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The Supreme Courts’ inherent supervisory jurisdiction (lawyers’ fees) Part 3

3. Other courts

The supervisory jurisdiction is often spoken of as an inherent jurisdiction of superior courts of record.  So other states’ and territories’ Supreme Courts would have the same jurisdiction, albeit more amenable to statutory modification / influence than the Victorian Court’s jurisdiction.  Those other courts still jealously guard their jurisdictions against statutory incursion, though, holding that only statutes which prohibit a particular course will affect the inherent jurisdiction.[1]

Continue reading “The Supreme Courts’ inherent supervisory jurisdiction (lawyers’ fees) Part 3”

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The Supreme Courts’ inherent supervisory jurisdiction (lawyers’ fees) Part 2

2. The inherent supervisory jurisdiction of the Supreme Court

Woolf v Snipe (1933) 48 CLR 677 is a decision of the High Court in its original jurisdiction, constituted by Sir Owen Dixon who observed at 678-679 that ‘The superior Courts of law and equity possess a jurisdiction to ascertain, by taxation, moderation, or fixation, the costs, charges, and disbursements claimed by an attorney or solicitor from his client,’ and that there were three sources of that jurisdiction:

    • That ‘founded upon the relation to the Court of attorneys and solicitors considered as its officers.[1] This jurisdiction … enables it to regulate the charges made for work done by attorneys and solicitors of the Court in that capacity, and to prevent exorbitant demands.’
    • That to determine by taxation or analogous proceeding the amount of costs whenever a contested claim for costs comes before the Court which it has jurisdiction to determine.[2]
    • The statutory jurisdiction (now found in the Legal Profession Uniform Law).

Continue reading “The Supreme Courts’ inherent supervisory jurisdiction (lawyers’ fees) Part 2”

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The Supreme Courts’ inherent supervisory jurisdiction (lawyers’ fees) Part 1

I gave a talk to the National Costs Law Conference put on by the Law Institute of Victoria the other day.  This is part 1 of the paper which accompanied it. The balance will follow.

* * *

The unlimited jurisdiction of the Supreme Court

The Supreme Court of Victoria has a constitutionally entrenched unlimited[1] subject matter jurisdiction. Section 85(1) of the Constitution Act 1975 (Vic) says Continue reading “The Supreme Courts’ inherent supervisory jurisdiction (lawyers’ fees) Part 1”

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Dal Pont’s Law of Costs (5th ed, 2021), a review

Here is my review of the latest edition of Professor Dal Pont‘s Law of Costs, published in the latest (December) edition of the Law Institute Journal:

‘Law of Costs 

Professor Gino Dal Pont, (5th edn), 2021, LexisNexis, pb $460

Everyone thinks they know the law of costs and we look it up too infrequently, but costs lawyers spend their lives mopping up after errors made by litigators, KCs and judges included. Sometimes, a mop up is not possible, and in the realm of solicitor-client costs, lawyers are forced into quiet but devastating settlements by which they give up and disgorge costs to the tune of many hundreds of thousands of dollars at a time, more often than might be imagined.

Continue reading “Dal Pont’s Law of Costs (5th ed, 2021), a review”

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Supreme Court sets aside default judgment in Magistrates’ Court and refers the fees to taxation instead of remitting suit for fees

Davey v Costanzo Lawyers Ltd [2021] VSC 449 is episode # c. 898 in my series  about suits for fees, ‘Many a Slip Twixt Cup and Lip’.

A family law firm whose website modestly explains that they are the ‘best family lawyers’ sued its former client for professional costs and barristers’ fees for work done in 2018.  They got default judgment for about $40,000 in June 2019, but they forgot to plead that they did the work set out in the bill, that being left to be inferred from the fact that they gave a bill.

In July 2019, a judicial registrar refused an application to set the default judgment aside.  A Magistrate at Heidelberg, reviewing that decision, came to the same conclusion in August 2019.  Then the plaintiff hired counsel and applied again to the same Magistrate to set aside the judgment, and she said no, again, in February 2020.

