Demand for information “within 14 days” complies with s. 149

Law Institute of Victoria v MMM [2006] VCAT 182

Section 149(3) of the Legal Practice Act, 1996 says that a demand by the Law Institute under the power to compel information and documents must be in writing and “must allow at least 14 days to comply”. In a marvellously ambitious move, Rod Randall unsuccessfully challenged the Tribunal’s jurisdiction on the basis that a demand for information “within 14 days” did not allow his client at least 14 days to comply.

Continue reading “Demand for information “within 14 days” complies with s. 149″

Legal Profession Tribunal’s costs provision explained

Buxey’s Case [2006] VCAT 173

The decision is a simple illustration of three things:

  • a tribunal is not functus officio in relation to costs upon deciding a dispute;
  • a client can only have an order for costs if the Legal Practitioner behaved unreasonably in relation to the hearing, whereas the Legal Practitioner can have costs for unreasonableness in relation to a hearing of the Client or on the basis that the dispute is misconceived, frivolous, vexatious, or lacking in substance;
  • “costs of a hearing” extend to preparation for the hearing but not to the pre-Tribunal phase and not to settlement attempts (including the costs of conciliation) during the Tribunal phase. Continue reading “Legal Profession Tribunal’s costs provision explained”

Want of jurisdiction re costs of matrimonial litigation extends to Magistrates’ Court cases

A’s Case [2006] VCAT 111

It is a well established but frequently unknown proposition that by virtue of the inconsistency of the federal scheme for the disputation of the costs of family law litigation proceedings provided for by the Family Law Rules 2004 and the costs disputes procedure under the Legal Practice Act, 1996, the latter yields to the former, with the result that the Legal Practice Act, 1996 does not apply, and neither Professional Standards nor the Tribunal has any jurisdiction.

This decision establishes only that it makes no difference if the Magistrates’ Court hears a family law matter exercising federal jurisdiction, since rule 19.40 establishes that the Family Law Rules extend to the costs of a lawyer conducting a case in a court of summary jurisdiction. The Magistrates’ Court hears matters under Part 7 of the Family Law Act, 1975, which deals with matters concerning children.

(So the applicant lost her claim for $172. One has to wonder whether a filing fee refundable on success might not sharpen the minds of applicants.)

Alan Hebb appeared for the Tribunal; there were no appearances for or by the parties.

Barrister leaves claiming the immunity too late to get costs when he wins

Zunica’s Case [2006] VCAT 110

A barrister succeeded on an immunity defence and sought costs upon receiving the reasons. The applicant sought recognition of the fact that a costs dispute survived the immunity decision. Mr Butcher said [7]:

“The jurisdiction of the Tribunal to hear and determine a dispute is based upon the dispute as it is originated and described to the relevant RPA, in this case the Victorian Bar.”

Although the Victorian Bar had described the matter as a costs dispute and a pecuniary loss dispute in the critical notice under s. 128 of the old Act to the effect that it could not settle the problems, allowing the parties to refer the matter to the Tribunal should one of them wish to do so, he found that properly construed, the documents which had led the Victorian Bar to describe the matter as in part a costs dispute were found in fact to constitute purely a pecuniary loss dispute. And that was despite the fact that the box on the form used to lodge costs and pecuniary loss dispute resolution requests next to the statement “I think the legal practitioner handled the matter badly and I don’t want to pay for this” was ticked. It was so because the covering letter under which the form had been lodged, drafted by a solicitor, “formally claim[ed] pecuniary loss”, and there was no evidence that the discretion to exercise the 6 month time limit for the lodgment of costs disputes had been exercised by the Victorian Bar.

The costs application failed because the whole dispute resolution process took almost 18 months, but the respondent barrister did not assert the immunity as a defence until a week before the hearing. He asserted that:

“it was not proper for a claim for immunity to have been brought [during the attempts at dispute resolution by the Victorian Bar] on the basis that the dispute is misconceived or lacking in substance” [26].

