Reported Decision : 72 NSWLR 178 New South Wales Supreme Court CITATION : Levy v Bergseng [2008] NSWSC 294 This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S) : 19 October 2007 JUDGMENT DATE : 4 April 2008 JURISDICTION : Common Law JUDGMENT OF : Rothman J (i) To the extent necessary, leave to appeal the Determination of the Review Panel be granted; (ii) The Certificates of Determination of the Review Panel in Costs Review 2006/910-2002 issued on 19 December 2002, being Certificate of Determination of Costs by Costs Review Panel (Form 9), Certificate of Determination of Costs of Review (Form 11) and Certificate of Determination of Review Panel of Costs of Costs Assessment (Form 12), be set aside and in their place order that the appeal to the Review Panel from the Costs Assessor in Costs Assessment 910 of 2005 be dismissed; (iii) To the extent necessary, the Certificate of Determination of the Costs Assessor in Costs Assessment 910 of 2005 be reinstated and affirmed; DECISION : (iv) The cross-summons filed 8 August 2007 be dismissed; (v) The defendants pay the plaintiff's costs of the proceedings in this Court, as agreed or assessed; (vi) The parties have liberty to apply within seven days for any consequential or other order arising from these reasons, including any special or different order for costs of these proceedings and any order as to the costs of proceedings before the Review Panel; (vii) To the extent otherwise entitled, the defendant be granted an indemnity certificate under the Suitors' Fund Act 1951. CATCHWORDS : PRACTICE – costs – costs assessment – appeal from Review Panel – determination as to whether 1987 or 2004 Act applies – jurisdiction of Costs Assessor under 1987 Act relating to "unjustness" – availability of cancellation fees as a matter of law – "reasonableness" of cancellation fees – construction of costs agreements – applicability of GST to barrister's fees payable by solicitor where client is overseas resident. A New Tax System (Goods and Services Tax) Act (Cth) 1999 Interpretation Act 1987 LEGISLATION CITED : Legal Profession Act 1987 Legal Profession Act 2004 Suitors' Fund Act 1951 CATEGORY : Principal judgment Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596 Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 BP Refinery (Westernport) Pty Ltd v Hastings Shire [1977] HCA 40; (1994) 180 CLR 266 Byrne and Frew v Australian Airlines Limited [1995] HCA 24; (1995) 131 ALR 422; (1995) 69 ALJR 797; (1995) 185 CLR 410 Calvin v Carr [1980] AC 574 Campbelltown City Council v Vegan [2006] NSWCA 284 Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337 Collector of Customs v Agfa-Gevaert Limited [1996] HCA 36; (1996) 186 CLR 389 Dimos v Hanos & Egan [2001] VSC 173 Doyle v Hall Chadwick [2007] NSWCA 159 Hall Chadwick v Doyle [2006] NSWSC 1195 Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41 Kioa v West [1985] HCA 81; (1985) 159 CLR 550 CASES CITED : Kostas v HIA Insurance [2007] NSWSC 315 Krishna v DPP (NSW) [2007] NSWCCA 318 Pettitt v Dunkley (1971) 1 NSWLR 376 R v Martinello [2005] ACTSC 109 Re Commissioner of Australian Federal Police v Razzi (No 2) [1991] FCA 267; (1991) 30 FCR 64 Re Gavin Roy McAuliffe v Secretary, Department of Social Security [1992] FCA 483; (1992) 28 ALD 609 Re Our Town FM Pty Limited and Newcastle Stereo Radio Pty Limited v Australian Broadcasting Tribunal and Newcastle FM Pty Limited [1987] FCA 301; (1987) 16 FCR 465 Re Refugee Review Tribunal; Ex parte AALA [2000] HCA 57; 204 CLR 82 Renard Constructions v Minister for Public Works (1992) 26 NSWLR 234 Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141 Stefanou v Fairfield Chase, unreported, 10 December 1993 Vodafone Pacific Ltd & v Mobile Innovations Ltd [2004] NSWCA 15 Wilkie v Gordian Runoff [2005] NSWSC 873 Leonard Ari LEVY (Plaintiff, Cross-Defendant) PARTIES : Karin Elizabeth BERGSENG (First Defendant, First Cross-Plaintiff) Peter Edward McCROHON (Second Defendant, Second Cross-Plaintiff) Christine Louise PERRY (Third Defendant, Third Cross-Plaintiff) FILE NUMBER(S) : SC 10245/2007 COUNSEL : Dr JG Renwick (Plaintiff, Cross-Defendant) J Sharpe (Defendants, Cross-Plaintiffs) SOLICITORS : DG Thompson (Plaintiff, Cross-Defendant) Strategy Legal (Defendants, Cross-Plaintiffs) IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ROTHMAN J 4 APRIL 2008 10245/07 Leonard Ari LEVY v Karin Elizabeth BERGSENG & Ors JUDGMENT 1 HIS HONOUR: The plaintiff, Mr Levy SC, is a barrister who specialises in medical negligence cases and other larger personal injury matters of a complex nature. He appeared, instructed by McCrohon Bergseng Partners, solicitors (also known and hereinafter referred to as MBP Legal or MBP) for a client of MBP, Ms Keke Bountros, who suffered and/or was suffering an injury. 2 A Costs Assessor has assessed Mr Levy's fees and a Review Panel has determined (the Determination) an application for review. The latter occurred on 19 December 2006. Mr Levy appeals to the Supreme Court (and to the extent necessary seeks leave to appeal) seeking orders that the Determination be set aside and the Costs Assessor's decision be affirmed. MBP seek, by way of cross-appeal, a determination of the question as to whether GST is payable and, therefore, recoverable by Mr Levy. 3 This appeal raises a number of issues. While the facts are in short compass, it is necessary for me to set them out and then deal with the terms of three costs agreements before construing them to determine: (a) whether Mr Levy has been denied procedural fairness; (b) whether the Review Panel provided sufficient reasons; (c) whether overseas loadings were able to be charged; (d) whether cancellation fees were able to be charged and, if so, whether they were unjust; (e) whether Mr Levy's costs, as assessed, were fair and reasonable; and (f) whether GST is payable, required to be charged, and/or a necessary component of Mr Levy's fees. 4 In order to deal with the issues adumbrated above, it is necessary to determine which statute applies, the nature of the appeal now before the Court and the jurisdiction of the Review Panel. Facts and Costs Agreements 5 MBP commenced proceedings (the Bountros proceedings) on behalf of Ms Bountros in May 2001 and briefed Mr Levy on 18 October of that year. 6 The statement of claim in the Bountros proceedings alleged mismanagement amounting to negligence in the neonatal care of Keke Bountros who, it is alleged, suffered severe brain damage and who, if successful, would have received a very significant award of damage. In such cases, it is often difficult for legal practitioners to estimate the level of damage that may be awarded, because so much depends on that which the judge considers to be the life expectancy of the injured party, or otherwise the extent of the injury. 7 The Bountros proceedings were the subject of offer and counter-offer by the plaintiff and the defendant in those proceedings. The matter was settled in March 2005 and the settlement was approved in April 2005. Mr Levy rendered his account in May 2005, at which point MBP applied for assessment of the memorandum of fees. 8 It is necessary to retrace some of the steps that led to the settlement and the fees agreements that were executed. As earlier stated, on 18 October 2001, MBP briefed Mr Levy to advise and appear in the Bountros proceedings, which had been commenced in May 2001. The proceedings were a complex medical negligence case. The Observations to Counsel recite that Ms Keke Bountros was born at Liverpool Hospital on 19 May 1980. It recites that her mother recalled no difficulties during the pregnancy and the birth was problem free. Mrs Bountros noted some issues with the temperature of Ms Keke Bountros and complained about it, nothing was done. After some time, during which no or no proper medical attention was given to her, Keke was transferred to Westmead Hospital where her condition was stabilised. It is alleged that Keke suffered brain damage as a result of the inattention. 9 The Observations to Counsel also recited that the Bountros family, in its entirety, resided in Greece and that they were prepared, as required, to travel to Australia and that the statute of limitations "will be expiring" in May 2001. Notwithstanding the use of the words "will be expiring", the brief was sent, as earlier stated, on 18 October 2001. Senior Counsel was briefed with a set of initiating pleadings, the statements of the parents and a number of medical reports, together with a chronology, material relating to economic loss and correspondence with the solicitor for the insurer/defendant. 10 Mr Levy responded on 22 October 2001, which response (the first costs agreement) relevantly included the following: "The first reading of the papers does not provide any insight into whether or not this case has merit. Significant preparation is required in order to reach the point where an assessment can be made. I am prepared to provide a preliminary advice on the preparation which is required. I am required by statute to disclose the basis of my fees. My standard fees for undertaking medical negligence cases are $600 per hour for conferences, reading and preparation and $6,000 per hearing day in court between the hours of 10am and 4pm. I have dictated a preliminary advice which I will forward to you on receipt of your confirmation that my preliminary fee disclosure is satisfactory to you." The fees set out in the letter of 22 October 2001 were accepted and a preliminary memorandum of advice was forwarded to MBP on 29 October 2001. 11 On 16 October 2003, Mr Levy sent a letter relating to the estimate of fees, which letter set out the basis upon which work would be undertaken. It is necessary to set out the relevant terms of that letter (the second costs agreement). It is in the following terms: "The Legal Profession Act, 1994 obliges me to disclose an estimate of my fees. The cost of my professional fees is not capable of being estimated. A guide to the elements of an estimate is set out in Annexure 1 . This is not a quotation and it must be read as a qualified estimate because of the unknown factors which cannot be predicted. The terms on which I will undertake the work required of me are as follows:- (1) The actual amount of fees will be directly related to the time spent working on the case and the total likely fees is therefore not known. There is no way I can indicate the precise timing or sequence in which the required work will be carried out. (2) It is not possible to provide an accurate estimate of total fees likely to be incurred as the nature of the case involves attending to multiple tasks over time such as preparing, advising, conferring, consulting as well as appearing in court. (3) My current hourly fee of $600 plus 10% GST applies to conferences, consultations and preparation. (4) Where less than a full hour of my time is needed for a particular task only that part of the hour actually expended will be billed. For billing purposes a minimum allotment of time will be 6 minutes. This does not apply to time set aside for court appearances. (5) My current fee of $6,000 per day plus 10% GST will apply for each day set aside for appearing in court and will apply to the normal court sitting hours of 10am to 4pm. This does not include additional time spent out of normal court hours for conferences and preparation. (6) For short court appearances not scheduled to occupy a full day e.g. conference hearings in the Professional Negligence List, I reserve the right to charge a minimum fee of $1,000 plus 10% GST for such appearances. … (9) The client should be made aware that there are alternatives to fully contested adjudication of litigation in Court i.e. formal and informal settlement discussions, mediation and arbitration. These alternatives are generally less costly options compared to fully contested litigation. The extent to which defendants may be prepared to agree to participate in such alternative measures of dispute resolution will vary from case to case depending upon the view taken by the respective parties concerning the issues in the case and the work up of those issues. … (13) If a settlement is reached before a hearing date has been fixed I will be entitled to charge a brief fee equivalent to my daily fee of one day to represent recompense for skill care and consideration in the advancement of the interests of the client. (14) If for whatever reason the case should not proceed on the appointed dates fixed for the hearing (for example, if the case is settled, adjourned, not reached or the brief is withdrawn) then the fees for each day set aside for the hearing of the case will be payable as cancellation fees but I will offset any fees earned in respect of other paid court work that I may subsequently receive for those dates which have been set aside for the case. (15) All instructions are to be conveyed to me by my instructing solicitors and not by the client. I cannot undertake to receive or return client calls or communications from clients in every instance because of the nature and demands of my practice and the extent of my support staff. … (24) Payment of my fees shall be contingent upon a successful outcome of the case in return for the statutory 25% premium for success. Annexure 3 defines success. (25) If the brief is withdrawn for reasons other than my availability to do the work entailed in the brief then I retain the option to cancel the conditional fee agreement. If I exercise the option to cancel the conditional fee agreement in these circumstances then my fees for the work done by me prior to cancellation shall become payable. … (28) If competing interlocutory timetable commitments to other cases happen to take priority over Court imposed deadlines in this case I reserve the right to engage junior barristers to devil the work and carry out aspects of the interlocutory work either with or without prior approval in the event that instructing solicitors are not available to carry out such interlocutory work in my place if and when I am confronted with conflicting competing priorities. … My instructing solicitor and the client should be aware that in cases such as this which involve complex factual scenarios and/or complex detailed expert opinions the primary and secondary documents will require repeated perusals and analyses over time such that some parts of my fees may not be entirely recoverable from the defence as part of the party/party costs of the case once litigation has concluded. The plaintiff should receive written advice to this effect." The letter draws attention to the provisions of the Legal Profession Act 1987 which allow the fairness and reasonableness of fees to be assessed in certain circumstances. The letter enclosed an annexure which was an estimate of fees dated 16 October 2003 most of which were referred to as unknown. The total fees were also unknown. Each of the various items had figures under them which figures were the same as the figures in the body of the letter. Further the following item was included: " 12. Loadings: $ - To compensate for travelling time, travelling expenses and for being away from chambers for cases conducted away from the central business district of Sydney $[1,500] plus 10 percent GST per day if applicable. " 12 On 10 September 2004, the Supreme Court listed the Bountros proceedings for hearing. The hearing was to commence on 7 February 2005, with an estimated duration of six weeks. 