Legal Services Commissioner’s website explains difference between professional misconduct and unsatisfactory professional conduct

Update: So far, I have had the following responses to my musing, which seems to excite you all more than I could have imagined:

‘Thats easy, fraud is directly aimed at unlawful appropriation – dishonesty may be indirectly so.’

‘Fraud v dishonesty – my thought: does fraud require there to have been a victim, where dishonesty doesn’t?’

‘Have a look at para. 10 of Brooking’s judgment in Magistrates Court of Victoria at Heidelberg Vic Full Court 2000 Buchanan, Charles and Brooking (on perversity with the mental element and an updated ignoratia lex…….   Huge philosophical literature on all terms, and therefore the differances between them.  Thanks for your blog’ and

‘Would fraud be dishonesty employed for a financial or material gain? I think of fraud as a subset within dishonesty.’

Original post:

Who knew that sitting there on the Legal Services Commissioner’s website is an explanation of his thinking about the difference between unsatisfactory professional conduct and professional misconduct? Not me, but I quote:

‘The sort of conduct that amounts to unsatisfactory professional conduct is where the lawyer has failed to meet professional standards. Professional misconduct, on the other hand, is behaviour involving fraud, dishonesty, breach of trust or conflict of interest. The aim of an investigation is to see whether it can be proved that such conduct took place.’

Very useful to know. I am writing a paper on fraud at the moment, with the aim of covering the whole concept and all of its legal ramifications in one hour.  Being in that frame of mind prompts me to ponder what the difference is between ‘fraud’ and ‘dishonesty’.

Lentil as Anything Needs a Lawyer: anyone?

Friends, no doubt many of you have eaten at Lentil as Anything, the several restaurants where the cost of the meal, if anything, is determined by the diner.  Their founder, Shanaka Fernando, travelled to Australia from his native Sri Lanka to study law, but — smart enough to get in, and smart enough to get out — quickly forged a different path.  He used to be my across the road neighbour and impressed me as a serious and charismatic individual with sufficient eccentricity and joie de vivre to avoid sanctimoniousness.  Having written that, I wonder to myself whether what I am trying to say is — relax: there is not an inch of hippy about him.  Maybe.  Anyway, it’s true: he plays tennis, gets about in a convertible, and is in training to be the first Sri Lankan to climb Mount Everest.

He was awarded the ridiculously named Australia Day Honour ‘Local Hero’ — quite a high award in the pantheon of these things — not so long ago, and tonight was — along with the Dalai Lama — a guest judge on Master Chef.  Being on holiday, I uncharacteristically watched, and was reminded of the failed attempt at a live TV joke during the Dalai Lama’s recent Melbourne tour which made its way to Boing Boing, probably the world’s most popular blog (The Dalai Lama goes into a pizza shop and says ‘Make me one with everything’, which is kind of funny even though ‘being at one with everything’ is a Zen and not a Tibetan buddhist concept).

I like that Lentil as Anything is still going strong, and like that it provides hospitality industry experience and a panoply of other support to refugees and other recent arrivals to our shores.  (The Dalai Lama must like it too because he invited Shanaka to come onto the show.)  And I also like that they make unpredictably good coffee at the Abbotsford Convent, just down the road from me.  Their lease is up for renewal by the good folk at the Convent, and Shanaka is looking for a lawyer to have a look at the text of a lease, pro bono.  The Public Interest Law Clearing House (PILCH) is unable to provide a referral to a pro bono leasing lawyer because they have a conflict — presumably they have referred the not for profit organisation which runs the Convent to a lawyer over the same negotiation.  There is no controversy I am aware of; it’s a simple gig for a lawyer who knows their way around leases.  If you can assist, and are such a lawyer, please let me know, and I will pass on your details to Shanaka.

