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Kylie’s one-time lawyer goes down, with a ‘disgraceful and dishonourable’ finding

On 13 August 2008, Deputy President O’Dwyer found charges of misconduct at common law made out against Kylie Minogue’s one-time solicitor, the man towards the centre of the government’s Operation Wickenby investigation, Michael Brereton. See Legal Services Commissioner v Brereton [2008] VCAT 1723. Mr O’Dwyer found he had transferred more than $2.3 million of clients’ money out of his trust account contrary to the trust accounting rules. Since he did not turn up to the hearing, the finding is not altogether surprising. His counsel explained the solicitor ‘was attending to important business matters overseas, having invested in an information technology business with links in America and Europe,’ which makes me wonder whether he could not have used some of his investments to appear by video link. The Age‘s report is here.

The Commissioner is to be commended for making some sense of the very complex business transactions in which the solicitor and his clients were involved, and achieving the making out of the allegations of misconduct which were made out. So too the Tribunal, which had a difficult task in the absence of participation by the solicitor, and produced a spare but careful set of reasons. But it was not all wins for the Commissioner. Continue reading “Kylie’s one-time lawyer goes down, with a ‘disgraceful and dishonourable’ finding”

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Magnetic Island

I spent a week on Magnetic Island just now. It is a good place: a big island with four little suburbs but mostly national park, where people live, go to school, the bakery, the chemist, and the doctor. It has good supermarkets. It has wonderfully hokey restaurants like Man Friday’s, a Mexican restaurant which has been there for 25 years, with light shades made from large tins, painted, and patterns banged out with hammer and nails. It has a fine fish and chips shop cum equally hokey seafood restaurant, and it has an honest Italian restaurant with a location on the beachfront to die for but without the prices which generally go with such places. It has blue winged kookaburras and pheasant coucals, red-tailed black cockatoos and koalas, real beach houses (consider this one, and this one), a Friday nightmarket put on by the RSL with a food stall put up by an Indonesian woman, and a dessert stall put up by a local lady who will sell you a one person pavlova and a one person trifle for a total of $6. It has old tractors and dilapidated buildings, everything that a seaside holiday should have.

It is, in other words, the antithesis of Noosa and Cairns, more like the Inverloch of the tropics, and is therefore something to rejoice in. It is just off the coast of Townsville, you see, a working man’s town with few tourists. Continue reading “Magnetic Island”

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Limits on the Commissioner’s power to demand information and documents

Update: 26 February 2009 For an interesting review of the authorities relating to similar statutory investigators’ powers and the implied limitations to be found in the relevant statutes, see A. B. Pty Limited v Australian Crime Commission [2009] FCA 119, a decision of the Federal Court’s Justice Flick.

Original post: Once a complaint form has been lodged by a complainant with the Legal Services Commissioner, she has decided that it constitutes a ‘complaint’ as defined, has heard the respondent lawyer on whether it should be summarily dismissed, and has decided against that course, the Commissioner may exercise any or all of her draconian powers under s. 4.4.11 of the Legal Profession Act, 2004. That provision is reproduced in full at the end of the post, but it says that by a written notice, the Commissioner may require a lawyer under investigation to provide a ‘full written explanation’ of his or her conduct, and ‘any other information or documents’, regardless of whether they are privileged or not. The privilege against self-incrimination is no answer to such a demand. The equivalent section under the Legal Practice Act, 1996 was s. 149, and the equivalent inquisitor the Legal Ombudsman, whose last incarnation was Kate Hamond [sic., despite the spelling of the case name].

In Power v Hammond [2006] VSCA 25, Justice of Appeal Chernov said:

Continue reading “Limits on the Commissioner’s power to demand information and documents”

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

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

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

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

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Is interest a form of relief VCAT can grant?

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

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

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Memories of law school

When I started law school, I could not have told you the difference between a barrister and solicitor, and I was perplexed why all the judges’ initials were ‘J’. For some reason, I thought it was absurd that there was an Act called the Acts Interpretation Act. I was contemptuous but nonetheless attracted to the English nonsense of Lord Keith of Kinkel, Lord Jauncey of Tullichettle, Lord Morris of Borth-y-Gest, and Lord Brandon of Oakbrook (I was ignorant of the existence of Lord Salmon of Sandwich). But until I read this very English article in that very English paper, The Times, I thought that it had been thus since time immemorial. In fact, these geographical curlicues are a modern affectation. There was no Lord Denning of Dover, Lord Diplock of Wigan, Lord Reid of the Rock of Gibraltar, or Lord Wilberforce of Land’s End. Even today, not all law lords use a place in their title. More strength to them.

