Michael O’Brien of Aitken Partners has referred me to a scorching judgment delivered by Justice Reeves in the Federal Court in Brisbane last week – Superior IP International Pty Ltd v Ahearn Fox Patent and Trade Mark Attorneys [2012] FCA 282.

The patent attorneys had served a statutory demand for $10,706 on their former client. The client asserted a genuine dispute under s 459G of the Corporations Act and ultimately succeeded in having the stat demand set aside. This outcome cost the parties a combined total of approximately 550 pages of affidavit material and looks set to cost someone (unlikely to be the parties themselves) legal costs of more than twice the actual amount in dispute.

The judgment refers to the Civil Dispute Resolution Act extensively and takes both parties’ lawyers to task for their apparent ignorance of it and related principles arising from the Federal Court Act and ethics generally. (It will be recalled that the Civil Dispute Resolution Act is the federal cousin of Victoria’s Civil Procedure Act).

Some tasters from the reasons –

….

7. The hearing lasted a full day, a large part of which was taken up with objections to the voluminous affidavit material described above. In keeping with their bellicose approach thus far, when I began to hear those objections, I discovered that there had been no discussion between the two lawyers to attempt to resolve any of them and thereby avoid both their clients’ and the Court’s resources being wasted on that exercise. To compound this situation even further, during the hearing of those objections it emerged, incredible as it may sound, that neither lawyer appeared to have a copy of the Federal Court Rules 2011 or the Evidence Act 1995 (Cth) with him in court. Thus, neither of them could tell me which section or rule he was relying upon to make particular objections.

8. The final travesty came at the end of the day’s hearing when, during submissions in reply, the lawyer for Superior IP sought leave to rely upon a large amount of additional material that he had not put forward earlier. When I say “final travesty”, I should add that there was a number of other less significant defaults on both sides that I have failed to mention (above) in the interests of brevity.

9. It hardly needs to be said that what I have just described is the absolute antithesis of the overarching purpose of civil practice and procedure set out in s 37M of the FCA Act, viz the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. It is not overstating the matter to observe that this is the sort of conduct that brings the legal profession into disrepute, that significantly undermines the efficient disposal of civil litigation and that has the potential to erode public confidence in the administration of justice in this country. I therefore propose to return to this matter when I come to consider the question of costs at the conclusion of these reasons. [my emphasis added.]

…..

46. … since an obvious conflict is likely to arise between the interests of the clients and that of their respective lawyers on [the issue of costs of this proceding], I consider I should make the following directions:

1.That each of the two lawyers concerned is to provide a copy of these reasons to his respective client and advise it to seek independent legal advice on the question of the costs of these proceedings.

2. That the two lawyers concerned be joined as parties to these proceedings for the limited purpose of determining the question of the costs of these proceedings.

47. Finally, I intend to direct the Registrar to provide a copy of these reasons to the Queensland Law Society, the Bar Association of Queensland and the Legal Services Commission, so that those bodies may take such action as they consider appropriate in relation to the conduct of the two lawyers concerned.

Ouch!