Category Archives: Professional indemnity

Client complaints – a tool kit for solicitors

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Some lawyers have never received a complaint from a client.

Or so they say.

Such prodigies, liars and recent arrivals to the profession are vastly outnumbered by the rest of us.

This might explain the big audience of solicitors who turned out this week at a seminar Gordon & Jackson hosted on the twin topics of client complaints and recent cases dealing with the Civil Procedure Act.

I delivered a paper on the first topic. The paper’s section headings will give you the flavour of its content:

  1. Complaints are inevitable;
  2. Try not to take complaints personally (and get help, of whatever variety);
  3. Categories of complaint under the Uniform Law;
  4. Categories of complaint beyond the Uniform Law;
  5. Your LPLC insurance – the good news and the bad;
  6. Avoiding complaints in the first place; and
  7. Professional standards scheme – you are a participant, aren’t you?

My colleague Monika Paszkiewicz spoke on the Civil Procedure Act. Her paper includes reference to Judd J’s recent observations (in ACN 005 490 540 Pty Ltd v Robert Frederick James Pty Ltd [2016] VSC 217 at paras 18 -19) that solicitors who threaten each other too willingly with personal costs applications under the Civil Procedure Act might themselves be breaching the very statute they are invoking.

Client complaints and the Civil Procedure Act have obvious potential overlap for litigation solicitors. Download the two papers (combined as a single document) here and file them away with your Civil Procedure Act resources.

Waiter! There’s a Chinese restaurant in my easement!

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The lawyer who acts for himself is commonly thought to have a fool for a client. But what about the lawyer who acts for the company of which he is a director and shareholder?

A Melbourne solicitor who acted in several capacities for a private company must now be pondering this question following the non-party indemnity costs order made against him personally in 1165 Stud Road Pty Ltd v Power & Ors (no 2) [2015] VSC 735. (The case was decided just before Christmas but somehow was published on Jade only this week).

The solicitor was (indirectly) one of the main shareholders in 1165 Stud Road Pty Ltd (“Stud Rd”). He was also its company secretary and one of its two directors. He dealt on its behalf in several controversial transactions and also acted as its solicitor in both litigation and conveyancing contexts.

In 2007, Stud Rd bought a block of land in Rowville. The block’s only road access was via an easement. But two years earlier a neighbour had built a Chinese restaurant on that easement.

In 2012, Stud Rd sold its landlocked block for $2.3 million. Its s 32 statement neglected to mention the slight issue of the obstructed easement. That sale then fell over before settlement and Stud Rd sued the purchaser and also the owner of the offending restaurant (“Palms”).

Early in the litigation, Palms demanded security for costs from Stud Rd. Stud Rd’s solicitor/company director/company secretary/etc. wrote back refusing and saying that Stud Rd had ample equity in the Rowville land and could afford to meet any likely costs order against it. That much was true.

But things changed when Stud Rd subsequently sold the land afresh. The new sale wasn’t disclosed to the other litigants nor was the new contract of sale discovered pursuant to Stud Rd’s continuing discovery obligations. Stud Rd also omitted to mention to the other parties its distribution of the net sale proceeds to various of its own related interests.

As the trial loomed closer, Stud Rd went into voluntary liquidation. The proceeding was discontinued before trial as a consequence.Palms had nevertheless spent over $300,000 preparing for the trial. There being no prospect of recovering those costs from the liquidated company, Palms applied instead for non-party costs orders against Stud Rd’s solicitors and its two directors personally.

Palms succeeded – but only against the director who had also acted as the company’s solicitor. His multi-faceted role as the company’s director, shareholder AND external solicitor was said by Vickery J to constitute “exceptional circumstances”.
Here is a taste:

138. It is clear that [the solicitor], in conducting the Proceeding as a solicitor on behalf of the Plaintiff, in respect of which he was not only a director but also, through a corporate vehicle, a shareholder, was in breach of paragraphs 9.2 and 13.4 of the Professional Conduct and Practice Rules 2005 and placed himself at serious risk of being in breach of paragraph 13.1 of the rules. As a solicitor in active practice, [the solicitor] ought to have been aware of the effect of these Rules.
139. This placed [the solicitor] in a conflict of interest and rendered his conduct of the litigation on behalf of the Plaintiff improper.
140. This was so despite the fact that, during the life of the Proceeding, neither Palms nor its solicitors … ever once raised the issue of conflict of interest or demand that [the solicitor], or any of the firms at which he worked, cease to act in the Proceeding due to his conflict.
141. Reference is made to paragraphs 9.2, 13.1 and 13.4 of the Professional Conduct and Practice Rules 2005 published by the Law Institute of Victoria, which was tendered in evidence:
9.2 A practitioner must not accept instructions to act or continue to act for a person in any matter when the practitioner is, or becomes, aware that the person’s interest in the matter is, or would be, in conflict with the practitioner’s own interest or the interest of an associate.
….
13.1 A practitioner must not act as the mere mouthpiece of the client or of the instructing practitioner and must exercise the forensic judgments called for during the case independently, after appropriate consideration of the client’s and any instructing practitioner’s wishes where practicable.
13.4 A practitioner must not unless exceptional circumstances warrant otherwise in the practitioner’s considered opinion:
13.4.1 appear for a client at any hearing, or
13.4.2 continue to act for a client,
in a case in which it is known, or becomes apparent, that the practitioner will be required to give evidence material to the determination of contested issues before the court.

142. It is likely that [the solicitor] was not able to bring an independent mind to decisions made on behalf of the Plaintiff in the conduct of the Proceeding by reason of his conflict of interest and it is likely that a number of the decisions he made were infected with this conflict.
143. An order for costs against a non-party is not dependent upon, but can take into account, any improper conduct by the non-party….

The upshot was that the solicitor personally [cf the firm that employed him] was ordered to pay Palms’ cost of the proceeding on a standard basis until the date of the undisclosed sale and on an indemnity basis thereafter.
A final point is worth noting. Palms’ application was brought partly in reliance upon s 29 of the Civil Procedure Act [as discussed in Yara v Oswal blogged here] but that limb of the application was held to be statute-barred as it had not been made before the proceeding was “finalised” as required by s 30. However, this missed deadline did not matter for Palms as the Court held that it had power to order the costs against the solicitor under s 24 of the Supreme Court Act and/or in its inherent jurisdiction.

The lessons from this case? Four occur to me.

  • Acting for yourself and/or interests close to you is perilous.
  • A lawyer and client with apparently aligned commercial interests might still have a conflict of interest if the lawyer’s forensic judgment is thought to be compromised as a result of that close association.
  • Lawyers should not act in matters in which they are likely to be material witnesses.
  • And finally, never be too reassured by the fact that no conflict of interest is suggested by your opponents.

More overblown than overarching: Court of Appeal smacks solis with costs orders and disallows fees

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The Victorian Court of Appeal last week thumped three large law firms for work which was not “reasonable and proportionate” within the meaning of the Civil Procedure Act 2010.

What’s more, it effectively invited other Victorian courts to do likewise more often.

The case is Yara Australia Pty Ltd v Oswal [2013] VSCA 337.

Expect to hear a lot more about it. It is the first detailed appellate consideration of the Civil Procedure Act obligations on parties and their lawyers.

Many civil litigators will find it confronting reading.

The case

In Yara, three applicants sought leave to appeal against their failure to obtain security for costs. Although they were later able to point to a wider strategic purpose, the amount of security sought between the three of them ostensibly totalled about $141,000, (relatively small beer for the Court of Appeal.)

The applicants had separate but similar interests. Between them, they were represented by solicitors Clayton Utz, Herbert Smith Freehills and K & L Gates, 3 silks and 3 junior counsel.

Their application went down after a single day’s hearing. And worse was to come for the lawyers.

After refusing the application, the Court of Appeal of its own motion invited submissions on the question of whether anyone had breached their overarching obligations under the Civil Procedure Act 2010 in the conduct of the leave to appeal application.

The resulting judgment starts with two factual questions. “First, whether there was any over- representation of a party by counsel, and second, whether the material produced on the hearing of the application for leave to appeal was unnecessary or excessive.”

The Court was ultimately persuaded that the abundance of barristers did not constitute “over-representation” but it was less forgiving about the documentation filed in support of the application.

Why? Because even excluding the notices of appeal and written cases, the application book exceeded 2700 pages and 6 lever arch folders.