The lawyers had thrice claimed successfully that there was no merit at all in the client’s defence.  But the client got a barrister, sought judicial review in the Supreme Court and jumped the arguable defence hurdle on the fourth attempt, clearing House v R in the same leap though it was strictly unnecessary to do so, and won on the basis that the complaint had been so badly pleaded that it did not make out a cause of action in debt, so that the default judgment was irregular and should have been set aside ex debito justitiae.  Then she got costs.

The decision is also of interest in relation to the circumstances in which a second application to set aside a default judgment might succeed.  Quigley J observed in dicta:

’36 The new or additional material argued before her Honour is set out above at [16]. Her Honour was sceptical that the matters identified were new or different. However, insofar as it is necessary to make any observation in this regard, it is apparent that a more cogent formulation of the basis of the potential defence(s) [was] articulated in this second application before her Honour. In my view, this may be sufficient to provide a change in circumstances from the situation which pertained before the Court on the first occasion.’

In other words, if you’re represented competently the second time and you self-represented the first time, that might be enough. Continue reading “Supreme Court sets aside default judgment in Magistrates’ Court and refers the fees to taxation instead of remitting suit for fees”

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Supreme Court flexes inherent jurisdiction of its own motion to require both parties’ lawyers’ costs to be taxed by the Costs Court on Scale

Pity the dozy lawyer who wanders innocently into Justice Cate McMillan’s court, bringing attitudes from days of yore about fees charged out of a great big fund.  Re Jabe; Kennedy v Schwarz [2021] VSC 106 should in my opinion be reported in the Victorian Reports as indicative of the breadth of and resilience to statutory incursion of the Court’s inherent jurisdiction.  The Court of its own motion sent both parties’ lawyers’ costs off to the Costs Court to be taxed on Scale, at the conclusion of a case, having found, on an inquiry initiated by Justice McMillan, disclosure defaults and void costs agreements governed by the Legal Profession Uniform Law, and legal costs that were not fair, reasonable and proportionate as required by that Law and the Civil Procedure Act 2010. Continue reading “Supreme Court flexes inherent jurisdiction of its own motion to require both parties’ lawyers’ costs to be taxed by the Costs Court on Scale”

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Costs Disclosure Obligations Under the Legal Profession Act 2004 (Vic)

The legendary foundation author of Quick on Costs, Roger Quick, has asked me to put this old workmanlike paper on my blog so that he can cite it and link to it in the second edition of that monumental text which he is kindly working on for all our benefits.

What follows does not deal with any developments in the law since 2010, or indeed anything I have learnt since 2010, when I delivered the paper, and so it is out of date, but it might still be of use in some jurisdictions which have not adopted the Legal Profession Uniform Law or by analogy in some cases which are governed by that law.  Sorry about the formatting, which is the product of copying and pasting a Word document into WordPress.

1. Summary

This paper does not deal with contingent, or no-win no-fee retainers.  In relation to all other matters, the take-home points are these: Continue reading “Costs Disclosure Obligations Under the Legal Profession Act 2004 (Vic)”

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Suit for fees goes badly wrong but could have gone much worse

An ACT practitioner seems to me to have been skilfully represented, escaping with findings of unsatisfactory professional conduct, a reprimand and a fine.  The decision in Council of the Law Society of the ACT v LP [2017] ACAT 74  just shows how far cooperation and a persuasive articulation of remorse and insight can go.

The practitioner illegally sued his former client for fees in circumstances where he knew that the very person who had instructed him, a director of the client who had given a director’s guarantee and so was a third party payer, had sought taxation.  Generally speaking, solicitors cannot sue their clients for fees once the client has commenced taxation.

In support of applications for default judgment, and to wind up the corporate client, the practitioner represented to the court, including on oath, that there was no dispute about fees.  Given that the director, a builder, was the alter ego of his building company client, the proposition that the company did not dispute the fees attracted a charge of professional misconduct by swearing a false affidavit, a thoroughly serious allegation.  By a plea bargain, it was downgraded to a weird charge of unsatisfactory professional conduct (varied by me for readability):

The practitioner breached his general law ethical duty of professional conduct or the duty owed to the director of his former client pursuant to Rule 1.1 of the Legal Profession (Solicitors) Rules 2007 to continue to treat the former client fairly and in good faith, and not to treat it otherwise than in an honourable and reputable manner during the dispute over costs owed by the director or the former client.