Mr Butcher agreed with that submission, though later he said more equivocally:

“Even if the matter were to be allowed to go through the process of the Bar Ethics Committee before claiming the immunity…”.

It is not at all clear why a barrister ought not claim the immunity during the process of the Bar Ethics Committee. What that Committee was charged with doing, under s. 128 of the Legal Practice Act, 1996 was to attempt to settle the dispute. A dispute with a man who is immune from the dispute and relies on it must be easier to settle than a dispute with a man who does not.

The proposition that:

“It is no answer to say that the applicant client should have known of the immunity; what is relevant is when and how it is notified by the legal practitioner claiming that immunity”

is superficially unattractive since the test for the award of costs against an applicant is whether the dispute was misconceived, but the reasoning is in fact correct, because the immunity is a defence and the dispute is not misconceived until such time as the respondent advises he wishes to avail himself of the defence.

Ed Richards was for the applicant, Peter Cawthorn for the respondent, a barrister.

Man gives up only after suing lawyer for negligence in suing previous lawyer retained to sue lawyer before that

Hulme’s Case [2006] VCAT 109

The applicant’s case was dismissed for want of prosecution, or to use the language of the old Legal Profession Tribunal, was found to be abandoned. There was no counsel assisting the Tribunal; the parties appeared in person. Mr Howell noted that the Legal Profession Tribunal’s procedure in relation to want of prosecution and VCAT’s procedure under s. 76 of the VCAT Act was similar.

It appears that the Registrar of the Legal Profession Tribunal had met personally with the applicant in the absence of the respondent and had then written a letter setting out an “agreement” between them by which the applicant was to write “comprehensive” histories of his troubles.

It is a sad story which began with the sale by the applicant of some meat for $7,000. The applicant’s company never got paid. It is said that the applicant then retained a laywer to chase the cash, though it seems likely the company did so, and that accordingly the company should have been the applicant. Mr Howell had in an earlier proceeding set aside the bill that lawyer rendered in 1991. Then the applicant retained a second lawyer to get the cash from the purchaser, or alternatively as damages for negligence from the first solicitor. That came to nothing and a second Tribunal proceeding failed for want of jurisdiction, because the second solicitor did not hold a practising certificate at the relevant time. Six years after the meat was sold, the applicant hired the respondent, the debt having become statute barred. Five years of prompting was said not to have been able to rouse the respondent from his slumber.

Three years after ceasing his attempts to have the respondent do something, the applicant made a pecuniary loss dispute resolution request to the Law Insitute, and the matter progressed to the Legal Profession Tribunal. It was soon after the referral that the Registrar had his meeting and wrote his letter. The applicant said the fourth solicitor he retained (to prosecute his suit against the third solicitor for negligence in prosecuting his claim against the second solicitor for negligently failing to sue the first solicitor for professional negligence) did nothing. Mr Howell waited four years before striking the matter out for want of prosecution on the basis (i) of the lack of action alone and (ii) on the basis of prejudice to the respondent:

“because the debt was incurred in 1987 or earlier, there was a need for action to be taken promptly in 2002 because the chances of recovery of the debt would be relevant to an assessment of compensation if [the respondent] was found to have acted negligently or contrary to the instructions given by [the applicant].”

Mr Howell said “I regard [the respondent] as likely to be disadvantaged by the passing of time in seeking evidence as to the chances of recovery from the debtor before the debt became statute barred in 1993 or earlier.”

Lawyer’s bill in the middle of a case not inconsistent with promise to bill only “when we have completed the work on your behalf”

Buttigieg’s Case [2005] VCAT 2916

The costs agreement in a Workcover matter said “we will only charge you if you are successful” and that was defined to mean “lump sum compensation, … weekly payments of compensation including an increase in the rate, …, payment of medical and like expenses”. But it said “We shall send you a bill for our professional fees when we have completed the work on your behalf.” Buttigieg said since she had not yet received lump sum compensation and her case had not yet been completed, she should not have to pay a bill of $1,100 rendered upon receipt of $7,800 in arrears of weekly payments (i.e. not lump sum compensation). Mr Howell concluded:

