Statutory powers of compulsion to be invoked reasonably

Justice Pagone considered the Commissioner of Taxation’s invocation of a power to compel the production of documents and information (s 264(1)(b) of the Income Tax Assessment Act 1936 (Cth)). In this case, the subject of the compulsion was the Law Institute, more used to flinging such powers around itself.  Legal regulators not infrequently list poorly formulated allegations drafted by angry laypeople and then requiring ‘a full written response’ from lawyers.   Sometimes, requiring a ‘full written response’ is specifically contemplated by statute (e.g. s. 4.4.11(1)(a) of the Legal Profession Act, 2004, which is about investigating disciplinary complaints) but sometimes it is not (e.g. s. 7.2.7 of the same Act, which relates to investigations of offences against the Act).  If the response is not ‘full’ in the way the regulators think about ‘fullness’, the respondents risk being convicted of the crime of non-cooperation (seriously: see s. 7.2.7(1)).  His Honour cautioned regulators and said they must use such powers ‘wisely and responsibly’: Continue reading “Statutory powers of compulsion to be invoked reasonably”

The disgruntled beneficiary and the executor’s lawyer

Imagine this.  A beneficiary thinks a trustee is diminshing the trust estate by spending too much on lawyers. They have no standing to seek a taxation of the trustee’s solicitor’s bill, and the trustee’s solicitor’s file is unavailable to them by virtue of legal professional privilege enjoyed by the trustee.  The beneficiary has no contractual or equitable relationship with the solicitor.  You might think they’re rooted.  But you would be wrong, for the beneficiary may apply to VCAT’s Legal Practice List for an order that the solicitor pay to the disgruntled beneficiary that beneficiary’s share of so much of the fees properly and reasonably charged by the solicitor on instructions as represents the difference between what a reasonable trustee would have spent and what the trustee, perhaps over-anxious by disposition, in fact spent.  So says VCAT’s Legal Practice List’s decision in Sinni v DO [2009] VCAT 135.  I should disclose that I appeared in a directions hearing in this matter. Continue reading “The disgruntled beneficiary and the executor’s lawyer”

The Tax Man, the Law Institute, and the public interest

Update, 14 May 2009: Justice Pagone has given a second judgment determining this dispute, which I posted about here.

Original post: Justice Pagone gave judgment in Law Institute of Victoria Limited v Deputy Commissioner of Taxation [2009] VSC 55 on 26 February 2009. His Honour noted, as ‘trite’, that the Tax Man’s power of compulsion, found as it is in a Commonwealth statute, trumps by virtue of s. 109 of the Commonwealth Constitution the obligation in the Legal Profession Act, 2004 (Vic) on the Law Institute to keep information obtained by it in carrying out its functions secret.  And that the Tax Man’s power is subject to public interest immunity.  But his Honour said the immunity needed to be considered document by document, and could not be claimed only by virtue of the characteristics of the person in possession of the information, in this case the Institute.

Three things which seem yet to be discussed at this point in proceedings interest me, in addition to the obvious issue of the future prospects of the Law Institute’s vigorous pursuit of the public interest by the non-provision of information and documents. But unless you’re a lawyer regulation geek, you might want to skip the next few paragraphs and continue reading from there, where the less arcane aspects of the judgment are further summarised. Continue reading “The Tax Man, the Law Institute, and the public interest”

Byrne v Marles reversed by legislation

I wrote about Byrne v Marles [2008] VSCA 78 here, and suggested reversal by legislation as a possible outcome.  The government slipped the Professional Standards and Legal Profession Act Amendment Act, 2008 through pretty quietly.  Two new sub-sections in the Legal Profession Act, 2004 add to the existing parent sections that nothing within them gives lawyers a right to be heard in relation to how a complaint is to be dealt with, or whether it should be summarily dismissed.  The relevant sections including their additions are set out below, and apply to complaints received by the Commissioner after 11 December 2008. I suggest that regardless of whether the Commissioner has an obligation to invite lawyers to do so, they should often take up these issues at the outset to ensure that there is in fact a valid disciplinary complaint, that its boundaries are clear and not exceeded, and that the Commissioner does not otherwise act without power.

