Solicitors and barristers are obliged not to make allegations of criminality, fraud or other serious wrongdoing in ‘court documents’ without an adequate factual foundation. The rule for Victorian barristers is rule 34. This post explores what ‘court documents’ are, what ‘fraud’ means in this context, and what an adequate factual foundation is, in part by looking again at AM v Legal Practitioners Disciplinary Authority  NTSC 02, treated in the previous post, a decision of the Full Court of the Supreme Court of the Northern Territory. It also notes a bizarre anomaly between the rules which govern Victorian and other states’ solicitors and between the rules which govern Victorian solicitors and Victorian barristers in this regard. Continue reading “The obligation not to allege ‘fraud’ without an appropriate evidentiary foundation: what is ‘fraud’?”
A Full Court of the Supreme Court of the Northern Territory delivered judgment in AM v Legal Practitioners Disciplinary Authority  NTSC 02 a week ago. The Darwin lawyer, AM, lodged a complaint with the NT Law Society alleging that a competitor firm, Cridlands, which used to act for her client, had acted in the face of a conflict of duties. That complaint was dismissed. The Law Society then turned the lens on the author of the complaint and investigated her for making allegations of serious impropriety without a proper evidentiary foundation. She was successfully prosecuted and her appeal failed. The Supreme Court confirmed the decision of the Legal Practitioners Disciplinary Tribunal (here and, in relation to penalty, here), finding the lawyer guilty of professional misconduct. According to the NT News, the lawyer was ordered publicly to apologise to the lawyers about whom the complaint was made, complete professional conduct and ethics courses, and ordered to pay a fine of $19,500. The costs bill is presumably very high.
The duty which was breached was formulated at  as follows:
‘the obligation carried by a legal practitioner is to take care when making serious allegations of impropriety against another on behalf of a client. The obligation arises not only when making allegations or preparing pleadings in a court proceeding but in other situations where the practitioner is protected by privilege and, indeed, in all circumstances, to maintain standards of decency and fairness. The appropriate standard of care is exercised by ensuring that there is evidence upon which allegations might be made and in the light of that evidence by seeking specific instructions in relation to the allegations.’
Update, 1 February 2012: Glen Wright of Tas Legal brought to my attention the case of Gavin Boyle Constructions Pty Ltd v Fabrok Pty Ltd  QDC 214 in which the judge set aside a regularly entered default judgment, but declined to award costs in favour of the plaintiff because it knew, pre-commencement of the proceeding, that the defendant denied liability and failed to enquire of the defendant’s solicitor whether it intended to defend before signing judgment. His Honour relied on Coburn v Brotchie and s. 5 of Queensland’s Uniform Civil Procedure Rules, which echo the overarching obligations in Victoria’s Civil Procedure Act, 2010.
Original post: I must say I was brought up believing that there was nothing at all wrong with rushing down to the court’s registry and entering default judgment if an appearance, or defence, was not filed by the due date. Apart from anything else, you force the other side to set out enough on oath about their case to prove an arguable defence, plus you get the psychological advantage of an early interlocutory costs order, even if the judgment is set aside, as it usually is. But where there is reason to believe that the defendant desires to defend, the practice is frowned upon, especially where the plaintiff is represented by a solicitor who knows who represents the defendant. The duty of professional courtesy comes into play. The procedure is really there to provide a vehicle for the production of judgments in those many cases which pass quietly through the courts, particularly the Magistrates’ Court, without the defendant participating. In fact ‘snapping on’ default judgment in bad faith, to use the strangely quaint language of some of the older cases, is an irregularity entitling the defendant to have the judgment set aside ex debito justitiae as they say in the classics (as of right). And it generally carries with it a costs sanction. I was vaguely aware of these authorities, but thought they were less unanimous and less modern than in fact they turn out to be. I have extracted the relevant bits below. Continue reading “‘Snapping on’ judgment in default”
Relatively recently, I posted on the question of whether a Bureau de Spank desiring to rely on a practitioner’s dishonesty or other form of conscious wrongdoing must expressly allege it in the charge, and discussed Walter v Council of Queensland Law Society Incorporated (1988) 77 ALR 228 at 234;  HCA 8. Now, in Legal Services Commissioner v Madden (No 2)  QCA 301 the Queensland Court of Appeal has had a go, and reversed a decision of the Court’s Chief Justice sitting on the Legal Practice Tribunal. The solicitor had previously been disciplined in relation to his trust account. He was charged with gross delay in litigation which resulted in applications by the other side to compel the achievement of various interlocutory steps. He dealt with those applications without advising his client, agreed on his client’s behalf to pay costs, withdrew money to pay those costs from monies held in trust on account of fees and disbursements, and then charged the client fees for his work in fixing up his own mistake. He also acted for both husband and wife in the preparation of a pre-nup, apparently stuffing it up, and then later acted in a matrimonial dispute for the husband alone, described as a particularly obvious conflict of duties.
