: 12 October 2023 Before: Bell CJ at [1]; Adamson JA at [165]; Griffiths AJA at [182] Decision: Appeal dismissed with costs Catchwords: COURTS AND JUDGES — Supreme Court — Inherent jurisdiction — where solicitor acting for mortgagee has engaged in exorbitant overcharging — where mortgage provides for recovery by mortgagee of all costs expended pursuant to the mortgage on an indemnity basis — whether Court can order solicitor to pay moneys, to the extent of the exorbitant overcharging, to mortgagor pursuant to inherent jurisdiction to control charges and fees of officers of the Court — general consideration of extent of inherent jurisdiction COSTS — Inherent jurisdiction — where costs have previously been assessed as between mortgagee and mortgagor — whether Court adopted costs assessment in its inherent jurisdiction to require solicitor for mortgagee to pay money representing exorbitant charges to mortgagor OCCUPATIONS — Legal practitioners — Solicitors — Costs agreement — where costs agreement between solicitor and mortgagee — whether inherent jurisdiction extends to requiring solicitor for mortgagee to pay money exorbitantly overcharged to mortgagee to mortgagor Legislation Cited: Civil Procedure Act 2005 (NSW) ss 56-60 Legal Profession Act 2007 (Qld) ss 300, 308, 313, 315, 316, 317, 323, 324, 335 Legal Profession Uniform Law 2014 (NSW) s 264 Legal Profession Uniform Law Application Act 2014 (NSW) Sch 2 cl 6.1 Supreme Court Act 1970 (NSW) s 23 Uniform Civil Procedure Rules 2005 (NSW) r 42.25 Cases Cited: Adams v Bank of New South Wales [1984] 1 NSWLR 285 Atanaskovic & Ors v Birketu Pty Ltd – Supervisory Jurisdiction [2020] NSWSC 573 Atanaskovic Hartnell v Birketu Pty Ltd (2021) 105 NSWLR 542; [2021] NSWCA 201 Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256; [2006] HCA 27 Bell v Hartnett [2022] NSWCA 42 Bell v Hartnett Lawyers [2021] NSWSC 202 Bell v Hartnett Lawyers (No 2) [2021] NSWSC 1270 Berger v Council of the Law Society of New South Wales [2019] NSWCA 119 Blatch v Archer (1774) 1 Cowp 63 British Railways Board v Herrington [1972] AC 877 Clare v Joseph [1907] 2 KB 369 Commonwealth Bank of Australia v Pascoe and Scott as trustees of the estate of Usha Wati Charan [2018] NSWSC 1332 Commonwealth Trading Bank of Australia v Inglis (1974) 131 CLR 311; [1974] HCA 17 Coroneo v Australian Provincial Assurance Association Ltd (1935) 35 SR (NSW) 391 Council of New South Wales Bar Association v Siggins [2021] NSWCA 40 Council of the Queensland Law Society Inc v Roche [2004] 2 Qd R 574; [2003] QCA 469 CSR Limited v Cigna Insurance Australia Ltd (1997) 189 CLR 345; [1997] HCA 33 Cullen v Welsbach Light Co of Australasia Ltd (1907) 4 CLR 990; [1907] HCA 3 Deakin-Bell v NSW Trustee and Guardian [2016] NSWSC 540 Doyle v The Commonwealth (1985) 156 CLR 510; [1985] HCA 46 Dupal v The Law Society of New South Wales [1990] NSWCA 56 Dwyer v National Companies & Securities Commission (1988) 15 NSWLR 285 Elder's Trustee & Executor Co Ltd v Eagle Star Nominees Ltd (1986) 4 BPR 9205 Electrical Trades Union v Tarlo [1964] 1 Ch 720 Ellor v Selfridge and Co (1930) 46 TLR 236 Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498; [2012] HCA 7 Ex parte Farren; Re Austin (1960) 77 WN (NSW) 743 Gomba Holdings (UK) Ltd v Minories Finance Ltd (No. 2) [1993] Ch 171 Hamilton v Oades (1989) 166 CLR 486; [1989] HCA 21 Hamod v State of New South Wales [2011] NSWCA 375 Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 Harrison v Tew [1990] 2 AC 523; [1990] 1 All ER 321 House v The King (1936) 55 CLR 499; [1936] HCA 40 Insurance Commissioner v Joyce (1948) 77 CLR 39; [1948] HCA 17 John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd; Walker Corporation Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19 Kelly v Willmott Forests Ltd (in liquidation) (No 4) [2016] FCA 323; (2016) 335 ALR 439 Kowalski v Cole [2017] SASCFC 23 Kyabram Property Investments Pty Ltd v Murray [2005] NSWCA 87 Landsal Pty Ltd (in liq) v REI Building Society (1993) 41 FCR 421; [1993] FCA 171 Malouf v Constantinou [2017] NSWSC 923 McGuirk v University of New South Wales [2010] NSWCA 104 Micarone v Perpetual Trustees Australia Ltd (No 2) [1999] SASC 533 Moore & Anor v Assignment Courier Ltd [1977] 2 All ER 842 Myers v Elman [1940] AC 282 New South Wales Bar Association v Cummins (2001) 52 NSWLR 279; [2001] NSWCA 284 News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410; [1996] FCA 870 NHB Enterprises Pty Ltd v Corry (No 5) [2020] NSWSC 1838 Pegang Mining Company Limited v Choong Sam [1969] 2 MLJ 52 Pryles & Defteros (a firm) v Green [1999] 20 WAR 541; [1999] WASC 34 R v Carroll (2002) 213 CLR 635; [2002] HCA 55 Rajah Kishendatt Ram v Rajah Mumtaz Ali Khan (1879) LR 6 Ind App 145 Re Felicity; FM v Secretary, Department of Family and Community Services (No 4) [2015] NSWCA 19 Re Jabe; Kennedy v Schwarcz [2021] VSC 106 Re Veron; Ex parte Law Society of New South Wales [1966] 1 NSWR 511 Reid v Howard (1995) 184 CLR 1; [1995] HCA 40 Scroope v Legal Services Commissioner [2013] NSWCA 178 State of Victoria v Sutton (1998) 195 CLR 291; [1998] HCA 56 Storer & Co v Johnson (1890) 15 App Cas 203 Taylor v Attorney-General [1975] 2 NZLR 675 The Siskina [1979] AC 210 Tringali v Stewardson Stubbs & Collett Ltd (1966) 66 SR (NSW) 335; [1966] 1 NSWR 354 Weld-Blundell v Synott [1940] 2 KB 107 Whyked Pty Limited v Yahoo!7 Pty Limited [2008] NSWSC 477 Woolf v Snipe (1933) 48 CLR 677; [1933] HCA 5 Texts Cited: GE Dal Pont, Law of Costs (5th ed, 2021, LexisNexis) IH Jacob, "The Inherent Jurisdiction of the Court" (1970) 23 Current Legal Problems 23 Keith Mason, "The Inherent Jurisdiction of the Court" (1983) 57(8) Australian Law Journal 449 Category: Principal judgment Parties: Proceedings 2022/299298: Mr Beau Timothy John Hartnett trading as Hartnett Lawyers (Appellant) Mr Anthony Robert Bell as executor of the Estate of the late Mabel Dawn Deakin-Bell (Respondent) Proceedings 2022/299327: Mr Beau Timothy John Hartnett trading as Hartnett Lawyers (Appellant) Ms Gwendoline Rosemary Deakin-Bell (First Respondent) Mr Anthony Robert Bell as executor of the Estate of the late Mabel Dawn Deakin-Bell (Second Respondent) Representation: Counsel: Proceedings 2022/299298 V Whittaker SC with I King (Appellant) S Sykes (Respondent) Proceedings 2022/299327 V Whittaker SC with I King (Appellant) S Sykes (Second Respondent) Solicitors: Proceedings 2022/299298 Hartnett Lawyers (Appellant) McVittie Legal (Respondent) Proceedings 2022/299327 Hartnett Lawyers (Appellant) McVittie Legal (Second Respondent) File Number(s): 2022/299298 and 2022/299327 Publication restriction: N/A Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Equity Division Citation: Bell v Hartnett Lawyers (No 3) [2022] NSWSC 1204 Date of Decision: 08 September 2022 Before: Peden J File Number(s): 2014/354291 and 2020/254590 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] HEADNOTE [This headnote is not to be read as part of the judgment] In late 2013, Mrs Mabel Deakin-Bell (Mabel or the mortgagor) died. Under her will, Mr Anthony Robert Bell (the Respondent), was left a property which was subject to a $30,000 mortgage to the late Ms Gwendoline Deakin-Bell (Gwendoline or the mortgagee). From 2014, Mr Beau Timothy John Hartnett (the Appellant) acted for Gwendoline in seeking to enforce the mortgage. The only evidence of a costs agreement between the Appellant and Gwendoline was an unsigned copy of an agreement which gave a costs estimate of $3,900 to $6,400. That agreement, which purported to be issued "pursuant to the requirement of the Legal Profession Act 2007", contained a clause allowing the charge of an "uplift fee" of 25%, said to be because the Appellant's fees would only become payable upon sale of the property or his ceasing to act for Gwendoline. On 2 December 2014, Gwendoline commenced proceedings against the Respondent in the Supreme Court of New South Wales seeking possession of the property and payment of the mortgage together with interest and costs, said to amount to $34,683.19 by 14 November 2014 (the Possession Proceedings). These proceedings were ultimately undefended and, on 29 April 2016, orders were made by Davies J for possession and sale of the property. By this time, a series of invoices amounting to approximately $77,200 had been prepared by the Appellant, although there was no evidence that they had been sent to Gwendoline. On 5 September 2016, the Appellant wrote to the NSW Trustee and Guardian (as the Respondent had not yet obtained probate of Mabel's will), giving an estimate of costs "in the range of $220,000.00-$240,000.00", excluding the real estate agent's commission for sale of the property. On 30 September 2016, the Appellant again wrote to the NSW Trustee and Guardian, advising that the previous estimate did not include the uplift fee nor GST, and that his revised estimate was "in the range of $302,500.00 - $330,000.00." On 1 October 2016, the property was sold at auction for $376,000. The net proceeds of sale were $352,137.02. On 17 November 2016, Gwendoline signed a document entitled "Specific Trust Account Authority", which authorised payment to her of $39,089.57, payment to Hartnett Lawyers of $288,601.03, and payment of the balance ($33,834.45) to the Supreme Court of New South Wales, pursuant to the orders of 29 April 2016. The payment to the Supreme Court was not made. The Respondent obtained probate of Mabel's will on 29 November 2016. The Appellant and Respondent thereafter engaged in protracted correspondence in which the Respondent attempted to obtain copies of invoices and amounts charged by the Appellant. This correspondence also involved various complaints by the Respondent to the Legal Services Commissioner of Queensland. The Appellant never provided copies of invoices or amounts charged. Indeed, he took steps actively to dissuade the Respondent from inquiring further, including writing several letters to the Respondent's lawyers in which the Appellant threatened (ostensibly on behalf of his client, Gwendoline) to seek the revocation of the Respondent's grant of probate over Mabel's estate. Eventually, on 9 January 2018, the Respondent sought a costs assessment in the Possession Proceedings. The Appellant did not ultimately engage in the costs assessment process on behalf of Gwendoline, and it was finalised on 24 May 2018, with the assessor, Mr Christopher Wall, determining a total amount payable of $37,345.50 (the Wall Assessment). Gwendoline died on 31 May 2018. After further protracted correspondence, on 1 September 2020, the Respondent filed a Summons in the Equity Division in which he sought a declaration that the Appellant held the amount of $287,551.30 as trustee for him, together with an order that the Appellant pay him the amount of $287,551.30 (the Equity Proceedings). Equitable compensation was also sought together with interest, costs and such "further other orders as are appropriate in the circumstances of the case." Certain interlocutory relief was also sought. On 26 April 2021, Slattery J re-opened the Possession Proceedings. In a further judgment delivered on 12 October 2021 (the second Slattery J judgment), his Honour declined to join the Appellant to the Possession Proceedings, holding that the Appellant "was still amenable to the Court's supervision" pursuant to its inherent supervisory jurisdiction. On 11 November 2021, Slattery J made orders for the filing of a "points of claim" by the Respondent, and a reply and "points of defence" by the Appellant, identifying how this Court's inherent jurisdiction was said to be engaged. These were duly filed, and the two documents identified case numbers for both the Possession Proceedings and the Equity Proceedings. On 16 December 2021, Slattery J ordered that these documents "shall be taken to be pleadings" in both the Possession and Equity Proceedings. On 7 December 2021, the Appellant filed a Notice of Motion seeking to have both the Equity Proceedings and the Possession Proceedings removed to this Court, on the basis that the Court's disciplinary jurisdiction had been engaged. That Notice of Motion was dismissed. On 8 September 2022, Peden J (the primary judge) delivered judgment. Her Honour relevantly ordered, in the Equity Proceedings, the payment by the Appellant of $251,255.53 to the Respondent, which was the difference between the amount the Appellant had been paid and the Wall Assessment. The orders were made pursuant to the Court's inherent jurisdiction. By Further Amended Notice of Appeal dated 7 March 2023, the Appellant appealed. The principal issues on appeal were: 1. Whether the Court's inherent jurisdiction extended to ordering the Appellant to make a payment to the Respondent, and, if it did, whether the primary judge erred in exercising her discretion to make such orders (the inherent jurisdiction issue); 2. Whether the primary judge correctly quantified the amount ordered to be paid to the Respondent (the costs issue); and 3. Whether the mortgagee's costs of the costs assessment should have been paid by the mortgagor pursuant to the terms of the mortgage or the orders of Davies J (the costs assessment issue). The Court held (Bell CJ, Adamson JA and Griffiths AJA agreeing), dismissing the appeal with costs: As to the inherent jurisdiction issue: 1. The Court's inherent jurisdiction was not displaced by rules of Court, and the fact that a third-party payer costs assessment may have been available to the Respondent under the Legal Profession Act 2007 (Queensland) did not mean that the Court's inherent jurisdiction could not be invoked: [130] (Bell CJ); [181] (Adamson JA); [182] (Griffiths AJA). Woolf v Snipe (1933) 48 CLR 677; [1933] HCA 5; Landsal Pty Ltd (In Liq) v REI Building Society (1993) 41 FCR 421; [1993] FCA 121, applied. CSR Limited v Cigna Insurance Australia Ltd (1997) 189 CLR 345; [1997] HCA 33, cited. McGuirk v University of New South Wales [2010] NSWCA 104, distinguished. 1. The primary judge's discretion did not miscarry. The highest standards of integrity are expected of members of the legal profession and exorbitant charging debases the reputation of the legal profession as well as subjecting clients or others involved in litigation to unwarranted costs: [131]-[136] (Bell CJ); [165] (Adamson JA); [182] (Griffiths AJA). Re Veron; Ex parte Law Society of New South Wales [1966] 1 NSWR 511; Dupal v The Law Society of New South Wales [1990] NSWCA 56; New South Wales Bar Association v Cummins (2001) 52 NSWLR 279; [2001] NSWCA 284; Scroope v Legal Services Commissioner [2013] NSWCA 178; Council of the Queensland Law Society Inc v Roche [2004] 2 Qd R 574; [2003] QCA 469, cited. 1. The Appellant was not denied procedural fairness. The supervisory jurisdiction had been squarely raised in the Equity Proceedings. The Appellant acknowledged the existence of the inherent jurisdiction and that, as an officer of the Court, he was subject to it, in his "Points in Reply". The Appellant's application to remove both sets of proceedings to the Court of Appeal on the basis that they involved the exercise of the Court's supervisory jurisdiction was also inconsistent with his claim to have been denied procedural fairness: [145] (Bell CJ); [170]-[174] (Adamson JA); [182] (Griffiths AJA). 2. Consideration of the nature and ambit of the Court's inherent jurisdiction, particularly as it applies to control of the Court's own officers: [123] (Bell CJ); [165] (Adamson JA); [182] (Griffiths AJA). Woolf v Snipe (1933) 48 CLR 677; [1933] HCA 5; Commonwealth Trading Bank of Australia v Inglis (1974) 131 CLR 311; [1974] HCA 17; Doyle v The Commonwealth (1985) 156 CLR 510; [1985] HCA 46; Hamilton v Oades (1989) 166 CLR 486; [1989] HCA 21; Reid v Howard (1995) 184 CLR 1; [1995] HCA 40; Ex parte Farren; Re Austin (1960) 77 WN (NSW) 743; Tringali v Stewardson Stubbs & Collett Ltd [1966] 1 NSWR 354; (1966) 66 SR (NSW) 335; Dwyer v National Companies & Securities Commission (1988) 15 NSWLR 285; Whyked Pty Limited v Yahoo!7 Pty Limited [2008] NSWSC 477; McGuirk v University of New South Wales [2010] NSWCA 104; Re Felicity; FM v Secretary, Department of Family and Community Services (No 4) [2015] NSWCA 19; Malouf v Constantinou [2017] NSWSC 923; Atanaskovic & Ors v Birketu Pty Ltd – Supervisory Jurisdiction [2020] NSWSC 573; NHB Enterprises Pty Ltd v Corry (No 5) [2020] NSWSC 1838; Atanaskovic Hartnell v Birketu Pty Ltd (2021) 105 NSWLR 542; [2021] NSWCA 201; Landsal Pty Ltd (in liq) v REI Building Society (1993) 41 FCR 421; [1993] FCA 121; Pryles & Defteros (a firm) v Green [1999] 20 WAR 541; [1999] WASC 34; Kowalski v Cole [2017] SASCFC 23; Re Jabe; Kennedy v Schwarcz [2021] VSC 106; Storer & Co v Johnson (1890) 15 App Cas 203; Clare v Joseph [1907] 2 KB 369; Electrical Trades Union v Tarlo [1964] 1 Ch 720; [1964] 2 WLR 1041; Moore & Anor v Assignment Courier Ltd [1977] 2 All ER 842; The Siskina [1979] AC 210; Harrison v Tew [1990] 2 AC 523; [1990] 1 All ER 321, cited. As to the costs issue 1. It was not correct to contend that the primary judge simply accepted the Wall Assessment. It is evident that her Honour gave a good deal of scrutiny to the Appellant's underlying invoices: [151] (Bell CJ); [165] (Adamson JA); [182] (Griffiths AJA). 2. The primary judge made use of such material as she had in circumstances where the one party with peculiar and personal knowledge, and the ability, to explain the charges did not go into evidence: [153]-[154] (Bell CJ); [165] (Adamson JA); [182] (Griffiths AJA). Insurance Commissioner v Joyce (1948) 77 CLR 39; [1948] HCA 17; Blatch v Archer (1774) 1 Cowp 63; Railways Board v Herrington [1972] AC 877, applied Cullen v Welsbach Light Co of Australasia Ltd (1907) 4 CLR 990; [1907] HCA 3; Ellor v Selfridge and Co (1930) 46 TLR 236, cited. 1. It was open to the primary judge to conclude that the Wall Assessment was conducted on an indemnity basis, and her Honour's assessment was logical, fair and reasonable in all of the circumstances of the case: [157]-[158] (Bell CJ); [165] (Adamson JA); [182] (Griffiths AJA). Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213; Hamod v State of New South Wales [2011] NSWCA 375, cited. As to the costs assessment issue 1. No reason was advanced impugning her Honour's reasoning or the authorities in holding that Gwendoline was not entitled to retain sums for likely future costs: [161] (Bell CJ); [165] (Adamson JA); [182] (Griffiths AJA). JUDGMENT BELL CJ: Introduction 1. This appeal raises a number of important questions concerning the ambit of the Supreme Court's inherent supervisory jurisdiction over an officer of the Court. In particular, it raises the question whether (a) that jurisdiction extends to requiring a solicitor who acted for a mortgagee in undefended possession proceedings to disgorge to the mortgagor amounts found to constitute excessive professional charges to the mortgagee, and (b) if it does, whether Peden J's (the primary judge) discretion miscarried in making such an order. 2. These questions arise in a regrettably complex procedural context which it will be necessary to traverse in order to consider an additional argument raised on appeal concerning parties and procedural fairness. Shortly stated, there were two relevant sets of proceedings which were ultimately heard together by the primary judge. These came to be referred to by the parties and the primary judge as the Possession Proceedings and the Equity Proceedings. The background to these two sets of proceedings is explained in more detail later in these reasons. 