In their joint judgment Redlich and Priest JJA and Macaulay AJA were scathing. They variously described parts of it as “entirely otiose”, “not directly relevant”, “excessive”, “superfluous”, “entirely unnecessary” , “repetitious” and containing “a substantial amount of duplicated material”.

The Court concluded by ordering each applicant to pay the respondents’ costs of the application.

Each applicant’s solicitor was then hit with a double whammy. First, each solicitor was ordered to indemnify its client for half of the respondent’s costs “incurred as a consequence of the excessive or unnecessary content of the application books.” Secondly, each applicant’s solicitor was “disallowed recovery from the applicant of 50% of the costs relating to the application books, and costs incidental thereto.”

Some cherries from the judgment

The Court of Appeal is clearly hoping this approach will catch on.

And judges are being invited to act on their own initiative where the parties themselves are bashful.

Here are some extracts from the judgment (citations omitted) to give you its flavour.

5       The statutory regime and the obligations that are imposed by the [Civil Procedure Act] have not previously been considered in any detail at an appellate level. As the enforcement of the overarching obligations under the Act has been so little traversed, there is presently little to guide judicial officers as to the extent of the Court’s powers and the means by which parties or their legal representatives can be penalised for any contravention. We have thus addressed some of these issues at greater length than would ordinarily be necessary when a contravention of the Act is under consideration.

….

14     Each party and their solicitor and counsel have an obligation to comply with the overarching obligation. Whether any of them have breached that overarching obligation is to be determined by an objective evaluation of their conduct having regard to the issues and the amount in dispute in the proceeding. The legal practitioners’ duty is non-delegable. The obligation will override their duty to their client where the discharge of that duty would be inconsistent with the overarching obligation. The legal practitioner will not be relieved of this overarching responsibility because of the instructions of their client.

15     Legal practitioners, whether solicitor or counsel, involved in the preparation of pleadings, affidavits or other materials that are to be used in the proceeding or who provide advice as to such matters, have individual responsibilities to comply with the overarching obligation. Both solicitor and counsel also have an overarching responsibility with respect to the extent and level of their client’s representation. Each must ensure that, having regard to the issues, the extent and level of representation proposed is reasonable and proportionate. Advice or instructions given or received by legal practitioners, and instructions given by the client, may inform but will not be determinative of the question whether, viewed objectively, there has been a breach of the obligation.

         ….

18     Section 29 of the Act provides the Court with broader and more flexible powers than under the Supreme Court (General Civil Procedure) Rules 2005 (‘the Rules’) or under its inherent jurisdiction. Rule 63.23(1) enables the Court to make orders for costs against a legal practitioner who has caused costs to be incurred improperly by a failure to act with reasonable competence and expedition. However, the primary object of r ? 63.23(1) is not punitive or disciplinary but compensatory, enabling reimbursement of a party’s costs incurred because of the default of the solicitor. The primary object of the Rule is not to punish the solicitor, but to protect the client who has suffered and to indemnify the party who has been injured. Rule 63.23(1) also protects solicitors from the negligence or incompetence of counsel.

20     The Court’s powers under s 29 of the Act include the power to sanction legal practitioners and parties for a contravention of their obligations …. Moreover, the power to sanction is not confined to cases of incompetence or improper conduct by a legal practitioner. Where there is a failure by the practitioner, whether solicitor or counsel, to use reasonable endeavours to comply with the overarching obligations, it will be no answer that the practitioner acted upon the explicit and informed instructions of the client. A sanction may be imposed where, contrary to s 13(3)(b), the legal practitioner acts on the instruction of his or her client in breach of the overarching obligations.

21     …. In our view, the enactment of s 29 together with s 28(2) imbues the Court with broad disciplinary powers that may be reflected in the costs orders that are made. The Court is given a powerful mechanism to exert greater control over the conduct of parties and their legal representatives, and thus over the process of civil litigation and the use of its own limited resources.

22     The Act does not merely reaffirm the existing inherent powers of the court but provides a powerful indication of the will of the Parliament about the values sought to be achieved by the way in which cases are managed in the courts and the balances that have to be struck….