The Chief Justice made findings of dishonesty in the absence of any allegation of dishonesty in the charge. One might say, in fact, that he went out of his way to do so. First he sought comment in relation to whether on the agreed facts, the Tribunal was free to draw inferences that dishonesty actuated the solicitor’s conduct, and invited the Commissioner to amend the charge so as to allow exploration of that issue. His Honour adjourned the hearing to give the Commissioner time to think about that. On the return of the hearing, the Commissioner declined the invitation to amend. So the Tribunal put out a document specifying, as a matter of procedural fairness, the inferences it was considering drawing, and invited argument. The solicitor swore an affidavit responding to the Tribunal’s document. The Commissioner’s counsel cross-examined the solicitor, but did not put it to him that he had acted dishonestly. The Tribunal then concluded that the solicitor had acted dishonestly, and decided to strike him off rather than go with the fine and reprimand recommended by the Commissioner. Ooffa!
‘Wrong way. Go back!’ said the Court of Appeal. It started with a general proposition:
’54 It is … a well recognised rule of practice in civil proceedings that, although the word “dishonesty” is not necessarily required, any charge of dishonesty must be made in clear terms. In a well known passage in Belmont Finance Corporation Ltd v Williams Furniture Ltd & Ors  Ch 250 at 268 Buckley LJ said: Continue reading “Commissioner’s obligation to charge dishonesty if he intends to allege it”
In Legal Practice Board v Lashanky  WASC 294, the Supreme Court of Western Australia’s Justice Chambers said that applications to restrain solicitors from acting are not interlocutory applications, so that affidavit evidence may not be given from information and belief (i.e. the hearsay prohibition is not relaxed as it is for interlocutory applications):
’29 Under O 37 r 6(2) of the Rules of the Supreme Court 1971 (WA), an affidavit used for the purposes of interlocutory proceedings may contain statements of information and belief. However, an application to restrain a solicitor from acting is not an interlocutory proceeding. Continue reading “Conflict applications to restrain opposing solicitors from acting not interlocutory”
In Legal Services Commissioner v RAP  VCAT 1200, the Bureau failed to establish a charge of professional misconduct at common law against a solicitor in respect of conduct which occurred otherwise than in the course of, and unconnected with, legal practice. (Another charge, not the subject of this post, succeeded.) The allegation was that he:
‘deliberately misled a person with whom he had entered into a commercial transaction, thereby behaving in a manner that would reasonably be regarded as disgraceful or dishonourable by fellow practitioners of good repute and competency’.