3. The orders in respect of which the appeal is brought were made in the Equity Proceedings and required Mr Beau Timothy John Hartnett (the Appellant) to pay the sum of $251,255.53; interest on that sum in the amount of $50,489.98; and interest on the sum of $33,792.46 in the amount of $9,610.96 to the Respondent, together with the Respondent's costs on an indemnity basis. Background 1. Notwithstanding the procedural complexity of the matter, the bald background facts may be stated relatively briefly. A more comprehensive summary is set out at [6]-[98] of the primary judgment: Bell v Hartnett Lawyers (No 3) [2022] NSWSC 1204 (the primary judgment or PJ). 2. In late 2013, Mrs Mabel Deakin-Bell (Mabel or the mortgagor) died. Under her will, Mr Anthony Robert Bell (the Respondent), was left a property which was subject to a $30,000 mortgage to the late Ms Gwendoline Deakin-Bell (Gwendoline or the mortgagee). As will be seen, the Appellant, who acted for Gwendoline from 2014, charged her $288,601.03 to enforce the security in undefended proceedings in the Possession List of the Supreme Court. 3. Clause 5 in the Memorandum of Mortgage Q860000 provided: "In addition to all costs and expenses which the mortgagor may be liable at law or in equity to pay in respect of this security, or otherwise in relation thereto, the mortgagor will upon demand pay all costs and expenses, including costs as between solicitor and client, incurred by the mortgagee in consequence or on account of any default on the part of the mortgagor hereunder or incurred by the mortgagee for the preservation of or in any manner in reference to this security, all of which costs and expenses shall from the time of payment or expenditure thereof respectively until repaid to the mortgagee by the mortgagor be deemed principal moneys covered by this security, and shall carry interest at such higher rate as may be shown in the schedule to the mortgage." The Costs Agreement 1. The only evidence of a costs agreement was that annexed to an affidavit of Haleema Junat Deen filed in the Equity Proceedings and affirmed on 24 June 2021. 2. In that affidavit, Ms Deen deposed to the fact that she is a solicitor in the employ of Hartnett Lawyers and has the conduct and carriage of the matter on behalf of the Defendant (the Appellant in the appeal). In [4] of her affidavit, Ms Deen deposed that: "On 17 January 2014 Mrs Gwendoline Rosemary Deakin-Bell (Gwendoline) met with Hartnett Lawyers and provided instructions to advise and assist in relation to the following matters, namely: a. the payment of monies owing pursuant to the terms of a family law property settlement agreement with her former husband Robert Deakin-Bell and which payment was secured by a mortgage over property owned by Mabel Deakin-Bell (deceased) at 4 Apsley Street, West Ballina, New South Wales; and b. Gwendoline's estate planning and the preparation of a new Will." 1. Ms Deen then asserted that on 12 February 2014, Hartnett Lawyers provided Gwendoline with "the firm's standard form disclosure of costs agreement", a copy of which was annexed to the affidavit (the Costs Agreement). The Agreement is unsigned, although it contained a typed Client Acknowledgement Form which contained the following statements: "The Client agrees to instruct the Firm in accordance with and be bound by the terms and conditions of the Costs Agreement. The Client acknowledges that the Client has read and understands the matters disclosed in the Costs Agreement." The Client Acknowledgement Form also made provision for Gwendoline's signature but, as noted, this remained unsigned. 1. The Costs Agreement purported to be issued "pursuant to the requirement of the Legal Profession Act 2007". The Costs Agreement indicated that Hartnett Lawyers' address was 60 Appel St, Surfers Paradise, Queensland, and the reference in the Costs Agreement to the Legal Profession Act 2007 was to the Queensland Legal Profession Act. 2. Clause 2.5 of the Costs Agreement stated: "The Firm will perform the following work for the Client; As detailed in a letter by the Firm to the Client dated 3 February 2014 (Hartnett Lawyers letter)." The letter of 3 February 2014 was not in evidence although Gwendoline's Will dated 12 February 2014 and drafted by Hartnett Lawyers was in evidence. 1. Clause 2.2 of the Costs Agreement provided: "2.2 The Client may accept the offer in any of the following ways: (a) by signing and returning the Client Acknowledgment and Trust Account Authority to the Firm; (b) by providing instructions or information to the Firm after receiving the Costs Agreement: (c) by contacting the Firm and advising the Firm of its acceptance; (d) by transferring funds to the Firm's trust account." 1. Clauses 4.4 to 4.7 appeared under a heading "Deferred Payment of Fees". These clauses provided as follows: "4.4 Payment of fees will not be required until the first to occur of the following events: (a) you recover monies pursuant to the mortgage over the property at 4 [Apsley] Street, West Ballina, New South Wales; (b) Hartnett Lawyers ceases to act for you in this matter. however the Firm will render invoices or statements from time to time to inform the Client of costs. 4.5 If this Agreement is terminated then payment of all costs outstanding to the Firm will be required at the time of that termination. 4.6 You have the right in accordance with the Legal Profession Act 2007 (Qld) to obtain independent legal advice before entering into this agreement. You also have the right to a cooling off period of five clear business days after we receive the signed agreement from you during which you may terminate the agreement by written notice to us. Should you so terminate the agreement we are still entitled to charge you for legal services performed on your instructions with your knowledge before that termination. 4.7 This legal practice will charge you as set out above. An uplift fee of 25% on the professional fees usually charged is payable when fees become payable in accordance with this Agreement." 1. Clause 6 of the Costs Agreement provided as follows: "6. Estimate of fees, expenses & disbursements 6.1 The Firm estimates that the total fees, expenses and disbursements to complete the work detailed in clause 2.5 is $3,900.00 - $6,400.00 (which excludes counsel's fees for trial and expert reports (if required). 6.2 The Firm is not bound by any estimates and they are based on the assumption that the matter proceeds smoothly and without delay, no unforeseen issues arise and information and instructions can be readily obtained. 6.3 The Firm's estimate is not a quote and is not binding as the services required to be rendered by the Firm may vary, and the Firm may be required to undertake steps or incur costs which are not anticipated." (Bold as in original) 1. Also to be noted is Clause 7 of the Costs Agreement which provided: "7. Care and consideration 7.1 Where special circumstances arise which at the Firm's discretion justify further fees in addition to the Firm's usual fees, the Firm may levy such further fees having regard to all the circumstances of the work including: (a) the complexity of the work and the difficulty and novelty of the questions raised; (b) the importance of the work and the amount involved; (c) the skill, labour, specialised knowledge and responsibility involved in the work on the Firm's part; (d) the number and importance of the documents prepared or perused; (e) the time expended; (f) research and consideration of unusual questions of law and fact; (g) the urgency with which the work was undertaken. 7.2 The Firm warrants that any additional fees will not exceed thirty percent (30%) of the Firm's gross professional fees and other fees charged in accordance with clause 4 during the course of the work." 1. It is relevant at this juncture to note several sections of the Legal Profession Act 2007 (Qld) (the LP Act). 2. Section 308(1) of the LP Act relevantly provides: "A law practice must disclose to a client under this division— … (c) an estimate of the total legal costs if reasonably practicable or, if that is not reasonably practicable, a range of estimates of the total legal costs and an explanation of the major variables that will affect the calculation of those costs" 1. Section 313 of the LP Act provides: "Additional disclosure—uplift fees (1) If a costs agreement involves an uplift fee, the law practice must, before entering into the agreement, disclose to the client in writing— (a) the law practice's legal costs; and (b) the uplift fee, or the basis of calculation of the uplift fee; and (c) the reasons why the uplift fee is warranted. (2) A law practice is not required to make a disclosure under subsection (1) to a sophisticated client." 1. Section 315 of the LP Act provides: "A law practice must, in writing, disclose to a client any substantial change to anything included in a disclosure already made under this division as soon as is reasonably practicable after the law practice becomes aware of that change." 1. Section 324 provides: "Conditional costs agreements involving uplift fees (1) A conditional costs agreement may provide for the payment of an uplift fee. (2) The basis of calculation of the uplift fee must be separately identified in the agreement. (3) The agreement must contain an estimate of the uplift fee or, if that is not reasonably practicable, both of the following— (a) a range of estimates of the uplift fee; (b) an explanation of the major variables that will affect the calculation of the uplift fee. (4) If a conditional costs agreement relates to a litigious matter, the uplift fee must not exceed 25% of the legal costs, excluding disbursements, otherwise payable. (5) However, this Act does not affect the right of a law practice to discount its fees and, if a law practice does discount its fees, the reference in subsection (4) to legal costs is the fees the law practice would have charged if the law practice's fees had not been discounted. (6) A law practice must not enter into a costs agreement in contravention of this section." 1. Further, "conditional costs agreement" and "uplift fee" are defined in s 300 as: "conditional costs agreement means a costs agreement that provides that the payment of some or all of the legal costs is conditional on the successful outcome of the matter to which those costs relate, as mentioned in section 323, but does not include a costs agreement to the extent to which section 325(1) applies. … uplift fee means additional legal costs, excluding disbursements, payable under a costs agreement on the successful outcome of the matter to which the agreement relates." Both of these definitions use the language of "the successful outcome of the matter". Section 324 makes it plain that an "uplift fee" may only be provided for in a conditional costs agreement. It is the quid pro quo for the legal practitioner accepting the risk that a "successful outcome of the matter" might not be achieved. 1. Section 323(3) of the LP Act relevantly provides: "A conditional costs agreement— (a) must set out the circumstances that constitute the successful outcome of the matter to which it relates; and (b) may provide for disbursements to be paid irrespective of the outcome of the matter; and (c) must be— (i) in writing; and (ii) in clear plain language; and (iii) signed by the client; and (d) must contain a statement that the client has been informed of the client's right to seek independent legal advice before entering into the agreement; and (e) must contain a cooling-off period of not less than 5 clear business days during which the client, by written notice, may terminate the agreement." 1. It is plain that Clause 4.7 of the Costs Agreement (see [13] above) purports to be an "uplift fee" as defined in the LP Act. Such an "uplift fee" can only be charged under a "conditional costs agreement", per s 324 of the LP Act. That raises two matters which should be noted. 2. First, it is arguable that the Costs Agreement was not a "conditional costs agreement" at all. Payment was not dependent on the successful outcome of the matter to which the costs related. Rather, payment was "deferred" – in the language of the Costs Agreement – until either Gwendoline recovered moneys pursuant to the mortgage, or Hartnett Lawyers ceased to act. Payment was not expressed to be conditional upon Gwendoline actually recovering any moneys pursuant to the mortgage. So much is clear from the fact that if Gwendoline had, in fact, not made any recovery pursuant to the mortgage, Hartnett Lawyers could have ceased to act for her, and Hartnett Lawyers' fees would have become payable. If that conclusion is correct, no "uplift fee" was in fact chargeable, as the costs were not "conditional" in the relevant sense. 3. Second, even if the Costs Agreement was a "conditional costs agreement", there was no evidence that Hartnett Lawyers satisfied the requirements under the LP Act in relation to the "uplift fee". Specifically, there was no evidence of compliance with the requirement in s 324(3) to provide either an estimate of the uplift fee, or a range of estimates and the major variables that would affect the final calculation of the uplift fee. Nor did Hartnett Lawyers appear to comply with s 313(1)(c), pursuant to which it ought to have disclosed in writing "the reasons why the uplift fee is warranted", or s 323(3)(c)(iii), as there was no evidence of a costs agreement which Gwendoline had actually signed. 4. If there was, as the evidence suggests, a failure to disclose these matters, s 316 of the LP Act would have been engaged: "Effect of failure to disclose (1) If a law practice does not disclose to a client or an associated third party payer anything required by this division to be disclosed, the client or associated third party payer, as the case may be, need not pay the legal costs unless they have been assessed under division 7. (2) A law practice that does not disclose to a client or an associated third party payer anything required by this division to be disclosed may not maintain proceedings against the client or associated third party payer, as the case may be, for the recovery of legal costs unless the costs have been assessed under division 7. (3) If a law practice does not disclose to a client or an associated third party payer anything required by this division to be disclosed and the client or associated third party payer has entered into a costs agreement with the law practice, the client or associated third party payer may also apply under section 328 for the costs agreement to be set aside. (4) If a law practice does not disclose to a client or an associated third party payer anything required by this division to be disclosed, then, on an assessment of the relevant legal costs, the amount of the costs may be reduced by an amount considered by the costs assessor to be proportionate to the seriousness of the failure to disclose. … (6) In a matter involving both a client and an associated third party payer if disclosure has been made to 1 of them but not the other— (a) subsection (1) does not affect the liability of the 1 to whom disclosure was made to pay the legal costs; and (b) subsection (2) does not prevent proceedings being maintained against the 1 to whom the disclosure was made for the recovery of those legal costs. (7) Failure by a law practice to comply with this division is capable of constituting unsatisfactory professional conduct or professional misconduct on the part of any Australian legal practitioner, or Australian-registered foreign lawyer, involved in the failure." The Possession Proceedings 1. On 2 December 2014, Gwendoline commenced the Possession Proceedings in the Supreme Court of New South Wales by Statement of Claim seeking possession of the property and payment of the mortgage together with interest and costs, said to amount to $34,683.19 by 14 November 2014 (the Possession Proceedings). The Statement of Claim was in what may be described as "vanilla" form, running to 21 paragraphs, reciting details of the mortgaged property, entry into and key terms of the mortgage, a transfer of the mortgage from Robert Deakin-Bell to Gwendoline, Mabel's death, demand for payment and non-payment. 2. On 15 January 2015, Mr Hartnett applied for default judgment. That application was rejected shortly thereafter because the Respondent had been named as defendant but was not at that point in time the executor of Mabel's estate. 3. On 18 March 2016, an Amended Statement of Claim was filed naming the NSW Trustee and Guardian as defendant, removing the Respondent as a party. This delay was explained to the primary judge as a result of "Mr Hartnett continu[ing] to agitate that Mr Bell apply for probate": PJ [13]. The amendments were formal and perfunctory, simply replacing the Respondent as defendant in the Possession Proceedings and naming the NSW Trustee and Guardian as defendant. 4. These proceedings were undefended and, on 29 April 2016, Davies J made orders for possession and sale of the property. These orders were not opposed: see Deakin-Bell v NSW Trustee and Guardian [2016] NSWSC 540 (the possession judgment). Relevantly, those orders included (with emphasis added): "5. After the Property has been sold, the plaintiff be entitled to apply the proceeds of sale towards payment of: 5.1 the principal sum of $30,000 owing under the registered mortgage dated 11 November 1994 (the Mortgage); 5.2 pursuant to the terms of the Mortgage, and on an indemnity basis, the costs and expenses she has incurred in relation to the Mortgage and these proceedings to date, and any such costs that she incurs in the future; and 5.3 pre-judgement interest on the principal sum of $30,000.00 pursuant to section 100 of the Civil Procedure Act 2005 (NSW) for the period 6 September 2013 to 29 April 2016. 6. After deduction of the amounts referred to in Order 5 above, the plaintiff pay the balance of the proceeds of sale of the Property to: 6.1 any person who has by that time been appointed as the administrator or executor of the Estate of Ms Mabel Deakin-Bell; or 6.2 if no person has been appointed administrator or executor, then to the Court." 1. By 29 April 2016, a series of invoices to Gwendoline amounting to approximately $77,200 had been prepared although it was not clear on the evidence that they had in fact been sent to her. 2. On 5 September 2016, the Appellant wrote to the Proper Officer, Specialist Services – Legal of the NSW Trustee and Guardian (marked "Attention: Mr John Hong") setting out various details relating to the process of sale of the property. That letter includes: "Estimate of costs In April 2016 we provided our client with an updated estimate of our legal fees and disbursements to date in the range of $220,000.00 - $240,000.00. At this stage, we do not view it as necessary to amend this estimate however, we note the above estimate may be subject to a 20% variation. In the event, that the Property does not sell at auction we will require to provide a further estimate at that stage. The above estimate does not include McGrath's fees and commission for the sale and marketing of the Property." 1. No evidence (whether documentary or oral) was placed before the Court of the asserted "updated estimate of our legal fees and disbursements to date in the range of $220,000.00 - $240,000.00" said to have been provided to Gwendoline in April 2016. Nor were there in evidence any invoices issued between 11 May 2015 and the date of this letter. 