PARTIES:					AH TOY

						v

						HOWARD

TITLE OF COURT:			SUPREME COURT OF NT

JURISDICTION:				SUPREME COURT

FILE NOS:					118 & 119 of 1980

DELIVERED:				21 July 1995

HEARING DATES:				16 December 1994, 11 March 1995

JUDGMENT OF:				MARTIN CJ.

CATCHWORDS:

	Costs - Recovery of costs - Application of Legal
		Practitioners Act - Person must be on the Roll of Legal Practitioners kept under the Act -

	Legal Practitioners Act, s22(4)

	Fullalove v Parker (1862) 31 LJ(CB) 239, referred to.
	Re Jones (1869) LR 9 Eq. 63, referred to.
	Re Hope (1872) LR 7 Ch. App. 766, referred to.
	TNT Bulk Ships v Hopkins and Anor (1989) 98 FLR 352,
		referred to.

	Costs - Recovery of costs - Costs include disbursements 		- Power of the Court - Application of cost rules -
	
	Supreme Court Act, s86(2)(c)
	Supreme Court Rules O.63, r.63.01(1), r63.27, r63.32, 		r63.40, r63.40(6), r63.41, r63.42, r63.68

	Costs - Recovery of costs - Counsel's fees - Professional
		disbursements - To be included in taxation -

	Devereaux and Anor v White and Anor (1896) 13 TLR 52, 			followed.

	Costs - Recovery of costs - Indemnity basis - Case of
		statutory prohibition - Successful party not liable 
	
	Kelly v Noumenon Pty Ltd (1988) 47 SASR 182, considered.
	Latoudis v Casey (1990) 170 CLR 534, considered.
	Irving v Gagliardi; ex parte Gagliardi (No.2) (1895) 6 			QLJ 200, followed.

	Costs - Taxation - Objections referred by Master to Judge
		for determination - Whether Territory solicitors were principal solicitors or acting as agents for principal interstate solicitors - Interstate solicitors uncertificated until date of trial -

	Supreme Court Rules, r63.33 and r77.04.

	Practice - Northern Territory - Endorsement of Court
		documents - Originating process - Address for service of defendant -

	Supreme Court Rules, r6.05, r6.05(2), r8.06, r.27.03(5).

	Statute - Interpretation - Legal Practitioners Act -
		Scheme of Act - Rationale - Intention of Parliament-

	Legal Practitioners Acts, s22(4)
	
	TNT Bulk Ships v Hopkins and Anor (1989) 93 FLR 352, 		followed.

	Statutes - Interpretation - "principal" - "agent",
		"another" means "another solicitor" - "legal practitioner" - "costs" - "disbursements".

REPRESENTATION:

	Counsel:

		Plaintiff: Mr J Waters
		Defendant: Mr G Hiley QC

	Solicitors:

		Plaintiff: Mr J Neill - Ward Keller
		Defendant: Mr N Henwood - Cridlands

Judgment category classification: B
Judgment ID Number: mar95016
Number of pages: 33

DISTRIBUTION:   LOCAL  

mar95016

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA

No. 118 of 1990		IN THE WILL of OSCAR SCHOMBURGK 
					HERBERT late of Koolpinyah 
					Station via Darwin in the 
					Northern Territory of Australia,
					Pastoralist, Deceased

					IN THE MATTER OF the 
					Administration and Probate Act 

					BETWEEN:

					LAURENCE CHEONG AH TOY
								Plaintiff

					AND:

					ELDERS TRUSTEE AND EXECUTOR 
					COMPANY LIMITED and RICHARD
					GILMORE HOWARD as executors of 
					the estate of ALICE MARIE HOWARD
									Defendant

							
No. 119 of 1980		IN THE WILL of EVAN SCHOMBURGK 
					HERBERT late of Koolpinyah 
					Station via Darwin in the 
					Northern Territory of Australia,
					Pastoralist, Deceased

					IN THE MATTER OF the 
					Administration and Probate Act

					BETWEEN:

					LAURENCE CHEONG AH TOY
								Plaintiff

					AND:

					ELDERS TRUSTEE AND EXECUTOR
					COMPANY LIMITED and RICHARD
					GILMORE HOWARD as executors of 
					the estate of ALICE MARIE HOWARD
									Defendant

CORAM:   MARTIN CJ.

	REASONS FOR JUDGMENT

	(Delivered 21 July 1995)

		The plaintiff is the executor and beneficiary of the wills of each of the deceased Herbert Brothers.  The defendants are the representatives of a number of relatives of the deceased who opposed the granting of probate.  On appeal, (1990) 101 FLR 281, the costs of both parties in the probate actions were ordered to be paid out of the estates on an indemnity basis.  The defendants brought in their bills of costs in each action for taxation, and were met by objections as follows:

	"A.	That Messrs Morgans and not Messrs Cridlands were principal solicitors in the proceedings.

	B.	That neither the partners of Messrs Morgans nor their employed solicitors who performed work in these proceedings at any relevant times were admitted to practise as legal practitioners in the Northern Territory of Australia.

	C.	If A and B are so, then Howard is not entitled to recover either the whole or any part of her costs and disbursements in the Bill of Costs.

	D.	In the alternative to B above, that if the partners and employed solicitors of Messrs Morgans who performed work in these proceedings at any or all relevant times were admitted to practise as legal practitioners in the Northern Territory of Australia they did not at any relevant times hold current Practising Certificates pursuant to Section 22(4) of the Northern Territory Legal Practitioners Act, and none of the costs in the Bill of Costs have been paid by Howard.

