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All-new High Court to hear advocates’ immunity appeal

The plurality judgment in the last decision of the High Court squarely about the advocates’ immunity was written by Chief Justice Gleeson and Justices Gummow, Hayne and Heydon JJ.  They have now retired from the Court.  As have the other judges who constituted the Court in D’Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; 223 CLR 1, Justices McHugh, Kirby and Callinan.  Now, a Court constituted by a selection of the current justices (Chief Justice French and Justices Kiefel, Bell, Gageler, Keane, Nettle and Gordon) will hear an appeal from the New South Wales Court of Appeal’s decision in Jackson Lalic Lawyers Pty Ltd v Attwells [2014] NSWCA 335 (trial judge’s decision here, and special leave application transcript here: the application was heard by Justices Bell, Gageler and Gordon, and the appellant’s counsel was R. D. Newell), and the appeal seems set to be heard in November.  Lawyers allegedly negligently settled litigation, were sued for damages, and successfully invoked advocates’ immunity.

I have been thinking about these questions for a long time and many times as a lawyer representing solicitors and barristers, called on the immunity successfully.  I published the concisely titled ‘Compromise of litigation and lawyers’ liability: Forensic immunity, litigation estoppels, the rule against collateral attack, confidentiality and the modified duty of care’ in 2002 at 10 Torts Law Journal 167 and would be happy to provide a copy upon request.  I was also in the High Court for argument of D’Orta-Ekenaike’s Case as one of the barrister respondent’s instructing solicitors.  I might even pop up to Canberra to watch the argument in this latest case.

It was third time lucky for a leave application in this kind of case, after the Court declined special leave in Young v Hones [2015] HCASL 73 (6 May 2015, Bell and Gageler JJ) and Nikolidis v Satouris [2015] HCASL 117 (4 August 2015, Nettle and Gordon JJ (‘Given the procedural history of those initial proceedings, including that the applicants agreed to settle those proceedings, the present case does not provide an appropriate vehicle for reconsidering [the immunity]’).

In the Court of Appeal, Chief Justice Bathurst, with whom Justices of Appeal Meagher and Ward agreed, reversed the decision of Harrison J.  The trial judge was quite frank: he said in a cri de cœur which met with little sympathy on appeal:

‘Notwithstanding all of the above, there remain at least two related matters that in my opinion are particularly troubling in this case, and which directly intersect with the way in which I am able to dispose of this application. The first matter is the apparent or potential strength of the plaintiffs’ allegations that the defendants have been negligent. As I have already commented, the plaintiffs would have been substantially better off if they had simply not defended the proceedings. The predicament that the judgment created for them is difficult to explain but even more difficult to understand. It is also difficult not to have a sense of unease about the possibility that an egregious error may go without the prospect of a remedy.’

Even if the immunity is not abolished, the decision has the potential to radically re-write the immunity landscape.  The other thing it will do is promote discussion of the immunity, see good people marshalling the increasingly excellent arguments in favour of its abolition, and provide the possibility (again) for legislative amendment or abolition.

What has happened since D’Orta-Ekenaike’s Case?  My (admittedly somewhat) Victorian-centric thinking suggests the following: Continue reading “All-new High Court to hear advocates’ immunity appeal”

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Unqualified costs consultants

There has been another challenge to the legality of the work done by non-lawyer costs consultants.  It did not go anywhere because of deficiencies in the way the client (himself a lawyer) went about trying to prove in the Magistrates’ Court that the costs consultant in question (a struck off lawyer) had engaged in unqualified practice, and because of the limited nature of an appeal from a Magistrate. The Supreme Court’s judges also emphasised the exactness of proof necessary to establish a breach of s. 2.2.2 Legal Profession Act 2004‘s prohibition on unqualified practice, given that it sets up an indictable criminal offence punishable by up to 2 years’ jail.  Such exactness is needed even in civil proceedings which obviously do not carry criminal consequences.

But as three judges of the Supreme Court made clear, all this means is that this was not the vehicle to decide just how much non-lawyers are permitted to do in the realm of costs law, and subject to what level of supervision by a lawyer, and there is little solace for unqualified costs consultants in the judgments.