13 On 10 September 2004, the day on which the Supreme Court fixed the hearing dates, Mr Levy wrote to MBP in the following relevant terms: "KEKE BOUNTROS – CANCELLATION FEES FOR THE TRIAL I confirm that I have set aside six weeks for this trial i.e. between Monday 7 February 2005 and Friday 18 March 2005. I need to clarify with you the question of cancellation fees because this is a large block of professional time to set aside and there are other cases being listed in this timeframe and it is not my practice to 'double book'. I have set aside the entire time on the assumption that the case will proceed. Consistent with this fixture I will refuse offers of other briefs for hearing in that period. My fee disclosure already provides for cancellation fees in respect of the time set aside for the trial. If the case settles before the due date I do not propose to render fees in respect of the whole period set aside but I will do so according to a graduated scale. What I propose is: 1. If the case settles between now and 30 November 2004 I will charge a cancellation fee of two weeks. 2. If the case settles between 1 December 2004 and 4 February 2005 i.e. effectively, the last working day before the trial, I will charge a cancellation fee of three weeks. 3. If the case settles on 7 February 2005 or during the trial I will charge a cancellation fee for the remaining time set aside for the trial. I confirm that if the case does settle in the circumstances where cancellation fees apply I will offset against cancellation fees any subsequent fees earned for court work required in the cancellation period. If I do not hear from you to the contrary within seven days I will assume these arrangements are accepted." 14 The above letter is referred to as the third costs agreement. 15 On 14 September 2004 there was a conference between Mr Levy and his instructing solicitor at which Mr Levy made clear that, in the circumstances of the matter, the cancellation fees were not negotiable. On 21 September 2004, Mr Levy sent a facsimile to his instructing solicitors referring to a telephone conversation that occurred earlier in the morning and his letter, referred to above, of 10 September 2004, concerning the terms of his engagement. He informed his instructing solicitor that he was being pressed to take another long case for that period and he now needed written acceptance of his standard terms of engagement. 16 On 22 September 2004, MBP wrote to the clients summarising the terms of the conversation and the requirements of Mr Levy in relation to his fees. It enclosed a copy of the letter from Mr Levy dated 21 September 2004 and asked for written confirmation of the agreement. 17 The written confirmation was returned in the following terms: "Dear Mr Levy, It is with pleasure that I sign the acceptance form of your terms as we appreciate the weight of you being the leading Q.C. (sic) and the difference that it has made to the case. I John Bountros accept the terms put by Leonard Levy SC." It is signed and dated 23 September 2004. That signed copy was sent to MBP (not Mr Levy). The accompanying letter is in similar terms. 18 There had been an earlier telephone conversation and the correspondence confirmed that conversation. That earlier conversation between the client and MBP occasioned the alleged writing of the letter from MBP to Mr Levy confirming that "each of your retainer agreements and letters of 22 October 2001, 16 October 2003 and 10 September 2004 … and letter concerning cancellation fees of 16 September 2004 setting out the terms of counsel retainers have been forwarded to John Bountros … Mr Bountros has today responded both by telephone and in writing confirming his understanding and consent to all such terms. Accordingly, I am authorised by and on behalf of the partners of MBP Legal and in accordance with my clients' instructions that the partners of MBP Legal and John Bountros on behalf of Keke Bountros agree to be bound by the terms of your retainers of 22 October 2001, 16 October 2003 and 10 September 2004 … and 16 September 2004 including cancellation fees." The Costs Assessor found that the above letter had not been sent, but that the retainers had otherwise been accepted by MBP. That finding of fact is not challenged and I accept it. 19 On 22 November 2004 the Supreme Court vacated the hearing that was to have commenced on 7 February 2005 and continue for six weeks. On 13 December 2004, the Supreme Court issued orders for the taking of evidence in London and Athens. On 14 December 2004 senior and junior counsel provided a memorandum of advice (the Advice) on "provisional risk assessment and discounting for potentially unrecoverable and adverse costs". The Advice referred to an earlier advice of 7 December 2004 and set out the principles of discounting factors, liability and causation issues, damages issues and the rationale for applying discounts. The Advice attached an appendix, which identified the potential unrecoverable costs between 1 December 2004 and the eve of the trial as 40 percent of $2,250,000. The estimate is not intended to be precise. There was a discussion as to any possible subsequent appeal and aspects relating to offers of compromise that may be made. The appendix to the Advice, which dealt with the anticipated items of cost, included anticipated overseas travelling costs for the plaintiff's team, additional expenses in Athens and additional expenses in London. This estimate was based upon business class airfares for three, accommodation in Athens for an estimated seven nights, accommodation in London for an estimated four nights, meal allowances etc., additional expenses in Athens and London respectively and included loadings or their equivalent. 20 The defendant filed an offer of compromise on 23 December 2004 and Mr Bountros filed an offer of compromise on 4 January 2005. On 1 January 2005 through to 8 January 2005, Mr Levy travelled to and stayed in Athens and between 8 January 2005 and 14 January 2005, Mr Levy travelled to and stayed in London. A total of 14 days international travel was claimed. 21 There was correspondence between MBP and Mr Levy as to the impact of GST on the fees to be charged to a client whose residence was outside of Australia. The net effect of that correspondence was that MBP advised that, in their opinion, GST was not payable; Mr Levy asked MBP to obtain a ruling from the Australian Taxation Office and/or indemnify him against any tax cost associated with not charging; and MBP advised Mr Levy that he should obtain his own advice and form his own conclusions. 22 On 10 March 2005, the matter was listed in the progressive list for 14 March 2005, on which date the trial commenced and the hearing judge, Barr J, stood the matter over for further hearing in Athens commencing 30 March 2005. 23 On 18 March 2005, there was mediation before the Honourable Trevor Morling QC and the matter, after some subsequent negotiations, was settled for an amount plus costs. It was later identified that the costs did not include a cancellation fee for Mr Levy, nor the success fees. 24 On 16 May 2005, Mr Levy rendered a memorandum of fees in the form of a tax invoice. It was rendered to MBP. It was for work performed between June 2002 and 22 March 2005. It was detailed and covers 83 pages. 25 On 15 June 2005, Mr Levy rendered an amended tax invoice incorporating his memorandum of fees that dealt with cancellation fees and success fees. No cancellation fee was charged for the period 7 February 2005 to 29 March 2005 but cancellation fees were charged for the subsequent hearing dates fixed commencing 30 March 2005 for 20 days (being half the days estimated for the trial which was to have commenced on 30 March 2005, the longer duration seemingly due to the delays associated with taking evidence overseas). 26 On 15 June 2005, MBP sought a costs assessment. The notice of objection to the costs, dated 2 December 2005, is a document consisting of 57 pages. On 29 March 2006, a further notice of objection to costs was filed, being a document of a further 47 pages. The Decision of the Costs Assessor 27 On 8 June 2006, the Costs Assessor issued an amended certificate as to the determination of costs. After credit was allowed for the sum paid on account to the barrister, it assessed an amount owing by MBP of $420,139.19 (including interest), which included an allowance of just under $5,000 for half of the filing fee relating to the costs assessment. An order was made that neither party pay costs, and interest was included in the above amount. The Costs Assessor attached reasons for his decision, of some 24 pages, plus a series of notations on the combined itemised fees that would allow both parties to understand precisely which fees were allowed, which were reduced, and which were disallowed and the reasons for same. 28 In effect, the Costs Assessor determined the application by: (a) allowing cancellation fees for 15 days on the basis of the representation of the barrister that cancellation fees had never been charged for "more than 3 weeks"; (b) allowing a loading for 14 days overseas work at $1,500 per day; (c) including a success fee; (d) requiring MBP to be liable directly for the fees; (e) requiring the payment of GST by the solicitors; (f) allowing the success fee on work performed after 23 October 2004 but not on cancellation fees. Review of Costs Assessment 29 On 6 July 2006, MBP applied for the decision of the Costs Assessor to be reviewed by a costs Review Panel, the grounds for which review was set out in an annexure of 18 pages. On 19 December 2006, the Review Panel set aside the Certificate of Determination issued on 5 June 2006, and reduced the costs assessed by an amount of approximately $173,000. It determined that interest was payable only on a proportion of an amount said to be owing and awarded interest at an amount of 9 percent, which interest was included in the amount of costs determined. 30 On the same date, i.e. 19 December 2006, the Review Panel ordered that Mr Levy pay the costs of the review, including GST. It also ordered that Mr Levy pay the costs of the proceedings before the Costs Assessor. 31 The statement of reasons by the Review Panel is a document of some 10 pages. Under the heading "IN RESPECT TO COSTS TO BE REVIEWED", the Review Panel sets out the summary of the submissions and/or grounds raised before the Review Panel and the process by which the Review Panel dealt with the matter. It noted certain terms of the costs agreement and determined that the cancellation fee provisions were unjust for the following reasons: (i) the cancellation fee was for the same amount as that fixed for the hearing, regardless of when the hearing was cancelled; (ii) the length of the cancellation fee relative to the time period before the hearing during which the cancellation fee might be triggered; (iii) while credit for fees earned in respect of other court work was given in the cancellation fee arrangements, no credit was given for non-court work that may have been undertaken; (iv) there was no requirement for mitigation, namely, to use reasonable efforts to seek other paid work. Further, the Review Panel: (v) determined that the success fee of 25 percent is both fair and reasonable and was an entitlement under the Legal Profession Act ; (vi) determined that GST was payable because the fees were payable by the solicitors who were residents of Australia; (vii) disallowed loading on the basis that there was a failure to indicate expressly that Mr Levy would be claiming the loading, and noted that the loading also covered travelling; and (viii) disallowed or reduced a number of particular items by noting the item number and the amount to which it was reduced, including, in most instances, the expression "reduced to nil". There were 34 items of which 14 related to the disallowance of the loading, 1 related to the review of evidence, 1 related to the conference preparation and travel to the United Kingdom, 4 related to Part 33 Particulars, 3 related to the summary of events document, 1 related to preparation for a motion, 1 related to the revision of a draft affidavit, 3 related to conference and travel, 2 related to conferences with solicitors, 1 related to a conference with a doctor and 1 related to a cancellation fee. The remaining two items related to the success fee of 25 percent added to item 985 and GST added to item 986. 