Rule 1.1 was itself a weird old rule:

‘A practitioner should treat his or her client fairly and in good faith, giving due regard to the client’s position of dependence upon the practitioner, his or her special training and experience and the high degree of trust which a client is entitled to place in a practitioner.’

Perhaps the horribleness of the original false affidavit charge’s drafting contributed to the prosecution’s willingness in the end to back away from it and retreat into the weirdness set out above.  The original charge (again, varied by me for readability) was: Continue reading “Suit for fees goes badly wrong but could have gone much worse”

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Too broad a range of estimates of total costs causes NSW solicitor great grief

Frontier Law Group Pty Ltd v Barkman [2016] NSWSC 1542 is an ex tempore decision of Justice Slattery in an urgent application to extend the operation of a caveat lodged by solicitors over their client’s property.  The application failed in part because the solicitors did not prove, even to the prima facie level required in such an application, that the money said to be owing and secured by the equitable charge which was the subject of the caveat was in respect of fees invoiced under the costs agreement referred to in the caveat.  That is not particularly interesting except as schadenfreude.

Two things are interesting though, given that the costs agreement was probably entered into in 2012 and so the Legal Profession Act 2004 (NSW) almost certainly applied (even though the Court looked also at the situation under the Legal Profession Uniform Law (NSW)):

  • First, the Court found that the range of estimates of total legal costs was so wide as not to comply with the relevant disclosure obligation.
  • Secondly, the Court appears to have treated the extension application as the commencement of proceedings for the recovery of legal costs, such that the statutory preconditions to such proceedings needed to be, but were not, proven to be satisfied by the lawyers.

I cannot think of another authority which states so plainly that some estimates are so imprecise as to render them non-compliant with the obligation to give a range of estimates of total legal costs.  But now we have it: a decision of the Supreme Court of NSW under a legislative scheme of which Victoria is also a part and which is likely to be followed as a matter of comity in Victoria.

What the Court said is: Continue reading “Too broad a range of estimates of total costs causes NSW solicitor great grief”

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NSWCA surveys fines in NSW lawyers’ discipline decisions over a decade

Russo v Legal Services Commissioner [2016] NSWCA 306 was the subject of my previous post. The Court engaged in a comparatively sophisticated review of disciplinary outcomes in like cases.  The purposes of this post is to reproduce that review and comment on the variables which ought to be taken into account in any proper survey of past outcomes.

To survey penalties in like cases has always been an important part of sentencing and should be an important part in imposing disciplinary sanctions.  Barbaro  (2014) 253 CLR 58; [2014] HCA 2 and Cth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 326 ALR 476 do not suggest to the contrary.  They say that the purpose of a survey of like sanctions is to promote consistency in penalties but not the establishment of a range of available sanctions deviation from which is appellable.  Buchanan JA observed in R v Macneil-Brown [2008] VSCA 190, (2008) 20 VR 677 at [130]:

‘counsel can best assist a sentencing judge, not by advancing what they consider to be sentences at the lower or upper limits of a sound sentencing discretion, but by making submissions as to the existence and nature of aggravating and mitigating circumstances and providing some guide to the manner in which other judges have approached like cases by supplying sentencing statistics and citing passages from decided cases which bear upon aspects of the instant case.’

I would submit that any survey of fines as a disciplinary sanction must take into account, as an important aspect of the analysis, the financial situation of the person or persons liable to pay it.  The specific deterrence of a fine will vary greatly from one practitioner to another.  Practitioners who struggle, for personal reasons, are more likely to get themselves into trouble in the first place, and to exacerbate it by less than perfect intercourse with the Legal Services Commissioner.  Their financial situations often deteriorate too.  Specific deterrence may be achieved by imposition of a fine much smaller than would be imposed on a flourishing practitioner raking it in.  General deterrence will also be achieved if the Tribunal is transparent in taking account of financial circumstance.  In such a case, the Tribunal might indicate the kind of fine which might have been imposed had the practitioner enjoyed an average post-tax income.