23     It is therefore somewhat surprising that despite the length of time the Act has been in force, the scope of the sanction provisions in the Act for a failure to comply with the overarching obligations has been under-utilised.

….

25     The explanation for the under-utilisation of the provisions of the Act lies in part in a false perception that these provisions and the overarching obligations do not effect any material change to the Rules and the inherent jurisdiction of the Court…. The Act creates obligations which extend beyond those in the Rules and confers upon the courts a panoply of powers not found in the Rules.

26     The Act prescribes that parties to a civil proceeding are under a strict, positive duty to ensure that they comply with each of the overarching obligations and the court is obliged to enforce these duties. The statutory sanctions provide a valuable tool for improving case management, reducing waste and delay and enhancing the accessibility and proportionality of civil litigation. Judicial officers must actively hold the parties to account.

27     Yet as we have observed, sanctions imposed for a breach of any overarching provisions have been a rarity at first instance. When no party invites the court to determine whether there has been a breach of the Act, there may be a judicial disinclination to embark upon such an own-motion inquiry for fear that inquiry as to a potential breach may be time consuming and may require the introduction of material that was not before the court as part of the proceeding. Such fears cannot relieve judges of their responsibilities….

You can probably still hear this judgment causing a hush in mega-firms the length of Collins Street (starting with their photocopying departments).

Clayton Utz and the lingering smell of smoke

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Are you a commercial litigator with an interest in client confidentiality and conflicts of interest? Or in schadenfreude?

Then you will probably appreciate Justice Elizabeth Hollingworth’s decision last month in Dale v Clayton Utz (No 2) [2013] VSC 54

A quick refresher before the summary.

Allan Myers QC and Clayton Utz both have singular reputations among Australian lawyers.

Myers is a top shelf commercial silk and philanthropist. His fame, prestige and profile are surely matched by few other practising lawyers in the nation. Apart from that, in his spare time he has dabbled in investments sufficiently to acquire, among other things, a Polish brewery, vast tracts of outback Australia and an entry in BRW’s Richest 200 list.

Clayton Utz’s reputation is more enigmatic. It is a mega firm employing hundreds of no-doubt talented and principled lawyers. But in the public mind it is arguably still best known for its murky role defending Big Tobacco against a claim by a dying ex-smoker, Mrs Rolah McCabe in 2002.

Mrs McCabe won at first instance (see decision here) after the cigarette company’s defence was struck out. The trial judge concluded, among other things, that through its “document retention policy”, the process of discovery in the case had been subverted by the defendant and its solicitors (Clayton Utz) with the deliberate intention of denying a fair trial to the plaintiff.

That decision was reversed by the Court of Appeal here but Clayton’s Utz’s judicial vindication was undermined by the PR shellacking The Age (and other media) gave Clutz and its client in stories like this and this.

How did the The Age get its material?

We now know that some of The Age’s information was leaked to it in 2006 by one time Clayton Utz litigation partner (and also 2004 Law Institute of Victoria president) Chris Dale.

For reasons which the Supreme Court might yet find were or were not related to the McCabe case, Clayton Utz had expelled Dale from its partnership a year earlier in October 2005.

Almost six years later, in September 2011, Dale sued Clayton Utz for breach of the partnership agreement.

Which brings us back to the Victorian Supreme Court’s recent decision.

Clutz filed its defence against Dale in January 2012. That defence was signed by Allan Myers QC.

Dale promptly objected to Myers’ involvement. He said that Myers had advised him in relation to his dealings with the Clutz partnership during 2004 and 2005 and accordingly Myers should not act against him now.

Clutz held its ground so Dale sought an injunction to prevent Myers acting further in the case.

Last month Dale won that argument and Myers exited the proceeding. (The wider dispute between Dale and the partnership remains to be determined.)

Justice Hollingworth’s 40 page judgment is a good read. There is something in it for you whether you are in the mood for a John Grisham-style legal who-dunnit or some pointers on how not to draw affidavits on this type of issue, lawyers’ obligations to parties they have formerly (and possibly informally as well) advised, concepts of ‘contractual’ and ‘consensual’ retainers and much else besides.

But the most confronting topic for mine is the treatment of obligations towards former clients (including people who might never have been ‘clients’ in a formal sense).

