The extended duration of the un-renewed practising certificate

Under the Legal Profession Act 2004, if a lawyer applied for renewal of their practising certificate prior to the expiry of the old one, but a decision was not made before the old one runs out, the certificate is extended until either it is renewed or a decision to refuse renewal is finally determined by the exhaustion of all rights of review of that decision.  No one has ever really known what that meant.  There is a statutory review procedure in VCAT and then there are appeals all the way to the High Court.  Are the appeals from the review ‘a right of review of the decision’?  The Supreme Court has now determined that the certificate endures (if not earlier cancelled or suspended by the stipes) until the end of the High Court appeal.

The question arose in Batrouney v Forster (No 2) [2015] VSC 541, handed down by Justice Robson yesterday (see paras [167] – [193]).  It represents a further embarrassment for the Legal Services Board appointed receivers of David Forster’s practice, Hollows Lawyers, with a savage series of costs orders against the receivers in Mr Forster’s favour.  That followed findings that the receivers’ proceedings were in part misconceived, and that they breached more than one provision of the Civil Procedure Act 2010. The question was at what point did Mr Forster cease to hold a practising certificate and so cease to be entitled to claim costs of acting for himself under the Cachia v Hanes (1994) 179 CLR 403 at 411–413 exception to the rule that self-represented litigants are not entitled to costs for work done by themselves.

The question is a matter of significance to practitioners who get themselves fairly deep into trouble.  It means that those whose practising certificates are not renewed may continue to practice and earn income to put towards the legal costs of challenging that decision, and it also means that such practitioners may brief counsel directly in circumstances where, by virtue of Bar rules about direct access, they might not otherwise be able to.  And of course, it also means that if successful in such proceedings, they will get a costs indemnity against the time spent running their litigation.

Mr Forster is a man with his back to the wall, the subject of an avalanche of litigation brought by professional regulators.  Until recently, he had been singularly unsuccessful and much chastised.  It is probably fair to say that some people in the administration of justice, including the profession, would see him as a pariah.  It ought therefore be of some comfort to those responsible for the justice system that this result has obtained.  It suggests that the cab rank principle is alive and well, that judges are capable of dealing with each case impartially on its merits and according to law without being unduly influenced by past cases, and that the State will not protect itself where the law requires that it be dealt with.

Director ordered to pay company’s £35M and counting costs liability

Updated post, 1 March 2016: Decision upheld by UK Court of Appeal: [2016] EWCA Civ 23.  A note of the appeal decision is here. It reveals that Mr Vik’s costs liability is about £50 million. Ouch.

Original post: Deutsche Bank AG v Sebastian Holdings Incorporated [2014] EWHC 2073 (Comm) is big.  Deutsche Bank sued a company in the English High Court and got a quarter of a billion American dollars judgment.  Justice Cooke also ordered the company to pay costs and ordered  an interim payment towards the company’s costs liability of about £35 million within a fortnight.  The company, a special purpose shell company incorporated in the Turks & Caicos (a British territory in the Bahamas and offshore financial centre), didn’t pay.  The plaintiff successfully applied ex parte to join the company’s sole shareholder and director and effect substituted service in the US.  He is the Norwegian born, Swedish raised, Harvard educated, Monaco domiciled Alexander Vik, said to have been miraculously lucky in his path to billionnairedom.  Until now…

The plaintiff then succeeded in its non-party costs order against the director for the reasons set out below.  It seems all the rage over in England; consider also Xhosa Office Rentals Ltd v Multi High Tech PCB Ltd [2014] EWHC 1286 (QB).  (And see also this post about a similar decision in Victoria, Lillas and Loel Lawyers Pty Ltd v Celona [2014] VSCA 70.  Even more recently, see JJES Pty Ltd v Sayan (No 2) [2014] NSWSC 475 in which the director of a corporate plaintiff which sued its solicitors for professional negligence was ordered to pay the solicitors’ costs personally on an indemnity basis.  It refers to two more authorities directly on point: FPM Constructions v Council of City of Blue Mountains [2005] NSWCA 340, and May v Christodoulou [2011] NSWCA 75; (2011) 80 NSWLR 462) Continue reading “Director ordered to pay company’s £35M and counting costs liability”