EV20 Consulting Group Pty Ltd v Paperless Warehousing Pty Ltd (No 3)

This judgment came after the main proceeding had already produced serious consequences for EV20. In earlier 2025 decisions, the court dismissed EV20's claim and allowed Paperless' cross-claim, with EV20 ordered to pay costs. Paperless then took the unusual further step of applying for costs orders against EV20's solicitors, Gillis Delaney Lawyers, personally.

That matters because a personal costs application against solicitors is not just a side issue. It can turn a dispute between two businesses into a second dispute about the lawyers' authority, conduct and exposure. Here, Paperless said Gillis Delaney had never been properly authorised to act for EV20, and also alleged unreasonable conduct in the way the litigation had been run.

The court's reasons make clear that this was not a fresh hearing about the underlying copyright fight. The focus was narrower and more practical. The court had to decide whether the people who had been giving instructions to Gillis Delaney actually had authority from EV20, whether that authority continued as personnel changed, and whether any later confirmation by a new director was enough to ratify the arrangement if there had been a defect.

For business owners, that is the real commercial story. A company can spend years fighting one dispute, only to face another argument about whether the right people were ever speaking to the lawyers in the first place. If authority is unclear, the other side may try to use that uncertainty to attack the retainer and seek costs consequences.

Paperless challenged authority across three periods. First, it said Gillis Delaney had not been properly instructed when the proceedings began in 2021 because there was no evidence that EV20's sole director and shareholder, Peter McKerrell, had confirmed that the people dealing with the firm were authorised to do so. Those people included Scott Symons, Grant Smith and Chris Pearce.

Secondly, Paperless said authority failed from 13 October 2022, when Rod Peters emailed saying he had 'just taken over the helm at EV20'. Paperless argued that Peters did not have actual authority and that Gillis Delaney therefore had no authority to continue acting for EV20 from that point.

Thirdly, Paperless relied on a fresh ASIC search obtained in February 2024 showing that McKerrell was no longer a director and that Zoran Markovic had become sole director and secretary from December 2023. Paperless argued that an email received on 7 February 2024, in which Markovic agreed that Peters and Len Anderson could instruct Gillis Delaney on all legal matters, was ineffective and did not cure the problem.

Paperless also advanced an alternative case that Gillis Delaney had behaved unreasonably in the conduct of the proceedings and should therefore face personal costs orders on that basis. The court treated that as a separate and serious allegation requiring proper notice and evidence.

The central legal issue was whether Gillis Delaney had actual authority to act for EV20. The judgment explains that actual authority may be express or implied. In a company context, implied actual authority can arise from acquiescence in a course of conduct by those who do have authority to delegate. The court also referred to authority recognising that a managing director, or someone effectively performing that role, may have implied authority to engage solicitors for ordinary litigation connected with the company's business.

Just as importantly, the court stressed that ostensible authority alone is not enough for a valid solicitor retainer on behalf of a company. A person may appear senior or may look like the decision-maker from the outside, but the question is whether the company actually authorised them. That is why the court examined EV20's internal practical arrangements, the sole director's knowledge, and the surrounding conduct over time.

The judgment also dealt with ratification. Even if a solicitor originally acted without authority, the company may later ratify the act, and that ratification can operate retrospectively. Whether there has been ratification is a factual question. The conduct relied on must amount to clear adoptive acts, and the principal must have enough knowledge of the material circumstances to decide whether to adopt the unauthorised act.

Finally, the court had to consider whether the solicitors had behaved unreasonably in a way that justified personal costs orders under the Federal Court of Australia Act. The reasons show that the court rejected that allegation because there had not been sufficient notice to allow proper submissions and there was an absence of evidence to prove it.

At the start of the proceedings, the court looked closely at who was instructing Gillis Delaney and what roles they held. Mr Gillis said he first received instructions in January 2021 from Scott Symons, whose correspondence described him as EV20's Executive General Manager. He also received instructions from Grant Smith, whose correspondence described him as Sales Lead Consultant. On 14 January 2021, Mr Gillis spoke with Symons and Chris Pearce, and his evidence was that Symons and Smith described Pearce as 'the boss'. Pearce's correspondence used the title Executive Chairman.

The court also noted evidence from Pearce's own affidavit in 2021 that he had overall responsibility for guiding EV20's operations and had a team of management executives reporting to him. The judge said that description suggested Pearce's role equated to that of a managing director. That was significant because the authorities discussed in the judgment recognise that a person effectively running the day-to-day business may have implied authority to engage solicitors for ordinary litigation.