32 The Panel also set out that it was allowing costs of the assessment and review process, because there had been a reduction in costs in excess of 15 percent, being a substantial reduction in the costs to be paid. Statutory Framework 33 During the course of the proceedings an issue arose as to the appropriate statutory provisions to apply to this appeal and to the costs assessment and review below. As already stated, the Bountros proceedings commenced in May 2001. The brief to Counsel was first delivered on 18 October 2001 and the first costs agreement was dated 22 October 2001. 34 Currently the provisions that apply to the process of costs assessment, review and appeal are the provisions under the Legal Profession Act 2004 (the 2004 Act). In 2001, the Legal Profession Act 1987 (the 1987 Act) applied. Each statutory regime allows for the assessment of costs charged by legal practitioners. There are, however, slightly different appeal rights under each statute (and slightly different jurisdiction in the costs assessment process). 35 MBP submit that the Review Panel had conducted its review, referring to the 2004 Act, and that the appeal to this Court should be conducted as if the 2004 Act applied. The 2004 Act commenced on 1 October 2005. The original costs assessment issued after the commencement of the 2004 Act. Of necessity, the application for review was made after the commencement of the 2004 Act and the review decision was issued after the commencement of the 2004 Act. 36 To the extent that the 2004 Act alters prejudicially the rights of Mr Levy, he relies upon s 30 of the Interpretation Act 1987 and in particular s 30(1)(c) of the Interpretation Act. That provision expresses the common law principle that the amendment or repeal of an Act or statutory rule "does not … affect any right, privilege, obligation or liability acquired, accrued or incurred under the Act or statutory rule". It is submitted on behalf of Mr Levy that the right or privilege to have the application determined under the Legal Profession Act 1987, is not affected by the amendment, due to operation of the Interpretation Act and by operation of the principles of statutory construction. 37 The commencement point for an analysis, being which of the Legal Profession Act 1987 (the 1987 Act) and the Legal Profession Act 2004 (the 2004 Act) applies, is the transitional provisions in the 2004 Act. Schedule 9 to the Legal Profession Act 2004 deals with savings, transitional and other provisions and by clause 3 of that schedule provides: "3(1) If anything of a kind required or permitted to be done under a provision of this Act was done under a corresponding provision of the old Act and still had effect immediately before the commencement day, the thing continues in effect on and after that day as if: (a) this Act had been in force when it was done, and (b) it had been done under this Act. … (3) Without limiting subclauses (1) and (2), if a provision of the old Act that corresponds to a provision of this Act would, but for its repeal by this Act, have applied in relation to anything done or being done or in existence before the commencement day, the provision of the new Act applies in relation to that thing, and so applies with any necessary adaptations. (4) This clause does not have effect to the extent that other provision is made by this Schedule or that the context or subject matter otherwise indicates or requires, and has effect subject to the regulations." 38 Clause 18(1) of the Schedule renders Part 3.2 of the 2004 Act applicable to a matter if the client first instructs the law practice on or after the commencement day. It provides: "18(1) Subject to subclauses (2) and (3), Part 3.2 of this Act applies to a matter if the client first instructs the law practice on or after the commencement day, and Part 11 of the old Act continues to apply to a matter if the client first instructed the law practice in the matter before that day. (2) Part 3.2 of this Act does not apply in respect of a law practice that is retained by another law practice on behalf of a client on or after the commencement day in relation to a matter in which the other law practice was retained by the client before that day, and in that case Part 11 of the old Act continues to apply. (3) If: (a) an application for assessment of costs was referred to a costs assessor for assessment under Part 11 of the old Act, and (b) the assessment was not commenced or completed before that day, the application may be dealt with under that Part as if that Part had not been repealed." 39 The relationship between Clauses 3 and 18 of the Schedule is that, subject to any other specific provision, in the circumstances before the Court, Part 11 of the Legal Profession Act 1987 applies, because the Bountros proceedings were commenced before 1 October 2005. 40 MBP rely upon Clauses 22 and 22A of the transitional provisions. Relevantly they are in the following terms: "22(1) An appeal or review that was pending under or in relation to any matter under the old Act immediately before 1 October 2005 is to be dealt with as if this Act had not been enacted, except in so far as a direction of the Supreme Court or the President of the Tribunal, as the case requires, under this clause otherwise provides. (2) The Supreme Court or the President of the Tribunal, as the case requires, may direct that the appeal or review proceedings be dealt with in accordance with the provisions of: (a) this Act, or (b) the old Act and this Act as regards different aspects of the proceedings, as indicated in the direction. Those provisions apply accordingly, and so apply with any necessary adaptations. 22A(1) A matter arising under the old Act may be the subject of an appeal or review made or applied for on or after 1 October 2005 if the appeal or review could have been made or applied for had this Act not been enacted. (2) The appeal or review may be made or applied for under the provisions of either the old Act or this Act (even if the matter could not otherwise be the subject of appeal or review under this Act if the matter had arisen on or after 1 October 2005). (3) The appeal or review may be dealt with under this Act (even if the matter could not otherwise be the subject of appeal or review under this Act if the matter had arisen after 1 October 2005), except in so far as a direction of the Supreme Court or the President of the Tribunal, as the case requires, under this clause otherwise provides. (4) The Supreme Court or the President of the Tribunal, as the case requires, may direct that the appeal or review proceedings be dealt with in accordance with the provisions of: (a) the old Act, or (b) the old Act and this Act as regards different aspects of the proceedings, as indicated in the direction. Those provisions apply accordingly, and so apply with any necessary adaptations." 41 The costs assessment, for which application was made on 15 June 2005, was governed by the provisions of the Legal Profession Act 1987 because it was a costs assessment in relation to a matter in which the law practice was first instructed prior to the commencement date of the Legal Profession Act 2004. The certificate determining the costs was issued by the Costs Assessor after the commencement date of the Legal Profession Act 2004 but was issued under Part 11 of the Legal Profession Act 1987. Likewise the provisions for an appeal to the Review Panel and/or an appeal from either the Costs Assessor or the Review Panel to this Court are dealt with under Part 11 of the Legal Profession Act 1987. The appeal to and the Determination of the Review Panel is not covered by Clause 22 of Schedule 9 because it was not an appeal or review that was pending immediately prior to 1 October 2005. The application for review and the Determination of the Review Panel may be subject to Clause 22A of Schedule 9 to the Legal Profession Act 2004. Such a review is a matter arising under the "old Act" that "could have been made or applied for had [the Legal Profession Act 2004] not been enacted". Clause 22A allows the appeal to be instituted under either Act and dealt with under the 2004 Act, subject to a contrary order of the Court or Review Panel. The Review Panel seems not to have turned its mind to the issue. No criteria are adumbrated upon which the Supreme Court would direct that the matter be dealt with in accordance with the provisions of the 1987 Act. 42 It may be that the provisions of Clause 22A of Schedule 9 have been inserted as a matter of abundant caution. On that basis, the provisions of Clause 18 are the leading provisions and Clause 22A provides a mechanism that the Court may adopt where there is difficulty with the application of Clause 18. For example, notwithstanding the application of clause 18 and the provisions of the Legal Profession Act 1987, there may no longer be panels established under the relevant provisions of the 1987 Act and it would be necessary to make directions that any appeal be heard by a panel established under the 2004 Act. 43 To the extent necessary, it seems, given its primary effect, that Clause 18 renders Part 11 of the Legal Profession Act 1987 of continuing effect to apply to matters in which the client first instructed the law practice before October 2005 (or counsel was briefed prior to that time) and, therefore, the 1987 Act ought continue to apply. Further, to the extent that rights and obligations are altered by the promulgation of the Legal Profession Act 2004, it seems appropriate that the Legal Profession Act 1987 ought continue to apply. 44 MBP refer to, and seek to distinguish, the judgment of the Court of Appeal in Doyle v Hall Chadwick [2007] NSWCA 159, on the basis that, in that matter, it made no difference to the rights of the parties whether the 1987 Act or the 2004 Act applied. Nevertheless, the judgment of the Court of Appeal is unambiguous and determines that the assessment "is required to be dealt with in accordance with the 1987 Act": Doyle v Hall Chadwick [2007] NSWCA 159 at [35]. The Court of Appeal did not determine whether any different result would be occasioned by the application of the 2004 Act, although that was the conclusion at first instance: see Hall Chadwick v Doyle [2006] NSWSC 1195 at [28], [29]. 45 If I be wrong and Clause 18 of the Schedule to the 2004 Act does not make the 1987 Act applicable, I would direct, pursuant to the terms of Clause 22A of the Schedule, that at least the substantive rights and obligations of the parties in the 1987 Act apply. The Court will hereafter deal with the matter on the basis of the 1987 Act and its provisions are the relevant provisions for the purpose of the determination of this appeal. 46 Further, I would direct that the Legal Profession Act 1987 apply because the work was done by Mr Levy at a time when it was in operation and the costs assessment provisions applicable to the costs agreements provided were the provisions, when performed, under the 1987 Act. Nature of Appeal to this Court 47 Mr Levy appeals and, to the extent required, seeks leave to appeal purportedly pursuant to the Legal Profession Act 2004. As earlier indicated, the proper construction of the schedule to the 2004 Act, particularly clause 18, is that, in a case where the costs relate to a matter originally briefed prior to October 2005, Part 3.2 of the 2004 Act does not apply and Part 11 of the 1987 Act continues to apply: see clause 18(1) of the Schedule to the 2004 Act at [38] above. The sections of the 2004 Act upon which the plaintiff relies in the summons before this Court, in order to commence these proceedings, are ss 384 and 385 of the 2004 Act. They are contained in Part 3.2 of the 2004 Act and, as a consequence, pursuant to the terms of clause 18 to the Schedule of the 2004 Act, do not apply to this matter. Part 11 of the 1987 Act applies. The equivalent provisions to ss 384 and 385 of the 2004 Act are ss 208L and 208M of the 1987 Act. As would be necessary and as is the case, ss 208L and 208M of the 1987 Act are contained in Part 11 of that statute. 48 Section 208L grants to a party dissatisfied with a decision of a Costs Assessor a right to appeal against the decision if the dissatisfaction is as to a matter of law arising in the proceedings. Section 208M of the 1987 Act allows the Court, in accordance with its rules, to grant leave to appeal against the determination made by a Costs Assessor, relevantly being an appeal that is not "as to a matter of law arising in the proceedings". For the purposes of ss 208L and 208M of the 1987 Act, the decision of the Review Panel is taken to be a determination of the Costs Assessor: see s 208KI of the 1987 Act (the equivalent being s 382 of the 2004 Act). 