Justice Byrne construed a no-win no-fee costs agreement in Maurice B Pty Ltd v Burmingham [2009] VSC 20. It was drafted by the solicitors and presented as a printed document for signature. His Honour construed it so as to resolve any ambiguities in favour of the client, invoking Clare v Joseph to reiterate the courts’ jealous supervision of lawyer-client relations to guard against the exercise of undue influence: Continue reading “Costs agreement read contra proferentem”
Reverse garage sale
I want to buy the following books, regardless of condition:
[1932] AC
Legal Profession Practice Act, 1958, all reprints
Legal Practice Act, 1996 (Vic.): the original Act, all reprints, and any amending Acts
R.J. Desiatnik, Legal Professional Privilege in Australia, 2nd ed.
Gino Dal Pont Law of Agency, penultimate (2001) edition
Dr John Glover, Equity, Restitution and Fraud
Dr John Glover, Commercial Equity: Fiduciary Relationships
A.K. Handley Res Judicata, latest edition
Foskett, The Law and Practice of Compromise, any recent edition (the latest is, I think, 2005)
Brian Watson, Litigation Liabilities, either edition
Burmingham almost Stergious megafirm
The Supreme Court is pumping out notable decisions about lawyers at such a rate that I will have difficulty keeping up. So I will start with the most titillating bit of the most interesting and most recent, Justice Byrne’s decision in Maurice B Pty Ltd v Burmingham [2009] VSC 20.
Mr Burmingham is not Mr Stergiou. He described his background as:
‘a qualified chartered accountant with a wide array of outside interests including studying, working as a freelance cartoonist and illustrator, a professional model, an actor and speechwriter, [who] excelled in singing and voice production … [and who] previously enjoyed sports such as football, cricket, soccer, basketball, golf, baseball, tennis, swimming and athletics’.
But he was self-represented, he was dogged, and there was one absolute pearl amongst what Justice Byrne otherwise considered to be dross. Four and a half years into the proceeding, after the close of evidence in a trial which ended more than a year after it began, he pointed out that Continue reading “Burmingham almost Stergious megafirm”
Beneficiaries, executors, trustees, and privilege
Update, 19 August 2009: See now also Gray v BNY Trust Company of Australia Limited (formerly Guardian Trust Australia Limited) [2009] NSWSC 789.
Original post: In the last post, I mentioned that the claimant beneficiary was not allowed to see the solicitor’s file, despite having initiated a costs dispute with the executor’s solicitor. A recent decision of the Supreme Court of Western Australia spells out the law on the question: Murray v Schreuder [2009] WASC 51. The law is:
58 In the case of a non-discretionary trust, … a beneficiary has a right – subject to exceptions – to inspect trust documents used by the trustee in the administration of the trust. An exception will arise in the case of documents which are private to the trustee that may evidence the reasons that the trustee has made his or her decision or exercised a discretion, in circumstances where disclosure is not required and has not been made by the trustee: Hartigan v Rydge (434, 442, 445); or where the document is the subject of a duty of confidence owed to a third party: see, for example, Hartigan v Rydge (433, 446); Schmidt (734); Morris v Morris (1993) 9 WAR 150, 154; or where disclosure is not in the interests of the beneficiaries as a whole: Rouse v IOOF Australia Trustees Ltd (1999) 73 SASR 484, 499; or where the terms of the trust deed give rise to an express or implied limit on a beneficiary’s right of access to trust documents: Hartigan v Rydge (446).