In short, Dale swore on affidavit and in cross-examination that as his relationship with the Clutz partnership frayed in 2004 and 2005 he sought and obtained Myers’ oral advice.

Myers denied this on affidavit and was not cross-examined.

Dale’s version (at least as to a single conference of about one hour’s duration in 2004) was preferred by Hollingworth J thus –

33     In so far as Mr Myers states … that he “was not retained” by Mr Dale, I read that as no more than a statement of his personal belief that he was not retained. Mr Myers cannot give evidence as to whether he was in fact retained. Whether or not there was a retainer is a legal matter for the court to determine, from the objective facts, and not from the subjective beliefs of the lawyer or the party alleging to have retained the lawyer.

….

59     In so far as Mr Myers states … that he was not asked to and did not provide legal advice to Mr Dale, given that he has no memory of this conversation at all, I read that as no more than a statement of his personal belief … that he was not retained to provide legal advice.

 ….

135   I accept that Mr Myers did not believe he was being professionally retained. But Mr Myers did not say to Mr Dale that he was seeing him other than in his capacity as senior counsel, even though the discussion lasted for about an hour and went into some detail about Mr Dale’s current predicament. Someone in Mr Myers’ position could easily have taken steps to make it clear that he was not acting in a professional capacity.

….

Conclusion

176   I propose to grant an injunction to restrain Clayton Utz from continuing to engage Mr Myers in this proceeding. Such an injunction would be justified by any of the following findings:

(a)     That a professional relationship existed between Mr Dale and Mr Myers in relation to the August 2004 meeting;

(b)     Further and alternatively, that Mr Dale communicated confidential information to Mr Dale [sic.— Myers?] in the August 2004 meeting, and there is a real and sensible possibility of a revival of recollection, about matters which are of critical importance in this proceeding;

(c)      Further and alternatively, because a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice required that to occur.

The bottom line for Clayton Utz? The firm needs a new silk in for its continuing stoush with Dale.

The bottom line for the rest of us? An hour’s discussion about which you have absolutely no memory or record can be enough nine years later to have you ejected from acting in litigation against the other party to that forgotten discussion.

For the record:

  • Hollingworth J stated (at para 121) “By accepting Mr Dale’s account, I am not in any way suggesting that Mr Myers is not a truthful witness”.
  • In late 2001 or early 2002 I acted for Mrs Rolah McCabe for approximately 48 hours in her case against Clayton Utz’s then-client British and American Tobacco Australia Services Pty Ltd.

How Edelsten’s costs application against solis backfired

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Last October I posted about Dr Edelsten’s adventures in the Supreme Court of Victoria against a lady friend in (Mainly) keeping a sugar daddy’s confidences.

A quick reminder. In an entertaining but unflattering judgment Dr Edelsten won an order for $US5000 plus certain limited suppression orders against a Ms da Silva.

Among other things, Beach J found that “most of the evidence given by the defendant was demonstrably false and could not be believed. However, Dr Edelsten was no more an impressive witness than Ms da Silva.”

Now the aftermath (which escaped me among the distractions of the summer holidays).

The week before Christmas Dr Edelsten went back to court and sought his costs of the litigation against the defendant’s solicitors – on an indemnity basis.

Among other things, he relied upon the Civil Procedure Act.

He argued that swathes of the defendant’s case had no proper basis, her solicitors must have known this and therefore they should not have persisted with key aspects of the defendants’ case.

Beach J was not swayed.

“I am satisfied that at all times … the defendant’s solicitors were acting on the instructions of the defendant. Indeed, when the defence was eventually abandoned, it was abandoned in the face of the defendant’s evidence to the contrary.

… Having regard to the instructions the defendant’s solicitors then possessed, I see nothing improper, or in breach of any rule of conduct, or in breach of any overarching obligation or other provision of the Civil Procedure Act, in the drawing, settling and filing of the defendant’s defence. …

It is always possible to say that an issue, upon which it becomes clear that a party will ultimately be unsuccessful, could have been abandoned earlier if greater diligence had been exercised. However, the mere failure to abandon a point at the earliest possible time does not mandate a conclusion that an overarching obligation of the Civil Procedure Act has been breached.