49 It is noteworthy that the provisions of s 208L of the 1987 Act do not confine a right of appeal to that which is solely a question of law, but the question must be a matter of law arising in the proceedings. The determination of what is a matter of law arising in the proceedings has been dealt with on a number of occasions in various contexts. I adhere to the view that I have hitherto expressed as to the appropriate delineation: see Kostas v HIA Insurance [2007] NSWSC 315 at [144]-[159]; Krishna v DPP (NSW) [2007] NSWCCA 318 at [44]-[50]. See the judgment of the High Court in Collector of Customs v Agfa-Gevaert Limited [1996] HCA 36; (1996) 186 CLR 389 at 394 to 395. 50 The four major grounds, upon which the plaintiff in these proceedings relies, (together with the ground raised by the defendant in its cross-claim) are, at least in part, questions of law. Certainly the issues going to the denial of procedural fairness, the absence or inadequacy of reasons, the construction of the Costs Agreement, and the jurisdiction of the Review Panel are grounds which raise decisions as to a matter of law arising in the proceedings. Two of the grounds in the summons, which deal with whether, respectively, the claiming of loading and the claiming of cancellation fees were unjust, apart from the jurisdictional issue raised thereby, do not raise a question of law. The matters are inextricably interwoven, raise important questions, and the decision below is attended with sufficient doubt that leave to appeal ought be granted. Leave to appeal is granted in relation to all of the grounds, to the extent such leave is necessary. 51 Once the appeal has been instituted, "the Supreme Court is entitled to make such determination, in relation to the summons, as, in its opinion, should have been made by the Costs Assessor" (or in this case the Review Panel) and, in relation to those matters, including those upon which leave has been granted, conducts the hearing by way of a "new hearing" and is entitled to admit fresh evidence, or "evidence in addition to or in substitution for the evidence received at the original proceedings": s 208L(3) of the 1987 Act (the equivalent being s 384(3) of the 2004 Act). Jurisdiction of the Costs Assessor and Review Panel 52 Counsel on behalf of Mr Levy originally submitted that neither the Costs Assessor nor the Review Panel had jurisdiction to determine the construction of the costs agreement. He also submitted that they did not have jurisdiction to determine the question raised in the cross-claim, namely whether GST is payable. Counsel relied upon comments of mine in Hall Chadwick v Doyle, supra, at [72] and following. There are at least two reasons why that submission is not open. The first, and most obvious, is that to the extent that my judgment in Hall Chadwick takes the view that the Costs Assessor and/or Review Panel does not have jurisdiction to decide the construction of the contract and/or issues of law of that kind, it was overturned by the judgment of the Court of Appeal in Doyle v Hall Chadwick, supra. Secondly, the passage on which the plaintiff relies was not, notwithstanding its infelicitous terminology, intended to expose a view that construction of documents, or questions of law, could not be decided by Costs Assessors. The very terms of s 208L of the 1987 Act would suggest otherwise. It was rather that, in the context of a submission that the Costs Assessor's Determination was final and could not be overturned by the Supreme Court, that the assessment of the Costs Assessor on the question of law was not a final determination but rather a determination in the course of the exercise of jurisdiction conferred by the Legal Profession Act as to the amount of the costs that could be charged, what were reasonable and/or what were not unjust. In other words, the passage upon which the plaintiff relies in the proceedings from my earlier judgment in Hall Chadwick was a passage confined to the question of the jurisdiction of a costs assessor to determine finally a question of law, in the face of an appeal to this Court. 53 As earlier stated, on the basis of the judgment of the Court of Appeal, in any event, the submission is not open. The Costs Assessor and the Review Panel had the jurisdiction to determine the construction of the Costs Agreements and the questions of law necessary to determine the amounts of fees payable in the matter before them. 54 The last issue of jurisdiction relates to the findings by the Review Panel that the cancellation fees (and possibly a finding that the loadings) were unjust. 55 There is a distinction between the jurisdiction of the Costs Assessor under the 2004 Act and the jurisdiction under the 1987 Act. The 2004 Act defines in s 4 the term "client" as including "a person to whom or for whom legal services are provided". There is no equivalent definition in the 1987 Act. Indeed the 1987 Act is at pains to differentiate duties to a "client" and duties to another "legal practitioner". 56 Thus, in the 1987 Act (with equivalent provisions in the 2004 Act), there is an obligation on a barrister or solicitor to disclose the basis of the costs of legal services to be provided to the client by the barrister or solicitor. Section 176 of the Act (the equivalent in the 2004 Act being s 310) has a further obligation that a barrister or solicitor retained on behalf of a client by another barrister or solicitor must disclose to that other barrister or solicitor the basis of the costs of legal services. By s 177, the barrister or solicitor to whom disclosure occurs pursuant to s 176 is under a consequential duty to include those costs in the disclosure to the client by that barrister or solicitor. In turn, s 182 of the 1987 Act (s 317 of the 2004 Act) treats separately a failure to disclose to a client under s 175, from a failure to disclose to another barrister or solicitor under s 175 or s 176. 57 The differences in the Act, on account of the insertion of the definition of client in the 2004 Act, occur when one is required to construe s 199 and following. Section 199 allows a client to apply for an assessment of the bill of costs given to the client. Section 200 of the 1987 Act allows a barrister or solicitor, retaining another barrister or solicitor to act on behalf of a client, to apply for an assessment. In s 199, "client" is defined, but not in a manner similar to the definition in s 4 of the 2004 Act. While pursuant to the terms of s 208A a Costs Assessor is entitled to look at the fairness and reasonableness of the amount of the costs in relation to work performed, the question of "unjustness" is subject to the provisions of s 208D of the 1987 Act. That section is in the following terms: "(1) A costs assessor may determine whether a term of a particular costs agreement entered into by a barrister or solicitor and a client is unjust in the circumstances relating to it at the time it was made." 58 It is noteworthy that the determination that a particular Costs Agreement is "unjust in the circumstances" is only in relation to a Costs Agreement entered into by a barrister or solicitor and a client, which, relevantly, does not include another barrister or solicitor acting in that capacity. The 2004 Act was amended, it seems specifically, to make applicable, to bills of costs between different legal practitioners, all of the provisions relating to bills of costs between legal practitioners, on the one hand, and clients, on the other. 59 In the circumstances before the Court, where the correspondence occurred between Mr Levy and MBP, and the express terms of the agreement are that instructions will not be conveyed otherwise than by solicitors, the agreements are made between MBP and Mr Levy. While MBP may, for all other purposes, be the agent of the client, in relation to costs agreements, this is not necessarily the case. Indeed as to costs agreements between MBP and the client, not only is MBP not the agent of the client, but they are the "opposite party" in such an arrangement. The mere fact that the costs agreement with MBP must, pursuant to the relevant provisions of the Act, include the disbursements and payments to Mr Levy, and the estimate of costs must include the estimates of Mr Levy, does not render the arrangements between MBP and Mr Levy an arrangement that amounts to a contract or costs agreement between the client and Mr Levy. 60 At all times, in these proceedings, the costs agreements were between Mr Levy and MBP and no other person. The Costs Assessor and the Review Panel so held and determined that MBP were liable for the fees to Mr Levy. Although for the purpose of GST argument MBP disputed this question, they did not do so on any more general basis or for any more general purpose. Nor is there (if there could be) a challenge to the Determination that MBP are, themselves, liable for the fees or to the finding of fact that the agreement was between MBP and Mr Levy, and no other party. 61 That is not to say that MBP would not (and did not) obtain the approval of the client on these questions. Ultimately the costs charged by Mr Levy to MBP would be the subject of a consequential charge from MBP to the client. Prudence, proper relations and the contractual duty owed by MBP would require MBP to obtain the approval of the client prior to entering into the "sub-contract" arrangements with Mr Levy. 62 In those circumstances the Review Panel did not have jurisdiction to determine whether the cancellation fees were, pursuant to s 208D (or any equivalent in the 2004 Act) "unjust in the circumstances relating to it at the time it was made". Nevertheless, because it may ultimately be determined that the 2004 Act was a more appropriate (or the only appropriate) regime to apply, I will deal with the issue of whether the fees were unjust. In any event, there was jurisdiction to deal with whether the fees were reasonable. Denial of Procedural Fairness 63 The application for review of costs assessment filed by MBP, is dated 5 July 2008 (sic) and was, in fact, filed on 6 July 2006. Paragraph 4 of the application is in the following terms: "4. The grounds for making the application for review are set out in the attachment marked 'A'." Attachment A commences with the preamble: "The grounds for making the application for review are as follows:" and then recites 18 pages of "grounds". 64 Those "grounds" from time-to-time used the term "submissions" to describe the document. The applicant for review used the term "costs review applicant submits" or "it is submitted" or "in addition to the submission above" etc. The reliance on those words, if the nature of the document were otherwise, would not itself make the attachment a submission. But the attachment made representations, put argument, and made representation as to facts, as well as reciting the ground or error said to arise from the assessment. An analysis of the entirety of the attachment to the application for review of costs assessment is that it represents, predominantly, a submission by MBP as to the manner in which the error of the Costs Assessor, otherwise identified briefly, has been made and how it ought be rectified. 65 The Determination of the Review Panel does not suggest that the document was not, in its entirety, taken into account. Even if the Review Panel were to have discounted any reliance upon the submission, there would be an appearance of unfairness and a real, if subconscious, risk of prejudice: Kioa v West [1985] HCA 81; (1985) 159 CLR 550 at 629. 66 The Review Panel, in a little less than two pages, extracted the true grounds of appeal. In order to extract those grounds, the Review Panel would have been required to read the whole of Attachment A, including the submissions in support of the application. The Appeal Panel does not, expressly or impliedly, disavow any regard to the remainder of the Attachment. As a consequence, it is a necessary inference that Attachment A was read and taken into account. Attachment A is a submission. 67 The provisions of sub-section 208KC(2) of the 1987 Act provide that the review is to be conducted on the evidence that was before the Costs Assessor and, "unless the Panel determines otherwise, the Panel is not to receive submissions from the parties to the assessment" or receive fresh evidence. 68 A proper analysis of the character of Attachment A to the application is that it is, predominantly, a submission. The Panel has not determined to receive submissions and it was not entitled to take account of Attachment A. 69 Moreover, Mr Levy submitted a document headed "Responses and Submissions in Response to Matters Raised in Application for Review" dated 4 September 2006. This document purported to deal with matters raised in Attachment A, provided to the Review Panel by MBP. 70 The Review Panel in its statement of reasons, paragraph 4(a)(iii) made clear that it did not determine to receive any submissions and carried out the review on the basis of the documents before the Assessor. On the basis of that comment, Mr Levy's document dated 4 September 2006 was not taken into account. The document certainly was not referred to by the Review Panel in its reasons. 71 The Review Panel is in error. It has both read and taken into account submissions from MBP in circumstances where it has not determined so to do pursuant to the provisions of s 208KC(iii) of the 1987 Act (which, because the Panel refers to the 2004 Act is referred to as sub-section 375(3) of the 2004 Act) and it has also received submissions from one party and refused to take into account or receive submissions from the other. 