3 years’ holiday for not making ongoing discovery

Guss v Law Institute of Victoria Ltd [2006] VSCA 88 (Maxwell P gave the lead judgment, Callaway and Chernov JJA agreeing)

A solicitor’s right to practice was suspended for three years and he was ordered to pay costs of $31,500 for failing to comply with the obligation of ongoing discovery in relation to what was prima facie a privileged copy of a document produced by an expert witness a few days before trial which, had the existence of the copy document been disclosed to the other side, might have put the other side onto a train of enquiry which might have led to relevant evidence.

After an eight day hearing, the Full Legal Profession Tribunal cancelled the solicitor’s practising certificate, prohibited him from reapplying for a certificate for 3 years, and ordered him to pay costs of $51,500 (the Law Institute had claimed $76,000 for senior and junior counsel, and $16,500 for its own employees’ time though no solicitors were retained by it and for which it was awarded $10,000, a total of $92,500). The solicitor appealed on a question of law and sought a stay, but the stay was refused. The appeal failed except as to costs, which were reduced by $21,000, being the fees of senior counsel whose involvement was described as “quite unnecessary” except in relation to one limited point of law, the argument of which could not have taken more than a day.

The solicitor’s wife had sued the mortgagee of her property for damages for selling it up at an undervalue. An issue in the proceedings was whether a boundary between two titles sold as one lot was encroached by the house (in which case, it was better to sell as one lot than if the two properties did not have that problem when consideredly separately). The wife engaged a surveyor as a potential expert witness. The surveyor faxed the solicitor a copy of an undated anonymous survey plan previously prepared by someone else.

The solicitor allowed his wife’s counsel to open the case on the basis that there was no survey plan in existence, and did not discover the facsimile of the document (which was relevant under the Peruvian Guano test, that is, not on the basis that it was directly relevant to a matter in issue in the proceedings, but on the basis that it would have put the counterparty onto a train of enquiry which may have led to the idenfication of directly relevant evidence (see [13] to [14]). The solicitor’s problems on appeal were (i) that although when the existence of the plan came out at the trial of his wife’s action, his wife claimed privilege over the surveyor’s cover sheet she did not do so in respect of the attached survey plan, despite a claim probably having been available under the Propend Finance principle that copies of non-privileged documents may be privileged if brought into existence for a privileged purpose (here, for use in the litigation), and (ii) that he had not been particularly forceful in the privilege submissions before the Full Tribunal. Besides, the Full Tribunal had said, it did not matter whether the document was privileged or not; it still had to be discovered.
The failure was a failure to comply with the relatively new ongoing duty of discovery. This failure was said to be reasonably regarded as disgraceful and dishonourable by fellow professionals of good repute within the test in Atkinson v. General Council of Medical Education and Registration [1894] Q.B. 750; Re a Solicitor ex parte The Law Society [1912] K.B. 302; Myers v. Elman [1940] A.C. 282; Re a Solicitor [1960] V.R. 617. Where the Courts make no attempt whatever to rail against the universal practice of discovering privileged documents under cover of a general claim for privilege, and without enumeration, it seems harsh to require such enumeration in compliance with the ongoing duty of discovery.

The limits of an appeal “on a question of law” from the Full Tribunal to the Court of Appeal were illustrated by the Court’s refusal to consider the argument that a finding (that his wife’s failure to make proper discovery was a result of the solicitor’s “own volition”) was unsafe for being against the weight of evidence. Only if that finding were based on no evidence could a question of law been raised: Fidgeon v William Abbott & Associates [2003] VSCA 5. Similarly, the appeal against sentence failed at the first hurdle: the solicitor’s “attack on the penalty as being excessive could only succeed if he showed that the penalty was manifestly excessive, that is, obviously outside the range of penalties reasonably open to the Tribunal, so as to demonstrate that the penalty discretion had not been properly exercised”. That was not the case here. The comments in this regard were interesting:

32… At the request of the Court, the Law Institute has since the hearing supplied copies of decisions of the Tribunal (and its predecessors) in some 21 cases, spanning the period February 1992 – September 2005. In each case, the disciplinary tribunal cancelled the practitioner’s practising certificate. The periods of cancellation ranged from three years to seven years. A three year cancellation was imposed in seven of the 21 cases. In eight others, the period of cancellation was five years.

33 The assistance to be derived from these decisions is, necessarily, limited. With one exception, the cases did not involve misconduct comparable to that in which [the solicitor] was found to have engaged. They concerned conduct ranging from trust account breaches to misuse of clients’ funds, gross inattention to clients’ matters and practising without a practising certificate. All that can be said of those decisions is that they make it quite clear that the disciplinary tribunal has consistently shown itself ready to impose substantial periods of cancellation – three years and upwards – for what it regards as serious misconduct.

34 The only case which bears any real similarity to the present is one which was decided in December 2002. The misconduct was constituted by misleading the Court. The practitioner had included in a Magistrates’ Court Complaint a claim for extras of $1500 when he knew that no such extra costs had been, or were likely to be, incurred. The practitioner was found guilty of misconduct and his practising certificate was cancelled for a period of three years. As with the present case, this was a single instance of misconduct, involving a breach of the practitioner’s paramount duty not to mislead the court.

35 Against that background, it does not seem surprising that the Law Institute, as the body responsible for regulatory supervision of the profession, submitted to the Tribunal that an appropriate penalty in the present case would be cancellation of [the solicitor’s] practising certificate for a period of two to three years. That submission no doubt reflected both the extensive experience of the Law Institute in disciplinary proceedings against practitioners and its assessment, based on that experience, of the relative seriousness of the misconduct in question.”

Graeme Uren with Martin Randall for the LIV, solicitor in person.

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