Continue reading “Byrne v Marles reversed by legislation”

Beak bribe boast bars barro

Legal Services Commissioner v JDG [2008] LPT 17 is a shocking case in which a Queensland barrister was struck off after he lied when confronted by investigators with the true proposition that he had offered to pay a $50,000 bribe to a Magistrate or Crown prosecutor on behalf of a client.  He also took $59,000 in cash from the direct access client and popped it into his safe.  He used some of it to feed his gambling.  He should, of course, have chucked it into a special account.  He told his client that: Continue reading “Beak bribe boast bars barro”

Some law on the Commissioner’s powers to delegate

The nature of a delegation was described in B (A Solicitor) v Victorian Lawyers RPA Ltd (2002) 6 VR 642 by counsel and repeated without disapproval by Justices of Appeal Charles and Batt:

‘a delegate acting is not an agent who exercises the [delegator’s] powers but rather, as the new repository of the powers, exercises his own powers as a delegate.’

The same judges explained the purpose of requiring delegations to be in writing:

‘In the circumstances the legislative purpose of permitting a delegation of the functions and powers to be exercised after completion of an investigation, but requiring such a delegation to be in writing, seems to us to be reasonably apparent.  We would accept the appellants’ submissions in this regard, that the requirement of a writing protects the interests of all parties concerned.’

Of course that must be so.  Those who seek to exercise invasive statutory powers, as trust account inspectors do, should carry around the original instruments of delegation with them in their briefcases.  That’s what used to happen in the old days. Continue reading “Some law on the Commissioner’s powers to delegate”

Victorian judges more amenable to sophisticated costs orders in cases of partial success only

Update, 4 May 2009: For an example of these principles in operation in a professional negligence case in which proportionate liability was given effect to (I posted about the main decision here), see Sali v Metzke & Allen (No. 2) [2009] VSC 169, where the successful plaintiff’s costs were reduced by 30% because they raised and failed on numerous issues (and also because, reading between the lines, Justice Whelan was not very impressed by one of the plaintiff’s witnesses).

Original post: Costs have traditionally followed the event. Put up 5 reasons why you should get damages and win on 1 of them, and the starting point has been that you get the costs of the whole proceeding, including of the 4 causes of action which failed. Recent decisions of a Full Federal Court constituted by Victorians and of the Supreme Court have clearly signposted a desire in eminent Victorian judges to get sophisticated about costs so that claimants who propound claims which fail do not get (and may have to pay) the costs of doing so, even if they ‘win the case’. (This might be a good time for solicitors to think about amending that part of their standard costs disclosure letters which deals with s. 3.4.9(1)(g) of the Legal Profession Act, 2004 — range of costs likely to be recovered from the other side if successful.) Justice Robson’s 13,000 word decision on costs in GT Corporation Pty Ltd v Amare Safety Pty Ltd (No 3) [2008] VSC 296 may set a record for such judgments. Certainly, I would be surprised if there were another costs ruling with a table of contents. This is one conscientious judge. At [56]ff, his Honour said:

Continue reading “Victorian judges more amenable to sophisticated costs orders in cases of partial success only”

Is interest a form of relief VCAT can grant?

In a long-wnded way, I tentatively suggest that, so long as the applicant has the sense to invoke s. 108 of the Fair Trading Act, 1999, then penalty interest is available under the Supreme Court Act, 1986, just like in the Supreme Court, so long as the dispute is a consumer-trader dispute. That is, a dispute between a purchaser or potential purchaser and a supplier or potential supplier of goods and services, broadly defined. There are some causes of action which come with specific interest provisions too, like the one attached to costs disputes under the Legal Profession Act, 2004.

Continue reading “Is interest a form of relief VCAT can grant?”