“These provisions [of the costs agreement] do not sit easily together, as being successful and completing a matter are different concepts. [“the terms … are equivocal and to a limited extent quite confusing. For example, the costs agreement is a standard form designed to deal with both workplace injuries and motor vehicle injuries, which means that many of its provisions had no relevance whatsoever in Ms Buttigieg’s case. It is possilbe that this dispute might not have arisen if the costs agreement had been tailored to deal with her case.] Doing the best I can to make sense of the costs agreement, I am satisfied that the thrust of the agreement was that no fees would be charged unless compensation of some kind was received by Ms Buttigieg. [She] received about $7,800 in back payments when weekly payments were restored, and [the solicitors] did not render an account to Ms Buttigieg until that had happened. I do not see liability for payment of costs as dependent upon completion of the claim, partly because there are periodic variations or adjustments in many workcover claims and the work in those claims tends never to be completed.”

Mr Howell decided that because of the poorly drafted costs agreement, the solicitors were not entitled to costs “even if the dispute … was frivolous, vexatious, misconceived or lacking in substance” (the touchstone for his discretion).

Alan Hebb was for the Tribunal, I Fehring for the solicitor.

Trustee has standing to apply to set aside costs agreement between bankrupt and solicitor

McVeigh’s Case [2005] VCAT 2917

McVeigh was the trustee in bankruptcy of the solicitor’s former client. The solicitor said he had no standing because only a client, defined for the purposes of s. 103 to mean “a person who retains a legal practitioner or firm to provide legal services for fee or reward”, can bring an application to set aside a costs dispute. Continue reading “Trustee has standing to apply to set aside costs agreement between bankrupt and solicitor”

Barrister claims immunity too late to get costs; regretted settlement suit fails

Phua’s Case (solicitors) [2005] VCAT 2919 Costs dispute; s. 86 discount; regretted settlement

Phua’s Case (barrister) [2005] VCAT 2918 Costs of hearing; immunity

Mrs Phua was alleged to have stolen from her employer. Mr Phua admitted complicitly and made restitution. The employer commenced Magistrates’ Court proceedings. The Phuas defended and counterclaimed for wages and travelling expenses. Then they retained the solicitors in February, briefing them with tape recordings of a police interview. Mrs Phua was subsequently charged and convicted in October, but the solicitors did not act in those proceedings which resulted in a bond and an order to make restitution of a further $7,500 or so. It seems the solicitors acted in the counterclaim, the civil proceedings having been perhaps overtaken by the restitution order in the criminal proceedings. It settled on the afternoon of the first day’s hearing, 11 months into the retainer (quaere the date in [5] is wrong).

The solicitor’s estimate of future costs under s. 86 of the Legal Practice Act, 1996 was $3,500 for costs and disbursements. In fact they charged $1,100 more than that. They had charged twice for one letter, and the duplication was disallowed.

Phua’s claim was that he settled “only because counsel for the emplolyer insisted that provision of [certain pieces of documentary evidence] at such a late stage would cause the hearing to enter a second day, with the consequential increase in legal costs”. The claim for compensation was dismissed on the basis that the evidence other than that which was not discovered until the day of the trial could not have been completed on that day anyway.

Mr Howell referred to the understimate by $1,100 as “a signifcant amount” but did nothing about it. He characterised the breach as one of failing to advise changes to the original estimate promptly, and noted that before the trial, Phua knew what the costs would be. Though it was “rather late for [the solicitors] to be asking for counsel’s fees and thus, in substance, to be changing the estimate” he was not satisfied “that the delay in changing the estimate was of a sufficient degree of seriousness to warrant the reduction of the accounts”. So Phua was awarded the grand sum of $19.60. The barrister who was also sued was immune from suit because advice as to settlement during a trial is immune: Biggar v McLeod; Kelley v Corston. He did not get costs “but only because” he did not claim the immunity prior to the hearing.

The parties were unrepresented. Alan Hebb was for the Tribunal.

