A majority of the New South Wales Court of Appeal in Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150 (“Pentelow”) has held that the so-called ‘Chorley exception’, a rule of practice which entitles a self-represented litigant who is a solicitor to recover professional costs, applied to a barrister who personally undertook legal work in her own litigation although legally represented in the litigation.
Chorley exception
The Chorley exception was introduced by London Scottish Benefit Society v Chorley, Crawford and Chester (1884) 13 QBD 872 and is an exception to the rule that a self-represented litigant is not entitled to professional costs for acting for himself or herself in legal proceedings. The Chorley exception, to the effect that a self-represented solicitor was entitled to his or her professional costs, came to be applied in Australia, most notably, in the High Court’s decision of Guss v Veenhuizen (No 2) [1976] HCA 57; (1976) 136 CLR 47 (“Guss”). Guss has been accepted as binding authority in most Australian jurisdictions (see, for example, Coshott v Spencer [2017] NSWCA 118 (“Coshott”) and Soia v Bennett [2014] WASCA 27; (2014) 46 WAR 301).
Nevertheless, there have been some judges who have raised doubts about the application of the exception. In Cachia v Hanes [1994] HCA 14; (1994) 179 CLR 403 (“Cachia”) (a case in which a self-represented litigant unsuccessfully claimed costs based upon the fees charged by him as a self-employed consulting engineer), a majority of the High Court of Australia described the exception as “somewhat anomalous”, as having a “somewhat dubious” and “unconvincing” justification for its existence, and as being “limited and questionable”. Judges in some other cases, usually after referring to the observations made in Cachia, have expressed views that, had authority not constrained them, they would not have found the solicitor litigant entitled to recover his or her professional costs.
As to whether the Chorley exception applied or extended to barristers, there have been some judges who have been prepared to apply the exception, or, at least, to assume that it applied, to self-represented barristers, while other judges have refused to so apply it. In particular, in South Australia, where legal practitioners are admitted as barristers and solicitors, the Full Court of the Supreme Court of South Australia in Hartford Holdings Pty Ltd v CP (Adelaide) Pty Ltd [2004] SASC 161 (“Hartford Holdings”) refused to apply the exception to a legal practitioner who had undertaken work in his own litigation as if he had been retained as counsel. Referring to Cachia, the Full Court said that the exception should not be extended unless the High Court determined otherwise.
It was against this background that the New South Wales Court of Appeal came to decide Pentelow.
The facts in Pentelow
In Pentelow, a barrister had sued a firm of solicitors for unpaid fees. The barrister was legally represented in the proceedings by solicitors and senior counsel but had undertaken certain legal work on her own behalf including drawing initiating process and affidavit evidence, perusing correspondence from senior counsel, advising senior counsel and representing herself at directions hearings. The barrister was ultimately successful in the proceedings and received a costs order in her favour. The barrister then claimed costs for the legal work which she had personally undertaken in the proceedings but these were disallowed by a costs assessor and, on appeal, by a Review Panel on the grounds that she had not been self-represented and that the Chorley exception did not apply to barristers. The District Court dismissed an appeal by the barrister and the barrister sought judicial review of the District Court decision.
Court of Appeal’s decision
The Court of Appeal (Beazley ACJ and Macfarlan JA, Meagher JA dissenting) decided that it was consistent, as a matter of principle, with the Chorley exception that:
- a self-represented barrister was entitled to recover costs for legal work; and
- a barrister who was legally represented in his or her own proceedings was entitled to recover costs for legal work he or she had undertaken for the purpose of those proceedings.
Therefore, the Court concluded that the barrister in question, although legally represented in the proceedings, was entitled, as a matter of principle, to claim costs for the legal work which she had personally undertaken in the proceedings. However, the Court also found that, whether the costs she claimed would be allowable or allowed, was a matter for costs assessment.
Majority’s reasoning
After determining that the underlying rationale for the Chorley exception was that the work of solicitors could be quantified (unlike that of lay persons), and after reviewing the authorities, Beazley ACJ (Macfarlan JA agreeing) made observations to the following effect (at [90]-[98]):
- There was a significant degree of commonality in the work of barristers and solicitors which included, relevantly, the preparation of court documents and preparing legal advices. Accordingly, the fact that barristers and solicitors were registered on different rolls and their conduct was governed by the rules of different associations did not provide a principled basis upon which to reject the application of the Chorley exception to legal work undertaken by a self-represented litigant who was a barrister. This was particularly so when it was appreciated that the rationale of the Chorley exception was not based on the type of work solicitors undertook, per se, but, rather, was based on the fact that the work undertaken could be quantified.
- At the time that Chorley was decided, costs were the subject of taxation by court officers, based upon costs scales for items of work specified in the relevant schedule. That was also the position when Guss, Cachia and Hartford Holdings were decided and the position in New South Wales until legislation in New South Wales removed the costs scales in favour of a system of costs assessment by costs assessors who were legal practitioners. Solicitors’ legal costs were now generally charged and assessed on a time costing basis, by reference to what was fair and reasonable.
- Under the former system of taxation of costs, barristers’ fees were treated as a disbursement in a solicitor’s bill of costs and the common law position, that a barrister could not sue to recover fees because no contract existed between the barrister and the instructing solicitor, continued. However, that position was changed by legislation so that a barrister could enter into a contract for the provision of legal services and sue and be sued on it. Barristers’ fees could now be the subject of assessment. Therefore, while there might have been a question as to whether a barrister would have been entitled to costs in a regime where quantification of costs was by reference to costs scales, this was no longer the case because the basis upon which costs were assessed had changed radically.