VCAT rewrites unrepresented man’s misconceived application

Slobodan Catovic did not want to pay his solicitor’s bill. He misconceivedly invoked the Legal Profession Act, 2004 provision which allows clients to apply to set aside costs agreements, but that is not what he wanted to do. Senior Member Howell satisfied himself that Mr Catovic had intended to bring an application under the Fair Trading Act, 1999, and ordered that the application be treated as a small claim under that Act. He even told the Registrar to refund Mr Catovic the difference between the fee on an application to set aside a costs agreement and the paltry fee payable on the institution of a small claim under the Fair Trading Act, 1999. See Catovic v H Solicitors [2008] VCAT 840. On the propriety of the cross-fertilisation of VCAT’s jurisdictions, see also this post.

Court of Appeal wreaks havoc with most current Legal Services Commissioner investigations

Update, 2 September 2010: Just noticed this and thought to store it away here as potentially interesting:

Update, 7 August 2010: The saga continues.  See this post.

Update, 17 June 2008: The Age has caught up with this story. It’s a funny old article. Weirdest is this comment ‘A prominent senior counsel said the system was unfair, and any complaint should be forwarded immediately to the subject of the complaint.’ In my experience, the Commissioner does almost invariably send the complaint immediately to the solicitor, and that’s not what the case was about anyway.

Original post: In Byrne v Marles [2008] VSCA 78, the Court of Appeal has thrown a very lean cat amongst some very fat pigeons in a decision which may invalidate all current investigations of the Legal Services Commissioner unless it is overturned on appeal or remedial legislation is passed with retrospective effect (which was the response after the great delegation debacle). The Court found that the Commissioner’s referral to the Law Institute for investigation of what she characterised as a disciplinary complaint was ‘invalid’. In following her absolutely standard practice, the Court said the Commissioner had failed to give natural justice to the solicitor by deciding to characterise the complaint as a disciplinary rather than civil complaint and by deciding not to dismiss it summarily without investigation, without allowing the solicitor to be heard in relation to those preliminary decisions. Anyone — complainant or lawyer — who has a current complaint which is not heading in the desired direction should seek advice from a lawyer with expertise in relation to the professional discipline of lawyers. It is conceivable that the decision may provide options for those against whom professional discipline prosecutions have succeeded under the Legal Profession Act, 2004. Given that the Commissioner never, in my experience, invites discussion about the preliminary questions of whether to dismiss the complaint before commencing an investigation, or on the proper characterisation of the complaint, it seems likely that most of the Commissioner’s decisions to investigate complaints will be ‘invalid’. Continue reading “Court of Appeal wreaks havoc with most current Legal Services Commissioner investigations”

Megafirm partner who stole to make budget gets his ticket back after long holiday

The latest application for review of a decision of the Legal Services Board decision not to grant a practising certificate was in the matter of DAP v Law Institute of Victoria [2008] VCAT 688. The 57 year old solicitor and former Melbourne Cricket Club Committee member was a property lawyer at one of Melbourne’s megafirms for about 27 years, many of them as a partner. Over the last nine of those years, he committed various acts of professional misconduct associated with the firm’s trust account. Of course the megafirm was not always a megafirm. The solicitor was for most of his career in one of the firms swallowed up into the megafirm. Justice Betty King, in the solicitor’s criminal prosecution said:

‘6. The [offences] are at the lowest end of the scale of offences of this nature. The total involved was just over $9,000 and it was not money that at any stage was ever to be for your own spending. The money was directed into meeting the targets set by your firm for your department. All firms have become hard-headed businesses, with targets and budgets and six minute units which, I add, is, in my view, driving young lawyers out of the profession at a very rapid rate. You, unfortunately, had commenced practice when it was a profession and unlike its current incarnation. It would, of course, have been preferable to have approached your other partners and indicated that it was not possible to meet the budget that had been set for you and suffered the consequences of not meeting that budget. Instead, you chose this course of conduct, the one of stealing money from those accounts. That has resulted in far worse consequences for you, your wife, your children and the community that you had previously served so well. Continue reading “Megafirm partner who stole to make budget gets his ticket back after long holiday”

