The matter of Alexiou v Alexandra White and ors t/as HWL Ebsworth Lawyers  NSWSC 485 handed down on 7 May 2021 examines the oft fraught question as to ownership of file notes made by a solicitor in the course of representation and whether a solicitor is entitled to charge a former client for the provision of client documentation.
The plaintiff, a former client of H WL Ebsworth lawyers filed a summons on 21 February 2021 seeking all itemised bills prepared by HWLE in respect of legal services provided under the cost agreement between the parties of 18 November 2014; all documents held by HWLE in relation to legal services provided; all documents, including memoranda, emails and file notes recording or referring to communications with various parties.
Prior to the hearing, HWLE provided the itemised bills as requested together with client documents save for file notes which it contended it was not required or obliged to deliver up.
By way of background, the plaintiff was employed by ANZ and was one of a number of employees who received a summons to appear at examinations in connection with an ASIC investigation concerning manipulation by ANZ as to the Bank Bill swap rate.
On 18 November 2014 the plaintiff entered into a costs agreement with HWLE with the scope: of work described as:
“advise and represent you in relation to the ASIC Examination, any further ASIC Examination and in relation to meeting with the Australia and New Zealand Banking Group Limited (ANZ) concerning the subject matter of ASIC’s Investigation. ANZ has agreed to pay our reasonable costs for acting for you (the Work).”
ASIC ultimately brought proceedings against ANZ but no findings of misconduct were made against the plaintiff. In September 2015 ANZ terminated the plaintiff’s employment and the plaintiff is currently pursuing ANZ in the Federal Court arising out of the termination.
HWLE acted for the plaintiff up to August 2016 and all bills of cost were sent by HWLE to ANZ (who paid same) with the plaintiff not receiving copies.
On 31 July 2019 the plaintiff requested that HWLE release his file to his new solicitors.
The plaintiff was not seeking delivery of every file note held on the file, but those specific to communications with ANZ, Clayton Utz, Counsel for the defendant and ASIC.
Both parties sought to rely on the decision of the New South Wales Court of Appeal in Wentworth v De Montfort and Others (1988) 15 NSWLR 348 where it was found by Hope JA at [353F]:
“if a solicitor is acting only as agent for a client who is his principal in the doing of some act, the ordinary rules of agency apply to him, and documents brought into existence or received by him when so acting belong to the client.”
Reference was also made to the text of Cordery on Solicitors, 8th ed, (1988), in which the following principles were propounded:
- documents prepared by the solicitor for the benefit of the client and which may be said to have been paid for by the client, belong to the client;
- documents prepared by the solicitor for his own benefit or protection the preparation of which is not regarded as an item chargeable against the client, belong to the solicitor;
- documents sent by the client to the solicitor during the course of the retainer, the property in which was intended at the date of despatch to pass from the client to the solicitor, belong to the solicitor; and
- documents prepared by a third party during the course of the retainer and sent to the solicitor (other than at the solicitor’s expense), belong to the client
In Wentworth [358E] (which did not find favour completely with the Cordery propoundments), notes made by a solicitor of conversations with persons other than his client but relating to the client’s affairs may fall into an almost indefinite number of classes.
The plaintiff submitted that the file notes fell within category one above whereas HWLE submitted that they fell within category two.
Reference was also made to the more recent decision of Parker J in Touma v Maroulis  NSWSC 34 where his honour found:
“13. First, Mr Maroulis’ only obligation was to hand over the ‘client’s documents’. Not every document which comes into the hands of a solicitor, for the purpose of conducting litigation on the client’s behalf, is necessarily a document which belongs to the client.
14. The solicitor is the client’s agent in conducting litigation. Accordingly, documents generated in the course of the solicitor’s dealings with the Court, with other parties, and with others who are retained or communicated with by the solicitor as agent for the client, are held by the solicitor as agent and belong to the client. But documents which are prepared for the solicitor’s own internal purposes (including copies of correspondence between the solicitor and the client) are not generally documents belonging to the client and are not held by the solicitor as agent. It will, of course, be otherwise if the solicitor has charged the client for the making of such copy documents. See generally Wentworth v De Montfort (1988) 15 NSWLR 348 at 355-356.”