	E.	If A and D are so, then Howard is not entitled to recover any of the costs and/or disbursements in the Bill of Costs, upon taxation.

	F.	That if none of the partners but some of the employed solicitors of Messrs Morgans who performed any work in these proceedings at any relevant times were admitted to practise as legal practitioners in the Northern Territory of Australia but did not hold a current Practising Certificate pursuant to Section 22(4) of the Northern Territory Legal Practitioners Act, then Howard is entitled to recover upon taxation of the Bill of Costs only the costs and disbursements relevant to the work performed by those legal practitioners which has been billed to and paid by Howard, and none of the costs and disbursements rendered by Messrs Cridlands can be recovered upon taxation."

		In essence, the objection is that the solicitors on the record for the defendants, Cridlands of Darwin (including their predecessors), were not the principal solicitors in the proceedings for the relatives.  It is alleged that Morgans, Solicitors of Adelaide (including their predecessors), filled that role, that Cridlands acted on their instructions and as their agents for the purposes of the proceedings in this Court. The distinction as to which of the firms was the "principal" may be important, in that neither of the partners of Morgans, Messrs Morgan and Brohier who had performed much of the work in the proceedings, were admitted to practice as legal practitioners in the Supreme Court of the Northern Territory until the day upon which the trials commenced, 26 October 1988. They were issued with practicing certificates by the Law Society of the Territory on the same day.  The costs accrued by that time were very substantial.  It is not disputed that the costs properly payable to Morgans for work done by the partners of that firm after 26 October 1988 are recoverable (subject to any other proper objection). 

		The issues arising under these objections were referred by the Master to a Judge for determination (see rules 63.33 and 77.04).  In the bills of cost brought in for taxation, Cridlands show fees paid to Morgans as agents for Cridlands. However, the evidence shows that Cridlands sent bills for the work performed by them to Morgans, and Morgans paid Cridlands. 

		In an affidavit sworn for the purposes of this part of the proceedings, Mr Henwood of Cridlands denied that Morgans acted as principal solicitors in the proceedings and that Cridlands were agents of that firm.  He deposed that Cridlands, as solicitors on the Court record, were the principal solicitors in the proceedings, Cridlands performed legal work and incurred professional fees as principal solicitors for a total of approximately $109,000, and the bill of costs filed on behalf of the defendants shows the nature and extent of the legal work performed by that firm.  Importantly, perhaps, he said that all accounts rendered by Cridlands during and after the proceedings had been paid in full.

		Mr Henwood deposes that in the proceedings the defendants acted as representatives of the relatives of the deceased Herbert brothers having an interest in the proceedings as beneficiaries of the estates in the event of an intestacy. The late Mrs Howard had been appointed by order of the Court to represent all the persons who were next of kin.  Mr Morgan, a principal of the firm of solicitors known as Morgans in Adelaide, denied that his firm acted as principal solicitors in the proceedings.  He said that the firm acted as South Australian solicitors for the relatives of the Herbert brothers, obtained initial instructions from the relatives, and on behalf of the relatives, collated and conveyed instructions to Cridlands in relation to the proceedings and performed such legal work as was appropriate to be performed in South Australia as a matter of practical necessity.  Pursuant to an agreement entered into between the relatives of the deceased and their executors, the parties were divided into geographical groupings distributed throughout the United Kingdom, Western Australia, New South Wales, Victoria and South Australia, and the South Australian relatives collated the instructions of all of those relatives.  Some of the relatives used their own solicitors. Mrs Pauline Payne had been appointed as the coordinator on behalf of all the relatives.  Mr Morgan said that it was necessary for his office to understand all the law and issues and the evidence in order to give advice, obtain instructions and perform solicitor/client work required to be undertaken in South Australia.  The only practitioners of Morgans who performed work in relation to the matters were himself and Mr Brohier who performed his work under Mr Morgan's supervision.  As with Cridlands, Mr Morgan deposed that all accounts rendered by his firm in respect of legal costs and disbursements in respect of the proceedings had been paid in full by, or on behalf of, the relatives of the Herbert Brothers or their authorised executors.  

		Mr Henwood was cross-examined on his affidavit much later in the proceedings and I will come to that shortly.

		The defendants argue that what is important for the determination of costs issue, is which of the firms of solicitors had the carriage or conduct of the proceedings in this Court on their behalf.  By that, they mean that where a solicitor on the record has a major and significant role in the proceedings, then it is open to be found that the solicitor was the principal for the purpose of the proceedings and the application of the costs rules.  It is not to the point to determine who was the principal and who the agent as a matter of contract as between the solicitors.  The question to be determined is who was the solicitor for the purpose of the proceedings, and which solicitor had the conduct of the proceedings.  The unadmitted solicitor may be acting as agent for the client for the purpose of instructing the admitted practitioner in the Territory who has the carriage of the proceedings.  It was also put on their behalf that, regardless of the determination of the question of principal and agent for contractual purposes, if that be relevant, and regardless of the determination of the question of which solicitor had the carriage or conduct of the proceedings, the fact that payment of all accounts for legal services had been made, means that the defendants are entitled to be indemnified. 