2. On 30 September 2016, the day before the auction and sale of the property, the Appellant again wrote to the Proper Officer marked to the attention of Mr Hong. In that letter, the Appellant revised his cost estimate: "Estimate of costs As previously advised, in April 2016, we provided our client with an updated estimate of our legal fees and disbursements to date in the range of $220,000.00 - $240,000.00. In our letter to you dated 6 September 2016, we advised that at that stage, we did not view it as necessary to amend our estimate, however, we noted that the estimate may be subject to a 20% variation. Our letter of 6 September 2016, however, omitted to take into consideration the 'uplift' fee of 25% which forms part of our deferred fee agreement with our client and further omitted to note that the fee estimate did not include GST. Therefore, taking into consideration both the agreed uplift fee and GST, the legal fees likely to fall payable under Order 5.2 is in the range of $302,500.00 - $330,000.00. In the event that the Property does not sell at auction, we will require to provide a further estimate at that stage. We reiterate that the above estimate does not include McGrath's fees and commission for the sale and marketing of the Property." The reference to the letter of 6 September was presumably a reference to the letter of 5 September reproduced at [32] above. 1. Also on 30 September 2016, the Respondent, who ultimately obtained probate in respect of Mabel's estate in November 2016, wrote to the Appellant through his lawyers, notifying him that he intended to seek probate of Mabel's estate, and asking for copies of the Appellant's costs agreement and invoices to that date. At a similar time, he became aware that the Appellant had provided the NSW Trustee and Guardian with an estimate of his fees of $302,000 to $330,000. The primary judgment records that this estimate was "without any detail": PJ [16]. 2. On 1 October 2016, the property was sold at auction for $376,000. On 31 October 2016, the net proceeds of sale, some $352,137.02, were paid into the Appellant's trust account. 3. During October 2016, the Appellant and the Respondent corresponded. That correspondence can be characterised fairly as the Respondent seeking information regarding costs and accounts. The Appellant was not responsive. 4. On 14 November 2016, the day it may fairly be assumed that the sale of Mabel's property was settled, being some six weeks after the auction, the Appellant issued Gwendoline two further invoices: 1. One for $167,828.26 that had attached to it a schedule of over 100 pages of time entries purportedly in relation to work from 15 May 2015 to 14 November 2016; and 2. One for $43,033.34 for a 25% "deferred fee" or "uplift fee" said to be payable because Mr Hartnett was being paid either when his retainer was terminated or when Gwendoline recovered moneys pursuant to the mortgage. 1. On 17 November 2016, Gwendoline signed a document entitled "Specific Trust Account Authority" which had been provided to her by the Appellant and provided for the payment, out of Hartnett Lawyers' trust account, to: 1. Gwendoline of $39,089.57; and 2. Hartnett Lawyers of $288,601.03; and 3. the New South Wales Supreme Court of $33,834.45. There was a schedule accompanying the Specific Trust Account Authority listing some 20 invoices from Hartnett Lawyers to Gwendoline. Each of the underlying invoices was in evidence. Each (other than the second bill of 14 November 2016) included an uplift of 25% of the professional fees chargeable, described as "Fees for Care and Consideration". This was presumably charged pursuant to Clause 7 of the Costs Agreement. 1. On 18 November 2016, the Appellant paid Gwendoline in accordance with the above authority, and also made a transfer from his trust account to his office account in accordance with the above authority. He did not make the transfer to this Court as required by Order 6 of the orders of Davies J; indeed, no such transfer was made until the Appellant was again ordered to do so by Slattery J on 26 April 2021. 2. On 29 November 2016, the Respondent obtained probate of Mabel's will. From this time, he stood in the shoes of the mortgagor. 3. The Appellant and Respondent thereafter engaged in protracted correspondence in which the Respondent attempted to obtain copies of invoices and amounts charged by the Appellant. This correspondence also involved various complaints by the Respondent to the Legal Services Commissioner of Queensland (LSCQ). 4. The Appellant never provided copies of invoices or amounts charged. Indeed, he took steps actively to prevent this process, including writing several letters to the Respondent's lawyers in which the Appellant threatened (ostensibly on behalf of his client, Gwendoline) to seek the revocation of the Respondent's grant of probate over Mabel's estate. 5. On 2 March 2017, the Respondent's lawyers wrote to the LSCQ asking for assistance to have the "excessive fees assessed" and complaining of Mr Hartnett's failure to provide documentation as requested. 6. On 12 June 2017, the LSCQ responded, noting: "Mr Hartnett has indicated that… he considers the appropriate course is for Mr Bell to make a further request for an itemised bill under section 335 of the Legal Profession Act 2007 … It appears Mr Hartnett has now conceded that Mr Bell has the 'necessary standing' to request an itemised bill. In the circumstances … you may consider it appropriate to forward a further request for an itemised bill to Mr Hartnett." 1. The primary judge observed that Mr Hartnett's submission in relation to this letter from the LSCQ was that it could be read too precisely as Mr Hartnett's communications with the LSCQ were not in evidence. Her Honour concluded that "[o]bviously, Mr Hartnett had the ability to go into evidence about this and many other matters and chose not to. I do not accept there is any basis for a suggestion that the LSCQ misrepresented what Mr Hartnett had told them." There was no challenge to this finding. 2. On 14 June 2017, the Respondent's lawyers requested an itemised bill from the Appellant with reference to s 335 of the LP Act. 3. On 10 July 2017, the Respondent's lawyers again complained to the LSCQ that the Appellant had not responded to the request for documentation and that they wished to proceed with a complaint against him. 4. On 12 July 2017, the Appellant responded (with emphasis added): "We acknowledge that Mr Bell, in his capacity as executor, is a non-associated third party payer within the meaning of s301(3). Section 335(7) of the LPA provides that a law practice is to provide a non-associated third party payer, with sufficient information to allow the third party payer to consider making a costs application (emphasis added). In this regard, your client has requested "copies of all itemised accounts issued" in respect of (our firm's) representation for Mrs Gwendoline Deakin-Bell against the estate. We advise that we have not issued itemised bills in a form and including such detail as to how the legal costs are made up in a way that would allow the legal costs to be assessed. We have written to [Gwendoline] requesting that she attend an appointment at our office, so that we may advise her in person in relation to Mr Bell's request and the implications for [Gwendoline] including from a legal costs perspective. In the meantime, we will be grateful if you would respond to this letter and advise whether Mr Bell might accept "other information" to allow your client to give this matter his further consideration. Whilst our standard processing time for information requests is 28 days, we respectfully submit that by its nature, this matter will clearly require additional time to respond to your client's request." 1. The primary judge observed that this letter has the following notable features: "(1) It does not disclose that Mr Hartnett had sought and received Gwendoline's instructions and authority to pay himself $288,601.03 from the proceeds of sale. (2) It did not refer to the two invoices Mr Hartnett issued on 14 November 2016, which contained hundreds of pages of time entries, or offer them as "itemised accounts issued", or even un-itemised accounts or "sufficient information". (3) Mr Hartnett's refusal to provide the documentation was not consistent with the representation that he had provided to the LSCQ that a "request" should be made for documentation to be provided. (4) Mr Hartnett's suggestion that this request for information "will clearly require additional time" beyond 28 days is astonishing. He had acted for a mortgagee, who was obliged to act in good faith and account to the mortgagor. He also had "information" in his possession in the form of his invoices and schedules of time entries, which he could and should have provided immediately. (5) It is not apparent why Mr Hartnett needed to seek instructions from Gwendoline to provide documentation that was sought from Mr Hartnett personally, and again appears another tactic of deflecting and delaying." 1. On the same day the Appellant sent a second letter to the Respondent alleging various matters and that he would seek instructions to have the Respondent's grant of probate set aside (which never occurred) and that: "There is no question that our files support those costs. … In light of the recent steps taken by your client, and as our client may apply to the court for an order that the grant of probate be revoked, it is likely that our client will now incur further legal costs. In accordance with [Davies J's Order 5] our client is entitled to recover such costs from the proceeds of sale. In the circumstances, our client is not able to pay the balance of the proceeds of sale in accordance with [Davies J's orders]." 1. The primary judge observed that it was "difficult to see why Mr Hartnett would threaten that costs of an application to revoke Mr Bell's grant of probate would entitle Gwendoline to recover those costs from the proceeds of sale." 2. On 31 July 2017, the Respondent's lawyers replied to the Appellant responding to the allegations about probate and again requesting Davies J's judgment, all invoices issued, whether itemised or not, and other documents. 3. On 2 August 2017, the Appellant did not provide documentation but responded by threatening that he had instructions to make an application to revoke the grant of probate. 4. On 20 September 2017, the Respondent's lawyers wrote to the LSCQ indicating that they had not received the Appellant's response with documentation and indicating that the Respondent wanted to have the Appellant's costs in the Possession Proceedings assessed. The application for costs assessment was included in the letter with an indication it would be filed on 12 October 2017. 5. On 11 October 2017, the Appellant responded in a five page letter with further threats about the Respondent's grant of probate and stating "we maintain that your client lacks standing to make such Application [for costs assessment]. Further, we consider that until the above issues [concerning probate] are resolved… then no steps should be taken by your client". The letter went on to state that should a costs assessment be filed that "we hereby place you on notice that … our client will object to such application". As the primary judge held, this was effectively to assert that the Appellant held instructions to resist such application. 6. On 27 October 2017, the Respondent's solicitors wrote to Registrar Bellach of this Court under the heading "Re: Estate of the Late Mabel Dawn Deakin-Bell Costs Assessment Application". This appears to refer to an application that had already been filed but which was not in evidence (the Costs Application in evidence is dated 9 January 2018). In any event, the correspondence to the Registrar included the following: "4. We would agree that reasonable fees for this matter, which proceeded on an undefended basis, would be $70,000. Therefore, we dispute the amount of $265,450 on the following basis: a. sale of house $385,000 b. Less 3% commission $11,550 (est) c. Less payment to mortgagor $38,000 ($30,000 with interest est of $8,000) d. less legal costs $70,000 TOTAL $265,450 (disputed amount)" 1. Correspondence between the parties continued until 10 January 2018. At that point, the Respondent's lawyers wrote to the Appellant noting that they intended to file an application in this Court seeking a costs assessment in respect of the Appellant's costs in the Possession Proceedings. That letter provided the Appellant with 21 days to object. 2. On 12 February 2018, the application for costs assessment was then assigned to Mr Christopher Wall. The costs assessment process commenced in earnest on 26 February 2018, when Mr Wall wrote to the parties. 3. The Appellant did not reply initially. Following several letters to follow-up, and extensions of time, he replied on 3 May 2018, the date of the extended deadline for Gwendoline to provide particulars. He requested a further extension of time (to 31 May 2018), noting that he had now formally received instructions to act on Gwendoline's behalf. However, as the primary judge noted, the Appellant had charged Gwendoline for reading each piece of correspondence from Mr Wall up to that point, and the only basis on which such a charge could be justified was if the Appellant already had instructions to act: PJ [59]. 4. Following correspondence with the Respondent's lawyers, Mr Wall determined that an extension would be granted until 24 May 2018. 5. The Appellant never wrote to Mr Wall again. 6. In those circumstances, Mr Wall finalised the costs assessment on 24 May 2018 at $40,000, less the costs assessment filing fee of $2,654.50 (which the Respondent had paid) (the Wall Assessment). That led to a final assessment of the total amount payable pursuant to the order of Davies J of $37,345.50, up to the date of the application for a costs assessment. 7. On 31 May 2018, Gwendoline died. 8. Apart from correspondence on 24 July 2018 in which the Appellant wrote to the Respondent's lawyers asserting that he had instructions from Gwendoline's executor to "lodge an application for review of the determination of the costs assessor" (which was never made), the Appellant did not write to the Respondent again until 28 February 2019 and then only to seek an extension of time to reply to correspondence. 9. On 24 July 2020, the Respondent's lawyers wrote a twelve-page letter to the Appellant, relying on the costs assessment and demanding $287,551.30 be paid either into their trust account or to the Court by 31 July 2020. 10. On 31 July 2020, the Appellant replied seeking an extension of time until 28 August 2020 to reply to the demand. The Respondent's lawyers replied on 4 August 2020 requiring confirmation of payment into Court by 7 August 2020. On 5 August 2020, a solicitor employed by the Appellant's firm replied to confirm that the Appellant would not comply with the demand for payment, and raised various issues arising out of the protracted correspondence to that point. On 6 August 2020, the Respondent's lawyers replied, making further demands to which the Appellant replied on 7 August, maintaining his request for an extension. Subsequent Procedural History 1. On 1 September 2020, the Respondent filed a Summons in the Equity Division of this Court in which he sought a declaration that the now Appellant, Mr Hartnett, held the amount of $287,551.30 as trustee for the plaintiff, together with an order that the Appellant pay him the amount of $287,551.30. Equitable compensation was also sought together with interest, costs and such "further other orders as are appropriate in the circumstances of the case." Certain interlocutory relief was also sought. 2. On 26 February 2021, Slattery J heard argument in relation to a dispute concerning the service of the proceedings. This resulted in a judgment delivered on 11 March 2021 (Bell v Hartnett Lawyers [2021] NSWSC 202 (first Slattery J judgment)), in which his Honour granted leave to the Respondent to proceed against the Appellant and directed that the Possession Proceedings be relisted. That latter order falls to be understood in the context of a number of observations made by Slattery J. In his judgment, Slattery J noted at [10] that: "Through over four years of voluminous correspondence, Mabel's estate has essentially been seeking an account of the use of the sale proceeds from Gwendoline, as the mortgagee, and then after May 2018, from Gwendoline's estate. In the absence of a representative of Gwendoline's estate, the solicitors for Mabel's estate, McVittie Legal, corresponded with Mr Hartnett. The correspondence has involved complaints to the Law Society of Queensland. A cost assessment was completed between the estates of Gwendoline and Mabel in September last year. But Mr Hartnett did not participate in that costs assessment, claiming that he did not act for Gwendoline's estate." 1. Apart from dealing with the service of process question, Slattery J referred to a number of other issues that had been raised in relation to the proceedings which it was contended by the Appellant made them vulnerable to being struck out. At [19]-[26] of his judgment, Slattery J said: "Attention must indeed be given to the proper parties to these proceedings, and what is the real cause of action, if any, against the defendant solicitor. Now the Court has granted leave under UCPR, r 10.3(4), the Court is required under Civil Procedure Act 2005, s 56 to bring the real issues in these proceedings to resolution and to quell the controversy between these parties which has now gone on for five years. The circumstances raise a number of questions for an objective observer. They may all be readily able to be answered when issue is joined. One of those questions is how the defendant solicitor was able to issue a memorandum of fees, if that is what happened, to authorise the transfer of $288,601.03 out of his client's trust account to his firm on 18 November 2016, so soon after the sale of the Ballina property. So large a bill for about seven months' work from the commencement of the possession proceedings (in March 2016) up to the sale of the Ballina property (in October 2016), calls for explanation. Mabel's estate was prima facie entitled to an account from Gwendoline in relation to the transfer of that sum, which Gwendoline had held on trust for her. It may be that the transfer of this sum by Gwendoline to Mr Hartnett can be readily explained by proper payment authorities and the production of regular bills of costs itemizing what work had been done for Gwendoline in relation to the exercise of the power of sale up to that date. But that will be a matter for later analysis. The Court has an obligation to get these proceedings into order. It will be necessary for the plaintiff to join Gwendoline's estate to these proceedings. It is also necessary for these proceedings to be joined with the possession proceedings brought by Gwendoline and in which Davies J made orders (Order 6) which on the material presently available appear to have not been complied with by Gwendoline's estate, at least in respect of the admitted trust account balance of $33,792.46. The Court will initiate this of its own motion. The Court will adjourn these proceedings for three weeks to allow the plaintiff to bring in an amended process to join the estate of Gwendoline and for the file in the possession proceedings to be retrieved. If Mr Bell wishes to make any application in the possession proceedings, he will first need to substitute himself for the NSW Trustee and Guardian. After his grant of probate, he now fully represents the interests of Mabel's estate. The fact that Gwendoline's estate is unrepresented in the possession proceedings is readily curable by the application of UCPR, r 7.10; the Court can make an order for someone to represent the estate of a deceased person or for the matter to proceed against the estate in the absence of a representative. Thought will also have to be given to how Gwendoline's estate will be represented in the present proceedings and whether or not an order will be made for the appointment of someone to represent that estate as a possible second defendant." (emphasis added) 1. His Honour also directed that the matter be listed part heard before him on 19 March 2021 and also that "any motions to amend the originating process in these proceedings, or in relation to the reconstitution of the possession proceedings, may be made returnable before" him on the same date. 2. On 23 March 2021, Slattery J made directions as follows: "1. Direct Hartnett Lawyers to produce to the Court in these proceedings a copy of the last known will of the late Gwendoline Rosemary Deakin-Bell by forwarding it to my Associate and the representatives of Anthony Robert Bell by 4pm on Wednesday 7 April 2021. 