The whole of the reasons’ legal discussion of this issue is reproduced below. Continue reading “Beneficiaries, executors, trustees, and privilege”
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”
Expert evidence of good professional practice
There is an ongoing debate about whether judges who are after all themselves lawyers, need expert evidence about what competent lawyers tend to do in any given situation. But it is clear that there are occasions when expert evidence of good professional practice is admissible in some solicitors’ negligence cases. And certainly, expert evidence is an important feature of professional negligence cases against other professionals. Experts are not supposed to give evidence of the ultimate issue, though that is a more complicated proposition, once you start analysing it, than it sounds. Generally speaking though, an expert should say ‘in this situation, a competent professional would generally engage in a range of responses, from X to Y’, and should never say ‘I think the defendant was negligent in failing to do Z’. With this kind of expert evidence, though, it is difficult to know when one proposition is just a rewording of another. The limits of what the expert can properly say are, to my mind at least, somewhat cloudy. In a recent decision in a stockbroker’s negligence case, Eric Preston Pty Ltd v Euroz Securities Limited [2009] FCA 213, Justice Siopsis reiterates and summarises the relevant principles articulated in Australian Securities and Investments Commission v Vines [2003] NSWSC 1095; (2003) 48 ACSR 291, as follows:
Continue reading “Expert evidence of good professional practice”
Latest on privilege waiver by plaintiff in solicitor’s negligence case
Here is the latest case about that form of implied waiver of legal professional privilege by a former client plaintiff who sues his former solicitors for negligence: Artistic Builders Pty Ltd v Nash [2009] NSWSC 102. In this case, the plaintiff sued two successive sets of lawyers in the one proceeding. Inspection was granted of the documents the defendant solicitors were after.
6 months jail for lawyer thief ‘remarkably merciful’
Update, 8 May 2009: The Westralians have been listening to Justice of Appeal Nettle. Someone over there has thrown a 41 year old Margaret River solicitor into the slammer for almost 8, minimum of nearly 5. He stole almost $900,000 from an elderly man who lived alone on a farm.
Original post: A solicitor was convicted of forgery and given an enforced break from practice of a year. Years later, he stole $100,000 in his trust account from a client. He paid debts and took his family on holidays to Greece and Bali. He confessed as soon as a routine audit of his trust account revealed a discrepancy. He handed in his practising certificate to the Legal Services Board’s delegate, and a receiver was appointed to his practice which was sold. It sounds like the receiver might have been a bit sloppy, because the solicitor remained a signatory to a client account.
A week after being interviewed about the theft of $100,000, (‘amazingly’, as the trial judge put it) he stole another $43,000 from another client which he used to stave off bankruptcy at the suit of the Tax Man. When interviewed about that theft, he lied to the police, asserting that he had the client’s permission to withdraw the money.
The trial judge locked the solicitor up for 6 months and suspended an additional year of imprisonment. The DPP appealed against what it said was the manifestly inadequate sentence. Justice of Appeal Nettle, who warned last year on the need for condign punishment to express society’s special revulsion at lawyers’ theft from their trust accounts, was again party to a judgment in the matter of DPP v George B [2009] VSCA 29 making the same point, and would have increased the sentence on appeal but for certain factors peculiar to this offender: Continue reading “6 months jail for lawyer thief ‘remarkably merciful’”
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”
Proportionate liability in an accountants’ negligence case
Update, 4 May 2009: The costs decision (Sali v Metzke & Allen (No. 2) [2009]) is interesting. I blogged about it here.
Original post: Sali v Metzke & Allen [2009] VSC 48 is a decision of Justice Whelan in an accountants’ negligence case. It is an example of the proportionate liability scheme working as it was presumably intended. A professional firm sued for failing to detect wrongdoing was found liable, but instead of being liable for the victim’s entire loss (the deep pocket syndrome which proportionate liability is designed to avoid), it was found liable only for 30%. Because the victim did not sue the wrongdoer (the wrongdoer having been joined as a defendant by the professional firm), the victim did not recover damages for 70% of its loss. Continue reading “Proportionate liability in an accountants’ negligence case”
Latest on whether solicitors engage in trade or commerce: part I
Leong v J P Sesto & Co [2009] VCAT 99 is the latest in the on-again off-again saga of whether solicitors engage in trade or commerce, and, whether, if not, it means that VCAT does not have jurisdiction over claims involving them, and if so, which claims. Senior Member Vassie considered the question in the context of an application to set aside a costs agreement. It was heard in October 2008 and decided on 30 January 2009. The NSW Court of Appeal’s decision in Kowalczuk v Accom Finance [2008] NSWCA 343, decided on 10 December 2008 was not referred to (see Part II).