Plaintiffs have no duty to mitigate their losses

I bet the headline got your attention.  But it’s true: I’ve been looking up the law of mitigation these last few days.  And now the Queensland Court of Appeal’s Acting Justice of Appeal Margaret Wilson, with whom President Margaret McMurdo agreed, has concisely reiterated why in  Pialba Commercial Gardens Pty Ltd v Braxco Pty Ltd & Ors [2011] QCA 148, reproduced below.  Justice of Appeal Muir dissented in the result, but said nothing about the mitigation point. (See also K.R. Handley, ‘Reduction of Damages Awards’ in P.D. Finn (ed.) Essays on Damages, Law Book, 1992, p.116 and Sural SpA v Downer EDI Rail Pty Ltd [2007] NSWSC 1234.)

The thing is, you see, plaintiffs have no obligation to mitigate their losses; it is just that they are not entitled to damages for losses which, had they taken steps to mitigate, they would not have suffered.  So if there are reasons which are good reasons to the plaintiff not to take a step (e.g. they do not want to take a step which is commercially objectively reasonable but might harm their personal relationship with someone whose friendship or custom they value, or they just want the whole dispute over with and want to get relief against the wrongdoer without delay) but which are not objectively reasonable as between plaintiff and defendant, the plaintiff is perfectly entitled to go ahead against the wrongdoer, and take what they can get, leaving it to the defendant to prove that they failed to mitigate, and how things would have been different had they mitigated.

This is what Wilson AJA said in Pialba Commercial Gardens:

    1. In British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd[41] Viscount Haldane LC referred to compensation as the basic principle of damages and continued:

      “But this first principle is qualified by a second, which imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to take such steps.”


      [40]        Supplementary appeal record volume 3, tab 5, pages 32-33.

      [41]        [1912] AC 673, 689.


    2. Depending on the circumstances, what would be reasonable steps to mitigate loss caused by non-performance of a contractual obligation may include seeking substitute performance.
    3. Although it is commonly said that an injured party has “a duty” to mitigate its loss, as Irvine CJ said in Driver v War Service Homes Commissioner:[42]

      “…This expression, I think, does not mean that he is under any duty in the ordinary sense, towards the party breaking the contract, but that he cannot be said to have really incurred any loss which might have been avoided by his taking such steps as a reasonably prudent man in his position would have taken to avoid further loss to himself; and the best test is, what would such a man do to avoid such a further loss to himself, supposing that, from insolvency of the other party, or from some other reason, he could not get any damages.”

    4. The onus is on the defendant to show that the plaintiff has not fulfilled this duty, and the extent to which it has not.[43]  That onus was not satisfied in this case.

[42]        (1923) 44 ALT 130, 134.

[43]        TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130, 158.

More on the indemnity principle

Up in NSW, the system of reviewing legal costs is very different from here in Victoria.  It is done on the papers by non-judges.  As District Court Judge Peter Johnstone said in Bellevarde Constructions Pty Ltd v CPC Energy Pty Ltd [2011] NSWDC 55:

‘the costs assessment process is a statutory process that is neither wholly judicial, nor wholly adversarial, as there are strong elements of an inquisitorial nature involved. These features of the process are important to understand when evaluating decisions as to a matter of law made in the course of the assessment.’

A costs assessor was assessing the party party costs payable by one party to a more successful party in litigation.  He satisifed himself that the indemnity principle was not breached by perusing the costs agreement which regulated the solicitor-client costs payable by the more successful party to its own lawyers, and was ‘satisfied that the amount claimed by the costs applicant is no greater than the amount for which the costs applicant would be liable pursuant to those agreements’.

Judge Johnstone said, applying Shaw v Yarranova Pty Ltd [2011] VSCA 55, that a costs assessor need not take evidence of the actual amount charged by the more successful party’s lawyers in every case, but must do so when there is evidence casting doubt on the proposition that the claim for party party costs was no greater in total — not per item — than the solicitor-client costs.  Here there was sufficient evidence to cast such doubt, and the costs assessor was wrong not to have insisted on evidence as to the amount payable on a solicitor-client basis.