		During the course of argument, counsel for Cridlands indicated that upon an examination of each item in the detailed bills of cost it might be found that the position as between Cridlands and Morgans could vary from time to time.  That was not conceded as the fact.  If that was so, then the answer as to whether particular items of costs ought to be allowed may depend upon the circumstances.

		Counsel for the plaintiff initially asserted that the Court should go beyond the bare assertions contained in the affidavit evidence and go through the bills of cost to establish the relationship between the clients, the two firms of solicitors and the outcome.  That submission had to be right. Some of the conclusions drawn by Messrs Henwood and Morgan in their respective affidavits were conclusions of law, some tinged with ambiguity.   The plaintiff's counsel's submissions continued to the effect that it does not matter how the different firms chose to categorise their relationship between themselves and in regard to the proceedings, it is for the Court to decide those matters, and, since the plaintiff had no access to what transpired between the defendants and each of the firms of solicitors, it could resort to the items described in the bills of costs with a view to influencing the Court to make findings and draw inferences.  Counsel was not prepared to concede that if payment of the accounts for costs rendered by both firms had been made, that would be an end of the argument.  If Morgans were the principal solicitors, then in respect of their bills for fees incurred prior to 26 October 1988, the defendants could not recover because Morgans were not entitled to recover those fees as against their clients, and since Cridlands costs were incurred as agent for Morgans, those costs were not recoverable either.  

		It was noted that Cridlands sent their bills to Morgans for Morgans to pay and Morgans did not send their bills to Cridlands for that firm to pay.

		Counsel for the plaintiff then commenced to examine selected items in the bills of cost which comprised in all, over 9,000 entries.  During the course of that exercise, it became obvious that no satisfactory finding of fact could be made on the basis of the items described in the bills and it occurred to me that the evidence lay in the documents behind the items, the correspondence, file notes, Court documents and so on, and that all of them must be available for production and inspection, if required, in support of the corresponding particular item in the bill upon the taxation taking place.  After discussion with counsel it was ordered that the defendants produce and lodge with the Registrar, within 28 days, all documents of whatever description relating to the taxation of the bills and that the plaintiff have inspection of them within 21 days thereafter.  Liberty was reserved to the parties to seek to resume the hearing and argue the question of whether the fact that all of the solicitors' accounts had been paid by the defendants could determine the matter in issue.  It was clearly then indicated by the Court, that all parties were at liberty to bring into Court any documents on which reliance would be placed. 

		The hearing resumed with different counsel instructed on behalf of each side.  An affidavit was filed the previous day by Martin Hardie, an articled clerk, employed in the firm of solicitors acting on behalf of the plaintiff.  Mr Hardie said that he attended at the Court on various occasions and perused the material which had been produced in accordance with the order, and that he had extracted from them a substantial number of documents which were copied and marked as exhibits to his affidavit.  He then asserted that he had not found any letters of instructions from the defendants or anyone else appointing Cridlands as principals in the proceedings, nor did he discover any documentary proof that Cridlands appointed Morgans as agents to carry out work in South Australia or elsewhere.

		No documents were put forward by the defendants. They sought to have the question of the relevance of their having paid all the solicitors' costs determined.  They said there was no need to go into the documents.  Counsel for the plaintiff objected to that course, arguing that there were other issues to be determined which could have a bearing on the eventual outcome.    

		The plaintiff reminded the Court of the matters that had been specifically referred to it by the Master.  That order stood.  By arrangements between the parties, Mr Henwood and Mr Hardie were then put forward for cross-examination on their respective affidavits.

		Mr Henwood's cross-examination revealed that he had had the files in the office of Cridlands since 1987 and had become familiar with the contents of them prior to that time. Instructions to Cridlands had been received from Morgans and none direct from the defendants, except on one occasion when he dealt with some beneficiaries in relation to an interlocutory application.  He was not sure whether that was before or after 1987.  Mr Morgan was also present on that occasion.  Cridlands account in respect of that matter was rendered to Morgans, as were all others.  Cridlands remained the solicitors on the Court record after 26 October 1988, but it was the solicitors from the office of Morgans who instructed counsel in Court.  He acknowledged that Cridlands had never instructed Morgans to do anything, but had always sought instructions from them.  He regarded Cridlands as being the principal solicitors, except as to matters going to instructing counsel.  Mr Henwood was referred to particular documents.  The documents show that Cridlands sought instructions from Morgans, then acting on behalf of the defendants, as far back as June 1982.  On 25 October 1982, to an unidentified addressee: "Reference your telex today.  We act as Darwin agents for King William Law Chambers, Adelaide, who act for Mrs Howard.  We suggest it would be more appropriate for you to speak to Mr Kevin Rogers of that firm ....".  As to that, Mr Henwood said that it was meant to convey that Cridlands were acting as agents for Morgans in a contractual sense, but not in the sense of their involvement in the proceedings.  He conceded that there had been no discussions between Cridlands and Morgans regarding the issue of principal and agent, and that his views were an interpretation of the events as disclosed in the documents.  There are amongst the documents samples of accounts sent by Cridlands to Morgans. In a letter of 29 May 1985 to Morgans, Cridlands confirmed having carried out instructions given by Morgans.  They also sought payment of an account which was outstanding.  There was included in the letter: "Further, may we take this opportunity to respectfully suggest that you stress to your clients litigation of the type upon which they have embarked will of necessity be quite costly".  Mr Henwood's view was that that part of the letter was not inconsistent to the proposition that the instructions from the defendants were being conveyed through Morgans as their agent to Cridlands as the solicitors having the conduct of the proceedings.  Similarly, in relation to: "We note that this is because you prefer first to obtain the instructions from your clients in respect of the undertaking as to damages which will be required to be provided by us".  There was no document of which Mr Henwood was aware that showed any division of responsibility as between Morgans and Cridlands emanating from the defendants.  On 10 July 1986, Cridlands wrote to Morgans: "We further note that you have apparently now reached some agreement with your clients as to the manner in which you will receive instructions and the funding of this matter generally.  Further, you have apparently advised them of the problems associated with delay ....".  On 24 August 1987 Cridlands wrote to Morgans, noting that the solicitors for the Public Trustee had contacted Cridlands reporting that they had heard nothing further from Morgans since they had last conferred, and noting that Morgans had indicated that they would be forwarding a specific proposal direct to the Public Trustee ....: 