2. Direct Hartnett Lawyers to provide by Wednesday, 7 April 2021 the Court a copy of all invoices for legal fees and disbursements that were rendered to Gwendoline Rosemary Deakin-Bell in respect of legal services provided to her between 2014 and 2016." 1. On 26 April 2021, Slattery J made further orders which it is necessary to set out in full (also with emphasis added): "The Court makes the following orders and directions in the possession proceedings (proceedings number 2014/354291) and in the equity proceedings (proceedings number 2020/254590). The Possession Proceedings (1) Note that the plaintiff in the possession proceedings, Gwendoline Rosemary Deakin-Bell, died on 31 May 2018 and although no one has yet applied for probate of her last will or to represent her in the possession proceedings, her estate nevertheless has an interest in the possession proceedings. (2) Note that the late Gwendoline Rosemary Deakin-Bell was a resident of Labrador in the State of Queensland at the time of her death and that her last will dated 12 February 2014 gave the whole of her estate in equal shares to her daughter, Linda May Lynch of 8 Whipbird Court Burleigh Waters, Queensland and to her son James Stephen Halmarick of 1/34 Gleneagles Drive Robina, Queensland. (3) Order under Uniform Civil Procedure Rules 2005 (UCPR), r 7.10(2)(a) until further order that the possession proceedings may continue in the absence of a representative of the estate of the late Gwendoline Rosemary Deakin-Bell. (4) Note it is in the interests of justice that the estate of the late Gwendoline Rosemary Deakin-Bell be represented in the possession proceedings by any person interested in her estate if any such person wishes to represent her estate and for that purpose the Court: (a) directs that the solicitor on the record for the defendant in the possession proceedings, Hartnett Lawyers to notify the children of the late Gwendoline Rosemary Deakin-Bell, namely the said Linda May Lynch and the said James Stephen Halmarick (a) of the existence and nature of these proceedings, (b) of these orders and directions, by supplying them with a copy thereof, and (c) of their right to represent the estate of their mother in these proceedings by applying to the Court for orders under UCPR, r 7.10(2)(b); and (b) further directs that Hartnett Lawyers file a short affidavit describing their compliance with Order 5(1). (5) Note that Anthony Deakin Bell (the executor) has obtained probate of the estate of the late Mabel Deakin Bell, the defendant in the possession proceedings, and that the proceedings shall by force of that probate, or otherwise by appointment pursuant to UCPR, r 7.10(2)(b), hereafter continue against the executor on behalf of the estate of the late Mabel Deakin-Bell in place of the NSW Trustee and Guardian. (6) Order in the possession proceedings, to enforce and carry into effect the orders made by Davies J on 29 April 2016 (Deakin-Bell v NSW Trustee and Guardian [2016] NSWSC 540), that any money presently standing to the credit of the late Gwendoline Rosemary Deakin-Bell in the trust account of the solicitor on the record for the plaintiff in the possession proceedings, Mr Beau Hartnett, be paid into Court by Friday, 7 May 2021, to abide by the Court's determination in the possession proceedings as to the entitlement to those monies as between the estate of the late Gwendoline Rosemary Deakin-Bell and the estate of the late Mabel Deakin-Bell (the entitlement issues). (7) Direct the parties to bring in agreed directions by Friday, 21 May 2021, or in default of agreement their alternative proposed directions and submissions in support of no more than three pages, (a) to make provision for the resolution of the entitlement issues in the possession proceedings, and (b) to refer, if required, the fees charged by Hartnett Lawyers to the plaintiff in the possession proceedings to an assessment of costs, indicating what kind of cost assessment is proposed to be ordered on the basis for that order. The Equity Proceedings (8) Order the plaintiff in the equity proceedings to file and serve any statement of claim upon which he seeks to rely by Tuesday, 25 May 2021, or indicate by that date that he does not seek further relief in those proceedings but will only seek relief in the possession proceedings. (9) Reserve for further argument the question of the costs of the defendant's motion dated 25 September 2020 in the equity proceedings. In Both Proceedings (10) Stand both the possession and the equity proceedings over for further directions before Slattery J on Thursday, 27 May 2021 at 9:30am." 1. As contemplated by the 26 April 2021 directions, in the absence of agreement between the parties, short submissions in relation to further proposed orders were made. Thus, on 21 May 2021, Mr Sykes of junior counsel for the Respondent sought orders which included: "3. Order pursuant to rule 6.24 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) that Beau Timothy John Hartnett trading as Hartnett Lawyers be added as a defendant to the Possession Proceedings." 1. He further noted in his submissions: "Mr Hartnett being added as a party to the Possession Proceedings will simplify how any difference in costs can be ordered to be repaid if such a difference is determined upon assessment." The "difference" referred to was between what the Appellant had charged Gwendoline (which had been funded from the proceeds of sale of Mabel's mortgaged property) and what would have been a reasonable amount to charge in all the circumstances. 1. In submissions dated 26 May 2021, Ms King of junior counsel for the Appellant responded to this submission, objecting that: "There is no articulated basis for the joinder of Mr Hartnett proposed by the Defendant. Mr Hartnett notes the effect of s 335(9)(d) of the Legal Profession Act 2007 (QLD)." 1. Section 335(9) of the LP Act provides: "If there is a non-associated third party payer for a client of a law practice— (a) nothing in this section prevents— (i) the client from making 1 or more costs applications in relation to costs for which the client is liable; and (ii) the non-associated third party payer from making 1 or more costs applications in relation to costs for which the non-associated third party payer is liable; and those applications may be made by them at the same time or at different times but must be dealt with separately; and (b) the client— (i) may participate in the costs assessment process if the non-associated third party payer makes a costs application under subsection (2) in relation to the legal costs for which the non-associated third party is liable; and (ii) is taken to be a party to the assessment and is bound by the assessment; and (c) the law practice— (i) must participate in the costs assessment process; and (ii) is taken to be a party to the assessment; and (d) despite any other provision of this division, the assessment of the costs payable by the non-associated third party payer does not affect the amount of legal costs payable by the client to the law practice." 1. A further directions hearing was held on 27 May 2021 at which a number of issues were evidently identified. This emerges from Slattery J's first and second directions of that date which were made in both the Equity and Possession Proceedings and were as follows: "1. Direct the representatives of Mabel Deakin-Bell's estate to put on submissions on the issues discussed today by 4pm on Thursday, 10 June 2021. 2. Direct Hartnett Lawyers to put on submissions in reply by Thursday, 24 June 2021." 1. On that occasion, his Honour also formally noted in both sets of proceedings that: "in order to avoid any perceived or actual conflict of interest, any submissions advanced today or to be provided in writing on 24 June by Hartnett Lawyers shall not be submissions on behalf of Gwendolyn Deakin-Bell's estate but are advanced in their own interests." 1. In his submissions filed on 11 June 2021 pursuant to Slattery J's directions of 27 May 2021, Mr Sykes argued (with emphasis added): "Issue 5 – Joinder of Mr Hartnett to Proceedings 52 Mr Bell accepts that, if Mr Hartnett is not granted leave to cease acting for Gwendoline's Estate, noting the limitations of Mr Hartnett's continued involvement in light of the conflict, it will be unnecessary to join Mr Hartnett as a party to proceedings. Mr Bell concedes this on the basis of the breadth of the Court's inherent jurisdiction to supervise, oversee and otherwise control the process of practitioners practising in the jurisdiction. 53 If the Court does not consider its inherent jurisdiction extends so far as to bind Mr Hartnett in his capacity as a solicitor on record for Gwendoline, then Mr Bell submits that it will be necessary for Mr Hartnett to be a party to proceedings so that the Court can make orders that bind him. If Mr Hartnett is not a party to proceedings, then there is nothing compelling Mr Hartnett to participate in any assessment process. Mr Bell has concerns about Mr Hartnett complying, such concerns arising from his repeated refusal to provide Mr Bell with requested invoices and itemised accounts, and Mr Hartnett's five year delay in complying with the order to pay the surplus funds into Court." 1. Ms King made further submissions in reply, dated 25 June 2021. Those submissions record (emphasis added): "Issue 5 - Joinder of Mr Hartnett to the proceedings 19. Mr Hartnett will be seeking leave to cease acting in the mortgage proceedings due to his conflict of interest. 20. The submissions of Mr Bell do not articulate a basis for the joinder of Mr Hartnett to the mortgage proceedings and Mr Hartnett opposes any such joinder. Such a joinder is not required to compel Mr Hartnett to participate in any costs assessment, because he is a party to any assessment under s 335 Legal Profession Act 2007 (QLD)." 1. Following further oral argument on 13 July 2021, this and other issues were dealt with by Slattery J in a further judgment delivered on 12 October 2021: Bell v Hartnett Lawyers (No 2) [2021] NSWSC 1270 (second Slattery J judgment). Relevant portions of this judgment need to be noted, not only in order to follow and understand the evolving procedural situation but also because, in the judgment under appeal, Peden J expressly stated that her reasons should be read in conjunction with both of Slattery J's earlier judgments: PJ [5]. 2. In the second Slattery J judgment, his Honour noted (at [29]) that "[o]n 26 April 2021, the Court reconstituted both the Equity and Possession proceedings to ensure that all necessary (and no unnecessary) parties were joined without occasioning unnecessary additional expense." His Honour then observed that "[w]hen this matter came before the Court on 27 May 2021, the Court declined Hartnett Lawyers' request for leave to withdraw as solicitor on the record for Gwendoline's estate in the Possession Proceedings. But the Court noted that Hartnett Lawyers' submissions were then advanced on the firm's own behalf rather than on behalf of Gwendoline's estate": at [30]. 3. On the question of joinder of Mr Hartnett as a defendant in the Possession Proceedings, that being the issue the subject of submissions noted at [80] and [81] above, his Honour said (at [96]-[97]): "Hartnett Lawyers have sought leave to withdraw as the solicitor on the record for Gwendoline's estate. Mr Hartnett perceives himself to be in a position of conflict of interest with Gwendoline's estate, as he is contesting the repayment of fees to its former client. If he is allowed to withdraw Anthony seeks to join him as a party to those proceedings. Mr Hartnett has long since ceased to act for Gwendoline's estate. At the latest from the time of her death in 2018 he has not received any instructions from her and there is no evidence that anyone on behalf of her estate has instructed him to take any positive steps. Mr Hartnett's past actions as the solicitor on the record for Gwendoline and an officer of the Court who was active on the record until late 2016, is still amenable to the Court's supervision. He will not be given leave to withdraw and will remain on the record to enable the Court to exercise that supervisory jurisdiction in respect of his past conduct of the Possession proceedings. It will not be necessary to join him as a party. If he perceives his position on the record were to become embarrassing then he can renew this application." (emphasis added) 1. In an earlier part of his judgment, under the heading "The Court's Powers to Review the Mortgagee's Legal Costs", Slattery J said (at [31]-[40]): "Hartnett Lawyers argue that the Court's powers to review the mortgagee's legal and other costs are limited. Hartnett Lawyers submits that the costs agreement made between Gwendoline and the firm is binding and that whatever orders the Court makes to reduce costs as between Gwendoline's estate and Mabel's estate, the firm is entitled to retain all the costs it has been paid by Gwendoline's estate. Hartnett Lawyers say the firm is not required to refund the difference between any revised costs figure determined between mortgagor and mortgagee and the costs Hartnett Lawyers have been paid: called in these reasons, "the costs differential". This submission is not persuasive. It requires a short analysis of the Court's powers in this situation and ... the appropriate legal standard that the Court uses to allow or disallow the legal costs of mortgagees such as Gwendoline. First, the Court retains jurisdiction to fix costs as between mortgagee and mortgagor notwithstanding the costs provision in a mortgage. The Court's discretion to fix costs is not ousted by the mortgage costs indemnity provisions: Bank of Western Australia Ltd v Marsh [2000] WASC 2008 at [4], (per Sanderson M) and Watson Wyatt Superannuation Pty Ltd v Oberlechner & 2 ors (2008) ASC 155-091; [2008] NSWSC 272 at [36] (per Brereton J, as his Honour then was). There are multiple sources of authority identifying the Court's power to adjust the costs as between the mortgagor and the mortgagee, and to have them quantified independently. It is sufficient to refer to UCPR, r 42.25, which expressly authorises the Court not to allow payment to a mortgagee, who has acted unreasonably. The ordinary equitable principal [sic] is that the mortgagee would be unable to recover costs which are the result of misconduct or where the mortgagee has acted unreasonably: Road Chalets Pty Ltd v Thornton Motors Pty Ltd (1986) 47 SASR 532. There is nothing in the indemnity clause in the mortgage in this case that would displace this ordinary rule. Anthony's submissions point to the Court's inherent supervisory jurisdiction over legal practitioners as officers of the Court as a basis to order Hartnett Lawyers to pay any costs differential to Anthony: Council of the NSW Bar Association v Siggins [2021] NSWCA 40 at [9]. These submissions are correct. The inherent jurisdiction and powers of the Supreme Court in respect of the control and discipline of Australian lawyers are not affected by anything in the Legal Profession Uniform Law: Uniform Law 2014 (NSW) ("LPUL") cf LPUL, s 264 (1)). That supervisory jurisdiction, together with Civil Procedure Act, s 99 would, if required, be quite a sufficient basis for the Court to intervene in this case to order Hartnett Lawyers to pay any costs differential to Anthony. These reasons will briefly examine the supervisory jurisdiction to order the payment of any costs differential and then the co-ordinate jurisdiction under Civil Procedure Act, s 99 and other bases for the Court's intervention. The Court's discussions of this subject in these reasons does not indicate a pre-conceived view that either the Court's inherent supervisory jurisdiction or its jurisdiction conferred under Civil Procedure Act, s 99 should be engaged in this case. Rather, the jurisdiction is identified to correct a submission made on behalf of Hartnett Lawyers that a Court ordered costs assessment is likely to be futile. Hartnett Lawyers submit that in a costs assessment initiated by a non-associated third party payer, such as Anthony, the solicitor is not affected by the outcome, because the solicitor can deploy in the solicitor's defence LPA 2004, s 350(8)(d) that "the assessment of the costs payable by the non-associated third party payer does not affect the amount of legal costs payable by the client to the law practice". Whilst LPA 2004, s 350 preserves the incidence of legal costs as between the law practice and the client, notwithstanding success on a costs assessment by the non-associated third party payer, the Court's supervisory jurisdiction transcends that simple case. And it is hardly surprising that s 350(8)(d) would not provide a complete answer to a mortgagor's complaint of alleged excessive mortgaged fees because the third party payment provisions are designed for consumer protection where someone other than the client is responsible for paying legal fees: Boyce v McIntyre (2009) 78 NSWLR 152; [2009] NSWCA 185. The Court has not decided whether to exercise its supervisory jurisdiction in this case and could not do so on the existing material. Hartnett Lawyers decided to sit out Mr Wall's cost assessment, because it was without instructions and no indication had been given to the firm that the Court's supervisory jurisdiction might be engaged. It would be unfair now for the Court to act upon Mr Wall's cost assessment against Hartnett Lawyers, as is urged by Anthony, for that reason alone. It would also be unfair because, as Mr Wall himself acknowledged, the limited material given to Mr Wall makes his conclusions somewhat speculative and based more on the ordinary case rather than on specific evidence of what Hartnett Lawyers did in this case." (emphasis added) 1. At [43]-[44], his Honour then continued: "The Court's supervisory jurisdiction includes the Court's capacity to scrutinise the conduct of solicitors to ensure that they do not charge exorbitant fees or otherwise take improper advantage of their clients: NSW Crime Commissioner v Fleming (1991) 24 NSWLR 116; (1991) 54 A Crim R 401; [1992] ANZ ConvR 344 at [123] (per Gleeson CJ) recently affirmed by the Court of Appeal in Atanaskovic Hartnell v Birketu Pty Ltd at [145]. And such general jurisdiction is exercisable against an Australian lawyer from interstate providing legal services in NSW: Council of the NSW Bar Association v Siggins. Anthony has in general terms hinted at the deployment of this jurisdiction. But that is unsatisfactory. Engaging the jurisdiction requires the identification of particular impugned conduct, fees and charges. Some rigor needs to be brought into these proceedings. If Anthony seeks to engage this jurisdiction he will need to identify with precision the professional costs under challenge and the conduct of Hartnett Lawyers which he seeks to impugn." 