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Self-represented solicitor guilty of misconduct for breaching a rule expressed to regulate conduct when acting for a client

A Western Australian disciplinary case, Legal Profession Complaints Committee v CSA [2014] WASAT 57 is interesting in a number of ways. A criminal lawyer was the manager of a strata corporation.  She owned two units and the complainant the third. The complainant affixed an airconditioner to a wall which impeded on a common area.  She sought legal advice.  Her lawyers wrote a letter of demand to the complainant and charged a few thousand dollars.  The complainant did not fix the problem within the 14 days demanded, so the lawyer sued in the Magistrates’ Court.  The case was settled on the basis that the airconditioner would be relocated and the lawyer withdrew the proceeding without seeking costs.  When the complainant sold the third unit, the lawyer demanded that the complainant pay her the few thousand dollars her lawyers had charged her for the advice and the letter of demand.  She did so by a letter of demand drafted for her by another lawyer, though the involvement of this second lawyer only emerged at the disciplinary hearing. When the complainant did not pay up, she sued for them in her personal capacity.  The suit was found to have no legal foundation, but the lawyer said that she mistakenly thought that it did have a legal foundation, and that civil proceedings were not her thing. The case says:

1.  The suit was an abuse of process because there was no legal foundation for suing for the recovery of ‘pre-litigation’ legal costs.

2.  The lawyer’s conduct in threatening to bring and then bringing a suit which was an abuse of process was common law misconduct but was also a breach of a rule which prohibited lawyers from claiming on behalf of a client costs in a letter of demand for recovery of a debt because she was acting for herself in writing the letter (even though no legal letterhead or reference to her status as a lawyer was involved).

3.  There is no defence of honest and reasonable mistake in professional discipline.

4.  It is inappropriate for a disciplinary tribunal to make what the prosecutors described as ‘an incidental finding of dishonesty’ in relation to statements made during the investigation in respect of which no charge had been laid in the disciplinary proceeding.  Any such allegation ought to be the subject of a separate process (though the Tribunal then went ahead and found that the allegation was not made out on the Briginshaw standard anyway). Continue reading “Self-represented solicitor guilty of misconduct for breaching a rule expressed to regulate conduct when acting for a client”

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Prompt extinguishment of claims met by advocates’ immunity; walk-away offers by defendants entitled to immunity

Young v Hones (No 3) [2014] NSWSC 499 is a decision about the costs of a lawyers’ negligence claim which was defeated by advocates’ immunity.  It and the (No 2) decision are interesting because:

1.  The Court determined the immunity point against the plaintiff in the trial of a preliminary question, having previously dismissed the lawyers’ summary judgment application;

2.  The Court suggested that the immunity applies in respect of allegations of conduct otherwise than in good faith despite suggestions to the contrary in pre-D’Orta-Ekenaike’s Case authorities; and

3.  The Court was inclined to the view that a well-drawn walk-away Calderbank offer would have been unreasonably rejected by the plaintiff and attracted costs penalties had it only been open a little longer than the 7 days it was expressed to be open for.

Continue reading “Prompt extinguishment of claims met by advocates’ immunity; walk-away offers by defendants entitled to immunity”

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NSW solicitor who failed to pay counsel’s fees struck off

Updated post (25 July 2014):  The answer to the question posed by the original post is: yes, he will be struck off.  Here are the reasons: Council of the Law Society of NSW V Andreone (No2) [2014] NSWCATOD 81.  His failure to make submissions on the question would not have assisted.  On the question of whether monies received by solicitors from clients for payment of counsel’s fees are trust monies, and on whose behalf they are held, see Legal Services Board v Gillespie-Jones [2013] HCA 35 about which Melbourne University’s Associate Professor Bant’s learned commentary may be found here.

Original post (published as ‘Will Solicitor Who Failed to Pay Counsel’s Fees be Struck Off?’): The Law Society of NSW wants a solicitor who persistently delayed in paying counsel struck off. The NSW equivalent of VCAT has found the professional misconduct established: Council of the Law Society of NSW v Andreone (No. 1) [2014] NSWCATOD 49, and a hearing on sentencing is pending.  In this case, clients had paid bills which included claims by the solicitor for counsel’s fees by electronically depositing monies into the firm’s office account — probably at the firm’s direction, as the Tribunal found.