VCAT cancels bill and leaves solicitor wholly unremunerated for sloppy work

Praag v W & T Lawyers [2008] VCAT 307 was a rare thing: a case in VCAT’s Legal Practice List actually prosecuted pursuant to the Legal Profession Act, 2004. Mr Praag was his late mother’s executor. Before her death, she lived in Canberra. Her assets were a house in Canberra and $50,000 cash. Mr Praag went to the respondent solicitors who said they would get probate of the will for $2,800. The scale cost for doing so was $499. They did not otherwise comply with the costs disclosure regime in the Legal Profession Act, 2004. In fact it was unnecessary to get probate in Victoria, and it would have been better to have got it in the ACT. Though Mr Praag was able to withdraw the cash from the Bank with the Victorian parchment, he was unable to deal with the house unless he resealed the probate in ACT, which cost a bit extra on top of the cost of getting probate. Member Butcher mentioned several ‘concerns’ he had before concluding: Continue reading “VCAT cancels bill and leaves solicitor wholly unremunerated for sloppy work”

WARNING: costs agreements and bills require amendment

Since 6 December 2007, the maximum interest chargeable on bills has dropped from 12% (the penalty interest rate) to the Reserve Bank Target Rate +2% (at the time of writing 8.75%), and the period of non-payment after which you can begin charging has changed too. You need to amend your bills because if you don’t put the right statement on them, you won’t be able to recover interest unless you dream up some sophisticated arguments. In the case of ongoing retainers, you probably need to send the first new bill of the new regime under cover of a letter advising a change in the rate applicable to unpaid bills. Otherwise, you might fall foul of the ongoing obligation to disclose any substantial changes to anything previously disclosed.

You do not have to express the interest chargeable as a percentage rate per annum. In my experience, the only time anyone ever charges interest is when suing for fees, after the relationship has broken down, or demanding payment of fees as a condition of staying on the record or giving up a file subject to a lien. Perhaps that was because the rate was so punitively high, and perhaps because too few people knew about the penalty interest rate calculator on the internet. Why not set a lower rate which is dead easy to calculate and actually make a habit of collecting interest? So long as the rate you are effectively charging works out lower than what you would charge if you charged the maximum annual percentage rate over the same period, you’ll be sweet. Read on to find out the answer to the questions someone in your firm is sure to ponder at some stage in the future: does it apply to bills given before 8 November 2007? Does it apply in retainers in which instructions were first taken before that date?

Continue reading “WARNING: costs agreements and bills require amendment”

How to calculate interest on post-5 December 2007 bills in Legal Profession Act, 2004 (Vic.) matters

What follows assumes that you have not made any special agreement in a costs agreement, and so the default position applies. It is truly an idiot’s guide because (i) I have great sympathy for people who have difficulties with numbers, and (ii) I well remember how grateful I was when a partner of Middletons, Mark Howard, showed me as an articled clerk how to calculate penalty interest. Continue reading “How to calculate interest on post-5 December 2007 bills in Legal Profession Act, 2004 (Vic.) matters”

Cases, cases

Update, 19 February 2008: Fellow Melbourne law blogger Legal Eagle has kindly written a case note on Equuscorp v Wilmoth Field Warne.

Update, 21 December 2007: Another two advocates’ immunity cases:

1. Symonds v Vass [2007] NSWSC 1274, 36,000 words, after nearly 3 weeks of trial. See Ysaiah Ross’s case note in his article in The Australian on 30 November 2007 titled ‘Let’s Dump Advocates’ Immunity’.

2. Mallik v McGeown [2007] NSWSC 1414.

Update, 19 December 2007: Fellow Melbourne law blogger Legal Eagle has done an excellent case note on the first case referred to below, saving me the trouble.

Original post: The Supreme Court and Court of Appeal is dropping cases on this blog like no tomorrow. I can’t keep up, so I will just bring them to your attention for the time being:

1. Re Legal Practice Act 2004; re OG, a lawyer [2007] VSC 520, in which the Court of Appeal today struck off the roll a barrister whose disclosure to the Board of Examiners about an allegation at university that he cheated on an assignment was found to be a lie. Legal Eagle provided a long note of the case here. In other news, a famous American judge, Richard Posner, wrote a book on plagiarism. He blogs too. Update: 29 January 2008: And compare this American case (In the Matter of Willie Jay White, Supreme Court of Georgia) about an applicant for admission to practice which was denied because his explanation for curious similarities between his work and another’s at law school was not believed.