…. In the end, I have come to the conclusion that while a counsel of perfection would have suggested that the concession made on the afternoon of the third day of the trial could (and possibly should) have been made 24 hours earlier, the failure to take this step at that time did not involve the contravention of any of the overarching obligations in the Civil Procedure Act.

And the ordeal was not yet over.  Beach J concluded with an order that Dr Edelsten pay the solicitors’ costs of his failed application on a solicitor /client basis (apparently because the judge considered the application had been sufficiently hopeless to warrant costs on more than the usual party/party basis).

The costs decision is here.

 

Tripping up on the slip rule

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“Since the abolition of capital punishment there is now no mistake by a lawyer in Australia that cannot be effectively reversed.”

Or so I was told long ago after a bad day in the office as an articled clerk.

My supervising partner had in mind the slip rule.

The slip rule is the rule that allows courts to correct minor glitches in their own judgments and orders without the trouble and expense of an appellate court’s intervention.

The slip rule is within courts’ inherent jurisdiction but it is also succinctly expressed in most courts’ own rules — see for example Federal Court rule 39.05 and, in Victoria, Supreme Court rule 36.07; Magistrates’ Court rule 36.08 and VCAT Act s 119.

But the slip rule has its limits.

I was reminded of this over the Christmas break by a Retail Tenancies List decision – Versus (Aus) Pty Ltd v ANH Nominees Pty Ltd [2012] VCAT 1908.

In late 2011 the tenant-applicant won an order totalling almost $245,000 against its landlord – see Versus (Aus) Pty Ltd v ANH Nominees Pty Ltd [2011] VCAT 2273. In that case, after a 10-day hearing and a 62-page judgment, VCAT Vice-President Judge Lacava found that the landlord had failed to take reasonable steps to stop or prevent disruption to the tenant’s trading caused by, inter alia, a neighbour’s renovations.

The landlord duly paid up.

Almost a year later the tenant decided to go back to the well. It applied to VCAT under the slip rule for a further order which would have upped the original award by almost $96,000.

The application had three prongs.

Two were swiftly dealt with. Judge Lacava found both to require a total recalculation of damages in circumstances where the errors complained of and their consequences were “not readily identifiable.”

The third limb of the application was starker.

The landlord conceded that a typographical error (yes – a humble typo) in the original reasons had effectively cost the tenant $16,235. But it would not concede the slip rule application.

Quite right too ruled Judge Lacava.

He cited L Shaddock & Associates v City of Parramatta [1983] 151 CLR 590 to the effect that courts have a discretion when dealing with slip rule applications.

In my view, if there was an error capable of being corrected under s. 119 [of the VCAT Act dealing with slip rule applications], it ought to have been identified by the applicant and its accountants by the end of February 2012 at the latest and an application then made. That was not done. In my judgment, the delay in bringing this application for correction is unexplained and is too long. It is important that litigation be brought to an end. In this case, the respondent having promptly paid the amount of damages, it would be both inexpedient and inequitable for me to make the orders sought by the applicant in its further application dated 20 September 2012.

For these reasons, the applicant’s further application is dismissed.

The lessons?

Three occur to me:

  • Try to get it right the first time;
  • Don’t hang about when you (or the judge’s typist) muck it up; and
  • Don’t believe everything supervising partners tell their underlings.

Robert Hughes – a lawyer’s farewell

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Celebrated art critic and historian Robert Hughes died this week.

None of the many generous obits I have read have mentioned Hughes’s obscure and incidental career as a legal critic.

Let’s fix that.

In 1999 Hughes nearly died in a car accident near Broome, Western Australia. During his painful recuperation he was charged with driving offences arising out of that accident. He initially contested the charges but ultimately pleaded guilty.

In the interim passengers from the other vehicle offered (on the sly of course) to change their evidence in exchange for payment from Hughes. They were duly charged conspiring to pervert the course of justice.

Hughes, the baby brother of ex-federal attorney general “Frosty Tom” Hughes QC, was scathing about the whole episode. Among those he took a swipe at was the barrister who prosecuted him, Indian-born, Western Australian barrister Lloyd Rayney.

Hughes, among other things, allegedly described Rayney as a “curry muncher.”

Rayney then sued Hughes for defamation (which ultimately settled privately).

