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Federal Court sets aside bankruptcy notice used for debt collection against solvent individuals as abuse of process

Without first formally demanding payment of a debt, creditors served a bankruptcy notice.  The debtors were insolvency practitioners and there was no suggestion that they were insolvent.  Federal Magistrate Raphael set aside the notice on the basis it was an abuse of process, issued with a purpose not of making the respondents bankrupt but of embarrassing them. His Honour said:

‘The proper purpose of seeking a sequestration order against the estate of a debtor is so that a debtor, who is unable to pay his debts as and when they fall due, should have his affairs controlled for the benefit of all his creditors and not just specific ones.  Allied to this purpose is the prevention of the debtor incurring further obligations which he will not be able to meet. It is a public purpose. The bankruptcy process is not to be used for private ends.’

On appeal, the decision was confirmed by the Federal Court’s Justice Marshall.  In Lord v Rankine [2011] FMCA 668, at [20] – [34] (despite the numbering below) his Honour said:

Continue reading “Federal Court sets aside bankruptcy notice used for debt collection against solvent individuals as abuse of process”

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Costs of proceedings commenced without a prior letter of demand

In PMCDG Investments Pty Ltd v Monash Gate Project Pty Ltd [2011] VSC 52, Associate Justice Daly accepted a referral from the trial judge, Justice Robson, to decide who should pay the costs of a proceeding the trial of which Justice Robson had presided over. That referral, it seems to me, is an interesting development in itself. Associate Justice Daly was asked to depart from the usual order that the winner get a partial indemnity for their actual legal costs from the losing party, and instead make no order as to costs. It was said that though the plaintiff had succeeded, litigation was not necessary, and that proceedings had been commenced precipitiously. Her Honour did not uphold the submission, but did usefully digest a number of authorities on point: Continue reading “Costs of proceedings commenced without a prior letter of demand”

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Counsel’s discretion as to trial tactics

Joseph Vella purchased a knife and a black beanie and then turned up to his estranged wife’s door two days later in their company.  In his quiver he also sported a baseball bat.  He bashed her head in with the bat and then slit her throat with the knife.  Charged with murder, he admitted the acts, but his defence was that he had gone to the wife’s home to tell her that he would take the kids on New Year’s Eve so she could go out, but that she had provocatively told him that he would never see his kids again, whereupon — what’s a bloke to do? — he laid into her, though not with the intention of finishing her off.  He was jailed, but appealed to the Court of Appeal and then sought leave unsuccessfully to the High Court.  His appeals raised aspects of his counsel’s conduct of his defence, apparently the same ones focussed on in the disciplinary complaints referred to below against his counsel.

Appeals exhausted, Mr Vella turned his attentions to his lawyers.  He lodged a disciplinary complaint about the prosecutor.  The Western Australian disciplinary body did not lodge a prosecution as a result and Mr Vella sought a review of that decision.  He failed: Vella and Mactaggart [2011] WASAT 28.  Interestingly, the prosecutor represented himself before the disciplinary tribunal.  Mr Vella lodged a disciplinary complaint about his own counsel.  Again, the disciplinary body did not lodge a prosecution in response, and Mr Vella sought a review of that decision.  Again he failed: Vella and Bowden [2011] WASAT 56. This time, the barrister retained solicitors and counsel to represent him.  Mr Vella also lodged a complaint alleging overcharging, which gave rise to a taxation. Continue reading “Counsel’s discretion as to trial tactics”

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Another reason not to unilaterally communicate with the Court

Unilateral communication with a judge’s associate is a dangerous practice.  Unless it relates purely to procedural matters (and who knows exactly what the limits of that are), any communication with the Court, especially with a judge’s associate should be copied to the other side, or the other side should immediately be informed of it.  In these days of email, what can be the harm in copying the other side in every case?  If you don’t want to do so, you probably should not be communicating with the court.  Apart from the fact that it is improper to communicate unilaterally with the Court, it might give rise to an apprehended bias-based application that the judge recuse her or himself.  In John Holland Rail Pty Ltd v Comcare [2011] FCAFC 34, such an application failed, but the unanimous Full Court pithily stated the law:

Continue reading “Another reason not to unilaterally communicate with the Court”

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Certification of pleadings in Victorian courts

By virtue of the Supreme Court (Chapter I Amendment No. 21) Rules 2010 and the Civil Procedure Act, 2010 This is what solicitors using the Supreme Court of Victoria are going to have to sign before lodging pleadings as of next year:

‘In accordance with section 42 of the Civil Procedure Act 2010, I [name of legal practitioner or if not legally represented, name of party] certify to the Court that, in relation to the document [identify document to which certification relates] filed on behalf of [specify party], on the factual and legal material available to me at present:

(a)    each allegation of fact in the document has a proper basis;

*(b) each denial in the document has a proper basis;

*(c) there is a proper basis for each non-admission in the document.

Date:
*Delete if not applicable.’

I will be interested to learn what a proper basis for a non-admission is.

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The cab rank principle

Brian Walters, a good QC, is running for the Greens in the imminent Victorian election.  His Labor opponent, Bronwyn Pike, has raised the fact that he once took a brief for a brown coal company, while now he is against brown coal as a means of generating energy.  This smear campaign is not one to be expected from a minister in a mature democracy.  Most people have some understanding that barristers (not solicitors) are obliged to take a brief from anyone, pretty much regardless of what they think of them, if the client is prepared to pay their usual fee, and they are available, properly instructed, not conflicted and the brief is within their skillset.  The principle, which acts as a conceptual prophylactic against the ‘disembarkation of fleas’, is called the ‘cab rank rule‘. Victoria’s version is set out below. It is in my opinion not one of those rules which is observed in the breach.  Even if it is not perfectly observed, it has a useful and substantial operation.  Ministers’ understanding of it should be developed; it is a fundamental precept of one of the arms of government (the judiciary).

There are three reasons why Pike’s comments are unfortunate.  First, Education Ministers should presumably try harder than others to avoid displays of ignorance.  Second, her electorate — Carlton, East Melbourne, Parkville — is no doubt teeming with lawyers (not to mention bloggers …). Third, it undermines what respect remains for the legal system. Top Victorian lawyers’ assessments of Ms Pike’s comments have been swingeing.

But one silly comment in the heat of campaigning is one thing.  When the issue is escalated to the Premier and Treasurer, and their responses are as follows, condemnation is called for, hence this post: Continue reading “The cab rank principle”

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“Have a nice day, you piece of shit”

Incomprehensibly, American lawyers are furiously debating whether an advocate saying to an unrepresented grandmother to whom he had been opposed that day on behalf of one of her relatives ‘Have a nice day, you piece of shit’ is conduct warranting discipline.  For example: here,  here, here, and  here.  To be fair, their conduct rules don’t seem to be as fuzzy as ours, and the debate seems to rage around definitions.  But seriously, there’s no nice way to take ‘Have a nice day, you piece of shit’.  It’s qualitatively different from saying to an opponent lawyer ‘You’re full of shit’, or even ‘You’re fucked if that’s your best point buddy’, not that I am condoning such language between lawyers. Continue reading ““Have a nice day, you piece of shit””

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Can a solicitor terminate her retainer if client demands putting of hopeless arguments?

An English case has considered when instructions to put hopeless cases, or advance hopeless claims, may justify a solicitor terminating the retainer: Richard Buxton (Solicitors) v Mills-Owens [2010] EWCA Civ 122.  And here’s a useful case note from Barlow Lyde & Gilbert.  Of course this is the position in England; the position in Australia is not necessarily the same.

The English Court of Appeal also reminded lawyers of their duty to engage in fearless advocacy.  Many barristers get paid handsome sums to speak on their clients’ behalves.  Sometimes it is quite frankly embarrassing arguing points which you do not agree with, and which may not be very good.  Nevertheless, if they are arguable, it’s part of the job, and such arguments must be advanced with as much persuasive conviction as can be mustered.  There is a species of lawyer, a small majority of the general corpus, who expresses embarrassment about their client’s behaviour or contentions behind their back, lawyer to lawyer, wink wink, nudge nudge.  I am speaking of speech which goes beyond making proper concessions.  I regard such conduct with contempt.  The same behaviour may be seen in Court, a little more veiled; Lord Justice Dyson, with whom the other judges agreed, said: Continue reading “Can a solicitor terminate her retainer if client demands putting of hopeless arguments?”