		"On many occasions you have indicated that it was your desire to, effectively, run this litigation from South Australia so as to minimise our involvement in this matter and presumably the cost to your client. We note in this regard you have been liaising at length with Queen's Counsel and have prepared a large brief for the purposes of seeking counsel's advise.  We further note that, apart from some miscellaneous applications, you have not asked us to in any way have the carriage of this matter.  We have no fundamental difficulties with the proposed modus operandi and certainly do not seek to unnecessarily duplicate work and cost.  However, we are becoming increasingly embarrassed by our ignorance of what is happening in terms of the conduct of this matter. You will appreciate that as we are the solicitors on the record, enquiries from both the solicitors for Mr Ah Toy and the Public Trustee are in the first instance directed to us.  In a manner as significant as this, we consider it unsatisfactory that we do not have precise details of what steps are being taken nor a clear understanding of the matters in respect of which you are seeking advice on the proposal which you may ultimately put to the Public Trustee."  

		Cridlands went on to express their concerns about the delay in progress of the proceedings.  They complained about delay in payment of their bills and sought a demonstration of "your client's ability to pay".  

		"Finally, we note that this matter has been listed for late December 1987.  We note that you have indicated you will be attending in Darwin with Queen's Counsel for the hearing.  As indicated previously, the writer, who is familiar with this matter, will not be present in Darwin at that time and given this fact and the time of the year, it is highly likely that our resources in terms of personnel will be stretched.  Whilst we will endeavour to provide you every assistance we can, we confirm, that you should not expect the practitioner attending to this matter in the writer's absence to be in a position to attend, were it necessary, to anything but the most straightforward interlocutory applications prior to the hearing."  

		In conclusion they emphasised that being the solicitors on the record they were accountable to the other parties involved and the Court.  Some questions were put to Mr Henwood about that letter, his view was that since counsel was in Adelaide it was more convenient for Morgans to liaise with counsel.  That particular letter was written by another practitioner in the office of Cridlands and Mr Henwood disagreed with the author that the firm had not been asked to have carriage of the matter.  

		The backsheet on the Reply to the defence of the first and second defendants filed by the plaintiff was endorsed with the name of Cridlands "as agents for Morgans".  That was filed on 20 May 1988, and in October 1988, there was delivered a brief to senior counsel, the backsheet being endorsed by Mr Henwood for Cridlands "as agents for" Morgans.  Mr Henwood said that the brief was endorsed in that way to make it clear to senior counsel that he was to look to Messrs Morgans for his fees, and noted that they had briefed him directly on earlier occasions.  It was acknowledged that the choice of counsel lay with Morgans, although there had been consultation with Mr Henwood as to who might be so engaged.  Accounts for counsels fees went to Morgans and were paid by them.  As to the backsheet on the Reply, Mr Henwood's response was that since it was prior to October 1988, the endorsement reflected the contractual relationship between Cridlands and Morgans, but so far as the Court was concerned, it made it clear that Cridlands had the conduct of the proceedings.  It seems that this was the only document on the Court files, and there were hundreds of them, that were so endorsed.  All others simply showed the name and address of Cridlands.  As to the Reply, the evidence showed that it had been drafted in the office of Morgans and forwarded to Cridlands with a request that Mr Henwood engross and file it.  An affidavit sworn by Mr Henwood of 20 July 1988 was also drawn to his attention in which he deposed to having conduct of the proceedings, but spoke of being aware from contact with the "principals", Morgans, of certain matters.  
		Mr Henwood acknowledged that the overwhelming number of witnesses were proofed by Morgans.  There were some statements which were taken by Cridlands.  Mr Brohier had spent time in Darwin obtaining statements.  Mr Henwood said that the reason why Morgans' proofed witnesses who were in Darwin was because they were more familiar with the documents in the case and which were held by them in Adelaide.  Mr Henwood said he suggested to Morgans that Cridlands take the statements, but the suggestion was not taken up.  In the lead up to the trial, Cridlands issued subpoenas upon the instructions of Morgans acting on the advice of counsel briefed by Morgans.  As to subpoenas to be served within the Darwin area, Cridlands arranged that and paid the conduct money, but for those out of that area all was done by Morgans.  Cridlands, and particularly, Mr Henwood and Mr Berner, had undertaken a large amount of legal research, but so had Morgans and counsel.  