2. Equuscorp Pty Ltd v Wilmoth Field Warne (a firm) [2007] VSCA 280, a case about whether estoppel by convention could operate against the prima facie disentitlement in a solicitor to recover fees under a void costs agreement, and about where exactly the dividing line is between a void and a good costs agreement. It is the latest in a long saga.

3. Coadys (a firm) v Getzler [2007] VSCA 281, a case covering much the same territory as the Equuscorp Case. This case and the previous one will be very important for the interpretation of the Legal Profession Act, 2004‘s costs provisions.

4. Francis v Bunnett [2007] VSC 527, in which Justice Lasry dismissed an application for summary judgment by reference to advocates’ immunity in a classic regretted settlement case. That is, his Honour was not persuaded of the hopelessness of the client’s argument that where there has been no adjudication after a trial, there is no finality of the kind protected by the immunity which is worthy of protection. It is notable that a number of cases which have gone the other way are not mentioned in the judgment.

5. MM&R Pty Ltd v Grills [2007] VSC 528, a decision of Justice Cavenough yesterday about the availability of advocates’ immunity as a defence to a suit alleging simple delay, and where there has been no adjudicated decision of a court worthy of protection. His Honour recognised that the immunity applied in such circumstances.

It will be interesting to read the two advocates’ immunity decisions more carefully, and tease out to what extent they are consistent with one another.

Sudden eruption of unconscionability amongst solicitors further documented

Updated, 4 January 2008: See the underlined additions below (with thanks for the references to Jason Pizer’s book at p. 246).

Original post: Now two unrepresented folk have managed to convince VCAT’s Legal Practice List’s Member Butcher in a Fair Trading Act, 1999 claim that yet another solicitor has been acting unconscionably towards his clients in relation to fees. The decision in Alexander v HWL [2007] VCAT 2297 (and two earlier decisions posted about here and here and here) suggests two separate schisms between VCAT’s decision makers:

  • The first between those who hold that solicitors engage in trade or commerce when they provide professional services to clients (such as Member Butcher) and those who hold that they do not (such as Senior Member Howell and Deputy President Steel); and

Why you needn’t call a solicitor an ‘Australian legal practitioner’

Update: The nice thing about blogging compared with, say, writing a book (not that I would know) is the interactivity.  Lawyers are obviously still a bit chary of the comment function, given how many of them email me rather than comment.  Nothing prompts the sharpening of e-pencils quite like an error, and it seems I have made one, in an article, ironically, about errors of exactly the same species.  To stem the deluge of correspondents (which stands at 2) let me recognise that ‘beaks’ are not, in common parlance, lawyers, but Magistrates, and judges, possibly even tribunal members.  I am not convinced that all of the guests on 3RRR’s Lawyers Guns & Money’s impossibly amusing ‘Beak of the Week’ segment were such folk, but then again, that was a long time ago.

Original post: Often enough, I see pleadings against barristers, and against solicitors, which recite that the defendant is an Australian legal practitioner within the meaning of the Legal Profession Act, 2004. I am often unsure why. I think it would be fine to plead that the defendant is a solicitor, or a barrister. The other day, I came across a decision of Justice Byrne which considered a somewhat analogous question in a completely different context: Smith v Harris [1996] 2 VR 335. It reassures me that changes in statutory language need not necessarily affect the use in the law of ordinary language: see below. But there are moments when the language of the Act should be pleaded, and when you must, as a matter of law, call yourself an Australian legal practitioner rather than any old beak. Continue reading “Why you needn’t call a solicitor an ‘Australian legal practitioner’”

Legal Practice List guru to give VCAT seminar

There’s a seminar coming up in exactly a week’s time at the Law Institute at which Alan Hebb is going to speak on disputes in VCAT’s Legal Practice List. He’s a good bloke and has more experience there than anyone else. He was very often briefed as Counsel Assisting the Tribunal, both at the Legal Profession Tribunal and at VCAT. Speaking generally, ‘Counsel Assisting’ are generally cast in the role of prosecutors. It is usually an office associated with disciplinary prosecutions and royal commissions. Though the old Tribunal, and now VCAT have important disciplinary jurisdictions, this was not Alan Hebb’s role.