The application was made on the orthodox basis (under the predecessor of the Legal Profession Act, 2004) and supplemented by somewhat half-hearted arguments under the Fair Trading Act, 1999, the state equivalent of the Trade Practices Act, 1974. The law is quite clear that regardless of whether lawyers engaged in their core professional roles of representation and advising are engaged in in trade or commerce (the traditional view is that they are not), some aspects of their businesses are. What this decision says is that in negotiating fees, lawyers are engaging in trade or commerce, and so causes of action which seek relief in relation to costs agreements under the Fair Trading Act, 1999 and which are dependent on conduct in trade or commerce are available to clients. (It might be worth tucking away for future thought whether a lawyer who does not negotiate and seeks to recover fees only on scale or practitioners remuneration order, could be said to be engaging in trade or commerce, but it is unlikely such a costs agreement would be the subject of an application to set it aside.)
The decision also asserts that the Fair Trading Act, 1999‘s definition of ‘services’ requires that the services be in trade or commerce, contrary to an earlier considered decision of the Legal Practice List, which it seems may not have been cited to Senior Member Vassie. No argument on this point is recorded in the decision. Ironically, if this decision is followed, the result may be a narrowing of VCAT’s jurisdiction, because in those causes of action which do not specifically require conduct in trade or commerce, but require ‘services’, VCAT’s previous position was that the services did not have to be in trade or commerce to come within the definition, because though the words ‘trade or commerce’ appeared in the definition, the definition was inclusory, and only ‘included’ certain conduct in trade or commerce, rather than mandating ‘trade or commerce’ as an essential characteristic of activity falling within the meaning of ‘services’. An example of such a jurisdiction is the one to resolve ‘consumer-trader disputes’, a jurisdiction which essentially grants to VCAT common law jurisdiction enhanced by special legislative powers over all disputes arising directly out of the provision of services, regardless of their value. In those instances of lawyers’ conduct which are not engaged in in trade or commerce, Senior Member Vassie’s construction of the Act would deny VCAT jurisdiction where it would otherwise have had jurisdiction by virtue of the expansive construction of the definition of ‘services’. (Note that J P Sesto & Co v Jadewealth Pty Ltd [2009] VCAT 80 is essentially the same judgment in the same case.)
What Senior Member Vassie said was: Continue reading “Latest on whether solicitors engage in trade or commerce: part I”
Latest on whether solicitors engage in trade or commerce: Part II
Part I is here. This part II is about a unanimous decision of the NSW Court of Appeal, Kowalczuk v Accom Finance [2008] NSWCA 343. Their honours followed a decision of the Full Court of the Federal Court in Shahid v Australian College of Dermatologists [2008] FCAFC 72; (2008) 168 FCR 46 at [181] which was on this point unanimous. In Shahid, Justice Jessup was the judge with whom the others agreed. His Honour declined to follow an earlier decision of the Supreme Court of NSW, Prestia v Aknar (1996) 40 NSWLR 165 insofar as it suggested that when certain professionals, including solicitors, engaged in their core professional work (in the case of solicitors, advising, drafting legal documents, and representing people, especially in litigation), they do not engage in trade or commerce, though there are aspects of what professionals do in their capacity as professionals which may be said to be in trade or commerce. Justice Jessup said to work out whether conduct of a professional was in trade or commerce, you simply ask whether the conduct was conduct ‘in professional practice’.
The tide is ebbing steadily away from this craziest immunity of the legal profession (probably shared, probably unbeknownst to them, by those engaged in divinity, the military, and medicine), and it looks like many professional negligence cases (especially of the wrong advice, rather than failure to advise species) may now increasingly confidently be pleaded in contract, tort, and misleading or deceptive conduct. Unless, of course, one of the parties takes the super-tasty appeal bait in para [350] of the judgment and the High Court says Justice Santow was dead right in Prestia v Aknar all along.