The surrounding conduct mattered as well. On 8 February 2021, Gillis Delaney issued a formal costs agreement to EV20, and Pearce executed it on behalf of the company. Funds were then deposited into the firm's account. Later, Kevin Mannion, described as Software Design Consultant, also provided instructions on technical issues relevant to the software in dispute. From May 2021, emails to the firm were also copied to Len Anderson, whom Pearce described as an investor in EV20.

When Paperless filed its cross-claim in July 2021, EV20's sole director and shareholder, Peter McKerrell, was joined personally as a cross-respondent and was also represented by Gillis Delaney. At a court-held mediation in August 2021, Pearce and Anderson attended on behalf of EV20. The judge considered these facts highly significant. In that context, the suggestion that Gillis Delaney had never been authorised to act for EV20 had, in the court's words, an 'air of unreality'.

The court inferred that McKerrell was well aware that Gillis Delaney was acting for EV20 and that Pearce and Anderson attended the mediation with his approval. The judge also noted that Paperless, which bore the onus of proving absence of authority, had not tendered EV20's constitution. The reasons say it was entirely likely that decisions about the conduct of the litigation had been delegated by McKerrell to Pearce and his subordinates, and that no other sensible inference was available given McKerrell's own involvement in the case and his personal representation by the same firm.

That part of the judgment is a practical reminder that courts do not look only for a single formal document. They may infer implied actual authority from the whole course of dealing. But the court was able to do that here because the evidence showed a coherent operational history, not because formality is unnecessary in every case.

The second challenge focused on a handover in October 2022. Rod Peters emailed Mr Gillis on 13 October 2022 saying that Chris Pearce had taken extended leave from EV20, Len Anderson was unwell and only working periodically, and that Peters had 'just taken over the helm at EV20'. The email was copied to Pearce and Anderson. It did not identify Peters' formal title.

The next day, Pearce emailed from his EV20 email address saying he wanted to make sure Mr Gillis was across the situation. Pearce said he had been working on and paying for EV20 for over two years, that he had to start looking for roles to earn income, and that Len and Rod were working on the payment issue. He also said he would still advise in the business from time to time and remained in contact with Len and Rod.

Mr Gillis gave evidence that after receiving Peters' email, he spoke with Pearce and Anderson and they confirmed that Peters was taking over the helm at EV20. No witness was cross-examined, and the judge accepted that evidence. The court had already found that Pearce and Anderson were authorised to provide instructions to Gillis Delaney. That finding was enough, in the judge's view, to support the conclusion that they were also authorised to confirm that Peters could take over the role of giving instructions to the firm.

The court also rejected the suggestion that Pearce had ceased to have any relevant involvement in EV20 after 2021. The evidence showed he remained involved until October 2023. Invoices for work done in 2022 and 2023 were addressed to 'Mr Chris Pearce, EV20 Consulting Group Pty Ltd' until May 2024, and the invoice recitals indicated that Pearce continued to confer with the firm throughout 2022 and into 2023.

On those facts, the court found there was no reasonable basis to suppose that Pearce and Anderson lacked implied authority from McKerrell to authorise Peters to provide instructions on behalf of EV20. The proceedings had by then been on foot for about 18 months. McKerrell still remained a client of Gillis Delaney in his personal capacity and remained EV20's sole director and shareholder at that time. The conduct of the litigation continued, invoices were rendered and paid, and the circumstances did not justify the conclusion that the proceedings had ceased to be prosecuted with proper authority.

For businesses, this part of the judgment shows how handovers during litigation should be handled. The court accepted the handover here because there was evidence of confirmation from people already found to be authorised, and because the broader history supported continuity. A cleaner and safer approach in practice is to document the handover expressly.

The third challenge arose after Gillis Delaney conducted a fresh ASIC search on 2 February 2024 and learned that McKerrell was no longer a director and that Zoran Markovic had become sole director and secretary from 9 December 2023. The reasons explain that payment issues and third-party indemnity issues had made Mr Gillis think it prudent to confirm that the instructions he was receiving from Peters and Anderson were sanctioned by the sole director. He therefore asked for confirmation.

On 7 February 2024, he received an email from Peters with the subject line indicating director's authority to act, followed by an email stating: 'I Zoran Markovic agree for Rod Peters & Len Anderson to instruct Gilles Delaney Lawyers on all legal matters.' Paperless argued that this was insufficient and should be given no weight.