The reasons of the Court of Appeal for not granting leave to appeal the Supreme Court’s dismissal of an appeal from a Magistrate are: Defteros v JS [2014] VSCA 154.  They are interesting for three reasons:

1.  They endorse comments made by the Costs Judge in a June 2010 decision as to the need for consideration of reform of the ‘mini-industry’ of costs consultants (Kaye J did so at [2014] VSC 205 at [85] and Santamaria JA (with whom Neave JA agreed) did so at [2014] VSCA 154 at [21]);

2.  They record an interesting submission of counsel, namely that the solicitor client was relying on his own contempt of the Supreme Court by asserting as a defence to a suit for fees a statutory prohibition on the recovery of money charged for the provision of legal services in contravention of the prohibition on unqualified practice — the contempt arose, so the argument ran, because the solicitor well knew at all relevant times that the costs consultant was not a practising certificate holder, and so had permitted the costs consultant to engage in unqualified practice if it had occurred, contrary to s. 2.2.10 of the Legal Profession Act 2004; and

3.  They emphasise the modern trend of leaving to the Costs Court questions which have traditionally been dealt with by certificates of the trial judge (e.g. certification for two counsel).

It will not be too long before someone takes a grip of this issue and runs a test case carefully.  An alternative battle ground might be found if the unqualified costs lawyers seek to influence the makers of the forthcoming Uniform Rules of professional conduct so as to provide an exemption for unqualified costs lawyers from the prohibition on unqualified practice: see s. 10(3), Legal Profession Uniform Law (Vic).  That seems to me to be the most efficient means of resolving the question.  In my books, if there is to be a place for the continued operation of unqualified practitioners there may be a case for restricting the exemption from unqualified practice to existing practitioners and closely defining the permissible ambit of their activities, perhaps to party-party disputes. Continue reading “Unqualified costs consultants”

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Client obtains Anton Piller order over solicitor’s hard disk in fees dispute

Ho v Fordyce [2014] NSWSC 1404 is a decision in an ex parte application of which the solicitor had no notice and did not participate. There is a dispute between solicitor and client in relation to fees.  The client contended that costs agreements relied on by the solicitor were ‘a recent invention’.  Given that the client asserts that there was no costs agreement, presumably the implication is that someone forged the documents relied on by the solicitor.  The client applied for an Anton Piller-like order allowing IT people to march into the solicitor’s office and copy certain contents of the solicitor’s hard disk in order to preserve evidence which may assist in proving the implied fraud.

In a brief judgment given ex tempore, Rein J granted the application, relying on a decision of the Victorian Supreme Court’s Justice McMillan. The question of the likelihood of privileged material being present on the firm’s computers is not something discussed in the reasons.  It may well be dealt with in the order, which is not reproduced in the reasons. I have never heard of any such application having been made by a client or granted against a solicitor in such circumstances before.

What his Honour said was:

’10  I do not wish to suggest that I am satisfied at this stage that there has been any false creation of documents. Rather there is a contention that it has occurred, and there is some support for that possibility in the evidence which has been presented. If it has occurred it will be difficult to prove and, if the secrecy of this application were not preserved until the point at which someone independent is at the office to obtain copies, the opportunity to establish that there has been recent creation (if that be the fact) will be lost.

11  In other words, for the plaintiff to have to present a normal application for discovery may act to the disadvantage of the plaintiff forensically and, accordingly, in circumstances where (a) the ambit of information which is sought is very narrow and (b) the consequences of the making of these orders will be of very limited effect, if it turns out that there has been no recent creation, weighs in favour of the making of the order.’

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What does an indemnity costs order actually get you?

On 3 October 2014, Besanko J decided in Bob Jane Corporation Pty Ltd v ACN 149 801 141 Pty Ltd [2014] FCA 1066 that an order of a fellow judge that one party pay the other’s costs on an indemnity basis, which did not specify that the costs were to be assessed by reference to the successful party’s costs agreement with its solicitors, entitled it to costs assessed on that basis.

The Federal Court is therefore a better place to get an indemnity costs order than the Supreme Court because the law in the Supreme Court, as determined by the Costs Judge,  is that the beneficiary of an indemnity costs order gets costs assessed according to the same scale as ordinary costs are assessed by reference to, but with an easier road to showing that the costs incurred ought to be paid by the other party at all: ACN 074 971 109 as trustee for the Argo Unit Trust v National Mutual Life Association of Australia Limited [2013] VSC 137.

In the Supreme Court, of course, a special costs order allowing costs to be taxed by reference to the costs agreement may still be sought, and obtained, e.g. Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 3) [2012] VSC 399.  But that is the exception rather than the default, and one which many trial counsel may not be aware of.