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Duties of lawyers opposed to the unrepresented

Justice of Appeal Macfarlan with whom Justice of Appeal Tobias and Acting Justice of Appeal Sackville agreed said this in Serobian v Commonwealth Bank of Australia [2010] NSWCA 181 at [42]:

‘Where, as here in the case of the respondent, a party is represented by competent and experienced lawyers and is opposed by litigants in person, the party and its lawyers have a duty to assist the court to understand and give full and fair consideration to the submissions of the litigants in person. In particular such a party must refer the court to evidence in the proceedings that is relevant to those submissions. This duty is accentuated where, again as here, the party is a substantial institution accustomed to litigating cases involving issues such as are involved in the present case, often against litigants in person.’ Continue reading “Duties of lawyers opposed to the unrepresented”

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Prosecutors’ duties in professional discipline cases

There is an interesting article by Ian Wheatley at (2008) 16 Journal of Law and Medicine 193.  Titled ‘The Criminalisation of Professional Misconduct Under the Health Professions Registration Act 2005 (Vic): How is a Fine of $50,000 Not Punitive?’. It compares the rights of alleged criminals and the maximum sentences in criminal law, with the rights of doctors alleged in disciplinary proceedings to have committed disciplinary wrongs of a similar degree of seriousness, and pours some much-needed acid on the hymn sung by so many Bureaux de Spank that the proceedings are ‘purely protective of the public’ and involve no element of punishment.  But what protections actually exist for respondents in professional disciplinary proceedings?  It is the purpose of this post to examine three of them.

First, I have posted before about the application of the privilege against penalties to disciplinary proceedings, and about what Justice Finkelstein said in Australian Securities and Investments Commission v Mining Projects Group Limited [2007] FCA 1620:

‘I would hold that a regulatory body that brings a civil proceeding to recover a penalty is under an obligation similar to that owed by a prosecutor to an accused.’

Secondly, in addition to this principle, many bodies and statutory officers charged with prosecuting professionals are governed by the governments’ model litigant rules.  Victoria’s Legal Services Commissioner is a model litigant, and so is governed by these guidelines (which include an obligation to avoid litigation where possible, to keep the costs of litigation as low as possible, and not to take advantage of respondents to disciplinary charges who lack the resources to litigate the disciplinary claim).

But where a barrister is involved in the prosecution, it is, at least in Victoria, surely the application of the conduct rules in criminal proceedings which comes closest to requiring the kind of conduct which Justice Finkelstein considers to be appropriate.  And this is the third thing.  The Victorian Bar’s practice rules define ‘criminal proceedings’ as follows:

‘includes disciplinary proceedings, in which context other expressions appropriate to criminal proceedings include corresponding meanings appropriate to disciplinary proceedings and in particular “a serious criminal offence” includes a disciplinary shortcoming which, if proved, involves the serious possibility of suspension or deregistration (or the equivalent).’ Continue reading “Prosecutors’ duties in professional discipline cases”

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A new Australian legal ethics blog

A warm welcome to the blogosphere for the Queensland Law Society’s Ethics Blog, which is in its first posts, but attracts an impressive callibre of comments.  The blog has a post about a recent, rare, decision about those rules about what to do in litigation if you discover your client is lying, or you find that you have inadvertently misled the court: Perpetual Trustee v Cowley [2010] QSC 65.  The solicitor got it wrong, and copped a personal costs order.

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Civil Procedure Bill

The civil procedure landscape is changing fast.  A new Evidence Act.  The establishment of the Costs Court.  The Federal Court’s rocket docket.  The Supreme Court’s Commercial Court.  The abolition of the County Court’s Practice Court in favour of a managed list approach.  Early neutral evaluation.  The increasing use of Associate Justices and Judicial Registrars. The New Courts Act project, which will produce one Act regulating the Supreme, County and Magistrates’ Courts.  Now, here comes a big one: the Civil Procedure Bill, 2010.  There are similar moves afoot at the federal level: the Civil Procedure Bill, 2010 (Cth).