Furthermore, the costs burden borne by the practitioner ought also to be taken into consideration.  Costs and fine are inter-related in this way: Environment Protection Authority v Barnes [2006] NSWCCA 246 at [88] (Kirby J speaking for the Court) applied by analogy in LSC v Bechara [2009] NSWADT 313. The extraordinary costs practitioners are liable to in Victoria following disciplinary prosecutions would very often be more than adequate to achieve specific and general deterrence.  If you are prosecuted and reprimanded, made the subject of an editorial on the front page of the Commissioner’s website, and have to cough up $40,000 in unrecoverable solicitor-client costs reasonably incurred and costs liability to the Legal Services Commissioner, that is going to make you think just as hard about doing it again as any comparatively trivial fine you might cop.

Finally, one must be astute to inflation.  In my experience, people tend to exaggerate the effect of inflation when considering older fines.  Here is a calculator which assists in measuring in today’s dollars a fine imposed some years ago.

For some reason, notwithstanding that NSW is now a part of the legal profession uniform law, the other participant in which is Victoria, no Victorian fines were part of the survey.  That strikes me as unusual, since there is a whole statutory office the purpose of which is to promote interstate uniformity in the application of the Uniform Law: the Commissioner for Uniform Legal Services Regulation.  Russo’s Case was decided under the old legislation which the LPUL replaced, and which legislation in fact governed the prosecution was one of the issues on appeal.  Interestingly, apparently because it was thought that there were no relevant differences between the two regimes, that question was not decided.

This is what the NSWCA said about its survey of fines, and about the appropriate fine in this case: Continue reading “NSWCA surveys fines in NSW lawyers’ discipline decisions over a decade”

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A little case about a barrister suing a solicitor for fees

Barnet Jade has given us an admirably constructed decision of Assessor Olischlager, a no-doubt busy decision maker in the Small Claims Division of the Local Court in NSW.  Dupree v Russo [2016] NSWLC 8 was a barrister’s suit for fees against a solicitor.  Call me a dag, but it is always a pleasure to find diligent, elegant decisions carefully considering bang-on authority from the busiest decision makers who generally receive little assistance in the researching and writing of decisions. The decision considers whether costs agreements came into existence by the continued giving of instructions, and between whom, what disclosure obligations the barrister had, and whether the limitation period for suing for the fees was re-set by an acknowledgement of debt by the solicitor.

The barrister offered to enter into a costs agreement jointly and severally with his instructing solicitor and their client.  The offer said that the continuing provision of instructions would be taken as acceptance.  The solicitor continued to give instructions on behalf of the client.  The Court found that a costs agreement arose: the instructions were given by the solicitor personally and as agent for his client, as an act of acceptance on both their parts.  As the Assessor said: Continue reading “A little case about a barrister suing a solicitor for fees”

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Advocates’ immunity: at once more powerful and narrower than most yet understand

Advocates’ immunity was, until recently, more powerful than many lawyers were aware. Since the 1 July 2015 introduction of the Legal Profession Uniform Law and the High Court’s May 2016 decision in Attwells v Jackson Lallic Lawyers Pty Limited,[1] however, it may be narrower than many realise. And perhaps not everyone is aware that the immunity these days is very likely peculiar to Australia; it is certainly not a feature of English, American, Canadian, Continental, Indian, South African or New Zealand law.[2] Continue reading “Advocates’ immunity: at once more powerful and narrower than most yet understand”

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What quality of work defences are available in a suit for fees where client did not seek taxation?

An Appeal Tribunal within the ACT Administrative Tribunal has put out a neat little decision which makes clear that where solicitors do work and bill it, where the client does not seek taxation within the time for doing so, and the solicitors sue for fees, the tribunal hearing the suit for fees still has, in the ACT at least, jurisdiction to consider defences based on the quality of the work. In particular, work which may be said to have been wasted by virtue of negligence on the part of the solicitor will not be allowed by the Court.  The lawyers in Williams Love & Nicol Lawyers Pty Ltd v Wearne [2016] ACAT 18 essentially argued that they were entitled to sue on their bills as a debt once the time for taxation had passed.

