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)  VSC 541, handed down by Justice Robson yesterday (see paras  – ). 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.
Hartnett v Taylor  VSC 501 was a Part IV claim for testators’ family maintenance. The defendant executrixes said that the plaintiffs’ conduct led to estrangement from the deceased and to the deceased’s alcoholism. The plaintiffs said that the deceased’s alcoholism led to their estrangement, and that is what Sifris J found. The defendant executrixes’ contention was one which was contradicted by their own witness, the deceased’s doctor, who said that the deceased was an alcoholic before the estrangement with the plaintiffs. Sifris J said:
’12 It is in my view clear that the defendants’ evidence and contentions in relation to the deceased’s alcohol consumption and the estrangement from the plaintiffs were made in wilful disregard of known facts and were allegations which ought never have been made. This provides a sufficient basis for an order for indemnity costs notwithstanding that the defendants are not personally liable for such costs.’
Regrettably, the plaintiffs do not appear to have argued the case under s. 18(d) of the Civil Procedure Act 2010. I say ‘regrettably’ because it is desirable that a coherent and easily accessible body of law about the costs consequences of the making of allegations without a proper factual foundation grow up around the new statutory provision.
Then Sifris J denied the second defendant her costs of being separately represented, since there was no need for the two executrixes to have separate representation.
Section 18(d) of the Civil Procedure Act 2010 requires litigants and their lawyers alike not to make claims in civil proceedings, or defend such claims, unless ‘on the factual and legal material available to [them] at the time of making the claims’ the claim or defence has ‘a proper basis’. A court may make any order it considers appropriate in the interests of justice if satisfied that a person has breached s. 18(d): s. 29 and may take any contravention into account in exercising any of its powers, including specifically in relation to costs: s. 28.
As Derham AsJ said in Matthews v SPI Electricity Pty Ltd (No 2) (below):
‘The overarching obligations [including that in s. 18(d)]:
(a) apply to any legal practitioner or any law practice acting for or on behalf of a party: Civil Procedure Act s 10(1)(b), (c);
(b) apply in respect of the conduct of any aspect of a civil proceeding, including, but not limited to any interlocutory application or interlocutory proceeding: Civil Procedure Act s 11(a);
(c) do not override any duty or obligation of a legal practitioner to a client to the extent that those duties and obligations and the overarching obligations can operate consistently: Civil Procedure Act s 13(1); and
(d) must be complied with by a legal practitioner or a law practice engaged by, or on behalf of, a client in connection with a civil proceeding despite any obligation the legal practitioner or the law practice has to act in accordance with the instructions or wishes of the client: Civil Procedure Acts 13(2).
In this very workmanlike post, I simply summarise the not particularly illuminating jurisprudence to have emerged around this new provision so far. Continue reading “Section 18(d) of the Civil Procedure Act 2010 (Vic)”
Friends, I need your help, again. Certain promises I made to write about and present on the civil and disciplinary consequences of making allegations of serious wrongdoing (e.g. fraud) without a proper foundation are coming home to roost. I’m looking at:
- disciplinary sanction of lawyers via Legal Services Commissioner, etc. prosecution;
- personal costs orders against lawyers;
- costs consequences for parties (common law in relation to exercise of the unfettered discretion re solicitor-client rather than party-party costs and displacing the presumption that costs follow the event where allegations of fraud are not made out, and Civil Procedure Act 2010 (Vic.)); and
- what is a ‘proper foundation’?
My miserable situation in this season of sun, frivolity and child-minding is a need to work out what these consequences are so that I can provide learned disquisition. In the process I have learnt something about Dr Peter Clyne, the protagonist of Clyne v NSW Bar Association (1960) 104 CLR 186;  HCA 40. What a wonderful addition to my knowledge of the rogues’ gallery of which I consider myself a connoisseur; I even bought his autobiography on eBay today but his ‘How Not to Pay Your Debts’ is still available. The Hikers described his conduct during the course of an ‘orgy of litigation’ between his client, the husband, and the wife as ‘irresponsible’, ‘mischievous’, ‘objectionable’, indefensible, ‘inexcusable’, and, rather wonderfully I think, ‘monstrous’. A unanimous Dixon Court confirmed the good doctor’s striking off. You can read about his life afterwards, including as a Magistrate in Zambia, here, and possibly less reliably, here.
So here is a general call-out for good authorities on these questions, especially decisions which really assist in understanding what a ‘proper factual foundation’ is, since many authorities relate to allegations which are so obviously unsustainable that they do not really illuminate where the line lies between the merely poor and the truly discreditable argument (Clyne), or proceed on the basis of admissions (AM v Legal Practitioners Disciplinary Authority  NTSC 02), or are fantastically complicated (the case just referred to and Victorian Bar Inc v CEM QC  VCAT 1417). I would also be very grateful for any detailed commentaries on this aspect of the conduct rules for solicitors and barristers alike, and Australian decisions in relation to costs (since many of those cited by Dal Pont are Canadian or English).
A judge of the Supreme Court of NSW has reiterated that litigation is not a game, and foreshadowed the possibility of a personal costs order against lawyers for a respondent who took improper advantage of their opponent’s ignorance of a provision in the Corporations Act, 2001. The provision terminates proceedings for winding up in insolvency 6 months after their issue, unless a court otherwise orders. They took advantage by agreeing to proposed consent orders providing for an interlocutory timetable pursuant to which the proceedings would be brought to a premature end before trial, without pointing that pitfall out to the other side. Justice Richard White’s comments in
In the matter of Fratelli’s Fresh Pasta Pty Ltd  NSWSC 576 at  to  follow below. Note that his Honour expressly drew upon s. 56 of the Civil Procedure Act, 2005 (NSW), which provides:
‘(1) The overriding purpose of this Act and of rules of court, in their application to a civil dispute or civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the dispute or proceedings.
(4) Each of the following persons must not, by their conduct, cause a party to a civil dispute or civil proceedings to be put in breach of a duty identified in subsection (3) or (3A) [to further the overriding purpose and to take reasonable steps to resolve or narrow the issues in dispute]:
(a) any solicitor or barrister representing the party in the dispute or proceedings …
(5) The court may take into account any failure to comply with subsection (3), (3A) or (4) in exercising a discretion with respect to costs.’ Continue reading “Lawyers’ Civil Procedure Act duty to correct opponents’ misapprehensions”