1. Slattery J made extensive orders including for the filing of a schedule setting out the fees or charges alleged to have been unreasonably or improperly incurred, or which were not incurred "pursuant to the mortgage", together with contentions in support of that position, and the filing of a response to the schedule. Similar orders were made for a schedule in relation to post 14 November 2016 costs, that being the date on which sale of the property settled. His Honour also listed both sets of proceedings for further directions in November 2021. 2. On 11 November 2021, Slattery J made the following further set of directions: "1 Anthony Robert Deakin Bell (Bell) is to file and serve a points of claim document in 2014/354291 (the Possession Proceedings) identifying how he says the Supreme Court's inherent, supervisory jurisdiction and/or section 99 Civil Procedure Act 2005 (NSW) is [or] are enlivened on [or] before 4.00 pm on 17 November 2021. 2 Beau Timothy John Hartnett (Hartnett), by 1 December 2021, is to: a. file and serve further evidence of Bell's alleged conduct and the alleged conduct of its solicitors in the possession proceedings and which he alleges contributed to Mrs Deakin-Bell's legal costs occasioned as a consequence of the Plaintiff's alleged frustration of the process and the incurrence of significant delays throughout; b. file and serve any reply to Bell's points of claim referred to in order 1 above; and c. provide a list, or schedule in reply to Bell's list or schedule identifying their justification for the fees, charges or disbursements, or classes of fees charges or disbursements from Hartnett Lawyer's post-14 November 2016 costs that are challenged by Anthony, or admitting that such fees, charges or disbursements, or classes of fees charges or disbursements were improperly or unreasonably incurred, or were not incurred pursuant to the mortgage. 3 Mr Hartnett to file a Points of Defence on or before 8 December 2021. 4 Mr Bell is to file and serve further submissions on or before 8 December 2021. 5 Mr Hartnett is to file and serve further submissions on or before 15 December 2021." 1. On 26 October 2021, an Amended Statement of Claim was filed seeking: "1A Order that the defendant pay the difference between (i) the amount of costs fixed by the Court payable by Anthony Robert Deakin-Bell to Gwendoline Deakin Bell pursuant to ... Clause 5 of Memorandum Q860000 to the Mortgage and (ii) $288,601.03 to the plaintiff. 2 Order that the defendant pay the amount of $238,164.47 to the plaintiff. 2A Declare that the plaintiff has an equity of redemption in the proceeds of sale of Lot 13 in Deposited Plan 242676 known as 4 Apsley Street West Ballina, New South Wales 2478 (the Property). 2B Declare that the plaintiff's equity of redemption ranks in priority over any equitable lien held by the defendant over the proceeds of sale of the Property. 3 Equitable compensation. 5 Interest 6 Costs 7 Such further and other orders as are appropriate in the circumstances of the case." 1. On 19 November 2021, the Respondent filed a "Points of Claim" document in both the Equity and Possession Proceedings. Paragraphs 1 and 2 of the Relief Claimed in the Points of Claim document were as follows: "Order that the Supreme Court of New South Wales' inherent, supervisory jurisdiction (the Supervisory Jurisdiction) is exercisable against Beau Timothy John Hartnett (Hartnett) in respect of legal services he provided in New South Wales Supreme Court proceedings number 2014/354291 (the Possession Proceedings). Order that the Supervisory Jurisdiction be exercised to reduce Hartnett's fees for acting in the Possession Proceedings on the basis that they were unreasonable and/or improper and/or not related to the mortgage the subject of the Possession Proceedings." 1. Paragraphs 1-4 of the Points of Claim under the heading The Supervisory Jurisdiction were as follows (omitting particulars): "1 The Supervisory Jurisdiction is exercisable against an Australian Lawyer from interstate providing legal services in New South Wales. 2 The Supervisory Jurisdiction is enlivened because: a. Hartnett is an Australian Lawyer; b. Hartnett provided legal services in New South Wales; c. Hartnett was the solicitor on record in the Possession Proceedings; d. Hartnett's client had a costs order made in her favour; and e. Hartnett deducted what he says were his fees payable by Gwendoline from the surplus of the sale of the Property apparently in accordance with the order made by his Honour Davies J in the Possession Proceedings. 3 The Supervisory Jurisdiction extends to the Court scrutinising and fixing the legal fees of a practitioner to ensure that the Australian Lawyer does not charge exorbitant fees. 4 The Supervisory Jurisdiction ought to limit the fees payable to Hartnett in the Possession Proceedings on the basis that they are exorbitant, excessive, improperly or unreasonably incurred or do not relate to the Mortgage because: a. Hartnett charged approximately $36,201 to file and serve the Statement of Claim, an amount approximately 27 times greater than the $1,321 allowed by Schedule 2 of the Legal Profession Regulation 2005 (NSW) (the LPR Schedule); b. Hartnett charged approximately $23,031.53 to apply for Default Judgment, an amount approximately 11 times greater than the $2,105 allowed by the LPR Schedule; c. Hartnett charged approximately $95,000.00 to request that the plaintiff obtain a grant of probate, to amend the Statement of Claim to name a new defendant, and to obtain default judgment; d. Hartnett charged approximately $95,000 for correcting the Statement of Claim to name the right defendant in the Possession Proceedings, in circumstances where the error being corrected was an error made by the defendant; e. Hartnett charged approximately $59,484.00 for possession and a conveyance after the Davies J Judgment; f. Hartnett charged Gwendoline, and thereby taking from the Mortgagee Sale in Possession Surplus, for taking instructions and preparing Gwendoline's will; g. Hartnett charged Gwendoline, and thereby taking from the Mortgagee Sale in Possession Surplus, fees for reporting Ian Lord to the Office of the Legal Services Commissioner; h. Hartnett charged fees in accordance with a costs agreement that was void; i. Hartnett charged an uplift fee of 25% in circumstances where the Costs Agreement was not a conditional costs agreement by virtue of the fact that Hartnett's fees were not subject to the successful outcome of the litigation; j. Hartnett charged care and consideration at all, but further, Hartnett charged 25% for care and consideration in circumstances where: i. there was nothing complex, difficult or novel about the proceedings; ii. the amount of the claim was only $30,000, some $14,000 less than the care and consideration fees charged; iii. there was minimal specialised skill, knowledge or expertise required given the simplicity of the matter; iv. there were minimal important documents involved in the preparation of the undefended hearings, being the Mortgage and Gwendoline's Will; v. the time needed ought to have been minimal given the proceedings were simple and undefended; vi. there were no unusual questions of law and fact that required research; vii. there was no urgency to the proceedings, as was evidenced by the fact that there was approximately 15 months between the first rejected Default Judgment application in January 2015 and the Default Judgment application filed in April 2016; and viii. Hartnett overcharged as per Annexure A to the plaintiff's Annexure A to his Amended Statement of Claim filed 26 October 2021." 1. On 1 December 2021, the Appellant filed a "Reply to Points of Claim" in which he acknowledged the supervisory jurisdiction of the Supreme Court of New South Wales and that he was subject to it as an officer of the Supreme Court of New South Wales, expressly accepting that he was such an officer when appearing as an interstate solicitor on the record in New South Wales. 2. Both the Points of Claim and the Reply to Points of Claim identified the case numbers for the Possession Proceedings and the Equity Proceedings. Consistent with this, on 16 December 2021, Slattery J ordered that the "Points of Claim, Points of Defence and Points of Reply in these proceedings shall be taken to be pleadings in both the Possession proceedings (2014/354291) and the Equity proceedings (2020/254590)" (emphasis added). 3. On 7 December 2021, the Appellant filed a Notice of Motion seeking to have both the Equity Proceedings and the Possession Proceedings removed to this Court. That application came on for hearing on 22 March 2022 before Basten JA. The application was made on the basis that the Court's disciplinary jurisdiction may have been invoked: Bell v Hartnett [2022] NSWCA 42 (the Basten JA judgment). The notice of motion was dismissed. 4. In dismissing the Notice of Motion, Basten JA noted (at [13]-[14]): "It appears that a straightforward claim that Mr Hartnett appropriated moneys from his trust account without authority or in an excessive amount has been complicated by successive attempts to plead the claim on different bases. The exercise of the supervisory jurisdiction, identified by Lord Wright in Myers v Elman, is a jurisdiction to order "costs against a legal practitioner" who has misconducted himself or herself in the course of proceedings. So far as appears from the pleadings, with the possible exception of the incidental claim in the points of claim, that has nothing to do with this case: this is not an action requiring that the practitioner pay another party's costs. Rather, it is an action that Mr Hartnett disgorge an amount in excess of the costs to which he was entitled. Similarly, s 99 of the Civil Procedure Act confers on the court (including any judge of the court in a proceeding) power to deprive a practitioner of costs to which he or she might otherwise be entitled, and to order a practitioner to pay costs. The relevance of that power to this case is obscure. The plaintiff's argument appears to be that Mr Hartnett was not entitled to the moneys he retained; not that he should be deprived of moneys to which he was entitled. However, supposing it did have relevance, it is nevertheless a power which can be exercised by a judge in any court to which s 99 of the Civil Procedure Act applies. There are no relevant exclusions in respect of a judge of the Supreme Court under Sch 1 to the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"). So far as the general law power is concerned, as explained by White JA in Newell; Muriniti v De Costi, and assumed by other members of the Court, it is a power to be exercised by the trial judge." Proceedings at first instance 1. Both sets of proceedings came on for hearing before the primary judge and were heard on 24-25 August 2022. Some six days prior to the trial, the parties filed a Statement of Real Issues in Dispute. Issue 7, under the heading "The Equity Proceedings", was stated to be "Whether Mr Hartnett is required to disgorge any excessively charged fees?". That was plainly a reference to the relief sought by the Respondent in the Court's inherent supervisory jurisdiction. 2. The position was somewhat confused by a set of supplementary submissions of the Respondent dated 24 August 2022, forwarded to the primary judge some time after Court on that day. In those submissions, the Respondent submitted that the disgorgement could occur "in either the Possession Proceedings in the Court's inherent jurisdiction or it can be done by way of the restitution claim in the Equity Proceedings." It was upon this statement in the Respondent's supplementary submissions that Ms Whittaker SC, who, together with Ms I King, appeared for the Appellant, rested much of her argument on appeal. 3. Peden J delivered judgment on 8 September 2022: Bell v Hartnett Lawyers (No 3) [2022] NSWSC 1204. Her Honour ordered that: "1. In the Possession Proceedings (2014/354291): a. The Court notes the Certificate of Costs Assessment dated 24 May 2016, quantifying costs for the purposes of Davies J's Order 5.2 up to 12 February 2018 is $37,345.50. b. Order that the money in the sum of $33,792.46 held in Court be released to Mr Bell forthwith. 2. In the Equity Proceedings (2020/254590): a. Order that the defendant pay to the plaintiff: i. the sum of $251,255.53; and ii. interest on that sum in Order (2)(a)(ii) in the amount of $50,489.98; and iii. interest on the sum of $33,792.46 in the amount of $9610.96. b. Order that the defendant pay Mr Bell's costs on an indemnity basis." 1. The Appellant did not go into evidence in the proceedings before Peden J. 2. Her Honour considered the inherent jurisdiction of the Court at PJ [99]-[114]. She noted that it was not disputed "that Gwendoline was entitled to retain only those "reasonable" costs which were incurred in the enforcement of the mortgage, including obtaining possession and the proceeds of the sale", referring to Elder's Trustee & Executor Co Ltd v Eagle Star Nominees Ltd (1986) 4 BPR 9205 at 9209 (McLelland J) and Micarone v Perpetual Trustees Australia Ltd (No 2) [1999] SASC 533 at [32]-[34]. 3. Her Honour also noted that it was accepted by the Appellant as a proposition of law that Gwendoline, as mortgagee, was required to hold the residue of the proceeds of sale on trust for the Respondent, referring to Rajah Kishendatt Ram v Rajah Mumtaz Ali Khan (1879) LR 6 Ind App 145 at 160 (PC), Coroneo v Australian Provincial Assurance Association Ltd (1935) 35 SR (NSW) 391 at 394-395 (Jordan CJ), Weld-Blundell v Synott [1940] 2 KB 107 at 115 (Asquith J) and Adams v Bank of New South Wales [1984] 1 NSWLR 285 at 299 (Hutley JA). 4. The primary judge reviewed the relevant authorities, including Electrical Trades Union v Tarlo [1964] 1 Ch 720; [1964] Ch 20 (Electrical Trades Union), Atanaskovic & Ors v Birketu Pty Ltd – Supervisory Jurisdiction [2020] NSWSC 573 (Atanaskovic First Instance), Atanaskovic Hartnell v Birketu Pty Ltd (2021) 105 NSWLR 542; [2021] NSWCA 201 (Atanaskovic), Woolf v Snipe (1933) 48 CLR 677; [1933] HCA 5 (Woolf), Kowalski v Cole [2017] SASCFC 23 (Kowalski), Harrison v Tew [1990] 2 AC 523; [1990] 1 All ER 321 (Harrison) and Kelly v Willmott Forests Ltd (in liquidation) (No 4) [2016] FCA 323; (2016) 335 ALR 439 and noted what Slattery J had said at [34]-[36] of the second Slattery J judgment: see [85] above. 5. The primary judge further noted, at PJ [111], that a complicating factor in this case was that the Respondent was not the client of the Appellant, which was a distinguishing feature of this case from the prior authority to which her Honour had referred. Her Honour went on to hold that this difference was not "an impediment" to the exercise of the Court's jurisdiction, and, in any event, had not been raised by the Appellant. The primary judge relied on the remarks of Hammerschlag J in Atanaskovic First Instance at [80]-[81] to the effect that in exercising the Court's supervisory jurisdiction, the Court does not engage in a fixed determination of legal rights "but determines whether one of its officers should be held to ethical and honourable behaviour". Consistent with this, Hammerschlag J had observed that the Court was not limited by technicalities. 6. The primary judge then turned to determining quantum. Her Honour first held that no allowance should be made for future costs of the mortgagee as there was no entitlement for Gwendoline to do so. 7. The primary judge noted that, as a consequence of the exchange of Points of Claim and Reply, the Appellant had conceded a lack of entitlement to charges amounting to $13,316 relating to the preparation of file notes, administrative work, research or "what appears to be research" and "file review". 8. The primary judge said that "Mr Hartnett did not submit that I was required to deal with each line item. I accept counsel for Mr Bell's submissions that a "broad brush" approach can be taken to the assessment of Mr Hartnett's fees": PJ [124]. Her Honour then gave examples of what she considered to be "exorbitant overcharging" which she said sufficiently demonstrated the reasons why the Court ought to exercise its supervisory jurisdiction in the matter. Her Honour's examples were as follows: "(1) Mr Hartnett charged approximately $36,201 to file and serve the Statement of Claim for possession, an amount approximately 27 times greater than the $1,321 allowed by Schedule 2 of the Legal Profession Regulation 2005 (NSW) (the LPR Schedule). The Statement of Claim was 4 pages long and without complexity. Mr Hartnett provided no justification in his response for this sum. (2) Mr Hartnett charged approximately $23,031.53 to apply for Default Judgment, an amount approximately 11 times greater than the $2,105 allowed by the LPR Schedule. Many time entries concern "internal meetings" and "internal emails", "perusing memo regarding matter status". The purpose of these charges is not disclosed and there is no evidence of how such tasks progressed the simple uncontested matter. Mr Hartnett's response was simply that his costs agreement provided for internal communications to be charged. (3) Mr Hartnett charged approximately $95,000.00 over a fifteen-month period to: (a) request that the plaintiff obtain a grant of probate; (b) to amend the Statement of Claim to name the NSW Trustee and Guardian, instead of Mr Bell, who did not hold a grant of probate; (c) to enter consent judgment. (4) It is not clear why Mr Hartnett took such an interest in the grant of probate for Mabel's estate, when his client Gwendoline simply wanted to enforce her security in the $30,000 mortgage. It did not matter to her whether Mr Bell or the NSW Trustee and Guardian was the appropriate defendant. I do not consider Mr Hartnett's persistent challenges to Mr Bell's grant of probate fell within the operation of the mortgage as a necessary consequence of the mortgagor's default or its preservation. (5) Mr Hartnett charged approximately $59,484.00 for possession and a conveyance after Davies J's Judgment in April 2016. There is no explanation about how those uncontested activities could attract such a fee. (6) Mr Hartnett included in his schedule of fees to be paid from the sale proceeds invoices for taking instructions and preparing Gwendoline's will in 2014. Mr Hartnett provided no explanation or concession. (7) Mr Hartnett charged "care and consideration" of 25%, being approximately $44,000, where I have not seen anything that demonstrates the matter of enforcing a $30,000 mortgage was complex or difficult and the proceedings were undefended. Mr Hartnett's response to this complaint was simply that the extra 25% was payable according to his costs agreement." 1. In then determining the amount of money payable, the primary judge relied on the costs assessment. As noted above, that assessment fixed Gwendoline's entitlement to costs at $37,345.00. Gwendoline had authorised the transfer of $288,601.03 to the Appellant. The difference between those two amounts, being $251,255.53, was described below as the "costs differential", although the Amended Statement of Claim quantified this amount as $238,164.47, as the Respondent had quantified the Appellant's allowable costs at a higher amount than Mr Wall (namely, $50,436.56). 2. The Appellant had contended that he was not bound by the Wall Assessment, as he was not a party to it, and further contended that his costs agreement entitled him to charge the amounts which he did charge. 