		I was informed that the solicitors' fees included in the bill for taxation, were divided approximately as to $360,000 for Morgans and $109,00 for Cridlands, and as to disbursements, Morgans $425,000 and Cridlands $20,000.  Morgans disbursements included counsel's fees at trial. 

		When the solicitors from Adelaide came to Darwin for the trial Cridlands arranged office accommodation for them, but much of the work was carried out at the hotel room occupied by Mr Brohier.  Morgans engaged local secretarial staff, but, according to Mr Henwood, not for Court documents but for the preparation of submissions and the like, which work, Mr Henwood said, would normally be done by his firm for visiting counsel. Mrs Payne and other beneficiaries were in Darwin from time to time during the hearing.  Mr Henwood thinks he met six or so of them in and around the Court, but never received any instructions direct from any of them.  The conclusion of that cross-examination finished the proceedings at that stage when the further hearing was adjourned to a date to be fixed.  

		When the hearing was resumed an affidavit sworn by Mr Henwood on 1 February 1995, together with bundles of documents, was tendered without objection. 

		In that affidavit Mr Henwood deposed that he had considered the files of Morgans and Cridlands in relation to the proceedings.  He confirmed that the two documents already put to him in cross-examination, which showed on the back sheet that they were filed by Cridlands as agents for Morgans, were the only two documents amongst the dozens filed on behalf of the defendants which had that reference on them.  All others, he said, were noted as having been filed by Cridlands without more.  As to the brief to Mr Barker QC, he said he was responsible for preparing it as well as the summons and affidavit upon which the interlocutory application was made and in which Mr Barker was briefed to appear.  

		Mr Hardy was cross-examined on his affidavit and in relation to the selectivity of the documents which he exhibited thereto, but nothing of significance emerged from it.  

		I have examined the hundreds of documents placed in evidence in this part of the proceedings.  There are none which comprise any formal contract or otherwise set out, or confirm, the relationship as between the relatives and the two firms of solicitors, or between the two firms.  However, the documents do clearly show that relatives regarded Morgans as the solicitors acting on their behalf.  They were advised by Morgans and the instructions of the relatives in relation to the proceedings were relayed by Morgans to Cridlands.  It was Morgans who chose Cridlands to act in the Territory.  The bulk of the direction regarding the gathering of evidence came from Morgans, and it was the solicitors of that firm who took most of the statements of witnesses, many of them in Darwin.  Morgans drafted many of the Court documents including affidavits.  Cridlands' role, in the main, in regard to documents was to engross and file, and in the case of affidavits for deponents living in the Top End of the Territory, to have them sworn.  Morgans drafted many of the pleadings and where required had them settled by counsel briefed by Morgans.  Cridlands was simply instructed to file and serve them.  Counsel were chosen by Morgans, although sometimes at the suggestion of Cridlands, and Morgans played a primary and major role in briefing counsel, attending in conferences and at trial.  Morgans did everything in relation to the complex arrangements for collecting funds on account of costs and paying them, including counsels fees. Cridlands sent accounts for their work to Morgans.  Cridlands, on Morgans instructions, prepared Court documents and briefed counsel in relation to some interlocutory matters.  Their name appears as the solicitors for the defendants on the Court files (once as "agents for" Morgans).  Morgans dealt directly with the Public Trustee and the Public Trustee's solicitor in 
all major matters concerning the involvement of the Public Trustee in the proceedings.  

		In the terminology employed between the solicitors and by others in reference to them, Morgans were the ones "acting for" the relatives and Cridlands were "the agents".  Morgans consistently referred to Cridlands as the "agents".  Cridlands sometimes referred to Morgans as "our instructing solicitors" or the like, and when writing to Morgans spoke of the relatives as "your clients".

		Every indicia as to which of the two firms was acting for the relatives and which was acting on the instructions of the other points to Morgans and Cridlands respectively.  There are, amongst the many documents submitted, examples of Cridlands having acted on their own initiative when necessary, giving advice to Morgans and drafting Court documents, but they are relatively rare in the overall scheme of things extending over a period of about ten years.  In the eyes of Mrs Payne, the relative most closely involved in contact with all the solicitors and counsel, Cridlands were part of a team of professional advisers put together by Morgans.  She always looked to Morgans for advice and reported to the other relatives in terms which leave no doubt which firm of solicitors she regarded as acting on their behalf, Morgans.  

		Given the proximity of many of the relatives, the coordinating role being undertaken by Mrs Payne, who lived in Adelaide, and other factors, it is understandable that Morgans were in the position of being the solicitors to whom the relatives looked for advice and to whom they gave instructions. It is abundantly clear that in doing so the relatives were not using Morgans as a conduit to relay instructions to Cridlands.  Morgans were not simply the agents of the relatives for the purposes of instructing Cridlands.  They were heavily involved in the conduct of the litigation and had control of the relatives' side of it.  None of that is to suggest that there was anything improper in the legal ethical sense in the arrangements come to.  They are much the same as one experiences in many civil proceedings commenced in Alice Springs, where the local solicitor is instructed by the client/party, but requires assistance in Darwin.  He may instruct solicitors in Darwin to do all manner of things associated with the preparation of the case and its progress through the Court, whether or not the Darwin solicitor's office is the address for service.  Had this been such a case there would be nothing untoward about it.  But it is not, the solicitors for the client/party are South Australian solicitors not admitted to practice or holding practising certificates in the Territory until 26 October 1988, the day upon which the trial commenced in Darwin.  There was no significant alteration in the relationship of the client/party after that date to that which prevailed before, even though Mrs Payne and some other relatives were in Darwin during the whole or part of the proceedings with all the solicitors and counsel involved.  If Cridlands were part of the team, as Mrs Payne put it, there is no doubting that Morgans were the captain.