Here is Corrs Chambers Westgarth’s commentary on the Victorian bill. And here is Allens’s.  Lots of room here for a reinvigoration of the law of lawyers’ obligations to the Court. Justice Ipp’s ‘Lawyers’ Duties to the Court’ (1998) 114 Law Quarterly Review 63 ought to form the backbone of commentary to the Act, and ought to be compulsory reading for all those who join litigation departments.  This speech of the Federal Court’s Justice Barker in 2009 is also worth a look.

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Lawyer referred for appearance of complicity in husband client’s fraud on wife

In Lambert & Jackson [2010] FamCA 357, a Family Court judge sitting in Sydney made the following orders:

‘1. There be a further listing before me on 24 May 2010… for the purposes of giving Ms Y an opportunity to make submissions as to why I should not send my prima facie findings to the Legal Services Commission (Queensland) for the purpose of him considering whether to initiate and prosecute disciplinary proceedings against Ms Y.

2. Any affidavit evidence upon which Ms Y wishes to rely for the purposes of her submissions … is to be filed … [by] 21 May 2010.’ Continue reading “Lawyer referred for appearance of complicity in husband client’s fraud on wife”

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Honest and reasonable mistake as a defence to disciplinary charges

Senior Member Howell decided last year in Legal Services Commissioner v RMB [2010] VCAT 51 that there is a mens rea element to professional discipline offences under the Legal Profession Act, 2004, in that there is a defence of ‘honest and reasonable mistake’.  That fascinates me, since under the previous Act, misconduct and unsatisfactory conduct was often delineated by the presence or absence of knowledge that the conduct engaged in breached a norm of conduct. Conduct in ignorance of its wrongfulness was punishable as unsatisfactory conduct.  Now, though, there is no knowledge element built into the definitions of the 2004 Act, and there seems to be no particular reason why the concept of honest and reasonable mistake which has been imported from the criminal law, might not apply equally to cases of professional misconduct and unsatisfactory professional conduct. Continue reading “Honest and reasonable mistake as a defence to disciplinary charges”

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Lawyers’ duty to speak proper and be nice like

Update, 8 April 2010: The full-text version of Ms Jones’ article is freely available here.  See also this article published on the Queensland Law Society’s impressive website.

Original post: Nicky Jones has written a scholarly article about lawyers’ duty to remain courteous: Lawyers, Language and Legal Professional Standards: Legal Services Commissioner v Turley [2008] LPT 4, published at (2009) 28(2) The University of Queensland Law Journal 353-359. Volume 28(2) is in fact a special edition of that journal, entitled ‘Australian and New Zealand Lawyers: Ethics and Regulation’, and I am seeking out a copy.

For a scholarly treatment of what is and is not nice, like, I recommend the relevant bit of Julian Burnside QC’s Word Watching.  Ms Jones’ writing gives me a chance to link to one of my favourite legal documents, a submission by a Colorado lawyer to strike out a criminal charge against a young man who allegedly called his principal a ‘fucker, a fag, and a fucking fag.’  Here is a flavour:

‘In order to provide a context for the alleged crime, we must first examine the history of Fuck and its evolution in society. Fuck’s earliest recorded use is prior to the year 1500 from the English-Latin poem Flen Flyys: “Non sunt in celi quia fuccant uuiuys of heli,” which traslates to “they are not in heaven because they fuck the wives of Ely.” See www.wikipedia.org/wiki/fuck. Continue reading “Lawyers’ duty to speak proper and be nice like”

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The obligation not to allege ‘fraud’ without an appropriate evidentiary foundation: what is ‘fraud’?

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 [2010] 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’?”

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$19,500 fine for making complaint against lawyer without adequate evidentiary foundation

A Full Court of the Supreme Court of the Northern Territory delivered judgment in AM v Legal Practitioners Disciplinary Authority [2010] 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 [141] 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.’

Continue reading “$19,500 fine for making complaint against lawyer without adequate evidentiary foundation”

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‘Snapping on’ judgment in default

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 [2011] 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”

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VCAT explores definition of professional misconduct at common law unconnected with legal practice

In Legal Services Commissioner v RAP [2009] 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”