It was put by HWLE in evidence that they did not charge for the preparation of any file notes and that file notes were prepared for HWLE internal purposes.
Attention was then drawn to a particular conference where two solicitors for HWLE were in attendance and both charged 3.3 hours for their attendance. HWLE submitted that no charge was made in relation to the preparation of the file note in relation to that meeting. It was inferred that the file note was made contemporaneously.
It was found that that file notes made at the meetings with solicitors representing the ANZ or with ASIC or even counsel retained on behalf of the plaintiff or file notes of conversations with representatives of those entities would not have only been made for the internal purposes and protection of the solicitors and not the client, even though there had been no direct charge to the client (or ANZ) for the work of drawing the file note.
Further, the evidence did not disclose why it was necessary for more than one solicitor to attend the meetings. Cavanagh J stating at  that Experience might suggest that in circumstances in which more than one solicitor from a law firm attends meetings or sits in on telephone conversations, the more junior solicitor might be there primarily to make notes.
He continued at :
It is hardly necessary that I list all of the uses to which such file notes might be put. The purpose of making contemporaneous file notes at meetings with third parties may include so as to later confirm statements made in the meeting or conversation by way of follow-up letter or email or subsequent written request for clarification of matters raised in the meeting. The purpose of making notes at a conference with counsel may be to record counsel’s view about the matter. I do not take anything said in either Wentworth or Touma as suggesting that such notes would ordinarily be taken for the benefit of the solicitors.
As to HWLE’s evidence that they had not charged for the preparation of the file notes his honour found at 
However, what the client has really paid for is what they do at the meeting. The client pays the solicitor for the time spent at a meeting because the solicitor is undertaking work at the meeting on the client’s behalf to the best of the solicitor’s skill and ability. Having regard to the solicitor’s skill, expertise and experience, the client pays more for a partner’s attendance at a meeting than an employed solicitor because the partner may be assumed to have a greater level of experience and expertise. The work of taking notes is usually delegated to the less senior solicitor.
And at 
[…] The proposition that such notes (when taken by a HWLE solicitor) are not being taken for the benefit of the client and are not the subject of any charges to the client, might give rise to a question as to why there should be any charge to the client in respect of the second solicitor’s attendance.
HWLE were ordered to provide the notes requested.
Costs of production
Submissions were then made by HWLE that the plaintiff pay its costs of complying with the order to deliver up the documents, estimated at 20 hours, in order to review the file to extract the requisite documents, noting that had the plaintiff sought the documents by way of subpoena or discovery for the purpose of pursuing the Federal Court proceedings then in such circumstances compliance costs would be recoverable.
HWLE had no clause within the cost agreement that would entitle them to charge of such compliance costs.
Cavanagh J summarised position at  when he found:
A solicitor has professional obligations. The Solicitors’ Rules guide solicitors in the conduct of their practice. The obligations of a solicitor include returning client documents to the client when requested to do so. It seems to me that this is an ordinary function of operating a professional practice. A request by a client to return client documents to him should not be met with a further costs agreement allowing the solicitor to charge an hourly rate for returning client documents to the client.
In summary, all file notes prepared by a law practice are the client’s unless there it is clear that they were prepared for the protection of the law practice.
The fact that the law practice does not charge for creation of the file note to the client is not necessarily indicative that the file note was created for the benefit of the law practice. As his Honour found in Alexiou, it can be inferred that at a meeting with multiple practitioners which results in a file note of the meeting being created it is by the fact that the more than one practitioner at the meeting a strong inference that in reality the client is being charged for the file note because the client pays for the attendance of the note taker.
It should be noted his Honour did note that HWLE could have led evidence to rebut the inference but did not.