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Trial judge’s order that plaintiff’s solicitor pay costs personally overturned

The New South Wales Court of Appeal overturned a trial judge’s order that the plaintiff’s solicitor personally pay costs of joining a particular party against whom leave to discontinue was successfully sought in the first days of the trial. The order was made under s. 348 of the NSW Legal Profession Act, 2004, in a division of the Act (Part 3.2, Div 10) headed “Costs in civil claims where no reasonable prospects of success”. Basten JA gave the lead judgment with which the other judges agreed. The case is Flower v Toro Contructions Pty Ltd [2008] NSWCA 178

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The fidelity fund

Update, 26 August 2009: Justices of Appeal Buchanan and Neave agreed with Acting Justice of Appeal Kyrou in dismissing the punters’ appeal from Justice Pagone’s decision. See Vaughan v Legal Services Board [2009] VSCA 187.

Original post: The fidelity fund is one of the areas of the legislation about lawyers I have never had much to do with. The basic principle is that when lawyers steal clients’ money, or deal with it in breach of trust, a fund contributed to by all the lawyers in the state pays out the victims. We have professional indemnity insurance for negligence and other forms of civil liability, but it is not available where there is a ‘defalcation or default as defined by’ the Legal Profession Act, 2004 (or, before that, the Legal Practice Act, 1996), regardless of whether there is a claim on the Fidelity Fund (cl. 20.6(b) of the 2008/2009 policy). And we have the fund for fraud by solicitors involving trust money.

Justice Pagone’s latest decision in Vaughan v Legal Services Board [2008] VSC 200, is a case about the washup of the crimes of former Kew solicitor Julie-Ann Laird who stole millions from her clients, telling them that everything she did was protected by the fidelity fund (a detail she denied in her police interview). It is a nice, spare, judgment. She lost her practising certificate for 20 years in the Legal Profession Tribunal, and subsequently, on 1 June 2005, Justice Kellam jailed her for 7 years with a minimum of 3 and a bit (see R v Laird [2005] VSC 185). This particular case, under the Legal Practice Act, 1996, turned on whether the monies received by Ms Laird were received by her in the course of legal practice. Justice Pagone was obviously comfortably satisfied that the wrongdoing did occur in the course of or in connection with legal practice, but held against the plaintiff claimants on the fund on the basis that an exception to the availability of the fund applied. The exception was s. 208(3)(b) and excluded claims in respect of defalcations arising out of the investment of money by a solicitor that is not merely incidental to the legal practice engaged. The whole of his Honour’s analysis of whether what Ms Laird did was in the course of, or in connection with, legal practice is as follows:

Continue reading “The fidelity fund”

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The implied undertaking yields to compulsion; relevance to a second proceeding a powerful ‘special circumstance’

Justice Pagone’s decision in Griffiths & Beerens Pty Ltd v Duggan [2008] VSC 230 came along just at the very moment I needed to find out the answer to a question I have always been unsure about. Say you have documents from one proceeding obtained from the other side on discovery. They are relevant to a related subsequent proceeding. Do you have to discover them? If so, do you have to give inspection of them? If not, would it be a contempt of Court to discover them? Justice Pagone says you should discover away and give inspection subject to anything the second Court might do in the interests of justice, because the implied undertaking yields both to statutory compulsion (e.g. an ATO examination) and also to ‘curial process’ such as discovery and subpoenas. He also said something which, it appears to me, comes close to an assertion that the implied undertaking prima facie does not preclude use of a document obtained in one proceeding in another proceeding, and that what the undertaking is really about is the use of documents obtained in litigation for purposes other than litigation (e.g. publication to the media). Continue reading “The implied undertaking yields to compulsion; relevance to a second proceeding a powerful ‘special circumstance’”

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Solicitor litigants’ entitlement to costs

Solicitors who are parties to litigation and don’t hire other solicitors to represent them are the only people who are generally entitled to claim legal costs from the losing party even though they don’t have to pay lawyers anything. Engaging in litigation involving themselves is therefore a profitable activity if they win. The principle dates back to London Scottish Benefit Society v Chorley (1884) 13 QBD 872. The Supreme Courts of the land are grumbling about the anamlous nature of the exception, but reluctantly applying it. The most recent case is Freehills, in the matter of New Tel Limited (in liq) (No 4) [2008] FCA 1085.