The solicitor had negotiated in late 2005 with a car dealer for the purchase of a $1.4 million [sic.] car. Continue reading “VCAT explores definition of professional misconduct at common law unconnected with legal practice”
Adjournment applications and applications to amend out of time in civil proceedings just got more difficult. I have a feeling that the first time I said anything in court after I came to the Bar was an expression, to the Supreme Court’s Master Efthim, of how melancholy I felt about regrettably having little choice but to — ahem — respectfully submit that in all the circumstances, the only fair thing to do was to adjourn the following day’s trial of a commercial matter. Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 was what got me my first victory as counsel, even if I did join the elite club (or possibly even achieve a unique status in the history of the Victorian Bar) of suffering an order for solicitor-client costs against my client on my first appearance. It was an excellent introduction to my new reality of having to be the frontman in other people’s cases on short notice.
I knew Queensland’s Case (I could not resist) did not say exactly what many people lazily believed it to say. But the plurality (Justices Dawson, Gaudron and McHugh) did say:
‘Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties.‘
I knew it could not last. In fact my reaction to Justice Kiefel’s appointment to the Highkers was to note to myself that her Honour was the no-nonsense trial judge who had refused the adjournment in Queensland’s Case only to be rolled on appeal. I figured she would be plotting her revenge against that rare indignity. Sure enough, in Aon Risk Services Australia Limited v Australian National University  HCA 27 a plurality of Justices Gummow, Hayne, Crennan, Kiefel and Bell today shredded Queensland’s Case, excoriated four ACT Supreme Court judges‘ toleration of a radical amendment at trial which caused it to go off for months, threw a grenade full of speed and a bucketfull of steroids into litigation, especially commercial litigation, and implicitly gave Justice Finkelstein permission to look towards a uranium enriched rocket docket. Justice Heydon and Chief Justice French were so excited about the need for speed that they weighed in with separate concurring decisions. This is the penultimate, swingeing, paragraph in the decision (from Justice Heydon’s reasons):
‘The presentation and adjudication of the case in the courts below do cause it to merit a place in the precedent books. The reasons for placing it there turn on the numerous examples it affords of how litigation should not be conducted or dealt with. The proceedings reveal a strange alliance. A party which has a duty to assist the court in achieving certain objectives fails to do so. A court which has a duty to achieve those objectives does not achieve them. The torpid languor of one hand washes the drowsy procrastination of the other. Are these phenomena indications of something chronic in the modern state of litigation? Or are they merely acute and atypical breakdowns in an otherwise functional system? Are they signs of a trend, or do they reveal only an anomaly? One hopes for one set of answers. One fears that, in reality, there must be another.’
Robin Tampoe, the former Gold Coast lawyer hired as one of Schapelle Corby’s lawyers by Ron Bakir, has been struck off the roll of solicitors by Queensland’s Legal Practice Tribunal. The decision is here. Removal from the roll is the ultimate sanction in the world of professional discipline, though in circumstances where it is not apparent that Mr Tampoe intended in the future to practise law anyway, it is interesting that there does not seem to have been any push for a substantial fine.
Mr Tampoe did not contest the charge of professional misconduct comprised of disclosing on a national breakfast television show confidential information obtained during his retainer about criminal convictions of members of the Corby Family. Nor did he contest the unsatisfactory conduct comprised of commentating on his own defence strategies and calling his client’s family the biggest pile of trash he had ever come across in his life. That conduct was characterised as ‘scandalous, offensive and/or likely to bring the profession into disrepute’. You can still watch some of the conduct in question on Channel 9’s website. Continue reading “Schapelle Corby’s former lawyer struck off”
The rule in Home Office v Harman governs the use of documents and information obtained by people generally by various forms of compulsion in litigation: the court rules about interrogatories (a form of statute), Court orders for discovery, witness statements served pursuant to an order to do so. But when I carefully checked this point a while ago, it seemed clear that the principle had no application outside litigation, the exception being, perhaps, arbitration.