3. The primary judge awarded the Respondent the full costs differential, holding, at [129], that: "As Mr Bell was only obliged to pay $37,345.50 towards Gwendoline's legal costs pursuant to Justice Davies' order, I consider the inherent jurisdiction is engaged to do justice between the parties and Mr Hartnett must pay the sum he was paid over and above that sum from the proceeds of sale to Mr Bell." 1. The Appellant further submitted that the matter should be dealt with by way of third-party costs assessment, which had been agreed by the parties in 2021, but rejected by Slattery J in favour of the Court's assessment of costs: second Slattery J judgment at [79]. The primary judge rejected the Appellant's reanimation of this submission as inconsistent with ss 56-60 of the Civil Procedure Act 2005 (NSW) following a two-day hearing: PJ [122]. 2. In respect of the issue of competing equities, which the primary judge acknowledged was strictly unnecessary to address, the Appellant had pleaded a "fruits of litigation lien" or a possessory lien over the proceeds of sale, and argued that this should be given priority over the Respondent's equity of redemption. The primary judge declined to do so on the basis that it would be "unjust in the circumstances where [the Appellant] has charged his client more than is reasonable, and persistently avoided and obfuscated in relation to Mr Bell's attempts to obtain information for any costs assessment process": PJ [135]. 3. Further, the Respondent had submitted that the Appellant had been unjustly enriched so as to ground a claim for money had and received, relying on the decision of the High Court in Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498; [2012] HCA 7 at [30]. The primary judge noted that it was not clear which category of unjust factor applied in this case, and therefore declined to uphold the claim for money had and received. No cross-appeal was brought by the Respondent against this conclusion. Notice of Appeal 1. By Further Amended Notice of Appeal dated 7 March 2023, the Appellant contended that the primary judge erred in finding that the Court's jurisdiction (within the Court's inherent power) extended to ordering him to make any payment to the Respondent. Second, the Appellant contended that, even if there was jurisdiction, the primary judge erred in exercising her discretion to make the orders she did. It was also contended that the making of the orders involved a denial of procedural fairness. Third, the Appellant contended that if the discretion was not wrongly exercised, the quantum was incorrectly assessed, in essence because the primary judge should not have relied on the Wall Assessment to which the Appellant was not a party. Fourth, the Appellant contended that the primary judge erred in finding that the costs of the costs assessment did not fall within the indemnity in the registered mortgage, and that the primary judge ought to have allowed for future costs. Grounds 1 and 2 1. These grounds can conveniently be considered together. The first ground of appeal was that. "The primary judge erred in holding that the supervisory jurisdiction within the inherent power of the Court extended to empowering the Court to order the appellant, as the interstate solicitor for the mortgagee, to pay to the mortgagor an amount which represented the difference between the undisputed amount paid by the mortgagee to the appellant and the amount of costs assessed between the mortgagee and mortgagor in separate proceedings (being Supreme Court Common Law proceedings 2014/354291 (the Possession Proceedings))." It was made plain in the course of argument that the Appellant did not place any reliance on the fact that he was an interstate solicitor. That concession was well made in light of this Court's decision in Council of New South Wales Bar Association v Siggins [2021] NSWCA 40 at [137]-[138]. This ground thus reduced to an argument that the inherent jurisdiction of the Court did not extend to support the orders made by the primary judge. 1. The second ground of appeal was that, if the supervisory jurisdiction extended to cover exorbitant charging by a solicitor, the primary judge erred in exercising that discretion on the basis that it was not necessary to do so in the interests of justice. This was said to be for reasons including: "a. The respondent did not make out any cause of action against the appellant in the proceedings below requiring the payment of any money to it. b. The respondent did not join the mortgagee to the proceedings below. c. The mortgagee directed the payment of the appellant's invoices. d. The respondent did not avail itself of the benefit of the non-associated third party payer provisions of s 335 of the Legal Profession Act 2007 (QLD). e. The costs assessed in the Possession Proceedings were not binding on the appellant. f. The costs assessed in the Possession Proceedings do not quantify the indemnity granted by the mortgagor to the mortgagee under clause 5 of registered memorandum Q860000 (the Indemnity). g. The primary judge's approach to the analysis of the appellant's charging did not accord with the principles underpinning a "broad brush" assessment such that the judgment does not reveal a sufficient basis for the exercise of the Court's supervisory jurisdiction. h. The parties had previously agreed that the matter could proceed by way of a third party payer costs assessment. i. A third party payer costs assessment remains available to the respondent. j. the respondent did not seek any relief in the Equity Proceeding based on the exercise of the Court's inherent jurisdiction to compel payment to him by the appellant and nor did the respondent open his case on that basis" 1. The Appellant's submissions with respect to Grounds 1 and 2 were grouped together. In effect, the Appellant contended that the invocation of the inherent power of the Court was not necessary to do justice, and thus should not have been invoked. While the Appellant accepted that the Court's inherent jurisdiction is not limited by technicalities or to defined or closed categories, the Appellant also submitted that any order in the inherent jurisdiction must still be "necessary" in the relevant sense. In other words, it was not enough that such an order be available to the Court; it must be necessary to do justice between the parties, and that it was not necessary in the present case because of the availability of a third party payer costs assessment process under LP Act, albeit that an extension of time would be required to do so. (It was only in the proceedings on appeal that the Appellant indicated that he would not oppose an extension of time and agree to be bound by any assessment, subject to review rights.) 2. The Appellant also contended that, had the mortgagee been joined to the Equity Proceedings, an account or tracing could have been pleaded, as could a claim against the mortgagee as trustee. The Appellant submitted that these would have been more conventional ways of resolving the dispute and also highlighted the "unnecessariness" of enlivening the Court's inherent jurisdiction. 3. In the course of oral submissions, Ms Whittaker sought to make a great deal of the fact that the Appellant was never a party to the Possession Proceedings or the Wall Assessment conducted in respect to those proceedings. She also contended that the only cause of action pleaded in the Equity Proceedings was one for restitution, and pointed out that that claim had failed. Ultimately she sought leave to amend her Notice of Appeal to add a complaint that "the respondent did not seek any relief in the Equity Proceedings based on the exercise of the Court's inherent jurisdiction to compel payment to him by the appellant and nor did the respondent open his case on this basis". This was said to amount to a denial of procedural fairness. 4. The Appellant also contended that the use of the inherent jurisdiction to order payment of money in the circumstances of the current case was without precedent. 5. The Respondent, in defending the decision of the primary judge, denied that her Honour's invocation of the Court's inherent supervisory jurisdiction was heterodox and submitted that, even if the primary judgment involved an extension of the Court's supervisory jurisdiction, such an extension was warranted and appropriate as a "logical application of established principle". The Respondent relied on various authorities cited by the primary judge, and also relied on the following passage from GE Dal Pont in Law of Costs (5th Ed, 2021, LexisNexis) at par 15.52: "Whatever the basis of taxation, both at general law and pursuant to the court rules, the court or taxing officer will not allow costs that are unreasonable in nature or amount unless, in the case of solicitor and own client taxation, the client has agreed to the incurrence of these costs after being fully advised in this respect. The issue thus arises as to whether, by the terms of a mortgage instrument, the mortgagee is able to throw upon the mortgagor costs that are unreasonable in nature or amount. The answer to this question has uniformly been in the negative, whether by a process of construction or on grounds of public policy." 1. The Respondent also referred to the decision of Lord Justice Scott, writing for the Court of Appeal for England and Wales, in Gomba Holdings (UK) Ltd v Minories Finance Ltd (No. 2) [1993] Ch 171 (Gomba) in which his Honour stated at 187-188:p "It is difficult to contemplate that a mortgage deed would ever be construed as entitling a mortgagee to charge against the mortgaged property, or to require the mortgagor to pay, all costs charges and expenses even if improperly or unreasonably incurred or improper or unreasonable in amount unless the mortgage deed had expressly in terms so provided. But if a mortgage deed did expressly so provide, the enforceability of such a provision would… be open to serious question on public policy grounds." Gomba was referred to with approval by this Court in Kyabram Property Investments Pty Ltd v Murray [2005] NSWCA 87 at [14]. 1. The Respondent also took issue with the Appellant's claim that the argument based on the Court's inherent supervisory jurisdiction had not been run in the Equity Proceedings, with a consequent denial of procedural fairness to the Appellant. The Respondent took the Court through much of the complex procedural history of the dispute which it has regrettably been necessary to go into in such detail in these reasons to rebut that suggestion. Consideration 1. Several statements of authority may be noted at the outset of the consideration in relation to the Court's inherent and supervisory jurisdiction: 1. The Court's inherent jurisdiction "can be exercised in any circumstances where the requirements of justice demand it and thus cannot be restricted to closed and defined categories of cases": McGuirk v University of New South Wales [2010] NSWCA 104 at [178] (McGuirk); Reid v Howard (1995) 184 CLR 1 at 16; [1995] HCA 40 (Reid); Tringali v Stewardson Stubbs & Collett Ltd (1966) 66 SR (NSW) 335 at 344; [1966] 1 NSWR 354 at 360-361; 2. "The juridical basis of [the inherent jurisdiction] is therefore the authority of the judiciary to uphold, to protect and to fulfil the judicial function of administering justice according to law in a regular, orderly and effective manner": IH Jacob, "The Inherent Jurisdiction of the Court" (1970) 23 Current Legal Problems 23 at 27-28, as cited in McGuirk at [185]; 3. "The inherent power of a court to control and supervise proceedings includes the power to take appropriate action to prevent injustice": Hamilton v Oades (1989) 166 CLR 486 at 502; [1989] HCA 21; 4. The inherent jurisdiction "is not confined to a situation in which there is no statute or rule of court that could possibly apply to what is to be done in that regard. The true rule is that a court may exercise its inherent or implied powers in a particular case, even in respect of matters that are regulated by a provision of a statute or rules of court, so long as it can do so without contravening any such provision": Landsal Pty Ltd (in liq) v REI Building Society (1993) 41 FCR 421 at 427; [1993] FCA 171 (Landsal) (with added emphasis), citing Taylor v Attorney-General [1975] 2 NZLR 675 at 680, 687-688 and 692-693; 5. The Court can do whatever "may be necessary to prevent any injustice occurring with respect to matters which come within its cognizance": Ex parte Farren; Re Austin (1960) 77 WN (NSW) 743 at 744, cited in Dwyer v National Companies & Securities Commission (1988) 15 NSWLR 285 at 287; 6. The inherent jurisdiction of the Court overlaps with, but is not displaced by, s 23 of the Supreme Court Act 1970 (NSW): McGuirk at [177]; 7. On the other hand, "the inherent power and the jurisdiction conferred by s 23 of the Supreme Court Act are to be exercised only as necessary for the administration of justice", and "the power is not at large": Reid at 16-17; 8. The inherent jurisdiction cannot authorise the making of orders excusing compliance with statutory obligations or preventing the exercise of authority deriving from statute: Reid at 16; Commonwealth Trading Bank of Australia v Inglis (1974) 131 CLR 311 at 318-319; [1974] HCA 17; Doyle v The Commonwealth (1985) 156 CLR 510 at 518; [1985] HCA 46; 9. The inherent jurisdiction does not extend to making orders simply because the Court believes it would be fair to do so: see, for instance, Moore & Anor v Assignment Courier Ltd [1977] 2 All ER 842 at 846; see also The Siskina [1979] AC 210 at 262; 10. The Court has an inherent or general jurisdiction to regulate the costs, charges and disbursements claimed by officers of the Court, and to prevent exorbitant demands: Woolf at 678; 11. The Court may exercise its inherent jurisdiction in relation to a solicitor's costs "in the way it might think fit": Storer & Co v Johnson (1890) 15 App Cas 203 at 206. 12. This well-established supervisory jurisdiction is designed to impose on solicitors higher standards than the law applies generally. The jurisdiction is disciplinary and compensatory. It is not exercised for the purposes of enforcing legal rights, but for the purpose of ensuring honourable conduct on the part of the Court's own officers. It is distinct from any legal rights or remedies of the parties, it is unaffected by anything which affects the strict legal rights of the parties, and it is not limited to technical principles: Atanaskovic First Instance at [29]-[30], approved in Atanaskovic at [127]; 13. Statutory provisions dealing with the issue of lawyers' costs are complementary to this inherent jurisdiction, and do not oust it: Woolf at 678; Pryles & Defteros (a firm) v Green [1999] 20 WAR 541; [1999] WASC 34 at [24] (Pryles); see also Re Jabe; Kennedy v Schwarcz [2021] VSC 106 at [46] (Re Jabe) and s 264 of the Legal Profession Uniform Law 2014 (NSW). The two jurisdictions are enlivened by different acts and must be analysed separately: Whyked Pty Limited v Yahoo!7 Pty Limited [2008] NSWSC 477 at [18]; 14. Further, "there is an overlap between the Court's general jurisdiction to review solicitors' remuneration and the doctrines of undue influence, unconscionable transaction and fiduciary conflict as they apply to solicitors and clients": Malouf v Constantinou [2017] NSWSC 923 at [136]; see also Kowalski at [25]; 15. More specifically, "there remains an inherent jurisdiction of the Court to make orders that a legal representative personally pay the opposing party's costs directly for unnecessary or wasted costs, that power arising out of the Court's supervisory jurisdiction with respect to legal practitioners admitted by the Court": NHB Enterprises Pty Ltd v Corry (No 5) [2020] NSWSC 1838 at [44], citing Re Felicity; FM v Secretary, Department of Family and Community Services (No 4) [2015] NSWCA 19 at [20]; 16. The purpose of the jurisdiction of the Court with respect to costs charged by its officers is "to secure that the solicitor, as an officer of the court, is remunerated properly, and no more, for work he does as a solicitor" (emphasis added): Electrical Trades Union at 734; see also Re Jabe at [44]; 17. The exercise of supervisory jurisdiction over officers of the Court is not governed by "strict legal rights and duties or matters of technicality." Rather, "in exercising supervisory jurisdiction, the Court does not engage in a final determination of legal rights but determines whether one of its officers should be held to ethical and honourable behaviour": Atanaskovic First Instance at [80]-[81]; 18. The jurisdiction to scrutinise the remuneration of officers of the Court is not limited to cases of exorbitant overcharging: Atanaskovic at [145]. Nor is it limited by any contractual arrangements made between the parties: Pryles at [24], which will engender "jealous" scrutiny by a Court: Clare v Joseph [1907] 2 KB 369 at 376; 19. The inherent jurisdiction extends to making orders for solicitors to repay an amount charged to their own client: see, e.g., Harrison at 538. 1. In his well-known article "The Inherent Jurisdiction of the Court" (1983) 57(8) Australian Law Journal 449 at 451, Mr Keith Mason, as the subsequent President of the Court of Appeal then was, pointed out that (omitting footnotes): "The control over the conduct of proceedings extends, at least in the Supreme Court, to dealing with practitioners for professional misconduct, negligence or default in the conduct of cases in the Court. This jurisdiction is both punitive and compensatory in that the Court may strike off or suspend the legal practitioner, or order him to pay the costs of either his own client or the opposite party. Similarly, a court's inherent jurisdiction over its own officers extends to ordering them to deliver a bill of costs and tax it." 1. One of the cases cited in support of the penultimate sentence in this extract was Myers v Elman [1940] AC 282 (Myers). In Myers, a solicitor, who had acted for the defendants in the underlying proceeding, was ordered to pay costs of the plaintiff as the solicitor, acting through his clerk, had allowed defences which he knew to be false to be presented to the Court. 2. The Appellant placed particular reliance on this Court's decision in McGuirk and, in particular, the observation by Sackville AJA at [187], with whom Young JA agreed, to the effect that: "…where the rules of court contain provisions ... which confer broad powers on the court to give directions or make orders for the conduct of proceedings, there is no good reason in policy or practice to extend the inherent jurisdiction of the court beyond its established scope. To put the matter another way, it is not necessary to extend the inherent jurisdiction of the court beyond its established parameters where the existing powers of the court are adequate to ensure that the interests of justice are served." On the facts of McGuirk, the alternative powers the Court had in mind were the powers to punish for contempt of Court. 1. It is important to bear in mind that Sackville AJA commenced [187] of his judgment in McGuirk with the observation that "[t]here is authority for the proposition that the court's inherent jurisdiction is not displaced by rules of court, provided the exercise of the inherent jurisdiction does not contravene the requirements of the rules of court: Landsal at 427, and recognised the tension between that authority and what his Honour went on to say. What was said in Landsal has been noted at [123(4)] above. Landsal is also consistent with Woolf where Dixon J identified three sources of power justifying a particular course. One of those sources was the Court's general supervisory jurisdiction over solicitors which is a recognised aspect of a superior court's inherent jurisdiction. 