The leading Australian case is Guss v Veenhuizen (No 2) (1976) 136 CLR 47. The most recent High Court authority to touch on the question is Cachia v Hanes (1994) 179 CLR 403, though that was a case about a claim for costs of a self-represented consulting engineer who was successful in litigation, and the Court there doubted, in dicta, the cogency of the Guss Case‘s reasoning. A judge of the The Full Court of the Supreme Court of Western Australia refused to apply the exception in Dobree v Hoffman (1996) 18 WAR 36, but in the Freehills Case, McKerracher J of the Federal Court sitting in Perth decided to refer it directly to the Full Court of the Federal Court, without formally determining the case, commenting only that he would consider himself bound by Guss’s Case. Other cases to apply the exception include: Continue reading “Solicitor litigants’ entitlement to costs”

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It’s summer in England

and this is what The Times thinks lawyers should be reading on their summer holidays:

  • The Art of the Advocate, by Richard Du Cann, QC, Penguin;
  • Famous Trials, selected by John Mortimer, QC, Penguin;
  • The Tyrannicide Brief, by Geoffrey Robertson, QC, Vintage;
  • To Kill a Mockingbird, by Harper Lee, Pan Books;
  • The Firm, by John Grisham, Arrow.

An absurd proposition certainly, for all but the most tragic (and there are many law tragics who are yet to come out of the cupboard), but for some reason I like the article. So here it is.

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Zarah wins

Ms Garde-Wilson’s back in business. In fact she never went out of business, since following the non-renewal of her practising certificate, she held a deemed practising certificate pursuant to the Legal Profession Act, 2004, s. 2.4.5(3) pending her VCAT merits review application. The assertion that she had ceased to be a fit and proper person seems fundamentally to have been about her contempt of the Supreme Court of Victoria in refusing to answer questions on oath, and certain criminal charges which were pending against her. The criminal charges went away, and the Board obviously subsequently formed the view that the unusual circumstances of the contempt conviction were not such as to demonstrate her unfitness to engage in legal practice, and so gave her her practising certificate back. These things are determined at the date of a decision, and so the fact that the Board determined now that Ms Garde-Wilson was a fit and proper person does not necessarily suggest that its decision back then was wrong.

I suspect that Justice Bell commencing his decision in Garde-Wilson v Legal Services Board [2007] VSC 225:

‘The plaintiff, a young and intelligent solicitor, was working hard in a firm specialising in criminal law,’

must not have harmed her cause. So too Justice Harper’s reasons for not imposing any sentence on her upon finding her guilty of contempt of court, which began:

‘Zarah Garde-Wilson, you are a solicitor who, on the evidence available to me, is intelligent, hard working and determined to represent your clients to the best of your ability. These are valuable attributes in any legal practitioner. Another such attribute is that combination of learning, technical legal skills and common sense which, appropriately mixed, results in sound judgment. None of us get the combination exactly right all the time.’ (R v Garde-Wilson [2005] VSC 452)

The Age article alerted me to a Zarah decision I had missed, about the detail of which I will fill you in on soon. Here it is: Garde-Wilson v Legal Services Board [2008] VSCA 43. The Court of Appeal, led by Justice of Appeal Dodds-Streeton, overturned Justice Bell’s decision mentioned above, which had dismissed Ms Garde-Wilson’s application for judicial review of the Board’s decision to suspend her practising certificate. Justice Bell had said that Ms Garde-Wilson had a perfectly adequate alternative remedy in the merits review option in VCAT, and that is a good reason why judicial review should not be availed of. Not so, said the Court of Appeal.

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On “cowardly”

Stephen Witham (pictured) moved into Michael Flaherty’s flat. The relationship quickly soured when Witham assaulted Flaherty’s girlfriend, and stood over people for drugs and money. So Flaherty got some mates together, hit Witham about with baseball bats, hogtied him with ropes and cable ties, wrapped him in a doona, popped him in the boot, and drove him down Mirboo North way for the purpose of executing him in a pine plantation. Before shooting him, he had a chat with Witham and asked him if he had any final requests. Witham asked for a beer, and they each had one from a six pack. Then Flaherty kicked Witham so as to roll him down a hill, and acceded to his request not to be shot in the face, shooting him dead, in the back of the head. Afterwards, he boasted about the killing. It might have gone undetected but for an anonymous tip off to the police. He showed no remorse in his police interview, pleaded guilty at the first opportunity, and was not known to have been violent in the past. According to Justice Kaye, he did later come to realise the enormity of his offending and was genuinely contrite. Continue reading “On “cowardly””

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When will a professional discipline proceeding be stayed pending overlapping criminal charges?