Court Documents and Agents

		Documents on the Court file are to be endorsed on a back sheet with the title of the proceedings and identifying number, a short description of the document, and the name, address and telephone number of the solicitor preparing it.  An originating process is to be endorsed in the case of a plaintiff suing by a solicitor with a name or firm and business address within the Territory of that solicitor, and if the solicitor is the agent of another, the name or firm and the business address of the principal.  I take the reference to "another" to be to "another solicitor".  The prescribed forms for originating process reinforce that view.  The endorsement in Part 3 of the writ, for example, at paragraph 2(c) provides:

		"This writ was filed for the plaintiff by (name or firm of solicitor), solicitor, of (business address of solicitor) or agent for (name of firm or principal solicitor and, where the principal solicitor is a firm, indicate the name of the member of the firm having responsibility for the conduct of the matter), solicitor, of (business address of principal)."

		There is no definition of "principal" or "agent".  One of the purposes of the endorsement upon the writ of the name and address of the solicitor is to meet r6.05 which requires the address of service of a plaintiff to be endorsed on the originating process, being an address not more than 15 kilometres from the registry at which the originating process is filed or, where the business address of the plaintiff's solicitor is more than that distance from that registry, the business address of the solicitor's agent whose office is within that distance.  Similar provisions prevail in relation to an address for service of an defendant (r6.05(2) and r8.06).  As to the form of other documents, r27.03(5) provides that a document shall be endorsed on a back-sheet with the title of the proceedings and an identifying number, a short description of the document and the name and address and telephone number of the solicitor preparing it.  (It would not seem that it is necessary to endorse on the back-sheet the name of the solicitor filing it, even if the solicitor attending to filing is an agent of a principal solicitor who prepared the document).  

		A "principal" is simply one who authorises, or who is deemed responsible for, the acts or defaults of another.  The purpose of the rules is to provide for an address, within the prescribed area, at which Court documents may be served at the office of a solicitor who is either a solicitor for a party or an agent for another solicitor, the principal, who has so authorised.  In this context, the agency is for the purpose of providing an address for service as required by the rules.  It may extend no further.  

Costs

		"An order for costs indemnifies the successful party in litigious proceedings in respect of liability for professional fees and out-of-pocket expenses reasonably incurred in connection with litigation" Kelly v Noumenon Pty Ltd (1988) 47 SASR 182 at 184 per McHugh J. in Latoudis v Casey (1990) 170 CLR 534 at 566.  His Honour continued:

		"The rationale of the order is that it is just and reasonable that the party who has caused the other party to incur the costs of litigation should reimburse that party for the liability incurred.

		As costs between party and party are awarded as an indemnity, a person not in a position to claim to be indemnified is not entitled to party and party costs.  

		If, by reason of some statutory prohibition, a successful party is not liable to pay any costs to the solicitor for the party, the party cannot recover costs from the opposite party, Irving v Gagliardi; ex parte Gagliardi (No 2) (1895) 6 QLJ 200.  Sir Samuel Griffith said:  
			
		"There is no doubt that, as a general rule, costs are given by way of indemnity.  For instance, it has been held that if, by reason of the operation of some statutory prohibition, the successful party is not liable to pay his own solicitor any costs, he cannot recover any costs from the opposite party."
Costs - Legal Practitioners Act and Rules

		Much of the discussion in this case has surrounded the application of s22(4) of the Legal Practitioners Act.  It has little to do with it.  It provides that:

		"A legal practitioner is not entitled to recover any costs or disbursements in respect of any work of a professional nature done by him as a legal practitioner if, at the time at which the work was done, he was not the holder of a current unrestricted practising certificate ...."
		By definition "legal practitioner" means a person whose name is on the Roll of Legal Practitioners kept under the Legal Practitioners Act.  At the time of these events the Roll was one kept by the Master upon which was entered the name of each person admitted to practice as a legal practitioner of the Supreme Court of the Northern Territory.  Until 26 October 1988, neither the names of Messrs Morgan or Brohier had been entered upon the Roll.  Cases such as Fullalove v Parker (1862) 31 L.J.(C.B.) 239; In Re Jones (1869) LR 9 Eq. 63 and in Re Hope (1872) LR 7 Ch. App. 766 and the decision of Kearney J. of this Court in TNT Bulk Ships v Hopkins and Anor (1989) 98 FLR 352 in so far as it depended upon that provision of the Act, those cases are unhelpful.

		The power of the Court in respect of costs is to be traced from s86(2)(c) of the Supreme Court Act, which empowers it to make rules in relation to that matter.  Those rules are to be found in O.63 of the Supreme Court Rules.  The word "costs" is not defined, but it "includes disbursements"  (r63.01(1)). "Disbursements" are payments which are made in pursuance of the professional duty undertaken by the solicitor, and which he is bound to perform whether left in funds by the client or not, or payments which are sanctioned as professional payments by the established custom and practice of the profession (see generally Williams Civil Procedure Victoria Volume 1, paragraph 63.34.10).  The word "disbursements" is not defined.  The costs rules apply to costs payable or to be taxed under the rules or an order of the Court.  Part 3 of the costs rules applies to costs in a proceeding which under an order of the Court are to be paid to a party to the proceeding either by another party or out of a fund.  The order of the Court of Appeal was made on an indemnity basis and thus r63.27 applies.  All costs are to be allowed except to the extent that they are of an unreasonable amount or have been unreasonably incurred, and any doubts about that has to be resolved in favour of the receiving party.  The scales of costs are prescribed by r63.32 and are to be found in Parts 2 and 3 of the Appendix together with the notes and provisions contained in Parts 1 and 3 of the appendix.