The court first held that no ratification was actually necessary because Peters and Anderson already had authority to provide instructions. But the judge went on to say that, if that view were wrong, the email from Markovic was sufficient ratification. The court inferred that, as sole director and shareholder, Markovic had familiarised himself with the affairs of the company and was aware of the legal matters to which he referred. The judge rejected the submission that Markovic lacked full knowledge of the relevant circumstances.

The court also rejected the attack on the provenance of the email. Although the email had been supplied by Peters and there was no direct evidence from Markovic, counsel for Paperless did not submit that it was fraudulent. The judge would not infer that it was not from Markovic and did not treat it as having no weight. After the email was received, Peters and Anderson continued to provide instructions, the firm continued to provide legal services, and invoices continued to be issued.

Burley J dismissed Paperless' interlocutory application. The court held that Gillis Delaney was authorised to act for EV20 and rejected all three authority challenges. The judge found that authority at the commencement of the proceedings could be inferred from the surrounding circumstances, including the roles of the people instructing the firm, the executed costs agreement, payment of funds, the sole director's knowledge and involvement, and attendance at mediation by senior EV20 figures.

The court also held that the October 2022 handover to Rod Peters was validly supported by confirmation from Pearce and Anderson, who themselves had authority to instruct. As to February 2024, the court said no ratification was needed because authority already existed, but that the email from Markovic would in any event have been sufficient ratification if required.

The allegation of unreasonable conduct was also dismissed. The reasons state that there had been a lack of sufficient notice to advance submissions on that case and an absence of evidence to demonstrate the allegations. The final orders were that Paperless' application be dismissed and that Paperless pay Gillis Delaney's costs of the application, as agreed or taxed.

So the result was not merely that the solicitors escaped a personal costs order. The court positively ordered the unsuccessful applicant to pay the solicitors' costs of defending the application. That underlines the risk of running an authority challenge without a strong evidentiary basis.

This case shows that courts will look at authority in a practical, commercial way. They will examine the real operating history of the company, not just whether a single formal resolution is in evidence. Here, the court was prepared to infer implied actual authority from the way EV20 had operated, the seniority of the people involved, the sole director's knowledge, the signed costs agreement, the payment of invoices and the conduct of the litigation over time.

But businesses should not take from this that informal arrangements are safe. The court accepted authority on these facts because the evidence pointed strongly in one direction. In another case, missing documents, disputed handovers, inactive directors or inconsistent communications could produce the opposite result. If the other side can create doubt about who was authorised, that doubt itself can become expensive.

The judgment is also a useful reminder that actual authority and ostensible authority are different things. A person may have an impressive title, may be copied on every email, or may appear to be running the matter, but that does not automatically mean they can bind the company in retaining solicitors. Businesses should therefore make sure their internal governance and their external communications line up.

If your company is in a dispute, especially a long-running one, treat authority to instruct lawyers as a live governance issue. Review it at the start, after any management change, after any ASIC-recorded change, and whenever someone new starts giving directions to the legal team. A short written confirmation can save a great deal of cost later.

The judgment is a good example of how apparently ordinary documents can become central evidence in an authority dispute. The court relied on the ASIC searches, the formal costs agreement executed on behalf of EV20, payment of funds into the firm's account, emails showing who was communicating with the lawyers, mediation attendance, and invoices showing who continued to confer with the firm over time.

That is important for businesses because authority disputes are often proved or disproved through routine records rather than dramatic evidence. A signed costs agreement, a clear email from the right person, or a file note of a handover conversation can be highly persuasive. Equally, if those records are missing, the company may be left trying to reconstruct authority from memory after relationships have broken down.

The court also paid attention to conduct that made Paperless' challenge less convincing. McKerrell was not only EV20's sole director and shareholder for much of the relevant period, he was also personally a party to the cross-claim and represented by the same firm. Pearce and Anderson attended mediation on EV20's behalf. Invoices continued to be rendered and paid. Those facts made it difficult to accept that the firm had somehow been acting without authority all along.

For a business owner, the message is straightforward. If you want your authority arrangements to stand up under pressure, make sure your documents and your conduct tell the same story.

This page is based on EV20 Consulting Group Pty Ltd v Paperless Warehousing Pty Ltd (No 3) [2025] FCA 1348, a Federal Court of Australia judgment delivered by Burley J on 3 November 2025. The decision concerns a third-party costs application against solicitors, including issues of actual authority, implied authority, ratification and alleged unreasonable conduct.

The reasons refer to earlier judgments in the same proceeding and assume familiarity with them. This page therefore focuses on the authority and costs issues decided in this judgment and does not attempt to give a full account of the underlying dispute beyond what the reasons expressly state.