72 While the Review Panel states in its reasons that it "had regard to the documents before the Costs Assessor, the Costs Assessor's Certificates and Reasons and the Costs Assessor's marked up Bill" (see paragraph 4(a)(ii) of the reasons of the Panel of 19 December 2006), it is obvious, from the terms of paragraph 4(a)(i) of the reasons of the Panel of 19 December 2006, to which reference has already been made, that attachment A to the application for review has been read and the Review Panel has had regard to that document. 73 In the circumstances, and given the tasks reposed in the Review Panel, the rules of procedural fairness required that each party should have the opportunity to contradict information put to the Panel by the other party. In declining to have regard to the contradictory material sought to be proffered by Mr Levy, the Review Panel has denied Mr Levy procedural fairness. 74 MBP relies on the material before the Costs Assessor (there are eleven boxes of material) and submits that Annexure A is no more than a summary of material otherwise available and could not have affected the result and/or did not deny Mr Levy natural justice. 75 It is a fundamental principle of the common law (and a necessary implication in the grant of any statutory power) that, unless expressly excluded, or excluded by words of necessary intendment, a power to affect any person adversely, by decision having statutory force, requires that such person be given notice of the case and an opportunity to reply to it: Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596; Kioa v West, supra, at 582. Whether the evidence or material was otherwise before the Review Panel, Mr Levy was entitled to have an opportunity to reply to the submissions made as to the effect and cogency of the material. 76 Further, assuming, without accepting, that the impact of the further submissions was not great, it is for MBP to demonstrate that they had no effect, failing which there is error that should, subject to that which immediately follows, be remedied: Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141; Re Refugee Review Tribunal; Ex parte AALA [2000] HCA 57; 204 CLR 82 at [4] per Gleeson CJ, [59] per Gaudron and Gummow JJ, [104] per McHugh J, [131] per Kirby J, [172] per Hayne J and at [211] per Callinan J. 77 The subjection mentioned in the preceding paragraph relates to the discretionary nature of orders in the nature of prerogative writ, which discretion may be exercised against issuing orders if the Court would otherwise come to the same view on the issues of fact and law. An appeal of this kind allows similar considerations. The exercise of discretion cannot be ascertained before dealing with the other grounds of appeal. The exercise may be informed by whether such denial of fairness has been corrected in this appeal: Calvin v Carr [1980] AC 574. Provision of Sufficient Reasons 78 Mr Levy submits that a statement of the reasons for the determination did not accompany the Determination of the Review Panel. 79 The provisions of s 208KG of the 1987 Act (s 380 of the 2004 Act) require the Review Panel to give reasons for any determination. 80 The Act provides a right of appeal and the common law generally imposes on a decision maker an obligation to provide adequate reasons in circumstances where there is a right of appeal from that decision. This is so that the appellate tribunal is able to consider whether there has been error: see Campbelltown City Council v Vegan [2006] NSWCA 284 at [20] to [31]; Pettitt v Dunkley (1971) 1 NSWLR 376 at 382.C, per Asprey JA, and at 388.C-.F and 389.D, per Moffit JA, with whom Manning JA agreed; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 256-259, 268-269. This general principle is trite. 81 However, as summarised at paragraph [31] above, reasons were given by the Review Panel. The reasons of the Tribunal need not be compelling or even logical. It is sufficient that the Tribunal discloses the process by which it arrived at its conclusions. Lack of logic is not an error of law: Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321. Nor is a tribunal required to deal with every argument in minute detail: Re Our Town FM Pty Limited and Newcastle Stereo Radio Pty Limited v Australian Broadcasting Tribunal and Newcastle FM Pty Limited [1987] FCA 301; (1987) 16 FCR 465. In Our Town FM, Wilcox J said: "There are, of course, limits upon the extent of the obligation arising out of s.25B. It is not necessary that the report deal with every matter which was, or which might have been, raised in the proceedings. It is enough that the findings and reasons deal with the substantial issues upon which the decision turned: see Tatmar at pp385-386 and Bisley Investment Corporation v. Australian Broadcasting Tribunal (1982) 40 ALR 233 at p 245. In Ansett Transport Industries (Operations) Pty. Limited v. Wraith (1983) 48 ALR 500 at p 507 Woodward J. described the obligation under s.13 of the Administrative Decisions (Judicial Review) Act in these terms: 'The passages from judgments which are conveniently brought together in Re Palmer and Minister for the Capital Territory (1978) 23 ALR 196 at 206-7, serve to confirm my view that s13(1) of the Judicial Review Act requires the decision-maker to explain his decision in a way which will enable a person aggrieved to say, in effect: "Even though I may not agree with it, I now understand why the decision went against me. I am now in a position to decide whether that decision has involved an unwarranted finding of fact, or an error of law, which is worth challenging". This requires that the decision-maker should set out his understanding of the relevant law, any findings of fact on which his conclusions depend (especially if those facts have been in dispute), and the reasoning processes which led him to those conclusions. He should do so in clear and unambiguous language, not in vague generalities or the formal language of legislation.'" (at 481) See also the discussion on this issue by the Full Court of the Federal Court of Australia (Spender, Foster and O'Loughlin JJ) Re Gavin Roy McAuliffe v Secretary, Department of Social Security [1992] FCA 483; (1992) 28 ALD 609 at 614-617. 82 The Review Panel expressed the findings on which its conclusions depended sufficiently to avoid error of law based upon the inadequacy of its reasons. The Availability of Fees for Overseas Loadings 83 The Appeal Panel took the view that no loading was able to be charged by Mr Levy. That view was a result of the construction of the various costs agreements to which Mr Levy was party. MBP, before this Court, supports the construction of the Review Panel and submits that the Memorandum of Advice of 14 December 2004 was not a costs agreement nor was it a basis upon which any of the parties agreed Mr Levy would be paid. 84 As outlined in [10] above and following, the first costs agreement was for the purpose of providing preliminary advice and early preparation work. At the time it was provided, neither Mr Bountros nor MBP had independent advice upon which either could rely as to the prospects in the proceedings that had been commenced. 85 The second costs agreement makes clear that it is impossible to provide an accurate estimate of total fees but provided a basis upon which the fees could be calculated. At the time of providing the second costs agreement, the information before Mr Levy was that which was contained in the original Observations to Counsel, namely, that the Bountros family resided in Greece and were prepared, as required, to travel to Australia. The body of the letter, being the costs agreement, relevantly to this issue, contains no reference to loadings. However, the annexure, which forms part of the costs agreement, has a reference to loadings in numbered paragraph 12 thereof. The figures "1,500" that are inserted in the square brackets in that paragraph are, in the original, in the same type face as the body of the description under the heading and have been replicated, to the extent possible, in [11] above. 86 Annexure 1 to the letter of 16 October 2003, of which the reference to loadings forms part, is provided as the "guide to the elements of an estimate" in the body of the costs letter. There seems to be no reason why a charge for loadings did not form part of the costs agreement. The existence of a "-" after the dollar sign, as distinct from the use of the word "unknown" after other figures in the annexure, does not reveal an intention not to charge a loading. Rather it reveals that, on the instructions at that time current, there would not be occasion for the charging of loading because the case would not be conducted away from the central business district. Nevertheless the loading is included in the annexure for the purpose of indicating that, if it were the case that the proceedings were conducted away from the central business district of Sydney, a charge of $1,500 per day plus 10 percent GST would be applicable. 87 A proper construction of the costs agreement includes a disclosure that a loading would be paid for cases conducted away from the central business district, if, notwithstanding the instructions received, it was necessary to perform such work. 88 Further, the reference in the loading to "travelling time", "travelling expenses" and "being away from chambers" is to be read in the context that the fees otherwise rendered would be based upon a daily fee for the period 10am to 4pm and did not include additional time spent out of normal court hours for conferences and preparation. It is clear from the terms of the second costs agreement, and the correspondence from MBP makes clear, that the understood structure of Mr Levy's practice was that other work would be performed after 4pm (or before 10am) either for MBP in the Bountros proceedings or for other solicitors or other clients and would be the subject of separate charging. The $1,500, which was cited as the fee for work away from the central business district, was to compensate for the inability to do such other work for the time taken in travelling, and for the incidental expenses in travelling. It was not intended to cover the costs of travel, nor could it have. For example, if the proceedings required a day in Perth, the $1,500 would not cover the cost of travel. It is unnecessary to observe, but obvious, that it does not cover the cost of travel to Greece and London, which are the destinations relevant to these proceedings. At a general fee for conferences and preparation of $600 per hour as disclosed in paragraph 3 of the second costs agreement, the loading was the equivalent of out-of-hours work of 2.5 hours. The kind of work undertaken by Mr Levy is unlikely to have been conducted in suburban Sydney and the time lost in travel (assuming only one day away) would be far greater than 2.5 hours. If more than one day's absence was required then the time lost for chamber work would be even greater per day. 89 The second costs agreement makes clear that, to the extent that it is necessary to conduct work away from the central business district, a loading of $1,500 per day was payable. That loading would be charged only "if applicable" and, at the time of the second costs agreement, was not an anticipated charge. The amount did not include the actual cost of travel but rather incidental expenses, travelling time and loss of other work. To the extent that the Review Panel has based its determination on a contrary construction, it discloses error, and it is an error of mixed fact and law. Further, $1,500 is an amount that is not unreasonable or unjust. Necessarily the loading would apply only after 16 October 2003. The Availability of Cancellation Fees 90 Although put but faintly, MBP submits that cancellation fees are not available, it seems in any circumstances, because cancellation fees are not reasonably incurred costs of the provision of legal services but, rather, a fee for work not done. Further, MBP submits that the order of the Court setting the matter down for trial did not set aside a period of 6 weeks for the hearing but rather set the matter down for hearing on a particular date with an estimated duration of 6 weeks. As a consequence of the difference in the Court Order, a cancellation fee does not arise because, technically, the proceedings were not set down for 6 weeks. 91 In the event that each of those submissions is unsuccessful, MBP submit that the Review Panel Determination is correct and the cancellation fees are unjust or unreasonable. 92 There can be no doubt that in their terms, the second and third costs agreement entitle Mr Levy to render fees that include a cancellation fee of some kind, in certain circumstances. The terms of the agreements and the particular letter relating to the cancellation fees have been set out above. 