		Part 5 of the cost rules is headed "Procedure on Taxation on Standard Basis" but there is nothing to indicate that it is so limited, the Rules themselves being of general application.  I disregard that heading for the purposes of interpretating the Rules.  It will be noted that in r63.40 there is no reference to the person by whom the work referred to in the various portions of the bill is done, except under the subheading "preparation" where there is included at (n) "agency - correspondence and the attendances on agents and work done by them;".  In subr63.40(6) dealing with the contents of a bill for taxation, reference is made to its division into seven columns including "professional costs" and "disbursements".  The Rules acknowledge that work may be done out of the Territory by a lawyer, as opposed to a legal practitioner.  In r63.42 it is provided that where a bill includes a charge for work done by a lawyer practising in a place out of the Territory, the charge is to be shown as a disbursement and as far as practicable the charge shall, if allowed, be allowed in an amount appropriate to the place where the lawyer practices.  Where that rule applies, a bill in taxable form of that lawyer's fees shall be attached to the bill of the party claiming the disbursement.  In this case, the charges of Morgans are set out in a bill in taxable form attached to Cridlands bill, and as previously referred to, are described therein as "agents fees".  It is provided in r63.68 that where a solicitor acts as agent for a lawyer practising in a place out of the Territory, the professional fees of that lawyer shall not constitute a disbursement of the solicitor for the purpose of r63.41 so as to require payment of those fees before the commencement of the taxation.  Rule 63.41 provides that a disbursement may be included in a bill, notwithstanding it has not been paid, if the bill states that fact, and on taxation the disbursement may be allowed if it is paid before the taxation of that disbursement takes place.  It occurs in Part 7 of the costs rules under the heading "Allowances or Disallowances on Taxation Generally" and its purpose is procedural.  However, it does envisage a solicitor, who is a legal practitioner in the Northern Territory, taxing a bill in which he has acted as an agent for a lawyer, that is a lawyer who is not a legal practitioner in the Territory, practising in a place out of the Territory with the professional fees of that lawyer constituting disbursements of a solicitor.  That is not this case.

		The appendix to O.63 in Part 1, paragraph 1 provides that "solicitors are entitled to charge and be allowed the fees set out in Parts 2 and 3 of this Appendix," and Parts 2 and 3 relate to time spent by solicitors and work done by them.  Neither Messrs Morgan or Brohier were solicitors within the meaning of the costs rules or the Appendix.  Cridlands were the only solicitors for that purpose and they were the only ones entitled to charge in accordance with those rules and the Appendix.  The costs rules do not permit the fees of lawyers, who are not solicitors, to be included in a bill for taxation pursuant to an order of the Court in the Northern Territory unless those fees are a disbursement, that is, charges properly paid by the Territory solicitors.  As already mentioned that was not the case here.  

TNT Bulkships

		In TNT Bulkships the position was that the Sydney solicitors, Dawsons, had been what was described as "the principal solicitors" for TNT in the action and the local solicitors, Ward Keller, their Territory agent.  Dawsons had "carried out the bulk of the (legal) work" and had the "carriage of the action" including the briefing of counsel.  Those facts were derived from admissions by TNT.  Here, the relationship between the client and the two firms of solicitors has had to be determined by reference to evidence.  It was not in contention that the legal work carried out by Dawsons in the preparation of TNT's case was "comprehensive" and constituted "the bulk of the work done by solicitors".  It was also found that, apart from counsel, the litigation was in fact conducted by two solicitors with Dawsons, one only of whom had been admitted to practice as a legal practitioner in the Territory and neither of whom held a practising certificate.  In so far as it is relevant, it is plain on an examination of the evidence and the totals of the professional fees claimed by each of the firms of solicitors in this case, that Morgans had done the bulk of the work done by solicitors (as opposed to barristers) and, generally speaking, the litigation was conducted by the two solicitors with that firm, Messrs Morgan and Brohier (there had been others in the early stages, but they were not admitted to practice or certificated either).  

		The problem with the early English cases (see before) dealing with recovery of costs and uncertificated solicitors is that they do not deal with the position where the practitioner is not a solicitor.  In all those cases, the person whose professional costs were sought to be recovered was a person entitled to practise law in England, and the only issue that arose was as to the consequence of the statutory bar on the recovery of fees in the absence of the appropriate certificate. The similar Territory provision, s22(4), does not apply to the solicitors in Adelaide.

		However the scheme of the Act is that a person who is not a "legal practitioner" within the definition of that term in the Act cannot recover professional legal costs, because he cannot lawfully practise law in the Territory.  He cannot charge for activity which it is not lawful for him to carry on, per Kearney J. at p362.  A person not admitted to practice in the Northern Territory cannot be in a better position than one who is but who does not hold a practising certificate.  