So badly do many trial counsel deal with the question of costs that it really would not be a bad idea if litigants got advice more often than they do from costs lawyers before costs fell to be argued in any case in which there are substantial costs and fault in the costs sense on both sides, or a number of interlocutory costs issues remaining for determination.

Mind you, according to Besanko J, it has long been thus.  His Honour pointed to Beach Petroleum NL v Johnson (1995) 57 FCR 119 at 121 (per Von Doussa J) and older cases from other jurisdictions.

This case demonstrates that ultimately what determines questions of costs is always the statutory instrument which provides for them.  Increasingly, one jurisdiction’s jurisprudence will not prove persuasive in relation to different statutory regimes.

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What orders ought follow the setting aside of a costs agreement?

BGM v Australian Lawyers Group Pty Ltd [2014] WASC 290 (S) is a decision confined to questions about what ought to follow from a Court coming to a view that a costs agreement ought to be set aside.  Three matters are of interest:

1.  The Court took the view that it followed as a matter of statutory construction that upon a costs agreement being set aside, bills rendered pursuant to it were of no force and effect, and declined to make a declaration to that effect because it was unnecessary.

2. Though the Court assumed that some form of restitutionary relief would entitle the applicant to repayment of monies paid under such bills, the Court declined to make any such order because no such relief had been pleaded in the originating process.

3.  The Court declined an application for costs by the successful applicant for the setting aside of the costs agreement.  It did so on the basis that there was a Calderbank offer to accept a sum of money in satisfaction of the lawyers’ claim to fees.  The applicant argued that it had succeeded in the application to set aside the costs agreement and that the Calderbank offer should be brought to bear in the subsequent phase of ascertaining the fees against a scale which applied in default of the costs agreement having application.  But the Court reserved the question of the costs of the application to set aside the costs agreement pending the finalisation of that second phase.

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Solicitor’s creditors statutory demand set aside because of alleged non-compliance with costs disclosure obligations prior to settlement of client’s case

In IMO Speedy Loans Pty Ltd [2014] VSC 273, a Victorian law firm delivered a creditors statutory demand to a company which was its former client.  The client convinced Gardiner AsJ to set it aside exclusively by reference to an argument that by virtue of s. 3.4.17(1) of the Legal Profession Act 2004, the client was not yet obliged to pay the fees, no taxation (‘costs review’) having yet occurred.  That was because there was an alleged failure to comply with the s. 3.4.16 requirement to provide costs estimates prior to the negotiation of the compromise of a litigious proceeding.

The lawyer involved swore that he had done so orally and the client swore that the lawyer had not. There was, accordingly, a genuine dispute as to the indebtedness of the company and the statutory demand had to be set aside. Lesson: give written disclosures even when writing is not specifically required.  And be very sure of perfect compliance before suing for fees or issuing a creditors’ statutory demand.  Otherwise, seek taxation of your own costs, following which the Costs Court will ordinarily make an order for payment of the taxed sum (or simply write off the fees as uncommercial to recover).

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Is solicitor-director of ILP which acted for him to be treated as self-represented?

A NSW solicitor was partially successful in a defamation suit.  But for the circumstance that he had retained an incorporated legal practice with which he was associated and for part of the time the director and the file handler, the Court was willing to order the defendant to pay his costs on an indemnity basis.  In respect of the period in which the solicitor was — the fictions of corporations law aside — substantially self-represented, his costs were ordered to be assessed on the ordinary basis.   What McCallum J said in McMahon v John Fairfax Publications Pty Ltd (No 8) [2014] NSWSC 673 is:

Continue reading “Is solicitor-director of ILP which acted for him to be treated as self-represented?”

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Self-represented solicitor guilty of misconduct for breaching a rule expressed to regulate conduct when acting for a client

A Western Australian disciplinary case, Legal Profession Complaints Committee v CSA [2014] WASAT 57 is interesting in a number of ways. A criminal lawyer was the manager of a strata corporation.  She owned two units and the complainant the third. The complainant affixed an airconditioner to a wall which impeded on a common area.  She sought legal advice.  Her lawyers wrote a letter of demand to the complainant and charged a few thousand dollars.  The complainant did not fix the problem within the 14 days demanded, so the lawyer sued in the Magistrates’ Court.  The case was settled on the basis that the airconditioner would be relocated and the lawyer withdrew the proceeding without seeking costs.  When the complainant sold the third unit, the lawyer demanded that the complainant pay her the few thousand dollars her lawyers had charged her for the advice and the letter of demand.  She did so by a letter of demand drafted for her by another lawyer, though the involvement of this second lawyer only emerged at the disciplinary hearing. When the complainant did not pay up, she sued for them in her personal capacity.  The suit was found to have no legal foundation, but the lawyer said that she mistakenly thought that it did have a legal foundation, and that civil proceedings were not her thing. The case says:

1.  The suit was an abuse of process because there was no legal foundation for suing for the recovery of ‘pre-litigation’ legal costs.