Outside litigation, however, the main source of powers to compel the production of documents and the disclosure of information is statute, and the main repository of them mandarins. When a mandarin (disguised say as a Commissioner, or an Inspector) obtains information by compulsion, there is an important limit on what the mandarin may do with it. The important limit is that the information may only be used for the purpose the power of compulsion was bestowed. This is a proposition which I vaguely knew I had read somewhere, but which has several times eluded me when I tried to look it up. But now it’s back in my quiver, courtesy of Apache Northwest Pty Ltd v Agostini  FCA 534. The relevant High Court authority is Johns v Australian Securities Commission (1993) 178 CLR 384;  HCA 56, which is posted about separately here.
This is a little adjunct to my post ‘Restraints on Use of Information Obtained by Compulsion‘, a place to store away for future reference the little case note of Johns v Australian Securities Commission (1993) 178 CLR 408;  HCA 56 penned by Justice McKerracher in Apache Northwest Pty Ltd v Agostini  FCA 534. In digesting the quotation from Johns, it is helpful to know what s. 25 of the Australian Securities Commission Act, 1989 said. Here is Justice McKerracher’s case note:
The Times has an article about a solicitor on the Board of the English legal regulator and former president of the Law Society who, rather embarrassingly, had a conflict of interest determination go against him after a disciplinary investigation. The solicitor acted pro bono for a barrister who was being sued by an Exxon subsidiary. He acted in an appeal from a Hong Kong court to the Privy Council, which succeeded. At the time of the appeal, the solicitor’s firm merged, and one of his new partners did some work for another Exxon subsidiary. The barrister complained later of a conflict of duties. The complaint was made out. Private Eye got a hold of the adjudication and was preparing to make merry with it when the solicitor applied for an injunction to prevent publication on the basis that it was confidential. That application failed, and so did the solicitor’s appeal. It is easy to say ‘bad, bad move’ with the benefit of hindsight, yet it is a difficult conclusion to escape, since none of the judges seem to have thought much of what I also consider to be an odd argument that a disciplinary adjudication was confidential to the complainant, the solicitor, and the Bureau de Spanque. Here is the decision of the English Court of Appeal’s Lord Justice Toulson with whom Lords Justice Sullivan and Hughes agreed: Napier v Pressdram Limited  EWHC 39 (QB).
It has never been clear to me that anyone was entitled in a disciplinary prosecution to refer to statements made ‘without prejudice’ unless the joint privilege holders (the disputants on whose behalf the communication was made, and made to) waived it. Now I have found an authority on the question in Legal Practitioners Complaints Committee v David F  WASAT 352, a disciplinary prosecution of a lawyer who allegedly made misleading comments during a negotiation. Western Australia’s State Administrative Tribunal held that without prejudice statements could be adduced in evidence against him: Continue reading “Waiver of without prejudice privilege in disciplinary prosecutions of lawyers”
I reckon Dr Desiatnik is unlucky with the timing of his texts. The first edition of Legal Professional Privilege in Australia was finished when the High Court changed the test for the privilege from a sole purpose to dominant purpose and restated the law of implied waiver. I have always shuddered about the story one of my law lecturers recounted of a Canadian academic who devoted a decade to a text on death taxes only to see the parliament abolish them on the eve of the launch. I hope the story is apocryphal. This time around, Dr Desiatnik — a lovely man with a quirkily old fashioned text writing style — has finished a whole book devoted to negotiation privilege, which is about to be published, and the House of Lords has come along and put out a major judgment on the subject. Fortunately, Ofolue v Bossert  UKHL 16 does not seem to revolutionise the law. Here is The Times‘s account of the decision.
Bizarre man. A Queensland solicitor has been found guilty of professional misconduct for not obeying the rule in Browne v Dunne (well, amongst other things): Legal Services Commissioner v MPD  LPT 08. Here are the reasons:
‘ in July 2004, [Mr Dryland] retained the respondent to resist an application for an apprehended violence order.  Mr Dryland’s case involved a denial of the incident of violence alleged against him.  During the hearing, the respondent, who acted as advocate, failed to put his client’s case when cross-examining.  The Court made an apprehended violence order against Mr Dryland.  It is not alleged that there was a connection between a failure to comply with the rule of practice in Browne v Dunn (1893) 6 R 67 and the outcome of the hearing. Rather, the undisputed case is merely that there was a failure to cross-examine appropriately.’