Coincidentally Rayney is now back in court again in a personal capacity. He is currently standing trial in Perth charged with the murder of his wife, Supreme Court Registrar Corryn Rayney. (See the WA News account here).

Rayney will be hoping for a better run in his murder trial from WA’s Director of Public Prosecutions than that accorded in another Perth murder trial to Paul Mallard.

Mallard was convicted of murder in 1995. The High Court subsequently overturned the conviction finding the prosecution had overcooked its case by failing to disclose important exculpatory evidence to the defence. (See an account of the High Court decision at Kyle McDonald’s summary crime blog).

Just how overcooked was the prosecution case against Mallard?

Pretty. Just last month (17 years after the event!) the prosecuting counsel copped a plea before WA’s Legal Profession Complaints Committee to unsatisfactory professional conduct and agreed that the maximum applicable fine was appropriate. (The Committee’s decision here was pointed out to me by the doyen of Melbourne’s legal bloggers Stephen Warne).

What would Robert Hughes have made of this?

Maybe we already know.

He once said “Western Australian justice is to ‘justice’ what Western Australian culture is to ‘culture’.”

Farewell Robert Hughes. At least outside WA you will be missed.

Charge and countercharge of overcharging in Sydney

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Is the expression “excessive legal costs” tautological?

Cynics might say so but not our regulators.

Section 4.4.4(b) of the Legal Profession Act (Vic) makes the “charging of excessive legal costs in connection with the practice of law” (surely a further tautology) conduct capable of constituting either ‘unsatisfactory professional conduct’ or ‘professional misconduct’.

New South Wales’ equivalent legislation saw former high-flying personal injuries soli Russell Keddie struck off last month for just such professional misconduct.

According to the Sydney Morning Herald account here Keddie’s bill of $819,000 to his paraplegic client was $215,00 too high.

Keddie is unlikely to miss his ticket – he retired before he was rubbed out.

Perhaps with a view to the many similar claims against him and his former firm, he also declared himself bankrupt last month.

Keddie’s sagging public reputation is unlikely to be assisted by reports (like further SMH yarns here and here) that before his bankruptcy he transferred his half share in two properties worth a combined $6 million to his wife for – you guessed it – a single dollar each.

The SMH has given the Keddies story a lot of air since 2008 but in Victoria only readers of the Oz are likely to have heard of it.

Keddie’s eponymous firm was once NSW’s leading personal injury plaintiffs’firm. Slater & Gordon took it over for a reported $32 million in 2010. By then Keddies had been been already in strife with NSW’s Legal Services Commissioner for at least 4 years.

Radio National revisited the Keddies saga in Background Briefing last Sunday, 22 July 2012 – audio here and transcript here.

Some highlights from the ABC’s retelling:

  • Aggrieved Keddies clients have already racked up approximately $4 million in judgments against the firm’s three former partners;
  • The ABC speculates that the total overcharging judgments might eventually top $11 million;
  • Enforcement of those judgments is likely to be problematic. Of the three ex-Keddies partners sued, one is already bankrupt and the other two have reportedly had their assets frozen;
  • The overcharging claims against Keddies have been spear-headed by solicitor Stephen Firth with the apparent assistance of some ex-Keddies Deep Throat(s);
  • Coincidentally, Stephen Firth is himself defending several overcharging claims. The plaintiffs’ solicitor in those cases? None other than ex-Keddies partner (and defendant to many Firth-issued overcharging writs) Tony Barakat.

Firth has been forthright in his pursuit of Keddies – see his website here where he boasts of 11 wins totalling $1.5 million in Keddies cases for the month of April alone.

And Barakat is not bashful either. See his comments to The Australian here about the claims against Firth.

Only in Sin City?

 

 

Safeguard your Mareva injunction with a PPSA registration

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I have just put the finishing touches to a seminar paper I am delivering this week on the Personal Property Securities Act 2009.

My paper is not as unwieldy and dry as the PPS Act itself (is anything?) but I wouldn’t call it sexy either. I will post it on its own discrete (ie separately tabbed) page in this blog after the seminar.

For an extremely short synopsis of the PPS Act generally see my post of 10 February 2012 (which you can access by simply following the date prompts below the mugshot in the right-hand margin of this page.)