2.  The lawyer’s conduct in threatening to bring and then bringing a suit which was an abuse of process was common law misconduct but was also a breach of a rule which prohibited lawyers from claiming on behalf of a client costs in a letter of demand for recovery of a debt because she was acting for herself in writing the letter (even though no legal letterhead or reference to her status as a lawyer was involved).

3.  There is no defence of honest and reasonable mistake in professional discipline.

4.  It is inappropriate for a disciplinary tribunal to make what the prosecutors described as ‘an incidental finding of dishonesty’ in relation to statements made during the investigation in respect of which no charge had been laid in the disciplinary proceeding.  Any such allegation ought to be the subject of a separate process (though the Tribunal then went ahead and found that the allegation was not made out on the Briginshaw standard anyway). Continue reading “Self-represented solicitor guilty of misconduct for breaching a rule expressed to regulate conduct when acting for a client”

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NSW solicitor who failed to pay counsel’s fees struck off

Updated post (25 July 2014):  The answer to the question posed by the original post is: yes, he will be struck off.  Here are the reasons: Council of the Law Society of NSW V Andreone (No2) [2014] NSWCATOD 81.  His failure to make submissions on the question would not have assisted.  On the question of whether monies received by solicitors from clients for payment of counsel’s fees are trust monies, and on whose behalf they are held, see Legal Services Board v Gillespie-Jones [2013] HCA 35 about which Melbourne University’s Associate Professor Bant’s learned commentary may be found here.

Original post (published as ‘Will Solicitor Who Failed to Pay Counsel’s Fees be Struck Off?’): The Law Society of NSW wants a solicitor who persistently delayed in paying counsel struck off. The NSW equivalent of VCAT has found the professional misconduct established: Council of the Law Society of NSW v Andreone (No. 1) [2014] NSWCATOD 49, and a hearing on sentencing is pending.  In this case, clients had paid bills which included claims by the solicitor for counsel’s fees by electronically depositing monies into the firm’s office account — probably at the firm’s direction, as the Tribunal found.

The Tribunal found without reference to authority that those payments were trust monies to the extent that they satisfied the claims by the solicitor for counsel’s fees, the solicitor not having paid the counsel at the time of their receipt.  In other words, the solicitor held the monies on trust for the barristers. But it seems that the Tribunal considered the solicitor’s misappropriation of trust monies and the failure to pay the fees as separate instances of professional misconduct.  In other words, the mere failure to pay the fees, given its intentionality and persistence, amounted to professional misconduct.  This is what the Tribunal said: Continue reading “NSW solicitor who failed to pay counsel’s fees struck off”

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What does ‘pro bono’ mean? Are ‘semi-pro bono’ costs agreements legally efficacious?

Hidden away in Trkulja v Efron [2014] VSCA 76, at footnote 49, is a little dictum of the Chief Justice and Justice of Appeal Santamaria which explains their Honours’ understanding of the term ‘pro bono’:

‘In current legal practice, the expression ‘pro bono basis’ is understood to refer to the basis where a practitioner offers his or her services on a voluntary basis without any entitlement to or expectation of remuneration.’

Practitioners should, it seems to me, think carefully before describing themselves as acting ‘pro bono’ when their retainers provide for them to be paid out of the proceeds of a costs order made in favour of their client in litigation to be paid by their client’s opponent in the litigation.

There has been uncertainty in relation to the efficacy of a retainer which says ‘I will charge you $300 per hour but will seek to recover it from you only if you obtain an order that the other party pay your costs, and then I will only seek to recover my fees to the extent of the other side’s liability under the costs order’ or any variation of that concept.

The issue was that the indemnity principle requires total party-party costs to be no more than the liability of the person seeking the costs order to their own lawyers for costs.  If the liability depends on the making of a costs order, until the order is made, the liability is nil,  so that the indemnity principle precludes the making of the order in the first place (so the argument goes).   The latest important decision to endorse this reasoning, albeit in dicta, was King v King [2012] QCA 81.