		As to the rationale behind provisions of the Legal Practitioners Act, in relation to the regulation of the legal profession see Kearney J. at p367.  It should be noted that the system of regulation is not directed just to legal practitioners from within Australia, but those practising anywhere in the world.  If Cridlands are right in relation to the arguments put forward in support of the bill of costs including the fees paid to Morgans, then the same would apply if, instead of Morgans in Adelaide, the client had instructed a person giving legal professional advice in any place out of Australia.

		At p368 Kearney J. said:

		"A person who is not a legal practitioner as defined in s6 of the Act cannot recover in this Court costs for professional work he does anywhere, in connection with litigation in this Court of which he has the conduct, because he lacks lawful authority to conduct such litigation; the situation is quite different when he is not conducting the litigation, but acting as professional agent on the instructions of a Territory solicitor."

		In summary at p370, his Honour found that the party entitled to costs instructed ex-Territory lawyers as its solicitors with respect to litigation in the Territory.  Since no member of the firm of ex-Territory lawyers held a Territory practising certificate, that firm was legally incompetent to conduct litigation in the Territory.  Quite properly, they engaged Territory solicitors.  Thereafter, however, their relationship with the Territory solicitors was not as required. The Territory solicitors, those solicitors on the record, did not have the carriage of the action as they should have.  The Court looks only to the solicitor on the record as far as responsibility for conduct of litigation is concerned; that does not affect the reality of the situation when it comes to a matter of taxing costs.  The ex-Territory lawyers in fact had the carriage of the action, and the respective solicitors proceeded on the incorrect basis of the ex-Territory solicitors (as principal solicitors) and the Territory lawyers (as agent).

Morgans Professional Fees

		The intention of parliament to be derived from the Legal Practitioners Act, and as reinforced by the Rules made by the Judges of this Court, is to ensure that the interests of the public are served by protecting it against people professing to be qualified to practise law in the Territory, but who are not.  In that it does not stand alone.  The public may be reasonably assured that those who are recognised by the Supreme Court as fit to practise in its jurisdiction and who have a licence by way of certificate from the Law Society to conduct legal practice generally, are persons upon whom they might rely to competently see to their legal affairs contentious and otherwise, within the Territory.  As a means of ensuring that people who do not hold the confidence of the Court and the society are discouraged from acting as legal practitioners, they are effectively denied the fruits of their labour and may suffer criminal sanction.  It is only solicitors, as defined, who are recognised for the purposes of the Court's costs rules, that lawyers from other parts of Australia might be easily enough admitted to practice here and obtain a practising certificate is not to the point.  The law is that competence must be recognised by local authority and that the practitioner be subject to the discipline of the Courts and the Society in the manner prescribed.  It is one thing to be admitted to practice and to have the right to practise, it is another to retain those considerable benefits.

		Morgans did not subject themselves to the scrutiny of the admission process or the regulation and discipline flowing through the Society.  They conducted legal practice in the Territory without lawful authority to do so.  That their clients may be liable to pay for the services which they rendered (and I do not pass upon that) and the fact that they have paid for those services, does not mean that the clients can obtain an indemnity for those outgoings for professional charges.  Otherwise, schemes of local regulation of the members of the legal profession, common to all parts of Australia, would be set at nought.  Those from outside a jurisdiction who wish to practise law within it must bring themselves within the law of the jurisdiction.  Messrs Morgan and Brohier failed to do so until they wished to take their place in the body of the Court as instructing solicitors for the purposes of the hearing. That had no retrospective effect.  They were not "solicitors" within the meaning of the Territory costs rules prior to then, and their charges for professional services made to their clients up to that time are not such as to attract the benefit of the costs order.  Their proper costs after admission and issue of the practising Certificate fall within the costs order. 

Cridlands Professional Fees

		Cridlands were at all times admitted and certificated.  So far as the costs order is concerned, they stand in no different position to that than if the instructions they received had come direct from the defendants.  Their proper costs are within the costs order, although claims for "care and conduct" will need to be carefully scrutinised in each case.  In so far as Kearney J. ruled otherwise in TNT Bulkships, I respectfully disagree.  

Counsels Fees

		None of the fees paid to counsel were disbursed by Cridlands on their own account or from funds held by them on account of the defendants.  Those fees were paid from funds provided by the defendants in Adelaide through Morgans, whether direct from the special account established to fund the action or via those solicitors accounts is not apparent.  In Devereaux and Anor v White and Anor (1896) 13 T.L.R. 52, it was held by the Court of Appeal, comprising Lord Esher M.R. and Lopes and Rigby L.JJ., that although payment of counsel's fees was a matter between solicitor and counsel, payment of counsel's fees by cheque drawn by the client, though irregular, did not preclude the inclusion of those fees as disbursements in the solicitors bill on taxation.  They were professional disbursements usually made by a solicitor in the performance of his professional duty. (Butterworths Costs - 3rd Ed. Vol 2, p1461).  In this case counsel's fees were incurred by Morgans, but paid out of funds provided by the defendants.  They are disbursements which ought to be allowed upon taxation, subject to any other objections, and to counsel having been admitted to practice in the Territory and holding 
the appropriate practising certificate at the relevant time.

Order

		The Master is directed in terms of the determinations made in these rulings.

		These proceedings were necessary consequent upon the defendants' decision to instruct Morgans in the conduct of the proceedings.  They must pay the costs of this reference.