Here’s what Justice of Appeal Campbell, with whom Justices of Appeal Hodgson and McColl agreed, said: Continue reading “Latest on whether solicitors engage in trade or commerce: Part II”
Solicitor’s ostensible authority to contract on behalf of client
In Zhang v VP302 SPV [2009] NSWSC 73, a solicitor negotiated a contract for the purchase of property by his clients. The vendor’s solicitor sent a draft contract. The purchasers’ solicitor went through it with his clients. They specified changes they required. The purchasers’ solicitor put the changes to the vendor’s solicitor. The vendor’s solicitor substantially accepted the changes, but in purporting to document them fiddled around the edges so that what was sent back was in effect a counter-offer. The purchaser’s solicitor already had a signed contract from his clients. They had signed the execution page. The solicitor played around with the contents of the previous pages so as to accept the vendor’s counter-offer, and sent off to the vendor’s solicitor the part signed by his clients. It is not suggested that he was not acting in what he considered to be his clients’ interests. But he did not take his clients’ instructions before agreeing to the counter-offer by sending off the part signed by them, amended in accordance with the counter-offer.
The purchasers desired to get out of the contract. They said that they had never agreed to some of its terms. The vendor’s position, not surprisingly was —
Too bad! your solicitor agreed to the terms we proposed on your behalf, we had no reason to believe he did not do so with your authority, we were entitled to rely on his ostensible authority, and you’re stuck with it. If you’ve got a problem go sue him.
Sounded like a lay down misere for the vendors to me, but this decision unearthed a panoply of authorities for the proposition that a solicitor has no ostensible authority to bind his client to an ordinary contract. (I say ‘ordinary’ because some kinds of contracts lawyers clearly do have ostensible authority to bind their clients to, for example contracts for the out of court settlement of litigation.) Justice White of the NSW Supreme Court found for the vendor on this question in the end, but had to get over a lot of hurdles along the way. This was his Honour’s review of the authorities, and analysis of this issue: Continue reading “Solicitor’s ostensible authority to contract on behalf of client”
Costs of complex litigation in presumptively costs-free consumer tribunals
A Queensland District Court judgment (Saunders v Paragon Property Investments Pty Ltd [2009] QDC 19) about the costs provision in a Queensland consumer tribunal has alerted me to a passage from a decision of the Queensland Court of Appeal (Tamawood Limited v Paans [2005] 2 Qd R 101) which might be useful in arguing for costs if you are successful in a complex VCAT proceeding. It runs contrary to the tenor of certain decisions of VCAT’s President Morris noted in Pizer’s Annotated VCAT Act, (3rd ed.) at points 6 and 7 on pp 426-7 in para [4039.1D], e.g. Buttigieg v Melton SC [2006] VCAT 1058, Mornington Peninsula SC v Fox, unreported, 24 October 2003.
Also, Ballymont Pty Ltd v Ipswich City Council [2002] QCA 454 at [19] to [20] is said to be authority for the proposition that the costs provisions of the consumer tribunal should not be thought to infect the costs provisions of an appellate forum. That is, the costs of an appeal from a consumer tribunal will be dealt with consistently with the costs of appeals generally. The useful passage from Tamawood, and a comparison between the Queensland costs provisions and VCAT’s are set out below. Continue reading “Costs of complex litigation in presumptively costs-free consumer tribunals”
Review of decisions to exclude lawyers from ASIC and NCA examinations
This is a note about a decision by a judge who is only a year older than me, Justice Nye Perram, a novel and somewhat unsettling circumstance: Collard v Australian Securities & Investments Commission (No. 3) [2008] FCA 1681. I looked him up because the judgment is so beautifully written, and found a welcome in Bar News (go to p. 97). The case is about lawyers’ rights to appear for clients to be examined by ASIC (and also, incidentally, by the National Crime Authority). It is also of interest to me because of its discussion of who bears the burden of proof when seeking review in administrative law of a bureaucratic act which statute stipulates may only be taken if it is reasonable (or necessary) to do so. Who bears the burden of establishing reason or unreasonableness? Continue reading “Review of decisions to exclude lawyers from ASIC and NCA examinations”
Calderbank offers
Calderbank offers — those marked ‘without prejudice except as to costs’ — are one of those subjects which recur so often that single judge decisions are constantly coming out, but one never knows exactly which ones to read. They all say much the same thing, with an equal degree of fuziness, and the illusion is that one may read the tea leaves to discern which way the wind is blowing. People are constantly typing ‘Calderbank offer’ into google and finding their way, for some reason, to my blog. So, for all those people, here is the latest and greatest discourse on the subject, a learned review in the nature of a tiny text by no less a luminary than a justice of the Supreme Court of NSW, Justice Beazley. It’s an extra-judicial bit of writing called, appealingly, ‘Calderbank offers’, available only on the website of the Supreme Court of NSW. Another authoritative and up-to-date source is the recently published second edition of Dal Pont’s also endearingly entitled Law of Costs.
