June 2008 – The Australian Professional Liability Blog

30 June, 200823 January, 2009

Court’s discretion in relation to costs not abrogated by contractual promise to pay indemnity costs

Update, 23 January 2009: See also Reading Entertainment Australia Pty Ltd v Burstone Victoria Pty Ltd (No 2) [2005] VSC 137, Reading Entertainment Australia Pty Ltd v Whitehorse Property Group Pty Ltd [2007] VSCA 309Irani v St. George Bank Limited [2005] VSC 456; Abigroup Ltd v Sandtara Pty Ltd [2002] NSWCA 45.

Original post: National Australia Bank Ltd v Chen-Conway [2008] NSWSC 485 reiterates and approves the following propositions to be found in Micarone v Perpetual Trustees Australia Ltd & Ors (No 2) [1999] SASC 533 per Olsson, Debelle and Wicks JJ (at [32]):

‘The general rule is that, in the absence of an agreement to the contrary, a mortgagee is entitled to costs on a party and party basis: The Kestrel (1866) LR1A&E 78; In re Queen’s Hotel (Cardiff) Ltd; In re, Veronon Tin Plate Company Ltd [1900] 1 Ch 792; Re Adelphi Hotel (Brighton) Ltd District Bank Ltd v Adelphi Hotel (Brighton) Ltd [1953] 1 WLR 955; Re Shanahan; Re A Solicitor’s Bill of Costs (1941) 58 WN (NSW) 132; Jamieson v Gosigil Pty Ltd [1983] 2 Qd R 117; AGC (Advances) Ltd v West; AGC (Advances) Ltd v Cranston (1984) 5 NSWLR 301; Katsaounis v Belehris (1994) 179 LSJS 143 at 155 – 156. The expression of a contrary intention must be “plainly and unambiguously expressed” to use the words of Vaisey J in Re Adelphi Hotel Co Ltd (above) at 961. Generally speaking, a contractual obligation to pay all costs is not construed to require payment of costs improperly or unreasonably incurred, such an obligation being open to objection on public policy grounds: Gomba Holdings (UK) Ltd v Minories Finance Ltd (No 2) [1993] Ch 171 at 187 – 188. That difficulty does not exist in this case since the obligation to pay solicitor and own client costs is subject to conditions as to reasonableness: Citibank Savings Ltd v Pirrotta [1998] ANZ ConvR 442; Elders Trustee and Executor Co Ltd v Eagle Star Nominees Ltd (1986) 4 BPR 9205. To make good any objection upon taxation, the mortgagors should be required to satisfy the taxing officer of the unreasonableness of the item, doubts being resolved in favour of the mortgagee: Katsaounis v Belehris (above) at 157 approved in Citibank Savings Ltd v Pirrotta.’

But it also says:

‘The court will usually give effect to an express contractual obligation but, nevertheless, retains a discretion to award costs on some other basis: ANZ Banking Group (New Zealand) Ltd v Gibson [1981] 2 NZLR 513 at 524 – 525.’

25 June, 2008

Onus of proof in costs disputes between lawyers and clients

In Nicholson v B&S [2000] VLPT 28, the Legal Profession Tribunal’s Registrar Howell, considered three questions about the burden of proof:

Where there is a dispute about the amount of legal costs, must the client prove that the costs were too great, or must the lawyer prove that the costs were just right?
Where there is an application to set aside a costs agreement, must the client prove that there was a costs agreement as a starting point in the case, or must the lawyer?
If a client alleges, as a reason why a costs agreement should be set aside pursuant to s. 103 of the Legal Practice Act, 1996, that the lawyer engaged in misconduct or unsatisfactory conduct, does she have to prove the allegation according to the Briginshaw standard of proof or is it sufficient to prove it on the balance of probabilites as more ordinarily understood?

The second one is obvious, an issue thrown up only by an out of left field submission by an unrepresented litigant. The answer is that the client must prove the existence of a costs agreement before an order may be made at her application for it to be set aside. The answer to the third is simple: the Briginshaw standard described in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 @ 362, which says, in its application to disciplinary proceedings —

The civil burden of proof — on the balance of probabilities — means different things in different cases. If you want to make out a case of serious wrongdoing, like misconduct, you’d better do a good job of convincing the Court.