- The following matters all pointed in favour of the Chorley exception applying where the self-represented litigant was a barrister:
- the definition of “costs” in s 3 of the Civil Procedure Act 2005 (NSW) [which did not confine “costs” to “costs payable” but defined this as “costs payable in or in relation to the proceedings, and includes fees, disbursements, expenses and remuneration”];
- the Court of Appeal’s decision in Coshott, in which it was determined that the Chorley exception continued to apply in New South Wales to a self-represented solicitor [and that ss 3 and 98 (which grants power to the court to award costs) of the Civil Procedure Act did not, as a matter of statutory construction, require a different outcome]; and
- the significant commonality in the work that could be performed by solicitors and barristers.
- There was nothing in the High Court’s decision in Guss which prohibited the application of the Chorley exception to work undertaken by a self-represented litigant who was a barrister. There appeared to be no difference in principle where a barrister engaged legal representation but personally undertook certain legal work which could otherwise have been done by the legal representatives. In fact, in Guss, the appellant was a self-represented solicitor who had briefed counsel to appear. Thus, there was nothing in Guss which indicated that the principle was limited to a case where the solicitor undertook all of the legal work. That approach had already been taken in Australia in Hawthorn Cuppaidge & Badgery v Channell (1992) 2 Qd R 488 [a case in which a firm of solicitors, although retaining other solicitors to appear for them in their own litigation, were found to be entitled to recover professional costs for the legal work which they had undertaken themselves.]
- The High Court’s obiter observations in Cachia had no direct application to the circumstances of the present case and the Court was not circumscribed by those observations.
- Having regard to the significant commonality of work undertaken by barristers and solicitors and to the costs assessment scheme, what was involved was an application of existing High Court authority to similar circumstances as arose in Guss. Whether that was so or whether the application of the Chorley exception to barristers was a permissible application of the principle was, of course, a matter ultimately for the High Court, as was the continued application of the exception itself.
Beazley ACJ then concluded as follows (at [115]-[118]):
- The Chorley exception applied to barristers.
- The case involved an application of the Chorley exception to the facts and was not an extension of it. The barrister did not seek a departure from any previous decision of the High Court but, rather, sought a determination as to whether the Chorley exception applied to barristers in circumstances where she was not a self-represented litigant but undertook legal work in the litigation in which she was represented.
- Given that there were cases in other common law jurisdictions where the Chorley exception had been applied to barristers, as well as Australian decisions where the rule had been applied, and where there was no decision of an Australian intermediate appellate court directly contrary to the proposition, it was appropriate for the Court of Appeal to consider whether the exception ought to be applied in the circumstances that existed in the present case. In doing so, the Court of Appeal would not be acting contrary to the statements of the High Court in Garcia v National Australia Bank Ltd [1998] HCA 48; (1998) 194 CLR 395 [that it was for the High Court alone to determine whether one of its previous decisions should be departed from or overruled] and Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 [that it was not for an intermediate court of appeal to effect changes to well-established principle].
- However, given the contentious and unresolved question of the application of the exception at all and the extent of its application, it was apparent that the question would eventually need to be resolved either by the High Court or by legislation, as had occurred in some other jurisdictions.
Dissenting judgment
Meagher JA, dissenting, made observations to the following effect (at [138]-[141]):
- The extension of the Chorley exception to barristers was not supported in terms by either Guss or Coshott, both of which referred exclusively to solicitors appearing in person. Therefore, the question before the Court had to be decided at the level of principle. Whether any remaining distinction between solicitors and barristers in New South Wales could rationally be material to the awarding of costs to them as litigants in person was a false issue. Assuming that statutory reform permitting barristers to sue for fees and subjecting those fees to assessment had removed any such distinction, it did not follow that the Chorley exception should be extended to barristers.
- The majority in Cachia described the Chorley exception as “somewhat anomalous” and “limited and questionable” and differentiated it from the basis upon which costs were usually awarded, namely, as an indemnity for legal costs actually incurred. The majority also observed that the “costs” for which then r 23(2) of the Supreme Court Rules 1970 (NSW) provided were confined to money paid or liabilities incurred for professional legal services. Those points applied a fortiori where the relevant source of power was in terms limited to costs that were “payable” [as set out in the definition of “costs” in s 3 of the Civil Procedure Act]. The application of the Chorley exception with respect to solicitors under s 98 of the Civil Procedure Act did not rest on any recognised principle or policy.
- More significantly, the barrister’s argument in this case resembled the primary submission for the appellant in Cachia which drew an inference from the absence of any reason for distinguishing between a lay person and a solicitor who acted for himself or herself to support the claim that the value of a lay person’s time should also be recoverable as costs. The majority in Cachia rejected that submission as false reasoning on the basis that it was not possible to reason by way of the exception that litigants in person were treated unequally and then to conclude that the very basis upon which costs were ordinarily awarded should be abandoned so that the exception became the rule.
- The barrister’s argument adopted a milder form of that “false reasoning” by merely substituting a barrister providing services to herself for the lay litigant doing the same. It did not point to any substantial reason to trench further upon the plain language of legislation conferring power to order costs, which itself reflected the general conception of costs in Anglo-Australian law as awarded by way of indemnity or partial indemnity for professional legal costs actually incurred in the conduct of litigation. If the Chorley exception was to survive, it could only do so as an undesirable anomaly that should not be permitted where its application was not covered by authority.