In this case, the lawyers had negligently drawn a response to allegations of misconduct by an employee without obtaining the foundational document in which the allegations were actually made.  When they belatedly obtained that document, the response had to be re-drawn.  The Tribunal drew a distinction between a defence of waste as a result of incompetence and an argument that the fees were not ‘fair and reasonable’ in a more general sense, and confirmed essentially that the client had foregone the opportunity to mount ‘fair and reasonable’ arguments by not seeking taxation of the solicitors’ fees.  Nevertheless, the Tribunal disallowed the suit for fees to the extent of the fees associated with the original drawing of the response. Continue reading “What quality of work defences are available in a suit for fees where client did not seek taxation?”

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When can lawyers contract out of taxation? (part 1)

Often enough, lawyers would love to avoid having their costs taxed.  Under the repealed but still operative Legal Profession Act 2004, lawyers could contract out in advance of the obligation to have their fees reviewed by taxation with ‘sophisticated clients’, but I do not recall ever having seen anyone attempt to do so.

When lawyers have not complied perfectly, vis-a-vis unsophisticated clients, with the costs disclosure regime under the repealed but still relevant Legal Profession Act 2004, they could not recover their fees unless there had been a taxation: s. 3.4.17.

It was clear that unsophisticated clients could not validly agree to waive in advance of the fees being incurred their right to tax their lawyers’ charges. But what about if the solicitors entered into a compromise of a dispute about their already rendered fees with their client?

How did the law of accord and satisfaction apply? (Accord and satisfaction is the litigation estoppel equivalent to res judicata when a dispute is compromised or ‘settled’ rather than adjudicated upon.)

Can lawyers get certainty and avoid further disputation (including taxation) in return for a discount on their fees?  Can they get around the s. 3.4.17 prohibition on recovering fees in cases of disclosure defaults unless they have been taxed?  If a taxation is commenced and then compromised, I would think there was no doubt that the fees have been ‘taxed’ for the purposes of this rule, especially if the compromise were embodied in orders finalising the taxation.  But what if the compromise occurs without any summons for taxation having been issued? Need the compromise comply with the formal requirements for costs agreements on the basis that they are agreements about the payment of legal costs which have been which have been charged for the provision of legal services?  Does the accord have to state expressly that the client waives the right to taxation?

It seemed until recently, that lawyers could not preclude taxation by compromising a dispute with a client or associated third party payer about fees, because such agreements would amount to a ‘costs agreement’ under the Legal Profession Act 2004.  Costs agreements were defined, after all, to mean ‘an agreement about the payment of legal costs’: s. 3.4.2, where ‘legal costs’ were defined by s. 1.2.1 to mean, amongst other things, ‘amounts that a person has been … charged by … a law practice for the provision of legal services…’).  And the Act prohibited unsophisticated clients from contracting out of their right to taxation.  Attempts to do so were void: ss. 3.4.26(5), 3.4.31.

The cases in this blog post (Amirbeaggi (NSWSC, 2008) and Jaha (SCV, 2012) explain why unsophisticated clients were apparently equally unable validly to waive their right to taxation after the fees had been incurred as they were unable to do so in advance, by virtue of the breadth of the definition of ‘costs agreement’.

Subsequent blog posts will consider what the Court of Appeal has had to say in a case indirectly on point, and explain the true state of the law in Victoria, as declared by the Supreme Court. It seems now that Victorian lawyers in dispute with their clients can buy their way out of taxation by giving clients a bit of a discount, and that this can occur without any writing or other formalities associated with ‘costs agreements’, and without any express reference to the future unavailability of taxation.  The client need not even be aware that they are giving up their right to taxation.  And that is so because agreements about how much a lawyer will accept in full and final satisfaction of their claim for fees already rendered for work already done are not ‘costs agreements’ governed by the Act after all. Continue reading “When can lawyers contract out of taxation? (part 1)”

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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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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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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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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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The difference between a debt and a claim for damages: part 1