The first is a little less obvious. Here is Registrar Howell’s take on the issue: Continue reading “Onus of proof in costs disputes between lawyers and clients”

21 June, 2008

Online archive of classic cases as reported in The Times

The Times has put online facsimiles of the original newspaper law reports of 200 classic cases which have been influential in moulding British law. The Times Law Reports are actually to be found daily in The Times. I met an urbane thong vendor in a small seaside village near Columbo once who read them religiously, pointing out that as a businessman, it was important for him to keep up with law. It was a beautiful moment. They are summaries, written by barristers, unlike most of the modern Australian reports which contain the full text of a judgment, only rarely edited, accompanied by a headnote. Here, for example, is Donaghue v Stephenson. David Pannick QC’s paean to the law reporters of The Times may be found here. The article points out that not all law reporters have been so well received:

‘Isaac Espinasse was a law reporter working at the end of the 18th century. In a 1953 case in the Court of Appeal, Lord Justice Denning commented on the inadequacy of his work, noting: “It is said that he only heard half of what went on and reported the other half.”’

18 June, 2008

Two costs disclosure default cases in VCAT

In retainers governed by the Legal Profession Act, 2004, failures to disclose matters which the Act requires to be disclosed about future legal costs can have the result that the solicitors may not recover their fees whether by proceedings or otherwise until they have been the subject of a solicitor-client taxation in the Supreme Court, generally at the solicitors’ expense regardless of who ‘wins’ the taxation (i.e. regardless of whether the Supreme Court affirms the solicitors’ bill or substantially discounts it). The draconian provision which says so, s. 3.4.17, and the provision which says one of the things non-disclosure of will trigger s. 3.4.17 is a change to the original estimate (s. 3.4.16) are set out at the end of this post.

In the first case, a file handler changed firms. The new firm did not reiterate the old firm’s estimate of fees and they were told to go off and have a Supreme Court taxation over a bill for $2,500 before coming back and continuing their proceeding. Unless the solicitor is found not to be entitled to any fees, a Supreme Court taxation ends with a Supreme Court order to the client to pay the amount found to be appropriate. The solicitor would presumably go back to the Tribunal only if there were defences which the Taxing Master did not have power to deal with and which VCAT’s Legal Practice List would.

In the second, the failure of a solicitor to update his fee estimate for the first 10 days of a retainer in which the original estimate blew out by over 50%, was found not to have breached s. 3.4.16 because in the context of the retainer over 10 days, it was not reasonably practicable to give the update. The decision must mean that there is no absolute duty on a solicitor to keep track of costs as they are accruing and to advise the client when the original estimate is exceeded. Continue reading “Two costs disclosure default cases in VCAT”

14 June, 200826 June, 2008

Lawyers’ fees are hot news all of a sudden

Update, 26 June 2008: The managing partner of the controversial NSW personal injury practice referred to below was fined $10,000 by the Administrative Decisions Tribunal’s Legal Services List for advertising in contravention of conduct rules despite a prior warning from the Legal Services Commissioner. One wonders whether any enquiry was entered into about how much business was generated by the advertising. If not, the fine of $10,000 may in fact attract further breaches of the law as a cost effective means of buying your way out of the prohibition on advertising.

The Australian reports that there are calls for national unification of the over-complicated and increasingly divergent costs disclosure regimes around the country.

