Murdoch v Previtera[2018] QCAT 35

APPEARANCES and REPRESENTATION (if any):

This matter was heard and determined on the papers without the attendance of either party in accordance with s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (“QCAT Act”).

REASONS FOR DECISION

1. [1]
   The respondent law practice claims the applicants owe it unpaid legal costs of $8,750.00 calculated “by reference to” a costs agreement for professional work done for them on their son’s family law file referred to it by another firm  in 2014.
2. [2]
   The applicants originally filed a minor civil dispute claim (MCD 01912/16) for “relief from payment of money” to set aside the costs agreement on the basis that “…they (sic) are unfair and unreasonable” within the meaning of s 328(1) Legal Profession Act 2007 (Qld).^[1]  The reason given was that the “… only agreement was that … there would be no agreement” and although they claimed to have “never been issued with a costs agreement (for) invoice E1207” they asserted that it would be void for uncertainty if it was in the form of another one “we have seen … in respect of another matter”.
3. [3]
   However, the registrar transferred the dispute to the civil list for hearing and determination when the application was amended on 13 October 2016 to substitute claims for a related declaratory order (without consequential relief) in the following terms:

• “that a document which purports to be a costs agreement is not a contract (in) existence at law” (there being no offer and acceptance); or alternatively
• an order that the costs agreement “be set aside” as “not fair and reasonable” because “it was not received and no deeming as to its existence should be allowed”.

4. [4]
   The tribunal’s jurisdiction to make a declaration under an enabling Act about a matter in a proceeding is instead of or in addition to another order it could make.
5. [5]
   It is a flexible remedy amounting to a final and binding judicial statement of the respective legal rights of the parties and is available to stop potentially expensive but defective or pointless proceedings in their tracks.^[2]
6. [6]
   Success for the applicants in the declaration proceeding would mean that they would not have to take on the arguably more demanding forensic challenge of trying to set the agreement aside on fairness or reasonableness grounds under s 328(1).  However, their failure would not really solve anything because a negative (the non-existence of something) does not prove the positive of the proposition; that is, that it does exist.
7. [7]
   The better approach is to proceed under s 328(8) and “decide whether or not a disputed costs agreement in fact exists” by applying the correct law to the facts as found. As the statutory relief and declaratory order turn on existence rather than fairness or reasonableness the hearing was conducted on the basis that a finding on that issue would dispose of both claims. 

Costs agreements

8. [8]
   A costs agreement sets out the fees the client is liable or likely to be charged for legal services worked out at a variable hourly rate (based on the seniority of the practitioner doing the work) plus disbursements and may be enforced in the same way as any other contract.  Except in criminal and family law proceedings a costs agreement may be conditional on the successful outcome of the matter. Otherwise, legal costs are recoverable as per the prescribed scale or the assessed value of the services provided.^[3]
9. [9]
   A costs agreement may consist of a written offer that is accepted by specified conduct.
10. [10]
    After giving prior notice of disclosure of information the disputed costs agreement document relevantly provides that the applicants are only bound by the terms and conditions set out in the costs agreement document if they accept the offer by giving instructions after receiving it.
11. [11]
    The legal services and advice offered was in connection with:

1. (a)
   All matters involving your protection and representation and the provision of legal advices with respect to Federal Magistrates Court file number BRC 8035/2011 involving Shannon Therese Barrett as Applicant and your son, John George Murdoch, as Respondent.

2. (b)
   Providing you with advice and acting on your instructions as regards the firm John Bussa & Co’s representation of you with respect to your mortgage to your said son, George Murdoch and his estranged wife, Shannon Therese Murdoch;

3. (c)
   Providing you will all requests advices directly and indirectly relating to or in connection with ensuring that your son, John’s, interests in relation to the Federal Court proceedings referred to above are protected as much as they can be by you; and

4. (d)
   All matters ancillary to the above.^[4]

12. [12]
    The lawyers with the carriage of the matter and their charge out rates were:

• Peter Previtera, Partner, Normally $500.00 (per hour) (plus 10% GST) for a partner, but because of your referral by Tim Galligan, $450.00 (plus 10% GST);
• Brett Trafford, senior family lawyer, $400.00 (per hour) (plus 10% GST) but because of our referral by Tim Galligan, $350.00 (plus 10% GST).^[5]

13. [13]
    The agreement then went on to inform the applicants that costs for settlement through simple and short negotiation was estimated to be in the range of $5,000 - $8,000 and after a more detailed and protracted process was quoted at between $8,000 - $15,000.
14. [14]
    According to the respondent the offer to enter into the costs agreement was mailed to the applicants at their correct postal address with a covering letter and forwarded as an attachment to their daughter Anne Murdoch’s email account. It was also referred to in a fax on 3 June 2014.
15. [15]
    The applicants agree they received the facsimile transmission but insist that the first either of them saw a copy of the purported costs agreement was in their solicitor’s office on 30 September 2015.
16. [16]
    Anne, their daughter, deposes to not opening the email or mentioning it to her parents until around 4 February 2015, and, in any case, she denies that any document was attached.
17. [17]
    The retainer is admitted and the applicants accept liability for fair and reasonable legal costs incurred within its scope but not based on a formal costs agreement. The say the firm was expressly hired on an oral “no win – no fee” (or conditional) basis and jointly deny ever receiving or accepting (even by implication) the terms of an offer of any costs agreement.
18. [18]
    Anne Murdoch attests to witnessing her mother telling the respondent’s senior partner, Mr Peter Previtera, she was not interested in signing or entering into a costs agreement and would only retain them conditionally. She does not descend into any detail about the terms of the suggested payment arrangement or define a “successful outcome” for payment purposes.
19. [19]
    The respondent’s performance of the legal work notwithstanding non-payment of the $500 deposit is also relied on as somehow being indicative of the non-existence of a formal costs agreement rather than the result of an oversight or favour to a client.

The disputed bill

20. [20]
    The respondent sent tax invoice E1207 to the applicants care of the same address as the costs agreement on 18 July 2014 for all work done on their behalf in the file from 27 June 2014 to 16 July 2014 “… in excess of but say 25 hours by (a senior family lawyer) at $350 (an hour) consistent with the costs agreement and the reconfirmation of matters relating to the costs agreement once (the senior family lawyer) was instructed to deal with the children’s matter”.  The fee “by reference to the costs agreement” was reduced to $8,750 (ex GST) because of a referral to the respondent by another firm.  Outlays were $110. The applicants did not pay or respond.

The evidence

21. [21]
    The parties agreed between themselves to accept affidavits (or written (but unsworn or unaffirmed) statements) of their respective witnesses instead of oral testimony without any being sworn or required by either of them for cross-examination and the veracity of what they depose to cannot be assessed by traditional methods.
22. [22]
    The applicants contend that their positive case of non-existence has to be accepted because it is the only direct evidence on point and is corroborated by their daughter. It is not inherently improbable, manifestly unreliable, weakened by cross-examination or contradicted and therefore it has to be accepted and a positive finding that there is no formal costs agreement in place is inevitable.
23. [23]
    However, there is no such rule of law or logic. In my opinion, unsworn and untested depositions^[6] provide an inadequate evidentiary basis for a credit based finding either way.
24. [24]
    Although commonly overrated as a barometer of truth, demeanour and cross-examination are still useful tools for testing the comparative credibility of conflicting, especially partisan, descriptions of the same event.^[7]
25. [25]
    Even honest and implacable people are prone to error and some people lie better than others tell the truth.
26. [26]
    The ultimate fact in issue, however, is the existence of the statutory costs agreement. The party “who will lose if no evidence is called”^[8] or so evenly balanced that the choice between them is a “mere matter of conjecture”^[9] bears the so called persuasive onus. Thus, insofar as the applicants’ liability for bills “in accordance” with the terms and conditions of the costs agreement depends on proof its existence, the burden of proof rests on the respondent’s shoulders.
27. [27]
    The standard of proof or degree of certainty required for any relevant fact (ultimate or subordinate) to be found is a state of mind (usually referred to as the level of reasonable satisfaction) produced by logical reasoning under the influence of considerations such as the nature of the fact in question, the seriousness of the allegation and the gravity of the consequences of a particular finding and “inherent unlikelihoods.”^[10]  
28. [28]
    The tribunal must feel an actual persuasion or belief in its occurrence or existence. Reasonable satisfaction is usually based on a preponderance of probability, which here, means, that the likelihood of the existence of the costs agreement exceeds the possibility that it doesn’t.
29. [29]
    As Lord Hoffman explained in Re: B (Children)^[11] there is:

… no room for a finding that it might have happened. The law operates in a binary system in which the only values are 0 and 1. The fact either happened or it did not. If the tribunal is left in doubt, the doubt is resolved by a rule that one party or the other carries the burden of proof. If the party who bears the burden of proof fails to discharge it, a value of 0 is returned and the fact is treated as not having happened. If he does discharge it, a value of 1 is returned and the fact is treated as having happened.

30. [30]
    The law requires sufficient proof of the applicants’ deemed acceptance of the terms and conditions of the costs agreement which, in turn, is conditional on them having received the offer and then giving instructions.^[12]
31. [31]
    To meet this challenge the respondent proposes to present material which relies on inference rather than perception for its probative value or persuasive force.
32. [32]
    The relevance of so called circumstantial evidence lies in its capacity to rationally resolve disputed facts by a common sense process of deduction and elimination. Its persuasive force (or probative value) arises “from the fact that it usually consists of a number of items pointing to the same conclusion”^[13] or confirming a particular explanation as the most likely of the alternative probabilities.^[14] 
33. [33]
    To prove posting and rebut the applicants’ denial of receipt the respondent relies on its mail handling system or habits based on the logical assumption that as a matter of common experience (a) what is generally, though not necessarily invariably, done within the office in connection with outgoing mail was probably done on this occasion as well and (b) in the normal course of events what is posted is delivered.
34. [34]
    The firm employs Allannah Jackson as a legal secretary. She says that according to her usual practice she would have placed the envelope with the 3 June 2014 letter and enclosed costs of agreement in the mail basket ready for the afternoon posting after the documents had been photocopied for the file.
35. [35]
    In relation to the email correspondence Ms Jackson says she would have copied the letter and agreement correspondence from the computer version, opened a new email, pasted the copy version of the correspondence into it and pressed ‘send.’
36. [36]
    The applicants dismiss evidence of the respondent’s office practices as “self-serving hearsay” devoid of probative value because it is based on dubious supposition not recollection.  At worst for them, they say, it only proves that a letter was sent but is not probative of whether the one in dispute was received.  Ms Jackson’s evidence is also rejected as “inherently implausible” because to the extent the letter sent out was unsigned it is based on following an unusual variant of the standard practices she deposed to.
37. [37]
    However, the respondent submits that it is unlikely that the costs agreement was not posted on the 3 June 2014 with the letter and it is more logically consistent with the proven facts that the costs agreement was probably received by the applicants for three compelling reasons:

• one, as commonly occurs when letters are misdirected or undeliverable, the envelope was never returned unclaimed; 
• two, it is reasonable to expect the applicants to have made inquiries or raise questions in correspondence after 3 June 2014 about references to the costs agreement if the payment terms were not governed by one, but neither the applicants nor Anne Murdoch queried the interim tax invoice (E1207) for nearly $9,000 for professional fees and disbursements for work up to 16 July 2014, and despite at least two follow up bills for work in progress the applicants continued to give instructions until 9 October 2014 without voicing any concern or complaint; and
• three, there is no explanation or excuse offered for withholding payment of outgoings, for which, even on their own story, they are liable.