Now if there is a principle which is properly described as ‘flexible’, it is the indemnity principle in costs law and it is a matter of surprise to me that the uncertainty has persisted so long given the obvious desirability from the perspective of access to justice to sanctioning such arrangements.

Happily, the Supreme Court of Queensland recently gave a decision this year which decided as a matter of ratio that an otherwise orthodox hourly rates costs agreement which included the following special condition was efficacious and did not offend against the indemnity principle:

‘No fees will be payable by you unless an order is made by the Supreme Court of Queensland in your favour for the payment of costs and those costs are recovered by us from other parties and any fees charged shall be limited to the amount of costs so recovered.’ Continue reading “What does ‘pro bono’ mean? Are ‘semi-pro bono’ costs agreements legally efficacious?”

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Reviews of decisions of the Costs Court’s Judicial Registrar

The Costs Judge recently clarified the procedure for seeking review of a decision of a Judicial Registrar on a preliminary point of law in a taxation of costs in the Costs Court.  Essentially, his Honour said, the procedure in r. 63.56.2, mutatis mutandis, will generally be appropriate, including the 14 day time limit referred to in it.  In relation to this kind of decision of a Judicial Registrar, the review goes straight to the Costs Judge, unlike in the case of rulings upon items in a bill of costs during the taxation proper, where there is a bizarre requirement for the Judicial Registrar to reconsider her own decision before it may be appealed to the Costs Judge. Continue reading “Reviews of decisions of the Costs Court’s Judicial Registrar”

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Application to set aside costs agreements for disclosure defaults fails

A decision of the Supreme Court of Queensland has made clear what ought to be more obvious than it appears to be, namely that costs disclosure defaults will not result in the setting aside of a costs agreement in the absence of evidence that the non-disclosures had some effect on the client’s decision to enter into the costs agreement on the terms in fact adopted between the solicitor and client. Continue reading “Application to set aside costs agreements for disclosure defaults fails”

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White Industries v Flower & Hart: unfounded allegations of fraud

This post is a case note of Justice Goldberg’s famous decision in White Industries (Qld) Pty Ltd v Flower & Hart (1998) 156 ALR 169; [1998] FCA 806 as well as of associated decisions and surrounding controversy.  Because it is what I am working on at the moment, it concentrates on that part of the case which relates to the unjustified pleading settled by Ian Callinan QC and signed by his instructor Michael Meadows, alleging that the builder lied to the developer in relation to the cost of building a shopping centre just north of Brisbane.  It’s a big post, to kick off the year.

Facts (not all drawn from the judgments)

George Herscu died just before Christmas, aged 85. He was the alter ego of a property development group headed up by the Hersfield Development Corporation. According to 4 Corners, he was the biggest property developer in the country. According to The Australian, he lived in a Toorak mansion, owned a Melbourne Cup winner, and was once the third richest man in Australia after Robert Holmes a Court and Kerry Packer, one place ahead of Alan Bond.  He was a millionnaire by 30, and made and lost a fortune of $500 million.  He left Australia for California in 1997 and rebuilt substantial wealth.  Towards the end of his life, he was engaged in bitter litigation with his son, who described him as ready to spend whatever is needed to “crush anyone that stands in his way”.  Ironically, given what follows, Mr Herscu’s lawyers accused the son of mis-using the deposition process.  According to The Australian, they said:

‘Your clients’ continued insistence on trying to push an 80-year-old man with hypertension, a heart condition, failing hearing and many other health problems into a deposition room – having already deposed him for 27 hours – is shocking and wrong.  The only conclusion one can reasonably draw from your clients’ posture is that their litigation strategy involves attempting to subject George Herscu to so much stress and pressure he simply dies. To use the tools of discovery for this purpose is reprehensible, and indeed revolting.’

Very alarmingly, he was asked in those depositions about allegations that he had watered down the beer in a pub. Continue reading “White Industries v Flower & Hart: unfounded allegations of fraud”

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The civil and disciplinary consequences of making an allegation of serious wrongdoing without a proper foundation

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; [1960] 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 [2010] NTSC 02), or are fantastically complicated (the case just referred to and Victorian Bar Inc v CEM QC [2006] 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).