A genuine case of good corporate citizenship? From a drug company??
Since I enjoyed the hospitality of an Australian doctor doing malaria research in The Gambia on my way to Timbuktoo, I have watched the pace of malaria research with a slightly above average level of interest. There are several diseases caused by different mosquitoes. Acute and severe malarias can lead to comas and deaths within hours or days. Then there is chronic malaria. Incubation periods can be up to 30 years, and recurrence is common. It saps the energy of the young people and weakens economies by draining the workforce and requiring expenditure on health care. Most of the deaths occur in children in sub-Saharan Africa (that is to say, all of the countries except the ones at the top of the continent). The childhood survivors may suffer cognitive impairment.
According to Wikipedia, symptoms short of coma and death include light-headedness, shortness of breath, tachycardia, as well as other general symptoms such as fever, chills, nausea, flu-like illness.
I was unhappy to learn that a major cause of preventable malaria deaths in south-east Asia is counterfeit anti-malarials which are difficult to detect except by laboratory analysis. But accelerated change for the better seems to be afoot. US$3 billion has been pledged towards eradication by the international community, and the Bill and Melinda Gates Foundation has given US$168 million for research on a vaccine, and Bill Gates successfully attracted a lot of attention by letting loose a swarm of mosquitoes in a packed auditorium to which he was speaking. But what prompted this post is some excellent news hiding away amongst tales of tragedy from a very Australian scourge. Glaxo Smith Kline, the world’s second biggest drug company, has decided to donate patents in technologies which are needed for malaria to a pool which may be accessed by scientists working on a cure. And they are cutting the prices of drugs in 50 of the worst off nations, mainly in Africa, to no more than a quarter of the prices in the West. Mind you, given that the cost of a couple of dollars for an insecticide treated mosquito net is too great for many rural African potential sufferers, I am not sure how much of a difference that is going to make.
The man who might have been Commissioner
Why the Westralians are reading about John Faine’s road trip is anyone’s guess, but here’s an article about the man who was offered, and nearly accepted, the role of Legal Services Commissioner. Maybe he will be the next Commissioner. Those would be interesting times I think.
Adjournments
In Brimbank Automotive Pty Ltd v Murphy [2009] VSC 26, Justice Kaye today neatly summarised the Victorian law in relation to applications to adjourn trials, in a thoroughly orthodox manner. All these kind of decisions say much the same thing, but with different emphases in relation to when a decision maker is entitled to say ‘Enough’s enough you goose. You’ve had your chances. I don’t care if you’re not ready for trial. We’re starting. Move it.’ The Readers’ Digest edition of KJ’s version — which makes no attempts to break free from The State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 — is:
‘a court should not refuse an application for an adjournment, where to do so would cause injustice to the party making the application, unless the grant of the adjournment would occasion irreparable prejudice to the other side, such prejudice not being capable of being remedied by an appropriate order as to costs or otherwise. … The exercise by the court of its discretion in such a case is not the occasion to punish a party, or its practitioners, for oversight, mistake or tardiness. Rather, the overriding requirement is that the court must do justice between the parties.’
Then his Honour upheld a Magistrate’s refusal to grant an adjournment application on the day of trial, but on the basis that it was unsupported by any evidence, truly an exceptional case. The full passage is as follows: Continue reading “Adjournments”
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.