I have previously expressed my disquiet about the Western Australian QC who told the Australian media that Schapelle Corby’s lawyers were trying to bribe the judges hearing her case. It seems the Bureau de Spanque de l’Australie de l’Ouest had in fact got right onto it, initiating an own motion investigation. The resultant prosecution has only just now, almost four years later, ground to a successful halt, with a 60,000 word decision crafted by WA’s State Administrative Tribunal over the six months during which the decision was reserved. The case is Legal Practitioners Complaints Committee v Mark T QC  WASAT 42. The QC does not come out of it well. Continue reading “Another case about one of Schapelle Corby’s lawyers”
Update, 13 January 2010: See now British American Tobacco Australia Limited v Gordon (No 3)  VSC 619.
In Legal Practitioners Complaints Committee v Mark T QC  WASAT 42, the Perth QC who announced to the Australian media that Schapelle Corby’s Balinese lawyers were trying to get money to bribe the judges sought to excuse his breach of confidence by reference to the proposition that there is no confidentiality in an iniquity. The Tribunal rejected that argument, saying that if the rule had operation in this case, it could have justified only disclosure of the contemplation of a bribe to ‘the appropriate authority’ which certainly was not The West Australian. The Tribunal’s reasoning is reproduced below. Before that is its explanation of the source and obligations of professional confidentiality, where it reiterated two points which in my experience cannot be reiterated too often:
- First, the Tribunal said it would be a mistake to try to make the obligations of professional condidentiality fit into the rules which govern trade secrets, i.e. the principles of equitable breach of confidence. Equally, something might be confidential even if not privileged, for example because of the Cox v Railton exception to privilege; in other words, it does not follow from the lawyer’s inability to resist a proper compulsion to produce information gained as a result of a lawyer-client relationship that the lawyer may volunteer that same information.
- Secondly, it said that the confidentiality obligation is not only to keep secret that which is secret, but also not to make anything any less secret which has already begun to lose its secrecy. Here, the media was already on to the possibility of a bribe being considered. But the QC’s confirmation of it gave that fact an authenticity and newsworthiness which it did not previously have. Continue reading “Professional confidentiality and the ‘iniquity exception’”
This is a post about David v David  NSWCA 8 (the decision at first instance is at  NSWSC 855). Karl Suleman has been good to professional negligence lawyers. He procured other Assyrians to invest in excellent sounding supermarket trolley schemes. ‘Give me $50,000’, he said to one investor, ‘and shopping trolleys will pay you $1,350 a fortnight for 10 years’. That is a return of 600%. Something must not have worked out the way it was supposed to, because the punters lost their dough and Karl went to jail. The punters sued their lawyers, and any other lawyers on the horizon. Continue reading “Conflict of duties and the limited retainer”
Update, 19 April 2009: See also the duty to test the validity of purported exercises of compulsion which, if valid, will trump the duty of confidentiality codified in r 6.3 of the Law Society’s Professional Conduct Rules 1983:
‘A practitioner shall not without the consent of his client directly or indirectly reveal that client’s confidence or use it in any way detrimental to the interests of that client or lend or reveal the contents of the papers in any brief or instructions to any person except to the extent required by law, rule of court or court order
provided that where there are reasonable grounds for questioning the validity of the law, rule or order he shall first take all reasonable steps to test the validity of the same’.
Original post: Those who call legal professional privilege ‘client legal privilege’ describe it more accurately. It is the client’s privilege. Recently, a lawyer sought my advice. His file had been subpoenaed by someone other than his client. I knew, but could not immediately find authority for the proposition, that a lawyer has a duty to assert the client’s privilege. Today, I came across some authority for the proposition. In Spalding v Radio Canberra Pty Ltd  ACTSC 26, Justice Refshauge said at :
‘with legal professional privilege, the privilege is that of the client, but it is the duty of the client’s lawyer (or lawyers) to claim the privilege if it exists.’