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Switch from party-party to standard basis not retrospective per SCV

Update, 23 September 2013:  See also, to similar effect, but in relation to the Federal Court’s Rules: Territory Realty Pty Ltd v Garraway (No 3) [2013] FCA 914.  And in Metlife Insurance Ltd v Montclare, 4 September 2013, the Costs Judge, Wood AsJ, found that interlocutory orders made prior to 1 April 2013 may still be taxed forthwith even in the absence of a direction to that effect by the Court making the interlocutory order, despite the introduction of r. 63.20.1 which says that such costs shall not be taxed until after the completion of the proceeding unless the Court otherwise orders.

Original post: The rules in civil proceedings in the Supreme Court of Victoria changed not so long ago.  Whereas the usual order in favour of a successful party was that the unsuccessful party pay the successful party’s costs on a party and party basis,  but now the usual order is that such costs be paid on a new basis, the ‘standard basis’ the test for which is much the same as the test for the old ‘solicitor and client’ basis against which costs were ordered to be quantified in special circumstances, essentially misconduct during the litigation and not beating offers of compromises.

Sifris J has ruled authoritatively that for work before the commencement of the rule change, costs of a successful party are presumptively to be quantified on the old basis; the new rules in this regard do not have retrospective effect: Jane v Bob Jane Corporation Pty Ltd (No 2) [2013] VSC 467.  His Honour’s reasoning is reproduced below.  Before I get to it though, may I suggest that solicitors review their costs disclosures to ensure that any adjustments to estimates of costs recoverable from the other side in litigation are brought up to date.  More might now be recoverable than before, and certainly it would not hurt to substitute ‘standard basis’ for ‘party party basis’ if that language appears in solicitors’ precedents. Continue reading “Switch from party-party to standard basis not retrospective per SCV”

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Free tickets to a great seminar

I’m chairing what should be a great seminar for litigators at Melbourne’s RACV Club on 28 August 2013.  Judicial Registrar Meg Gourlay who is one of the two decision makers who is handling most of the solicitor-client taxations in the State at the moment is the lead singer, talking about the changes to Order 63 of the Supreme Court Rules and the new Supreme Court scale which is no doubt the harbinger of new scales in other courts too.  Despite my complete failure as a blogger to bring them to your attention, these are big changes: so big I have never quite got around to writing a post about them, a bit like the post about the decision in Fritsch v Goddard Elliott.  So it is well worth finding out what the Costs Court figures they mean.  Apart from anything else the more mysterious bits have been chopped out of the scale which means that lay lawyers uninitiated in the dark arts of that most mysterious of cabals — the costs lawyers — might actually be able to draw bills themselves with a bit of orthodox education, a spot of which the Judicial Registrar is going to engage in.

The band is pretty hot too.  Anna Sango has bravely taken on the task of speaking about a strange new concept getting a workout at the salons of the most elegant cost lawyers: ‘proportionality’, absolutely all the rage I’m told amongst aristocrats in England whose favourite pastime seems to be inventing more rules for that greatest of all English board games, litigation.  Frankly, it seems like a dangerously French concept to me, a sly limit on the individual’s right to litigate matters of principle and bugger the expense, but Sango will no doubt tell us that it’s more nuanced than that.  Then, after all that esoterica, Paul Linsdell, one of the head honchos of the behemothic Blackstone Legal Costing will speak on tips and traps when arguing costs in litigation.  The traps are newly refreshed thanks to the subject matter of Judicial Registrar Gourlay’s talk, and so this hoary old chestnut of a topic will be worth a listen.  And then Debra Paver, who has given evidence in a few security for costs applications in her time, will speak on the inherently useful subject of how to argue for and against such applications.

I have two otherwise unbelievably expensive tickets available for enticing supplicants.

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More on solicitors’ obligations to pay counsel’s fees

Council of the Law Society of New South Wales v JAX [2012] NSWADT 283 is a case in which the solicitor was disciplined for paying himself out of fees provided to him by his client for payment of counsel’s fees.  Ultimately he went bankrupt and did not pay the fees. See also this earlier post on this subject.  The decision also represents yet another admonition to pleaders of disciplinary charges to plead dishonesty expressly if they intend to allege it.