93 MBP rely upon the dicta of Wilcox J in Re Commissioner of Australian Federal Police v Razzi (No 2) [1991] FCA 267; (1991) 30 FCR 64. His Honour in that judgment said at page 67: "I do not think that a solicitor-client order would in fact enable recovery of 'cancellation fees'. A solicitor-client costs order enables the recipient of the order to recover the actual costs, reasonably incurred, of all work reasonably required and actually performed in connection with a matter. But it does not extend to fees for work not done. However, even if there was a basis for recovery of 'cancellation fees', I would require a deal of persuasion ever to make an order which would have the effect of permitting a party to recover such payments from someone else. The charging of 'cancellation fees' by some barristers seems to be a practice of very recent origin. In 21 years at the bar, from 1963 to 1984, I never heard of such fees being asked. There were, of course, occasions when cases were suddenly adjourned, or when they took less time than had been estimated, so that the barristers briefed in the matter found themselves unexpectedly out of court. Very often they would have refused other work because of the case and its estimated duration. But, as I understood the situation, barristers generally accepted that any financial loss caused by such circumstances was to be borne by them. Any disadvantage had to be balanced against the advantage conferred by the rule which permits barristers to charge a full fee on a matter settled after delivery of the brief but before any hearing. This approach was fair. The unexpected time out of court was rarely the personal fault of the barrister's client, or even of the opposing party. Moreover, it was right in principle. The practice of demanding 'cancellation fees' can rest only on the premise that, if a case does not proceed or finishes early, the barrister will be left without remunerative work. But, except perhaps for beginners at the bar who are unlikely in any event to be able to command a 'cancellation fee', the premise is rarely well-founded in point of fact. Most established barristers find that their problem is over-employment, not under-employment. For most, some unexpected time out of court is a welcome opportunity to catch up with chamber work. At a time when legal fees are so onerous as to exclude from significant litigation all but the wealthy and the legally-aided, any new practice which further increases costs requires meticulous justification. I am not aware of any attempted justification of 'cancellation fees'." 94 There are like sentiments expressed by the Federal Court (Einfeld J) in Stefanou v Fairfield Chase, unreported, 10 December 1993. See also R v Martinello [2005] ACTSC 109, per Connolly J. 95 It would be with great reluctance that I would depart from any statement of principle of Wilcox J. However, it must be said that much has changed in the conduct of a barrister's practice from the period ending in the first half of the 1980's on which his Honour's experience was based. First, it was a 21-year period during which the level of specialisation at the Bar was not as manifest as is the case nowadays. Secondly, while it is true that a significant number of barristers resisted (either on their own account or at the urging of their instructing solicitors) demanding cancellation fees, it is a not uncommon practice. 96 Further, and perhaps more relevantly, this matter deals with the payment of cancellation fees by agreement, not the Court ordering one party to pay another party's fees, including cancellation fees, in circumstances where the party who is being ordered to pay costs has had no say in the level of those fees or the method of their calculation. In any event, such issues go to the reasonableness of the fee not whether it is capable of being rendered. 97 In a perverse way, the argument that cancellation fees are not properly the subject of a costs agreement may not assist MBP. The obligations to disclose to clients the basis of costs is an obligation to disclose "the basis of the costs of legal services to be provided" (s 175 of the 1987 Act and ss 176(1), 177(1), 184(1), which in turn impacts upon the whole of Division 3 and the terms relating to costs agreements). Further, the provisions of s 192(1) require that a bill of costs by a barrister or solicitor "for providing legal services" must be sent before the barrister or solicitor may commence proceedings for the recovery of those costs. It is that bill of costs that is then dealt with in ss 193, 194, 195, 199, 200, 201 of the 1987 Act. If, as I understand the submission of MBP, cancellation fees are not costs for the provision of legal services, they are not covered by those provisions and could never be the subject of a costs assessment, application for which is made under s 201, and there would be no prohibition on proceedings for their recovery. 98 The more modern view of cancellation fees was expressed by McDougall J in Wilkie v Gordian Runoff [2005] NSWSC 873 in which, in the course of construing a directors' and officers' liability insurance policy, his Honour was required to deal with the reasonableness of payments in advance to counsel (prior to recent amendments to the Bar Rules) and the amount of cancellation fees. His Honour said: "13. The hearing of the charges is expected to occupy some 6 to 12 weeks. There will be a substantial amount of work to be done beforehand. It is apparent that both senior and junior counsel will be required to devote at least 2 months, and it may be in excess of 4 months, to virtually full time work in preparation for the hearing of the charges and for the hearing itself. In those circumstances, each counsel required payment in advance of an amount equal to 20 days' fees, on the basis that the amount would be payable regardless of the duration of the hearing (or, indeed, regardless of whether the hearing proceeded at all). 14 The ordinary situation is (and, at least in theory, the universal situation once was) that the lay client instructed a solicitor; the solicitor retained counsel; counsel looked only to the solicitor for the payment of their fees; and the solicitor looked to the client for payment of all fees (including counsel's fees). Those days have passed. However, even when that was the position, it was customary for solicitors to require clients to put them in funds to pay estimated disbursements, including counsel's fees, before undertaking work; specifically, before retaining counsel. The reasons why this was so are obvious. … 17 Equally, it is a fact of life that where counsel are retained to work exclusively on one matter, they must reject all other offers for work during the currency of that retainer. Even with capable counsel, it is not always possible to go out and find other work in replacement if such a retainer comes to an end abruptly, unexpectedly and early. Thus, it is common for counsel retained in such matters to require an agreement to pay some sort of cancellation fee. Whether or not that practice is reasonable depends, I think, more on the amount of the fee demanded, and the events by reference to which it is payable, rather than the concept." I agree with his Honour's comments. 99 As to the technical issue, it seems that a fee agreement, which includes a cancellation fee, is none the less an agreement about the costs of the provision of legal services. In an example based on this case, the costs of the provision of legal services up to and including 7 February 2005, calculated by reference to the period between the cancellation of the hearing and the previously proposed first day of the hearing, include an amount for up to three weeks of daily fees. It is no different to a consultant or person working on commission charging a fee for work based on a percentage of the amount involved or value of property. The cost bears no direct relationship to the time spent on work, but is still a cost for the provision of the work in question. Indeed, Mr Levy expressed it in that manner in the second costs agreement when he wrote: "The terms on which I will undertake the work required of me are as follows" and cancellation fees were part of that which followed. 100 I am of the view that cancellation fees, as a matter of principle, if the subject of agreement, are properly categorised as the costs of the provision of legal services to the other agreeing party. 101 The second construction aspect relates to the precise orders made by the Court in fixing the hearing. In the Common Law Division, in which the Bountros proceedings were commenced, a long trial is generally fixed for commencement on a particular date and will, subject to any subsequent application or order of the Court and the availability of the judge, run to its completion. The provisions of paragraph 14 of the second costs agreement dealt with the situation where the case does not proceed on the appointed date fixed for the hearing and allows for the fees for each day set aside for the hearing of the case to be payable as cancellation fees, offset by fees earned in respect of other paid court work subsequently received. 102 MBP, as earlier outlined, claims that the Court never set aside six weeks. However paragraph 14 of the second costs agreement does not, in terms, speak of the Court setting aside six weeks or any time. It refers to the Court fixing a hearing date and otherwise requires payment for the days set aside for the hearing. Given the ordinary practice in the manner of fixing matters in the Professional Negligence List (or the General Case Management List) in this Division, which is not a practice generally for special hearing fixtures of precise duration, it seems that the reference to the dates fixed is a reference to the first day fixed for hearing in any block of dates and the reference to "each day set aside for the hearing" is a reference to the days for the hearing set aside by counsel on the basis of the estimates accepted by the Court as to the duration of the hearing. As a consequence of that construction it would seem cancellation fees would, as a matter of construction, be payable. 103 I turn then to the circumstances of the charging and payment for the cancellation and in particular to the aspects of the cancellation fees raised in the reasons of the Review Panel. Nowhere in the reasons of the Review Panel is reference made in the context of cancellation fees to the fact that this fee agreement (at least from the time of the second costs agreement) is a fee agreement which is reached in the context of a competing claim for the time of Mr Levy for another large professional negligence matter. Further, MBP (on their own behalf and/or on behalf of their clients) was seeking to have Mr Levy reject other paid work and set aside a significant period of time on the basis that, if the proceedings were not successfully determined in favour of Ms Bountros, Mr Levy would be paid for none of the time set aside or utilised. Some aspects of that arrangement are recompensed by the success fee of 25 percent to which reference has been made. However, the Review Panel ought to have had regard, in determining the reasonableness of a cancellation fee, to the proposition that Mr Levy may have been setting aside six weeks and conducting a hearing of six weeks for Ms Bountros and be paid no fees (I leave aside issues of disbursements) for that time. 104 In proceedings of this kind, which are more and more highly specialised, Mr Levy was being asked to forgo other paid work and set aside six weeks. If the proceedings were unsuccessfully concluded Mr Levy would be foregoing payment of fees. It seems not unreasonable that if the matter is successfully concluded on the first day of the trial and other work has been foregone, Mr Levy's opportunity cost should be recompensed in the manner that the parties have agreed, namely, by the payment of a cancellation fee. 105 It does not seem that the Review Panel paid any regard to the lead time necessary for the undertaking of other court work in the area of specialty in which Mr Levy practises. 106 The cancellation fee per day was, as outlined and criticised by the Review Panel, for the same amount as that fixed for the hearing. This seems to be a somewhat illogical criticism of the amount of the cancellation fee. Assuming, as I do, that the cancellation fee was an amount that was intended to compensate for the inability, otherwise, to obtain and charge for work of the kind normally undertaken by Mr Levy, it would be both appropriate and reasonable for the amount fixed for any such cancellation fee to be an amount up to and including, but not more than, the daily fee foregone. 107 The cancellation fee, agreed to by the parties, varied depending upon the period between the date of the cancellation of the hearing and the date upon which the hearing was to have otherwise occurred. It is therefore not the case, as stated by the Review Panel, that the length of the cancellation fee was not relative to the time period before the hearing during which the cancellation fee might be triggered. Ultimately, it is a question of practice whether three weeks' cancellation fee on the first day of a hearing was an appropriate period of time. If the reference by the Review Panel is to the period from 1 December 2004 to 4 February 2005, that is essentially a period of three weeks' term time, during which it would be all but impossible to obtain work of a similar kind to that normally undertaken by Mr Levy. The period, in the circumstances, does not seem unreasonable. 108 The third criticism made by the Review Panel on the reasonableness of the cancellation fees relates to the absence of credit for other than court work performed during the period otherwise set aside by Mr Levy for the hearing. As earlier stated, the basis of the calculation of fees by Mr Levy was that the daily fee was rendered for the period from 10am to 4pm and further charges were made for any work performed beyond those hours. Some of the work performed beyond those hours would be preparation and advice work for other matters and would be charged to other solicitors and/or clients in the same way that the pre-trial preparation, conference and advice work was charged in relation to the Bountros proceedings. To deduct from the cancellation fee any fee charged for non-court work would, on the basis of the practice disclosed and on the evidence before this Court, mean the non-payment of any cancellation fee and reduce the fee for amounts that would have been earned if the trial had continued. This is because on all or most days work is performed by Mr Levy outside court time on non-court work. There is, no doubt, a point at which the amount of non-court work may be such that it could not have been undertaken while the hearing proceeded. But to declare the cancellation fee unreasonable because it takes no account of non-court work undertaken is, as a proposition of general principle, one that does not withstand scrutiny. 