Original article: Front page article in The Melbourne Times: ‘Case for Change: Putting the Cost of Justice on Trial’. It’s all about a pack of convicted crims who have set up an electronic vehicle for the dissemination of jailhouse savvy, the wonderfully named ‘Crimassist‘. They tend towards the view that legal fees are a bit on the high side. You can bet your bottom dollar that the unqualified practice boffin at the Law Institute is watching keenly despite the anonymous website proprietors’ brilliant anti-conviction technique of plastering the site with explanations that none of it is legal advice. Then there’s a long Sydney Morning Herald article about a prominent Sydney personal injuries practice which is either so seriously on the nose that it’s surprising that their practising certificates haven’t been suspended, or, as they say, victims of a terrible vendetta by embittered former employees who are controlling and manipulating their former clients. If nothing else, it must be said that the firm is very generous: when one of its clients complained of overcharging, it flicked him $100,000 and later said it was just a commercial goodwill gesture, and no admission at all of overcharging. Then Victoria’s Attorney-General has lashed out at barristers’ fees out of the blue, prompting a fairly strong response from the likes of Richter and Burnside QCs. Continue reading “Lawyers’ fees are hot news all of a sudden”

12 June, 200812 June, 2008

Lawyer to gangland figures not guilty of alleged crimes

The Crown entered a nolle prosequi on Tuesday on the charges of giving false evidence against Melbourne’s best known female criminal lawyer, Z G-W. In other words, they dropped the charges before trial for want of a reasonable prospect of conviction. The key witness was unable to remember crucial evidence which the Crown obviously figured he would remember. The most interesting fact to emerge from this latest development in the saga is that one of the bits of allegedly false evidence was that spirits had told the solicitor the details of Lewis Caine’s murder. She said that spirits were talking to her. It will be interesting to see what the Legal Practice Board and VCAT make of all this. The solicitor’s VCAT proceeding is a merits review under the VCAT Act, 1998 of the Board’s decision not to renew the solicitor’s practising certificate. Parties to such proceedings may not refuse to answer questions on the basis of the privilege against self-incrimination: ss. 80(3), 105 of the VCAT Act, 1998 which are reproduced below.

I wonder whether anything would stop the Board from calling the solicitor as its own witness and just asking her whether she lied on oath, or, if she were to give evidence, cross-examining her about this. If she did, she would presumably be obliged to say so honestly, though her answers could not be used to prosecute her again, only to inform VCAT in its decision about whether she is a fit and proper person to hold a practising certifiate. In ascertaining whether a person is of good fame and character, or otherwise a fit and proper person to hold a practising certificate, the stipes are entitled to take into account not only criminal convictions but criminal charges, even where the charge resulted in an acquittal: Frugtniet v Board of Examiners [2002] VSC 140, a decision of Justice Pagone. Continue reading “Lawyer to gangland figures not guilty of alleged crimes”

10 June, 200825 October, 2008

George Bilbie, solicitor, of Newcastle, still practising aged 100

Update: 25 October 2008: He died on 19 October 2008, still aged 100.

Original post: A solicitor who did not know how to use a telephone when he started work in the law, and who describes himself as the last of the last old style family solicitors, has renewed his practising certificate for his 101st year. He has had some of his clients for 70 years. His name is George Bilbie. Photos here.

10 June, 200811 June, 2008

Pastor-solicitor-property developer profiled in the Sunday Age

The latest lawyer profile in a weekend zine is the Sunday Age‘s portrait of a fundamentalist preacher cum solicitor cum property developer’s stoush with some parishoners who say he allowed them to have a part of a property investment which would yield profits over the one year of the investment of 25% to 45%, only for it to go bad in ways they’re not entirely sanguine about. He used to be a Melbourne solicitor, and is a graduate of the school of Henry Kaye. Notwithstanding his status as a man of the cloth, the portrait is not quite as hagiographical as some of the other portraits mentioned in this earlier post identifying the mainstream media lawyer profile phenomenon, and therefore makes it all the more worth the read. For example, I like the way the pastor-solicitor-property developer’s wife Lorilea is said by the Sunday Age to have suggested the parishoner-investor rid himself of his undue focus on things material and stop fighting ‘tooth and nail for those things that rust and moth doth corrupt.’ I just love that use of ‘moth’ with ‘doth’, though credit must go to Matthew at chapter 6 verse 20.

9 June, 200820 November, 2008

Negligent misstatement limitation period lecture

Update, 20 November 2008: The latest decision is Pegasus Management Holdings S.C.A. v Ernst & Young (a firm) [2008] EWHC 2720 (Ch). A CMS Cameron McKenna Law Now note may be read here.