It is sometimes said that once the time for taxation has expired, a bill for legal fees may be ‘sued on as a debt’.  Quite frankly, I have never quite understood what the difference between a debt claim and a damages claim is, or why it matters in general, though there are certain consequences I’m aware of in terms of the  civil procedures applicable.  By way of first instalment: I just saw this little passage in Copuss Pty Limited v Nix [2012] NSWSC 671, and thought to squirrel it away on the blog:

’56              There is no reason why Copuss should not be entitled to recover the loans it made to Mr and Mrs Nix. The recovery of those loans do not depend on the contract and whether Mr and Mrs Nix were in breach of it. As the High Court explained in Young v Queensland Trustees Ltd (1956) 99 CLR 560 at 567:

The common law does not and never did conceive of indebtedness in a sum certain for an executed consideration as a mere breach of contract: it is rather the detention of a sum of money and that was so whether the creditor enforced his demand by an action of debt or by indebitatus assumpsit.

 And later it said (at 569):

 A debt recoverable under an indebitatus count was not and is not now conceived of simply as a cause of action for breach of duty or obligation. In other words it is a mistake to regard the liability to pay a debt of a kind formerly recoverable in debt or indebitatus assumpsit as no more than the result of a breach of contract, a breach which the creditor must affirmatively allege and prove.’

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How not to plead a contract

Update, 17 January 2013: this colourful judgment of a Master of the Supreme Court of Western Australia is worth a read. For example:

’23 At par 17, the plaintiff pleads that the agreement was entered into between February and November 2007. That is a remarkably long period. It should always be possible to say when a contract came into existence.

24 In a classical analysis, it is when the offer is accepted. Any uncertainty over the date on which the contract became complete and enforceable only arises because of evidentiary uncertainty about when a particular event occurred: there may be doubt, for example, about whether a written acceptance was delivered, or a conversation took place, on Tuesday or Wednesday. But there will still be a short interval of time during which those things are said to have taken place.

25 Even in the sort of case in which a contract emerges from a course of conduct, such as was considered by the Full Court in Marist Brothers Community Inc v The Shire of Harvey (1994) 14 WAR 69, it is always possible to give a definite date by which it can be said that there is an enforceable contract.

26 In neither type of case is it likely that the point at which a contract came into existence cannot be narrowed down any further than to a nine-month period. Nine months is the gestation period for humans, not for contracts. A plea that a contract came into existence in a nine-month period is embarrassing.’

Update, 4 June 2012:  This post prompted quite a few readers privately to email me sharing various frustrations they have.  One pointed me to an article by a Qld silk, Anthony Morris, venting his top 7 pleading frustrations, ‘Seven Deadly Sins of Pleading’, Hearsay, Issue 32, December 2008.  I completely agree with the first 6 and all of the 7th except for the bit which recommends against using automatic cross-references to other paragraphs of the pleading — technology must have moved on since 2008.  I am in heated agreement with him in relation to his second point, and wonder whether any Victorians consider that pleading in numbered paragraphs what might ordinarily be contained within particulars, so as to force (or even entice) the responding party to state their position in relation to that allegation, might not be permitted for some reason.

Original post: One might think that nothing could be more central to commercial litigation practice than to plead an agreement.  Sometimes the line between facts and evidence — one you plead and the other you don’t — can be a bit blurry, but one might think that it would give a lawyer pause before pleading an invoice given pursuant to an agreement as a particular of the agreement itself.  Yet it happens all the time, perhaps none moreso than in the solicitor who sues for fees, representing himself.

Then there seems to be a pathological inability in pleaders to allege a straight written agreement.  It’s always partly implied to give business efficacy to the agreement, but the implied term is never stated and nor are the reasons why the agreement would be inefficacious in a business sense without the implied term.  And often enough, it’s partly oral too, but the thrust of the words spoken so giving rise to the oral terms are not set out.

Speak up if you can better this pleading (bear in mind in order to be valid all the terms of a costs agreement have to be in writing or evidenced in writing) which is paining my Saturday evening, or just send me your favourite examples of the same phenomenon: Continue reading “How not to plead a contract”