109 Lastly, the Review Panel held that the cancellation fees were unjust or unreasonable because there was no requirement for mitigation, namely, to use reasonable efforts to seek other paid work. First, it cannot be the case that Mr Levy would be required to undertake "any" other paid work to "mitigate" the loss (if it be a loss). The requirement to use reasonable efforts to obtain other paid work would be a requirement to undertake other paid work of a kind and at a level usually undertaken by Mr Levy. It cannot be the case that, for example, Mr Levy would be required to undertake a family law case, with which, for present purposes I will assume, he has no particular familiarity. Likewise, he could not be expected to be required to undertake work not appropriate for counsel of his experience, expertise and seniority. Otherwise, the necessity to seek and undertake work offered within the experience, expertise and seniority appropriate to Mr Levy would be implied into the contract. Insofar as the contract provided for the reduction of the cancellation fee by an offset of any fees earned in respect of other paid court work, there is a necessary implication that other paid court work, befitting the experience, expertise and seniority of Mr Levy, would be sought, and if offered, obtained. This is a condition implied in order to give business efficacy and effect to the totality of the provisions relating to the charging of cancellation fees: see later in this judgment for the principles in implying such terms. However, it must be borne in mind that there are restrictions on the capacity of counsel to "tout for work". 110 To the extent available in these proceedings, and to the extent that the Court is entitled to deal with this issue, the charging of cancellation fees was reasonable, was part of the agreed costs arrangements and is not rendered unjust by any factor adumbrated by the Appeal Panel. 111 Nothing in this judgment should be taken as a general proposition that all counsel in all cases can reasonably and justly charge cancellation fees. In most cases, and for most counsel, cancellation fees would be unjustifiable. This judgment deals only with this appeal, relating as it does to senior counsel engaged "on spec" in particularly specialised work for which the lead time is lengthy and during which he has, in fact, foregone other paid court work. 112 I then deal with the amount of the cancellation fee. Properly construed, the costs agreement entitled Mr Levy to charge a cancellation fee for the vacation of the hearing that was to have commenced on 7 February 2005. It seems that the third Costs Agreement confirms that the previous Costs Agreement provided for a cancellation fee and allowed for a graduated scale on a particular basis. The third Costs Agreement, as noted by the Costs Assessor, "reduces" the liability for cancellation fees in some eventualities. A strict application of the terms of the third Costs Agreement would result in the third Costs Agreement not qualifying the terms of the cancellation fee established in the second Costs Agreement, in the current circumstances. This is because the graduated scale depends upon the case settling on or before 7 February 2005 or during the trial to commence on 7 February 2005. The case did not settle in that period and did not commence on 7 February 2005. The case was adjourned and the hearing dates vacated until the matter was re-listed before the Court for the purposes of listing the hearing, which then commenced on 14 March 2005. The further hearing of the matter, after the first date of the trial, being the dates commencing 30 March 2005, were again vacated because of the agreement in principle and the ultimate settlement of the matter arising from the mediation before the Honourable Trevor Morling QC. 113 If the third Costs Agreement does not apply to qualify the cancellation fees otherwise able to be charged, paragraph 14 of the second Costs Agreement applies and there was an entitlement to charge for each day on which the trial did not proceed and for which time had been set aside. That was every working day between, and including, 7 February 2005 and 21 March 2005, except 14 March 2005. Further, it would seem that further cancellation fees would be payable from 30 May 2005 until 11 June 2005. I am not suggesting that such a charge would be either reasonable or just. Even treating the third Costs Agreement as applying to the period from 14 March 2005, the necessary changes being made, a period of six weeks cancellation fee would have been able to be rendered. 114 Mr Levy ultimately claimed a period of 20 days for cancellation fees. The Costs Assessor allowed a period of 15 days, determining that a claim based upon the strict interpretation of the costs agreement of 57 days would be unjust. In the proceedings before this Court, Mr Levy claims only a reinstatement of the Costs Assessor's Determination. I do not find a claim for 15 days' cancellation fee, in the particular circumstances of this matter, to be unjust, unreasonable or unfair. The amount of $6,000 per day is appropriate. 115 Further, I accept the analysis of the Costs Assessor as to the relative bargaining position of MBP and Mr Levy and the capacity of MBP to understand precisely the terms to which it was agreeing, as well as their capacity to explain in detail the effect of the terms and the custom and practice of legal practitioners to their client. GST 116 The Costs Assessor Determined the application before him. Except as to the question relating to GST, no notice of contention or cross-summons seeks to challenge the assessment of the Costs Assessor or support the decision of the Review Panel on a basis other than that adumbrated by the Review Panel. Each of the Costs Assessor and the Review Panel took the view that the Costs Agreements were between Mr Levy, on the one hand, and MBP, on the other. The Review Panel expressly came to the view that MBP were not acting as mere agents of the client and agreed with the Costs Assessor's reasons in that regard. As has been made clear earlier, I, too, agree with the Costs Assessor's analysis and independently come to the view that the agreements are between Mr Levy on the one hand and MBP on the other. In circumstances other than the provision of legal services by legal practitioners, such a contract would be a simple sub-contract arrangement in which, in that analogy, the solicitor would be the principal contractor to the client and the barrister a sub-contractor to the solicitor. The arrangements traditionally made between counsel and solicitors generally, but not universally, continue to be applied. Nowadays, of course, there are direct access clients, arrangements for which would be quite different. Further there can be arrangements in which the solicitor instructs but the costs agreements are made not only with the solicitor but also with the client and, sometimes, only with the client. None of those arrangements apply to the circumstances of the Costs Agreements between Mr Levy and MBP. 117 Aside from the cross-summons, no submission is made that the assessment by the Costs Assessor and the assessment of the Review Panel in relation to the parties to the Costs Agreements were in any way incorrect. 118 This issue is relevant and dealt with in part in relation to the question of whether the Costs Agreements were just in all of the circumstances and whether there is jurisdiction to deal with that issue. However, it is also relevant to the question raised by the cross-summons, namely, whether GST is payable in relation to the fees charged by Mr Levy. 119 The amount of GST in dispute is not insignificant. For the purposes of this issue, notwithstanding that the facts are not admitted by Mr Levy, it is accepted that at all times the plaintiff (and her tutor) resided outside of Australia. The cross-summons raises a question of law and is entitled to be raised without leave. To the extent leave is necessary, leave would be granted. 120 For the purposes of the submission on GST, and it seems only for that purpose, MBP submits that it acted as disclosed agents for the client and, whether or not that is the case, the supply of legal services by Mr Levy was to the client. 121 Mr Levy puts the submission that there is no finding of fact that the client (or the tutor) were resident outside of Australia at all relevant times. I do not accept that submission. The documents tendered in these proceedings refer to the residence of the plaintiff and her family. No other document is inconsistent with the residence being outside Australia and the document, tendered for all purposes, is evidence of the fact. I find that Ms Bountros was not a resident of Australia and was, at all relevant times, a non-resident of Australia. 122 As to the usual agreement and common practice for arrangements for barristers, particularly senior counsel and solicitors, like the Review Panel, I accept the statements of practice made by the Costs Assessor. Further I accept the submission made as to the effect of the analogous decision of Gillard J in Dimos v Hanos & Egan [2001] VSC 173. The judgment of the Victorian Supreme Court is persuasive on the usual practice and authority of a solicitor, namely, that a retainer between solicitor and client, while allowing the solicitor to retain counsel, did not authorise the solicitor to enter into a contract on behalf of the client with the barrister. Further the terms of the correspondence between Mr Levy and MBP are inconsistent with an agreement between the barrister and the client. If there were any such agreement, Mr Levy has not disclosed fees directly to the client and the agreement would be unenforceable (see s 182 of the 1987 Act and s 317 of the 2004 Act). If any such agreement existed, it would be an agreement in addition to an agreement with MBP, not in substitution to it. 123 The first issue, therefore, is whether GST is payable at all. Relevantly, in order for GST not to be payable (and therefore not to be able to be charged) the legal services would need to be provided to an overseas resident. The legal services provided by Mr Levy may well be (and indeed I would find were) legal services for the benefit of the client who, on the above statement, was an overseas resident. That is a different question than the question posed by the GST legislation. The terms of s 38-190 of the GST Act (A New Tax System (Goods and Services Tax) Act (Cth) 1999) is in the following terms: "(1) The third column of this table sets out supplies that are GST-free (except to the extent that they are supplies of goods or * real property): Supplies of things, other than goods or real property, for consumption outside Australia Item Topic These supplies are GST-free (except to the extent that they are supplies of goods or *real property)... 1 Supply connected with property outside Australia a supply that is directly connected with goods or real property situated outside Australia. 2 a supply that is made to a *non-resident who is not in Australia when the thing supplied is done, and: 2 Supply to *non-resident outside Australia (a) the supply is neither a supply of work physically performed on goods situated in Australia when the work is done nor a supply directly connected with *real property situated in Australia; or (b) the *non-resident acquires the thing in *carrying on the non-resident's *enterprise, but is not *registered or *required to be registered. a supply: 3 Supplies used or enjoyed outside Australia (a) that is made to a *recipient who is not in Australia when the thing supplied is done; and (b) the effective use or enjoyment of which takes place outside Australia; other than a supply of work physically performed on goods situated in Australia when the thing supplied is done, or a supply directly connected with *real property situated in Australia. a supply that is made in relation to rights if: 4 Rights (a) the rights are for use outside Australia; or (b) the supply is to an entity that is not an *Australian resident and is outside Australia when the thing supplied is done. 5 Export of services used to repair etc. imported goods a supply that is constituted by the repair, renovation, modification or treatment of goods from outside Australia whose destination is outside Australia. (2) However, a supply covered by any of items 1 to 5 in the table in subsection (1) is not GST-free if it is the supply of a right or option to acquire something the supply of which would be * connected with Australia and would not be * GST-free. (2A) A supply covered by any of items 2 to 4 in the table in subsection (1) is not * GST-free if the acquisition of the supply relates (whether directly or indirectly, or wholly or partly) to the making of a supply of * real property situated in Australia that would be, wholly or partly, * input taxed under Subdivision 40-B or 40-C. Note: Subdivision 40-B deals with the supply of premises (including a berth at a marina) by way of lease, hire or licence. Subdivision 40-C deals with the sale of residential premises and the supply of residential premises by way of long-term lease. (3) Without limiting subsection (2) or (2A), a supply covered by item 2 in that table is not GST-free if: (a) it is a supply under an agreement entered into, whether directly or indirectly, with a * non-resident; and (b) the supply is provided, or the agreement requires it to be provided, to another entity in Australia. (4) A supply is taken, for the purposes of item 3 in that table, to be a supply made to a * recipient who is not in Australia if: (a) it is a supply under an agreement entered into, whether directly or indirectly, with an * Australian resident; and (b) the supply is provided, or the agreement requires it to be provided, to another entity outside Australia." 