Post updated 7 April 2013: See now ML v Australian Securities and Investments Commission [2013] NSWSC 283 (application to disbar liquidator not stayed pending related criminal proceedings which were ‘on the cards’: suggested that a secrecy regime could be imposed in respect of the disciplinary proceedings so as to protect the liquidator in the criminal proceedings).

Post updated 1 March 2013: See also Re AWB Limited [2008] VSC 473.

Original post: Dedicated readers will already have been following the saga of the misconduct prosecution of Kylie Minogue’s one-time lawyer. Casual readers can lap it all up here. Deputy President Dwyer’s reasons for refusing to stay the disciplinary proceedings have hit the internet: Legal Services Commissioner v MB [2008] VCAT 1341. For some reason, the lawyer adduced into evidence a letter from the Australian Crime Commission which said that there was no overlap between the subject matter of the disciplinary charges and the subject matter of the Australian Crime Commission’s investigation, ‘pulling the rug’, as Deputy President Dwyer put it, from the lawyer’s own case. Apart from some newspaper articles suggesting that up to 50 people might be prosecuted as a result of ‘Project Wickenby’, there was not a lot of evidence that the solicitor was going to be prosecuted imminently or otherwise. So it is not an especially interesting decision, legally. It is helpful to have a VCAT decision which rehearses the authorities on the question of stays pending criminal proceedings in their application to disciplinary proceedings, though. Continue reading “When will a professional discipline proceeding be stayed pending overlapping criminal charges?”

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Burden of proof in actions to cancel a practising certificate or strike a lawyer off the roll of practitioners

In Stanoevski v Council of the Law Society of NSW [2008] NSWCA 93, Justice of Appeal Campbell, with whom Justice of Appeal Hodgson and Acting Justice of Appeal Handley agreed, has provided important guidance on who bears which burdens of proof in cases where a legal regulator seeks to cancel a practising certificate or have a lawyer struck from the roll. (Cancellation by a legal regulator of a practising certificate lasts only as long as the practising certificate (i.e. until the end of the financial year), whereas striking off the roll lasts until an application for readmission succeeds, at which point, an application may be made for a practising certificate. To complicate things, though, cancellation of a practising certificate as a result of a disciplinary hearing by VCAT may result in a condition that the lawyer not reapply for practising certificate for a specific period. Being struck off the roll and having your practising certificate cancelled are not all that different really.) In summary, the situation is as follows:

  • applicants for admission have the burden of establishing that they are fit and proper persons to be admitted to practice and enrolled by signing the roll of practitioners: Re B [1981] 2 NSWLR 372 at 403; Wentworth v NSW Bar Association (Court of Appeal, 14 February 1994, unreported) at 5;
  • legal regulators who apply for an order cancelling a practitioner’s practising certificate have a civil onus of proving on the Briginshaw standard that the practitioner is not, at the time of the hearing, a fit and proper person to practise;
  • legal regulators who apply for an order striking off a practitioner, that is, for an order that their name be struck off the roll of practitioners, have a civil onus of proving on the Briginshaw standard that the lawyer is not a fit and proper person to practise, and that the likelihood is that they will continue not to be for the indefinite future;
  • lawyers who have either been struck off, or who have been found guilty of misconduct but rely on remediation during the time between the misconduct and the hearing so as to argue that they are now fit to engage in practice bear the burden of proving that the new leaf they have turned over is as green and shiny as they claim. Continue reading “Burden of proof in actions to cancel a practising certificate or strike a lawyer off the roll of practitioners”
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The costs disclosure provisions in statutes regulating the profession are not codes

In Nicholson v B&S [2000] VLPT 28, the Legal Profession Tribunal’s Registrar Howell considered whether the costs disclosure provisions of the Legal Practice Act, 1996 constituted a code which demonstrated an intention of the parliament to displace the common law. ‘Nope’, he said:

‘I have considered whether the provisions of Division 1 of Part 4 of the Legal Practice Act 1996 created a code for the provision of information to clients and thus relieved legal practitioners from their previous obligations to provide information. I have concluded that Division 1 is not a code because there is nothing in Division 1 which indicates to me that the legislature intended to change the position at common law or to relieve practitioners of their fiduciary obligations.’