38. [38]
    Tendency is a species of similar fact evidence about character or conduct tendered to prove a fact in issue by inference from a tendency to act in a particular way in specific circumstances.
39. [39]
    Coincidence evidence, by contrast, is used for the purpose of arguing that the similarities in 2 or more events makes them more likely to be explained by a distinctive pattern or system of behaviour rather than chance.
40. [40]
    If admissible (and not contradicted or innocently explained) tendency may (not must) be used to infer that the person has or had a propensity to act in a particular way or have a particular state of mind and further infer that the person behaved in accordance with that disposition on another occasion.
41. [41]
    Evidence of a single occasion is capable, in appropriate cases, of meeting the test for admission.
42. [42]
    However, how far a party should be allowed to bolster their chances of success in tribunal proceedings by calling evidence of this kind is problematic because of the risk of error involved in reaching conclusions based solely or substantially on the tendency itself rather than via genuine inferences drawn from it.
43. [43]
    While past events are not a certain guide to the (present or) future “… proof that events have occurred often provides a logical basis for determining the probability – high or low – of their recurrence.”^[15]
44. [44]
    That the same people had done the same or strikingly similar things on other occasions is plainly a cogent, and, in this case, probably necessary information for countering the applicants’ evidence which if considered in a vacuum or as an isolated incident may be uncritically accepted when it should be doubted or rejected.
45. [45]
    The accuracy of the transcript is not in issue. It proves that a magistrate awarded the respondent costs of $16,083.00 in 2016 for legal work it had done for the applicants and a related company in a different matter based on a finding contrary to the sworn evidence of the applicants and Anne Murdoch that the disputed costs agreement had been sent to the defendants and received by them.^[16]
46. [46]
    Of Mrs Murdoch it was said that “(h)er lack of truth, evasiveness, poor demeanour in the witness box and general unreliability whilst giving evidence meant I could not accept or rely upon anything she said”.
47. [47]
    Mr Murdoch’s evidence was found to have “added little to the defence case” and, in any event, given the state of the objective documentary evidence, was rejected where it conflicted with that of Mr Previtera’s, whose evidence on behalf of the respondent was accepted “in total”.
48. [48]
    Anne Murdoch’s evidence about not receiving emailed correspondence was also disbelieved because it was rebutted by documentation.
49. [49]
    The applicants do not dispute the facts underlying the magistrate’s decision but object to his findings and reasons being used in the current proceedings as probative of whether the costs agreement exists or not.^[17]  Specifically, they argue:

• the issue in the earlier proceeding was the scope of the retainer for performance of work whereas the issue here is merely whether or not a letter was sent and received;
• the finding that Mrs Murdoch was unreliable is not of itself evidence of a disposition to lie generally or in other, especially current, litigation;
• their pleading that they did not receive the costs agreement relates to a different letter sent at a different time in relation to a different matter, albeit by the same firm;
• the findings are based solely on matters arising in the earlier proceedings and are limited to the credibility of the applicants in that hearing;
• evidence of one prior act (rather than a series) does not increase the probability of the ultimate fact in issue based on pattern reasoning;
• the magistrate’s decision is merely a matter of opinion and while the result was binding upon the parties it does not make the current issue more likely one way for the other;
• the previous findings are unduly prejudicial.