124 Relevantly, a supply of services is GST free if it is a supply of services made to a non-resident who is not in Australia when the services are supplied. 125 The fact that the legal services supplied by Mr Levy are for the benefit of the client does not mean that the supply is made to the client. The Costs Agreement is made between MBP and Mr Levy. The advices supplied by Mr Levy were supplied to MBP. The preparation work was for the purpose of the provision of advices or for the preparation and provision of work in Court, which work was supplied to MBP for the benefit of MBP's client. Goods and Services Tax is payable and the supply of the legal services provided by Mr Levy was a supply to MBP, who or which is a resident of Australia, and is not a GST-free supply pursuant to the provisions of the GST Act. 126 While GST is payable, the quite separate question arises as to whether it is able to be charged over and above the fees otherwise outlined. 127 The first Costs Agreement does not specify that GST is payable over and above the amounts disclosed. Fees may be charged either inclusive or exclusive of GST. The fee disclosure of 16 October 2003 (the second Costs Agreement) makes clear that the GST is payable over and above fees charged. The proper construction of the first Costs Agreement is not so clear. 128 Mr Levy submits that the terms of the first Costs Agreement must have been understood to have been an amount plus GST. That submission is made both on the basis of the implication in the contract to give it business efficacy and/or to overcome provisions which are "commercially unrealistic". Secondly, it is said that it is an "almost universal commercial practice" that suppliers of services pass on the cost of GST. As is conceded by that submission, the practice is not universal. Further, as I understand it, it is not universal even amongst barristers. 129 While fees that include GST normally expressly do so, there is no reason to assume that a figure of $600 per hour is any less commercially unrealistic than a figure of $545 per hour. It seems that no reference is made to the fact that the fee (less GST) that would be payable if the $600 per hour fee included GST is $545.46 per hour. It seems likely that GST was intended to be paid over and above the $600 per hour. Indeed, if one were allowed so to do and one were to determine what the parties would have done if the issue had been put before them, there is little doubt that the parties would have agreed (as they subsequently did on 16 October 2003 in the second, more formal, Costs Agreement) that GST would be payable over and above the $600. 130 Importing into a contract or agreement an implied term occurs when it is reasonable and equitable, necessary for business efficacy, obvious, capable of clear expression, and does not otherwise contradict any express term of the contract: see Renard Constructions v Minister for Public Works (1992) 26 NSWLR 234 at 256 citing: BP Refinery (Westernport) Pty Ltd v Hastings Shire [1977] HCA 40; (1994) 180 CLR 266; Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596; Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337; and Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41. In Renard, supra, Priestley JA said: "It has become accepted that the rules governing implication ad hoc are those stated by the Privy Council in BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20; 16 ALR 363, and the High Court in Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 and Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337. Those rules are that the implied term must be reasonable and equitable; necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; so obvious that 'it goes without saying'; capable of clear expression; and must not contradict any express term of the contract: see United States Surgical Corporation v Hospital Products International Pty Ltd [1983] 2 NSWLR 157 at 196, and in the same case on appeal, Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 66 per Gibbs CJ. The other kind of implication I have mentioned is that which is said to be implied by law. This was analysed by Hope JA, with whom Samuels JA and I agreed, in Castlemaine Tooheys Ltd v Carlton & United Breweries Ltd (1987) 10 NSWLR 468 at 486-490. Hope JA pointed out that implication of this kind is different from implication ad hoc in that the latter occurs in the circumstances of particular individual contracts, whereas implication by law is based on imputed intention as opposed to actual intention, and implies a term as a legal incident of a particular class of contract." (at 256) 131 The distinction between an implication of fact and an implication of law was discussed by the High Court in Byrne and Frew v Australian Airlines Limited [1995] HCA 24; (1995) 131 ALR 422; (1995) 69 ALJR 797; (1995) 185 CLR 410. In the joint judgment of McHugh and Gummow JJ, the distinction between the two was analysed and their Honours referred to the rules as "rules of construction applied to the express terms of the contract" (at 448) and (at 449) said: "However, the more modern and better view is that these rules of construction are not rules of law so much as terms implied, in the sense of attributed to the contractual intent of the parties, unless the contrary appears on a proper construction of their bargain. There is force in the suggestion that what now would be classified as terms implied by law in particular classes of case had their origin as implications based on the intention of the parties, but thereafter became so much a part of the common understanding as to be imported into all transactions of the particular description." 132 That analysis was the subject of comment by Giles JA in Vodafone Pacific Ltd & v Mobile Innovations Ltd [2004] NSWCA 15. His Honour said: "[205] As so often in the law, it is necessary to make sure that words are the servants, not the master. If it is said that, in determining the full import of cl 18.4, as a matter of law the power conferred on Vodafone must be exercised in good faith and reasonably, and if that is described as a process of construction, so be it. But it is not construction by regard to the ordinary meaning of the words used in the agreement. There is an imposition of law, as explained by McHugh and Gummow JJ in Byrne v Australian Airlines Ltd by attribution of a contractual intent to the parties, and the rule of construction to which their Honours refer is a rule for imposing in law a meaning on the parties. I have no difficulty in using, in that situation, the accepted description of a term implied by law." 133 One must treat carefully comments made as to the implication of a duty, such as a duty to act in good faith, as was the case in Vodafone, supra, compared with the implication of terms arising from "custom" or from the words of the contact itself. 134 In dealing with whether the first Costs Agreement specifies an amount that includes GST or specifies an amount to which GST must be added, account may be taken of the terms of the GST Act and regulations. As is obvious, the provision of services by a barrister is the provision of services that, generally, is subject to GST in whole (leaving aside the particular identity or status of the entity to which services are provided). The GST Act and regulations require a tax invoice to be rendered, which tax invoice must generally specify the GST amount that is charged on the services provided. The only exception is in the circumstances that the GST is exactly one-eleventh of the total price (as would be the case with most barristers' fees) in which case a note to the effect that the price included GST would suffice. 135 Each of the fees rendered between the date of the first Costs Agreement and the second Costs Agreement were issued as a "tax invoice". They included the ABN number of Mr Levy. Each of the tax invoices separately identified the GST payable as being 10% of the fee otherwise rendered. The Court is not entitled to take account of conduct of the parties purportedly pursuant to the terms of the agreement in construing the terms of the agreement. However, the Court is entitled to take into account the terms of legislation binding upon Mr Levy and MBP. If a tax invoice, or fees, were rendered precisely in the terms of those disclosed in the first Costs Agreement, the tax invoice would be inconsistent with the provisions of the GST Act and regulations. The Court ought imply either that the fee included GST or that the GST would be added to the fee. 136 The first Costs Agreement refers to Mr Levy's "standard fees for undertaking medical negligence cases". On its ordinary construction this seems to be the amount which Mr Levy was required to receive to undertake the work. As a consequence, if I must choose between construing the first Costs Agreement as inclusive of GST or an amount to which GST would be added, I would choose the latter. It accords with the Costs Assessor's view of the generally applicable practice, with which view I agree. Further, it accords with the requirements of the GST Act and legislation dealing with the administration of indirect taxes. 137 The imposition of Goods and Services Tax is not a fee for Mr Levy. It is charged by Mr Levy as a requirement of the legislative scheme. I construe the first Costs Agreement as a Costs Agreement requiring the payment to Mr Levy, net of GST, of the amounts there recited and I therefore accept the Determination of the Costs Assessor and consider that the Determination of the Appeal Panel has been infected with an error of law. Conclusion 138 For the reasons set out above, the Determination of the Appeal Panel contains a number of errors of law. There was a denial of natural justice in taking account of the submissions of MBP and not allowing Mr Levy an opportunity to deal with those submissions. Further there was an error of law in construing the terms of the second Costs Agreement as not allowing overseas loadings of $1,500 per day. Thirdly, the Appeal Panel did not have the capacity to determine whether the cancellation fees were unjust. Even if they were able to exercise such a jurisdiction, the cancellation fees, as charged, were not, for any reason given by the Appeal Panel, unjust or unreasonable. No other reason provided would satisfy me that the fees charged were unreasonable or unjust. In those circumstances the Appeal Panel Determination must be quashed. 139 For the reasons already outlined, there is no good ground for disturbing the Determination of the Costs Assessor. If it be necessary, I independently come to the view reflected in the Costs Assessor's Determination. 140 In light of the determination reached by the Court, it is unnecessary to deal with the issues of principle that would, it is submitted, vitiate the Determination by the Review Panel of the question of costs (whether or not the Appeal Panel Determination was otherwise correct). 141 The Court, as a consequence of the foregoing, makes the following orders: (i) To the extent necessary, leave to appeal the Determination of the Review Panel be granted; (ii) The Certificates of Determination of the Review Panel in Costs Review 2006/910-2002 issued on 19 December 2002, being Certificate of Determination of Costs by Costs Review Panel (Form 9), Certificate of Determination of Costs of Review (Form 11) and Certificate of Determination of Review Panel of Costs of Costs Assessment (Form 12), be set aside and in their place order that the appeal to the Review Panel from the Costs Assessor in Costs Assessment 910 of 2005 be dismissed; (iii) To the extent necessary, that the Certificate of Determination of the Costs Assessor in Costs Assessment 910 of 2005 be reinstated and affirmed; (iv) The cross-summons filed 8 August 2007 be dismissed; (v) The defendants pay the plaintiff's costs of the proceedings in this Court, as agreed or assessed; (vi) The parties have liberty to apply within seven days for any consequential or other order arising from these reasons, including any special or different order for costs of these proceedings and any order as to the costs of proceedings before the Review Panel; (vii) To the extent otherwise entitled, the defendant be granted an indemnity certificate under the Suitors' Fund Act 1951. ********** 07/04/2008 - [55] - "1997" altered to "1987"; [77] - "may not" altered to "may"; [80] "in order so" replaced by the word "so". - Paragraph(s) 55, 77, 80. 07/04/2008 - [18] - "found his letter" replaced by the words "found that the above letter" - Paragraph(s) 18 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.