Continue reading “The costs disclosure provisions in statutes regulating the profession are not codes”

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Message to Hullsey: That’s not a big fee…

In VCAT’s Legal Practice List the other day, defending a firm alleged to have charged too much at the rate of $230 an hour, I made the point in cross-examination that London tax silks were wont to charge £600 per hour. As I uttered the words, I was visited by self-doubt. The amount sounded wrong, too much. But hell was I out of date! They don’t charge £600 an hour anymore: they just charge £20,000 ($41,000) an advice. In fact top London firm partners charge between £600 and £1400 an hour. Or so The Times says in a feature entitled ‘Are Top Lawyers Worth Their Huge Fees?’ And the AFR reports today that each of Freshfields, Linklaters, Allen & Overy and Clifford Chance topped the £1 billion mark in turnover, more than half of it from outside London, including China and the Middle East. Victoria’s Attorney General, worried about my confrères’ wont* to charge $14,000 a day has just gotta take a chill pill. This is the most interesting bit of The Times’s article: Continue reading “Message to Hullsey: That’s not a big fee…”

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Seems the implied waiver hystericals were right after all

Lawyers Weekly has an article by some folk at Allens noting Justice Branson’s decision in Rich v Harrington [2007] FCA 1987, a mega anti-discrimination suit brought by Christina Rich, a former partner of PricewaterhouseCoopers Australia against the other partners. There are so many privilege cases which come out, it’s hard to know which ones to read. This one would be a good choice: it covers implied waiver, the prerequisites to a successful assertion of privilege over communications with in-house counsel, and the common interest exception to waiver, namely most of the tricky bits.

Pricewaterhouse’s lawyers wrote to Ms Rich saying:

‘Our client has acted at all times with the benefit of external advice and does not believe that there has been any victimisation or other conduct for which compensation could properly be sought.’

That was held to waive privilege in the advice so as to entitle Ms Rich to a copy of it. I have always thought people have been overly hysterical about the dangers of waiver, and, living in fear of it as they do, forego forensic advantage that they might obtain but for their phobia.  Admittedly, this single decision does seem to add fuel to the hystericals’ fire. Allens’ people’s message is: never mention legal advice. To give them their due, they were writing for a national rag. Victorians in fora outside the Federal Court can probably relax a bit more than that because of the Court of Appeal’s decision in Secretary, Department of Justice v Osland [2007] VSCA 96, which the authors mention. Even Victorian Federal Court judges are likely to be influenced by that decision.

One aspect of the law of privilege about which lawyers are more comfortable and relaxed than perhaps they might be is the entitlement of the employers of in-house lawyers to claim privilege over their advice and work. This decision confirms that they are in fact more comfortable and relaxed than they should be.

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Victoria to adopt uniform evidence legislation

Update, 25 January 2010: The Act commenced on 1 January 2010.  See now this post.

Update, 13 January 2009: The Evidence Act, 2008 was assented to on 15 September 2008 and is to commence on a day to be proclaimed, probably no later than the end of this year.

Original post: The government has finally introduced the Evidence Bill, 2008 which, when passed, will make Victoria the 5th jurisdiction (after the Commonwealth, NSW, ACT, Norfolk Island and Tasmania) to adopt the uniform evidence legislation. It is a good development, because some of the common law rules of evidence, as amended by the Evidence Act, 1958, are so ridiculous that, according to a most experienced Supreme Court judge I heard speaking extra-curially, only especially irritating middle class unrepresented litigants ever dare to raise them.

It will also be good because the law clusters more efficiently around statutory provisions. Tracking the evolution of common law concepts is made difficult by inconsistency of language, whereas there is only one statutory text. Statutory text can have its own set of problems — the ad hoc series of amendments to the Evidence Act, 1958 which don’t hang together too well being a good example — but great care was taken in the drafting of the uniform legislation. Now to find all the cases about illegally obtained evidence in civil cases, we will be able to tap the relevant sub-section of the Act into Case Base, or even Austlii’s ‘Note Up’ function. A further advantage is this: the Federal Court and the Supreme Court of NSW are much better at publishing reasons for evidentiary rulings than the Supreme Court of Victoria. So Victorians will be able to make use of the many decisions of those courts which state the law relatively consistently and clearly by reference to modern cases, whereas evidence texts on the common law are replete with 19th century authority, and the common law states’ law of evidence is divergent because of different statutory modifications, but not sufficiently divergent to justify separate texts.

The Attorney-General’s media release is all about the millions which will be saved by the abolition of the best evidence rule, which requires the originals of documents, rather than copies, to be adduced in evidence. He obviously hasn’t noticed that no one takes any notice of the rule anyway. Indeed, one of Melbourne University’s evidence gurus says the rule no longer exists.