Until very recently, when the practice was — so I hear — abandoned, Counsel Assisting were briefed by Legal Practitioners Assisting the old Tribunal, and then by Legal Practitioners Assisting VCAT’s Legal Practice List, to take otherwise unrepresented claimants through their evidence and cross-examine lawyers in professional negligence claims under the Legal Practice Act, 1996 and then the Legal Profession Act, 2004. They did not act for the claimants though, and were proscribed by the terms of their brief from giving legal advice. I hear too that the Legal Practitioners Assisting the Legal Practice List are no longer employed in that capacity.

One might think these two developments to be a terrible thing which has quietly slipped under the radar. In the case of the office of Counsel Assisting, I am not so sure, not because of any deficiency in those who held the office, who did a very diligent job fairly in often difficult circumstances, but because of what I perceive, at least in some cases, to be a structural difficulty with the whole concept of ‘counsel assisting’ a civil tribunal hearing a private civil dispute.  I think it comes down to this: if the aim was to even up the playing field between unrepresented claimants and solicitors, perhaps what needs to happen is to simply pay for a barrister to appear for the claimant.  That may be politically impossible, and would amount to an ad hoc form of legal aid. Here’s why I think that, based on years of experience. Continue reading “Legal Practice List guru to give VCAT seminar”

Victorian Legal Services Commissioner’s 2006-2007 annual report

The Legal Services Commissioner’s annual report went online today. You can download the pdf by clicking here. The big news is that she’s put 2 new blokes on the staff, but the blokes to sheila ratio has actually decreased (to 1 in 20).

In the year to 30 June 2007, the Commissioner’s staff of 45 (including 6 part-timers) closed 2550 files. At the end of the disciplinary complaint process, the Commissioner has to decide whether the complaint is made out, unless it was summarily dismissed earlier. The test is whether VCAT would be reasonably likely to find a practitioner guilty of professional misconduct or unsatisfactory professional conduct. 5,089 enquiries gave rise to 1,487 disciplinary complaints, yielding a single instance where the Commissioner thought it was reasonably likely that VCAT would find the practitioner guilty of misconduct, and that was the matter reported in my previous post in which the barrister made a full confession from the outset of the investigation. The three other misconduct prosecutions were for failure to cooperate with the Commissioner’s investigations.

The 1,487 disciplinary complaints also yielded 64 instances where the Commissioner thought it was reasonably likely that VCAT would find the practitioner guilty of the lesser disciplinary offence of unsatisfactory conduct. She has a discretion whether to prosecute in these instances. She exercised that discretion in favour of laying charges just once, when some scamp attempted to charge for storage or retrieval of documents without a written agreement by the client. So 2 charges were laid as a result of the 5,089 enquiries. Additionally, 3 charges were laid because of non-cooperation with investigations. And 28 slaps over the wrist were privately inflicted in the form of reprimands and cautions. So: pity the professional discipline Bar, all hail to an unprecedentedly well behaved profession, and shame on the great unwashed for making all those hurtful allegations which went nowhere and cost the revenue $7 million. Continue reading “Victorian Legal Services Commissioner’s 2006-2007 annual report”

Withdrawing complaints under the Legal Profession Act, 2004

In the Victorian Legal Services Commissioner’s 2006-2007 annual report, she makes the following points about withdrawing complaints under the Legal Profession Act, 2004:

  • civil complaints and disciplinary complaints alike may be withdrawn;
  • if a civil complaint which is characterised as a costs dispute is withdrawn, any costs paid into trust at the outset must be paid to the lawyer;
  • if a disciplinary complaint is withdrawn, the Commissioner may nonetheless continue to investigate the conduct of the lawyer.