50. [50]
    It is true that evidence of similar facts is often excluded in criminal proceedings on policy or undue prejudice grounds to avoid the risk of conviction based on the natural bias arising from proof of past bad behaviour rather than on the facts of the case in point.  However, even then the striking likeness or underlying unity of tendency or propensity derived from character or past conduct evidence can be so compelling that it would be an affront to common sense to ignore it.
51. [51]
    To gain admission in criminal courts identifying attributes, traits or patterns of behaviour must either share a sufficient commonality with an alleged act or provide a context to such a degree that it logically increases the likelihood of the occurrence of the alleged fact.
52. [52]
    In such a case what has happened before will be received as indicative of guilt only if there is no rational view of it inconsistent with that conclusion. Put another way the evidence has to be so strong that it excludes any innocent explanation and thus displaces the presumption of innocence.^[18]
53. [53]
    What the applicants refer to as the general exclusionary rule as to propensity evidence does not apply at all in civil proceedings^[19] regardless of any prejudicial effect and there is no room in the tribunal to limit by discretion the expanded range of material the QCAT Act expressly grants it access to.^[20]
54. [54]
    The tribunal is freed from the strictures of the adversarial based rules, procedures and practices applied by courts in conducting common law judicial proceedings^[21] to regulate the reception and exclusion of contested evidence except to the extent that they are adopted^[22] (or, perhaps, adapted) and must decide disputes according to a “proper consideration” of the “substantial merits” based on “all relevant evidence”.^[23]
55. [55]
    The only condition for admissibility in tribunal hearings is that, if accepted, the evidence in question must be directly or indirectly relevant to the inquiry in the sense of being capable of logically affecting the assessment of the probability of the existence or non-existence of a material fact.^[24]
56. [56]
    It is the weight or forensic value not the origin or character of the material that matters most to the tribunal. Any discretion to ban logically probative information on prejudice or policy grounds is incompatible with that mandate.
57. [57]
    The applicants could have litigated their liability in the Supreme Court which has concurrent jurisdiction to grant the claimed relief but in filing in this jurisdiction instead of invoking strictly adversarial court procedures the applicants must be taken to have chosen for the dispute to be heard and decided on the basis of all, not just some, of the relevant circumstantial, including similar, facts.^[25]
58. [58]
    In addition, the respondent produces an official transcript of summary findings against the applicants in an earlier civil proceeding to demonstrate a common tendency by the applicants to falsely deny indebtedness to the respondent for legal costs in litigation where liability depended substantially on word against word and their general lack of credibility as witnesses.
59. [59]
    Unfavourable credit findings and critical judicial remarks about a party’s performance as a witness when giving reasons for a decision are generally treated as inadmissible non-expert opinion^[26] and not permitted in regular courts in later proceedings for the purpose of proving what a party was found to have done previously as a probable fact.  Moreover, evidence going solely to credit (or veracity) cannot be proved in chief or rebuttal^[27] and may be introduced in cross-examination but only if the answer would seriously impair believability.
60. [60]
    However, Cross on Evidence cites a South African case^[28] where the cross-examiner was allowed to attack a witness’ credit by putting to him that he had been disbelieved in another proceeding but not quote passages from the transcript^[29] and another where a false denial finding against a party in a civil action was admitted in a disciplinary proceeding as a “reliable source of facts”.^[30]
61. [61]
    The transcript of the magistrate’s findings of fact are admissible, in my view, to resolve the fact at the heart of this dispute because there is a reasonably sufficient degree of similarity or pattern of behaviour in the past (i.e. false denial of receipt of mail) and the fact to be proved (i.e. that a posted document was delivered) as to make the latter fact logically more likely than it would otherwise be.
62. [62]
    The magistrate may have merely been expressing a non-binding opinion about credibility and the facts he was satisfied of in a different dispute but the applicants did not put on any evidence of alternative facts.
63. [63]
    Also it bears directly on the question whether the instructions the applicants gave is proof of acceptance by subsequent conduct tending to rebut the applicant’s denials which when seen in a complete historical setting are weaker than they first appeared.
64. [64]
    Although there is only a single past occasion to go on the shared features are distinctive enough, if accepted, to prove the applicants tend to falsely deny receiving costs agreements in litigation over a bill of costs with the same party and there is no good reason to ignore the fact.
65. [65]
    That tendency, which I find is a common one, is capable of rationally supporting the inference, which I draw, that, despite assertions to the contrary, the applicants are more likely to be doing the same now than I would otherwise have reason to suppose.
66. [66]
    Overall, I am reasonably satisfied that the existence of the costs agreement is the most likely explanation of the reasonable inferences arising from the mutually reinforcing effect of the totality of the evidence of the respondent’s standard postal procedures, the unexplained inconsistency between the reaction of a reasonable client in the applicants’ shoes and the applicants’ lack of response to getting a bill too soon and for too much and the odds against the respondent entering into an oral conditional costs agreement in a family law matter and the applicants’ tendency to falsely deny costs agreements with the respondent.
67. [67]
    I also find that its terms and conditions were accepted by instructions given to the respondent by the applicants after probably receiving it and subject to any outstanding statutory rights and remedies they are legally bound by them including for bills calculated in accordance with it.
68. [68]
    I so declare.