2. Woolf is inconsistent with any contention that the Court's supervisory jurisdiction may not be exercised where alternative statutory avenues may provide a remedy. So much also follows from statements by the High Court to the effect that the Court may stay proceedings as an abuse of process in the Court's inherent jurisdiction (see, for example, CSR Limited v Cigna Insurance Australia Ltd (1997) 189 CLR 345 at 391-392; [1997] HCA 33) given that the Court also enjoys statutory powers that may support such a remedy. 3. Notwithstanding the Appellant's strong reliance on McGuirk, Ms Whittaker observed in oral address: "It's put against us, I apprehend, that we are saying that, if there's another available statutory right or remedy that the Court can't use the inherent jurisdiction. We don't say that. I don't aim that high." 1. The fact that an application may have been possible under the Queensland LP Act did not mean that this Court's inherent supervisory jurisdiction over solicitors could not be invoked, and McGuirk did not compel that result, as was conceded by Ms Whittaker. This Court is bound by Woolf which, like Landsal, accepted that the inherent jurisdiction is not displaced by rules of Court. Indeed, were such an argument based on McGuirk at [187] to be accepted, s 23 of the Supreme Court Act which provides that "[t]he Court shall have all jurisdiction which may be necessary for the administration of justice in New South Wales" would supplant the Court's inherent, supervisory jurisdiction. The Appellant, in his written submissions, endorsed the proposition that a court may exercise its inherent powers in a particular case, even in respect of matters that are regulated by statute or rules of Court, so long as it can do so without contravening any such provision. 2. I agree with the primary judge that the inherent jurisdiction of the Court, especially that which extends to the supervision of officers of the Court, supported the making of the orders in the present case. Exorbitant charging debases the reputation of the legal profession as well as subjecting clients or others involved in litigation to unwarranted costs. These verities are reflected in statutes of every Australian State regulating the legal profession, as well as in a significant body of case law. Statutes regulating the legal profession require clients not only to be supplied with fee estimates but to be updated regularly if such estimates require revision: see, for example, s 315 of the LP Act which provides: "A law practice must, in writing, disclose to a client any substantial change to anything included in a disclosure already made under this division as soon as is reasonably practicable after the law practice becomes aware of that change." 1. Legislation also requires any additional charges to be explained and justified, and for acceptance of such additional charges to be agreed to. Failure to comply may amount to unsatisfactory professional conduct or professional misconduct: s 316(7) of the LP Act and s 317(4) of the Legal Profession Act 2004 (NSW), and see, for example, Berger v Council of the Law Society of New South Wales [2019] NSWCA 119 at [371]. 2. The highest standards of integrity are expected of members of the legal profession. That should not need to be spelt out although it has been, in justifiably strong terms, from time to time: see, for example, Dupal v The Law Society of New South Wales [1990] NSWCA 56; New South Wales Bar Association v Cummins (2001) 52 NSWLR 279; [2001] NSWCA 284 at [19]-[20]. 3. In Re Veron; Ex parte Law Society of New South Wales [1966] 1 NSWR 511 at 517, the Court of Appeal remarked that "[i]t has long been recognized that the charging of extortionate or grossly excessive costs by a solicitors may amount to professional misconduct." It was said by the Court (at 518) that the solicitor's conduct, in that case, of such gross overcharging "would be regarded as dishonourable by his professional brethren of good repute and competency" and was "disgraceful" (at 551). 4. In Council of the Queensland Law Society Inc v Roche [2004] 2 Qd R 574; [2003] QCA 469 at [57], McMurdo P said: "In light of the clear statements made by the Court in this case, practitioners who continue to breach their fiduciary duty by placing their own and their firm's interests before those of clients, importuning them to enter into costs agreements charging exorbitant fees … can expect heavier deterrent penalties for their professional misconduct. Substantial penalties will be justified to protect primarily the public but also the reputations of the vast majority of decent practitioners to whom such conduct is abhorrent. Where appropriate, the penalty may include striking the name of the offending practitioner from the Roll of Solicitors of this Court." 1. More recently, in Scroope v Legal Services Commissioner [2013] NSWCA 178 at [27], Beazley P (with whom Bathurst CJ and Hoeben JA agreed) noted: "Overcharging and overservicing a client is a serious matter. The authorities have stated that to be so for the last century, although, in reality, authority is not needed to make that observation. The extent of overcharging of the client in this case was very serious." 1. The authorities referred to in [123] above and the propositions for which they stand fully support the existence of the jurisdiction which the primary judge held to be engaged. It is an important jurisdiction to which solicitors, as officers of the Court, are subject. 2. The primary judge's exercise of that inherent supervisory jurisdiction involved a broad evaluative judgment, recognised in terms by the second ground of appeal to involve the exercise of a discretion. Such a decision is not lightly to be disturbed, and the House v The King (1936) 55 CLR 499; [1936] HCA 40 standard applies whether or not a true discretion is involved: Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256; [2006] HCA 27 at [7], citing R v Carroll (2002) 213 CLR 635; [2002] HCA 55 at [73]. 3. If, notwithstanding Ms Whittaker's statement to the contrary reproduced at [129] above, the Appellant intended to contend that the primary judge erred as a matter of law because there were alternative ways by which the Respondent could have challenged the charging of unreasonable fees, the reasons already given supply an answer to such a contention. 4. There is also to be considered in the present case that, when the Respondent did seek information from the Appellant in the context of the Queensland legal profession regulatory regime, he was met with evasion, and threats by the Appellant, the purpose of which may readily be inferred, namely to dissuade the Respondent from pressing for information in relation to the basis of the Appellant's costs: see [48]-[51] above. 5. The primary judge's decision to order the Appellant to make payment to the Respondent pursuant to the Court's supervisory jurisdiction was entirely open to her, especially in light of the Appellant's past conduct in relation to possible third party costs proceedings in Queensland coupled with her Honour's findings as to the exorbitant nature of the Appellant's charging. 6. The Respondent, moreover, was based in New South Wales as had been the Appellant's client. Contrary to a further submission advanced by the Appellant, in light of the Appellant's history of evasion and threats of counter-suit in relation to the grant of probate of Mabel's Estate, her Honour was correct to have regard to ss 56-60 of the Civil Procedure Act in informing her decision to exercise the Court's inherent jurisdiction. This was a case which called out for robust intervention, consistent with fairness to the Appellant, in the interests of justice. For reasons advanced below, there was no denial of fairness to the Appellant who was given every opportunity to justify how his original costs estimate of $3,900-$6,400 was exceeded by so much. Key documents were not produced or tendered in evidence such as any written update of the Appellant's costs estimate, something required by the LP Act, which governed the Appellant's professional relationship with Gwendoline. 7. That the Respondent was unsuccessful in his claim for restitution in the Equity Proceedings, a matter raised by particular (a) of the second ground of appeal (see [115] above), is entirely beside the point. The claim under the supervisory jurisdiction in no way depended upon success in that claim. Nor was the failure to join the mortgagee to the Equity Proceedings necessary. The substantive and unsuccessful claim in those proceedings was for restitution from the Appellant. As far as the additional claim, raised in the Points of Claim, for payment pursuant to the Court's supervisory jurisdiction was concerned, the mortgagee was neither a necessary nor proper party to those proceedings. Moreover, the fact that Gwendoline had apparently authorised payment to the Appellant did not insulate him from the Court's inherent supervisory jurisdiction (and he did not contend to the contrary). As between the Appellant and Gwendoline, the Appellant was paid and the orders made by the primary judge did not alter that fact, and no relevant injustice accrued to the Appellant. No reason was advanced in support of the Appellant's submission that the mortgagee may remain liable to him for costs. The mortgagee's liability to the Appellant was discharged on the payment to him on 14 November 2016. 8. In relation to the "reasons" forming sub-paragraphs (e), (f) and (g) of the second ground of appeal, these go to the quantification of the assessment of overcharging and compensation which is dealt with under ground 3 at [150]ff below. 9. I would also firmly reject the Appellant's argument that he has been denied procedural fairness. It fails at its first premise, namely that the inherent supervisory jurisdiction had not been raised in the Equity Proceedings. It had been, and the argument as propounded on the Appellant's behalf appeared to overlook the following matters: 1. the observations of Slattery J in the second Slattery J judgment at [97], as set out at [84] above; 2. what Slattery J said at [36]-[40] and at [43]-[44] of the same judgment, set out at [85]-[86] above; 3. the directions made by Slattery J as to the filing of Points of Claim, as set out at [88] above, and his Honour's subsequent directions of 16 December 2021, as set out at [93] above; 4. the fact that the Points of Claim squarely invoked the Court's supervisory jurisdiction (see [90]-[91] above); 5. the fact that, in the Points in Reply, the Appellant acknowledged the existence of this jurisdiction and that, as an officer of the Court, he was subject to it (see [92] above); 6. the fact that the Points of Claim and Points in Reply referenced both the Equity and Possession Proceedings in their cover pages; 7. the Appellant's application to remove both sets of proceedings to the Court of Appeal on the basis that they involved the exercise of the Court's supervisory jurisdiction. This fact was wholly inconsistent with the repeated submission that the Appellant did not understand or appreciate that relief under the inherent supervisory jurisdiction was being sought in the Equity Proceedings; 8. issue 7 in the Statement of Real Issues in Dispute under the heading "The Equity Proceedings", namely "whether Mr Hartnett is required to disgorge any excessively charged fees?" (see [96] above); and 9. written and oral submissions made by both counsel at first instance before the primary judge on the topic of the supervisory jurisdiction. 1. The Appellant had fair notice of the ambit of the challenge to his fees. The submission that he ought to have had fair notice so as to "have been able to contest the allegations in the usual way" is answered by the fact that he did have such notice. That he did not choose to avail himself of that opportunity does not mean that he was denied it. 2. In reaching this conclusion, I am not unmindful of the fact that, in his supplementary submissions provided after the conclusion of the first day of the hearing and after evidence had closed, Mr Sykes for the Respondent put that disgorgement could be ordered in the Court's inherent jurisdiction in the Possession Proceedings (see [97] above). This was a curious submission which overlooked the obvious fact that the Appellant was not a party to the Possession Proceedings (although he had not been excused from acting for Gwendoline in those proceedings). Plainly enough, the primary judge properly did not consider it appropriate to give the relief in the Possession Proceedings. Her Honour gave it in the Equity Proceedings, consistent with what the Respondent had sought in the Point of Claim and Issue 7 in the Statement of Issues: see [96] above. There was no prejudice to the Appellant given the timing of the provision of the supplementary submissions. 3. Further, it should be noted that, also on 24 August 2022, Mr Sykes filed submissions (updated with Court Book references) making plain that the issues had been narrowed inter alia by reference to the Points of Claim and the Reply to Points of Claim. Both sets of Points of Claim contemplated relief being granted in the Equity Proceedings pursuant to the Court's inherent supervisory jurisdiction. 4. For the above reasons, appeal grounds 1 and 2 should be rejected. Ground 3 1. Ground 3 of the Further Amended Notice of Appeal involved a challenge to the quantification of the amount ordered to be paid to the Respondent. This challenge was made on the following bases: "a. The costs assessed in the Possession Proceedings were not binding on the appellant. b. The costs assessed in the Possession Proceedings do not quantify the Indemnity. c. The primary judge did not undertake any analysis of the appropriate quantification beyond accepting the costs assessed in the Possession Proceedings." 1. One can start with the third of these "particulars". It is not correct to contend that the primary judge simply accepted the Wall Assessment. Far from it. As set out at [106] above, the primary judge gave seven examples involving analysis of the reasonableness or appropriateness of significant components of the Appellant's charging practices. Although they are expressed in compressed form, it is evident that her Honour's consideration involved a good deal of scrutiny of the Appellant's underlying invoices. Moreover, not a word was advanced on appeal in writing or orally attacking this analysis or suggesting that it was wrong or misconceived. It may be added that her Honour's analysis did not but could have added as an eighth example the Appellant's charging of an "uplift fee" of $43,033.34 on 14 November 2016 in circumstances where such a fee could only have been charged pursuant to a conditional costs agreement which would have been required to be signed by Gwendoline: see [21] above. There was no evidence that Gwendoline had ever signed such an agreement, and the agreement in evidence was unsigned. 2. It ill-behoved the Appellant to attack the quantification in circumstances where it was within his power to seek to justify the charges to the primary judge but where he chose not to do so. In these circumstances the primary judge was left with the issues raised in her seven examples, which added up to significant sums; the original costs estimate of $3,900-$6,400; the absence of any written disclosure to Gwendoline of any substantial changes in the fee estimate, as required by s 315 of the LP Act (see [19] above); the absence of any evidentiary assistance from the Appellant and the costs assessment that had been conducted by Mr Wall. 3. It was not, contrary to the Appellant's argument, a question of the Appellant being bound by the Wall Assessment in circumstances where he was not a party to it (because he was not a party to the Possession Proceedings) but, rather, a judge making use of such material as she had in order to undertake a quantification exercise in circumstances where the one party with peculiar and personal knowledge, and the ability, to explain the charges declined to take the few short steps to the witness box in order to do so. It is trite that such a circumstance provides a ready basis for the drawing of a negative inference against that party: Cullen v Welsbach Light Co of Australasia Ltd (1907) 4 CLR 990 at 1002; [1907] HCA 3; Ellor v Selfridge and Co (1930) 46 TLR 236. As Rich J put it in Insurance Commissioner v Joyce (1948) 77 CLR 39 at 49; [1948] HCA 17: "[W]hen circumstances are proved indicating a conclusion and the only party who can give direct evidence of the matter prefers the well of the court to the witness box a court is entitled to be bold." Or, as Lord Diplock said of a defendant who called no evidence in British Railways Board v Herrington [1972] AC 877 at 930: "This is a legitimate tactical move under our adversarial system of litigation. But a defendant who adopts it cannot complain if a court draws from the facts which have been disclosed all reasonable inferences as to what are the facts which the defendant has chosen to withhold." 1. "All evidence is to be weighed according to the proof which was in the power of one side to have produced, and in the power of the other to have contradicted": Blatch v Archer (1774) 1 Cowp 63 at 65. 2. The Appellant submitted that, as he was not a party to the Wall Assessment, he could not participate in it in his own interest or appeal the outcome. Whilst that may be, that would only be relevant if the primary judge mistakenly considered that he was bound by it, which she did not. What was significant was that, given the opportunity to attack it before the primary judge, the Appellant did not do so. The only qualification to that is that there was an issue between the parties, pressed on appeal, that the Wall Assessment was undertaken on a party/party basis as opposed to a solicitor/client basis in circumstances where it appeared to be accepted that the latter basis was appropriate: see Uniform Civil Procedure Rules 2005 (NSW) r 42.25. 3. Mr Sykes, who appeared for the Respondent, did not accept that the Wall Assessment had been conducted other than on a solicitor/client basis. He accepted that the heading of the application for a costs assessment referred to it being on a party/party basis as did some of the headings on the correspondence. On the other hand, he pointed to Mr Wall's statement in his preliminary assessment of costs (having received, initially, no reply from Gwendoline) that: "The costs that I have to assess are the costs of the Supreme Court proceedings and the mortgage on an indemnity basis." Consistent with this, Mr Wall had been provided with a copy of Justice Davies's orders, Order 5.2 of which provided that Gwendoline be paid from the proceeds of sale of the house "pursuant to the terms of the Mortgage, and on an indemnity basis, the costs and expenses she has incurred in relation to the Mortgage and these proceedings to date, and any such costs that she incurs in the future". 1. It was open to the primary judge to conclude that the Wall Assessment was conducted on an indemnity basis. 