The Tribunal found without reference to authority that those payments were trust monies to the extent that they satisfied the claims by the solicitor for counsel’s fees, the solicitor not having paid the counsel at the time of their receipt.  In other words, the solicitor held the monies on trust for the barristers. But it seems that the Tribunal considered the solicitor’s misappropriation of trust monies and the failure to pay the fees as separate instances of professional misconduct.  In other words, the mere failure to pay the fees, given its intentionality and persistence, amounted to professional misconduct.  This is what the Tribunal said: Continue reading “NSW solicitor who failed to pay counsel’s fees struck off”

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Latest on whether barrister-litigants can recover legal fees for their own work

The award of costs is by way of an indemnity — usually only a partial indemnity — against out of pocket expenses and the cost of legal services reasonably incurred in litigation.  Except in no-costs jurisdictions, everyone can usually recover their out of pocket expenses, but only those who incur a liability for fees charged by lawyers can claim costs other than for out of pocket expenses.  Because solicitors are so special, though, where they act for themselves, they can recover costs other than out of pocket expenses even though there is nothing but their own effort for the indemnity to indemnify against.  Whether barristers in the same situation can avail themselves of the same exception to the general rule seems not to be entirely clear.

The question arose in Ada Evans Chambers P/L v Santisi [2014] NSWSC 538.  A Magistrate had allowed a barrister to avail himself of the exception.  The Supreme Court considered that the question of whether barristers are entitled to costs of acting for themselves was an important one, but declined to grant leave to appeal the Magistrate’s decision in this regard because the dispute was an inappropriate vehicle for the determination of that question.  Very interestingly to my mind, a principal reason for not granting leave was that the costs of arguing it were disproportionate to the amount in issue in the case.  Nevertheless, the Court gathered together the authorities on the question: Continue reading “Latest on whether barrister-litigants can recover legal fees for their own work”

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A last-ditch argument

A South Australian solicitor’s last-ditch argument in his brave but unsuccessful battle to stay on the roll of practitioners was:

‘Mr Prescott contends that this Court should not act on the false testimony finding in the strike off application because, even though his testimony in the 2011 hearing was false, he had deluded himself into believing the truth of that testimony.’

The Supreme Court of South Australia did not fall for it, despite the solicitor having obtained from a Mr Ireland, psychologist, a diagnosis of acute stress disorder which hindered his ability to give reliable testimony.  The reasons are at Legal Practitioners Conduct Board v Prescott [2014] SASCFC 41. The Court said:

‘His demeanour when giving evidence before this Court exuded a sense of self assurance and confidence which was incongruous with his claim that he has been overwhelmed by the disciplinary proceeding he has faced over the last decade.’

Needless to say, the Court also engaged in a great deal of other analysis, ultimately preferring the evidence of the Bureau de Spank’s psychiatrist.

Now if there is a jurisdiction where you would hesitate about running an ‘I was mad; I knew not what I done, Guv’ defence, it is probably South Australia, where they had a Royal Commission about the police’s handling of a solicitor whose car collided with a cyclist who died soon after.  The rabid response of an ill-informed public whipped up by shock jocks and politicians insufficiently unwilling to exercise restraint to the solicitor’s explanation for his conduct after the accident (that he was in a state of post trauamatic stress and was acting more like an automoton than usual) continues to provoke headlines there, many years after the tragedy.

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Preliminary discovery and the need to have an adequate factual foundation before pleading fraud

As you will probably be sick by now of hearing, I suspect that the law relating to the need to have an adequate factual foundation before pleading fraud will be resorted to more frequently given the new prominence given to it by s. 18(d) of the Civil Procedure Act 2010, the Court of Appeal’s admonition to inferior courts as to the need to consider these matters of their own motion, and the new (or at least newly prominent) remedies for breaches of overarching obligations such as that referred to in s. 18(d).  The new prominence of these laws may make applications for preliminary discovery more frequent, though I must confess it remains a mystery to me why so few preliminary discovery applications are made in general.  It may also make courts more inclined to grant such orders. In Pioneer Energy Holdings v Seth [2014] NSWSC 492, McDougall J granted preliminary discovery under a rule not dissimilar to Victoria’s SCR 32.05 to a prospective plaintiff from prospective defendants to a suit claiming damages for fraud, making reference (at [66]) to s. s 347 of the Legal Profession Act 2004 (NSW).  Section 347 has some of the characteristics of s. 18(d), albeit only in relation to damages claims.  His Honour said, in the course of an ex tempore judgment:

Continue reading “Preliminary discovery and the need to have an adequate factual foundation before pleading fraud”