There were the following agreed facts: Continue reading “More on solicitors’ obligations to pay counsel’s fees”

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Another solicitor struck off for not paying counsel’s fees

A South Australian solicitor has been struck off for a panoply of wrongs, one of which included failing to pay counsel’s fees: Legal Practitioners Conduct Board v Wharff [2012] SASCFC 116.  On this subject, broadly construed, see also: Council of the Law Society of NSW v PJB [2012] NSWADT 153,  Council of the Law Society of NSW v ML [2012] NSWADT 146, and Council of the Law Society of NSW v HI [2012] NSWADT 203 (where the NSW solicitor was struck off).  See also Legal Services Board v G-J [2012] VSCA 68 (re the Quistclose trust which may arise when a client pays solicitors moneys for the specific purpose of paying counsel’s fees), Victoria Lawyers RPA Limited v M O Lawyers Lawyers Pty Ltd TO217 of 2002, 31 October 2001 and Law Institute of Victoria Limited v SO & GS,TO555 & TO556 of 2005 10 November 2005, and Legal Services Commissioner v JHMcC [2011] VCAT 231 noted in this post.

In Wharff,  A Full Court of the South Australian Supreme Court (Kourakis CJ, Blue and Stanley JJ) said:

‘A solicitor who engages a barrister or solicitor agent undertakes a personal liability, either in honour or in contract as the case may be, to pay the barrister’s or agent’s fees, unless otherwise agreed.[3]  Where a legal practitioner undertakes such a personal liability, it is unethical to ignore his or her obligation, and hence a wilful or persistent refusal or failure to pay fees can amount to unprofessional conduct.[4]’

[3]    Rhodes v Fielder, Jones and Harrison [1918-19] All ER 846 at 847 per Lush J (Sanke J agreeing); Re Robb (1996) 134 FLR 294 at 310 per Myles CJ, Gallop and Higgins JJ.

[4]    Rhodes v Fielder, Jones and Harrisons [1918-19] All ER 846 at 847 per Lush J (Sanke J agreeing); Law Society of New South Wales v McCarthy [2002] NSWADT 58 at [46] per Malloy, Robinson QC and Kirk; Law Society of New South Wales v Graham [2007] NSWADT 67 at [29] per Karpin ADCJ, Pheils and Fitzgerald.

Continue reading “Another solicitor struck off for not paying counsel’s fees”

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Limit on the unrecoverability of unusual expenses principle in Victoria

I had to read Abrahams v Wainwright Ryan [1998] VSC 335; [1999] 1 VR 102 from start to finish recently.  I noticed the paragraph the subject of this post which, it seems to me, might be useful in arguing in Victoria against a submission in a solicitor-client taxation that an expense should not be allowed because it was unusual and the unusualness not brought to the attention of the client before it was incurred.  The paragraph suggests that a failure to warn itself is insufficient to require its disallowance, at least where the lawyer suggests that even had the warning been given the client would have authorised the incurring of the cost. Continue reading “Limit on the unrecoverability of unusual expenses principle in Victoria”

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When does the 12 months in which to seek taxation commence?

In Victoria, solicitors have only a non-extendable 60 days in which to seek taxation of counsel’s fees, but clients have 12 months in which to seek taxation of solicitors’ fees, and clients other than ‘sophisticated clients’ as defined may seek an extension of time in which to apply.  Where the greatest uncertainty exists, in my mind at least, is in the case of suits for taxation by third party payers — non-clients who promise to pay others’ legal fees, and most particularly non-associated third party payers — non-clients whose promise to pay others’ fees is made to the client rather than to the lawyers.  I imagine that solicitors do not generally give bills to non-associated third party payers, such as the mortgagors to whom their clients lend money under documents which require the mortgagor to pay the mortgagees’ costs.  Rather, I imagine that the mortgagees generally just demand a sum from the mortgagor as an adjustment at settlement, and hand over the bill from their lawyers only upon demand.  Yet non-associated third party payers are entitled to seek taxation, and the question is — when does the time in which such a taxation may be applied for begin to run?

I must warn you that the rest of this post is likely to be extremely boring for most people, and understanding it, despite my attempt to state it as clearly as I can, is likely to involve considerable mental effort.

In Viscariello v Oakley Thompson [2012] VSC 351, Justice Ferguson decided a dispute between an individual who guaranteed his company’s obligation to pay the company’s legal fees, and the company’s lawyers.  The individual was presumed for the purpose of argument to be an associated third party payer, which seems like a very reasonable assumption to me. The dispute was about when the time limits commenced.  But the judgment does not resolve many mysteries, because it seems that the company and the director received the bills simultaneously, and though no bills were addressed to the guarantor qua guarantor, since he in fact received the bills at the time the company received them, time started to run from then. Continue reading “When does the 12 months in which to seek taxation commence?”