Workcover case trust transfer costs solicitor $10,000

Law Institute v SA [2006] VCAT 442

On 21 March 2006, Mr Butcher found a solicitor guilty of three counts of unsatisfactory conduct (maximum fine of $1,000 and fine of $500 for taking fees out of workers’ compensation settlement, and $500 for admitted breach of the costs disclosure rules under s. 86 of the Legal Practice Act, 1996 respectively) and one of misconduct ($1,000). Costs of $6,740 were ordered in favour of the Law Institute. Accordingly, for failing to comply with costs disclosures, and then taking costs which he was apparently entitled to out of the settlement monies, the solicitor was ordered to pay a total of just less than $10,000. There was a stay of 6 months. Continue reading “Workcover case trust transfer costs solicitor $10,000”

Bar cops criticism for experienced barrister’s failure to procure a practising certificate

Update, 2 June 2008: Consider also the somewhat similar case of Victorian Lawyers RPA Limited v MAF [1999] VLPT 12.  There, the solicitor practised for about one and a half years without either a practising certificate or professional indemnity insurance.  He blamed his book keeper, a defence which was partially successful.  He was reprimanded, and ordered to pay to the Legal Practitioners Liability Committee, the professional indemnity insurer of Victorian lawyers, the premium he would have had to pay had he done the right thing, along with the practising certificate fee he would have had to pay had he actually applied.Original post: In Victorian Bar v GSL [2006] VCAT 435, Judge Bowman, Peter Jopling and F Harrison of VCAT found a barrister guilty of misconduct and fined him $5,000 for practising without a practising certificate, with costs of $4,500 stayed for 3 months. Continue reading “Bar cops criticism for experienced barrister’s failure to procure a practising certificate”

Solicitor’s failure to supervise undertaking by firm was unsatisfactory conduct

Law Institute v SHP [2006] VCAT 450

A solicitor was found guilty of unsatisfactory conduct in that he failed to supervise his legal and non-legal staff in relation to an undertaking he signed on behalf of his firm. Charged with misconduct, VCAT instead found him guilty of unsatisfactory conduct (which he admitted) and ordered him to pay a fine of $750 and costs of $9,000 stayed for 3 months. It is suggested in the reasons that although the solicitor’s law clerk knew of the undertaking which was simply enough expressed, and although it was accepted that the solicitor told the clerk to bring it to the attention of an employee solicitor handling a related part of the matter who could be expected to have understood the nature of the undertaking, that was not enough.

Lisa Hannon was for the Law Institute, John Langmead and Erin Gardner for the solicitor.

The new r. 3.4.3, Legal Profession Regulations, 2005 (Vic.)

Section 15 of the Legal Profession (Amendment) Regulations, 2007 inserted a new s. 3.4.3 into the Legal Profession Regulations, 2005 (Vic.). This is it, with my parenthesised interpolations:

3.4.3 Interest on unpaid legal costs

(1) This regulation is made for the purposes of section 3.4.21(4) of the [Legal Profession Act, 2004] and prescribes the rate of interest in excess of which a law practice may not charge interest under section 3.4.21 of the Act or under a costs agreement.

(2) The rate for the period commencing on and including the first commencement day and ending immediately before the second commencement day is the rate fixed under section 2 of the Penalty Interest Rates Act 1983 as at the relevant date.

(3) The rate for the period commencing on and including the second commencement day is the rate that is equal to the Cash Rate Target as at the relevant date, increased by 2 percentage points.

(4) In this regulation—

Cash Rate Target means the percentage (or maximum percentage) specified by the Reserve Bank of Australia as the Cash Rate Target;

first commencement day means the day on which regulation 15 of the Legal Profession (Amendment) Regulations 2007 comes into operation [r. 3(2) says reg 15 comes into force 6 months after the rest of the Regulations; r. 3(1) says the rest come into operation on the date they are made, which was 8 May 2007, so the first commencement day is 8 November 2007];

relevant date means the date the bill was issued by the law practice concerned;

second commencement day means the day that is 28 days after the first commencement day [6 December 2007].’