His Honour cited: Re Stanhill Consolidated Ltd  VR 749 at 755, though the proposition is really to be found at 756, and there must be a better articulation of the point somewhere. I suspect that the solicitor’s duty is in fact only to give the client the opportunity to appear to assert the client’s privilege. I do not think the solicitor has an obligation to work up, at his own expense, arguments in support of claims for privilege over many documents.
Leong v J P Sesto & Co  VCAT 99 is the latest in the on-again off-again saga of whether solicitors engage in trade or commerce, and, whether, if not, it means that VCAT does not have jurisdiction over claims involving them, and if so, which claims. Senior Member Vassie considered the question in the context of an application to set aside a costs agreement. It was heard in October 2008 and decided on 30 January 2009. The NSW Court of Appeal’s decision in Kowalczuk v Accom Finance  NSWCA 343, decided on 10 December 2008 was not referred to (see Part II).
The application was made on the orthodox basis (under the predecessor of the Legal Profession Act, 2004) and supplemented by somewhat half-hearted arguments under the Fair Trading Act, 1999, the state equivalent of the Trade Practices Act, 1974. The law is quite clear that regardless of whether lawyers engaged in their core professional roles of representation and advising are engaged in in trade or commerce (the traditional view is that they are not), some aspects of their businesses are. What this decision says is that in negotiating fees, lawyers are engaging in trade or commerce, and so causes of action which seek relief in relation to costs agreements under the Fair Trading Act, 1999 and which are dependent on conduct in trade or commerce are available to clients. (It might be worth tucking away for future thought whether a lawyer who does not negotiate and seeks to recover fees only on scale or practitioners remuneration order, could be said to be engaging in trade or commerce, but it is unlikely such a costs agreement would be the subject of an application to set it aside.)
The decision also asserts that the Fair Trading Act, 1999‘s definition of ‘services’ requires that the services be in trade or commerce, contrary to an earlier considered decision of the Legal Practice List, which it seems may not have been cited to Senior Member Vassie. No argument on this point is recorded in the decision. Ironically, if this decision is followed, the result may be a narrowing of VCAT’s jurisdiction, because in those causes of action which do not specifically require conduct in trade or commerce, but require ‘services’, VCAT’s previous position was that the services did not have to be in trade or commerce to come within the definition, because though the words ‘trade or commerce’ appeared in the definition, the definition was inclusory, and only ‘included’ certain conduct in trade or commerce, rather than mandating ‘trade or commerce’ as an essential characteristic of activity falling within the meaning of ‘services’. An example of such a jurisdiction is the one to resolve ‘consumer-trader disputes’, a jurisdiction which essentially grants to VCAT common law jurisdiction enhanced by special legislative powers over all disputes arising directly out of the provision of services, regardless of their value. In those instances of lawyers’ conduct which are not engaged in in trade or commerce, Senior Member Vassie’s construction of the Act would deny VCAT jurisdiction where it would otherwise have had jurisdiction by virtue of the expansive construction of the definition of ‘services’. (Note that J P Sesto & Co v Jadewealth Pty Ltd  VCAT 80 is essentially the same judgment in the same case.)
What Senior Member Vassie said was: Continue reading “Latest on whether solicitors engage in trade or commerce: part I”
In Legal Services Commissioner v DJMH  VCAT 2301, Deputy President McNamara’s tribunal ordered the solicitor not to practice before 1 July 2011 for multiple findings of acting in the face of a conflict. It is unfortunate that the reasons for decision do not allow an understanding of what was alleged. It had something to do with conflicts of duties in lending transactions described as ‘very serious indeed’. The gravamen of the charges, according to the Deputy President was that the solicitor: Continue reading “Solicitor gets three year break for multiple conflict findings”