Original post: The Law Institute is putting on a lecture at lunchtime on 24 June 2008 by an ex-megafirms lawyer who has gone boutique, Margot Clarkson. It will be about the very specific topic of limitation periods for negligent misstatement cases (though somewhat oddly, the case featured in the flyer, Wardley v Western Australia (1992) 175 CLR 514 is a pure misleading and deceptive conduct case). I treated that topic at some length in an article imaginatively titled ‘Legal Professional Liability Part II’ at (2001) 9 Torts Law Journal 1 (I have reproduced the relevant bit below), and have blogged about it from time to time since (see these posts). It’s a difficult topic, and such a seminar is welcome. It costs $80 for LIV members and $160 for non-members.

This is what I said in the article: Continue reading “Negligent misstatement limitation period lecture”

6 June, 20086 June, 2008

Substantial personal costs order application against solicitor fails

The latest application for an order that a party’s solicitor pay the costs of proceedings personally is Whyked Pty Ltd v Yahoo!7 Pty Ltd [2008] NSWSC 477. In dismissing the application, Justice McDougall commented:

‘[185] In theory, the courts are open to all. In practice, access to the courts is often dictated by the availability of financial resources. That is an unfortunate fact of life. It does not mean that those without resources should be barred from the courts, particularly where legal practitioners are prepared to accept instructions on a contingency basis.

[186] The policy underlying the power of the courts to order for security costs is based on different considerations. Undoubtedly, the exercise of that power has the effect from time to time of preventing arguable cases from being run. Where that happens, it should be pursuant to an order of a court on an application for security for costs, after balancing all relevant considerations. It should not be pursuant to a decision of a legal practitioner who is afraid to accept instructions from an impecunious client because the defendant, if successful, may obtain an order for costs against the legal practitioner personally.’

His Honour stated the law as follows: Continue reading “Substantial personal costs order application against solicitor fails”

5 June, 20085 June, 2008

Misfeasance in public office claim against solicitor survives immunity strike out application

The latest advocates’ immunity case is Noori v Leerdam [2008] NSWSC 515. The defendant solicitor was said to have been guilty of misfeasance in public office constituted by work he did for Phillip Ruddock as Immigration Minister in relation to merits review litigation about the plaintiff, an Afghan refugee applicant who rotted in an immigration jail for 6 years despite having committed no crime in Australia. The solicitor sought summary judgment on the basis of advocates’ immunity. The Court declined to give it to him, saying the question of whether immunity could be claimed against allegations of misfeasance in public office or collateral abuse of process was insufficiently obvious to found a summary judgment, and would have to be fully argued at trial. The relevant part of the judgment says: Continue reading “Misfeasance in public office claim against solicitor survives immunity strike out application”

4 June, 2008

Barristers never used to need practising certificates

Justice Fullagar narrated the history of practising certificates and barristers in Victorian Lawyers RPA Limited v Henderson [1999] VLPT 13:

‘For brevity we shall refer collectively to the succession of statutes governing legal practice in Victoria from the time of the Royal Assent to the Legal Profession Practice Act 1958 until the present day as the legal practice acts. Until 1989 the legal practice acts did not require a legal practitioner to have a practising certificate if he or she was engaged in practice exclusively as a barrister. In 1989 the legal practice acts were amended, and what might be called the certificate-free area was restricted to those legal practitioners whose names were on the Bar Roll kept by the Victorian Bar Council. Finally the Legal Practice Act of 1996 provided and still provides that so far as Victorian practitioners are concerned no person whatever shall engage in legal practice unless the person holds a practising certificate. See section 314. The contents of sub-sections (5) and (6), and the penalty of two years imprisonment for engaging in practice without a certificate, demonstrate the importance of these fundamental provisions in the eye of the legislature.

Clause 10 sub-clause 3 of Schedule 2 of the Act of 1996 provided that those practitioners who were on the bar roll need not have a practising certificate until April 1997.’