2. The primary judge's assessment was an informed assessment having regard to the information that was before the Court, and was logical, fair and reasonable in all of the circumstances of the case: Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 at [22]; Hamod v State of New South Wales [2011] NSWCA 375 at [820]. It met these criteria given: 1. the nature and relative simplicity of the task undertaken including the unopposed action for possession; 2. the size of the mortgage; 3. the original costs estimate; 4. the absence of a revised written costs estimate; and 5. the fact that the Appellant had ample opportunity to justify his fees which he did not avail himself of. Ground 4 1. Ground 4 of the Further Amended Notice of Appeal was that the primary judge erred in finding that: "a. the mortgagee's costs of the costs assessment in the Possession Proceedings did not fall within the Indemnity (J[119]); and b. the mortgagee was not entitled [to] recoup her costs incurred after the date of the costs order in the Possession Proceedings by virtue of the Indemnity (J[120])." 1. The primary judge's reasoning in respect of this aspect of the proceedings at first instance was as follows (at [116]-[120]): "Mr Hartnett's counsel submitted that Gwendoline's rights under Davies J's order and the mortgage continue to operate into the future and that the mortgage clause required the mortgagor to "indemnify the mortgagees in respect of any expenditure they may incur in their capacity as mortgagees and in relation to the secured debt": Halsted v Official Trustee in Bankruptcy (No 2) [2012] FCA 66 at [16] (Logan J). However, even that would not extend to "unjustifiable or vexatiously incurred costs": Re Solicitor's Bill of Costs; Re Shanahan (1941) 58 WN (NSW) 132 at 136 (Street J). I was referred by Mr Hartnett's counsel to Australia and New Zealand Banking Group Ltd v Mishra [2012] NSWSC 1333 for the proposition that a mortgagee is entitled to require security for potential future costs of defending a threatened claim against it and where the mortgagor had not provided a release of future claims against the bank. In that case Davies J quoted from Overton Investments Pty Ltd v Cuzeno RVM Pty Ltd [2003] NSWCA 27 at [63] where Hodgson JA (with whom Handley and Stein JJA agreed) stated: Where a dispute has arisen or is reasonably anticipated, a mortgagee is entitled to require not merely payment of the amount secured by the mortgage but also payment or security for the probable costs of any contest … If the mortgagee does not specify a payout figure which bears some reasonable relationship to the amount truly owing and anticipated costs, then this may amount to unreasonable conduct or misconduct which disentitles the mortgagee to costs subsequently incurred in determining the rights of the parties…Furthermore, where the mortgagee does not require payment or security for the probabl[e] costs of any contest, and a question later arises as to whether the mortgagor's tender was sufficient to entitle the mortgagor to redemption, the mortgagee cannot then claim that the tender was insufficient because it did not include provision for those costs: I know of no direct authority for that proposition, but in my opinion it follows from the principles I have discussed. What was necessary was for the mortgagee to stipulate the requirement for an additional payment to what was otherwise needed to redeem the mortgage. Here, there was no redemption of the mortgage; instead, Gwendoline exercised her mortgagee's power of sale. Nevertheless, it can be accepted that it remains open to the mortgagee to seek payment of "whatever is necessary to protect and preserve the mortgagee's rights when their validity is challenged or their exercise is sought to be prevented or impeded": Liberty Funding Pty Ltd v Steele-Smith [2004] NSWSC 1100 at [21] (Palmer J). However, I was not taken to any evidence that Mr Bell was seeking to challenge the exercise of Gwendoline's rights as mortgagee after the Possession Proceedings. I do not consider an application for a costs assessment under the LPA amounted to an attempt to "prevent or impede" the exercise of the mortgagee's rights. I note that in Parramatta River Lodge Pty Ltd v Sunman (1991) 5 BPR 12,038 at 12,048, Young J did not consider that a mortgagor was liable under the same mortgage clause to pay for the costs of preparation of the mortgagee's bill of costs suitable for taxation. I do not consider that Gwendoline had any entitlement to retain sums for likely future costs, where no such order had been sought from Davies J (as was sought in Mishra). I therefore make no allowance for possible future costs in the assessment of quantum here." 1. No reason was advanced impugning her Honour's reasoning or the authorities on which she relied. Ground 4 should also be dismissed. Notice of Contention 1. By notice of contention, the Respondent contends that the primary judge erred in finding that the Appellant's retention of legal fees greater than those to which he was entitled "did not fall within the accepted category of unjust factors, namely that the appellant's retention of the benefit was illegal as he had no contractual or statutory right to retain that benefit." 2. It is not necessary to address this ground which was only faintly pressed by Mr Sykes in any event. Conclusion 1. For all of the foregoing reasons, the appeal should be dismissed with costs. 2. ADAMSON JA: I have had the benefit of reading the reasons of the Chief Justice in draft. I agree with his Honour's reasons and the orders proposed. I wish to add the following reasons of my own. 3. The further amended notice of appeal filed on 7 March 2023 seeks the following orders: 1 Appeal allowed. 2 Set aside orders 1(b) of the orders made on 8 September 2022 in the Possession Proceedings and in lieu thereof make the following orders: a. The respondent have leave under s355(6) of the LPA QLD to file an application for a non-associated third party payer assessment of the costs of the mortgagee as below and determine the payment out of Court at the conclusion of that assessment under part 3.4, division 7 of the Legal Profession Act 2007 (QLD). 3 Set aside orders 2 and 3 of the orders made on 8 September 2022 and in lieu thereof make the following orders: a. Proceedings dismissed b. Order that the respondent pay the appellant's costs of the proceedings below. 3A The appellant was denied procedural fairness below in that orders were made in the inherent jurisdiction of the Court in the Equity Proceedings in circumstances where those orders had not been sought in the Equity Proceedings and the case had not been conducted either by way of written submissions or orally upon that basis. 4 The respondent to pay the appellant's costs of the appeal. 1. Ground 3A was added in the course of the hearing of the appeal. Because ground 3A, if made out, will require the appeal to be allowed and render the consideration of all other grounds moot, I propose to address ground 3A first. Alleged denial of procedural fairness 1. In the present case, as the Chief Justice has explained, there were two proceedings, which were heard together: 1. proceedings 2014/354291 (the Possession Proceedings) between Gwendoline Bell, the mortgagee of the property, and Anthony Robert Bell, the mortgagor (as executor and beneficiary of the estate of his mother Mabel Deakin-Bell) of the property; and 2. proceedings 2020/254590 (the Equity Proceedings) brought by Anthony Robert Bell against Mr Hartnett for a declaration that Mr Hartnett held the net proceeds of sale (of $287,551) on trust for Mr Bell on the basis that it was money had and received by him for Mr Bell's benefit. 1. The starting point is that, with certain exceptions, a person can only be affected by an order made in proceedings to which that person is a party: John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd; Walker Corporation Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19 at [129] and [131] (French CJ, Gummow, Hayne, Heydon and Kiefel JJ); News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410; [1996] FCA 870 (News Ltd) at 524-525 (Lockhart, Von Doussa and Sackville JJ). Exceptions include a situation where a solicitor acting for a party is bound by findings of fact made in the proceedings for the purposes of an application that the solicitor be liable for the party's costs personally: see Sch 2 of the Legal Profession Uniform Law Application Act 2014 (NSW), cl 6.1. However, absent statutory exceptions, the common law principle is basic to the requirement of procedural fairness: Pegang Mining Company Limited v Choong Sam [1969] 2 MLJ 52 at 55-56 (Diplock LJ), cited with approval in News Ltd at 524; see also State of Victoria v Sutton (1998) 195 CLR 291; [1998] HCA 56 at [76]-[81] (McHugh J). 2. As referred to in the Chief Justice's detailed recitation of the procedural history of the two proceedings, an order was made by Slattery J on 16 December 2021 that the points of claim, points of defence and points of reply were to be taken as the pleadings in both the Equity and Possession Proceedings. While I understood it to have been accepted in this Court that this order neither had the effect of making Mr Hartnett a party to the Possession Proceedings nor of making Gwendoline Bell a party to the Equity Proceedings, the effect of the points of claim filed on 17 November 2021 was to claim the following relief against Mr Hartnett in the Equity Proceedings: "1 Order that the Supreme Court of New South Wales' inherent, supervisory jurisdiction (the Supervisory Jurisdiction) is exercisable against Beau Timothy John Hartnett (Hartnett) in respect of legal services he provided in New South Wales Supreme Court proceedings number 2014/354291 (the Possession Proceedings). 2 Order that the Supervisory Jurisdiction be exercised to reduce Hartnett's fees for acting in the Possession Proceedings on the basis that they were unreasonable and/or improper and/or not related to the mortgage the subject of the Possession Proceedings." 1. Thus, the effect of the points of claim, combined with the order made by Slattery J on 16 December 2021, was to expand the relief claimed in the Equity Proceedings well beyond that which had been claimed in the originating process (which was limited to a claim for money had and received) and to put Mr Hartnett on notice of that claim. Although Mr Hartnett was justifiably confident that he could defeat the claim for money had and received (and did defeat it), the points of claim contained additional claims against him which required him to justify the amount of his fees. Further, he was squarely on notice that the Court's supervisory jurisdiction against legal practitioners was being invoked against him. 2. The order made on 16 December 2021 had, for the reasons given above, substantial significance in the proceedings. It appears that its forensic consequences may not have been appreciated by those appearing for him in the Court below or, indeed, in this Court until it was drawn to their attention by this Court in the course of argument. 3. Further, Mr Sykes, who appeared for Mr Bell in this court and in the Court below, accepted that he had not conducted the case in the way found by the primary judge. However, he contended that the trial judge's approach was "open on the pleadings", including the points of claim. 4. It is preferable that inconsistencies between originating processes and points of claim be avoided. However, where points of claim have been ordered and contain claims that supplement those in the originating process, the defendant is on notice that additional claims have been made and will be determined by the Court, whether or not they are included in the originating process. The effect of the order of 16 December 2021 which made the points of claim "joint" was to merge the two proceedings. While such an order may only rarely be appropriate, the order was not challenged in the present case. The order had important forensic consequences in the present case including that it rendered Mr Hartnett susceptible to the relief which was ultimately granted (although it had not been claimed in the originating process in the Equity Proceedings). Whether the inherent jurisdiction was available 1. Ms Whittaker SC, who appeared with Ms King on behalf of Mr Hartnett, argued that the inherent jurisdiction could not be exercised in circumstances where conventional avenues were available to Mr Bell (each of which was said to have been sufficient to protect his interests and achieve the desired result of fixing the amount that could be deducted from the proceeds of sale). These avenues included the following: 1. an action against the mortgagee for account (to which Mr Hartnett could have been joined); or 2. a non-associated third party payer costs assessment of the costs for which the mortgagor was liable to the mortgagee, which would bind Mr Hartnett, as Gwendoline Bell's solicitor. 1. The utility of the proceedings described in (1) above was explained by Parker J in Commonwealth Bank of Australia v Pascoe and Scott as trustees of the estate of Usha Wati Charan [2018] NSWSC 1332 at [40]: "… As mortgagors, Mr and Mrs Charan were entitled to bring proceedings for an account from the Bank as a mortgagee which had exercised its power of sale: J D Heydon and M J Leeming, Meagher, Gummow and Lehane's Equity: Doctrines and Remedies (LexisNexis Butterworths, 5th ed, 2015) 924 [26-140]. Such proceedings for an account would have been appropriately joined to the Bank's interpleader claim with respect to the monies paid into Court. For the purposes of the account the Bank would have been required to put forward a formal statement specifying the amount calculated to be due, and the components of that calculation. On behalf of the borrowers, any alleged overcharges by the Bank ("falsifications") or further credits which should allegedly have been given ("surcharges") would have been identified and the Bank could have been required to produce appropriate evidence ("vouching") in support of any challenged item. Contrary to the suggestion by counsel for Mr Charan's trustee, this process would not necessarily have been cumbersome or protracted; the Court has ample powers under Uniform Civil Procedure Rules 2005 (NSW) Pt 46 to ensure that the process is carried out efficiently. The end result would have been a net figure determined by the Court which would have been final and binding on all parties." [Emphasis added.] 1. The utility of the avenue in (2) above (the non-associated third party costs assessment) was common ground. The parties made a joint submission to the Court below (Slattery J) that an order be made referring the matter for third-party costs assessment, which was rejected on the basis that it "may only generate further disputation between these parties" and would not be the "preferable course": Bell v Hartnett Lawyers (No 2) [2021] NSWSC 1270 at [65]-[78]. The primary judge (Peden J) noted that Slattery J "also did not accept the parties' joint submission that the appropriate way forward was for the costs to be subject to a third-party payer costs assessment": Bell v Hartnett Lawyers (No 3) [2022] NSWSC 1204 at [96]. As it happens, this is the very order which Mr Hartnett has proposed to this Court as a solution to the impasse between the parties and one in respect of which he has given undertakings (see below). 2. If the third party payer assessment (which would have been conducted pursuant to s 335(6) of the Legal Profession Act 2007 (Qld) (the Queensland Act)) had been undertaken: 1. Gwendoline Bell would have been bound by the assessment and would have the option to participate in the process; 2. Mr Hartnett would be obliged to participate in the assessment and would be taken to be a party to the assessment (s 335(9)(c) of the Queensland Act); and 3. (but for the undertaking offered on behalf of Mr Hartnett) the assessment of costs would not affect the amount of costs payable by Gwendoline Bell to Mr Hartnett (s 335(9)(d) of the Queensland Act). 1. At the conclusion of the hearing of the appeal, Ms Whittaker offered the following undertakings to the Court with a view to the matter being resolved by a third party payer costs assessment: "1. Not to object to an application for third party payer costs assessment by the respondent under s 335(6) of the Legal Profession Act 2007 (QLD); 2. To abide by the outcome of the assessment referred to in paragraph 1 above, subject to the right of review under r 742 of the Uniform Civil Procedure Rules 1999 (QLD) and pay any difference between the costs as assessed and the amount paid by the mortgagee; and 3. Not to seek any further payment from the mortgagee, including by way of further assessment proceedings against the mortgagee, of any amount paid by the appellant to the respondent as a result of the assessment process referred to in paragraph 1." 1. Ms Whittaker argued that the consequence of the availability of these alternative avenues was that the inherent jurisdiction was not available because it was not "necessary" that it be exercised. 2. As the Chief Justice has explained in his Honour's reasons, the Court's inherent jurisdiction includes a supervisory jurisdiction over legal practitioners. The charging of fees is a fundamental aspect of the relationship between a solicitor and a client. I am not persuaded that the Court's jurisdiction ought be constrained by the principles which apply when its inherent jurisdiction is invoked in circumstances which do not involve the conduct of officers of the Court. The Court's supervisory jurisdiction is not displaced by the sufficiency of the mechanisms postulated by Ms Whittaker to protect Mr Bell's interests. 3. GRIFFITHS AJA: I agree with the Chief Justice. ********** Amendments 10 April 2024 - Revision made to [168](1) and (2), the word "Anthony" was inserted before "Robert Bell" in each subparagraph. Revision made to [175], first sentence in parentheses, the word "were" is replaced with "was" so it now reads "(each of which was said ...)" 24 April 2024 - The following revisions have been made: • at [13], in the quote at 4.4(a), "Aspley Street" changed to "[Apsley] Street". • at [14], in the quote at 6.3 the full stop after "may vary" changed to a comma. • at [30], in the quote at 5.3 "for the period September 2013" changed to "for the period 6 September 2013". • at [85], in the quote at [33], "in this situation and what the appropriate legal standard that the Court uses" changed to "in this situation and … the appropriate legal standard that the Court uses." • at [88], in the quote, "[or]" inserted between "is/are enlivened on" and "before 4.00pm". • at [89], in the quote at 1A, the second "pursuant to" was removed and replaced with "…". • at [91], in the quote at 4b, the space was removed at "$2, 105" so that it reads "$2,105". • at [102], the citation "[1964] 2 WLR 1041" was changed to "[1964] Ch 720". This was replicated on the coversheet also. • at [120], in the quote, "a" between "case of" and "solicitor" was removed. • at [123(1)], "at 360-361" was added after "[1966] 1 NSWR 354" and the citations were swapped in order. • at [123](4)], "[1993] FCA 121" was changed to "[1993] FCA 171". • at [123(15)], "[2015] NSWCA 19 at [15]" was changed to "[2015] NSWCA 19 at [20]". • at [123(160)], "at 1050" was changed to "at 734". • at [127], "Landsal at 476" was changed to "Landsal at 427". • at [145(5)], "see [93]" was changed to "see [92]". • at [152], "Gwendoline or any substantial" was changed to "Gwendoline of any substantial". • at [159], in the quote at b, "not entitled recoup her costs" was changed to read "not entitled [to] recoup her costs". • at [160], in the quote at [117], "payment or security for the probably costs" was changed to read "payment or security for the probabl[e] costs". DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision 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 or Tribunal in which it was generated. Decision last updated: 24 April 2024