But let me take you straight to what might be the highlight for general commercial litigators with Mareva-type injunctions in their armoury (and they should be in every armoury).

Once Mareva orders (aka ‘asset preservation orders’ and ‘freezing orders’) and some analogous orders are obtained from any Australian court or tribunal it seems they can be ‘perfected’ by registration on the PPS Register.

Such registration will effectively advertise the existence of your client’s Mareva injunction to the world at large. That ‘perfection’, among other things, should constructively warn off third parties who might otherwise purchase or lend against the property in breach of a court order restraining the use and/or disposal of that property.

This new tool lies buried in reg 5.3(c) of the PPS Regulations. I am not aware of it having been used since the PPSA regime started on 30 January 2012.

Is this history waiting to be made or has it been made already?

Anyone?

Is your enemy’s enemy your friend? Proportionate liability cases and the rule in Jones v Dunkel

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The rule in Jones v Dunkel permits a court to draw an inference at trial from a party’s unexplained failure to call a witness logically within that party’s camp. The permissible inference is that the absent witness’s evidence, if led, would not have assisted that witness’s camp.

The rule is not new.  It actually predates the case from which it takes its name – Jones v Dunkel (1959) 101 CLR 298.

Particularly since the commencement in 2004 of Part IVAA of the Wrongs Act (Vic) and its federal equivalents, apportionable liability cases have become commonplace. This has complicated the application of the Jones v Dunkel rule.

Co-defendants in commerical litigation now typically pitch their case at two levels:

  • firstly, they will argue in unison that the plaintiff’s case should fail;
  • secondly, as a fallback, they will argue against each other that, if the plaintiff succeeds, the other co-defendant(s) should wear all, or most, of the resulting liability.

These issues arose (on the pleadings at least) in Goddard Elliott v Fritsch [2012] VSC 87 (see my post below of 29 March 2012 for a brief overview of the case’s facts and issues).

There a disgruntled client sued his solicitors, plus the silk and senior junior retained on his behalf.

He alleged, inter alia, negligence against each of them. Both barristers settled but the solicitors fought the case to verdict. The barristers remained as nominal parties in the trial for the purposes of the apportionment issues.

In defending the negligence claim the solicitors did not call evidence from the silk in support of their case. But neither did the client call evidence from that silk in support of his case.

The client then asked the court to draw an adverse inference against the solicitors in accordance with the rule in Jones v Dunkel.

‘But the silk is an independent party and not within our camp’, replied the solicitors.

Bell J disagreed. Here are some extracts taken from between para 32 and 49 of the 1136 paragraph judgment:

“In the negligence and other claims which have been made, and in the factual basis of what has been alleged, the nature of that case puts all of the defendants by counterclaim in the one camp….

“… It was within the power of [the solicitors] to call [the silk] as a witness in relation to important issues of fact in the case, particularly [the client’s] mental capacity and what occurred when the proceeding in the Family Court was settled…

“As [the silk) was in [the solicitors’ firm’s] camp, it was reasonably to be expected that it would call him to give evidence on its behalf. For reasons which were not explained, it failed to do so.

“The unexplained failure of [the solicitors] to call [the silk] gives rise to an inference that his evidence would not have assisted [the solicitors’] case.  That inference may be taken into account against [the solicitors] in evaluating the whole of the evidence of the case, including the evidence of [the client]. By reason of [the solicitors’] failure to call [the silk] I might more readily resolve any doubts I have about the reliability of [the client’s] evidence.

Conclusion

This ruling illustrates a conundrum likely to arise in many (perhaps even most?) multi-party cases where an apportionment of liability as between defendants (and/or joined parties) is sought.

For each co-defendant, the plaintiff will typically be the primary adversary but not the only adversary. Typically, each of the co-defendants will also be trying to shunt maximum liability on to each other’s plates. In that sense, every other ‘camp’ in the litigation will be an enemy camp.

But, for the purposes of the rule in Jones v Dunkell, your opposition’s opposition might be considered (by the Court at least) to be your friend.  The co-defendant trying to minimise his liability at your expense might very well be considered to have been within your ‘camp’ in the event of your unexplained failure to call evidence from that person.

But dare you call a hostile co-defendant to give evidence on your behalf?

Therein lies a post for another day…